2015-07-21 City Council Agenda PacketCalifornia Public Records Act ("PRA"): In compliance with the PRA, the documents pertaining to agenda
items, including attachments, which are presented to the City Council in open session are available for public
inspection. They may be inspected during regular business hours in the Office of the City Clerk at Vernon City
Hall, 4305 Santa Fe Avenue; Vernon, California 90058, no appointment necessary, and on the City’s website at
www.cityofvernon.org.
Americans with Disabilities Act (“ADA”): In compliance with the ADA, if you need special assistance to
participate in the meeting, please contact the Office of the City Clerk at (323) 583-8811. Notification of at least
48 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable
arrangements can be made to provide accessibility to the meeting or service.
Agenda
City of Vernon
Regular City Council Meeting
Tuesday, July 21, 2015, 9:00 a.m.
Council Chamber
4305 Santa Fe Avenue
Vernon, California
W. Michael McCormick, Mayor
William J. Davis, Mayor Pro-Tem
Luz Martinez, Council Member
Melissa Ybarra, Council Member
Yvette Woodruff-Perez, Council Member
CALL TO ORDER & FLAG SALUTE
CHANGES TO THE AGENDA
PUBLIC COMMENT - At this time the public is encouraged to address the City Council on any matter that
is within the subject matter jurisdiction of the City Council. The public will also be given a chance to comment
on matters which are on the posted agenda during City Council deliberation on those specific matters.
PRESENTATIONS
1. Personnel Matters - Service Pin Awards.
June 2015 Anniversary
Employee Name Job Title Years
Martin Sanchez Street Maintenance Worker 30
2. California Highway Patrol “10851” Grand Theft Auto Recovery Award.
Regular City Council Meeting Agenda
July 21, 2015
Page 2 of 9
3. Update on the I-710 Freeway Major Investment Study.
4. Update of Current Development Projects in the City.
CONSENT CALENDAR - All matters listed on the Consent Calendar are to be approved with one motion.
Items may be removed from the Consent Calendar by any member of the Council. Those items removed will
be considered immediately after the Consent Calendar.
Claims Against the City – Received and Filed
5. None
Minutes – To be Received and Filed
6. Minutes of the Regular City Council Meeting held June 16, 2015.
7. Minutes of the Regular City Council Meeting held July 7, 2015.
Warrant Registers
8. Ratification of City Warrant Register No. 1427 to record voided Check No. 347913 in the amount
of $1,112.67.
9. Ratification of Light & Power Warrant Register No. 392 to record voided Check No. 511473 in the
amount of $500.00.
10. Approval of City Payroll Warrant Register No. 709, totaling $2,680,161.99, which covers the
period of June 1 through June 30, 2015, and consists of the following:
A. Ratification of direct deposits, checks and taxes totaling $1,917,448.24; and
B. Checks and electronic funds transfers paid through General bank account totaling $762,713.75.
11. Approval of City Warrant Register No. 1428, totaling $1,528,651.14, which covers the period of
June 30, through July 13, 2015, and consists of the following:
A. Ratification of wire transfers totaling $1,080,305.72; and
B. Ratification of the issuance of early checks totaling $271,148.43; and
C. Authorization to issue pending checks totaling $177,196.99.
12. Approval of Light & Power Warrant Register No. 393, totaling $1,162,091.93, which covers the
period of June 30, through July 13, 2015, and consists of the following:
A. Ratification of wire transfers totaling $1,057,003.89; and
Regular City Council Meeting Agenda
July 21, 2015
Page 3 of 9
B. Ratification of the issuance of early checks totaling $55,211.40; and
C. Authorization to issue pending checks totaling $49,876.64.
13. Approval of Gas Warrant Register No. 181, totaling $421,357.32, which covers the period of June
30, through July 13, 2015, and consists of the following:
A. Ratification of wire transfers totaling $419,372.50; and
B. Ratification of the issuance of early checks totaling $1,984.82.
City Administration Department
14. A Proclamation of the Mayor and the City Council of the City of Vernon declaring the Month of
September 2015 as “Childhood Cancer Awareness Month”
15. Report on Contracts Exempt from Competitive Selection by the City Administrator.
Recommendation:
A. Find Receive and file this report as it is being provided for informational purposes only pursuant
to Section 2.17.12(B)(3) of the Vernon Municipal Code.
16. Council Conference Attendance Report to the Independent Cities Association 55th Annual
Summer Seminar.
Recommendation
A. Receive and file the Council Conference Attendance Report.
Fire Department
17. Activity Report for the period of June 16 through June 30, 2015, to be received and filed.
Health and Environmental Control Department
18. June 2015 Monthly Report, to be received and filed.
19. Receipt and Review of the Annual City of Vernon Jail Inspection Report to the California Board
of Corrections.
Recommendation:
A. Find the submittal and review of the subject documents is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with section 15061(b)(3), the general rule
that CEQA only applies to projects that may have an effect on the environment; and
B. Receive and File the 2015 Annual City of Vernon Jail Inspection Report.
Regular City Council Meeting Agenda
July 21, 2015
Page 4 of 9
Police Department
20. Activity Log and Statistical Summary of Arrests and Activities for the period of June 16, through
June 30, 2015, to be received and filed.
NEW BUSINESS
City Administration Department
21. Approval and Authorization of a Local Cash Match Commitment Letter with Southern California
Association of Governments (SCAG) regarding the Los Angeles River Bikeway Feasibility Study.
Recommendation:
A. Find that the recommended actions are exempt from the California Environmental Quality Act
(“CEQA”), because (a) approval of the Local Cash Match Commitment Letter is not an “approval”
as defined by Section 15352 due to its conditional nature; and (b) the City of Vernon is neither the
“lead agency” as defined in Sections 15051 and 15367 nor a “responsible agency” as defined in
Section 15381. Moreover, the actions recommended are statutorily exempt from CEQA review
under CEQA Guidelines Section 15262, because it only involves a feasibility study for possible
future actions which the City of Vernon has not approved, adopted, or funded; and
B. Approve and Authorize the City Administrator to execute the Local Cash Match Commitment
Letter with SCAG.
City Attorney Department
22. Approval of an Amendment No. 1 to the Attorney Services Agreement between the City of Vernon
and Liebert Cassidy Whitmore to provide personnel and labor law attorney services.
Recommendation:
A. Find that approval of the proposed Attorney Services Agreement with Liebert Cassidy Whitmore
is exempt under the California Environmental Quality Act (“CEQA”) in accordance with CEQA
Guidelines section 15061(b)(3), the general rule that CEQA only applies to projects that may have
an effect on the environment; and
B. Authorize the City Administrator to enter into an Amendment No. 1 to the Attorney Services
Agreement between the City of Vernon and Liebert Cassidy Whitmore, in substantially the same
form as submitted with the staff report, for an additional one-year period in an amount not to
exceed $150,000.00.
/ / /
/ / /
/ / /
Regular City Council Meeting Agenda
July 21, 2015
Page 5 of 9
City Clerk Department
23. A Resolution of the City Council of the City of Vernon updating City staff members’ appointments
to various external agencies and/or committees.
Recommendation:
A. Find that approval of the proposed Resolution updating Staff’s appointments does not constitute a
“project” pursuant to section 15378(b)(2) of the Guidelines to the California Environmental
Quality Act (“CEQA”), because it constitutes an administrative activity; and even if the adoption
of the proposed resolution did constitute a project, it would be exempt from CEQA in accordance
with Section 15061(b)(3), the general rule that CEQA only applies to projects that may have an
effect on the environment; and
B. Appoint Staff as delegate(s) and alternate(s) to the following boards of various agencies and/or
committees as follows; and
1. Gateway Region Integrated Water Management Joint Power Authority also known
as Gateway Water Management Authority Policy Board.
Appoint Director of Public Works, Water and Development Services as the delegate; and
appoint as alternates, Public Works and Water Superintendent and Stormwater and Special
Projects Analyst.
Previous appointment at the October 2, 2007 City Council Meeting: Kevin Wilson as the
delegate; and Scott Rigg and Woody Natsuhara as the alternates.
2. Southern California Public Power Authority.
Appoint Director of Gas and Electric as the delegate; and appoint as alternates the Electrical
Resources Planning & Development Manager and the Utilities Compliance Manager.
Previous appointment, pursuant to Resolution No. 9845: Donal O’Callaghan as the
delegate; Abraham Alemu as the alternate.
3. LA-RICS Authority.
Appoint City Administrator as the delegate, with the authorization to designate a proxy to
vote on behalf of the City.
Previous appointment, pursuant to Resolution No. 9883: Eric Fresch as the delegate; Steve
Towles through letters dated March 30, 2009 and May 11, 2009 appointed as proxy.
C. Adopt a Resolution of the City Council of the City of Vernon designating and appointing its
representatives and alternates to the various boards of the above referenced agencies to represent
the City of Vernon.
/ / /
/ / /
/ / /
Regular City Council Meeting Agenda
July 21, 2015
Page 6 of 9
Fire Department
24. Approval to Lease Two (2) 2016 Pierce PUC Triple Combination Pumpers for the Fire
Department.
Recommendation:
A. Find that approval of the proposed lease is exempt under the California Environmental Quality
Act (“CEQA”), because the proposed action is an administrative activity that will not result in
direct or indirect physical changes in the environment and therefore does not constitute a “project”
as defined by CEQA Guidelines section 15378. Furthermore, even if it were a project, this action
would be exempt from CEQA review pursuant to CEQA Guidelines section 15061(b)(3), the
general rule that CEQA only applies to projects that may have an effect on the environment; and
B. Approve and authorize the execution of a ten (10) year Lease-Purchase Agreement with Oshkosh
Capital in the amount of $1,321,836.49, in substantially the same form as submitted with the staff
report, for two (2) 2016 Pierce PUC Triple Combination Pumpers for the Fire Department that will
replace two current engines that were purchased in 1989 and no longer meet the needs of the
department.
Gas and Electric Department
25. Approve the Antelope DSR 1 Solar Project – Power Sales Agreement by and between the City of
Vernon and the Southern California Public Power Authority.
Recommendation:
A. Find that approval of the Power Sales Agreement (“Agreement”) by and between the City of
Vernon (“City”) and the Southern California Public Power Authority (“SCPPA”) in connection
with the Antelope DSR 1 Solar Project is not subject to the California Environmental Quality Act
(“CEQA”) under Guidelines Section 15061(b)(3), the general rule that CEQA only applies to
projects that may have an effect on the environment. Purchasing power is purely a financial
transaction, and any construction that may occur by a private party in the future in reliance on this
approval would be subject to CEQA review by another governmental agency at the time when
actual details of any physical proposal would be more than speculative; and
B. Approve and authorize the Director of Gas and Electric to execute the Agreement by and between
the City and the SCPPA, in substantially the same form as attached to the staff report, for the
purpose of purchasing solar power with associated green attributes in compliance with the
Renewable Resources Procurement Plan and Enforcement Program in force at the City. The terms
include the purchase of 25 megawatts of solar power for a term of 20 years beginning with the
project commercial operation date; and
C. Approve and authorize the Director of Gas and Electric to execute the Purchase Option Agreement
and the Storage Option Agreement (“Option Agreements”) by and between the City of Vernon
and SCPPA in substantially the same form as attached to the staff report; and
D. Find that approval of the power sales agreement and the option agreements comply with the
competitive bidding requirements of the Vernon Municipal Code in that: (a) Vernon Municipal
Regular City Council Meeting Agenda
July 21, 2015
Page 7 of 9
Code § 2.17.12(A)(6) exempts these contracts from the competitive bidding requirements because
each is categorized as a “contract for the acquisition, sale or transmission of electrical power”; and
(b) these contracts are between SCPPA (a joint powers agency) and Vernon, and Vernon Municipal
Code 2.17.12(A)(5) exempts these contracts and all other “contracts with other governmental
entities or their contractors for labor, materials or supplies”. Further, find that approval of these
contracts is consistent with the purposes of the City’s purchasing regulations because SCPPA
conducted a competitive process and received several proposals, of which, the Antelope DSR 1
Solar Project was the lowest priced project for projects under 100 megawatts, and the project is
scheduled to begin commercial operation in third quarter of 2016.
Human Resources Department
26. Adoption of City of Vernon Personnel Policies and Procedures, Hours of Work II-4 (new) and
Personnel Records and General Personnel Files III-2 (new).
Recommendation:
A. Find that approval of the proposed personnel policy and procedures is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the general rule
that CEQA only applies to projects that may have a significant effect on the environment; and
B. Adopt the Personnel Policy and Procedures, Hours of Work II-4 (new), Personnel Records and
General Personnel Files III-2 (new) and incorporate into the Personnel Policies and Procedures
Manual; and
C. Authorize the City Administrator and the Director of Human Resources to execute and distribute
the above-referenced policies to all employees.
ORDINANCES
27. Ordinance No. 1230- An Ordinance of the City Council of the City of Vernon amending section
2.123(a) Of Article XVII of Chapter 2 of the Vernon Municipal Code relating to the Vernon
Housing Commission. (second reading)
Recommendation:
A. Find that the recommended actions are exempt from the California Environmental Quality Act
(“CEQA”) in accordance with Section 15061(b)(3), the general rule that CEQA only applies to
projects that may have an effect on the environment; and
B. Adopt the Ordinance to amend Section 2.123(a) of the Vernon Municipal Code to establish
Commission Member terms to run from July 1 through June 30, effective July 1, 2019 for four of
the seven seats, and effective July 1, 2021 for the three remaining seats; and
C. Include uncodified sections to establish the following upcoming terms in order to fully effectuate
the July 1 through June 30 terms:
Regular City Council Meeting Agenda
July 21, 2015
Page 8 of 9
Appointing Category Term
Resident/Council Member August 11, 2017 – June 30, 2021
Resident No. 1 August 11, 2017 – June 30, 2021
Resident No. 2 August 11, 2015 – June 30, 2019
Business Representative No. 1 August 11, 2015 – June 30, 2019
Business Representative No. 2 August 11, 2017 – June 30, 2021
Business Representative No. 3 August 11, 2015 – June 30, 2019
Employee of Vernon Business August 11, 2015 – June 30, 2019
DISCUSSION ITEM AND POSSIBLE DIRECTIVES TO STAFF
28. Discussion of Proposed Elimination of Priority for First Responders in Leasing City-Owned
Housing.
Recommendation:
A. Hold a discussion regarding the joint recommendation made by the Housing Commission and City
staff to eliminate the priority for first responders in leasing City-owned housing.
B. If the City Council concurs with the aforementioned recommendation, direct staff to prepare an
ordinance to amend Section 2.125(b) of the Vernon Municipal Code to remove the first responder
leasing priority, effective at 5:01 p.m. on December 8, 2015.
ORAL REPORTS
29. City Administrator Reports – brief reports on activities and other brief announcements by the City
Administrator and Department Heads.
30. City Council Reports – brief report on activities, announcements, or directives to staff.
CLOSED SESSION
31. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION
Significant Exposure to Litigation.
Government Code Section 54956.9(d)(2) & (4)
Number of potential cases: 1
The City is a real party in interest in litigation likely to be brought by certain environmental groups to
challenge a final order of the State Water Board in connection with a municipal storm sewer system
permit order. Pursuant to state law, the environmental groups have until July 27, 2015 to initiate the
litigation to challenge the administrative body’s final order.
Regular City Council Meeting Agenda
July 21, 2015
Page 9 of 9
32. CONFERENCE WITH REAL ESTATE NEGOTIATIONS
Government Code Section 54956.8
Property: 3200 Fruitland Ave Vernon, CA
Agency Negotiator: Mark Whitworth, City Administrator/Alex Kung Economic Development Manager
Negotiating Party: 3200 Fruitland GAP, LLC, Xebec
Under Negotiation: Price and Terms of Assignment and Assumption of Purchase and Sale Agreement
33. CONFERENCE WITH REAL ESTATE NEGOTIATIONS
Government Code Section 54956.8
Property: 3200 Fruitland Ave Vernon, CA
Agency Negotiator: Mark Whitworth, City Administrator/Alex Kung Economic Development Manager
Negotiating Party: PI Fruitland, LLC
Under Negotiation: Price and Terms of Assignment and Assumption of Purchase and Sale Agreement
ADJOURNMENT
I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda was
posted on the bulletin board at the main entrance of the City of Vernon City Hall, located at 4305 Santa Fe Avenue,
Vernon, California, and on the City’s website, not less than 72 hours prior to the meeting set forth on this agenda.
Dated this 16th day of July 2015.
By: ________________________________
Maria E. Ayala
City Clerk
JUL 0I 2015 STAFF REPORT
CITY CLEIIK,S OFFIC UMAN RE56URCES DEPARTMENT
July 21,2015
Honorable Mayor and City Council
Teresa McAllister, Director of Human Resources O"nu.t-"{{d
Originator: Veronica Avendano, Administrative Secretary
Service Pin Awards for June 2015
RECEIVED
JUL 0 6 2015
CITY ADMINISTRATION
DATE:
TO:
FROM:
RE:
Reconmendation
A. City Council to present service pins to those employees hired in June.
Background
Submitted herewith lists the employees who are eligible to receive their service pin based on the
number of service years with the City of Vemon.
Fiscal Impact
None.
Attachment(s)
l. June 2015 Service Pin employee list.
Page I of 1
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STAFF REPORT
RECEIVED
JUL 0 6 2015
VERNON POLICE DEPARTMENT CITY ADMINISIRATION
July 21,2015
Honorable Mayor and Council Members
Daniel Calleros, Chief of Police &'
10851 Grand Theft Auto Award Presentation
Recommendation
The Vernon Police Department (VPD) in conjunction with a representative from tLe Califomia
Highway Patrol (CHP) will conduct an award presentation for the recipient of the CHP "10851'
Grand Theft Auto Recovery Award.
BackEround
The '10851' Grand Theft Auto Award is named after the California Vehicle Code section relating
to the theft of motor vehicles. The award is sponsored in collaboration bet\.pen by the CHP and
AA/A In5ussn66, and recognizes police officers throughout Califomia who have Leen proactive in
recovering stolen vehicles and apprehending criminals specifically involved in auto theft.
The 10851 pin is awarded to uniform officers who, during a 12-month period, have achieved any
of the following criteria:
1. Made six separate theft recoveries cleared by anests.
2. Recover twelve (12) stolen vehicles, of which a minimum of three (3) mtJst be cleared by
arrests.
Vernon Police Officer Fernando Valenzuela has achieved this benchmark once again. This will
be his ninth award under this program. fficer Valenzuela is very proactive in auto theft
investigations and is a leader in annual auto theft anests. Very few officers ever receive this
award given the specific requirements.
Fiscal lmpact
There is no fiscal impact to the City general budget.
Attachment(s)
None
DATE:
REctr-[\/lE,D
JUL 0I 20i5
CIY CLERKS OffICE
DATE:
TO:
FROM:
RE:
RECEIVED
JUL 0I 20t5
CITY ADMINISTRATION
STAFF REPORT
PUBLIC WORKS, WATER & DEVELOPMENT SERVICES
July 21,2015
Honorable Mayor and City Council
AV,)
Samuel Kevin Wilsonl Director of Public Works, Water, and Development
Services
Update on the I-710 Freeway Major Investment Study
Discussion Item
Members of City Council have expressed an interest in being updated on the I-710 Major
Investment Study. A representative from AECOM will give a presentation on the project
outlining the proposed improvements through the City of Vernon. After the presentation the City
Council may direct the Mayor or staff to submit comments and or input on behalf of the City to
Caltrans on the proposed project alternatives.
Background
The Los Angeles County Metropolitan Transportation Authority (METRO), the State of
California Department of Transportation (Caltrans) and the Gateway Council of Governments
have been working cooperatively for the past decade on preparing a Major lnvestment Study for
the I-710 freeway. This study looks at alternative improvements to the I-710 to provide
sufficient capacity for future traffic. A representative from AECOM, the lead engineering firm
on the project, will provide an update on the project. Once a set of final alternatives are selected
an Environmental Impact Report (EIR) will be prepared to determine potential impacts the
project may have on neighboring communities, including impacts on air quality, water quality,
traffic, noise, vibration and aesthetics.
Attachment(s)
1. None.
Page I of I
REGE!VIED
JUL-O 9 ZOi5
RECEIVED
JUL O E 2OI5
CITY ADMINISTRATION
CITY CLEtir('S (]FFICE STAFF REPORT
PUBLIC WORKS, WATER & DEYELOPMENT SERVICES
DEPARTMENT
DATE:
TO:
FROM:
RE:
July 21,2015
Honorable Mayor and City Council
5ttt)
Samuel Kevin Wilson,- Director of Public Works, Water, and Development
Services
Update of Current Development Projects in the City of Vernon
Discussion Item
Members of City Council have expressed an interest in being advised ofnew development
projects taking place in the City of Vemon. An oral Report will be given by the Director of
Public Works, Water and Development Services on the current status of development projects
within the City.
Background
City staff has been working with a number of developers that are proposing to construct new
buildings within the City. City staff proposes to give the City Council an update on the projects
currently proposed. These projects are in various stages of development and range from the
concept stage to projects that have recently been completed. Below is a snap shot of projects
under some stage of development at this point in time:
5000 Pacific Boulevard (Whole Foods)
5592 Santa Fe Avenue (Commercial Facility)
5l 19 District Boulevard @acific District Center)
3200 Slauson Avenue (Alcoa Crossing Business Center)
5001 Soto Street
4700 Alcoa Avenue (Bon Appetit)
4490 Ayers Avenue
4620 Seville Avenue
3270 Washington Boulevard
3200 Fruitland Avenue (rPlanet Earth - Recycting facility)
5370 Boyle Avenue
l8l0 256 Street (CommerciaVRetail Center)
3305 Bandini Boulevard (Nature's Produce)
3480 26ft Street
Page 1 of2
' 2910 Ross Street (Moriah Trading, Inc.)
Attachment(s)
1. None.
Page 2 of 2
MINUTES OF THE REGULAR CITY COUNCIL MEETING OF THE
CITY OF VERNON HELD TUESDAY, JUNE 16, 2015, IN THE
COUNCIL CHAMBER OF THE CITY HALL LOCATED AT 4305
SANTA FE AVENUE, VERNON, CALIFORNIA
MEMBERS PRESENT: McCormick, Davis, Martinez, Ybarra, and Woodruff-Perez
MEMBERS ABSENT: None
The meeting was called to order at 9:00 a.m. by Mayor McCormick. Fire Chief Michael Wilson
led the flag salute.
CHANGES TO THE AGENDA
Mayor McCormick announced there were no changes to the agenda.
PUBLIC COMMENT
Mayor McCormick announced that this was the time allotted for public comment, and inquired
whether anyone in the audience wished to address the City Council. The public will also be given
an opportunity to comment on matters on the posted agenda during Council deliberation.
No public comment provided.
PRESENTATIONS
1. Personnel Matters - Service Pin Awards.
May 2015 Anniversary
Employee Name Job Title Years
1. Jose Zermeno Street Maintenance Worker 10
2. Marisela Martinez Purchasing Assistant 15
Director of Human Resources Teresa McAllister reported on the item; no recognized employees
were in attendance.
2. Update of Eco Rapid Transit / West Santa Ana Branch Transit Corridor.
Director of Public Works Water and Development Services Kevin Wilson conducted the
presentation.
PUBLIC HEARING
3. Public Hearing on the adoption of the City of Vernon Fiscal Year 2015-16 State
Appropriation Limit, following Article XIIIB of the State Constitution (often
referred to as the Gann Limit).
Resolution No. 2015-35 - A Resolution of the City Council of the City of Vernon
adopting an Appropriation Limit for the 2015-2016 fiscal year, pursuant to
Government Code Section 7910.
Recommendation upon conclusion of the Public Hearing:
A. Find that adoption of the proposed Fiscal Year 2015-2016 Appropriation Limit is
exempt under the California Environmental Quality Act (CEQA) in accordance
with Section 15061(b)(3), the general rule that CEQA only applies to projects that
may have an effect on the environment; and
B. Adopt a resolution of the City Council of the City of Vernon Adopting an
Appropriation Limit for the 2015-2016 Fiscal Year, Pursuant to Government Code
Regular City Council Meeting Minutes
June 16, 2015
Page 2 of 14
Section 7910, (establishing the City’s Appropriation Limit for the Fiscal Year
2015-2016 in the amount of $1,032,001,666 based on the percentage growth in the
State Per Capita Personal Income and County Population).
Mayor McCormick read the title of the resolution, and opened the public hearing at approximately
9:25 a.m.
Finance Director William Fox provided an oral report on the resolution.
No public comment was provided.
Mayor McCormick closed the public hearing at approximately 9:29 a.m.
It was moved by Davis and seconded by Martinez to approve Resolution No. 2015-35. Motion
carried, 5-0.
4. Public Hearing on the approval of a Variance Application for Alcoa Bel Air, LLC
located at 4700 Alcoa Avenue.
Resolution No. 2015-36 - A Resolution of the City Council of the City of Vernon
approving a variance to Alcoa Bel Air, LLC from Section 26.5.1-6(d) of the Vernon
City Code, for the property located at 4700 Alcoa Avenue
Recommendation upon conclusion of the Public Hearing:
A. Find that approval of the proposed variance is categorically exempt under the
California Environmental Quality Act (CEQA) in accordance with Class 32,
Section 15332, “In-Fill Development Projects,” because: (i) the Project is
consistent with the City’s General Plan and zoning regulations, (ii) the proposed
development occurs within City limits on a project site of no more than five acres
substantially surrounded by urban uses, (iii) the Project site has no value, as habitat
for any endangered, rare or threatened species, (iv) approval of the Project would
not result in any significant effects relating to traffic, noise, air quality, or water
quality; and (v) the site can be adequately served by all required utilities and public
services; and
B. Adopt a Resolution of the City Council of the City of Vernon approving a variance
to Alcoa Bel Air, LLC from Section 26.5.1-6(d) of the Vernon City Code, for the
property located at 4700 Alcoa Avenue.
Mayor McCormick read the title of the resolution and opened the public hearing at approximately
9:30 a.m.
Director of Public Works, Water and Development Services Kevin Wilson provided a PowerPoint
presentation on the proposed construction of the site.
Mayor Pro-Tem Davis inquired as to whether or not any response was received on this via mail or
otherwise? Mr. Wilson responded that no public input was received on this matter.
No public comment was provided.
Mayor McCormick closed the public hearing at approximately 9:38 a.m.
It was moved by Ybarra and seconded by Martinez to approve Resolution No. 2015-36. Motion
carried, 5-0.
5. Public Hearing on the approval of a Conditional Use Permit and Variance for Core
Investments, LLC located at 5592 Santa Fe Avenue.
Regular City Council Meeting Minutes
June 16, 2015
Page 3 of 14
Resolution No. 2015-37 - A Resolution of the City Council of the City of Vernon
approving a conditional use permit and variance for Core Investments, LLC to
construct and operate a commercial facility located at 5592 Santa Fe Avenue
Recommendation upon conclusion of the Public Hearing:
A. Find that approval of the Conditional Use Permit and variance proposed in this staff
report is exempt under the California Environmental Quality Act (CEQA) in
accordance with Class 32, Section 15332, “In-Fill Development Projects,” because:
(i) the Project is consistent with the City’s General Plan and zoning regulations, (ii)
the proposed development occurs within City limits on a project site of no more
than five acres substantially surrounded by urban uses, (iii) the Project site has no
value, as habitat for any endangered, rare or threatened species, (iv) approval of the
Project would not result in any significant effects relating to traffic, noise, air
quality, or water quality; and (v) the site can be adequately served by all required
utilities and public services. Therefore, the Project complies with the findings listed
above and may be considered exempt from the California Environmental Quality
Act under Section 15332 of the CEQA Implementation Guidelines; and
B. Adopt a Resolution of the City Council of the City of Vernon Approving a
Conditional Use Permit and Variance for Core Investments, LLC to Construct and
Operate a Commercial Facility Located at 5592 Santa Fe Avenue.
Mayor McCormick read the title of the resolution and opened the public hearing at approximately
9:39 a.m. a.m.
Mr. Wilson provided a PowerPoint presentation, and answered questions from the Council
regarding: curb requirements, community response, etc.
No public comment was provided.
Mayor McCormick closed the public hearing at approximately 9:51 a.m.
It was moved by Ybarra and seconded by Martinez to approve Resolution No. 2015-37. Motion
carried, 5-0.
CONSENT CALENDAR
Independent Reform Monitor John Van de Kamp inquired about Agenda Item No. 17, 2014 Traffic
Collisions Review, and how the report’s data is used. Mr. Wilson and Police Chief Calleros
responded.
It was moved by Davis and seconded by Woodruff-Perez to approve all matters listed under the
Consent Calendar under one motion as presented. Motion carried, 5-0.
Claims Against the City – Received and Filed
6. None
Minutes – To be Received and Filed
7. Minutes of the Regular City Council Meeting held May 19, 2015.
8. Minutes of the Regular City Council Meeting held June 2, 2015.
Warrant Registers
9. Approval of City Payroll Warrant Register No. 708, totaling $2,823,369.58, which
covers the period of May 1 through May 31, 2015, and consists of the following:
A. Ratification of direct deposits, checks and taxes totaling $2,027,903.11; and
Regular City Council Meeting Minutes
June 16, 2015
Page 4 of 14
B. Checks and electronic funds transfers paid through General bank account totaling
$795,466.47.
10. Approval of City Warrant Register No. 1426, totaling $739,141.26, which covers the
period of May 26 through June 8, 2015, and consists of the following:
A. Ratification of wire transfers totaling $388,181.10; and
B. Ratification of the issuance of early checks totaling $131,733.89; and
C. Authorization to issue pending checks totaling $219,226.27.
11. Approval of Light & Power Warrant Register No. 391, totaling $3,121,347.12, which
covers the period of May 26 through June 8, 2015, and consists of the following:
A. Ratification of wire transfers totaling $2,896,630.03; and
B. Ratification of the issuance of early checks totaling $111,382.78; and
C. Authorization to issue pending checks totaling $113,334.31.
12. Approval of Gas Warrant Register No. 179, totaling $554,822.82, which covers the
period of May 26 through June 8, 2015, and consists of the following:
A. Ratification of wire transfers totaling $518,663.15; and
B. Ratification of the issuance of early checks totaling $24,538.68; and
C. Authorization to issue pending checks totaling $11,620.99.
City Administration Department
13. Report on Docket III Grants Awarded by Vernon CommUNITY Fund Grant
Committee.
Recommendation:
A. Receive and file the report as it is being provided for information purposes only
pursuant to section 2.167(e) of the Vernon Municipal Code.
Fire Department
14. Activity Report for the period of May 16 through May 31, 2015, to be received and
filed.
Health and Environmental Control Department
15. May 2015 Monthly Report, to be received and filed.
Police Department
16. Activity Log and Statistical Summary of Arrests and Activities for the period of
May 16, through May 31, 2015, to be received and filed.
Public Works, Water and Development Services Department
17. Receive and file the City of Vernon 2014 Traffic Collisions Review.
Regular City Council Meeting Minutes
June 16, 2015
Page 5 of 14
Recommendation:
A. Find that the acceptance of the 2014 Traffic Collisions Review is categorically
exempt under the California Environmental Quality Act (CEQA) in accordance
with Section 15306 (Class 6) which consists of basic data collection, research,
experimental management and resource evaluation activities which do not result in
a serious or major disturbance to an environmental resource; and
B. Receive and file the City of Vernon 2014 Traffic Collisions Review.
NEW BUSINESS
City Administration Department
18. Resolution No. 2015-38 - A Resolution of the City Council of the City of Vernon
adopting an amended and restated Citywide Fringe Benefits and Salary Resolution
in accordance with Government Code Section 20636(b)(1) and repealing all
resolutions in conflict therewith.
Recommendation:
A. Find that approval of the proposed resolution is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have a significant effect
on the environment; and
B. Adopt the resolution amending and restating the Citywide Fringe Benefits and
Salary Resolution, effective June 28, 2015, to reflect the following provisions:
1) Amend Exhibit A, Classification and Compensation Plan, as follows:
a) In accordance with City Council adoption of the fiscal year 2015-2016
budget on June 2, 2015, revise or add the following job classifications
with the corresponding salary ranges:
Add Assistant Fire Marshall (M29 - $7,221 - $8,778 –
Management Group)
Add Industrial Development Director (E39 - $11,762 - $14,297 –
Executive Group)
Change salary grade for Utilities Customer Service Supervisor to
(M26 - $6,238 - $7,582 – Management Group)
Add Police Community Services Officer (G16 - $3,830 - $4,655 –
Teamsters Group)
Add Administrative Fire Battalion Chief salary range (FA38 -
$11,203 - $13,616 - Fire Management Group)
b) In accordance with Citywide succession planning efforts, add the
following unfunded job classifications with the corresponding salary
ranges to create future career development paths within the respective
job series:
Add Building Inspector (G25 - $5,940 - $7,221- Teamsters Group)
Add Senior Electrical Inspector (G27 - $6,550 - $7,962- Teamsters
Group)
Add Senior Plumbing and Mechanical Inspector (G27 - $6,550 -
$7,962 – Teamsters Group)
c) Add salary range C17 for the Senior Administrative Assistant
(Confidential) classification, which is the same as the salary range for
the Senior Administrative Assistant classification ($4,021 - $4,887 per
month).
Regular City Council Meeting Minutes
June 16, 2015
Page 6 of 14
d) Correct Step 4 of Police Dispatcher Lead to $5,388 per month and add
salary range FA31 ($7,962 - $9,677) for forty (40) hour work schedule
of an Administrative Fire Captain.
e) Implement the changes set forth in the various Memoranda of
Understanding between the City of Vernon and the respective employee
organizations.
2) Amend Section 7, Sick Leave, to include part-time and temporary sick leave
accruals.
3) Amend Section 11, Automobile Allowance and Reimbursement for Expenses,
to add the Industrial Development Director and Administrative Fire Battalion
Chief to the list of classifications eligible for Automobile Allowance.
Director of Human Resources Teresa McAllister presented this item and addressed questions by
the Council on the Director position and what type of staff would be in the department.
It was moved by Martinez and seconded by McCormick to approve Resolution No. 2015-38.
Motion carried, 5-0.
19. Resolution No. 2015-39 - A Resolution of the City Council of the City of Vernon
approving the Amendment No. 1 to the Memorandum of Understanding by and
between the City of Vernon and the Vernon Police Officers’ Benefit Association for
the period of July 1, 2014 through June 30, 2017.
Recommendation:
A. Find that approval of the proposed Amendment No. 1 to the Vernon Police Officers
Benefit Association 2014-2017 Memorandum Of Understanding to Add Police
Corporal Lead Premium Pay is exempt under the California Environmental Quality
Act (“CEQA”) in accordance with Section 15061(b)(3), the general rule that CEQA
only applies to projects that may have an effect on the environment; and
B. Adopt a resolution of the City Council of the City of Vernon approving the
Amendment No. 1 to the Memorandum of Understanding by and between the City
of Vernon and the Vernon Police Officers’ Benefit Association for the period of
July 1, 2014 through June 30, 2017 (to add Article Three, Section 13 – Police
Corporal Lead Premium Pay); and
C. Authorize the City Administrator and Director of Human Resources to execute
Amendment No. 1 to the 2014-2017 Memorandum of Understanding between the
City of Vernon and employees represented by the City of Vernon Police Officers
Benefit Association.
Ms. McAllister presented information on this item.
It was moved by Ybarra and seconded by Woodruff-Perez to approve Resolution No. 2015-39.
Motion carried, 5-0.
20. Resolution No. 2015-40 - A Resolution of the City Council of the City of Vernon
approving the Amendment No. 1 to the Memorandum of Understanding by and
between the City of Vernon and the Vernon Firemen’s Association for the period of
July 1, 2014 through June 30, 2016.
Recommendation:
A. Find that approval of the proposed Amendment No. 1 to the Vernon Firemen’s
Association 2014-2016 Memorandum of Understanding to add Apparatus,
Equipment and Personal Protective Equipment (PPE) Premium Pay is exempt
under the California Environmental Quality Act (“CEQA”) in accordance with
Regular City Council Meeting Minutes
June 16, 2015
Page 7 of 14
Section 15061(b)(3), the general rule that CEQA only applies to projects that may
have an effect on the environment.; and
B. Adopt a resolution of the City Council of the City of Vernon approving the
Amendment No. 1 to the Memorandum of Understanding by and between the City
of Vernon and the Vernon Firemen’s Association for the period of July 1, 2014
through June 30, 2016 (to add Apparatus, Equipment and Personal Protective
Equipment (PPE) Premium Pay); and
C. Authorize the City Administrator and Director of Human Resources to execute
Amendment No. 1 to the 2014-2016 Memorandum of Understanding between the
City of Vernon and employees represented by the City of Vernon Firemen’s
Association.
Ms. McAllister presented information on this item.
It was moved by Ybarra and seconded by Martinez to approve Resolution No. 2015-40. Motion
carried, 5-0.
21. Resolution No. 2015-41 - A Resolution of the City Council of the City of Vernon
approving the Amendment No. 1 to the Memorandum of Understanding by and
between the City of Vernon and the Vernon Fire Management Association for the
period of July 1, 2014 through June 30, 2016.
Recommendation:
A. Find that approval of the proposed Amendment No. 1 to the Vernon Fire
Management Association 2014-2016 Memorandum Of Understanding to Add
Administrative Fire Battalion Chief Premium Pay is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have an effect on the
environment; and
B. Adopt a resolution of the City Council of the City of Vernon Approving the
Amendment No. 1 to the Memorandum of Understanding by and between the City
of Vernon and the Vernon Fire Management Association for the Period of July 1,
2014 through June 30, 2016 (to add Administrative Fire Battalion Chief Premium
Pay); and
C. Authorize the City Administrator and Director of Human Resources to execute
Amendment No. 1 to the 2014-16 Memorandum of Understanding between the City
of Vernon and employees represented by the City of Vernon Fire Management
Association.
Ms. McAllister presented information on this item.
It was moved by Ybarra and seconded by Davis to approve Resolution No. 2015-41. Motion
carried, 5-0.
22. Authorization to Issue Additional Purchase Orders to Tyler Technologies, Inc. for
Fiscal Year 2014-2015.
Recommendation:
A. Find that the approval of additional Purchase Orders for Tyler Technologies, Inc.
is exempt under the California Environmental Quality Act (“CEQA”) in accordance
with Section 15061(b)(3), the general rule that CEQA only applies to projects that
may have an effect on the environment; and
B. Authorize the issuance of $40,000 in additional Purchase Orders to Tyler
Technologies, Inc. in fiscal year 2014-2015 for the following (the issuance of said
Regular City Council Meeting Minutes
June 16, 2015
Page 8 of 14
Purchase Orders is exempt from competitive bidding and competitive selection
under the sole source exemption outlined in Section 2.17.12(A)(2) of the Vernon
Municipal Code):
1. Customization needed for the Tyler Cashiering Software used by the Finance
Department at a cost not to exceed $10,000; and
2. Customization of reports/forms used by Public Works and Fire Departments at
a cost not to exceed $15,000; and
3. Payment of outstanding invoices at a cost of approximately $15,000.
Deputy City Administrator Kristen Enomoto presented information on this item.
It was moved by Davis and seconded by Ybarra to authorize the issuance of additional purchase
orders to Tyler Technologies, Inc. Motion carried, 5-0.
23. Authorization to Issue an Open Purchase Order to Insight Public Sector for Fiscal
Year 2014-2015 for the Purchase of Various IT Equipment.
Recommendation:
A. Find that approval of an open Purchase Order for the purchase of IT related
equipment from Insight Public Sector is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have an effect on the
environment; and
B. Authorize the issuance of an open Purchase Order to Insight Public Sector in an
amount not to exceed $130,000 for fiscal year 2014-2015 for the purchase of
various IT related equipment.
Ms. Enomoto presented information on this item.
It was moved by Martinez and seconded by Woodruff-Perez to authorize the issuance of an open
purchase order to Insight Public Sector. Motion carried, 5-0.
Finance Department
24. Resolution No. 2015-42 - A Resolution of the City Council of the City of Vernon
adopting an Annual Statement of Investment Policy for fiscal year 2015-2016 and
delegating investment authority to the Finance Director/City Treasurer.
Recommendation:
A. Find that approval of the investment policy for Fiscal Year 2015-2016 is exempt
under the California Environmental Quality Act (“CEQA”) in accordance with
Section 15061(b)(3), the general rule that CEQA only applies to projects that may
have a significant effect on the environment; and
B. Approve a Resolution of the City Council of the City of Vernon Adopting an
Annual Statement of Investment Policy for Fiscal Year 2015-2016 and Delegating
Investment Authority to the Finance Director/City Treasurer.
Finance Director William Fox presented information and explained the policy on this item.
It was moved by Davis and seconded by Martinez to approve Resolution No. 2015-42. Motion
carried, 5-0.
25. Resolution No. 2015-43 - A Resolution of the City Council of the City of Vernon
authorizing and approving the issuance of electric system revenue bonds; approving
the supplemental indenture of trust pursuant to which such bonds are to be issued;
approving a disclosure document, a contract of purchase, a continuing disclosure
Regular City Council Meeting Minutes
June 16, 2015
Page 9 of 14
agreement and other documents in connection with such bonds; and authorizing
certain other matters relating thereto.
Recommendation:
A. Find that approval of the resolution to issue 2015 Electric System Revenue Bonds
is exempt under the California Environmental Quality Act (“CEQA”) in accordance
with Sections 15060(c)(3), 15378(b)(4), and 15378(b)(5) because the activity
approved by the Resolution relating to the refinancing or funding of previously-
approved projects will not result in direct or indirect physical changes in the
environment and, therefore, is not a “project,” as defined in Section 15378 of the
CEQA Guidelines; and
B. Approval of a resolution for the issuance of 2015 Electric System Revenue Taxable
Series A Bonds in the par amount of $110.3 million to provide funds to (a) refund
a portion of the City’s outstanding 2009 Series A Electric System Revenue Bonds,
(b) finance costs of terminating two existing swap agreements by reimbursement
of certain capital improvements from the electric system previously paid from the
Light & Power Fund, (c) fund a deposit to the Debt Service Reserve Fund, and (d)
pay cost of issuance of the 2015 Series Bonds. The resolution provides for
flexibility to accommodate interest rate fluctuations that would impact market
conditions.
Mr. Fox presented information on this item.
Mr. Van de Kamp inquired about: the City’s debt service over the following years, and how the
information being presented at today’s meeting might differ to previously presented information;
concerns over the outflow of cash and its future impact on the City. Mr. Fox addressed Mr. Van
de Kamp’s questions and referred to slides that had been presented at previous meetings.
It was moved by Ybarra and seconded by Davis to approve Resolution No. 2015-43. Motion
carried, 5-0.
Fire Department
26. Resolution No. 2015-44 - A Resolution of the City Council of the City of Vernon
approving and adopting an Amended and Restated General Fee Schedule.
Recommendation:
A. Find that approval of the proposed resolution is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have a significant effect
on the environment; and
B. Adopt a Resolution of the City Council of the City of Vernon Approving and
Adopting an Amended and Restated General Fee Schedule.
Mike Wilson, Fire Chief, presented information on this item.
It was moved by Davis and seconded by Ybarra to approve Resolution No. 2015-44. Motion
carried, 5-0.
Gas and Electric Department
27. Economic Development Rate Agreement and Amendment to the Interruptible
Service Agreement by and between the City of Vernon and Matheson Tri-Gas.
Recommendation:
A. Find that the Economic Development Rate and the Amendment to the
Interruptible Service Agreements by and between the City of Vernon and
Regular City Council Meeting Minutes
June 16, 2015
Page 10 of 14
Matheson Tri-Gas are exempt under the California Environmental Quality Act
(CEQA) in accordance with CEQA Guidelines Section 15061(b)(3), the general
rule that CEQA only applies to projects that may have a significant effect on the
environment, because the respective agreements do not have an impact; and
B. Approve the Economic Development Rate (“EDR”) agreement with Matheson
Tri-Gas (“Matheson”) which will extend the eligibility term for the incentive
from five (5) years to ten (10) years with a combined economic development rate
discount and voltage discount of up to a total of 25%; and
C. Approve an amendment to the Interruptible Service Agreement with Matheson
Tri-Gas which states that the kW demand shall be increased, allowing Matheson
to be permitted to change the Firm Service Level, and agreeing to their receipt of
interruptible service credit in accordance with the applicable TOU-I rate schedule
in effect.
Electric Resources Planning & Development Manager Abraham Alemu presented information on
this item.
It was moved by Ybarra and seconded by Martinez to approve the Economic Development Rate
Agreement and Amendment to the Interruptible Service Agreement with Matheson Tri-Gas.
Motion carried, 5-0.
Health and Environmental Control Department
28. Resolution No. 2015-45 - A Resolution of the City Council of the City of Vernon
approving and authorizing the execution of an application for the 2015/2016 Used
Oil Payment Program.
Recommendation:
A. Find that granting authority to submit and administer the funding application and
related documents at issue constitute administrative activities that do not
constitute a “project” under California Environmental Quality Act (“CEQA”)
Guidelines section 15378, and even if it did constitute a “project,” the submission
and administration of this application and related documents is exempt under
CEQA Guidelines section 15061(b)(3), the general rule that CEQA only applies
to projects that may have a significant effect on the environment; and
B. Approve a resolution of the City of Vernon Approving and Authorizing the
Execution of an Application for the 2015/2016 Used Oil Payment Program.
Director of Health and Environmental Control Leonard Grossberg presented information on this
item.
It was moved by Davis and seconded by Ybarra to approve Resolution No. 2015-45. Motion
carried, 5-0.
29. Approval of License and Support Agreement with Decade Software Company, LLC
for Environmental Health Software and Related Services.
Recommendation:
A. Find that merely making recommendations to the City Council or to City Staff do
not constitute actions subject to the California Environmental Quality Act
(CEQA), and therefore such actions are exempt pursuant to CEQA Guidelines
section 15061 (b)(3), the general rule that CEQA only applies to projects that may
have an effect on the environment; and
Regular City Council Meeting Minutes
June 16, 2015
Page 11 of 14
B. Approve the License and Support Agreement with Decade Software Company,
LLC for the term of July 1, 2015 through June 30, 2016, in an amount not to
exceed $17,898.00.
Mr. Grossberg presented information on this item.
It was moved by Ybarra and seconded by Davis to approve the License and Support Agreement
with Decade Software Company, LLC. Motion carried, 5-0.
Human Resources Department
30. Adoption of City of Vernon Personnel Policies and Procedures: Terms of
Employment (I-1) (revised); and Salary Plan Administration II-3 (revised).
Recommendation:
A. Find that approval of the proposed personnel policy and procedures is exempt under
the California Environmental Quality Act (“CEQA”) in accordance with Section
15061(b)(3), the general rule that CEQA only applies to projects that may have a
significant effect on the environment; and
B. Adopt the attached Personnel Policy and Procedures, Terms of Employment I-1
(revised), Salary Plan Administration II-3 (revised) and incorporate it into the
Personnel Policies and Procedures Manual; and
C. Authorize the City Administrator and the Director of Human Resources to execute
and distribute the above-referenced policy to all employees.
Ms. McAllister presented information on this item.
It was moved by Ybarra and seconded by Martinez to adopt the revised City of Vernon
Personnel Policies and Procedures. Motion carried, 5-0.
Police Department
31. Approval of Law Enforcement Data Sharing Agreement with Los Angeles Police
Department and the Los Angeles County Sheriff’s Department.
Recommendation:
A. Find that the approval of the proposed Memorandum of Agreement (“MOA”) is
exempt under the California Environmental Quality Act (“CEQA”) in accordance
with Section 15061(b) (3), the general rule is that CEQA only applies to projects
that may have an effect on the environment; and
B. Approve the MOA with the Los Angeles Police Department (“LAPD”) and the Los
Angeles County Sheriff’s Department (“LASD”), and authorize the Police Chief to
execute the MOA on behalf of the City, for the purpose of sharing data with LAPD
and LASD to support cross-jurisdictional analysis of crime and criminal suspects
and/or organizations.
Daniel Calleros, Police Chief, presented information on this item.
It was moved by Davis and seconded by Ybarra to approve the Law Enforcement Data Sharing
Agreement with Los Angeles Police Department and Los Angeles County Sheriff’s Department.
Motion carried, 5-0.
/ / /
/ / /
Regular City Council Meeting Minutes
June 16, 2015
Page 12 of 14
Public Works, Water and Development Services Department
32. Acceptance of Work related to Contract No. CS-0428 – Office Reconfiguration of
City Administration, City Attorney, Information Technology and Human Resources
Department from Victor Palos Development and Construction.
Recommendation:
A. Find that the acceptance of work related to the Capital Improvement Project is
categorically exempt under the California Environmental Quality Act (“CEQA”) in
accordance with CEQA Guidelines Section 15301, Existing Facilities, part (a),
because the project is merely to make interior or exterior alterations involving
partitions, plumbing, and electrical conveyances; and
B. Accept the work related to City Contract No. CS-0428 – Office Reconfiguration of
City Administration, City Attorney, Information Technology and Human
Resources Department from Victor Palos Development and Construction; and
C. Authorize the recording of the Notice of Completion for City Contract No. CS-
0428.
Mr. Wilson presented information on this item and addressed questions from the Council.
It was moved by Davis and seconded by Martinez to accept the work related to Contract No. CS-
0428. Motion carried, 5-0.
33. Authorize Professional Services Agreement with Santa Fe Building Maintenance
for Janitorial Services.
Recommendation:
A. Find that entering into the proposed contract for Janitorial Services is exempt under
the California Environmental Quality Act (“CEQA”) in accordance with (a) CEQA
Guidelines Section 15061 (b)(3), the general rule that CEQA only applies to
projects that may have an effect on the environment and (b) Section 15301, because
the proposed service involves an existing project with negligible or no expansion
of use; and
B. Authorize the City Administrator to enter into a Professional Services Agreement
with Santa Fe Building Maintenance for Janitorial Services for a three year period
at an amount not to exceed $303,948.00.
Mr. Wilson presented information on this item.
It was moved by Ybarra and seconded by Woodruff-Perez to approve the professional services
agreement with Santa Fe Building Maintenance. Motion carried, 5-0.
ORDINANCES
34. Ordinance No. 1229 - An Ordinance of the City Council of the City of Vernon adding
Article XVI to Chapter 24 of the Vernon Municipal Code relating to expedited
permitting procedures for small residential rooftop solar systems. (second reading)
Recommendation:
A. Find that the adoption of an ordinance related to an expedited permitting procedure
for small residential rooftop solar systems is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have a significant effect
on the environment; and
Regular City Council Meeting Minutes
June 16, 2015
Page 13 of 14
B. Adopt Ordinance No. 1229 adding Article XVI to Chapter 24 of the Vernon
Municipal Code relating to expedited permitting procedures for small residential
rooftop solar systems.
Mayor McCormick read the title of the proposed ordinance.
Kevin Wilson provided a brief report on the Ordinance.
On a motion by Davis and second by Martinez, City Clerk Maria Ayala took a roll call vote as
follows:
Ayes: McCormick, Davis, Martinez, Ybarra, and Woodruff-Perez
Noes: None Abstentions: None Absent: None
ORAL REPORTS
35. City Administrator Reports – brief reports on activities and other brief announcements by
the City Administrator and Department Heads.
Police Chief Daniel Calleros reported on the following: June 2 strong arm robbery; June 4 in-
progress auto burglary reported; June 9 invasion of privacy report; June 12 strong arm robbery;
and a DUI checkpoint to be conducted over the 4th of July weekend.
Police Captain Michael Gillman reported on vandalism as follows: spray painted company
trailer and markers used to graffiti buildings.
Fire Chief Michael Wilson reported on the following: Cal OSHA investigation to be
conducted; Department received the sub recipient agreement for a $300,000 grant to be
presented at the next Council meeting; newly hired firefighter expected to start on July 1, with
the same recruitment list to be used for future hires in 2016; continuing with survival training
and wild land training; and one significant incident of a vehicle fire on June 5 to report.
Director of Public Works, Water and Development Services Kevin Wilson reported on the
following: in the process of replacing City Hall generator; issuing of a grading permit for 3200
Slauson; construction of 3 buildings on District at the site formerly owned by the City; and the
Planning Department continues to receive plan proposals for review. Mayor McCormick asked
for a report on current construction projects within the City to be provided for a future Council
Meeting.
Abraham Alemu, Electric Resources Planning & Development Manager, briefly reported on
the L.A. Times article, “California electric bill shock…” and Vernon’s rates being depicted as
one of the lowest.
Finance Director William Fox provided a brief update on the following: complimented the City
on the City’s Fraud Policy being regarded as one of the policy’s being considered as a sample
of best practice by other cities; and bond financing status update.
Director of Health and Environmental Control Leonard Grossberg provided a brief update on:
the procedures of reporting and cleaning a spill; illegal dumping activity in the Atlantic and
District vicinity; and announced the Green Vernon Commission will be meeting tomorrow at
3:30 p.m.
Director of Human Resources Teresa McAllister reported on the following: over 150
employees attended the Employee Appreciation BBQ; met with the Committee on developing
a new Employee Awards program; new applicant tracking system is moving forward; there are
continuing recruitments; and staff is working on planning the annual health and welfare
program fair.
City Clerk Maria Ayala announced that there will be a forthcoming report to Council on the
governing bodies that meet on an annual basis.
Regular City Council Meeting Minutes
June 16, 2015
Page 14 of 14
Senior Advisor to the City Administrator Fred MacFarlane provided an update on: recent L.A.
Times visit to the Vernon Village Parking Housing Development; followed up on the recent
L.A. Times on utility rates; and that the future grant check presentations will be planned after
the Vernon Village Park grand opening.
City Deputy Administrator Kristen Enomoto provided an update on the following: staff
attending the June 4 AQMD working group meeting, with another meeting to be scheduled on
the proposed Rule 415; Mark Whitworth and Alex Kung scheduled to attend the Independent
Cities Conference next month.
Ms. Enomoto also provided the following report from the recent Vernon Housing Commission:
Six of the seven members were in attendance; relayed the Commission’s appreciation for
considering and moving forward on their recommendation to sell the Huntington Park units;
the housing lottery was conducted; development and update to tenant guidelines; giving
consideration to discontinuance of the first responder priority for leasing; and that the housing
coordinator will be resigning from this position in the near future.
36. City Council Reports – brief report on activities, announcements, or directives to staff.
Mayor McCormick thanked the Human Resources Department for the Employee Appreciation
BBQ.
Mayor Pro Tem Davis wished everybody a happy and safe 4th of July.
CLOSED SESSION
At 11:27 a.m. the City Council entered into closed session to discuss the following agendized item:
37. CONFERENCE WITH LEGAL COUNSEL - PENDING LITIGATION
Government Code Section 54956.9(a)
One Case: Former BKK Carson Dump
California Department of Toxic Substances Control
Docket No. I&SE-RAO 05/06-014
At 11:41 a.m. the City Council exited closed session. Bryan Byun, Deputy City Attorney, reported
out from closed session that the Vernon City Council approved the City’s action to defend against
the environmental action that is set forth in the agenda.
With no further business, at 11:42 a.m., Mayor McCormick adjourned the meeting.
________________________
W. Michael McCormick
Mayor
ATTEST:
_________________________
Maria E. Ayala
City Clerk
MINUTES OF THE REGULAR CITY COUNCIL MEETING OF THE
CITY OF VERNON HELD TUESDAY, JULY 7, 2015, IN THE
COUNCIL CHAMBER OF THE CITY HALL LOCATED AT 4305
SANTA FE AVENUE, VERNON, CALIFORNIA
MEMBERS PRESENT: McCormick, Davis, Ybarra, and Woodruff-Perez
MEMBERS ABSENT: Martinez
The meeting was called to order at 9:00 a.m. by Mayor McCormick. Councilmember Ybarra led
the flag salute.
CHANGES TO THE AGENDA
Mayor McCormick announced there were no changes to the agenda.
PUBLIC COMMENT
Mayor McCormick announced that this was the time allotted for public comment, and inquired
whether anyone in the audience wished to address the City Council. The public will also be given
an opportunity to comment on matters on the posted agenda during Council deliberation.
Sal Ramirez (Southern California Edison Region Manager)
Mr. Ramirez introduced himself as the new representative for the regional area that includes the
City of Vernon.
Sandra Orozco (Community Member)
Ms. Orozco announced an upcoming event, “Wheelchair Wash Day” scheduled to take place on
July 26.
PRESENTATIONS
1. Swear-In Ceremony for newly hired Firefighter, Raymond De Nijs.
Fire Chief Michael Wilson introduced Mr. De Nijs. City Clerk Maria E. Ayala conducted the
swearing-in ceremony. Mr. De Nijs was accompanied by his family, and said a few words in
gratitude of his new career opportunity.
2. Cyber Security Breach Prevention.
Information Technology Manager Ernesto Smith conducted a PowerPoint presentation.
Mayor McCormick recessed the meeting at 9:21 a.m. and reconvened the meeting at 9:34 a.m.
CONSENT CALENDAR
It was moved by Davis and seconded by Ybarra to approve all matters listed under the Consent
Calendar under one motion as presented. Motion carried, 4-0.
Claims Against the City – Received and Filed
3. Claim for Damages from Juan Juarez received on June 17, 2015, in the amount of
$70.00.
Warrant Registers
4. Ratification of City Warrant Register No. 1415 to record voided Check No. 346160
in the amount of $389.00.
5. Approval of City Warrant Register No. 1427, totaling $2,152,695.88, which covers
the period of, June 9 through June 29, 2015, and consists of the following:
Regular City Council Meeting Minutes
July 7, 2015
Page 2 of 11
A. Ratification of wire transfers totaling $1,737,806.90; and
B. Ratification of the issuance of early checks totaling $290,610.32; and
C. Authorization to issue pending checks totaling $124,278.66.
6. Approval of Light & Power Warrant Register No. 392, totaling $6,485,946.43,
which covers the period of June 9, through June 29, 2015, and consists of the
following:
A. Ratification of wire transfers totaling $6,294,945.52; and
B. Ratification of the issuance of early checks totaling $135,657.78; and
C. Authorization to issue pending checks totaling $55,343.13.
7. Approval of Gas Warrant Register No. 180, totaling $550,695.22, which covers the
period of June 9, through June 29, 2015, and consists of the following:
A. Ratification of wire transfers totaling $528,611.63; and
B. Ratification of the issuance of early checks totaling $11,579.68; and
C. Authorization to issue pending checks totaling $10,503.91.
8. Approval of Federal Funds Street Improvements Warrant Register No. 20,
totaling $44,384.51, which covers the period of June 9, through June 29, 2015, and
consists of the following:
A. Ratification of wire transfers totaling $44,384.51.
Fire Department
9. Activity Report for the period of June 1 through June 15, 2015, to be received and
filed.
10. Approval of a Memorandum of Understanding between the City of Vernon Fire
Department and City of Burbank Fire Department.
Recommendation:
A. Find that approval of the proposed Memorandum of Understanding is exempt under
the California Environmental Quality Act (“CEQA”) in accordance with Section
15061(b)(3), the general rule that CEQA only applies to projects that may have an
effect on the environment.; and
B. Authorize the Fire Chief to execute the existing Memorandum of Understanding
(“MOU”) between the City of Vernon Fire Department and the City of Burbank
Fire Department for the transfer of grant-funded Ballistic Helmets.
Police Department
11. Activity Log and Statistical Summary of Arrests and Activities for the period of
June 1, through June 16, 2015, to be received and filed.
Public Works, Water and Development Services Department
12. March 2015 Monthly Building Department Report, to be received and filed.
13. April 2015 Monthly Building Department Report, to be received and filed.
Regular City Council Meeting Minutes
July 7, 2015
Page 3 of 11
14. May 2015 Monthly Building Department Report, to be received and filed.
NEW BUSINESS
City Administration Department
15. Resolution No. 2015-46 - A Resolution of the City Council of the City of Vernon
approving and authorizing the execution of a grant agreement between the City of
Vernon and Legacy LA Youth Development Corporation.
Recommendation:
A. Find that the recommended actions are exempt from the California Environmental
Quality Act (“CEQA”), because (a) approval of the below-described Grant
Agreement is not an “approval” as defined by Section 15352 due to its conditional
nature; and (b) the City of Vernon is neither the “lead agency” as defined in
Sections 15051 and 15367 nor a “responsible agency” as defined in Section 15381.
B. Adopt a resolution of the City Council of the City of Vernon approving and
authorizing the execution of a grant agreement between the City of Vernon and
Legacy LA Youth Development Corporation effective June 30, 2015, that provides
the following grant funding for certain capital improvements to the Hazard Park
Armory Youth Development Center:
1. Up to $350,000 from the 2015 fiscal year budget for a Design Development
Phase.
2. Up to $1,000,000 from the 2016 fiscal year budget for Phase I Construction
Projects.
Senior Advisor to the City Administrator Fred MacFarlane introduced the item and explained the
background of the monies appropriated to support nonprofits.
Mr. MacFarlane introduced, Executive Director Lou Calanche, who spoke on behalf of the
organization and the project. Ms. Calanche also introduced residents from Ramona Gardens who
have participated in the youth development center: Eddie Licon, Jarrielle Johnson, and Lesly
Valenzuela. Ms. Calanche also introduced Mr. Cody Briggs, from the Project Management Team,
who provided slides and information on the construction project.
It was moved by Davis and seconded by Woodruff-Perez to approve Resolution No. 2015-46.
Motion carried, 4-0.
Finance Department
16. Resolution No. 2015-47 - A Resolution of the City Council of the City of Vernon
approving the termination of interest rate swaps and the forms of swap termination
agreements; and authorizing certain other matters relating thereto.
Recommendation:
A. Find that approval of the resolution to terminate the two interest rate swap contracts
entered into December 2004 is a government fiscal activity which does not involve
any commitment to any specific project which may result in a potentially significant
physical impact on the environment and is therefore not a “project” as defined by
California Environmental Quality Act (“CEQA”) Guidelines section 15378 and not
subject to CEQA review. Furthermore, even if it were a project, it would be exempt
under CEQA in accordance with Section 15061(b)(3), the general rule that CEQA
only applies to projects that may have an effect on the environment; and
B. Adopt a resolution of the City Council of the City of Vernon approving the
termination of interest rate swaps and the forms of swap termination agreements;
Regular City Council Meeting Minutes
July 7, 2015
Page 4 of 11
and authorizing certain other matters relating thereto, including the termination of
the two outstanding 2004 interest rate swap agreements with Morgan Stanley
Capital Services LLC (Morgan Stanley) and Deutsche Bank AG (Deutsche Bank).
The swap agreements are being terminated in conjunction with the issuance of 2015
Electric System Revenue Taxable Series A Bonds in the par amount of $110.3
million. A portion of the 2015 Electric System Revenue Taxable Series A Bonds
proceeds will finance the costs of terminating the two existing interest rate swap
agreements.
William Fox, Finance Director, introduced the item and explained the interest rate swaps process.
President of the Vernon Chamber of Commerce, Marisa Olguin, commended the Finance
Department and Vernon Gas and Electric Department for the hard work to move this process in
the right direction.
It was moved by Ybarra and seconded by Woodruff-Perez to approve Resolution No. 2015-47.
Motion carried, 4-0.
17. Property and Casualty Insurance Placements for Fiscal Year 2015-16.
Recommendation:
A. Find that approval of the placement of property and casualty insurance for fiscal
year 2015-16 is exempt under the California Environmental Quality Act (“CEQA”)
in accordance with Sections 15060(c)(3), 15378(b)(4), and 15378(b)(5). This is
because the activity of authorizing the placement of insurance will not result in
direct or indirect physical changes in the environment and, therefore, is not a
“project,” as defined in Section 15378 of the CEQA Guidelines; and
B. Authorize the City Administrator to bind the City for the annual insurance coverage
for fiscal year 2015-16, provided the total annual premiums to be paid shall not
exceed $1,018,600 and $15,000 for loss mitigation services related to Cyber
liability coverage for a total of $1,033,600. This includes the renewal of policies
for excess liability insurance, errors & omissions, property, excess workers’
compensation, crime, pollution liability, and environmental site liability, and the
addition of cyber liability coverages with the related Loss Mitigation Services.
Mr. Fox introduced the item and explained the annual insurance premiums.
It was moved by Davis and seconded by Ybarra to authorize property and casualty insurance
placement for fiscal year 2015-16. Motion carried, 4-0.
Fire Department
18. Resolution No. 2015-48 - A Resolution of the City Council of the City of Vernon
approving the City’s participation in the 2014 State Homeland Security Program by
the Vernon Fire Department, approving and authorizing the execution of a
Subrecipient Agreement by and between the City of Vernon and the County of Los
Angeles and authorizing the execution of documents necessary to obtain said grant.
Recommendation:
A. Find that approval of the proposed Agreement is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have an effect on the
environment; and
B. Adopt a resolution of the City Council of the City of Vernon approving the City’s
participation in the 2014 State Homeland Security Program (SHSP) by the Vernon
Fire Department, approving and authorizing the execution of a Subrecipient
Agreement by and between the City of Vernon and the County of Los Angeles and
Regular City Council Meeting Minutes
July 7, 2015
Page 5 of 11
authorizing the execution of documents necessary to obtain said grant. The County
of Los Angeles has approved and awarded 2014 SHSP funds in the amount of
$300,000.00 to the City of Vernon Fire Department.
Fire Chief Michael Wilson introduced this item.
It was moved by Ybarra and seconded by Davis to approve Resolution No. 2015-48. Motion
carried, 4-0.
19. Donation of 1964 Crown Fire Coach 2000 GPM Pumper to the California Fire
Museum and Safety Learning Center.
Recommendation:
A. Find that authorization of the proposed donation is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have an effect on the
environment; and
B. Authorize the donation of a surplus 1964 Crown Fire Coach 2000 GPM Pumper to
be conveyed to the California Fire Museum and Safety Learning Center (“CFM”);
and
C. Enter into a Donation and Release Agreement with CFM to use, retain or dispose
of pursuant to the historical and educational purposes of the museum.
It was moved by Ybarra and seconded by Woodruff-Perez to authorize the donation of the 1964
Crown Fire Coach 2000 GPM Pumper to the California Museum and Safety Learning Center.
Motion carried, 4-0.
Gas and Electric Department
20. Approval of Agreement with Northwest Electrical Services, LLC in Response to
Notice Inviting Bids for Allison Turbine Control System Upgrade Project.
Recommendation:
A. Find that proposed agreement by and between the City of Vernon and Northwest
Electrical Services, LLC is exempt under the California Environmental Quality
Act (“CEQA”) in accordance with CEQA Guidelines Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have a significant effect
on the environment, because the agreement does not have an impact; and
B. Approve and authorize the execution of a services agreement with Northwest
Electrical Services, LLC (NWE), for a Control System upgrade of two existing
aero-derivative Allison Gas Turbines. The proposed contract includes
compensation for design, equipment, fabrication, and testing, equating to a grand
total compensation amount not-to-exceed $662,330.16 over the three (3) year
term of the agreement.
It was moved by Ybarra and seconded by Davis to approve the agreement with Northwest
Electrical Services, LLC for Allison Turbine Control System Upgrade Project. Motion carried,
4-0.
Human Resources Department
21. Adoption of new Personnel Policies and Procedures: Rest and Meal Breaks II-5
(New), and Reasonable Accommodation for Disabled Applicants and Employees III-
5 (New).
Regular City Council Meeting Minutes
July 7, 2015
Page 6 of 11
Recommendation:
A. Find that approval of the proposed personnel policy and procedures is exempt under
the California Environmental Quality Act (“CEAQ”) in accordance with Section
15061(b)(3), the general rule that CEQA only applies to projects that may have a
significant effect on the environment; and
B. Adoption of Personnel Policy and Procedures: Rest and Meal Breaks II-5 (new),
and Reasonable Accommodation for Disabled Applicants and Employees III-5
(new); and incorporating newly adopted policies into the Personnel Policies and
Procedures Manual; and
C. Authorize the City Administrator and the Director of Human Resources to execute
and distribute the above-referenced policies to all employees.
It was moved by Davis and seconded by Ybarra to adopt new Personnel Policies and Procedures:
Rest and Meal Breaks II-5 (New), and Reasonable Accommodation for Disabled Applicants and
Employees III-5 (New). Motion carried, 4-0.
22. Authorization to issue a Request for Proposals for an executive search firm to
conduct a recruitment for the position of City Administrator for the City of Vernon.
Recommendation:
A. Find that approval to issue a request for proposal for an Executive Search Firm to
conduct a recruitment for the position of City Administrator for the City of Vernon
is exempt under the California Environmental Quality Act (“CEQA”) in accordance
with Section 15061(b)(3), the general rule that CEQA only applies to projects that
may have a significant effect on the environment; and
B. Approve and authorize the Director of Human Resources to issue the Request for
Proposals for an Executive Search Firm to conduct a recruitment for the position of
City Administrator for the City of Vernon.
Ms. McAllister introduced the item.
Considerable discussion took place over this item with staff addressing questions regarding:
possible timeline of retirement of current City Administrator; what pending projects or future
projects are being considered; should executive search be conducted by in-house staff or executive
search firm; etc.
Marisa Olguin, Vernon Chamber of Commerce President:
Ms. Olguin commented on the impending transition and commended Mr. Whitworth on his
leadership of Vernon. Ms. Olguin also indicated that the Chamber of Commerce would like to be
involved in the hiring process for the new City Administrator.
Sandra Orozco, Local Activist:
Ms. Orozco commented that she has the utmost respect for Mr. Whitworth and has admired his
leadership of the City.
Jon Van de Kamp, Independent Reform Monitor:
Mr. Van de Kamp expressed his support for the hiring of an executive search firm, as ample time
will be needed to conduct an appropriate search.
It was moved by Davis and seconded by Ybarra to authorize to issue a Request for Proposals for
an executive search firm to conduct a recruitment for the position of City Administrator. Motion
carried, 4-0.
23. Approving and authorizing the execution of an At-Will Employment Agreement
by and between the City of Vernon and Kristen Enomoto.
Regular City Council Meeting Minutes
July 7, 2015
Page 7 of 11
Recommendation:
A. Find that approval of the proposed At-Will Employment Agreement is exempt
under the California Environmental Quality Act (“CEQA”) in accordance with
Section 15061(b)(3), the general rule that CEQA only applies to projects that may
have a significant effect on the environment; and
B. Approve the At-Will Employment Agreement (the “Agreement”) with Kristen
Enomoto effective June 28, 2015. The proposed Agreement is the standard At-Will
Employment Agreement (Non-Safety) Form approved by City Council for other
executive and at-will positions.
Ms. Enomoto stepped out of the meeting at 10:39 a.m. as this item was addressed.
Ms. McAllister introduced the item.
It was moved by Ybarra and seconded by Davis to approve the At-Will Employment Agreement
by and between the City of Vernon and Kristen Enomoto. Motion carried, 4-0.
Ms. Enomoto returned to the meeting after the vote on the item at approximately 10:41 a.m.
Police Department
24. Approve Inmate Housing Services Agreement.
Recommendation:
A. Find that the proposed contract authorization is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the
general rule that CEQA only applies to projects that may have a significant effect
on the environment; and
B. Find that the contract is exempt from competitive selection requirements pursuant
to Vernon Municipal Code § 2.17.12 (A) 5, Exemptions - Contracts with other
governmental entities for services; and
C. Authorize the Mayor to ratify and execute an Inmate Housing Agreement by and
between the City of Vernon Police Department and the City of Huntington Park
Police Department (“HPPD”) for a period of three (3) years, effective July 1, 2015
through June 30, 2018.
It was moved by Ybarra and seconded by Woodruff-Perez to approve the inmate housing service
agreement with City of Huntington Park Police Department. Motion carried, 4-0.
Public Works, Water and Development Services Department
25. Approve Amendment No. 2 to the existing Services Agreement between the City of
Vernon and Interwest Consulting Group for On-Call Building Plan Check and
Inspection Services.
Recommendation:
A. Find that Amendment No. 2 renewing the existing Services Agreement between the
City of Vernon and Interwest Consulting Group, for a period of one year, for On
Call Building Plan Check and Inspection Services, is exempt under the California
Environmental Quality Act (“CEQA”) in accordance with (a) CEQA Guidelines
Section 15061(b)(3), the general rule that CEQA only applies to projects that may
have an effect on the environment and (b) CEQA Guidelines Section 15268,
because the proposed Amendment No.2 involves the issuance of building permits
which is a ministerial action; and
Regular City Council Meeting Minutes
July 7, 2015
Page 8 of 11
B. Approve Amendment No. 2 renewing the existing Services Agreement between the
City of Vernon and Interwest Consulting Group for On Call Building Plan Check
and Inspection Services, for a period of one year (as amended, the contract would
expire on July 1, 2016).
It was moved by Davis and seconded by Ybarra to approve Amendment No. 2 to the existing
Services Agreement with Interwest Consulting Group for on-call building plan check and
inspection services. Motion carried, 4-0.
26. Approval of Amendment No. 2 to the existing Services Agreement between the City
of Vernon and Jason Addison Smith Consulting Services dba JAS Pacific for On
Call Building Plan Check and Inspection Services.
Recommendation:
A. Find that Amendment No. 2 renewing the existing Services Agreement between the
City of Vernon and Jason Addison Smith Consulting Services dba JAS Pacific, for
a period of one year, for On Call Building Plan Check and Inspection Services, is
exempt under the California Environmental Quality Act (“CEAQ”) in accordance
with (a) CEQA Guidelines Section 15061(b)(3), the general rule that CEQA only
applies to projects that may have an effect on the environment and (b) Guidelines
Section 15268, because the proposed Amendment No. 2 involves the issuance of
building permits which is a ministerial action; and
B. Approve Amendment No. 2 renewing the existing Services Agreement between the
City of Vernon and Jason Addison Smith Consulting Services dba JAS Pacific, for
a period of one year, for On Call Building Plan Check and Inspection Services. As
revised, the contract would expire, effective July 1, 2016.
It was moved by Ybarra and seconded by Davis to approve Amendment No. 2 to the existing
Services Agreement with Interwest Consulting Group for on-call building plan check and
inspection services. Motion carried, 4-0.
27. Bid Award for Contract No. CS-0534: Slauson and Boyle Street and Traffic
Improvements.
Recommendation:
A. Find that the award of the proposed Capital Improvement Project at Slauson
Avenue and Boyle Avenue is categorically exempt under the California
Environmentally Quality Act (“CEQA”) in accordance with CEQA Guidelines
Section 15301 (Existing Facilities), part (c) (existing highways and streets),
because the project is merely to repair existing streets and involves negligible or no
expansion of existing use; and
B. Accept the bid proposal from Sully-Miller Contracting Company, as the lowest
responsive and responsible bidder and enter into contract, not to exceed
$1,624,230.25, for the Slauson and Boyle Street and Traffic Improvements Project,
City Contract No. CS-0534, and to reject all other bids. Further authorize a
contingency of $75,000.00 in the event of an unexpected changed condition in the
project and grant authority to the City Administrator to issue a change order for an
amount up to the contingency amount.
It was moved by Davis and seconded by Ybarra to award the bid for Contract No. CS-0534,
Slauson and Boyle Street and Traffic Improvements, to Sully-Miller contracting Company.
Motion carried, 4-0.
28. Resolution No. 2015-49 - A Resolution of the City Council of the City of Vernon
approving and authorizing the execution of the State Master Agreement No.
00474S and Program Supplement No. N43 by and between the City of Vernon and
Regular City Council Meeting Minutes
July 7, 2015
Page 9 of 11
the State of California, acting by and through the Department of Transportation,
for the citywide feasibility study to create a bicycle master plan.
Recommendation:
A. Find that the approval of the State Master Agreement No. 00474S with Caltrans
and the approval of the Program Supplement No. N43 proposed is exempt under
the California Environmental Quality Act (“CEQA”) in accordance with Section
15061(b)(3), the general rule that CEQA only applies to projects that may have an
effect on the environment; and
B. Adopt a resolution of the City Council of the City of Vernon approving and
authorizing the execution of the State Master Agreement No. 00474S and Program
Supplement No. N43 by and between the City of Vernon and the State of California,
acting by and through the Department of Transportation, for the citywide feasibility
study to create a bicycle master plan.
It was moved by Ybarra and seconded by Davis to approve Resolution No. 2015-49. Motion
carried, 4-0.
29. Bid Award for Contract No. CS-0484: Equipping Well No. 21 and Related Site
Work.
Recommendation:
A. Find that the proposed project, for Equipping Well No. 21 and Related Site Work
is exempt under the California Environmental Quality Act (“CEQA”) in accordance
with CEQA Guidelines Section 15301, subsections (b) and (d), because the project
involves negligible or no expansion of use beyond that existing at the lead agency’s
determination; and
B. Accept the bid from Environmental Construction, Inc. as the lowest responsive and
responsible bidder and enter into the a contract, in an amount not to exceed
$1,348,851, For Equipping Well No. 21 and Related Site Work, Contract No. CS-
0484. Furthermore, authorize a contingency amount of $135,000 in the event an
unexpected changed condition in the project occurs and grant authority to the City
Administrator to issue a change order for an amount up to the contingency amount.
It was moved by Ybarra and seconded by Davis to award bid for Contract No. CS-0484, Equipping
Well No. 21 and Related Site Work, to Environmental Construction, Inc. Motion carried, 4-0.
ORDINANCES
30. Ordinance No. 1230 - An Ordinance of the City Council of the City of Vernon
amending Sections 2.123(a) and 2.125(b) of Article XVII of Chapter 2 of the Vernon
Municipal Code relating to the Vernon Housing Commission. (first reading)
Recommendation:
The Vernon Housing Commission and City Staff recommend the City Council:
A. Find that the actions recommended are exempt from the California Environmental
Quality Act (“CEQA”) in accordance with Section 15061(b)(3), the general rule
that CEQA only applies to projects that may have an effect on the environment.
B. Hold the first reading of and subsequently adopt an ordinance to amend Section
2.125(b) of the Vernon Municipal Code to remove the first responder leasing
priority, effective at 5:01 p.m. on December 8, 2015.
As part of the aforementioned ordinance, City Staff further recommends the City
Council:
Regular City Council Meeting Minutes
July 7, 2015
Page 10 of 11
C. Amend Section 2.123(a) of the Vernon Municipal Code to establish Commission
Member terms to run from July 1 through June 30, effective July 1, 2019 for four
of the seven seats, and effective July 1, 2021 for the three remaining seats.
D. Include uncodified sections to establish the following upcoming terms in order to
fully effectuate the July 1 through June 30 terms:
Appointing Category Term
Resident/Council Member August 11, 2017 – June 30, 2021
Resident No. 1 August 11, 2017 – June 30, 2021
Resident No. 2 August 11, 2015 – June 30, 2019
Business Representative No. 1 August 11, 2015 – June 30, 2019
Business Representative No. 2 August 11, 2017 – June 30, 2021
Business Representative No. 3 August 11, 2015 – June 30, 2019
Employee of Vernon Business August 11, 2015 – June 30, 2019
Mayor McCormick introduced the proposed ordinance by title.
It was moved by Davis and seconded by Ybarra to approve the first reading of Ordinance No. 1230
for recommendation sections A, C and D, and remove item B from said ordinance.
Recommendation section B is to be addressed at a future Council Meeting after further
consideration. Motion carried, 4-0.
ORAL REPORTS
31. City Administrator Reports – brief reports on activities and other brief announcements by
the City Administrator and Department Heads.
Police Chief Daniel Calleros reported on the following: June 20 call reporting an individual
brandishing a large knife; June 20 Officers’ response to a burglary alarm activation; July 1
Officers’ response to a man down in a parked vehicle; and a report on the DUI Checkpoint
conducted over the holiday weekend, July 4.
Police Captain Michael Gillman reported on a recent spray-painting incident.
Fire Chief Michael Wilson reported on the following: in process of a Paramedic Ambulance
purchase and two new fire engine lease agreements; update on the Battalion Chief’s Exam;
reported on Fire Department’s response to the same man-down incident the Police Department
responded to; July 4 commercial structure fire; July 5 alarm residential fire; an update from a
June 15 motorcycle accident, wherein the individual has contacted the Fire Department to meet
the personnel who assisted him through this; announced the passing of Retired Fire Captain
Jim Dunn, who served 39 years with the Vernon Fire Department.
Director of Public Works, Water and Development Services Kevin Wilson reported on the
following: update on the generator replacement at City Hall; forthcoming presentations for
next City Council meetings on I-710 and current construction projects; and a brief report on
the rehabbing of Fire Station No. 2.
Director of Gas and Electric Carlos Fandino briefly reported on the following: two recent
power outages; and provided an update on SB350 and its impact.
Finance Director William Fox provided a brief update on the pending bond sale.
Director of Health and Environmental Control Leonard Grossberg provided a brief update on:
The DTSC addressing the Exide closure; AQMD Rule 415; and the mailing of permit renewals
by the Health Department.
Director of Human Resources Teresa McAllister reported on the following: administration of
the Account Clerk exam; updating payroll system with new MOU provisions; update on annual
Regular City Council Meeting Minutes
July 7, 2015
Page 11 of 11
health fair; training calendar soon will be out; currently working on various personnel policies
to bring forward for Council consideration.
Economic Development Manager Alex Kung briefly reported on the following: update on
AB113 and AB86; and the City’s application for the LAEDC award.
City Clerk Maria Ayala briefly reported on the following: announced the FPPC Form 470 due
at the end of the month by Councilmembers; City Clerk’s office being awarded a grant from
the CCAC to apply to the Records Program; and the department working on finalizing an RFI
to begin Records Program.
Senior Advisor to the City Administrator Fred MacFarlane reported on the: grand opening of
Vernon Village Park Apartments; and the airing of True Detectives Season 2 which was filmed
in Vernon.
City Deputy Administrator Kristen Enomoto provided an update on the following: Housing
Commission related activities, such as: four of the seven seats that will be vacant, and
advertisement of vacancies on commission; RFP responses to commence sale of Huntington
Park properties; and an update to the remodel project for the seven Vernon units.
City Administrator Mark Whitworth reported on: upcoming Independent Cities conference
beginning July 9 in San Diego; and the City is soon expecting Mr. Van de Kamp’s latest report.
32. City Council Reports – brief report on activities, announcements, or directives to staff.
Mayor Pro-Tem Davis asked that the street lights that are out on Fruitland and Boyle be
addressed.
With no further business, at 12:04 p.m., Mayor McCormick adjourned the meeting in memory of
Captain Jim Dunn.
________________________
W. Michael McCormick
Mayor
ATTEST:
_________________________
Maria E. Ayala
City Clerk
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CITY OF VERNON. LIGHT & POWER ACCOUNTS PAYABLE CHECK NO 511473
OATE
061115
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Retund on closed account no. 1270
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0.00 500.00
Vorn rn ZNA llalrcZ*,500 00
PLEASE DETACH BEFORE DEPOSITING
City ot Vernon - Light & Power
4305 Santia Fe Ave
Vernon, CA90058
(323) 583-8811
PAY Five Hundred Dollars and No Cents
EIST WESI AAN(
2OOO HUNTIXCION DR. 2ND FLOOR
TO THE
ORDER
OF
K TECHNOLOGY USA INC.
8720 VESTAVIAAVE,
BUENA PARK, CA 90621
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Pavrolls reDorted for the month of June:
05117115 - 05130115, Paydate 06/11/15
05131115 - 06113115, Paydate 06/25l'15
Payment
Method Date Payment Description Amount
Total net payroll and payroll taxes
Checks
ACH
ACH
Checks
ACH
ACH
ACH
ACH
ACH
347867
347858
347861
37871
347872
ACH
ACH
ACH
347948
3r'.7941
u7949
347951
347952
06/'11115
06111115
06/11/15
06125115
06t25t15
06t25t15
06t11t15
06t11tl5
06t11115
06t11t15
06t11115
06t11t15
06t11t15
06t11t15
06t25t15
06n5t15
06t25t15
06t25t15
06t25t15
06t25t15
06t25t15
06t25t15
Net payroll, checks
Net payroll, direct deposits
Payroll taxes
Net payroll, checks
Net payroll, direct deposits
Payroll taxes
$ 18,608.94
708,938.77
190,721.00
16,415.70
763,407.85
219,355.98
1,9',t7 ,48.24
Payroll related disbursements, paid through
General bank account
Total net payroll, taxes, and related disbunsements
ICMA
CaIPERS
California State Disbursement Unit
Sandra Bingman
Franchise Tax Board
IBEW Dues
Vernon Firemen's Association
Vernon Police Otficers' Benefit Association
ICMA
CaIPERS
California State Disbursement Unit
Sandra Bingman
Franchise Tax Board
Teamsters Local 911
Vernon Firemen's Association
Vernon Police Officers' Benefit Association
28,331.21
333,036.31
3,175,55
2,000.00
180.00
2,668.63
3,215.00
1 ,887.60
29,769.85
345,317.85
3,584.15
2,000.00
180.00
2,265.00
3,215.00
1,887 60
762,7'13.75
$ 2,680,161.99
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RECEE\/ED
JUL l4 2015
CIIY CLERl('S OFFICE
STAFF REPORT
CITY ADMINISTRATION
DATE:
TO:
FROM:
RE:A Proclamation Declaring the Month of September 2015 as .Childhood
Cancer Awareness Month'
Recommendation
A. Find that approval of the proposed proclamation declaring the month of September 2015
as "Childhood Cancer Awareness Month" is exempt under the Calitbmia Environmental
Quality Act C'CEQA") in accordance with Section 15061(bX3), the general rule that
CEQA only applies to projects that may have an effect on the environment; and
B. Approve a proclamation declaring the month of September 2015 as "Childhood Cancer
Awareness Month" in suppo( of the American Cancer Fund tbr Children, lnc. and Kids
Cancer Connection, Inc.'s fight against childhood cancer.
Background
The American Cancer Fund tbr Children, Inc. and Kids Cancer Connection, [nc. were founded
over twenty years ago by Steven Firestein, a member of the philanthropic Max Factor tamily.
The American Cancer Fund for Children, Inc. and Kids Cancer Connection, Inc. are dedicated to
helping children suffering from cancer and their families. The organizations report that cancer is
the leading cause ofdeath by disease among children in the United States between infancy and
age 15, and is detected in more than 15,000 ofour nation's youth each and every year. A major
part ofhelping children with cancer is making the situation known.
The American Cancer Fund for Children, Inc. and Kids Cancer Connection, Inc. provide a
variety of vital patient psychosocial services to children undergoing cancer treatment at
Children's Hospital Los Angeles, The City ol Hope, Mattel Children's Hospital at UCLA, L.A.
County - USC Medical Center, Kaiser Permanente Medical Center as well as participating
hospitals throughout the country, thereby enhancing the quality of lif'e tbr these children and
their families. The services offered fbcus on family, education and peer support.
July 21, 2015
Honorable Mayor and City Council
Mark C. Whitworth, City A
Originator: Lilia Hernandez, Executive ihe City Administrator
Page I of2
The American Cancer Fund for Children and Kids Cancer Connection also sponsor Courageous
Kid Recognition Award ceremonies and hospital celebrations in honor of a child's determination
and bravery to light the battle against childhood cancer. The proclamation will be sent to The
American Cancer Fund tbr Children, Inc. and Kids Cancer Connection, Inc. by mail. They wi
share the proclamation with local tamilies during the year.
Fiscal Impact
There is no cost associated with this item.
Attachment(s)
None.
Page 2 of 2
A PROCI}IMATION OF TITE MAYOR AND TITE CITY COANCIL OF TITE CITY
OF VE,RNON DECLARING TITE MONTIT OF SEPTEMBER 2OlS AS
UCIIILDITOOD CANCER AWARENESS MONTIT'
WTITEREAS, the Ameicat Cancer Fund for Chitdnn andKids Cancer Conrcction re?lrt canc€r is the ltading catse of diatb bJ
disease anotg(J.j. cbildnt betwun itfotry and ageffeen ard is drhctetl ifl ftatb 15,000 ofotr coantry's lotmg peoplt etch atd euryleat;
and
WTITEREAS, ote infw of otr rutiott's childnr kses bis or ber battle atilb cancer; manl i{a s, cbildm a teens will sufer
fnn kry-tenz efeas ol nrtPftbenil,e tftntne , itdding suondary cancerq atd
WHEQEAS, fondtd owr tuen!1ears ago fo Steuer Finttin, a nenber of the phila bmpic Max Factorfani!, the Aneicat
Cancer Fndfor Childnt, hc., ardK k Cancer Connectio4 hc. are fudicated l.o belping these childnt atd tbeirfanili*; a
WHEREAS, the Ameicat CarcerFndfor Childret ard Kds Carcer Anectior pmvik a variery of vitalpatien pgcbosocial
serices to childnn rflfurying cancel t ?atnent at Ckldnn's Hotpital L.os Angeh1 The CiU of Ho?e, Mdltel Childnn's HoEilal at
UC1-A, LA. CoutE - USC Medical Center, Kaiser Petmanente Medical Center, as well ar participatiry bospitak tbmtgbod tbe cortrltry,
thenbl enbarcirg the q aliA ol W flr these childnt attd theirfamilies; and
W,I1EREAS, the Ameicat Carcer Flndfor Children ard Kfu Cancer Courectior abo sponsor Covrageou Kd Recogttition
Award cenmonies arrd hoE tal cebbtotions it honor of a child's dcterminotior a brauery to fgbt tbe banle agaitst childhood cancer; and
IYHEPE AS , the CiE of Venot wisher t0 iflit€ all ftridt s ard buinesses vithir tbe CiA 0f Verlort to Panicbate in
Childbood Couer Awanrcss Month it honor of cbildnr wbo haye hst their liws to carcer and those t'ho are ruw cotrageousll fighting tbe
batlle witb cancer.
NOV, 7]JEREFORE, THE MAYORAND THE AW COUNCIL OF THE CITY OF I,U RNON, ON
BEIIAI.F OF TTS EMHA\EES, RESIDENTJ-4-AJD BUSINESSES HEREBY DEC'I-ARES THE MONTH OF
SEPTEMBER 201 5 AS CHII-DHOOD CANCERAIY/ARENESS MONTTI. THIS PROCLAfuTA1ION IJ BEINC
PBESENTED TO T'ILE AMEPJCAN C4N6ER FUND FOR CHII'REAi INC,, AND KIDS CANCER
COAEJECTON, INC.,BYT'HEHONORABIE, MAYORIY. MICHAELMCCOP,IYIICKFORAND ON BEIIAL-F
OF THE AW COUNCIL OF THE CITY OF I,TRNON THIJ 2IST DAY Ot,_ JULY T'TIO THOUSAND AND
FIP-TEEN.
CITY OF I,']ERN'ON
REGEIVED
JUL t 4 2015
CITY CLERI{'S OFFICE
STAFF REPORT
CITY ADMINISTRATION
DATE:
TO:
FROM:
RE:
July 21, 2015
Honorable Mayor and City Council
Mark C. Whitworth, City Administrato
Originator: Lilia Hernandez, Executive o thc City Administrator
Report on Contracts Exempt from Competitive Selection by the City
Administrator
Recommendation
A. Receive and file this report as it is being provided for informational purposes only
pursuant to Section 2. 17.12(BX3) of the Vemon Municipal Code.
Backsround
Pursuant to Section 2.17.12(BX2) of the Vemon Municipal Code, specific contracts may be
exempted from the competitive selection process, where it is found that the best interests of the
City are served by a direct award of the contract without a competitive selection process.
Section 2.17.12(B)(3) of the Vemon Municipal Code gives the City Administrator the authority
to make such finding(s) for all contracts with a total value over the lifetime of the contract up to
S100,000 and when making such tinding(s), requires the City Administrator to submit a written
report to the City Council, at a regular City Council meeting within 30 days of the finding(s),
detailing the reasons for the finding(s).
On July 6, 2015, the City Administrator approved the City Attomey's request to authorize the
direct award of a legal services agreement with Duane Morris without undergoing a fbrmal
competitive selection process. The City Administrator's determination that the "best interests of
the City are served by a direct award ofthe contract" is based on the reputation and expertise of
Duane Morris, their willingress to charge the City a competitive municipal rate, and the current
stathng and leave issues in the City Attomey's Office. Duane Morris is a well-respected large
multi-national law firm with expertise in complex business transaction and litigation matters. In
addition to their expertise in numerous practice areas, Duane Morris has agreed to charge the
City a negotiated rate signiticantly lower than the t-rrms' normal billing rate. The proposed rate
is also lower than hourly rates currently charged by several other municipal firms under contract
with the City. Additionally, Duane Morris has expressed a willingness to work closely with the
City's in-house attomeys in order to minimize legal costs and capitalize on areas of in-house
Page I of2
expertise and experience. The agreement with Duane Morris is for a period ofone year at a cost
not to exceed $75,000.00.
Fiscal Impact
Sutficient funds for this agreement are available in the 2015/2016 City Attomey budget.
Attachment(s)
None.
Page 2 of 2
REG f \iED
JUL l4 2015
CITY CLERK'S (]FFICE STAFF REPORT
CITY ADMINISTRATION
DATE:
TO:
FROM:
RE:
July 21,2015
Honorable Mayor and City Council
Mark C. Whitworth, City Administrato
Originator: Lilia Hernandez, Executive he City Administrator
Council Conference Attendance Report
Recommendation
A. Receive and file this Council Contbrence Attendance Report for the Independent Cities
Association 55th Annual Summer Seminar.
Backqround
Members of legislative bodies are required to provide brief reports on meetings attended at the
expense of the agency after the completion of the meeting.
Mayor McCormick and Mayor Pro-Tem Davis attended the Independent Cities Association 55th
Annual Summer Seminar, in San Diego, CA from July 9 - 12, 2015. The seminar program
included:
Thursdav. Julv 9. 2015
Welcome Reception
Fridav. Julv 10. 2015
Session #l: Water - How to Entbrce Usage, Regulate and Legislate
Session #2: Parking Technology and Smart Parking in Your City
Lunch Session - Presentation by The Gas Company - AB32-How To Comply, Global Warming
Solutions Act Including Greenhouse Gas Reduction
Session #3: Foreclosure and Fraud Prevention
Session #4: Cannabis - Banking, Tax Revenue, Tracking & Enforcement
Session #5: P3 with Small Cities to Fund New Projects
Page I of2
Saturdav. Julv 11. 2015
Session #6: Revitalizing City Operations and Services by Renegotiating Debt and Liabilities
Session #7: High Speed Rait
Session #8: Development in Socal Cities
Fiscal Impact
Sufficient funds for this conference were allocated in the fiscal year 201512016 City Council
budget.
Attachment(s)
Page 2 of2
FIRE DEPARTMENT
Michael A. Wilsory Fire Chief
4305 Santa Fe Avenue, Vemon, California 90058
Telephone (323) 5898811 Fax (323) 826-L407
RECEIVED
JUL I 3 20,5
CITI, ADMINISTRATION
July 10,2015
Honorable Mayor and City Council
City of Vemon
Honorable Members:
Attached is a copy of the Vemon Fire Department Activity Report which covers the period of
June 16,2015 through June 30,2015.
Respectfu lly Submitted,
MAW:ar
: Fireletnow
lEachuive$ Intustriaf
hl
VERNON ['IR"E, DEPARTMENT
COMPANY ACTIVITIES
June 16,2015 to June 30,2015
ACTTVITY TYPE
FIRE PREVENTION:
Regular Inspections (#) :
Re-Inspections (#):
Spec. Haz. Inspections (#):
Total lnspections:
Total Man Hours:
TRAINING (HOURS):
Firefighting
Hazardous Materials
Safety
Apparatus Operations
Equipment Operations
CPR
First Aid
Total Hours:
PRE-rNCrpENT (HOURS):
Plarring
District Familiarization
Total Hours:
PERIODIC TEST (HOURS):
Hose Testing
Pump Testing
This Period Last Year
Last Year To Date
720
l0l
27
848
1049
85
l5
116
118
120
0
2t
475
998
351
t352
t364
1359
48
339
581 1
81
96
t77
897
965
1862
4
0
4
This
Period
4t
t2
0
53
78
99
l0
109
This Year
To Date
8t2
169
20
1001
1418
8
31
90
40
124
123
123
I
27
528
1253
386
1664
1530
1597
24
265
6719
1150
964
2tt4
0
t,
0
0
8
J
26
l0
36Total Hours:
Page I
1l
PUBLIC SERVICE PROGRAMS fiOURS)
School Programs
Fire Brigades
Emergency Preparedness
Total Hows:
ROUTINE MAINTENANCE fi OURS):
Station
Apparatus
Equipment
Total Hours:
Grand Total Hours:1058
: F ireactivity
12
2
133
t47
0
0
8
8
tt4
t26
12',7
367
0
0
2
2
29
13
155
t97
1484
1523
t594
4601
1331
1367
1382
4080
12960
126
ll9
131
376
1508sr093
Page 2
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lncident Date
06i 16/2015 07:02:50
0611712015 07:55:06
OGllTnUS 09:42:18
OGl17l2O15 10-.42:35
OGl17l2O15 21:00:16
06/18/2015 01:37:08
0611812015 19:02:22
06/19/2015 08:54:49
OOl19l2O15 12:15:05
OOl19l2O15 15:48:36
0611912015 19:28:49
ffi12012015 06:40:46
0612012015 19:50:51
OG|2Z2015 O4:21 :53
0612212015 08:29:50
0612212015 09:30:55
0€,12212015 10:45:47
c6,12A201510:53:27
061221201511:36:30
0f,D212015 17:02:15
OOt23l2O15 10.02:27
OOl23l2O15 15.46:12
OGl23l2O15 23:56:29
0€,12412015 07:56:22
0f,124t2015 10.03:24
06124t2015 10.35:42
0612412015 13:36:29
0612412015 16:44:52
0612412015 18:44:31
0612512015 09:58:22
OOl25l2O15 12.45:OB
0f,12512015 13.55:27
001251201514:19:39
0612512015 15:28:42
0€,12512015 18:1 5:40
OOl25l20152O:U:02
0612512015 21 :23:30
0€,12512015 23:58:57
OOl26nO15 U:21143
0612612015 11:25:26
0612612015 14:22:'i.4
0O12612015'16:13:M
0612612015 19: :31
OOl27l2O15 05:35:21
PREI'ENTION FOLLOW.UP?
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
shaftlncident Type
322 Motor vehicle accident with iniuries
321 EMS call, excluding vehicle accident with inju
671 Hazmat release investigation W no hazmat
740 Unintentional transmission of alarm, other
651 Smoke scare, odor of smoke
741 Sprinkler activation, no fire - unintentional
741 Sprinkler activation, no fire - unintentional
551 Assist police or other governmental agency
741 Sprinkler activation, no fire - unintentional
324 Motor vehicle accident with no injuries
611 Dispatched & canceled en route
700 False alarm or false call, other
700 False alarm or false call, other
321 EMS call, excluding vehicle accident with inju
700 False alarm or false call, other
321 EMS call, excluding vehicle accident with iniu
671 Hazmat release investigation W no hazmat
324 Motor vehicle accident with no injunes
321 EMS call, excluding vehicle accident with iniu
730 System malfunction, other
700 False alarm or false call, other
321 EMS call, excluding vehicle accident with inju
322 Motor vehicle accident with injuries
322 Motor vehicle accident with injuries
321 EMS call, excluding vehicle accident with inju
740 Unintentional transmission of alarm, other
321 EMS call, excluding vehicle accident with inju
321 EMS call, excluding vehicle accident with inju
740 Unintentional transmission of alarm, other
520 Water problem, other
531 Smoke or odor removal
321 EMS call, excluding vehicle accident with inju
322 Motor vehicle accident with injuries
321 EMS call, excluding vehicle accident with iniu
700 False alarm or false call, other
321 EMS call, excluding vehicle accident with inju
740 Unintentional transmission of alarm, other
130 Mobile property (vehicle) fire, other
32'l EMS call, excluding vehicle accident with inju
741 Sprinkler activation, no fire - unintentional
735 Alarm system sounded due to malfunction
7 45 Alarfi system activation,no fire,unintentional
741 Sprinkler activation, no fire - unintentional
745 Alarm system activation,no fire,unintentional
571 Cover assignment, standby, moveup
322 Motor vehicle accident with injuries
322 Motor vehicle accident with injuries
321 EMS call, excluding vehicle accident with inju
611 Dispatched & canceled en route
324 Motor vehicle accident with no injuries
321 EMS call, excluding vehicle accident with inju
322 Motor vehicle accident with injuries
321 EMS call, excluding vehicle accident with inju
700 False alarm or false call, other
142 Brush, or brush and grass mixture fire
0612712015 07:57:56
0612812015 19:OO:10
0612912015 02:31:08
OOl29l2O15 09:13:28
0612912015 1Q:35:02
06,12912015 22:36:22
06130t2015 03:09:49
06/30/2015 06:24:39
06,13012015 08:32:13
06,13012015 12:41:54
06/30/2015'14:04:08
No
No
No
No
No
NO
No
No
No
No
No
o
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JUL O 9 ZO15
CITY CLER|{'S OIFICE
Health and EnwironrnentatControl Departrnent
Memo
To: Mark WhitwortlL C
From: LeonardGrossberg,
Date: 1u1y7,2015
Re: Transrnittal of Health & Environmental Control Departnent Monthly Report
I am forwarding the attached subject report for June 2015 for submission to the City Council. I am requesting
that the report be placed on the normal City Corurcil agenda.
Please let me know ifyou need additional information.
Attachment
RECEIVED
JUL 0 i 20,5
CIIY ADMII,IISTRATION
9cLgl':,y&nry,4lDhrrr,rry repontcity Adrmn Tmnslnitral Mond y Repon Ju, 2015
HEALTH & ENVIRONMENTAL
GONTROL DEPARTMENT
JmeZJ,|,s
MONTHLYREPORT
Leonard Grossberg, Director / Health Offcer
IIEALTH & ENVIRONMENTAL CONTROL DEPARTMENT
MONTHLYREPORT
June, 2015
HAZARDOUS MATERIALS CONTROL
Activity in June centered on preparation of annual Hazardous Materials Establishment and
Underground Tank Facility permit renewals, which are on a fiscal year invoicing basis. 2015 is the
nineteenth year our department has acted as a Certified Unified Program Agency (CUPA), and the
twelfth year we have issued a consolidated invoice to businesses. Hazardous Materials Establishment,
Underground Tank, and State surcharge fees are all included on one invoice. The CUPA invoices
included a certification form Hazardous Material operators must complete to veriff information
previously submitted through the Califomia Environmental Reporting System (CERS) is still current.
Almost 500 health permit renewal invoices were sent to hazardous materials establishments in Vemon.
Emergency response activities included one non-hazardous materials spill investigation and several
sewagi discharge investigations around the District and Atlantic Blvd. areas. On June 15th, with the
assistance of the Vemon Police & Fire Departments, we were able to apprehend someone in the act of
discharging waste liquids onto the streets near Atlantic Blvd. resulting in an arrest. The investigation
is on-going, and hopefirlly, restitution for the City for cleanup activities will be coming.
Other significant activities included the ongoing remediation planning ald closure activities for the
Pechiney facility on Fruitland Avenue, the closure for 2522 E. 37s Street, the Cargill closure on Jewel
Ave., the notification of closure for Clorox Co. on Bandini Blvd., the Remedial Action Plan for 1890
E. 256 Street, , and the Thermador facility on District Blvd. In addition, the Vemon Village
Apartments opened for occupancy, and new Vemon residents started moving in!
Director Leonard Grossberg hosted CalRecycle personnel for the Bi-annual audit of the Department's
Solid Waste Enforcement Program. A review of our agency's policies and protocols, efforts in
documenting diversion numbers, recycling and re-use efforts by businesses, and updates to the solid
waste franchise agreements were discussed. A final report documenting the findings is still pending,
yet is expected to be favorable.
Senior Environmental Health Specialist Jerrick Torres conducted Hazardous Operations Participation
review with Whole Foods tnc. at the pending new facility on Pacifrc Blvd.
2
UNDERGROUND TANK PROGRAM
No underground tanks were removed in Vemon during the month of June. Staff continued to supervise
work on underground tanks for compliance with AB 989 requirements and certification efforts,
including observing 4 certification tests. One UST permit was closed by its operator, and immediately
permitted by the property owner until such time that a new tenant can open a new permit for the site.
A work plan for an Underground Storage Tank removal was submitted for review at 4622 Alcoa Ave.
and is pending approval.
T.OODPROGRAM
In June, inspection staff focused on inspection of retail food facilities for compliance with food safety
standards. Staff confirmed that the facilities were in substantial compliance.
This month, fiscal year invoices were prepared for mailing to wholesale food vehicle operators.
Senior Environmental Health Specialist Lyndon Ong Yiu worked on three new plan check reviews
(Whole Foods, Contessa, and Bon Appetit) during the month of June, and issued approval for one site.
He also continues working with regional committees on mobile food facility issues, commissary
guidelines, and CalCode updates.
EI{VIRONMENTAL PROTECTION
Fifteen water samples were collected from the three potable water supply systems within the City. All
samples were analyzed negative for e-coli and total coliforms and met State standards for potability.
Director Leonard Grossberg worked on the development of an application for the Used Oil Grant
Program (OPP6). The grant provides firnds to conduct public oufieach and awareness efforts to
improve used oil and used oil filter recycling activities. The gmnt request was presented and approved
by the Council June 16d and submitted on June 23'd.
Director Grossberg participated in the first "White House Summit on Climate Change and Public
Health." The onJine event brought together top scientists and lead White House agencies to work
together in developing policies to address public health concems and the effects of global warming on
the public.
3
Director Grossberg continues to manage the "Hazardous Materials Emergency Plan" Grant for FY
ZOl4-2015. The grant provides funds for staff to prepare and submit a City Area Emergency Plan
which is coordinated with the Health & Fire Departrnents. Approved in October 2014, we are using a
contract employee to prepare the plan for review and submittal and use the grant fundhg provided to
pay for his rarry. Wi anticipate having a draft plan in August for review, and also plan to schedule a
table-top exercise with the Vemon fire Department at that time.
Director Grossberg also processed the renewal of a one year contract with "Decade Software
Company" for data management of environmental programs in the Health Dept'
Animal complaints were routine during the month. Health Department staff and Animal Control
Of6cers from the South East Area Animal Control Association investigated several complaints on
loose and injured dogs, feral cats/kittens, and an injured duck!
Senior Environmental Health Specialist Jerrick Torres reviewed Storm Water Discharge Plans for
Nature's Produce new facility on Bandini Blvd., and commented on the Phase I report for 2800 Ayers
Street.
Senior Environmental Health Specialist Linda Johnson attended the "Disaster Debris Management"
training in fuverside, the "Solid Waste Load-Check Training" in San Bernafdino, and the "Recycled
Water Users Site Supervisors Training" in Cerritos during the month of June'
Other staff continue to expand their knowledge and expertise by also attending training seminars,
lectures, and continuing education classes. Lyndon Ong Yiu attended the "CHMIA -Hazardous
Materiis Investigations- Training" in San Luis Obispo, and the "AWWA-American Water Works
Assoc." conference in Anaheim, both one-week trainings. Erik Cheng, Jerrick Torres and David
LeDuff attended the "CAPCA" and "PAPA" seminars for continuhg education units for their Vector
Control Certifications.
Senior Environmental Specialist Jerrick Torres conducted an asbestos sample analysis for the Police
Department's generator room in the basement. The laboratory results indicated that f'no" asbestos
"ontuining -ut.rials were present in the insulation sampled. The old generator is being removed, and a
new generator and cement pad is being installed in its place'
Chief Deputy Director David LeDuff coordinated a mosquito survey within the Los Angeles River to
monitor the breeding of mosquitos, and found minimal activity present. Sources found, like standing
water which were conducive for breeding were physically removed.
Director Leonard Grossberg participated in a Community Advisory Meeting with DTSC in Maywood
for the Exide closure; attended the Odor Management Workshop in East Los Angeles for Rule 415
Rendering Odors; and conducted a document review for Exide Technologies in order to submit
comments to DTSC for the Exide Closure Plaa.
Finally, Chief Deputy Director David LeDuff spent a considerable amount of time inputting
enforcement data into CERS in order to bring our inspection records into compliance with the State's
request. This data will be used to monitor our compliance with CERS and other progams during our
CUPA audit in September.
9cLC:MyDocs/Z/Health Dept/Monrhly Reports/June 201 5 doc
5
S
Ivlav 2015
Hispanic Hea
iA la Buena hlud! - To Good Health!
Hispanics or Latinos are the largest raciaUethnic
minority population in the US. Heart disease and
cancer in Hispanics are the two leading causes ofdeath,
accounting for about 2 of 5 deaths, which is about the
same for whites. Hispanics have lower deaths than
whites from most of the 10 leading causes of death
with three exceptions-more deaths from diabetes and
chronic liver disease, and similar numbers of deaths
from kidney diseases. Health risk can vary by Hispanic
subgroup-for example, 667o more Puerto Ricans smoke
than Mexicans. Health risk also depends partly on
whether you were born in the US or another country.
Hispanics are almost 3 times as likely to be uninsured
as whites. Hispanics in the US are on average nearly 15
years younger than whites, so steps Hispanics take now
to prevent disease can go a long way.
Doctors and other healtlcare professionals can:
0 Work with interpreters to eliminate language
barriers, when patient prefers to speak Spanish.
0 Counsel patients on weight control and diet if they
have or are at high risk for high blood pressure,
diabetes, or cancer.
0 Ask patients if they smoke and if they do, help
them quit.
0 Engage community health workers (promotores
de salud) to edrcate and link people to free or
low-cost services.
+ See page 4
Want to learn more? Visit
1.inG
About I in 6 people living in
the US are Hispanic (almost
57 million). By 2035, this
could be nearly I in 4.
24%+
Hispanic death rate is
24olo lower than whites
("non-Hispanic whites").
tsox
Hispanics are about 50olo
more likely to die from
diabetes or liver disease
than whites.
Centers Control and
Offce of Minority Health
Health risks differ
among Hispanics.
Hispanics have fifferent degrees of illness or
health risks than whites.
0 35% less heart disease and 497o less cancer;
0 A lower death rate overall, but about a 50% higher
death rate from diabetes;
0 24o/o more poorly controlled high blood pressure;
0 23% more obesity;
0 28% less colorectal screening.
Hispanic subgroups have difierent degrees of
health risk and more need to receive preventive
screenings as recommended-
0 Mexicans and Puerto Ricans are about twice as
likely to die from diabetes as whites. Mexicans also
are nearly twice as likely to die from chronic liver
disease and cirrhosis as whites.
0 Smoking overall among Hispanics (14olo) is less
common than among whites (24%), but is high among
Puerto Rican males (267o) and Cuban males (227o).*
0 Colorectal cancer screening varies for Hispanics
ages 50 to 75 years.
r About 407o of Cubans get screened (29% of men
ard 49Vo of women) ;
' About 587o of Puerto Ricans get screened (54Vo of
men and 617o of women).
0 Hispanics are as likely as whites to have high blood
pressure. But Hispanic women with high blood
pressure are twice as likely as Hispanic men to get it
under control.
Whether Hispanics were born in
the US makes a di-fference.
0 Cancers related to infections (cervical,
stomach, and liver) are more common
among Hispanics born in another
country.
0 Compared with US-born Hispanics,
foreign-born Hispanics have:
. About half as much heart disease;
. 4896 less cancer;
. 29% less high blood pressure;
r 45% more high total cholesterol.
0 Social factors may play a major role
in Hispanic health. Among Hispanics
living in the US:
. About I in 3 has not completed
high school;
r About I in 4 lives below the
poverty line;
r About I in 3 does not speak
English well.
*NariorEl Health lnterview Survey data,
2009-2013 combined, for ages 18-64 years.
-I'
-
E
Frl @ s is t,
Non-Hispanic Whites
SOURCES: National Heatth lntervlew Survey, 20092013,
National Health and Nutrition Examination Suruey, 2OOg2Ol2-
1 Heart Disease
Cancer
Chronh Lovver Respiratory
Dise6€s
lJninteniional lniu es
Stroke
Alzheimer's Disease
Diabetes
lnfluenza & Pneumonia
2
9 sri"io"
1O Xioney Diseases*
SOURCES: Vital Statistics Cooprative Program, Monality Data Files, 2013
50
E45s40
:3s
iso
-e 25
?.20
.9E1s
.2E10
E
ER5
1-
10
€8
=7
=3s
,9
34
.9Es*z
L
2.7%I
Cancer
47.lYo lus.oo.
Foreign'born
L7.7v.
I
0besig Gigarette Smoking
6.8%
Heart Disease
SoURCES: National Heatth lntetuiew Suruey, 20092013, National Health and Nutrition Examination Survey, 20092012.
Differences in selected
CHRONIC DISEASE BURDEI{ for
Non-Hispanic ltVhites rc. Hispanics
Differences in the 1O leading causes of death,
NON-HISPANIC WHITES vs HISPANICS
Cancer
Heart Disece
Unintentional lnjuries
Strot(e
Diabetes
Chronic Liver
Diseas€ & Clrrhosis
Chrcnic Lorrer R€spi6tory
Dise6€s
L
2
3
4
I Al'frcimer's Disease
9 lnfluenza & Pneumonia
1O xioney oiseases*
+Types of kidney diseas€s-Nephrhis, Nephrouc SFdrome & Nephrosls
Non-Hispanic Whites Hispanics
TOP DISEASES and RISI( FACIORS for HISPANIS
36.3%
3.6%I
What Can Be Done
Federal Eiovernment is
0 Helping eligible Hispanics get insurance
coverage through the Affordable Care Act.
0 Working to build capacity in communities to
use community health workers (promotores de
sdl d) to help improve the health of Hispanic
communities.
0 Leveraging existing programs to improve
community health services and access to
preventive care.
0 Making efforts to better represent all Hispanics
in national health surveillance data and
research studies and use the data to
help improve Hispanic health.
Doctors and other healthcare
professionals can
0 Work with interpreters to eliminate language
barriers, when patient prefers to speak Spanish.
0 Counsel patients on \veight control and diet
if they have or are at high risk for high blood
pressure, diabetes, or Grncer.
0 Ask patients if they smoke and if they do,
help them quit.
www.espanol.smokefree gov/. 1 800 QUIT-NOw
0 Engage community health workers
(promotores de salud) to educate and link
people to free or low-cost services.
wwrv.cdc.gor,/mrnoriq.health/
Community Health Workers
(promotorx de salud) can
0 Use resources that have been developed
to educate the Hispanic community about
health risks and preventive services.
www.cdc. gov/minorityhealth/promotores
Evervone "", fiflJ+
0 Sign up for health insurance, if eligible,
through the Affordable Care Act regardless
ofwhether or not you have a pre-existing
condition and find out if you are eligible
for cost savings. wurd.cuidadodesalud.gov/es/
0 Talk to your doctor or other healthcare
professional about which cancer screening
tests to get and how often, especially ifyou
have a family history of cancer. Follow-up on
any abnormal results.
0 Make a strong effort to follow proven health
tips such as quitting smoking, staying on
medicine to control blood pressure and
cholesterol, and maintaining a healthy weight
by taking at least one brisk lO-minute walk,
3 times a day, 5 days a week
0 Learn about diabetes and how to prevent
type 2 diabetes.
0 Eat a healthy diet that is low in salt, low in total
fat, saturated fat, and cholesterol, and rich in
fresh fruits and vegetables.
For more information, please contact
Telephone l-E0O-CDC-INFO (232-,1536)
TTY: l-888-232-63,18
Centers tor Disease CoDtroland Prevmtioo
t6r-rr) Clilion RoaJ -\H, Arlanra, GA lLl333
Publicanon date: 05/05/2015
62553404
REFEqVED
JUr, 1 5 2015
CI'iY []LTRKS OIIICE
RECEIVED
JUL I { 20ts
CITY ADMINISIRATION
STAFF REPORT
HEALTH & ENVIRONMENTAL CONTROL
DATE:
TO:
FROM:
RE:
July 21,2015
Honorable Mayor and City Council
Leonard Grossberg, Director / Health Officer fl,A
Receipt and Review of the Annual City of Vernon Jail lnspection
Report to the California Board of Corrections
Recommendation:
A. Find the submittal and review of the subject documents is exempt under the
California Environmental Quality Act (CEOA) in accordance with section
15061(b)(3), the general rule that CEQA only applies to projects that may
have an effect on the environment; and
B. Receive and File the 2015 Annual City of Vernon Jail lnspection Report
BACKGROUND:
Once a year, under direction of the Vernon Health Officer, and as required by the State
of California Board of Corrections, our department conducts an inspection of the City of
Vernon Jail.
On April 2, 2015 the City of Vernon Jail was inspected to document compliance with
Board of Corrections (BOC) requirements. Using BOC guidelines and forms, the
following sections were evaluated:
. Environmental Health Evaluation. Nutritional Health Evaluation. Medical/Mental HealthEvaluationo Environmental Health lnspection Checklist (CAL-Code)
Each section was found to be in compliance with all of the required conditions.
This Staff Report is informational only and will serve as a notice that copies of the report
have been fonrarded to the BOC and City personnel.
FISCAL IMPACT:
None
Attachments:
BOC cover letter
Adult Types Cover Letter
Environmental Health Evaluation
Nutritional Health Evaluation
Medical/Mental Health Evaluation
EH lnspection Checklist Attachment
VPD/Health Jail lnspection Checklist
Procedure Manual Checklist
City of Vernon Police Department, Chief of Police
City of Vernon Community Services & Water
gcLG :MyDocsryPD/201 s/Staff Report
HEALTH & ENVIRONMENTAL CONTROL DEPARTMENT
Leonard Grossberg Director / Health Officer
4305 Santa Fe Avenue, Vernoq Cali{omia 9005g
Telephone (323) 583-881 1
July 9,2015
California State Board of Corrections
600 Bercut Drive
Suite A
Sacramento, CA 95814
Gentlemen:
In compliance with Section 459 of the Health and safety code, the city of vemon Jail was
inspected on April 2,2015. The inspection showed that the facility complies with the standards
and requirements prescribed by the Board of corrections regarding sanitary conditions. No
violations were noted at the time of inspection.
A copy ofthe inspection report is attached.
Respectfu lly submitted,
Attachments
9cLG:VPD/JAIU B O C 20ls.doc
W"*4**4
Leonard Grossberg, MPA, REHS
Director,/Health Offi cer
Eqchufuefy Intrustriaf
FACILITY NAME:
CITY OF VERNON POLICE DEPARTMENT
COUNTY:
LOS ANGELES
FACILITY ADDRESS (STREET, CITY, ZIP CODE, TELEPHONE):
4305 S. SANTA FE AVE., VERNON, C A 90058 323/587-5171
CHECK THE FACILITY TYPE AS DEFINED IN
TITLE I5, SECTION 1006:
TYPE I: X TYPE II:TYPE III:TYPE IV:
ENVIRONMENTAL HEALTH EVALUATION DATE INSPECTED: 04/0212015
ENVIRONMENTAL HEALTH EVALUATORS (NAME, TITLE, TELEPHONE):
LEONARD GROSSBERG, DIRECTO& 3231 583-881 I X 23 I
FACILITY STAFF INTERVIEWED (NAME, TITLE, TELEPHONE):
OFFICER ROBERT SOUSA, 3231 587-5171 X 126
NUTRITIONAL EVALUATION DATE INSPECTED: O4/0212015
NUTRITIONAL EVALUATORS (NAME, TITLE, TELEPHONE):
LEONARD GROSSBERG, DIRECTOR, 3231 583-881 I X 23 I
FACILITY STAFF INTERVIEWED (NAME, TITLE, TELEPHONE):
OFFICER ROBERT SOUSA, 3231 587-5 I7I X 126
MEDICALA4ENTAL IIEALTH EVALUATION DATE INSPECTED: 04102/2015
MEDICAL/MENTAL HEALTH EVALUATORS (NAME, TITLE, TELEPHONE):
LEONARD GROSSBERG, DIRECTO& 3231 583-881I X 231
FACILITY STAFF INTERVIEWED (NAME, TITLE, TELEPHONE):
OFFICER ROBERT SOUSA, 3231 587-5I7I X 126
This checklist is to be completed pursuant to the attached instructions.
ADULT TYPE I, II, III and IV FACILITIES
Local Detention Facility Health Inspection Report
Health and Safety Code Section 101045
CSA #:
ADULT TYPES COVER: 2015 COVER I CSA FORM 35E (R€v 10/08)
I. ENVIRONMENTALHEALTHEVALUATION
Adult Type I, II, III and IV Facilities
Article 12. Food
Do not identiry
compliance with this
section here.
See comments.
Approach for Providing Food Service
, CalCode the California Retail Food n Code(HSC
Division 104, Part 7, Chapter l-13, Section I 1370
et seq.) has been incorporated into Title I 5 for local
detention facilities through the rulemaking process.
Food served in the facility is prepared in the facility.
If "No," respond to items I and 2 below prior to
with the checklist-
l. Food is prepared at another city or county
detention
2. Food is contracted tkough a private vendor
who had been inspected and complies with
ofCalCode.
1230 Food Handlers
(Note: Title 15, S 12i0 is in Article 11, MMH, but
ispeaed under Environmenlql Heqlth due to
CalCode reference.)
Policy and procedures have been developed and
implemented for medical screening of (inmate) food
handlers in the
There are procedures for education, supervision and
cleanliness of food handlers in accordance with
HSC 8 I13967. 113952-fi396t. |L3973. tt3977.
1243 Food Service Plan
There is a food services plan that complies with
appticable California Retail Food Code ( CatCode).
Facilities with an average daily population of 100 or
more have a trained and experienced food service
manager to prepare and implement a food services
plan.
The plan includes: planning menus; purchasing
food; storage and inventory control; food
preparation; food serving; transporting food;
orientation and ongoing training; personnel
supervision; budgets and food cost accounting;
documentation and record keeping; emergency
feeding plan; waste management; and, maintenalce
and repair.
In facilities with less than 100 average daily
population that do not employ or have access to a
food services manager, the facility administrator has
prepared a food services plan that addresses the
elements listed above.
Should food be required, local fast food restaurants
will be used to sustenance at no cost.
The Environmental Health Inspector retains
primary responsibility to determine compliance
with Section 1230. Compliance should be assessed
in consultation with the Nutrition Inspector so that
the findings on the Environmental Health
Evaluation reflect the observations, expertise and
consensus of both pMies.
The Nutrition lnspector retains primary
responsibility to determine compliance with
Section 1243. Compliance should be assessed in
consultation with the Environmental Health
Inspector so that the findings on the Nutritional
Health Evaluation reflect the observations,
expertise and consensus of both parties. The text
ofthe regulation is provided here for reference
only.
ADULT TYPES ENVIRONMENT; 2015 ENV IIEALTH PAGE I TYPE l, II, lll & Iv - CSA FORM 358 (Rev l0/08)
1245 Kitchen Facilities, Sanitation and Food
Service
Kitchen facilities, sanitation, and food preparation,
service and storage comply with standards set forth
in CalCode.
In facilities where inmates prepare meals for self-
consumption, or where frozen meals or prepared
food from other facilities permitted pursuant to HSC
$ I l43El is (re)heated and served, the following
CalCode standards may be waived by the local
health offtcer. (Note: while the regulalion uses the
word "waived," the intent is thar lhe inspector
etercises professionql lqtitude lo approve
alternative methoh that that provide for food sa/ety
and sanitqtion in these silualions.
HSC $ I 14065 I 14130-t t414l, I14163, New
OT
HSC $ I 14099.6, I l4107ifa domestic or
commercial dishwasher, capable of providing
heat to the surface of utensils ofat least 180
degrees Fahrenheiq is used to clean and sanitize
multi-service utensils and multi-service
consumer
HSC $ I 14149-l 14149.3, provided there is
mechanical ventilation sumcient to remove
gases, odors, steam, heat, grease, vapors and
smoke fiom the
HSC I I14268-l14269 floon
HSC $ I 14279- I 14282 Storage area for
and
1246 Food Serving and Sup€rvision
Policies and procedures ensure that work
assignments are appropriate and food handlers are
adequately supervised. Food is prepared and served
only under the immediate supervision ofa staff
member.
COMI{ENTS
The Environmental Health lnspector retains
primary responsibility to determine compliance
with Section 1245. Compliance should be assessed
in consultation with the Nutrition Inspector so that
the findings on the Environmental Health
Evaluation reflect the obseryations, expefiise and
consensus ofboth Darti
No multi-use equipment or utensils are used.
The Environmental Health Inspector retains
primary responsibility to determine compliance
with Section 1246. Compliance should be assessed
in consultation with the Nutrition lnspector so that
the findings on the Environmental Health
Evaluation reflect the observations, expertise and
consensus of both
Facility holds inmates for no more than 72 hous.
No clothing is provided, except in emergency
situations (which includes outer garments and
slippers).
13. lnmaae and Personal
1260 Standard Institutional Clothing Issue
Personal undergarments andfooth)eor may be
substituted fot the hstitulional undergarments and
footwear speciJied in this regulation; however, the
facility has the primary respottsibility to provide
these items.
There is a standard issue of climatically suitable
clothing for inmates held after arraignment in T)?e
I, II and III facilities, which includes, but is not
limited to:
Clean socks and footwean
Clean outer
Clean undergarments, including shorts and tee
shirt for males; or, bra and two pairs ofpanties
for females.
Clothing is reasonably fitted, durable, easily
laundered and
ADULT TYPES ENVIRONMENT: 2015 ENV HEALTH PAGE 2 TYPE I, II, III & N - CSA FORM 35E (Rev t0/08)
1261 Special Clothing
Provision is made to issue suitable additional
clothing essential for inmates to perform special
tvort assigiments (e.g., food service, medical, fam,
mechanical and other
1262 Clothing Exchang€
There are policies and procedures for the scheduled
Unless work climatic conditions, illness, or the
CalCode necessitates more frequent exchange, outer
garments, except footwear, are exchanged at least
once each week. Undergarments and socks are
twice each week.
1263 Clothing Supply
There is a quantity ofclothing, bedding, and linen
available for actual use and replacement needs of
the inmate
There are policies and procedures for the special
handling of laundry that is known or suspected to be
contaminated with infectious material.
1264 Control of Vermin in Inmates Personal
Clothing
There are policies and procedures to control the
contamination and./or spread of vermin in all iomate
Infested clothing is cleaned, disinfected, or stored in
a closed container so as to eradicate or stop the
of the vermin.
1265 Issue of Persotral Care Items
There are policies and procedures for issuing
items.
Each female inmate is issued sanitary napkins
and,/or tamDons as needed.
Each inmate to be held over 24 hours who is unable
to supply himselffterself with personal care items, is
issued the following personal care items:
With the possibte exception of shaving implements,
inmates are not required to share any personal care
items listed above.
Inmates do not share disposable razors. Double-
edged safety razors, electric razors, and other
shaving instruments capable of breaking the skin,
when shared among inmates are disinfected between
individual uses by the method prescribed by the
State Board of Barbering and Cosmetolos/ in g 979
and 980, Division 9, Title 16. CCR.
work
COMMENTS
No special work assignmenls are given to inmates.
Facility holds inmates for no more than 72 hours.
No clothing is provided, except in emergency
situations.
Facility holds inmates for no morc than 72 houn.
No clothing is provided, except in emergency
situations.
Facility does not house female inmates.
ADULT TYPES EWIRONMENT; 2015 ENV HEALTH PAGE 3 TYPE I, n, III & N - CSA FORM 358 (Rev. t0/08)
ARTICLE/SECTION
1266 Personal Hygiene
There are policies and procedures for showering-
lnmates are permitted to shower-bathe upon
assignment to a housing unit and, thereafter, at least
other day and more often if
1267 Hair Care Services
Hair care services are available.
Except for those inmates who may not shaye for
court identification reasons, or, those who have had
their shaving privileges suspended by the facility
administrator because they are a danger to
themselves or otlers, inmates are allowed to shave
daily and receive hair care services at least once a
month.
Equipment is disinfected before use, by a method
approved by the State Board of Barbering and
Cosmetology to meet the requirements of Title 16,
Division 9, { 979 and 980. CCR.
1270 Standard Bedding and Linen Issue
For each inmate entering a living unit and expected
to remain ovemight, the standard issue ofclean
suitable bedding and linens includes, but is not
Iimited to:
One serviceable mattress which meets the
of ( 1272 ofthese
One mattress cover or one
One
One bla[ket, or more, depending upon climatic
conditions.
1271 Bedding and Linen Exchange
There are policies and procedures for the scheduled
exchange of laundered bedding and linen issued to
each inmate housed.
Washable items such as sheets, mattress covers, and
towels are exchanged for clean replacement, at least
once each week.
Where a top sheet is not issued, blankets are
larmdered or dry cleaned at Ieast once a month.
When a top sheet is issued, blankets are laundered
or dry cleaned at least once tkee months.
1272 Mattresses
Mattresses are enclosed in an easily cleaned, non-
absorbent ticking and conform to the size ofthe
bunk as referenced inTitle 24, Section 4704.3.5
Beds (at least 30" wide X 76"
Any mattress purchased for issue to an inmate in a
facility which is locked to prevent unimpeded
access to the outdoors, is certified by the
manufacturer as meeting all requirements ofthe
State Fire Ma$hal and Bureau of Home Fumishings
test standard 12l, 129 or most recent
Article 14.and Linens
MMENTS
Facility holds inmates for no more than 72 hours.
No hair care services is provided,
Only disposable items are used.
ADULT TYPES ENVIRONMENT; 2015 ENV HEALTH PAGE 4 TYPE I, ll, III & Iv - CSA FORM 35E (Rev. t0/0E)
1280 Facility Sanitation, Safety erd
Maint€naIlce
There are policies aad procedures for the
maintenance of an acceptable level of cleanliness,
the
The plan provides for a regular schedule of
housekeeping tasks and inspections to identifu and
corect unsanitaq/ or unsafe conditions or work
Medical care housing as described in Title 24, Parr
2, i 470A.2.14 is cleaned and sanjtized according to
policies and procedues established by the health
Title 24, Uniform Building Code - Plumbing
Toilet bowls, wash basins, drinking fountains, and
showers are clean and in
Title 24, Uniform Building Code - Cleanliness
and Repair
Floors, walls, windows, grillwork and ceilings are
clean and in
Title 24, Part I, 13-I02(c)6 - Heating and
Cooling
There is provision for a comfortable living
environment in accordance with the heating,
ventilating, and air conditioning requirements of
Parts 2 atrd 4 and energy conservation rcquirements
ofPart 6, Title 24, CCR.
Title 24, Uniform Plumbing Code - Floor Drains
Floor drains are flushed at least
contain water to ofsewer
Grids and
Title 24, Part 2, 47 0A.3.6 - Lighting
Lighting in housing units, da),rooms and activity
areas is sufficient to permit easy reading by a person
with normal vision.
20 foot candles light are provided at desk level and
in the grooming area. (Applicable to facilities
constructed 1980.
Lighting is centrally controlled or occupant
controlled in cells or rooms.
Night lighting provides good vision for supervision.
to construcled
CA Safe Drinking Waaer Act
Potable water is supplied from an approved source
rn satr with this Act.
Article 15. F Sanitation and Sa
and
ADULT TYPES ENVIRONMENT: 201 5 ENV HEALTH PAGE 5 TYPE I, Il, Ill & Iv - CSA FORM 358 (Rev 10i08)
Local Ordinances
Solid, toxic and infectious wastes are disposed of in
accordance with state and local laws and
HSC $ 1803
The facility is free of vermin (or vermin signs), and
General Industry Safety Order, Title 8-3362
The facility is free of structural and other safetv
Summary of environmental health evaluation:
FACILITY IS IN EXCELLENT CONDITION, AND MEETS ALL CONDITIONS OF HSC FOR ENVIRONMENTAL
HEALTH STANDARDS.
NO FOOD IS PREPARED ON-SITE, YET READY TO EAT MEALS MAY BE SERVED PRIOR TO
TRANSPORTATION TO ANOTHER TYPE I HOLDING FACILITY.
ADULT TYPES ENVIRONMENT; 20I5 ENV HEALTH PACE 6 TYPE I. Il,l & N - CSA FORM 358 (Rev l0/0t)
II. NUTRITIONAL Hf,ALTH EVALUATION
Adult Type I, II, III and fV Facilities
Article I2. Food
Do not identi$
compliance with this
regulation here.
See comments.
1230 Food Handlers
(Note: Title 15, $ 1230 is in Article I I , MMH, but
inspected under Erwironmental Health due to
CalCode reference.)
Policy and procedures have been developred and
implemented for medical screening of (inmate) food
handlers in the
There are procedures for education, supervision and
cleanliness of food handlen in accordance with HSC
11396'7,t13952 -t t3961.fi39',13. 11397'7 ..
1240 Frequency of Serving
Food js served three times in any 24-hour
At least one meal includes hot food.
If more than 14 hours passes between these meals,
food is served-
Supplemental food is served in less than the l4-hour
period for inmates on medical diets, ifprescribed by
A minimum of fifteen minutes is allowed for the
actual consumption ofeach meal except for those
imates on therapeutic diets where the responsible
additional time.
Inmates who miss or may miss a regularly scheduled
facility meal, are provided with a beverage and a
sandwich or a substitute meal.
Inmates on therapeutic diets who miss a rcgularly
scheduled meal, are provided with their prescribed
meal.
l24l Minimum Diet
(See regulation and guidelines for equivalencies and
s erving r equ i r eme nts.)
The minimum diet in every 24-hour period consists
of the ful number of sewings specified tom each of
the food groups below. Facilities electing to provide
vegetarian diets for any reason also conform to the
Protein Grouo. The daily requirement is equal to
tbree servings, each containing at least l4 grams of
There is an additional, fourth serving of legumes
three days Der week.
Dailv Grouo. The daily requirement for milk or milk
equivalents is three servings, each ofwhich is
equivalent to 8 oz. offluid mitk and providing at least
250 mg. of calcium. The requirement for persons
who are I 5- I 7 years of age and for pregnalt and
lactatins women is four servinss.
A serving is equivalent to 8 fluid ounces of milk
and at least 250 mq. ofcalcium.
All milk is fortified with Vitamin A and D.
The Environmental Health lnspector retains
primary responsibility to determine compliance
with Section 1230. Compliance should be assessed
in consultation with the Nutrition Inspector so that
the findings on the Enyironmental Health
Evaluation reflect the observations, expertise and
consensus ofboth parties. The text ofthe
regulation is provided here for reference only.
ADULT TYPES NUTRITION, 20I5 NUI'RITION P-AGE I TYPE l,ll,lll & IV CSA FORM 358 (Rev l0/0t)
Vegetable-Fruit Group. The daily requirement is at
least five servings. At least one serving is from each
ofthe
One ofa fresh fruit or
One serving ofa Vitamin C source containing 30
or more.
One serving of a Vitamin A souce containing
200 micrograms Retinol Equivalents (RE) or
more.
Grain Group. The daily requirement is at least six
servings. At least th-ree servings fiom this group are
made with some whole
Additional servings from the dairy, vegetable-liuit,
and grain groups are provided in amounts to assure
caloric supply is at the required levels. (See RDA for
r eco mmende d calo r i c inl a kes.
Fat is added only in minimum amounts necessary to
make the diet palatable. Total dietary fat does not
exceed 30 of total calories on a basis.
1242 Menus (Applicable in Type II and III facilities
qnd in those Type Iy facilities wherefood is served.)
Menus are planned at least one month in advance of
their use. Menus are planned to provide a variety of
meals.
A registered dietitian approves menus before they are
used.
If any meal served varies Aom the planned menq the
change is noted in writing on the menu a[d,/or
A registered dietitian evaluates menus, as planned
and includine changes, at least
1243 Food Service Plan
There is a food services plan that complies with
applicable Califomia Retail Food Code ( CalCode).
Facilities with an average daily population of 100 or
more have a t-ained and experienced food service
manager to prepare and implement a food services
that includes :
Food
Food
Orientation arld
Personnel
and food cost
Documentation and record
Maintenance and
In facilities of less than 100 average daily population
that do not employ or have access to a food services
manager, the facility administrator has prepared a
food services plan that addresses the applicable
elements listed above.
COMMENTS
ADULT TYPES NUTRTTION: 2015 NUTRITION PAGE 2 TYPE I. II. III & N CSA FORM 358 (Rev 10/08)
1245 Kitchen Facilities, Sanitation and Food
Service
Kitchen facilities, sanitrtion, and food preparation,
service and storage comply with standards set forth in
CalCode.
In facilities where bmates prepare meals for self-
consumption, or where frozen meals or prepared food
from other facilities permitted puBuant to HSC g
114381 is (re)heated and served, the following
CalCodestandards may be waived by the local health
officer (Nole: while the regulation uses the word
"wqived," the intent is thqt lhe inspector exercises
professional latitude to approye qlternatiye methods
that that provide for food safety and sanitqtion in
lhese situqtiorls.
HSC S 114130-l 1414l,l14163, New or
HSC $ I 14099.6, I14107 ifa domestic or
commercial dishwasher, capable of providing
heat to the surface ofutensils ofat leasr 180
degrees Fakenheit, is used to clean and sanitize
multi-service utensils and multi-service
consurner
HSC Sl t4149-l14149.3 , provided there is
mechanical ventilation sumcient to remove
gases, odors, steam, heat, gease, vapors and
smoke from the
HSC S I14268-114269 Floors
HSC $ I14185- I l4l E5.5 Storage area for
and
1246 Food Serving and Supervisior
Policies and procedures ensure that work assigrunents
are appropriate and food handlers are adequately
supervised. Food is prepared and served only under
the immediate supervision of a staffmember.
1247 Disciplinary Isolation Diet
No inmate receiving a prescribed medical diet is
placed on a disciplinary isolation diet without review
by the responsible physician or pursuant to a plan
The disciplinary isolation diet is an exception to the
three-meal-a-day standard and is served twice in each
24-hour period.
Each serving consiss of one-half of the loaf(or a
minimum of 19 ounces cooked loaf) described in the
regulation or, if approved by the Conections
Standards Authority, another equally nut-itious diet.
Additionally the inmate receives two slices of whole
wheat bread and at least one quart ofdrinking water,
if the cell does not have a water
COMMENTS
The Environmental Health Inspector retains
primary responsibility to determine compliance
with Section 1245. Compliance should be assessed
in consultation with the Nutrition Inspector so that
the findings on the Enviromental Health
Eyaluation reflect the observations, expertise ard
consensus of both parties. The text of the
regulation is provided here for reference only.
The Environmental Health lnspector retains
primary responsibility to determine compliance
with Section 1230. Compliance should be assessed
in consultation with the Nutrition Inspector so that
the findings on the Environmental Health
Evaluation reflect the observations, expertise and
consensus ofboth parties. The text ofthe
here for reference only.
Inmates with special diet needs are transferred out.
Do not identit/
compliance with this
regulation here.
See comments.
Do not identiry
compliance with this
regulation here.
See comments.
ADULT TYPES NUTRITION. 20 I5 NUTRITION PACE 3 TYPE I, Il. lll & IV CSA FORM 35E (Rev t0/08)
COMMENTS
1248 Medical Diets
Policies identi! who is authorized to prescribe
medical diets.
Therapeutic diets utilized by a facility are ptanned,
prepared and served with consultation from a
dietitian.
The facility manager complies with providing any
medical diet for an inmate.
There is a medical diet manual that includes sample
menus. It is available to in-facility medical personnel
and food service staff for reference and information.
A registered dietitian reviews, and the responsible
physician approves, the diet manual on an annual
basis.
Summary of nutritional evaluation:
FACILITY IS IN FULL COMPLI,ANCE OF NUTRITIONAL EVALUATION. MINIMUM STANDARDS }IAVE BEEN
MET, AND ANY INMATE REQUIRING SPECI-AL ATTENTION IS TRANSFERRED OUT IMMEDIATELY.
SINCE INMATES ARE NOT HOUSED IN THE CITY OF VERNON FACILITY, NO REGULARLY SCHEDULED
MEALS ARE PROVIDED. INMATES ARE PROCESSED AND RELEASED/TRANSFERRED AS SOON AS
POSSIBLE. SHOULD AN INMATE REQUEST A MEAL WHILE WAITING TO BE TRANSFERRED, TTIE JAILER
WILL SEND FOR A READY TO EAT MEAL TO BE PICKED UP AT A NEARBY LICENSED RESTAURANT.
ADULT TYPES NUTRITION: 2015 NUTRITION PACE 4 TYPE I. ll. Ill & Iv CSA FORM 358 (Rev 10/08)
III. MEDICAL/MENTAL HEALTII EVALUATION
Adult Type I, [, III and fV Facilities
Article 11. Health Services
1200 Responsibility For Health Care Services
The facility administrator has deyeloped a plan to
ensure provision of emergency and basic health care
services to all inmates.
Clinical judgments are the sole province ofthe
responsible physician, dentist, and psychiatrist or
Security regulations are applicable to faciliry staff
and health care
At least one physician is available.
In T)?e IV facilities where routine health services are
provided by access to the community, there is a
written plan for the treatment, transfer, or referral of
emergencies. (When Type IVfacilities proyide heqllh
services within thefqcility, they must meet applicoble
qs do other
1202 Health Service Audits (lpplicable to focilities
with on-site heolth care slaf)
There is a written plan for annual statistical
summaries ofhealth care and pharmaceutical services
that are
There is a mechanism to assure that the quality and
adequacy ofhealth care sewices are assessed
There is a process for correcting identified
deficiencies in the health care and pharmaceutical
services delivered.
Based on information from these audits, the health
authority provides the facility administrator with an
annual written report on health care and
services delivered.
1203 Health Care StaIT Qualifications (Applicable
tofacilities with on-site heahh care staf)
There are policies and procedures to assure that state
Iicensing, cenification, or regisration requirements
and restrictions that apply in the community, also
to health care in the
Health care staff credentials are on file at the facitity
or another cent'al location where they are available
for review.
1204 Health Care Procedures (Applicable to
facilities with on-site health care stafl)
Medical care performed by personnel other than a
physician, is performed punuant to written protocol
or order ofthe
NO ON.SITE HEALTH CARE STAFF IS
PROVIDED-
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON.SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
TYPE I FACILITY,
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON.SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON.SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
ADULT TYPES MED.MH MEDICAL/MH PAGE 1 TYPE I, IL nl & MSA FORM 358 (Rev l0/06)
ARTICLE/SECTION
1205 Health Care Records (Applicable tofacilities
with on-site health care stafi)
Individual, complete and dated health records are
maintained and but are not limited to:
(l) Receiving screenngfonr/history (Note: The
intqke receiving screeningJorm may also be
included in the custodyfile. See Guidelines for
discussion.
(2) MedicaUmental health evaluation reporfs;
(3) Complaints of illness or injury;
(4) Names of personnel who treat prescribe,
and./or administer/deliver prescription
Location where treatment is
(6) Medication records in conformance with
Title 15 I 1216.
Physician-patient confidentiality privilege is applied
to the record; the health authority controls access;
health record files are maintained separately from
other inmate jail records.
The responsible physician or designee communicates
information obtained in the course of medical-mental
health screening and care tojail authorities when
necessary for the protection ofthe welfare ofthe
inmate or others, management of the jail, or
maintenance of and order.
The inmate's written authorization is necessary for
tralsfer ofhealth record information unless otherwise
law or
Irunates are not used for medical record
1206 Health Care Procedures Manual (Applicable
tolqcilities with on-site health care stof)
There is a health services manual, with policies and
procedures that conform to applicable state and
federal law. The manual is reviewed and updated at
least a rually.
The health care manual but is not limited to:
Summoning and application ofproper medical
Contact and consultation with
Emergency and non-emergency medical and
deotal
Provision for medically required denal and
medical prostheses and
Notification of next of kin or legal guardian in
case ofserious illness which may result in
Provision for screening and care of pregnant and
lactating women, including postpartum care, and
other services mandated
Screening, referral and care of mentally
disordered and developmentalty disabled
COM MENTS
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON.SITE HEALTH CARE STAFF IS
ED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
No trealment or administration of prescription
medication is conducted on-site.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
No females are housed at this facility.
NO ON.SITE HEALTH CARE STAFF IS
PROVIDED.
ADULT TYPES MED-MH MEDICAI/MH PAGE 2 TYPE l. Il, lll & Iv CSA FORM 358 (Rev 10/06)
ARTICLE/SECTION
Implementation of special medical programs;
Management of inmates suspected ofor
confirmed to haYe communicable
The procurement, storage, repackaging, labeling,
dispensing, adminisfation-delivery to i nates,
and
Use ofnon-physician personnel in providing
medical
Provision of medical diets;
Patient and its
Transfer of pertinent individualized health care
information (or documentation that no health
care information is available), to the health
authority of another correctional system, medical
facility or mental health facility at the time each
inmate is transferred and prior to notification to
HSC Sections l2l36l and t21362 for inmates
with known or suspected active tuberculosis
Procedues for notirying facility health care
slaffof a pending transfer allow sufllcient
time to the
The summary information identifies the
sending facility, is in a consistent format that
includes the need for follow-up care,
diagnostic tests performed, medications
prescribed, pending appointrnents,
significant health problems and other
information that is necessary to provide for
ofhealth care.
Necessary inmate medication and health
care information are provided to the
transporting staff, together with precautions
necessary to protect staff and inmafe
passengers from disease transmission during
Forensic medical services, including drawing of
blood alcohol samples, body cavity searches, and
other functions for the purpose ofprosecution
are not be performed by medical personnel
responsible for proyiding ongoing health care to
the iffnates.
1206.5 Management of Communicable Diseases
There is a written plan that addresses the
identification, Eeatrnent, control and follow-up
management ofcommunicable diseases. The plan
reflects the cufient local incidence of communicable
diseases which threaten the health of inmates and
staff and includes:
Intake health
ldentifi cation of relevant
Referral for medical
Treatrnent responsibilities during incarceration;
NO ON.SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
NO ON-SITE HEALTH CARE STAFF IS
PROVIDED.
ADULT TYPES MED-MH MEDICAUMH PAGE 3 TYPE I, I[ III & IV CSA FORM ]58 (Rev 10/06)
ARTICLE/SECTION
Coordination with public and private
community-based resources for follow-up
treatment.
Consistent with the plan, there are policies and
procedures that conform with applicable state and
federal law, which include but are not limited to:
The R?es ofcommunicable diseases to be
The persons who must receive the medical
Sharing ofmedical information with inmates and
Medical procedures required to identiry the
presence ofdisease(s) and lessen the risk of
Medical
Housing considerations based upon behavior,
medical needs, and safety ofthe affected
Provision for inmates consent that address the
limits of
Reporting and appropriate action upon the
possible exposure ofcustody staffto a
communicable disease.
1207 Medical Receivitrg Screening
A receiving screening is performed on all inmates at
the time of intake.
This screening is completed in accordance with
procedures established by the responsibte physician
with the administmtor.
The screening includes, but is not limited to, medical,
mental healt[ developmental disabilities, and
communicable diseases, including, TB and other
airbome diseases.
The screening is performed by licensed health care
staff or bv trained staff
There is a written plan for compliance with PC$
2656, which allows prisoners to keep prescribed
orthopedic or prosthetic appliances unless an
immediate risk to has been determined.
There is a written plan to provide medical care for
any inmate who appears in the need of or requests
medical, mental health or developmental disability
treatrnent,
1207.5 Special Mental Disorder Assessment
(Not applicable Type I & IV. TWe I facilities qre
expected to transfer these women to an qppropriate
facility yrhere the dssessment can occltr.)
There are written procedures for the mental health
screening of women who have given birth within the
past year and are charged with murder or attempted
murder oftheir infant Screening occurs at intake
and, ifpostpanum psychosis is indicated, a referral
for f,rther evaluation is made.
COMMENTS
TYPE I FACILITY
ADULT TYPES MED.MH MEDICAUMH PACE 4 TYPE I. II. III & MSA FORM 358 (Rev l0/06)
ARTICLE/SECTION
1208 Access to Treatment
A written plan has been developed and implemented
for identiffing assessing, treating and.ior referring
any iDmate who appears to be in need of medical,
mental health or developmental disability treatrnent at
time incarceration.
Health care personnel perform the evaluation.
1209 Transfer to a Treatment Facility
Q'Iot applicable Type I and IV.)
There are policies aad procedures to provide mental
health services that include but are not limited to:
for mental health
Crisis intervention and management of acute
Stabilization and treatment of mental disorders;
Medication sewlces.
Provision is made to evaluate or transfer mentally
disordered inmates to a Lanterman Pefis Short
Eeatment facility for further evaluation as provided in
PC $ 401 1.6 or 401 l 8, unless the jail contains a
treatment
1210 Individualized Treetment Plans
Treatment staff develops a written individualized
plan for each inmate heated by the medical and./or
mental health staff.
Custody staff is informed ofthe treatment plan when
necessary to ensue coordination and cooperation in
care ofthe inmate.
Where recommended by treatment staff, the plan
includes referal to teatrnent after release from the
1211 Sick Call
There are policies and procedures for daily sick call
for all inmates.
Any inmate requesting health care is provided that
attention.
1212 Vermin Control
There is a written plan for the control and treatment
of vermin infested irunates, including medical
pro0ocols, for treating persons suspected of being
infested or having contact with vermin-infested
inmates.
I213 D€toxilication Treatment
(Not applicable Type IV.)
Medical policies on detoxification which a statement
as to whether detoxification will be provided within
the facility or require transfer to a licensed medical
faciliry, and. procedures and symptoms necessitating
immediate transfer to a hospital or other medical
COMMENTS
Trained Jail personnel screen the inmate and request
Health care inion if
Inmates with special needs are transferred out.
Inmates with special needs are tmnsferred out.
lnmates with special needs are transferred out.
ADULT TYPES MED.MH MEDICAT-/MH PACE 5 TYPE I, II, III & lV CSA FORM 158 (R€v 10/06)
When rnedically licensed personnel are not in
attendance, inmates undergoing withdrawal reactions,
judged or defined as not readily controllable with
available medical treatment, are transferred to an
medical
l2l4 Informed Cotrsent
There is a written plan to assure informed consent of
inmates in a understood bv the inmate-
Except in emergencies, as defined in Business and
Professional Code $ 239'7 arLd Title l5 $ 1217, all
examination, treatments and procedures affected by
informed consent standards in the community are
likewise observed for inmate care.
For minors and conservatees, the informed consent of
parent, guardian, or legal custodian applies when the
law requires it. Absent informed consent in non-
emergency situations, a court order is required before
treatment is done.
Any inmate who has not been adjudicated to be
refuse health care.
l2I5 Dental Care
Emergency and medically required dental care is
1216 Pharmaceutical Management
Pharmaceutical policies, procedures, space and
accessones but are not limited to:
Securely lockable cabinets, closets and
units;
A means for the positive identification ofthe
of the
Administratior/detivery of medicines to minors
AS
Confirmation that the recipient has ingested the
medication or accounting for medication under
self-administration procedwes outlined in Title
15. s l2l
Documenting that prescribed medications have
or have not been administered, by whom, and if
for what
Limitation to the length of time medication may
be administered without further medical
Limitation to the length of time allowable for a
ou verbal
Al armual written report is prepared by a
pharmacist on the status ofpharmacy services.
and provided to the health authority and facility
administrator.
There are written protocols that are consistent with
pharmacy laws and regulations, and limit the
following functions to being performed by the
identified
Procurement is done only by a physician, dentist,
or other
COMMENTS
No minors or consevatees are housed at this facitity.
lnmates with special needs are transferred out.
Inmates with special needs are transfened out.
ADULT TYPES MED-MH
authorized by larv
MEDICAUMH PAGE 6 TYPE I. Il. III & IV CSA FORM 158 (Rev. 10/06)
ARTICLE/SECTION
Medication storage assures that stock supplies of
legend medications are accessed only by licensed
health care personnel. Supplies of legend
medications that have been properly dispensed
and supplies of over-the-counter medications
may be accessed by both licensed and non-
licensed staff.
Repackaging is done only by a physician, denrist,
or other authorized bv law.
Labels are prepared by either licensed or non-
licensed personnel, provided the label is checked
and amxed to the container by the physician.
dentist, or pharmacist before administration or
deliyery to the inmate. Labels are prepared in
accordance widr Business and Professions Code
4076.
Dispensing is only done by a physician, dentist,
authorized bv law.or
COMMENTS
Inmates with special needs are transfened out.
l nates with special needs are transfened out.
Administration ofmedication is only done by
authorized and licensed health care personnel
on the order ofa
Licensed and non-licensed personnel may deliver
medication actins on the order ofa
Disposal oflegend medication is done
accordance with pharmacy laws and regulations
and requires aly combination of two ofthe
following classifi cations: physician, dentist,
pharmacisq or reregistered nurse. Controlled
substances are disposed of in accordance with
Drug Enforcement Administration disposal
There are written procedures for managing and
providing over-the-counter medications, which
include but are not limited to how they are made
available, documentation when delivered by staffand
Policy and procedures may allow inmate self-
administation of prescribed medication under limited
circumstances fsee /egulation text). lf self-
administration ofprescription drugs is not allowed,
this subsection is "not applicable." When allowed,
policies and procedures must include but are not
limited to:
Medications permited for self-administration are
limited to those with no recognized abuse
potential. Medication for treating tuberculosis,
psychotropic medication, controlled substances,
injectables and any medications for which
documentation ofingestion is essential, are
excluded from self-administration.
Inmates with histories offrequent rule violations
of any type, or those who are found to be in
violation of rules regarding self-administration,
Prescribing health care staffmust document that
each inmate participating in self-administration
is capable ofunderstanding and following the
rules ofthe program and instructions for
medication use.
ADULT TYPES MED-MH MEDICAUMH PACE 7 TYPE I, I[ lll & Iv CSA FORM 358 (Rev 10/06)
ARTICLE/SECTION
Provisions are made for the secure storage ofthe
prescribed medication when it is not on the
inmate's
Provisions are made for consistent enforcement
ofself-medication rules by both custody and
health care stafi with systems ofcommunication
among them when either one finds that an inmate
is in violation of rules
Health care staff performs documented
assessments of inmate compliance with self-
adm in istration medication regimens.
Compliance evaluations are done with sufficient
frequency to guard against hoarding medication
and deterioration ofthe inmate's health.
1217 Psychotropic Medications
(Not applicable Type IV.)
There are policies and procedures goveming the use
medications.
Involuntary administration of psychoEopic
medication is limited to emergenctes. (See Business
and Professional Code $ 2397 and the text of Title 15
Ifpsychotropic medication is administered in an
emergency, such medication is only that which is
reouired to teat the emersencv condition.
Medication is prescribed by a physician in written
form in the inmate's record or by verbal order in a
dosage appropriate to the inmate's need. Verbal
orders are entered in the inmate's record and signed
within 72 hours.
There is a protocol for supervising and monitoring
i nates who are involuntarily receiving psychotropic
medication.
Psychotropic medication is not administered to ar
irunate absent an emergency unless: (1) the inmate
has given his or her informed consent in accordance
with WIC $ 5326.2; or, (2) has been found to lack the
capacity to give consent pursuant to the county's
hearing procedures under the Lanterman-Petris-Short
(LPS) Act for handling capacity determinations and
subsequent reviews. (Note: Inspectors need to be
aware of differing consed requiremenls for jweniles
held in adult
Policies limit the length of time both voluntary and
involuntary psychotropic medications may b€
administered.
There is a plan for monitoring and re-evaluating all
inmates receiving psychotropic medications,
a reyiew ofall situations.
The adminish-ation ofpsychotopic medication is not
allowed for disciplinary reasons.
1219 Suicide Prevention Program
There is a written suicide prevention plan designed to
identiff, monitor and provide treatment for those
inmates who a suicide risk.
the
COMMENTS
Inmates with special needs are transferred out.
Inmates with special needs are transferred out.
lnmates with special needs are transferred out.
lnmates with special needs are transferred out.
Inmates with special needs are transfe[ed out.
Inmates with special needs are transfered out.
Inmates with special needs are transfeEed out.
Inmat€s with special needs are transfered out.
lnmates with special needs are tmnsferred out.
ADI]I,T TYPES MED-MH MEDICAUMH PAGE t TYPE I- ll. III & Iv CSA FORM 358 (Rev 10/06)
1220 Fint Aid Kits
One or more first aid kits are available in the
The responsible physician has approved the contents,
number, location and procedure for periodic
ofrhe kit(s
1046 Death ir Custody
Written policy and procedures assure that there is a
review ofeach in-custody death. The review team
includes the facility administrator and-/or manager;
the health administrator; the responsible physician;
and other health care and supervision staffwho are
releYant to the incident.
When a qi491dies in a facility, the adminisrator of
the facility provides the Corrections Standards
Authority with a copy ofthe death in custody report
that is submitted to the Attomey General under
Government Code Section 12525, within l0 days of
the death.
1051 Communicable Diseases
Upon identification, all inmates with suspected
cornmunicable diseases are segregated until a medical
evaluation can be
In absence of medically trained personnel at the time
of intake into the facility, an inquiry is made to
determine if the inmate has or has had any
communicable diseases, or has observable symptoms
of communicable diseases, including but not limited
to hrberculosis or other airborne diseases, or other
special medical problems identified by the heatth
The iffnate's response is noted on the booking form
and/or screenins deYice.
1052 Metrtauy Disordered Inmates
There are policies and procedues to identiry and
evaluate all mentally disordered inmates, with
segregation provide4 if necessary to protect the
ofthe inrnate of others.
A physician's opinion is secured within 24 hours of
identification or at the next daily sick call, whichever
is earliest.
1055 Use of Safety Cell
A safety cell, specified in Title 24, Section 2-
470A.2.5, is used only to hold inmates who display
behavior that results in the destsuction ofproperty or
reveals an intent to cause physical harm to selfor
others.
There are policies and procedues, written by the
facility administrator in cooperation with the
cell use.
Safety cells are not used for punishment or as a
substitute for treatment.
COMMENTS
Minors are not housed at this faciliry.
ADTJLT TYPES MED.MH MEDICAI,|}.,IH PAGF 9 TYPE I- II- lll & IV CSA FORM 358 (Rev 10/06)
Placement requires the approval ofthe facility
manager or watch commander, or a physician
There are procedures that assure necessary nutrition
and fluids are administered.
Continued retention of the inmate is reviewed a
minimum ofeverv eight hours.
Inmates are allowed to retain sumcient clothing, or
are provided with a "safery garment" to provide for
personal privacy unless risks to the inmate's safety or
are documented.
Direct visual observation is conducted at least twice
30 minutes and is documented.
Continued retention of inmate is reviewed a minimum
ofevery eight hours.
A medical assessment is secured within 12 hours of
placement in this cell or at the next daily sick call,
whichever is earliest, and medical clearance for
continued retention is secured every 24 houn
thereafter.
A mental health opinion on placement and retention
is secured within 24 hours of
1056 Use of Sobering Cell
Pursuant to policies artd procedures, a sobering cell,
spe€ified in Title 24, Part2 S 470A.2.4, is used only
for housing inmates who are a theat to their own
safety or the safety ofothers due to their state of
intoxication. Policies and procedures for managing
the sobering cell, include handling both males and
females.
Intermittent direct visual observation of inmates in
cells conducted no less than halfhour.
An evaluation by a medical staffperson or by custody
staff, pusuant to written medical procedures in
accordance with Section l2l3 ofthese regulations,
occurs whenever any inmate is retained in a sobering
cell for more than six hours.
Such inmates are removed from the sobering cell
when thev are able to continue with
1057 Developmentally Disabled Inmates
There are procedures to identiry and evaluate all
developmentally disabled inmates. (7fote;
Appropriate housing is based on T-15 S 1050,
A contact to the regional center occun within 24
hours when an inmate is suspected or confirmed to be
developmentally disabled. (Applicable only in
inmqtes in excess of24 hours.
the
COMMENTS
ADULT TYPES MED.MH MEDICAUMH PAGE IO TYPE I. II. III&IVCSAFORM358(Rcv l0/06)
ARTICLE/SECTION
1058 Use of Restraint Devices
(Note: The regulation distinguishes "use offorce"
lrom use ofrestraints. The provisions of this
regulqtion do not apply to the use of handculls,
shacHes or other restrqint devices when used to
restroin minors for ma)ement or trawportqtion.
Health inspectors should fomiliorize themselves with
this discussion in the Medical-Mental Health
Cuidelines and contact their CSA Field
Representotive if there are queslions regqrding
applicobility to a particalar facility.)
Res0"ints are used only to hold inmates who display
behavior that results in the desauction ofproperty or
reveals an intent to cause physical harm to self or
others.
Restraints are not used as a discipline or as a
substitute for treatment.
There are polices and procedures for the use of
restrainr devices including acceptable restraint
devices; signs or symptoms which should result in
immediate medicaUmental health referral; availability
ofCPR equipment; protective housing of restrained
persons; provisions for hydration and sanitation
: and
lnmates are placed in restraints only with approval of
the facility manager, watch commander, or if
All inmates in restraints are housed alone or in a
area for restrained inmates.
Direct visual observation is conducted and logged at
least hYice 30 minutes.
Continued retention in such restraints is reviewed
hours.
A medical opinion on placement and retention is
secured as soon as possible but no later than &uI
hours from the time of
Medical review for continued retention in restraint
deyices occurs at a minimum ofevery six hours.
A mental health consultation is secured as soon as
possible, but no later than glghl! hours from the time
ofplacement.
1I2I TIEALTH EDUCATION FOR MINORS
IN JAILS
Written policy and procedures assure that age- and
sex-appropriate healtl education and disease
are offered to minors.
The health education programs are updated as
necessary to reflect current health priorities and meet
the needs ofthe confined population.
COMMENTS
This section only applies to T)?e II facilities that
held adjudicated minors during the l2 months prior
to the date ofthis inspection.
TYPE I FACILITY CNO MINORS)
ADULT TYPES MED-MH MEDICAI/MH PAGE I I TYPE l, II, III & N CSA FORM 358 (Rev 10/06)
ARTICLE/SECTION
II22 REPRODUCTIVEINFORMATION
AND SERVICES FOR MINORS IN
JAILS
Written policy and procedures assure that
reproductive health services are ayailable to both
male and female minors.
Reproductive services shall include but not be limited
to those prescribed in WIC $ 220, 221 and 222, urd
HSC $ r234s0.
1123 HEALTHAPPRAISALSMEDICAL
EXAMINATIONS FOR MINORS IN
JAILS
For minors who are transfened to jails, policy and
procedures assure that the health appraisal/medical
examination:
is received from the
is reviewed by designated health care staffat the
absent a previous appraisayexamination or
receipt ofthe record, a health appraisaUmedical
examination, as outlined in Minimum Standards
for Juvenile Facilities, Section I432, is
completed on the minor within 96 houn of
admission.
II24 PROSTHESES AND ORTHOPEDIC
DEVTCES
There are written policy and procedues regarding the
provision, retention and removal of medical and
dental prostheses, including eyeglasses and hearing
aids.
Prostheses are provided when the health ofthe minor
would otherwise be advemely affecte4 as determined
Procedures for the retention and removal of
prostheses shall comply with the requirements of
Penal Code $ 2656.
II25 PSYCHOTROPICMEDICATIONS
The impact for Type II facilities is thqt, in qddition to
being in compliance with Title 15, Section I2I4
(Co$ent) and Section I2 l7 (Prychotropic
Medications). The following additional policies ond
procedures must be implementedfor juveniles held in
anstody:
(a; 4) provision that minors who are on
psychotropic medications prescribed in the
community are continued on their medications
pending re-eyaluation and further determination by a
COMMENTS
This section only applies to Type lI facilities that
held adjudicated minors during the 12 months prior
to the date of this inspection.
TYPE I FACILITY (NO MINORS)
This section only applies to Type II facilities that
held adjudicated minors during the l2 months prior
to the date ofthis inspection.
TYPE I FACILITY (NO MINORS)
This section only applies to T)?e II facilities that
held adjudicated minors during the l2 months prior
to the date ofthis inspection.
TYPE I FACILITY (NO MINORS)
TYPE I FACILITY (NO MINORS)
TYPE I FACILITY (NO MINORS)
This section only applies to T)?e II facilities that
held adjudicated minors during the 12 months prior
to the date ofthis inspection.
TYPE I FACILITY (NO MINORS)
ADULT TYPES MED-MH MEDICT/MH PAGE 12 TYPE I. II, Ill & MSA FORM 358 (Rev 10/06)
ARTI
(a; 5) provision that the necessity for continuation
on psychoEopic medications is addressed in pre-
release plarming and prior to transfer to another
(b; l) minors are informed ofthe expected
b€nefits, potential side effects and altematives to
psychotropic medications.
Other Codes
Title 24 Part 2 S 470.2.12 - Medical Exam Room
Availability
In facilities constructed after 2-l-99, a medical
examination room is available in eyery facility that
provides on-site health care. Prior to 2-l-99, every
Type II and lll facility designed to house 25 or more
inmates must have a medical exam room. The
examination room must:
Be located within the security area and provide
for inmate pri
Have at least 100 square feet of floor space with
dimension less than 7
Provide hot and coldrumingwater (Note: For
fdcilities constructed o/ter 2-l-99, any rooms
where medical procedures arc provided musl be
equipped with hot qnd cold running waler, even
though lhis qreq mq) not technically be on
"examinqtion room
Have lockable storage for medical supplies
(Applicable to facilities constructed afer 2-l-
99
Title 24 Part 2, S 470A.2.13 - Pharmaceutical
Storage Space
There is lockable storage space for medical supplies
and pharmaceutical preparation as referenced in Title
ls.6 1216.
Title 24 Part 2 $ 470A.2.14 - Medical Care
HousiIlg
There is a means to provide medical care and housing
to ill and/or infirm inmates. Ifthis housing is located
in the iail. it must:
Provide lockable storage space for medical
Be located within the security area ofthe facility,
accessible to both female and male inmates, but
not in the are ofeither.
Ifnegative pressure isolation rooms are being
planned, they are designed to the community
standrd (Applicable to facili ties constructed
2-t-99
COMMENTS
TYPE I FACILITY (NO MINORS)
TYPE I FACILITY (NO MINORS)
constructed prior to 2-l-99. (TYPE I FACILITY)
Inmates requiring medical care and housing are
tra$ferred out.
ADULT TYPES MED-MH MEDICAL/MH PAGE I3 TYPE l, II, III & IV CSA FORM lst (Rev 10/06)
ARTI
Title 24 Part 2 S 470.2.25- Confidential Interview
Rooms
In facilities constructed after 2-t-99, there must be a
minimum of one suitably fumished interview room
for confidential interviews in every facility that
provides on-site health care. For facilities
constructed prior to 2-l-99, every Type II and III
facility designed lo house 25 or more inmates musr
have a confidential interview room. The interview
room must:
Be located within the s€cudty area accessible to
both female and male i
Provide no less than 70 square feet offloor space
with no dimension less than 6 feet.
HSC 11222 and 11877 Addicted Arreste€ Care
Where there is reasonable cause to belieye an arrestee
is addicted to a controlled substance, there is
for rnedical aid to relieve
In accordance with statute, persons on methadone
maintenance are allowed to continue until conviction,
at the direction of the licensed methadone program
director.
PC ,1023.6 Female Inmates' Physician
Reasonable procedures a.re established to allow a
female prisoner to summon and receive the services
ofchoice to determine
Procedures allow female inmates to receive needed
medical services.
These procedures are posted in at least one
conspicuous place in which all female inmates have
acc€ss.
PC 4023.5 Female Inmate - Personal Care
At their request, female inmates are allowed to
continue use ofmaterials for;
Personal menstrual
Birth control measures as prescribed by their
The county fumishes females who are confined in the
facility with information and education regarding the
itv of servlces.
Family planning services are offered to each female
inmate at least 60 days prior to a scheduled release
date and seryic€s ofa licensed physician are available
to meet her family plaming needs at the time of
release-
PC 4028 AbortionsPreglant inmates, ifetigible, are
permitted to obtain an abortion pursuant to law. Such
rights are posted in at least one conspicuous place
accessed by all female inmates.
Summary of medical/mental health evaluation:
ON COMMENTS
No female inmates housed at this facilitv.
No female inmates housed at this facility.
No female inmates housed at this facility.
No female inmates housed at this facility.
No female inmates housed at this facility.
No female inmates housed at this facility.
No female inmates housed at this facility.
Be
ADULT TYPES MED-MH MEDICAI]MH PAGE I4 TYPE I, Il- lll & Iv CSA FORM 358 (Rev 10/06)
FACILITY IS IN FULL COMPLIANCE WITH MEDICALA,IENTAL HEALTH EVALUATION. FEMALES
AND/OR INMATES REQUIRING SPECIAL CARE ARE IMMEDIATELY TRANSFERRED OUT. THE
USE OF THE SAIETY CELL HAS BEEN DISCONTINUED, AND NEW PROCEDURES FOR HANDLING
INMATES HAVE BEEN ADOPTED AND AMENDED TO THE JAIL MANUAL.
THE CITY OF VERNON JAIL FACILITY WAS CONVERTED FROM A TYPE I JAIL FACILITY TO A
TEMPORARY HOLDING FACILITY IN MID-2012. AT THAT TIME, WE CONTRACTED WITH THE
HUNTINGTON PARK POLICE DEPARTMENT TO PROCESS AND HOUSE OUR ARRESTEES. HPPD IS
A TYPE I JAIL FACILITY.
IN 2015, THE CITY OF VERNON JAIL FACILITY WAS CONVERTED BACK TO A TYPE I JAIL
FACILITY AND IS CURRENTLY BEING USED ONLY TO BOOK AND PROCESS INMATES. THEY
ARE THEN RELEASED OR SENT TO OTHER FACILITIES FOR HOLDING. INMATES ARE SELDOM
HELD MORE TI{AN A FEW HOURS IN VERNON (I\,IAXMUM HOLDING IS 72 HOURS).
ADULT IYPES MED-MH MEDICAUMH PAGE I5 TYPE l, II, III & IV CSA FORM 156 (Rev 10/06)
ENVIRONMENTAL HEALTH INSPECTION CHECKLIST ATTACHMENT
Reference: California Retail Food Code; Health and Safety Code (HSC) Division 104, Part 7, Chapter l-13
Use of this checklist is optional; however, inspectors may find it useful when determining responses to the Environmental Health
Evaluation. Facility maaagers may use the checklist and corresponding explanations ofkey Calcode requirements as a self-audit.
Foodborne lllness - Criticol Risk Fsclors
in Food Safety
133947 -l13947 .6(HSC) Minimum standards of
knowledge in food safety
Ilolding and Food Ahead of Service
I13996,t t3998, [4050, 4r59(HSC)
Holding potentially hazardous foods:
temp€ratures for holding, keeping or displaying;
tlermometers
I 14002, I14002.I(HSC) Cooling ofpotentially
hazardous foods
I14018, I14020, I 14020.I(HSC) Storage of
frozen food; refreezing thawed food; thawing
potentially hazardous food
I 13952- l 13953.5(HSC) Requirements for food
handlers/hand washing
I13952 (HSC) Water supply; minimum
temperature for hot water
I 14250, I14276(HSC) Toilet facilities
I 13953.3(HSC) Hand washing facilities
t14256-114256.1,113953.4 (HSC) Food
service clothing/apron storage
I 14004-1 1401 6(HSC) Cooking temperatues
(Lauren Beth Rudolph Safety Act of 1997)
114016(HSC) Reheating of foods
I 14021-l 1403I(HSC) Protection from
contaminatiorl/approved sources
I 14035(HSC) Inspections upon receipt
I13980, t 14025, I14027({SC) Food must be
protected
I14257-114257.1, I 14 t75 (HSC) Facilities and
equipment are to be clean and in good repair
I l4l6l, I 14179(HSC) Storage of food and
non-food items
No foods are reheated.
3. Personal Hygiene/Food Handling
5. Cross Cont minationflnspection
Safe$, Housekeeping, Mainlensnce and Eqaipment
6. Cleaning and Sanitizing
114099.6, I14107 (HSC) Requirements for
manual sanitation and cleaning. and sanitizing
of utensils and equipment
EH Attchrnnt{alcode: 20 I 5 Calcode PAGE I CSA Form 357.358.158 (REv l0/08)
ENVIRONMENTAL HEALTH INSPECTION CHECKLIST ATTACHMENT
Reference: California Retail Food Code; Health and Safety Code (HSC) Division 104, Part 7, Chapter l-13
HSC AREAS YES NO N/A COMMENTS
Chapter 5 (HSC) Cleanliness ofutensils and
equipment; three-compartment metal sink
required; methods of cleaning utensils
N/A
7. Pesticide and Clean Storage
I 13978,1 13953.5 (HSC) Posting of signs
114254-114254.3 (HSC) Storage and use of
poisonous or injurious substances
114259, 114259.3(HSC) Prevention of the
entrance and harborage of insects and/or rodents
I 14244-1 14245.8(HSC) Storage and disposal
of waste material
114259-114259.1 (HSC) Cleanliness of
premises
113903 , 114259 .4,- I14259 HSC) Prohibition
against live animals; Exceptions; Liability for
damages
1 14419-l I,{423(HSC) Requirements for
tIACCP Plans & HACCP Plans Requiring
Approval. The food facility may operate
pursuant to a Hazard Analysis Critical Control
Point Plan (tlACCP). Applicability is
determined by food management techniques.
I 14057, I '14057.10{SC) Date marking on
containers
I14130-l l414l, I 14163 (HSC) New or
replacement equipment
I 14190, I 14193-1 1 4193.1, n4t97,tt4t99.
I 14269(HSC) Installation and maintenance of
plumbing; disposal ofliquid waste; drains
I | 41 49 -l I 4 I 49.3 (HSc) ventilation;
mechanical exhaust lor cooking equipment
I14268-l14269 (HSC) Floor suface materials
ald floor drains
I 14271 (HSC) Wall and ceiling surfaces
I 14185-1 14185.5 (HSC) Storage for ctean
linens; containers for soiled linens
ll4219-ll42E2(IlSC) Storage area for cleaning
equipment and supplies; disposal ofmop bucket
waste and other liquid wastes
I 14286(HSC) Lighting requiremens
I 14286(HSC) Living and sleeping quarters
shall be separated from food preparation areas
No food preparation on premises.
No new or replaced equipment noted.
8. Vermin Exclusion
9. Solid Waste
10. Other Requirements
EH Attchmnt{alcode; 20 I 5 Calcode PAGE 2 CSA Form 157,358,458 (REV.l0/08)
EXPLA}IATION FOR CURFFL REQUIREMENTS ON INSPECTION ATTACHMENT
The following explanation was developed by California environmental health inspectors as a reference for detention facility health
inspectors and facility managers. It is not intended as a replacement to Califomia Uniform Retail Food Facilities Law (CUMFL).
Explanations reference the rumbers on the CURFFL attachment to the Corrections Standards Authority inspection checklist.
FOODBORNE ILLNESS _ CRITICAL RISK FACTORS
1. Knowledge in Food Safety
> Health and Safety Code 113947 -113941 .6, 113794, 113794.1
) Food Safety Manager
Krowledgeable managers and employees, who understand the importance of food safety are vital to the operation of a food facility in
preventing foodbome illness. Each food facility must have at least one employee who has successfully passed an approved and
iccredited food safety certification examination. The certification is good for three years fiom the date of issuance and is to be kept
on file in each food facility.
2. Cooling, Holding & Preparing Food Ahead of Service
> Health and safety code 11399G114157, ll4l59
) Hot and Cold Holding Temperatures
Maintaining proper holding temperatures is one ofthe most important factors in preventing foodbome illness. Since disease-causing
bacteria are able to multiply rapidly at temperatures between 4l degrees Fahrenheit and 135 degrees Falrenheit, and this is kno\Yn as
the temperature danger mne. You can prevent bacteriat glowth in food by keeping hot foods hot, and cold foods cold. The proper
holding temperatures for potentially hazardous foods are:
o Hot foods shall be kept at 135 degrees Fafuenheit or above.
. Cold foods shall be refrigerated at 4l degrees Fahrenheit or below.
. Frozen food shall be kept at 0 degrees Fahrenheit or below.
Ways in which hot foods can be held safely:
. Transfer hot foods directly to an oven, steam table, or o0rer hotding unit. Do not heat foods in a steam table or by using hot
holding equipment.
. Reheat leftover foods to 165 degrees Fahrenheit prior to placing in hotding unit.
. Ifpossible, avoid cooking foods more than one day ahead oftime.
. Stir foods at frequent intervals to evenly distribute heat.
. Keep a cover on foods to help maintain temperatures.
Ways in which cold foods can he held safely:
. Keep foods in cold-holding tables, commercial refrigerated display cases, and refrigerators.
. For salad bars and display units place the food containers in ice up to the Product depth.
. Keep a cover on foods held in cold holding units to help maintain temperatues.
. Check the temperature of the foods on a frequent and regular basis. Use a calibrated, clean and sanitized thermometer.
Thermostat gauges of holding equipment may not accurately indicate the intemal temperature of the food and should not
solely be relied on during food preparation.
Thawitrg
Frozen food must be thawed under refrigeration, or under cold (70 degrees Fabrenheit) running water, as part of the cooking process
or in a microwave oven as part ofa continuous cooking process-
> Health and Safety Code ll4OO2,ll1002.l
F Cooling of Potentially Hazardous Food
. Potentially hazardous food prepared or cooked, which will be served at a later time and which is not held at t35 degrees
FahreDheit must b€ rapidly cooled to prevent the growth of microorganisms that cause foodbome illness.
. After heating or hot holding, potentially hazardous food must be cooled from 135 degrees Fahrenheit to 70 degrees
Fahrenheit (or below) within two hours and from 70 degrees Fahrenheit (or below) to 4l degrees Fakenheit or below within
four hours.
o Food prepared at room temperature must be cooled to 4l degrees Fahrenheit or below within four hours.
EH Anchmnt{alcod€;2ols Calcode PAGE 3 CSA Form 357,358,458 (REV.I0/08)
Methods of Rapid Cooling:
. Using shallow pans.
. Separating food into smaller portions.
o Using rapid cooling equipment.
. Adding ice.
. Placing food in an ice bath and stining.
o Other means as approved by local Environmental Health Agency-
3. Personal Hygiene/Food Handling
> Health and Safety Code 113967, 113952-1 13961,113973,113977
! Food Handlers
Employees (including inmate workers) must conduct themselves in such a manner that they do not contribute to the contamination of
either food or utensils. This includes the need for wearing clean outer garments and haimets, caps, etc., to confine hair. Hands must
be washed for at least 20 seconds before and after any activity that may result in contamination. This includes:
o Immediately before engaging in food preparation or handling.
. When switching fiom handling raw food products to ready-to-eat food.
o After handling soiled equipment or utensils.
o After using the toilet lacilities.
. After coughing, sneezing, eating or drinking.
. After any other activity that may contaminate the hands.
Disposable gloves are to be wom by employees (including inmate workers in detention facilities), when contacting food or food
surfaces ifthe individual has any cuts, sores, rashes, artificial nails, etc. An adequate supply ofdispensed soap and paper towels are to
be maintained at all sinls used for hand washing.
4. CookingTemperatures
> Health and Safety Code lrlrc04,114008, r 14093cooking Temperatures
Proper cooking of potentially hazardous foods at correct temperatures is essential to kill bacteri4 viruses, and parasites and deactivate
some bacterial toxins. The following are the minimum internal cooking temperatures:
o Poultry, stuffed meats, pasta stuffed with meat, leftovers: 165 degrees Fahrenheit.
. Ground meats, including ground beef (non-poultry): 155 degrees Fahrenheit for 15 seconds.
. Eggs, pork and most other potentially hazardous foods: 145 degrees Fahrenheit.
Foods cooked in a microwave oven must be stired or rotated often during cooking, and need to be covered and heated throughout to a
minimum temperatue of 165 degrees Fahrenheit. Never cook or reheat food using hot holding equipment, and never add raw food to
food that has already been cooked. The fural cooking temperatures should be checked with a sanitized, calibrated thermometer.
5. CrossContaminationflnspection
> Health and Safety Code I lll()35-1140'39.4,ll404l
F lnspecting Food Upon Receipt
Food delivered to a food facility must be inspected upon receipt. A receipt or invoice is to be provided upon delivery in order to
verifl this food is from an approved source.
Purchasing and Receiving of Food:
. Only clean and unbroken shell eggs shall be received.
. Carefi.rtly inspect deliveries for proper labeling, temperature and appearance.
o Check shipments for intact packaging, e.g., broken boxes, leaky packages or dented cans are signs ofmishandling.
. Check packages for signs of refreezing and./or pest infestation.
. Inspect deliveries immediately and put items away as quickly as possible.
. Frozen foods are accepted only if there is no sign ofthawing or re-freezing.
EH Aflchmnt{alcode: 20I5 Calcode PAGE 4 CSA Form 357.358.458 (REV l0/08)
> Health and safety code 113980, 1t4047-114055, 4060, 114061, 114063, 114065
) Food Storage
All food must be stored in a manner that prevents contamination. Food must be stored at least six inches above the floor and away
from sources of contamination, e.g., Iike overhead pipes and trash storage areas. Ready-to-eat food must be stored away trom, or
above raw food, such as uncooked meat, poultry or pork. Bulk container of flour, sugar etc. must be labeled and kept covered.
Unpackaged food, which has been previously served, shall not be served to another person.
Safetv. Housekeeoine, Maintenance and Ea uioment
6. Cleaning and Sanitizing
> Health and Safety Code 114099.6, 114107
D Cleaning and Sanitizing Utensils and Equipment
After utensils, cufting boards, prep tables, and other food contact surfaces have been soiled liom food storage, preparation, cooking
and/or service, they must be washed, rinsed and sanitized before re-use. Failure to do so properly could contaminate food and lead to
foodbome illness. Cleaning and Sanitizing must occur separately to be effectiye.
Delinitions:
o "Cleaning" is the physical removal ofsoil and food mafter from a surface.. "Sanitizing" is the reduction ofthe number ofbacteria and viruses on a surface to safe levels.
Dishwashing Machines
Dishwashing machines, when properly operated and maintained, can be very effective in removing soil and destroying
microorganisms. Dishwashing machines must be certified or classified for sanitation by an American National Standards Institute
(ANSI) accredited certification program or otherwise approved by the local environmental health jurisdiction. Gererally, there are
two typ€s ofdishwashing machines, and they differ in their method ofsanitizing:
. High Temperanfe Machines sanitize dishes by rinsing dishes and utensils in water that has been heated to a temperature
between 180 degrees Fahrenheit to 195 degrees Fahrenheit. The temperature at the dish surface must be at least 160 degrees
Fabrcnheit.. Chemical-Sanitizing Machines dispense a chemical sanitizer into the final rinse water [concentration must be at least 100
parts per million (ppm) chlorinel for at least 30 seconds.
The sanitizing temperature or chemical concentration must be checked often to ensure proper levels are maintained.
Manual Dishwashing
Washing rinsing, and sanitizing equipment, utensils, and other food-contact surfaces can also be done manually in a thre€-
compartment sink. In a three-compartment sink, the first compartment is used for washing, the second is used for rinsing and the thid
is used for sanitizing. The three-compartment sink shall be equipped with dual integal drain boards. There are five steps to the
manual dishwashing method:
l. Pre-Rinse: scrape and pre-rinse dishes thoroughly.2. Wash with hot water and dishwashing detergent.a. Hot water means that the water should bo as hot as can be tolemted by hand.
b. Change the water often to keep it hot and free of food particles.
3. Rinse: Rinse in clean hot water to remove detergent.a. Hot water means the water should be as hot as can be tolerated by hand.b. Change the water often to keep it hot.
4. Sanitize: Immerse dishes into the warm (75 degrees Fabrenheit to 120 degrees Fahrenheit) sanitizer solution for the requircd
amount of time listed below. Change the water solution often. The choices ofsanitizer and the time required are:a. 100 ppm chlorine for 30 seconds, or' b. 200 ppm quatemary ammonium for one minute, orc- 25 ppm iodine for one minute, ord. Hot water, at least 170 degrees Fahenheit for 30 seconds.5. Air Dry: Allow dishes to air dry or store in a draining positron.
EH Attchmnr{alcode- 20 I 5 Calcode PAGE 5 CSA Form 357,358,458 (REV l0/08)
Frequency of Washing and Sanitizing
Food contact surfaces, such as prep tables, cutting boards, and utensils, (including knives and serving spoons) must be cleaned and
sanitized throughout the day if in continuous use or after each use as indicated:
. Whenever there is a change between animal products.
. Each time there is a change ftom working with raw meats, or other potentially hazardous foods, to ready-to-eat foods.
. Ifthe utensil or equipment is in continuous use thoughout the day, it must be washed and sanitized at least every four hours.
. At any time during food preparation when contamination ofthe squipment or utensil may have occurred.
Wiping Cloths
Wiping cloths used on service counters, scales, and other surfaces that may directly or indirectly contact food, shall be used only once
until laundered, or held in a sanitizing solution as indicated in #4 above, "Sanitize." The water solution must be changed often to keep
it clean and to maintain the proper strength of sanitizer. Wiping cloths and solution used in the dining area must not be used on
kitchen equipment and other food contact surfaces.
Sanitizer Test Kits
Sanitizer testing kits are necessary to ensure proper concentrations are being prepared and maintained. Check with your cleaning
chemical or restaurant supplier to obtain the specific type ofkit for the sanitizing chemical used in your facility.
7. Pesticide and Cleaning Supply Storage
> Health and safety code 114254-1142543
> Use and Storage ofPesticides and Cleaning Supplies
All pesticides and cleaning supplies must be stored in an area where they will not contaminate food or food contact surfaces, utensils
or packaging materials. It is recommended that only a licensed pest control operator apply pesticides. Pesticides are not to be stored
with cleaning supplies.
8. Vermin Exclusion
F Health and Safety Code 114259,1142593
> Exclusions of Vermin
To exclude flies, physical barriers such as the installation of window and door screening, high velocity air curtain fans above exterior
doors, and installation of self-closing devices on exterior doors are recommended. Openings under exterior doors and around pipes
and \ ires that enter buildings through exterior walls, greater than one-quarter inch, are to be sealed to exclude rodents.
9. Solid Waste Management
D Health and Safety Code 11424+114245.a
> Solid Waste Management altd Garbage Disposal
Pests attracted by garbage can contaminate food items, equipment and utensils. The solid waste management (garbage) program shall
include:
. Removal of trash and garbage away from food preparation areas as soon as possible, and from the facility at least once each
wee[<, or more often if necessary to prevent a nuisance.r Use ofleak proofgarbage containers with tight fitting lids.. Frequent cleaning ofgarbage containeB in a location away from food preparation and food storage areas.
10. Other Requirements
F Health and Safety Codes 113947-ll42a6 grom attachment to inspection checklist)
Please reference the Califomia Retail Food Code if further explanation is required.
EH Attchmnt-Calcode; 2015 Calcode PACE 6 CSA Form 357,358,458 (REV l0/08)
DATE OF NSPECTION:
CONDUCTED BY:
ALSO IN ATTENDANCE:
SECURED AREAS:
NT JAIL INSPECTIO
Apil2,2015 @ 1:30 PM
Leonard Grossberg
Robert Sousa, Erik Cheng, and Kenny Jackson
CELLIROOM TOILET HANDSINK:
HOT-COLD
DRINKING
WATER
FLOOR
TRAPS
SANI-
TATION
LIGHTING
JlOA OK OK OK OK OK OK
JlOB OK OK OK OK OK OK
t29 OK OK OK OK OK OK
J19A OK OK OK OK OK OK
J19B OK OK OK OK OK OK
J21 A OK OK OK OK OK OK
J21 B OK OK OK OK OK OK
SOBERING ROOM OK OK OK OK OK OK
STORAGE ROOM OK OK OK
SHOWER ROOM OK OK OK
HOLDING CELL 1 OK OK
HOLDING CELL 2 OK OK
COMMONAREAS:
ROOM/AREA SANITATION LIGHTING SAFETY OTHER
KITCHEN OK OK OK
FINGERPRINTING OK OK OK
BOOKINGROOM OK OK OK
BREATIIALYSER OK OK OK
ATTORNEY CONF,OK OK OK
CLOSET OK OK OK
WALKWAYS OK OK OK
CARPORT OK OK OK
JAILER'S OFFICE OK OK OK
SUPPLY ROOM OK OK OK
COMMENTS:
Facility was observed to be in excellent condition. All areas inspected were found
clean and sanitary.
gcLGTVERNON POLICE DEPT/JAIL NSPECTION CHECKLIST2ot s DOC
The following items/instructions were found in the desk manual:
Chapt. # Comments:
Suicide Prevention
Medical Screening
Communicable Diseases
Use of Force & Restraints
Use of Sobering Cell
Mattress, Bedding, &
Linen Exchange
Personal Care Items
Food Service
First-Aid Kit
Drug Management
Sick Call
Juvenile Detention
Female Detention
Facility Maintenance
Facility Sanitation
Police Dogs/Kennels
Yes 12
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
10
8
9
8
13
l3
l3
10
10
10
l5
8
l3
l3
r6
gclc:Vemon Polica DepV Procrdur€ Manual chklst 2015 doc
@
n
REGE
JUL O
flVED
RECtrr\/ D
JUL O 9 ZOi5
CIIY CLEllI('S OFFICE
POLICE DEPARTMENT
Daniel Calleros, Chief of Police
4305 Santa Fe Avenue, Vemorl Califomia 90058
Telephone (323) 587-512 Fax (323) 82G1481
July 1,2015
Honorable City Council
City of Vernon
Vernon, California
Honorable Members:
Attached are copies of the Vemon Police Department Activity Log and Statistical
Summary of Arrest and Activities which cover the period from 12:01 a.m., June
16,2015 up to and including midnight of June 30,2015.
Respectfu lly submitted,
YERNON POLICE DEPARTMENT
Ar-*;e C//.*
DANIEL CALLEROS
CHIEF OF POLICE
DClar
F4ctusAeb liltutrtut
VERNON POLICE DEPARTMENT
D ep artment Activity Rep o rt
lurisdiclion: vERNoN
Fitst Date: O6r't6/2015
Lasl Date: 06/3012015
Deporlment Complaint
Type Description
AII Units Primary Unit
\?D
476R FMUD REPORT
484 PETTY THEFT
484R PETTY THEFT REPORT
487R GMND THEFT REPORT
5O3R EMBEZZLEMENT REPORT
586 PARKING PROBLEM
586E PARKING ENFORCEMENT
594 VANDALISM
594R VANDALISM REPORT
602 TRESPASS
653M ANNOYING PHONE CALLS
653MR ANNOYING PHONE CALLS REPORT
oFFtcER rs 10{ c7.961,962.1G10, WASH. EOUtp[
PICK UP THE JAIL PAPER WORK FROM HP JAIL
,IG96 MARY (MAIL DETAIL)
SUPPLEMENTAL REPORT
NON-INJURY HIT AND RUN
NON-INJURY HIT AND RUN REPORT
SILENT ROBBERY ALARM
DOMESTIC VIOLENCE
DOMESTIC VIOLENCE REPORT
INDECENT EXPOSURE
OISTURBING THE PEACE
BPANDISHING A WEAPON
BURGLARY
AUDIBLE BURGLARY ATARM
BURGTARY REPORT
BURGLARY TO A VEHICLE REPORT
INJURY TRAFFIC COLLISION
NON-INJURY TRAFFIC COLLISION
NON]NJURY TRAFFIC COLLISION REPORT
TRAFFIC HAZARD
911 MISUSE / HANGUP
CONTACT THE REPORTING PARTY
ABANDONEO VEHICLE
SUSPICIOUS CIRCUMSTANCES
ATTEMPT PETTY THEFT
PROBATION / PAROLE COMPLIANCE CHECKS
ATTEMPT GRAND THEFT AUTO REPORT
ASSIST VERNON FIRE DEPARTMENT
BROKEN SIGNAL OR LIGHT
BROKEN OOWN VEHICLE
106
10-96H
10-96M
140
20002
20002R
211S
273.5
273.5R
314
415
417
459
4594
459R
459VR
9017
9027
9O2TR
9097
911
911A
9'174
925
A4M
ABl09
AGTAR
ASTVFD
BOSIG
BOVEH
119
1
5
1I
5
4
4
2
J
19
4
J
147
J
2
4
4
7
2
30
1
13
10
13
1
1
16
43
2
2
1
13
7
22
3
2
1
15
7
12
o
1
1
2
R
8
I l0
1
4
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3
4
I
I
I
I
7
I
I
67
2
4
I
I
3
4
I
22
I
3
7
6
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I
5
23
2
2
I
ll
5
t0
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5
8
6
I
I
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3
6
CITCK CITATION CHECK
CODEs SURVEILLANCE/STAKE.OUT
COP COP DETAIL
DEADANIMAL DEAD ANIMAL FOR REMOVAL
OET DETECTIVE INVESTIGATION
DETAIL DETAIL
07/01/2015 07:36:07 Page of
VERNON POLICE DEPARTMENT
D ep artment Activity Report
Jurisdiction: vERNoN
Fbsl Date: 06fi6/2ots
Lasl Date: o6/30/2ots
Deparlment Complaint
Tlp" Descriplion
All Units P mary Unit
VPD
DPTAST DEPARTMENTAL ASSIST
DUPLICATE TO BE USED WHEN A CALL IS DUPLICATED
FILING OFFICER IS lOS REPORT WRITING
FOUND FOUNO PROPERTY REPORT
3
1
42
3
13
8
b
J
1
3
I
4t
3
t0
6
4
I
I
I
2
I54
5310 51l
3261 s0'l I55 2777
624322
53
1l
HBC HAILED BY A CITIZEN
ID THEFT RPT IDENTITY THEFT REPORT
ILLDPG ILLEGAL OUMPING
JAILPANIC TEST THE JAIL PANIC AI.ARM BUTTON
K9 TRAINING K9 TRAINING REMINOER, OBTAIN LOCATION
LOCATE LOCATEO VERNON STOLEN VEHICLE
LOJACK LOJACK HIT
LPR LICENSE PLATE READER
MR6O MISC REPORT
PANIC ALARM PANIC AI.ARIWDURESS ALARM
PAPD PUBLIC ASSIST-POLICE
FU
GTAR
PATCK
PDO
PEDCK
FOLLOW UP
GRAND THEFT AUTO REPORT
PATROL CHECK
PROPERTY DAMAGE ONLY
PEDESTRIAN CHECK
PRSTMN PRISONERTRANSPORTED
REC RECOVERED STOLEN VEHICLE
RECKLESS DF RECKLESS DRIVING (23103)
REPO REPOSSESSION
RR RAIL ROAD PROBLEM
SPEED SPEED CONTEST OR SPEEDING (23109)
TRAFFIC STOI TRAFFIC STOP 155 t23VCK VEHICLECHECK 56 36
VEH RELEASE VEHICLE RELEASE 2 2WELCK WELFARECHECK 5 2
Deparlmenl:1058 714
Overull:1058 715
07/01/2015 07:36:07 Pdge of
YERNON POLICE DEPARTMENT
Police Activity Report
Period Ending: 06130115
TRAFFIC COLLNIONS
TOTAL
NON.INJURY
INJURY
Pedestrian
Fatalities
City Property Damage
Hit & Run (Misdemeanor)
Hit & Run (Felony)
Persons Injured
VEHICLES STOREI)
Unlicensed Driver
Abandoned/Stored Vehicle
Traffrc Hazard
CITATIONS
Citations Iss @risoner Release)
Citations Iss (Moving)
Citations Iss @arking)
Citations Iss (Total)
Hazardous
Non-Hazardous
Other Violations
CASES CLEARED BYARREST
ARl5-154 CR15-1009 l r364(A) HS
ARls-ls7 CR15-1026 s94(BX1) PC
ARrs-1s8 CR15-1030 24s(AX1) PC
ARl5-159 CR15-1031 459 PC
ARl5-160 CRl5-1056 11351 HS
ARl5-161 CRl5-1068 211PC
ARl5-162 CRl5-1074 11378 HS
PROPERTY RECOYERED
VEHICLES: $39,800.00
PROPERTY RECOVERED FOR
OTIIER DEPARTMENTS
VEHICLES: $10,000.00
NO.
7
5
2
1
8
79
20
99
54
25
t1
9
2
2
VERNON POUCE DEPARTMENT
REFORT FOR PERSONS ARRESTED
PERIOD ENDING 06/30/15
MALE FEMALE TOTAL
ASSAULT WITH A DEADLY WEAPON 1 1
BURGLARY 1 1
CRIMINAL THREATS
EMBEZZLEMENT
FORGED OFFICIAL SEAL
GMND THEFT
POSS. CTRLD SUBSTANCE TO SELL 1 1 2
POSS. STOLEN PROPERTY
RESISTING ARREST
ROBBERY 1 1
VEHICLE THEFT
WARMNT (BENCH)
TOTAL FELONY ARRESTS 2 3 5
MALE FEMALE TOTAL
BATTERY
CRIMINAL THREATS
DRIVING UNDER THE INFLUENCE
DRUNK IN PUBLIC
HIT AND RUN
POSS. CONTROLLED SUBSTANCE
POSS. NARC. PARAPHERNALIA 1 1
TRESPASSING
VANDAUSM 2 2
WARMNTS (BENCHTTRrc
WARMNTS (FOREIGN)1 1
TOTAL MISD. ARRESTS 4 0 4
MALE FEMALE TOTAL
BURGLARY
PETTY THEFT
POSS. STOLEN PROPERTY
VANDAUSM
VEHICLE THEFT
TOTAL JUVENILES DET.0 0 0
TOTAL FELONY ARRESTS (ADULI) TO DATE:
TOTAL MISDEMEANOR ARRESTS (ADULT) TO DATE:
TOTAL JUVENILES DETAINED (FELONY AND MISDEMEANOR) TO DATE:
TOTAL ARRESTS AND DETAINED JUVENILES (FELONY AND MISDEMEANOR) TO DATE:
109
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REGEIVED
JUL 14 2015
CITY CLERl('S OFFICE
STAFF REPORT
CITY ADMINISTRATION
DATE:
TO:
FROM:
Rf,:
July 21,2015
Honorable Mayor and City Council
Mark C. Whitworth, City Administrator
Originator: Aler Kung, Economic Dev er kI-
Approval and Authorization of a Local Cash Commitment Letter with
Southern California Association of Governments
Angeles River Bikeway Feasibilify Study
(SCAG) regarding the Los
Recommendation
A. Find that the actions recommended in this staff report are exempt from the Califomia
Environmental Quality Act (CEQA). because (a) approval of the below-described Local
Cash Match Commitment Letter is not an "approval" as defined by Section 15352 due to
its conditional nature; and (b) the City of Vernon is neither the "lead agency" as defined
in Sections 15051 and 15367 nor a "responsible agency" as defined in Section 15381.
Moreover, the actions recommended are statutorily exempt lrom CEQA review under
CEQA Guidelines Section 15262, because it only involves a feasibility study for possible
future actions which the City of Vemon has not approved, adopted, or funded.
B. Approve and Authorize the City Administrator to execute the Local Cash Match
Commitment Letter with SCAG.
Backeround
In April, 2015 the Southem Califomia Association of Govemments (SCAG) and the City of
Vernon, as a sub-applicant, received a grant from the Califomia Department of Transportation
(Caltrans) in the amount of $237,878 to fund the Los Angeles River Bikeway Feasibility Study
(Study).
The Study will look at a wide range of altematives, challenges and present recommendations for
installing a regionally connected bikeway within the City's podon of the LA River. The Study
will assess current conditions, conduct engineering analyses, and present the best supported
options for extending the bikeway.
Page 1 of 2
SCAG staff will prepare a Request for Proposals (RFPs) to hire a consultant to conduct the
Study. A Proposal Review Committee composed of City and SCAG staff members will review
the proposals submitted and select a consultant. The Study is anticipated to be presented to City
Council by June 30,2017.
Fiscal Impact
The City's total local cash match amount for the Study is S30,820.00.
Attachment(s)
l. Local Cash Match Commitment Letter: Los Angeles River Bikeway Feasibility Study
Page 2 of 2
4305 Santa Fe Avenue, Vemor; California 90058
Telephone (323) 583-8811
July 14, 2015
Basil Panas, Chief Financial Officer
Southern Califomia Association of Govemments
ElE West Seventh Street 12th Floor
Los Angeles, CA 90017-3435
RE: Local Cash Match Commitment Letter; Los Angeles River Bikeway Feasibility Study
Dear Mr. Panas:
As the recipient of grant funding in the amount of $237,878 from the Califomia Department of
Transportation (Caltrans), the City of Vemon (Vemon) agrees to provide a local, cash match to the
Southem Califomia Association of Governments (SCAG) in the amount of $30,E20 toward funding for
the Los Angeles River Bikeway Feasibility Study. The project will be firnded primarily by the FY 15-16
Sustainable Transportation Planning Grant, whereas the local cash match will come from Vemon's
General Fund.
In reliance upon Vernon's commifinent as outlined in this letter, SCAG intends to award a consultalt
contract to support this hoject according to the Scope of Work detailed in Vemon's approved grant
application.
This letter serves as Vemon's commihnent to deliver a check payable to the "Southem Califomia
Association of Govemments" in the amount of $30,820 upon issuance by SCAG of a Notice of Intent to
Award the consultant contract for this Project. Vemon firrther understands that SCAG shall not execute a
consultant contract for this Project until SCAG is in receipt of such cash match pa),rnent. Local cash
match shall be firnded only with non-federal funds.
If any firnds paid in advance by Vemon are unspent upon the completion or termination ofthe consultant
contrac! SCAG shall retum such firnds to Vemon within thirty (30) days of the completion or terminalion
of the consultant contract.
In regards to roles and responsibilities, SCAG staff will conduct the procurement process for consultant
services. SCAG will approve invoices, review consultant deliverables and provide timely feedback on
those deliverables, and will participate in monthly progress update meetings and,/or conference calls
where deliverables will be reviewed and discussed and project progress will be discussed. Unless
otherwise agreed upon, SCAG staff will retum comments on deliverables to the consultant within two (2)
weeks of their submittal.
lE4c fus iv e $ I n{us t ria I
luly 14,2015 Page 2
Vemon staffwill provide technical leadership for the project. Vemon staffwill guide analyical work and
project outreach, provide data if available, review consultant deliverables and provide timely feedback on
those deliverables. Vemon staff will participate in monthly progress update meetings and,/or conference
calls where deliverables and project progress will be reviewed and discussed. Unless otherwise agreed
upon, Vemon staff will retum comments on deliverables to the consultant witlrin two (2) weeks of their
submittal.
Should you have any questions, please contact Samuel Kevin Wilson at (323) 583-8811, extension 245.
Sincerely,
Mark C. Whitworth
City Administrator
City of Vemorg 4305 Santa Fe Avenue, Vernor; Califomia 90058 - Telephone (323) 583-8811
STAFF REPORT
July 21,2015
Honorable Mayor and City Council
Hema P. Patel, City Attorney \.iQls$4
REGEiVED
JUL 15 2015
CITY CLERK'S OTFICE
RECEIVED
JUL 0 I 20t5
CITY ATTORNEY'S OFFICE CITY ADMINI ,TION
DATE:
TO:
FROM:
RE:Approval of an Amendment No. 1 to the Attorney Services Agreement
between the City of Vernon and Liebert Cassidy Whitmore to provide
personnel and labor law attorney services
Recommendation:
It is recommended that the City Council:
A. Find that approval of the proposed Attorney Services Agreement with Liebert
Cassidy Whitmore is exempt under the California Environmental Quality Act
(CEOA) in accordance with CEQA Guidelines section 15061(b)(3), the generat
rule that CEQA only applies to projects that may have an effect on the
environment.
B. Authorize the City Administrator to enter into an Amendment No. 1 to the
Attorney Services Agreement between the City of Vernon and Liebert Cassidy
Whitmore, in substantially the same form as submitted herewith, for an additional
one-year period in an amount not to exceed $150,000.00.
BackEround
On September 2, 2014, the City Council approved an Attorney Services Agreement for
personnel and labor law attorney services with Liebert Cassidy Whitmore ("Liebert
Cassidy").
On April 12,2013, in accordance with the City's good governance reforms and updated
competitive selection procedures, the City Attorney's Office issued a Request for
Proposals for legal services regarding employment and labor law.
The City received proposals from 22labor and employment firms throughout the state,
including Liebe( Cassidy. The proposals were subject to an initial screening and
written evaluation process by the city Attorney's office, the Human Resources Director,
and the Chief of Police, and top firms were interviewed by the selection panel. Based
on the foregoing process, the selection panel concurred that Liebert Cassidy was a top
contender, and should continue to assist the City on employment legal matters on an
as-needed basis. ln addition to providing legal advice on specialized employment
issues, Liebert cassidy has also been assisting the city Attorney's office in the defense
of several ongoing pension-related lawsuits brought by former city Administrator Bruce
Malkenhorst, Sr.
The strength of Liebert Cassidy in the areas of employment law and employment
litigation is evidenced by the firm's top ranking in the City's RFP process, as well as its
historical knowledge of the city's employment issues and pension structure. ln addition,
Liebert Cassidy has defended the City vigorously and provided expert legal strategy
during ongoing litigation matters.
Liebert Cassidy offers competitive billing rates, with partners billing at $325.00 per hour,
and associates billing at $190.00-265.00 per hour.
Fiscal lmpact
The maximum fiscal impact to the City under the proposed contract term is
$150,000.00, which takes into account the continued litigation of at least three ongoing
employment-related lawsuits. This amount has been included in the budget for the City
Attorney's Office for fiscal year 2015-2016.
AMENDMENT NO. T TO TIIE ATTOR]\IEY SERVICES AGREEMENT BETWEEN
THE CITY OF VERNON AI\D LIEBERT CASSIDY WHITMORE FOR PERSONNEL
AND LABOR LAW ATTORIIEY Sf,RVICES
This Amendment ("Amendment No. 1") to that certain Agreement for personnel and
labor law attomey services dated August 1,2014, (the "Agreement"), is made as of August l,
2015, by and between the City of Vemon, a Califomia charter city and municipal corporation
(the "City"), and Liebert Cassidy Whitmore ("Associate Counsel"), a Califomia corporation.
WHEREAS, the City and Associate Counsel are parties to a written Agreement dated
August l, 2014, under which Associate Counsel provides personnel and labor law attomey
services ("the Agreement"); and
WHEREAS, the City and Associate Counsel desire to amend the Agreement to renew the
Agreement effective August l, 2015, through July 31, 2016, for a total amount not to exceed
$150,000.00 for this renewal term.
NOW, TffiREFORE, the parties to this Amendment No. 1 agree as follows:
l. The Agreement has been renewed for an additional one (1) year period, and the
Termination Date listed on the Cover Page is amended to July 31, 2016. There are no further
renewal terms beyond this one final one-year renewal term.
2. Except as expressly modified bythis Amendment No. l, all provisions ofthe
Agreement shall remain in full force and effect.
3. The provisions of this Amendment No. 1 shall constitute the entire agreement of
the parties with respect to the subject matter included in this Amendment No. I and shall
supersede any other agreement, understanding, or arrangement, whether written or oral, between
the parties with respect to tle subject matter of this Amendment No. l.
4. The person or persons executing this Amendment No. 1 on behalf of each of the
parties warrants and represents that he or she has the authority to execute this Amendment No. I
on behalf of that party and has the authority to bind that party to the performance of its
obli gations hereunder.
IN WITNESS WIIEREOF, the parties have signed this Amendment No. 1 as of the date
stated in the introductory clause.
ISTGNATURES FOLLOW ON NEXT PAGEI
I
CITY OF VERNON a Califomia charter city Liebert Cassidy Whitmore, a Califomia corporation
and municipal corporation
By:
BY: Name:
Mark Whitworth,
City Administrator Title:
ATTEST:
Maria E. Ayala, City Clerk
APPROVEDAS TO FORM:
Hema Patel, City Attomey
By:
Name:
Title:
,'
RECEIVED
JUL l6 2015
CIiY CLERl{'S OFFICE
DATE:
TO:
FROM:
RE:
REC
STAFF REPORT
CITY CLERK DEPARTMENT
July 21,2015
Honorable Mayor and City Council
Maria E. Ayala, City C
Approval of a Resolution for Staff Appointments/Reappointments as
Representatives to Various External Agencies and./or Committees
Recommendation
A. Find that approval of the proposed Resolution updating StafPs appointments does not
constitute a "project" pursuant to section 15378(bX2) of the Guidelines to the Califomia
Environmental Quality Act ('CEQA"), because it constitutes an administrative activity;
and even if the adoption of the proposed resolution did constitute a project, it would be
exempt from CEQA in accordance with Section 15061(bX3), the general rule that CEeA
only applies to projects that may have an effect on the environment; and
B. Appoint Staff as delegate(s) and altemate(s) to the following boards of various agencies
and,/or committees as follows; and
l.Gateway Region Integrated Water Managernent Joint Power Authority also
known as Gateway Water Management Authority Policy Board.
Appoint Director of Public Works, Water and Development Services as the
delegate; and appoint as altemates, Public Works and Water Superintendent and
Stormwater and Special Projects Analyst.
Previous appointment at the October 2, 2007 City Council Meeting: Kevin Wilson
as the delegate; and Scott Rigg and Woody Natsuhara as the altemates.
Southern California Public Power Authority.
Appoint Director ofGas and Electric as the delegate; and appoint as altemates the
Electrical Resources Planning & Development Manager and the Utilities
Compliance Manager.
Previous appointment, pursuant to Resolution No. 9845: Donal O'Callaghan as
the delegate; Abraham Alernu as the altemate.
LA-RICS Authority.
Appoint City Administrator as the delegate, with the authorization to designate a
proxy to vote on behalfofthe City.
2.
J.
Page I of 2
JUL
'
5 2015
Previous appointment, pursuant to Resolution No. 9gg3: Eric Fresch as the
delegate; Steve Towles through letters dated March 30,2OOg and May 11,2009
appointed as proxy.
c. Adopt a Resolution of the city Council of the city of vemon designating and appointing
its representatives and altemates to the various boards of the above referenced agencies to
represent the City of Vernon.
Background
In review of its current records, the need to update ernployee appointments to specific boards has
been identified. The proposed will ensure current and appropriate representation of the City of
Vemon for both the Gateway Region Integrated Water Management Joint Power Authority also
known as Gateway water Management Authority Policy Board and the Southem califomia
Public Power Authority.
In an effort to ensure that such appointments are still active and are updated on a consistent basis,
the appointment of staff will be presented to Council on an annual basis in the future. Future
staff appointments will be presented to council at the time council appointments are made,
which will be on or about the regularly scheduled meetings for the month of May.
Fiscal Irnpact
There is no fiscal impact
Attachment(s)
None.
Page 2 of 2
RESOI,UTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON UPDATING CITY STAFF MEMBERS' APPOINTMENTS TO
VARIOUS EXTERNAI AGENCIES AND/OR COMMITTEES
WHEREAS, the City of Vernon (the .'City,,), is a municipal
corporation and a chartered city of the State of California organized
and existing under its Charter and the Constitution of the State of
California; and
WHEREAS, the CiEy is a member of various external Agencies
and/or Committees,. and
WHEREAS, tshe City Council of the City of Vernon desires to
update appointments of City Staff Members t.o various ext.ernal_ Agencies
and/or Committees.
NOW, THEREFORE,
CTTY OF VERNON AS FOLLOWS:
SECTION 1: The
BE IT RESOLVED BY THE CTTY COUNCIL OF THE
f inds
City Council of the City of Vernon hereby
the above recitals are true and correct..
City Council- of the City of Vernon finds
under the California Environmental Quality
with Section 1505L(b) (3), the general rule
projects Ehat may have an effect on the
and determines that
SECTION 2: The
that this aclion is exempt
Act (CEQA) , in accordance
that CEQA onl-y applies to
environment .
SECTION 3: The City Council of the City of Vernon hereby
appoints the Director of Pu-bl-ic Works, l{ater and Development Services,
tso serve as the City's delegate on the Gateway Region Integrated wacer
Management Joint Power Authority also known as Gateway Water
Management Authority Policy Board and the Public Works and Water
Superintendent, and the Stormwater and Special projects Analyst, as
the City' s allernates.
SECTION 4: The City Council of the City of Vernon hereby
appoints the Director of cas & Efectric, tso serve as Lhe City, s
delegate on the Southern California Public Power Authority and the
Electrical Resources Plarlrring & Development Manager, and the Utilities
Compliance Manager, Eo serve as the City's afternates.
SECTION 5: The City CounciL of the City of Vernon hereby
appoints the City Administrat.or to serve as the City, s delegate on the
Board of the LA-RICS Authority, with the authorization to des j-gnate a
proxy vote, on behalf of the City.
SECTION 6:Such appointments shafl be effective until the
deaLh, resignation, disgualif ication or subsequent removal by the City
Council of such represenEat.ives .
SECTION 7: Any resofutions or part.s of a resofution or
minute orders in confLict wit.h this Resolution are hereby repealed as
tso the portions in conflict, only.
2
SECTIoN 8: The City C1erk, or Deputy City Clerk, of the
City of vernon shal1 cert.ify to the passage, approvaf and adoption of
Ehis resolution, and the Citsy Clerk, or Deputy CiEy Cferk, of the City
of Vernon shaII cause thj-s resolution and the City Clerk's, or Deputy
city Clerk's, certifj-cation to be ent.ered in the File of Resolutions
of Ehe Council of this City.
APPROVED AND ADOPTED this 21st day of ,Ju1y, 2015.
Name :
Tltle: l(ayor / Mayor Pro-Tem
ATTEST:
City Clerk / Deputy City Clerk
APPROVED AS TO FORM:
'b*b*--Brian B]run, Deputy#ity Attorney
3
STATE OF CAIIFORNTA )
) ss
COI]NTY OF LOS ANGELES )
, City Clerk / Deputy City clerk of the City
of Vernon, do hereby cerEify t.hat the foregoing Resolution, being
Resolution No. , was duly passed, approved and adopted by Ehe
City Council of the City of Vernon at a regular meeting of the City
Council duly held on Tuesday, July 21, 2015, and thereafter was duly
signed by the Mayor or Mayor Pro-Tem of the City of Vernon.
ExecuEed this day of Ju1y, 2015, at Vernon, california.
City Cferk / Deputy City Clerk
(SEAL)
I,
4
REGEIVED
JUL 15 2015
CITY GTERl('S OFFICE
RECEIVED
JU!_ r 3 2015
STAFF REPORT
FIRE DEPARTMENT
DATE:
TO:
FROM:
RE:Approval to Lease Two (2) 2016 Pierce PUC Triple Combination Pumpers
for the Fire Department
Recommendation
A. Find that approval of the lease proposed in this staff report is exempt under the Califomia
Environmental Quality Act C'CEQA), because the proposed action is an administrative
activity that will not result in direct or indirect physical changes in the environment and
therefore does not constitute a "project" as defined by CEQA Guidelines section 15378.
Furthermore, even if it were a project, this action would be exempt from CEQA review
pursrrant to CEQA Guidelines section 15061(b)(3), the general rule that CEQA only
applies to projects that may have an effect on the environment; and
B. Approve and authorize the execution ofa ten (10) year Lease-Purchase Agreement with
Oshkosh Capital in the amount of $1,321,836.49, in substantially the same form as
submitted herewith, for two (2) 2016 Pierce PUC Triple Combination Pumpers for the
Fire Department that will replace two current engines that were purchased in 1989 and no
longer meet the needs of the department.
Background
The Proposed Purchase Compliance with the Municipal Code
The Fire Department requests that the City Council approve the Lease-Purchase Agreement of
two (2) 2016 Pierce PUC Triple Combination Pumpers from Oshkosh Capital, to be supplied
from Pierce Manufacturing Inc. ("PMI"), in the amount of $1,321,836.49. PMI is a subsidiary
company of Oshkosh Capital.
For this purchase the City intends to piggyback onto a current contract between the City of
Holland in the State of Michigan and PMI. Piggybacking is expressly authorized by Vernon
July 21, 2015
Honorable Mayor and City Council
MichaelA.Wilson,Fire Chiet .fru
Originator: Adriana Ramos, Administrative Secretary
Page 1 of 2
CITY ADMIi\I
Municipal Code Section 2.17 .12(a)(5) and allows Vemon to use an existing public agency
contract as a template to form its own contract directly with the same vendor to purchase on
same or similar terms. The City of Holland used a competitive bid process to obtain vehicle cost
for PMI that is at a cost substantially lower than Vemon could obtain if it were to complete the
traditional competitive bidding process itself. As such, staff requests that the City Council
approve the lease-purchase without requiring the completion of the traditional competitive
bidding process. The City of Vemon will be able to save time ard resources by piggybacking
onto the City of Holland purchase with PMI.
Reason Purchase is needed
The new 2016 Pierce PUC Triple Combination Pumpers will replace the two current engines that
were purchased in 1989, which have exceeded the recommended service time pwsuant to the
Vemon Fire Department "Apparatus Replacement Schedule". The current Apparatus
Replacement Schedule allows for twelve (12) years of front line service; followed by twelve (12)
years of "Reserve Status" prior to the retirement ofa Triple Combination Pumper'
Fiscal Imoact
The new Triple Combination Pumpers will be purchased by utilizing a Lease-Purchase Option in
order to defer the fiscal impact on the Fire Department budget over a ten (10) year term. The
annual cost of the lease will be $158,059.45, payable on an amual basis. Thirty (30) days prior
to the end ofthe lease term, the City will have the option to purchase both engines by paying all
Rent Payments then due, to include any accrued interest, plus the Termination Value amount set
forth on the Payment Schedule.
Attachment(s)
I . Master Lease-Purchase Agreement between City of Vemon and Oshkosh Capital
2. Pierce Manufacturing, Inc. Lease Proposal
3. City of Holland Fire Department Bid Results
4. Executed Purchase Agreement between Pierce Manufacturing, Inc. and the City of
Holland
Page 2 of 2
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Master Lease-Purchase Agreement
Between
CrrY oF VERNoN AND OsHKosH CAPTTAL
DOCUTUIENT INDEX
Master Lease-Purchase Agreement - Sign and provide title on the last page
Lease Schedule with Schedule A-1 - Sign and title
Vehicle Schedule Addendum -.Sign and title
lncumbency Certificate and Resolution- List your authorized signo(s) and title(s); have
secretary or appropriate trustee attest to the information and signature(s) provided by
signing and printing his/her name, title and date. The person who validates the
signatures should E! sign the lease documents. The resolution must reflect the
title(s) of the individual(s) who have authorization to sign the documents.
Opinion of Counsel Letter - Enclosed is a template. Please ask your attomey to prepare
on his/her letterhead, and include all of the items in the template.
Title - The terms of your contract specify that the Lender be listed as the
lienholder and hold the original title during the term of the lease. ln addition, we
will need a copy of the front and back of the MSO listing Oshkosh Capital, 995
Dalton Ave, Cincinnati, OH 45203 as first lien holder.
lnsurance Request Form - Fill in your insurer's information and sign. Please contact
your insurer, prior to delivery, to obtain a certificate of insurance. Please enclose the
certificate with the signed documentation or have the insurer fax the certificate directly to
me.
Three Party Agreement - Sign and title.
Delivery & Acceptance Certificate - At point of delivery, fill out this form and fax it to
me. Please return the original via US Postal Service.
IRS FORM 8038-G - Sign, date, and title
Minutes of Governing Body (approving the purchase & finance of equipment) - Please
return a copy with the documents.
Sales Contract or Purchase Order - please provide a copy of the Sares Contract
enter into with Pierce Manufacturing or a copy of the Purchase Order issued to
Pierce Manufacturing lnc.
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MASTER LEASE - PURCHASE AGREEMENT
Dated as of Julv 24. 2015
This Master Lease-Purchase Agreement together with all addenda, riders and attachments
hereto, as the same may from time to time be amended, modified or supplemented ('Master Lease") is
made and entered by and between Oshkosh Capital ("Lesso/') and the Lessee identified below
("Lessee").
LESSEE:Citv of Vernon
1. LEASE OF EQUIPMENT. Subject to the terms and conditions of this Master Lease, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, all Equipment described in each Schedule
signed from time to time by Lessee and Lessor.
2. CERTAIN DEFINITIONS. All terms deflned in the Lease are equally applicable to both the singular
and plural form of such terms. (a) "Schedule" means each Lease Schedule signed and delivered by
Lessee and Lessor, together with all addenda, riders, attachments, certificates and exhibits thereto, as
the same may from time to time be amended, modified or supplemented. Lessee and Lessor agree that
each Schedule (except as expressly provided in said Schedule) incorporates by reference all ofthe terms
and conditions of the Master Lease. (b) "Lease" means each Schedule and this Master Lease as
incorporated into said Schedule. (c) "Equipment' means the property described in each schedule,
together with all aftachments, additions, a@essions, parts, repairs, improvements, replacements and
substitutions thereto. (d) "Lien" means any security interest, lien, mortgage, pledge, encumbrance,
judgment, execution, attachment, warrant, writ, levy, other judicaal process or claim of any nature
whatsoever by or of any person.
3. LEASE TERM. The term of the lease of the Equipment described in each Lease ('Lease Term")
commences on the flrst date any of such Equipment is accepted by Lessee pursuant to Section 5 hereof
and, unless earlier terminated as expressly provided in the Lease, continues until Lessee's payment and
performance in full of all of Lessee's obligations under the Lease
4. RENT PAYMENTS
4.1 For each Lease, Lessee agrees to pay to Lessor the rent payments in the amounts and at the
times as set forth in the Schedule A-1 attached to the Schedule ("Rent Payments"). A portion of each
Rent Payment is paid as and represents the payment of interest as set forth in the Schedule A-1. Rent
Payments will be payable for the Lease Term in U.S. dollars, without notice or demand at the office of
Lessor (or such other place as Lessor may designate from time to time in writing).
4.2 lf Lessor receives any payment from Lessee afler the due date, Lessee shall pay Lessor on
demand as a late charge five per cent (5%) of such overdue amount, limited, however, to the maximum
amount allowed by law.
4.3 EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 6 HEREOF OR IN ANY WRITTEN
MODIFICATION TO THE LEASE SIGNED BY LESSOR, THE OBLIGATION TO PAY RENT PAYMENTS
UNDER EACH LEASE SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS AND SHALL
NOT BE SUBJECT TO ANY SETOFF, DEFENSE, COUNTERCLAIM, ABATEMENT OR RECOUPMENT
FOR ANY REASON WHATSOEVER.
5. DELIVERY; AGCEPTANCE; FUNDING CONDTTTONS
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5.1 Lessee shall arrange for the transportation, delivery and installation of all Equlpment to the
location specified in the Schedule ("Location") by Equipment suppliers ("Suppliers") selected by Lessee.
Lessee shall pay all costs related thereto unless Lessor otherwise agrees to pay such costs as stated in
the Schedule
5.2 Lessee shall accept Equipment as soon as it has been delivered and is operational Lessee
shall evidence its acceptance of any Equipment by signing and delivering to Lessor the applicable
Schedule. lf Lessee signs and delivers a Schedule and if all Funding Conditions have been satisfied in
full, then Lessor will pay or cause to be paid the costs of such Equipment as stated in the Schedule
("Purchase Price") to the applicable Supplier.
5.3 Lessor shall have no obligation to pay any Purchase Price unless all reasonable conditions
established by Lessor ("Funding Conditions') have been satisfled, including, without limitation, the
following: (a) Lessee has signed and delivered the Schedule and its Schedule A-1i (b) no Event of Default
shall have occurred and be continuing; (c) no material adverse change shall have occuned in the lnternal
Revenue Code of 1986, as amended, and the related regulations and rulings thereunder (collectively, the
"Code"); (d) no material adverse change shall have occurred in the financial condition of Lessee or any
Supplier; (e) the Equipment is reasonably satisfactory to Lessor and is free and clear of any Liens (except
Lessor's Liens), (0 all representations of Lessee in the Lease remain true, accurate and complete; and (g)
Lessor has received all of the following documents, which shall be reasonably satisfactory, in form and
substance, to Lessor: ('l) evidence of insurance coverage required by the Lease, (2) an opinion of
Lessee's counsel; (3) reasonably detailed invoices for the Equipment; (4) Uniform Commercial Code
(UCC) financing statements; (5) copies of resolutions by Lessee's governing body, duly authorizing the
Lease and incumbency certificates for the person(s) who will sign the Lease; (6) such documents and
certificates relating to the tax-exempt interest payable under the Lease (including, without limitation, IRS
Form 8038G or 8038GC) as Lessor may request; and (7) such other documents and information
previously identified by Lessor or othenrvise reasonably requested by Lessor.
6. TERMINATION FOR GOVERNMENTAL NON.APPROPRIATIONS
6.1 For each Lease, Lessee represents and warrants: that it has appropriated and budgeted
the necessary funds to make all Rent Payments required pursuant to such Lease for the remainder of the
fiscal year in which the Lease Term commences; and that it intends to make Rent Payments for the full
Lease Term as scheduled on the applicable Schedule A-1 so long as funds are appropriated in each
fiscal year by its governing body. Lessee reasonably believes that moneys in an amount sufflcient to
make all Rent Payments can and will lawfully be appropriated and made available therefor. All Rent
Payments shall be payable out of the general funds of Lessee or out of other funds legally available
therefor. Lessor agrees that the Leases will not be general obligations of Lessee and that the Leases
shall not constitute pledges of either the full faith and credit of Lessee or the taxing power of Lessee
6 2 lf Lessee's governing body fails to appropriate sufflcient funds in any flscal year for Rent
Payments or other payments due under a Lease and if other funds are not available for such payments,
then a "Non-Appropriation Event" shall be deemed to have occurred. lf a Non-Appropriation Event
occurs, lhen: (a) Lessee shall give Lessor immediate notice of such Non-Appropriation Event and provide
written evidence of such failure by Lessee's governing body; (b) on the Return Date, Lessee shall return
to Lessor all, but not less than all, of the Equipment covered by the affected Lease, at Lessee's sole
expense, in accordance with Section 21 hereof; and (c) the affected Lease shall terminate on the Return
Date without penalty or expense to Lessee, provided, that Lessee shall pay all Rent Payments and other
amounts payable under the affected Lease for which funds shall have been appropriated or are otherwise
available, provided further, that Lessee shall pay month{o-month rent at the rate set forth in the atfected
Lease for each month or part thereof that Lessee fails to return the Equipment under this Section 6.2.
"Return Date" means the last day of the fiscal year for which appropriations were made for the Rent
Payments due under a Lease
7 NO WARRANry BY LESSOR. The Equipment is sotd .,AS tS". LESSEE ACKNOWLEDGES
THAT LESSOR DID NOT MANUFACTURE THE EQUIPMENT. LESSOR OOES NOT REPRESENT
THE MANUFACTURER, OWNER, OR DEALER, AND LESSEE SELECTED THE EQUIPMENT BASED
UPON LESSEE'S OWN JUDGMENT, LESSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR OTHERWISE OR AS TO THE EQUIPMENT'S VALUE, DESIGN, CONDITION, USE, CAPACITY OR
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DURABILIW. LESSEE AGREES THAT REGARDLESS OF CAUSE, LESSOR IS NOT RESPONSIBLE
FOR, AND LESSEE WILL NOT MAKE ANY CLAIM AGAINST LESSOR FOR, ANY DAMAGES,
WHETHER CONSEQUENTIAL, DIRECT, SPECIAL OR INDIRECT INCURRED BY LESSEE IN
CONNECTION WITH THE EQUIPMENT OR THIS MASTER LEASE - LEASE PURCHASE
AGREEMENT. NEITHER THE MANUFACTURER, THE DEALER, NOR ANY SALESPERSON,
EMPLOYEE OR AGENT OF THE DEALER OR MANUFACTURER, IS LESSOR'S AGENT OR HAS
ANY AUTHORITY TO SPEAK FOR LESSOR OR TO BIND LESSOR lN ANY wAY. For and during the
Lease Term, Lessor hereby assigns to Lessee any manufacturer's or Suppliefs product warranties,
express or implied, applicable to any Equipment and Lessor authorizes Lessee to obtain the customary
services furnished in connection with such warranties at Lessee's sole expense Lessee agrees that (a)
all Equipment will have been purchased by Lessor in accordance with Lessee's specifications from
Suppliers selected by Lessee, (b) Lessor is not a manufacturer or dealer of any Equipment and has no
liability for the delivery or installation of any Equipment, (c) Lessor assumes no obligation with respect to
any manufacturefs or Supplier's product warranties or guaranties, (d) no manufacturer or Supplier or any
representative of said parties is an agent of Lessor, and (e) any warranty, representation, guaranty or
agreement made by any manufacturer or Supplier or any representative of said parties shall not be
binding upon Lessor
8. TITLE; SECURITY INTEREST.
8.1 Upon Lessee's acceptance of any Equipment under its Lease, title to the Equipment shall
vest in Lessee, subject to Lessor's security interest therein and all of Lessor's other rights under such
Lease including, without limitation, Sections 6, 20 and 21 hereof.
8.2 As collateral security for the Secured Obligations, Lessee hereby grants to Lessor a first
priority security interest in any and all of the Equipment (now existing or hereafter acquired) and any and
all proceeds thereof. Lessee agrees to execute and deliver to Lessor all necessary documents to
evidence and perfect such security interest, including, without limitation, Uniform Commercial Code
(UCC) flnancing statements and any amendments thereto.
8.3 "Secured Obligations" means Lessee's obligations to pay all Rent Payments and all other
amounts due and payable under all present and future Leases and to perform and observe all covenants,
agreements and conditions (direct or indirect, absolute or contingent, due or to become due, or existing or
hereafter arising) of Lessee under all present and future Leases.
L PERSONAL PROPERTY. All Equipment is and will remain personal property and will not be
deemed to be affixed or attached to real estate or any building thereon.
10 MAINTENANCE AND OPERATION. Lessee agrees it shall, at its sole expense: (a) repair and
maintain all Equipment in good condition and working order, in accordance with manufactureis
instructions, and supply and install all replacement parts or other devices when required to so maintain
the Equipment or when required by applicable law or regulation, which parts or devices shall
automatically become part of the Equipment; and (b) use and operate all Equipment in a careful manner
in the normal course of its operations and only for the purposes for which it was designed in accordance
with the manufacturer's warranty requirements, and comply with all laws and regulations relating to the
Equipment. lf any Equrpment is customarily covered by a maintenance agreement, Lessee will furnish
Lessor with a maintenance agreement by a party reasonably satisfactory to Lessor. No maintenance or
other service for any Equipment will be provided by Lessor Lessee will not make any alterations,
additions or improvements ("lmprovements") to any Equipment without Lessofs prior wrinen consent
unless the lmprovements may be readily removed without damage to the operation, value or utility of
such Equipment, but any such lmprovements not removed prior to the termination of the applicable Lease
shall automatically become part of the Equipment.
1 1. LOCATION; INSPECTION Equipment will not be removed from, or if Equipment is rolling stock its
permanent base will not be changed from, the Location without Lessofs prior written consent which will
not be unreasonably withheld. Upon reasonable notice to Lessee, Lessor may enter the Location or
elsewhere during normal business hours to inspect the Equipment.
,I2. LIENS, SUBLEASES AND TAXES
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12.1 Lessee shall keep all Equipment free and clear of all Liens except those Liens created under
its Lease. Lessee shall not sublet or lend any Equipment or permit it to be used by anyone other than
Lessee or Lessee's employees
12 2 Lessee shall pay when due all Taxes which may now or hereafter be imposed upon any
Equipment or its ownership, leasing, rental, sale, purchase, possession or use, upon any Lease or upon
any Rent Payments or any other payments due under any Lease. lf Lessee fails to pay such Taxes when
due, Lessor shall have the right, but not the obligation, to pay such Taxes. lf Lessor pays any such
Taxes, then Lessee shall, upon demand, immediately reimburse Lessor therefor. "Taxes" means present
and future taxes, levies, duties, assessments or other governmental charges that are not based on the
net income of Lessor, whether they are assessed to or payable by Lessee or Lessor, including, without
limitation (a) sales, use, excise, licensing, registration, titling, gross receipts, stamp and personal property
taxes, and (b) interest, penalties or fines on any of the foregoing.
13 R|SK OF LOSS.
'13.'l Lessee bears the entire risk of loss, theft, damage or destruction of any Equipment in whole
or in part from any reason whatsoever ('Casualty Loss"). No Casualty Loss to any Equipment shall
relieve Lessee from the obligation to make any Rent Payments or to perform any other obligation under
any Lease Proceeds of any insurance recovery will be applied to Lessee's obligations under this Section
'13
13.2 lf a Casualty Loss occurs to any Equipment, Lessee shall immediately notify Lessor of the
same and Lessee shall, unless otherwise directed by Lessor, immediately repair the same.
13.3 lf Lessor determines that any item of Equipment has suffered a Casualty Loss beyond repair
("Lost Equipmenf), then Lessee shall either: (a) immediately replace the Lost Equipment with similar
equipment in good repair, condition and working order free and clear of any Liens (except Lessor's Liens)
and deliver to Lessor a bill of sale covering the replacement equipment, in which event such replacement
equipment shall automatically be Equipment under the applicable Lease; or (b) on the next scheduled
Rent Payment date, pay Lessor (i) all amounts owed by Lessee under the appliceble Lease, including the
Rent Payment due on such date plus (ii) an amount equal to the applicable Termination Value set forth in
the Payment Schedule to the applicable Lease. lf Lessee is making such payment with respect to less
than all of the Equipment under a Lease, then Lessor will provide Lessee with the pro rata amount of the
Rent Payment and Termination Value to be paid by Lessee with respect to the Lost Equipment.
13 4 Lessee shall bear the risk of loss for, shall pay directly, and shall defend against any and all
claims, liabilities, proceedings, actions, expenses (including reasonable attorney's fees), damages or
losses arising under or related to any Equipment, including, but not limited to, the possession, ownership,
lease, use or operation thereof. These obligations of Lessee shall survive any expiration or termination of
any Lease. Lessee shall not bear the risk of loss of, nor pay for, any claims, liabilities, proceedings,
actions, expenses (including attorney's fees), damages or losses which arise directly from events
occurring after any Equipment has been returned by Lessee to Lessor in accordance with the terms of the
applicable Lease or which arise directly from the gross negligence or willful misconduct of Lessor.
14, INSURANCE.
14.1 (a) Lessee at its sole expense shall at all times keep all Equipment insured against all risks
of loss or damage from every cause whatsoever for an amount not less than the Termination Value of the
Equipment. Proceeds of any such insurance covering damage or loss of any Equipment shall be payable
to Lessor as loss payee (b) The Total Amount Financed as set forth on the Schedule A-1 does not
include the payment of any premium for any liability insurance coverage for bodily injury andior property
damage caused to others and no such insurance will be purchased by Lessor. (c) Lessee at its sole
expense shall at all times carry public liability and property damage insurance in amounts reasonably
satisfactory to Lessor protecting Lessee and Lessor from liabilities for in.luries to persons and damage to
property of others relating in any way to any Equipment. Proceeds of any such public liability or property
insurance shall be payable first to Lessor as additional insured to the elitent of its liability, and then to
Lessee.
14.2 All insurers shall be reasonably satisfactory to Lessor. Lessee shall promptly deliver to
Lessor satisfactory evidence of required insurance coverage and all renewals and replacements thereof.
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Each insurance policy will require that the insurer give Lessor at least 30 days prior written notice of any
cancellation of such policy and will require that Lessor's interests remain insured regardless of any act,
error, misrepresentation, omission or neglect of Lessee. The insurance maintained by Lessee shall be
primary without any right of contribution from insurance which may be maintained by Lessor
15. PURCHASE OPTION Upon thirty (30) days prior written notice by Lessee to Lessor, and so long as
there is no Event of Default then existing, Lessee shall have the option to purchase all, but not less than
all, of the Equipment covered by a Lease on any Rent Payment due date by paying to Lessor all Rent
Payments then due (including accrued interest, if any) plus the Termination Value amount set forth on the
Payment Schedule to the applicable Lease for such date. Upon satisfaction by Lessee of such purchase
conditions, Lessor shall release its Lien on such Equipment and Lessee shall retain its title to such
Equipment 'AS-lS, WHERE-1S," without representation or warranty by Lessor, express or implied, except
for a representation that such Equipment is free and clear of any Liens created by Lessor
16 LESSEE'S REPRESENTATIONS AND WARRANTIES. With respect to each Lease and its
Equipment, Lessee hereby represents and wanants to Lessor that:
(a) Lessee has full power, authority and legal right to execute and deliver the
perform its obligations under the Lease, and all such actions have been duly authorized
findings and actions of Lessee's governing body;
Lease and to
by appropriate
which
and
(b) the Lease has been duly executed and delivered by Lessee and constitutes a legal, valid and
binding obligation of Lessee, enforceable in accordance with its terms;
(c) the Lease is authorized under, and the authorization, execution and delivery of the Lease
complies with, all applicable federal, state and local laws and regulations (including, but not limited to, all
open meeting, public bidding and property acquisition laws) and all applicable judgments and court
orderc;
(d) the execution, deiivery and performance by Lessee of its obligations under the Lease will not
result in a breach or violation of, nor constitute a default under, any agreement, lease or other instrument
to which Lessee is a party or by which Lessee's properties may be bound or affected;
(e) there is no pending, or to the best of Lessee's knowledge threatened, litigation of any nature
may have a material adverse effect on Lessee's ability to perform its obligations under the Lease;
(f) Lessee is a state, or a political subdivision thereof, as referred to in Section 103 of the Code,
and Lessee's obligation under the Lease constitutes an enforceable obligation issued on behalf of a state
or a political subdivision thereof.
17. TAX COVENANTS. Lessee hereby covenants and agrees that:
(a) Lessee shall comply with all of the requirements of Section 149(a) and Section 149(e) of the
Code, as the same may be amended from time to time, and such compliance shall include, but not be
limited to, keeping a complete and accurate record of any assignments of any Lease and executing and
filing lnternal Revenue Form 8038G or 8038GC, as the case may be, and any other information
statements reasonably requested by Lessor;
(b) Lessee shall not do (or cause to be done) any act which will cause, or by omission of any act
allow, any Lease to be an "arbitrage bond" within the meaning of Section 148(a) of the Code or any Lease
to be a "private activity bond" within the meaning of Section 141(a) of the Code; and
(c) Lessee shall not do (or cause to be done) any act which will cause, or by omission of any act
allow, the interest portion of any Rent Payments to be or become includable in gross income for Federal
income taxation purposes under the Code
(d) lf Lessor either (i) receives notice, in any form, from the IRS; or (ii) reasonably determines,
based on an opinion of independent tax counsel selected by Lessor and approved by Leisee, which
approval Lessee shall not unreasonably withhold, that Lessor may not exclude the interest component of
-b-
any Rent Payment under a Tax-Exempt Lease from federal gross income because Lessee oreact eEOol
covenant contained herein, then Lessee shall pay to Lessor, within thirty (30) days after Lessor notifies
Lessee of such determination, the amount which, with respect to Rent payments previously paid and
taklng into account all penalties, fines, interest and additions to tax (including all federal, state and local
taxes imposed on the interest component of all Rent Payments under such rax-Exempt Lease due
through the date of such event) that are imposed on Lessor as a result of the loss of the exclusion, will
restore to Lessor the same after-tax yield on the transaction evidenced by such rax-Exempt Lease
(assuming tax at the highest marginal corporate tax rate) that it would have realized had the exclusion not
been lost. Additionally, Lessee agrees that upon the occurrence of such an event with respect to a
Tax-Exempt Lease, it shall pay additional rent to Lessor on each succeeding Rent Payment due date in
such amount as will maintain such after{ax yield to Lessor. Lesso/s determination of the amount
necessary to maintain its after-tax yield as provided in this subsection (b) shall be conclusive (absent
manifest error). Notwithstanding anything in a Tax-Exempt Lease to the contrary, any payment that
Lessee is required to make pursuant to this subsection (b) shall be made only from Legally Available
Funds
18 ASSIGNMENT,
18.1 Lessee shall not assign, transfer, pledge, hypothecate, nor grant any Lien on, nor otherwise
dispose of, any Lease or any Equipment or any interest in any Lease or Equipment
'18.2 Lessor may assign its rights, tltle and interest in and to any Lease or any Equlpment, and/or
may grant or assign a security interest in any Lease and its Equipment, in whole or in part, to any party at
any time. Any such assignee or lien holder (an'Assignee') shall have all ofthe rights of Lessor under the
applicable Lease. LESSEE AGREES NOT TO ASSERT AGATNST ANY ASSTGNEE ANy CLA|MS,
ABATEMENTS, SETOFFS, COUNTERCLAIMS, RECOUPMENT OR ANY OTHER SIMILAR
DEFENSES WHICH LESSEE MAY HAVE AGAINST LESSOR. Unless otherwise agreed by Lessee in
writing, any such assignment transaction shall not release Lessor from any of Lessofs obligations under
the applicable Lease. An assignment or reassignment of any of Lessor's right, title or interest in a Lease
or its Equipment shall be enforceable against Lessee only after Lessee receives a written notice of
assignment which discloses the name and address of each such Assignee. Lessee shall keep a
complete and accurate record of all such assignments in the form necessary to comply with Section
149(a) of the Code. Lessee agrees to acknowledge in writing any such assignments if so requested.
18 3 Each Assignee of a Lease hereby agrees that: (a) the term Secured Obligations as used in
Section 8.3 hereof is hereby amended to include and apply to all obligations of Lessee under the
Assigned Leases and to exclude the obligations of Lessee under any Non-Assigned Leases; (b) said
Assignee shall have no Lien on, nor any claim to, nor any interest of any kind in, any Non-Assigned
Leases; and (c) Assignee shall exercise its rights, benefits and remedies as the assignee of Lessor
(including, without limitation, the remedies under Section 20 of the Master Lease) solely with respect to
the Assigned Leases "Assigned Leases" means only those Leases which have been assigned to an
Assignee pursuant to a written agreement; and "Non-Assigned Leases" means all Leases excluding the
Assigned Leases.
18.4 Subject to the foregoing, each Lease inures to the beneflt of and is binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
19. EVENTS OF DEFAULT For each Lease, "Event of Default'means the occurrence of any one or
more of the following events as they may relate to such Lease: (a) Lessee fails to make any Rent
Payment (or any other payment) as it becomes due in accordance with the terms of the Lease, and any
such failure continues for ten (10) days after the due date thereofi (b) Lessee fails to perform or observe
any of its obligations under Sections 12.1, 14 ot 18.1 hereof; (c) Lessee fails to perform or observe any
other covenant, condition or agreement to be performed or observed by it under the Lease and such
failure is not cured within thirty (30) days after receipt of written notice thereof by Lessor; (d) any
statement, representation or wananty made by Lessee in the Lease or in any writing delivered by Lessee
pursuant thereto or in connection therewith proves at any time to have been false, misleading or
erroneous in any material respect as of the time when made; (e) Lessee applies for or consents to the
appointment of a receiver, trustee, conservator or liquidator of Lessee or of all or a substantial part of its
7
E05
assets, or a petition for relief is filed by Lessee under any federal or state bankruptcy, insolvency or
similar law, or a petition in a proceeding under any federal or state bankruptcy, insolvency or similar law is
filed against Lessee and is not dismissed within sixty (60) days thereafter; or (f) Lessee shall be in default
under any other Lease or under any other financing agreement executed at any time with Lessor.
20. REMEDIES. lf any Event of Default occurs, then Lessor may, at its optron, exercise any one or more
of the following remedies:
(a) Lessor may require Lessee to pay (and Lessee agrees that it shall pay) all amounts then
currently due under all Leases and all remaining Rent Payments due under all Leases during the fiscal
year in effect when the default occurs together with interest on such amounts at the highest lawful rate
from the date of Lessor's demand for such payment.
(b) Lessor may require Lessee to promptly return all Equipment to Lessor in the manner set forth
in Section 21 (and Lessee agrees that it shall so return the Equipment), or Lessor may, at its option, enter
upon the premises where any Equipment is located and repossess such Equipment without demand or
notice, without any court order or other process of law and without liability for any damage occasioned by
such repossession,
(c) Lessor may sell, lease or otherwise dispose of any Equipment, in whole or in part, in one or
more public or private transactions, and if Lessor so disposes of any Equipment, then Lessor shall retain
the entire proceeds of such disposition free of any claims of Lessee, provided, that the net proceeds of
any such disposition shall be applied to amounts payable by Lessee under clause (a) above of this
Section only to the extent that such net proceeds exceed the applicable Termination Value set forth in the
applicable Schedule A-1 ;
(d) Lessor may terminate, cancel or rescind any Lease as to any and all Equipment;
(e) Lessor may exercise any other right, remedy or privilege which may be available to Lessor
under applicable law or, by appropriate court action at law or in equity, Lessor may enforce any of
Lessee's obligations under any Lease; and/or
(0 Lessor may require Lessee to pay (and Lessee agrees that it shall pay) all out-of-pocket costs
and expenses incurred by Lessor as a result (directly or indirectly) of the Event of Default and/or of
Lessor's actions under this section, including, without limitation, any attorney fees and expenses and any
costs related to the repossession, safekeeping, storage, repair, reconditioning or disposition of any
Equipment.
None of the above remedies is exclusive, but each is cumulative and in addition to any other remedy
available to Lessor. Lessods exercise of one or more remedies shall not preclude its exercise of any
other remedy. No delay or failure on the part of Lessor to exercise any remedy under any Lease shall
operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise
of any remedy preclude any other exercise thereof or the exercise of any other remedy.
21. RETURN OF EQUIPMENT. lf Lessor is entitled under the provisions of any Lease, including any
termination thereof pursuant to Sections 6 or 20 of this Master Lease, to obtain possession of any
Equipment or if Lessee is obligated at any time to return any Equipment, then (a) title to the Equipment
shall vest in Lessor immediately upon Lessors notice thereof to Lessee, and (b) Lessee shall, at its sole
expense and risk, immediately de-install, disassemble, pack, crate, insure and return the Equipment to
Lessor (all in accordance with applicable industry standards) at any location in the continental United
States selected by Lessor. Such Equipment shall be in the same condition as when received by Lessee
(reasonable wear, tear and depreciation resulting from normal and proper use excepted), shall be in good
operating order and maintenance as required by the applicable Lease, shall be free and clear of any
Liens (except Lessor's Lien) and shall comply with all applicable laws and regulations. Until Equipment is
returned as required above, all terms of the applicable Lease shall remain in full force and effect
including, without limitation, obligations to pay Rent Payments and to insure the Equipment. Lessee
agrees to execute and deliver to Lessor all documents reasonably requested by Lessor to evidence the
transfer of legal and beneficial title to such Equipment to Lessor and to evidence the termination of
Lessee's interest in such Equipment.
-8-
22. LAW GOVERNING. Each Lease shall be governed bythe laws of the state of th" ,""""" ??un"
"State").
23. NOTICES All notices to be given under any Lease shall be made in writing and either personally
delivered or mailed by certified mail to the other party at its address set forth herein or at such address as
the party may provide in writing from time to time. Any such notices shall be deemed to have been
received five (5) days subsequent to mailing if sent by regular or certified mail, or on the next business
day if sent by overnight courier, or on the day of delivery if delivered personally.
24. FINANCIAL INFORMATION; INDEMNITY; POWER OF ATTORNEY. Within thirty (30) days of their
completion in each fiscal year of Lessee during any Lease Term, Lessee will deliver to Lessor upon
Lessor's request the publicly available annual financial information of Lessee. To the extent permitted by
law, Lessee shall indemnify, hold harmless and, if Lessor requests, defend Lessor and its shareholders,
affiliates, employees, dealers and agents against all Claims directly or indirectly arising out of or
connected with (a) the manufacture, installation, use, lease, possession or delivery of the Equipment, (b)
any defects in the Equipment, any wrongful act or omission of Lessee, or its employees and agents, or (c)
any claims of alleged breach by Lessee of this Master Lease or any related document. "Claams' means
all losses, liabilities, damages, penalties, expenses (including attorney's fees and costs), claims, actions
and suits, whether in contract, tort or otherwise. Lessee hereby appoints Lessor its true and lawful
attorney-in-fact (with full power of substitution) to prepare any instrument, certificate of title or financing
statement covering the Equipment or otherwise protecting Lessofs interest in the Equipment, to sign
Lessee's name with the same force and effect as if signed by Lessee, and to file same at the proper
location(s)i and make claims for, receive payment of, and execute and endorse all documents, checks or
drafts for loss, theft, damage or destruction to the Equipment under any insurance.
25, ANTI.MONEY LAUNDERING'INTERNATIONAL TRADE LAWCOMPLIANCE
Lessee represents and warrants to Lessor, as of the date of this Master Lease, the date of each
advance of proceeds pursuant to this Master Lease, the date of any renewal, extension or modification of
this Master Lease or any Lease, and at all times until this Master Lease and each Lease has been
terminated and all amounts thereunder have been indefeasibly paid in full, that: (a) no Covered Entity (i)
is a Sanctioned Person; (ii) has any of its assets in a Sanctioned Country or in the possession, custody or
control of a Sanctioned Person; or (iii) does business in or with, or derives any of its operating income
from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any
law, regulation, order or directive enforced by any Compliance Authority; (b) the proceeds of any Lease
will not be used to fund any operations in, finance any investments or activities in, or, make any payments
to, a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive
enforced by any Compliance Authority; (c) the funds used to repay any Lease are not derived from any
unlawful activityi and (d) each Covered Entity is in compliance with, and no Covered Entity engages in
any dealings or transactions prohibited by, any laws of the United States, including but not limited to any
Anti-Terrorism Laws Lessee covenants and agrees that it shall immediately notify Lessor in writing upon
the occurrence of a Reportable Compliance Event.
As used herein: "Anti-Terrorism Laws' means any laws relating to terrorism, trade sanctions
programs and embargoes, imporuexport licensing, money laundering, or bribery, all as amended,
supplemented or replaced from time to time; "Compliance Authority" means each and all of the (a) U S.
Treasury DepartmenUOfflce of Foreign Assets Control, (b) U.S. Treasury DepartmenuFinancial Crimes
Enforcement Network, (c) U.S. State DepartmenuDirectorate of Defense Trade Controls, (d) U.S.
Commerce DepartmenuBureau of lndustry and Security, (e) U.S lnternal Revenue Service, (0 U.S.
Justice Department, and (g) U S. Securities and Exchange Commission; "Covered Entity" means Lessee,
its affiliates and subsidiaries, all guarantors, pledgors of collateral, all owners of the foregoing, and all
brokers or other agents of Lessee acting in any capacity in connection with this Master Lease or any
Lease; "Reportable Compliance Event" means that any Covered Entity becomes a Sanctioned Person, or
is indicted, arraigned, investigated or custodially detained, or receives an inquiry from regulatory or law
enforcement officials, in connection with any Anti-Terrorism Law or any predicate crime to any Anti-
Terrorism Law, or self-discovers facts or circumstances implicating any aspect of its operations with the
actual or possible violation of any Anti-Terrorism Law; "Sanctioned Country" means a country subject to a
sanctions program maintained by any Compliance Authority, and "Sanctioned person" means any
individual person, group, regime, entity or thing listed or otherwise recognlzed as a specially designated,
prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including
o
E05
but not limited to the blocking of property or rejection of transactions), under any order or directive of any
Compliance Authority or otheMise subject to, or specially designated under, any sanctions program
maintained by any Compliance Authority
26. USA PATRIOT AGT NOTICE.
To help the govemment flght the funding of tenorism and money laundering activities, Federal law requires
all financial institutions to obtain, venfy and record information that identifies each lessee that opens an
account. What this means: when Lessee opens an account, Lessor will ask for the business name,
business address, taxpayer identifying number and other information that will allow Lessor to identify
Lessee, such as organizational documents. For some businesses and organizations, Lessor may also need
to ask for identifying information and documentation relating to certain individuals associated with the
business or organization.
27. SECTION HEADINGS. All section headings contained herein or in any Schedule are for convenience
of reference only and do not define or limit the scope of any provision of any Lease.
28. EXECUTION lN COUNTERPARTS Each Schedule to this Master Lease may be executed in
several counterparts, each of which shall be deemed an original, but all of which shall be deemed one
instrument. Only one counterpart of each Schedule shall be marked 'Lessor's Original" and all other
counterparts shall be deemed duplicates. An assignment of or security interest in any Schedule may be
created through transfer and possession only of the counterpart marked "Lessofs Original."
29. ENTIRE AGREEMENT; WRITTEN AMENDi,IENTS. Each Lease, together with the exhibits attached
thereto and made a part hereof and other attachments thereto, aod other documents or instruments
executed by Lessee and Lessor in connection therewith, constitute the entire agreement between the
parties with respect to the lease of the Equipment covered thereby, and such Lease shall not be modified,
amended, altered, or changed except with the written consent of Lessee and Lessor. Any provision of
any Lease found to be prohibited by law shall be ineffective to the extent of such prohibition without
invalidating the remainder of the Lease.
30, HEAVY.DUW VEHICLE GREENHOUSE GAS EMISSION REDUCTION REGULATION,
(a) lf the equipment leased pursuant to the Lease is a tractor, the Lessee of this heavy-duty
tractor understands that when using a heavy-duty tractor to pull a s3joot or longer box-type trailer on a
highway within California, the heavy-duty tractor must be compliant with sections 95300-95312, title 17.
California Code of Reoulations, and that it is the responsibility of the Lessee to ensure this heavyduty
tractor is compliant. The regulations may require this heavy{uty tractor to have low-rolling-resistance
tires that are U.S. Environmental Protection Agency (U.S. EPA) Smartway Verified Technologies prior to
current or future use in California, or may entirely prohibit use of thrs tractor in California if it is a model
yea( 2011 or later tractor and is not a U.S. EPA Smartway Certified Tractor.
(b) lf the equipment leased pursuant to the Lease is a trailer, the Lessee of this box-type trailer
understands that when using a heavy{uty tractor to pull a 53joot or longer box-type trailer on a highway
within California, the box-type trailer must be compliant with sections 95300-95312. title 17. California
Code of Reoulations, and that it is the responsibility of the Lessee to ensure this box-type trailer is
compliant. The regulations may require this trailer to have low-rolling-resistance tires and aerodynamic
technologies that are U.S. Environmental Protection Agency Smartway Verified Technologies prior to
current or future use in California.
(c) Notwithstanding anything in the Lease to the contrary, the Lease does not prohibit the Lessee
from modifying the trailer, at Lessee's cost, to be compliant with the requirements of the California Heavy-
Duty Vehicle Greenhouse Gas Emission Reduction Regulation.
31. IMPORTANT INFORMATION ABOUT PHONE CALLS. By providing telephone number(s) to
Lessor, now or at any later time, Lessee authorizes Lessor and its afflliates and designees to contact
Lessee regarding Lessee account(s) with Lessor or its affiliates, whether such accounts are Lessee
individual accounts or business accounts for which Lessee is a contact, at such numbers using any
means, including but not limited to placing calls using an automated dialing system to cell, VolP or other
wireless phone number, or leaving prerecorded messages or sending text messages, even if charges
-10-
E05
may be incuned for the calls or text messages. Lessee consents that any phone call with Lessor may be
monitored or recorded by Lessor.
Citv of Vernon
("Lessee")
Oshkosh Capital
("Lessol')
By:-
Tifle:
4305 Santa Fe Ave
Vernon, CA 90058
155 East Broad Street, 84-8230-05-7
Columbus, OH 43215
- 11 -
E28
LEASE SCHEDULE NO. 191184000
Dated As Of July 24, 2015
This Lease Schedule (this "Schedule") is attached and made a part of the Master Lease-Purchase
Agreement referenced below, together with all exhibits, schedules, addenda, and other attachments thereto,
executed by Lessee and Lessor (the'Lease') Unless otherwise defined herein, capitalized terms will have the
same meaning ascribed to them in the Master Lease. All terms and conditions of the Master Lease are
incorporated herein by reference. To the extent that there is any conflict between the terms of the Lease and
this Schedule, the terms of this Schedule shall control
Master Lease-Purchase Agreement daled July 24, 2015
1. EQUIPMENT DESCRIPTION. As used in the Lease, "Equipment" means all of the property described in
Schedule A-1 attached to this Schedule and all attachments, additions, accessions, parts, repairs,
improvements, replacements and substitutions thereto.
2. RENTAL PAYMENTS; LEASE TERM. The Rental Payments to be paid by the Lessee to Lessor, the
commencement date thereof and the lease term of this Lease Schedule are set forth on the Schedule A-1
attached to this Lease Schedule.
3 ESSENTIAL USE; CURRENT INTENT OF LESSEE. Lessee represents that the use of the Equipment is
essential to Lessee's proper, efficient and economic functioning or to the services that Lessee provides to its
citizens and the Equipment will be used by Lessee only for the purpose of performing its governmental or
proprietary functions consistent with the permissible scope of its authority. Lessee currently intends for the
full Lease Term: to use the Equipment; to continue this Lease: and (if applicable) to make Rent Payments if
funds are appropriated in each fiscal year by its governing body.
4. ACCEPTANCE OF EQUIPMENT. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT (A)
LESSEE HAS RECEIVED AND INSPECTED ALL EOUIPMENT; (B) ALL EQUIPMENT IS IN GOOD
WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS, CONTRACTS AND
SPECIFICATTONS, (C) LESSEE ACCEPTS ALL EQU|PMENT FOR PURPOSES OF THE LEASE "AS-|S,
WHERE IS,,i AND (D) LESSEE WAIVES ANY RIGHT TO REVOKE SUCH ACCEPTANCE.
5, BANK QUALIFIED. LESSEE CERTIFIES THAT IT HAS DESIGNATED THIS LEASE AS A OUALIFIED
TM-EXEMPT OBLTGATTON rN ACCORDANCE W|TH SECTTON 265(bX3) OF THE CODE, THAT tT HAS
NOT DESIGNATED MORE THAN $1O,OOO,OOO OF ITS OBLIGATIONS AS QUALIFIED TAX.EXEMPT
OBLIGATIONS IN ACCORDANCE WITH SUCH SECTION FOR THE CURRENT CALENDAR YEAR AND
THAT IT REASONABLY ANTICIPATES THAT THE TOTAL AMOUNT OF TAX-EXEMPT OBLIGATIONS
TO BE ISSUED BY LESSEE DURING THE CURRENT CALENDAR YEAR WILL NOT EXCEED
$10,000,000.
6 RE-AFFIRMATION OF THE MASTER LEASE-PURCHASE AGREEMENT. Lessee hereby re-affirms all of
its representations, warranties and obligations under the Master Lease Purchase Agreement (including,
without limitatron, its obligation to pay all Rental Payments, its disclaimers in Section 7 thereof and its
representations in Section 6.'l and 16 thereof).
Citv of Vernon
("Lessee")
Oshkosh Caoital
("Lessoi')
ByBy:
T tleTifle
1. EQUIPMENT LOCATION & DESCRIPTION:
City of Vernon
Schedule A-1
E28
Julv 24.2015
$1.263,243.00
$108.827.82
$0.00
$94-824_Q9
$3,789.67
$1.321,836.49
4305 S. Santa Fe Ave
Vernon CA 90058
2800 S. Soto Street
Vernon, CA 90058
Los Angeles County
2016 Pierce PUC Triple Combinatin Pumper VIN#
2016 Pierce PUC Triple Combinatin Pumper VIN#
LEASE PAYMENT SCHEDULE.
(a) Accrual Date:
(b) Amount Financed:
i. Equipment Purchase Price
Sales Tax
ii. Purchase Price Dedution
Prepay Oiscounts
Performance Bond
... Total Amount Financed (Cash Sale Price minuslll Purchase Price Deductions)
E2A
(c) Payment Schedule:
Accrual Date: Julv 24.2015
Rent Payment
Number
I
2
3
4
5
5
7
8
9
10
CiW of Vernon
("Lessee")
Rent Payment
Date
7124/2016
7 /24/2077
7 /2412018
7 /24/2079
7 /24/2O2O
7 /2412O2L
7/24/2022
7 /24/2023
7 /24/2024
7 /24/2O2s
Rent Payment
Amount
158,059.45
158,059.45
158,059.45
158,059.45
158,059.45
158,059.45
1s8,059.45
158,059.45
158,059.45
158,059.45
lnterest
Portion
44,870.26
40,971.71
37,OOL.82
32,897.96
28,654.99
24,268.L8
L9,732.65
L5,O43.37
10,195.13
5,182.54
Principal Portion
Lr3,249.19
777 ,O8a.34
r2t,057.63
L25,L67.49
129,404.46
L33,797.27
138,326.80
143,015.08
147,864.32
152,876.97
Termination
Value
7,244,8M.92
1,,L24,243.93
999,554.57
870,538.24
737,351.64
599,545.53
457 ,070.03
309,763.47
757 ,463.22
1.00
Oshkosh Caoital
("Lessol')
By:By
Tte
E78
VEHICLE SCHEDULE ADDENDUM
Dated As Ot Julv 24.2015
Lease Schedule No. 191184000Dated Julv 24. 2015
Lessee: City of Vernon
Reference is made to the above Lease Schedule ("Schedule") to the Master Lease-Purchase
Agreement identified in the Lease Schedule ("Master Lease") by and between Oshkosh Capital ('Lesso/')
and the above Lessee ("Lessee"). This Addendum amends and modifies the terms and conditions of the
Schedule and is hereby made a part of the Schedule. Unless otheMise defined herein, capitalized terms
defined in the Master Lease shall have the same meaning when used herean.
NOW THEREFORE, as part of the valuable consideration to induce the execution of the
Schedule, Lessor and Lessee hereby agree to amend the Schedule as follows:
1 ln the event that any unit of Equipment covered by the Schedule is a vehicle or trailer under
applicable State law, then the following provisions shall also apply to the Schedule to the extent permitted
by law,
(a) each manufactureis statement of origin and certificate of title shall state that Lessor has the
first and sole lien on or security interest in such unit of Equipment;
(b) the public liability and property damage insurance required by the terms of the paragraph titled
"lnsurance in the Master Lease shall be in an amount not less than $1.000.000.00 per person insured and
$2.000.000.00 combined single limit per unit per occurrence (provided, that if the unit of Equipment is a
bus or other passenger vehicle, then such insurance amount shall be such larger amount as may be
reasonably required by Lessor) and $1.000.000.00 for damage to property of others;
(c) Lessee shall furnish and permit only duly licensed, trained, safe and qualified drivers to
operale any such unit of Equipment, and such drivers shall be agents of Lessee and shall not be agents
of Lessor; and
(d) Lessee shall cause each such unit of Equipment to be duly registered and licensed as
required by applicable State law with Lessor noted as lien holder and Lessee as owner.
2. Except as expressly amended by this Addendum and other modifications signed by Lessor,
the Schedule remains unchanged and in full force and effect
lN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date first referenced
above.
Citv of Vernon
("Lessee")
Oshkosh Caoital
("Lessoa')
ByBy:
Tifle:
E21
RESOLUTION
Municipality/Lessee: CitvofVemon
Principal Amount Expected To Be Financed:$1 ,321,836 49
WHEREAS, the Municipality is a political subdivision of the State in which Municipality is located (the
"State") and is duly organized and existing pursuant to the Constitution and laws of the State.
WHEREAS, pursuant to applicable law, the governing body of the Municipality ("Governing Body") is
authorized to acquire, dispose of and encumber real and personal property, including, without limitation,
rights and interest in property, leases and easements necessary to the functions or operations of the
Municipality.
WHEREAS, the Governing Body hereby finds and determines that the execution of one or more Master
Lease-Purchase Agreements ("Leases") in the principal amount not exceeding the amount stated above
for the purpose of acquiring the property ("Equipment") to be described in the Leases is appropriate and
necessary to the functions and operations of the Municipality.
WHEREAS, Oshkosh Capital ('Lessor'') shall act as Lessor under said Leases.
NOW, THEREFORE, Be lt Ordained by the Governing Body of the Municipality:
Section 1. Either one of the (each an
"Authorized Representative") acting on behalf of the Municipality, is hereby authorized to negotiate, enter
anto, execute, and deliver one or more Leases in substantially the form set forth in the document presently
before the Governing Body, which document is available for public inspection at the office of the
Municipality. Each Authorized Representative acting on behalf of the Municipality is hereby authorized to
negotiate, enter into, execute, and deliver such other documents relating to the Lease as the Authorized
Representative deems necessary and appropriate. All other related contracts and agreements necessary
and incidental to the Leases are hereby authorized.
Section 2. By a written instrument signed by any Authorized Representative, said Authorized
Representative may designate specifically identified officers or employees of the Municipality to execute
and deliver agreements and documents relating to the Leases on behalf of the Municapality.
Section 3. The aggregate original principal amount of the Leases shall not exceed the amount stated
above and shall bear interest as set forth in the Leases and lhe Leases shall contain such ootions to
purchase by the Municipality as set forth therein.
Section 4. The Municipality's obligations under the Leases shall be subject to annual appropriation or
renewal by the Governing Body as set forth in each Lease and the Municipality's obligations under the
Leases shall not constitute general obligations of the Municipality or indebtedness under the Constitution
or laws of the State.
Section 5. As to each Lease, the Municipality reasonably anticipates to issue not more than $10,000,000
of tax-exempt obligations (other than "private activity bonds" which are not'qualifled 501(cX3) bonds")
during the current calendar year in which each such Lease is issued and hereby designates each Lease
as a qualifled tax-exempt obligation for purposes of Section 265(b) of the lnternal Revenue Code of 1986,
as amended.
e24
Section 6. This resolution shall take effect immediately upon its adoption and approval.
ADOPTED AND APPROVED on this 2015.
The undersigned Secretary/Clerk of the above-named Municipality hereby certifies and attests that the
undersigned has access to the official records of the Governing Body of the Municipality, that the
foregoing resolutions were duly adopted by said Governing Body of the Municipality at a meeting of said
Governing Body and that such resolutions have not been amended or altered and are in full force and
effect on the date stated below.
LESSEE: Citv of Vernon
ISEAL]
Signature of Secretary/Clerk of Municipality
Print Name:
Official Title:
Date:
001 1145120 3
6
El-l
CERTIFICATE OF INCUMBENCY
Lessee: Citv of Vernon
Lease Schedule No.: 191 184000 Dated: Julu 24.2015
l, the undersigned Secretary/Clerk identified below, do hereby certify that I am the duly elected or
appointed and acting Secretary/Clerk of the above Lessee (the 'Lessee"), a political subdivision duly
organized and existing under the laws of the State where Lessee is located, that I have the title stated
below, and that, as of the date hereof, the individuals named below are the duly elected or appointed
offlcers of the Lessee holding the offices set forth opposite their respective names.
[NOTE: Use same titles as Authorized Representatives stated in Resolutions.l
Name Title Signature
Name Title Signature
lN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of such
Lessee as of the date set forth below.
ISEALI
Signature of Secretary/Clerk of Lessee
Print Name:
Official Title:
Date:
B,T
FORM OF OPINION OF COUNSEL
(To Be Typed on Attomey's Letterhead Stationary)
Date:
Lessee: Citv of Vemon
Lessor: Oshkosh Capital
Re: Lease Schedule No. 191184000 dated Juiv 24. 2015. together with its Master Lease-Purchase
Agreement dated Julv 24. 2015, by and between the above-named Lessee and the above-named
Lessor
Gentlemen:
I have acled as counsel to Lessee with respect to the Lease Schedule, lhe Master Lease-Purchase
Agreemeni and all other agreements described above or related thereto (collectively, the 'Agreements') and various
related matters, and in this capacity have reviewed a duplicate original or certified copy of the Agreements and such
other documents as I have deemed necessary for the purposes of this opinion.
Based upon the examination of such documents, it is my opinion that;
1. Lessee is a politic€l subdivision of the State of California (the "State") duly organized, existing and operating
under the Constitution and laws of the State.
2. Lessee is authorized and has power under State law to enter inlo all of the Agreements, and to carry out its
obligations thereunder and the transactions contemplated thereby.
3. The Agreements and all other documents related thereto have been duly authorized, approved, and executed by
and on behalf of Lessee, and each of the Agreements is a valid and binding contracl of Lessee enforceable in
accordance with its terms, except to the extent limited by State and Federal law affecting sedito/s remedies and
by bankruptcy, reorganization or other lar/vs of general application relating to or affecting the enforcement of
creditors' rights.
4. The authorization, approval and execution of the Agreements and all other proceedings of Lessee relating to the
transactions contemplated thereby have been performed in accordance with all applicable Local, State and
Federal laws (including open meeting laws and public bidding and property acquisition laws)-
5 To the best of my knowledge, there is no litigation or proceeding pending before any court, administrative agency
or governmental body, that challenges; the organization or existence of Lessee; the authority of its officers; the
proper authorization; approval and execution of any of the Agreements or any documents relating ihereto; the
appropriation of monies to make payments under the Agreemenls for the cunent fscal year; or the ability of
Lessee otherwise to perform its obligations under the Agreements and the transactions contemplated thereby.
6. Lessee is a political subdivision of the State as referred to in Section 103 of the lntemal Revenue Code of 1986,
as amended, and the related regulations and rulings thereunder
Lessor, its Assignee and any of their assigns may rely upon this opinion.
Very truly yours,
Attomey
I01
INSURANCE COVERAGE DISCLOSURE
Oshkosh Caoital. LESSOR
Citv of Vernon , LESSEE
RE: INSURANCECOVERAGEREQUIREMENTS
'1. ln accordance with the Lease Schedule ("Schedule") to the Master Lease-Purchase Agreement
identifled in the Lease Schedule ("Master Lease"), Lessee certifies that it has instructed the insurance
agent named below (please fill in name, address, and telephone number):
to issue: (check to indicate coverage)
a. All Risk Physical Damage lnsurance on the leased Equipment evidenced by a Certificate of lnsurance
and Long Form Loss Payable Clause naming Oshkosh Capital and/or its assigns as Loss Payee.
Coverage Required: Termination Value Specified
b. Public Liability lnsurance evidenced by a Certificate of lnsurance naming Oshkosh Capital and/or its
assigns as an Additional lnsured.
Minimum Coverage Required:
$1,000,000 00 per person
$2,000,000.00 aggregate bodily injury liability
$1,000,000.00 property damage liability
Proof of insurance coverage will be provided to Oshkosh Capital, 155 East Broad Street, 84-8230-05-7,
Columbus, OH 43215, prior to the time that the property is delivered to Lessee.
OR
2. Pursuant to the Master Lease, Lessee represents and warrants, in addition to other matters under the
Agreement, that it is lawfully self-insured for: (check to indicate coverage)
a. All risk, physical damage in the amount specified in 1(a) above.
b Public liability for not less than the amounts specified in 1(b) above.
Lessee has attached a signed letter describing self-insurance.
LESSEE: City of Vernon
Tit eBy
01
INSURANCE INFORMATION
Please provide the following information to your insurance company to help
expedite receipt of the necessary coverage:
ITEMS WHICH NEED TO BE REFLECTED ON INSURANCE CERTIFICATE:
. Oshkosh Capital must be named Loss Payee and Additional lnsured
. 30 Days Notice of Cancellation
. Not Less than $2,000,000.00 limits on liability
. Certificate must reflect a short equipment description
. Ce(ificate must reflect an expiration date
Certificate Holder lnformation :
Oshkosh Capital, its successors and/or all assigns
155 East Broad Street, 84-8230-05-7
Columbus, OH 43215
Please send a FAX copy of certificate to Cheryl Kennedy at 1-800-678-0602.
The original should be mailed to the same at:
Oshkosh Capital
155 East Broad Street, 8,4-8230-05-7
Columbus, OH 43215
Please call Cheryl Kennedy at 1-800-820-9041, ext.4, ifyou have any questions.
THREE PARTY AGREETIENT
Dated as of Julv 24. 2015
" Lessee' means QiEgl]@g!
.scheduH means Lease Schedule No. 191184000 Dated Julv 24, 2015, together wiih its schedule A-1 ,
Reference is made to the Lease Schedule ('Schedule') and to the Master Leas+Purchase
Agreement ('Master Lease') identified in said Lease Schedule, described above between Oshkosh
Capital ("Lessor') and the Lessee identified above which relates to Equipment described in Schedule A-'l
to the Lease Schedule attached therein ('Equipmenf) to be supplied by Pjglge-tvle4hstuilS-Ec.
('supplier"). For good and valuable consideration, receipt of which is hereby acknowledged, Lessee,
Lessor and Supplier hereby agree as follows:
'1- Notwithsbnding anything to the contary in the Lease Schedule, Lessee hereby notifies Lessor that
lhe Equipment has not yet been delivered to Lessee and the Equipment has not yet been accelted by
Lessee for purposes of the Lease Schedule. Lessee agrees to execute and deliver to Lessor a Delvery
and Acceptance Certificate in the torm attached hereto as Exhibit A upon the circumstances set forth in
said Certificate.
2. All parties hereto agree that the Purchase Price of the Equipment shall be as set forth below if said
Purcfiase Price is paid on or before the Advance Payment Date set iorth below:
3. Upon execution of the Lease Schedule and delivery oi all documents relating thereto required by
Lessor, Lessee agrees that ii shall pay the Lessee Down Payment sEted below and Lessor agrees that it
shatl pay the balance of the Purchase Price (the'Amount Financed") stated beloyv. Lessee agrees that
the Lease Term and Lessee's obligation to pay Rent Payments shall commenc€ on the date set forth in
the Lease Schedule notwithsEnding the delivery of the Equipment at a later date.
Purchase Price:
Sales Tax:
Performanc€ Bond
Vendor Dbcounts:
Advance Payment Date:
Les-see Down Payment:
Trade ln:
Arnount Financed:
$1203243,0S
$108.827.82
$3J99_02
$!4-824-0q
Julv 24.2015
$0.00
$0.Q9
$112L990.49
4. (a) Supplier anticipates that it shall delive. the Equipment to Lessee by the Anticipated Delivery
Date set forth below.
Anticipated Delivery Date:June 24. 2016
(b) Supplier hereby agrees that it shall deliver the Equipment to Lessee no later than the Outside
Delivery Date set forth below and that such Equipment shall comply with all specificalions and
requiremenb of Lessee and with the terms and conditions of any purchase order/purchase
agreement relating thereto.
Outside Delivery Date:Auoust 24. 2016
5. lf for any reason whatsoever Supplier fails to comply with its agreements set brth in subParagraPh
4(b) of this Agreement by the Outside Delivery Date for any piece of Equipment (the "Delayed
E2E
E28
(a) On the first business day after the Outside Delivery Date, Supplier shall pay to Lessee the Lessee
Down Payment for the Delayed Equipment plus interest at the Prime Rate plus one percent (1%)
per annum from the Advance Payment Date to the date of such payment;
(b) On the first business day after the Outside Delivery Date, Supplier shall pay to Lessor for the
Delayed Equipment the Amount Financed plus interest at the Prime Rate plus one percent (1%)
per annum from the Advance Payment Date to the date of such payment; and
(c) "Prime Rate' means the prime rate of interest as published from time to time in the Wall Street
Journal.
lf there is more than one piece of Equipment subject to the Lease, and some of the Equipment is
delivered in accordance with subparagraph 4(b) of this Agreement, the payments owed pursuant to the
Lease shall be modified to reflect only the obligations due on the Equipment that was delivered pursuant
to subparagraph 4(b) of this Agreement. The new payment obligation will be determined based on the
amount financed for the Equipment delivered to the Lessee, and based on the interest rate in effect as of
the date of Lease commencement.
6. lf Supplier makes the payments desc bed in paragraph 5 above for the Delayed Equipment under
the circumstances set forth above and if Lessee has otherwise paid and performed its obligations under
the Lease Schedule as of such payment date for the Delayed Equipment, then Lessee and Lessor agree
that the Lease Schedule shall terminate as of the date of such payments by Supplier as to the Delayed
Equipment only. Lessee's obligations shall continue unabated for the Equipment that was delivered
pursuant to subparagraph 4(b) of this Agreement.
7. Supplier agrees that a Performance Bond will be issued which names the Supplier as Principal, the
Lessee as Obligee and the Lessor as Addational Obligee. This Performance Bond will apply solely to the
terms and conditions of the purchase order/purchase agreement, including related equipment
speciflcations and warranties, as issued by the lessee and accepted by the Supplier. The'Contract
Date" referred to in the Performance Bond shall be the date of the Three Party Agreement. Except as
expressly set forth herein, the Lease Schedule and the terms and conditions of the purchase
order/purchase agreement for the equipment remain unchanged and in full force and effect.
8. Except as expressly set forth herein, the Lease Schedule and terms and conditions of the purchase
order/purchase agreement for the Equipment remain unchanged and in full force and effect.
lN WITNESS WHEREOF, the duly authorized officers of the parties set forth below hereby
execute and deliver this Agreement as of the date first written above
Citv of Vernon
("Lessee")
Oshkosh Caoital
("Lessor")
ByBy
By:
Pierce Manufacturinq lnc.
("Suppliei')
Title:
Exhibit A
DELIVERY & ACCEPTANCE CERTIFICATE
Lease Schedule No. 191184000
Reference is made to the above Lease Schedule ("Schedule"), which has been executed and
delivered by the undersigned Lessee ("Lessee') and Oshkosh Capital ("Lesso/). This Certificate amends
and supplements the terms and conditions of the Lease Schedule and is hereby made a part of the Lease
Schedule. Unless otherwise def,ned herein, capitalized terms defined in the Master Lease-Purchase
Agreement and the Lease Schedule shall have the same meaning when used herein; provided, that
'Equipmenf shall mean the Equipment described in the Schedule A-1 and in any attachment or exhibit to
this Certificate.
Notwithstanding anything to the contrary, expressed or implied, in the Lease Schedule or its
Schedule A-1, Lessee agrees as follows:
1. ACCEPTANCE OF EQUIPMENT. As of the Acceptance Date stated below and as between Lessee
and Lessor, Lessee hereby agrees that (a) Lessee has received and inspected all Equipment; (b) all
Equipment is in good working order and complies with all purchase orders, contracts and
speciflcations; (c) Lessee a@pts all Equipment for purposes of the Lease "as-is, where-is'; and (d)
Lessee waives any right to revoke such acceptance.
ACCEPTANCE DATE:
RENT PAYMENTS. Lessee hereby agrees that Lessee will pay the Rent Payments for the
Equipment in the amounts and on the dates specified in Schedule A-1 to the Lease Schedule.
Citv of Vernon
("Lessee")
By
E28
l
Tifle
E2a
OSHKOSH CAPITAL
INFORMATION Rf,QUEST
LESSEE NAME: Cit_v of Vemon
FEDERAL TAX I.D. #
BILLING ADDRESS:
Billing Contact
Street Address or Post Office Box
City, State and Zip
Phone Number Fax Number
Email Address
PHYSICAL ADDRESS (IF DIFFERENT):
Street Address or Post Office Box
City, State and Zip
Require Board Approval for Payments? _ Yes No
Board Meeting Date?
Require signed vouchers for payments? _ Yes No
We typically mail our invoices 30 days in advance. Taking into account a 7-day mail period, do you foresee any problem
that would prevent the payment from being received on or before the due date?
Yes No
Please list any special instructions below:
,"-9039-G lnfomation Return for Tax-Exemfi Governmental 0bli$ations
> Under lntemal R€venue Code section litg(e)
> S€e s€parate insructions.
Caution: Il the /Ssue prbe is undet $100,000, use Fom 8038-GC.
(Rev September 201'1)
Department of the Treasury
lntemal Revenue Service
8 Name of issue
Lease #
OMA No 1545-0720
2 lssuer's employer identificaton number (ElN)
3e Name of person (other than issued with whom the IRS rnay communicate about thas retum (s€€ instruclions)3b Telephone number ol other person shown on 3a
,l Numb€r and street (or P O box if rnail is not delivered to street address)5 Report number (For rRS Use Only)
6 City, town, or post office, state, and ZIP code 7 Date of issue
I CIJSIP number
l(}a Name and title ol officer or other employee of the issuer whom the IRS rmy call for rnore information (see
rnstructions)
10b Telephone number of officer or other
e.nployee shown on 1 0a
See the instructions and attach schedule.
1l Education
12 Heahh and hospital
13 Transportation
14 Public safety
15 Environment (including sewage bonds)
16 Housing
17 Lnilities
18 Other. Describe >
19 If obligations are TANS or MNs, check only box 19a > D
lf obligations are BANS, check only box 19b > tr
n f ouigations are in the form ol a lease or installment sale, check box > E
form is
(e) Yield
Proceeds used for accrued interest
lssue price ol entire issue (enter amount from line 21, column (b))
Proceeds used for bond issuance costs (ncluding underwriters' discount) .
Proceeds used for credit enhancement
Proceeds allocated to reasonably required reserve or replacement fund
Proceeds used to currently refund prior issues
Proceeds used to advance relund prior issues
Total (add lines 24 through 28) .
Nonrefundi of the issue (subtract line 29 from line 23 and enter amount here)
3l Enter the remaining weighted average maturity oI the bonds to be cunently relunded . >
32 Enter the remaining weighted average maturity of the bonds to be advance relunded . >
3lilEnterthelastdateonwhichtherefUndedbondswillbecalled(MM/DD/YYr4>
4 Enter the date(s) the refunded bonds were issued > (MM/DD,^YYY4
Fol Paperwork Reduction Act Notice, see separate instructions. cat No 63773s Form 8038-G (Rev 9-2011)
the
21
2.a
24
6
27aa
g)
lf Amended check here >
(cl Stated redemption
pdce at rnaturity
Form 8038-G (Rev 9-2011)
35 Enter the amount of the state volume cap allocated to the issue under section 141(bxs) .
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
(GlC) (see instructions)
b Enter the final maturity date of theGlC>
c Enter the name oI the GIC provider >
37 Pooled financings: Enter the amount oI the proceeds ol this issue that are to be used to make loans
to other governmental units .
lf this issue is a loan made from the proceeds oI another tax-exempt issue, check box > E and enter the following information:
Enter the date of the master pool obligation >
38a
b
c
d
Enter the EIN oI the issuer of the master pool obligation >
Enter the name of the issuer ol the master pool obligation >
3, lfthe issuer has designated the issue under section 265(bX3XBXiXlll) (small issuer exception), check box
4 lI the issuer has elected to pay a penatty in lieu of arbitrage rebate, check box
41a ll the issuer has identified a hedge, check here > E and enter the Iollowing information:
b Name oI hedge provider>
c Type of hedge >
d Term ol hedge >
>E>tr
tr
tr
42
,(}
lftheiSsUerhaSSuperinte9ratedthehedge,checkbox>
lI the issuer has established written procedures to ensure that ali nonqualilled bonds of this issue are remediated
accordingtotherequirementsunderthecodeandRegulations(seeinStructions),checkbox>
4 lf the issuer has established written procedures to monitor the requirements of section 148, check box .
45a lf some portion ol the proceeds was used to reimburse expenditures, check here > n and enter the amount
b Enterthe date the official intent was adopted >
(Rev
tr
Signature
and
Consent
Under penalties of p€rjury, I declare thal I have examned this retum and accomparrying sch€dules and statements, and to the best of my knowlodge
and belief, they are true, co[ect, and complete. I further declare that I consent to the IRS'S disclosure of the issu€/s renrm infonmtion, as necessary to
process this refum, to the person that I have authorized above
Signature of issuer's authorized represefltative Date TvDe or print name and tide
Paid
Preparer
Use Only
Print/Type prepare/s name Prepareis signature Date cnecr ! ir
self-employed
Fim's EIN >
. 9-201
SALES ORGANIZATION:
LESSEE:
TYPE OF EQUIPiIENT:
EQUIPMENT COST:
CUSTOMER DOWNPAYMENT:
TRADE]N:
DELIVERY TIME:
PAYMENT MODE:
FIRST PAYMENT DUE DATE:
LEASE COMMENCEiIENT DATE:
June 9, 2015
South Coast Fire - Adrian
City of Vernon
Two (2) Pierce Engines
$1,321,836.49
$0.00
$0.00
Std delivery
Annual In Arrears
1 Year After Lease Commencement
Upon contract signing with Pierce
158,059.4510 annual
The above lEted payment(s) rellect all program drscounts avarlable
documentation fees associated with the completion of this financing
Oshkosh Capital There are no
NOTE; All lease documents must befullyexecuted within llllgys of the dateof this proposal. Failureto receive
completed documents may alter the final payment schedule due to changes in rates and/or discounts.
PERFoRli,lAl{cE BoND: To utilize the prepay program, a performance bond is required. Said performance bond shall be
paid for directly to Pierce manufactunng or financed by Oshkosh Capital as part of the transaction
TYPE OF FINANCIiIG: Tax€xempt Lease Purchase Agreement with a $1 00 buy out option at end of lease term Said agreement shall be
a net lease anangement whereby lessee is responsible for all costs of operation, mairtenance, irEurance, ard taxes.
BAI{KOUALIFICAnO:Thisproposalassumesthatthelesseewillnotbeissuingmorethan$10millloninlax+xemptdebtthbcalendar
year Furthermore, ii is assumed that the lessee willdesignate this issue as a qualified tax-exernpt obligation per the tax act of 19E6.
lEGAtllME Legal title lo the equipment during the lease term shall vest in the lessee, with Oshkosh Capital pertuding a first security
interest
AUTHORIZED SIGNORS: The lessee's goveming board shall provide Oshkosh Capitalwith its resolution or ordinance authorizing this
agreement and shall designate the individual(s) to execute all necessary documents used therein
E4_9E!!!9!: The lessee's counsel shall fumish Oshk6h Capdal wilh an opinion co\€ring thrs lransaction and the documents used
he.ein This opinion shall be in a form and substance satisfaciory to Oshkosh Capital.
VOLUITEER FIRE OEPARTIIEIITS: lf Lessee is a Volunteer Fire Department, a public hearing under the requiremenls of Section 147(D
of the lntemal Revenue Code of 1986 shallbe conducted to authorize this transaction. lt is recommended that a notice of the public hearing
be published '10 to 14 days in advance of the public hearing.
This proposal wlll bo valld tor lourteen (l,l) days from the aboye date and is sublect to fnal credit apptoval by (khkosh Capital
and appraval of the lease documents in Oshkosh Capital's solg discretion. To render a ci"dlt dscision, lsssee 6hall provido
Oshkosh Capital with their most recent t{o yeats' auditgd flnancial stalemenis, copy of their most recent lntgrlm linancial
statoment, and cunent budget
Accepted by:Proposal submitted byi
fl;. ,t.*-,,
Kim Simon
Kim.Simon@oshkoshcapital.com
Fl osHKosH
Ll caerreu
Oshkch Capital I LocB3.B230.{r$07 I 155 East Broad St I Columbus, OH /B2l5l Ph: (800) 820.9011, ext I I Fax: (80O) 678-0602
Date
City of Holland FD Bid results
March 19, 2014
1. Pierce Manufacturing (Halt) 5600,552.00 (pre-payment options in bid)
2. Rosenbauer (Ev+) 5582,922.@ (pre-payment options in bid)
3. Sutphen (Apollo Flrel S NO BID
4. KME (Payette & Associates) S60a,a32.@ (No pre-payment options)
5. HME (factorv direct) S533,9o2.@ (tJo bid bond)
5. Toyne (factory direct) 5572,229.00 (no pre-payment options)
7. Smeal (R&R Fire Truck Repair) 5619,700.@ (pre'payment options in bid)
From:
Sent:
To:
Subject:
Attachments:
Adrian Beyer <adrian@southcoastfire.net>
Friday, June 12.2015 11 .23
Guth, Andrew BC
Tag On
City of Holland FD Bid results.docx lMG.pdf
Good morninB Chief Guth-
Attached is a competitive bid for the City of Holland Michigan. Pierce was the most responsible bidder and was awarded
the contract.
It was for an Arrow XT PUC pumper, which is very similar in Cab, Pump and Options. The main difference is they have
opted for a smaller drive trdin due to the flatter terrain in Michigan. The pricinB was also the previous Yea/s pricing
which went up 3% shoftly after the bid.
Here is how the pricing would have been with the larger engine and after the price increase:
City of Holland Pierce Arrow xT: 5600,652.00 (without sales taxl
2014 3% Price lncrease: S18,019.86
Cummins lsL Engine and Allison 3000 EVS Transmission Vs. Cummins ISX and Allison 4000 Transmission Price
Difference: S37,489.00
city of Holland Pierce Arrow XT after Drivetrain Upgrade and Price increase: $556,170.@ (without sales tax)
lf you have any questions please feel free to contact me.
Thanks,
Adrlan Beyer
O:909,673.9900
Ct9O9,223.tO77
F:909.573.9700
Pierc€ Monulocluring lnc.
An Otrac.gr CCercrAlO., CC{,' ttl . @1Dt Cenfi@
%lD ArrltlCAN DRNE
PO$ OrrcE BOX 201 7
APPTEIOT{, WSCONgN 51912-m 7
920{@{m. FAX 92(}432.3:m
t /rr\,v.phcamlg-com
July 8,2014
Captain Chris Tinney
CITYOFIIOLLAND
279 Kollen Park Drive
Holland, MI4923
Re: New Fire Apparatus - 28l67TR
Dear Captain Tinney:
Thank you for your receat purchase of OifE (l) PIERCE ARROW-XT PUC PLJMPER
We are plcased o formally acccpt this order and have enclosed an original copy of the signed
Agreerneot for your files.
The opportrmity to placc this PIERCE Eppratus in your firc deparment is greatly appreciated We art
cartain it will firlfill your cvcry rcquircmera.
Pierce Manufacuring, Inc., and your authorizcd Pierce Reprasenutive, Halt Fire, Iac., thatt you for
your business.
Yours very truly,
PIERCE MANUFACTI'RING, TNC.
Sr. Manager, Order Management
DJS&p
Enclosure
Cc: Halt Fire, Inc., Venclosure
Ttis Pnrchasc At Ecmert (rogcthcr widr all anrchn€ s rcflrlxiced hcr€ir1 thc'Ag€cmcol'), mdc ond cntqcd iro by and
bctycen Pisrcc ManlfacMng lnc.. r Wiscoasio corporaion ('Picrce'I rn4 Ciw of Holtmd- e municiml cqoorein in thc
StaE of MichilEn C'Cu$orlet") is cffcctivc ss ofrE dale specificd in ScEliol 3 hcrEof,
L Defrnitixrs.
a. aProdu.t' ncans the fm apparaos and ary reciated equiFncot mrnufacotd or fumidsd for the Cunomcr by
Phrce pu]sllant b lhe SpGcificatims"
b. 'SFdllcrlloos' mcans Uc gencral sp.cilicdioos, teclu$cal sDeifEadoos. rahhg, ard te$ing ,lquircmnE fot lha
Produq co rimd io thc Picrce Proposal for fic Produa Fepsttd il rtsponsc ro thc Cusomer's lqu6r for propml.
c. 'Plcrre Prcpold' mcaN ihc proposal providcd by Picuc ecicd as Exhibl C prcpand in rcspanse o the
Cusdrer's rcquest l'tr pmpo6rl.
d. sNlycry" mcas r dat Pirrce is trWucd ro makc plrysical poscssion ofthe ProdEr rvsilable ao 0l! Cu5rom6.c. 'AccGplrrcc'Thc Cusomcr shall havc fiftccn (15) caleodar days of Dcliwry to inspcd orc Ploducr for srtcandal
confonmnc. wih tlt marcrial SFcificaioos; u ess Pkrc€ nc€ivcs a Noticc of Dcftcr withh fifteco (15) calcdar
days of Dclivcry, thc hoduct will be deenrcd to bc ilt calfoonaocc witl tbc Spocific ions ud rcocFcd by the
Custorncr.
2. Purpose. ThL Agrrersrt scrs fonh rhc rcrms and condhiom of Picrcc's sale oflh€ Prloducr ro rhc Clrsiqllcr.
3. Tcrn ofArlrc rnl This Agremcat will becomc effcaive m thc dxe it is sign d and apprcvrd by Picrcc's autf,orizod
repcseuriw pulsur lo Scqion 2l hercof ("ElTcctivc Di!c') or4 unlcss earlicr rcfminatcd pursuat to fhc rcrffi of tiis
AEcsrncnt it will tcrmir{e upoo thc conplaior of all obligdioos by c.ch psrty urdcr this Agrlrm.rr.
4. PurEh&rc and lhymeot. Thc Cusromtf egrEts to purEhase rhe Product specifrcd on Exhibh A for thr tdd purchrse prioe of
S600.622.00 (ftlr€has€ Price"). Priccs arc h U.S. firods
5. Fuurr Chanqcr Various ststc or federal rcgulatory ogptcLs (c.t. NFPA" DOT. EPA) my rcqglc dungcs o trc
SFcificaliorls and/or r kodrct and ia any
'uch
event any lEuldog cost incrcase irrunrd ao comply rhlrt*idr yill bc .ddcd
!o rhe Purchsse Pthe to bc p6t by lhe cus!om6. ]n addithn. any finurc drirc Eain upgr.de.B (Gngioc, trarsmissiol rrlcs,
cc.I or aoy ofirr spccifrcuion clungcs luvc llot bcer (ulcuhacd inlo our rnnual inocascs md wil be Fovidcd d additimrl
cost To lhc cxrc ptsclicablc, Piscc will &crsncrt End ircmizc rly such picc ittcrcEca for thc Crstons.
6. Ascem!fl chenrcs. 'ltc Cosoner Day rque$ tha Picrcc iltcorpordr s dlaog9 to lte ltoducB or thc Spccilicalims for
$c Pmducts by deuvcriDg a chsngc order io Picrcq providcd, houErrcr, fi4 arry och chargs odcr m!3r bc in writiE and
include a dcscription oflhe tropGcd chsngc surncicnt io pem Phrr ro evslustc thc feasibility of srch ch.Dgc echsngc
Otdcr'). Withh [scvcn (7) business daysl of rceipr of a Changr Ordcr, Picrca will hform thc Culoncr in uidng of thr
fcasibiliry ofthe Changc Ordcr. fie carlielt possiblc inplemorotion datc for thc ChrngF Order, of any increasc or dct lase in
thc hrciase Price rcsuliag nofli $rch Ctolgp Order. and of any cfrecr ol producrion schcdnliDg or Dclir€ry rrs1lhi|t fron
such Changc Ordcr. Picrce shall not bc liaDlc to orc Cusromcr for .!y dcby in Ffonnancc or Delivcry ariring fiun any suci
Chaoge @er. A Change Order is orly efeaivc whcn cannter+igncd by Pierc's dtdtorizcd rcfe..ntdiw.
?. CtnclllatiodTrr iraion. ln tlE cvan thk Agrcmcnr is c.nc.llcd or t€flrinercd by the c1!! om.r bcfqe coflplnk c Picrcc
may chugr a enccll8tion fec. Thc folbwirg cluryc schublc bas.xl on c6ts ioclqrEd rnay be applicd: (a) l0% offtG PurGhasr
Pricc oftcr odcr is ecceprd and cnrcrcd by Picrccl (b) 20% ofthc Prmhe Price aftr complrion of appoval dnrvingq and;
(c) 3096 of $e PurclBse Pricc upon eny mererial Gqubirioo The canccllcion fce witl incrac .ccadingly a costs ar
incunBd I thc order Fogrsscs Oroqgh Enginftring and imo maou&cturio& PicrE adcavDrs !o mitig e eny slEh cods
tkough tlE sab of such Produd ro amrher purdusrri holiiBvcr Cusrotng Clrll Emain li8bL for rhc diffellncc bm{G6 dr
Purtharc Pricc aoA ifapplbable. thc satc Ficc obaincd by Picrrc upon salc ofthc Produc to anoahrr purrhlscr, plus sny coer
imurEd by Piarce ro condrrr any such sale.
t. Delivay. lnspcclion and Acccohnce. (a) Dclivcrv. Delivery ofthe Produd is schcdulcd to be whhin !@ ctlcrdar da,,s of
dlc Effcctiw Dac of lhis Agrecmenl F.O.B. Holhn4 Ml. Risk of lo6E shall plss to Custorrcr uDon lhlivcry. (b) ln3Ecim
and Acce0rapce. Upon Delivery, Cusromcr dull have fiiccn (15) drys urfthh wtric.b to itrspect th3 Producr for subEarial
conformance lo rbc maEial Spccilicarions, Picrce stBll ,"rronrbly coop€rarc wirh Cu$omcr's inspccdon cffoni atd mrke
QSD t39t Rcvised: 09/102010
Product rvailaHe for Cusomer's iospcction ar any tinc custofli.r r!q[!sls duritrg Cosomcr irpection Fiod in lLc Gircttl of
$b6ranri8l noo+otrformaaoe ro Utc m edd SFcificslioas to funish PieEe witb writtal noaice $rmciatnt to pcrnit Picrcc to
waluaE such non<onformrncc ("Noticc of Dcfcct"). Any Produd rn in substanlial conformrncc io mrrcdal SPacitlcariotts
shall bc remcdid b1' Picrce within rhiny (30) drys fiom $G Notie ofDefc.L ln fie ever Piate doca nol Ecrivc r Noticc of
DcEa w hin fiftccn ( I 5) days of Delivcry, Prodrct will b€ dcc €d ro bc i! conforrDsnc" wilh Specifiakxr and Accepted by
Customer.
9. Noai:€. Ary rcquircd or parmiucd norices hcrE rndcr mus bc Eil,G! in vriring d fic addre.rs of *h party sa fonh bcloy.
or to $ah other rddress :s eiher prny nry efietitua by nrinca nofir rc $e other in thc mcnnrr co enplatcd hcrcil} by one
of 0E folloving merho&: hsrd dclircqc regErccd, crprrsq a csrrificd m.iL rEtum rEcipl EqrEc4 poa.ge prep.i4 d
miodly-rccognized privare exDEss couricn
Wilh r Copy !o:Pirrcc Mauhcturhg" lnc.
Direac of Ordcr Mrnagcmcnt
26@ Arn€ricar Drivc
Applcron Wl 54912
Fax (920) 832-3080
Customer
CiN of Holhnd Ca of Fil! oEra{qB
270 Rivcr Awnue Holhrd Depr ofPt$lic Safety
llollstrd Kollcn P!r* Fir Sreion
Michiorn 2?9 Koll€n Pad( Drive
49,123 Holland Ml 4923
10. $ar&rd WaranN. Any applicablc Picrcc rlnaotics arc rtulchd llclEto rs Exhibit B and mrde ! prn hcrrof, Any
additinal wamntics ,trust be expEirly opprovcd in writhg by Pic,rce's ar rorizd rcprc*nurin-
a Discleimer. OTHER THAN AS EXPNESSLY SET FON.TH IN TII]S ACNEF-MENT, N}:I,I}IF:R PIDRC}:, ITS
PARENT COMPA}iY. AFFILIATES, ST.,BSIDI,ARIEi, LICENSORS OR SUPPLIERS. TTIEIR RESPECT]VE OFFICERIi,
DIRBCTORS, EMPLOYEES, SHAREHOLDERS, AGENTS OR REPRESE}..ITATryES, MAKE ANY OTHER EXSRESS
OR IMPLIED WARRANTIES WITH RESPECT TO THE PRODIrcTS PROVIDED HEREI.'NDER OR OTHERWISE
REGARDING THIS AGREEMT|,NI" WHE:I'I{ER oRAI, ()R WRITTFN, E'(PRESS, IMPLIED OR STATUTORY.
WTMOUT LIMTTINO THE FOREGO]NG. ANY ]MPLIED WARRANTY OR CONDITION OF MERCHANTAEILITY.
THE IMPLIED WARRANTY AGAINST INFRINGEMENT, AND THE IMPLIED WARRANTY OR CONDITION OF
FITNESS FOR A PARTICULAR ruRPC'SE ARE EXPRESSLY EXCLUDED AND DISCLAIMED, STATEMENTS MADE
BY SALES REPRF.SENTATTVES OR tN PROMOTIONAL MATERIALS DO NOT CONSTIruTE WARRANTIES.
b. E lchrsions of Incidarr.l and Conscoucrnial DsrmEGs- ln rD Gvcr[ dull Pisrc bc liable fc curscqucnth[
incide sl or puilivc darlag6 incurcd by Cussolrr o[ any rhid psrty in comccion witt my lBtlcr ufuing our of or rluing
to lbk Agr€erDcnr. or rhc br*h $c]eof. ]lgrrdlcss of rrlre$rr such dsrmges arise our of b(lach of urtlully, tct, conEacq
sldcl liSility, statutory liability, idemnity, whc0m ruuhing from non<tcliwry or from Picrce's orm ttGgligpncq or
othcnyisc.
I l. lnsuranc.. Pierce maintaiB rh! follotying limits of insuruoc wilh I caric(s) ried A. orb(ltcr b,'4.M. B!st:
Cowsciol Genqal Uahllln lnnrotw:
IrroducGrconplctcd OpcraionsAggrGt tG: $1,fi10,0fi)
Each Occ rrcne: Sl,om,(m
I inhr.ll d ll.c"ss l.iobil irl) lraaromc:
AggrcE c:
Each Occurrcnce:
s25.000.000
s25,@o.ql0
Tllc Custonrt may rcquen: (r) Picrcc ro prcvide the Cusoms wih a copy ofa crrnnr Ccrtifrc.tc of lmurancc wih
thc covcragcs lisred sbotr: (y) to bc iocfudcd 6 ar rddirioBl irsured for Comrncrcial Ge*t8l Lirbility (subjc6 !o 0r
rcrrE and condlions of ihc ryplicablc Pire imurance policy) and (.-) all policics to provide a 30 dry nothc of
concclloaioD ro ihe tlamcd imurcd
12. Forcc Mqicurc. PiqEr slEll nor be Esponsiblc nor d€cmcd l,o b. in &fault on accoulrt of delrys itl Dcafdrnrnc! dr ro
causEs which arc bcyofll Picrcc's conEol whicb mal(e PicEa's pcrffi rncc impndicabE. includhB bu mr limitod ro civil
u.arr imunccrions. 3trikcs, riols, firrs. ssanre, floods, orhcr !.r3 of Erurc. erplcims. crrdqual(ca. acilcrts, .rly r.a of
govemmc , debys in aranspot8tkxr. irabiliry to obtain ncccssary laDor supplies or manufacnrring hcilitics, sllocdiro
rcSultrions or ord€rs aff.cting materials, equiprcna, facilitics or cornptaod produas, failurr to obrain any rcquircd liase a
cenifrcstcs, acrs of God or the public cocrny or tenoriin. hllu]! of trursponaim. cpide ics. quanndnc tlgricdons. fiillrG of
vendc: (drc ro causcs similar to 6ose wirhin thc scopc of this cb[sc) to parfdm ftcir co! rrds or bbor noubhs cansing
cessatioa. sloudowrt or inremptior of wot*.
QSD r39E ReYised: 09/1041010
I
I
13. &fad!. The occurrcnce ofone or morc ofthe follorring shall constilutc a defauh undcr this Agreeflent: (a) drc Cuflomcr
fuilr ro pa1, *hcn duc any amounts undcr rhis Agrccmcnr oito pcrform any of its obligations undcr this ABrccmcnq (b) PicrEc
fails ro perform any oiir. obligarions under rhis Agrccmcnt: (c) either party bccomes insolvent or become subject ro a
bankruprcy or insoivency proccedingr: (d) any rcprescntanon made by either parry to induce thc other to cnler into this
Agreemeni is false in ani marcrial respecr: (c) the Customer dissoN'es. merges. conso:idatcs or transfcrs a subsunrial ponion of
its-propcrry ro anorher cnrit-"; or (0 rhi Cusromcr is rn dcfrult or has brcachcd any oth co ract or agrc.mcnt rrith Picrcc.
14. Manufadurer's Slatemenr of Ori{in. lt is ageed rhat thc manufaclurer's statemellt of origin ('MSO") for fie P]oduct
coYered by thh Agremenl shall remain in rhc possession of Picrcc unril thc cntire Purchasc Price has bcen paid- lf morc rhar
onc Product is covcrcd by itlis Agrccmcnr. thcn the MSO for cach individual Produet shall rcmain in $c posscssion of Picrcc
unril rhe Purchase Pricc for fiar Product has been paid in full. ln case of any dcfault in paymenq Picrce may ukc full
possession ofrhe ProducL and any paymcnts thar have bccn made shall be applicd as Paymcnt for the use of the Produd uP to
rhe dare of uliing posxssion.
15. lndcp<ndcnr Contractors. Thc rclatiurship of thc partics cstablishcd undcr this AgrEcmcnl is thsl of indcpcndcnl
contractorc and neither pany is a parmer. employee. agcnl" orjoinl venlurcr ofor r+irh the orher.
16. Assiglmenr. Neither pany ma] assign its righrs and obligarions under $is A8reemcnl unless h has obEinEd thc prior
l[riftcn approval ofthc othcr parg.
17. Govemine Law: Jurisdiction- Without rcgard to any conflict of laws provisions, this Agrccmcnt is to be govemed by and
under lhe laws ofrhe sErc oflvlichigan.
It. Facsimilc Simarures- The delivery ofsignarures ro this Agre€menl by facsimile ransmission shall be binding as original
signarurcs,
19. Enlirc AErccmcnt. This Agrccmcnl shall bc thc Bxclurive 4Brccnleol bctr.ywn thc panics for Ihe Producl. Additional or
diffcrcnt tcrms proposcd by thc Cusromcr slull not bc applicablc. unlcss acctpred in wriling by Picrcc's authorizcd
representalive. No changc il modificarion of. or rcvision of this Agreement shall be valid uatess in writing and signed by
Piercc s authoriz.ed reprcscntalive
20. Conflicl. ln rhc cvcnl of a conflict bcrwccn rhc Customcr Specifications and thc Picrcc Proposal, thc Picrcc Proposal shall
contrcl. Irt $c event therc is a conflict between rhe Picrce Proposal and this Agrccmcnt, the Picrce Proposal shall control.
21. sienalures- This AErecmenr is not c'rclliye unless and unlil it is approved. signed and daEd by Picrcc Manufacturing.
Inc-'s audlorizcd rcpresqrtative.
Acceptcd and agreed to:
PIERCE MANUFACTURINC. INc.
\ame:
Title:
Dare:L'Tr20l9
QSD 1398 Revised: 09/104010
EXHIBIT A
PURCIIASE DETAIL F1ORM
Picrcc Maurfrtrrhg IDA
Dirccrff of Ordcf MalErol.lt
2600 Anlcriut Driv.
Applaon W 54912
Frx (920) t32-30t0
Datq June 2. 2014
cusromrNaoc:@
Warra y P6iod:One ( I ) Year bumD€r lo burnDcr. Se€ the bid DroDosal for catnDlcic qat?anw coveralc.
Training Rrquircmerls:Thrcc (3) new vehiclc uaininc sessions will b€ Drovided.
Other Mattcrs: None
Thb conrrec{ is availablc for i Gr-local ard other municiprl corpontiors lo utilizr with lhc optim of s&ing or deL}rilg .ny
PicrEe avsitable optirns, including chrssis mrxlcls. Any addition or dclction may alfccr fic uoir Pricc.
Palmmt Tcms:
Picrcc Manufacrurinp- lnc- Sec below fo. a drlcrbrion ofthe lare Dcnalw fcc.
l|.tOTE: lf dcfcrd ,lymttrr iiaBsn.lns .rr Eqult.d. rh! cLr&rno mJlt rr{c luCr filllrrEid rrralsElr Um€h r frr|lEil Lsiodal aaa.Pdlclo
PiGrcG I All Lr.s G'4i.6 .rd LaG l'lit Pift. mrt ll. ,tqDi.!d ro F, d colh.r by .!g of m, ,,!r...lr a f[Dt! Ls o. by ,ty lovarultdal rdrci]
blad urar tli !!lc. pu'ah6c, rf.liyny. 5Erfc. Do..srirl tsc cosur4irn or unqcuitn of thc ltodsq ,old by PicrEa fo dE Clsrqlrs Shdl t fo, JE
rcldrd of d|! Cugo|tta, aad ahdl ba ad&d ao rh. A!.i.6a Prrcr. Atl 6drraqy Drlca3 or ,|r.B *ldr fiElghr tlolveca dr h6.d .Doi prEtaifuE fltit ll ,il.l
{d, tlr dta 6,aar of ary aaal!'ac or (h.r.Gc h rudr rrici. d|a FiG.3 on all unahippad PlldrEl $ill bc i,l.r.sd d daatraa.d e.qdtdy. Dclirqu6r F!/t!Er!
tirlt bc suticEt to ! catlirg ctalG of LJ FEar! F lroath r r{dt krrs .monr Frutait ly l!$. Piroc $i0 ttc E rcquiaql b lcaa|t F]rna dkt tha
E r.t 6dr h Shii Agrlsrarr Horlw.f. to ar oid a lsta drargr cia!flna h lhc ctGnr of r ditputc c$ad by r irbntrial rulconfd ,rn.! rtili ncdral
rhc nolcurfomr8cr *irh mr.rill SracifEaio.lr, Dur o loogg thln Jitry ((0) d.ys sn r Dclivcry. lf [E di$&d ll'ufl ts rb lhgil dutE . dir c\tslmE
n.y $it Jlold qlt rh. drosnt of 0E fuitht d!!|,tE r.dit thc disgur. is 5.tLd. hsl no loqcr th,r|l 5ixty (60) d.yt.n t Ddie.ry. 9i.c..hdl hn/. nd Eldr t
DnnlEa rnoEy lacurity i afist in dl too(b .!d prqttct t|o,y o. harcrn r aold to ttE Cuitoarar b, Pisla q liv of lra !f iitql agt!0dricr baaqt,! Payttld[
of thc RrEll.. Pdcr fo. dl luch toodr t,d productr ln ur cr,.rr of rcrr.yrrdr b, thc Culro.E of .ay &b, oblilibt o. lhbiliry mt or hcr..k
irE!'lrrld 6 oliot by uE CuJqr!|q lo PilrE, PisaE rtrll hrlc url t|lay agcir. dl aitlrtt rrld rmEdirs of ! iccr.Gd Frsy urC. Anklc 9 of OE Urifdrn
Colt|lE cid Cod. (UCC) 6 .lloDrcd tt lh! n{c of $is..tr.ii.
QSD 1398 Rcvisld: 09/102010
THIS PURCHASE DETAIL FORM IS EXPRESSLY SUBJECT TO I'HE PURCHASE AGREEMENT TFRMS AND
CONDITIONS DATED AS OF THE DATE PROVIDED IN SECTION 3 OF THE AGREEMENT BETWEEN PIERCE
MAI{UTACTURING lNC. AND Citv of Holletd WHICH TERMS AND CONTDITIONS ARE I IEREDY INCORPOMTED
IN, AND MADE PART OF. T}IIS PI,'RCHASE DETAIL FORM AS TI{OUGH EACH PROVISION WERE SEPAMTELY
SET FORTH HEREIN, EXCEI'I' 'IO 'I'HE EXTI'NT OTHERWISE STATED OR SI.'PPLEMENTED BY PIERCE
MANUFACTURING TNC. HEREIN.
Rcvised:09i102010
D(HIBITB
WANRANTY
SEE THE WARRANTY SBCTIO}I OF TI{E BID PROPOSAL
Revlsed:6
EXHIBIT C
PIERCE PROPOSAL
SEE THE PROPOSAL BID BINDER FOR COMPLETE DETAILS
1396 Revis€d:
RECEIVED
JUL I5 2ol5
CITY CTERI(S OFFICE STAFF REPORT
VERNON GAS & ELECTRIC DEPARTMENT
DATE:
TO:
FROM:
Originator: Abraham Alemu, Electric Resources Planning & Development
Manager
Antelope DSR 1 Solar Project - Power Sales Agreement by and between the
City of Vernon and the Southern California Public Power Authority
Recommendation
A. Find that approval of the Power Sales Agreement ("Agreement") by and between the City
of Vemon ("Citv") and the Southern Califomia Public Power Authority ("SCPPA") in
connection with the Antelope DSR 1 Solar Project is not subject to the Califomia
Environmental Quality Act ("CEQA) under Guidelines Section 15061(bX3), the general
rule that CEQA only applies to projects that may have an effect on the environment.
Purchasing power is purely a financial transaction, and any construction that may occur
by a private party in the future in reliance on this approval would be subject to CEQA
review by another govemmental agency at the time when actual details of any physical
proposal would be more than speculative; and
B. Approve and authorize the Director of Gas and Electric to execute the Agreement by and
between the City and the SCPPA, in substantially the same form as attached to the staff
report, for the purpose of purchasing solar power with associated green attributes in
compliance with the Renewable Resources Procurement Plan and Enforcement Program
in force at the City. The terms include the purchase of 25 megawatts of solar power for a
term of20 years beginning with the project commercial operation date: and
C. Approve and authorize the Director of Gas and Electric to execute the Purchase Option
Agreement and the Storage Option Agreement ("Option Agreements") by and between
the City of Vemon and SCPPA in substantially the same form as attached to the staff
repot; and
D. Find that approval of the power sales agreement and the option agreements comply with
the competitive bidding requirements of the Vemon Municipal Code in that: (a) Vemon
Municipal Code $ 2.17.12(4)(6) exempts these conftacts from the competitive bidding
REEEIVED
JUL | 3 206
July 21,2015
":,::T;:;" ":::":::':". .^ o ","",w"l;PJ
t
RE
Page I of4
CITYADMIN
requirements because each is categorized as a "contract for the acquisition, sale or
transmission of electrical power"; and (b) these contracts are between SCPPA (a joint
powers agency) and Vemon, and Vemon Municipal Code 2.17.12(A)(5) exempts these
contracts and all other ''contracts with other govemmental entities or their contractors for
labor, materials or supplies". Further, hnd that approval of these contracts is consistent
with the purposes of the City's purchasing regulations because SCPPA conducted a
competitive process and received several proposals, of which, the Antelope DSR I Solar
Project was the lowest priced project for projects under 100 megawatts, and the project is
scheduled to begin commercial operation in third quarter of 2016.
Background
This project is a 50 megawatt ("MW') solar photovoltaic ("PV") project located in the City of
Lancaster, Los Angeles County, Califomia. The price of the Project is the lowest Vernon Gas
and Electric has ever seen for similar solar PV projects in recent years. The project will
interconnect with the California Independent System Operator's System at Southern Califomia
Edison's Antelope 230 kV substation.
Califomia environmental laws require the City to comply with renewable energy mandates. In
an effort to attain compliance, it is recommended that the City Council approve this contract
which allows the City to obtain Category 1 "bucket one" solar energy and Renewable Energy
Credits that meet the Renewable Portfolio Standards ("RPS) compliance requirements for
Category 1 as set forth in Califomia Public Utilities Code Section 399.16(bX1XA). The terms
include the purchase of 25 megawatts of solar power for a term of 20 years beginning with the
project commercial operation date.
The key elements of the agreement are as follows:
The Antelope DSR I Solar Project is located in City of Lancaster, Los Angeles
County, Califomia, and will have an output of 50 megawatts of photovoltaic solar
energy. The project is being developed by Antelope DSR I LLC, a limited liability
company organized and existing under the laws ofthe State of Delaware.
The City of Vemon and the City of Riverside are parries to this SCPPA Antelope
DSR 1 Solar Project Power Sales Agreement ("SCPPA Power Sales Agreement").
SCPPA will also execute such other agreements as are necessary to effectuate the
Power Purchase Agreement ("PPA'). SCPPA will then resell the power to the cities
of Vemon and Riverside at cost though the SCPPA Power Sales Agreement which is
being presented for approval to City Council.
The City will purchase 25 megawatts of solar power from the Project. Vemon will
also receive capacity rights in proportion to its percentage of facility output and all
renewable energy credits.
The price is fixed at $53.75 per megawan hour.
Page 2 of 4
The term is 20 years.
Performance Security under the Power Sales Agreement shall be provided to ensure
that Antelope DSR 1 LLC complies with the performance requirements of the Power
Sales Agreement and Power Purchase Agreement. Antelope DSR 1 LLC will be
posting, within 30 days ofthe effective date, a letter of credit ("LOC') or cash in the
amount of $2.25M as Development Security. After Commercial Operations, sPower
will replace the Development Security with a Delivery Term Security in the amount
of $6.91M during the first l0 years and $5.41M in the last 10 years, using a
combination ofcash, LOC, and performance bond.
The Power Purchase Agreement includes enforceable development milestone dates
with significant financial penalties, ranging from $5,000 to $10,000/day, if dates are
missed; or in the more severe cases, SCPPA can unilaterally terminate the PPA.
Antelope DSR 1 LLC must first offer to sell the Project to SCPPA before it can sell
the projects to third parties.
SCPPA has the option to purchase the Project from sPower in year 10, year 15 and
year 20 of the Commercial Operation Date at the then fair market value the Project.
A Purchase Option Agreement will be an appendix to the PPA and will be executed
concurrently with the PPA.
SCPPA has the option in the first 15 years of the contract to install energy storage
system up to 12MW at the Project site. The intent is to have an opportunity to
integrate energy storage with this solar facility to 1) Shape the output of the solar
production if needed. and 2) Meet any potential storage mandates in the future.
Antelope DSR 1 LLC will cooperate to reserve sufficient area on site to
accommodate the installation. In addition, sPower will spend up to $182,000 to
obtain the necessdy permit(s) and interconnection modification for the storage
installation. A Storage Option Agreement will be an appendix to the PPA ald will be
executed concurrently with the PPA.
o The SCPPA Power Sales Agreement establishes a coordinating committee to
administer the contract.
Gas & Electric staff recommends that the Antelope DSR I Solar Project Power Sales Agreement
between the City of Vemon and the Southem Califomia Public Power Authority be approved.
Fiscal Impact
The Project will require no contribution to construction costs. Vemon will only pay for actual
energy received at the contract stipulated price of$53.75 per MWh. The projected annual cost,
based on the anticipated Project output, will be about $1.9 million in Fiscal Year 2016117 and
$3.8 million each Fiscal Year thereafter. This is a fixed price contract, however, output from the
Project will degrade over time, thereby reducing the annual expense as the actual energy
received by Vemon is reduced from year to year.
Page 3 of4
Attachment(s)
l. Power Sales Agreement by and between SCPPA and City of Vernon
Page 4 of 4
Execution Copy
ANTELOPE DSR I SOLAR PROJECT
POWER SALES AGREEMENT
Bf,TWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
THE CITY OF VERNON, CALIFORNIA
Dated as ofJuly 16, 2015
l.
2.
3.
4.
TABLE OF CONTENTS
Page
PARTI8S........... ..'........'...'.....'........... 1
Rf,CITALS, CONSTRUCTION AND PRELIMINARY MATTERS..."..........................1
AGREEMENT
6. COORDINATINGCOMMITTEE
Establishment and Authorization of the Coordinating Committee..............................6
Coordinating Commiftee Responsibilities .................... ..................8
Management Decisions and the Role of Board of Directors................ . . . . . . . . . . . . . . . . . . . . 1 I
Periodic Audits.... ...... .........12
Additional Committees ......... .....-.-.-.-....-..........12
Costs ofConsu|tants....................... .-...............12
CHARGES AND BILLINGS
5.
7.
Monthly Costs..... ................12
Billing Statement ................13
Adoption ofAlternative Billing Statement Procedures ............................................. l3
Disputed Monthly Billing Statement ............... l3
Reconciliation of Monthly Costs.... ................. 14
Other or Additional Cost Reconciliation Mechanisms. ................ l4
Prepayment of Monthly Costs .........................14
8.UNCONDITIONAL PAYMENT OBLIGATIONS; RATE COVENANT;
AUTHORIZATIONS; CONFLICTS; LITIGATION
6.1
6.2
6.3
6.4
6.5
6.6
7.1
7.2
7.3
7.4
7.5
7.6
7.7
t2
t4
9.OTHER TERMS AND SERVICES
10.PROJECT SPECIFIC MATTERS AND PURCHASER RIGHTS A.NID
OBLIGATIONS UNDER PROJECT AGREEMENTS
II. NONPERFOR.I}IANCE AND PAYMENT DEFAULT
I l.l Nonperformance by Purchaser........ ................. l gll.2 Notice of Payment Defau1t.............. ................. lg
I I .3 Cured Payment Defau1t................ .................... l g
I I .4 Failure to Cure Payment Default . .................... l g
I t.5 Treatment ofthe Defaulting Purchaser's project Rights and Obligations upon
its Payment Defau11.......................... ................. l g
I L6 Elimination or Reduction of Payment Obligations... ....................20ll.7 Use of Operating Reserve Account. .................20
I 1.8 Step-Up Invoices. ................20I1.9 Application of Moneys Received fiom StepUp Invoices Relating to the
Project ................. ................21
I l.l0 Application of Moneys Received liom Default Invoices. ............21
I l.l I Application of Moneys Received from Compliance payments............. ....................21ll.l2 Application of Moneys Received fiom Sale of Facility Output ................... .............21
I I . I 3 No Step-Up Before lssuance of Debt.. .............21
12. CHARACTER, CONTINUITY OF SERVICE
8.3
8.4
8.5
8.6
9.1
9.2
9.3
9.4
9.5
9.6
t7
18
,t
II
TABLE OF CONTENTS
(continued)
Page
14.6 No ReliefFrom Insurer's Obligations ...................... ......"""""""23
14.7 SCPPA Directors, Officers, Employees, Agents Not Individually Liable; No
General Liability of SCPPA.............. ... """ " '24
17. SEVERABILITY
NOTICES
18.
19.
20.
C_
ATTACHMf,NTS
DEFrNrTIONS... ............................A-l
SCT{EDULE OF PARTICIPANTS CAPACITY AMOUNTS, PARTICIPANT
FACILITY OUTPUT SHARES, PARTICIPANT FACILITY OUTPUT COST
SHAR8S............. ........................... B- l
POWER PURCHASE AGREEMENT.......................... ..........................c- I
A_
B_
l.
ANTELOPE DSR 1 SOLAR PROJECT
POWER SALES AGREEI}IENT
PARTIES. This Antelope DSR I Solar Project Power Sales Agreement (this '.Agreement,,),
is dated for convenience as of the l6tn day of July. 2015, by and between the SOUTHERN
CALIFORNIA PUBLIC POWER AUTHORITY, a joint powers agency and a public entity
organized under the laws of the State of Californi4 hereinafter designated as "SCPPA," and
the CITY OF Vemon, a municipal corporation organized and existing under the laws ofthe
State of California. The CITY OF VERNON is also periodically designated in this
Agreement as "VERNON" or as "Purchaser, or, depending upon the context as "SCPPA
Participant" or participant. VERNON and SCPPA are also sometimes herein referred to
individually as a "Party" and together as the "Parties."
RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS. The Recitals set
forth herein and the facts, which follow, are incorporated into this Agreement by reference
for all purposes. The facts and the circumstances ofthe Parties contained in the Recitats,
among others, represent the background and frame\.york for this Agreement, the aim and
purpose of this Agreement and the intendments of the Parties with respect thereto. This
Agreement has been reviewed by attomeys for both Parties and shall not be interpreted with
reference to the rules of construction providing for construction against a Party responsible
for drafting or creating a particular provision or section, but should instead be interpreted in a
manner which broadly implements the goals and objectives ofthe Parties as expressed herein.
References to "Sections," and "Appendices," shall be to Sections, and Appendices as the case
may be, of this Agreement unless otherwise specifically provided. Section headings in this
Agreement are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or given any substantive effect. Any of the
terms defined herein may, unless the context otherwise requires, be used in the singular or the
plural, depending on the reference. The use herein of the word "include" or "including",
when following any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately following
such word or to similar items or matters, whether or not nonlimiting language (such as
"without limitation" or "but not limited to" or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that fall within the
broadest possible scope of such general statement, term or matter. This Agreement is made
with reference to the following facts among others:
2.1 SCPPA was created pursuant to provisions contained in the Joint Exercise of Powers
Act found in Chapter 5 of Division 7 of Title I of the Govemment Code of
Califomia, as amended fiom time to time (the "Act" as defined in Attachment A), by
its members, which are municipalities and an inigation district that supply, among
other things, electrical energy in the State of California, for the purpose ofjointly and
cooperatively undertaking the planning, financing, development, acquisition,
construction, improvement, betterment, operation, and maintenance, of projects for
the generation or transmission of elechic energy, including the development and
implementation ofsystems and frameworks for the acquisition and delivery ofsecure,
long-term reliable supplies of renewable electric energy.
2.
2.2 Pursuant to the terms ofthe Act, SCPPA has the power, for the purpose ofpromoting,
maintaining and operating electric generation and transmission, to plan, develop,
contract for, finance, acquire, design, undertake, own, construct, manage, operate,
maintain and administer projects involving systems, methodologies and programs for
the acquisition, supply, procurement and delivery of secure, long-term reliable
supplies of renewable electric energy, including solar energy, and to cause such
projects to be planned, developed, contracted for, financed, acquired, designed,
undertaken, constructed, managed, operated, maintained and administered and to
provide by agreement for the performance and carrying out ofany such activities.
2.3 Purchaser is a Califomia municipality that provides electric energy to its citizens
through its municipally owned electric system. Purchaser is one ofthe parties to the
SCPPA Joint Powers Agreement.
2.4 ln pursuit of potential renewable electric resources to address SCPPA member
renewable enerry needs, SCPPA, together with the Purchaser and other SCPPA
members have identified and investigated a potential photovoltaic solar energy
generation resource located in Los Angeles, County, Califomia, denominated the
Antelope DSR I Solar Project (the "Projecf' as defined in Attachment A hereof) to be
developed by Antelope DSR l, LLC, a Delaware limited liability company and an
affiliate of sPower LLC, a Delaware limited liability company.
2-5 After negotiations SCPPA intends to enter into a Power Purchase Agreement with the
Antelope DSR l, LLC, for the purchase of electric output of the Antelope DSR I
Solar Project (the "Project" as defined in Attachment A hereoQ.
2.5 Purchaser has a need for a percentage ofthe capacity, electric output and associated
rights, benefits and credits of the Project, and has determined to enter into this Power
Sales Agreement with SCPPA for the purpose of meeting such needs.
2-7 SCPPA is authorized to exercise the powers vested in SCPPA pursuant to the Act, its
Joint Powers Agreement and this Agreement, as agent for Purchaser to fully
implement Purchaser's objectives in the Project as set forth herein.
AGREEMENT. For and in consideration of the premises and the muhral covenants and
agreements hereinafter set forth, and in order to pay SCPPA for Purchaser's share of
SCPPA's costs with respect to the Project, the Parties agree as herein set forth.
DEFINITIONS. Attachment A to this Agreement, attached hereto and incorporated herein,
sets forth definitions of certain tems used in this Agreement. Certain other capitalized terms
used herein are defined in the Power Purchase Agreement and shall have the meaning
ascribed therein. The terms defined in Attachment A, the Power Purchase Agreement and
this Section 4, whether in the singular or plural, unless specifically provided otherwise, when
used herein or in the Appendices hereto and initially capitalized, shall have the meaning
ascribed thereto in said Attachment A, the Power Purchase Agreement or as set out below:
4.1 Aereement. This Agreement, as it may be amended, modified or supplemented from
time to time.
,|
4.3
Effective Date. The date described in Section I 6.1 hereof.
Total Power Costs. All of SCPPA's costs resulting from SCppA,s contracting for,
providing for, accommodating, and facilitating the project, including costs arising
under any of the Power Purchase and Security Agreements or other project
Agreements- SCPPA shall apply, as a credit against Total power Costs, any receipts,
revenues and other moneys received by SCPPA from surplus equipment, materials,
supplies or assets relating to the Project sold prior to the date of Commercial
Operation for the benefit of SCPPA, as well as such other amounts to be applied as a
credit against Total Power Costs pursuant to this Agreement. Total power Costs shall
consist of (i) the Delivery Output cost component (described in Section 4.3.1), (ii) the
Power Purchase Agreement General and Administrative cost component, (iii) a
Supplementary Services cost component to the extent SCppA incurs such costs
(described in Section 4.3.3), (iv) a Reserve Fund cost componenr (described in
Section 4.3.2), and (v) a Power Purchase and Security Agreements cost component
(described in Section 4.3.5), and shall include, but not be limited to, the items of cost
and expense referred to in the Power Purchase and Security Agreements and this
Section 4.3 that are accrued or paid by SCPPA during each Month of each power
Supply Year. In the event any Power Supply Year shall consist offewer than twelve
Months, the fraction set forth in Section 4.3.2 shall be adjusted accordingly and, in
the event of any revision of the Annual Budget after the commencement of any
Power Supply Year, the amount determined pursuant to Section 4.3.2 shall be
appropriately adjusted so that any increase or decrease in the portion of the Annual
Budget applicable to Section 4.3.2 shall be evenly apportioned over the remaining
Months ofsuch Power Supply Year.
4.3.1 The Delivery Output cost component of Total Power Costs for each Month
shall consist of the costs ofthe Facility Output, as calculated at the applicable
Contract Price therefor in the Power Purchase Agreement.
4.3.2 The Power Purchase Agreement General and Administrative cost component
of Total Power Costs for each Month shall consist of the administrative and
general costs with respect to the Project, including (i) legal fees, costs relating
to litigation (including disbursements and other amounts paid as a result of
such litigation), insurance costs (including amounts to fiind any self-insurance
program), overhead costs, any ta\es required to be paid by SCppA with
respect to the Project, (ii) all expenses incuned in enforcing the power
Purchase Agreement and other Power Purchase and Security Agreements, and
(iii) all costs related to the conducting ofthe business of SCPPA with respect
to the Project, including the applicable portion of salaries, fees for legal,
engineering financial and other services, and costs ofthe project Manager, as
well as all other costs attributable to miscellaneous and incidental expenses in
connection with the administration of the Project, and all other expenses
properly related to the conduct ofsuch affairs ofSCPPA.
4.3.3 The Supplementary Services cost component of Total Power Costs for each
month shall consist of all costs incurred by SCPPA, ifany, and to the extent
not included in Section4.3.l, in connection with services for transmission,
dispatching, scheduling, tagging, firming, balancing, swapping, exchanging
or delivering and for otherwise facilitating the disposition, movement, taking,
receiving, crediting and accounting for Facility Output provided for under this
Agreement. The Supplementary Services cost component ofthe Total Power
Costs shall also entail all costs incurred by SCPPA, if any, which are
necessary to move or otherwise handle delivery of any portion of Facility
Output from the Point of Delivery to one or more specified delivery point(s)
as determined by Purchaser pursuant to Sections 9.2 and 9.5.
4.3.4 The Reserve Fund cost component ofTotal Power Costs for each Month shall
consist of: the amount for such Month necessary to establish and maintain the
Reserve Funds at the level deemed prudent and appropriate by the Board of
Directors.
4.3.5 The Power Purchase and Security Agreements cost component of Total
Power Costs for each Month shall consist of: the costs, without duplication,
associated with the Power Purchase and Security Agreements, including to
the extent not otherwise included in this Section 4.3, all costs for such Month
of SCPPA in connection with its enforcement of the Power Purchase and
Security Agreements or the performance required of SCPPA under any ofthe
Power Purchase and Security Agreements and shall include, without
duplication, SCPPA's monthly payment ofany applicable associated ancillary
costs under the Power Purchase and Security Agreements, and any costs
SCPPA is required to pay for the Facility Output, including, where
applicable, the costs of Startup and Test Energy.
4.4 Monthly Costs. The costs payable by the Purchaser to SCPPA as described in
Section 7.1 hereof.
PURCHASE AND SALE OF FACILITY OUTPUT AND THE OBLIGATIONS OF
SCPPA AND THE PURCHASER
5.1 Purchase and Sale of Particioant Faciliw Outout Share. ln accordance with the terms
and conditions of this Ageement, commencing on the earliest of (i) the date SCPPA
is obligated to pay any portion ofthe costs ofthe Project, (ii) the effective date ofthe
Power Purchase Agreement, or (iii) the date of the first delivery of energr to
Purchaser pursuant to this Agreement, and continuing through the term of this
Agreement, except as otherwise provided herein, SCPPA shall provide Purchaser its
Participant Facitity Output Share of any and all products, rights, and benefits,
whether tangible or intangible received or obtained by SCPPA with respect to the
Project, including without limitation the Environmental Attributes and Facility
Output, and Purchaser shatl be responsible for and pay any and all costs, liabitities
and obligations associated with the acquisition of such products, rights, and benefits,
which shall include without limitation all costs, liabilities and obligations associated
with Facility Output, as applicable, under the Power Purchase Agreement and any
other applicable Project Agreement, including purchase or acquisition of any rights
pursuant to the Power Purchase and Security Agreements and any other applicable
Project Agreement.
5.2 Facilitv Output and Deliverables. SCPPA shall provide and Purchaser shall purchase
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5.3
5.1
and receive Purchaser's Participant Facility Output Share of Facility Output pursuant
to the terms of this Agreement. To the extent permitted by the power purchase and
Security Agreements, the applicable Project Agreements, or otherwise determined by
the Board of Directors, SCPPA will endeavor to take such actions or implement such
measures as may be necessary or desirable for the utilization, maintenance or
preservation of the rights and interests of the Purchaser in the project including, if
appropriate, such enforcement actions or other measures as the Board of Directors
deems to be in the Purchaser's best interests. To the extent such services are
available and can be implemented in accordance with the power purchase and
Security Agreements or other applicable project Agreements, SCppA shall also
provide such other services, as approved by the Board of Directors, as may be
deemed necessary to secure the benefits and,/or satisfr the obligations associated with
the Power Purchase and Security Agreements or other applicable project Agreements.
SCPPA shall use its best efforts, on behalf of Purchaser to secure the benefits of the
transactions contemplated under the Power Purchase and Security Agreements or
other applicable Project Agreements including the delivery of the Facility Output, as
applicable, contemplated by this Agreement, and shall endeavor to maintain and
secure the rights and benefits accruing to SCPPA through the Power Purchase and
Security Agreements and the other applicable Project Agreements.
Proiect Manaqer. SCPPA or its designee or designees shall act as Project Manager as
provided in this Agreement to administer the Project, or cause the Project to be
administered, as provided in this Agreement or pursuant to assignments, instructions
or requests by the Coordinating Committee or the Board of Directors, or through any
project management or agency agreement.
Adootion ofAnnual Budeet. The Annual Budget and any amendments to the Annual
Budget shatl be prepared and approved in accordance with Sections 5.4.1, 5.4.2 or
5.4.3, respectively.
5.4.1 SCPPA will prepare and submit to Purchaser a proposed Annual Budget at
least 60 Days prior to the beginning of each Power Supply Year. In
connection with the preparation of the Annual Budget, SCPPA shall
incorporate therein the Operating Budget for such Power Supply Year as
prepared by the Project Manager and approved by the Board of Directors.
Purchaser may then submit to SCPPA, at any time until the Annual Budget is
adopted, any matters or suggestions relating to the Annual Budget. SCPPA
shall adopt the Annual Budget not less than thirty (30) nor more than sixty
(60) Days prior to the beginning of such Power Supply Year and shall cause
copies of such adopted Annual Budget to be delivered to the Purchaser;
provided, however, the Annual Budget for the first Power Supply Year shall
be prepared, considered, adopted and delivered in the most practicable
manner available prior to Commercial Operation of the Facility.
5.4.2 As required fiom time to time during any Power Supply Year, after seven
Days written notice to the Purchaser, SCPPA may, pursuant to the foregoing
provisions for adopting the Annual Budget, adopt an amended Annual Budget
for and applicable to such Power Supply Year for the remainder of such
Power Supply Year. The Annual Budget shall establish the basis for monthly
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Billing Statements to be sent to each Participant, as provided in Section 7
hereof.
5.4.3 Any adjustment, and any other or further mechanism for adjustment, as may
be required to address the variability of costs of operation of the Project at
any time during the Power Supply Year or the variability ofor addition to any
other Annual Budget component, may be incorporated into the Annual
Budget as provided above, or by any amendment to an Annual Budget at any
time during any Power Supply Year upon the seven Days written notice to the
Purchaser as set forth in Section 5.4.2.
5.5 Reoorts. SCPPA will prepare and issue to Purchaser the following reports as soon as
reasonably practicable after the end ofeach quarter ofa Power Supply Year:
5.5.1 Financial and operating statement relating to the Project.
5.5.2 Variance report comparing the costs in the Annual Budget versus actual costs,
and the status ofother cost-related issues with respect to the Project.
5.6 Records and Accounts. SCPPA will keep, or cause to be kept, accurate records and
accounts of each of the properties and facilities comprising the Project as well as of
the operations relating to the Project, all in a manner similar to accepted accounting
methodologies associated with similar projects. All transactions of SCPPA relating
to the Project with respect to each Fiscal Year shall be subject to an annual audit.
Purchaser shall have the right at its own expense to examine and copy the records and
accounts referred to above on reasonable notice during regular business hours.
5.7 Provide Information. Purchaser agrees to supply SCPPA, upon request, with such
information, documentation and certifications as SCPPA shall reasonably determine
to be requisite to and necessary or desirable for the administration and ongoing
activities of the Project, including information reasonably available to allow SCPPA
to respond to requests for such information from any federal, state or local regulatory
body or other authority.
5.8 Consultants and Advisors Available. SCPPA shall make available to the Project
Manager (if other than SCPPA) and to the SCPPA Participants all consultants and
advisors that are retained by SCPPA, and such consultants and advisors shall be
authorized to consult with and advise the Project Manager and SCPPA Participants
on Project matters.
5.9 Liquidated Damaqes- Any amounts paid to SCPPA as and for Daily Delay Damages
or Shortfatl Damages by the Power Purchase Provider as provided under the Power
Purchase Agreement shall be remitted to the SCPPA Participants in accordance with
their respective Participant Facility Output Shares.
COORDINATING COMMITTEE.
6. I Establishment and Authorization of the Coordinatins Committee.
6.1.1 The Coordinating Committee is hereby established and duly authorized to act
6.
on behalf of the SCPPA participants as provided in this Section 6 for the
purpose of (i) providing coordination among, and information to, the SCppA
Participants and SCPPA, (ii) the administration of the power purchase
Agreement, (iii) the administration of rhe Project Agreements, (iv) making
any recommendations to the Board of Directors regarding the administration
of the Project and any acquisitions related thereto and (v) execution of the
Coordinating Committee responsibilities set forth in Section 6.2 hereof,
including the various financial, administrative, and technical matters which
may arise from time to time in connection with the project or the
administration thereof, and such further developments as may need to be
addressed.
6.1.2 The Coordinating Committee shall consist of the designated Representatives
of the Participants. Each Participant shall be entitled to cast a vote equal to
its Participant Facility Output Cost Share as set forth in Attachment B hereof.
An alternate representative of each Participant shall be its altemate
Committee Representative or, if none has been appointed, an alternate
representative may be appointed by wriuen notice by such Participant to
SCPPA and each of the other SCPPA Participants to act on the Coordinaring
Committee, or on any subcommittee established by the Coordinating
Committee, in the absence of such SCPPA Participant's regular
representative or to act on specified occasions with respect to specified
matters. An alternate representative may attend all meetings of the
Coordinating Committee but may vote only if the representative for whom
she/he serves as altemate is absent.
6.1.3 No SCPPA Participant's representative shall exercise any greater authority
than permitted for the Participant which she/he represents.
6.1.4 The chairperson of SCPPA shall promptly call a meeting ofthe Coordinating
Committee at the request of any representatiye in a manner and to the extent
permitted by law.
6.1.5 For the purpose of conducting meetings, a quorum shall exist so long as
SCPPA's representative and the representatives of the SCPPA Participants
holding not less than eighty percent (80%) of the toral Participant Facility
Output Cost Shares shall be present.
6.1.6 Except as may otherwise be provided in an agreement to which all of the
SCPPA Participants agree, all actions taken by the Coordinating Committee
shall require an affirmative vote of SCPPA Participants having Participant
Facility Output Cost Shares aggregating at least eighty percent (80%) of the
total Participant Facility Output Cost Shares. Unless the Board of Directors
shall otherwise determine to require a majority vote pursuant to the terms of
the Joint Powers Agreement, all actions with respect to the Project taken by
the SCPPA Board of Directors shall require an affirmative vote of at least
eighty percent (80%) of the Project Votes (as defined in SCPPA's Joint
Powers Agreement, dated as ofNovember l, 1980, as amended ftom time to
time) cast thereon. Notwithstanding the forgoing, however, if a proposed
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6.2
action before the Coordinating Committee or the Board of Directors relates
solely to the interests of a single Participant (other than Purchaser) and
Purchaser determines, in good faith, that such proposed action will not
adversely affect, economically or otherwise, its interests, then Purchaser
agrees that it shatl not unreasonably withhold its affirmative vote with respect
to such proposed action.
6.1.7 Purchaser acknowledges and agees that SCPPA, through the Coordinating
Committee or the Board of Directors, as applicable, may from time to time
enter into Project Agreements or amendments of and supplements to the
applicable Project Agreements (in accordance with their respective terms) and
that, except as provided herein or as otherwise provided by resolution of the
Board of Directors, SCPPA will not be required to obtain the consent or
approval of Purchaser in connection with any such Project Agreement or
supplement or amendment, provided that any such amendment shall be
approved by the Coordinating Committee or the Board of Directors in the
manner provided by this Agreement.
6.1.8 Conducting of Coordinating Committee meetings and actions taken by the
Coordinating Committee may be taken by vote given in an assembled
meeting or by telephone, video conferencing, telegraph, telex, letter, e-mail or
by any combination thereof, to the extent permitted by law.
Coordinatine Committee Responsibilities. In addition to those responsibilities
enumerated in Section 6.1, the Coordinating Committee shall have the following
responsibilities:
6.2.1 Provide liaison between SCPPA and the Participants at the management or
other levels with respect to the ongoing administration of the Project and
maintain a liaison between the SCPPA Participants and all other SCPPA
members with respect to the Project, and where the Coordinating Committee
deems it appropriate, maintain a liaison with the counterparties to any Project
Agreements and with any other entities or utilities engaged in or in
connection with other renewable energy projects.
6.2.2 Exercise general supervision over any subcommittee established pursuant to
Section 6.5.
6.2.3 Review, develop, discuss, and, ifappropriate, recommend, modift or approve
all budgets and revisions thereof prepared and submitted by SCPPA or the
Project Manager at the request ofthe Coordinating Committee or pursuant to
any applicable agreement.
6.2.4 Review, develop, discuss, and, if appropriate, modify, approve or otherwise
act upon any systems or procedures for adjustment of the Annual Budget or
any alternative methodologies for budgeting or billing as set forth in Section
5 and Section 7 ofthis Agreement.
6-2.5 Carry out all other actions reposed in the Coordinating Committee with
8
respect to budgeting and bilting as set forth in Section 5 and Section 7 of this
Agreement.
6.2.6 Review, discuss and attempt to resolve any disputes among the SCppA
Participants or the parties to any Project Agreements including, without
limitation, the Power Purchase Provider, the counterparties under the power
Purchase and Security Agreements or any other counterparty with respect to
any Project Agreement.
6.2.7 Make recommendations to the Project Manager, the Board of Directors or to
the counterparties to any of the Project Agreements, as appropriate, with
respect to the ongoing administration ofthe Project.
6.2.8 Review, develop, and if appropriate, modi! and approve rules, procedures
and protocols for the administration of the Project or Project Agreements,
including rules, procedures and protocols for the management of the costs of
the scheduling, handling, tagging, dispatching and crediting of Facility
Output and the handling and crediting of Environmental Athibutes associated
with the Project.
6.2.9 Review, and, if appropriate, modifi, approve or otherwise act upon the form
or content of any written statistical, administrative, or operational reports,
solar energr related data" electric generation information, solar energy
production data, and technical information, faciliry reliability data,
transmission information, forecasting scheduling, dispatching, tagging,
parking, exchanging, balancing, movement, or other delivery information,
climate and weather related matters, regulatory matters or requirements, and
other information and other similar records or matters pertaining to the
Project which are fumished to the Coordinating Committee by the project
Manager as requested by the Coordinating Committee, or by the
counterparties to Project Agreements, experts, consultants or others.
6.2.10 Review, and, ifappropriate, modif,, approve or otherwise act upon, practices
and procedures as formulated by the Project Manager as requested by the
Coordinating Committee or, if applicable, the counterparry to any project
Agreement, to be followed by the SCPPA Participants for, among other
things, the production, scheduling, tagging, transmission, delivery, balancing,
exchanging, crediting, tracking, monitoring, remarketing, sale or disposition
of Facility Output.
6.2.1I Review, modifi and approve, if appropriate, any activities with respect to the
performance of any Project Agreement, including policies for selection and
utilization of contractors and consultants included in the budgets with respect
to the Project. In approving such activities, consideration may be given, if
possible, to each SCPPA Participant's electric system conditions, which may
prevail during such planned activities.
6.2.12 Review, and, if appropriate, recommend, modif, approve or otherwise act
with respect to the exercise of SCPPA's rights under the Power purchase
9
Agreement or review, recommend, approve or otherwise act with respect to
the procurement of resources in connection with the Power Purchase
Agreement.
6.2.13 Review, modi!, approve or otherwise act upon any proposed change,
extension or modification of any date ser forth in Aftachment I of the Power
Purchase Agreement of the milestone schedule or to any Milestone under the
Power Purchase Agreement as the Coordinating Committee shall deem to be
desirable, appropriate or otherwise in SCPPA's interest. The Coordinating
Committee may impose such other terms, conditions or qualifications upon
any such action as the Coordinating Committee shall deem appropriate.
6.2.14 Review and act upon any present, potential or possible future anticipated
failure to deliver Guaranteed Generation under the Power Purchase
Ageement in such manner as the Coordinating Committee shall deem
appropriate.
6.2.15 Review, and if appropriate, recommend, modi! or approve practices and
procedures formulated by the Project Manager, as requested by the
Coordinating Committee, or by any counterparty to any Project Agreements
giving due recognition to the needs ofall SCPPA Participants.
6.2.16 Review and act upon any matters involving any of the applicable Power
Purchase and Security Agreemenb, any guarantee or letter of credit delivered
to or for the benefit of SCPPA by the Power Purchase Provider or any other
counterparty to any Project Agreement in connection with the Project, and
take such actions or make such recommendations as may be appropriate or
desirable in connection therewith.
6.2.17 Review, modi! or approve recommendations of the Project Manager or
counterparties made pursuant to the provisions ofany Project Agreement.
6.2.18 Review, modi! and where appropriate, recommend or approve the
implementation of metering technologies and methodologies appropriate for
the delivery, accounting for, transferring and crediting of the Facitity Output
to the Point ofDelivery of from any ofthe Point of Delivery to other points or
destinations, as applicable.
6.2.19 Review, modi$ and where appropriate, recommend or approve all Consent
Agreements.
6.2.20 Review, examine modi! and where appropriate, recommend or approve the
implementation ofmethods for addressing curtailments or other.
6.2.21 Review, modiff and where appropriate, recommend or approve the
implementation of practices and procedures to implement the provisions of
Section t herein, as may be applicable with respect to any of the SCPPA
Participants.
l0
6.2.22 Review and approve adjustments to the participant Facility Output Shares, the
Participant Facility Output Cost Shares and associated capacity amounts set
forth in Attachment B when and as required by this Agreement; provided, that
such resolution shall require the affirmative vote of purchaser,s representativeif such adjustment would change a participant Facitity Output Share,
Participant Facility Output Cost Share and associated capacity amount unless
such adjustment is due to the Default ofany participant (including purchaser)
under Section I I of this Agreement.
6.2.23 Perform such other functions and duties as may be provided for under this
Agreement, the Power Purchase Agreement, the Power purchase and Security
Agreement or any other applicable Project Agreement or as may otherwise be
appropriate or beneficial to the Project.
Manaqement Decisions and the Role of Board of Directors. To the extent not
provided for under this Agreement, the rights and obligations of SCppA under the
Project Agreements shall be subject to the ultimate control at all times ofthe Board of
Directors. Purchaser shall be entitled to participate in the decisions of the Board of
Directors with respect to SCPPA's rights and interests with respect to the project as
provided in this Section 6.3. SCPPA through the Board of Directors shall have, in
addition to the duties and responsibilities set forth elsewhere in this Agreement, the
following duties and responsibilities, among others:
6.3.1 Dispute Resolution. The Board ofDirectom shall endeavor to review, discuss
and attempt to resolve any disputes among SCPPA, the SCPPA Participants
and the counterparties under the Project Agreements relating to the project,
the operation and management of the Facility, and SCppA,s rights and
interests with respect to the Facility.
6.3.2 Schedulins Procedures- When recommended by the Project Manager, or
when otherwise appropriate, the Board of Directors shall act upon and
approve or modi! the practices and procedures to be followed by rhe SCppA
Participants for scheduling, delivering, controlling and allocating the Facility
Output.
6.3.3 Proiect Aqreements. The Board of Directors shall have the authority to
approve the Project Agreements and to review modifi and approve, as
appropriate, all amendments, modifications and supplements to the project
Agreements.
6.3.4 Budsetine. The Board of Directors shall review, modiry and approve each
Annual Budget and the revisions thereto in accordance with Section 5.4 of
this Agreement.
6.3.5 The
Board of Directors shall review, modifo and approve recommendations of the
Project Manager as to the application of any payments or amounts received
by SCPPA from any source or as a result of Default by the power purchase
Provider under the Power Purchase Agreement; provided that such payments
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7.
and amounts shatl be applied to one ot more of the purposes set forth in
Section 4.3.
6.3.6 Other Matters. The Board of Directors is authorized to perform such other
functions and duties, including oversight ofthose matters and responsibilities
addressed by the Project Manager, as may be provided for under this Power
Sales Agreement and under the other Project Agreements, or as may
otherwise be approPriate.
6-4 Periodic Audits. The Board of Directors may arrange for the annual audit under
Section 5.6 of this Agreement by certified accountants, selected by SCPPA and
experienced in electric generation or electric utility accounting, of the books and
accounting records of SCPPA, and where deemed appropriate the Project Manager (if
other than SCPPA), the Power Purchase Provider (to the extent provided under any of
the Power Purchase and Security Agreements) and any other counterparty under any
Project Agreement to the extent allowable, and any cost reimbursable consultant
relevant to the administration of the Project, and such audit shall be completed and
submitted to SCPPA ils soon as reasonably practicable after the close of the Fiscal
Year. SCPPA shatl promptty furnish to Purchaser copies of all audits. No more
frequently than once every calendar year, the Purchaser may, at its sole cost and
expense, audit or cause to be audited the books and cost records of SCPPA, the
Project Manager (if other than SCPPA), the counterparty under any Project
Agreement to the extent so provided in the applicable Project Agreement, and any
cost reimbursable consultant relevant to the administration ofthe Project.
6.5 Additionat Committees. The Board of Directors may establish as needed
subcommittees including, but not limited to, auditing, legal, financial, engineering,
mechanical, weather, diumal, barometric, meteorological, operating, insurance,
governmental relations, environmental and public information subcommittees. The
authority, membership, and duties of any subcommittee shall be established by the
Board of Directors; provided, however, such authority, membership or duties shall
not conflict with the provisions ofany ofthe Project Agreements.
6.6 Costs of Consultants. Costs (or the applicable portion thereo| of consultants and
others employed or appointed by the Board of Directors to perform the duties
required hereunder shall be inctuded in Total Power Costs, as appropriate, and shall
be billed to SCPPA or the Project Manager (ifother than SCPPA).
CHARGES AND BILLINGS.
7.1 Monthlv Costs. The amount of Monthly Costs which shall be paid by Purchaser for a
particular Month shall be the sum ofthe following:
7.1.1 Purchaser's Pafticipant Facility Output Cost Share multiplied by the Delivery
Output cost component of Total Power Costs (as provided in Section 4.3.1)
for such Month.
7.1.2 Purchaser's Participant Facility Output Cost Share multiplied by the Power
Purchase Agreement General and Administrative cost component of Total
t2
7.2
Power Costs (as provided in Section 4.3.2 hereof) for such Month.
7.1.3 Purchaser's share of the Supplementary Services cost component of Total
Power Costs (as provided in Section 4.3.3 hereof) based on Purchaser's
allocated share of any such services procured by SCPPA on behalf of the
Purchaser for such Month.
7.1.4 Purchaser's Panicipant Facility Output Cost Share multiplied by the Reserve
Fund cost component of Total Power Costs (as provided in Section 4.3.4
hereof) for such Month.
7.1.5 Purchaser's Participant Facility Output Cost Share muttiplied by the Power
Purchase and Security Agreements cost component of Total Power Costs (as
provided in Section 4.3.5 hereo! for such Month.
Billine Statement. By the fifth Day ofeach Month during each Power Supply Year,
SCPPA shall bill Purchaser for the amount of Monthly Costs to be paid by Purchaser
for the current Month by providing Purchaser with a Billing Statement in accordance
with the charges established pursuant to the provisions of this Agreement; provided,
however, that such Billing Statement, with respect to the cost of Facility Output
provided by SCPPA to Purchaser under this Agreement, shall also include with
respect to the performance by SCPPA or the counterparty under and pursuant to
applicable Project Agreements, any charge or credit to Purchaser with respect to the
costs or revenues attributable to Purchaser pursuant to and under any applicable
Project Agreement. Such Billing Statement shall detail the costs described in
Section 7.1 hereof and shall set forth, among other things, the amounts due for such
Month by Purchaser with respect to the items of Monthly Costs set forth in
Section 7.1, as such Monthly Costs may be adjusted fiom time to time in accordance
with Section 5 and this Section 7. Such Bitling Statement shall be paid by Purchaser
on or before 20 Days after receipt ofsuch Billing Statement.
Adoption of Altemative Billinq Statement Procedures. The Coordinating Committee
may recommend the adoption of an altemative Billing Statement billing methodology
in connection with each SCPPA Participant's Billing Statement with respect to the
Total Power Costs and the costs associated with any Project Agreement. Such
alternative Billing Statement procedures may be placed into effect with the approval
ofthe same by resolution of the Board of Directors. Any such altemative Billing
Statement billing methodology shall be fiscally prudent, financially sound and shall
assure coverage ofall potential and actual costs and obligations ofSCPPA.
Disputed Monthlv Billinq Statement. In case any portion of any Billing Statement
received by Purchaser from SCPPA shall be in bona fide dispute, Purchaser shall pay
SCPPA the full amount of such Billing Statement and, upon determination of the
correct amount, the difference between such correct amount and such full amount, if
any, including interest at the rate received by SCPPA on any overpayment, will be
credited to Purchaser by SCPPA after such determination; provided, however, that
such interest shall not accrue on any overpayment that is acknowledged by SCPPA
and retumed to Purchaser by the fifth Day following the receipt by SCPPA of the
disputed overpayment. In the event such Billing Statement is in dispute, SCPPA will
7.3
7.4
13
8.
give consideration to such dispute and will advise Purchaser with regard to SCPPA's
position relative thereto within 30 Days following receipt of wriften notification by
Purchaser of such dispute.
7.5 Reconciliation ofMonthlv Costs. As soon as practicable after the end ofeach Power
Supply Year, or more frequently if so determined by the Board of Directors, SCPPA
will submit to Purchaser and each of the other SCPPA Participants a detailed
statement of the actual aggregate Monthly Costs and other amounts payable
hereunder, including any credits thereto, for all of the Months of such Power Supply
Year, and the adjustments ofthe aggregate Monthly Costs and other amounts payable
hereunder, if any, for any prior Power Supply Year, based on the annual audit of
accounts provided for in Section 5.6. If, on the basis ofthe statement submitted as
provided in this Section 7.5, the actual aggregate Monthly Costs and other amounts
payable by the Purchaser for any Power Supply Year exceed the amount thereof
which Purchaser has been billed, Purchaser shall pay SCPPA, within 20 Days of
receipt ofSCPPA's invoice, the amount to which SCPPA is entitled. If, on the basis
ofthe statement submitted pursuant to this Section 7.5, the actual aggregate Monthly
Costs or other amounts payable by the Purchaser for any Power Supply Year are less
than the amount therefor which Purchaser has been bilted, SCPPA shall, unless
otherwise directed by Purchaser with respect to moneys owed to it, credit such excess
against Purchaser's next monthly Billing Statement.
7.6 Other or Additional Cost Reconciliation Mechanisms. The Board of Directors may,
by resolution, authorize or prescribe other bitling, payment, costing and cost
reconciliation mechanisms to address such billing, payment, costing and cost
reconciliation issues as may fiom time to time arise with respect to the Project.
7.7 Preoavment of Monthlv Costs. Purchaser may, atany time, pay moneys to SCPPA or
utilize any credits due or amounts owed by SCPPA to Purchaser with respect to the
Project for the purpose ofprepaying its monthly Billing Statement. Such moneys and
amounts owed by SCPPA under any Project Agreement shall be deposited into an
account established by, or at the direction ol SCPPA. Consistent with SCPPA's
investment policy, moneys in such account shall be invested pursuant to instructions
provided to SCPPA by Purchaser and all investment income shall be credited to such
account. Payment ofthe amount ofany monthly Billing Statement or Default Invoice
shall be made fiom moneys available in such account to the extent set forth in wriften
directions fiom Purchaser to SCPPA received at least five business days prior to the
due date of such payment. Any credit or prepayment with respect to its monthly
Billing Statement shall not relieve or reduce Purchaser's other obligations under this
Agreement.
UNCONDITIONAL PAYMENT OBLIGATIONS; RATE COYENA]TIT;
AUTHORIZATIONS; CONFLICTS; LITIGATION.
8.1 Unconditional Pavment Oblieation. Beginning with the earliest of (i)the date
SCPPA is obligated to pay any portion ofthe costs of the Project, (ii) the date upon
which SCPPA first incurs or accrues costs associated with the issuance of the Bonds,
(iii) the date of Commercial Operation of the Facitity, or (iv) the date of the first
detivery of Facility Output to Purchaser and continuing through the term of this
14
8.2
Agreement, Purchaser shall pay SCppA the amounts of Monthly Costs set forth in
the Billing Statements submitted by or on behalf of SCppA to purchaser in
accordance with the provisions of Section 7 hereof and, without duplication, any
amount set forth in any Default lnvoice received by purchaser as a result of the
operation of Section I I hereof, whether or not this Agreement has been terminated,
or the Project or any part thereof has been completed, is functioning, producing,
operating or operable or its output is suspended, intemrpted, interfered with, reduced
or curtailed or terminated in whole or in part, and such payments shall not be subject
to reduction whether by offset or otherwise and shall not be conditional upon the
performance or nonperformance by any party of any agreement for any cause
whatsoever.
Source of Pavments. The Purchaser hereby represents and warrants that the
obligations of Purchaser to make the payments to SCppA under this Agreement shall
constitute a cost of purchased power and an operating expense of purchaser payable
solely from its electric revenue fund, inctuding any and all legally available electric
system reserves. Purchaser will annually in each and every fiscal year of purchaser
during the term of this Agreement include in its power system budget, whether or not
any other items are included, an appropriation from the revenues of its electric system
(including moneys derived from sales to third parties) sufficient to satisfu all the
payments required to be made in such year under this Agreement until all payments
required under this Agreement have been paid in full.
Rate Covenant. Purchaser will establish, maintain and collect rates and charges for
the electric service of its electric system each year so as to provide revenues
sufficient, together with any legally available electric system reserves, to enable
Purchaser to pay to SCPPA all amounts payable when due under this Agreement and
to pay all other amounts payable from, and all lawful charges against or liens on, the
revenues of its electric system.
Authorizations. The Purchaser hereby represents and warrants that no order,
approval, consent or authorization ofany govemmental or public agency, authority or
person, is required on the part of the Purchaser for the execution and delivery by the
Purchaser of this Agreement, or the performance by the purchaser of its obligations
under this Agreement except for such as have been obtained.
Conflicts. Purchaser represents and warrants to SCPPA as of the Effective Date that,to Purchaser's knowledge, the execution and delivery of this Agreement by
Purchaser, and Purchaser's performance thereunder will not constitute a default under
any agreement or instrument to which it is a party, or any order, judgment, decree or
ruling of any court that is binding on Purchaser, or a violation of any applicable law
of any governmental authority, which default or violation would have a material
adverse effect on the financial condition ofPurchaser's electric revenue fund.
Litiqation. Purchaser represents and warrants to SCppA as of the Effective Date that,to Purchaser's knowledge, except as disclosed, there are no actions, suits or
proceedings pending against Purchaser (service of process on purchaser having been
made) in any court that questions the validity of the authoriztion, execution or
delivery by Purchaser of this Agreement, or the enforceability as to purchaser of this
8.3
8.4
8.5
8.6
t5
9.
Agreement.
OTHER Tf,RMS AND SERVICES.
9.1 Deliverv Procedures. Prior to the time at which any Energy will be delivered to
p*"h^.. f.onr the Facility, Purchaser witl schedule and shall be obligated to take
deliveryoftheEnergytobedeliveredunderthisAgreement.TheFacilityoutput
generaied and produced from the Project shall be scheduled and delivered to
Furchaser at the Point of Delivery under the practices and procedures approved
pursuant to Section 6.2, as applicable.
9.2 Other Services and Transmission From Point of Delivery. It is the obligation of
Purchaser to receive its Participant Facility output Share and to arrange for delivery
of such Facility output to its ultimate destination or destinations after having reached
the Point of Delivery, as determined by Purchaser. However, to the extent specified
by the Purchaser, and to the extent practicable for SCPPA to do so, SCPPA shall
assist in arranging for Supplementary Services and for such additional transmission,
interconnection arrangements, enerry management, firming, shaping, swaps,
exchanges or other services associated with the transmission, use or disposition of
Facility Output to be utitized by the Purchaser and to provide for delivery, accounting
for, transferring and crediting the ownership and transfer ofsuch Facility Output fiom
the Point of Delivery to any other points or destinations, as determined by the
Purchaser.
9.3 Enerqv Services. Except as otherwise provided in this Agreement, nothing herein
shall prevent or restrict Purchaser fiom providing for its own transmission, enersi
management services, firming, balancing, or exchanging services or otherwise using
or dispatching its Energy under this Agreement; provided, however, that such
services, use or activities shall not affect any of the obligarions of Purchaser under
this Agreement.
9.4 [Reserved.l
9.5 Balancine Aqent and Dvnamic Schedulins. Upon the request of Purchaser, SCPPA
shall either (i) retain an agent to maintain and balance Purchaser's hourly Energy
schedules in accordance with WECC protocols ("Balancing Agent"), including the
provision or absorption of imbalance energy to accommodate intra-hour fluctuations
of Facility Output as compared to Purchaser's Energr schedule and maintaining a
balancing account of accumulated imbalance enerry to be settled by adjusting future
Purchaser Energy schedules, (ii) anange for Dynamic Scheduling from the Point of
Delivery to Purchaser's control area or electric system, including the procurement
and installation of scheduling hardware, software, and communications equipment
necessary to effectuate Dynamic Scheduling, (iii) procure, contract for or otherwise
anange for any available integration services to address any of the above referenced
imbalances, fluctuations, variability, intermittency, or like conditions or (iv) address
the costs, charges or consequences of such imbalances, fluctuations, variability,
intermittency, or like conditions though other mechanisms or methodologies which
are mutually agreeable to the Purchaser and SCPPA.
l6
9.6 Transfer of Environmental Attributes to Purchaser. SCppA shall transfer all
Environmental Aftributes received by SCPPA under the power purchase Agreement
to Purchaser in the same manner by which SCPPA receives Environmental
Attributes.
PROJECT SPECIFIC MATTERS AND PURCHASER RIGHTS AND
OBLIGATIONS UNDER PROJECT AGREEMENTS.
l0.l Rig}ts and Oblieations under the Proiect Aqreements. Notwithstanding anything to
the contrary contained herein: (i) the obligation of SCPPA to deliver to purchaser its
Panicipant Facility Output Share during the Delivery Term of this Agreement is
limited to the Facility Output which SCPPA receives fiom the power purchase
Provider for redelivery to Purchaser hereunder during such time; (ii) the obligation of
SCPPA to pay any amount to Purchaser hereunder or to give credits against amounts
due from Purchaser hereunder is limited to amounts SCPPA receives in connection
with the transaction to which the payment or credit relates (or is otherwise availabte
to SCPPA in connection with this Agreement for which such payment or credit
relates); (iii) any purchase costs, operating costs, energy costs, capacity costs,
environmental attribute costs, transmission costs, tax costs, insurance costs,
indemnifications, other costs or other charges for which SCPPA is responsible under
the Project Agreements shall be considered purchase costs, operating costs, energy
costs, capacity costs, environmental attribute costs, transmission costs, tax costs,
insurance costs, indemnifications, other costs or other charges incurred by SCPPA
and payable by SCPPA Participants as provided in this Agreement; and (iv) any
Force Majeure under the Power Purchase Agreement or other event of force majeure
affecting the delivery of energy pursuant to applicable provisions of the project
Agreements shall be considered an event caused by Uncontrollable Forces affecting
SCPPA with respect to the delivery of energy and./or Environmental Attributes
hereunder and SCPPA forwarding to Purchaser notices and information from the
Power Purchase Provider conceming an event of Force Majeure upon receipt thereof
shall be sufficient to constitute a notice that Uncontrollable Forces have occurred
pursuant to Section [2.2 of this Agreement. Any net proceeds received by SCPPA
from the sale ofGuaranteed Generation by the Power Purchase Provider to any third-
party purchaser as a result of a Force Majeure event or failure by SCPPA to accept
delivery of Energy pursuant to the Power Purchase Agreement shalt be remifted by
SCPPA to Purchaser.
10.2 Revision of Attachment B. The Parties agree that adjustments of the Participant
Facility Output Shares, Participant Facility Output Cost Shares and associated
capacity amounts in Attachment B in compliance with this Agreement shall be made
and treated as an element of administration and not an amendment of this Agreement.
The revised Attachment B shall become Attachment B to this Agreement in
replacement ofthe prior Attachment B hereof.
NONPERFORMAIICE AND PAYMENT DEFAULT.
I l.l Nonperformance bv Purchaser. If Purchaser shall fail to perform any covenant,
agreement or obligation under this Agreement or shall cause SCPPA to be in default
with respect to any undertaking entered into for the Project or to be in default under
10.
ll.
t7
the Power Purchase Agreement, or any other Project Agreement, as applicable, or
cause a default to occur pursuant to such agreements, SCPPA may, in the event the
performance of any such obligation remains unsatisfied after thirty (30) Days' prior
written notice thereof to the Purchaser and a demand to so perform, take any action
permitted by law to enforce its rights under this Agreement, including but not limited
to termination of this Agreement, and./or (unless SCPPA has already taken action
pursuant to the immediately following sentence) bring any suit, action or proceeding
at law or in equity as may be necessary or appropriate to recover damages and/or
enforce any covenant, agreement or obligation against the Purchaser with regard to its
failure to so perform.
ll-2 Notice of Pavment Default. In the event ofa Payment Default by Purchaser, on or
promptly following the Initial Payment Default Date SCPPA shall issue a Default
lnvoice and shall provide written notice to Purchaser that as a result of a Payment
Default, it is in default under this Agreement and has assumed the status of a
Defaulting Purchaser and that Purchaser's Project Rights are subject to
discontinuance, termination and disposal in accordance with Sections I 1.4 and I I .5
of this Agreement. Notice of such Payment Default shall be provided promptly by
SCPPA to the other SCPPA Participants. ln addition to the foregoing, the notice of
Payment Default shall speciff that five (5) Days after the issuance of the written
notice of Payment Defautt by SCPPA, deliveries of Facility Output to the Purchaser
pursuant to this Agreement shall be thereafter suspended until such time as Purchaser
is in Compliance. SCPPA may take any action through or in conjunction with the
Power Purchase Provider or any other counterparty under a Project Agreement or
with the Project Manager, ifapplicable, to expeditiously implement the provisions of
this Section I l.
I1.3 Cured Pavment Default. If after a Payment Default, Purchaser cures such Payment
Default within thirty (30) Days (the Cure Period) its Project Rights shall not be
subject to discontinuance, termination or disposal as provided for in Sections ll.4
and ll.5 ofthis Agreement as a result ofany Payment Default associated with such
Cured Payment Default.
I1.4 Failure to Cure Pavment Default. li at any time after expiration ofthe Cure Period
Purchaser fails to be in Compliance due to its failure to cure its Payment Default in a
timely manner in accordance with this Agreement, Purchaser's Project Rights shall
immediately be discontinued and terminated and its Project Rights and Obligations
shalt be disposed of by SCPPA in accordance with Section I I .5 of this Agreement;
provided, however, the Defaulting Purchaser's obligation to make payments under
this Agreement shall not be eliminated or reduced except to the extent provided in
Section I1.6. SCPPA shall provide to the Defaulting Purchaser a separate monthly
invoice of any such payment obligations under this Agreement. SCPPA shall
immediately notiry the Project Manager (if other than SCPPA), the other SCPPA
Participants and such others as SCPPA deems appropriate, of such discontinuance
and termination ofthe Defaulting Purchaser's Project Rights.
I 1.5
Pavment Default. In the event Defaulting Purchaser's Project Rights are
discontinued and terminated pursuant to Section 11.4 of this Agreement, SCPPA
18
shall undertake or cause to be undertaken the following actions in the order indicated:
I I .5.1 SCPPA shall, to the extent permitted under the project Agreements, offbr to
convey, transfer and assign to all non-Defaulting SCppA participants, on a
temporary or permanent basis as determined by SCppA, the project Rights
and Obligations of the Defaulting Purchaser, and SCppA shall so convey,
transfer and assign on such basis so determined by SCppA to (i) all
requesting non-Defaulting SCPPA Participants the amount of project Rights
and Obligations requested if the aggregate of such requests does not exceed
the amount of the Project Rights and obligations of the Defaulting purchaser,
or (ii) all requesting non-Defaulting SCppA participants on a pro-rata basis
(based upon the amount requested) if the aggregate of such requests exceeds
the amount of the Project Rights and Obligations of the Defaulting purchaser.
Each such requesting non-Defaulting Participant shall assume all, but not less
than all, Project Rights and Obligations so conveyed, transferred and assigned
to it by SCPPA.
I I .5.2 If all Defaulting Purchaser's Project Rights and Obligations are not conveyed,
transfened and assigned to non-Defaulting SCPPA participants as provided in
Section I1.5.1 of this Agreement, SCppA shall, to the extent permitted under
the Project Agreements and to the extent SCPPA in its discretion determinesit appropriate, offer to convey, transfer and assign, on a temporary or
permanent basis as determined by SCPPA, the remainder (or, all, if
applicable) of Defaulting Purchaser's Project Rights and Obligations to third
parties, all in accordance with applicable law. Each such requesting third
party shall assume all, but not less than all, Project Rights and Obligations so
conveyed, transfered and assigned to it by SCPPA. Ifsuch third party is a
SCPPA Member but not a SCPPA Participant as defined herein, such
Member, upon accepting such conveyance, transfer and assignment on a
permanent basis, shall be deemed a SCPPA Participant.
I1.5.3 Il at any time or from time to time, any ofthe Project Rights and Obligations
of the Defaulting Purchaser are not conveyed, transferred and assigned as
provided in Sections 11.5.1 or I 1.5.2 of this Agreement, SCPPA shall use its
best efforts, to the extent reasonably possible and economically beneficial, to
offer all non-Defaulting SCPPA Participants and third parties, for long-term
or short-term sale as determined by SCPPA, Facility Output associated with
such Project Rights and Obligations or to remarket or resell such Facility
Output, or cause the same to be remarketed or resold; provided, however, that
without eliminating Defaulting Purchaser,s obligation to make payments
under this Agreement (notwithstanding anything ro the contrary in this
Agreement), including payment of SCPPA,s costs and expenses related to
such default and sale, such payment obligation shall be offset, mitigated and
satisfied to the extent that payments are received by SCppA from the
remarketing or sale of Facility Output associated with Defaulting purchaser,s
Project Rights.
11.5.4 Il at the time of any Coordinating Committee meeting, any of Defaulting
Purchaser's Project Rights and Obligations are not conveyed, transferred and
l9
assigned as provided in Sections I 1.5.1 or I 1.5.2, the associated voting rights
with respect to Defaulting Purchaser's Proiect Rights and Obligations shall be
redistributed pro rata among the non-Defaulting SCPPA Participants, based
upon the Participant Facility Output Share ofsuch SCPPA Participant, so that
the total voting rights remain at 10006.
11.5.5 Upon the termination, conveyance, transfer or assignment of a Defaulting
Purchaser's Project Rights and Obligations pursuant to Section ll '4 and this
Section I 1.5, SCPPA shall make any necessary adjustments to the Participant
Facility Output Shares set forth in Attachment B and give written notice
thereof to the non-Defaulting SCPPA Participants. Such adjustments shall
not require approval by the Coordinating Committee.
Except as provided in this Section ll.5 or otherwise in this Agreement,
SCPPA may not convey, transfer or assign any SCPPA Participant's Rights
and Obligations without the prior written consent ofthe SCPPA Participant.
I 1.6 Elimination or Reduction of Pavment Oblisations. Upon termination of Defaulting
Purchaser's Project Rights pursuant to Section ll.4 and conveyance, transfer or
assignment of Defaulting Purchaser's Project Rights and Obligations pursuant to
Sections I I .5.1 or I I .5.2, Defaulting Purchaser's obligation to make payments under
this Agreement (notwithstanding anything to the contrary in this Agreement) shall not
be eliminated or reduced except to the extent of moneys received by SCPPA as a
result of the conveyance, transfer and assignment of Defaulting Purchaser's Project
Rights and Obligations, less SCPPA's related costs and expenses; provided, however,
such payment obligations for Defaulting Purchaser may be eliminated or reduced to
the extent permitted by law, if and to the extent any costs incurred by SCPPA have
been fully paid, and the Board of Directors, by resolution, determines to eliminate or
reduce such payment obligations, which determination shall not be unreasonably
withheld.
ll.7 Use ofOoeratins Reserve Account. With respect to a Payment Default by Purchaser,
funds in the operating reserve account, if any, held by SCPPA may be used, to the
extent necessary and to the extent available, to cover any deficiency with respect to
any payment due by SCPPA attributable to Purchaser's participation in the Project.
Any replenishing of any operating reserve account held by SCPPA shall be in
accordance with rules and protocols promulgated by SCPPA.
ll.8 Step-Up Invoices. Step-Up Invoices shall be issued in accordance with the
provisions set forth below.
ll.8.l tn the event ofa Payment Default by one or more Defaulting SCPPA
Participants, which is in existence following the Operating Reserve Depletion
Date, SCPPA shall provide by the fifth Day of the Month following such
Operating Reserve Depletion Date, a separate Step-Up lnvoice to each non-
Defaulting Participant that includes a charge equal to the non-Defaulting
SCPPA Participant's pro mta share, based upon the Participant Facility
Output Cost Shares of all non-Defaulting SCPPA Participants, of the amount
of Monthly Costs reflected in the unpaid Billing Statements for the previous
20
Month for such Defaulting Purchaser). Notwirhstanding the foregoing, the
amount of each monthly Step-Up Invoice provided to a non-Defaulting
Participant shall not exceed 100% of the aggegate amount of Monthly Costs
that such non-Defaulting Participant was billed in its Billing Statement for the
Month preceding such monthly Step-Up Invoice.
I 1.8.2 Step-Up lnvoices shall be due and payable within twenty (20) Days of the
receipt thereot and payments to SCppA with respect to Step-Up Invoices
shall be separate from any other payments due under each SCppA
Participant's Power Sales Agreement, including but not limited to monthly
Billing Statement payments.
r 1.9
Moneys received by or on behalf of SCPPA from the payment of Step-Up Invoices
relating to a Payment Default of a Participant shalt be applied in the following
manner.
I I .9. I All moneys received from the SCPPA Participants with respect to the amount
of Monthly Costs as set forth in the StepUp Invoices, shall be applied toward
the Defaulting SCPPA Participant's Monthly Costs.
11.9.2 ln the event a Participant pays less than the total amount of its Step-Up
Invoice, such Participant shall be a Defaulting participant and its partial
payment shall be allocated first toward the Monthly Costs of the Defaulting
SCPPA Participant.
I I .10 Aoolication of Moneys Received fiom Default Invoices. Moneys received by or on
behalfofSCPPA from the payment of Default Invoices shall be credited on each non-
Defaulting SCPPA Participant's next monthly Billing Statement or Billing
Statements in an amount equal to the aggregate amount such non-Defaulting
Participant paid as a result of Step-Up Invoices with respect to such Default Invoice,
plus a pro-rata share, based upon the Participant Facility Output Cost Shares of the
non-Defaulting SCPPA Participants, of the amount SCppA received regarding late
payment interest charges. In the event of a Defaulting participant pays less than the
full amount of its Default Invoice, rhe credit to each non-Defaulting participant shall
be adjusted proportionately.
ll.ll Aoolication of Monevs Received from Compliance pavments. Moneys received by
or on behalfofSCPPA from a Defaulting SCPpA participant that makes payments to
remain in Compliance with respect to a Payment Default, associated with a
Defaulting SCPPA Participant's payments to remain in Compliance, shall be credited
on each non-Defaulting SCPPA Participant's next monthly Billing Statement(s) in an
amount equal to the aggregate amount such non-Defaulting SCppA participant paid
as a result of Step-Up Invoices with respect to such Compliance payment, plus a pro
rata share, based upon the Participant Facility Output Cost Shares of the non-
Defaulting SCPPA Participants, of the amount SCppA received regarding late
payment interest charges.
I l.l2 Aoolication of Monevs Received from Sale of Facilitv Outout. Moneys received by
2t
12.
or on behalf of scPPA from the sale of Facility output related to a Defaulting
SCPPA Participant's Project Rights and Obligations, as provided in Section ll'5'3
hereot shall be applied in the following manner in order:
t 1.12.1SCPPA shall credit on each non-Defaulting SCPPA Panicipant's next
monthly Billing Statement(s) an amount up to, but not in excess of,, the
aggregate amount paid to SCPPA by such non-Defaulting SCPPA Participant
with resp€ct to each such non-Defaulting SCPPA Participant's Step-Up
Invoices.
I I .12.2 Following consultation with the non-Defaulting SCPPA Participants, SCPPA
shall determine the disposition of any moneys received that are in excess of
the aggregate amount of related Step-Up Invoices paid by non-Defaulting
SCPPA Participants. Unless the Coordinating Committee determines
otherwise, or except as otherwise required by law, the Defaulting SCPPA
Participant shall have no claim or right to any such monies.
I l.l3 No Steo-uo Before Issuance ofDebt. Sections I1.8 through I1.12.2, inclusive, ofthis
Agreement shall not be applicable until bonds or other debt obligations are issued or
undertaken by SCPPA in connection with the exercise of the Option Agreement, the
Storage Option Agreement, or in connection with any other matter or transaction
related to the Project.
CHARACTER, CONTINUITY OF SERYICE.
l2.l Outases. lnterruptions and Curtailment of Enerev Deliveries. The Power Purchase
Provider or other counterparty may under certain conditions set forth in the applicable
provisions of a Project Agreement or other applicable oPerating agreement, intenupt
or curtail deliveries of Facitity Output to Purchaser under prescribed circumstances
pursuant to the applicable provisions of a Project Agreement or other applicable
operating agreement. Should such an interruption or curtailment occur Purchaser
shall be credited with such revenues as are credited or paid to SCPPA on Purchaser's
behalf and shall be obligated to pay any costs incurred by SCPPA attributable to
Purchaser which are payable by SCPPA pursuant to the Power Purchase Agreement
or any other appticable Project Agreement. SCPPA or the Project Manager (if other
than SCPPA) or SCPPA's agent will use its best efforts to apprise Purchaser of
potential outages, interruptions or curtailments, the reason therefor and the probable
duration thereof, when such outages, interruptions or curtailments can be deemed
likely to occur.
12.2 Uncontrollable Forces. SCPPA shalt not be required to provide, and SCPPA shall not
be liable for failure to provide, Facility Output or other service under this Agreement
when such failure or the cessation or curtailment ofor interference with the service is
caused by Uncontrollable Forces or by the inability of the Power Purchase Provider
or other applicable counterparty to obtain any required governmental permits,
licenses or approvals to enable the Power Purchase Provider to acquire, administer or
operate the Project; provided, however, that Purchaser shall not thereby be relieved of
its obligations to make payments under this Agreement except to the extent SCPPA is
so relieved pursuant to the Project Agreements.
22
13.
14.
IReservedl
LIABILITY.
14.1 Particioants' oblieations Several. Except as otherwise provided in Section I I ofthis
Agreement, Purchaser and each of the other SCppA participants shall be solely
responsible and liable for performance under its respective power Sales Agreement.
The obligation of Purchaser to make payments under this Agreement is a several
obligation and not ajoint obligation with those ofthe other SCppA participants under
the other Power Sales Agreements to which such SCPPA Participants are parties.
l4.Z No Liability of SCPPA. Directors. Officen. Etc. purchaser agrees that neither
SCPPA nor any of its directors, officers, employees and agents shall be liable to
Purchaser for loss of profits or direct or consequential loss or damage suffered by
Purchaser as a result of the performance or non-performance (whether negligent or
otherwise) of SCPPA or any of its directors, officers, employees or agents under this
Agreement. To the fullest extent permitted by law, Purchaser releases SCppA and its
directors, officers, employees and agents from any claim or liability (whether
negligent or otherwise) as a result of any actions or inactions of SCppA under this
Agreement. No such performance or non-performance by SCPPA shall relieve
Purchaser from its obligations under this Agreement, including its obligation to make
payments required under this Agreement, and such undisputed payments shall not be
subject to any reduction, whether by offset, counterclaim or otherwise. The
provisions of this Section 14.2 shall not be construed so as to relieve SCPPA from
any obligation under this Agreement.
14.3 Extent ofExculoation: Enforcement ofRishts. The exculpation provision set fofth in
Section 14.2 hereof shall apply to all types of claims or actions including, but not
limited to, claims or actions based on contract or tort. Nofwithstanding the foregoing,
Purchaser may protect and enforce its rights under this Agreement by a suit or suits in
equity for specific performance of any obligations or duty of SCPPA and purchaser
shall at all times retain the right to recover, by appropriate legal proceedings, any
amount determined to have been an overpayment by Purchaser in accordance with
Section 7.4 hereof.
14.4 Indemnification for Claims of Retail Customers. Purchaser shall assume all liability
for any claim, action orjudgment, whether or not caused by negligence, arising out of
or in connection with electric service to any of its retail customers caused by the
operation or failure of operation of the Facility or any portion thereof, and shall
indemni! and hold harmless SCPPA from any such claim, action or judgment
(including reasonable attorneys' fees and other costs ofdefense).
14.5 Determination or Enforcement of Riqhts. Notwithstanding the provisions of Sections
14.2, 14.3 and 14.4 hereof, Purchaser or SCPPA may determine, protect and enforce
its rights under this Agreement by a suit or suits in equity for specific performance of,
or declaratory action with respect to, any obligation or duty hereunder or thereunder.
14.6 No Relief From Insurer's Obliqations. Notwithstanding any provision in this
Agreement to the contrary, including but not limited to the provisions in this Section
23
14, the provisions of this Section l4 shall not be construed or applied so as to relieve
any insurer of its obligation to pay any insurance claims in accordance with any
applicabte insurance policy provided under the Project Agreements.
| 4.7
Liabiliw ofSCPPA. It is hereby recognized and agreed that no member ofSCPPA's
Board of Directors, officer, employee or agent of SCPPA or member of SCPPA in its
capacity as a member of SCPPA shall be individualty liable in respect of any
undertakings by SCPPA under this Agreement. The undertakings by SCPPA under
the Power Sales Agreements shall never constitute a debt or indebtedness of SCPPA
within the meaning ofany provision or limitation ofthe Constitution oI statutes ofthe
State of Califomia and shall not constitute or give rise to a charge against its general
credit.
RESTRICTIONS ON DISPOSITION.
l5.l Assiqnment. It is understood and agreed each SCPPA Participant (inctuding
Purchaser) may sell, assign or otherwise dispose of some or all of its Project Rights
and Obligations to other SCPPA Participants or SCPPA members under the same
terms and conditions as set forth in this Agreement, provided that each such other
participating SCPPA member agrees in writing to be bound by the provisions ofthe
Power Sales Agreement of the SCPPA Participant making such sale, assignment or
other disposition. In the event of such a sale, assignment or other disposition, SCPPA
shall revise Attachment B to reflect the new Participant Facitity Output Share
allocation and such revision to Attachment B shall not be considered an amendment
to any Power Sales Agreement.
15.2 Restrictions on Elimination of Pavment Oblisations. No sale, assignment or other
disposition of Purchaser's Project Rights and Obligations to any Person ("Assignee")
shall release Purchaser from its payment obligations under this Agreement; provided,
however, such payment obligations may be eliminated or reduced if the sale,
assignment or other disposition is made pursuant to Section l5.l of this Agreement,
or if (i) such Assignee shall assume and agree in writing to fully perform and
discharge the Project Rights and Obtigations under its Power Sales Agreement,
(ii) such Assignee shall have a corporate or long-term senior unsecured credit rating
ofA- or higher by S&P or A 3 or higher by Moody's, unless otherwise provided by
the Board of Directors, and (iii) the Board of Directors, by resolution, determines to
eliminate or reduce such payment obligations, which determination shall not be
unreasonably withheld.
15.3 Restrictions on Disoosition of Purchaser's Entire Svstem. Purchaser shall not sell,
lease or otherwise dispose of all or substantially all of its electric system to any
Person ("Acquiring Entity") unless the Acquiring Entity shall assume and agree to
fully perform and discharge the Project Rights and Obligations under this Agreement,
and such Acquiring Entity shall have a corporate or long-term senior unsecured credit
rating not less than investment grade.
15.4 Successors and Assisns. Subject in all respects to Sections ll and 15 hereof, the
Project Rights and Obligations under this Agreement shall inure to the benefit ofand
2.4
15.
shall be binding upon the respective successors and assigns of the Parties to this
Agreement.
16. f,FFECTIVE DATE, TERM AIID EXPIRATION.
l6.l Effective Date: Execution in Counterparts. This Agreement shall become effective
on the first Day when each and alr of the following shalr have occurred: (i) this
Agreement shall have been duly executed and delivered by SCppA and purchaser,
and (ii) the Power Purchase Agreement shall have been duly executed and delivered
by SCPPA and the Power Purchase provider. once the power purchase Agreement
has been executed and delivered as set forth above, SCppA shall deliver a copy ofthe
same to Purchaser. This Agreement may be executed in any number of counterparts,
each ofwhich shall constitute an original.
16.2 Termination Conditions. This Agreement shall be effective upon satisfaction ofthe
conditions set forth in Section 16.r and shall extend for the term specified in
Section 16.3 unless earlier terminated pursuant to an express provision of this
Agreement; provided, however, that any obligation to make payments to SCppA or
any outstanding liability of Purchaser hereunder which either exists or may exist as of
the date of termination of this Agreement, or which comes into existence at any
future time as a result of any activity or transaction implemented under this
Agreement, shall survive such termination.
16.3 Expiration. The term of this Agreement shall begin on the Day this Agreement
becomes effective pursuant to Section 16.l hereof. Unless terminated earlier
pursuant to Section '16.4, the term of this Agreement shall expire on the later of:
(i) the date SCPPA's Joint powers Agreement (including any extensions thereoo
expires or (ii) the date on which the Power Purchase Agreement is terminated and all
obligation(s) of the parties under the power purchase Agreement have been fully
satisfied or otherwise adequate provision for satisfaction of such obtigation(s) have
been made and no other such obligation(s) under the power purchase Agreement is
outstanding; provided, however, that in no event shall the term of this Agreement
expire so long as the Power Purchase Agreement is ofany force or effect.
16.4 Termination of Aereement before Exoiration Date. Notwithstanding the expiration
date set forth in Section 16.3 hereo!, this Agreement shall terminate on the date, if
any, by which each and all ofthe following have occurred:
16.4.1 rhis Agreement shall be superseded as a result of purchaser having (i) succeeded to
SCPPA's rights through another agreement or agreements, or (ii) entered into a
replacement power sales agreement or other agreement with SCppA. The purchase
price and consideration to be paid to SCPPA by purchaser with respect to any such
superseding arrangement shall consist of the payments and satisfaction of all
obligations by Purchaser under and pursuant to this Ageement prior to the effective
date of the superseding arrangement plus any remaining costs or obligations incurred
by SCPPA in connection with the Facility; and
16.4.2 The Power Purchase Agreement shall no longer be ofany force or effect.
25
17.SEVERABILITY. ln case any one or more of the provisions of this Agreement shall for
any reason be held to be illegat or invalid by a court of competent jurisdiction, it is the
intention of each of the Parties hereto that such illegality or invalidity shall not affect any
other provision hereof, but this Agreement shall be construed and enforced as if such illegal
or invalid provision had not been contained herein unless a court holds that the provisions are
not separable from all other provisions ofthis Agreement.
REPRESENTATION AND GOVERNING LAW. The Parties acknowledge that each
party was represented by counsel in the negotiation and execution ofthis Agreement. This
Agreement was made and entered into in the County of Los Angeles, Califomia, and shall be
govemed by, interpreted and enforced in accordance with the laws ofthe Siate ofCalifornia.
All litigation arising out of, or relating to this Agreement, shall be brought in a State or
Federal court in the Counry ofLos Angeles, State of Califomia. The Parties irrevocably
agree to submit to the exclusive jurisdiction of such courts in the State of California and
waive any defense olforum non conveniens.
ARBITRATION AND ATTORNEYS' FEES. lf a dispute arises between the Parties
which the Board of Directors is unable to resolve, the Parties may by mutual agreement
submit the dispute to mediation or non-binding arbitration. With respect to any such dispute
the Parties agree that each Party shall bear its own attomeys' fees and costs. Notwithstanding
the foregoing, Purchaser and SCPPA recognize and agree that SCPPA'S attomeys' fees
associated with any matter relating to the Project or this Agreement, including any dispute
relating thereto, shall constitute a Project cost which shall be allocated and billed as set forth
in Sections 4 and 7 ofthis Agreement.
NOTICES. Any notice, demand or request provided for in this Agreement shall be in
writing and shall be deemed properly served, given or made if delivered in person or sent by
registered or certified mail, postage prepaid, to the persons specified below:
Southern Califomia Public Power Authority
Attention: Executive Director
t 160 Nicole Court
Glendora, California 9l 740
Vemon Gas and Electric Department
Attention: Director
4305 Santa Fe Avenue
Vemon, California 90058
AMENDMENTS. The Parties acknowledge and agree that any amendment to this
Agreement shall be in writing and duly executed by the Parties.
ISIGNATURE PAGE FOLLOWS]
18.
19.
20.
21.
26
IN wlrNESS WHEREOF, the Parties hereto have duly caused this Agreement to be executed on
their respective behalves by their duly authorized representatives.
SOUTHERN CALIFORNIA PUBLIC
POWERAUTHORITY
FRED H. MASON
President
Attest:
BILL D. CARNAHAN
Assistant Secretary
CITY OF VERNON
By:
Attest:
27
ATTACHMENT A
DEFINITIONS
The foltowing terms, whether in the singular or the plural, and initially capitalized, shall have the
meanings specified below:
1. Act. All ofthe provisions contained in the California Joint Exercise ofPowers Act found in
Chapter 5 of Division 7 of Title I of the Govemment Code of the State of Califomia,
beginning at California Government Code Section 6500 et seq., as amended from time to
time.
2. Ancillarv Documents. "Ancillary Documents" shall mean the Ancillary Documents ils
defined in the Power Purchase Agreement.
3. Annual Budeet. The budget adopted by SCPPA pursuant to Section 5.4.1 ofthis Agreement
not less than 30 Days nor more than 60 Days prior to the beginning of each Power Supply
Year, including any amendments thereto, which shall show a detailed estimate of the Total
Power Costs under this Agreement and all credits, charges, revenues, income, or other funds
to be applied to such costs, for and applicable to such Power Supply Year.
4. Balancinq Asent. "Balancing Agent" shall have the meaning set forth in Section 9.5.
5. Billinq Statement. The written statement prepared or caused to be prepared each Month by,
or on behalf oll SCPPA which shall be based upon certain of the information in the Annual
Budget and shall show for such Month the amount to be paid to SCPPA by Purchaser in
accordance with the provisions of Section 7 of this Agreement.
6. Board of Directors. The Board of Directors of the Southern Califomia Public Power
Authority.
7. Capacitv. The ability or potential to generate, produce or transfer electricity, expressed in
kilowafts ("kW") or megawatts ('MUO, including when feasible, ancillary or regulating
services or other valuable non-energy products or services from a generating facility.
8. Capaciw Riehts. "Capacity Rights" means the rights, whether in existence as ofthe Effective
Date or arising thereafter during the term of this Agreement, to Capacity, resource adequacy,
associated attributes and/or reserves or any of the foregoing associated with the electric
generating capability of the Facility.
9. Commercial Ooeration. "Commercial Operation" shall have the definition set forth in the
Power Purchase Agreement.
10. Compliance. Following a Payment Default, the Defaulting Purchaser shall be in compliance
with its payment obligations under this Agreement if it (i) no later than the last Day of the
Cure Period fully pays all amounts owed as reflected in any Default Invoice; (ii) pays any
monthly Billing Statement which comes due during the Cure Period; and (iii) replenishes any
reduction made to the applicable operating reserve account or the other Reserve Fund as a
result of any Payment Default.
A-l-
13.
11.
12..
consent Agreements. All consents to assignments and all agreements relating thereto entered
into with any lender, financial institution or other Person for the purpose ofconsenting to the
assignment ofthe rights or securing the obligations ofthe Power Purchase provider under the
Power Purchase Agreement, and all consents or agreements relating to a Change in Control
under Section 14.7(e) ofthe Power Purchase Agreement.
Cure Period. That period of time beginning on the dare ofa Paymenr Default and concluding
thirty (30) Days rhereafter.
Cured Pavment Default. A Payment Default which has been cured in accordance with
Section ll.3 of this Agreement. If at any time during the Cure period the Defaulting
Purchaser is in Compliance, then the requirements of a Cured Payment Default shall be
deemed to have been satisfied as ofthe date of receipt ofsuch payments by SCppA and the
Cure Period shall expire.
Daily Delav Damaees. Daily Delay Damages shall have the definition set forth in the Power
Purchase Agreement.
Day. "Day" means calendar Day unless otherwise specified herein.
Default lnvoice. An invoice during the Payment Default Period and the Cure Period issued
to the Defaulting Purchaser pursuant to Section I I of this Agreement that identifies the total
defaulted amount owed, including late payment interest, to achieve a Cured Payment Default.
During the Cure Period, the Default Invoice shall also include the amount that must be paid
to achieve Compliance.
Defaultins Purchaser. "Defaulting Purchaser" means Purchaser, where Purchaser has caused
a Payment Default under Section I I .l ofthis Agreement that has not been remedied or cured.
Defaultine SCPPA Participant. A Participant (not including Purchaser) that causes a
Payment Default under its Power Sales Agreement that has not been remedied and where the
Defaulting Participant has not been remedied or cured.
Delivery Output cost comoonent. "Delivery Output cost component" is defined in Section
4.3.1 .
Dvnamic Scheduline. "Dynamic Scheduling" shall mean the automated scheduling of
Energy from the Point of Delivery to Purchaser's control area or electric system, provided
that said dynamic schedules adjust at four second intervals, or other intervals as specified by
WECC, to match the amount of Energy actually delivered to the Point of Delivery fiom the
Facility.
Enerev. "Energy" shall have the same definition as in the Power Purchase Agreement.
Environmental Attributes. "Environmental Attributes" shall have the definition set forth in
the Power Purchase Agreement.
FaciliW. "Facility" means all ofthe facilities and real and personal properties and resources
and rights and interests, all as described or defined as the Facility in the Power Purchase
Agreement.
14.
t5.
16.
17.
18.
21.
22.
19.
23.
A,-2-
24.
25.
Facititv Output. All output, rights, and other tangible or intangible benefits derived from the
Facility, whatsoever, including without timitation all Energy, Capacity Rights and
Environmental Attributes, whether received by SCPPA under or pursuant to the Power
Purchase Agreement or other applicable Project Agreement.
Fiscal Year. The twelve-month period commencing at l2:01 a.m. on July I ofeach year and
ending at l2:01 a.m. on the following Juty l, or such other time frame as determined by the
Board of Directors.
Force Maieure. "Force Majeure" shall have the definition set forth in the Power Purchase
Agreement.
Generator lnterconnection Aqreement. "Generator Interconnection Agreement" shall have
the definition set forth in the Power Purchase Agreement.
Guaranteed Generation. "Guaranteed Ceneration" shall have the meaning provided in the
Power Purchase Agreement.
lnitial Payment Default Date. The earlier of (i) the end of the fifth Day following the first
Payment Default for which no remedy in payment has occurred and been received by
SCPPA, or (ii) the last Day of the Month in which the first Payment Default has occurred for
which no remedy in payment has occurred and been received by SCPPA.
Joint Powers Agreement. The "southem Califomia Public Power Authority Joint Powers
Agreement" dated as of November l, 1980, as amended and modified from time to time,
entered into pursuant to the provisions ofthe Act, among SCPPA and its members.
Month. A calendar month.
Monthlv Costs. "Monthly Costs" is defined in Section 4.5.
Moody's. "Moody's" shall mean Moody's Investor Services, Inc.
Ooeratine Budeet. The operating budget approved by the Board of Directors which shall
show a detailed estimate of Total Power Costs for a Power Supply Year and all revenues,
income or other funds to be applied to Total Power Costs for and applicable to such Power
Supply Year.
Ooeratine Reserve Deoletion Date. The date that is two Months prior to the date on which
SCPPA anticipates, assuming continued Payment Defaults by the Defaulting Purchaser, that
the moneys in the operating reserve account held at any time by SCPPA will be fully
depleted; provided, however, if as of the date on which a Payment Default occurs SCPPA
determines that the moneys in the operating reserve account held by SCPPA will be fully
depleted in less than two Months (or currently are fully depleted), then the Operating Reserve
Depletion Date shall be deemed to have occurred when such a Payment Default occurs.
Participant Facility Output Cost Share. With respect to a particular SCPPA Participant, the
percentage of SCPPA costs under this Agreement payable by such SCPPA Participant, as set
forth for such Participant in Attachment B ofthis Agreement.
26.
27.
28.
29.
30.
,1.
,-.
JJ.
-t+.
35.
36.
A-3 -
37.
38.
39.
Participant Facilitu Output Share. With respect to a particular Participant and during each
Power Supply Year, the percentage entitlement, as set forth for such participant in
Attachment B of this Agreement, of the Facility Output delivered at the point of Delivery.
Payment Default. A failure by the Purchaser to pay when due all of its Billing Statement for
any Month.
Payment Default Period. That period of time beginning on the initial date of a Payment
Default and ending thirty (30) Days following a notice of default as provided in accordance
with Section I 1.2 hereof.
Person. "Person" means any individual, corporation, partnership, joint venture, limited
liability company, association, joint stock company, trust, unincorporated organization,
entity, govemment or other political subdivision.
Point ofDelivery. Point of Delivery shall have the definition set forth in the Power Purchase
Agreement.
Power Purchase Aqreement. The Power Purchase Ageement between Southem Califomia
Public Power Authority and Antelope DSR l, LLC, dated as of , 2015, attached
hereto as Attachment C, as the same may be amended from time to time.
Power Purchase and Securitv Agreements. The Power Purchase Agreement, the Ancillary
Documents, and all other agreements associated with the Facitity. The Power Purchase and
Security Agreements shall also include any instrument or form of security which affords any
opportunity for the purchase of the Facility or acquisition, whether through foreclosure or
otherwise, including any mortgage, lease, assignment, beneficial interest, collateral
instrument or other device or mechanism providing for the ability to acquire the Facility.
. "Power Purchase
Agreement General and Administrative cost component" is defined in Section 4.3.2.
Power Purchase and Securitv Ageements cost comoonent. "Power Purchase and Security
Agreements cost component" is defined in Section 4.3.5.
Power Purchase Provider. Antelope DSR I LLC, as the counterparty to SCPPA under the
Power Purchase Agreement, and any other entity named under any applicable operating
agreement to operate or otherwise run or manage the Facility, along with each of their
successors, or any successors or assigns to the rights ofthese entities.
Power Supplv Year. The Fiscal Year, except that the first Power Supply Year shall begin on
the first to occur of (i) the date SCPPA is obligated to pay any portion of the costs of the
Project, (ii)the date upon which SCPPA first incurs or accrues costs associated with the
issuance of the Bonds, (iii) 90 Days before the scheduled date for issuance of the Bonds,
(iv) the date of Commercial Operation of the Facility, or (v) the date of the first delivery of
Energy to Purchaser pursuant to this Agreement. The first Power Supply Year shall end on
the last Day ofthe then cunent Fiscal Year.
Proiect. The term "Project" means the Antelope DSR I Solar Project and shall be broadly
construed to entail the aggregate of rights, liabilities, interests and obligations of SCPPA
40.
41.
42.
43.
44.
45.
46.
47.
48.
A-4-
49.
pursuant to the Power Purchase and Security Agreements and the other Project Agreements,
including but not limited to all associated rights, liabilities, interests and obligations;
provided, that for purposes of this Agreement it shall be limited to those rights, tiabilities,
interests and obligations acquired or undertaken by SCPPA in the Power Purchase
Agreement and the Project Agreements associated with that agreement' The term Project
shall also include those rights, liabilities, interests or obligations necessary or appropriate to
carry out the functions specified in Section 6 and to utilize or deliver the Energ/ of the
Facility as specified in Section 9.
Proiect Asreements. lnsofar as they pertain to this Project, any project management
agreement, the Power Sales Agreements, each of the Power Purchase and Security
Agreements, the Ancillary Documents or any other contracts for the purchase, procurement,
delivery or transmission of Facility Output, or any other agreements for scheduling,
dispatching, exchanging, tagging, movement or transmission of Facility Output, or
agreements to which SCPPA is a party relating to the administration or management of the
Project.
Proiect Manaqer. SCPPA in its capacity as Project Manager or a designee or designees
appointed by SCPPA to carry out SCPPA's responsibilities as Project Manager under this
Agreement.
Proiect Rights. All rights and privileges of the Purchaser under this Agreement, including
but not limited to its right to receive its Participant Facility Output Share under this
Agreement.
Proiect Riqhts and Obliqations. The Purchaser's Project Rights and obligations under the
terms of this Agreement.
Reserve Fund cost comDonent. "Reserve Fund cost component" is defined in Section 4.3.4.
Reserve Funds. Those reserve accounts deemed appropriate to afford a reliable source of
funds for the payment obligations of the Project and, taking into account the variability of
costs associated with the Project for the purpose of providing a reliable payment mechanism
to address the ongoing costs associated with the Project.
S&P. "S&P" shall mean Standard & Poor's Financial Services LLC.
SCPPA Participants. Those entities executing a Power Sales Agteement, together in each
case with each entity's successors or assigns, identified as *SCPPA Participants" in
Attachment B of this Agreement.
Shortfatl Damaees. "Shortfalt Damages" shall have the definition set forth in the Power
Purchase Agreement
Startup and Test Energ.y. "startup and Test Enerry" shall have the definition set forth in the
Power Purchase Agreement.
Steo-Uo Invoice. An invoice sent pursuant to Section I I .8.1 to a non-Defaulting Participants
a result ofone or more Payment Defaults, which invoice shall separately identiry any amount
owed with respect to the monthly Billing Statement of one or more Defaulting SCPPA
50.
51
52.
53.
54.
55.
56.
57.
58.
59.
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61.
Participants for Total Power Costs reflected in the Defaulting SCPPA participant(s) unpaid
monthly Bitling Statement.
Suoolementarv Services. Those services in connection with the delivery ofEnergy involving
additional transmission, interconnection arrangements, energy management, firming,
shaping, energy balancing, dispatching, tagging, scheduling, Dynamic Scheduling,
transmitting, interconnecting, swapping, exchanging or other services associated with the
transmission, use or disposition of Facility Output to be utilized by the Purchaser under this
Agreement, and to otherwise provide for delivery and facilitate the disposition, movement,
taking, receiving, accounting for, transferring and crediting the transfer of Facility Output
from the Point of Delivery to any other points or destinations, as determined by the
Purchaser. Supplementary Services include but are not timited to delivery point swaps,
stranded energy/transm ission curtailments, tiepoint liquidity improvement, transmission loss
savings, tiepoint price spread optimization, on-peak/off-peak exchanges, peak shifting
exchanges, seasonal exchanges, and both simultaneous or non-simultaneous green energy
exchanges.
SuDplementarv Services cost comoonent. "Supplementary Services cost component" is
defined in Section 4.3.3.
Total Power Costs. "Total Power Costs" has the meaning described in Section 4.3.
Transmission System. "Transmission System" shall have the meaning set forth in the Power
Purchase Agreement.
Uncontrollable Forces. Any Force Majeure event and any cause beyond the conlrol olany
Party, and which by the exercise of due diligence such Party is unable to prevent or
overcome, including but not limited to, failure or refusal of any other Person to comply with
then existing contracts, an act of God, fire, flood, explosion, earthquake, strike, sabotage,
pestilence, an act of the public enemy (including terrorism), civil or military authority
including court orders, injunctions and orders of govemmental agencies with proper
jurisdiction or the failure ofsuch agencies to act, insurrection or riot, an act ofthe elements,
failure of equipment, a failure ol any governmental entity to issue a requested order, license
or permit, inability of any Party or any Person engaged in work on the Project to obtain or
ship materials or equipment because of the effect of similar causes on suppliers or carriers.
Notwithstanding the foregoing, Uncontrollable Forces as defined herein shall also include
events ofForce Majeure pursuant to the Power Purchase Agreement, as defined therein.
WECC. The Westem Electicity Coordinating Council or its successor.
62.
63.
64.
65.
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ATTACHMENT B-
ANTELOPE DSR T SOLAR PROJECT
POWER SALES AGREEMENT
SCHEDULE OF SCPPA PARTICIPANTS,
CAPACITY AMOUNTS,
PARTICIPANT FACILITY OUTPUT SHARES,
PARTICIPANT FACILITY OUTPUT COST SHARES
Attachment B may be revised in accordance with the provisions ofSection 10.2 ofrhis Agreement.
PARTICIPANTS CAPACITY
AMOUNTS
(Mw)
PARTICIPANT
FACILITY OUTPUT
SHARES
PARTICIPANT
FACILITY OUTPUT
COST SHARES
City of Riverside 25.0 MW 50.00%50.00%
Citv of Vemon 25.0 MW 50.00%50.00%
TOTAL 50.0 Mw 100.00%100.00%
B-l-
ATTACHMENT C
POWER PURCHASE AGREEMENT
c-r-
POWER PURCHASE AGREEMENT
BETWEEN
ANTELOPE DSR I, LLC
AND
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
Dated as of July f6, 2015
ATTACHMENT C
POWER SALES AGREEMENT
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TABLE OF CONTENTS
paqe
ARTICLE I DEFINITIONS AND INTERPRETATION............ ....................... I
Section Ll
Section L2
Survivability......
Early Termination .............................
.. 3l
Ceneral Operational Requirements.........
Operation and Maintenance Plan.........
36
36
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POWER SALES AGREEMENT
ARTICLE II EFFECTIVE DATE, TERM, AND EARLY TERMINATION ............................25
Section 2.1
Section 2.2
Section 2.3
Section 2.4
..25
Term 26
ARTICLE III DEVELOPMENT OF THE FACILITY......... ...........................27
ARTICLE IV OPERATION AND MAINTENANCE OF THE FACILITY.......
Section 3.1
Section 3.2
Section 3.3
Section 3.4
Section 3.5
Section 3.6
Section 3.7
.............26
...........,,26
............. 3l
..........---32
ARTICLE V COMPLIANCE DURING CONSTRUCTION OPERATIONS: SECURITY...... 34
Section 4. I
Section 4.2
Section 4.3
Section 4.4
Section 4.5
Section 5.1
Section 5.2
Section 5.3
Section 5.4
Section 5.5
Section 5.6
Section 5.7
Section 6. I
Section 6.2
Section 6.3
Section 6.4
Section 7.1
zegsolzo s mar s tg- ooorei
After Purchase Option Notice...........32
Quality Assurance Program ..........35
No Liens ..36
Reporting and ln lormation........
Performance Security..............
ARTICLE VI PURCTIASE AND SALE OF PRODUCT..............38
ARTICLE VII TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS .........40
In General..
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
Section 7.7
Section 8.1
Section 8.2
Section 8.3
Section 8.4
Section 8.5
Section 9. I
Section 9.2
Section 9.3
Section 9.4
Section 9.5
ARTICLE X CAPACITY RIGHTS
Transfer of Environmental Attributes................................................ 45
Reporting of Ownership of Environmental Attributes .......................46
Environmental Attributes........... ...........................- 46
WREGIS................46
47
TABLE OF CONTENTS
(continued)
Scheduling Coordinator; CAISO Cost Allocation
Forecasting and Scheduling of Energy .................
Replacement Product ..............
Shortfall Damages............
Availability Requirement.......
Shortfall Energy Termination
Paqe
40
4l
ARTICLE VIII ENVIRONMENTAL ATTRIBUTES................. ...................45
ARTICLE IX MAKEUP OF SHORTFALL ENERGY
Section l0.l
Section 10.2
47
47
47
48
48
48
48
48
48Section 10.3 Further Assurances
ARTICLE XI BILLING; PAYMENT; AUDITS; METERNG; ATTESTATIONS;
Capacity Rights.....
Covenant Regarding Capacity Ri ghts................
..49
..49Section I l.l
Section I 1.2
Section I 1.3
Section I 1.4
Section I 1.5
Section I I .6
Section I 1.7
Billing and Payment.............
Calculation of Energy Delivered; Invoices and Payment.................. 49
Disputed Invoices..............
Right of Setoff...
Records and Audits................
50
50
50
Representations and Warranties of Buyer.......................................... 5 3
Representations and Warranties of Se11er.......................................... 53
Covenants of Seller Related to Site Control Documents................... 55
Covenants of Seller to Provide Monthly Attestations........................58
Additional Covenants of Se11er............. .................58
Storage Technology....................... ........................59
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POWER SALES AGREEMENT
ARTICLE XII REPRESENTATIONS, WARRANTIES AND COVENANTS.........................53
Section l2.l
Section 12.2
Section 12.3
Section 12.4
Section 12.5
Section 12.6
u sgso:zo g oos rs rq- ooorrii
TABLE OF CONTENTS
(continued)
ARTICLE XIII DEFAULT; TERMTNATION AND REMEDIES; PERFoRMANCE
Section 13. I
Section 13.2
Section 13.3
Section 13.4
ARTICLE XIV MISCELLANEOUS .............
Page
60
Default Remedy.........
Term ination for Default .........
Authorized Representati ve ...64
Dispute Resolution.....
Further Assurances; Change in Electric Market Design.................... 65
No Dedication of Facilities ........
Force Majeure
Assignment of Agreement............
Ambiguity...........69
Severability
Confidentiality
64
Section l4.l
Section 14.2
Section 14.3
Section 14.4
Section 14.5
Section 14.6
Section 14.7
Section 14.8
65
65
67
Section 14.12 Goveming Law
Sectionl4.l3 Venue.........69
Section 14.14 Execution in Counterparts...
Section 14.15 Effect ofSection Headings ...........
Section 14. l6 Waiver; Available Remedies .........70
Section 14.17 RelationshipoftheParties.....70
Section 14.18 Third Party Beneficiaries .............. .........................70
Section 14.19 Indemnification; Damage or Destruction; Insurance;
Condemnation; Limit of Liability .......................... 70
69
70
Section 14.20
Section 14.21
Section 14.22
Section 14.23
Section 14.24
Section 14.25
Mobile-Siena....
Taxpayer Identifi cation Number (TIN) ..............
Service Contract.
Right of First Offer and Right ofFirst Refusal
72
74
74
74
75
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lpgdices
APPENDIX A-I CONTRACT PRICE
APPENDIX A-2 CONTRACT PRICE SCHEDULE
APPENDIX B-I FACILITY, PERMITS, AND OPERATOR
APPENDIX 8.2 MAP OF FACILITY
APPENDIX C ANNUAL CONTRACT QUANTITY
APPENDIX D FORM OF ATTESTATION
APPENDIX E FORM OF LETTER OF CREDIT
APPENDIX F INSURANCE
APPENDIX G QUALITY ASSURANCE PROGRAM
APPENDIX H QUALIFIED OPERATORS
APPENDIX I MILESTONE SCHEDULE
APPENDIX J BUYER AND SELLER BILLING, NOTIFICATION AND SCHEDULING
CONTACT INFORMATION
APPENDIX K FORM OF OPTION AGREEMENT
APPENDIX L.I FORM OF CONSTRUCTION START DATE CERTIFICATION
APPENDIX L-2 FORM OF COMMERCIAL OPERATION DATE CERTIFICATION
APPENDIXM-I [RESERVEDI
APPENDTXM-2 [RESERVEDI
APPENDIX N SITE CONTROL DOCUMENTS
APPENDIX O FORM OF STORAGE OPTION AGREEMENT
SCHEDULES
SCHEDULE I2.2(h) STRUCTURE OF PARENT ENTITIES
iv ATTACHMENT C
POWER SALES AGREEMENT
POWER PURCHASE AGREEMENT
PARTIES
THIS POWER PURCHASE AGREEMENT (this ,,Ageement'), dated as of this l6th
day of July, 2015, is being entered into by and between the SOUTHERN CALIFORNIA
PUBLIC POWER AUTHORITY ("Buyer"), a joint powers agency and a public entity organized
under the laws ofthe State of Calilomia and created under the provisions ofthe California Joint
Exercise of Powers Act found in chapter 5 of Division 7 of ritle I of the Govemment Code of
the State of California, beginning at Califomia Covemment Code Section 6500, et. seq., (.Zcr,')
and the "Southern california Public Power Authority Joint powers Agreement" entered into
pursuant to the provisions of the Act among Buyer and Buyer's members, dated as of
November l, 1980, and ANTELOPE DSR l, LLC, a limited liability company organized and
existing under the laws of the state of Delaware ("sellet''). Each of Buyer and Seller is referred
to individually in this Agreement as a"Party" and together as ahe',Parties.,,
RECITALS
WHEREAS, Buyer's members have adopted or are adopting policies that are designed to
increase the amount ofenergy that they provide to their retail customers from eligible renewable
energy resources and to comply with the Califomia Renewable Energy Resources Act; and
WHEREAS, in 2014, Buyer issued a request for proposals (RFP') to acquire renewable
energy resources; and
WHEREAS, sPower, an affiliate of Seller, responded to Buyer's RFP on behalf of its
wholly-owned subsidiary, Seller, and, following negotiation, Seller has agreed to sell to Buyer,
and Buyer has agreed to purchase from Seller, certain renewable energy, capacity rights and
associated environmental attributes for the purchase price set forth in Aooendix A hereto; and
WHEREAS, the Panies desire to set forth the terms and conditions pursuant to which
such sales and purchases shall be made.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated
herein, the mutual covenants and agreements herein set forth, and other good and valuable
consideration, the sufficiency ofwhich is hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. The following terms in this Agreement and the
appendices hereto shall have the following meanings when used with initial capitalized letters:
"Act" has the meaning set forth in the preamble of this Agreement.
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,.Aftrliate" means, as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by or is under common control with such Person or is a director or
officer of such Person or of an Alfiliate of such Person. As used in this Agreement, "control"
shall mean the possession, directly or indirectly, of the power to direct or cause the direction of
management, poli"i". o. activities of a Person, whether through ownership of voting securities,
by contract or otherwise.
,.Agreement" has the meaning set forth in the preamble of this Agreement, and includes
the Appendices and Schedules attached hereto.
"Agreement Term" has the meaning set forth in Section 2.2(a).
"Ancillary Documents" means the Option Agreement, Storage Option Agreement, all
agreements and other documents included in the Performance Security, and all other instruments,
agreements, certificates and documents executed or delivered by or on behalf of Buyer or any
Seller Party pursuant to or in connection with any thereofor this Agreement.
"Annual Contract Quantity" means, for each Contract Year, the number of MWh set
forth on Appendix C.
"ASME" means American Society of Mechanical Engineers.
"Assumed Daily Deliveries" has the meaning set forth in Section 13.4(c).
"ASTM" means American Society for Testing and Materials.
"Authorized Auditors" means representatives of Buyer or Buyer's Authorized
Representative who are authorized to conduct audits on behalfsuch Buyer.
"Authorized Representative" means, with respect to each Party, the Person designated
as such Party's authorized representative pursuant to Section l4.l .
''Availability Standards" means the program set forth in Section 40.9 of the CAISO
Tariffl, as it may be amended, supplemented or replaced (in whole or in part) from time to time,
setting forth certain standards regarding the desired level of availability for Resource Adequacy
(as defined in the CAISO Tariff) resources and possible charges and incentive payments for
performance thereunder.
"AWS" means American Welding Society.
"Bankruptcy" means any case, action or proceeding under any bankruptcy,
reorganization, debt arrangement, insolvency or receivership law or any dissolution or
liquidation proceeding commenced by or against a Person and, if such case, action or proceeding
is not commenced by such Person, such case, action or proceeding shall be consented to or
acquiesced in by such Person or shall result in an order for reliefor shall remain undismissed for
ninety (90) days.
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"Bankruptcy Code" means Title I I of the United States Code entitled .,Bankuptcy,,, as
now and hereafter in effect.
"Bond Portion" has the meaning set forth in Section 5.7(b).
"Brown Act" has the meaning set forth in Section 14.21(d).
"Business Day" means any day that is not a Saturday, a Sunday, or a day on which
commercial banks are authorized or required to be closed in Los Angeles, califomia or New
York New York.
"Buyer" has the meaning set forth in the preamble of this Agreement.
"CaI-OSHA" means the Califomia Occupational Safety & Health Administration.
"CAISO" means the Califomia Independent System Operaror.
*CAISO Costs" means (i) all current and future costs, expenses, fees, charges, credits
and other amounts assessed by the CAISO to Seller or to Buyer in connection with the Facility
and (ii) any and all costs, expenses, fees, charges and other amounts incurred in connection with
performing Scheduling services, settlement services and serving as the Scheduling Coordinator.
For the avoidance of doubt, cAISo Costs include any and all fees, costs and charges that come
into existence for integration of the Facility (by virtue of its being an intermittent solar resource)
into the CAISO Grid and any imbalance costs, expenses and charges.
"CAISO Tariff' means the CAISO FERC Electric Tariff, Fifth Replacement Volume,
including the rules, protocols, procedures and standards attached thereto and any replacement
thereofor successor thereto in effect.
"CAMD" means the Clean Air Markets Division of the EPA and any other state, regional
or federal or intergovemmental entity or Person that is given authorization orjurisdiction or both
over a program involving the registration, validation, certification or transferability of
Environmental Aftributes.
"Capacity Rights" means the rights, whether in existence as of the Effective Date or
arising thereafter during the Agreement Term, to capacity, Resource Adequacy Attributes, Local
capacity Requirement Attributes, associated attributes or reserves, or any of the foregoing as
may in the future be defined by the cAISo, or any other balancing authority, reliability entity or
Govemmental Authority associated with the electric generating capability of the Facility,
including the right to resell such rights.
"CEC" means Califomia's State Energy Resources Conservation and Development
Commission, also known as the California Energy Commission.
"CEC Certified" means that the CEC has certified that the Facility is an eligible
renewable energy resource in accordance with RPS Law.
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"CEC Performance Standard" means, at any time' the applicable greenhouse gas
emissions performance standard in effect at such time for electric generation facilities that are
owned or operated (or both) by local publicly owned electric utilities, or for which a local
publicly owned electric utility has entered into a contractual agreement for the purchase ofpower
irom such facilities, as established by the cEC or other Govemmental Authority having
jurisdiction over Buyer.
*CEQA" means the Califomia Environmental Quality Act, California Public Resources
Code $$ 21000, et seq.
"CEQA Acceptability Notice" has the meaning set forth in Section 3.1.
"CEQA Determinations" means that:
(a) The lead agency conducting the review of the Facility as required under
CEQA shall have (i) reviewed and approved the CEQA Documents, (ii) issued a final land use
entitlemenr or other discretionary permit for the Facility, and (iii) filed a Notice of Determination
in compliance with CEQA;
(b) Buyer, acting as a responsible agency under CEQA, shall have provided to
Seller the CEQA Acceptability Notice; and
(c) The appticable period for any legal challenges to any action by either the
lead agency or any responsible agency under CEQA shall have expired without any such
challenge having been filed or, in the event ofany such challenge, the challenge shall have been
determined advesely to the challenger by final judgment or settlement.
"CEQA Documents" means a draft environmental impact report, mitigated negative
declaration or equivalent document prepared by or relied upon by the lead agency in approving
Permits for the Facility.
"CEQA Unacceptability Notice" has the meaning set forth in Section 3.1 .
"Change in Control" means the occurrence, whether voluntary or by operation of law
and whether in a single transaction or in a series ofrelated transactions, ofany one or more ofthe
following: (i) a merger or consolidation of Seller or any Parent Entity with or into any other
Person or any other reorganization in which the members of Seller or any Parent Entity
immediatety prior to such consolidation, merger, or reorganization, own less than fifty percent
(50%) of the equity ownership of the surviving entity or cease to have the power to control the
management and policies of the surviving entity immediately after such consolidation, merger, or
reorganization, (ii)any transaction or series of related transactions in which in excess offifty
percent (50%) ofthe equity ownership of Seller or any Parent Entity, or the power to control the
management and policies of Seller or any Parent Entity is transferred to another Person, (iii) a
sale, lease, or other disposition of all or substantially all of the assets of Seller or any Parent
Entity, (iv) the dissolution or liquidation of Seller or any Parent Entity, or (v) any transaction or
series of related transactions that has the substantial effect of any one or more of the foregoing;
provided, however, that a Change in Control shall not include any transaction or series of
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transactions in which membership or equity interests in Seller or a Parent Entity are issued or
transferred to another Person solely for the purpose ofa Tax Equity Financing.
"Change in Law" means a material change to any WREGIS standards, rules, or
requirements, or a change to any federal, state, local or other law (including any environmental
law, EPS Law or RPS Law), resolution, standard, code, rule, ordinance, dir".iir", regulation,
order, judgment, decree, ruling, determination, permit, certificate, authorization, or approval of a
Governmental Authority, including the adoption ofany new law, resolution, standard, iode, rule,
ordinance, directive, regulation, order, judgment, decree, ruling, determination, permit,
certifi cate, authorization, or approval.
"Closing" means the consummation ofthe transactions (a) under the option Agreement
or (b) with respect to a sale pursuant to Buyer's exercise of the Right of First offer or Right of
First Refusal.
"Commercial Operation" means all of the following have occurred:
(a) Construction of the Facility has been completed in accordance with the
terms and conditions ofthis Agreement, "substantial completion" under the relevant construction
contracts has been achieved, and the Facility possesses all of the characteristics and satisfies all
ofthe requirements set forth for the Facility in this Agreement;
(b) The Facility has successfully completed all testing required by prudent
Utility Practices or any Requirement of Law to operate the Facility;
(c) Seller has delivered to Buyer a certificate of an independent engineer
substantially in the form attached hereto ofAooendix L-2:
(d) Seller has obtained all Permits (including the CEeA Determinations)
required for the construction, operation and maintenance ofthe Facility in accordance with this
Agreement, including the Permits identified on Aooendix B-1, and all such permits are final and
non-appealable;
(e) Seller has entered into an agreement providing for the operation and
maintenance of the Facility with a Qualified Operator;
(f) Buyer has received the Delivery Term Security as provided in Section 5.7
in a form reasonably acceptable to Buyer;
(g) The Facility is both authorized and able to operate and deliver Energy at
the contract capacity in accordance with the Generator [nterconnection Agreement, prudent
utility Practices, the Requirements, and all Requirements ofLaw; provided that the Facility need
not be CEC Certified as a condition to achieving Commercial Operation;
(h) Provided that Buyer, in its role as Scheduling Coordinator, has submitted
all required information for the FCDS Finding in a timely manner to the cAISo, Seller has
provided notice from the cAlso that the Facility has completed sta(up testing and has been
approved by the cAlSo to commence operations and Seller has provided evidence reasonably
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satisfactory to Buyer that the Seller has obtained a Full Capacity Deliverability Status Finding;
and
(i) Seller has obtained Insurance coverage for the Facility as required by
Appendix F.
.,commercial operation Date" means the date on which commercial operation of the
Facility occurs, as determined pursuant to Section 3.5.
"Conditional Use Permit" means the conditional use permit lor the Facility to be issued
by the City ol Lancaster. Calif,ornia.
"Confidential Information" has the meaning set forth in Section 14.21(a).
..Construction Start Date" means the date on which Seller delivers to Buyer a written
certification substantially in the form attached hereto as Aopendix L-1.
"Contract Capacity" means 50 MW, as measured by the sum of inverter nameplate
capacity.
"Contract Price" means, for any period of time, the Contract Price set forth in
Apoendix A.
"Contract Year" means (a) with respect to the first (lst) Contract Year, the period
beginning on the commercial operation Date and extending through December 3l of the
calendar year in which the commercial operation Date occurs, (b) with respect to the second
(2nd) through the twentieth (20th) Contract Years, the applicable calendar year, and (c) with
respect to the twenty first (2lst) Contract Year, the period beginning on January I of the
applicable calendar year and extending through the day before the anniversary of the
Commercial Operation Date.
"Costs" has the meaning set forth in Section 13.4(fl(iii).
"Cover Damages" has the meaning set forth in Section 6.3.
"CPRA" has the meaning set forth in Section 14.21(d).
"Curtailment Period" means a period of time during the Delivery Term during which
the generation of Facility Energy is required to be curtailed or reduced (in whole or part) as a
result of an order, direction, alert, request, notice, instruction or directive from a Transmission
Provider, the CAISO, WECC, NERC, or any other reliability entity due to (a) a System
Emergency, (b) system improvements, curtailments, or scheduled and unscheduled repairs or
maintenance at or downstream from the Point of Delivery, (c) an event of Force Majeure at or
downstream from the Point of Delivery, (d) over-generation or any other reason adversely
affecting the normal function and operation of the CAISO grid or a Transmission Provider's
system, as may from time to time be identified by the CAISO, the Transmission Provider,
WECC, NERC, or any other reliability entity. For the avoidance of doubt, the term "curtailment
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Period" shall not include curtailments directed by cAISo for economic reasons or any
curtailment by Buyer pursuant to Section 7.4(b).
"Daily Delay Damages" means the liquidated damages specified in Section 3.6(c) and
Section 3.6(d).
"Day-Ahead Market" has the meaning set forth in the CAISO Tariff.
"Deemed Generated Energy" has the meaning set forth in Section 7.4(c).
"Default" has the meaning set forth in Section 13.L
"Defaulting Party" has the meaning set forth in Section 13.1.
"Delivery Term" has the meaning set forth in Section 2.2(b).
"Delivery Term Security" has the meaning set forth in Section 5.7(b).
"Dispute" has the meaning set forth in Section 14.3(a).
"Dispute Notice" has the meaning set forth in Section 14.3(a).
"Downgrade Evenf'means, with respect to the Person providing Project Development
Security or Delivery Term Security hereunder, any event that results in (a) the failure of such
Person to maintain the credit rating or organizational status ofa Qualified Issuer, as applicable,
or (b) the commencement by such Person of involuntary or voluntary bankruptcy, insolvency,
reorganization, arrangement, composition, readjustment, tiquidation, dissolution or similar
proceeding (whether under any present or future statute, law or regulation), or (c) Buyer electing
to terminate any relationship with such Person pursuant to directives from any Governmental
Authorities applicable to Buyer.
"Early Termination Date" has the meaning set lorth in Section 13.4(a).
"EEI" means Edison Electric Institute.
"Elfective Date" means the date on which Buyer executes this Agreement.
"EIRP Forecast" means the final forecast ofthe Energy to be produced by the Facility
prepared by the CAISO in accordance with the Eligible Intermittent Resources Protocol for use
in submitting a Schedule for the output of rhe Facility in the Real-Time Market, and if such
forecast is not available, the final forecast for the Energy in the Day-Ahead Market.
"Electric Metering Devices" means all meters, metering equipment, and data processing
equipment used to measure, record, or transmit data relating to the Facility Energy. Electric
Metering Devices include the metering current transformers and the metering voltage
tran sfo rm ers.
"Eligible Intermittent Resources Protocol" or "EIRP" means the Eligible Intermittent
Resource Protocol, as may be amended from time to time, as set forth in the CAISO Tariff.
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''Energy" means electrical energy.
"Enforceability Opinion" means an executed original of a written legal opinion from
counsel for Seller (such counsel to be reasonably acceptable to Buyer), conceming this
Agreement and the Ancillary Documents (including enforceabitity and due authorization thereof)
and related matters, in form and substance satisfactory to Buyer and its counsel, dated as of the
Effective Date and addressed to Buyer.
"Environmental Attribute Reporting Rights" means all rights to report ownership of
the Environmental Attributes to any Person, including under Section 1605(b) of the Energy
Policy Act of 1992, as amended from time to time or any successor statute, or any other current
or future international, federal, state or local law, regulation or bill, or otherwise'
"Environmental Attributes" means RECs, and any and all other current or future
credits, benefits, emissions reductions, offsets or allowances, howsoever entitled, named'
registered, created, measured, allocated or validated (A) that are at any time recognized or
deemed of value (or both) by Buyer, applicable law, or any voluntary or mandatory program of
any other Governmental Authority or other Person and (B) that are attributable to (i) generation
by the Facility during the Delivery Term or Replacement Energy required to be delivered by
Seller to Buyer during the Delivery Term and (ii) the emissions or other environmental
characteristics of such generation or such Replacement Energy or its displacement of
conventional or other types of Energy generation. Environmental Attributes include any ofthe
aforementioned arising out of legislation or regulation concemed with oxides of nitrogen, sulfur,
carbon, or any other greenhouse gas or chemical compound, particulate matter, soot, or mercury,
or implementing the United Nations Framework Convention on Climate Change (the
''UNFCCC'), the Kyoto Protocol to the UNFCCC, Califomia's greenhouse gas legislation
(including RPS Law and California Assembly Bitl 32 (Global Warming Solutions Act of 2006)
and any regulations implemented pursuant to that act, including any compliance instruments
accepted under the Califomia Cap on Greenhouse Gas Emissions and Market-Based Compliance
Mechanisms regulations of the Califomia Air Resources Board or any successor regulations
thereto) or any similar international, federal, state or local program or crediting "early action"
with a view thereto, laws or regulations involving or administered by the CAMD and all
Environmental Attribute Reporting Rights, including all evidences (if any) thereof such as
renewable energy certificates of any kind. Environmental Attributes for purposes of this
definition are separate from the Energy produced from the Facility and do not include
(a) investment tax credits, any local, state or federal production tax credits, depreciation
deductions or other tax credits providing a tay benefit to Seller or any other Person based on an
ownership or security interest in the Facility, (b) any other depreciation deductions and benefits,
and other tax benefits arising from ownership of the Facility and (c) cash grants or other financial
incentives from any local, state or federal govemment available to Seller with respect to the
Facility.
"Environmental Attributes Yalue" means the value of Environmental Attributes
purchased by Buyer under this Agreement, stated in $/MWh, determined based on a Renewable
Energy Credit pricing index that has been mutually agreed upon by Seller and Buyer or, if such
index is not available, the value ofthe Environmental Attributes as determined by the average of
three (3) nationally-recognized broker quotes for Environmental Attributes that meet the
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definition of Environmental Attributes set forth in this Agreeme nt; provided that such index
pricing or broker quotes shall relate to Environmental Attributes that are derived from
comparable vintage and generation technology as the Environmental Attributes that are being
replaced, and are from a generator that qualifies as an "eligible renewable energy resource"
within the meaning ofthe RPS Law at the time ofsuch pricing or broker quotes, as applicable.
"Envimnmental Compliance Milestone" means (a) Seller has obtained the CEeA
Determinations and is in compliance with any mitigation plans, monitoring programs or other
requirements associated therewith, and the applicable period for any legal challenges to any
action by either the lead agency or any responsible agency under CEQA has expired without any
such challenge having been filed, or in the event ofany such challenge, the challenge has been
determined adversely to the challenger by finaljudgment or settlement; (b) Buyer has received a
true, correct and complete copy of the Conditional Use Permit; and (c) Buyer has received true,
correct and complete copies of all documents relating to the environmental condition ofthe Site
in form, scope and substance reasonably satisfactory to Buyer, including any Phase I ESA
prepared relative to Site.
"EPA" means the United States Environmental Protection Agency.
"EPC Contractor" means an engineering. procurement, and construction contractor, or
if not utilizing an engineering, procurement and construction contractor, the entity having lead
responsibility for the management of overall construction activities, selected by Seller, with
substantial experience in the engineering, procurement, and construction of power plants of the
same type offacility as the Facility.
"EPS Compliance" or "EPS Compliant" when used with respect to the Facility or any
other facility providing Replacement Energy at any time, means that the Facility or facility, as
applicable, satisfies both the PUC Performance Standard and the CEC Performance Standard in
effect at the time:. provided, if it is impossible for the Facility or facility, as applicable, to satisfy
both the PUC Performance Standard and the CEC Performance Standard in effect at any time,
the Facility or facility, as applicable, shall be deemed EPS Compliant if it satisfies the CEC
Performance Standard in effect at the time and those portions ofthe PUC Performance Standard
in effect at the time that it is possible for the Facility or facility, as applicable, to satisfo while at
the same time satisfying the CEC Performance Standard in effect at the time.
"EPS Law" means Sections 8340 and 8341 of the Califomia Public Utilities Code or its
successor or comparable state or federal programs.
"Escrow Accounf' has the meaning set forth in Section 5.7(a).
"Excess Energy" means, in any Contract Year, Facility Energy delivered in excess of
one hundred and fifteen percent (l l5%) of the Annual Contract Quantity for such Contract Year,
which deliveries shall be verified in invoices provided by Seller as set forth in Section I 1.2(a).
"Facility" means the 50 MW solar photovoltaic power generating facility described in
Appendix B-l and depicted on Aooendix B-2, including atl property interests and related
transm ission and other facilities.
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,.Facility Assets" has the meaning set forth in Section 14.25(a). as further defined in the
Option Agreement.
"Facility Cosf' means, measured as of any date, the aggregate amount of all costs and
expenses incuned by Seller during rhe Agreement Term for the development, design,
engineering, equipping, procuring, constructing, installing, starting up, and testing ofthe Facility,
including (a) the cost of all labor, services, materials, suppliers, equipment, tools, transportation,
supervision, storage, training, demolition, site preparation, civil works, and remediation in
connection therewith, (b) the cost of acquiring and maintaining the site control Documents, (c)
real and personal property taxes, ad valorem taxes, sale, use, and excise taxes, and insurance
(including tirle insurance) premiums payable with respect to the Facility, (d) initial working
capital requirements ofthe Facility, (e) the cost ofacquiring the Permits for the Facility, (11 the
cost of establishing a spare parts inventory for the Facility, and (g) financial, legal, and
consulting fees, costs, and expenses.
"Facility Debt" means, measured as of any date, the payment obligations of Seller in
connection with borrowed money, including (a) principal of and premium and interest on
indebtedness, (b) fees, charges, penalties, and expenses related to indebtedness, (c) amounts due
upon acceleration or in connection with prepayment or restructuring of indebtedness, and
(d) swap or interest rate hedging breakage costs. For the sake of clarity, Facility Debt does not
include any Tax Equity Financing.
"Facility Enerry" means Energy generated by the Facility, less station load and
transmission losses to the Point of Delivery, as measured by CAlSo-approved Electric Metering
Devices.
"Facility Lender" means any financing party or Tax Equity Investor providing senior or
subordinated construction, interim or long-term debt or equity financing or refinancing for or in
connection with the development, construction, purchase, installation or operation ofthe Facility,
including in connection with any Tax Equity Financing, any trustee or agent acting on their
behalf, and any Person providing interest rate protection agreements to hedge any of the
foregoing debt obligations. For the sake of clarity, Facility Lender does not include any Tax
Equity Investor in its capacity as a Tax Equity Investor, but only includes a Tax Equity Investor
that provides Facility Debt and then only in such Tax Equity lnvestor's capacity as the provider
ofsuch Facility Debt.
"Facility Lender Consent" has the meaning set forth in Section 13.3'
*FERC" means the Federal Energy Regulatory Commission.
"Force Majeure" has the meaning set forth in Section 14.6(b).
"Force Majeure Notice" has the meaning set forth in Section 14.6(a).
"Forced Outage" means the removal ofservice availability ofthe Facility, or any portion
of the Facility, for emergency reasons or conditions in which the Facility, or any portion thereof,
is unavailable due to unanticipated failure, including as a result of Force Majeure.
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"Full Capacity Deliverability Status" or ',FCDS" has the meaning set forth in the
CAISO Tariff.
"Full Capacity Deliverability Status Finding" or ..FCDS Finding" means (a) Seller
has elected Full Capacity Deliverabiliry Status for the Facility and such election is acknowledged
by the interconnection provider and cAISo in the Generator Interconnection Agreement, (b) all
network and transmission upgrades required in the Generator lnterconnection Agreement and
associated studies or reports to achieve FCDS have been constructed and placed in service and
(c) the Facility's Net Qualifoing Capacity (as defined in the CAISO rariff) has been confirmed
in writing by CAISO; provided thar, if the Tehachapi Renewable Transmission project, as
defined in the Facility interconnection studies ("rxirlD'), is not in service by the date when all
requirements for the "Commercial operation Date" other than the FCDS Finding requirement
have been met, then clauses (b) and (c) in this definition shall not apply, il for each billing cycle
until TRTP is placed in service and all other conditions set forth in this definition of Full
Capacity Deliverability status Finding have been satisfied, Seller offers a bill credit in the
amount of $7.00 per MWh delivered, pro-rated for partial deliverability amounts. By way of
example only, if at the Commercial Operation Date only 25o/o of the Contract Capacity has
qualified for deliverability status, then 75,yo of the Facility Energy shall receive the $7.00 per
MWh credit.
"GAAP" means generally accepted accounting principles set forth in opinions and
pronouncements ofthe Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the circumstances as of the
date of determination.
"Gains" has the meaning set forth in Section 13.4(O(i).
"Generator Interconnection Agreement" means the agreement and associated
documents (or any successor agreement and associated documentation approved by FERC) by
and among Seller, Southem Califomia Edison, and the CAISO goveming the terms and
conditions ofSeller's interconnection with the CAISO grid, including any description ofthe plan
for interconnecting to the CAISO grid.
"Governmental Authority" means any federal, state, regional, city or local govemment,
any intergovernmental association or political subdivision thereof, or other govemmental,
regulatory or administrative agency, court, commission, administration, department, board, or
other governmental subdivision, legislature, rulemaking board, tribunal, or other govemmental
authority with jurisdiction over the Parties, the Facility, or this Agreement, or any person acting
as a delegate or agent ofany Governmental Authority; provided that "Governmental Authority"
specifically excludes Buyer and the Participating Members.
"Guaranteed Commercial Operation Date" means December 31, 2016.
"Guaranteed Generation" means, with respect to each Contract year, eighty percent
(80%) ofthe Annual contract Quantity for such contract Year, which amount shall be reduced
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by the aggregate amount of Deemed Cenerated Energy during all Seller Excused Hours during
such Contract Year.
"IEEE" means the Institute ofElectrical and Electronics Engineers.
"Indemnitees" has the meaning set forth in Section 14.19(a).
"Independent Manager" means a manager who is not at the time of initial appointment,
or at any time while serving as Independent Manager, and has not been at any time during the
preceding five (5) years: (i) a member, stockholder, equity holder, director, manager (except as
the Independent Manager of Seller), officer, employee, partner, attorney or counsel of Seller, any
member of Seller, or any Affiliate ofseller; (ii) a customeq supplier or other Person who derives
any of its purchases or revenues from its activities with Seller, any member of Seller, or any
Affiliate of Seller (other than for serving as Independent Manager of Seller), (iii) a Person
controlling or under common control with any such stockholder, equity holder, partner, manager,
customer, supplier or other like Person, or (iv) a member of the immediate family of any such
member, stockholder, equity holder, director, officer, employee, manager, partner, customer,
supplier or other like Person.
"Insurance" means the policies of insurance as set forth in Appendix F.
"Interest Rate" has the meaning set forth in Section I 1.3.
"ISA" means the lnstrument Society of America.
"Key Milestone" means a Milestone for which liquidated damages are provided in
Aooendix l.
"Land Lease" means an agreement to be entered into for Seller to use real estate as
described in Aopendix N. in a form acceptable to both Parties, such acceptance not to be
unreasonably withheld, conditioned, or delayed.
"Lessor" means any lessor of real property for the Facility pursuant to a Site Control
Document.
"Licensed Professional Engineer" means an independent, professional engineer
reasonably acceptable to Buyer, licensed in the State of Califomia, and otherwise qualified to
perform the work required hereunder.
"Lien" means any mortgage, deed oftrust, lien, security interest, retention of title or lease
for security purposes, pledge, charge, encumbrance, equity, attachment, claim, easement, right of
way, covenant, condition or restriction, leasehold interest, purchase right or other right of any
kind, including any option, of any other Person in or with respect to any real or personal
property.
"Local Capacity Requirement Attributes" means the benefits or attributes now or
existing in the future based on the procurement obligations of Buyer with respect to local
resource capacity requirements as prescribed by the PUC, the CAISO or other regional entity,
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and that are associated with the electric generating capability ofthe Facility.
"Locational Marginal Price" or "LMP" has the meaning set fonh in Appendix C of the
CAISO Tariff.
"Losses" has the meaning set forth in Section 13.4(fl(ii).
"Major Maintenance Blockout" has the meaning set forth in Section 4.5(a).
"Milestone" has the meaning set forth in Section 3.6(a).
"Milestone Date" has the meaning set forth in Section 3.6(a).
"Moody"" means Moody's Investor Services, Inc.
"Month" means a calendar month commencing at 00:00 Pacific Prevailing Time on the
first day of such month and ending at 24:00 Pacific Prevailing Time on the last day of such
month.
"MW'' means megawatt in altemating current, or ac.
"MWh" means megawatt-hours.
"NERC" means the North American Electric Reliability Corporation.
"Non-Defaulting Party" has the meaning set forth in Section 13.4(a).
"Notice of Proposed Third Party Sale" has the meaning set forth in Section 14.25(c).
"Notifying Party" has the meaning ser forth in Section 14.3(a).
"O&M Agreement" means the agreement for the provision of operation and
maintenance services for the Facility entered into or to be entered into by and between Seller and
a Qualified Operator.
"Option Agreement" means that certain Option Agreement to be entered into by the
Parties, substantially in the form set lorth on Appendix K.
'OSHA" means the Occupational Safety and Health Administrarion of the United States
Department of Labor.
"Outside Commercial Operation Date" means March 31,2017, which date may be
extended only pursuant to Section 3.6(b).
"Pacific Prevailing Time" means the local time in the State of Califomia.
"Parent Entity" means each of sPower Finco 5, LLC, a Delaware limited liability
company and sPower Solar Holdings LLC, a Delaware limited liability company.
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',Participating Intermittent Resource" has the meaning set forth in the cAISo Tariff.
"Participating Intermittent Resource Program" or "PIRP" means the rules, protocols,
procedures and standards for Participating Intermittent Resources under cAISO',s Eligible
lntermittent Resource Protocol, as may be amended fiom time to time, as set forth in the cAlSo
Tarift and any replacement or successor program.
"Participating Members" means the City of Riverside and the City of Vemon.
"Party" or ''Parties" has the meaning set forth in the preamble of this Agreement.
"Performance Security" means the Project Development Security or Delivery Term
Security for the Facility, together or individually, as applicable.
"Permits" means all applications, permits, licenses, franchises, certificates, concessions,
consents, authorizations, certifications, self-certifications, approvals, registrations, orders, filings,
entitlements and similar requirements of whatever kind and however described that are required
to be filed, submitted, obtained or maintained by any Person with respect to the development,
siting, design, acquisition, construction, equipping, financing, ownership, possession,
shakedown, start-up, testing, operation or maintenance of the Facility, the production, sale and
delivery of Products from the Facitity, including Facility Energy, Capacity Rights and
Environmental Attributes, or any other transactions or matter contemplated by this Agreement
(including those pertaining to electrical, building, zoning, environmental and occupational safety
and health requirements), including the, Conditional Use Permit, CEQA Determinations and the
Permits described in Aopendix B-l .
"Permitted Encumbrances" means (a) the Lien in favor ofthe Facility Lender, (b) any
Lien approved by Buyer in a writing separate from this Agreement that expressly identifies the
Lien as a Permitted Encumbrance, (c) Liens for Taxes not yet due or for Taxes being contested in
good faith by appropriate proceedings, so long as such proceedings do not involve a risk ofthe
sale, forfeiture, loss or restriction on the use ofthe Facility or any pa rt thereof, provided that such
proceedings end by the expiration of the Agreement Term, and (d) suppliers', vendors',
mechanics', workman's, repairman's, employees' or other like Liens arising in the ordinary
course of business for work or service performed or materials fumished in connection with the
Facility for amounts the payment of which is either not yet delinquent or is being contested in
good faith by appropriate proceedings so long as such proceedings do not involve a risk of the
sale, forfeiture, loss or restriction on use of the Facility or any part thereof'
"Person" means any individual, corporation, partnership, joint venture, limited liability
company, association, joint stock company, trust, unincorporated organization, entity,
govemment or other political subdivision.
"Phase I ESA" means an environmental study prepared in accordance with ASTM
E1527-13 (Standard Practice for Environmental Site Assessment: Phase I Environmental
Assessment Process) with respect to the Site to be prepared by a consultant acceptable to Buyer
and delivered to Buyer that demonstrates there are no recognized environmental conditions with
respect to the Site that could have an adverse impact on the Facility or the ability of Seller to
perform its obligations under this Agreement.
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"Pnode Price" means the locational marginal price ofthe Facility's pnode, as determined
by the CAISO. For the avoidance of doubt, the Pnode Price shall not include the value of any
Environmental Attributes or Capacity Rights, if any.
"Point of Delivery" means the cAISo pricing Node (as defined in the cAISo rariff) to
be established by cAISo at the 220kv bus of Southern catifomia Edison company's Antelope
Substation and to be identified by notice from Seller to Buyer prior to the Commercial Operation
Date, provided that in the case ofl Replacement Product, an altemative delivery point may
designated in accordance with Section 9.2.
"Pre-Certification Period" has the meaning set forth in Section 6.1(d).
"Present Value Rate" means, at any date, the sum of0.507o ptus the yield reported on
page "USD" of the Bloomberg Financial Markets Services Screen (or, if not available, any other
nationally-recogn ized trading screen reporting on-line intraday trading in united states
govemment securities) at I l:00 a.m. (New York city, New york time) for the United States
government securities having a maturity that most nearly matches the Remaining Term at that
date.
"Products" means any and all Facility Energy, Capacity Rights, Environmental
Attributes, and ancillary products, services or attributes similar to the foregoing that are or can be
produced by, or are associated with, the Facility, whether now attainable or established in the
future, including delivered energy, renewable attributes, and renewable energy credits. The
Products shall meet the standard of "Portfolio Content Category I ,, as defined by RpS Law.
"Project Development Security" has the meaning set forth in Section 5.7(a).
"Project Purchase Option" means the right, but not the obligation, of Buyer, in its sole
discretion, to purchase the Facility and certain related assets from Seller in accordance with the
provisions of the Option Agreement.
"Proposed Purchase Notice" has the meaning set forth in Section 14.25(b).
"Proposed Sale Notice" has the meaning set forth in Section 14.25(b).
"Prudent Utility Practices" means those practices, methods, and acts, that are
commonly used by a significant portion of the solar-powered electric generation industry in
prudent engineering and operations to design, construct, and operate and maintain electric
equipment (including solar-powered facilities) lawfully and with safety, dependability,
reliability, efficiency, and economy, including any applicable practices, methods, acrs,
guidelines, standards and criteria of the CAISO, FERC, NERC, WECC, as each may be amended
from time to time, and all applicable Requirements of Law. prudent utility practices are not
intended to be limited to the optimum practice, method, or act, to the exclusion ofall others, but
rather is intended to include acceptable practices, methods, and acts generally accepted in the
industry.
"Public Utilities code" means the public Utilities code of the state of califomia, as
may be amended lrom time l.o time.
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..PUC" means the califomia Public Utilities commission and any successor thereto.
"PUC Performance Standard" means, at any time, the greenhouse gas emission
performance standard in effect at such time for electric generation facilities owned or operated
ior both) by load-serving entities and not local publicly-owned electric utilities. or for which a
l'oad-serving entity and not a local publicly owned electric utility has entered into a contractual
agreement ior the purchase of power from such facilities, as established by the PUC or other
Govemmental Authority under the EPS Law.
"QRE" has the meaning set forth in Section 8.4.
"Qualilied Bond Issuer" means a Person (a) acceptable to Buyer or (b) that is admitted
in California and is rated "A" or higher by A.M. Best Company, lnc'
"Qualified Buyer Assignee" means (a) a Participating Member or any other non-
participating member of Buyer or (b) a third party Person that is rated (l) "A2" or higher by
Moody's and ''A" or higher by S&P, if such Person is rated by both Moody's and S&P, or
(2) "A2" or higher by Moody's or "A" or higher by S&P ifsuch Person is rated by either S&P or
Moody,s, or (3) equivalent ratings by any other credit rating agency of recognized national
standing.
"Qualified Issuer" means a Person (a) acceptable to Buyer or (b) that maintains a United
States domestic branch, and a current long+erm credit rating (corporate or long-term senior
unsecured debt) of (l) "A2" or higher by Moody's and "A" or higher by S&P, if such Person is
rated by both Moody's and S&P or (2) "A2" or higher by Moody's, or "A" or higher by S&P if
such Person is rated by either S&P or Moody's.
"Qualilied Operator" means (a) a Person reasonably acceptable to Buyer that has at
least three (3) years of operating experience with at least two (2) utility-scale solar projects of I 0
MW ac or higher, (b) any Person identified on Aooendix H or any such Person's Affrliates, or
(c) any other Person reasonably acceptable to Buyer.
..Qualified Transferee" means a Person that (a) maintains a current long-term credit
rating (corporate or long-term senior unsecured debQ of(D "A3" or higher by Moody's and "A]
or higher by S&P, if such Person is rated by both Moody's and S&P or (ii) "A3" or higher by
Moody's, or "A-" or higher by S&P if such Person is rated by either S&P or Moody's, or (iii)
equivalent ratings by any other credit rating agency of recognized national standing and retains,
or causes Seller to retain, a Qualified Operator to operate the Facility (or otherwise agrees not to
interfere with the existing Qualified operator for the Facility), or (b) is reasonably acceptable to
Buyer and in each case, (c) executes a written assumption agreement in favor of Buyer pursuant
to which any such Qualified Transferee shall assume all the obligations of Seller under this
Agreement, Option Agreement and the Storage Option Agreement.
"Quality Assurance Program" has the meaning set forth in Section 5.4.
"Real-Time Market" has the meaning set forth in the CAISO Tariff.
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"REC" or "Renewable Enerry Credif'means a certificate of proof associated with the
generation of electricity fiom an eligible renewable energy resource! which certificate is issued
through the accounting system established, used or approved by the cEC pursuant to the Rps
Law, evidencing that one (l) MWh of Energy was generated and delivered from such eligible
renewable energy resource. Such certificate is a tradable environmental commodity (also known
as a "green tag" or "renewable energy certificate") for which the owner ofthe REC can evidence
that it has purchased Energy that is CEC Certified.
"Recipient Party" has the meaning set forth in Section 14.3(a).
"Remedial Action Plan" has the meaning set forth in Section 3.6(a).
"Remaining Term" means, at any date, the remaining portion of the Delivery Term at
that date without regard to any early termination of this Agreement.
"Replacement Capacity Rights" means Capacity Rights, ifany, equivalent ro those that
would have been provided by the Facility during the contract Year for which the Replacement
Product is being provided.
"Replacement Energy" means Energy produced by a facility other than the Facitity that,
at the time delivered to Buyer, is (i) both RPS Compliant and EPS Compliant, (ii) qualifies under
RPS law, and (iii) includes Environmental Attributes that have the same or comparable value,
including with respect to the timeframe for retirement of such Environmental Attributes, if any,
as the Environmental Attributes that would have been generated by the Facility during the
Contract Year for which the Replacement Energy is being provided.
"Replacement Price" means the price at which Buyer, acting in a commercially
reasonable manner, purchases Replacement Product, or, absent such a purchase, (a) the pnode
Price, plus (b) the price ofthe Environmental Attributes that would have been generated by the
Facility valued at the Environmental Attributes Value, plus (c) the value of Capacity Rights, if
any, equivalent to those that would have been provided by the Facility, whether sold separately
or bundled as a package, in each case, for the calculation period, all as reasonably calculated by
Buyer.
"Replacement Product" means (a) Replacement Energy, and (b) Replacement Capacity
Rights.
"Requirements" means, collectively, (a) any standards or requirements of ASTM,
ASME, AWS, EPA, EEI, IEEE, ISA, National Electrical Code, Narional Electric Safety Code,
OSHA, CaI-OSHA, Uniform Building Code, or Uniform Plumbing Code applicable to the design
or construction of the Facility, (b) any applicable local county fire department standards or
codes, (c) Prudent Utility Practices, (d) all applicable Requirements of Law, including the UCC,
(e) Seller's Quality Assurance Program, and (f) all other requirements of this Agreement.
"Requirement of Law" means any federal, state, local or other law (including any
environmental law, EPS Law or RPS Law), resolution, standard, code, rule, ordinance, directive,
regulation, order, judgment, decree, ruling, determination, permit, certificate, authorization, or
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approval ofa Govemmental Aurhority, including those pertaining to electrical, building, zoning,
environmental and occupational safety and health requirements.
"Resource Adequacy Attributes" means the benefits or attributes, if any, now or
existing in the future based on the procurement obligations of Buyer with respect to Resource
Adequacy as prescribed by the PUC, the CAISO or any other regional entity, and that are
associated with the electric generating capability of the Facility or another RPS Compliant
eligible renewable resource providing Replacement Product.
"RFP" has the meaning set forth in the recitals to this Agreement.
"Right of First OffeC'and *ROFO" have the meaning set forth in Section l4'25(a).
"Right of First Refusal" and "ROFR' have the meaning set forth in Section 14.25(b).
"RPS Compliance" or "RPS Compliant" means, when used with respect to the Facility
or any other facility at any time, that all Energy generated by such facility at all times shall,
together with all of the associated Environmental Attributes, qualifo as a "portfolio content
category l " eligible renewable resource, or equivalent if the RPS Law is changed, under the RPS
Law.
"RPS Compliance Period" means each "Compliance Period" as defined in the RPS
Law.
"RPS Law" means the Califomia Renewable Energy Resources Act, including the
California Renewables Portfolio Standard Program, Article l6 of Chapter 2.3, Division I of the
Public Utilities Code, Califomia Public Resources Code $ 25740 through 25751, any related
regulations or guidebooks promulgated by the CEC or, as applicable, the PUC or its successor or
equivalent state or federal programs.
"SCADA" means the supervisory control and data acquisition system for the Facility.
"schedule" or "scheduling" means the actions of Seller and Buyer, their Authorized
Representatives, and the Transmission Providers, if applicable, of notifring, requesting and
confirming to the CAISO the amounts of Facility Energy and Replacement Product expected to
be delivered consistent with the Scheduling interval at the Point of Delivery on any given date
during the Delivery Term, all in the manner contemplated by the CAISO Tariff.
"scheduled Outage" means any outage with respect to the Facility other than a Forced
Outage.
"scheduled Outage Projection" has the meaning set forth in Section 4.5(a).
"scheduling Coordinator" has the meaning set forth in the CAISO Tariff.
"seller" has the meaning set forth in the preamble of this Agreement.
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"Seller Excused Hour" means an hour during which, Seller is unable to produce or
deliver Facility Energy from the Facility as a result of(a) curtailments, as set forth in Section 7.4,
(b) Buyer's unexcused failure to accept Scheduled Energy, or (c) Force Majeure.
"Seller Party" means each of Seller and all other penons, excluding Buyer, executing
any Ancillary Document.
"Settlement Statemenf'has the meaning set forth in the CAISO Tariff.
"shared Facilities Agreement" means an agreement to be entered into for seller to use
the interconnection facilities described in the Interconnection Agreement of e667, in a form
acceptable to both Parties, such acceptance not to be unreasonably withheld, conditioned, or
delayed.
"Shortfall Energr" has the meaning set forth in Section 9.1.
"Shortfall Damages" has the meaning set forth in Section 9.3.
"Shortfall Makeup Period" means the Contract Year following the Contract year
during which Shortfall Energy accrues.
"Site" means the real property (including all fixtures and appunenances thereto) and
related physical and intangible property generally identified in Apoendix B as owned or leased
by Seller where the Facility is located or will be located, and including any easements, rights-of-
way or contractual rights held or to be held by Seller for transmission lines or roadways servicing
such Site or the Facility located (or to be located) thereon.
"Site Control" means that the Site Control Documents have been executed by Seller and
each counterparty thereto and are in full force and effect and such Site Control Documents are
sufficient to permit seller to fulfill all of its obligations under this Agreement, the option
Agreement and the Storage Option Agreement.
"Site Control Documents" means the real property leases and easements for the Site that
together establish site control, including (a) each Land Lease, (b) the Shared Facilities
Agreement, and (c) the documents listed on Aopendix N.
"Site Control Key Milestone" means the Key Milestone requiring Seller to achieve Site
Control by the Milestone Date therefor.
"SP-15 Price" means the CAISO SP-15 Trading Hub Day-Ahead Market hourly LMp, as
published by the CAISO. For the avoidance ofdoubt, the SP-15 Price shall not include the value
ofany Environmental Attributes or Capacity Rights, ifany.
"Special Purpose Entity" means a limited liability company which at all times on and
after the Effective Date meets the following conditions:
(a) shall not (without the prior written consent of Buyer) (i) engage in any
dissolution, liquidation, consolidation or merger with or into any other business entity, (iD
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acquire by purchase or otherwise all or substantially all of the business or assets of or
beneficial interest in any other entity, (iii) transfer, lease or sell, in one transaction or any
combination of transactions, all or substantially atl of its properties or assets, except to the
extent permitted herein, (iv) modify, amend or waive in any material respect any provisions of
its organizational documents related to its status as a Special Purpose Entity, or (v) terminate
its organizational documents or its qualifications and good standing in Califomia or Delaware.
(b) its organizational documents do and will limit its activities to acquiring,
developing, owning, holding, selling, leasing, transferring, exchanging, managing and
operating the Facility, entering into this Agreement with Buyer and transacting lawful
business that is incident, necessary and appropriate to accomplish the foregoing;
(c) has not been, is not, and will not be engaged in any business unrelated
to the acquisition, development, ownership, management or operation ofthe Faciliry;
(d) has not had, does not have and will not have, any assets other than those
related to the Facility;
(e) has held itselfout and will hold itself out to the public as a legal entity
separate and distinct from any other entity and has not failed and will not fail to correct any
known misunderstanding regarding the separate identity of such entity; provided that (for the
avoidance of doubt) the foregoing shall not restrict Parent Entity or any other Seller Affrliate
from identifuing its indirect relationship to the Facility through Seller;
(0 will maintain its financial statements, bank accounts, accounts, books,
resolutions, agreements and records separate iiom any other Person and has filed and will file
its own tax retums (except to the extent treated as a "disregarded entity" for tax purposes or is
otherwise not required to file separate tax retums under applicable law);
(g) has held itself out and identified itself and will hold itself out and
identify itself as a separate and distinct entity under its own name or in a name franchised or
licensed to it by an entity other than an Affiliate of Seller and (except for tax purposes) not as
a division, department or part ofany other Person;
(h) has maintained and will maintain its assets in such a manner that it will
not be costly oi difficult to segregate, ascertain or identifu its individual assets from those of
any other Person;
(D has not made and will not make loans or advances to any Person or hold
evidence of indebtedness issued by any other Person (other than cash and investment
securities) or made any fraudulent conveyances to any Person;
6) has not identified and will not identifo its members, or any Affiliate of
any member, as a division or department or part of it, and has not identified itselfand shall not
identifo itselfas a division or department ofany other Person;
(k) has not entered into or been a party to, and will not enter into or be a
party to, any material transaction with its members or Affiliates, except in the ordinary course
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of its business and on terms which are commercially reasonable and are no less favorable to it
than would be obtained in a comparable arm's-length transaction with an unrelated third party
(it being acknowledged that Seller has entered into or may enter into a Land Lease or Shared
Facilities Agreement with a Seller Affiliate);
(l) has not had and will not have any obligation to indemniS, and has nor
indemnified and will not indemnifu its managers, members, and oflicers, as the case may be,
other than the Independent Manager and in connection with the lndependent Manager's
actions related to the performance of this Agreement;
(m) except for obligations relating to security posted by Seller in favor of
Buyer hereunder or in favor ofother parties to contracts entered into by Seller pertaining to the
Facility and also except for obligations to Facility Lenders or Tax Equity Investors, does not
and will not have any of its obligations guaranteed by any Affiliate and will not hold itselfout
as being responsible for the debts or obligations of any other Person;
(n) has complied and will comply with all of the terms and provisions
contained in its organizational documents, and has done or caused to be done and will do all
things necessary to preserve its existence;
(o) will not commingle its funds or assets with those of any person and has
not participated and will not participate in any cash management system with any other
Person;
(p) will conduct all business in its own name and, except in connection with
a Tax Equity Financing utilizing a lease or inverted lease structure, from and after the
commercial operation Date will hold its material assets in its own name and conducted and
will conduct all material business in its own name;
(q) will maintain its financial statements, accounting records and other
entity documents separate from any other Person and will not permit its assets to be listed as
assets on the financial statement of any other entity except as required by GAAp; provided,
however, that, to the extent permitted by GAAP any such consolidated financial statement
shall contain a note indicating that its separate assets and liabilities are neither available to pay
the debts ofthe consolidated entity nor constitute obligations ofthe consolidated entity;
(r) will pay its own liabilities and expenses, including the salaries of its
own employees, out of its own funds and assets, and has maintained and will maintain a
sufficient number of employees in light of its contemplated business operations (it being
acknowledged and agreed that Seller may have no employees to the extent it contracts out its
requirements for all necessary managerial, operational and other services);
(s) will observe all limited liability company formalities;
() has not assumed or guaranteed or become obligated for, and will not
assume or guarantee or become obligated for the debts of any other person and has not held
out and will not hold out its credit as being available to satisry the obligations of any other
Person except as permifted pursuant to this Agreement;
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(u) has not acquired and will not acquire obligations or securities of its
members or any Affiliate;
(v) will allocate fairly and reasonably any overhead expenses that are
shared with any Affiliate, including paying for shared space and services performed by any
employee of an Affiliate;
(*) now maintains and uses, and will maintain and use separate stationery,
invoices, and checks bearing its name; such stationery, invoices, and checks utilized by it or
utilized to collect its funds or pay its expenses shall bear its own name and shall not bear the
name of any other entity unless such entity is clearly designated as being its agent;
(x) has not pledged and will not, except for the security posted in favor of
Buyer as provided herein and except as permifted under Section 14.7(c), pledge its assets for
the benefit ofany other Person;
(V) will not, without having first appointed an Independent Manager, and
without the affirmative vote of its Independent Manager: (A) dissolve, merge, liquidate or
consolidate; (B) sell, transfer, lease or otherwise convey all or substantially all of its assets
(other than as permitted under Section 14.7(c)); (C) engage in any other business activity, or
amend its organizational documents with respect to the matters set forth in this definition; or
(D) file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with
respect to itself or to any other entity in which it has a direct or indirect legal or beneficial
ownership interest; and will have such restriction memorialized at all times in the
organizational documents of Seller;
(z) has been, is and intends to remain solvent and has paid and intends to
continue to pay its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall have or become due, and has maintained,
is maintaining and intends to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its contemplated business
operations; provided, however, that this clause (y) shall not require anyone to make any
contribution of capital to Seller and shall not require Seller to make any capital call on its
members or to otherwise raise capital; and
(aa) has and will have no indebtedness other than (i) Facility Debt relating to
the development, bridge, construction or permanent financing for the Facility, including any
indebtedness in its replacement or substitution thereof, (ii) Taxes and Insurance premiums,
(iii) liabilities incurred in the ordinary course of business relating to its ownership,
management, administration, leasing and operation of the Facility and the Facility related
contracts, which liabilities are not more than sixty (60) days past due, are not evidenced by a
note and are paid when due, and which amounts are normal and reasonable under the
circumstances, and in any event not in excess of Twenty Million Dollars ($20,000'000) in the
aggregate, (iv) the Performance Security and any indebtedness incurred in support of or
connection with the Performance Security, and (v) such other liabilities that are permitted
pursuant to this Agreement;
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except that, until the execution of the principal documents for the Facility,s
construction financing, such limited liability company may (i) satisry the insurance
requirements of this Agreement by or through Seller's parent entities or investors provided
that the policies or endorsements extending insurance coverage to Seller shall reference Seller
as an independent legal entity and (ii) satisfo any required security/performance assurance,
whether due to be provided to Buyer under this Agreement or the CAISO, by or through
Seller's parent entities or investors so long as each letter of credit, guaranty or other
instrument of such security/performance assurance references Seller as an independent legal
entity.
"S&P" means Standard & Poor's Financial Services LLC.
"Storage Option Agreemenf' means that certain Storage Option Agreement to be
entered into by the Parties in substantially the form set forth on Appendix O.
"Subcontract" means any agreement or contract entered into on or after the Effective
Date by Seller and a Person other than Buyer, which Person is providing goods or services to
Seller that are related to the performance of Seller's obligations under this Agreement.
Subcontracts specifically include any agreement or contract that is referred to or defined as a
"subcontract" in the policies, ordinances, codes or laws with which Seller must comply pursuant
to this Agreement, or that is made with a "subcontractof' as such term is used or defined in such
policies, ordinances, codes, or laws.
"Subcontractor" means any party to a Subcontract with Seller.
"System Emergency" means each ofthe following: (i)',System Emergency,,as set forth
in the CAISO Tariff and (ii) a condition or situation that in the judgment of Buyer (a) is
imminently likely to endanger life or property; or (b) is imminently likely (as determined in a
non-discriminatory manner) to cause a material adverse effect on the security of, retiability of, or
damage to the Transmission System, Transmission Provider's interconnection facilities (as
defined in the Generator Interconnection Agreement) or the transmission systems of others to
which the Transmission System is directly connected.
"Tax" or "Taxes" means each federal, state, county, local and other (a) net income, gross
income, gross receipts, sales, use, ad valorem, business or occupation, transfer, franchise, profits,
withholding, payroll, employment, excise, property or leasehold tax and (b) customs, duty or
other fee, assessment or charge of any kind whatsoever, together with any interest and any
penalties, additions to tax or additional amount with respect thereto.
"Tax Equity Financing" means, with respect to Seller or parent Entity, any transaction
or series oftransactions (including without Iimitation any transaction of the type described in this
definition that utilizes a lease or inverted lease structure) resulting in a portion of the
membership interests in Seller or Parent Entity, as applicable, being issued or otherwise provided
to another Person (a "Tar Equily Investor") in exchange for capital contributions to seller or
Parent Entity, as applicable, or the Facility being sold to and leased by Seller from a Tax Equity
Investor, in either case for the purpose of raising a portion of the funds needed to finance the
construction of the Facility by monetizing the Tax credits, depreciation and other tax benefits
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associated with the Facility.
"Tax Equity Investor" has the meaning set forth in the definition of Ta,x Equity
Financing.
"Termination Notice" has the meaning set lorth in Section l3'4(a).
"Termination Payment" means a payment in an amount equal to the Non-Defaulting
Party's (a) Losses, plus (b) Costs, minus (c) Gains; provided, however, that if such amount is a
negative number, the Termination Payment shall be equal to zero.
"Test Energy" means Facility Energy that is delivered to the Point of Delivery prior to
the Commercial Operation Date.
"Transmission Provider" means the Person operating the Transmission System to and
from the Point of Delivery.
"Transmission Services" means the transmission and other services required to transmit
Facility Energy to or from the Point of Delivery.
"Transmission System" means the facilities utilized to provide Transmission Services.
"Unexcused Cause" has the meaning set forth in Section 14.6(b).
"UNFCCC" has the meaning set forth in the deflrnition of "Environmental Attributes'"
*WECC" means the Westem Electricity Coordinating Council.
*WREGIS" means Westem Renewable Energy Generation lnformation System.
"WREGIS Certificates" has the meaning set forth in Section 8.4.
"WREGIS Operating Rules" means the rules describing the operations of the WREGIS,
as published by WREGIS.
Other terms defined herein have the meanings so given when used in this Agreement with
initial-capitalized leners.
Section 1.2 Interpretation. In this Agreement, unless a clear contrary
intention appears:
(a) time is ofthe essence
(b) the singular number includes the plural number and vice versa;
(c) reference to any Person includes such Person's successors and assigns
(regardless of whether such Person's successors and assigns are expressly referenced in the
provision) but, in case ofa Party hereto, only ifsuch successors and assigns are perm itted by this
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Agreement, and reference to a Person in a particular capacity excludes such person in any other
capacity or individually;
(d) reference to any gender includes the other;
(e) reference to any agreement (including this Agreement), document, act,
statute, law, instrument, tariff or Requirement means such agreement, document, act, statute,
law, instrument, or tariff, or Requirement, as amended, modified, replaced or superseded and in
effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof,
regardless of whether the reference to the agreement, document, act, statute, law, instrument,
tariff, or Requirement expressly refers to amendments, modifications, replacements, or
successors;
(f) reference to any Article, Section, or Appendix means such Article of this
Agreement, Section of this Agreement, or such Appendix to this Agreement, as the case may be,
and references in any Article or Section or definition to any clause means such clause of such
Article or Section or definition;
(g) "hercunder," "hereof," "hereto" and words of similar import shall be
deemed references to this Agreement as a whole and not to any particular Article or Section or
other provision hereofor thereof;
(h) "including" (and with conelative meaning ..include',) means including
without limiting the generality of any description preceding such term, regardless of whether
words such as "without limitation" are expressly included in the applicable provision;
(i) relative to the determination of any period of time, .,ilom,' means ..from
and including," "to" means "to but excluding" and "through', means.through and including,,;
(j) unless otherwise indicated, reference to time shall always refer to pacific
Prevailing Time; and reference to any "day" shall mean a calendar day, unless othenwise
indicated; and
(k) the term "oC' is not exclusive, regardless of whether ..and/or', is used in
the applicable provision.
ARTICLE II
EFFECTIVE DATE, TERIVI, AND EARLY TERMINATION
Section 2.1 Effective Date. This Agreement is effective as of the Effective
Date. on or prior to the Effective Date, each of the following has occurred: (a) both parties
have executed and delivered this Agreement; (b) Buyer has received (i) copies of all requisite
resolutions and incumbency certificates ofeach Seller Party and any other documents evidencing
all actions taken by each Seller Party to authorize the execution and delivery of this Agreement
and all Ancillary Documents requiring execution by such Selter party, such resolutions to be
certified as of the Effective Date by an aurhorized representative ofthe seller party; and (ii) the
Enflorceability Opinion; (c) Seller has received copies ofall requisite resolutions and incumbency
certificates of Buyer authorizing the execution and delivery of this Agreement and all Ancillary
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Documents requiring execution by Buyer, such resolutions to be certified as of the Effective
Date by an autlhorizid official of Buyer, and (d) Buyer and Seller have executed and delivered
the Opiion Agreement, and, ifapplicable, a memorandum of option in the form required-by the
Option Agreement has been recorded in the Official Records of Los Angeles County, Califomia-
Section 2.2 Term.
(a) Agreement Term. The term of this Agreement (the "Agreement Term")
shall commence on the Effective Date and end on the last day ofthe Delivery Term or upon the
earlier termination of this Agreement in accordance with the terms hereof.
(b) Delivery Term. This Agreement shall have a delivery term (the "Delivery
Term") commencing on the Commercial Operation Date and ending at I l:59 pm on the day
before the twentieth (20th) anniversary of the commercial operation Date, unless sooner
terminated in accordance with the terms of this Agreement'
Section 2.3 Survivability. The provisions of this ARTICLE II'
ARTICLE XII, ARTICLE XlIl, Section 14.9 and Section 14.21 shall survive for a period of one
year following the termination of this Agreement. The provisions of ARTICLE XI shall survive
for a period offour (4) years following final payment made by Buyer hereunder or the expiration
or termination date of this Agreement, whichever is later. The provisions of ARTICLE V,
ARTICLE VI, ARTICLE Vlll. and ARTICLE IX shall continue in effect after termination to the
extent necessary to provide for final billing, adjustments, and deliveries (including the provision
to Buyer of Replacement Product or Shortfall Damages) related to any period prior to
termination of this Agreement.
Section 2.4 EarlY Termination.
(a) Early Termination by Mutual Agreement. This Agreement may he
terminated by mutual written agreement of the Parties'
(b) Early Termination for Failure to Provide Performance Security'
Buyer may, in its sole discretion and without penalty to Buyer, terminate this Agreement,
effective upon notice to Seller, if Seller fails to deliver the Project Development Security within
ten (10) days after the Effective Date.
(c) Early Termination for Default. Upon the occulrence of a Default, the
Non-Defaulting Party may terminate this Agreement as set forth in Section 13.4.
(d) Early Termination for Failure to Achieve a Key Milestone' Buyer
may, in its sole discretion and without penalty to Buyer, terminate this Agreement, effective
upon notice to Seller, pursuant to Section 3.6(c).
(e) Early Termination for Failure to Achieve Commercial Operation
Date. Buyer may, in its sole discretion and without penalty to Buyer, terminate this Agreement,
effective upon notice to Seller, if Seller fails to achieve the Commercial Operation Date on or
before the Outside Commercial Operation Date.
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(0 Early Termination for Failure to Obtain CEC Certilication. Buyer
may, in its sole discretion and without penalty to Buyer, terminate this Agreement, effective
upon notice to Seller if the Facility is not CEC Certified by the date that is six (6) months
following the Commercial Operation Date.
(g) Early Termination for Force Majeure. This Agreement may be
terminated pursuant to Section 14.6(c).
(h) Early Termination for Exercise of ROFO or ROFR. If pursuant ro a
written agreement entered into by Buyer, Buyer accepts the ROFO or the ROFR for any
proposed sale of the Facility, this Agreement shall terminate effective upon the Closing ofsuch
sale to Buyer.
(i) Early Termination for Exercise of Project Purchase Option. lf,
pursuant to a written agreement entered into by Buyer, Buyer elects to exercise the Project
Purchase Option, this Agreement shall terminate effective upon the Closing under the Option
Agreement, unless sooner terminated as otherwise herein provided.
0) Early Termination for Shortfall. Buyer may in its sole discretion and
without penalty to Buyer, terminate this Agreement, effective upon notice to Seller, pursuant to
Section 9.5.
(k) Early Termination Due to Environmental Effects. Buyer may in its
sole discretion and without penalty to Buyer, term inate this Agreement, in either case, effective
upon notice to Seller, pursuant to Section 3.1.
(l) Effect of Termination. Except as otherwise provided herein, any early
termination of this Agreement under this Section 2.4 shall be without prejudice to the rights and
remedies ofa Party for Defaults occurring prior to such termination.
ARTICLE III
DEVELOPMENT OF THE FACILITY
Section 3.1 CEQA Determinations. Buyer has all rights and powers available
to it as a responsible agency under CEQA to participate in the CEQA review of the Facility,
including commenting on the lead agency's notice of preparation, consulting with and providing
comments to the lead agency during preparation of the CEQA Documents. Buyer shall have full
discretion to consider the CEQA Documents in order to reach its own decision under CEeA
about the Facility, with full authority under GEQA to: (a) adopt and require feasible mitigation
measures or altematives to avoid or lessen significant environmental impacts resulting from the
Facility; (b) determine that any significant impacts that cannot be mitigated are acceptable due to
oveniding concems; or (c) terminate this Agreement due to the Facility's significant adverse
environmental impacts. on or before the thirtieth (30th) day after the lead agency's filing of a
notice of determination under CEQA, or the thirtieth (30d) day after thi Effective bate,
whichever is later, Buyer may issue one of the following: (i) a notice confirming it has complied
with CEQA Guidelines sections 15096(a), (0, (g), and (h) by considering the CEeA Documents,
adopting applicable alternatives or mitigation measures, making findings, and filing a Notice of
Determination for its approval of the purchase of Facility Energy (the "cEeA Acceptability
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Notice"), or (ii) a notice that Buyer, based upon its independent review ofthe CEQA Documents,
has determined not to approve the purchase of the Facility Energy hereunder, and to terminate
this Agreement, the Option Agreement and the Storage Option Agreement due to the significant
adverse environmental effects from the Facility specified in the CEQA Documents (the "CEQA
Unacceplabilily Norrce"). IfBuyer fails to provide Seller with a notice by the end ofsuch thiny
(30) day period, so long as no challenge has been successfully made or is pending against the
determination of the lead agency as of such date, Buyer will be deemed to have confirmed that
Seller has complied with CEQA Guidelines. The Parties shall work together in good faith to
make any necessary amendments to this Agreement required in connection with the CEQA
review process. Upon delivery by Buyer of a CEQA Unacceptability Notice, this Agreement,
the Option Agreement and the Storage Option Agreement shall automatically terminate.
Section 3.2 General.
(a) Project Design. Seller shall determine the proposed location, design, and
configuration of the Facility as it deems appropriate, subject to the Requirements and the
requirements of the Ancillary Documents, including the characteristics and other requirements
for the Facility set forth in Aopendix B-1, and also subject to any conditions imposed by the lead
agency or any responsible agency as part ofthe CEQA review ofthe Facility and which Seller
deems acceptable.
(b) Permitting. Seller, at its expense, shall timely take all steps necessary to
obtain all Permits required to construct, maintain, and operate the Facility in accordance with the
Requirements and for the performance ofSeller's obligations hereunder.
(c) Meetings with Governmental Authorities. Seller shall represent the
Facility as necessary in all meetings with and proceedings before all Governmental Authorities.
(d) Construction. Seller shall use commercially reasonable and diligent
efforts to site, develop, finance and construct the Facility. Seller shall develop, operate and
maintain the Facility, at its sole risk and expense, and in compliance with the Requirements and
applicable manufacturer's and operator's specifications and recommended procedures; provided,
however, meeting these requirements shall not relieve Seller of its other obligations under this
Agreement.
(e) Other Information. ln addition to the reports required to be delivered
under this Agreement, including Section 3.6. and Section 5.6, Seller shall provide to Buyer such
other information regarding the permitting, engineering, construction or operations, of Seller, its
Subcontractors or the Facility, financial or otherwise, and other data conceming the Seller, its
Subcontractors or the Facility as Buyer or Buyer's Authorized Representative may, from time to
time, reasonably request. Buyer and Buyer's Authorized Representative shall be perm itted to
inspect the Facility from time to time upon reasonable notice to Seller and during reasonable
business hours subject to Site safety protocols and orientation, but Buyer and Buyer's Authorized
Representative shall not interfere with the activities at the Facility.
Section 3.3 Site Confirmation. Seller represents and warrants that (a)
Seller's agents and representatives have visited, inspected and are familiar with the Site and its
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surlace physical condition relevant to the obligations of Seller pursuant to this Agreement,
including surface conditions, normal and usual soil conditions, roads, utilities, the prisence, if
any, of archaeological and cultural artifacts and topography, and solar radiation, air and water
quality conditions, (b) Seller is familiar with all local and other conditions that may be materialto se er's performance of its obligations under this Agreement (including, transportation,
seasons and climate, access, weather, the presence, ifany, of endangered species, handling and
storage of materials and equipment, and availability and quality of labor and utilities), and (c)
Seller has determined that the Site constitutes an acceptable and suitable site for the construction
and operation ofthe Facility in accordance herewith. Any failure by Seller to take the actions
described in this Section 3.3 shall not relieve Seller from any responsibility for estimating
properly the difficulty and cost ofsuccessfully constructing, maintaining or operating the Facility
in accordance with this Agreement or from proceeding to construct, maintain and operate the
Facility successfully without any additional expense to Buyer.
Section3.4 Subcontracts.
(a) Seller shall cause provisions to be included in each Subcontract that
provide: (i) Buyer with rights of access to the Facility and the work performed under such
Subcontract at all reasonable times (but subject to Site safety protocols and orientation) and the
right to inspect, make notes about, and review all documents, drawings, plans, specifications,
permits, test results and information as Buyer may reasonably request, subject to redaction of
confidential or proprietary information; and (ii) that the personnel of and consultants to, the
applicable contractor and Seller shall be available to Buyer and its agents, representatives and
consultants at reasonable times and with prior notice for purposes ofdiscussing any aspect ofthe
Facility or the development, engineering, consrruction, installation, testing or performance
thereofor the exercise ofBuyer's rights under Section 5.2.
(b) Seller shall deliver to Buyer a schedule of the performance of initial
performance tests and all other tests required under each Subcontract.
Section 3.5 Certification of Commercial Operation Date. Not less than
thirty (30) days prior to the date upon which Seller expects to achieve commercial operation,
Seller shall give written notice to Buyer of such expected Commercial operation Date. Seller
shall provide Buyer with notice in accordance with Section 14.2 when Seller believes that all
conditions precedent to achieving commercial operation of the Facility as specified in the
definition of "Commercial Operation" have been satisfied. Within ten (10) Business Days of
Seller's notice of Commercial Operation, Buyer shall in writing either accept or reject the notice
in its reasonable discretion and if Buyer rejects the notice, seller shall promptly correct any
defects or deficiencies and resubmit the notice. lf, during such ten (10) Business Day period,
Buyer does not either accept or reject such notice, then for all purposes of this Agreement Buyer
shall be deemed to have accepted such notice. The Commercial Operation Date shall be the date
on which Buyer accepts or is deemed to have accepted such notice as provided in this
Section 3.5.
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Section 3.6 Milestone Schedule.
(a)AttachedasAppendixlisamilestoneschedulewithdeadlinesforthe
development of the Facility through the commercial operation Date (each milestone, a
',Mileitone', and each date by which a Milestone is to be completed, a "Mileslone Dale"). Seller
shall achieve each Milestone by the Milestone Date therefor. Until the Commercial Operation
Date, Seller shall provide Buyer with a report on a quarterly basis (until six (6) months prior to
the scheduled Commercial Operation Date, at which time such reports shall be provided on a
Monthly basis) that includes: (i) a description of the site plan for the Facility, (ii) a description of
any planned changes to the Facility or Site plan since the previously delivered report, (iii) a bar
chart schedule showing progress to achieving the remaining Milestones, (iv) a chart showing the
critical path schedule of major items and activities, (v) a summary of activities at the Facility
during the previous Month, (vi) a forecast ofactivities during the then-current Month, (vii) a list
of any issues that could impact Seller's achievement of Milestones by the applicable Milestone
Dates, and (viii) pictures, in sufficient quantity and of appropriate detail, documenting
construction and startup progress with respect to the Facility. If Seller anticipates that it will not
achieve a Milestone by the applicable Milestone Date (as such date may be extended pursuant to
this Section 3.6), Seller shall promptly prepare and deliver to Buyer a remedial action plan
("Remedial Aclion Ptan"), which shall set forth (l) the anticipated period of delay, (2) the basis
for such delay, (3) an outline of the commercially reasonable steps that Seller is taking to address
the delay and to ensure that future Milestones, including the Guaranteed Commercial Operation
Date, will be timely achieved, (4) a proposed revised date for achievement of the applicable
Milestone and (5) such other information and in such detail as may be reasonably requested by
Buyer. Except as set forth in Section 3.6(c). Seller shall not have any liability for failure to
timely achieve a Milestone other than the obligation to submit a Remedial Action Plan; provided,
however,that the foregoing shall not limit Buyer's right to exercise any right or remedy available
under this Agreement or at law or in equity for any other Default occurring concurrently with or
before or after Seller's delay in achievement ofthe applicable Milestone.
(b) Each Milestone Date (including the Outside Commercial Operation Date)
may be extended, on a day-for-day basis to the extent Seller is actually, demonstrably and
unavoidably delayed in achieving such Milestone due to Force Majeure; provided that the
outside Commercial operation Date shall not be extended beyond June 30,2017, for any reason
whatsoever.
(c) If Seller fails to achieve any Key Milestone by the applicable Milestone
Date, including a failure to achieve the commercial operation Date by the Guaranteed
commercial operation Date (as may be extended pursuant to section 3.6(b)), Seller shall pay
liquidated damages to Buyer in an amount equal to (i) the number of days between the Milestone
Date and the date upon which such Key Milestone is achieved (or the Agreement is terminated
by Buyer), multiplied by (ii) the applicable daily liquidated damage amount set forth for such
Key Milestone in Appendix I (the *Doity Delay Damages"). For the avoidance of doubt, if
multiple Key Milestones are missed, Seller shall pay Daily Delay Damages for each Key
Milesione. If Seller faits to achieve any Key Milestone other than the Guaranteed Commercial
Operation Date, by rhe date that is one hundred eighty (180) days after the Milestone Date for
such Key Milestone, Buyer shall have the right in its sole discretion and without penalty to
(l) term inate this Agreement for a Default under Sgg!ig!-l!!, or (2) allow Seller to continue to
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pay the Daily Delay Damages to Buyer, during which time such Buyer shall not terminate the
Agreement based on Seller's failure to timely achieve such Key Milestone. If Seller achieves the
Commercial operation Date on or before the Guaranteed Commercial operation Date, then
Buyer shall refund to Seller, without interest, any amounts previously paid to such Buyer as
Daily Delay Damages for failure to achieve the Environmental compliance Key Milestone
and/or the Site Control Key Milestone by the respective Milestone Date therefor. lf Seller fails
to achieve commercial operation by the outside commercial operation Date (as such date may
be extended pursuant to section 3.6(b)), Buyer shall have the right in its sole discretion and
without penalty to terminate this Agreement for a Default under Section 13.4.
(d) The damages rhat Buysr would incur due to Seller's failure to timely
achieve a Key Milestone would be difficult or impossible to predict with certainty, and it is
impractical or difficult to assess actual damages in those circumstances, but the Daily Delay
Damages are a fair and reasonable calculation of such damages, and shall be Seller,s sole
liability and obligation, and Buyers' sole right and remedy, for Seller's failure to achieve any
Key Milestone by the Milestone Date therefor. Notwithstanding the foregoing, the Daily Delay
Damages shall not limit Buyer's right to exercise any right or remedy available under this
Agreement or at law or in equity for any Default occurring concurrently with, before or after
Seller's delay in achievement of the applicable Key Milestone, or in connection with any
termination for failure to achieve a Key Milestone by the Milestone Date therefor or Commercial
Operation by the Outside Commercial Operation Date.
Section 3.7 Decommissioning and Other Costs. Unless a Closing occurs
pursuant to the exercise by Buyer ofthe ROFO, ROFR or the Project Purchase Option, Buyer
shall not be responsible for any cost of decommissioning or demolition of the Facility or any
environmental or other liability associated with the decommissioning or demolition of the
Facility without regard to the timing or cause of the decommissioning or demolition.
ARTICLE IV
OPERATION AND MAINTENANCE OF THE FACILITY
Section 4.1 General Operational Requirements. Seller shall, at all times:
(a) At its sole expense, operate and maintain the Facility (i) in accordance
with the Requirements and (ii) in a manner that is reasonably likely to achieve the Annual
Contract Quantity and result in a useful lile for the Facility of not less than the Delivery Term;
(b) At its sole expense, opeftrre and maintain the Facility using a eualified
Operator in accordance with the Requirements;
(c) Use qualified and trained personnel for managing, operating and
maintaining the Facility and for coordinating with Buyer, and ensure that necessary personnel are
available on-site or on-call twenty-four (24) hours per day during the Detivery Term;
(d) Operate and maintain the Facility with due regard for the safety, security
and reliability ofthe interconnected facilities and Transmission System; and
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(e) Comply with operating and maintenance standards recommended or
required by the Facility's equipment suppliers.
Section 4.2 Operation and Maintenance Plan.
(a) General. Seller shall devise and implement a plan of inspection,
maintenance, and repair for the Facitity and the components thereof in order to maintain such
equipment in accordance with Prudent Utility Practices and shall keep records with respect to
inipictions, maintenance, and repairs thereto. The aforementioned plan and all records of such
activities shall be available for inspection by Buyer during Seller's regular business hours upon
reasonable notice.
(b) After Commercial Operation. Following the Commercial Operation
Date, Seller shall provide to Buyer on a quarterly basis, any regularly prepared operations and
maintenance status reports of the Facility provided to WECC or the Facility Lenders. In addition
to the other required and preventative maintenance actions required by this Agreement, Seller
shall (and shall notifo Buyer results of the following): (i) conduct regular visual equipment
inspections and log significant parameters; (ii) identifo and perform all preventative maintenance
requirements for the following calendar year; (iii) schedule and assign routine maintenance
during operations, planned outages, as well as maintenance that can be conducted in parallel; (iv)
conduct periodic maintenance to various equipment; (v) conduct periodic quality assurance and
quality control activities and inspections in accordance with the Quality Assurance Program; and
(vi) hire Subcontractors, as applicable to meet the Facility's maintenance, betterment, and
improvement needs.
Section 4.3 After Purchase Option Notice. Following the provision by Buyer
ofa Purchase Option Tentative Exercise Notice (as defined in the Option Agreement) and until
such time as the Closing occurs or Buyer declines to purchase the Facility in accordance with the
Option Agreement, Seller shall, to the extent prepared in the ordinary course ofbusiness:
(a) devise and implement, or cause the Qualified Operator to devise and
implement, an operations and maintenance plan, or implement an existing plan that includes the
status of the Facility and each of the major components thereof in order to maintain such
equipment in accordance with Prudent Utility Practices (the "Operalion snd Maintenance
P/az"). Such Operation and Maintenance Plan shall be consistent with the requirements of any
Facility Lender. Seller shall keep, or cause the Qualified Operator to keep, r€cords with respect
to inspections, maintenance, and repairs. The Operations and Maintenance Plan and all records
associated therewith shall be available for inspection by Buyer during Seller's regular business
hours upon reasonable notice; p@yldEd that Buyer shatl at all times comply with Seller's or the
Qualified Operator's written safety and security requirements and shall not interfere with Facility
operations and activities when present at the Facility;
(b) provide Buyer, on a quarterly basis, with a detailed description in the form
of a written report, regarding the on-going operations of the Facility during such quarter, setting
forth the status of the operations of the Facility or any component thereof, including any
equipment or other operational or maintenance failures, defects or other issues and any repairs,
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replacements, or other remediation provided or to be provided therefor in a form which is
reasonably acceptable to Buyer;
(c) as of January 15 of each calendar year, update the Operation and
Maintenance Plan for the subsequent twelve (12) month calendar year period and submit the
same to Buyer;
(d) perform routine and preventive maintenance actions in accordance with all
applicable manufacturers' instructions, the Quality Assurance Program, Prudent Utility Practice,
and the Operation and Maintenance Plan, including to: (i) conduct regular visual equipment
inspections and log significant parameters ; (ii) identily all preventive maintenance requirements
for a period of the following two (2) calendar years; (iii) schedule and assign routine
maintenance during operations, planned outages, and maintenance that can be conducted in
parallel (but not extend required actions) in the event of a forced or unscheduled outage, and
outage and curtailment notifications (scheduled and unscheduled); (iv) conduct periodic
maintenance to various equipment, and provide a report about any findings to Buyer; (v) conduct
periodic quality control and quality assurance activities and inspections in accordance with
Appendix J and provide reports thereof to Buyer; and (vi) hire Subcontractors, as applicable, to
meet the Facility's plant's maintenance, betterment, and improvement needs.
Section 4.4 Environmental Credits. Seller shall, if applicable, obtain in its
own name and at its own expense all pollution or environmental credits or offsets necessary to
operate the Facility in compliance with any Requirement of Law; provided for the avoidance of
doubt, Seller shall not use any Environmental Attributes to satisry the foregoing obligation.
Section 4.5 Outages.
(a) Buyer and Seller shall cooperate to minimize Scheduled Outages during
specified periods of time during each calendar year in accordance with Prudent Utility Practices
and this Section 4.5 (such periods, the "Major Maintenance Blockouf'). No later than one
hundred twenty (120) days prior to the anticipated Commercial Operation Date and the
commencement of each Contract Year thereafter, Buyer shall provide Seller with its specified
Major Maintenance Blockout. In the absence of such updated notification, the most recenr
previous Major Maintenance Blockout notification shall apply. Seller shall attempt to minimize
its Scheduled Outages during the Major Maintenance Blockout consistent with Prudent Utility
Practices. No later than sixty (60) days prior to the anticipated Commercial Operation Date, and
for each calendar year thereafter, no later than the deadline for providing the CAISO with
proposed maintenance outages for the following year as described in the CAISO Tarifl Seller
shall provide Buyer with its non-binding written projection of all Scheduled Outages for the
succeeding calendar year (the *Scheduled Outage Projeclioa") reflecting a minimized schedule
of scheduled maintenance during the Major Maintenance Blockout. In addition, Seller shall
cooperate in good faith with maintenance scheduling requests by Buyer consistent with Prudent
Utility Practices. The Scheduled Outage Projection shall include information conceming all
projected Scheduled Outages during such period, including (A) the anticipated start and end
dates of each Scheduled Outage; (B) a description of the maintenance or repair work to be
performed during the Scheduled Outage; and (C) the anticipated MW of operational capacity, if
any, during the Scheduled Outage. Seller shall notifu Buyer of any change in the Scheduled
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Outage Projection as soon as practicable, but in no event later than thirty (30) days prior to the
originally-scheduled date of the Scheduled Outage. Seller shall use commercially reasonable
efforts to accommodate reasonable requests of Buyer with respect to the timing of Scheduled
Outages and shall, to the extent feasible and consistent with Prudent Utility Practices, arrange for
Scheduled Outages to occur between October I and May I ofeach year (or such other period as
reasonably determined by Buyer from time to time) and coincident with planned transmission
outages, but not to overlap with the Major Maintenance Blockout. In the event of a System
Emergency, Seller shall use commercially reasonable efforts to reschedule any Scheduled
Outage previously scheduled so that it occurs during the System Emergency.
(b) In addition to reporting outages to Buyer within any applicable time
period for reporting outages under the CAISO Tariff and applicable rules and regulations ofthe
CAISO, immediately upon identification of a situation likely to result in a Forced Outage
occurring within a twenty-four (24) hour period that is likely to cause or require removal ofthe
Facility from service, or a reduction in the maximum output capability ofthe Facility by one (l)
MW or more from the value most recently recorded in the Scheduling and Logging system for
the CAISO, Seller shall notify Buyer. For all other Forced Outages, Seller shall provide Buyer
with as much advance notice as practicably possible, but in all cases, shall notifi Buyer within
30 minutes after the commencement of the Forced Outage. Seller shall provide detailed
information conceming each Forced Outage, including (i) the start and anticipated end dates of
the Forced Outage; (ii) a description ofthe cause ofthe Forced Outage; (iii) a description ofthe
maintenance or repair work to be performed during the Forced Outage; and (iv) the anticipated
MW of operational capacity, if any, during the Forced Outage. Seller shall take all reasonable
msasures and exercise commercially reasonable efforts to avoid Forced Outages and to limit the
duration and extent of any such outages.
(c) In addition to the requirements set forth in Section 4.5(a) and Section
4.5(b), the Parties shall cooperate to develop mutually acceptable procedures for addressing
Scheduled Outages and any other outages arising in connection with the Project.
(d) In the event of any inconsistency between the provisions in this Section
4.5 and any applicable requirements of CAISO, the provisions of CAISO shall govem.
ARTICLE V
COMPLIANCE DIJRING CONSTRUCTION OPERATIONS; SECURITY
Section 5.1 Guarantees. Seller warrants and guarantees that it will perform,
or cause to be performed, all development, engineering, design and construction in a good and
workmanlike manner and in accordance with the Requirements. Seller warrants that to Seller's
knowledge, after due inquiry, at the Commercial Operation Date, the Facility, its engineering,
design and construction, its components and related worK shall be free fiom material defects
caused by errors or omissions in design, engineering and construction and covenants and agrees
that it will obtain from the manufacturer(s) of the equipment installed in the Facility limited
warranties in line with current solar industry practices, but with no less than, in each case, twenty
(20) year limited warranties on the photo voltaic panels installed at the Facility and five (5) year
limited warranties on the inverters installed at the Facility. Seller further warrants that,
throughout the Delivery Term: (a) the Facility will be free and clear of all Liens other than
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Permitted Encumbrances, and (b) the Facility will be designed, constructed and tested in
compliance with the Requirements. Seller also warrants and guarantees that throughout the
Delivery Term, it will monitor the operation and maintenance of the Facility and that said
operation and maintenance is, and will be, in full compliance with all Requirements applicable to
the Facility. Without limiting rhe foregoing, Seller shall promptly repair and/or replace,
consistent with hudent utility Practice, any component of the Facility rhat may be damaged or
destroyed or otherwise not operating properly and efficiently. Seller shall exercise commercially
reasonable efforts to timely undertake all updates or modifications to the Facility, and its
equipment and materials, including procedures, programming and software, required by prudent
Utility Practice. Seller shall, at its expense, maintain throughout the Agreement Term an
inventory of spare parts for the Facility in a quantity that is consistent with Prudent Utility
Practice.
Section 5.2 Buyers' Rights to Monitor in General. Buyer shall have the
right, and Seller shall permit Buyer and its Authorized Representative, advisors, engineers and
consultants, to observe, inspect, and monitor the construction and operations and activities of the
Facility, including (a) reviewing and monitoring all initial performance tests during Facility start-
up and all tests required under the Subcontracts to be performed prior to each Milestone and
achievement of Commercial Operation, and (b) performing such detailed examinations and
inspections as, in the judgment of Buyer, are appropriate and advisable to determine that the
Facility equipment and ancillary components of the Facility have been installed in accordance
with the Requirements; provided that such activities on the part of Buyer and its Authorized
Representative shall be coordinated with Seller so as to not interfere with the construction or
operation of the Facility. Seller shall provide Buyer at least ten (10) Business Days prior notice
of the commencement ofany performance tests. Seller shall cause its personnel, consultants, and
contractors to be available to, and cooperate in all reasonable respects with, Buyer and its
Authorized Representative, advisors, engineers, and consultants at reasonable times and with
prior notice for purposes of discussing any aspect of the Facility or the development,
engineering, construction, installation, testing, performance, operation, or maintenance thereof
and Buyer's exercise of its rights under this Section 5.2.
Section 5.3 Effect of Review by Buyer. Any review by Buyer or a Buyer's
Authorized Representative ofthe design, construction, engineering, operation or maintenance of
the Facility, or observation ofany testing, is solely for the information of Buyer. Buyer shall
have no obligation to share the results ofany such review or observations with Seller, nor shall
any such review or the results thereof(whether or not the results are shared with Seller), nor any
failure to conduct any such review, nor any observation of testing or failure to observe testing,
relieve Seller from any of its obligations under this Agreement. By making any such review or
observing any such testing, Buyer makes no representation as to the economic and technical
feasibility, operational capability or reliability ofthe Facility. Seller shall in no way represent to
any third party that any such review by Buyer or Buyer's Authorized Representative of the
Facility thereof, including any review ofthe design, construction, operation or maintenance, is a
representation by Buyer as to the economic and technical feasibility, operational capabiliry or
reliability of the Facility. Seller is solely responsible for the economic and technical feasibility,
operational capability and reliability thereof.
Section 5.4 Quality Assurance Program. Seller agrees to maintain and
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comply with a wriften quality assurance policy ("Quality Assurance Program") attached hereto
as Appendix G, and Seller shall cause all work performed on or in connection with the Facility to
materially comply with said Quality Assurance Program.
Section 5.5 No Liens. Except as otherwise permitted by this Agreement
(including without limitation in connection with Tax Equity Financing utilizing a lease or
inverted lease structure): (a) the Facility shall be owned by Seller during the Agreement Term;
and (b) Seller shall not sell or otherwise dispose ofor create, incur, assume or permit to exist any
Lien (other than Permifted Encumbrances) on any portion ofthe Facility or any other property or
assets that are related to the operation, maintenance and use of the Facility without the prior
written approval of Buyer.
Section 5.6 Reporting and Information. Seller shall provide to Buyer
(a) Monthly reports of the operation of the Facility, which shall include (i)a performance
summary of the Month- and Contract Year-to-date MWh delivery of Facility Energy, capacity
factor, and availability (including actual availability vs. expected availability), (ii) reports of
expected generation indicators of when Shortfall Energy may resuh; (iii) descriptions of
weather, reasons for any downtime, maintenance or repairs, and Curtailment Periods and other
curtailment events during the applicable Month, and (iv) a safety and environmental summary,
and (b) such other information regarding the permitting, engineering, construction or operations
ofthe Facility as Buyer may, from time to time, reasonably request.
Section 5.7 Performance Security.
(a) Within thirty (30) days after the Effective Date, Seller shall fumish to
Buyer (i) one or more letters of credit issued by Qualified Issuers in the form attached hereto as
Appendix E, or (ii) cash (to be held in an escrow account pursuant to an escrow agreement with a
Qualified Issuer in form and substance satisfactory to Buyer (an "Escrow Account')), or a
combination of the two, in the ag$egate amount of Two Million Two Hundred Fifty Thousand
Dollars ($2,250,000), which shall guarantee Seller's obligations under this Agreement (the
"Projecl Development Secufity"). Seller shall maintain the Project Development Security until
Seller posts the Delivery Term Security pursuant to Section 5.7(b), or until Buyer is required to
retum the Project Development Security under Section 5.7(c).
(b) As a condition to the achievement of the Commercial Operation Date,
Seller shall have fumished to Buyer (l) one or more letters of credit issued by Qualified Issuers
in the form aftached hereto as-AppgldEE, or (2) cash (to be held in an Escrow Account), or (3)
a performance and payment bond from a Qualified Bond Issuer in lorm and substance acceptable
to Buyer, or any combination ofthe foregoing (subject to the limitation on any performance and
payment bond as provided below), in the aggregate amount of Six Million Nine Hundred Ten
Thousand Dollars ($6,910,000) which shall guarantee Seller's obligations under this Agreement
(collectively, the "Delivery Term Security"); provided that under no circumstances shall any
performance and payment bond provided as part of the Delivery Term Security exceed the
amount of Two Million Four Hundred Ten Thousand Dollars ($2,410,000) (the "Bond
Portion"). From and after the end ofthe tenth (l0th) Contract Year, the required amount ofthe
Delivery Term Security shall be reduced to Five Million Four Hundred Ten Thousand Dollars
($5,410,000) and shall consist of(l) one or more letters ofcredit issued by Qualified Issuers in
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the form attached hereto as Apoendix E, (2) cash (to be held in an Escrow Account), or (3) a
performance and payment bond fiom a Qualified Bond Issuer in form and substance acceptable
to Buyer, or any combination ofl the foregoing; provided that under no circumstances shall the
performance and payment bond provided as part of the Delivery Term Security following the
lOth Contract Year exceed Nine Hundred Ten Thousand Dollars ($910,000). From and afterthe
Commercial Operation Date, Seller shall maintain the Delivery Term Security in the required
amount until the end ofthe Delivery Term or until Buyer is required to retum the Delivery Term
Security to Seller as set forth in Section 5.7(c).
(c) Buyer shall retum the unused portion of the (i) Project Development
Security, if any, to Seller promptly after: (A) Seller's provision of the Delivery Term Security,
unless Seller elects to apply the Project Development Security toward the Delivery Term
Security, or (B) the effective date ofany early termination of the Agreement by Buyer promptly
upon payment ofall damages due and owing to Buyer, and (ii) Delivery Term Security, if any, to
Seller promptly after: (A) the Agreement Term has ended, and (B) all obligations of Seller
arising under this Agreement are paid (whether directly or indirectly such as through set-off or
netting) or performed in full.
(d) Buyer may draw on the Performance Security (i) at any time fotlowing the
accrual of Daily Delay Damages hereunder in the amount of such Daily Delay Damages,
(ii) upon Seller's failure to pay Buyer the Shortfall Damages prior to rhe end of the Shortfall
Makeup Period as provided in Section 9.3, or (iii) upon Seller's failure to make any other
payment due to Buyer hereunder in the amount of such unpaid payment, including any
Termination Payment. Buyer may draw all or any part of such amounts due to Buyer from any
form ofsecurity provided under this Section 5.7. and in any sequence Buyer may elect, in its sole
discretion. Any failure o!, or delay by, Buyer in electing to draw any amount from the
Performance Security shall in no way prejudice Buyer's rights to subsequently recover such
amounts from the Performance Security or in any other manner. Within five (5) Business Days
following any draw by Buyer on the Performance Security, Seller shall replenish the amount
drawn such that the Performance Security is restored to the applicable amount set forth in
Section 5.7(a) or Section 5.7(b).
(e) Seller shall notify Buyer of the occurrence of a Downgrade Event within
five (5) Business Days after obtaining knowledge of the occurrence ofsuch event. Ifat any time
there shall occur a Downgrade Event, Seller shall replace the Performance Security from the
Person that has suffered the Downgrade Event within ten (t0) Business Days ofsuch Downgrade
Event. Such replacement security shall meet the requirements of this Section 5.7. If the
replacement Performance Security is not provided by Setler, Buyer shall have the right to
demand payment of the full amount of the Performance Security, and Buyer shall retain such
amount in order to secure Seller's obligations under this Agreement; provided that if and to the
extent such amount exceeds payment and performance in full ofall ofseller's obligations under
this Agreement, Buyer shall refund the excess to Seller promptly after all such obligations of
Seller under this Agreement have been paid or performed in full.
(f) Ifany Performance Security is in the form ofa letter ofcredit, then Seller
shall provide, or cause to be provided, a replacement lefter of credit from a Qualified Issuer, in
the amount required under this Section 5.7 within ten (10) Business Days of notice from Buyer
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to Seller requesting such replacement Performance Security after the occurrence of any one of
the following events: (i) the failure ofthe issuer of the letter of credit to extend such letter of
credit at least fifteen (15) Business Days prior to the expiration of such letter of credit; (ii) the
failure of the issuer of the letter of credit to immediately honor Buyer's properly documented
request to draw on such letter of credit; or (iii) the issuer of the letter of credit becomes
Bankrupt. If the replacement letter of credit is not delivered in accordance with this Section
5.(1, Buyer shall have the right to demand payment of the Performance Security, and Buyer
shall retain such amount in order to secure Seller's obligations under this Agreement; provideel
that, ifand to the extent such retained amount exceeds payment and performance in flull of all of
Seller's obligations under this Agreement, Buyer shall refund the excess to Seller promptly after
all such obligations of Seller under this Agreement shall have been paid or performed in full.
(g) Seller shall, from time to time as requested by Buyer's Authorized
Representative, execute, acknowledge, record, register, deliver and file all such notices,
statements, instruments and other documents as may be necessary or advisable to render fully
valid, perfected and enforceable under all Requirements of Law the Performance Security
(including any Ancillary Documents required therefor) and the rights, Liens and priorities of
Buyers with respect to such Performance Security.
(h) Notwithstanding the other provisions of this Agreement, the Performance
Security: (i) constitutes security for, but is not a limitation of, Seller's obligations under this
Agreement, and (ii) shall not be Buyers' exclusive remedy against Seller for Seller's failure to
perform in accordance with this Agreement.
ARTICLE VI
PURCHASE AND SALE OF PRODUCT
Section 6.1 Purchases by Buyer.
(a) Subject to the terms of this Agreement, prior to the Commercial
Operation Date, Seller shall sell and deliver, and Buyer shall purchase and receive, the Products
associated with Test Energy for the applicable Contract Price set forth in Section I of
Appendix A.
(b) Subject to the terms ofthis Agreement, and except as set forth in Section
6.1(d), on and after the Commercial Operation Date and continuing for the Delivery Term, Seller
shall sell and deliver, and Buyer shall purchase and receive, the Products associated with Facility
Energy (other than Excess Energy) and the Replacement Product at the applicable Contract Price
set forth in Section 2 of Appendix A.
(c) Subiect to this Agreement. and except as set lorth in Section 6.1(d). on and
after the Commercial Operation Date and continuing for the Delivery Term, Seller shall sell and
deliver, and Buyer shall purchase and receive, the Products associated with Excess Energy at the
applicable Contract Price set fonh in Section 3 ofAppendix A.
(d) Seller shall use good faith efforts to ensure that the Facility is CEC
Certified following the Commercial Operation Date. During the period of time between the
Commercial Operation Date and the day that is one (l) day following the date upon which Seller
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delivers evidence to Buyer that the Facility is CEC Certified (the "Pre-Cerlifrcolion Periot'),
Buyer shall have the right to retain a portion ofany payment to be made to Seller under $9qg!91
6.1(a) and Section 6.1(c) in an amount equal to the difference between (i) the applicable Contract
Price, and (iD SP-|5 Price for the respective hours in which Facility Energy was generated.
Buyer shall release such retained amount, without interest of any kind, within thirty (30) days
following Buyer's receipt from Seller of the CEC certificate confirming that the Facility is CEC
Certified, but only to the extent that Buyer is able to apply the RECs generated by the Facility
during the Pre-Certification Period towards compliance with Buyer's obligations under RPS
Law.
(e) If the City of Los Angeles, any other member of Buyer, and/or Buyer
enters into a power purchase agreement or power purchase agreements with Seller or Afliliates
of Seller before December 31,2016, with regard to a generating lacility that shares the same
CAISO queue position as the Facility, the Contract Price under this Agreement for purchases
following the Commercial Operation Date shall be adjusted to be the amount set forth in
Apoendix A-2 for the applicable aggregate capacity (MWas) under contract with Seller and/or its
AIfiliates and the Contract Price for Test Energy and Excess Energy shall be an amount equal to
the then-current Contract Price multiplied by 600/o. By way of example, if the City of Los
Angeles enters into a power purchase agreement with an Affrliate of Seller for l50MW, the
Contract Price payable under this Agreement shall be adjusted to $52.32 and the price of Test
Energy and Excess Energy shall be adjusted to equal $31.39.
Section 6.2 Third Party Sales. Except as provided in ARTICLE IX, in no
event shall Seller have the right to procure Energy from sources other than the Facility for sale
and delivery pursuant to this Agreement. Except with the prior written consent of Buyer, Seller
shall not sell or otherwise transfer all or any part of the Products required to be delivered by
Seller under this ARTICLE Vl, ARTICLE VII, ARTICLE VIII or ARTICLE X. A violation of
this Section 6.2 shall be an immediate Default, and in addition to any other rights and remedies
available to it under Section 13.2, Seller shall pay Buyer, on the date payment would otherwise
be due to Seller, an amount for each MWh ofsuch deficiency equal to the positive difference, if
any, obtained by subtracting (A) the price per MWh that would have been payable by Buyer for
the Products not delivered from (B) the Replacement Price. Buyer shall provide Seller prompt
written notice of the Replacement Price, together with back-up documentation.
Section 6.3 Buyers' Failure. Unless excused by Force Majeure, a System
Emergency, or Seller's failure to perform, if Buyer fails to receive at the Point of Delivery all or
any part of the Facility Energy or Replacement Product required to be received by Buyer under
this ARTICLE VI, ARTICLE VIII, or ARTICLE X. Buyer shall, on the date payment would
otherwise be due to Selter, pay Seller Cover Damages; provided that Seller shall use
commercially reasonable efforts to resell any Facility Energy not able to be received by such
Bryer. "Cover Damages" means the positive difference, ifany, obtained by subtracting (A) the
amount for which Seller, acting in a commercially reasonable manner, resells any such Facility
Energy (or, absent any such sales despite using commercially reasonable efforts to procure such
sales, zero dollars ($0)) from (B) the price that would have been payable by Buyer for the Energy
not received by Buyer, plus any reasonable and documented costs incurred by Seller in
connection with the resale or attempted resale of such Facility Energy. Seller shall provide
Buyer prompt notice ofthe Cover Damages together with back-up documentation.
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Section 6.4 Nature of Remedies. The remedy set forth in Section 6.2 is in
addition to, and not in lieu of, any other right or remedy of Buyer, under this Agreement or
otherwise, for failure of Seller to sell and deliver the Products as and when required by this
Agreement. The remedy set forth in Section 6.3 is the sole and exclusive remedy of Seller for
any failure by Buyer to receive the Product as and when required by this Agreement, and all
other remedies and damages for any such failure are hereby waived by Seller.
ARTICLE VII
TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS
Section 7.1 In General.
(a) Seller shall use all reasonable efforts consistent with Prudent Utility
Practices and the other provisions of this Agreement to maximize the output of Facility Energy
from the Facility except as otherwise set forth and in accordance with this Agreement. Subject
to Buyer's role as Seller's Scheduling Coordinator for the Facility, Seller shall arrange for, and
shall bear all risks and benefits associated with, delivery ofall Facility Energy and Replacement
Product to and at the Point of Delivery, including rhe arrangement of and payment for the
interconnection of the Facility to the CAISO grid and any Transmission Services required to
deliver Test Energy, Facility Energy and Replacement Product to and at the Point of Delivery at
the CAISO grid, including interconnection costs, transmission losses to the Point of Delivery, the
transmission of Facility Energy, and transformer crossover fees associated with the transmission
of Energy from the on-site substation to the Point of Delivery; provided that Replacement
Product may be delivered at alternative locations as may be mutually agreed by the Parties.
(b) Buyer shall arrange for, and shall bear all risks associated with, acceptance
and transmission of Facility Energy and Replacement Product from the Point of Delivery,
including the arrangement ofand payment for Transmission Services from the Point of Delivery
at the CAISO grid, and shall Schedule or arrange for Scheduling and Transmission Services to
deliver Facility Energy and Replacement Product to Buyer, including charges related to control
area services, inadvertent energy flows, transmission losses, the transmission of Facility Energy
and Replacement Product, and otherwise associated with the management ofBuyer's loads.
Section 7.2 Scheduling Coordinator; CAISO Cost Allocation. Buyer or
Buyer's designee shall act as Scheduling Coordinator for the Facility and shall have the full right
and obligation to Schedule all Energy fiom the Facility (including but not limited to any Energy
Seller needs to sell in mitigation of damages as required hereunder) in accordance with all
CAISO and other applicable requirements. The Facility shall have a separate resource ID with
CAISO for scheduling purposes. Seller shall pay Buyer Ninety One Thousand Dollars ($91 ,000)
each Contract Year for the Scheduling Coordinator services provided by Buyer to Seller. Buyer
shall be financially responsible for and shall pay for all CAISO Costs; orovided however, that
notwithstanding the foregoing, Seller shall assume all liability and reimburse Buyer for any and
all costs or charges under a Seftlement Statement (i) incurred by Buyer because ofl Seller's
failure to perform any covenant or obligation set forth in this Agreement, (ii) incurred by Buyer
because ofany outages, including Scheduled Outages and Forced Outages, for which notice has
not been provided as required under this Agreement, or (iii) to the extent arising as a result of
Seller's failure to comply with a Curtailment Order under Section 7.4 if such failure results in
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incremental costs to Buyer.
Section 7.3 Forecasting and Scheduling of Enerry.
(a) Except upon the occurrence ofa curtailment under Section 7.4, Buyer, as
Seller's Scheduling Coordinator, shall Schedule all Facility Energy and Replacement Energy
(including all Energy sold by Seller in mitigation ofdamages hereunder) in accordance with the
CAISO Tariff, NERC and WECC operating policies and criteria, and any other applicable
guidelines, and the Scheduling and forecasting procedures provided in or developed under this
Section 7.3, based on the then-most-current forecast ofenergy provided under the EIRP Forecast.
Seller, at its own cost, shall install metering, telemetry and control equipment so as to be able to
provide Facility Energy to the Point of Delivery and respond to CAISO, Transmission Provider,
or reliability coordinator's dispatch orders.
(b) Seller will take all actions, at its sole cost and expense, required to cause
the Facility to be a certified Participating Intermittent Resource and to cause the Facility to
become and remain a participant in PIRP, concurrently with the Commercial Operation Date.
Seller shall provide Buyer with a copy of the notice from the CAISO certilling the Facility as a
Participating Intermittent Resource as soon as practicable after Seller's receipt of such notice of
certification. Following certification and whenever applicable, Seller and Buyer shall comply
with PIRP, and all additional protocols issued by the CAISO relating to Participating Intermittent
Resources during the Delivery Term. All the provisions relating to Scheduling of the Facility
and other matters covered by PIRP shall be interpreted and applied as may be reasonably
necessary to comply with PIRP.
(c) Seller shall provide, or shall cause its designee to provide, the following
non-binding forecasts, and any updates to such forecasts, to the Scheduling Coordinator based on
the most current forecast of Facility Energy and Replacement Product:
(i) At least one-hundred twenty (120) days before (a) the scheduled
Commercial Operation Date and (b) the beginning of each Contract Year, a non-binding
forecast of each Month's average-day deliveries of Facility Energy and Replacement
Product from the Facility, for the following eighteen (18) Months.
(iD No later than sixty (60) days before the beginning of each Month
during the Delivery Term, a non-binding forecast of each day's average hourly deliveries
of Facility Energy and Replacement Product, for such Month.
(iiD No later than ten (10) Business Days before the beginning ofeach
Month during the Delivery Term, a non-binding forecast of each day's average hourly
deliveries ofFacility Energy and Replacement Product for the following Month.
(iv) On the first Business Day of each calendar week during the
Delivery Term, a non-binding forecast of each day's average deliveries of Facility
Energy and Replacement Product, by hour, for the following fourteen (14) days.
(v) By 5:30 a.m. Pacific Prevailing Time on the Business Day
immediately preceding each day ofdelivery of Facitity Energy and Replacement product
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during the Delivery Term, a copy of a non-binding hourly forecast of deliveries of
Facility Energy and Replacement Product for each hour of the immediately succeeding
day. Any forecast provided on a day prior to any non-Business Day shall include
forecasts for the immediate day, each succeeding non-Business Day and the next
Business Day. Seller shall, by l0:00 a.m. Pacific Prevailing Time, provide a copy ofany
updates to such forecast indicating a change in forecasted Facility Energy from the then-
current forecast.
(vi) Prior to 12:00 p.m. Pacific Prevailing Time of the Business Day
immediately preceding each WECC Prescheduling Day (as defined by WECC) for each
hour of the Delivery Day (as defined by WECC) in MW or MWh units (as applicable), in
the format reasonably designated by the Scheduling Coordinator, a non-binding
preschedule forecast of Facility Energy and Replacement Product via email. The pre-
scheduled amounts of Facility Energy and Replacement Product shall be the good faith
estimate of Seller or Seller's designee of the anticipated delivery of Facility Energy and
Replacement Product at the time. A forecast provided a day prior to any non-Business
Day shall include forecasts for the next day, each succeeding non-Business Day and the
next Business Day. Seller or Seller's designee shall provide a copy of any and all
updates to the forecast of the Facility's availability from the then-current forecast.
Except for Forced Outages, Seller shall operate the Facility with the objective that, for
each hour scheduled, the actual Facility availability shall be maintained in accordance
with the preschedule plan submitted to the Scheduling Coordinator.
(d) Seller shall notify the Scheduling Coordinator via email, telephone, or
other mutually acceptable method, ofany hourly changes due to a change in Facility availability
or an outage no later than one-hundred five (105) minutes prior to the start of such Scheduling
hour, or such other limit as specified in the CAISO Tariff. Seller shall notifu the Scheduling
Coordinator of other unanticipated changes in availability by email or telephone as promptly as
reasonably possible. Any notice delivered under this Section 7.3(d) shall include the reason for
the outage and an estimated duration of the outage. Once the outage has ended, Seller shall
notifo Buyer that the outage has ended, the cause of the outage, and the actions taken to resolve
the outage in order for the CAISO outage report to be updated accordingly.
(e) Throughout the Delivery Term, Seller shall provide to Buyer the following
data on a real-time basis, and in a format that reasonably allows Buyer to copy, paste or
otherwise use such data:
(i) Read-only access to meteorological and related solar
measurements, megawatt capacity and any other Facility availability information required
in accordance with EIRP requirements;
(ii) Read-only access via secure login credentials to Energy output
information collected by the SCADA system for the Facility; provideel that if Buyer is
unable to access the Facility's SCADA system, then upon written request from Buyer,
Seller shall provide Energy output information and meteorological measurements through
such other format as may be mutually acceptable to Seller and Buyer, all as may be
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updated from time to time based on advancements in technology in accordance with
Prudent Utility Practices; and
(iii) Read-only access to all Electric Metering Devices.
(0 Seller will provide the Scheduling Coordinator and Buyer,s real time
operators with continuously updated non-binding hourly forecasts of deliveries of Facility
Energy and Replacement Product for each hour of the succeeding twenty four (24)-hour period,
in either electronic format, via an internet website accessible via secure login credentials, or via
email in the form ofan excel spreadsheet (or any combination thereof, so long as the Scheduling
Coordinator or real time operator is able to readily access and utilize such forecasts), transmitted
on an hourly basis. Seller shall reasonably cooperate with the Scheduling Coordinator to attempt
to optimize the estimates for such time period two (2) hours prior to such forecasts. Seller shall
reasonably cooperate with the Scheduling Coordinator to enable such forecasts to be prepared in
accordance with mutually agreed upon communications protocols as they are implemented or
upgraded from time to time in accordance with Prudent Utility Practices.
G) Seller and the Scheduling Coordinator shall mutually develop forecasting
and Scheduling procedures in addition to those set forth in this Section 7.3, in order to administer
the provisions of this Agreement in compliance with all applicable Requirements and
requirements of the Transmission Provider, CAISO, NERC, WECC, and any balancing authority
involved in the Scheduling of Energy under this Agreement. Seller and the Scheduling
Coordinator shall promptly cooperate to make any reasonably necessary and appropriate
modifications to such forecasting or Scheduling procedures as may be required from time to
time.
SectionT.4 Curtailment.
(a) Seller shall reduce deliveries of Facility Energy to the Point of Delivery
immediately upon notice from Buyer, the CAISO, a Transmission Provider, or any balancing
authority or reliability entity during Curtailment Periods affecting Buyer. Buyer shall be excused
from receiving any Facility Energy from Seller and shall not be obligated to pay seller for rhe
amount of reduced Facility Energy arising during a curtailment under this Section 7.4(a);
provided that the Parties shall calculate the amount of Deemed Generated Energy for reductions
of deliveries of Facility Energy arising under this Section 7.4(a), for purposes of determining
Seller's compliance towards its Cuaranteed Generation. If required by Buyer, the CAISO, a
Transmission Provider, or any balancing authority or reliability entity, Seller shall provide the
capability to implement curtailments and adjust ramp rates, megawatt output, and (if applicable)
megavar output in real{ime by means ofsetpoints received from the SCADA system ofseller.
(b) In addition to the curtailments described in Section 7.4(a). Buyer may
curtail deliveries of Facility Energy, at any time and for the duration specified by Buyer. Buyer
shall provide a minimum of ten (10) minutes' notice to Seller of a request for curtailment under
this Section 7.4(b), and Seller shall comply with such request in accordance with Prudent Utility
Practices. In its curtailment notice to Seller, Buyer shall indicate the duration ofthe curtailment
period, which shall be for a minimum of thirty (30) minutes, and the time at which Buyer
requests Seller to resume delivery of the Facility Energy to Buyer. To the extent Buyer requests
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any change in the duration of the requested curtailment period, Seller shall effectuate any such
chung" nJ later than ten (10) minutes following notice from Buyer's notification to Seller of the
propJsed change to curtailment. Seller shall respond to Buyer curtailment notices (including the
eni of such c-unailment periods) in accordance with Prudent Utility Practices. Except for
curtaitments by Buyer undir Section 7.4(a) for a System Emergency, Buyer shall pay Seller for
any Deemed Generated Energy during any curtailment under this Section 7.4(b) in an amount
equal to the contract Pice; provided, however, Seller, with Buyer acting as Scheduling
Coordinator, shall use commeicially reasonable efforts to sell Facility Energy (but not the
Environmental Attributes or capacity Rights associated therewith) equaling the amount of
Deemed Generated Energy to third parties at a positive price to the extent permitted under the
CAISO Tariff. To the extent any Facility Energy is sold to a third party under this Section
7.4(b), the obligation to pay the amounts set forth for a curtailment by Buyer under this SecJion
7j(b) shall be ieduced accordingly by an amount equal to the net proceeds Seller receives from
.r"h rul"s of Facility Energy (after subtracting any Scheduling fees, wheeling charges, and other
associated costs, fees, and reasonable expenses incurred in connection with such sales). All
Environmental Attributes and Capacity Rights associated with such Facility Energy sold to third
parties shall be delivered at no additional cost to Buyer.
(c) '-Deemed Generaled Energ," means the amount of Energy, expressed in
MWh, that the Facility would have produced and delivered to the Point of Delivery, but for a
curtailment event arising under this Section 7.4, which amount shall be equal to (i) the amount of
MWh provided for in the EIRP Forecast applicable to the curtailment event, regardless of
whethei Seller is participating in the EIRP during the curtailment event, less (ii) the amount of
Facility Energy delivered to the Point of Delivery during the curtailment event, ifany, or, ifthere
is no EIRP Forecast available, (A) an amount of MWh calculated based on an equation that
incorporates relevant Facility availability, weather and other pertinent data for the period of time
during the curtailment event in order to approximate the amount of Facility Energy that would
have been delivered, less (B) the amount of Facility Energy delivered to the Point of Delivery
during the curtailment event, if any provided that, if the applicable difference calculated
pursuant to either of the formulas provided above is negative, the Deemed Generated Energy
ihall b" rero (0). The equation in (A) and (B) shall be subject to review and approval by Buyer.
Section 7,5 No Payment. Buyer shall not be obligated to pay Seller for any
Facility Energy that is not or cannot be delivered to the Point of Delivery for any reason
(including Force Majeure), except as otherwise stated in Section 7.4.
Section 7.6 Title; Risk of Loss. As between the Parties, Seller shall be
deemed to be in exclusive control (and responsible for any damages or injury caused thereby) of
all Energy prior to the Point of Delivery, and Buyer shall be deemed to be in exclusive control
(and responsibte for any damages or injury caused thereby), of the Energy at and from the Point
of Delivery. Seller warrants that it wilt deliver all Energy, Replacement Product, capacity
Rights, and all of the associated Environmental Attributes to Buyer free and clear of all Liens
creited by any Person other than Buyer. Title to and risk of loss as to all Energy and all ofthe
associated Products shall pass from Seller to Buyer at the Point of Delivery; provided that title to
and risk of loss as to any Replacement Energy specified by Buyer to be delivered to a point or
points of interconnection othir than the Point of Delivery pursuant to Section 9.2 and all ofthe
issociated Environmental Attributes shall pass from Seller to Buyer upon delivery of such
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Replacement Energy to such point or points.
Section 7.7 RPS and EPS Compliance.
(a) Seller warrants and guarantees that from the time it receives notice from
the CEC that the Facility is CEC Certified, and at all times thereafter until the expiration or
earlier termination of the Agreement, the Facility (including the Facility Energy and the
associated Environmental Attributes) shall be both RPS Compliant and EpS comptiant (if EpS
Law is applicable to the Facility), except if the Facility lails to be RpS Compliant or EpS
compliant (if EPS Law is applicable to the Facility) as a result of (i) a change in Law making it
impossible, after the use of commercially reasonable efforts as required under Section 7.7(b), for
the Facility to be RPS Compliant or EPS Complaint, or (ii) any repeal of the RpS law or EpS
Law.
(b) If a Change in Law occurs after the Commercial Operation Date that (x)
does not repeal the RPS Law or the EPS Law, (y) causes the Facitity to cease to be RpS
Compliant and/or EPS Compliant and (z) reduces the value ro Buyer of the Environmental
Attributes, then Seller shall use commercially reasonable efforts to comply with such Change in
Law and cause the Facility to be RPS Compliant and EPS Compliant. If, notwithstanding such
commercially reasonable efforts, the Facility is still not RPS Compliant and EpS Compliant due
to the occurrence ofa Change in Law, then Buyer shall have the option to change the Contract
Price to the Pnode Price (the "Pnode Price Option") or such other index price as mutually agreed
to by the Parties in writing; provided such Pnode Price Option must be exercised in writing no
later than two (2) years following an applicable Change in Law. If Buyer exercises the pnode
Price Option, ths Contract Price shall be the Pnode Price for the respective hours in which
Facility Energy was generated despite the failure of the Facility to be RpS Compliant and EpS
Compliant, unless Seller delivers Replacement Product that is RPS Compliant and EpS
Compliant from a RPS Compliant and EPS Compliant source. If Buyer exercises the pnode
Price Option: (i) the Pnode Price shall be subject to the limitation that the average price for
Facility Energy paid by Buyer in any Month shall not exceed the Contract Price nor be less than
eighty-five percent (85%) of the Contract Price; (ii) Seller shall retain the Environmental
Attributes; and (iii) Buyer shall be entitled to the Capacity Rights generated.
(c) From time to time and at any time requested by Buyer or Buyer,s
Authorized Representative, Seller will furnish to Buyer, Buyer's Authorized Representative,
Govemmental Authorities, or other Persons designated by any Buyer, all certificates and other
documentation reasonably requested by Buyer or Buyer's Authorized Representative in order to
demonstrate that the Facility, the Facility Energy, and the associated Environmental Attributes
were or are RPS Compliant and EPS Compliant.
ARTICLE VIII
EIYVIRONMENTAL ATTRIBUTES
Section E.l Transfer of Environmental Attributes. For and in consideration
of Buyer entering into this Agreement, and in addition to the agreement by and benveen Buyer
and Seller to purchase and sell Facility Energy on the terms and conditions set forth herein,
seller shall transfer to Buyer, and Buyer shall receive from Setler, all right, title, and interest in
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and to all Environmental Attributes, whether now existing or acquired by Seller or that hereafter
come into existence or are acquired by Seller during the Agreement Term associated with the
Facility Energy and any Replacement Energy. Seller agrees to transfer and make such
Environmentai Attributes available to Buyer immediately to the fullest extent allowed by
appticable law upon Seller's production or acquisition of the Environmental Attributes. Seller
reiresents and covenants that it has not assigned, transferred, conveyed, encumbered, sold or
otirerwise disposed ofand shall not assign, transfeq convey, encumber, sell or otherwise dispose
of all or any portion ofsuch Environmental Attributes to any Person other than Buyer or attempt
to do any ofihe foregoing with respect to any ofthe Environmental Attributes. Buyer and Seller
acknowledge and agree that the consideration for the transfer of Environmental Attributes is
contained within the Contract Price.
Section 8.2 Reporting of Ownership of Environmental Attributes. During
the Agreement Term, Seller shall not report to any Person that the Environmental Attributes
granted hereunder to Buyer belong to any Person other than Buyer, and Buyer may report under
any program that such Environmental Attributes purchased hereunder belong to it'
Section E.3 Environmental Attributes. Upon the request ofBuyer or Buyer's
Authorized Representative, Seller shall take all actions and execute all documents or instruments
necessary under applicable law regulations, guidebooks promulgated by the CEC or PUC,
bilateral arrangements or other voluntary Environmental Attribute programs of any kind, as
applicable, to maximize the attribution, accrual, realization, generation, production, recognition
and validation of Environmental Attributes throughout the Agreement Term and Seller shall file
with the cEC and any other applicable Persons all materials and documents required to
demonstrate that the Facility is entitled to be CEC Certified.
Section 8.4 WREGIS. In furtherance and not in limitation of Section 8.3.
prior to Seller's first delivery of Facility Energy hereunder, Seller shall register with WREGIS to
evidence the transfer of any Environmental Attributes under applicable law or any voluntary
program ("VREGIS CertiJicales") associated with Facility Energy or Replacement Product in
accordance with WREGIS reporting protocols and WREGIS Operating Rules and shall register
the Facility with WREGIS. After the Facility is registered with WREGIS, at the option of
Buyer's Authorized Representative, Seller shall transfer WREGIS Certificates using the Forward
certificate Transfer method as described in wREGIS operating Rules from Selter's wREGIS
account to Buyer's WREGIS accounts, as designated by Buyer's Authorized Representative.
Seller shall be responsible for WREGIS Certificate issuance fees and WREGIS expenses
associated with registering the Facility, maintaining its account, acquiring and arranging for a
Qualified Reporting Entity ("QRE') and any applicable QRE agreements, and transfening
WREGIS Certificates to Buyer, Buyer's Authorized Representative, or any other designees.
Buyer shall be responsible for its wREclS expenses associated with maintaining its own
account, or the accounts of its designees, if any, and subsequent transferring or retiring by it of
WREGIS Cenificates. or Seller's fees for the retirement of WREGIS Cenificates on behalf of
Buyer. Forward Certificate Transfers shall occur monthly based on the certificate creation
timeline established by the wREGls operating Rules. Seller shall be responsible for, at its
expense, validating and disputing data with WRECIS prior to WREGIS Certificate creation each
Month. ln addition to the foregoing, Seller shall document the production and transfer of
Environmental Attributes under this Agreement to Buyer by delivering to Buyer an attestation in
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substantially the form attached as Apoendix D for the Environmental Attributes associated with
Facility Energy or Replacement Product, if any, measured in whole MWh, or by such other
method as Buyer shall designate.
Section 8.5 Further Assurances, In addition to and not in rimitation of
Section 8.4, Seller shall document the production of Environmental Attributes by delivering with
each invoice to Buyer an attestation for the Environmental Attributes associaied with Ficility
Energy or included with Replacement Product, ifany, for the preceding Month in the form of the
attestation set forth as Appendix D. At Buyer's Authorized Representitive,s request, the parties
shall execute all such documents and instruments and take such other action in oider to effect the
transfer of the Environmental Attributes specified in this Agreement to Buyer and to marimize
the attribution, accrual, realization, generation, production, recognition and validation of
Environmental Attributes throughout the Agreement Term. In the event ofthe promulgation ofa
scheme involving Environmental Attributes administered by GAMD, upon notifltation by
CAMD that any transfers contemplated by this Agreement shall not be recorded, each party shall
promptly cooperate in taking all reasonable actions necessary so that such transfer ian be
recorded. Each Party shall promptly give the other party copies of all documents it submits to
CAMD to effectuate any transfers.
ARTICLE IX
MAKEUP OF SHORTFALL ENERGY
Section 9.1 Makeup of Shortfa . Within thirry (30) days after (i) the end of
the first full Contract Year and (ii) the end ofeach succeeding Contract Year, Seller shall provide
Buyer with a calculation of Facility Energy for such contract year. If Seller fails during any
Contract Year to deliver Facility Energy in an amount equal to the Guaranteed Generation for the
Facility, then Seller shall make up the shortfall of Facility Energy ("shortfa Energt") in
accordance with this ARTICLE IX.
Section 9.2 Replacement Product. During the Shortfall Makeup period, the
amount of Shortfall Energy shall first be reduced by the amount of any (a) Facility Energy or
Deemed Generated Energy delivered or deemed to be delivered above the Guaranteed
Generation, including Excess Energy, during the applicable Shortfall Makeup period, and
(b) Replacement Product delivered by Seller during the Shortfall Makeup period. Such
Replacement Product shall be delivered to the Point of Delivery or such other point of delivery
as is mutually agreed upon by the Parties (which point ofdelivery shall be deemed the.,point of
Delivery" for such Replacement Product for purposes of ARTICLE vll and the other Scheduling
and delivery provisions hereof) and on a delivery schedule mutually agreed to by Seller and
Buyer. Any additional costs or expenses associated with delivery of Replacement product to a
Point of Delivery designated under this Section 9.2 shall be bome by Seller. To the extent Selleris unable to deliver or provide suflicient Facitity Energy, Deemed Generated Energy, or
Replacement Product to make up the remaining Shortfall Energy, then Seller shall, at the;;d ofthe shortfall Makeup Period, pay Buyer damages in accordance with Section 9.3.
Notwithstanding the foregoing, at the end of each RPS Compliance period during the Delivery
Term, ifthere is any Shortfall Energy at such time, Seller shall pay Buyer damages in accordance
with Section 9.3 for the amount of Shortfall Energy in the last cilendar year of such RpS
Compliance Period.
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section 9.3 Shortfall Damages. If Seller fails to make up the full amount of
any Shortfall Energy by the end of the shortfall Makeup Period, Seller shall within sixty (60)
days after the end of the applicable Shortfall Makeup Period, pay Buyer damages, which
damages shall be an amount, for each MWh of remaining Shortfall Energy, equal to the positive
differince, ifany, obtained by subtracting (a) the contract Price from (b) the Replacement Price,
and adding, in the case of the positive difference, the amount of all documented and reasonable
out-of-po&et costs and expenses incuned by such Buyer to purchase such Replacement Product
(,,shortfall Damages,,). lf Seller fails to pay Buyer the Shortfall Damages within sixty (60) days
after thi end of the Shortfall Makeup Period, Buyer shall have the right to immediately draw the
applicable amount ofShortfall Damages owed to Buyer from the Delivery Term Security'
Section 9.4 Availability Requirement. Seller shall be responsible for all
costs, charges, expenses, penalties, and obligations resulting from Availability Standards, if
applicable, and Seller shall be entitled to retain atl credits, payments, and revenues, if any,
resulting from Seller achieving or exceeding Availability Standards, ifapplicable, other than the
Capacity Rights.
Section 9.5 Shortfall Energy Termination. lf Seller fails during any two
consecutive Contract Years to deliver at least Sixty Two and One Half percent (62.50/o) of the
Guaranteed Generation for such Contract Years then Buyer, in its sole discretion, may within
thirty (30) days after the end ofsuch Contract Year, elect to either (a) collect Shortfall Damages
for the Shonfall Energy pursuant to Section 9.3 and terminate this Agreement; or (b) allow Seller
to cure such failure by providing Buyer with Replacement Product or Shortfall Damages as
described in Section 9.2 and Section 9.3.
ARTICLE X
CAPACITY RIGHTS
Section 10.1 Capacity Rights. For and in consideration of Buyer entering into
this Agreement, and in addition to the agreement by Buyer and Seller to purchase and sell
Facility Energy and Environmental Attributes on the terms and conditions set forth herein, Seller
hereby transfers to Buyer, and Buyer hereby accepts from Seller, all of Seller's rights, title and
interest in and to the Capacity Rights. The consideration for the transfer of Capacity Rights, if
any, is contained within the Contract Price. In no event shall Buyer have any obligation or
liabitity whatsoever for any debt pertaining to the Facility by virtue ofBuyer's ownership ofthe
Capacity Rights or otherwise.
Section 10.2 Covenant Regarding Capacity Rights. Seller represents and
covenants that it has not assigned, transferred, conveyed, encumbered, sold or otherwise
disposed of and shall not in the future assign, transfer, convey, encumber, sell or otherwise
dispose ofany ofrhe Capacity Rights to any Person other than Buyer or attempt to do any ofthe
forigoing with respect to any of the Capacity Rights. During the Agreement Term, Seller shall
not report to any Person that any of the Capacity Rights belong to any Person other than Buyer.
Buyeimay, its own risk and expense, report to any Person that the Capacity Rights belongs to it.
Section 10.3 Further Assurances. Seller shall execute and deliver such
documents and instruments and take such other action as required by the CAISo and as Buyer's
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Authorized Representative may reasonably request to effect recognition and transfer of the
Capacity Rights to Buyer. Seller shall bear the costs associated therewith.
ARTICLE XI
BILLING; PAYMENT; AUDITS; METERING; ATTESTATIONS; PoLICIES
section 11.1 Billing and payment. Bilring and payment for alr products shall
be as set forth in this ARTICLE XI.
Section ll.2 Calculation ofEnerry Delivered; Invoices and payment.
(a) Not later than the renth (l0th) day of each Month, commencing wirh the
next Month following the Month in which Facility Energy is first delivered by Seller and
received by Buyer under this Agreement, Seller shalI deliver to Buyer a proper invoice showing
the amount due for the preceding Month from Buyer to Seller for raiitity energy, capacity
Rights and Environmental Attributes. Seller shall calculate the amount of Ficility Energy from
meter readings at the Electric Metering Devices maintained pursuant to Section 1t.6. adjusting
for any applicable station load, transformation losses and transmission losses to the p;int of
Delivery in accordance with a methodology agreed to by Buyer. Each invoice shall show thetitle of the Agreement and, if applicable, the Agreement number, the name, address and
identifuing information of Seller and the identification of material, equipment or services
covered by the invoices, and shall be sent to the address set forth in Aopendix J or such other
address as Buyer may provide to Seller. Seller shall separately provide in such invoice (i)
Seller's computation ofany allocation for Replacement Product delivered by Selter and taken by
Buyer under this Agreement during the preceding Month, any Deemed Generated Energy
calculated during the preceding Month (inctuding any supporting documentation associated
therewith) and (ii) any other amounts due to seller, including amounts due under Section 6.3.
Any electronic information delivered by Seller under this ARTICLE XI shall be in a format such
as Microsoft Excel (or its equivalent) that allows Buyer to cut, paste or otherwise readily use and
work with such information or documentation or as otherwise mutually agreed by the pirties.
(b) Concurrently with the delivery of each Monthly invoice, Seller shall
deliver attestations of all Environmental Aftribute transfers (including those transferred with
WREGIS) substantially in the form set forth in Appendix D.
(c) Subject to Section ll.2(d) and Section 11.3, not later than the thirtieth
(30th) day after receipt by Buyer of Seller's Monthly invoice (or the next succeeding Business
D-ay, if the thirtieth (30th) day is not a Business Day), Buyer shall pay to Seller, by wire transfer
of immediately available flrnds to an account specified by Seller or by any other mians agreed to
by the Parties from time to time, the amount set forth as due in such Monihly invoice.
(d) Norwithstanding Section I 1.2(c), if Buyer believes that it has insufficient
information to veriry the amount of Deemed Generated Energy calculated by Seller in the
invoice, or if Buyer requires additional time to verifr such informition, Buyer sha notiry seller
thereof within thirty (30) days after receipt ofan invoice from Seller, and timely pay the imounts
set fortr in such Monthly invoice not related to Deemed Generated Energy. wittrin ttrirty 1:o;days after receipt by Buyer of additional information regarding such Deemed Generated dnergy
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calculation, or on the date mutually agreed to by the Parties, Buyer shall pay to Seller the amount
specified in the invoice or notiry Seller of any discrepancies with respect to its calculation of the
deemed Generated Energy, in which event such invoice shall be subject to the provisions of
Section I 1.3.
(e) Seller shall, in subsequent invoices, adjust previously invoiced amounts to
reflect (i) adjustments pursuant to Section t1.3. or (ii) adjustments, reconciliations or final
settlements with WREGIS occurring after the date of the initial invoice, or any other adjustments
agreed to by the Parties (which shall be without interest of any kind), provided that Buyer shall
nit be required to make invoice payments if the invoice is received more than one (l) year after
the billing period.
(0 Except with respect to disputed invoices where the dispute is first raised
within six months after the applicable Monthly billing period, Buyer shall not be required to
make invoice payments if the invoice is received more than six (6) Months after the applicable
Monthly billing period.
Section 11.3 Disputed Invoices. Ifany portion ofany invoice is in dispute, the
undisputed amount shall be paid when due. The Party disputing a payment shall promptly notify
the other Party of the basis for the dispute, setting forth the details of such dispute in reasonable
specificity. Disputes shall be discussed directly by the Parties' Authorized Representatives, who
shall use reasonable efforts to amicably and promptly resolve such Disputes, and any failure to
agree shall be subject to resolution in accordance with Section 14.3. Upon resolution of any
Dispute, if all or part of the disputed amount is later determined to have been due, then the Party
owing such payment or refund shall pay within ten (10) days after receipt of notice of such
determination the amount determined to be due plus interest thereon at the Interest Rate from the
due date until the date of payment. For purposes ofthis Section I 1.3 ,"Interest Rale" shall mean
the lesser of (i) two percent (2o/o) above the per annum Prime Rate reported daily in The wall
Steet Journol,or (ii) the maximum rate permitted by applicable Requirements of Law.
Section 11.4 Right of Setoff. In addition to any right now or hereafter granted
under applicable law and not by way of limitation of any such rights, each Party shall have the
right at any time or from time to time without notice to other Party or to any other Person, any
such notice being hereby expressly waived, to set off against any amount due a Party from the
other Party under this Agreement or otherwise any amount due such Party from the other Party
under this Agreement or otherwise, including any amounts due because of breach of this
Agreement or any other obligation.
Section ll.5 Records and Audits. Selter shall maintain, and the Authorized
Auditors shall have access to, all records and data pertaining to the performance and
management of this Agreement (including compliance with the Requirements) and related
Subcontracts, and as necessary to properly reflect all costs claimed to have been incurred
hereunder and thereunder, inctuding (a) in their original form, all (i) documents provided to
Seller in the ordinary course of business for the Facility, (ii) documents for billing, costs'
metering, and Environmental Attributes, (iii) books, records, documents, reports, deliverables,
employee time sheets, accounting procedures and practices, and (iv) records of financial
transaitions, and (b) other evidence, regardless of form (for example, machine readable media
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such as disk or tape, etc.) or type (for example, databases, applications software, database
management software, or utilities). If Seller is required to submit cost or pricing data in
connection with this Agreement, Seller shall maintain all records and documents n"..r.ury to
permit adequate evaluation of the cost or pricing data submitted. along with the computations
and projections used. In the event of a Dispute, records that relate to the Agreement, Dispute,
litigation or costs, or items to which an audit exception has been taken, shall be maintained.
Buyer and the Authorized Auditors may discuss such records with seller's officers and
independent public accountants (and by this provision Seller authorizes said accountants to
discuss such billings and costs), all at such times and as often as may be reasonably requested.All such records shall be retained, and shall be subject to examination and audit-by the
Authorized Auditors, for a period of not less than four (4) years following final payment made
by Buyer hereunder, the expiration or termination date of this Agreement, or finai settlement of
all disputes, claims, or litigation, whichever is later. Seller shall make said records or, to the
extent accepted by the Authorized Auditors, photographs, micro-photographs, or other authentic
reproductions thereof,, available to the Authorized Auditors at Seller's principal business office
or any other of Seller's oIfices as mutually agreed upon by Buyer and Seller, at all reasonable
times and without charge. The Authorized Auditors may reproduce, photocopy, download,
transcribe, and the like any such records. Any information provided by Seller on machine-
readable media shall be provided in a format accessible and readable by the Authorized Auditors.
Seller shall not, however, be required to fumish the Authorized Auditors with commonly
available software. Seller shall be subject at any time with fourteen (14) days prior written
notice to audits or examinations by Authorized Auditors, relating to all billings and required to
verify compliance with all Agreement requirements relative to practices, methods, procedures,
performance, compensation, and documentation. Examinations and audits shall be performed
using generally accepted auditing practices and principles and applicable govemmental audit
standards. If Seller utilizes or is subject to Federal Acquisition Regulation, pan 30 and 3 l, et
seq. accounting procedures, or a portion thereof, examinations and audits shall utilize such
information. To the extent that an Authorized Auditor's examination or audit reveals inaccurate,
incomplete or non-current records, or records are unavailable, the records shall be considered
defective. consistent with standard auditing procedures, Seller shall be provided fifteen (15)
days to review an Authorized Auditor's examination results or audit and respond to Buyer prior
to the examination's or audit's finalization and public release. If an Authorized Auditor's
examination or audit indicates Seller has been overpaid under a previous payment application,
the identified overpayment amount shall be paid by Seller to Buyer within fifteen (15) days after
notice to Seller of the identified overpayment. If an Authorized Auditor's examination or audit
reveals that Buyer's overpayment to Seller is more than five percent (5.0%) of the bi ings
reviewed, Seller shall pay all expenses and costs incurred by the Authorized Auditors arising out
ofor related to the examination or audit, which examination or audit expenses and costs shall be
paid by Seller to Buyers within fifteen (15) days after notice to Seller. Seller shall contractually
require all subcontractors performing services under this Agreement to comply with the
provisions of this Section I I .5 by inserting this Section I I .5 into each Subcontract.
Section ll.6 Electric Metering Devices.
(a) Facility Energy shall be measured using a CAlSO-approved revenue_
quality Electric Metering Device that complies with the CAISO Tariffand relevant protocols and
is dedicated exclusively to the Facility. Seller shall also install an Electric Metering Device at
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the Facility at a location agreed to by Buyer. Seller shall arrange and bear all costs associated
with the instatlation of the Electric Metering Devices needed for the registration, recording and
transmission of information regarding the Facility Energy. Seller hereby agrees to provide a
mutually agreed set of meter data to Buyer, which data shall be accessible to, and usable by,
Buyer. Iri addition to providing Buyer with its meter data, Seller shall use commercially
reaionabte efforts to support any efforts by Buyer to obrain CAISO meter data applicable to the
Facility and all inspeciion, resting and calibration data and reports from the cAISo. lf the
CAIS(, makes any idjustment to any CAISO meter data for a given time period, Seller agrees
that it shall submit revised Monthly invoices, pursuant to this ARTICLE Xl covering the entire
applicable time period in order to fully conform such adjustments to the meter data. Seller shall
rrL.it ury reviied invoices no later than thirty (30) days after the date on which the CAISO
provides Seller with binding adjustments to the meter data.
(b) Seller or its Authorized Representative, at no expense to Buyer, shall
inspect and test all Electric Metering Devices upon installation and at least annually thereafter.
Seier shall provide Buyer with reasonable advance notice of, and permit representatives of
Buyer to witness and verifo, such inspections and tests. Upon request by Buyer, Seller or its
Authorized Representative shall perform additional inspections or tests ofany Electric Metering
Device and shitl permit a qualified representative of Buyer to inspect or witness the testing of
any Electric Metering Device. The actual expense ofany such requested additional inspection or
testing shall be borne by Seller. Seller shall provide copies ofany inspection or testing reports to
Buyer.
(c) If an Electric Metering Device fails to register, or if the measurement
made by an Electric Metering Device is found upon testing to be inaccurate by more than plus or
minus one percent (+/- 1.o,t/o), an adjustment shall be made to correct all measurements made by
the inaccurate or defective Electric Metering Device for both the amount of the inaccuracy and
the period ofthe inaccuracy, such adjustment to be made by the Scheduling Coordinator. To the
extent that the adjustment period covers a period of deliveries for which payment has already
been made by Buyer, Buyer shall use the corrected measurements as determined in accordance
with this Section I 1.6 to recompute the amount due for the period of the inaccuracy and shall
subtract the previous paymenrs by Buyer for this period from such recomputed amount. lf the
difference is a positive number, the difference shall be paid by Buyer to Seller; ifthe difference
is a negative number, that difference shall be paid by Selter to Buyer, or at the direction of
Buyer, may take the form of an offset to payments due to seller from Buyer. Payment of such
difference by the owing Party shall be made not later than thirty (30) days after the owing Party
receives notice ofthe amount due, unless Buyer elects payment via an offset.
Section 11.7 Taxes. Seller shall be responsible for and shall pay, before the due
dates therefor, any and all federal, state, and local Taxes incurred by it as a result of entering into
this Agreement and all Taxes imposed or assessed with respect to the Facility, the Site or any
other assets of Seller, the Products or the transaction arising before or at the Point of Delivery.
Buyer shall pay or cause to be paid all Taxes on or with respect to the Products or the transaction
from (but excluding) the Point of Delivery to such Buyer. Ifseller is required by a Requirement
of Law to remit or pay Taxes rhat are the responsibility of Buyer hereunder, Buyer shall
promptly reimburse Siller for such Taxes. IfBuyer is required by Requirement of Law to remit
o. puy i*"r that are Seller's responsibility hereunder, Buyer may deduct such amounts from
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payments to Seller hereunder; if Buyer elects not to deduct such amounts from Seller's
payments, Seller shall promptly reimburse Buyer for such amounts upon request. Nothing shall
obligate or cause a Party to pay or be liable to pay any Taxes for whlch it ii exempt unde-r law.A Party that is exempt at any time and for any reason from one or more Taxes shall bear the risk
that such exemption shall be lost or the benefit ofsuch execution be reduced.
ARTICLE XII
REPRESENTATIONS, WARRANTIES AIID COVENANTS
Section l2.l Representations and Warranties of Buyer, Buyer makes the
following representations and warranties to Seller as ofthe Effective Date:
(a) Buyer is a validly existing Califomia joint powers authority, and has the
legal power and authority to own its properties, to cany on its business as now bJing conducted
and to enter into this Agreement, and to carry out the transactions contemplated herrby, and to
perform and carry out all covenants and obligations on its part to be performed under and
pursuant to this Agreement.
(b) The execution, delivery and performance by Buyer of this Agreement
(i) have been duly authorized by all necessary action, and does not and wi not require any
consent or approval of such Buyer's regulatory or goveming bodies, other than that which has
been obtained; provided that further authorizations from such Buyer's regulatory or governing
bodies will be required for Buyer to exercise the project purchase option; and (ii) does not
violate any federal, state, and local law, including the califomia Govemment code and similar
laws.
(c) This Agreement constitutes the legal, valid and binding obligation of
Buyer enforceable in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
Section 12.2 Representations and lYarranties of Seller. Seller makes the
following representations and warranties to Buyer as of the Effective Date and continuing
throughout the Agreement Term:
(a) Seller is a limited liability company duly organized, validly existing and in
good standing under the laws of its respective state of incorporation or organization and is
qualified to do business in the state of california, and has the legal power and authority to own
or lease its properties, to carry on its business as now being conducted and (in the case of Seller)
to enter into this Agreement and each Ancillary Document to which it is a party, and to carry out
the transactions contemplated hereby and thereby and to perform and carry out all covenants and
obligations on its part to be performed under and pursuant to this Agreement and any Ancillary
Documents to which it is a party.
(b) Seller has taken alI corporate or limited liability company action required
to authorize the execution, delivery, and performance of this Agreement and all AnCillary
Documents requiring execution by such Seller, and Seller has delivered to Buyer (i) copies ofall
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resolutions and other documents evidencing such corporate or limited liability company actions,
certified by an authorized representative ofsuch Seller Party as being true, conect, and complete,
and (ii) an incumbency certificate signed by the secretary of Seller certifoing as to the names and
signatures of the authorized representatives of Seller.
(c) The execution, delivery and performance by each Seller ofthis Agreement
and any Ancillary Documents to which it is a party have been duly authorized by all necessary
organizational action, and do not require any consent or approval other than those which have
already been obtained.
(d) The execution and delivery of this Agreement and all Ancillary
Documents, the consummation of the transactions contemplated hereby and thereby and the
fulfillment of and compliance with the provisions of this Agreement and any Ancillary
Documents. do not conflict with or constitute a breach of or a default under, any of the terms,
conditions or provisions of any Requirement of Law, or any organizational documents,
agreement, deed oftrust, mongage, loan agreement, other evidence of indebtedness or any other
agreement or instrument to which Seller is a party or by which it or any of its property is bound,
or result in a breach of or a default under any of the foregoing or result in or require the creation
or imposition of any Lien upon any of the properties or assets of any Seller (except as
contemplated hereby), and Seller has obtained all Permits (including the CEQA Determinations)
required for the construction, operation, and maintenance ofthe Facility in accordance with the
Requirements and the performance of Seller's obligations hereunder and under the Ancillary
Documents to which Seller is a party, or such Permits are reasonably expected to be timely
obtained in the ordinary course ofbusiness.
(e) Each of this Agreement and the Ancillary Documents to which Seller is a
party constihrtes the legal, valid and binding obligation of Seller enforceable in accordance with
its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws relating to or affecting the enforcement of creditors' rights generally or by
general equitable principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(0 There is no pending, or to the knowledge of Seller, threatened action or
proceeding affecting Seller before any Govemmental Authority, which purports to affect the
legality, validity or enforceability of this Agreement or any Ancillary Documents.
(g) Seller is not in violation of any Requirement of Law, which violations,
individually or in the aggregate, would reasonably be expected to result in a material adverse
effect on the business, assets, operations, condition (financial or otherwise) or prospects of
Seller, or the ability of Seller to perform any of its obligations under this Agreement or any
Ancillary Document.
(h) (i) The corporate organizational structure and ownership of Seller and
Parent Entity is set forth on Schedule 12.2(h). (ii) Seller is a Special Purpose Entity, (iii) all of
the membership interests in Seller are directly owned and controlled by sPower Finco 5, LLC, a
Delaware limited liability company; and (iv) all of the membership interests in sPower Finco 5,
LLC are directly owned and controlled by sPower Solar Holdings LLC, a Delaware limited
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liability company. The limited liability company interests in each ofl seller, and each parent
Entity have been duly issued under and authorized by their respective limited liability company
agreements and in accordance with applicable Requirements ofLaw.
(i) Seller has (i) not entered into this Agreement or any Ancillary Documenrto which it is a party with the actual intent to hinder, delay or defraud any creditor, and (ii)
received reasonably equivalent value in exchange for its obligations under tlis Agreement and
any Ancillary Document to which it is a party. No petition in bankruptcy has been filed against
Seller, and Seller has never made an assignment for the benefit of creditors or taken advantige of
any insolvency act for its benefit as a debtor.
(j) Seller has no reason to believe that any of the permits (other than the
CEQA Determinations) required to construct, maintain or operate the Facility in accordance with
the Requirements will not be timely obtained in the ordinary course of business and by the
Milestone Date requ ired therefor.
(k) Tax retums and reports ofseller required to be filed by it have been timely
filed, and all raxes shown on such ra,r retums to be due and payable and all assessments, fees
and other governmental charges upon Seller and upon its properties, assets, income, business and
franchises that are due and payable have been paid when due and payable. Seller knows ofno
proposed rax assessment against it that is not being actively contested by it in good faith and by
appropriate proceedin g.
(l) Seller owns or possesses or will acquire all patents, rights to patents,
trademarks, copyrights and licenses necessary for the performance by Seller of its obligations
under this Agreement, and Seller's use thereof does not inflringe on the intellectual pioperty
rights of third parties.
(m) Seller has not assigned, transferred, conveyed, encumbered, sold or
otherwise disposed ofthe Products except as provided herein.
(n) Seller reasonably expects to obtain the CEeA Determinations in the
ordinary course of business and is in compliance with any mitigation plans, monitoring progftrms
or other requirements associated therewith.
Section 12.3 Covenants ofSeller Related to Site Control Documents.
(a) A copy of the Site Control Documents duly executed by Seller and the
counterparties thereto shall be delivered to Buyer promptly upon execution thereof, but in no
event any later than the Site Control Milestone Date.
(b) Seller shall on or before the Site Control Milestone Date (i) cause the
execution (if applicable), delivery, and performance by Seller of the site control Documents to
be duly authorized by all necessary action by Seller and to constitute the legat, valid, and binding
obligation of Seller, (ii) maintain Site Control at all times after the Site Control Milestone Date,
and (iii) provide Buyer with prompt notice ofany change in the status ofSeller,s Site control.
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(c)ForeachSiteControlDocumentcapableofbeingrecorded,Sellershall
cause either a memorandum of such Site Control Document or the Site Control Document itself
to be recorded in the applicable county for such Site Control Document promptly upon execution
and delivery thereof.
(d) Seller shall at all times keep, perform, observe and comply with' or cause
to be kept, periormed, observed and complied with, all covenants, agreements, conditions and
other provisions required to be kept, performed, observed and complied with by or on behalfof
Seller from time to time pursuant to the Site Control Documents, and Seller shall not do or
permit anyhing to be doni, the doing of which, or refrain from doing anything, the omission of
which, could materially impair or tend to impair the rights of Seller under the Site Control
Documents, or could reasonably be likely to be grounds for any Lessor or any other counterparty
to Seller thereunder to term inate a Site Control Document.
(e) Setler shall use commercially reasonable efforts to enforce the provisions
of the Site Control Documents short of termination thereof such that Seller may enjoy all ofthe
rights granted to Seller thereunder.
(0 Seller shall give Buyer notice ofany of the following of which Seller has
actual notice upon receipt ofactual notice or becoming aware ofsuch occurrence: (i) any default
or of any event which, with the giving of notice or passage of time, or both, would become a
default under any ofthe Site Control Documents, or the receipt by Seller ofany notice from any
Lessor, or any other counterparty to Seller thereto, or (ii) the commencement or threat of any
action or proceeding or arbitration pertaining to any Site Control Document. Buyer, at its option,
may take any action (but shall not be obligated to take any action) from time to time deemed
necessary or desirable by Buyer to prevent or cure, in whole or in par! any default by Seller
under a Site Control Document. Seller shall deliver to Buyer, immediately upon service or
delivery thereof on, to or by Seller, a copy of each petition, summons' complaint, notice of
motion, order to show cause and other pleading or paper, however designated, which shall be
served or delivered in connection with any such action, proceeding or arbitration.
(g) After Seller's execution and delivery of a Site Control Document, Seller
shall not terminate or cancel, or permit or suffer the termination or cancellation of any Site
Control Document. ln addition, after Seller's execution and delivery of a Site Control
Document, Seller shall not (i) modifo, change, amend or assign the Site Control Document in
any way that would be reasonably likely to result in a material adverse effect on Seller's
performance of its obligations under this Agreement or would be reasonably likely to result in a
material adverse effect on Buyer's rights under the Option Agreement or Storage Option
Agreement, or (ii) waive, excuse, condone, or in any way release or discharge the counterparty to
any Site control Document ofor from the obligations, covenants, conditions, and agreements by
such counterparty under such Site Control Document in each case, without the prior written
consent of Buyer.
(h) On or before the Commercial Operation Date Seller shall use
commercially reasonable efforts to cause each counterparty under a Site Control Document to
provide Buyer with an estoppel cenificate that states that: (i) the relevant Site Control Document
is in full force and effect and has not been supplemented, amended, assigned or subleased;
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(ii)there are no uncured defaults under the relevant Site control Document and no event or
circumstance has occurred and is continuing which, with the giving ofnotice, the passage of time
or both, would constitute a delault under the Site control Document; (iii) for any Site control
Document that does not recognize and allow for the Right of First Refusal, Right of First Offer
and Project Purchase option, evidences such counterparty's consent to Seller's grant of the Right
of First Refusal, Right of First offer and Project Purchase option and to the assignment of such
Site control Document to Buyer following exercise of the Right of First Refusal, Right of First
offer or Project Purchase option; and (iv) evidences such counterparty's consent to the right of
Buyer to cure any payment default by Seller under the Site control Documents prior to
termination thereof.
(D Seller shall (i) obtain Buyer's approval prior to the execution and delivery
by Seller of any Site control Document for land not shown on Aooendix N and (ii) provide to
Buyer copies of all Site Control Documents; providetl Buyer's approval of Site Control
Documents shall not be unreasonably withheld, conditioned, or delayed.
0) Upon any payment by Buyer to cure any default of Seller under a Site
Control Document that prevents termination of such Site Control Document or the exercise of
any other remedy of the counterparty thereunder arising out of such default, Seller, within ten
(10) days following receipt of notice from Buyer that it made such payment, shall reimburse the
amount of such payment to Buyer plus interest accruing thereon at the Interest Rate, from and
including the date ofthe payment by Buyer to cure such default to but excluding the date ofsuch
reimbursement by Seller.
(k) As long as this Agreement is in effect, there shall be no merger of any Site
Control Document or of the leasehold estate or easement created thereby with the fee estate in
the property subject to the Site Control Document and Seller shall not acquire any interest in
such fee estate without the prior written consent of Buyer.
0) In the event that a petition under the Bankruptcy Code shall be filed by or
against Seller, Seller hereby presently, absolutely, irrevocably, and unconditionally grants and
assigns to Buyer the sole and exclusive right to instruct Seller to elect to assume and assign or
reject the Land Lease pursuant to Section 365 ofthe Bankruptcy Code, and Seller agrees that any
election, if made by Seller or Seller's trustee without the prior consent ofBuyer shall be void at
inception and ofno force or effect. Absent (i) the consent ofany Facility Lender or Tax Equity
Investor to a rejection of the Land Lease, or (ii) Seller's representation that (a) it cannot cure, or
provide adequate assuEnce that it will promptly cure, all defaults under the Land Lease, (b) it
cannot compensate, or provide adequate assurance that it will promptly compensate, a party
other than Seller to the Land Lease for any actual pecuniary loss to such party arising from such
default, and (c) it cannot provide adequate assurance of future performance under the Land
Lease, Buyer shall instruct Seller to assume the Land Lease. Buyer shall have the right, but not
the obligation, to instruct Seller or Seller's trustee as to such assumption and assignment of the
Land Lease, and Seller shall, or shall cause Seller's trustee to, comply with such instructions.
(m) In the event of a Lessor Bankruptcy and the resulting termination,
rejection or disaffirmance by the Lessor (or by any receiver, trustee, custodian, or other party that
succeeds to the rights of the Lessor) under the Land Lease pursuant to the Bankuptcy code,
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Seller hereby presently, absolutely, irrevocably, and unconditionally grants and assigns to Buyer
the right to make or refrain from making any election available to lessees under the Bankruptcy
Codelincluding the election available pursuant to Section 365(h) of the Bankruptcy Code and
any successor provision) and Seller agrees that any such election, if made by Seller without the
prior written consent of Buyer (which Buyer would not anticipate granting due to the important
of the Land Lease as security) shall be void at inception and of no force or effect. Without
limiting the generality of the floregoing sentence, Seller shall not, without Buyer's prior written
conseni, elect to treat the Land Lease or the leasehold estate created thereby as terminated under
Section 365 of the Bankruptcy Code, after rejection or disaffirmance of the Land Lease by the
Lessor (whether as debtor in possession or otherwise) or by any trustee of the Lessor, and any
such election made without such consent shall be void at inception and ofno force or effect. At
the request of Buyer , Seller witl join in any election made by Buyer under the Bankruptcy Code
and will take no action in contravention ofthe rights granted to Buyer pursuant to this (4q).
(n) In the event of a Lessor Bankruptcy and the resulting termination,
rejection or disalfirmance by the Lessor under the Land Lease (whether as debtor in possession
or otherwise) or by any trustee ofsuch Lessor pursuant to the Bankuptcy Code, and Buyer elects
to have Seller remain in possession under any legal right Seller may have to occupy the property
pursuanr ro the Land Lease, then Seller shall remain in possession and shall perform all acts
necessary for Seller to retain its right to remain in such possession, whether such acts are
required under the then-existing terms and provisions ofthe Land Lease or otherwise.
Section 12.4 Covenants of Seller to Provide Quarterly Attestations. Seller
shall provide to Buyer each calendar quarter a certificate executed by an authorized officer of
Seller certifying that (a) the representations and wananties set forth in this Agreement remain
true and correct as ofthe date ofsuch certificate, and (b) there exists no Default by Seller or any
event that, after notice or with the passage of time or both, would constitute a Default hereunder;
provided, that with respect to any attestation as to any representation and warranty set forth in
Section 12.2(h), Seller may update such attestation and Schedule 12.2(h) in order to account for
any mergers, transfers, consolidations, assignments, restructurings, or similar transactions to the
extent that such transactions either (A) do not constitute a Change of Control or (B) have been
consented to by Buyer.
Section 12.5 Additional Covenants of Seller.
(a) Material Adverse Effect. In the event ofa material adverse effect on the
business, assets, operations, condition (financial or otherwise) or prospects of Seller or an event
of default by Seller or the operator under the O&M Agreement, Seller shall promptly thereafter
notifi Buyer, and Seller shall, within thirty (30) days after providing such notice, provide Buyer
with a plan or report, including the report (at Seller's sole cost and expense) of a Licensed
Professional Engineer with respect to any operational problem related to the Facitity if
reasonably requested by Buyer that demonstrates in detail reasonably acceptable to Buyer, that
the material adverse effect or event of defautt by Seller or the operator under the O&M
Agreement has been mitigated or cured, or will be mitigated or cured within a reasonable period
or within the cure periods provided therefor (and listing, in detail, the actions that Seller has
taken, is taking, or proposes to take with respect to such condition or event), or that such material
adverse effect or event of default by Seller or the operator under the O&M Agreement will not
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have a material adverse effect on the performance of Seller under this Agreement. A failure toprovide such plan or report within thirty (30) days, or to diligently undertake any ofthe actions
set forth under such plan or report, will be deemed a failure by sl er to perform under Section
r 3. t(b).
(b) Permits. Seller shall timely obtain all permits required for the
construction of the Facility, the performance of such Seller Party's obligations hereunder and
under the Ancillary Documents to which such Seller party is a pa.ty, and the operation of the
Facility in accordance with the Requirements.
(c) Special Purpose Entity. Seller shall remain at all times throughout the
Agreement Term a Special Purpose Entity.
(d) Facility Debt. Seller shall not permit Facility Debt in an amount that, in
the aggegate, exceeds seventy percent (70o/o) ofthe Facility Cost. on January l, April l, July l,
and october I of each year commencing on the Effective Date, seller shall provide to Buyer a
certificate ofan officer, director or member of Seller attesting to the Facility Debt as being iquat
to or less than seventy percent (70%) of the Facitity Cost as ofsuch date, which certificaie shall
be accompanied by supporting documentation in reasonable detail, inctuding Seller's most recent
annual and quarterly financial statements and a statement of the Facility's then-current Facilitv
Debt and Facility Cost values.
Section 12.6 Storage Technolory.
(a) [Reservedl
(b) Interconnection. Provided that Buyer provides reasonable direction as to
storage technology and design, no later than sixty (60) days following the Effective Date, Seller
shall complete and submit a material modification request (the "MMR") with the cAISo for the
instaflation ofan energy storage system to the Facility location, in an amount equ alto 24o/o of the
contract capacity, or as otherwise mutually agreed by the parties (the "slorage Capaciry,').
Seller shall promptly forward all material communication with the cAISo to Buyer regarding
the MMR' If CAISO determines that the MMR does not constitute a material modification,
Seller shall use commercially reasonable efforts to reserve the Storage capacity for Buyer,s
installation of an energy storage system in accordance with the storage option Agreemeni. If
cAISo determines that such request is a material modification, at Buyer,s request, Seller shall
assist Buyer with a new interconnection request. Buyer shall pay all costs exceeding $91,000 in
connection with the MMR.
(c) Land. On or before the Site Control Milestone Date, Seller shall reserve
land on the Site to accommodate a storage facility configuration at the Facility inverter locations
or at the Facility Substation location, or any other location mutually agreed to by the parties and
shall provide evidence to Buyer of such reservation of land; providid that Seller shall not be
required to dedicate more than 2,000 square feet ofland per MW ofinstalled storage capacity.
(d) Permit. Provided that Buyer provides reasonable direction as to storage
technology and design, Seller shalt, at Buyer's request, use commercially reasonable efforts, but
incurring no more than $91,000 ofcosts, to obtain a conditional use permit modification to ailow
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for the installarion and operation ofan energy storage system at the Facility location.
(e) No Other Storage. Seller shall not incorporate into, or utilize anystorage
technology or capability whatsoever with the Facility, except in connection with Buyer's
exercise,-if uny, of itr option under the Storage Option Agreement, or as required by any
Govemmental Authority other than Buyer or its Participating Members'
ARTICLE XIII
DEFAULT; TE,RMINATION AND REMEDIES; PERFORMANCE DAMAGE
Section l3.l Default Each of the following events or circumstances shall
constitute a "Dejfa uff' by the responsible Pafiy (ahe "Delaulling Parly"):
(a) Payment Default. Failure by a Party to make any payment under this
Agreement when and as due (other than payments disputed in good faith) that is not cured within
thiny (30) days after receipt of notice thereof from the other Party (which amount shall include
payment of interest from the due date at the lnterest Rate);
(b) Performance Default. Failure by a Party to perform any of its duties or
obligations under this Agreement (other than any failure that is separately listed as a Default of
Seltir under rhis section l3.l) rhat is not cured within thirty (30) days after receipt of notice
thereof from the other Pafi; provided that if such failure cannot be cured within such thirty (30)
day period despite reasonable commercial efforts and such failure is not a failure to make a
payment when due, such Party shall have up to sixty (60) additional days to cure.
(c) Breach of Representation and Warranty. Any representation, warranty,
certification or other statement made by a Party in this Agreement or any Ancillary Document,
or, in the case of Seller, made in a certification delivered pursuant to Section 12.4, is false or
inaccurate at the time made and materially and adversely affects Seller's ability to perform its
obligations hereunder; provided that no Default shall exist if such falsity or inaccuracy is
remedied within thirty (30) days after receipt ofnotice thereof from another Party.
(d) Bankruptcy. Bankruptcy of Buyer or any Seller Party.
(e) Performance Security Failure. (i) The failure of Seller to fumish
Performance Security by the times set forth in Section 5.7. or the failure ofSeller to maintain or
replace the Performance Security in compliance with Section 5.7, (ii) the failure ofany of the
Performance Security to be in full force and effect in accordance with Section 5.7 or (iii) the
issuer of any Performance Security provided by Seller hereunder contests the validity or
enforceability of the Performance Security or the lefter of credit provider denies that it has any
liability in respect ofany Performance Security and such Performance Security is not replaced in
compliance with Section 5.7.
(f) Insurance Default. The failure of Seller to maintain and provide
acceptable evidence of the required lnsurance for the required period of coverage as set forth in
Appendix F that is not cured within seven (7) after receipt ofnotice ofsuch failure from Buyer.
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(g) Fundamental Change. Except as permitted by Section 14.7, (i) a party
makes an assignment of its rights or delegation of its obligation, no"r ,* Agreement, theoption Agreement, the storage option Agreement, or any Site Control Documint, or (ii) a
Change in Control occurs.
(h) Site Control Document Default. Seller breaches any of its obtigations
under Section 12.2. which breach is not cured within ten (10) days after receipt of notice ihereof
from Buyer, other than a breach of Seller's obligations under Section lj.3(e), which shall
immediately trigger a Default hereunder.
(D Casualty. Seller fails to meet its obligations under Section 14.19(b).
0) Key Milestone. Seller fails to achieve any Key Milestone (other than
commercial operation) on or before the date that is one hundred eighty (lg0) days after the
Milestone Date for such Key Milestone.
(k) Commercial Operation Date, Seller fails to achieve Commercial
Operation on or before the Outside Commercial Operation Date.
Section 13.2 Default Remedy.
(a) lfl Buyer is in Default for nonpayment, subject to any duty or obligation
under this Agreement, Seller may, at its option, suspend performance hereunder or continue to
provide services pursuant to its obligations under this Agreement; provided that nothing in this
Section 13.2(a) shall affect Seller's rights and remedies set forth in this Section 13.2. Seller's
continued service to Buyer shall not act to relieve Buyer of any of its duties or obligations under
this Agreement.
(b) Notwithstanding any other provision herein, if any Default has occurred
and is continuing, the affected Party may, whether or not the dispute resolution procedure set
forth in Section 14.3 has been invoked or completed, bring an action in any court of competent
jurisdiction as set forth in Section 14.3 seeking injunctive relief in accordance with applicable
rules of civil procedure.
(c) Except as expressly limited by this Agreement, if a Default has occurred
and is continuing and Buyer is the Defaulting Party, Seller may without further notice exercise
any rights and remedies provided herein or otherwise available at law or in equity including a
termination of this Agreement pursuant to Section t 3.4. No failure of Seller to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by Selter of any other right, remedy or power hereunder
preclude any other or future exercise ofany right, remedy or power.
(d) Except as expressly limited by this Agreement, ifa Default has occurred
and is continuing and Seller is the Defaulting Party, Buyer may without further notice exercise
a.ny rights and remedies provided for herein, or otherwise available at law or equity, including
(i) application of all amounts available under the Performance Security against any amounts then
payable by Seller to Buyer under this Agreement, (ii) termination of this Agreement pursuant to
Section 13.4, and (iii) exercise of the project purchase option as pro"id"d in ihe option
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Agreement. No failure of Buyer to exercise, and no delay in exercising, any right, remedy or
piver hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by
buyer of any right, ,"ridy o. power hereunder preclude any other or future exercise of any
right, remedy or power bY BuYer.
Section 13.3 Cure Rights of Facility Lender. ln connection with any
financing or refinancing of the Facility, Buyer shall in good faith negotiate and agree upon a
consent 1o collateral issignment of this Agreement that is commercially reasonable and
customary in the industry for limited or non-recourse project financing transactions and in form
and subitance satisfactory to Buyer; provided, however, the terms of such financing,
documentation relating thereto and consent shall not conflict with the applicable terms and
conditions of this Agreement. (such consent, the " Facility Lender Consenf'). The Facility
Lender Consent shall provide the Facility Lender or its agent notice of the occurrence of any
Default described in Section 13.3 and the opportunity to cure any such default. Seller shall pay
Buyer for the reasonable costs and expenses incurred by Buyer arising in connection with the
negotiation of the Facility Lender Consent (including reasonable attomeys' fees and expenses) as
set forth in Section 14.7.
Section 13.4 Termination for Default.
(a) lf a Default occurs, the Party that is not the Defaulting Party (the "Non-
Defuulting Party") may, for so long as the Default is continuing and, to the extent permitted by
applicable [aw, without limiting any other rights or remedies available to the Non-Defaulting
Party under this Agreement, by notice by it ("Temination Nolice") to the Defaulting Party
(i) establish a date (which shall be no earlier than the date of such notice and no later than twenty
(20) days after the date of such notice) ("Early Tetminalion Dale") on which this Agreement
shafl terminate, and (ii) withhold any payments due in respect of this Agreement; provided, ]upon
the occurrence of any Default of the type described in Section l3.l(d), this Agreement shall
automatically terminate, without notice or other action by either Party as if an Early Termination
Date had been declared immediately prior to such event.
(b) lf an Early Termination Date has been designated, the Non-Defaulting
Party shall calculate in a commercially reasonable manner its Gains, Losses and Costs resulting
from the termination of this Agreement and the resulting Termination Payment. The Gains,
Losses and Costs relating to the Products that would have been required to be delivered under
this Agreement had it not been terminated shall be determined by comparing the amounts Buyer
would have paid for the Products under this Agreement to the equivalent quantities and relevant
market prices, either quoted by one or more bona fide third party offers, or which are reasonably
expected by the Non-Defaulting Party to be available in the market under a replacement contract
for this Agreement covering the same products and having a term equal to the Remaining Term
at the date of the Termination Notice, adjusted to account for differences in transmission, ifany.
To ascertain the market prices of a replacement contract, the Non-Defaulting Party may consider,
among other valuations, quotations from dealers in Energy contracts and bona fide third party
offers. The Non-Defaulting Party shall not be required to enter into any such replacement
agreement in order to determine its Gains, Losses and Costs or the Termination Payment.
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(c) For purposes of the Non-Defaulting party's determination of its Gains,
Losses and costs and the Termination Payment, it sha be assumed, regardless ofthe facts, that
Seller would have sold, and Buyer would have purchased, each day during the Remaining Term
(i) Facility Energy in an amount equal to the Assumed Daily Deliveries, (ii) the Environmental
Attributes associated therewith, and (iii) all other components ofthe products. The,,Assumed
Daily Deliveries" shall be an amount equal to the greater of (A) the quotient of the Guaranteed
Generation divided by 365, and (B) the average daily amount of Facility Energy during the
Delivery Term, if any.
(d) The Non-Defaulting Party shafl notify the Defaulting party of the
Termination Payment, which notice shall include a written statement explaining in reasonable
detail the calculation of such amount. If the Termination payment is a positive number, the
Defaulting Party shall, within ten (10) Business Days after receipt of such notice, pay the
Termination Payment to the Non-Defaulting Party, together with interest accrued at the lnterest
Rate from the Early Termination Date until paid.
(e) lf the Defaulting Party disagrees with the calculation of the Termination
Payment and the Parties cannot otherwise resolve their differences, the calculation of the
Termination Payment shall be submitted to the dispute resolution process provided in Section
14.3. Fotlowing resolution of the dispute, the Defaulting party shall pay the full amount of rhe
Termination Payment (if any) as determined by such resolution as and when required, but no
later than thirty (30) days following the date ofsuch resolution, together with all interest, at the
Interest Rate, that accrued from the Early Termination Date until the date the Termination
Payment is paid.
(0 For purposes of this Agreement:
(D "Gcr'zs" means, with respect to a Party, an amount equal to the
present value of the economic benefit (exclusive of Costs), if any, resulting from the
termination of its obligations under this Agreement, determined in a commercially
reasonable manner;
(ii) "Losses" means, with respect to a Party, an amount equal to the
present value of the economic loss (exclusive of Costs), if any, resulting from the
termination of its obligations under this Agreement, determined in a commercially
reasonable manner;
(iiD "Casls" means, with respect to a party, brokerage fees,
commissions and other similar transaction costs and expenses reasonably incurred in
terminating any arrangement pursuant to which it has hedged its obligations or in
entering into new arrangements which replace this Agreement, excluding attomeys, fees,
ifany, incurred in connection with enforcing its rights under this Agreement. Each party
shall use reasonable efforts to mitigate or eliminate its Costs.
(iv) In no event shall a Party,s Gains, Losses or Costs include any
penalties or similar charges imposed by the Non-Defaulting party.
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(v) The Present Value Rate shall be used as the discount rate in all
present value calculations required to determine Gains, Losses and Costs'
(g) At the time for payment ofany amount due under this Section l3'4' each
Party shall pay to the other Party, all additional amounts, if any, payable by it under this
Agreement (including any amounts withheld pursuant to Section 13.4(a))'
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Authorized Representative. Each Party shall designate an
authorized representative who shall be authorized to act on its behalf with respect to those
matters contained herein (each an "Authofized Representative"), which shall be the functions
and responsibilities of such Authorized Representatives. Each Party may also designate an
atternate who may act for the Authorized Representative. Within thirty (30) days after execution
of this Agreement, each Party shall notify the other Party of the identity of its Authorized
Representative, and alternates if designated, and shall promptly notify the other Party of any
subsequent changes in such designation. The Authorized Representatives shall have no authority
to alter, modifi, or delete any of the provisions of this Agreement. To the extent that an
Authorized Representative's contact information is not provided in Appendix C, at the time a
Party designates such Authorized Representative, such Party shall concurrently provide written
notice to the other Party ofsuch Authorized Representative's contact information.
Section 14.2 Notices. With the exception ofbilling invoices pursuant to Section
ll.l, all notices, requests, demands, consents, approvals, waivers and other communications
which are required under this Agreement shall be (a) in writing (regardless of whether the
applicable provision expressly requires a writing), (b) deemed properly sent if delivered in
plrson o. senr by facsimile transmission, reliable ovemight courier, or sent by registered or
iertified mail, postage prepaid to the persons specified in Aooendix J, and (c) deemed delivered,
given and received on the date of delivery, in the case of facsimile transmission, or on the date of
receipt or rejection in the case of delivery in person, by reliable overnight courier, or by
registered or certified mail. In addition to the foregoing, the Parties may agree in writing at any
time to deliver notices, requests, demands, consents, approvals waivers and other
communications through altemate methods, such as electronic mail.
Section 14.3 DisPute Resolution.
(a) In the event of any claim, controversy or dispute between the Parties
arising out of or relating to or in connection with this Agreement (including any dispute
conceming the validity of this Agreement or the scope and interpretation of this Section 14.3) (a
"Dispule"), either Party (the "Nolwing Parry") may deliver to the other Party (the "Recipient
Party") notice of the Dispute with a detailed description of the underlying circumstances ofsuch
Disiute (a "Dispule Norice"). The Dispute Notice shall include a schedule of the availability of
the Notifying Party's senior officers (having a title of senior vice president (or its equivalent) or
higher) duly authorized to settle the Dispute during the thirty (30) day period following the
delivery of the Dispute Notice.
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(b) The Recipient Party shall, within five (5) Business Days following receipt
of the Dispute Notice, provide ro the Notirying party a paraltel schedule oi availabili[ of the
Recipient Party's senior officers (having a title of senior vice president (or its equivilent) or
higher) duly authorized to settle the Dispute. Fo owing delivery of the respective senior
officers' schedules ofavailability, the senior officers of the Parties shall meet and ionfer as often
as they deem reasonably necessary during the remainder of the thirty (30) day period in good
faith negotiations to resolve the Dispute to the satisfaction ofeach party.
(c) In the event a Dispute is not resolved pursuant to the procedures set forth
in Section 14.3(a) and Section 14.3ft) by the expiration of the thirty (30) day period set forth in
Section 14.3(a), then a Party may pursue any legal remedy available to it in accordance with the
provisions ofSection 14.l2 and Section 14.13 ofthis Agreement.
(d) In addition to the Dispute resolution process set forth in this Section 14.3.
the Parties shall comply with calilomia law governing claims against public entities and
presentment of such claims.
Section 14.4 Further Assurances; Change in Electric Market Design.
(a) Each Party agrees to execute and deliver all further instruments and
documents, and take all further actions not inconsistent with the provisions of this Agreement
that may be reasonably necessary to effectuate the purposes and intent of this Agreement.
(b) If a change in the CAISO Tariff renders this Agreement or any provisions
hereof incapable of being performed or administered, then either party may request that Buyer
and Seller enter into negotiations to make the minimum changes to this Agreement necessary to
make this Agreement capable of being performed and administered, while aftempting to preserve
to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement
as ofthe Effective Date. upon delivery ofsuch a request, Buyer and Seller shall engage in such
negotiations in good faith. If Buyerand Seller are unable, within sixty (60) days after delivery of
such request, to agree upon changes to this Agreement or to resolve issues relating to changes to
this Agreement, then either Party may submit issues pertaining to changes to this Agrcement to
the Dispute resolution process set forth in section 14.3. Notwithstanding the foregoing, a change
in cost shall not in and of itself be deemed to render this Agreement or any of the provisions
hereof incapable of being performed or administered, or constitute, or form the basis of, a Force
Majeure.
Section 14.5 No Dedication of Facilities. Any undertaking by one party to the
other Party under any provisions of this Agreement shall not constitute the dedication of the
Facility or any portion thereof of either Party to the public or to the other party or any other
Person, and it is understood and agreed that any such undertaking by either party shall cease
upon the termination ofsuch Party's obligations under this Agreement.
Section 14.6 Force Majeure.
(a) A Party shall not be considered to be in Default in the performance ofany
of its obligations under this Agreement when and to the extent such party's performance is
prevented by a Force Majeure that, despite the exercise of due diligence, such party is unable to
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prevent or mitigate, provided the Party has given a written detailed description of the full
particulars of thi Force Majeure to the other Party reasonably promptly after becoming_aware
ihereof (and in any event within fourteen (14) days after the initial occurrence of the claimed
Force Majeure "u"ng 1th" ''Force Maieure Nolice"), which notice shall include information with
respect to the nature, cause and dite and time of commencement of such event, and the
anticipated scope and duration of the delay. The Party providing such Force Majeure Notice_shall
be excused from fulfilling its obligations under this Agreement until such time as the Force
Majeure has ceased to prevent performance or other remedial action is taken, at which time such
Party shall promptty notify the other Party of the resumption of its obligations under this
Agriement. If Seiler is unable to deliver, or Buyer is unable to receive, Facility Energy due to a
Force Majeure, then Buyer shall have no obligation to pay Seller for Facility Energy not
delivered or received by reason thereof. The foregoing provisions shall not excuse any
obligation of Seller with respect to Shortfall Energy (and Replacement Product, as applicable)
arising prior to the occurrence ofany Force Majeure event. In no event shall Buyer be obligated
to "orni"nrut" Seller or any other Person for any losses, expenses or liabilities that Seller or such
other Person may sustain as a consequence of any Force Majeure.
(b) The term "Force Maieure" means any act of God (including fire, flood,
earthquake, extremely severe storm, lightning strike, tornado, volcanic eruption, hurricane or
other natural disaster), labor disturbance, strike or lockout of a national scope, act ofthe public
enemy, war, insurrection, riot, explosion, terrorist activitieS or any order, regulation or restriction
imposed by govemmental, military or lawfully established civilian authorities, or other
o"iur."nc" that (i) prevents one Party from performing any of its obligations under this
Agreement, (ii) could not reasonably be anticipated as of the date of this Agreement, (iii) is not
within the reasonable control of, or the result of negligence, willful misconduct, breach of
contract, intentional act or omission or wrongdoing on the part of the affected Party (or any
subcontractor or Affiliate ofthat Party, or any Person under the control ofthat Party or any of its
subcontractors or Affiliates, or any Person for whose acts such subcontractor or Affiliate is
responsible), and (iv) by the exercise ofdue diligence the affected Party is unable to overcome or
avoid or cause to be avoided; provided nothing in clause (iv) above shall be construed so as to
require a Party to accede or agree to any provision not satisfactory to it in order to settle and
terminate a strike or labor dispute in which it may be involved. Any Party rendered unable to
fulfill any of its obligations by reason ofa Force Majeure shall exercise due diligence to remove
such inability with reasonable dispatch within a reasonable time period and mitigate the effects
ofthe Force Majeure. The relief from performance shall be ofno greater scope and ofno longer
duration than is required by the Force Majeure. Without limiting the generality of the foregoing,
a Force Majeure does not include any of the following (each an "Unexcused Cause"): (l) any
requirement to comply with a RPS Law or any change (whether voluntary or mandatory) in any
RPS Law, or other Change in Law, that may affect the value of the Products; (2) events arising
from the failure by Seller to construct, operate or maintain the Facility in accordance with this
Agreement; (3) any increase ofany kind in any cost; (4) delays in or inability of a Party to obtain
financing or other economic hardship ofany kind; (5) Seller's ability to sell any Facility Energy
at a pric; in excess of those provided in this Agreement or Buyer's ability to purchase Energy at
a price lower than those provided in this Agreement; (6) curtailment or other interruption ofany
Tiansmission Service; (7) failure of third parties to provide goods or services essential to a
Party's performance; (8) Facitity or equipment failure of any kind; (9) any changes in the
financiai condition of Buyer, any Seller Party, the Facility Lender or any subcontractor or
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supplier affecting the affected Party's ability to perform its obligations under this Agreement; or
(10) Seller's inability to obtain sufficient fuel, including due to lack of wind, sun or other fuel
source of an inherently intermittent nature, or power to operate the Facility.
(c) Buyer may terminate this Agreement if (i) a Force Majeure event occurs
that diminishes the production of the Facility by more than fifty percent (50%) of the contract
Capacity for a period of eighteen (lE) consecutive months, or (ii) the Facility is rendered
inoperable and an independent engineer that is mutually acceptable to both Parties determines
that the Facility cannot be repaired or replaced within a period not to exceed twenty four (24)
months following the date ofthe occurrence of the Force Majeure event.
(d) Any termination of this Agreement under Section 14.6(c) shall be ,.no-
fault" and neither Party shall have any liability or obligation to the other party arising out ofsuch
termination. Notwithstanding the foregoing, upon any such termination, each party shall pay the
other Party for any and all amounts hereunder that may be owing, including Seller's obligation to
make payments to Buyer for any existing Shortfall Energy, or other outstanding payments due in
the ordinary course that occurred prior to the termination. Buyer shall retum to Seller the
Performance Security (less any amounts drawn by Buyer in accordance with this Agreement).
The exercise by Buyer of its right to terminate the Agreement shall not render Buyer or Seller
liable for any losses or damages incurred by the other Party whatsoever.
Section 14.7 Assignment of Agreement.
(a) Buyer may from time to time and at any time assign any or all of its rights,
and delegate any or all of its obligations, under this Agreement, the Option Agreement and the
Storage Option Agreement in whole or in part without the consent of Seller to a Qualified Buyer
Assignee. Notwithstanding the foregoing, in connection with any such assignment, such
Qualified Buyer Assignee shall execute a written assumption agreement in favor of Seller
pursuant to which any such Qualified Buyer Assignee shall assume all the obtigations of Buyer
under this Agreement, the Option Agreement, and the Storage Option Agreement, thereby
relieving the assignor Buyer from its duties and obligations hereunder and thereunder.
(b) Except as set forth in this Section 14.7, Selter shall not assign any of its
rights, or delegate any of its obligations, in or under this Agreement, the Option Agreement or
the Storage option Agreement without the prior written consent ofBuyer, such consent not to be
unreasonably withheld. Any purported assignment or delegation in violation of this provision
shall be null and void and ofno force or effect.
(c) Buyer's consent shall not be required in connection with the collateral
assignment or pledge of this Agreement for the sole purpose of financing exclusively this
Facility to any Facility Lender or the assignment of this Agreement to a Tax Equity Investor in
connection with a Tax Equity Financing utilizing a lease or inverted lease structure; provided,
however, that (l) the terms of such financing and the documentation relating thereto shall not
conflict with the applicable terms and conditions of this Agreement, the option Agreement, and
the Storage Option Agreement as applicable, (2) in connection with any such assignment or
pledge and the exercise of remedies by any Facility Lender, the Facility Lender acknowledges
and agrees to be bound by the requirement that the Facility be operated and maintained by a
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Qualified Operator and (3) in the event ofany foreclosure, whetherjudicial or nonjudicial, or any
deed in lieu of foreclosure, in connection with any deed oftrust, mortgage, or other similar Lien,
Facility Lender shall be bound by the covenants and agreements of Seller in this Agreement, the
Option Agreement and the Storage Option Agreement. Seller shall provide Buyer with ninety
(90) days' prior notice of any such collateral assignment or pledge' Notwithstanding the
foregoing or anlthing else expressed or implied herein to the contrary, Seller shall not assign,
transfer, convey, encumber, sell or otherwise dispose of all or any portion of the Products (not
including the proceeds thereof) to any Facility Lender.
(d) Subject to Section 14.7(e), Seller shall provide ninety (90) days' written
notice to Buyer prior to the occurrence of any (i) Change in Control, (ii) any other transaction or
series of transactions with respect to the sale, transfer or disposition involving any parent entity
of Seller holding directly or indirectly as least fifty percent (50%) of the equity ownership or the
power to control the management and policies of Seller, or (iii) any Tax Equity Financing-
(e) A Change in Control is permitted if (i) Buyer has given prior written
consent to the transaction or transactions constituting the Change in Control, and
(ii) concurrently with the transaction or transactions constituting the Change in Control, if there
is a successor entity, such successor enlity executes a written assumption agreement in favor of
Buyer pursuant to which such successor entity shall assume all ofthe obligations of Seller under
this Agreement and the Ancillary Documents, and agree to be bound by all the terms and
conditions of this Agreement and the Ancillary Documents, as applicable. In connection with
any Change in Control in which Seller remains party to this Agreement and the Ancillary
Documents, at Buyer's request, Seller shall deliver an estoppel certificate to Buyer confirming
that this Agreement and the Ancillary Documents remain in full force and effect.
(0 Seller shall not sell or transfer the Facility to any Person other than a
Person to whom Seller assigns this Agreement, the Option Agreement and the Storage Option
Agreement in accordance with this Section 14.7, without the prior written consent of Buyer and
otherwise subject to compliance with the Right of First Offer and Right of First Refusal set forth
in Section 14.25. Any purported sale or transfer in violation of this Section 14.7(fl shall be null
and void and ofno force or effect.
(g) In no event shall Buyer be liable to any Facility Lender for any claims,
losses, expenses or damages whatsoever other than liability a Buyer may have to Seller under
this Agreement, the Option Agreement, or the Storage Option Agreement, as applicable. In the
event of any foreclosure, whether judicial or nonjudicial, or any deed in lieu of foreclosure, in
connection with any deed of trust, mortgage, or other similar Lien, Facility Lender shall be
bound by the covenants and agreements of Seller in this Agreement, the Option Agreement and
the Storage Option Agreementt provided, however, that until the Person who acquires title to the
Facility executes and delivers to Buyer a written assumption of Seller's obligations under this
Agreement in form and substance acceptable to Buyer, such Person shall not be entitled to any of
the benefits of this Agreement. Any sale or transfer of all or any portion ofthe Facility by any
Facility Lender in connection with any foreclosure, whether judicial or nonjudicial, or any deed
in lieu of foreclosure, in connection with any deed of trust, mortgage or similar Lien on the
Facility, shall be made only to an entity that is a Qualified Transferee.
ATTACHMENT C
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-68-
(h) Seller shall reimburse, or shall cause the Facility Lender to reimburse,
Buyer for the incremental direct expenses incurred by Buyer in the preparation, negotiation,
execution or delivery of the Facility Lender Consent and any other documents requested by
Seller, the Facility Lender, or any Tax Equity lnvestor and proyided by Buyer, in connection
with to this Section [4.7 or any Tax Equity Financing.
Section 14.8 Ambiguity. The Parties acknowledge that this Agreement was
jointly prepared by them, by and through their respective legal counsel, and any uncertainty or
ambiguity existing herein shall not be interpreted against either Party on the basis that the Party
drafted the language, but otherwise shall be interpreted according to the application ofthe rules
on interpretation of contracts.
Section 14.9 Attorneys' Fees & Costs. Both Parties agree that in any action to
enforce the terms of this Agreement that each Party shall be responsible for its own attomeys'
fees and costs. Each of the Parties to this Agreement was represented by its respective legal
counsel during the negotiation and execution of this Agreement.
Section 14.10 Voluntary Execution. Both Parties acknowledge that they have
read and fully understand the content and effect of this Agreement and that the provisions of this
Agreement have been reviewed and approved by their respective counsel. The Parties further
acknowledge that they have executed this Agreement voluntarily, subject only to the advice of
their own counsel, and do not rely on any promise, inducement, representation or warranty that is
not expressly stated herein.
Section 14.11 Entire Agreement; Amendments. This Agreement (including all
Appendices and Exhibits) contains the entire understanding conceming the subject matter herein
and supersedes and replaces any prior negotiations, discussions or agreements between the
Parties, or any of them, concerning that subject matter, whether written or oral, except as
expressly provided for herein. This is a fully integrated document. Each Party acknowledges
that no other party, representative or agent, has made any promise, representation or warranty,
express or implied, that is not expressly contained in this Agreement that induced the other Party
to sign this document. This Agreement may be amended or modified only by an instrument in
writing signed by each Party.
Section 14.12 Governing Law. This Agreement was made and entered into in
the County of Los Angeles, Califomia and shall be governed by, interpreted and enforced in
accordance with the laws of the State oflCalifomia, without regard to conflict of law principles.
Section 14.13 Venue. All litigation arising out of, or relating to this Agreement,
shall be brought in a state or federal court in the County of Los Angeles in the State of
Califomia. The Parties irrevocably agree to submit to the exclusive jurisdiction ofsuch courts in
the State of Califomia and waive any defense of forum non conveniens.
Section 14.14 Execution in Counterparts. This Agreement may be executed in
counterparts and upon execution by each signatory, each executed counterpart shall have the
same force and effect as an original instrument and as if all signatories had signed the same
instrument. Any signature page of this Agreement may be detached fiom any counterpart of this
ATTACHMENT C
POWER SALES AGREEMENT
78956126 9 008l s r 9-000 r6
-69-
Agreement without impairing the legal effect of any signature thereon, and may be aftached to
anorher counterpart of this Agreement identical in form hereto by having attached to it one or
more signature pages.
Section 14.15 Effect of Section Headings. Section headings appearing in this
Agreement are inserted for convenience only and shall not be construed as interpretations of text.
Section 14.16 Waiver; Available Remedies. The failure of either Party to this
Agreement to enforce or insist upon compliance with or strict performance ofany ofthe terms or
conditions hereof, or to take advantage of any of its rights hereunder, shall not constitute a
waiver or relinquishment of any such terms, conditions or rights, but the same shall be and
remain at all times in full force and effect. Except to the extent this Agreement expressly
provides an exclusive remedy for a breach, nothing contained herein shall preclude either Party
from seeking and obtaining any available remedies hereunder, including recovery of damages
caused by the breach of this Agreement and specific performance or injunctive relief, or any
other remedy given under this Agreement ot now or hereafter existing in law or equity or
otherwise. Seller acknowledges that money damages may not be an adequate remedy for
violations of this Agreement and that Buyer may, in its sole discretion seek and obtain from a
court of competent jurisdiction specific performance or injunctive or such other relief as such
court may deem just and proper to enforce this Agreement or to prevent any violation hereof.
Seller hereby waives any objection to specific performance or injunctive relief. The rights
granted herein are cumulative.
Section 14.17 Relationship of the Parties. This Agreement shall not be
interpreted to create an association, joint venture or partnership between the Parties hereto or to
impose any partnership obligation or liability upon either Party. Neither Party shall have any
right, power or authority to enter into any agreement or undertaking for, or act on behalfof, or to
act as an agent or representative of, the other Party.
Section 14.1E Third Party Beneficiaries. The provisions ofthis Agreement are
solely for the benefit of the Parties. Nothing in this Agreement, whether express or implied,
shall be construed to give to, or be deemed to create in, any other Person, whether as a third pany
beneficiary of this Agreement or otherwise, any legal or equitable right, remedy or claim in
respect of this Agreement or any covenant, condition, provision, duty, obligation or undertaking
contained or established herein. This Agreement shall not be construed in any respect to be a
contract in whole or in part for the benefit ofany Person that is not a party hereto.
Section 14.19 Indemnification; Damage or
Condemnation; Limit of Liability.
Destruction; Insurancel
(a) Indemnification. Seller undertakes and agrees to indemnify and hold
harmless Buyer, Participating Members, and all of their respective commissioners, officers,
agents, employees, advisors, and Authorized Representatives and assigns and successors in
interest (collectively, "Intlemnilees") and, at the option of Buyer, to defend such Indemnitees
from and against any and all suits and causes of action (including proceedings before FERC)'
claims, charges, damages, demands, judgments, civil fines and penalties, other monetary
remedies or losses ofany kind or nature whatsoever, for death, bodily injury or personal injury to
ATTACHMENT C
POWER SALES AGREEMENT
789s6126 9 008 t5 I9-000l6
-70-
any person, including Seller's employees and agents, or third persons, or damage or destruction
to any property ofeither Party or third persons, in any manner arising by reason ofany breach of
this Agreement by Seller, any failure of a representation, warranty or guarantee of Seller
hereunder to be true in all material respects, the negligent acts, errors, omissions or willful
misconduct incident to the performance of this Agreement on the part of Seller, or any of the
Seller's officers, agents, employees, or subcontractors of any tier, except to the extent caused by
the gross negligence or willful misconduct of any such Indemnitee.
(b) Damage or Destruction. If there is a casualty event or other event
causing the destruction of the Facility that renders the Facility incapable of generating 50% or
more of the Annual Contract Quantity, Seller shall, within four (4) months of such event, enter
into a contract for the design of a replacement facility designed to be capable of satisfiing the
obligations of Seller under this Agreement.
(c) Insurance. Seller shall obtain and maintain the Insurance coverages listed
in Apnendix F.
(d) Condemnation or Other Taking. Throughout the Agreement Term,
Seller shall immediately notifo buyer of the institution of any proceeding for the condemnation
or other taking of the Facility, the Facility Assets, or any portion thereof, including the
occurrencs of any hearing associated therewith. Buyer may participate in any such proceeding
and Seller shall deliver to Buyer all instruments necessary or required by Buyer to permit such
participation. Without Buyer's prior written consent, Seller (i) shalt not agree to any
compensation or award, and (ii) shall not take any action or fail to take any action which would
cause the compensation to be determined. All awards and compensation for the taking or
purchase in lieu of condemnation of the Facility, the Facility Assets or any portion thereof shall
be applied toward the repair, restoration, reconstruction or replacement ofthe Facility.
(e) Limitation of Liability. EXCEPT TO THE EXTENT INCLUDED tN
THE LIQUIDATED DAMAGES, INDEMNIFICATION OBLIGATIONS RELATED TO
THIRD PARTY CLAIMS, OR OTHER SPECIFIC CHARGES EXPRESSLY PROVIDED FOR
HEREIN, IN NO EVENT SHALL EITHER PARTY OR, IN THE CASE OF BUYER, ITS
INDEMNITEES, BE LIABLE FOR SPECIAL, INCIDENTAL, EXEMPLARY, INDIRECT,
PUNITIVE OR CONSEQUENTIAL DAMAGES, LOST PROFITS OR OTHER COSTS,
BUSINESS INTERRUPTION DAMAGES RELATED TO OR ARISING OUT OF A
PARTY'S PERFORMANCE OR NON-PERT'ORMANCE OF THIS AGREEMENT,
WHETHER BASED ON OR CLAIMED UNDER STATUTE, CONTRACT, TORT
(INCLUDING SUCH PARTY'S OWN NEGLIGENCE) OR ANY OTHER THEORY OF
LIABILITY AT LAW OR IN EQUITY. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGESBE WITHOUT REGARD TO THE CAUSE OR CAUSES OF SUCH DAMAGES,
INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE
SOLE, JOINT, CONTRIBUTORY, CONCURRENT, OR ACTIVE OR PASSIVE. THE
PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN
LJNREASONABLE PENALTY.
ATTACHMENT C
POWER SALES AGREEMENT
78956126 9 008t5 r9{0016
-71 -
(0 To the extent any damages required to be paid hereunder are liquidated,
the Parties acknowledge that the damages are difficult or impossible to determine, and that the
liquidated damages constitute a reasonable approximation ofthe anticipated harm or loss.
Section 14.20 Severability. In the event any of the terms, covenants or
conditions of this Agreement, or the application ofany such terms, covenants or conditions, shall
be held invalid, illegal or unenforceable by any court having jurisdiction, all other terms,
covenants and conditions of this Agreement and their application not adversely affected thereby
shall remain in force and effect, providecl that the remaining valid and enforceable provisions
materially retain the essence ofthe Parties' original bargain.
Section 14.21 ConlidentialitY.
(a) Each Party agrees, and shall use reasonable efforts to cause its parent,
subsidiary and Affitiates, and its and their respective directors, officers, employees and
representatives, as a condition to receiving confidential information hereunder, to keep
confidential, except as required by law, all documents, dat4 drawings, studies, projections, plans
and other written information that relate to economic benefits to, or amounts payable by, either
Party under this Agreement, and with respect to documents that are clearly marked
'.Confidential" at the time a Party shares such information with the other Party ("Confidenlial
Information"). The provisions of this Section 14.21 shall survive and shall continue to be
binding upon the Parties for a period of one (l) year following the date of termination or
expiration of this Agreement. Notwithstanding the foregoing, information shall not be
considered Confidential Information if such information (i) is disclosed with the prior written
consent ofthe originating Party, (ii) was in the public domain prior to disclosure or is or becomes
publicly known or available other than through the action of the receiving Party in violation of
this Agreement, (iii) was lawfully in a Party's possession or acquired by a Pany outside of this
Agreement, which acquisition was not known by the receiving Party to be in breach of any
confidentiality obligation, or (iv) is developed independently by a Pany based solely on
information that is not considered confidential under this Agreement.
(b) Either Party may, without violating this Section 14.21, disclose matters
that are made confidential by this Agreement:
(D to its counsel, accountants, auditors, advisors, other professional
consultants, credit rating agencies, actual or prospective, co-owners, investors,
purchasers, lenders, underwriters, contractors, suppliers, and others involved in
construction, operation, and financing transactions and arrangements for a Party or its
subsidiaries or Affi liates;
(iD to govemmental officials and parties involved in any proceeding in
which either Party is seeking a permit, certificate, or other regulatory approval or order
necessary or appropriate to carry out this Agreement; and
(iii) to govemmental officials or the public as required by any law,
regulation, order, rule, ruling or other Requirement of Law, including laws or regulations
requiring disclosure of financial information and information material to financial matters
ATTACHMENT C
POVWR SALES AGREEMENT
78956126 9 008I5 t9{00 r5
and filing of financial reports and responding to oral questions, discovery requests,
subpoenas, civil investigations or similar processes; and
(iu) with respect to Buyer, to any of its respective members from time
to time.
(c) If a Party is requested or required, pursuant to any applicable law,
regulation, order, rule, ruling or other Requirement of Law, discovery request, subpoena, civil
investigation or similar process to disclose any ofthe Confidential Information, such Party shall
provide prompt written notice to the other Party of such request or requirement so that at such
other Party's expense, such other Party can seek a protective order or other appropriate remedy
concerning such disclosure.
(d) Notwithstanding the foregoing or any other provision of this Agreement,
Seller acknowledges that Buyer is subject to disclosure as required by the California Public
Records Act, Cal. Gort. Code gg 6250 et seq. ("CPRA") and the Ralph M. Brown Act, Cal.
Covt. Code $$ 54950 et seq. ("Brown.4cf'). Confidential lnformation of Seller provided to
Buyer pursuant to this Agreement shall become rhe property of Buyer, and Seller acknowledges
that Buyer shall not be in breach of this Agreement or have any liability whatsoever under this
Agreement or otherwise for any claims or causes of action whatsoever resulting from or arising
out of Buyer copying or releasing to a third party any of the Confidential Information of Seller
pursuant to CPRA or Brown Act.
(e) Notwithstanding the loregoing or any other provision of this Agreement,
any Buyer may record, register, deliver and file all such notices, statements, instruments and
other documents as may be necessary or advisable to render fully valid, perfected and
enforceable under all applicable law the credit support contemplated by this Agreement and the
Ancillary Documents, and the rights, Liens and priorities of Buyer with respect to such credit
support.
(l) If Buyer receives a CPRA request for Confidential lnformation of Seller,
and Buyer or Buyer's Authorized Representative determines that such Confidential Information
is subject to disclosure under CPRA, then Buyer shall notiry Seller ofthe request and its intent to
disclose the documents. Buyer, as required by CPRA, shall release such documents unless Seller
timely obtains a court order prohibiting such release. If Setler, at its sole expense, chooses to
seek a court order prohibiting the release of Confidential lnformation pursuant to a CPRA
request, then Seller undertakes and agrees to defend, indemnifu and hold harmless Buyer and the
Indemnitees from and against all suits, claims, and causes ofaction brought against Buyer or any
Indemnitees for Buyer's refusal to disclose Confidential Information of Seller to any person
making a request pursuant to CPttA. Seller's indemnity obligations shall include, but are not
Iimited to, all actual costs incurred by Buyer and any Indemnitees, and specifically including
costs of experts and consultants, as well as all damages or liability of any nature whatsoever
arising out ofany suits, claims, and causes of action brought against Buyer or any Indemnitees,
through and including any appellate proceedings. Seller's obligations to Buyer and all
lndemnitees under this indemnification provision shall be due and payable on a Monthly,
on-going basis within thirty (30) days after each submission to Seller of Buyer's invoices for all
ATTACHMENT C
POWER SALES AGREEMENT
78956326 9 mtr 5r9.00016
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fees and costs incurred by Buyer and all Indemnitees, as well as all damages or liability ofany
nature.
(g) Each Party acknowledges that any disclosure or misappropriation of
Confidential Information by such Party in violation of this Agreement could cause the other
Party or their Affiliates ineparable harm, the amount of which may be extremely difficult to
estimate, thus making any remedy at law or in damages inadequate. Therefore each Party agrees
that the non-breaching Party shall have the right to apply to any coun of competent jurisdiction
for a restraining order or an injunction restraining or enjoining any breach or threatened breach
of this Agreement and for any other equitable relief that such non-breaching Party deems
appropriate. This right shall be in addition to any other remedy available to the Parties in law or
equity.
Section 14.22 Mobile-Sierra. The Parties hereby stipulate and agree that this
Agreement was entered into as a result of arm's-length negotiations between the
Parties. Further, the Parties believe that, to the extent the sale of Energy under this Agreement is
subject to Sections 205 and 206 ofthe Federal Power Act, l6 U.S.C. Sections 824d and 824e, the
rates, terms and conditions of this Agreement are just and reasonable within the meanings of
Sections 205 and 206 of the Federal Power Act, and that the rates, terms and conditions of this
Agreement will remain so during the Agreement Term. Notwithstanding any provision of this
Agreement, the Parties waive all rights to challenge the validity of this Agreement or whether it
is just and reasonable for and with respect to the Agreement Term, under Sections 205 and 206
ofthe Federal Power Act, and to request the FERC to revise the terms and conditions and the
rates or services specified in this Agreement, and hereby agree not to seek, nor support any third
party in seeking, to prospectively or retroactively revise the rates, terms or conditions of this
Agreement through application or complaint to FERC or any other state or federal agency, board,
court or tribunal, related in any manner as to whether such rates, terms or conditions are just and
reasonable or in the public interest under the Federal Power Act, absent prior written agreement
of the Parties. The Parties also agree that, absent prior agreement in writing by the Parties to a
proposed change, the standard of review for changes to any rate, charge, classification, term or
condition of this Agreement, whether proposed by a Party (to the extent that any provision ofthis
Section is unenforceable or ineffective as to such Party), a non-party or the FERC acting sua
sponte shall be the "public interest" application of the 'Just and reasonable" standard of review
that requires FERC to find an "unequivocal public necessity" or "extraordinary circumstances
where the public will be severely harmed" to modiry a contract, as set forth in United Gas Pipe
Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v.
Sierro Pacific Power Co., 350 U.S. 348 (1956), and clarified by Morgan Slanley Capital Group,
Inc. v. Public Util. Dist. No. I of Snohomrih 554 U.S. 527 at 550-51 (2008) and NRG Power
Morketing, LLC v. Maine Public Utilities Comm'n,558 U.S. 165 (2010).
Section 14.23 Taxpayer Identification Number (IIN). Seller declares that its
authorized TIN is l' l. No payment will be made under this Agreement without a
valid TIN.
Section 14.24 Service Contract. The Parties intend that this Agreement will
qualify as a "service contract" as such term is used in Section 7701(e) of the United States
Internal Revenue Code of 1986.
ATTACHMENT C
POWER SALES AGREEMENT
78956126 9 008r S l9-00016
-74-
Section 14.25 Right of First Offer and Right of First Refusal.
(a) Buyer has (i) a "Right of First Offer" (or "ROFO") and a ,,Right of Fitst
Refusaf' (or "ROFR") for any proposed sale of the Facility and related assets (the ,,Facitity
Assels") by Seller, and (ii) a ROFO with respect to the sale of Additionat Energy, all in
accordance with the provisions of this Section 14.25.
(b) Prior to Seller commencing the negotiation ofa sale ofthe Facility Assets
(other than in connection with a Tax Equity Financing, in which case the provisions of this
Section 14.25 shall not apply), Seller shall provide notice to Buyer of Seller's proposed
transaction (a"Proposed Sale Notice"). Upon receipt ofsuch Proposed Sale Notice, Buyer shall
have ninety (90) days in which to provide notice to Seller indicating whether Buyer is interested
in negotiating with Seller to purchase the Facility Assets, which notice shall include Buyer's
proposed purchase price for the Facility Assets (a "Proposed purchase Notice"). If Buyer
provides such Proposed Purchase Notice, then the Parties shall undertake for a period of up to
ninety (90) days from the date of Buyer's Proposed Purchase Notice to determine ifthey are able
to reach mutual agreement on the terms and conditions ofa sale of the Facility Assets to Buyer.
(c) If (i) Buyer does not provide such Proposed Purchase Notice to Seller
indicating that Buyer is interested in negotiating the purchase ofthe Facility Assets from Seller,
or (ii) the Parties are unable to agree upon the terms and conditions of a sale of the Facility
Assets to Buyer within the ninety (90) day period set forth in Section 14.25(b) and the
consummation ofthe sale ofthe Facility Assets does not occur within sixty (60) days thereafter,
it being understand that Buyer must obtain approvals from all relevant authorities prior to
consummating the purchase oflthe Facility Assets, then Seller shall be free to negotiate the sale
of the Facility Assets to any third pafty; provided, however, that prior to consum mating any such
sale, (A) Seller shall provide Buyer with a concise summary of the commercial terms negotiated
by Seller with the third pa y (a "Notice of Proposed Third Party Satd') and (B) Buyer shall
have the right to purchase the Facility Assets on substantially similar terms as set forth in the
Notice of Proposed Third Party Sale, subject to any modifications required to conform the
transaction to requirements for transactions sntered into by public agencies, by providing written
notice to Seller within ninety (90) days after receipt of the Notice of proposed rhird party Sale.
If Buyer does not elect to exercise its Right of First Refusal and complete its purchase within
such ninety (90) days (or such longer period as is required for Buyer to obtain the appropriate
approvals so long as Buyer is diligently pursuing approval from the relevant authorities), Seller
shall be free to consummate the sale ofthe Facility Assets to the rhird partyt provided, that such
sale shall be on substantially similar terms and conditions presented to Buyer in the Notice of
Proposed rhird Party Sale. Any sale of the Facility Assets shall include the assignment and
transfer of this Agreement and the Ancillary Documents to such transferee and an assumption by
such transferee of all of Seller's obligations under this Agreement and the Ancillary Documents
and require a written assumption agreement in favor ofBuyer pursuant to which such transferee
shall assume all of the obligations of Seller under this Agreement and the Anciltary Documents
and agree to be bound by all of the terms and conditions of this Agreement and the Ancillary
Documents.
(d) If Seller fails to (i) present a Notice of proposed Third party Sale within
six (6) months after the expiration ofthe ninety (90) day period set fonh in Section 14.25(b), or
ATTACHMENT C
POWER SALES AGREEMENT
7E956326 9 008l5 t9400l6
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(ii) consummate the sale of the Facility Assets to a third party within forty-five (45) days after
the expiration ofthe ninety (90) day period set forth in Section 14.25(c), then Seller shall provide
another Proposed Sale Notice hereunder (and go through the RoFo and RoFR processes
hereunder) before commencing or continuing negotiations with any third party or consummating
a sale ofthe Facility Assets.
ATTACHMENT C
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78955126 9 008 I 5 l9-00016
-76 -
Buyer and Seller were represented by legal counsel during the negotiation and execution
of this Agreement and the Parties have executed this Agreement as ofthe dates set forth belou
effective as ofthe Effective Date.
BUYER:
SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY
ATTACHMENT C
POWER SALES AGREEMENT
By:
Its:
Date:_
Attest:
SELLER:
ANTELOPE DSR I. LLC
By:-
Its:_
Date:
ATTACHMENT C
POWER SALES AGREEMENT
APPENDIX A-1
TO POWER PURCIIASE AGREEMENT,
DATED AS OF JULY 16,2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
ANI)
ANTELOPE DSR I, LLC
CONTRACT PRICE
l. Test Enersy. The contract price for products associated with rest Energy is
equal to $32.25 per MWh.
2' Facilitv Enerev. The Contract Price for the Products associated with all Facility
Energy other than Test Energy and Excess Energy is $53.75 per MWh.
3. Excess Enerqv. The contract price for products associated with Excess Energy
$32.25 per MWh.
ATTACHMENT C
POWER SALES AGREEMENT
A-l--l
APPENDIX A.2
TO POWER PURCHASE AGREEMENT'
DATED AS OF JULY 16' 2015
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
CONTRACT PRICE SCHEDULE
t2l3tl2Ot6
t2l3Ll2or6
12lltl2ot6
t2l3tl20t5
t2l3tl20t6
72l3Ll2ot6
t2lltl2ot6
t2l3tl20t6
t2l3tl2OL6
L2Brl2ot6
t2lttl2ot6
687,936
598,205
523,430
44A,654
373,878
299,703
224,327
149,551
119,641
a9,7?7
59,42t
20
20
5s2.00
5s2.71
5s2.32
s52.45
ss2.61
ssz.75
ss3.00
Ss3.7s
ss4.2s
Sss.oo
ss6.7s
o%
W
w"
w.
096
w.
v"
e/"
ox
v"
w
20
20
20
20
20
20
20
20
20
ATTACHMENT C
POWER SALES AGREEMENT
Appendix A-2 - I
coD Annual Production
(Mwh/yr)
PPA Term
(Years)
Annual
Escalatiron
230
200
175
150
125
100
75
50
I
40
30
20
APPENDIX B-I
TO POWER PT'RCHASE AGREEMENT,
DATED AS OF JULY 16,2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
ANI)
ANTELOPE DSR T, LLC
FACILITY. PERMITS AIID OPE,RATOR
l. Name of Facility: Antelope DSR I Solar Facility
Location: City of Lancaster, Los Angeles County, Califomia
2. Owner: Antelope DSR l, LLC
3. Operator: To be designated after Eflective Date
4. Equipment:
(a) Type ofFaciliry: Solar Photovoltaic(b) Capacity: 50 MW(c) Capacity Factor: 82.5"/"*l
Total nominal gross nameplate capacity: 50 MW
Total nominal net capacity under expected average Site conditions: 50 MW
5. Expected Commercial Operation Date (from Appendix I): December f1,2016
6. Permits:
(a) CEQA Determination(b) Conditiortal Use Permit(c) Building Permit(d) Grading Permit(e) Other permits, ifany, required for the construction and operation ofthe Facility.
* The actual capacity Factor may vary depending on weather and other meteorological
conditions, final Facility design and other factors, although the Annual contract euantities in
Aooendix c and the Guaranteed Generation levels are fixed for all purposes ofthe Agreement.
Appendix B-l - I ATTACHMENT C
POWER SALES AGREEMENT
APPENDIX B-2
TO POWER PURCHASE AGREEMENT'
DATED AS OF JULY 16,2OT5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR 1, LLC
MAP OF THE FACILITY
<<lnsert Map>>
Appendix B-2 - I ATTACHMENT C
POWER SALES AGREEMENT
APPENDIX C
TO POWER PURCHASE AGREEMENT,
DATED AS OF JULY 16, 2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR 1, LLC
ANNUAL CONTRACT OUANTITY
Contract Year Annual Contract
Quantitv, MWh
I 142,436
2 t41.725
3 l4l,0t5
4 140.310
)r39,609
6 r38,91l
7 138.216
8 137.525
9 136,837
l0 136,154
ll 135,473
t2 134,795
l3 t34,t2t
14 133,45 l
l5 132.784
t6 132,n9
17 l3 l .459
l8 130,802
t9 130.147
20 129.496
Appendix C-l ATTACHMENT C
POWER SALES AGREEMENT
APPENDXD
TO POWER PURCHASE AGREEMENT'
DATED AS OF JULY 16' 2OT5
BETWE[,N
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
(Seller)
F'ORM OF ATTESTATION
Environmental Attribute Attestation and Bill of Sale
("SelleC') hereby sells, transfers and delivers to Southem Califomia
public Power Authority ("Buyer") the Environmental Attributes and Environmental Attribute
Reporting Rights associated with the generation from the Facility described below:
Facility name and location:
Fuel Type: Capacity (MW):- Operational Date:
As applicable: CEC Reg. no.
-
Energy Admin. lD no.
-
Q.F. ID no.
-
Dates MWhs qenerated
in the amount of one Environmental Attribute or its equivalent for each MWh generated.
Seller further attests, warrants and represents as lollows:
i) the information provided herein is true and correct;
iD its sale to Buyer is its one and only sale of the Environmental Attributes and associated
Environmental Attribute Reporting Rights referenced herein;
iiD the Facility generated and delivered to the grid the Energy in the amount indicated as
undifferentiated Energy; and
iu) Seller owns the Facility and each of the Environmental Attributes and Environmental
Attribute Reporting Rights associated with the generation of the indicated Energy for
delivery to the grid have been generated and sold by the Facility.
This serves as a bill of sale, transferring from Seller to Buyer all of Seller's right, title and interest
in and to the Environmental Attributes and Environmental Attribute Reporting Rights associated
with the generation ofthe Energy for delivery to the grid.
Appendix D-l ATTACHMENT C
POWER SALES AGREEMENT
20
20
Contact Person/telephone :
APPENDIX E
TO POWER PURCHASE AGREEMENT,
DATED AS OF JULY 16,2015
BETWEEN
SOUTHERN CALIFOR]\IIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR I, LLC
FORM OF LETTER OF CREDIT
IRREVOCABLE AND UNCONDITIONAL
STANDBY LETTER OF CREDIT NO.
Applicant:
lt
Beneficiary:
Southem California Public Power Authoritv
I 160 Nicole Court
Glendale, CA91740
Amount:
Expiration Date:
Expiration Place:
Ladies and Gentlemen:
We hereby issue our Irrevocable and Unconditional Standby Letter of Credit in favor of the
beneficiary by order and for the account of the applicant which is available at sight for USD$xx,xxx,xxx by sight payment upon presentation to us at our office at [bankts addressl,rof: (i) your written demand for payment containing the text of Exhibit I, (ii) your signed
statement containing the text of Exlibit II and, (iii) the original of this Letter of Credit and all
amendments (or photocopy of the original for panial drawings) (the "Documents"). Drawings
may be presented via fax to _. The original Letter of credit and documents are to be sent
via ovemight courier to our address indicated above.
A presentation under this Letter of credit may be made only on a day, and during hours, in
which such office is open for business, and payments can be effected via wire transfer (a'Eu!!49!f !4y"). Partial drawing of funds shall be permitted under this Letter of Credit, and this
Letter of credit shall remain in full force and effect with respect to any continuing balance;
l Note to Issuer: The Letter of Credit must be payable in U.S. dollars within the continental U.S.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix E - I
provided that the Available Amount shall be reduced by the amount ofeach such drawing.
upon presentation to us of your Documents in conformity with the foregoing, we will, on the
third (3rd) succeeding Business Day after such presentation, , irrevocably and without reserve or
condition'except as o-therwise stated herein, make payment hereunder in the amount set forth in
the demand. Piyment shall be made to your order in the account at the bank designated by you
in the demand in immediately available funds. We agree that if, on the Expiration Date, the
office specified above is not open for business by vinue ofan interruption ofthe nature described
in the Uniform Customs Article 36, this Letter of Credit will be duly honored if the specified
Documents are presented by you within thirty (30) days after such office is reopened for
business.
provided that the presentation on this Letter of Credit is made on or prior to the Expiration Date
and the applicabli Documents as set forth above conform to the requirements of this Letter of
Credit, payment hereunder shall be made regardless of: (a) any written or oral direction, request,
notice or other communication now or hereafter received by us from the Applicant or any other
person except you, including without limitation any communication regarding fraud, forgery,
iack of authority or other defect not apparent on the face ofthe documents presented by you, but
excluding solely a written order issued by a coun, which order specifically orders us not to make
such payment; (b) the solvency, existence or condition, financial or other, of the Applicant or
uny oih", p"oon or property from whom or which we may be entitled to reimbursement for such
payment; and (c) without limiting clause (b) above, whether we are in receipt of or expect to
receive funds or other property as reimbursement in whole or in part for such payment' -
We agree that the time set forth herein for payment of any demand(s) for payment is sufficient to
enable us to examine such demand(s) and the related Documents(s) referred to above with care
so as to ascertain that on their face they appear to comply with the terms of this credit and that if
such demand(s) and Document(s) on their face appear to so comply, failure to make any such
payment within such time shall constitute dishonor of such demand(s).
This Lefter of Credit shall terminate upon the earliest to occur of (i) our receipt of a notice in the
form of Exhibit IV hereto signed by an authorized officer of Beneficiary, accompanied by this
Letter of Credit for cancellation, (ii) our close of business at our aforesaid office on the
Expiration Date, or if the Expiration Date is not a Business Day, then on the next Business Day.
It is a condition of this Letter of Credit that it shall be deemed automatically extended without
amendment for one (l) year from the Expiration Date, or any future expiration date, unless at
least thirty (30) calendar days prior to the Expiration Date (or any future expiration date), we
send you notice by registered mail, retum receipt requested or ovemight courier at your address
herein stated or such other address of which you notiry us in advance in writing that we elect not
to consider this Letter of Credit extended for any such additional period.
We may, in our sole discretion, increase or decrease the stated amount of this Letter of Credit ,
and the Expiration Date may be extended, by an amendment to this Letter of credit in the form
of Exhibit ill signed by us. Any such amendment for decrease shall become effective only upon
acceptance by your signature on a hard copy amendment.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix E - 2
You shall not bs bound by any written or oral agreement of any type between us and the
Applicant or any other peson relating to this credit, whether now or hereafter existing.
We hereby engage with you that your demand(s) for payment in conformity with the terms of
this Letter of Credit will be duly honored as set forth above. All fees and other costs associated
with the issuance ofand any drawing(s) against this Letter of Credit shall be for the account of
the Applicant. All of the rights of the Beneficiary set forth above shall inure to the benefit of
your successors by operation of law. In this connection, in the event of a drawing made by a
party other than the Beneficiary, such drawing must be accompanied by the following signed
certification and copy of document proving such successorship:
"The undersigned does hereby certify that [drawer] is the successor by operation of law
to the Southem California Public Power Authority, a beneficiary named in [name ofbank] Letter
of Credit No.
Except so far as otherwise expressly stated herein, this Letter of Credit is subject to the "Uniform
Customs and Practices for Documentary Credits," (2007 Revision) of the Intemational Chamber
of Commerce Publication No. 600 (the "Uniform Customs"). As to matters not govemed by the
Uniform Customs, this Letter of Credit shall be governed by and construed in accordance with
the laws of the State of Califomia. Any litigation arising out of, or relating to this Letter of
Credit, shall be brought in a State or Federal court in the County of [ | in the State
of California. The Parties irrevocably agree to submit to the exclusive jurisdiction of such courts
in the State of California and waive any defense of forum non conveniens.
This Lefter of Credit sets forth in full our undertaking, and such undertaking shall not in any way
be modified, amended, amplified or limited by reference to any document, instrument or
agreement referred to herein, except for Exhibit I, II, lll and IV hereto and the notices referred to
herein; and any such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except as otherwise provided in this paragraph.
Communications with respect to this Letter of Credit shall be in writing and shall be addressed to
us at the address referred to above, and shall specifically refer to this Letter of Credit no.
Yours faithfully,
(name ofissuing bank)
ATTACHMENT C
POVVER SALES AGREEMENT
By_
Title
Appendix E, - 3
EXHIBIT I
DEMAND FOR PAYMENT
Re: lrrevocable and Unconditional Standby Letter of Credit
No.
flnsert Bank Address]
Dated 20-
To Whom It May Concem:
Demand is hereby made upon you for payment to us of$- by deposit to our
account no. at [insert name ofbankl. This demand is made under, and is subject to
and govemed by, your Irrevocable and Unconditional Standby Letter of Credit no.
dated , 20- in the amount of $ established by you in our favor for the
account of
DATED:
as the Applicant.
20
SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY
By
Tide
AppendixE-4 ATTACHMENTC
POWER SALES AGREEMENT
EXHIBIT II
STATEMENT
Re: Your Inevocable and Unconditional Standby Letter ofCredit
Dated _, 20_
Insert Bank Address]
To Whom lt May Concem:
Reference is made to your lrrevocable and Unconditional Standby Letter of Credit no.
, dated 20 in the amount of $
established by you in our favor for the account of as the Applicant.
We hereby certify to you that $is due, owing and unpaid to us by the
Applicant in that certain [DESCRIBE AGREEMENT].
DATED:20
SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY
By
Title
AppendixE-5 ATTACHMENTC
POWER SALES AGREEMENT
No.
EXIIIBIT III
AMENDMENT
Re: Irrevocable and Unconditional Standby Letter ofCredit
No.Dated
Beneficiary:
Southem California Public Power Authority
I 160 Nicole Court
Glendora, CA91740
Applicant:
To Whom It May Concern:
The above referenced Irrevocable and Unconditional Standby Letter of Credit is hereby
amended as follows: by increasing / decreasing / leaving unchanged (strike two) the stated
20-
amount by $
extending the Expiration Date to
to a new stated amount of $
fiom
or by
. All
other terms and conditions of the Letter of Credit remain unchanged.
An amendment is effective only when accepted by the Southem Califomia Public Power
Authority, below.
Dated:
Yours faithfully,
(name of issuing bank)
By
ACCEPTED
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AppendixE-6 ATTACHMENTC
POWER SALES AGREEMENT
Title
By_
Title
Date
EXHIBIT TV
SURRENDER
Re: Your lrrevocable and Unconditional Standby Letter ofCredit
Dated _, 20
flnsert Bank Address]
Notice of Surrender ofLetter of Credit
Date:
Attention: Letter of Credit Department
Ladies and Gentlemen:
We refer to your above-mentioned Irrevocable and Unconditional Standby Letter of Credit (the
"LgE9I_ArcI9d('). The undersigned, an authorized signer of the Southem Califomia Public
Power Authority, hereby surrenders this Letter of Credit to you for cancellation as ofthe date set
forth above. No payment is demanded ofyou under this Letter of Credit in connection with this
surrender.
Very truly yours,
SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY
By.
Title
Appendix E-7 ATTACHMENT C
POWER SALES AGREEMENT
APPENDIX F
TO POWER PURCHASE AGREEMENT'
DATED AS OF JULY 16,2OT5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
INSURANCE
I. GENERALREQUIREMENTS
Within ten (10) days after the Effective Date, Seller shall fumish Buyer evidence of commercial
automobile liability, commercial general liability, excess liability, and workers' compensation
coverage meeting the requirements set forth in this Appendix F from insurers acceptable to
Buyer and in a form acceptable to the risk management section of the project manager for Buyer
or acceptable to Buyer's agent for this purpose. Such insurance shall be maintained by Seller at
Seller's sole cost and expense. Prior to the date on which each of Builders' Risk, Property All
Risk and Professional Liability insurance is required to be obtained, Seller shall furnish Buyer
evidence ofcoverage meeting the requirements of this Aooendix F.
Such insurance shall not limit or qualifi the liabilities and obligations of Seller assumed under
this Agreement. Buyer shall not by reason of its inclusion under these policies incur liability to
the insurance carrier for payment of premium for these policies.
Any insurance carried by Buyer which may be applicable shall be deemed to be excess insurance
and Seller's insurance is primary for purposes under this Agreement despite any conflicting
provision in Seller's policies to the contrary.
Such insurance shall not be canceled or reduced in coverage or amount without first giving thirty
(30) days' prior notice thereof (ten ( l0) days for non-payment of premium) by registered mail to
Executive Director, Southern Califomia Public Power Authority, I160 Nicole Court, Glendora,
cA91740.
Should any portion ofthe required insurance be on a "Claims Made" policy, Seller sha[], at the
policy expiration date following completion of work, provide evidence that the "Claims Made"
policy has been renewed or replaced with the same limits, terms and conditions of the expiring
policy, or that an extended discovery period has been purchased on the expiring policy at least
for the contract under which the work was performed.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix F-l
SPECIFIC COVERAGES REQUIRED
A. CommercialAutomobileLiability
Seller shall provide Commercial Automobile Liability insurance which shall include
coverages for liability arising out of the use of owned (if applicable), non-owned, and
hired vehicles for performance ofthe work by Seller or its officers, agents, or employees,
as required, to be licensed under the Califomia or any other applicable state vehicle code.
The Commercial Automobile Liability insurance shall have not less than $1,000,000.00
combined single limit per occurrence and shall apply to all operations ofSeller.
The Commercial Automobile Liability policy shall include Buyer, its members, and their
officers, agents, and employees while acting within the scope of their employment, as
additional insureds with Seller, and shall insure against liability for death, bodily injury,
or property damage resulting from the performance of this Agreement by Seller or its
oflicers, agents, or employees. The evidence of insurance shall be a form acceptable to
Buyer's risk management agent.
B. Commercial General Liability
Seller shall provide Commercial General Liability insurance with Blanket Contractual
Liability, lndependent Contractors, Broad Form Property Damage, Premises and
Operations, Products and Completed Operations, fire, Legal Liability and Personal Injury
coverages included. Such insurance shall provide coverage for total limits actually
arranged by Seller, but not less than $10,000,000.00 combined single limit per
occurrence. Should the policy have an aggregate limit, such aggregate limits should not
be less than double the Combined Single Limit. Umbrella or Excess Liability coverages
may be used to supplement primary coverages to meet the required limits. Evidence of
such coverage shall be a form acceptable to Buyer's risk management agent, and shall
provide for the following:
l. Include Buyer and its officers, agents, and employees as additional
insureds with the Named Insured for the activities and operations
of Seller and its offrcers, agents, or employees under this
Agreement.
2. Severability-ofJnterest or Cross-Liability Clause such as: '.The
policy to which this endorsement is attached shall apply separately
to each insured against whom a claim is made or suit is brought,
except with respect to the limits of the company's liabitity."
3. A description ofthe coverages included under the policy.
C. Excess Liability
Seller may use an Umbrella or Excess Liability Coverage to meet coverage limits
specified in this Agreement. Seller shall require the carrier for Excess Liability to
properly schedule and to identifu the underlying policies on an endorsement to the policy
ATTACHMENT C
POWER SALES AGREEMENT
Appendix F-2
acceptable to Buyer's risk management agent. Such policy shall include, as appropriate,
cou"iug" for Commercial General Liability, Commercial Automobile Liability,
Employer's Liability, or other applicable insurance coverages.
D. Workers'Compensation/Employer'sLiabilitylnsurance
Seller shall provide Workers' Compensation insurance covering all of Seller's employees
in accordance with the laws of any state in which the work is to be performed and
including Employer's Liability insurance and a Waiver of Subrogation in favor ofBuyer.
The limit for Employer's Liabitity coverage shall be not less than S1,000,000.00 each
accident and shall be a separate policy if not included with Workers' Compensation
coverage. Evidence of such insurance shall be a form of Buyer Special Endorsement of
insurance or on an endorsement to the policy acceptable to Buyer's risk management
agent. Workers' Compensation/Employer's Liability exposure may be self-insured
provided that Buyer is furnished with a copy of the certificate issued by the state
authorizing Sellerto self-insure. Seller shall notify Buyer's Risk Management Section by
receipted delivery as soon as possible ofthe state withdrawing authority to self-insure.
E. Builders' Risk
Prior to commencing Site construction activities, Seller, or Seller's EPC Contractor, shall
provide Builder's Risk insurance, which shall be ofthe "all risk" type, shall be rwitten in
completed value form, and shall protect Seller, the Southem Califomia Public Power
Authority, the Board of Directors, and Buyer's members against risks of damage to
buildings, structures, and materials and equipment whether on site or in transit from any
location worldwide. Outside of the United States, this transit insurance requirement may
be satisfied by the purchase ofa global marine specific policy, ifapplicable. The amount
of such insurance shall be not less than the insurable value of the work at completion.
Buyer shall be a named additional insured on the policy. The Builder's Risk insurance
shall provide for losses to be payable to Seller and the aforementioned additional insured,
as their interests may appear. The policy shall contain a provision that in the event of
payment for any loss under the coverage provided, the insurance company shall have no
rights of recovery against Seller and the aforementioned named additional insured. The
Builders' Risk policy shall insure against all risks of direct physical loss or damage to
property from any cause including testing, ensuing loss, commissioning, and, to the
extent available in the insurance market on generally commercially reasonable terms,
earthquake and flood, provided, that should Seller determine that either earthquake or
flood coverage is not available on generally commercially reasonable terms as aforesaid,
Seller shall notify Buyer not less than thirty (30) days in advance of the date when such
coverage will not, or will no longer, be available together with a description of Seller's
efforts to obtain such coverage and an explanation of the basis for Seller's determination
in reasonable detail. The policy shall be in full force and effect until the earlier of: (l) the
Commercial Operation Date or the substantial completion of the Facility, whichever date
is the later, or (2) the effective date of the Property All Risk Insurance referenced below.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix F-3
F. Property All Risk Insurance
Seller shall procure and maintain an All Risk physical Damage policy to insure the full
replacement value ofthe property located at Facility as describid in this Agreement. Thepolicy shall include coverage for expediting expense, extra expense, Business
Intemrption, ensuing loss from faulty workmanship, faulty materials, or faulty design.
This policy shall be obtained and placed in full force and effect prior to the expiration of
the Builder's Risk Policy. This policy shall have the same insureds, and all losses shall
be payable in the same manner, as provided for the Builders, Risk policy in paragraph
II.E.
G. ProfessionalLiability
Prior to the commencement of work by Seller's EpC Contractor under Seller,s
engineering, procurement and construction contract for the Facitity, and subject to the
following paragraph, Seller shall provide (or cause its Epc contractor to provide)
Professional Liability insurance with contractual liability coverage included covering
Seller's (or such EPC Contractor's, as applicable) Iiability arising from errors anJ
omissions made directly or indirectly during the execution of this Agreement (or the
engineering, procurement and construction contract, as applicable) and shall provide
coverage for the total limits actually arranged by Seller, but not less than $1,000,000.00,
combined single limit. Such policy shall be maintained for not less than three (3) years
after the commercial operation Date under this Agreement. Evidence ofl such insurance
shall be in the form of a special endorsement of insurance and shall include a waiver of
Subrogation in favor of Buyer, its officers, agents and employees.
The Parties agree to confer in good faith prior to the hiring ofSeller's Epc contractor (i)
to determine whether the preceding requirement for professional Liability insurance is
reasonably necessary to be included in this Agreement to protect Buyer or the Buyer's
Members consistent with Prudent Utility practices and (ii) to modifu (or eliminate) such
requirement as mutually agreed to be appropriate based on the foregoing standard in
clause (i).
ATTACHMENT C
POVWR SALES AGREEMENT
Appendix F4
APPENDIX G
TO POWER PURCHASE AGREEMENT'
DATED AS OF JULY 16,2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR 1, LLC
OUALITY ASSURANCE PROGRAM
Seller shall implement a Quality Assurance ("Q/A") Program to ensure that the performance of
the Facility fulhlls the Requirements. The Q/A Program shall provide assurance that the Facility
will comily with the Requirements and the manufacturers' or suppliers' requirements for
successfu I operation of the Facility.
Quality at Seller
Seller believes that quality is the unit of measure for assessing fulfillment of project goals. A
quality project meets or exceeds the contract requirements and accepted standards ofprofessional
ina industry practice. Furthermore, high quatity projects are those that address client and
societal needs more successfully than "low" quality projects. While this may seem like a
straightforward definition, the process to ensure quality is much more involved and includes
quality management, quality planning, quality control, quality assurance' a quality system, and
total quality management.
..Quality assurance" refers to a process that reduces the potential for error throughout the phases
of a pioject. On projects with a Q/A Program, the chances of producing a poor quality
deliverabie are substantially reduced. Quality control procedures are an integral part of quality
assurance. Historically, industry has used the term "quality control" to indicate a checking
procedure for verifiing the quality ofdeliverables. This checking commonly occurs at the end of
ih" pro"".r, long after an elror may have been made and compounded by subsequent work'
Whiie quality control checks at the end of a project are an essential exercise, scheduled periodic
reviews at each phase of project conceptual and final design are integral to Seller's Q/A
Program. In addition, quality maintenance which meets or exceeds manufacturers' or suppliers'
requirements and best industry practices must be an integral part ofSeller's Q/A Program'
The Quality Management Process
The surest way to achieve satisfactory quality is to adhere to a proven quality process. The term
,.quality,, -ori u""r*t"ly refers to a project's ability to satisfy needs when considered as a whole
and each part of the process meets or exceeds the standards of Prudent Utility Practices.
Seller's project management team is responsible for proactivety planning and directing the
quality ofthe work process, services, and deliverables. Seller's project management team targets
the following areas to monitor quality:
ATTACHMENT C
POWER SALES AGREEMENT
Appendix G- l
l) A written Q/A Manual.
2) Independent engineering review ofthe entire project process, from design review
through Commercial Operation.
3) A written maintenance manual for the Facility for the duration of the commercial
operation that complies with the maintenance manuals ofthe manufacturers and
suppliers from whom Seller has purchased equipment and/or material and best
industry practices.
Q/A Manual
The idea of a Q/A manual is to incorporate quality assurance in all areas of project execution.
Seller has found that quality needs to be institutionalized into the project process, not only in the
budgeting process, but everywhere. For example, specific tasks and duties need to be allocated
to specific individuals; roles and interlace points need to be clearly defined; individual
assignments need to be realistic; special attention needs to be paid to complex areas within
projects; schedules need to be realistic and achievable; and lastly the work culture needs to be
enjoyable and open so that employees are empowered to react quickly to symptoms of quality
problems before they actually manilest.
Seller's quality program shall be documented in a Quality Assurance manual (the "e/A
Manual"). The form and the format of the Q/A Manual shall be developed by Seller, but must
comply with Prudent Utility Practices and follow manufacturers' and suppliers'
recommendations without deviation. The content of the Q/A Manual shall provide written
descriptions of policies, procedures and methodology to accomplish a quality project. Seller
shall submit three (3) copies of the Q/A Manual within ninety (90) days after the Effective Date
to Buyer or Buyer's Authorized Representative. The Q/A Manual shall be kept current by Seller
throughout the term of this Agreement through the submittal of revisions, as appropriate, by
Seller to Buyer or Buyer's Authorized Representative.
The Q/A Manual shall describe the authority and the responsibility of the Persons in charge of
the Q/A Program and inspection activities. Furthermore, it shall provide the plan and strategy
for quality control and review during the construction period. The Q/A Manual shall strive, at a
minimum, to define control procedures or methods to assure the following:
(a) The design documents, drawings, specifications, Q/A procedures, records,
inspection procedures and purchase documents are maintained to be current,
accurate and in compliance with all applicable law.
(b) The purchased materials, equipment and services comply with the Requirements.
(c) The materials received at the site are inspected for compliance with specifications.
(d) The subcontracted work is adequately inspected by third parties as necessary.
(e) Proper methods are employed for the qualification of personnel who are
performing work for the construction of the Facility.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix G-2
(0 Proper documentation, control and disposition of nonconforming equipment and
materials is maintained.
(g) Proper records are kept and available following project completion to ensure
accurate documentation of as-built conditions'
(h) Detailed and complete plan for maintenance and operation during commercial
operations consistent with manufacturers' and suppliers' recommendations and
best industry practices.
Conceptual Design Review
Seller has a team ofprofessionals who develop and review conceptual design. The team consists
of specialists in land-use and planning, permitting, meteorology, engineering, constniction,
project management, and finance. A preliminary site plan is developed in order to assess the
solar resource, project constructability, site access, cultural and biological impact, land use
restrictions, and landowner requirements. At this stage, the site plan is reviewed, modified as
necessary, and used to begin the permitting and public review process. The site plan may be
further modified based on comments received during the permitting and public review process.
Subsequent to this phase, final third party engineering will commence.
Final Engineering Design
Third party engineering firms, licensed to practice in the state in which the project is to be
constructed, will commence the detailed design necessary for the permitting and construction of
the Facility. Each firm will have its own quality assurance and quality control procedures,
however, Seller and a third party independent engineer will review the final work products to
ensure conformance with this Agreement. When Seller and third party independent engineer
have completed a multiple phase review process, and all comments have been addressed, the
design is considered final and ready for construction permitting.
During the final engineering design process, geotechnical studies will be finalized as needed. If
existing subsurface conditions are different from anticipated, the design may be modified to
account for any variances. Any changes of this nature will be documented in as-built design
drawings and approved in advance by Seller.
Quality Assurance at the Construction Site
Seller will hire a third party general contractor to construct the project. The contractor will be
required to have a quality assurance program implemented by its own staff, and utilizing third
party inspectors as necessary. The primary areas of focus are assuring conformance of
construction to design drawings, conformance of materials to specifications, and to ensure
prudent industry standards and best practices are being utilized. The contractor will be required
to provide third party inspection and testing as necessary. The contractor will also be required to
maintain a set of drawings during the course ofconstruction, which will be used to document any
changes to the design documents. Proposed project changes would be reviewed and approved in
the fietd by Seller's construction management team prior to implementation.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix G-3
The contractor will provide the required oversight and training of its installation crew to ensure
the construction ofthe Facility meets its quality guideliner. As n"""ssary, equipment supplierswill have technical advisors on site to inspect, advise, and sign off on instailation means and
methods. In addition, Seller will have its own construction management team on site consistingofa construction manager and quality inspectors who will observe performance of all areas of
the work and ensure compliance with design documents and e/A procedures. The contractor
and appropriate equipment suppliers will commission the Facility per prudent industry standards,
equipment specifications, and utility requirements. prior to construction completion, a punchlist
will be developed by the contractor, Seller, Seller's representatives, and third party independent
engineer. This punchlist is maintained by the contractor, and is signed off by Sellir upon
completion ofall punchlist items. Lastly, the independent engineer will perform periodic audits
during construction to oversee critical items, confirm construction progress, and provide
independent reporting and assessments to the project stakeholders.
Following completion of the project, the contractor will be required to provide to Seller as-built
design drawings, record of all testing documentation, and final permit approvals. This
documentation will be maintained at the project site during operations ofthe Facility.
Quality Assurance During Commercial Operations
Seller shall supply a Quality Assurance Plan for Buyer's review and approval no less than sixty(60) days prior to the anticipated commercial operation Date. Upon receipt of eualityAglSance Plan, Buyer shall provide written approval, such approval not to be unreasonably
withheld, or comment within ten (10) Business Days.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix G-4
APPENDIX II
TO POWER PURCHASE AGREEMENT'
DATED AS OF JULY 16,2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR 1, LLC
OT]ALIFIED OPERATORS
Sustainable Power Group LLC
FTP Power LLC
Signal Energy, LLC
First Solar Electric (California) lnc.
NRG Energy, Inc.
SunPower Corporation
Zachry Holdings, Inc.
Swinerton Builders. Inc.
AMEC Kamtech lnc.
lberdrola Renewables, LLC
EDF Renewable Services, lnc.
Fluor Facility and Plant Services, lnc.
SunEdison, Inc.
Appendix H-l ATTACHMENT C
POWER SALES AGREEMENT
APPENDIX I
TO POWER PURCHASE AGREEMENT,
DATED AS OF JULY 16, 2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR I, LLC
MILESTONE SCHEDULE
No.Guaranteed Date Milestone Descriotion Dailv Liouidated
Damages
I Ten (10) days after the
Effective Date
Seller has delivered all
certificates and other
documents required to
establish that Commercial
Automobile Liability,
Commercial Ceneral
Liability, Excess Liability
and Workers'
Compensation/Employer's
Liability Insurance
meeting the requirements
of the Agreement and
Apoendix F is in full force
and effect
2.Thirty (30) days after the
Effective Date
Seller has delivered the
Development Security
J.June 29. 2015 Seller has delivered to
Buyer a CEC pre-
certification form duly
approved by the CEC.
4.September 30, 201 5 Seller has achieved the
Environmental
Compliance Milestone
$5,000 per day
5.March 31. 2016 Seller has executed and
delivered copies ofthe
Site Control Documents
and has obtained Site
Control
$5,000 per day
6.March 31, 2016 Seller has entered into a
Subcontract for the
engineering, procurement,
and construction ofthe
Facility that satisfies the
Appendix I-l ATTACHMENT C
POWER SALES AGREEMENT
No.Guaranteed Date Milestone Description Dailv Liquidated
Damagcs
requirements set forth in
the Agreement and has
delivered a copy of such
Subcontract to Buyer
(with confidential or
proprietary information
redacted at Seller's
discretion).
7.March 31. 2016 Seller has executed
construction financing
documents for the
financing ofthe
construction of the
Facility.
8.June l, 2016 Seller has obtained all
Permits set forth on
Appendix B-l (which
shall be final and non-
appealable), excluding all
Permits not yet required
for Seller's operation of
the Facility but that are
reasonably expected to be
obtained in due course.
55,000 per day
9.June 15, 2016 Seller has achieved the
Construction Start Date.
$5,000 per day
10.December 15. 20 l6 Seller has achieved initial
synchronization ofthe
Facility.
lt December 3 l, 2016 Commercial Operation
Date
$ 10,000 per day
ATTACHMENT C
POVVER SALES AGREEMENT
Appendix l-2
l.
APPENDIX J
TO POWER PURCHASE AGREEMENT,
DATED AS OF JULY 16,2Or5
BETWEEN
SOUTHERN CALIFOR]\IIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
AUTHORIZED R.EPRESENTATIVES:
Authorized Representative. The initial Authorized Representatives ofBuyer and Seller
pursuant to Section l4.l are as follows:
Buver:
Executive Director
Southem California Public Power Authoritv
I 160 Nicole Court
Glendora, CA 91740
Telephone: (626) 793-93 64
Facsimile: (626) 7 04-9461
Email: bcamahan@scppa.org
Seller:
Antelope DSR l, LLC
Attention: Operations & Maintenance
Telephone: 435-421 -9022
Facsimile: 80 l -679-350 I
Email: radams@spower.com
Billings. Billings and payments pursuant to Article XI and Aopendix A shall be
transmitted to the following addresses:
2.1 If Billine to Buyer:
Southem California Public Power Authority
I 160 Nicole Court
Glendora" CA, 91740
Attention: Accounts Payable
Telephone: (626) 793-9364
Facsimile: (626) 7 04-9461
Email: voates@scppa.org
ATTACHMENT C
POWER SALES AGREEMENT
l.t
1.2
2.
SCHEDULING CONTACT INFORMATION
Appendix J- I
3.
2.2 lf Pavment to Buver:
Southem California Public Power Authority
I 160 Nicole Court
Glendora CA 91740
Attention: Accounts Payable
Telephone: (626) 7 93 -9364
Facsimile: (626) 7 04-9461
Email: voates@scppa.org
2.3 If Pavment or Billing to Seller:
Antelope DSR I, LLC
Controller
Attention: Accounts Receivables
Telephone: 801 -679-3512
Facsimile: 80 l -679-3501
Email: rliddell@sPower.com
Notices. Unless otherwise specified by Buyer all notices (other than Scheduling notices,
curtailment notices, and Deemed Generated Energy notices):
lfto Buyer:
Southem California Public Power Authority
c/o Executive Director
I 160 Nicole Court
Glendora. CA 91740
Telephone: 626-7 93 -9364
Facsimile: 626-793 -9461
Email: shomer@scppa.org, knguyen@scppa.org, and bcamahan@scppa.org
If to Seller:
Antelope DSR I, LLC
Attention: General Counsel's Office
Telephone: 801 -67 9-35 12
Facsimile: 801 -679-350 I
Email : smcbride@spower.com
ATTACHMENT C
POVWR SALES AGREEMENT
Appendix J-2
l
4.schedulers. Unless otherwise specified by Buyer, all notices related to Scheduling ofthe
Facility shall be sent to the following address:
If to Buver:
Southem Califomia Public power Authority
c/o Executive Director
I 160 Nicole Court
Clendora, CA 91740
Telephone: 626-7 93 -93 64
Facsim ile : 626-7 93 -946 1
Email: shomer@scppa.org, knguyen@scppa.org, and bcamahan@scppa.org
lf to Seller:
Antelope DSR l, LLC
Attention: Operations & Maintenance
Telephone : 43 5 42 I -9022
Facsimile: 801 -679-3501
Email: radams@spower.com
curtailments, All notices related to curtailments of the Facility pursuant to Section 7.5
shall be sent to the following address:
If to Buver:
Southern Califomia Public Power Authoritv
c/o Executive Director
I 160 Nicole Court
Glendora, CA 91740
Telephone: 626-7 93 -93 64
Facsimile: 626-793-9461
Email: shomer@scppa.org, knguyen@scppa.org, and bcarnahan@scppa.org
If to Seller:
ANTELOPE DSR I, LLC
Attention: Operations & Maintenanc
Telephone: 435 421 -9022
Facsimile: 801 -679-3501
Email: radams@spower.com
ATTACHMENT C
POWER SALES AGREEMENT
5.
Appendix J-3
Deemed Generated Enerry. Unless otherwise specified by Buyer, all notices related to
calculations of Deemed Generated Energy shall be sent to the following address:
lf to Buver:
Southem Califomia Public Power Authority
c/o Executive Director
I 160 Nicole Coun
Glendor4 CA 91740
Telephone: 626-793-9364
Facsimile: 626-7 93 -9461
Email: shomer@scppa.org, knguyen@scppa.org, and bcamahan@scppa'org
lf to Seller:
Antelope DSR l, LLC
Attention: Operations & Maintenance
Telephone: 435 421 -9022
Facsimile: 801 -679-350 I
Email: radams@spower.com
ATTACHMENT C
POWER SALES AGREEMENT
Appendix J-4
APPENDIX K
TO POWER PURCHASE AGREEMENT,
DATED AS OF JULY T6,2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
FOR]VI OF OPTION AGREEMENT
This Purchase Option Agreement (this ..Agreemena,,) is made as of , 2015 (the
"Effective Date"), by and between Antelope DsR I, LLC, a Delaware limited liability company
("Developer"), and the Southern Califomia public power Authority (.SCppA), a joint powers
agency and a public entity organized under the laws of the State of Califomia and created under the
provisions ofthe California Joint Exercise ofPowers Act flound in Chapter 5 of Division 7 of Title I of
the Govemment Code of the State of Califomia, beginning at Califomia Govemment Code Section
6500, et. seq., (the "Act"), and that certain Southern Califomia Public Power Authority Joint Powers
Agreement entered into pursuant to the provisions of the Act among SCppA and SCppA's members,
dated as of November l, 1980. Developer and SCPPA are sometimes hereinafter individually or
collectively called a "Party" or the "Parties".
WHEREAS, Developer and SCPPA are party to that certain Power Purchase Agreement, dated
as of I I (the "PPA"). Terms used but not defined herein shall have the respective meanings
given in the PPA.
WHEREAS, pursuant to the PPA, Developer is developing the Facility, a solar photovoltaic
power generating facitity to be located at the Site, and SCPPA will purchase the energy, capacity rights
and environmental attributes from the Facility.
WHEREAS, Developer has agreed to offer SCPPA the option to purchase the Facility on the
terms provided herein, and SCPPA has agreed to accept such option to purchase.
WHEREAS, pursuant to the PPA, the Parties have agreed to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein
by this reference, SCPPA entering into the PPA, the covenants and agreements herein contained, and
other good and valuable consideration, (the receipt and adequacy of which is hereby acknowledged by
the Parties), the Parties, intending to be legally bound, hereto agree as follows:
I. OPTIONTOPURCHASEFACILITY.
l.l Grant of Purchase Option. Developer hereby gives and grants SCPPA an irrevocable
right and option, to be exercised in its sole discretion, to purchase all ofthe Developer's right, title, and
interest in and to the Facility on the terms set forth herein (the "Purchase Option';) (the oicurrence of
the transfer of the Facility, the "closing"). So long as no Default by SCppA has occurred and is
continuing under the PPA, SCPPA may exercise the Purchase Option, with the transfer ofthe Facility
to occur on or about either the tenth (lOth), fifteenth (l5th) or twentieth (20th) anniversary of the
commercial operation Date (each, a "purchase option Date"). Deveiopei acknowledges that
Appendix K-l
ATTACHMENT C
POWER SALES AGREEMENT
SCPPA has no obligation to exercise the Purchase option and that scPPA may decline to exercise the
Purchase Option foi any or no reason, as SCPPA deems appropriate in its sole discretion.
1.2 Determination of Purchase Price'
(a)FairMarketValue.SCPPAmay,onoratanytimewithintwohundredten
(210) days before each Purchase option Date (the "Purchase Price Notice Date"), request a
determination ofthe purchase price under the Purchase OpIion (the "Purchase Price")' The Purchase
price shall be the fair market value of the Facility determined in accordance with this Section 1.2;
orovided that the Purchase Price shall in no event be less than the applicable amount set forth on
e*f,iUit A. The fair market value of the Facility shall be the amount a willing buyer would pay for the
e*ifity *a all rights and interests associated therewith, in an arm's-length transaction, to a willing
seller under no compulsion to sell on the applicable Closing Date (as defined below), taking into
account all relevant facts and circumstances relating to the Facility, and assuming (a) delivery of the
expected generation for the then-remaining term of the PPA at the Contract Price, and (b) that the
failtity is aUle to generare revenue for the remaining useful life of the Facility at a price per MWh
equal io the then fair market price for Energy, Capacity Rights, Environmental Attributes and other
products generated by the Facility, as may adjusted due to any material casualty or other loss event,
ieal or threatened condemnation proceeding, or other material adverse event affecting all or any
portion of the Facility prior to and as of the Closing Date. If SCPPA disagrees with Developer's
determination of the fair market value, the Parties may meet and attempt to agree on a fair market
value.
(b) Independenl Appraiser. If the Panies are unable to agree on the fair market
value, the Parties shalljointly retain an independent appraiser to determine such fair market value (the
"Independent Appraiser"), SCPPA shall be responsible for the costs of the Independent Appraiser.
The lndependent Appraiser shall be an individual who is a member of a national accounting,
engineering or energy consulting firm qualified by education, experience, and training to determine the
value of solar generating facilities of the size and age and with the operational characteristics of the
Facility, and who specifically has prior experience valuing solar energy generating facilities. The
Independent Appraiser shall be reasonably acceptable to both Parties. Except as may be otherwise
ag."id by the Parties, the Independent Appraiser shall not be (or within three (3) years before his or
her appointment have been) a director, officer, or an employee of, or directly or indirectly retained as
consultant or adviser to, either of the Parties or their respective Affiliates. The lndependent Appraiser
shall make a determination ofthe Purchase Price within thirty (30) days after appointment (the "Price
Determination"). Upon making the Price Determination, the Independent Appraiser shall provide a
written notice thereof to both Developer and SCPPA, along with all supporting documentation
detailing the method of calculation of the Purchase Price. Except in the event of fiaud or manifest
error, th; Price Determination shall be a final and binding determination ofthe fair market value ofthe
Facility.
(c) Additional Appraisers. lf the Parties are unable to agree upon an lndependent
Appraiser within thirty (30) days after SCPPA submits a request for a determination of the Purchase
piiie under this Section I .2, then each of Developer and SCPPA shall select and retain an independent
appraiser meeting the requirements for an independent appraiser set forth in this Section 1.2. Each
P'arty shall .uur" itr app.uir". to make a determination of the Purchase Price within thirty (30) days.
Upon completion of the two appraisals, SCPPA and Developer shall deliver the results to each other.
Iithe purchase price determinations of the two independent appraisers vary by less than ten percent
Appendix K-2
ATTACHMENT C
POWER SALES AGREEMENT
(10%), the Price Determination shall be the simple average of the price determinations of the two
appraisals. If the variance is greater than ten percent (10%), the two independent appraisers shall
select a third independent appraiser meeting the requirements for an independlnt appraiser set forth in
this Section 1.2. or if the first two appraisers fail to agree upon a third appraiser'within fifteen (15)
days, a third independent appraiser shall be appointed by the American Arbitration Association("AAA) upon application of either Party in accordance with the applicable rules and regulations of
the AAA for such selection. The third appraiser shall select one ofthe appraisals generateJby the first
two appraisers within thirty (30) days of his retention and such resulting pricl shall be the price
Determination. If the third appraiser selects the appraisal originally gene.uGd by SCppA's appraiser,
Developer shall pay the fees and costs ofthe third appraiser. Ifthe third appraiser selects the afpraisal
originally prepared by Developer, SCPPA shall pay the fees of the third appraiser.
(d) Exercise of Purchase Option. lf SCPPA wishes to exercise the Purchase Option
following the Price Determination, it shall deliver an exercise notice (the "Exercise Notice;,) to
Developer within one hundred eighty (180) days after receipt of the Price Determination (the
"Exercise Period"). Any such exercise notice shall be irrevocable once delivered, subject to SCppA's
rights to not Close under Section 4. If SCPPA does not exercise the Purchase Option during the
Exercise Period, then the Price Determination shatl be null and void, and SCppA may not request a
new determination ofthe Purchase Price until the next purchase Option Date.
1.3 Terms and Date of Facility Purchase. The Parties shall consummate the sale of the
Facility to SCPPA no later than ninety (90) days following SCPPA's delivery of an Exercise Notice.
On the effective date of such sale (the "Closing Date"), (a) Developer shall surrender and transfer to
SCPPA all of Developer's right, title, and interest in and to all assets, properties, rights and interests of
every kind, nature and description (whether real, personal or mixed, whether tangible or intangible, and
wherever situated), operated, owned or leased by, or allocated to, Developer for or in connection with
the Facility and its intended purpose, operation, and function (other than any assets that SCPPA and
Developer have mutually agreed to exclude from the transfer and sale, collectively, the "Excluded
Assets") and shall retain all liabilities, and profits (including any Environmental Anributes), arising
from or relating to the Facility prior to and as of the Closing Date in accordance with Section 1.4;
(b) SCPPA shall pay the Purchase Price to Developer in readily available funds, and shall assume all
liabilities arising from or relating to the Facility after the Closing Date in accordance with Section 1.4;
(c) SCPPA shall pay all amounts incurred by SCPPA due to Developer under the ppA as of the
closing Date net of any amounts owed by Developer to SCppA thereunder; (d) both Developer and
SCPPA shall (i) execute and deliver a bill of sale and assignment ofcontract rights, together with such
other conveyance and transaction documents as are reasonably required to fully transfer and vest title
to the Facility in SCPPA, and (ii)deliver such ancillary documents, including releases, resolutions,
certificates, third-party consents and approvals, and such similar documents as may be reasonably
necessary to complere and conclude the sale of the Facility to SCppA; and (e) rhe ppA shall
automatically terminate. The purchase and sale of the Facitity shall be on an "as-is, where-is" basis,
except that Developer shall make representations and warraniies regarding title, auihority, and liens
and shall, prior to the closing Date, provide disclosures with specificity and in good iaith, to the
knowledge of Developer, regarding any actions, suits, arbitrations, procedures, and/or claims pending
or threatened against Developer or the Facility, which ifadversely determined, could adversely affeci
the Facility or result in a material liability to SCPPA. Developer shall, to the extent reasonably
possible, transfer or assign to SCPPA all manufacturer and third-party warranties with respect to the
ATTACHMENT C
POVWR SALES AGREEMENT
Appendix K-3
Facility or any part thereof. SCPPA shall pay all transaction and closing costs associated with exercise
ofthe Purchase Option.
1.4 Allocation of Liabilities. At the closing, SCPPA shall assume and agree to pay for,
perform, rrtnltlna aisctt-ge "t". me Closing, the liabilities and obligations relating to the Facility
ihut u." firrt required to be performed after the Closing or arising or occurring after the Clo.sing, other
than the Excluded Liabilitie; (collectively, the "Assumed Liabitities"). The Assumed Liabilities shall
include all liabilities and obligations under contracts which are assumed by SCPPA at the Closing
arising before the Closing Daie and becoming due after Closing Date; provided_ that the. Assumed
Liabil'ities shall not includi any liabilities arising out of a breach or default thereof by Developer prior
to the Closing Date. SCPPA shall not assume, and shall not be deemed to have assumed, and shall
have no liability with respect to (whether asserted before or after the Closing and regardless of whether
the same or thsbasis therefor may have been disclosed to SCPPA by Developer or otherwise be known
to SCPPA), any liabilities or obligations of any nature, fixed or contingent or known or unknown
related to ine facility other than as specifically set forth in this Section 1.4 (with all such unassumed
obligations referred to in this Agreement as the "Excluded Liabitities"). without limiting the
generality of the preceding sentence, SCPPA shall have no liability with respect to any of the
Iollowing liabilitiei or obligations (whether asserted before or after the Closing and regardless whether
the samJor the basis therefor may have been disclosed to SCPPA by Developer or otherwise be known
to SCPPA), all of which are included in the Excluded Liabilities:
(a) Any liability or obligation of Developer in respect of taxes attributable to the
Facility for taxable periods ending on or prior to the Closing, including any supplemental tax liability
related to activity at the Facility conducted on or before the Closing that arises after the Closing;
(b) Any liability or obligation ofDeveloper relating to the Facility, including arising
out of Developer's ownership and operation of the Facility, arising or occurring on or prior to the
Closing;
(c) Any liability or obligation of Developer with respect to the employment or
termination ofany employee or group ofemployees by Developer, or the terms thereof, whether union
or nonunion, whether ihe liability or obligation calls for performance or observance before or after the
Closing and whether the liabiliry or obligation arises from a collective bargaining agreement, pension
trust fund plan, or other agreement or arrangement to which Developer is a party or by which
Developer is bound (whether oral or written and whether express or implied in fact or in law) or any
past practice or custom or otherwise:
(d) Any liability or obligation of Developer for pension fund payments or unfunded
pension fund Iiabilities;
(e) Any liability or obligation arising from or associated with any of the Excluded
Assets;
(0 Any liability or obligation of Developer or its Affiliates to a third party arising
from any indemnification claim, injury to or death of any person or damage to or destruction of any
property, whether based on negligence, breach of warranty, strict liability, enterprise liability or any
ttnir tegat or equitable theory iriiing fiom actions by, for or on behalf of Developer or its Affrliates
arising on or prior to the Closing; and
Appendix K-4
ATTACHMENT C
POWER SALES AGREEMENT
(g) Any liability or obligation of Developer or its Affiliates arising solely in
connection with the Facility secured by a Lien of a Facility Lender, including principal o-f, pr".i*
and interest on indebtedness, fees, expenses or penalties, amounts due upon accileration, prepayment
or restructuring, or benefit monetization, swap or interest rate hedging bieakage costs and anr;laimsor interest due with respect to any of the foregoing, and specifica y exc'iuding any obiigations
associated with any equity investment or Tax Equity Financing provided io Developer, oiany affiliate
ofDeveloper, to support the development, construction and opeiation ofthe Faciliti (,.Facilily Debf'),
or Liens or encumbrances other than those permifted in writing by SCppA at the cioiing.
2' AQCESS AND DUE DILIGENCE. Between the Purchase Price Notice Date and the Closing
Date (such period, the "Applicable Diligence period"), upon reasonable advance notice, Developeiwill (a) afford SCPPA and its representatives (and the lndependent Appraiser) full and complete access
during normal business hours to the Facility and to Developer's personnel, any and ail contracts,
permits, books and records, properties, design schematics, blueprints or other similar documents, and
any other documents and data (provided that SCPPA shall observe, and shall cause its representatives
to observe, all of Developer's security protocols), (b) furnish SCPPA and SCPPA's representatives
(and the Independent Appraiser) with copies of all such documents and data as SippA or the
Independent Appraiser may reasonably request, and (c) fumish SCPPA and its representatives (and the
Independent Appraiser) with such additional financial, operating, and other data and information in
Developer's possession or to which Developer has access as SCPPA and its representatives (and the
lndependent Appraiser) may reasonably request. During the Applicable Diligence period, upon
reasonable advance notice (but not less than twenty four (24) hours), Developer;hall afford scppA
and its representatives (and the Independent Appraiser), with reasonable access to the Facility for the
purpose of inspecting the same, to conduct any perlormance tests or physical inspections or otherwise,
including to conduct a phase I environmental site assessment, in such manner so as not to materiallv
disturb or interfere with the normal operations of the Facility.
I OPERATIoN oF THE FACILITYT GONDUCT oF BUSINESS. During the Applicable
Diligence Period, Developer will conduct its business with respect to the Facility in iccordance with
the ordinary course ofbusiness consistent with past practices and Prudent Utility iractices. During the
Applicable Diligence Period, Developer shall not (a) sell or otherwise dispose ofor encumber any ofthe Facility assets or any other property or assets which are primarily related to the operation,
maintenance and use of the Facility (other than sales, leases, transfers or dispositions in the ordinary
course of business consistent with past practice and Prudent Utility Practices), or (b) except as may bi
required by their terms, and except in the ordinary course of business consistsnt with past practice,
modifo, subordinate, amend, terminate, cancel, sever or surrender, or permit or suffer the modification,
subordination, amendment, termination, cancellation, severance or surrender ofany contract, permit or
warranty, without the prior written approval of SCppA.
4. NOIIFICATION. During the Applicable Diligence period, Developer shall give prompt
notice (each notice, a "change Notice") to SCPpA ofthe occurrence or non-occurrence ofany event,
change, effect or development of any kind which could be reasonably expected to result in a: (a)
material adverse effect, or (b) breach of any of Developer's covenants under this Agreement. If
elected by SCPPA, the Purchase Price may be adjusted by an amount (as determined byihe parties ingood faith, or absenr their mutual agreement, by an Independent Appraiser uiing the same
methodology as set forth in Section l 2) to take into account each event desiribed in a Chinge Notice.
SCPPA shall have the right, but not the obligation, to either (i) terminate the purchase oftion with
ATTACHMENT C
POWER SALES AGREEMENT
Appendix K-5
respect to the applicable Purchase Option Date and elect not to purchase the Facility; provided,
howeuer, that such termination shall not affect SCPPA's right to exercise a Purchase Option with
respecr to a future date, or (ii) proceed with the Closing despite the existence ofthe Change Notice and
pay the Purchase Price, as such Purchase Price may be adjusted pursuant to this Section 4. subject to
the minimum purchase price in Exhibit A.
5. MISCELLANEOUS.
5.1 Representations and Warranties of SCPPA.
(a) SCppA is a validly existing California joint powers authority, and has the legal
power and authority to own its properties, to carry on its business as now being conducted and to enter
into this Agreem"nt, und to carry out the transactions contemplated hereby, and to perform and carry
out all covenants and obligations on its pan to be performed under and pursuant to this Agreement.
(b)Theexecution,deliveryandperformancebySCPPAofthisAgreement(i)have
been duly authorized by all necessary action, and does not and will not require any consent or approval
of such SCPPA's regulatory or goveming bodies, other than that which has been obtainedl provided
that further authorizations from such Buyer's regulatory or goveming bodies will be required for
SCPPA to exercise the Option; and (ii) does not violate any federal, state, and local law, including the
Califomia Govemment Code and similar laws.
(c) This Agreement constitutes the legal, valid and binding obligation of SCPPA
enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors' rights
generally or by general equitable principles, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
5.2 Representations and Warranties of Developer.
(a) Developer is a limited liability company duly organized, validly existing and in
good standing under the laws of its respective state of incorporation or organization and is qualified to
io business in the State of Califomiq and has the legal power and authority to own or lease its
properties, to carry on its business as now being conducted and (in the case of Developer) to enter into
this Agreement, and to carry out the transactions contemplated hereby and to perform and carry out all
covenants and obligations on its part to be performed under and pursuant to this Agreement.
(b) Developer has taken all corporate or timited liability company action required
to authorize the execution, deiivery, and performance of this Agreement, and Developer has delivered
to Developer (i) copies of all resolutions and other documents evidencing such corporate or limited
liability company actions, certified by an authorized representative of Developer as being true, correct,
and completi, una (ii) - incumbency certificate signed by the secretary of Developer certirying as to
the names and signatures ofthe authorized representatives of Developer.
(c) The execution, delivery and performance by Developer of this Agreement have
been duly authorized by all necessary organizational action, and do not require any consent or approval
other than those which have already been obtained.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix K-6
- (d) This Agreement constitutes the legal, valid and binding obligation of Developer
enforceable in accordance with its terms, except as such enforceability .uy 6" limlted by bankruptiy,
insolvency, reorganization or similar laws relating to or affecting the enforcement of crlditors, righis
generally or by general equitable principles, regardless of whethei such enforceability is considered in
a proceeding in equity or at law.
5.3 Survival' The rights of SCPPA under this Agreement and the Purchase Option shall beprior and superior to the rights of any Facility Lender and prior to and superior to the iights of any
other person or entity that subsequently acquires an interest in the Facility. Any perso-n or entity
acquiring the Facility or any interest therein of any nature (including, without limitation, via
foreclosure or deed-in-lieu of foreclosure by any Facility Lender) shall take the Facility subject to the
rights ofSCPPA to acquire the Facility.
5.4 Waiver of Consequential Damases. THE PARTIES AGREE THAT TO THEFULLEST EXTENT ALLOWED BY LAW, IN NO EVENT SHALL EITHER PARTY BE
RESPONSIBLE OR LIABLE, WHETHER IN CONTRACT, TORT, WARRANTY, OR UNDERANY STATUTE OR ON ANY OTHER BASIS, FOR SPECIAL, INDIRECT, INCIDENTAL,
MULTIPLE, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES OR DAMAGES FOR
LOST PROFITS OR LOSS OR INTERRUPTION OF BUSINESS, ARISING OUT OF OR IN
CONNECTION WITH THE FACILITY OR THIS AGREEMENT.
5.5 Assienment. SCPPA may from time to time and at any time assign any or all of its
rights, and delegate any or all of its obligations, under this Agreement, in whole oi in pi.t without the
consent of Developer to a Qualified Buyer Assignee that is also the assignei of the ppA.
Notwithstanding the foregoing, in connection with any such assignment, such eualified Buyer
Assignee shall execute a written assumption agreement in favor of Developer pursuant to which iny
such Qualified Buyer Assignee shall assume all the obligations of SCPPA under this Agreemenr,
thereby relieving the assignor SCPPA from its duties and obligations hereunder. Except as sit forth in
this &q!!en-5.:1 neither Party shall have the right to assign its rights or obligations under this
Agreement without the prior written consent of the other Party, which conient shall not be
unreasonably withheld, conditioned or delayed.
5.6 Modifications. No modification of this Agreement shall be effective unless set forth in
writing and signed by SCPPA and Developer.
5-7 Goveming Law and Venue. This Agreement and the Exhibits attached hereto shall be
govemed by and construed under the laws of the State of Califomia. The parties hereto agree that
venue for any action brought to enforce the terms of this Agreement shall be in the applicable courts of
the county of Riverside and the Parties hereby submit to thejurisdiction ofsuch courts.
5.8 Entire Asreement. The terms of this Agreement and the PPA constitute the entire
agreement between the Parties pertaining to the subject matter hereof. All prior or contemporaneous
agreements, representations, negotiations and understandings of the Parties conceming the subject
matter hereof, whether oral or written, are hereby superseded and merged herein.
5.9 Notices. All notices, consents, waivers, demands, requests or other instruments or
communications to be given by one Party to the other Party shall bi given in accordance with the
requirements for such instruments or communications set forth in the ppA.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix K-7
5.10 ppA Termination. If the PPA expires or is terminated for any reason whatsoever, then
the purchase O-ption *a tni. ngreement shall automatically terminate and be of no further force or
effect.
5.1I Severabilitv. In the event any ofthe terms, covenants or conditions of this Agreement,
or the application of any such terms, covenants or conditions, shall be held invalid, illegal or
un"nfo.c"uble by any court having jurisdiction, all other terms, covenants and conditions of this
Agreement una iheii application noi adversely affected thereby shall remain in force and effect,
piovided that the remaining valid and enforceable provisions materially retain the essence of the
Parties' originaI bargain.
5.12 Counterparts. This Agreement may be executed in counterparts and upon execution by
each signatory, each executed counterpart shall have the same force and effect as an original
instrum6nt ani as if all signatories had signed the same instrument. Any signature page of this
Agreement may be detached from any counterpart ofthis Agreement without impairing the legal effect
oiany signatuie thereon, and may be attached to another counterpart of this Agreement identical in
form hereto by having attached to it one or more signature pages.
5.13 No Partnershio. This Agreement shall not be interpreted to create an association, joint
venture or partnership between the Parties hereto or to impose any partnership obligation or liability
upon either Party. Neither Party shall have any right, power or authority to enter into any agreement or
undertaking for, or act on behalfof, or to act as an agent or representative of, the other Party.
5.14 Further Assurances. Upon the reasonable request of the other Party, the applicable
Party shall execute and deliver such further documents, instruments or conveyances and take, or cause
to be taken, all appropriate action of any kind (subject to applicable Requirements of Law) as may be
reasonably nec"iiury or advisable to carry out any of the provisions hereof and to otherwise
consummate and effectuate the transactions contemplated by this Agreement, all at the sole cost and
expense of the requesting Party. Upon SCPPA's request and without further consideration, Developer
or its Affiliates, as applicable, shall promptly do, execute, acknowledge and deliver all such further
acts, assurances and instruments of sale, transfer, conveyance, assignment and confirmation as are
reasonably required, and take all such other action as SCPPA may reasonably request in order to more
effectively (aj transfer, convey and assign the Facility Assets to SCPPA in accondance with the
provisioni set forth in this Agreement, (b) to the full extent permitted by applicable Requirements of
Lu*, put SCppA in actual possession of and confirm SCPPA's title to, all of Developer's right, title
and inierest in and to any assets related to the Facility, and (c) include within the Facility Assets, and
transfer, convey and assign to Developer, free and clear of all Liens other than Liens expressly
permitted by SCPPA in writing at the closing ofthe sale ofthe Facility Assets, any assets necessary for
ihe ownership, operation and maintenance ofthe Facitity that are held or owned by Developer or an
Affiliate ofDeveloper on or before the closing.
5.15 ExcePt as
otherwise specifically stated herein, this Agreement is independent of the PPA and, as-a separate
agreement, rhull .r*iu" the amendment or modification of the PPA. In the event ofa conflict between
tliis Agreement and the PPA, this Agreement shall control. Notwithstanding the foregoing, this
Agreerient shall not be deemed to limit Buyer's Right of First Offer or Right of First Refusal set forth
in the PPA.
ATTACHMENT C
POWER SALES AGREEMENT
Appendix K-8
. 5.16 EoBitable Remedies. The parties acknowledge that money damages may not be an
adequate remedy for violations of this Agreement by Seller and that Buyer may, iriits sole discretion,
seek and obtain from a court of competent jurisdiction specific performance or injunctive or such other
equitable relief as such court may deem just and proper to enio.ce this Agreement or to prevenr any
violation hereof. The Parties hereby waive any objection to specific performance or injunciive or other
equitable relief.
[Signature Page FollowsJ
ATTACHMENT C
POWER SALES AGREEMENT
Appendix K-9
Name:
Title:
IN WITNESS WHEREOF. the Parties have executed and delivered this Purchase Option
Agreement as of the Effective Date.
ANTELOPE DSR I. LLC
By:
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:
Appendix K-10
ATTACHMENT C
POWER SALES AGREEMENT
Name:
Title:
Purchase 0ption Date
l0 years
I 5 years
20
Minimum Purchase Price
882,390,142
s78,367,065
Exhibit A
Minimum Purchase Price
ATTACHMENT C
POWER SALES AGREEMENT
Appendix K-1
This certification (*CeniJicalion") of the construction start Date is delivered by Antelope
DSR l, LLC (-Sellei') to sourhem california Public Power Authority (" Buyer") in accordance
with the terms of that certain Power Purchase Agreement dated ("Agreemenf') by
and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise
defined herein shall have the respective meanings assigned to such terms in the Agreement.
Seller hereby certifies and represents to Buyer the following:
l. the engineering, procurement and construction contract related to the Facility was
executed on ;
2. the notice provided by Setler to EPC Contractor by which Seller authorizes the EPC
Contractoi to begin construction ofthe Facility without any delay or waiting periods was
APPENDIX L-l
TO POWER PURCHASE AGREEMENT'
DATED AS OF JULY 16' 2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR 1, LLC
issued on (attached); and
3. the Construction Start Date has occurred.
IN WITNESS WHEREOF, the undersigned has executed this Certification on behalf of Seller as
ofthe _ day of
ANTELOPE DSR T, LLC
ATTACHMENT C
POWER SALES AGREEMENT
By:
Its:
Appendix L- l -1
APPENDIX L-2
TO POWER PURCHASE AGREEMENT,
DATE,D AS OF JULY 16,2Or5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
This certification ("certification") of the commercial operation is delivered by [independent
engineerl (*Engineef') to Southem Califomia Public power Authority (,,Buyer,,) in accordance
with the terms of that certain Power Purchase Agreement dated (,,Agreemenf,) by
and between ANTELOPE DSR l, LLC and Buyer. All capitalized terms used in this
certification but not otherwise defined herein shall have the respective meanings assigned to
such terms in the Agreement.
4. Equipment sufficient to generate one hundred percent (100%) ofthe contract capacity of
the Facility has been erected in accordance with the equipment manufacturer's
specifi cations (" Initial Mechan ical Completion"),
5. The electrical collection system related to the Facility comprising the total installed
power capacity referenced in (l) above is substantially complete (subject to completion
of punch-list items), functional, and energized for the Facitity;
6. The substation for the Facility is substantially complete (subject to completion ofpunch-
list items) and capable of delivering the Facility Energy;
7. The Initial Commissioning completion (defined below) has been achieved for the
equipment that has achieved Initial Mechanical Completion; and
8. The Facility is opentional and interconnected with the cAlSo grid and released by the
CAISO for Commercial Operation and capable ofdelivering Facility Energy through the
permanent interconnection facilities for the Facility.
For purposes ofSection 4 above, "Initial commissioning Completion" means that the electrical
and control systems have been energized and tested in accordance with the equipment
manufacturer's specifi cations.
EXECUTED by IINDEPENDENT ENGINEERI
this _ day of 20
[INDEPENDENT ENGINEERI
Date:
ATTACHMENT C
POWER SALES AGREEMENT
By,
Its:
Appendix L-2-l
APPENDIX M.l
TO POWER PURCHASE AGREEMENT'
DATED AS OF JULY 16' 2OI5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
[RESERVEDI
Appendix M-l-l ATTACHMENT C
POWER SALES AGREEMENT
APPENDX M-2
TO POWER PURCHASE AGREEMENT,
DATED AS OF JULY 16,2Or5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER ATITHORITY
ANI)
ANTELOPE DSR 1, LLC
IRESERVEDI
ATTACHMENT C
POWER SALES AGREEMENT
Appendix M-2- I
l.
2.
J.
APPENDIX N
TO POWER PURCHASE AGRf,EMENT'
DATED AS OF JULY T6,2015
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
SITECONTR@
On or prior to December 3 I , 201 5, Seller may update this Appendix N by Notice to Buyer, to
add or remove site control Documents for the parcels shown on the following map, provided
that such parcels are under control by Seller and have a conditional use permit for the
construction and operation ofa solar lacility.
Site Control Documents:
[See Attached Map]
Appendix N-l ATTACHMENT C
POWER SALES AGREEMENT
APPENDIX O
TO POWER PURCHASE AGREEMENT,
DATED AS OF JULY 16,2OT5
BETWEEN
SOUTIIERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR I, LLC
STORAGE OPTION AGREEMENT
This Storage Option Agreement (this "Agreement,,) is made as of _, 2015 (the
"Effective Date"), by and between Antelope DSR l, LLC, a Delaware limited liability company
("Developer"), and the Southern California public power Authority C.SCppA"), ajoint powers
agency and a public entity organized under the laws of the State of Califlomia and created under
the provisions ofthe California Joint Exercise of Powers Act found in Chapter 5 of Division 7 of
Title I of the Govemment code of the State of califomia, beginning at califomia Govemment
Code Section 6500, et. seq., (the "Act"), and that certain Southem Califomia public power
Authority Joint Powers Agreement entered into pursuant to the provisions of the Act among
SCPPA and SCPPA's members, dated as of November l, 1980. Developer and SCppA are
sometimes hereinafter individually or collectively called a "Party" or the .,Parties',.
WHEREAS, Developer and SCPPA are party to that certain Power purchase Agreement,
dated as of JULY 16,2015 (the "PPA"). Terms used but not defined herein shall have the
respective meanings given in the PPA.
WHEREAS, pursuant to the PPA, Developer is developing the Facility, a solar energy
generating facility to be located at the Site.
WHEREAS, in conjunction with the Facility, SCPPA may wish to place an energy
storage facility (the "storage Project") at the site, on rhe terms and conditions set forth in this
Agreement.
WHEREAS, Developer has agreed to grant SCPPA an option to lease certain land and to
provide certain assistance and accommodation for the placement of the Storage project at the
Site.
WHEREAS, pursuant to the PPA, the Parties have agreed to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing Recitals, which are incorporated
herein by this reference, SCPPA entering into the PPA, the covenants and agreements herein
contained, and other good and valuable consideration, (the receipt and adequacy of which is
hereby acknowledged by the Parties), the Parties, intending to be legally bound, hereto agree as
follows:
ATTACHMENT C
POWER SALES AGREEMENT
Appendix O- I
t.Option.
l .l Crant of Option. Developer hereby grants to SCPPA an option (the "Option") to
lease (a) a po,tion ortti site (the "option Property"), (b) rights to excess interconnection
capaciiy in tihe amount of up to twelve (12) MW, or such other amount mutually agreed to by the
Parties, under the Generator Interconnection Agreement (the "Excess Interconnection
capacity"), and (c) rights under the relevant Permits for the purpose of installing, owning,
opeiuting, and maintaining the Storage Project (such rights, the "storage Project Rights"). The
Option Froperty shall be selected and identified by Developer and SCPPA jointly, taking into
consideration the design of the Storage Project, provided that the option Property shall not
exceed 2,000 square feet per MW of the Storage capacity, unless otherwise agreed to by the
Parties.
1.2 Option Period. The option period shall run from the commercial operation Date
and shall continue through the fifteenth (l5th) anniversary thereof(the "Option Period")'
1.3 Exercise of Ootion. SCPPA may exercise the Option at any time during the
Option Period by delivering to Developer written notice of exercise of the Option ("Notice of
Exercise,'). The option may be exercised once or twice, at scPPA's election, provided that if
the Option is exercised twice, the combined Storage Project resulting from both exercises shall
be subject to all requirements of this Agreement. Upon delivery by SCPPA of a Notice of
Exercise, SCPPA and Developer shall promptly negotiate and execute a lease and storage
implementation agreement (each such agreement, a "Lease") and such other agreements, as
appropriate, to afford SCPPA the Storage Project Rights. Each Lease shall contain terms and
conditions consistent with the terms set forth in Section 1.5 ofthis Agreement, other customary
terms and conditions, and such other terms and conditions as the Parties may mutually agree. If
the Option is exercised twice, the second Lease shall be in a form substantially identical to the
first Lease. Upon execution ofa second Lease, this Agreement shall terminate.
1.4 Arbitration/Remedies. If the Parties have failed to agree upon the terms and
conditions of a Lease within ninety (90) days after Developer's receipt of a Notice of Exercise,
then SCPPA shall have the right to initiate arbitration proceedings with respect thereto in
accordance with this Section 1.4. Any such arbitration proceedings shall be conducted in
Riverside, Califomia before a single arbitrator under the auspices and then-current Commercial
Arbitration Rules ofthe American Arbitration Association. The arbitrator shall have substantial
professional experience in electric power purchase and sale transactions, with experience in
energy storage projects. Within twenty (20) days following selection ofthe arbitrator, each Party
shalf submit to the arbitrator a proposed form of Lease. Thereafter, the arbitrator may conduct
such hearings, allow such discovery and make such inquiries as the arbitrator deems appropriate,
provided that rhe arbitrator shall be directed (i) to select one of the subm itted forms of Lease as
most consistent with this Agreement, without compromise (aka "baseball" arbitration), as his
award, and (ii) to deliver his award within sixty (60) days following his retention. SCPPA and
the Developer shall give full access to the arbitrator. The Parties shall execute and deliver the
Lease selecied by the arbitrator within ten (10) days following his award and, if either Party fails
to do so, the aggrieved Party may seek specific performance of the award from the court
pursuant to Sections 14.12 and 14.13 of the PPA. To the fullest extent permitted by law, any
arbitration proceeding and the arbitrator's award thereon shall be maintained in confidence by the
ATTACHMENT C
POWER SALES AGREEMENT
Appendix O-2
Parties. Ifthe arbitrator selects the Lease submitted by SCppA, Developer shall pay the fees and
costs ofthe arbitrator. lfthe arbitrator selects the Lease submitted by Developer, SCppA shall
pay the fees and costs of the arbihator. Except for the foregoing, each party shall pay its own
legal fees and other costs ofthe arbitration.
I .5 Lease Terms.
(a) Annual rent of$l for the Storage Project Rights and any and all necessary
and desirable equipment reserved for or to accommodate the storage project, including the
excess capacity of the inverters.
(b) SCPPA will be responsible lor the engineering, procurement and
construction ofthe Storage Project and operating and maintenance costs of the Storage project.
SCPPA will install additional protective devices at Developer's reasonable request to isolate the
Storage Project from the Facility inverters in the eyent ofa fault or other event. Developer shall
assist with SCPPA's efforts as set forth in Section 3.3.
(c) SCPPA may elect to engage Developer to operate and maintain the
Storage Project. If Developer agrees to be so engaged, operation and maintenance shall be in
accordance with Prudent utility Practices and in compliance with any equipment warranty
requirements or recommendations ofthe equipment manufacturers and./or vendor.
(d) SCPPA shall be entitled to utilize the inverter to flow electricity from the
Storage Project on to the grid when the inverter has available capacity.
(e) SCPPA shall be entitled to redirect some ofthe Energy generated by the
Facility into the storage Project and draw from the storage project as it needs, provided that
such operations do not conflict with the terms ofthe Facility's interconnection agreement.
(f) SCPPA shall pay Developer at the Contract Price for Energy the Facility
would have otherwise generated and delivered to the Point of Delivery during a redirection of
Energy into the Storage Projec! but shall not be required to pay Developer for the Stomge
Project charge/discharge cycle.
(g) The Panies shall agree upon detailed operating procedures for the
operation of the Storage Project, including metering protocols and procedures to appropriately
measure the Energy output ofthe Facility into the inverters and to the grid and Energy output of
the Facility into the Storage Project.
(h) The Lease shall contain such other terms and conditions as necessary to
reflect the financing and ownership structure for the Storage project.
(D The Lease shall automatically terminate upon the termination or expiration
ofthe PPA for any reason.
1.6 Failure to Exercise Option. If the Option has not been exercised as of 5:00 p.m.
Pacific time on the last day of the option Period, then the option shall automatically expireand
this Agreement automatically terminate, without further action by any party, and thi rights
ATTACHMENT C
POWER SALES AGREEMENT
Appendix O-3
granted to SCPPA hereunder shall be of no further force or effect. In the event the last day of the
option Period falls on a saturday, Sunday or holiday, the option Period shall be extended to the
next business day.
2. Access to Option Propertv. During the option Period, Developer shall provide SCPPA
and its employees, agents, consultants and contractors C'SCPPA Personnel") with reasonable
access to the Option Property, during normal business hours and upon two (2) days prior notice
by SCPPA, for the purpose of undertaking reasonable feasibility studies and due diligence
review. SCPPA will cause SCPPA Personnel to abide by Developer policies and safety
protocols at all times during periods of access to Option Property and shall conduct its activities
in such a manner so as to avoid material damage to the Site and avoid materially interfering with
the operations of the Facility.
3. Storaee Proiect.
3.1 Storage Project Development: Ownership. Except as specifically set forth below,
and in a Lease, SCPPA shall be solely responsible, at its sole cost and expense, for engaging an
EPC contractor, securing financing and constructing and installing the Storage Project. Unless
otherwise agreed to by the Parties, upon completion, SCPPA shall be the owner ofthe Storage
Project. The foregoing notwithstanding, upon exercise of the Option, Developer shall have the
right of first offer to provide financing for the Storage Project, including lease financing, or
Storage Project ownership by Developer. SCPPA shall reasonably consider any such offer of
financing provided by Developer.
3.2 Storase Proiect Characteristics. The Storage Project shall have a nameplate
capacity no greater than twenty-four percent (24oh) of the Contract Capacity. The Storage
Project shall connect to the AC or DC portion of the Facility, as mutually agreed to by the
Parties.
3.3 Developer Resoonsibilities. In addition to and without limiting any of
Developer's obligations under the PPA, including Section 12.6, Developer agrees to reasonably
cooperate with SCPPA's efforts to develop and install the Storage Project, including providing
qualified personnel to assist with the activities set forth herein and providing information about
the Facility. [n particular, at SCPPA's request, Developer shall use commercially reasonable
efforts to assist SCPPA with the following installation tasks, provided that Developer shall not
be required to incur third party costs or expenses in excess of One Hundred Eighty-Two
Thousand Dollars ($182,000) in the aggregate in connection with the obligations of Developer
set forth in Section 12.6 ofthe PPA and this Section 3.3:
(i) preparing an RFP for the Storage Project.
(ii) selecting a technology and vendor to install the Storage Project.
(iii) Managing the installation ofthe Storage Project.
(i')
permitting efforts.
Any other related activities, including interconnection and
ATTACHMENT C
POVWR SALES AGREEMENT
Appendix O-4
4. Miscellaneous.
4.1 Reoresentations and Warranties of SCppA.
(a) SCPPA is a validly existing Califomia joint powers authority, and has the
legal power and authority to own its properties, to cary on iti business as now being conducted
and to enter into this Agreement, and to carry out the transactions contemplated heieby, and to
perform and carry out all covenants and obligations on its part to be performed under and
pursuant to this Agreement.
(b) The execution, delivery and performance by SCppA of this Agreement (i)
have been duly authorized by all necessary action, and does not and will not require any consent
or approval of such SCPPA'S regulatory or governing bodies, other than that which has been
obtained; provided that further authorizations from such Buyer's regulatory or governing bodies
will be required for SCPPA to exercise the option; and (ii) does not violate any federal, state,
and local law, including the Califomia Govemment Code and similar laws.
(c) This Agreement constitutes the legal, valid and binding obligation of
SCPPA enforceable in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement
of creditors' rights generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
4-2 Reoresentations and Warranties of Developer.
(a) Developer is a limited liability company duly organized, validly existing
and in good standing under the laws of its respective state of incorporation or organization and is
qualified to do business in the state of Califomia, and has the legal power and authority to own
or lease its properties, to carry on its business as now being conducted and to enter into this
Agreement, and to carry out the transactions contemplated hereby and to perform and carry out
all covenants and obligations on its part to be performed under and pursuant to this Agreement.
(b) Developer has taken all corporate or limited liability company action
required to authorize the execution, delivery, and performance of this Agreement, and Developer
has delivered to Developer (i) copies of all resolutions and other documents evidencing such
corporate or limited liability company actions, certified by an authorized representative of
Developer as being true, correct, and complete, and (ii) an incumbency certificate signed by the
secretary of Developer certifying as to the names and signatures ofthe authorized representatives
of Developer.
(c) The execution, delivery and performance by Developer of this Agreement
have been duly authorized by all necessary organizational action, and do not require uny
"onr"ntor approval other than those which have already been obtained.
_ (d) This Agreement constitutes the legal, valid and binding obligation of
Developer enforceable in accordancs with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws relating to or affectingthe enforcement
ATTACHMENT C
POWER SALES AGREEMENT
Appendix O-5
of creditors' rights generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
4.3 Waiver of Consequential Damages. THE PARTIES AGREE THAT TO THE
FULLEST EXTENT ALLOWED BY LAW, IN NO EVENT SHALL EITHER PARTY BE
RESPONSIBLE OR LIABLE, WHETHER IN CONTRACT, TORT, WARRANTY' OR
UNDER ANY STATUTE OR ON ANY OTHER BASIS, FOR SPECI-AL, INDIRECT,
INCIDENTAL, MULTIPLE, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
OR DAMACES FOR LOST PROFITS OR LOSS OR INTERRUPTION OF BUSINESS,
ARISING OUT OF OR IN CONNECTION WITH THE FACILITY OR THIS AGREEMENT.
4.4 Assisnment. SCPPA may from time to time and at any time assign any or all of
its rights, and delegate any or all of its obtigations, under this Agleement, in whole or in part
without the consent of Developer to a Qualified Buyer Assignee that is also the assignee of the
PPA. Notwithstanding the foregoing, in connection with any such assignment, such Qualified
Buyer Assignee shall execute a written assumption agreement in favor of Developer pursuant to
which any such Qualified Buyer Assignee shall assume all the obligations of SCPPA under this
Agreement, thereby relieving the assignor SCPPA from its duties and obligations hereunder.
Except as set forth in this Section 4.4. neither Party shall have the right to assign its rights or
obligitions under this Agreement without the prior written consent of the other Party, which
consent shall not be unreasonably withheld, conditioned or delayed'
4.5 Modifications. No modification of this Agreement shall be effective unless set
forth in writing and signed by SCPPA and Developer.
4.6 Govemins Law and Venue. This Agreement and the Exhibits attached hereto
shall be govemed by and construed under the laws ofthe State of Califomia. The parties hereto
agree that venue for any action brought to enforce the terms of this Agreement shall be in the
applicable courts of the County of Riverside and the Parties hereby submit to the jurisdiction of
such courts.
4.7 Entire Asreement. The terms of this Agreement and the PPA constitute the entire
agreement between the Parties pertaining to the subject matter hereof' All prior or
contemporaneous agreements, representations, negotiations and understandings of the Parties
concerning the subject matter hereof, whether oral or written, are hereby superseded and merged
herein.
4.8 Notices. All notices, consents, waivers, demands, requests or other instruments or
communications to be given by one Party to the other Party shall be given in accordance with
the requirements for such instruments or communications set forth in the PPA.
4.9 PPA Termination. lf the PPA expires or is terminated for any reason whatsoever,
then the Option Period shall automatically end, and this Agreement shall automatically terminate
and be of no further force or effect.
4.10 Severabilitv. In the event any of the terms, covenants or conditions of this
Agreement, or the application of any such terms, covenants or conditions, shall be held invalid,
illegal or unenforciible by any court having jurisdiction, all other terms, covenants and
ATTACHMENT C
POVWR SALES AGREEMENT
Appendix 0-6
conditions of this Agreement and their application not adversely affected thereby shall remain in
force and effect, provided that the remaining valid and enforceable provisions materially retain
the essence ofthe Parties' original bargain.
4.ll Countemarts. This Agreement may be executed in counterparts and upon
execution by each signatory, each executed counterpart shall have the same force and effect as an
original instrument and as if all signatories had signed the same instmment. Any signature page
of this Agreement may be detached from any counterpart of this Agreement without impairing
the legal effect of any signature thereon, and may be attached to another counterpart of this
Agreement identical in form hereto by having attached to it one or more signature pages.
4.12 No Partnershio. This Agreement shall not be interpreted to create an association,
joint venture or partnership between the Parties hereto or to impose any partnership obligation or
liabitity upon either Party. Neither Party shall have any right, power or authority to enter into
any agreement or undertaking for, or act on behalf of, or to act as an agent or representative of,
the other Party.
4.13 Recordine. No later than Site Control Milestone Date, Developer shall identifo
the Site and the Parties shall execute and deliver a Memorandum of this Agreement in form and
substance acceptable to SCPPA, which Memorandum shall promptly be recorded in the Official
Public Records of the County in which the Site is located.
4.14 Further Assurances. Upon the reasonable request of the other Party, the
applicable Party shall execute and deliver such further documents, instruments or conveyances
and take, or cause to be taken, all appropriate action of any kind (subject to applicable
Requirements of Law) as may be reasonably necessary or advisable to carry out any of the
provisions hereofand to otherwise consummate and effectuate the transactions contemplated by
this Agreement, all at the sole cost and expense ofthe requesting Party.
4.15 Equitable Remedies. The Parties acknowledge that money damages may not be
an adequate remedy for violations of this A$eement by Developer and that SCPPA may, in its
sole discretion, seek and obtain from a court of competent jurisdiction specific performance or
injunctive or such other equitable relief as such court may deem just and proper to enforce this
Agreement or to prevent any violation hereof. The Parties hereby waive any objection to
specific performance or injunctive or other equitable relief.
4.16 Successors and Assisns. All covenants, promises and agreements by or on behalf
of the Parties contained in this Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns ofthe Parties hereto.
[Signat ure page fo I low s.l
ATTACHMENT C
POWER SALES AGREEMENT
Appendix O-7
lN WITNESS WHEREOF, the Parties have executed and delivered this Storage Option
Agreement as of the Effective Date.
ANTELOPE DSR I, LLC
By:
Name:
Title:
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By,
Name:
Title:
Appendix O-8 ATTACHMENT C
POWER SALES AGREEMENT
7801517 8
SCHEDULE 12.2(h)
TO POWER PURCHASE AGREEMENT,
DATED AS OF JULY T6,2OT5
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
ANTELOPE DSR T, LLC
STRUCTURE OF PARENT ENTITIES
ATTACHMENT C
POWER SALES AGREEMENT
FTP Power LLC
Sustainable Power Group
LLC
Solar
LLC
sPower Finco 5, LLC Other project holdings (e.8. from
olhe. tax equity financinSs)
Antelope DSR, LLC
Schedule 12.2(h)-l
REcFi\/ED
JUL O 9 ZO15
CIIY CLER('S OF
STAFF REPORT
ITTJMAN RESOURCES DEPARTMENT
DATE:
TO:
FROM:
RE:Adoption of City of Vernon Personnel Policies and Procedures, Hours of
Work II-4 (new) and Personnel Records and General Personnel Files III-2
(new)
Recommendation
A. Find that approval of the proposed personnel policy and procedures in this staff report is
exempt under the Califomia Environmental Quality Act (CEQA) in accordance with
Section 15061(b)(3), the general rule that CEQA only applies to projects that may have a
significant effect on the environment; and
B. Adopt the attached Personnel Policy and Procedures, Hours of Work II-4 (new),
Personnel Records and General Personnel Files III-2 (new) and incorporate into the
Personnel Policies and Procedures Manual; and
C. Authorize the City Administrator and the Director of Human Resources to execute and
distribute the above-referenced policies to all employees.
Background
The Human Resources Department is responsible for maintaining and managing the City's
Personnel Policies and Procedures. Prior to 2013, a comprehensive review of the Personnel
Policies and Procedures had not been conducted in over twenty (20) years. In line with the City's
good govemance reforms, the City commenced and is continuing its comprehensive review of its
policies and procedures, including the incorporation of new policies and progr.rms designed to
benefit the City, its employees, and surrounding communities.
To ensure a more efficient and effective method in maintaining and managing the City's
personnel policies and procedures, the City Council on November 20,2012, approved Resolution
No.2012-231 that incorporates all personnel policies into the Personnel Policies and Procedures
Manuql. The manual is designed to provide a uniform and consistent system for human resource
administration throughout the City. In addition, the manual will provide employees with greater
JUL I
CITY ADMI
July 21,2015
Honorable Mayor and City Council
Teresa McAllister, I)irector of Human Resources Departmen
Page I of2
clarity with respect to personnel policies, and promote effective communication among
managers, supervisors, and employees.
In firrtherance of the City's good govemalce reform efforts, staff has presented the following
revised policies for consideration by the City Council and adoption into the Personnel Policies
and Procedures Manual:
o Hours of Work Policy II-4 (new) - The attached policy provides uniform guidelines for
the application of State and Federal laws including the Fair Labor Standards Act (FLSA)
and provide guidelines for modified work hours for City employees.
o Personnel Records and General Personnel Files Policy III-2 (new) - The attached policy
establishes guidelines for the collection, maintenance, access to, and retention ofthe
oflicial personnel records ofemployees and the general personnel files ofthe Human
Resources Department.
In accordance with the Meyers Milias-Brown Act, City staff participated in the meet and confer
process on the above policies with the City's labor associations/unions as ofJune 23,2015. As
such, any ageed upon revisions have been incorporated into the attached policies.
Fiscal Impact
There is no fiscal impact to adopt the attached policies.
Attachment(s)
I . Hours of Work Policy II-4
2. Personnel Records and General Personnel Files Policy III-2
Page 2 of 2
City of Vernon, California
Human Resources Policy and Procedure Manual
Approved:
Director of Human Resources
City Administrator
SUBJECT:
Number: III-2 Effective Date:
PERSONNEL RECORDS AND GENERAL PERSONNEL FILES
PURPOSE:
To establish guidelines for the collection, maintenance, access to, and retention of the
official personnel records of employees and the general personnel files of the Human
Resources Department.
DEFINITION:
The Official File in the Human Resources Department is the repository of personnel
records concerning individual employees. The formal and permanent employee record
shall be maintained in the Human Resources Office.
POLICY:
Employees must report promptly to the Human Resources Department, changes in the
following status: name, address, telephone number, marital status, name and birth date
of dependents, formal education, relevant courses completed and other training or skills
acquired, persons to notify in case of emergency, physical or other limitations impacting
his or her job duties, and insurance beneficiaries.
1. OFFICIAL PERSONNEL FILE - Contains those records and documents
pertaining to an employee's work history with the City from date of hire to
separation. The Human Resources Department shall maintain the Official
Personnel File for each City employee.
a. Disciplinarv Action Records - Written documents relating to disciplinary
actions taken for the purpose of correcting the conduct or performance of
employees shall be filed in the Official Personnel File. This file shall
1
b.
Number: lll-2 Efectiye Dale:
contain copies of all written materials pertaining to formal notice of
disciplinary action (written reprimands), and punitive disciplinary actions
(suspension, demotion, termination, extension or reinstatement of
probation, and denial of step increase).
All disciplinary actions will remain part of an employee's permanent record
unless removal of a specific item is requested by the department head in
writing to the Human Resources Director and approved by the City
Ad ministrator.
Access to Personnel Files - Review of records and documents in
employees' official personnel files shall be limited to official City business
and on a need to know basis, and shall be in conformance with state law.
ln their normal course of business relating to the employee, City personnel
and agents whose duties require them to have access to or to inspect
employee personnel records may be granted access by Human
Resources staff to the personnel files. These persons may include:
1) The employee2) An employee representative designated and authorized in writing
by the employee
Designated Human Resources staff
Designated Finance and payroll staff
Department supervisors and managers
Other City staff designated as confidential in the conduct of official
business of the City, including the City Administrator, City Attorney,
and their designated department staff
Other administrative officers or agents approved by the City
Administrator in order to administer City business or policies in the
course and scope of their duties, including investigators charged to
conduct internal personnel investigations, and third party
administrators or outside legal counsel for the purposes of
administering the City's general liability or workers compensation
programs
Actual review of contents of the file by the employee or authorized
employee representative shall be scheduled at the mutual convenience of
the employee or authorized representative and authorized Human
Resources Department staff, and shall be accomplished in the presence
of such authorized staff- As a normal practice, an employee may, at
reasonable times and at reasonable intervals, during usual business
2
3)
4)
5)
6)
7)
d.
Number: lll-2 Effecli're Date:
hours, with no loss of compensation, inspect his or her personnel file. The
scheduling of personnel file inspection must be coordinated with
employee's supervisor and Human Resources Department designee.
Copies of Documents in Personnel Files - Copies of most records and
documents signed by the employee and placed in the personnel files are
routinely provided to the employee. Copies of records and documents not
routinely provided may be requested by the employee. Copies of
documents of an adverse nature shall be provided to an employee prior to
placement in the employee's Official Personnel file (examples: notices of
disciplinary action, unsatisfactory performance evaluations and related
records).
Copies of records and documents subpoenaed by the courts or legally
constituted Boards or Commissions shall be provided and fees collected if
applicable.
Pursuant to the Firefighters Procedural Bill of Rights Act and Public Safety
Officer's Procedural Bill of Rights Act, no comment adverse to the
employees interest shall be entered in his/her personnel file or any other
file used for personnel purposes without the employee having first read
and signed the document containing the adverse comment indicating
he/she is aware of such comment, except that such entry may be made if
after reading such instrument the employee refuses to sign it. Should the
employee refuse to sign, the fact shall be noted on the document, and
signed or initial by the employee. The employee shall have 30 days within
which to file a written response to any adverse comment entered into the
personnel file with the response attached to, and accompanying, the
adverse comment.
Rebuttal of Documents in Personnel Files - Unless otheMise provided in
the Firefighters Procedural Bill of Rights Act or Public Safety Procedural
Bill of Rights Act, an employee has ten (10) business days, from receipt of
the copy of the adverse personnel document, to submit a request for
change, deletion or a letter of rebuttal to his/her department head. The
department head then has ten (10) business days to respond in writing to
the employee's request and to notify the employee of his/her decision.
The department head must indicate whether the requested change or
deletion will be granted or denied. ln the event that the employee did not
send a request for change or deletion but simply sent a letter of rebuttal,
the department head must acknowledge receipt of the letter and forward a
copy of it to Human Resources for placement in the employee's official file
to accompany the original document.
3
e.
Number: lll-2 Efective Dqle:
ln the event that the employee is dissatisfied with the department head's
written response, the employee may request to meet with his/her
department head to discuss the matter further. The employee must
request this meeting within ten (10) business days of the department
head's written response. The department head will notify the employee, at
the conclusion of the meeting, of his/her decision whether to uphold or
modify the initial document. The employee then has ten (10) business
days, from the meeting, within which to submit a final rebuttal. The final
rebuttal will be placed in the employee's official file and will accompany
the initial document if not changed or deleted, and any previously
submitted rebuttal letters which pertain to this incident.
Release of lnformation from Personnel Files - lnformation generally
available without authorization from the employee, and provided by
Human Resources Department staff from the employee's Official
Personnel file pursuant to official City business, shall include the following:
1) Verification data sufficient to ensure proper identification of the
employee.
2) Employment verification data, including current status, hire date,
termination date, position title and department, and current or final
salary.
3) lnformation necessary to process claims for Workers'
Compensation, Unemployment Compensation lnsurance, City
vehicle accident, City liability, and City retirement.
4) Records where disclosure is required by valid subpoena, court
order, or in response to an administrative or judicial request. Staff
shall consult with the City Attorney's Office prior to releasing any
employee records pursuant to a subpoena, or other judicial or
administrative request.
5) Release of information not specified above, including reference
checks, which shall be the responsibility of the Human Resources
Department, may only be considered when accompanied by signed
authorization from the employee concerned.
Retention of Personnel Files - The contents of the employee's Official
Personnel Files shall be retained for five years after separation date, on
f.
2.
Number; lll-2 Efectivc Date'
electronic imaging software, originals destroyed, and the files transferred
on compact disc and placed in records storage in accordance with the City
of Vernon records retention program.
GENERAL PERSONNEL FILES - These files are the repository for all matters
(correspondence, statements, memos, reports and other data, information,
materials, etc.) concerned with the administration of the City personnel program
including, but not limited to, the recruiting, examining, placement, classification,
pay, Workers' Compensation, legal, safety and benefits administration.
These files shall be confidential in accordance with the Public Records Act with
access limited to Human Resources Department staff and such other personnel
and/or individuals requiring access pursuant to official City business, as
determined by the Human Resources Director.
Retention of all materials in these files shall be governed by various legal
requirements (Federal and State) and the City Records Retention Program.
GRIEVANCE FILES - These files shall be maintained in the Human Resources
Department separate from the Official Personnel File. The employee, the Human
Resources Department, the affected employee labor organization, the affected
department head and/or their official designee, legal counsel, and any outside
arbitrator responsible for determining the final disposition of the grievance shall
be the only persons with access to these records.
MEDICAL RECORDS - These files are considered highly confidential and shall
be maintained in the Human Resources Department separate from the Official
Personnel File, with limited access generally available only to the affected
employee and the Human Resources Department. Medical records related to
workers compensation treatment may be disclosed under HIPAA, and employees
who file a workers compensation or other liability claim related to their medical
condition must provide access to relevant medical records in order for a
determination of compensability to be made.
DEPARTMENTAL WORKING PERSONNEL FILE - lf an employee's department
maintains working personnel files, employees of that department shall have
access to their departmental working personnel file during the regular business
hours of City hall, provided they notify the department head. The review of the
file shall be accomplished in the presence of authorized staff. All verbal
reprimands shall be documented in the departmental working personnel file, and
the employee will be required to sign the documentation before it is placed in the
file. ln the event that an employee refuses to sign, this will be noted on the
documentation and the department head will cross-sign the document.
J.
4.
5.
5
Nunber: III-2 Effective Date:
lnformation contained in the departmental working file should be destroyed
following employee separation. Departments should ensure all required
documents have been forwarded to Human Resources Department to include in
the employee's official personnel file.
Documentation of a verbal reprimand shall remain in the working personnel file
for a period of twelve (12) months. After the twelve (12) month period has
elapsed, the documentation of the verbal reprimand shall be removed from the
departmental working fi le.
PROCEDURE:
Responsibility
Employee
Human Resources/Department
Employee
Human Resources Staff Member
Action
Notifies Human Resources
Department or employing department,
orally or in writing, that he/she wants
to review contents of own personnel
file.
lf employee designates a
representative for this review,
prepares, dates and signs a written
statement of authorization.
Sets up mutually convenient time for
the review during office hours,
designates location and staff member
for the review.
Arranges with immediate supervisor in
accordance with City policy, for the
review of personnel file.
Checks identification of employee
and/or employee representative, if
necessary. Records name of
representative.
Provides Official or Departmental
1.
2.
2
4.
5.
6
Employee and/or Representative
Human Resources Staff Member
Number; III-2 Efective Ddte:
Working Personnel File for review and
personally monitors review.
Reviews contents of personnel file in
presence of staff member.
a. lf copies requested, identifies
document and number of copies
desired.
b. lf employee wants to rebut a
particular document where
provision for rebuttal was not
provided on the document, identi-
fies document and prepares,
signs and submits rebuttal to
Department Head.
Photocopies and, if applicable, collects
the appropriate fee for copies of
documents issued to separated
employees.
Receives and files signed rebuftals
and appropriate documents after
review by the Department Head.
6.
7.
8.
7
City of Vernon, California
Human Resources Policies and Procedures
Director of Human Resources
City Administrator
Number: II-4 Effective Date:
SUBJECT:HOURS OF WORK
PURPOSE:
To provide uniform guidelines for the application of State and Federal laws including the
Fair Labor Standards Act (FLSA) and to provide guidelines for modified work hours for
City employees.
POLICY:
The standard work week for the City of Vernon begins at 12:00 a.m. on Sunday and
ends on Saturday at 11:59:59 p.m. ln accordance with FLSA, hours worked include all
hours that an employee is "suffered or permitted to work" for the employer (29
U.S.C.,$203(g)). Hours worked also include time during which an employee is
"necessarily required to be on the employer's premises, on duty or at a prescribed work
place" (29 C.F.R. 5785.7) .
A. Exempt Employees
Employees employed in a bona fide executive, administrative, or professional
capacity may be considered "exempt employees" under the FLSA. The work
week for full-time employees designated as FLSA exempt is generally
considered to be 40 hours, and for parttime exempt employees the proportion of
40 hours equivalent to the appointment percentage. FLSA exempt employees
do not receive overtime compensation or compensatory time off. The hours of
work for exempt employees shall be those necessary to fully perform the work
assigned and the requirements of the classification, and exempt employees may
be required to work extended hours in excess of their normal work week as part
of their regular compensation.
While exact hours are not tracked, performance issues may arise if exempt
employees do not meet the desired performance objectives as a result of not
worklng the hours required to complete their job duties. Department Heads are
responsible for setting and monitoring accountability expectations.
B.
Number: II-l Effective Date:
Non-Exempt Employees
Standard Work Week
Under the FLSA, the standard work week for non-exempt employees, other than
public safety, can be defined as any seven (7) consecutive days during which an
employee is regularly scheduled to work for$ (a0) hours or less.
For public safety employees, the standard work period can be any regular and
recurring work schedule between seven (7) and twenty-eight (28) days.
Eligibility for overtime pay is based upon the number of hours worked in the work
period, as defined by applicable provisions of existing Memoranda of
Understanding, policies contained in the Personnel Policy and Procedure
Manual, and the FLSA.
Standard Work Schedule
The City employs a 4/10 work schedule for employees assigned to work between
Monday - Friday shifts. The basic work schedule consists of four (4) consecutive
10-hour days within the seven (7) calendar day work week. Variations to the
4/10 work schedule can be found in respective Memoranda of Understanding.
Departments are expected to approve work schedules and monitor the hours
worked by employees, since any work performed by the employee, whether or
not it has been authorized or approved in advance, may be counted as hours
worked. Employees that do not receive approval of overtime, prior to working the
overtime, may be disciplined for insubordination in accordance with the City's
policy for working unauthorized hours.
Modified Work Schedule
ln order to meet the scheduling and operational needs of departments, a different
work schedule other than the standard work schedule of Monday through
Thursday, 7:00 a.m. to 5:30 p.m. may be allowed, with the concurrence of the
department head, Human Resources Director, and City Administrator
The City's intent regarding modified work schedules is for use only when suited
to the department's and the City's operational needs. Any existing modified
schedules may be ended based on operational needs ofthe department,
The modified work schedule for full-time employees can be any combination of
work days that allows an employee to be scheduled for forty (40) hours of work in
a standard work week.
The beginning of the work week may only be changed if the change is intended
to be permanent and is not designed to avoid paying overtime. Once a different
2
1.
2.
Number: II-1 Effeclive Date:
work week is established for an employee or group of employees by changing
the beginning of the work week, it remains fixed regardless of the employee's
work schedule.
Departments considering a modified work schedule for employees should
address the following criteria:
ii. The modified work schedule shall not impede organizational
efficiency or require overtime to maintain adequate office coverage.
iii. The modified work schedule shall increase organizational efficiency
or hours the office shall be open to the public, encourage ride
sharing and trip reduction, thereby reducing traffic congestion and
car pollution, and increase employee morale.
Any changes to work schedules or modified work schedules shall be subject to
provisions as identified in applicable Memoranda of Understandings between the
City and the recognized employee organizations and/or collective bargaining
obligations.
The office functions and activities shall be adequately maintained
and services shall be available to the public between normal
operating hours.
Action
Approves the standard work week for
the City and deviations therefrom.
Recommends changes to the standard
work schedule for approval by the City
Administrator.
Determines the means and manner by
which hours of work are documented
and approves authorized work
schedules.
Sets forth criteria for the authorization
and use of overtime.
Ensures that no supervisor shall
engage in a willful or any other
violation of the Fair Labor Standards
Act (FLSA).
PROCEDURE:
Responsibility
City Administrator
Department Head
1.
2.
4.
5.
Finance Department
Human Resources Department
Finance DepartmenUPayroll Division
Human Resources Department
Supervisor
Number: II-4 Effective Date:
Notifies the City Administrator and
Human Resources Department of
changes to any regular, modified or
flexible work schedule(s).
Approves the form on which hours of
work are recorded.
Monitors compliance with the FLSA.
Reviews deviations from the standard
work week, changes to existing work
schedules, and notifies Human
Resources of any changes.
Offers training and consults with
departments regarding the adoption of
modified or flexible work schedules.
Documents the work schedules for all
employees in accordance with
established guidelines.
Recommends changes to established
work schedule through the chain of
command to the department head.
Assumes responsibility for
documenting all overtime worked by
employees under his/her supervision.
Maintains records of all hours worked
including paid time counted as hours
worked for purposes of overtime.
6.
7.
8.
9.
10.
11.
12.
13.
14.
4
RECEI ED
JUL 15 2015
CITY CLERK'S OFFICE
STAFF REPORT
CITY ADMINISTRATION
DATE:
TO:
f,.ROM:
RE:Adoption of Ordinance No. 1230 to Amend Section 2.123(a) of the Vernon
Municipal Code Relating to the Vernon Ilousing Commission Terms of Office
Recommendations
A. Find that the actions recommended in this staff report are exempt fiom the Califomia
Environmental Quality Act (CEQA) in accordance with Section 15061(bX3), the general
rule that CEQA only applies to projects that may have an effect on t}re environment.
B. Amend Section 2.123(a) of the Vemon Municipal Code to establish Commission
Member terms to run from July I through June 30, effective July l, 2019 for four of the
seven seats, and effective JluJy l,2021for the three remaining seats.
C. Include uncodified sections to establish the following upcoming terms in order to fully
effectuate the July I through June 30 terms:
Aooointins Catesory Term
Resident/Council Member August 11, 2017 - June 30,2021
Resident No. I August 11, 2017 - June 30,2021
Resident No. 2 August I 1, 201 5 - June 30, 2019
Business Representative No. I August 11, 2015 - June 30,2019
Business Representative No. 2 August 11,2017 - June 30,2021
Business Representative No. 3 August 11, 2015 - June 30,2019
Employee of Vemon Business August 1 l, 2015 - June 30,2019
July 21,2015
Honorable City Council
Mark C. Whitworth, City Administrator
Originator: Kristen Enomoto, Deputy Ci
Backsround
At the July 7,2015 City Council meeting, City staff presented the first reading of Ordhance No.
1230. At that time, the proposed ordinance included the following recommended revisions
related to the Vemon Housing Commission:
l. Amend Section 2.125(b) of the Vemon Municipal Code to remove the first responder
leasing priority, effective at 5:01 p.m. on December 8, 2015.
2. Amend Section 2.123(a) of the Vemon Municipal Code to establish Commission
Member terms to run from July I through June 30, effective July 1, 2019 for four ofthe
seven seats, aad effective Jdy 1,2021for the three remaining seats.
3. Include uncodified sections to establish the aforementioned upcoming terms in order to
fully effectuate the July 1 through June 30 terms.
Upon consideration and deliberation of the proposed ordinance, the City Council voted to amend
the ordinance to include only the revisions outlined in numbers 2 and 3 above, and approved the
fust reading of Ordinance No. 1230, as amended.
Ordinance No. 1230, as amended, is being presented herewith for adoption.
The City Council voted to defer item 1, relating to the proposed removal of the fust responder
leasing priority, to the next meeting for further discussion. Additional information was also
requested in relation to the upcoming discussion. This matter is being presented concurrently in
a separate staff report.
Imnlementation of Julv I throush June 30 Commission Member Terms
In recent years, the City has established several new commissions and committees to carry out
important work undertaken as part of the City's good govemance reforms. With the exception of
the Housing Commission, the terms of each of the boards run from July I through June 30,
whether on a 2 or 4-year basis.
For the sake of consistency and parity among the various bomds, it is recommended that Section
2.123(a) of the Vemon Municipal Code be amended to set the tenns for Housing Commission
Members to run ftom July I through June 30. ln order to avoid disruption to any existing terms,
it is recommended that the change in term take effect in 2019 for four of the seven Commission
Member seats, and n2021 for the remaining three seats.
In order to firlly effectuate the change in Housing Commission Members' terms, it is
recommended that the City Corurcil include an uncodified section in the ordinance to set the
expiration of upcoming new terms at June 30 of their respective years.
Fiscal Impact
There are no known or anticipated costs associated with the recommendations outlined in this
staff report.
Attechment(s)
Ordinance No. 1230.
ORDINN{CE NO. 1230
AN ORD]NANCE OF THE CITY COUNCIL OF THE CITY OF
VERNON AMENDTNG SECTION 2.]-23 (A) OF A.R,TT CLE XVI]
OF CTIAPTER 2 OF THE VERNON MTINI CIPAL CODE
RELATING TO THE VERNON HOUSING COMMISSION
WHEREAS, on June 7, 20].a, the City CounciL of the City of
vernon adopted ordinance No. 1183 establishing a Housing Conunission
pursuanE to the provisions of the Clty Charter of the City of Vernon and
specifying the membership and duties of the Housing Commission (t.he
"commission" ) ; and
WHEREAS, Section 2.]-23 of Article XVIf of Chaptser 2 of the
vernon CiEy Code provides provisions regarding tshe terms for Commission
members; and
WHEREAS, the City Council- desires to amend sr:lcsection (a) of
Section 2.a23 Lo esta.bl-ish ,Ju1y 1 as the date the terms of office begin and
,fune 30 as Ehe daEe that terms of office end; and
WHEREAS, by memorandum dated July 7, 2015, the City
Administratsor has recommended Ehe adoption of an ordinance amending
Section 2.:-23{,a) to the Vernon Municipal Code regarding tshe Commission.
THE CITY COUNCIL OF THE CITY OF VERNON HEREBY ORDAINS:
SECTION L: The City Councif of the Citsy of Vernon hereby
f i-nds and determines that the above recitals are true and correct.
SECIIoN 2: Section 2.L23 (a) of Article x\[I of chapter 2 of the
Vernon Municipal- Code is hereby amended to read as follows:
(a) Commission members shaIl serve for a term of four (4)
years and may be reappointed. Terms of office for each seat shaII begin
on July a aL a2:00 a.m. arrd end on ,fune 30 at 11 :59 p.m. four (4) years
thereafter. No person shalI serve more tharl two (2) fuI1 four (4) year
terms .
SECIION 3: UNCODIFfm SECTION. Ttre for:r members whose tems
are due to eeire on August 1-O, 20f5 shall complete their respective tenns,
aIrd their seats shall- subseguently be fil1ed by members who shalI serve from
Augnrst 11, 2015 at 12:00 a.m. r,mtil .fune 30 at 11 :59 p.m. for:r (4) years
thereaftser. The three current members whose terms are due to expire on
August 10, 20]-7 sha11 complete their respective tserms, and their seatss slEff
subsequentfy be filIed by mernbers who strafl serve from August L1, 20]-7 aL
12:00 a.m. until June 30 at l-L:59 p.m. four (4) yea-rs Ehereafter.
SECIION 4: Any ordinance or parts of ordinances in conflict
with this ordinarce are hereby superseded.
SECTIoN 5: Severabil-iEy. ff any chapter, article, sect.ion,
subsectsion, sr:I:divi s ion, paragraph, sentence, clamse, phrase, or word in this
ordinance or any part thereof is for any reason held !o be unconstitutional
or invalid or ineffective by aly court of competent jr:risdiction, such
decision shaIl not affect the validity or effectiveness of the remaining
portions of this Ordirralce or any pa-rt thereof. The City Councif hereby
declares that it woul-d have adopted tshis Ordinance and each chapter, article,
section, subsection, subdivision, paragraph, sentence, clause or phrase
thereof, irrespective of the fact that any one or more chapEers, articLes,
sections, subsectiorrs, subdivisions, paragraphs, sentences, clauses, phrases
or words be declared unconstitutional, or inval-id, or ineffective.
SECTION 5: Book of ordinances. The City Clerk sha1l actest
and certify to the adoption of this ordinance and shall cause this
Ordinance and the City Cl-erk's certification to be entered in the Book
of ordinances of the Council of this city. The City Cl-erk shall- cause
this ordinance to be published or posted as required by 1aw.
2
SECTIoN 7: Effective Date. This ordinance shal-l go into
effect and be in fuIl force and effects aE a2:01 a.m. on the thirty-
first (31st) day after iEs passage.
APPROVED AND ADOPTED this 21st day of Jul-y, 2015.
Name :
Title:Mayor / Mayor Pro-Tem
ATTEST:
City Cferk / Deputy City Cferk
APPROVED AS TO FORM:
Hema Pat.ef , City /{rtt.orney
3
STATE OF CAIIFORNIA )
) ss
COIINTY OF LOS ANGELES )
I,, City Cl.erk / Deputy Cj-ty Clerk of the City
of Vernon, do hereby cerEify that the foregoing Ordinance, being
Ordinance No. 1230 was duly and regularly introduced at a regular
meeting of the City Council of the City of Vernon, held in Ehe City of
Vernon on Tuesday, Ju1y 7, 2015, and thereafter adopted at a meeting of
said City council held on Tuesday, ,Jul-y 2r, 2or5, by the following
voEe :
AYES:
NOES:
ABSENT:
Councilmembers:
Councilmembers:
Councilmembers:
And thereafter was duly signed by the Mayor or Mayor Pro-Tem of
the City of Vernon.
Executsed t.his day of July, 2015, at Vernon, CaLifornia.
City Clerk / DepuEy City CLerk
(sEAr)
4
RECEttfED
JUL 14 2015
CITY CLERK'S OFFICE STAFF REPORT
CITY ADMINISTRATION
DATE:
TO:
FROM:
RE:
July 21,2015
Honorable City Council
Mark C. Whitworth, City Administrator
Discussion of Proposed Elimination
Leasing City-Owned Housing
of Priority for First Responders in
Recommendations
A. Hold a discussion regarding the joint recommendation made by the Housing Commission
ald City staffto eliminate the priority for first responders in leasing City-owned housing.
B. If the City Council concurs with the aforementioned recommendation, direct staff toprepare r ordinance to amend Section 2.125(b) of the vemon Municipal code to
remove the fust responder leasing priority, effective at 5:01 p.m. on Decembir g, 2015.
Backsround
Al lhe July 7,2015 city council meeting, city staff presented the fust reading of ordinance No.1230. At that time, the proposed ordinance included the following recorimended revisions
related to the Vemon Housing Commission:
1. Amend section 2.125O) of the vemon Municipal code to remove the first responder
leasing priority, effective at 5:01 p.m. on December g, 2015.2. Amend Section 2.123(a) of the vemon Municipal code to establish commission
Member terms to run from July I through June 30, effective July l, 2019 for four of the
seven seats, and effective July l, 2021 for the three remaining seats.3. Include uncodified sections to establish the aforementioned upcoming terms in order tofully effectuate the July 1 through Jrure 30 terms.
Upon consideration and deliberation ofthe proposed ordinance, the City Council voted to amendtre ordinance to include only the revisions outlined in numbers 2 and 3 above, and approved thefirst reading of ordinance No. 1230, as amended. As such, ordinance No. tzio, asamended, is
being presented for adoption in a separate staff report.
The city council voted to defer item 1, relating to the proposed removal of the fust responder
leasing priority, to the next meeting for further discussion. Additional information wasalso
requested in relation to the upcoming discussion. This matter is addressed below.
Removal of First Responder Leasins Prioritv
Section 2.125(b) of the Vemon Municipal code ("Code") requires tle Housing commission to
provide frst responders, as defined by the commission with some minimum requirements
imposed by the City, a first priority in leasing units unless or until four (4) or more units are
concrrrently occupied by first responders.
As required by the Code, first responders are defined as:
"City firefighters, police ofiicers, emergency medical technicians, and similar positions held
by employees of businesses located in Vemon.',
As further required by the Code, and in order to clarifu the last category of the aforementioned,
the commission established the following definition of a "business first responder":
"A business first responder is someone who is employed by a business located in the City of
vemon, regularly works 30 hours or more per week at a location in the city of vemon, and
holds either a current Emergency Medical rechnician @MT) certificate or a community
Emergency Response Training ("CERT') certificate recognized by the city of vemon."
As many of you may recall, the establishment of the Housing commission in July 2011 was one
of the earliest and most critical objectives among a sweeping series of good govemance reforms
elacted by the City in response to efforts by members of the state legislature to disincorporate
the City. At the time the Commission was established and the first iesponder leasing priority
was imposed by the city council, there was much discussion and debate u-o"g th"
commission, key stakeholders, and interested parties as to the importance and value of such a
priority and the particular rules and limitations that should apply to such a priority if it were toexist. Pros and cons, such as the added safety provided to people and property versus tre
potential perception of favoritism and possible disproportionate representation that could result,
were fleshed out by the Commission and the City Council. In light of the historic transition in
which the City had entered and after careful consideration of all factors, the Cogncil established
the first responder priority and limit as outlined above.
Now, nearly four years after the commission's widely successfirl overhaul of the city,s housing
policies and procedures, the question of the continued importance and value of th" fi..t
responder leasing priority compared against some of the practical challenges and negative
perceptions it brings about has come up. As such, City staff presented tle mattir to the Housing
Commission for discussion at its June 10, 2015 meeting. The discussion included the following
additional questions/discussion points that would need to be addressed if the fyst responder
leasing priority were to continue, along with city stafips thoughts and recommendations:
1. How should on-going first responder status be verified?2. what should happen ifthere is a change in first responder status duriag tenancy?3. Should there be any specific occupancy requirements for first respond-rs?
Staff recommended that, if the Commission were to recommend the discontinuation of the first
responder leasing priority, consideration be given to the timing of such a change so as not to
unfairly impact any self-identified first responders who have submitted Expression of Interest
Forms under the current priority for the lottery drawings to be hetd this calendar year. As such,
staff recommends the discontinuation of the first responder leasing priority take effect at 5:01
p.m. on December 8, 2015, immediately following the deadline for interested parties to submit
Expression of Interest Forms for the December 9, 2015 lottery &awing.
The Housing commission is prepared to take up the discussion of what, if antthing, should be
addressed in relation to the three existing tenants who obtained their units as a result ofthe first
responder leasing priority, and make recommendations to the City Council accordingly.
First Resoonders Residins at Vernon Village Park
During the deliberation at the July 7,2015 meeting, the council asked city staff to find out how
many first responders, as defined by the City Council and the Housing Commission, are
currently living at Vemon Village Park, the new, privately-owned and operated, 45-unit
aparftnent complex at the southqrst comer of the City.
Staffhas been advised by the developer of the project, Meta Housing corporation ("Meta"), that
all 45 units are now occupied (including the on-site manager's unit), and that none ofthe units
are occupied by first responders.
On a somewhat related note, Meta has also advised that eleven tenants work at a business located
within the City of Vemon, and three tenants previously lived within a one-mile radius of the site.
First Responders Residins in Citv-Owned Housine
currently, there are three first responders residing in city-owned housing units (two city
Firefighters and one City Police Offrcer) that obtained their units through the leasing priority.
However, one ofthe Firefighter tenants has notified the City ofhis intent to vacate his unit on
August 31,2015.
Pursuant to Section 2.125b) of the vemon Municipal code, the first responder leasing prioriry is
provided until four or more units are concurrently occupied by first responders.
There are 25 interested parties on the crrrent wait list, and 7 ofthose have indicated they are first
responders.
Fiscal Imnact
There are no known or anticipated costs associated with the discussion and recommendations
outlined in this staff report.
Attachment(s)
None.
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