Agenda packet — Victorville City Council, July 16, 2024 (part 10 of 11)

1913

LANDSCAPE MANAGEMENT ASSESSMENT DISTRICT

BOND FORMAT
Developer:

Tract: 14132-2 Linear Footage 926 Square Footage 9,454
Streets:

Prepared by: Date:

ITEM DESCRIPTION TOTALS
1 Irrigation Materials ($6.00 s/f) 56,724.00$
2 Plant Materials ($4.25 s/f) 40,179.50$
3 Finish Grading ($0.50 s/f) 4,727.00$
4 Soil Preparation ($1.50 s/f) 14,181.00$
5 Standard S-09 Curbing ($26.25 l/f) 24,307.50$
6 Drains (1 in 100' - 150' @ $400.00 each) 3,704.00$
6 LMAD Block Walls ($50/lf) 1,911 95,550.00$
Subtotal 239,373.00$
20% Plan Preparation fee 47,874.60$
Contingency fee of 10% 28,724.76$
Grand total 315,972.36$
Faithful Performance (100%) 315,972.36$
Labor & Materials (50%) 157,986.18$
Richmond American Homes
Ottawa Street
14-Feb-24Ludwig Engineering Assoc., Inc.

Page 1 ends

1914

LANDSCAPE MANAGEMENT ASSESSMENT DISTRICT

BOND FORMAT
Developer:

Tract: 14132-3 Linear Footage 253 Square Footage 2,780
Streets:

Prepared by: Date:

ITEM DESCRIPTION TOTALS
1 Irrigation Materials ($6.00 s/f) 16,680.00$
2 Plant Materials ($4.25 s/f) 11,815.00$
3 Finish Grading ($0.50 s/f) 1,390.00$
4 Soil Preparation ($1.50 s/f) 4,170.00$
5 Standard S-09 Curbing ($26.25 l/f) 6,641.25$
6 Drains (1 in 100' - 150' @ $400.00 each) 1,012.00$
6 LMAD Block Walls ($50/lf) 517 25,850.00$
Subtotal 67,558.25$
20% Plan Preparation fee 13,511.65$
Contingency fee of 10% 8,106.99$
Grand total 89,176.89$
Faithful Performance (100%) 89,176.89$
Labor & Materials (50%) 44,588.45$
Richmond American Homes
3rd Street
14-Feb-24Ludwig Engineering Assoc., Inc.

Page 1 ends

1915

Attachment C
New Securities
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
Attachment D
E
xisting Subdivision
Improvement Agreements
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
Attachment E
Lien Release for
Subdivision Agreements
1980
Recording Requested by:

The City of Victorville
When Recorded Please Return To:

CITY OF VICTORVILLE
14343 Civic Drive
Victorville, CA 92392
APN Nos. 3090-051-20 thru 69; 3090-061-39 thru 87; 3090-071-41 thru 76; 3090-081-03 thru 70; 3090-061-03 through 38

RELEASE OF LIEN

SUBDIVISION AGREEMENTS FOR
TRACT MAP NOS. 14132-1, 14132-2, and 14132-3
WHEREAS, the City of Victorville, hereinafter called “CITY” entered into three separate Subdivision Agreements with Victory Development Inc., hereinafter called “DEVELOPER”, for the development of Tract Map Nos. 14132-1, 14132-2, and 14132-3, hereinafter collectively called “PROPERTY”; and WHEREAS, said separate Subdivision Agreements imposed duties, obligations, and requirements on the City and DEVELOPER; and
WHEREAS, such three separate Subdivision Agreements were recorded on July 17, 2007 as Document Nos. 2007- 0420378, 2007-0420380, and 2007-0420382 in the office of the County Recorder of the County of San Bernardino; and WHEREAS, the DEVELOPER sold the PROPERTY to Frontier Land Holdings Inc, who then sold the PROPERTY to Richmond American Homes of Maryland Inc., a Maryland Corporation, who has now executed a new Subdivision Improvement Agreement with the CITY per Victorville Municipal Code Section 17.64.050; and WHEREAS, the new Subdivision Improvement Agreement between Richmond American Homes of Maryland Inc., a Maryland Corporation and the CITY was recorded on , 2024 as Document No. in the office of the County Recorder of the County of San Bernardino.

NOW, THEREFORE, in consideration of the change in ownership of the PROPERTY and recordation of the new Subdivision Improvement Agreement with Richmond American Homes of Maryland Inc., a Maryland Corporation as hereinabove stated, the CITY hereby releases DEVELOPER and its heirs, assignees, or successors in interest from any further duty, obligation, or requirement imposed pursuant to the above indicated Document Nos, 2007-0420378, 2007- 0420380, and 2007-0420382 only, and the same are hereby deemed of no further form and effect and shall cease to exist as a lien, duty, obligation, or cloud on the title to the PROPERTY described as follows:

SEE EXHIBIT “A”
I hereby state that the Subdivision Agreements herein identified are being released in accordance with Title 17 of the Victorville Municipal Code due to a change in ownership of the PROPERTY and recordation of a new Subdivision Improvement Agreement with Richmond American Homes of Maryland Inc., a Maryland Corporation. _________________________
Fredy A. Bonilla, City Engineer
R.C.E. 70349
1981

CITY OF VICTORVILLE
By:_____________________________
Elizabeth Becerra, Mayor
ATTEST:
________________________________
City Clerk
APPROVED AS TO FORM:
_________________________________
City Attorney
RISK MANAGEMENT:
_________________________________
Sandra Bostick, Risk Manager
1982

EXHIBIT A

LEGAL DESCRIPTION OF SUBDIVISIONS
Tract 14132-1
Lots 1-80 of Tract 14132-1, in the City of Victorville, County of San Bernardino, State of California, as filed in Map Book No. 329, pages 72 through 78, in the San Bernardino County Recorder’s Office.

Tract 14132-2
Lots 81-168 of Tract 14132-2, in the City of Victorville, County of San Bernardino, State of California, as filed in Map Book No. 329, pages 79 through 85, in the San Bernardino County Recorder’s Office.

Tract 14132-3
Lots 169-238 of Tract 14132-3, in the City of Victorville, County of San Bernardino, State of California, as filed in Map Book No. 329, pages 86 through 92, in the San Bernardino County Recorder’s Office. 1983
Attachment F
Existing Lien Agreements
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Attachment G
Lien Agreement Releases
2041
Recording Requested by:

The City of Victorville
When Recorded Please Return To:

CITY OF VICTORVILLE
14343 Civic Drive
Victorville, CA 92392
APN Nos. 3090-051-20 thru 69; 3090-061-39 thru 87; 3090-071-41 thru 76; 3090-081-03 thru 70; 3090-061-03 through 38 Recording of this document is fee exempt under
Government Code Section 6103.

No Documentary Transfer Tax is due on the document pursuant to Revenue Taxation Code Section 11922

RELEASE OF LIENS
Lien Agreements for Tract Map Nos. 14132-1, 14132-2, and 14132-3 WHEREAS, the City of Victorville, hereinafter called “CITY” entered into three separate Lien Agreements with Victory Development, Inc., hereinafter called “DEVELOPER”, for the security of Tract Map Nos. 14132-1, 14132-2, and 14132-3, hereinafter collectively called “PROPERTY”; and
WHEREAS, said separate Lien Agreements imposed duties, obligations, and requirements on the City and DEVELOPER; and WHEREAS, such three separate Lien Agreements were recorded on March 11, 2011 as Document Nos. 2011-0102681, 2011- 0102682, and 2011-0102683 in the office of the County Recorder of the County of San Bernardino hereinafter (“County Recorder’s Office”); and
WHEREAS, as evidenced by that certain Grant Deed recorded on ___________________________ as Document No. ______________________ in the County Recorder’s Office, DEVELOPER subsequently sold the PROPERTY to Richmond American Homes of Maryland Inc., a Maryland Corporation, hereinafter “Richmond American”, who has now executed a new Subdivision Improvement Agreement and posted substitute securities for all three Tract Maps pursuant to Victorville Municipal Code sections 17.64.060 and 17.64.065(k); and
WHEREAS, the Subdivision Improvement Agreement between Richmond American and CITY was recorded on _________day of _______________, _______ as Document No. ___________________________ in the County Recorder’s Office; and
NOW, THEREFORE, in consideration that the PROPERTY having substitute securities and a new Subdivision Improvement Agreement, the CITY hereby releases DEVELOPER from any further duty, obligation, or requirement imposed pursuant to Document Nos. 2011-0102681, 2011-0102682, and 0102683 only, and the same are hereby deemed of no further form and effect and shall cease to exist as a lien, duty obligation, or cloud on the title to the following described PROPERTY:

See Exhibit “A”
I hereby state that all performances, obligations, and requirements required by the Lien Agreements, herein identified, per Title 17 of the Victorville Municipal Code required for Tract Map Nos. 14132-1, 14132-2, and 14132-3 have been complied with on the hereinabove described PROPERTY.
_________________________
Fredy A. Bonilla, City Engineer
R.C.E. 70349
2042

CITY OF VICTORVILLE
By: _____________________________
Elizabeth Becerra, Mayor
ATTEST:
________________________________
Jennifer Thompson, City Clerk
APPROVED AS TO FORM:
_________________________________
City Attorney
RISK MANAGEMENT:
_________________________________
Sandra Bostick, Risk Manager
2043
EXHIBIT “A”
Tract 14132-1
Lots 1-80 of Tract 14132-1, in the City of Victorville, County of San Bernardino, State of California, as filed in Map Book No. 329, pages 72 through 78, in the San Bernardino County Recorder’s Office.

Attachment H
Existing Utility Surety
Agreements
2045
2046
2047
2048
2049
2050
2051
Attachment I
Lien Release for
Utility Surety Agreements
2052
Recording Requested by:

The City of Victorville
When Recorded Please Return To:

No Documentary Transfer Tax is due on the document pursuant to Revenue Taxation Code Section 11922

RELEASE OF LIEN

UTILITY SURETY AGREEMENTS FOR
TRACT MAP NOS. 14132-1, 14132-2, and 14132-3
WHEREAS, the City of Victorville, hereinafter called “CITY” entered into three separate Utility Surety Agreements with Victory Development Inc., hereinafter called “DEVELOPER”, pursuant to the provisions of the Subdivision Map Act of the State of California, for the development of Tract Map Nos. 14132-1, 14132-2, and 14132-3, collectively hereinafter called “PROPERTY”; and
WHEREAS, said separate Utility Surety Agreements imposed duties, obligations, and requirements on the City and DEVELOPER; and
WHEREAS, such three separate Utility Surety Agreements were recorded on July 17, 2007 as Document Nos. 2007- 0420379, 2007-0420381, and 2007-0420383 in the office of the County Recorder of the County of San Bernardino; and WHEREAS, the DEVELOPER sold the PROPERTY to Frontier Land Holdings Inc, who then sold the PROPERTY to Richmond American Homes of Maryland Inc., a Maryland Corporation, who has now executed a new Subdivision Improvement Agreement with the CITY and posted surety bonds per Victorville Municipal Code Sections 17.64.050 and 060; and
WHEREAS, the new Subdivision Improvement Agreement between Richmond American Homes of Maryland Inc., a Maryland Corporation and the CITY was recorded on , 2024 as Document No. in the office of the County Recorder of the County of San Bernardino.

NOW, THEREFORE, in consideration of the change in ownership of the PROPERTY, the posting of new securities, and recordation of the new Subdivision Improvement Agreement with Richmond American Homes of Maryland Inc., a Maryland Corporation as hereinabove stated, the CITY hereby releases DEVELOPER and its heirs, assignees, or successors in interest from any further duty, obligation, or requirement imposed pursuant to the above indicated Document Nos. 2007-0420379, 2007-0420381, and 2007-0420383 only, and the same are hereby deemed of no further form and effect and shall cease to exist as a lien, duty, obligation, or cloud on the title to the PROPERTY described as follows:

SEE EXHIBIT “A”
I hereby state that the Utility Surety Agreements herein identified are being released in accordance with Title 17 of the Victorville Municipal Code due to a change in ownership of the PROPERTY, the posting of new securities, and recordation of a new Subdivision Improvement Agreement with Richmond American Homes of Maryland Inc., a Maryland Corporation. _________________________
Fredy A. Bonilla, City Engineer
R.C.E. 70349
2053

CITY OF VICTORVILLE
By: _____________________________
Elizabeth Becerra, Mayor
ATTEST:
________________________________
Jennifer Thompson, City Clerk
APPROVED AS TO FORM:
_________________________________
City Attorney
RISK MANAGEMENT:
_________________________________
Sandra Bostick, Risk Manager
2054
EXHIBIT “A”
Tract 14132-1
Lots 1-80 of Tract 14132-1, in the City of Victorville, County of San Bernardino, State of California, as filed in Map Book No. 329, pages 72 through 78, in the San Bernardino County Recorder’s Office.

THIS PAGE LEFT

BLANK

INTENTIONALLY
2056
Item Number: 15
City Council / Board of Directors
Consent Calendar
Meeting of: July 16, 2024
Submitted By:

Alex Jauregui, City Planner

Subject:

Wellness Center Quarterly Report
Recommendation:

That the Honorable City Council review and file the attached Wellness Center Quarterly Report.

Fiscal Impact:

There is no fiscal impact associated with this item.

Strategic Plan Goal:

This item aligns with Strategic Plan Goal D, Reducing Homelessness. The City has completed construction of the Wellness Center Campus and began serving clients on December 12, 2023. The Planning Department's Homelessness Solutions staff monitors the Wellness Centers operations, ensuring successful outcomes in all areas including shelter operations, recuperative care, supportive services, medical care, outreach coordination, and wraparound supportive services.

Background:

On February 6, 2024, the Honorable City Council requested to have quarterly reports regarding the progress of the Wellness Center.

Discussion:

As part of our ongoing efforts to achieve the strategies outlined in the adopted Strategic Plan for Reducing Homelessness, this is the second Quarterly Report (Attachment A) that will summarize the operational progress made at the Wellness Center. Staff will continue providing this reporting on a quarterly basis to present key Wellness Center activities, highlights, and operational performance indicators. Staff remains available for any questions you may have.

Attachments: A. Wellness Center Quarterly Report
2057

ATTACHMENT A
Wellness Center Quarterly Report
2058

QUARTERLYQUARTERLY

REPORTREPORT
The Wellness Center
Homelessness Solutions
Planning Department
APRIL- JUNE 2024
2059
We are pleased to report the Wellness Center will begin accepting families on July 8, 2024. We are also working on the development of our campus community garden. This
quarter has seen an increase in programming and services, occupancy, and clients being transitioned into more
permanent housing solutions. Our Shelter Operator (Hope the Mission) and Wraparound Services Operator (Symba
Center) continue to work collaboratively to meet the needs of our homeless population.

Our innovative campus continues to be visited by our
neighboring cities, county partners, and state legislatures as a model that should be emulated in other areas. We were proud to highlight the Wellness Center during the Victorville 101 Bus Tours. These public bus tours give insight to
community members about various City operations and
services. The public that participated in the tours provided positive feedback about the facility, the staff, and the successes of the Wellness Center.

O V E R V I E W
Our Wellness journey continues. As we transition from
Spring to Summer, we endeavor to assist more of our City’s unsheltered population. This quarter, we admitted 114
individuals and provided them with a safe space to stabilize and work towards their wellness goals.

In May, the annual Point-In-Time Count (PITC) was released, indicating 326 unsheltered individuals and a grand total of 611 individuals experiencing homelessness in Victorville.

Specific to Victorville, 43% were experiencing homelessness for the first time in the last 12 months and 19% were
recently incarcerated.

Together with our partners, the Wellness Center has
transitioned a total of 34 individuals into permanent
housing solutions since operations began, with 22 clients housed in the last quarter. We have also triaged many
cases and referred them to more appropriate levels of care.

PAGE 2
2060
All Wellness Center staff are thoroughly trained and developed to assist all clients at the Wellness Center. Training includes CPR/First Aid, Trauma-Informed Care, De-Escalation Techniques, Behavior Management, Mandated Reporting, Mental Health 101, Data Input, and much more.

This quarter, all staff had the privilege of being trained about Narcan, including its importance and the administration of Narcan, from our County Department of Public Health. We ensure all staff have access to Narcan at all times while on campus. This is another important tool that helps keep our campus safe.

Training

S T A F F

T R A I N I N G
PAGE 3
2061
Activities
Seeking Safety
Program Highlight
Job readiness
PAGE 4

W E L L N E S S C E N T E R

P R O G R A M S A N D

A C T I V I T I E S
Anger Management
Relapse Prevention
Recovery Management
Financial Literacy
Women’s Support Group
Men’s Support Group
Outside of programming, the clients
are afforded opportunities to
participate in activities that provide a
sense of community and pride on
campus.

Programs
Medical Services
Housing Navigation
Seeking Safety
Art Expression
Mindfulness and Meditation
Case Management
Therapy and Counseling
Seeking safety is a program that
teaches coping skills and helps
individuals to learn how to ground in
the moment and re-center. Seeking
safety teaches 25 coping skills that
includes boundary setting, honesty,
compassion, healing from anger, and
recovery. Seeking safety will help
individuals build great self-care habits.

Seeking safety allows individuals to
engage in rebuilding their lives
moving forward.

Through collaborative efforts, Symba
Center and Hope the Mission continue
to work together to offer the
necessary support to assist clients in
their housing journey. This support is
afforded through direct services,
activities, and programming.
2062
April May June
0 2
4 6
8 10
12 April May June
0 10
20 30
40 50

W E L L N E S S C E N T E R

I N T A K E S A N D H O U S I N G
PAGE 5

I N T A K E S

H O U S I N G

A V E R A G E O C C U P A N C Y
22 Clients Housed
114 Intakes Completed
137
2063
White
34%
Black, African American, or African
28%
Hispanic/Multiracial
24%
Multiracial
11%
Other
3%
Male

62.9%
Female

36.7%
Transgender

0.4%
Other

65.4%
55+

32.5%
TAY (18-24)

2.1%
PAGE 6
Race Data
Age RangeGender Data

W E L L N E S S C E N T E R

D E M O G R A P H I C S
2064

W E L L N E S S C E N T E R

H I G H L I G H T S
91-180 Days
35%
30 days or less Days

29.6%
31-90 Days

21.7%
181 or more Days

13.8%
PAGE 7
The Wellness Center has
partnered with the Victor
Valley Transit Authority
(VVTA) to provide over 375
free bus rides for Wellness
Center clients.
%40 Mental Health
47 % Chronically Homeless
%28 Substance Use Disorders

LENGTH OF
STAY
5,603 2,745 40 30 12
Medical Appointments
and Services
Average Recuperative Care
Beds In Use
SUD Groups Job Readiness
Classes
Housing and Case
Management Appointments
2065
Yolanda Salinas
Tammie Trejo

W E L L N E S S C E N T E R

S T A F F H I G H L I G H T S
Yolanda is being highlighted as an outstanding
Wellness Center Case Manager with Symba Center
for various reasons. She has journeyed with our
clients during transitional phases of sites and
services. She continues to provide routine structure,
support, and intensive case management services
for clients at the Wellness Center to create
sustainable housing solutions. She continues to
model focus, accountability and drive for our
community through solution-focused contributions
and consistency. Yolanda is mission driven in
obtaining successful results for clients.

PAGE 8
This quarter we would like to highlight our Wellness
Center Data Specialist with Hope the Mission.

Tammie is responsible for analyzing, assessing,
interpreting, and reporting out on vital data for our
Wellness Center. Tammie gives great attention to
detail and has the ability to communicate complex
findings in a clear and concise manner. Tammie
exceeds expectations and goes above and beyond
assisting Wellness Center operations. Her grace,
hard work, and dedication to our Wellness team and
the clients is commendable.
2066

C L I E N T

S U C C E S S
Goals
Collaborating with our Sheriff’s MET team,
Deputy Garnica and Wellness Center staff
worked to transition a client experiencing
homelessness into the Wellness Center as
the team coordinated transportation
back to her community of origin. This
swift action reunified the client with
family and helped avoid unnecessary
time unsheltered.

Dedication
Such a beautiful moment! Member M.W.
not only celebrated four months of
sobriety this quarter, but she also secured
Permanent Supportive Housing with Step
Up on Second.

The Wellness Center Team provided M.W.
a welcome home kit, hygiene items,
cleaning supplies, and a television to
celebrate this monumental occasion.

Her story is a testament to the work we all
do. Every success is one more step closer
to ending homelessness.

PAGE 9
Dreams Hard Work
2067

C L I E N T

S P O T L I G H T
After accepting services at our Interim
Shelter and ultimately at our Wellness
Center, we had the pleasure of
celebrating his transition into a
permanent housing solution this past
April. His journey from chronic
homelessness is nothing short of
remarkable and serves as a beacon of
hope for others facing similar challenges.

This should remind us all of the power of
perseverance and highlight the
incredible Wellness Center staff and
services which helped make it all
possible.

PAGE 10
The staff celebrates all individuals that
were housed or assisted with the support
of Wellness Center services. Some of these
individuals would still be unsheltered in
our City if it was not for the Wellness
Center Campus. One story, in particular, is
a 54-year-old man who has faced more
than his fair share of challenges. From
enduring traumatic brain injuries to
navigating multiple fractures, this
individual’s journey is a testament to his
resilience. Our Homeless Engagement
Team worked tirelessly to get this
individual to accept services.

From chronic homelessness to a permanent housing
solution: One Remarkable Man’s Journey of Resilience with the help of a team.
2068
Symba Center provides medical services onsite at the Wellness Center 24 hours a day, 7 days a week. Medical staff provide many services, but their work is shown through those who they have the privilege of serving. Below is a patient testimonial that sheds light on the important work Symba Medical is doing for our most vulnerable population.

One of our Wellness Center patients, who has been at the shelter since March, was kind enough to share her experience about the medical services. She initially came in with uncontrolled hypertension and anxiety. As a new intake, she had extremely high blood pressure. There were times where the medical team had to provide strict, ongoing monitoring while her blood pressure stabilized. Since her admission, there has been a substantial improvement in her overall health. Her blood pressure and anxiety are now controlled and she continues to have the support from the medical team. She is thankful for the care provided by Symba Center.

Our wonderful Wellness Center medical staff make healthier living possible.

A Brief Summary and Testimonial About The Medical Team
PAGE 11

W E L L N E S S C E N T E R

M E D I C A L S E R V I C E S
2069

W E L L N E S S C E N T E R A W A R D S

O U R W E L L N E S S C E N T E R H A S B E E N
H O N O R E D W I T H T H E F O L L O W I N G A W A R D S :

PAGE 12

A M E R I C A N P L A N N I N G

A S S O C I A T I O N , I N L A N D

E M P I R E, O P P O R T U N I T Y

A N D E M P O W E R M E N T

A W A R D

A M E R I C A N P L A N N I N G

A S S O C I A T I O N , S T A T E

O F C A L I F O R N I A,

O P P O R T U N I T Y A N D

E M P O W E R M E N T

A W A R D O F M E R I T

A R C H I T E C T U R E &

D E S I G N C O M M U N I T Y

P L A T I N U M W I N N E R F O R

M O B I L E H O M E S &

P R E F A B R I C A T E D

S T R U C T U R E S

A R C H I T E C T U R E &

D E S I G N C O M M U N I T Y

P L A T I N U M W I N N E R

F O R S P O R T S ,

R E C R E A T I O N , A N D

W E L L N E S S F A C I L I T I E S
2070
Item Number: 16
City Council / Board of Directors
Consent Calendar
Meeting of: July 16, 2024
Submitted By:

Robert Clemmer, Fire Chief

Subject:

Fire Department Newsletter
Recommendation:

No action is necessary – informational only
Fiscal Impact:

There is no fiscal impact associated with this item.

Strategic Plan Goal:

This item aligns with Strategic Plan Goal F, "Communication and Outreach - Build strong connections with community partners, residents, and employees". We hope to provide more insight to our community of what our Fire Department accomplishes in a monthly basis by presenting this newsletter.

Background:

Staff has compiled the attached Fire Department Newsletter for the month of May 2024.

Discussion:

The attached Fire Department Newsletter includes call response statistics, Fire Prevention updates, department activity updates and various helpful information from the department.

Attachments: A. Fire Department Newsletter
2071
Atachment A
Fire Department Newsleter
2072
2073
2074
2075
2076
2077
2078
2079
2080
2081
2082
2083

THIS PAGE LEFT

BLANK

INTENTIONALLY
2084
Item Number: 17
City Council / Board of Directors
Consent Calendar
Meeting of: July 16, 2024
Submitted By:

Carmen Cun, Finance Director / City Treasurer

Subject:

Receive and file of the annual Single Audit on Federal Expenditures report for Year Ended June 30, 2023
Recommendation:

That the City Council receive and file the Fiscal Year 2022-2023 Single Audit.

Fiscal Impact:

There is no fiscal impact from this receive and file item.

Strategic Plan Goal:

Annual single audit and reporting is part of Goal A: Financial Sustainability as this report acts as a tool for management to monitor Federal program activities.

Background:

The Single Audit Act of 1984 establishes uniform audit requirements for local governments expending federal awards greater than $750,000 a year. The audit is on an entity wide basis and imposes additional requirements in relation to testing of and reporting on, internal control and compliance with laws and regulations. These rules are listed in Title 2 US Code of Federal Regulations (CFR) Part 200.

The purpose of the single audit is to test the City’s internal controls and compliance and to report any findings to those charged with governance. Further, the single audit is used to provide assurance to the federal agencies granting the funds that the use of the funds is in compliance with the program’s requirements and Uniform Guidance. The City in turn, initiates a corrective action plan to correct identified deficiencies and produce recommended improvements. Thus, the audit results turn into opportunities to strengthen our internal controls and operate efficiently, and eventually, they become best practices in our business processes.
2085
3 6
9 2
Discussion:

The City's independent auditors, CliftonLarsonAllen LLP (CLA), have completed their annual audit of the City's fiscal activities for the fiscal year ended June 30, 2023. The auditing firm of CliftonLarsonAllen LLP (CLA) audited three major programs per the 2 CFR 200 requirements. This included major Coronavirus Relief Funds including American Rescue Plan Act (ARPA) and CDBG-CV funding sources. The deadline to submit the Single Audit for fiscal year ending June 30, 2023, was March 31, 2024. There was a delay in filing due to the unforeseen cyber incident, which delayed the testing of the Federal program activities. The expenditures for this period along with the results of the audit are reflected in this report which was filed with the Federal Audit Clearinghouse on June 27, 2024, and sent to all federal agencies granting funding to the City of Victorville.

Audit findings 2023-001 through 2023-006 were submitted to the City Council at the June 18, 2024, meeting on item 19 titled “Annual Financial Reports for the Fiscal Year Ended June 30, 2023”. These findings were previously discussed during the receipt and filing of the annual comprehensive audited financial statements and the SCLAA and VWD annual audit reports and provided to the City Council. Auditing standards require that these findings be repeated in the Single Audit as part of the City’s Corrective Action Plan.

Finding 2023-006 deals specifically with the financial reporting and preparation of the Schedule of Expenditures of Federal Awards (SEFA). Staff has outlined a corrective action for this item. The corrective action is delineated below in Attachment B labeled “Corrective Action Plan”.
2023-006 - Material Weakness in internal Control over Financial Reporting - Preparation of the Schedule of Expenditures of Federal Awards (SEFA) During our testing of the Schedule of Expenditures of Federal Awards (SEFA), we noted that the following federal expenditures should have been included in the fiscal year 2021- 2022 SEFA but were excluded: $6,355,730 under Assistance Listing Number 21.027, Coronavirus State and Local Fiscal Recovery Funds, and $199,999 under 14.231, Emergency Solutions Grant Program. These amounts were instead included in the fiscal year 2022-2023 SEFA even though the federal expenditures were incurred in fiscal year 2021-2022.

Staff remains available for any questions the Council may have.

Attachments: A. Single Audit of Federally Assisted Grant Programs Year Ended June 30, 2023
B. Corrective Action Plan
2086

ATTACHMENT A

SINGLE AUDIT OF FEDERALLY ASSISTED GRANT
PROGRAMS YEAR ENDED JUNE 30, 2023
2087
CI

TY OF VICTORVILLE

VICTORVILLE, CALIFORNIA

SINGLE AUDIT OF FEDERALLY ASSISTED

GRANT PROGRAMS
YEAR ENDED JUNE 30, 2023

CITY OF VICTORVILLE

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 1
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR

FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER

COMPLIANCE, AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE 3
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 8
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 9
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 21

2089
(1)
I
NDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of City Council
City of Victorville
Victorville, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Victorville (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City of Victorville’s basic financial statements, and have issued our report thereon dated June 10, 2024.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and responses as items 2023-001 through 2023-006, that we consider to be material weaknesses.

CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.

CliftonLarsonAllen LLP
CLAconnect.com
2090
Honorable Mayor and Members of City Council
City of Victorville
(2)
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Victorville’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

City’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying schedule of findings and responses. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

CliftonLarsonAllen LLP
Irvine, California
June 10, 2024
2091
(3)
I
NDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR

FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND

REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

REQUIRED BY THE UNIFORM GUIDANCE
Honorable Mayor and Members of City Council
City of Victorville
Victorville, California
Report on Compliance for Each Major Federal Program
We have audited the City of Victorville’s (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s federal programs.

CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.

CliftonLarsonAllen LLP
CLAconnect.com
2092
Honorable Mayor and Members of City Council
City of Victorville
(4)
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City ’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
 Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
2093
Honorable Mayor and Members of City Council
City of Victorville
(5)
Report on Internal Control Over Compliance
Our consideration of internal control over compliance was for the limited purpose described in the Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We have issued our report thereon, dated June 10, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, except for the effect on the schedule of expenditures of federal awards of including $6,355,729 and $199,999 of fiscal year 2021-2022 federal expenditures for assistance listing numbers 21.027 and 14.231, respectively, in the fiscal year 2022-2023, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

CliftonLarsonAllen LLP
Irvine, California
June 24, 2024
2094

CITY OF VICTORVILLE

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
JUNE 30, 2023
(6)
Federal Pass-Through
Assistance Entity Passed-
Federal Grantor / Pass-Through Grantor / Listing Identifying Federal Through to Program / Cluster Title / Project Number Number Expenditures Subrecipients United States Department of Housing and Urban Development Direct Assistance:

CDBG Entitlement Grants Cluster:

Community Development Block Grants 14.218 n/a 1,267,266$ 189,824$ (CDBG)
COVID-19 CDBG 14.218 n/a 305,328 -
Total CDBG Entitlement Grants Cluster 1,572,594 189,824 Passed-through the County of San Bernardino:

COVID-19 Emergency Solutions
Grant Program 14.231 n/a 199,999 (1) -
Passed-through the Town of Apple Valley:

HOME Investment Partnerships Program 14.239 n/a 440,789 - Total United States Department of Housing and Urban Development 2,213,382 189,824 United States Department of Justice
Passed-through the County of San Bernardino:

Edward Byrne Memorial Justice Assistance
Grant Program 16.738 2018-DJ-BX-0650 42,109
Edward Byrne Memorial Justice Assistance
Grant Program 16.738 2017-DJ-BX-0991 41,343
Total United States Department of Justice 83,452 -
United States Department of Transportation
Direct Assistance:

Airport Improvement Program 20.106 n/a 447,583 -
Passed-through California Department
of Transportation:

Highway Planning and Construction Cluster:

DEMO5UBL-
Highway Planning and Construction 20.205 5380(028) 8,870,752 - Highway Planning and Construction 20.205 BHLS-5380(026) 5,013,629 - Highway Planning and Construction 20.205 HSIPL-5380(038) 658,769 - Total Highway Planning and Construction Cluster 14,543,150 - Total United States Department of Transportation 14,990,733 - 2095

CITY OF VICTORVILLE

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
JUNE 30, 2023
(7)
Federal Pass-Through
Assistance Entity Passed-
Federal Grantor / Pass-Through Grantor / Listing Identifying Federal Through to Program / Cluster Title / Project Number Number Expenditures Subrecipients United States Department of Treasury
Direct Assistance:

COVID-19 Coronavirus State and Local
Fiscal Recovery Funds 21.027 n/a 11,900,143 -
Passed through the State of California
Department of General Services:

COVID-19 Coronavirus State and Local
Fiscal Recovery Funds 21.027 21-HK-16925 17,148,383 -
COVID-19 Coronavirus State and Local
Fiscal Recovery Funds 21.027 21-HK-16925 6,355,729 (1) - Total United States Department of Treasury 35,404,255 - The Institute of Museum and Library Services
Passed-through the State Libraria:

Grants to States 45.310 40-9372 4,999 -
Total The Institute of Museum and Library Services 4,999 - United States Department of Homeland Security
Passed-through the County of San Bernardino:

Assistance to Firefighters Grant 97.044 EMW-FG-15531 241,420 - Total United States Department of Homeland Security 241,420 - 52,938,241$ 189,824$
(1) These federal expenditures are for the fiscal year July 1, 2021 to June 30, 2022.

TOTAL EXPENDITURES OF FEDERAL AWARDS
2096

CITY OF VICTORVILLE

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
JUNE 30, 2023
(8)
NOTE 1 BASIS OF PRESENTATION
The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the City of Victorville (the City) under programs of the federal government as well as federal financial assistance passed through other government agencies for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200 , Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

The exception to the above paragraph are expenditures from fiscal year July 1, 2021 to June 30, 2022 for ALN 21.027 and 14.231 in the amount of $6,355,729 and $199,199, respectively, that are included in the SEFA for July 1, 2022 to June 30, 2023. These expenditures were excluded from the prior year SEFA and have been included by the City in the current year SEFA.

Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial statements of the City. The City’s reporting entity is defined in Note 1 of the notes to the City’s financial statements.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting for governmental funds and the accrual basis for proprietary funds, which is described in Note 1 of the notes to the City’s financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards with the exception of Assistance Listing 21.019 and 21.027, which follows criteria determined by the Department of Treasury for allowability of costs. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement.

NOTE 3 INDIRECT COST RATE
The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
2097

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023
(9)
Section I – Summary of Auditors’ Results
Financial Statements

1. Type of auditors’ report issued: Unmodified

2. Internal control over financial reporting:
 Material weaknesses identified? x yes no
 Significant deficiencies identified? yes x none reported

3. Noncompliance material to financial
statements noted? yes x no
Federal Awards

1. Internal control over major federal programs:
 Material weakness(es) identified? yes x no
 Significant deficiency(ies) identified? yes x none reported

2. Type of auditors’ report issued on
compliance for major federal programs: Unmodified

3. Any audit findings disclosed that are
required to be reported in accordance
with 2 CFR 200.516(a)? yes x no
Identification of Major Federal Programs
Assistance Listing Numbers Name of Federal Program or Cluster

14.218 Community Development Block Grants Cluster

14.239 HOME Investment Partnerships Program

21.027 COVID-19 Coronavirus State and Local Fiscal
Recovery Funds
Dollar threshold used to distinguish between
Type A and Type B programs: $ 750,000
Auditee qualified as low-risk auditee? yes x no
2098

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(10)

Section II – Financial Statement Findings

2023-001

 Material Weakness in Internal Control over Financial Reporting – Capital Assets

Condition: During our review of capital assets, we noted that some detail schedules did not agree to the capital asset rollforward, which also did not agree to the general ledger balances. The discrepancies were material and required us to request the City to re-perform the capital asset year-end close process with an emphasis on a review and approval process over the employee performing the work.

In addition, during our review of capital assets, we noted an asset that was sold from the Southern California Logistics Airport Authority (SCLA) to the Water District that was capitalized at the price paid instead of the book value.

Also, the Victorville Water District enterprise fund expensed $4.985 million of capital project expenses that should have been capitalized as construction in progress.

Criteria or Specific Requirement: An important part of the reporting function is maintaining accurate and current detail schedules for account balances. In addition, general ledger amounts should be updated to reflect the current year balances for accurate financial reports. Year-end close processes should include a review and approval aspect where material differences and errors are identified and corrected prior to providing such information for the audit.

Assets sold within the City funds must be capitalized at the asset’s book value as recorded in the fund from which it is sold.

Expenses that meet the City’s capitalization policy should be capitalized in the year incurred.

Effect: The adjustments made after the City re-performed the year-end close had the following impact:

Business-type activities had a decrease in construction in progress of $105 thousand, increase in buildings and improvements of $7 thousand, increase in accumulated depreciation of $359 thousand, increase in depreciation expense of $352 thousand, and increase in expenses of $105 thousand.

Specifically, Victorville Water District had a decrease in construction in progress of $105 thousand, increase in buildings and improvements of $7 thousand, increase in accumulated depreciation of $25 thousand, increase in depreciation expense of $18 thousand, and increase in expenses of $105 thousand.

Specifically, Southern California Logistics Airport Authority had an increase in accumulated depreciation and depreciation expense of $857 thousand.

2099

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(11)

Section II – Financial Statement Findings

2023-001 (Continued)

The governmental activities had a decrease in construction in progress of $8.6 million, increase in depreciation expense and accumulated depreciation of $400 thousand, and increases in capital asset categories of buildings and improvements, computers and communications, furniture and equipment, infrastructure, and land of $50 thousand, $2.5 million, $911 thousand, $3.5 million, and $70 thousand, respectively.

The Water District’s capital assets were reduced, and expenses increased by $692,124, which is the excess paid by the Water District to SCLA above the book value of the asset previously recorded in the SLCA.

The Water District’s expenses were reduced and construction in progress capital asset category increased by $4.985 million.

Cause: The City did not sufficiently follow the year-end closing procedures to identify the above errors.

The City was not aware that accounting standards require intra-entity sales to be capitalized at the book value recorded in the previous fund.

The City did not appropriately identify all capital expenses when performing year-end close for capital assets in the Water District

Repeat Finding: This particular finding was not noted in the immediately prior year; however, findings related to audit adjustments for capital assets were noted in the immediately prior year.

Recommendation: We recommend the City implement policies and procedures to review capital assets at year-end for appropriate classification and ensure the work is reviewed in detail and approved by management who did not perform the work.

In addition, we recommend the City implement policies and procedures to review intra-entity asset sales to ensure the amounts are capitalized at book value.

Also, we recommend that the City implement policies and procedures to ensure the completeness of capital asset additions.

2100

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(12)
Section II – Financial Statement Findings
2023-001 (Continued)
Views of Responsible Officials and Planned Corrective Actions:
(1) City personnel reconciling capital assets will be coordinating with departments at a minimum twice a year as well as reviewing budget to actual for projects and notices of completion in city council agenda items to catch all completed projects. Additionally, staff will question departments regarding all projects residing in the Construction in Progress coding with no activity for at least four months to ensure that project is still continuing forward or if it needs to move to “Idle Assets” to be completed in the future or expensed if project has been discontinued and/or did not result in an asset.
(2) City personnel will be reviewing and updating as needed City Policy E-6: Fixed Asset Policy to ensure that proper capitalization and safeguarding of all assets are performed in a timely manner. The updated policy will help ensure the City is operating in a way that is consistent with current accounting principles. The policy will be reviewed annually and updated as needed.

Additionally, City personnel will conduct trainings for staff that are responsible for tracking, approving, and acquiring assets at the department level. (3) City personnel reconciling capital assets will be attending additional trainings to help ensure they stay appraised of new requirements and / or are well equipped to handle non re-occurring transactions such as assets sold within City funds. Additional training on the City’s ERP system will also be performed to ensure staff is aware of the any new upgrades that can impact the methodology of how the system depreciates assets.
2101

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(13)

Section II – Financial Statement Findings

2023-002

 Material Weakness in Internal Control over Financial Reporting – Grants Receivable, Expenditures/Expenses and Unavailable Revenue

Condition: The City has various projects that are grant funded on a reimbursement basis, which means that the City incurs the cost and then requests for reimbursement from the funding source.

During our audit, we reviewed these projects and had numerous inquiries when grant receivables did not equal the unreimbursed eligible expenditures. This led to numerous adjustments to correct the balances.

In addition, the City had a restatement to correct the funding source for capital expenditures that reverses a restatement the City recorded in the prior year. The original restatement provided by the City for fiscal year 2022-2023 required an audit adjustment to correct the restatement.

Criteria or Specific Requirement: Grant receivables should be equal to the eligible project expenditures less any amounts previously reimbursed by the grantor. For governmental funds, deferred inflows of resources, unavailable revenues, should be recorded instead of revenue when those amounts are received after the City’s availability period, which is 60 days. In addition, in the cases when revenues must be returned if not utilized, cash received should be offset by unearned revenue.

Grant expenditures should be carefully matched to grant revenues to record amounts in the correct fund originally. Should corrections in subsequent years be required, the history of all journal entries for grant revenues and expenditures should be performed to determine where transactions have been recorded before recording restatements.

Effect: Approximate changes in the general ledger balances due to the adjustments are as follows:
other aggregate governmental funds had a net increase in receivables of $267 thousand, increase in revenue of $340 thousand, and an decrease in deferred inflows of resources, unavailable revenues of $73 thousand; other state and local grants major special revenue fund had a decrease in receivables of $186 thousand, decrease in deferred inflows of resources, unavailable revenues, of $372 thousand and an increase in revenues of $186 thousand; other federal grants major special revenue had a decrease in both receivables and deferred inflows of resources, unavailable revenues of $109 thousand.

The restatement to correct the funding source for capital expenditures was $494 thousand that impacted the measure I special revenue fund (decrease) and the transportation tax special revenue fund (increase). This restatement is appropriately not disclosed in the notes to the financial statements in accordance with generally accepted accounting principles since both funds are included in the other aggregate governmental funds, which nets the restatement to zero for the financial statement presentation of other aggregate governmental funds.

Cause: The City did not perform an analysis on each project to verify the balances in these accounts prior to commencement of the audit procedures. Regarding the restatement, the City did not perform adequate research to identify the impact of all previously recorded journal entries since the funds were originally recorded in 2020.

2102

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(14)

Section II – Financial Statement Findings

2023-002 (Continued)

Repeat Finding: This finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003.

Recommendation: We recommend that the City implement policies and procedures to review all project activity and verify the amounts recorded for grants receivable and deferred inflows of resources, unavailable revenues, are accurate prior to the commencement of the audit. In addition, we recommend that the City implement policies and procedures to ensure all grant revenues and expenditures are recorded in the appropriate fund that contains the funding source at the time the original receipt occurs.

Should corrections be required in subsequent years, we recommend that the City perform an analysis that will show all activity of the grant before recording restatements.

Views of Responsible Officials and Planned Corrective Actions:
(1) City personnel will be reviewing and updating as needed City Policy E-8: Grant Management Policy and Procedures and City Policy E-7: Infrastructure Policy to ensure that proper verification and recording of all activity is completed in the period it was incurred.

(2) The City has procedures set up to review and ensure that each project and org is reconciled at the end of the year. Unfortunately, due to the large amount of grants, there were some that had activity posted to them after personnel had reconciled and these did not get reviewed again prior to audit. Staff is working on a schedule and posting access to ensure unauthorized or unreviewed entries are not allowed to back date into the prior fiscal year while staff works on reconciliation for audit.

(3) City personnel will be conducting quarterly meetings with departments to ensure that proper grant management at the department level is in place. This will help City personnel identify and correct any issues with amounts recorded and provide any additional assistance to ensure that adequate controls are in place to improve the accountability of funds received.

(4) City personnel will monitor the volume of grants received by the City and will seek a grant monitoring software solution if it is determined to be needed.

2103

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(15)

Section II – Financial Statement Findings

2023-003

 Material Weakness in Internal Control over Financial Reporting – Cash

Condition: The City provided a bank reconciliation as of June 30, 2023 that had an unidentified variance of $27 thousand. In addition, the bank reconciliation contained reconciling items for May 2023 bank activity that were not posted to the general ledger until fiscal year 2023-2024 instead of recorded when the transactions occurred in fiscal year 2022-2023. The bank reconciliation also contained reconciling items for July 2023 bank activity that were recorded as cash activity in June 2023 instead of fiscal year 2023-2024.

Criteria or Specific Requirement: Bank reconciliations should not contain unidentified variances.

Also, cash transactions should be recorded in the correct fiscal year. May 2023 cash activity should be recorded in fiscal year 2022-2023 and July 2023 cash activity should be recorded in fiscal year 2023- 2024.

Effect: The unreconciled variance of $27 thousand required an audit adjustment to increase cash by this amount in order to match the general ledger to the bank reconciliation. Audit adjustments were also required to decrease cash by $193 thousand for May 2023 bank activity and increase cash by $346 thousand to remove July 2023 bank activity.

Cause: The City did not complete the bank reconciliation process by identifying all reconciling items and ensuring transactions were recorded in the appropriate fiscal year.

Repeat Finding: This finding is not a repeat of a finding in the immediately prior year.

Recommendation: We recommend that the City implement policies and procedures to ensure that all reconciling items are identified and recorded in the appropriate fiscal year.

Views of Responsible Officials and Planned Corrective Actions:
(1) City personnel will be establishing a Bank Reconciliation policy to ensure bank reconciliations are completed in a timely manner, have proper internal controls, and workflow approvals in place.

(2) A standard operating procedure will be developed and updated as needed. Management will also implement cross-training to ensure that all items are recorded in a timely manner and help identify roll forward transactions. The policy and standard operating procedure will further help identify accounting and bank errors and further strengthen the City’s ability in preventing and identifying potential for fraud.

2104

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(16)

Section II – Financial Statement Findings

2023-004

 Material Weakness in Internal Control over Financial Reporting – Prepaid Water Connection Fees

Condition: Due to our audit inquiry, the City identified homes or units that were connected to the City’s water system during the fiscal year for which connection fees had been collected in advance. These amounts were not recognized as revenue and remained a liability on the water enterprise fund’s statement of net position.

Criteria or Specific Requirement: The City collects connection fees in advance for large capital projects that will result in connections to the City’s water lines. As the individual homes or units are connected to the City’s system, the amounts collected should be recognized as revenue.

Effect: The liability was decreased, and revenues were increased by approximately $0.2 million.

Cause: The City did not perform the analysis on the connections for the prepaid water connection fees account until after audit inquiry occurred.

Repeat Finding: This finding is not a repeat of a finding in the immediately prior year but is a repeat finding from the fiscal year 2020-2021 audit.

Recommendation: We recommend the City perform the analysis required on this account prior to the commencement of the audit.

Views of Responsible Officials and Planned Corrective Actions:
(1) Due to personnel turnover at the department level, current staff were unfamiliar with the process required to reconcile prepaid water connection fees. The department’s management and staff had to familiarize themselves with how these prepaids are established, how they’re tracked, and subsequently how to reconcile them. As such, a standard operating procedure will be established by the department to document the various prepaid connection fees paid by developers, how to track them in the existing software solution, and institute a re-occurring reconciliation throughout the fiscal year.
(2) Reconciling will be completed at a minimum on a semi-annual basis or more regularly if needed.

2105

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(17)
Section II – Financial Statement Findings
2023-005
 Material Weakness in Internal Control over Financial Reporting – Land Held for Resale Condition: During our review of land held for resale, we noted that the general ledger did not agree to the City’s detail schedule, which provided an analysis of lower of cost or market.

Criteria or Specific Requirement: Land held for resale is required to be recorded at the lower of cost or market value.

Effect: An audit adjustment was required to reduce land held for resale and increase expenditures by approximately $454 thousand.

Cause: The City performed the analysis over land held for resale but did not ensure that the general ledge reflected the required value.

Repeat Finding: This finding is not a repeat of a finding in the immediately prior year.

Recommendation: We recommend that the City develop policies and procedures to ensure that land held for resale is recorded at the lower of cost or market value.

Views of Responsible Officials and Planned Corrective Actions:
(1) As stated in item 2023-001, City personnel will be reviewing and updating as needed City Policy E-6: Fixed Asset Policy to ensure that proper capitalization and safeguarding of all assets are performed in a timely manner. The updated policy will help ensure the City is operating in a way that is consistent with current accounting principles, including the recordation of land held for resale. The policy will be reviewed annually and updated as needed. (2) City personnel recording land held for resale will be attending additional trainings to help ensure they stay appraised of new requirements and / or are well equipped to handle non re-occurring transactions.
2106

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(18)

Section II – Financial Statement Findings

2023-006

 Material Weakness in Internal Control over Financial Reporting – Preparation of the Schedule of Expenditures of Federal Awards (SEFA)

Condition: During our testing of the Schedule of Expenditures of Federal Awards (SEFA), we noted that the following federal expenditures should have been included in the fiscal year 2021-2022 SEFA, but were excluded: $6,355,730 under Assistance Listing Number 21.027, Coronavirus State and Local Fiscal Recovery Funds, and $199,999 under 14.231, Emergency Solutions Grant Program. These amounts were instead included in the fiscal year 2022-2023 SEFA even though the federal expenditures were incurred in fiscal year 2021-2022.

Criteria or Specific Requirement: The SEFA should include all federal expenditures in the appropriate fiscal year, which is the year in which the expenditures were incurred.

Effect: The SEFA was materially misstated for fiscal year 2021-2022 by excluding these amounts and the SEFA is materially misstated for fiscal year 2022-2023 by including these amounts in the incorrect fiscal year.

Cause: The City did not verify that grants provided by non-federal entities did not originate from federal funding when preparing the fiscal year 2021-2022 SEFA.

Repeat Finding: This finding is not a repeat of a finding in the immediately prior year.

Recommendation: We recommend that the City implement policies and procedures to investigate the source of funding for all grants to identify federal expenditures. In addition, to ensure the ease of identification of federal funding in the general ledger, we recommend that the City include the federal program assistance listing number and name in the general ledger account name to ensure the ease of identification of federal funds and the completeness of the SEFA.

Views of Responsible Officials and Planned Corrective Actions:
(1) As this relates to item 2023-002; City personnel will be reviewing and updating as needed City Policy E-8: Grant Management Policy and Procedures and City Policy E-7: Infrastructure Policy to ensure that proper verification and recording of all activity is completed in the period it was incurred.

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(19)
Section II – Financial Statement Findings
2023-006 (Continued)
(3) City personnel will be conducting quarterly meetings with departments to ensure that proper grant management at the department level is in place. This will help City personnel identify and correct any issues with amounts recorded and provide any additional assistance to ensure that adequate controls are in place to improve the accountability of funds received. (4) City personnel will monitor the volume of grants received by the City and will seek a grant monitoring software solution if it is determined to be needed. 2108

CITY OF VICTORVILLE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(20)

Section III – Findings and Questioned Costs – Major Federal Programs

Our audit did not disclose any matters required to be reported in accordance with2 CFR 200.516(a).

2109

(21)

CITY OF

VICTORVILLE
760.955.5000
FAX 760.269.0013
[email protected]
http://victorvilleca.gov
14343 Civic Drive
P.O. Box 5001
Victorville, California 92393-5001

CITY OF VICTORVILLE

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2023

United States Department of Housing and Urban Development United States Department of Treasury

The City of Victorville respectfully submits the following summary schedule of prior audit findings for the year ended June 30, 2023.

The findings from the prior audit’s schedule of findings and questioned costs are discussed below. The finding numbers are numbered consistently with the numbers assigned in the prior year.

FINANCIAL STATEMENT FINDINGS

2022-001

Condition: Amounts recorded in the general ledger for the pension deferred outflows and inflows of resources and pension expense and amounts allocated to governmental activities, business-type activities, and enterprise funds for these amounts did not agree individually or in total to the City’s calculated pension amounts.

Status: Corrected.

2022-002

Condition: During our review of capital assets, we noted (1) construction in progress projects that were complete or had been cancelled and required reclassification to other capital asset categories or expensing; (2) recording missing capital asset additions; (3) removal of a project included in construction in progress for which the goods had not yet been received that required reclassification to prepaid expenditures. In addition, the City had restatements to beginning equity to record capital asset additions to prior years. The capital asset restatements also resulted in a restatement to recognize the SCLAA’s liability due to tenants for rental credits owed from tenant capital improvements made and contributed to SCLAA.

Status: See repeat of comment in current year finding 2023-001.

2110

CITY OF VICTORVILLE

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS (CONTINUED)
YEAR ENDED JUNE 30, 2023

(22)
2022-003

Condition: The City has various projects that are grant funded on a reimbursement basis, which means that the City incurs the cost and then requests for reimbursement from the funding source. During our audit, we reviewed these projects and had numerous inquiries when grant receivables did not equal the unreimbursed eligible expenditures. This led to numerous adjustments to correct the balances.

In addition, the Victorville Water District (District) received federal funds under the American Rescue Plan Act (ARPA) that were utilized for payment of past due utility bills resulting from the pandemic. The City recorded these amounts in a governmental fund instead of the District’s enterprise fund that received the benefit..

Status: See repeat of comment in current year finding 2023-002.

MAJOR FEDERAL PROGRAM FINDINGS

2022-004

Condition: The City has specific CDBG grant personnel that are responsible for reviewing all grant expenditures to ensure they are allowable. However, the designated grant personnel are reviewing the expenditures after the disbursement has been made instead of prior to authorizing the disbursement and charging to the grant. In addition, there is no formal documentation retained to illustrate that all disbursements were reviewed. Internal controls over federal awards should include authorization by appropriate grant personnel prior to such disbursements occurring.

Status: Corrective action has been taken.

2022-005

Condition: From July 2021 through September 2021, personal services charged were recorded for two employees based on budget to the program and an after-the-fact determination of personal services charged to the program was not conducted and adjustments, if necessary, were not recorded. In addition, The City corrected this matter beginning October 2021 and this finding did not apply from October 2021 through June 2022. In addition, in some cases, overtime charges occurred that were not supported by timesheets.

Status: Corrective action has been taken.

2022-006

Condition: After the findings the City received in the prior year audit, the City revised the internal controls over payroll to require a supervisor's review and approval of hours charged to federal awards on the electronic timesheets, which is in line with the requirements of the Uniform Guidance. In 2 out of 12 payroll transactions tested, there was no supervisor approval of hours charged to the federal award, which was a lack of internal controls.

Status: Corrective action has been taken.

2111

CITY OF VICTORVILLE

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(23)
2022-007
Condition: The City is a prime recipient and provided subawards totaling $135,000 to three recipients, each over the $30,000 reporting threshold. Three out of the three FFATA reports were filed for these recipients, but all were filed after the end of the month following the month in which the sub-grant was awarded.

Status: Corrective action has been taken.
2022-008
Condition: The City was not able to provide supporting documentation that the verification of suspension or debarment was performed prior to entering into the contract.

Status: Corrective action has been taken.

If the United States Department of Housing and Urban Development or United States Department of Treasury has questions regarding the schedule, please call Cristian Dominguez, Finance Analyst, at 760-955-5083. 2112

ATTACHMENT B

CORRECTIVE ACTION PLAN
2113
2114
2115
2116
2117
2118
2119
2120
2121

THIS PAGE LEFT

BLANK

INTENTIONALLY
2122
Item Number: 18
City Council / Board of Directors
Written Communications
Meeting of: July 16, 2024
Submitted By:

Sophie L. Smith, Deputy City Manager
Carmen Cun, Finance Director / City Treasurer

Subject:

Council Policy No. CP-24-02 (Pension Liability Management Policy) Recommendation:

That the Honorable City Council adopt Council Policy No. CP-24-02, the Pension Liability Management Policy
Fiscal Impact:

There is no fiscal impact associated with adoption of the Pension Liability Management Policy (“Policy”). If adopted, the Policy would serve as a guide for the City in managing its pension liability and is intended to be reviewed annually by staff and Council.

Strategic Plan Goal:

This item aligns with Goal A. Financial Sustainability, Strategy 1 to develop a multi-year plan and strategies to address pension obligations due to increasing pension costs and resulting pressures on the General Fund.

Background:

The City participates in three pension plans – Classic Safety (for Fire employees hired prior to January 1, 2013), Miscellaneous (for Classic and PEPRA Non-Safety employees), and PEPRA Safety (Fire employees hired after January 1, 2013). PEPRA is the California Public Employees’ Pension Reform Act of 2013. The California Public Employees’ Retirement System (“CalPERS”) publishes annual reports in August known as Actuarial Reports; one report for each pension plan. These reports are two fiscal years in arrears.

Therefore, the current report is as of June 30, 2022.

Based on the most recent actuarial reports, the PEPRA Safety Fire plan carries a very manageable funding shortfall, or Unfunded Actuarial Liability (“UAL”) of $521,390, and 2123
3 7
0 8
annual UAL payments peak at approximately $74,750. The payment peak is the highest payment shown on the Amortization Schedule provided in the report.

Therefore, the Pension Liability Management Policy focuses on the City’s Classic Safety and Miscellaneous Plans which have a combined accrued liability of $298.2 million with a market value of assets of $205.7 million, resulting in a UAL of $92.5 million (i.e., a funding ratio of 69%). The City’s combined annual UAL payments for the Classic Safety and Miscellaneous Plans are projected to increase from $7.4 million in FY 2023-24 to $10.0 million in FY 2029-30, representing an increase of 35.0% over the next six years.

The City’s Issuer Credit Rating (“ICR”) from S&P is currently a strong “AA-”. S&P noted in its ICR rating report in April 2021 that, while they view the City’s pension and Other Post-Employment Benefits (“OPEB”) liabilities as manageable, the rising costs related to the City’s underfunded pension liabilities may exacerbate budgetary pressures over the longer term. In its continued surveillance of the City’s ICR, S&P will continue to evaluate the City’s pension liabilities as part of its “debt and contingent liabilities” metric and consider whether a pension liability management policy has been adopted as part of its “management policies and practices” metric. Adopting the Pension Liability Management Policy helps to support factors for maintaining the City’s “AA-” rating.

Discussion:

In order to address the City’s pension liabilities and take advantage of opportunities to lower the UAL through various strategies, staff have worked with a Municipal Advisor (Urban Futures, Inc.) to develop a Pension Liability Management Policy for Council’s consideration and adoption.

The attached Policy incudes: 1) Policy objectives and goals; 2) A description of the City’s pension plans and liabilities; 3) Strategies for managing the City’s pension liabilities; 4) Potential funding sources for these strategies; 5) Reserve and funding target levels; and 6) Policy review and amendment.

The Policy provides a guideline for the City in implementing a long-term plan that utilizes multiple strategies over time. For example, if the Policy is adopted, staff will monitor opportunities to manage the City’s UAL through the following strategies:
(1) Additional Discretionary Payments (“ADPs”) to CalPERS - Payments above and beyond the annually required contributions to CalPERS in order to prepay a portion of the UAL, resulting in savings over time.
(2) Section 115 Trust - Trust assets can only be used to pay employer pension obligations (including normal costs) and allows the City to build a pension reserve that has greater investment flexibility and risk diversification compared to the City’s investment portfolio.
(3) Pension Stabilization Reserve Fund – A rainy-day fund to meet pension obligations when revenues are impaired based on economic or other conditions. 2124
3 7
0 8
Moneys in this reserve fund are subject to California Government Code investment restrictions and the City’s Investment Policy. The current Reserve Fund target is recommended at $2.6 million, which represents the increase in annual UAL payments for the Miscellaneous and Safety Plans from FY 2023-24 to FY 2029-30 (the current anticipated peak year).
(4) Accelerating Payment of New Amortization Bases - Accelerate the repayment of new Amortization Bases added to the UAL.

Potential funding sources for the above strategies include:
(1) Reserves in Excess of Policy Targets - To the extent that the City has reserves in its General Fund or other funds in excess of reserve targets, the City may consider allocating all or a portion of the excess toward the UAL. (2) Operating Surplus - On a case-by-case basis, staff may recommend that 50% of the remaining operating surpluses (after considerations of deficits, reserve deficiencies and other fiscal matters), up to $1 million, be used to address the UAL. (3) Debt Service Savings from Refinancings - When issuing refunding bonds for savings, the City can set aside all or a portion of debt service savings to address the UAL.
(4) Savings from Annual Prepayment Option to CalPERS - Each year, CalPERS gives its member agencies an option to make a lower (approximately 3% savings) lump sum payment for the entire year’s required contribution by July 31st. The City can continue to make the prepayment every July to CalPERS and set aside the savings to address the UAL.
(5) Financing Strategies - Tax-Exempt Exchange and Pension Obligation Bonds.

Although the Policy discusses Pension Obligation Bonds (“POBs”) and provides guidelines for the potential issuance of POBs, current market dynamics eliminate POBs as an economical option. Therefore, staff are not recommending that the Council consider this as a viable strategy at this point. However, staff recommend including the guidelines in the Policy should a market opportunity return, and the Council is interested in exploring POBs.

While the ultimate goal is to have pension liabilities fully or mostly funded, the City’s intermediate goal is to have its pension liabilities to be 80% funded. The funded status goal may be achieved over a period of several years. The funding level is expected to fluctuate; however, it should not fall below 70%, unless it is due to factors out of the City’s control (i.e., unanticipated investment earnings far below CalPERS’ investment target in a given year). The City should anticipate that its UAL will change over time and CalPERS investment results will vary. Therefore, it should expect to “actively manage” this liability 2125
3 7
0 8
and make adjustments to the Policy as the landscape changes. Staff recommend reviewing this Policy annually as part of its Mid-Year Budget Review process.

Staff remain available for any questions the Council may have.

Attachments: A. Pension Liability Management Policy
2126
Attachment A
Pension Liability Management Policy
2127

CITY OF

VICTORVILLE

COUNCIL POLICY
SUBJECT:

PENSION LIABILITY MANAGEMENT
POLICY
POLICY NO.: CP-24-02
DATE:

July 16, 2024

BACKGROUND
The Ci
ty recognizes that its unfunded pension liability can cause financial stress on the organization and direct resources away from programs and services necessary for the City’s operations and service to the public. This Pension Liability Management Policy (“Policy”) is intended to support the decision -making process of the City Council as it applies to the City’s unfunded pension liability and should be consistent with the City’s financial goals and policy objectives. Adherence to this Policy signals to the public, City employees, rating agencies, and capital markets that the City is well-managed and is able to meet its pension obligations in a timely manner.

This
Policy is intended to work in conjunction with the City’s other adopted financial policies, including the Reserve Policy, Debt Management Policy, and Budget. This Policy does not cover other post -employment benefits, known as OPEB, which principally involves retiree health care benefits and associated liabilities. Nothing in this Policy shall constitute an obligation upon the City, nor an implied contract. The City Council may revoke or amend this Policy by resolution at any time.

PURPOSE
The Ci
ty’s main objective shall be to reduce its unfunded pension liabilities in the most cost-efficient, fiscally prudent, and sustainable manner possible. As with any fiscally prudent policy, the City recognizes that this Policy should:
• Maint
ain the City’s sound financial position;
• Ensure the City has the flexibility to respond to changes in future service priorities, revenue levels, and operating expenditures;
• Provide guidance in making annual budget decisions;
• Protect the City’s creditworthiness;
• Ensure that all pension funding decisions are structured to protect both current and future taxpayers, ratepayers, employees, and residents of the City; and • Ensure that the structure of Pension Obligation Bonds, if authorized and issued, is consistent with the City’s strategic planning goals, objectives, capital improvement program, budget, and Debt Management Policy.

POLICY
I. RETI

REMENT PLANS AND RETIREMENT BENEFITS
2128
Cal
PERS is an agent multiple- employer public employee defined benefit pension plan that provides retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State, including the City. CalPERS plan benefit provisions and all other requirements are established by State statute and the City Council. The City contributes to CalPERS on behalf of active City employees who participate in the City’s Miscellaneous Plan or the City’s Safety Plan. Benefits are based on years of credited service, equal to one year of full-time employment. City employees are subject to different benefit levels based on their hire date.

Mi
scellaneous Plan – The Miscellaneous Plan has a two -tier benefit plan structure.

Employees hired before January 1, 2013 receive a benefit formula equal to 2. 5% @ 55.

Employees hired after January 1, 2013 receive a benefit formula equal to 2.0% @ 62.

Sa
fety Plan – The Safety Plan also has a two-tier benefit plan structure. E mployees hired before January 1, 2013 receive a benefit formula equal to 2.5% @ 55. Employees hired after January 1, 2013 receive a benefit formula equal to 2.0% @ 62.

Pens
ion costs associated with each Plan are allocated across the City’s various funds and entities based on payroll.

II. PE

NSION CONTRIBUTIONS AND AMORTIZATION BASES
The C
ity is statutorily required to make pension contributions on an annual basis to each plan. The City shall make a commitment to fund the full amount of the annual contribution each year. The annual pension contribution is comprised of two component parts: 1) normal costs; and 2) unfunded actuarial liability.

Nor
mal Costs - represent the current year’s pension obligation or the cost of retirement benefits earned by current employees during the year. Normal Costs are calculated based on a percentage of payroll.

Unf
unded Actuarial Liability (UAL) – is the difference between the total pension liability less the current market value of assets in the pension fund, which represents the funding shortfall for benefits previously earned by current employees and City retirees. This amount effectively represents a “past due” amount.

Cal
PERS recalculates the UAL balance and payment schedule every year, and a number of factors impact the accrued liability. Additionally, the market value of assets can change dramatically from year to year depending on investment performance. To address these differences, at the end of each year, CalPERS adds new amortization bases to adjust the UAL for changes to the system. Amortization bases are the component parts of the UAL.

They function like “individual loans” that have distinct payment schedules and terms. The payment schedule for each amortization base is calculated using the current Discount Rate (currently 6.80%). Each base is amortized over specific periods, in accordance with 2129

CalPERS amortization polic ies. The UAL is a dynamic liability, and the City should anticipate that its UAL payment schedule will fluctuate as a result of everchanging variables, making the management of pension liabilities an ongoing evaluation and management process.

GENERAL PROVISIONS

The financial objective of a defined benefit pension plan is to fund the long- term cost of benefits provided to the plan members. In order to assure that the plan is financially sustainable, the plan should accumulate adequate resources in a systematic and disciplined manner over the active service life of benefitting employees.

I. MANAGING PENSION LIABILITIES

A. Additional Discretionary Payments (ADPs) to CalPERS

The City can make Additional Discretionary Payments (ADPs) —payments above and beyond the annually required contributions (ARC) calculated by CalPERS. These payments can be used to prepay small amounts of “principal” on the UAL, thereby saving the associated “interest” (calculated at the Discount Rate) that is charged to the City. “Slow and steady” ADPs chip away at the City’s pension obligations; and over time, this strategy improves the Plans’ funding status and can result in significant savings. Additionally, making smaller ADPs to CalPERS on a regular basis (i.e., dollar cost averaging) mitigates the market timing risk of a large lump sum deposit with CalPERS that is invested in the market all at once.

B. Section 115 Trust
The timing of when funds are available may not line up with the timing and amounts of ADPs that the City desires to make to CalPERS. This should not prevent the City from accumulating funds it desires to allocate towards paying down its pension obligations. A Section 115 Trust allows the City to build its pension reserve while maintaining oversight of investment management and control over the risk tolerance and investment return targets of the portfolio.

Money placed into the trust is irrevocable, meaning it cannot be withdrawn and used for another type of expenditure of the City. The benefits of a Section 115 Trust include:

1. Assets in the trust will offset liabilities on the City’s balance sheet.

2. Assets held in trust will allow for greater investment flexibility and risk diversification compared to the City’s investment portfolio.

3. The City will control the risk tolerance (i.e., conservative, moderate, or aggressive) of the portfolio. The City should hire an investment advisor to manage the Section 115 Trust.

4. The City will have the flexibility to access trust assets any time, as long 2130

as they are used to pay employer pension obligations (including normal costs).

5. Assets can be used to make “slow and steady” ADPs to achieve UAL savings over time.

C. Pension Stabilization Reserve Fund
Because the City’s current UAL payment schedule is projected to increase through Fiscal Year 2030 by $2.6 million, it is important for the City to maintain a reserve to supplement pension costs, including normal costs, offset future unexpected contribution rate increases, and use as a rainy -day fund when revenues are impaired based on economic or other conditions.

It shall be the City’s policy to consider applying available resources to its Pension Stabilization Reserve Fund with a target balance of $2.6 million. Each year, staff will assess whether the target balance of $2.6 million remains suitable. Staff shall seek Council approval for making withdrawals from the Pension Stabilization Reserve Fund or for changing the target balance.

It is recognized that monies in this reserve fund are subject to California Government Code investment restrictions and the City’s Investment Policy and therefore has a lower investment return risk than a Section 115 Trust.

D. Accelerate Payment of New Amortization Bases

The City may seek to accelerate the repayment of any new Amortization Bases added to the UAL, thereby reducing overall “interest” costs.

II. FUNDING SOURCES FOR MANAGING PENSION LIABILITIES

A. Reserves, One-Time Monies, and Savings

To the extent that the City has excess reserves, unspent budget monies at year-end, unspent proceeds from capital projects, and/or one-time revenues or any additional resources, the City shall consider applying a portion of such monies toward its unfunded pension liabilities. The allocation of additional resources shall be made on a case-by-case basis by the City Council, with input from the City Manager after all discretionary fund reserve balances, cash flows, and one- time monies have been reviewed by Ci ty staff. There shall be an annual assessment of allocation of reserves and/or one-time monies consistent with the City’s Reserve Policy.

1. Reserves

The City seeks to maintain adequate levels of reserves in accordance to its stated reserve goals and adopted Reserve Policy. To the extent that the 2131

City has reserves in its General Fund or other funds in excess of reserve targets, the City may consider allocating the excess toward unfunded pension liabilities.

2. General Fund Surplus

Due to a variety of factors, the City may end a fiscal year with a surplus of revenues over expenditures, encumbrances , and commitments. On an annual basis, the City Manager will recommend allocations to the City Council on the use of budget surplus funds. After deficits, reserve deficiencies and other matters of fiscal concern, the City Manager or his/her designee may recommend that 50 percent (50%) of remaining budget surplus funds, up to $1 million, be used to address long -term pension liabilities. The 50% target level is a stated Policy goal; however, individual funding decisions, shall be made on a case-by-case basis.

3. Debt Service Refunding Savings
When issuing refunding bonds for savings, the City shall consider setting aside all or a portion of debt service savings to address long-term pension liabilities.

4. Annual Prepayment Option

Each year, CalPERS gives its member agencies two options for making its UAL payment: 1) make monthly payments to CalPERS; or 2) make a lower (approximately 3% savings) lump sum payment for the entire year by July 31 st to CalPERS. The City has been implementing the second option to take advantage of the savings offered by CalPERS. The City shall continue to make the prepayment every July to CalPERS and set aside the savings to address long-term pension liabilities.

B. Financing Strategies

Because the financing strategies below involve borrowing funds and repaying them at an interest rate, savings achieved with these strategies should be used to make ADPs to CalPERS to further leverage the savings.

1. Tax-Exempt Exchange
To the extent the City has pay-go tax-exempt capital projects, the City may consider financing such projects with tax -exempt bonds and using the budgeted pay-go funds to make ADPs towards the UAL. In this case, the City would then use the budgeted UAL payments to pay debt service on the tax-exempt bonds and realize savings from the differential between the tax- exempt bond borrowing rate and the Discount Rate.

2. Pension Obligation Bonds (POBs)
2132

Pension obligation bonds (POBs) are taxable bonds that state and local governments have issued as part of an overall strategy to fund the unfunded portion of their pension liabilities. The economic benefit of POBs is premised on the assumption that the bond proceeds, when invested with pension assets in higher -yielding asset classes, will be able to achieve a rate of return that is greater than the interest rate owed over the term of the bonds.

The City may opt to pursue the use of taxable bonds to “refinance” a portion of its unfunded pension liability. There is risk of failing to achieve the targeted rate of return that can burden the City with both the debt service requirements of the taxable bonds and the unfunded pension liabilities that remain unmet. To mitigate this risk, the City shall undertake the following measures prior to and during the issuance of pension obligation bonds as part of a comprehensive strategy to address the City’s unfunded liabilities.

a. Financial Analysis Required Prior to the Issuance of POBs

The following analysis should be completed prior to the issuance of POBs:

i. Estimate Savings Achieved with the Issuance of POBs by Comparing Pension Payments with and without the POB
Issuance

The City shall compare the then current UAL payment schedule against a new estimated remaining UAL payment schedule
(adjusted for a credit derived from POB proceeds) + POB debt service. This analysis will indicate if the aggregate pension cost savings, assuming then current market conditions, meet a minimum budgetary savings threshold.

ii. Assessment of Risk

The strategy of issuing POBs to pay off all or a portion of outstanding UAL carries market timing risk (i.e., if investment returns are lower than interest costs of the POBs). The City shall identify the level of risk that can be tolerated with this strategy.

b. General Guidelines for the Issuance of POBs

The City shall adhere to the following general guidelines for issuance of POBs:

i. Retirement Plan funding ratios should not exceed 100% after the application of bond proceeds.

2133

ii. The bonds shall only be structured with fixed rate current interest bonds.

iii. The bonds shall not be structured to extend the final maturity date of the UAL or defer payments.

iv. Bonds shall be structured with the most flexible prepayment option that can be achieved in the market without interest rate penalty at the time of issuance.

v. Bonds shall not finance non- current normal costs; they shall only be used to refinance unfunded pension liabilities (and current normal costs).

vi. After the issuance of POBs, the City shall determine an annual dollar amount, based on the expected savings achieved, for making ADPs to CalPERS.

FUNDING GOAL & FUNDING TARGET

While the ultimate goal is to have pension liabilities fully or mostly funded, the City’s intermediate goal is to have its pension liabilities to be 80% funded. The funded status goal may be achieved over a several year time frame. The funding level is expected to fluctuate; however, it should not fall below 70%, unless it is due to factors out of the City’s control (i.e., unanticipated investment earnings far below CalPERS’ investment target in a given year). Calculations for funding level should take into consideration any outstanding pension-related debt, such as pension obligation bonds.

SUPERFUNDING

In the event that either City plans achieve “superfunded” status, where asset values exceed the accrued liability (i.e., funding level exceeds 100%), excess amounts shall not be used for contribution holidays or to enhance benefits. Excess funding amounts should be viewed as reserves to be maintained to protect from future downturns and negative events.

POLICY REVIEW AND AM

ENDMENT

Addressing retirement costs is a dynamic process. Adjustments are made annually to a City’s normal costs and UAL. Therefore, this Policy is intended to serve as a living document that should be reviewed annually. After the release of the most current annual actuarial reports, staff shall present to City Council a summary of each plan’s funding status during its annual Mid-Year Budget Review process and will review this P olicy to determine if changes are needed to ensure adequate resources are being accumulated.

This Policy will incorporate matters by which the responsibility of decision is vested in the City Council. An y amendments to this P olicy shall be prepared by the City Manager in writing and approved by action of the City Council.

2134
Item Number: 19
City Council / Board of Directors
Written Communications
Meeting of: July 16, 2024
Submitted By:

Brenda Hampton, Director of Electric Utility Services
Subject:

Approval to execute a Capacity Release Agreement with High Desert Power Project, LLC (“HDPP”) and a Transportation Services Agreement with Kern River Gas Transmission Company (“KRGT”) for the permanent release of HDPP firm gas transmission capacity on the KRGT High Desert Lateral (“HDL”) to serve the City of Victorville’s new gas delivery point on the HDL.

Recommendation:

That the Honorable City Council:

1. Approve the Capacity Release Agreement with HDPP to effectuate the permanent capacity release from HDPP to the City of Victorville of a pro rata share of HDPP’s firm natural gas transportation capacity rights and authorize the City Manager to execute the agreement; and

2. Approve the Transportation Services Agreement in form, allow the City Manager to accept non-substantive changes to the agreement, and authorize City staff to execute the contract using the KRGT portal on the Rapids database system Fiscal Impact:

This Capacity Release Agreement, if approved by the Victorville City Council, will result in a Fiscal Impact of a lump-sum up-front payment of $200,000. Additionally, there will be a cost associated with maintaining a short-term Letter of Credit required to secure the transaction. There are sufficient funds available to cover the expenses for this capacity release, which is budgeted for in project 4190210-55080-30067 (KERN RIVER INTERCONNECTION).

Account Amount
4190210-55080-30067
(Kern River Interconnection)
$200,000
2135
2 9
7 2
The Transportation Services Agreement, if approved, will result in a Fiscal Impact of no more than $138,335 annually. There are sufficient funds available to cover the expenses for providing natural gas transportation services, which is budgeted for in Purchased Gas.

Account Amount
4190210-53020
(Purchased Gas)
$138,335
Strategic Plan Goal:

Invest in Infrastructure to provide a new natural gas delivery point for the City, enabling VMUS to have an alternate source of lower cost and reliable natural gas supply via KRGT’s interstate gas transmission system. The construction of the meter station will allow interconnection of the existing KRGT infrastructure with the existing VMUS natural gas distribution system, and these agreements will allow for the transportation of natural gas to the interconnection.

Background:

On February 7 th, 2023, the Victorville City Council approved the execution of an Interconnection Agreement (“IA”) with KRGT to enable construction of a natural gas pipeline interconnection, meter station facilities, odorizer, and Victorville Municipal Utility Services (“VMUS”) pipeline extension construction project with an environmental exemption located at the Southern California Logistics Airport (“SCLA”).

The construction of this infrastructure will provide a new natural gas delivery point for the City, enabling VMUS to have an alternate supply of natural gas through KRGT’s interstate transmission system as an alternative to VMUS being a captive retail customer of Southwest Gas Corporation. Acquisition of firm HDL gas transportation capacity on KRGT will enable VMUS to source natural gas commodity supply from multiple upstream gas marketers and deliver the gas to the new KRGT meter station to reliably serve VMUS customers. The construction of the meter station will allow physical connection of the existing KRGT infrastructure with the existing VMUS natural gas distribution system at a point located in on HDPP’s property, as shown in Attachment C.

Currently, all of the firm gas transportation capacity rights on the KRGT HDL are contracted by HDPP. VMUS is requesting to acquire a small portion (approximately 4%) of HDPP’s capacity rights in order to effectively and reliably serve its customers.

Discussion:

HDDP currently owns all available firm capacity rights on KRGT’s HDL, a 32-mile long pipeline lateral connecting KRGT’s mainline system to the existing HDPP facility located at SCLA. The proposed Capacity Release Agreement with HDPP is anticipated to result in the permanent release of 10,000 Dekatherms/Day (Dth/Day) of firm natural gas capacity, currently held by HDPP, to VMUS for its exclusive use in accordance with the terms and conditions of the KRGT tariff (“Tariff”).
2136
2 9
7 2
The released capacity must be posted for bid on KRGT’s electronic bulletin board pursuant to Federal Energy Regulatory Commission (“FERC”) regulations and Section 15 of the Tariff; however, HDPP has agreed to use commercially reasonable efforts to ensure that the Offer to Release will be on a permanent basis and the City of Victorville will be identified as the prearranged bidder at the current Tariff reservation rate ($.0140 per Dth/Day) as set forth in the Transportation Service Agreement (“TSA”) currently in effect between KRGT and HDPP. Under the Capacity Release Agreement, the City is not obligated to, but may bid over the current Tariff reservation rate.

The City is required to execute its own TSA with KRGT to complete the capacity release.

This agreement uses a standard conforming contract previously approved by FERC. At the conclusion of the bidding period, the City will execute the TSA through the Kern River portal on the Rapids database system.

Like all firm KRGT shippers, the City will pay the fixed reservation rate to KRGT for the 10,000 Dth/Day of firm capacity for the term of its TSA, irrespective of the City’s actual usage of the capacity. While the City hopes to have a winning bid at the current reservation rate, this is a competitive bid process that could result in a higher rate of up to $0.0379 per Dth/Day. The quantity of natural gas represented by the 10,000 Dth/Day is adequate to serve current and future VMUS customers for the foreseeable future. Once complete, this project is expected to result in a savings of approximately $1.03 million/year.

Staff remains available for any questions you may have.

Attachments: A. Capacity Release Agreement
B. KRGT Firm Transportation Service Agreement
C. Project Map
2137

Attachment A
Capacity Release Agreement
2138
1 BCLP Draft 06.27.24

CAPACITY RELEASE AGREEMENT
This C apacity Release Agreement (the “ Agreement”) is made and entered into as of _____________ (the “Effective Date ”) by and among City of Victorville (“Victorville”), a California municipal corporation and charter city, acting through Victorville Municipal Utilit ies Services, a municipal utility organized and existing under the l aws of the State of California (“VMUS”) (hereinafter VMUS and Victorville shall be collectively , and each individually as appropriate in the context, referred to as “COV”), and High Desert Power Project, LLC, a California limited liability company (“ HDPP”). Victorville, VMUS, and HDPP are sometimes referred to herein individually as a “ Party” and collectively as the “Parties”. Certain capitalized terms used in this Agreement are given defined meanings in Appendix A attached hereto. Any capitalized terms not defined herein shall have the meaning assigned to them in the Kern River Tariff (defined below).

R E C I T A L S:

A. HDPP entered into that certain Restated Transportation Services Agreement by and between HDPP and Kern River Gas Transmission Company (“Kern River”), dated May 23, 2012 (Contract No. 2002), as amended May 1, 2023 (“ Amended 2012 TSA”).

B. Kern River executed an Amendment to Restated Transportation Services Agreement with H DPP, Contract No. 2002, dated May 1, 2023, to update the negotiated rate and extend the term of the Amended 2012 TSA. Commencing September 1, 2023, the negotiated rate is a Daily Reservation/Demand Rate of $0.0140/Dth or $0.0139/Dth for leap years (collectively the “Negotiated Rate”), and the term of the Amended 2012 TSA is extended for five years until August 31, 2028.

C. On August 31, 2023, Kern River filed the May 1, 2023, Amended and Restated Agreement and associated Tariff revisions (FERC Docket No. RP23-1000-000) to reflect the new negotiated rate and term extension. FERC approved the Amended and Restated Agreement on September 15, 2023 to be effective September 1, 2023.

D. HDPP desires to permanently release to COV a portion of HDPP’s firm forward- haul natural gas transportation capacity rights on Kern River’s High Desert Lateral Pipeline as set forth in the Amended 2012 TSA ( the “Gas Transportation Capacity Rights”) in exchange for the consideration described herein.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the Parties, the Parties agree as follows:
2139
2 1. O ffer to Release. HDPP agrees to use commercially reasonable efforts to post on Kern River’s Customer Activities Website , within 5 business days after the Effective Date, an Offer to Release a total of 10,000 Dekatherms/Day (Dth/Day) of firm forward-haul natural gas capacity currently held by HDPP under the Amended 2012 TSA (the “Permanently Released Capacity”). HDPP shall use commercially reasonable efforts to ensure that the Offer to Release will be on a permanent and non- recallable basis, and COV will be identified as the prearranged bidder at the Negotiated Rate, term and other applicable terms as set forth in the Amended 2012 TSA as determined by Kern River. Unless an alternative nondiscriminatory ranking methodology is requested by COV prior to posting, HDPP will use commercially reasonabl e efforts to designate the “Net Revenue” methodology for determining the value of bids submitted pursuant to Section 15.7 of Kern River ’s Federal Energy Regulatory Commission Gas Tariff (the “Kern River Tariff”).

2. Recall Rights. HDPP shall designate in the Offer to Release that HDPP is not entitled to recall the Permanently Released Capacity.

3. Biddable Posting. The Parties acknowledge that the Permanently Released Capacity must be posted for bid pursuant to FERC regulations and Section 15 of the Kern River Tariff.

HDPP’s obligations under this agreement are fully satisfied after: (1) HDPP submits to Kern River a valid Offer to Release pursuant to Section 1 above; (2) the Offer to Release is accepted by Kern River ; and (3) the Offer to Release is posted for bid pursuant to the Kern River Tariff. COV shall ensure that it maintains the highest scoring bid and is awarded the Permanently Released Capacity, but in no instance will COV be required to bid more than the Negotiated Rate. Each Party shall utilize its best efforts to effect the release of the Permanently Released Capacity from HDPP to COV at the Negotiated Rate. Neither Party shall take any action to directly or indirectly encourage or otherwise cause the failure of the proposed permanent release.

4. Kern River Tariff. T
he Parties shall use commercially reasonable efforts to satisfy any requirements of the Kern River Tariff, as it may change from time to time, and to execute any and all documents as may be reasonably necessary to effectuate the permanent release of the Permanen tly Released Capacity such that Kern River (i) agrees to look solely to COV for all obligations with respect to the Permanently Released Capacity and (ii) releases HDPP from all obligations for demand charges, reservation charges, and all other charges related to the Permanently Released Capacity ; provided, that HDPP shall have no obligation to take any action or execute any document that would adversely affect HDPP.

HDPP acknowledges that if the Permanently Released Capacity is released to COV, pursuant to the Kern River Tariff, COV will have a pro rata share of rights in the Receipt P
oints and Delivery Points as set forth in the Amended 2012 TSA.

5. S ecurity .

(a) W ithin 5 days after COV is awarded the Permanently Released Capacity , COV shall deliver to HDPP an irrevocable, transferable, standby letter of credit in the amount of $500,000 (the “LC Amount”), issued by a bank that is a member of the Federal Reserve System satisfactory to HDPP , and meeting the requirements set 2140
3 forth below (including any extension thereof or permitted replacement therefor, the “L
etter of Credit ”), as security for the faithful performance and observance by COV of its obligations under this Agreement, and COV shall maintain such Letter of Credit in full force and effect for the benefit of HDPP until the date on which Kern River releases and discharges HDPP from all obligations, damages, claims and liabilities arising out of or relating to the Permanently Released Capacity under the Amended 2012 TSA and the Kern River Tariff . The Letter of Credit (i) shall be payable to HDPP in partial or full draws upon presentation solely of a notice signed by an officer of HDPP (which presentation may be made at the issuer’s counter or by overnight mail at the address specified in such Letter or Credit), (ii) shall have an expiry date of the later of (a) the date COV executes a Transportation Services Agreement with Kern River assuming all HDPP obligations relating to the Released Capacity in accordance with Section 15.8(b)(ii) of the Kern River Tariff, (b) the date Kern River files at FERC to further amend the Amended 2012 TSA to add an exhibit memorializing the permanent capacity release to COV in accordance with Section 15.8(a)(i) of the Kern River Tariff , and (c) the date Kern River provides HDPP a full release of liability pertaining to the Permanently Released Capacity pursuant to Kern River Tariff Section 15.10(a), and (iii) shall be in form and substance otherwise satisfactory to HDPP. Any and all fees or costs charged by the issuer in connection with the issuance, maintenance or transfer of the Letter of Credit shall be paid by COV.

(b) I
f COV fails to perform any of its obligations under this Agreement, including, without limitation, COV’s obligation to comply with all requirements of the Amended 2012 TSA and the Kern River Tariff to the extent the same relate to the Permanently Released Capacity, HDPP shall have the right to draw on the Letter of Credit, in whole or in part, to the extent required to pay, or to reimburse HDPP for, any HDPP Liabilities (as defined below) incurred by HDPP as a result of such failure, including without limitation any costs of HDPP performing, at its election (but without any obligation to do so) any such obligations on COV’s behalf. If any portion of the Letter of Credit is drawn upon pursuant to this clause (b) , within 5 business days after written demand from HDPP, COV shall deliver to HDPP either an amendment of the Letter of Credit signed by the issuer, reinstating the undrawn amount of such Letter of Credit by an amount equal to such drawing up to the LC Amount, or shall deliver to HDPP , in replacement of such Letter of Credit, a new Letter of Credit in the full LC Amount that conforms to the requirements of this Section 5.

(c) H DPP shall also have the right to draw on the full amount of the Letter of Credit if a material adverse change in the financial condition of the issuer of the Letter of Credit occurs, as reasonably determined by HDPP in good faith, and COV does not replace such Letter of Credit with a new Letter of Credit conforming to the requirements of this Section 5 within 15 business days after written request by HDPP. Any amounts drawn by HDPP pursuant to this clause (c) shall be held as cash security by HDPP and may be applied by HDPP to any HDPP Liabilities to 2141
4 the same extent HDPP would have been entitled draw upon the Letter of Credit.

(d) Notwithstanding anything to the contrary contained herein and for the avoidance of doubt, if COV is not awarded the Permanently Released Capacity , COV shall not be required to comply with the provisions of this Section 5.

6. T erm . The term (the “Term ”) of this Agreement shall begin on the Effective Date and, unless earlier terminated pursuant to Section 7 below, shall terminate upon the date and time at which the Capacity Release open season ends in accordance with Section 15.9 of the Kern River Tariff. Notwithstanding anything herein to the contrary, the last sentence of Section 3, Section 4, Section 5, the last sentence of Section 7, the last sentence of Section 8, and Sections 9, 10, 11, 12, 13 and 14 of this Agreement shall survive the termination or expiration of this Agreement.

7. Termination. Either Party may deliver written notice to the other Party of any material breach of this Agreement by such other Party. The Party receiving notice of the material breach shall have ten (10) business days after receiving such notice to cure the material breach. If the Party receiving notice of the material breach does not cure the material breach within ten (10) business days after receiving notice of such material breach, the Party that delivered notice of the material breach may terminate this Agreement immediately upon providing written notice of termination to the other Party. In addition, HDPP may immediately terminate this Agreement upon providing written notice to COV if (i) for any reason, despite having exerted commercially reasonable efforts, HDPP is not able to successfully post on Kern River’s Customer Activities Website, within 5 business days
after the Effective Date, an Offer to Release the Permanently Released Capacity on the terms described in Section 1 , (ii) HDPP determines that the costs required to be incurred by HDPP in order to perform its obligations under this Agreement are reasonably likely to exceed the HDPP Expense Cap (as defined below) , or (iii) Kern River challenges this Agreement or asserts any breach of or default under the Kern River Tariff or the Amended 2012
TSA resulting from or in connection with this Agreement. If this Agreement is terminated prior to the posting of the Offer to Release the Permanently Released Capacity on Kern River’s Customer Activities Website, HDPP shall return the Letter of Credit to COV as promptly as reasonably practicable (but in no event later than 10 business days) after the termination date.

8. P
rice. Within 5 business days after HDPP posts on Kern River’s Customer Activities Website an Offer to Release the Permanently Released Capacity with COV identified as the prearranged bidder as set forth in Section 1, COV shall pay HDPP Two-Hundred Thousand Dollars and No Cents ($200,000.00) (“Purchase Price ”), payable by wire transfer in immediately available funds in accordance with written wire instructions provided by HDPP. The Purchase Price shall be non-refundable and fully earned upon the Offer to Release for the Permanently Released Capacity being posted for bid pursuant to the Kern River Tariff and HDPP’s fulfillment of its obligations under Section 3 of this Agreement.

2142
5 9. R epresentation s and Warranties.

a. C OV Representations and Warranties : By signing this Agreement, COV represents, warrants, acknowledges and agrees that:

i. The ex
ecution and delivery of this Agreement has been duly authorized by all necessary action on the part of COV, this Agreement constitutes the legal, valid and binding obligation of COV, enforceable against COV in accordance with its terms, and, except as otherwise set forth herein, the performance by COV of its obligations hereunder will not require the approval of any Governmental Authority, will not contravene, conflict with or result in the breach or violation of any document, instrument or agreement to which it is a party or is bound or of any Law.

ii. COV possesses all requisite power and authority to perform this Agreement and to carry out the transactions contemplated herein.

iii. COV is qualified to receive service from Kern River under the provisions of the Kern River Tariff.

iv. COV shall comply with the provisions of the Kern River Tariff, including without limitation those provisions related to capacity release , solely to the extent such provisions directly relate to (i) COV’s obligations under this Agreement, or (ii) the Permanently Released Capacity.

v. No suit, action or arbitration, or legal, administrative or other proceeding is pending or, to its knowledge, threatened against COV that would affect the validity or enforceability of this Agreement or the ability of it to fulfill its obligations and commitments hereunder.

b. H
DPP Representations and Warranties : By signing this Agreement, HDPP represents, warrants, acknowledges and agrees that:

i. T
he execution and delivery of this Agreement has been duly authorized by all necessary action on the part of HDPP, this Agreement constitutes the legal, valid and binding obligation of HDPP, enforceable against HDPP in accordance with its terms, and, except as otherwise set forth herein, the performance by HDPP of its obligations hereunder will not require the approval of any Governmental Authority, will not contravene, conflict with or result in the breach or violation of any document, instrument or agreement to which it i s a party or is bound or of any Law.

ii. HDPP possesses all requisite power and authority to perform this Agreement and to carry out the transactions contemplated herein.

2143
6 iii. HDPP shall comply with the provisions of the Kern River Tariff, including without limitation those provisions related to capacity release, solely to the extent such provisions directly relate to (i) HDPP’s obligations under this Agreement, or (ii) the Permanently Released Capacity.

iv. No suit, action or arbitration, or legal, administrative or other proceeding is pending or, to its knowledge, threatened against HDPP that would affect the validity or enforceability of this Agreement or the ability of it to fulfill its obligations and commitments hereunder.

10. R
elease. COV acknowledges that HDPP shall seek an unconditional release from Kern River whereby Kern River shall release and discharge HDPP from all obligations, damages, claims, and liabilities arising out of or related to the Permanently Released Capacity unde
r the Amended 2012 TSA and the Kern River Tariff. Unless and until such unconditional release is obtained, COV shall comply with all requirements of the Amended 2012 TSA and the Kern River Tariff to the extent the same relate to the Permanently Released Capacity.

11. I ndemnification s.

a. COV shall, jointly and severally, indemnify, defend (with counsel approved by HDPP) and hold harmless HDPP and each officer, director, employee, shareholder, partner, member or agent of HDP P (each, a “HDPP Indemnified Person”) from and against any and all claims, actions, suits, fines, judgments, injuries, penalties, damages, demands, settlements, losses (to property, materials, equipment, or otherwise), liabilities, costs, charges and expenses ( including without limitation legal fees and expenses ), in each case whether or not arising out of a third-party claim (collectively, “HDPP Liabilities”) incurred in connection with or arising out of or resulting from: (a) the Gas Transportation Capacity Rights, the Permanently Released Capacity , or any other obligations under this Agreement ; (b) the negligence, fraud or willful misconduct of COV or its Affiliates in connection with COV or its Affiliates obligations under this Agreement; (c) any breach by COV of any representation or warranty under this Agreement; or (d) any failure by COV to perform any covenant or obligation under this Agreement, except, in each case, to the extent such HDPP Liabilities are caused by (x) the fraud, gross negligence or willful misconduct of any HDPP Indemnified Person, (y) the intentional and willful violation of any Law by any HDP P Indemnified Person or (z) the intentional and willful breach by any HDPP Indemnified Person of this Agreement. The indemnity obl
igations created by this Section 11 shall survive the termination and/or completion of this Agreement.

HDPP shall, jointly and severally, indemnify, defend (with counsel approved by COV) and hold harmless COV and the elected or appointed official s, officers, directors, employees, independent contractors, or agent s of COV (each, a “COV Indemnified Person”) from and against any and all claims, actions, suits, fines, 2144
7 judgments, injuries, penalties, damages, demands, settlements, losses (to property, materials, equipment, or otherwise), liabilities, costs, charges and expenses (including without limitation legal fees and expenses), in each case whether or not arising out of a third- party claim (collectively, “ COV Liabilities”) incurred in connection with or arising out of or resulting from: (a) the negligence, fraud or willful misconduct of HDPP or its A ffiliates in connection with HDPP or its Affiliates obligations unde r this Agreement ; (b) any breach by HDPP of any representation or warranty under this Agreement ; or (c ) any failure by HDPP to perform any covenant or obligation under this Agreement, except, in each case, to the extent such COV Liabilities are caused by (x) the fraud, gross negligence or willful misconduct of any COV Indemnified Person, (y) the intentional and willful violation of any Law by any COV Indemnified Person or (z) the intentional and willful breach by any COV Indemnified Person of this Agreement. The indemnity obl
igations created by this Section 11 shall survive the termination and/or completion of this Agreement.

12. H DPP Expense Cap . Notwithstanding anything to the contrary contained elsewhere in this Agreement, HDPP shall not be required to incur any costs in excess of twenty thousand dollars ($20,000.00) in the aggregate (“HDPP Expense Cap”) to reasonably perform its obligations under or in connection with this Agreement. The Parties agree that any costs incurred or accrued by HDPP prior to the Effective Date of this Agreement shall not be included in any calculation of the HDPP Expense Cap.

13. D
isclaimer of Warranties . EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 9(B), COV EXPRESSLY
ACKNOWLEDGES AND AGREES THAT (1) HDPP MAKES NO

REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE COMPLIANCE

OF THIS AGREEMENT OR THE TRANSACTIONS OR ACTIVITIES

CONTEMPLATED HEREBY, INCLUDING WITHOUT LIMITATION THE
MATTERS CONTEMPLATED BY SECTION 1 , WITH THE KERN RIVER TARIFF, THE AMENDED 2012 TSA, OR APPLICABLE LAWS; (2) HDPP IS NOT ASSUMING

ANY LIABILITY OR OBLIGATION HEREUNDER IF ANY OR ALL OF THE

TRANSACTIONS OR ACTIVITIES CONTEMPLATED HEREBY, INCLUDING,

WITHOUT LIMITATION, THE PROCEDURES FOR RELEASING THE

PERMANENTLY RELEASED CAPACITY ARE INEFFECTIVE UNDER OR
VIOLATE THE KERN RIVER TARIFF , THE AMENDED 2012 TSA, OR APPLICABLE LAWS ; AND (3) THE RELEASE OF THE PERMANENTLY RELEASED CAPACITY CONTEMPLATED BY THIS AGREEMENT IS ON AN “ AS IS, WHERE IS” AND “WITH ALL FAULTS” BASIS, WITHOUT ANY

REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER STATUTORY,

WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING WITHOUT

LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR

FITNESS FOR A PARTICULAR PURPOSE, AND WARRANTIES ARISING FROM A

COURSE OF DEALING OR USAGE OF TRADE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED.
2145
8 14. M iscellaneous .

(a) Governing Law; Venue. The Parties acknowledge and agree that this Agreement is subject to all applicable terms and conditions of the Kern River Tariff and all applicable Laws, as they may change from time- to-time. To the extent that state law may be applicable, t his Agreement shall be governed and interpreted in accordance with the l aws of the State of California without application of any conflict of laws principles thereof. Any action arising out of or relating to this Agreement shall be instituted in the state or federal courts located in San Bernardino County, California, and each Party irrevocably submits to the exclusive jurisdiction of such courts in any such action or legal proceeding.

(b
) Waiver of Jury Trial . T O THE FULLEST EXTENT PERMITTED BY LAW,

EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A

TRIAL BY JURY IN ANY LEGAL ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS AGREEMENT.

(
c) Assignment. N either Party shall have the right to assign or transfer this Agreement, in whole or in part, or any of its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed. Without limiting the generality of the foregoing, HDPP may assign or grant a security interest in this Agreement and the Letter of Credit in connection with any financing or refinancing by HDPP or any of its Affiliates, and, in connection therewith, COV agrees to, and to cause its Affiliates to, cooperate with HDPP and the Lenders in the negotiation of any reasonable amendment or addition to this Agreement required by any Lender which does not result in a material adverse change in COV’s rights or obli gations under this Agreement, and COV also agrees to execute, acknowledge and deliver any and all such further documents and instruments and to take such other action at the request of HDPP, including without limitation the execution and delivery of certifications, estoppels, and consents, as may reasonably be required by the Lenders in order to allow any such financing or refinancing. Any and all costs incurred by HDPP with respect to an assignment or grant of a security interest in this Agreement or the Letter of Credit connection with a financing or refinancing shall be borne fully by HDPP and in no event shall COV be responsible for any such costs.

(d
) FERC Approval. S ubject to the terms and conditions set forth herein, the Parties agree to execute and deliver all documents reasonably necessary for this Agreement to comply with FERC requirements; provided, however, that for purposes of clarity no Party shall be obligated to execute any documents which have or could reasonably be expected to have an adverse effect on such Party or its rights and benefits under this Agreement.

(
e) Entire Agreement. T his Agreement contains the entire understanding between the 2146
9 Parties, superseding all prior or contemporaneous communications, agreements, and understandings between the Parties. In the event of any conflict between the terms of this Agreement and the terms of any other agreement s established in connection with the matters contained herein, the terms of this Agreement shall prevail.

(f) Waiver of Consequential Damages ; L
imitation on Liability . EXCEPT WITH
RESPECT TO THE PARTIES’ OBLIGATIONS UNDER SECTION 11 , IN NO

EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR

ITS AFFILIATES OR ITS OR THEIR RESPECTIVE MEMBERS,

SHAREHOLDERS, DIRECTORS, OFFICERS AGENTS AND EMPLOYEES

FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL

EXEMPLARY, OR PUNITIVE DAMAGES, INCLUDING LOSS OF ACTUAL

OR ANTICIPATED PROFITS, REVENUES OR BUSINESS, COST OF

CAPITAL, LOSS OF DATA OR LOSS OF OPPORTUNITY IN CONNECT ION

WITH OR ARISING OUT OF OR RESULTING FROM THIS AGREEMENT,

REGARDLESS OF WHETHER SUCH LIABILITY ARISES OUT OF

CONTRACT, TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE. IN NO EVENT SHALL H
DPP’S

AGGREGATE LIABILITY UNDER OR IN CONNECTION WITH THIS

AGREEMENT (WHETHER IN CONTRACT, IN TOR T (INCLUDING

WITHOUT LIMITATION NEGLIGENCE) , STRICT LIABILITY OR

OTHERWISE) EXCEED THIRTY THREE THOUSAND THREE HUNDRED
AND THIRTY THREE DOLLARS ($33,333.00) ; PROVIDED, THAT SUCH

LIMITATION ON LIABILITY SHALL NOT APPLY IN THE EVENT OF FRAUD BY HDPP.

(g) Notice. A
ll notices, requests, demands, and other communications required or permitted to be given by the Parties hereunder shall be in writing and shall be delivered (a) in person, (b) by overnight courier, fees prepaid, to the address of the intended recipient as set forth below, or (c) by electronic mail to the address of the recipient as set forth below with written confirmation of receipt (which does not i
nclude automatic email system generated “read” receipts) . Notice delivered in person or by overnight courier shall be acknowledged in writing at the time of receipt. All such notices, requests, demands, and other communications shall be deemed to have been received by the addressee if by personal delivery or overnight courier, upon such delivery, and if by electronic mail, upon confirmation of receipt (which does not include automatic email system generated “read” receipts) . All such notices, requests, demands, and other communications shall be sent to the following addresses:

City of Victorville
c/o Victorville Municipal Utilities Services
_____________________
_____________________
2147
10 _____________________
Attn:

Email:

High Desert Power Project, LLC

_____________________
_____________________
Attn:

Email:

The foregoing addresses may be changed by any Party by giving written notice to the other Party as provided above.

(h) Amendments. No amendment or other modification of this Agreement shall be valid or binding upon the Parties unless such amendment or other modification is in writing and duly executed by both Parties.

(i
) Counterparts. T his Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. A signed copy of this Agreement delivered by facsimile, e -mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

(j
) Severability. T he invalidity of one or more phrases, sentences, clauses, sections or subsections contained in this Agreement shall not affect the validity of the remaining portions of the Agreement so long as the material purposes of this Agreement can be determined and carried out.

[SIGNATURES ON NEXT PAGE]

2148
11 IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the date first above written.

High Desert Power Project, LLC
a California limited liability company
By: _____________________________________
Name: __________________________________
Title: ____________________________________
Date: ___________________________________

City of Victorville

By: ______________________________________
Name: ___________________________________
Title: _____________________________________
Date: ____________________________________

2149

APPENDIX A
Attached to and made a part of the Capacity Release Agreement “Affiliate” shall mean, when used in reference to a specified Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the specified Person.
“Agreement” shall have the meaning set forth in the in the opening paragraph of the Agreement.
“Amended 2012 TSA” shall have the meaning set forth in the Recitals. “Control,” “Controlled by,” and “under common Control with,” with respect to any Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or member or partnership interests, by contract or otherwise. “COV” shall have the meaning set forth in the in the opening paragraph of the Agreement. “COV
Indemnified Person” shall have the meaning set forth in Section 11. “COV Liabilities” shall have the meaning set forth in Section 11. “Delivery Points” shall mean the existing Kern River “Victorville” delivery meter to HDPP and the new, proposed Lane’s Crossing delivery meter to COV. “Effective Date” has the meaning set forth in the in the opening paragraph of the Agreement.
“FERC” shall mean the Federal Energy Regulatory Commission. “Gas Transportation Capacity Rights” shall have the meaning set forth in the Recitals. “Governmental Authority” shall mean any federal, state, tribal, municipal, national or other government, any governmental or quasi -governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof, or any entity, officer or examiner exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a State of the United States or the United States.
“Ground Lease” means that certain Ground Lease and Development Agreement dated February 14, 2001, between SCLAA and HDPT.
“HDPP” shall have the meaning set forth in the in the opening paragraph of the Agreement. “HDPP Expense Cap” shall have the meaning set forth in Section 12. “HDPP Indemnified Person” shall have the meaning set forth in Section 11. 2150

“HDPP Liabilities” shall have the meaning set forth in Section 11. “HDPT” shall mean High Desert Power Trust, a Delaware statutory business trust. “High Desert Lateral Pipeline” shall mean the approximately 32- mile-long high-pressure pipeline lateral originating at Kern River’s mainline near Kramer Junction, CA and terminating at Kern River’s metering station located near the Northeast corner of the Land leased by SCLAA to HDPT and subleased by HDPT to HDPP.
“Kern River” shall have the meaning set forth in the Recitals. “K
ern River Tariff” shall have the meaning set forth in Section 1. “Law” shall mean any statute, regulation, ordinance, rule, government approval, agreement, directive, guideline, policy, requirement, or other governmental restriction or any similar form of decision of or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority having jurisdiction over the matter or Person in question, whether now or hereafter in effect applicable to this Agreement or to any of the parties to this Agreement. “Land” or “Leased Land” means that portion of SCLAA property leased to HDPT as defined in section 1.01 of the Ground Lease and Exhibit A thereto. “LC Amount” shall have the meaning set forth in S
ection 5(a).
“Letter of Credit” shall have the meaning set forth in Section 5(a). “Lender” means any Person or Persons providing debt or lease financing or refinancing to HDPP or any of its Affiliates, and its or their successors and assigns, including any agent or trustee for such Person or Persons.
“Negotiated Rate” shall have the meaning set forth in the Recitals. “Party” or “Parties” shall have the meaning set forth in the opening paragraph of the Agreement.
“P ermanently Released Capacity” shall have the meaning set forth in Section 1 . “Person” shall mean an individual, corporation, limited liability company, voluntary association, joint stock company, business trust, partnership, agency, Governmental Authority or other entity.
“Purchase Price” shall have the meaning set forth in Section 8. “Receipt Points” shall mean Kern River’s Sidewinder meter and Fremont Peak (PG&E) meter, and any future receipt point meters built to serve the High Desert Lateral Pipeline. “SCLAA” means the Southern California Logistics Airport Authority, the lessor under the Ground Lease.
2151

“Term” shall have the meaning set forth in Section 6.
“Victorville” shall have the meaning set forth in the in the opening paragraph of the Agreement.
“VMUS” shall have the meaning set forth in the in the opening paragraph of the Agreement. 2152

Attachment B
KRGT Firm Transportation Service Agreement
2153

FIRM TRANSPORTATION SERVICE AGREEMENT
Rate Schedule KRF-L1

CONTRACT NO. 2003

THIS FIRM TRANSPORTATION SERVICE AGREEMENT ("Agreement”) is made and entered into this _____ day of [insert month and year] by and between KERN RIVER GAS TRANSMISSION COMPANY ("Transporter") and CITY OF VICTORVILLE ("Shipper"), and supersedes all previous versions of this Agreement, if any.

W
HEREAS, Shipper was awarded capacity via a partial permanent capacity release from High Desert Power Project, LLC’s 2002 agreement pursuant to Award Number 2003.

NOW, THEREFORE, in consideration of the mutual covenants and agreements as herein set forth, the parties hereto agree as follows:

ARTICLE I - GAS TO BE TRANSPORTED

1.1 Subject to the terms, conditions and limitations hereof, Transporter agrees to receive from Shipper for Transportation at the Receipt Point(s) specified in Exhibit "A” hereto, as amended from time to time, and to transport and deliver Thermally Equivalent Quantities of Natural Gas to Shipper at the Delivery Point(s) specified in Exhibit "A” hereto, as amended from time to time, Quantities of Natural Gas, exclusive of Quantities required for fuel used and lost and unaccounted-for Gas, up to Shipper's DMDQ. Shipper’s DMDQ is set forth on Exhibit “A.”

1.2 Shipper will reimburse Transporter for fuel used and lost and unaccounted- for Gas on an in-kind basis pursuant to the General Terms and Conditions of Transporter's FERC-approved tariff, as revised from time to time ("Transporter’s Tariff”).

ARTICLE II - APPLICABLE RATE SCHEDULE

2.1 Shipper agrees to pay Transporter for all Natural Gas Transportation service rendered under the terms of this Agreement in accordance with Rate Schedule KRF-L1 of Transporter’s Tariff. This Agreement will be subject to the provisions of such Rate Schedule and the General Terms and Conditions of Transporter’s Tariff, which by this reference are incorporated herein and made a part hereof.

2.2 Shipper has acquired its capacity via capacity release. Shipper’s reservation rate for Transportation service is the rate Shipper bid for the capacity, as set forth on Exhibit “B.” Special terms and conditions included in Releasing Shipper’s Offer to Release are set forth on Exhibit “C.”

2.3 Notwithstanding Section 5.5 of the General Terms and Conditions, and subject to any negotiated credit, Shipper will make payment of the monthly Reservation Charge pursuant hereto in full, irrespective of (but without prejudice to the rights otherwise of Shipper with respect to) any dispute relative to the amount invoiced. Shipper will not be entitled to any abatement of such payment or any set -off against it, including but not limited to, abatement or set-off due or alleged to be due by reason of any past, present or future claims or other rights of Shipper against Transporter or any other person or entity, whether in connection herewith or any unrelated transaction.

Page 1 of 7 ends

2154

ARTICLE III - TERM OF AGREEMENT

3.1 Service under this Agreement will be in effect ____________ through August 31, 2028 (the “Primary Term”). This Agreement shall continue in effect beyond the Primary Term and any extension thereof for successive additional terms of five (5) years, subject to the rate specified in Section 2.1 of Exhibit “B” hereto, unless Shipper shall have given Transporter written notice of its intent to terminate this Agreement not later than twelve (12) months prior to the expiration of the Primary Term or any extension thereof.

A
RTICLE IV – MISCELLANEOUS PROVISIONS

4.1 This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No promises, agreements or warranties additional to this Agreement other than as may be contained in Transporter’s Tariff will be deemed to be a part of this Agreement, nor will any alteration, amendment or modification be effective unless confirmed in writing by the parties.

4.2 This Agreement shall incorporate and in all respects shall be subject to the General Terms and Conditions and the applicable Rate Schedule(s) set forth in Transporter’s Tariff. Transporter may file and seek approval from the FERC under Section 4 of the Natural Gas Act (“NGA”) at any time and from time to time to change any rates, charges or other provisions set forth in the applicable Rate Schedule(s) and the General Terms and Conditions in Transporter’s Tariff. Transporter shall have the right to plac e such changes in effect in accordance with the NGA, and this Agreement shall be deemed to include such changes and any change that becomes effective by operation of law and FERC order, without prejudice to Shipper’s right to protest the same.

4.3 The priority of service for this Agreement shall be September 1, 2002.

[If applicable--

4.4 TO THE FULLEST EXTENT PERMITTED BY LAW, SHIPPER AND TRANSPORTER WAIVE ANY

RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH

PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY

TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this _______ day of [insert month and year].

“SHIPPER:”

CITY OF VICTORVILLE

By: ____
__________________

Title: _____ ______________

“TRANSPORTER:”

KERN RIVER GAS TRANSMISSION COMPANY

By: ____ __________________

Title: Director-Marketing &
Customer Services

Page 2 of 7 ends

2155

EXHIBIT "A"

FIRM TRANSPORTATION SERVICE AGREEMENT

CONTRACT NO. 2003

BETWEEN

CITY OF VICTORVILLE

AND

KERN RIVER GAS TRANSMISSION COMPANY

Execution Date of this Exhibit “A”: ________,____

Term of Service: Beginning ______ through August 31, 2028, and extending beyond the end date pursuant to Article III of the Agreement.

DMDQ: 10,000 Dth

Receipt Point
Receipt Meter Entitlement
P
oint(s) Number Loc. Type (Dth)
Freemont Peak Rcpt-PG&E 017001 R 10,000

Sidewinder Rcpt- Kern River 017002 R 10,000

Total Receipt Point Entitlement: 20,000 Dth

Notes:

Notwithstanding such Receipt Point Entitlements listed above, the total DMDQ to be received on a firm basis from all Primary Receipt Points will not exceed 10,000 Dth/d at any time.

Page 3 of 7 ends

2156

EXHIBIT "A” (Continued)

The following paragraph is applicable if the PG&E Line 300, Freemont Peak, Receipt Point is designated:

Transporter's obligation to receive quantities at the Line 300 Primary Receipt Point on a firm basis is subject to and conditioned upon PG&E's maintenance of delivery pressure at the Line 300 Receipt Point at levels that permit delivery of such quantities into the High Desert Lateral at the pressures existing in the High Desert Lateral from time to time. Subject to its obligations to maintain deliveries at the High Desert Generating Facility at not less than the minimum guaranteed pressure specified on contracts for service to that facility, Transporter will regul ate the pressure on the High Desert Lateral down to a maximum pressure that does not exceed the pressure existing at the Line 300 Receipt Point from time to time in order to permit the firm receipt at such point of the nominated quantity, up to the applicable Receipt Point Entitlements. Notwithstanding the foregoing, Transporter reserves the right to operate the High Desert Lateral at pressures up to the applicable MAOP on any day on which it does not receive a confirmed nomination for the receipt of Gas at the Line 300 Receipt Point. Transporter will continue to regulate the pressure on the High Desert Lateral in the manner described in this paragraph for so long as firm service to all Shippers having Primary Receipt Points and Primary Delivery Points on the High Desert Lateral, as modified from time to time, can be maintained at such regulated pressure. Nothing will preclude Transporter from installing additional Receipt or Delivery Points on the High Desert Lateral or from providing firm service to other Shippers.

Delivery Point
Delivery Meter Entitlement
P
oint(s) Number Loc. Type (Dth)
Freemont Peak Dlv-PG&E 027001 D 10,000

Victorville- HDPP 027002 D 10,000

Total Delivery Point Entitlement: 20,000 Dth

Notes:

Notwithstanding such Delivery Point Entitlements listed above, the total DMDQ to be delivered on a firm basis at all Primary Delivery Points will not exceed 10,000 Dth/d at any time.

The following paragraph is applicable if the PG&E Line 300, Freemont Peak, Delivery Point is designated:

Transporter’s obligation to deliver quantities at the Line 300 Primary Delivery Point on a firm basis is subject to and conditioned upon PG&E’s maintenance of pressures at the Line 300 Delivery Point at levels that permit receipt of such quantities from the High Desert Lateral into Line 300 at the pressures existing in the High Desert Lateral from time to time. Subject to its obligations to maintain deliveries at the High Desert Generating Facility at not less than the pressure specified on contracts for service to that facility, Transporter will operate the High Desert Lateral (including the regulation of pressure and the adjustment of line pack) so that it can make deliveries into the Line 300 Delivery Point from time to time of nominated quantities up to the applicable Delivery Point Requirements.

Notwithstanding the foregoing, Transporter reserves the right to operate the High Desert Lateral at such pressures as are consistent with its obligation to maintain delivery pressures at the High Desert Generating Facility at not less than the minimum guaranteed pressure specified on contracts for service to that facility on any day on which it does not receive a confirmed nomination for the delivery of Gas at the Line 300 Delivery Point. Transporter will continue to operate the High Desert Lateral in the manner described in this paragraph for so long as firm service to all Shippers having Primary Receipt Points and Primary Delivery Points on the High Desert Lateral, as modified from time to time, can be maintained. Nothing will preclude Transporter from installing additional Receipt or Delivery Points on the High Desert Lateral or from providing firm service to other Shippers.

Page 4 of 7 ends

2157

EXHIBIT "B"

FIRM TRANSPORTATION SERVICE AGREEMENT

CONTRACT NO. 2003

BETWEEN

CITY OF VICTORVILLE

AND

KERN RIVER GAS TRANSMISSION COMPANY

Execution Date of this Exhibit “B”: ________,____

S
hipper’s rate shall be:

1. NEGOTIATED RATE

1.1 P ursuant to Section 5.10 of Rate Schedule KRF -L1, Transporter and Shipper have mutually agreed to a Negotiated Rate for service under this Transportation Service Agreement, as provided in Section 23 of the General Terms and Conditions of Transporter’s FERC Gas Tariff. Effective commencing [DATE], such Negotiated Rate is a Daily Reservation/Demand Rate of $0.0140 per Dth for the Primary Term.

1 .2 Transporter will invoice Shipper a monthly amount determined by multiplying Shipper’s DMDQ by the applicable Negotiated Rate and then multiplying the result by the number of days in the month.

2. RATE TO APPLY FOLLOWING CONCLUSION OF THE PRIMARY TERM RATE

2.1 Notwithstanding any other provision of this Agreement, the rate to be charged hereunder following the conclusion of the Primary Term shall be not greater than the amount determined on the basis of the most recent available data for the preceding twelve (12) months at the time of the rate redetermination by calculating the O&M expenses and taxes associated with Transporter’s ownership, operation and maintenance of the Delivery Facilities (“Applicable O&M + A&G + Taxes Other Than Income”), and increasing the sum of those amounts by ten percent (10%) of the average pre-tax return on the Delivery Facilities during the Primary Term. The rate shall also include the charges resulting from Section 2.2 of this Exhibit “B,” if applicable.

Page 5 of 7 ends

2158

2.2 Capital Replacement and Betterments: The rate to apply following the conclusion of the Primary Term shall be adjusted, if necessary, to provide for payment by shipper for capital replacements and betterments installed after December 31, 2021. The rate shall include amounts reflecting the capital costs of such capital replacements or betterments made to maintain the Delivery Facilities in accordance with applicable safety and regulatory requirements, including recovery of such capital expenditures, ad valorem taxes and an allowance for pre-tax rate of return calculated using Transporter’s then applicable pre-tax rate of return used to establish Transporter’s effective base rates contained in its FERC Gas Tariff. In the event that this Agreement terminates prior to full recovery by Transporter of all of the costs of such capital replacements and betterments, Shipper agrees to reimburse Transporter for the remaining net book value of such facilities, including applicable income taxes, except to the extent that a replacement shipper (or shippers) assumes such obligation.

Page 6 of 7 ends

2159

EXHIBIT “C”

FIRM TRANSPORTATION SERVICE AGREEMENT

CONTRACT NO. 2003

BETWEEN

CITY OF VICTORVILLE

AND

KERN RIVER GAS TRANSMISSION COMPANY

Execution Date of this Exhibit “C”: _________, ____

[
Insert special terms and conditions included in Releasing Shipper’s Offer to Release]

Page 7 of 7 ends

2160

Attachment C
Project Map
2161
NORTH
SCALE: 1"=15'

PROPOSED EASEMENT
2162
Item Number: 20
City Council / Board of Directors
Written Communications
Meeting of: July 16, 2024
Submitted By:

Carmen Cun, Finance Director / City Treasurer

Subject:

Macerich Assistance Payment Year 11 - Mall of Victor Valley Development Agreement Recommendation:

That Your Honorable City Council authorize assistance payment as provided for in the Development Agreement with Macerich Victor Valley LLC in the amount of $360,674 for Calendar Year (CY) 2023.

Fiscal Impact:

This item has a fiscal impact of $360,674 out of the General Fund. There are sufficient funds in the FY 2023-2024 budget for this expense in the account below:

Account Description Available Budget
1000010-52300-97029 General Fund Contract Services - Macerich $480,000.00 Strategic Plan Goal:

This payment aligns with Goal C, Strategy 7 in the City of Victorville Strategic Plan 2023- 2026 by working in partnership with the Mall of Victor Valley by assisting in meeting performance measures to attract new businesses.

Background:

At the City Council meeting of July 17, 2012, the City Council adopted Ordinance 2291 approving a Development Agreement with Macerich Victor Valley LLC, owners of the Mall of Victor Valley (the Mall). The Development Agreement was approved resulting from Council’s recognition that the Mall had experienced declining gross sales since 2007 which directly correlated with a reduction in sales tax generated to the City and available to fund its essential public services, including police and fire. The analysis at that time had shown that gross sales at the Mall had decreased from $175 million in 2006 to $106 million in 2010.
2163
3 6
7 4
Pursuant to the Development Agreement, the Mall is permitted to receive the tier one maximum amount until the $18.89 million threshold is reached. Upon approving the subject Development Agreement, the City required, as a condition to its assistance, that the Mall would perform redevelopment that would reposition the Mall to becoming a destination for the diverse shopping demographics of the valley and keeping it fresh and attractive for future tenants of the Mall. Among the required performance measures, the Mall was required, pursuant to Article 5 of the Development Agreement to: 1. Successfully relocate into expanded space and cause for the public opening of a reformatted JC Penney; 2. Successfully cause for the opening of a new Macy’s as a fashion retail anchor;

3. Complete the remodel of all exterior entry ways; and 4. Sign leases for up to 25,000 square feet of space (that was the former JC Penney anchor pad) with planned occupancy within 9 months from the date of the signed lease.

To assist in off-setting certain costs to achieve the aforementioned performance measures, once those performance measures were achieved, the City agreed to provide assistance payments in annual amounts equal to the sales tax received by the City that is in excess of a baseline to be retained by the City of $1 million. The agreement allows an aggregate collection of up to $18,886,644.00 in payment assistance or for a period of 28 years, whichever occurs first. If the maximum of $18,886,644.00 is not reached by the end of the 28 years, the City of Victorville has reached the conclusion of the assistance agreement and no additional payments will be made. The performance measures were satisfied by the Mall in calendar year 2013, therefore, 2013 became the measurement year where City assistance was to be commenced. Notably, the Mall added Dick’s Sporting Goods to satisfy performance measure #4 and has exceeded the space requirement of the Development Agreement.

Discussion:

City staff employs HDL Companies to conduct sales tax analysis for all tenants at the Mall, including its anchor tenants. In the aggregate, that analysis is represented with the following:

Calendar Year 2023
Sales Tax Generated at Mall of Victor Valley $1,364,674 Sales Tax Threshold ($1,000,000)
Assistance Payments Due (Gross) $364,674
Ex C-10 Contract Maintenance Fee ($ 2,000)
Ex C-11 Sales Tax Analysis Fee ($ 2,000)
Due to Mall of Victor Valley $ 360,674
Attachment A shows the charts provided for in the original agreement which reflects a predicted erosion of Sales Tax as well as Sales Tax Increment Sharing proposal by Macerich Victor Valley LLC. Attachment B shows actual sales tax payments since the start of this development agreement. If approved, this payment will bring the total payments to $3,260,879 of the $18.8 million threshold.
2164
3 6
7 4
Calendar year 2020 shows no payment as the COVID-19 related “stay at home” orders resulted in the shutdown of the mall for a large portion of the year, therefore the sales tax generated at the mall did not exceed the threshold deduction. During calendar year 2021 there was a surprising turn around in spending, which resulted in much larger than previous generation of sales tax and an increased payment to Macerich. Despite the dramatic increase during calendar year 2021, calendar year 2022 and 2023 has decreased due to possible factors such as the rising interest rates, in which, it has impacted consumer spending habits.

Staff remains available for any questions council may have.

Attachments: A. Macerich Development Agreement 2012 Charts B. Payments Distributed to Macerich to Date
2165

ATTACHMENT A
Macerich Development
Agreement 2012 Charts
2166

ATTACHMENT A
The chart below was then presented and summarized the trend line of gross sales at the Mall and the projected downward trend had the City Council chose to not assist. For comparison purposes, had the City chosen not to assist in the redevelopment of the Mall, the Mall was projected in 2014 to realize $88.28 million in gross sales which would have yielded an estimated $882,800 in City sales tax revenue.

Erosi
on of Sales Tax
The chart pr
ovided below was then used to help illustrate, based on Macerich projections, what the sales tax sharing could look like over the next 20 years, though pursuant to the Development Agreement, the Mall is permitted to receive the tier one maximum amount until the $18.89 million threshold is reached.

Sales Ta
x Increment Sharing
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
$200,000,000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Actual Sales
Projected Sales
Linear (Projected Sales)
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Tier One Maximum Amount
Base Sales Tax Revenues
$50.72 million
$88.28 million
$175 million
Projections
total
$18,886,644
over term of
agreement
2167

ATTACHMENT B
Payments distributed to
Macerich to date
2168

ATTACHMENT B

The chart below reflects the distribution of Sales Tax to Macerich since the inception of the Sales Tax Agreement in 2013. There is a steady gain in activity from 2013 until 2016.

This has been followed by several years of decline which have been primarily a loss of sales to online retailers. Total amount paid through 20 22 is $2,900,205.22 and with the approval of council for this payment, the total through 2023 would be $ 3,260,879.22 of the maximum $18.89 million threshold with 17 years remaining in this agreement.

143,159
257,697
320,746
381,979 331,092
310,556
279,157
0 466,859
408,960
360,674
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Sales Tax Distributed to Macerich
2169

THIS PAGE LEFT

BLANK

INTENTIONALLY
2170
Item Number: 21
City Council / Board of Directors
Written Communications
Meeting of: July 16, 2024
Submitted By:

Keith C. Metzler, City Manager

Subject:

Grant of Easement and Agreement – National Railroad Passenger Corporation (“Amtrak”)
Recommendation:

That the Honorable City Council:
(1) Approve the Grant of Easement and Agreement by and between the City of Victorville and Amtrak; and
(2) Authorize the execution thereof by the City Manager.

Fiscal Impact:

There is no fiscal impact associated with this item.

Strategic Plan Goal:

This item aligns with Strategic Plan Goal A, Financial Sustainability by reducing expenses and fostering fiscal health through disciplined long-term planning and Goal E, Invest in Infrastructure by supporting the continued operation of the Victorville Amtrak Station and sustaining a passenger rail transportation center for the City and region.

Background:

On or around June 1990, the City entered into a lease agreement (the “Original Lease”) with the National Railroad Passenger Corporation, more commonly known as Amtrak, to lease a portion of the former Forrest Park Property (the “Property”, APN 0478-172-19).

The leasehold area, referred to as the Amtrak Lease Area, was comprised of ±28,400 square feet for the purposes of constructing and operating a passenger rail service station and shelter known as the “Victorville Amtrak Station”, and parking lot.

The Original Lease provided Amtrak with a ten (10) year term, with four (4) five-year renewal options, and required Amtrak to reimburse the City for its pro-rata share of utilities. The City would be responsible for the maintenance and repair of the shelter, 2171
3 7
0 1
including weed abatement, graffiti removal and related labor costs. The City was also responsible for maintaining all sidewalks, driveways, and the parking lot. Unfortunately, under the Original Lease, there were no provisions for payment of rent by Amtrak.

The Original Lease also required that the City contract with Atchison, Topeka and Santa Fe Railway, now known as Burlington Northern Santa Fe Corporation (“BNSF”), for the use of BNSF’s property which would serve as an easement to the Victorville Amtrak Station. In exchange, BNSF charged the City an annual rent fee, which is currently $12,557. Based on the BNSF Lease the rent increases annually, according to the Consumer Price Index, which has been averaging ±3%. Attachment A depicts the Forrest Park Property, the location of the Victorville Amtrak Station, and the easements.

In July 2006, the City and Amtrak amended the Original Lease to reduce Amtrak’s Lease Area from ±28,400 to ±3,790 square feet. Subsequently, in August 2008, the former Victorville Redevelopment Agency (the “RDA”) purchased the Property from the City as the property was becoming an area for illegal activity, nuisance, and blight. As the RDA was conducting a land assembly in Old Town, for the revitalization of the area, staff believed that transferring the Property to the RDA could allow for an opportunity to address the issues at the Property. Upon transferring title of the Property to the RDA, the administration of the Original Lease and use of the Property was transferred to the RDA through the execution of a Second Amendment to the Original Lease. The Second Amendment also extended Amtrak’s term until June 2015. However, as a result of the dissolution of the redevelopment agencies throughout the State of California, title to the Forrest Park Property was transferred back to the City in August of 2021.

Discussion:

In May 2018, the need to update Amtrak’s Lease beyond its expiration of June 2015 arose, as the U.S. Department of Justice (“DOJ”) initiated an inquiry as to the adequacy of and responsibility for making various Americans with Disabilities Act (“ADA”) improvements to the Victorville Amtrak Station. Around December 2020, the DOJ filed a complaint against Amtrak to enforce ADA improvements with respect to various passenger rail station facilities across the nation, including the Victorville Amtrak Station.

Shortly after the complaint was filed by the DOJ, Amtrak and City staff initiated negotiations to formalize a new lease, as the previous agreement had expired, which would include the reduction of expenses incurred by the City and would allow Amtrak to make the necessary ADA improvements. However, as the revitalization of Old Town remains a priority, City staff determined that providing Amtrak with an easement agreement would provide greater benefits including satisfying Amtrak’s need to lease a portion of the Property, and allowing for the ADA improvements, but would also allow the City to identify a future use and user for the remainder portion of the Property. Additionally, the City would be able to terminate the BNSF Lease as Amtrak would retain an easement directly with BNSF, no longer requiring the City to maintain a lease on Amtrak’s behalf.

Therefore, staff has worked with the City’s legal counsel by preparing the attached Grant of Easement and Agreement for your review and consideration. 2172
3 7
0 1
The Grant of Easement and Agreement, Attachment B, between the City of Victorville (“Grantor”) and National Railroad Passenger Corporation (“Grantee”), provides the Grantee with an exclusive parking easement and a non-exclusive access easement over and across the northern side of the former Forrest Park Property. The exclusive parking easement will be for Amtrak’s customers and visitors, allowing them to have parking access to the Victorville Amtrak Station, and the non-exclusive easement will serve as a common access or roadway easement for Amtrak and any future user of the Forrest Park Property.

As the Grantee to the exclusive parking easement, Amtrak will be able to make the ADA improvements to the Victorville Amtrak Station and will be required to maintain this area without the support of the City. The City shall remain responsible for the non-exclusive easement area, which includes routine road maintenance and repairs when necessary.

Part of the significant terms included in the Grant of Easement and Agreement includes Amtrak maintaining standard insurance and liability coverages to protect the City and it’s entities against damages caused by Amtrak or its contractors, agents, etc., and allowing the Grantor to terminate its exclusive parking easement any time after non-use for a continuous twelve (12) months, and reverting this portion back to the City through the execution of a quitclaimed deed.

This Grant of Easement and Agreement will significantly reduce the costs associated with the maintenance of the Victorville Amtrak Station, an annual savings calculated at approximately $39,209. Once the Grant of Easement and Agreement is recorded, Amtrak can then make the necessary ADA improvements at the Victorville Amtrak Station.

Staff is seeking that the Honorable City Council approve the Grant of Easement and Agreement by and between the City of Victorville and Amtrak, and execution thereof by the City Manager, and upon approval will record the Grant of Easement and Agreement with the San Bernardino County Assessor-Recorder’s Office.

Staff remains available for any questions you may have.

Attachments: A. Former Forrest Park Property
B. Grant of Easement and Agreement
2173

ATTACHMENT A

FORMER FORREST PARK PROPERTY
2174

FORREST PARK PROPERTY

VICTORVILLE AMTRAK STATION

EXCLUSIVE PARKING EASEMENT

NON-EXCLUSIVE ACCESS EASEMENT
APN 0478-172-19
“D” STREET
2175

ATTACHMENT B

GRANT OF EASEMENT AND AGREEMENT
2176
Recording Requested By
and When Recorded Mail to:

City of Victorville
14343 Civic Drive
Victorville, CA 92392
Attn: Economic Development Dept.

GRANT OF EASEMENT AND AGREEMENT
No recording fee pursuant to Government Code §6103
THIS GRANT OF EASEMENT AND AGREEMENT ("Agreement"), made this __ _____ day of -------� 2024 ("Effective Date"), by and between CITY OF

VICTORVILLE,
California a municipal corporation, hereinafter referred to as "Grantor", and NATIONAL RAILROAD PASSENGER CORPORATION, a corporation organized under 49 U.S.C §24101 et seq. and the laws of the District of Columbia, hereinafter referred to as "Grantee".

WHEREAS, Grantor owns that certain parcel of real property located in the City of Victorville, San Bernardino County, California located at 16858 D Street, Victorville, CA 92395, which
property is commonly known as APN No. 0478-172-19 (the "Land"), being more particularly shown on Exhibit "A-1", attached hereto and made a part hereof; and WHEREAS, Grantor and Grantee previously entered into a lease agreement (as amended, "Lease"), providing for Grantee's lease of certain property owned by Grantor for Grantee's use for parking and required ingress and egress to the parking at the passenger rail station; and WHEREAS, the Lease has expired, and Grantee desires to acquire certain easements in a portion of the Land for Grantee's continued use of parking for the passenger rail station including ingress and egress thereto.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree to incorporate the above Recitals in this Agreement and further agree as follows:

1. Easements:
(a) Grantor hereby grants to Grantee an exclusive parking easement ("Parking Easement") over, under, across, through and upon the parking easement area located as shown on Exhibit "A-2" attached hereto and incorporated herein by this reference (the "Parking Easement Area") to be used exclusively by Grantee for the purpose of providing parking for Grantee's personnel and visitors at the passenger rail station, including the right to use, occupy and maintain the Parking Easement Area for the benefit of Grantee's operations and related activities.
(b) Grantor hereby grants to Grantee a non-exclusive access easement ("Access Easement") over, across, through and upon the access easement area located as described 2177
2178
2179
2180
2181
2182
2183
2184
2185
2186
Item Number: 22
City Council / Board of Directors
Written Communications
Meeting of: July 16, 2024
Submitted By:

Robert Clemmer, Fire Chief

Subject:

Purchase of a Tactical Water Tender
Recommendation:

That the Honorable City Council approve the purchase of Tactical Water Tender in the amount of $509,431.71.

Fiscal Impact:

This purchase was included in the Fiscal Year 2024-2025 budget under line Measure P- Tactical Water Tender, account no. 1052010-55045-96136. No additional appropriations are needed.

Strategic Plan Goal:

This item aligns with Strategic Plan Goal B, Public Safety – Implement public safety strategies to support a thriving and growing community. The benefit of this improved resource will ensure we are supporting the wildland urban interface more efficiently throughout the city and reduce resource commitment times on incidents.

Background:

A Tactical Water Tender is a 1000 plus gallon apparatus typically used for vegetation and wildland firefighting but can also be used for structure firefighting. The purchase of this 1800-gallon Water Tender will ensure we are able to support firefighting activities in areas absence of a dedicated water source (fire hydrant). Fire incidents on the roadway involving cargo, and large commercial vehicles require several thousand gallons of water to extinguish. Our current Tactical Water Tender, WT311, is a 1996 International truck/tank, which is due for replacement after 28 years of service.

Discussion:

The Fire Department is seeking approval for the purchase of a Tactical Water Tender from South Coast Fire Equipment (South Coast). South Coast will soon be receiving a 2187
3 7
0 5
Pierce Tactical Water Tender demo model that is currently being built. There is an opportunity for the Victorville Fire Department to purchase the Tactical Water Tender demo model which fits our needs and receive it within an 8-to-12-month time frame. In order to take advantage of this opportunity, we need to contact South Coast and notify them of our intent to purchase the demo Tactical Water Tender model as soon as possible before another agency makes an offer. In the instance we do not purchase the Pierce demo model, we would purchase a new build out which can take about 22-24 months to be delivered. South Coast has a cooperative agreement with Houston-Galveston Area Council (H-GAC) Cooperative Purchasing Program, HGACBuy. The information was submitted and confirmed by the Purchasing Division of the Finance Department.

Purchases through a cooperative purchasing agreement are allowed in accordance with section 2.28.120 of the Victorville Municipal Code.

Staff is available to answer any questions the Council may have.

Attachments: A. Quote from South Coast Fire Equipment
B. Cooperative Agreement
2188
Attachment A
Quote from South Coast Fire Equipment
2189
Extension
( 1 )
466,591.00$
Sales Tax @ 8.750% 40,826.71$
507,417.71$
Performance Bond -$
California Tire Fee 14.00$
Consortium Fee HGAC Fee 2,000.00$
509,431.71$
The above proposal price shall be valid until or extended in writing by South Coast Fire Equipment.

Said apparatus and equipment are to be built by the manfacturer and shipped in accordance with the specifications hereto attached, delays due to strikes, war or international conflict, failures to obtain chassis, materials, inability to obtain labor, supplies or manufacturing facilities, epidemics, acts of God, or causes beyond our control not preventing, delivery would be 22-24 months after receipt of this order and acceptance thereof at our office in Corona, California, and deliver to you at The specifications herein contained shall form a part of the final contract and are subject to changes desired by the purchaser, provided such alterations are interlined prior to the acceptance by the company of the order to purchase, and provided such alterations do not materially affect If the customer so desires to purchase the Product described in the Proposal and the attached specifications, prior to the expiration date listed above, the Customer shall sign and return this proposal. The Customer can then provide their choice of document for entering into the agreement by providing a Purchase Order, or signing a Contract with South Coast Fire Equipment, 3150 Palisades Dr. Corona, CA 82878 as the seller.

Victorville, CA.

APPARATUS COST WITH TAX

14.00$
Not Required
507,417.71$
509,431.71$
2,000.00$
08/04/24
Payment Terms - Payment is due of the Total Purchase Price at time of delivery. Changes to the specifications since the time of order can added to the Total Purchase Price or invoiced on a separate invoice. The final sales tax amount will be determined at time of delivery based on the tax rate at that time. A increase or decrease in cost will be reflected on the final invoice.

If the customer would desire to pay for the apparatus within 15 days of the purchase order being accepted the Total Purchase Price would be reduced to $509,431.71
14343 Civic Center Drive
. The buyer must make the payment
within 15 days to obtain the full discount. Payments not received with in the 15 days are subject to an adjustment to the Total Purchase Price for the prepayment. 466,591.00$
Stock #3493 Tactical Water Tender based on
Murrieta as per enclosed proposal for
delivery sum of
40,826.71$
-$

TOTAL PURCHASE PRICE

PROPOSAL FOR FURNISHING FIRE APPARATUS
for final acceptance by South Coast Fire Equipment, Inc., at its corporate office in Corona, California, Each
June 4, 2024

VICTORVILLE FIRE DEPARTMENT
The undersigned is prepared to provide for you, our customer, upon an order being placed by you, the apparatus and equipment herein named and for the following prices:

Victorville, CA. 92392
2190
the cost of the construction of the apparatus.

The proposal for fire apparatus conforms with all Federal Department of Transportation (DOT) rules and regulations in effect at the time of bid, and with all National Fire Protection Association (NFPA) guidelines for Automotive Fire Apparatus as published at time of bid, except as modified by customer specifications. Any increased costs incurred by the first party because of future changes in or additions to said DOT or NFPA standards will be passed along to the customer as an addition to the price set forth above. Unless accepted within 30 days from the specified date, the right is reserved to withdraw this proposition.

Respectfully Submitted,
South Coast Fire Equipment, Inc.

Sales Representative Signature:____________________________________ Title:_______________ Date:____________________
Due to global supply chain constraints, any delivery date contained herein is a good faith estimate as of the date of this order/contract, and merely an approximation based on current information. Delivery updates will be made available, and a final firm delivery date will be provided as soon as possible.

Persistent Inflationary Environment: If the Producer Price Index of Components for Manufacturing (www.bls.gov Series ID: WPUID6112) ("PPI") has increased at a compounded annual growth rate of 5.0% or more between the month Pierce accepts the order (Order Month") and a month 14 months prior to the then predicted Ready For Pickup date ("Evalution Month"), then pricing may be updated in an amount equal to the increase in PPI over 5.0% for each year or fractional year between the Order Month and the Evaluation Month.

I, ___________________ authorized representative of
________________________ agrees to purchase the
proposed product(s) and agree to the terms and conditions of this proposal and the specifications hereto attached.

The Seller will document any such updated price for the customer's approval before proceeding and provide an option to cancel the order without charge if the updated price is not accepted.

Tim Olley
Force Majeure - South Coast Fire Equipment shall not be responsible nor deemed to be in default on accountof delays in performance due to causes which are beyond the seller's and manufacturer's control and make the seller's performance impracticable, including but not limited to wars, insurrections, strikes, riots, fires, storms, floods, other acts of nature, explosions, earthquakes, accidents, any act of government, delays in transportation, inability to obtain necessary labor supplies or manufacturing facilities, allocation regulations or orders affecting materials, equipment, facilities or completed products, failure to obtain any required license or certificates, acts of God or the public enemy or terrorisim, failure of transportation, epidemics, quarantine restrictions, failure of vendors (due to causes similiar to those within the scope of the clause) to perform their contracts or labor troubles causing cessation, slowdow, or interruption of work. 2191

Attachment B
Cooperative Agreement
2192
H-GAC
Houston-Galveston Area Council
P.O. Box 22777 · 3555 Timmons · Houston, Texas 77227-2777 Cooperative Agreement - Contract - South Coast Fire Equipment, Inc. - Public Services - ID: 11606 - - FS12-23

Page 1 of 13 ends

MASTER GENERAL PROVISIONS

This Master Agreement is made and entered into, by and between the Houston-Galveston Area Council hereinafter referred to as H-GAC having its principal place of business at 3555 Timmons Lane, Suite 120, Houston, Texas 77027 and South Coast Fire Equipment, Inc., hereinafter referred to as the Contractor, having its principal place of business at 2020 South Baker Avenue, Ontario, CA 91761.

WITNESSETH:

WHEREAS, H-GAC hereby engages the Contractor to perform certain services in accordance with the specifications of the Master Agreement; and

WHEREAS, the Contractor has agreed to perform such services in accordance with the specifications of the Master Agreement;

NOW, THEREFORE, H-GAC and the Contractor do hereby agree as follows:

ARTICLE 1: LEGAL AUTHORITY
The Contractor warrants and assures H-GAC that it possesses adequate legal authority to enter into this Master Agreement. The Contractor's governing body, where applicable, has authorized the signatory official(s) to enter into this Master Agreement and bind the Contractor to the terms of this Master Agreement and any subsequent amendments hereto.

ARTICLE 2: APPLICABLE LAWS
The Contractor agrees to conduct all activities under this Master Agreement in accordance with all federal laws, executive orders, policies, procedures, applicable rules, regulations, directives, standards, ordinances, and laws, in effect or promulgated during the term of this Master Agreement, including without limitation, workers’ compensation laws, minimum and maximum salary and wage statutes and regulations, and licensing laws and regulations. When required, the Contractor shall furnish H-GAC with satisfactory proof of its compliance therewith.

ARTICLE 3: PUBLIC INFORMATION
Except as stated below, all materials submitted to H-GAC, including any attachments, appendices, or other information submitted as a part of a submission or Master Agreement, are considered public information, and become the property of H-GAC upon submission and may be reprinted, published, or distributed in any manner by H-GAC according to open records laws, requirements of the US Department of Labor and the State of Texas, and H-GAC policies and procedures. In the event the Contractor wishes to claim portions of the response are not subject to the Texas Public Information Act, it shall so; however, the determination of the Texas Attorney General as to whether such information must be disclosed upon a public request shall be binding on the Contractor. H-GAC will request such a determination only if Contractor bears all costs for preparation of the submission. H-GAC is not responsible for the return of creative examples of work submitted. H-GAC will not be held accountable if material from submissions is obtained without the written consent of the contractor by parties other than H-GAC, at any time during the evaluation process.

ARTICLE 4: INDEPENDENT CONTRACTOR
The execution of this Master Agreement and the rendering of services prescribed by this Master Agreement do not change the independent status of H-GAC or the Contractor. No provision of this Master Agreement or act of H- GAC in performance of the Master Agreement shall be construed as making the Contractor the agent, servant, or employee of H-GAC, the State of Texas, or the United States Government. Employees of the Contractor are DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2193

Page 2 of 13 ends

subject to the exclusive control and supervision of the Contractor. The Contractor is solely responsible for employee related disputes and discrepancies, including employee payrolls and any claims arising therefrom.

ARTICLE 5: ANTI-COMPETITIVE BEHAVIOR
Contractor will not collude, in any manner, or engage in any practice which may restrict or eliminate competition or otherwise restrain trade.

ARTICLE 6: SUSPENSION AND DEBARMENT
Debarment and Suspension (Executive Orders 12549 and 12689) – A contract award (2 CFR 180.220) must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR Part 1966 Comp. p. 189) and 12689 (3 CFR Part 1989 Comp. p. 235), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549.

Pursuant to the Federal Rule above, Respondent certifies that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation by any federal department or agency or by the State of Texas and at all times during the term of the Contract neither it nor its principals will be debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation by any federal department or agency or by the State of Texas Respondent shall immediately provide the written notice to H-GAC if at any time the Respondent learns that this certification was erroneous when submitted or has become erroneous by reason of changed circumstances. H-GAC may rely upon a certification of the Respondent that the Respondent is not debarred, suspended, ineligible, or voluntarily excluded from the covered contract, unless the H-GAC knows the certification is erroneous.

ARTICLE 7: GOAL FOR CONTRACTING WITH SMALL AND MINORITY BUSINESSES, WOMEN’S BUSINESS ENTERPRISES, AND LABOR SURPLUS AREA FIRMS (if subcontracts are to be let) H-GAC’s goal is to assure that small and minority businesses, women's business enterprises, and labor surplus area firms are used when possible in providing services under a contract. In accordance with federal procurements requirements of 2 CFR §200.321, if subcontracts are to be let, the prime contractor must take the affirmative steps listed below:

1. Placing qualified small and minority businesses and women’s business enterprises on solicitation lists;

2. Assuring that small and minority businesses and women’s business enterprises are solicited whenever they are potential sources;

3. Dividing total requirements, when economically feasible, into smaller task or quantities to permit maximum participation by small and minority businesses, and women’s business enterprises;

4. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, and women’s business enterprises;

5. Using the services and assistance as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce.

6. Nothing in this provision will be construed to require the utilization of any firm that is either unqualified or unavailable. The Small Business Administration (SBA) is the primary reference and database for information on requirements related to Federal Subcontracting https://www.sba.gov/federal-contracting/contracting-guide/prime- subcontracting

NOTE: The term DBE as used in this solicitation is understood to encompass all programs/business enterprises such as: Small Disadvantaged Business (SDB), Historically Underutilized Business (HUB), Minority Owned Business Enterprise (MBE), Women Owned Business Enterprise (WBE) and Disabled Veteran Business Enterprise (DVBE) or other designation as issued by a certifying agency.

Contractor agrees to work with and assist HGACBuy customer in meeting any DBE targets and goals, as may be required by any rules, processes, or programs they might have in place. Assistance may include compliance with reporting requirements, provision of documentation, consideration of Certified/Listed subcontractors, provision of documented evidence that an active participatory role for a DBE entity was DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2194

Page 3 of 13 ends

considered in a procurement transaction, etc.

ARTICLE 8: SCOPE OF SERVICES
The services to be performed by the Contractor are outlined in an Attachment to this Master Agreement.

ARTICLE 9: PERFORMANCE PERIOD
This Master Agreement shall be performed during the period which begins Dec 01 2023 and ends Nov 30 2027.

All services under this Master Agreement must be rendered within this performance period, unless directly specified under a written change or extension provisioned under Article 21, which shall be fully executed by both parties to this Master Agreement.

ARTICLE 10: PAYMENT OR FUNDING
Payment provisions under this Master Agreement are outlined in the Special Provisions. H-GAC will not pay for any expenses incurred prior to the execution date of a contract, or any expenses incurred after the termination date of the contract.

ARTICLE 11: PAYMENT FOR WORK
The H-GAC Customer is responsible for making payment to the Contractor upon delivery and acceptance of the goods or completion of the services and submission of the subsequent invoice.

ARTICLE 12: PAYMENT TERMS/PRE-PAYMENT/QUANTITY DISCOUNTS If discounts for accelerated payment, pre-payment, progress payment, or quantity discounts are offered, they must be clearly indicated in the Contractor’s submission prior to contract award. The applicability or acceptance of these terms is at the discretion of the Customer.

ARTICLE 13: REPORTING REQUIREMENTS
If the Contractor fails to submit to H-GAC in a timely and satisfactory manner any report required by this Master Agreement, or otherwise fails to satisfactorily render performances hereunder, H-GAC may terminate this Master Agreement with notice as identified in Article 29 of these General Provisions. H-GAC has final determination of the adequacy of performance and reporting by Contractor. Termination of this Master Agreement for failure to perform may affect Contractor’s ability to participate in future opportunities with H-GAC. The Contractor's failure to timely submit any report may also be considered cause for termination of this Master Agreement. Any additional reporting requirements shall be set forth in the Special Provisions of this Master Agreement.

ARTICLE 14: INSURANCE
Contractor shall maintain insurance coverage for work performed or services rendered under this Master Agreement as outlined and defined in the attached Special Provisions.

ARTICLE 15: SUBCONTRACTS AND ASSIGNMENTS
Except as may be set forth in the Special Provisions, the Contractor agrees not to assign, transfer, convey, sublet, or otherwise dispose of this Master Agreement or any right, title, obligation, or interest it may have therein to any third party without prior written approval of H-GAC. The Contractor acknowledges that H-GAC is not liable to any subcontractor or assignee of the Contractor. The Contractor shall ensure that the performance rendered under all subcontracts shall result in compliance with all the terms and provisions of this Master Agreement as if the performance rendered was rendered by the Contractor. Contractor shall give all required notices, and comply with all laws and regulations applicable to furnishing and performance of the work. Except where otherwise expressly required by applicable law or regulation, H-GAC shall not be responsible for monitoring Contractor's compliance, or that of Contractor’s subcontractors, with any laws or regulations.

ARTICLE 16: AUDIT
Notwithstanding any other audit requirement, H-GAC reserves the right to conduct or cause to be conducted an independent audit of any transaction under this Master Agreement, such audit may be performed by the H-GAC local government audit staff, a certified public accountant firm, or other auditors designated by H-GAC and will be DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2195

Page 4 of 13 ends

conducted in accordance with applicable professional standards and practices. The Contractor understands and agrees that the Contractor shall be liable to the H-GAC for any findings that result in monetary obligations to H- GAC.

ARTICLE 17: TAX EXEMPT STATUS
H-GAC and Customer members are either units of government or qualified non-profit agencies, and are generally exempt from Federal and State sales, excise or use taxes. Respondent must not include taxes in its Response. It is the responsibility of Contractor to determine the applicability of any taxes to an order and act accordingly.

Exemption certificates will be provided upon request.

ARTICLE 18: EXAMINATION OF RECORDS
The Contractor shall maintain during the course of the work complete and accurate records of all of the Contractor's costs and documentation of items which are chargeable to H-GAC under this Master Agreement. H- GAC, through its staff or designated public accounting firm, the State of Texas, and United States Government, shall have the right at any reasonable time to inspect, copy and audit those records on or off the premises by authorized representatives of its own or any public accounting firm selected by H-GAC. The right of access to records is not limited to the required retention period, but shall last as long as the records are retained. Failure to provide access to records may be cause for termination of the Master Agreement. The records to be thus maintained and retained by the Contractor shall include (without limitation): (1) personnel and payroll records, including social security numbers and labor classifications, accounting for total time distribution of the Contractor's employees working full or part time on the work, as well as cancelled payroll checks, signed receipts for payroll payments in cash, or other evidence of disbursement of payroll payments; (2) invoices for purchases, receiving and issuing documents, and all other unit inventory records for the Contractor's stocks or capital items; and (3) paid invoices and cancelled checks for materials purchased and for subcontractors' and any other third parties' charges.

Contractor agrees that H-GAC will have the right, with reasonable notice, to inspect its records pertaining to purchase orders processed and the accuracy of the fees payable to H-GAC. The Contractor further agrees that the examination of records outlined in this article shall be included in all subcontractor or third-party Master Agreements.

ARTICLE 19: RETENTION OF RECORDS
The Contractor and its subcontractors shall maintain all records pertinent to this Master Agreement, and all other financial, statistical, property, participant records, and supporting documentation for a period of no less than seven (7) years from the later of the date of acceptance of the final payment or until all audit findings have been resolved.

If any litigation, claim, negotiation, audit or other action involving the records has been started before the expiration of the retention period, the records shall be retained until completion of the action and resolution of all issues which arise from it, or until the end of the seven (7) years, whichever is later, and until any outstanding litigation, audit, or claim has been fully resolved.

ARTICLE 20: DISTRIBUTORS, VENDORS, RESELLERS
Contractor agrees and acknowledges that any such designations of distributors, vendors, resellers or the like are for the convenience of the Contractor only and the awarded Contractor will remain responsible and liable for all obligations under the Contract and the performance of any designated distributor, vendor, reseller, etc. Contractor is also responsible for receiving and processing any Customer purchase order in accordance with the Contract and forwarding of the Purchase Order to the designated distributor, vendor, reseller, etc. to complete the sale or service.

H-GAC reserves the right to reject any entity acting on the Contractor’s behalf or refuse to add entities after a contract is awarded.

ARTICLE 21: CHANGE ORDERS AND AMENDMENTS
A. Any alterations, additions, or deletions to the terms of this Master Agreement, which are required by changes in federal or state law or by regulations, are automatically incorporated without written amendment hereto, and shall become effective on the date designated by such law or by regulation.

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2196

Page 5 of 13 ends

B. To ensure the legal and effective performance of this Master Agreement, both parties agree that any amendment that affects the performance under this Master Agreement must be mutually agreed upon and that all such amendments must be in writing. After a period of no less than 30 days subsequent to written notice, unless sooner implementation is required by law, such amendments shall have the effect of qualifying the terms of this Master Agreement and shall be binding upon the parties as if written herein.

C. Customers have the right to issue a change order to any purchase orders issued to the Contractor for the purposes of clarification or inclusion of additional specifications, qualifications, conditions, etc. The change order must be in writing and agreed upon by Contractor and the Customer agency prior to issuance of any Change Order. A copy of the Change Order must be provided by the Contractor to, and acknowledged by, H-GAC.

ARTICLE 22: CONTRACT ITEM CHANGES
A. If a manufacturer discontinues a contracted item, that item will automatically be considered deleted from the contract with no penalty to Contractor. However, H-GAC may at its sole discretion elect to make a contract award to the next lowest Respondent for the item, or take any other action deemed by H-GAC, at its sole discretion, to be in the best interests of its Customers.

B. If a manufacturer makes any kind of change in a contracted item which affects the contract price, Contractor must advise H-GAC of the details. H-GAC may allow or reject the change at its sole discretion.

If the change is rejected, H-GAC will remove the item from its program and there will be no penalty to Contractor. However, H- GAC may at its sole discretion elect to make a contract award to the next lowest Respondent for the item, or take any other action deemed by H-GAC, at its sole discretion, to be in the best interests of its Customers.

C. If a manufacturer makes any change in a contracted item which does not affect the contract price, Contractor shall advise H-GAC of the details. If the 'new' item is equal to or better than the originally contracted item, the 'new' item shall be approved as a replacement. If the change is rejected H-GAC will remove the item from its program and there will be no penalty to Contractor. However, H-GAC may at its sole discretion elect to make a contract award to the next lowest Respondent for the item or may take any other action deemed by H-GAC at its sole discretion, to be in the best interests of its Customers.

D. In the case of specifically identified catalogs or price sheets which have been contracted as base bid items or as published options, routine published changes to products and pricing will be automatically incorporated into the contract. However, Contractor must still provide written notice and an explanation of the changes to products and pricing. H-GAC will respond with written approval.

ARTICLE 23: CONTRACT PRICE ADJUSTMENTS
Price Decreases
If Contractor’s Direct Cost decreases at any time during the full term of this award, Contractor must immediately pass the decrease on to H-GAC and lower its prices by the amount of the decrease in Direct Cost. (Direct Cost means Contractor’s cost from the manufacturer of any item or if Contractor is the manufacturer, the cost of raw materials required to manufacture the item, plus costs of transportation from manufacturer to Contractor and Contractor to H-GAC. Contractor must notify H-GAC of price decreases in the same way as for price increases set out below. The price decrease shall become effective upon H-GAC’s receipt of Contractor’s notice. If Contractor routinely offers discounted contract pricing, H-GAC may request Contractor accept amended contract pricing equivalent to the routinely discounted pricing.

Price Increase
Contractors may request a price increase for items priced as Base Bid items and Published Options. The amount of any increase will not exceed actual documented increase in Contractor’s Direct Cost and will not exceed 10% of DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2197

Page 6 of 13 ends

the previous bid price. Considerations on the percentage limit will be given if the price increase is the result of increased tariff charges or other governmental actions, or other economic factors. Manufacturer price/contract changes involving the sale of motor vehicles will be considered and may be allowed during the entire contract period subject to submission and verification of the proper documentation required for a contract change as referenced in this section.

Price Changes
Any permanent increase or decrease in offered pricing for a base contract item or published option is considered a price change. Temporary increases in pricing by whatever name (e.g., ‘surcharge’, ‘adjustment’, ‘equalization charge’, ‘compliance charge’, ‘recovery charge’, etc.), are also considered to be price changes.

For published catalogs and price sheets as part of an H-GAC contract, requests to amend the contract to reflect any new published catalog or price sheet must be submitted whenever the manufacturer publishes a new document.

The request must include the new catalog or price sheet. All Products shall, at time of sale, be equipped as required under any then current applicable local, state, and federal government requirements. If, during any contract, changes are made to any government requirements which cause a manufacturer's costs of production to increase, Contractor may increase pricing to the extent of Contractor’s actual cost increase. The increase must be substantiated with support documentation acceptable to H-GAC prior to taking effect. Modifications to a Product required to comply with such requirements which become effective after the date of any sale are the responsibility of the Customer.

Requesting Price Increase/Required Documentation
Contractor must submit a written overview of changes requested and reasons for the request, stating the amount of the increase, along with an itemized list of any increased prices, showing the Contractor’s current price, revised price, the actual dollar difference and the percentage of the price increase by line item. Price change requests must be supported with substantive documentation (e.g., notices from suppliers and manufacturers of pricing changes in products, components, transportation, raw materials or commodities, and/or product availability, copies of invoices from suppliers, etc.) clearly showing that Contractor's actual costs have increased per the applicable line-item bid.

The Producer Price Index (PPI) may be used as partial justification, subject to approval by H-GAC, but no price increase based solely on an increase in the PPI will be allowed. This documentation should be submitted in Excel format to facilitate analysis and updating of the website. The letter and documentation must be sent to Lead Program Coordinator, [email protected].

Review/Approval of Requests
If H-GAC approves the price increase, Contractor will be notified in writing; no price increase will be effective until Contractor receives this notice. If H-GAC does not approve Contractor’s price increase, Contractor may terminate its performance upon sixty (60) days advance written notice to H-GAC, however Contractor must fulfill any outstanding Purchase Orders. Termination of performance is Contractor’s only remedy if H-GAC does not approve the price increase. H-GAC reserves the right to accept or reject any price change request.

ARTICLE 24: DELIVERIES AND SHIPPING TERMS
The Contractor agrees to make deliveries only upon receipt of authorized Customer Purchase Order acknowledged by H-GAC. Delivery made without such Purchase Order will be at Contractor’s risk and will leave H-GAC the option of canceling any contract awarded to the Contractor. The Contractor must secure and deliver any item within five (5) working days, or as agreed to on any corresponding customer Purchase Order.

Shipping must be Freight On Board Destination to the delivery location designated on the Customer purchase order. The Contractor will retain title and control of all goods until delivery is completed and the Customer has accepted the delivery. All risk of transportation and all related charges are the responsibility of the Contractor. The Customer will notify the Contractor and H-GAC promptly of any damaged goods and will assist the Contractor in arranging for inspection. The Contractor must file all claims for visible or concealed damage. Unless otherwise stated in the Master Agreement, deliveries must consist only of new and unused merchandise.

ARTICLE 25: RESTOCKING (EXCHANGES AND RETURNS)
There will be no restocking charge to the Customer for return or exchange of any item purchased under the terms of any award. If the Customer wishes to return items purchased under an awarded contract, the Contractor agrees DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2198

Page 7 of 13 ends

to exchange, these items for other items, with no additional charge incurred. Items must be returned to Contractor within thirty (30) days from date of delivery. If there is a difference in price in the items exchanged, the Contractor must notify H-GAC and invoice Customer for increase price or provide the Customer with a credit or refund for any decrease in price per Customer’s preference. On items returned, a credit or cash refund will be issued by the Contractor to Customer. This return and exchange option will extend for thirty (30) days following the expiration of the term of the Contract. All items returned by the Customer must be unused and in the same merchantable condition as when received. Items that are special ordered may be returned only upon approval of the Contractor.

ARTICLE 26: MANUALS
Each product delivered under contract to any Customer must be delivered with at least one (1) copy of a safety and operating manual and any other technical or maintenance manual. The cost of the manual(s) must be included in the price for the Product offered.

ARTICLE 27: OUT OF STOCK, PRODUCT RECALLS, AND DISCONTINUED PRODUCTS H-GAC does NOT purchase the products sold pursuant to a Solicitation or Master Agreement. Contractor is responsible for ensuring that notices and mailings, such as Out of Stock or Discontinued Notices, Safety Alerts, Safety Recall Notices, and customer surveys, are sent directly to the Customer with a copy sent to H-GAC.

Customer will have the option of accepting any equivalent product or canceling the item from Customer’s Purchase Order. Contractor is not authorized to make substitutions without prior approval.

ARTICLE 28: WARRANTIES, SALES, AND SERVICE
Warranties must be the manufacturer's standard and inclusive of any other warranty requirements stated in the Master Agreement; any warranties offered by a dealer will be in addition to the manufacturer’s standard warranty and will not be a substitute for such. Pricing for any product must be inclusive of the standard warranty.

Contractor is responsible for the execution and effectiveness of all product warranty requests and any claims, Contractor agrees to respond directly to correct warranty claims and to ensure reconciliation of warranty claims that have been assigned to a third party.

ARTICLE 29: TERMINATION PROCEDURES
The Contractor acknowledges that this Master Agreement may be terminated for Convenience or Default.

H-GAC will not pay for any expenses incurred after the termination date of the contract.

A. Convenience
H-GAC may terminate this Master Agreement at any time, in whole or in part, with or without cause, whenever H-GAC determines that for any reason such termination is in the best interest of H-GAC, by providing written notice by certified mail to the Contractor. Upon receipt of notice of termination, all services hereunder of the Contractor and its employees and subcontractors shall cease to the extent specified in the notice of termination.

The Contractor may cancel or terminate this Master Agreement upon submission of thirty (30) days written notice, presented to H-GAC via certified mail. The Contractor may not give notice of cancellation after it has received notice of default from H-GAC.

B. Default
H-GAC may, by written notice of default to the Contractor, terminate the whole or any part of the Master Agreement, in any one of the following circumstances:
(1) If the Contractor fails to perform the services herein specified within the time specified herein or any extension thereof; or
(2) If the Contractor fails to perform any of the other provisions of this Master Agreement for any reason whatsoever, or so fails to make progress or otherwise violates the Master Agreements that completion of services herein specified within the Master Agreement term is significantly endangered, and in either of these two instances does not cure such failure within a period of ten (10) days (or such longer period of time as may be authorized by H-GAC in writing) after receiving written notice by certified mail of default from H-GAC.

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2199

Page 8 of 13 ends

(3) In the event of such termination, Contractor will notify H-GAC of any outstanding Purchase Orders and H-GAC will consult with the End User and notify the Contractor to what extent the End User wishes the Contractor to complete the Purchase Order. If Contractor is unable to do so, Contractor may be subject to a claim for damages from H-GAC and/or the End User.

ARTICLE 30: SEVERABILITY
H-GAC and Contractor agree that should any provision of this Master Agreement be determined to be invalid or unenforceable, such determination shall not affect any other term of this Master Agreement, which shall continue in full force and effect.

ARTICLE 31: FORCE MAJEURE
To the extent that either party to this Master Agreement shall be wholly or partially prevented from the performance of any obligation or duty placed on such party by reason of or through strikes, stoppage of labor, riot, fire, flood, acts of war, insurrection, accident, order of any court, act of God, or specific cause reasonably beyond the party's control and not attributable to its neglect or nonfeasance, in such event, the time for the performance of such obligation or duty shall be suspended until such disability to perform is removed. Determination of force majeure shall rest solely with H-GAC.

ARTICLE 32: CONFLICT OF INTEREST
No officer, member or employee of the Contractor or Contractors subcontractor, no member of the governing body of the Contractor, and no other public officials of the Contractor who exercise any functions or responsibilities in the review or Contractor approval of this Master Agreement, shall participate in any decision relating to this Master Agreement which affects his or her personal interest, or shall have any personal or pecuniary interest, direct or indirect, in this Master Agreement.

A. Conflict of Interest Questionnaire: Chapter 176 of the Texas Local Government Code requires contractors contracting or seeking to contract with H-GAC to file a conflict-of-interest questionnaire (CIQ) if they have an employment or other business relationship with an H-GAC officer or an officer’s close family member.

The required questionnaire and instructions are located on the H-GAC website or at the Texas Ethics Commission website https://www.ethics.state.tx.us/forms/CIQ.pdf. H-GAC officers include its Board of Directors and Executive Director, who are listed on this website. Respondent must complete and file a CIQ with the Texas Ethics Commission if an employment or business relationship with H-GAC office or an officer’s close family member as defined in the law exists.

B. Certificate of Interested Parties Form – Form 1295: As required by Section 2252.908 of the Texas Government Code. H-GAC will not enter a Contract with Contractor unless (i) the Contractor submits a disclosure of interested parties form to H-GAC at the time the Contractor submits the contract H-GAC, or (ii) the Contractor is exempt from such requirement. The required form and instructions are located at the Texas Ethics Commission website https://www.ethics.state.tx.us/whatsnew/elf_info_form1295.htm.

Respondents who are awarded a Contract must submit their Form 1295 with the signed Contract to H-GAC.

ARTICLE 33: FEDERAL COMPLIANCE
Contractor agrees to comply with all federal statutes relating to nondiscrimination, labor standards, and environmental compliance. With regards to “Rights to Inventions Made Under a Contract or Master Agreement,” If the Federal award meets the definition of “funding Master Agreement” under 37 CFR § 401.2 (a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding Master Agreement,” the recipient or subrecipient must comply with the requirements of 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Master Agreements,” and any implementing regulations issued by the awarding agency. Contractor agrees to be wholly compliant with the provisions of 2 CFR 200, Appendix II.

Additionally, for work to be performed under the Master Agreement or subcontract thereof, including procurement of materials or leases of equipment, Contractor shall notify each potential subcontractor or supplier of the Contractor's federal compliance obligations. These may include, but are not limited to: (a) Title VI of the Civil Rights Act of 1964 (P.L. 88-352) which prohibits discrimination on the basis of race, color or national origin; (b) DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2200

Page 9 of 13 ends

Title IX of the Education Amendments of 1972, as amended (20 U.S.C. §§ 1681-1683, and 1685-1686), which prohibits discrimination on the basis of sex; (c) the Fair Labor Standards Act of 1938 (29 USC 676 et. seq.), (d) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794), which prohibits discrimination on the basis of handicaps and the Americans with Disabilities Act of 1990; (e) the Age Discrimination in Employment Act of 1967 (29 USC 621 et. seq.) and the Age Discrimination Act of 1974, as amended (42 U.S.C. §§ 6101-6107), which prohibits discrimination on the basis of age; (f) the Drug Abuse Office and Treatment Act of 1972 (P.L. 92- 255), as amended, relating to nondiscrimination on the basis of drug abuse; (g) the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (P.L. 91-616), as amended, relating to the nondiscrimination on the basis of alcohol abuse or alcoholism; (h) §§ 523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. 290 dd-3 and 290 ee-3), as amended, relating to confidentiality of alcohol and drug abuse patient records; (i) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. § 3601 et seq.), as amended, relating to nondiscrimination in the sale, rental or financing of housing; (j) any other nondiscrimination provisions in any specific statute(s) applicable to any Federal funding for this Master Agreement; (k) the requirements of any other nondiscrimination statute(s) which may apply to this Master Agreement; (l) applicable provisions of the Clean Air Act (42 U.S.C. §7401 et seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. §1251 et seq.), Section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order 11738, and the Environmental Protection Agency regulations at 40 CPR Part 15; (m) applicable provisions of the Davis Bacon Act (40 U.S.C. 276a - 276a- 7), the Copeland Act (40 U.S.C. 276c), and the Contract Work Hours and Safety Standards Act (40 U.S.C. 327- 332), as set forth in Department of Labor Regulations at 20 CPR 5.5a; (n) the mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Energy Policy and Conservation Act (P.L. 94-163).

ARTICLE 34: PROHIBITION ON CONTRACTING WITH ENTITIES USING CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE EQUIPMENT (EFFECTIVE AUG. 13, 2020 AND AS AMENDED OCTOBER 26, 2020)
Pursuant to 2 CFR 200.216, Contractor shall not offer equipment, services, or system that use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. Covered telecommunications equipment or services means 1) telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities); 2) for the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities); 3) telecommunications or video surveillance services provided by such entities or using such equipment; or 4) telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country. Respondent must comply with requirements for certifications. The provision at 48 C.F.R Section 52.204-26 requires that offerors review SAM prior to completing their required representations. This rule applies to all acquisitions, including acquisitions at or below the simplified acquisition threshold and to acquisitions of commercial items, including commercially available off the-shelf items.

ARTICLE 35: DOMESTIC PREFERENCE
In accordance with 2 CFR 200.322, as appropriate and to the extent consistent with law, when using federal grant award funds H-GAC should, to the greatest extent practicable, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products). H-GAC must include this requirement in all subawards including all contracts and purchase orders for work or products under the federal grant award. If Contractor intends to qualify for Purchase Orders using federal grant money, then it shall work with H-GAC to provide all required certifications and other documentation needed to show compliance.

ARTICLE 36: CRIMINAL PROVISIONS AND SANCTIONS
The Contractor agrees to perform the Master Agreement in conformance with safeguards against fraud and abuse as set forth by the H-GAC, the State of Texas, and the acts and regulations of any related state or federal agency.

The Contractor agrees to promptly notify H-GAC of any actual or suspected fraud, abuse, or other criminal activity DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2201

Page 10 of 13 ends

through the filing of a written report within twenty-four (24) hours of knowledge thereof. Contractor shall notify H-GAC of any accident or incident requiring medical attention arising from its activities under this Master Agreement within twenty-four (24) hours of such occurrence. Theft or willful damage to property on loan to the Contractor from H-GAC, if any, shall be reported to local law enforcement agencies and H-GAC within two (2) hours of discovery of any such act.

The Contractor further agrees to cooperate fully with H-GAC, local law enforcement agencies, the State of Texas, the Federal Bureau of Investigation, and any other duly authorized investigative unit, in carrying out a full investigation of all such incidents.

The Contractor shall notify H-GAC of the threat of lawsuit or of any actual suit filed against the Contractor pertaining to this Master Agreement or which would adversely affect the Contractor’s ability to perform services under this Master Agreement.

ARTICLE 37: INDEMNIFICATION AND RECOVERY
H-GAC’s liability under this Master Agreement, whether for breach of contract, warranty, negligence, strict liability, in tort or otherwise, is limited to its order processing charge. In no event will H-GAC be liable for any loss of use, loss of time, inconvenience, commercial loss, lost profits, or savings or other incidental, special or consequential damages to the full extent such use may be disclaimed by law. Contractor agrees, to the extent permitted by law, to defend and hold harmless H-GAC, its board members, officers, agents, officials, employees, and indemnities from any and all claims, costs, expenses (including reasonable attorney fees), actions, causes of action, judgements, and liens arising as a result of Contractor’s negligent act or omission under this Master Agreement. Contractor shall notify H-GAC of the threat of lawsuit or of any actual suit filed against Contractor relating to this Master Agreement.

ARTICLE 38: LIMITATION OF CONTRACTOR’S LIABILITY
Except as specified in any separate writing between the Contractor and an END USER, Contractor’s total liability under this Master Agreement, whether for breach of contract, warranty, negligence, strict liability, in tort or otherwise, but excluding its obligation to indemnify H-GAC, is limited to the price of the particular products/services sold hereunder, and Contractor agrees either to refund the purchase price or to repair or replace product(s) that are not as warranted. In no event will Contractor be liable for any loss of use, loss of time, inconvenience, commercial loss, loss of profits or savings or other incidental, special or consequential damages to the full extent such use may be disclaimed by law. Contractor understands and agrees that it shall be liable to repay and shall repay upon demand to END USER any amounts determined by H-GAC, its independent auditors, or any agency of State or Federal government to have been paid in violation of the terms of this Master Agreement.

ARTICLE 39: TITLES NOT RESTRICTIVE
The titles assigned to the various Articles of this Master Agreement are for convenience only. Titles shall not be considered restrictive of the subject matter of any Article, or part of this Master Agreement.

ARTICLE 40: JOINT WORK PRODUCT
This Master Agreement is the joint work product of H-GAC and the Contractor. This Master Agreement has been negotiated by H-GAC and the Contractor and their respective counsel and shall be fairly interpreted in accordance with its terms and, in the event of any ambiguities, no inferences shall be drawn against any party.

ARTICLE 41: PROCUREMENT OF RECOVERED MATERIAL
H-GAC and the Respondent must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include: (1) procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; (2) procuring solid waste management services in a manner that maximizes energy and resource recovery; and (3) establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines. Pursuant to the Federal Rule above, as required by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6962(c)(3)(A)(i)), Respondent DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2202

Page 11 of 13 ends

certifies that the percentage of recovered materials content for EPA-designated items to be delivered or used in the performance of the Contract will be at least the amount required by the applicable contract specifications or other contractual requirements.

ARTICLE 42: COPELAND “ANTI-KICKBACK” ACT
Contractor shall comply with 18 U.S.C. § 874, 40 U.S.C. § 3145, and the requirements of 29 C.F.R. pt. 3 as may be applicable, which are incorporated by reference into the contract. The contractor or subcontractor shall insert in any subcontracts the clause above and such other clauses as appropriate agency instructions require, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all of these contract clauses. A breach of the contract clauses above may be grounds for termination of the Contract, and for debarment as a contractor and subcontractor as provided in 29 C.F.R. § 5.12.

ARTICLE 43: DISCRIMINATION
Respondent and any potential subcontractors shall comply with all Federal statutes relating to nondiscrimination.

These include, but are not limited to:

a) Title VI of the Civil Rights Act of 1964 (P.L. 88-352), which prohibits discrimination on the basis of race, color, or national origin;
b) Title IX of the Education Amendments of 1972, as amended (20 U.S.C. §§1681-1683, and 1685-1686), which prohibits discrimination on the basis of sex;
c) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. §794), which prohibits discrimination on the basis of handicaps;
d) The Age Discrimination Act of 1975, as amended (42 U.S.C. §§6101- 6107), which prohibits discrimination on the basis of age;
e) The Drug Abuse Office and Treatment Act of 1972 (P.L. 92-255), as amended, relating to nondiscrimination on the basis of drug abuse;
f) The Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (P.L. 91-616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism;
g) Sections 523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. §§290 dd-3 and 290 ee-3), as amended, relating to confidentiality of alcohol and drug abuse patient records; h) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§3601 et seq.), as amended, relating to nondiscrimination in the sale, rental, or financing of housing; i) Any other nondiscrimination provisions in the specific statute(s) under which application for Federal assistance is being made; and
j) The requirements of any other nondiscrimination statute(s) that may apply to the application.

ARTICLE 44: DRUG FREE WORKPLACE
Contractor must provide a drug-free workplace in accordance with the Drug-Free Workplace Act, as applicable.

For the purposes of this Section, “drug-free” means a worksite at which employees are prohibited from engaging in the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance. H-GAC may request a copy of this policy.

ARTICLE 45: APPLICABILITY TO SUBCONTRACTORS
Respondent agrees that all contracts it awards pursuant to the contract awarded as a result of this Master Agreement will be bound by the foregoing terms and conditions.

ARTICLE 46: WARRANTY AND COPYRIGHT
Submissions must include all warranty information, including items covered, items excluded, duration, and renewability. Submissions must include proof of licensing if using third party code for programming.

ARTICLE 47: DATA HANDLING AND SECURITY
It will always be the responsibility of the selected Contractor to manage data transfer and to secure all data appropriately during the project to prevent unauthorized access to all data, products, and deliverables.

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2203

Page 12 of 13 ends

ARTICLE 48: DISPUTES
All disputes concerning questions of fact or of law arising under this Master Agreement, which are not addressed within the Whole Master Agreement as defined pursuant to Article 4 hereof, shall be decided by the Executive Director of H-GAC or his designee, who shall reduce his decision to writing and provide notice thereof to the Contractor. The decision of the Executive Director or his designee shall be final and conclusive unless, within thirty (30) days from the date of receipt of such notice, the Contractor requests a rehearing from the Executive Director of H-GAC. In connection with any rehearing under this Article, the Contractor shall be afforded an opportunity to be heard and offer evidence in support of its position. The decision of the Executive Director after any such rehearing shall be final and conclusive. The Contractor may, if it elects to do so, appeal the final and conclusive decision of the Executive Director to a court of competent jurisdiction. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the Master Agreement and in accordance with HGAC's final decision.

ARTICLE 49: CHOICE OF LAW: VENUE
This Master Agreement shall be governed by the laws of the State of Texas. Venue and jurisdiction of any suit or cause of action arising under or in connection with the Master Agreement shall lie exclusively in Harris County, Texas. Disputes between END USER and Contractor are to be resolved in accordance with the law and venue rules of the state of purchase. Contractor shall immediately notify H-GAC of such disputes.

ARTICLE 50: ORDER OF PRIORITY
In the case of any conflict between or within this Master Agreement, the following order of priority shall be utilized: 1) General Provisions, 2) Special Provisions, 3) Scope of Work, and 4) Other Attachments.

ARTICLE 51: WHOLE MASTER AGREEMENT
Please note, this is an H-GAC Master Agreement template and is used for all products and services offered in H-GAC Cooperative Purchasing. Any redlines to this Master Agreement may not be reviewed. If this Master Agreement has not been signed by the Contractor within 30 calendar days, this Master Agreement will be automatically voided. The Master General Provisions, Master Special Provisions, and Attachments, as provided herein, constitute the complete Master Agreement between the parties hereto, and supersede any and all oral and written Master Agreements between the parties relating to matters herein. Except as otherwise provided herein, this Master Agreement cannot be modified without written consent of the parties.

ARTICLE 52: UNIVERSAL IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT (SAM) In accordance with 2 CFR Title 2, Subtitle A, Chapter I, Part 25 as it applies to a Federal awarding agency's grants, cooperative agreements, loans, and other types of Federal financial assistance as defined in 2 CFR 25.406.

Contractor understands and as it relates to 2 CFR 25.205(a), a Federal awarding agency may not make a Federal award or financial modification to an existing Federal award to an applicant or recipient until the entity has complied with the requirements described in 2 CFR 25.200 to provide a valid unique entity identifier and maintain an active SAM registration (www.SAM.gov) with current information (other than any requirement that is not applicable because the entity is exempted under § 25.110). 2 CFR 25.200(b) requires that registration in the SAM prior to submitting an application or plan; and maintain an active SAM registration with current information, including information on a recipient's immediate and highest level owner and subsidiaries, as well as on all predecessors that have been awarded a Federal contract or grant within the last three years, if applicable, at all times during which it has an active Federal award or an application or plan under consideration by a Federal awarding agency; and provide its unique entity identifier in each application or plan it submits to the Federal awarding agency. To remain registered in the SAM database after the initial registration, the applicant is required to review and update its information in the SAM database on an annual basis from the date of initial registration or subsequent updates to ensure it is current, accurate and complete. At the time a Federal awarding agency is ready to make a Federal award, if the intended recipient has not complied with an applicable requirement to provide a unique entity identifier or maintain an active SAM registration with current information, the Federal awarding agency: (1) May determine that the applicant is not qualified to receive a Federal award; and (2) May use that determination as a basis for making a Federal award to another applicant.

ARTICLE 53: PROCUREMENT OF RECOVERED MATERIALS
DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2204

Page 13 of 13 ends

In accordance with 2 CFR 200.323, the Houston-Galveston Area Council and the Contractor or Subrecipient must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include: (1) procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; (2) procuring solid waste management services in a manner that maximizes energy and resource recovery; and (3) establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines. Pursuant to the Federal Rule above, as required by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6962(c)(3)(A)(i)), the Contractor or Subrecipient certifies that the percentage of recovered materials content for EPA-designated items to be delivered or used in the performance of the Agreement will be at least the amount required by the applicable contract specifications or other contractual requirements.

SIGNATURES:

H-GAC and the Contractor have read, agreed, and executed the whole Master Agreement as of the date first written above, as accepted by:

South Coast Fire Equipment, Inc.

Signature $docusign:SignHere::Customer1

Name Kevin Newell

Title

Date $docusign:DateSigned::Customer1

H-GAC

Signature $docusign:SignHere::InternalSigner

Name Chuck Wemple

Title Executive Director

Date $docusign:DateSigned::InternalSigner

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B President
12/11/2023
12/12/2023
2205
H-GAC
Houston-Galveston Area Council
P.O. Box 22777 · 3555 Timmons · Houston, Texas 77227-2777 Cooperative Agreement - Contract - South Coast Fire Equipment, Inc. - Public Services - ID: 11606

Page 1 of 8 ends

MASTER SPECIAL PROVISIONS

Please note, this is an H-GAC Master Agreement template and is used for all products and services offered in H-GAC Cooperative Purchasing. Any redlines to this Master Agreement may not be reviewed.

Incorporated by attachment, as part of the whole Master Agreement, H-GAC and the Contractor do, hereby agree to the Master Special Provisions as follows:

ARTICLE 1: BIDS/PROPOSALS INCORPORATED
In addition to the whole Master Agreement, the following documents listed in order of priority are incorporated into the Master Agreement by reference: Bid/Proposal Specifications and Contractor’s Response to the Bid/Proposal.

ARTICLE 2: END USER MASTER AGREEMENTS (“EUA”)
H-GAC acknowledges that the END USER, which is the HGACBuy customer utilizing the contract (CUSTOMER and END USER may be used interchangeably) may choose to enter into an End User Master Agreement (EUA) with the Contractor through this Master Agreement. A CUSTOMER/END USER is a state agency, county, municipality, special district, or other political subdivision of a state, or a qualifying non-profit corporation (providing one or more governmental function or service that possess legal authority to enter into the Contract. The term of the EUA may exceed the term of the current H-GAC Master Agreement.

H-GAC’s acknowledgement is not an endorsement or approval of the End User Master Agreement’s terms and conditions. Contractor agrees not to offer, agree to or accept from the CUSTOMER/END USER, any terms or conditions that conflict with those in Contractor’s Master Agreement with H-GAC. Contractor affirms that termination of its Master Agreement with H-GAC for any reason shall not result in the termination of any underlying EUA, which shall in each instance, continue pursuant to the EUA’s stated terms and duration.

Pursuant to the terms of this Master Agreement, termination of this Master Agreement will disallow the Contractor from entering into any new EUA with CUSTOMER/END USER. Applicable H-GAC order processing charges will be due and payable to H-GAC on any EUAs, surviving termination of this Master Agreement between H-GAC and Contractor.

ARTICLE 3: MOST FAVORED CUSTOMER CLAUSE
Contractor shall provide its most favorable pricing and terms to H-GAC. If at any time during this Master Agreement, Contractor develops a regularly followed standard procedure of entering into Master Agreements with other governmental customers within the State of Texas, and offers the same or substantially the same products/services offered to H-GAC on a basis that provides prices, warranties, benefits, and or terms more favorable than those provided to H-GAC, Contractor shall notify H-GAC within ten (10) business days thereafter, and this Master Agreement shall be deemed to be automatically retroactively amended, to the effective date of Contractor’s most favorable past Master Agreement with another entity. Contractor shall provide the same prices, warranties, benefits, or terms to H-GAC and its CUSTOMER/END USER as provided in its most favorable past Master Agreement. H-GAC shall have the right and option at any time to decline to accept any such change, in which case the amendment shall be deemed null and void. If Contractor claims that a more favorable price, warranty, benefit, or term that was charged or offered to another entity during the term of this Master Agreement, does not constitute more favorable treatment, than Contractor shall, within ten (10) business days, notify H-GAC in writing, setting forth the detailed reasons Contractor believes the aforesaid DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2206

Page 2 of 8 ends

offer is not in fact most favored treatment. H-GAC, after due consideration of Contractor’s written explanation, may decline to accept such explanation and thereupon this Master Agreement between H-GAC and Contractor shall be automatically amended, effective retroactively, to the effective date of the most favored Master Agreement, to provide the same prices, warranties, benefits, or terms to H-GAC and the CUSTOMER/END USER.

EXCEPTION: This clause shall not be applicable to prices and price adjustments offered by a bidder, proposer, or contractor, which are not within bidder's/proposer’s control [example; a manufacturer's bid concession], or to any prices offered to the Federal Government and its agencies.

ARTICLE 4: PARTY LIABILITY
Contractor’s total liability under this Master Agreement, whether for breach of contract, warranty, negligence, strict liability, in tort or otherwise, is limited to the price of the particular products/services sold hereunder.

Contractor agrees either to refund the purchase price or to repair or replace product(s) that are not as warranted.

Contractor accepts liability to repay, and shall repay upon demand to CUSTOMER/END USER, any amounts determined by H-GAC, its independent auditors, or any state or federal agency, to have been paid in violation of the terms of this Master Agreement.

ARTICLE 5: GOVERNING LAW & VENUE
Contractor and H-GAC agree that Contractor will make every reasonable effort to resolve disputes with the CUSTOMER/END USER in accord with the law and venue rules of the state of purchase. Contractor shall immediately notify H-GAC of such disputes.

ARTICLE 6: SALES AND ORDER PROCESSING CHARGE
Contractor shall sell its products to CUSTOMER/END USER based on the pricing and terms of this Master Agreement. H-GAC will invoice Contractor for the applicable order processing charge when H-GAC receives notification of a CUSTOMER/END USER order. Contractor shall remit to H-GAC the full amount of the applicable order processing charge, after delivery of any product or service and subsequent CUSTOMER/END USER acceptance. Payment of the Order Processing Charge shall be remitted from Contractor to H-GAC, within thirty (30) calendar days or ten (10) business days after receipt of a CUSTOMER/END USER’s payment, whichever comes first, notwithstanding Contractor’s receipt of invoice. For sales made by Contractor based on this Master Agreement, including sales to entities without Interlocal Master Agreements, Contractor shall pay the applicable order processing charges to H-GAC. Further, Contractor agrees to encourage entities who are not members of H-GAC’s Cooperative Purchasing Program to execute an H-GAC Interlocal Master Agreement. H-GAC reserves the right to take appropriate actions including, but not limited to, Master Agreement termination if Contractor fails to promptly remit the appropriate order processing charge to H-GAC.

In no event shall H-GAC have any liability to Contractor for any goods or services a CUSTOMER/END USER procures from Contractor. At all times, Contractor shall remain liable to pay to H-GAC any order processing charges on any portion of the Master Agreement actually performed, and for which compensation was received by Contractor.

ARTICLE 7: LIQUIDATED DAMAGES
Contractor and H-GAC agree that Contractor shall cooperate with the CUSTOMER/END USER at the time a CUSTOMER/END USER purchase order is placed, to determine terms for any liquidated damages.

ARTICLE 8: INSURANCE
Unless otherwise stipulated in Section B of the Bid/Proposal Specifications, Contractor must have the following insurance and coverage minimums:

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2207

Page 3 of 8 ends

a. General liability insurance with a Single Occurrence limit of at least $1,000,000.00, and a General Aggregate limit of at least two times the Single Occurrence limit. b. Product liability insurance with a Single Occurrence limit of at least $1,000,000.00, and a General Aggregate limit of at least two times the Single Occurrence limit for all Products except Automotive Fire Apparatus. For Automotive Fire Apparatus, see Section B of the Bid/Proposal Specifications. c. Property Damage or Destruction insurance is required for coverage of End User owned equipment while in Contractor's possession, custody, or control. The minimum Single Occurrence limit is $500,000.00 and the General Aggregate limit must be at least two times the Single Occurrence limit. This insurance may be carried in several ways, e.g. under an Inland Marine policy, as art of Automobile coverage, or under a Garage Keepers policy. In any event, this coverage must be specifically and clearly listed on insurance certificate(s) submitted to H-GAC.
d. Insurance coverage shall be in effect for the length of any contract made pursuant to the Bid/Proposal, and for any extensions thereof, plus the number of days/months required to deliver any outstanding order after the close of the contract period.
e. Original Insurance Certificates must be furnished to H-GAC on request, showing Contractor as the insured and showing coverage and limits for the insurances listed above. f. If any Product(s) or Service(s) will be provided by parties other than Contractor, all such parties are required to carry the minimum insurance coverages specified herein, and if requested by H-GAC, a separate insurance certificate must be submitted for each such party. g. H-GAC reserves the right to contact insurance underwriters to confirm policy and certificate issuance and document accuracy.

ARTICLE 9: PERFORMANCE AND PAYMENT BONDS FOR INDIVIDUAL ORDERS H-GAC’s contractual requirements DO NOT include a Performance & Payment Bond (PPB); therefore, Contractor shall offer pricing that reflects this cost savings. Contractor shall remain prepared to offer a PPB to cover any order if so requested by the CUSTOMER/ END USER. Contractor shall quote a price to CUSTOMER/ END USER for provision of any requested PPB, and agrees to furnish the PPB within ten business (10) days of receipt of CUSTOMER/END USER's purchase order.

ARTICLE 10: ORDER PROCESSING CHARGE
H-GAC will apply an Order Processing Charge for each sale done through the H-GAC contract, with the exception of orders for motor vehicles. Any pricing submitted must include this charge amount per the most current H-GAC schedule. For motor vehicle orders, the Processing Charge is paid by the CUSTOMER/END USER. Contractor will need to refer to the solicitation for the Order Processing Charge.

ARTICLE 11: CHANGE OF STATUS
Contractor shall immediately notify H-GAC, in writing, of ANY change in ownership, control, dealership/franchisee status, Motor Vehicle license status, or name. Contractor shall offer written guidance to advise H-GAC if this Master Agreement shall be affected in any way by such change. H-GAC shall have the right to determine whether or not such change is acceptable, and to determine what action shall be warranted, up to and including cancellation of Master Agreement.

ARTICLE 12: REQUIREMENTS TO APPLICABLE PHYSICAL GOODS
In the case of physical goods (e.g. equipment, material, supplies, as opposed to services), all Products offered must comply with any applicable provisions of the Texas Business and Commerce Code, Title 1, Chapter 2 and with at least the following:

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2208

Page 4 of 8 ends

a. Be new, unused, and not refurbished.
b. Not be a prototype as the general design, operation, and performance. This requirement is NOT meant to preclude the Contractor from offering new models or configurations which incorporate improvements in a current design or add functionality, but in which new model or configuration may be new to the marketplace.
c. Include all accessories which may or may not be specifically mentioned in the Master Agreement, but which are normally furnished or necessary to make the Product ready for its intended use upon delivery.

Such accessories shall be assembled, installed, and adjusted to allow continuous operation of Product at time of delivery.
d. Have assemblies, sub-assemblies and component parts that are standard and interchangeable throughout the entire quantity of a Product as may be purchased simultaneously by any END USER/CUSTOMER. e. Be designed and constructed using current industry accepted engineering and safety practices, and materials.
f. Be available for inspection at any time prior to or after procurement.

ARTICLE 13: TEXAS MOTOR VEHICLE BOARD LICENSING
All Contractors that deal in motor vehicles shall maintain current licenses that are required by the Texas Motor Vehicle Commission Code. If at any time during this Master Agreement term, any required Contractor license is denied, revoked, or not renewed, Contractor shall be in default of this Master Agreement, unless the Texas Motor Vehicle Board issues a stay or waiver. Contractor shall promptly provide copies of all current applicable Texas Motor Vehicle Board documentation to H-GAC upon request.

ARTICLE 14: INSPECTION/TESTING
All Products sold pursuant to this Master Agreement will be subject to inspection/testing by or at the direction of H-GAC and/or the ordering CUSTOMER/END USER, either at the delivery destination or the place of manufacture. In the event a Product fails to meet or exceed all requirements of this Master Agreement, and unless otherwise agreed in advance, the cost of any inspection and/or testing, will be the responsibility of the Contractor.

ARTICLE 15: ADDITIONAL REPORTING REQUIREMENTS
Contractor agrees to submit written quarterly reports to H-GAC detailing all transactions during the previous three (3) month period. Reports must include, but are not limited, to the following information:
a. CUSTOMER/END USER Name
b. Product/Service purchased, including Product Code if applicable c. Customer Purchase Order Number
d. Purchase Order Date
e. Product/Service dollar amount
f. HGACBuy Order Processing Charge amount

ARTICLE 16: BACKGROUND CHECKS
Cooperative customers may request background checks on any awarded contractor’s employees who will have direct contact with students, or for any other reason they so choose, any may require contractor to pay the cost of obtaining any background information requested by the CUSTOMER/END USER.

ARTICLE 17: PROHIBITION ON CONTRACTS WITH COMPANIES BOYCOTTING ISRAEL

CERTIFICATION
As required by Chapter 2271 of the Texas Local Government Code the Contractor must verify that it 1) does not boycott Israel; and 2) will not boycott Israel during the term of the Contract. Pursuant to Section 2271.001, Texas Government Code:

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2209

Page 5 of 8 ends

1. “Boycott Israel” means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory, but does not include an action made for ordinary business purposes; and

2. “Company” means a for-profit sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, or any limited liability company, including a wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of those entities or business associations that exist to make a profit.

ARTICLE 18: NO EXCLUDED NATION OR TERRORIST ORGANIZATION CERTIFICATION As required by Chapter 2252 of the Texas Government Code the Contractor must certify that it is not a company engaged in active business operations with Sudan, Iran, or a foreign terrorist organization – specifically, any company identified on a list prepared and maintained by the Texas Comptroller under Texas Government Code §§806.051, 807.051, or 2252.153. (A company that the U.S. Government affirmatively declares to be excluded from its federal sanctions regime relating to Sudan, Iran, or any federal sanctions regime relating to a foreign terrorist organization is not subject to the contract prohibition.)

ARTICLE 19: PROHIBITION ON CONTRACTING WITH ENTITIES USING CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE EQUIPMENT (Effective Aug. 13, 2020 and as amended October 26, 2020)
Pursuant to 2 CFR 200.216, Contractor shall not offer equipment, services, or system that use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. ‘‘Covered telecommunications equipment or services means 1) telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities); 2) for the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities); 3) telecommunications or video surveillance services provided by such entities or using such equipment; or 4) telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.

Contractor must comply with requirements for certifications. The provision at 48 C.F.R Section 52.204-26 requires that Contractors review SAM prior to completing their required representations. This rule applies to all acquisitions, including acquisitions at or below the simplified acquisition threshold and to acquisitions of commercial items, including commercially available off the-shelf items.

ARTICLE 20: BUY AMERICA ACT (National School Lunch Program and Breakfast Program) With respect to products purchased by CUSTOMER/END USER for use in the National School Lunch Program and/or National School Breakfast Program, Contractor shall comply with all federal procurement laws and regulations with respect to such programs, including the Buy American provisions set forth in 7 C.F.R. Part 210.21(d), to the extent applicable. Contractor agrees to provide all certifications required by CUSTOMER/END USER regarding such programs.

In the event Contractor or Contractor’s supplier(s) are unable or unwilling to certify compliance with the Buy American Provision, or the applicability of an exception to the Buy American provision, H-GAC CUSTOMER/END USER may decide not to purchase from Contractor. Additionally, H-GAC DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2210

Page 6 of 8 ends

CUSTOMER/END USER may require country of origin on all products and invoices submitted for payment by Contractor, and Contractor agrees to comply with any such requirement.

ARTICLE 21: BUY AMERICA REQUIREMENT (Applies only to Federally Funded Highway and Transit Projects)
With respect to products purchased by CUSTOMER/END USER for use in federally funded highway projects, Contractor shall comply with all federal procurement laws and regulations with respect to such projects, including the Buy American provisions set forth in 23 U.S.C. Section 313, 23 C.F.R. Section 635.410, as amended, and the Steel and Iron Preference provisions of Texas Transportation Code Section 223.045, to the extent applicable. Contractor agrees to provide all certifications required by CUSTOMER/END USER regarding such programs. With respect to products purchased by CUSTOMER/END USER for use in federally funded transit projects, Contractor shall comply with all federal procurement laws and regulations with respect to such projects, including the Buy American provisions set forth in 49 U.S.C. Section 5323(j)(1), 49 C.F.R.

Sections 661.6 or 661.12, to the extent applicable. Contractor agrees to provide all certifications required by CUSTOMER/END USER regarding such programs.

ARTICLE 22: DOMESTIC PREFERENCE
In accordance with 2 CFR 200.322, as appropriate and to the extent consistent with law, a CUSTOMER/END USER using federal grant award funds should, to the greatest extent practicable, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products). The CUSTOMER/END USER must include this requirement in all subawards including all contracts and purchase orders for work or products under the federal grant award. If Contractor intends to qualify for Purchase Orders using federal grant money, they shall work with the CUSTOMER/END USER to provide all required certifications and other documentation needed to show compliance.

ARTICLE 23: TITLE VI REQUIREMENTS
H-GAC in accordance with the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252, 42 U.S.C. §§ 2000d to 2000d-4) and the Regulations, hereby notifies all bidders that it will affirmatively ensure that any disadvantaged business enterprises will be afforded full and fair opportunity to submit in response to this Master Agreement and will not be discriminated against on the grounds of race, color, or national origin in consideration for an award.

ARTICLE 24: EQUAL EMPLOYMENT OPPORTUNITY
Except as otherwise provided under 41 CFR Part 60, all Contracts and CUSTOMER/END USER Purchase Orders that meet the definition of “federally assisted construction contract” in 41 CFR Part 60-1.3 shall be deemed to include the equal opportunity clause provided under 41 CFR 60-1.4(b), in accordance with Executive Order 11246, “Equal Employment Opportunity” (30 FR 12319, 12935, 3 CFR Part, 1964-1965 Comp., pg.339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and implementing regulations at 41CFR Part 60, “Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.”

The equal opportunity clause provided under 41 CFR 60-1.4(b) is hereby incorporated by reference. Contractor agrees that such provision applies to any contract that meets the definition of “federally assisted construction contract” in 41 CFR Part 60-1.3 and agrees that it will comply with such provision.

ARTICLE 25: CLEAN AIR AND WATER POLLUTION CONTROL ACT
CUSTOMER/END USER Purchase Orders using federal funds must contain a provision that requires the Contractor to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2211

Page 7 of 8 ends

Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251- 1387). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).

Pursuant to the Federal Rule above, Contractor certifies that it is in compliance with all applicable provisions of the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387) and will remain in compliance during the term of the Contract.

ARTICLE 26: PREVAILING WAGE
Contractor and any potential subcontractors have a duty to and shall pay the prevailing wage rate under the Davis-Bacon Act, 40 U.S.C. 276a – 276a-5, as amended, and the regulations adopted thereunder contained in 29 C.F.R. pt. 1 and 5.

ARTICLE 27: CONTRACT WORK HOURS AND SAFETY STANDARDS
As per the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-3708), where applicable, all CUSTOMER/END USER Purchase Orders in excess of $100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C. 3702 and 3704, as supplemented by Department of Labor regulations (29 CFR Part 5). Under 40 U.S.C. 3702 of the Act, each contractor must be required to compute the wages of every mechanic and laborer, on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.

ARTICLE 28: PROFIT AS A SEPARATE ELEMENT OF PRICE
For purchases using federal funds more than the current Simplified Acquisition Threshold of $250,000, requires negotiation of profit as a separate element of the price. See, 2 CFR 200.324(b). Contractor agrees to provide information and negotiate regarding profit as a separate element of the price for the purchase. Contractor also agrees that the total price, including profit, charged by Contractor will not exceed the awarded pricing, including any applicable discount, under any awarded contract.

ARTICLE 29: BYRD ANTI-LOBBYING AMENDMENT
Byrd Anti-Lobbying Amendment (31U.S.C. 1352) – Contractors that apply or bid for an award exceeding $100,000 must file the required anti-lobbying certification. Each tier must certify to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier, up to the CUSTOMER/END USER. As applicable, Contractor agrees to file all certifications and disclosures required by, and otherwise comply with, the Byrd Anti-Lobbying Amendment (31 USC 1352). Contractor certifies that it is currently in compliance with all applicable provisions of the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352) and will continue to be in compliance throughout the term of the Contract and further certifies that:

1. No Federal appropriated funds have been paid or will be paid by or on behalf of the Contractor, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2212

Page 8 of 8 ends

with the awarding of a Federal contract, the making of a Federal Grant, the making of a Federal Loan, the entering into a cooperative Master Agreement, and the extension, continuation, renewal, amendment, or modification of a Federal contract, grant, loan, or cooperative Master Agreement.

2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing, or attempting to influence, an officer or employee of a Member of Congress in connection with a Federal contract, grant, loan, or cooperative Master Agreement, Contractor shall complete and submit Standard Form – LLL, “Disclosure Form to Report Lobbying”, in accordance with its instructions.

3. Contractor shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative Master Agreements) and that all subcontractors shall certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certificate is a prerequisite for making or entering into this transaction imposed by Section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

ARTICLE 30: COMPLIANCE WITH EPA REGULATIONS APPLICABLE TO GRANTS,

SUBGRANTS, COOPERATIVE MASTER AGREEMENTS, AND CONTRACTS Contractor certifies compliance with all applicable standards, orders, regulations, and/or requirements issued pursuant to the Clean Air Act of 1970, as amended (42 U.S.C. 1857(h)), Section 508 of the Clean Water Act, as amended (13 U.S.C. 1368), Executive Order 117389 and Environmental Protection Agency Regulation, 40 CFR Part 15.

ARTICLE 31: COMPLIANCE WITH ENERGY POLICY AND CONSERVATION ACT Contractor certifies that Contractor will be in compliance with mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Energy Policy and Conservation Act (Pub. L. 94-163, 89 Stat. 871).

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2213
Fire Apparatus and Related Vehicles
Request For Proposal
HGACBuy/Cooperative Purchasing Program
07230
Project ID: FS12-23
Release Date: Wednesday, July 26, 2023
· Due Date: Thursday, September 14, 2023 12:00pm
Posted Wednesday, July 26, 2023 7:00am
Bid Unsealed Thursday, September 14, 2023 12:05pm
Pricing Unsealed Thursday, September 14, 2023 12:05pm

4. Specifications/Categories/Scope of Work
This is an indefinite quantity/indefinite delivery offerings contract. The HGACBuy Customer is responsible to ensure adequate competition is performed between the various contractors or contractors outside of HGACBuy to determine price reasonableness that might be required per any funding agency. Customer will need to ensure compliance with any funding agency requirements before proceeding with a purchase order under this contract. Please consult legal counsel regarding questions concerning compliance as a contractor under this solicitation.

4.1. Overview
H-GAC is soliciting responses for selecting qualified manufacturers, dealers, distributors, and service providers of Fire Apparatus and Other Special Service Vehicles and related services to make these types of products and services available to Customers of the HGACBuy Cooperative Purchasing Program under blanket type contracts.

Customers (end users) may require selective acquisitions of equipment and/or services OR full turnkey projects necessitating additional services, training, and maintenance agreements. H-GAC is seeking the broadest possible selection of available fire apparatus and special service vehicles to best serve our customers by providing the largest selection of products/services available to meet their needs. This solicitation may include a request for a discount percent off price catalog, category, or manufacturer, or price list for supplies, materials, or not to exceed hourly rates for installation or repair. Respondents are not required to provide offerings on all categories. Please note: awarded contracts for FS12-23 allow contractors to update their manufacturer pricing and product offerings at any time during the course of the four-year contract term.

4.2. Categories
This Solicitation is divided into twelve (12) separate but related product categories (A-L). When submitting a response, Respondent may choose to submit a response to any of the categories or all of them. No additional weighted value will be assigned to a response that addresses more than one or all categories listed. All equipment must be the manufacturer’s new and current model and must be fully operational upon delivery to the Customer.

This solicitation does not include ambulances - please see HGACBuy Contract AM10-20 and AM10-23.

Alternative Fuel Vehicles: All responses that include electric, hybrid, or other alternative fuel vehicles must include these vehicles in Category I. If that specific vehicle is also available with an internal combustion engine (ICE), DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2214
please list the ICE vehicle separately in the appropriate vehicle category. Category I will only include the alternative fuel vehicles, regardless of vehicle function or type.

Product categories are as follows:

A. Wildland Fire Apparatus - Brush Fire, Off-Road Tenders/Tankers, Crew Carriers, Slip-in Units, etc.

Response listings/descriptions must be organized by major sub-categories, which include Manufacturer, type/function, model, chassis (make and model), cab configuration, 2WD/4WD, and fuel type, and tank and pump.

B. Aerial Fire Apparatus - Boom/Platform, Ladder, Ladder/Platform, etc.

Response listings/descriptions must be organized by major sub-categories, which include Manufacturer, model, chassis, aerial category/construction, aerial functions, cab types, and axle configurations.

C. Pumper Fire Apparatus
Response listings/descriptions must be organized by major sub-categories, which include Manufacturer, model, chassis, cab types, axle configurations, tank capacities/construction, and pump capacity/position.

D. Pumper-Tanker/Tanker/Tender Fire Apparatus
Response listings/descriptions must be organized by major sub-categories, which include Manufacturer, model, chassis, cab types, axle configurations, tank capacities/construction, and pump capacity/position.

E. Aircraft Rescue & Fire-Fighting Vehicles (ARFF)
Response listings/descriptions must be organized by major sub-categories including Manufacturer, model, chassis, cab types, axle configurations, and by Class Types 1-5.

F. Special Service Apparatus – Rescue/Fast Response, Re-Hab, Hazmat, Mobile Emergency Command/Communication Centers/Trailers, Light/Air Vehicle, Dive Response Vehicle, ATV/UTV Response Vehicles, Mobile Fire Pump Testers, etc.

Response listings/descriptions must be organized by Manufacturer, function, type, or purpose of the apparatus/vehicle, and include brief and concise details about the vehicle.

G. Fire Boats, Rescue Boats, Emergency Response Boats
Response listings/descriptions must be organized by major sub-categories including Manufacturer, type, function, size, and propulsion.

H. Fire Command Vehicles - Light, medium, and heavy-duty pickups and SUVs Response listings/descriptions must be organized by major sub-categories including Manufacturer, model, chassis, and 2WD/4WD, fuel type.

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2215
I. Electric/Alternative Fuel Fire Apparatus
Response listings/descriptions must be organized by major sub-categories including Manufacturer, model, chassis, vehicle type, fuel/propulsion type, and function.

J. Fire Apparatus/Vehicle Service/Maintenance Plans
Response listings/descriptions must include plan details, including details about which fees are included in costs, and items such as labor rates, and fee structures.

K. Fire Apparatus/Vehicle Parts and Supplies
Response listing need only to include percentage discount.

L. Fire Apparatus/Vehicle Options
Please provide a complete listing or catalog of options, accessories, and loose equipment offered. Please clearly indicate if the options are model or vehicle specific, or only available for specific models or vehicles. Options must be clearly identified as upgrades or downgrades and clearly show the net effect to the price of the base model. (Please upload in Section 9.1.4 Required Documents.)

4.3. General Requirements
All products priced and sold pursuant to this Solicitation must, as applicable:

1. Meet all applicable requirements of federal, state and local laws and regulations.

2. Be manufacturer's normal offering with all standard features and functions and performance levels.

3. Be ready for turn-key operation upon delivery.

4. Respondent must include specifications, brochures, warranty information, and any other relevant product information with solicitation Response.

Note: “Unpriced/unpublished” options cannot be quoted on the Base Pricing List and may not be sold through this contract.

4.4. Additional Requirements
Licenses

1. Contractor must have and maintain the appropriate license(s) as required by the State of Texas, Department of Transportation, Department of Motor Vehicles, Motor Vehicle Commission Code [latest edition], or any other local, state and federal licenses required and which are applicable to the respondent’s operations.

2. The prescribed licenses must include the manufacturer/respondent, and any and all dealers and their representatives as may be required by the Motor Vehicle Department. Contractor must ensure all DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2216
emergency and specialty vehicles sold are in accordance with the laws of the state where the sale and acquisition are made.

3. Contractor must maintain all licensing required by the State of Texas as applicable to their business operations during the entire contract term. If during the contract period such licensing lapses, Contractor will be in default and become subject to contract termination unless issued a stay or waiver.

Manuals

1. Contractor must supply at the time of delivery, at least two (2) sets of complete operations and service documentation covering the completed emergency vehicles as delivered and accepted.

2. Respondent must supply the following information with their response: Technical Specifications, Product Brochures, Tear Sheets, Cut Sheets, Strippers, etc. which clearly show all the standard features and capabilities of each response listing.

Warranty
Contractors must comply with the minimum warranty and maintenance requirements described below for any products or services provided under this Solicitation.

1. Contractor must furnish with response, and for all equipment sold through this H-GAC contract, the manufacturer's general warranty, which must be honored by all the manufacturer's authorized service locations.

2. All service/maintenance plan listings must clearly indicate the cost structure for such plans, clearly indicating which costs and fees are included (such as: hourly labor rates, shop fees, supply fees, environmental fees).

3. The Contractor will handle all warranty claims and all work must be completed within ten (10) calendar days after receipt of equipment/vehicle by the Contractor without cost to H-GAC or the Customer. Delayed warranties must be available for all vehicles and equipment. Warranty start date will be effective the date that the completed unit is placed into service by the Customer. The Contractor must furnish a delayed warranty card/document for each unit delivered and/or advise the Customer of the procedures to be followed for obtaining the delayed start of warranty coverage. Requests for delayed warranties will not exceed six months after delivery.

4. Any and all documents necessary to effect manufacturer’s warranty must be properly applied for and submitted by the Contractor. The Contractor will provide to H-GAC and the Customer a manufacturer’s warranty which will be honored by any of the manufacturer’s authorized dealers and a complete copy must be provided at the time of delivery. When additional warranties are available as standard, they must be included as a part of the response for the benefit of H-GAC and Customer.

5. The patient compartment, all modifications to the OEM chassis by Contractor on the accepted unit, and equipment and parts will be guaranteed for a minimum period of one (1) year against defects in design, DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2217
materials, and workmanship. The warranty period will begin upon final acceptance of the equipment. This warranty will cover parts and labor expenses.

6. In the event any component part of equipment or materials furnished under these specifications, or its subsequent contract(s), becomes defective by reason of material or workmanship during said period, and the end user agency immediately notifies Contractor of such defect, Contractor will, at no expense to the End User agency or H-GAC, repair or replace equipment or component with new equipment or component.

7. Warranty of all system equipment is the sole responsibility of the Contractor under contract, but may be performed by their certified, designated agent.

4.5. Vehicle Requirements
All equipment and vehicles must be new and be the manufacturer’s latest and current model. Each vehicle must be fully assembled, adjusted, serviced and ready for immediate and continuous operation upon delivery. If the equipment or vehicle does not meet the specification requirements upon delivery, Contractor will be responsible for correcting all deficiencies and making any corrections or adjustments needed to attain specification requirements.

All equipment and vehicles must conform to applicable local, state, federal requirements and must comply to all applicable industry standards including National Fire Protection Association (NFPA), Department of Transportation, United States Coast Guard (USCG), and Occupational Safety and Health Administration (OSHA).

4.6. Service / Maintenance Plans and Parts
All service/maintenance plan listings must clearly indicate the cost structure for such plans, including which costs and fees are included (ex: hourly labor rates, shop fees, supply fees, environmental fees).

4.7. Labor Hours Definitions
If the awarded contract contains hours for labor related services, the following definitions will apply:

1. “Business Day” Monday through Friday

2. “Business Hours” Standard Business Hours 8 a.m. to 5 p.m.

3. “Regular Time” Work that occurs during standard business hours

4. “Emergency Time” Work that occurs outside standard business hours

4.8. Administrative Fee
For each purchase order processed under an awarded contract, H-GAC will directly invoice the contractor an administrative fee (Order Processing Charge) applicable to the sale of all equipment and services submitted in contractor’s response. It is the contractor’s responsibility to remit the administrative fee within thirty (30) days of processing any customer’s purchase order, even if an invoice is not received from H-GAC. Contractor agrees that H-GAC will have the right, with reasonable notice, to inspect its records pertaining to purchase orders processed and the accuracy of the fees payable to H-GAC. For this solicitation the administrative fee is as follows:

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2218
Administrative Fee (per Purchase Order)
Category A – Brush Trucks/Light Rescue $1,000 per purchase order Category B – Aerial Fire Apparatus $2,000 per purchase order Category C – Pumper Fire Apparatus $2,000 per purchase order Category D – Pumper/Tanker and Tanker Apparatus $2,000 per purchase order Category E – ARFF Apparatus $2,000 per purchase order Category F – Special Service Vehicles
Heavy Rescue*/Special Service $2,000 per purchase order Light Rescue/Quick Response $1,000 per purchase order All Trailers 2% of purchase order *Heavy Rescue is vehicle with GVWR of 26,000 and above.

Category G –Fire/Rescue/Emer. Response Boats 2% of purchase order Category H - Fire Command Vehicles $1,000 per purchase order Category I - Alternative Fuel Vehicles Fee determined by category of vehicle Category J –Service/Maintenance Plans 2% per purchase order Category K - Fire Apparatus/Vehicle Parts and Supplies 2% per purchase order Category L - Fire Apparatus/Vehicle Options No separate fee - part of vehicle

4.9. Final Contract Deliverables
Contractor agrees to submit written quarterly reports to H-GAC detailing all transactions during the previous three (3) month period. Reports must include, but are not limited, to the following information:
• Customer Name and address
• HGACBuy confirmation number
• Product/Service purchased
• Customer Purchase Order Number
• Purchase Order Date
• Product/Service dollar amount
• HGACBuy Order Processing Charge amount
DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2219
Reports must be provided to H-GAC in Excel or other acceptable electronic format by the 30th day of the month following the quarter being reported. If Contractor defaults in providing Products or Services reporting as required by the contract, recourse may be exercised through cancellation of the contract and other legal remedies as appropriate.

--End of section--

DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2220
Attachment A
South Coast Fire Equipment, Inc.

Fire Apparatus and Related Vehicles
Contract No.: FS12-23
Manufacturer Product Item Description Offered List Price HGACBuy Discount
Category A - Wildland and Brush
Pierce 23W-101 1019 Ford F-550 Pumper - 1019 366,288.00$ 5% Pierce 23W - 103 International Type 3 International Wildland-1039 581,003.00$ 5% Pierce 23W - 104 International Urban International Urban Interface-1040 491,716.00$ 5% BME Fire Trucks Summit Navistar, 4x4, 4-Door, Model 34, 1000 GPM Pump, 500 Gallon Water Tank 544,632.00$ 5% BME Fire Trucks Targhee Navistar, 4x4, 4-Door, Model 34, 500 GPM Pump, 500 Gallon Water Tank 529,854.00$ 5% BME Fire Trucks Rocky Mountain Navistar, 4x4, 4-Door, Type 3, Model 346/500R, 600 Gallon Water Tank, 500 GPM Pump 455,062.00$ 5% BME Fire Trucks Aspen Navistar, 4x4, 4-Door, Type 4, 800 Gallon Water Tank, 1.5AGE Pump 449,583.00$ 5% BME Fire Trucks McCall Dodge, Type 6, 300 Gallon Water Tank, 1.5AGE Pump 294,167.00$ 5% BME Fire Trucks Ponderosa Type 6, 300 Gallon Water Tank, 1.5AGE Pump 325,057.00$ 5% BME Fire Trucks Sawtooth Type 6, 300 Gallon Water Tank, 1.5AGE Pump 329,057.00$ 5% BME Fire Trucks Big Horn Navistar, 4x4, 4-Door, Wildland Urban Interface, 750 Gallon Water Tank, 1000 GPM Pump 606,667.00$ 5% Category B - Aerial Fire Apparatus
Pierce 23A-101 Enforcer Chassis, Single Rear Axle, 75' Aerial - 1027 1,436,022.00$ 5% Pierce 23A-102 Enforcer Chassis, Tandem Rear Axle, PUC, 75' Aerial - 1028 1,474,688.00$ 5% Pierce 23A-103 Velocity Chassis, Tandem Rear Axle, 100' Aerial - 1029 1,648,105.00$ 5% Pierce 23A-104 Enforcer Chassis, Single Rear 107' Aerial -1030 1,589,837.00$ 5% Pierce 23A-105 Enforcer Chassis, Tandem Rear Axle, 107' Aerial - 1031 1,699,833.00$ 5% Pierce 23A-106 Velocity Chassis, Tandem Rear Axle, 105' Aerial - 1032 1,646,299.00$ 5% Pierce 23A-107 Velocity Chassis, Tandem Rear axle, 100' Rear mounted Platform - 1033 1,912,763.00$ 5% Pierce 23A-108 Velocity Chassis, Tandem Rear axle, 100' Aluminum Rear mounted Platform - 1034 2,017,959.00$ 5% Pierce 23A-109 Enforcer Chassis, Tandem Rear axle, mid-mounted 100' platform - 1035 2,101,962.00$ 5% Pierce 23A-110 Enforcer Chassis, 107' Tractor Drawn Aerial - 1036 2,066,551.00$ 5% Pierce 23A-111 Enforcer Snozzle - 1037 1,314,701.00$ 5% Category C - Pumper Fire Apparatus
Pierce 23P-102 Freightliner M2-106 Responder, 1000 Tank, 1250 Pump 1020 397,469.04$ 5% Pierce 23P-103 International 4 door 1000 tank, 1250 Pump Pumper 1026 526,585.97$ 5% Pierce 23P-104 Saber Pumper, 750 Tank, 1500 pump 1022 881,807.87$ 5% Pierce 23P-105 Enforcer Pumper 750 tank, 1500 pump 1023 956,324.96$ 5% Pierce 23P-106 Enforcer PUC Pumper 750 tank, 1500 pump 1024 1,035,341.76$ 5% Pierce 23P-107 Velocity Pumper 1025 967,322.35$ 5% Pierce 23P-108 Velocity PUC Pumper 1038 1,049,384.90$ 5% Category D - Pumper Tanker/Tender
Pierce 23PT-101 Freightliner 2000 Gallon Tanker - 1041 511,866.00$ 5% Pierce 23PT-102 International 2000 Gallon Tanker -1042 498,571.00$ 5% Pierce 23PT-103 Saber 2000 Gallon Tanker - 1043 899,378.00$ 5% Pierce 23PT-104 Enforcer 2000 Gallon Tanker - 1044 982,413.00$ 5% 1 DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2221
Pierce 23PT-105 Freightliner 3000 Tandem Tanker - 1045 507,344.00$ 5% Pierce 23PT-106 International 3000 Tandem Tanker - 1046 520,168.00$ 5% Pierce 23PT-107 Saber Tandem 3000 Tanker - 1047 985,111.00$ 5% Pierce 23PT-108 Enforcer Tandem 3000 Tanker - 1048 1,048,825.00$ 5% Pierce 23PT-109 Velocity Tandem PUC 2500 Tanker - 1049 1,109,887.00$ 5% BME Fire Trucks Tahoe 2000 Gallon Water Tender 483,632.00$ 5% BME Fire Trucks Cascade 3000 Gallon Water Tender 552,502.00$ 5% BME Fire Trucks Clearwater Navistar, 4x4, 4-Door, 1250 Gallon Water Tank, 500 GPM Pump Extreme Water Tender 533,552.00$ 5% BME Fire Trucks Mammoth 1250 Gallon Extreme Water Tender, Navistar 2-Door Cab 501,135.00$ 5% BME Fire Trucks Payette 1800 Gallon Tactical Water Tender 484,061.00$ 5% Category F - Special Service VehiclesVehicles
Pierce 23SS - 101 Ford F-550 Rescue 12' -1050 278,709.00$ 5% Pierce 23SS - 102 Enforcer NWI-Rescue - 1051 975,772.00$ 5% Pierce 23SS - 103 Velocity NWI-Rescue - 1052 999,751.00$ 5% Pierce 23SS - 104 Enforcer PUC NWI-Rescue - 1053 1,252,488.00$ 5% Pierce 23SS - 105 Velocity Combo-Rescue - 1054 1,136,418.00$ 5% Pierce 23SS - 106 Enforcer Tandem Combo - 1055 1,114,686.00$ 5% Pierce 23SS - 107 Velocity Alum Walk-in Rescue - 1056 1,114,461.00$ 5% Pierce 23SS - 108 Enforcer Stainless NWI-Rescue - 1057 1,020,660.00$ 5% Pierce 23SS - 109 Enforcer Walk-in - 1058 1,034,340.00$ 5% Pierce 23SS - 110 Velocity Tandem Walk-in - 1059 1,228,431.00$ 5% Frontline Communications C-17 Mobile Command Unit, Chevrolet Suburban, 4x4, 17 feet overall length, Single axle, Gasoline 196,178.00$ 5% Frontline Communications C-20 Rapid Response Command Unit, Ford Transit-350 Van, 2WD, 20 feet overall length, Single axle, Gasoline 278,319.00$ 5%
Frontline Communications CRU-22 Critical Response Command Unit, Ford Transit-350 High Roof Van, 2WD, 9,500 GVWR, 22 feet overall length, Single axle, Gasoline 353,163.00$ 5% Frontline Communications C-23 Mobile Command Unit, Mercedes-Benz Sprinter 3500, 23 feet overall length, 2WD, Single axle, Diesel 306,919.00$ 5%
Frontline Communications C-25 Mobile Command Unit, Ford F-650 with custom aluminum body, 26,000 GVWR, 25 feet overall length, 2WD, Single axle, Diesel 477,451.00$ 5% Frontline Communications C-30 Mobile Command Unit, Freightliner M2-106 with custom aluminum body, 33,000 GVWR, 30 feet overall length, 2WD, Single axle, Diesel 587,098.00$ 5% Frontline Communications C-35 Mobile Command Unit, Freightliner M2-106 with custom aluminum body, 33,000 GVWR, 35 feet overall length, 2WD, Single axle, Diesel 669,849.00$ 5% Frontline Communications C-40 Mobile Command Unit, Freightliner M2-106 with custom aluminum body, 54,000 GVWR, 40 feet 9 inches overall length, 2WD, Dual axle, Diesel 735,953.00$ 5% Frontline Communications C-40 Enforcer Mobile Command Unit, Pierce Enforcer custom chassis with custom aluminum body, 40 feet 9 inches overall length, 2WD, Dual axle, Diesel 1,546,944.00$ 5% Frontline Communications C-40 Saber Mobile Command Unit, Pierce Saber custom chassis with custom aluminum body, 40 feet 9 inches overall length, 2WD, Dual axle, Diesel 1,017,416.00$ 5% Frontline Communications C-40 Velocity Mobile Command Unit, Pierce Velocity custom chassis with custom aluminum body, 40 feet 9 inches overall length, 2WD, Dual axle, Diesel 1,259,403.00$ 5% Frontline Communications C-28T Mobile Command Trailer - Custom aluminum body, 28 feet overall length, Dual axle 308,961.00$ 5% Frontline Communications C-35T Mobile Command Trailer - Custom aluminum "gooseneck" body, 35 feet overall length, Dual axle 394,976.00$ 5%
Frontline Communications C-53T Mobile Command Trailer - Custom aluminum body, 53 feet overall length, Dual axle 1,241,546.00$ 5% Frontline Communications C-RTR Refurb/Technology Refresh Command Vehicle - Customer-furnished vehicle, refurbish interior and/or exterior, upgrade technology 292,975.00$ 5%
BME Fire Trucks Sequioa 10 Man Crew Carrier Vehicle 378,634.00$ 5% Category J - Service/Maintenance Plans
Frontline Communications Vehicle Warranty Multiple plans available by model - see Siddons-Martin Warranty/Service Table BME Vehicle Warranty Multiple plans available by model - see Siddons-Martin Warranty/Service Table Pierce Manufacturing Vehicle Warranty Multiple plans available by model - see Siddons-Martin Warranty/Service Table 2 DocuSign Envelope ID: CA3DF45B-515D-4C4F-A2C8-40C0D693B76B 2222
Item Number: 23
City Council / Board of Directors
Written Communications
Meeting of: July 16, 2024
Submitted By:

Scott Webb, Deputy City Manager

Subject:

Dissolution of the Homelessness Solutions Task Force
Recommendation:

That the Honorable City Council find that the Homelessness Solutions Task Force has fulfilled its intent and hereby takes action to dissolve the Task Force until such time reactivation is needed based on a determined need.

Fiscal Impact:

The proposed action does not have a fiscal impact on the budget.

Strategic Plan Goal:

This project aligns with Goal D, Strategy 4 in the 2023-2026 Strategic Plan, "Evaluate the effectiveness of coordination of homelessness services." Background:

In August 2018, the City Council directed staff to schedule a public workshop within a six- month period for discussion regarding homelessness within the City. On January 29, 2019, the City Council held a Special Meeting, including a homeless issue workshop.

During this workshop, staff summarized homeless demographics, impacts, contributing factors, current efforts, and potential policy recommendations. The staff’s presentation was followed by input from public stakeholders.

On February 5, 2019, the City Council directed staff to create a staff-led Homelessness Solutions Task Force (HSTF) with key external stakeholders from the community to seek solutions to homelessness within the City. The City Council charged the HSTF with:

1. Identifying strategic goals and estimated resources needed to accomplish such goals;

2. Identifying funding to implement programs to benefit the homeless community; 2223
3 7
0 2

3. Identifying partnerships that can be leveraged to achieve the goals of preventing homelessness in the City; and

4. Developing policy recommendations and processes to measure the effectiveness of new and existing policies and programs designed to prevent homelessness.

This direction evolved into the development of a strategic action plan to address the issues of homelessness in our community. Following an application and selection period, the HSTF began meeting monthly in May 2019 with the following representatives from the community:

External Stakeholders

1. Emergency or Short Term Shelter

2. Meal-Providing Service

3. Faith-Based Organization

4. Local School District

5. Local Clinic or Hospital

6. Real Estate Community

7. Elderly Community

8. Homeless Community

9. Homeless Youth

10.Alcohol & Drug Services

11.Victims of Domestic Violence
City of Victorville Staff

1. City Manager

2. Deputy City Manager

3. Fire Chief

4. City Planner

5. Code Enforcement Official

6. Director of Community Services

7. Economic Development Manager

8. Homelessness Solutions Coordinator
Other Agencies

1. Chamber of Commerce

2. Board of Supervisors – 1 st District

3. San Bernardino County Housing Authority

4. San Bernardino County Probation

5. San Bernardino County Adult and Aging Services

6. San Bernardino County Behavioral Health Services

7. San Bernardino County Sheriff’s H.O.P.E Team

8. Victorville Police Department – M.E.T. Team
The Homelessness Solutions Coordinator’s role was aimed at helping to develop methodologies that are consistent with best practices, as well as structuring the City's approach to be conducive with the County's Continuum of Care system and other 2224
3 7
0 2
regulatory frameworks. Both the HSTF and the Homelessness Solutions Coordinator played essential roles in outlining strategies to address the complex issues related to homelessness. Following several HSTF meetings and roundtable discussions, the proposed Homelessness Solutions Strategic Action Plan was completed on October 8, 2019 and recommended by the HSTF for adoption by the City Council.

In November 2019, the City Council approved the Homelessness Solutions Strategic Action Plan (hereinafter “Plan”), which is included as Attachment A, Exhibit A to this report. The Plan utilizes a multi-faceted approach to outline actions, goals, and objectives directly related to homeless intervention, outreach, and prevention. The Plan strengthened our City's response system and established a platform that allowed the public and private sector to engage, stay informed, and volunteer. It also identified short- and long-term measures that helped to minimize homelessness and improve community conditions for Victorville residents, businesses, and visitors. The Plan laid the foundation for a systematic response to help get unsheltered homeless individuals off the streets and connected to housing and supportive services. This helped promote self-sufficiency and long-term stability. It also allowed for the collaboration of various stakeholders and the mobilization of public and private resources, including State and Federal grants, to improve policy, programs, and housing resources needed to reduce homelessness.

The HSTF outlined ten measurable goals within the Plan that have been completed or are ongoing initiatives being carried on. The following list outlines the actions that were taken to address, as follows:

1. Creation of a Homelessness Solutions Task Force: Completed in 2019.

2. Hiring a Homelessness Solutions Coordinator: The position was hired in 2019 and a Homelessness Solutions Manager was added during the construction of the Wellness Center, a City-owned 170-bed interim housing navigation center, in 2022.

3. Enhanced Shelter Operations: The City is currently using the Coordinated Entry System (CES) to assess individuals and link them to the most appropriate level of care. Our partnership with the CES lead (211/United Way Inland SoCal) and the regional CES Hub (Family Assistance Program) has helped the City navigate individuals into pathways to permanent housing solutions. The development and commencement of Wellness Center operations has enabled the City to provide a housing-first, low-barrier Navigation and Recuperative Care center with onsite supportive services and housing navigators helping unsheltered individuals and families to access crisis services immediately. The service-enriched shelter operations act as a day center and central hub to triage individuals experiencing homelessness, and those who are at risk of becoming homeless, to appropriate community and government agencies for improved service coordination.

4. Housing First Model: Our low-barrier Wellness Center has provided additional interim housing units, thereby expanding the supply of emergency shelter beds. 2225
3 7
0 2
We have also partnered with the Housing Authority to bring 31 permanent supportive housing units online through the Desert Haven Project. Furthermore, through partnerships, we have referred many clients to local transitional and permanent housing solutions. The City has partnered with a supportive services operator, Symba Center, that has utilized components of rapid rehousing, transitional housing, and permanent housing to stabilize homeless persons and families. The City is also pursuing funding for the development of a phase two of the Wellness Center, which will expand our City's housing and/or services.

5. Homelessness Prevention: The City has expanded partnerships with those who directly assist individuals on the verge of homelessness. Through these partnerships and our enhanced outreach team, the City has practiced responsive and effective prevention assistance that connects education with life skills training and resource assistance.

6. Outreach and Visibility: With guidance from the HSTF, the City has increased public awareness campaigns that educate the public and business community on best practices when engaging with people experiencing homelessness. This is highlighted through our Healthy and Sustainable Giving model. At many of our HSTF meetings, we addressed different discussion topics to help educate staff, non-profits, and the public in various areas related to homelessness. The City enhanced its website to provide information, links, and directions on how to obtain services or how to volunteer. The City continues to support community outreach efforts and collaborate with local agencies to link services better and leverage resources.

7. Trespassing/Private Property: Utilizing guidance from our Code Enforcement Official and the Task Force, our Homeless Engagement Team works closely with property owners and encourages business owners to be a part of the solution, utilizing 602 Notices and trespass agreements to help alleviate the negative impact of homelessness. Our City has also created awareness campaigns to help educate the public on ways to find more sustainable ways to assist those experiencing homelessness. Two notable campaigns were Healthy and Sustainable Giving and Positive Change not Spare Change. To further our efforts towards a balanced approach to addressing homelessness, the City Council approved an ordinance, that became effective in January 2024, to address trespassing, camping, and public infrastructure evenly. This ordinance would not have been possible without the discussions and feedback received from the HSTF since its inception.

8. Vandalism, Theft and Misuse: The City Council has taken action to update the municipal code to address the misuse of public infrastructure and property. Our Homeless Engagement Team (HET) has established methods to successfully address issues related to disruption of public services and misuse of public and private infrastructure or property. One specific example is our enhanced outreach and case management that educates our unhoused individuals about service availability and anti-camping laws.
2226
3 7
0 2

9. Homeless Encampments: The City continues demonstrating its commitment to assisting our homeless population, impacted residents, and business owners. It has expanded outreach efforts by assigning four full-time Homeless Engagement Team (HET) Officers and a HET Supervisor. Our engagement officers continue establishing positive relationships with our homeless population, encouraging them to accept shelter and services and helping them take advantage of available local resources like substance abuse counseling, care for their animals, job placement, and other living assistance. Our approach to homeless outreach is an essential community service that allows our engagement officers to build rapport, trust, and improved communication with our local homeless community and assist impacted residents and business owners. The HET Team is based out of the Wellness Center and helps provide clients with a warm hand-off and immediate relief from living on the streets while providing them safety and links to community support services.

In 2023, we added a partnership with our Wellness Center supportive services provider, Symba Center. Symba Center provides additional outreach, engagement, case management, and street medicine resources for our city’s most vulnerable population through this partnership. We also collaborate with the County’s outreach teams, specifically the Sheriff’s HOPE Team and the INN Roads team to provide additional resources for our unhoused population. Lastly, we have established a robust client management system and improved data collection to provide more efficient services and reporting.

10.Strategic Partnerships: The City has partnered with numerous non-governmental agencies to assist our unsheltered and sheltered populations. Further, we have partnered with government agencies to help address homelessness in our City.

Most recently, our City partnered with the County of San Bernardino to provide outreach and engagement services in specific encampment areas and assist clients with getting linked to permanent housing solutions via monies from the Encampment Resolution Funding Program. The City will continue to work collectively with community stakeholders and government agencies to streamline processes, secure funding and improve coordination to mitigate homelessness.

Future agreements will be established and ongoing meetings at local, regional, and county levels will be held to outline the purpose and scope of partnerships, reduce duplication of services, and establish a regional focus.

During the 2024 Point-In-Time Count (PITC), the City saw a reduction in transitional housing, county voucher programs, motel voucher availability, and the closure of the High Desert Homeless Services family shelter. As San Bernardino County saw a 2.6% increase in unsheltered individuals, the City saw only a 1% increase. Considering the margin of error and the fact that 43% of the individuals counted in Victorville indicated they were homeless for the first time in the last 12 months, a trivial PITC increase from 607 to 611 shows a positive trajectory in our efforts to combat homelessness. With the introduction of our new City ordinance, the opening of our Wellness Center Campus, and 2227
3 7
0 2
increased outreach efforts, 2025 PITC data should begin to reflect positively on our efforts.

Discussion:

The HSTF was pivotal in establishing guidance and creating a roadmap to address the ongoing, systematic social issues related to homelessness and its impact on the community. Nonetheless, the Task Force was never intended to be a standing committee and was explicitly created to address the following four tasks at the Council’s request:

1. Identifying strategic goals and estimated resources needed to accomplish such goals;

2. Identifying funding to implement programs to benefit the homeless community;

3. Identifying partnerships that can be leveraged to achieve the goals of preventing homelessness in the City; and

4. Developing policy recommendations and processes to measure the effectiveness of new and existing policies and programs designed to prevent homelessness.

After a thorough review of the actions taken and the guidance provided by the HSTF, as well as actions taken by City staff and the City Council, these four goals have been noticeably accomplished. While homelessness remains a top priority for the City, the HSTF has provided a foundational guiding document, in the Homelessness Solutions Strategic Action Plan, that gives the City a framework to build upon. Therefore, staff recommends that the City Council approve the dissolution of the HSTF, with the acknowledgement that the HSTF could be reactivated in the future should the need arise.

Moving forward, staff will continue partnerships with outside entities and continue to have a footprint at the community, regional, and county levels. In addition to having City staff available to engage with members of the public, the public now has Desert Regional Steering Committee (DRSC) meetings available to engage at the local and regional level.

Regional committees, such as the DRSC, were created by the County’s Interagency Council on Homelessness in 2020 and meet monthly. Moreover, the City is emphasizing efforts related to the beginning stages of our Community Revitalization and Investment Authority (CRIA), which will help revitalize our disadvantaged communities through planning and financing infrastructure improvements, economic development activities, and affordable housing. Staff will also continue to address homelessness through our citywide Strategic Action Plan, which incorporates reducing homelessness as a goal and providing periodic updates to the Council.

Staff is available for any questions.

Attachments: A. Resolution No. 19-089: Establishing a Homelessness Solutions Strategic Action Plan
2228
Attachment A
Resolution No. 19-089
2229
2230
2231
2232
2233
2234
2235
2236
2237
2238
2239
2240
2241
2242
2243
2244
2245
2246
Item Number: 24
City Council / Board of Directors
Written Communications
Meeting of: July 16, 2024
Submitted By:

Scott Webb, Deputy City Manager
Fredy Bonilla, City Engineer

Subject:

Lighting Enhancement Course of Action for Old Town Victorville Recommendation:

That the honorable City Council direct the City Manager to:

1. Begin working with Southern California Edison to initiate and implement a design to add additional streetlights to existing infrastructure within public streets, alleys, and parking lots within the Old Town Specific Plan; and

2. Include within the Seventh Street Old Town Streetscape Improvement Project of the 2023-2026 Strategic Plan, a lighting study and proposed lighting standards for development throughout the Old Town Specific Plan area.

Fiscal Impact:

There is not a direct fiscal impact associated with this item.

In the event Southern California Edison adds additional lights this fiscal year, there is $90,261.07 in budgeted funds for new streetlights that could be expended for this purpose under the City Manager’s purchasing authority. $60,261.07 would come from Fund 358 (Development Impact Fees) and $30,000.00 from Fund 200 (Street Lighting Assessment District), as depicted below:

Account Description Available Budget
3580010-55330-62075 Development Impact Fees $60,261.07
2004501-55080-62074 Street Lighting Assessment District $30,000.00 Within this calendar year, staff anticipates bringing forward for City Council consideration and approval a professional services contract for the design services of the Seventh Street Old Town Streetscape Improvement Project that could include, if directed by the City Council, a lighting study and proposed lighting standards for future development 2247
3 6
8 3
throughout the Old Town Specific Plan. This design contract is planned to be funded by Measure P.

Strategic Plan Goal:

Approval of staff’s recommendation will foster the following goals outlined in the City of Victorville Strategic Plan 2023-2026:
• Goal B (Public Safety) – Improved lighting fosters better public safety for vehicles and pedestrians by enhancing visibility.
• Goal C (Community and Economic Development) – Lighting plays a crucial role in spurring economic activity by creating a more inviting and vibrant atmosphere. Well- illuminated commercial areas attract more visitors, making the area more appealing to both consumers and investors. Additionally, the enhanced safety provided by good lighting allows businesses to operate with less risk of vandalism or theft. Therefore, improved lighting not only makes areas safer, but also stimulates the economy.

Background:

In response to concerns raised by community members regarding the lack of lighting in Old Town, the City Council agendized a discussion of the issue at their April 16, 2024 meeting. Following a discussion of the issue, it was moved by Council Member Jones and unanimously approved by a 4-0 vote to direct the City Manager to undertake a study, at whichever level he deemed appropriate, to identify if lighting should be addressed in a different way in Old Town.

The adopted 2018 Old Town Specific Plan (OTSP) is a foundational zoning document that represents a blueprint for growth over the next 20-30 years. The purpose of the OTSP is to serve as a tool for revitalization of the Old Town, presenting an opportunity to transform this area into a unique, vibrant, mixed-use focal point for the region. Pursuant to Section 6.3.8 OTSP, basic lighting guidance is provided as follows:
• Lighting should provide visual interest and security and complement the project’s architectural and landscape design.
• Pedestrian pathways and building entrances should be sufficiently lit to enhance public safety and security in those areas
• To protect the night sky and prevent off-site glare, exterior light fixtures must shield the light and direct illumination downward utilizing narrow spectrum LED lighting. • Energy-efficient lighting solutions should be considered.

This OTSP lighting guidance falls short of providing specific lighting level standards that would achieve the visual interest and security that is being pursued within this unique, mainly commercial area. It is not uncommon to establish unique public improvement standards, such as for lighting, within Specific Plans to create unique spaces that achieve the desired objective of the planned area. Without specified lighting standards for Old Town, new development would be guided by the Victorville Municipal Code Section

17.44.230 standard spacing of cobra head light fixtures spaced approximately 300 feet apart.
2248
3 6
8 3
The Illuminating Engineering Society (IES) is recognized as the technical and educational authority on illumination. Various public entities, such as the Occupational Safety and Health Administration, rely on the recommendations of IES to create their own standards.

Based on staff’s preliminary assessment of IES’s recommendations, exterior lighting within shopping centers, especially where security is a concern, should be illuminated more than areas that experience low pedestrian usage or have no security concerns. The minimum average level of lighting recommended by IES for this type of commercial experience would range from 1 to 3 footcandles. A footcandle is a standard unit measurement of light on a square foot surface from a source of light. In contrast, the average existing lighting level along Seventh Street between D Street and Forrest Avenue is between 0.55 and 0.72 footcandles based on a recent staff survey conducted in June 2024 and a prior 2019 survey conducted by IDS Electrical Engineers.

In 2019, the City improved lighting within Old Town with the conversion of existing street lights to LED and the addition of 31 new street lights on wood poles on streets and alleys.

Even with these improvements, staff conducted a broader survey of lighting levels in June 2024 of the streets and alleys within the commercial core of Old Town generally between Sixth Street and Eighth Street from Forrest Avenue to D Street and found the average illumination to be 0.48 footcandles.

Discussion:

Based on IES recommendations and the results of the lighting surveys mentioned in the background section of this report, staff would deem further improvements to lighting levels as an appropriate course of action for this unique commercial area.

Staff is recommending a two-tiered approach to enhance lighting as follows:
• First, immediately add lights within a six-month period to further illuminate public streets, alleys, and parking lots by attaching the cobra head light fixtures mainly to existing wood poles. Potential locations of lights are indicated in red on the attached map (Attachment A). Other lighting enhancements to existing nostalgic lighting, such as replacement of existing lamps, could also be explored. Since Southern California Edison (SCE) maintains the streetlights, the task would involve working with SCE and would follow the same process as in 2019, when the City added 31 lights to the general area.
• Secondly, staff will include within the Seventh Street Old Town Streetscape Improvement Project of the 2023-2026 Strategic Plan, a lighting study with proposed lighting standards throughout the Old Town Specific Plan area to guide future development. The Request for Proposal (RFP) for qualified design firms to complete this scope of work will be circulated this summer and a selection would be brought for City Council consideration in the Fall of 2024.

In addition to the lighting scope of work, the RFP will include the design of conceptual streetscape plans for the entire Specific Plan Area, based on street 2249
3 6
8 3
classification, to be reviewed and approved by the Planning Commission and City Council. The approved conceptual plans will then be developed into full construction plans for the length of Seventh Street from the general area of Yucca Avenue/Center Street to D Street. These construction plans will also address ancillary improvements to feeder streets (Forrest, A, B and C Streets) that intersect with Seventh Street in one block in each direction from Seventh Street as well as enhancements to two existing public parking lots at Seventh and B Street and C and 8th Street.

These lighting improvements and design changes are intended to foster a safer community with increased business activity, which are strategic goals of the City.

Staff remains available for any questions the Council may have.

Attachments: A. Old Town Street Light Map
2250

ATTACHMENT A
2251

2252
Item Number: 25
City Council / Board of Directors
Written Communications
Meeting of: July 16, 2024
Submitted By:

Donna Meester, Community Services Director

Subject:

Preliminary Feasibility Assessment - Community Swimming Pool for South Side of City Recommendation:

Any action is at the discretion of the Honorable City Council.

Fiscal Impact:

There is no fiscal impact associated with this preliminary feasibility assessment.

Strategic Plan Goal:

Evaluating the feasibility of a new Community Swimming Pool in the south side of the city aligns with Strategic Goal E, Invest in Infrastructure, and Strategic Goal F, Communication and Outreach. Exploring the feasibility to offer more aquatic amenities could result in additional infrastructure, activities and opportunities for positive interaction within the community.

Background:

At the City Council meeting of June 4, 2024, it was moved by Mayor Pro Tem Harriman and unanimously approved to visit the feasibility of adding a community swimming pool on the south side of the City.

Discussion:

This item is being presented to Council to further consider options for the potential addition of aquatics facilities in the southern portion of the city. Victorville is approximately 14 miles from the farthest point north at the Southern California Logistics Airport (SCLA) to the southern-most point; resulting in a city midpoint at seven (7) miles, approximately located at Hopland St. However, if we exclude the northern-most area of SCLA due to being largely commercial/industrial, the city is approximately nine (9) miles north to south; resulting in mid-point of approximately five (5) miles, located near Palmdale Road/Highway 18 (see Attachment A). Thus, for the purpose of this review, consideration 2253
3 6
9 9
was given to all opportunities south of Highway 18. There are six (6) existing City parks located in the south side of the city: Eagle Ranch, Hollyvalle, Liberty, Mesa Linda, Mojave Vista, and Sunset Ridge (Attachment B). Most of these parks are either owned by school districts and/or operated under a joint use agreement that would require coordination with school districts.

Depending on pool size, the area needed for a community pool is approximately two (2) to four (4) acres. A standard competition size pool is 13,455 sq. ft. or .3 acres. Additionally, deck size, amenities (e.g. restrooms, showers, lockers, tables, and seating), and parking require additional space. Per the City’s “Parks & Recreation Master Plan Appendix F: Infill Analysis” (Attachment C), the following table indicates the available infill acreage at the parks located in the southern side of the city.

Eagle Ranch .75 Acres
Hollyvale .16 Acres
Liberty .37 Acres
Mesa Linda .00 Acres
Mojave Vista .05 Acres
Sunset Ridge .58 Acres
Based on this information, Hollyvale, Liberty, Mesa Linda, and Mojave Vista parks do not meet the space requirements for a community pool. Eagle Ranch and Sunset Ridge have minimal infill opportunity for a pool; however, it is important to note this infill opportunity may not support the space needed for the related amenities and parking.

The Parks & Recreation section of the City’s approved Capital Improvement Plan (Attachment D) lists the current priorities from the Parks & Recreation Master Plan. The priorities include the addition of a splash pad at Sunset Ridge which would grossly reduce the infill availability, eliminating it as a candidate as the future site of a community pool, a pool complex on the west side of the city, as well as other amenities such as a sports complex, skatepark, and dog park.

Based on the infill data above, existing parks may not be a viable option for a new community swimming pool. The City would more likely need to acquire land or develop on any other City-owned land located in the designated area. The City owns four (4) parcels in the northern portion of the southern end of the city, of which three (3) meet the minimum space requirement. All parcels are in the general area north of Mojave Vista Park (see map in Attachment E).

Community Services staff are also in discussion with the Victor Valley Union High School District for the use of the pool at Silverado High School, which is located in the south side of the city. This pool is competition-sized with restrooms, lockers, showers, and a large deck area for tables and chairs. This type of shared use would align with Objective 3.6.c. of the City’s Parks & Recreation Master Plan, “Identify partnerships with other organizations to address the need of providing additional space for programming in the community.”
2254
3 6
9 9
Given the minimal infill opportunities and the timeline associated with the design and construction of an aquatics facility, staff consider the shared-use opportunity at Silverado High School as the most feasible and cost effective way to expand pool availability in the south side of the Victorville community as early as next summer.

Staff remains available for any questions or comments.

Attachments: A. City Maps with Midpoints
B. Parks and Facilities Map - South
C. Parks and Recreation Master Plan Infill Analysis
D. Parks & Recreation Section of the Capital Improvement Plan E. City Owned Parcels in the South Side of the City
2255

Attachment A

2256

City Most Northern point to most Southern point 14 miles 2257

City Northern, after SCLA, to most Southern 9 miles
City Center at approximately 4.5 miles, Palmdale Road
2258

Attachment B

2259
2260

Attachment C

2261
Parks and Recreation Master Plan
December 2020
2262
177
aPPendIX f: InfIll analYsIs/maPs
Table 23: Victorville Parks Amenity Infill Table
Victorville Parks Master Plan
Amenity Infill Matrix
Brentwood Park
Eagle Ranch Park
Grady Trammel Park
Green Tree Golf Course
Hook Park
20,584 7,720 73,795 5,446 1,806 62,180 17,995 11,187 32,319 120,108 43,802 1,777 1,547 5,754 19,829 6,888 6,427 11,114 5,355 Traditional Recreation Facilities for Infill Typical S F 1 2 11 21 2 3 1 1 21 1 211 212 Ball Field 20,000‐100,000 • • • • • •
Sml Softball Field (170'‐200' Fence) 20,000‐27,750 • • • Lrg Softball Field/Sml Baseball Field (200'‐230' Fence) 25,000‐35,000 • • • Med Baseball Field (300'‐350' Fence) 39,500‐61,500 • •
Lrg Baseball Field (350'‐400' Fence) 83,000‐105,500
Bocce Ball/Shuffleboard 5,000‐10,000 • • • • • • • • • • • • • • • • Community Center/Gym 25,000‐70,000 • • • • •
Court/Rink Sports 2,000‐5 , 0 0 0 ••• • •••• • • • • • • • • Dog Park 10,000‐75,000 • • • • • • • • • •
Outdoor Gym and Exterior Exercise Areas 5,000‐20,000 • • • • • • • • • • • • • • • • Pickleball 2,500‐3 , 5 0 0 • • •• • • • • • • ••• •••
Picnic Areas 500‐1 , 5 0 0 • • •• •• • • • • •• • ••• ••• Playgrounds 4,000‐6 , 0 0 0 • • •• • • • • • • ••• •••
Soccer Field 4,000‐75,000 • • • • • • • • • • • • • • • • Sml Soccer Field (6U & 8U) 4,050‐11,250 • • • • • • • • • • • • • • • • Med Soccer Field (10U & 12U) 25,200‐36,000 • • • •
Lrg Soccer Field (14U & 16U+) 54,000‐86,400+ • •
Tennis 7,200‐28,000 • • • • • • • • • • •
Volleyball 4,000‐16,000 • • • • • • • • • • • • • •
Non‐Traditional Recreation Facilities for Infill for Infill Adventure Playgrounds 4,000‐6 , 0 0 0 • • •• • • • • • • ••• ••• BMX Course 40,000‐60,000 • • • •
Community Garden 2,000‐40,000 • • • • • • • • • • • • • • • • Disk Golf Course 50,000‐200,000 • • •
Pump Track/Bike Skills Course 10,000‐20,000 • • • • • • • • • • Rope/Adventure/Skills Course 5,000‐50,000 • • • • • • • • • • • • • • • • Skate Spot 4,000‐10,000 • • • • • • • • • • • • • • • • Doris Davies Park
Liberty Park
Eva Dell Park
Hollyvale Park
Las Haciendas Park
Avalon Park
Center Street Park
7/23/2020

Page 1 ends

Victorville City CouncilJuly 16, 2024

Victorville City Council
July 16, 2024