HomeMy WebLinkAboutCC AG PKT 2011-06-13 #O AGENDA STAFF REPORT
DATE: June 13, 2011
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, Acting City Manager
FROM: Sean P. Crumby PE, Director of Public Works
SUBJECT: STATE REVOLVING FUND LOAN PROGRAM
(SEWER CAPITAL FUND)
SUMMARY OF REQUEST:
It is requested that the City Council adopt Resolution No. 6144 authorizing the
City Manager to execute the State Revolving Fund Project No. C -06- 5310 -110,
Agreement No. 10- 838 -550, and State Revolving Fund Project No. C -06 -5310-
120, Agreement No. 10- 842 -550.
BACKGROUND AND ANALYSIS:
On August 8, 2005, the City Council adopted the 2005 Sewer System Master
Plan Update which identified over $15 million in required Capital Improvement
Projects.
At the February 11, 2008 City Council Meeting, the City Council directed staff to
pursue the low /no interest loan with the State Revolving Fund Loan Program
administered through the State Water Resources Control Board.
At the July 14, 2008 City Council Meeting, Council adopted Ordinance No. 1574
authorizing the City to borrow money from the State Water Resources Control
Board. Since that time, City staff has been working with the state regarding
approval of the loan application.
With the final completion of the loan application and required documents, staff
has successfully received final approval for the attached project finance
agreements with the State.
The first finance agreement, STATE REVOLVING FUND PROJECT NO. C -06-
5310 -110, AGREEMENT NO. 10- 838 -550 will rehabilitate the sewer lines in
• College Park East. The rehabilitation includes upsizing, replacing and lining
Agenda Item 0
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existing sewer pipes. The project within CPE is the Elder Avenue Sewer Project
and is expected to be awarded this summer.
The second finance agreement, STATE REVOLVING FUND PROJECT NO. C-
06- 5310 -120, AGREEMENT NO. 10- 842 -550 will rehabilitate the sewer lines in
the Old Town vicinity. The rehabilitation includes replacing and lining existing
sewer pipes. This project is currently being designed.
The terms of the financing agreements is a fixed single interest loan. The terms
of the loan are 20 years, and a fixed rate of 2.60% with no administrative service
charge. The 2.60% fixed rate is derived from 50% of the current General
Obligation Bond rate. The repayment of the loan begins one year after
completion of construction.
FINANCIAL IMPACT:
Participating in the State Revolving Fund Loan Program will not impact the
General Fund. The loans will be paid off by the Sewer Capital Fund.
Finance Agreement No. 10- 838 -550 "College Park East" is for $2,650,000.
Finance Agreement No. 10- 842 -550, "Southern City" is for $1,100,000. The total
for both financing agreements are $3,750,000 with the ability to loan up to
$10,000,000. The funds will be drawn down over a period of years and as
needed to support the various sewer projects.
RECOMMENDATION:
It is recommended that the City Council adopt Resolution No. 6144 authorizing
the City Manager to execute the State Revolving Fund Project No. C -06 -5310-
110, Agreement No. 10- 838 -550, and State Revolving Fund Project No. C -06-
5310 -120, Agreement No. 10- 842 -550.
SUBMITTED BY: NOTED AND APPROVED:
can P. Crumby, P.E. / Jil R. Ingram
Director of Public Works A cting City Manager
Prepared by: Michael Ho, City Engineer
Attachments:
A. Resolution No. 6144
B. State Revolving Fund Project No. C -06- 5310 -110, Agreement No. 10- 838 -550
C. State Revolving Fund Project No. C -06- 5310 -120, Agreement No. 10- 842 -550
RESOLUTION NUMBER 6144
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
ADOPTING THE STATE REVOLVING FUND LOAN PROGRAM
(SEWER CAPITAL FUND)
THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:
SECTION 1. The City Council hereby adopts by resolution the State Revolving
Fund Project No. C -06- 5310 -110, Agreement No. 10- 838 -550 and State
Revolving Fund Project No. C -06- 5310 -120, Agreement No. 10- 842 -550 and
authorizes the City Manager to execute.
PASSED, APPROVED and ADOPTED by the Seal Beach City Council at a
regular meeting held on the 13th day of June 2011 by the following vote:
AYES: Council Members:
NOES: Council Members:
ABSENT: Council Members:
ABSTAIN: Council Members:
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Linda Devine, City Clerk of the City of Seal Beach, do hereby certify that the
foregoing resolution is the original copy of Resolution Number 6144 on file in
the office of the City Clerk, passed, approved, and adopted by the Seal Beach
City Council at a regular meeting held on the 13th day of June , 2011.
City Clerk
Clean Water
CITY OF SEAL BEACH
AND
CALIFORNIA STATE WATER RESOURCES CONTROL BOARD
Water Boards
PROJECT FINANCE AGREEMENT
STATE REVOLVING FUND PROJECT NO. C -06- 5310 -110
AGREEMENT NO. 10- 838 -550
AMOUNT: $2,650,000
TERM DATES: APRIL 6, 2011 - DECEMBER 9, 2031
THIS PAGE INTENTIONALLY LEFT BLANK
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City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
1.1 Definitions. 1
1.2 Exhibits and Appendices Incorporated. 4
ARTICLE II REPRESENTATIONS AND WARRANTIES 4
2.1 General Recipient Commitments. 4
2.3 Project Certification. 5
2.4 Award of Construction Contracts.
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5
2.5 Notice. 5
2.6 Project Access 6
2.7 Project Completion; Initiation of Operations. 6
2.8 Continuous Use of Project; Lease or Disposal of Project. 7
2.9 Reports. 7
2.10 Federal Disadvantaged Business Enterprise (DBE) Reporting. 7
2.11 Records 7
2.12 Audit 8
2.13 Signage 8
ARTICLE 1I1 FINANCING PROVISIONS 9
3.1 Purchase and Sale of Project 9
3.2 Amounts Payable by the Recipient 9
3.3 Obligation Absolute. 11
3.4 No Obligation of the State. 11
3.5 Disbursement of Project Funds; Availability of Funds. 11
3.6 Withholding of Disbursements. 12
3.7 Pledge; Rates, Fees and Charges; Additional Debt 12
3.8 Financial Management System and Standards 13
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
3.9 Accounting and Auditing Standards. 13
3.10 Federal or State Assistance 14
ARTICLE IV TAX COVENANTS 14
4.1 Governmental Unit. 14
4.2 Temporary Period 14
4.3 Working Capital. 14
4.4 Expenditure of Proceeds. 14
4.5 Private Use and Private Payments 14
4.6 No Disproportionate or Unrelated Use. 15
4.7 Management and Service Contracts. 15
4.8 No Disposition of Financed Property. 17
4.9 Useful Life of Project. 17
4.10 Installment Payments 17
4.11 No Other Replacement Proceeds 17
4.12 Reimbursement Resolution. 17
4.13 Change in Use. 17
4.14 No Federal Guarantee. 17
4.15 No Notices or Inquiries From IRS. 17
4.16 Amendments; Application. 17
4.17 Reasonable Expectations. 18
ARTICLE V MISCELLANEOUS PROVISIONS 18
5.1 Covenants. 18
5.2 Assignability 18
5.3 State Reviews and Indemnification. 18
5.4 Termination; Immediate Repayment; Interest. 19
5.6 Prevailing Wages. 20
5.7 Timeliness. 20
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5.8 Governing Law. 20
5.9 Amendment. 20
5.10 Bonding. 20
5.11 Compliance with Law, Regulations, etc. 20
5.12 Conflict of Interest. 21
5.13 Damages for Breach Affecting Tax Exempt Status or Federal Compliance 21
5.14 Disputes. 21
5.15 Independent Actor 21
5.17 No Third Party Rights 22
5.18 Operation and Maintenance; Insurance 22
5.19 Permits, Subcontracting, Remedies and Debarment. 23
5.20 Recipient's Responsibility for Work. 23
5.21 Related Litigation. 23
5.22 Rights in Data. 24
5.23 State Water Board Action; Costs and Attorney Fees 24
5.24 Unenforceable Provision 24
5.25 Useful Life. 24
5.26 Venue 24
5.27 Waiver and Rights of the State Water Board 24
EXHIBIT A — SCOPE OF WORK & INCORPORATED DOCUMENTS
EXHIBIT A.1 — APPROVAL OF AWARD /ELIGIBILITY DETERMINATION APPROVAL/FINAL BUDGET
EXHIBIT B — PROJECT FINANCING AMOUNT
EXHIBIT C - CWSRF PAYMENT SCHEDULE
EXHIBIT D - SPECIAL CONDITIONS
EXHIBIT E — [reserved]
EXHIBIT F — SCHEDULE OF SYSTEM OBLIGATIONS
EXHIBIT G — DAVIS -BACON REQUIREMENTS
EXHIBIT H — FEDERAL CROSS - CUTTERS
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City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
This Project Finance Agreement (including all exhibits and attachments hereto, this "Agreement ") is dated
as of the date set forth on the first page of this Agreement, by and between the State Water Resources
Control Board, an administrative and regulatory agency of the State of California (the "State Water
Board "), and the local agency identified on the first page of this Agreement, duly organized and existing
under the laws of the State of California (the "Recipient "):
WITNESSETH:
WHEREAS, the United States of America, pursuant to Title VI of the federal Water Pollution Control Act
(as such has been and may be amended from time to time, the "Clean Water Act ") requires each State to
establish a water pollution control revolving fund to be administered by an instrumentality of the State as a
condition to receipt of capitalization grants under the Clean Water Act; and
WHEREAS, the State of California (the "State ") has established a Clean Water State Revolving Fund
( "CWSRF ") pursuant to Chapter 6.5 of Division 7 of the California Water Code (the "State Act ") to be used
for purposes of the Clean Water Act; and
WHEREAS, the State Water Board has the responsibility to administer the CWSRF and to provide
financial assistance from the CWSRF to recipients for the construction of eligible projects, as provided in
• the State Act; and
WHEREAS, the State Water Board is responsible under the Clean Water Act and the State Act for
determining the eligibility of projects for financial assistance from the CWSRF, determining a reasonable
schedule for financing and construction of projects, and for ensuring compliance with the Clean Water Act
and the terms and conditions of an applicable project finance agreement; and
WHEREAS, the Recipient has submitted to the State Water Board an application for financial assistance
from the CWSRF, for the purpose of financing or refinancing the Project described below, and the State
Water Board has reviewed and approved said application; and
WHEREAS, the Recipient has or will incur costs incurred in connection with, the planning, design,
acquisition, construction and installation of the project or projects described in Exhibit A hereto (such
•
projects being herein collectively referred to as the "Project "); and
WHEREAS, on the basis of the Recipient's application and the representations and warranties set forth
herein, the State Water Board proposes to assist in the financing of the costs of the Project and /or to
refund outstanding bonds, notes or other debt obligations of the Recipient, if any, issued to finance the
Project, and the Recipient desires to participate as a recipient of financial assistance from the CWSRF
and evidence its obligation to repay, which obligation will be secured by Net Revenues (herein defined),
upon the terms and conditions as hereinafter set forth in this Agreement, all pursuant to the Clean Water
Act;
NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants and
agreements herein set forth, the State Water Board and the Recipient, each binding itself, its successors
and assigns, do mutually promise, covenant and agree as follows:
ARTICLE I DEFINITIONS
1.1 Definitions.
Unless otherwise specified, each capitalized term used in this Agreement (including the Exhibits hereto)
has the following meaning:
"Additional Payments" means the Additional Payments described in Section 3.2(c) of this Agreement.
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"Agreement" means the Project Finance Agreement, dated as of the date set forth on the first page
hereof, by and between the State Water Board and the Recipient, including all exhibits and attachments
thereto.
"Allowance" means an amount based on a percentage of the accepted bid for an eligible project to
help defray the planning, design, and construction engineering and administration costs of the
Project.
"Authorized Representative" means the Mayor of a City, the Chairperson of the County Board of
Supervisors, the Chairperson of the Board of Directors of the Recipient, or another duly appointed
representative. For all authorized representatives, a certified original of the authorizing resolution that
designates the authorized representative, by title, must accompany the first payment request, and
any other documents or requests required or allowed under this Agreement.
"Bank" means the California Infrastructure and Economic Development Bank.
"Bonds" means any series of bonds issued by the Bank all or a portion of the proceeds of which may
be applied to fund the Project in whole or in part or that are secured in whole or in part by Installment
Payments paid hereunder.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor provisions and
the regulations of the U.S. Department of the Treasury promulgated thereunder.
"Completion of Construction" means the date, as determined by the Division after consultation with
the Recipient, that the work of building and erection of the Project is substantially complete.
"Construction" includes, for the purposes of expanded use projects, implementation (but not planning
or design).
"CWSRF" means Clean Water State Revolving Fund.
"Division" means the Division of Financial Assistance of the State Water Board, or any other segment
of the State Water Board authorized to administer the CWSRF.
"Enterprise Fund" means the enterprise fund of the Recipient in which System Revenues are deposited.
"Fiscal Year means the period of twelve (12) months terminating on June 30 of any year, or any
other annual period hereafter selected and designated by the Recipient as its Fiscal Year in
accordance with applicable law.
"Force Account" means the use of the Recipient's own employees or equipment for construction of
the Project.
"Initiation of Construction" means the date that notice to proceed with work is issued for the Project,
or, if notice to proceed is not required, the date of commencement of building and erection of the
Project, or, for expanded use projects, any implementation other than planning or design.
"Installment Payments" means Installment Payments due and payable by the Recipient to the State
Water Board under this Agreement to repay the Project Costs, the amounts of which are set forth as
Exhibit C hereto.
"Material Event" means any of the following events: (a) revenue shortfalls; (b) unscheduled draws on
the reserve fund or the Enterprise Fund; (c) substitution of insurers, or their failure to perform; (d)
adverse water quality findings by the Regional Water Quality Control Board; (e) litigation related to
the System Revenues or to the Project , whether pending or anticipated.
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Net Revenues" means, for any Fiscal Year, so long as there may be outstanding System Obligations
other than the Obligation, as such term is defined under the authorizing instruments for such System
Obligations, and thereafter all Revenues received by the Recipient Tess the Operations and
Maintenance Costs for such Fiscal Year.
"Obligation" means the obligation of the Recipient to make Installment Payments and Additional
Payments as provided herein, as evidenced by the execution of this Agreement, proceeds of such
obligations being used to fund the Project as specified in the Project Description attached hereto as
Exhibit A and in the documents thereby incorporated by reference.
"Operations and Maintenance Costs" means, so long as outstanding System Obligations other than
the Obligation are outstanding, the definition of such term as defined therein, and thereafter, the
reasonable and necessary costs paid or incurred by the Recipient for maintaining and operating the
System, determined in accordance with generally accepted accounting principles, including all
reasonable expenses of management and repair and all other expenses necessary to maintain and
preserve the System in good repair and working order, and including all reasonable and necessary
administrative costs of the Recipient that are charged directly or apportioned to the operation of the
System, such as salaries and wages of employees, overhead, taxes (if any), the cost of permits,
licenses and charges to operate the System and insurance premiums; but excluding, in all cases
depreciation, replacement and obsolescence charges or reserves therefor and amortization of
intangibles.
"Policy" means the State Water Board's "Policy for Implementing the State Revolving Fund for
Construction of Wastewater Treatment Facilities," as most recently amended, the State Water
Board's "Strategy for Implementing State Revolving Fund for Expanded Use Projects ", as
appropriate, and Board Resolution 2009 -0027.
"Project" means the Project as described in Exhibit A and in the documents thereby incorporated by
reference.
"Project Completion" for the purposes of a wastewater or water recycling project, means the date, as
determined by the Division after consultation with the Recipient, that operation of the Project is
initiated or is capable of being initiated, whichever comes first. For the purposes of all other projects,
"Project Completion" means the date that all tasks in Exhibit A are completed to the reasonable
satisfaction of the Division. This date shall be synonymous with the date specified in the "Initiation of
Operation" form submitted as part of the Approval of Award package, if any.
"Project Costs" means the incurred costs of the Recipient which are eligible for financial assistance
from the CWSRF under the federal Clean Water Act, which are allowable costs as defined under the
Policy and which are reasonable, necessary and allocable by the Recipient to the Project under
generally accepted accounting principles, plus capitalized interest. For the purposes of all other
projects, "Project Costs" means those costs incurred by the Recipient for the planning, design, and
implementation of the project as set forth in Exhibit A; this includes any monitoring, reporting,
education and outreach, or direct administrative costs associated with these tasks and deemed
necessary by the Division.
"Project Funds" means funds disbursed by the State Water Board to the Recipient for purposes of
this Agreement.
"Recipient" means the recipient of Project Funds, as identified on the front page of this Agreement.
"Revenues" means, for each Fiscal Year, all gross income and revenue received or receivable by the
Recipient from the ownership or operation of the System, determined in accordance with generally
accepted accounting principles, including all rates, fees and charges (including connection fees and
charges) as received by the Recipient for the services of the System, and all other income and
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revenue howsoever derived by the Recipient from the ownership or operation of the System or
arising from the System, including all income from the deposit or investment of any money in the
Enterprise Fund or any rate stabilization fund of the Recipient or held on the Recipient's behalf, and
any refundable deposits made to establish credit, and advances or contributions in aid of
construction.
"State" means State of California.
"State Water Board" means the State Water Resources Control Board, an administrative and
regulatory agency of the State of California.
"System" means for the purposes of a wastewater project, all wastewater collection, transport,
treatment, storage and disposal facilities, including land and easements thereof, owned by the
Recipient, including the Project, and all other properties, structures or works hereafter acquired and
constructed by the Recipient and determined to be a part of the System, together with all additions,
betterments, extensions or improvements to such facilities, properties, structures or works or any
part thereof hereafter acquired and constructed. For the purposes of a water recycling project,
"System" means all wastewater, water recycling, and/or potable water collection, transport, treatment,
storage and /or disposal facilities, including land and easements thereof, owned by the Recipient,
including the Project, and all other properties, structures or works hereafter acquired and constructed
by the Recipient and determined to be a part of the System, together with all additions, betterments,
extensions or improvements to such facilities, properties, structures or works or any part thereof
hereafter acquired and constructed. For the purposes of all other projects, "System" means all
nonpoint source control or estuary enhancement facilities, including land and easements thereof,
owned by the Recipient, including the Project, and all other properties, structures or works hereafter
acquired and constructed by the Recipient and determined to be a part of the System, together with
all additions, betterments, extensions or improvements to such facilities, properties, structures or
works or any part thereof hereafter acquired and constructed.
"System Obligations" means all senior, parity and subordinate obligations of the Recipient payable
from Revenues as identified as of the date of this Agreement in Exhibit F and such additional
obligations as may hereafter be issued in accordance with the provisions of such obligations.
1.2 Exhibits and Appendices Incorporated.
All exhibits and appendices to this Agreement, including any amendments and supplements hereto, are
hereby incorporated herein and made a part of this Agreement.
ARTICLE II REPRESENTATIONS AND WARRANTIES
2.1 General Recipient Commitments.
The Recipient accepts and agrees to comply with all terms, provisions, conditions, and commitments
of this Agreement, including all incorporated documents, and to fulfill all assurances, declarations,
representations, and commitments made by the Recipient in its application, accompanying
documents, and communications filed in support of its request for financial assistance.
2.2 Completion of Project.
The Recipient agrees to expeditiously proceed with and complete construction of the Project in
substantial accordance with Exhibit A.
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2.3 Project Certification.
For wastewater or water recycling projects, one (1) year after initiation of operation, the Recipient
shall certify to the State Water Board whether or not the Project, as of that date, meets applicable
design specifications and effluent limitations. If the Recipient cannot certify that the Project meets
such specifications and limitations at that time, the Recipient shall submit a corrective action report.
The corrective action report shall include an estimate of the nature, scope, and cost of the corrective
action, and a time schedule to expeditiously make all needed corrections, at the Recipient's expense,
to allow affirmative certification for the Project.
For all other projects, the Recipient shall prepare a Project Certification that includes information
collected by the Recipient in accordance with the Project monitoring and reporting plan, a
determination of the effectiveness of the Project in preventing or reducing pollution, and the results of
the monitoring program. The Project Certification shall follow the general format provided by the
Program Manager.
Failure to submit a Project Certification, an affirmative certification, or a corrective action report that
meets the above requirements and is satisfactory to the Division within fifteen (15) months of the
Project Completion date will cause the State Water Board to stop processing any pending or future
applications for new financial assistance, withhold payments on any existing financial assistance, and
begin administrative proceedings pursuant to sections 13267 and 13268 of the Water Code.
2.4 Award of Construction Contracts.
(a) The Recipient agrees to award the prime construction contract no later than the date specified in
Exhibit A.
(b) The Recipient agrees to promptly notify the Division in writing both of the award of the prime
construction contract for the Project and of Initiation of Construction of the Project. The Recipient
agrees to make all reasonable efforts to complete construction in substantial conformance with
the terms of the contract by the Completion of Construction date established in Exhibit A. Such
date shall be binding upon the Recipient unless modified in writing by the Division upon a
showing of good cause by the Recipient. The Recipient shall deliver any request for extension of
the Completion of Construction date no less than 90 days prior to the Completion of Construction
date. The Division will not unreasonably deny such a timely request, but the Division will deny
requests received after this time.
2.5 Notice.
The Recipient agrees to promptly notify the Division in writing of:
(a) Litigation, circulation of a petition to challenge rates, consideration of bankruptcy, dissolution, or
disincorporation, or any other thing that could negatively affect or jeopardize the Recipient's
Revenues;
(b) Any substantial change in scope of the Project. The Recipient agrees that no substantial change
in the scope of the Project will be undertaken until written notice of the proposed change has
been provided to the Division and the Division has given written approval for such change;
(c) Cessation of all major construction work on the Project where such cessation of work is expected
to or does extend for a period of thirty (30) days or more;
(d) Any circumstance, combination of circumstances, or condition, which is expected to or does
delay Completion of Construction for a period of ninety (90) days or more beyond the estimated
date of Completion of Construction previously provided to the Division;
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(e) Discovery of any potential archeological or historical resource. Should a potential archeological
or historical resource be discovered during construction of the Project, the Recipient agrees that
all work in the area of the find will cease until a qualified archeologist has evaluated the situation
and made recommendations regarding preservation of the resource, and the Division has
determined what actions should be taken to protect and preserve the resource. The Recipient
agrees to implement appropriate actions as directed by the Division;
(f) Discovery of any unexpected endangered or threatened species, as defined in the federal
Endangered Species Act. Should a federally protected species be unexpectedly encountered
during construction of the Project, the Recipient agrees to promptly notify the Division. This
notification is in addition to the Recipient's obligations under the federal Endangered Species Act;
(g) Any monitoring, demonstration, or other implementation activities such that the State Water
Board and/or Regional Water Quality Control Board (Regional Water Board) staff may observe
and document such activities;
(h) Any public or media event publicizing the accomplishments and/or results of this Agreement and
provide the opportunity for attendance and participation by state and federal representatives with
at least ten (10) working days notice;
(i) Completion of Construction of the Project, and actual Project Completion; or
(j) Material Events.
2.5.5 Findings and Challenge
Upon consideration of a voter initiative to reduce System Revenues, the Recipient shall make a
finding regarding the effect of such a reduction on the Recipient's ability to satisfy its Obligation under
this Agreement and to operate and maintain the Project for its useful life. The Recipient agrees to
challenge any such initiative that it finds will render it unable to satisfy either the Obligation or the
covenant to operate and maintain, or both. The Recipient shall diligently pursue and bear any and all
costs related to such challenge. The Recipient shall notify and regularly update the State Water
Board regarding any such challenge.
2.6 Project Access.
The Recipient agrees to insure that the State Water Board, the Governor of the State, the United
States Environmental Protection Agency, the Office of Inspector General, any member of Congress,
the President of the United States, or any authorized representative of the foregoing, will have
suitable access to the Project site at all reasonable times during Project construction and thereafter
for the term of the Obligation. The Recipient acknowledges that the Project records and locations
are public records.
2.7 Project Completion; Initiation of Operations.
Upon Completion of Construction of the Project, the Recipient agrees to expeditiously initiate Project
operations. The Recipient agrees to make all reasonable efforts to meet the Project Completion date
established in Exhibit A. Such date shall be binding upon the Recipient unless modified in writing by
the Division upon a showing of good cause by the Recipient. The Recipient shall deliver any request
for extension of the Project Completion date no Tess than 90 days prior to the Project Completion
date. The Division will not unreasonably deny such a timely request, but the Division will deny
requests received after this time.
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2.8 Continuous Use of Project; Lease or Disposal of Project.
The Recipient agrees that, except as provided in the Agreement, it will not abandon, substantially
discontinue use of, lease, or dispose of the Project or any significant part or portion thereof during the
useful life of the Project without prior written approval of the Division. Such approval may be
conditioned as determined to be appropriate by the Division, including a condition requiring
repayment of all or any portion of all remaining funds covered by this Agreement together with
accrued interest and any penalty assessments which may be due.
2.9 Reports.
(a) Quarterly Reports. The Recipient agrees to expeditiously provide status reports no less
frequently than quarterly, starting with the execution of this Agreement. At a minimum the
reports will contain the following information: a summary of progress to date including a
description of progress since the last report, percent construction complete, percent contractor
invoiced, and percent schedule elapsed; a description of compliance with environmental
requirements; a listing of change orders including amount, description of work, and change in
contract amount and schedule; any problems encountered, proposed resolution, schedule for
resolution, and status of previous problem resolutions.
(b) As Needed Reports. The Recipient agrees to expeditiously provide, during the term of this
Agreement, such reports, data, and information as may be reasonably required by the Division,
including but not limited to material necessary or appropriate for evaluation of the CWSRF
Program or to fulfill any reporting requirements of the federal government.
2.10 Federal Disadvantaged Business Enterprise (DBE) Reporting.
The Recipient agrees to report DBE utilization to the Division on the DBE Utilization Report, State
Water Board Form DBE UR334. Reports must be submitted to the Division semiannually within ten
(10) calendar days following April 1 and October 1 until such time as the "Notice of Completion" is
issued. The Recipient agrees to comply with 40 CFR Section 33.301.
2.11 Records.
(a) Without limitation of the requirement to maintain Project accounts in accordance with generally
accepted accounting principles the Recipient agrees to:
(1) Establish an official file for the Project which shall adequately document all significant actions
relative to the Project;
(2) Establish separate accounts which will adequately and accurately depict all amounts
received and expended on the Project, including all assistance funds received under this
Agreement;
(3) Establish separate accounts which will adequately depict all income received which is
attributable to the Project, specifically including any income attributable to assistance funds
disbursed under this Agreement;
(4) Establish an accounting system which will accurately depict final total costs of the Project,
including both direct and indirect costs;
(5) Establish such accounts and maintain such records as may be necessary for the State to
fulfill federal reporting requirements, including any and all reporting requirements under
federal tax statutes or regulations; and
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(6) If Force Account is used by the Recipient for any phase of the Project, other than for
• planning, design and construction engineering, and administration provided for by allowance,
accounts will be established which reasonably document all employee hours charged to the
Project and the associated tasks performed by each employee. Indirect Force Account costs
are not eligible for funding.
(b) The Recipient shall be required to maintain books, records and other material relative to the
Project in accordance with generally accepted accounting principles. The Recipient shall also be
required to retain such books, records, and other material for each subcontractor who performed
work on this project for a minimum of six (6) years after repayment of Project Funds. The
Recipient shall require that such books, records, and other material be subject at all reasonable
times (at a minimum during normal business hours) to inspection, copying, and audit by the State
Water Board, the Bureau of State Audits, the United States Environmental Protection Agency
(USEPA), the Office of Inspector General, or any authorized representatives of the
aforementioned, and shall allow interviews during normal business hours of any employees who
might reasonably have information related to such records. The Recipient agrees to include a
similar right regarding audit, interviews, and records retention in any subcontract related to the
performance of this Agreement.
2.12 Audit.
(a) The Division, at its option, may call for an audit of financial information relative to the Project,
where the Division determines that an audit is desirable to assure program integrity or where
such an audit becomes necessary because of federal requirements. Where such an audit is
called for, the audit shall be performed by a certified public accountant independent of the
Recipient and at the cost of the Recipient. The audit shall be in the form required by the Division.
(b) Audit disallowances will be returned to the State Water Board.
2.13 Signage.
The Recipient shall place a sign at least four feet tall by eight feet wide made of 3 /4 inch thick exterior
r grade plywood or other approved material in a prominent location on the Project site. The sign shall
include the following color logos:
Clean Water
Water Boards
(logos available from the Division) and the following disclosure statement:
Funding for this project has been provided in full or in part by the Clean Water State
Revolving Fund through an agreement with the State Water Resources Control Board.
The Project sign may include another agency's required promotional information so long as the
above logos and disclosure statement are equally prominent on the sign. The sign shall be prepared
in a professional manner.
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Include the following disclosure statement in any document, written report, or brochure prepared in
whole or in part pursuant to this Agreement:
Funding for this project has been provided in full or in part through an agreement with the
State Water Resources Control Board. The contents of this document do not necessarily
reflect the views and policies of the State Water Resources Control Board, nor does
mention of trade names or commercial products constitute endorsement or
recommendation for use. (Gov. Code § 7550, 40 CFR § 31.20.)
ARTICLE III FINANCING PROVISIONS
3.1 Purchase and Sale of Project.
The Recipient hereby sells to the State Water Board and the State Water Board hereby purchases
from the Recipient the Project. Simultaneously therewith, the Recipient hereby purchases from the
State Water Board, and the State Water Board hereby sells to the Recipient, the Project in
accordance with the provisions of this Agreement. All right, title and interest in the Project shall
immediately vest in the Recipient on the date of execution and delivery of this Agreement without
further action on the part of the Recipient or the State Water Board.
3.2 Amounts Payable by the Recipient.
(a) Installment Payments. Repayment of the Project Funds, together with all interest accruing
thereon, shall be repaid in annual installments commencing on the date that is one (1) year after
Completion of Construction, and shall be fully amortized by the date specified in Exhibit B.
The repayment amount is based on a standard fully amortized assistance amount with equal
annual repayments. The remaining balance is the previous balance, plus the disbursements,
plus the accrued interest on both, less the repayment. Repayment calculations will be made
beginning one (1) year after Completion of Construction and shall be fully amortized not later
than the date specified in Exhibit B. Exhibit C is a CWSRF Payment Schedule based on the
provisions of this article and an estimated disbursement schedule. The actual repayments will be
based on actual disbursements.
Upon Completion of Construction and submission of necessary reports, the Division will prepare
an appropriate CWSRF Payment Schedule and supply the same to the Recipient. The CWSRF
Payment Schedule may be amended as necessary to accurately reflect amounts due under this
Agreement. Any amended CWSRF Payment Schedule which is necessary will be prepared by
the Division and furnished to the Recipient.
The Recipient agrees to make each installment payment on or before the due date therefor. A
ten (10) day grace period will be allowed, after which time a penalty in the amount of costs
incurred to the State Water Board will be assessed for late payment. These costs may include,
but are not limited to, lost interest earnings, staff time, bond debt service default penalties, if any,
and other costs incurred. Penalties assessed will not change the principal balance of the
financing Agreement. Such penalties will be treated as a separate receivable in addition to the
annual payment due. For purposes of penalty assessment, repayment will be deemed to have
been made if repayment is deposited in the U.S. Mail within the grace period with postage
prepaid and properly addressed. Any penalties assessed will not be added to the assistance
amount balance, but will be treated as a separate account and obligation of the Recipient. The
interest penalty will be assessed from the repayment due date.
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The Recipient as a whole is obligated to make all payments required by this Agreement to the
State Water Board, notwithstanding any individual default by its constituents or others in the
payment to the Recipient of fees, charges, taxes, assessments tolls or other charges
( "Charges ") levied or imposed by the Recipient. The Recipient shall provide for the punctual
payment to the State Water Board of all amounts which become due under this Agreement and
which are received from constituents or others in the payment to the Recipient. In the event of
failure, neglect or refusal of any officer of the Recipient to levy or cause to be levied any Charge
to provide payment by the Recipient under this Agreement, to enforce or to collect such Charge,
or to pay over to the State Water Board any money collected on account of such Charge
necessary to satisfy any amount due under this Agreement, the State Water Board may take
such action in a court of competent jurisdiction as it deems necessary to compel the
performance of all duties relating to the imposition or levying and collection of any of such
Charges and the payment of the money collected therefrom to the State Water Board. Action
taken pursuant hereto shall not deprive the State Water Board of, or limit the application of, any
other remedy provided by law or by this Agreement.
Attached as Exhibit C is a CWSRF Payment Schedule based on the provisions of this section
and an estimated disbursement schedule. CWSRF Payment Schedule will be revised based on
•
actual disbursements following Completion of Construction.
Each Installment Payment shall be paid by check and in lawful money of the United States of
America.
The Recipient agrees that it shall not be entitled to interest earned on undisbursed project funds.
Upon execution of this Agreement, the State Water Board shall encumber an amount equal to
the Obligation. The Recipient hereby agrees to pay Installment Payments and Additional
Payments from Net Revenues and/or other amounts legally available to the Recipient therefor.
Interest on any funds disbursed to the Recipient shall begin to accrue as of the date of each
disbursement.
(b) Project Costs. The Recipient agrees to pay any and all costs connected with the Project
including, without limitation, any and all Project Costs. If the Project Funds are not sufficient to
pay the Project Costs in full, the Recipient shall nonetheless complete the Project and pay that
portion of the Project Costs in excess of available Project Funds, and shall not be entitled to any
reimbursement therefor from the State Water Board.
(c) Additional Payments. In addition to the Installment Payments required to be made by the
Recipient, the Recipient shall also pay to the State Water Board the reasonable extraordinary
fees and expenses of the State Water Board, and of any assignee of the State Water Board's
right, title and interest in and to this Agreement, in connection with this Agreement, including all
expenses and fees of accountants, trustees, attorneys, litigation costs, insurance premiums and
all other extraordinary costs reasonably incurred by the State Water Board or assignee of the
State Water Board.
Additional Payments shall be billed to the Recipient by the State Water Board from time to time,
together with a statement executed by a duly authorized representative of the State Water Board,
stating that the amounts billed pursuant to this section have been incurred by the State Water
Board or its assignee for one or more of the above items and a copy of the invoice or statement
for the amount so incurred or paid. Amounts so billed shall be paid by the Recipient within thirty
(30) days after receipt of the bill by the Recipient.
(d) The Recipient may without penalty prepay all or any portion of the outstanding principal amount
of the Obligation provided that the Recipient shall also pay at the time of such prepayment all
accrued interest on the principal amount prepaid through the date of prepayment.
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3.3 Obligation Absolute.
The obligation of the Recipient to make the Installment Payments and other payments required to be
made by it under this Agreement, from Net Revenues and /or other amounts legally available to the
Recipient therefor, is absolute and unconditional, and until such time as the Installment Payments
and Additional Payments have been paid in full, the Recipient shall not discontinue or suspend any
Installment Payments or other payments required to be made by it hereunder when due, whether or
not the System or any part thereof is operating or operable or has been completed, or its use is
suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such
Installment Payments and other 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.
3.4 No Obligation of the State.
Any obligation of the State Water Board herein contained shall not be an obligation, debt or liability of
the State and any such obligation shall be payable solely out of the moneys in the CWSRF made
available pursuant to this Agreement.
3.5 Disbursement of Project Funds; Availability of Funds.
(a) Except as may be otherwise provided in this Agreement, disbursement of Project Funds will be
made as follows:
(1) Upon execution and delivery of this Agreement, the Recipient may request immediate
disbursement of any eligible incurred planning and design allowance as specified in Exhibit
B from the Project Funds through submission to the State Water Board of the Disbursement
Request Form 260, or any amendment thereto, duly completed and executed.
(2) The Recipient may request disbursement of eligible construction and equipment costs
consistent with budget amounts referenced in Exhibit B. (Note that this Agreement will be
amended to incorporate Approval of Award.)
(3) Additional Project Funds will be promptly disbursed to the Recipient upon receipt of
Disbursement Request Form 260, or any amendment thereto, duly completed and executed
by the Recipient for incurred costs consistent with this Agreement, along with receipt of
status reports due under Section 2.9 above.
(4) The Recipient agrees that it will not request disbursement for any Project Cost until such
cost has been incurred and is currently due and payable by the Recipient, although the
actual payment of such cost by the Recipient is not required . as a condition of disbursement
request.
(5) Recipient shall spend Project Funds within 30 days of receipt. Any interest earned on
Project Funds shall be reported to the State Water Board and may be required to be
returned to the State Water Board or deducted from future disbursements.
(6) [reserved]
(7) Notwithstanding any other provision of this Agreement, no disbursement shall be required at
any time or in any manner which is in violation of or in conflict with federal or state laws,
policies, or regulations.
(b) The State Water Board's obligation to disburse Project Funds is contingent upon the availability
of sufficient funds to permit the disbursements provided for herein. If sufficient funds are not
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available for any reason, including but not limited to failure of the federal or State government to
appropriate funds necessary for disbursement of Project Funds, the State Water Board shall not
be obligated to make any disbursements to the Recipient under this Agreement. This provision
shall be construed as a condition precedent to the obligation of the State Water Board to make
any disbursements under this Agreement. Nothing in this Agreement shall be construed to
provide the Recipient with a right of priority for disbursement over any other agency. If any
disbursements due the Recipient under this contract are deferred because sufficient funds are
unavailable, such disbursement will be made to the Recipient when sufficient funds do become
available.
3.6 Withholding of Disbursements.
(a) The State Water Board may withhold all or any portion of the funds provided for by this
Agreement in the event that:
(1) The Recipient has materially violated, or threatens to materially violate, any term, provision,
condition, or commitment of this Agreement; or
(2) The Recipient fails to maintain reasonable progress toward completion of the Project.
(b) For the purposes of this section, the terms "material violation" or "threat of material violation"
include, but are not limited to:
(1) Placement on the ballot of an initiative to reduce revenues securing this Agreement;
(2) Passage of such an initiative;
(3) Successful challenges by ratepayer(s) to process used by Recipient to set, dedicate, or
otherwise secure revenues used for securing this Agreement; or
(4) Any other action or lack of action that may be construed as a material violation or threat
thereof.
3.7 Pledge; Rates, Fees and Charges; Additional Debt.
(a) Establishment of Enterprise Fund. In order to carry out its System Obligations, including the
Obligation, the Recipient agrees and covenants that it shall establish and maintain or shall have
established and maintained the Enterprise Fund. All Revenues received shall be deposited when
and as received in trust in the Enterprise Fund. This requirement applies to Recipients that are
public agencies.
(b) Pledge of Net Revenues. The Obligation hereunder shall be secured by a lien on and pledge of
Net Revenues in priority as specified in Exhibit F. The Recipient hereby pledges and grants such
lien on and pledge of Net Revenues to secure the Obligation, including payment of Installment
Payments and Additional Payments hereunder. The Net Revenues in the Enterprise Fund shall
be subject to the lien of such pledge without any physical delivery thereof or further act, and the
lien of such pledge shall be valid and binding as against all parties having claims of any kind in
tort, contract or otherwise against the Recipient.
(c) Application and Purpose of the Enterprise Fund. Subject to the provisions of any outstanding
System Obligations, money on deposit in the Enterprise Fund shall be applied and used first, to
pay Operations and Maintenance Costs, and thereafter, all amounts due and payable with
respect to the System Obligations. After making all payments hereinabove required to be made
in each Fiscal Year, the Recipient may expend in such Fiscal Year any remaining money in the
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Enterprise Fund for any lawful purpose of the Recipient, including payment of subordinate debt.
This requirement applies to Recipients that are public agencies.
(d) Rates, Fees and Charges. The Recipient agrees, to the extent permitted by law, to fix, prescribe
and collect rates, fees and charges for the System during each Fiscal Year which are
reasonable, fair and nondiscriminatory and which will be at least sufficient to yield during each
Fiscal Year Net Revenues equal to the debt service on System Obligations, including the
Obligation, for such Fiscal Year. The Recipient may make adjustments from time to time in such
fees and charges and may make such classification thereof as it deems necessary, but shall not
reduce the rates, fees and charges then in effect unless the Net Revenues from such reduced
rates, fees and charges will at all times be sufficient to meet the requirements of this section.
The Recipient agrees to promptly challenge any initiative that would impair the Obligation and
publicly state its opposition to any rate challenges. This requirement applies to Recipients that
are public agencies.
(e) Future Debt. The Recipient's future debt may not be senior to CWSRF debt. The Recipient's
future local debt may be on parity with the CWSRF debt if the following conditions are met:
(1) The Recipient's net revenues pledged to pay all senior debts relying on the pledged
revenue source are at least 1.2 times the highest year's debt service and net revenues
pledged to pay all debts are at least 1.1 times the highest year's debt service; and
• (2) One of the following conditions is met:
(A) The Recipient's proposed parity Additional Obligation is rated "A," or higher, by at
least two nationally recognized rating agencies; or
(B) The Recipient is a disadvantaged community and the Division determines that it
would be economically burdensome for the agency to obtain nationally recognized
ratings for its parity debt; or
(C) The Recipient is a disadvantaged community and the Division determines that
requiring the proposed Additional Obligations to be subordinate to the Recipient's
Obligations hereunder will unduly restrict the Recipients from obtaining future
system debt necessary for water quality improvements.
3.8 Financial Management System and Standards.
The Recipient agrees to comply with federal standards for financial management systems. The
Recipient agrees that, at a minimum, its fiscal control and accounting procedures will be sufficient to
permit preparation of reports required by the federal government and tracking of Project funds to a
level of expenditure adequate to establish that such funds have not been used in violation of federal
or state law or the terms of this Agreement. To the extent applicable, the Recipient agrees to be
bound by and to comply with, the provisions and requirements of the federal Single Audit Act of 1984
(Pub. L.98 -502) Office of Management and Budget (OMB) Circular No. A -133, and updates or
revisions, thereto.
3.9 Accounting and Auditing Standards.
The Recipient will maintain separate Project accounts in accordance with generally accepted
accounting principles. The Recipient shall comply with "Standards for Audit of Governmental
Organizations, Programs, Activities and Functions" promulgated by the U.S. General Accounting
Office. (40 CFR § 35.3135(1).)
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3.10 Federal or State Assistance.
If federal or state funding for Project Costs is made available to the Recipient from sources other
than the CWSRF, the Recipient may retain such funding up to an amount which equals the
Recipient's local share of Project Costs. To the extent allowed by requirements of other funding
sources, any funding received in excess of the Recipient's local share, not to exceed the total
amount of the CWSRF financing assistance, shall be remitted to the State Water Board to be applied
to Installment Payments due hereunder.
ARTICLE IV TAX COVENANTS
4.1 Governmental Unit.
The Recipient is a state or local governmental unit as defined in Section 1.103 -1 of the Treasury
Regulations or an instrumentality thereof (a "Governmental Unit ") and is not the federal government
or any agency or instrumentality thereof. The Recipient exclusively owns and, except as provided in
Section 4.7 hereof, operates the Project.
4.2 Temporary Period.
The Recipient reasonably expects that at least eighty -five percent (85 %) of the Project Funds will be
allocated to expenditures for the Project within three (3) years of the earlier of the effective date of
this Agreement or the date the Bonds are issued ( "Applicable Date "). The Recipient has incurred, or
reasonably expects that it will incur within six (6) months of the Applicable Date, a substantial binding
obligation (i.e., not subject to contingencies within the control of the Recipient or a related party) to a
third party to expend at least five percent (5 %) of the Project Funds on the costs of the Project. The
completion of acquisition, construction, improvement and equipping of the Project and the allocation
of Project Funds to expenditures for the Project will proceed with due diligence.
•
4.3 Working Capital.
No operational expenditures of the Recipient or any related entity are being, have been or will be
financed or refinanced with Project Funds. •
4.4 Expenditure of Proceeds.
Project Funds shall be used exclusively for the following purposes: (i) architectural, engineering,
surveying, soil testing, and similar costs paid with respect to the Project incurred prior to the
commencement of construction and in an aggregate amount not exceeding twenty percent (20 %) of
the Project Funds, (ii) capital expenditures relating to the Project originally paid by the Recipient on
or after the date hereof, (iii) interest on the Obligation through the later of three (3) years after the
Applicable Date or one (1) year after the Project is placed in service, and (iv) initial operating
expenses directly associated with the Project in the aggregate amount not more than five percent
(5 %) of the Project Funds.
4.5 Private Use and Private Payments.
•
None of the Project Funds or the Project are, have been or will be used in the aggregate for any
activities that constitute a Private Use (as defined below). None of the principal of or interest with
respect to the Installment Payments will be secured by any interest in property (whether or not the
Project) used for a Private Use or in payments in respect of property used for a Private Use, or will be
derived from payments in respect of property used for a Private Use. "Private Use" means any
activity that constitutes a trade or business that is carried on by persons or entities, other than a
Governmental Unit. The leasing of the Project or the access by or the use of a person or entity other
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than a Governmental Unit on a basis other than as a member of the general public shall constitute a
Private Use.
4.6 No Disproportionate or Unrelated Use.
None of the Project Funds or the Project are, have been or will be used for a Private Use that is
unrelated or disproportionate to the governmental use of the Project Funds.
4.7 Management and Service Contracts.
With respect to management and service contracts, the determination of whether a particular use
constitutes Private Use shall be determined on the basis of applying Section 1.141- 3(b)(4) of the
Treasury Regulations and Revenue Procedure 97 -13 and other applicable rules and regulations. As
of the date hereof, none of the Project Funds or the Project are being used to provide property
subject to contracts or other arrangements with persons or entities engaged in a trade or business
(other than Governmental Units) that involve the management of property or the provision of services
that do not comply with the standards of the Treasury Regulations and Revenue Procedure 97 -13.
Except to the extent the Recipient has received an opinion of counsel expert in the issuance of state
and local government bonds the interest on which is excluded from gross income under Section 103
of the Code ( "Nationally- Recognized Bond Counsel ") and satisfactory to the State Water Board and
the Bank to the contrary, the Recipient will not enter into any management or service contracts with
any person or entity that is not a Governmental Unit for services to be provided with respect to the
Project except with respect to contracts where the following requirements are complied with: (i) the
compensation is reasonable for the services rendered; (ii) the compensation is not based, in whole or
in part, on a share of net profits from the operation of the Project; (iii) not more than twenty percent
(20 %) of the voting power of the Recipient in the aggregate may be vested in the service provider
and its directors, officers, shareholders and employees and vice versa; (iv) any overlapping board
members between the Recipient and the service provider must not include the chief executive officer
or executive director of either, or their respective governing bodies; and (v):
(a) At least ninety-five percent (95 %) of the compensation for services for each annual period during
the term of the contract is based on a periodic fixed fee which is a stated dollar amount for
services rendered for a specified period of time. The stated dollar amount may automatically
increase according to a specified objective external standard that is not linked to the output or
efficiency of a facility, e.g., the Consumer Price Index and similar external indices that track
increases in prices in an area or increases in revenues or costs in an industry are objective
external standards. A fee shall not fail to qualify as a periodic fixed fee as a result of a one (1)
time incentive award during the term of the contract under which compensation automatically
increases when a gross revenue or expense target (but not both) is reached if that award is a
single stated dollar amount. The term of the contract, including all renewal options, must not
exceed the lesser of eighty percent (80 %) of the reasonably expected useful life of the financed
property and fifteen (15) years (twenty (20) years for "public utility property" within the meaning of
Section 168(i)(10) of the Code);
(b) At least eighty percent (80 %) of the compensation for services for each annual period during the
term of the contract is based on a periodic fixed fee. The term of the contract, including all
renewal options, must not exceed the lesser of eighty percent (80 %) -of the reasonably expected
useful life of the financed property and ten (10) years. A one (1) time incentive award during the
term of the contract similar to the award described in subsection (a) above is permitted under
this option as well;
(c) At least fifty percent (50 %) of the compensation for services for each annual period during the
term of the contract is based on a periodic fixed fee or all of the compensation for services is
based on a capitation fee or combination of a periodic fixed fee and a capitation fee. A capitation
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fee is a fixed periodic amount for each person for whom the service provider or the Recipient
assumes the responsibility to provide all needed services for a specified period so long as the
quantity and type of services actually provided to covered persons vary substantially; e.g., a fixed
dollar amount payable per month to a service provider for each member of a plan for whom the
provider agrees to provide all needed services for a specified period. A capitation fee may
include a variable component of up to twenty percent (20 %) of the total capitation fee designed to
protect the service provider against risks such as catastrophic Toss. The term of the contract,
including all renewal options, must not exceed five (5) years. The contract must be terminable by
the Recipient on reasonable notice without penalty or cause, at the end of the third year of the
contract;
(d) All of the compensation for services is based on a per -unit fee or a combination of a per -unit fee
and a periodic fee. A per -unit fee is defined to mean a fee based on a unit of service provided as
specified in the contract or otherwise specifically determined by an independent third party, such
as the administrator of the program or the Recipient; e.g., a stated dollar amount for each
specified procedure performed, car parked or passenger mile is a per -unit fee. The term of the
contract, including all renewal options, must not exceed three (3) years. The contract must be
terminable by the Recipient on reasonable notice, without penalty or cause, at the end of the
second year of the contract term; or
(e) All of the compensation for services is based on a percentage of fees charged or a combination
of a per -unit fee and a percentage of revenue or expense fee. During the start up period,
however, compensation may be based on a percentage of either gross revenues, adjusted gross
revenues or expenses of a facility. The term of the contract, including renewal options, must not
exceed two (2) years. The contract must be terminable by the Recipient on reasonable notice
without penalty or cause, at the end of the first year. This type �f contract is permissible only with
respect to contracts under which the service provider primarily provides services to third parties,
and management contracts involving a facility during an initial start-up period for which there
have been insufficient operations to establish a reasonable estimate of the amount of the annual
gross revenues and expenses (e.g., a contract for general management services for the first
year of the operations).
If the compensation terms of a management or service contract are materially revised, the
requirements for compensation terms must be retested as of the date of the material revision
and the management or service contract is treated as one that was newly entered into as of the
date of the material revision.
A renewal option, for purposes of the foregoing, is defined to mean a provision under which the
service provider has a legally enforceable right to renew the contract. Thus, for example, a
provision under which a contract is automatically renewed for one (1) year periods absent
cancellation by either party is not a renewal option, even if it is expected to be renewed.
A cancellation penalty is defined to include a limitation on the Recipient's ability to compete with
the service provider, a requirement that the Recipient purchase equipment, goods or services
from the service provider, and a requirement that the Recipient pay liquidated damages for
cancellation of the contract; in comparison, a requirement effective on cancellation that the
Recipient reimburse the service provider for ordinary and necessary expenses or a restriction
against the Recipient hiring key personnel of the service provider is generally not a contract
termination penalty. Another contract between the service provider and the Recipient, such as
an Installment Sale Agreement or guarantee by the service provider, is treated as creating a
contract termination penalty if that contract contains terms that are not customary or arm's
length, that could operate to prevent the Recipient from terminating the contract (e.g., provisions
under which the contract terminates if the management contract is terminated or that places
substantial restrictions on the selection of a substitute service provider).
•
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The service provider must not have any role or relationship with the Recipient, that, in effect,
substantially limits the Recipient's ability to exercise its rights, including cancellation rights, under
the contract, based on all the facts and circumstances.
4.8 No Disposition of Financed Property.
The Recipient does not expect to sell or otherwise dispose of any portion of the Project, in whole or in
part, prior to the final maturity date of the Obligation.
4.9 Useful Life of Project.
The economic useful life of the Project, commencing at Project Completion, is at least equal to the
term of this Agreement, as set forth on Exhibit B hereto.
4.10 Installment Payments.
Installment Payments generally are expected to be derived from current revenues of the Recipient in
each year, and current revenues are expected to equal or exceed debt service on the Obligation
during each payment period.
4.11 No Other Replacement Proceeds.
The .Recipient will not use any of the Project Funds to replace funds of the Recipient which are or will
be used to acquire investment property reasonably expected to produce a yield that is materially
higher than the yield on the Bonds.
4.12 Reimbursement Resolution.
See Exhibit E, Recipient Reimbursement Resolution.
4.13 Change in Use.
The Recipient reasonably expects to use all Project Funds and the Project for the entire stated term
to maturity of the Obligation. Absent an opinion of Nationally- Recognized Bond Counsel to the effect
that such use of Project Funds will not adversely affect the exclusion from federal gross income of
interest on the Bonds pursuant to Section 103 of the Code, the Recipient will use the property
financed or refinanced with Project Funds solely as set forth in the Agreement.
4.14 No Federal Guarantee.
The Recipient will not directly or indirectly use any of the Project Funds that would cause the Bonds
to be "federally guaranteed" within the meaning of Section 149(b) of the Code.
4.15 No Notices or Inquiries From IRS.
The Recipient has not received any notice or inquiry by the Internal Revenue Service within the last
ten (10) years regarding any obligations issued by the Recipient, the interest on which obligations is
excludable from federal income taxation.
4.16 Amendments; Application.
The provisions in this Article may be amended or supplemented at any time to reflect changes in the
Code upon obtaining an opinion of Nationally- Recognized Bond Counsel that such amendment will
not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to
17
2010 op 1.110
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
Section 103 of the Code. The provisions in this Article shall apply to a Recipient only if any portion of
the Project Funds is derived from proceeds of Bonds.
4.17 Reasonable Expectations.
To the best of my knowledge, information and belief, and based on the facts and estimates as set
forth in the tax covenants in this Article, the expectations of the Recipient as set forth in this Article
are reasonable. The Recipient is not aware of any facts or circumstances that would cause it to
question the accuracy or reasonableness of any representation made in the provisions in this Article.
ARTICLE V MISCELLANEOUS PROVISIONS
5.1 Covenants.
(a) Tax Covenant. Notwithstanding any other provision hereof, the Recipient covenants and agrees
that it will comply with the Tax Covenants set forth in Article IV attached hereto if any portion of
the Project Funds is derived from proceeds of Bonds.
(b) Disclosure of Financial Information, Operating Data and Other Information. The Recipient
covenants to furnish certain financial and operating data pertaining to the Recipient that may be
required to either: (i) enable the State Water Board to secure an Indenture in connection with this
Agreement and issue any Bonds; or (ii) enable any underwriter to comply with Rule 15c2- 12(b)(5)
of the Securities and Exchange Commission. The Recipient further covenants to provide the
State Water Board with copies of all continuing disclosure reports concerning the Recipient
required by the terms of any financing other than this Agreement, including reports required to be
filed in order to comply with Rule 10b -5, and to send such reports to the State Water Board at the
same time such reports are sent to any dissemination agent, trustee, nationally recognized
municipal securities information repository or other person. The foregoing covenant shall apply to
a Recipient only if any portion of the Project Funds is derived from proceeds of Bonds.
5.2 Assignability.
The Recipient agrees and consents to any pledge, sale or assignment to the Bank or a trustee for the
benefit of the owners of the Bonds, if any, at any time of any portion of the State Water Board's
estate, right, title and interest and claim in, to and under this Agreement and the right to make all
related waivers and agreements in the name and on behalf of the State Water Board, as agent and
attorney -in -fact, and to perform all other related acts which are necessary and appropriate under this
Agreement, if any, and the State Water Board's estate, right, title and interest and claim in, to and
under this Agreement to Installment Payments (but excluding the State Water Board's rights to
Additional Payments and to notices, opinions and indemnification under each Obligation). This
Agreement is not assignable by the Recipient, either in whole or in part, without the consent of the
State in the form of a formal written amendment.
5.3 State Reviews and Indemnification.
The parties agree that review or approval of Project plans and specifications by the State Water
Board is for administrative purposes only and does not relieve the Recipient of its responsibility to
properly plan, design, construct, operate, and maintain the Project. To the extent permitted by law,
the Recipient agrees to indemnify, defend and hold harmless the State Water Board, the Bank and
any trustee and their officers, employees and agents for the Bonds, if any (collectively, "Indemnified
Persons "), against any Toss or liability arising out of any claim or action brought against any
Indemnified Persons from and against any and all losses, claims, damages, liabilities or expenses, of
every conceivable kind, character and nature whatsoever arising out of, resulting from, or in any way
connected with (1) the System or the Project or the conditions, occupancy, use, possession, conduct
18
2010 ey,4d,G
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
or management of, work done in or about, or the planning, design, acquisition, installation or
construction, of the System or the Project or any part thereof; (2) the carrying out of any of the
transactions contemplated by this Agreement or any related document; (3) any violation of any
applicable law, rule or regulation, any environmental law (including, without limitation, the Federal
Comprehensive Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act, the California Hazardous Substance Account Act, the Federal
Water Pollution Control Act, the Clean Air Act, the California Hazardous Waste Control Law and
California Water Code Section 13304, and any successors to said laws), rule or regulation or the
release of any toxic substance on or near the System; or (4) any untrue statement or alleged untrue
statement of any material fact or omission or alleged omission to state a material fact necessary to
make the statements required to be stated therein, in light of the circumstances under which they
were made, not misleading with respect to any information provided by the Recipient for use in any
disclosure document utilized in connection with any of the transactions contemplated by this
Agreement. To the fullest extent permitted by law, the Recipient agrees to pay and discharge any
judgment or award entered or made against Indemnified Persons with respect to any such claim or
action, and any settlement, compromise or other voluntary resolution. The provisions of this section
shall survive the discharge of the Recipient's Obligation hereunder.
5.4 Termination; Immediate Repayment; Interest.
(a) This Agreement may be terminated by written notice during construction of the Project, or
thereafter at any time prior to complete repayment by the Recipient, at the option of the State
Water Board, upon violation by the Recipient of any material provision of this Agreement after
such violation has been called to the attention of the Recipient and after failure of the Recipient
to bring itself into compliance with the provisions of this Agreement within a reasonable time as
established by the Division.
(b) In the event of such termination, the Recipient agrees, upon demand, to immediately repay to the
State Water Board an amount equal to Installment Payments due hereunder, including accrued
interest, and all penalty assessments due. In the event of termination, interest shall accrue on all
amounts due at the highest legal rate of interest from the date that notice of termination is mailed
to the Recipient to the date of full repayment by the Recipient.
(c) Where the Recipient is a private entity that has been determined to have violated an applicable
prohibition in the Prohibition Statement below or has an employee who is determined by USEPA
to have violated an applicable prohibition in the Prohibition Statement below that is either
associated with performance under this aware or imputed to the Recipient using the standards
and due process for imputing the conduct of an individual to an organization pursuant to 2 CFR
part 180, the Recipient acknowledges and agrees that this Obligation may become immediately
due and payable and that penalties up to $175 million may be due by the Recipient to the State
Water Board, in addition to any other criminal or civil penalties that may become due. The
Recipient, its employees, its contractors, and any subrecipients or subcontractors may not
engage in trafficking in persons, procure a commercial sex act, or use forced labor.
5.5 Income Restrictions.
The Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest
thereon) accruing to or received by the Recipient under this Agreement shall be paid by the Recipient
to the State, to the extent that they are properly allocable to costs for which the Recipient has been
reimbursed by the State under this Agreement.
19 •
2010 ca 1.110
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
5.6 Prevailing Wages.
The Recipient agrees to be bound by all the provisions of State Labor Code Section 1771 regarding
prevailing wages. The Recipient shall monitor all agreements subject to reimbursement from this
Agreement to assure that the prevailing wage provisions of State Labor Code Section 1771 are being
met.
5.7 Timeliness.
Time is of the essence in this Agreement.
5.8 Governing Law.
This contract is governed by and shall be interpreted in accordance with the laws of the State of
California.
5.9 Amendment. •
No amendment or variation of the terms of this Agreement shall be valid unless made in writing,
signed by the parties and approved as required. No oral understanding or agreement not
incorporated in this Agreement is binding on any of the parties.
5.10 Bonding.
Where contractors are used, the Recipient shall not authorize construction to begin until each
contractor has furnished a performance bond in favor of the Recipient in the following amounts:
faithful performance (100 %) of contract value; labor and materials (100 %) of contract value. This
requirement shall not apply to any contract for less than $20,000.00.
5.11 Compliance with Law, Regulations, etc.
(a) The Recipient agrees that it will, at all times, comply with and require its contractors and
subcontractors to comply with all applicable federal and state laws, rules, guidelines, regulations,
and requirements. Without limitation of the foregoing, the Recipient agrees that, to the extent
applicable, the Recipient will:
(1) Comply with the provisions of the adopted environmental mitigation plan for the term of this
Agreement;
(2) Comply with the State Water Board's "Policy for Implementing the State Revolving Fund for
Construction of Wastewater Treatment Facilities ", as amended from time to time;
(3) Comply with and require its contractors and subcontractors on the Project to comply with
federal DBE requirements; and
(4) Comply with and require its contractors and subcontractors to comply with the list of federal
laws certified to by the Recipient.
20
2010 alp ,.m,0
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
5.12 Conflict of Interest.
The Recipient certifies that it is in compliance with applicable state and /or federal conflict of interest
laws.
5.13 Damages for Breach Affecting Tax Exempt Status or Federal Compliance.
(a) In the event that any breach of any of the provisions of this Agreement by the Recipient shall
result in the loss of tax exempt status for any state bonds, or if such breach shall result in an
obligation on the part of the State to reimburse the federal government by reason of any
arbitrage profits, the Recipient shall immediately reimburse the state in an amount equal to any
damages paid by or loss incurred by the state due to such breach.
(b) In the event that any breach of any of the provisions of this Agreement by the Recipient shall
result in the failure of Project Funds to be used pursuant to the provisions of this Agreement, or
if such breach shall result in an obligation on the part of the State to reimburse the federal
government, the Recipient shall immediately reimburse the State in an amount equal to any
damages paid by or loss incurred by the State due to such breach.
5.14 Disputes.
(a) Any dispute arising under this Agreement which is not otherwise disposed of by agreement shall
be decided by the Division Deputy Director, or his or her authorized representative. The decision
shall be reduced to writing and a copy thereof furnished to the Recipient and to the State Water
Board's Executive Director. The decision of the Division shall be final and conclusive unless,
within thirty (30) calendar days after mailing of the Division decision to the Recipient, the
Recipient mails or otherwise furnishes a written appeal of the decision to the State Water
Board's Executive Director. The decision of the State Water Board's Executive Director shall be
final and conclusive unless determined by a court of competent jurisdiction to have been
fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith,
or not supported by substantial evidence. In connection with any appeal under this clause, the
Recipient shall be afforded an opportunity to be heard and to offer evidence in support ofits
appeal. Pending final decision of a dispute hereunder, the Recipient shall continue to fulfill and
comply with all the terms, provisions, commitments, and requirements of this Agreement.
(b) This clause does not preclude consideration of legal questions, provided that nothing herein
shall be construed to make final the decision of the State Water Board, or any official or
representative thereof, on any question of law.
(c) Recipient shall continue with the responsibilities under this Agreement during any dispute.
5.15 Independent Actor.
The Recipient, and its agents and employees, if any, in the performance of this Agreement, shall
act in an independent capacity and not as officers, employees or agents of the State Water Board.
5.16 Non - Discrimination Clause.
(a) During the performance of this Agreement, Recipient and its contractors and subcontractors
shall not unlawfully discriminate, harass, or allow harassment against any employee or
applicant for employment because of sex, race, color, ancestry, religious creed, national
origin, sexual orientation, physical disability (including HIV and AIDS), mental disability,
medical condition (cancer), age (over 40), marital status, and denial of family care leave.
21
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City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
(b) The Recipient, its contractors, and subcontractors shall insure that the evaluation and
treatment of their employees and applicants for employment are free from such
discrimination and harassment.
(c) The Recipient, its contractors, and subcontractors shall comply with the provisions of the Fair
Employment and Housing Act (Gov. Code §12990 (a -f) et seq.) and the applicable
regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285 et
seq.). The applicable regulations of the Fair Employment and Housing Commission
implementing Government Code Section 12990 (a -f), set forth in Chapter 5 of Division 4 of
Title 2 of the California Code of Regulations, are incorporated into this Agreement by
reference and made a part hereof as if set forth in full.
(d) The Recipient, its contractors, and subcontractors shall give written notice of their obligations
under this clause to labor organizations with which they have a collective bargaining or other
Agreement.
(e) The Recipient shall include the nondiscrimination and compliance provisions of this clause in
all subcontracts to perform work under the Agreement.
5.17 No Third Party Rights.
The parties to this Agreement do not create rights in, or grant remedies to, any third party as a
beneficiary of this Agreement, or of any duty, covenant, obligation or undertaking established
herein.
5.18 Operation and Maintenance; Insurance.
The Recipient agrees to properly staff, operate and maintain all portions of the Project during its
useful life in accordance with all applicable state and federal laws, rules and regulations.
The Recipient will procure and maintain or cause to be maintained insurance on the System with
responsible insurers, or as part of a reasonable system of self- insurance, in such amounts and
against such risks (including damage to or destruction of the System) as are usually covered in
connection with systems similar to the System. Such insurance may be maintained by the
maintenance of a self- insurance so long as any such plan provides for (i) the establishment
by the Recipient of a separate segregated self- insurance fund funded in an amount determined
(initially and on at least an annual basis) by an independent insurance consultant experienced in
•
the field of risk management employing accepted actuarial techniques and (ii) the establishment
and maintenance of a claims processing and risk management program.
In the event of any damage to or destruction of the System caused by the perils covered by such
insurance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement
of the damaged or destroyed portion of the System. The Recipient shall begin such
reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such net
proceeds all costs and expenses in connection with such reconstruction, repair or replacement so
that the same shall be completed and the System shall be free and clear of all claims and liens. If
such net proceeds are insufficient to enable the Recipient to pay all remaining unpaid principal
. portions of the Installment Payments, the Recipient shall provide additional funds to restore or
replace the damaged portions of the System.
22
2010 op 1.■10
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
5.19 Permits, Subcontracting, Remedies and Debarment.
The Recipient shall procure all permits and licenses necessary to accomplish the work
contemplated in this Agreement, pay all charges and fees, and give all notices necessary and
incidental to the due and lawful prosecution of the work. Signed copies of any such permits or
licenses shall be submitted to the Division before construction begins.
Any subcontractors, outside associates, or consultants required by the Recipient in connection
with the services covered by this Agreement shall be limited to such individuals or firms as were
specifically identified and agreed to during negotiations for this Agreement, or as are specifically
authorized by the State Water Board's Project Representative during the performance of
Agreement. Any substitutions in, or additions to, such subcontractors, associates, or consultants,
shall be subject to the prior written approval of the State Water Board's Project Representative.
The Recipient shall not subcontract with any party who is debarred or suspended or otherwise
excluded from or ineligible for participation in federal assistance programs under Executive Order
12549, "Debarment and Suspension ". The Recipient shall not subcontract with any individual or
organization on USEPA's List of Violating Facilities. (40 CFR, Part 31.35, Gov. Code 4477)
The Recipient certifies to the best of its knowledge and belief, that it and its principals:
(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded by any federal department or agency;
(b) Have not within a three (3) year period preceding this Agreement been convicted of or had a
civil judgment rendered against them for commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain, or performing a public (federal, state or local)
transaction or contract under a public transaction; violation of federal or state antitrust statutes
or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records,
making false statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity
(federal, state or local) with commission of any of the offenses enumerated in paragraph (b) of
this certification; and
(d) Have not within a three (3) year period preceding this application /proposal had one or more
public transactions (federal, state or local) terminated for cause or default.
5.20 Recipient's Responsibility for Work.
The Recipient shall be responsible for all work and for persons or entities engaged in work
performed pursuant to this Agreement, including, but not limited to, contractors, subcontractors,
suppliers, and providers of services. The Recipient shall be responsible for any and all disputes
arising out of its contracts for work on the Project. The State Water Board will not mediate
disputes between the Recipient and any other entity concerning responsibility for performance of
work.
5.21 Related Litigation.
Under no circumstances may a Recipient use funds from any disbursement under this Agreement
to pay costs associated with any litigation the Recipient pursues against the State Water Board or
any Regional Water Board. Regardless of the outcome of any such litigation, and notwithstanding
any conflicting language in this Agreement, the Recipient agrees to complete the Project funded
by this Agreement or to repay all of the disbursed funds plus interest.
23
2070.1,10810
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
5.22 Rights in Data.
The Recipient agrees that all data, plans, drawings, specifications, reports, computer programs,
operating manuals, notes, and other written or graphic work produced in the performance of this
Agreement are subject to the rights of the State as set forth in this section. The State shall have
the right to reproduce, publish, and use all such work, or any part thereof, in any manner and for
any purposes whatsoever and to authorize others to do so. If any such work is copyrightable, the
Recipient may copyright the same, except that, as to any work which is copyrighted by the
Recipient, the State reserves a royalty -free, nonexclusive, and irrevocable license to reproduce,
publish, and use such work, or any part thereof, and to authorize others to do so, and to receive
electronic copies from the Recipient upon request. (40 CFR 31.34, 31.36)
5.23 State Water Board Action; Costs and Attorney Fees.
The Recipient agrees that any remedy provided in this Agreement is in addition to and not in
derogation of any other legal or equitable remedy available to the State Water Board as a result of
breach of this Agreement by the Recipient, whether such breach occurs before or after completion
of the Project, and exercise of any remedy provided by this Agreement by the State Water Board
shall not preclude the State Water Board from pursuing any legal remedy or right which would
otherwise be available. In the event of litigation between the parties hereto arising from this
Agreement, it is agreed that each party shall bear its own filing costs and attorney fees.
5.24 Unenforceable Provision.
In the event that any provision of this Agreement is unenforceable or held to be unenforceable,
then the parties agree that all other provisions of this Agreement have force and effect and shall
not be affected thereby.
5.25 Useful Life.
The economic useful life of the Project, commencing at Project Completion, is at least equal to the
term of this Agreement, as set forth in Exhibit B hereto.
5.26 Venue.
The State Water Board and the Recipient hereby agree that any action arising out of this
Agreement shall be filed and maintained in the Superior Court in and for the County of
Sacramento, California.
5.27 Waiver and Rights of the State Water Board.
Any waiver of rights by the State Water Board with respect to a default or other matter arising
under the Agreement at any time shall not be considered a waiver of rights with respect to any
other default or matter.
Any rights and remedies of the State Water Board provided for in this Agreement are in addition to
any other rights and remedies provided by law.
24
2010 cap 14=10
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
CITY OF SEAL BEACH:
By:
Name: Jill R. Ingram
Title: Acting City Manager
Date:
STATE WATER RESOURCES CONTROL BOARD:
By:
Name: James B. Maughan
Title: Acting Deputy Director
Division of Financial Assistance
Date:
25
m,000,.a,o
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT A — SCOPE OF WORK & INCORPORATED DOCUMENTS
1. The Recipient agrees to start construction no later than July 18, 2011.
2. Completion of Construction date is hereby established as December 9, 2011.
3. The Project Completion date is hereby established as December 9, 2011.
4. The Recipient agrees to ensure that its final Request for Disbursement is received by the Division
no later than June 9, 2012, unless prior approval has been granted by the Division. If the
Recipient fails to do so, then the undisbursed balance of this Agreement will be deobligated.
5. The Project, commonly known as North Seal Beach Sewer Rehabilitation Phase 1 Project
generally consists of replacing sewer pipe for increased capacity and relining of pipelines
where feasible, as more particularly described in the financial assistance application of the
Recipient and the accepted plans and specifications for the Project, if any.
6. Incorporated by reference into this Agreement are the following documents:
(a) the Facilities Plan Approval Letter executed on April 4, 2011;
(b) the Preliminary Funding Commitment of April 6, 2011;
(c) the Final Plans & Specification, which are the basis for the construction Contract to be
awarded by the Recipient (Agreement will be amendment to incorporate such document);
(d) the Waste Discharge Requirement Order No. R8- 2003 -0061 and National Pollution
Discharge Elimination System Permit No. CAG998001; and
(e) the Recipient's Reimbursement Resolution No. 5386 dated October 24, 2005.
These documents shall be binding on the Recipient, except where specifically superseded by the
terms of this Agreement.
•
A -1
2010 cap 14n10
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT B — PROJECT FINANCING AMOUNT
1. Estimated Reasonable Cost. The estimated reasonable cost of the total Project, including associated
planning and design costs, is two million, six hundred fifty thousand dollars and no cents
($2,650,000.00).
2. Project Funding. Subject to the terms of this Agreement, the State Water Board agrees to provide
Project Funds in the amount of two million, six hundred fifty thousand dollars and no cents
($2,650,000.00).
3. Repayment and Interest Rate. The Recipient agrees to repay all Project Funds according to the
schedule in Exhibit C at an interest rate of two and six tenths percent (2.6 %) per annum and an
Administrative Service Charge of zero percent (0 %) per annum.
4. The term of this agreement is from April 6, 2011 to December 9, 2031.
5. Budget costs are contained in the Project Cost Table, which is part of the Eligibility Determination
Approval in Exhibit A.1. (This Agreement will be amended to incorporate such document.)
6. Preliminary budget costs are as follows:
•
Allowances (soft costs): Planning $ 20,000
Design $100.000
Total $120,000
Construction costs and disbursements are not available until after this Agreement has been amended
to incorporate the Approval of Award /Eligibility Determination Approval.
Any construction expenses incurred by the Recipient prior to such amendment of this Agreement are at
the Recipient's risk. Failure to begin construction according to the timelines set forth in Exhibit A will
require the Recipient to repay to the State Water Board all disbursed Project Funds, including
Allowances.
B -1
2010 am 11110
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT C - CWSRF PAYMENT SCHEDULE
See the attached preliminary CWSRF Payment Schedule dated June 3, 2011. The final CWSRF Payment
Schedule will be forwarded to the Recipient after all disbursements have been paid and construction of the
Project has been completed.
•
C -1
2010 cap 1NOW
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City of Seal Beach •
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT D — SPECIAL CONDITIONS
SPECIAL ENVIRONMENTAL CONDITIONS AS FOLLOWS:
• Compliance with the National Historic Preservation Act
The Recipient shall provide qualified archaeological and Native American monitors for all Project
excavations. Any identified archaeological deposits shall be immediately reported to the State Water
Board Cultural Resources Officer (CRO). The Recipient shall consult with the CRO on any additional
evaluation and treatment procedures, which will require prior approval by the CRO before these
procedures are initiated by the Recipient.
• Compliance with the Migratory Bird Treaty Act
The Recipient identified mitigation measures in its Initial Study /Mitigated Negative Declaration (SCH
No. 2009011049) to avoid impacts on migratory birds. The Recipient shall abide by the measures as
follows:
1. All vegetation removal and /or thinning activities shall be scheduled from August 1 to February 14,
if feasible, to ensure that no active nests will be disturbed; or
2. The Recipient shall ensure that a qualified wildlife biologist conduct pre- construction surveys for
nesting birds if Project construction is to occur during the nesting season (February 15 through
July 31). The Recipient shall ensure that a qualified wildlife biologist conduct a pre- construction
raptor survey no more than 30 days prior to initiation of grading to confirm the presence or
absence of active nests in the vicinity (at least 300 feet around the Project site). If active nests
are encountered, the Recipient shall ensure that species- specific measures be prepared by a
qualified wildlife biologist and implemented to prevent abandonment of the active nests. At a
minimum, grading in the vicinity of the nests shall be deferred until the young birds have fledged.
A minimum exclusion buffer of 25 feet shall be required for songbird nests, and 200 to 500 feet for
raptor nests, depending on the species and location. The Recipient shall ensure that the
perimeter of the nest - setback zone be fenced or adequately demarcated with staked flagging at
20 -foot intervals, and construction personnel be restricted from the area. The Recipient shall
ensure that a survey report prepared by the qualified wildlife biologist verifying that the young have
fledged be submitted to the Recipient and the State Water Board prior to initiation of grading in the •
nest - setback zone.
SPECIAL FINANCIAL CONDITIONS AS FOLLOWS:
• Each finance agreement shall be secured on parity with the 2000 Sewer System Certificates of
Participation;
• The Recipient shall covenant to establish rates and charges in amounts sufficient to generate net
revenues equal to 1.25 times the total annual debt service; and
• The Recipient shall establish a Reserve Fund equal to one year's debt service on the CWSRF finance
agreement from available cash at the time of the agreement execution;
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Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT E — [Reserved]
•
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City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT F — SCHEDULE OF SYSTEM OBLIGATIONS
Except for the following and the Obligation evidenced by this Agreement, the Recipient certifies that it has
no outstanding System Obligations:
The following outstanding debt is senior to the Obligation:
Title Interest Total Amount Amount Remaining End Date
Rate
Not Applicable
The following outstanding debt is on parity with the Obligation:
Title Interest Total Amount Amount Remaining End Date
Rate
Certifications of 5.0% - $4,230,000 $3,730,000 6/1/2030
Participation, 5.625%
2000 Sewer System
The following outstanding debt is subordinate to the Obligation:
Title Interest Total Amount Amount Remaining End Date
Rate
Not Applicable
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2010 Am 14010
City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT G — DAVIS BACON REQUIREMENTS
1. Applicability of the Davis- Bacon (DB) Prevailing Wage Requirements.
Davis -Bacon prevailing wage requirements apply to the construction, alteration, and repair activity
of infrastructure, including all construction, alteration and repair activity involving waste water or
drinking water treatment plants is subject to DB. If the Recipient encounters a unique situation at
a site that presents uncertainties regarding DB applicability, the Recipient must discuss the
situation with the State Water Board before authorizing work on that site.
2. Obtaining Wage Determinations.
(a) The Recipient shall obtain the wage determination for the locality in which a covered activity
subject to DB will take place prior to issuing requests for bids, proposals, quotes or other
methods for soliciting contracts (solicitation) for activities subject to DB. These wage
determinations shall be incorporated into solicitations and any subsequent contracts. Prime
contracts must contain a provision requiring that subcontractors follow the wage determination
incorporated into the prime contract.
(i) While the solicitation remains open, the Recipient shall monitorwww.wdol.gov on a
weekly basis to ensure that the wage determination contained in the solicitation remains
current. The Recipient shall amend the solicitation if DOL issues a modification more
than 10 days prior to the closing date (i.e. bid opening) for the solicitation. If DOL
modifies or supersedes the applicable wage determination less than 10 days prior to the
closing date, the Recipient may request a finding from the State Water Board that there
is not a reasonable time to notify interested contractors of the modification of the wage
determination. The State Water Board will provide a report of its findings to the
Recipient.
(ii) If the Recipient does not award the contract within 90 days of the closure of the
solicitation, any modifications or supersedes DOL makes to the wage determination
contained in the solicitation shall be effective unless the State Water Board, at the request
of the Recipient, obtains an extension of the 90 day period from DOL pursuant to 29 CFR
1.6(c)(3)(iv). The Recipient shall monitor www.wdol.aov on a weekly basis if it does not
award the contract within 90 days of closure of the solicitation to ensure that wage
determinations contained in the solicitation remain current.
(b) If the Recipient carries out activity subject to DB by issuing a task order, work assignment or
similar instrument to an existing contractor (ordering instrument) rather than by publishing a
solicitation, the Recipient shall insert the appropriate DOL wage determination from
www.wdol.aov into the ordering instrument.
(c) The Recipient shall review all subcontracts subject to DB entered into by prime contractors to
verify that the prime contractor has required its subcontractors to include the applicable wage
determinations.
•
(d) As provided in 29 CFR 1.6(f), DOL may issue a revised wage determination applicable to a
Recipient's contract after the award of a contract or the issuance of an ordering instrument if
DOL determines that the Recipient has failed to incorporate a wage determination or has
used a wage determination that clearly does not apply to the contract or ordering instrument.
If this occurs, the Recipient shall either terminate the contract or ordering instrument and
issue a revised solicitation or ordering instrument or incorporate DOL's wage determination
retroactive to the beginning of the contract or ordering instrument by change order. The
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City of Seal Beach
Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT G — DAVIS BACON REQUIREMENTS
Recipient's contractor must be compensated for any increases in wages resulting from the
use of DOL's revised wage determination.
3. Contract and Subcontract Provisions.
(a) The Recipient shall insert in full, in any contract in excess of $2,000 which is entered into for
the actual construction, alteration and /or repair, including painting and decorating, of a public
building or public work, or building or work financed in whole or in part from Federal funds or
in accordance with guarantees of a Federal agency or financed from funds obtained by pledge
of any contract of a Federal agency to make a loan, grant or annual contribution (except
where a different meaning is expressly indicated), and which is subject to the labor standards
provisions of any of the acts listed in § 5.1, the following clauses:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work will be
paid unconditionally and not Tess often than once a week, and without subsequent
deduction or rebate on any account (except such payroll deductions as are
permitted by regulations issued by the Secretary of Labor under the Copeland Act
(29 CFR part 3) ), the full amount of wages and bona fide fringe benefits (or cash
equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached
hereto and made a part hereof, regardless of any contractual relationship which
may be alleged to exist between the contractor and such laborers and mechanics.
Contributions made or costs reasonably anticipated for bona fide fringe benefits
under section 1(b)(2) of the Davis -Bacon Act on behalf of laborers or mechanics
are considered wages paid to such laborers or mechanics, subject to the
provisions of paragraph (a)(1)(iv) of this section; also, regular contributions made
or costs incurred for more than a weekly period (but not less often than quarterly)
under plans, funds, or programs which cover the particular weekly period, are
deemed to be constructively made or incurred during such weekly period. Such
laborers and mechanics shall be paid the appropriate wage rate and fringe
benefits on the wage determination for the classification of work actually
performed, without regard to skill, except as provided in § 5.5(a)(4). Laborers or
mechanics performing work in more than one classification may be compensated
at the rate specified for each classification for the time actually worked therein:
• Provided, that the employer's payroll records accurately set forth the time spent in
each classification in which work is performed. The wage determination (including
any additional classification and wage rates conformed under paragraph (a)(1)(ii)
of this section) and the Davis -Bacon poster (WH -1321) shall be posted at all times
by the contractor and its subcontractors at the site of the work in a prominent and
accessible place where it can be easily seen by the workers.
The Recipient may obtain wage determinations from the U.S. Department of
Labor's web site, www.wdol.gov.
(ii)(A) The Recipient, on behalf of EPA, shall require that any class of laborers or
mechanics, including helpers, which is not listed in the wage determination and
which is to be employed under the contract shall be classified in conformance with
the wage determination. The EPA award official shall approve an additional
classification and wage rate and fringe benefits therefore only when the following
criteria have been met:
•
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Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT G — DAVIS BACON REQUIREMENTS
(1) The work to be performed by the classification requested is not performed by
a classification in the wage determination; and
(2) The classification is utilized in the area by the construction industry; and
(3) The proposed wage rate, including any bona fide fringe benefits, bears a
reasonable relationship to the wage rates contained in the wage
determination.
(B) If the contractor and the laborers and mechanics to be employed in the
classification (if known), or their representatives, and the Recipient agree on the
classification and wage rate (including the amount designated for fringe benefits
where appropriate), a report of the action taken shall be sent by the Recipient to
the State Water Board. The State Water Board will transmit the report, to the
Administrator of the Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, Washington, DC 20210. The
Administrator, or an authorized representative, will approve, modify, or disapprove
every additional classification action within 30 days of receipt and so advise the
State Water Board or will notify the State Water Board within the 30 -day period
that additional time is necessary.
(C) In the event the contractor, the laborers or mechanics to be employed in the
classification or their representatives, and the Recipient do not agree on the
proposed classification and wage rate (including the amount designated for fringe
benefits, where appropriate), USEPA will refer the questions, including the views
of all interested parties and the recommendation of the State Water Board, to the
Administrator for determination. The Administrator, or an authorized
representative, will issue a determination within 30 days of receipt and so advise
the contracting officer or will notify the contracting officer within the 30 -day period
• that additional time is necessary.
(D) The wage rate (including fringe benefits where appropriate) determined pursuant
to paragraphs (a)(1)(ii)(B) or (C) of this section, shall be paid to all workers
performing work in the classification under this contract from the first day on
which work is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of
laborers or mechanics includes a fringe benefit which is not expressed as an
hourly rate, the contractor shall either pay the benefit as stated in the wage
determination or shall pay another bona fide fringe benefit or an hourly cash
equivalent thereof.
(iv) If the contractor does not make payments to a trustee or other third person, the
contractor may consider as part of the wages of any laborer or mechanic the
amount of any costs reasonably anticipated in providing bona fide fringe benefits
under a plan or program, provided, that the Secretary of Labor has found, upon
the written request of the contractor, that the applicable standards of the Davis -
Bacon Act have been met. The Secretary of Labor may require the contractor to
set aside in a separate account assets for the meeting of obligations under the
plan or program.
•
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Agreement No.: 10- 838 -550
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EXHIBIT G — DAVIS BACON REQUIREMENTS
(2) Withholding.
The Recipient, shall upon written request of the EPA Award Official or an authorized
representative of the Department of Labor, withhold or cause to be withheld from the
contractor under this contract or any other Federal contract with the same prime
contractor, or any other federally- assisted contract subject to Davis -Bacon prevailing
wage requirements, which is held by the same prime contractor, so much of the accrued
payments or advances as may be considered necessary to pay laborers and mechanics,
including apprentices, trainees, and helpers, employed by the contractor or any
subcontractor the full amount of wages required by the contract. In the event of failure to
pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or
working on the site of the work, all or part of the wages required by the contract, the
(Agency) may, after written notice to the contractor, sponsor, applicant, or owner, take
such action as may be necessary to cause the suspension of any further payment,
advance, or guarantee of funds until such violations have ceased.
(3) Payrolls and basic records.
(i) Payrolls and basic records relating thereto shall be maintained by the contractor
during the course of the work and preserved for a period of three years thereafter
for all laborers and mechanics working at the site of the work. Such records shall
contain the name, address, and social security number of each such worker, his
or her correct classification, hourly rates of wages paid (including rates of
contributions or costs anticipated for bona fide fringe benefits or cash equivalents
thereof of the types described in section 1(b)(2)(B) of the Davis -Bacon Act), daily
and weekly number of hours worked, deductions made and actual wages paid.
Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the
wages of any laborer or mechanic include the amount of any costs reasonably
anticipated in providing benefits under a plan or program described in section
1(b)(2)(B) of the Davis -Bacon Act, the contractor shall maintain records which
show that the commitment to provide such benefits is enforceable, that the plan
or program is financially responsible, and that the plan or program has been
communicated in writing to the laborers or mechanics affected, and records
which show the costs anticipated or the actual cost incurred in providing such
benefits. Contractors employing apprentices or trainees under approved
programs shall maintain written evidence of the registration of apprenticeship
programs and certification of trainee programs, the registration of the apprentices
and trainees, and the ratios and wage rates prescribed in the applicable
programs.
(ii)(A) The contractor shall submit weekly, for each week in which any contract work is
performed, a copy of all payrolls to the Recipient, that is, the entity that receives
the sub -grant or loan from the State capitalization grant recipient. Such
documentation shall be available on request of the State Water Board or EPA. As
to each payroll copy received, the Recipient shall provide written confirmation in
a form satisfactory to the State indicating whether or not the project is in
compliance with the requirements of 29 CFR 5.5(a)(1) based on the most recent
payroll copies for the specified week. The payrolls shall set out accurately and
completely all of the information required to be maintained under 29 CFR
5.5(a)(3)(i), except that full social security numbers and home addresses shall not
be included on the weekly payrolls. Instead the payrolls shall only need to include
an individually identifying number for each employee (e.g., the last four digits of
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Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT G — DAVIS BACON REQUIREMENTS
the employee's social security number). The required weekly payroll information
may be submitted in any form desired. Optional Form WH -347 is available for this
purpose from the Wage and Hour Division Web site at
http: / /www.dol.gov /esa/whd /forms /wh347instr.htm or its successor site. The prime
contractor is responsible for the submission of copies of payrolls by all
subcontractors. Contractors and subcontractors shall maintain the full social
security number and current address of each covered worker, and shall provide
them upon request to the Recipient for transmission to the State or EPA if
requested by EPA , the State, the contractor, or the Wage and Hour Division of
the Department of Labor for purposes of an investigation or audit of compliance
with prevailing wage requirements. It is not a violation of this section for a prime
contractor to require a subcontractor to provide addresses and social security
numbers to the prime contractor for its own records, without weekly submission to
the Recipient.
(B) Each payroll submitted shall be accompanied by a "Statement of Compliance,"
signed by the contractor or subcontractor or his or her agent who pays or
supervises the payment of the persons employed under the contract and shall
certify the following:
(1) That the payroll for the payroll period contains the information required to be
provided under § 5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate
information is being maintained under § 5.5 (a)(3)(i) of Regulations, 29 CFR
part 5, and that such information is correct and complete;
(2) That each laborer or mechanic (including each helper, apprentice, and
trainee) employed on the contract during the payroll period has been paid the
full weekly wages earned, without rebate, either directly or indirectly, and that
no deductions have been made either directly or indirectly from the full wages
earned, other than permissible deductions as set forth in Regulations, 29
CFR part 3;
(3) That each laborer or mechanic has been paid not less than the applicable
wage rates and fringe benefits or cash equivalents for the classification of
work performed, as specified in the applicable wage determination
incorporated into the contract.
(C) The weekly submission of a properly executed certification set forth on the
reverse side of Optional Form WH -347 shall satisfy the requirement for
submission of the "Statement of Compliance" required by paragraph (a)(3)(ii)(B)
of this section.
(D) The falsification of any of the above certifications may subject the contractor or
subcontractor to civil or criminal prosecution under section 1001 of title 18 and
section 231 of title 31 of the United States Code.
(iii) The contractor or subcontractor shall make the records required under
paragraph (a)(3)(i) of this section available for inspection, copying, or transcription
by authorized representatives of the State, EPA or the Department of Labor, and
shall permit such representatives to interview employees during working hours on
the job. If the contractor or subcontractor fails to submit the required records or to
make them available, the Federal agency or State may, after written notice to the
contractor, sponsor, applicant, or owner, take such action as may be necessary
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Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT G — DAVIS BACON REQUIREMENTS
•
to cause the suspension of any further payment, advance, or guarantee of funds.
Furthermore, failure to submit the required records upon request or to make such
records available may be grounds for debarment action pursuant to 29 CFR 5.12.
•
(4) Apprentices and Trainees
(i) Apprentices. Apprentices will be permitted to work at less than the predetermined
rate for the work they performed when they are employed pursuant to and
individually registered in a bona fide apprenticeship program registered with the
U.S. Department of Labor, Employment and Training Administration, Office of
Apprenticeship Training, Employer and Labor Services, or with a State
Apprenticeship Agency recognized by the Office, or if a person is employed in his
or her first 90 days of probationary employment as an apprentice in such an
apprenticeship program, who is not individually registered in the program, but who
has been certified by the Office of Apprenticeship Training, Employer and Labor
Services or a State Apprenticeship Agency (where appropriate) to be eligible for
probationary employment as an apprentice. The allowable ratio of apprentices to
journeymen on the job site in any craft classification shall not be greater than the
ratio permitted to the contractor as to the entire work force under the registered
program. Any worker listed on a payroll at an apprentice wage rate, who is not
registered or otherwise employed as stated above, shall be paid not less than the
applicable wage rate on the wage determination for the classification of work
actually performed. In addition, any apprentice performing work on the job site in
excess of the ratio permitted under the registered program shall be paid not less
than the applicable wage rate on the wage determination for the work actually
performed. Where a contractor is performing construction on a project in a locality
other than that in which its program is registered, the ratios and wage rates
(expressed in percentages of the journeyman's hourly rate) specified in the
contractors or subcontractor's registered program shall be observed. Every
apprentice must be paid at not less than the rate specified in the registered
program for the apprentice's level of progress, expressed as a percentage of the
journeymen hourly rate specified in the applicable wage determination.
Apprentices shall be paid fringe benefits in accordance with the provisions of the
apprenticeship program. If the apprenticeship program does not specify fringe
benefits, apprentices must be paid the full amount of fringe benefits listed on the
wage determination for the applicable classification. If the Administrator
determines that a different practice prevails for the applicable apprentice
classification, fringes shall be paid in accordance with that determination. In the
event the Office of Apprenticeship Training, Employer and Labor Services, or a
State Apprenticeship Agency recognized by the Office, withdraws approval of an
apprenticeship program, the contractor will no longer be permitted to utilize
apprentices at less than the applicable predetermined rate for the work performed
until an acceptable program is approved.
(ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to
work at less than the predetermined rate for the work performed unless they are
employed pursuant to and individually registered in a program which has received
prior approval, evidenced by formal certification by the U.S. Department of Labor,
Employment and Training Administration. The ratio of trainees to journeymen on
the job site shall not be greater than permitted under the plan approved by the
Employment and Training Administration. Every trainee must be paid at not less
than the rate specified in the approved program for the trainee's level of progress,
expressed as a percentage of the journeyman hourly rate specified in the
applicable wage determination. Trainees shall be paid fringe benefits in
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Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT G — DAVIS BACON REQUIREMENTS
• accordance with the provisions of the trainee program. If the trainee program
does not mention fringe benefits, trainees shall be paid the full amount of fringe
benefits listed on the wage determination unless the Administrator of the Wage
and Hour Division determines that there is an apprenticeship program associated
with the corresponding journeyman wage rate on the wage determination which
provides for less than full fringe benefits for apprentices. Any employee listed on
the payroll at a trainee rate who is not registered and participating in a training
plan approved by the Employment and Training Administration shall be paid not
less than the applicable wage rate on the wage determination for the
classification of work actually performed. In addition, any trainee performing work
• on the job site in excess of the ratio permitted under the registered program shall
be paid not less than the applicable wage rate on the wage determination for the
work actually performed. In the event the Employment and Training
Administration withdraws approval of a training program, the contractor will no
longer be permitted to utilize trainees at Tess than the applicable predetermined
rate for the work performed until an acceptable program is approved.
(iii) Equal employment opportunity. The utilization of apprentices,.trainees and
journeymen under this part shall be in conformity with the equal employment
opportunity requirements of Executive Order 11246, as amended, and 29 CFR
part 30.
(5) Compliance with Copeland Act Requirements.
The contractor shall comply with the requirements of 29 CFR part 3, which are
incorporated by reference in this contract.
(6) Subcontracts.
The contractor or subcontractor shall insert in any subcontracts the clauses contained in
29 CFR 5.5(a)(1) through (10) and such other clauses as the EPA determines may by
appropriate, and also a clause requiring the subcontractors to include these clauses in
any lower tier subcontracts. The prime contractor shall be responsible for the compliance
by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR
5.5.
•
(7) Contract Termination: Debarment.
A breach of the contract clauses in 29 CFR 5.5 may be grounds for termination of the
contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR
5.12.
(8) Compliance with Davis -Bacon and Related Act Requirements.
All rulings and interpretations of the Davis -Bacon and Related Acts contained in 29 CFR
parts 1, 3, and 5 are herein incorporated by reference in this contract.
(9) Disputes Concerning Labor Standards.
Disputes arising out of the labor standards provisions of this contract shall not be subject
to the general disputes clause of this contract. Such disputes shall be resolved in
accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5,
6, and 7. Disputes within the meaning of this clause include disputes between the
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Agreement No.: 10- 838 -550
Project No.: C -06- 5310 -110
EXHIBIT G — DAVIS BACON REQUIREMENTS
contractor (or any of its subcontractors) and the Recipient, State, EPA, the U.S.
Department of Labor, or the employees or their representatives.
(10) Certification of Eligibility.
(i) By entering into this contract, the contractor certifies that neither it (nor he or she)
nor any person or firm who has an interest in the contractor's firm is a person or
firm ineligible to be awarded Government contracts by virtue of section 3(a) of the
Davis -Bacon Act or 29 CFR 5.12(a)(1).
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for
award of a Government contract by virtue of section 3(a) of the Davis -Bacon Act
or 29 CFR 5.12(a)(1).
(iii) • The penalty for making false statements is prescribed in the U.S. Criminal Code,
18 U.S.C. 1001.
4. Contract Provision for Contracts in Excess of $100,000.
(a) Contract Work Hours and Safety Standards Act.
The Recipient shall insert the following clauses set forth in paragraphs (a)(1), (2), (3), and (4)
of this section in full in any contract in an amount in excess of $100,000 and subject to the
overtime provisions of the Contract Work Hours and Safety Standards Act. These clauses
shall be inserted in addition to the clauses required by Item 3, above or 29 CFR 4.6 . As used
in this paragraph, the terms laborers and mechanics include watchmen and guards.
(1) Overtime requirements.
No contractor or subcontractor contracting for any part of the contract work which may
require or involve the employment of laborers or mechanics shall require or permit any
such laborer or mechanic in any workweek in which he or she is employed on such work
to work in excess of forty hours in such workweek unless such laborer or mechanic
receives compensation at a rate not Tess than one and one -half times the basic rate of
pay for all hours worked in excess of forty hours in such workweek.
(2) Violation; liability for unpaid wages; liquidated damages.
In the event of any violation of the clause set forth in paragraph (a)(1) of this section the
contractor and any subcontractor responsible therefor shall be liable for the unpaid
wages. In addition, such contractor and subcontractor shall be liable to the United States
(in the case of work done under contract for the District of Columbia or a territory, to such
District or to such territory), for liquidated damages. Such liquidated damages shall be
computed with respect to each individual laborer or mechanic, including watchmen and
guards, employed in violation of the clause set forth in paragraph (a)(1) of this section, in
the sum of $10 for each calendar day on which such individual was required or permitted
to work in excess of the standard workweek of forty hours without payment of the
overtime wages required by the clause set forth in paragraph (a)(1) of this section.
(3) Withholding for unpaid wages and liquidated damages.
The Recipient, upon written request of the EPA Award Official or an authorized
representative of the Department of Labor, shall withhold or cause to be withheld, from
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EXHIBIT G — DAVIS BACON REQUIREMENTS
any moneys payable on account of work performed by the contractor or subcontractor
under any such contract or any other Federal contract with the same prime contractor, or
any other federally- assisted contract subject to the Contract Work Hours and Safety
Standards Act, which is held by the same prime contractor, such sums as may be
determined to be necessary to satisfy any liabilities of such contractor or subcontractor for
unpaid wages and liquidated damages as provided in the clause set forth in paragraph
(a)(2) of this section.
(4) Subcontracts.
The contractor or subcontractor shall insert in any subcontracts the clauses set forth in
paragraph (a)(1) through (4) of this section and also a clause requiring the subcontractors
to include these clauses in any lower tier subcontracts. The prime contractor shall be
responsible for compliance by any subcontractor or lower tier subcontractor with the
clauses set forth in paragraphs (a)(1) through (4) of this section.
(b) In addition to the clauses contained in Item 3, above, in any contract subject only to the
Contract Work Hours and Safety Standards Act and not to any of the other statutes cited in 29
CFR 5.1, the Recipient shall insert a clause requiring that the contractor or subcontractor
shall maintain payrolls and basic payroll records during the course of the work and shall
preserve them for a period of three years from the completion of the contract for all laborers
and mechanics, including guards and watchmen, working on the contract. Such records shall
contain the name and address of each such employee, social security number, correct
classifications, hourly rates of wages paid, daily and weekly number of hours worked,
deductions made, and actual wages paid. Further, the Recipient shall insert in any such
contract a clause providing hat the records to be maintained under this paragraph shall be
made available by the contractor or subcontractor for inspection, copying, or transcription by
authorized representatives of the USEPA, State Water Board, and the Department of Labor,
and the contractor or subcontractor will permit such representatives to interview employees
during working hours on the job.
5. Compliance Verification
(a) The Recipient shall periodically interview a sufficient number of employees entitled to DB
prevailing wages (covered employees) to verify that contractors or subcontractors are paying
the appropriate wage rates. As provided in 29 CFR 5.6(a)(6), all interviews must be
• conducted in confidence. The Recipient must use Standard Form 1445 or equivalent
documentation to memorialize the interviews. Copies of the SF 1445 are available from EPA
on request.
(b) The Recipient shall establish and follow an interview schedule based on its assessment of .
the risks of noncompliance with DB posed by contractors or subcontractors and the duration
of the contract or subcontract. At a minimum, the Recipient must conduct interviews with a
representative group of covered employees within two weeks of each contractor or
subcontractor's submission of its initial weekly payroll data and two weeks prior to the
estimated completion date for the contract or subcontract. The Recipient must conduct more
frequent interviews if the initial interviews or other information indicates that there is a risk that
the contractor or subcontractor is not complying with DB . The Recipient shall immediately
conduct necessary interviews in response to an alleged violation of the prevailing wage
requirements. All interviews shall be conducted in confidence.
(c) The Recipient shall periodically conduct spot checks of a representative sample of weekly
payroll data to verify that contractors or subcontractors are paying the appropriate wage rates.
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EXHIBIT G — DAVIS BACON REQUIREMENTS
The Recipient shall establish and follow a spot check schedule based on its assessment of
the risks of noncompliance with DB posed by contractors or subcontractors and the duration
of the contract or subcontract. At a minimum, the Recipient must spot check payroll data
within two weeks of each contractor or subcontractor's submission of its initial payroll data
and two weeks prior to the completion date of the contract or subcontract . The Recipient
must conduct more frequent spot checks if the initial spot check or other information indicates
that there is a risk that the contractor or subcontractor is not complying with DB . In addition,
during the examinations the Recipient shall verify evidence of fringe benefit plans and
payments thereunder by contractors and subcontractors who claim credit for fringe benefit
contributions.
(d) The Recipient shall periodically review contractors and subcontractors use of apprentices
and trainees to verify registration and certification with respect to apprenticeship and training
programs approved by either the U.S Department of Labor or a state, as appropriate, and that
contractors and subcontractors are not using disproportionate numbers of, laborers, trainees
and apprentices. These reviews shall be conducted in accordance with the schedules for
spot checks and interviews described in Item 5(b) and (c) above.
(e) The Recipient must immediately report potential violations of the DB prevailing wage
requirements to the EPA DB contact listed above and to the appropriate DOL Wage and Hour
District Office listed at httD:// www. dol. aov /esa/contacts /whd /america2.htm.
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EXHIBIT H — FEDERAL CROSS - CUTTERS
The Recipient agrees to comply with the following federal laws applicable to recipients of CWSRF funding:
Environmental Authorities
1. Archeological and Historical Preservation Act of 1974, Pub. L. 86 -523, as amended, Pub. L. 93-
291 16 USC § 469a -1.
2. Clean Air Act, Pub. L. 84 -159, as amended.
3. Coastal Barrier Resources Act, Pub. L. 97 -348, 96 Stat. 1653; 16 USC § 3501 et seq.
4. Coastal Zone Management Act, Pub. L. 92 -583, as amended; 16 USC § 1451 et seq.
5. Endangered Species Act, Pub. L. 93 -205, as amended; 16 USC § 1531 et seq..
6. Environmental Justice, Executive Order 12898.
7. Floodplain Management, Executive Order, 11988 as amended by Executive Order 12148.
8. Protection of Wetlands, Executive Order 11990, as amended by Executive Order No. 12608.
9. Farmland Protection Policy Act, Pub. L. 97 -98; 7 USC § 4201 et seq.
10. Fish and Wildlife Coordination Act, Pub. L. 85 -624, as amended.
11. National Historic Preservation Act of 1966, Pub. L. 89 -665, as amended, 80 Stat. 917 (1966) 16
USC § 470 et seq.
12. Safe Drinking Water Act, Pub. L. 93 -523, as amended; 42 USC § 300f et seq.
13. Wild and Scenic Rivers Act, Pub. L. 90 -542, as amended, 82 Stat. 913; 16 USC § 1271 et seq.
14. Essential Fish Habitat Consultation. Pub. L. 94 -265, as amended, 16 USC § 1801 et seq.
15. Recycled Materials. Executive Order 13101; Section 6002 Resource Conservation and Recovery
Act — 42 USC § 6962.
Economic and Miscellaneous Authorities
1. Demonstration Cities and Metropolitan Development Act of 1966, Pub. L. 89 -754, as amended,
Executive Order 12372/ 42 USC § 3331 et seq.
2. Procurement Prohibitions under Section 306 of the Clean Air Act and Section 508 of the Clean
Water Act, including Executive Order 11738, Administration of the Clean Air Act and the Federal
Water Pollution Control Act with Respect to Federal Contracts, Grants, or Loans; 42 USC § 7606;
33 USC § 1368; 40 CFR Part 31.
3. Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91 -646, as amended; 42
USC § §4601 -4655
4. Contractors, Subcontractors, Debarment and Suspension, Executive Order 12549; 2 CFR Part
180; 2 CFR Part 1532. The Excluded Parties List System can be found at httDJ /eols.aov . The
Recipient represents and warrants that it has included a term or conditions requiring compliance
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EXHIBIT H — FEDERAL CROSS - CUTTERS
with this provision in all of its contracts and subcontracts. The Recipient acknowledges that failing
to disclose the information as required at 2 CFR 180.335 may result in the termination, delay or
negation of this Agreement.
5. Preservation of Open Competition and Government Neutrality Towards Government Contractors'
Labor Relations on Federal and Federally Funded Construction Projects, EO 13202, as amended
by EO 13208.
6. Hotel and Motel Fire Safety Act of 1990 (PL 101 -391, as amended). Recipients may search
htto: / /www.usfa.dhs.gov /applications /hotel/ .
7. Records and financial reporting. 40 CFR Part 31.
8. Copyright. 40 CFR Part 31.
Social Policy Authorities
1. Age Discrimination Act of 1975, Pub. L. 94 -135; 42 USC § 6102.
2. Race Discrimination. Title VI of the Civil Rights Act of 1964, Pub. L. 88- 352.1; 42 USC § 2000d;
40 CFRPart 7.
3. Sex Discrimination. Section 13 of the Federal Water Pollution Control Act Amendments of 1972,
Pub. L. 92 -500 (the Clean Water Act); 33 USC § 1251; 40 CFR Part 7.
4. Disability Discrimination. Section 504 of the Rehabilitation Act of 1973, Pub. L. 93 -112 (including
Executive Orders 11914 and 11250); 29 USC § 794; 40 CFR Part 7.
5. Equal Employment Opportunity, Executive Order 11246.
6. Women's and Minority Business Enterprise, Executive Orders 11625, 12138, and 12432; 40 CFR
Part 31.
7. Section 129 of the Small Business Administration Reauthorization and Amendment Act of 1988,
Pub. L. 100 -590.
8. Anti - Lobbying Provisions (40 CFR Part 34). Borrower agrees to submit certification and
disclosure forms as requested by the State Water Resources Control Board or the USEPA. In
accordance with the Byrd Anti- Lobbying Amendment, any Recipient who makes a prohibited
expenditure under 40 CFR Part 34 or fails to file the required certification or lobbying forms shall
be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such
expenditure. The Recipient shall ensure that no Project Funds provided by the State Water Board
under this assistance agreement are used to engage in lobbying of the federal government or in
litigation against the United States unless authorized under existing law. The Recipient shall
abide by its respective 2 CFR 200, 225, or 230, which prohibits the use of federal grant funds for
litigation against the United States or for lobbying or other political activities.
9. Anti - Litigation Provisions (2 CFR 220, 225, or 230).
10. Trafficking Victims Protection Act of 2000.
11. ACORN Prohibition. None of the Project Funds used in this Agreement may be used for contracts
or subcontracts to ACORN.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
CITY SEAL BEACH:
By:
Name: Jill R. Ingram
Title: Acting City Manager
Date:
STATE WATER RESOURCES CONTROL BOARD:
By:
Name: James B. Maughan
Title: Acting Deputy Director
Division of Financial Assistance
Date:
25
•
City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
CITY SEAL BEACH:
By:
Name: Jill R. Ingram
•
Title: Acting City Manager
Date:
• STATE WATER RESOURCES CONTROL BOARD:
By:
Name: James B. Maughan
Title: Acting Deputy Director
Division of Financial Assistance
Date:
25
2010 up I4d10
Clean Water
CITY OF SEAL BEACH
AND
CALIFORNIA STATE WATER RESOURCES CONTROL BOARD
Water Boards
PROJECT FINANCE AGREEMENT
STATE REVOLVING FUND PROJECT NO. C -06- 5310 -120
AGREEMENT NO. 10 -842 -550
AMOUNT: $1,100,000
TERM DATES: APRIL 6, 2011 - SEPTEMBER 21, 2032
THIS PAGE INTENTIONALLY LEFT BLANK
City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
1.1 Definitions 1
1.2 Exhibits and Appendices Incorporated. 4
ARTICLE II REPRESENTATIONS AND WARRANTIES 4
2.1 General Recipient Commitments. 4
2.3 Project Certification. 5
2.4 Award of Construction Contracts. 5
2.5 Notice. 5
2.6 Project Access 6
2.7 Project Completion; Initiation of Operations. 6
2.8 Continuous Use of Project; Lease or Disposal of Project. 7
2.9 Reports. 7
2.10 Federal Disadvantaged Business Enterprise (DBE) Reporting. 7
2.11 Records 7
2.12 Audit 8
2.13 Signage. 8
ARTICLE III FINANCING PROVISIONS 9
3.1 Purchase and Sale of Project 9
3.2 Amounts Payable by the Recipient 9
3.3 Obligation Absolute. 11
3.4 No Obligation of the State. 11
3.5 Disbursement of Project Funds; Availability of Funds. 11
3.6 Withholding of Disbursements. 12
3.7 Pledge; Rates, Fees and Charges; Additional Debt. 12
3.8 Financial Management System and Standards 13
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3.9 Accounting and Auditing Standards. 13
3.10 Federal or State Assistance 14
ARTICLE IV TAX COVENANTS 14
4.1 Governmental Unit. 14
4.2 Temporary Period 14
4.3 Working Capital. 14
4.4 Expenditure of Proceeds. 14
4.5 Private Use and Private Payments 14
4.6 No Disproportionate or Unrelated Use. 15
4.7 Management and Service Contracts. 15
4.8 No Disposition of Financed Property. 17
4.9 Useful Life of Project. 17
4.10 Installment Payments 17
4.11 No Other Replacement Proceeds 17
4.12 Reimbursement Resolution. 17
4.13 Change in Use. 17
4.14 No Federal Guarantee. 17
4.15 No Notices or Inquiries From IRS. 17
4.16 Amendments; Application. 17
4.17 Reasonable Expectations. 18
ARTICLE V MISCELLANEOUS PROVISIONS 18
5.1 Covenants. 18
5.2 Assignability 18
5.3 State Reviews and Indemnification. • 18
5.4 Termination; Immediate Repayment; Interest. 19
5.6 Prevailing Wages. 20
5.7 Timeliness. 20
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5.8 Governing Law. 20
5.9 Amendment. 20
5.10 Bonding. 20
5.11 Compliance with Law, Regulations, etc 20
5.12 Conflict of Interest. 21
5.13 Damages for Breach Affecting Tax Exempt Status or Federal Compliance. 21
5.14 Disputes 21
5.15 Independent Actor. 21
5.17 No Third Party Rights. 22
5.18 Operation and Maintenance; Insurance. 22
5.19 Permits, Subcontracting, Remedies and Debarment. 23
5.20 Recipient's Responsibility for Work. 23
5.21 Related Litigation. 23
5.22 Rights in Data. 24
5.23 State Water Board Action; Costs and Attorney Fees. 24
5.24 Unenforceable Provision 24
5.25 Useful Life. 24
5.26 Venue 24
5.27 Waiver and Rights of the State Water Board 24
EXHIBIT A — SCOPE OF WORK & INCORPORATED DOCUMENTS
EXHIBIT A.1 — APPROVAL OF AWARD /ELIGIBILITY DETERMINATION APPROVAL/FINAL BUDGET
EXHIBIT B — PROJECT FINANCING AMOUNT
EXHIBIT C - CWSRF PAYMENT SCHEDULE
EXHIBIT D - SPECIAL CONDITIONS
EXHIBIT E.— [reserved]
EXHIBIT F — SCHEDULE OF SYSTEM OBLIGATIONS
EXHIBIT G — DAVIS -BACON REQUIREMENTS
EXHIBIT H — FEDERAL CROSS - CUTTERS
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Agreement No.: 10- 842 -550
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This Project Finance Agreement (including all exhibits and attachments hereto, this "Agreement ") is dated
as of the date set forth on the first page of this Agreement, by and between the State Water Resources
Control Board, an administrative and regulatory agency of the State of California (the "State Water
Board "), and the local agency identified on the first page of this Agreement, duly organized and existing
under the laws of the State of California (the "Recipient "):
WITNESSETH:
WHEREAS, the United States of America, pursuant to Title VI of the federal Water Pollution Control Act
(as such has been and may be amended from time to time, the "Clean Water Act ") requires each State to
establish a water pollution control revolving fund to be administered by an instrumentality of the State as a
condition to receipt of capitalization grants under the Clean Water Act; and
WHEREAS, the State of California (the "State ") has established a Clean Water State Revolving Fund
( "CWSRF ") pursuant to Chapter 6.5 of Division 7 of the California Water Code (the "State Act ") to be used
for purposes of the Clean Water Act; and
WHEREAS, the State Water Board has the responsibility to administer the CWSRF and to provide
financial assistance from the CWSRF to recipients for the construction of eligible projects, as provided in
the State Act; and
WHEREAS, the State Water Board is responsible under the Clean Water Act and the State Act for
determining the eligibility of projects for financial assistance from the CWSRF, determining a reasonable
schedule for financing and construction of projects, and for ensuring compliance with the Clean Water Act
and the terms and conditions of an applicable project finance agreement; and
WHEREAS, the Recipient has submitted to the State Water Board an application for financial assistance
from the CWSRF, for the purpose of financing or refinancing the Project described below, and the State
Water Board has reviewed and approved said application; and
WHEREAS, the Recipient has or will incur costs incurred in connection with, the planning, design,
acquisition, construction and installation of the project or projects described in Exhibit A hereto (such
projects being herein collectively referred to as the "Project "); and
WHEREAS, on the basis of the Recipient's application and the representations and warranties set forth
herein, the State Water Board proposes to assist in the financing of the costs of the Project and /or to
refund outstanding bonds, notes or other debt obligations of the Recipient, if any, issued to finance the
Project, and the Recipient desires to participate as a recipient of financial assistance from the CWSRF
and evidence its obligation to repay, which obligation will be secured by Net Revenues (herein defined),
upon the terms and conditions as hereinafter set forth in this Agreement, all pursuant to the Clean Water
Act;
NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants and
agreements herein set forth, the State Water Board and the Recipient, each binding itself, its successors
and assigns, do mutually promise, covenant and agree as follows:
ARTICLE I DEFINITIONS
1.1 Definitions.
Unless otherwise specified, each capitalized term used in this Agreement (including the Exhibits hereto)
has the following meaning:
"Additional Payments" means the Additional Payments described in Section 3.2(c) of this Agreement.
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"Agreement" means the Project Finance Agreement, dated as of the date set forth on the first page
hereof, by and between the State Water Board and the Recipient, including all exhibits and attachments
thereto.
"Allowance" means an amount based on a percentage of the accepted bid for an eligible project to
help defray the planning, design, and construction engineering and administration costs of the
Project.
"Authorized Representative" means the Mayor of a City, the Chairperson of the County Board of
Supervisors, the Chairperson of the Board of Directors of the Recipient, or another duly appointed
representative. For all authorized representatives, a certified original of the authorizing resolution that
designates the authorized representative, by title, must accompany the first payment request, and
any other documents or requests required or allowed under this Agreement.
"Bank" means the California Infrastructure and Economic Development Bank.
"Bonds" means any series of bonds issued by the Bank all or a portion of the proceeds of which may
be applied to fund the Project in whole or in part or that are secured in whole or in part by Installment
Payments paid hereunder.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor provisions and
the regulations of the U.S. Department of the Treasury promulgated thereunder.
"Completion of Construction" means the date, as determined by the Division after consultation with
the Recipient, that the work of building and erection of the Project is substantially complete.
"Construction" includes, for the purposes of expanded use projects, implementation (but not planning
or design).
"CWSRF" means Clean Water State Revolving Fund.
"Division" means the Division of Financial Assistance of the State Water Board, or any other segment
of the State Water Board authorized to administer the CWSRF.
"Enterprise Fund" means the enterprise fund of the Recipient in which System Revenues are deposited.
"Fiscal Year" means the period of twelve (12) months terminating on June 30 of any year, or any
other annual period hereafter selected and designated by the Recipient as its Fiscal Year in
accordance with applicable law.
"Force Account" means the use of the Recipient's own employees or equipment for construction of
the Project.
"Initiation of Construction" means the date that notice to proceed with work is issued for the Project,
or, if notice to proceed is not required, the date of commencement of building and erection of the
Project, or, for expanded use projects, any implementation other than planning or design.
"Installment Payments" means Installment Payments due and payable by the Recipient to the State
Water Board under this Agreement to repay the Project Costs, the amounts of which are set forth as
Exhibit C hereto.
"Material Event" means any the following events: (a) revenue shortfalls; (b) unscheduled draws on
the reserve fund or the Enterprise Fund; (c) substitution of insurers, or their failure to perform; (d)
adverse water quality findings by the Regional Water Quality Control Board; (e) litigation related to
the System Revenues or to the Project , whether pending or anticipated.
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Net Revenues" means, for any Fiscal Year, so long as there may be outstanding System Obligations
other than the Obligation, as such term is defined under the authorizing instruments for such System
Obligations, and thereafter all Revenues received by the Recipient Tess the Operations and
Maintenance Costs for such Fiscal Year.
"Obligation" means the obligation of the Recipient to make Installment Payments and Additional
Payments as provided herein, as evidenced by the execution of this Agreement, proceeds of such
obligations being used to fund the Project as specified in the Project Description attached hereto as
Exhibit A and in the documents thereby incorporated by reference.
"Operations and Maintenance Costs" means, so long as outstanding System Obligations other than
the Obligation are outstanding, the definition of such term as defined therein, and thereafter, the
reasonable and necessary costs paid or incurred by the Recipient for maintaining and operating the
System, determined in accordance with generally accepted accounting principles, including all
reasonable expenses of management and repair and all other expenses necessary to maintain and
preserve the System in good repair and working order, and including all reasonable and necessary
administrative costs of the Recipient that are charged directly or apportioned to the operation of the
System, such as salaries and wages of employees, overhead, taxes (if any), the cost of permits,
licenses and charges to operate the System and insurance premiums; but excluding, in all cases
depreciation, replacement and obsolescence charges or reserves therefor and amortization of
intangibles.
"Policy" means the State Water Board's "Policy for Implementing the State Revolving Fund for
Construction of Wastewater Treatment Facilities," as most recently amended, the State Water
Board's "Strategy for Implementing State Revolving Fund for Expanded Use Projects ", as
appropriate, and Board Resolution 2009 -0027.
• "Project" means the Project as described in Exhibit A and in the documents thereby incorporated by
reference.
•
Project Completion" for the purposes of a wastewater or water recycling project, means the date, as
determined by the Division after consultation with the Recipient, that operation of the Project is
initiated or is capable of being initiated, whichever comes first. For the purposes of all other projects,
"Project Completion" means the date that all tasks in Exhibit A are completed to the reasonable
satisfaction of the Division. This date shall be synonymous with the date specified in the "Initiation of
Operation" form submitted as part of the Approval of Award package, if any.
"Project Costs" means the incurred costs of the Recipient which are eligible for financial assistance
from the CWSRF under the federal Clean Water Act, which are allowable costs as defined under the
Policy and which are reasonable, necessary and allocable by the Recipient to the Project under
generally accepted accounting principles, plus capitalized interest. For the purposes of all other
projects, "Project Costs" means those costs incurred by the Recipient for the planning, design, and
implementation of the project as set forth in Exhibit A; this includes any monitoring, reporting,
education and outreach, or direct administrative costs associated with these tasks and deemed
necessary by the Division.
"Project Funds" means funds disbursed by the State Water Board to the Recipient for purposes of
this Agreement.
"Recipient" means the recipient of Project Funds, as identified on the front page of this Agreement.
"Revenues" means, for each Fiscal Year, all gross income and revenue received or receivable by the
Recipient from the ownership or operation of the System, determined in accordance with generally
accepted accounting principles, including all rates, fees and charges (including connection fees and
charges) as received by the Recipient for the services of the System, and all other income and
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revenue howsoever derived by the Recipient from the ownership or operation of the System or
arising from the System, including all income from the deposit or investment of any money in the
Enterprise Fund or any rate stabilization fund of the Recipient or held on the Recipient's behalf, and
any refundable deposits made to establish credit, and advances or contributions in aid of
construction.
"State" means State of California.
"State Water Board" means the State Water Resources Control Board, an administrative and
regulatory agency of the State of California.
•
"System" means for the purposes of a wastewater project, all wastewater collection, transport,
treatment, storage and disposal facilities, including land and easements thereof, owned by the
Recipient, including the Project, and all other properties, structures or works hereafter acquired and
constructed by the Recipient and determined to be a part of the System, together with all additions,
betterments, extensions or improvements to such facilities, properties, structures or works or any
part thereof hereafter acquired and constructed. For the purposes of a water recycling project,
"System" means all wastewater, water recycling, and /or potable water collection, transport, treatment,
storage and/or disposal facilities, including land and easements thereof, owned by the Recipient,
including the Project, and all other properties, structures or works hereafter acquired and constructed
by the Recipient and determined to be a part of the System, together with all additions, betterments,
extensions or improvements to such facilities, properties, structures or works or any part thereof
hereafter acquired and constructed. For the purposes of all other projects, "System" means all
nonpoint source control or estuary enhancement facilities, including land and 'easements thereof,
owned by the Recipient, including the Project, and all other properties, structures or works hereafter
acquired and constructed by the Recipient and determined to be a part of the System, together with
all additions, betterments, extensions or improvements to such facilities, properties, structures or
works or any part thereof hereafter acquired and constructed.
"System Obligations" means all senior, parity and subordinate obligations of the Recipient payable
from Revenues as identified as of the date of this Agreement in Exhibit F and such additional
obligations as may hereafter be issued in accordance with the provisions �f such obligations.
1.2 Exhibits and Appendices Incorporated.
All exhibits and appendices to this Agreement, including any amendments and supplements hereto, are
hereby incorporated herein and made a part of this Agreement.
ARTICLE II REPRESENTATIONS AND WARRANTIES
2.1 General Recipient Commitments.
The Recipient accepts and agrees to comply with all terms, provisions, conditions, and commitments
of this Agreement, including all incorporated documents, and to fulfill all assurances, declarations,
representations, and commitments made by the Recipient in its application, accompanying
documents, and communications filed in support of its request for financial assistance.
2.2 Completion of Project.
The Recipient agrees to expeditiously proceed with and complete construction of the Project in
substantial accordance with Exhibit A.
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2.3 Project Certification.
For wastewater or water recycling projects, one (1) year after initiation of operation, the Recipient
shall certify to the State Water Board whether or not the Project, as of that date, meets applicable
design specifications and effluent limitations. If the Recipient cannot certify that the Project meets
such specifications and limitations at that time, the Recipient shall submit a corrective action report.
The corrective action report shall include an estimate of the nature, scope, and cost of the corrective
action, and a time schedule to expeditiously make all needed corrections, at the Recipient's expense,
to allow affirmative certification for the Project.
For all other projects, the Recipient shall prepare a Project Certification that includes information
collected by the Recipient in accordance with the Project monitoring and reporting plan, a
determination of the effectiveness of the Project in preventing or reducing pollution, and the results of
the monitoring program. The Project Certification shall follow the general format provided by the
Program Manager.
Failure to submit a Project Certification, an affirmative certification, or a corrective action report that
meets the above requirements and is satisfactory to the Division within fifteen (15) months of the
Project Completion date will cause the State Water Board to stop processing any pending or future
applications for new financial assistance, withhold payments on any existing financial assistance, and
begin administrative proceedings pursuant to sections 13267 and 13268 of the Water Code.
2.4 Award of Construction Contracts.
(a) The Recipient agrees to award the prime construction contract no later than the date specified in
Exhibit A.
(b) The Recipient agrees to promptly notify the Division in writing both of the award of the prime
construction contract for the Project and of Initiation of Construction of the Project. The Recipient
agrees to make all reasonable efforts to complete construction in substantial conformance with
the terms of the contract by the Completion of Construction date established in Exhibit A. Such
date shall be binding upon the Recipient unless modified in writing by the Division upon a
showing of good cause by the Recipient. The Recipient shall deliver any request for extension of
the Completion of Construction date Tess than 90 days prior to the Completion of Construction
date. The Division will not unreasonably deny such a timely request, but the Division will deny
requests received after this time.
2.5 Notice.
The Recipient agrees to promptly notify the Division in writing of:
•
(a) Litigation, circulation of a petition to challenge rates, consideration of bankruptcy, dissolution, or
disincorporation, or any other thing that could negatively affect or jeopardize the Recipient's
Revenues;
(b) Any substantial change in scope of the Project. The Recipient agrees that no substantial change
in the scope of the Project will be undertaken until written notice of the proposed change has
been provided to the Division and the Division has given written approval for such change;
(c) Cessation of all major construction work on the Project where such cessation of work is expected
to or does extend for a period of thirty (30) days or more;
(d) Any circumstance, combination of circumstances, or condition, which is expected to or does.
delay Completion of Construction for a period of ninety (90) days or more beyond the estimated
date of Completion of Construction previously provided to the Division;
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(e) Discovery of any potential archeological or historical resource. Should a potential archeological
or historical resource be discovered during construction of the Project, the Recipient agrees that
all work in the area of the find will cease until a qualified archeologist has evaluated the situation
and made recommendations regarding preservation of the resource, and the Division has
determined what actions should be taken to protect and preserve the resource. The Recipient
agrees to implement appropriate actions as directed by the Division;
(f) Discovery of any unexpected endangered or threatened species, as defined in the federal
Endangered Species Act. Should a federally protected species be unexpectedly encountered
during construction of the Project, the Recipient agrees to promptly notify the Division. This
notification is in addition to the Recipient's obligations under the federal Endangered Species Act;
(g) Any monitoring, demonstration, or other implementation activities such that the State Water
Board and/or Regional Water Quality Control Board (Regional Water Board) staff may observe •
and document such activities;
(h) Any public or media event publicizing the accomplishments and/or results of this Agreement and
provide the opportunity for attendance and participation by state and federal representatives with
at least ten (10) working days notice;
(i) Completion of Construction of the Project, and actual Project Completion; or
co Material Events.
2.5.5 Findings and Challenge
Upon consideration of a voter initiative to reduce System Revenues, the Recipient shall make a
finding regarding the effect of such a reduction on the Recipient's ability to satisfy its Obligation under
this Agreement and to operate and maintain the Project for its useful life. The Recipient agrees to
challenge any such initiative that it finds will render it unable to satisfy either the Obligation or the
covenant to operate and maintain, or both. The Recipient shall diligently pursue and bear any and all
costs related to such challenge. The Recipient shall notify and regularly update the State Water
Board regarding any such challenge.
2.6 Project Access.
The Recipient agrees to insure that the State Water Board, the Governor of the State, the United
States Environmental Protection Agency, the Office of Inspector General, any member of Congress,
the President of the United States, or any authorized representative of the foregoing, will have
suitable access to the Project site at all reasonable times during Project construction and thereafter
for the term of the Obligation. The Recipient acknowledges that the Project records and locations
are public records.
2.7 Project Completion; Initiation of Operations.
Upon Completion of Construction of the Project, the Recipient agrees to expeditiously initiate Project
operations. The Recipient agrees to make all reasonable efforts to meet the Project Completion date
established in Exhibit A. Such date shall be binding upon the Recipient unless modified in writing by
the Division upon a showing of good cause by the Recipient. The Recipient shall deliver any request
for extension of the Project Completion date no less than 90 days prior to the Project Completion
date. The Division will not unreasonably deny such a timely request, but the Division will deny
requests received after this time.
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2.8 Continuous Use of Project; Lease or Disposal of Project.
The Recipient agrees that, except as provided in the Agreement, it will not abandon, substantially
discontinue use of, lease, or dispose of the Project or any significant part or portion thereof during the
useful life of the Project without prior written approval of the Division. Such approval may be
conditioned as determined to be appropriate by the Division, including a condition requiring
repayment of all or any portion of all remaining funds covered by this Agreement together with
accrued interest and any penalty assessments which may be due.
2.9 Reports.
(a) Quarterly Reports. The Recipient agrees to expeditiously provide status reports no less
frequently than quarterly, starting with the execution of this Agreement. At a minimum the
reports will contain the following information: a summary of progress to date including a
description of progress since the last report, percent construction complete, percent contractor
invoiced, and percent schedule elapsed; a description of compliance with environmental
requirements; a listing of change orders including amount, description of work, and change in
contract amount and schedule; any problems encountered, proposed resolution, schedule for
resolution, and status of previous problem resolutions.
(b) As Needed Reports. The Recipient agrees to expeditiously provide, during the term of this
Agreement, such reports, data, and information as may be reasonably required by the Division,
including but not limited to material necessary or appropriate for evaluation of the CWSRF
Program or to fulfill any reporting requirements of the federal government.
2.10 Federal Disadvantaged Business Enterprise (DBE) Reporting.
The Recipient agrees to report DBE utilization to the Division on the DBE Utilization Report, State
Water Board Form DBE UR334. Reports must be submitted to the Division semiannually within ten
(10) calendar days following April 1 and October 1 until such time as the "Notice of Completion" is
issued. The Recipient agrees to comply with 40 CFR Section 33.301.
2.11 Records.
(a) Without limitation of the requirement to maintain Project accounts in accordance with generally
accepted accounting principles the Recipient agrees to:
(1) Establish an official file for the Project which shall adequately document all significant actions
relative to the Project;
(2) Establish separate accounts which will adequately and accurately depict all amounts
received and expended on the Project, including all assistance funds received under this •
Agreement;
(3) Establish separate accounts which will adequately depict all income received which is
attributable to the Project, specifically including any income attributable to assistance funds
disbursed under this Agreement;
(4) Establish an accounting system which will accurately depict final total costs of the Project,
including both direct and indirect costs;
(5) Establish such accounts and maintain such records as may be necessary for the State to
fulfill federal reporting requirements, including any and all reporting requirements under
federal tax statutes or regulations; and
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(6) If Force Account is used by the Recipient for any phase of the Project, other than for
planning, design and construction engineering, and administration provided for by allowance,
accounts will be established which reasonably document all employee hours charged to the
Project and the associated tasks performed by each employee. Indirect Force Account costs
are not eligible for funding.
(b) The Recipient shall be required to maintain books, records and other material relative to the
Project in accordance with generally accepted accounting principles. The Recipient shall also be •
required to retain such books, records, and other material for each subcontractor who performed
work on this project for a minimum of six (6) years after repayment of Project Funds. The
Recipient shall require that such books, records, and other material be subject at all reasonable
times (at a minimum during normal business hours) to inspection, copying, and audit by the State
Water Board, the Bureau of State Audits, the United States Environmental Protection Agency
(USEPA), the Office of Inspector General, or any authorized representatives of the
aforementioned, and shall allow interviews during normal business hours of any employees who
might reasonably have information related to such records. The Recipient agrees to include a
similar right regarding audit, interviews, and records retention in any subcontract related to the
performance of this Agreement.
2.12 Audit.
(a) The Division, at its option, may call for an audit of financial information relative to the Project,
where the Division determines that an audit is desirable to assure program integrity or where
such an audit becomes necessary because of federal requirements. Where such an audit is
called for, the audit shall be performed by a certified public accountant independent of the
Recipient and at the cost of the Recipient. The audit shall be in the form required by the Division.
(b) Audit disallowances will be returned to the State Water Board.
2.13 Signage.
The Recipient shall place a sign at least four feet tall by eight feet wide made of 3 /4 inch thick exterior
grade plywood or other approved material in a prominent location on the Project site. The sign shall
include the following color logos:
. . q-1.v'
i
Clean Water
Water Boards
(logos available from the Division) and the following disclosure statement:
Funding for this project has been provided in full or in part by the Clean Water State
Revolving Fund through an agreement with the State Water Resources Control Board.
The Project sign may include another agency's required promotional information so long as the
above logos and disclosure statement are equally prominent on the sign. The sign shall be prepared
in a professional manner.
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Include the following disclosure statement in any document, written report, or brochure prepared in
whole or in part pursuant to this Agreement:
Funding for this project has been provided in full or in part through an agreement with the
State Water Resources Control Board. The contents of this document do not necessarily
reflect the views and policies of the State Water Resources Control Board, nor does
mention of trade names or commercial products constitute endorsement or
recommendation for use. (Gov. Code § 7550, 40 CFR § 31.20.)
ARTICLE III FINANCING PROVISIONS
3.1 Purchase and Sale of Project.
The Recipient hereby sells to the State Water Board and the State Water Board hereby purchases
from the Recipient the Project. Simultaneously therewith, the Recipient hereby purchases from the
State Water Board, and the State Water Board hereby sells to the Recipient, the Project in
accordance with the provisions of this Agreement. All right, title and interest in the Project shall
•
immediately vest in the Recipient on the date of execution and delivery of this Agreement without
further action on the part of the Recipient or the State Water Board.
3.2 Amounts Payable by the Recipient.
•
(a) Installment Payments. Repayment of the Project Funds, together with all interest accruing
thereon, shall be repaid in annual installments commencing on the date that is one (1) year after
Completion of Construction, and shall be fully amortized by the date specified in Exhibit B.
The repayment amount is based on a standard fully amortized assistance amount with equal
annual repayments. The remaining balance is the previous balance, plus the disbursements,
plus the accrued interest on both, Tess the repayment. Repayment calculations will be made
beginning one (1) year after Completion of Construction and shall be fully amortized not later
than the date specified in Exhibit B. Exhibit C is a CWSRF Payment Schedule based on the
provisions of this article and an estimated disbursement schedule. The actual repayments will be
based on actual disbursements.
Upon Completion of Construction and submission of necessary reports, the Division will prepare
an appropriate CWSRF Payment Schedule and supply the same to the Recipient. The CWSRF
Payment Schedule may be amended as necessary to accurately reflect amounts due under this
Agreement. Any amended CWSRF Payment Schedule which is necessary will be prepared by
the Division and furnished to the Recipient.
The Recipient agrees to make each installment payment on or before the due date therefor. A
ten (10) day grace period will be allowed, after which time a penalty in the amount of costs
incurred to the State Water Board will be assessed for late payment. These costs may include,
but are not limited to, lost interest earnings, staff time, bond debt service default penalties, if any,
and other costs incurred. Penalties assessed will not change the principal balance of the
financing Agreement. Such penalties will be treated as a separate receivable in addition to the
annual payment due. For purposes of penalty assessment, repayment will be deemed to have
been made if repayment is deposited in the U.S. Mail within the grace period with postage
prepaid and properly addressed. Any penalties assessed will not be added to the assistance
amount balance, but will be treated as a separate account and obligation of the Recipient. The
interest penalty will be assessed from the repayment due date.
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Agreement No.: 10- 842 -550
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The Recipient as a whole is obligated to make all payments required by this Agreement to the
State Water Board, notwithstanding any individual default by its constituents or others in the
payment to the Recipient of fees, charges, taxes, assessments, tolls or other charges
( "Charges ") levied or imposed by the Recipient. The Recipient shall provide for the punctual
payment to the State Water Board of all amounts which become due under this Agreement and
which are received from constituents or others in the payment to the Recipient. In the event of
failure, neglect or refusal of any officer of the Recipient to levy or cause to be levied any Charge
to provide payment by the Recipient under this Agreement, to enforce or to collect such Charge,
or to pay over to the State Water Board any money collected on account of such Charge
necessary to satisfy any amount due under this Agreement, the State Water Board may take
such action in a court of competent jurisdiction as it deems necessary to compel the
performance of all duties relating to the imposition or levying and collection of any of such
Charges and the payment of the money collected therefrom to the State Water Board. Action
taken pursuant hereto shall not deprive the State Water Board of, or limit the application of, any
other remedy provided by law or by this Agreement.
Attached as Exhibit C is a CWSRF Payment Schedule based on the provisions of this section
and an estimated disbursement schedule. CWSRF Payment Schedule will be revised based on
actual disbursements following Completion of Construction.
Each Installment Payment shall be paid by check and in lawful money of the United States of
America.
The Recipient agrees that it shall not be entitled to interest earned on undisbursed project funds.
Upon execution of this Agreement, the State Water Board shall encumber an amount equal to
the Obligation. The Recipient hereby agrees to pay Installment Payments and Additional
Payments from Net Revenues and/or other amounts legally available to the Recipient therefor.
Interest on any funds disbursed to the Recipient shall begin to accrue as of the date of each
disbursement.
(b) Project Costs. The Recipient agrees to pay any and all costs connected with the Project
including, without limitation, any and all Project Costs. If the Project Funds are not sufficient to
pay the Project Costs in full, the Recipient shall nonetheless complete the Project and pay that
portion of the Project Costs in excess of available Project Funds, and shall not be entitled to any
reimbursement therefor from the State Water Board.
(c) Additional Payments. In addition to the Installment Payments required to be made by the
Recipient, the Recipient shall also pay to the State Water Board the reasonable extraordinary
fees and expenses of the State Water Board, and of any assignee of the State Water Board's
right, title and interest in and to this Agreement, in connection with this Agreement, including all
expenses and fees of accountants, trustees, attorneys, litigation costs, insurance premiums and
all other extraordinary costs reasonably incurred by the State Water Board or assignee of the
State Water Board.
Additional Payments shall be billed to the Recipient by the State Water Board from time to time,
together with a statement executed by a duly authorized representative of the State Water Board,
stating that the amounts billed pursuant to this section have been incurred by the State Water
Board or its assignee for one or more of the above items and a copy of the invoice or statement
for the amount so incurred or paid. Amounts so billed shall be paid by the Recipient within thirty
(30) days after receipt of the bill by the Recipient.
(d) The Recipient may without penalty prepay all or any portion of the outstanding principal amount
of the Obligation provided that the Recipient shall also pay at the time of such prepayment all
accrued interest on the principal amount prepaid through the date of prepayment.
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3.3 Obligation Absolute.
The obligation of the Recipient to make the Installment Payments and other payments required to be
made by it under this Agreement, from Net Revenues and/or other amounts legally available to the
Recipient therefor, is absolute and unconditional, and until such time as the Installment Payments
and Additional Payments have been paid in full, the Recipient shall not discontinue or suspend any
Installment Payments or other payments required to be made by it hereunder when due, whether or
not the System or any part thereof is operating or operable or has been completed, or its use is
suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such
Installment Payments and other 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.
3.4 No Obligation of the State.
Any obligation of the State Water Board herein contained shall not be an obligation, debt or liability of
the State and any such obligation shall be payable solely out of the moneys in the CWSRF made
available pursuant to this Agreement.
3.5 Disbursement of Project Funds; Availability of Funds.
(a) Except as may be otherwise provided in this Agreement, disbursement of Project Funds will be
made as follows:
(1) Upon execution and delivery of this Agreement, the Recipient may request immediate
disbursement of any eligible incurred planning and design allowance as specified in Exhibit
B from the Project Funds through submission to the State Water Board of the Disbursement
Request Form 260, or any amendment thereto, duly completed and executed.
(2) The Recipient may request disbursement of eligible construction and equipment costs
consistent with budget amounts referenced in Exhibit B. (Note that this Agreement will be
amended to incorporate Approval of Award.)
(3) Additional Project Funds will be promptly disbursed to the Recipient upon receipt of
Disbursement Request Form 260, or any amendment thereto, duly completed and executed
by the Recipient for incurred costs consistent with this Agreement, along with receipt of
status reports due under Section 2.9 above.
(4) The Recipient agrees that it will not request disbursement for any Project Cost until such
cost has been incurred and is currently due and payable by the Recipient, although the
actual payment of such cost by the Recipient is not required as a condition of disbursement
request.
(5) Recipient shall spend Project Funds within 30 days of receipt. Any interest earned on
Project Funds shall be reported to the State Water Board and may be required to be
returned to the State Water Board or deducted from future disbursements.
(6) [reserved]
(7) Notwithstanding any other provision of this Agreement, no disbursement shall be required at
• any time or in any manner which is in violation of or in conflict with federal or state laws,
policies, or regulations.
(b) The State Water Board's obligation to disburse Project Funds is contingent upon the availability
of sufficient funds to permit the disbursements provided for herein. If sufficient funds are not
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available for any reason, including but not limited to failure of the federal or State government to
appropriate funds necessary for disbursement of Project Funds, the State Water Board shall not
be obligated to make any disbursements to the Recipient under this Agreement. This provision
shall be construed as a condition precedent to the obligation of the State Water Board to make
any disbursements under this Agreement. Nothing in this Agreement shall be construed to
provide the Recipient with a right of priority for disbursement over any other agency. If any
disbursements due the Recipient under this contract are deferred because sufficient funds are
unavailable, such disbursement will be made to the Recipient when sufficient funds do become
available.
3.6 Withholding of Disbursements.
(a) The State Water Board may withhold all or any portion of the funds provided for by this
Agreement in the event that:
(1) The Recipient has materially violated, or threatens to materially violate, any term, provision,
condition, or commitment of this Agreement; or
(2) The Recipient fails to maintain reasonable progress toward completion of the Project.
(b) For the purposes of this section, the terms "material violation" or "threat of material violation"
include, but are not limited to:
(1) Placement on the ballot of an initiative to reduce revenues securing this Agreement;
(2) Passage of such an initiative;
(3) Successful challenges by ratepayer(s) to process used by Recipient to set, dedicate, or
otherwise secure revenues used for securing this Agreement; or
(4) Any other action or lack of action that may be construed as a material violation or threat
thereof.
3.7 Pledge; Rates, Fees and Charges; Additional Debt.
(a) Establishment of Enterprise Fund. In order to carry out its System Obligations, including the
Obligation, the Recipient agrees and covenants that it shall establish and maintain or shall have
established and maintained the Enterprise Fund. All Revenues received shall be deposited when
and as received in trust in the Enterprise Fund. This requirement applies to Recipients that are
public agencies.
(b) Pledge of Net Revenues. The Obligation hereunder shall be secured by a lien on and pledge of
Net Revenues in priority as specified in Exhibit F. The Recipient hereby pledges and grants such
lien on and pledge of Net Revenues to secure the Obligation, including payment of Installment
Payments and Additional Payments hereunder. The Net Revenues in the Enterprise Fund shall
be subject to the lien of such pledge without any physical delivery thereof or further act, and the
lien of such pledge shall be valid and binding as against all parties having claims of any kind in
tort, contract or otherwise against the Recipient.
(c) Application and Purpose of the Enterprise Fund. Subject to the provisions of any outstanding
System Obligations, money on deposit in the Enterprise Fund shall be applied and used first, to
pay Operations and Maintenance Costs, and thereafter, all amounts due and payable with
respect to the System Obligations. After making all payments hereinabove required to be made
in each Fiscal Year, the Recipient may expend in such Fiscal Year any remaining money in the
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Enterprise Fund for any lawful purpose of the Recipient, including payment of subordinate debt.
This requirement applies to Recipients that are public agencies.
(d) Rates, Fees and Charges. The Recipient agrees, to the extent permitted by law, to fix, prescribe
and collect rates, fees and charges for the System during each Fiscal Year which are
reasonable, fair and nondiscriminatory and which will be at least sufficient to yield during each
Fiscal Year Net Revenues equal to the debt service on System Obligations, including the
Obligation, for such Fiscal Year. The Recipient may make adjustments from time to time in such
fees and charges and may make such classification thereof as it deems necessary, but shall not
reduce the rates, fees and charges then in effect unless the Net Revenues from such reduced
rates, fees and charges will at all times be sufficient to meet the requirements of this section.
The Recipient agrees to promptly challenge any initiative that would impair the Obligation and
publicly state its opposition to any rate challenges. This requirement applies to Recipients that
are public agencies.
(e) Future Debt. The Recipient's future debt may not be senior to CWSRF debt. The Recipient's
future local debt may be on parity with the CWSRF debt if the following conditions are met:
(1) The Recipient's net revenues pledged to pay all senior debts relying on the pledged
revenue source are at least 1.2 times the highest year's debt service and net revenues
pledged to pay all debts are at least 1.1 times the highest year's debt service; and
(2) One of the following conditions is met:
(A) The Recipient's proposed parity Additional Obligation is rated "A," or higher, by at
least two nationally recognized rating agencies; or
(B) The Recipient is a disadvantaged community and the Division determines that it
would be economically burdensome for the agency to obtain nationally recognized
ratings for its parity debt; or
(C) The Recipient is a disadvantaged community and the Division determines that
requiring the proposed Additional Obligations to be subordinate to the Recipient's
Obligations hereunder will unduly restrict the Recipients from obtaining future
system debt necessary for water quality improvements.
3.8 Financial Management System and Standards.
The Recipient agrees to comply with federal standards for financial management systems. The
Recipient agrees that, at a minimum, its fiscal control and accounting procedures will be sufficient to
permit preparation of reports required by the federal government and tracking of Project funds to a
level of expenditure adequate to establish that such funds have not been used in violation of federal
or state law or the terms of this Agreement. To the extent applicable, the Recipient agrees to be
bound by and to comply with, the provisions and requirements of the federal Single Audit Act of 1984
(Pub. L.98 -502) Office of Management and Budget (OMB) Circular No. A -133, and updates or
revisions, thereto.
3.9 Accounting and Auditing Standards.
The Recipient will maintain separate Project accounts in accordance with generally accepted
accounting principles. The Recipient shall comply with "Standards for Audit of Governmental
Organizations, Programs, Activities and Functions" promulgated by the U.S. General Accounting
Office. (40 CFR § 35.3135(1).)
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3.10 Federal or State Assistance.
•
If federal or state funding for Project Costs is made available to the Recipient from sources other
than the CWSRF, the Recipient may retain such funding up to an amount which equals the
Recipient's local share of Project Costs. To the extent allowed by requirements of other funding
sources, any funding received in excess of the Recipient's local share, not to exceed the total
amount of the CWSRF financing assistance, shall be remitted to the State Water Board to be applied
to Installment Payments due hereunder.
ARTICLE IV TAX COVENANTS
4.1 Governmental Unit.
The Recipient is a state or local governmental unit as defined in Section 1.103 -1 of the Treasury
Regulations or an instrumentality thereof (a "Governmental Unit ") and is not the federal government
or any agency or instrumentality thereof. The Recipient exclusively owns and, except as provided in
Section 4.7 hereof, operates the Project.
4.2 Temporary Period.
The Recipient reasonably expects that at least eighty -five percent (85 %) of the Project Funds will be
allocated to expenditures for the Project within three (3) years of the earlier of the effective date of
this Agreement or the date the Bonds are issued ( "Applicable Date "). The Recipient has incurred, or
reasonably expects that it will incur within six (6) months of the Applicable Date, a substantial binding
obligation (i.e., not subject to contingencies within the control of the Recipient or a related party) to a
third party to expend at least five percent (5 %) of the Project Funds on the costs of the Project. The
completion of acquisition, construction, improvement and equipping of the Project and the allocation
of Project Funds to expenditures for the Project will proceed with due diligence.
4.3 Working Capital.
No operational expenditures of the Recipient or any related entity are being, have been or will be
financed or refinanced with Project Funds.
4.4 Expenditure of Proceeds.
Project Funds shall be used exclusively for the following purposes: (i) architectural, engineering,
surveying, soil testing, and similar costs paid with respect to the Project incurred prior to the
commencement of construction and in an aggregate amount not exceeding twenty percent (20 %) of
the Project Funds, (ii) capital expenditures relating to the Project originally paid by the Recipient on
or after the date hereof, (iii) interest on the Obligation through the later of three (3) years after the
Applicable Date or one (1) year after the Project is placed in service, and (iv) initial operating
expenses directly associated with the Project in the aggregate amount not more than five percent
(5 %) of the Project Funds.
4.5 Private Use and Private Payments.
None of the Project Funds or the Project are, have been or will be used in the aggregate for any
activities that constitute a Private Use (as defined below). None of the principal of or interest with
respect to the Installment Payments will be secured by any interest in property (whether or not the
Project) used for a Private Use or in payments in respect of property used for a Private Use, or will be
derived from payments in respect of property used for a Private Use. "Private Use" means any
activity that constitutes a trade or business that is carried on by persons or entities, other than a
Governmental Unit. The leasing of the Project or the access by or the use of a person or entity other
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than a Governmental Unit on a basis other than as a member of the general public shall constitute a
Private Use.
4.6 No Disproportionate or Unrelated Use.
None of the Project Funds or the Project are, have been or will be used for a Private Use that is
unrelated or disproportionate to the governmental use of the Project Funds.
4.7 Management and Service Contracts.
With respect to management and service contracts, the determination of whether a particular use
constitutes Private Use shall be determined on the basis of applying Section 1.141- 3(b)(4) of the
Treasury Regulations and Revenue Procedure 97 -13 and other applicable rules and regulations. As
of the date hereof, none of the Project Funds or the Project are being used to provide property
subject to contracts or other arrangements with persons or entities engaged in a trade or business
(other than Governmental Units) that involve the management of property or the provision of services
that do not comply with the standards of the Treasury Regulations and Revenue Procedure 97 -13.
Except to the extent the Recipient has received an opinion of counsel expert in the issuance of state
and local government bonds the interest on which is excluded from gross income under Section 103
of the Code ( "Nationally- Recognized Bond Counsel ") and satisfactory to the State Water Board and
the Bank to the contrary, the Recipient will not enter into any management or service contracts with
any person or entity that is not a Governmental Unit for services to be provided with respect to the
Project except with respect to contracts where the following requirements are complied with: (i) the
compensation is reasonable for the services rendered; (ii) the compensation is not based, in whole or
in part, on a share of net profits from the operation of the Project; (iii) not more than twenty percent
(20 %) of the voting power of the Recipient in the aggregate may be vested in the service provider
and its directors, officers, shareholders and employees and vice versa; (iv) any overlapping board
members between the Recipient and the service provider must not include the chief executive officer
or executive director of either, or their respective governing bodies; and (v):
(a) At least ninety -five percent (95 %) of the compensation for services for each annual period during
the term of the contract is based on a periodic fixed fee which is a stated dollar amount for
services rendered for a specified period of time. The stated dollar amount may automatically
increase according to a specified objective external standard that is not linked to the output or
efficiency of a facility, e.g., the Consumer Price Index and similar external indices that track
increases in prices in an area or increases in revenues or costs in an industry are objective
external standards. A fee shall not fail to qualify as a periodic fixed fee as a result of a one (1)
time incentive award during the term of the contract under which compensation automatically
increases when a gross revenue or expense target (but not both) is reached if that award is a
single stated dollar amount. The term of the contract, including all renewal options, must not
exceed the lesser of eighty percent (80 %) of the reasonably expected useful life of the financed
property and fifteen (15) years (twenty (20) years for "public utility property" within the meaning of
Section 168(i)(10) of the Code);
(b) At least eighty percent (80 %) of the compensation for services for each annual period during the
term of the contract is based on a periodic fixed fee. The term of the contract, including all
renewal options, must not exceed the lesser of eighty percent (80 %) of the reasonably expected
useful life of the financed property and ten (10) years. A one (1) time incentive award during the
term of the contract similar to the award described in subsection (a) above is permitted under
this option as well;
(c) At least fifty percent (50 %) of the compensation for services for each annual period during the
term of the contract is based on a periodic fixed fee or all of the compensation for services is
based on a capitation fee or combination of a periodic fixed fee and a capitation fee. A capitation
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fee is a fixed periodic amount for each person for whom the service provider or the Recipient
assumes the responsibility to provide all needed services for a specified period so long as the
quantity and type of services actually provided to covered persons vary substantially; e.g., a fixed
dollar amount payable per month to a service provider for each member of a plan for whom the
provider agrees to provide all needed services for a specified period. A capitation fee may
include a variable component of up to twenty percent (20 %) of the total capitation fee designed to
protect the service provider against risks such as catastrophic loss. The term of the contract,
including all renewal options, must not exceed five (5) years. The contract must be terminable by
the Recipient on reasonable notice without penalty or cause, at the end of the third year of the
contract;
(d) All of the compensation for services is based on a per -unit fee or a combination of a per -unit fee
and a periodic fee. A per -unit fee is defined to mean a fee based on a unit of service provided as
specified in the contract or otherwise specifically determined by an independent third party, such
as the administrator of the program or the Recipient; e.g., a stated dollar amount for each
specified procedure performed, car parked or passenger mile is a per -unit fee. The term of the
contract, including all renewal options, must not exceed three (3) years. The contract must be
terminable by the Recipient on reasonable notice, without penalty or cause, at the end of the
second year of the contract term; or
(e) All of the compensation for services is based on a percentage of fees charged or a combination
of a per -unit fee and a percentage of revenue or expense fee. During the start up period,
however, compensation may be based on a percentage of either gross revenues, adjusted gross
revenues or expenses of a facility. The term of the contract, including renewal options, must not
exceed two (2) years. The contract must be terminable by the Recipient on reasonable notice
without penalty or cause, at the end of the first year. This type of contract is permissible only with
respect to contracts under which the service provider primarily provides services to third parties,
and management contracts involving a facility during an initial start-up period for which there
have been insufficient operations to establish a reasonable estimate of the amount of the annual
gross revenues and expenses (e.g., a contract for general management services for the first
year of the operations).
If the compensation terms of a management or service contract are materially revised, the
requirements for compensation terms must be retested as of the date of the material revision
and the management or service contract is treated as one that was newly entered into as of the
date of the material revision.
A renewal option, for purposes of the foregoing, is defined to mean a provision under which the
service provider has a legally enforceable right to renew the contract. Thus, for example, a
provision under which a contract is automatically renewed for one (1) year periods absent
cancellation by either party is not a renewal option, even if it is expected to be renewed.
A cancellation penalty is defined to include a limitation on the Recipient's ability to compete with
the service provider, a requirement that the Recipient purchase equipment, goods or services
from the service provider, and a requirement that the Recipient pay liquidated damages for
cancellation of the contract; in comparison, a requirement effective on cancellation that the
Recipient reimburse the service provider for ordinary and necessary expenses or a restriction
against the Recipient hiring key personnel of the service provider is generally not a contract
termination penalty. Another contract between the service provider and the Recipient, such as
an Installment Sale Agreement or guarantee by the service provider, is treated as creating a
contract termination penalty if that contract contains terms that are not customary or arm's
length, that could operate to prevent the Recipient from terminating the contract (e.g., provisions
under which the contract terminates if the management contract is terminated or that places
substantial restrictions on the selection of a substitute service provider).
•
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Agreement No.: 10 -842 -550
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The service provider must not have any role or relationship with the Recipient, that, in effect,
substantially limits the Recipient's ability to exercise its rights, including cancellation rights, under
the contract, based on all the facts and circumstances.
4.8 No Disposition of Financed Property.
The Recipient does not expect to sell or otherwise dispose of any portion of the Project, in whole or in
part, prior to the final maturity date of the Obligation.
4.9 Useful Life of Project.
The economic useful life of the Project, commencing at Project Completion, is at least equal to the
term of this Agreement, as set forth on Exhibit B hereto.
4.10 Installment Payments.
Installment Payments generally are expected to be derived from current revenues of the Recipient in
each year, and current revenues are expected to equal or exceed debt service on the Obligation
during each payment period.
4.11 No Other Replacement Proceeds.
The Recipient will not use any of the Project Funds to replace funds of the Recipient which are or will
be used to acquire investment property reasonably expected to produce a yield that is materially
higher than the yield on the Bonds.
4.12 Reimbursement Resolution.
See Exhibit E, Recipient Reimbursement Resolution.
4.13 Change in Use.
The Recipient reasonably expects to use all Project Funds and the Project for the entire stated term
to maturity of the Obligation. Absent an opinion of Nationally- Recognized Bond Counsel to the effect
that such use of Project Funds will not adversely affect the exclusion from federal gross income of
interest on the Bonds pursuant to Section 103 of the Code, the Recipient will use the property
financed or refinanced with Project Funds solely as set forth in the Agreement.
4.14 No Federal Guarantee.
The Recipient will not directly or indirectly use any of the Project Funds that would cause the Bonds
to be "federally guaranteed" within the meaning of Section 149(b) of the Code.
4.15 No Notices or Inquiries From IRS.
The Recipient has not received any notice or inquiry by the Internal Revenue Service within the last
ten (10) years regarding any obligations issued by the Recipient, the interest on which obligations is
excludable from federal income taxation.
4.16 Amendments; Application.
The provisions in this Article may be amended or supplemented at any time to reflect changes in the
Code upon obtaining an opinion of Nationally- Recognized Bond Counsel that such amendment will
not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to
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Section 103 of the Code. The provisions in this Article shall apply to a Recipient only if any portion of
the Project Funds is derived from proceeds of Bonds.
4.17 Reasonable Expectations.
To the best of my knowledge, information and belief, and based on the facts and estimates as set
forth in the tax covenants in this Article, the expectations of the Recipient as set forth in this Article
are reasonable. The Recipient is not aware of any facts or circumstances that would cause it to
question the accuracy or reasonableness of any representation made in the provisions in this Article.
ARTICLE V MISCELLANEOUS PROVISIONS
5.1 Covenants.
(a) Tax Covenant. Notwithstanding any other provision hereof, the Recipient covenants and agrees
that it will comply with the Tax Covenants set forth in Article IV attached hereto if any portion of
the Project Funds is derived from proceeds of Bonds.
(b) Disclosure of Financial Information, Operating Data and Other Information. The Recipient
covenants to furnish certain financial and operating data pertaining to the Recipient that may be
required to either: (i) enable the State Water Board to secure an Indenture in connection with this
Agreement and issue any Bonds; or (ii) enable any underwriter to comply with Rule 15c2- 12(b)(5)
of the Securities and Exchange Commission. The Recipient further covenants to provide the
State Water Board with copies of all continuing disclosure reports concerning the Recipient
required by the terms of any financing other than this Agreement, including reports required to be
filed in order to comply with Rule 10b -5, and to send such reports to the State Water Board at the
same time such reports are sent to any dissemination agent, trustee, nationally recognized
municipal securities information repository or other person. The foregoing covenant shall apply to
a Recipient only if any portion of the Project Funds is derived from proceeds of Bonds.
5.2 Assignability.
The Recipient agrees and consents to any pledge, sale or assignment to the Bank or a trustee for the
benefit of the owners of the Bonds, if any, at any time of any portion of the State Water Board's
estate, right, title and interest and claim in, to and under this Agreement and the right to make all
related waivers and agreements in the name and on behalf of the State Water Board, as agent and
attorney -in -fact, and to perform all other related acts which are necessary and appropriate under this
Agreement, if any, and the State Water Board's estate, right, title and interest and claim in, to and
under this Agreement to Installment Payments (but excluding the State Water Board's rights to
Additional Payments and to notices, opinions and indemnification under each Obligation). This
Agreement is not assignable by the Recipient, either in whole or in part, without the consent of the
State in the form of a formal written amendment.
5.3 State Reviews and Indemnification.
The parties agree that review or approval of Project plans and specifications by the State Water
Board is for administrative purposes only and does not relieve the Recipient of its responsibility to
properly plan, design, construct, operate, and maintain the Project. To the extent permitted by law,
the Recipient agrees to indemnify, defend and hold harmless the State Water Board, the Bank and
any trustee and their officers, employees and agents for the Bonds, if any (collectively, "Indemnified
Persons "), against any loss or liability arising out of any claim or action brought against any
Indemnified Persons from and against any and all losses, claims, damages, liabilities or expenses, of
every conceivable kind, character and nature whatsoever arising out of, resulting from, or in any way
connected with (1) the System or the Project or the conditions, occupancy, use, possession, conduct
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or management of, work done in or about, or the planning, design, acquisition, installation or
construction, of the System or the Project or any part thereof; (2) the carrying out of any of the
transactions contemplated by this Agreement or any related document; (3) any violation of any
applicable law, rule or regulation, any environmental law (including, without limitation, the Federal
Comprehensive Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act, the California Hazardous Substance Account Act, the Federal
Water Pollution Control Act, the Clean Air Act, the California Hazardous Waste Control Law and
California Water Code Section 13304, and any successors to said laws), rule or regulation or the
release of any toxic substance on or near the System; or (4) any untrue statement or alleged untrue
statement of any material fact or omission or alleged omission to state a material fact necessary to
make the statements required to be stated therein, in Tight of the circumstances under which they
were made, not misleading with respect to any information provided by the Recipient for use in any
disclosure document utilized in connection with any of the transactions contemplated by this
Agreement. To the fullest extent permitted by law, the Recipient agrees to pay and discharge any
judgment or award entered or made against Indemnified Persons with respect to any such claim or
action, and any settlement, compromise or other voluntary resolution. The provisions of this section
shall survive the discharge of the Recipient's Obligation hereunder.
5.4 Termination; Immediate Repayment; Interest.
(a) This Agreement may be terminated by written notice during construction of the Project, or
thereafter at any time prior to complete repayment by the Recipient, at the option of the State
Water Board, upon violation by the Recipient of any material provision of this Agreement after
such violation has been called to the attention of the Recipient and after failure of the Recipient
to bring itself into compliance with the provisions of this Agreement within a reasonable time as
established by the Division.
(b) In the event of such termination, the Recipient agrees, upon demand, to immediately repay to the
State Water Board an amount equal to Installment Payments due hereunder, including accrued
interest, and all penalty assessments due. In the event of termination, interest shall accrue on all
amounts due at the highest legal rate of interest from the date that notice of termination is mailed
to the Recipient to the date of full repayment by the Recipient.
(c) Where the Recipient is a private entity that has been determined to have violated an applicable
prohibition in the Prohibition Statement below or has an employee who is determined by USEPA
to have violated an applicable prohibition in the Prohibition Statement below that is either
associated with performance under this aware or imputed to the Recipient using the standards
and due process for imputing the conduct of an individual to an organization pursuant to 2 CFR
part 180, the Recipient acknowledges and agrees that this Obligation may become immediately
due and payable and that penalties up to $175 million may be due by the Recipient to the State
Water Board, in addition to any other criminal or civil penalties that may become due. The
Recipient, its employees, its contractors, and any subrecipients or subcontractors may not
engage in trafficking in persons, procure a commercial sex act, or use forced labor.
5.5 Income Restrictions.
•
The Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest
thereon) accruing to or received by the Recipient under this Agreement shall be paid by the Recipient
to the State, to the extent that they are properly allocable to costs for which the Recipient has been
reimbursed by the State under this Agreement.
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5.6 Prevailing Wages.
The Recipient agrees to be bound by all the provisions of State Labor Code Section 1771 regarding
prevailing wages. The Recipient shall monitor all agreements subject to reimbursement from this
Agreement to assure that the prevailing wage provisions of State Labor Code Section 1771 are being
met.
5.7 Timeliness.
Time is of the essence in this Agreement.
5.8 Governing Law.
This contract is governed by and shall be interpreted in accordance with the laws of the State of
California.
5.9 Amendment.
No amendment or variation of the terms of this Agreement shall be valid unless made in writing,
signed by the parties and approved as required. No oral understanding or agreement not
incorporated in this Agreement is binding on any of the parties.
5.10 Bonding.
Where contractors are used, the Recipient shall not authorize construction to begin until each
contractor has furnished a performance bond in favor of the Recipient in the following amounts:
faithful performance (100 %) of contract value; labor and materials (100 %) of contract value. This
requirement shall not apply to any contract for less than $20,000.00.
5.11 Compliance with Law, Regulations, etc.
(a) The Recipient agrees that it will, at all times, comply with and require its contractors and
subcontractors to comply with all applicable federal and state laws, rules, guidelines, regulations,
and requirements. Without limitation of the foregoing, the Recipient agrees that, to the extent
applicable, the Recipient will:
(1) Comply with the provisions of the adopted environmental mitigation plan for the term of this
Agreement;
(2) Comply with the State Water Board's "Policy for Implementing the State Revolving Fund for
Construction of Wastewater Treatment Facilities ", as amended from time to time;
(3) Comply with and require its contractors and subcontractors on the Project to comply with
federal DBE requirements; and
(4) Comply with and require its contractors and subcontractors to comply with the list of federal
laws certified to by the Recipient.
•
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5.12 Conflict of Interest.
The Recipient certifies that it is in compliance with applicable state and/or federal conflict of interest
laws.
5.13 Damages for Breach Affecting Tax Exempt Status or Federal Compliance.
(a) In the event that any breach of any of the provisions of this Agreement by the Recipient shall
result in the loss of tax exempt status for any state bonds, or if such breach shall result in an
obligation on the part of the State to reimburse the federal government by reason of any
arbitrage profits, the Recipient shall immediately reimburse the state in an amount equal to any
damages paid by or loss incurred by the state due to such breach.
(b) In the event that any breach of any of the provisions of this Agreement by the Recipient shall
result in the failure of Project Funds to be used pursuant to the provisions of this Agreement, or
if such breach shall result in an obligation on the part of the State to reimburse the federal
government, the Recipient shall immediately reimburse the State in an amount equal to any
damages paid by or loss incurred by the State due to such breach.
5.14 Disputes.
(a) Any dispute arising under this Agreement which is not otherwise disposed of by agreement shall
be decided by the Division Deputy Director, or his or her authorized representative. The decision
shall be reduced to writing and a copy thereof furnished to the Recipient and to the State Water
Board's Executive Director. The decision of the Division shall be final and conclusive unless,
within thirty (30) calendar days after mailing of the Division decision to the Recipient, the
Recipient mails or otherwise furnishes a written appeal of the decision to the State Water
Board's Executive Director. The decision of the State Water Board's Executive Director shall be
final and conclusive unless determined by a court of competent jurisdiction to have been
fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith,
or not supported by substantial evidence. In connection with any appeal under this clause, the
Recipient shall be afforded an opportunity to be heard and to offer evidence in support of its
appeal. Pending final decision of a dispute hereunder, the Recipient shall continue to fulfill and
comply with all the terms, provisions, commitments, and requirements of this Agreement.
(b) This clause does not preclude consideration of legal questions, provided that nothing herein
shall be construed to make final the decision of the State Water Board, or any official or
representative thereof, on any question of law.
(c) Recipient shall continue with the responsibilities under this Agreement during any dispute.
5.15 Independent Actor.
The Recipient, and its agents and employees, if any, in the performance of this Agreement, shall
act in an independent capacity and not as officers, employees or agents of the State Water Board.
5.16 Non - Discrimination Clause.
(a) During the performance of this Agreement, Recipient and its contractors and subcontractors
shall not unlawfully discriminate, harass, or allow harassment against any employee or
applicant for employment because of sex, race, color, ancestry, religious creed, national
origin, sexual orientation, physical disability (including HIV and AIDS), mental disability,
medical condition (cancer), age (over 40), marital status, and denial of family care leave.
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(b) The Recipient, its contractors, and subcontractors shall insure that the evaluation and
treatment of their employees and applicants for employment are free from such
discrimination and harassment.
(c) The Recipient, its contractors, and subcontractors shall comply with the provisions of the Fair
Employment and Housing Act (Gov. Code §12990 (a -f) et seq.) and the applicable
regulations promulgated thereunder (California Code of Regulations, Title 2, Section 7285 et
seq.). The applicable regulations of the Fair Employment and Housing Commission
implementing Government Code Section 12990 (a -f), set forth in Chapter 5 of Division 4 of
Title 2 of the California Code of Regulations, are incorporated into this Agreement by
reference and made a part hereof as if set forth in full.
(d) The Recipient, its contractors, and subcontractors shall give written notice of their obligations
under this clause to labor organizations with which they have a collective bargaining or other
Agreement.
(e) The Recipient shall include the nondiscrimination and compliance provisions of this clause in
all subcontracts to perform work under the Agreement.
5.17 No Third Party Rights.
The parties to this Agreement do not create rights in, or grant remedies to, any third party as a
beneficiary of this Agreement, or of any duty, covenant, obligation or undertaking established
herein.
5.18 Operation and Maintenance; Insurance.
The Recipient agrees to properly staff, operate and maintain all portions of the Project during its
useful life in accordance with all applicable state and federal laws, rules and regulations.
The Recipient will procure and maintain or cause to be maintained insurance on the System with
responsible insurers, or as part of a reasonable system of self- insurance, in such amounts and
against such risks (including damage to or destruction of the System) as are usually covered in
connection with systems similar to the System. Such insurance may be maintained by the
maintenance of a self- insurance plan so long as any such plan provides for (i) the establishment
by the Recipient of a separate segregated self- insurance fund funded in an amount determined
(initially and on at least an annual basis) by an independent insurance consultant experienced in
the field of risk management employing accepted actuarial techniques and (ii) the establishment
and maintenance of a claims processing and risk management program.
In the event of any damage to or destruction of the System caused by the perils covered by such
insurance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement
of the damaged or destroyed portion of the System. The Recipient shall begin such
reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such net
proceeds all costs and expenses in connection with such reconstruction, repair or replacement so
that the same shall be completed and the System shall be free and clear of all claims and liens. If
such net proceeds are insufficient to enable the Recipient to pay all remaining unpaid principal
portions of the Installment Payments, the Recipient shall provide additional funds to restore or
replace the damaged portions of the System.
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5.19 Permits, Subcontracting, Remedies and Debarment.
The Recipient shall procure all permits and licenses necessary to accomplish the work
contemplated in this Agreement, pay all charges and fees, and give all notices necessary and
incidental to the due and lawful prosecution of the work. Signed copies of any such permits or
licenses shall be submitted to the Division before construction begins.
Any subcontractors, outside associates, or consultants required by the Recipient in connection
with the services covered by this Agreement shall be limited to such individuals or firms as were
specifically identified and agreed to during negotiations for this Agreement, or as are specifically
authorized by the State Water Board's Project Representative during the performance of this
Agreement. Any substitutions in, or additions to, such subcontractors, associates, or consultants,
shall be subject to the prior written approval of the State Water Board's Project Representative.
The Recipient shall not subcontract with any party who is debarred or suspended or otherwise
excluded from or ineligible for participation in federal assistance programs under Executive Order
12549, "Debarment and Suspension". The Recipient shall not subcontract with any individual or
organization on USEPA's List of Violating Facilities. (40 CFR, Part 31.35, Gov. Code 4477)
The Recipient certifies to the best of its knowledge and belief, that it and its principals:
(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded by any federal department or agency;
(b) Have not within a three (3) year period preceding this Agreement been convicted of or had a
civil judgment rendered against them for commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain, or performing a public (federal, state or local)
transaction or contract under a public transaction; violation of federal or state antitrust statutes
or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records,
making false statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity
(federal, state or local) with commission of any of the offenses enumerated in paragraph (b) of
this certification; and
(d) Have not within a three (3) year period preceding this application /proposal had one or more
• public transactions (federal, state or local) terminated for cause or default.
5.20 Recipient's Responsibility for Work.
The Recipient shall be responsible for all work and for persons or entities engaged in work
performed pursuant to this Agreement, including, but not limited to, contractors, subcontractors,
suppliers, and providers of services. The Recipient shall be responsible for any and all disputes
arising out of its contracts for work on the Project. The State Water Board will not mediate
disputes between the Recipient and any other entity concerning responsibility for performance of
•
work.
5.21 Related Litigation.
Under no circumstances may a Recipient use funds from any disbursement under this Agreement
to pay costs associated with any litigation the Recipient pursues against the State Water Board or
any Regional Water Board. Regardless of the outcome of any such litigation, and notwithstanding
any conflicting language in this Agreement, the Recipient agrees to complete the Project funded
by this Agreement or to repay all of the disbursed funds plus interest.
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•
5.22 Rights in Data.
The Recipient agrees that all data, plans, drawings, specifications, reports, computer programs,
operating manuals, notes, and other written or graphic work produced in the performance of this
Agreement are subject to the rights of the State as set forth in this section. The State shall have
the right to reproduce, publish, and use all such work, or any part thereof, in any manner and for
any purposes whatsoever and to authorize others to do so. If any such work is copyrightable, the
Recipient may copyright the same, except that, as to any work which is copyrighted by the
Recipient, the State reserves a royalty -free, nonexclusive, and irrevocable license to reproduce,
publish, and use such work, or any part thereof, and to authorize others to do so, and to receive
electronic copies from the Recipient upon request. (40 CFR 31.34, 31.36)
5.23 State Water Board Action; Costs and Attorney Fees.
The Recipient agrees that any remedy provided in this Agreement is in addition to and not in
derogation of any other legal or equitable remedy available to the State Water Board as a result of
breach of this Agreement by the Recipient, whether such breach occurs before or after completion
of the Project, and exercise of any remedy provided by this Agreement by the State Water Board
shall not preclude the State Water Board from pursuing any legal remedy or right which would
otherwise be available. In the event of litigation between the parties hereto arising from this
Agreement, it is agreed that each party shall bear its own filing costs and attorney fees.
5.24 Unenforceable Provision.
In the event that any provision of this Agreement is unenforceable or held to be unenforceable,
then the parties agree that all other provisions of this Agreement have force and effect and shall
not be affected thereby.
5.25 Useful Life.
The economic useful life of the Project, commencing at Project Completion, is at least equal to the
term of this Agreement, as set forth in Exhibit B hereto.
5.26 Venue.
The State Water Board and the Recipient hereby agree that any action arising out of this
Agreement shall be filed and maintained in the Superior Court in and for the County of
Sacramento, California.
5.27 Waiver and Rights of the State Water Board.
Any waiver of rights by the State Water Board with respect to a default or other matter arising
under the Agreement at any time shall not be considered a waiver of rights with respect to any
other default or matter.
Any rights and remedies of the State Water Board provided for in this Agreement are in addition to
any other rights and remedies provided by law.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
CITY SEAL BEACH:
By:
Name: Jill R. Ingram
Title: Acting City Manager
Date:
STATE WATER RESOURCES CONTROL BOARD:
By:
Name: James B. Maughan
Title: Acting Deputy Director
Division of Financial Assistance
Date:
•
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City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT A — SCOPE OF WORK & INCORPORATED DOCUMENTS
1. The Recipient agrees to start construction no later than April 16, 2012.
2. Completion of Construction date is hereby established as September 21, 2012.
3. The Project Completion date is hereby established as September 21, 2012.
4. The Recipient agrees to ensure that its final Request for Disbursement is received by the Division
no later than March 21, 2013, unless prior approval has been granted by the Division. If the
Recipient fails to do so, then the undisbursed balance of this Agreement will be deobligated.
5. The Project, commonly known as South Seal Beach Sewer Pipeline Rehabilitation Phase 2
Project generally consists of sewer pipe replacement for increased capacity and relining of
pipelines where feasible, as more particularly described in the financial assistance application of
the Recipient and the accepted plans and specifications for the Project, if any.
6. Incorporated by reference into this Agreement are the following documents:
(a) the Facilities Plan Approval Letter of April 4, 2011;
(b) the Preliminary Funding Commitment of April 6, 2011;
(c) the Final Plans & Specification, which are the basis for the construction Contract to be
awarded by the Recipient (Agreement will be amendment to incorporate such document);
(d) the Waste Discharge Requirement Order No. R8- 2003 -0061 and National Pollution
Discharge Elimination System Permit No. CAG998001; and
(e) the Recipient's Reimbursement Resolution No. 5386 dated October 24, 2005.
These documents shall be binding on the Recipient, except where specifically superseded by the
terms of this Agreement.
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City of Seal Beach
Agreement No.: 10 -842 -550
Project No.: C -06- 5310 -120
EXHIBIT B — PROJECT FINANCING AMOUNT
1. Estimated Reasonable Cost. The estimated reasonable cost of the total Project, including associated
planning and design costs, is one million, one hundred thousand dollars and no cents
($1,100,000.00).
2. Project Funding. Subject to the terms of this Agreement, the State Water Board agrees to provide
Project Funds in the amount of one million, one hundred thousand dollars and no cents
($1,100,000.00).
3. Repayment and Interest Rate. The Recipient agrees to repay all Project Funds according to the
schedule in Exhibit C at an interest rate of two and six tenths percent per annum and an
Administrative Service Charge of zero percent (0 %) per annum.
4. The term of this agreement is from April 6, 2011 to September 21, 2032.
5. Budget costs are contained in the Project Cost Table, which is part of the Eligibility Determination
Approval in Exhibit A.1. (This Agreement will be amended to incorporate such document.)
6. Preliminary budget costs are as follows:
Allowances (soft costs): Planning $ 20,000
Design $100.000
Total $120,000
Construction costs and disbursements are not available until after this Agreement has been amended
to incorporate the Approval of Award/Eligibility Determination Approval.
Any construction expenses incurred by the Recipient prior to such amendment of this Agreement are at
the Recipient's risk. Failure to begin construction according to the timelines set forth in Exhibit A will
require the Recipient to repay to the State Water Board all disbursed Project Funds, including
Allowances.
•
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City of Seal Beach
Agreement No.: 10 -842 -550
Project No.: C -06- 5310 -120
EXHIBIT C - CWSRF PAYMENT SCHEDULE
See the attached preliminary CWSRF Payment Schedule dated June 3, 2011. The final CWSRF Payment
Schedule will be forwarded to the Recipient after all disbursements have been paid and construction of the
• Project has been completed.
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City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT D — SPECIAL CONDITIONS
SPECIAL ENVIRONMENTAL CONDITIONS AS FOLLOWS:
• Compliance with the National Historic Preservation Act
The Recipient shall provide qualified archaeological and Native American monitors for all Project
excavations. Any identified archaeological deposits shall be immediately reported to the State Water
Board Cultural Resources Officer (CRO). The Recipient shall consult with the CRO on any additional
evaluation and treatment procedures, which will require prior approval by the CRO before these
procedures are initiated by the Recipient.
• Compliance with the Migratory Bird Treaty Act
The Recipient identified mitigation measures in its Initial Study /Mitigated Negative Declaration (SCH
No. 2009011049) to avoid impacts on migratory birds. The Recipient shall abide by the measures as
follows:
1. All vegetation removal and/or thinning activities shall be scheduled from August 1 to February 14,
if feasible, to ensure that no active nests will be disturbed; or
2. The Recipient shall ensure that a qualified wildlife biologist conduct pre- construction surveys for
nesting birds if Project construction is to occur during the nesting season (February 15 through
July 31). The Recipient shall ensure that a qualified wildlife biologist conduct a pre - construction
raptor survey no more than 30 days prior to initiation of grading to confirm the presence or
absence of active nests in the vicinity (at least 300 feet around the Project site). If active nests
are encountered, the Recipient shall ensure that species- specific measures be prepared by a
qualified wildlife biologist and implemented to prevent abandonment of the active nests. At a
minimum, grading in the vicinity of the nests shall be deferred until the young birds have fledged.
A minimum exclusion buffer of 25 feet shall be required for songbird nests, and 200 to 500 feet for
raptor nests, depending on the species and location. The Recipient shall ensure that the
perimeter of the nest - setback zone be fenced or adequately demarcated with staked flagging at
20 -foot intervals, and construction personnel be restricted from the area. The Recipient shall
ensure that a survey report prepared by the qualified wildlife biologist verifying that the young have
fledged be submitted to the Recipient and the State Water Board prior to initiation of grading in the
nest - setback zone.
SPECIAL FINANCIAL CONDITIONS AS FOLLOWS:
• The Recipient shall covenant to establish rates and charges in amounts sufficient to generate net
revenues equal to 1.25 times the total annual debt service; and
• The Recipient shall establish a Reserve Fund equal to one year's debt service from available cash at
the time of the agreement execution.
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City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT E — [Reserved]
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City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT F — SCHEDULE OF SYSTEM OBLIGATIONS
Except for the following and the Obligation evidenced by this Agreement, the Recipient certifies that it has
no outstanding System Obligations:
The following outstanding debt is senior to the Obligation:
Title Interest Total Amount Amount Remaining End Date
Rate
Not Applicable
The following outstanding debt is on parity with the Obligation:
Title Interest Total Amount Amount Remaining End Date
Rate
Certifications of 5.0% - $4,230,000 $3,730,000 6/1/2030
Participation, 5.625%
2000 Sewer System
The following outstanding debt is subordinate to the Obligation:
Title Interest Total Amount Amount Remaining End Date
Rate
Not Applicable
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City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT G — DAVIS BACON REQUIREMENTS
1. Applicability of the Davis- Bacon (DB) Prevailing Wage Requirements.
Davis -Bacon prevailing wage requirements apply to the construction, alteration, and repair activity
of infrastructure, including all construction, alteration and repair activity involving waste water or
drinking water treatment plants is subject to DB. If the Recipient encounters a unique situation at
a site that presents uncertainties regarding DB applicability, the Recipient must discuss the
situation with the State Water Board before authorizing work on that site.
2. Obtaining Wage Determinations.
(a) The Recipient shall obtain the wage determination for the locality in which a covered activity
subject to DB will take place prior to issuing requests for bids, proposals, quotes or other
methods for soliciting contracts (solicitation) for activities subject to DB. These wage
determinations shall be incorporated into solicitations and any subsequent contracts. Prime
contracts must contain a provision requiring that subcontractors follow the wage determination
incorporated into the prime contract.
(i) While the solicitation remains open, the Recipient shall monitor www.wdol.aov on a
weekly basis to ensure that the wage determination contained in the solicitation remains
current. The Recipient shall amend the solicitation if DOL issues a modification more
than 10 days prior to the closing date (i.e. bid opening) for the solicitation. If DOL
modifies or supersedes the applicable wage determination less than 10 days prior to the
closing date, the Recipient may request a finding from the State Water Board that there
is not a reasonable time to notify interested contractors of the modification of the wage
determination. The State Water Board will provide a report of its findings to the
Recipient.
(ii) If the Recipient does not award the contract within 90 days of the closure of the
solicitation, any modifications or supersedes DOL makes to the wage determination
contained in the solicitation shall be effective unless the State Water Board, at the request
of the Recipient, obtains an extension of the 90 day period from DOL pursuant to 29 CFR
1.6(c)(3)(iv). The Recipient shall monitor www.wdol.gov on a weekly basis if it does not
award the contract within 90 days of closure of the solicitation to ensure that wage
determinations contained in the solicitation remain current.
(b) If the Recipient carries out activity subject to DB by issuing a task order, work assignment or
similar instrument to an existing contractor (ordering instrument) rather than by publishing a
solicitation, the Recipient shall insert the appropriate DOL wage determination from
www.wdol.gov into the ordering instrument.
(c) The Recipient shall review all subcontracts subject to DB entered into by prime contractors to
verify that the prime contractor has required its subcontractors to include the applicable wage
determinations.
(d) As provided in 29 CFR 1.6(f), DOL may issue a revised wage determination applicable to a
Recipient's contract after the award of a contract or the issuance of an ordering instrument if
DOL determines that the Recipient has failed to incorporate a wage determination or has
used a wage determination that clearly does not apply to the contract or ordering instrument.
If this occurs, the Recipient shall either terminate the contract or ordering instrument and
issue a revised solicitation or ordering instrument or incorporate DOL's wage determination
retroactive to the beginning of the contract or ordering instrument by change order. The
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City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT G — DAVIS BACON REQUIREMENTS
Recipient's contractor must be compensated for any increases in wages resulting from the
use of DOL's revised wage determination.
3. Contract and Subcontract Provisions.
(a) The Recipient shall insert in full in any contract in excess of $2,000 which is entered into for
the actual construction, alteration and/or repair, including painting and decorating, of a public
building or public work, or building or work financed in whole or in part from Federal funds or
in accordance with guarantees of a Federal agency or financed from funds obtained by pledge
of any contract of a Federal agency to make a loan, grant or annual contribution (except
where a different meaning is expressly indicated), and which is subject to the labor standards
provisions of any of the acts listed in § 5.1, the following clauses:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work will be
paid unconditionally and not less often than once a week, and without subsequent
deduction or rebate on any account (except such payroll deductions as are
permitted by regulations issued by the Secretary of Labor under the Copeland Act
(29 CFR part 3) ), the full amount of wages and bona fide fringe benefits (or cash
equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached
hereto and made a part hereof, regardless of any contractual relationship which
may be alleged to exist between the contractor and such laborers and mechanics.
Contributions made or costs reasonably anticipated for bona fide fringe benefits
under section 1(b)(2) of the Davis -Bacon Act on behalf of laborers or mechanics
are considered wages paid to such laborers or mechanics, subject to the
provisions of paragraph (a)(1)(iv) of this section; also, regular contributions made
or costs incurred for more than a weekly period (but not less often than quarterly)
under plans, funds, or programs which cover the particular weekly period, are
deemed to be constructively made or incurred during such weekly period. Such
laborers and mechanics shall be paid the appropriate wage rate and fringe
benefits on the wage determination for the classification of work actually
performed, without regard to skill, except as provided in § 5.5(a)(4). Laborers or
mechanics performing work in more than one classification may be compensated
at the rate specified for each classification for the time actually worked therein:
Provided, that the employer's payroll records accurately set forth the time spent in
each classification in which work is performed. The wage determination (including
any additional classification and wage rates conformed under paragraph (a)(1)(ii)
of this section) and the Davis -Bacon poster (W H -1321) shall be posted at all times
by the contractor and its subcontractors at the site of the work in a prominent and
accessible place where it can be easily seen by the workers.
The Recipient may obtain wage determinations from the U.S. Department of
Labor's web site, www.wdol.gov.
(ii)(A) The Recipient, on behalf of EPA, shall require that any class of laborers or
mechanics, including helpers, which is not listed in the wage determination and
which is to be employed under the contract shall be classified in conformance with
the wage determination. The EPA award official shall approve an additional
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Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT G — DAVIS BACON REQUIREMENTS
classification and wage rate and fringe benefits therefore only when the following
criteria have been met:
(1) The work to be performed by the classification requested is not performed by
a classification in the wage determination; and
(2) The classification is utilized in the area by the construction industry; and
(3) The proposed wage rate, including any bona fide fringe benefits, bears a
reasonable relationship to the wage rates contained in the wage
determination.
(B) If the contractor and the laborers and mechanics to be employed in the
classification (if known), or their representatives, and the Recipient agree on the
classification and wage rate (including the amount designated for fringe benefits
where appropriate), a report of the action taken shall be sent by the Recipient to
the State Water Board. The State Water Board will transmit the report, to the
Administrator of the Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, Washington, DC 20210. The
Administrator, or an authorized representative, will approve, modify, or disapprove
every additional classification action within 30 days of receipt and so advise the
State Water Board or will notify the State Water Board within the 30 -day period
that additional time is necessary.
(C) In the event the contractor, the laborers or mechanics to be employed in the
classification or their representatives, and the Recipient do not agree on the
proposed classification and wage rate (including the amount designated for fringe
benefits, where appropriate), USEPA will refer the questions, including the views
of all interested parties and the recommendation of the State Water Board, to the
Administrator for determination. The Administrator, or an authorized
representative, will issue a determination within 30 days of receipt and so advise
the contracting officer or will notify the contracting officer within the 30 -day period
that additional time is necessary.
(D) The wage rate (including fringe benefits where appropriate) determined pursuant
to paragraphs (a)(1)(ii)(B) or (C) of this section, shall be paid to all workers
performing work in the classification under this contract from the first day on
which work is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of
laborers or mechanics includes. a fringe benefit which is not expressed as an
hourly rate, the contractor shall either pay the benefit as stated in the wage
determination or shall pay another bona fide fringe benefit or an hourly cash
equivalent thereof.
(iv) If the contractor does not make payments to a trustee or other third person, the
contractor may consider as part of the wages of any laborer or mechanic the
amount of any costs reasonably anticipated in providing bona fide fringe benefits
under a plan or program, provided, that the Secretary of Labor has found, upon
the written request of the contractor, that the applicable standards of the Davis -
Bacon Act have been met. The Secretary of Labor may require the contractor to
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City of Seal Beach
Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT G — DAVIS BACON REQUIREMENTS
set aside in a separate account assets for the meeting of obligations under the
plan or program.
(2) Withholding.
The Recipient, shall upon written request of the EPA Award Official or an authorized
representative of the Department of Labor, withhold or cause to be withheld from the
contractor under this contract or any other Federal contract with the same prime
contractor, or any other federally- assisted contract subject to Davis -Bacon prevailing
wage requirements, which is held by the same prime contractor, so much of the accrued
payments or advances as may be considered necessary to pay laborers and mechanics,
including apprentices, trainees, and helpers, employed by the contractor or any
subcontractor the full amount of wages required by the contract. In the event of failure to
pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or
working on the site of the work, all or part of the wages required by the contract, the
(Agency) may, after written notice to the contractor, sponsor, applicant, or owner, take
such action as may be necessary to cause the suspension of any further payment,
advance, or guarantee of funds until such violations have ceased.
(3) Payrolls and basic records.
(i) Payrolls and basic records relating thereto shall be maintained by the contractor
during the course of the work and preserved for a period of three years thereafter
for all laborers and mechanics working at the site of the work. Such records shall
contain the name, address, and social security number of each such worker, his
or her correct classification, hourly rates of wages paid (including rates of
contributions or costs anticipated for bona fide fringe benefits or cash equivalents
thereof of the types described in section 1(b)(2)(B) of the Davis -Bacon Act), daily
and weekly number of hours worked, deductions made and actual wages paid.
Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the
wages of any laborer or mechanic include the amount of any costs reasonably
anticipated in providing benefits under a plan or program described in section
1(b)(2)(B) of the Davis -Bacon Act, the contractor shall maintain records which
show that the commitment to provide such benefits is enforceable, that the plan
or program is financially responsible, and that the plan or program has been
communicated in writing to the laborers or mechanics affected, and records
which show the costs anticipated or the actual cost incurred in providing such
benefits. Contractors employing apprentices or trainees under approved
programs shall maintain written evidence of the registration of apprenticeship
programs and certification of trainee programs, the registration of the apprentices
and trainees, and the ratios and wage rates prescribed in the applicable •
programs.
(ii)(A) The contractor shall submit weekly, for each week in which any contract work is
performed, a copy of all payrolls to the Recipient, that is, the entity that receives
the sub -grant or loan from the State capitalization grant recipient. Such
documentation shall be available on request of the State Water Board or EPA. As
to each payroll copy received, the Recipient shall provide written confirmation in
a form satisfactory to the State indicating whether or not the project is in
compliance with the requirements of 29 CFR 5.5(a)(1) based on the most recent
payroll copies for the specified week. The payrolls shall set out accurately and
completely all of the information required to be maintained under 29 CFR
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City of Seal Beach
Agreement No.: 10- 842 -550
• Project No.: C -06- 5310 -120
EXHIBIT G — DAVIS BACON REQUIREMENTS
5.5(a)(3)(i), except that full social security numbers and home addresses shall not
be included on the weekly payrolls. Instead the payrolls shall only need to include
an individually identifying number for each employee (e.g., the last four digits of
•
the employee's social security number). The required weekly payroll information
may be submitted in any form desired. Optional Form WH -347 is available for this
purpose from the Wage and Hour Division Web site at
httpJ/ www. dol. gov /esa/whd/forms /wh347instr.htm or its successor site. The prime
contractor is responsible for the submission of copies of payrolls by all
subcontractors. Contractors and subcontractors shall maintain the full social
security number and current address of each covered worker, and shall provide
them upon request to the Recipient for transmission to the State or EPA if
requested by EPA , the State, the contractor, or the Wage and Hour Division of
the Department of Labor for purposes of an investigation or audit of compliance
with prevailing wage requirements. It is not a violation of this section for a prime
contractor to require a subcontractor to provide addresses and social security
numbers to the prime contractor for its own records, without weekly submission to
the Recipient.
(B) Each payroll submitted shall be accompanied by a "Statement of Compliance,"
signed by the contractor or subcontractor or his or her agent who pays or
supervises the payment of the persons employed under the contract and shall
certify the following:
(1) That the payroll for the payroll period contains the information required to be
provided under § 5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate
information is being maintained under § 5.5 (a)(3)(i) of Regulations, 29 CFR
part 5, and that such information is correct and complete;
(2) That each laborer or mechanic (including each helper, apprentice, and
trainee) employed on the contract during the payroll period has been paid the
full weekly wages earned, without rebate, either directly or indirectly, and that
no deductions have been made either directly or indirectly from the full wages
earned, other than permissible deductions as set forth in Regulations, 29
CFR part 3;
(3) That each laborer or mechanic has been paid not Tess than the applicable
wage rates and fringe benefits or cash equivalents for the classification of
work performed, as specified in the applicable wage determination
incorporated into the contract.
(C) The weekly submission of a properly executed certification set forth on the
reverse side of Optional Form WH-347 shall satisfy the requirement for
submission of the "Statement of Compliance" required by paragraph (a)(3)(ii)(B)
of this section.
(D) The falsification of any of the above certifications may subject the contractor or
subcontractor to civil or criminal prosecution under section 1001 of title 18 and
section 231 of title 31 of the United States Code.
(iii) The contractor or subcontractor shall make the records required under
paragraph (a)(3)(i) of this section available for inspection, copying, or transcription
by authorized representatives of the State, EPA or the Department of Labor, and
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Agreement No.: 10- 842 -550
Project No.: C -06- 5310 -120
EXHIBIT G — DAVIS BACON REQUIREMENTS
shall permit such representatives to interview employees during working hours on
the job. If the contractor or subcontractor fails to submit the required records or to
make them available, the Federal agency or State may, after written notice to the
contractor, sponsor, applicant, or owner, take such action as may be necessary
to cause the suspension of any further payment, advance, or guarantee of funds.
Furthermore, failure to submit the required records upon request or to make such
records available may be grounds for debarment action pursuant to 29 CFR 5.12.
(4) Apprentices and Trainees
(i) Apprentices. Apprentices will be permitted to work at Tess than the predetermined
rate for the work they performed when they are employed pursuant to and
individually registered in a bona fide apprenticeship program registered with the
U.S. Department of Labor, Employment and Training Administration, Office of
Apprenticeship Training, Employer and Labor Services, or with a State
Apprenticeship Agency recognized by the Office, or if a person is employed in his
or her first 90 days of probationary employment as an apprentice in such an
apprenticeship program, who is not individually registered in the program, but who
has been certified by the Office of Apprenticeship Training, Employer and Labor
Services or a State Apprenticeship Agency (where appropriate) to be eligible for
probationary employment as an apprentice. The allowable ratio of apprentices to
journeymen on the job site in any craft classification shall not be greater than the
ratio permitted to the contractor as to the entire work force under the registered
program. Any worker listed on a payroll at an apprentice wage rate, who is not
registered or otherwise employed as stated above, shall be paid not less than the
applicable wage rate on the wage determination for the classification of work
actually performed. In addition, any apprentice performing work on the job site in
excess of the ratio permitted under the registered program shall be paid not Tess
than the applicable wage rate on the wage determination for the work actually
performed. Where a contractor is performing construction on a project in a locality
other than that in which its program is registered, the ratios and wage rates
(expressed in percentages of the journeyman's hourly rate) specified in the
contractors or subcontractor's registered program shall be observed. Every
apprentice must be paid at not Tess than the rate specified in the registered
program for the apprentice's level of progress, expressed as a percentage of the
journeymen hourly rate specified in the applicable wage determination.
Apprentices shall be paid fringe benefits in accordance with the provisions of the
apprenticeship program. If the apprenticeship program does not specify fringe
benefits, apprentices must be paid the full amount of fringe benefits listed on the
wage determination for the applicable classification. If the Administrator
determines that a different practice prevails for the applicable apprentice
classification, fringes shall be paid in accordance with that determination. In the
event the Office of Apprenticeship Training, Employer and Labor Services, or a
State Apprenticeship Agency recognized by the Office, withdraws approval of an
apprenticeship program, the contractor will no longer be permitted to utilize
apprentices at Tess than the applicable predetermined rate for the work performed
until an acceptable program is approved.
(ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to
work at Tess than the predetermined rate for the work performed unless they are
employed pursuant to and individually registered in a program which has received
prior approval, evidenced by formal certification by the U.S. Department of Labor,
Employment and Training Administration. The ratio of trainees to journeymen on
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EXHIBIT G — DAVIS BACON REQUIREMENTS
the job site shall not be greater than permitted under the plan approved by the
Employment and Training Administration. Every trainee must be paid at not less
than the rate specified in the approved program for the trainee's level of progress,
expressed as a percentage of the journeyman hourly rate specified in the
applicable wage determination. Trainees shall be paid fringe benefits in
accordance with the provisions of the trainee program. If the trainee program
does not mention fringe benefits, trainees shall be paid the full amount of fringe
benefits listed on the wage determination unless the Administrator of the Wage
and Hour Division determines that there is an apprenticeship program associated
with the corresponding journeyman wage rate on the wage determination which
provides for Tess than full fringe benefits for apprentices. Any employee listed on
the payroll at a trainee rate who is not registered and participating in a training
plan approved by the Employment and Training Administration shall be paid not
less than the applicable wage rate on the wage determination for the
classification of work actually performed. In addition, any trainee performing work
on the job site in excess of the ratio permitted under the registered program shall
be paid not Tess than the applicable wage rate on the wage determination for the
work actually performed. In the event the Employment and Training
Administration withdraws approval of a training program, the contractor will no
longer be permitted to utilize trainees at Tess than the applicable predetermined
rate for the work performed until an acceptable program is approved.
(iii) Equal employment opportunity. The utilization of apprentices, trainees and
journeymen under this part shall be in conformity with the equal employment
opportunity requirements of Executive Order 11246, as amended, and 29 CFR
part 30.
(5) Compliance with Copeland Act Requirements.
The contractor shall comply with the requirements of 29 CFR part 3, which are
incorporated by reference in this contract.
(6) Subcontracts.
The contractor or subcontractor shall insert in any subcontracts the clauses contained in
29 CFR 5.5(a)(1) through (10) and such other clauses as the EPA determines may by
appropriate, and also a clause requiring the subcontractors to include these clauses in
any lower tier subcontracts. The prime contractor shall be responsible for the compliance
by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR
5.5.
(7) Contract Termination: Debarment.
A breach of the contract clauses in 29 CFR 5.5 may be grounds for termination of the
contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR
5.12.
(8) Compliance with Davis -Bacon and Related Act Requirements.
All rulings and interpretations of the Davis -Bacon and Related Acts contained in 29 CFR
parts 1, 3, and 5 are herein incorporated by reference in this contract.
(9) Disputes Concerning Labor Standards.
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EXHIBIT G — DAVIS BACON REQUIREMENTS
Disputes arising out of the labor standards provisions of this contract shall not be subject
to the general disputes clause of this contract. Such disputes shall be resolved in
accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5,
6, and 7. Disputes within the meaning of this clause include disputes between the
contractor (or any of its subcontractors) and the Recipient, State, EPA, the U.S.
Department of Labor, or the employees or their representatives.
(10) Certification of Eligibility.
(i) By entering into this contract, the contractor certifies that neither it (nor he or she)
nor any person or firm who has an interest in the contractor's firm is a person or
firm ineligible to be awarded Government contracts by virtue of section 3(a) of the
Davis -Bacon Act or 29 CFR 5.12(a)(1).
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for
award of a Government contract by virtue of section 3(a) of the Davis -Bacon Act
or 29 CFR 5.12(a)(1).
(iii) The penalty for making false statements is prescribed in the U.S. Criminal Code,
18 U.S.C. 1001.
4. Contract Provision for Contracts in Excess of $100,000.
(a) Contract Work Hours and Safety Standards Act.
The Recipient shall insert the following clauses set forth in paragraphs (a)(1), (2), (3), and (4)
of this section in full in any contract in an amount in excess of $100,000 and subject to the
overtime provisions of the Contract Work Hours and Safety Standards Act. These clauses
shall be inserted in addition to the clauses required by Item 3, above or 29 CFR 4_6 . As used
in this paragraph, the terms laborers and mechanics include watchmen and guards.
(1) Overtime requirements.
No contractor or subcontractor contracting for any part of the contract work which may
require or involve the employment of laborers or mechanics shall require or permit any
such laborer or mechanic in any workweek in which he or she is employed on such work
to work in excess of forty hours in such workweek unless such laborer or mechanic
receives compensation at a rate not less than one and one -half times the basic rate of
pay for all hours worked in excess of forty hours in such workweek.
(2) Violation; liability for unpaid wages; liquidated damages.
In the event of any violation of the clause set forth in paragraph (a)(1) of this section the
contractor and any subcontractor responsible therefor shall be liable for the unpaid
wages. In addition, such contractor and subcontractor shall be liable to the United States
(in the case of work done under contract for the District of Columbia or a territory, to such
District or to such territory), for liquidated damages. Such liquidated damages shall be
computed with respect to each individual laborer or mechanic, including watchmen and
guards, employed in violation of the clause set forth in paragraph (a)(1) of this section, in
the sum of $10 for each calendar day on which such individual was required or permitted
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EXHIBIT G — DAVIS BACON REQUIREMENTS
to work in excess of the standard workweek of forty hours without payment of the
overtime wages required by the clause set forth in paragraph (a)(1) of this section.
(3) Withholding for unpaid wages and liquidated damages.
The Recipient, upon written request of the EPA Award Official or an authorized
representative of the Department of Labor, shall withhold or cause to be withheld, from
any moneys payable on account of work performed by the contractor or subcontractor
under any such contract or any other Federal contract with the same prime contractor, or
any other federally- assisted contract subject to the Contract Work Hours and Safety
Standards Act, which is held by the same prime contractor, such sums as may be
determined to be necessary to satisfy any liabilities of such contractor or subcontractor for
unpaid wages and liquidated damages as provided in the clause set forth in paragraph
(a)(2) of this section.
(4) Subcontracts.
The contractor or subcontractor shall insert in any subcontracts the clauses set forth in
paragraph (a)(1) through (4) of this section and also a clause requiring the subcontractors
to include these clauses in any lower tier subcontracts. The prime contractor shall be
responsible for compliance by any subcontractor or lower tier subcontractor with the
clauses set forth in paragraphs (a)(1) through (4) of this section.
(b) In addition to the clauses contained in Item 3, above, in any contract subject only to the
Contract Work Hours and Safety Standards Act and not to any of the other statutes cited in 29
CFR 5.1, the Recipient shall insert a clause requiring that the contractor or subcontractor
shall maintain payrolls and basic payroll records during the course of the work and shall
preserve them for a period of three years from the completion of the contract for all laborers
and mechanics, including guards and watchmen, working on the contract. Such records shall
contain the name and address of each such employee, social security number, correct
classifications, hourly rates of wages paid, daily and weekly number of hours worked,
deductions made, and actual wages paid. Further, the Recipient shall insert in any such
contract a clause providing hat the records to be maintained under this paragraph shall be
made available by the contractor or subcontractor for inspection, copying, or transcription by
authorized representatives of the USEPA, State Water Board, and the Department of Labor,
and the contractor or subcontractor will permit such representatives to interview employees
during working hours on the job.
5. Compliance Verification
(a) The Recipient shall periodically interview a sufficient number of employees entitled to DB
prevailing wages (covered employees) to verify that contractors or subcontractors are paying
the appropriate wage rates. As provided in 29 CFR 5.6(a)(6), all interviews must be
conducted in confidence. The Recipient must use Standard Form 1445 or equivalent
documentation to memorialize the interviews. Copies of the SF 1445 are available from EPA
on request.
(b) The Recipient shall establish and follow an interview schedule based on its assessment of
the risks of noncompliance with DB posed by contractors or subcontractors and the duration
of the contract or subcontract. At a minimum, the Recipient must conduct interviews with a
representative group of covered employees within two weeks of each contractor or
subcontractor's submission of its initial weekly payroll data and two weeks prior to the
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EXHIBIT G — DAVIS BACON REQUIREMENTS
estimated completion date for the contract or subcontract. The Recipient must conduct more
frequent interviews if the initial interviews or other information indicates that there is a risk that
the contractor or subcontractor is not complying with DB . The Recipient shall immediately
conduct necessary interviews in response to an alleged violation of the prevailing wage
requirements. All interviews shall be conducted in confidence.
(c) The Recipient shall periodically conduct spot checks of a representative sample of weekly
payroll data to verify that contractors or subcontractors are paying the appropriate wage rates.
The Recipient shall establish and follow a spot check schedule based on its assessment of
the risks of noncompliance with DB posed by contractors or subcontractors and the duration
of the contract or subcontract. At a minimum, the Recipient must spot check payroll data
within two weeks of each contractor or subcontractor's submission of its initial payroll data
and two weeks prior to the completion date of the contract or subcontract . The Recipient
must conduct more frequent spot checks if the initial spot check or other information indicates
that there is a risk that the contractor or subcontractor is not complying with DB . In addition,
during the examinations the Recipient shall verify evidence of fringe benefit plans and
payments thereunder by contractors and subcontractors who claim credit for fringe benefit
contributions.
(d) The Recipient shall periodically review contractors and subcontractors use of apprentices
and trainees to verify registration and certification with respect to apprenticeship and training
programs approved by either the U.S Department of Labor or a state, as appropriate, and that
contractors and subcontractors are not using disproportionate numbers of, laborers, trainees
and apprentices. These reviews shall be conducted in accordance with the schedules for
spot checks and interviews described in Item 5(b) and (c) above.
(e) The Recipient must immediately report potential violations of the DB prevailing wage
requirements to the EPA DB contact listed above and to the appropriate DOL Wage and Hour
District Office listed at httq:// www. dol. qov /esa/contacts /whd /america2.htm.
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EXHIBIT H — FEDERAL CROSS - CUTTERS
The Recipient agrees to comply with the following federal laws applicable to recipients of CWSRF funding:
Environmental Authorities
1. Archeological and Historical Preservation Act of 1974, Pub. L. 86 -523, as amended, Pub. L. 93-
291 16 USC § 469a -1.
2. Clean Air Act, Pub. L. 84 -159, as amended.
3. Coastal Barrier Resources Act, Pub. L. 97 -348, 96 Stat. 1653; 16 USC § 3501 et seq.
4. Coastal Zone Management Act, Pub. L. 92 -583, as amended; 16 USC § 1451 et seq.
5. Endangered Species Act, Pub. L. 93 -205, as amended; 16 USC § 1531 et seq..
6. Environmental Justice, Executive Order 12898.
7. Floodplain Management, Executive Order, 11988 as amended by Executive Order 12148.
8. Protection of Wetlands, Executive Order 11990, as amended by Executive Order No. 12608.
9. Farmland Protection Policy Act, Pub. L. 97 -98; 7 USC § 4201 et seq.
10. Fish and Wildlife Coordination Act, Pub. L. 85 -624, as amended.
11. National Historic Preservation Act of 1966, Pub. L. 89 -665, as amended, 80 Stat. 917 (1966) 16
USC § 470 et seq.
12. Safe Drinking Water Act, Pub. L. 93 -523, as amended; 42 USC § 300f et seq.
13. Wild and Scenic Rivers Act, Pub. L. 90 -542, as amended, 82 Stat. 913; 16 USC § 1271 et seq.
14. Essential Fish Habitat Consultation. Pub. L. 94 -265, as amended, 16 USC § 1801 et seq.
15. Recycled Materials. Executive Order 13101; Section 6002 Resource Conservation and Recovery
Act — 42 USC § 6962.
Economic and Miscellaneous Authorities
1. Demonstration Cities and Metropolitan Development Act of 1966, Pub. L. 89 -754, as amended,
Executive Order 12372/ 42 USC § 3331 et seq.
2. Procurement Prohibitions under Section 306 of the Clean Air Act and Section 508 of the Clean
Water Act, including Executive Order 11738, Administration of the Clean Air Act and the Federal
Water Pollution Control Act with Respect to Federal Contracts, Grants, or Loans; 42 USC § 7606;
33 USC § 1368; 40 CFR Part 31.
3. Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91 -646, as amended; 42
USC § §4601 -4655
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EXHIBIT H — FEDERAL CROSS - CUTTERS
4. Contractors, Subcontractors, Debarment and Suspension, Executive Order 12549; 2 CFR Part
180; 2 CFR Part 1532. The Excluded Parties List System can be found at http: / /eols.aov . The
Recipient represents and warrants that it has included a term or conditions requiring compliance
with this provision in all of its contracts and subcontracts. The Recipient acknowledges that failing
to disclose the information as required at 2 CFR 180.335 may result in the termination, delay or
negation of this Agreement.
5. Preservation of Open Competition and Government Neutrality Towards Government Contractors'
Labor Relations on Federal and Federally Funded Construction Projects, EO 13202, as amended
by EO 13208.
6. Hotel and Motel Fire Safety Act of 1990 (PL 101 -391, as amended). Recipients may search
. http: / /www.usfa.dhs.Qov /applications /hotel/ .
•
7. Records and financial reporting. 40 CFR Part 31.
8. Copyright. 40 CFR Part 31.
•
Social Policy Authorities
1. Age Discrimination Act of 1975, Pub. L. 94 -135; 42 USC § 6102.
2. Race Discrimination. Title VI of the Civil Rights Act of 1964, Pub. L. 88- 382.1; 42 USC § 2000d;
40 CFR Part 7.
3. Sex Discrimination. Section 13 of the Federal Water Pollution Control Act Amendments of 1972,
Pub. L. 92 -500 (the Clean Water Act); 33 USC § 1251; 40 CFR Part 7.
4. Disability Discrimination. Section 504 of the Rehabilitation Act of 1973, Pub. L. 93 -112 (including
Executive Orders 11914 and 11250); 29 USC § 794; 40 CFR Part 7.
5. Equal Employment Opportunity, Executive Order 11246.
6. Women's and Minority Business Enterprise, Executive Orders 11625, 12138, and 12432; 40 CFR
Part 31.
7. Section 129 of the Small Business Administration Reauthorization and Amendment Act of 1988,
Pub. L. 100 -590.
8. Anti - Lobbying Provisions (40 CFR Part 34). Borrower agrees to submit certification and
disclosure forms as requested by the State Water Resources Control Board or the USEPA. In
accordance with the Byrd Anti - Lobbying Amendment, any Recipient who makes a prohibited
expenditure under 40 CFR Part 34 or fails to file the required certification or lobbying forms shall
be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such
expenditure. The Recipient shall ensure that no Project Funds provided by the State Water Board
under this assistance agreement are used to engage in lobbying of the federal government or in
litigation against the United States unless authorized under existing law. The Recipient shall
abide by its respective 2 CFR 200, 225, or 230, which prohibits the use of federal grant funds for
litigation against the United States or for lobbying or other political activities.
9. Anti- Litigation Provisions (2 CFR 220, 225, or 230).
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EXHIBIT H — FEDERAL CROSS - CUTTERS
10. Trafficking Victims Protection Act of 2000.
11. ACORN Prohibition. None of the Project Funds used in this Agreement may be used for contracts
or subcontracts to ACORN.
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