Watsonville City Council
May 28, 2024

Consultant Contract Architects or Engineers w/employees Page 4 of 9 SECTION 12. COMPLIANCE WITH LAWS. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments. Consultant shall obtain and maintain a City of Watsonville business license during the term of this Contract.

SECTION 13. GOVERNING LAW. City and Consultant agree that the law governing this Contract shall be that of the State of California. Any suit brought by either party against the other arising out of the performance of this Contract shall be filed and maintained in the Municipal or Superior Court of the County of Santa Cruz.

SECTION 14. PRIOR CONTRACTS AND AMENDMENTS. This Contract represents the entire understanding of the parties as to those matters contained herein.

No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. This Contract may only be modified by a written amendment.

SECTION 15. CONFIDENTIAL INFORMATION. All data, documents, discussions or other information developed or received by or for Consultant in performance of this Contract are confidential and not to be disclosed to any person except as authorized by the City Manager or his designee, or as required by law.

SECTION 16. OWNERSHIP OF MATERIALS. All reports, documents or other materials developed or received by Consultant or any other person engaged directly by Consultant to perform the services required hereunder shall be and remain the property of City without restriction or limitation upon their use.

SECTION 17. COVENANT AGAINST CONTINGENT FEES. The Consultant covenants that Consultant has not employed or retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure the Contract, and that Consultant has not paid or agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fees, commissions, percentage, brokerage fee, gift, or any other consideration contingent on or resulting from the award or making of this Contract, for breach or violation of this covenant, the City shall have the right to annul this Contract without liability, or in its discretion, to deduct from the Contract price or consideration or otherwise recover, the full amount of such fee, commission, percentage fee, gift, or contingency.

SECTION 18. WAIVER. Consultant agrees that waiver by City or any one or more of the conditions of performance under this Contract shall not be construed as waiver of any other condition of performance under this Contract.

SECTION 19. CONFLICT OF INTEREST.

A. A Consultant shall avoid all conflict of interest or appearance of conflict of interest in performance of this Contract. Consultant shall file a disclosure statement, if required by City Council Resolution, which shall be filed within thirty (30) days from the effective date of this Contract or such Resolution, as applicable.

B. No member, officer, or employee of the City, during their tenure, or for one (1) year thereafter, shall have any interest, direct or indirect, in this Contract or the DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Consultant Contract Architects or Engineers w/employees Page 5 of 9 proceeds thereof and Consultant agrees not to allow, permit, grant, transfer, or otherwise do anything which will result in such member, officer, or employee of the City from having such interest.

SECTION 20. AUDIT BOOKS AND RECORDS. Consultant shall make available to City, its authorized agents, officers and employees, for examination any and all ledgers and books of account, invoices, vouchers, canceled checks and other records or documents evidencing or related to the expenditures and disbursements charged to the City, and shall furnish to City, its authorized agents and employees, such other evidence or information as City may require with respect to any such expense or disbursement charged by Consultant.

SECTION 21. NOTICES. All notices shall be personally served or mailed, postage prepaid, to the following addresses, or to such other address as may be designated by written notice by the parties:

CITY
City Clerk’s Office
275 Main Street, Suite 400
Watsonville, CA 95076
(831) 768-3040

CONSULTANT
Wallace Group,
a California Corporation
612 Clarion Ct.

San Luis Obispo, CA 93401
(805) 544-4011
SECTION 22. EXHIBITS:

Exhibit A: Scope of Services
Exhibit B: Schedule of Performance
Exhibit C: Compensation
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Consultant Contract Architects or Engineers w/employees Page 6 of 9 WITNESS THE EXECUTION HEREOF, on the day and year first hereinabove written.

CITY

CITY OF WATSONVILLE
BY ______________________________
Rene Mendez, City Manager
ATTEST:

BY ______________________________
Irwin I. Ortiz, City Clerk
APPROVED AS TO FORM:

BY ______________________________
Samantha W. Zutler, City Attorney

CONSULTANT

WALLACE GROUP,

A CALIFORNIA CORPORATION
BY_________________________________
Kari E. Wagner, P.E.

DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Consultant Contract Architects or Engineers w/employees Page 7 of 9 EXHIBIT "A"

SCOPE OF SERVICES
The scope of services is as follows:

As described in the April 5, 2024, letter from Kari Wagner to Robert Schneider concerning a proposal for Construction Management Services for the Well No. 4 Pump Station Project.

See attachment labeled EXHIBIT “A”.

DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Consultant Contract Architects or Engineers w/employees Page 8 of 9 EXHIBIT “B”

SCHEDULE OF PERFORMANCE
Services shall commence immediately upon execution of this Contract. All services performed under the provisions of this Contract shall be completed in accordance with the following schedule:

From the execution date of this Contract to June 30, 2026.

DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Consultant Contract Architects or Engineers w/employees Page 9 of 9 EXHIBIT “C”

COMPENSATION
a. Total Compensation. The total obligation of City under this Contract shall not exceed Four Hundred Twenty Thousand One Eighty Seven Dollars ($420,187). b. Basis for Payment. Payment(s) to Consultant for services performed under this Contract shall be made as follows and shall [not] include payment for reimbursable expenses:
c. Payment Request. Consultant shall submit a request for payment for services on a monthly basis by letter to Director, or said Director's designated representative. Such request for payment shall cover the preceding monthly period during the term hereof, shall note the City's purchase order number for this Contract, shall contain a detailed listing of the total number of items or tasks or hours for which payment is requested, the individual dates on which such services were rendered, and invoices for reimbursable expenses, if any. Upon receipt in the Office of Director of said payment request, Director shall cause payment to be initiated to Consultant for appropriate compensation.

DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

April 5, 2024
Robert Schneider
City of Watsonville
250 Main St.

Watsonville, California 95076
Subject: Construction Management Services for the City of Watsonville – Well No. 4 Pump Station Project
Dear Mr. Schneider,
Wallace Group appreciates the opportunity to provide you with our proposal for construction management and inspection services for the Well No.4 Pump Station project. Based on our phone discussions and our review of the plans and specifications, the following Scope of Services has been prepared for your consideration.

PROJECT UNDERSTANDING
The project generally includes construction of a new well pump station and associated site improvements capable of pumping at approximately 1,825 gallons per minute (gpm). The pump station structure will be CMU and will include a pump, electrical, and chemical rooms.

A vertical turbine line-shaft pump will be installed along with station piping of valves, meters, and other appurtenances. The structure will be built with a removable portion of the metal roof to allow for well and pump access. The project will include installation of a chlorine gas disinfection systems and include necessary piping and provisions for future liquid chlorine disinfection system and hexavalent chrome treatment system. Note that the construction occurs near the airport and there may be restrictions on crane locations or other safety measures.

Site utilities will be constructed and connected to existing utility mains located in Roach Rd for storm drain, sanitary sewer, and domestic water. Approximately 300 LF of 14-inch water pipe and 500 LF of 8-inch water main will be replaced or upsized as part of the project. A portion of the waterline tie in occurs on Airport Blvd and traffic impacts will need to be mitigated, which may include night work to perform the tie in. A new site electrical service will be brought to the site and the installation of an emergency backup diesel generator.

Fiber optic conduit will be extended north along Airport Blvd and connect to an existing City installed pull box.

As part of a bid alternate, a new covered stockpile area will be installed to the north of the pump station structure. The site will be paved with asphalt and the entire paved area slurrycoated. A new curb and sidewalk constructed along Roach Rd including installing two streetlights. The project site will be restored following construction with new chain link fencing, motorized access gate, and landscaping.

EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

PP22-7635
City of Watsonville – Roach Rd Well No. 4
April 5, 2024

PROJECT TEAM
Proposed staff work out of the Salinas and San Luis Obispo offices. Jorge Avila will be assigned as the inspector from our Salinas office. Zach Teske will act as the Project Manager/Resident Engineer with office assistance and back up inspection provided by Anthony Lehman.

ZACH TESKE, PE, QSD/P - Project Manager
Zach brings extensive experience in project management and civil engineering. Prior to joining Wallace Group, he worked in the heavy civil construction field where he spent time as a civil project engineer performing environmental compliance and constructing utilities and temporary roadway detours for a large bridge replacement project. He has also been the project manager on many roadway and utility infrastructure construction and planning projects. Zach has a demonstrated record of delivering projects from conception through completion and excels at managing and coordinating projects with many moving parts.

ANTHONY LEHMAN, QSD/P – Assistant Resident Engineer /
Construction Inspector
Anthony Lehman is an Assistant Resident Engineer his background includes inspections, construction management, and design work in the field during construction. His experience includes inspecting public works projects, including but not limited to roadways, utilities, retaining walls, and other structures. Anthony has extensive experience working on lift stations and has completed multiple for the County of San Luis Obispo and the City of Guadalupe.

Jorge Avila - Senior Construction Inspector
Jorge has 20 years of experience in construction and specializes in underground construction. Jorge’s experience includes managing a broad range of projects with emphasis on installation of storm drain, sanitary sewer, and domestic/recycled water systems. Before joining Wallace Group, Jorge worked for a large contractor in the field as a field foreman. Jorge’s prior field construction experience gives him a firm understanding of solution oriented options on how to approach the work and makes him a strong asset to his projects.

SCOPE OF SERVICES
Listed below are the services we will provide:

Task 1: Pre-Construction Phase Services
Preconstruction Conference
• Thoroughly review plans, specifications, environmental documents, Engineer’s Estimate, and the Contractor’s completed bid form
• Pre-Construction Conference - Prepare agenda, schedule, and facilitate the meeting and issue minutes, with input from the City’s Representative • Review, comment, and accept the Contractor’s baseline project schedule • Review existing conditions and site constraints
• Collect pre-construction photos and videos of project site and adjacent areas EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

PP22-7635
City of Watsonville – Roach Rd Well No. 4
April 5, 2024

Procore: Construction Management Software
• Utilize Procore software for the project to handle all project documentation (RFIs, Submittals, Inspector Logs, Progress Payments, Photos, etc.) in a single, easy to use location
• Provide introduction to project team staff if unfamiliar with the software • Distribute project information via Procore to the Project Team Submittal and Request for Information (RFI) Management
• Utilize Procore to track and review submittals and RFI’s from Contractor in coordination with the Engineer of Record (Ludhorff & Scalmanini) and the City • Process submittals and RFIs in a timely manner and make available to project team • We have budgeted for 40 submittals and 15 RFIs
• Maintain electronic copies within Procore and hard copies as requested Project Communication and Coordination
• Facilitate project communication and coordination with the City, the design engineer, emergency services, utility providers, property owners, the Contractor, and other stakeholders
• Act as the point of contact for community members to contact with project concerns and work with the stakeholders to address these concerns in a timely manner • Review contractors proposed notifications to property owners and other stakeholders effected
• Distribute project information via Procore to the Project Team Task 2: Construction Phase
The contract documents present a total of 730 calendar days for the Contractor to complete the work. We understand that a majority of this time will be spent on long lead item material procurement, such as pumps and other electrical equipment. For the actual in-field construction phase, we have assumed a schedule of 190 working days (~39 weeks).

Based on this 190 working days/39 weeks, we have budgeted for 16 hours/week required for project management from our assigned Construction Manager/Resident Engineer and have budgeted for field observations at an average of 5 hours/day. Construction phase support will be dependent on construction activity and adjusted as required, with any unused budget being returned to the City.

Project Schedule & Weekly Construction Meeting
• Monitor project schedule
• Keep stakeholders informed of the construction schedule • Weekly Progress Meetings - Schedule, develop agenda, and minutes for meeting with Contractor, City staff, EOR, and other necessary entities • Review Contractors 3-Week Look Ahead Schedule and assist with forecasting and coordinate scheduling of testing and inspections
Change Order Management
• Review and qualify Contractor requested change orders • Investigate proposed change orders, obtaining the City’s approval prior to work taking place
EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

PP22-7635
City of Watsonville – Roach Rd Well No. 4
April 5, 2024

• Establish and maintain files and documentation for use in change negotiations or potential claims
Quantity Calculations and Progress Estimates
• Maintain quantity calculations throughout the project • Coordinate daily reports and quantities with the Contractor, identify and record potential disputes for future reference
• Review monthly Request for Payment, sign, and recommend approval for payment to the City
• Collect delivery and materials tickets for project record Construction Observation/Inspection
• Provide onsite inspection and oversight during construction, hours/level of inspection to depend on construction activity phase
• Prepare inspection reports, including tracking labor, equipment, weather, observations/notes, quantities, and photos. Daily reports to be made available to the City’s Designated Representative via Procore or in PDF format • Wallace Group Inspections and oversight include:
o Traffic control implementation
o Review of Contractors BMPs for general stormwater compliance o Site improvements including grading, flat work, paving, stockpile area, fencing, and landscaping
o Utilities – storm drain, water, sewer, conduits,
• Coordination with our subconsultant, EarthSystems, for material testing:
o Material & Compaction Testing – subgrade, base rock, asphalt, concrete cylinders
o Special Inspection – rebar, engineered wood products, welding • Assist with coordination of the EOR and their subconsultants for site visits observations and commissioning
o Responsibility of accepting of contractor’s start up and commissioning activities will be supported by EOR Luhdorff & Scalmanini based on scope of work in proposal dated 2/20/2020
• Report to the City when work is performed that is unsatisfactory, faulty, or does not conform to the Contract documents and advise on how the work should be remedied • Inspector will help to coordinate notification of local agencies or other City Departments
• Review compliance with contract documents
• Record and report design modifications
• Review Contractor’s survey work and layout for general conformance Site Documentation
• Maintain photographic and written documentation throughout the project in Procore and available to the entire team at all times
•
Stormwater Compliance and Permits
• Monitor stormwater protection measures throughout the project Safety
• Monitor Contractor’s safety practices for compliance with safety program • Utilize the following documents during field safety monitoring program:
o CAL-OSHA Construction safety orders
EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

PP22-7635
City of Watsonville – Roach Rd Well No. 4
April 5, 2024

o Traffic Control Plan
o Contractor’s safety plan
• Work with the Contractor to resolve safety concerns on site • Advise City of observed or unresolved deficiencies
Final Inspection and Punch List
• Inspect complete and near complete work for deficiencies • Establish and maintain punch list and track items to resolution • Recommend and approve final payment to the Contractor Task 3: Post-Construction Phase Services

As-Built Drawings
• Review as-built drawings with the Contractor throughout the project • Review O&M Manuals provided by Contractor for project records • Assist City and Design Engineer in review and completion of final certified record drawings

Project Closeout
• Assemble and deliver all records, reports, certificates, pictures upon project completion
• Assist with the preparation and signing of the Acknowledgement of Construction Closeout and Release of Claims form
• Prepare Notice of Completion and send to City’s Designated Representative • Files can be delivered in hard copy and/or electronic format, as requested Task 4: Earth Systems – Material and Special Inspection Services Earth Systems will act as a subconsultant to Wallace Group and will perform material testing and provide special inspection services. Testing and special inspection will be performed on subgrade, base rock, asphalt, concrete, reinforcing steel, and welding. Earth Systems proposal is included as an attachment to the Budget Summary table.

SCHEDULE
Project bids are expected in April 2024. We anticipate reviewing initial submittals in Summer 2024. Depending on material procurement and availability, this project may not start until 2025. We have assumed construction observation support for a period of 190 working days.

TO BE PROVIDED BY THE CLIENT
Client shall provide the DIR Project Number for this project. To do so, the Client will need to complete the PWC-100 form and submit to the DIR prior to the commencement of the field survey. This is required to be in compliance with State of California Prevailing Wage laws.

EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

PP22-7635
City of Watsonville – Roach Rd Well No. 4
April 5, 2024

ITEMS NOT INCLUDED IN SCOPE OF SERVICES
Only services and deliverables specifically detailed and listed are to be considered as included in this proposal. Project schedule extensions may require additional work authorization.

Assumptions include:
• City of Watsonville will perform inspection of all electrical and building systems • Commissioning will be the responsibility of and performed by the Contractor and acceptance and review/acceptance support will be provided by the Engineer of Record
• Quality Assurance Construction Staking will be performed under separate contract through the City’s on-call
• Labor compliance monitoring services will be performed by City staff

PROJECT BUDGET
Wallace Group will perform the services denoted in Scope of Services in accordance with the attached Standard Billing Rates (Exhibit A). These services will be invoiced monthly on an accrued cost basis, and our total budget, including reimbursables will not exceed our estimated budget of $420,187 without receiving written authorization from the City. Invoices will be formatted to match the formatting style contained within this fee proposal.

Reimbursables are included in the time and materials estimated budget amount stated above.

The estimated budget for on-site construction inspections are based on prevailing wage rates.

If the Client and the California Department of Labor determines that prevailing wage payments are not required, the fees can be adjusted and billed according to the per hour rate of the Standard Wage column on the Standard Billing Rates provided.

EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

PP22-7635
City of Watsonville – Roach Rd Well No. 4
April 5, 2024

TERMS AND CONDITIONS
In order to convey a clear understanding of the matters related to our mutual responsibilities regarding this proposal, the attached Standard Terms and Conditions (Exhibit B) are considered a part of our proposal agreement. If this proposal meets with your approval, please sign where indicated and return to our office, which will serve as our notice-toproceed. Or, please provide the City’s Professional Services Agreement for our review and signature.

We want to thank you for this opportunity to present our proposal for construction management services. If you would like to discuss this proposal in greater detail, please feel free to contact Zach Teske at [email protected] or at 831-226-9132.

Sincerely,
WALLACE GROUP, a California Corporation TERMS AND CONDITIONS ACCEPTED:

Kari Wagner ____________________________________
Principal Signature
612 Clarion Court ____________________________________
San Luis Obispo Printed Name
California 93401 ____________________________________
T 805 544-4011 Title
F 805 544-4294 ____________________________________
www.wallacegroup.us Date
Attachments
Budget Summary
Earth System’s Proposal – dated 3/27/24
GGM: PP22-7635
Exhibit A – 2024 Rate Sheet
Exhibit B – Terms and Conditions
THIS PROPOSAL IS VALID FOR 60 DAYS FROM THE DATE OF THIS DOCUMENT.

EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Wallace Group Team Resource Estimate for the
PP22-7635 - City of Watsonville - Well No. 4 Pump Station DIRECTOR OF WATER RESOURCES (Kari Wagner) PROJECT MANAGER/RESIDENT ENGINEER (Zach Teske) ASSISTANT RESIDENT ENGINEER II CONSTRUCTION INSPECTOR (PREVAILING WAGE) EarthSystems Misc. Direct Costs TOTAL LABOR HOURS
TOTAL

TASK DESCRIPTION HRS HRS HRS COST COST HRS LABOR COST
RATE $270 $220 $170 $180 $ $
1 PRE-CONSTRUCTION 4 80 60 $161 144 $28,880 $29,041
2 CONSTRUCTION 12 456 152 950 $7,002 1,570 $300,400 $307,402 3 POST-CONSTRUCTION 50 24 $80 74 $15,080 $15,160
4 EARTHSYSTEMS - MATERIALS & SPECIAL INSPECTION $ 58,694 SUB-TOTALS 16 586 236 950 $ $7,243 1,788 58,694 #REF! $351,603 WALLACE GROUP LABOR COSTS $4,320 $128,920 $40,120 $171,000 $344,360 WALLACE GROUP DIRECT COSTS $7,243
SUBCONSULTANT DIRECT COSTS $58,694 $58,694
DIRECT COSTS OVERHEAD @ 15% $9,891
TOTAL $420,187
Task Budgets may fluctuate within Overall Budget PHASE/TASK PP22-7635 Budget Estimate - rev12.23 update Summary Page 1 4/5/2024 EXHIBIT "A"
pg. 8 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

BERMUDA DUNES | FREMONT | HOLLISTER | PALMDALE | PASADENA | PERRIS | SALINAS | SAN LUIS OBISPO | SANTA BARBARA | SANTA MARIA | VENTURA

EARTH SYSTEMS
1514 Moffett Street, Suite A | Salinas, CA 95023 | (831) 240-4624 | www.earthsystems.com August 25, 2022 Proposal No.: SAL-22-08-010
(Revised March 27, 2024)
Mr. Zachary Teske
Wallace Group
612 Clarion Court
San Luis Obispo, CA 93401
PROJECT: CITY OF WATSONVILLE WELL NO. 4 PUMP STATION

ROACHE ROAD AND AIRPORT BOULEVARD

WATSONVILLE, CALIFORNIA
SUBJECT: Proposal for Geotechnical Observation and Construction Inspection and Testing Services
Dear Mr. Teske:

Per your request, Earth Systems Pacific (Earth Systems) has prepared this proposal for providing construction quality assurance services for the subject project. This proposal is based upon the review of geotechnical investigation report prepared by Pacific Crest Engineering, Inc., the plans and specifications provided by you, and our experience with similar projects. A review of the plans indicates that the new construction will include additions of a foundation slab for the generator, storage bunkers, well and pump station, associated utilities, and new pavements.

A construction schedule was not available during the preparation of this estimate. Based on our review of the drawings prepared for the project and our experience with projects of a similar nature, our anticipated scope of work will include:
• Review of concrete mix design submittal
• Attendance of preconstruction meetings
• Observe the placement of soil fill and evaluation of in-place compaction of the engineered fill
• Visual inspection of foundation trenches
• Laboratory testing of native and import soil to generate reference compaction curves
• Reinforcing steel and concrete placement inspection sampling and testing • Conformance testing of concrete samples
• CMU wall and grout placement inspection and grout sampling • Conformance testing of grout samples
• Testing of anchors post installation
• Review of submitted welding procedures and welder certifications EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

City of Watsonville Well No. 4 Pump Station August 25, 2022 (Revised March 27, 2024)
Doc. No.: 2208-017.PRP.REV1/jc 2 Proposal No.: SAL-22-08-010 • Material ID and shop welding inspection
• Field welding inspection
• Project management and supervision
• Preparation of final verified reports
The total cost of these services is dependent upon a number of factors, many of which are beyond our control. Among the cost determining factors are:
• The number of working days required by the contractor to complete each element of work.
• The number of different soil types to be utilized during site grading. • The amount of difficulty encountered by the grading contractor in obtaining the specified compaction of materials.
• Weather and subsurface conditions encountered during grading operations. • The amount of time our inspection services will be required each day of operations.

ESTIMATED FEES
We propose to perform the above-described services on a time and materials basis.

Estimated Fees (Not to Exceed) …………$58,694.00
Our “Scope of Anticipated Services and Cost Estimate” worksheet is attached for your information and review.

The fee estimates for reinforcing steel identification and sampling were based on the assumption that the rebar fabricator shop will be within 20 miles of one of Earth Systems’ offices.

SCHEDULE AND CONDITIONS
The fees and conditions of this proposal will remain in effect for a period of 180 days. As the presence of our personnel at the site will depend upon the contractor's schedule and the progress of the work, the fees presented above are to be considered as estimates only and should not be construed as guaranteed maximum fees. The invoices will reflect the actual charged based on our fee schedule for the amount of time spent and service performed and may be greater or less than the estimated amounts.

EXHIBIT "A"
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City of Watsonville Well No. 4 Pump Station August 25, 2022 (Revised March 27, 2024)
Doc. No.: 2208-017.PRP.REV1/jc 3 Proposal No.: SAL-22-08-010 Fees for overtime, weekend, and holiday work will be adjusted, and minimum work hours will be applied, in accordance with the State requirements. Night work (before 7:00 AM and after 5:00 PM) and overtime work will be invoiced at a rate of 1.5 times the appropriate rate. Field time will be subject to a two-hour minimum charge. Hourly fees for field work and travel time will be charged on a portal-to-portal basis from our office in Salinas.

It is our understanding that the project is subject to California Prevailing Wage Law. For your convenience in setting up the project, we have included our DIR registration numbers below.

DIR Public Works Registration Numbers
Legal Name
Registration
Number
License
Type*
Registration
Date
Expiration
Date
Earth Systems Pacific 1000003643 N100143 06/07/2018 6/30/2024 *Professional Corporation License Number assigned by DIR March 27, 2015 Please note that effective August 1, 2016, we are required to submit certified payrolls for all Prevailing Wage projects via eCPR. In order to upload certified payrolls to the State’s website, the project’s DIR number is necessary. Please complete the attached Prevailing Wage and Accounts Payable Information Request form and return to our office at your earliest convenience.

If you find the proposed scope of work and fees satisfactory, it is our understanding that you will issue a professional services agreement for our execution and a purchase order as an authorization to proceed.

We thank you for your consideration of Earth Systems for this project. Please feel free to contact the office at your convenience if you have any questions or require additional information.

Sincerely,
Earth Systems Pacific
Ajay Singh, GE 3057 Antonio Hernandez-Abrego
Principal Engineer Staff Engineer
Attachments: Anticipated Scope of Services & Cost Estimate Prevailing Wage & Accounts Payable Information Request
January 1, 2024 Fee Schedule
EXHIBIT "A"
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DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Project: WELL NO. 4 PUMP STATION, City of Watsonville Date: 3/27/2024 Proposal No.: SAL-22-08-010
Client: Wallace Group
PW Hourly Rate (Group 1 & 2) $153.00 minimum 2 hour billing increments PW Hourly Rate (Group 3 & 4) $148.00 minimum 2 hour billing increments Hourly Rate--CWI Special Inspector $125.00 minimum 2 hour billing increments Hourly Rate--Special Inspector $120.00 minimum 2 hour billing increments Hourly Rate--Technician $110.00 minimum 2 hour billing increments Mileage (per mile) $0.95
Geotechnical Inspections and Testing Number of Trips Hours or Units Total time Rate Unit Fee 14 4 56 $148.00 $8,288.00
Utility Trench Backfill Testing 10 4 40 $148.00 $5,920.00 Pavement Installation Observation and Testing 3 8 24 $148.00 $3,552.00 96 $15.00 $1,440.00
Footing Foundation Inspection 3 4 28 $148.00 $4,144.00
Slab-on-grade Inspection 3 4 24 $148.00 $3,552.00
Mileage 33 50 $0.95 $1,567.50
Subtotal Geotechnical $28,463.50
Special Inspection Number of Trips Hours or Units Total time Rate Unit Fee Reinforcing Steel Placement Inspections 4 4 16 $153.00 hr. $2,448.00 Concrete Placement and Sampling 4 8 32 $153.00 hr. $4,896.00 Masonry Wall Placement inspection 3 4 12 $153.00 hr. $1,836.00 Masonry Wall Grout Placement inspection and Sampling 3 6 18 $153.00 hr. $2,754.00 Shop Welding and Material ID 8 4 32 $125.00 hr. $4,000.00 Field Welding 4 4 16 $125.00 hr. $2,000.00
Post Installed Anchor Inspection a2d Testing 2 4 8 $148.00 hr. $1,184.00 Concrete Sample Pick-up 7 2 14 $110.00 hr. $1,540.00
Mileage Charges 35 50 ---- $0.95 Per mile $1,662.50
Subtotal Special Inspections $22,320.50
Laboratory Testing Sets Samples Rate Unit Fee
Concrete Cylinder Testing 4 20 $45.00 ea. $900.00
Compression Test on Grout 3 12 $65.00 ea. $780.00
Laboratory Maximum Density Curve (4") 3 2 $300.00 ea. $600.00 Laboratory Maximum Density Curve (6") 1 1 $340.00 ea. $340.00 Subtotal Laboratory Hours $2,620.00
Reports and Project Management Units Rate Unit Fee
4 $220.00 hr. $880.00
12 $220.00 hr. $2,640.00
Engineering Mix Design, WPS Reviews 4 $220.00 hr. $880.00 Final Report of Grading Inspections and Testing 1 $450.00 each $450.00 Final Report of Special Inspections and Testing 1 $440.00 each $440.00 Subtotal of Reports and Project Management $5,290.00
Estimated Project Total $58,694.00
Project Management and Supervision (in hours) for special inspection work Anticipated Scope of Services & Cost Estimate
Building Pad/Parking Lot Compaction Testing
Nuclear Gauge
Project Management and Supervision (in hours) for grading work (This will be a "Prevailing Wage" Project)
EXHIBIT "A"
pg. 12 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Rev. 12.19.17
Prevailing Wage and Accounts Payable Information Request Thank you for this opportunity to be of service on your public works project. Please complete and return this form to allow us to comply with California’s prevailing wage requirements, and to prepare Earth Systems’ invoices in accordance with your organization’s billing requirements in a timely manner. Thank you! Legal Name of Earth Systems
PWC Registration No.

Earth Systems Pacific
1000003643
Earth Systems Project No.

PUBLIC WORKS PROJECT REGISTRATION INFORMATION:

CLIENT’S PROJECT NAME City Of Watsonville Well No. 4 Pump Station DIR PROJECT ID (PWC-100)

APPLICABLE BID

ADVERTISEMENT DATE
CLIENT’S REPRESENTATIVE FOR

DIR PROJECT ID INFORMATION
Name:

E-mail:

Phone No.:

LABOR COMPLIANCE

PROGRAM (LCP) APPLICABLE
TO THIS PROJECT?
Yes or No
If yes, please confirm if Earth Systems will be subject to the LCP and provide a copy of the LCP manual to Earth Systems before start of project.

CLIENT’S BILLING REQUIREMENTS:

PURCHASE ORDER NO.
(if applicable)

ADDITIONAL INFORMATION

REQUIRED ON INVOICES

SPECIFY ANY ADDITIONAL

FORMS OR BILLING FORMATS

REQUIRED TO BE SUBMITTED

WITH INVOICES
(please attach example)

ACCOUNTS PAYABLE CONTACT

INFORMATION
Name:

E-mail:

Phone No.:

INVOICE DELIVERY METHOD E-mail:

Mailing Address:

Date March 27, 2024
EXHIBIT "A"
pg. 13 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

JANUARY 2024 FEE SCHEDULE NC-2212-004.FEE
FEE SCHEDULE – DSA/OSHPD
(Effective January 1, 2024)
This schedule presents rates for professional and technical services in the fields of geotechnical engineering, engineering geology, environmental consulting, construction observation and testing, and special inspection. Listed are charges for services most frequently performed by Earth Systems. Additional services not listed are available and can be discussed upon request; fixed-fee quotes for some services can also be provided upon request. To discuss a scope of work and fees for a specific project, please contact our office.

PERSONNEL Hourly Rate
Principal Professional.............................................................................................................................................$250.00 Associate Professional ...........................................................................................................................................$220.00 Senior Professional ................................................................................................................................................$200.00 Project Professional ...............................................................................................................................................$180.00 Staff Professional...................................................................................................................................................$155.00 DSA Masonry, Shotcrete and NDT .........................................................................................................................$150.00 CWI & Special Inspector, Prevailing Wage*...........................................................................................................$153.00 Technician, Prevailing Wage* ................................................................................................................................$148.00 Special Services/Caltrans Technician, Prevailing Wage* .......................................................................................$148.00 Special Services Technician....................................................................................................................................$130.00 CWI Inspector ........................................................................................................................................................$120.00 Special Inspector....................................................................................................................................................$120.00 Technical Assistant.................................................................................................................................................$110.00 Technician..............................................................................................................................................................$110.00 Clerical/Administrative ..........................................................................................................................................$110.00 * Technician/Inspector Classifications as defined by the State of California Department of Industrial Relations.

BASIS OF CHARGES

1. The prevailing wage (PW) rates presented herein are based on current rates established by the Department of Industrial Relations (DIR). If, during the course of the project, prevailing wage rates are increased by DIR, rates are subject to adjustment.

2. Field services for regular work days are subject to a 4-hour minimum charge, and billed in 4-hour increments.

3. Work performed on Saturdays, night work, and for premium hours (before 7 a.m., after 5 p.m. or more than 8 hours in one day) for personnel are at time and one-half; Sundays and holidays are at double time. Also, please note requirements concerning overtime, shift work, travel time, holidays, and other factors can vary for different classifications of work under prevailing wage regulations.

4. A 2-hour cancellation charge applies if scheduled inspection or testing is cancelled after 4 p.m. the day prior to the scheduled work.

5. Mileage is invoiced at a rate of $0.95/mile (portal-to-portal).

6. Nuclear density gauge charge: $15.00/hour.

7. Weekly special inspection report charge: $110.00.

8. Subcontracted services, materials, rental equipment, out of town travel, and expenses are charged at cost plus 20 percent. Fixed per diem rates for specific projects can be provided upon request.

9. Report copies: $30.00 each (minimum). Posting of electronic documents to project websites will be charged at clerical/administrative services rate.

10. Projects where State regulations require electronic submittal of Certified Payroll to DIR for prevailing wage will be assessed a fee of $110.00/week. Additional time required to address specific requests related to DIR/Labor Compliance will be charged at the clerical/administrative services rates.

11. Invoices are payable upon presentation. Invoices thirty days past due are subject to a service charge of one and onehalf percent per month. Payments using a credit card will be assigned a 3% surcharge.

12. Rates are effective through June 30, 2024.

EXHIBIT "A"
pg. 14 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

JANUARY 2024 FEE SCHEDULE NC-2210-027.FEE
FEE SCHEDULE – DSA/OSHPD – MATERIALS TESTING
(Effective January 1, 2024)

BASIS OF CHARGES
Rates for field work such as materials sampling, construction inspection, and field evaluation will be in accordance with the Personnel Rates listed in the basic Fee Schedule. The below listed rates apply to standard ASTM test methods. An additional hourly charge ($110.00/hr.) will be applied for cutting, capping, or other preparation of non-standard samples and, where noted, for steel samples.

SOILS
All prices are based on California and Modified California sample sizes (2” – 2.5” diameter) unless noted otherwise.

Preparation of 3” diameter samples add $20.00. Testing of contaminated soil will be per quote. Samples will be returned to sender for proper disposal.

Atterberg Limits: Liquid Limit or Plastic Limit................................................................................................................$130.00 Atterberg Limits: Plasticity Index .................................................................................................................................. $265.00 California Bearing Ratio, 3 points; incl. ref maximum density ......................................................................................$655.00 California Bearing Ratio, 9 points; incl. ref maximum density ......................................................................................$950.00 Consolidation, one dimensional....................................................................................................................................$230.00 Consolidation, timed, per point ....................................................................................................................................$105.00 Basic Corrosivity w/out Rpt (pH, Sulfate, Chl., Resistivity)........................................................................................ Per Quote Direct Shear, 3 points minimum ...................................................................................................................................$320.00 Expansion Index Test.....................................................................................................................................................$210.00 Maximum Density and Optimum Moisture: 4” Mold ...................................................................................................$305.00 Maximum Density and Optimum Moisture: 6” Mold ...................................................................................................$345.00 Maximum Density and Optimum Moisture: California Impact.....................................................................................$310.00 Moisture and Unit Weight Determination, from Ring Samples......................................................................................$50.00 Moisture Only..................................................................................................................................................................$45.00 Permeability Tests, constant head or falling head .................................................................................................... Per Quote R-Value ..........................................................................................................................................................................$330.00 R-Value, CA State Hwy/set of 3, Cement, Lime, Other addts........................................................................................$380.00 Hydro Collapse Potential...............................................................................................................................................$170.00 Sieve/Hydrometer Analysis, Assumed specific gravity, w/200 wash ............................................................................$255.00 Sieve Analysis, Aggregate Base/Subbase ......................................................................................................................$160.00 Sieve Analysis 200 wash only ........................................................................................................................................$140.00 Sieve Analysis with wash...............................................................................................................................................$165.00 Sieve Analysis, Oversize Material ..................................................................................................................................$220.00 Specific Gravity..............................................................................................................................................................$155.00 Swell Test, undisturbed.................................................................................................................................................$210.00 Swell Test, remolded.....................................................................................................................................................$235.00 Unconfined Compressive Strength, untreated..............................................................................................................$155.00 Unconfined Compressive Strength, lime or cement treated mtrl.................................................................................$495.00

THERMAL RESISTIVITY TESTS
Concrete, 1 pt w/moisture content (req spcl collection proc).................................................................................. Per Quote Field Testing using Thermal Resistivity Meter........................................................................................................... Per Quote Soil, per moisture point, per sample......................................................................................................................... Per Quote Soil, 3 moisture points with dry‐out curve, per sample ............................................................................................ Per Quote

CONCRETE AGGREGATE
Abrasion, L.A. Rattler, 100 and 500 revolutions, ASTM C131 (Small Size Aggregate)...................................................$305.00 Abrasion, L.A. Rattler, 100 and 500 Revolutions, ASTM C535 (Large Size Aggregate) ..................................................$565.00 Absorption, Coarse Aggregate ......................................................................................................................................$105.00 Absorption, Fine Aggregate...........................................................................................................................................$155.00 Clay Lumps and Friable Particles in Aggregate..............................................................................................................$130.00 Cleanness Value of Coarse Aggregate ...........................................................................................................................$180.00 Crushed Particles, each size ..........................................................................................................................................$155.00 EXHIBIT "A"
pg. 15 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

JANUARY 2024 FEE SCHEDULE NC-2210-027.FEE
FEE SCHEDULE – DSA/OSHPD – MATERIALS TESTING
(Effective January 1, 2024)
CONCRETE AGGREGATE (Cont.)
Durability Index, Coarse or Fine Aggregate...................................................................................................................$205.00 Flat and Elongated Particles in Aggregate.....................................................................................................................$130.00 Organic Impurities in Fine Aggregate............................................................................................................................$105.00 Potential Reactivity of Aggr by Chemical Method, ea size........................................................................................ Per Quote Sand Equivalent.............................................................................................................................................................$175.00 Sieve Analysis, washed..................................................................................................................................................$205.00 Soundness, Sodium Sulfate, 5 cycles.............................................................................................................................$455.00 Specific Gravity, Coarse Aggregate................................................................................................................................$155.00 Specific Gravity, Fine Aggregate....................................................................................................................................$155.00 Uncompacted Void Cntnt of Fine Agg Angularity, w/fine Agg SG.................................................................................$290.00 Unit Weight of Aggregate..............................................................................................................................................$155.00

CONCRETE CYLINDERS, BEAMS AND CORES
Compression Test of Cast Cylinders per cylinder............................................................................................................$50.00* Compression Test of Cored Samples, cored at laboratory............................................................................................$125.00 Compression Test of cores delivered by others............................................................................................................$105.00 Compression Test of Lightweight Concrete ....................................................................................................................$55.00* Density of Concrete Cylinders.........................................................................................................................................$85.00 Density of Hardened Concrete ......................................................................................................................................$110.00 Flexural Strength, Simple Beam with Third Point Loading ............................................................................................$185.00 Grading of Shotcrete Cores...........................................................................................................................................$490.00 Sample Storage, monthly per sample ............................................................................................................................. $50.00 Shrinkage, set of 3.........................................................................................................................................................$405.00 Unit Weight of Lightweight Concrete............................................................................................................................$135.00 Enviro. Recycling Fee, per cylinder, core or beam ............................................................................................................$2.00 Enviro. Recycling Fee, per flex beam.................................................................................................................................$5.00 Enviro. Recycle Fee/Form Stripping, per Shotcrete Panel/Beam....................................................................................$70.00

MASONRY
Absorption of Block, set of 3 .........................................................................................................................................$170.00 Compression Test, 2” x 4” Mortar Cylinders...................................................................................................................$45.00* Compression Test, 3” x 3” x 6” Grout Samples ...............................................................................................................$65.00* Compression Test on Block, set of 3..............................................................................................................................$170.00 Compression Test on Grouted Prisms, includes cutting................................................................................................$170.00* Compression Test on Masonry Cores..............................................................................................................................$90.00 Coring of Grouted Masonry by Subcontractor..........................................................................................................cost + 20% Masonry Shrinkage, set of 3..........................................................................................................................................$250.00 Moisture Content of Block as received, set of 3 ...........................................................................................................$110.00 Shear Test on Masonry Cores, 2 faces ..........................................................................................................................$155.00 Specific Gravity and Unit Weight of Block, set of 3.......................................................................................................$175.00 Enviro. Recycling Fee, per masonry prism.........................................................................................................................$5.00 Enviro. Recycling Fee, per mortar or grout sample...........................................................................................................$7.00 * Includes formal report of test results following 28-Day tests.

FIREPROOFING
Fireproof Bond Test................................................................................................................................................... Per Quote Fireproofing Density Test (1)...........................................................................................................................................$85.00

ASPHALT CONCRETE
Bulk Specific Gravity of Compacted Specimens and Core Samples.................................................................................$85.00 Compaction of Lab Samples, CA Kneading Compactor, set of 3....................................................................................$245.00 Compaction of Lab Samples, CA Kneading Compactor, set of 5....................................................................................$405.00 EXHIBIT "A"
pg. 16 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

JANUARY 2024 FEE SCHEDULE NC-2210-027.FEE
FEE SCHEDULE – DSA/OSHPD – MATERIALS TESTING
(Effective January 1, 2024)
ASPHALT CONCRETE (Cont.)
Compaction of Lab Spls, Mrshl Mthd set of 3 –(50 blows/side)....................................................................................$250.00 Compaction of Lab Spls, Mrshl Mthd set of 3 –(75 blows/side)....................................................................................$265.00 Extraction of Oil from A.C. Mixtures.......................................................................................................................... Per Quote Extraction of Oil from Rubberized Mixtures.............................................................................................................. Per Quote Gyratory Compactor, per set of field mixed asphalt .....................................................................................................$500.00 Hamburg Wheel Tracker Test, per set of field mixed asphalt.......................................................................................$895.00 Ignition Oven Binder Cntnt, after initial corr value is det..............................................................................................$280.00 Ignition Oven Binder Cntnt Corr Value /mix design, ave of 3........................................................................................$855.00 Ignition Oven Gradation Correction Value, per mix design....................................................................................... Per Quote Moisture Content ............................................................................................................................................................$55.00 Sieve Analysis of Extracted Aggregate...........................................................................................................................$290.00 Sieve Analysis of Ignition Oven Residue ........................................................................................................................$275.00 Specific Gravity, Theoretical Maximum, Rice Method ..................................................................................................$175.00 Stability and Flow, Marshall Apparatus, set of 3...........................................................................................................$245.00 Stabilometer, Hveem S-Value, set of 3..........................................................................................................................$355.00 Enviro. Recycling Fee, per sample .....................................................................................................................................$2.00 Enviro. Recycling Fee for Extracted Oils ..........................................................................................................................$50.00

REINFORCING AND STRUCTURAL STEEL
Bend Test of Welded Specimen, sample preparation not incl ........................................................................................$85.00 Pipe Flattening Test, sample preparation not included ..................................................................................................$80.00 Reinforcing Steel Coupler Tensile and Slip Tests...........................................................................................................$255.00 Structural Steel Bend Test, sample preparation not included ........................................................................................$85.00 Structural Steel Machining/Sample Preparation.......................................................................................................cost + 20% Structural Steel Tensile Test, sample prep not included .................................................................................................$85.00 Tensile and Bend Tests of Reinforcing Bar, #2 through #9............................................................................................$175.00 Tensile and Bend Tests of Reinforcing Bar, #10 through #18.................................................................................... Per Quote Enviro. Recycling Fee, per sample .....................................................................................................................................$2.00

BOLT TESTS
Bolt Tests, chemical or mechanical ...........................................................................................................................cost + 20%

WELDER QUALIFICATION
AWS D1.1: 3/8” Plate, per position ........................................................................................................................... Per Quote AWS D1.1: 1” Plate, per position............................................................................................................................... Per Quote AWS D1.3: Sheet Steel............................................................................................................................................... Per Quote AWS D1.4: Reinforcing Bar........................................................................................................................................ Per Quote ASME/API Pipe Sections............................................................................................................................................ Per Quote EQUIPMENT/CHARGES (Does Not Include Personnel)
110-volt Portable Electric Generator .................................................................................................................... $120.00/day Anchor Pull Test Equipment......................................................................................................................................$50.00/hr.

Bailer (disposable) w/dedicated rope ...................................................................................................................... $40.00/ea.

Concrete and Asphalt Concrete Coring Equipment...................................................................................................cost + 20% Concrete Slab Moisture Transmission Kit................................................................................................................. $50.00/ea.

Conductivity Meter....................................................................................................................................................cost + 20% Cut-Off Saw ............................................................................................................................................................. $95.00/day Double Ring Infiltrometer (per set)....................................................................................................................... $170.00/day Drum Dolly............................................................................................................................................................... $45.00/day Drums....................................................................................................................................................................... $95.00/ea.

Dynamometer, In-line Scale ...................................................................................................................................... Per Quote Hammer Drill .............................................................................................................................................................cost + 20% Hand Auger/Sampler Equipment ............................................................................................................................ $70.00/day Lock n, Load VOC Sample Pres. Sys. ......................................................................................................................... $40.00/ea.

EXHIBIT "A"
pg. 17 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

JANUARY 2024 FEE SCHEDULE NC-2210-027.FEE
FEE SCHEDULE – DSA/OSHPD – MATERIALS TESTING
(Effective January 1, 2024)
EQUIPMENT/CHARGES (Cont.) (Does Not Include Personnel)
Magnetic Particle Equipment............................................................................................................................... $200.00/day.

Non-Destructive Testing Equipment .........................................................................................................................$50.00/hr.

Manometer ........................................................................................................................................................... $160.00/day Mini-Troll Groundwater Level Transducer............................................................................................................ $120.00/day Mobile Laboratory..................................................................................................................................................... Per Quote Nuclear Density Equipment.......................................................................................................................................$15.00/hr.

Paint Thickness Meter............................................................................................................................................... Per Quote Vehicle with Percolation Tank System .................................................................................................................. $265.00/day Personal Protective Equipment Level C..................................................................................................................... Per Quote Pile Driving Equipment (for pile load testing) ........................................................................................................... Per Quote Pile Load Testing Equipment..................................................................................................................................... Per Quote Pulse Velocity Meter ................................................................................................................................................. Per Quote Rebound Hammer (Schmidt Hammer).................................................................................................................... $85.00/day Reinforcing Steel Locating Equipment (DR-Meter) ............................................................................................... $220.00/day Relative Humidity Meter....................................................................................................................................... $100.00/day Off Road Vehicle........................................................................................................................................................ Per Quote Safety and Specialty Equipment................................................................................................................................ Per Quote Sampling Consumables ............................................................................................................................................. Per Quote Skidmore Bolting Calibration Equipment.............................................................................................................. $255.00/day Slope Inclinometer Equipment, per hole .................................................................................................................. Per Quote Soil Sampling Containers (metal) ............................................................................................................................. $30.00/ea.

Soil Sampling Containers (glass)............................................................................................................................... $15.00/ea.

Tape Extensometer ................................................................................................................................................... Per Quote Tension Equipment ............................................................................................................................................... $215.00/day Torque Wrench ..................................................................................................................................................... $100.00/day Water Level Indicator.............................................................................................................................................. $60.00/day Windsor Probe, set of 3............................................................................................................................................. Per Quote Per Diem.................................................................................................................................................................... Per Quote DIR Compliance/eCPR, per week...................................................................................................................................$110.00 DSA Box Posting, ea.......................................................................................................................................................$110.00 DSA Lab Compliance, per week.....................................................................................................................................$110.00 Vehicle Mileage Charge.....................................................................................................................................................$0.95 EXHIBIT "A"
pg. 18 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

JANUARY 2024 FEE SCHEDULE NC-2210-027.FEE

EXPERT WITNESS SERVICES
(Effective January 1, 2024)
The following rates apply to deposition testimony, arbitration testimony, hearings and court appearances.

HOURLY CHARGES FOR PERSONNEL
Principal Professional ........................................ $400.00 Associate Professional ....................................... $300.00 Senior Professional ............................................ $250.00 Clerical/Admin Services..................................... $100.00

SPECIAL SERVICES
Deposition ................................................. $400.00/hr. 2 Arbitration ................................................... $400.00/hr.

Court Appearance/Hearings...........$1,500.00/half day3 Standby to Appear....................................$750.00/day4

BASIS OF CHARGES

1. Hourly rates are charged during investigation, analysis, consultation, and preparation services.

2. Estimated deposition fee payable in advance by party requesting deposition. The difference between advance payment and final fee to be billed or refunded in accordance with the fee and billing information in this schedule.

Fee for reviewing deposition transcript will be billed at hourly rates to the party requesting the review.

3. Minimum half day charge will apply to court appearances and hearings. Time extending through the noon hour will be subject to the full day charge of $3,000.00.

4. Days, or portions thereof, reserved for appearances at hearings, court, or arbitrations, during which we are not required to be away from our offices will be subject to a standby charge of $750.00. Standby at other locations will be charged at the general hourly rates.

EXHIBIT "A"
pg. 19 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

Exhibit A
Standard Billing Rates

Construction Management / Field Inspection Services:

Construction Inspector I - II ............................................ $140/$155 Senior Construction Inspector ......................................... $160 Construction Inspector (*Prevailing Wage) .......................... $180 Construction Office Tech I-III .......................................... $115/$125/$135 Assistant Resident Engineer I - II...................................... $165/$170 Resident Engineer I - III ................................................ $175/$180/$185 Senior Resident Engineer .............................................. $195 Director .................................................................. $220 Principal Construction Manager ....................................... $245 Principal .................................................................. $270 Public Works Administration Services:

Project Analyst I - IV ................................................... $120/$130/$140/$150 Senior Project Analyst I - III ........................................... $155/$160/$165 Senior Environmental Compliance Specialist I - III ................. $170/$175/$185 Support Services:

Office Assistant ......................................................... $110 Project Assistant I – III .................................................. $120/$125/$135 *Prevailing Wage:

State established prevailing wage rates will apply to some services based on state law, prevailing wage rates are subject to change over time and geographic location.

Right to Revisions:

Wallace Group reserves the right to revise our standard billing rates on an annual basis, personnel classifications may be added as necessary.

Additional Professional Services:

Fees for expert witness preparation, testimony, court appearances, or depositions will be billed at the rate of $400 an hour. If required to meet schedule requests, overtime on a project will be billed at 1.5 times the employee’s typical hourly rate.

Direct Expenses:

Direct expenses will be invoiced to the client and a handling charge of 15% may be added.

Sample direct expenses include, but are not limited to the following:
• travel expenses • sub-consultant services • agency fees • delivery/copy services • mileage (per IRS rates) • other direct expenses Invoicing and Interest Charges:

Invoices are submitted monthly on an accrued cost basis. A finance charge of 1.5% per month may be assessed on all balances that are thirty days past due.

WALLACE GROUP
2024 Standard Billing Rates
EXHIBIT "A"
pg. 20 of 26
DocuSign Envelope ID: 9876664C-491A-4B7A-84DB-ACA7FB0763FB

WALLACE GROUP Page 1 of 6
Exhibit B
Standard Terms and Conditions
Wallace Group Proposal No. PP24-
Contract Agreement Date:

CLIENT: CLIENT NAME
Street, City, California Zip
CONSULTANT: WALLACE GROUP, A CALIFORNIA CORPORATION
612 Clarion Court, San Luis Obispo, California 93401
CLIENT and CONSULTANT agree that these Standard Terms and Conditions, comprised of pages 1 through 6, and the associated written Scope of Services and budget constitute the entire Agreement between the CLIENT and the CONSULTANT.

It supersedes all prior communications, understandings and agreements, whether oral or written. Amendments to this Agreement must be in writing and signed by both the CLIENT and the CONSULTANT.

ARTICLE 1. GENERAL PROVISIONS

1.1 Preamble
This Agreement is based upon a mutual obligation of good faith and fair dealing between the parties in its performance and enforcement. Accordingly, the CLIENT and the CONSULTANT, with a positive commitment to honesty and integrity, agree to the following:

That each will function within the laws and statutes that apply to its duties and responsibilities; that each will assist in the other’s performance; that each will avoid hindering the other’s performance; that each will work diligently to fulfill its obligations; and each will cooperate in the common endeavor of the contract.

1.2 Governing Law and Jurisdiction
The CLIENT and the CONSULTANT agree that this Agreement and any legal actions concerning its validity, interpretation and performance shall be governed by the laws of the State of California. It is further agreed that any legal action between the CLIENT and the CONSULTANT arising out of this Agreement or the performance of the services shall be brought in a court of competent jurisdiction in San Luis Obispo, California.

1.3 Precedence of Conditions
Should any conflict exist between the terms herein and the form of any purchase order or confirmation issued, the Terms and Conditions herein shall prevail in the absence of CONSULTANT’S express written consent of others conditions.

1.4 Standard of Care
In providing services under this Agreement, the CONSULTANT will endeavor to perform said services in a manner consistent with that degree of care and skill ordinarily exercised by members of the same profession currently practicing under similar circumstances.

1.5 Corporate Protection
It is intended by the parties to this Agreement that the CONSULTANT’S services in connection with the Project shall not subject the CONSULTANT’S individual employees, officers or directors to any personal legal exposure for the risks associated with this Project. Therefore, and notwithstanding anything to the contrary contained herein, the CLIENT agrees that as the CLIENT’S sole and exclusive remedy, any claim, demand or suit shall be directed and/or asserted only against the CONSULTANT, a California corporation, and not against any of the CONSULTANT’S individual employees, officers or directors.

1.6 Confidentiality
The CONSULTANT agrees to keep confidential and not to disclose to any person or entity, other than the CONSULTANT’S employees, Subconsultants and the general Contractor and Subcontractors, if appropriate, any data or information not previously known to and generated by the CONSULTANT or furnished to the CONSULTANT and marked CONFIDENTIAL by the CLIENT. These provisions shall not apply to information in whatever form that is in the public domain, nor shall it restrict the CONSULTANT from giving notices required by law or complying with an order to provide information or data when such order is issued by a court, administrative agency or other legitimate authority, or if disclosure is reasonably necessary for the CONSULTANT to defend itself from any legal action or claim.

1.7 Third-Party Beneficiaries
Nothing contained in this Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the CLIENT or the CONSULTANT. The CONSULTANT’S services under this Agreement are being performed solely for the CLIENT’S benefit, and no other party or entity shall have any claim against the CONSULTANT because of this Agreement or the performance or nonperformance of services hereunder. The CLIENT and CONSULTANT agree to require a similar provision in all contracts with Contractors, Subcontractors, Subconsultants, vendors and other entities involved in this Project to carry out the intent of this provision.

EXHIBIT "A"
pg. 21 of 26
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WALLACE GROUP Page 2 of 6

1.8 Timeliness of Performance
The CLIENT and CONSULTANT are aware that many factors outside the CONSULTANT’S control may affect the CONSULTANT’S ability to complete the services to be provided under this Agreement. The CONSULTANT will perform these services with reasonable diligence and expediency consistent with sound professional practices.

1.9 Severability
Any term or provision of this Agreement found to be invalid under any applicable statute or rule of law shall be deemed omitted and the remainder of this Agreement shall remain in full force and effect.

1.10 Survival
Notwithstanding completion or termination of this Agreement for any reason, all rights, duties and obligations of the parties to this Agreement shall survive such completion or termination and remain in full force and effect until fulfilled.

1.11 Statutes of Repose and Limitation
All legal causes of action between the parties to this Agreement shall accrue and any applicable statutes of repose or limitation shall begin to run not later than the date of Substantial Completion. If the act or failure to act complained of occurs after the date of Substantial Completion, then the date of final completion shall be used, but in no event shall any statute of repose or limitation begin to run any later than the date the CONSULTANT’S services are completed or terminated.

1.12 Defects in Service
The CLIENT shall promptly report to the CONSULTANT any defects or suspected defects in the CONSULTANT’S services of which the CLIENT becomes aware, so that the CONSULTANT may take measures to minimize the consequences of such a defect. The CLIENT further agrees to impose a similar notification requirement on all Contractors in its CLIENT/Contractor contract and shall require all subcontracts at any level to contain a like requirement. Failure by the CLIENT and the CLIENT’S Contractors or Subcontractors to notify the CONSULTANT shall relieve the CONSULTANT of the costs or remedying the defects above the sum such remedy would have cost had prompt notification been given when such defects were first discovered.

1.13 Jobsite Safety
Neither the professional activities of the CONSULTANT, nor the presence of the CONSULTANT or its employees or Subconsultants at a construction/project site, shall relieve the General Contractor of its obligations, duties and responsibilities including, but not limited to, constructions means, methods, sequence, techniques or procedures necessary for performing, superintending and coordinating the Work in accordance with contract documents and any health or safety precautions required by any regulatory agencies. The CONSULTANT and its personnel have no authority to exercise any control over any construction Contractor or its employees in connection with their work or any health or safety programs or procedures. The CLIENT agrees that the General Contractor shall be solely responsible for jobsite safety, and warrants that this intent shall be carried out in the CLIENT’S contract with the General Contractor. The CLIENT also agrees that the CLIENT, the CONSULTANT and the CONSULTANT’S Subconsultants shall be indemnified by the General Contractor and shall be made additional insured under the General Contractor’s policies of general liability insurance.

1.14 Assignment: Subcontracting
Neither CLIENT nor CONSULTANT shall assign its interest in this agreement without the written consent of the other.

CONSULTANT may not subcontract any portion of the work to be performed hereunder without such consent.

1.15 Force Majeure
Any delay or default in the performance of any obligation of CONSULTANT under this agreement resulting from any cause(s) beyond CONSULTANT'S reasonable control shall not be deemed a breach of this agreement. The occurrence of any such event shall suspend the obligations of CONSULTANT as long as performance is delayed or prevented thereby, and the fees due hereunder shall be equitably adjusted.

1.16 Disputes
(a) Not withstanding any other provision of this Agreement and except for the provisions of (b) and (c), if a dispute arises regarding CONSULTANT'S fees pursuant to this contract, and if the fee dispute cannot be settled by discussions between CLIENT and CONSULTANT, both the CLIENT and CONSULTANT agree to attempt to settle the fee dispute by mediation through the American Arbitration Association (or other mediation service) before recourse to arbitration. If mediation does not resolve the fee dispute, such dispute shall be settled by binding arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof.
(b) Subdivision (a) does not preclude or limit CONSULTANT’S right to elect to file an action for collection of fees if the amount in dispute is within the jurisdiction of the small claims court. (c) Subdivision (a) does not preclude or limit CONSULTANT’S right to elect to perfect or enforce applicable mechanics lien remedies.

1.17 Attorneys’ Fees
In the event of any litigation arising from or related to this Agreement or the services provided under this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs incurred, including staff time, court costs, attorneys’ fees and all other related expenses in such litigation.

EXHIBIT "A"
pg. 22 of 26
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1.18 Services by CLIENT
CLIENT shall pay all other charges not specifically covered by the terms of this agreement, unless specifically included in the Scope of Services. The CLIENT shall furnish, at the CLIENT’S expense, all information required by this Agreement. The CONSULTANT may use such information, requirements, reports, data, surveys and instructions in performing its services and is entitled to rely upon the accuracy and completeness thereof.

1.19 Retention
If any portion of CONSULTANT’S fee is held in retention, such amount shall be released within thirty days after invoicing for completion of corresponding services. Interest shall be paid at the rate of 1.5% per month on any retention amounts not paid within this thirty-day period.

ARTICLE 2. DEFINITIONS

2.1 Burdened Labor Costs
Burdened labor costs shown on the Standard Billing Rates include payroll taxes, worker’s compensation insurance, and other overhead costs applicable to the typical standard of care.

2.2 Direct Expenses
Expenditures made by the CONSULTANT, its employees or its Subconsultants in the interest of the Project. Applicable reimbursable direct expenses are defined on the Standard Billing Rates.

ARTICLE 3. COMPENSATION

3.1 Payment Due
Invoices shall be submitted by the CONSULTANT monthly, are due upon presentation and shall be considered past due if not paid in full within thirty (30) days of the invoice date.

3.2 Interest
If payment in full is not received by the CONSULTANT within thirty (30) calendar days of the invoice date, the invoices shall bear interest at one-and-one-half (1.5) percent (or the maximum rate allowable by law, whichever is less) of the past due amount per month, which shall be calculated from the invoice due date. Payment thereafter shall first be applied to accrued interest and then to the unpaid principal.

3.3 Collection Costs
If the CLIENT fails to make payments when due and the CONSULTANT incurs any costs in order to collect overdue sums from the CLIENT, the CLIENT agrees that all such collection costs incurred shall immediately become due and payable to the CONSULTANT. Collection costs shall include, without limitation, legal fees, collection agency fees and expenses, court costs, collection bonds and reasonable CONSULTANT staff costs at Standard Billing Rates for the CONSULTANT’S time spent in efforts to collect. This obligation of the CLIENT to pay the CONSULTANT’S collection costs shall survive the term of this Agreement or any earlier termination by either party.

3.4 Termination or Suspension of Services
This agreement may be terminated or suspended by either party effective seven (7) days from the date of written notice, or if the CLIENT suspends the work for three (3) months. Upon receipt of a notice of termination or suspension, CONSULTANT will stop or suspend its work and provide same direction for the work of all its Subcontractors and suppliers. Failure of CLIENT to make payments when due shall be cause for suspension of services or ultimately, termination, unless and until CONSULTANT has been paid in full all amounts due for services, expenses and other approved related charges. CONSULTANT shall have no liability whatsoever to the CLIENT for any costs or damages as a result of such suspension or termination caused by any breach of this Agreement by the CLIENT. Upon payment-in-full by the CLIENT, CONSULTANT shall resume services under this Agreement, and the time schedule and compensation shall be equitably adjusted to compensate for the period of suspension plus any reasonable time and expense necessary for the CONSULTANT to resume performance.

3.5 Retention Discounts
Payment of invoices shall not be subject to any discounts or retention by the CLIENT, unless agreed to in writing by the CONSULTANT. Payment to the CONSULTANT for services rendered and expenses incurred shall be due and payable regardless of any subsequent suspension or termination of this Agreement by either party.

3.6 Satisfaction with Services
Payment of any invoice by the CLIENT to the CONSULTANT shall be taken to mean that the CLIENT is satisfied with the CONSULTANT’S services to the date of payment and is not aware of any deficiencies in those services.

3.7 Disputed Invoices
If the CLIENT objects to any portion of any invoice, the CLIENT shall so notify the CONSULTANT in writing within ten (10) days of receipt of the invoice. The CLIENT shall identify in writing the specific cause of the disagreement and the amount in dispute and shall pay that portion of the invoice not in dispute in accordance with the other payment terms of this Agreement. Any dispute over invoiced amounts due which cannot be resolved within thirty (30) calendar days after presentation of invoice by direct negotiation between the parties shall be resolved within forty-five (45) calendar days in EXHIBIT "A"
pg. 23 of 26
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accordance with the Dispute Resolution provision of this Agreement. Interest as stated above shall be paid by the CLIENT on all disputed invoice amounts that are subsequently resolved in the CONSULTANT’S favor and shall be calculated on the unpaid balance from the invoice date.

3.8 Payments to the CONSULTANT
Payments to the CONSULTANT shall not be withheld, postponed or made contingent on the construction, completion or success of the project or upon receipt by the CLIENT of offsetting reimbursement or credit from other parties who may have caused additional services or expenses. No withholdings, deductions or offsets shall be made from the CONSULTANT’S compensation for any reason unless the CONSULTANT has been found to be legally liable for such amounts.

3.9 Advance Payment: Withholding Work Product
CONSULTANT reserves the right to require payment in advance for work estimated to be done during a given billing period.

CONSULTANT, without any liability to CLIENT, reserves the right to withhold any services and work products herein contemplated pending payment of CLIENT'S outstanding indebtedness or advance payment as required by CONSULTANT.

Where work is performed on a reimbursable basis, budget may be increased by amendment to complete the Scope of Services. CONSULTANT is not obligated to provide services in excess of the authorized budget.

ARTICLE 4. SERVICES, ADDITIONAL SERVICES, AND AMENDMENTS

4.1 Definitions
Services and work products not expressly included with those specified in this agreement, as determined by CONSULTANT, are not covered by this agreement. Such services and work products will be provided only upon compliance with the procedures set forth in Article 4.5 of this Agreement.

4.2 Services During Construction
Any construction inspection or testing provided by CONSULTANT is for the purpose of determining the Contractor's compliance with the functional provisions of the project specifications only. CONSULTANT in no way guarantees or insures Contractor's work nor assumes responsibility for methods or appliances used by the Contractor for job site safety or for Contractor's compliance with laws and regulations. CLIENT agrees that in accordance with generally accepted construction practices the construction Contractor will be required to assume sole and complete responsibility for job site conditions during the course of construction of the project including safety of all persons and property and that this responsibility shall be continuous and not be limited to normal working hours.

4.3 Soil Testing
CONSULTANT makes no representations concerning soil conditions, and is not responsible for any liability that may arise out of the making or failure to make soil surveys, or sub-surface soil tests, or general soil testing. It is the CLIENT’S responsibility to obtain a soils report upon which report CONSULTANT can rely.

4.4 Opinion of Probable Construction Costs
In providing opinions of probable construction cost, the CLIENT understands that the CONSULTANT has no control over cost or availability of labor, equipment or materials, or over market conditions or the Contractor’s method of pricing, and that the CONSULTANT’S opinions of probable construction costs are made on the basis of the CONSULTANT’S professional judgment and experience. CONSULTANT makes no warranty, express or implied, that bids or negotiated cost of the Work will not vary from the CONSULTANT’S opinion of probable construction cost.

4.5 Additional Services
Additional services or work products requiring an adjustment of CONSULTANT'S original estimated budget or fixed fee will be provided at CLIENT'S request upon execution of a written amendment to this agreement expressly referring to the same and signed by both parties.

ARTICLE 5. TERMINATION OF AGREEMENT

5.1 Due to Default
This agreement may be terminated by either party upon seven (7) days written notice should the other party fail to substantially perform in accordance with this agreement through no fault of the party initiating the termination.

5.2 Without Cause
This agreement may be terminated by CLIENT upon at least fourteen (14) days written notice to CONSULTANT in the event that the project is abandoned.

5.3 Termination Adjustment: Payment
If this agreement is terminated through no fault of the CONSULTANT, CONSULTANT shall be paid for services performed and costs incurred to the termination notice date, including reimbursable expenses due, plus an additional amount not to exceed ten percent (10%) of charges incurred to the termination notice date to cover services to orderly close the work and prepare project files and documentation, plus any additional direct expenses incurred by CONSULTANT including but limited to cancellation fees or charges. CONSULTANT will use reasonable efforts to minimize such additional charges.

EXHIBIT "A"
pg. 24 of 26
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ARTICLE 6. LIMITATION OF LIABILITY: WAIVER: WARRANTY

6.1 Limitation of Liability
In recognition of the relative risks and benefits of the project to both the CLIENT and the CONSULTANT, the risks have been allocated such that the CLIENT agrees, to the fullest extent permitted by law, to limit the liability of the CONSULTANT to the CLIENT for any and all claims, losses, costs, damages of any nature whatsoever or claims expenses from any cause or causes, including attorneys’ fees and costs and expert-witness fees and costs, so that the total aggregate liability of the CONSULTANT to the CLIENT shall not exceed $50,000.00, or the CONSULTANT’S total fee for services rendered on this project, whichever is greater. It is intended that this limitation apply to any and all liability or cause of action however alleged or arising, unless otherwise prohibited by law.

6.2 Contractor and Subcontractor Claims
The CLIENT further agrees, to the fullest extent permitted by law, to limit the liability of the CONSULTANT and the CONSULTANT’s officers, directors, partners, employees and Subconsultants to all construction Contractors and Subcontractors on the Project for any and all claims, losses, damages of any nature whatsoever or claims expenses from any cause or causes, including attorneys’ fees and costs and expert witness fees and costs, so that the total aggregate liability of the CONSULTANT and the CONSULTANT’s Subconsultants to all those named shall not exceed $50,000.00, or the CONSULTANT’s total fee for services rendered on this Project, whichever is greater. It is intended that this limitation apply to any and all liability or cause of action however alleged or arising, unless otherwise prohibited by law.

6.3 Warranty
CONSULTANT makes no warranty, either express or implied, as to CONSULTANT’S findings, recommendations, specifications, or professional advice, except that the work was performed pursuant to generally accepted standards of practice in effect at the time of performance.

If, during the term of this Agreement, circumstances or conditions that were not originally contemplated by or known to the CONSULTANT are revealed, to the extent that they affect the Scope of Services, compensation, schedule, allocation of risks or other material terms of this Agreement, the CONSULTANT may call for renegotiation of appropriate portions of this Agreement. The CONSULTANT shall notify the CLIENT of the changed conditions necessitating renegotiation, and the CONSULTANT and the CLIENT shall promptly and in good faith enter into renegotiations of this Agreement to address the changed conditions. If terms cannot be agreed to, the parties agree that either party has the absolute right to terminate this Agreement, in accordance with the Termination Provision hereof.

If the Scope of Services pursuant to this agreement does not include on-site construction review, construction management, or other construction supervision for this project, or if subsequent to this agreement CLIENT retains other persons or entities to provide such services, CLIENT acknowledges that such services will be performed by others and CLIENT will defend, indemnify and hold CONSULTANT harmless from any and all claims arising from or resulting from the performance of such services by other persons or entities except claims caused by the sole negligence or willful misconduct of CONSULTANT; and from any and all claims arising from or resulting from clarifications, adjustments, modifications, discrepancies or other changes necessary to reflect changed field or other conditions, except claims caused by the sole negligence or willful misconduct of CONSULTANT.

6.4 Interpretation
Limitations on liability, waivers and indemnities in this Agreement are business understandings between the parties and shall apply to all legal theories of recovery, including breach of contract or warranty, breach of fiduciary responsibility, tort (including negligence), strict or statutory liability, or any other cause of action, provided that these limitations on liability, waivers and indemnities will not apply to any losses or damages that may be found by a trier of fact to have been caused by the CONSULTANT’S sole or gross negligence or the CONSULTANT’S willful misconduct. The parties also agree that the CLIENT will not seek damages in excess of the contractually agreed-upon limitations directly or indirectly through suites against other parties who may join the CONSULTANT as a third-party defendant. “Parties” means the CLIENT and the CONSULTANT, and their officers, directors, partners, employees, Subcontractors and Subconsultants.

6.5 Delays
The CLIENT agrees that the CONSULTANT is not responsible for damages arising directly or indirectly from any delays for causes beyond the CONSULTANT’S control. For purposes of this Agreement, such causes include, but are not limited to, strikes or other labor disputes; severe weather disruptions or other natural disasters; fires, riots, war or other emergencies or acts of God; failure of any government agency to act in a timely manner; failure of performance by the CLIENT of the CLIENT’S Contractors or CONSULTANT’S; or discovery of any hazardous substances or differing site conditions.

ARTICLE 7. HAZARDOUS WASTE MATERIALS

7.1 Liability
CONSULTANT hereby states and CLIENT hereby acknowledges that CONSULTANT has no professional liability insurance for claims arising out of the performance of or failure to perform professional services, including, but not limited to the preparation of reports, designs, drawings and specifications, related to the investigation, detection, abatement, replacement, use or specification, or removal of products, materials or processes containing substances including, but not limited to asbestos, toxic or hazardous waste, PCBs, combustible gases and materials, petroleum or radioactive materials (as each of these is defined in applicable federal statues) or any other substances under any conditions and in such quantities as EXHIBIT "A"
pg. 25 of 26
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would pose a substantial danger to persons or property exposed to such substances at or near the Project site. Accordingly, the CLIENT hereby agrees to bring no claim for negligence, breach of contract indemnity or otherwise against the CONSULTANT, its principals, employees, and agents if such claim, in any way, would involve the CONSULTANT’S services for the investigation, detection, abatement, replacement, use or specification, or removal of products, materials or processes containing asbestos, asbestos cement pipe, and/or hazardous waste materials. CLIENT further agrees to defend, indemnify and hold harmless CONSULTANT, its officers, directors, principals, employees and agents from any asbestos and/or hazardous waste material related claims that may be brought by third parties as a result of the services provided by the CONSULTANT pursuant to this agreement except claims caused by the sole negligence or willful misconduct of the CONSULTANT.

ARTICLE 8. OWNERSHIP AND REUSE OF DOCUMENTS

8.1 CONSULTANT Ownership
All original papers, documents, drawings, electronic media and other work product of CONSULTANT, and copies thereof, produced by CONSULTANT pursuant to this agreement shall remain the property of CONSULTANT and may be used by CONSULTANT without the consent of CLIENT. Upon request and payment of the costs involved, CLIENT is entitled to a copy of all papers, documents and drawings provided CLIENT'S account is paid current.

8.2 Document Reuse
In the event the CLIENT, the CLIENT’S Contractors or Subcontractors, or anyone for whom the CLIENT is legally liable makes or permits to be made any changes to any reports, plans specifications or other construction documents prepared by the CONSULTANT without obtaining the CONSULTANT’S prior written consent, the CLIENT shall assume full responsibility for the results of such changes. Therefore the CLIENT agrees to waive any claim against the CONSULTANT and to release the CONSULTANT from any liability arising directly or indirectly from such changes. In addition, the CLIENT agrees, to the fullest extent permitted by law, to indemnify and hold harmless the CONSULTANT from any damages, liabilities or costs, including reasonable attorneys’ fees and costs of defense, arising from such changes. In addition, the CLIENT agrees to include in any contracts for construction appropriate language that prohibits the Contractor or any Subcontractors of any tier from making any changes or modifications to the CONSULTANT’S construction documents without the prior written approval of the CONSULTANT and further requires the Contractor to indemnify both the CONSULTANT and the CLIENT from any liability or cost arising from such changes made without proper authorization.

8.3 Electronic Media Alteration and Reuse
Because CADD information stored in electronic form can be modified by other parties, intentionally or otherwise, without notice or indication of said modifications, CONSULTANT reserves the right to remove all indicia of its ownership and/or involvement in the material from each electronic medium not held in its possession. CLIENT shall retain copies of the work performed by CONSULTANT in CADD form only for information and use by CLIENT for the specific purpose for which CONSULTANT was engaged. Said materials shall not be used by CLIENT, or transferred to any other party, for use in other projects, additions to the current project, or any other purpose for which the material was not strictly intended by CONSULTANT without CONSULTANT'S express written permission. Unauthorized modification or reuse of the materials shall be at CLIENT'S sole risk, and CLIENT agrees to defend, indemnify, and hold CONSULTANT harmless, from all claims, injuries, damages, losses, expenses, and attorney's fees arising out of the unauthorized modification or use of these materials.

EXHIBIT "A"
pg. 26 of 26
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5/23/2024 5:16:36 PM
C:\Program Files\eSCRIBE\TEMP\17163260847\17163260847,,,Report - Award Bid Biosolids Hauling 2025.docx Agenda Report
MEETING DATE: Tuesday, May 28, 2024
TO: City Council
FROM: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG

WASTEWATER DIVISION MANAGER SMITH
SUBJECT: AWARD A ONE-YEAR BIOSOLIDS LOADING,
TRANSPORTATION, AND LAND APPLICATION PROJECT, NO.

WW-24-04-QB, IN THE AMOUNT OF $646,020.00 TO SYNAGROWWT, INC.

RECOMMENDED ACTION:

Adopt a resolution approving a contract with Synagro-WWT, Inc. for the annual Biosolids Loading, Transportation, and Land Application Project, No. WW-24-04-QB, in the amount of $646,020.00; and authorizing the City Manager to execute said contract.

BACKGROUND:
“Biosolids” is the term for the organic solid residual material produced by wastewater treatment processes, sometimes also referred to as sewage sludge. Biosolids are produced daily, stockpiled year-round, and hauled off for land application once per year in late summer or early fall. Contracts for biosolids loading, transportation, and land application must be established annually.

DISCUSSION:

Biosolids is the term used for organic solids that have been removed from wastewater and stabilized through a two-stage process: anaerobic digestion and dewatering. This two-stage process is required to comply with Federal and State regulations. Dewatered biosolids are further dried by spreading and cultivating on drying beds at the Wastewater Treatment Facility year-round.

Approximately 6,000 tons of biosolids are stockpiled on site and must be removed annually.

The biosolids are typically removed in September through October each year to take advantage of the dry weather for drying and avoiding the negative impacts of the wet winter weather.

The project, WW-24-04-QB, was advertised on OpenGov on March 21, 2024, and bids were opened on April 25, 2024, at 11:00 A.M on the OpenGov portal. One bid was received for the project as follows:

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C:\Program Files\eSCRIBE\TEMP\17163260847\17163260847,,,Report - Award Bid Biosolids Hauling 2025.docx Supplier Estimate
Quantity
Unit of
Measure
Unit
Cost Total
SyangroWWT, Inc. 6,000 Wet ton $107.67 $646,020.00
Staff reviewed the bid received and recommend that the City Council award the contract to the responsive bidder, Syangro-WWT, Inc.

STRATEGIC PLAN:

This contract is consistent with Strategic Plan Priority:
2 – Infrastructure & Environment
FINANCIAL IMPACT:

Funds for this contract will be available in the adopted FY 2024-2025 Wastewater Utility Enterprise budget, account code 0710-530-7361.

ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 052824 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE AWARDING BID TO SYNAGRO-WWT, INC., A

CORPORATION, FOR THE BIOSOLIDS LOADING, TRANSPORTATION, AND LAND APPLICATION PROJECT, NO. WW-24-04-QB IN THE
AMOUNT OF $646,020.00; AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT ($646,020.00 WILL BE FUNDED FROM THE WASTEWATER ENTERPRISE FUND [710-530-7361])
WHEREAS, § 3-5.400 of the Municipal code provides that Purchases of equipment, supplies, and nonprofessional services estimated to be more than One Hundred Thousand and no/100ths ($100,000.00) Dollars shall be by written contract with the lowest responsible, responsive bidder pursuant to the procedures prescribed in article 4; and
WHEREAS, § 3-5.410 provides that a Notice Inviting Bids (Notice) or requesting proposals should include certain specified information including, but not limited to, the time and place assigned for opening of sealed bids and that the Notice be published; and
WHEREAS, the bids received for the Biosolids Loading, Transportation, and Land Application Project, No. WW-24-04-QB were opened on the OpenGov portal on April 25, 2024, at 11:00 A.M., and later tabulated by the Purchasing Officer for the consideration of the City Manager and submission to the City Council; and WHEREAS, one bid was received from Synagro-WWT, Inc.; and WHEREAS, the City Manager has recommended that the bid from Synagro-WWT, Inc., for the Biosolids Loading, Transportation, and Land Application Project, No. WW-24- 04-QB, in an amount not to exceed $646,020.00, be accepted as the lowest responsible, responsive bid.

Reso No. (CM)
Meeting Date: 052824 2

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. This action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(5), in that adopting a Resolution awarding contract to Synagro-WWT, Inc., for Loading, Transportation, and Land Application Project, No. WW-24-04-QB does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and if a “project,” is exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

2. The Council awards a contract to Synagro-WWT, Inc., for Loading, Transportation, and Land Application Project, No. WW-24-04-QB, in an amount not to exceed $646,020.00.

3. That the Contract between the City of Watsonville and Synagro-WWT, Inc., a corporation, in the form on file in the Office of the City Clerk, is hereby approved.

4. The City Manager is hereby authorized and directed to execute said contract with Synagro-WWT, Inc. for and on behalf of the City of Watsonville with minor revisions and amendments that may be approved by the City Manager and the City Attorney.
**********************************

5/22/2024 1:38:15 PM
C:\Program Files\eSCRIBE\TEMP\13381091584\13381091584,,,Carollo Design Agreement Chromium 6.docx Agenda Report
MEETING DATE: Tuesday, May 28, 2024
TO: City Council
FROM: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG

ASSISTANT PUBLIC WORKS & UTILITIES DIRECTOR GREEN
SUBJECT: APPROVE CONSULTANT AGREEMENT WITH CAROLLO
ENGINEERS, INC. FOR THE HEXAVALENT CHROMIUM

TREATMENT PRELIMINARY DESIGN REPORT FOR AN AMOUNT
NOT TO EXCEED $746,558; AND APPROVE A BUDGET

APPROPRIATION FROM THE WATER ENTERPRISE FUND IN
THE AMOUNT OF $498,558
RECOMMENDED ACTION:

Adopt a resolution awarding a contract to Carollo Engineers, Inc. to prepare the Hexavalent Chromium Treatment Preliminary Design Report, in an amount not to exceed $746,558; authorizing the City Manager to execute said contract; and approving a budget appropriation in the amount of $496,558 from the Water Enterprise Fund.

BACKGROUND:

The State Water Resources Control Board (SWRCB) set a Maximum Contaminant Level (MCL) of 10 micrograms per liter in 2014; the SWRCB invalidated this amount in 2017. In April 2024, the SWRCB again adopted the MCL; this new MCL is anticipated to go into effect in October of this year. The implementation period for water distribution systems the size of the City is two years. Therefore, the City will need to resume design and a treatment implementation plant for Hexavalent Chromium treatment in several of the City’s drinking water wells.

DISCUSSION:

The City of Watsonville supplies and distributes potable water for drinking, fire protection and supplemental agricultural irrigation to its customers within both City limits and unincorporated areas of Santa Cruz County.

On April 17, 2024, the State Water Resources Control Board adopted a Hexavalent Chromium (Cr VI) Maximum Contaminant Level (MCL) of 10 micrograms per liter. The MCL is anticipated to be finalized by October 1, 2024. Previously, Carollo Engineers, Inc. (Carollo) and Corona Environmental Consulting, LLC (Corona) completed preliminary design and began final design for Cr VI treatment at most City wells when the Cr VI MCL was set in 2014. In 2017, the SWRCB invalidated the MCL for administrative reasons. In

5/22/2024 1:38:15 PM
C:\Program Files\eSCRIBE\TEMP\13381091584\13381091584,,,Carollo Design Agreement Chromium 6.docx 2018, the City put the final design project on hold pending SWRCB’s formal adoption of a new MCL.

With the SWRCB’s adoption of a new MCL, the City should complete design and planning of the treatment project, in order to meet the anticipated two-year period for water agencies to comply with the new MCL. The City selected Carollo Engineers, Inc. from an On-Call Water and Wastewater Design Services Request for Qualifications (RFQ) issued in July 2023. Carollo was selected as most qualified to perform these services based on their knowledge of Cr VI treatment and their previous experience with the City.

The Hexavalent Chromium Treatment Preliminary Design Report will reevaluate, confirm, and update the preliminary design criteria for treating the City’s affected potable groundwater extraction wells for hexavalent chromium (CrVI). The City’s wells proposed to be evaluated are:
 Wells 2 and 3 (Pressure Zone 1)
 Wells 7, 10, and 15 (Pressure Zone 1)
 Wells 14, 17, 18 (Pressure Zone 2)
Previously, the wells affected by the 2014 MCL were Wells 2, 3, 7, 14, 17, and 19.

Various treatment and blending alternatives were evaluated during preliminary design and concurrent pilot studies, which identified treatment options with Reduction Coagulation Filtration (RCF) technology and blending.

This report will provide the City with an updated preliminary design construction cost estimate that will allow the City to seek funding. The estimated construction cost in 2017 was $22 million. The preliminary design report will provide sufficient technical information in a format that can be utilized to pursue construction funding for the construction of Cr VI treatment facilities and related site improvements, blending facilities, and related pipeline infrastructure improvements such as new raw water supply pipelines, sewer upgrades, and/or distribution system pipeline upgrades.

Staff, therefore, recommends that a contract be awarded to Carollo Engineers, Inc. in the amount of $746,558 and that an appropriation be made in the amount of $496,558 from the Water Enterprise Fund to cover the full cost of the contract.

STRATEGIC PLAN:

This action is consistent with the following Strategic Plan goal:
2-Infrastructure & Environment
FINANCIAL IMPACT:

This project is planned in the Water Enterprise Fund capital improvement budget. The total cost of the preliminary design report is $746,558. There is currently $250,000 budgeted for this project in account 913-7855-14346, requiring a budget appropriation from the Water Enterprise Fund of $496,558 to cover the difference.

5/22/2024 1:38:15 PM
C:\Program Files\eSCRIBE\TEMP\13381091584\13381091584,,,Carollo Design Agreement Chromium 6.docx ALTERNATIVE ACTION:

No reasonable alternatives are known at this time.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 011122 1
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE AWARDING PROFESSIONAL SERVICES CONTRACT
TO CAROLLO ENGINEERS, INC., A CORPORATION, FOR

HEXAVALENT CHROMIUM TREATMENT PRELIMINARY DESIGN
REPORT, IN AN AMOUNT NOT TO EXCEED $746,558; AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE SAME; AND
AUTHORIZING A BUDGET APPROPRIATION OF $498,558 FROM THE WATER ENTERPRISE FUND [0720]
WHEREAS, § 3-5.500 of the Watsonville Municipal Code provides that an RFP or RFQ process is found to be an effective and efficient way to procure professional services and procurement of professional services shall be based on proposals solicited from capable professionals and be evaluated based on a combination of factors including education, training, experience and demonstrated competence and professional qualifications necessary for the satisfactory performance of the services required; and
WHEREAS, § 3-5.540 of the Municipal Code provides that contracts for professional services estimated to cost more than One Hundred Thousand and no/100ths ($100,000.00) Dollars must be awarded by the Council, and that the selection will be based on demonstrated competence and the education, training and experience and professional qualifications necessary for the satisfactory performance of the services required, that cost will not be the only basis for selection, and must use a qualificationsbased selection process as described in subdivision (a) of § 45271 of the California Government Code and negotiated as described in § 4528; and WHEREAS, the City issued a Request for Qualifications (RFQ) in July 2023, asking for qualified consultants to assist the City with On-Call Water and Wastewater

1 All references to section numbers are to the California Government Code.

Reso No. (CM)
Meeting Date: 2
Design Services; and
WHEREAS, the deadline for submittal of Request for Statement of Qualifications was August 2023; and
WHEREAS, the City Manager has recommended that the proposal from Carollo Engineers, Inc., in an amount not to exceed $746,558, be accepted as the best response.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. This action is exempt from the requirements of the California Environmental Quality Act (CEQA) because the award of the contract for a preliminary design report does not qualify as a “project” as defined by CEQA Guidelines Section 15378. Awarding the contract for design services, which are akin to a study, has no potential for direct or indirect physical changes in the environment and is merely an administrative activity of the government. (14 Cal. Code Regs. § 15378(a), (b)(5).) Even if awarding the contract was a “project,” it would be exempt from CEQA review under CEQA Guidelines Section 15262 because it involves only a feasibility or planning study for possible future actions which the City has not approved, adopted, or funded, and awarding the contract has no legally binding effect on later activities (14 Cal. Code Regs. § 15262.), and under the “common sense” exemption because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment. (14 Cal. Code Regs. § 15061(b)(3).)

2. The Council awards a contract to Carollo Engineers, Inc., for design services for the Hexavalent Chromium Treatment Preliminary Design Report, in an amount not to exceed $746,558.

Reso No. (CM)
Meeting Date: 3

3. That the Contract for Consultant Services between the City of Watsonville and Carollo Engineers, Inc., a copy of which is attached hereto and incorporated herein by this reference, is hereby approved.

4. The City Manager is hereby authorized and directed to execute said contract for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.

5. That the budget appropriation of $498,558 from the Water Enterprise Fund [0720] balance into budget account 913-7855-14346 is hereby authorized. **************************************

Consultant Contract Architects or Engineers w/employees Page 1 of 9

CONTRACT FOR CONSULTANT SERVICES BETWEEN
THE CITY OF WATSONVILLE AND CAROLLO ENGINEERS, INC.

THIS CONTRACT, is made and entered into this ______________________, by and between the City of Watsonville, a municipal corporation, hereinafter called “City,” and Carollo Engineers, Inc. hereinafter called "Consultant."

WITNESSETH
WHEREAS, the City needs to obtain certain professional, technical and/or specialized services of an independent contractor to assist the City in the most economical manner; and
WHEREAS, Consultant has the requisite skill, training, qualifications, and experience to render such services called for under this Contract to City.

THE PARTIES HEREBY AGREE AS FOLLOWS:

SECTION 1. SCOPE OF SERVICES. Consultant shall perform those services as specified in detail in Exhibit "A," entitled "SCOPE OF SERVICES" which is attached hereto and incorporated herein.

SECTION 2. TERM OF CONTRACT. The term of this Contract shall be from May 28, 2024 to June 30, 2026, inclusive.

SECTION 3. SCHEDULE OF PERFORMANCE. The services of Consultant are to be completed according to the schedule set out in Exhibit "B," entitled "SCHEDULE OF PERFORMANCE," which is attached hereto and incorporated herein. Consultant will diligently proceed with the agreed Scope of Services and will provide such services in a timely manner in accordance with the "SCHEDULE OF PERFORMANCE." SECTION 4. COMPENSATION. The compensation to be paid to Consultant including both payment for professional services and reimbursable expenses as well as the rate and schedule of payment are set out in Exhibit "C" entitled "COMPENSATION," which is attached hereto and incorporated herein.

SECTION 5. METHOD OF PAYMENT. Except as otherwise provided in Exhibit "C," each month, Consultant shall furnish to the City a statement of the work performed for compensation during the preceding month. Such statement shall also include a detailed record of the month's actual reimbursable expenditures.

SECTION 6. INDEPENDENT CONSULTANT. It is understood and agreed that Consultant, in the performance of the work and services agreed to be performed by Consultant, shall act as and be an independent Consultant and not an agent or employee of City, and as an independent Consultant, shall obtain no rights to retirement

Consultant Contract Architects or Engineers w/employees Page 2 of 9 benefits or other benefits which accrue to City's employees, and Consultant hereby expressly waives any claim it may have to any such rights.

SECTION 7. ASSIGNABILITY. Consultant shall not assign or transfer any interest in this Contract nor the performance of any of Consultant's obligations hereunder, without the prior written consent of City, and any attempt by Consultant to so assign this Contract or any rights, duties or obligations arising hereunder shall be void and of no effect.

SECTION 8. INDEMNIFICATION.

To the full extent permitted by law (subject to the limitations of Civil Code section 2782.8 for any “design professional services” performed under this Contract), Consultant will indemnify, hold harmless, release and defend the City (including its officers, elected or appointed officials, employees, volunteers or agents) from and against any and all liability or claims (including actions, demands, damages, injuries, settlements, losses or costs [including legal costs and attorney’s fees])(collectively “Liability”) of any nature, to the extent arising out of, pertaining to, or relating to Consultant’s negligence, recklessness, or willful misconduct in the performance of this Contract. In no event shall the cost to defend charged to the Consultant exceed the Consultant’s proportionate percentage of fault. Consultant’s indemnification obligations under this Contract are not limited by any limitations of any insurance held by Consultant, including, but not limited to, workers compensation insurance.

SECTION 9. INSURANCE.

A. Errors and Omissions Insurance. Consultant shall obtain and maintain in full force throughout the term of this Contract a professional liability insurance policy (Errors and Omissions), in a company authorized to issue such insurance in the State of California, with limits of liability of not less than One Million Dollars ($1,000,000.00) to cover all professional services rendered pursuant to this Contract.

B. Auto and Commercial General Liability Insurance. Consultant shall also maintain in full force and effect for the term of this Contract, automobile insurance and commercial general liability insurance with an insurance carrier satisfactory to City, which insurance shall include protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from any actual occurrence arising out of the performance of this Contract. The amounts of insurance shall not be less than the following:
(1) Commercial general liability insurance, or equivalent form, with a combined single limit of not less than $500,000.00 per occurrence. If such insurance contains a general aggregate limit, such limit shall apply separately to each project Consultant performs for City. Such insurance shall (a) name City, its appointed and elected officials, and its employees as insureds; and (b) be primary with respect to insurance or self-insurance programs maintained by City and (c) contain standard separation of insured's provisions.

Consultant Contract Architects or Engineers w/employees Page 3 of 9 (2) Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $500,000.00 per occurrence. Such insurance shall include coverage for owned, hired and non-owned automobiles.

C. Workers’ Compensation Insurance. In accordance with the provisions of Section 3700 of the Labor Code, Consultant shall be insured against liability for Workers’ Compensation or undertake self-insurance. Consultant agrees to comply with such provisions before commencing performance of any work under this Contract.

D. Proof of Insurance to City before Notice to Proceed to Work. Consultant shall satisfactorily provide certificates and endorsements of insurance to the City Clerk before Notice to Proceed to Work of this Contract will be issued. Certificates and policies shall state that the policy shall not be canceled or reduced in coverage without thirty (30) days written notice to City. Approval of insurance by City shall not relieve or decrease the extent to which Consultant may be held responsible for payment of damages resulting from services or operations performed pursuant to this Contract.

Consultant shall not perform any work under this Contract until Consultant has obtained the required insurance and until the required certificates have been submitted to the City and approved by the City Attorney. If Consultant fails or refuses to produce or maintain the insurance required by these provisions, or fails or refuses to furnish City required proof that insurance has been procured and is in force and paid for, City shall have the right at City's election to forthwith terminate this Contract immediately without any financial or contractual obligation to the City. As a result of such termination, the City reserves the right to employ another consultant to complete the project.

E. Written notice. Contractor shall provide immediate written notice if (1) any insurance policy required by this Contract is terminated; (2) any policy limit is reduced; (3) or any deductible or self insured retention is increased.

SECTION 10. NON-DISCRIMINATION. Consultant shall not discriminate, in any way, against any person on the basis of age, sex, race, color, creed, national origin or disability in connection with or related to the performance of this Contract.

SECTION 11. TERMINATION.

A. City and Consultant shall have the right to terminate this Contract, without cause, by giving not less than ten (10) days written notice of termination.

B. If Consultant fails to perform any of its material obligations under this Contract, in addition to all other remedies provided by law, City may terminate this Contract immediately upon written notice.

C. The City Manager is empowered to terminate this Contract on behalf of City.

D. In the event of termination, Consultant shall deliver to City copies of all work papers, schedules, reports and other work performed by Consultant and upon receipt thereof, Consultant shall be paid in full for services performed and reimbursable expenses incurred to the date of termination.

Consultant Contract Architects or Engineers w/employees Page 4 of 9 SECTION 12. COMPLIANCE WITH LAWS. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments. Consultant shall obtain and maintain a City of Watsonville business license during the term of this Contract.

SECTION 13. GOVERNING LAW. City and Consultant agree that the law governing this Contract shall be that of the State of California. Any suit brought by either party against the other arising out of the performance of this Contract shall be filed and maintained in the Municipal or Superior Court of the County of Santa Cruz.

SECTION 14. PRIOR CONTRACTS AND AMENDMENTS. This Contract represents the entire understanding of the parties as to those matters contained herein.

No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. This Contract may only be modified by a written amendment.

SECTION 15. CONFIDENTIAL INFORMATION. All data, documents, discussions or other information developed or received by or for Consultant in performance of this Contract are confidential and not to be disclosed to any person except as authorized by the City Manager or his designee, or as required by law.

SECTION 16. OWNERSHIP OF MATERIALS. All reports, documents or other materials developed or received by Consultant or any other person engaged directly by Consultant to perform the services required hereunder shall be and remain the property of City without restriction or limitation upon their use.

SECTION 17. COVENANT AGAINST CONTINGENT FEES. The Consultant covenants that Consultant has not employed or retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure the Contract, and that Consultant has not paid or agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fees, commissions, percentage, brokerage fee, gift, or any other consideration contingent on or resulting from the award or making of this Contract, for breach or violation of this covenant, the City shall have the right to annul this Contract without liability, or in its discretion, to deduct from the Contract price or consideration or otherwise recover, the full amount of such fee, commission, percentage fee, gift, or contingency.

SECTION 18. WAIVER. Consultant agrees that waiver by City or any one or more of the conditions of performance under this Contract shall not be construed as waiver of any other condition of performance under this Contract.

SECTION 19. CONFLICT OF INTEREST.

A. A Consultant shall avoid all conflict of interest or appearance of conflict of interest in performance of this Contract. Consultant shall file a disclosure statement, if required by City Council Resolution, which shall be filed within thirty (30) days from the effective date of this Contract or such Resolution, as applicable.

Consultant Contract Architects or Engineers w/employees Page 5 of 9 B. No member, officer, or employee of the City, during their tenure, or for one (1) year thereafter, shall have any interest, direct or indirect, in this Contract or the proceeds thereof and Consultant agrees not to allow, permit, grant, transfer, or otherwise do anything which will result in such member, officer, or employee of the City from having such interest.

SECTION 20. AUDIT BOOKS AND RECORDS. Consultant shall make available to City, its authorized agents, officers and employees, for examination any and all ledgers and books of account, invoices, vouchers, canceled checks and other records or documents evidencing or related to the expenditures and disbursements charged to the City, and shall furnish to City, its authorized agents and employees, such other evidence or information as City may require with respect to any such expense or disbursement charged by Consultant.

SECTION 21. NOTICES. All notices shall be personally served or mailed, postage prepaid, to the following addresses, or to such other address as may be designated by written notice by the parties:

CITY
City Clerk’s Office
275 Main Street, Suite 400
Watsonville, CA 95076
(831) 768-3040

CONSULTANT
Carollo Engineers, Inc.
2795 Mitchell Drive
Walnut Creek, CA 94598
(925) 932-1710
SECTION 22. EXHIBITS:

Exhibit A: Scope of Services
Exhibit B: Schedule of Performance
Exhibit C: Compensation
///
///
///
///

Consultant Contract Architects or Engineers w/employees Page 6 of 9 WITNESS THE EXECUTION HEREOF, on the day and year first hereinabove written.

CITY

CITY OF WATSONVILLE
BY ______________________________
Tamara Vides, City Manager Pro
Tempore

ATTEST:

BY ______________________________
Irwin I. Ortiz, City Clerk
APPROVED AS TO FORM:

BY ______________________________
Samantha W. Zutler, City Attorney

CONSULTANT

BY_________________________________
Elaine L. Simmons, Associate VicePresident
BY_________________________________
Anne Prudhel, Senior Vice President

Consultant Contract Architects or Engineers w/employees Page 7 of 9 EXHIBIT "A"

SCOPE OF SERVICES
The scope of services is as follows:

Please see Attachment A for Scope of Services.

Consultant Contract Architects or Engineers w/employees Page 8 of 9 EXHIBIT “B”

SCHEDULE OF PERFORMANCE
Services shall commence immediately upon execution of this Contract. All services performed under the provisions of this Contract shall be completed in accordance with the following schedule: May 28, 2024 to June 30, 2026.

Consultant Contract Architects or Engineers w/employees Page 9 of 9 EXHIBIT “C”

COMPENSATION
a. Total Compensation. The total obligation of City under this Contract shall not exceed _____$746,558_______.
b. Basis for Payment. Payment(s) to Consultant for services performed under this Contract shall be made as follows and shall include payment for reimbursable expenses:
c. Payment Request. Consultant shall submit a request for payment for services on a monthly basis by letter to Director, or said Director's designated representative. Such request for payment shall cover the preceding monthly period during the term hereof, shall note the City's purchase order number for this Contract, shall contain a detailed listing of the total number of items or tasks or hours for which payment is requested, the individual dates on which such services were rendered, and invoices for reimbursable expenses, if any. Upon receipt in the Office of Director of said payment request, Director shall cause payment to be initiated to Consultant for appropriate compensation.

2795 Mitchell Drive
Walnut Creek, California 94598
P 925-932-1710
carollo.com
May 17, 2024
Ms. Danielle Green, P.E.

Assistant Director of Public Works
City of Watsonville
250 Main Street
Watsonville, CA 95076
Subject: Scope and Fee Proposal for Hexavalent Chromium Well Treatment Improvements Project Phase 1, Preliminary Design Reevaluation
Dear: Ms. Green:

Thank you for requesting this scope and fee proposal from Carollo Engineers, Inc. (Carollo) and our subconsultants: Corona Environmental Consulting, LLC (Corona) for process evaluation and Beecher Engineering, Inc. (BEI) for electrical, instrumentation and controls evaluation. This proposal is for Phase 1, Preliminary Design Reevaluation services for the City’s Hexavalent Chromium Well Treatment Improvements Project.

Please feel free to contact us if you have any questions or require additional information on this submittal.

Sincerely,
CAROLLO ENGINEERS, INC.

Elaine Simmons, P.E. Scott Weddle, P.E.

Proposal Contact/Assistant Project Manager Project Manager [email protected] [email protected]

ATTACHMENT A

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx

EXHIBIT A

SCOPE OF SERVICES

CITY OF WATSONVILLE
(City)
AND
CAROLLO ENGINEERS, INC.
(Consultant)
Hexavalent Chromium Well Treatment Improvements Project Phase
, Preliminary Design Reevaluation
(Project)

PROJECT INTRODUCTION
This Scope of Services is to define the Consultant's scope, schedule, and budget for furnishing preliminary design services for the Hexavalent Chromium Well Treatment Improvements Project – Phase
, Preliminary Design Reevaluation (Project). The City of Watsonville (City) supplies and distributes potable water for drinking, fire protection and supplemental agricultural irrigation to its customers within both City limits and in unincorporated areas of Santa Cruz County. The purpose of the Project is to reevaluate, confirm, and update the preliminary design criteria for treating the City’s affected potable groundwater extraction wells for hexavalent chromium (Cr,). On April ,   , the
State Water Resources Control Board adopted a Cr, Maximum Contaminant Level (MCL) of  micrograms per liter and the MCL is anticipated to be finalized by October ,   .

Previously, Carollo Engineers, Inc. (Carollo) and Corona Environmental Consulting, LLC (Corona) completed preliminary design and began final design for Cr, treatment at selected City wells when the Cr, MCL was originally set in  
. After the MCL was invalidated in   for administrative reasons, the City put the final design project on hold in approximately June  , pending new promulgation of the MCL. For this project, current raw water quality, current water production data, and the updated   Urban Water Management Plan future water demands must be used as the project basis.

Additionally since  , the City has developed a new water distribution system hydraulic model, completed various planning projects including a water system condition assessment and Capital Improvements Plan update, as well as implemented infrastructure improvements such as sewer and water piping upgrades, a new well, and plans for a new Zone  tank. Hence, updated preliminary design information is needed to establish the Cr, treatment approach to achieving regulatory compliance while also incorporating the City’s current infrastructure needs.

The City’s wells proposed to be evaluated with the current Project are:
• Wells  and ; (Pressure Zone )
• Wells ,  (if needed) and < (Pressure Zone )
• Wells 
, , = and if needed, new Well
on Roache Road (Pressure Zone )
• Well > (Pressure Zone ;)

May ,  

pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx The previous evaluations and deliverables that are currently scoped for reevaluation and updating are summarized below. Previously, the wells affected by the   Cr, MCL were Wells , ;, , 
,  and =.

Various treatment and blending alternatives were evaluated during preliminary design and concurrent pilot studies, which resulted in a Draft Preliminary Design Report (June  ,) and Draft Engineering Report (November  ,). By early final design (circa April  ), Cr, treatment with Reduction Coagulation Filtration (RCF) technology was anticipated to be located at or near Wells , ;,  , , and
=. Additionally, blending of Wells 
,  and = in lieu of RCF was being considered during final design.

Blending of Well  water with Well < water was recommended during final design in lieu of RCF treatment, while blending water from Wells ,  and < had originally been considered during preliminary design. Evaluation of a new compliance approach for Well >, located at the City’s Corralitos Filter Plant, has been added to the current project scope (Optional Services) due to recently detected Cr, levels.

The current project scope will be conducted through the tasks as summarized in Table  and detailed in the following task descriptions. The effort will be conducted by Carollo and Carollo’s Subconsultants including Corona for process evaluation and Beecher Engineering, Inc. (BEI) for electrical, instrumentation and controls evaluation. Additional Subconsultants for geotechnical evaluation, surveying, CEQA analysis and environmental permitting, funding support, architecture, or public outreach support are not currently anticipated to be needed in Phase  but could be engaged later as Optional Services in Phase  or deferred to Phase  Final Design.

The primary objective of Phase  Preliminary Design Reevaluation services is to provide the City with an updated preliminary design construction cost estimate for budgeting and funding application support purposes. Additionally, the culmination of Phase  is to provide sufficient technical information within a collated project deliverable format, for e.g. State Water Boards Drinking Water State Revolving Fund (DWSRF) Technical Application’s Engineering Report, for the City to pursue project funding for construction of Cr, treatment facilities and related site improvements, blending facilities, and related pipeline infrastructure improvements such as new raw water supply pipelines, sewer upgrades, and/or distribution system pipeline upgrades.

Engineering services for the overall project are proposed to be executed in two phases. This scope of services is for Phase  of the project (preliminary design). A scope of work for the next phase of final design is anticipated to be prepared as requested by the City following completion of Phase  tasks.

Consultant/Subconsultant Services
Table . Summary of proposed Consultant services for Phase  Preliminary Design Reevaluation Task No. Task Name Services by
Consultant/Subconsultant
 Project Administration Carollo, Corona, BEI
 Background Data Collection and Review Carollo, Corona, BEI ; Treatment Backwash Impacts Evaluation Carollo, Corona

Blending Studies Carollo, Corona
< Update Design Criteria for Affected Wells Carollo, Corona, BEI , Preliminary Design Report, Figures, and Cost Estimate Carollo, Corona, BEI  Funding Application Report Carollo

May ,  

pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx = Optional Services Carollo, As-Needed Subconsultants
TASK
– PROJECT ADMINISTRATION
Task
.
Project Coordination and Monitoring
This task provides project coordination and monitoring between City and Consultant team members, including Subconsultants over the anticipated project schedule duration of eight months from City Notice-to-Proceed. This task includes preparation of monthly progress reports, regular correspondence with project team members, and review of work progress for quality and completion. Monthly progress reports (submitted with monthly invoices) will include the following:
• Description of work completed in reporting period.
• Percentage complete to date by task.
• Project schedule and budget status.
• Deliverable status.
• Key decisions made and major upcoming action items.
• Potential project issues.

Task
.2 Kickoff and Project Progress Meetings
This task includes the following project meetings:
• One Kickoff Meeting with Consultant and Subconsultants to introduce key project team members, review key City decisions during the  <-  preliminary and early final design phases, review current project scope of work and milestones schedule, and discuss background information request (in Watsonville for up to four hours). • One site visit with Consultant and Subconsultants (in Watsonville for up to four hours and may be combined with kickoff meeting).
• One follow-up site visit with Consultant and Subconsultants (in Watsonville for up to eight hours over two days).
• One findings and recommendations review meeting for the Well > site evaluation with relevant project team members (assumed virtual for two hours). • Three findings and recommendations review meetings for each of the Treatment Backwash Capacity Evaluation, Treatment Residuals on WWTP Operations Evaluation, and Blending Studies Evaluation (with relevant project team members; assumed virtual for one hour each). • One preliminary design alternatives and site plan review meeting with Consultant and relevant Subconsultants (in Watsonville for up to four hours).
• One findings and recommendations review meeting prior to submitting the Draft Preliminary Design Report with Consultant and relevant Subconsultants (assumed virtual for two hours). • Four additional progress or coordination meetings with City staff and other project stakeholders as-needed (assumed virtual for one hour each). • The final schedule for all meetings and project milestones will be established after Notice to Proceed (NTP) and presented at the Kickoff Meeting.

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx Task
.
-
.2 Assumptions
• Task  meetings are in addition to any meetings and/or site visits described in later tasks of this scope.
• City staff will provide Project site access to the Consultant or Subconsultant for any site visits.

Site access coordination should occur at least two weeks in advance of any planned field activities.
• This task does not include attendance at any public meetings nor preparation of public presentation slides, City staff reports, or other public outreach documents to support any public meetings such as updates to City Council. It is assumed that City staff will prepare these materials.
• Consultant will perform the base scope of services over an assumed eight-month duration upon Notice-to-Proceed (Phase  completion assumed by Spring  <).

Task
.
-
.2 Deliverables
• Monthly invoices, monthly progress reports, and schedule updates. • Meeting agendas and minutes.
• Decision item, action item, and comment log updates.

TASK 2 – BACKGROUND DATA COLLECTION AND REVIEW
Task 2.
Historical Data Collection and Review
This task provides for requesting, collecting, and reviewing relevant historical information from the City. Carollo will submit a list to the City requesting available relevant reports and other data and information to be provided by the City for use in this Project, including but not limited to:
• Water distribution system historical operational data and records from the last 15 years including water quality and water production data for all scoped wells • 2015 and 2020 Urban Water Management Plan
• General Plan/Zoning information
• Information on recently added or planned developments • Water distribution system and sewer system GIS database and other background GIS database shapefiles
• Improvement plans/as-built drawings for recently constructed/planned water or sewer facilities that are not reflected in the City’s GIS database
• Design standards or design manuals
• Recent construction unit costs for pipelines, wells, tanks, and other relevant infrastructure • Other relevant data and reports
Carollo and Subconsultants will develop a data collection table that will be discussed at or before the Kickoff Meeting. Carollo will update the data collection table as items are received and will update the City on outstanding items remaining for the project.

May ,  
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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx Task 2.2 Water Quality Sampling and Analysis
Subconsultant (Corona) will compile and review all available water quality data for up to ten groundwater wells: Wells 2, 3, 4 (Roache Road), 7, 10, 14, 15, 17, 18 and 19. Previously in Corona’s Cr6 treatment evaluation with the City, Wells 3, 14, 17, and 18 were identified for reduction coagulation filtration treatment, while an existing manganese filtration system was proposed to be retrofitted at Well 2. Blending strategies were previously recommended as the Cr6 compliance approach for Wells 7, 10, and 15.

This task will include a review of water quality parameters that may impact the performance of the selected treatment process, as well as a review of co-occurring contaminants that may be impacted by future regulations (e.g. arsenic, manganese, PFAS, strontium, vanadium). Data gaps discovered during the review process will be communicated to the City and a sampling plan will be developed to address these gaps in information. Results from this task will be used to validate the previously developed treatment alternatives evaluations. If the presence of additional contaminants (such as PFAS) will impact the previously developed treatment alternatives, additional evaluations of alternatives may be required which are not currently scoped but could be completed through Optional Services.

To better understand the seasonal variability and bolster the water quality data for each well, it is recommended that, in the interim, each impacted well is sampled monthly at a minimum for water quality parameters that may impact the selected treatment technology’s efficacy.

Task 2.6 Water Production Review
Consultant with support from Subconsultant (Corona) will review current and historical (last < years) water production data for each scoped well including minimum and maximum well capacity (based on manufacturer’s pump curves or similar data), average utilization history, and Average Day and Maximum Day Demands. Current data will be compared with the previously determined existing and future system demand projections and system improvement recommendations as evaluated in the August  > and November   water system evaluation reports (by Carollo) to develop or confirm anticipated water production needs for each scoped well by  < and  ;<. Considerations such as seasonal variations in water system demands, drought years, and significant future system demand changes anticipated (such as with the PV Water College Lake Project) will be included if sufficient background information is available. At a minimum, new project facilities will be sized for existing Maximum Day Demands to meet the DWSRF project eligibility requirements.

Task 2.
-2.6 Assumptions
• City staff will provide Project site access to the Consultant or Subconsultant for any site visits and sampling activities. Site access coordination should occur at least two weeks in advance of any planned field activities.
• City staff will provide Consultant or Subconsultant with documentation of right-of-entry, facility operator notifications, and facility operator contact information at least one week in advance of any planned field activities.
• Subconsultant will provide City staff with a Final Water Quality Sampling Plan within one month from NTP and water quality analysis results will be provided to Consultant and Subconsultant within two weeks of each sampling period. Water quality sampling and analysis costs will be paid by the City.

May ,  
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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx • Subconsultant will maintain a Health and Safety Plan for the field activities which will be discussed with each person entering the site during field activities. • Relevant data and future system demand assumptions from the August  > and November   water system evaluation reports will be carried through to this project. New planning assumptions for City growth and development will not be updated in the water distribution system model to be used for this task or Task
– Blending Studies.
• In addition to water production review of each scoped well, water production for Zones  and ; may need to be evaluated holistically to understand the system demands for future tasks such as blending studies. If additional wells beyond those currently scoped are impacted, their evaluation may be completed through Optional Services.
• Hydrogeological considerations will not be evaluated in Phase  services.

Task 2.
-2.6 Deliverables
• Water Quality Sampling Plan, Draft and Final, in PDF.

TASK 6 – TREATMENT BACKWASH IMPACTS EVALUATION
Task 6.
Revise Sewer Discharge Analysis Technical Memorandum This task provides for analysis of adequate sewer capacity for discharge of RCF treatment process backwash flows at relevant well sites. The Draft Sewer Discharge Analysis Technical Memorandum (October  <) summarized the findings of the analysis at Wells ;,  , and . For the  < project,
Carollo used the City’s sewer hydraulic model, which had previously not been updated since  , and performed localized updates near relevant well sites. Currently, the City is in the process of updating the System Evaluation and Capacity Assurance Plan (SECAP) including creating a new sewer hydraulic model. This task includes coordination with the City’s SECAP project consultant, VW Housen, assuming that both project schedules will be implemented in parallel.

For this project, the following effort is anticipated:
• Request and review background information provided by City and VW Housen. VW Housen will perform a high-level preliminary review of flow data to identify any modeled flow changes in the vicinities of scoped wells from the   SECAP study to present day. • Coordinate with City and VW Housen to understand updated SECAP details related with any flow changes, sewer system infrastructure changes, available sewer system capacity at specific locations, etc.
• Once the treatment process backwash flows for scoped wells are determined by Corona and Carollo, Carollo will provide the information to VW Housen to run in the new sewer hydraulic model. VW Housen will confirm available instantaneous sewer capacity at or near Wells ;, ,  ,
 and = and make preliminary design recommendations for any City sewer improvements beyond the well site property boundaries (tie-in locations, sizing, length, and alignments) using the new sewer hydraulic model.
• Carollo will review and update the  < TM recommendations for any as-needed sewer improvements (tie-in locations, sizing, length, and alignments), using the modeling analysis and sewer improvement recommendations provided by VW Housen. • If the delivery of the SECAP modeling analysis results and sewer improvement recommendations by VW Housen cannot align with Carollo’s Sewer Discharge Analysis TM task schedule (currently anticipated to be received by July ;,   ), and preliminary sewer capacity

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx appears to be insufficient at scoped well sites, the City will be asked to decide whether placeholder assumptions for sewer improvements or backwash holding tanks should be included on a site-by-site basis, with considerations for site constraints, site impacts (electrical loads, geotechnical and O&M considerations) and economic impacts. Alternatively, the City could request that Carollo update portions of the City’s   sewer model based on known major changes to the system as part of Optional Services or else defer this task until the City’s new sewer hydraulic model is available and fully calibrated for Carollo’s use; both of these alternative scenarios could require a change in scope, budget and/or schedule. • Carollo will prepare a new technical memorandum summarizing the alternatives, recommendations or placeholder recommendations, and updated figures (sewer alignments or backwash tank site layouts).
• Carollo will prepare planning-level cost estimates for sewer improvement or backwash tank recommendations and/or placeholder recommendations.
• Carollo will support up to five Teams meeting with VW Housen staff (estimated one hour each). • Carollo will support up to two Teams meeting with City staff (estimated up to two hours each).

Task 6.
Assumptions
• Sewer discharge analysis and updating of recommendations for Wells ,  , < and > by
Carollo is not included but could be added with Optional Services. Blending for Wells  and < was previously recommended over onsite Cr, treatment. However, water quality changes such as presence of PFAS (Well  ) and higher levels of Cr, (Well <) may warrant another mitigation approach to be determined during the concurrent Blending Studies task. If onsite treatment is proposed, Wells
,  , < and/or > may also require additional instantaneous sewer capacity model analysis and updating of recommendations.
• An evaluation of a backwash tank at Well > is not currently included but could be added with Optional Services, pending City’s authorization of Optional Services Task =.

Well > Site
Evaluation. Adding a backwash tank evaluation at Well > could require a change in scope, budget and/or schedule.
• Since the City continues to discharge existing iron and manganese treatment backwash into the sewer at Well , sewer capacity evaluation is not anticipated to be needed there. • VW Housen will conduct two modeling runs per well site (Average Dry Weather Flow and Peak Wet Weather Flow).
• If the City decides to include placeholder assumptions for sewer improvements or backwash holding tanks with the Sewer Discharge Analysis TM, these assumptions will need to be revisited during Final Design using the fully calibrated and latest SECAP model. This would add design effort as well as potentially increase or decrease subsequent project cost estimates. • All data, modeling analysis findings, and sewer improvement recommendations provided by VW Housen will be packaged as a deliverable to the City for incorporation into the Sewer Discharge Analysis TM. Carollo will not provide QA/QC review or oversight of any services provided by VW Housen.
• Any sewer hydraulic modeling runs by Carollo whether in the   model or the latest SECAP model are not currently included but could be added as Optional Services.

Task 6.
Deliverables
• Sewer Discharge Analysis Technical Memorandum, Draft and Final, in PDF.

Task 6.2 Revise Evaluation of Treatment Residuals Technical Memorandum

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx This task provides for analysis of the impact of RCF and/or SBA-IX treatment residuals on operations at the City’s Wastewater Treatment Plant (WWTP) and the City/PV Water’s downstream Recycled Water Facility (RWF). Both processes would produce residuals that might adversely impact the downstream wastewater treatment process, treated effluent quality, and/or disposal of wastewater treatment residuals. The purpose of this task is to update a paper-evaluation of the potential impact of specific RCF and/or IX treatment residuals (iron, chromium, sodium, and chloride) on WWTP and RWF operations. The previous Project Memorandum, “Evaluation of Impact of Treatment Residuals on WWTP Operations (June 2015),” concluded that RCF backwash discharged to sewers would approximately double the mass of iron loading to the WWTP. That evaluation concluded that iron remaining in the secondary effluent could cause increased scaling of the RWF disk filters and on the quartz sleeves of the UV disinfection system.

Recently, the City/PV Water’s RWF Reliability Improvements Project included an operational assessment of the treatment processes at the RWF including the disk filters and the UV disinfection system. The assessment indicated ongoing concerns of rapid disk filter fouling and UV disinfection quartz sleeve fouling, potentially due to iron levels added at the WWTP.

This evaluation will update the anticipated additional iron levels discharged to the WWTP from the revised RCF treatment discharge recommendations. If SBA-IX is also a recommended treatment alternative after evaluation in earlier tasks, the anticipated impacts of its treatment residuals on the WWTP and RWF will also be evaluated. For residuals that are determined to have a potential adverse impact, options to mitigate the impact will be reviewed. If mitigation is not feasible, alternative disposal methods for treatment residuals will be outlined. For example, operational and maintenance considerations for mitigating iron loading to downstream processes, including reducing WWTP ferric chloride dosage and increased frequency of maintenance, could be discussed.

For this project, the following effort is anticipated:
• Review data from Corona regarding the quantity and chemical composition (iron, chromium, sodium, and chloride) of the RCF and SBA-IX (if applicable) treatment residuals that are planned to be discharged to the sanitary sewer system.
• Request and review operational information and data provided by the City related with WWTP effluent discharge, WWTP biosolids disposal, and RWF operations. • Evaluate the anticipated impacts of treatment residuals on the WWTP and RWF. • Meet with wastewater treatment plant and recycled water staff to review treatment residual concentrations, flows, and potential impacts (assumed virtually,  hours). • Review the options to mitigate any adverse impact.
• Prepare a technical memorandum that summarizes the findings of this evaluation.

Task 6.2 Assumptions
• The City will provide the information needed for this analysis – no additional laboratory analysis is included in this scope of work.

Task 6.2 Deliverables
• Evaluation of Impact of Treatment Residuals on WWTP and RWF Operations Technical Memorandum, Draft and Final, in PDF.

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx TASK ; – BLENDING STUDIES
Task ;.
Evaluation of Blending Options
This task provides for analysis of blending options at relevant well sites. The Draft Preliminary Design Report (June  ,) considered both raw water and finished water blending options, and ultimately recommended finished water blending of Wells ,  , and < to lower the Cr, concentration below the MCL. In addition, new water transmission mains were proposed from Wells  and < to Well , where finished water would be blended and piped into the distribution system. During final design by May  , the blending approach was updated to blend finished water from Well  and Well < (without Well  ) prior to entry into the distribution system.

Additionally, during Preliminary Design, RCF treatment was proposed at Well  (either at a remote
location or at the existing well site), Well , and Well =. During final design by May  , blending of Wells 
and = in lieu of RCF treatment at Well  was also being considered but not finalized.

Since  , the City has developed a new water distribution system hydraulic model as summarized in the Draft Hydraulic Model Development, Calibration, and System Analysis Report (August  >) and has used the new model for further analysis associated with existing and future demands. The City has continued with infrastructure improvements including system-wide upgrades and proposed upgrades to wells, distribution system piping and finished water storage reservoirs.

For this project, the following effort is anticipated:
• Request and review background information provided by City. • Update the water distribution system hydraulic model based on system changes that have occurred since  > or are expected to occur in the near term. • Establish blending option criteria with City staff including blending target concentration goal, raw water bypass versus finished water blending options, operational and maintenance considerations, and risks in the future should Cr, concentrations increase. • Evaluate blending options for Cr, compliance at Well  (with or without Wells  and/or <).

Confirm whether blending or Well  treatment is recommended. • Evaluate blending options for Zone  (Wells 
, , = in conjunction with the City’s new Well

at Roache Road and in conjunction with the existing Airport Reservoir and proposed . MG Zone  Reservoir B). Confirm whether RCF treatment will be required at Wells  , , and/or =.
• Evaluate blending options for Zone ; (Well >). Confirm whether treatment (RCF or other technology) will be required at Well >.
• Update the planning-level design criteria of the recommended improvements. • Prepare planning-level site layout and/or pipeline alignment figures. • Prepare a new technical memorandum summarizing the alternatives, recommendations, and updated figures.
• Prepare planning-level cost estimates for the recommended alternatives. • Support up to two Teams meeting with City staff (estimated up to two hours each).

Task ;.
Assumptions
• Up to three modeling runs per well site (Average Day Demand, Peak Hour Demand, and Source Trace)

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx • Additional hydraulic model analysis to support preliminary design could be completed through the Optional Services task.

Task ;.
Deliverables
• Blending Options Analysis Technical Memorandum, Draft and Final, in PDF. • Updated hydraulic model files of the water distribution system.

TASK > – UPDATE DESIGN CRITERIA AT AFFECTED WELLS
Task >.
Confirm Cr@ Mitigation Strategy at Affected Wells This task combines the results and conclusions developed from Tasks - to confirm the recommended
well locations for individual well treatment, centralized treatment, and/or blending options. Well sites requiring pipeline improvements will include alignment alternatives. The considered and recommended project alternatives previously developed in the June  , Preliminary Design Report and/or carried through early final design (April  ) will be compared with the most currently viable mitigation options at the well sites in order to confirm and/or update the recommended Cr, mitigation strategy at each affected well.

Task >.2 Incorporate Relevant Site-Specific Recommendations After Task <. is complete and the City has selected the appropriate mitigation strategy at each affected well site, additional site improvements relevant to each affected well site will be considered for incorporation. For example, additional site-specific recommendations from the Water Master Plan or project needs identified by City staff such as upgrades to obsolete electrical and instrumentation equipment or flood proofing at high flood-risk sites can be identified and prioritized with input by City staff for incorporation into the improvements scope.

Task >.6 Confirm Design Criteria Assumptions
After Task <. is complete, design criteria developed for treatment and site improvements will be confirmed and documented. Categories of design criteria to be developed for each well include:
• Treatment and blending goal
• Type and rating for outdoor vs indoor equipment
• Operational redundancy required
• Equipment design useful life or remaining useful life (for existing equipment) • Operational flexibility and contingency planning
• Chemical consumption, storage and delivery
• Treatment backwash sizing criteria
• Chlorine gas safety
Task >.
->.6 Assumptions
• Level of design criteria to be developed for each site is intended to provide sufficient level of detail for the City to decide on the recommended alternative, final facility configuration, and major components for improvements. Once the City has reviewed and made these decisions, the basis of design will be documented in two deliverables to avoid changes in concept, configuration, and design criteria during Phase  Final Design.

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx Task >.
->.6 Deliverables
• Basis of Design Report for Cr, Mitigation, Draft and Final, in PDF. • Basis of Design Report for Site Improvements, Draft and Final, in PDF.

TASK @ – PRELIMINARY DESIGN REPORT, FIGURES AND COST ESTIMATE Task @.
Preliminary Design Report
This task is to prepare a new, updated Preliminary Design Report (PDR) following the general outline of the June  , Draft PDR. For each affected well site, the following discussions and recommendations will be summarized:
• Existing facilities on site
• Conceptual treatment and/or blending facilities layout alternatives with figures and a description of recommended equipment and facility upgrades • Recommended design criteria
• Discussion of facility hydraulics
• Discussion of backwash waste system alternatives and recommendations, if applicable • Summary of power supply and control recommendations for new equipment • Preliminary construction cost estimate summary tables (in conjunction with Task ,.;) The report will also include sections to address:
• Project implementation schedule
• Basis of construction cost estimate
• Initial consideration of construction sequencing, staging, access, and temporary facility requirements during construction. Planning-level considerations for maintaining acceptable levels of water service throughout construction duration including providing water service from upper pressure zones will be developed with City staff. • Initial consideration of schedule constraints such as funding deadlines (provided by the City), long lead-time permit requirements, and long lead-time equipment delivery requirements.

Task @.2 Preliminary Design Figures
This task is to prepare a new, updated set of Preliminary Design Figures for affected well sites following the Drawing List of the June  , Draft Preliminary Design Figures. The following figures are anticipated to be updated (Wells , ;, 
, , and =) and/or newly prepared (Well >):
• Cover sheet
• Site overview sheets: ;D rendering of recommended facilities using SketchUp • Site plan of recommended facilities using Computer Aided Design and Drafting (CADD) • Mechanical plan and sections of recommended facilities (approximately ; % design) using CADD
• Electrical single-line diagram of recommended facilities using CADD • Process flow diagram of recommended facilities and mechanical appurtenances using CADD Task @.6 Preliminary Design Construction Cost Estimate
This task is to prepare a new, updated set of Preliminary Design Construction Cost Estimate sheets for the recommended alternative at each affected well site, following a similar level of detail and basis of

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx construction cost estimate prepared for the June  , Draft version (AACE Class ;). The costs for each well site will be included with the Task ,. deliverable.

Task @.
[email protected] Assumptions
• Draft versions of the deliverables will be electronically submitted to the City for review and comment.
• Once collated City comments are received, Final versions of the deliverables will be electronically submitted to the City within approximately ; days. • Assistance with property acquisition, if needed, is not included with this scope.

Task @.
[email protected] Deliverables
• Preliminary Design Report with Preliminary Design Construction Cost Estimate, Draft and Final, in PDF.
• Preliminary Design Figures, Draft and Final, in PDF.

TASK  – FUNDING APPLICATION REPORT
Task .
Funding Opportunities Identification and Preliminary Approach This task provides for initial discussions with City staff on funding support need and identifying available and relevant local, state, and/or federal funding opportunities for the proposed project. This effort will begin with a virtual Funding Opportunities Kickoff Meeting to discuss current funding options available and funding program requirements (at a high-level), application processes and timelines, past City and Consultant experiences, and proposed funding options for further consideration.

Based on input and direction from the City, the Consultant will develop a summary table of relevant funding opportunities and their timing and schedule considerations, eligibility and application considerations, and the advantages and disadvantages.

The direction of the environmental constraints analysis provided by the City including considerations for CEQA, CEQA-Plus and/or NEPA documents may also dictate the funding options for the project. If needed, services can be provided by an environmental permitting Subconsultant through Optional Services for input on considerations related with specific funding options. One Funding Opportunities Findings Meeting will be conducted with the City to review the funding options and discuss next steps for implementation.

Once the City has decided on a funding strategy, a preliminary approach including funding milestones schedule can be developed in conjunction with the overall project implementation schedule.

Task .2 Funding Application Report Development
Once Task . and Task , – Preliminary Design are complete, this task provides for completing a project report that could support a technical package of a funding application.

Task .
-.2 Assumptions
• For Task . scoping purposes,
hours have been included for an assumption of four monthly meetings (virtual,  hour each),  hours of funding eligibility research, and  hours for

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx development of a funding milestones schedule for one selected funding opportunity. Additional support can be provided through Optional Services.
• For Task . scoping purposes,
hours have been included assuming the selected report
format will follow the latest (Oct   ) DWSRF Technical Package Engineering Report guidelines, using deliverables already developed through other tasks as an update to the previously prepared Engineering Report (Nov  ,). The  , Engineering Report excluded consolidation analysis, a comprehensive response to climate change, and other updated requirements. Since it is anticipated that some of these new requirements will be prepared in close coordination with the City, any newly required sections are currently excluded from this scope but may be provided through Optional Services.
• This task excludes preparation of other documents to support funding applications. • This task excludes input from an environmental permitting Subconsultant. • Draft versions of the deliverables will be electronically submitted to the City for review and comment.
• Once collated City comments are received, Final versions of the deliverables will be electronically submitted to the City within approximately ; days.

Task .
-.2 Deliverables
• Funding Milestones Schedule, Draft and Final, in PDF. • Funding Application Report, Draft and Final, in PDF.

TASK A – OPTIONAL SERVICES
This task provides for additional, as-needed services that could be included to supplement the base scope described above.

Optional Task A.
Preliminary DDW Regulatory and Permitting Assistance This optional task provides a placeholder budget allowance for support with the DDW regulatory and permitting efforts for implementing Cr, treatment facilities. These efforts may include meetings and presentations with DDW staff or supporting the development of the DDW Compliance Plan and would commence upon approval and direction by the City on an as-needed basis during the progression of the Project.

Optional Task A.2 Additional Testing
This optional task provides for additional testing by Subconsultant (Corona) that may be required for well sites with significant changes to water quality, production, or site constraints since the initial evaluation in  <- . This may include additional water quality sampling, bench-scale studies, or pilot testing if a new treatment technology is selected. A placeholder budget allowance is currently assumed with this scope.

Additionally, on-site pilot testing of the selected treatment technology for Well > may be required if the available water quality determines that Well > is significantly different from the previously studied City wells, if there are significant constraints where issues such as waste disposal cannot be resolved, or if a technology not currently listed as a Best Available Technology (BAT) is the preferred treatment approach. Budget for comprehensive pilot testing at Well > is not currently included in this scope.

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx If additional testing is recommended, Corona will develop comprehensive test plans to address the identified gaps in knowledge and submit them to the City for comment and approval. Upon notice to proceed, Corona will complete the recommended testing with City staff support and will summarize the results and recommendations in a technical memorandum.

Optional Task A.6 Additional Support Services
This optional task provides a placeholder budget allowance for additional work that may be required during this phase that is not otherwise explicitly identified herein but could include tasks such as geotechnical evaluation of the backfilled retaining wall at Well ; site which was observed to have issues in  ,, early CEQA environmental permitting support, high hazard flood mitigation support, additional funding support, permit coordination, additional sewer or distribution system hydraulic modeling and/or other additional support services. Consultant will use the allowance only with approval from and as directed by the City on an as-needed basis during the progression of work.

Task A.
-A.6 Assumptions
• To be determined when specific tasks are directed and approved by the City. • Where optional tasks may be warranted but not approved by the City for Phase  services, placeholder recommendations and conservative budgetary cost estimates may be recommended for inclusion with Phase  deliverables.

Task A.
-A.6 Deliverables
• To be determined when specific tasks are directed and approved by the City.

Optional Task A.; Well
B Site Evaluation
This optional task provides for a detailed evaluation of the Well > site and related Well > facilities (including mechanical, electrical and instrumentation assets, chlorine gas system, standby generator, site utilities, etc.) newly added to the project scope. This task would commence only upon approval from the City. The goal of this task is to develop an understanding of the Well > site and prepare recommendations to match the level of understanding previously developed during preliminary design for the other well sites.

Task A.;.
Well
B Site Condition Evaluation
This task provides for understanding the existing site layout, components, usage and condition of the existing facility. Consultant will interview City staff to understand Well > and overall Zone ; operational and maintenance considerations and any known site constraints. As part of the background information review and site visits, Consultant will document relevant site-specific information such as available space for improvements, note the mechanical, electrical and instrumentation equipment age and any deficiencies observed at the facility, observe the visual condition of the existing building, note civil site features including site access, note if sensitive receptors are nearby and any potential for environmental impacts, etc. These features will be incorporated into other project deliverables.

Task A.;.2 Well
B Early Permitting Considerations
This task identifies any early permitting considerations that may be required for Well >, especially any long lead-time permits requiring early stakeholder engagement. Types of permits that could be

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx considered include CEQA, environmental, State Division of Drinking Water, high-hazard flood zone development, PG&E, Federal Aviation Administration, etc. Any identified early permitting considerations will be discussed with the City and incorporated into the project implementation strategy and schedule.

Task A.;.6 Well
B Treatment Alternatives Evaluation
This task provides for developing alternatives for a Cr, compliance strategy and approach for Well >.

The goal of this task is to conceptually evaluate treatment options to determine the most feasible MCL compliance alternatives to further consider. Conceptual-level site layout and/or pipeline alignment figures will be prepared and conceptual-level estimates of capital and operations and maintenance costs will be prepared for all viable alternatives to be used for subsequent decision-making by the City.

It is anticipated that the technologies listed below will be assessed by Subconsultant (Corona):
• Blending of water sources to reduce Cr6 to below the MCL • Reduction-coagulation-filtration (RCF)
• Strong base anion exchange (SBA-IX), with regenerable or non-regenerable resin • Weak base anion exchange
• Reverse osmosis
• Stannous chloride (SnCl2) reduction without filtration • Others as appropriate
This evaluation will detail non-cost considerations for each treatment technology such as expected treated water quality, treatment residuals, distribution system water quality concerns, site constraints, bypass limitations, permitting requirements, etc., which may eliminate some treatment technologies without the need for further evaluation. Detailed evaluations for the preferred treatment alternatives will then be developed and presented to the City to discuss the preferred treatment technology for design at Well 19.

Task A.; Assumptions
• Topographic and property boundary survey will not be provided for Well 19 with this task but could be considered as Phase 1 Optional Services or be deferred to Phase 2 Final Design. If topographic survey will not be completed, City-provided property site plans and/or publically available site photography and topographic will be used. • Geotechnical investigation (soil borings) will not be provided for Well 19 with this task but could be considered as additional Phase 1 Optional Services or be deferred to Phase 2 Final Design. If geotechnical investigation will not be completed, placeholders from previous project geotechnical recommendations at other nearby City facilities and/or conservative assumptions will be used for Phase 1 purposes only. During early Final Design, geotechnical investigation and design-level geotechnical recommendations will likely be required. • Structural and seismic assessment of the existing building adjacent to Well > was not previously scoped with the   Water Master Plan Project and hence only high-level observations about the building were previously included. This task will continue to include high-level observations about the building unless additional analysis is authorized by the City as part of the Optional Task.
• Well > early permitting considerations exclude any CEQA analysis or preparation of any permit applications.

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx • Conceptual-level site layout and/or pipeline alignment figures will be prepared to a similar level of detail as included with the June 2016 Preliminary Design Report. • Capital and O&M cost estimates prepared for this task will be high-level (Class 5 AACE) for Well 19 alternative comparison and decision-making purposes only.

Task A.; Deliverables
• Technical Memorandum summarizing the Well 19 treatment alternatives evaluation including detailed evaluations of the feasible treatment alternatives and the recommended alternative (by Corona; Draft and Final, in PDF).

TIME OF PERFORMANCE
Consultant and Subconsultants will perform the scope of services over an assumed =-month base scope duration upon Notice-to-Proceed. If any Optional Services are authorized, the project implementation schedule and any impacts to schedule-based task budgets (including Task  services) will need to be reevaluated.

PAYMENT
Payment to the Consultant for services performed under this Agreement shall be based on the attached fee proposal (EXHIBIT C) on a time and materials basis, at a not-to-exceed cost limit of the total base scope with the optional task if selected by the City. If Phase  services extend by amendment beyond March ;,  <, rates may be subject to adjustment based on the Consultant and Subconsultants’ fee schedules for California as of January ,  <.

ASSUMPTIONS AND CLARIFICATIONS
• DELIVERABLE USE AND REUSE. Any reuse of completed documents or use of partially completed documents without written verification or concurrence by Consultant for the specific purposes intended will be at the City’s sole risk and without liability or legal exposure to Consultant. Consultant’s instruments of service hereunder are the printed hard copy of technical memorandums and reports issued for the Project, whereas electronic media, including Computer Aided Design and Drafting (CADD) or modeling files, are tools for their preparation. As a convenience to the City, Consultant shall furnish to the City both printed hard copies and electronic media (where scoped). In the event of a conflict in their content, the printed hard copies shall take precedence over the electronic media. Because data stored in electronic media form can be altered, inadvertently, it is agreed that the City shall hold Consultant harmless from liability arising out of changes or modifications to Consultant’s data in electronic media form in the City’s possession or released to others by the City. • STANDARD OF CARE. Consultant shall perform the services required hereunder in accordance with the prevailing engineering standard of care by exercising the skill and ability ordinarily required of engineers performing the same or similar services, under the same or similar circumstances, in the State of California. Additionally, Consultant shall not be responsible for acts and decisions of third parties, including governmental agencies, other than Consultant’s Subconsultants, that impact project completion and/or success. • CITY-PROVIDED INFORMATION AND SERVICES. The City shall furnish Consultant available studies, reports and other data pertinent to Consultant’s services; obtain or authorize Consultant to obtain or provide additional reports and data as required; furnish to Consultant services of others required for the performance of Consultant’s services hereunder, and

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pw://Carollo/Documents/Client\CA\Watsonville\_Proposals\Hexavalent Chromium Treatment Facility\Docs\Watsonville Cr6 Predsg_Scope_05172024.docx Consultant shall be entitled to use and rely upon all such information and services provided by the City or others in performing Consultant’s services under this Agreement. • ACCESS. The City shall arrange for access to and make all provisions for Consultant to enter upon public and private property as required for Consultant to perform services hereunder. • ESTIMATES AND PROJECTIONS. In providing opinions of cost, financial analyses, economic feasibility projections, schedules, and quantity and/or quality estimates for potential projects, Consultant has no control over cost or price of labor and material; unknown or latent conditions of existing equipment or structures that may affect operation and maintenance costs; competitive bidding procedures and market conditions; time or quality of performance of third parties; quality, type, management, or direction of operating personnel; the way the City’s plant(s) and/or associated processes are operated and/or maintained; and other economic and operational factors that may materially affect the ultimate project elements, including, but not limited to, cost or schedule. Therefore, Consultant makes no warranty that the City’s actual project costs, financial aspects, economic feasibility, schedules, and/or quantities or quality realized will not vary from Consultant’s opinions, analyses, projections, or estimates. • THIRD PARTIES. The services to be performed by Consultant are intended solely for the benefit of the City. No person or entity not a signatory to this Agreement shall be entitled to rely on Consultant’s performance of its services hereunder, and no right to assert a claim against Consultant by assignment of indemnity rights or otherwise shall accrue to a third party as a result of this Agreement of the performance of Consultant’s services hereunder.

Corona BEI Kleinfelder
Principal-InCharge QA/QC Project Manager Assistant Project Manager Project Engineer Staff Engineer Cost Estimator Lead Structural Lead Mechanical Hydraulic Model QA/QC Hydraulic Modeler Funding Specialist Senior
Professional
Senior
Professional
Senior
Professional
Lead Project
Professional Professional Assistant Professional Project Professional Lead Project Professional Lead Project Professional Lead Project Professional Assistant Professional Professional Task Task Description $335 $335 $335 $312 $264 $218 $292 $312 $312 $312 $218 $264 $223 $147 1 Project Administration

1.1 Project Coordination and Monitoring 12 - 32 64 - - - - - - - 32 140 36,328$ -$ 13,320$ 2,760$ -$ 54,016$

1.2 Kickoff and Project Progress Meetings - - 45 24 45 - - - - - - - - - 114 34,434$ 2,503$ 31,690$ 4,880$ -$ 77,164$ TASK 1 TOTAL 12 - 77 24 109 - - - - - - - - 32 254 70,763$ 2,503$ 45,010$ 7,640$ -$ 131,181$ 2 Background Data Collection and Review

2.1 Historical Data Collection and Review - - 16 16 24 4 - - - - - - - - 60 17,560$ -$ -$ 3,680$ -$ 21,608$

2.2 Water Quality Sampling and Analysis - - - - - - - - - - - - - - - -$ -$ 11,140$ -$ -$ 12,254$

2.3 Water Production Review - - 8 8 16 4 - - - - - - - - 36 10,273$ -$ -$ -$ -$ 10,273$ TASK 2 TOTAL - - 24 24 40 8 - - - - - - - - 96 27,834$ -$ 11,140$ 3,680$ -$ 44,136$ 3 Treatment Backwash Impacts Evaluation

3.1 Revise Sewer Discharge Analysis Technical Memorandum - 2 8 - 24 8 16 - - 24 16 - 28 12 138 35,100$ -$ 4,400$ -$ -$ 39,940$

3.2 Revise Treatment Residuals Evaluation Technical Memorandum - 16 8 8 36 8 16 - - - 4 96 27,038$ -$ 1,480$ -$ -$ 28,666$ TASK 3 TOTAL - 18 16 8 60 16 32 - - 24 16 - 28 16 234 62,138$ -$ 5,880$ -$ -$ 68,606$ 4 Blending Studies

4.1 Evaluation of Blending Options - 2 8 - 16 8 16 - - 34 92 24 12 212 51,804$ -$ 2,920$ -$ -$ 55,016$ TASK 4 TOTAL - 2 8 - 16 8 16 - - 34 92 - 24 12 212 51,804$ -$ 2,920$ -$ -$ 55,016$ 5 Update Design Criteria at Affected Wells

5.1 Confirm Cr6 Mitigation Strategy at Affected Wells 2 - 12 2 24 8 - 2 4 - - - - 54 15,267$ 150$ 5,000$ -$ 20,917$

5.2 Incorporate Relevant Site-Specific Recommendations - - 2 16 24 8 - 2 4 - - - - - 56 15,622$ -$ -$ 9,200$ -$ 25,742$

5.3 Confirm Design Criteria Assumptions - 4 8 8 24 8 - 2 4 2 4 - - 8 72 19,143$ -$ -$ 5,520$ -$ 25,215$ TASK 5 TOTAL 2 4 22 26 72 24 - 6 12 2 4 - - 8 182 50,033$ 150 $ 5,000$ 14,720$ -$ 71,875$ 6 Preliminary Design Report, Figures and Cost Estimate

6.1 Preliminary Design Report 4 8 16 4 40 - - 2 2 2 2 - - - 80 23,493$ -$ 38,840$ 11,360$ -$ 78,713$

6.2 Preliminary Design Figures 4 8 8 4 100 44 - - - - - - 144 - 312 76,129$ -$ 7,800$ 5,520$ -$ 90,781$

6.3 Preliminary Design Construction Cost Estimate 4 8 8 - 8 - 40 - - - - - - - 68 20,473$ -$ 10,000$ 3,680$ -$ 35,521$ TASK 6 TOTAL 12 24 32 8 148 44 40 2 2 2 2 - 144 - 460 120,095$ -$ 56,640$ 20,560$ -$ 205,015$ 7 Funding Application Report

7.1 Funding Opportunities Identification and Preliminary Approach - - - 8 8 - - - - - 24 - - 40 10,951$ -$ -$ -$ -$ 10,951$

7.2 Funding Application Report Development - - - 8 24 - - - - - - - 8 40 10,012$ -$ -$ -$ -$ 10,012$ TASK 7 TOTAL - - - 16 32 - - - - - - 24 - 8 80 20,963$ -$ -$ -$ -$ 20,963$ 8 Optional Services

8.1 Preliminary DDW Regulatory and Permitting Assistance - - 2 - - - - - - - - - - - 2 669$ -$ 20,000$ -$ 22,669$

8.2 Additional Testing - - - - 2 - - - - - - - - 2 528$ -$ 13,000$ -$ -$ 14,828$ 8.3 Additional Support Services - - 8 8 8 - - - - - 16 - - 40 11,514$ -$ 1,000$ -$ 12,614$

8.4.1 Well 19 Site Condition Evaluation - 2 4 16 24 4 - 8 8 - - - - - 66 19,209$ -$ -$ 9,200$ -$ 29,329$

8.4.2 Well 19 Early Permitting Considerations - - 2 8 16 - - - - - - - - - 26 7,393$ -$ 2,920$ 920$ -$ 11,617$

8.4.3 Well 19 Treatment Alternatives Evaluation 2 2 2 - 16 4 - 2 4 - - - 16 - 48 12,554$ -$ 32,440$ 9,520$ -$ 58,710$ OPTIONAL TASK 8 TOTAL 2 4 18 32 66 8 - 10 12 - - 16 16 - 184 51,867 $ -$ 68,360$ 20,640$ -$ 149,767$ Total (Base Scope) 26 48 179 106 477 100 88 8 14 62 114 24 196 76 1,518 403,629$ 2,653$ 126,590$ 46,600$ -$ 596,791$ 28 52 197 138 543 108 88 18 26 62 114 40 212 76 1,702 455,496$ 2,653$ 194,950$ 67,240$ -$ 746,558$ Notes:1 Rates are based on Carollo Engineers, Inc., Fee Schedule in the Submittal of Qualifications Statement for Periodic and On-Call Water and Wastewater Professional Design Services, August 9, 2023 with 2% adjustment for 2024.2 Other direct expenses include mileage traveling to/from meetings at IRS Federal Rate, travel at cost.3 Includes Subconsultant markup of 10%.

Total (with Optional Tasks)
Electrical
& Intstr.

Geotech.

Services
Carollo Engineers, Inc. 1

PROJECT
TOTAL 3
CAD/
Graphics
Tech.

Doc.

Process/
Clerical
Total
Hours
Labor
Cost Expenses 2 Process Engineer

EXHIBIT C

CITY OF WATSONVILLE

HEXAVALENT CHROMIUM WELL TREATMENT IMPROVEMENTS PROJECT PHASE 1 - PRELIMINARY DESIGN REEVALUATION

FEE PROPOSAL

5/23/2024 8:42:13 PM
C:\Program Files\eSCRIBE\TEMP\20421096655\20421096655,,,Report - Hillcrest Estates Stormwater Plan Agrmt.docx Agenda Report
MEETING DATE: Tuesday, May 14, 2024
TO: City Council
FROM: PUBLIC WORKS & UTILITIES DIRECTOR LINDBERG

ASSISTANT PUBLIC WORKS & UTILITIES DIRECTOR FONTES
SUBJECT: APPROVAL OF AGREEMENT WITH HILLCREST ESTATES

SUBDIVISION OWNER TO OPERATE, MAINTAIN, REPAIR AND

REPLACE THE SUBDIVISION STORMWATER FACILITIES
RECOMMENDED ACTION:

Staff recommends City Council adopt a resolution approving an Agreement with the Hillcrest Estates Subdivision owner for the owner to operate, maintain, repair, and replace stormwater facilities of the subdivision and authorizing the City Manager to execute the Agreement.

BACKGROUND:

LANDCO Hillcrest, LLC, and its predecessors are developing the Hillcrest Estates Subdivision.  On June 15, 2017, a Major Subdivision Tentative Map was submitted for this project;  On August 28, 2018, Council approved Resolution 141- 18 (CM) approving a Tentative Map;
 On August 25, 2020, meeting, City Council adopted Resolution No. 161-20 (CM) approving a two-year time extension of the Tentative Map;  On July 6, 2021, meeting, City Council adopted Resolution No. 210-21 (CM) approving a First Amended Tentative Map;
 On May 10, 2022, meeting, City Council adopted Ordinance No. 1431-22 (CM) approving a Development Agreement between Hillcrest Watsonville, LLC and the City;  On December 5, 2022, meeting, City Council adopted Resolution No. 241-22 (CM) approving a Public and On-Site Improvement Agreement and Resolution No. 242-22 (CM) approving the Final Map for the Hillcrest Stage 1.

DISCUSSION:

Stormwater facilities within the subdivision will be privately owned and maintained. Initially, this will be done by LANDCO Hillcrest, LLC. As the subdivision is developed, the Homeowners Association will assume these responsibilities. To ensure that the stormwater facilities are operated, maintained, repaired, and replaced properly, LANDCO developed, and the city approved, Stormwater Control Measures and an Operations and Maintenance Plan.

These documents are included in an agreement between LANDCO and the city, entitled “Covenant Running with the Land, Stormwater Control Measures, Stormwater Treatment and Detention Facility Operations and Maintenance Agreement, and Right of Entry.” The

5/23/2024 8:42:13 PM
C:\Program Files\eSCRIBE\TEMP\20421096655\20421096655,,,Report - Hillcrest Estates Stormwater Plan Agrmt.docx agreement memorializes LANDCO and its successors obligations to maintain, operate, repair and replace the stormwater facilities.

STRATEGIC PLAN:

This project is consistent with Strategic Plan Priority:
2-Infrastructure & Environment
FINANCIAL IMPACT:

There is no financial impact to the City’s budget.

ALTERNATIVE ACTION:

No reasonable alternatives are currently known.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

Reso No. (CM)
Meeting Date: 020822 1
RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING AN AGREEMENT BETWEEN THE CITY
OF WATSONVILLE AND LANDCO HILLCREST, LLC., REGARDING A

COVENANT RUNNING WITH THE LAND, STORMWATER CONTROL

MEASURES, STORMWATER TREATMENT AND DETENTION FACILITY

OPERATIONS AND MAINTENANCE AGREEMENT, AND RIGHT OF

ENTRY FOR THE HILLCREST ESTATES SUBDIVISION AND

AUTHORIZING CITY MANAGER TO EXECUTE SAME
WHEREAS, on June 15, 2017, an application for a Major Subdivision (Tentative Map) to allow construction of 150 dwelling units on individual parcels on a 13± acre site located at 511 Ohlone Parkway, Watsonville, California, was filed by California Sunshine Development LLC, applicant; and
WHEREAS, at its August 28, 2018 meeting, City Council adopted Resolution No. 141- 18 (CM) approving a Tentative Map for Tract No. 1607; and WHEREAS, at its August 25, 2020 meeting, City Council adopted Resolution No. 161-20 (CM) approving a two-year time extension of the Tentative Map; and WHEREAS, at its July 6, 2021 meeting, City Council adopted Resolution No. 210- 21 (CM) approving a First Amended Tentative Map for the Hillcrest Estates Subdivision.

The amended Tentative Map included 144 lots with 5 single-family detached units, 60 duplex townhouse units and 76 row townhouse units; and
WHEREAS, at its May 10, 2022 meeting, City Council adopted Ordinance No. 1431-22 (CM) approving a Development Agreement between Hillcrest Watsonville, LLC and the City; and
WHEREAS, at its December 5, 2022 meeting, City Council adopted Resolution No. 241-22 (CM) approving a Public and On-Site Improvement Agreement and Resolution No. 242-22 (CM) approving the Final Map for the Hillcrest Stage 1 Tract Number 1607; and

Reso No. (CM)
Meeting Date: 020822 2
WHEREAS, consistent with the Tentative Map Conditions of Approval and the Development Agreement, a Homeowners Association (HOA) shall be formed and shall be responsible, in perpetuity, for the operation, maintenance, repair, and replacement of the access easements, detention facilities and all permanent stormwater control measures included in the City-approved Stormwater Control Plan (SWCP) and the SWCP’s Stormwater Treatment Operations and Maintenance Plan; and WHEREAS, the HOAs maintenance, operations, and inspection obligations with respect to the Stormwater Facilities are identified in the agreement between the city and the owner in the “Covenant Running with the Land, Stormwater Control Measures, Stormwater Treatment and Detention Facility Operations and Maintenance Agreement, and Right of Entry” for the Hillcrest Estates Subdivision.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. This action is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that may cause a direct, or reasonably foreseeable indirect, physical change in the environment and because the action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. Additionally, even if a “project,” the action would be exempt under the “common sense” exception (14 Cal. Code Regs. § 15061(b)(3)) because it can be seen with certainty that there is no possibility that this action may have a significant effect on the environment.

Reso No. (CM)
Meeting Date: 020822 3

2. That the agreement between the City of Watsonville and LANDCO Hillcrest, LLC., regarding the operation, maintenance, repair, and replacement of the access easements, detention facilities and all permanent stormwater control measures for the Hillcrest Estates Subdivision, a copy of which Agreement is attached hereto and incorporated herein by this reference, is hereby approved.

3. The City Manager is hereby authorized and directed to execute said Agreement for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.
********************************

5/23/2024 8:43:21 PM
C:\Program Files\eSCRIBE\TEMP\20431791143\20431791143,,,Report - Lease w ARTT Paint Supplies .docx Agenda Report
MEETING DATE: Tuesday, May 28, 2024
TO: City Council
FROM: AIRPORT DIRECTOR WILLIAMS
SUBJECT: APPROVAL OF A FOUR (4) YEAR LEASE, TO ARRT PAINT SUPPLIES, LLC FOR AIRPORT PROPERTY AT 240 AIRPORT

BOULEVARD
RECOMMENDED ACTION:

It is recommended the City Council approve a forty-eight (48) month non-aeronautical commercial lease of Airport property at 240 Airport Boulevard to ARTT Paint Supplies, LLC.

BACKGROUND:

ARTT Paint Supplies, LLC is a Watsonville based, local/privately owned company providing the distribution and sale of paints, coatings, and related products to professional, industrial, commercial, and retail customers.

DISCUSSION:

Staff negotiated terms for one thousand six hundred three (1,603) square feet of a portion of the building and office spaces plus assigned vehicle parking. The fair market nonaeronautical rate is $1.50 per sq. ft. for premises for a total monthly lease rate of $2,404.50.

Additionally, the Municipal Airport and ARTT Paint Supplies, LLC., have reached agreement that tenant Improvements, and resulting construction, including supplies and materials, for the 240 Airport Boulevard occupancy will be borne by ARTT Paint Supplies LLC. The Municipal Airport will allow up to $4,809.00 tenant improvement allowance.

The tenant is responsible for telecommunications, insurance, required business licenses, airport permit and taxes. Rent adjusts each year in accordance with the consumer price index.

STRATEGIC PLAN:

Supports the Municipal Airports’ Economic Development Strategy 1.2 “Business Attraction” and Fiscal Health Strategy 4.2 “Maintain a Balanced Budget”.

5/23/2024 8:43:21 PM
C:\Program Files\eSCRIBE\TEMP\20431791143\20431791143,,,Report - Lease w ARTT Paint Supplies .docx FINANCIAL IMPACT:

ARTT Paint Supplies, LLC lease will bring positive financial impacts to the Watsonville Municipal Airport and the City resulting from lease revenue.

ALTERNATIVE ACTION:

Alternatives include not approving the lease which would result in continued vacancy.

ATTACHMENTS AND/OR REFERENCES (If any):

None.

1 Reso No. ______ (CM)
Meeting Date: 052824 SWZ ______ TV ______ WMA ______
RESOLUTION NO. __________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE APPROVING A FOUR-YEAR LEASE AGREEMENT,
DATED AS OF JUNE 1, 2024, BETWEEN THE CITY OF WATSONVILLE

AND ARTT PAINT SUPPLIES, LLC, A LIMITED LIABILITY COMPANY, FOR THE USE OF CITY OWNED PROPERTY LOCATED AT 240

AIRPORT BOULEVARD, WATSONVILLE, CALIFORNIA, COMMENCING
ON JUNE 1, 2024, AND ENDING ON MAY 31, 2028; AND AUTHORIZING

AND DIRECTING THE CITY MANAGER TO EXECUTE SAME

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution approving a four-year lease agreement does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. That the four-year Lease, dated as of June 1, 2024, between the City of Watsonville and ARTT Paint Supplies, LLC, a limited liability company, for the use of Cityowned property located at 240 Airport Boulevard, Watsonville, commencing on June 1, 2024, and ending on May 31, 2028, a copy of which Lease is attached hereto and incorporated herein by this reference, is fair and equitable and hereby approved.

3. That the City Manager be and is hereby authorized and directed to execute such Lease for and on behalf of the City of Watsonville with minor revisions that may be approved by the City Manager and the City Attorney.
****************************

LEASE BETWEEN CITY OF WATSONVILLE AND ARTT PAINT SUPPLIES, LLC THIS LEASE, “Lease”, is made and entered into to be effective the first day of June, 2024 by and between the CITY OF WATSONVILLE, a municipal corporation, hereafter called “City”, and ARTT Paint Supplies, LLC., hereafter called “Tenant”.

THE PARTIES AGREE AS FOLLOWS:

1. Premises.

City does hereby rent and Tenant does hereby hire and take from City a portion of that certain real property and improvements, commonly known and referred to as 240 Airport Boulevard, Watsonville, California (the “Property”), consisting of a 1,603 square feet portion of building and office space (the “Premises”) located within the Property. The Premises are approximated in blue on Exhibit “A-1,” attached hereto and incorporated herein by this reference. The Premises are shown with greater specificity as Room 1 (1,503 sq. ft.) and Office 2 (100 sq. ft.) on the building floorplan attached hereto as Exhibit “A-2,” and incorporated herein by this reference. Tenant shall also has the right of ingress and egress to the Premises. Tenant shall also have the right of exclusive use of ten (10) designated parking spaces numbered 10 through 19 as shown on Exhibit “A-1.”

2. Term and Rent
The term of this Lease shall be four (4) years, commencing June 1, 2024, and expiring on May 31, 2028, hereafter “Lease Term”, at an agreed monthly rent of approximately $1.50 per square foot per month at the sum of $2,404.50 (two thousand four hundred and four dollars with fifty cents) per month for the term (June 1, 2024 to May 31, 2028). Tenant and City agree to this monthly rent amount without regard to whether per square foot rent is more or less than the prescribed amounts above (i.e. a rounding error).

The rent shall be adjusted annually, every July 1sthbeginning during the second year of the lease and each July 1st thereafter using the rate of April to April change in the Consumer Price Index (CPI) for All Urban Consumers San Francisco-Oakland-San Jose, California. In no event will the annual rental increase be more than seven percent (7%) due to increases in the CPI.

If on any rental adjustment date there shall not exist a CPI in the same format as recited herein, the parties shall substitute the Consumer Price Index for all Urban Consumers provided such index has been so revised or changed in such a way as to affect the direct comparability of such revised or changed index published by the Bureau of Labor Statistics or similar or successor governmental agency as may then be in existence and most nearly equivalent thereto (i.e.: the Wholesale Price Index). If the parties are unable to agree on a successor index in the event the aforesaid index is no longer reporting, then the parties shall refer the choice of the successor index to arbitration in accordance with rules of the American Arbitration Association. Rent is due and shall be paid in advance on the 1st day of each and every month during the term of this Lease, commencing June 1, 2024. Rent not received by the tenth (10th) of the month shall be assessed a ten percent (10%) late payment penalty.

DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

Pursuant to Airport Policy, approved Tenant shall be eligible for a credit against rent in an amount of up to fifty percent (50%) of the total documented cost of Tenant constructed tenant improvements not to exceed two (2) months’ rent.

3. Use.

The Premises shall be used to engage in providing warehousing and distribution of paint supplies.

4. Prohibited Uses.

The leased Premises shall not be used for any other use not expressly allowed in Section 3 of this Lease.

5. Improvements to Premises.

If any improvements are proposed by the Tenant, Tenant shall submit a written description of the proposal to the Airport Director together with two sketches drawn to scale. The Airport Director will review the proposal and provide written comments with a recommendation and forward the same to the City Manager for review.

6. Conditions of Construction.

Before construction is commenced on the Premises, and before any building materials have been delivered to the Premises by Tenant or under Tenant’s authority, Tenant shall comply with all the following conditions or procure Landlord’s written waiver of the condition or conditions specified in the waiver: plans and specifications, and four (4) copies of site plan. City shall not unreasonably disapprove preliminary plans and specifications. (a) Notify City of Tenant’s intention to commence the work of improvement at least ten (10) days before commencement of any such work or delivery of any materials. City shall have the right to post and maintain on the Premises any notices of non-responsibility provided for under applicable law. (b) Furnish City with a true copy of Tenant’s contract with the general contractor and with evidence of the general contractor’s financial condition for City’s approval.

The contact shall give City the right but not the obligation to assume Tenant’s obligations and rights under that contract if Tenant should default. (c) Tenant shall comply with all applicable codes, ordinances, or regulations, and requirements for permits and approvals, including, but not limited to or restricted to a grading permit, building permit, zoning and planning requirements, and approvals from various governmental agencies and bodies having jurisdiction. (d) Tenant shall require from the contractor: (i) certificates of insurance evidencing coverage for “Builder’s risk”, (ii) evidence of Worker’s Compensation Insurance covering all persons employed in connection with the work and with respect to whom death or bodily injury claims could be asserted against Landlord or the DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

Premises, and (iii) evidence that contractor has paid or caused to be paid all premiums for the coverage described in this sub- paragraph and premiums sufficient to assure maintenance of all insurance during the anticipated course of the work.

7. New Construction Completion Date.

Once work has begun on one area, Tenant shall with reasonable diligence prosecute all construction of improvements for completion and ready for use; provided however, that the time for completion shall be extended for as long as Tenant shall be prevented from completing the construction by delays beyond Tenant’s control; but failure, regardless of cause to commence construction within two (2) weeks following execution of this lease, at City’s election exercised by five (5) days written notice, shall terminate this Lease.

Notwithstanding the preceding paragraph, Tenant shall prosecute the construction of the initial improvements commenced within thirty (30) days of the full execution of this lease for completion on or before July 31, 2024.

8. Protection of City against Cost or Claim.

Tenant shall pay or cause to be paid the total cost and expense of all works of improvements, as that phrase is defined in the mechanic’s lien law in effect at the place of construction when the work begins. No such payment shall be construed as rent. Tenant shall not suffer or permit to be enforced against the Premises or any part of it any mechanic’s, materiel man’s, contractor’s, or sub-contractor’s lien arising from any work of improvement, however it may arise. However, Tenant may in good faith and at Tenant’s own expense contest the validity of any such asserted lien, claim, or demand, provided Tenant has furnished the bond required in California Civil Code Section 8424. Tenant shall defend and indemnify City against all liability and loss of any type arising out of work performed on the Premises by Tenant, together with reasonable attorney’s fees and all costs and expenses incurred by City in negotiating, settling, defending, or otherwise protecting against such claims.

9. Notice of Completion.

On completion of the work of improvement, Tenant shall file or cause to be filed a notice of completion. Tenant hereby appoints City as Tenant’s attorney in fact to file the notice of completion on Tenant’s failure.

10. Ownership of Improvements During Term.

All buildings and improvements constructed on the Premises by Tenant as permitted or required by this Lease shall, during this Lease Term, be and remain the property of Tenant; provided, however, that Tenant shall have no right to waste, destroy, demolish or remove the improvements except as expressly provided in this Lease; and provided, further, that Tenant’s rights and powers with respect to the improvements are subject to the terms and limitations of this Lease. City and Tenant covenant for themselves, and all persons claiming under or through them, that the improvements are real property. All buildings and improvements existing on the DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

Premises, as of the date of this Lease are City’s property, free of all claims to or against them by Tenant or any third person.

11. Ownership of Improvements at Termination.

Except as specified in Section 13 of this Lease, all buildings and improvements placed or constructed on said Premises as part of said project, as well as any and all other alterations, additions, improvements, and fixtures, except furniture and trade fixtures, made or placed in or on said Premises by Tenant or any other person, shall be considered part of the real property of said Premises and on expiration or sooner termination of this Lease, or the exercised option, shall remain on said Premises and become the property of City free and clear of any liens or encumbrances whatsoever and without the payment of any consideration therefore.

12. Removal of Fixtures.

At the normal expiration of the Lease Term, provided Tenant is not in default, Tenant shall have the right to remove any and all trade fixtures, provided all resultant injuries to the Premises and remaining improvements, except for ordinary wear and tear, are completely remedied and Tenant complies with City’s reasonable requirements respecting the resultant appearance. Any such items not so removed within thirty (30) days of termination shall become the property of City free and clear of any liens or encumbrances whatsoever and without payment of consideration therefore.

13. No Subordination.

City shall not subordinate the fee title to the Premises to any security transaction to enable Tenant to obtain financing for the new improvements. The Premises are now and shall remain free and clear of any liens, encumbrances or other Tenant obligations to third person.

14. Utilities.

Tenant shall pay for all telephone service, and all other services supplied to the Premises, with the exception of gas and electricity, garbage disposal, water, storm and sanitary sewer services, which are the Landlords responsibility, including installation and connection of such services from the main source thereof, including City meters, and hold harmless the City therefore.

15. Possessory Interest Tax.

Pursuant to Section 107.6 of the State Revenue and Taxation Code the City hereby gives notice that the property interest to Tenant under this Lease may be subject to property taxation as a possessory interest and the Tenant acknowledges that it shall be subject to payment of property tax if a possessory interest tax is levied on the property interest.

16. Alterations and Additions.

Except as otherwise provided by Section 6 of this Lease, Tenant shall not make any alterations or improvements to or erect any additional structures on the Premises without prior DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

written consent of City. Any alterations or additions approved by City shall be constructed at the sole expense of Tenant.

17. Compliance with rules, regulations and laws.

In the use and occupancy of the Premises and in the conduct of all business, activities and transactions thereon, Tenant will comply with all applicable laws, ordinances, rules, regulations and orders of the City or any governmental subdivision, body or authority, including all federal, state and municipal laws and ordinances and all rules and regulations of the Federal Aviation Agency and the City of Watsonville rules and regulations concerning the operations of the Watsonville Municipal Airport and environs.

18. Storage of Materials, Equipment.

No materials, supplies, products, equipment or other personal property shall be stored or permitted to remain on any portion of the Leased Premises outside of City approved buildings or structures without City’s prior written consent. Tenant shall store personal property items, supplies, materials and combustibles inside the buildings in a safe, neat and sanitary manner.

Tenant shall provide or cause to be provided adequate enclosures, screened areas and/or suitable covered metal receptacles within the Leased Premises for the short-term accumulation and storage of solid waste, such as rubbish, trash, garbage, sludge, discarded machinery or parts and any other solid industrial wastes. Such enclosures and/or screened areas shall be designed in such a way as to prevent, odors, fumes, attraction of pests, and dispersal of wastes due to wind or water runoff, and shall be serviced regularly by qualified waste removal and disposal services.

Environmental Considerations.
(a) Tenant shall not commit, or suffer to be committed, any waste upon the Leased Premises, or any nuisance or other act or thing, which may disturb the quiet enjoyment of the use of Watsonville Airport or surrounding property. Tenant shall ensure that no untreated liquid waste from any type of operation will enter the airport storm drainage system or sanitary system.
(b) Tenant shall at all times comply with all applicable laws, rules and regulations of federal, state or local governmental agencies, including, but not limited to, the City of Watsonville, Santa Cruz County, and responsible Regional Air and Water Quality Control Boards. Tenant shall not permit any activity which directly or indirectly produces objectionable or unlawful amounts or levels of air pollution (gases, particulate matter, odors, fumes, smoke, or dust), water pollution, noise, glare, heat emissions, electronic or radio interference with navigational and communication facilities for the operation of the Airport and for its use by aircraft, trash or refuse accumulation, vibration, prop-wash, or jet blast, or which is hazardous or dangerous by reason or risk of explosion, fire or harmful emission. Any waste oil storage tanks shall be in approved containers and in accordance with environmental and fire protection regulations. (c) Hazardous Substances. The term “Hazardous Materials” shall mean any toxic substance, hazardous substance, hazardous material, or hazardous waste, pollutant DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

or contaminant which is or during the term of this Lease becomes regulated by any local governmental authority, the State of California, or the United States government, including, but not limited to any, material or substance which is defined as a “hazardous waste,” “extremely hazardous waste” or “restricted hazardous waste” under local, State, or federal law and as determined by the Fire Department. Except in strict compliance with all government approvals, applicable laws and regulations pertaining to Hazardous Materials, and in accordance with the provisions of this Lease, Tenant shall not cause or permit the presence, use, handling, generation, emission, release, discharge, storage, or disposal of any Hazardous Materials on, under, in or about the Premises, excepting the presence of any Hazardous Materials on, under, in or about the Premises as of the date of this Lease or the migration to or seepage of Hazardous Materials from surrounding or adjacent property; and shall not cause or permit the transportation of any such materials.

19. Hazardous Materials to or from the Premises.
(a) Tenant shall at all times notify City of any Hazardous Materials present, used, generated, handled, emitted, released, discharged, stored or disposed of on or from the Premises. Notwithstanding the foregoing, notice shall not be required for Hazardous Materials present on the Premises in reasonable quantities which are commonly used in machining facilities including, but not limited to, cleaning materials, motor oils, and hydraulic fluids provided such Hazardous Materials are used and disposed of in accordance with law, or for materials which are first designated as Hazardous Materials after expiration of the term of this Lease.

Tenant shall also institute operating procedures designed to handle Hazardous Materials consistent with prudent industry practice, including evidence of a licensed agent removal service. City shall have the right to inspect the Premises on 24-hours prior notice for compliance with the provisions of this Section. (b) Indemnification by City. City shall indemnify, protect, defend, and hold harmless Tenant and Tenant’s successors and assigns, officers, directors, employees, agents, subtenants and assignees, from and against all liability, and foreseeable consequential damages, penalties, expenses and costs of any required or necessary remediation, repair, removal, clean up or detoxification, of the Premises and surrounding properties, and from and against the preparation of any clean up, remediation, closure or other required plans, whether such action is required or necessary during or following the term of this Lease, to the full extent that the same is attributable to the use, handling, generation, emission, release, storage, discharge or disposal of hazardous material by City, its agents, employees, and contractors.

20. Indemnification by Tenant.

Tenant shall indemnify, protect, defend, and hold harmless City and City’s successors and assigns, officers, directors, employees, agents, subtenants and assignees, from and against all liability, and foreseeable consequential damages, penalties, expenses and costs of any required or DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

necessary remediation, repair, removal, clean up or detoxification, of the Premises and surrounding properties, and from and against the preparation of any clean up, remediation, closure or other required plans, whether such action is required or necessary during or following the term of this Lease, to the full extent that the same is attributable to the use, handling, generation, emission, release, storage, discharge or disposal of hazardous material by Tenant, its agents, employees, and contractors.
(a) Indemnification Survives Lease. The indemnification provisions of the foregoing shall survive the termination of this Lease. No Warranty of Current Condition.

City makes no representation or warranty, express or implied, as to the physical condition of the Premises, including, but not limited to the condition of the exterior or interior of the structure, ground, soil, surface water or groundwater. the geology, the presence of known and unknown faults, the presence of any Hazardous Materials or other kinds of contamination or pollutants of any kind in the air, soil, groundwater or surface water, or the suitability of the Premises for the construction and use of the improvements thereon.

21. Repairs.

City shall maintain the exterior of the Premises, including outside walls and roof, heating, electrical systems (excluding internal lights and fixtures), and the interior first floor restroom facility, except in the event that repairs or replacements are necessary thereto because of negligence or misconduct of the Tenant or if Tenant fails to notify City in writing within three (3) days of the need to repair.

Tenant shall maintain Premises, including, but not limited to, interior plumbing (i.e., sanitary sewer obstructions), interior walls, doors, hardware, alarms, internal lights and fixtures, etc., in as good order, condition and repair as they shall be upon the commencement of the term of this Lease. Tenant shall, at Tenant’s sole cost and expense, maintain and ensure the entry and exit doors to the Premises are secured in accordance with direction from the City, provided, however, that such cost may be included as a Tenant constructed tenant improvement. Any addition to the electrical system installed by Tenant shall remain the responsibility of the Tenant.

Tenant shall keep drainage ditches and gutters free of debris.

22. Freedom from Liens.

Tenant shall not create or permit to be created or to remain, and covenants to remove and discharge promptly, at its cost and expense, all liens, claims, stop notices, encumbrances and charges upon the Premises, or Tenant’s leasehold interest therein which arise out of the use or occupancy of the Premises by Tenant or anyone using or occupying the Premises with the consent or sufferance of Tenant, or by reason of labor or materials furnished or claimed to have been furnished to Tenant for any construction, alteration, addition or repair of any part of the Premises. Tenant shall give City fifteen (15) days’ notice prior to commencing any work on the Premises, so that City shall have a reasonable time within which to post notices of nonresponsibility.

23. Holding Over.

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If Tenant shall hold possession of the Premises after the term of this Lease, Tenant shall become a Tenant from month to month at the rental and upon the terms herein specified and shall continue to be such tenant until the tenancy shall be terminated by City on thirty (30) days’ notice or until Tenant shall have given at least thirty (30) days’ notice of Tenant’s intention to terminate the tenancy. The provisions of this Lease, so far as applicable, shall govern such tenancy, except that the monthly rent for such tenancy shall be the same as the last full month’s rental rate.

24. Abandonment.

Tenant shall not vacate or abandon the Premises at any time during the term thereof; if Tenant shall abandon, vacate or surrender the Premises or be dispossessed by process of law, or otherwise, any personal property belonging to Tenant and left on the Premises shall be deemed to be abandoned and at the option of City shall become City’s property free from all claims of Tenant. In the event Tenant abandons the Premises City shall have the option to terminate this Lease by giving Tenant notice of belief of abandonment pursuant to California Civil Code Section 195 1.3 or City has the remedy described in California Civil Code Section 1951.4, i.e., City may continue the Lease after breach and abandonment and recover rent as it becomes due, if Tenant has the right to sublet or assign, subject to reasonable limitations as provided in paragraph 25.

25. Assignment or Subletting.

Tenant shall not assign or encumber any interest in this Lease or in the Leased Premises, or sublease all or any part of the Premises, or allow any other person or entity to occupy or use all or any part of the Premises, without City’s written consent, and consent to one assignment or sublease shall not be construed as consent to any subsequent assignment or subleasing. If Tenant is a corporation or partnership, any dissolution, merger, consolidation or other reorganization of Tenant or the sale or transfer of controlling percentage of the capital stock of Tenant or the sale of twenty five percent (25%) of the value of the assets of Tenant shall be deemed a voluntary assignment. The phrase “controlling percentage” means the ownership of and the right to vote stock possessing at least twenty five percent (25%) of the total combined voting power of all classes of Tenant’s capital stock issued outstanding and entitled to vote for the election of directors. City shall not unreasonably withhold consent, but City may nevertheless condition consent upon such factors as the identity, reputation, financial worth and stability and operating ability of any proposed assignee or subtenant. Unless prior written consent of City shall have been obtained, any transfer, or attempted assignment or transfer, of this Lease or any interest therein, or any subletting, either by voluntary or involuntary act of Tenant or by operation of law or otherwise, shall at the option of the City terminate this Lease, and any such purported assignment, transfer or subletting without such consent shall be null and void.

Assignment.
(1) Tenant shall not have the right to assign this Lease, except by Leasehold mortgage, without the written consent of City, which shall not be unreasonably withheld. If Tenant desires to assign the Lease, Tenant shall comply with the following procedures:

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(a) Tenant shall give City at least sixty (60) days prior written notice of its desire to assign the Lease.
(b) Tenant shall simultaneously provide City with the assignee’s name, business organization, financial statement, and other documentation as may be requested by City.
(c) Tenant shall provide City with a true copy of the proposed assignment and the proposed assignee shall, in recordable form, expressly assume all the covenants and conditions of this Lease. (d) Tenant shall provide City with copies of any financial agreements, schedule of payments, mortgage or encumbrance on the Leasehold estate.
(e) Tenant shall pay City at the time the request to assign is submitted, a deposit of Five Thousand Dollars ($5,000.00) to offset City’s expenses, including attorney’s fee, in evaluating and documenting the assignment. City shall charge said deposit at the then current hourly rate for staff time charged to the Airport. Any balance of said deposit shall be refunded to Tenant, and any excess amount charged, excluding said deposit, shall be paid by Tenant. (2) City and Tenant hereby deem it reasonable for the City to refuse to consent to a proposed assignment in the following circumstances:
(a) City may object to any proposed assignment if, in the City’s sole opinion, the proposed assignee is not a qualified assignee in terms of financial strength, business experience or reputation or the ability to operate the fixed base operation and provide the required services in a manner consistent with the purposes for which this Lease was granted.
(b) City may object on any other reasonable grounds.

The effective date of the assignment shall not occur until sixty (60) days after the Tenant’s notice of the proposed assignment unless, within that time, City gives notice of a valid objection or refusal of consent as set forth in subsection A. (3) hereof. If City gives notice of a valid objection and withholds consent, the Lease will not be assigned.

Subletting.

It is understood and agreed that, from time to time, Tenant may request City’s permission to sublet portions of the Premises and City shall not unreasonably withhold consent, provided:
(1) Each sublease made shall be subject and subordinate to the right of the City and the provisions of each sublease shall conform to the provisions of this Lease as far as practicable.

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(2) The sublease does not effect an assignment of the Lease as prohibited elsewhere.
(3) Tenant includes the following information with its request to sublease, the name, address, a true copy of the proposed sublease, and appropriate documentation as evidence the subtenant is qualified to conduct business on the Airport and such subtenant will provide the type of development and services required under the provisions of this Lease. (4) Subtenant provides insurance coverage(s) as appropriate, in accordance with Lease provision(s), INSURANCE, the same as if the subtenant were a lessee.

If Tenant is in the default of monetary obligations to City pursuant to this Lease, Tenant immediately and irrevocably assigns to City, as security for Tenant’s obligations under this Lease, all rent from any subletting of all or a part of the Leased Premises as permitted by this Lease, and City, as assignee and as attorney- in-fact for Tenant, or a receiver for Tenant appointed on City’s application, may collect such rent and apply it toward Tenant’s obligations under this Lease; except that, until the occurrence of an act of default by Tenant, Tenant shall have the right to collect such rent. It is understood and agreed by the parties hereto that the above assignment provisions do not apply to heirs by will.

26. LANDLORD’S RECAPTURE RIGHT.

RIGHT OF RECAPTURE
Despite any other provision of this Lease, Tenant shall notify Landlord in writing (Availability Notice) if Tenant wishes to transfer the Premises or any portion thereof (Subject Space). If Tenant does not give Landlord the Availability Notice before delivering a Transfer Notice, the Transfer Notice shall also be the Availability Notice. Landlord has the option, by written notice to Tenant (Recapture Notice) within thirty (30) days after receiving any Availability Notice, to recapture the Subject Space as described in the next section. A timely Recapture Notice terminates this Lease as to the Subject Space and Tenant’s obligations regarding the remaining term of this Lease (or, at Landlord’s election, for a shorter period specified in the Availability Notice as the term of the Transfer) and as of the date specified in the Availability Notice. The Recapture Notice shall be void, however, if Tenant notifies Landlord, within thirty (30) days after receipt of the Recapture Notice, that Tenant withdraws the Availability Notice or Transfer Notice. If Landlord declines or fails timely to elect to recapture the Subject Space, Landlord shall have no further right under this section to the Subject Space unless it becomes available again after Transfer by Tenant.

CONSEQUENCES OF RECAPTURE.

To determine the new Base Rent under this Lease if Landlord recaptures the Subject Space, the original Base Rent under the Lease shall be multiplied by a fraction, the numerator of which is the Rentable Square Feet of the Premises retained by Tenant after Landlord’s recapture and the denominator of which is the total Rentable Square Feet of the Premises before Landlord’s recapture. The Additional Rent, to the extent that it is calculated on the basis of the DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

Rentable Square Feet within the Premises, shall be reduced to reflect Tenant’s proportionate share based on the Rentable Square Feet of the Premises retained by Tenant after Landlord’s recapture. This Lease as so amended shall continue thereafter in full force and effect for the remaining Premises only. Either party may require written confirmation of the amendments to this Lease necessitated by Landlord’s recapture of the Subject Space. If Landlord recaptures the Subject Space, Landlord shall, at Landlord’s sole expense, construct any partitions required to segregate the Subject Space from the space retained by Tenant. Tenant shall, however, pay for painting, covering, or otherwise decorating the surfaces of the partitions facing the remaining Premises retained by Tenant.

If Landlord recaptures the Subject Space, Landlord shall pay Tenant ten percent (10%) of any Transfer Premium received by Landlord.

27. Signs, Posters, Buildings and Towers.

No advertising signs, posters or similar devices shall be erected, displayed or maintained in, on, about or above the Premises or the structures thereon without a sign permit and the written approval of the Airport Manager.

No structures erected on the Premises shall exceed the height limit fixed by any City zoning ordinance or regulations of the Airport or Federal Aviation Authority. Tenant in its operations shall not unreasonably interfere with the property, interests, operations or activities of the City or of other tenants of the City.

28. Taxes.

Tenant will pay all fees, taxes, assessments and licenses levied, imposed or required by any governmental subdivision, body or authority on or in respect to any improvements or property placed on the Premises by Tenant or any person with its permission The use, occupancy or possessory rights of Tenant in the Premises (a) Any business, activity or transaction conducted thereon by Tenant; (b) City license and permits; and
(c) Commercial Operator Permit fee.

29. Waiver of Damages and Indemnification.

City shall not be liable to Tenant for any injury or damage that may result to any person or property by or from any cause whatsoever, except as results from acts of the sole negligence on the part of City, its agents, servants, employees or invitees. Without limiting the generality of the foregoing waiver, it is expressly extended to injury or damage caused by water leakage of any character from the roof(s), wall(s), basement or any part of the property, or caused by gas, oil, electricity or any other cause in or about the Premises or the building(s). Tenant agrees to hold City harmless from, and to defend City against, any and all claims or liability for any death DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

of for injury to any person or damage to any property, whatsoever, occurring in, on or about the Premises.

30. Payment of Rent and Services.

Notwithstanding any other provision of this Lease, all rents shall be paid to City of Watsonville, c/o Finance Department, by delivering or mailing to the address provided in Section

38. 31. Security Deposit.

On execution of this Lease, Tenant shall deposit the sum of Two Thousand Four Hundred Four Dollars and 50/100 Dollars ($2,404.50) representing one (1) month’s rent in cash as security for the faithful performance of the terms, covenants and conditions of this Lease.

If Tenant is in default, City can use the security deposit or any portion of it, to cure the default or to compensate City for all damages or loss sustained by City resulting from Tenant’s default if the notice requirements, if applicable, have been observed.

Tenant shall immediately, on demand, pay to City a sum equal to the portion of the security deposit expended or applied by City as provided in this paragraph so as to maintain the security deposit in the sum initially deposited. Upon final accounting by City, any balance of said deposit shall be refunded to Tenant.

32. Hold Harmless.
(a) Tenant shall save, protect, indemnify, and hold harmless City, its elective and appointive boards, commissions, officers, agents, and employees from any and all claims, cost or liability of any kind allegedly suffered, incurred or threatened, including personal injury, death, property damage, inverse condemnation, or any combination of these, foreseeable or unforeseeable, arising directly or indirectly from or connected with any acts performed pursuant to this Lease, or any omission to perform, including, but not limited to, claims, costs or liability resulting from: (I) The conduct, negligent or otherwise, of Tenant, its subtenant(s), assignee(s), or any officer(s), agent(s) or employee(s) of one or more of them; (2) The joint conduct of the City and Tenant, regardless of whether the City is concurrently, active or passively negligent or not negligent at all; or (3) The sole concurrent conduct of any other person or entity.

The above promise and agreement in this section is not conditioned or dependent on whether Tenant or City has prepared, supplied or approved any plan(s) or specification(s) in connection with this Lease, or has insurance or other indemnification covering any of these matters, or that the alleged damage resulted partly from any negligent or willful misconduct of City.
(b) Non-Liability of City for Damages. This Lease is made upon the express condition that City is to be free from all liability and claim for damages by reason of any injury to any person or persons including, Tenant, or property of any kind whatsoever and to whomsoever belonging, including Tenant, from any cause or causes whatsoever while in, upon, or in any way connected with the Premises during the term of this Lease or any extension hereof DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

or any occupancy hereunder, Tenant hereby covenanting and agreeing to indemnify and save harmless City from all liability, loss, cost, attorney’s fees, and obligations on account of or arising out of any such injuries or losses however occurring.

33. Breach.

After service of ten (10) days written notice thereof by City on Tenant any one of the following shall constitute a breach of this Lease by Tenant (a) The appointment a general assignment by Tenant for the benefit of creditors, or of a Receiver to take possession of all or substantially all of the assets of Tenant, or (b) Period of twenty (20) days, or
(c) A default in the performance of any other covenant or condition of this Lease on the part of Tenant to be performed for a period of twenty (20) days

34. Insurance.
(a) During the rental term, Tenant, at Tenant’s sole expense, shall secure and maintain in force such policies of insurance as will protect it from claims for damages or injury resulting from bodily injury, including death, and for the loss or damage to property of others which may arise from operations of this Lease. Such insurance shall contain statements that:
(b) these policies shall also apply to City, as an Additional Named Insured; (i) the insurance afforded by these policies applies severally as to each insured, except that the inclusion of more than one insured shall not operate to increase the limit of the company’s liability, and the inclusion hereunder of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included; (ii) the insurance shall be primary insurance over any other insurance carried by City, which other insurance shall be considered excess only; (iii) the above policies specifically include coverage indemnifying City as set forth in this Lease; (iv) the policies may not be canceled, nor the coverage reduced until thirty (30) days after a written notice of such cancellation or reduction in coverage is delivered to City at the address contained herein; (v) the insurance companies named herein waive any all rights of subrogation against City. Such liability insurance shall be written with limits of at least Two Million Dollars ($2,000,000.00), combined single limits, and shall be written by companies acceptable to City. The limit of liability insurance coverage shall be adjusted commensurate with inflation and other liability factors upon adoption of resolution of the City Council of City.

Certificates of Insurance evidencing the above obligations shall be delivered to City on prior commencement of operations covered by this agreement.
(c) City, at Tenant’s cost, shall cooperate fully with Tenant to maximize any recovery following an insured casualty. All policies of fire and extended coverage or other casualty insurance required by subparagraphs (e) and (g) below shall provide that proceeds there under shall be paid to City and Tenant as their interests may appear. (d) All policies required to be maintained by Tenant pursuant to the terms of this Lease shall be issued by companies authorized to do business in the State of California with a DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

financial rating of at least “A” in the most recent edition of Best Insurance Reports. Tenant shall pay premiums therefore and shall deliver annually to City Certificates of Insurance that such policies are in effect. If Tenant fails or refuses to procure or maintain the insurance coverage required hereunder, or fails or refuses to furnish City with proof that coverage has been procured and is in full force and paid for, City shall have the right, at City’s election and without notice to Tenant, but without any obligation to do so, to procure and maintain such coverage. Tenant shall reimburse City on demand for any premiums City so pays in connection with such procurement. (e) Fire Insurance: During the Lease Term, Tenant, at Tenant’s sole expense, shall insure for fire and extended coverage risks all buildings, personal property, improvements, and alterations in, on, or about the Leased Premises. Such insurance shall be in an amount not less than eighty percent (80%) of insurable, full replacement cost of such buildings and improvements, and shall include vandalism and malicious mischief endorsements. Said fire insurance policies shall contain loss payable endorsements in favor of the parties as their respective interests may appear hereunder. The CITY OF WATSONVILLE shall be named as additional insured in such policy or policies.
(f) Fire or Casualty:
(1) Destruction of Tenant Owned Building. In the event of extensive damage (greater than fifty percent (50%)) to or destruction of buildings or other improvements on the Leased Premises owned by Tenant as provided in Section 11 of this Lease (“Tenant Improvements”), Tenant shall determine whether to repair or replace the Tenant Improvements. If it is determined to repair or replace the Tenant Improvements, the proceeds of any insurance policy paid on account of such damage or destruction shall be used to defer the cost of repairing or replacing the Tenant Improvements.

Tenant shall complete all repairs within a reasonable time. If it is determined not to repair or replace the Tenant Improvements, Tenant may terminate this Lease upon written notice to City within thirty (30) days of such damage or destruction. If Tenant terminates this Lease pursuant hereto, after deducting any proceeds payable to Tenant’s lender pursuant to the following paragraph, the remaining proceeds of any insurance policy paid on account of such damage or destruction shall be distributed to City and Tenant pursuant to the following formula: City’s share shall be the product of the amount of the remaining proceeds multiplied by a fraction, the numerator which is the number of months since the commencement date of this Lease until the date of the casualty causing such damage or destruction, and the denominator of which is four hundred and twenty (420). Tenant’s share shall be the excess of the remaining proceeds after subtracting the City’s share. In the event of termination of the Lease pursuant to this Section 33 (e) (l), Tenant shall remove the Tenant Improvements and, restore the City owned building to its prior condition at Tenant’s sole cost and expense prior to the date of termination of the Lease.

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All fire and extended coverage insurance policies insuring the Tenant Improvements may have a loss payable clause in favor of any lender of Tenant, including, but not limited to, any mortgagee of Tenant, as such lender’s interest may appear.
(2) Destruction of City Owned Premises. If during the term of this Lease the City owned Premises, as provided in Section 11 of this Lease, shall be damaged or destroyed to the extent of fifty percent (50%) of its valuation or at a repair cost estimated by the City Building Official to exceed the sum of Twenty Five Thousand Dollars ($25,000.00) by fire, the elements, or any other cause, then this Lease shall, at City’s option, cease and become null and void from the date of such damage, or destruction, and Tenant shall immediately surrender the entire Premises to City and shall pay rent only to the time of such surrender.

If the City owned Premises shall be damaged by fire, or other cause, so as to be capable of being repaired within a reasonable time, City shall have the option to repair the same and during the time that the repairs are being made, City shall remit to Tenant a just and fair portion of the rent according to the nature of the damage sustained and according to the extent that Tenant is deprived of the use of the City owned Premises.

Should the estimated time to repair damage exceed one hundred twenty (120) days, the Tenant may, at his option, terminate, this Lease. In such event both parties shall be released from further obligations under the terms of this Lease.
(g) Workers’ Compensation: Tenant, at Tenant’s sole expense, must obtain and maintain workers’ compensation insurance covering all its employees, and said insurance must be kept in force during the entire term of this Lease.
(h) Notice: Each party hereto shall give to the other prompt and timely notice of any claim made or suit instituted coming to its knowledge which in any way directly, contingently or otherwise, affects or might affect either, and both shall have the right to participate in the defense of the same to the extent of its own interest.

35. Litigation Expenses.

If either party shall bring an action against the other by reason of the breach of any covenant, warranty or condition hereof, or otherwise arising out of this Lease, whether for declaratory or other relief, the prevailing party in such suit shall be entitled to its costs of suit and reasonable attorney fees, which shall be payable whether or not such action is prosecuted to judgment. “Prevailing Party” within the meaning of this paragraph shall include without limitation a party who brings an action against the other after the other’s breach or default, if such action is dismissed upon the other’s breach or default, if such action is dismissed upon the other’s payment of the sums allegedly due or performance of the covenant’s allegedly breached, or if the plaintiff obtains substantially the relief sought by it in the action.

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36. Surrender of Premises.

Tenant agrees to surrender the Premises and any addition thereto at the termination of the tenancy herein created in the same condition as the Premises were in at the beginning of the tenancy or at the time of completion of the improvements as the case may be, reasonable use and wear thereof and damage by act of God or the elements excepted. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation thereof shall not work a merger, and shall, at the option of City, terminate all or any existing subleases or sub tenancies, or may, at the option of City, operate an assignment to City of any or all such sublease or sub tenancies.

37. Waiver.

Any waiver, expressed or implied, by either party of any breach by the other party of any agreement, term or condition of this Lease shall not be, or be construed to be, a waiver of any subsequent breach of a like or other agreement, term of condition hereof; and the acceptance of rent hereunder shall not be, or be construed to be, a waiver of any breach of any agreement, term or condition of this Lease, except as to the payment of rent so accepted. The rights and remedies of either party under this Lease shall be cumulative and in addition to any and all other rights and remedies which either party has or may have.

38. Quiet Enjoyment.

City covenants and warrants that upon Tenant’s paying the rent and observing and performing all of the terms, covenants, and conditions on Tenant’s part to be observed and performed hereunder, Tenant shall and may peaceably and quietly enjoy the Premises hereby demised, subject nevertheless to the terms and conditions of this Lease.

39. Notices.

All notices, consents, waivers or other communications which this Lease requires or permits either party to give to the other shall be in writing and shall be served personally or delivered by registered or certified mail, return receipt requested, made upon or addressed to the respective parties as follows:

To Landlord: City Clerk
City of Watsonville
275 Main Street, Suite 400
Watsonville, CA 95076
To Tenant: ARTT Paint Supplies, LLC
240 Airport Boulevard
Watsonville, CA 95076
ATTN: Managing Member
or such other address as may be contained in a notice from either party to the other given pursuant to this section. Notice of registered or certified mail shall be deemed to be given fortyDocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

eight (48) hours from the time of postmarking if mailed within the United States (excluding Alaska).

40. Recordation.

Neither party, without the consent of the other, shall cause or permit the original nor any copy of this Lease to be recorded, filed or published in any public place.

41. Tenant to Assume All Unknown Expenses.

Notwithstanding the existence of a provision therefore in this Lease, Tenant shall assume, pay and be obligated for any and all costs and expenses toward the operation, protection, maintenance of the Premises, known or unknown, expressed or unexpressed, it being the intention of the parties for this to be a triple net lease to City.

42. Right of City to Enter for Inspection.

City shall have the right to enter upon the Premises at all reasonable times during the term of this Lease for the purpose of making any inspection it may deem expedient to the proper enforcement of this Lease.

43. Nondiscrimination.

Tenant hereby covenants that Tenant in its use of the Premises and any and all structures, buildings and improvements located here on shall conduct the fixed base operation or any other activity hereafter authorized by the City on the Premises on a non-exclusive and nondiscriminatory basis in all respects with regard to any person, firm or group of persons. Tenant shall not act in any manner prohibited by Part 15 of the Federal Aviation Regulations and further agrees to be nondiscriminatory also with respect to price or cost of services or goods and in every other fashion.

44. Enforcement of Nondiscrimination Clause.

City shall have the right to take such action against the Tenant as the United States Government may direct or request to enforce the terms of the preceding paragraph on behalf of the United States Government or on behalf of any of its citizens or the City itself.

45. Other Operations.

It is understood that the use authorized at the Watsonville Municipal Airport by this Lease is not given to Tenant exclusively but may be given to any other Tenant at the Airport at the sole discretion of the City.

46. Condemnation.

If the whole or any substantial part of the Premises shall be taken by any paramount public authority under the power of eminent domain then the term of this Lease shall cease as to the part so taken from the date the possession of that part shall be taken for any public purpose, DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

and from that day Tenant shall have the right either to cancel this Lease or to continue in the possession of the remainder of the Premises under the term herein provided, except that the square foot rental shall be reduced in proportion to the amount of the Premises taken. Damages awarded for such taking shall be apportioned between the City and Tenant in a ratio relating to the number of years expired and remaining in the Lease Term between City and Tenant respectively; provided, however, that City shall not be entitled to any portion of the award made for loss of business installation or improvements belonging to Tenant.

47. Nondiscrimination- (FAA, MBE, DB Requirements).

The Tenant, for itself, its heirs, personal representatives, successors in interest, and assigns, as a part of the consideration for this Lease, does hereby covenant and agree as a covenant running with the land that in the event facilities are constructed, maintained, or otherwise operated on the Premises for a purpose for which a Department of Transportation (DOT) program or activity is extended or for another purpose involving the provision of similar services or benefits, the Tenant shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in FederallyAssisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as such Regulations may be amended. The Tenant for itself, its personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby further covenant and agree as a covenant running with the land that: (a) no person on the grounds of race, color or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of facilities; (b) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subject to discrimination; (c) that the Tenant shall use the with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 2 1, Nondiscrimination in Federally-Assisted Programs of the Department of TransportationEffectuation of Title VI of the Civil Rights Act of 1964, and as such Regulations may be amended.

Tenant shall furnish its accommodations and/or services on a fair, equal and not unjustly discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustly discriminatory prices for each unit or service; PROVIDED, THAT the Tenant may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of price reductions to volume purchasers.

Tenant shall insert the provisions of this section in any lease agreement or contract by which Tenant grants a right of privilege to any person, firm or corporation to render accommodations and/or services to the public on the Premises.

48. Remedy for Discrimination.

In the event of breach of any of the nondiscrimination covenants identified in Paragraph 48, City shall have the right to terminate this Lease and to reenter and repossess the Premises and DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

the facilities thereon, and hold the same as if this Lease had never been made or issued. The provision does not become effective until the procedures of 49 CFR Part 21 are followed and completed including expiration of appeal rights.

Non-compliance with paragraph 51 shall constitute a material breach thereof and in the event of such non-compliance City shall have the right to terminate this Lease and the estate hereby created without liability therefore or at the election of the City or the United States either or both Governments shall have the right to judicially enforce paragraph 48.

49. Affirmative Action.

Tenant assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure that no personal shall be on the grounds of race, creed, color, national origin, or sex be excluded from participating in any employment activities covered in 14 CFR, Subpart E. Tenant assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by such subpart. Tenant assures that it will require that its covered by such subpart. Tenant assures that it will require that its covered suborganizations provide assurances to the Tenant that they similarly will undertake affirmative action programs and that they will require assurances from their suborganizations, as provided by 14 CFR Part 152, subpart 2, to the same effect.

50. Subordination to Future FAA Agreements.

This Lease shall subordinate to the provisions and requirements of any existing or future agreement between the City and the United States, relative to the development, operation or maintenance of the Airport.

51. Notice to Federal Aviation Administration.

Tenant shall comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations in the event of future construction of a building planned for the Premises, or in the event of any planned modification or alteration of any present or future building or structure situated on the Premises.

52. Non-Exclusive Right.

It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308 of the Federal Aviation Act.

53. Terms.

All the provisions of this Lease shall be deemed and construed to be “covenants” as though the words imported such covenants were used in each separate paragraph hereof, except when expressed as conditions.

54. Governing Law.

DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

This Lease shall be construed and enforced in accordance with the laws of the State of California.

55. Binding Effect.

This Lease and the covenants and agreements herein contained shall bind and inure to the benefit of the parties hereof, their heirs, successors, executors, administrators, and when permitted assigns.

56. Time is of the Essence.

Time is of the essence regarding this Lease.

57. Consent.

Whenever consent or approval of either party is required, that part shall not unreasonably withhold such consent or approval.

58. Corporate Status.

If either party is a corporation, that party shall deliver to the other party on execution of this Lease, a certified copy of a resolution of its governing body authorizing the execution of this Lease and naming the officers that are authorized to execute this Lease on behalf of the corporation.

59. Brokers.

Each party represents that it has not had dealings with any real estate broker, finder, or other party, with respect to this Lease in any manner. Each party shall hold harmless the other party from all damages resulting from any claims that may be asserted against the other party by any broker, finder, or other person, with whom the other party has or purportedly has dealt.

60. Exhibits.

All exhibits referred to are attached to this Lease and incorporated by reference.

61. Entire Agreement.

This Lease contains the entire agreement of the parties, and by signing this Lease they agree that there is no other written or oral agreement, promise, or representation between them respecting the Premises. This Lease shall bind and inure to the benefit and advantage of the assigns of City, and of the heirs, executors, administrators, and when permitted hereunder the assigns of Tenant.

DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above written.
“City”

CITY OF WATSONVILLE,
a charter city and municipal corporation
By:

Tamara Vides
Interim City Manager
“Tenant” Page 20 of 21
ARTT Paint Supplies, LLC
a California limited liability company
By:

Teohodolfo Berreza
Owner
ATTEST:

By:

Irwin I. Ortiz, City Clerk
APPROVED AS TO FORM:

Samantha Zutler, City Attorney
DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8 5/8/2024 | 4:12 PM PDT

EXHIBIT “A-1”
DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

EXHIBIT “A-2”
DocuSign Envelope ID: 8213664E-DB76-49DB-9871-7EEAC76228D8

05/09/2024
KBK Insurance Agency
1006 Freedom Boulevard
Watsonville CA 95076
Niki Duarte
(831) 724-1085 (831) 724-1089
[email protected]
Artt Paint Supplies LLC
Watsonville CA 95076-2609
Hartford Underwriters Ins. Co. 30104
Markel Insurance Company 38970
CL245912690
A Y Y 57SBABE9AS1 05/08/2024 05/08/2025
2,000,000
1,000,000
10,000
2,000,000
4,000,000
4,000,000
B Y MWC0226408-01 05/20/2024 05/20/2025
1,000,000
1,000,000
1,000,000
City of Watsonville
275 Main St Ste 400
Watsonville CA 95076

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

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

INSURER(S) AFFORDING COVERAGE
INSURER F :

INSURER E :

INSURER D :

INSURER C :

INSURER B :

INSURER A :

NAIC #
NAME:

CONTACT
(A/C, No):

FAX
E-MAIL
ADDRESS:

PRODUCER
(A/C, No, Ext):

PHONE

INSURED
COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

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

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

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

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

OTHER:
(Per accident)
(Ea accident)
$
$
N / A
SUBR
WVD
ADDL
INSD

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

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

PROPERTY DAMAGE
BODILY INJURY (Per accident)
BODILY INJURY (Per person)

COMBINED SINGLE LIMIT

AUTOS ONLY

AUTOS ONLY AUTOS

NON-OWNED

OWNED SCHEDULED

ANY AUTO

AUTOMOBILE LIABILITY
Y / N

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
OFFICER/MEMBER EXCLUDED?
(Mandatory in NH)
DESCRIPTION OF OPERATIONS below
If yes, describe under

ANY PROPRIETOR/PARTNER/EXECUTIVE
$
$
$
E.L. DISEASE - POLICY LIMIT
E.L. DISEASE - EA EMPLOYEE
E.L. EACH ACCIDENT
ER
OTHSTATUTEPER
(MM/DD/YYYY) LIMITS

POLICY EXP
(MM/DD/YYYY)

POLICY EFF

LTR TYPE OF INSURANCE POLICY NUMBER
INSR
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

EXCESS LIAB
UMBRELLA LIAB EACH OCCURRENCE $
AGGREGATE $
$
OCCUR

CLAIMS-MADE
DED RETENTION $
PRODUCTS - COMP/OP AGG $
GENERAL AGGREGATE $
PERSONAL & ADV INJURY $
MED EXP (Any one person) $
EACH OCCURRENCE $

DAMAGE TO RENTED
PREMISES (Ea occurrence) $

COMMERCIAL GENERAL LIABILITY

CLAIMS-MADE OCCUR
GEN'L AGGREGATE LIMIT APPLIES PER:

POLICY
PROJECT LOC

CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY)

CANCELLATION

AUTHORIZED REPRESENTATIVE
ACORD 25 (2016/03)
© 1988-2015 ACORD CORPORATION. All rights reserved.

CERTIFICATE HOLDER
The ACORD name and logo are registered marks of ACORD
HIRED

AUTOS ONLY

Declarations:

Business Liability Coverage Part
Form: SC 00 01 10 18 8
Your policy includes the liability coverages listed below. The limits in the right-hand column show the maximum amount we’ll pay.

FORM NUMBER FORM NAME LIMIT OF INSURANCE
SL 00 00 10 18 BUSINESS LIABILITY COVERAGE FORM
Damage To Premises Rented To You Limit $1,000,000
General Aggregate Limit $4,000,000
Liability and Medical Expenses Limit $2,000,000
Medical Expenses Limit $10,000
Personal and Advertising Injury Limit $2,000,000
Products-Completed Operations Aggregate Limit $4,000,000 Property Damage Liability Deductible No Deductible

ADDITIONAL BUSINESS LIABILITY COVERAGES
SL 30 43 10 18 ADDITIONAL INSURED - MANAGERS OR LESSORS OF

PREMISES
SL 30 22 10 18 TENANT'S LEGAL LIABILITY COVERAGE $1,000,000 SL 30 03 10 18 WAIVER OF SUBROGATION See schedule below

BUSINESS LIABILITY SCHEDULES
Form Number Form Name Description Additional Details
SL 30 03 10 18 WAIVER OF SUBROGATION City of Watsonville Location: 275 Main St STE 400, Watsonville, CA 95076

ADDITIONAL INSUREDS SCHEDULES
Form Number Form Name
Additional Insured Name
and Address
Location
SL 30 43 10 18 ADDITIONAL INSURED -

MANAGERS OR LESSORS OF

PREMISES
City of Watsonville
275 Main St STE 400, Watsonville,
CA 95076
240 AIRPORT BLVD,
FREEDOM, CA 95019-2614
BLDG 001

ALL OTHER BUSINESS LIABILITY FORMS
Form Number Form Name
SL 20 06 10 18 EXCLUSION - NUCLEAR ENERGY LIABILITY
SL 20 78 10 18 EXCLUSION - SILICA - BUSINESS LIABILITY COVERAGE FORM BUSINESS LIABILITY COVERAGE PREMIUM: $623*
* Price is subject to fees and surcharges. For more details, refer to Page 10

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

Form SL 30 43 10 18 Page 1 of 1
© 2018, The Hartford
(May include copyrighted material of Insurance Services Office, Inc., with its permission) ADDITIONAL INSURED – MANAGERS OR LESSORS OF PREMISES
This endorsement modifies insurance provided under the following:

BUSINESS LIABILITY COVERAGE FORM
Except as otherwise stated in this endorsement, the terms and conditions of the Policy apply.

A. The following is added to Section C. WHO IS AN INSURED:

Additional Insured – Manager Or Lessors Of Premises
a. The person(s) or organization(s) shown on the Declarations as an Additional Insured – Managers Or Lessors Of Premises is also an additional insured, but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Declarations. b. If coverage provided to these additional insureds is required by a written contract or written agreement, or when required by a written permit issued by a state or governmental agency or subdivision or political subdivision, the insurance afforded to these additional insureds will not be broader than that which you are required by the contract, agreement, or permit to provide for these additional insureds. c. The insurance afforded to these additional insureds only applies to the extent permitted by law.

B. With respect to the insurance afforded to such additional insureds by this endorsement, the following exclusion is added to Section B. EXCLUSIONS:

This insurance does not apply to:
(1) Any “occurrence” that takes place after you cease to be a tenant in that premises described in the Declarations; or
(2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization.

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

Form SL 30 03 10 18 Page 1 of 1
© 2018, The Hartford
(May include copyrighted material of Insurance Services Office, Inc., with its permission)

WAIVER OF SUBROGATION
This endorsement modifies insurance provided under the following:

BUSINESS LIABILITY COVERAGE FORM
Except as otherwise stated in this endorsement, the terms and conditions of the Policy apply.

The following is added to Section E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS:

We waive any right of recovery we may have against:
a. Any person or organization shown in the Declarations, or b. Any person or organization with whom you have a contract that requires such waiver.

5/23/2024 8:45:29 PM
C:\Program Files\eSCRIBE\TEMP\20452558627\20452558627,,,Report - 2024 Affordable Housing Program Limits.docx Agenda Report
MEETING DATE: Tuesday, May 28, 2024
TO: City Council
FROM: COMMUNITY DEVELOPMENT DIRECTOR MERRIAM

CARLOS LANDAVERRY, HOUSING MANAGER
SUBJECT: 2024 AFFORDABLE HOUSING PROGRAM LIMITS
RECOMMENDED ACTION:

It is recommended that the City Council of the City of Watsonville, and City Council acting as the Successor Housing Agency adopt a resolution establishing the 2024 Maximum Income, Rent, and Sales Price Limits for the Watsonville Affordable Housing Program.

BACKGROUND:

The Affordable Housing Ordinance (“Ordinance”), codified in Chapter 14-46 of the Watsonville Municipal Code, requires that 15% to 20% of the new housing built in the City be affordable to median to above moderate-income households (as defined in the Ordinance). The housing units regulated by this Ordinance are generally considered affordable, inclusionary and/or deed restricted units. The Ordinance also includes formulas for determining maximum income, rent and sale price limits to be used by the City’s Affordable Housing Program (“Program”).

Per the City Ordinance, the Program limits are based on the official State Income Limits as published by the State Department of Housing and Community Development (HCD). The Ordinance defines the “Watsonville median income limit” at 70% of the Santa Cruz County median income limit. This local adjustment means that the names of the Watsonville income categories do not match the state/federal income category names. The State limits are based on U.S. Census Bureau estimates for each county, which are adjusted by the U.S.

Department of Housing and Urban Development (HUD) and HCD for the purpose of administering State and Federal programs.

DISCUSSION:

HCD recently released the 2024 Official State Income Limits and given that HUD’s limits and the economic and housing market have changed, a modification in the sales price limits for the City’s Program is warranted at this time. Also included in the new 2024 Watsonville Affordable Housing Program Limits is a prevailing interest rate and a “Watsonville Median Home Price,” which the City’s Ordinance requires be established periodically by Council resolution. The median home price for Watsonville was based on home sale data obtained

5/23/2024 8:45:29 PM
C:\Program Files\eSCRIBE\TEMP\20452558627\20452558627,,,Report - 2024 Affordable Housing Program Limits.docx from the Multiple Listing Service and submitted by the Santa Cruz County Association of Realtors for the past twelve months from January 2023 through January 2024.

The proposed 2024 limits will take effect upon adoption by the Council and will remain in effect until new limits are adopted.

STRATEGIC PLAN:

The proposed resolution is consistent with the Housing goal in the City’s Strategic Plan by providing sufficient, quality housing opportunities and expanding housing programs for all City residents.

CEQA
The preparation of the Affordable Housing Program Limits is not a project under the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines Section 15378(b)(2), as the action does not have the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore no further review is required.

FINANCIAL IMPACT:

The recommended action will not impact the General Fund. The preparation of the Affordable Housing Program Limits is part of the Community Development Department’s budgeted work program using existing staff resources.

ALTERNATIVE ACTION:

The Council could choose not to adopt the proposed resolution, in which case the existing Affordable Housing Program limits would remain in effect.

ATTACHMENTS AND/OR REFERENCES (If any):

None

Reso No. ______ (CM)
Reso No. ______ (SHA)
Meeting Date: 052824 SWZ ______ RM ______ CDD ______
1 RESOLUTION NO.__________ (CM)
RESOLUTION NO.__________ (SHA)

A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE, AND CITY COUNCIL ACTING AS THE SUCCESSOR

HOUSING AGENCY ADOPTING THE WATSONVILLE AFFORDABLE
HOUSING PROGRAM 2024 INCOME, RENT AND SALES PRICE LIMITS

FOR THE CITY'S AFFORDABLE HOUSING PROGRAM AND

ESTABLISHING THE WATSONVILLE MEDIAN SALES PRICE AS
$770,076
WHEREAS, on June 26, 2001, the City Council adopted Ordinance No. 1107- 01 (CM) repealing Chapter 14-46 (Affordable Housing Ordinance) and adding a new Chapter 14-46 (Affordable Housing Ordinance) to the Watsonville Municipal Code to better meet the Goals, Policies and Programs of the Housing Element of the Watsonville 2005 General Plan; and
WHEREAS, Subsection (cc) of 14-46.030 of the Watsonville Municipal Code defines the Watsonville median household income to be seventy percent (70%) of Santa Cruz County's median household income adjusted for family size and rounded up to the nearest fifty and no/100ths ($50.00) dollar increment; and WHEREAS, the annual income data for counties is published annually by the State Department of Housing and Community Development (HCD) pursuant to Section 6932 of Title 25 of the California Code of Regulations; and
WHEREAS, Subsection (a)(2) of Section 14-46.130 and Subsection (a) of Section 14-46.140, and Subsection (f)(2) of Section 14-46.150 of the Watsonville Municipal Code provide that the Council from time to time shall adopt a resolution establishing income limits, residential rent levels and affordable sales prices for the City of Watsonville; and WHEREAS, Subsection (I) of Section 14-46.030 of the Watsonville Municipal Code provides in part that "for-sale" affordable units be sold to first time homebuyers, except

Reso No. ______ (CM)
Reso No. ______ (SHA)
Meeting Date: 052824
2 when a buyer has sold a unit within the City of Watsonville at a price that is no more than ninety-five (95%) percent of the Watsonville median sales price determined from time to time by resolution of the Council.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL AND CITY

COUNCIL ACTING AS THE SUCCESSOR HOUSING AGENCY OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Adopting a Resolution adopting the 2023 Watsonville Affordable Housing Program does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

2. That the City Council of the City of Watsonville, acting as the Successor Housing Agency hereby adopt the schedule entitled "Watsonville Affordable Housing Program 2024 Income, Rent and Sales Price Limits, attached hereto and incorporated herein as Exhibit "A," setting forth the City of Watsonville Affordable Housing Program 2024 limits for Maximum Allowable Income to Occupy Affordable Units, Maximum Allowable Residential Rent, and Maximum Allowable Home Sales Price.

3. That said schedule shall be used to determine income limits, maximum residential rents, and maximum home sales prices until changed by Council.

4. That the Watsonville Median Sales Price for a home is hereby established as $770,076 and the prevailing interest rate as 7.50 per cent until changed by Council. ********************************************

1 2 3 4 5 6 7 8
Very Low $52,100 $59,500 $66,950 $74,400 $80,350 $86,300 $92,250 $98,200 Low $65,100 $74,400 $83,650 $93,000 $100,400 $107,850 $115,300 $122,750 Median $78,100 $89,250 $100,400 $111,600 $120,500 $129,450 $138,350 $147,300 Moderate $97,600 $111,600 $125,500 $139,450 $150,600 $161,800 $172,900 $184,100 Above Moderate $110,650 $126,450 $142,250 $158,050 $170,650 $183,350 $195,950 $208,650 Studio 1 2 3 4
Very Low $813 $930 $1,046 $1,162 $1,255
Low $1,301 $1,488 $1,673 $1,859 $2,008
Median $1,627 $1,859 $2,091 $2,324 $2,510
Moderate $2,510
Studio 1 2 3 4
Median $244,880 $279,919 $314,827 $349,866 $377,792
Moderate $293,856 $335,903 $377,792 $419,840 $453,351
Above Moderate $367,320 $419,879 $472,240 $524,799 $566,689 2024 Watsonville Median Single Family Home Price:
95% of Watsonville Median Single Family Home Price:

Prevailing Interest Rate: 7.50 Per Cent
* based on MLS listings for single family homes sold in City limits from January, 2023 through January, 2024.

Income Levels % of AMI 1 2 3 4 5 6 7
Very Low 50% 63,400 72,450 81,500 90,550 97,800 105,050 112,300 Low 80% 101,750 116,250 130,750 145,300 156,950 168,550 180,200 Median 100% 92,950 106,250 119,500 132,800 143,400 154,050 164,650 Moderate 120% 111,550 127,500 1,434,050 159,350 172,100 184,850 197,600 Watsonville Affordable Housing Program
2024 Income, Rent and Sales Price Limits
Income Limits
Resale Price Limits (per Affordability Formula)
Number of Persons in Household
Income Category
Rent Limits
$770,076
$731,572
Number of Bedrooms
Income Category
SANTA CRUZ COUNTY INCOME LIMITS FOR 2024
Number of Bedrooms
Income Category
Exhibit "A"