Attachment B
ADD LOCAL CONTACT DETAILS
Dear Celeste,
I hope this email finds you well.
We would like to formally inform you that Securitas Technology is withdrawing its bid for Project # CC25-022: City Hall Security Camera Site. Unfortunately, after a thorough review of our proposal, we identified a significant mathematical error that directly impacts our ability to fulfill the requirements of the RFP without incurring substantial financial loss to our company.
As a responsible business partner, we believe it is important to acknowledge this issue and take the appropriate steps to mitigate any further complications. We sincerely apologize for any inconvenience this may cause and appreciate your understanding.
Should you have any questions or require further clarification, please do not hesitate to contact me directly.
Thank you for the opportunity to participate in this process.
Zack Allen
Account Executive
1511 E Orangethorpe Ave
Fullerton, CA 92831
Direct (714) 227-4762
Email [email protected]
Attachment C
1 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
CONSTRUCTION CONTRACT BY AND BETWEEN
THE CITY OF VICTORVILLE
AND
VETERANS COMMUNICATION SERVICES, INC.
FOR
CITY HALL SECURITY CAMERA EXPANSION
PROJECT CC25-022
THIS CONSTRUCTION CONTRACT (the “Contract”) dated ______________________ for reference purposes only, is made and entered into by and between the City of Victorville, a municipal corporation and charter city located in the County of San Bernardino, State of California, hereinafter referred to as the “ City”, and Veterans Communication Services, Inc. , a California corporation, hereinafter referred to as the “Contractor”. City and Contractor are sometimes hereinafter individually referred to as a “Party” and collectively referred to as the “Parties.”
RECITALS
WHEREAS, the City requires City Hall Security Camera Expansion as more fully described in the solicitation documents issued by the City for Project No. CC25-022 (the “Project”); and
WHEREAS, on August 23, 2024, the City issued a Notice Inviting Bids and solicitation documents to prospective bidders for the Project. In response, Contractor submitted a Bid which the City determined to be the lowest responsive and responsible bid; and
WHEREAS, Contractor is a duly organized corporation in good standing in the State of California, and represents that it has the background, knowledge, experience, expertise and resources to construct and otherwise complete the Project as specified in the Contract Documents, including the furnishing of all labor, materials, equipment, and services (the “Work”) and other obligations encompassed by this Contract; and
WHEREAS, at its meeting held on ________________________, the Victorville City Council duly accepted Contractor’s Bid for the Project and directed that a written Contract the Project be entered into with Contractor; and
WHEREAS, in light of the facts set forth above and the certifications made by Contractor as part of its Bid, the City desires to retain Contractor to perform the Work required to complete the Project as set forth in this Contract and in the Contract Documents, as hereinafter described.
NOW, THEREFORE, IN CONSIDERATION OF THE COVENANTS, CONDITIONS, AND
PROMISES CONTAINED HEREIN AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION, THE PARTIES HERETO AGREE AS FOLLOWS:
Section 1. RECITALS
The Recitals set forth above are true and correct and are hereby incorporated into this Contract by this reference, as though set forth herein.
2 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
Section 2. CONTRACT DOCUMENTS; ORDER OF PRECEDENCE
a. Contract Documents. The Contract Documents consist of the following documents, all of which are either attached hereto as exhibits or are incorporated herein by this reference.
Said Contact Documents are complementary; what is called for in one is binding as if called for in all, and together constitute Contractor’s performance obligations:
(1) Change Orders and supplemental agreements issued and approved by the City; whichever occurs last;
(2) This executed Contract and its attached Exhibits, subject to the limitations in Sections 9 and 20 with respect to Exhibit “A” (Contractor’s submitted Bid Proposal as accepted by the City);
(3) Bid Addenda issued by the City;
(4) Notice Inviting Bids and Instructions to Bidders;
(5) Technical Specifications/Scope of Work (Bid Package Section C) (6) Federal Requirements And Federal Forms (Bid Package Section B) (7) Special Provisions;
(8) Bid Forms (Bid Package Section D);
(9) Faithful Performance Bond;
(10) Payment Bond.
b. Interpretation. Except as may be set forth elsewhere in this Contract, in the event of any confl ict between any of the Contract Documents, the document highest in the order of precedence (from highest to lowest), as set forth in Subsection a. above shall control.
c. Definitions. Unless specifically defined or assigned a meaning in this Contract, or the context clearly indicates otherwise, capitalized terms herein shall have the meaning assigned to them in the “Definitions” section of the Special Provisions.
Section 3. CONTRACTOR’S OBLIGATIONS
Contractor will perform all of the Work required for the Project, as specified in the Contract Documents. Contractor must provide, furnish, and supply all things necessary and incidental for the timely performance and completion of the Work, including all necessary labor, materials, supplies, tools, equipment, transportation, onsite facilities, and utilities, unless otherwise specified in the Contract Documents. Contractor must use its best efforts to diligently prosecute and complete the Work in a professional and expeditious manner and to meet or exceed the performance standards required by the Contract Documents, and to the satisfaction of Tony Camargo, Deputy City Manager, or his designee (hereinafter the “Project Manager”).
Section 4. CONTRACT PRICE; PAYMENT AND RETENTION
a. As full and complete compensation for Contractor’s timely performance and completion of the Work in strict accordance with the terms and conditions of the Contract Documents, City will pay Contractor Three Hundred Fourteen Thousand One Hundred Seven and 03/100 Dollars, ($ 314,107.03) (the “Contract Price”) for all of Contractor’s direct and indirect costs to perform the Work, including all labor, materials, supplies, equipment, taxes, insurance, bonds and all overhead costs, in accordance with Contractor’s Bid Proposal (attached hereto as Exhibit “A”) subject to the provisions of this Contract and the Contract Documents. 3 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022 b. P
rocedures relating to payment and retention are set forth in the Special Provisions.
Section 5. CONTRACT TIME; NOTICE TO PROCEED
a. Contract Time. The Work under this Contrac t shall be diligently prosecuted to completion before the expiration of One hundred Eighty (180) WORKING DAYS, commenc ing after the date specified in the City’s issued Notice to Proceed (the “Contract Time”). The City will not issue a Notice to Proceed to the Contractor until this Contract, including bonds and insurance documents, have been executed and/or approved by the City. b. Notice to Proceed. No work, service, material, or equipment shall be performed or furnished under this Contract unless and until a Notice to Proceed has been given to the Contractor by the City. Contractor shall commence Work pursuant to the Contract Documents and as directed by the City in the Notice to Proceed, and diligently execute the same to completion within the Contract Time.
Section 6. DISPUTE RE SOLUTION AND CLAIMS PROCEDURES
a. Public Contract Code Section 9204. For purposes of any Public Works Claims filed by a Contractor or Subcontractor (as those terms are defined in Public Contract Code Section 9204) under this Contract, the claims procedures in Public Contract Code Section 9204 (“Section 9204”) and the provisions of this Section shall apply. Public Contract Code Section 9204 is set forth in full in Section 2-10 of the Special Provisions. (1) In the event of a Section 9204 Public Works Claim, Contractor may not stop worki ng pendi
ng resolution of the dispute, but must continue to comply with its duty to diligently prosecute the performance and timely completion of the Work during the Section 9204 process.
(2) Any Public Works Claims not resolved by the Section 9204 procedures (and/or any tort claims) shall be subject to Section 2.24.020 of the Victorville Municipal Code (“VMC”) and the provisions of the Government Claims Act (Government Code section 810 et seq.) .
b. For
disputes or claims that do not constitute Public Works Claims, City and Contractor agree to comply with the following process:
• E
ach Party shall designate a senior management or executive level representative to negotiate any dispute.
• The r
epresentatives shall attempt, through good faith negotiations, to resolve t he di
spute by any means within their authority.
• I
f the issue remains unresolved after ten (10) days of good faith negotiations, the Parties shall attempt to resolve the disagreement by negotiation between the legal counsel for each Party. If the above process fails, the Parties may mutually agree to engage in non-binding mediation or non-binding arbitration in which the Parties equally share the costs of any mediator or arbitrator, or may proceed with suit or other 4 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
remedies, subject to the provisions of subparagraph (5) of this Subsection and other applicable provisions and laws.
• The alternative dispute resolution process set forth herein is a material condition to Contract and must be exhausted as an administrative remedy prior to either Party initiating legal action.
• Compliance with VMC Section 2.24.020 and the provisions of the Government Claims Act (Government Code section 810 et seq.) is also required prior to initiating suit again the City.
Section 7. TERMINATION OF CONTRACT FOR CONVENIENCE
a. The City may, by providing thirty (30) days' advance written notice to Contractor, terminate this Contract in whole or in part, whenever the City shall determine that such termination is in the best interests of the City, or when it becomes impracticable or impossible to proceed, or because of conditions or events beyond the control of the City. Any such termination shall be effected by delivery to Contractor of a Notice of Termination for Convenience, specifying the extent to which performance of Work under this Contract is terminated, and the date upon which such termination becomes effective. Upon such termination, the obligations of the Contractor for portions of the Work already performed shall continue.
b. Upon receipt of a Notice of Termination for Convenience, the Contractor shall, unless the notice directs otherwise, do the following:
(1) Immediately discontinue the Work to the extent specified in the notice. (2) Place no further orders or subcontracts for materials, equipment, services, or facilities, except as may be necessary to complete such portion(s) of the Work that are not to be discontinued.
(3) Promptly cancel, on the most favorable terms reasonably possible, all subcontracts to the extent that they relate to the performance of the discontinued portion of the Work. (4) Thereafter do only such Work as may be necessary to preserve and protect the Work already in progress and to protect materials, plants, and equipment on the Project site or in transit thereto.
c. Upon such termination, the Contractor will be paid without duplication for:
(1) Work completed in accordance with the Contract Documents prior to the effective date of the Notice of Termination for Convenience;
(2) Reasonable costs incurred in settlement of terminated contracts with Subcontractors, suppliers and others; and
(3) Reasonable expenses directly attributable to termination.
The Contractor shall submit a final termination settlement proposal to the City no later than ninety (90) days from the effective date of termination, unless extended in writing by the City, upon written request by the Contractor. If the Contractor fails to submit a proposal, the City may determine the amount, if any, due the Contractor as a result of the termination. The City will pay the Contractor the amount it determines is reasonable. If the Contractor disagrees with the amount determined by the City as being reasonable, the Contractor shall provide notice to the City within thirty (30) Days of 5 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
receipt of payment. Any amount due shall be subject to the dispute resolution provisions set forth in the Contract Documents.
d. Contractor shall include provisions in all of its subcontracts, purchase orders, and other contracts permitting termination for convenience by Contractor on terms that are consistent with this Contract and that afford no greater rights of recovery against Contractor than are afforded to Contractor under this Section 7.
Section 8. TERMINATION FOR CONTRACTOR’S DEFAULT
a. Default. The City may terminate this Contract for Contractor’s default as set forth in this Section. The City will consider the Contractor in default of this Contract if, prior to the City’s acceptance of the Work, the Contractor:
(1) becomes insolvent, assigns its assets for the benefit of its creditors, is unable to pay its debts as they become due, or is otherwise financially unable to complete the Work; (2) abandons the Work by failing to report to the Work site and diligently prosecute the Work to completion;
(3) disregards written instructions from the City or materially violates provisions of the Contract Documents;
(4) fails to prosecute the Work according to the schedule approved by the Engineer, (5) disregards laws or regulations of any public body having jurisdiction, or (6) commits continuous or repeated violations of regulatory or statutory safety requirements.
Notices, and other written communications regarding default between the Contractor, the City, and the Surety shall be transmitted in accordance with Section 21 of this Contract.
b. Notice and Opportunity to Cure. The City will issue a written notice to cure the default to the Contractor and its Surety. The Contractor shall commence satisfactory corrective actions within five (5) Working Days after receipt. If the Contractor fails to commence satisfactory corrective action within five (5) Working Days after receipt of the notice to cure, or to diligently continue satisfactory and timely correction of the default thereafter, the City will consider the Contractor in default of the Contract and:
(1) will terminate the Contractor’s right to perform under the Contract by issuing a written notice of termination for default to the Contractor and its Surety; (2) may use any materials, equipment, tools or other facilities furnished by the Contractor to secure and maintain the Work site, and
(3) may furnish labor, equipment, and materials the City deems necessary to secure and maintain the Job Site;
c. Remedies Cumulative. The provisions of this Section shall be in addition to all other legal rights and remedies available to the City. Termination of this Contract will not relieve the Surety of its obligation for any just claims arising out of the Work performed.
Section 9. PREVAILING WAGE
a. Compliance with State Prevailing Wage Requirements. Pursuant to California Labor Code Section 1773, the City has obtained from the Director of the Department of Industrial Relations (“DIR”) the general prevailing rate of per diem wages and the general prevailing wage 6 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
rate for holiday and overtime work applicable in San Bernardino County, California, for each craft, classification, or type of worker needed to perform the Work required under this Contract. A copy of these prevailing wage rates are on file at the City’s Finance Department/Purchasing Division and shall be made available for review to any interested party on request. In addition, a copy of the prevailing rate of per diem wages may be obtained via the internet at:
http://www.dir.ca.gov/DLSR/PWD. Contractor and all Subcontractors shall pay not less than said specified State of California rates to all workers employed by them in the execution of the Work contemplated by this Contract, including workers performing Work described in or encompassed by California Labor Code (“ Labor Code”) Sections 1720 through 1720.9, 1771, and 1772.
Contractor shall be solely responsible for using the correct and current prevailing wage rates and performing accordingly. An error on the part of any awarding body does not relieve the Contractor from the responsibility for payment of the correct prevailing wage, or compliance w ith the maintenance and inspection of payroll records, posting of prevailing wage rates at the work/job site, employment of apprentices, and other requirements of Labor Code Section 1720 et seq.; Labor Code Section 1810 et seq.; California Code of Regulations, Title 8, Section 16000 et seq.; and all other applicable State labor laws.
b. Conflict. It is further expressly agreed by and between the Parties hereto that should there be any conflict between the terms of this Section 9 and the provisions of Exhibit “A”, the terms of this Section 9 shall control, and nothing herein shall be considered as an acceptance of the terms of Contractor’s submitted Bid Proposal conflicting with the requirements of this Section 9.
c. Payroll Records. Contractor must comply with the provisions of Labor Code sections 1776 and 1812 and all implementing regulations, including without limitation, those set forth in Title 8 of the California Code of Regulations, Section 16000 et seq . (hereinafter the “Regulations”), which are fully in corporated by this reference, including requirements for electronic submission of payroll records to the DIR.
(1) Contractor and Subcontractor Obligations. Contractor and each Subcontractor must keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed in connection with the Work. Each payroll record must contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following:
(a) The information contained in the payroll record is true and correct; and
(b) Contractor or the Subcontractor has complied with the requirements of Labor Code Sections 1771, 1811, and 1815 for any Work performed by its employees on the Project.
(2) Certified Record. A certified copy of an employee’s payroll record must be made available for inspection or furnished to the employee or his or her authorized representative on request, to City, to the Division of Labor Standards Enforcement, to the Division of Apprenticeship Standards of the DIR, and as further required by the Labor Code.
(3) Enforcement. Upon notice of noncompliance with Labor Code § 1776, Contractor or Subcontractor has ten days in which to comply with the requirements of this section. If 7 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
Contractor or Subcontractor fails to do so within the ten- day period, Contractor or Subcontractor will forfeit a penalty of $100.00 per day, or portion a day, for each worker for whom compliance is required, until strict compliance is achieved. Upon request by the Division of Apprenticeship Standards, or the Division of Labor Standards Enforcement, these penalties will be withheld from payments then due to Contractor.
d. Apprentices. Contractor is responsible for compliance with the requirements governing employment and payment of apprentices, as set forth in Labor Code section 1777.5, which is fully incorporated by reference.
e. Notices. Pursuant to Labor Code section 1771.4, Contractor is required to post all Job Site notices, including prevailing wage rates and other notices as required by regulation.
f. Other Labor Requirements. Contractor has the responsibility for and shall comply with all other requirements of California Labor Code Section 1720 et seq., Labor Code Section 1810 et seq., the Regulations, and all other applicable State labor laws. Contractor further acknowledges and agrees that it will be independently responsible for reviewing the applicable laws and regulations and effectuating compliance with those laws. Contractor shall require the same of all its Subcontractors. Pursuant to Labor Code Section 1735, Contractor shall not discriminate in the employment of persons upon public works on any basis listed in subdivision (a) of Section 12940 of the Government Code, as those bases are defined in Sections 12926 and 12926.1 of the Government Code, except as otherwise provided in Section 12940 of the Government Code. Every contractor for public works who violates this Section is subject to all the penalties imposed in Labor Code Sections 1720 through 1861.
g. Statutory Penalties. The statutory penalties for failure to pay prevailing wage or to comply with State wage and hour laws will be enforced as follows:
(1) Pursuant to Labor Code section 1775, the Contractor and any Subcontractor under it shall forfeit as a penalty to the City not more than Two Hundred Dollars ($200.00), for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate as determined by the Director of the DIR for such work or craft in which such worker is employed for any public work done under this Contract by it or by any Subcontractor under it. The difference between such prevailing wage rate and the amount paid to each worker for each calendar day or portion thereof, for which each worker was paid less than the prevailing wage rate, shall be paid to each worker by the Contractor.
(2) Pursuant to Labor Code Section 1813, Contractor or Subcontractor shall, as a penalty to the City, forfeit twenty -five dollars ($25) for each worker employed in the execution of this Contract by the respective Contractor or Subcontractor for each calendar day during which the worker is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week, except as specified in Labor Code Section 1815. In accordance with the provisions of Labor Code Sections 1810 et s eq., eight (8) hours is the legal working day.
h. DIR Monitoring. Pursuant to Labor Code Section 1771.4, the Contract for this Project is subject to compliance monitoring and enforcement by the DIR.
i. DIR Registration . Pursuant to Labor Code sections 1725.5 and 1771.1, the Contractor and its Subcontractors must be registered with the DIR prior to the execution of a 8 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
contract to perform public works. By entering into this Contract, Contractor represents that it is aware of the registration requirement and is currently registered with the DIR. Contractor shall maintain a current registration for the duration of the Project. Contractor shall further include the requirements of Labor Code sections 1725.5 and 1771.1 in any subcontract and ensure that all Subcontractors are registered at the time this Contract is entered into and maintain registration for the duration of the Project.
Section 10. LIQUIDATED DAMAGES
If Contractor fails to complete the Work within the Contract Time, City will assess liquidated damages in the amount of Five Hundred and 00/100 Dollars ($500.00) per day for each day of unexcused delay in completion, and such liquidated damages may be deducted from City’s payments due or to become due to Contractor under this Contract.
Section 11. COMPLIANCE WITH LAWS
Contractor shall comply with all Laws applicable to the performance of the Work required by the Contract Documents, including any rule, regulation, or bylaw governing the conduct or performance of Contractor, its employees, officers, board members, agents, independent contractors, and Subcontractors. Unless otherwise specified in the Contract Documents, all required permits and licenses, including a City business license, shall be held or obtained by the Contractor at its sole expense and prior to commencing any Work hereunder. Contractor and all subcontractors shall comply with: the California Fair Employment and Housing Act (Cal. Gov.
Code §12900 et seq .) and the regulations promulgated thereunder (Cal. Code Regs., tit. 2, §11000 et seq.). Contractor shall not hire or employ any person to perform work within the City or allow any person to perform work required under this Contract unless such person is properly documented and legally entitled to be employed within the United States. The Contractor and all subcontractors shall also comply with the requirements of the Drug-Free Workplace Act of 1990 (Cal. Gov. Code §8350 et seq .). To the extent that the requirements of the Federal Funding/Grant Requirement Provisions attached hereto as Exhibit “B” impose requirements similar to those in California Law, Contractor shall comply with both sets of requirements, and in the event of a conflict which prevents compliance with both, the Federal requirements must be satisfied.
Section 12. WORKERS’ COMPENSATION CERTIFICATION
Pursuant to Labor Code § 1861, by signing this Contract, Contractor certifies as follows: “I am aware of the provisions of Labor Code § 3700 which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work on this Contract.”
Section 13. INSURANCE
a. Contractor shall procure and maintain at its own expense at all times during the period covered by this Contract (and through the one-year guarantee period following the date of City’s acceptance of the Project) the following policies of insurance:
(1) Commercial General Liability (“CGL”) Insurance: Insurance Services Office (ISO) Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed 9 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
operations, property damage, bodily injury and personal & advertising injury with limits no less than Two Million ($2,000,000) per occurrence resulting from the acts or omissions of the Contractor or its officers, employees, servants, volunteers, and agents, and independent contractors. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
(2) Commercial Vehicle Liability Insurance : Covering person injury and property damage, of not less than Two Million Dollars ($2,000,000) combined single limit, covering any vehicle utilized by Contractor or its officers, employees, servants, volunteers, or agents and independent contractors in performing the Work required by this Contract.
(3) Workers’ Compensation Insurance : Providing coverage as required by the California State Workers’ Compensation Law and Employers’ Liability insurance with a limit of no less than One Million Dollars $1,000,000 per accident for bodily injury or disease. If any class of employees employed by Contractor is not protected by the California State Workers’ Compensation Law, Contractor shall provide adequate insurance for the protection of such employees to the satisfaction of the City.
(4) Technology Professional Liability Errors and Omissions Insurance appropriate to the Consultant’s profession and work hereunder, with limits not less than $1,000,000, per occurrence. Coverage shall be sufficiently broad to respond to the duties and obligations as is undertaken by the Vendor in this agreement and shall include, but not be limited to, claims involving security breach, system failure, data recovery, business interruption, cyber extortion, social engineering, infringement of intellectual property, including but not limited to infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, and alteration of electronic information. The policy shall provide coverage for breach response costs, regulatory fines and penalties as well as credit monitoring expenses.
a. The Policy shall include, or be endorsed to include, property damage liability coverage for damage to, alteration of, loss of, or destruction of electronic data and/or information “property” of the City in the care, custody, or control of the Vendor.
a. Additional Insurance Requirements. With respect to the policies of insurance set forth above, compliance with the following is also required:
(1) Additional Insureds. Notwithstanding any inconsistent statement in any required insurance policies or any subsequent endorsements attached thereto, the protection offered by all policies, except for Workers' Compensation coverage, shall bear an endorsement whereby it is provided that, t he City and its elected or appointed officials, officers, employees, servants, volunteers, agents and independent contractors, including, without limitation, the City Attorney, are named as Additional Insureds. The coverage shall contain no special limitations on the scope of protection afforded to the City of Victorville, its officers, officials, employees, agents, or volunteers.
(2) Waiver of Subrogation Rights. Contractor shall require the carriers of all required insurance policies to waive all rights of subrogation against the City and its elected or 10 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
appointed officers, officials, volunteers, employees, contractors, and subcontractors. Each policy of insurance shall be endorsed to reflect such waiver.
(3) Sufficiency of Insurers. Contractor must s ecure all policies of insurance required by this Contract from a good and responsible company or companies authorized to do insurance business in the State of California, with an AM Best’s rating of not less than A;VII.
(4) Proof of Insurance Coverage Required Prior to Commencement of Work. W ithin ten (10) days of the date Contractor receives this Contract from the City for execution (following award of same by the City Council), certificates of insurance evidencing the policies of insurance, coverages, and endorsements required by this Contract and satisfactory to and approved by the City shall be furnished by Contractor to the City’s Risk Manager. In no event shall any Work on the Project be permitted to commence until adequate proof of insurance and endorsements have been so furnished.
(5) Reserved.
(6) Other Required Endorsements.
(a) The policies shall be endorsed to provide that in the event of cancellation or amendment of any required insurance policy for any reason whatsoever, the City shall be notified by mail, postage prepaid, not less than thirty (30) days before the cancellation or amendment is effective. In the case of cancellation for non- payment, ten (10) days advance written notice shall be given.
(b) The CGL and vehicle liability policies shall be endorsed as Primary and Non-contributory.
b. Subcontractors. Contractor must ensure that each Subcontractor is required to obtain and maintain the same insurance coverage required under this Section 13 with respect to its performance of Work on the Project, including those requirements related to the Additional Insureds and waiver of subrogation. Contractor must confirm that each Subcontractor has complied with these insurance requirements before the Subcontractor is permitted to begin Work on the Project. Upon request by the City, Contractor must provide certificates and endorsements submitted by each Subcontractor to prove compliance with this requirement. The insurance requirements for Subcontractors do not replace or limit the Contractor’s insurance obligations.
Section 14. FEDERAL FUNDING/GRANT REQUIREMENT PROVISIONS
Contractor acknowledges that the Project is being funded in whole or in part with federal assistance under the American Rescue Plan Act (“ ARPA”) (Title VI of the Social Security Act Section 602 et seq. (the “Act”)) Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) through a grant from the U.S. Department of the Treasury to the City. The Contractor agrees to comply with all the provisions of the documents and forms contained in Section B - Federal Requirements and Federal Forms of the Bid Package (Contract Documents) for this Project. Said documents and forms (as signed and submitted by Contractor with its Bid) are attached hereto in its entirety as Exhibit “B” and incorporated as part of this Contract by this reference. Contractor shall comply with all requirements and provisions of Exhibit “B”.
11 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
Section 15. TIME OF THE ESSENCE
Time is of the essence in the performance of this Contract.
Section 16. INDEMNIFICATION
a. Notwithstanding the limits of any insurance and to the fullest extent permitted by law, Contractor shall indemnify the City, its elected or appointed officials, officers, agents, volunteers and employees against, and will hold and save them and each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities, (hereinafter " Claims or Liabilities ") that may be asserted or claimed by any person, firm or entity arising or alleged to arise out of or in connection with the performance of the Work, operations, or activities of Contractor, its agents, employees, Subcontractors, or invitees on the Project, or arising or alleged to arise from the acts or omissions of Contractor hereunder, or arising or alleged to arise from Contractor's performance of or failure to perform any term, provision, covenant or condition of this Contract, but excluding such Claims or Liabilities or portion of such Claims or Liabilities arising or alleged to arise from the active negligence, sole negligence, or willful misconduct of the City, its elected or appointed officials, officers, agents, volunteers, or employees, and in connection therewith:
(1) Contractor will defend any action or actions filed in connection with any of said Claims or Liabilities and will pay all costs and expenses, including legal costs and attorneys' fees incurred in connection therewith;
(2) Contractor will promptly pay any judgment rendered against the City, its elected or appointed officials, officers, agents, volunteers, or employees for any such claims or liabilities arising or alleged to arise out of or in connection with Contractor's (or its agents', employees', Subcontractors' or invitees') performance of or failure to perform such Work, operations or activities hereunder; and Contractor agrees to save and hold the City, its elected or appointed officials, officers, agents, volunteers and employees harmless therefrom;
(3) In the event the City, its elected or appointed officials, officers, agents, volunteers, or employees is made a party to any action or proceeding filed or prosecuted against Contractor for such damages or other claims arising or alleged to arise out of or in connection with the performance of or failure to perform the Work, operation, or activities of Contractor hereunder, Contractor shall pay to the City, its elected or appointed officials, officers, agents ,volunteers, or employees, any and all costs and expenses incurred by the City, its elected or appointed officers, officials, agents, volunteers, or employees in such action or proceeding, including but not limited to, legal costs and attorneys' fees for counsel acceptable to City;
(4) Contractor's duty to defend, indemnify, and hold harmless as set out in this Section shall include any claims, liabilities, obligations, losses, demands, actions, penalties, suits, costs, expenses or damages or injury to persons or property arising or alleged to arise from, in connection with, as a consequence of, or pursuant to any state or federal law or regulation regarding hazardous substances, including but not limited to, the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), Resource Conservation and Recovery Act of 1976 ("RCRA"), the Hazardous and Solid 12 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
Waste Amendments of 1984, the Hazardous Material Transportation Act, the Toxic Substances Control Act, the Clean Air Act, the Clean Water Act, the California Hazardous Substance Account Act, the California Hazardous Waste Control Law or the Porter - Cologne Water Quality Control Act, as any of those statutes may be amended from time to time.
b. City will timely notify Contractor upon receipt of any third-party claim relating to the Contract, as required by Public Contract Code § 9201. The Contractor's indemnification and defense obligations pursuant to this Section shall survive the termination of this Contract.
Contractor shall require the same indemnification provisions provided for herein from all Subcontractors.
Section 17. REPORTS; BOOKS AND RECORDS; AUDIT
a. Upon request by the Project Manager, Contractor shall prepare and submit reports concerning Contractor's performance of the Work required by this Contract.
b. Contractor shall keep such books and records as shall be necessary to perform the work required by this Contract and enable the Project Manager to evaluate the cost and the performance of such Work.
c. Books and records pertaining to costs shall be kept and prepared in accordance with generally accepted accounting principles. The Project Manager shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records.
d. Records and supporting documents pertaining to the use of funds paid to Contractor hereunder shall be retained by Contractor and made available to the Project Manager for purposes of performing an audit for a period of five (5) years from the date of termination of this Contract. Contractor shall also comply with the records retention and access requirements appliable to books, records and audit as set forth in Section 5.i of the Federal Funding/Grant Requirement Provisions attached hereto as Exhibit “B”.
Section 18. MODIFICATIONS AND AMENDMENTS
This Contract may be modified or amended only by written Change Orders or a written instrument signed by both Parties.
Section 19. ENTIRE AGREEMENT
a. This Contract supersedes any and all prior or contemporaneous agreements, either oral or written, between the City and Contractor with respect to the subject matter of this Contract.
b. The Contract Documents contain all of the covenants and agreements between the Parties with respect to the subject matter herein, and each Party acknowledges that no representations, inducements, promises, or agreements have been made by or on behalf of any Party, except those covenants and agreements in this Contract and the Contract Documents incorporated herein.
13 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
c. No agreement, statement, or promise with respect to the subject matter of the Contract Documents, which is not contained in the Contract Documents, or in a valid modification or amendment to the Contract Documents, shall be valid or binding on either Party.
Section 20. AMBIGUITIES
This Contract is in all respects intended by each Party hereto to be deemed and construed to have been jointly prepared by the Parties and the Parties hereby expressly agree that any uncertainty or ambiguity existing herein shall not be interpreted against either of them. Except as expressly limited by this paragraph, all of the applicable rules of interpretation of contract shall govern the interpretation of any uncertainty or ambiguity of this Contract. Notwithstanding the foregoing, the Parties agree that Exhibit “A” is attached hereto for reference purposes, and to the extent there are any ambiguities, inconsistencies, or conflicts between the terms of this Contract and Exhibit “A”, the terms of this Contract shall control, and nothing set forth in Exhibit “A” shall be deemed to supersede any of the provisions of this Contract.
Section 21. NOTICES
a. Any notice to be provided pursuant to this Contract shall be in writing, and all such notices shall be delivered by personal service or by deposit in the United States mail, certified or registered, return receipt requested, with postage prepaid, and addressed to the Parties as follows:
To City: Tony Camargo, Deputy City Manager
Community Services Department
City of Victorville
14343 Civic Drive
Victorville, CA 92392
To Contractor: Mark Montgomery, CEO
Veterans Communication Services, Inc.
14730 Central Ave.
Chino, CA 91710
To Surety: _______________________________
_______________________________
_______________________________
_______________________________
_______________________________
b. Notices, payments, and other documents shall be deemed delivered upon receipt by personal service or as of the second (2nd) day after deposit in the United States mail.
14 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
c. Either Party, or the surety, may change its address by giving notice in writing to all other parties listed above, and thereafter notices shall be addressed and transmitted to such new address.
Section 22. NON-LIABILITY OF CITY OFFICERS AND EMPLOYEES
No officer or employee of the City shall be personally liable to Contractor, or any successor in interest, in the event of any default or breach by the City or for any amount, which may become due to Contractor or to its successor(s), or for any breach of any obligation of the terms of this Contract.
Section 23. REVIEW BY ATTORNEYS
Each Party hereto has had its attorneys review this Contract and all related documents.
Section 24. BONDS
Concurrently with the execution of this Contract by the Contractor, and before the commencement of any Work, Contractor shall furnish to the City a Faithful Performance Bond, and a Payment (Labor and Materials Bond) each in an amount equal to one hundred percent (100%) of the Contract Price written on the forms included in the Contract Documents. The Faithful Performance Bond must remain in force until the later of: (1) the expiration of the one-year guarantee period; or (2) on one year from the date of completion of the corrective Work. Such bonds must be issued by a responsible corporate Surety, licensed and authorized to issue such bonds in the State of California with an AM Best’s Rating of at least A: VII.
Section 25. CARE OF WORK
Contractor must adopt reasonable methods during the life of the Contract to furnish continuous protection to the Work, and the equipment, materials, papers, documents, plans, studies, and other components to prevent losses or damages, and will be responsible for all damages, to persons or property, until acceptance of the Work by the City, except those losses or damages as may be caused by the City’s own negligence. The performance of the Work by Contractor or the payment of money by the City shall not relieve Contractor from any obligation to correct any incomplete, inaccurate, or defective Work (including the obligation to remedy any defective Work or materials during the one-year guarantee period after the City’s acceptance thereof) at no further cost to the City.
Section 26. CAPTIONS AND HEADINGS
The captions and headings contained in this Contract are provided for identification purposes only and shall not be interpreted to limit or define the content of the provisions described under the respective caption or heading.
Section 27. OWNERSHIP OF DOCUMENTS
No portion of the Contract Documents may be used for any purpose other than construction of the Project, without prior written consent from City. Contractor is deemed to have conveyed the copyright in any designs, drawings, specifications, Shop Drawings, or other documents (in paper 15 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
or electronic form) developed by Contractor for the Project, and Cit y will retain all rights to such works, including the right to possession.
Section 28. SUCCESSORS, HEIRS, AND ASSIGNS
Except as otherwise expressly provided herein, this Contract shall be binding upon the successors, endorsees, assigns, heirs, and personal representatives of each of the Parties and, likewise, shall inure to the benefit of the successors, endorsees, assigns, heirs, and personal representatives of each of the Parties. This Contract may not be assigned or transferred by Contractor without the concurrence of the surety and express written consent of the City.
Section 29. GENDER; PLURAL
In this Contract, unless the context clearly requires otherwise, the masculine, feminine and neuter genders and the singular and the plural shall include one another.
Section 30. SEVERABILITY
If any one or more of the sentences, clauses, paragraphs, or sections contained herein is declared invalid, void, or unenforceable by a court of competent jurisdiction, the same shall be deemed severable from the remainder of this Contract and shall not affect, impair, or invalidate any of the remaining sentences, clauses, paragraphs, or sections contained herein.
Section 31. GOVERNING LAW
The validity of this Contract and any of its terms or provisions, as well as the rights and duties of the Parties under this Contract, shall be construed pursuant to and in accordance with California law.
Section 32. CUMULATIVE REMEDIES
Except with respect to rights and remedies expressly declared to be exclusive in this Contract, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default of any other default by the other Party.
Section 33. VENUE
All proceedings involving disputes over the terms, provisions, covenants, or conditions contained in this Contract and all proceedings involving any enforcement action related to this Contract shall be initiated and conducted in the applicable court or forum in San Bernardino County, California.
Section 34. EFFECTIVENESS OF CONTRACT
This Contract shall not be binding upon the City until signed by the authorized representative(s) of Contractor, approved by the City’s Risk Manager, and executed by the authorized City personnel or the Mayor.
16 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
Section 35. REPRESENTATIONS OF PARTIES AND PERSONS EXECUTING
CONTRACT
Each of the Parties to this Contract hereby represents that all necessary and appropriate actions of their governing bodies have been taken to make this Contract a binding obligation of each of the Parties hereto. The persons executing this Contract warrant that they are duly authorized to execute this Contract on behalf of and bind the Parties each purports to represent.
Section 36. WAIVER
No delay or omission in the exercise of any right or remedy by a non- defaulting Party on any default under this Contract shall impair such right or remedy or be construed as a waiver. A Party's consent to or approval of any act by the other Party requiring the Party's consent or approval shall not be deemed to waive or render unnecessary the other Party's consent to or approval of any subsequent act. Any waiver by either Party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Contract.
Section 37. INDEPENDENT CONTRACTOR STATUS
a. Contractor is and shall at all times remain as to City a wholly independent contractor. The personnel performing work or services under this Contract on behalf of Contractor shall at all times be under Contractor’s exclusive direction and control. Neither City nor any of its officers, employees, or agents shall have control over the conduct of Contractor or any of Contractor’s officers, employees, or agents, except as set forth in this Contract. Contractor shall not at any time or in any manner represent that it or any of its officers, employees, or agents are in any manner officers, employees, or agents of the City. Contractor shall not incur or have the power to incur any debt, obligation, or liability whatever against City, or bind City in any manner.
b. No employee benefits shall be available to Contractor in connection with the performance of this Contract. Except for the Contract Price to be paid to Contractor as provided for in this Contract, City shall not pay salaries, wages, or other compensation to Contractor for performing services hereunder for City. City shall not be liable for compensation or indemnification to Contractor for injury or sickness arising out of performing services hereunder.
c. Any and all employees or subcontractors of Contractor under this Contract, while engaged in the performance of any work or services required by Contractor hereunder, shall be considered employees or subcontractors of Contractor only and not of City.
Section 38. COUNTERPARTS
This Contract may be executed by the Parties in counterparts, and when executed by each of the Parties, each counterpart shall be deemed to be a part of this Contract.
Section 39. CARB COMPLIANCE OBLIGATIONS
a. CARB Regulations. Contractor is aware of the California Air Resources Board (“CARB”) regulations mandating various emission reduction requirements. Service Provider agrees to comply with all applicable CARB regulations (Title 13, Division 3 of the California Code 17 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
of Regulations (“CCR”)) prior to commencing any work hereunder and maintain compliance throughout the duration of this Agreement.
(1) Vehicles with a Gross Vehicle Weight Rating (GVWR) greater than 8,500 lbs. and light-duty package delivery vehicles operated in California may be subject to CARB’s Advanced Clean Fleets regulations. Such vehicles may therefore be subject to requirements to reduce emissions of air pollutants. For more information, please visit the CARB Advanced Clean Fleets (ACF) webpage at
https://ww2.arb.ca.gov/our-
work/programs/advanced-clean-fleets.
(2) Effective January 1, 2024, CARB implemented amendments to the In- Use Off- Road Diesel- Fueled Fleets Regulation (13 CCR Section 2449 et seq., the “Off- Road Regulation”) which apply broadly to all self -propelled off road diesel vehicles 25 horsepower or greater and other forms of equipment used in California (including any vehicles or equipment that is rented or leased). The Off -Road Regulation is available at:
https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2022/off-roaddiesel/appa-1.pdf .
b. Contractor must comply with all CARB regulations and requirements, including without limitation, all applicable sections of the Off -Road Regulation (as codified in 13 CCR Section 2449 et seq.) throughout the term of the Project and this Agreement. Contractor shall be solely liable for all costs associated with complying with the regulations, as well as for any and all penalties, fines, damages, or costs associated with violations or failures to comply with the regulations. Contractor shall defend, indemnify, and hold harmless the City of Victorville, its elected and appointed officials, officers, agents, and employees from and against any and all claims, liabilities, costs, penalties, interest or other damages arising out of Contractor’s failure or alleged failure to comply with CARB regulations.
Section 40. ATTORNEY'S FEES
If either Party commences an action against the other Party, either legal, administrative, or otherwise, arising out of or in connection with this Contract, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action.
Section 41. CONFLICTS OF INTEREST
Contractor covenants that it does not have any interest, nor shall it acquire any interest, directly or indirectly, which would conflict in any manner with the performance of Contractor’s Work under this Contract. Contractor further covenants that in the performance of services under this Contract, no officer, employee or agent of Contractor having such interest shall be employed by it. In the event the City determines that Contractor must disclose its financial interests by completing and filing a Fair Political Practices Commission Form 700, Statement of Economic Interests, Contractor shall file such Form 700 with the City Clerk’s Office pursuant to the written instructions provided by the City Clerk. Acquisition or maintenance of a conflicting interest by Contractor may result in termination of this Contract by the City. Contractor shall also comply with and is bound by the conflict of interest provisions set forth in Section 5.h of the Federal Funding/Grant Requirement Provisions attached hereto as Exhibit “B”. (END OF THIS PAGE – SIGNATURE PAGE FOLLOWS)
18 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
IN WITNESS WHEREOF, the Parties hereto have caused this Contract to be executed as of the dates written below.
THE CITY OF VICTORVILLE VETERANS COMMUNICATION SERVICES, INC.
By: ___________________________ By: ___________________________ Elizabeth Becerra, Mayor Mark Montgomery, CEO
Dated: ________________________ Dated: _______________________
ATTEST
By:
Jennifer Thompson,
City Clerk
Dated:
By:
Sandra Bostick,
Risk Manager
Dated: ________________________
APPROVED AS TO STANDARD FORM
By:
Andre de Bortnowsky,
City Attorney
Dated:
19 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
EXHIBIT A
CONTRACTOR’S BID PROPOSAL
See Attachment
EXHIBIT A,
20/CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022 21 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
EXHIBIT B
FEDERAL REQUIREMENTS AND FEDERAL
FORMS
S
ee Attachment
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-1
SECTION B:
FEDERAL REQUIREMENTS AND FEDERAL
FORMS
CITY HALL SECURITY CAMERA EXPANSION
PROJECT CC25
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-2
CITY OF VICTORVILLE
CITY HALL SECURITY CAMERA EXPANSION
PROJECT CC25-022
FEDERAL FUNDING/GRANT REQUIREMENT PROVISIONS
1. Contractor is hereby advised and acknowledges that the Project, and any agreement or contract awarded pursuant to this RFP, is being funded in whole or in part with federal assistance under
the American Rescue Plan Act (the “ ARPA”) Pub. L. No. 117-2 (March 11, 2021) ; s
pecifically, Sections 602 and 603 of the Social Security Act (the “Act”) as added by Section 9901 of the ARPA, which established the Coronavirus State and Local Fiscal Recovery Funds ( the “
CSLFRF”). Such funding is provided in accordance with and is subject to the terms and conditions of the CSLFRF financial assistance agreement between the U.S. Department of the Treasury (“Treasury”) and the City, signed May 11, 2021 (the “City Award”). The City Award is ATTACHMENT B-1 and is expressly incorporated herein by reference.
2. R
eserved.
3. B
y submitting a Bid for the Project, Contractor agrees to comply with the laws, provisions, and regulations listed herein; all other applicable federal statutes, regulations, and executive orders; and to further provide for such compliance in any agreements/contracts it enters into with other parties (by inserting a provision into any subcontracts or subcontractor agreements maki ng
them
subject to all of the provisions stipulated herein) for any work or services relating to th e P
roject.
4. C
ontractor acknowledges and agrees that the provisions of this Section B and its attachments shall be annexed as Exhibit “B” to its Contract with the City in the event of an award.
5. The l
aws, provisions, and regulations relating to this Project and with which Contractor is required to comply, include without limitation, all of the following:
a. The r
equirements of Section 603 of the Act, regulations adopted by Treasury pursuant to section 603(f) of the Act, and guidance issued by Treasury regarding the foregoing. b. Feder
al regulations specified in the City Award, which include without limitation, the following:
(i) U niform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, other than such provisions as Treasury may determine are inapplicable to the City Award and subject to such exceptions as may be otherwise provided by Treasury. Subpart F – Audit Requirements of the
U
niform Guidance, implementing the Single Audit Act, shall apply. (ii) Universal Identifier and System for Award Management (SAM), 2 CFR Part 25, pursuant to which the award term set forth in Appendix A to 2 CFR Part 25 is hereby incorporated by referenc
e.
(iii) Reporting Subaward and Executive Compensation Information, 2 CFR Part 170, pursuant to which the award term set forth in Appendix A to 2 CFR Part 170 is hereby incorporated by referenc
e.
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-3
(iv) O MB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 CFR Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 CFR Part 180, subpart B) that the award is subject to 2 CFR Part 180 and Treasury’s implementing regulation at 31 CFR Part 19. Contractor mus t
c
omplete the certification in ATTACHMENT B-2 and comply with all provisions of said certification.
(v) R ecipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 CFR Part 200, Appendix XII to Part 200 is hereby incorporated by referenc
e.
(vi) G overnmentwide Requirements for Drug-Free Workplace, 31 CFR Part 20. (vii) New Restrictions on Lobbying, 31 CFR Part 21, pursuant to the Byrd Anti-Lobbying Amendment (31 U.S.C. § 3152). See provisions in Subsection j.(ix) below for requirements and required certification.
(viii) Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601-4655) and implementing regulations.
(i
x) G
enerally applicable federal environmental laws and regulations. c. S
tatutes and regulations prohibiting discrimination applicable to the Project and C
ontractor, including, without limitation, the following:
(i) Ti tle VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) and Treasury’s implementing regulations at 31 CFR Part 22, which prohibit discriminatio n on the bas
is of race, color, or national origin under programs or activities receiving federal financial assistance (see subdivision d, below for required assurances); (ii) The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§ 3601 et seq.), which prohibits discrimination in housing on the basis of race, color, religion, national origin, sex, familial status, or disability; (iii) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794), which prohibits discrimination on the basis of disability under any program or activity receiving federal financial assistanc
e;
(iv) The Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101 et seq.), and Treasury’s implementing regulations at 31 CFR Part 23, which prohibit discrimination on the basis of age in programs or activities receiving federal financial assistance; and
(v) Ti tle II of the Americans with Disabilities Act of 1990, as amended (42 U.S.C. § 12101 et seq.), which prohibits discrimination on the basis of disability under programs, activities, and services provided or made available by state and local governments or instrumentalities or agencies thereto.
d. The Civil Rights Restoration Act of 1987 which requires the following assurances:
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-4
(i) Contractor ensures its current and future compliance with Title VI of the Civil Rights Act of 1964, as amended, which prohibits exclusion from participation, denial of the benefits of, or subjection to discrimination under programs and activities receiving federal financial assistance, of any person in the United States on the ground of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury Title VI regulations at 31 CFR Part 22 and other pertinent executive orders such as Executive Order 13166, directives, circulars, policies, memoranda, and/or guidance documents.
(ii) Contractor acknowledges that Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency,” seeks to improve access to federally assisted programs and activities for individuals who, because of national origin, have Limited English proficiency (LEP). Recipient understands that denying a person access to its programs, services, and activities because of LEP is a form of national origin discrimination prohibited under Title VI of the Civil Rights Act of 1964 and the Department of the Treasury’s implementing regulations.
Accordingly, Contractor shall initiate reasonable steps, or comply with the Department of the Treasury’s directives, to ensure that LEP persons have meaningful access to its programs, services, and activities. Contractor understands and agrees that meaningful access may entail providing language assistance services, including oral interpretation and written translation where necessary, to ensure effective communication in the Contractor ’s programs, services, and activities.
(iii) Contractor agrees to consider the need for language services for LEP persons when Contractor develops applicable budgets and conducts programs, services, and activities. As a resource, the Department of the Treasury has published its LEP guidance at 70 FR 6067. For more information on taking reasonable steps to provide meaningful access for LEP persons, please visit http://www.lep.gov .
(iv) Contractor acknowledges and agrees that compliance with the assurances constitutes a condition of continued receipt of federal financial assistance and is binding upon Contractor and Contractor’s successors, transferees, and assignees for the period in which such assistance is provided.
(v) Contractor acknowledges and agrees that it must require any sub- grantees, contractors, subcontractors, successors, transferees, and assignees to comply with assurances (i)-(iv) above, and agrees to incorporate the following language in every contract or agreement subject to Title VI and its regulations between the Contractor the Contractor ’s sub -grantees, contractors, subcontractors, subconsultants successors, transferees, and assignees:
The sub-grantee, contractor, subcontractor, successor, transferee, and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of; or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury's Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this contract (or agreement). Title VI also includes protection to persons with "Limited English Proficiency" in any Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-5
program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the Department of the Treasury's Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this contract or agreement.
e. Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms, as set forth in 2 CFR Section 200.321.
(i) If subcontracts are to be let, Contractor must take all affirmative steps pursuant to Section 200.321 to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used whenever possible. Affirmative steps include:
A. Placing qualified small and minority businesses and women's business enterprises on solicitation lists;
B. Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources;
C. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority business, and women's business enterprises;
D. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority business, and women's business enterprises; and
E. Using the services/assistance of the Small Business Administration (SBA), and the Minority Business Development Agency (MBDA) of the Department of Commerce
(ii) If selected for award, Contractor must submit a Small and Minority Businesses, Women's Business Enterprise (S/M/WBE) and Local Surplus Area (LSA) Firm Outreach Plan attached hereto as ATTACHMENT B-3 within 5 (five) days of contract execution to the City for approval. The City will accept the S/M/WBE and LSA Firm Outreach Plan or offer recommendations to ensure S/M/WBE and LSA Firm Outreach Plan includes all necessary affirmative steps to meet the intent of 2 CFR § 200.321. Contractor shall revise its S/M/WBE Outreach Plan to incorporate City input as applicable. Upon the City’s acceptance of the S/M/WBE and LSA Firm Outreach Plan, Contractor shall submit updates to the City quarterly. S/M/WBE and LSA Firm Outreach Plan update should include efforts taken within the period to assure that minority businesses, women's business enterprises, and labor surplus area firms were utilized when possible.
f. Increasing Seat Belt Use in the United States. Pursuant to Executive Order 13043, 62 FR 19217 (Apr. 18, 1997), Contractor is encouraged to adopt and enforce on- the-job seat belt policies and programs for their employees when operating company -owned, rented or personally owned vehicles.
g. Reducing Text Messaging While Driving. Pursuant to Executive Order 13513, 74 FR 51225 (Oct. 6, 2009), Contractor is encouraged to adopt and enforce policies that ban text Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-6
messaging while driving, and Contractor should establish workplace safety policies to decrease accidents caused by distracted drivers.
h. Conflict of Interest. By submitting a Bid and executing a contract with the City, Contractor certifies that it that it has disclosed to City any actual, apparent, or potential conflicts of interest that may exist relative to the services to be provided pursuant under the Contract or with respect to the funding thereof, in accordance with 2 CFR Part 200 (including 2 CFR Sections 200.112 and 200.318(c)). Contractor shall provide all additional information necessary for the City to fully assess and address such actual or potential conflict of interest and agrees to advise the City of any actual, apparent or potential conflicts of interest that may develop subsequent to the date of execution the Contract. Contractor further agrees to complete any statements of economic interest if required by either City ordinance or State law and further certifies that it does not now have nor shall it acquire any financial or business interest that would conflict with the performance of services under the Contract and does not know of any fact which constitutes a violation of any conflict of interest law, including Section 87100 et seq. or Section 1090 et seq. of the California Government Code.
i. Records Retention and Access. Contractor certifies that it will comply with the records retention and access requirements detailed in 2 CFR § 200.334 and 200.337, as well as any additional requirements that may be imposed by the Act or Treasury regulations.
Contractor further certifies that it will retain all records as required by 2 CFR § 200.334 for a period of five (5) years after it receives City notice that City has submitted final expenditure reports or quarterly or annual financial reports for the Project, as applicable, and all other pending matters are closed. Contractor acknowledges and agrees that the Treasury, Inspectors General, the Comptroller General of the United States, the City, or any of their authorized representatives, shall have the right of access to any documents, papers, or other records of Contractor which are pertinent to the Project by virtue of the Federal award by which it is funded, in order to make audits, examinations, excerpts, and transcripts. The right also includes timely and reasonable access to Contractor ’s personnel for the purposes of interview and discussion related to such documents. The provisions of this Section shall govern over any conflicting provisions in the Contract.
j. Federal contract provisions required by Appendix II to 2 CFR Part 200 (2 CFR § 200.327), as applicable:
(i) R emedies for Breach - Appendix II to Part 200, Subd. (A). The provisions of Section 8 of the Contract provide remedies and penalties for breach of the Contract.
(ii) Termination for Cause/Convenience - Appendix II to Part 200, Subd. (B). The Special Provisions in Section A of the Bid Package, as well as the provisions of Sections 7 and 8 of the Contract include remedies for breach and termination for cause and convenience.
(iii) Equal Employment Opportunity - Appendix II to Part 200, Subd. (C). Except as otherwise provided under 41 CFR Part 60, all contracts meeting the definition of a “federally assisted construction contract” in 41 CFR § 60-1.3, must comply.
Contractor shall comply with the following equal opportunity clause, in accordance with Executive Order 11246 of September 24, 1965 entitled “Equal Employment Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-7
Opportunity,” as amended by Executive Order 11375 of October 13, 1967 and implementation regulations at 41 CFR Chapter 60:
D
uring the performance of this Contract, Contractor agrees as follows:
A. The C
ontractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The Contractor will take affirmative action to ensure that appl
icants are employed, and that employees are treated during employm ent w
ithout regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin. Such action shall include, but not be limited to the followi ng:
E
mployment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and s
election for training, including apprenticeship. The Contractor agrees to post i n c
onspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.
B. The C
ontractor will, in all solicitations or advertisements for employees placed by or on behalf of the Contractor , state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex , s
exual orientation, gender identity, or national origin.
C. The C
ontractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensati on of the em
ployee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an
i
nvestigation conducted by the employer, or is consistent with the Contractor 's legal duty to furnish information.
D. The C
ontractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the Contractor's commitments under this section and shall pos t
c
opies of the notice in conspicuous places available to employees and applicants for employment.
E. The C
ontractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the S
ecretary of Labor.
F. The C
ontractor will furnish all information and reports required by Executive O
rder 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books , r
ecords, and accounts by the administering agency and the Secretary of Labor for Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-8
purposes of investigation to ascertain compliance with such rules, regulations, and orders.
G. In the event of the Contractor's noncompliance with the nondiscrimination clauses of this Contract or with any of the said rules, regulations, or orders, this Contract may be canceled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.
H. The Contractor will include the portion of the sentence immediately preceding paragraph A and the provisions of paragraphs A through G in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued purs uant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The Contractor will take such action with respect to any subcontract or purchase order as the administering agency may direct as a means of enforcing such provisions, including sanctions for noncompliance:
Provided, however, that in the event a Contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the administering agency, the Contractor may request the United States to enter into such litigation to protect the interests of the United States.
The applicant further agrees that it will be bound by the above equal opportunity clause with respect to its own employment practices when it participates in federally assisted construction work: Provided, That if the applicant so participatin g is a State or local government, the above equal opportunity clause is not applicable to any agency, instrumentality or subdivision of such government which does not participate in work on or under the Contract.
The applicant agrees that it will assist and cooperate actively with the administering agency and the Secretary of Labor in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the rules, regulations, and relevant orders of the Secretary of Labor, that i t will furnish the administering agency and the Secretary of Labor such information as they may require for the supervision of such compliance, and that it will otherwise assist the administering agency in the discharge of the agency's primary responsibility for securing compliance.
The applicant further agrees that it will refrain from entering into any contract or contract modification subject to Executive Order 11246 of September 24, 1965, with a contractor debarred from, or who has not demonstrated eli gibility for, Government contracts and federally assisted construction contracts pursuant to the Executive Order and will carry out such sanctions and penalties for violation of the equal opportunity clause as may be imposed upon contractors and subcontractors by the administering agency or the Secretary Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-9
of Labor pursuant to Part II, Subpart D of the Executive Order. In addition, the applicant agrees that if it fails or refuses to comply with these undertakings, the administering agency may take any or all of the following actions: Cancel, terminate, or suspend in whole or in part this grant (contract, loan, insurance, guarantee); refrain from extending any further assistance to the applicant under the program with respect to which the failure or refund occurred until satisfactory assurance of future compliance has been received from such applicant; and refer the case to the Department of Justice for appropriate legal proceedings.
(iv) Da vis -Bacon and Copeland “Anti -Kickback” Act - Appendix II to Part 200, (Subd . (D)). Not applicable to this solicitation (See CSLFRF Final Rule FAQ). (v) C ontract Work Hours and Safety Standards Act – Appendix II to Part 200 (S ubd. (E)). Applicable to all contracts in excess of $100,000 that involve the employment of mechanics, laborers (including watchmen and guards (as defined by federal law and regulation), or construction work, but not to purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence).
A. C
ontractor and all subcontractors shall comply with the Contract Work Hours and Safety Standards Act, 40 USC 3701 through 3708 (including sections 3702 and 3704), as supplemented by Department of Labor regulations at 29 CFR Part 5, which are incorporated herein by this reference.
B. C
ontractor and all subcontractors shall 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 subject to conditions, as stated in the Act and
r
egulations. No laborer or mechanic shall be required to work in surroundings or under working conditions that are unsanitary, hazardous, or dangerous to heal
th or safety.
(vi) R ights to Inventions Made Under a Contract or Agreement - Appendix II to Part 200 (Subd. (F)). Contracts or agreements for the performance of experimental, developmental, or research work (meeting the definition of “funding agreements” (see 37 CFR Part 401)) shall provide for the rights of the Federal Government and the recipient in any resulting invention in accordance with 37 CFR part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements," and any applicable implementing regulations.
(vii) Clean Air Act and Federal Water Pollution Control Act - Appendix II to Part 200 (Subd. (G)).
A. For
all contracts in excess of $150,000, Contractor agrees to comply with: (1) all applicable standards, orders or regulations issued pursuant to the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.; and (2) all applicable standards, orders, or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251et seq.
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-10
B. C ontractor further agrees to report each violation of the Clean Air Ac t and the Water
Pollution Control Act to the City and understands and agrees that the City will, in turn, report each violation as required to assure notification to the U
.S. Treasury Department, and the appropriate Environmental Protection Agency Regional Office.
C. C
ontractor agrees to include these requirements in each subcontract exceeding $150,000 financed in whole or in part with Federal assistance. (viii) Debarment and Suspension - Appendix II to Part 200 (Subd. (H) and requirements and certification as specified in Subsection 5.b.(iv) of this Section B). (ix) By rd Anti -Lobbying Amendment – Appendix II to Part 200 (Subd.(I)) and Subsection 5.b.(vii) of this Section B).
A. C
ontractor, and each tier to the tier above, certifies that it will not and has not us
ed federally 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 the making or obtaining of any federal contract, grant, or any other award covered by 31 U.S.C. § 1352. Each tier shall also disclose any lobbying with non-federal funds that takes place i n
c
onnection with obtaining any federal award. Such disclosures are forwar ded fr
om tier to tier up to the recipient who in turn will forward the certification(s) to the feder
al awarding agency.
B. C ontractor shall file the required certification, ATTACHMENT B-4, Certification Regarding Lobbying, attached hereto and incorporated herein, and shall obtain s
uch certifications for all subcontracts in excess of $100,000. (x) P rocurement of Recovered Materials - Appendix II to Part 200 (Subd. (J) and 2 CFR § 200.323). Contractor shall comply with Section 6002 of the Solid Was te D
isposal Act, as amended by the Resource Conservation and Recovery Ac t. The r
equirements of Section 6002 include 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 m
aintaining a satisfactory level of competition, where the purchase pric e of the i
tem exceeds $10,000 or the value of the quantity acquired during the precedi ng fi
scal year exceeded $10,000; procuring solid waste management services i n a m
anner that maximizes energy and resource recovery; and establishing a n affi
rmative procurement program for procurement of recovered materials identified i
n the EPA guidelines. available at EPA’s Comprehensive Procurement Guidelines webpage: https://www.epa.gov/smm/comprehensive-procurement-guideline -cpg- program.
(xi) P rohibition on Certain Telecommunications and Video Surveillance Services or Equipment – Appendix II to Part 200 (Subd. (K) and 2 CFR § 200.26). Contractor is prohibited from obligating or expending loan or grant funds to:
A. P
rocure or obtain;
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-11
B. Extend or renew a contract to procure or obtain; or
C. Enter into a contract (or extend or renew a contract) to procure or obtain equipment, services, or systems that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. As described in Public Law 115- 232, section 889, covered telecommunications equipment is telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities).
(1) 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).
(2) Telecommunications or video surveillance services provided by such entities or using such equipment.
D. Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the 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.
(xii) Domestic Preferences for Procurement – Appendix II to Part 200 Subd. (L) and 2 CFR § 200.322.
A. As appropriate, and to the extent consistent with law, Contractor 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. This includes, but is not limited to iron, aluminum, steel, cement, and other manufactured products.
B. For purposes of this clause:
(1) Produced in the United States means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
(2) Manufactured products mean items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer -based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber.
k. Whether or not expressly set forth herein, all contractual provisions and grant conditions or assurances required by Treasury (including as may be amended or promulgated from Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Page B-12
time to time) are hereby incorporated herein by reference. This Contract may be amended to further incorporate and expressly state new, revised, and or subsequent contractual provisions or grant conditions as may be required by ARPA and/or Treasury. In the event of any conflict between any provision of the Contract, this Section B, or any federal or Treasury term, condition, or requirement, the stricter standard shall apply. Contractor shall refer any inconsistency or perceived inconsistency between this Contract and any federal requirement to City for guidance. Contractor shall not perform any act, fail to perform any act, or refuse to comply with any requests that would cause City to be in violation of any federal, ARPA, or Treasury term, condition, or requirement.
I hav
e read and acknowledged these FEDERAL FUNDING/GRANT REQUIREMENT
PROVISIONS
_________________________________________
___________________________
Signature of Contractor’s Authorized Officer
_______________________________________________________________________ Name and Title of Contractor’s Authorized Officer
_________________________________________________
Date
The fol
lowing Attachments (signed and completed as noted) are included:
B-
1 – CITY AWARD (no signature or completion required)
B-
2 - CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY A ND V
OLUNTARY EXCLUSION – LOWER TIER COVERED TRANSACTIONS
B-
3 - S/M/WBE AND LSA FIRM OUTREACH PLAN (to be completed and retuned within 5 days if contract awarded); and
B-
4 - NONLOBBYING CERTIFICATION FOR FEDERAL CONTRACT
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Attachment B-1 CITY AWARD Page B-13
ATTACHMENT B-1
CITY AWARD
OMB Approved No. 1505-0271
Expiration Date: November 30, 2021
U.S. DEPARTMENT OF THE TREASURY
CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS
Recipient name and address:
DUNS Number:
Taxpayer Identification Number:
Assistance Listing Number: 21.019
Sections 602(b) and 603(b) of the Social Security Act (the Act) as added by section 9901 of the American Rescue Plan Act, Pub. L. No. 117-2 (March 11, 2021) authorize the Department of the Treasury (Treasury) to make payments to certain recipients from the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund.
Recipient hereby agrees, as a condition to receiving such payment from Treasury, to the terms attached hereto.
Recipient:
__________________________________________________
Authorized Representative:
Title:
Date signed:
U.S. Department of the Treasury:
__________________________________________________
Authorized Representative:
Title:
Date:
PAPERWORK REDUCTION ACT NOTICE
The information collected will be used for the U.S. Government to process requests for support. The estimated burden associated with this collection of information is 15 minutes per response. Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be directed to the Office of Privacy, Transparency and Records, Department of the Treasury, 1500 Pennsylvania Ave., N.W., Washington, D.C. 20220. DO NOT send the form to this address. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.
DocuSign Envelope ID: 544F54D0-0B3E-4AD1-BFEF-71764FD32467 City Manager
093240653
Victorville, California, 92392-2399
952235918
14343 Civic Dr
Submitted
5/11/2021
SLT-1110
Keith Metzler
City of Victorville
2 U.S. DEPARTMENT OF THE TREASURY
CORONAVIRUS LOCAL FISCAL RECOVERY FUND
AWARD TERMS AND CONDITIONS
Use of Funds.
a. Recipient understands and agrees that the funds disbursed under this award may only be used in compliance with section 603(c) of the Social Security Act (the Act) , Treasury’s regulations implementing that section , and guidance issued by Treasury regarding the foregoing.
b. Recipient will determine prior to engaging in any project using this assistance that it has the institutional, managerial, and financial capability to ensure proper planning , management, and completion of such project.
Period of Performance. The period of performance for this award begins on the date hereof and ends on December 31, 2026. As set forth in Treasury’s implementing regulations, Recipient may use award funds to cover eligible costs incurred during the period that begins on March 3, 2021, and ends on December 31, 2024.
Reporting. Recipient agrees to comply with any reporting obligations established by Treasury as they relate to this award.
Maintenance of and Access to Records
a. Recipient shall maintain records and financial documents sufficient to evidence compliance with section 603(c) of the Act, Treasury’s regulations implementing th at section, and guidance issued by Treasury regarding the foregoing.
b. The Treasury Office of Inspector General and the Government Accountability Office, or their authorized representatives, shall have the right of access to records (electronic and otherwise) of Recipient in order to conduct audits or other investigations. c. Records shall be maintained by Recipient for a period of five (5) years after all funds have been expended or returned to Treasury, whichever is later.
Pre-award Costs. Pre-award costs, as defined in 2 C.F.R. § 200.458, may not be paid with funding from this award.
Administrative Costs. Recipient may use funds provided under this award to cover both direct and indirect costs.
Cost Sharing. Cost sharing or matching funds are not required to be provided by Recipient.
Conflicts of Interest. Recipient understands and agrees it must maintain a conflict of interest policy consistent with 2 C.F.R. § 200.318(c) and that such conflict of interest policy is applicable to each activity funded under this award. Recipient and subrecipients must disclose in writing to Treasury or the pass-through entity, as appropriate, any potential conflict of interest affecting the awarded funds in accordance with 2 C.F.R. § 200.112.
DocuSign Envelope ID: 544F54D0-0B3E-4AD1-BFEF-71764FD32467
3 Compliance with Applicable Law and Regulations.
a. Recipient agrees to comply with the requirements of section 603 of the Act, regulations adopted by Treasury pursuant to section 603(f) of the Act, and guidance issued by Treasury regarding the foregoing. Recipient also agrees to comply with all other applicable federal statutes, regulations, and executive orders, and Recipient shall provide for such compliance by other parties in any agreements it enters into with other parties relating to this award.
b. Federal regulations applicable to this award include, without limitation, the following:
i. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. Part 200, other than such provisions as Treasury may determine are inapplicable to this Award and subject to such exceptions as may be otherwise provided by Treasury. Subpart F – Audit Requirements of the Uniform Guidance, implementing the Single Audit Act, shall apply to this award.
ii. Universal Identifier and System for Award Management (SAM), 2 C.F.R. Part 25, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 25 is hereby incorporated by reference.
iii. Reporting Subaward and Executive Compensation Information, 2 C.F.R. Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 170 is hereby incorporated by reference.
iv. OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart B) that the award is subject to 2 C.F.R. Part 180 and Treasury’s implementing regulation at 31 C.F.R. Part 19.
v. Recipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 C.F.R. Part 200, Appendix XII to Part 200 is hereby incorporated by reference.
vi. Governmentwide Requirements for Drug-Free Workplace, 31 C.F.R. Part 20.
vii. New Restrictions on Lobbying, 31 C.F.R. Part 21.
viii. Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601-4655) and implementing regulations.
ix. Generally applicable federal environmental laws and regulations.
c. Statutes and regulations prohibiting discrimination applicable to this award include, without limitation, the following:
i. Title VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) and Treasury’s implementing regulations at 31 C.F.R. Part 22, which prohibit discrimination on the basis of race, color, or national origin under programs or activities receiving federal financial assistance;
DocuSign Envelope ID: 544F54D0-0B3E-4AD1-BFEF-71764FD32467
4 ii. The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§ 3601 et seq.), which prohibits discrimination in housing on the basis of race, color, religion, national origin, sex, familial status, or disability;
iii. Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794), which prohibits discrimination on the basis of disability under any program or activity receiving federal financial assistance;
iv. The Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101 et seq.), and Treasury’s implementing regulations at 31 C.F.R. Part 23, which proh ibit discrimination on the basis of age in programs or activities receiving federal financial assistance; and
v. Title II of the Americans with Disabilities Act of 1990, as amended (42 U.S.C. §§ 12101 et seq.), which prohibits discrimination on the basis of disability under programs, activities, and services provided or made available by state and local governments or instrumentalities or agencies thereto.
Remedial Actions. In the event of Recipient’s noncompliance with section 603 of the Act, other applicable laws, Treasury’s implementing regulations, guidance, or any reporting or other program requirements, Treasury may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.R. § 200.339. In the case of a violation of section 603(c) of the Act regarding the use of funds, previous payments shall be subject to recoupment as provided in section 603(e) of the Act.
Hatch Act. Recipient agrees to comply, as applicable, with requirements of the Hatch Act (5 U.S.C. §§ 1501-1508 and 7324-7328), which limit certain political activities of State or local government employees whose principal employment is in connection with an activity financed in whole or in part by this federal assistance.
False Statements. Recipient understands that making false statements or claims in connection with this award is a violation of federal law and may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in federal awards or contracts, and/or any other remedy available by law.
Publications. Any publications produced with funds from this award must display the following language: “This project [is being] [was] supported, in whole or in part, by federal award number [enter project FAIN] awarded to [name of Recipient] by the U.S. Department of the Treasury.”
Debts Owed the Federal Government.
a. Any funds paid to Recipient (1) in excess of the amount to which Recipient is finally determined to be authorized to retain under the terms of this award; (2) that are determined by the Treasury Office of Inspector General to have been misused; or (3) that are determined by Treasury to be subject to a repayment obligation pursuant to section 603(e) of the Act and have not been repaid by Recipient shall constitute a debt to the federal government.
b. Any debts determined to be owed the federal government must be paid promptly by DocuSign Envelope ID: 544F54D0-0B3E-4AD1-BFEF-71764FD32467 5 Recipient. A debt is delinquent if it has not been paid by the date specified in Treasury’s initial written demand for payment, unless other satisfactory arrangements have been made or if the Recipient knowingly or improperly retains funds that are a d ebt as defined in paragraph 14(a). Treasury will take any actions available to it to collect such a debt.
Disclaimer.
a. The United States expressly disclaims any and all responsibility or liability to Recipient or third persons for the actions of Recipient or third persons resulting in death, bodily injury, property damages, or any other losses resulting in any way from the performance of this award or any other losses resulting in any way from the performance of this award or any contract, or subcontract under this award. b. The acceptance of this award by Recipient does not in any way establish an agency relationship between the United States and Recipient.
Protections for Whistleblowers.
a. In accordance with 41 U.S.C. § 4712, Recipient may not discharge, demote, or otherwise discriminate against an employee in reprisal for disclosing to any of the list of persons or entities provided below, information that the employee reasonably believes is evidence of gross mismanagement of a federal contract or grant, a gross waste of federal funds, an abuse of authority relating to a federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a federal contract (including the competition for or negotiation of a contract) or grant. b. The list of persons and entities referenced in the paragraph above includes the following:
i. A member of Congress or a representative of a committee of Congress; ii. An Inspector General;
iii. The Government Accountability Office;
iv. A Treasury employee responsible for contract or grant oversight or management; v. An authorized official of the Department of Justice or other law enforcement agency;
vi. A court or grand jury; or
vii. A management official or other employee of Recipient, contractor, or subcontractor who has the responsibility to investigate, discover, or address misconduct.
c. Recipient shall inform its employees in writing of the rights and remedies provided under this section, in the predominant native language of the workforce.
Increasing Seat Belt Use in the United States. Pursuant to Executive Order 13043, 62 FR 19217 (Apr. 18, 1997), Recipient should encourage its contractors to adopt and enforce on-the- job seat belt policies and programs for their employees when operating company-owned, rented or personally owned vehicles.
Reducing Text Messaging While Driving. Pursuant to Executive Order 13513, 74 FR 51225 (Oct. 6, 2009), Recipient should encourage its employees, subrecipients, and contractors to adopt and enforce policies that ban text messaging while driving, and Recipient should establish workplace safety policies to decrease accidents caused by distracted drivers.
DocuSign Envelope ID: 544F54D0-0B3E-4AD1-BFEF-71764FD32467 OMB Approved No. 1505-0271
Expiration Date: November 30, 2021
1 ASSURANCES OF COMPLIANCE WITH CIVIL RIGHTS REQUIREMENTS
ASSURANCES OF COMPLIANCE WITH TITLE VI OF THE
CIVIL RIGHTS ACT OF 1964
As a condition of receipt of federal financial assistance from the Department of the Treasury, the recipient named below (hereinafter referred to as the “Recipient”) provides the assurances stated herein. The federal financial assistance may include federal grants, loans and contracts to provide assistance to the Recipient’s beneficiaries, the use or rent of Federal land or property at below market value, Federal training, a loan of Federal personnel, subsidies, and other arrangements with the intention of providing assistance. Federal financial assistance does not encompass contracts of guarantee or insurance, regulated programs, licenses, procurement contracts by the Federal government at market value, or programs that provide direct benefits.
The assurances apply to all federal financial assistance from or funds made available through the Department of the Treasury, including any assistance that the Recipient may request in the future.
The Civil Rights Restoration Act of 1987 provides that the provisions of the assurances apply to all of the operations of the Recipient’s program(s) and activity(ies), so long as any portion of the Recipient’s program(s) or activity(ies) is federally assisted in the manner prescribed above.
1. Recipient ensures its current and future compliance with Title VI of the Civil Rights Act of 1964, as amended, which prohibits exclusion from participation, denial of the benefits of, or subjection to discrimination under programs and activities receiving federal financial assistance, of any person in the United States on the ground of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury Title VI regulations at 31 CFR Part 22 and other pertinent executive orders such as Executive Order 13166, directives, circulars, policies, memoranda, and/or guidance documents.
2. Recipient acknowledges that Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency,” seeks to improve access to federally assisted programs and activities for individuals who, because of national origin, have Limited English proficiency (LEP). Recipient understands that denying a person access to its programs, services, and activities because of LEP is a form of national origin discrimination prohibited under Title VI of the Civil Rights Act of 1964 and the Department of the Treasury’s implementing regulations. Accordingly, Recipient shall initiate reasonable steps, or comply with the Department of the Treasury’s directives, to ensure that LEP persons have meaningful access to its programs, services, and activities. Recipient understands and agrees that meaningful access may entail providing language assistance services, including oral interpretation and written translation where necessary, to ensure effective communication in the Recipient’s programs, services, and activities.
3. Recipient agrees to consider the need for language services for LEP persons when Recipient develops applicable budgets and conducts programs, services, and activities. As a resource, the Department of the Treasury has published its LEP guidance at 70 FR 6067. For more information on taking reasonable steps to provide meaningful access for LEP persons, please visit http://www.lep.gov.
DocuSign Envelope ID: 544F54D0-0B3E-4AD1-BFEF-71764FD32467 OMB Approved No. 1505-0271
Expiration Date: November 30, 2021
2 4. Recipient acknowledges and agrees that compliance with the assurances constitutes a condition of continued receipt of federal financial assistance and is binding upon Recipient and Recipient’s successors, transferees, and assignees for the period in which such assistance is provided.
5. Recipient acknowledges and agrees that it must require any sub-grantees, contractors, subcontractors, successors, transferees, and assignees to comply with assurances 1-4 above, and agrees to incorporate the following language in every contract or agreement subject to Title VI and its regulations between the Recipient and the Recipient’s sub-grantees, contractors, subcontractors, successors, transferees, and assignees:
The sub-grantee, contractor, subcontractor, successor, transferee, and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this contract (or agreement). Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this contract or agreement.
6. Recipient understands and agrees that if any real property or structure is provided or improved with the aid of federal financial assistance by the Department of the Treasury, this assurance obligates the Recipient, or in the case of a subsequent transfer, the transferee, for the period during which the real property or structure is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. If any personal property is provided, this assurance obligates the Recipient for the period during which it retains ownership or possession of the property.
7. Recipient shall cooperate in any enforcement or compliance review activities by the Department of the Treasury of the aforementioned obligations. Enforcement may include investigation, arbitration, mediation, litigation, and monitoring of any settlement agreements that may result from these actions. The Recipient shall comply with information requests, on-site compliance reviews and reporting requirements.
8. Recipient shall maintain a complaint log and inform the Department of the Treasury of any complaints of discrimination on the grounds of race, color, or national origin, and limited English proficiency covered by Title VI of the Civil Rights Act of 1964 and implementing regulations and provide, upon request, a list of all such reviews or proceedings based on the complaint, pending or completed, including outcome. Recipient also must inform the Department of the Treasury if Recipient has received no complaints under Title VI.
9. Recipient must provide documentation of an administrative agency’s or court’s findings of non-compliance of Title VI and efforts to address the non-compliance, including any voluntary compliance or other DocuSign Envelope ID: 544F54D0-0B3E-4AD1-BFEF-71764FD32467 OMB Approved No. 1505-0271
Expiration Date: November 30, 2021
3 agreements between the Recipient and the administrative agency that made the finding. If the Recipient settles a case or matter alleging such discrimination, the Recipient must provide documentation of the settlement. If Recipient has not been the subject of any court or administrative agency finding of discrimination, please so state.
10. If the Recipient makes sub-awards to other agencies or other entities, the Recipient is responsible for ensuring that sub-recipients also comply with Title VI and other applicable authorities covered in this document State agencies that make sub-awards must have in place standard grant assurances and review procedures to demonstrate that that they are effectively monitoring the civil rights compliance of sub- recipients.
The United States of America has the right to seek judicial enforcement of the terms of this assurances document and nothing in this document alters or limits the federal enforcement measures that the United States may take in order to address violations of this document or applicable federal law.
Under penalty of perjury, the undersigned official(s) certifies that official(s) has read and understood the Recipient’s obligations as herein described, that any information submitted in conjunction with this assurances document is accurate and complete, and that the Recipient is in compliance with the aforementioned nondiscrimination requirements.
_________________________________
Recipient Date
_________________________________
Signature of Authorized Official
PAPERWORK REDUCTION ACT NOTICE
The information collected will be used for the U.S. Government to process requests for support. The estimated burden associat ed with this collection of information is 30 minutes per response. Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be directed to the Office of Privacy, Transparency and Records, Department of the Treasury, 1 500 Pennsylvania Ave., N.W., Washington, D.C. 20220. DO NOT send the form to this address. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.
DocuSign Envelope ID: 544F54D0-0B3E-4AD1-BFEF-71764FD32467 City of Victorville 5/11/2021
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Attachment B-2 - DEBARMENT CERT Page B-14
ATTACHMENT B-2
CE
RTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION – LOWER TIER COVERED TRANSACTIONS
(Lower Tier refers to the agency or Contractor receiving Federal funds, as well as any subcontractors that the agency or Contractor enters into contract with using those funds) As required by Executive Order 12549, Debarment and Suspension, and 31 CFR Part 19 and 2 CFR part 180, City may not enter into contract with any entity that is debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by the Federal Government from participating in transactions involving Federal funds. Contractor is required to sign the certification below which specifies that neither Contractor nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by the Federal agency. It also certifies that Contractor will not use, directly or indirectly, any of these funds to employ, award contracts to, engage the services of, or fund any Contractor that is debarred, suspended, or ineligible under 31 CFR Part 19.
Instruction for Certification
1. The c ertification in this clause is a material representation of fact upon which reliance was pl
aced when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government the department or agency with which this transacti on or
iginated may pursue available remedies, including suspension and/or debarment.
2. The pr
ospective lower tier participant shall provide immediate written notice to the person to whom this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or had become erroneous by reason of changed circumstances
.
3. The
terms covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excluded, as used in this clause, have the meaning set out in the Definition and Coverage sections of rules implementing Executive Order 12549. You may contact the person to which this proposal is submitted for assistance in obtaining a copy of those regulations .
4. The pr
ospective lower tier participant agrees by submitting this agreement that, shoul d the pr
oposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction origin ated.
5. The pr
ospective lower tier participant further agrees by submitting this proposal that it will include this clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction," without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions .
6. A
participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment, debarred, sus pended, i
neligible, or voluntarily excluded from covered transactions, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines th e el
igibility of its principals. Each participant may, but is not required to, check the List of Parties Excluded from Federal Procurement and Nonprocurement Programs.
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Attachment B-2 - DEBARMENT CERT Page B-15
7. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.
8. Except for transactions authorized under paragraph 4 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction originated may pursue available remedies, including suspensi on and/or debarment.
Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion – Lower Tier Covered Transactions
1. Contractor certifies that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency.
2. Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offence in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statues or commission of embezzlement, theft, forgery, bribery, falsifications or destruction of records, making false statements, or receiving stolen property;
3. Are not presently indicted for, or otherwise criminally or civilly charged by a government entity (Federal, State, or local) with, commission of any of the offenses enumerated in paragraph 2 of this certification, and
4. Have not within a three-year period preceding this application/ proposal had one or more public transactions (Federal, State, or local) terminated for cause or default.
5. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation.
____________________________________________
Name (Typed)
____________________________________________
Title and Organization Name (Typed)
____________________________________________
Signature
____________________________________________
Date
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Attachment B-3 - S/W/WBE/LSA ORPLAN Page B-16
ATTACHMENT B-3
S/M/WBE AND LSA FIRM OUTREACH PLAN
Project Number: ______________
Contractor: ___________________
Submittal #: __________________
In this section, the Contractor is to provide details regarding strategies and efforts made to solicit, engage and utilize small and minority businesses, women's business enterprises (S/M/WBE) and labor surplus area (LSA) firms to demonstrate responsiveness to 2 CFR § 200.321.
1. Identify the items of work made available to S/M/WBEs and LSAs. Provide a description of the work items, approximate dollar amount and the percentage of the total Contract value.
Description of Work
Item
Contractor
Normally
Performs (Y/N)
Unbundled from
Larger Scope (Y/N)
If Yes, List Scope
Amount ($) Percentage
of Contract
2. Describe the outreach efforts to identify S/M/WBEs and LSAs on this Agreement, list agencies/associations/databases consulted and the date, method and result of the outreach efforts (examples include but are not limited to: Small Business Administration, the Minority Business Development Agency, the Department of Commerce, minority business associates, Small Business Development Centers, DGS).
3. Describe the outreach efforts exerted to ensure that qualified S/M/WBEs and LSAs were solicited and had sufficient information about subcontracting opportunities on this Contract.
Include the date and method of the outreach efforts.
Agency/Association/
Chamber/Database
Name
Contact
Name
Method of
Outreach
(Fax, Email, Phone,
etc.)
Date of
Outreach
Response/Outcom
e
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Attachment B-3 - S/W/WBE/LSA ORPLAN P age B -17
S/M/WB
E and
LSA
Firm
Name
Contact
Name/Title
Business
Type
(Small/
Minority/
Women)
Outreach
Method
(Fax,
Email,
Phone,
etc.)
Initial
Outreach
Date
Follow-Up
Date
Resp
onse/
Inter
ested
in
Biddi
ng
(Y/N)
4. D
etail methods utilized to determine whether S/M/WBEs and LSAs were qualified:
______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
5. What appr
oach was taken to arrange subcontracting work in a way that would encourage the participation of S/M/WBEs and LSAs on this Agreement. Provide examples of how delivery schedules, when permittable, were established in a way that would encourage participation by S/M/WBEs and LSAs
.
______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Attachment B-3 - S/W/WBE/LSA ORPLAN Page B-18
6. Identify any contractual requirements, incentives, or other measures your team utilized or considered utilizing on this Agreement to promote S/M/WBE and LSA assistance. This may include assistance in meeting insurance limits, bonding requirements, obtaining certifications or licenses that are appropriate in facilitating the type of work the S/M/WBEs and LSAs would be performing.
______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
Note: USE ADDITIONAL SHEETS NECESSARY TO DEMONSTRATE
RESPONSIVENESS.
____________________________________________
Name (Typed)
____________________________________________
Title and Organization Name (Typed)
____________________________________________
Signature
____________________________________________
Date
CITY OF VICTORVILLE , CALIFORNIA
Federal Requirements and Forms CITY HALL SECURITY CAMERA EXPANSION SECTION B CC25-022
Attachment B-4 – NON-LOBBYING CERT Page B-19
ATTACHMENT B-3
NONLOBBYING CERTIFICATION FOR FEDERAL CONTRACT
The undersigned certifies, to the best of his or her knowledge and belief, that:
(1) N
o Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to
any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the maki ng of any
Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. (2) If any
funds other than Federal appropriated funds have been paid or will be paid to any pers on 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 with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submi t S
tandard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. (3) The
undersigned 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 agreements) and that all subrecipients shall certify and disclose accordingly.
Thi
s certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, T itle 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.
__________________________________________
___________________________
Signature of Contractor/Contractor’s Authorized Officer Date ___________________________________________________________________________ Name and Title of Contractor’s/Contractor’s Authorized Officer 22 CONSTRUCTION AGREEMENT/VETERANS COMMUNICATION/PROJECT CC25-022
EXHIBIT C
F
EDERAL PREVAILING WAGE
S
ee Attachment
Item Number: 17
City Council / Board of Directors
Written Communications
Meeting of: November 19, 2024
Submitted By:
Brenda Hampton, Director of Electric Utility Services
Subject:
Council Policy No. CP-24-03 (CP-24-03) – Victorville Municipal Utility Services Electric Financial Management Policy
Recommendation:
That the Honorable City Council review and adopt CP-24-03, the Victorville Municipal Utility Services Electric Financial Management Policy.
Fiscal Impact:
There is no fiscal impact associated with adoption of CP-24-03, the Electric Financial Management Policy (“Policy”). The Policy created by Victorville Municipal Utility Services (“VMUS”) is to provide guidelines for effectively managing the utility's finances by establishing metrics and setting reserve levels that are reasonable, mitigate risk, and promote the long-term financial health of the utility. The combination of the VMUS Electric Funds (Funds 420, 421 and 422) will be subject to this policy.
Strategic Plan Goal:
This item aligns with Goal A, Financial Sustainability, by fostering the fiscal health of the electric utility through established metrics and reserve targets that will allow the department to maintain a strong financial position, even during economic uncertainties.
Background:
VMUS is a retail electric service provider for commercial and industrial customers located within the Southern California Logistics Airport (“SCLA”) and the Foxborough Industrial Park. The Electric System is owned and operated by the City under the administration of VMUS. The Electric fund is considered an Enterprise Fund of the City and accounts for the operation, maintenance, and capital assets of the City’s electric utility, which is funded by commercial and industrial electric rates and other fees. VMUS was established as an instrument for economic development, offering lower energy costs to current customers and attracting new businesses to Victorville. VMUS delivers safe, reliable, and 3 8
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competitively priced electric service while remaining focused on providing exceptional customer support.
VMUS has prepared an CP-24-03 Electric Financial Management Policy (Attachment A) which establishes important financial metrics and reserve levels that will be used to evaluate and assess the financial performance, health, and long-term sustainability of the utility, and guide future decision-making.
Discussion:
The Electric Financial Management Policy focuses on the key performance indicators (KPI’s) commonly used in the utility industry. It establishes specific target and/or minimum levels for each of these indicators, which include debt service coverage, fixed cost coverage, unrestricted operating reserves, and unrestricted capital reserves. Maintaining KPI’s at the assigned levels will enable VMUS to cover fixed expenses, make timely debt payments, promote rate stability, manage operational and market risk, and fund unexpected or accelerated capital expenditures that are prudent to the utility’s operations.
The Policy provides a framework and guideline for prudently managing the financial profile of the utility. If reserves and coverages exceed target levels, VMUS, with the appropriate approvals of the Victorville City Council, may use those funds for capital projects, debt or rate reduction, or other strategic objectives. Should the utility fall below the minimum levels, VMUS may implement a strategic plan to return reserves to their minimum or targeted levels within three years.
VMUS staff recently conducted a thorough analysis of its financials over the past few years, with a focus on the metrics as outlined in the Electric Financial Management Policy.
To calculate each financial metric, staff uses the City’s audited Annual Comprehensive Financial Report (ACFR). This task was completed to ensure the proposed metrics are attainable and truly represent minimum and target benchmarks for debt service coverage and financial reserves. Using the average of the last three years, VMUS attained the metrics shown in the chart below and in further detail through Attachment B.
Metric Minimum Target VMUS
Avg.
Metric
Achieved?
Debt Service Coverage 1.2x 2.8x Yes
Fixed Cost Coverage 1.4x 1.74x Yes
Unrestricted Operating Reserve 120 days 150 days 409 days Yes Unrestricted Capital Reserve Higher of 25% of five
year forecasted capital
expenditures or 3% of
net depreciable capital
assets
$489,818 Yes
The Policy will be reviewed annually by VMUS staff during the annual budget process.
Should there be substantive material changes in the risk exposure or financial conditions of the Electric Funds, the Policy will be updated and brought to Council for adoption. This Policy is intended to serve as a guide and does not restrict the Victorville City Council 3 8
4 8
from reviewing proposed rate actions, debt issuances or other actions of substance to VMUS.
Staff recommends adoption of the Electric Financial Management Policy. If adopted by Council, this Policy will become effective immediately.
Staff remains available for any questions the Council may have.
Attachments: A. CP-24-03 - Victorville Municipal Utility Services Electric Financial Management Policy
B. VMUS Current Metrics
1 CITY OF VICTORVILLE
COUNCIL POLICY
SUBJECT:
Victorville Municipal Utility Services (“VMUS”)
ELECTRIC FINANCIAL MANAGEMENT POLICY
POLICY NO.:
CP-24-03
DATE:
No vember 19, 2024
BACKGROUND
Long-term fiscal stability is an important factor for VMUS as it sends a positive signal to its ratepayers, investors , and regulatory and credit agencies. Strong and transparent financial management policies, including maintaining prudent reserves for emergencies, rate stability, working capital and capital improvements, are consistent with best practices within the utility industry and are critical to VMUS as they help to:
• Maintain the short-term and long-term financial health of the Electric Fund • Maintain stable rates for customers that are deemed fair and reasonable and promote manageable rate increases
• Fund unanticipated costs
• Ensure funds exist for system improvements
• Ensure cash exists to permit timely payments
• Act as a significant positive credit factor in bond ratings
APPLICABILITY
This policy will apply to the VMUS Electric Funds, which includes the combination of Funds 420, 421 and 422. It is important to note that the recommendations in the Policy are associated with projected financial information for fiscal year end of future years. Actual results may vary due to unforeseen financial considerations.
PURPOSE
VMUS seeks to provide safe, reliable, and competitively priced electric service to all its customers. As a community asset and in consideration of its mission, VMUS has prepared the Financial Management Policy ( “Policy”) with the intent of establishing guidelines for prudently managing the financial profile of the utility to better serve existing customers and satisfy the demands of current and future customers. The policy establishes minimum and target benchmarks for debt service coverage and financial reserves. 2 POLICY
The Policy anticipates that in practice there is a range of acceptable results and a balance between cash flow and reserve levels is warranted.
1. Debt Service Coverage (DSC)
• Purpose: Enable the utility to make debt service payments in an extreme event that may impair the utility’s ability to provide services and to meet the bond rate covenant, thus impacting the revenues that are relied upon to pay outstanding debt service.
DSC = (Net Revenues – Fixed Expenses) / Debt Service Cost • Minimum: 1.2x
2. Fixed Cost Coverage (FCC)
• Purpose: Enhance the utility ’s ability to cover its reoccurring ( fixed) expenditures based on reoccurring revenues and to protect the utility’s credit worthiness. This solvency ratio will measure the utility’s ability to generate enough cash flow to cover its fixed expenses.
FCC = ((Net Revenues – Fixed Expenses) + (Purchased Power Costs/2)) / (Debt Service Cost + (Purchased Power Costs/2))
• Target: 1.4x
3. Unrestricted Operating Reserves
• Purpose: Enhance the utility’s ability to manage potential risk and address short -term financial variability resulting from unexpected operating results.
• Minimum: 120 days’ cash
• Target: 150 days’ cash
4. Unrestricted Capital Reserves
• Purpose: Ensure the utility has sufficient funds for unplanned or accelerated capital expenditures. These expenditures include but are not limited to equipment and infrastructure replacements and improvements.
• Target: This reserve is determined annually and will typically cover 25% of the following five years’ worth of forecasted capital expenditures or be equal to a minimum 3% of net depreciable capital assets, whichever is higher. Th is reserve target will exclude anticipated capital expenditures where the utility has arranged, or plans to arrange, financing due to a project or equipment’s size and complexity.
Building and Drawing Upon Reserves - To the extent that unrestricted reserves and coverages are above the target levels, per City policy, VMUS staff may recommend utilizing those available funds to pay for capital projects (reducing the need to issue debt), paydown outstanding debt, pay for any unforeseen expenditures, reduce customer rates or to fund other strategic objectives.
3 Reserves and coverages below the minimum level may impair VMUS ’ ability to serve its customers and VMUS may be exposed to significant operational risks. Should VMUS draw down reserves to their minimum levels, VMUS may implement plans to return reserves to their targeted levels within three years.
IMPLEMENTATION AND REVIEW
The Policy will be reviewed annually and updated when there is a significant material change in the risk exposure or conditions. It is important to note that this Policy is intended to serve as a guide and does not restrict the Victorville City Council from reviewing the proposed rate actions, debt issuances or other actions of substance to the Utility.
FY 2021 FY 2022 FY 2023
System Revenues
Revenue From Sale of Energy $15,754,047 $17,419,989 $20,207,113 Miscellaneous Revenue 76,155 702 16,382
Interest Income 21,325 3,649 600,410
Total System Revenues $15,851,527 $17,424,340 $20,823,904 Matinenance and Operation Costs
Purchased Power and Associated Costs $7,120,395 $9,449,736 $9,506,758 Maintenance and Operation 2,487,769 2,819,799 1,314,810 Personnel Services 1,087,493 1,023,404 1,253,455
Total Maintenance and Operation Costs $10,695,657 $13,292,939 $12,075,023 System Net Revenues Available for Debt Service $5,155,870 $4,131,40 1 $8,748,882 Debt Service
VJPFA Bonds Debt Service $1,457,896 $1,588,054 $0
2022 Electric Revenue Bonds $0 $1,588,054 $3,845,634
Bonds Debt Service Coverage Ratio 3.54 2.60 -
Interfund Loan Repayment $1,120,513 $1,01 4,823 $1,014,823 System Net Revenues Remaining $2,577,461 $1,52 8,524 $3,888,425 Cash and Investments $11,890,324 $15,046,640 $18,090,907 3 YEAR AVG.
Debt Service Coverage Ratio 3.54 2.60 2.28 2.80
Fixed Cost Coverage Ratio 1.96 1.56 1.69 1.74
Unrestricted Operating Reserves (Days Cash on Hand) 356 370 501 409 Unrestricted Capital Reserves:
Higher of 25% of five year forecasted capital expenditures or 3% of net depreciable capital assets FY 2021 FY 2022 FY 2023
Depreciation Amount from ACFR 11,581,914$ 10,231,194 $ 9,649,414 $ 3 YEAR AVG. 3% of Depreciation Amount 347,457$ 306,936 $ 289,482 $ 314,625$ FY25 FY26 FY27 FY28 FY29
Five year Forecasted Capital Expenditures $1,859,272 $25,000 $25,000 $25,000 $25,000 $1,959,272 25% of Forecasted $489,818
Unrestricted Capital Reserves $489,818
VMUS Current Metrics
VMUS ELECTRIC SYSTEM
Historical Revenues, Expenses and Debt Service Coverage (Fiscal Year Ended June 30)
Item Number: 18
City Council / Board of Directors
Written Communications
Meeting of: November 19, 2024
Submitted By:
Brenda Hampton, Director of Electric Utility Services
Subject:
Updated VMUS Renewable Energy Resources Procurement Plan Recommendation:
That the Honorable City Council adopt Resolution No. 24-097 the Renewable Energy Resources Procurement Plan, Compliance Period 4 (2021-2024) (Attachment B) and authorizing certain other actions in connection therewith.
Fiscal Impact:
There is no fiscal impact associated with the adoption of resolution No. 24-097.
Resolution No. 11-051 established a limitation on the procurement expenditures for all Renewable Portfolio Standards (“RPS”) eligible resources used to comply with the RPS Enforcement Program. VMUS will apply the Cost Limitations and Delay of Timely Compliance, as described in Sections 9 and 10 of the RPS Procurement Plan and is not obligated to incur additional expenditures for Compliance Period 4 RPS procurement resources.
Strategic Plan Goal:
This item aligns with Strategic Plan Goal E – Invest in Infrastructure. VMUS must comply with the state’s mandate related to the procurement of renewable energy resources. The goal of the initiative is to support the reduction of greenhouse gas emissions, create a diverse energy supply, promote clean energy, ensure grid reliability and promote affordability.
Background:
California Public Utilities Code (PUC) § 399.30(a) requires all publicly owned electric utilities (POUs), to “adopt and implement a renewable energy resources procurement plan” that requires the POU to procure a minimum quantity of electricity and/or renewable energy credits (“RECs”) from eligible renewable energy resources, as a percentage of total retail sales.
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As directed by PUC § 399.30(e), the City Council adopted the Renewable Energy Resources Enforcement Program (“RPS Enforcement Program”) on February 9, 2012.
Through the RPS Enforcement Program, the City Council established the initial compliance periods, adopted RPS-eligible procurement targets, and described the framework for how VMUS would implement its RPS program. Section 10 of the RPS Enforcement Program directed the City Manager to develop and present a Renewable Energy Resources Procurement Plan (“RPS Procurement Plan”) to the City Council.
Discussion:
Consistent with the RPS Enforcement Program and PUC § 399.30(a), the City Council adopted RPS Procurement Plan, Compliance Period 1 (2011-2013), Compliance Period 2 (2014-2016) and Compliance Period 3 (2017-2020) on November 18, 2013, October 6, 2015, and December 1, 2020, respectively. For each compliance period the RPS Procurement Plan described VMUS’ intended strategy to comply with the RPS requirements. The California Energy Commission deemed VMUS in compliance with the RPS procurement requirements for Compliance Periods 1, 2 and 3.
On October 7, 2015, Governor Brown signed SB 350 into law, adopting an RPS procurement target of 50 percent by 2030 and making various other changes to the RPS Program. On September 10, 2018, Governor Brown signed SB 100 into law, which increased the 2030 RPS target to 60 percent and set a statewide goal of meeting all electric load with carbon free resources by 2045. The specific RPS procurement targets set by SB 100 are the following: at least 44 percent by December 31, 2024, 52 percent by December 31, 2027, and 60 percent by December 31, 2030.
PUC Code § 399.30(d)(2)(B) and PUC § 399.30(d)(2)(A) gives the governing board of each publicly owned electric utility (POU) the authority to establish a cost limitation and Delay of Timely Compliance Rule, which serves as alternative mechanisms for complying with the RPS procurement requirements. Pursuant to this authority, the POU governing board can set a dollar amount limit on RPS procurement expenditures that is set at a level that prevents disproportionate rate impacts for the POU’s customers. For a POU that sets a cost limitation, once that POU has spent the amount of the cost limitation, the POU is in compliance with the RPS program.
The attached VMUS RPS Procurement Plan for compliance period 4 adopts procurement requirements consistent with SB 350 and SB 100, provides more recent forecast data, and updates the description of VMUS’ intended strategy to comply with the RPS Program requirements. This RPS Procurement Plan also provides a methodology for determining a cost limitation and specifies the dollar amount the VMUS’ cost limitation for the fourth compliance period.
VMUS’ largest renewable energy power purchase agreement was intended to cover a significant portion of the RPS requirements in Compliance Period 4. The project was scheduled to be completed by January 1, 2022. The current forecast for project completion is January 1, 2025, due to major permitting and materials delays related to COVID-19. Additional unanticipated interconnection issues delayed the project even 3 8
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further. The continuous and unanticipated delays associated with this project were outside VMUS’ control, and VMUS was not able to meet the RPS plan requirements for compliance period 4 (2021-2024).
For Compliance Period 4, VMUS will apply the Cost Limitation Rule per PUC § 399.30(d)(2)(B), and consistent with Section 9 of the RPS Enforcement Program, and Delay of Timely Compliance Rules per PUC § 399.30(d)(2)(A) and consistent with Section 7 of the RPS Enforcement Program. To avoid disproportionate rate impacts during the fourth compliance period, during the annual budget approval process, VMUS will calculate the revenues less expenses and the cumulative operating deficit (before the incremental cost of procuring electricity products to satisfy the RPS requirements) and identify the funds available from such amount to concurrently satisfy the applicable RPS requirement and maintain prudent reserves (Cost Limitation Guideline). VMUS shall not be obligated to expend funds on RPS procurement greater than the Cost Limitation Guideline or RPS procurement targets. VMUS is forecasted to have a cumulative operating deficit through December 31, 2024, and the cost of procuring electricity products to satisfy RPS requirements is greater than zero, the cost limitation for Compliance Period 4 is determined to be $0. Once VMUS’ largest renewable energy power purchase agreement achieves commercial operation, VMUS will comply with future short-term and long-term RPS procurement requirements.
Staff remains available for any questions you may have.
Attachments: A. Resolution No. 24-097
B. VMUS Renewable Energy Resources Procurement Plan
Attachment A
Resolution No. 24-097
RESOLUTION NO. 24-097
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VICTORVILLE, CALIFORNIA, SUPERSEEDING RESOLUTION NO. 20- 105 AND IN FURTHERANCE OF RESOLUTION NO. 11 -051, REVISING
THE RENEWABLE ENERGY RESOURCES PROCUREMENT PLAN FOR
VICTORVILLE MUNICIPAL UTILITY SERVICES AND AUTHORIZING
THE TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION
THEREWITH.
WHEREAS, the City of Victorville (“City”), a municipal corporation, is authorized under various provisions of the California Constitution and the general laws of California (including, specifically, Article XI, § 9(a) of the California Constitution, Public Utilities Code § 10004, and Government Code § 39732(a) to establish, purchase, and operate a public utility to furnish its inhabitants with, among other things, electricity; and
WHEREAS, the City operates a municipal electric utility (“ Victorville Municipal Utility Services” or “VMUS”); and
WHEREAS, the City Council of the City of Victorville (“City Council”) is the Governing Board for VMUS; and
WHEREAS, as a municipal electric utility, VMUS is generally subject to the legislative and regulatory requirement applicable to local publicly owned electric utilities (“POUs”); and
WHEREAS, the State of California passed Senate Bill 2 (1st Extraordinary Session) (“SBX1-2”), effective as of December 10, 2011, requiring governing boards of POUs to adopt and implement, among other things, a renewable energy resources enforcement program that requires POUs, like VMUS, to procure a minimum quantity of eligible renewable energy resources over certain periods, subject to cost limitation and other flexible compliance measures adopted by the POUs' respective governing boards; and
WHEREAS, the California Energy Commission adopted regulations specifying procedures for the enforcement of the requirements of SBX1- 2 on June 12, 2013, and which became effective on October 1, 2013; and
WHEREAS, on October 7, 2015, Governor Brown signed the Clean Energy and Pollution Reduction Act of 2015 (Senate Bill 350 (De Leon) (“SB 350”)), with an effective date of January 1, 2016; and
WHEREAS, on September 10, 2018, Governor Brown signed Senate Bill 100 (De Leon) (“SB 100”), with an effective date of January 1, 2019; and
WHEREAS, SBX1-2, SB 350, and SB 100 require the City Council to ensure that the amount of eligible renewable energy resources that was procured by VMUS for the period from January 1, 2011 to December 31, 2013 was equal to an average of 20 percent of retail sales; and that VMUS must make reasonable progress to ensure that the procurement of eligible renewable energy resources achieves 25 percent of retail sales by December 31, 2016, 33 percent of retail sales by December 31, 2020, 44 percent by December 31, 2024, 52 percent by December 31, 2027, and 60 percent by December 31, 2030; and
WHEREAS, Public Utilities Code § 399.30(a) requires California’s POUs to adopt a Renewable Energy Resources Procurement Plan (“RPS Procurement Plan ”), and further, Public Utilities Code § 399.30(e) requires POUs to adopt and implement a Renewable Energy Resources Enforcement Program (“RPS Enforcement Program”) to enforce the implementation of a POU’s RPS Procurement Plan; and
WHEREAS, in accordance with Public Utilities Code § 399.30(e), the City Council, as the governing board of VMUS, adopted Resolution No. 11- 051 on December 6, 2011, adopting and establishing an RPS Enforcement Program , which established compliance periods, adopted RPS procurement targets, authorized VMUS to establish cost limitations on procurement expenditures, and directed the City Manager to develop and present to the City Council an RPS Procurement Plan; and
WHEREAS, in accordance with Public Utilities Code § 399.30(a), the City Council adopted Resolution No. 13-056 on November 5, 2013, which adopted VMUS’ RPS Procurement Plan for the first compliance period (2011-2013), which established specific procurement targets for each of the compliance periods, specified portfolio balance requirements consistent with Public Utilities Code § 399.16, described VMUS’ existing and planned procurement activities, forecasted the VMUS’ retail sales and RPS obligations, adopted rules for excess procurement, and adopted a cost limitation methodology and cost limitation amount; and
WHEREAS, pursuant to Public Utilities Code § 399.30(a), the City Council adopted Resolution No. 15-065 on October 6, 2015, which adopted VMUS’ RPS Procurement Plan for the second compliance period (2014- 2016), which provided an updated description of VMUS’ procurement activities, forecast of VMUS’ retail sales and RPS obligations, and adopted a cost limitation methodology and cost limitation amount; and
WHEREAS, pursuant to Public Utilities Code § 399.30(a), the City Council adopted Resolution No. 18-067 on August 7, 2018 which was superseded by Resolution No. 20-105 which was approved on December 1, 2020, which adopted VMUS’ RPS Procurement Plan for the third compliance period ( 2017-2020) and provided an updated description of VMUS’ procurement targets, described the electricity products VMUS planned to use to meet procurement targets, updated forecast of VMUS’ retail sales and RPS obligations, and adopted a cost limitation methodology and cost limitation amount; and
WHEREAS, staff has prepared an RPS Procurement Plan for the fourth compliance period (2021-2024) updating the forecasted retail sales and RPS procurement requirements, providing an updated description of VMUS’ existing and planned RPS procurement activities, adopting new procurement targets for the fifth and sixth compliance periods consistent with SB 350 and SB 100, and revising the information and methodology used for establishing a cost limitation for the fourth compliance period; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The Victorville Municipal Utility Services Renewable Energy Resource Procurement Plan, Compliance Period 4 (2021-2024), which is attached hereto and incorporated herein, is hereby approved and adopted
Section 2. As authorized by Public Utilities Code § 399.30(d)(2)(B), the following optional compliance mechanism is hereby approved and adopted:
A cost limitation for procurement expenditures by VMUS is hereby approved and adopted (as described in Section 10 of the RPS Procurement Plan).
Section 3. Except as to matters specifically reserved for the Victorville City Council, the City Manager or his designee is authorized and directed to do and perform all acts required to implement the Victorville Municipal Utility Services Renewable Energy Resource Procurement Plan, Compliance Period 4 (2021-2024), and to periodically report to the Victorville City Council.
Section 4. The City Clerk shall certify to the adoption of this Resolution.
Section 5. This Resolution shall take effect immediately upon its adoption.
Attachment B
VMUS Renewable Energy Resources
Procurement Plan
Compliance Period 4 (2021-2024)
VICTORVILLE MUNICIPAL UTILITY
SERVICES (VMUS)
RENEWABLE ENERGY RESOURCES
PROCUREMENT PLAN
Compliance Period 4 (2021-2024)
November 19, 2024
TABLE OF CONTENTS
Section 1. Policy Statement ...................................................................................................... 3 Section 2. Definitions ............................................................................................................... 3 Section 3. RPS Enforcement Program ...................................................................................... 3 Section 4. Specified RPS Procurement Targets ......................................................................... 3 Section 5. RPS Procurement Requirements .............................................................................. 4 Section 6. RPS Procurement .................................................................................................... 5 Section 7. Forecast of Retail Sales and RPS Compliance Obligations ......................................... 7 Section 8. Excess Procurement Rules ....................................................................................... 8 Section 9. Delay of Timely Compliance Rules ........................................................................... 8 Section 10. Cost Limitation ....................................................................................................... 9 Section 11. Delayed RPS Procurement ....................................................................................... 9
3 Section 1. POLICY STATEMENT
California Public Utilities Code § 399.30(a) requires all publicly owned electric utilities (“POUs”), including the City of Victorville, operating through its publicly owned utility ( Victorville Municipal Utility Services ( VMUS), to “ adopt and implement a renewable energy resources procurement plan” that requires the POU to procure a minimum quantity of electricity and/or renewable energy credits (“RECs”) from eligible renewable energy resources, as a percentage of total retail sales. This document comprises VMUS’ renewable energy resources procurement plan (“RPS Procurement Plan”). This RPS Procurement Plan describes how VMUS will achieve its RPS procurement requirements in each compliance period.
Section 2. DEFINITIONS
The definitions set forth in Public Resources Code (“PRC”) § 25741 and Public Utilities Code (“PUC”) § 399.12 are incorporated herein. Capitalized terms in this RPS Procurement Plan, as first identified in parentheses, shall have the meaning given to such term in the body of this RPS Procurement Plan.
Section 3. RPS ENFORCEMENT PROGRAM
As required by PUC § 399.30, the Victorville City Council (VMUS’ Governing Board) adopted the Renewable Energy Resources Enforcement Program (“RPS Enforcement Program”) on December 6 , 2011. Through the RPS Enforcement Program, the Victorville City Council established compliance periods, adopted RPS -eligible procurement targets, and described the framework for how VMUS would implement its RPS program. Section 10 of the RPS Enforcement Program directed the City Manager or his duly authorized designee to develop and present an RPS Procurement Plan to the VMUS Governing Board.
Section 4. SPECIFIED RPS PROCUREMENT TARGETS
In the RPS Enforcement Program, the Victorville City Council adopted general RPS procurement targets for each of the initial three compliance periods. Pursuant to PUC § 399.30(b) and (c), the Victorville City Council adopts and further specifies the RPS procurement targets for Compliance Periods 4, 5, 6, and all subsequent three years periods as follows:
Compliance Period 4
For the four-year period beginning January 1, 2021 and ending December 31, 2024, VMUS shall procure sufficient RPS-eligible resources to equal the sum of the following: (35.75 percent of 2021 retail sales) + (38.5 percent of 2022 retail sales) + (41.25 percent of 2023 4 retail sales) + (44 percent of 2024 retail sales). VMUS shall not be required to procure a specific quantity of RPS -eligible resources in any individual year during this compliance period.
Compliance Period 5
For the three -year period beginning January 1, 2025 and ending December 31, 2027, VMUS shall procure sufficient RPS-eligible resources to equal the sum of the following:
(46 percent of 2025 retail sales) + ( 50 percent of 2026 retail sales) + ( 52 percent of 2027 retail sales). VMUS shall not be required to procure a specific quantity of RPS -eligible resources in any individual year during this compliance period.
Compliance Period 6
For the three -year period beginning January 1, 2028 and ending December 31, 2030, VMUS shall procure sufficient RPS-eligible resources to equal the sum of the following:
(54.67 percent of 2028 retail sales) + ( 57.33 percent of 2029 retail sales) + ( 60 percent of 2030 retail sales). VMUS shall not be required to procure a specific quantity of RPS - eligible resources in any individual year during this compliance period.
Subsequent Three Year Compliance Periods
For each subsequent three -year compliance period, VMUS shall procure sufficient RPS - eligible resources to equal an average of 60 percent of retail sales.
Section 5. RPS PROCUREMENT REQUIREMENTS
PUC § 399.30(c)(3), consistent with PUC § 399.16, as implemented by the Energy Commission’s RPS Regulations specifies certain procurement requirements that are applicable to “electricity products,” which refers to either: (1) electricity and the associated renewable energy credit (“REC”) generated by an eligible renewable energy resource; or (2) an unbundled REC.
A. Procurement Associated with Pre-June 2010 Contracts and Ownership Agreements
Pursuant to PUC § 399.16(d), electricity products associated with contracts or ownership agreements that were executed prior to June 1, 2010 and which met certain specified eligibility requirements, must count toward the POU’s RPS Procurement Targets without regard to the portfolio content categories (“PCCs”).
B. Procurement Associated with Post June 2010 Contracts and Ownership Agreements
5 Pursuant to PUC § 399.16(b)-(c), as implemented by the Energy Commission’s RPS Regulations, electricity products associated with contracts or ownership agreements that were executed after June 1, 2010 must be classified into the following three PCCs:
PCC1: Electricity products that are procured as bundled and that are associated with an eligible renewable energy resource that either: (1) has its first point on interconnection within a California balancing authority (“BA”); (2) has its first point of intercon nection to a distribution system used to serve end users within a California BA; (3) is scheduled into a California BA without substituting electricity from another source; or (4) is dynamically transferred into a California BA.
PCC2: Electricity products that are procured as bundled and that are associated with an eligible renewable energy resource that is located within the WECC but outside of a California BA, and for which the renewable energy is matched with an equal amount of incre mental energy that is scheduled into a California BA.
PCC3: All electricity products that are associated with eligible renewable energy resources, but that do not meet the definition of PCC1 or PCC2.
C. Portfolio Balance Requirements Applicable to Procurement Associated with Post June 1, 2010 Contracts and Ownership Agreements
Pursuant to PUC § 399.16(c), as implemented by the Energy Commission’s RPS Regulations, the following portfolio balance requirements are applicable to all electricity products that are credited towards the RPS Procurement Quantity Requirements that are ass ociated with contracts or ownership agreements executed after June 1, 2010:
Compliance Period 3 and All Subsequent Compliance Periods PCC1 ≥ 75%
PCC2 No Limitation
PCC3 ≤ 10%
Section 6. RPS PROCUREMENT
6 A. RPS Contracts Executed Prior to June 1, 2010
None.
B. RPS Procurement Acquired After June 1, 2010
VMUA signed a 25- year PPA with AM Wind Repower LLC (AM Wind) for the procurement of eleven megawatts of renewable energy from the Alta Mesa RP27 Wind Energy Center located in Riverside County. The scheduled “Commercial Operation Date” (COD) was January 1, 2022, and would interconnect to the California Independent System Operator (“CAISO”) grid as a Full Capacity Deliverabil ity Status resource. With the continued delay in the completion of the interconnection the current forecasted COD is January 1, 2025. The PPA also provides the option of battery storage at the site. The current annual forecast generation of 44,944 megawatt-hours is 109% of the forecasted PCC 1 and PCC 2 requirements in 2025 (Compliance Period 5).
VMUS signed a 25-year PPA with RE Gaskell West 2 LLC for the procurement of eleven megawatts of renewable energy from the Gaskell West 2b coupled with a 20- year eight- megawatt Battery Energy Storage System located in Kern County. The scheduled COD was January 1, 2022, and would interconnect to the CAISO grid as a Full Capacity Deliverability Status resource. The COD was achieved on May 5, 2023. The current forecasted generation of 50,015 megawatt-hours through December 31, 2024, is 35% of the forecasted PCC 1 and PCC2 requirements in Compliance Period 4.
C. Planned RPS Procurement
Victorville currently has no additional planned RPS procurement.
7 Section 7. FORECAST OF RETAIL SALES AND RPS COMPLIANCE OBLIGATIONS
Compliance Period 4 Compliance Period 5 Compliance Period 6 Year 2021
Actual
2022
Actual
2023
Actual
2024
Forecast
2021-
2024
2025
Forecast
2026
Forecast
2027
Forecast
2025-
2027
2028
Forecast
2029
Forecast
2030
Forecast 2028-2030
Retail Sales
(MWH) 99,676 102,678 99,816 99,816 401,986 99,816 99,816 99,816 299,448 99,816 99,816 99,816 299,418 RPS % 35.75% 38.5% 41.25% 44% 46% 50% 52% 54.67% 57.33% 60% RPS
Procurement
Requirement
(MWh)
35,634 39,531 41,174 43,919 160,258 45,915 49,908 51,904 147,727 54,569 57,224 59,889 171,682
Notes:
* Individual year targets are for planning purposes only.
8 Section 8. EXCESS PROCUREMENT RULES
A. The following rules for excess procurement shall apply for Compliance Period 4 and all subsequent Compliance Periods:
1. VMUS may apply excess procurement in one compliance period to a subsequent compliance period, subject to the following limitations:
(a) Electricity products that are classified as PCC2 or PCC3 may not be counted as excess procurement.
(b) Electricity products that exceed the maximum limit for PCC3, as specified in PUC § 399.16(c), must be subtracted from the calculation of excess procurement.
2. Excess procurement meeting these requirements may be applied to any future compliance period and shall not expire.
Section 9. DELAY OF TIMELY COMPLIANCE RULES
A. Delay of Timely Compliance Rule
Pursuant to PUC § 399.30(d)(2)(A), and consistent with Section 7 of the RPS Enforcement Program, the Victorville City Council may adopt measures permitting VMUS to delay timely compliance with the RPS procurement requirements. Victorville City Council adopts the following delay of timely compliance rules.
If any of the conditions listed below occurs and is beyond the control of VMUS and causes VMUS to not be reasonably able to comply with the RPS procurement requirements, VMUS may delay timely compliance with the RPS procurement requirements.
1. Transmission Constraints
There is inadequate transmission capacity to allow sufficient electricity to be delivered from eligible renewable energy resources, or proposed eligible renewable energy resource projects, to the extent applicable, using the current operational protocols of the BA in which the VMUS operates. If VMUS owns transmission or has transmission rights, then VMUS shall demonstrate that:
• VMUS undertook all reasonable measures under its control and consistent with its obligations under local, state, and federal laws and regulations to develop and construct new transmission lines or upgrades to existing lines intended to transmit electricity generated by eligible renewable energy resources, in light of its expectation for cost recovery.
9 • VMUS took all reasonable operational measures to maximize cost-effective purchases of electricity from eligible renewable energy resources in advance of transmission availability.
2. Permitting, Interconnection, or Other Circumstances
Permitting, interconnection, or other circumstance have delayed the procurement of eligible renewable energy resource projects, or there is an insufficient supply of eligible renewable energy resources available to VMUS . To utilize this condition, VMUS must show that the permitting, interconnection, or other circumstance caused the delay or insufficient supply and that:
• VMUS prudently managed portfolio risks, including, but not limited to, holding solicitations for RPS -eligible resources with outreach to market participants and relying on a sufficient number of viable projects to achieve RPS procurement requirements.
• VMUS sought to develop either its own eligible renewable energy resources, transmission to interconnect to eligible renewable energy resources, or energy storage used to integrate eligible renewable energy resources.
• If the cause for delay or insufficient supply was foreseeable, VMUS procured an appropriate minimum margin of procurement above the level necessary to comply with the RPS to compensate for foreseeable delays or insufficient supply.
• VMUS took reasonable measures to procure cost-effective distributed generation and allowable unbundled RECs.
3. Unanticipated Curtailment
Unanticipated curtailment of eligible renewable energy resources, if the delay of timely compliance would not result in an increase in greenhouse gas emissions.
4. Transportation Electrification
Unanticipated increase in retail sales due to transportation electrification. To utilize this condition, VMUS must consider whether transportation electrification significantly exceeded forecasts in VMUS' service territory based on the best and most recently available information available to VMUS. Further, VMUS must take reasonable measures to procure sufficient resources to account for unanticipated increases in retail sales due to transportation electrification.
Section 10. COST LIMITATION
A. Cost Limitation Rule
Pursuant to PUC § 399.30(d)(2)(B), and consistent with Section 9 of the RPS Enforcement Program, the VMUS shall establish a cost limitation on the procurement expenditures for all
10 eligible renewable energy resources used to comply with the RPS and Victorville City Council shall set this limitation at a level that prevents disproportionate rate impacts to VMUS’ ratepayers.
If the cost limitation is insufficient to support the projected costs of meeting VMUS’ RPS targets, as specified above, VMUS may refrain from executing any further contracts for eligible renewable energy resources, beyond what can be procured within the cost limitation.
B. Relevant Factors and Findings
To determine what cost limitation is necessary to prevent disproportionate rate impacts, the Victorville City Council has considered the following factors and made the following findings:
1. Economic Conditions
The City of Victorville faces persistently high levels of poverty. In 2023 , Victorville’s poverty rate (averaged over the prior 5 years) was 19.5%,
1 which is significantly higher than the statewide
average of 1 2%. 2 Further, for February 2024, Victorville’s unemployment rate was 5.3% % compared to a statewide average of 8.1 %.3 Many residents travel long distances to their place of employment. VMUS was established to attract and retain businesses to provide employment opportunities. In addition, p roperty tax receipts fund essential City services, and VMUS provides electric service to several of the Cities largest property taxpayers. VMUS’ customers saw a significant impact from the COVID -19 pandemic, including the rising cost of inflation. Maintaining competitive electric rates is essential to keeping local businesse s from relocating or shutting down.
Finding: The Victorville City Council finds that VMUS’ cost limitation must be structured and set at a level that strengthens the local economy and reduces the unemployment rate.
2. Customer Make-up
While VMUS serves a diverse group of customer types, the vast majority of VMUS’ total load is associated with just a few large customers. Three of VMUS ’ customers consume 78% of retail sales. To the extent that any one of these customers ceases to operate or relocates , VMUS’ remaining customers would bear the costs of any stranded investments. Shifting these costs to other customers could have cascading consequences by threatening the viability of other customers and further exacerbating the high unemployme nt rates in the City. In addition, 13% of VMUS’ retail sales have contractual rate limitations. Considering these factors, VMUS’ customers could be disproportionately harmed by rate increases.
Finding: The Victorville City Council finds that VMUS’ cost limitation must be designed so that it does not overly burden any one-customer class.
3. Improving the Financial Condition of VMUS
1 American Community Survey (2023).
2 Id.
3 Victorville Daily Press April 15, 2024
11 Through June 30, 2023, VMUS’ cumulative electric operating deficit was $ 14.8 million. These losses were funded primarily through transfers and loans from the City’s General Fund. VMUS incurred significant start-up costs, including payment of exit fees to Southern California Edison and outstanding indebtedness associated with the unanticipated failure of the Foxborough Cogeneration Facility. Significant capital expenditures are also required by VMUS to improve electric service reliability and expand capacity to serve new businesses.
Finding: The Victorville City Council finds that VMUS’ cost limitation should be set at a level that does not threaten the long-term financial stability of VMUS by reducing its existing customer base and that VMUS’ cost limitation is also set at a level that allows VMUS to reduce its negative Net Fund Position.
C. Cost of Full Compliance
In order to estimate the cost of full compliance for Compliance Period 4, VMUS relies on the cost data reported in the 2024 Padilla Report, Costs and Cost Savings for the RPS Program, published May 2024 (“Padilla Report”). 3 The Padilla Report includes aggregated cost information for the CPUC-jurisdictional entities. Based on the Padilla Report, VMUS assumes that the cost of a PCC1 electricity product is $4 3/MWh in 2021, $62/MWh in 2022, and $58/MWh in both 2023 and 2024. Further, based on the Padilla Report, VMUS assumes that the cost of a PCC3 electricity product is $12/MWh 4 for 2021-2022 and $10 for 2023-2024. Based on the relative complexity and reduced availability associated with PCC2 electricity products, VMUS assumes that full compliance would be based on maximizing PCC3 procurement (10%) and filling in the remaining 90% with PCC1 procurement. The following table shows the forecasted cost of full compliance based on these assumptions.
PCC Formula for Determining Cost Compliance Cost
2021 PCC1 90% x 35,634 RECs x $43/REC = $1,379,036
PCC3 10% x 35,634 RECs x $12/REC = $42,761
2022 PCC1 90% x 39,531 RECs x $62/REC = $2,205,830
PCC3 10% x 39,531 RECs x $12/REC = $47,437
2023 PCC1 90% x 41,174 RECs x $58/REC = $2,149,283
PCC3 10% x 41,174 RECs x $10/REC = $41,174
2024 PCC1 90% x 43,919 RECs x $58/REC = $2,292,572
3 Available at: https://www.cpuc.ca.gov/-/media/cpuc-website/industries-and- topics/documents/energy/rps/2024/2024-padilla-reportvfinal.pdf. 4 For PCC3 Electricity Products, Cerritos utilized the contract price data for Bear Valley Electric Service, which procures through REC-only contracts that approximate PCC3 transactions.
12 PCC3 10% x 43,919 RECs x $10/REC = $43,919
Total
= $8.202,012
Therefore, the estimated cost of full compliance with the RPS Procurement Requirements is $8,202,012.
D. Expenditures that Will Count Toward the VMUS’ Cost Limitation
To determine if VMUS’ expenditures have met or exceeded the cost limitation established in this RPS Procurement Plan, VMUS will include a ll direct costs associated with procurement from executed contracts and owned resources. Where applicable, this will include the contract price multiplied by electricity products delivered during the Compliance Period. For any contract where the associated electricity is resold, VMUS will still count towards its Cost Limitation the total cost of the combined electricity and REC.
The following table provides actual and forecast data for VMUS’ procurement expenditures to date in Compliance Period 4.
2021 2022 2023 2024 Forecast
Gaskell West 2b $0 $0 $630,221 $675,100
Alta Mesa Wind Repower $0 $0 $0 $0
Total Expenses $0 $0 $630,221 $675,100
E. Explanation of How VMUS Developed a Cost Limitation Methodology and How Such Cost Limitation Prevents Disproportionate Rate Impacts.
In developing its Cost Limitation methodology, VMUS has reviewed the potential impacts of the factors, findings, and considerations described above. Specifically, VMUS has evaluated what would occur if VMUS expended the amount of the full cost of compliance and estimated the impacts to customers on a rate basis and total bill basis under different scenarios.
Thirteen percent of VMUS’ sales to its retail customers have contractual rate limitations. Potential rate increases for the purpose of RPS compliance would be applicable to the remaining eighty- seven percent of sales to customers. The estimated cost of full compliance with the Compliance Period 4 RPS Procurement Requirements would have required a twelve percent (12%) increase in rates.
13 VMUS staff have determined that setting the Cost Limitation using the methodology described below is necessary to prevent an unfair burden and disproportionate rate impact for applicable VMUS customers.
F. Adoption of Methodology for Calculating Cost Limitation for Compliance Period.
To avoid disproportionate rate impacts for Compliance Period 4, the VMUS’ cost limitation shall be set at a level that allows VMUS to meets its long -term goal of reducing its negative Net Fund Position, while still offering competitive rates to support the economic health of its community (Cost Limitation Guideline). VMUS shall not be obligated to expend funds on RPS procurement greater than the Cost Limitation Guideline or RPS procurement targets. The Victorville City Council will be asked to approve cost -effective contracts for eligible renewable resources on a least cost, best fit basis that would not be expected to increase the negative Net Fund Position.
Procurement considerations will include availability of resources, financial feasibility, transmission availability and any other relevant factors to ensure procurement contracts fit the VMUS' risk profile as a small publicly owned utility.
G. Adoption of Cost Limitation for Compliance Period 4
It was expected that the RE Gaskell West 2 LLC PPA contract price would be less than alternative market prices and VMUS purchased all its available generation. Pursuant to the methodology for calculating the cost limitation for Compliance Period 4, established above, the cost limitation for Compliance Period 4 is determined to be $1,305,000.
SECTION 11. DELAYED RENEWABLE ENERGY PROCUREMENT
On June 9, 2020, VMUS signed a 25-year PPA with AM Wind Repower LLC for the procurement of eleven megawatts of renewable energy from the Alta Mesa RP27 Wind Energy Center located in Riverside County. The scheduled COD was January 1, 2022. The renewable energy from Alta Mesa was forecasted to meet 88% of VMUS’ PCC 1 and PCC 2 RPS for Compliance Period 4.
COVID-19 pandemic related issues delayed the timely receipt of required permits, significantly increased material availability and costs, and unforeseen interconnection related issues put the project’s viability at risk. The Buyers took all reasonable operational measures to work with the permitting agency and interconnection owner to address the issues. During this period, the project Developer still anticipated that the project would reach COD, which would have enabled VMUS to meet its PCC1 and PCC2 RPS for Compliance Period 4. VMUS was continually informed of revised multiple delays which made it challenging to plan the procurement of eligible renewable certificates (RECs). The current forecast COD is January 1, 2025.
VMUS took all reasonable measures to meet the short -term and long- term RPS procurement requirements for Compliance Period 4 (2021-2024). VMUS entered into renewable energy power
14 purchase agreements to meet 143% of the forecast RPS procurement requirements for Compliance Period 4 (2021-2024). The continual revised delay in achieving COD for its largest renewable energy power purchase agreement made it challenging to procure eligible short -term and long- term REC s. Because of VMUS’ limited customer load requirements, the size of available renewable energy projects and long- lead times to participate in these projects, it was not feasible to contract for additional projects to protect against project delay or failure, and VMUS could not have met the long-term RPS procurement requirements for Compliance Period 4 (2021-2024). Compliance Period 4 is an exception and the continual delay in achieving COD was outside VMUS’ control. Once VMUS’ largest renewable energy power purchase agreement achieves COD, VMUS will c omply with future short -term and long- term RPS procurement requirements.
Based on these circumstances, VMUS anticipates utilizing its delay of timely compliance rules for Compliance Period 4, supported by the following findings:
1. Prudently Managed Portfolio: VMUS prudently procured a reasonable margin above its RPS procurement obligations by 43%, to protect against project delay or under-delivery. Because of VMUS’ limited customer load requirements, the size of available renewable energy projects and long-lead times to participate in these projects, it was not feasible to contract for additional projects to protect against project delay or failure.
2. VMUS Projects: VMUS has contracted for a project incorporating energy storage.
3. Minimum Margin of Overprocurement (MMoP): VMUS utilized a MMoP of 43% , however, because of VMUS’ limited customer load requirements, the size of available renewable energy projects and long-lead times to participate in these projects, it was not able to spread this margin over a number of projects.
Item Number: 19
City Council / Board of Directors
Written Communications
Meeting of: November 19, 2024
Submitted By:
Brenda Hampton, Director of Electric Utility Services
Subject:
Approval of a North American Energy Standards Board Base Contract and Special Provisions (“NAESB”) for the Sale and Purchase of Natural Gas with BP Energy Company Recommendation:
Staff recommends the Honorable City Council:
(1) Approve the North American Energy Standards Board Base Contract and Special Provisions (“NAESB”) with BP Energy Company for natural gas supply and related services and authorize the City Manager to execute the agreement; (2) Allow the City Manager and/or his/her designee to execute transaction confirmations under the NAESB contracts for procurement of firm gas supply not to exceed $3.65 million total estimated cost and for terms not to exceed 24 months; Fiscal Impact:
This purchase will have a fiscal impact of approximately $1,095,000 over the next 12 months (600 Dth/day x 365 days x $5.00/Dth). This amount includes the estimated gas supply required to serve the gas customers at the Southern California Logistics Airport along with scheduling services and imbalance management for the gas supply and represents VMUS’s best estimate of gas requirements during a 12-month period under a high gas price scenario. No additional appropriations will be required as the funds have been budgeted for during Fiscal Year 2024-2025 for purchased gas.
Account Amount
4190210-53020
(Purchased Gas)
$1,095,000
Strategic Plan Goal:
This item supports the City’s Strategic Plan, Goal A, Fiscal Sustainability. Execution of this contract will enable VMUS to procure firm natural gas supply delivered from the Kern River Gas Transmission system (“Kern River”) at competitive market prices thereby 3 8
7 1
reducing total delivered cost of gas for Victorville Municipal Utility Services (“VMUS”) customers.
Background:
VMUS has received bundled natural gas service from SWG for decades. The cost of SWG service has continually increased to the point where bypassing SWG in favor of interconnecting with the nearby Kern River system was economically justified.
On February 7th, 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. The construction of this infrastructure provided 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.
On July 16th, 2024, the Victorville City Council approved 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. Construction and commissioning of the new Kern River interconnection was completed in September 2024.
Kern River transports approximately 1.8 billion cubic feet of gas per day from gas production basins in the Rocky Mountains to end-user customers in Utah, Nevada, and California. VMUS’s current gas supply needs are small in comparison, less than 1,000 cubic feet per day.
Most of the natural gas purchased and sold in the U.S. and on the Kern River system is transacted under NAESB contracts, which are largely based on the Uniform Commercial Code (UCC). The NAESB is a standard contract designed for transactional efficiency. A NAESB “Contract” consists of several related documents:
1. NAESB Base Contract. The NAESB Base Contract identifies the parties, selected options where options are provided in the General Terms and Conditions, and the non-price/non-volume aspects of the parties agreement;
2. General Terms and Conditions (“GT&Cs"). These are attached to the NAESB Base Contract and are largely based on UCC law;
3. Special Provisions. Special Provisions are negotiated modifications of and additions to the General Terms and Conditions to reflect the business needs of the parties. Special Provisions can include terms such as credit support, added representations and warranties, and alternative dispute resolution;
4. Transaction Confirmation(s) (1-2 pages). Transaction Confirmations (TCs) contain the price, volume, term, and delivery point terms of the agreement. 3 8
7 1
A NAESB Contract consisting solely of the NAESB Base Contract, General Terms and Conditions and Special Provisions is valid and executory indefinitely unless terminated by one or both parties with 30-days prior notice. It is the execution of one or more TCs that activates that NAESB Contract and the parties’ obligations to physically deliver and receive gas at the specified volume, delivery point and pricing. Termination of a NAESB Contract only becomes effective upon completion of the parties’ performances under any executory TCs.
Discussion:
A NAESB contract is required to allow VMUS to procure gas supply from a reputable and creditworthy marketer for delivery into the Kern River capacity for ultimate delivery into the VMUS distribution system. The City issued a Request for Proposal (RFP) on August 22, 2024. Two potential gas suppliers were short-listed. The NAESB contract that is presented is with BP Energy Company, one of the world’s largest and long-standing international oil and gas companies.
The Special Provisions of the NAESB were negotiated by the VMUS commercial team, with review and advice from the City attorney and an outside consultant and attorney with in-depth expertise in the natural gas industry.
Due to its relatively small gas demand, VMUS will only take gas supply from one supplier at any given time. This will be accomplished by executing one or more TCs with one of the suppliers where an NAESB contract has been established. Execution of the NAESB contracts does not preclude the City from executing additional NAESB contracts with other qualified suppliers.
Execution of this Agreement and authorizing the City Manager or his/her designee to execute subsequent transaction confirmations will allow VMUS to efficiently and reliably manage gas supply to VMUS customers.
Staff remains available to answer any questions the City Council may have.
Attachments: A. Base Contract and Special Provisions for Sale and Purchase of Natural Gas with General Terms and Conditions
Attachment A
Base Contract and Special Provisions for Sale and Purchase of Natural Gas with General Terms and Conditions
Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 1 of 13 September 5, 2006
Base Contract for Sale and Purchase of Natural Gas
This Base Contract is entered into as of the following date: November 1, 2024 The parties to this Base Contract are the following:
PARTY A
City of Victorville
PARTY NAME PARTY B
BP Energy Company
14343 Civic Drive, Victorville, CA 92392 ADDRESS
201 Helios Way
Houston, TX 77079
Victorville, CA (victorvilleca.gov) BUSINESS WEBSITE www.bp.com
CONTRACT NUMBER
09-324-0653 D-U-N-S® NUMBER 62-527-5755
US FEDERAL: 95-2235918
OTHER:
TAX ID NUMBERS US FEDERAL: 36-3421804
OTHER:
California JURISDICTION OF
ORGANIZATION Delaware
Corporation LLC
Limited Partnership Partnership
LLP Other: Municipal Corporation
COMPANY TYPE
Corporation LLC
Limited Partnership Partnership
LLP Other:
GUARANTOR
(IF APPLICABLE)
CONTACT INFORMATION
ATTN: Victorville Municipal Utility Services
TEL#: 760-243-6340 FAX#: 760-269-0039
EMAIL: [email protected]
COMMERCIAL
ATTN:
TEL#: 281-366-2000 FAX#:
EMAIL:
ATTN: Victorville Municipal Utility Services
TEL#: 760-243-6340 FAX#: 760-269-0039
EMAIL: [email protected]
SCHEDULING
ATTN: Gas Scheduling
TEL#: 281-366-2000 FAX#:
EMAIL:
ATTN: Victorville Municipal Utility Services
TEL#: 760-243-6340 FAX#: 760-269-0039
EMAIL: [email protected]
CONTRACT AND
LEGAL NOTICES
201 Helios Way, Houston, TX 77079
ATTN: Contract Services
TEL#: 281-366-2000 FAX#:
EMAIL: [email protected]
ATTN: Victorville Municipal Utility Services
TEL#: 760-243-6340 FAX#: 760-269-0039
EMAIL: [email protected]
CREDIT
201 Helios Way, Houston, TX 77079
ATTN: Credit Services
TEL#: 281-366-2000 FAX#: 713- 354-0996
EMAIL: [email protected]
ATTN: Victorville Municipal Utility Services
TEL#: 760-243-6340 FAX#: 760-269-0039
EMAIL: [email protected]
TRANSACTION
CONFIRMATIONS
201 Helios Way, Houston, TX 77079
ATTN: Confirmations Dept.
TEL#: 281-366-2000 FAX#:
EMAIL: [email protected]
ACCOUNTING INFORMATION
ATTN: Accounts Payable
TEL#: 760-243-1956 FAX#:
EMAIL: [email protected]
INVOICES
PAYMENTS
SETTLEMENTS
201 Helios Way, Houston, TX 77079
ATTN: Gas Accounting
TEL#: FAX#:
EMAIL: [email protected]
BANK: Wells Fargo Bank
ABA: 121000248 ACCT: 9940075261
OTHER DETAILS:
WIRE TRANSFER
NUMBERS
(IF APPLICABLE)
BANK: JP Morgan Chase Bank, New York, NY
ABA: 021000021 ACCT: 910-2-548097
OTHER DETAILS: For the Account of BP Energy
BANK: Wells Fargo Bank
ABA: 121042882 ACCT: 9940075261
OTHER DETAILS:
ACH NUMBERS
(IF APPLICABLE)
BANK: JP Morgan Chase Bank, New York, NY
ABA: 021000021 ACCT: 910-2-548097
OTHER DETAILS: For the Account of BP Energy Company
ATTN: Accounts Receivable
ADDRESS: 14343 Civic Drive, PO Box 5001
Victorville, CA 92393-5001
CHECKS
(IF APPLICABLE)
ATTN: BP Energy Company
ADDRESS: P.O. Box 736504
Dallas, TX 75373-6504
Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 2 of 13 September 5, 2006
Base Contract for Sale and Purchase of Natural Gas
(Continued)
This Base Contract incorporates by reference for all purposes the General Terms and Conditions for Sale and Purchase of Natural Gas published by the North American Energy Standards Board. The parties hereby agree to the following provisions offered in said General Terms and Conditions. In the event the parties fail to check a box, the specified default provision shall apply. Select the appropriate box(es) from each section:
Section 1.2
Transaction
Procedure
Oral (default)
OR
Written
Section 10.2
Additional
Events of
Default
No Additional Events of Default (default)
Indebtedness Cross Default
Party A: ____________________
Party B: ____________________
Transactional Cross Default
S pecified Transactions:
Section 2.7
Confirm
Deadline
2 Business Days after receipt (default)
OR
5 Business Days after receipt
Section 2.8
Confirming
Party
Seller (default)
OR
Buyer
OR
Other: BP Energy Company
Section 3.2
Performance
Obligation
Cover Standard (default)
OR
Spot Price Standard
Section 10.3.1
Early
Termination
Damages
Early Termination Damages Apply (default)
OR
Early Termination Damages Do Not Apply
Note: The following Spot Price Publication applies to both of the immediately preceding.
Section 10.3.2
Other
Agreement
Setoffs
Other Agreement Setoffs Apply (default)
Bilateral (default)
Triangular
OR
Other Agreement Setoffs Do Not Apply
Section 2.31
Spot Price
Publication
Gas Daily Midpoint (default)
OR
Section 6
Taxes
Buyer Pays At and After Delivery Point (default) OR
Seller Pays Before and At Delivery Point
Section 7.2
Payment
Date
25th Day of Month following Month of delivery (default) OR
Day of Month following Month of delivery
Section 15.5
Choice Of Law California
Section 7.2
Method of
Payment
Wire transfer (default)
Automated Clearinghouse Credit (ACH)
Check Section 15.10
Confidentiality
Confidentiality applies (default)
OR
Confidentiality does not apply
Section 7.7
Netting
Netting applies (default)
OR
Netting does not apply
Special Provisions: Number of sheets attached: __7____
Addendum(s): _______________________________
IN WITNESS WHEREOF, the parties hereto have executed this Base Contract in duplicate.
CITY OF VICTORVILLE PARTY NAME BP ENERGY COMPANY
By:
SIGNATURE
By:
PRINTED NAME
TITLE
Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A Michael Porter
Attorney in Fact
Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 3 of 13 September 5, 2006
General Terms and Conditions
Base Contract for Sale and Purchase of Natural Gas
SECTION 1. PURPOSE AND PROCEDURES
1.1. These General Terms and Conditions are intended to facilitate purchase and sale transactions of Gas on a Firm or Interruptible basis. "Buyer" refers to the party receiving Gas and "Seller" refers to the party delivering Gas. The entire agreement between the parties shall be the Contract as defined in Section 2.9.
The parties have selected either the “Oral Transaction Procedure” or the “Written Transaction Procedure” as indicated on the Base Contract.
Oral Transaction Procedure:
1.2. The parties will use the following Transaction Confirmation procedure. Any Gas purchase and sale transaction may be effectuated in an EDI transmission or telephone conversation with the offer and acceptance constituting the agreement of t he parties. The parties shall be legally bound from the time they so agree to transaction terms and may each rely thereon. Any such transaction shall be considered a “writing” and to have been “signed”. Notwithstanding the foregoing sentence, the parties agree that Confirming Party shall, a nd the other party may, confirm a telephonic transaction by sending the other party a Transaction Confirmation by facsimile, EDI or mutually agreeable electronic means within three Business Days of a transaction covered by this Section 1.2 (Oral Transaction Procedure) provided that the failure to send a Transaction Confirmation shall not invalidate the oral agreement of the parties. Confirming Party adopts its confirming letterhead, or the like, as its signature on any Trans action Confirmation as the identification and authentication of Confirming Party. If the Transaction Confirmation contains any provisions other than those relating to the commercial terms of the transaction (i.e., price, quantity, performance obligation, delivery point, period of delivery and/or transportation conditions), which modify or supplement the Base Contract or General Terms and Conditions of this Contract (e.g., arbitration or additional representations and warranties), such provisions shall not be deemed to be accepted pursuan t to Section 1.3 but must be expressly agreed to by both parties; provided that the foregoing shall not invalidate any transaction agreed to by the parties.
Written Transaction Procedure:
1.2. The parties will use the following Transaction Confirmation procedure. Should the parties come to an agreement regarding a Gas purchase and sale transaction for a particular Delivery Period, the Confirming Party shall, and the other party may, record that agreement on a Transaction Confirmation and communicate such Transaction Confirmation by facsimile, EDI or mutually agreeable electronic means, to the other party by the close of the Business Day following the date of agreement. The parties acknowledge that their agreement will not be binding until the exchange of nonconflicting Transaction Confirmations or the passage of the Confirm Deadline without objection from the receiving party, as provided in Section 1.3.
1.3. If a sending party's Transaction Confirmation is materially different from the receiving party's understanding of the agreement referred to in Section 1.2, such receiving party shall notify the sending party via facsimile, EDI or mutually agreeable electronic means by the Confirm Deadline, unless such receiving party has previously sent a Transaction Confirmation to the sending party. The failure of the receiving party to so notify the sending party in writing by the Confirm Deadline constitutes the receiving party's agreement to the terms of the transaction described in the sending party's Transaction Confirmation. If there are any material differences between timely sent Transaction Confirmations governing the same transaction, then neither Transaction Confirmation shall be binding until or unless such differences are resolved including the use of any evidence that clearly resolves the differences in the Transaction Confirmations. In the event of a conflict among the terms of (i) a binding Transaction Confirmation pursuant to Section 1.2, (ii) the oral agreement of the parties which may be evidenced by a recorded conversation, where the parties have selected the Oral Transaction Procedure of the Base Contract, (iii) the Base Contract, and (iv) these General Terms and Conditions, the terms of the documents shall govern in the priority listed in this sentence.
1.4. The parties agree that each party may electronically record all telephone conversations with respect to this Contract between their respective employees, without any special or further notice to the other party. Each party shall obtain any necessary consent of its agents and employees to such recording. Where the parties have selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, the parties agree not to contest the validity or enforceability of telephonic recordings entered into in accordance with the requirements of this Base Contract.
SECTION 2. DEFINITIONS
The terms set forth below shall have the meaning ascribed to them below. Other terms are also defined elsewhere in the Contr act and shall have the meanings ascribed to them herein.
2.1. “Additional Event of Default” shall mean Transactional Cross Default or Indebtedness Cross Default, each as and if selected by the parties pursuant to the Base Contract.
2.2. “Affiliate” shall mean, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, “control” of any entity or person means ownership of at least 50 percent of the voting power of the entity or person.
Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
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2.3. “Alternative Damages” shall mean such damages, expressed in dollars or dollars per MMBtu, as the parties shall agree upon in the Transaction Confirmation, in the event either Seller or Buyer fails to perform a Firm obligation to deliver Gas in the case of Seller or to receive Gas in the case of Buyer.
2.4. "Base Contract" shall mean a contract executed by the parties that incorporates these General Terms and Conditions by reference; that specifies the agreed selections of provisions contained herein; and that sets forth other information required herein and any Special Provisions and addendum(s) as identified on page one.
2.5. "British thermal unit" or "Btu" shall mean the International BTU, which is also called the Btu (IT).
2.6. "Business Day(s)" shall mean Monday through Friday, excluding Federal Banking Holidays for transactions in the U.S.
2.7. "Confirm Deadline" shall mean 5:00 p.m. in the receiving party's time zone on the second Business Day following the Day a Transaction Confirmation is received or, if applicable, on the Business Day agreed to by the parties in the Base Contract; provided, if the Transaction Confirmation is time stamped after 5:00 p.m. in the receiving party's time zone, it shall be deemed received at the opening of the next Business Day.
2.8. "Confirming Party" shall mean the party designated in the Base Contract to prepare and forward Transaction Confirmations to the other party.
2.9. "Contract" shall mean the legally -binding relationship established by (i) the Base Contract, (ii) any and all binding Transaction Confirmations and (iii) where the parties have selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, any and all transactions that the parties have entered into through an EDI transmission or by telephone, but that have not been confirmed in a binding Transaction Confirmation, all of which shall form a single integrated agreement between the parties.
2.10. "Contract Price" shall mean the amount expressed in U.S. Dollars per MMBtu to be paid by Buyer to Seller for the purchase of Gas as agreed to by the parties in a transaction.
2.11. "Contract Quantity" shall mean the quantity of Gas to be delivered and taken as agreed to by the parties in a transaction.
2.12. "Cover Standard", as referred to in Section 3.2, shall mean that if there is an unexcused failure to take or deliver any quantity of Gas pursuant to this Contract, then the performing party shall use commercially reasonable efforts to (i) if Buyer is the performing party, obtain Gas, (or an alternate fuel if elected by Buyer and replacement Gas is not available), or (ii) if Sell er is the performing party, sell Gas, in either case, at a price reasonable for the delivery or production area, as applicable, consistent with:
the amount of notice provided by the nonperforming party; the immediacy of the Buyer's Gas consumption needs or Seller's Gas sales requirements, as applicable; the quantities involved; and the anticipated length of failure by the nonperforming party.
2.13. "Credit Support Obligation(s)” shall mean any obligation(s) to provide or establish credit support for, or on behalf of, a party to this Contract such as cash, an irrevocable standby letter of credit, a margin agreement, a prepayment, a security interest in an asset, guaranty, or other good and sufficient security of a continuing nature.
2.14. "Day" shall mean a period of 24 consecutive hours, coextensive with a "day" as defined by the Receiving Transporter in a particular transaction.
2.15. "Delivery Period" shall be the period during which deliveries are to be made as agreed to by the parties in a transaction.
2.16. "Delivery Point(s)" shall mean such point(s) as are agreed to by the parties in a transaction.
2.17. "EDI" shall mean an electronic data interchange pursuant to an agreement entered into by the parties, specifically relating to the communication of Transaction Confirmations under this Contract.
2.18. "EFP" shall mean the purchase, sale or exchange of natural Gas as the "physical" side of an exchange for physical transaction involving gas futures contracts. EFP shall incorporate the meaning and remedies of "Firm", provided that a party’s excuse for nonperformance of its obligations to deliver or receive Gas will be governed by the rules of the relevant futures exchange regulated under the Commodity Exchange Act.
2.19. "Firm" shall mean that either party may interrupt its performance without liability only to the extent that such performance is prevented for reasons of Force Majeure; provided, however, that during Force Majeure interruptions, the party invoking For ce Majeure may be responsible for any Imbalance Charges as set forth in Section 4.3 related to its interruption after the nomination is made to the Transporter and until the change in deliveries and/or receipts is confirmed by the Transporter.
2.20. "Gas" shall mean any mixture of hydrocarbons and noncombustible gases in a gaseous state consisting primarily of methane.
2.21. “Guarantor” shall mean any entity that has provided a guaranty of the obligations of a party hereunder.
2.22. "Imbalance Charges" shall mean any fees, penalties, costs or charges (in cash or in kind) assessed by a Transporter for failure to satisfy the Transporter's balance and/or nomination requirements.
2.23. “Indebtedness Cross Default” shall mean if selected on the Base Contract by the parties with respect to a party, that it or its Guarantor, if any, experiences a default, or similar condition or event however therein defined, under one or more agreements or instruments, individually or collectively, relating to indebtedness (such indebtedness to include any obligation whether present or future, contingent or otherwise, as principal or surety or otherwise) for the payment or repayment of borrowed money in an aggregate amount greater than the threshold specified in the Base Contract with respect to such party or its Guarantor, if any, which results in such indebtedness becoming immediately due and payable.
Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
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2.24. "Interruptible" shall mean that either party may interrupt its performance at any time for any reason, whether or not caused by an event of Force Majeure, with no liability, except such interrupting party may be responsible for any Imbalance Charges as set forth in Section 4.3 related to its interruption after the nomination is made to the Transporter and until the change in deliveries and/or receipts is confirmed by Transporter.
2.25. "MMBtu" shall mean one million British thermal units, which is equivalent to one dekatherm.
2.26. "Month" shall mean the period beginning on the first Day of the calendar month and ending immediately prior to the commencement of the first Day of the next calendar month.
2.27. "Payment Date" shall mean a date, as indicated on the Base Contract, on or before which payment is due Seller for Gas received by Buyer in the previous Month.
2.28. "Receiving Transporter" shall mean the Transporter receiving Gas at a Delivery Point, or absent such receiving Transporter, the Transporter delivering Gas at a Delivery Point.
2.29. "Scheduled Gas" shall mean the quantity of Gas confirmed by Transporter(s) for movement, transportation or management.
2.30. “Specified Transaction(s)” shall mean any other transaction or agreement between the parties for the purchase, sale or exchange of physical Gas, and any other transaction or agreement identified as a Specified Transaction under the Base Contract.
2.31. "Spot Price " as referred to in Section 3.2 shall mean the price listed in the publication indicated on the Base Contract, under the listing applicable to the geographic location closest in proximity to the Delivery Point(s) for the relevant Day; provided, if there is no single price published for such location for such Day, but there is published a range of prices, then the Spot Pr ice shall be the average of such high and low prices. If no price or range of prices is published for such Day, then the Spot Price shall be the average of the following: (i) the price (determined as stated above) for the first Day for which a price or range of prices is published that next precedes the relevant Day; and (ii) the price (determined as stated above) for the first D ay for which a price or range of prices is published that next follows the relevant Day.
2.32. "Transaction Confirmation" shall mean a document, similar to the form of Exhibit A, setting forth the terms of a transaction formed pursuant to Section 1 for a particular Delivery Period.
2.33. “Transactional Cross Default” shall mean if selected on the Base Contract by the parties with respect to a party, that it shall be in default, however therein defined, under any Specified Transaction.
2.34. “Termination Option” shall mean the option of either party to terminate a transaction in the event that the other party fails to perform a Firm obligation to deliver Gas in the case of Seller or to receive Gas in the case of Buyer for a designated number of days during a period as specified on the applicable Transaction Confirmation.
2.35. "Transporter(s)" shall mean all Gas gathering or pipeline companies, or local distribution companies, acting in the capacity of a transporter, transporting Gas for Seller or Buyer upstream or downstream, respectively, of the Delivery Point pursuant to a particular transaction.
SECTION 3. PERFORMANCE OBLIGATION
3.1. Seller agrees to sell and deliver, and Buyer agrees to receive and purchase, the Contract Quantity for a particular transaction in accordance with the terms of the Contract. Sales and purchases will be on a Firm or Interruptible basis, as agreed to by the parties in a transaction.
The parties have selected either the “Cover Standard” or the “Spot Price Standard” as indicated on the Base Contract.
Cover Standard:
3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an am ount equal to the positive difference, if any, between the purchase price paid by Buyer utilizing the Cover Standard and the Contract Price, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually delivered by Seller for such Day(s) excluding any quantity for which no replacement is available; or (ii) in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in the amount equal to the positive difference, if any, between the Contract Price and the price received by Seller utilizing the Cover Standard for the resale of such Gas, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually taken by Buyer for such Day(s) excluding any quantity for which no sale is available; and (iii) in the event that Buyer has used commercially reasonable efforts to replace the Gas or Seller has used commercially reasonable efforts to sell the Gas to a third party, and no such replacement or sale is available for all or any portion of the Contract Quantity of Gas , then in addition to (i) or (ii) above, as applicable, the sole and exclusive remedy of the performing party with respect to the Gas not replaced or sold shall be an amount equal to any unfavorable difference between the Contract Price and the Spot Price, adjusted for such transportation to the applicable Delivery Point, multiplied by the quantity of such Gas not replaced or sold. Imbalance Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 4.3. The amount of such unfavorable difference shall be payable five Business Days after presentation of the performing party’s invoice, which shall set forth the basis upon which such amount was calculated.
Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 6 of 13 September 5, 2006
Spot Price Standard:
3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an amount equal to the difference between the Contract Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by subtracting the Contract Price from the Spot Price; or (ii) in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in an amount equal to the difference between the Contract Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by subtracting the applicable Spot Price from the Contract Price. Imbalance Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 4.3. The amount of such unfavorable difference shall be payable five Business Days after presentation of the performing party’s invoice, which shall set forth the basis upon which such amount was calculated.
3.3. Notwithstanding Section 3.2, the parties may agree to Alternative Damages in a Transaction Confirmation executed in writing by both parties.
3.4. In addition to Sections 3.2 and 3.3, the parties may provide for a Termination Option in a Transaction Confirmation executed in writing by both parties. The Transaction Confirmation containing the Termination Option will designate the lengt h of nonperformance triggering the Termination Option and the procedures for exercise thereof, how damages for nonperformance will be compensated, and how liquidation costs will be calculated.
SECTION 4. TRANSPORTATION, NOMINATIONS, AND IMBALANCES
4.1. Seller shall have the sole responsibility for transporting the Gas to the Delivery Point(s). Buyer shall have the sole responsibility for transporting the Gas from the Delivery Point(s).
4.2. The parties shall coordinate their nomination activities, giving sufficient time to meet the deadlines of the affected Transporter(s).
Each party shall give the other party timely prior Notice, sufficient to meet the requirements of all Transporter(s) involved in the transaction, of the quantities of Gas to be delivered and purchased each Day. Should either party become aware that actual deliveries at the Delivery Point(s) are greater or lesser than the Scheduled Gas, such party shall promptly notify the other party.
4.3. The parties shall use commercially reasonable efforts to avoid imposition of any Imbalance Charges. If Buyer or Seller receives an invoice from a Transporter that includes Imbalance Charges, the parties shall determine the validity as well as the cause of such Imbalance Charges. If the Imbalance Charges were incurred as a result of Buyer’s receipt of quantities of Gas greater than or less than the Scheduled Gas, then Buyer shall pay for such Imbalance Charges or reimburse Seller for such Imbalance Charges paid by Seller. If the Imbalance Charges were incurred as a result of Seller’s delivery of quantities of Gas greater than or less than the Scheduled Gas, then Seller shall pay for such Imbalance Charges or reimburse Buyer for such Imbalance Charges paid by Buyer.
SECTION 5. QUALITY AND MEASUREMENT
All Gas delivered by Seller shall meet the pressure, quality and heat content requirements of the Receiving Transporter. The unit of quantity measurement for purposes of this Contract shall be one MMBtu dry. Measurement of Gas quantities hereunder shall be in accordance with the established procedures of the Receiving Transporter.
SECTION 6. TAXES
The parties have selected either “Buyer Pays At and After Delivery Point” or “Seller Pays Before and At Delivery Point” as indicated on the Base Contract.
Buyer Pays At and After Delivery Point:
Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any government authority (“Taxes”) on or with respect to the Gas prior to the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas at the Delivery Point(s) and all Taxes after the Delivery Point(s). If a party is required to remit or pay Taxes that are the other party’s responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other party for such Taxes. Any party entitled to an exemption from any such Taxes or charges shall furnish the other party any necessary documentation thereof.
Seller Pays Before and At Delivery Point:
Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any government authority (“Taxes”) on or with respect to the Gas prior to the Delivery Point(s) and all Taxes at the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas after the Delivery Point(s). If a party is required to remit or pay Taxes that are the other party’s responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other party for such Taxes. Any party entitled to an exemption from any such Taxes or charges shall furnish the other party any necessary documentation thereof.
SECTION 7. BILLING, PAYMENT, AND AUDIT
7.1. Seller shall invoice Buyer for Gas delivered and received in the preceding Month and for any other applicable charges, providing supporting documentation acceptable in industry practice to support the amount charged. If the actual quantity delivered is not known by the billing date, billing will be prepared based on the quantity of Scheduled Gas. The invoiced quantity will then be adjusted to the actual quantity on the following Month's billing or as soon thereafter as actual delivery information is available.
Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
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7.2. Buyer shall remit the amount due under Section 7.1 in the manner specified in the Base Contract, in immediately available funds, on or before the later of the Payment Date or 10 Days after receipt of the invoice by Buyer; provided that if the Payment Date is not a Business Day, payment is due on the next Business Day following that date. In the event any payments are due Buyer hereunder, payment to Buyer shall be made in accordance with this Section 7.2.
7.3. In the event payments become due pursuant to Sections 3.2 or 3.3, the performing party may submit an invoice to the nonperforming party for an accelerated payment setting forth the basis upon which the invoiced amount was calculated. Payment from the nonperforming party will be due five Business Days after receipt of invoice.
7.4. If the invoiced party, in good faith, disputes the amount of any such invoice or any part thereof, such invoiced party will pay such amount as it concedes to be correct; provided, however, if the invoiced party disputes the amount due, it must provide supporting documentation acceptable in industry practice to support the amount paid or disputed without undue delay. In the event the parties are unable to resolve such dispute, either party may pursue any remedy available at law or in equity to enforce its rights pursuant to this Section.
7.5. If the invoiced party fails to remit the full amount payable when due, interest on the unpaid portion shall accrue from the date due until the date of payment at a rate equal to the lower of (i) the then-effective prime rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate.
7.6. A party shall have the right, at its own expense, upon reasonable Notice and at reasonable times, to examine and audit and to obtain copies of the relevant portion of the books, records, and telephone recordings of the other party only to the extent reasonably necessary to verify the accuracy of any statement, charge, payment, or computation made under the Contract. This right to examine, audit, and to obtain copies shall not be available with respect to proprietary information not directly relevant to transactions under this Contract. All invoices and billings shall be conclusively presumed final and accurate and all associated claims for under- or overpayments shall be deemed waived unless such invoices or billings are objected to in writing, with adequate explanation and/or documentation, within two years after the Month of Gas delivery. All retroactive adjustments under Section 7 shall be paid in full by the party owing payment within 30 Days of Notice and substantiation of such inaccuracy.
7.7. Unless the parties have elected on the Base Contract not to make this Section 7.7 applicable to this Contract, the parties shall net all undisputed amounts due and owing, and/or past due, arising under the Contract such that the party owing the greater amount shall make a single payment of the net amount to the other party in accordance with Section 7; provided that no payment required to be made pursuant to the terms of any Credit Support Obligation or pursuant to Section 7.3 shall be subject to netting under this Section. If the parties have executed a separate netting agreement, the terms and conditions therein shall prevail to the ex tent inconsistent herewith.
SECTION 8. TITLE, WARRANTY, AND INDEMNITY
8.1. Unless otherwise specifically agreed, title to the Gas shall pass from Seller to Buyer at the Delivery Point(s). Seller shall have responsibility for and assume any liability with respect to the Gas prior to its delivery to Buyer at the specified Delivery Point(s).
Buyer shall have responsibility for and assume any liability with respect to said Gas after its delivery to Buyer at the Delivery Point(s).
8.2. Seller warrants that it will have the right to convey and will transfer good and merchantable title to all Gas sold hereunder and delivered by it to Buyer, free and clear of all liens, encumbrances, and claims. EXCEPT AS PROVIDED IN THIS SECTION 8.2 AND IN SECTION 15.8, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE, ARE DISCLAIMED.
8.3. Seller agrees to indemnify Buyer and save it harmless from all losses, liabilities or claims including reasonable attorneys' fees and costs of court ("Claims"), from any and all persons, arising from or out of claims of title, personal injury (including death) or property damage from said Gas or other charges thereon which attach before title passes to Buyer. Buyer agrees to indemnify Seller and save it harmless from all Claims, from any and all persons, arising from or out of claims regarding payment, personal injury (including death) or property damage from said Gas or other charges thereon which attach after title passes to Buyer.
8.4. The parties agree that the delivery of and the transfer of title to all Gas under this Contract shall take place within the Customs Territory of the United States (as defined in general note 2 of the Harmonized Tariff Schedule of the United States 19 U.S.C. §1202, General Notes, page 3); provided, however, that in the event Seller took title to the Gas outside the Customs Territory of the United States, Seller represents and warrants that it is the importer of record for all Gas entered and delivered into the United States, and shall be responsible for entry and entry summary filings as well as the payment of duties, taxes and fees, if any, and all applicable record keeping requirements.
8.5. Notwithstanding the other provisions of this Section 8, as between Seller and Buyer, Seller will be liable for all Claims to the extent that such arise from the failure of Gas delivered by Seller to meet the quality requirements of Section 5.
SECTION 9. NOTICES
9.1. All Transaction Confirmations, invoices, payment instructions, and other communications made pursuant to the Base Contract ("Notices") shall be made to the addresses specified in writing by the respective parties from time to time.
9.2. All Notices required hereunder shall be in writing and may be sent by facsimile or mutually acceptable electronic means, a nationally recognized overnight courier service, first class mail or hand delivered.
9.3. Notice shall be given when received on a Business Day by the addressee. In the absence of proof of the actual receipt date, the following presumptions will apply. Notices sent by facsimile shall be deemed to have been received upon the sendin g party's receipt of its facsimile machine's confirmation of successful transmission. If the day on which such facsimile is received is not a Business Day or is after five p.m. on a Business Day, then such facsimile shall be deemed to have been received on the next Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
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following Business Day. Notice by overnight mail or courier shall be deemed to have been received on the next Business Day after it was sent or such earlier time as is confirmed by the receiving party. Notice via first class mail shall be considered del ivered five Business Days after mailing.
9.4. The party receiving a commercially acceptable Notice of change in payment instructions or other payment information shall not be obligated to implement such change until ten Business Days after receipt of such Notice.
SECTION 10. FINANCIAL RESPONSIBILITY
10.1. If either party (“X”) has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party (“Y”) (including, without limitation, the occurrence of a material change in the creditworthiness of Y or its Guarantor, if applicable), X may demand Adequate Assurance of Performance. “Adequate Assurance of Performance” shall mean sufficient security in the form, amount , for a term, and from an issuer, all as reasonably acceptable to X, including, but not limited to cash, a standby irrevocable letter of credit, a prepayment, a security interest in an asset or guaranty. Y hereby grants to X a continuing first priority security interest in, lien on, and right of setoff against all Adequate Assurance of Performance in the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the return by X to Y of such Adequate Assurance of Performance, the security interest and lien granted hereunder on that Adequate Assurance of Performanc e shall be released automatically and, to the extent possible, without any further action by either party.
10.2. In the event (each an "Event of Default") either party (the "Defaulting Party") or its Guarantor shall: (i) make an assignment or any general arrangement for the benefit of creditors; ( ii) file a petition or otherwise commence, authorize, or acquiesce in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; ( iii) otherwise become bankrupt or insolvent (however evidenced); ( iv) be unable to pay its debts as they fall due; ( v) have a receiver, provisional liquidator, conservator, custodian, trustee or other similar official appointed with respect to it or substantially all of its assets; (vi) fail to perform any obligation to the other party with respect to any Credit Support Obligations relating to the Contract; ( vii) fail to give Adequate Assurance of Performance under Section 10.1 within 48 hours but at least one Business Day of a written request by the other party; (viii) not have paid any amount due the other party hereunder on or before the second Business Day following written Notice that such payment is due; or ix) be the affected party with respect to any Additional Event of Default; then the other party (the "Non-Defaulting Party") shall have the right, at its sole election, to immediately withhold and/or suspend deliveries or payments upon Notice and/or to terminate and liquidate the transactions under the Contr act, in the manner provided in Section 10.3, in addition to any and all other remedies available hereunder.
10.3. If an Event of Default has occurred and is continuing, the Non-Defaulting Party shall have the right, by Notice to the Defaulting Party, to designate a Day, no earlier than the Day such Notice is given and no later than 20 Days after such Notice is given, as an early termination date (the “Early Termination Date”) for the liquidation and termination pursuant to Section 10.3.1 of all transactions under the Contract, each a “Terminated Transaction”. On the Early Termination Date, all transactions will termin ate, other than those transactions, if any, that may not be liquidated and terminated under applicable law (“Excluded Transactions ”), which Excluded Transactions must be liquidated and terminated as soon thereafter as is legally permissible, and upon termination shall be a Terminated Transaction and be valued consistent with Section 10.3.1 below. With respect to each Excluded Transaction, its actual termination date shall be the Early Termination Date for purposes of Section 10.3.1.
The parties have selected either “Early Termination Damages Apply” or “Early Termination Damages Do Not Apply” as indicated on the Base Contract.
Early Termination Damages Apply:
10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Gas delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including w ithout limitation any amounts owed under Section
3.2), for which payment has not yet been made by the party that owes such payment under this Contract and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non-Defaulting Party shall (x) liquidate and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the case; and (y) where appropriate, discount each amou nt then due under clause (x) above to present value in a commercially reasonable manner as of the Early Termination Date (to take account of the period between the date of liquidation and the date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions).
For purposes of this Section 10.3.1, “Contract Value” means the amount of Gas remaining to be delivered or purchased under a transaction multiplied by the Contract Price, and “Market Value” means the amount of Gas remaining to be delivered or purchased under a transaction multiplied by the market price for a similar transaction at the Delivery Point determined by the Non-Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non-Defaulting Party may consider, among other valuations, any or all of the settlement prices of NYMEX Gas futures contracts, quotations from leading dealers in energy swap contracts or physical gas trading markets, similar sales or purchases and any other bona fide third-party offers, all adjusted for the length of the term and differences in transportation costs. A party shall not be required to enter into a replacement transaction(s) in order to determine the Market Value. Any extension(s) of the term of a transaction to which parties are not bound as of the Early Termination Date (including but not limited to “evergreen provisions”) shall not be considered in determining Contract Values and Market Values. For the avoidance of doubt, any option pursuant to which one party has the right to exten d Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
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the term of a transaction shall be considered in determining Contract Values and Market Values. The rate of interest used in calculating net present value shall be determined by the Non-Defaulting Party in a commercially reasonable manner.
Early Termination Damages Do Not Apply:
10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, the amount owed (whether or not then due) by each party with respect to all Gas delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section
3.2), for which payment has not yet been made by the party that owes such payment under this Contract.
The parties have selected either “Other Agreement Setoffs Apply” or “Other Agreement Setoffs Do Not Apply” as indicated on the Base Contract.
Other Agreement Setoffs Apply:
Bilateral Setoff Option:
10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff any Net Settlement Amount against (i) any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract; and (ii) any amount(s) (including any excess cash margin or excess cash collateral) owed or held by the party that is entitled to the Net Settlement Amount under any other agreement or arrangement between the parties.
Triangular Setoff Option:
10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the “Net Settlement Amount”). At its sole option, and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff (i) any Net Settlement Amount against any margin or other collateral held by a party in connec tion with any Credit Support Obligation relating to the Contract; (ii) any Net Settlement Amount against any amount(s) (including any excess cash margin or excess cash collateral) owed by or to a party under any other agreement or arrangement between the parties; (iii) any Net Settlement Amount owed to the Non- Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Non-Defaulting Party or its Affiliates to the Defaulting Party under any other agreement or arrangement; (iv) any Net Settlement Amount owed to the Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Defaulting Party to the Non-Defaulting Party or its Affiliates under any other agreement or arrangement; and/or (v) any Net Settlement Amount owed to the Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Defaulting Party or its Affiliates to the Non-Defaulting Party under any other agreement or arrangement.
Other Agreement Setoffs Do Not Apply:
10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party may setoff any Net Settlement Amount against any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract.
10.3.3. If any obligation that is to be included in any netting, aggregation or setoff pursuant to Section 10.3.2 is unascertained, the Non-Defaulting Party may in good faith estimate that obligation and net, aggregate or setoff, as applicable, in respect of the estimate, subject to the Non-Defaulting Party accounting to the Defaulting Party when the obligation is ascertained. Any amount not then due which is included in any netting, aggregation or setoff pursuant to Section 10.3.2 shall be discounted to net present value in a commercially reasonable manner determined by the Non-Defaulting Party.
10.4. As soon as practicable after a liquidation, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the Net Settlement Amount, and whether the Net Settlement Amount is due to or due from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of the Net Settlement Amount, provided that failure to give such Notice shall not affect the validity or enforceability of the liquidation or give rise to any claim by the Defaulting Party against the Non-Defaulting Party. The Net Settlement Amount as well as any setoffs applied against such amount pursuant to Section 10.3.2, shall be paid by the close of business on the second Business Day following such Notice, which date shall not be earlier than the Early Termination Date. Interest on any unpaid portion of the Net Settlement Amount as adjusted by setoffs, shall accrue from the date due until the date of payment at a rate equal to the lower of (i) the then-effective prime rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate.
10.5. The parties agree that the transactions hereunder constitute a "forward contract" within the meaning of the United States Bankruptcy Code and that Buyer and Seller are each "forward contract merchants" within the meaning of the United States Bankruptcy Code.
10.6. The Non-Defaulting Party's remedies under this Section 10 are the sole and exclusive remedies of the Non-Defaulting Party with respect to the occurrence of any Early Termination Date. Each party reserves to itself all other rights, setoffs, counterclaims and other defenses that it is or may be entitled to arising from the Contract.
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10.7. With respect to this Section 10, if the parties have executed a separate netting agreement with close- out netting provisions, the terms and conditions therein shall prevail to the extent inconsistent herewith.
SECTION 11. FORCE MAJEURE
11.1. Except with regard to a party's obligation to make payment(s) due under Section 7, Section 10.4, and Imbalance Charges under Section 4, neither party shall be liable to the other for failure to perform a Firm obligation, to the extent such failure was caused by Force Majeure. The term "Force Majeure" as employed herein means any cause not reasonably within the control of the party claiming suspension, as further defined in Section 11.2.
11.2. Force Majeure shall include, but not be limited to, the following: (i) physical events such as acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings, such as hurricanes, which result in evacuation of the affected area, floods, washouts, explosions, breakage or accident or necessity of repairs to machinery or equipment or lines of pipe; (ii) weather related events affecting an entire geographic region, such as low temperatures which cause freezing or failure of wells or lines of pi pe; (iii) interruption and/or curtailment of Firm transportation and/or storage by Transporters; (iv) acts of others such as strikes, lockouts or other industrial disturbances, riots, sabotage, insurrections or wars , or acts of terror ; and (v) governmental actions such as necessity for compliance with any court order, law, statute, ordinance, regulation, or policy having the effect of law promul gated by a governmental authority having jurisdiction. Seller and Buyer shall make reasonable efforts to avoid the adverse impacts of a Force Majeure and to resolve the event or occurrence once it has occurred in order to resume performance.
11.3. Neither party shall be entitled to the benefit of the provisions of Force Majeure to the extent performance is affected by any or all of the following circumstances: (i) the curtailment of interruptible or secondary Firm transportation unless primary, in-path, Firm transportation is also curtailed; (ii) the party claiming excuse failed to remedy the condition and to resume the perfor mance of such covenants or obligations with reasonable dispatch; or (iii) economic hardship, to include, without limitation, Seller’s ability to sell Gas at a higher or more advantageous price than the Contract Price, Buyer’s ability to purchase Gas at a lower or more advantageous price than the Contract Price, or a regulatory agency disallowing, in whole or in part, the pass through of costs resulting from this Contract; (iv) the loss of Buyer’s market(s) or Buyer’s inability to use or resell Gas purchased hereunder, except, in either case, as provided in Section 11.2; or (v) the loss or failure of Seller’s gas supply or depletion of reserves, except, in either case, as provided in Section 11.2.
The party claiming Force Majeure shall not be excused from its responsibility for Imbalance Charges.
11.4. Notwithstanding anything to the contrary herein, the parties agree that the settlement of strikes, lockouts or other industrial disturbances shall be within the sole discretion of the party experiencing such disturbance.
11.5. The party whose performance is prevented by Force Majeure must provide Notice to the other party. Initial Notice may be given orally; however, written Notice with reasonably full particulars of the event or occurrence is required as soon as reasonably possible. Upon providing written Notice of Force Majeure to the other party, the affected party will be relieved of its obligation, from the onset of the Force Majeure event, to make or accept delivery of Gas, as applicable, to the extent and for the duration of Force Majeure, and neither party shall be deemed to have failed in such obligations to the other during such occurrence or event.
11.6. Notwithstanding Sections 11.2 and 11.3, the parties may agree to alternative Force Majeure provisions in a Transaction Confirmation executed in writing by both parties.
SECTION 12. TERM
This Contract may be terminated on 30 Day’s written Notice, but shall remain in effect until the expiration of the latest Delivery Period of any transaction(s). The rights of either party pursuant to Section 7.6, Section 10, Section 13, the obligations to make payment hereunder, and the obligation of either party to indemnify the other, pursuant hereto shall survive the termination of the Base Contract or any transaction.
SECTION 13. LIMITATIONS
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY. A PARTY’S LIABILITY
HEREUNDER SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, A PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY. SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS
EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR
CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICU LT OR IMPOSSIBLE TO DETERMINE, OR
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.
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SECTION 14. MARKET DISRUPTION
If a Market Disruption Event has occurred then the parties shall negotiate in good faith to agree on a replacement price for the Floating Price (or on a method for determining a replacement price for the Floating Price) for the affected Day, and if the parties have not so agreed on or before the second Business Day following the affected Day then the replacement price for the Floating Pr ice shall be determined within the next two following Business Days with each party obtaining, in good faith and from non- affiliated market participants in the relevant market, two quotes for prices of Gas for the affected Day of a similar quality and quanti ty in the geographical location closest in proximity to the Delivery Point and averaging the four quotes. If either par ty fails to provide two quotes then the average of the other party’s two quotes shall determine the replacement price for the Floating Price. "Floating Price" means the price or a factor of the price agreed to in the transaction as being based upon a specified index. "Market Disruption Event" means, with respect to an index specified for a transaction, any of the following events: (a) the failure of the index to announce or publish information necessary for determining the Floating Price; (b) the failure of trading to commence or the permanent discontinuation or material suspension of trading on the exchange or market acting as the index; (c) the temporary or permanent discontinuance or unavailability of the index; (d) the temporary or permanent closing of any exchange acting as the index; or (e) both parties agree that a material change in the formula for or the method of determining the Floating Price has occurred. For the purposes of the calculation of a replacement price for the Floating Price, all numb ers shall be rounded to three decimal places. If the fourth decimal number is five or greater, then the third decimal number shall be increased by one and if the fourth decimal number is less than five, then the third decimal number shall remain unchanged.
SECTION 15. MISCELLANEOUS
15.1. This Contract shall be binding upon and inure to the benefit of the successors, assigns, personal representatives, and heirs of the respective parties hereto, and the covenants, conditions, rights and obligations of this Contract shall run for the full term of this Contract.
No assignment of this Contract, in whole or in part, will be made without the prior written consent of the non-assigning party (and shall not relieve the assigning party from liability hereunder), which consent will not be unreasonably withheld or delayed; provided, either party may (i) transfer, sell, pledge, encumber, or assign this Contract or the accounts, revenues, or proceeds hereof in connection with any financing or other financial arrangements, or (ii) transfer its interest to any parent or Affiliate by assignment, merger or otherwise without the prior approval of the other party. Upon any such assignment, transfer and assumption, the transferor shall remain principally liable for and shall not be relieved of or discharged from any obligations hereunder.
15.2. If any provision in this Contract is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Contract.
15.3. No waiver of any breach of this Contract shall be held to be a waiver of any other or subsequent breach.
15.4. This Contract sets forth all understandings between the parties respecting each transaction subject hereto, and any prior contracts, understandings and representations, whether oral or written, relating to such transactions are merged into and superseded by this Contract and any effective transaction(s). This Contract may be amended only by a writing executed by both parties.
15.5. The interpretation and performance of this Contract shall be governed by the laws of the jurisdiction as indicated on the Base Contract, excluding, however, any conflict of laws rule which would apply the law of another jurisdiction.
15.6. This Contract and all provisions herein will be subject to all applicable and valid statutes, rules, orders and regulations of any governmental authority having jurisdiction over the parties, their facilities, or Gas supply, this Contract or transaction or any provisions thereof.
15.7. There is no third party beneficiary to this Contract.
15.8. Each party to this Contract represents and warrants that it has full and complete authority to enter into and perform this Contract.
Each person who executes this Contract on behalf of either party represents and warrants that it has full and complete authority to do so and that such party will be bound thereby.
15.9. The headings and subheadings contained in this Contract are used solely for convenience and do not constitute a part of this Contract between the parties and shall not be used to construe or interpret the provisions of this Contract.
15.10. Unless the parties have elected on the Base Contract not to make this Section 15.10 applicable to this Contract, neither party shall disclose directly or indirectly without the prior written consent of the other party the terms of any transaction to a third party (other than the employees, lenders, royalty owners, counsel, accountants and other agents of the party, or prospective purchasers of all or substantially all of a party’s assets or of any rights under this Contract, provided such persons shall have agreed to keep such terms confidential) except (i) in order to comply with any applicable law, order, regulation, or exchange rule, (ii) to the extent necessary for the enforcement of this Contract , (iii) to the extent necessary to implement any transaction, (iv) to the extent necessary to comply with a regulatory agency’s reporting requirements including but not limited to gas cost recovery proceedings; or (v) to the extent such information is delivered to such third party for the sole purpose of calculating a published index. Each party shall notify the other party of any proceeding of which it is aware which may result in disclosure of the terms of any transaction (other than as permitted hereunder) and use reasonable efforts to prevent or limit the disclosure. The existence of this Contract is not subject to this confidentiality obligation. Subject to Section 13, the parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with this confidentiality obligation. The terms of any transaction hereunder shall be kept confidential by the parties hereto for one year from the expiration of the transaction.
In the event that disclosure is required by a governmental body or applicable law, the party subject to such requirement may disclose the material terms of this Contract to the extent so required, but shall promptly notify the other party, prior to disclos ure, and shall cooperate (consistent with the disclosing party’s legal obligations) with the other party’s efforts to obtain protective orders or similar restraints with respect to such disclosure at the expense of the other party.
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15.11. The parties may agree to dispute resolution procedures in Special Provisions attached to the Base Contract or in a Transaction Confirmation executed in writing by both parties
15.12. Any original executed Base Contract, Transaction Confirmation or other related document may be digitally copied, photocopied, or stored on computer tapes and disks (the “Imaged Agreement”). The Imaged Agreement, if introduced as evidence on paper, the Transaction Confirmation, if introduced as evidence in automated facsimile form, the recording, if introduced a s evidence in its original form, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings will be admissible as between the parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissi bility of the recording, the Transaction Confirmation, or the Imaged Agreement on the basis that such were not originated or maintained in documentary form. However, nothing herein shall be construed as a waiver of any other objection to the admissibility of such evidence.
DISCLAIMER: The purposes of this Contract are to facilitate trade, avoid misunderstandings and make more definite the terms of contracts of purchase and sale of natural gas. Further, NAESB does not mandate the use of this Contract by any party. NAESB DISCLAIMS AND EXCLUDES, AND ANY USER OF
THIS CONTRACT ACKNOWLEDGES AND AGREES TO NAESB'S DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS OR
REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS CONTRACT OR ANY PART THEREOF, INCLUDING
ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS OR SUITABILITY FOR
ANY PARTICULAR PURPOSE (WHETHER OR NOT NAESB KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT
AWARE OF ANY SUCH PURPOSE), WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE, OR BY COURSE OF DEALING. EACH USER OF THIS CONTRACT ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR ANY DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY USE OF THIS CONTRACT.
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TRANSACTION CONFIRMATION EXHIBIT A
FOR IMMEDIATE DELIVERY
Letterhead/Logo
Date: ____________________________, _____
Transaction Confirmation #: _______________
This Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated ______________________. The terms of this Transaction Confirmation are binding unless disputed in writing within 2 Business Days of receipt unless otherwise specified in the Base Contract.
SELLER:
_______________________________________________
_______________________________________________
_______________________________________________
Attn: ___________________________________________
Phone: _________________________________________
Fax: ___________________________________________
Base Contract No. ________________________________
Transporter: _____________________________________
Transporter Contract Number: _______________________
BUYER:
_______________________________________________
_______________________________________________
_______________________________________________
Attn: ___________________________________________
Phone: _________________________________________
Fax: ___________________________________________
Base Contract No. ________________________________
Transporter: _____________________________________
Transporter Contract Number: _______________________
Contract Price: $ /MMBtu or ______________________________________________________________________
Delivery Period: Begin: , ___ End: , ___
Performance Obligation and Contract Quantity: (Select One)
Firm (Fixed Quantity): Firm (Variable Quantity): Interruptible:
M MBtus/day MMBtus/day Minimum Up to MMBtus/day EFP MMBtus/day Maximum
subject to Section 4.2. at election of
Buy
er or Sel
ler
Delivery Point(s): ________________________
(If a pooling point is used, list a specific geographic and pipeline location):
Special Conditions:
Seller: __________________________________________
By: ____________________________________________
Title: ___________________________________________
Date: __________________________________________
Buyer: __________________________________________
By: ____________________________________________
Title: ___________________________________________
Date: __________________________________________
Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
1 Special Provisions to Base Contract for Sale and Purchase of Natural Gas (the “NAESB”) Between
City of Victorville
and
BP Energy Company
dated November 1, 2024
Section 1. Purpose & Procedures
In Section 1.2 add the phrase “or other electronic means of communication” after “conversation” and before “with” in the second line.
In Section 1.3 delete “mutually agreeable electronic means” in the second line and replace it with “other electronic means of communication”.
In Section 1.4 add the following before the “.” at the end of the second sentence: “; provided, further that the party responsible for obtaining the consent of its agents and employees to such recordings shall indemnify, defend and hold the other party har mless from any and all losses, liabilities, claims, damages, judgments, costs and expenses, including but not limited to reasonable attorney’s fees and costs of court, arising from or out of such party’s failure to obtain the consent of its agents and empl oyees to such recordings.”
Section 2. Definitions
Definition of “Spot Price” in Section 2.31 shall be amended by deleting the last sentence and replacing with the following:
“If no price or range of prices is published for such Day, then the Spot Price shall be determined in accordance with Section 14 as modified herein.”
Add the following at the end of Section 2:
“2.36 “Applicable Law” means any federal, state, tribal or local law, statute, regulation, code, ordinance, license, permit, compliance requirement, decision, order, writ, injunction, directive, judgment, policy, decree, including any judicial or administr ative interpretations thereof, or any agreement, concession or arrangement with any governmental authority, applicable to either party or either party’s performance under a transaction, and any amendments or modifications to the foregoing.
Section 3. Performance Obligation
Add the following as Section 3.5:
“3.5. In the event that the Contract Price for a transaction is a Fixed Price (as defined below), and such transaction (a) has a Firm performance obligation, and (b) a Delivery Period of at least one Month, then, notwithstanding anything to the contrary in this Contract, including, without limitation, anything in Sections
3.2 or 11 of this Contract: (i) if, upon the occurrence of an event of Force Majeure, and as a result of the event of Force Majeure (a) Seller is unable to sell and deliver or (b) Buyer is unable to purchase and receive, the Contract Quantity of Fixed Price Gas, either in whole or in part, for such transaction, (ii) then, for the duration of the event of Force Majeure, for each Day that Seller is unable to sell and deliver, or Buyer is unable to purchase and receive, such Fixed Price Gas, as set out in Section 3.5(i) above, the following settlement obligations between the parties shall apply:
a. if the FOM Price (as defined below) exceeds the Fixed Price, Seller shall pay Buyer the difference between the FOM Price and the Fixed Price for each MMBtu of such Gas not delivered and/or received on that Day, or
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2 b. if the Fixed Price exceeds the FOM Price, Buyer shall pay Seller the difference between the Fixed Price and the FOM Price for each MMBtu of such Gas not delivered and/or received on that Day.
For the purpose of this Section 3.5:
“Fixed Price” means, a Contract Price for a transaction that is expressed as a flat dollar amount for the Month of delivery, excluding any transactions that have been entered into after the last trading day (as defined by the NYMEX) for the applicable Mont h. Subject to the foregoing exclusion, “Fixed Price” also includes any transaction containing a Contract Price or a component of a Contract Price that has been converted from a floating price mechanism (i.e., a NYMEX/first of the month index basis component and a fixed price or floating price component, or a NYMEX/first of the month index priced component with a fixed basis component) to a flat dollar amount for the Month of delivery, either upon the mutual agreement of the parties or as a result of a part y exercising a pricing “trigger” option in the Contract. For the purpose of clarity, the parties agree that all transactions providing for puts, calls, collars, swaptions, caps, and floors shall constitute transactions for a Fixed Price. “FOM Price” means the price per MMBtu, stated in the same currency as the transaction subject to such event of Force Majeure, for the first of the Month delivery, either as the NYMEX settlement price or as an index price published in the first issue of a publication commo nly accepted by the Gas industry (selected by the Seller in a commercially reasonable manner) for the Month of such event of Force Majeure for the geographic location closest in proximity to the Delivery Point(s) for the relevant Day, adjusted for the basis differential between the Delivery Point(s) and the NYMEX or such published geographic location as determined by the Seller in a commercially reasonable manner.”
Add the following as Section 3.6:
“3.6. Each party is entering into this Contract in reliance on the Applicable Laws and Taxes in effect on the date hereof. If at any time after a transaction is entered into:
(i) new Applicable Law is enacted, existing Applicable Law is amended, new Taxes are imposed, or existing Taxes are changed (a “Regulatory Event”), in a way which individually or collectively has a material adverse economic effect upon a party (such party the “Affected Party”) under a particular transaction (each such transaction an “Affected Transaction”) and which does not constitute a Force Majeure event, then the Affected Party may notify the other party that it desires in good faith to renegotiate the material terms or conditions of the Affected Transaction(s) in order to address the effects of the Regulatory Event. Such Notice shall state how the Regulatory Event impacts the Affected Transactions and the proposed terms upon which the Affected Party would like to continue to perform the Affected Transaction(s) with respect to any Gas not yet delivered. (ii) after giving effect to any applicable provision or remedy specified in the Contract, it becomes unlawful for a party, (such party the “Affected Party”) under the Applicable Law to perform any material provision in relation the Contract or any particular transaction, (each such transaction an “Affected Transaction”) (an “Illegality”), then the Affected Party may terminate such Affected Transaction as provided for below.
If a Regulatory Event occurs and the parties fail to renegotiate the price or other material terms or conditions within sixty Days of the Notice, or if an Illegality occurs and such event continues for at least three Business Days, either party shall have the right by Notice to designate a Day, no earlier than the Day such Notice is given and no later than twenty Days after such Notice is given as the Early Termination Date to terminate and liquidate the Affected Transaction(s).
On the Early Termination Date (i) if there is one Affected Party damages shall be determined in accordance with Section 10 (excluding Section 10.1) of the Contract, except that references to the Defaulting Party and to the Non-Defaulting Party, respectively, will be deemed references to the Affected Party and to the Non- affected Party, or (ii) if there are two Affected Parties, each party shall determine damages in accordance with Section 10 of the Contract with the Market Value being the arithmetic average of the amounts so determined. The Market Value for each Terminated Transaction shall be determined by using the mid- market quotations or values without regard to the creditworthiness of the party performing the calculations.”
Add the following as Section 3.7.
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3 “3.7. Any Gas sold and delivered by Seller to Buyer at the Delivery Point(s), and purchases made and received from Seller by Buyer at the Delivery Point(s), shall be deemed delivered in the following order: (i) Gas where the Contract Price is a fixed price or has a fixed price component, (ii) Firm (Fixed Quantity), (iii) Firm (Variable Quantity) and (iv) Interruptible.”
Section 6. Taxes
In Section 6, add the following at the end “The Contract Price does not include any applicable state or local, gross receipts, compensating, utility, transaction privilege, sales or use tax, and any other transactional - type tax which may be levied as a result of sales of or use of Gas hereunder and that is allowed by applicable law to be invoiced to the Buyer as a separate charge from the Contract Price, whether measured by quantity or revenues; and if there are any such taxes Seller will invoice Buyer and Buyer will pay Seller the amount of such taxes which Seller will remit as required by applicable law. The parties agree to cooperate, in the event either party in good faith protests, contests, disputes, or files a refund request, with the applicable taxing authority or court with jurisdiction, by providing any relevant information, upon request, within a party’s possession, which will support the filing party’s filing.”
Section 7. Billing, Payment and Audit
In Section 7.6, add the following at the end of the next to last sentence before the “.”: “; provided, however, that the finality of all invoices and billings shall not apply to Taxes or any adjustments made by Transporter(s) under the terms of its applicable tariff, and the responsible party under the Contract shall continue to be responsible for such amounts”
In Section 7.7 delete “or pursuant to Section 7.3” in the fourth line.
Section 8. Title, Warranty, and Indemnity
In Section 8.4 add “to the extent the Delivery Point is located therein” before “;” in the third line.
Section 10. Financial Responsibility
Section 10.2 shall be amended by the following:
a. On the seventh line, in subsection 10.2(vii), replacing “48 hours but at least one Business Day” with “five (5) Business Days “;
b. Add the following before the “.” at the end of the last sentence: “provided that no suspension of performance shall continue for more than ten Business Days unless an Early Termination Date has been declared and the Defaulting Party has been given Notice thereof in accordance with Section 10.3.”
In the second paragraph of Section 10.3.1 (i) delete the word “of” and insert “that is or could be incurred in replacing or in providing the economic equivalent of the material terms for the” before the word “Gas” in the second line, (ii) delete “multiplied by the market price for a similar transaction” in the third line, (iii) insert “, other relevant market data” after “futures contracts” in the fifth line (iv) insert “(either firm or indicative)” after “trading markets” in the sixth line, (v) insert “or information available to the Non- Defaulting Party from its own internal sources, if that information is used i n the regular course of its business for the valuation of similar transaction,” after “third-party offers” in the sixth line and (vi) insert “The Non-Defaulting Party should utilize quotations or relevant market data in preference to its own internal sources, unless it believes in good faith that such quotations or relevant market data are not readily available or would not produce a commercially reasonable result. The Non- Defaulting Party may aggregate any loss or cost incurred in connection with its terminating, liquidating or re- establishing any Terminated Transaction or any hedge related to a Terminated Transaction provided the Non- Defaulting Party provides sufficient detail to value the loss or cost associated with each Terminated Transaction and each individual hedge such that the Terminated Transactions can be meaningfully audited by the Defaulting Party and its agents .” at the end thereof.
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4 In Section 10.3.2, add the following after the last sentence: “Nothing in this Section will be effective to create a charge or other security interest. This Section will be without prejudice and in addition to any right of setoff, offset, combination of accounts, lien, right of retention or withholding or similar right or requirement to which a party is at any time otherwise entitled or subject (whether by operation of law, contract or otherwise).”
In Section 10.4, (i) replace “second” in the sixth line with “fifth”, and (ii) add the following at the end thereof:
“Notwithstanding the foregoing, if the Non- Defaulting Party owes the Net Settlement Amount to the Defaulting Party, the obligation of the Non-Defaulting Party to pay to the Defaulting Party the Net Settlement Amount, shall not arise until, and shall be subject to the condition precedent that, (i) all transactions are terminated in accordance with this Contract and (ii) all obligations (contin gent or absolute, matured or unmatured) of the Defaulting Party and any Affiliate of the Defaulting Party to make any payment to the Non-Defaulting Party or any Affiliate of the Non-Defaulting Party shall have been fully and finally performed.”
Section 11. Force Majeure
In Section 11.2, add the following after the last sentence: “In no event shall Seller be under any obligation to source Gas from storage or other markets if an event of Force Majeure occurs. To the extent an event of Force Majeure occurs, Seller or Buyer will allocate the supply or purchase of Firm Gas for affected transactions, as applicable, on a pro rata basis with other similarly situated Firm Gas customers.”
Add the following as Section 11.7:
“11.7. If an event of Force Majeure prevents a party from delivering or purchasing Gas under this Contract and such event continues (i) for more than ninety consecutive Days or (ii) for more than one hundred and eighty cumulative Days during any calendar year, the party not claiming the event of Force Majeure may terminate and liquidate the transactions affected utilizing the same methodology set forth under Section 3.6.”
Section 14. Market Disruption
In Section 14, delete (i) “and averaging the four quotes” at the end of the first sentence; and (ii) the second sentence and replace it with the following: “Once the parties obtain the quotes, the following methodology shall be used to determine the replacement price for the Floating Price: (i) if each party obtains two quotes, the arithmetic mean of the quotations, excluding the highest and lowest values, shall be utilized; (ii) if one party obtains two quotes and the other party only obtains one quote, the highest and lowest values shall be excluded and the remaining quotation shall be utilized; (iii) if both parties each obtain one quote, the arithmetic mean of the quotations shall be utilized; or (iv) if only one party is able to obtain a quote, the obtained quotation shall be utilized. For purposes of the foregoing sentence, if more than one quotation is the same as another quotation, and such quotations are the highest and/or lowes t values, only one of the quotations shall be excluded.”
Section 15. Miscellaneous
Delete Section 15.3 in its entirety and replace it with the following:
“15.3. No waiver of any breach of this Contract, or delay, failure or refusal to exercise or enforce any rights under this Contract (including any rights to claim excused performance as a result of an event of Force Majeure), shall be held to be a waiver of any other or subsequent breach, or be construed as a waiver of any such right then existing or arising in the future.”
Add the following after the last sentence in Section 15.10:
Party B acknowledges that Party A is a public entity subject to the California Constitution Article 1, Section 3; the California Public Records Act, Cal. Gov. Code § 7920.000 et seq.; and the Ralph M. Brown Act, Cal. Gov. Code § 54950 et seq. (collectively hereinafter “State Laws”). The Parties further acknowledge and agree that nothing contained in this Contract shall be construed or interpreted to prevent or restrain Party A’s compliance with the provisions of such State Laws; provided, however, that Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
5 Party A shall promptly notify Party B in writing of any disclosures of the Base Contract, the terms of any transaction or the terms of the Base Contract made pursuant to State Law.”
Add the following as Section 15.13:
“15.13. To the extent, if any, that a transaction does not qualify as a “first sale” as defined by the Natural Gas Act and §§ 2 and 601 of the Natural Gas Policy Act, each party irrevocably waives any rights, including rights under §§ 4-5 of the Natural Gas Act, unilaterally to seek or support a change to any terms and conditions of the Contract, including but not limited to the rate(s), charges, or classifications set forth therein. By this provision, each party expressly waives its right to seek or support, either directly or indirectly, and by whatever means: (i) an order from the U.S. Federal Energy Regulatory Commission (“FERC”) seeking to change any of the terms and conditions of the Contract agreed to by the parties; and (ii) any refund from the other party with respect to the Contract. Each party further agrees that this waiver and covenant shall be binding upon it notwithstanding any regulatory or market changes that may occur after the date of the Base Contract or any transaction entered into between the parties. Absent the agreement of both parties to the proposed change, the standard of review for changes to any terms and conditions of the Contract proposed by (a) a party, to the extent that the waiver set forth in this Section
15.13 is unenforceable or ineffective as to such party due to a final determination being made under applicable law that precludes the party from waiving its rights to seek or support changes from the FERC to the terms and conditions of this Contract, (b) a non-party, or (c) the FERC acting sua sponte, shall solely be the “public interest” application of the “just and reasonable” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) (the “Mobile-Sierra Doctrine”), as the Mobile-Sierra Doctrine has been clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish 128 S.Ct. 2733 (2008) and NRG Power Marketing, LLC v. Maine Public Utilities Commission 130 S. Ct. 693 (2010).”
Add the following as Section 15.14:
“15.14. Subject to the provisions of Section 11, the parties hereby agree that a Cyber Attack (as defined below) that causes (i) the failure to perform a Firm obligation or (ii) a breach of a Party’s confidentiality obligations arising under Section 15.10, will constitute an event of Force Majeure. In addition, notwithstanding the provisions of Section 10.2, the parties agree that a failure to pay that is solely the result of a Cyber Attack will not constitute an Event of Default; provided that (a) suffic ient funds were available for such party to fulfil its obligations hereunder on the relevant date, and (b) the payment is made as soon as practicable but in no event later than 15 Days after the occurrence of the Cyber Attack. “Cyber Attack” means a third-party attack that compromises the integrity or availability of information from an information system or systems or the ability to prudently execute financial transactions required to perform the obligations under this Contract.
Add the following as Section 15.15
“15.15 Business and Human Rights. In connection with this Contract, Party A and Party B shall conduct their respective businesses in a manner that respects the rights and dignity of all people and internationally recognized human rights, including without limitation, by:
a) not employing, engaging or otherwise using forced labor, trafficked labor or exploitative child labor, nor engaging in or condoning abusive or inhumane treatment of workers; b) providing equal opportunities, avoiding discrimination and respecting freedom of association of workers, in each case within the relevant national legal framework; and c) mitigating or avoiding adverse human rights impacts to communities arising from their respective activities to the extent practicable.”
Add the following as Section 15.16:
15.16. Unless an express remedy is otherwise set forth in the Contract, the parties shall attempt to resolve through negotiation any dispute, claim, or controversy arising out of or relating to this Contract. Either party may initiate negotiations by providing written notice to the other Party setting forth the subject of the dispute, a statement of its position on the dispute, and its recommended solution to the dispute. The party receiving Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A
6 such notice shall respond in writing within twenty (20) days with a statement of its position on, and recommended solution to, the dispute. If the dispute is not resolved by this exchange of correspondence, then representatives of each party with full settlement authority shall meet at a mutually agreeable time and place and in a mutually agreeable manner within twenty (20) business days after the date the receiving party provides its written response to the initial written notice in order to exchange relevant information and perspectives, and to attempt to resolve the dispute. All negotiations are confidential and shall be treated as compromise and settlement negotiations under the California Evidence Code or any similar applicable rules of evidence. If the dispute is not resolved by the in- person meeting (or within twenty (20) business days after said meeting), upon written notice by either party to the other, the dispute shall be settled by binding arbitration.
Any and all disputes arising out of or relating to the Contract shall be finally settled in accordance with the California Arbitration Act (“CAA”), California Code of Civil Procedure Section 1280 et seq., including without limitation, Sections 1283.1 and 1283.05 thereof, and California substantive and procedural law , if the CAA applies to the dispute, or if the CAA is not applicable, then the Federal Arbitration Act (“FAA”) rules for commercial arbitration in effect on the date of the Contract . Except as otherwise provided herein, such arbitration shall be administered by JAMS under its Comprehensive Arbitration Rules and Procedures in effect as of the date of the Contract (“JAMS Rules”). The arbitrators shall be independent and “neutral” as that term is defined in the CAA or FAA as applicable, and shall be selected pursuant to the JAMS Rules, modified as herein provided. If the total amount in dispute is less than One Million US Dollars ($1,000,000) there shall be a single (1) arbitrator. If the total amount in dispute is One Million US Dollars ($1,000,000) or greater, there shall be three (3) arbitrators. The place of arbitration shall be Denver, Colorado, and the language of the arbitration shall be English. The a rbitrator(s) shall apply California substantive law to the proceeding. At the conclusion of the arbitration hearing, the arbitrator(s) shall prepare in writing and provide to the parties an award including factual findings and the reasons on which their decision is based. The arbitrator(s) shall not have the power to commit errors of law or legal reasoning, and the award may be vacated or corrected on appeal to a court of competent jurisdiction for any such error. The decision of the arbitrator(s) may be entered and enforced as a final judgment in any court of competent jurisdiction. The arbitration and all matters arising directly or indirectly therefrom will be kept strictly confidential by the parties and will not be disclosed to any third party except as may be compelled by law. Except to the extent expressly provided herein, the arbitrators are not empowered to award consequential, indirect, special, punitive, or exemplary damages, and each party hereby irrevocably waives any damages in excess of actual damages. Either party may apply to the arbitrator (s) seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either party also may, without waiving any remedy under the Contract, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the establishment of the arbitral tribunal (or pending the arbitral tribunal’s determination of the merits of the controversy). The courts of the State of California shall have jurisdiction to hear any action to compel arbitration or any other judicial proceedings with respect to the Contract. In the event of any legal action (including arbitration) to enforce or interpret the Contract, the non- prevailing party shall pay the reasonable attorneys’ fees and other costs and expenses (including expert witness fees) of the prevailing party in such amount as they may be determined.
This provision is separate and several and shall survive the expiration of the Term .
Add the following as Section 15.17:
“15.17. This Contract shall be considered for all purposes as prepared through the joint efforts of the parties and shall not be construed against one party or the other as a result of the manner in which this Contract was negotiated, prepared, drafted or executed.”
[Signature page follows.]
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7 IN WITNESS WHEREOF, the parties have caused these Special Provisions to be duly executed and become effective as of the date first written above.
City of Victorville BP ENERGY COMPANY
By:
By:
Name: Name:
Title: Title:
Docusign Envelope ID: 60414C85-78A3-4404-847F-C79ED0F41F5A Attorney in Fact
Michael Porter
Item Number: 20
City Council / Board of Directors
Written Communications
Meeting of: November 19, 2024
Submitted By:
Alex Jauregui, City Planner
Jorge Duran, Code Enforcement Official
Subject:
Acceptance of California Department of Justice 2024-25 Tobacco Grant Program funding Recommendation:
That the Honorable City Council adopt Resolution Nos. 24-100 and 24-101, thereby:
(1) Accepting the 2024-25 Tobacco Grant Program grant with the California Department of Justice providing the City with $111,120.00 to aid in implementation and enforcement efforts associated with annual inspections of tobacco retailers in the City;
(2) Authorizing the City Manager to finalize all documents needed to execute the grant contract;
(3) Authorizing the City Manager to make any necessary amendments to the contract as deemed necessary; and
(4) Amending the annual budget for fiscal year 2024-2025 to reflect an additional appropriation in the amount of $54,340.00.
Fiscal Impact:
The proposed action will result in an increase of $54,340.00 in the City’s budget for fiscal year 2024-25 with the remaining $56,870.00 of the awarded grant (Attachment C) to be included in the annual budget for fiscal year 2025-26 pursuant to the grant terms (Attachment D). The subject grant was awarded to fund activities associated with annual inspections of tobacco retailers to ensure that site standards and operational standards are in compliance with Ordinance No. 2450, which was adopted in July of 2024 (Attachment E). Activities funded by this grant will include Code Enforcement and Planning Department staff wages, enforcement of the prohibited sales and marketing of illegal tobacco products and drug paraphernalia, retailer and City staff educational activities, as well as equipment/materials including light meters and educational information for retailers. Upon execution of the grant agreement, the subject funds will be dispersed to the City as a reimbursement of actual expenditures and duties/activities 3 8
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performed, as outlined in the Budget Detail approved by the Department of Justice (Attachment F). The subject funding is intended to supplement existing Code Enforcement funding for functions that implement on-going enforcement efforts related to tobacco sales and Ordinance No. 2450, with limited potions of funding allocated to Planning Department staff for technical assistance as needed. Additionally, the subject grant has no matching requirement and administration of the grant will be managed by the City’s existing Code Enforcement and Planning Department staff.
Strategic Plan Goal:
The subject grant opportunity aligns with Goals B, C, and D of the 2023-2026 Strategic Plan as follows:
•Goal B (Public Safety) – Acceptance of the grant award will aid in funding the required annual inspection process by ensuring that all alcohol and tobacco retailers are operating their facilities in accordance with State and local laws, which among other things aim to ensure adequate on-site lighting, enhance visibility within premises, and prevent loitering and illegal activities on-site. •Goal C (Community and Economic Development) – Acceptance of this grant award will fund a proactive Code Enforcement approach in order to confirm compliance with maintenance and site condition standards. This aspect of the requirements of Ordinance No. 2450 aims to improve the appearance of non-compliant locations and preserve the community, which will support the establishment of new businesses and retention of existing business in the City.
•Goal D (Reduce Homelessness) – Acceptance of this grant award will assist the City in reducing access to illegal tobacco products and drug paraphernalia, thus making the retailers part of the solution to reduce substance abuse and illegal drug use that are not uncommon within the City’s homeless population. Reducing access to these illegal items should then result in the reduction of homeless outreach efforts in the areas around alcohol and tobacco retailers, which frequently occur near each other.
Background:
Ordinance No 2450 History
On May 8, 2024, the Planning Commission recommended City Council Adoption of Ordinance No. 2450, which proposed additional regulations and annual inspection of retail establishments that sell alcohol or tobacco for off-site consumption. Additionally, the Planning Commission recommended that City staff seek grant funding to implement the proposal.
On June 18, 2024, the City Council authorized City staff to seek grant funding to support the implementation of Ordinance No. 2450, which was followed by City Council adoption of Ordinance No. 2450 on July 17, 2024.
Grant Purpose
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The California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Proposition 56) was passed to promote a healthier California by reducing illegal retail sales and marketing of cigarettes and tobacco products, including e-cigarettes, to minors.
The Tobacco Grant Program, established in 2017 and administered by the Office of the Attorney General, makes these annual funds available to local public agencies throughout California. This grant funding is intended to support local enforcement of activities specifically aimed at reducing the illegal retail sales and/or marketing of tobacco products to minors and youth, which also aligns with the goals and enforcement activities related to adopted Ordinance No. 2450.
Grant History & Proposed/Eligible Uses
On June 28, 2024, City staff applied for the Tobacco Grant Program through the California Department of Justice (Attachment G) requesting $126,745 to aid in the implementation and enforcement of Ordinance No. 2450.
On October 16, 2024, the Department of Justice informed staff that the grant application was approved in the amount of $111,120 to spend over the course of two years (with requests for iPads and travel compensation removed for consideration). The grant funding awarded allocates $54,340.00 to be spent in fiscal year 2024-25 & $56,870.00 to be spent in fiscal year 2025-26 and will supplement existing Code Enforcement funding for functions related to carrying out on-going enforcement efforts related to Ordinance No. 2450, training and educational opportunities/materials for both staff and impacted business owners, as well as the purchase of two light meters to ensure that impacted retail establishments provide safe and well-lit exteriors in compliance with Ordinance No. 2450. Activities for reimbursement under this grant may commence on or after November 1, 2024.
On October 24, 2024, the City submitted a Letter of Intent to accept the Tobacco Grant Program award in the amount of $111,210, noting that the final City Council approval would be required to formally accept the grant (Attachment H).
Discussion:
While the City’s grant application was approved with an award of $111,120.00 to be used to aid in the implementation and enforcement of tobacco retailer inspections and education, as noted in the City’s Tobacco Grant Program Award Letter and Budget Detail (Attachments C & F), formal acceptance of the grant by the City Council is required to make the associated 2024-2025 budget amendment and authorize completion of the necessary contract.
If accepted, the grant period and ability to begin claiming expenses for reimbursement would begin on November 1, 2024. Though the grant runs through the end of fiscal year 2025-2026, the time limit for reimbursements against this award ends on June 30, 2028.
The Department of Justice will assign a Grant Program Officer to assist the City in processing reimbursement requests and making any needed changes to the proposed grant budget.
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The City continues to prioritize financial sustainability and the health and safety of the community as outlined in the 2023-2026 Victorville Strategic Plan. Approving the recommendations as presented will advance those efforts. With the proposed additional funding, the City will continue to address public safety and community and economic development interests by working with affected alcohol and tobacco retailers to gain compliance with the site and operating standards, as regulated by Ordinance No. 2450, as well as aid in the reduction of homeless outreach efforts by decreasing access to illegal tobacco products and drug paraphernalia which have been known to negatively impact vulnerable populations such as those experiencing homelessness.
Attachments: A. City Council Resolution No. 24-100 - California Department of Justice Tobacco Grant Program Contract
B. City Council Resolution No. 24-101 - Budget Amendment C. Award Letter and Summary of Award
D. City/Department of Justice Grant Agreement/Memorandum of Understanding
E. Ordinance No. 2450
F. Budget Detail
G. California Department of Justice Tobacco Grant Program Application
H. Letter of Intent
CITY COUNCIL
ATTACHMENT A
Resolution No. 24-100
California Department of Justice Tobacco
Grant Program Contract
RESOLUTION NO. 24-100
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VICTORVILLE
ACCEPTING THE CALIFORNIA DEPARTMENT OF JUSTICE TOBACCO GRANT PROGRAM GRANT IN THE AMOUNT OF $111,120; AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO EXECUTE ALL GRANT DOCUMENTS AND ADMINISTER THE OVERALL PROJECT; AND AUTHORIZING THE CITY MANAGER
TO MAKE ANY NECESSARY AMENDMENTS TO THE CONTRACT AS DEEMED
NECESSARY BY THE CALIFORNIA DEPARTMENT OF JUSTICE OR THE CITY
ATTORNEY
WHEREAS, the City of Victorville (City) adopted Ordinance No. 2450 on July 17, 2024, which modified Title 16 of the Victorville Municipal Code to include additional regulations and annual inspection of retail establishments that sell alcohol or tobacco for off-site consumption; and
WHEREAS, the City of Victorville 2023-2026 Strategic Plan, Goal B prioritizes the implementation of public safety strategies to support a thriving and growing community, and an annual inspection process is required by Ordinance No. 2450 to ensure that all alcohol and tobacco retailers are operating their facilities in accordance with State and local laws; and
WHEREAS, the City of Victorville 2023-2026 Strategic Plan, Goal C supports the economic vitality and preservation of the community for all its members, and a proactive Code Enforcement approach to confirm compliance with maintenance and site condition standards required by Ordinance No. 2450 will result in improvements to the appearance of non-compliant locations and preserve the community, which will support the establishment of new businesses and retention of existing business in the City; and WHEREAS, the City of Victorville 2023-2026 Strategic Plan, Goal D prioritizes the implementation of effective solutions to reduce homelessness, and by reducing access to illegal tobacco products and drug paraphernalia as required by Ordinance No. 2450, and the City and retailers will become part of the solution to reduce substance abuse and illegal drug use that are not uncommon within the City’s homeless population, which should then result in the reduction of homeless outreach efforts in the areas around alcohol and tobacco retailers, which frequently occur near each other; and WHEREAS, the California Department of Justice has awarded the City $111,210.00 to support local enforcement of activities specifically aimed at reducing the illegal retail sales and marketing of tobacco products in accordance with Ordinance No. 2450 and the City’s 2023-2025 Strategic Plan; and
WHEREAS, the CA Department of Justice finds the City qualified to assist in the education and enforcement of tobacco sales that comply with State and local laws and regulations; and
WHEREAS, the City desires to enter into this Grant Agreement with the CA Department of Justice to clarify roles, responsibilities, and reimbursement terms regarding the Tobacco Grant Program; and
WHEREAS, the City Council finds that all materials that constitute the record of proceeding upon which its decision is based shall be located with the City of Victorville Clerk, located at 14343 Civic Drive, Victorville, California; and WHEREAS, after hearing all testimony presented, the City Council votes to accept the Tobacco Program Grant in the amount of $111,210.00 and approve the expenditure of funds pursuant to the Budget Detail, which is attached to this Resolution as Exhibit F.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Recitals
The recitals set forth above are true and correct, and are hereby incorporated by this reference.
Section 2. Contract Agreement
The City Council hereby authorizes the execution of the contract between the City and the California Department of Justice to accept and use the Tobacco Grant Program funding to address enforcement and administrative activities related to the prohibited sales, marketing, and advertisement of certain tobacco products as required by State law and Ordinance No. 2450.
Section 3. City Manager Authority
The City Council hereby delegates to the City Manager or his designee the role of Signature Authority on behalf of the City to execute all grant documents necessary to secure Tobacco Grant Program funds and administer/implement the approved grant project, including the execution of agreements/contracts necessary to administer or implement the approved grant project and budgeted items provided no contracts exceed the City Managers Contract Authority provided by Section 2.28.060 of the Victorville Municipal Code.
Section 4. Effective Date
This Resolution shall take effect immediately upon its adoption. 3 8
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CITY COUNCIL
ATTACHMENT B
Resolution No. 24-101
Budget Amendment
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RESOLUTION NO. 24-101
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VICTORVILLE AMENDING THE ANNUAL BUDGET FOR FISCAL YEAR 2024-2025
WHEREAS, the City Manager of the City of Victorville did heretofore submit to the City Council an estimate of the expenditures and revenues of the City departments and offices, together with a proposed budget for the fiscal year 2024-2025; and WHEREAS, copies of said budget were prepared and distributed to the City Council, approved by the City Council prior to June 30, 2024, and have been available for the inspection by the public in the office of the City Clerk of the City of Victorville; and WHEREAS, after preparation of the budget, a need to amend the budget is being recommended to the Council for approval; and
WHEREAS, the City Manager or his designee will provide all necessary justification for the budget amendment as an attachment to this resolution or in the associated City Council agenda report.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That the annual budget for the fiscal year 2024-2025 for the City of Victorville be hereby amended to reflect a change in the amounts and associated accounts listed below and as described in the corresponding Agenda Item.
Account Amount Adjusted
2704020-43110-20589 (REVENUE) $54,340.00
2704020-51100-20589 (FULL TIME
WAGES EXPENDITURE)
$ 31,540
2704020-51110-20589 (OVERTIME
WAGES EXPENDITURE)
$11,430.00
2704020-51200-20589 (FULL TIME
FRINGE BENEFITS EXPENDITURE)
$3,435.00
2704020-51300-20589 (PAYROLL
TAXES EXPENDITURE)
$1,500.00
2704020-52110-20589 (SUPPLIES
EXPENDITURE)
$3,636.00
2704020-52140-20589
(TRAINING/EDUCATION
EXPENDITURE)
$212.00
2704020-52300-20589 (CONTRACT
SERVICES EXPENDITURE)
$2,587.00
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SECTION 2. That copies of such amended budget, certified by the City Clerk, shall be filed with the auditors of the City of Victorville and in the office of the City Clerk for public inspection and certified copies thereof shall be made available for use by City departments, offices and subsidiary districts of the City.
CITY COUNCIL
ATTACHMENT C
Award Letter and Summary of Award
CITY COUNCIL
ATTACHMENT D
City/Department of Justice Grant
Agreement/Memorandum of Understanding
Tobacco Grant Program
Grant Services Branch – Local Assistance
Division of Operations
Victorville, City of DOJ-PROP56-2024-25-1-073