Vernon City Council
October 20, 2026

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SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND WESTERN

ALLIED CORPORATION FOR ON-CALL HEATING, VENTILATION, AND AIR

CONDITIONING (HVAC) SERVICES
This Agreement is made between the City of Vernon, a California charter City and California municipal corporation (“City”), and Western Allied Corporation, 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 October 20, 2026.

2.0 SCOPE OF SERVICES.

2.1 Contractor shall perform all work necessary to complete the services set forth in the City’s Request for Proposals issued on or about July 28, 2026, and titled RFP for On-Call Heating, Ventilation, and Air Conditioning (HVAC) Services and Contractor's proposal to the City ("Proposal") dated August 11, 2026, 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. ...
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4.0 TERM. The term of this Agreement shall commence on October 20, 2026, and it shall continue until October 19, 2029, 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 $250,000 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.
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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, ...
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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 used in connection with the performance of the work. 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 non-employee passengers in ...
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the performance of the services, the automobile liability policy 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, broad form property damage, premises/operations, products/ completed operations 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 occurrence form shall include coverage for premises and operations, product and completed operations, contractual liability, and broad form property damage. 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 ...
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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 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 Contractors Pollution Liability (CPL) policy limit shall provide coverage of no less than $2,000,000 per claim and on the aggregate. Covering claims arising from the release, discharge, dispersal, migration, or escape of pollutants, including but not limited to refrigerants, oils, lubricants, coolants, glycol, and other hazardous materials associated with HVAC repair, maintenance, installation, or replacement activities, Coverage shall apply to bodily injury; property damage, 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 Agreement CPL insurance that provides coverage for liability caused by pollution conditions arising out of the operations of the Contractor. Coverage shall be included on behalf of the insured for covered claims arising out of the actions of independent contractors. If the insured is using Subcontractors, the policy must include work performed “by or on behalf” of the insured.

10.3.2 All activities contemplated in the Agreement shall be specifically scheduled on the CPL policy as “covered operation.” In addition, the policy shall provide coverage for on-site and off-site cleanup ...
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and 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.

10.4 Umbrella/Excess Liability Insurance – An umbrella/excess (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 ...
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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 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 ...
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agent, officer or employee of City and shall furnish such services in its own manner and method except as required by this Agreement, or any applicable statute, rule, or regulation. Further, Contractor has and shall retain the right to exercise full control over the employment, direction, compensation and discharge of all persons employed by Contractor in the performance of the services hereunder. City assumes no liability for Contractor’s actions and performance, nor assumes responsibility for taxes, bonds, payments, or other commitments, implied or explicit, by or for Contractor. Contractor shall be solely responsible for, and shall indemnify, defend and save City harmless from all matters relating to the payment of its employees, subcontractors and independent contractors, including compliance with social security, withholding and all other wages, salaries, benefits, taxes, exactions, and regulations of any nature whatsoever.

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 ...
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and documents for its own files or for such other purposes as may be authorized in writing by the City.

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

11.5 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 ...
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material breach by the Contractor of its obligations under this Agreement. No assignment shall release the original parties from their obligations or otherwise constitute a novation.

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

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

11.11 INTERPRETATION.

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

11.11.2 Entire Agreement. This Agreement, including any exhibits attached hereto, constitutes the entire agreement and understanding between the parties regarding its subject matter and supersedes all prior or contemporaneous negotiations, representations, understandings, correspondence, documentation, and agreements (written or oral).

11.11.3 Written Amendment. This Agreement may only be
changed by written amendment executed by Contractor and the City Administrator or other authorized representative of the City, subject to any requisite authorization by the City Council. Any oral representations or modifications concerning this Agreement shall be of no force or effect.
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11.11.4 Severability. If any provision in this Agreement is held by any court of competent jurisdiction to be invalid, illegal, void, or unenforceable, such portion shall be deemed severed from this Agreement, and the remaining provisions shall nevertheless continue in full force and effect as fully as though such invalid, illegal, or unenforceable portion had never been part of this Agreement.

11.11.5 Order of Precedence. In case of conflict between the terms of this Agreement and the terms contained in any document attached as an Exhibit or otherwise incorporated by reference, the terms of this Agreement shall strictly prevail. The terms of the City’s Request for 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.
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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: Daniel Wall, Director of Public Works
4305 Santa Fe Avenue
Vernon, CA 90058
If to the Contractor:

Western Allied Corporation
Attention: Michael Gallagher, Vice President
P.O. Box 3628
Santa Fe Springs, CA 90670
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. ...
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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 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 ...
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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.

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

11.25 EQUAL EMPLOYMENT OPPORTUNITY PRACTICES. Contractor certifies and represents that, during the performance of this Agreement, it and any other parties with whom it may subcontract shall adhere to equal employment opportunity practices to assure that applicants, employees and recipients of service are treated equally and are not discriminated against because of their race, religion, color, national origin, ancestry, disability, sex, age, medical condition, sexual orientation or marital status. Contractor further certifies that it will not maintain any segregated facilities.

Contractor further agrees to comply with The Equal Employment Opportunity Practices provisions as set forth in Exhibit “C”.
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EXHIBIT A

CONTRACTOR'S PROPOSAL
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Services Agreement

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EXHIBIT B

SCHEDULE
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Services Agreement

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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.
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City Council Agenda Report
Meeting Date: October 20, 2026
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Principal Management Analyst Subject
Regulatory Mandate to Increase Procurement of Energy from Renewable Sources Recommendation
Receive and file the annual Renewable Portfolio Standard (RPS) Report for Calendar Year 2025 and Summary Report for Compliance Period 5
Background
The Vernon Public Utilities Department (VPU) has prepared the Renewable Portfolio Standard Annual Status Report for Calendar Year 2025. A Renewable Portfolio Standard (RPS) is a regulatory mandate to increase the generation of energy from renewable sources. VPU is responsible for implementing and enforcing a renewable portfolio standard for the utility that recognizes the Legislature's intent to encourage the use of renewable resources, while taking into consideration the standard's effects on rates, reliability, financial resources, and the goal of environmental improvement.

VPU is making progress toward achieving the goals established under Senate Bill 350 (SB 350), Senate Bill 100 (SB 100), and Senate Bill 1020 (SB 1020). These bills collectively establish a landmark policy requiring that renewable and zero-carbon resources supply 100 percent of retail electricity sales to customers by 2045.

VPU has procured eligible renewable resources to meet the mandated 46 percent RPS target for calendar year 2025.

VPU is actively pursuing additional renewable energy contracts for Calendar Years 2026 through 2045 to further advance the objectives of SB 350, SB 100, and SB 1020.

Nevertheless, VPU staff are currently encountering challenges with the delays and cancellations of renewable energy projects due to:
• Interconnection and transmission constraints;
• Tariffs imposed on solar panels and battery energy storage system (BESS) equipment; and
• The phase out of federal tax credits, under the recently signed “H.R. 1 - One Big Beautiful Bill Act,” that were previously available under the Inflation Reduction Act.

Despite these challenges, VPU staff are reviewing all options, including long-term contracts (i.e., ten years or more) to ensure that VPU meets the interim renewable targets for the remaining compliance periods.

Strategic Plan Goals
Goal 3: Advance Sustainability and Environmental Stewardship Fiscal Impact ...
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There is no fiscal impact associated with this report.

Attachments

1. 2025 RPS Status Report and Compliance Period 5 Totals ...
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Renewable Portfolio Standard
Annual Status Report for Calendar Year 2025
& Summary Report for Compliance Period 5
Background
Vernon Public Utilities (VPU) is responsible for implementing and enforcing a Renewable Portfolio Standard (RPS) that reflects the Legislature’s intent to encourage the use of renewable resources, while also considering the impact of the standard on rates, reliability, financial resources, and environmental goals.

As specified in the RPS Program and California Energy Commission (CEC) regulations, VPU is not required to procure an exact fixed quantity of RPS-eligible resources in each individual year during Compliance Period 5 (CP5). However, VPU must procure sufficient eligible renewable resources over the full three-year compliance period to meet or exceed the CP5 procurement requirement, as calculated using the equation below:
 (Approximately 46% of 2025 retail sales) +
 (Approximately 49% of 2026 retail sales) +
 (Approximately 52% of 2027 retail sales)
This results in an average procurement target of approximately 50% for the entire compliance period, which is evaluated over the 2025–2027 compliance period.

As part of its RPS compliance obligations, VPU must also comply with the RPS long-term contracting requirements applicable to Publicly Owned Utilities (POUs). On May 7, 2020, the CEC issued proposed regulations to implement changes to these requirements under the Clean Energy and Pollution Reduction Act (SB 350). SB 350 established a requirement, effective January 1, 2021, that at least 65% of RPS-eligible procurement be sourced through contracts with terms of 10 years or more.

All of VPU’s existing and future renewable energy projects qualify under the “Long-Term Procurement Requirements” as defined by the CEC.

Performance Summary
Calendar Year 2025 marks the first year of CP5, which covers January 1, 2025, through December 31, 2027.

The annual RPS requirement for 2025 is approximately 46%, and VPU’s CY 2025 procurement will be included in the overall CP5 compliance evaluation. VPU procured approximately 52% for CY 2025. This higher level of procurement is primarily due to deliveries under several short-term renewable energy contracts that provide flexibility to determine when the renewable energy is delivered within the applicable contract terms. Several of these contracts exercised their delivery options during CY 2025, resulting in higher renewable procurement for the year. VPU’s CY 2025 renewable procurement was supplied through Vernon’s long-term solar contracts and short-term renewable energy purchases, as applicable. A summary of CY 2025 totals is provided in Table 1.

Renewable Energy Procurement in Calendar Year 2025
Pursuant to VPU’s RPS Procurement Plan and Enforcement Program, action has been taken to acquire renewable energy resources to meet the RPS requirements. Below is a brief description of the renewable resources utilized to achieve compliance.

Sustainable Power Group (sPower) Antelope DSR Solar Project The Antelope DSR Solar Project, developed by Sustainable Power Group (sPower), was selected from numerous responses to the Southern California Public Power Authority’s (SCPPA) Request for Proposals (RFP) issued in 2014. In collaboration with other SCPPA members, VPU staff conducted a comprehensive review of the ...
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submitted projects and determined that the Antelope DSR Project offered several superior characteristics and a highly competitive pricing structure compared to other renewable projects considered at the time.

The final project pricing was the lowest among technologies providing on-peak energy profiles. Energy generated by the project qualifies as Portfolio Content Category 1 (PCC1), the most valuable and preferred class of renewable energy under SB X1-2.

The project is located in the City of Lancaster, Los Angeles County, and has been in full commercial operation since January 1, 2017. VPU holds a 25-megawatt (MW) entitlement, along with associated environmental attributes, under a 20-year power purchase agreement.

Astoria Phase II Solar Project
Astoria II LLC has entered into a long-term Power Purchase Agreement (PPA) with the SCPPA to develop a solar photovoltaic facility with a net capacity of approximately 175 MW. This contractual arrangement is considered firm generation and is jointly shared with other SCPPA municipal utility partners. By collaborating with these partners, VPU gains the critical mass needed to participate in large-scale renewable energy projects.

This joint strategy helps reduce construction, financing, and operational costs, enabling VPU to achieve economies of scale and secure more favorable financing terms.

The project, located in Kern County, began full commercial operation on December 31, 2016, with SCPPA taking delivery of 75 MW of the energy produced. VPU, along with five other SCPPA member utilities, is participating in the PPA to purchase energy from the facility over a 20-year term.

The Vernon City Council approved the PPA (through SCPPA) with Astoria II to supply renewable energy to the VPU. Under this agreement, VPU is entitled to:
 20 MW of capacity from January 2017 through December 2021  30 MW of capacity from January 2022 through December 2036 Puente Hills Gas to Energy Project
The Puente Hills Landfill Gas-to-Energy Station was constructed by the Los Angeles County Sanitation District in the 1980s. Located in southeastern Los Angeles County, near VPU’s service area, the facility has been in full commercial operation since January 1987 and has maintained an average online availability of 95%. It produces approximately 46 MW of generating capacity.

The facility is a conventional Rankine Cycle steam power plant that uses landfill gas (LFG) as its primary fuel source. The LFG is combusted in boilers to produce superheated steam, which drives a steam turbine generator to produce electric power.

VPU, through a PPA with SCPPA, secured 10 MW of renewable energy from the Puente Hills facility beginning January 1, 2017, through December 31, 2030. In 2020, VPU received an average of just over 5 MW from this facility.

Desert Harvest II Solar Project
The Desert Harvest Solar Photovoltaic Facility was developed by EDF Renewable Development Group and is located in Riverside County. The facility has a net capacity of 150 MW.

VPU, in partnership with Anaheim Public Utilities and Burbank Water and Power, is participating in a PPA through SCPPA to purchase 70 MW of the facility's output. Under this agreement, VPU holds a 12 MW entitlement, along with the associated environmental attributes, for a 20-year term.

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Daggett Solar 2 + BESS Project
The Daggett Solar Power 2 Photovoltaic Facility, paired with battery storage, was developed by Clearway Renewables Development Group in San Bernardino County. VPU holds exclusive rights to 60 MW of solar energy and 30 MW of battery capacity.

In collaboration with another SCPPA municipal utility, the City of Cerritos, which has committed to the remaining 5 MW of solar and 3 MW of battery capacity, VPU participates in a PPA to acquire a total of 65 MW of solar and 33 MW of battery output.

This project represents VPU’s first venture into battery storage technology, allowing energy to be stored from the solar system or the grid during the day, when prices are low, and then discharged during peak evening hours, when prices are higher.

VPU has secured a 60 MW entitlement, along with associated environmental attributes, under a 20-year agreement. The project achieved commercial operation on December 12, 2023.

Harquahala Sun I Solar Project
The Harquahala Sun I Photovoltaic Facility was developed by BP Energy Company and is located in Maricopa County, AZ. The facility has a net capacity of 150 MW.

Beginning January 01, 2026, VPU is participating in a PPA directly with BP Energy to purchase approximately 50 MW of the facility's output. Under this agreement, VPU will receive approximately 140,000 to 200,000 Renewable Energy Credits (REC’s) annually for a 10-year term.

The facility achieved commercial operation in April 2025.

NRG Solar Project
Beginning January 1, 2028, VPU will participate in a PPA with NRG Business Marketing LLC to purchase approximately 25 MW of renewable energy. Under the terms of the PPA, NRG may satisfy VPU's REC deliveries by drawing on a portfolio of eligible renewable generating facilities identified in the agreement. VPU is expected to receive approximately 70,000 to 100,000 RECs annually over the 10-year term of the agreement.

Short Term Purchases
Short-term purchases for CP5 were as follows:

PCC1 – 147,098 MW’s
PCC2 – 100,000 MW’s
PCC3 – 96,442 MW’s
The following tables provide an overall assessment of VPU renewable resources and RPS requirements for CY 2025 (Table 1).
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Table 1: RPS Compliance Status Report for CY 2025
Summary of Procurement Plan to meet Future RPS Requirements VPU is committed to meeting all future renewable energy procurement targets, subject to factors beyond its control. With increasing RPS mandates for POUs over the next decade, VPU recognizes the need to enhance and diversify its renewable energy portfolio. To address this, VPU plans to develop a balanced RPS strategy that incorporates solar PV, wind energy, and other renewable resources, based on projected energy demand, economic feasibility, and project availability. An Integrated Resource Plan has also been completed to help guide procurement decisions.

To comply with RPS mandates, VPU will preserve its existing renewable resources, carry over any excess procurement from one compliance period to the next, and pursue timely, cost-effective opportunities to expand its portfolio. This includes seeking short-term purchase options to diversify its energy mix while protecting ratepayers from sharp price increases that could negatively impact economic stability and growth within the city.

In accordance with state regulations effective January 2017, at least 75% of RPS procurement used for compliance must qualify as Bucket 1 (PCC1), which typically involves bundled energy from California-based renewable power plants. Additionally, beginning January 1, 2021, at least 65% of RPS procurement must be sourced through contracts with terms of 10 years or more.

Given the limited availability of Bucket 1 resources and the typical three- to five-year development timeline for new utility-scale renewable projects, VPU is working closely with the SCPPA to access a broader range of renewable resources. Through SCPPA’s competitive procurement process, Vernon can take advantage of opportunities that might otherwise be inaccessible due to its smaller size.

Retail Sales (MWh) 1,023,678
Renewables Requirement (%) 46%
Renewables Requirement (MWh) 470,892
RPS Resources
Antelope DSR (Solar) 61,199
Astoria II (Solar) 57,937
Desert Harvest (Solar) 31,703
Puente Hills (Landfill Gas) 33,373
Daggett (Solar) Banked
Bucket 1 (PCC1) Short Term 147,098
Bucket 2 (PCC2) 100,000
Bucket 3 (PCC3) 96,422
Total Renewable Procured (MWh) 527,732
Total Renewable Procured (%) 52%
Calendar Year 2025
Renewable Portfolio Standard Compliance
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VPU has secured multi-year contracts for solar and landfill gas power generation to meet the State of California’s RPS requirements, as outlined in SB 350 and SB 100. Since these resources became operational on January 1, 2017, the share of bundled renewable energy in VPU’s supply portfolio has significantly increased. This has positioned the City well to achieve approximately 50% target for CP5.

The following table summarizes VPU’s procurement plans and activities for Compliance Periods 5 through 7, detailing the renewable energy purchases required to meet the goals of SB 350, SB 100, and SB 1020.

Table 3: RPS Compliance (January 1, 2025 – December 31, 2033) Actuals Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 2025 2026 2027 2028 2029 2030 2031 2032 2033
A) Retail Sales (MWh) 1,023,678 1,091,939 1,091,939 1,119,450 1,147,649 1,147,649 1,147,649 1,147,649 1,147,649 Required Renewables % 46.67% 49.33% 52.00% 54.67% 57.33% 60.00% 60.00% 60.00% 60.00% Category 1 75% 75% 75% 75% 75% 75% 75% 75% 75%
Category 2 15% 15% 15% 15% 15% 15% 15% 15% 15%
Category 3 10% 10% 10% 10% 10% 10% 10% 10% 10%
Required Renewables (MWh)
Category 1 403,990 358,313 425,856 459,003 493,460 516,442 516,442 516,442 516,442 Category 2 80,798 71,663 85,171 91,801 98,692 103,288 103,288 103,288 103,288 Category 3 53,865 47,775 56,781 61,200 65,795 68,859 68,859 68,859 68,859 B) Renewables Requirement Total (MWh) 477,751 538,654 567,808 612,003 657,947 688,589 688,589 688,589 688,589 CP5 (2025-2027) CP7 (2031-2033) CP6 (2028-2030)
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City Council Agenda Report
Meeting Date: October 20, 2026
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Principal Management Analyst Subject
Services Agreement with StoneX Financial, Inc. – FCM Division Recommendation
A. Find that the best interests of the City are served by a direct award of a Services Agreement with Stone X Financial, Inc. - FCM Division (StoneX) without a competitive selection process pursuant to Vernon Municipal Code Sections 3.32.110(B)(2) and (3); and B. Approve and authorize the City Administrator to execute a Services Agreement with StoneX, in substantially the same form as submitted, to provide Integrated Energy Risk Management & Analytics Services for an amount not-to-exceed $234,000, for a three-year term.

Background
Vernon Public Utilities (VPU) provides essential services to the City’s business and residential communities, including a full range of dependable, high-quality, and competitive electric, water, natural gas, and fiber-optic services. As an electric and natural gas service provider, VPU has significant energy and natural gas procurement and hedging requirements for its retail electric and natural gas customers, and the reliable operation of the natural gas-powered Malburg Generating Station.

On November 15, 2022, the City Council adopted Resolution No. 2022-40, approving VPU’s Energy Risk Management Policy (Policy). The Policy establishes operational and financial procedures for purchasing and selling energy and natural gas, ensuring that Vernon receives optimal value in its energy procurement efforts. It specifically addresses the management of the energy and natural gas portfolio through designated procedures and requirements and provides a framework for maintaining proper internal controls over portfolio activities.

On November 7, 2023, the City Council approved a three-year Services Agreement with StoneX Financial, Inc. – FCM Division (StoneX) to provide energy risk management services. Subsequently, on October 7, 2025, the City Council approved Amendment No. 1 to the Services Agreement with StoneX, which modified the scope of work to include the StoneX Plus Energy Analytics platform.

The current Services Agreement with StoneX is set to expire on November 6, 2026. Over the past three years, StoneX has provided critical natural gas hedging, credit and energy risk management support, risk analytics, and market intelligence that have been instrumental for VPU in stabilizing its natural gas costs, assessing counterparty credit risk, and ensuring compliance with the City Council-approved Energy Risk Management Policy.

During this period, StoneX has thoroughly reviewed VPU’s existing Energy Risk Management Policy and procedures and provided recommendations based on industry best practices, evaluated its hedge strategy, and analyzed VPU’s energy portfolio. They have also conducted risk analysis reporting, credit risk evaluations, and monitoring VPU’s counterparties. Additionally, StoneX has provided ongoing consulting on hedge strategies and market intelligence to ensure ... ...

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VPU meets its long-term natural gas hedging benchmarks, thereby supporting VPU’s strategy to deliver competitive rates and cost savings to its customers.

With more than 35 years of experience in providing risk management services and software products, StoneX has a proven track record in managing energy price and credit risks. The proposed Services Agreement will enable StoneX to continue delivering energy risk management services and portfolio analytics related to the procurement of power and natural gas, including access to StoneX’s analytics platform.

The scope of work includes:
• Periodic energy risk management policy and procedures review • Ongoing hedge strategy consulting and market intelligence • StoneX Plus Energy Analytics: StoneX Commodity Indicator, HedgeMonitor Pro, Forecast Tool
• Know-Risk position tracking and mark-to-market reporting • Know-Risk credit limit status reporting
• Counterparty credit risk evaluation, collateral review, and credit news The proposed agreement is exempt from competitive bidding pursuant to Section

3.32.110(A)(10) of the Vernon Municipal Code (VMC) and can be exempt from competitive selection pursuant to Section 3.32.110(B)(2) if a direct award is found to be in the best interests of the City. Section 3.32.110(B)(3) of the VMC indicates that the City Council has the authority to make such a finding when the proposed contract exceeds $100,000. The city's best interests are served by a direct award based on StoneX’s demonstrated expertise in energy risk management, governance and policy, hedge strategy design, hedge plan analytics, position and exposure reporting, recurring market intelligence, and counterparty credit monitoring to VPU, as outlined in this staff report. StoneX has effectively assisted VPU in maintaining and implementing energy procurement strategies, conducting credit evaluations, and ensuring compliance with Resolution No. 2022-40. Continuing the partnership with StoneX will maintain the operation of VPU’s energy risk management structure, thereby ensuring long-term energy hedging and stable costs for the City’s customers.

Staff recommends that the City Council approve a Services Agreement with StoneX for a total amount not-to-exceed $234,000 to provide integrated energy risk management and analytics services. 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.

The proposed Services Agreement has been reviewed and approved as to form by the City Attorney's Office.

Strategic Plan Goals
Goal 6: Optimize Public Utility Operations to Ensure Affordable Services Fiscal Impact
The fiscal impact is estimated not-to-exceed $234,000. Sufficient funds are available in the Electric Fund, Administration, Professional Services-Other, Account Number 055-050-580- 529215 for the current fiscal year and will be budgeted in subsequent years.

Attachments

1. Services Agreement with StoneX Financial, Inc. – FCM Division ...
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Meeting Date: October 20, 2026
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Principal Management Analyst Subject
Southern California Public Power Authority (SCPPA) Task Order No. VPU-01 with Resource Innovations, Inc.

Recommendation
A. To the extent that the Task Order authorizes installation services, find that the proposed action is categorically exempt from California Environmental Quality Act (CEQA) review, in accordance with CEQA Guidelines Section 15301, because the project consists of the maintenance, repair or minor alteration of existing facilities/equipment and involves negligible or no expansion of an existing use; and
B. Approve and authorize the City Administrator to execute SCPPA Task Order No. VPU-01 for services from Resource Innovations, Inc. to provide energy audits for utility customers, directinstallation of energy efficiency measures at City facilities/buildings, and technical support on utility efficiency programs for a total amount not-to-exceed $400,000, through March 19, 2028; with an option to extend the Task Order up to three years.

Background
With the enactment of California’s Assembly Bill (AB) 1890 in 1998, Vernon Public Utilities (VPU) has established several Public Benefit programs designed to encourage the efficient use of electricity at customer facilities. These long-standing, energy efficiency-focused initiatives require technical support from a third-party energy engineering consultant to ensure successful implementation.

To facilitate the implementation of these programs, following a Request for Proposal (RFP) process, the City Council approved a Services Agreement on December 5, 2023, with Richard Heath & Associates, Inc. (RHA) to provide energy audits, engineering support, and direct installation services through December 4, 2026. In February 2025, RHA was acquired by Resource Innovations, Inc. (RI).

As the current agreement with RI (formerly RHA) is set to expire in December 2026, VPU is looking to continue successfully executing its efficiency and electrification programs. This will require ongoing technical assistance, including on-site energy audits, energy-efficiency retrofit recommendations, and support for implementing utility programs. Additionally, the installation of energy-efficiency measures in City-owned buildings may also be required, on an as-needed basis, as determined by VPU.

Following a competitive solicitation process, on March 20, 2025, SCPPA entered into a Master Goods and Services Agreement (MGSA) with RHA (now RI) for energy-efficiency audits and direct installation services. This agreement has a three-year term with the option to extend it for up to three additional years.

As a member of SCPPA, VPU has the ability to contract with vendors that have completed SCPPA’s competitive bidding process for professional services. SCPPA is a public entity duly organized and existing under the Joint Exercise of Powers Act (Cal. Government Code sec. 6500 ...
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et seq.), under a Joint Powers Agreement (JPA) entered into by and among the cities of Anaheim, Azusa, Banning, Burbank, Cerritos, Colton, Glendale, Los Angeles, Pasadena, Riverside, Vernon, and the Imperial Irrigation District (Members) with authority to engage in various activities supportive of the Members’ electric utilities. The SCPPA Board of Directors is responsible for the general management of the affairs of SCPPA, and under the JPA, has the power, among other things, to make and enter into contracts for services specific to electric utility needs. This allows VPU and other member agencies to benefit from economies of scale and procure goods and services with volume discounts.

VPU staff recommends that the City Council approve the SCPPA Task Order No. Vernon-01 with RI (Attachment 1) to provide energy-efficiency audits, direct installation, and energy-efficiency program implementation services for a total amount not-to-exceed $400,000 through March 19, 2028; with an option to extend the Task Order up to three years. According to Vernon Municipal Code (VMC) Section 3.32.110(A)(5) and (B)(1), the proposed Task Order with RI is exempt from competitive bidding and competitive selection, as the services will be in cooperation with SCPPA, which offers participating members cooperative, competitively solicited contracts. Additionally, pursuant to VMC Section 3.32.030(A), City Council approval of the proposed Task Order is necessary since the cost exceeds $100,000.

SCPPA Task Order No. VPU-01 has been reviewed and approved as to form by the City Attorney’s Office. Exhibit B to the MGSA between SCPPA and RHA contains confidential and proprietary information and will be provided to the City Council under separate cover; a redacted version (Attachment 2) is included in the public Agenda Packet.

Strategic Plan Goals
Goal 3: Advance Sustainability and Environmental Stewardship Fiscal Impact
The total fiscal impact is not to exceed $400,000. Sufficient funds are available in the Electric Fund, Customer Programs, Public Benefit Rebate Program, Account No. 055-050-595-529702 for the current fiscal year and will be budgeted in subsequent years.

Attachments

1. SCPPA Task Order No. VPU-01 with Resource Innovations, Inc.

2. Master Goods and Services Agreement between SCPPA and Richard Heath Associates, Inc. (Redacted)
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Resource Innovations, Inc.

Task Order No.VPU-01
Vernon Public Utilities
TASK ORDER No.: VPU-01
Date: December 1, 2026
Project Description: Energy Audits, Direct Installation, and Energy Efficiency Program Implementation
Participating Member (if applicable): City of Vernon, Public Utilities Department (“VPU” or “Participating Member”)
Contractor: Resource Innovations, Inc. (“Contractor”)
Contractor, SCPPA and the Participating Member identified above agree that Contractor shall provide the Services specified herein pursuant to the terms and conditions of the Master Goods and Services Agreement between SCPPA and Contractor dated March 20, 2025, and as may be amended from time to time (“Agreement”), except as specifically modified herein. Capitalized terms used but not described herein shall have the meanings ascribed to them in the Agreement.

Term
This Task Order shall commence upon issuance of a purchase order by SCPPA and shall remain in effect for the term of the Agreement unless sooner terminated as provided herein. Any Goods received or Services provided by Contractor (i) prior to issuance of a SCPPA purchase order, or (ii) on or after the termination of the Task Order without prior execution of an amendment hereto by the Parties, shall be at Contractor’s sole risk and without payment. SCPPA or Participating Member may terminate this Task Order, with or without cause, upon thirty (30) calendar days’ written notice to Contractor.

Scope of Services
Resource Innovations shall provide technical assistance in the form of Energy Audits, Direct Installation (city-owned buildings only, on an as needed basis), and Energy Efficiency Program Implementation services per Attachment 1.

Compensation
Price to perform the above referenced tasks is based on the fee schedule set forth in Exhibit B of the Agreement.

The total amount payable to Contractor for the Scope of Services under Task Order No. VPU-01 shall not exceed Four Hundred Thousand Dollars ($400,000) (the “Not to Exceed Amount”).

Contractor shall provide notice to SCPPA and Participating Member prior to and upon reaching the Not to Exceed Amount. Any Goods received or Services provided by Contractor in excess of the Not to Exceed Amount, without prior execution of an amendment hereto by the Parties, shall be at Contractor’s sole risk and without payment. For avoidance of doubt SCPPA and Participating Member shall not be liable for any unauthorized excess billings whatsoever. ...
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Resource Innovations, Inc.

Task Order No.VPU-01
Vernon Public Utilities
Representative(s) of Participating Member(s)
Jonathan Sun
Customer Relations Manager
4305 S. Santa Fe Avenue
Vernon, CA 90058
(323) 826-3643
[email protected]
Execution in Counterparts; Electronic Signatures
This Task Order may be executed in counterparts, and, upon execution by each signatory, each executed counterpart shall have the same force and effect as an original instrument and as if all signatories had signed the same instrument. Any signature page of this Task Order may be detached from any counterpart of this Task Order without impairing the legal effect of any signature thereon, and may be attached to another counterpart of this Task Order identical in form hereto by having attached to it one or more signature pages.

The Parties may execute this Task Order by manual signature or by electronic signature, each of which shall have the same force and effect. A signed copy of this Task Order transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Task Order for all purposes, to the extent provided under applicable law, including California’s Uniform Electronic Transactions Act. ...
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Resource Innovations, Inc.

Task Order No.VPU-01
Vernon Public Utilities
IN WITNESS WHEREOF, the parties have signed this Task Order No. VPU-01 as of the date first written above.

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:

DANIEL E GARCIA
Executive Director
Approved as to Legal Form:

CHRISTINE GODINEZ
General Counsel
RESOURCE INNOVATIONS, INC.

By:

JENNIFER BALLARD CROFT
Vice President
Participating Member’s Acknowledgement and Agreement
The undersigned hereby attests that the undersigned has the requisite authority to bind the Participating Member to the obligations set forth in this Task Order No. VPU-01. Participating Member agrees to be responsible for any and all fees, costs and expenses invoiced to SCPPA by Contractor for work performed on behalf of, or for the benefit of, Participating Member pursuant to the Agreement.

Participating Member agrees to indemnify, defend and hold harmless SCPPA, all other Members and their respective directors, officers, agents, representatives, employees, successors and assigns from and against any and all losses, injuries, costs and expenses, damages, liens, claims, or liabilities, including reasonable attorney’s fees, incurred by SCPPA in connection with the Work performed for the benefit of, or on behalf of, Participating Member pursuant to this Task Order, except for the gross negligence or willful misconduct of SCPPA or such other SCPPA members, and their officers, agents, representatives or employees.

CITY OF VERNON
By:

BRIAN SAEKI
City Administrator
Attest:

Genoveva Rocha, City Clerk
Approved as to Form:

Zaynah Moussa Milward,
City Attorney
By:

KEVIN HADLOCK
Chief Financial Officer
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Resource Innovations, Inc.

Task Order No.VPU-01
Vernon Public Utilities
ATTACHMENT 1

STATEMENT OF WORK

1.0 STATEMENT OF WORK
VPU offers several longstanding customer programs and services that are designed to encourage the efficient use of energy. To successfully implement the energy efficiency programs, VPU will require technical assistance in the form of energy audits and program implementation support.

The installation of energy efficiency measures in City-owned buildings/facilities may also be required on an as-needed basis, upon approval by VPU.

2.0 SCOPE OF SERVICES
Energy Audit
Services to be performed by VPU:

2.1 Determining approved customers, participant eligibility and qualification requirements

2.2 On an as needed basis, VPU will provide the Contractor, in writing, or through electronic media, authorized task assignments for specific Program services to be performed during the term of the Task Order. Such authorizations shall include specific information as to approved customers’ addresses, phone numbers, specific services to be provided, and the desired time frame for performance or said services.

Services to be performed by the Contractor:

2.3 Contractor shall perform a comprehensive on-site audit to analyze the energy consumption, taking into account the building structure, equipment, schedule of operations, occupant’s usage profiles at the premise and prepare detailed reports in compliance with the standards for American Society of Heating, Refrigeration and Air Engineers (ASHRAE) Level 2 Energy Audits.

2.4 Contractor shall collect information for each customer’s facility including, but not limited to the following:

2.4.1 Energy consumption, site plans, operational parameters for major occupancy areas, existing or planned Energy Conservation Measures (ECMs), or constraints such as occupant comfort and operational considerations such as temperature and lighting
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Task Order No.VPU-01
Vernon Public Utilities

2.4.2 Inventory of existing systems and equipment, including areas where the energy usage may be different than the design intent of the original building, operational/maintenance practices, future plans or changes which could substantially change the energy consumption of the premise.

2.4.3 Provide analysis methodology, supporting calculations and assumptions used to derive base year consumption and reconcile with end use consumption estimates

2.4.4 Itemize HVAC, production, or distribution equipment for the facility, water systems, gas systems, lighting, refrigeration and other major system components, to a level of confidence such that “all other” consumption drivers may be bundled generically into a single category representing less than 10% of the total.

2.5 As part of the audit, Contractor shall develop a list of potential ECMs, specifically identifying the energy improvements and operational changes that are recommended to be installed or implemented at customer facilities, including detailed projections of energy savings to be obtained as a result of the installation of recommended measures (in kW demand, kWh consumption and/or therms).

2.6 Contractor shall provide ECM cost estimates using reputable industry sources to identify including simple payback and/or return on investment (ROI) calculations.

2.7 Contractor shall present savings calculations utilizing assumptions, projections and baselines which best represent operational savings for the ECMs based on a “lifecycle analysis” of the measure, equipment, or device.

2.8 Contractor shall educate VPU customers on the value of the recommended energy efficiency measures.

2.9 Contractor shall also help the customer better understand the available incentive programs that are offered through VPU, which includes, but are not limited to the Custom Incentive Program and Commercial Energy Rebates Program.

2.10 Contractor shall outline a plan for potentially installing or implementing ECMs within the customer facilities including the proposed operations and maintenance procedures which will be affected by the installation/implementation of the proposed ECMs.

2.11 Contractor shall provide a preliminary measurement and verification (M&V) plan for each proposed ECM.

2.12 Records of all energy audits shall be maintained by the Contractor and provided to VPU upon completion of the energy audit.
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Resource Innovations, Inc.

Task Order No.VPU-01
Vernon Public Utilities
Program Implementation
Services to be performed by the Contractor:

2.13 Provide guidance and policy support on best practices to implement utility energy efficiency programs and services.

2.14 Evaluating and validating energy savings from measures or equipment installed by the customer, this includes pre and post install measurement and verification (M&V).

2.15 Assist VPU with the development and implementation of program procedures, requirements and energy savings for deemed measures.

2.16 Develop energy efficiency savings calculation tools for lighting and non-lighting measures on an as needed basis

2.17 Perform detailed analysis such as data logging or energy modeling on capital intensive modifications on customer premises, which include new construction projects or new equipment that has been installed in a newly constructed area, or in an area that has been subject to a major renovation involving complete multisystem replacement or area reconstruction.

2.18 Prepare monthly reports that highlight activities and expenditures on different VPU energy efficiency programs.

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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 1 MASTER GOODS AND SERVICES AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
RICHARD HEATH & ASSOCIATES, INC.

This MASTER GOODS AND SERVICES AGREEMENT (“Agreement”) is dated and effective March 20, 2025, by and between Richard Heath & Associates, Inc. ("Consultant" or “RHA”), a California Corporation, located at 590 W. Locust Street, Suite 103, Fresno, CA 93560, and Southern California Public Power Authority ("SCPPA"), a joint powers agency created pursuant to the laws of the State of California, with offices at 1160 Nicole Court, Glendora, California 91740. SCPPA and Consultant are also referred to herein individually as “Party” and together as “Parties.” Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.

WHEREAS, SCPPA member utilities (“Members”) are engaged in the generation, transmission, and distribution of electrical energy to retail customers; and WHEREAS, SCPPA has been formed for the purpose of undertaking the planning, financing, development, acquisition, construction, reconstruction, improvement, enlargement, betterment, operation, or maintenance of projects involving the generation, transmission, and distribution of electrical energy for the benefit of its Members (“Purpose”); and WHEREAS, SCPPA has a need for goods and/or professional and technical services including studies and reports to facilitate SCPPA’s Purpose and that support its Members’ procurement of generation and transmission resources and their obligation to first acquire energy efficiency and demand reduction resources that are cost effective, reliable, and feasible as mandated by Section 9615 of the California Public Utilities Code; and WHEREAS, Consultant is qualified and capable of providing the goods and/or services specified herein which are consistent with SCPPA’s Purpose.

NOW, THEREFORE, in consideration of the premises herein and for other good and valuable consideration, the Parties agree as follows:

1. Work to be Provided:

SCPPA engages Consultant to provide goods and/or services and related tasks (“Goods” or “Services,” respectively, or collectively “Work”) outlined in Exhibit A for itself and its ...
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 2 Members to utilize pursuant to one or more separate task orders (“Task Order”) substantially in the form attached hereto as Exhibit C. The Work performed and provided by Consultant under all Task Orders shall be based upon the price terms listed in Exhibit B, provided that in no event shall the payments to Consultant exceed the designated maximum amount listed in Exhibit B for all Task Orders under this Agreement. Each Task Order shall specify the tasks and assignments from among the Work identified in Exhibit A, to be performed and provided by Consultant. Each Task Order may include a cap for all payments for Work performed and provided under each individual Task Order and a time schedule for completion of the Work.

Any Member that elects to participate in any individual Task Order is referred to herein as the "Participating Member."

2. Consultant’s Services and Personnel:
(a) Independent Contractor. Consultant is an independent contractor. Neither the Consultant nor the Consultant’s employees or agents are employees of SCPPA or any Member and shall not be entitled to any employment benefits or rights afforded by SCPPA or Members to their employees, including, but not limited to, sick leave, vacation leave, paid leave, holiday pay, retirement benefits, worker’s compensation, or other insurance benefits.

Consultant hereby warrants that: (1) The Consultant and its employees and agents are free from the control and direction of SCPPA and its Members in connection with the performance of the work to be provided hereunder, both under this contract and in fact, (2) The Consultant and its employees and agents perform work that is outside the usual course of SCPPA’s business, and (3) the Consultant and its employees and agents performing Work under this Agreement are customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the Work to be performed under this Agreement. Consultant shall furnish the Work according to its own manner and methods except as required by applicable laws and this Agreement. Consultant shall have no authority, express or implied, to act on behalf of or bind SCPPA or Members to any obligation in any capacity whatsoever as agent or otherwise. (b) Subcontractors. Consultant may use the services of subcontractors to perform a portion of its obligations under this Agreement with the prior written approval of SCPPA. All subcontractors retained by Consultant shall be duly licensed as required by law.

Subcontractors shall be provided with a copy of this Agreement and Consultant shall cause all subcontractors to comply with the same and agree in a separate writing to be bound by its terms. Consultant shall be the responsible party with respect to all actions of its subcontractors. Consultant’s visit to and time spent at SCPPA, Member, or project site locations shall be subject to normal business hours, appropriate safety standards, and security requirements.
(b) Prevailing Wages. Work by persons deemed to be employees of Consultant may be subject to prevailing wages under California Labor Code 1770 et seq. Consultant is solely ...
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 3 responsible for compliance with prevailing wage requirements, where applicable.

Consultant shall be responsible for determining the applicability of the provisions of California Labor Code and complying with the same, including, without limitation, obtaining from the Director of the Department of Industrial Relations the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work, making the same available to any interest party upon request, paying any applicable prevailing wage rates, posting copies thereof at the jobsite, and following all applicable prevailing wage rate requirements to its subcontractors. Proof of these requirements shall be provided to SCPPA upon request.
(d) Indemnity. Consultant shall indemnify, defend, and hold harmless SCPPA and Members, and their respective officers, employees, assigns, and successors in interest from and against any and all liability, claims, suits, demands, damages, fines, penalties, wages, costs or expenses pertaining to (i) prevailing wage laws and (ii) the payment of any employee and/or employer contributions for the California Public Employees Retirement System (“PERS”) benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions which would otherwise be the responsibility of SCPPA or Members. This indemnification is intended to supplement and is not intended to limit or exclude the application of the indemnification requirements provided in Section 8 hereof.

3. Standard of Care:

The Consultant will perform Work under this Agreement with the degree of skill and diligence normally practiced in the same industry by consultants performing the same or similar work.

Consultant shall comply with all Federal, State, County, local and other governing laws, rules and regulations applicable to the performance of the Work under this Agreement, including Participating Member(s) business practices or other requirements as set forth in any applicable Task Order, including, but not limited to, equal opportunity practices, living wage ordinances, applicable business licenses, taxpayer protection acts (limiting gifts or campaign contributions), and assignment of antitrust causes of action. Consultant represents and warrants that it is appropriately licensed, qualified, and experienced to provide the Work. Consultant acknowledges that it may be subject to the requirements of the California Consumer Privacy Act (“CCPA”) and the California Privacy Rights Act and represents that all Work performed hereunder shall comply with such requirements where applicable. If requested, Consultant agrees to execute a non-disclosure agreement or other ancillary agreement to document Member-specific requirements for purposes of addressing CCPA, California Public Records Act (“CPRA”), California Privacy Rights Act, confidentiality and/or cybersecurity concerns.

4. Amendments:

Amendments to this Agreement must be in writing and signed by both Parties. No Task Order issued under this Agreement may be amended except by written agreement executed by Consultant, SCPPA and the Participating Member, provided further that if a Participating Member has elected to confirm its Task Order participation through a letter to SCPPA, the ...
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 4 Participating Member shall have submitted a new letter to SCPPA requesting the amendment to the Task Order prior to SCPPA’s execution of the amended Task Order.

5. Payment:

SCPPA shall pay Consultant for Work in accordance with the terms of this Agreement and the applicable Task Order. Consultant is not authorized to perform any Work or incur any costs whatsoever until: (1) a Task Order has been signed by both Parties (and the Participating Member has signed either the Task Order or a letter to SCPPA confirming the Participating Member’s participation in the Task Order); and (2) a written purchase order providing authorization for the start of Work for such Task Order has been issued to the Consultant by the SCPPA designated representative. In addition to any specific requirements in a Task Order, each invoice from Consultant shall include the following:
a. A reference to the purchase order number issued by SCPPA for such Work to be performed under the Agreement and Task Order and any other number assigned by SCPPA for invoices under this Agreement;
b. Name of each Participating Member that has received Goods and/or Services for which the invoice is being issued by Consultant; and
c. The basis for the amount invoiced, including a description of Goods and/or Services provided and supporting documentation as required by the participating SCPPA Member.

Consultant shall submit all invoices to SCPPA. Consultant shall submit invoices at no more than monthly intervals and no later than the invoicing dates specified in the milestone payment schedule set forth in a Task Order, and if no milestone payment schedule is set forth in a Task Order, then no later than thirty (30) days after completion of the Work covered by the invoice.

Invoices delivered to SCPPA shall be sent to [email protected]. Invoices received by SCPPA on or before the 15th day of a given month and subsequently approved by the Participating Member(s) on or before the 25th day of the same month, shall be paid by SCPPA before the end of the following month. All other properly invoiced amounts shall be paid not more than sixty (60) calendar days after delivery of an invoice, provided that the funds for the payment of such invoices have been transmitted to SCPPA by the Participating Member(s).

SCPPA shall inform Consultant of any disputed invoice amounts within thirty (30) calendar days of receipt of the invoice by SCPPA. SCPPA may withhold payment of such disputed amounts until both Parties have reached agreement on the proper amount of the invoice.

6. Taxes:

All taxes imposed on Consultant’s income, imposed, or assessed by reason of this Agreement or its performance, including but not limited to sales or use taxes, shall be paid by Consultant.

Consultant shall be responsible for any taxes or penalties assessed by reason of any claims that ...
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 5 Consultant is an employee of SCPPA.

7. Audit:

During the Agreement’s term and for a period of four years after the termination or expiration of the Agreement, Consultant shall (a) maintain all records, books, papers, or documents related to Consultant’s performance of the Agreement (“Records”); and (b) provide SCPPA or its representatives, at all reasonable times, the right to examine, excerpt, photocopy, photograph, or transcribe such Records, including but not limited to direct and indirect charges and detailed documentation for Work that Consultant has performed or will perform under the Agreement.

8. Indemnity:

To the maximum extent permitted by law, Consultant shall defend, indemnify, and hold harmless SCPPA and Members and their respective officers, employees, assigns and successors in interest (collectively, “Indemnified Parties”) from and against any and all suits and causes of action, claims, charges, damages, demands, judgments, civil fines and penalties, or losses of any kind or nature whatsoever, whether actual or alleged, arising out of, or incident to, the performance of Services or the supply of Goods under this Agreement, or both (“Claims”) excluding only those Claims arising from the gross negligence or willful misconduct of Indemnified Parties. Consultant shall promptly notify SCPPA of any Claim(s) against the Consultant or any of Consultant’s directors, employees, subcontractors of any tier, or agents, arising out of or related to Services being performed or Goods to be provided under this Agreement.

9. Intellectual Property Infringement:

Consultant shall defend, indemnify, and hold harmless SCPPA and each Participating Member from and against any loss, cost, and expense that SCPPA or each Participating Member incurs because of a claim that any deliverables, materials, software, or hardware or equipment (hereinafter “Product”) provided pursuant to this Agreement infringes on the intellectual property rights of others. Consultant’s indemnification obligation under this Section 9 is conditioned on the following: (i) SCPPA must notify Consultant of any such claim and (ii) the claim must not arise from modifications to or misuse of the Product by SCPPA or the Participating Member. In the event of an infringement claim, Consultant, at its sole option and expense, may (A) retake title and possession of the Product and refund all compensation paid by SCPPA, or (B) obtain for SCPPA and any Participating Member the right to continue using the Product under the terms of this Agreement as was being used prior to the infringement claim; or (C) replace for SCPPA and any Participating Member the Product with another that is substantially equivalent in function, or modify the Product so that it becomes non-infringing and substantially equivalent in function. Consultant’s election in response to an infringement claim as described in this Section 9 shall not result in any additional costs or liability to SCPPA and any Participating Member.
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 6 10. Insurance:

Consultant shall at its sole cost and expense procure, provide, and maintain, and shall require each subcontractor (regardless of tier) to provide and maintain, in effect during the performance of any Work under this Agreement, and with respect to subparagraphs (d) and (e) below, the period of time specified therein, insurance coverage with carriers reasonably satisfactory to SCPPA, as follows:
(a) Workers’ Compensation insurance in accordance with statutory limits, as required by the state in which the services are to be performed, including a waiver of subrogation favoring SCPPA, and Employer’s Liability insurance with limits of not less than one million dollars ($1,000,000) each employee for accident, $1,000,000 each employee for disease, and $1,000,000 policy limit for disease.
(b) Commercial General Liability insurance providing coverage for bodily injury, property damage, personal injury, advertising liability, blanket contractual liability, Consultant’s obligations under this Agreement, products and completed operations, and coverage for independent contractors with limits of not less than one million dollars ($1,000,000) for each occurrence. Such policy shall cover SCPPA and each Participating Member as an additional insured, include a severability of interest provision, and be primary and not contributory with respect to any insurance carried by SCPPA or Participating Members. (c) Commercial Automobile Liability insurance providing coverage for all owned, nonowned, and hired automobiles used by Consultant in the performance of the Work with a combined single limit of not less than one million dollars ($1,000,000) for each occurrence of bodily injury and property damage.
(d) Errors & Omissions/Professional Liability insurance, including coverage for liability arising from intellectual property infringement, information technology and software development services, with limits of one million dollars ($1,000,000) per claim and in the aggregate. The policy must be kept in force during the life of the contract and for three years (either as a policy in force with “prior acts” coverage covering the Agreement’s term, or under an extended reporting provision) after contract termination. (e) Cyber Security Coverage including technology / professional liability insurance, intellectual property infringement, and data protection liability insurance. Consultant shall procure and maintain coverage for cyber liabilities and financial loss resulting or arising from acts, errors, or omissions, in connection with data maintenance, hosting, software development and other information technology services provided under this agreement.

Coverage shall include protection for liability arising from:

1. intellectual property infringement arising out of software and/or content (excluding patent infringement and misappropriation of trade secrets);

2. breaches of security;
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 7 3. violation or infringement of any right, privacy, breach of federal, state, or foreign security and/or privacy laws or regulations; and,

4. data theft, damage, destruction, or corruption, including without limitation, unauthorized access, unauthorized use, identity theft, theft of personally identifiable information or confidential corporate information, transmission of a computer virus or other type of malicious code; and participation in a denial of service attack on a third party.

The minimum limits shall be three million dollars ($3,000,000) for each claim and in the aggregate.

Such insurance must address all of the foregoing without limitation if caused by an employee of the Consultant or an independent contractor working on behalf of the Consultant in performing Work under this contract. Policy must provide coverage for wrongful acts, claims, and lawsuits anywhere in the world. The policy must be kept in force during the life of the contract and for three years (either as a policy in force with “prior acts” coverage covering the Agreement’s term, or under an extended reporting provision) after contract termination.
(f) All required policies shall provide not less than thirty (30) calendar day notice of cancellation to SCPPA.

The insurance to be provided by Consultant under this Agreement shall not include any of the following: except for Professional Liability Insurance, any claims-made insurance policies; any self-insured retention or deductible amount greater than two hundred fifty thousand dollars ($250,000) unless approved in writing by SCPPA; any endorsement limiting coverage available to SCPPA or Participating Members that is otherwise required by this Section 10; and any policy or endorsement language that (i) negates coverage to SCPPA or Participating Members for SCPPA’s or Participating Members’ own negligence; (ii) limits the duty to defend SCPPA or Participating Members under the policy; (iii) provides coverage to SCPPA or Participating Members only if Consultant is negligent, or (iv) permits the recovery of defense costs from any additional insured. The insurance provided under this Agreement shall not contain any restrictions or limitations which are inconsistent with SCPPA’s or the Participating Members’ rights under this Agreement.

Consultant shall furnish SCPPA proof of all specified insurance evidencing the required coverages prior to commencement of Work under this Agreement or any Task Order issued pursuant to this Agreement. Consultant shall provide SCPPA a new or renewed certificate of insurance upon any changes or modifications to coverage including any extension or renewal of required insurance coverage; provided that any changes or modifications to coverage shall be consistent with the requirements of this Agreement.

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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 8 limit the applicability, scope, or obligations of indemnification and defense obligations of this Agreement, and this Agreement’s indemnification and defense obligations do not limit the insurance coverage requirements of this Agreement.

11. Term and Termination; Survival:
(a) The term of this Agreement shall be three (3) years from the date hereof at which time it shall either expire or be extended by written agreement of the Parties for one (1) or more additional terms totaling no more than three (3) years, unless sooner terminated in accordance with this Section 11.
(b) Either Party may terminate this Agreement, or any Task Order hereunder, with or without cause, upon thirty (30) calendar days’ written notice to the other Party. Upon such termination, (i) Consultant shall reimburse SCPPA for all payments made by SCPPA for Work not yet completed and supplied, or (ii) if outstanding payments are owed to Consultant, SCPPA shall pay Consultant for all Work satisfactorily performed and supplied in accordance with this Agreement up to the date of termination. (c) No Task Order shall be executed pursuant to this Agreement if the time or deadline for performance thereof extends beyond the then-applicable expiration date of the Agreement.

Notwithstanding the foregoing, at SCPPA’s sole discretion and for good cause shown, this Agreement shall not expire while Work to be performed under an existing Task Order remains incomplete.
(d) Termination for Conflicts of Interest. Consultant confirms that it understands the conflicts of interest codes and requirements applicable to its profession, as well as the requirements of California Government Code Section 1090, et seq. and Section 87100, et seq. Consultant represents and certifies that it is unaware of any conflict of interest relating to this Agreement and that SCPPA, its Members, and their respective officers, agents, employees, representatives, and elected and appointed officials do not, and will not, have any indirect or indirect financial interest in this Agreement. Consultant will immediately inform SCPPA about any conflict of interest that may arise as a result of any change in circumstances.

Notwithstanding any other provision of this Agreement, it is further understood and agreed that if such conflict of interest does exist or develop, SCPPA may immediately terminate this Agreement by giving Consultant written notice thereof. (e) Survival. Any rights or obligations pursuant to Sections 2(d), 3, 5-12, 14, 17, 20-22 shall survive the termination or expiration of this Agreement.

12. Use and Ownership of Work Product:
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 9 materials fixed in a tangible medium of expression, including software code, written procedures, written documents, abstracts, and summaries thereof, or any portions or components of the foregoing created, written, developed, conceived, perfected, or designed in connections with the Work provided under this Agreement. (b) SCPPA and the Participating Members shall retain all rights, title, and interest in and to the Work Product, including all intellectual property rights therein and any and all enhancements, improvements, and derivative works thereof, and Consultant obtains no rights therein.

13. Information Provided by Others:

To the extent reasonably available to SCPPA and/or the Participating Members, and not otherwise subject to any confidentiality requirement, SCPPA and/or the Participating Members, upon Consultant’s request, shall provide to the Consultant in a timely manner any information reasonably needed to perform the Work hereunder. Consultant may rely on the accuracy of information provided by SCPPA and Participating Members. Any Customer Data (as defined in Section 13 herein) furnished to Consultant by SCPPA or Participating Members shall be deemed Confidential Information subject to Section 14 of this Agreement.

14.Confidential Information:

As used herein, “Customer Data” shall mean any and all data that describes anything whatsoever about an individual customer of a Participating Member, such as address, employment, contact information, usage history, financial transactions and/or credit history, or that affords a clear basis for inferring things done by or to an individual or entity such as a record of a person’s presence in a place, or requests for temporary changes in service. “Customer Responses” shall be all information or opinion collected or gathered from an individual customer of a Participating Member, either verbally, in writing, or electronically.

Either Party (as to information disclosed, the "Disclosing Party") may provide the other (as to information received, the "Receiving Party") with information in connection with this Agreement that it may deem to be “Confidential Information” as defined herein. Confidential Information shall mean any and all: (1) Customer Data provided by SCPPA or any Participating Member to Consultant or any of Consultant’s subcontractors; (2) Customer Responses collected by Consultant or any of Consultant’s subcontractors from customers of any Members; and (3) any information provided to one Party from another that is labeled and/or marked confidential. Receiving Party agrees: (a) to use or reproduce the Confidential Information only as necessary to realize the benefits of or perform its obligations under this Agreement and for no other purpose, (b) to take reasonable measures to prevent disclosure of the Confidential Information to third parties, and (c) not to disclose the Confidential Information to a competitor of Disclosing Party.
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 10 Notwithstanding the foregoing, Confidential Information does not include information which (i) at the time of disclosure is within the public domain through no breach of this Agreement by either Party; (ii) has been known or independently developed by and is currently in the possession of recipient prior to disclosure or receipt thereof; (iii) was or is acquired by recipient from a third party (other than a Participating Member customer contacted by Consultant in the course of performance of this Agreement) or (iv) disclosed pursuant to a legal requirement or order. The recipient may disclose the Confidential Information on a need-to-know basis to its contractors, agents and affiliates who agree to confidentiality and non-use terms that are substantially similar to these terms.

In the case of a bona fide request received by SCPPA under the California Public Records Act (“CPRA,”) Cal. Gov't Code § 7920.000 et seq.) from a third party for access to Consultant’s Confidential Information subject to this Agreement, or as may otherwise be required by the California Ralph M. Brown Act (“Brown Act”) (California Government Code §§ 54950 et. seq.), SCPPA shall notify Consultant of such request and shall seek to follow Consultant's reasonable instructions in responding thereto subject to the understanding that SCPPA cannot delegate the responsibilities imposed on it by the CPRA or Brown Act to Consultant. SCPPA’s responsibilities under both the CPRA and Brown Act shall be determined in the sole discretion of SCPPA. In the event access to such Confidential Information is denied and the third party requesting the same initiates litigation to compel access under the CPRA, SCPPA shall promptly advise Consultant of such litigation, and SCPPA shall have no other duty or obligation to Consultant under this Agreement with respect to the denial of access to such Confidential Information or to oppose or defend any such litigation. Consultant, at its own cost and expense, shall indemnify, defend, and hold SCPPA free and harmless from such litigation or any claim, suit, cost, expense, attorneys’ fees, judgment, or order related thereto or otherwise arising from the denial of access to Consultant’s Confidential Information to said third party.

If Consultant is requested or required, pursuant to any order, rule, ruling, discovery request, subpoena, civil investigation or similar process to disclose any of SCPPA’s or Participating Members’ Confidential Information, Consultant shall provide prompt written notice to each of SCPPA and the affected Participating Members of such request or requirement so that SCPPA and the affected Participating Members may, at their own expense, seek a protective order or other appropriate remedy concerning such disclosure.

Confidential Information must be kept in a secure location. Confidential Information received from or pertaining to customers of a Member shall only be provided by Consultant to the Participating Member providing service to that customer, and to no other party, and Consultant shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the personal information from unauthorized access, ...
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 11 destruction, use, modification, or disclosure. Consultant shall, when directed by SCPPA, create aggregated data derived from Confidential Information in such a way that individual customer responses or data cannot be determined. Consultant shall retain the Confidential Information only so long as it is necessary to perform Consultant’s tasks under the Agreement, and after such time, the Confidential Information shall be returned to SCPPA or at SCPPA’s written request, destroyed, and Consultant shall retain no copies of the Confidential Information.

Under no circumstance may Consultant, or its officers, employees, subcontractors, or agents use Confidential Information of SCPPA or its Members for any commercial purpose not related to the primary purpose of this Agreement.

Consultant shall be responsible for ensuring that any subcontractors used to provide Goods and Services that have access to Confidential Information or who shall collect Customer Responses comply with the provisions of this Section 13.

Notwithstanding these restrictions, only where permitted by law, including as limited by Section 1798.98 of the California Civil Code and Section 8381 of the California Public Utilities Code, (a) Consultant may disclose Confidential Information to its affiliates and subcontractors to the limited extent necessary for the performance of the Agreement, (b) a Receiving Party may disclose Confidential Information to its auditors, (c) SCPPA may disclose Confidential Information to Members, and (d) a Receiving Party may disclose Confidential Information to any other third party with the prior written permission of Disclosing Party, and in each case, only so long as the Receiving Party obtains a non-disclosure commitment from any such subcontractors, auditors, lenders or other permitted third party that prohibits disclosure of the Confidential Information and provided further that the Receiving Party remains responsible for any unauthorized use or disclosure of the Confidential Information. Each Disclosing Party warrants that it has the right to disclose the information that it discloses.

15. SCPPA’s Right to Inspect Property: Upon reasonable notice to Consultant, SCPPA and/or Members shall have the right during the performance of the Work to inspect the site where the Work is to be performed, subject in all cases to all applicable rules, policies and regulations related to safety, as well as state and local building code and ordinance compliance, including Consultant and its subcontractors' reasonable safety precautions, provided that such inspection and presence does not unreasonably interfere with or delay the completion of the Work and Consultant's performance of its other obligations under this Agreement.

16. Recycled Materials:

In accordance with California Public Contract Code section 22152 et seq., Consultant shall certify the minimum, if not the exact, percentage of postconsumer materials in the materials, Goods, or supplies offered or sold pursuant to this Agreement, including, where applicable, printer cartridges. Where applicable, the Consultant shall ensure that any printing paper used ...
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 12 meets the recycled content requirements set forth in Section 12209 of the California Public Contract Code.

17. Title to Goods; Warranties:
(a) Title to Goods. The risk of loss and title to Goods supplied by Consultant to SCPPA pursuant to the Work scope shall pass upon delivery to SCPPA, unless otherwise specified in the Work scope.
(b) Warranties. Consultant warrants that Goods shall be delivered free from defects in material, workmanship, and title and that the Work shall be performed in a competent, diligent manner in accordance with any mutually agreed specifications, as identified in Exhibit A and/or the specific Task Order. Consultant warrants that the services performed by it hereunder will be performed in a workmanlike manner and in accordance with generally accepted professional standards. Any and all written warranties asserted by Consultant shall be incorporated herein as Exhibit D. In the event the Goods and Services do not conform, such nonconforming Goods and Services shall be corrected by Consultant. If Goods or Services do not meet the above warranties, SCPPA shall promptly notify Consultant in writing prior to expiration of the warranty period. Consultant shall (i) at its option, repair or replace defective Goods and (ii) re-perform defective services. If despite Consultant’s reasonable efforts, non-conforming Goods cannot be repaired or replaced, or nonconforming services cannot be re-performed, then, without limitations to SCPPA’s legal and equitable remedies and any remedies provided under this Agreement, Consultant shall refund, or credit monies paid by SCPPA for such non-conforming Goods and Services.

18. Dispute Resolution:

In the event of a dispute between the Parties either Party may deliver to the other Party a notice of dispute with a detailed description of the underlying circumstances for the dispute. The dispute notice shall include a schedule of availability of the notifying Party’s officers having a title of senior vice president or equivalent or higher duly authorized to settle the dispute during the thirty (30) calendar day period following delivery of the dispute notice. The recipient Party shall, within five (5) business days of receipt of the dispute notice, provide to the notifying Party a parallel schedule of availability of its officers having a title of senior vice president or equivalent or higher duly authorized to settle the dispute. The senior officers of the Parties shall meet and confer as often as reasonably necessary during the thirty (30) day period in good faith negotiations to resolve the dispute. In the event the dispute is not resolved within the thirty (30) calendar day period then either Party may pursue any legal remedy available to it; provided further, however, nothing herein shall prohibit either Party from pursuing temporary, injunctive, or equitable relief during this thirty (30) calendar day period.

19. Representatives:

SCPPA’s representative for administration of this Agreement:

Brandon Czworniak, (626) 793-9364 ext. 220, and e-mail address is [email protected]. All questions to SCPPA pertaining to this Agreement shall be ...
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 13 referred to the person named above.

Consultant’s representative for this Agreement:

Gabriel A. Peredo, (626) 956-5329 and e-mail address is [email protected]. All questions to Consultant pertaining to this Agreement shall be referred to the person named above.

The representatives set forth herein shall have authority to give all notices required herein.

20. Notices:

Notices, requests, demands and other communications made pursuant to this Agreement shall be deemed given only if in writing signed by an authorized representative of the sender and delivered by first class mail, electronic mail, or by a courier or service guaranteeing overnight delivery to the receiving party, addressed as follows:

Either party may change its contact information for the purposes of this Agreement by giving written notice of such change to the other party in the manner provided in this Section.

Notice shall be deemed effective: 1) immediately, upon personal delivery or upon transmission by electronic mail accompanied by a telephone call to the intended recipient; 2) one (1) calendar day after transmission by electronic mail not accompanied by a telephone call; 3) five (5) calendar days after deposit in first class mail, if mailed within the United States; and 4) ten (10) calendar days after deposit in the mail, if mailed from outside the United States.

21. Miscellaneous:
(a) Assignment – This Agreement is binding upon and shall inure to the benefit of SCPPA and Consultant and their respective successors and assigns. Neither Party may assign its rights or obligations hereunder without the prior written consent of the other Party; provided, however, that either Party may assign this Agreement to a successor of the Party’s entire business relating to this Agreement.
(b) Integration; Conflicts – This Agreement, including Exhibits hereto, contains the entire agreement between the Parties and supersedes all prior negotiations, representations, or agreements, whether written or oral. In the event of any conflict between the terms of this To SCPPA: To Consultant:

Executive Director
1160 Nicole Court
Glendora, CA 91740
[email protected]
Richard Heath & Associates, Inc.

Attn: Contracts Department
590 W. Locust Street, Suite 103
Fresno, CA 93560 [email protected]
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 14 Agreement and the Exhibits hereto, or any Task Order or purchase order issued hereunder, the terms of this Agreement shall control. In the event of any conflicts between the Exhibits and any Task Order or purchase order, the Exhibits shall control. In the event of a conflict between any Task Order or purchase order, the Task Order shall control. (c) Third Party Beneficiary – SCPPA Participating Members are not parties to this GOODS AND SERVICES AGREEMENT but are third party beneficiaries to the GOODS AND SERVICES AGREEMENT and are entitled to the rights and benefits hereunder and may enforce the provisions hereof as if they were parties hereto. (d) Waiver – The failure to enforce any terms of this Agreement or the waiver of any breach of this Agreement shall not constitute a waiver of any other breach or a relinquishment of right to enforce the same or any other provision of this Agreement. (e) Severability – If any provision of this Agreement is rendered invalid or unenforceable under any circumstance, the remainder of this Agreement shall continue to be in full force and effect and the provision declared invalid or unenforceable shall continue to be in full force and effect as to other circumstances in accordance with the laws of the State of California.
(f) Governing Law – This Agreement is entered into in Los Angeles County in the State of California and shall be governed by, and construed in accordance with, the laws of the State of California.
(g) Venue – All litigation arising out of, or relating to this Agreement, shall be brought in a state or federal court in the County of Los Angeles in the State of California, and both Parties waive any defense of forum non conveniens.

22. Execution in Counterparts, Electronic Signatures and Document Transmission:

This Agreement may be executed in counterparts, and, upon execution by each signatory, each executed counterpart shall have the same force and effect as an original instrument and as if all signatories had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signature thereon, and may be attached to another counterpart of this Agreement identical in form hereto by having attached to it one or more signature pages.

The Parties may execute this Agreement by manual signature or by electronic signature, each of which shall have the same force and effect. A signed copy of this Agreement transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Agreement for all purposes, to the extent provided under applicable law, including California’s Uniform Electronic Transactions Act. ...
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 15 [SIGNATURE PAGE FOLLOWS]
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SCPPA MGSA (Rev. Sept. 12, 2023) Richard Heath & Associates, Inc. 16 IN WITNESS WHEREOF, the Parties have executed this Master Goods and Services Agreement between Southern California Public Power Authority and Richard Heath & Associates, Inc. on the date first written above.

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:

DANIEL E GARCIA
Executive Director
Approved as to Legal Form:

ARMANDO ARBALLO
Assistant General Counsel
RICHARD HEATH & ASSOCIATES, INC.

By:

CYNTHIA RAFFERTY
President
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EXHIBIT A

SCOPE OF WORK TO BE PROVIDED UNDER THIS AGREEMENT
Goods and/or Services not expressly set forth in this Exhibit A are excluded.

PROPOSAL/SCOPE OF WORK
RHA is committed to providing SCPPA members with comprehensive energy efficiency solutions tailored to the diverse needs of residential, multi-family, commercial, agricultural, industrial and public sector customers. Our services include energy efficiency audits, direct installations and a range of complementary offerings designed to align with the specific goals, customer demographics and budgetary constraints of each SCPPA member.

As illustrated in Figure 1, our energy audit and direct installation services encompass key areas of interest identified in the RFP. We have developed a pricing to provide fair and competitive pricing for all measures and services, as detailed in the pricing narrative. Services are also available on a time-andmaterials (T&M) basis. This modular approach allows RHA to collaborate with SCPPA members to design service packages that optimize energy savings and customer satisfaction.

Figure 1 Services Listed as Areas of Interest Included in Energy Audit and Direct Installation Offerings and Pricing ...
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ENERGY AUDITS
RHA will collaborate closely with SCPPA members to convert leads to program participants. Leads will originate from SCPPA utility members, directly from customers or through other programs operating customers, RHA will ask a list of pre-screening questions to tailor the audit to the complexity and depth of analysis required for each project. RHA will work directly with customers to schedule audits at times that are most convenient for them and offer ASHRAE Level I, II and III audits, as outlined below.

Level I audits serve as a foundational step involving a high-level facility walkthrough.

RHA will establish customer needs, priorities and financial situation and gather sitespecific information, such as existing energy measures/equipment, model number, quantities, equipment efficiencies, total facility area, recent energy efficiency projects, operational schedules, etc. Level I audits offer an overview of the customer’s energy usage and initial insights into energy efficiency opportunities. These audits help determine whether a more detailed ASHRAE Level II or Level III audit is warranted to explore efficiency potentials and project feasibility.

Level II audits delve deeper, establishing detailed energy baselines and providing comprehensive calculations for energy efficiency, greenhouse gas reductions and return on investment and recommendations tailored to customers’ equipment. This advanced analysis involves a thorough review of utility data and provides customers with energy efficiency recommendations and a financial simple payback analysis. The goal is to help customers make well-informed decisions to optimize energy efficiency and reduce greenhouse gas emissions.

Level III audits provide a more detailed field and engineering analysis of projects identified that include capital-intensive modifications. The calculations for these modifications provided by the ASHRAE Level II audit will be backed by system metering and/or computer software simulations and reviewed by an engineer. This will give precise cost and savings calculations to inform the customer of the benefits, costs and performance expectations of making significant investments in energy-efficient equipment.

If approved by the SCPPA member, RHA will log customer information gathered during the energy audit in our internal database to provide live access to project updates, customer information and reports.

ENERGY AUDIT REPORT
After completing the audit, RHA will deliver a personalized and user-friendly report featuring a concise one-page summary table. This table will highlight cost-effective energy efficiency opportunities designed to maximize energy savings and cost reductions. The report will include:

Existing Best Practices: Assessment of current operational practices and their alignment with industry standards for energy efficiency.

Proposed Energy Efficiency Measures: Evaluation of recommended measures tailored to the specific facility and operational goals.
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Form. RHA will offer a call center or assigned team member to handle customer phone calls and followups for seamless communication and prompt assistance with questions and concerns.

EDUCATION
RHA incorporates customer education as a key component of our energy audits and direct installation services. We prioritize helping customers understand the importance of behavioral changes first, followed by the value of the recommended energy efficiency measures. Additionally, we educate customers on maximizing energy savings post-installation by properly using existing equipment and the newly implemented energy-efficient measures. If desired, RHA can also provide customer education to support additional SCPPA member programs and needs, ensuring alignment with goals and objectives.

Energy Audit Education: Once the energy audit report is finalized, RHA will schedule an overthe-phone, virtual or in-person meeting tailored to the customer’s availability and preferences.

During this session, RHA will review the audit findings and explain the benefits, costs, and longterm value of the recommended energy efficiency retrofits.

Direct Installation Education: After the installation, the installation crew leader will conduct an in-depth walkthrough with the customer, explaining each newly installed measure. This walkthrough will include detailed instructions on the proper use and maintenance of the equipment, as well as tips on behavior changes that can enhance the equipment’s performance and longevity.

Other Education: RHA can help SCPPA members raise awareness of other energy efficiency programs. This could include hosting webinars tailored to the residential, multi-family, commercial and other sectors to educate them about offerings, their benefits and how to participate. RHA can also develop on-demand e-learning modules on energy efficiency topics, similar to those created for other utility clients, including for the San Diego Gas & Electric Company through the LEARN Program. The LEARN Program is a free public learning platform that SCPPA member utilities can leverage.

CANVASSING OF COMMERCIAL CUSTOMERS
RHA will perform door-to-door canvassing to engage customers and encourage participation in SCPPA member direct installation programs or other programs as requested. This can be performed as a followup to direct referrals provided by SCPPA members, leads generated by direct mail, email or the website or as a targeted effort to eligible customers in general.

RHA has found that canvassing is one of the most effective outreach methods for securing participation from municipal utility commercial customers. As a representative of SCPPA members, it allows RHA to interact with customers, answer questions and establish trust. As the face of the program, field representatives will be trained to provide exceptional customer service and wear name badges and uniforms to foster credibility with customers.
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Ad hoc and custom reports: Provides customizable reports in user-friendly formats, such as Excel or PDF. Example reports include benchmarking and savings reports, productivity reports, audit reports, installed measure reports, work order reports and end-of-year reports for projects, measures and savings needed for the client’s local and state reporting.

Other functionality: Includes:
o Stores energy audit results and calculations, including the following metrics:

Energy Use Index (BTU/sq. ft.)
Energy Cost Index ($/sq. ft.)
Building characteristics (building type, size, vintage, etc.) Energy savings potential, including savings realized because of measures installed
Demand reduction potential
o Retains a log of all changes made to the data, including date, time and username o Serves as a tool for utility and third-party evaluators to access real-time information and reports
o Includes data analytics tools for targeting customers, including storing information on usage, income, location and other demographics RHA also offers advanced Power BI services to transform complex program data into clear, interactive visualizations, making it easier for internal stakeholders to analyze and present key performance metrics. RHA currently
provides other clients with
Power BI dashboards to
support data-driven
decisions, with functionality
including:

Visualizes
comprehensive data
trends over time to
observe and analyze
program
developments at a
granular level.

Interactive graphs
display trends,
offering clarity and
insight into key
metrics.

Generates detailed,
customizable reports
reflecting program Figure 2 RHA uses Power BI in numerous programs to offer client’s data visualizations and real-time reporting for continuous improvement. ...
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performance to support decision-making and program optimization.

Provides customizable views of specific metrics and data points of particular interest. This flexibility will ensure that relevant information is readily accessible when needed.

PROVIDE QUALITY ASSURANCE/QUALITY CONTROL
Based on a reasonable sampling rate agreed on between the SCPPA member and RHA, an RHA supervisor will visit direct installation services customers within an agreed-upon timeframe to ensure the work is satisfactory and the equipment is functioning as designed. Any items needing correction will be addressed promptly.

RHA will also seek customer feedback via a survey embedded in the customer sign-off paperwork on:

Satisfaction with the overall process
Staff professionalism
Overall customer satisfaction
Timeliness
Other items deemed important by the SCPPA member or RHA An example of a customer survey that RHA currently uses in energy efficiency programs is included in Figure 3. If the customer communicates any issues with the program, steps will be taken to resolve them, such as coaching staff to ensure future customer satisfaction.

Figure 3 Example of Customer Survey

CUSTOMER FINANCING SUPPORT OPTIONS
RHA recognizes that upfront costs can often discourage customers from pursuing energy efficiency improvements. To address this, we actively monitor financing options offered by state programs and reputable financing entities recommended or utilized by other utilities. RHA remains independent and is not bound to any financial institution. This ensures our services are unbiased and focused solely on providing customers with options to facilitate their energy efficiency investments. To support SCPPA member customers, RHA will provide the following services:
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Supporting Financing Identification: We will assist customers in exploring financing programs and identifying solutions that align with their unique financial situations and project goals.

Educating Customers: Our team will inform customers of the financing options available, empowering them to make educated decisions about funding opportunities for their energy efficiency investments.

Helping Customers Connect with Funding: We will help customers connect with the appropriate funding or financing entities, reducing potential barriers to energy efficiency upgrades.

CUSTOMER INCENTIVES LAYERING ASSISTANCE SERVICES
RHA actively monitors local, state and federal incentives, including programs like the Inflation Reduction Act (IRA) and Self-Generation Incentive Program (SGIP). We will collaborate with SCPPA members to identify and leverage additional funding opportunities with SoCalGas, particularly for gas measures where electrification is not feasible. By layering these incentives with utility-provided programs, we aim to minimize upfront project costs while maximizing long-term energy savings, minimizing energy costs and reducing greenhouse gas emissions.

Incentive navigation: RHA will use customer profiles, energy usage and project goals to identify local, state and federal incentives for which the customer and project are eligible.

Customer education: RHA will ensure the customer understands the incentives available, eligibility criteria and the application process.

Application and documentation support: RHA will assist customers in completing incentive forms and gathering and preparing necessary documents, such as energy savings calculations, equipment specifications and receipts to claim available incentives. RHA will ensure direct installation projects adhere to incentive programs’ terms to avoid disqualification or delays.

BILLING DATA ANALYSIS
RHA will perform billing data analysis as a part of the energy audit process to provide insights into customer energy consumption patterns and identify opportunities for efficiency improvements. RHA will use 12 months of utility billing data provided by SCPPA members to understand energy usage trends comprehensively. Our energy engineers will analyze this data to identify peak usage periods, seasonal variations and anomalies that may indicate inefficiencies or equipment issues.

Energy engineers will cross-reference the findings with similar buildings and industry standards to assess relative performance and identify potential areas for improvement. These insights are compiled into actionable recommendations, such as conducting an energy audit, upgrading to energy-efficient equipment, modifying behaviors or modifying energy management systems or usage schedules.

ENERGY EFFICIENCY PROGRAM SUPPORT SERVICES
RHA is committed to supporting SCPPA members in delivering energy audits, direct installation services and other energy efficiency programs, as requested. By partnering with RHA, SCPPA members can ...
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ensure their programs operate seamlessly and effectively, achieving program goals and addressing the unique needs of diverse customer types. Our comprehensive support services include:

Program design and implementation: RHA will assist SCPPA members in designing and implementing customized energy efficiency initiatives, including tailored energy audit and direct installation programs. Our support includes developing comprehensive program implementation plans to ensure seamless execution and measurable success. RHA remains at the forefront of industry advancements by leveraging insights gained from the contracts we implement, the expertise of our internal research teams and our active membership in the California Efficiency + Demand Management Council. We stay updated on emerging trends, funding opportunities and the evolving direction of the energy efficiency industry. This allows us to implement innovative programs that address current market needs, including:
o Programs focusing on disadvantaged communities and hard-to-reach populations o Electrification programs
o Appliance delivery and recycling programs
o Battery storage programs
o Programs providing concierge-style service to customers Marketing and outreach: In addition to conducting door-to-door canvassing of commercial customers for direct installation programs, RHA can help SCPPA members perform marketing and outreach for other energy efficiency programs. Support could include developing marketing materials and partnerships with community organizations to amplify engagement.

Technical support: RHA will offer hands-on assistance during program implementation to ensure achievement of goals, customer satisfaction and adherence to regulatory standards and best practices.

Incentive and rebate management: If requested, RHA can manage the incentive and rebate application and approval process for energy efficiency programs, ensuring compliance with SCPPA member program requirements.

Data analysis and reporting: RHA will provide our proprietary database to collect and analyze program data for energy audit and direct installation programs. This database can also be made available and customized for other SCPPA energy efficiency programs to optimize program strategies and ensure continuous improvement.

Customer support: RHA will maintain a call center staffed with multilingual representatives to provide customer support, answer questions and manage complaints for direct installation programs. This service can also be offered to other SCPPA programs, as requested. ...
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efficiency calculators tailored to HVAC, air compressors, lighting, plug loads and refrigeration. RHA also has feasibility tools to assess load capacities and building electrification, as well as solar calculators to determine solar sizing based on consumption.

BEST PRACTICE GUIDANCE AND POLICY SUPPORT
As requested by the SCPPA member, RHA will provide guidance and policy support on best practices for implementing utility incentive programs. This will include informing SCPPA members of relevant local, state and federal policies impacting utility incentive programs. We will also help SCPPA members incorporate emerging technologies into incentive programs, such as fuel-switching and building electrification.

EQUIPMENT-SPECIFIC AUDITS AND OTHER ASSESSMENTS
RHA will work with SCPPA members to identify and perform assessments outside ASHRAE-level audits.

These assessments may address specific areas of concern or save costs when a comprehensive ASHRAElevel audit is not needed. Examples of such assessments included in the energy audit pricing include:

Lighting (interior and exterior) only assessment
Mechanical (including ancillaries) only assessment
o HVAC
o Refrigeration
RHA can also offer the following assessments priced as T&M:

Interior and exterior water assessment
Feasibility study (e.g., compressors, chillers)
Building electrification assessment (EV, fuel-switching, etc.) Building automation systems

RESEARCH
RHA will leverage extensive document and web research, data collection and analysis to establish baseline energy consumption and energy-efficiency parameters for projects. We are committed to providing well-documented, data-driven justifications for our cost estimates and Expected Useful Life (EUL) calculations to ensure that our energy-efficiency measures align with the project’s goals and requirements in the following categories:

Net Increase in Load or New Construction: RHA will gather applicable information on existing code and standards. Our team will establish a baseline for energy consumption in areas undergoing new construction or experiencing a net increase in load. This will involve gathering data on the proposed equipment, systems and load-handling requirements. RHA will also determine the incremental cost associated with energy-efficient measures and calculate the EUL with proper justification, considering the costs and benefits related to the energy-efficient equipment and systems.

Retrofit: RHA will collect verifiable evidence of the existing conditions and recent operations of the equipment or space being retrofitted. This will include gathering data on baseline energy ...
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usage and system efficiency. We will comprehensively analyze the full measure cost for retrofit projects, accounting for all associated expenses, including equipment, installation and any necessary modifications. RHA will calculate the EUL of the retrofit measures and provide a welljustified rationale for this calculation, considering factors such as equipment lifespan and maintenance requirements.

Retrofit Add-On: RHA will establish the existing baseline energy consumption for systems where new equipment is added to improve overall efficiency. This will involve collecting data on the pre-existing components and their energy usage. RHA will provide a detailed breakdown of the full measure cost for retrofit add-on projects, including the cost of the new equipment, its integration into the existing system and any necessary modifications. We will calculate the EUL of the retrofit add-on measures and provide a clear justification based on factors such as the equipment lifespan and anticipated efficiency improvements. ...
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DEMAND RESPONSE PROGRAMS AND/OR SERVICES
RHA can assist interested SCPPA members with energy demand during peak periods or times of grid stress by supporting their demand response programs and identifying demand response opportunities for their customers.

Demand Response Programs: RHA can collaborate with SCPPA members to design tailored demand response programs that align with their grid needs and customer demographics. RHA can perform outreach and develop marketing materials to raise program awareness and encourage customer enrollment. RHA can also offer our database to support these efforts. Our Information Systems staff can develop demand response infrastructure, and RHA program managers can assist SCPPA members in implementing demand response with customers.

Customer Demand Response Opportunities: RHA can use energy audits to identify appliances and systems that can be adjusted during peak demand periods. We can also recommend and install energy efficiency measures that support demand response, suggest behavior changes to customers and help customers enroll in the optimal rate structure.

RHA can educate customers on how demand response works, the benefits of participating in demand response programs and how to adjust during demand response events. We can also highlight incentives associated with joining utility demand response programs, such as bill credits or rebates.

ADDITIONAL SERVICES
If desired, RHA has a strong background in the following services not identified in the RFP. The cost of these services will be determined based on hourly rates, time and material rates, scope of work and hours estimates utilizing the provided fee schedule. Upon request, RHA will provide a quote for the scope of additional services desired for approval by SCPPA members.

Energy benchmarking services to help SCPPA members prepare annual reports or assist customers with providing energy benchmarking services to comply with state reporting requirements
Planning and design assistance engineering services
Additional analyses for SCPPA member customers, including:
o Power factor analysis to evaluate customer buildings to determine if their electrical systems are operating with an optimal power factor. If inefficiencies are identified, our team will provide tailored recommendations to address these issues. These recommendations may include installing power factor correction equipment, such as capacitors or voltage optimizers, to reduce reactive power demand, improve energy efficiency and lower utility costs.
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Commissioning and retro-commissioning services to ensure operating systems (mechanical, electrical, HVAC, etc.) are designed, installed and programmed for optimal performance using our commissioning engineers
Acceptance testing for lighting controls using our certified engineers/technicians to ensure the lighting equipment installed is operating as designed and in compliance with the code HVAC controls consulting to ensure HVAC systems are designed, installed and programmed for optimal performance
RFP writing services to support SCPPA members and municipalities procure contractors for HVAC, lighting, energy efficiency and renewable energy projects. ...
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CONFIDENTIAL
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SCPPA
B-5

CONFIDENTIAL
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Please note:

RHA agrees to the terms and conditions provided in the Master Agreement.

RHA’s developed our pricing based on good faith estimates defined in this RFP and includes our most favorable terms and conditions.

RHA’s rates are inclusive of wages, benefits, travel time, insurance and other overhead costs, as outlined below.

Material prices may fluctuate due to factors beyond RHA’s control, such as tariffs. RHA reserves the right to review and adjust material prices in the event of significant market fluctuation and will do so transparently and in collaboration with SCPPA members at the time of task order execution. All materials are billed at cost.

Any additional costs or fees, including handling fees, shall be based on the costs for materials, measures, or parts, provided in this Exhibit B.

Where applicable, hourly labor prices are based on the California Department of Industrial Relations (DIR) prevailing wage rates and include scheduled rate increases.

ENERGY AUDITS
RHA’s pricing for energy audits includes the following areas of interest from the RFP:

On-site facility audit
Customer education
Develop/provide database
Quality assurance/quality control
Billing data analysis
Customer incentives layering assistance
Customer financing support
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DIRECT INSTALLATION
RHA’s pricing for direct installation includes the following services from the Areas of Interest specified in the RFP:

Education
Canvassing of commercial customers
Develop/provide database
Provide quality assurance/quality control
Customer financing support options
Customer incentives layering assistance
Energy efficiency program support services
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STAND ALONE SERVICES
Should SCPPA members desire to contract with RHA for discrete, stand-alone services from any areas of interest listed in the RFP or additional service areas, RHA will work with the SCPPA member to define scope and use the rates provided in Attachment 1 and Attachment 2 to determine pricing.

NOT TO EXCEED
In no event shall SCPPA’s payment obligations to Consultant for all Goods received or Services performed or for any other reason exceed ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000). Consultant shall provide notice to SCPPA prior to reaching the Not to Exceed Amount. Any Goods or Services provided by Consultant in excess of this authorization, and without prior execution of an amendment hereto by the Parties, shall be at Consultant’s sole risk and without payment. For avoidance of doubt SCPPA and Participating Member shall not be liable for any unauthorized excess billings whatsoever.

TRAVEL
All travel must be preapproved in writing by SCPPA or the applicable Participating Member. As a public agency, SCPPA shall not reimburse Consultant for travel, food, and related costs in excess of those permitted by the Internal Revenue Service.
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Richard Heath & Associates, Inc.

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EXHIBIT C

EXEMPLARY TASK ORDER FORM
TASK ORDER No.: […input number, sequential to prior
Task Orders, if applicable…]
Date: [ ]
Project Description: [ ]
Participating Member (if applicable): [ ]
Consultant: [ ]
Consultant, SCPPA and the Participating Member(s) identified above agree that Consultant shall provide the Services specified herein pursuant to the terms and conditions of the [Agreement Type] (“Agreement”) between SCPPA and Consultant dated [Agreement Effective Date], except as specifically modified herein. Capitalized terms used but not described herein shall have the meanings ascribed to them in the Agreement.

Term
This Task Order shall commence upon issuance of a purchase order by SCPPA and shall terminate on the earlier of [date] or the end of the Agreement’s term (the “Task Order Termination Date”).

Any Goods received or Services provided by Consultant (i) prior to issuance of a SCPPA purchase order, or (ii) on or after the Task Order Termination Date without prior execution of an amendment hereto by the Parties, shall be at Consultant’s sole risk and without payment. SCPPA or Participating Member may terminate this Task Order, with or without cause, upon thirty (30) calendar days’ written notice to Consultant.

Scope of Services
[General Description Of Services]
Compensation
[Specify Fees and Schedule – must include a Not to Exceed Amount for services under the Task Order (the “Not to Exceed Amount”)]
Consultant shall provide notice to SCPPA and Participating Member prior to and upon reaching the Not to Exceed Amount. Any Goods received or Services provided by Consultant in excess of the Not to Exceed Amount, without prior execution of an amendment hereto by the Parties, shall be at Consultant’s sole risk and without payment. For avoidance of doubt SCPPA and Participating Member shall not be liable for any unauthorized excess billings whatsoever. ...
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Representative(s) of Participating Member(s)
[Identify Names and appropriate Contact information for all Member staff who are authorized representatives for the administration of the Agreement and who should be sent invoices from Consultant]
Execution in Counterparts; Electronic Signatures
This Task Order may be executed in counterparts, and, upon execution by each signatory, each executed counterpart shall have the same force and effect as an original instrument and as if all signatories had signed the same instrument. Any signature page of this Task Order may be detached from any counterpart of this Task Order without impairing the legal effect of any signature thereon, and may be attached to another counterpart of this Task Order identical in form hereto by having attached to it one or more signature pages.

The Parties may execute this Task Order by manual signature or by electronic signature, each of which shall have the same force and effect. A signed copy of this Task Order transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Task Order for all purposes, to the extent provided under applicable law, including California’s Uniform Electronic Transactions Act. [SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have signed this Task Order as of the date first written above.

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:

DANIEL E GARCIA
Executive Director
Approved as to Legal Form:
[NAME]
[Title]
[LEGAL ENTITY NAME]
By:
[PRINTED NAME IN CAPS]
[Printed Title]
Participating Member’s Acknowledgement and Agreement
The undersigned hereby attests that the undersigned has the requisite authority to bind the Participating Member to the obligations set forth in this Task Order No. [###]. Participating Member agrees to be responsible for any and all fees, costs and expenses invoiced to SCPPA by Consultant for work performed on behalf of, or for the benefit of, Participating Member pursuant to the Agreement.

Participating Member agrees to indemnify, defend and hold harmless SCPPA, all other Members and their respective directors, officers, agents, representatives, employees, successors and assigns from and against any and all losses, injuries, costs and expenses, damages, liens, claims, or liabilities, including reasonable attorney’s fees, incurred by SCPPA in connection with the Work performed for the benefit of, or on behalf of, Participating Member pursuant to this Task Order, except for the gross negligence or willful misconduct of SCPPA or such other SCPPA members, and their officers, agents, representatives or employees.

NAME OF PARTICIPATING MEMBER (required)
By:
[ PRINTED NAME IN CAPS]
[Title of Authorized Signatory]
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Check here if Participating Member has indicated acknowledgement and agreement to pay for Work procured under this Task Order by letter from Participating Member’s General Manager addressed to SCPPA.
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Amendment No.1 to Master Goods and Services Agreement Between SCPPA and RHA - 1 AMENDMENT NO. 1 TO THE

MASTER PROFESSIONAL SERVICES AGREEMENT BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND RICHARD HEATH & ASSOCIATES, INC.

This Amendment No. 1 (“Amendment”) to the March 20, 2025, Master Goods and Services Agreement between the Southern California Public Power Authority and Richard Heath & Associates, Inc. for energy efficiency audits and direct installation services (the “Agreement”) is made and entered into as of July 1, 2026 by and between the Southern California Public Power Authority, a California public entity and joint powers authority (“SCPPA”), Richard Heath & Associates, Inc., a corporation incorporated pursuant to the laws of California (“RHA” or “Assignor”) and Resource Innovations, Inc., a corporation incorporated pursuant to the laws of the State of Delaware (“RI” or “Assignee”). SCPPA, RHA and RI are referred to individually as a “Party” or collectively as the “Parties”. Capitalized terms used but not described herein shall have the meanings ascribed to them in the Agreement.

RECITALS
WHEREAS, on March 20, 2025, SCPPA and RHA executed the Agreement; and WHEREAS, SCPPA, RHA, and various SCPPA member agencies have, from time to time, entered into Task Orders under the Agreement (each, a “Task Order” and collectively, the Task Orders”), pursuant to which RHA has or will provide services for such member agencies, including but not limited to Task Order No. BWP-01 dated March 30, 2025 between SCPPA, RHA and the City of Burbank, CA Task Order No. ALW-01 dated May 27, 2025 between SCPPA, RHA and the City of Azusa, CA; and
WHEREAS, such Task Orders form part of the Agreement; and WHEREAS, on or about January 28, 2025, RI and RHA entered into a stock purchase agreement, pursuant to which RI purchased all assets, properties and rights of RHA; and
WHEREAS, SCPPA, RHA, and RI, now desire to memorialize RHA’s assignment of all of RHA’s rights under the Agreement, including Task Orders, to RI, RI’s assumption of all obligations and liabilities under the Agreement and Task Orders, and SCPPA’s consent to such assignment and assumption on the terms and conditions set forth herein.

AGREEMENT
NOW, THEREFORE, in consideration of the promises herein, and for good and valuable consideration, the Parties agree to amend the Agreement as follows:

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Amendment No.1 to Master Goods and Services Agreement Between SCPPA and RHA - 2

1. Recitals. The Recitals set forth above are true and correct and are incorporated into the body of this Amendment as though expressly set forth herein.

2. Definitions. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Agreement. As used in this Agreement, the following terms have the following meanings:
a. "Assigned Obligations" means all obligations, liabilities, and duties of Assignor under the Agreement, including any Task Orders, on and after the effective date of the Agreement.
b. "Assigned Rights" means all rights, benefits, and interests of Assignor under the Agreement, including any Task Orders, on and after the effective date of the Agreement.

3. Assignment and Assumption.
a. Assignment. Assignor hereby sells, assigns, transfers, and conveys to Assignee all of Assignor's right, title, and interest in and to the Agreement, including all Assigned Rights.
b. Assumption. Assignee hereby accepts the foregoing assignment and assumes, and agrees to pay, perform, and discharge when due, all of the Assigned Obligations in accordance with the terms and conditions of the Agreement. c. Further Assurances. Each of Assignor and Assignee agrees to execute and deliver such further instruments and documents and to take such further actions as may be reasonably necessary to effectuate the assignment and assumption contemplated by this Agreement.

4. Consent to Assignment. SCPPA hereby consents to the assignment of the Agreement from Assignor to Assignee as set forth in this Agreement. a. Recognition of Assignee. SCPPA agrees to recognize Assignee as the party entitled to all Assigned Rights and obligated to perform all Assigned Obligations under the Agreement, and for services provided on and after July 1, 2026, SCPPA shall make all payments for services performed, directly to Assignee in accordance with the terms of the Agreement. b. No Waiver. SCPPA's consent to the assignment shall not constitute a waiver of any term, condition, or provision of the Agreement, all of which shall remain in full force and effect as modified by this Agreement. c. Reservation of Rights. SCPPA expressly reserves all rights, remedies, claims, and defenses it may have, arising out of or relating to the Agreement.

5. Representations and Warranties of Assignor. Assignor represents and warrants to Assignee and SCPPA as follows:
a. Organization and Authority. Assignor is a Corporation duly organized, validly existing, and in good standing under the laws of California. Assignor has all requisite power and authority to execute, deliver, and perform this Agreement.

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Amendment No.1 to Master Goods and Services Agreement Between SCPPA and RHA - 3 b. Due Authorization. The execution, delivery, and performance of this Agreement by Assignor have been duly authorized by all necessary action on the part of Assignor. This Agreement has been duly executed and delivered by Assignor and constitutes the legal, valid, and binding obligation of Assignor, enforceable against Assignor in accordance with its terms. c. No Conflicts. The execution, delivery, and performance of this Agreement by Assignor do not and will not (i) violate any provision of Assignor's organizational documents, (ii) violate any law, rule, regulation, order, judgment, or decree applicable to Assignor, or (iii) conflict with, result in a breach of, or constitute a default under any material agreement to which Assignor is a party.
d. Validity of Agreement. The Agreement is in full force and effect and constitutes a valid and binding obligation of Assignor. Assignor is not in default under the Agreement, and to Assignor's knowledge, no event has occurred that, with notice or lapse of time or both, would constitute a default by Assignor under the Agreement.
e. No Consents. No consent, approval, authorization, or other action by, and no notice to or filing with, any governmental authority or third party is required for the execution, delivery, and performance by Assignor of this Agreement, except for SCPPA's consent as provided herein.

6. Representations and Warranties of Assignee. Assignee represents and warrants to Assignor and SCPPA as follows:
a. Organization and Authority. Assignee is a Corporation duly organized, validly existing, and in good standing under the laws of Delaware. Assignee has all requisite power and authority to execute, deliver, and perform this Agreement and to assume and perform the Assigned Obligations. b. Due Authorization. The execution, delivery, and performance of this Agreement by Assignee have been duly authorized by all necessary action on the part of Assignee. This Agreement has been duly executed and delivered by Assignee and constitutes the legal, valid, and binding obligation of Assignee, enforceable against Assignee in accordance with its terms. c. No Conflicts. The execution, delivery, and performance of this Agreement by Assignee do not and will not (i) violate any provision of Assignee's organizational documents, (ii) violate any law, rule, regulation, order, judgment, or decree applicable to Assignee, or (iii) conflict with, result in a breach of, or constitute a default under any material agreement to which Assignee is a party.
d. Capability to Perform. Assignee has the financial resources, expertise, and capability necessary to perform the Assigned Obligations in accordance with the terms and conditions of the Agreement.

7. Representations and Warranties of SCPPA. SCPPA represents and warrants to Assignor and Assignee as follows:

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Amendment No.1 to Master Goods and Services Agreement Between SCPPA and RHA - 4 a. Organization and Authority. SCPPA is a joint powers authority duly organized, validly existing, and in good standing under the laws of the State of California. SCPPA has all requisite power and authority to execute, deliver, and perform this Agreement.
b. Due Authorization. The execution, delivery, and performance of this Agreement by SCPPA have been duly authorized by all necessary action on the part of SCPPA. This Agreement has been duly executed and delivered by SCPPA and constitutes the legal, valid, and binding obligation of SCPPA, enforceable against SCPPA in accordance with its terms. c. Validity of Agreement. The Agreement is in full force and effect and constitutes a valid and binding obligation of SCPPA. SCPPA is not in default under the Agreement, and no event has occurred that, with notice or lapse of time or both, would constitute a default by SCPPA under the Agreement.

8. References to Assignor. All references in the Agreement to Assignor (or the Consultant named therein) shall be deemed to refer to Assignee with respect to Assigned Rights and Assigned Obligations.

9. Representatives.

Section 19 of the Agreement (Representatives) is hereby amended to read as follows:

19. Representatives
SCPPA’s representative for administration of this Agreement:

Brandon Czworniak, (626)-793-9364, [email protected]. All questions to SCPPA pertaining to this Agreement shall be referred to the person named above.

Consultant’s representative for this Agreement:

Roland Mollen, 626.435.0217, [email protected]. All questions to Consultant pertaining to this Agreement shall be referred to the person named above.

The representatives set forth herein shall have authority to give all notices required herein.

10. Notices.

The contact information in Section 20 of the Agreement (Contract Notices) is hereby amended to read as follows:

To SCPPA:

Executive Director
1160 Nicole Court
Glendora, CA 91740
(626) 793-9364
[email protected]
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Amendment No.1 to Master Goods and Services Agreement Between SCPPA and RHA - 5 To Consultant:

Resource Innovations, Inc.

Attn: Legal Department
400 North Michigan Avenue, Suite 600
Chicago, IL 60611 United States
[email protected]

11. Continuing Effect of Agreement. Except as expressly modified by this Amendment, all terms, conditions, and provisions of the Agreement shall remain in full force and effect and are hereby ratified and confirmed by the parties.

12. Counterparts. This Amendment may be executed in counterparts, and, upon execution by each signatory, each executed counterpart shall have the same force and effect as an original instrument and as if all signatories had signed the same instrument. Any signature page of this Amendment may be detached from any counterpart of this Assignment Agreement without impairing the legal effect of any signature thereon, and may be attached to another counter part of this Assignment Agreement identical in form hereto by having attached to it one or more signature pages.

13. Electronic Signatures. The Parties may execute this Assignment Agreement by manual signature or by electronic signature, each of which shall have the same force and effect. A signed copy of this Assignment Agreement transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Assignment Agreement for all purposes, to the extent provided under applicable law, including California’s Uniform Electronic Transactions Act.

14. Survival. The representations, warranties, covenants, and agreements contained in this Agreement that by their nature are intended to survive the execution and delivery of this Agreement, including Section 4(b) (No Waiver), Section 4(c) (Reservation of Rights), and Sections 5, 6, and 7 (Representations and Warranties), shall survive the execution and delivery of this Agreement.
[SIGNATURE PAGES FOLLOW]
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Amendment No.1 to Master Goods and Services Agreement Between SCPPA and RHA - 6 IN WITNESS WHEREOF, each signatory hereto represents that he or she has been properly authorized to execute and deliver this Assignment Agreement on behalf of the party for which he or she signs.

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:

DANIEL E GARCIA
Executive Director
Approved as to Legal Form:

CHRISTINE GODINEZ
General Counsel
RICHARD HEATH & ASSOCIATES, INC.

By:

CYNTHIA BRUNO
President
RESOURCE INNOVATIONS, INC.

By:

LAUREN CASENTINI
CEO
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City Council Agenda Report
Meeting Date: October 20, 2026
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Principal Management Analyst Subject
Professional Services Agreement with Northwest Electrical Services, LLC Recommendation
A. Find that the proposed action is categorically exempt from California Environmental Quality Act (CEQA) review, in accordance with CEQA Guidelines Section 15301, because the project consists of the maintenance, repair or minor alteration of existing facilities/equipment and involves negligible or no expansion of an existing use; B. Find that the best interests of the City are served by a direct award of an agreement with Northwest Electrical Services, LLC without a competitive selection process pursuant to Vernon Municipal Code Section 3.32.110(B)(2) given ongoing essential work already underway on the Supervisory Control and Data Acquisition (SCADA) systems in the Utility and significant cost savings to the City;
C. Approve and authorize the City Administrator to execute a Professional Services Agreement with Northwest Electrical Services LLC, in substantially the same form as submitted, to provide technical design, controls, automation, construction, and analytical services for an amount notto-exceed $2,568,805; and D. Authorize a contingency amount of five percent (5%), or $128,440.25, in the event of unforeseen services and expenses, and grant authority to the City Administrator to issue amendments up to the contingency amount, if necessary.

Background
Vernon Public Utilities (VPU) is committed to enhancing its infrastructure and upgrading technology to improve efficiency and strengthen its service offerings. The goal is to provide highquality, reliable, and responsive service at competitive, stable rates. As part of this commitment, VPU is focused on upgrading, streamlining, and standardizing utility services, along with implementing Supervisory Control and Data Acquisition (SCADA) systems across all facilities and equipment in the electric, water, gas, and fiber divisions. The SCADA system plays a crucial role in enabling VPU to deliver essential services more cost-effectively, reliably, efficiently, and safely. This system is vital for troubleshooting, especially during emergencies and service interruptions, to ensure the quick restoration of service to customers.

On November 17, 2023, the City Council approved a three-year Services Agreement with Northwest Electrical Services, LLC (NW) to provide technical design, controls, automation, and analytical services. This agreement will remain in effect until November 16, 2026. During this period, NW has successfully completed numerous projects, including the Power SCADA system.

The design process began with the Station A systems, where Power SCADA servers were deployed, and equipment from Schweitzer Engineering Laboratories was tested and verified for architectural integrity. Additionally, Well 22 has been placed into service, and cybersecurity measures have been continuously updated and maintained in accordance with Federal Industrial Control System best practices. The H. Gonzales Unit 1 (HG1) and H. Gonzales Unit 2 (HG2) also underwent upgrades to their air systems and are both now in service. A fully automated water control system is now operational, alongside automated water production reporting. ... ...

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The SCADA system enhances VPU's ability to deliver services efficiently, reliably, and safely, particularly during emergencies and service interruptions. The continued partnership with NW over the next three years will enable VPU to further improve efficiency in key areas, such as deploying Power SCADA and ongoing work primarily focused on the Water System. This work includes rehabilitating Pumping Plant 1 and the wells, developing the new Well 23, and enhancing water filtration efforts. Moreover, the development and deployment of the Power SCADA system, which has been delayed due to competing priorities involving water and HG units, will be prioritized. This project will eventually transition into a maintenance phase.

In addition to project-related work, the maintenance of water system controls, networks, and instrumentation will be included in NW's workload, along with ongoing development initiatives.

Training plans for operations staff and technicians are being established, and remote read-only access will be provided for field staff. Significant maintenance will be needed for the HG units and auxiliary systems.

NW will also continue to assist with emergencies, MGS support, and special projects such as engineering studies. Given their extensive expertise, NW can offer support across a wide variety of topics. Furthermore, NW plans to conduct a comprehensive documentation exercise that will include standard operating procedures (SOPs) and troubleshooting and repair processes for most systems. This documentation will help facilitate staff transitions, enhance training, and improve overall crisis management.

NW has actively engaged VPU staff at every stage of various projects. They have shared valuable knowledge of electrical and control systems, significantly enhancing VPU's ability to troubleshoot and operate them more efficiently. With a diverse technical skill set in industrial design, utility operations, and preventive maintenance, NW staff provides specialized services at competitive rates, helping VPU manage costs effectively. Their team brings over 78 years of combined experience in engineering, field services, and plant management across industries such as oil and gas, power generation, and machinery automation.

Over the past ten years, NW has played a crucial role in developing the Water SCADA system and implementing key electronic systems for VPU, both of which are vital to system reliability and future infrastructure. These unique skills and projects are essential for ensuring VPU's success and meeting customer reliability needs. Contracting with NW offers significant advantages in terms of efficiency and cost savings. Awarding this contract is prudent for VPU as it will help maintain, streamline, and upgrade utility facilities, equipment, and processes. This will ensure reliability, achieve safety goals, reduce operational costs, and enhance overall efficiency across all utility divisions. Moreover, as NW has already begun replacing the legacy SCADA system, it is crucial for VPU to retain their services to continue this work. This will help prevent delays that could lead to increased costs or system interruptions. Transitioning to a more industry-standard platform will ultimately provide the utility with greater flexibility in choosing vendors for future support and maintenance.

The proposed agreement is exempt from competitive bidding pursuant to Section

3.32.110(A)(10) of the Vernon Municipal Code (VMC) and can be exempt from competitive selection pursuant to Section 3.32.110(B)(2) if a direct award is found to be in the best interests of the City. Section 3.32.110(B)(3) of the VMC indicates that the City Council has the authority to make such a finding when the proposed contract exceeds $100,000. The City's best interests are served by a direct award based on NW's demonstrated expertise in fields critical to VPU and their ability to provide services in a manner that will result in significant cost savings for the City, as outlined in this staff report.
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Staff recommends that the City Council approve a Professional Services Agreement with NW for a total amount not-to-exceed $2,568,805 to provide technical design, controls, automation, construction, and analytical services. Additionally, staff recommends a contingency amount of ten percent (5%) or $128,440.25, in the event of unforeseen services and expenses, for a combined total not to exceed $2,697,245.25. 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.

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

Strategic Plan Goals
Goal 6: Optimize Public Utility Operations to Ensure Affordable Services Fiscal Impact
The fiscal impact is not-to-exceed $2,697,245.25. Sufficient funds are available in the Electric and Water Enterprise Funds for applicable Divisions and Accounts for the current fiscal year, and sufficient funds will be budgeted in subsequent years.

Attachments

1. Professional Services Agreement with Northwest Electrical Services, LLC ...
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SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND NORTHWEST

ELECTRICAL SERVICES LLC FOR TECHNICAL DESIGN, CONTROLS,

AUTOMATION AND ANALYTICAL SERVICES

COVER PAGE
Contractor: Northwest Electrical Services LLC
Responsible Principal of Contractor: John S. Blizman, General Manager Notice Information - Contractor: Northwest Electrical Services LLC 17420 Goldenview Drive
Anchorage, AK 99516
Attention: John Blizman,
General Manager
Telephone: (877) 336-3539
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: November 17, 2026
Termination Date: November 16, 2029
Consideration: Total not to exceed $2,568,805
(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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Northwest Electrical Services LLC
Services Agreement

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SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND NORTHWEST

ELECTRICAL SERVICES LLC FOR TECHNICAL DESIGN, CONTROLS,

AUTOMATION AND ANALYTICAL SERVICES
This Agreement is made between the City of Vernon, a California charter City and California municipal corporation (“City”), and Northwest Electrical Services LLC, a limited liability company (“Contractor”).

The City and Contractor agree as follows:

1.0 EMPLOYMENT OF CONTRACTOR. City agrees to engage Contractor to perform the services as hereinafter set forth as authorized by the City Council on October 20, 2026.

2.0 SCOPE OF SERVICES.

2.1 Contractor shall perform all work necessary to complete the services set forth in the Contractor's proposal to the City ("Proposal") dated August 16, 2026, 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. ...
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4.0 TERM. The term of this Agreement shall commence on November 17, 2026, and it shall continue until November 16, 2029, 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 $2,568,805 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.
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Services Agreement

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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, ...
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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 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. Premises/Operations and Personal Injury coverage is required. The City of Vernon, its directors, commissioners, officers, employees, agents, and volunteers must be endorsed on the policy as additional insureds 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 appropriate insurance requirements.
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Northwest Electrical Services LLC
Services Agreement

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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 Professional Errors and Omissions Coverage in a sum of not less than one million dollars ($1,000,000) per claim and the annual aggregate, covering all acts, errors, omissions, negligence, infringement of intellectual property (except patent and trade secret) and network and privacy risks (including coverage for unauthorized access, failure of security, breach of privacy perils, wrongful disclosure of information, as well as notification costs and regulatory defense) in the performance of services for the City or on behalf of the City hereunder. Such insurance shall be maintained in force at all times during the term of the Agreement and for a period of 5 years thereafter for services completed during the duration of the Agreement. Applicable aggregate must be identified, and the claims history provided to determine amounts remaining under the aggregate.

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
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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 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 ...
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collection rights for premiums, attorney's fees, and costs against Contractor by way of set-off or recoupment from sums due to Contractor, at City's option; (b) immediately terminate this Agreement and seek damages from the Agreement resulting from said breach; or (c) self-insure the risk, with all damages and costs incurred, by judgment, settlement or otherwise, including attorney's fees and costs, being collectible from Contractor, by way of set-off or recoupment from any sums due to Contractor.

11.0 GENERAL TERMS AND CONDITIONS.

11.1 INDEPENDENT CONTRACTOR.

11.1.1 It is understood that in the performance of the services herein provided for, Contractor shall be, and is, an independent contractor, and is not an agent, officer or employee of City and shall furnish such services in its own manner and method except as required by this Agreement, or any applicable statute, rule, or regulation. Further, Contractor has and shall retain the right to exercise full control over the employment, direction, compensation and discharge of all persons employed by Contractor in the performance of the services hereunder. City assumes no liability for Contractor’s actions and performance, nor assumes responsibility for taxes, bonds, payments, or other commitments, implied or explicit, by or for Contractor. Contractor shall be solely responsible for, and shall indemnify, defend and save City harmless from all matters relating to the payment of its employees, subcontractors and independent contractors, including compliance with social security, withholding and all other wages, salaries, benefits, taxes, exactions, and regulations of any nature whatsoever.

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. ...
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11.3 OWNERSHIP OF WORK. All documents and materials furnished by the City to Contractor shall remain the property of the City and shall be returned to the City upon termination of this Agreement. All reports, drawings, plans, specifications, computer tapes, floppy disks and printouts, studies, memoranda, computation sheets, and other documents prepared by Contractor in furtherance of the work shall be the sole property of City and shall be delivered to City whenever requested at no additional cost to the City. Contractor shall keep such documents and materials on file and available for audit by the City for at least three (3) years after completion or earlier termination of this Agreement. Contractor may make duplicate copies of such materials and documents for its own files or for such other purposes as may be authorized in writing by the City.

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

11.5 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 ...
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Agreement shall be effective unless in writing and executed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

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

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

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

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

11.11 INTERPRETATION.

11.11.1 Applicable Law. This Agreement shall be deemed an agreement and shall be governed by and construed in accordance with the laws of the State of California. Contractor agrees that the State and Federal courts which sit in the State of California shall have exclusive jurisdiction over all controversies and disputes arising hereunder, and submits to the jurisdiction thereof. ...
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11.11.2 Entire Agreement. This Agreement, including any exhibits attached hereto, constitutes the entire agreement and understanding between the parties regarding its subject matter and supersedes all prior or contemporaneous negotiations, representations, understandings, correspondence, documentation, and agreements (written or oral).

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

11.11.4 Severability. If any provision in this Agreement is held by any court of competent jurisdiction to be invalid, illegal, void, or unenforceable, such portion shall be deemed severed from this Agreement, and the remaining provisions shall nevertheless continue in full force and effect as fully as though such invalid, illegal, or unenforceable portion had never been part of this Agreement.

11.11.5 Order of Precedence. In case of conflict between the terms of this Agreement and the terms contained in any document attached as an Exhibit or otherwise incorporated by reference, the terms of this Agreement shall strictly prevail.

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. ...
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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
If to the Contractor:

Northwest Electrical Services LLC
Attention: John Blizman, General Manager
17420 Goldenview Drive
Anchorage, AK 99516
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.
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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 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 ...
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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.

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. ...
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Northwest Electrical Services LLC
Services Agreement

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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 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”.
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Services Agreement

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EXHIBIT A

CONTRACTOR'S PROPOSAL
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Professional Services Agreement with The City of Vernon to Perform Technical Design, Controls, Automation and Analytical Services
2026 - 2029
August 16, 2026
Forward
Northwest Electrical Services has been engaged in a three-year contract from November 2023, and it has been a very rewarding period marked with many accomplishments, some planned some unplanned. The water system has had challenges, well 22 was added, older wells such as well 19 and well 21 have refurbishments ongoing, and new guidelines for manganese and PFAS have required additional engineering and planning. Likewise, the HG units and supporting air and water systems required additional work to remain in service.

Major accomplishments were achieved during the last three years:

1. Power SCADA has been designed, starting with the Station A systems.

2. Power SCADA Servers have been deployed.

3. Power SCADA SEL equipment has been tested and verified for architecture purposes.

4. Well 22 was placed in service.

5. Cybersecurity measures have been continually updated and maintained and follow Federal ICCS best practices.

6. HG1/HG2 remain in service after performing air system upgrades.

7. Fully automatic water autonomous control system is in operation, along with automated water production reporting.

Also, we are proud and grateful to continue to support the city during emergency situations. Again, we are proud of the relationship with the water department team and operations staff. With the ongoing development of the new Water SCADA system, we have been able to forge a strong working relationship with operations staff who regularly provide critical advice and guidance. Relationships such as the one with operations have translated into successful completion of projects and will lead to further enhancements in operational efficiency.

As always, we answer the phone 24X7.

NORTHWEST ELECTRICAL SERVICES LLC
Design-Build-Commissioning-O&M of Electrical, Mechanical, 17420 Goldenview Dr. Automation and I&C Systems for Industry Anchorage AK 99516
http://nwelec.com
Phone: 877-336-3539
Fax: 484-551-3370
email: [email protected]
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Projected Scope of Work
As we survey the work over the next three years, some of the work is still in the Water System mainly PP1, and well rehabilitations, new well 23 as well as water filtration. In addition, Power SCADA development and deployment, delayed mostly due to competing priorities on water and HG units, will be a focus over the next three years and will be completed and moved into maintenance phase.

In addition to project work, maintenance of water system controls, networks, instrumentation and continued development and enhancements will factor into the workload. Training and development for both operations and technicians is planned. Remote read only access, particularly for field staff is to be implemented Gonzales units and auxiliary systems are also expected to require significant time to maintain and kept available.

An allotment of time is allocated for Emergencies, MGS support, and special projects such as engineering studies etc. Given the nature of our wide areas of expertise, we often can offer support for a wide variety of topics.

We also expect to complete a thorough documentation exercise with SOP’s and troubleshooting / repair procedures for most systems. This will help with any turnover of staff, training and overall crisis management.

Detailed Work Scope
The following table represents the intended scope, and manhour estimates for projects being undertaken by the city. The total manhours largely represent engineering / commissioning expected. Based on the scope the following three years will be heavily labor intensive, with maintenance of low voltage electrical, instrumentation, automation, networking and IT functions for Operations increasing in scope. This represents an average 65-72 hour work week for the three weeks out of 4 we propose to be on site. ...
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Tasks Breakdown Cost Hours
1 Power SCADA 13.00% $333,957 2344
2 Power SCADA Hardware / Network 12.00% $308,268 2163
3 Gonzales / MGS Blackstart 5.00% $128,445 901
4 Well 23 2.00% $51,378 361
5 Water SCADA Maintenance, revisions, network, reports, modeling 12.00% $308,268 2163 6 Power SCADA Maintenance, revisions, network, reports 7.00% $179,823 1262 7 Water and Power SCADA Remote Access (read only) 4.00% $102,756 721 8 Water System Elecrtical LV maintenance 7.00% $179,823 1262 9 Water System I&C Maintenance 3.00% $77,067 541
10 Operator Training and Development 1.50% $38,533 270
11 Automation Training and Development 2.00% $51,378 361 12 Emergency Response 2.50% $64,222 451
13 Gonzales Maintenance 4.00% $102,756 721
14 PP1 New Building, VFD's electrical, automation 9.00% $231,201 1622 15 Water Export and Treatment 5.00% $128,445 901
16 Sump Electrical and Control Maint for Public Works 1.00% $25,689 180 17 Technical Consulting 5.00% $128,445 901
18 External Consultants as required 3.05% $78,351 550
19 Materials $50,000 NA

98.05% $2,568,805 17676
Previous Contract Services Terms:

Northwest has not applied or considered a cost-of-living rate adjustment over the past three years despite substantial inflationary pressures. Our contract has a fixed rate for three years, and like everyone else, we work through the challenges, as the City also works through those same challenges.

Northwest charged a flat rate, regardless of the skill set involved. Unlike other firms, skillsets such as Project Management, Senior Engineer, Design Engineer, Commissioning Engineer, Test Engineer, Technician, Network Design and Security, drafting etc. all have various billable rates. The IEEE published typical rates for various industries in 2025. A few key rates to consider:

1. Utilities – Median rate $220 / hour nationwide.

2. For the Pacific census region, the median rate is $238/ hour.

3. For experience of 35 or more years across all industries, the median rate is $200 / hour nationwide.

By comparison, Northwest has combined over 78 years in the utility and process control industries. Moreover, Northwest does not simply consult, we design and build which are added costs to consultancy design fees.

Additionally, BLS reports a 12% increase in CPI nationally for the period of November 2023 to present. (https://data.bls.gov/pdq/SurveyOutputServlet)
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Proposed Contract Services Terms:

Principal Rates
While the survey indicates an increase in rates of $30 / hour just since 2023, and CPI has increased 12% since the start of the last contract, 12% would increase our rate to $161.84 / hour. We are pleased to inform that the proposed rate would remain unchanged at $142.50 / hour flat rate which is inclusive of all expenses for both principals (Mark Wray and John Blizman). There will be no additional charges for travel and as in the past, never an extra rate increase for overtime or phone calls which we typically answer 24 X 7.

Additional Staff
If additional staff beyond two persons resident at any time is required, this would be at the cost of $130 / hour + expenses billed at cost. This would be based on project requirements and must be authorized by the city before deployment.

Cost of Living Adjustments
Northwest will maintain the practice of not applying cost of living adjustments (inflation etc.), with the sole exception of a major change in CA state tax rates. Should the future political landscape increase tax liability beyond the current levels, Northwest will review the impact and consult with the City only if the impact represents a significant cost restructuring.

Insurance
• NW already maintains the insurance levels as currently required by the City. Current Insurance certificates renewed in March 2026 are on file with the City. • NW actively retains CA DIR Registration.

Contract Term
• The contract term is 3 years.

Material Purchases
• Northwest will purchase material as required and only as authorized by the city on a case by case basis with zero markup.
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• Invoicing
• Invoices for Labor will be submitted once per month.
• All labor invoices shall be supported with timesheets. • Invoices for material and/or expense cost if applicable will be submitted upon authorization by the City to purchase.
• Material or expense invoices shall be supported with vendor quotations / bills, expense receipts and prior City authorization(s) for purchase.

Estimated Costs
Based on the scope of work, and the proposed terms, Northwest estimates the cost of the labor portion of the contract to be $2,568,805. This represents the same value (very slightly less) as the previous three year contract.

Features of the Proposed Services and Terms
• Residency on site allows for a synergy between project completion and training and development.
• Including the residency on site, the rate structure proposed is much less than market consultant rates.
• There is consistency in the contract rate year to year. • NW experience covers a wide spectrum of industrial design, operations and maintenance.
• Our principals have held positions in engineering, field services, start-up and commissioning, operations and plant front line to executive management. We have worked in Oil and Gas, Power Generation, Transmission and Distribution and machinery automation. We have worked in over 36 countries. Combined our principals have 76 years in direct industrial experience.
• We have demonstrated the ability and resources to pursue a concept to completion of many multi-disciplined projects. Many of these projects involved engineering, procurement and construction of civil, mechanical and electrical disciplines. Our experience in operations and maintenance ensures less downstream problems with equipment and troubleshooting.
• Unlike traditional design firms, we have substantial experience in utility plant staff management, budgeting, cost benefit analysis, cost tracking, resource and personnel management provides our clients with a partner in strategic planning and project execution. We have experience in large project estimating, IRP development including emerging technologies, contract management.
• We provide full life cycle costs of a design, factoring in O&M fixed and variable expenses, and competently analyze remaining life cycle of existing assets, including life cycle extension options.
• Our work philosophy is goal oriented. We work closely with clients and are often embedded into the client’s organization as a partner as opposed to a consultant. ...
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• We embrace, encourage and deliver client resource training. Many of our trained client professionals have successfully transitioned from a previous trade role to a design, supervisory and in a few cases to executive positions. We provide on the job training and classroom structured training.
• We can perform many generator and relay testing operations and do so regularly for Siemens.
• We have design and installation experience in Fire and gas systems. • Our automation experience is substantial and not limited to any specific vendors. Our experience is considerable in SCADA, PLC’s and Embedded controllers. We have substantial experience in substation automation with both SEL, Siemens and Alstom. We are current and forward looking with technology. We are registered system integrators with Aveva, Schneider Electric and Rockwell Software.
• Data integration between disparate, modern and legacy systems both on the plant floor and corporate systems.
• Cyber Security design experience for all network systems. • Aside from automation systems, we have core programming experience in many languages, Java and Java script, C++, Python, .NET.
• We have substantial database programming experience. We have developed many database applications leveraging raw field data into performance indicators on demand. • Unlike many firms, we do not simply write specifications and plans. We have the ability to not only provide engineering and research, we have the ability to build, subcontract, manage and commission. This ability, while working closely with the client, provides a much better handover situation to operations and maintenance. • Unlike many firms, we do not apply rates based on skillsets utilized. Our rates are fixed for a client. This gives our clients the ability to utilize our skillsets without concern over the cost of any particular resource, or type of work we may be asked to complete. We have found our rates to be very competitive, with a superior skillset matrix and the flexibility to ensure work is completed. We do not charge overtime rates and often there is no charge for off duty assistance.

We are as always committed to working as efficiently as possible and as a dedicated and loyal partner with the city. We thank you for your continued trust in our services.

Sincerely,
John S. Blizman
General Manager
Northwest Electrical Services LLC
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Northwest Electrical Services LLC
Services Agreement

______________________

EXHIBIT B

SCHEDULE
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Tasks Breakdown Cost Hours
1 Power SCADA 13.00% $333,957 2344
2 Power SCADA Hardware / Network 12.00% $308,268 2163
3 Gonzales / MGS Blackstart 5.00% $128,445 901
4 Well 23 2.00% $51,378 361
5 Water SCADA Maintenance, revisions, network, reports, modeling 12.00% $308,268 2163 6 Power SCADA Maintenance, revisions, network, reports 7.00% $179,823 1262 7 Water and Power SCADA Remote Access (read only) 4.00% $102,756 721 8 Water System Elecrtical LV maintenance 7.00% $179,823 1262 9 Water System I&C Maintenance 3.00% $77,067 541
10 Operator Training and Development 1.50% $38,533 270
11 Automation Training and Development 2.00% $51,378 361 12 Emergency Response 2.50% $64,222 451
13 Gonzales Maintenance 4.00% $102,756 721
14 PP1 New Building, VFD's electrical, automation 9.00% $231,201 1622 15 Water Export and Treatment 5.00% $128,445 901
16 Sump Electrical and Control Maint for Public Works 1.00% $25,689 180 17 Technical Consulting 5.00% $128,445 901
18 External Consultants as required 3.05% $78,351 550
19 Materials $50,000 NA

98.05% $2,568,805 17676
Previous Contract Services Terms:

Northwest has not applied or considered a cost-of-living rate adjustment over the past three years despite substantial inflationary pressures. Our contract has a fixed rate for three years, and like everyone else, we work through the challenges, as the City also works through those same challenges.

Northwest charged a flat rate, regardless of the skill set involved. Unlike other firms, skillsets such as Project Management, Senior Engineer, Design Engineer, Commissioning Engineer, Test Engineer, Technician, Network Design and Security, drafting etc. all have various billable rates. The IEEE published typical rates for various industries in 2025. A few key rates to consider:

1. Utilities – Median rate $220 / hour nationwide.

2. For the Pacific census region, the median rate is $238/ hour.

3. For experience of 35 or more years across all industries, the median rate is $200 / hour nationwide.

By comparison, Northwest has combined over 78 years in the utility and process control industries. Moreover, Northwest does not simply consult, we design and build which are added costs to consultancy design fees.

Additionally, BLS reports a 12% increase in CPI nationally for the period of November 2023 to present. (https://data.bls.gov/pdq/SurveyOutputServlet)
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Proposed Contract Services Terms:

Principal Rates
While the survey indicates an increase in rates of $30 / hour just since 2023, and CPI has increased 12% since the start of the last contract, 12% would increase our rate to $161.84 / hour. We are pleased to inform that the proposed rate would remain unchanged at $142.50 / hour flat rate which is inclusive of all expenses for both principals (Mark Wray and John Blizman). There will be no additional charges for travel and as in the past, never an extra rate increase for overtime or phone calls which we typically answer 24 X 7.

Additional Staff
If additional staff beyond two persons resident at any time is required, this would be at the cost of $130 / hour + expenses billed at cost. This would be based on project requirements and must be authorized by the city before deployment.

Cost of Living Adjustments
Northwest will maintain the practice of not applying cost of living adjustments (inflation etc.), with the sole exception of a major change in CA state tax rates. Should the future political landscape increase tax liability beyond the current levels, Northwest will review the impact and consult with the City only if the impact represents a significant cost restructuring.

Insurance
• NW already maintains the insurance levels as currently required by the City. Current Insurance certificates renewed in March 2026 are on file with the City. • NW actively retains CA DIR Registration.

Contract Term
• The contract term is 3 years.

Material Purchases
• Northwest will purchase material as required and only as authorized by the city on a case by case basis with zero markup.
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• Invoicing
• Invoices for Labor will be submitted once per month.
• All labor invoices shall be supported with timesheets. • Invoices for material and/or expense cost if applicable will be submitted upon authorization by the City to purchase.
• Material or expense invoices shall be supported with vendor quotations / bills, expense receipts and prior City authorization(s) for purchase.

Estimated Costs
Based on the scope of work, and the proposed terms, Northwest estimates the cost of the labor portion of the contract to be $2,568,805. This represents the same value (very slightly less) as the previous three year contract.
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Northwest Electrical Services LLC
Services Agreement

______________________

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.
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City Council Agenda Report
Meeting Date: October 20, 2026
From: Robert Sousa, Chief of Police
Department: Police
Submitted by: Nicholas Perez, Captain
Subject
Master Services Agreement with Flock Group Inc., for Automated License Plate Reader Systems Recommendation
A. Find that it is commercially unreasonable to rebid the proposed agreement with Flock Group Inc., dba Flock Safety (Flock) in three years pursuant to Vernon Municipal Code Section

3.32.220(B) given the City’s existing use of the proprietary Flock Automated License Plate Reader (ALPR) technology and enhanced administrative efficiency achieved by combining the lease of all nineteen (19) Flock ALPR systems into one agreement; B. Approve and authorize the City Administrator to execute a Master Services Agreement with Flock, in substantially the same form as submitted, for the lease of nineteen (19) ALPR systems for a total amount not-to-exceed $172,702.05, for a 38-month term; and C. Authorize a contingency amount of $5,000, in the event of unforeseen costs, and grant authority to the City Administrator to issue amendments up to the contingency amount, if necessary.

Background
Since 2008, the Police Department (PD) has utilized Automated License Plate Reader (ALPR) systems to enhance enforcement and investigative capabilities, increase officer safety, and expedite the tedious and time-consuming process of manually comparing vehicle license plates with lists of stolen, wanted, and vehicles of interest. The PD’s annual agreement for its five (5) original Flock ALPR systems expired on May 19, 2026. On February 1, 2026, PD added 14 Flock ALPR systems on a separate annual agreement with Flock, totaling 19 ALPR systems. The PD is requesting a 38-month agreement with Flock to combine the leasing of all 19 ALPR systems into one agreement (Attachment 1). The first payment will have a pro rata credit estimated at $34,606.88.

Flock, the City’s current vendor, was found to be the only fully integrated ALPR system that offered lifetime maintenance and support included in one subscription price. Flock is also the only fully integrated ALPR one-stop solution, from the production of the camera to delivery and installation. Additionally, if there is a hardware or software malfunction or failure, Flock will work with the PD to remedy the problem and replace equipment, if necessary, at no cost. Flock’s staff also conducts regular audits of every camera, and each camera has a built-in alarm, which provides alerts when a camera is not performing at optimal standards. In the event of a camera performance issue, Flock will deploy a maintenance team to make the repairs.

Some of the distinguishing features of Flock systems are that they can be installed almost anywhere by leveraging solar and battery for power, and cellular (LTE) for data communication.

Flock’s ALPR system comes with its trademarked and patented Fingerprint Technology that can detect vehicles with no plates, temporary plates, dirty/covered plates, and obtain accurate state detection. Unlike the old generation of ALPR systems, this technology captures and stores whole images in daylight and nighttime conditions, and records additional vehicle attributes such as ...
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color, type, make, and objects (roof rack, bumper stickers, etc.) based on image analytics. The ALPR systems also operate on a cloud-based system, removing the need for costly in-house servers.

Staff are aware of nationwide dialogue and questions about ALPR systems and Flock specifically.

PD staff and the City Attorney’s Office made comprehensive updates to the Flock services agreement to address community concerns regarding data usage and privacy protections. The proposed agreement and existing regulations provide the following safeguards:
• The City’s use of ALPR and Flock’s services agreement must at all times comply with applicable state law including California disclosure, privacy, and data protection laws.

Consistent with California Senate Bill 34, enacted in 2015, and applicable law governing ALPR data, the PD does not share ALPR data with any federal agency, including U.S.

Immigration and Customs Enforcement (ICE), or permit its transfer across state lines in violation of California law.
• All data captured by the Flock ALPR systems belongs to the City of Vernon, not Flock. • The PD retains control over who is authorized to access or use the data and may revoke sharing access at any time.
• City ALPR data is retained for only 30 days.
• Flock is prohibited from selling or sharing the City’s data without the City’s consent. • The City has opted out of allowing Flock to use its data to train machine learning models.

The proposed purchase is exempt for competitive bidding and selection pursuant to Vernon Municipal Code (VMC) Section 3.32.110(A)(2), which states that competitive bidding shall not be required for contracts for supplies, equipment, or services available from only one vendor or for unique services. A letter from Flock confirming it is the sole developer and provider of its ALPR solution is provided for reference (Attachment 2). Additionally, pursuant to Section 3.32.220(B) of the VMC, all professional services contracts shall be rebid every three years unless found commercially unreasonable. Since the proposed agreement exceeds $100,000, VMC Section

3.32.110(B)(3) indicates that the authority to make this finding rests with City Council. Staff recommends that City Council approve a term exceeding three years given the City’s existing use of the Flock ALPR systems and as combining all the ALPR systems into one agreement will align with the City’s fiscal year and enhance administrative efficiency.

The proposed agreement with Flock requires City Council approval pursuant to VMC Section

3.32.030(A) which states all contracts shall be approved only by the City Council except contracts with a total value over the lifetime of the contract of up to $100,000.00. The cost of the 38-month agreement for 19 ALPR cameras is $172,702.05. The PD is also requesting to authorize a contingency amount of $5,000.00 for unforeseen costs, if necessary, for a total amount not-toexceed $177,702.05.

The City Attorney’s Office has approved the proposed agreement with Flock as to form.

Strategic Plan Goals
Enhance Community Infrastructure and Facilities
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Sufficient funds are available in the Information Technology (IT) General Fund, Repairs and Maintenance, Account No. 011-010-110-529110 in an amount not-to-exceed $177,702.05 for a 38-month term, which includes the $5,000.00 contingency amount.

Attachments

1. Flock Agreement (2026-2029)

2. Flock Sole Source Justification
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1 Master Services Agreement
This Master Services Agreement (this “Master Services Agreement”) is entered into by and between Flock Group Inc, with a place of business at 3284 Northside Parkway NW, Suite 150, Atlanta, GA 30327 (“Flock”), and the entity identified in the signature block (“Customer”) (each a “Party,” and together, the “Parties”). The Agreement is effective as a binding agreement between the Parties as of the Effective Date. The Parties’ Order Form (“Order Form”), attached hereto as Exhibit B, describes the Flock Services to be performed.

1. DEFINITIONS

1.1. “Agreement” means this Master Services Agreement, any exhibits attached hereto, the Reinstall Fee Schedule, the Customer Implementation Guide, and each Order Form, each of which is incorporated by reference herein.

1.2. “Applicable Law” means all federal, state, and local laws and regulations, including those related to the recording or sharing of data, video, photo, or audio content, in each case to the extent directly applicable to the respective Party’s performance of its obligations under this Agreement, including all California disclosure, privacy and data protection laws applicable to Customer as a public entity.

1.3. “Authorized End User(s)” means any individual employees, agents, or contractors of Customer accessing or using the Flock Services on behalf of Customer pursuant to the Agreement, who have been (a) granted access to the Flock Services by Customer in its exercise of reasonable discretion relating to the receipt of the Flock Services hereunder by Customer, and (b) from whom Customer has obtained reasonable assurances that they will comply with the access and use and confidentiality terms in the Agreement.

1.4. “Confidential Information” means information that is disclosed by one Party to the other and that the receiving Party knows is confidential to the disclosing Party or that is of such a nature that someone familiar with the type of business of the disclosing Party would reasonably understand is confidential to it. Confidential Information includes financial, product, and other business information of either Party. Notwithstanding the foregoing, Confidential Information does not include information that the receiving Party can demonstrate: (a) is in the public domain or is generally publicly known through no improper action or inaction by the receiving Party; (b) was rightfully in the receiving Party’s possession or known by it prior to receipt from the disclosing Party; (c) is rightfully disclosed without restriction to the receiving Party by a third-party without violation of obligation to the disclosing Party; or (d) is independently developed for the receiving Party by third parties without use of the Confidential Information of the disclosing Party.

1.5. “Customer Data” means all (a) data and information captured by Flock Hardware on behalf of Customer through the Flock Services (e.g., images, audio, and/or video) and the metadata associated therewith, (b) content input into the Web Interface by Customer or its Authorized End Users, and (c) data and information provided to Flock through the Flock Services by third parties at Customer’s direction. ...
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2 1.6. “Customer Hardware” means the third-party hardware owned, or otherwise provided, by Customer and any other physical elements that interact with the Flock Software to provide the Flock Services.

1.7. “Customer Implementation Guide” means the terms and conditions related to implementation located at https://www.flocksafety.com/implementation-guide.

1.8. “Effective Date” means the date this Master Services Agreement is executed by both Parties.

1.9. “Feedback” means any ideas, advice, recommendations, suggestions, enhancement requests, feedback, or proposals provided by, or on behalf of, Customer or its personnel to Flock related to Flock Property.

1.10. “Flock Software” means the (a) software and/or firmware integrated with or installed on the Flock Hardware or Customer Hardware; and (b) the software functionality of the Web Interface that enables system access and use.

1.11. “Flock Hardware” means all Flock device(s) and physical elements provided by Flock in connection with the Flock Services.

1.12. “Flock Property” means the Flock Services, the Flock Software, Flock Hardware, the Web Interface, Flock’s Confidential Information, and all intellectual property or proprietary information therein or otherwise provided to Customer or its Authorized End Users, including Flock’s technology, patents, trade secrets, trademarks, proprietary methods, algorithms, data models, machine learning methods, documentation, and any modifications or improvements. For clarity, Flock Property also includes any derivative works, intermediate or final outputs, analyses, reports, models, or other results generated by or through the Flock Services. Except for the limited ability to access and download Customer Data within the applicable Retention Period, no rights are granted to download, extract, export, or otherwise create or retain copies of such derivative works, outputs, or other elements of Flock Property.

1.13. “Flock Services” means the services provided by Flock under the Agreement as set forth in the applicable Order Form, including access to and use of the Web Interface by Customer and the provision of Flock Software and Flock Hardware.

1.14. “Force Majeure Event” means, with respect to a Party, any event or circumstance, whether or not foreseeable, that was not caused by that Party and any consequences of that event or circumstance.

1.15. “Order Form” means any Flock Order Form entered into by the Parties on the date hereof or following the Effective Date and incorporated herein by reference. Each Order Form will describe the Flock Services to be performed and the period for performance.

1.16. “Permitted Purpose” means a legitimate public safety and/or business purpose, including the awareness, prevention, and prosecution of crime; investigations; and prevention of commercial harm, to the extent permitted by law.

1.17. “Reinstall Fee Schedule” means the fee schedule set forth at https://www.flocksafety.com/reinstall-fee-schedule.

1.18. “Retention Period” means the time period that footage captured by the Flock Hardware or Customer Hardware via the Flock Services and the associated metadata is stored by Flock, as specified in the applicable Order Form. ...
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3 1.19. “Web Interface” means the website(s) or application(s) through which Customer and its Authorized End Users can access the Flock Services.

2. ACCESS AND USE

2.1. Provision of Access. Subject to compliance with the terms of the Agreement, Flock grants to Customer and its Authorized End Users a limited, non-exclusive, nontransferable right to access and use the Flock Services via the Web Interface during the term of this Agreement, solely for the Permitted Purpose. Customer shall access the Flock Services through the Web Interface only (a) through its Authorized End Users acting within the scope of their service for Customer; (b) for the internal use of Customer; and (c) from and within the United States.

2.2. Authorized End Users. Authorized End Users agree to provide Flock with accurate, complete, and updated registration information. Authorized End Users may not select as their User ID, a name that they do not have the right to use, or any other name with the intent of impersonation. Customer and Authorized End Users may not transfer their account to anyone else without Flock’s prior written permission. Authorized End Users shall not share their account username or password information and must protect the security of the username and password. Authorized End Users shall only use Customer-issued email addresses for the creation of their User ID. Customer shall be responsible for all acts and omissions of Authorized End Users in connection with their access and use of the Flock Services, including each Authorized End User’s compliance with the terms of the Agreement and Applicable Law. Customer shall terminate any Authorized End User’s access to the Flock Services (a) when such person no longer meets the definition of “Authorized End User;” (b) if conduct by such Authorized End User breaches any term of the Agreement; or (c) upon such Authorized End User’s indictment, arrest, or conviction for any felony offense. Flock may restrict, suspend, or terminate an Authorized End User’s access to the Flock Services if Flock determines, in its reasonable discretion, that such access has an adverse effect on Flock or any of its customers. Customer is responsible for any use of data, information, or services obtained through the Flock Services by Authorized End Users.

2.3. Access and Use Restrictions. Except as expressly permitted under the Agreement, Customer shall not and shall cause its Authorized End Users not to: (a) access or use Flock Property in connection with the provision of any services to third parties; (b) resell, rent, license, lease, provide service bureau or timeshare services, transfer, encumber, copy, distribute, publish, exhibit, transmit or otherwise make available to any third-party any Flock Property; (c) derive specifications from, reverse engineer, reverse compile, disassemble, translate, record, or create derivative works based on Flock Property; (d) use Flock Property in a manner that delays, impairs, or interferes with system functionality for others or that compromises the security or integrity of any data, equipment, software, or system input or output, including introduction of any viruses or malware into the Web Interface; (e) use Flock Property or any part or aspect thereof in violation of Applicable Law or to mislead or harass anyone; or (f) use Flock Property, ...
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4 except as specifically permitted under the Agreement. Use of, or access to, Flock Property not in accordance with the terms of the Agreement is strictly prohibited. Any violation of this Section 2 will cause Flock irreparable and immediate harm, and Flock is entitled to injunctive relief to prevent such violation. In the event of a violation of this Section 2.3, Flock may temporarily suspend Customer and/or any Authorized End User’s access to any portion or all of the Flock Property (a “Service Suspension”).

Customer shall not be entitled to any remedy for any Service Suspension imposed in accordance with the Agreement, including any reimbursement, tolling, or credit.

3. SERVICES AND SUPPORT

3.1. Support Services. Flock shall monitor the Flock Services, and any applicable device health, in order to improve performance and functionality. Flock will use commercially reasonable efforts to respond to requests for support within seventy-two (72) hours.

Flock will provide Customer with reasonable technical and on-site support and maintenance services in-person, via phone, or by email at [email protected] (such services collectively referred to as “Support Services”).

3.2. Service Disruptions. Flock Services may be disrupted in the event that: (a) Flock’s provision of the Flock Services to Customer or any Authorized End User is prohibited by Applicable Law; (b) any third-party services required for Flock’s provision of the Flock Services are interrupted; (c) the Flock Services are being used for malicious, unlawful, or otherwise unauthorized purposes; (d) there is a threat or attack on any Flock Property by a third-party; or (e) there is scheduled or emergency maintenance (“Service Disruption”). Flock will make commercially reasonable efforts to provide written notice of any Service Disruption to Customer, to provide updates, and to resume providing access to the Flock Services as soon as reasonably possible after the event giving rise to the Service Disruption. To the extent the Service Disruption is not caused by Customer’s direct actions or omissions (or those of parties associated with Customer), the term of the Flock Services affected by such Service Disruption will be tolled by the duration of the Service Disruption for any continuous disruption lasting at least one (1) full day. For example, in the event of a Service Disruption lasting five (5) continuous days, Customer will receive a credit for five (5) free days at the end of the term of the applicable Order Form. The remedy of a credit described in this Section 3.2 will be Customer’s sole and exclusive remedy for the acts or omissions of Flock relating to such Service Disruption.

4. DATA USE AND LICENSING

4.1. Customer Data. As between Flock and Customer, all right, title, and interest in and to Customer Data belong to and are retained by Customer. During the term of this Agreement, Customer hereby grants to Flock a limited, non-exclusive, royalty-free, irrevocable, perpetual, worldwide license to use and disclose Customer Data to provide ...
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5 the Flock Services. Customer Data will be available for Authorized End Users to access and download via the Web Interface during the applicable Retention Period. For clarity, Flock retains the exclusive right to determine and control the method, timing, format, and medium of such access or delivery, and is not obligated to provide Customer Data in any alternative form, format, or transmission method outside of the Web Interface. To the extent any Customer Data constitutes Personal Information (as defined under Applicable Laws), Flock will process such data in accordance with Applicable Law and the privacy policy set forth at https://www.flocksafety.com/legal/privacy-policy.

4.2. Flock Property. Except for the right to use Flock Property subject to the terms and conditions contained herein, the Agreement does not confer on Customer a license in, ownership of, or interest in Flock Property. Flock developed or acquired Flock Property exclusively at its private expense. As between the Parties, Flock Property and all right, title, and interest in and to it is and will remain the exclusive property of Flock.

4.3. Ownership and Use of Customer Data. Notwithstanding any provision of the Agreement, the Terms and Conditions, and/or any and all other online terms and conditions that may apply to the Agreement, the parties agree that: 1) all Customer Data, including metadata, collected by Flock cameras operated by Customer is owned and controlled by Customer. Customer solely controls who may access Customer Data, and Customer may revoke sharing privileges at any time in coordination with Flock customer support; 2) Flock shall not sell or share (provided, however, that Flock may share Customer Data solely to the extent necessary to perform and deliver the Services) Customer Data without Customer’s express, written consent; and 3) Flock acknowledges that Customer has opted out of allowing Flock to use Customer Data for machine learning purposes, and that Customer Data will be excluded from such use.

5. CONFIDENTIALITY. Each Party shall exercise reasonable care to hold Confidential Information in confidence and not use it or disclose it to any other person or entity, except (a) as permitted under this Agreement or as reasonably necessary for the performance or enforcement of this Agreement; (b) as agreed in writing by the other Party; (c) for the Party’s proper management and administration (provided that it obtains reasonable assurances from all recipients that they will keep the information confidential and use it only for the purpose of its disclosure; and provided further that it is responsible for all acts and omissions of any such recipient in violation of this Section 5); (d) as required by law, including any court order, subpoena, or other valid legal process, provided that receiving Party shall, to the extent permissible, give the disclosing Party reasonable prior notice of such disclosure; or (e) as requested by a government agency to address the risk of imminent harm to any person, provided that: (i) the requesting agency provides Flock with a written statement describing the imminent harm to life or serious bodily injury as soon as reasonably practicable; (ii) the disclosure is limited to the minimum information necessary to address the specific imminent harm. Any violation of this Section 5 may cause the nonviolating Party irreparable and immediate harm, and such Party is entitled to injunctive relief to prevent such violation. Upon termination of this Agreement, all Confidential Information will be returned to the disclosing Party, destroyed or erased (if recorded on an erasable storage medium), together with any copies thereof.
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6 6. PAYMENT OF FEES

6.1. Billing and Payment of Fees. Customer shall pay the fees set forth in the applicable Order Form based on the billing structure and payment terms as indicated in the Order Form. To the extent the Order Form is silent, Customer shall pay all invoices thirty (30) days from the date of each such invoice. If Customer believes that Flock has billed Customer incorrectly, Customer must contact Flock no later than thirty (30) days following the date of the first invoice in which the error or problem appeared to receive an adjustment or credit. Customer acknowledges and agrees that a failure to contact Flock within this period will serve as a waiver of any claim. If any undisputed fee is more than thirty (30) days overdue, Flock may, without limiting its other rights and remedies, suspend delivery of the Flock Services until such undisputed invoice is paid in full. Flock shall provide at least thirty (30) days’ prior written notice to Customer of the payment delinquency before exercising any suspension right. Customer shall direct all queries regarding billing or payment concerns to [email protected]. Flock may impose a late fee equal to the lesser of (a) 1.5%, or (b) the highest rate permitted by Applicable Law, each month on all amounts overdue beyond ten (10) days, but this charge will not waive or extend any obligation of Customer to make payments when due.

6.2. Notice of Changes to Fees. In the event of any changes to fees, Flock shall provide Customer with sixty (60) days’ notice (email sufficient) prior to the end of the term of the applicable Order Form. Any such changes to fees shall only impact subsequent renewal terms.

6.3. Taxes. Customer is responsible for all taxes, levies, or duties, excluding only taxes based on Flock’s net income, imposed by taxing authorities associated with the order. If Flock has the legal obligation to pay or collect taxes, including amounts subsequently assessed by a taxing authority, for which Customer is responsible, the appropriate amount shall be invoiced to and paid by Customer unless Customer provides Flock a legally sufficient, valid tax exemption certificate authorized by the appropriate taxing authority. Flock shall not charge Customer any taxes from which it is exempt. If any deduction or withholding is required by law, Customer shall notify Flock and shall pay Flock any additional amounts necessary to ensure that the net amount that Flock receives, after any deduction and withholding, equals the amount Flock would have received if no deduction or withholding had been required.

7. TERM AND TERMINATION

7.1. Term. These Terms & Conditions will be effective from the Effective Date and will continue in full force and effect until terminated as set forth herein. The term of each Order Form will be as set forth therein. Unless otherwise indicated on the Order Form, the subscription term of the Order Form shall be tied to the first installation of Flock Hardware, as applicable.

7.2. Termination. Upon termination or expiration of the Agreement or any applicable Order Form, Flock will remove any applicable Flock Hardware within a commercially ...
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7 reasonable time period. Either Party may terminate this Agreement effective upon written notice to the other Party if (a) the other Party defaults in performance of any material provision of the Agreement and such default is not cured within thirty (30) days following written notice describing the specific default; (b) the other Party violates Applicable Law; (c) the other Party files a voluntary petition in bankruptcy or an involuntary petition is filed against it; (d) the other Party is adjudged bankrupt; (e) a court assumes jurisdiction of the assets of the other Party under a federal reorganization act or other statute; (f) a trustee or receiver is appointed by a court for all or a substantial portion of the assets of the other Party; (g) the other Party becomes insolvent, suspends business, or ceases to conduct its business in the ordinary course; (h) the other Party makes an assignment of its assets for the benefit of its creditors; or (i) there are no active Order Forms under this Master Services Agreement. In the event Customer terminates the Agreement pursuant to Section 7.2(a), Flock will refund Customer a pro-rata portion of the pre-paid fees for the Flock Services not received prior to the date of termination.

7.3. Survival. The following Sections will survive termination: 1, 4, 5, 6, 7, 8.5, 9, 9.1 and

11. 7.4. Payment Upon Termination. Upon termination of the Agreement or any Order Form for any reason, Customer shall pay to Flock all amounts due hereunder for all Flock Services rendered through the date of termination in accordance with the terms of the Agreement.

8. REPRESENTATIONS AND WARRANTIES

8.1. Manufacturer Defect. Upon a malfunction or failure of Flock Hardware (a “Defect”), Customer must notify Flock’s technical support team. Flock shall conduct an inspection or test any Customer-reported Defect within seven (7) business days of notification, and Flock shall use commercially reasonable efforts to repair or replace, in Flock’s sole discretion, the defective Flock Hardware at no additional cost to Customer.

8.2. Flock Representations and Warranties. Flock represents and warrants to Customer that (a) the Flock Services, when used properly and as expressly authorized by Flock, do not infringe any valid patent, registered copyright, or other registered intellectual property right under the laws of the United States, provided that Flock makes no warranty to the extent that such infringement results from (i) use of the Flock Services by Customer in combination with any data, software, or equipment provided by Customer or any third party that could have been avoided by use or access of the Flock Services without such data, software, or equipment, or (ii) any breach of an agreement by, or any negligent or other wrongful act or omission of, Customer or any party acting on behalf of Customer; (b) Flock’s personnel will perform the Flock Services in a professional and workmanlike manner; (b) Flock’s personnel performing the Flock Services will be trained and will perform the Flock Services in all material respects in accordance with prevailing industry standards, and (c) Flock’s collection, use, storage, ...
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8 disclosure, and sharing of Customer Data complies shall at all times comply with Applicable Law.

8.3. Customer Representations and Warranty. Customer represents and warrants to Flock that Customer shall use the Flock Services only in compliance with the Agreement, the Permitted Purpose, and Applicable Law.

8.4. Mutual Representations and Warranties. Each Party represents and warrants to the other Party that (a) it has the requisite corporate power and authority to execute and perform its obligations under the Agreement; (b) the person executing the Agreement on its behalf has the authority to bind it hereunder and that such Party’s execution of the Agreement is not in violation of such Party’s bylaws, certificate of incorporation, or other comparable document; (c) the execution, delivery, or performance of the Agreement will not violate or conflict with, require consent under, or result in any breach or default of (i) Applicable Law, or (ii) any covenants or agreements by which such Party or any of its assets are bound; and (d) each Party will comply with Applicable Law.

8.5. Disclaimer. THE REMEDY DESCRIBED IN SECTION 8.1 ABOVE IS CUSTOMER’S SOLE AND EXCLUSIVE REMEDY, AND FLOCK’S SOLE LIABILITY, WITH RESPECT TO DEFECTS. FLOCK DOES NOT WARRANT THAT THE FLOCK SERVICES WILL

BE UNINTERRUPTED OR ERROR FREE NOR DOES IT MAKE ANY WARRANTY AS

TO THE RESULTS THAT MAY BE OBTAINED FROM USE OF THE FLOCK SERVICES. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 8, THE FLOCK SERVICES ARE PROVIDED “AS IS,” AND FLOCK DISCLAIMS ALL

REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE, EXPRESS

OR IMPLIED (EITHER IN FACT OR BY OPERATION OF LAW), WITH RESPECT TO ANY SERVICE OR ITEM PROVIDED HEREUNDER. THIS SECTION 8.5 APPLIES TO THE EXTENT PERMITTED BY LAW.

8.6. Insurance. Flock will maintain the insurance policies set forth on Exhibit A attached hereto.

9. LIMITATION OF LIABILITY. FLOCK’S CUMULATIVE, AGGREGATE LIABILITY IN

CONNECTION WITH, OR ARISING IN ANY WAY OR IN ANY DEGREE FROM, THE

AGREEMENT, FROM THE FLOCK SERVICES, OR OTHERWISE FROM THE ACTS OR

OMISSIONS OF FLOCK WILL NOT EXCEED THE TOTAL AMOUNT PAID BY CUSTOMER TO FLOCK IN THE TWELVE (12) MONTHS BEFORE SUCH CLAIM AROSE.

NOTWITHSTANDING ANYTHING TO THE CONTRARY, FLOCK WILL NOT BE LIABLE

FOR INDIRECT, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OR LOSSES; ADDITIONAL OVERHEAD AND PAYROLL; LOST PROFITS OR BUSINESS OPPORTUNITIES; LOSS OF DATA; OR THE COST OF PROCUREMENT OF SUBSTITUTE ITEMS OR SERVICES. THIS SECTION 9 APPLIES

TO THE EXTENT PERMITTED BY LAW, INCLUDING BUT NOT LIMITED TO CALIFORNIA CIVIL CODE SECTION 1668, AND THE FOREGOING LIMITATIONS OF

LIABILITY SHALL NOT APPLY (I) IN THE EVENT OF FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT. Customer hereby acknowledges that the remedies set forth above are reasonable and will not fail of their essential purpose. ...
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9 9.1. Flock Indemnification. To the extent permitted by law, Flock, (the “Indemnifying Party”) agrees to defend the Customer (including Customer’s equity holders, directors, officers, employees, contractors, agents, affiliates, successors and assigns) (the “Indemnified Party”) from and against any and all third party actions, suits and/or claims, and indemnify and hold harmless the Indemnified Party for all damages, liabilities and expenses (including reasonable attorneys’ fees), awarded in a final judgment (collectively, “Losses”) arising out of: (i) the gross negligence, intentional misconduct or fraud of the Indemnifying Party; or (ii) violation of Applicable Law by the Indemnifying Party in connection with its performance under this Agreement. The Indemnifying Party's obligations in connection with a request for indemnity under this Section 9.1 are expressly conditioned upon each of the following:
(i) the Indemnified Party will promptly provide written notice to the Indemnifying Party of any threatened or actual Indemnified Claim, and will provide all reasonably available information about such Indemnified Claim, as well as access to the Indemnified Party’s employees and personnel;
(ii) the Indemnifying Party will have sole control of the defense or settlement of any Indemnified Claim (provided that the Indemnified Party may, in its sole discretion and at its sole cost and expense, participate in the defense of any such Indemnified Claim using attorneys selected by it, provided that such participation shall not interfere with the Indemnifying Party’s control of the defense); and
(iii) the Indemnified Party will reasonably cooperate with the Indemnifying Party to facilitate the settlement or defense of any Indemnified Claim. The Indemnifying Party will obtain the prior written approval of the Indemnified Party (such consent not to be unreasonably withheld) before entering into any settlement of any Indemnified Claim that would impose additional obligations upon the Indemnified Party or that would admit to any fault or wrongdoing by the Indemnified Party.

For the avoidance of doubt, to the extent the Indemnified Party’s breach of this Agreement, gross negligence, fraud, or willful misconduct contribute to the Losses suffered by the Indemnified Party, the indemnification, defense and hold harmless provisions of this Section shall only apply to that portion of the Losses suffered by the Indemnified Party that are not attributable to such breach of this Agreement, negligence, gross negligence, or willful misconduct on the part of the Indemnified Party.

10. FLOCK HARDWARE (APPLICABLE ONLY WHERE CUSTOMER HAS LICENSED

FLOCK HARDWARE)

10.1. Flock Hardware. Customer is not permitted to remove, reposition, re-install, tamper with, alter, adjust, or otherwise take possession or control of Flock Hardware. Customer agrees and understands that in the event Customer is found to engage in any of the ...
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10 foregoing restricted actions, all warranties herein shall be null and void, and Flock shall be entitled to terminate the Agreement in accordance with Section 7.2(a). Customer shall not perform any acts which would interfere with the retention of title of the Flock Hardware by Flock. Should Customer default on any payment of the Flock Services, Flock may immediately cut off access to the Web Interface and remove Flock Hardware at Flock’s discretion. Such actions, if made by Flock, shall not be deemed a waiver of Flock’s rights to any damages Flock may sustain as a result of Customer’s default, and Flock shall have the right to enforce any other legal remedy or right.

10.2. Deployment Plan. Flock shall advise Customer on the location and positioning of the Flock Hardware for optimal product functionality, as conditions and locations allow.

Flock will collaborate with Customer to design the strategic geographic mapping of the location(s) and implementation of Flock Hardware to create a deployment plan associated with each Order Form (each, a “Deployment Plan”). In the event that Flock determines that Flock Hardware will not achieve optimal functionality at a designated location, Flock shall have final discretion to veto a specific location and will provide alternative options to Customer. After installation of Flock Hardware, any subsequent requested changes to the Deployment Plan, including relocating, re-positioning, adjusting of the mounting, removing foliage, replacement, and/or changes to heights of poles will incur a fee as set forth in the Reinstall Fee Schedule. Customer will receive prior notice and confirm approval of any such fees.

10.3. Customer Installation Obligations. Customer is responsible for any applicable supplementary cost as described in the Customer Implementation Guide. Customer represents and warrants that it has, or shall lawfully obtain, all necessary right title and authority and hereby authorizes Flock to install the Flock Hardware at the designated locations and to make any necessary inspections or maintenance in connection with such installation.

10.4. Replacements In the event that Flock Hardware is lost, stolen, or damaged, Customer may request a replacement of Flock Hardware at a fee as set forth in the Reinstall Fee Schedule. In the event Customer chooses not to replace lost, damaged, or stolen Flock Hardware, Customer understands and agrees that Flock is not liable for any resulting impact to the Flock Services, nor shall Customer receive a refund for the lost, damaged, or stolen Flock Hardware.

10.5. Hazardous Conditions. Flock Services do not contemplate hazardous materials, or other hazardous conditions, including, without limit, asbestos, lead, or toxic or flammable substances. In the event any such hazardous materials are discovered in the designated locations in which Flock is to perform services under the Agreement, Flock shall have the right to cease work immediately.

11. MISCELLANEOUS

11.1. Severability. If any provision of the Agreement is found to be illegal, unenforceable, or invalid, that provision will be limited or eliminated to the minimum extent necessary so that the Agreement will otherwise remain in full force and effect. ...
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11 11.2. Assignment. Neither Party may assign the Agreement or any right under the Agreement, in each case by operation of law or otherwise, except as otherwise permitted hereunder without the prior written consent of the other Party, and any attempt to assign the Agreement or any right under the Agreement in breach of the provisions of this Section 11.2 shall be null and void. The foregoing notwithstanding, either Party may assign the Agreement upon written notice to the other Party in connection with (a) any reorganization, conversion, consolidation or merger of such Party, (b) any transaction resulting in the holders (together with their affiliates) of a majority of the voting securities, membership interest or right to appoint a majority of the members of the board of directors or similar governing body of such Party as of immediately prior to such transaction, holding less than such a majority as of immediately after such transaction, or (c) any sale, transfer or exclusive license of all or a majority of the assets of such Party that are pertinent to the Agreement or, in each case of (a) through (c) whether consummated in one transaction or a series of related transactions. For the avoidance of doubt, the assigning Party and the assignee will remain liable jointly and severally for any unperformed obligations under the Agreement or any breach hereof arising prior to the effective date of any assignment of the Agreement. The Agreement is binding on the Parties and their successors and permitted assigns.

11.3. Entire Agreement. The Agreement constitutes the entire agreement between the Parties relating to the Flock Services and supersedes all prior agreements, understandings, and representations relating to the Flock Services. No waiver or modification to the Agreement will be effective or binding unless signed by Customer and a duly authorized representative of Flock, except as otherwise provided herein.

None of Customer’s purchase orders, authorizations or similar documents will alter the terms of the Agreement or be binding upon Flock, and any such terms are expressly rejected. Any mutually agreed purchase order is subject to the terms of the Agreement. Customer agrees that Customer’s purchase is neither contingent upon the delivery of any future functionality or features nor dependent upon any oral or written comments made by Flock with respect to future functionality or feature.

11.4. Relationship. The Parties intend that nothing contained in the Agreement be construed to create an agency, partnership, joint venture, employment, or like relationship between the Parties, and their relationship is and will remain that of independent Parties to a contractual service relationship. Neither Party will be liable for the debts or obligations of the other Party.

11.5. Governing Law; Dispute Resolution. The Agreement, and any controversy or claim arising out of or relating to the Agreement (each, a “Dispute”) shall be governed exclusively by, and construed and enforced in accordance with, the laws of the State of California without regard to its conflicts of laws principles. The Parties consent to the exclusive jurisdiction and venue of the state or federal courts located in Los Angeles County, California for any legal action or proceeding arising under this Agreement. If any Dispute cannot be settled through direct discussions, the Parties agree to endeavor first to settle such Dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to ...
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12 arbitration. The Parties further agree that any Dispute that remains unresolved by mediation shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The Parties agree that the United Nations Convention for the International Sale of Goods is excluded in its entirety from this Agreement.

11.6. Publicity. Flock will obtain Customer’s consent before using Customer’s name or logo in a manner signifying an endorsement of Flock by Customer; provided, however that Flock may refer to Customer as a current customer without first obtaining Customer’s consent.

11.7. Feedback. Any Feedback: (a) is given to Flock without claim of intellectual property right by Customer, (b) by its receipt grants Flock a royalty free, worldwide, transferable, sub-licensable, irrevocable, perpetual license to commercialize, use, and incorporate such Feedback into its software, services, or systems, or use as it otherwise deems necessary or desirable in its business, and (c) will not enable Customer to claim any interest in or ownership of Flock Property.

11.8. Export. Customer may not remove or export from the United States or allow the export or re-export of Flock Property or anything related thereto, or any direct product thereof in violation of any restrictions, laws or regulations of the United States Department of Commerce, the United States Department of Treasury Office of Foreign Assets Control, or any other United States or foreign Customer or authority. As defined in Federal Acquisition Regulation (“FAR”), section 2.101, the Flock Services, Flock Hardware, and documentation are “commercial items” according to the Department of Defense Federal Acquisition Regulation (“DFAR”) section 252.2277014(a)(1) and are deemed to be “commercial computer software” and “commercial computer software documentation.” Flock is compliant with FAR Section 889 and does not contract or do business with, use any equipment, system, or service that uses the enumerated banned Chinese telecommunication companies, equipment, or services as a substantial or essential component of any system, or as critical technology as part of any Flock system. Consistent with DFAR section 227.7202 and FAR section 12.212, any use, modification, reproduction, release, performance, display, or disclosure of such commercial software or commercial software documentation by the U.S.

Government will be governed solely by the terms of the Agreement and will be prohibited except to the extent expressly permitted by the terms of the Agreement.

11.9. Headings. The headings are merely for organization and should not be construed as adding meaning to the Agreement or interpreting the associated sections.

11.10. Conflict. To the extent of a conflict between the Agreement and any applicable statement of work or mutually-agreed purchase order, the Agreement controls unless explicitly stated otherwise. From time to time, Flock may offer certain special terms applicable to the Order Form in which they are included (“Special Terms”). To the extent that any terms of this Master Services Agreement are inconsistent or conflict with the Special Terms set forth in any Order Form, the Special Terms shall control.

11.11. Notices. All notices under the Agreement will be in writing and will be deemed to have been duly given when received, if personally delivered; when receipt is electronically ...
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13 confirmed, if transmitted by email; the day after it is sent, if sent for next day delivery by recognized overnight delivery service; and upon receipt, if sent by certified or registered mail, return receipt requested. All notices will be provided to the email or mailing address listed in the Order Form.

11.12. Non-Appropriation. All obligations of the Customer under the Agreement which require the expenditure of public funds are conditioned on the availability of said funds appropriated for that purpose. To the extent applicable, if funds are not appropriated for a future fiscal year, Customer shall have the right to terminate the Agreement for non-appropriation at the end of the applicable fiscal year upon thirty (30) days’ written notice to Flock. Customer shall remain responsible for all amounts incurred prior to termination, and non-appropriation shall not be based on discretionary budget decisions or operate as a termination for convenience right.

11.13. Construction. When used in the Agreement, “including” means “including without limitation.”

11.14. Force Majeure.

11.14.1 If a Force Majeure Event prevents a Party from complying with any one or more obligations under the Agreement, that inability to comply will not constitute breach if (a) that Party uses reasonable efforts to perform those obligations; (b) that Party’s inability to perform those obligations is not due to its failure to (i) take reasonable measures to protect itself against events or circumstances of the same type as that Force Majeure Event, or (ii) develop and maintain a reasonable contingency plan to respond to events or circumstances of the same type as that Force Majeure Event; and (c) that Party complies with its obligations under Section

11.11. 11.14.2 During a Force Majeure Event, the noncomplying Party shall use reasonable efforts to limit damages to the other Party and to resume its performance under the Agreement.

11.15. Third Parties. Except as explicitly set forth herein, none of the provisions of the Agreement will be for the benefit of or enforceable by any third-party.

11.16. Third Party Requests for Confidential or Proprietary Information. The Parties acknowledge that Customer is a California public agency subject to the California Public Records Act (“CPRA”) under which Customer, upon request, is required to disclose certain records in Customer’s possession or under its control to third parties.

Flock understands and agrees that Customer may be required to disclose Confidential or Proprietary Information of Flock’s pursuant to the CPRA. If Customer receives a CPRA request seeking disclosure of Confidential or Proprietary Information, Customer shall promptly notify Flock in writing; provide Flock a reasonable opportunity to identify the specific data or records claimed to be exempt and the legal basis for such exemption; and assert, in good faith, applicable exemptions from disclosure identified by Flock. Customer shall not disclose Confidential or Proprietary Information until Flock has been afforded a reasonable opportunity to seek judicial relief, unless disclosure is required by a court order or other binding legal requirement. Flock shall bear sole responsibility, including ...
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14 attorney’s fees and other legal costs, for seeking any injunctive or other judicial relief necessary to prevent disclosure of Flock’s Confidential or Proprietary Information.

11.17. Waivers. No failure by a Party to insist upon the strict performance of any term or condition of the Agreement or to exercise any right or remedy hereunder will constitute a waiver.

11.18. Execution. In connection with the Flock Services, a copy of a signed document sent by PDF or fax will be deemed an original in the hands of the recipient. The Agreement may be executed in counterparts and exchanged by electronic means, each of which shall be deemed an original, and both of which together constitute only one agreement between the Parties.

Each Party is signing the Agreement on the date stated below that Party’s signature.

FLOCK GROUP, INC. CUSTOMER: CITY OF VERNON
By:

Name: Name: Brian Saeki
Title: Title: City Administrator
Date: Date:

By: ATTEST:

Name:

Genoveva Rocha, City Clerk
Title:

Date: APPROVED AS TO FORM:

Zaynah Moussa-Milward,
City Attorney
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1 EXHIBIT A

INSURANCE

1. Required Coverage. Flock shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the services under the Agreement and the results of that work by Flock or its agents, representatives, employees, or subcontractors. Insurance shall be placed with insurers with a current A. M. Best rating of no less than “A” and “VII”. Flock shall obtain and, during the term of the Agreement, shall maintain policies of professional liability (errors and omissions), automobile liability, and general liability insurance for insurable amounts of the limits listed herein. The insurance policies shall provide that the policies shall remain in full force during the life of the Agreement. Flock shall procure and shall maintain during the life of the Agreement Worker's Compensation insurance as required by applicable State law for all Flock employees. For the avoidance of doubt, (a) all required insurance limits by Customer can be met through a combination of primary and excess/umbrella coverage, and (b) Flock’s Cyber and Professional Liability/Errors and Omissions insurance has a shared limit of Five Million Dollars (5,000,000) per incident and in the aggregate.

2. Types and Amounts Required. Flock shall maintain the following insurance coverage for the duration of the Agreement:
(a) Commercial General Liability insurance written on an occurrence basis with limits of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate for bodily injury, death, and property damage, including personal injury, liability assumed under an insured contract, independent contractors, broad-form property damage, and product and completed operations coverage; Customer, its directors, commissioners, officers, employees, agents, and volunteers must be endorsed on the policy as additional insureds. The additional insured coverage under Flock’s policy shall be primary and non-contributory and will not seek contribution from the Customer’s insurance. The policy shall be endorsed to include a waiver of subrogation; (b) Workers Compensation insurance in accordance with statutory limits and Employer’s Liability Insurance with limits of not less than one million dollars ($1,000,000) per accident. The policy shall be endorsed to waive all rights of subrogation against Customer, its directors, commissioners, officers, employees, and volunteers for losses arising from performance of the Agreement;
(c) Professional Liability/Errors and Omissions insurance with limits of Five Million Dollars ($5,000,000) each claim and in the aggregate;
(d) Commercial Automobile Liability insurance with a combined single limit of One Million Dollars ($1,000,000) per occurrence for bodily injury, death, and property ...
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2 coverage, including owned and non-owned and hired automobile coverage. Customer, its directors, commissioners, officers, employees, agents, and volunteers must be endorsed on the policy as additional insureds and. Under Flocks’ policy, there shall be a waiver of subrogation, and the policy shall be primary and non-contributory and will not seek contribution from Customer’s insurance; and
(e) Cyber Liability insurance written on a per claim basis with limits of Five Million Dollars ($5,000,000)
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3 EXHIBIT B

ORDER FORM
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Flock Safety + CA - Vernon PD
Flock Safety
3284 Northside Parkway NW, Suite 150
Atlanta, GA 30327
MAIN CONTACT:

Jake Sherman
[email protected]
8187467444
Quote Number: Q-203188
Expiration Date: 12/31/2026
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ORDER FORM
Customer: CA - Vernon PD Initial Term: 38 Months
Legal Entity Name: CA - Vernon PD Renewal Term: 36 Months Accounts Payable Email: [email protected]
[email protected]
Payment Terms: Net 30
Address: 4305 South Santa Fe Avenue Vernon, California
90058
Billing Frequency: Annual
Retention Period: 30 Days
Hardware and Software Products
Recurring amounts over subscription term
Item Cost Quantity Total
Flock Safety Platform
Flock Safety Platform
Flock Safety Platform - Essentials Included 1 Included
Flock Safety LPR Products
Flock Safety LPR, fka Falcon Included 19 Included
Subtotal (2 Months): $1,702.05
Annual Recurring Subtotal: $57,000.00
Estimated Tax: $0.00
Contract Total: $172,702.05
Taxes shown above are provided as an estimate. Actual taxes are the responsibility of the Customer. This Agreement may be renewed for successive renewal terms of the greater of one year or the length set forth on the Order Form (each, a “Renewal Term”) upon written mutual agreement prior to the end of the then-current term.

The Term for Flock Hardware shall commence upon first installation and validation, except that the Term for any Flock Hardware that requires selfinstallation shall commence upon execution of the Agreement. In the event a Customer purchases more than one type of Flock Hardware, the earliest Term start date shall control. In the event a Customer purchases software only, the Term shall commence upon execution of the Agreement.

Special Terms: • This term shall be effective 05/20/2026 - 6/30/2029. • This Agreement supersedes any and all previously executed agreement between the Parties, relating to the provision of services by Flock to Customer and any exhibits attached thereto or incorporated therein by reference. Upon execution of this Agreement, all previously executed agreements pertaining to the Services provided shall run coterminous with the Term of this Agreement. In the event of any overlap in subscription terms and prior invoices, payments will be provided in pro rata credit. Any estimates provided on credits are subject to change based on execution of new contract.

If Customer is located in any of the state(s) listed at https://www.flocksafety.com/legal/state-required-provisions, the applicable state-required terms set forth therein are incorporated into the Agreement.
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Billing Schedule
Billing Schedule Amount (USD)
At Contract Signing
(2 Months - 5/20/2026 – 6/30/2026) $1,702.05
Year 1 (7/1/2026 – 6/30/2027) $57,000.00
Year 2 (7/1/2027 – 6/30/2028) $57,000.00
Year 3 (7/1/2028 – 6/30/2029) $57,000.00
Contract Total $172,702.05
*Tax not included
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Product and Services Description
Flock Safety Platform Items Product Description
Flock Safety LPR, fka Falcon
Law enforcement grade infrastructure-free (solar power + LTE) license plate recognition camera with Vehicle Fingerprint ™ technology (proprietary machine learning software) and real-time alerts for unlimited users.

Flock Safety Platform - Essentials
An integrated public safety platform that detects, centralizes and decodes actionable evidence to increase safety, improve efficiency, and connect the community.

FlockOS Features & Description
FlockOS Features Description
Community Network Access
The ability to request direct access to feeds from privately owned Flock Safety LPR cameras located in neighborhoods, schools, and businesses in your community, significantly increasing actionable evidence that clears cases.

Unlimited Users Unlimited users for FlockOS
State Network (License Plate Lookup Only) Allows agencies to look up license plates on all cameras opted into the Flock Safety network within your state.

Nationwide Network (License Plate Lookup Only)
With the vast Flock Safety sharing network, law enforcement agencies no longer have to rely on just their devices alone. Agencies can leverage a nationwide system boasting 10 billion additional plate reads per month to amplify the potential to collect vital evidence in otherwise dead-end investigations.

Law Enforcement Network Access The ability to request direct access to evidence detection devices from Law Enforcement agencies outside of your jurisdiction.

Time & Location Based Search Search full, partial, and temporary plates by time at particular device locations License Plate Lookup Look up specific license plate location history captured on Flock devices Vehicle Fingerprint Search Search footage using Vehicle Fingerprint™ technology. Access vehicle type, make, color, license plate state, missing / covered plates, and other unique features like bumper stickers, decals, and roof racks.

Insights & Analytics Reporting tool to help administrators manage their LPR program with device performance data, user and network audits, plate read reports, hot list alert reports, event logs, and outcome reports.

Real-Time NCIC Alerts on Flock ALPR Cameras
Receive automated alerts when vehicles entered into established databases for missing and wanted persons are detected, including the FBI's National Crime Information Center (NCIC) and National Center for Missing & Exploited Children (NCMEC) databases.

Unlimited Custom Hot Lists Create a list of vehicles of interest and receive real-time alerts when they’re detected by your Flock LPR cameras.
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Sole Source Vendor Justifi cation
.Attach to all Sole Source Purchases cxceeding 55.000.00 This./brm cannot be usedlor emergency purchases. all emergentl. pttchu.ses must he preapproved by the City Administrator fi'! ('Sec,2.I7.361 Date: June i0.2026
Vendor's Name: Flock Grouo. Inc.

Items to be purchased/Sen'ices required: Lease ninereen ( l9) Automated License Plate Reader (ALPR) Cameras
E One of a kind
E \o Substitute
E Manufacturer
Direct
The commodiq'rservices has no competitive product (one ol'a kind): is only available from one vendor. [Sec. 2.17 .12 (A)(Z)]
A component or replacement pan has no substitute: can onll be obtained liom one vendor. [Sec. 2.17.12(A)(2\l
Products or sen'ices can onll be obained tiom this vcndor because ir is fiom the manufacturer or fiom a manufacturer certitied dealer/repair center. ISec. 2.17.12( A)(2tl
Pro'ide a briel description explaining *h' this 'endor is lhe onl1. one able to pror ide the goods'sen'ices.

Please see the attached Sole Sourc e Letter
Complcted by : Captain Nicholas Perez
Approved b1' Department Head:

Approved bv F inance Director:

Depanment: Policc [)cpartmcnt
Date
Date: 712126 It J..t
Approvcd by City Administrator: I)ate
(
Please include all documentation supporting )our request. [ncomplete requests rrill be re.iected. ...
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f l'ock safety
2026 Sole ource Letter for Floc Safetv@ Public Safetv Solutions June 30, 2026
City of Vemon Police Department
4305 S Santa Fe Ave
Vernon, CA, 90058
Dear Chief Robert Sousa,
This letter serves to confirm that Flock Group lnc. d/b/a Flock Safety is the sole provider of our proprietary public safety technology solution specifically designed for use by law enforcement, communities, and private entities to increase safety and reduce crime. Flock Safety's unique system rntegrates hardware and cloud-based software to enable real{ime data processing and secure data sharing capabilities that are unavailable through other providers.

As the sole developer and provider of this proprietary technology, Flock Safety retains exclusive rights to manufacture, license, and support the products and software we offer. our solutions include cutting-edge features such as machine learning analytics, cJls-compliant data storage, and a centralized system that facilitates collaboration across multiple jurisdictions, supporting a more robust and efficient public safety network. Specifically, Flock Safety provides the ability to access additional cameras from Flock customers, including:

Azusa, Alhambra, Beverly Hills, Monterey Park, El Monte, Montebello, at no additional cost.

No other vendor offers the specific combination of hardware and cloud-based features, CJIScompliant data handling, or the national network capabilities that Flock Safety provides. For these reasons, Flock Safety is the only source available for these services.

Thank you,
Garrett Langley CEO, Flock Safety@
3284 Northside Parkway NW Suite 150, Atlanta, GA
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f {'ock safety
Flock Safetv@ LPR Cameras (Patent No. US 10.795.933 B1) Flock Safety@ is the sole manufacturer, developer, and distributor of Flock Safety@ LPR Camera, Flock Safety@ Long-Range LPR, Flock Safety@ Short-Range LPR, Flock Safety@ Flex LPR Camera, Flock Safety@ LPR Camera for Neighborhoods, and Flock Safety@ LPR Video lntegration.

Flock Safe@ LPR Camera
. Fixed, infrastructure-free license plate recognition ("LPR") cameras suitable for capturing two (2+) lanes of traffic simultaneously with a single camera from a vertical MASS
. lncludes Flock Safety@ solar LPR camera option (next€en platform standard range), which may cover up to three (3) lanes of traffic simultaneously Flock Safe@ Long-Range LPR
. Fixed, infrastructure-free long-range ('LR") LPR, suitable for capturing three (3+) lanes of traffic simultaneously with a single camera from a vertical mass o lncludes Flock Safety@ solar LR LPR option (nextgen platform LR) Flock Safe@ Short-Range LPR
o Fixed, infrastructure-free short-range ('SR') LPR with solar power capability, suitable for wide angle capture (i.e., parking lots or garages)
Flock Safe@ Flex LPR Camera
. Location-flexible, infrastructure-free self-installation LPR camera with solar power option
o Ties seamlessly into the Flock Safety@ ecosystem with a small and lightweight camera . Ability to read up to 30,000 license plates and vehicle attributes on a single battery charge
Flock Safety@ LPR Camera for Neighborhoods
. lnfrastructure- and maintenance-free LPR lor 2417 neighborhood security Flock Safe@ LPR Video lntegration
. lntegrates third-party LPR and video cameras into FlockOS@ utilizing existing camera infrastructures
Vehicle Fingerprint Technology@
o Patented proprietary machine vision to analyze vehicle license plate, state recognition, and vehicle attributes such as color, type, make and objects (roof rack, bumper stickers, etc.) based on image analytics (not car registration data) o Machine vision to capture and identify characteristics of vehicles with a paper license plate and vehicles with the absence of a license plate o Ability to "Save Search" based on description of vehicles using Flock's patented Vehicle Fingerprint Technology@ without the need for a license plate, and set 3284 Northside Parkway NW Suite 150, Atlanta, GA
The Flock Safety@ LPR cameras listed above are the only Law Enforcement Grade LPR cameras to offer the following combination of proprietary features:
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f {'ock safetv
upalertsbasedon*;";.;*
-
-
-'
o Only LPR provider with 'Visual Search," which can transform digital images from any source into an investigative lead by finding matching vehicles based on the vehicle attributes in the uploaded photo
lntegrated Cloud€oftware & Hardware Platform
o Best in class ability to capture and process up to 30,000 vehicles per day with a single camera powered exclusively by solar power
o Wreless deployment of solar powered license plate reading cameras with integrated cellular communication weighing less than 5lbs and able to be powered solely by a solar panel of 65W or less
o Web based footage retrieval tool with filtering capabilities such as vehicle color, vehicle type, vehicle manufaclurer, partial or full license plate, state of license plate, and object detection
o Utilizes motion trigger to start and stop recording without the need for a reflective plate
o Motion detection allows for unique vehicle cases such as bicycle capture, Ary, motorcycle, etc.
o On device machine processing to limit LTE bandwidth consumption o All images and metadata is encrypted throughout its entire lifecycle from ondevice to storage in Flock's US-based CJ|S-compliant cloud o Covert industrial design for minimizing visual pollution Transparency & Ethical Product Design
o One-of-a-kind "Transparency Portal," a public-facing dashboard that details the customer's policies, as well as automatically updates metrics from the Flock Safety@ system
o Built-in integration with National Center for Missing & Exploited Children ('NCMEC') to receive AMBER Alerts to find missing children o Privacy controls to enable certain vehicles to "opt-out" of being captured Live Video lntegration
o Ability to apply computer vision to third-party cameras using the Flock Safety@ LPR video integration, transforming them into evidence capture devices using the same Vehicle Fingerprint@ technology offered on the Flock Safety@ LPR cameras
o Flock Safety@ video integration livestream integrates live stream traffic cameras, publicly or privately owned livestream security cameras into one cloud-based situational awareness dashboard to increase response time in mission-critical incidents
o Manage various government intelligence including LPR, livestream cameras, computer-aided dispatch ('CAD'), automatic vehicle location ("AVL") on Flock Safety@ video integration suite
3284 Northside Parkway NW' Sulte 150, Atlanta, GA
lntegrated Audio Oetection
o Ability to pair with Flock Safety@ audio detection device, which has natively integrated audio detection capabilities utilizing machine learning to recognize audio signatures typical of crimes in progress (e.9., audios) ...
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f {'ock safety
Situational Awareness
o FlockOS@ is the world's flrst and only public safety operating system compatible with Flock Safety@ LPR video cameras, including live streaming fixed and pan{illzoom ("PTZ") video cameras, and the Flock Safety@ audio detection device, while seamlessly integrating first and third-party data across video, LPR, and audro to deliver realtime intelligence and retroactive crime solving in a single-pane real{ime crime center
o Ability to enhance situational awareness capactty by layering all intelligence streams onto the FlockOS@ ESRI-based map
o FlockOS@ features Flock Safety@ unique Real-Time Routing feature that analyzes various data sources to determine where a suspect vehicle has been and its direction of travel, providing users with possible outcomes based on a confidence threshold
Warranty & Service
o Lifetime maintenance and support included in subscription price o Flock Safety@ is the only fully integrated LPR one-stop solution from production of the devices to delivery and installation
o Performance monitoring software to predict potential failures, obstructions, tilts, and other critical or minor issues
Partnerships
o Flock Safety@ is the only LPR provider to officially partner with preparedgl 1 to distribute 91 1 call audio and transcripts to law enforcement agencies o Through FlockOS@, Flock Safety@ is the only LPR provider to officially partner with FirstTwo to enable clicking anywhere on a display map to display the relevant information from FirstTwo
o Access to additional cameras purchased by Flock's HOA and private business partners, means an ever-increasing amount of cameras and data at no additional cost
3284 Northside Parkway NW Suite '150, Atlanta, GA
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City Council Agenda Report
Meeting Date: October 20, 2026
From: Daniel S. Wall, P.E., Director of Public Works-City Engineer Department: Public Works
Submitted by: Daniel S. Wall, P.E., Director of Public Works-City Engineer Subject
Potential Regulation of Data Centers and Cold Storage Warehouse Development Recommendation
Consider the information presented and provide direction to staff on whether and in what manner to adopt regulations governing data center and cold storage warehouse uses in the I Zone.

Background
Since at least 2007, data centers and cold storage warehouses have been permitted uses under Vernon Municipal Code (VMC) Section 17.22.020. “Permitted uses” are land uses allowed as a matter of right within the industrial zone of the City and do not require any separate City Council or discretionary approval. For permitted or by-right uses, the project approval process is ministerial and the City’s review is administrative, designed to ensure that the proposed development adheres to existing general plan and zoning rules and meets existing legal standards for building quality, health, and safety.

There is currently one operating data center in the City of Vernon and several other data center projects at varying stages in the development process. The City Council has recognized that data center projects have generated many questions within the community and directed staff to analyze and provide recommendations regarding changing the use from permitted/by-right to a regulatory framework designed to ensure City Council discretion and public engagement through a transparent process that addresses community and environmental impacts.

City Council also directed staff to analyze changing cold storage warehouse uses from permitted/by-right to a regulatory process with additional oversight in response to community health and safety concerns in the aftermath of the Lineage fire in Boyle Heights.

Staff presented the following information to the Vernon Business and Industry Commission (BIC) at its special meeting on October 1, 2026 for the regulation of Data Centers and Cold Storage Warehouses:

Regulatory Options
In evaluating regulatory options, staff focused on the Conditional Use Permit (CUP) and Development Agreement (DA) processes.

A CUP is a discretionary entitlement that allows a use not permitted by right, subject to specific findings such as consistency with the General Plan, compatibility with surrounding uses, adequate infrastructure, and a determination that the use is not detrimental to public health and safety. If the necessary findings can be made, the CUP generally must be approved. The City may attach conditions reasonably related to mitigating the impacts of the specific use, such as traffic, noise, hours of operation, screening, and odor control. These conditions must be connected to and proportionate to the project's impacts. Any fee associated with a CUP is likewise subject to nexus and proportionality requirements; a generic community benefit fee not linked to a specific impact would be vulnerable to legal challenge. ... ...

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A DA is a contract between the City and a property owner that allows negotiation of financial terms and conditions, such as contributions to community benefits and other broader advantages. Unlike a CUP, these benefits are not strictly linked to the project's direct impacts.

A CUP and a DA serve distinct legal functions, and relying on a DA alone may surrender key regulatory authority preserved by a CUP:
• Contract versus permit: A DA is a bilateral contract authorized under Government Code Section 65864 et seq. Its statutory purpose is to provide developer certainty by vesting the rules in place at approval. Conversely, a CUP is a discretionary land use permit issued under the City’s police power, allowing the City to retain ongoing regulatory oversight rather than being bound strictly by contract terms.
• Legal nexus and financial scope: CUP conditions and fees must satisfy strict legal nexus and proportionality requirements tied directly to project impacts (e.g., traffic, noise, screening). A generic "community benefit fee" imposed through a CUP would be vulnerable to legal challenge. In contrast, a DA allows the City to negotiate broader financial contributions and community benefits that are not strictly limited to direct impact mitigation
• Enforcement mechanism: Violating a CUP condition is a code enforcement issue that the City can resolve administratively, including permit modification or revocation through a public hearing. Violating a DA constitutes a contract breach, requiring court litigation— a process that is slower, costlier, and may not automatically halt ongoing site operations during the dispute.
• Periodic review and unilateral updates: The City can condition a CUP to require periodic operational reviews, giving staff the authority to adjust or strengthen conditions over time. A DA cannot be modified unilaterally by the City; any amendment requires the developer's mutual consent.
• CEQA mitigation enforcement: While both entitlements trigger project-level CEQA review and mitigation requirements, their enforcement tools differ significantly. Mitigation measures imposed via a CUP are enforced administratively, whereas DA mitigation measures must be enforced through court action.

Because a CUP and a DA serve different legal purposes and offer different enforcement tools, the City Council may wish to consider both the certainty a DA offers developers and the ongoing regulatory flexibility a CUP preserves for the City in formulating its recommendation.

Any proposed new regulations would apply to projects and developments not yet permitted or approved as of the effective date of the ordinance. The City cannot unilaterally impose new or additional regulations on existing projects where there are approved permits, a contractual relationship, and substantial investment by the developer, without risking legal action.

Options for consideration include the following:

1. Requiring a CUP for new data center and cold storage warehouse uses in the I Zone. ...
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2. Requiring both a CUP and DA, while providing City Council authority, in its sole discretion, the ability to waive the DA requirement on a case-by-case basis upon specified findings.

3. Requiring a CUP (with or without DA) for new data center uses only. Cold storage warehouses make up an important segment of the City’s business community and economy, and play a critical role in the food supply chain serving an essential function in the region; staff have had limited time to study the potential impacts of additional regulatory requirements for cold storage uses. If the direction is to prioritize data center regulation, staff can focus the ordinance on those changes and come back at a later time with further analysis and recommendations regarding cold storage regulation.

4. Leave the Municipal Code unchanged and continue to seek feedback. Under this approach, data centers and cold storage warehouses would remain permitted/by-right uses unless and until City Council takes further action.

Recommendation from the Business and Industry Commission (BIC) At its special meeting on October 1, 2026, the BIC received a presentation and information regarding options for the regulation of new Data Centers and Cold Storage Warehouses in Vernon. The BIC considered the information presented and recommended that the City Council not make any changes to the regulation of data centers and cold storage warehouses.

Next Steps
Staff requests that the City Council provide direction on changes to the regulation of data centers and cold storage warehouses if any. If City Council directs staff to prepare an ordinance incorporating some or all of the proposed regulations, the ordinance will be duly noticed for a public hearing and considered by City Council for first reading not less than 20 days after the hearing notice is published. If approved, the ordinance and new regulations would take effect 30 days after second reading and adoption by City Council.

Strategic Plan Goals
Goal 3: Advance Sustainability and Environmental Stewardship Fiscal Impact
There is no fiscal impact associated with this report.

Attachments
None.
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City Council Agenda Report
Meeting Date: October 20, 2026
From: Brian Saeki, City Administrator
Department: City Administration
Submitted by: Lilia Hernandez, Deputy City Administrator Subject
Business Tax Contribution Study
Recommendation
A. Receive and file a presentation on the findings of the Business Tax Contribution Study; and B. Provide direction to staff regarding desired modifications to the City’s Utility Users Tax, Warehouse Special Parcel Tax, and/or Public Safety Special Parcel Tax, and direct staff to develop applicable tax ballot measures, if any.

Background
The City’s Utility Users Tax (UUT) generates approximately $14.3 million each year, which represents more than 17% of the City’s total revenues, making it the City’s second largest revenue source. The UUT (Measure R) was passed by voters in 2018 and is scheduled to sunset in April 2028. The City’s Warehouse Special Parcel Tax (Warehouse Parcel Tax) generates approximately $16.1 million each year for the construction, improvement and maintenance of streets, bridges and other public rights-of-way, including the acquisition of land and for police and fire protection services. The Warehouse Parcel Tax does not have a sunset. The City’s Public Safety Special Parcel Tax (Safety Parcel Tax) generates approximately $2.5 million each year for City police services and projects, City health services and projects, and for contracted fire protection services and projects. Currently, the Safety Parcel Tax is levied on all parcels of taxable property, excluding square footage that has been apportioned a share of the Warehouse Parcel Tax for the applicable fiscal year. The Safety Parcel Tax is scheduled to sunset in June 2028.

In anticipation of the expiration of the UUT, on October 21, 2025, the City Council received a presentation on the potential of placing a measure on the April 2026 ballot to extend the UUT.

Subsequently, a presentation was also made to the Business and Industry Commission (BIC) and discussed at a Business Breakfast in late 2025. The business community expressed concerns regarding the parity, or lack thereof, in the tax contributions paid by different business sectors within the City, and it was suggested that the City undertake a study to evaluate whether different business types contribute their fair share in taxes for their use of City infrastructure and services.

Tax Contribution Study
The City engaged Kosmont & Associates, Inc. (Kosmont) to conduct a business tax contribution study to determine if tax contributions made by different business types are equitable. Kosmont conducted an analysis of municipal fees and taxes paid by the various types of businesses located in the City including Business License Tax, Warehouse Parcel Tax, Safety Parcel Tax, Sales Tax, UUT, etc., to determine whether adjustments were necessary to ensure parity. The goal for the study was to identify any disparity and determine whether there is a need to restructure the various taxes to balance out the overall tax burden carried by various industries and/or categories of business operations in the City.
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The results of Kosmont’s analysis identified disparities in the tax contributions paid by different business types. The study concluded that the per square footage tax contribution of cold storage and higher value manufacturing facilities (large utility users) was nearly double that of the per square footage tax contributions paid by warehouse and hybrid/lower value manufacturing type businesses. The results further indicated that many high value manufacturers may be facing significant tax burdens unrelated to local City service impacts and that a reduction in UUT for high utility usage businesses may be warranted.

Proposed Modifications
Given the study results, staff developed potential options for restructuring the Warehouse Parcel Tax, Safety Parcel Tax, and UUT to achieve greater parity among different business types. The goal of extending and/or restructuring certain taxes is not to increase tax revenue overall, but rather to maintain approximately the same level of tax revenue while addressing identified disparities in the distribution of tax burden among different business sectors. The study results and Options 1 and 2 for restructuring these taxes were shared with the Vernon Chamber of Commerce and at a Business Breakfast on September 10, 2026. Based on feedback received and further examination by City Staff, Option 3 was subsequently developed for consideration.

The three options for restructuring the UUT, Warehouse Parcel Tax, and Public Safety Tax are as follows:

Option 1
• Reduce UUT by 1% to new rate of 5% - extend it for 10 years; and • Increase Warehouse Parcel Tax by $0.06236 to $0.48929; and • No rate increase to Safety Parcel Tax – extend it for 10 years Option 2
• Reduce UUT by 1% to new rate of 5% - extend it for 10 years; and • Increase Warehouse Parcel Tax by $0.04677 to $0.47370; and • Increase Safety Parcel Tax by $0.01 to $0.05066 – extend it for 10 years Option 3
• Reduce UUT by 1% to new rate of 5% - extend it for 10 years; and Increase Safety Parcel Tax by $0.00834 to $0.04915 and apply it to all parcels – extend it for 10 years
Rate basis: The rates shown are based on FY 2026-27 rates. Under the allowable existing Consumer Price Index (CPI) adjustment provision for the City’s Warehouse Parcel Tax and Safety Parcel Tax, rates will be adjusted for CPI in FY 2027-28. Rates in effect when the proposed measures are implemented in FY 2028-29 may therefore differ from those shown. The UUT is not impacted by CPI adjustments.

In evaluating the benefits and feasibility of each of the proposed options, staff assessed the financial impact of each option on a diverse sample of businesses considering the business use, size, and existing tax contributions. Based on the net impact on all business types, Option 3 is preferred, as it provides a balanced approach resulting in equitable increases for those business types whose tax contributions are set to increase while still providing savings to business types that currently carry a heavier tax burden. Additionally, Option 3 is also more practical, as it would require placing only two tax measures on the ballot instead of three. All three options were presented to the Business and Industry Commission for their feedback. ...
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Item 111888 Page 222 of 666999
Recommendation from the Business and Industry Commission (BIC) Information regarding the Tax Contribution Study findings and options for restructuring the Warehouse Parcel Tax, Safety Parcel Tax, and UUT to achieve greater parity among different business types, was presented to the BIC at its Special Meeting on October 1, 2026. Members of the BIC discussed the options presented, the desire to achieve parity of tax contributions, and the City’s need for General Fund tax revenues. Ultimately, the BIC determined that Option 3 with an amendment to the sunset period for the UUT be recommended to the City Council as the path forward.

The BIC’s recommendation to the City Council is as follows and will be referred to as Option 3B for ease of reference:

Option 3B
• Reduce the UUT by 1% to a new rate of 5%, for a duration of five (5) years; and • Increase the Safety Parcel Tax by $0.00834 to $0.04915 and apply it to all parcels for a duration of ten (10) years.

Analysis
The City’s current general fund budget is $83 million, funding public safety (police, health, and fire), public works, capital improvements, and other essential services. Combined, the UUT and Safety Parcel Tax account for approximately $16.8 million of general fund (GF) revenue and support a wide range of essential services that keep the City functioning effectively. The $14.3 million in UUT revenue is a vital component, accounting for approximately 17% of the GF budget.

If the UUT and Safety Parcel Tax are not extended, the City would face a significant fiscal gap and budget shortfall in Fiscal Year (FY) 2028-29, making it difficult to provide vital services and programs for residents and businesses. The loss of UUT and Safety Parcel Tax revenue would necessitate significant reductions across-the-board for the GF.

City-wide budget reductions would significantly impair the City’s ability to provide essential public safety services and maintain critical infrastructure. Reduced revenues would adversely affect the timeliness and effectiveness of the City’s emergency response capability and health inspections, thereby diminishing the City’s capacity to safeguard public health on many fronts. Current revenue constraints have already resulted in deferred street maintenance, and any further reductions would exacerbate this situation and prove detrimental to overall infrastructure conditions.

The proposed Option 3 to reduce the UUT by 1% to a new rate of 5%; increase the Safety Parcel Tax by $0.00834 to $0.04915 and apply it to all parcels; and extend both the UUT and Safety Parcel Tax for an additional ten (10) years would ensure that the GF has the revenue needed to provide essential services for the public. This option would not increase the overall tax revenue collected by the City, but would more equitably distribute the tax burden among different business sectors. An earlier sunset for the UUT, such as the five (5) years recommended by the BIC, would not allow sufficient time to realize the fiscal impact of large development projects currently underway. Additional time is needed to collect pertinent data and conduct fiscal analysis and projections that take into account data-driven revenue expectations and budgetary needs. The proposed ten (10) year term would not preclude the City from reviewing the UUT rate at any time during that period. Based on updated revenue data and fiscal conditions, the City Council could consider maintaining or reducing the rate, subject to applicable legal requirements. Therefore, staff recommends that the City Council move forward with Option 3 as proposed with a ten (10) year sunset for both the UUT and Safety Parcel Tax. ... ...

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Next steps
The proposed extensions and structural changes to the City’s Safety Parcel Tax and UUT can only be accomplished through a vote of the people. Accordingly, should the City Council desire to place any tax measures on the ballot for the April 2027 General Municipal Election, any applicable resolutions and ordinances would be presented to the City Council at the November 17, 2026 Council Meeting.

Strategic Plan Goals
Goal 2: Promote Economic Growth and Revenue Generation
Fiscal Impact
The UUT has an annual impact of approximately $14.3 million to the General Fund. The Public Safety Tax has an annual impact of approximately $2.5 million to the General Fund. Both taxes are set to sunset in 2028.

Attachments
None.
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Item 111888 Page 444 of 666999
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Item 111888 Page 444 of 666999