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2018-09-26 e-packet@7:00
Wednesday, September 26, 2018 7:00 PM City of South San Francisco P.O. Box 711 South San Francisco, CA Municipal Services Building, Council Chambers 33 Arroyo Drive, South San Francisco, CA City Council Regular Meeting Agenda September 26, 2018City Council Regular Meeting Agenda PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Council business, we proceed as follows: The regular meetings of the City Council are held on the second and fourth Wednesday of each month at 7:00 p.m. in the Municipal Services Building, Council Chambers, 33 Arroyo Drive, South San Francisco, California. The City Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Council action. LIZA NORMANDY, Mayor KARYL MATSUMOTO, Mayor Pro Tempore RICHARD A. GARBARINO, Councilman MARK ADDIEGO, Councilman PRADEEP GUPTA, Councilman FRANK RISSO, City Treasurer KRISTA MARTINELLI, City Clerk MIKE FUTRELL, City Manager JASON ROSENBERG, City Attorney PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT AVAILABLE FOR USE BY THE HEARING IMPAIRED AT CITY COUNCIL MEETINGS In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk’s Office located at City Hall. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080. Page 2 City of South San Francisco Printed on 10/24/2018 September 26, 2018City Council Regular Meeting Agenda CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE AGENDA REVIEW ANNOUNCEMENTS FROM STAFF PRESENTATIONS Presentation of a proclamation recognizing September as Childhood Cancer Awareness Month and in loving memory of Juliana Pena. (Liza Normandy, Mayor) 1. Presentation by Assemblymember Phil Ting (Phil Ting)2. Presentation on Youth Advisory Council (Heather Enders, Executive Assistant to the City Manager) 3. PUBLIC COMMENTS COUNCIL COMMENTS/REQUESTS ADMINISTRATIVE BUSINESS Report regarding a Resolution approving the Second Amendment to the Disposition and Development Agreement with Hisense REUS, LLC for the development of the properties located at 200 Linden and 212-216 Baden Avenue and authorizing the City Manager to execute the agreement. (Nell Selander, Economic and Community Development Deputy Director) 4. Resolution approving the Second Amendment to the Disposition and Development Agreement with Hisense Real Estate USA for the development of the properties located at 200 Linden and 212-216 Baden Avenue and authorizing the City Manager to execute the agreement. 4a. Report regarding resolutions amending contracts, budgets, and professional service agreements and accepting donation funds from Genentech related to the accelerated construction schedule of the South Airport Boulevard Bridge Replacement Project (Project No. st1301). (Robert Hahn, Project Manager) 5. Page 3 City of South San Francisco Printed on 10/24/2018 September 26, 2018City Council Regular Meeting Agenda Resolution amending the construction contract to ProVen Management, Inc. of Oakland, California by an amount of $2,159,527 with a total not to exceed amount of $7,392,400; approving budget amendment 19.014 and authorizing a total project budget of $10,300,740; and amending the fiscal year 2018-19 CIP budget by $2,497,840. 5a. Resolution amending the consultant services agreement with Biggs Cardosa Associates, Inc. of San Jose, California by an amount of $621,196 for a total not to exceed amount of $1,181,607. 5b. Resolution approving the 4th Amendment of the consulting services agreement with Mark Thomas & Company, Inc. of San Jose, CA in amount of $255,000 for a total not to exceed amount of $745,875. 5c. Resolution accepting up to $850,000 in donation funds from Genentech to be used as an incentive to ProVen Management, Inc. for opening the South Airport Boulevard Bridge to traffic prior to November 16, 2018. 5d. Report regarding a resolution approving a consultant services agreement with Kimley-Horn and Associates of Oakland, California for the Adaptive Traffic Control System Project (Project No. tr1901) in an amount not to exceed $1,996,900 for a total budget of $2,500,000, and authorizing the City Manager to execute the agreement. (Richard Cho, Principal Engineer) 6. Resolution approving a consultant services agreement with Kimley-Horn and Associates of Oakland, California for the Adaptive Traffic Control System Project (Project No. tr1901) in an amount not to exceed $1,996,900 for a total budget of $2,500,000. 6a. Report regarding a resolution awarding a construction contract to Shaw Pipeline, Inc. of San Francisco, California for the Terrace Drive Storm Drain Improvement Project (Project No. sd1701) in an amount not to exceed $523,535 and authorizing a total construction budget of $630,000. (Patrick Caylao, Associate Engineer and Peter Vorametsanti., Consultant, Swinerton Engineering) 7. Resolution awarding a construction contract to Shaw Pipeline, Inc. of San Francisco, California for the Terrace Drive Storm Drain Improvement Project (Project No. sd1701) in an amount not to exceed $523,535 and authorizing a total construction budget of $630,000. 7a. CONSENT CALENDAR Motion to approve the Minutes for the meetings of August 8, 2018, August 22, 2018, September 12, 2018 and September 19, 2018. 8. Page 4 City of South San Francisco Printed on 10/24/2018 September 26, 2018City Council Regular Meeting Agenda Motion confirming payment registers for September 26, 2018. (Richard Lee, Director of Finance) 9. Report regarding a motion to accept the Local Agency Biennial Notice for 2018 pursuant to the California Political Reform Act as regulated by the Fair Political Practices Commission and issued by the City Clerk. (Krista Martinelli, City Clerk) 10. Report regarding a resolution approving and authorizing the City Manager to sign a response to San Mateo County Grand Jury Report “Soaring City Pension Costs - Time for Hard Choices.” (Richard Lee, Director of Finance) 11. Resolution approving and authorizing the City Manager to sign a response to San Mateo County Grand Jury Report “Soaring City Pension Costs - Time for Hard Choices.” 11a. Report regarding resolution approving the acceptance of grant funds from the Habitat Conservation Fund Program in the amount of $9,250 from the Wildlife Area Activities Category, and amending the Parks and Recreation Department’s Fiscal Year 2018-19 Operating Budget by $18,500 pursuant to budget amendment #19.006. (Sharon Ranals, Parks and Recreation Director) 12. Resolution approving the acceptance of grant funds from the Habitat Conservation Fund Program in the amount of $9,250 from the Wildlife Area Activities Category, and amending the Parks and Recreation Department’s Fiscal Year 2018-19 Operating Budget by $18,500 pursuant to budget amendment #19.006. 12a. Report regarding resolution approving and authorizing the City Manager to sign the response to San Mateo County Grand Jury report: “Cooperative Purchasing - A Roadmap to More Effective City Procurement”. (Richard Lee, Director of Finance) 13. Resolution approving and authorizing the City Manager to sign the response to San Mateo County Grand Jury Report “Cooperative Purchasing - A Roadmap to More Effective City Procurement”. 13a. Report regarding a resolution approving a license agreement with EVgo Services LLC for a payment of $50,000 and a term of ten (10) years for the installation and operation of four (4) high powered electric vehicle chargers and use of (5) five parking spaces at the Miller Avenue Parking Garage located at 329 Miller Avenue, South San Francisco. (Justin Lovell, Public Works Administrator) 14. Resolution approving a license agreement with EVgo Services LLC for a payment of $50,000 and a term of ten (10) years for the installation and operation of four (4) high powered electric vehicle chargers and use of (5) five parking spaces at the Miller Avenue Parking Garage located at 329 Miller Avenue, South San Francisco. 14a. Page 5 City of South San Francisco Printed on 10/24/2018 September 26, 2018City Council Regular Meeting Agenda Report regarding a resolution approving the acceptance of grant funds from the After School Education and Safety Grant to be granted over a three-year term in the amount of $228,501 per year (total grant amount of $685,503), and amending the Parks and Recreation Department and Library Department Fiscal Year 2018-19 Operating Budget pursuant to budget amendment #19.021. (Sharon Ranals, Parks and Recreation Director) 15. Resolution approving the acceptance of grant funds from the After School Education and Safety Grant to be granted over a three-year term in the amount of $228,501 per year (total grant amount of $685,503), and amending the Parks and Recreation Department and Library Department Fiscal Year 2018-19 Operating Budget pursuant to budget amendment #19.021. 15a. Report regarding an Ordinance approving a Zoning Text Amendment making modifications to the South San Francisco Zoning Code related to Signage Citywide, and an Ordinance adopting a Development Agreement to allow for the installation of a 60 foot tall, double faced, digital billboard on property located at 180 S Airport in exchange for removal of one double sided billboard along San Mateo Ave and one single sided billboard along El Camino Real, together with other considerations. (Billy Gross, Senior Planner) 16. Ordinance making modifications to the South San Francisco Zoning Code related to Signage Citywide. 16a. Ordinance adopting a Development Agreement to allow for the installation of a 60 foot tall, double faced, digital billboard on property located at 180 S Airport in exchange for removal of one double-sided billboard along San Mateo Ave (at Lowrie Ave) and one single-sided billboard on El Camino Real north of Arroyo Blvd. 16b. Report regarding adoption of Ordinances repealing and replacing Chapters 20.380 “Inclusionary Housing Regulations” and 20.390 “Bonus Residential Density” of the South San Francisco Municipal Code to update the City’s inclusionary affordable housing program to include residential rental developments, revise requirements for residential for-sale developments, and conform to new State density bonus law. (Nell Selander, Economic & Community Development Deputy Director) 17. Ordinance repealing and replacing South San Francisco Municipal Code Chapter 20.380, Inclusionary Housing Regulations, to update the City of South San Francisco’s inclusionary affordable housing program to include residential rental developments and revise requirements for residential for-sale developments. 17a. Ordinance repealing and replacing South San Francisco Municipal Code Chapter 20.390, Bonus Residential Density, to update the City of South San Francisco’s regulations implementing the State Density Bonus. 17b. Page 6 City of South San Francisco Printed on 10/24/2018 September 26, 2018City Council Regular Meeting Agenda ITEMS FROM COUNCIL – COMMITTEE REPORTS AND ANNOUNCEMENTS ADJOURNMENT Page 7 City of South San Francisco Printed on 10/24/2018 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-725 Agenda Date:9/26/2018 Version:1 Item #:1. Presentation of a proclamation recognizing September as Childhood Cancer Awareness Month and in loving memory of Juliana Pena. (Liza Normandy, Mayor) City of South San Francisco Printed on 9/21/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-728 Agenda Date:9/26/2018 Version:1 Item #:2. Presentation by Assemblymember Phil Ting (Phil Ting) City of South San Francisco Printed on 9/21/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-693 Agenda Date:9/26/2018 Version:1 Item #:3. Presentation on Youth Advisory Council (Heather Enders, Executive Assistant to the City Manager) City of South San Francisco Printed on 9/21/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-864 Agenda Date:9/26/2018 Version:1 Item #:4. Report regarding a Resolution approving the Second Amendment to the Disposition and Development Agreement with Hisense REUS,LLC for the development of the properties located at 200 Linden and 212-216 Baden Avenue and authorizing the City Manager to execute the agreement.(Nell Selander,Economic and Community Development Deputy Director) RECOMMENDATION It is recommended that the City Council of the City of South San Francisco consider a resolution approving the Second Amendment to the Disposition and Development Agreement with Hisense REUS,LLC for the development of the properties located at 200 Linden and 212-216 Baden Avenue (the “Property”),and authorize the City Manager to execute the agreements. BACKGROUND/DISCUSSION On September 6,2017,the City Council approved a Disposition and Development Agreement (“DDA”) between the City of South San Francisco (“City”)and Hisense for the development of the Property with 97 condominium units and roughly 6,500 square feet of ground floor commercial space (the “Project”).On June 27,2018,the City Council approved the First Amendment to the DDA.Throughout the planning process, Hisense has consistently stressed that they wish to complete this project as expeditiously as possible,that this is their first development in the United States,and that their priority is to develop an attractive,high-quality project even if it requires them to accept a low financial return.The City has been working extensively with the developer to ensure that the developer reach the construction milestone as quickly as possible. Second Amendment to the DDA The Second Amendment to the DDA is included as Exhibit A to the associated resolution and includes three new provisions outlined below. Construction Start Date Extension Hisense has submitted a letter requesting the DDA Amendment to extend the deadline to begin construction on the Project from October 31,2018 to December 15,2018 (see Attachment 1).Staff supports this extension,as there are a number of circumstances requiring additional time to complete (e.g.,capping of the gas line,which necessitates substantial coordination with PG&E). Alternative Means of Satisfying Performance and Payment Bond Requirement As detailed in Attachment 1,the Developer requests the approval of an alternative means of satisfying the DDA requirement for a Performance and Payment Bond.The proposal includes executing a promissory note or a guaranty secured by a security agreement pledging all current assets of Hisense USA -an affiliate of the Developer,Hisense REUS -consisting of some cash and cash equivalents,all accounts receivable owed to Hisense USA,all inventory of Hisense USA,accounts receivable and other loans from related parties and other current assets,all of which are US-based assets and are unencumbered.The Second Amendment to the DDA drafted and included as Exhibit A to the associated resolution provides for the Developer to seek an alternative means of compliance,which may include an irrevocable letter of credit,pledge of cash deposit,certificate of deposit,secured pledge of personal property collateral,or other marketable securities held by a broker or other financial institution (the “Alternative”).Staff supports the detailed proposal as well as the Amendment languageCity of South San Francisco Printed on 9/20/2018Page 1 of 3 powered by Legistar™ File #:18-864 Agenda Date:9/26/2018 Version:1 Item #:4. financial institution (the “Alternative”).Staff supports the detailed proposal as well as the Amendment language to provide for an Alternative. Changing Requirements to Close Escrow To date,Hisense has satisfied all of the major conditions precedent to the close of escrow (“COE”)on the Property,except for the provision of a Performance and Payment Bond.As described above,staff supports accepting an Alternative to the bond requirement.However,the Developer is also seeking approval to provide the Alternative after the close of escrow and commencement of construction,which deviates from the timeline currently set forth in the DDA.In effort to alleviate the City’s concerns with this change in the timeline,the Developer is offering a $2 million deposit,which would be held in escrow and returned to the Developer if they met the December 15,2018 deadline to begin construction and execute the Alternative.Below is an illustration of the timelines associated with closing, both currently and under Hisense’s proposal. Current Timeline 1.Alternative to payment and performance bond executed 2.COE 3.Start demolition/construction Hisense’s Proposed Timeline 1.$2 million deposit 2.COE 3.Start demolition/construction 4.Alternative to payment and performance bond approved 5.December 15, 2018 (and $2 million deposit returned if above are met) Hisense is eager to close escrow as soon as possible in order to issue a conditional Notice to Proceed (“NTP”) to its general contractor,Suffolk.As explained by the Developer in Attachment 1,this will allow them to retain the guaranteed maximum price for completion of construction.Suffolk has also provided a letter to this effect, which is included as Attachment 2. Despite the provision of the $2 million deposit,staff is concerned about the risk associated with allowing demolition and construction to begin prior to the execution of the Alternative.Should demolition occur and the Alternative not be acceptable to the City,following a cure period where the Developer could attempt to propose a more satisfactory Alternative,the Property would revert to the City in an as is condition.At this point,the Property would most likely be fenced off and demolition of the existing building and parking lot may have been completed.If improvements to the Property had been demolished,it may require more than $2 million to install new parking facilities (the likely temporary use of the Property).Since the Alternative would not be in effect, the City would not have access to sufficient funds to complete the Project (the hard costs currently are $55 million).In this instance,the City would put the Property back out to bid.Selection of a developer,approval of disposition agreements,and any required changes to entitlements could delay further construction on the Property by several years. As discussed above,Hisense is requesting a change to the requirements to close escrow,which changes the order in which the Alternative is executed and demolition begins.If Council is comfortable with this approach, the DDA Amendment may be adopted as is presented in Exhibit A to the associated resolution.Alternatively, Council may consider a more conservative approach to the timeline as outlined below: City of South San Francisco Printed on 9/20/2018Page 2 of 3 powered by Legistar™ File #:18-864 Agenda Date:9/26/2018 Version:1 Item #:4. 1.$2 million deposit 2.COE 3.Alternative to payment and performance bond approved 4.Start demolition/construction 5.December 15, 2018 (and $2 million deposit returned if above are met) FISCAL IMPACT Should the Developer close escrow on the Property,provide the Alternative,and proceed with demolition and construction then there would be no fiscal impact to the City.If the Developer should default on their obligations prior to provision of an Alternative,then the City would have only $2 million to return the Property to a functional use like public parking and would have to seek a new developer to complete the Project.This could result in cost overruns to the City. CONCLUSION It is recommended that Council consider adopting a resolution approving the Second Amendment to the Disposition and Development Agreement with Hisense Real Estate USA for the development of the properties located at 200 Linden and 212-216 Baden Avenue,and authorizing the City Manager to execute the agreements. Attachments: 1.Letter from Hisense 2.Letter from Suffolk City of South San Francisco Printed on 9/20/2018Page 3 of 3 powered by Legistar™ September 20, 2018 John Baker 260 Townsend Street, San Francisco CA 94107 Dear John: Suffolk Construction, Inc. has agreed to accept Hisense’s issuance of a Conditional Notice to Proceed on 9/28/2018 for the grading and demolition work that will allow the construction team to be ready upon permit issuance. We have full commitment from our subcontractor trade partners, and we are committed to work in partnership with all parties to get this project under construction this October of 2018. Sincerely, Ryan Pine Project Executive City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-865 Agenda Date:9/26/2018 Version:1 Item #:4a. Resolution approving the Second Amendment to the Disposition and Development Agreement with Hisense Real Estate USA for the development of the properties located at 200 Linden and 212-216 Baden Avenue and authorizing the City Manager to execute the agreement. WHEREAS,on June 29,2011,the Legislature of the State of California (“State”)adopted Assembly Bill x1 26 (“AB 26”),which amended provisions of the State’s Community Redevelopment Law (Health and Safety Code sections 33000 et seq.)(“Dissolution Law”),pursuant to which the former Redevelopment Agency of the City of South San Francisco (“City”) was dissolved on February 1, 2012; and WHEREAS,the City elected to become the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Successor Agency”); and WHEREAS,pursuant to Health and Safety Code Section 34191.5(c)(2)(C),property shall not be transferred to a successor agency,city,county or city and county,unless a Long Range Property Management Plan (“LRPMP”)has been approved by the Oversight Board and the California Department of Finance (“DOF”); and WHEREAS,in accordance with the Dissolution Law,the Successor Agency prepared a LRPMP,which was approved by a resolution of the Oversight Board for the Successor Agency to the Redevelopment Agency of the City of South San Francisco (“Oversight Board”)on May 21,2015,and was approved by the DOF on October 1, 2015; and WHEREAS,consistent with the Dissolution Law and the LRPMP,certain real properties located in the City of South San Francisco,that were previously owned by the former Redevelopment Agency was transferred to the Successor Agency (“Agency Properties”); and WHEREAS,on October 18,2016,the City entered into an Amended and Restated Master Agreement for Taxing Entity Compensation (“Compensation Agreement”)with the various local agencies who receive shares of property tax revenues from the former redevelopment project area (“Taxing Entities”),which provides that upon approval by the Oversight Board of the sale price,and consistent with the LRPMP,the proceeds from the sale of any of the Agency Properties will be distributed to the Taxing Entities in accordance with their proportionate contributions to the Real Property Tax Trust Fund for the former Redevelopment Agency; and WHEREAS,on February 8,2017,the City adopted Resolution 16-2017 approving the transfer of the agency properties from the Successor Agency to the City and in accordance with the requirements set forth in the LRPMP,and on February 21,2017,the Oversight Board adopted a resolution approving the transfer of the redevelopment properties from the Successor Agency to the City; and WHEREAS,consistent with the LRPMP and the Oversight Board resolution,the Successor Agency and City City of South San Francisco Printed on 9/27/2018Page 1 of 2 powered by Legistar™ File #:18-865 Agenda Date:9/26/2018 Version:1 Item #:4a. WHEREAS,consistent with the LRPMP and the Oversight Board resolution,the Successor Agency and City executed and recorded grant deeds transferring the agency properties to the City; and WHEREAS,the real property located at 200 Linden Avenue and 212 -216 Baden Avenue (“200 Linden”) located in the City of South San Francisco,California,known as assessor parcel Numbers (“APNs”) 012334130,012334160,012334030 and 012334040 are agency properties and are subject to the provisions of the LRPMP and the Compensation Agreement; and WHEREAS,the City Council selected Hisense REUS,LLC (“Developer”)to develop the properties located at 200 Linden in a manner consistent with the LRPMP; and WHEREAS,on September 6,2017,the City Council approved a Disposition and Development Agreement (“DDA”) between the City and the Developer; and WHEREAS,on September 19,2017,the Oversight Board approved the sale price contained within the DDA; and WHEREAS, the DDA was executed and became effective on October 5, 2017. NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council does hereby resolve as follows: 1.The foregoing recitals are true and correct and made a part of this Resolution. 2.The proposed actions in this Resolution are consistent with the Long Range Property Management Plan. 3.The Second Amendment to the Disposition and Development Agreement,attached hereto as Exhibit A and incorporated herein, is hereby approved. 4.The City Manager,or his designee,is authorized to execute the Second Amendment to the Disposition and Development Agreement,attached hereto as Exhibit A and incorporated herein,and execute any necessary documents related to the Second Amendment to the Disposition and Development Agreement. 5.The City Manager,or his designee,is authorized take any and all other actions necessary to implement this intent of this Resolution, subject to approval as to form by the City Attorney. ***** City of South San Francisco Printed on 9/27/2018Page 2 of 2 powered by Legistar™ 1 SECOND AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT This Second Amendment to the Disposition and Development Agreement (“Second Amendment”) is entered into effective as of ____________, 2018 (“Effective Date”) by and between the City of South San Francisco, a municipal corporation (“City”) and Hisense REUS, LLC, a California limited liability company (“Developer”). City and Developer are hereinafter collectively referred to as the “Parties.” RECITALS A. The City of South San Francisco is the owner of certain real property located in the City of South San Francisco, California, known as County Assessor’s Parcel Numbers (“APN”) 012-334-130 (200 Linden Avenue), 012-334-160 (216 Baden Avenue), 012-334-040 and 012-334-030 (212 Baden Avenue), as more particularly described in Exhibit A to the DDA (the “Property”). B. On September 6, 2017, the City Council adopted Resolution No. 104a-2017, approving a Disposition and Development Agreement between the City and Hisense REUS, LLC (“DDA”) for the development of 97 residential condominium units and approximately 6,,200 square feet of commercial retail space on the Property (“Project”), as more specifically described in the Project entitlements. C. On June 27, 2018, Developer and City agreed to amend the DDA and entered into the First Amendment to the DDA. NOW, THEREFORE, in consideration of the mutual covenants and promises of the parties herein contained, the City and Developer agree as follows: AMENDMENT TO AGREEMENT 1. Recitals. The foregoing recitals are true and correct and hereby incorporated herein. 2. Defined Terms. All capitalized terms not defined herein shall have the meanings ascribed to them in the DDA. 3. Section 5.1. Section 5.1 of the DDA is hereby amended to read as follows with additions in double underline and deletions in strikethrough: 5.1 Development Schedule. Subject to Section 11.2, Developer shall commence construction of the Project within sixty (60) days following conveyance of the Property to Developer, and in no event later than October 31 , 2018 December 15, 2018 , and shall diligently prosecute to completion the construction of the Project. Each party shall use diligent and commercially reasonable efforts to perform the obligations to be performed by such party pursuant to this Agreement within the times periods set forth herein, and if no such time is provided, within a reasonable time, designed to permit issuance of a final certificate of occupancy for the Project by the date specified in 2 Exhibit D. Subject to Section 11.2 and the City’s issuance of permits and approvals, Developer’s failure to commence or complete the Project in accordance with the time periods specified in this Section 5.1 shall be an Event of Default hereunder. 4. Section 5.17. Section 5.17 of the DDA is hereby repealed and replaced in its entirety and amended to read as follows: 5.17 Performance and Payment Bonds. Prior to Close of Escrow, Developer shall provide, to the City copies of payment bond(s) and performance bond(s) issued by a reputable insurance company licensed to do business in California, each in a penal sum of not less than one hundred percent (100%) of the scheduled cost of construction of the Project pursuant to the Construction Contract to be executed by Developer. The bonds shall name the City as co-obligee. 5.17.1 Alternative to Performance and Payment Bonds. In lieu of such performance and payment bonds, Developer may submit documents and evidence satisfactory to the City of Developer’s and contractor’s ability to commence and complete construction of the Project, subject to City’s approval of the form and substance of the documents (“Approved Performance Bond Alternative”). Such Approved Performance Bond Alternative shall be approved by Developer prior to submission to City for City’s approval, and may be in the form of an irrevocable letter of credit, pledge of cash deposit, certificate of deposit, secured pledge of personal property collateral, marketable securities held by a broker or other financial institution, with signature authority of the City required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable to City. Developer shall submit documents and evidence sufficient to demonstrate an Approved Performance Bond Alternative in compliance with this subsection 5.17.1 to the City in sufficient time to allow for City review, but no less than fifteen (15) days prior to Developer beginning demolition on the Property, in order to allow for review and approval prior to the scheduled demolition start date. 5.17.1.1 Post-Closing Approval of Approved Performance Bond Alternative. In lieu of providing an Approved Performance Bond Alternative prior to Close of Escrow, Developer may elect to deliver Two Million dollars ($2,000,000) into escrow as a good faith security deposit to permit the close of escrow prior to the City’s approval of the Approved Performance Bond Alternative in compliance with Subsection 5.17.1. If Developer provides an Approved Performance Bond Alternative that has been approved by the City, pursuant to Section 5.17.1 and Developer commences construction before December 15, 2018, then the deposit shall be returned to the Developer. If, in City’s sole discretion, Developer fails to provide the City with an Approved Performance Bond Alternative pursuant to Section 5.17.1 prior to December 15, 2018, Developer shall be in default under this Agreement, and, in addition to the City’s other remedies, the City would retain the entire deposit, following a 60 calendar day cure period. If Developer is able to timely cure the default, the deposit will be returned to Developer, less any costs incurred by the City related to the enforcement of this provision at a not to exceed amount of Fifteen Thousand Dollars ($15,000). 3 5. Section 9.10. Section 9.10 of the DDA is hereby amended to read as follows with additions in double underline and deletions in strikethrough: 9.10. Future Sale of Property. If the City exercises the Repurchase Option pursuant to Section 9.9, the City will make reasonable efforts to remarket the property for development consistent with the LRPMP. In the event that the City sells the property following exercise of the Repurchase Option, the City shall pay to the Developer cash in an amount equal to: 1. Sale proceeds from the sale of the Property, or Three Million, Five Hundred Thousand Dollars ($3,500,000) Three Million, Fifty Thousand Dollars ($3,050,000), whichever is lower; minus 2. The amount paid to the Developer pursuant to Section 9.9; minus 3. The City’s costs incurred in selling the property, including but not limited to staff time, attorney’s fees and any third party consultants. 6. Effect of Second Amendment. Except as expressly modified by this Second Amendment, the DDA and First Amendment shall continue in full force and effect according to its terms, and Developer and City hereby ratify and affirm all their respective rights and obligations under the DDA, including but not limited to Developer’s indemnification obligations as set forth in Section 10.1 of the DDA. In the event of any conflict between the Second Amendment or the First Amendment or the DDA, the provisions of this Second Amendment shall govern. 7. Binding Agreement. This Second Amendment shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, and assigns of each of the parties hereto. Any reference in this Second Amendment to a specifically named party shall be deemed to apply to any successor, administrator, executor, or assign of such party who has acquired an interest in compliance with the terms of this Second Amendment or under law. 8. Counterparts. This Second Amendment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute the same document. 9. California Law. This Second Amendment shall be governed by and interpreted in accordance with the laws of the State of California. 4 10. Invalidity. Any provision of this Second Amendment that is determined by a court of competent jurisdiction to be invalid or unenforceable shall be deemed severed from this Second Amendment, and the remaining provisions shall remain in full force and effect as if the invalid or unenforceable provision had not been a part hereof 11. Headings. The headings used in this Second Amendment are for convenience only and shall be disregarded in interpreting the substantive provisions of this Second Amendment. IN WITNESS WHEREOF, this Second Amendment has been entered into by and between Developer and City as of the date and year first above written. [SIGNATURES ON THE FOLLOWING PAGE] 5 CITY By: _________________________ City Manager ATTEST: By: ___________________________ City Clerk APPROVED AS TO FORM: By: ___________________________ City Attorney DEVELOPER: Hisense REUS, LLC, a California limited liability company By: __________________________ Its: Managing Member City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-528 Agenda Date:9/26/2018 Version:1 Item #:5. Report regarding resolutions amending contracts,budgets,and professional service agreements and accepting donation funds from Genentech related to the accelerated construction schedule of the South Airport Boulevard Bridge Replacement Project (Project No. st1301). (Robert Hahn, Project Manager) RECOMMENDATION It is recommended that the City Council adopt the following resolutions amending contracts,budgets, and professional services agreements and accepting donation funds from Genentech related to the accelerated construction schedule for the South Airport Boulevard Bridge Replacement Project (Project No. st1301): (1)Resolution amending the construction contract to ProVen Management,Inc.of Oakland, California by an amount of $2,159,527 with a total not to exceed amount of $7,392,400;approving budget amendment 19.014 authorizing a total project budget of $11,150,740;and amending the fiscal year 2018-19 CIP budget by $3,347,840. (2)Resolution amending the consultant services agreement with Biggs Cardosa Associates,Inc.of San Jose, California by an amount of $621,196 in a total not to exceed amount of $1,181,607. (3)Resolution approving the 4th Amendment to the consulting services agreement with Mark Thomas &Company,Inc.of San Jose,CA in amount of $255,000 for a total not to exceed amount of $745,875. (4)Resolution accepting up to $850,000 in donation funds from Genentech to be used as an incentive to ProVen Management,Inc.for opening the South Airport Boulevard Bridge to traffic prior to November 16, 2018. BACKGROUND/DISCUSSION The South Airport Boulevard Bridge at North Access Road (Bridge),Caltrans ID 35C044,is an at-grade bridge constructed in 1949 and widened in 1975. Under the Caltrans Bridge Inspection Program,bridges are inspected every two-years,with a report of findings submitted to the City of South San Francisco (“City”).After reviewing the May 2009 inspection report that identified the Bridge as needed repairs.The City retained Mark Thomas &Company on February 24,2010 to perform additional inspections and provide recommendations for repair.Based upon the needed maintenance repairs,the Bridge was incorporated into the Caltrans Highway Bridge Program (HBP).The HBP provides funding for the replacement or rehabilitation of bridges that serve the public and are considered significantly important. The program funds 88.53% of project funding with an 11.47% local match. The request for preliminary engineering funding was submitted to Caltrans in July of 2010.The City was notified of the approved funding June 21,2012.Preliminary engineering began in April of 2013;with the preliminary plans and encroachment permit submitted to Caltrans in December of 2015. The City received Caltrans authorization to begin construction in April of 2017.The bridge replacement project was advertised in August of 2017 and subsequently awarded to ProVen Management,Inc.in December 2017. On January 10,2018,City Council approved a consulting services agreement with Biggs Cardosa Associates, City of South San Francisco Printed on 9/21/2018Page 1 of 4 powered by Legistar™ File #:18-528 Agenda Date:9/26/2018 Version:1 Item #:5. Inc. for construction management and inspection services. In order to keep the bridge open to vehicle traffic during construction and to comply with the California Department of Fish &Wildlife’s (CDFW)April -October window for working in the waterway channel,the project was initially planned as a phased, two-year project. In May 2018,during a preliminary site inspection,the deterioration of the existing piles was observed to be significantly worse than previously noted.In the interest of public safety,the Bridge was completely closed to traffic on Monday May 21, 2018 and a full Bridge closure is currently in place. With the full closure of the Bridge,staff worked with the contractor,ProVen Management,Inc.,the construction manager,Biggs Cardosa Associates,Inc.,and the design consultant Mark Thomas &Company, Inc.to develop and implement an accelerated construction schedule to complete the bridge replacement in a single season. Accelerating the project into to a single season necessitates additional expenditures beyond those considered in a two-year project, such as: ·Contract,plans and specification modifications to account for accelerated staging,scheduling, additional traffic control, overtime and shift-work wages. ·The full closure requires daily flagging operations during afternoon commute hours at four intersections along the Airport Boulevard corridor. ·Additional consulting services to design and implement additional way-finding signage,traffic signal re -timing and intersection re-striping and marking,necessitated by the complete closure;exploration and negotiation of potential bypass opportunities for local traffic. ·Enhanced inspections and construction management required by a single season project,including extensive coordination with multiple regulatory agencies,Caltrans,SFO and affected local business owners. ·Increased construction costs,including modification of multiple subcontractor agreements to incorporate increased labor and non-standard work hours,additional equipment costs and the hiring of a demolition subcontractor to complete the accelerated demolition of the existing structure. ProVen Management, Inc. Construction Contract The new cost proposal includes the contractor and subcontractors (as needed)working double shifts and weekends to meet the numerous critical path deadlines necessary to open the Bridge to traffic by November 16, 2018.The single largest cost increase relates to the traffic control measures required by the complete closure of the Bridge.The daily cost to support flagging and traffic control at the four intersections along the South Airport Boulevard corridor is approximately $10,000 per day.The estimated cost for all traffic control activities through November 16, 2018 is $1.648 million. Original AmountRevised Amount Construction $5,232,873 $5,744,458 Additional Traffic Control $0 $1,647,942 Total $5,232,873$7,392,400 Biggs Cardosa Associates, Inc. Agreement Additional construction management costs provide for oversite of the increased traffic control operations, City of South San Francisco Printed on 9/21/2018Page 2 of 4 powered by Legistar™ File #:18-528 Agenda Date:9/26/2018 Version:1 Item #:5. Additional construction management costs provide for oversite of the increased traffic control operations, increased level of coordination with affected agencies and local businesses,and the additional costs of construction inspectors working extended hours to support the activities necessary to open The Bridge to traffic by November 16, 2018. Original AmountRevised Amount Construction Management $560,411 $1,181,607 Total $560,411$1,181,607 Mark Thomas & Company, Inc. Agreement The construction support activities required of Mark Thomas &Company,Inc.has increased significantly as a result of the single season schedule.Enhanced construction support includes design drawing and contract specification changes in support of the single season construction,additional detour design and layout drawings,and additional design efforts associated with exploration of potential bypass alternatives for local- traffic during the Bridge closure. Original AmountRevised Amount Design Services $490,875 $490,875 Construction Support $ 0 $255,000 Total $532,500 $745,875 Design Services completed under Task Order $ 41,625 $ 41,625 Genentech Grant Genentech,considered the founder of the biotech industry,has long been an active community partner with South San Francisco.Genentech staff engaged the City,exploring potential solutions to minimize the impacts of the Bridge closure to the residents and surrounding businesses.Genentech has offered to provide grant funding in an amount up to $850,000 to fund incentive payments to ProVen Management,Inc.and offset the exponential costs incurred by the construction contractor as they work to open the Bridge to vehicle traffic;the incentive payments is intended to encourage acceleration of the work to completion as early as October,15, 2018;32-days prior to the target date of November 16,2018.A table describing the incentive payment by completion date is attached as Attachment 3. FISCAL IMPACT This project is funded by a combination of Federal Highway Administration (FHWA)Highway Bridge Program grant and Measure A funds from the City.On August 23,2018 staff submitted revised financial documents with supporting justification to Caltrans for review and approval of additional funding from FHWA for costs incurred as a result of the accelerated single-season schedule (see Attachment 4). As a result of the increased project cost,there is a shortfall of $378,595 in local match funds from the existing authorized Measure A budget of $802,900.Staff recommends adding the General Fund as a funding source and transferring additional funds from the North Access Road Bike and Pedestrian Improvements (Project st1806). Staff further recommends amending the fiscal year 2018-19 CIP budget by $2,497,840 to account for increased project costs CONCLUSION Amending the construction contract,budget,and professional services agreements for the South Airport Boulevard Replacement Project will allow the project to continue with an accelerated schedule and open the City of South San Francisco Printed on 9/21/2018Page 3 of 4 powered by Legistar™ File #:18-528 Agenda Date:9/26/2018 Version:1 Item #:5. Boulevard Replacement Project will allow the project to continue with an accelerated schedule and open the Bridge for use by November 16,2018.Accepting the grant from Genentech will provide funding necessary to offset the exponential costs incurred by the contractor in their efforts to open the bridge as soon as October 15, 2018; 32-days prior to November 16, 2018 contract date. Attachments: 1.Vicinity Map 2.Genentech Donation Letter 3.Genentech Incentive Payment Table 4.Revised Project Budget City of South San Francisco Printed on 9/21/2018Page 4 of 4 powered by Legistar™ ATTACHMENT 1Page 1 of 1 Attachment 3 - Genentech Incentive Payment Initial Agreement Amount (Two-Year Project) Revised Agreement Amount (Single Season) Increase Proven Management Inc. Bridge Replacement (Construction)5,232,873$ 5,744,458$ 511,585$ Traffic Control (Flagging Operation)-$ 1,647,942$ 1,647,942$ Total 5,232,873$ 7,392,400$ 2,159,527$ Biggs Cardosa Associates, Inc. Construction Management 560,411$ 1,181,607$ 621,196$ Total 560,411$ 1,181,607$ 621,196$ Mark Thomas & Company, Inc. Design Services 490,875$ 490,875$ -$ Design Services Task Order $41,625 41,625$ Additional Construction Support -$ 255,000$ 255,000$ Total 532,500$ 787,500$ 255,000$ Additional Project Costs Construction Administration 104,656$ 119,993$ 15,337$ Contingency 523,287$ 739,240$ 215,953$ Right of Way Work 80,000$ 80,000$ -$ Total 707,943$ 939,233$ 231,290$ (st1301) Project Total 7,033,727$ 10,300,740$ 3,267,013$ Funding Sources FHWA Funding (88.53%)6,226,959$ 9,119,245$ 2,892,286$ Local Match - Measure A (11.47%)806,769$ 1,181,495$ 374,726$ Attachment 4 Revised Project Budget City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-529 Agenda Date:9/26/2018 Version:1 Item #:5a. Resolution amending the construction contract to ProVen Management,Inc.of Oakland,California by an amount of $2,159,527 with a total not to exceed amount of $7,392,400;approving budget amendment 19.014 and authorizing a total project budget of $10,300,740;and amending the fiscal year 2018-19 CIP budget by $2,497,840. WHEREAS,the South Airport Boulevard Bridge (Bridge)at North Access Road (Bridge No.35C044)is a 45- foot wide at grade-bridge built in 1949 and widened in 1975; and WHEREAS,the biennial inspection performed by Caltrans in May 2009 identified repairs necessary for the maintenance and safe operation of the Bridge; and WHEREAS,on April 5,2017,the City received the Authorization to Proceed to Construction from Caltrans under the Highway Bridge Program (HBP); and WHEREAS,under the Highway Bridge Program 88.53%of all eligible costs are funded by the FHWA and an 11.47% local match; and WHEREAS,on December 13,2017,City Council awarded a construction contract to ProVen Management,Inc. for the replacement of the South Airport Boulevard Bridge in the amount of $5,232,872.75 (“Bridge Replacement Project”); and WHEREAS,in early May 2018,a preliminary site inspection determined the deterioration of the bridge pilings was significantly worse than previously observed; and WHEREAS,on May 21,2018,in the interest of public safety,the bridge was completely closed to traffic and a full Bridge closure is currently in place; and WHEREAS,the Bridge Replacement Project (st1301)was originally planned utilizing a two-year phased schedule in order to keep the bridge open for traffic; and WHEREAS,with the full closure of the bridge,staff worked with the construction contractor,ProVen Management,Inc.,the construction manager,Biggs Cardosa Associates,Inc.,and the design consultant Mark Thomas &Company,Inc.to develop and implement an accelerated construction schedule to complete the bridge replacement in a single season by November 16, 2018; and WHEREAS,in order to accelerate the construction schedule and open bridge to traffic by November 16,2018, there are additional costs,which includes those contained in the additional Incentive Payment schedule attached hereto, beyond those considered in a two-year project; and City of South San Francisco Printed on 9/27/2018Page 1 of 2 powered by Legistar™ File #:18-529 Agenda Date:9/26/2018 Version:1 Item #:5a. WHEREAS,the revised cost for ProVen Management to complete accelerated construction of bridge and traffic control is an additional $2,159,527 with a total not to exceed amount of $7,392,400; and WHEREAS,this Project is funded by a combination of Federal Highway Administration (FHWA)Highway Bridge Program grant and Measure A funds from the City; and WHEREAS,on August 23,2018,staff submitted revised financial documents with supporting justification to Caltrans and anticipates approval of additional project funding from FHWA for 88.53%of costs incurred as a result of the accelerated construction schedule; and WHEREAS,currently there is a shortfall of $378,595 in local match funds from the existing authorized Measure A budget of $802,900; and WHEREAS,staff is recommending including the General Fund as a funding source and transfer the additional local match funds from the North Access Road Bike and Pedestrian Improvements (Project st1806). NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of South San Francisco that the City Council amends the construction contract of ProVen Management,Inc.of Oakland,California by an amount of $2,159,527 with a total not to exceed amount of $7,392,400. BE IT FURTHER RESOLVED that the City Council of the City of South San Francisco approves budget amendment 19.014,authorizing a total Project budget of $11,150,740,amends the fiscal year 2018-19 CIP budget by $3,347,840 and authorizes the City Manager to utilize any unspent monies of the project budget towards construction contingency. BE IT FURTHER RESOLVED that the City Council of the City of South San Francisco authorizes the Finance Department to establish the project budget in accordance with the accompanying staff report. BE IT FURTHER RESOLVED that the City Council of the City of South San Francisco approves an incentive payment schedule in substantially the same form as that attached hereto as Exhibit 2,the final execution of which is subject to approval by the City Attorney. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the amendment to the construction contract and any other related documents on behalf of the City upon timely submission by ProVen Management,Inc.the signed contract amendment and all other documents,subject to approval by the City Attorney. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take any other related actions consistent with the intention of this resolution. ***** City of South San Francisco Printed on 9/27/2018Page 2 of 2 powered by Legistar™ 1st AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND PROVEN MANAGEMENT, INC. THIS FIRST AMENDMENT TO THE PUBLIC WORKS CONTRACT AGREEMENT is made at South San Francisco, California, as of September 12, 2018, by and between THE CITY OF SOUTH SAN FRANCISCO (“City”), a municipal corporation, and PROVEN MANAGEMENT, INC. (“Contractor”), (sometimes referred together as the “Parties”) who agree as follows: RECITALS A. On December 13, 2017, City and Contractor entered that certain Public Works Contract Agreement (“Agreement”) whereby Contractor agreed to provide construction services for the South Airport Blvd & North Access Rd San Bruno Canal Bridge Replacement Project. A true and correct copy of the Agreement and its exhibits is attached as Exhibit A. B. City and Contractor now desire to amend the Agreement. NOW, THEREFORE, for and in consideration of the promises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Contractor hereby agree as follows: 1. All terms which are defined in the Agreement shall have the same meaning when used in this Amendment, unless specifically provided herein to the contrary. 2. Contract Price. Section 4 of the Agreement under Part I: Form Agreement shall be amended such that the City agrees to pay Contractor a sum not to exceed $7,392,400, with the understanding that up to $5,232,873 may have already been paid to Contractor. Contractor agrees this is the City’s total contribution for payment of costs under the Agreement unless additional payments are authorized in accordance with the terms of the Agreement and said terms of payment are mutually agreed to by and between the parties in writing. 3. Scope of Work. The Scope of Work under Part I: Form Agreement shall be amended in accordance with Exhibit B, attached to this Amendment and incorporated herein. 4. Working Hours. Section 7 of the Agreement under Part III: Special Conditions shall be amended in accordance with Exhibit C, attached to this Amendment and incorporated herein. 5. Incentive Payments For Early Completion. Section 23 regarding incentive payments shall be added to Part III: Special Conditions of the Agreement in accordance with Exhibit D, attached to this Amendment and incorporated herein. All other terms, conditions and provisions in the Agreement remain in full force and effect. If there is a conflict between the terms of this Amendment and the Agreement, the terms of the Agreement will control unless specifically modified by this Amendment. [SIGNATURES ON THE FOLLOWING PAGE] Dated: CITY OF SOUTH SAN FRANCISCO PROVEN MANAGEMENT, INC. By: By: Mike Futrell, City Manager William Gilmartin III, Vice President Approved as to Form: By: City Attorney EXHIBIT A Page 2 of 94 EXHIBIT A Page 3 of 94 EXHIBIT A Page 4 of 94 EXHIBIT A Page 5 of 94 EXHIBIT A Page 6 of 94 EXHIBIT A Page 7 of 94 EXHIBIT A Page 8 of 94 EXHIBIT A Page 9 of 94 EXHIBIT A Page 10 of 94 EXHIBIT A Page 11 of 94 EXHIBIT A Page 12 of 94 EXHIBIT A Page 13 of 94 EXHIBIT A Page 14 of 94 EXHIBIT A Page 15 of 94 EXHIBIT A Page 16 of 94 EXHIBIT A Page 17 of 94 EXHIBIT A Page 18 of 94 EXHIBIT A Page 19 of 94 EXHIBIT A Page 20 of 94 EXHIBIT A Page 21 of 94 EXHIBIT A Page 22 of 94 EXHIBIT A Page 23 of 94 EXHIBIT A Page 24 of 94 EXHIBIT A Page 25 of 94 EXHIBIT A Page 26 of 94 EXHIBIT A Page 27 of 94 EXHIBIT A Page 28 of 94 EXHIBIT A Page 29 of 94 EXHIBIT A Page 30 of 94 EXHIBIT A Page 31 of 94 EXHIBIT A Page 32 of 94 EXHIBIT A Page 33 of 94 EXHIBIT A Page 34 of 94 EXHIBIT A Page 35 of 94 EXHIBIT A Page 36 of 94 EXHIBIT A Page 37 of 94 EXHIBIT A Page 38 of 94 EXHIBIT A Page 39 of 94 EXHIBIT A Page 40 of 94 EXHIBIT A Page 41 of 94 EXHIBIT A Page 42 of 94 EXHIBIT A Page 43 of 94 EXHIBIT A Page 44 of 94 EXHIBIT A Page 45 of 94 EXHIBIT A Page 46 of 94 EXHIBIT A Page 47 of 94 EXHIBIT A Page 48 of 94 EXHIBIT A Page 49 of 94 EXHIBIT A Page 50 of 94 EXHIBIT A Page 51 of 94 EXHIBIT A Page 52 of 94 EXHIBIT A Page 53 of 94 EXHIBIT A Page 54 of 94 EXHIBIT A Page 55 of 94 EXHIBIT A Page 56 of 94 EXHIBIT A Page 57 of 94 EXHIBIT A Page 58 of 94 EXHIBIT A Page 59 of 94 EXHIBIT A Page 60 of 94 EXHIBIT A Page 61 of 94 EXHIBIT A Page 62 of 94 EXHIBIT A Page 63 of 94 EXHIBIT A Page 64 of 94 EXHIBIT A Page 65 of 94 EXHIBIT A Page 66 of 94 EXHIBIT A Page 67 of 94 EXHIBIT A Page 68 of 94 EXHIBIT A Page 69 of 94 EXHIBIT A Page 70 of 94 EXHIBIT A Page 71 of 94 EXHIBIT A Page 72 of 94 EXHIBIT A Page 73 of 94 EXHIBIT A Page 74 of 94 EXHIBIT A Page 75 of 94 EXHIBIT A Page 76 of 94 EXHIBIT A Page 77 of 94 EXHIBIT A Page 78 of 94 EXHIBIT A Page 79 of 94 EXHIBIT A Page 80 of 94 EXHIBIT A Page 81 of 94 EXHIBIT A Page 82 of 94 EXHIBIT A Page 83 of 94 EXHIBIT A Page 84 of 94 EXHIBIT A Page 85 of 94 EXHIBIT A Page 86 of 94 EXHIBIT A Page 87 of 94 EXHIBIT A Page 88 of 94 EXHIBIT A Page 89 of 94 EXHIBIT A Page 90 of 94 EXHIBIT A Page 91 of 94 EXHIBIT A Page 92 of 94 EXHIBIT A Page 93 of 94 EXHIBIT A Page 94 of 94 EXHIBIT A Page 3 of 94 EXHIBIT A Page 4 of 94 EXHIBIT A Page 5 of 94 EXHIBIT A Page 6 of 94 EXHIBIT A Page 7 of 94 EXHIBIT A Page 8 of 94 EXHIBIT A Page 9 of 94 EXHIBIT A Page 10 of 94 EXHIBIT A Page 11 of 94 EXHIBIT A Page 12 of 94 EXHIBIT A Page 13 of 94 EXHIBIT A Page 14 of 94 EXHIBIT A Page 15 of 94 EXHIBIT A Page 16 of 94 EXHIBIT A Page 17 of 94 EXHIBIT A Page 18 of 94 EXHIBIT A Page 19 of 94 EXHIBIT A Page 20 of 94 EXHIBIT A Page 21 of 94 EXHIBIT A Page 22 of 94 EXHIBIT A Page 23 of 94 EXHIBIT A Page 24 of 94 EXHIBIT A Page 25 of 94 EXHIBIT A Page 26 of 94 EXHIBIT A Page 27 of 94 EXHIBIT A Page 28 of 94 EXHIBIT A Page 29 of 94 EXHIBIT A Page 30 of 94 EXHIBIT A Page 31 of 94 EXHIBIT A Page 32 of 94 EXHIBIT A Page 33 of 94 EXHIBIT A Page 34 of 94 EXHIBIT A Page 35 of 94 EXHIBIT A Page 36 of 94 EXHIBIT A Page 37 of 94 EXHIBIT A Page 38 of 94 EXHIBIT A Page 39 of 94 EXHIBIT A Page 40 of 94 EXHIBIT A Page 41 of 94 EXHIBIT A Page 42 of 94 EXHIBIT A Page 43 of 94 EXHIBIT A Page 44 of 94 EXHIBIT A Page 45 of 94 EXHIBIT A Page 46 of 94 EXHIBIT A Page 47 of 94 EXHIBIT A Page 48 of 94 EXHIBIT A Page 49 of 94 EXHIBIT A Page 50 of 94 EXHIBIT A Page 51 of 94 EXHIBIT A Page 52 of 94 EXHIBIT A Page 53 of 94 EXHIBIT A Page 54 of 94 EXHIBIT A Page 55 of 94 EXHIBIT A Page 56 of 94 EXHIBIT A Page 57 of 94 EXHIBIT A Page 58 of 94 EXHIBIT A Page 59 of 94 EXHIBIT A Page 60 of 94 EXHIBIT A Page 61 of 94 EXHIBIT A Page 62 of 94 EXHIBIT A Page 63 of 94 EXHIBIT A Page 64 of 94 EXHIBIT A Page 65 of 94 EXHIBIT A Page 66 of 94 EXHIBIT A Page 67 of 94 EXHIBIT A Page 68 of 94 EXHIBIT A Page 69 of 94 EXHIBIT A Page 70 of 94 EXHIBIT A Page 71 of 94 EXHIBIT A Page 72 of 94 EXHIBIT A Page 73 of 94 EXHIBIT A Page 74 of 94 EXHIBIT A Page 75 of 94 EXHIBIT A Page 76 of 94 EXHIBIT A Page 77 of 94 EXHIBIT A Page 78 of 94 EXHIBIT A Page 79 of 94 EXHIBIT A Page 80 of 94 EXHIBIT A Page 81 of 94 EXHIBIT A Page 82 of 94 EXHIBIT A Page 83 of 94 EXHIBIT A Page 84 of 94 EXHIBIT A Page 85 of 94 EXHIBIT A Page 86 of 94 EXHIBIT A Page 87 of 94 EXHIBIT A Page 88 of 94 EXHIBIT A Page 89 of 94 EXHIBIT A Page 90 of 94 EXHIBIT A Page 91 of 94 EXHIBIT A Page 92 of 94 EXHIBIT A Page 93 of 94 EXHIBIT A Page 94 of 94 EXHIBIT B Scope of Work for Accelerated One Season Construction This Cost/Schedule Change Request is being submitted to request an increase in the construction costs and expedite the construction schedule. The bridge was closed due to significant deterioration and substantial loss of capacity of the timber and concrete piles presenting an immediate public safety concern and liability for the City with both current and the anticipated staged construction traffic loads. The bridge closure required additional cost for detours, signage, message boards, striping, and flaggers to control traffic and has increased the associated construction cost significantly. South Airport Blvd has an ADT of 19,000 and is operating near capacity so the bridge closure and resulting detour has affected the entire South Airport Blvd. and Gateway Blvd. corridors north of the bridge closure and been a monumental task to control traffic in the area. The Cost/Schedule Change Request is also being submitted to appeal for additional funding to proceed to an accelerated schedule to be able to reopen traffic by November 16, 2018 to minimize the resulting congestion and traffic impact to the public. Contractor will be working 6- 12 hour shifts for 6 days per week (Monday thru Saturday) and occasionally on Sunday. The Construction Engineering Cost Request is 20% of the revised bridge costs due to all the engineering costs associated with detouring traffic due to bridge closure. This included detour routes and all the signage for local streets and on US 101 and I-380 as requested by Caltrans. Also CE costs exceed 15% due to the accelerated schedule which will have Construction Inspectors working 2-8 hour per week (Monday thru Friday) shifts per day and also working on Saturdays and some Sundays. EXHIBIT C EXHIBIT D City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-846 Agenda Date:9/26/2018 Version:1 Item #:5b. Resolution amending the consultant services agreement with Biggs Cardosa Associates,Inc.of San Jose, California by an amount of $621,196 for a total not to exceed amount of $1,181,607. WHEREAS,on January 10,2018,City Council approved a consulting services agreement with Biggs Cardosa Associates,Inc.for construction management and inspection services in an amount of $560,411 for the Bridge Replacement Project ; and WHEREAS,in early May 2018,a preliminary site inspection determined the deterioration of the bridge pilings was significantly worse than previously observed; and WHEREAS,on May 21,2018,in the interest of public safety,the Bridge was completely closed to traffic and a full Bridge closure is currently in place.; and WHEREAS,the bridge replacement project (st1301)was originally planned utilizing a two-year phased schedule in order to keep the bridge open for traffic; and WHEREAS,with the full closure of the bridge,staff worked with the construction contractor,ProVen Management,Inc.,the construction manager,Biggs Cardosa Associates,Inc.,and the design consultant Mark Thomas &Company,Inc.to develop and implement an accelerated construction schedule to complete the bridge replacement in a single season by November 16, 2018; and WHEREAS,in order to accelerate the construction schedule and open bridge to traffic by November 16,2018, there are additional costs beyond those considered in a two-year project; and WHEREAS,the costs for inspection services,extended working hours,additional public outreach and added traffic management resulting from the accelerated schedule has increased by $621,196. NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of South San Francisco that the City Council amends the consulting services agreement with Biggs Cardosa Associates,Inc.of San Jose,California in an amount of $621,196, with a total not to exceed amount of $1,181,607. BE IT FURTHER RESOLVED that the City Council of the City of South San Francisco authorizes the Finance Department to establish the project budget in accordance with the accompanying staff report,including the changes contained in budget amendment 19.014. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the amendment to the agreement and any other related documents on behalf of the City upon timely submission by Biggs Cardosa the signed contract amendment and all other documents, subject to approval by the City Attorney. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take any other relatedCity of South San Francisco Printed on 9/27/2018Page 1 of 2 powered by Legistar™ File #:18-846 Agenda Date:9/26/2018 Version:1 Item #:5b. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take any other related actions consistent with the intention of this resolution. ***** City of South San Francisco Printed on 9/27/2018Page 2 of 2 powered by Legistar™ FIRST AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND BIGGS CARDOSA ASSOCIATES, INC. THIS FIRST AMENDMENT TO THE CONSULTING SERVICES AGREEMENT is made at South San Francisco, California, as of September 12, 2018, by and between THE CITY OF SOUTH SAN FRANCISCO (“City”), a municipal corporation, and Biggs Cardosa Associates, Inc. (“Consultant”), (sometimes referred together as the “Parties”) who agree as follows: RECITALS A. On December 13 2017, City and Consultant entered that certain Consultant Services Agreement (“Agreement”) whereby Contractor agreed to provide Construction Management Services for the South Airport Boulevard Bridge Replacement Project. A true and correct copy of the Agreement and its exhibits is attached as Exhibit A. B. City and Consultant now desire to amend the Agreement. NOW, THEREFORE, for and in consideration of the promises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Consultant hereby agree as follows: 1. All terms which are defined in the Agreement shall have the same meaning when used in this Amendment, unless specifically provided herein to the contrary. 2. Section 2: Compensation. Section 2 of the Agreement shall be amended such that the City agrees to pay Consultant a sum not to exceed $1,181,607, with the understanding that up to Five Hundred Sixty Thousand Four Hundred Eleven Dollars ($560,411) may have already been paid to Consultant. Consultant agrees this is the City’s total contribution for payment of costs under the Agreement unless additional payments are authorized in accordance with the terms of the Agreement and said terms of payment are mutually agreed to by and between the parties in writing. 3. Scope of Services. The Scope of services is amended and attached as Exhibit B to this Amendment. All other terms, conditions and provisions in the Agreement remain in full force and effect. If there is a conflict between the terms of this Amendment and the Agreement, the terms of the Agreement will control unless specifically modified by this Amendment. [SIGNATURES ON THE FOLLOWING PAGE] Dated: CITY OF SOUTH SAN FRANCISCO CONSULTANT By: By: Mike Futrell, City Manager Mahvash Harms, PE, SE Principal-in-Charge Approved as to Form: By: City Attorney EXHIBIT A Page 1 of 43 EXHIBIT A Page 2 of 43 EXHIBIT A Page 3 of 43 EXHIBIT A Page 4 of 43 EXHIBIT A Page 5 of 43 EXHIBIT A Page 6 of 43 EXHIBIT A Page 7 of 43 EXHIBIT A Page 8 of 43 EXHIBIT A Page 9 of 43 EXHIBIT A Page 10 of 43 EXHIBIT A Page 11 of 43 EXHIBIT A Page 12 of 43 EXHIBIT A Page 13 of 43 EXHIBIT A Page 14 of 43 EXHIBIT A Page 15 of 43 EXHIBIT A Page 16 of 43 EXHIBIT A Page 17 of 43 EXHIBIT A Page 18 of 43 EXHIBIT A Page 19 of 43 EXHIBIT A Page 20 of 43 EXHIBIT A Page 21 of 43 EXHIBIT A Page 22 of 43 EXHIBIT A Page 23 of 43 EXHIBIT A Page 24 of 43 EXHIBIT A Page 25 of 43 EXHIBIT A Page 26 of 43 EXHIBIT A Page 27 of 43 EXHIBIT A Page 28 of 43 EXHIBIT A Page 29 of 43 EXHIBIT A Page 30 of 43 EXHIBIT A Page 31 of 43 EXHIBIT A Page 32 of 43 EXHIBIT A Page 33 of 43 EXHIBIT A Page 34 of 43 EXHIBIT A Page 35 of 43 EXHIBIT A Page 36 of 43 EXHIBIT A Page 37 of 43 EXHIBIT A Page 38 of 43 EXHIBIT A Page 39 of 43 EXHIBIT A Page 40 of 43 EXHIBIT A Page 41 of 43 EXHIBIT A Page 42 of 43 EXHIBIT A Page 43 of 43 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-847 Agenda Date:9/26/2018 Version:1 Item #:5c. Resolution approving the 4th Amendment of the consulting services agreement with Mark Thomas & Company, Inc. of San Jose, CA in amount of $255,000 for a total not to exceed amount of $745,875. WHEREAS,the South Airport Boulevard Bridge (Bridge)at North Access Road (Bridge No.35C044)is a 45- foot wide at grade-bridge built in 1949 and widened in 1975; and WHEREAS,the biennial inspection performed by Caltrans in May 2009 identified repairs necessary for the maintenance and safe operation of the Bridge; and WHEREAS,on February 24,2010,the City Council awarded a consultant services agreement to Mark Thomas & Company to provide inspection services and develop design recommendations to repair the Bridge; and WHEREAS,Based upon the findings of Mark Thomas and Company,a recommendation was submitted to Caltrans requesting replacement of the Bridge through the Caltrans Highway Bridge Program (HBP); and WHEREAS,on June 21,2012,the City received notification that the bridge was approved for eligibility and funding for Preliminary Engineering by the Federal Highway Administration (FHWA)for Fiscal Year 2012-13; and WHEREAS,on April 5,2017,the City received the Authorization to Proceed to Construction from Caltrans; and WHEREAS,since the original agreement was signed with Mark Thomas and Company,Inc.there have been three amendments to incorporate work necessary for successive phases of the project which increased the agreement authority to $490,875; and WHEREAS,in early May 2018,a preliminary site inspection determined the deterioration of the Bridge pilings was significantly worse than previously observed; and WHEREAS,on May 21,2018,in the interest of public safety,the Bridge was completely closed to traffic and a full Bridge closure is currently in place; and WHEREAS,the Bridge replacement project (st1301)was originally planned utilizing a two-year phased schedule in order to keep the Bridge open for traffic; and WHEREAS,with the full closure of the Bridge,staff worked with the contractor,ProVen Management,Inc.,the construction manager,Biggs Cardosa Associates,Inc.,and the design consultant Mark Thomas &Company, Inc.to develop and implement an accelerated construction schedule to complete the bridge replacement in a City of South San Francisco Printed on 9/27/2018Page 1 of 2 powered by Legistar™ File #:18-847 Agenda Date:9/26/2018 Version:1 Item #:5c. single season, by November 16, 2018; and WHEREAS,with the accelerated construction schedule,the cost for additional construction support and design services has increased the by $255,000. NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of South San Francisco that the City Council amends the consulting services agreement of Mark Thomas &Company of San Jose,California in an amount of $255,000 with a total not to exceed $745,875. BE IT FURTHER RESOLVED that the City Council of the City of South San Francisco authorizes the Finance Department to establish the project budget in accordance with the accompanying staff report,including the changes contained in budget amendment 19.014. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the amendment to the agreement and any other related documents on behalf of the City upon timely submission by Mark Thomas & Company the signed contract amendment and all other documents, subject to approval by the City Attorney. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take any other related actions consistent with the intention of this resolution. ***** City of South San Francisco Printed on 9/27/2018Page 2 of 2 powered by Legistar™ FOURTH AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND MARK THOMAS AND COMPANY, INC. THIS FOURTH AMENDMENT TO THE CONSULTING SERVICES AGREEMENT is made at South San Francisco, California, as of September 12, 2018, by and between THE CITY OF SOUTH SAN FRANCISCO (“City”), a municipal corporation, and MARK THOMAS AND COMPANY, INC. (“Consultant”), (sometimes referred together as the “Parties”) who agree as follows: RECITALS WHEREAS, on July 11, 2012, Consultant and City entered into the Agreement, pursuant to which City contracted with Consultant to provide consulting services related to the San Bruno Canal Bridge Replacement at South Airport Boulevard and North Access Road; and WHEREAS, pursuant to the Agreement, City agreed to pay Consultant a sum not to exceed Three Hundred Seventy Five Thousand, Seven Hundred Seventy Five Dollars ($375,775.00) for professional services set forth in the Agreement; and WHEREAS, on August 26, 2015, City and Consultant entered into the First Amendment to the Agreement, which provide extension of time until December 31, 2016 to complete the services contemplated under the Agreement; and WHEREAS, on November 1, 2016, the City and Consultant entered into the Second Amendment to expand the services under the Agreement to provide additional construction management services and additional compensation of One Hundred and Fifteen Thousand, One Hundred Dollars ($115,100) for a total not to exceed amount under the Agreement of Four Hundred and Ninety Thousand, Eight Hundred and Seventy-Five Dollars ($490,875); and WHEREAS, on February 17, 2017, the City and Consultant entered into the Third Amendment to further extend the time until December 31, 2020, to complete the services contemplated in the Agreement with the understanding that the City has no obligation to provide Consultant with additional compensation beyond the maximum amount provided for in the Agreement and previous Amendments. WHEREAS, the City and Consultant now desire to enter into this Fourth Amendment to provide additional design services during construction and additional compensation of Two Hundred Fifty Five Thousand Dollars ($255,000) for a total not to exceed amount under the Agreement of Seven Hundred Forty Five Thousand Eight Hundred Seventy Five Dollars ($745,875); and NOW, THEREFORE, for and in consideration of the promises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Contractor hereby agree as follows: 1. All terms which are defined in the Agreement shall have the same meaning when used in this Amendment, unless specifically provided herein to the contrary. 2. Section 3. Section - of the Agreement shall be amended such that the City agrees to pay Contractor a sum not to exceed Six Hundred Sixty Three Thousand Eight Hundred Seventy Five Dollars ($663,875), with the understanding that up to Four Hundred and Ninety Thousand, Eight Hundred and Seventy-Five Dollars ($490,875) has already been paid to Consultant. Consultant agrees this is the City’s total contribution for payment of costs under the Agreement unless additional payments are authorized in accordance with the terms of the Agreement and said terms of payment are mutually agreed to by and between the parties in writing. 3. Scope of Services. The Scope of services is amended and attached as Exhibit B to this Amendment. All other terms, conditions and provisions in the Agreement remain in full force and effect. If there is a conflict between the terms of this Amendment and the Agreement, the terms of the Agreement will control unless specifically modified by this Amendment. [SIGNATURES ON THE FOLLOWING PAGE] Dated: CITY OF SOUTH SAN FRANCISCO CONSULTANT By: By: Mike Futrell, City Manager Sasha Dansky, P.E./QSD, Principal Approved as to Form: By: City Attorney EXHIBIT A Page 1 of 32 EXHIBIT A Page 2 of 32 EXHIBIT A Page 3 of 32 EXHIBIT A Page 4 of 32 EXHIBIT A Page 5 of 32 EXHIBIT A Page 6 of 32 EXHIBIT A Page 7 of 32 EXHIBIT A Page 8 of 32 EXHIBIT A Page 9 of 32 EXHIBIT A Page 10 of 32 EXHIBIT A Page 11 of 32 EXHIBIT A Page 12 of 32 EXHIBIT A Page 13 of 32 EXHIBIT A Page 14 of 32 EXHIBIT A Page 15 of 32 EXHIBIT A Page 16 of 32 EXHIBIT A Page 17 of 32 EXHIBIT A Page 18 of 32 EXHIBIT A Page 19 of 32 EXHIBIT A Page 20 of 32 EXHIBIT A Page 21 of 32 EXHIBIT A Page 22 of 32 EXHIBIT A Page 23 of 32 EXHIBIT A Page 24 of 32 EXHIBIT A Page 25 of 32 EXHIBIT A Page 26 of 32 EXHIBIT A Page 27 of 32 EXHIBIT A Page 28 of 32 EXHIBIT A Page 29 of 32 EXHIBIT A Page 30 of 32 EXHIBIT A Page 31 of 32 EXHIBIT A Page 32 of 32 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-875 Agenda Date:9/26/2018 Version:3 Item #:5d. Resolution accepting up to $850,000 in donation funds from Genentech to be used as an incentive to ProVen Management, Inc. for opening the South Airport Boulevard Bridge to traffic prior to November 16, 2018. WHEREAS,the City Council authorized a construction contract with ProVen Management,Inc.on December 13, 2017 for the South Airport Boulevard Bridge Replacement Project; and WHEREAS,closure of the South Airport Boulevard bridge associated with the South Airport Boulevard Bridge Replacement Project has temporarily removed a critical arterial from the city’s transportation network; and WHEREAS, traffic congestion has significantly increased in the southeast quadrant of the City; and WHEREAS, increased commute times and access to businesses has negatively impacted the community; and WHEREAS,Genentech staff engaged the City,exploring potential solutions to minimize the impacts of the Bridge closure to the residents and surrounding businesses; and WHEREAS,Genentech is offering up to $850,000 to fund incentive payments to Proven Management,Inc.to encourage accelerated completion of the project, in accordance with the schedule in the attached Exhibit A. NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby accepts a donation of up to $850,000 from Genentech to fund any incentive payments to ProVen Management,Inc.for opening the South Airport Boulevard bridge to traffic prior to November 16, 2018. BE IT FURTHER RESOLVED that the City Council of the City of South San Francisco authorizes the Finance Department to establish the project budget in accordance with the accompanying staff report,including the changes contained in budget amendment 19.014. BE IT FURTHER RESOLVED,that the City Manager is hereby authorized to execute,any necessary documents on behalf of the City to carry out the intent of this resolution,subject to approval as to form by the City Attorney. ***** City of South San Francisco Printed on 9/27/2018Page 1 of 1 powered by Legistar™ Exhibit A City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-556 Agenda Date:9/26/2018 Version:1 Item #:6. Report regarding a resolution approving a consultant services agreement with Kimley-Horn and Associates of Oakland,California for the Adaptive Traffic Control System Project (Project No.tr1901)in an amount not to exceed $1,996,900 for a total budget of $2,500,000,and authorizing the City Manager to execute the agreement. (Richard Cho, Principal Engineer) RECOMMENDATION It is recommended that the City Council adopt a resolution approving a consultant services agreement with Kimley-Horn and Associates of Oakland,California for design services for the Adaptive Traffic Control System Project (Project No.tr1901)in an amount not to exceed $1,996,900 for a total budget of $2,500,000, and authorizing the City Manager to execute the agreement. BACKGROUND/DISCUSSION To help relieve congested corridors throughout the City,it is proposed to implement a citywide adaptive traffic control system (ATCS).The proposed ATCS is a demand responsive system that will optimize the performance of the roadway network.The ATCS will also give the City the ability to prioritize throughput on designated street corridors,select the optimal signal cycle length,provide smooth traffic flow along a coordinated street corridor,distribute signal phase times in an equitable fashion,manage the length of vehicular queues,and actively adapt to changing traffic conditions. Currently,during peak commute periods,traffic on major thoroughfares within the City experience heavy congestion and long delays.The City continuously receives complaints regarding commute traffic during peak periods.The majority of complaints stem from commuters entering and exiting the biotech industrial areas east of US Highway 101 who use Oyster Point Boulevard.In order to address this issue,the City has decided to prioritize this ATCS deployment to the east of US Highway 101 as Phase I.This phase of the project will address the corridor on Oyster Point Boulevard between Airport and Marina Boulevards and then other intersections to the east of US Highway101 (attachment 1).The queuing on City streets east of US Highway 101 grows longer as new facilities open over the past few months.The congestion will only get worse if there is no proactive optimized signal timing.Subsequent phases will address additional streets west of US Highway 101 thereby optimizing traffic operations of the entire City. The purpose of this project is to develop a centralized control system for all traffic signal optimize performance of the network.The system will have the capability to adjust to live traffic conditions and allow for better signal coordination to and from US Highway 101 and across the City.This new ATCS will optimize signal timing to balance performance benefits for safety and efficiency and ultimately provide long-term benefits in addressing overall traffic congestion. The selected design firm for this project will assess the City’s existing traffic signal infrastructure and implement their KITS /Kadence solution at signalized intersections throughout the City.In order to run the software,Kadence central system,traffic signal controllers and communication switches will need to be City of South San Francisco Printed on 9/20/2018Page 1 of 3 powered by Legistar™ File #:18-556 Agenda Date:9/26/2018 Version:1 Item #:6. software,Kadence central system,traffic signal controllers and communication switches will need to be installed.All hardware will be purchased by Kimley-Horn to ensure validation tests are completed before installation at signalized intersections.The City will then hire a separate electrical Contractor through a minor construction agreement to install necessary hardware at all locations.Upon completed hardware installations, Kimley-Horn will conduct tests again with the software fully-integrated within the ATCS.In summary,the overall scope includes the following:(1)evaluation of existing traffic signal communications network and vehicle detection system,(2)preparation of construction documents for needed upgrade and replacement of existing field elements,(3)deployment of KITS/Kadence system software and hardware,(4)configuration and integration of traffic signal controllers and network switches,(5)post-installation system fine-tuning,(6) training and documentation, and (7) system maintenance and support. Consultant Selection Process Staff issued a Request for Proposal (RFP)on October 24,2017 on the eBidboard website.Questions on the RFP from bidders were due on November 3,2017 and answers to the RFP questions were posted on the eBidboard website on November 9,2017.Final bid proposals were received on the due date of December 15,2018 from three firms:Kimley-Horn and Associates,Intelight,and Western Pacific.After reviewing the submitted proposals,two firms were interviewed on February 23,2018.The interview panelists consisted of the Director of Public Works, Public Works Maintenance Program Manager, Senior Civil Engineer, and a design consultant. Based on the qualifications submitted and the interviews,the Kimley-Horn system scored the highest and demonstrated highest value through best design and implementation expertise to complete this complex project (attachment 2).Staff recommends that Kimley-Horn and Associates be approved to perform design services for the City’s Adaptive Traffic Control System Project based upon the firm’s experience,qualified staffing,and positive work references.This selection is not based on the lowest bidder,but on highest value based on the firm’s expertise,performance and flexibility of their system,experience,and references.Upon selection as the most qualified firm,staff negotiated a fee proposal and any changes deemed necessary to obtain a reasonable cost for the scope of work. The City has prepared an agreement for the consultant for an initial term of October 1, 2018 to June 30, 2019. The following is a summary score of the proposals: Score Kimley Horn of Oakland, California 212 Intelight, Tucson, Arizona 187 Western Pacific Withdrew FISCAL IMPACT This project is funded by the East of 101 Traffic Impact Fees,and the project is included in the City of South San Francisco’s Fiscal Year 2018-19 Capital Improvement Program (Project No.tr1901)with sufficient funds allocated to cover the project cost. The project budget is: Kimley Horn Agreement $1,996,900 City of South San Francisco Printed on 9/20/2018Page 2 of 3 powered by Legistar™ File #:18-556 Agenda Date:9/26/2018 Version:1 Item #:6. Contingency (25%)$ 503,100 Total Project Budget $2,500,000 Kimley-Horn will provide all professional design services and purchase all materials/equipment from a manufacturer/distributor for implementing the Kadence adaptive system.The cost associated with installation of field elements will be done by a third-party electrical contractor.A minor construction contract will be procured and administered by the City. The contingency will be used for any additional costs related to any changed field conditions that may be identified during the course of implementation of this project.There are no Disadvantaged Business Enterprise (DBE) requirements since no federal funds are being utilized on the project. CONCLUSION Staff recommends approving an agreement with Kimley-Horn of Oakland,California based on their qualifications,experience,references and understanding of the project.Approval of the attached resolution will authorize the City Manager to execute the agreement with Kimley-Horn on behalf of the City for design of the Adaptive Traffic Control Systems Project. Attachments: 1.Vicinity Map 2.Interview Evaluation Score Sheet 3.Fee Breakdown 4.Kimley-Horn Profile and Project Team Sheet 5.Examples of Projects Similar to the Subject Project City of South San Francisco Printed on 9/20/2018Page 3 of 3 powered by Legistar™ Proposal forAdaptive Traffic Control System Project City of South San Francisco | TCIT85022.17 1 Existing SIC Existing Fiber Optic Cable Future Fiber Optic Cable (CCAG Smart Corridors Project) Existing City Traffic Signals (Controllers upgraded on CCAG project) Existing City Traffic Signals (Controllers upgraded on ATCS project) Caltrans Traffic Signal LEGEND Sister Ci t i e s B l v d Oyster Point Blvd Forbes BlvdEccles AveHarbor WyE Grand Ave Utah Ave CT CTS A i rp o r t B l vdS Linden AveAirport BlvdDNA WayGateway Blvd 380 101 Attachment 1 - Vicinity Map Attachment 2 ‐ Interview Evaluation Score Sheet Adaptive Traffic Control System Project Firm Name Western Pacific Kimley‐Horn Intelight Criteria for Interview Rater 1 Rater 2 Rater 3 Rater 4 Total Rater 1 Rater 2 Rater 3 Rater 4 Total Rater 1 Rater 2 Rater 3 Rater 4 Total San Mateo County Smart Corridor Project is being implemented. We expect our new adaptive system to coordinate with the smart corridor project. Describe how your system will interface and adaptively change signal timing in coordination with the Smart Corridor project? WITHDREW PROPOSAL 0 10 10 9 10 39 9 7 8 6 53 Describe lessons learned on previous installations. Based on your lessons learned, what would you recommend we include in our installation? 0 9 9 9 9 36 9 8 8 8 48 We expect multiple departments (operations, maintenance, PD), and multiple agencies to access data from the new system. Describe how your system can be setup so multiple users inside and outside the City can access your system interface and/or data outputs? 0 9 8 9 9 35 8 8 8 8 33 How does your system respond and recover from EVP, TSP, Bike and Ped activation? 0 8 7 8 10 33 8 8 8 8 28 How often will you upgrade your system (software/firmware)? What protocols will you follow to coordinate with the agencies involved? 0 9 9 8 9 35 9 7 8 5 18 What is your approach for the implementation of 100 Signals? 0 9 8 9 8 34 8 8 8 7 21 Total 0 54 51 52 55 212 51 46 48 42 187 KIMLEY-HORN AND ASSOCIATES INC., COST PROPOSAL FOR SOUTH SAN FRANCISCO ADAPTIVE TRAFFIC SIGNAL SYSTEM PROJECT Item #Description Scope of Work Task(s)Quantity Unit Unit Price Extended Price (a) KH Fee Extended Price (b) Equipment Cost Total Extended Price 1 Project Management Task 1 1 LS 50,000$50,000$50,000$ 2 Detection Evaluation Task 2, Task 3 100 EA 455$45,500$45,500$ 3 Communications System Evaluation Task 2, Task 3 100 EA 150$15,000$15,000$ 4 Plans, Specifications, and Estimate (PS&E)Task 4 1 LS 200,000$200,000$200,000$ 5a Purchase and Configure Kadence Central System Hardware Task 5 1 LS 50,000$50,000$50,000$ 5b Purchase and Configure Kadence Central System Hardware (Equipment Cost)Task 5 1 LS 27,500$-$27,500$27,500$ 6 Deploy and Configure City-wide KITS Software - FREE Task 5 1 LS -$-$-$ 7-1 Kadence Software License Fee (Signals #1 - 33)Task 5 33 EA 3,800$125,400$125,400$ 7-2 Kadence Software License Fee (Signals #34 - 100)Task 5 67 EA 1,900$127,300$127,300$ 8a Purchase, Configure, and Integrate Traffic Signal Controllers w/ D4 Firmware Task 6 100 EA 2,220$222,000$222,000$ 8b Purchase, Configure, and Integrate Traffic Signal Controllers w/ D4 Firmware (Equipment Cost)Task 6 100 EA 2,900$-$290,000$290,000$ 9a Purchase, Configure, and Integrate Communications Switches Task 6 100 EA 1,000$100,000$100,000$ 9b Purchase, Configure, and Integrate Communications Switches (Equipment Cost)Task 6 100 EA 1,800$-$180,000$180,000$ 10 Configure, Calibrate, and Fine-tune Kadence Signals Task 6 100 EA 4,242$424,200$424,200$ 11 Training and Documentation Task 7 1 LS 15,000$15,000$15,000$ 12 Maintenance and Support - 5 years Task 8 5 YR 25,000$125,000$125,000$ 1,499,400$497,500$1,996,900$ Notes: (a) Fees for work that will be completed by Kimley-Horn professional staff - this includes professional services, software license fees, and other direct costs (b) Cost of materials/equipment that Kimley-Horn will purchase from a manufacturer/distributor for use implementing the Kadence adaptive system *Cost of installation of field elements will be done by a third-party construction contractor. Construction contract will be procured and administered by the City. Installaiton costs will be determined at time of contract award. CONTRACT TOTAL Updated: 9/9/2018 City of South San Francisco | TCIT85022.17 31 2. Staff Qualifications Kimley-Horn Overview Kimley-Horn has the breadth of expertise and depth of staff to manage and deliver projects similar to the City of South San Francisco’s Adaptive Traffic Control System project. Founded as a traffic and transportation engineering firm over 50 years ago, Kimley-Horn has grown and diversified under employee ownership to its present size of more than 3,000 employees in over 80 offices nationwide. Kimley-Horn’s project managers are backed by the resources and talents of a nationally-ranked organization comprised of creative and results-oriented engineers, planners, environmental specialists, and technicians. With offices located throughout the nation, our staff uses the latest technology and information to achieve successful results for our clients. Our project managers serve as the primary liaison to clients and, with the support of our proficient and responsive technical and administrative staff, consistently meet the needs and exceed the expectations of our clients. Kimley-Horn currently has over 100 practicing intelligent transportation systems (ITS) engineers with 30 software engineers and computer scientists working exclusively on software applications and the KITS suite. Kimley-Horn and our KITS/Kadence team is proud of our growth over the years and the reputation we have built for delivering high-quality software solutions and meeting challenging project needs. Since 1992, we have not only expanded our client base, but also have experienced substantial growth in both project complexity and use of new technologies. Organizational Chart Organizational chart depicting names and roles of the project team is shown below. Our team members will be committed to the project through its duration and to its successful completion. Project Manager Kwasi Akwabi, P.E.* City Project Manager Richard Cho, P.E. QA/QC Kevin Aguigui, C.E., E.E., T.E., CSEP* Principal-in-Charge Randy Durrenberger, P.E.* Communications and Detection System Design Kwasi Akwabi, P.E.* Ryan Dole, P.E.* Joe Arroyo, EIT Tanya Welch Kadence Software Development and Deployment Doug Gettman, Ph.D.* Frank Nguyen, CCNA, CCNP* Seth Searle Stewart Allen Kadence Configuration and Calibration Brian Sowers, P.E*. Shawn Rainey, P.E. Rana Abdel-Sattar, EIT Field Equipment Deployment and System Integration Matt Wages, P.E.* Brian Sowers, P.E*. Brendan Pittman, EIT *Task Lead/Key Staff 32City of South San Francisco | TCIT85022.17 Kwasi Akwabi, P.E. Project Manager Kwasi is a transportation and communications systems engineer specializing in the planning and design of ITS, traffic management systems, TMCs and Operations Control Centers, and implementation of traffic signal systems and adaptive traffic control systems. His experience includes design and deployment of several adaptive traffic signal systems throughout northern and southern California, including the KITS adaptive signal system application, Kadence, as well as software development on Kimley-Horn’s KITS traffic signal system. Relevant Experience • Sand Hill Road Traffic Signal Interconnect Adaptive Coordination Project Design Service (Kadence Deployment), Menlo Park, CA – Project Manager • C/CAG, San Mateo County Smart Corridors Project, Incident Response and Arterial Traffic Signal Coordination, San Mateo, CA – Project Engineer • Wilson Way Traffic Adaptive System, Stockton, CA – Lead Design Engineer • Grant Road Adaptive Traffic Signal System, Mountain View, CA – Lead Design Engineer • March Lane Adaptive Traffic Control System, Stockton, CA – Lead Design Engineer • Owner’s Agent for Procurement of Adaptive Traffic Control System for the Ocean Street Traffic Adaptive System, Santa Cruz, CA – Project Engineer • Los Angeles County KITS, Los Angeles County, CA – Project Engineer • Alameda CTC, I-80 Integrated Corridor Mobility (ICM) Project, Alameda/Contra Costa Counties, CA – Project Engineer • AC Transit District, Line 51 Corridor Delay Reduction and Sustainability Project, Alameda/ Berkeley/Oakland, CA – Project Engineer • AC Transit East Bay BRT, Oakland, CA – Project Engineer • Homestead Road Traffic Signal Interconnect, Santa Clara, CA – Analyst • De La Cruz Boulevard, El Camino Real, and Scott Boulevard Traffic Signal Interconnect and Coordination Project, Santa Clara, CA – Analyst • San Mateo Smart Corridor/Alternate Route Plan, San Mateo, CA – Analyst • MTC Program for Arterial System Synchronization (PASS) 2010, 2011/12, 2012/13, 2013/14 and 2014/15, Bay Area, CA – Project Engineer • Fair Oaks Avenue and Wolfe Road Interconnect System, Sunnyvale, CA – Project Engineer • Fresno Area Express (FAX), Fresno BRT Design, Fresno, CA – Analyst Professional Credentials • Bachelor of Science, Civil Engineering, University of California, Davis • Professional Engineer in California, #73863 Resumes 33City of South San Francisco | TCIT85022.17 Kevin Aguigui, P.E., T.E., E.E., CSEP QC/QA With 26 years of experience, Kevin is a technical specialist in the evaluation, design, and implementation/integration oversight of ATCS and ITS networks. He has evaluated and designed the implementation of numerous adaptive control system software packages including participation in the TRB A318 committee on adaptive systems. Kevin has served as a technical specialist for numerous municipalities interfacing directly with traffic system manufacturers and integrators. Relevant Experience • Sand Hill Road Traffic Signal Interconnect Adaptive Coordination Project Design Services, Menlo Park, CA – Principal-in-Charge • Line 97 Kadence Adaptive System Design and Implementation, Alameda County, CA – Principal-in-Charge • Adaptive Control System (Santa Clara County), Sunnyvale, CA – Project Manager • Adaptive Traffic Signal System, Walnut Creek, CA – Project Manager • Wilson Way Traffic Adaptive System, Stockton, CA – Project Manager • Grant Road Adaptive Traffic Signal System, Mountain View, CA – Project Manager • Ocean Street Traffic Adaptive System, Santa Cruz, CA – Project Manager • Santa Clarita Adaptive Traffic Control System, Santa Clarita, CA – Project Manager • Adaptive Traffic Control System, Diamond Bar, CA – Project Engineer • Alameda CTC, I-80 Integrated Corridor Mobility (ICM) Project, Alameda/Contra Costa Counties, CA – QC/QA Reviewer • East Bay Bus Rapid Transit, Program Management and Construction Management Support Services, Oakland, CA – Kimley-Horn Project Manager • AC Transit Video Surveillance System, Alameda/Contra Costa Counties, CA – Project Engineer • Alameda SMART Corridors Program, Alameda/Contra Costa Counties, CA – Project Engineer • ITS and Fiber Optic Network Designs, Santa Clara, CA – Project Manager • Four Corridors Traffic Signal and Communications Assessment, Sacramento, CA – Project Manager • Bay Area ITS Architecture Update, Bay Area, CA – Team Member • MTC, San Francisco Bay Area 511 Regional Real-Time Transit Arrival/Departure Information System, San Francisco Bay Area, CA – Project Manager • MTC, San Francisco Bay Area Regional Transit Information System Technical Assistance/Systems Engineering, San Francisco Bay Area, CA – Project Manager Professional Credentials • Bachelor of Science, Civil Engineering, University • of Hawaii • Certificate with Distinction, Telecommunications and Network Engineering, UC Berkeley Extension • Professional Electrical Engineer in California #19888 • Professional Civil Engineer in California #C48732 • Professional Traffic Engineer in California #1781 • Certified Systems Engineering Professional (CSEP) #00156 34City of South San Francisco | TCIT85022.17 Randy Durrenberger, P.E. Principal-in-Charge Randy is a senior transportation engineer with 23 years of experience in the planning, design, testing, and implementation of freeway and arterial-based ITS projects. He has managed the development and delivery of several major freeway management systems and arterial improvement projects involving all facets of a project from planning to implementation. His experience includes planning (ITS strategic plans, system architecture, communications master plans, implementation plans), design (communications, conduit and cable, plan sets, general traffic, and field device locations), specifications (signal system, ITS devices), and field coordination of multiple contractors on various phases of implementation. Randy has managed arterial projects including traffic signal interconnect, transit signal priority, bus stop enhancements, queue jump lanes, and corridor surveillance. Relevant Experience • San Mateo County KITS/City of Menlo Park Kadence, San Mateo County, CA – Principal-in-Charge and QA/QC • Alameda CTC, I-80 Integrated Corridor Mobility (ICM) Project, Alameda/Contra Costa Counties, CA – Project Manager • AC Transit District, Line 51 Corridor Delay Reduction and Sustainability Project, Alameda/Berkeley/Oakland, CA – Project Manager • AC Transit East Bay BRT, Oakland, CA – QC/QA Reviewer • BAIFA (MTC), I-880 Express Lane Electrical and ITS Design, Bay Area, CA – Project Manager • MTC, Regional Express Lane Network Electronic Toll Services System Manager and Backhaul Communications Network Design, San Francisco Bay Area, CA – Project Engineer • Oakland, Hegenberger-Coliseum ITS Infrastructure Design, Oakland, CA – Project Manager • Oakland, Integrated Transportation Network Design, Oakland – Project Manager • Rancho Cordova, Technical Design Services for ITS Infrastructure Design Improvements, Rancho Cordova, CA – Project Engineer • Silicon Valley ITS West Corridor Project, Silicon Valley, CA – Project Manager • Silicon Valley ITS Fremont/Milpitas Project, Fremont/Milpitas, CA – Project Engineer • Caltrans, Connected Corridors (aka ICM) Program and Corridor System Management/ Operations Pilot Project, Statewide, CA – Project Engineer, QC/QA Reviewer • MTC, ITS/511 Technical Advisor Services - Regional Active Traffic Management Assessment, Regional Communications Infrastructure Plan, Regional Data Collection Plan, 511 Contractor Oversight, Bay Area, CA – Project Manager • SFCTA, ATM Feasibility Assessment and Technical Support, San Francisco – Project Manager • Shasta County Regional Transportation Planning Agency, Data Collection Plan, Shasta County, CA – Project Manager Professional Credentials • Master of Science, Civil Engineering, University of Texas, Austin • Bachelor of Science, Civil Engineering, University of Minnesota • Professional Engineer in California #65157 • Professional Engineer in Nevada #13989 • Professional Engineer in Minnesota #50191 35City of South San Francisco | TCIT85022.17 Doug Gettman, Ph.D. Kadence Software Development and Deployment Task Lead Dr. Gettman has 24 years of experience in adaptive traffic control, ITS management software (central and field controller), and transportation system modeling and simulation. He has developed, deployed, integrated, and supported ASCT systems for cities, counties, and state DOTs across North America including California, Arizona, Florida, Texas, Michigan, Ontario, Ohio, and Nevada. Dr. Gettman has been the principal investigator on five significant FHWA programs including ACSLITE, Surrogate Measures of Safety Software, and NCHRP 03-90 operation of traffic signal systems in oversaturated conditions. Dr. Gettman is author or co-author of over 25 peer-reviewed research papers and FHWA reports. Relevant Experience • San Mateo County KITS/City of Menlo Park Kadence, San Mateo County, CA – Project Manager • Line 97 Kadence Adaptive System Design and Implementation, Alameda County, CA – Project Engineer • San Jose Adaptive Traffic Control System, San Jose, CA – Project Engineer • City of Mesa Kadence Adaptive Traffic Control System, Mesa, AZ – Project Manager • City of Austin KITS and Kadence, Austin, TX – Project Manager (Kadence) • FHWA Adaptive Control to Balance Safety and Efficiency: Phase II – Kadence, Nationwide – Co-Principal Investigator • FHWA Measures of Effectiveness and Performance Evaluation Procedures to Validate Traffic Signal Operational Objectives, Nationwide – Principal Investigator • FHWA Adaptive Control to Balance Safety and Efficiency: Phase I, Nationwide — Co- Principal Investigator • City of Surprise KITS, Surprise, AZ – Project Engineer • City of Glendale KITS, Glendale, AZ – Project Engineer • Maricopa County KITS, Maricopa County, AZ – Project Engineer • Arizona E-IntelliDrive Dynamic Routing and Situational Awareness Concept of Operations, Statewide, AZ – Project Manager • NCHRP 03-90: Operation of Traffic Control Systems in Oversaturated Conditions, Nationwide – Principal Investigator • City of Windsor KITS Oversaturated Intersection Management Software Deployment, Windsor, ON – Project Manager • FHWA Adaptive Control System – Lite, Nationwide – Principal Investigator • Miami-Dade County KITS Signal System Deployment, Miami-Dade County, FL – Project Manager Professional Credentials • Doctor of Philosophy, Systems and Industrial Engineering (Transportation Engineering Minor), University of Arizona • Master of Science, Systems Engineering, University of Arizona • Bachelor of Science, Systems Engineering, University of Arizona • Vice-Chair, ITE TSM&O Council • Member, Transportation Research Board (TRB), Automated Transit Committee • Member, V2I Deployment Coalition (ITE) 36City of South San Francisco | TCIT85022.17 Brian Sowers, P.E. Field Equipment Deployment and System Integration; Kadence Configuration and Calibration Brian is a professional civil engineer and project manager who specializes in signal timing (over 3,000 signals), signal design, signal interconnect design, signal system design and evaluation, signing and striping design, street lighting design, traffic impact studies, and analysis and design for ITS. Brian’s Bay Area signal timing experience in the past 20 years is unmatched. Brian serves as project manager for Kimley-Horn under the PASS program and was project manager under the former MTC Regional Signal Timing Program (RSTP) for each cycle that the program existing. Prior to the RSTP program, Brian worked with MTC as a project manager under the Traffic Engineering Technical Assistance Program (TETAP) program. He has experience with numerous traffic operations computer programs, including Synchro, VISSIM, Transyt-7F, HCS, CORSIM©, and PASSER. He has served as an instructor for training courses in the Synchro signal timing and CORSIM© simulation software for the Oregon DOT; Caltrans; the cities of San Jose, Campbell, Antioch, Berkeley; as well as agencies in the Phoenix and San Diego areas. His project management experience includes signal operations projects for over 40 agencies in the Bay Area. Relevant Experience • Sand Hill Road Traffic Signal Interconnect Adaptive Coordination Project Design Services, Menlo Park, CA – QC/QA Reviewer • Line 97 Kadence Adaptive System Design and Implementation, Alameda County, CA – Project Manager • City of San Jose Adaptive Traffic Control System, San Jose, CA – Project Manager • AC Transit District, Line 97 Kadence Adaptive System (34 signals) – Project Manager • AC Transit District, Line 51 Corridor Delay Reduction and Sustainability Project, Alameda/Berkeley/Oakland, CA – Project Engineer/Signal Timing Task Lead • C/CAG, San Mateo County Smart Corridors Project, Incident Response and Arterial Traffic Signal Coordination, San Mateo, CA – Project Manager • Alameda CTC, I-80 Integrated Corridor Mobility (ICM) Project, Alameda/Contra Costa Counties, CA – Project Engineer • San Jose VRF Signal Timing Study (123 signals), San Jose CA – Project Manager • TFCA Funded Traffic Light Synchronization Project Phase II, San Jose, CA (277 signals) – Project Manager • RSTP Signal Retiming (TLSP Phase I) and LRT Signal Priority Study, San Jose, CA (318 signals) – Project Manager • RSTP Signal Retiming Phase III and Transit Signal Priority, San Jose, CA (221 signals) – Project Manager • Re-timing Study on major arterials, San Jose, CA (83 signals) – Project Manager • Proactive Signal Timing Study, San Jose, CA (223 signals) – Project Manager • 2009 Expressways Traffic Signals Timing Project, Santa Clara County, CA (89 signals) – Project Manager Professional Credentials • Bachelor of Science, Civil Engineering, California State Polytechnic University, San Luis Obispo • Professional Engineer in California, #C60296 • Former Instructor for U.C. Berkeley’s Institute of Transportation Studies “Advanced Traffic Signal Operations” Course • Institute of Transportation Engineers, Member • Former Chair of MTC Arterial Operations Committee 37City of South San Francisco | TCIT85022.17 Matt Wages, P.E. Field Equipment Deployment and System Integration Matt is a transportation engineer with more than nine years of experience in traffic signal design, signal timing, and roadway design projects. His signal timing experience includes data collection, development of Synchro models, and analyses of potential cycle lengths. Matt has experience providing signal controller conversion and signal integration services for D4 controllers, including projects in San Mateo County and the cities of Stockton and Sacramento. Matt has worked on several design projects in which he was involved in data collection, creation of CADD plans, and signal and interconnect designs. Matt is proficient in the latest versions of AutoCAD, MicroStation, Synchro, and Highway Capacity Software. Relevant Experience • San Mateo County KITS/City of Menlo Park Kadence, San Mateo County, CA – Project Engineer • Line 97 Kadence Adaptive System Design and Implementation, Alameda County, CA – Project Engineer • C/CAG, San Mateo County Smart Corridors Project, Incident Response and Arterial Traffic Signal Coordination, San Mateo, CA – Analyst • San Mateo Smart Corridor/Alternate Route Plan, San Mateo, CA – Analyst • March Lane Adaptive Traffic Control System, Stockton, CA – Project Engineer • Wilson Way Traffic Adaptive System, Stockton, CA – Analyst • Grant Road Adaptive Traffic Signal System, Mountain View, CA – Analyst • AC Transit District, Line 51 Corridor Delay Reduction and Sustainability Project, Alameda/ Berkeley/Oakland, CA – Project Engineer • Alameda CTC, I-80 Integrated Corridor Mobility (ICM) Project, Alameda/Contra Costa Counties, CA – Analyst • San Jose VRF Signal Timing Study (123 signals), San Jose CA – Project Engineer • Capitol Expressway ITS Infrastructure and Sidewalk Project, Santa Clara County, CA – Project Engineer • Homestead Road Traffic Signal Interconnect, Santa Clara, CA – Analyst • De La Cruz Boulevard, El Camino Real, and Scott Boulevard Traffic Signal Interconnect and Coordination Project, Santa Clara, CA – Analyst • MTC Program for Arterial System Synchronization (PASS) 2010, 2011/12, 2012/13, 2013/14 and 2014/15, Bay Area, CA – Project Engineer • Fair Oaks Avenue and Wolfe Road Interconnect System, Sunnyvale, CA – Project Engineer • Design of Traffic Signals along Manuel Campos Parkway, Fairfield, CA – Analyst • Cupertino Fiber Optic Design, Cupertino, CA – Analyst Professional Credentials • Bachelor of Science, Civil Engineering, California Polytechnic State University, San Luis Obispo • Professional Engineer in California #82548 38City of South San Francisco | TCIT85022.17 Ryan Dole, P.E. Communications and Detection System Design Ryan is a professional engineer with more than 10 years of hands-on technical design and management experience in many areas of electrical, lighting, and security systems. He has led the design of roadway lighting for arterials and freeways, safety and intersection lighting, pedestrian pathway lighting, and parking lot lighting. His lighting systems experience includes performing photometric lighting calculations, lighting control systems including adaptive controls, voltage and electrical load calculations, technical specification development, and conduit and conductor infrastructure. Ryan’s recent communication and security system design experience includes the expansion of the Port of Oakland’s intrusion detection system which upgraded cameras and installed over 17 miles of fiber optic communications infrastructure. Relevant Experience • Sand Hill Road Traffic Signal Interconnect Adaptive Coordination Project Design Service (Kadence Deployment), Menlo Park, CA – Project Engineer • AC Transit District, Line 51 Corridor Delay Reduction and Sustainability Project, • Alameda/Berkeley/Oakland, CA – Project Engineer • AC Transit East Bay BRT, Oakland, CA – Project Engineer • Alameda CTC, I-80 Integrated Corridor Mobility (ICM) Project, Alameda/Contra Costa Counties, CA – Analyst • Wilson Way Traffic Adaptive System, Stockton, CA – Project Engineer • Grant Road Adaptive Traffic Signal System, Mountain View, CA – Project Engineer • Rancho Cordova, Technical Design Services for ITS Infrastructure Design Improvements, Rancho Cordova, CA – Project Engineer • C/CAG, San Mateo County Smart Corridors Project, Incident Response and Arterial Traffic Signal Coordination, San Mateo, CA – Analyst • 511 Program, Regional Transit Information System (RTIS) aka 511-Transit Trip Plan, Oakland, San Francisco Bay Area, CA – Project Engineer • Homestead Road and Kiely Boulevard Traffic Signal Interconnect and Coordination, Santa Clara, CA – Project Engineer • I-80/I-680/I-780 Corridors Highway Operations Implementation Study (Solano Operations Study), Solano County, CA – Analyst • Milpitas Traffic Signal Interconnect PS&E, Milpitas, CA – Analyst • MTC, San Francisco Bay Area 511 Regional Real-Time Transit Arrival/Departure Information System, San Francisco Bay Area, CA – Analyst • Oakland Intelligent Transportation System (ITS) Strategic Plan Update, Oakland, CA – Project Engineer • Regional Express Lane Network Phase 1- I-880/I-680/SR 84/SR 92 On-Call PS&E Design Services, San Francisco County, CA – Project Engineer • Santa Clara, Benton St. at Pomeroy Ave. Intersection Improvements and Signal Interconnect Project aka Traffic Signal Modification/Pedestrian Safety, Santa Clara, CA – Project Engineer • VTA Ramp Metering Study (including Northbound & Southbound SR 87 and Southbound SR 85 Freeway Operations Analysis), Santa Clara County, CA – Project Engineer Professional Credentials • Bachelor of Science, Civil Engineering, California Polytechnic State University, San Luis Obispo • Professional Engineer in California #75749 39City of South San Francisco | TCIT85022.17 Frank Nguyen, CCNA, CCNP Kadence Software Development and Deployment Frank has over 12 years of experience supporting product integration activities of multiple software components as well as experience in the field of Enterprise LAN and WAN IP Networks. Application development and services include custom MSI packaging from development to deployment and application virtualization with web based process management. His experience includes writing programs to streamline and automate application deployment and maintenance. Frank is an expert in the implementation of Microsoft and Cisco standards having created numerous optimal network infrastructures and implementations on an enterprise level. Relevant Experience • San Mateo County KITS Smart Corridor ATMS – Systems Engineer • Culver City KITS, Culver City, CA – Systems Engineer • AC Transit Line 51 Corridor Delay and Reliability System Enhancements, Ethernet Configuration, Alameda County, CA – Technical Support • Signal Timing System Programming, Oakland, CA – Network Engineer • Santa Clara Traffic Video Management System, Santa Clara, CA – Technical Support • SR 91 Project Report and Environmental Document, Various Counties, CA – Systems Engineer • Alameda Corridor East Construction Authority, Fullerton Road Grade Separation PS&E, City of Industry, CA – Systems Engineer • Hawthorne Airport Improvements, Hawthorne, CA – Field Representative Professional Credentials • Bachelor of Science, Computer Engineering, University of California, Irvine • Cisco Certified Network Associate #CSCO11823916 • Cisco Certified Network Professional #CSCO11823916 40City of South San Francisco | TCIT85022.17 Seth Searle Kadence Software Development and Deployment Seth is an electrical engineering analyst with experience in software verification, validation, and integration and testing. His experience includes manual and automated software test procedure generation, creation of software installation packages, software version control, creating help file documentation, and generating and exercising acceptance test procedures. Seth has programming and software experience on multiple projects, including Mesa Kadence. He applies his role on all software projects for the ITS technology team including: Los Angeles County KITS, City of Austin ATMS, Miami-Dade County KITS, Philadelphia KITS, Maricopa County KITS, City of Glendale KITS, and Park+. His specific project experience includes testing a wide array of software packages; building software installation files; merging, testing, and verifying new software builds; and compiling integrated help files. Seth has built flexible installation packages for large-scale distributed software applications as well as small-scale, single-user applications. He has also implemented and maintained an integrated help system that is built into the ATMS. Relevant Experience • Moreno Valley Transportation Management Center Software (KITS), Moreno Valley, CA – Systems Analyst • San Mateo County KITS® Smart Corridor ATMS, San Mateo County, CA – Systems Analyst • City of Menlo Park, Sand Hill Road Traffic Signal Interconnect Adaptive Coordination Project Design Services, Menlo Park, CA – Systems Analyst • San Dimas KITS, San Dimas, CA – Systems Analyst • City of Mesa, Kadence Adaptive System, Mesa, AZ – Systems Analyst • Arizona DOT, City of Surprise Signal System Software (KITS), Surprise, AZ – Systems Analyst • Austin Advanced Traffic Management System (KITS), Austin, TX – Systems Analyst • Implementation, Testing, and Guidance on the Validation of Operational Objectives for Adaptive Signal Control Systems Technology, Various Locations, US – Systems Analyst • Bell Road Adaptive Signal Control Technology (ASCT) Deployment, AZ – Systems Analyst • Grant Road/Oracle Road Indirect Left Turn Intersection and Signal Design, Tucson, AZ – Systems Analyst • MCDOT Advanced Traffic Management System (ATMS), Phoenix, AZ –Systems Analyst • The Railyards (Sacramento Railyards), Sacramento, CA – Systems Analyst Professional Credentials • Bachelor of Science, Electrical Engineering, University of Arizona 41City of South San Francisco | TCIT85022.17 Stewart Allen Kadence Software Development and Deployment Seth is an electrical engineering analyst with experience in software verification, validation, and integration and testing. His experience includes manual and automated software test procedure generation, creation of software installation packages, software version control, creating help file documentation, and generating and exercising acceptance test procedures. Seth has programming and software experience on multiple projects, including Mesa Kadence. He applies his role on all software projects for the ITS technology team including: Los Angeles County KITS, City of Austin ATMS, Miami-Dade County KITS, Philadelphia KITS, Maricopa County KITS, City of Glendale KITS, and Park+. His specific project experience includes testing a wide array of software packages; building software installation files; merging, testing, and verifying new software builds; and compiling integrated help files. Seth has built flexible installation packages for large-scale distributed software applications as well as small-scale, single-user applications. He has also implemented and maintained an integrated help system that is built into the ATMS. Relevant Experience • San Mateo County KITS Smart Corridor ATMS, San Mateo County, CA – Analyst • Los Angeles County KITS, Los Angeles County, CA – Systems Analyst • Moreno Valley Transportation Management Center Software (KITS), Moreno Valley, CA – Systems Engineer • City of Austin KITS and Kadence, Austin, TX – Systems Engineer (Kadence) • City of Surprise Signal System Software (KITS), Surprise, AZ – Systems Analyst • Washtenaw County KITS, Washtenaw County, MI – Systems Engineer • Windsor Traffic Control System - KITS, Windsor, ON – Analyst • City of Mesa Kadence Adaptive Traffic Control System, Mesa, AZ – Systems Engineer • NDOT FAST I-15 ATM System Implementation, NV – Systems Engineer • FHWA Adaptive Control to Balance Safety and Efficiency: Phase II, Nationwide – Analyst • Implementation, Testing, and Guidance on the Validation of Operational Objectives for Adaptive Signal Control Systems Technology, Various Locations, US – Project Engineer • MCDOT ATMS, Phoenix, AZ – Analyst • Miami-Dade ATMS Project, Miami-Dade County, FL – Task Manager Professional Credentials • Master of Science, Systems Architecting and Engineering, University of Southern California • Bachelor of Science, Systems Engineering, University of Arizona City of South San Francisco | TCIT85022.17 42 3. Recent Experience and Completed Projects Kimley-Horn has worked on the development, evaluation, design, installation, deployment, and implementation of over 50 ATCS systems across the nation in almost all 50 states. The Kadence system was developed by Kimley-Horn as a suite of extensions to the core ACSLITE split and offset tuning algorithms starting in 2008. The USDOT project was completed in 2012. Since then, Kadence has been successfully deployed in three Cities, with several additional deployments to come in 2018, including three new deployments in the Bay Area; AC Transit’s Line 97 corridor through San Leandro and Hayward, City of Menlo Park expansion along Sand Hill Road, and 35 traffic signals throughout San Jose. The following projects represent a sample of the Kimley-Horn team’s relevant experience with projects of similar scale and complexity. We are proud of our working relationship with our clients and much of our success over the last 50 years is directly related to our efforts to perform high-quality, timely services for all of our clients. C/CAG Smart Corridor ATMS, San Mateo County, CA Kimley-Horn is deploying and integrating over 225 traffic signals with the KITS ATMS in San Mateo County. This smart corridor traffic management system includes deployments of KITS in 10 of the 20 cities in San Mateo County in 2012-2013 including San Mateo, Belmont, Redwood City, Menlo Park, as well as Caltrans District 4. The KITS system includes the Kadence ATCS deployment in Menlo Park; future support for over 1,000 signals in San Mateo County; and over 1,500 signals managed by Caltrans District 4 throughout the Bay Area. The KITS incident detection and management module is used to identify traffic diversion from U.S. 101 onto local arterials and automatically engage incident response timing plans on the arterial streets. System fail-over and redundancy provisions are provided for multi-jurisdictional command and control. Sand Hill Road Adaptive Traffic Signal System (Kadence), Menlo Park, CA The City of Menlo Park deployed KITS/Kadence on four signals on four signals along El Camino Real, a Caltrans corridor. This project came about through a desire to provide more reliable travel time performance along Sand Hill Road, one of the City’s most vital transportation corridors. As a result, the City decided to expand the KITS/Kadence system to nine traffic signals along Sand Hill Road. The scope of the project entailed upgrade existing field communications and deploying a new fiber optic network along 1.5 miles. In addition, the project upgraded existing Model 170 traffic signal controllers to Model 2070 controllers and implemented new central to field communications equipment. City of Mesa, Kadence Adaptive System, Mesa, AZ Kimley-Horn was selected by the City of Mesa to deploy Kadence on a 19-intersection system around Fiesta Mall in West Mesa. The KITS adaptive module allows tuning of intersection splits, cycle, sequence, and Time-of-Day (TOD) schedule. Features for Measures of Effectiveness (MOEs) displays and analysis were added to Kadence, as well as a queue monitoring algorithm that allows Kadence to quickly switch to different operating strategies during congestion events, configuration of parameters by pattern, and various enhancements to the calculation of cycle lengths. City of South San Francisco | TCIT85022.17 43 City of Austin, Advanced Traffic Management System (KITS) and Kadence, Austin, TX In 2011, the City of Austin selected Kimley-Horn to provide its new ATMS. The project will support more than 1,100 intersections and interchanges throughout the City running NextPhase on 2,070 controllers over a variety of fiber, copper, and wireless interconnect. The KITS deployment includes integration of the Kadence adaptive control system for 70 intersections along I-35, center-to-center transit priority for the CapMetro BRT system, a public information web page for status and performance monitoring, closed circuit television (CCTV) integration, performance monitoring tools, and on-site integration and project management support. In 2013, Kimley-Horn configured Kadence for the City on Congress Street on four test intersections. In 2015, the City started configuring Kadence along South Lamar Street. Kimley-Horn is supporting the City in setup, configuration, installation, and tuning of Kadence operations on Lamar Street. AC Transit Line 97 Transit Performance Initiative (TPI) Adaptive Traffic Control System (ATCS), Hayward, Alameda County, & San Leandro, CA Kimley-Horn is working with AC Transit, along with Caltrans, Alameda County, the City of Hayward, and the City of San Leandro to deploy Kimley-Horn’s Kadence adaptive system at thirty-four (34) intersections along the Hesperian Boulevard corridor as part of the Line 97 project. The project is funded by the Metropolitan Transportation Commission (MTC) through the Transit Performance Initiative (TPI) and Next Generation Arterial Operations (Nexgen) programs. The AC Transit Line 97 route is 13 miles long and runs between the Bayfair BART station and the Union City BART station along Hesperian Boulevard, Union City Boulevard, Alvarado-Niles Road, and Decoto Road. The overall Line 97 project includes deploying transit signal priority (TSP) and other infrastructure and signal timing improvements at the 61 traffic signals along the entire route. The adaptive system will be deployed along a portion of the Line 97 route, to include the 34 traffic signals on Hesperian Boulevard between Thornally Drive in San Leandro and Pepsi Drive in Hayward. The corridor is primarily as six (6) divided roadway and provides direct access to SR-238, I-880, and SR-92. In addition to carrying significant commuter and local traffic, the corridor parallels I-880 for a large portion of the route, thus resulting in frequent traffic diverting to the corridor and significant volume fluctuations when incidents occur along I-880. Deployment of the Kadence adaptive system allows the signal timing to respond to the volume fluctuations along the corridor and improve overall signal operations. In addition, the adaptive system shall provide transit priority along the corridor to enhance bus operations for the Line 97 route. Kimley-Horn is responsible for furnishing, installing, integrating, and testing all software and hardware for an operational adaptive system for the project intersections. For this project, the Kadence system will operate with 2070 controllers and D4 local firmware. Also, the project will provide training and project documentation for the system. Grant Road Adaptive Traffic Signal System, Mountain View, CA Kimley-Horn provided design services to the City of Mountain View for an adaptive traffic signal system implementation along Grant Road. Tasks included preparation of an existing system evaluation, an adaptive signal system solicitation RFP, review and evaluation of the adaptive system proposals, detailed design and coordination with selected adaptive system vendor, construction support, and implementation oversight. The City selected the InSync system and deployed the system on another City corridor. Kimley-Horn completed the final bid documents on Grant Road, including plans and specifications, and conducted the before/after analysis. City of South San Francisco | TCIT85022.17 44 March Lane Adaptive Traffic Control System, Stockton, CA Kimley-Horn prepared the plans, specifications, and estimate, as well as developed systems engineering documents, for the implementation of an adaptive traffic signal system at 19 signalized intersections along March Lane in the City of Stockton, CA. The March Lane project corridor includes two Caltrans signalized intersections and 17 signalized intersections owned and operated by the City. Kimley-Horn worked with the City to coordinate with Caltrans regarding potential adaptive system options and traffic signal operations changes at their intersections. In addition, Kimley-Horn developed an adaptive system evaluation document to determine the most feasible system for the City’s needs. Project deliverables included a Concept of Operations document, a System Evaluation document, and plans, specifications, and estimates. Wilson Way Adaptive Traffic Control System, Stockton, CA This project involved 10 traffic signals including two Caltrans traffic signals along Wilson Way in the City of Stockton. Kimley-Horn prepared the needs assessment and system requirements for the City’s first traffic adaptive control system. This effort included working closely with Caltrans, who own and operate two intersections at the Highway 4 freeway interchange. Following the development of the needs and requirements, Kimley-Horn conducted a detailed evaluation of commercially available traffic adaptive control systems, and worked closely with the City and Caltrans to select the preferred traffic adaptive control system. Once selected, Kimley-Horn worked to include the adaptive system elements of the preferred system including working with the adaptive system vendor and the cabinet manufacturers to ensure the procurement documents contained the requirements for furnishing, installing, and integrating the adaptive system elements. Kimley-Horn was involved in all steps of the evaluation, planning, and detailed design in order to achieve a complete system design including provisions for non-adaptive control, should the City wish to revert to normal operations. City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-557 Agenda Date:9/26/2018 Version:1 Item #:6a. Resolution approving a consultant services agreement with Kimley-Horn and Associates of Oakland,California for the Adaptive Traffic Control System Project (Project No.tr1901)in an amount not to exceed $1,996,900 for a total budget of $2,500,000. WHEREAS,to help relieve congested corridors throughout the City,it is proposed to implement a citywide adaptive traffic control system (ATCS); and WHEREAS,the proposed ATCS is a demand responsive system that will optimize roadway network performance,select the optimal signal cycle length,distribute signal phase times in an equitable fashion, manage the length of vehicular queues, and actively adapt to changing traffic conditions; and WHEREAS,during peak commute periods,traffic on major thoroughfares within the City experience heavy congestion and long delays; and WHEREAS,the majority of commuters entering and exiting the biotech industrial areas east of US Highway 101 use Oyster Point Boulevard; and WHEREAS,the City has decided to prioritize this ATCS deployment to the east of US Highway 101 as Phase I; and WHEREAS,subsequent phases will address additional streets west of US Highway 101 thereby optimizing traffic operations of the entire City; and WHEREAS,ATCS will optimize signal timing to balance performance benefits for safety and efficiency and ultimately provide long-term benefits in addressing overall traffic congestion; and WHEREAS, staff issued a Request for Proposal (RFP) on October 24, 2017 on the eBidboard website; and WHEREAS,final proposals were received on the due date of December 15,2018 from three firms:Kimley- Horn and Associates, Intelight, and Western Pacific; and WHEREAS,based on the qualifications submitted and the interviews,the Kimley-Horn and Associates system scored the highest and demonstrated highest value through best design and implementation expertise to complete this complex project; and WHEREAS,Kimley-Horn and Associates of Oakland,California submitted a total proposal costs in the amount of $1,996,900; and NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of South San Francisco that the CityCity of South San Francisco Printed on 9/27/2018Page 1 of 2 powered by Legistar™ File #:18-557 Agenda Date:9/26/2018 Version:1 Item #:6a. NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of South San Francisco that the City Council hereby awards a consultant services agreement,a draft of which is attached hereto as Exhibit A,for the Adaptive Traffic Control System Project to Kimley-Horn and Associates of Oakland,California,in an amount not to exceed $1,996,900 conditioned on Kimley-Horn and Associates timely execution of the Project contract and submission of all required documents,including but not limited to,certificates of insurance and endorsement, in accordance with the Project documents. BE IT FURTHER RESOLVED the City Council authorizes a total Project construction budget of $2,500,000 and authorizes the City Manager to utilize unspent amount of the total Project,if necessary,towards additional construction contingency budget. BE IT FURTHER RESOLVED the City Council authorizes the Finance Department to establish the Project Budget consistent with the information contained in the staff report. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the agreement and any other related documents on behalf of the City upon timely submission by Kimley-Horn and Associates of the signed contract and all other documents, subject to approval by the City Attorney. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take any other related actions consistent with the intention of the resolution. ***** City of South San Francisco Printed on 9/27/2018Page 2 of 2 powered by Legistar™ Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 1 of 16 CONSULTING SERVICES AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND KIMLEY-HORN AND ASSOCIATES THIS AGREEMENT for consulting services is made by and between the City of South San Francisco (“City”) and Kimley-Horn and Associates (“Consultant”) (together sometimes referred to as the “Parties”) as of October 1, 2018 (the “Effective Date”). Section 1. SERVICES. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide to City the services described in the Scope of Work attached as Exhibit A, attached hereto and incorporated herein, at the time and place and in the manner specified therein. In the event of a conflict in or inconsistency between the terms of this Agreement and Exhibit A, the Agreement shall prevail. 1.1 Term of Services. The term of this Agreement shall begin on the Effective Date and shall end on June 30, 2019, the date of completion specified in Exhibit A, and Consultant shall complete the work described in Exhibit A prior to that date, unless the term of the Agreement is otherwise terminated or extended, as provided for in Section 8. The time provided to Consultant to complete the services required by this Agreement shall not affect the City’s right to terminate the Agreement, as provided for in Section 8. 1.2 Standard of Performance. Consultant shall perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged in the g eographical area in which Consultant practices its profession. Consultant shall prepare all work products required by this Agreement in a substantial, first -class manner and shall conform to the standards of quality normally observed by a person practicing in Consultant's profession. 1.3 Assignment of Personnel. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, des ires the reassignment of any such persons, Consultant shall, immediately upon receiving notice from City of such desire of City, reassign such person or persons. 1.4 Time. Consultant shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary to meet the standard of performance provided in Sections 1.1 and 1.2 above and to satisfy Consultant’s obligations hereunder. Section 2. COMPENSATION. City hereby agrees to pay Consultant a sum not to exceed $1,996,900, notwithstanding any contrary indications that may be contained in Consultant’s proposal, for services to be performed and reimbursable costs incurred under this Agreement. In the event of a conflict between this Agreement and Consultant’s proposal, attached as Exhibit A, or Consultant’s compensation schedule attached as Exhibit B, regarding the amount of compensation, the Agreement shall prevail. City shall pay Consultant for services rendered pursuant to this Agreement at the time and i n the manner set forth herein. The payments specified below shall be the only payments from City to Consultant for services Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 2 of 16 rendered pursuant to this Agreement. Consultant shall submit all invoices to City in the manner specified herein. Except as specifically authorized by City, Consultant shall not bill City for duplicate services performed by more than one person. Consultant and City acknowledge and agree that compensation paid by City to Consultant under this Agreement is based upon Consultant’s estimated costs of providing the services required hereunder, including salaries and benefits of employees and subcontractors of Consultant. Consequently, the parties further agree that compensation hereunder is intended to include the costs of contributions to any pensions and/or annuities to which Consultant and its employees, agents, and subcontractors may be eligible. City therefore has no responsibility for such contributions beyond compensation required under this Agreement. 2.1 Invoices. Consultant shall submit invoices, not more often than once per month during the term of this Agreement, based on the cost for services performed and reimbursable costs incurred prior to the invoice date. Invoices shall contain the following information: Serial identifications of progress bills (i.e., Progress Bill No. 1 for the first invoice, etc.); The beginning and ending dates of the billing period; A task summary containing the original contract amount, the amount of prior billings, the total due this period, the balance available under the Agreement, and the percentage of completion; At City’s option, for each work item in each task, a copy of the applicable time entries or time sheets shall be submitted showing the name of the person doing the work, the hours spent by each person, a brief description of the work, and each reimbursable expense; The total number of hours of work performed under the Agreement by Consultant and each employee, agent, and subcontractor of Consultant performing services hereunder, as well as a separate notice when the total number of hours of work by Consultant and any individual employee, agent, or subcontractor of Consultant reaches or exceeds eight hundred (800) hours, which shall include an estimate of the time necessary to complete the work described in Exhibit A; The amount and purpose of actual expenditures for which reimbursement is sought; The Consultant’s signature. 2.2 Monthly Payment. City shall make monthly payments, based on invoices received, for services satisfactorily performed, and for authorized reimbursable costs incurred. City shall have thirty (30) days from the receipt of an invoice that complies with all of the requirements above to pay Consultant. City shall have no obligation to pay invoices submitted ninety (90) days past the performance of work or incurrence of cost. Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 3 of 16 2.3 Final Payment. City shall pay the last ten percent (10%) of the total sum due pursuant to this Agreement within sixty (60) days after completion of the services and submittal to City of a final invoice, if all services required have been satisfactorily performed. 2.4 Total Payment. City shall pay for the services to be rendered by Consultant pursuant to this Agreement. City shall not pay any additional sum for any expense or cost wh atsoever incurred by Consultant in rendering services pursuant to this Agreement. City shall make no payment for any extra, further, or additional service pursuant to this Agreement. In no event shall Consultant submit any invoice for an amount in excess of the maximum amount of compensation provided above either for a task or for the entire Agreement, unless the Agreement is modified prior to the submission of such an invoice by a properly executed change order or amendment. 2.5 Hourly Fees. Fees for work performed by Consultant on an hourly basis shall not exceed the amounts shown on the compensation schedule attached hereto and incorporated herein as Exhibit B. 2.6 Reimbursable Expenses. The following constitute reimbursable expenses authorized by this Agreement: Licenses, permits, fees, special graphics, plan reproduction, document printing, and other miscellaneous expenses necessitated by the project will be charged. Reimbursable expenses shall not exceed $1,996,900. Expenses not listed above are not chargeable to City. Reimbursable expenses are included in the total amount of compensation provided under Section 2 of this Agreement that shall not be exceeded. 2.7 Payment of Taxes, Tax Withholding. Consultant is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes. To be exempt from tax withholding, Consultant must provide City with a valid California Franchise Tax Board form 590 (“Form 590”), as may be amended and such Form 590 shall be attached hereto and incorporated herein as Exhibit D. Unless Consultant provides City with a valid Form 590 or other valid, written evidence of an exemption or waiver from withholding, City may withhold California taxes from payments to Consultant as required by law. Consultant shall obtain, and maintain on file for three (3) years after the termination of this Agreement, Form 590s (or other written evidence of exemptions or waivers) from all subcontractors. Consultant accepts sole responsibility for withholding taxes from any non - California resident subcontractor and shall submit written documentation of complian ce with Consultant’s withholding duty to City upon request. . 2.8 Payment upon Termination. In the event that the City or Consultant terminates this Agreement pursuant to Section 8, the City shall compensate the Consultant for all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as of the date of written notice of termination. Consultant shall maintain adequate logs and timesheets in order to verify costs incurred to that date. Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 4 of 16 2.9 Authorization to Perform Services. The Consultant is not authorized to perform any services or incur any costs whatsoever under the terms of this Agreement until receipt of authorization from the Contract Administrator. 2.10 Prevailing Wage. Where applicable, the wages to be paid for a day's work to all classes of laborers, workmen, or mechanics on the work contemplated by this Agreement, shall be not less than the prevailing rate for a day’s work in the same trade or occupation in the locality within the state where the work hereby contemplates to be performed as determined by the Director of Industrial Relations pursuant to the Director’s authority under Labor Code Section 1770, et seq. Each laborer, worker or mechanic employed by Consultant or by any subcontractor shall receive the wages herein provided for. The Consultant shall pay two hundred dollars ($200), or whatever amount may be set by Labor Code Section 1775, as may be amended, per day penalty for each worker paid less than prevailing rate of per diem wages. The difference between the prevailing rate of per diem wages and the wage paid to each worker shall be paid by the C onsultant to each worker. An error on the part of an awarding body does not relieve the Consultant from responsibility for payment of the prevailing rate of per diem wages and penalties pursuant to Labor Code Sections 1770 1775. The City will not recognize any claim for additional compensation because of the payment by the Consultant for any wage rate in excess of prevailing wage rate set forth. The possibility of wage increases is one of the elements to be considered by the Consultant. a. Posting of Schedule of Prevailing Wage Rates and Deductions. If the schedule of prevailing wage rates is not attached hereto pursuant to Labor Code Section 1773.2, th e Consultant shall post at appropriate conspicuous points at the site of the project a schedule showing all determined prevailing wage rates for the various classes of laborers and mechanics to be engaged in work on the project under this contract and all deductions, if any, required by law to be made from unpaid wages actually earned by the laborers and mechanics so engaged. b. Payroll Records. Each Consultant and subcontractor shall keep an accurate payroll record, showing the name, address, social security number, work week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by the Consultant in connection with the public work. Such records shall be certified and submitted weekly as required by Labor Code Section 1776.” Section 3. FACILITIES AND EQUIPMENT. Except as set forth herein, Consultant shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the services required by this Agreement. City shall make available to Consultant only the facilities and equipment listed in this section, and only under the terms and conditions set forth herein. City shall furnish physical facilities such as desks, filing cabinets, and conference space, as may be reasonably necessary for Consultant’s use while consulting with City employees and reviewing records and Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 5 of 16 the information in possession of the City. The location, quantity, and time of furnishing those facilities shall be in the sole discretion of City. In no event shall City be obligated to furnish any facility that may involve incurring any direct expense, including but not limited to computer, long -distance telephone or other communication charges, vehicles, and reproduction facilities. Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this Agreement, Consultant, at its own cost and expense, unless otherwise specified below, shall procure the types and amounts of insurance listed below against claims for injuries to persons or damages to p roperty that may arise from or in connection with the performance of the work hereunder by the Consultant and its agents, representatives, employees, and subcontractors. Consistent with the following provisions, Consultant shall provide Certificates of Insurance, attached hereto and incorporated herein as Exhibit C, indicating that Consultant has obtained or currently maintains insurance that meets the requirements of this section and under forms of insurance satisfactory, in all respects, to the City. Consultant shall maintain the insurance policies required by this section throughout the term of this Agreement. The cost of such insurance shall be included in the Consultant's bid. Consultant shall not allow any subcontractor to commence work on any subcontract until Consultant has obtained all insurance required herein for the subcontractor(s). 4.1 Workers’ Compensation. Consultant shall, at its sole cost and expense, maintain Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance for any and all persons employed directly or indirectly by Consultant. The Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance shall be provided with limits of not less than ONE MILLION DOLLARS ($1,000,000) per accident. In the alternative, Consultant may rely on a self-insurance program to meet those requirements, but only if the program of self-insurance complies fully with the provisions of the California Labor Code. Determination of whether a self-insurance program meets the standards of the Labor Code shall be solely in the discretion of the Contract Administrator (as defined in Section 10.9). The insurer, if insurance is provided, or the Consultant, if a program of self - insurance is provided, shall waive all rights of subro gation against the City and its officers, officials, employees, and volunteers for loss arising from work performed under this Agreement. 4.2 Commercial General and Automobile Liability Insurance. 4.2.1 General requirements. Consultant, at its own cost and expense, shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence, combined single limit coverage for risks associated with the w ork contemplated by this Agreement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting there from, and damage to property resulting from Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 6 of 16 activities contemplated under this Agreement, including the use of owned and non - owned automobiles. 4.2.2 Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 or GL 0002 (most recent editions) covering comprehensive General Liability and Insurance Services Office form number GL 0404 covering Broad Form Comprehensive General Liability. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001 (ed. 12/90) Code 8 and 9. No endorsement shall be attached limiting the coverage. 4.2.3 Additional requirements. Each of the following shall be included in the insurance coverage or added as a certified endorsement to the policy: a. The insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis. b. Any failure of Consultant to comply with reporting provisions of the policy shall not affect coverage provided to City and its officers, employees, agents, and volunteers. 4.3 Professional Liability Insurance. 4.3.1 General requirements. Consultant, at its own cost and expense, shall maintain for the period covered by this Agreement professional liability insurance for licensed professionals performing work pursuant to this Agreement in an amount not less than ONE MILLION DOLLARS ($1,000,000) covering the licensed professionals’ errors and omissions. Any deductible or self -insured retention shall not exceed ONE HUNDRED FIFTY THOUSAND DOLLARS $150,000 per claim. 4.3.2 Claims-made limitations. The following provisions shall apply if the professional liability coverage is written on a claims-made form: a. The retroactive date of the policy must be shown and must be before the date of the Agreement. b. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the Agreement or the work, so long as commercially available at reasonable rates. c. If coverage is canceled or not renewed and it is not replaced with another claims-made policy form with a retroactive date that precedes the date of this Agreement, Consultant must provide extended reporting coverage for a minimum of five (5) years after completion of the Agreement or the work. The City shall have the right to exercise, at the Consultant’s sole cost and Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 7 of 16 expense, any extended reporting provisions of the policy, if the Consultant cancels or does not renew the coverage. d. A copy of the claim reporting requirements must be submitted to the City prior to the commencement of any work under this Agreement. 4.4 All Policies Requirements. 4.4.1 Acceptability of insurers. All insurance required by this section is to be placed with insurers with a Bests' rating of no less than A:VII. 4.4.2 Verification of coverage. Prior to beginning any work under this Agreement, Consultant shall furnish City with complete copies of all policies delivered to Consultant by the insurer, including complete copies of all endorsements attached to those policies. All copies of policies and certified endorsements shall show the signature of a person authorized by that insurer to bind coverage on its behalf. If the City does not receive the required insurance documents prior to the Consultant beginning work, it shall not waive the Consultant’s obligation to provide them. The City reserves the right to require complete copies of all required insurance policies at any time. 4.4.3 Notice of Reduction in or Cancellation of Coverage. A certified endorsement shall be attached to all insurance obtained pursuant to this Agreement stating that coverage shall not be suspended, voided, canceled by either party, or reduced in coverage or in limits, except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. In the event that any coverage required by this section is reduced, limited, cancelled, or materially affected in any other manner, Consultant shall provide written notice to City at Consultant’s earliest possible opportunity and in no case later than ten (10) working days after Consultant is notified of the change in coverage. 4.4.4 Additional insured; primary insurance. City and its officers, employees, agents, and volunteers shall be covered as additional insureds with respect to each of the following: liability arising out of activities performed by or on behalf of Consultant, including the insured’s general supervision of Consultant; products and completed operations of Consultant, as applicable; premises owned, occupied, or used by Consultant; and automobiles owned, leased, or used by the Consultant in the course of providing services pursuant to this Agreement. The coverage shall contain no special limitations on the scope of protection afforded to City or its officers, employees, agents, or volunteers. A certified endorsement must be attached to all policies stating that coverage is primary insurance with respect to the City and its officers, officials, employees and volunteers, and that no insurance or self-insurance maintained by the City shall be called upon to contribute to a loss under the coverage. Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 8 of 16 4.4.5 Deductibles and Self-Insured Retentions. Consultant shall disclose to and obtain the approval of City for the self-insured retentions and deductibles before beginning any of the services or work called for by any term of this Agreement. Further, if the Consultant’s insurance policy includes a self-insured retention that must be paid by a named insured as a precondition of the insurer’s liability, or which has the effect of providing that payments of the self-insured retention by others, including additional insureds or insurers do not serve to satisfy the self- insured retention, such provisions must be modified by special endorsement so as to not apply to the additional insured coverage required by this agreement so as to not prevent any of the parties to this agreement from satisfying or paying the self - insured retention required to be paid as a precondition to the insurer’s liability. Additionally, the certificates of insurance must note whether the policy does or does not include any self-insured retention and also must disclose the deductible. During the period covered by this Agreement, only upon the prior express written authorization of Contract Administrator, Consultant may increase such deductibles or self-insured retentions with respect to City, its officers, employees, agents, and volunteers. The Contract Administrator may condition approval of an increase in deductible or self-insured retention levels with a requirement that Consultant procure a bond, guaranteeing payment of losses and related investigations, claim administration, and defense expenses that is satisfactory in all respects to each of them. 4.4.6 Subcontractors. Consultant shall include all subcontractors as insureds under its policies or shall furnish separate certificates and certified endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. 4.4.7 Wasting Policy. No insurance policy required by Section 4 shall include a “wasting” policy limit. 4.4.8 Variation. The City may approve a variation in the foregoing insurance requirements, upon a determination that the coverage, scope, limits, and forms of such insurance are either not commercially available, or that the City’s interests are otherwise fully protected. 4.5 Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option exercise any of the following remedies, which are alternatives to other remedies City may have and are not the exclusive remedy for Consultant’s breach: a. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the Agreement; Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 9 of 16 b. Order Consultant to stop work under this Agreement or withhold any payment that becomes due to Consultant hereunder, or both stop work and withhold any payment, until Consultant demonstrates compliance with the requirements hereof; and/or c. Terminate this Agreement. Section 5. INDEMNIFICATION AND CONSULTANT’S RESPONSIBILITIES. To the fullest extent permitted by law, Consultant shall indemnify, defend with counsel selected by the City, and hold harmless the City and its officials, officers, employees, agents, and volunteers from and against any and all los ses, liability, claims, suits, actions, damages, and causes of action arising out of any personal injury, bodily injury, loss of life, or damage to property, or any violation of any federal, state, or municipal law or ordinance, to the extent caused, in whole or in part, by the willful misconduct or negligent acts or omissions of Consultant or its employees, subcontractors, or agents, by acts for which they could be held strictly liable, or by the quality or character of their work. The foregoing obligatio n of Consultant shall not apply when (1) the injury, loss of life, damage to property, or violation of law arises wholly from the gross negligence or willful misconduct of the City or its officers, employees, agents, or volunteers and (2) the actions of Consultant or its employees, subcontractor, or agents have contributed in no part to the injury, loss of life, damage to property, or violation of law. It is understood that the duty of Consultant to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by City of insurance certificates and endorsements required under this Agreement does not relieve Consultant from liability under this indemnification and hold harmless clause. This ind emnification and hold harmless clause shall apply to any damages or claims for damages whether or not such insurance policies shall have been determined to apply. By execution of this Agreement, Consultant acknowledges and agrees to the provisions of this Section and that it is a material element of consideration. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement is determined by a court of competent jurisdiction or the California P ublic Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City. Section 6. STATUS OF CONSULTANT. 6.1 Independent Contractor. At all times during the term of this Agreement, Consultant shall be an independent contractor and shall not be an employee of City. City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement and assignment of personnel pursuant to Subparagraph 1.3; however, otherwise City shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement. Notwithstanding any other City, state, or federal policy, rule, regulation, law, or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing services under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any and Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 10 of 16 all claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in the California Public Employees Retirement System (PERS) as an employee of City and entitlement to any contribution to be paid by City for employer contributions and/or employee contributions for PERS benefits. 6.2 Consultant No Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity wha tsoever as an agent or to bind City to any obligation whatsoever. Section 7. LEGAL REQUIREMENTS. 7.1 Governing Law. The laws of the State of California shall govern this Agreement. 7.2 Compliance with Applicable Laws. Consultant and any subcontractors shall comply with all laws applicable to the performance of the work hereunder. 7.3 Other Governmental Regulations. To the extent that this Agreement may be funded by fiscal assistance from another governmental entity, Consultant and any subcontractor s shall comply with all applicable rules and regulations to which City is bound by the terms of such fiscal assistance program. 7.4 Licenses and Permits. Consultant represents and warrants to City that Consultant and its employees, agents, and any subcontractors have all licenses, permits, qualifications, and approvals, including from City, of what-so-ever nature that are legally required to practice their respective professions. Consultant represents and warrants to City that Consultant and its employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions. In addition to the foregoing, Consultant and any subcontractors shall obtain and maintain during the term of this Agreement valid Business Licenses from City. 7.5 Nondiscrimination and Equal Opportunity. Consultant shall not discriminate, on the basis of a person’s race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation, against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by Consultant under this Agreement. Consultant shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscriminati on in employment, contracting, and the provision of any services that are the subject of this Agreement, including but not limited to the satisfaction of any positive obligations required of Consultant thereby. Consultant shall include the provisions of this Subsection in any subcontract approved by the Contract Administrator or this Agreement. Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 11 of 16 Section 8. TERMINATION AND MODIFICATION. 8.1 Termination. City may cancel this Agreement at any time and without cause upon written notification to Consultant. Consultant may cancel this Agreement for cause upon 30 days’ written notice to City and shall include in such notice the reasons for cancellation. In the event of termination, Consultant shall be entitled to compensation for services performed to the date of notice of termination; City, however, may condition payment of such compensation upon Consultant delivering to City all materials described in Section 9.1. 8.2 Extension. City may, in its sole and exclusive discretion, extend the end date of th is Agreement beyond that provided for in Subsection 1.1. Any such extension shall require a written amendment to this Agreement, as provided for herein. Consultant understands and agrees that, if City grants such an extension, City shall have no obligati on to provide Consultant with compensation beyond the maximum amount provided for in this Agreement. Similarly, unless authorized by the Contract Administrator, City shall have no obligation to reimburse Consultant for any otherwise reimbursable expenses incurred during the extension period. 8.3 Amendments. The parties may amend this Agreement only by a writing signed by all the parties. 8.4 Assignment and Subcontracting. City and Consultant recognize and agree that this Agreement contemplates personal performance by Consultant and is based upon a determination of Consultant’s unique personal competence, experience, and specialized personal knowledge. Moreover, a substantial inducement to City for entering into this Agreement was and is the professional reputation and competence of Consultant. Consultant may not assign this Agreement or any interest therein without the prior written approval of the Contract Administrator. Consultant shall not assign or subcontract any portion of the performance contemplated and provided for herein, other than to the subcontractors noted in the proposal, without prior written approval of the Contract Administrator. 8.5 Survival. All obligations arising prior to the termination of this Agreement and all provisions of this Agreement allocating liability between City and Consultant shall survive the termination of this Agreement. 8.6 Options upon Breach by Consultant. If Consultant materially breaches any of the terms of this Agreement, City’s remedies shall include, but not be limited to, the following: Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 12 of 16 8.6.1 Immediately terminate the Agreement; 8.6.2 Retain the plans, specifications, drawings, reports, design documents, and any other work product prepared by Consultant pursuant to this Agreement; 8.6.3 Retain a different consultant to complete the work described in Exhibit A not finished by Consultant; or 8.6.4 Charge Consultant the difference between the cost to complete the work described in Exhibit A that is unfinished at the time of breach and the amount that City would have paid Consultant pursuant to Section 2 if Consultant had completed the work. Section 9. KEEPING AND STATUS OF RECORDS. 9.1 Records Created as Part of Consultant’s Performance. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that Consultant prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the City. Consultant hereby agrees to deliver those documents to the City upon termination of the Agreement. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use. City and Consultant agree that, until final approval by City, all data, plans, specifications, reports and other documents are confidential and will not be released to third parties without prior written consent of both parties unless required by law. 9.2 Consultant’s Books and Records. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services or expenditures and disbursements charged to the City under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to the Consultant to this Agreement. 9.3 Inspection and Audit of Records. Any records or documents that Section 9.2 of this Agreement requires Consultant to maintain shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of the City. Under California Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds TEN THOUSAND DOLLARS ($10,000.00), the Agreement shall be subject to the examination and audit of the State Auditor, at the request of City or as part of any audit of the City, for a period of three (3) years after final payment under the Agreement. 9.4 Records Submitted in Response to an Invitation to Bid or Request for Proposals. All responses to a Request for Proposals (RFP) or invitation to bid issued by the City become Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 13 of 16 the exclusive property of the City. At such time as the City selects a bid, all proposals received become a matter of public record, and shall be regarded as public records, with the exception of those elements in each proposal that are defined by Consultant and plainly marked as “Confidential,” "Business Secret" or “Trade Secret." The City shall not be liable or in any way responsible for the disclosure of any such proposal or portions thereof, if Consultant has not plainly marked it as a "Trade Secret" or "Business Secret," or if disclosure is required under the Public Records Act. Although the California Public Records Act recognizes that certain confidential trade secret information may be protected from disclosure, the City may not be in a position to establish that the information that a prospective bidder submits is a trade secret. If a request is made for information marked "Trade Secret" or "Business Secret," and the requester takes legal action seeking release of the materials it believes does not constitute trade secret information, by submitting a proposal, Consultant agrees to indemnify, defend and hold harmless the City, its agents and employees, from any judgment, fines, penalties, and award of attorneys fees awarded against the City in favor of the party requesting the information, and any and all costs connected with that defense. This obligation to indemnify survives the City's award of the contract. Consultant agrees that this indemnification survives as long as the trade secret information is in the City's possession, which includes a minimum retention period for such documents. Section 10 MISCELLANEOUS PROVISIONS. 10.1 Attorneys’ Fees. If a party to this Agreement brings any action, including arbitration or an action for declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose. 10.2 Venue. In the event that either party brings any action against the other under this Agreement, the parties agree that trial of such action shall be vested exclusively in the state courts of California in the County San Mateo or in the United States District Court for the Northern District of California. 10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement. 10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement. Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 14 of 16 10.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the parties. 10.6 Use of Recycled Products. Consultant shall prepare and submit all reports, written studies and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper. 10.7 Conflict of Interest. Consultant may serve other clients, but none whose activities within the corporate limits of City or whose business, regardless of location, would place Consultant in a “conflict of interest,” as that term is defined in the Political Reform Act, codified at California Government Code Section 81000 et seq. Consultant shall not employ any City official in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement that would violate California Government Code Sections 1090 et seq. Consultant hereby warrants that it is not now, nor has it been in the previous twelve (12) months, an employee, agent, appointee, or official of the City. If Consultant was an employee, agent, appointee, or official of the City in the previous twelve (12) months, Consultant warrants that it did not participate in any manner in the forming of this Agreement. Consultant understands that, if this Agreement is made in violation of Government Code §1090 et.seq., the entire Agreement is void and Consultant will not be entitled to any compensation for services performed pursuant to this Agreement, including reimbursement of expenses, and Consultant will be required to reimburse the City for any sums paid to the Consultant. Consultant understands that, in addition to the foregoing, it may be subject to criminal prosecution for a violation of Government Code § 1090 and, if applicable, will be disqualified from holding public office in the State of California. 10.8 Solicitation. Consultant agrees not to solicit business at any meeting, focus group, or interview related to this Agreement, either orally or through any written materials. 10.9 Contract Administration. This Agreement shall be administered by Richard Cho ("Contract Administrator"). All correspondence shall be directe d to or through the Contract Administrator or his or her designee. 10.10 Notices. All notices and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given (i) when received if personally delivered; (ii) when received if transmitted by telecopy, if received during normal business hours on a business day (or if not, the next business day after delivery) provided that such facsimile is legible and that at the time such facsim ile is sent the sending Party receives written confirmation of receipt; (iii) if sent for next day delivery to a domestic address by recognized overnight delivery service (e.g., Federal Express); and (iv) upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to the respective Parties as follows: Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 15 of 16 Consultant: Kimley-Horn and Associates 1300 Clay Street, Suite 325 Oakland, CA 94612 City: City Clerk City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 10.11 Professional Seal. Where applicable in the determination of the contract administrator, the first page of a technical report, first page of design specifications, and each page o f construction drawings shall be stamped/sealed and signed by the licensed professional responsible for the report/design preparation. The stamp/seal shall be in a block entitled "Seal and Signature of Registered Professional with report/design responsibility," as in the following example. Seal and Signature of Registered Professional with report/design responsibility. 10.12 Integration. This Agreement, including all Exhibits attached hereto, and incorporated herein, represents the entire and integrated agreement between City and Consultant and supersedes all prior negotiations, representations, or agreements, either written or oral pertaining to the matters herein. 10.13 Counterparts. This Agreement may be executed in counterparts and/or by f acsimile or other electronic means, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterpart, shall constitute one Agreement, which shal l be binding upon and effective as to all Parties.. 10.14 Construction. The headings in this Agreement are for the purpose of reference only and shall not limit or otherwise affect any of the terms of this Agreement. The parties have had an equal opportunity to participate in the drafting of this Agreement; therefore any construction as against the drafting party shall not apply to this Agreement. The Parties have executed this Agreement as of the Effective Date. Consulting Services Agreement between [Rev:11.14.2016] 10/1/2018 City of South San Francisco and Kimley-Horn and Associates Page 16 of 16 CITY OF SOUTH SAN FRANCISCO Consultants ____________________________ _____________________________________ City Manager NAME: TITLE: Attest: _____________________________ City Clerk Approved as to Form: ____________________________ City Attorney 2729962.1 EXHIBIT A SCOPE OF SERVICES GENERAL A general description of the services, tasks, and responsibilities of the Consultant (Kimley-Horn and Associates, Inc.) are as follows: PREAMBLE TO BASIC SERVICES: This project aims to implement the Kadence Adaptive Traffic Signal System at all signalized project intersections (up to 100) owned and operated by the City of South San Francisco. The improvements entail (1) evaluation of existing traffic signal communications network and vehicle detection system, (2) preparation of construction documents for needed upgrade and replacement of existing field elements, (3) deployment of KITS/Kadence system software and hardware, (4) configuration and integration of traffic signal controllers and network switches, (5) post-installation system fine-tuning, (6) training and documentation, and (7) system maintenance and support. RESPONSIBILITIES OF CITY: The City shall provide available traffic signal as-builts, field communications network record drawings, City utility plat maps, intersection right-of-way information, existing traffic signal timing sheets, technical staff knowledgeable of City’s traffic signal/detection equipment and traffic signal communications network to support Kimley-Horn during field investigation tasks. BASIC SERVICES: TASK 1 – PROJECT MANAGEMENT City Staff Coordination: Participate in bi-weekly conference calls with City staff to discuss current action items and schedule-based completion of project design elements. Meeting Agenda and Minutes: Consultant will prepare meeting agenda and meeting minutes for all meetings, including project kick-off meeting, and up to ten (10) in-person meetings at City offices. Project Schedule: Consultant will prepare a detailed project schedule from project initiation through system implementation and turn-on. Schedule will be updated monthly with completed tasks and critical path items clearly identified. Consultant will provide City with a baseline project schedule at the project kick-off meeting. Task 1 Deliverables: Meeting agendas Meeting notes Monthly schedules TASK 2 – BACKGROUND RESEARCH/INFORMATION GATHERING Consultant will request and review available City-furnished relevant existing conditions information including, but not limited to, traffic signal and communications network as-builts, utility and right-of-way mapping, aerial photographs, traffic signal timing sheets, and any other information pertinent to the design and implementation of this project. Consultant will conduct field reconnaissance at relevant traffic signal locations to document existing field elements including communications network equipment and infrastructure, cabinet/controller type, detection type and location, lane configuration, signal phasing, posted speed limits, and visible utilities. Task 2 Deliverables: Existing Traffic Signal and Communication Network System Inventory Report TASK 3 – COMMUNICATIONS AND DETECTION SYSTEM EVALUATION Consultant will review the existing detection configuration at each project intersection, based upon the information gathered in Task 2, and provide the City a list of recommended modifications to the existing detection system. Kadence requires IP communications from each traffic signal to the Kadence central server. Consultant will review existing traffic signal communications network, and provide the City a list of recommended modifications to the existing communications network. Any communication links that are currently serial will need to be upgraded to IP either through installation of new communications network hardware or installation of new infrastructure. Task 3 Deliverables: Field notes Field photos Memorandum documenting existing conditions and recommended modifications to communications and detection system TASK 4 – PLANS, SPECIFICATIONS, AND ESTIMATE (PS&E) Based on City-approved recommended changes to the existing communications and detection system outlined in Task 3, Consultant will prepare 65% and 95% PS&E submittals for installation of field elements by a construction contractor. Each review cycle is assumed to be three weeks. The 100% PS&E package will be submitted for a final City plan check prior to providing the Final Bid Ready construction documents. 65% PS&E: Consultant will prepare design plans, a construction cost estimate, and technical specifications for installation and/or removal of traffic signal controller and cabinet equipment, and traffic signal communications network equipment. The anticipated breakdown of sheets for the for the 65% plans is as follows: Title Sheet General notes sheet Traffic signal plans Communications system diagram Electrical detail sheets 95% PS&E: Based on City’s comments, Consultant will revise the 65% design to produce the 95% PS&E. Consultant will provide 65% comment response matrix, with revised submittal. Consultant will also prepare the 95% technical specifications and construction cost estimate in PDF format. 100% PS&E: Consultant will submit the 100% PS&E to the City for a final plan check review. It is anticipated that any comments resulting from the plan check will be editorial in nature and will be communicated to Consultant via email or discussed over the phone. Final Bid Documents: Consultant will make any necessary revisions to the 100% PS&E to develop the Bid Documents, plans and specifications, and submit to City. Bid documents will have a wet stamp and signature by Consultant’s Project Engineer. Task 4 Deliverables: 65%, 95%, 100%, Plans, Technical Specifications, and Cost Estimate 95%, 100% Comment Resolution Matrix Final Bid Documents (Plans and Technical Specifications) TASK 5 – DEPLOY KADENCE CENTRAL SYSTEM AND HARDWARE Consultant will purchase central system hardware including Kadence servers, Kadence workstation, database software, and operating system software. Following setup and installation of Kadence hardware, Consultant will deploy KITS central traffic signal system at the City Traffic Management Center (TMC). Consultant will configure all applicable parameters (communications address, signal graphics, arterials, sections, and groups) for all project intersections. Consultant will provide the following: Kadence ATCS license for all project intersections KITS license for all project intersections Two (2) mid-range Dell or HP servers for Kadence/KITS (one application server, one database server) One (1) mid-range Dell or HP workstation computer with keyboard/mouse One (1) networking switch suitable for rack-mounting SQL server license and Microsoft applications necessary for KITS and Kadence operation Consultant will complete workstation setup and installation at the direction of City staff. Prior to delivery of central system hardware, Consultant will provide City’s Project Manager hardware submittals for review and approval. Task 5 Deliverables: Central system hardware submittals One copy of SQL server software One copy of Microsoft Office Two mid-range Dell or HP 19-inch rack-mount servers One mid-range Dell or HP workstation computer with keyboard/mouse One rack-mount network switch Network Configuration/Setup Memorandum TASK 6 – CONFIGURE, INTEGRATE AND FINE-TUNE KADENCE SIGNALS Following completion of detection and communication field modifications, consultant will purchase, configure, and bench test 2070/ATC traffic signal controllers (with standard 1-year warranty) prior to delivery to the City for installation by the construction contractor. Consultant will input timing plans into the controllers and facilitate controller integration in the field, post- installation. Consultant will purchase, configure, and bench-test communications switches and facilitate communications switch integration in the field, post-installation. Consultant will configure Kadence parameters (TOD schedule, detector to phase assignments, coordination patterns, and phase timings) on new controllers following field installation. Task 6 Deliverables: Configuration and tuning of Kadence field parameters Memorandum on Kadence configuration setup TASK 7 – TRAINING AND DOCUMENTATION Consultant will provide classroom and individual KITS/Kadence on-site training for City staff for any number of users/trainee, over two days. Additional training can be requested and provided at any time during the maintenance phase. Consultant will provide a training plan to the City 30 days prior to the scheduled training. The plan will include lesson plans for each course detailing the literature, standard operating procedures, manuals, and test materials that will be used. Task 6 Deliverables: Training plan Training materials Kadence user manual KITS user manual Quick start guide TASK 8 – MAINTENANCE AND SUPPORT Consultant will provide five-years of maintenance and support for all KITS/Kadence hardware and software. Support will consist of an “unlimited” number of hours of on-site, web, phone, and email support for five (5) years following system acceptance. KH will provide at minimum one (1) update to Kadence software each maintenance year, and additional updates as determined by KH staff to provide additional functionality to Kadence. Any warranty items and operational deficiencies identified by City staff will be repaired by KH at no additional fee during the maintenance phase. Task 8 Deliverables: 5-year maintenance and support EXHIBIT B COMPENSATION SCHEDULE Item #DescriptionScope of Work Task(s)QuantityUnitUnit PriceExtended Price(a) KH FeeExtended Price(b) Equipment CostTotal Extended Price1Project ManagementTask 11LS50,000$ 50,000$ 50,000$ 2Detection EvaluationTask 2, Task 3100EA455$ 45,500$ 45,500$ 3Communications System EvaluationTask 2, Task 3100EA150$ 15,000$ 15,000$ 4Plans, Specifications, and Estimate (PS&E)Task 41LS200,000$ 200,000$ 200,000$ 5aPurchase and Configure Kadence Central System HardwareTask 51LS50,000$ 50,000$ 50,000$ 5bPurchase and Configure Kadence Central System Hardware (Equipment Cost)Task 51LS27,500$ -$ 27,500$ 27,500$ 6Deploy and Configure City-wide KITS Software - FREETask 51LS-$ -$ -$ 7-1Kadence Software License Fee (Signals #1 - 33)Task 533EA3,800$ 125,400$ 125,400$ 7-2Kadence Software License Fee (Signals #34 - 100)Task 567EA1,900$ 127,300$ 127,300$ 8aPurchase, Configure, and Integrate Traffic Signal Controllers w/ D4 FirmwareTask 6100EA2,220$ 222,000$ 222,000$ 8bPurchase, Configure, and Integrate Traffic Signal Controllers w/ D4 Firmware (Equipment Cost)Task 6100EA2,900$ -$ 290,000$ 290,000$ 9aPurchase, Configure, and Integrate Communications SwitchesTask 6100EA1,000$ 100,000$ 100,000$ 9bPurchase, Configure, and Integrate Communications Switches (Equipment Cost)Task 6100EA1,800$ -$ 180,000$ 180,000$ 10Configure, Calibrate, and Fine-tune Kadence SignalsTask 6100EA4,242$ 424,200$ 424,200$ 11Training and DocumentationTask 71LS15,000$ 15,000$ 15,000$ 12Maintenance and Support - 5 yearsTask 85YR25,000$ 125,000$ 125,000$ 1,499,400$ 497,500$ 1,996,900$ Notes:(a) Fees for work that will be completed by Kimley-Horn professional staff - this includes professional services, software license fees, and other direct costs(b) Cost of materials/equipment that Kimley-Horn will purchase from a manufacturer/distributor for use implementing the Kadence adaptive system*Cost of installation of field elements will be done by a third-party construction contractor. Construction contract will be procured and administered by the City. Installaiton costs will be determined at time of contract award.CONTRACT TOTAL EXHIBIT C INSURANCE CERTIFICATES [OPTIONAL] EXHIBIT D FORM 590 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-787 Agenda Date:9/26/2018 Version:1 Item #:7. Report regarding a resolution awarding a construction contract to Shaw Pipeline,Inc.of San Francisco, California for the Terrace Drive Storm Drain Improvement Project (Project No.sd1701)in an amount not to exceed $523,535 and authorizing a total construction budget of $630,000.(Patrick Caylao,Associate Engineer and Peter Vorametsanti., Consultant, Swinerton Engineering) RECOMMENDATION It is recommended that the City Council adopt a resolution awarding a construction contract to Shaw Pipeline, Inc.of San Francisco,California for the Terrace Drive Storm Drain Improvement Project (Project No.sd1701) in an amount not to exceed $523,535 and authorizing a total construction budget of $630,000. BACKGROUND/DISCUSSION Project sd1701 (Project)of the 2018-19 Capital Improvement Program (CIP)is for upgrading the City’s storm drainage system in the area of Terrace Drive and Spruce Avenue.The adjacent Francisco Terrace subdivision has a history of drainage issues.Since the most recent rainfall events,the City has been proactive about better preparing for future events,ensuring that impacts are mitigated.The Project will install new storm pipes,catch basins and manholes to contribute to addressing potential flooding and drainage issues.The Project also includes installing a raised crosswalk,replacing an existing curb ramp,adding new sidewalk,and placing asphalt paving and slurry seal over the existing street pavement.The storm drain system upgrades are designed to ensure that subsurface and surface drainage flows are routed around the Francisco Terrace neighborhood, which is a natural low point of this area.New high capacity drain inlets and laterals along Spruce Avenue will maximize usage of the existing underground storm drain main on Spruce Avenue.Additionally,the raised crosswalk is designed to guide surface flows around the Francisco Terrace neighborhood when the capacity of the underground system on Spruce Avenue has been exceeded. Staff previously advertised this contract July 5,2018,but received only a single bid for an amount significantly in excess of the engineers estimate ($597,632 vs.$383,900)and so the City rejected the bid.Staff discussed the scope of work with the bidder and other local contractors and determined the job as offered for bid would be difficult to construct due to traffic control requirements.The bid offering was revised to allow the flexibility of night and weekend work.Staff advertised a new notice inviting bids for the contract on August 21,2018 and August 28,2018.On September 14,2018,staff received and opened two sealed bids in response.The lowest responsible bidder was Shaw Pipeline,Inc.of San Francisco,California.Staff verified the low bidder’s contractor’s license with the California State Licensing Board and found it to be in good standing. Because this project is locally funded, there are no Disadvantaged Business Enterprise (DBE) requirements. The following are the two bids received: 1.Shaw Pipeline, Inc. of San Francisco, California $523,535 2.Interstate Grading and Paving, Inc. of SSF, California $661,800 The Engineer’s estimate is $383,900. City of South San Francisco Printed on 9/21/2018Page 1 of 2 powered by Legistar™ File #:18-787 Agenda Date:9/26/2018 Version:1 Item #:7. Although the new low bid,which is $74,097 lower than the previous bid,is still higher than the Engineer’s estimate,staff is recommending that the award of contract be made because we now have three bids (one from the previous attempt)that confirm that the market demands higher prices for this work.In addition,storm season is fast approaching and this project is anticipated to help alleviate drainage issues in this neighborhood going forward. The project budget is: ·Shaw Pipeline, Inc. of San Francisco, California Construction Contract $523,535 ·Construction Contingency $106,465 ·Total Construction Budget $630,000 The construction contingency will be used for any additional costs to address unforeseen conditions and project expedition during the construction operations. FUNDING This project is funded by the general fund, and the project is included in the City of South San Francisco’s Fiscal Year 201-19 Capital Improvement Program (Project No. sd1701). At the time the project was programmed into the CIP, the scope of work could not be determined and a budget of $300,000 was entered as a placeholder. After a specific drainage area study was done, the project designed, and construction manager retained, $210,000 was expended leaving $90,000 available for construction. Therefore $540,000 is required to supplement this budget line item. Cumulative budget savings from 12 projects that are in or near closeout will be transferred to fully fund this project. CONCLUSION Awarding the construction contract to Shaw Pipeline,Inc.of San Francisco,California,for the Terrace Drive Storm Drain Improvement Project will upgrade the City’s storm drainage system in the area of Terrace Drive and Spruce Avenue. Staff recommends City Council approval. Attachment: Vicinity Map City of South San Francisco Printed on 9/21/2018Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-788 Agenda Date:9/26/2018 Version:1 Item #:7a. Resolution awarding a construction contract to Shaw Pipeline,Inc.of San Francisco,California for the Terrace Drive Storm Drain Improvement Project (Project No.sd1701)in an amount not to exceed $523,535 and authorizing a total construction budget of $630,000. WHEREAS,the project design calls for installation of new storm pipes,new catch basins,and new manholes for the purposes of upgrading the City’s storm drainage system in the area of Terrace Drive and Spruce Avenue; and WHEREAS,staff advertised the Notice Inviting Bids for construction of the project on August 21,2018 and August 28, 2018; and WHEREAS,on September 14,2018,staff received two bids in response with the lowest responsive and responsible bidder supplied by Shaw Pipeline, Inc. of San Francisco, California; and WHEREAS,pursuant to Public Contract Code §20166,Public Works contracts,if awarded,are awarded to the lowest responsible bidder whose bid is responsive to the solicitation; and WHEREAS,the project is included in the City of South San Francisco’s Fiscal Year 2018-19 Capital Improvement Program (Project No. sd1701); and NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of South San Francisco that the City Council hereby awards a construction contract,a draft of which is attached hereto as Exhibit A,for the Terrace Drive Storm Drain Improvement Project to Shaw Pipeline,Inc.of San Francisco,California,in an amount not to exceed $523,535 conditioned on Shaw Pipeline,Inc.’s timely execution of the Project contact and submission of all required documents,including but not limited to,certificates of insurance and endorsement,in accordance with the Project documents. BE IT FURTHER RESOLVED the City Council authorizes a total project construction budget of $630,000,and authorizes the City Manager to utilize unspent amount of the total Project,if necessary,towards additional construction contingency budget. BE IT FURTHER RESOLVED the City Council authorizes the Finance Department to establish the Project Budget consistent with the information contained in the staff report. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the agreement and any other related documents on behalf of the City upon timely submission by Shaw Pipeline,Inc.of the signed City of South San Francisco Printed on 9/28/2018Page 1 of 2 powered by Legistar™ File #:18-788 Agenda Date:9/26/2018 Version:1 Item #:7a. contract and all other documents, subject to approval by the City Attorney. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take any other related actions consistent with the intention of the resolution. ***** City of South San Francisco Printed on 9/28/2018Page 2 of 2 powered by Legistar™ CITY OF SOUTH SAN FRANCISCO FRANCISCO TERRACE STORM DRAIN ENGINEERING FILE NO. SD-16-1, PROJECT NO. sd1701, BID NO. 2618 CONTRACT/BIDDING DOCUMENTS PART I – NOTICE, PROPOSAL FORMS, AGREEMENT NOTICE INVITING BIDS PROPOSAL FORMS BONDS FORM OF AGREEMENT FOR PUBLIC IMPROVEMENTS PART II – GENERAL CONDITIONS PART III – SPECIAL PROVISIONS SPECIAL CONDITIONS TECHNICAL SPECIFICATIONS PART IV – CONTRACT DRAWINGS View Contract/Bidding Documents at eBidboard: https://www.ebidboard.com Purchase Contract/Bidding Documents from: City of South San Francisco Engineering Division City Hall Annex, 315 Maple Avenue, South San Francisco For Questions, contact the Engineering Division 315 Maple Ave, South San Francisco, 650/829-6652 and/or Peter Vorametsanti, Project Manager Swinerton Management & Consulting (650) 740-7368, peterv@swinerton.com City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 i CITY OF SOUTH SAN FRANCISCO ENGINEERING DIVISION FORM OF AGREEMENT FOR PUBLIC IMPROVEMENTS INDEX Page No. 1. Scope of Work A-1 2. The Contract Documents A-1 3. Equipment - Performance of Work A-2 4. Contract Price A-2 5. Rights of City to Increase Working Days A-2 6. Option of City to Terminate Agreement in Event of Failure to Complete Work A-2 7. Termination of Contract for Convenience A-3 8. Performance by Sureties A-5 9. Hold-Harmless Agreement and Contractor's Insurance A-6 10. Insurance A-6 11. Proof of Carriage of Insurance A-8 12. Provisions Cumulative A-8 13. Notices A-8 14. Interpretation A-8 Attachment A – Escrow Agreement for Security Deposits in Lieu of Retention A-10 City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-1 FORM OF AGREEMENT FOR PUBLIC IMPROVEMENTS THIS AGREEMENT made and entered into this 26th, day of September, 2018, between the CITY OF SOUTH SAN FRANCISCO, a municipal corporation and political subdivision of the State of California, hereinafter called “CITY”, and Shaw Pipeline, Inc. of San Francisco, California, hereinafter called “CONTRACTOR”1. W I T N E S S E T H: WHEREAS, City has taken appropriate proceedings to authorize construction of the public work and improvements herein provided and execution of this contract. WHEREAS, a notice was duly published for bids for the contract for the improvements hereinafter described. WHEREAS, on September 26, 2018, notice duly given, the City Council (“Council”) of said City awarded the contract for the construction of the improvements hereinafter described to the Contractor, which Contractor said Council found to be the lowest responsible bidder for said improvements. WHEREAS, City and Contractor desire to enter into this agreement for the construction of said improvements pursuant to the terms, definitions, and conditions set forth in the General Provisions and other Contract Documents. IT IS AGREED as follows: Scope of Work. Contractor shall perform the Work described briefly as follows: 1. The Work consists of the furnishing of all labor, materials, tools, equipment, and services necessary for the construction of the FRANCISCO TERRACE STORM DRAIN; in accordance with the Contract Documents. Also included are any such other items or details not mentioned above that are required by the Contract Documents, which are to be constructed or furnished and installed as shown on the plans, as specified herein and as directed by the Engineer. The aforementioned improvements are further described in the "Contract Documents" hereinafter referred to. The Contract Documents. The complete Contract consists of the following 2. documents: (A) Notice Inviting Bids. (B) Part I – Submitted Proposal (as accepted). (C) This Agreement, including Contractor’s Payment Bond, Faithful Performance Bond and Guaranty Bond. 1The term "Contractor" as used herein is employed without distinction as to either number or gender and shall 1. include whenever the context shall permit all agents, representatives, employees, servants, subcontractors and business or social invitees. City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-2 (D) Part II – General Conditions. Note that the General Conditions make the Caltrans Standard Specifications and Standard Plans, dated 2015, part of the contract documents. (E) Part III – Special Provisions: Contains Special Conditions and Technical Specifications (F) Part IV – Contract Drawings, prepared by CSG Consultants, dated 7/6/18. All rights and obligations of City and Contractor are fully set forth and described in the contract documents. All of the above-named documents are intended to cooperate, so that any work 3. called for in one and not mentioned in the other, or vice versa, is to be executed the same as if mentioned in all said documents. The documents comprising the complete contract will hereinafter be referred to as “the Contract Documents.” Equipment - Performance of Work. Contractor shall furnish all tools, equipment, 4. apparatus, facilities, labor, and materials necessary to perform and complete in a good and workmanlike manner the Work of general construction as called for, and for the manner designated in, and in strict conformity with, the plans and specifications for said Work entitled: FRANCISCO TERRACE STORM DRAIN Engineering File No. SD-16-1, Project No.sd1701 The equipment, apparatus, facilities, labor, and materials shall be furnished and said Work performed and completed as required in said plans and specifications under the direction and supervision and subject to the approval of the Engineer of said City or the Engineer’s designated assistant. Contract Price. City shall pay, and Contractor shall accept, in full payment for 5. the Work agreed to be done the sum of Five Hundred Twenty Three Thousand Five Hundred Thirty Five Dollars ($523,535). Said price is determined by the lump sum price contained in Contractor's bid proposal (“Bid”). The lump sum price and unit prices are set forth in the completed Bid forms attached hereto and made a part hereof as if set forth herein verbatim. In the event work is performed or materials furnished in addition to those set forth in Contractor's bid and the specifications herein, such work and materials will be paid for at the unit prices therein contained. Said amount shall be paid in installments as hereinafter provided. Rights of City to Increase Working Days. If such Work is not completed within 6. the time specified, the Engineer shall have the right to increase the number of working days in the amount it may determine will best serve the interest of the City. If it desires to increase said number of working days, it shall have the further right to charge to Contractor and deduct from the final payment for the Work the actual cost of engineering, inspection, superintendence, and other overhead expenses which are directly chargeable to Contractor and which accrue during the period of such extension, except that the cost of the final service and preparation of the final estimates shall not be included in such charges, provided, however, that no extension of time for the completion of such Work shall be allowed unless at least twenty (20) calendar days prior to the time herein fixed for the completion thereof or the time fixed by the Engineer for such completion as extended, Contractor shall have filed application for extension thereof, in writing with the Engineer. City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-3 Option of City to Terminate Agreement in Event of Failure to Complete Work. 7. If at any time in the opinion of the Engineer, the Contractor has refused or failed to prosecute the Work or any severable part thereof, with such diligence as will insure its work, or any completion within the time specified, or any extensions thereof, or shall have failed to complete said work within such time, or if Contractor should be adjudged a bankrupt, or if Contractor should make a general assignment for the benefit of Contractor's creditors, or if a receiver should be appointed in the event of Contractor's insolvency, or if Contractor, or any Subcontractor, should violate any of the provisions of this Agreement, the Engineer may give written notice to Contractor, and Contractor's sureties of its intention to terminate this Agreement, such notice to contain the reasons for such intention to terminate this Agreement, and unless within five calendar (5) days after the serving of such notice, such violation shall cease and satisfactory arrangements for the correction thereof be made, this Agreement may, at the option of City, upon expiration of said time, cease and terminate. Any excess of cost arising therefrom over and above the contract price will be charged against the Contractor and the Contractor’s sureties who will be liable therefore. In the event of such termination, all money due the Contractor or retained under the terms of this contract shall be forfeited to the City; but such forfeiture will not release the Contractor or the Contractor’s sureties from liability or failure to fulfill the contract. The Contractor and the Contractor’s sureties will be credited with the amount of money so forfeited toward any excess of cost over and above the contract price, arising from the suspension termination of the operations of the contract and the completion of the Work by the City as above provided, and the Contractor will be so credited with any surplus remaining after all just claims for such completion have been paid. In the determination of the question whether there has been any such noncompliance with the contract as to warrant the suspension termination or annulment thereof, the decision of the Engineer shall be binding on all parties to the contract. Termination of Contract for Convenience. The City also reserves the right to 8. terminate the contract at any time upon a determination by the Engineer in the Engineer's sole discretion that termination of the contract is in the best interest of the City. If the City elects to terminate the contract for convenience, the termination of the contract and the total compensation payable to the Contractor shall be governed by the following: The City will issue the Contractor a written notice signed by the (A) Engineer, specifying that the contract is terminated. Upon receipt of said written notice, the Contractor will be relieved of further responsibility for damage to the Work (excluding materials) as specified in Section VII-17, "Contractor's Responsibility for the Work," of the General Conditions and, except as otherwise directed in writing by the Engineer, the Contractor shall: Stop all work under the contract except that specifically directed to be completed (1) prior to acceptance. Perform work the Engineer deems necessary to secure the project for termination. (2) Remove equipment and plant from the site of the Work. (3) Take such action as is necessary to protect materials from damage. (4) Notify all subcontractors and suppliers that the contract is being terminated and (5) that their contracts or orders are not to be further performed unless otherwise authorized in writing by the Engineer. City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-4 Provide the Engineer with an inventory list of all materials previously produced, (6) purchased or ordered from suppliers for use in the Work and not yet used in the Work, including its storage location, and such other information as the Engineer may request. Dispose of materials not yet used in the Work as directed by the Engineer. It (7) shall be the Contractor's responsibility to provide the City with good title to all materials purchased by the City hereunder, including materials for which partial payment has been made as provided in Section IX-2, “Progress Payments,” of the General Conditions and with bills of sale or other documents of title for such materials. Subject to the prior written approval of the Engineer, settle all outstanding (8) liabilities and all claims arising out of subcontracts or orders for materials terminated hereunder. To the extent directed by the Engineer, the Contractor shall assign to the City all the right, title, and interest of the Contractor under subcontracts or orders for materials terminated hereunder. Furnish the Engineer with the documentation required to be furnished by the (9) Contractor under the provisions of the contract, including, on projects as to which Federal and State funds are involved, all documentation required under the Federal and State requirements included in the contract. Take such other actions as the Engineer may direct. (10) Acceptance of the contract as hereinafter specified shall not relieve the (B) Contractor of responsibility for damage to materials. The Contractor shall continue to be responsible for damage to materials after issuance of the Notice of Termination, except as follows: The Contractor’s responsibility for damage to materials for which partial (1) payment has been made as provided in Section IX-2, “Progress Payments,” of the General Conditions and for materials furnished by the City for use in the Work and unused shall terminate when the Engineer certifies that such materials have been stored in the manner and at the locations the Engineer has directed. The Contractor’s responsibility for damage to materials purchased by the City (2) subsequent to the issuance of the notice that the contract is to be terminated shall terminate when title and delivery of such materials has been taken by the City. When the Engineer determines that the Contractor has completed the Work under (3) the contract directed to be completed prior to termination and such other work as may have been ordered to secure the project for termination, the Contractor will recommend that the Engineer formally accept the contract to the extent performed, and immediately upon and after such acceptance by the Engineer, the Contractor will not be required to perform any further Work thereon and shall be relieved of the Contractor's contractual responsibilities for injury to persons or property which occurs after the formal acceptance of the project by the Engineer. Termination of the contract shall not relieve the surety of its obligation (C) for any just claims arising out of the work performed. The total compensation to be paid to the Contractor shall be determined (D) by the Engineer on the basis of the following: City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-5 The reasonable cost to the Contractor, without profit, for all work performed (1) under the contract, including mobilization, demobilization and work done to secure the project for termination. In determining the reasonable cost, deductions will be made for the cost of materials to be retained by the Contractor, amounts realized by the sale of materials, and for other appropriate credits against the cost of the work. When, in the opinion of the Engineer, the cost of a contract item of work is excessively high due to costs incurred to remedy or replace defective or rejected work, the reasonable cost to be allowed will be the estimated reasonable cost of performing such work in compliance with the requirements of the plans and specifications and the excessive actual cost shall be disallowed. A reasonable allowance for profit on the cost of the work performed as (2) determined under Subsection (1), provided the Contractor establishes to the satisfaction of the Engineer that it is reasonably probable that the Contractor would have made a profit had the contract been completed and provided further, that the profit allowed shall in no event exceed four (4) percent of said cost. The reasonable cost to the Contractor of handling material returned to the vendor, (3) delivered to the City, or otherwise disposed of as directed by the Engineer. A reasonable allowance for the Contractor’s administrative costs in determining (4) the amount payable due to termination of the contract. A reasonable credit to the City for defective or incomplete work not corrected. (5) All records of the Contractor and subcontractors necessary to determine compensation in accordance with the provisions of this Section 5 shall be open to inspection or audit by representatives of the City at all times after issuance of the Notice of Termination and for a period of three (3) years, thereafter, and such records shall be retained for that period. After acceptance of the Work by the Engineer, the Engineer may make payments on the basis of interim estimates pending issuance of the Final Estimate in accordance with Section IX-7, “Final Payment,” of the General Conditions when, in the Engineer's opinion, the amount thus paid, together with all amounts previously paid or allowed, will not result in total compensation in excess of that to which the Contractor will be entitled. All payments, including payment upon the Final Estimate shall be subject to deduction for prior payments and amounts, if any, to be kept or retained under the provisions of the contract. If this contract is terminated by the City for cause, and it is later determined that the proper basis for a termination for cause did not exist, the termination shall be deemed to have been a termination for convenience and governed by the terms of this contract dealing with such termination. If the contract is terminated by the City for cause or convenience, such termination shall neither act as a waiver by the City of its right to require the Contractor to correct defects in the Work performed by the Contractor nor void any warranties applicable to the Work performed under the contract. The provisions of this Section 5 shall be included in all subcontracts. In the event of conflict between the termination provisions of this Section 8 and any other provision or the contract, this Section 5 shall prevail. Performance by Sureties. In the event of any termination as herein before 9. provided, City shall immediately give written notice thereof to Contractor and Contractor's City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-6 sureties and the sureties shall have the right to take over and perform the Agreement, provided, however, that if the sureties, within five (5) working days after giving them said notice of termination, do not give the City written notice of their intention to take over the performance of the Agreement and do not commence performance thereof within five (5) working days after notice to the City of such election, City may take over the Work and prosecute the same to completion by contract or by any other method it may deem advisable, for the account, and at the expense, of Contractor, and the sureties shall be liable to City for any excess cost or damages occasioned City thereby; and, in such event, City may, without liability for so doing, take possession of and utilize in completing the Work such materials, appliances, plant, and other property belonging to Contractor as may be on the site of the Work and necessary therefore. Should Contractor contract in an individual capacity, the surety bond shall contain the following provision: “Should Contractor contract in the Contractor’s individual capacity, the death of the Contractor shall not relieve the surety of its obligations.” Hold-Harmless Agreement and Contractor's Insurance. Contractor agrees to, and 10. shall, hold City, its elective and appointive boards, officers, agents, and employees harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for property damage which may arise from Contractor's or any of Subcontractor's operations under this Agreement, whether such operations be by Contractor or by any Subcontractor or Subcontractors, or by any one or more persons directly or indirectly employed by, or acting as agent for, Contractor or any Subcontractor or Subcontractors. Contractor agrees to, and shall, defend City and its elective and appointive boards, officers, agents, and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid operations, provided as follows: (A) The City does not, and shall not, waive any rights against Contractor which it may have by reason of the aforesaid hold-harmless agreement, because of the acceptance by City, or the deposit with City by Contractor, of any of the insurance policies hereinafter described in Paragraph 15, “Insurance” hereof. (B) That the aforesaid hold-harmless agreement by Contractor shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered, by reason of any of the aforesaid operations of Contractor or any Subcontractor, regardless of whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages. Insurance. The Contractor shall take out and maintain during the life of this 11. Agreement the following policies of insurance: Workers' Compensation and Employers' Liability Insurance providing (A) full statutory coverage. In signing this Agreement, the Contractor makes the following certification, required by Section 1861 of the California Labor Code: "I am aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers' Compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of the work of this contract". City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-7 Comprehensive General Liability Insurance. (B) Public Liability Insurance (includes premises, elevator - if applicable, products, completed operations, personal injury and contractual): Bodily Injury Liability: (1) $ 500,000 each person $1,000,000 each occurrence Property Damage Liability [includes XCU (explosion, collapse, (2) and underground damage); water damage and broad form property damage or third party liability]: $ 500,000 per occurrence Comprehensive Automobile Liability Insurance (includes owned, non-(C) owned, and hired vehicles): Bodily Injury Liability: (1) $ 500,000 per person $1,000,000 each occurrence Property Damage Liability: (2) $ 500,000 each occurrence It is agreed that the insurance required by Subsections B and C, in an (D) aggregate amount of not less than ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000), shall be extended to include as additional insured the City of South San Francisco, its elective and appointive boards, commissions, officers, agents, employees, with respect to operations performed by the Contractor, as described herein. Evidence of this insurance described above shall be provided to City upon execution of this Agreement and shall be subject to approval of the City Attorney as to form, amount, and carrier. The policy of insurance shall also contain a provision indicating that such insurance shall not be reduced or cancelled except upon thirty (30) calendar days written notice to City. In addition, the following endorsement shall be made on said policy of insurance: "The following are named as additional insured on the above policies: The City of South San Francisco, its elective and appointive boards, officers, agents, and employees." "Notwithstanding any other provision in this policy, the insurance afforded hereunder to the City of South San Francisco shall be primary as to any other insurance or re-insurance covering or available to the City of South San Francisco, and such other insurance or reinsurance shall not be required to contribute to any liability or loss until and unless the approximate limit of liability afforded hereunder is exhausted." The above requirements that the City be named as additional insured, that the insurance shall be primary to any other, and that the insurance not be cancelled without notice, shall be provided in the form of an endorsement signed by an authorized representative of the insurance company providing coverage, who shall declare his or her authority to sign on behalf of the insurer. City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-8 Proof of Carriage of Insurance. Contractor shall furnish City through the 12. Engineer, concurrently with the execution hereof, with satisfactory proof of carriage of the insurance required and that each carrier shall give City at least thirty (30) calendar days prior notice of the cancellation or change of any policy during the effective period of this contract. Further, if the Contractor’s insurance policy includes a self-insured retention that must be paid by a named insured as a precondition of the insurer’s liability, or which has the effect of providing that payments of the self-insured retention by others, including additional insureds or insurers do not serve to satisfy the self-insured retention, such provisions must be modified by special endorsement so as to not apply to the additional insured coverage required by this agreement so as to not prevent any of the parties to this agreement from satisfying or paying the self-insured retention required to be paid as a precondition to the insurer’s liability. Additionally, the certificates of insurance must note whether the policy does or does not include any self-insured retention and also must disclose the deductible. Provisions Cumulative. The provisions of this Agreement are cumulative, and in 13. addition to and not in limitation of, any other rights or remedies available to City. Notices. All notices shall be in writing and delivered in person or transmitted by 14. certified mail, postage prepaid. Notices required to be given to City shall be addressed as follows: City Clerk City Hall, 400 Grand Avenue South San Francisco, California 94080 Notices required to be given to Contractor shall be addressed as follows: _________________________________________________________________________ _________________________________________________________________________ Notices required to be given sureties of Contractor shall be addressed as follows: _________________________________________________________________________ Notices required to be given to the Escrow Agent of Contractor, if any, shall be addressed as follows: _________________________________________________________________________ Interpretation. As used herein, any gender includes each other gender, the 15. singular includes the plural, and vice versa. City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-9 IN WITNESS WHEREOF, two (2) identical counterparts of this Agreement, consisting of twelve (12) pages (being pages A-1 through A-12), each of which counterparts shall for all purposes be deemed an original of said Agreement, have been duly executed by the parties hereinabove named, on the day and year first hereinabove written. ATTEST: CITY: City of South San Francisco, a municipal corporation By: City Clerk Mike Futrell, City Manager CONTRACTOR: ATTEST: By: (If Contractor is an individual, so state. If Contractor is a Corporation, a corporate seal or signatures of the President or Vice President and the Secretary Treasurer are required). City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-10 ATTACHMENT A ESCROW AGREEMENT FOR SECURITY DEPOSITS IN LIEU OF RETENTION THIS ESCROW AGREEMENT is made and entered into by and between the City of South San Francisco whose address is 400 Grand Ave., P.O. Box 711, South San Francisco, CA 94083, hereinafter referred to as "City," and ________________________________________,whose address is ___________________________________________________________, hereinafter called “Contractor” and ______________________________________________________________,whose address is ___________________________________________________________, hereinafter called “Escrow Agent.” For the consideration hereinafter set forth, the Owner, Contractor, and Escrow Agent agree as follows: 1. Pursuant to Section 22300 of the Public Contract Code of the State of California, Contractor has the option to deposit securities with Escrow Agent as a substitute for retention earnings required to be withheld by Owner pursuant to the Construction Contract entered into between the Owner and Contractor for __________________ in the amount of _______________dollars ($_____) dated ___________ (hereinafter referred to as the “Contract”). Alternately, on written request of the Contractor, the Owner shall make payments of the retention earnings directly to the Escrow Agent. When the Contractor deposits the securities as a substitute for Contract earnings, the Escrow Agent shall notify the Owner within 10 working days of the deposit. The market value of the securities at the time of the substitution shall be at least equal to the cash amount then required to be withheld as retention under the terms of the Contract between the Owner and Contractor. Securities shall be held in the name of _______________, and shall designate the Contractor as the beneficial owner. 2. The Owner shall make progress payments to the Contractor for those funds which otherwise would be withheld from progress payments pursuant to the Contract provisions, provided that the Escrow Agent holds securities in the form and amount specified above. 3. When the Owner makes payment of retentions earned directly to the Escrow Agent, the Escrow Agent shall hold them for the benefit of the Contractor until the time that the escrow created under this contract is terminated. The Contractor may direct the investment of the payments into securities. All terms and conditions of this agreement and the rights and responsibilities of the parties shall be equally applicable and binding when the Owner pays the Escrow Agent directly. 4. Contractor shall be responsible for paying all fees for the expenses incurred by Escrow Agent in administering the Escrow Account and all expenses of the Owner. These expenses and payment terms shall be determined by the Owner, Contractor, and Escrow Agent. 5. The interest earned on the securities or the money market accounts held in escrow and all interest earned on that interest shall be for the sole account of Contractor and shall be subject to withdrawal by Contractor at any time and from time to time without notice to the Owner. 6. Contractor shall have the right to withdraw all or any part of the principal in the Escrow Account only by written notice to Escrow Agent accompanied by written authorization from the Owner to the Escrow Agent that Owner consents to the withdrawal of the amount sought to be withdrawn by Contractor. 7. The Owner shall have a right to draw upon the securities in the event of default by the Contractor. Upon seven day’s written notice to the Escrow Agent from the Owner of the default, the Escrow Agent shall immediately convert the securities to cash and shall distribute the cash as instructed by the Owner. City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-11 8. Upon receipt of written notification from the Owner certifying that the Contract is final and complete, and that the Contractor has complied with all requirements and procedures applicable to the Contract, Escrow Agent shall release to Contractor all securities and interest on deposit less escrow fees and charges of the Escrow Account. The escrow shall be closed immediately upon disbursement of all moneys and securities on deposit and payments of fees and charges. 9. Escrow Agent shall rely on the written notifications from the Owner and the Contractor pursuant to Sections (5) to (8), inclusive, of this Agreement, and the Owner and Contractor shall hold Escrow Agent harmless from Escrow Agent’s release and disbursement of the securities and interest as set forth above. 10. The names of the persons who are authorized to give written notice or to receive written notice on behalf of the Owner and on behalf of Contractor in connection with the foregoing, and exemplars of their respective signatures are as follows: On behalf of Owner: On behalf of Contractor: Title Title Name Name Signature Signature Address Address On behalf of Escrow Agent: Title Name Signature Address At the time the Escrow Account is opened, the Owner and Contractor shall deliver to the Escrow Agent a fully executed counterpart of this Agreement. City of South San Francisco Bid No. 2618 Francisco Terrace Storm Drain City Project sd1701 A-12 IN WITNESS WHEREOF, the parties have executed this Agreement by their proper officers on the date first set forth above. Owner: Contractor: Title Title Name Name Signature Signature Approved as to form: Attest: City Attorney Date City Clerk City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-918 Agenda Date:9/26/2018 Version:1 Item #:8. Motion to approve the Minutes for the meetings of August 8, 2018, August 22, 2018, September 12, 2018 and September 19, 2018. City of South San Francisco Printed on 9/21/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-898 Agenda Date:9/26/2018 Version:1 Item #:9. Motion confirming payment registers for September 26,2018.(Richard Lee, Director of Finance) The payments shown in the attached payment register are accurate and sufficient funds were available for payment (payroll items excluded). Attachment: Payment Register City of South San Francisco Printed on 9/20/2018Page 1 of 1 powered by Legistar™ Payment Listing by Department for City Council Review Payments issued between and9/4/2018 9/16/2018 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION CITY ATTORNEY MEYERS, NAVE, RIBACK 9/7/2018 2703302018070368 E 100-04110-5003 55,141.67 PROF SRVCS THROUGH 07/31/2018 - CITY ATTOR 9/7/2018 2703302018070392 E 100-04110-5003 15,065.84 PROF SRVCS THROUGH 07/31/2018 - KASHIWA F OYSTER POINT VENTURES LLC 9/12/2018 27043807/25/18 E 100-04110-5080 60,000.00 OYSTER POINT NEGOTIATED SETTLEMENT PAYME SHENKMAN & HUGHES PC 9/5/2018 27027807/20/2018 E 100-04110-5080 30,000.00 REIMBURSEMENT REQUEST PURSUANT TO SECTI Payments issued for CITY ATTORNEY $160,207.51 CITY CLERK AMERICAN LANGUAGE SERVICE 9/7/2018 270349CC376917 E 100-02110-5062 439.66 LA-TRANSLATION ENGLISH TO SPANISH DISTRICT 9/7/2018 270349CC376927 E 100-02110-5062 301.60 LA-TRANSLATION ENGLISH TO SPANISH DISTRICT 9/7/2018 270349CC376930 E 100-02110-5062 95.00 LA-TRANSLATION ENGLISH TO SPANISH DISTRICT 9/7/2018 270349CC376932 E 100-02110-5062 297.57 LA-TRANSLATION ENGLISH TO SPANISH DISTRICT CORODATA RECORDS MANAGEMENT IN9/7/2018 270305RS3000986 E 100-02110-5001 808.41 RECORD STORAGE FROM 07/1/18 THROUGH 07/ DAILY JOURNAL CORPORATION 9/7/2018 270306B3164078 E 100-02110-5024 73.50 ORD SUMMARY - MISSION RD UUD PRE-ADOPT 9/7/2018 270306B3164172 E 100-02110-5024 79.50 ORD SUMMARY - COMMERCIAL LINKAGE FEE PRE 9/7/2018 270306B3164176 E 100-02110-5024 76.50 ORD SUMMARY - CA PUBLIC EMPLOYEE RETIREM 9/7/2018 270306B3167823 E 100-02110-5024 487.50 NOTICE OF PH 988 ECR SUMMERHILL 9/7/2018 270306B3168266 E 100-02110-5024 84.00 ORD SUMMARY - MISSION RD UUD POST-ADOPT 9/7/2018 270306B3168272 E 100-02110-5024 88.50 ORD SUMMARY - COMMERCIAL LINKAGE FEE POS 9/7/2018 270306B3169297 E 100-02110-5024 121.50 NOTICE OF PH INCLUSIONARY HOUSING REGULAT DIVERGENT LAUGUAGE SOLUTIONS 9/7/2018 270349CC376934 E 100-02110-5062 3,393.39 LA-TRANSLATION SVCS - 2018 ELECTION (TAGALO 9/7/2018 270349CC376936 E 100-02110-5062 320.00 LA-TRANSLATION FOR ELECTION FROM ENGLISH LISA MICHELLE POPE 9/7/2018 270335180806 E 100-02110-5024 125.00 TRANSCRIPTION SERVICES FOR JUNE 27, 18 SP CC 9/7/2018 270335180807 E 100-02110-5024 187.50 TRANSCRIPTION SERVICES FOR APRIL 4, 18 MEAS 9/7/2018 270335180813 E 100-02110-5024 312.50 TRANSCRIPTION SERVICES FOR JULY 27, 18 SCHO 9/7/2018 270335180820 E 100-02110-5024 250.00 TRANSCRIPTION SERVICES FOR JULY 24, 18 ENVIR 9/7/2018 270335180824 E 100-02110-5024 343.75 TRANSCRIPTION SERVICES FOR MAY 22, 2018 EN NEOPOST USA INC 9/14/2018 27054256059745 E 100-02110-5027 9.47 METER RENTAL/STANDARD MAINTENANCE 10/1/ Payments issued for CITY CLERK $7,894.85 Monday, September 17, 2018 Page 1 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco CITY COUNCIL KARYL MATSUMOTO 9/14/2018 270535090918 E 100-01110-5030 15.00 KM: EXPENSE REIMBURSEMENT NEOPOST USA INC 9/14/2018 27054256059745 E 100-01110-5027 5.38 METER RENTAL/STANDARD MAINTENANCE 10/1/ RICHARD GARBARINO 9/12/2018 2704078/1-8/28/18 E 100-01110-5031 110.09 RG: EXPENSE REIMBURSEMENT AUG 2018 9/12/2018 2704078/1-8/28/18 E 100-01110-5071 35.51 RG: EXPENSE REIMBURSEMENT AUG 2018 ROYAL PIN DONUTS 9/7/2018 270349cc378343 E 100-01110-5031 70.56 RG: FOOD FOR CORP YARD MTG 8/7/18 SAFEWAY STORE 9/7/2018 270349cc378330 E 100-01110-5031 16.38 SB: SUPPLIES-KISHIWADA MARATHON WINNER 9/7/2018 270349cc378333 E 100-01110-5030 67.33 SB: SUPPLIES & REFRESHMENTS INDIA INDEPEND SMART & FINAL STORES LLC 9/7/2018 270343031637 E 100-01110-5020 43.86 SUPPLIES AT MSB FOR CITY COUNCIL MEETINGS 8 9/12/2018 270457050218 E 100-01110-5020 38.29 SUPPLIES AT MSB FOR CITY COUNCIL MEETINGS 5 SSF CHAMBER OF COMMERCE 9/7/2018 270349cc378345 E 100-01110-5031 45.00 PG: TKT TO CHAMBER LUNCH & LEARN 8/16/18 STAPLES BUSINESS ADVANTAGE 9/14/2018 2705658050908570/3861664E 100-01110-5020 49.57 CMO OFFICE SUPPLIES 9/14/2018 2705658050908570/3861664E 100-01110-5020 77.89 CMO OFFICE SUPPLIES 9/14/2018 2705658050908570/3861664E 100-01110-5020 311.06 CMO OFFICE SUPPLIES 9/14/2018 2705658050908570/3861668E 100-01110-5020 380.00 CMO OFFICE SUPPLIES USPS 9/7/2018 270349cc378335 E 100-01110-5020 7.90 SB: POSTAGE FOR PROCLAMATION MAILER Payments issued for CITY COUNCIL $1,273.82 CITY MANAGER 15FIVE 9/7/2018 270349cc378414 E 100-05110-5021 35.40 MF: 15FIVE SUBSCRIPTION AUG 2018 ADVANCED BUSINESS FORMS 9/12/2018 27035630544 E 100-05110-5025 108.73 SB: BUSINESS CARDS EXPEDIA SALES 9/12/2018 270471cc378727 E 100-05110-5032 19.00 ML: TRAVEL EXPENSE LEAGUE OF CA CITIES CONF GOGOAIR.COM 9/12/2018 270471cc378419 E 100-05110-5032 4.95 ML: IN-FLIGHT WIFI INTERNET USAGE FEE HEATHER ENDERS 9/14/2018 27051109/08/18 E 100-05110-5005 626.21 HE: EXPENSE REIMBURSEMENT 9/8/18 PARTNERSHIP RESOURCES GROUP 9/12/2018 270440PRG #SSF1803 E 101-05101-5005 11,175.00 COMM CIV CAMPUS FUNDRAISING PROG JULY 20 POSTMASTER- LINDEN OFFICE 9/7/2018 270336PERMIT#138 E 100-05110-5027 4,024.00 POSTAGE - CITYWIDE NEWSLETTER SSF CHAMBER OF COMMERCE 9/7/2018 270349cc378416 E 100-05110-5031 45.00 MF: TKT TO CHAMBER LUNCH & LEARN MTG 8/1 STAPLES BUSINESS ADVANTAGE 9/14/2018 2705658050908570/3861664E 100-05110-5020 50.00 CMO OFFICE SUPPLIES 9/14/2018 2705658050908570/3861664E 100-05110-5020 77.89 CMO OFFICE SUPPLIES 9/14/2018 2705658050908570/3861664E 100-05110-5020 311.07 CMO OFFICE SUPPLIES 9/14/2018 2705658050908570/3861668E 100-05110-5020 381.90 CMO OFFICE SUPPLIES TECHCONNECT 9/7/2018 270349cc378433 E 100-05110-5032 595.00 MF: REG FOR DEFENSE TECHCONNECT FALL CONF THE SWENSON GROUP, INC. 9/14/2018 270570224102 E 100-05110-5020 50.26 SUPPLIES FOR CITY HALL COPIER Monday, September 17, 2018 Page 2 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco CITY MANAGER Payments issued for CITY MANAGER $17,504.41 COMMUNICATIONS INC ESSENCE PRINTING 9/14/2018 270513133640 E 100-05130-5025 3,919.89 PRINTING OF DINING GUIDES 2018 Payments issued for COMMUNICATIONS $3,919.89 CITY TREASURER CHANDLER ASSET MGMT, INC 9/5/2018 2702451807SOSF E 100-03110-5001 7,002.15 JULY 2018 INVESTMENT PORTFOLIO MGMT SVCS Payments issued for CITY TREASURER $7,002.15 ECONOMIC & COMMUNITY DEVELOPMENT ALLISON KNAPP WOLLAM 9/5/2018 2702629-2018 E 270-10413-5005 8,538.75 GENESIS IMPLEMENTATION CONSULTING SVCS 7/ AMAZON.COM 9/14/2018 270573CC379004 E 100-10520-5021 1,571.35 PC - LIGHT METERS FOR INSPECTORS 9/14/2018 270573CC379005 E 100-10520-5021 640.31 PP -MONITOR FOR PLAN REVIEW CONWAY INC 9/5/2018 27024701018787 E 100-10115-5024 4,000.00 PROMOTIONAL ADS IN SITE SELECTION MANAGZI FEDEX 9/5/2018 2702556-229-73469 E 222-10310-5020 33.43 FEDEX SERVICE TO HUD/LARRY W. (SF-424 CERTIF 9/5/2018 2702556-257-39435 E 222-10310-5020 28.74 FEDEEX SERVICE TO HUD/R.CEDILLOS (SF-4240 FY FEHR AND PEERS 9/5/2018 270256122854 E 100-10410-5005 7,333.21 EAST OF 101 STUDY 4/28 THROUGH 5/25/18 9/5/2018 270256123601 E 100-10410-5005 14,660.99 EAST OF 101 5/26 THROUGH 6/29/2018 9/5/2018 270256123952 E 100-10410-5005 21,032.50 EAST OF 101 STUDY 6/30 THROUGH 7/27/2018 MEYERS, NAVE, RIBACK 9/7/2018 2703302018050379 E 270-10115-5003 149.85 MEYERS NAVE OYSTER POINT HOTEL DEV MICHAEL BAKER INTL, INC 9/5/2018 2702691023649 E 222-10310-5005 6,114.36 FY 18-19 CONSULTING SERVICES AGREEMENT WI NELSON/NYGAARD CONSULT ASSOC 9/12/2018 27043372781 E 100-10410-5005 5,134.50 ON CALL SERVICES FOR TRAFFIC ENGINEERING 9/14/2018 27054173005 E 100-10410-5005 2,412.50 ON CALL SERVICES FOR TRAFFIC ENGINEERING NEOPOST USA INC 9/14/2018 27054256059745 E 100-10110-5027 5.20 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 100-10410-5027 29.93 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 100-10520-5027 3.39 METER RENTAL/STANDARD MAINTENANCE 10/1/ PLACEWORKS 9/5/2018 27027265920 E 100-10410-5005 3,755.62 MINIMUM LOT SIZE 6/1 THROUGH 6/30/2018 9/5/2018 27027266132 E 100-10410-5005 2,022.15 MINIMUM LOT SIZE 7/1 THROUGH 7/31/2018 STAPLES BUSINESS ADVANTAGE 9/5/2018 2702828050908482 E 100-10410-5020 458.41 PLANNING OFFICE SUPPLIES 9/14/2018 2705658050908474 E 100-10520-5020 87.60 MISC OFFICE SUPPLIES THE SWENSON GROUP, INC. 9/14/2018 270570224102 E 100-10115-5020 50.25 SUPPLIES FOR CITY HALL COPIER Monday, September 17, 2018 Page 3 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco ECONOMIC & COMMUNITY DEVELOPMENT WEST COAST CODE CONSULTANTS 9/14/2018 270577I-411-218-07-01 E 100-10520-5005 40,254.88 BUILDING PLAN REVIEW SERVICES 07/01/18-07/3 9/14/2018 270577I-411-218-07-03 E 100-10520-5005 13,430.00 BUILDING INSPECTION SERVICES VENOOK 07/01/ 9/14/2018 270577I-411-218-07-05 E 100-10520-5005 6,597.50 BUILDING ADMIN SERVICES ROMERO 07/01/18-0 Payments issued for ECONOMIC & COMMUNITY DEVELOPMENT $138,345.42 FINANCE ADVANCED BUSINESS FORMS 9/12/2018 27035630550 E 100-06210-5020 1,310.16 A/P CHECK STOCK CDW GOVERNMENT LLC 9/5/2018 270244NWM9859 E 100-06210-5045 328.11 MICROSOFT OFFICE PRO - FINANCE DEPT. DELL MARKETING LP 9/14/2018 27050610265646068 E 100-06210-5045 1,541.26 DESKTOP COMPUTER - FINANCE DEPARTMENT DEPARTMENT OF TRANSPORTATION 9/14/2018 27050704-SMX-101-0001-02 E 100-06110-5029 2,000.00 2018-19 AIRSPACE LEASE RELATED TO WALKWAY GOVERNMENT TAX SEMINARS, LLC 9/14/2018 27052112/11/18 E 100-06210-5033 790.00 2018 GOVERNMENT TAX SEMINAR-12/11/18 - M. NEOPOST USA INC 9/14/2018 27054256059745 E 100-06210-5027 156.93 METER RENTAL/STANDARD MAINTENANCE 10/1/ OFFICE DEPOT INC 9/14/2018 270543134553289001 E 100-06210-5020 384.08 OFFICE SUPPLIES - FINANCE 9/14/2018 270543134559483001 E 100-06210-5020 89.59 OFFICE SUPPLIES - FINANCE PERSONNEL DATA SYSTEMS, INC. 9/12/2018 270445040424 E 100-06110-5005 92.50 VISTA HRMS IMPLEMENTATION - SVCS RENDERE 9/12/2018 270445040534 E 100-06110-5005 4,594.50 SAAS VISTA TIME - AUGUST 2018 READYREFRESH 9/5/2018 27027508H0030587083 E 100-06210-5021 8.73 WATER COOLER RENTAL - FINANCE STAPLES BUSINESS ADVANTAGE 9/14/2018 2705658051263688 E 100-06210-5020 80.95 OFFICE SUPPLIES Payments issued for FINANCE $11,376.81 FIRE AIRGAS USA, LLC 9/14/2018 2704859956054796 E 100-11610-5021 444.44 EMS SUPPLIES 9/14/2018 2704859956054797 E 100-11610-5021 198.70 EMS SUPPLIES AMERICAN COUNCIL ON EXERCISE 9/12/2018 270471cc378643 E 100-11110-5033 379.00 JM-STAFF DEVELOPMENT CERTIFICATION BOUND TREE MEDICAL LLC 9/12/2018 27037682969663 E 100-11610-5021 2,232.25 EMS SUPPLIES CDF/STATE FIRE TRAINING 9/12/2018 27038809102018 E 100-11720-5033 40.00 STAFF DEVELOPMENT TRAINING - FIREFIGHTER I CENTRAL COUNTY FIRE DEPARTMENT9/12/2018 27038916468 E 100-11710-5045 4,903.59 SUPPRESSION SOFTWARE PROGRAM FY 17/18 COACHING SYSTEMS 9/12/2018 270471cc378598 E 100-11610-5033 50.00 MS-STAFF DEVELOPMENT - R WALLS COMCAST CABLE COMMUNICATION IN9/12/2018 2703928155200440364083 E 100-11310-5021 165.60 DISASTER PREPAREDNESS/CERT COSTCO 9/12/2018 270471cc378743 E 100-11730-5021 410.74 AR-OPERATING SUPPLIES 9/12/2018 270471cc378743 E 100-11710-5021 94.43 AR-OPERATING SUPPLIES 9/12/2018 270471cc378743 E 100-11110-5021 199.86 AR-OPERATING SUPPLIES Monday, September 17, 2018 Page 4 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco FIRE COUNTY OF SAN MATEO 9/14/2018 2705011YSS21808 E 100-11610-5021 956.00 MONTHLY TRUNKED RADIO SYSTEM FEE AUG 201 DEVIN FLANNERY 9/7/2018 27031308/09/18 E 100-11610-5034 1,110.00 STAFF DEVELOPMENT TUITION REIMBURSEMENT ECMS, INC. 9/5/2018 270252INV206892 E 100-11710-5061 237.35 TURNOUT UNIFORM REPAIRS ELITE COMMAND TRAINING 9/12/2018 270471cc378618 E 100-11720-5033 535.00 JB-STAFF DEVELOPMENT TRAINING - D FLANNERY FEDEX 9/12/2018 2704046-294-02441 E 100-11610-5027 81.48 POSTAGE 9/12/2018 2704046-299-65587 E 100-11610-5027 61.11 EMS SUPPLIES GAS HOUSE COVE MARINA INC 9/12/2018 2704083528 E 100-11710-5028 114.50 FUEL FOR RESCUE BOAT INDUSTRIAL EMERGENCY COUNCIL 9/12/2018 270471cc378619 E 100-11720-5033 695.00 JB-STAFF DEVELOPMENT RESCUE SYSTEMS CLASS I-WOMEN 9/12/2018 270471cc378612 E 100-11720-5033 150.00 JB-STAFF DEVELOPMENT TRAINING MEMBERSHI L N CURTIS & SONS 9/5/2018 270263INV199590 E 100-11710-5061 58.33 HELMET SHIELD 9/5/2018 270263INV204624 E 100-11710-5061 891.48 PPE - BOOTS 9/5/2018 270263INV208653 E 100-11710-5061 874.00 TURNOUT PPE 9/5/2018 270263INV209655 E 821-11755-5051 2,195.49 SUPPRESSION TURNOUT PPE DRYER 9/5/2018 270263INV209655 E 100-11710-5021 6,380.64 SUPPRESSION TURNOUT PPE DRYER 9/5/2018 270263INV211749 E 100-11710-5061 450.11 PROTECTIVE CLOTHING LEE & ASSOCIATES RESCUE EQUIP 9/5/2018 27026559922 E 100-11720-5033 3,500.00 ROPE RESCUE TRAINING COURSE (4) LEO GRANADOS 9/12/2018 27041109042018 E 100-11720-5033 128.30 STAFF DEVELOPMENT REIMBURSEMENT CDL ME LIFE-ASSIST INC 9/5/2018 270266873452 E 100-11610-5021 896.06 EMS SUPPLIES 9/12/2018 270419873500 E 100-11610-5021 259.97 EMS SUPPLIES 9/14/2018 270533874972 E 100-11610-5021 961.27 EMS SUPPLIES 9/14/2018 270533875009 E 100-11610-5021 16.91 EMS SUPPLIES 9/14/2018 270533875050 E 100-11610-5021 997.28 EMS SUPPLIES 9/14/2018 270533875091 E 100-11610-5021 934.87 EMS SUPPLIES LOWE'S CREDIT SERVICES 9/5/2018 270267916250 E 100-11730-5021 44.15 STATION SUPPLIES 9/5/2018 270267916256 E 100-11710-5021 4.91 VEHICLE SUPPLIES 9/7/2018 270325918496 E 100-11730-5021 51.61 STATION SUPPLIES 9/12/2018 270421915421 E 100-11730-5021 16.58 STATION SUPPLIES 9/12/2018 270421915691 E 100-11730-5021 25.87 STATION SUPPLIES 9/12/2018 270421916113 E 100-11710-5051 101.47 MAINTENANCE & OPERATION EQUIPMENT 9/12/2018 270421916251 E 100-11710-5021 29.37 OPERATING SUPPLIES 9/12/2018 270421916328 E 100-11730-5021 12.26 OPERATING SUPPLIES 9/12/2018 270421916703 E 100-11730-5021 20.75 STATION SUPPLIES Monday, September 17, 2018 Page 5 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco FIRE LOWE'S CREDIT SERVICES 9/12/2018 270421916922 E 100-11730-5021 20.28 STATION SUPPLIES 9/12/2018 270421918289 E 100-11730-5021 3.09 STATION SUPPLIES MEDWASTE MANAGEMENT, LLC 9/12/2018 270429MW32858 E 100-11610-5021 99.00 EMS SUPPLIES 9/14/2018 270536MW32859 E 100-11610-5021 99.00 EMS SUPPLIES MIRION TECH (CANBERRA) INC 9/14/2018 27053890154031 E 100-11710-5021 16,643.52 OPERATING SUPPLIES - 18 DOCIMETERS NEOPOST USA INC 9/14/2018 27054256059745 E 100-11210-5027 183.46 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 100-11610-5027 2.59 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 100-11223-5027 12.18 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 100-11110-5027 21.39 METER RENTAL/STANDARD MAINTENANCE 10/1/ O'REILLY AUTO PARTS 9/12/2018 270471cc378788 E 100-11710-5021 43.69 AR-OPERATING SUPPLIES PARADISE CAY PUBLICATION 9/12/2018 270471cc378597 E 100-11110-5021 12.95 MS-OPERATING SUPPLIES - PUBLICATION PENINSULA UNIFORMS & EQUIP INC9/14/2018 270546153591 E 100-11110-5036 48.77 NEW HIRE NAME TAGS RICHARD WALLS 9/7/2018 27035208/16/18 E 100-11610-5033 303.75 STAFF DEVELOPMENT - TUITION REIMBURSEMEN SAN MATEO REGIONAL NETWORK INC9/12/2018 27045322653 E 100-11710-5071 1,006.75 STATION ALERTING CABLE SERVICE 9/12/2018 27045322680 E 100-11710-5071 1,006.75 STATION ALERTING CABLE SERVICE SARKIS SIGNS 9/12/2018 270471cc378750 E 100-11210-5021 49.16 AR-OPERATING SUPPLIES - NAME PLAQUE FOR FI SATCOM GLOBAL, INC. 9/12/2018 270471cc378665 E 100-11310-5021 42.75 JM-MONTHLY SATELLITE SERV - DISASTER PREP SEARS 9/12/2018 270471cc378753 E 100-11730-5021 24.99 AR-STATION SUPPLIES STAPLES CREDIT PLAN 9/12/2018 270471cc378708 E 100-11710-5021 5.78 AR-STATION SUPPLIES TRAVIS HIGDON 9/12/2018 27041208/23/18 E 100-11610-5033 200.00 STAFF DEVELOPMENT PAR FF RECERTIFICATION R WEST MARINE PRODUCTS 9/14/2018 270578004804 E 100-11710-5021 108.73 OPERATING SUPPLIES WFCB-OSH COMMERCIAL SERVICES 9/12/2018 270471cc378707 E 100-11730-5021 32.76 AR-STATION SUPPLIES WITMER PUBLIC SAFETY GROUP INC9/5/2018 270289E1752040 E 100-11710-5061 1,811.85 HELMETS WORLDPOINT ECC 9/12/2018 270480+4080969 E 100-11750-5021 2,098.50 AHA CPR CARDS AND COURSE MATERIALS 9/12/2018 270480+4080980 E 100-11750-5021 500.00 AHA CPRS CARDS AND COURSE MATERIAL 9/12/2018 270480+4081008 E 100-11750-5021 145.45 AHA CARDS AND COURSE MATERIAL ZOLL MEDICAL CORPORATION 9/14/2018 2705822740522 E 100-11610-5021 146.83 EMS SUPPLIES 9/14/2018 2705822740540 E 100-11610-5021 146.83 EMS SUPPLIES 9/14/2018 2705822741323 E 100-11610-5021 410.45 EMS SUPPLIES ZORBA PIZZA & DELI 9/12/2018 270471cc378614 E 100-11720-5033 715.36 JB-CERT-SUPPRESSION DISASTER PREP PM TRAINI Payments issued for FIRE $57,857.34 Monday, September 17, 2018 Page 6 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco HUMAN RESOURCES CROWN AWARDS INC 9/7/2018 270349cc378332 E 100-09113-5031 9.97 SB: SUPPLIES FOR LEAP PROG ALLSTAR MTG NEOPOST USA INC 9/14/2018 27054256059745 E 100-09110-5027 5.15 METER RENTAL/STANDARD MAINTENANCE 10/1/ NORCAL HR DIRECTORS 9/12/2018 27043409/27-09/28/2018 E 100-09110-5032 170.00 NORCAL HR DIRECTORS' FALL 2018 CONFERENCE SHERI BOLES 9/12/2018 270375082818 E 100-09113-5031 128.47 SB: EXPENSE REIMBURSEMENT AUG 2018 Payments issued for HUMAN RESOURCES $313.59 INFORMATION TECHNOLOGY AMAZON WEB SERVICES, INC. 9/5/2018 270237147040524 E 785-16110-5040 363.92 CLOUD BACKUP SERVICES FOR AUGUST 2018 CDW GOVERNMENT LLC 9/14/2018 270498NXS1014 E 785-16110-5040 463.30 RSA TOKENS CIVIC LLC 9/5/2018 2702461723 E 785-16110-5005 200.00 MONTHLY MAINTENANCE MYCIVIC APP - SEP 201 DELL MARKETING LP 9/7/2018 27030710263272609 E 785-16110-5042 230.00 RAID CONTROLLER GRANICUS, INC. 9/5/2018 270259102724 E 785-16110-5040 500.00 GRANICUS MONTHLY SERVICE FEE KELSO COMMUNICATIONS 9/7/2018 270320I2018128 E 785-16110-5005 2,867.39 TELECOMMUNICATIONS MAINTENANCE - 10/201 NEOPOST USA INC 9/14/2018 27054256059745 E 785-16110-5027 0.34 METER RENTAL/STANDARD MAINTENANCE 10/1/ READYREFRESH 9/5/2018 27027518H0023270820 E 785-16110-5020 65.35 DRINKING WATER AND COOLER RENTAL - IT DEPT SEECLICKFIX, INC. 9/7/2018 2703422017-1790 E 785-16110-5040 7,700.00 SEECLICKFIX ANNUAL LICENSE VISION INTERNET PROVIDERS 9/7/2018 27035137382 E 785-16110-5040 10,000.00 CITY WEBSITE ANNUAL FEE 8/2018-8/2019 Payments issued for INFORMATION TECHNOLOGY $22,390.30 LIBRARY 360TRAINING.COM 9/5/2018 270285cc377988 E 100-15999-5033 26.60 AP - REGISTRATION STAFF TRAINING 9/5/2018 270285cc378203 E 100-15999-5999 165.00 KB - REGISTRATION FEE, FOOD HANDLER AMAZON CAPITAL SERVICES, INC 9/12/2018 2703651CWC-N4MT-KJJX E 100-15230-5030 43.98 ADULT SERVICES PROGRAM SUPPLIES 9/12/2018 2703651M6X-WP94-VNX4 E 100-15230-5030 21.82 ADULT SERVICES PROGRAM SUPPLIES AMAZON.COM 9/12/2018 270471cc377910 E 100-15410-5022 421.55 AP - BOOKS BAILEY'S TEST STRIPS 9/5/2018 270285cc378062 E 100-15999-5999 36.50 AP - PROGRAM SUPPLIES (SNACK) BAKER & TAYLOR INC 9/5/2018 270241L1123914 E 100-15210-5022 10,128.53 BOOKS 9/5/2018 270241L1123914 E 100-15310-5022 3,035.95 BOOKS 9/5/2018 270241L1123914 E 100-15999-5999 217.74 BOOKS BRODART CO 9/5/2018 270243B5404776 E 100-15220-5022 1,943.54 BOOKS - JUV CALIFA GROUP 9/12/2018 2703801472 E 100-15110-5004 34.72 GALE - NATIONAL GEOGRAPHIC ARCHIVE HOST FE CALIFORNIA LIBRARY ASSOCIATION9/12/2018 270381200008947 E 100-15110-5032 395.00 2018 CLA CONFERENCE ADMISSION - A. TALOMA Monday, September 17, 2018 Page 7 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco LIBRARY CALIFORNIA LIBRARY ASSOCIATION9/12/2018 270381300006456 E 100-15110-5031 40.00 CLA MEMBERSHIP DUES - A. TALOMA CITY OF SOUTH SAN FRANCISCO 9/5/2018 270285cc377948 E 100-15430-5031 1.00 AP - PARKING FEE 9/5/2018 270285cc378195 E 100-15430-5031 1.00 KB - PARKING FEE COSTCO 9/5/2018 270285cc377905 E 100-15999-5999 403.14 AP - PROG SUPPLIES & REFRESHMENTS (HW) 9/5/2018 270285cc377905 E 100-15430-5021 54.46 AP - PROG SUPPLIES & REFRESHMENTS (HW) 9/7/2018 270349cc377801 E 100-15999-5999 268.94 LA-LOS CERRITOS SNACK SUPPLIES 9/7/2018 270349cc377807 E 100-15999-5999 268.94 LA- MARTIN SNACK SUPPLIES 9/7/2018 270349cc377809 E 100-15999-5999 483.02 LA- SPRUCE SNACK SUPPLIES DEMCO INC. 9/5/2018 2702516416934 E 100-15110-5021 383.79 TECHNICAL PROCESSING SUPPLIES 9/12/2018 2703986414960 E 100-15110-5021 35.10 TECHNICAL PROCESSING SUPPLIES EXPLORATORIUM 9/14/2018 270514EXP00700 E 100-15110-5033 2,700.00 ART OF TINKERING WRKSHOP - 4 STAFF 3 DAYS FLICKR AT YAHOO 9/5/2018 270285CC377970 E 100-15110-5021 44.95 ABS - PHOTO STORAGE, 2 YEARS GE MONEY BANK/AMAZON 9/5/2018 2702570010 3871 E 100-15210-5022 162.37 BOOKS / AV 9/5/2018 2702570010 3871 E 100-15110-5021 39.57 BOOKS / AV 9/5/2018 2702570010 3871 E 100-15210-5043 604.28 BOOKS / AV INDEED 9/12/2018 270471cc378314 E 100-15430-5030 4.84 KB - ADVERSTING, JOB ANNOUNCEMENT LAKESHORE LEARNING MATERIALS 9/12/2018 2704173171700818 E 100-15110-5021 394.82 FURNITURE FOR CHILDREN'S AREA LOS METATES 9/5/2018 270285cc377967 E 100-15430-5031 100.14 AP - STAFF PLANNING MEETING REFRESHMENTS MASE GROUP LLC 9/12/2018 27042400067A E 100-15110-5001 1,377.00 CATALOGING SERVICE 9/12/2018 27042400313 E 100-15110-5001 287.90 DVD LABELING SERVICE NEOPOST USA INC 9/14/2018 27054256059745 E 100-15110-5027 31.53 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 100-15410-5027 2.17 METER RENTAL/STANDARD MAINTENANCE 10/1/ OCLC WESTERN 9/12/2018 2704360000618775 E 100-15110-5001 501.62 CATALOGING AND METADATA SUB-MONTHLY PAYPAL 9/5/2018 270285CC377964 E 100-15110-5021 7.50 ABS - WEBSITE - HISTORY TIMELINE PEET'S COFFEE & TEA 9/5/2018 270285cc377913 E 100-15430-5031 103.50 AP - STAFF PLANNING MEETING REFRESHMENTS PENINSULA LIBRARY SYSTEM 9/12/2018 27044212504 E 100-15230-5019 27,413.80 OVERDRIVE E-BOOKS COLLECTION 18/19 SCHOLASTIC CORPORATION 9/12/2018 27045517630796 E 100-15220-5022 166.14 JUV - BOOKS SHELBY WRIGHT 9/12/2018 27048109152018 E 100-15110-5001 750.00 END OF INTERNSHIP STIPEND - S. WRIGHT SKILLPATH SEMINARS 9/5/2018 270285CC377972 E 100-15110-5033 199.00 ABS - FEE FOR COMMUNICATION SEMINAR THE GALE GROUP, INC 9/5/2018 27028364199891 E 100-15210-5022 60.90 BOOKS 9/5/2018 27028364200130 E 100-15210-5022 357.31 BOOKS 9/5/2018 27028364209456 E 100-15210-5022 117.32 BOOKS Monday, September 17, 2018 Page 8 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco LIBRARY THE GALE GROUP, INC 9/5/2018 27028364224134 E 100-15210-5022 107.48 BOOKS Payments issued for LIBRARY $53,944.46 NON-DEPARTMENTAL AT&T 9/12/2018 2703709391060752 E 781-07210-5071 333.83 PHONE CHARGES 9/12/2018 2703709391060755 E 781-07210-5071 142.14 PHONE CHARGES 9/12/2018 2703709391060817 E 781-07210-5071 99.08 PHONE CHARGES 9/12/2018 2703709391060821 E 781-07210-5071 301.04 PHONE CHARGES 9/12/2018 2703709391060848 E 781-07210-5071 74.85 PHONE CHARGES 9/12/2018 2703709391060973 E 781-07210-5071 225.02 PHONE CHARGES 9/12/2018 2703719391060753 E 781-07210-5071 2,561.14 PHONE CHARGES 9/14/2018 270490650 829 1947 221 7 E 781-07210-5071 206.71 PHONE CHARGES BLUE SHIELD OF CALIFORNIA 9/12/2018 270374182320003086 E 783-00000-4341 15,093.18 SEPTEMBER 2018 HEALTH INSURANCE PREMIUM 9/14/2018 270494182320004241 E 783-00000-4342 588,611.91 SEPTEMBER 2018 HEALTH INSURANCE PREMIUM CALIFORNIA WATER SERVICE 9/12/2018 2703843779544444 E 781-07210-5073 63,781.16 WATER SERVICE CALIFORNIA WATER SERVICE CO 9/12/2018 2703850165444444 E 781-07210-5073 331.19 WATER SERVICE 9/12/2018 2703853194444444 E 781-07210-5073 34.48 WATER SERVICE 9/12/2018 2703853310807997 E 781-07210-5073 45.31 WATER SERVICE 9/12/2018 2703855187444444 E 781-07210-5073 203.56 WATER SERVICE 9/12/2018 2703857733252569 E 781-07210-5073 75.35 WATER SERVICE 9/12/2018 2703857807444444 E 781-07210-5073 15.12 WATER SERVICE 9/12/2018 2703859639955148 E 781-07210-5073 37.80 WATER SERVICE COMCAST CABLE COMMUNICATION IN9/7/2018 2703048155 20 044 0045948 E 100-07110-5001 42.70 CITY HALL CONFERENCE ROOM BUSINESS CABLE EMPLOYEE BENEFIT SPECIALISTS 9/7/2018 2703110089948-IN E 783-00000-4341 1,553.00 AUGUST 2018 WORKTERRA ADMIN FEES 9/7/2018 2703110089948-IN E 783-00000-4342 2,707.50 AUGUST 2018 WORKTERRA ADMIN FEES KAISER FOUNDATION HEALTH PLAN 9/14/2018 270530SEP 2018 E 783-00000-4342 145,445.63 KAISER PERMANENTE HEALTHCARE PREMIUMS S 9/14/2018 270530SEP 2018 E 783-00000-4341 244,511.90 KAISER PERMANENTE HEALTHCARE PREMIUMS S NEOPOST USA INC 9/4/2018 182198739/4/18 E 110-00000-5027 4,000.00 CITYWIDE POSTAGE METER REPLENISHMENT 9/14/2018 27054256059745 E 100-07110-5027 0.16 METER RENTAL/STANDARD MAINTENANCE 10/1/ PACIFIC GAS & ELECTRIC COMPANY9/7/2018 2703325616338496-1 E 781-07210-5070 102,292.70 GAS/ELECTRIC SERVICE 9/12/2018 2704390211654236-2 E 781-07210-5070 22.67 GAS/ELECTRIC SERVICE 9/12/2018 2704392814692974-1 E 781-07210-5070 93.02 GAS/ELECTRIC SERVICE Monday, September 17, 2018 Page 9 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco NON-DEPARTMENTAL PACIFIC GAS & ELECTRIC COMPANY9/12/2018 2704395548997000-8 E 781-07210-5070 3,013.69 GAS/ELECTRIC SERVICE 9/12/2018 2704396152070396-0 E 781-07210-5070 28.17 GAS/ELECTRIC SERVICE 9/12/2018 2704398286202617-4 E 781-07210-5070 166.05 GAS/ELECTRIC SERVICE 9/12/2018 2704398923172305-0 E 781-07210-5070 50.15 GAS/ELECTRIC SERVICE 9/14/2018 2705440285235090-5 E 781-07210-5070 283.90 GAS/ELECTRIC SERVICE 9/14/2018 2705442500898977-1 E 781-07210-5070 50.78 GAS/ELECTRIC SERVICE 9/14/2018 2705443635896993-3 E 781-07210-5070 62.03 GAS/ELECTRIC SERVICE 9/14/2018 2705444575602530-5 E 781-07210-5070 10.17 GAS/ELECTRIC SERVICE 9/14/2018 2705445177240092-8 E 781-07210-5070 502.93 GAS/ELECTRIC SERVICE 9/14/2018 2705445534400076-9 E 781-07210-5070 24.62 GAS/ELECTRIC SERVICE 9/14/2018 2705445961515715-9 E 781-07210-5070 40.09 GAS/ELECTRIC SERVICE 9/14/2018 2705446035223249-4 E 781-07210-5070 209.17 GAS/ELECTRIC SERVICE 9/14/2018 2705446846819681-8 E 781-07210-5070 74.94 GAS/ELECTRIC SERVICE 9/14/2018 2705447785237739-7 E 781-07210-5070 107.02 GAS/ELECTRIC SERVICE 9/14/2018 2705448177181277-3 E 781-07210-5070 67.19 GAS/ELECTRIC SERVICE 9/14/2018 2705448701065497-5 E 781-07210-5070 69.96 GAS/ELECTRIC SERVICE PREFERRED BENEFIT INS ADM-PBIA9/12/2018 270449EIA25654 E 783-00000-4341 70,645.65 SEPTEMBER 2018 BALANCE PREMIUM - DENTAL PRIORITY 1 PUBLIC SAFETY EQUIP9/14/2018 2705496940 E 784-07511-6008 4,886.51 GARAGE- VEH 108 STANDARD INSURANCE CO 9/5/2018 270281338329 E 783-00000-4349 30,644.32 SEPTEMBER 2018 MONTHLY LIFE INSURANCE ACT STEWART CHEVROLET 9/14/2018 270567131804 E 784-07511-6008 30,871.88 PURCHASE OF ONE (1) 2018 CHEVROLET COLORA 9/14/2018 270567133094 E 784-07511-6005 29,644.07 PURCHASE OF CHEVY COLORADO FOR POLICE DE 9/14/2018 270567133334 E 784-07511-6005 29,644.07 PURCHASE OF CHEVY COLORADO FOR POLICE DE 9/14/2018 27056716316 E 784-07511-6008 30,030.65 PURCHASE OF ONE (1) 2018 DODGE CHARGER FO TRISTAR RISK MANAGEMENT 9/14/2018 270572105067 E 782-07410-5081 88,014.34 AUGUST 2018 WORKERS' COMP LOSS REPLENISH Payments issued for NON-DEPARTMENTAL $1,491,984.50 PARKS & RECREATION A+ LIVESCAN SERVICES 9/7/2018 2702923810 E 100-17275-5037 99.00 PRINTS/ NAVARRO 9/7/2018 2702923863 E 100-17275-5037 99.00 PRINTS/GOMEZ 9/7/2018 2702923890 E 100-17275-5037 99.00 PRINTS/ MANANSALA 9/12/2018 2703533985 E 100-17275-5037 99.00 PRINTS/ LOPEZ AED SUPERSTORE 9/7/2018 270349CC378183 E 100-17230-5033 238.12 DS - BATTERY RESUSITATOR Monday, September 17, 2018 Page 10 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PARKS & RECREATION AIRPORT AUTO PARTS INC 9/12/2018 270359388311 E 100-17320-5050 302.41 PK - SUPPLIES ALLIANT INSURANCE SERVICES INC9/7/2018 270296903167 E 100-17110-5061 779.00 SPECIAL EVENTS INSURANCE -CONCERT IN THE P AMAZON MKTPLACE 9/7/2018 270349C377866 E 100-17110-5021 28.98 AD - OFFICE SUPPLIES FOR REC ADMIN OFFICE 9/7/2018 270349CC377863 E 100-17110-5051 25.97 SR - RIBBON FOR ART DEDICATION CEREMONY 9/7/2018 270349CC378286 E 100-17230-5033 155.24 DS - WRISTBANDS/MASKS 9/12/2018 270471CC378663 E 100-17340-5050 150.10 JR: PARKS DIV - SUPPLIES 9/12/2018 270471CC378668 E 100-17310-5021 28.00 GM: ARBORIST ASSESSMENT TOOL 9/12/2018 270471CC378669 E 100-17310-5021 9.99 GM: ARBORIST ASSESSMENT TOOL 9/12/2018 270471CC378671 E 100-17310-5021 29.43 GM: PARKS PHONE CASE 9/12/2018 270471CC378678 E 100-17340-5050 102.90 GM: ARBORIST SUPPLIES 9/12/2018 270471CC378679 E 100-17340-5050 329.95 GM: ARBORIST SUPPLIES 9/12/2018 270471CC378682 E 100-17310-5020 26.99 GM: OFFICE SUPPLIES 9/12/2018 270471CC378685 E 100-17970-5061 748.90 GM:WATER BAGS FOR HILLSIDE TREES AMAZON.COM 9/7/2018 270349CC377867 E 100-17110-5021 53.30 AD - OFFICE SUPPLIES AMERICAN RED CROSS 9/7/2018 270349CC37816 E 100-17230-5033 108.00 DS - LIFE GUARD CERTIFICATION 9/7/2018 270349CC378205 E 100-17230-5033 360.00 DS - LG CERTIFICATION ARAMARK UNIFORM SERVICES 9/5/2018 270239758760285 E 100-17320-5034 299.80 PK - UNIFORMS 9/5/2018 270239758772093 E 100-17320-5034 300.46 PK - UNIFORMS 9/7/2018 270298758783921 E 100-17310-5034 277.55 PK - UNIFORMS 9/7/2018 270298758795671 E 100-17320-5034 314.30 PK UNIFORMS 9/7/2018 270298758807528 E 100-17320-5050 233.38 PK UNIFORMS B&B CUSTOM DESIGNS 9/7/2018 27029917250 E 100-17275-5001 185.98 SUMMER CAMP UNIFORMS 9/7/2018 27029917342 E 100-17240-5021 409.58 CHAMPIONSHIP HOODED SWEATSHIRTS FOR SU 9/14/2018 27049117353 E 100-17110-5050 606.83 NEW PARK & RECREATION COMMISSION JACKETS 9/14/2018 27049117355 E 100-17110-5061 537.37 CONCERT IN THE PARK EVENT STAFF T-SHIRTS BRIGHTVIEW LANDSCAPE SERVICES 9/14/2018 2704955891324 E 234-17530-5050 7,910.00 AUG 18 LANDSCAPE MAINTENANCE 9/14/2018 2704955891324 E 233-17533-5050 1,621.00 AUG 18 LANDSCAPE MAINTENANCE 9/14/2018 2704955891324 E 232-17532-5050 1,710.00 AUG 18 LANDSCAPE MAINTENANCE 9/14/2018 2704955891324 E 231-17531-5050 10,604.00 AUG 18 LANDSCAPE MAINTENANCE 9/14/2018 2704955891324 E 100-17320-5001 21,750.00 AUG 18 LANDSCAPE MAINTENANCE BROADMOOR LUMBER & PLYWOOD CO 9/5/2018 27024248341 E 100-17320-5050 243.08 PK - MILLER & MISSION RD 9/5/2018 27024248398 E 100-17320-5050 135.47 TREE PLANTING Monday, September 17, 2018 Page 11 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PARKS & RECREATION BROADMOOR LUMBER & PLYWOOD CO 9/12/2018 27037748453 E 100-17320-5050 96.14 PK - LANDSCAPE 9/12/2018 27037748482 E 100-17320-5050 273.13 PK LANDSCAPE C&L SPORTING GOODS 9/7/2018 2703011956-1 E 100-17275-5021 254.01 EMERGENCY KIT SUPPLIES 9/7/2018 270301CHILD CARE E 100-17275-5021 73.74 ICE PACKS SUMMER CAMP CA PARK AND RECREATION DEPT 9/12/2018 270471CC378681 E 100-17310-5033 1,425.00 GM: MAINT MGT SCHOOL - GREG MEDIATI CA PARKS & RECREATION SOCIETY 9/7/2018 270349CC377864 E 100-17310-5033 1,725.00 SR - MAINTENANCE SCHOOL TUTION FOR S. CON 9/12/2018 270471CC378684 E 100-17310-5033 1,725.00 GM: CPRS MAINT MGT SCHOOL - NATHAN PISANI CALIFORNIA DEPT OF SOCIAL SVCS9/7/2018 270302377822 E 100-17275-5029 1,210.00 MONTE VERDE LICENSING FEE CANVA PARTY LTD 9/12/2018 270471CC378683 E 100-17110-5020 119.40 GM: GRAPHIC DESIGN SOFTWARE CINTAS CORPORATION LOC 464 9/7/2018 270303464185178 E 100-17230-5051 334.76 OMP POOL AQUATIC SUPPLIES 9/7/2018 270303464191399 E 100-17230-5051 184.49 OMP POOL MAINTENANCE SUPPLIES CITY & COUNTY OF SAN FRANCISCO9/12/2018 27039129080 E 100-17970-5061 2.07 PK WATER 9/12/2018 27039129081 E 100-17970-5061 1,093.20 ELKWOOD WATER SVC 9/12/2018 27039129105 E 100-17970-5061 33.49 W ORANGE & CAMARITAS 9/12/2018 27039129106 E 100-17320-5050 24.87 SLEBECKER 9/12/2018 27039129665 E 100-17970-5061 2.07 ELKWOOD PARK 9/12/2018 27039129690 E 100-17970-5061 33.49 WEST ORANGE & CAMARITAS AVE COMCAST CABLE COMMUNICATION IN9/14/2018 2705008155 20 044 0216218 E 100-17276-5021 53.77 MONTHLY CABLE BILL FOR MAGNOLIA SENIOR CE 9/14/2018 2705008155 20 044 0252494 E 100-17240-5021 37.34 MONTHLY CABLE BILL FOR TERRABAY BLDG. - AU CONSTANT CONTACT, INC. 9/12/2018 270471CC378675 E 100-17110-5050 195.00 GM: E-MARKETING MONTHLY SERVICE 9/12/2018 270471CC378677 E 100-17110-5050 195.00 GM: MONTHLY EMAIL SERVICES COSTCO 9/7/2018 270349cc377790 E 100-17275-5061 215.94 LA- PROGRAM SUPPLIES 9/7/2018 270349cc377794 E 100-17275-5061 57.92 LA-PROGRAM SUPPLIES/SUMMER CAMP 9/7/2018 270349cc377799 E 100-17275-5021 696.12 SUMMER CAMP SUPPLIES 9/7/2018 270349cc377803 E 100-17275-5021 539.90 LA- MONTE VERDE SNACK SUPPILES 9/7/2018 270349cc377812 E 100-17275-5021 504.99 LA- PONDO SNACK SUPPLIES CRAIGSLIST 9/7/2018 270349cc377814 E 100-17275-5033 75.00 LA- JOB POSTING DANELE DIXON 9/14/2018 27050909/07/18 E 100-17275-5061 500.00 PROGRAM SUPPLIES DBA: THE PRODUCE COMPANY 9/14/2018 270505090618 E 100-17320-5050 950.00 REIMBURSEMENT FOR LANDSCAPE WORK ON CIT DELL MARKETING LP 9/14/2018 27050610258002350 E 100-17110-5050 2,097.29 PK LAPTOP DELTA GROWERS INC 9/7/2018 27030877475 E 100-17320-5050 2,026.50 PK TURF DEVIL MOUNTAIN NURSERY 9/7/2018 270309186447/1 E 100-17970-5061 2,570.59 HILL SIDE BLVD TREE PLANTING Monday, September 17, 2018 Page 12 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PARKS & RECREATION DEVIL MOUNTAIN NURSERY 9/7/2018 270309186448/1 E 100-17970-5061 1,693.32 CENTENNIAL WAY TREES DOGPOOPBAGS.COM LLC 9/7/2018 2703107303 E 100-17320-5050 3,000.00 PK - DOG WASTE BAG ELIFEGUARD, INC 9/7/2018 270349CC378468 E 100-17230-5034 56.60 DS - WHISTLES FOR LIFEGUARDS AT OMP POOL EWING IRRIGATION PRODUCTS INC 9/5/2018 2702545986715 E 100-17320-5050 534.98 PK - SUPPLIES FASTSIGNS 9/7/2018 270349CC377865 E 100-17110-5061 1,232.79 EO - 4 BANNERS FOR CONCERT IN THE PARK 201 FOOD SERVICE PARTNERS OF CA 9/14/2018 270518SSF0188 E 100-17276-5061 2,599.30 SENIOR MEALS FOR AUGUST 2018 9/14/2018 270518SSF0189 E 100-17276-5061 1,563.75 SENIOR MEALS THIRD FLOOR SENIOR CENTER (22 GFI ENTERTAINMENT, LLC 9/7/2018 27031418081401 E 100-17110-5061 16,250.00 PRODUCTION SVCS - CONCERT IN THE PARK 2018 GREG MEDIATI 9/12/2018 270428082318 E 100-17310-5033 1,438.00 MEDIATI EDUCATION REIMB. HOME DEPOT 9/12/2018 270471CC378664 E 100-17340-5050 165.30 JR: PARKS DIV SUPPLIES HOUSE OF COLOR SSF 9/7/2018 270317107678 E 100-17320-5050 156.87 MAG CENTER PAINT HUB INTERNATIONAL INSUR SVCS 9/7/2018 270318HUBInsAug18 E 100-17210-5004 1,588.18 INSURANCE PAYMENT FOR FACILITY RENTALS FO JUDY BARRETTO 9/12/2018 27037308/18/18 E 100-17260-5021 58.07 EMPLOYEE REIMBURSEMENT FOR SEWING SUPPL LAKESHORE LEARNING MATERIALS 9/12/2018 2704173970220918 E 100-17275-5021 1,652.95 PROGRAM SUPPLIES LINCOLN EQUIPMENT INC 9/12/2018 270420NT146230 E 100-17230-5021 854.64 CHLORINE FOR OMP POOL 9/12/2018 270420NT146231 E 100-17230-5021 585.81 OMP POOL MAINTENANCE SUPPLIES LOWE'S CREDIT SERVICES 9/7/2018 270326902099 E 100-17320-5050 6.97 PK - PIPE 9/7/2018 270349CC378197 E 100-17230-5050 172.58 DS - OMP POOL PAINT SUPPLIES 9/7/2018 270349CC378200 E 100-17230-5050 50.35 DS - PAINT THINNER 9/7/2018 270349CC378201 E 100-17230-5050 79.26 DS - OMP POOL SUPPLIES 9/7/2018 270349CC378219 E 100-17230-5022 23.42 DS - OMP POOL SUPPLIES - TAPE/KITCHEN 9/7/2018 270349CC378466 E 100-17230-5050 61.10 DS - OMP POOL SUPPLIES 9/7/2018 270349CC378467 E 100-17230-5022 82.06 DS- OMP POOL SUPPLIES 9/12/2018 270421902170 E 231-17531-5050 125.86 SIGN HILL SUPPLIES 9/12/2018 270421902205 E 231-17531-5050 81.76 CO SUPPLIES 9/12/2018 270421909078 E 100-17275-5021 246.51 PROGRAM SUPPLIES MARK A CLEMENTI, PHD 9/12/2018 27042309-04-18 E 100-17310-5039 825.00 FITNESS FOR DUTY EVALUATION-RUYBAL MICHAEL'S 9/7/2018 270349CC377792 E 100-17275-5061 130.43 LA-PROGRAM SUPPLIES MOSS RUBBER & EQUIPT CORP 9/7/2018 270331CA94-941557 E 100-17320-5050 28.06 WATER TRUCK HOSE NEOPOST USA INC 9/14/2018 27054256059745 E 100-17110-5027 186.19 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 100-17310-5027 5.92 METER RENTAL/STANDARD MAINTENANCE 10/1/ OLIVER ABRAMSON 9/7/2018 2702938/11/2018 E 100-17230-5022 18.56 REIMBURSEMENT FOR OLIVER ABRAMSON - POO Monday, September 17, 2018 Page 13 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PARKS & RECREATION ORCHARD SUPPLY 9/12/2018 270471CC378676 E 100-17320-5050 243.00 GM: CITY HALL PLANTS PACIFIC NURSERIES 9/7/2018 270333SI-386548 E 100-17320-5050 32.08 PK PLANT PAYPAL 9/7/2018 270349CC378190 E 100-17230-5033 250.00 DS - CPO CERTIFICATION PENINSULA SPORTS OFFICIALS 9/7/2018 270334101877 E 100-17240-5001 1,602.00 UMPIRE FEES FOR SPORTS PROGRAMS 9/7/2018 270334101883 E 100-17240-5001 801.00 UMPIRE FEES FOR SPORTS PROGRAMS PLAN-IT INTERACTIVE, INC. 9/12/2018 2704489/7/18 E 100-17110-5061 9,720.00 CHILDREN'S ARE ENTERTAINMENT/CONCERT IN T PRODUCTIVE PRINTING & GRAPHICS9/5/2018 27027433017 E 100-17110-5061 579.03 CONCERT IN THE PARK FLYERS -2018 9/14/2018 27055033049 E 100-17240-5021 114.71 BUSINESS CARDS FORTERRABAY BUILDING QUICKSCORES LLC 9/14/2018 270552181730 E 100-17240-5021 126.00 SCOREKEEPING SERVICES FOR SPORTS PROGRAM QUILL CORPORATION 9/14/2018 2705539529961 E 100-17110-5021 100.75 OFFICE SUPPLIES FOR MSB ADMN OFFICE 9/14/2018 2705539587916 E 100-17210-5021 21.93 USB CABLES FOR COMPUTERS READYREFRESH 9/7/2018 27033708H0030586945 E 100-17276-5021 65.10 MONTHLY BOTTLED WATER SERVICE FOR MAGN 9/7/2018 27033708H0030587026 E 100-17110-5021 38.64 MONTHLY BOTTLED WATER SERVICE FOR MSB AD ROMEO PACKING COMPANY 9/14/2018 270554134937 E 100-17320-5050 2,392.50 PK - 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OPER SUPP 9/12/2018 270471CC378680 E 100-17320-5050 24.99 GM: PARKS SUPPLIES SPECIALTY'S CAFE & BAKERY 9/12/2018 270471CC378666 E 100-17340-5021 129.63 GM: URBAN FOREST PLAN MTG (8) SPRINKLER WAREHOUSE 9/12/2018 270471CC378652 E 100-17320-5050 195.94 BC: PARKS DIV - SUPPLIES 9/12/2018 270471CC378654 E 100-17320-5050 39.63 BC: PARKS DIV - SUPPLIES 9/12/2018 270471CC378657 E 100-17320-5050 88.81 BC: PARKS DIV - SUPPLIES 9/12/2018 270471CC378660 E 100-17320-5050 137.36 BC: PARKS DIV - SUPPLIES STAPLES BUSINESS ADVANTAGE 9/7/2018 2703468050908507 E 100-17210-5020 2,196.95 OFFICE SUPPLIES & PRINTER CARTRIDGES FOR RE 9/7/2018 2703468050908537 E 100-17240-5020 576.16 OFFICE SUPPLIES FOR TERRABAY BUILDING STAPLES CREDIT PLAN 9/7/2018 270349CC378044 E 100-17276-5020 164.79 KC - SENIOR CENTER OFFICE SUPPLIES 9/7/2018 270349CC378045 E 100-17276-5020 621.69 KC - SENIOR PROGRAM SUPPLIES TOMMY SEUNG NAM KIM 9/7/2018 2703218-25-2018 E 100-17260-5001 560.00 INSTRUCTOR FEES FOR GOLF LESSONS SESSION 3 TONY ESCOBAR 9/7/2018 2703128-28-2018 E 100-17240-5001 2,430.00 OFFICIATING FEES FOR SPORTS PROGRAMS TREESTUFF.COM 9/7/2018 270348INV-423182 E 100-17340-5050 1,078.41 TREE SUPPLIES CREW 9/12/2018 270469INV-423268 E 100-17340-5050 149.99 PK - TREE Monday, September 17, 2018 Page 15 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PARKS & RECREATION UNITED SITE SERVICES OF CA 9/5/2018 270286114-7182977 E 100-17320-5001 132.75 PK - RESTROOMS 9/5/2018 270286114-7196115 E 100-17320-5001 100.89 PK - RESTROOMS 9/5/2018 270286114-7196116 E 100-17320-5001 100.89 PK - RESTROOMS 9/7/2018 270349CC378033 E 100-17110-5061 2,009.87 MM -PORTABLE RESTROOMS FOR CONCERT IN T 9/7/2018 270350114-7228406 E 100-17320-5001 110.09 PK - RESTROOMS 9/12/2018 270472114-7054727 E 100-17320-5050 132.75 PK - COMM. GREEN W.W. GRAINGER INC. 9/5/2018 2702889858341440 E 100-17320-5034 27.56 PK - VEST WHITING'S FOODS 9/7/2018 270349cc378080 E 100-17275-5061 80.87 LA-PROGRAM SUPPLIES 9/7/2018 270349CC378082 E 100-17275-5061 41.95 LA- PROGRAM SUPPLIES 9/7/2018 270349cc378083 E 100-17275-5061 4.50 LA-PROGRAM SUPPLIES 9/7/2018 270349cc378084 E 100-17275-5061 26.88 LA-PROGRAM SUPPLIES 9/7/2018 270349cc378085 E 100-17275-5061 50.15 LA-PROGRAM SUPPLIES 9/7/2018 270349cc378086 E 100-17275-5061 3.50 LA-PROGRAM SUPPLIES 9/7/2018 270349cc378087 E 100-17275-5061 13.50 LA-PROGRAM SUPPLIES Payments issued for PARKS & RECREATION $143,778.87 POLICE ALAMEDA COUNTY SHERIFF'S OFC 9/12/2018 27036111/13-11/18/18 E 100-12720-5033 506.00 RIFLE/SNIPER COURSE - ZHANG AMERICAN MESSAGING SERVICES 9/5/2018 270238M7175147SI E 100-12410-5071 18.52 PAGER SERVICE - PD & WQCP ARROWHEAD FORENSICS 9/14/2018 270489108971 E 100-12110-5020 856.67 EVIDENCE SUPPLIES 9/14/2018 270489109246 E 100-12110-5020 1,087.04 EVIDENCE SUPPLIES BOUND TREE MEDICAL LLC 9/12/2018 27037662669568 E 100-12720-5021 206.46 AED CABINET 9/12/2018 27037682932952 E 100-12720-5021 1,141.71 AED READY PACK-TAXABLE 9/12/2018 27037682970971 E 100-12720-5021 5,357.40 NASAL NARCAN SPRAY BRENDAN HART 9/5/2018 27026108/30/18 BH E 100-12720-5036 4,477.84 REIMBURSEMENT FOR POLICE ACADEMY - HART CA ASSOC OF HOSTAGE NEGOTIATOR9/12/2018 27037809/24-09/28/18 E 100-12720-5033 150.00 CAHN CONF 'LATE FEE' CHARGE $50 X 3 CALIFORNIA NARCOTIC OFFICERS 9/12/2018 27038210/09/18 E 100-12720-5033 45.00 INTRODUCTION TO DAR - BUTTERFIELD CARLOS GUZMAN 9/7/2018 27031508/02/2018 E 100-12720-5034 161.36 REIMBURSEMENT OF RESERVE UNIFORM SHIRTS COUNTY OF SAN MATEO SHERIFF 9/14/2018 27050209/10-09/13/18 E 100-12720-5033 825.00 CIT TRAINING - 3 GIL/TOSCANO/KERRIGAN CRIME SCENE CLEANERS INC 9/12/2018 27039469559 E 100-12210-5001 420.00 CLEAN & DISINFECT DRYING CABINETS FIRSTTWO, INC. 9/12/2018 2704061085 E 100-12720-5001 2,400.00 INVESTIGATION DATABASE - AGENCY LICENSE MERRITT COMMUNICATIONS INC. 9/12/2018 27043077071 E 100-12110-5020 452.14 HEADSET SUPPLIES FOR DISPATCH Monday, September 17, 2018 Page 16 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco POLICE NEOPOST USA INC 9/14/2018 27054256059745 E 100-12310-5027 64.90 METER RENTAL/STANDARD MAINTENANCE 10/1/ PENINSULA PET RESORT INC 9/12/2018 270443109002 E 100-12720-5021 176.40 4 DAY CANINE KENNELING - GROOT/MICHELS PENINSULA UNIFORMS & EQUIP INC9/12/2018 270444149040 E 100-12720-5034 512.15 BULLET PROOF VEST - SHAM 9/12/2018 270444149040 E 100-12999-5999 412.17 BULLET PROOF VEST - SHAM 9/12/2018 270444150931 E 100-12999-5999 411.28 BULLET PROOF VEST - TOSCANO 9/12/2018 270444150931 E 100-12720-5034 491.24 BULLET PROOF VEST - TOSCANO 9/12/2018 270444AUG 2018 E 100-12720-5034 1,451.01 UNIFORM ITEMS PET FOOD EXPRESS 9/12/2018 27044608/03/18 DF E 100-12720-5021 163.09 CANINE FOOD - FINNEGAN 9/12/2018 27044608/16/18 NM E 100-12720-5051 195.72 CANINE FOOD - MICHELS 9/12/2018 27044608/27/18 CD E 100-12720-5061 87.38 CANINE FOOD - DEVAN PRODUCTIVE PRINTING & GRAPHICS9/14/2018 27055033043 E 100-12210-5025 497.09 ENVELOPES/DETENTION CERTS - PRINTING SCOTT CAMPBELL 9/12/2018 27038708/30/2018 SC E 100-12720-5033 2,000.00 TUITION REIMBURSEMENT PER MOU SSF SCAVENGER CO INC 9/12/2018 2704630000737563 E 100-12110-5020 180.00 DOCUMENT DESTRUCTION SERVICE STAPLES BUSINESS ADVANTAGE 9/14/2018 2705658051263617 E 100-12110-5020 365.34 OFFICE SUPPLIES TELECOMMUNICATIONS ENG ASSOC 9/14/2018 27056945561 E 100-12410-5001 4,735.00 MONTHLY RADIOS MAINT AUG 2018 9/14/2018 27056945565 E 100-12410-5005 16,583.33 PROF. MONTHLY SERVICES AUG 2018 TURBO DATA SYSTEMS, INC. 9/12/2018 27047028638 E 100-12720-5001 4,339.02 CITATION PROCESSING - AUG 2018 UPS FREIGHT 9/12/2018 2704760000V52111348 E 100-12210-5027 46.72 DATA911 COMP SHIPPING CHARGES VERIZON WIRELESS 9/14/2018 2705749813732796 E 100-12410-5071 1,543.44 DATA CARDS SERVICES FOR LAPTOPS IN PATROL C WILLIAM J. FEISTER 9/14/2018 2705152018-29 E 100-12720-5036 800.00 PRE-EMPLOYMENT POLYGRAPHS (2) Payments issued for POLICE $53,160.42 PUBLIC WORKS A-1 MILMAC INC 9/12/2018 270354244013-001 E 710-13943-5021 281.88 REPLACEMENT FITTINGS FOR BELT PRESS ACE FIRE EQUIPMENT & SVC CO 9/12/2018 2703559970 E 710-13922-5050 120.00 FIRE EXTINGUISHER ANNUAL MAINTENANCE AD BRAKES 9/14/2018 27048316521 E 781-13610-5021 150.37 GARAGE- VEH 510 SENSOR AHERN RENTALS, INC. 9/12/2018 27035819093372-4 E 710-13941-5050 179.72 ROLLING SCAFFOLD RENTAL AIRPORT AUTO PARTS INC 9/14/2018 270486389128 E 781-13610-5021 68.76 GARAGE OPER SUPPLIES VEH 506 ALL INDUSTRIAL ELECTRIC SUPPLY9/5/2018 2702355191240 E 710-13941-5051 250.03 MAINTENANCE SUPPLIES 9/12/2018 2703635190807 E 710-13942-5051 292.81 ELECTRICAL TOOLS 9/12/2018 2703635190942 E 710-13922-5051 1,420.81 ELECTRICAL CONDUIT RESTOCK 9/12/2018 2703635190957 E 710-13943-5051 989.64 ELECTRICAL SUPPLIES Monday, September 17, 2018 Page 17 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PUBLIC WORKS ALL INDUSTRIAL ELECTRIC SUPPLY9/12/2018 2703635191059 E 710-13922-5051 1,759.60 ELECTRICAL SUPPLIES - 3 INCH CONDUIT 9/12/2018 2703635191637 E 710-13962-5051 1,407.86 ELECTRICAL SUPPLIES - 3 INCH CONDUIT HARDW ALLIED IRON CO INC 9/5/2018 270236132647 E 781-13610-5001 298.25 GARAGE OPER SUPPLIES ALPHA ANALYTICAL LABORATORIES 9/12/2018 2703648083532-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083533-MD_SSF E 710-13951-5005 163.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083538-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083667-MD_SSF E 710-13953-5004 5.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083668-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083669-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083670-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083695-MD_SSF E 710-13953-5004 55.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083868-MD_SSF E 710-13951-5005 3,953.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083950-MD_SSF E 710-13953-5004 200.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083980-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648083981-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084160-MD_SSF E 710-13953-5004 5.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084161-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084162-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084163-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084164-MD_SSF E 710-13953-5004 58.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084166-MD_SSF E 710-13953-5004 65.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084177-MD_SSF E 710-13953-5004 15.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084178-MD_SSF E 710-13953-5004 5.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648084179-MD_SSF E 710-13953-5004 200.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648091180-MD_SSF E 710-13953-5004 1,029.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648091181-MD_SSF E 710-13953-5004 1,029.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648091309-MD_SSF E 710-13953-5004 1,029.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648091315-MD_SSF E 710-13953-5004 732.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648091353-MD_SSF E 710-13953-5004 1,029.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648091354-MD_SSF E 710-13953-5004 1,029.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648091365-MD_SSF E 710-13951-5005 80.00 FY 2018-2019 ANALYTICAL SERVICES 9/12/2018 2703648091454-MD_SSF E 710-13953-5004 200.00 FY 2018-2019 ANALYTICAL SERVICES Monday, September 17, 2018 Page 18 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PUBLIC WORKS AMAZON MKTPLACE 9/5/2018 270285CC378100 E 710-13910-5051 1,797.99 BS REPLACEMENT SCADA TV 9/12/2018 270471CC378108 E 710-13951-5021 60.74 BS LAB SUPPLIES AMAZON.COM 9/12/2018 270471CC 378621 E 781-13610-5021 27.78 MM CC- GARAGE OPER SUPPLIES 9/12/2018 270471CC 378623 E 781-13610-5020 35.56 MM CC- ENVELOPES FOR ABAG PACKETS TO ALL 9/12/2018 270471CC 378624 E 781-13610-5021 13.78 MM CC- GARAGE STOCK 9/12/2018 270471CC 378626 E 781-13610-5021 6.77 MM CC- GARAGE STOCK 9/12/2018 270471CC 378629 E 781-13610-5021 48.10 MM CC- GARAGE STOCK AMERICAN AIR SYSTEMS INC 9/12/2018 27036618-0816 E 710-13931-5051 942.00 FY 2018-2019 HVAC, BOILERS AND LAB REF UNITS 9/14/2018 27048718-0817 E 710-13932-5051 24,360.00 FY 2018-2019 HVAC, BOILERS AND LAB REF UNITS AMERICAN MESSAGING SERVICES 9/5/2018 270238M7175147SI E 710-13910-5071 77.61 PAGER SERVICE - PD & WQCP AQUA SIERRA CONTROLS INC. 9/12/2018 27036729037 E 710-13932-5051 3,140.51 SERVICE TO STATION TELEMETRY ARAMARK UNIFORM SERVICES 9/12/2018 270368758772086 E 710-13910-5001 168.69 WEEKLY UNIFORM SERVICE 9/12/2018 270368758783914 E 710-13910-5001 144.48 WEEKLY UNIFORM SERVICE 9/12/2018 270368758795664 E 710-13910-5001 201.48 WEEKLY UNIFORM SERVICE 9/12/2018 270368758795665 E 710-13910-5001 229.30 WEEKLY UNIFORM SERVICE 9/12/2018 270368758807521 E 710-13910-5001 135.27 WEEKLY UNIFORM SERVICE 9/12/2018 270368758807522 E 710-13910-5001 203.35 WEEKLY UNIFORM SERVICE 9/14/2018 270488758795667 E 100-13410-5001 174.10 STREET DIVISION UNIFORMS 9/14/2018 270488758795667 E 710-13315-5001 174.10 STREET DIVISION UNIFORMS 9/14/2018 270488758795669 E 781-13610-5001 34.45 GARAGE DIVISION UNIFORMS 9/14/2018 270488758795670 E 781-13610-5001 35.95 GARAGE- SEAT COVERS & SHOP TOWELS 9/14/2018 270488758807524 E 100-13410-5001 105.10 STREET DIVISION UNIFORMS 9/14/2018 270488758807524 E 710-13315-5001 105.10 STREET DIVISION UNIFORMS 9/14/2018 270488758807526 E 781-13610-5001 34.45 GARAGE DIVISION UNIFORMS 9/14/2018 270488758807527 E 781-13610-5001 35.95 GARAGE TOWELS & COVERS 9/14/2018 270488758819303 E 710-13315-5001 111.52 STREET DIVISION UNIFORMS 9/14/2018 270488758819303 E 100-13410-5001 111.53 STREET DIVISION UNIFORMS 9/14/2018 270488758819305 E 781-13610-5001 15.95 GARAGE DIVISION UNIFORMS 9/14/2018 270488758819306 E 781-13610-5001 35.95 GARAGE SHOP TOWELS & COVERS BASQUE CULTURAL CENTER 9/14/2018 270573CC 378989 E 100-13410-5061 86.98 EK CC- LUNCH W/RATERS FOR PW DEPUTY DIR. (4 BLUE LINE TRANSFER INC 9/14/2018 2704930000738253 E 710-13962-5004 83,912.51 BIOSOLIDS (SEWAGE SLUDGE) DISPOSAL BROADMOOR LUMBER & PLYWOOD CO 9/14/2018 27049648408 E 100-13411-5021 154.60 SIDEWALK OPER SUPPLIES Monday, September 17, 2018 Page 19 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PUBLIC WORKS BROADMOOR LUMBER & PLYWOOD CO 9/14/2018 27049648424 E 100-13420-5021 116.68 SIDEWALK OPER SUPPLIES 9/14/2018 27049648569 E 710-13315-5021 243.08 SEWER MAINT OPER SUPPLIES CAL-STEAM INC #2504 9/14/2018 2704973280480 E 720-13720-5021 31.38 MPG OPER SUPPLIES CATFOOTWEAR.COM 9/12/2018 270471CC378110 E 710-13951-5021 163.88 BS SAFETY SUPPLIES CITY AUTO SUPPLY 9/14/2018 2704993-486134 E 781-13610-5021 20.83 GARAGE OPER SUPPLIES VEH 503 9/14/2018 2704993-486136 E 781-13610-5021 122.47 GARAGE STOCK OPER SUPPLIES 9/14/2018 2704993-517424 E 781-13610-5021 152.36 GARAGE OPER SUPPLIES VEH 905 9/14/2018 2704993-556652 E 781-13610-5021 41.49 GARAGE STOCK OPER SUPPLIES VEH 233 9/14/2018 2704993-556925 E 781-13610-5021 488.39 GARAGE VEH 1 & VEH 20 OPER SUPPLIES 9/14/2018 2704993-558754 E 781-13610-5021 24.70 GARAGE OPER SUPPLIES VEH 516 9/14/2018 2704993-559779 E 781-13610-5021 23.47 GARAGE STOCK & VEH 628 9/14/2018 2704993-559931 E 781-13610-5021 283.57 GARAGE STOCK OPER SUPPLIES VEH 6 9/14/2018 2704993-560139 E 781-13610-5021 51.89 GARAGE STOCK 9/14/2018 2704993-560361 E 781-13610-5021 6.71 GARAGE STOCK VEH 312 COOPER SAFETY SUPPLY 9/5/2018 2702487012163-A E 710-13941-5021 236.70 SAFETY SUPPLIES- HIGH VISABILITY VESTS AND HA 9/5/2018 2702487012172-A E 710-13941-5021 53.64 SAFETY SUPPLIES- HIGH VISABILITY VESTS AND HA CROFT TRAILER SUPPLY INC 9/14/2018 270503326884 E 781-13610-5021 49.42 GARAGE OPER SUPPLIES VEH 649 CULLIGAN SANTA CLARA 9/12/2018 2703960089240 E 710-13941-5051 202.40 WATER SOFTENER SERVICE CWEA SPECIALTY CONFERENCES 9/12/2018 270471CC378111 E 710-13910-5021 102.00 BS CWEA MEMBERSIP RENEWAL FOR ABBY PARTI 9/14/2018 270573CC 378284 E 710-13315-5033 102.00 LL CC - CERTIFICATE RENEWAL FOR L.LANGI 9/14/2018 270573CC 378288 E 710-13315-5033 92.00 LL CC- CERTIFICATE RENEWAL FOR P.RUBINO DAN'S DRILLING & FENCING INC 9/12/2018 270397621181 E 720-13720-5005 2,875.00 CHAIN LINK FENCING @ 207 BADEN DENALECT ALARM 9/12/2018 270399R1980 E 710-13910-5050 90.00 QUARTERLY ALARM CHARGE DEPT OF TOXIC SUBSTANCE CTRL 9/14/2018 27050818SM2499 E 740-13820-5031 103.36 FORMER BASAPCO SITE 1/1/18 - 6/30/18 DESIGNOSAUR GRAPHICS, INC 9/14/2018 270573CC 378295 E 100-13999-5999 2,385.00 JL CC- SOUTH CITY SHUTTLE DEVIN KEAHI 9/14/2018 2705318/24/18 E 710-13315-5031 65.00 DOT PHYSICAL RENEWAL APPOINTMENT DI NAPOLI PIZZERIA 9/12/2018 270471CC378103 E 710-13910-5033 450.07 BS LEADERSHIP INSTITUTE HOSTING 9/12/2018 270471CC378104 E 710-13910-5033 65.28 BS LEADERSHIP INSTITUTE HOSTING DISH NETWORK 9/12/2018 270471CC378113 E 710-13910-5005 114.01 BS DISH NETWORK DKS ASSOCIATES 9/14/2018 2705100064980 E 100-13210-5005 172.50 ON-CALL CONSULTING SERVICES ENGINEERING A 9/14/2018 2705100067646 E 100-13210-5005 3,345.00 ON CALL TRAFFIC ENGINEERING SERVICES FY 17-1 DYSERT ENVIRONMENTAL INC 9/12/2018 27040013699 E 710-13953-5005 350.00 FY 2018-2019 SAMPLING SERVICES Monday, September 17, 2018 Page 20 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PUBLIC WORKS DYSERT ENVIRONMENTAL INC 9/12/2018 27040013700 E 710-13953-5005 155.00 FY 2018-2019 SAMPLING SERVICES 9/12/2018 27040013701 E 710-13953-5005 155.00 FY 2018-2019 SAMPLING SERVICES 9/12/2018 27040013702 E 710-13953-5005 350.00 FY 2018-2019 SAMPLING SERVICES 9/12/2018 27040013703 E 710-13953-5005 155.00 FY 2018-2019 SAMPLING SERVICES 9/12/2018 27040013713 E 710-13953-5005 155.00 FY 2018-2019 SAMPLING SERVICES 9/12/2018 27040013714 E 710-13953-5005 155.00 FY 2018-2019 SAMPLING SERVICES FATHOM MARINE, LLC 9/12/2018 2704031545 E 781-13610-5001 431.91 GARAGE- VEH 519 REPAIRS FLYERS ENERGY LLC 9/14/2018 27051618-743909 E 781-13610-5028 1,070.55 CORP YARD DIESEL 9/14/2018 27051618-745642 E 781-13610-5028 1,417.60 FS 65 DIESEL 9/14/2018 27051618-759355 E 781-13610-5028 808.05 CORP YARD DIESEL FONG BROTHERS PRINTING, INC. 9/14/2018 2705172802646 E 100-13999-5999 1,044.43 FREE SOUTH CITY SHUTTLE TIMETABLE 9/14/2018 2705172802647 E 100-13999-5999 68.83 CLOCK WISE ROUTE 9/14/2018 2705172802648 E 100-13999-5999 747.27 SOUTH CITY SHUTTLE TIMETABLE (EFFECT. 7/3/17 GLOBAL SUN LANDSCAPE 9/12/2018 2704094079 E 710-13922-5021 1,734.00 REPLACEMENT IRRIGATION PIPING & FITTINGS 9/14/2018 2705204052 E 710-13922-5021 3,148.00 LANDSCAPE MAINTENANCE GRANITEROCK COMPANY 9/14/2018 2705221126840 E 100-13410-5021 346.65 STREET MAINT OPER SUPPLIES H O BOSTROM COMPANY, INC. 9/12/2018 270471CC 378628 E 781-13610-5021 593.76 MM CC- GARAGE STOCK HACH COMPANY 9/5/2018 270260HACH321603 E 710-13951-5004 867.00 LAB SPECTROPHOTOMETER WARRANTY SERVICE HOWARD GRAY 9/14/2018 2705238/18-8/20/2018 E 710-13315-5031 39.36 STANDBY MILEAGE REIMB. H.GRAY ICMA-RC 9/14/2018 270573CC 378293 E 100-13410-5031 510.00 JL CC- 2018 ICMA ANNUAL CONF. REG. FOR J.LOV IDEXX DISTRIBUTION, INC. 9/12/2018 2704133036090702 E 710-13951-5021 305.98 LAB SUPPLIES IPS GROUP, INC 9/14/2018 27052631689 E 720-13720-5005 5,637.74 FEBRUARY TRANS. FEE & WIRELESS MANAGEME 9/14/2018 27052632883 E 720-13720-5021 81.74 MEDECO KEY FOR REPLACEMENT PIECE 9/14/2018 27052634478 E 720-13720-5021 28.11 ENFORCEMENT CARDS JESUS GOVEA III 9/5/2018 2702588/27-8/29/18 E 710-13910-5033 93.81 GAS/TOLL REIMBURSEMENT JWC ENVIRONMENTAL INC 9/14/2018 27052793700 E 710-13932-5051 61,207.32 FY 2018-2019 REPAIR AND REFURBISH SEWAGE G 9/14/2018 27052893618 E 710-13932-5051 19,750.23 FY 2018-2019 REFURBISH SEWAGE GRINDERS K-119 OF CALIFORNIA 9/14/2018 27052974486 E 740-13820-5021 79.57 TERRACE PROJECT SUPPLIES KAMAN INDUSTRIAL TECHNOLOGIES 9/12/2018 270414I327479 E 710-13943-5050 695.44 BEARINGS RE-STOCK KENNETH DE LEON 9/5/2018 2702508/20-8/23/18 E 710-13910-5033 158.27 MILEAGE FOR TRAINING KENNETH DE LEON LA TAPATIA, LLC 9/14/2018 27053209/14/18 E 100-13410-5061 560.00 FOOD FOR CITYWIDE CLEANUP EVENT 9/15/18 (A LARRY WALKER ASSOCIATES, INC. 9/5/2018 27026400516.06-2 E 710-13951-5005 4,916.50 NPDES REISSUANCE REGULATORY ASSISTANCE Monday, September 17, 2018 Page 21 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PUBLIC WORKS LARRY YAN 9/14/2018 2705818/16-8/22/18 E 710-13315-5031 17.44 STANDBY MILEAGE REIMB. FOR L.YAN LORMAN BUSINESS CENTER INC 9/14/2018 2705343370940-1 E 710-13910-5033 436.64 LORMAN EDU. ONLINE TRAINING SUBSCRIPTION 9/14/2018 2705343370940-1 E 100-13410-5033 436.64 LORMAN EDU. ONLINE TRAINING SUBSCRIPTION 9/14/2018 2705343370940-1 E 100-13210-5033 436.64 LORMAN EDU. ONLINE TRAINING SUBSCRIPTION LOWE'S CREDIT SERVICES 9/5/2018 270267902227 E 710-13944-5051 260.78 NYLON ROPES & PUTTY KNIVES 9/12/2018 270471CC 378620 E 781-13610-5021 173.83 MM CC - NEW POLICE/FIRE/ECD SUPPLIES LUIGI'S SANDWICH PALACE 9/12/2018 270471CC378102 E 710-13910-5033 371.32 BS LEADERSHIP INSTITUTE HOSTING MACKAY METERS INC 9/12/2018 2704221050544 E 720-13720-5005 1,440.00 PARKING METER NOTIFICATION SERVICES MCC CONTROLS LLC 9/12/2018 270426CD99313030 E 710-13943-5051 4,522.50 FY 2018-2019 SCADA/ELECTRICAL SERVICES MCMASTER-CARR SUPPLY CO 9/12/2018 27042771655771 E 710-13943-5050 1,086.00 MAINTENANCE SUPPLIES - STAINLESS STEEL HAR 9/12/2018 27042771748657 E 710-13931-5051 32.45 SHEET METAL HOLE SAW METRO MOBILE COMMUNICATIONS 9/12/2018 270431054828 E 781-13610-5001 482.25 GARAGE- VEH 148 REPAIRS 9/12/2018 270431054838 E 781-13610-5001 182.99 GARAGE- VEH 140 REPAIRS MEYERS, NAVE, RIBACK 9/7/2018 2703302018070370 E 250-13510-5003 2,035.80 PROF SRVCS THROUGH 07/31/2018 - SOLID WAST 9/7/2018 2703302018070371 E 710-13910-5003 1,407.70 PROF SRVCS THROUGH 07/31/2018 - SEWER SYST MOSS RUBBER & EQUIPT CORP 9/14/2018 270539CA94-941601 E 781-13610-5021 362.93 GARAGE OPER SUPPLIES VEH 320 MULTIVISTA 9/14/2018 2705406366 E 710-13922-5051 5,800.00 SITE PICTURE PLAN VIEW FOR UPGRADE NATIONAL CINEMEDIA, LLC 9/12/2018 270432INV-159283 E 710-13953-5030 4,443.40 ON-SCREEN OUTREACH NEOPOST USA INC 9/14/2018 27054256059745 E 100-13210-5027 7.94 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 710-13310-5027 42.45 METER RENTAL/STANDARD MAINTENANCE 10/1/ 9/14/2018 27054256059745 E 710-13910-5027 25.19 METER RENTAL/STANDARD MAINTENANCE 10/1/ NG'S COOKING 9/12/2018 270471CC378101 E 710-13910-5033 540.63 BS LEADERSHIP INSTITUTE HOSTING NORTH STATE ENVIRONMENTAL 9/5/2018 270270050289 E 710-13951-5004 570.75 DISPOSAL OF HAZARDOUS WASTE NSI SOLUTIONS, INC. 9/12/2018 270435357954 E 710-13951-5021 234.00 LAB SUPPLIES OFFICE DEPOT INC 9/12/2018 270437136726747001 E 710-13951-5021 17.74 OFFICE SUPPLIES 9/12/2018 270437136726747001 E 710-13953-5021 8.98 OFFICE SUPPLIES 9/12/2018 270437136726747001 E 710-13910-5021 206.10 OFFICE SUPPLIES PANKEY'S RADIATOR INC. 9/14/2018 270545241572 E 781-13610-5001 175.00 GARAGE- CLEAN & REPAIRI FUEL TANK PAUL RUBINO 9/14/2018 2705568/22/18 E 710-13315-5031 30.63 SUPERVISOR CLASS MILEAGE REIMB- P.RUBINO PETERSON POWER SYSTEMS INC 9/5/2018 270271SW240151128 E 710-13941-5051 6,712.83 EMERGENCY STANDBY GENERATOR SERVICE 9/12/2018 270447SW240151387 E 710-13943-5051 7,920.32 WAUKESHA ENGINE PERIODIC MAINTENANCE PETERSON TRUCKS, INC. 9/14/2018 270547144819P E 781-13610-5021 55.18 GARAGE OPER SUPPLIES VEH 516 Monday, September 17, 2018 Page 22 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PUBLIC WORKS PETERSON TRUCKS, INC. 9/14/2018 270547144819PX1 E 781-13610-5021 49.70 GARAGE OPER SUPPLIES VEH 516 9/14/2018 270547144911P E 781-13610-5021 91.52 GARAGE STOCK & VEH 516 OPER SUPPLIES PHOENIX USA 9/12/2018 270471CC 378625 E 781-13610-5021 167.87 MM CC- GARAGE OPER SUPPLIES VEH 516 POLYDYNE INC 9/14/2018 2705481271968 E 710-13943-5021 15,880.58 FY 2018-2019 POLYMER (CLARIFLOC) SUPPLY PUMP REPAIR SERVICE 9/12/2018 270450039030 E 710-13942-5051 5,642.66 TWAS PUMP REBUILD - PARTS RESTOCK ROYALTY AUTO COLLISION CTR INC9/14/2018 27055521050 E 781-13610-5001 2,079.32 GARAGE - VEH 221 REPAIRS SAFETY-KLEEN SYSTEMS INC 9/5/2018 27027777749211 E 710-13943-5051 65.00 PARTS CLEANER SERVICE SERRAMONTE FORD INC 9/14/2018 270559629859 E 781-13610-5001 63.51 GARAGE STOCK (VEH 229) OPER SUPPLIES 9/14/2018 270559629866 E 781-13610-5021 63.51 GARAGE STOCK OPER SUPPLIES 9/14/2018 270559630033 E 781-13610-5021 52.32 GARAGE OPER SUPPLIES VEH 258 9/14/2018 270559630463 E 781-13610-5021 51.22 GARAGE OPER SUPPLIES VEH 221 9/14/2018 270559630518 E 781-13610-5021 301.11 GARAGE STOCK & VEH 6 SUPPLIES 9/14/2018 270559630696 E 781-13610-5021 165.52 GARAGE STOCK & VEH 212 SHIVA AUTO REPAIR 9/14/2018 27056039607 E 781-13610-5001 56.75 GARAGE- VEH 241 SMOG INSPECTION 9/14/2018 27056039608 E 781-13610-5001 56.75 GARAGE- VEH 222 SMOG INSPECTION 9/14/2018 27056039611 E 781-13610-5001 56.75 GARAGE- VEH 258 SMOG INSPECTION 9/14/2018 27056039661 E 781-13610-5001 56.75 GARAGE- SMOG CERTIFICATE VEH 205 SHOE DEPOT INC 9/5/2018 270279152304/2049 E 100-13210-5034 137.01 WORK BOOTS FOR ENGINEERING INTERN SOUTH CITY CAR WASH INC 9/14/2018 2705623166 E 781-13610-5001 1,329.90 CAR WASH FOR CITY VEHICLES (AUGUST) SOUTH CITY LUMBER AND SUPPLY 9/14/2018 270563954559 E 710-13315-5021 68.43 SEWER MAINT OPER SUPPLIES 9/14/2018 270563954568 E 100-13420-5021 37.87 SIDEWALK OPER SUPPLIES 9/14/2018 270563954631 E 740-13820-5021 45.19 TERRACE PROJECT SUPPLIES SPECIALTY'S CAFE & BAKERY 9/5/2018 270285CC378114 E 710-13910-5021 158.00 BS WET-WEATHER CIP PRE-CONSTRUCTION STAF 9/12/2018 270471CC378105 E 710-13910-5033 268.38 BS LEADERSHIP INSTITUTE HOSTING 9/12/2018 270471CC378106 E 710-13910-5033 176.58 BS LEADERSHIP INSTITUTE HOSTING 9/12/2018 270471CC378109 E 710-13910-5033 222.30 BS LEADERSHIP INSTITUTE HOSTING SSF SCAVENGER CO INC 9/14/2018 2705640000736525 E 710-13962-5072 20,158.52 DEBRIS BOX SVC FOR SWEEPER/VACTOR DUMPSI STEVEN'S BAY AREA DIESEL SER I9/14/2018 27056644139 E 781-13610-5001 978.90 GARAGE- VEH 504 REPAIRS 9/14/2018 27056644174 E 781-13610-5001 325.00 GARAGE- VEH 515 REPAIRS STEWART CHEVROLET 9/14/2018 270567114290 E 781-13610-5021 24.86 GARAGE OPER SUPPLIES VEH 243 THATCHER COMPANY OF CALIFORNIA9/12/2018 270468256075 E 710-13941-5021 5,806.33 FY 2018-2019 FERRIC CHLORIDE THOMAS FISH COMPANY 9/5/2018 27028422911 E 710-13951-5021 138.50 BIOASSAY SPECIMEN Monday, September 17, 2018 Page 23 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PUBLIC WORKS TRACTION-GENUINE PARTS CO. 9/14/2018 2705711801P107818 E 781-13610-5021 28.19 GARAGE OPER SUPPLIES VEH 331 9/14/2018 2705711801P107826 E 781-13610-5021 19.10 GARAGE OPER SUPPLIES VEH 331 9/14/2018 2705711801P107844 E 781-13610-5021 80.01 GARAGE STOCK OPER SUPPLIES 9/14/2018 2705711801P108020 E 781-13610-5021 55.11 GARAGE STOCK OPER SUPPLIES 9/14/2018 2705711801P108149 E 781-13610-5021 24.69 GARAGE STOCK OPER SUPPLIES 9/14/2018 2705711801P108211 E 781-13610-5021 25.48 GARAGE STOCK UNION BANK OF CALIFORNIA 9/14/2018 30105563010556 E 710-13910-7004 76,358.13 CA WATER AND WASTEWATER REVENUE BOND 2 9/14/2018 30105563010556 E 710-13910-7001 305,000.00 CA WATER AND WASTEWATER REVENUE BOND 2 UNITED AIRLINES 9/14/2018 270573CC 378294 E 100-13410-5032 416.40 JL CC- ICMA CONF. TRAVEL FOR J.LOVELL UNITED SITE SERVICES OF CA 9/5/2018 270286114-7260610 E 710-13922-5051 208.85 RESTROOM FACILITIES SERVICES (08/21-09/17/18 UNIVAR USA INC 9/5/2018 270287SJ898791 E 710-13944-5021 3,634.59 FY 2018-2019 SODIUM HYPOCHLORITE 9/5/2018 270287SJ898836 E 710-13964-5021 5,539.55 FY 2018-2019 SODIUM BISULFITE 9/12/2018 270474SJ899639 E 710-13944-5021 3,635.87 FY 2018-2019 SODIUM HYPOCHLORITE 9/12/2018 270474SJ899804 E 710-13964-5021 5,521.37 FY 2018-2019 SODIUM BISULFITE W.W. GRAINGER INC. 9/12/2018 2704779883872393 E 710-13941-5051 506.18 SOLENOID VALVES - RESTOCK 9/12/2018 2704779885417072 E 710-13922-5050 528.11 MECHANICS' GLOVES RESTOCK 9/12/2018 2704779886597393 E 710-13922-5050 39.33 CLEANING SUPPLIES 9/12/2018 2704779888684074 E 710-13951-5051 782.06 MAINTENANCE SUPPLIES - BIOASSAY LAB 9/12/2018 2704779894818815 E 710-13922-5051 123.53 MAINTENANCE SUPPLIES 9/12/2018 2704779894818823 E 710-13922-5051 191.34 MAINTENANCE SUPPLIES 9/12/2018 2704779894818831 E 710-13922-5051 123.53 MAINTENANCE SUPPLIES 9/12/2018 2704779894906875 E 710-13922-5051 979.72 MAINTENANCE SUPPLIES 9/12/2018 2704779894906883 E 710-13922-5051 515.44 MAINTENANCE SUPPLIES 9/12/2018 2704779897118635 E 710-13922-5050 44.42 TUBING RESTOCK 9/14/2018 2705759878669929 E 781-13610-5021 8.22 GARAGE- VEH 0857 OPER SUPPLIES 9/14/2018 2705759890957872 E 781-13610-5021 26.92 GARAGE OPER SUPPLIES (0858) WATTCO 9/14/2018 27057651126 E 781-13610-5021 291.16 GARAGE STOCK OPER SUPPLIES WECO INDUSTRIES LLC 9/12/2018 2704780041682-IN E 710-13315-5051 207.80 SEWER MAINT OPER SUPPLIES WEST COAST CODE CONSULTANTS 9/12/2018 270479I-414-218-07-01 E 710-13953-5004 3,795.00 NEW DEVELOPMENT ENGINEERING PLAN REVIE WINGFOOT COMMERCIAL TIRE SYSTM9/14/2018 270579184-1084249 E 781-13610-5021 106.60 GARAGE OPER SUPPLIES VEH 233-TAXABLE 9/14/2018 270579184-1084286 E 781-13610-5021 268.97 GARAGE OPER SUPPLIE VEH 219 9/14/2018 270579184-1084315 E 781-13610-5021 327.89 -GARAGE OPER SUPPLIES VEH 102-TAXABLE Monday, September 17, 2018 Page 24 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco PUBLIC WORKS WINGFOOT COMMERCIAL TIRE SYSTM9/14/2018 270579184-1084322 E 781-13610-5001 184.73 GARAGE - VEH 508 ROAD SERVICE & SUPPLIES 9/14/2018 270579184-1084322 E 781-13610-5021 644.08 GARAGE - VEH 508 ROAD SERVICE & SUPPLIES 9/14/2018 270579184-1084378 E 781-13610-5021 2,313.27 GARAGE STOCK OPER SUPPLIES WORLD OIL ENVIRONMENTAL SVCS 9/14/2018 270580I500-00361244 E 781-13610-5028 120.00 USED OIL DISPOSAL WWW.OFFICIALPAYMENT.COM 9/14/2018 270573CC 378990 E 100-13210-5031 1.00 EK CC- ENG. LICENSE RENEWAL 9/14/2018 270573CC 378991 E 100-13210-5031 115.00 EK CC- ENG. LICENSE RENEWAL YAMAHA GOLF CARS OF CALIFORNIA9/5/2018 270291L31197 E 710-13922-5021 430.90 UTILITY CART REPLACEMENT TIRES Payments issued for PUBLIC WORKS $763,969.98 BALANCE SHEET A1 BUDGET PLUMBING 9/5/2018 270234E18-0831 B 270-21703 500.00 ENCROACH DEPOSIT, 119 DRAKE AVE ACE PLUMBING & ROOTER 9/7/2018 270295E18-0873 B 270-21703 300.00 ENCROACH DEPOSIT, 8 GREENWOOD ASPHALT SURFACING INC 9/5/2018 270240E18-0768 B 270-21703 1,000.00 ENCROACH DEPOSIT, 400 OYSTER POINT 116-526 CRANE TRANSPORTATION GROUP 9/12/2018 2703930718A B 270-21703 5,500.00 E18-0685 201 HASKINS TRAFFIC STUDY EMERGENCY ROOTER 9/5/2018 270253E18-0498 B 270-21703 576.00 ENCROACH DEPOSIT, 102 SYCAMORE AVE HALLMARK ROOFING INC. 9/14/2018 270524B16-1230 B 270-21724 200.00 C & D DEPOSIT REFUND 125 LACROSSE SHIHADEH ROMEL 9/5/2018 270276E18-0626 B 270-21703 1,440.00 ENCROACH DEPOSIT,561 ROCCA AVE SIGNATURE BUILDERS INC 9/14/2018 270561B18-0121 B 270-21724 200.00 C & D DEPOSIT REFUND 116 MANZANITA 9/14/2018 270561B18-0779 B 270-21724 200.00 C & D DEPOSIT REFUND 212 LOMITAS 9/14/2018 270561B18-0807 B 270-21724 200.00 C & D DEPOSIT REFUND 134 LONGFORD UNION BANK OF CALIFORNIA 9/14/2018 30105563010556 B 710-11110 -122.50 CA WATER AND WASTEWATER REVENUE BOND 2 WRA INC 9/5/2018 27029024219-7-32377 B 100-21742 4,449.00 COSTCO MOD CEQA 3/1 THROUGH 3/31/2018 9/5/2018 27029024219-7-32644 B 100-21742 2,452.62 COSTCO MOD CEQA 4/1 THROUGH 4/30/2018 Payments issued for BALANCE SHEET $16,895.12 CAPITAL IMPROVEMENTS ACE FIRE EQUIPMENT & SVC CO 9/7/2018 270294S-4919 E 510-99999-5999 630.01 SIGN HILL GENERATOR REPLACEMENT - ADD REL AECOM TECHNICAL SERVICES, INC.9/14/2018 2704842000105894 E 710-99999-5999 883.62 ON CALL BIOLOGICAL SCIENCES SERVICES FY 17-1 AKEL ENGINEERING GROUP INC 9/12/2018 27036018432-04 E 710-99999-5999 45,682.25 SEWER MASTER PLAN STUDY 9/12/2018 27036018432-05 E 710-99999-5999 11,743.45 SEWER MASTER PLAN STUDY ARROW SIGN COMPANY 9/12/2018 270369103649 E 510-99999-5999 30,280.00 GATEWAY MONUMENT SIGNS BARKERBLUE INC 9/12/2018 2703720000609377 E 710-99999-5999 7.00 WQCP WET WEATHER AND DIGESTER IMPROVEM Monday, September 17, 2018 Page 25 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco CAPITAL IMPROVEMENTS BARKERBLUE INC 9/12/2018 2703720000609509 E 710-99999-5999 12.30 WQCP WET WEATHER AND DIGESTER IMPROVEM 9/12/2018 2703720000609555 E 710-99999-5999 10.80 WQCP WET WEATHER AND DIGESTER IMPROVEM 9/12/2018 2703720000613742 E 710-99999-5999 720.83 WQCP WET WEAHTER AND DIGESTER IMPROVEM BLOCKA CONSTRUCTION INC. 9/14/2018 2704928 E 510-99999-5999 18,534.71 SIGN HILL GENERATOR PROJECT~ CALIFORNIA NEWSPAPER PARTNERS 9/12/2018 2703830001148732 E 510-99999-5999 651.82 NOTICE INVITING BIDS FOR VARIOUS CIP PROJECT 9/12/2018 2703830001148732 E 740-99999-5999 756.46 NOTICE INVITING BIDS FOR VARIOUS CIP PROJECT CALLANDER ASSOC LANDSCAPE 9/12/2018 27038617092-7 E 510-99999-5999 130.18 ON CALL LANDSCAPE ARCHITECTURAL SERVICES F CSG CONSULTANTS INC 9/5/2018 27024919145 E 740-99999-5999 1,425.00 ON CALL PROGRAM MANAGEMENT FY 17-18 9/12/2018 27039520182 E 510-99999-5999 1,512.50 DESIGN OF JUNIPERO SERRA BOULEVARD & KING 9/14/2018 27050414355 E 510-99999-5999 2,231.88 DESIGN OF JUNIPERO SERRA BOULEVARD & KING 9/14/2018 27050415737 E 510-99999-5999 1,168.25 DESIGN OF JUNIPERO SERRA BOULEVARD & KING 9/14/2018 27050417862 E 510-99999-5999 90.00 DESIGN OF JUNIPERO SERRA BOULEVARD & KING DEPARTMENT OF TRANSPORTATION 9/14/2018 27050704-SMX-101-0001-02 E 510-99999-5999 45,600.00 2018-19 AIRSPACE LEASE RELATED TO WALKWAY ERLER & KALINOWSKI, INC. 9/14/2018 270512B70050.04-06 E 710-99999-5999 18,307.64 PM SERVICES: WQCPLANT WET WEATHER & DIGE FEDEX 9/7/2018 270349cc378413 E 510-99995-5999 25.15 MF: OVERNITE MAILING COMM CIVIC CAMPUS B FEHR AND PEERS 9/12/2018 270405124174 E 510-99999-5999 25,113.50 ON CALL TRAFFIC SERVICES FY 17-18 INTERSTATE GRADING & PAVING IN9/14/2018 2705255423 E 510-99999-5999 35,664.12 JUNIPERO SERRA BLVD & DING DR INTERSECTION KJ WOODS CONSTRUCTION INC 9/12/2018 27041617-360-001 E 710-99999-5999 77,076.62 SANITARY SEWER & MANHOLE REPLACEMENT PR MARK THOMAS & CO. INC. 9/7/2018 27032831358 E 510-99999-5999 4,838.50 LINDEN-SPRUCE COMPLETE STREETS SIM ARCHITECTS INC 9/12/2018 270456018101 E 510-99999-5999 12,312.00 ON CALL ARCHITECTURAL SERVICES FY 17-18 9/12/2018 270456018103 E 830-99999-5999 25,650.00 ON CALL ARCHITECTURAL SERVICES FY 17-18 SWINERTON MGMT & CONSULTING 9/14/2018 27056814100038-48 E 510-99999-5999 64,730.00 PROGRAM MANAGEMENT SERVICES FOR VARIOU 9/14/2018 27056817100050-2 E 710-99999-5999 1,692.00 ON CALL RESO 141-2017 MULTI-DISCIPLINARY EN 9/14/2018 27056817100053-3 E 710-99999-5999 2,068.00 ON CALL RESO 141-2017 MULTI-DISCIPLINARY EN TRC ENGINEERS INC 9/7/2018 27034721605-A E 510-99999-5999 2,665.68 CM SERVICES FOR EL CAMINO REAL GBI - PHASE I 9/7/2018 27034721605-B E 510-99999-5999 5,799.47 CM SERVICES FOR EL CAMINO REAL GBI - PHASE II Payments issued for CAPITAL IMPROVEMENTS $438,013.74 DESIGNATED FUND BALANCE ALPINE AWARDS 9/7/2018 2702975529418 B 280-27405 909.06 CUSTOM MEDALS FOR KARATE TOURNAMENTS AMAZON MKTPLACE 9/7/2018 270349CC378040 B 280-27402 59.98 KC - PROGRAM SUPPLIES FOR SENIOR DIVISION B&B CUSTOM DESIGNS 9/7/2018 27029917351 B 280-27405 2,185.00 SSF HATS - SSF FRIENDS OF PARK AND RECREATIO Monday, September 17, 2018 Page 26 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco DESIGNATED FUND BALANCE COSTCO 9/5/2018 270285cc378184 B 280-27423 28.56 KB - VOC PROGRAM REFRESHMENTS 9/7/2018 270349CC378045 B 280-27402 532.93 KC - SENIOR PROGRAM SUPPLIES GEIGER 9/14/2018 2705193679898 B 280-27416 880.61 G.R.E.A.T. OUTREACH SUPPLIES GOURMET COFFEE SOLUTIONS INC. 9/12/2018 27041008301803 B 280-27408 303.74 SUPPLIES FOR PUBLIC COFFEE MACHINE, NON KEYWORD FARM LLC 9/12/2018 270415090518SSFPR B 280-27405 4,840.00 ICE CREAM CART - CONCERT IN THE PARK MARIA SPREMICH 9/7/2018 270345August 13, 2018 B 280-27405 300.00 EMPLOYEE REIMB.FOR MARIA SPREMICH - SPRIN MARSHALLS 9/7/2018 270349CC378046 B 280-27402 78.19 KC - SENIOR PICNIC SUPPLIES SAFEWAY STORE 9/7/2018 270349CC378049 B 280-27402 94.49 KC - SUPPLIES FOR SENIOR PICNIC SAN MATEO COUNTY TRANSIT DISTR9/14/2018 2705582182005 B 280-27402 369.25 SENIOR REDI-WHEELS FOR APRIL 2018 9/14/2018 2705582182005 B 280-27402 426.75 SENIOR REDI-WHEELS FOR MAY 2018 9/14/2018 2705583182005 B 280-27402 317.50 SENIOR - REDI-WHEELS FOR THE MONTH OF MAR 9/14/2018 2705586182005 B 280-27402 386.75 SENIOR REDI-WHEELS FOR JUNE 2018 SUE MILLER 9/14/2018 270537June -August 2018 B 280-27405 661.46 EMPLOYEE REIMBURSEMENT - KARATE TOURNA WHITING'S FOODS 9/7/2018 270349CC378052 B 280-27402 353.13 KC - SENIOR LUNCHEON SUPPLIES Payments issued for DESIGNATED FUND BALANCE $12,727.40 REFUNDS/REIMBURSEMENTS ADILIS RAMIREZ 9/12/2018 27045111109462 R 100-17260-35306 226.00 NO LONGER WANTS CREDIT FOR CLASSES ALFONSO JOO 9/7/2018 2703191059348 R 100-17250-35301 200.00 REFUND OF DEPOSIT FOR USE OF ORANGE PARK ANN BUI 9/7/2018 2703001057042 R 100-17275-35307 165.00 REFUND OF SUMMER CAMP ARLENE MAGNO 9/5/2018 27026811146692 R 100-17260-35306 50.00 CAN NO LONGER TAKE DRAGON BOAT CLASS DIANE SMITH 9/12/2018 27045810891786 R 100-17230-35303 54.00 REFUND FOR AQUATICS CLASS IVONNE ALDANDA-RAMOS 9/12/2018 2703621059477 R 100-17250-35301 500.00 REFUND OF DEPOSIT FOR HALL RENTAL JULIET QUIAMBAO 9/14/2018 2705511059508 R 100-17260-35306 200.00 REFUND OF DEPOSIT FOR USE OF ORANGE PARK LING LI 9/7/2018 27032311017790 R 100-17260-35306 132.00 REFUND FOR TWO CANCELLED BALLET CLASSES/ LISA PRICE 9/5/2018 2702731059260 R 100-17275-35307 50.00 REFUND OF SUMMER CAMP MELISSA LOPEZ 9/7/2018 2703241059445 R 100-17250-35301 200.00 REFUND OF DEPOSIT FOR USE OF WEST. PARK SH MONICA MELENDEZ 9/7/2018 2703291059453 R 100-17250-35301 600.00 REFUND OF CANCELLED HALL RENTAL EVENT MONICA RUIZ 9/7/2018 2703391059327 R 100-17250-35301 350.00 REFUND OF DEPOSIT FOR HALL RENTAL NIETO MARCELO 9/7/2018 2703271059399 R 100-17250-35301 500.00 REFUND OF HALL DEPOSIT SAN MATEO COUNTY CONTROLLER'S 9/14/2018 270557AUG 2018 R 100-12720-33001 20,578.60 ALLOCATION OF PARKING PENALTIES - AUG 2018 SERIKA KOKUBU 9/7/2018 2703221059255 R 100-17250-35301 200.00 REFUND OF DEPOSIT FOR USE OF ORANGE PARK Monday, September 17, 2018 Page 27 of 28 VENDOR NAMEDATE CHECK #INVOICE #ACCOUNT #AMOUNT DESCRIPTION Payments issued between and9/4/2018 9/16/2018 -City of South San Francisco REFUNDS/REIMBURSEMENTS VERONICA HERNANDEZ 9/7/2018 2703161059446 R 100-17250-35301 200.00 REFUND OF DEPOSIT FOR USE OF ORANGE PARK Payments issued for REFUNDS/REIMBURSEMENTS $24,205.60 TOTAL PAYMENTS FOR PERIOD $3,426,766.18 Monday, September 17, 2018 Page 28 of 28 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-898 Agenda Date:9/26/2018 Version:1 Item #:9. Motion confirming payment registers for September 26,2018.(Richard Lee, Director of Finance) The payments shown in the attached payment register are accurate and sufficient funds were available for payment (payroll items excluded). Attachment: Payment Register City of South San Francisco Printed on 9/20/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-910 Agenda Date:9/26/2018 Version:1 Item #:10. Report regarding a motion to accept the Local Agency Biennial Notice for 2018 pursuant to the California Political Reform Act as regulated by the Fair Political Practices Commission and issued by the City Clerk. (Krista Martinelli, City Clerk) RECOMMENDATION It is recommended that the City Council accept by motion the 2018 Biennial Notice pursuant to the California Political Reform Act as regulated by the Fair Political Practices Commission and issued by the City Clerk. BACKGROUND/DISCUSSION The California Political Reform Act requires every local government agency to review its conflict of interest code biennially.The City Council is the code reviewing body for the City.The City Clerk must file the Biennial Notice with the Council before October 1,2018.See Attachment 1.If amendments to the City’s conflict of interest code are necessary,the notice must specify as such.The proposed amended code must be forwarded to the City Council as the code reviewing body within 90 days from filing of the notice. The City Clerk has reviewed the conflict of interest code adopted by the City Council in November 2016 and determined the code must be updated.See Attachment 2 -Resolution No.123-2016.An amendment to the City’s Conflict of Interest Code is required due to elimination of positions,revised and/or new positions and changes in duties and responsibilities. The attached notice is deemed filed by City Council’s acceptance.The City Clerk will bring the amended Conflict of Interest Code to the City Council for review and approval at an upcoming meeting and within 90 days from acceptance of the notice. FISCAL IMPACT None. CONCLUSION Upon review of the 2018 Biennial Notice,City Council should entertain a motion to accept the Local Agency Biennial Notice for 2018 as issued by the City Clerk on September 26, 2018. Attachments: 1.Biennial Notice 2.Resolution No. 123-2016 City of South San Francisco Printed on 9/20/2018Page 1 of 1 powered by Legistar™ 1. SA`t A City of South San Franciscoc P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA c9L 11,Resolution: RES 123-2016 File Number: 16-787 Enactment Number: RES 123-2016 RESOLUTION AMENDING THE CITY'S CONFLICT OF INTEREST CODE TO UPDATE THE LIST OF DESIGNATED POSITIONS. WHEREAS,pursuant to the Political Reform Act(Article III of Chapter 7 of the Government Code, commencing with Section 81000), each government agency is required to adopt a Conflict of Interest Code(Government Code Section 87300 et seq.); WHEREAS,pursuant to Government Code Section 87302, the Conflict of Interest Code shall provide for specific enumeration of the positions within the City, other than those specified in Government Code Section 87200, which involve the making or participation in the making of decisions which may foreseeably have material effect on any financial interest and for each such enumerated position, the specific types of investments,business positions, interests in real property, and sources of income which are reportable; and WHEREAS,by Resolution No. 129-87, as amended most recently by Resolutions 22-2009 and 28-2014, the City Council previously adopted the City's Conflict of Interest Code ("COI") and the list of designated positions subject to the COI; and WHEREAS, an update to the list of designated positions subject to the COI is necessary because of the recent reorganization of the City's staff and because of the creation of new Boards and Commissions and the changed responsibilities of certain Committees. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco hereby adopts the updated Conflict of Interest Code, including designation of positions and the applicable disclosure categories for the positions, as shown in Exhibit 1 and Exhibit 2. At a meeting of the Special City Council on 11/2/2016, a motion was made by Richard Garbarino, seconded by Liza Normandy, that this Resolution be approved. The motion passed. Yes: 4 Matsumoto, Normandy, Gupta, and Garbarino Absent: 1 Addiego Page 1 Fite Number: 16-787 Enactment Number: RES 123-2016 Attest by Krista .rtin Page 2 Resolution No. 123-2016 Exhibit 1 DESIGNATION OF POSITIONS AND APPLICABLE DISCLOSURE CATEGORIES FOR THE CITY OF SOUTH SAN FRANCISCO Designated Positions Disclosure Category Members of the following Boards and Commissions 1.1 City Council Form 700 1.2 Measure W Citizens' Oversight Committee 1, 2, 3, 4, 5, 6 1.3 Design Review Board 1, 2, 3, 4 1.4 Housing Authority 1 1.5 Library Board 6 1.6 Parking Place Commission 3, 4, 6 1.7 Planning Commission Form 700 1.8 Parks & Recreation Commission 1, 2, 4, 6 1.9 Conference Center Board 6 1.10 Cultural Arts Commission 1, 2 1.11 Bicycle and Pedestrian Advisory Committee(BPAC) 1, 2, 4, 6 1.12 Mosquito Abatement District— SSF Representative 1, 2, 3, 4, 5, 6 1.13 Colma Creek Advisory Committee—Representatives 1, 2, 3, 4, 5, 6 2. City Manager 2.1 City Manager Form 700 2.2 Assistant City Manager 1, 2, 4, 6 2.3 Assistant to the City Manager 1, 2, 4 2.4 Communications Director 1, 2, 4 2.5 Management Analyst I- Community Liaison 1, 2, 4 3. City Clerk 3.1 City Clerk Form 700 3.2 Deputy City Clerk 6 4. City Attorney 4.1 City Attorney Form 700 4.2 Assistant City Attorney 1, 2, 3, 4, 5, 6 5. City Treasurer 5.1 City Treasurer Form 700 5.2 Deputy City Treasurer 1, 2, 3, 4, 5, 6 6. Department of Economic & Community Development 6.1 Economic and Community Development Director 1, 2, 4 6.2 Economic and Community Development Deputy Director 1, 2, 4 6.3 Chief Planner 1, 2, 4 6.4 Senior Planner 1, 2, 4 6.5 Associate Planner 1, 2, 4 6.6 Community Development Coordinator 1, 2, 4 6.7 Economic Development and Housing Manager 1, 2, 4, 6 6.8 Senior Building Inspector 1, 2, 4 6.9 Building Inspector 1, 2, 4 6.10 Planning Technician 1, 2, 4 6.11 Permit Technician 1, 2, 4 6.12 Economic Development Coordinator 1, 2, 4 7. Human Resources Department 7.1 Human Resources Director 6 7.2 Human Resources Manager 6 7.3 Human Resources Analyst I, II 6 8. Department of Public Works 8.1 Public Works Director City Engineer 1, 2, 4, 6 8.2 Assistant Public Works Director/City Engineer 1, 2, 4, 6 8.3 Plant Superintendent 1, 2, 4, 6 8.4 Assistant Plant Superintendent 1, 2, 4, 6 8.5 City Engineer 1, 2, 4, 6 8.6 Senior Civil Engineer 1, 2, 4, 6 8.7 Public Works Inspector 1, 2, 4, 6 8.8 Public Works Supervisor 1, 2, 4, 6 8.9 Laboratory Supervisor 1, 2, 4, 6 8.10 Senior Environmental Compliance Inspector 1, 2, 4, 6 8.11 Environmental Compliance Inspector I, II 1, 2, 4, 6 8.12 Maintenance Program Manager- Streets 1, 2, 4, 6 8.13 Maintenance Program Manager—Elect& Fleet 1, 2, 4, 6 8.14 Public Works Program Manager 1, 2, 4, 6 8.15 Public Works Administrator 1, 2, 4, 6 9. Finance Department 9.1 Finance Director 1, 3, 4, 5 9.2 Financial Services Manager 1, 3, 4, 5 10. Fire Department 10.1 Fire Chief 6 10.2 Deputy Fire Chief 6 10.3 Battalion Chief 6 10.4 Fire Marshall 1, 2, 4, 6 10.5 Fire Captain 6 10.6 Safety Inspector I, II and III 1, 2, 4 10.7 Emergency Services Manager 1, 2, 4, 6 11. Library Department 11.1 Library Director 6 11.2 Assistant Library Director 5 11.3 Literary Program Manager 6 11.4 Library Program Manager 6 12. Recreation & Community Services Dept 12.1 Parks and Recreation Director 1, 2, 4, 6 12.2 Recreation& Community Services Manager 2, 4, 5, 6 12.3 Parks Manager 2, 4, 5, 6 12.4 Facilities Manager 2,4, 5, 6 12.5 Parks Program Manager 2, 4, 5, 6 12.6 Recreation Program Manager 2, 4, 5, 6 13. Police Department 13.1 Chief of Police 6 13.2 Police Captain 6 13.3 Police Lieutenant 6 13.4 Police Sergeant 6 14. Consultants Form 700 15. Housing Authority 15.1 Executive Director 1, 2, 4 16. Conference Center 16.1 Executive Director 1 17. Information Technology Department 17.1 Information Technology Manager 6 Exhibit 2 DISCLOSURE CATEGORIES A. APPROPRIATE FORMS All persons holding offices or positions specified in Government Code Section 87200 shall file FPPC Form 700 for purposes of complying with the financial disclosure requirements of the Conflict of Interest Code. All other positions and offices designated in Resolution 123-2016 shall file FPPC form 700 based on the disclosure categories listed below. B. DISCLOSURE CATEGORIES Category 1: All investments, sources of income, interests in real property or business positions in which the designated employee or official is a director, officer, partner,trustee, employee or holds any position of management. (Schedules All A-E) Category 2: All interest in real property located in the City of South San Francisco, within two 2) miles of the City of South San Francisco or within two(2) miles of any land owned or used by the City of South San Francisco. (Schedules B&C) Category 3: All investments, interests in real property or sources of income subject to the regulatory, permit or licensing authority of the department, board or commission, or agency. (Schedules All A-E) Category 4: Investments in business entities and sources of income which engage in land development, construction or the acquisition or sale of real property. (Schedules A, C, D, E) Categories 5 : Investments in, income from and positions held in business entities of the types which, within the past two(2)years, have contracted with the City of South San Francisco to provide services, supplies, materials, machinery or equipment. Schedules A, C, D, E) Category 6: Investment in, income from and positions held in business entities of the type which, within the past two(2)years, have contracted with the designated employee's department to provide services, supplies, materials, machinery and equipment. (Schedules A, C, D, E) City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-860 Agenda Date:9/26/2018 Version:1 Item #:11. Report regarding a resolution approving and authorizing the City Manager to sign a response to San Mateo County Grand Jury Report “Soaring City Pension Costs -Time for Hard Choices.”(Richard Lee,Director of Finance) RECOMMENDATION It is recommended that the City Council adopt a resolution approving and authorizing the City Manager to sign a response to San Mateo County Grand Jury Report “Soaring City Pension Costs -Time for Hard Choices.” BACKGROUND/DISCUSSION Since 1945,the City of South San Francisco has contracted with the California Public Employees’Retirement System (CalPERS)to provide pension benefits to its employees.Since that time,CalPERS has become the largest public pension trust in the country,with $357 billion in assets,1.9 million members,and 2,945 employers,of which 1,578 are public agencies.Over the past twenty years,the economy has endured severe volatility due to the Dot Com boom/bust and Great Recession,which placed significant stress on the CalPERS pension trust and its participating members.The CalPERS Board of Administration’s efforts to address economic volatility and ensure sustainability have resulted in a number of policy and assumption changes, including amortization,or how gains and losses are recognized over time,and the discount rate,or the anticipated return on investment over a long period of time. It is within this context that,on July 17,2018,the San Mateo County Grand Jury issued a report titled “Soaring City Pension Costs -Time for Hard Choices,”included as Attachment 1 (See pages 36-38 for the list of Findings).The City of South San Francisco is required to provide a response within 90 days of the Grand Jury report, a draft of the response is included as Exhibit A to the accompanying resolution. Grand Jury Findings Overall,most of the findings included in the Grand Jury report are factual and accurate,as they reflect information that was retrieved from the City’s Comprehensive Annual Financial Report (CAFR),actuarial valuation from the California Public Employees’Retirement System (CalPERS),or other public documents.As noted in the response letter,the City specifically agrees with Findings F1,F2,F3,F4,F5,F6,F8,F9 and F11 because they are accurate and reflect information included in publicly available documents.However,the City partially disagrees with Findings F7, F10, F12, and F13. Finding F7:The City partially disagrees with Finding F7 because comparing pension contributions as a percentage of General Fund total expenditures is not consistent with how the City allocates employee costs.A more accurate comparison would be to compare pension contributions to total expenditures for all operating funds. Finding F10:The City also partially disagrees with Finding F10.CalPERS’decision to reduce its discount rate from 7.5 to 7.0 percent and shorten its amortization period from 30 to 20 years is projected to result in significant increases to pension contributions.However,the independent actuarial analysis,which assumed a 7.0 percent discount rate,6.0 percent investment return,and 20 year amortization period,included asCity of South San Francisco Printed on 9/20/2018Page 1 of 3 powered by Legistar™ File #:18-860 Agenda Date:9/26/2018 Version:1 Item #:11. 7.0 percent discount rate,6.0 percent investment return,and 20 year amortization period,included as Attachment 2,indicates that FY 2024-25 pension contributions would increase by 57 compared to current pension contributions,not 100 percent.The same analysis anticipates that pension contributions will reach an apex of $33 million in FY 2032-33, or a 96 percent increase compared to the current year. Finding F12:This finding asserts that none of the cities in San Mateo County have adopted a long-term financial plan with at least a 10-year time horizon to address rising Normal Costs and Amortization Costs.This is partially accurate for South San Francisco.Since 2013,the City has regularly utilized a long-term forecast model to support its financial decision making.In 2017,the forecast model time horizon was expanded from 5 to 10 years for use during labor negotiations and specifically in anticipation of the reduction of CalPERS’ discount rate.Every iteration of the model included projected pension contributions as part of anticipated operating expenditures,which were measured against projected revenues each fiscal year through the time horizon. The model has been a key tool for City administration during labor negotiations. Finding F13: This finding claims that despite the fact that rising pension costs and Unfunded Liabilities are a significant problem, South San Francisco does not include specific annual projections of future pension contribution costs in their budgets published in the finance section of their websites. While the City’s budget documents have not provided pension contribution projections to the degree that is contained in CalPERS’ annual actuarial valuation, they have consistently included a narrative messaging the status and impact of various CalPERS Board of Administration actions, including reduction of the discount rate, performance of CalPERS’ investment portfolio, and other changes in actuarial assumptions and policies. The City’s award- winning budget documents can be found on the City’s website at <http://www.ssf.net/departments/finance/financial-reports/operating-budget>. As stated in the response letter, CalPERS actuarial valuations are available to the public for any participating member agency at <https://www.calpers.ca.gov/page/employers/actuarial-services/employer-contributions/public-agency-actuarial -valuation-reports>. Grand Jury Recommendations The Grand Jury made four recommendations. Recommendation R1 suggested each City schedule public hearings to engage its residents in addressing the City’s increasing pension costs and to develop a long-term plan to address them. With Council’s concurrence, City Staff will schedule such a public meeting before the end of 2018. Recommendation R2 suggested that the City publish a report on its website detailing its pension obligations. As requested by the Grand Jury, Attachment 3 includes the following information for three prior fiscal years and each of the following ten fiscal years, for all pension plans (Miscellaneous and Safety plans), assuming CalPERS actuarial assumptions are met: ·Total pension contribution costs; ·Net pension liabilities, or unfunded liabilities, which is the net of pension plan assets and liabilities; ·Funded percentage, which is the ratio of pension plan assets compared to pension plan liabilities; and ·Pension costs as a percentage of General Fund total expenditures and covered payroll (pensionable compensation). The Grand Jury also requested all of the above information,but analyzed with a discount rate that is one percent lower than the current,or six percent as opposed to seven percent.As illustrated on Attachment 3,the information is placed adjacently for comparative purposes.This information will be posted on the City’s City of South San Francisco Printed on 9/20/2018Page 2 of 3 powered by Legistar™ File #:18-860 Agenda Date:9/26/2018 Version:1 Item #:11. website as suggested. Recommendation R3 suggested the City instruct its staff to deliver a report to the City Council in connection with the City’s financial plan evaluating available options to address pension costs and that each City hold public hearings to discuss and consider such options no less than every other fiscal year.The City Council has already implemented a number of strategies to address rising pension costs,most of which are included in Recommendation R3: ·Established lower pension benefit tiers for employees hired on or after April 2010; ·Established the Budget Contingency reserve in FY 2013-14,which has a current balance of $2.4 million; ·Established the CalPERS Stabilization reserve in FY 2015-16,which has a current balance of $4.5 million; ·Increased fees on a city-wide basis in FY 2017-18; ·Negotiated labor agreements that kept employee salary increases at the levels assumed by CalPERS; and ·Negotiated cost-sharing agreements with public safety bargaining units under which employees pay a portion of the City’s pension costs. As noted above,the CalPERS Stabilization Reserve of $4.5 million is accounted for in the City’s Benefits internal service fund.Accumulating operating surpluses in an internal service fund is a common strategy that local government agencies employ to address long-term liabilities,including pension and Other-Post Employment Benefits (OPEB).While this strategy provides greater flexibility with use of the funds,accounting rules only permit assets that are in an OPEB trust fund to directly offset the OPEB liability.As such,in 2014, the City Council authorized investment of $13.5 million,comprised of accumulated operating surpluses into the California Employers’Retiree Benefit Trust Fund (CERBT).The City’s operating budget has included ongoing contributions of $800,000 each fiscal year to CERBT since inception.The City’s OPEB trust fund with CERBT had a market value of $22 million and realized an investment return of 7.9 percent as of the fiscal year ended June 30, 2018. Recommendation R4 of the Grand Jury report suggests the City develop and publish a long-term financial plan to deal with rising pension costs,and update that plan annually.City Staff agree and will prepare a draft plan for City Council’s consideration. FISCAL IMPACT None. CONCLUSION Adoption of the accompanying resolution ensures compliance and responsiveness to the Grand Jury report findings and recommendations, and demonstrates the City’s commitment to addressing pension costs. Attachments: 1.San Mateo County Grand Jury Report “Soaring City Pension Costs - Time to Make Difficult Decisions”. 2.Pension Contributions 2016 - 2046 3.Pension Costs, Liabilities, and Funded Percentage City of South San Francisco Printed on 9/20/2018Page 3 of 3 powered by Legistar™ Soaring City Pension Costs – Time for Hard Choices. ATTACHMENT 1 i 2017-18 San Mateo County Civil Grand Jury Table of Contents SOARING CITY PENSION COSTS – TIME FOR HARD CHOICES ............................................. 1 ISSUES ..................................................................................................................................................... 1 SUMMARY .............................................................................................................................................. 1 GLOSSARY ............................................................................................................................................. 2 BACKGROUND ...................................................................................................................................... 4 The Cities’ Pension Plans. ...................................................................................................................... 4 Importance of Rate of Return on Investment....................................................................................... 6 Importance of Discount Rates. ............................................................................................................... 6 Debate Over CalPERS’ Discount Rates and Projected Rates of Return ........................................... 7 Importance of Amortization Periods. .................................................................................................... 9 Public Employees Pension Reform Act of 2013 (PEPRA) ................................................................. 10 “California Rule”. ................................................................................................................................. 12 CalPERS’ changes. ............................................................................................................................... 13 CalPERS’ reduction of Discount Rate from 7.5 to 7 percent. ............................................................ 14 CalPERS’ adoption of new mortality rate assumptions. ..................................................................... 15 CalPERS’ reduction of Amortization Period. ..................................................................................... 15 DISCUSSION ......................................................................................................................................... 15 Why are Unfunded Liabilities and Funded Percentages so important? .......................................... 15 The Cities’ Pension Costs and Unfunded Liabilities Today. ............................................................. 16 Unfunded Liabilities and Funded Percentages of the Cities. .............................................................. 16 Table No. 1 - Increasing Unfunded Liabilities and Decreasing Funded Percentages ......................... 16 Increase in Unfunded Liabilities and Decrease in Funded Percentages if a Lower Discount Rate is Used. ................................................................................................................................................... 17 Table No. 2 - Increased Pension Unfunded Liabilities and Decreased Funded Percentages if Discount Rate is Reduced By 1 percentage point .............................................................................................. 17 Increasing Pension Contribution Payments. ....................................................................................... 17 Table No. 3 - Increasing Pension Contribution Payments .................................................................. 17 Percentage of Employer Contribution Paid for Amortization Costs. .................................................. 18 Table No. 4 - Percentage of Cities’ FY 2017-18 Pension Costs that are Amortization Costs ............ 18 Interest Charges on Unfunded Liabilities ........................................................................................... 19 Table No. 5 - Interest payment savings where shorter Amortization Periods are applied .................. 19 What does the future hold? The Impact of Increasing Pension Costs on the Cities. ...................... 20 Table No. 6 - Increasing Pension Costs for Cities .............................................................................. 21 Table No. 7.1 - Redwood City’s projected increases in pension contribution costs from FY 2016- 2017 to FY 2024-2025 and FY 2027-2028 ......................................................................................... 22 ii 2017-18 San Mateo County Civil Grand Jury Table No. 7.2 – Menlo Park’s projected increases in pension contribution costs from FY 2016 -2017 to FY 2024-2025 and FY 2027-2028 .................................................................................................. 22 Table No. 7.3 – City of Pacifica’s projected increases in pension contribution costs from FY 2016- 2017 to FY 2024-2025 and FY 2027-2028 ......................................................................................... 23 Pension Information Provided by the Cities Could be Substantially Improved. ............................ 23 What can the Cities do About Their Rising Pension Costs? ............................................................. 24 Develop a Financial Plan .................................................................................................................... 24 Specific Measures for the Cities to Consider ...................................................................................... 25 (1) Make Supplemental Contributions to CalPERS. .................................................................... 26 (2) Make Contributions to a Reserve. ........................................................................................... 28 (3) Establish IRS Section 115 non-revocable trusts. .................................................................... 30 (4) Negotiate Cost-Sharing Arrangements with Employees. ........................................................ 31 (5) Pension Obligation Bonds (POBs). ......................................................................................... 31 (6) Shorten Amortization Periods. ................................................................................................ 32 (7) Keep Salary Increases Within the Rate Assumed by CalPERS. ............................................. 33 (8) Reduce Operating Costs. ......................................................................................................... 33 (9) Seek New Revenue. ................................................................................................................ 34 Measures That Appear Unavailable at this Time ................................................................................ 34 (a) Renegotiating employee pension formulas. ............................................................................ 34 (b) Adopting a defined contribution pension plan for new employees. ........................................ 35 (c) Withdrawing from CalPERS. .................................................................................................. 35 Conclusion. ............................................................................................................................................ 35 FINDINGS .............................................................................................................................................. 36 RECOMMENDATIONS ...................................................................................................................... 38 REQUEST FOR RESPONSES ............................................................................................................ 40 METHODOLOGY ................................................................................................................................ 41 APPENDIX A – CITIES’ PENSION DATA ......................................................................................... 1 APPENDIX B - HOW TO FIND PENSION DATA IN THE CITIES’ CAFRS ................................ 1 BIBLIOGRAPHY .................................................................................................................................... 1 Articles and Reports that are cited in report........................................................................................ 1 Cities’ Annual Financial Reports that are cited in the report or relied upon for the data reflected in Appendix A. ....................................................................................................................................... 11 Supplemental materials not cited in report but that were reviewed in the Grand Jury’s investigation ........................................................................................................................................... 15 2017-2018 San Mateo County Civil Grand Jury 1 SOARING CITY PENSION COSTS – TIME FOR HARD CHOICES Issues | Summary | Glossary | Background | Discussion | Findings | Recommendations Requests for Responses | Methodology | Appendixes | Bibliography | Responses ISSUES How high will the pension costs of cities within San Mateo County be in the next ten years and what actions can the cities take now to meet those obligations? SUMMARY Public pension costs are already eating into city budgets and represent a serious threat to public services in San Mateo County’s cities. In FY 2016-2017, the 20 cities within the county of San Mateo (the Cities) spent a total of $102 million on their pension plans, representing an average of approximately 13.6 percent of their general fund expenditures. As heavy a financial burden as this is, the Cities’ pension costs are projected to double by FY 2024-2025 if new actuarial assumptions made by CalPERS - the administrator of the Cities’ pension plans - prove to be correct. Many experts argue, however, that CalPERS’ assumptions are unduly optimistic. If these experts are correct, increases in the Cities’ pension costs could be even greater. The most important change in CalPERS’ actuarial assumptions is a lowered expectation for the Return on Investment for CalPERS’ pension fund assets. Since Return on Investment is expected to pay for the majority of retiree pensions, a lower investment return means that the Cities and their employees must make up the difference b y making larger payments into the pension fund. The Cities have no control over CalPERS’ assumptions, and each year they must pay the amount of money required by CalPERS. In each City, the city government and employees share a “Normal Cost” of paying for future retiree benefits. These will increase as a result of the changed CalPERS’s assumptions. However, each City also has an “Unfunded Liability” that represents the difference between the value of their pension fund assets and the present value of their long- term pension obligations. As a result, the Cities are required to pay “Amortization Costs” (principal plus interest) to CalPERS on their Unfunded Liabilities. Amortization Costs will also increase because of the changed CalPERS’ assumptions. On average, the Cities’ Normal Costs comprise 41 percent of their total pension payments to CalPERS, while Amortization Costs comprise 59 percent. The Cities have a number of options for paying steeply rising pension costs, each of which can be implemented on its own, or in combination. First, the Cities can cut public services, reduce employee salaries and benefits, or lay off employees in order to free up additional funds. Second, the Cities can negotiate with bargaining units to increase the employees’ share of pension costs. Third, the Cities can attempt to increase revenues from taxes. Fourth, the Cities can use other existing resources, if any, to pay down the Unfunded Liabilities early. The San Mateo Civil Grand Jury of 2017-2018 has found that the last choice could result in large savings for all the 2017-2018 San Mateo County Civil Grand Jury 2 Cities. In one scenario, the savings could exceed $125 million each for the Cities of San Mateo and Redwood City. In the course of its investigation, the Grand Jury learned that none of the Cities have adopted long-term financial plans to address their rising pension costs. Some Cities informed the Grand Jury that, while rising pension costs are important, they must be balanced against “other priorities” for new spending. While the Grand Jury understands the desire on the part of the Cities to expand their services in these times of growth and increasing property tax revenues, it is difficult to think of a more important issue for them to address than the looming pension crisis. Currently, the region enjoys unprecedented economic conditions, resulting in higher tax revenues and budget surpluses for many Cities. The Grand Jury asks: If the Cities do not address Unfunded Liabilities now, when will they ever be able to? The Grand Jury has compiled data regarding pension costs of each of the Cities, which are set forth in Appendix A of this report, as well as aggregate information for all of the Cities. This report also provides a general overview of public pension obligations, the major variables that drive pension cost and Unfunded Liability calculations, including how these variables can understate Unfunded Liabilities. This report describes the options available to the Cities to address the looming budgetary crises they face from rising pension costs. The Grand Jury recommends that the Cities make addressing pension costs a higher priority and that they engage residents in a discussion about the hard choices that their local governments will have to make. The Grand Jury also recommends that each City develop a financial plan to address rising pension costs. The Grand Jury does not recommend specific policies or implementation measures for the Cities to adopt, but the Grand Jury does identify a number of options for them to consider. GLOSSARY Agency: Any city, county, or other public entity employer that offers a pension plan to its employees through CalPERS. Each of the Cities is, accordingly, an “Agency” for purposes of this report. Amortization Cost: Payments by the Cities to CalPERS, to pay down their Unfunded Liability. It includes payments of (a) principal needed to pay off (amortize) the Unfunded Liability over a period of years, plus (b) interest charged by CalPERS on that liability. Amortization Period: The number of years over which an Unfunded Liability is to be paid off. Benefits or Benefits obligations: Amounts to be paid out of a pension plan’s assets to Members or their beneficiaries. 2017-2018 San Mateo County Civil Grand Jury 3 Comprehensive Annual Financial Report or CAFR: An annual financial report issued by government entities, such as the Cities. CalPERS: The California Public Employees Retirement System, which administers pension plans for all of the Cities. County: The government of San Mateo County. The geographic area of San Mateo County is referred to as the “county.” Discount Rate: The interest rate used in calculating the present value of future cash flows. CalPERS determines the Discount Rate it will use to calculate each pension plan’s Total Plan Liabilities and Unfunded Liabilities. Under public pension plan accounting rules, the Discount Rate is the same as the annual Return on Investment that CalPERS projects it will earn on plan assets. Funded Ratio or Funded Percentage: Measures the extent to which a pension plan’s assets match the present value of its projected future pension obligations. It is the ratio that results from dividing Total Plan Assets by Total Plan Liabilities. GASB: The Government Accounting Standards Board. Among other things, it sets financial accounting standards for public service employee pension plans. Members: Current and vested former employees of the Cities, or their beneficiaries, who participate in one of the Cities’ CalPERS pension plans. Miscellaneous Plans: Pension plans for public service employees who do not provide safety services such as police and fire protection. Miscellaneous Plans are generally less expensive to maintain than Safety Plans. Normal Cost: The contribution payments Agencies and their employees make to CalPERS in order to fund the projected lifetime cost (discounted to present value) of Benefits that accrue to current employee Members during that year. It does not include Amortization Costs. Return on Investment or Rate of Return: The annual gain or loss on invested pension plan assets. In public pension plans, this is the same as the Discount Rate. Safety Plans: Pension plans for public service employees who provide safety services, such as police and fire protection. Cities: The 20 cities located within the San Mateo County. 2017-2018 San Mateo County Civil Grand Jury 4 Total Plan Assets: The current dollar value of all assets within a pension plan (sometimes referred to in CAFRs as “Fiduciary Net Position”). Total Plan Liabilities: The present value of all future Benefit obligations under a pension plan (sometimes referred to in a CAFR as “Total Pension Liability”). Unfunded Liability: The dollar amount, if any, by which Total Plan Liabilities of a pension plan exceed its Total Plan Assets (sometimes referred to in a CAFR as “Net Pension Liability”). BACKGROUND The Cities’ Pension Plans. Each of the Cities provides its employees with a pension plan administered by CalPERS1 as an integral part of their compensation package. All of these plans are defined benefit plans2 in which future Benefits are determined by a formula that is set at the outset of employment.3,4 The Benefits are guaranteed by the Cities and do not depend on how well pension contributions are invested. Benefits are financed from three sources:5 1 See, the Comprehensive Annual Financial Reports (CAFRs) listed in the BIBLIOGRAPHY section below for each of the Cities. 2 See, CAFRs for each of the Cities listed in the BIBLIOGRAPHY section below. CalPERS, Comprehensive Annual Financial Report for the Year Ended June 30, 2017, p. 7, <https://www.calpers.ca.gov/docs/forms-publications/cafr- 2017.pdf>. 3 Biggs, Andrew and Smetters, Kent, Understanding the Argument for Market Valuation of Public Pension Liabilities, American Enterprise Institute. May 2013, p. 1, <http://www.aei.org/wp-content/uploads/2013/05/- understanding-the-argument-for-market-valuation-of-public-pension-liabilities_10491782445.pdf>. Ruloff, Mark, Defined Benefit Plans vs. Defined Contribution Plans, Pension Section News of Society of Actuaries, January 2005 – Issue No. 57, p. 1. Money-Zine, Defined Benefit versus Contribution Plans, July 5, 2017, <https://www.money- zine.com/financial-planning/retirement/defined-benefit-versus-contribution-plans/>. Investopedia, How does a defined benefit pension plan differ from a defined contribution plan?, March 2015, <https://www.investopedia.com/ask/answers/032415/how-does-defined-benefit-pension-plan-differ-defined- contribution-plan.asp>. 4 In contrast, most private companies’ retirement plans are defined contribution plans, such as 401k’s, where the amounts of future benefit payments vary depending on returns achieved on investments. Greenhut, Steven, California Still Facing Pension Crisis Even with Good Stock Market Returns, California Policy Center, July 14, 2017, <http://reason.com/archives/2017/07/14/dont-let-unions-use-good-returns-to-defl>. 5 CalPERS at a Glance, CalPERS Communications and Stakeholder Relations, <https://www.calpers.ca.gov/docs/forms-publications/calpers-at-a-glance.pdf>. CalPERS 2017 CAFR, p. 47. Lin, Judy, Retirement Debt: What’s the problem and how does it affect you? CalMatters.org, February 21, 2018, <https://calmatters.org/articles/california-retirement-pension-debt-explainer/>. Nation, Joe, Pension Math: How California’s Retirement Spending is Squeezing the State Budget. SIEPR (Stanford Institute for Economic Policy Research). December 13, 2011, p. 23, <http://arc.asm.ca.gov/NSR.pdf>. Nation, Joe and Storms, Evan, More Pension Math: Funded Status, Benefits, and Spending Trends for California’s Largest Independent Public Employee Pension Systems. SIEPR (Stanford Institute for Economic Policy Research). February 21, 2012, p. 3, <http://siepr.stanford.edu/sites/default/files/publications/Nation_More_Pension_0.pdf>. Biggs and Smetters, Understanding the Argument for Market Valuation , p. 3. 2017-2018 San Mateo County Civil Grand Jury 5 Current employee contributions to CalPERS of a fixed percentage of their salaries. These contributions go towards Normal Costs and pay for approximately 13 percent of Benefits paid under CalPERS’ pension plans). Agency (that is, employer) contributions to CalPERS of (i) the Normal Cost of the pension plan for that year (less the employee contributions amounts), plus (ii) if the pension plan has an Unfunded Liability (as do all of the Cities’ pension plans6), the Amortization Cost (that is, the cost of paying off that Unfunded Liability, including both principal and interest, over a period of years). These employer contributions pay for approximately 26 percent of Benefits paid under CalPERS’ pension plans.7 Return on Investment achieved by CalPERS from investing the contributions made by employees and Agencies between the time that the contributions are made and the date when Benefits payments come due. Historically, these Returns on Investment have paid for approximately 61 percent of Benefits paid under CalPERS’ pension plans.8 CalPERS determines the contributions that Agencies (that is, employers) must pay to CalPERS to cover future Benefits by calculating: (i) Benefits amounts that will have to be paid, based on assumptions that include projected future retirement rates, inflation, wage increases and post-retirement longevity, and (ii) Returns on Investment CalPERS expects to earn on employee and Agency contributions. To the extent that projected costs of Benefits increase unexpectedly, or Returns on Investment fall short of projections, pension plans will have Unfunded Liabilities. The Agencies rather than CalPERS are responsible for paying down all Unfunded Liabilities through increased contributions and the Agencies bear all the risk of CalPERS’ projections being wrong.9 Agencies 6 Appendix A. 7 CalPERS at a Glance. 8 CalPERS at a Glance. 9 The Economist, Buttonwood’s Notebook, The soaring cost of old age, The real problem with pensions, March 7, 2018, <https://www.economist.com/blogs/buttonwood/2018/03/soaring-cost-old-age>. Oliveira, Anthony, The Local Challenges of Pension Reform, Bartel Associates, May 24, 2010, p. 4, <http://www.bartel- associates.com/docs/default-source/articles/oliveira_a_the-challenges-of-pension-reform-1.pdf?sfvrsn=2>. Andonov, Aleksander, Bauer, Rob, Cremers, Martijn, Pension Fund Asset Allocation and Liability Discount Rates, 2017-2018 San Mateo County Civil Grand Jury 6 have no control over CalPERS’ determinations and must pay all contribution increases mandated by CalPERS.10 Importance of Rate of Return on Investment. As noted above, Returns on Investments are the primary funding source for meeting Benefits obligations. Accordingly, annual Returns on Investment achieved by CalPERS have a major impact on its ability to fund Benefits payments. As of June 30, 2017, CalPERS reported the following annualized net Returns on Investment over different periods of time:11 Past 3 years: 4.6 percent Past 5 years: 8.8 percent Past 10 years: 4.4 percent Past 20 years: 6.6 percent Even small changes in CalPERS’ annual Returns on Investments over the long-term can drive substantial changes in its ability to meet Benefit obligations. For example, if a pension plan had an obligation to pay Benefits of $150 million in 20 years and CalPERS projected that its annual Return on Investment over that time would average 7.5 percent, then CalPERS would need $35.5 million at the outset to meet that obligation. However, if the actual Return on Investment achieved by CalPERS over that period was only 6.5 percent instead of 7.5 percent, then the pension plan would only have $124.4 million available to pay Benefits in the 20th year,12 a shortfall of more than $35 million on the $150 million obligation. Importance of Discount Rates. To determine the Funded Percentage of a pension plan, CalPERS compares the value of the pension plan’s assets (Total Plan Assets) to the present value of the plan’s Benefits payment obligations (Total Plan Liabilities).13 If the present value of the Benefits obligations is larger than the current value of pension assets, then the plan is not fully funded and has an Unfunded Liability equal to the difference. In economic terms, the promise to make a future Benefit payment is worth less today than an immediate payment of the same amount. In order to compare the value of a promise to pay a March 2016, p. 1, <http://www.icpmnetwork.com/wp -content/uploads/2016/05/Rob-Buaer_What-Is-the-Biggest- Challeng-Faceing-Public-Plan-Sponsors_Optional.pdf>. 10 Interviews by Grand Jury. 11 CalPERS, Investment & Pension Funding Facts at a Glance for Fiscal Year 2016 -17, <https://www.calpers.ca.gov/docs/forms-publications/facts-investment-pension-funding.pdf>. 12 The formula for the 7.5 percent Return on Investment example is: $150 million / ((1.0 +0.075)^20) = $35,311,972. The formula for the 6.5 percent Return on Investme nt example is: $35,311,972 x (1.065^20) = $124,426,856. 13 Biggs and Smetters, Understanding the Argument for Market Valuation, p. 1. 2017-2018 San Mateo County Civil Grand Jury 7 Benefit in the future to the value of plan assets today, the value of the promise to make a future payment must first be discounted to its present value. As explained by Messrs. Biggs and Smetters: “Discounting is a process similar to compound interest. While compound interest begins with a current dollar amount and adds interest to determine the future value, discounting begins with the future value and subtracts interest each year until a present value is arrived at.”14 Even small changes in the annual interest to be subtracted from the future value (that is, the Discount Rate), significantly impact present value and, consequently, a plan’s Unfunded Liability.15 See, the section of this report entitled “Increase in Unfunded Liabilities and Decrease in Funded Percentages if a Lower Discount Rate is Used” at p. [16] for an example of the impact on the Cities of a drop of just one percentage point in the Discount Rate. As a result, the Discount Rate selected for this calculation matters a great deal. Debate Over CalPERS’ Discount Rates and Projected Rates of Return. Discount rates are set based on CalPERS’ projections for long-term Returns on Investment.16 The higher the projected Return on Investment, the higher the Discount Rate and the lower the Unfunded Liability. That is often referred to as the “assumed return approach”.17 Although GASB mandates this method of setting public pension plan Discount Rates,18 it is controversial.19 Many economists, academics and commentators claim it understates the size of Unfunded Liabilities.20 They argue that the present value of future Benefit obligations should be 14 Ibid., p. 4. 15 Nation, Pension Math 2011, pp. 9 and 11. 16 GASB Statement No. 68, Paragraph 64, <http://www.gasb.org/jsp/GASB/Document_C/DocumentPage?cid=1176160220621&acceptedDisclaimer=true>. Mixon, Peter, Estimating Future Costs at Public Pension Plans: Setting the Discount Rate. Pensions & Investments, April 29, 2015, p. 1, <http://www.pionline.com/article/20150429/ONLINE/150429853/estimating-future-costs-at- public-pension-plans-setting-the-discount-rate>. Brewington, Autumn, Making Sense of the Mathematics of California’s Pension Liability, Hoover Institution, August 21, 2012, <https://www.hoover.org/research/making- sense-mathematics-californias-pension-liability>. Biggs and Smetters, Understanding the Argument for Market Valuation, p. 4. 17 U.S. Government Accountability Office, Pension Plan Valuation: Views on Using Multiple Measures to Offer a More Complete Financial Picture, September 30, 2014, p. 2, <https://www.gao.gov/products/GAO-14-264> and <https://www.gao.gov/assets/670/666287.pdf>. Mixon, Estimating Future Costs at Public Pension Plans, p. 1. Turner, John, Godinez-Olivares, Humberto, McCarthy, David, del Carmen Boado-Penas, Maria, Determining Discount Rates Required to Fund Defined Benefit Plans, Society of Actuaries, January 2017, p. 6, <www.actuaries.org/oslo2015/papers/PBSS-Turner&GO&McC&B-P.pdf>. 18 GASB Statement No. 68, Paragraph 64. 19 Angelo, Paul, Understanding the Valuation of Public Pension Liabilities – Expected Cost versus Market Price, In the Public Interest, January 2016, p. 9, <https://www.soa.org/library/newsletters/in-public-interest/.../ip-2016-iss12- angelo.aspx>. 20 Mixon, Estimating Future Costs at Public Pension Plans, p. 1. U.S. Government Accountability Office, p. 2. Bui, Truong and Randazzo, Anthony, Why Discount Rates Should Reflect Liabilities: Best Practices for Setting Public Sector Pension Fund Discount Rates, Reason Foundation, September 2015, p. 4, <https://reason.org/wp- 2017-2018 San Mateo County Civil Grand Jury 8 based on a Discount Rate that reflects the value of those Benefits payments to the beneficiaries (that is, the amount an investor would pay today in exchange for the right to receive that future cash flow). Noting that obligations to pay Benefits in the future are similar to obligations to make future payments on municipal bonds, they argue that yield rates on municipal bonds having a duration and risk of non-payment similar to pension Benefits obligations are the best yardstick for establishing the value of those Benefit obligations and, accordingly, the Discount Rate.21 This approach is sometimes referred to as the “bond-based approach” or “market-based method.”22 However, other experts, particularly actuarial professionals, argue that this bond or market-based approach does not provide useful information to the Agency sponsoring a pension plan about the cost to that Agency of funding future benefit obligations. They point out that, for purposes of calculating contribution rates, the expected costs of meeting future Benefit obligations are the only relevant consideration and that such costs are best calculated based on “assumed rates of return.”23 Yet other experts believe that a variation on the assumed rate of return method in which the risk that future additional amortization payments will be necessary is factored into the Discount Rate offers the most useful information.24 This debate has important implications because CalPERS’ assumed Return on Investment (7.5 percent per year from 2012 to the present) is significantly greater than municipal bond yield rates.25 Since CalPERS’ projected Return on Investment exceeds that of municipal bonds yields, the result is greater Discount Rates and smaller present values of Benefit payment obligations and Unfunded Liabilities. Other experts do not engage in the debate between proponents of the assumed return approach and the bond or market-based approach but focus instead on concerns that CalPERS’ new projection of a 7.0 percent annual Return on Investment – approved in December 2016 but not content/uploads/files/pension_discount_rates_best_practices.pdf>. Biggs and Smetters, Understanding the Argument for Market Valuation, pp. 2-5. American Academy of Actuaries. Measuring Pension Obligations: Discount Rates Serve Various Purposes. American Academy of Actuaries Issue Brief, November 2013 , <http://www.actuary.org/files/IB_Measuring-Pension-Obligations_Nov-21-2013.pdf>. 21 Bui and Randazzo, Why Discount Rates Should Reflect Liabilities, p. 2. U.S. Government Accountability Office, p. 2. Biggs and Smetters, Understanding the Argument for Market Valuation, p. 5. American Academy of Actuaries, p. 2. 22 Mixon, Estimating Future Costs at Public Pension Plans, p. 2. U.S. Government Accountability Office, p. 2. 23 American Academy of Actuaries, p. 2. Angelo, Understanding the Valuation of Public Pension Liabilities, pp. 9, 11-12. Mixon, Estimating Future Costs at Public Pension Plans, p. 2. See also, Nation, Pension Math 2011, p. 12, for a chart outlining the arguments for and against public pension systems using high Discount Rates. 24 Turner, Determining Discount Rates, p. 3. 25 Boyd, Donald, Kiernan, Peter, Strengthening the Security of Public Sector Defined Benefit Plans, The Blinken Report, The Nelson A. Rockefeller Institute of Government. January 2014, pp. 38-39, footnote 12, <www.rockinst.org/pdf/government_finance/2014-01-Blinken_Report_One.pdf>. Angelo, Understanding the Valuation of Public Pension Liabilities, p. 10. U.S. Government Accountability Office, pp. 2-3. 2017-2018 San Mateo County Civil Grand Jury 9 yet implemented26 – is unrealistically high. They claim that a more reasonable projection would be 6.0 - 6.5 percent.27 Wilshire Consulting, CalPERS’ general consultant, has advised CalPERS’ board that it expects the CalPERS’ Return on Investment over the next ten years to be just 6.2 percent.28 It should be noted, however, that CalPERS makes Discount Rate decisions based on projected Returns on Investments over 60-year periods, not 10. CalPERS’ projected 60-year Returns on Investment are in line with its new 7 percent Discount Rate.29 As noted above, if Discount Rates and projected Returns on Investment are too high, then they understate the size of the Cities’ Benefit payment obligations and Unfunded Liabilities. Importance of Amortization Periods. If a pension plan has Unfunded Liabilities, CalPERS requires the sponsoring Agency to pay off (amortize) that Unfunded Liability, together with interest accrued at a rate equal to CalPERS’ projected Rate of Return,30 through higher annual contribution payments over the Amortization Period. Historically, CalPERS’ standard Amortization Period for investment gains and losses 26 League of California Cities, CalPERS Stays the Course, Adopts a 7 Percent Assumed Rate of Return , December 22, 2017, <https://www.cacities.org/Top/News/News-Articles/2017/December/CAlPERS-Stays-the-Course,- Adopts-a-7-Percent-Assum>. 27 Nation, Pension Math 2011, p. 13. Lin, Retirement Debt. Munnell, Alicia, Appropriate discount rate for public plans is not simple, MarketWatch, October 5, 2015, <https://www.marketwatch.com/story/appropriate-discount- rate-for-public-plans-is-not-simple-2016-10-05>. 28 Rose-Smith, Imogen, How Low Can CalPERS Go? Institutional Investor.com, November 30, 2016, <https://www.institutionalinvestor.com/article/b14z9p7tw9pdz0/how-low-can-calpers-go>. Kasler, Dale, With investments soft, CalPERS eyes higher contribution rates. What does that mean for workers? Sacramento Bee, November 21, 2016, <www.sacbee.com/news/business/article116331443.html>. Kasler, Dale, CalPERS moves to slash investment forecast. That means higher pension contributions are coming., Sacramento Bee, December 21, 2016, <http://www.sacbee.com/news/business/article122088759.html>. League of California Cities, CalPERS Stays the Course. 29 Diamond, Randy, CalPERS considers 4 asset allocation options; local officials prefer avoiding major changes, November 14, 2017, p. 2, <http://www.pionline.com/article/20171114/ONLINE/171119918/calpers-considers-4- asset-allocation-options-local-officials-prefer-avoiding-major-changes>. CNBC.com, CalPERS’s sees 5.8 percent return with new allocation; below 7 percent goal, February 8, 2017, <https://www.cnbc.com/2017/02/08/calperss- sees-58-percent-return-with-new-allocation-below-7-percent-goal.html>. See also, League of California Cities, League of California Cities Retirement System Sustainability Study and Findings , January 2018, p. 29, <https://www.cacities.org/Resources-Documents/Policy-Advocacy-Section/Hot-Issues/Retirement-System- Sustainability/League-Pension-Survey-(web)-FINAL.aspx>, in which the authors note that CalPERS’ determi nes its Discount Rate based on expectations for returns on investment over a 60 year period. 30 Interviews by Grand Jury. Mendel, Ed, Old cause of pension debt gets new attention, Calpensions, July 10, 2017, p. 1, <https://calpensions.com/2017/07/10/old-cause-of-pension-debt-gets-new-attention/>. City of La Palma, CalPERS Update and Additional Payment Discussion, February 20, 2018, slide 22, <https://www.cityoflapalma.org/ArchiveCenter/ViewFile/Item/2374 >. Eastman, Becky, Report on status of Belvedere’s employee pension funds, May 13, 2013, p. 6, <http://www.cityofbelvedere.org/DocumentCenter/View/1425>. 2017-2018 San Mateo County Civil Grand Jury 10 was 30 years,31 but an Agency could elect a shorter Amortization Period.32 Like home loan repayment terms, the longer the Amortization Period, the lower the annual payment, but the larger the accrued interest costs. Examples of the cost of accrued interest to four of the Cities over different Amortization Periods are given in Table No. 5. Public Employees Pension Reform Act of 2013 (PEPRA). In response to soaring public pension Unfunded Liabilities, the California Legislature adopted the California Public Employees Pension Reform Act of 2013 (PEPRA), which imposed significant reductions on state and local government pension benefits, primarily for employees hired after January 1, 2013 (referred to as “New Members”). Employees hired prior to that date are termed “Classic Members.”33 Classic Members who change public employers retain their “Classic” status.34 Thus, to date, the impact of PEPRA on public pension liabilities has been small.35 However, it will increase over time as Classic Members retire and are replaced by New Members. Some of the most important changes mandated by PEPRA include: Reduced pension benefit formulas for New Members. For New Member employees with Miscellaneous Plans, PEPRA requires a “2 percent at age 62” benefit formula, that is, a New Member retiring at age 62 is entitled to a pension equal to his number of years of 31 League of California Cities, CalPERS Board Reduces Amortization Policy, February 14, 2018, <https://www.cacities.org/Top/News/News-Articles/2018/February/CalPERS-Board-Reduces-Amortization- Policy>. Lowe, Stephanie and Rogers, Frances, CalPERS Reduces Amortization Period with Impacts to Employer Contribution Rates, California Public Agency Labor & Employment Blog, Liebert Cassidy Whitmore), March 1, 2018, <https://www.calpublicagencylaboremploymentblog.com/retirement/calpers-reduces-amortization-period- with-impacts-to-employer-contribution-rates/>. CalPERS Actuarial Office, Finance and Administration Committee, Agenda Item 7a, Amortization Policy (Second Reading), February 13, 2018, <https://www.calpers.ca.gov/docs/board-agendas/201802/financeadmin/item-7a-00_a.pdf>.Jacobius, Arleen, CalPERS shortens amortization period to 20 years, Pensions & Investments, February 14, 2018, <http://www.pionline.com/article/20180214/ONLINE/180219934/calpers-shortens-amortization-period-to-20- years>. 32 Interviews by Grand Jury. However, if an Agency selects a shorter Amortization Period, CalPERS does not permit it to reverse that election later. Interviews by Grand Jury. 33 CalPERS, Summary of Public Employees Pension Reform Act of 2013 and Related Changes to Public Employees’ Retirement Law, November 27, 2012, pp. 1-2, <http://www.counties.org/sites/main/files/file- attachments/calpers_summary.pdf>. 34 Ibid. CalPERS, A Guide to CalPERS: When You Change Retirement Systems, p. 3, <https://www.calpers.ca.gov/docs/forms-publications/change-retirement-systems.pdf>. 35 League of California Cities, 2018 Retirement System Sustainability Study, pp. 2 and 5. Hutchings, Dane, Closing the Pension Funding Gap, League of California Cities, slide 4, <https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwj4wY nghL7bAhUPJ3wKHeqPCW0QFggpMAA&url=https%3A%2F%2Fwww.cacities.org%2FResources - Documents%2FPolicy-Advocacy-Section%2FHot-Issues%2FRetirement-System- Sustainability%2FPension_Gap_Public.aspx&usg=AOvVaw2C02vB9pPOI9v_n_zbeA38>. Redwood City, Report – FY 2017-18 Mid-Year Budget Study Session and Proposed Process for Development of the FY 2 018-19 Budget, February 26, 2018, p. 10, <https://www.redwoodcity.org/home/showdocument?id=14650>. 2017-2018 San Mateo County Civil Grand Jury 11 service, times 2 percent, times his average salary.36 A New Member retiring before age 62 would have a pension that is further reduced. For instance, at age 55, a New Member is entitled to a pension equal to his years of service, times 1.3 percent, times his average salary.37 Many Classic Members are entitled to more generous Benefits. For example, many City of San Carlos Classic employees under Miscellaneous Plans have pensions calculated according to a “2.7 percent at 55” formula.38 Such an employee with 30 years of government service is entitled to a pension equal to 81 percent of their salary at age 55.39 By comparison, a New Member with 30 years of government service would be entitled to a pension equal to just 39 percent of salary at that same age,40 or less than 50 percent of what a Classic Member would receive. PEPRA specifies similar but more complex reductions for New Members under Safety Plans.41 Caps on annual salary basis for calculation. PEPRA also caps the amount of annual salary that can be used to calculate pensions for New Members at $113,700 (if Social Security is also offered) plus cost of living adjustments (COLAs), or $136,440 (if Social Security is not offered) plus COLA.42 These caps are less than the salaries of many middle and upper management government employees.43 Classic Members are not subject to salary caps in calculating their pensions.44 Averaging of salaries for calculation. PEPRA requires, in calculating the annual salary used to calculate pensions, that New Members use the average of the three highest consecutive years salary.45 In contrast, some public agencies allow Classic Members to use just their highest salary year. Prohibition on “spiking” salaries. PEPRA also prohibits “spiking” salaries used to calculate pensions by including overtime, bonuses, cash payouts for unused vacation or sick leave, severance pay and the like.46 36 CalPERS, Summary Public Employee Reform Act, p. 2. 37 CalPERS, Retirement Formulas and Benefit Factors: Your Benefits / Your Future What You Need to Know About Your CalPERS Local Miscellaneous Benefits, p. 28, <http://www.reedley.ca.gov/departments/administrative/pdfs/CalPERS%202016-01- 01%20Local%20Miscellaneous%20Pub%208.pdf>. 38 City of San Carlos, Teamsters Group – Benefits Summary 2018, p. 3. 39 CalPERS, Retirement Formulas and Benefit Factors, pp. 32-33. 40 Ibid., pp. 28-29. 41 CalPERS, Summary Public Employee Reform Act, p. 2. 42 Ibid., p. 3. 43 Interviews by Grand Jury. 44 CalPERS, Summary Public Employee Reform Act, p. 3. 45 Ibid., pp. 9-10. 46 Ibid., pp. 8-9. 2017-2018 San Mateo County Civil Grand Jury 12 Prohibition on purchases of “airtime”. PEPRA also prohibits employees from purchasing nonqualified service time (“airtime”), which allows Members to boost their pensions by buying up to five years of additional service credit.47 As discussed below, PEPRA may have intended to apply some of these prohibitions to both Classic and New Members. However, whether these provisions apply to Classic Members is currently before the California Supreme Court. “California Rule”. A major obstacle to reducing the pension Benefits to be earned by Classic employees in the future is the so-called “California rule,” an interpretation of a 1955 state Supreme Court decision48 that public employee pension Benefits, once granted, can never be modified, even for future work, without providing “comparable new advantages,” and that also still leave employees with a “reasonable” pension.49 However, in 2016, a Court of Appeal ruled that, under the Supreme Court’s decision, employees only have a vested right to “a ‘reasonable pension’ – not an immutable entitlement to the most optimal formula of calculating the pension.” 50 At issue in that case was the prohibition on “spiking” discussed above at p. 11. A few months later, another Court of Appeal reached a similar conclusion in upholding a prohibition on the purchasing of “airtime” discussed above at p. 12.51 However, a third Court of Appeal recently reached a different conclusion, finding that detrimental changes to pension benefits of Classic Members would only be upheld as “reasonable” if supported by “compelling evidence that the required changes ‘bear a material relation to the theory … of a pension system’ and its successful operation.”52 The California Supreme Court is currently considering appeals of all three Court of 47 Ibid., pp. 7-8. 48 Allen v. City of Long Beach, 45 Cal.2d 128 (1955), <https://scocal.stanford.edu/opinion/allen-v-city-long-beach- 26585>. 49 Allen v. City of Long Beach, 45 Cal.2d 128 at 131. Beyerdorf, Brian, The Fate of Public Employee Pensions: Marin’s Revision of the ‘California Rule’, California Law Review Online, September 2017, p. 1, <www.californialawreview.org/wp-content/uploads/2017/09/Beyersdorf-02-formatted-62-72.pdf>. Walters, Dan, Jerry Brown, nearing end of terms, defies unions on pensions, San Francisco Chronicle, November 28, 2017, <https://www.sfchronicle.com/news/article/Jerry-Brown-nearing-end-of-term-defies-unions-12389814.php>. 50 Marin Association of Public Employees v. Marin County Employees Retirement Association , 2 Cal. App. 5th 674 at 680 (1st Dist. 2016), <https://www.leagle.com/decision/incaco20160817007 >. 51 Cal Fire Local 2881 et al., v. California Public Employees’ Retirement System et al., 7 Cal. App. 5th 115 (1st Dist. 2016), <https://www.eastbaytimes.com/wp -content/uploads/2017/01/123016-appellate-court-ruling.pdf>. 52 Alameda County Deputy Sheriff’s Association, et al. v. Alameda County Employees’ Retirement Assn., et al., Case No. A141913, filed January 8, 2018, as modified February 5, 2018 , <https://www.gmsr.com/wp- content/uploads/2018/04/scw-A141913M.pdf>. Rogers, Frances and Overby, Brett, California Court of Appeal Issues A Contrary Decision Addressing “Vested Rights” of Public Employees in the Aftermath of PEPRA: Where will the Supreme Court Land?, California Public Agency Labor & Employment Blog (Liebert Cassidy Whitmore), January 10, 2018, <https://www.calpublicagencylaboremploymentblog.com/pension/california-court-of-appeal- issues-a-contrary-decision-addressing-vested-rights-of-public-employees-in-the-aftermath-of-pepra-where-will-the- supreme-court-land/>. 2017-2018 San Mateo County Civil Grand Jury 13 Appeal rulings.53 Acceptance of the “reasonable pension” standard enunciated in the first two Court of Appeal cases could have significant implications for future pension reform efforts, as well as eliminate the pension “spiking” and “air time” practices for both Classic and New Members. CalPERS’ changes. CalPERS administers pension plans for Agencies throughout California. CalPERS’ system-wide Funded Percentage (that is, value of current assets divided by the present value of future Benefit payments) is only 68 percent.54,55 As discussed below in the section entitled “Unfunded Liabilities and Funded Percentages of the Cities” at p. 16, among private sector pension plans, a Funded Percentage of 80 percent is the threshold below which a plan’s solvency is considered “at risk”.56 CalPERS’ reported 68 percent Funded Percentage is based on a Return on Investment and Discount Rate assumption of 7 percent. CalPERS has been criticized in the past for inaccurate assumptions made in its calculations of future Benefits obligations and Returns on Investment.57 The May 2017 Roeder Survey of California public pension plans ranked CalPERS a poor 34th out of 37 California public pension plans rated for “funding assumptions.”58 However, CalPERS has begun taking actions to strengthen its pension system. 53 Webster, Keeley, More briefs ask State Supreme Court to weaken California rule on pensions , The Bond Buyer, February 27, 2018, <https://www.bondbuyer.com/news/more-briefs-ask-state-supreme-court-to-weaken-california- rule-on-pensions>. GMSR Appellate Lawyers, California Supreme Court Watch, #18-49, <https://www.gmsr.com/18-49-alameda-county-deputy-sheriffs-assn-v-alameda-county-employees-retirement-assn- s247095-a141913-19-cal-app-5th-61-mod-19-cal-app-5th-945a-contra-costa-county-superior/>. 54 Terando, Scott, Strategies for Managing the New Reality, CalPERS, September 15, 2017, slide 8, <https://www.cacities.org/Resources-Documents/Education-and-Events-Section/Annual-Conference/2017- Handouts/Strategies-for-Managing-the-New-Reality-of-CalPERS>. CalPERS 2017 CAFR, p. 27. CalPERS, CalPERS Reports Preliminary 11.2 Percent Investment Return for Fiscal Year 2016 -17, July 14, 2017, p. 1, <https://www.calpers.ca.gov/page/newsroom/calpers-news/2017/preliminary-fiscal-year-investment-returns>. 55 A Funded Percentage of 68 percent is low compared to CalPERS’ historic Funded Percentages over the last 25 years. For a chart showing these percentages since 1993, see, Fox, Kelly, CalPERS Update and Path Forward, December 13, 2017, p. 16, <https://www.cacities.org/Resources-Documents/Education-and-Events-Section/Fire- Chiefs/2017-Session-Materials/CalPERS-History-and-Pension-Updates>. 56 Nation, Pension Math 2011, p. 17. Financial analyst Rick Roeder notes that a public pension plan with a Funded Percentage in the 80-90 percent range is considered “reasonably well funded.” Roeder, Rick, Roeder Financial, California Pension Systems: Ranking their Funding Assumptions, May 2017, p. 2, <http://roederfinancial.com/ramblings.php?ramble=42>. 57 See, for example, the following: Ring, Edward, Did CalPERS Use Accounting “Gimmicks” to Enable Financially Unsustainable Pensions?, California Policy Center, January 24, 2018, <https://californiapolicycenter.org/calpers- use-accounting-gimmicks-enable-financially-unsustainable-pensions/>. Dolan, Jack, How a pension deal went wrong and cost California taxpayers billions, Los Angeles Times, September 18, 2016, <http://www.latimes.com/projects/la-me -pension-crisis-davis-deal/>. Malanga, Steven, The Pension Fund that Ate California, The City Journal, <https://www.city-journal.org/html/pension-fund-ate-california-13528.html>. 58 Roeder, Rick, Roeder Financial, California 2017 Funding Assumption Survey, May 2017, <http://roederfinancial.com/RoederSurvey2017.html>. 2017-2018 San Mateo County Civil Grand Jury 14 CalPERS’ reduction of Discount Rate from 7.5 to 7 percent. In late 2016, CalPERS decided to lower its Discount Rate from 7.5 to 7.0 percent.59 This will have the effect of significantly increasing the size of CalPERS’ Unfunded Liabilities and, accordingly, the contribution amounts Agencies must pay. One expert has estimated that, for every one quarter percentage point decrease in the Discount Rate, Agency contribution rates (that is, the size of their contribution payments as a percentage of total payroll) go up by approximately 2.5 percentage points.60 A 5 percentage point increase in the contribution rate would represent a large increase in payments by the Cities as their average contribution rate in FY 2017-2018 was 27.3 percent.61 In order to give Agencies time to prepare for these increased costs, CalPERS intends to phase in the change in its Discount Rate from 7.5 to 7 percent over a three-year period as follows62: FY 2018-2019: 7.35% FY 2019-2020: 7.25% FY 2020-2021: 7.00% To further ease the impact on Agencies of these Discount Rate reductions, CalPERS plans to phase in the resulting contribution payment increases over an additional 5 years.63 As a result, the full cost of the Discount Rate decreases to 7 percent will not be felt by Agencies until approximately FY 2024-2025.64 This phasing-in process comes at a cost, however, as it allows interest to continue to accrue on Unfunded Liabilities for a longer time, thereby increasing total costs that the Cities will eventually have to pay. In late 2017, CalPERS considered lowering its Discount Rate even further, down to 6.75 or even 6.5 percent.65 Agencies objected because of the increased contribution costs this would impose on them and CalPERS decided not to lower the Discount Rate below 7 percent.66 However, one expert has projected that it is “likely” CalPERS’ Discount Rate will be lowered, in a series of steps, down to 6 percent over the course of the next 20 years or so.67 59 CalPERS, CalPERS to Lower Discount Rate to Seven Percent Over the Next Three Years, December 21, 2016,< https://www.calpers.ca.gov/page/newsroom/calpers-news/.../calpers-lower-discount-rate>. 60 Nation, Pension Math 2011, pp. 25-26. 61 Appendix A. 62 CalPERS, CalPERS to Lower Discount Rate to Seven Percent. Terando, Strategies for Managing the New Reality, slide 6. 63 Mendel, Old cause of pension debt, p. 3. 64 League of California Cities, CalPERS Stays the Course. 65 Diamond, CalPERS considers 4 asset allocation options, p. 1. 66 Ibid. League of California Cities, CalPERS Stays the Course. 67 Lin, Bianca and Childs, Matthew, City of Pacifica Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, September 18, 2017, slide 3, <http://www.cityofpacifica.org/civicax/filebank/blobdload.aspx?BlobID=13378 >. Lin, Bianca and Yam, Wai Man, City of Menlo Park Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, May 2, 2017, slide 10, <https://www.menlopark.org/DocumentCenter/View/14392/D2 -MenloPark-17-05-02-CalPERS-Misc-Safety>. Lin, 2017-2018 San Mateo County Civil Grand Jury 15 CalPERS’ adoption of new mortality rate assumptions. In 2014, CalPERS adopted new mortality rate assumptions reflecting the fact that retirees are expected to live longer. These assumption changes were projected to have the effect of increasing Agencies’ pension contribution costs. 68 CalPERS’ reduction of Amortization Period. In February 2018, CalPERS reduced its standard Amortization Period from 30 to 20 years.69 To “avoid undue disruption” to Agency budgets, CalPERS proposes to implement the new period prospectively only, starting with amortization bases established by its June 30, 2017 valuation. Amortization bases established prior to that date would continue as scheduled under current policy.70 Although this change will decrease the Cities’ pension costs over the long run (see, Table No. 5 below for examples of such savings), in the near term shortened Amortization Periods will increase their contribution payments. DISCUSSION Why are Unfunded Liabilities and Funded Percentages so important? The Grand Jury chose to study public pension costs and Unfunded Liabilities because they represent a serious threat to public services county-wide and are already eating into public agency budgets.71 The League of California Cities recently warned: “Rising pension costs will require cities over the next seven years to nearly double the percentage of their general fund dollars they pay to CalPERS…[U]nder current law, cities have two choices – attempt to increase revenue or reduce services. Given that police and fire services comprise a large percentage of city general fund budgets, public safety, including response time, will likely be impacted.”72 The effects of increasing pension costs are clear: As payments consume a larger share of cities’ budgets, it becomes more difficult to maintain, much less improve, public services. Bianca and Yang Kevin, Redwood City Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, February 13, 2017, slide 7. 68 Bartel Associates, LLC, New CalPERS Assumptions Will Increase Rates, February 23, 2014, <http://www.bartel- associates.com/news/2014/02/23/new-calpers-assumptions-will-increase-rates>. 69 Lowe and Rogers, CalPERS Reduces Amortization Period. CalPERS, Agenda Item 7a, Amortization Policy, p. 1.. 70 Ibid., p. 4. 71 Nation, Pension Math: Public Pension Spending and Service Crowd Out in California, 2003 -2030, October 2, 2017, p. xi, <https://siepr.stanford.edu/research/publications/pension -math-public-pension-spending-and-service- crowd-out-california-2003>. League of California Cities, 2018 Retirement System Sustainability Study, p. 5. 72 League of California Cities, 2018 Retirement System Sustainability Study, p. 1. 2017-2018 San Mateo County Civil Grand Jury 16 As Unfunded Liabilities increase, cities’ municipal bond ratings may be hurt, which could increase the cost of other public improvement projects that require bonds. Public employees may face reduced compensation, reduced COLAs, or layoffs. Retired employees may find the security of their pensions threatened (obligations “guaranteed” by the state constitution have been voided in situations of bankruptcy)73. Residents may be asked to raise taxes; a difficult “sell” in the present political climate when the reason is to pay for legacy pension costs and not current services.74 The Cities’ Pension Costs and Unfunded Liabilities Today. Appendix A shows each City’s pension costs, Funded Percentage and Unfunded Liabilities for FY 2016-2017 (the most recent year for which information is available), together with a comparison to each of the two immediately preceding fiscal years. A review of Appendix A data on a consolidated basis (shown at the bottom of Appendix A) is also revealing. A discussion of that consolidated data for the Cities follows. Unfunded Liabilities and Funded Percentages of the Cities. Two important measures of the health of pension plans are the size of their Unfunded Liabilities and their Funded Percentages. Table No. 1 (below) shows, based on the 7.5 percent Discount Rate then being used by CalPERS, that the Cities’ aggregate Unfunded Liabilities increased by 10.7 percent from FY 2014-2015 to FY 2015-2016 and by another 22.2 percent from FY 2015- 2016 to FY 2016-2017. Funded Percentages correspondingly decreased, at an accelerating rate, over these 3 years. Table No. 1 - Increasing Unfunded Liabilities and Decreasing Funded Percentages ($000) Unfunded Liabilities Percent Increase in Unfunded Liabilities Funded Percentage 2016-2017 $1,215,465 22.2% 70.5% 2015-2016 $994,535 10.7% 75.1% 2014-2015 $898,036 76.8% (See, Appendix A.) As noted previously, among private sector pension plans, a Funded Percentage of 80 percent is the threshold below which a plan’s solvency is considered “at risk”.75 Table No. 1 shows that the Funded Percentage for the Cities’ pension plans, while slightly higher than CalPERS’ system- wide Funded Percentage of 68 percent, has dropped to 70.5 percent, almost 10 percentage points below this 80 percent “at risk” threshold. The Funded Percentages in Table No. 1 would be significantly lower, and the Unfunded Liabilities correspondingly higher, if a lower Discount Rate were applied. This difference is shown in Table No. 2, below. 73 Ang, Kimberly, What Happens to Public Employee Retirement Benefits When Municipalities Go Bankrupt?, United States Common Sense, March 10, 2016, p. 3, <http://govrank.org/research/researchText/45>. 74 Interviews by Grand Jury. 75 Nation, Pension Math 2011, p. 17. 2017-2018 San Mateo County Civil Grand Jury 17 Increase in Unfunded Liabilities and Decrease in Funded Percentages if a Lower Discount Rate is Used. The Cities’ Unfunded Liabilities and Funded Percentages in Table No. 1 were calculated using CalPERS then-applicable Discount Rate of 7.5 percent. If, however, the Discount Rate had been just one percentage point lower, the Cities’ Unfunded Liabilities for FY 2016-2017 would have been approximately 44 percent larger (as shown in Table No. 2) and the corresponding Funded Percentage that year would have been 62.4 percent rather than 70.5 percent, almost 18 percentage points below the 80 percent Funded Percentage standard. Table No. 2 - Increased Pension Unfunded Liabilities and Decreased Funded Percentages if Discount Rate is Reduced By 1 percentage point ($000) Fiscal Year Unfunded Liabilities based on 7.5 % Discount Rate Unfunded Liabilities based on 6.5 % Discount Rate Funded Percentages based on 7.5 % Discount Rates Funded Percentages based on 6.5 % Discount Rates 2016-2017 $1,215,465 $1,755,047 70.5% 62.4% 2015-2016 $994,535 $1,515,521 75.1% 66.5% 2014-2015 $898,036 $1,399,702 76.8% 68.0% (See, Appendix A.) Applying its new Discount Rate of 7 percent (which will be implemented in stages over the three fiscal years ending FY 2020-2021), CalPERS states that its current, system-wide Funded Percentage is 68 percent.76 However, if long-term Returns on Investment decrease, or are projected to decrease, below 7 percent, then CalPERS’ Funded Percentage (and corresponding Discount Rate) would drop even lower. For example, at a Discount Rate of 6.2 percent, it has been estimated that CalPERS’ Funded Percentage would drop by almost 10 percentage points, from 68 to 58.3 percent.77 Increasing Pension Contribution Payments. Increasing Unfunded Liabilities result in larger contribution payment costs. Table No. 3 shows how the Cities’ contribution costs have risen from FY 2014-2015 through FY 2016-2017 and how the percentages of cities’ payroll and general fund spending consumed by contribution payments have been increasing. Table No. 3 - Increasing Pension Contribution Payments ($000) Fiscal Year Total Contribution Payments Contributions as a percent of covered payroll Contributions as a percent of general fund spending 2016-2017 $104,986 27.3% 13.6% 2015-2016 $95,987 27.4% 13.2% 2014-2015 $85,335 25.5% 12.8% (See, Appendix A.) 76 Terando, Strategies for Managing the New Reality, slide 8. CalPERS 2017 CAFR, p. 27. League of California Cities, 2018 Retirement System Sustainability Study, p. 1. 77 Nation, 2011 Pension Math, p. vii. 2017-2018 San Mateo County Civil Grand Jury 18 The average, statewide percentage of Agencies’ general fund budgets projected to be paid to CalPERS in FY 2017-2018 is 11.2 percent.78 In comparison, the Cities’ pension costs in FY 2016-2017 represented an average of 13.6 percent of their general fund spending. Percentage of Employer Contribution Paid for Amortization Costs. All of the Cities have substantial Unfunded Liabilities79 and a significant and increasing portion of their contribution payments go to paying Amortization Costs (that is, payments required to pay off Unfunded Liabilities, including accrued interest). Table No. 4 (below) shows that well over half of the Cities’ contribution payments in FY 2017-2018 have been applied to payment of Amortization Costs. Table No. 4 - Percentage of Cities’ FY 2017-18 Pension Costs that are Amortization Costs ($000) City 2017-2018 Normal Costs 2017-2018 Amortization Costs % of 2017-2018 Total Contribution Costs for Amortization Belmont $1,473 $2,046 58.1% Brisbane $989 $912 48.0% Burlingame $2,552 $3,183 55.5% Daly City $6,281 $7.184 53.4% East Palo Alto $1,024 $635 38.3% Half Moon Bay $174 $654 79.0% Menlo Park $2,841 $2,915 50.6% Millbrae $783 $2,907 78.8% Pacifica $2,084 $2,043 49.5% Redwood City $8,767 $12,479 58.7% San Bruno $3,334 $4,070 55.0% San Carlos $715 $2,565 78.2% City of San Mateo $6,750 $11,239 62.5% South San Francisco $5,872 $9,171 61.0% Total Total Weighted Average $43,637 $62,001 58.7% California Policy Center, CalPERS Actuarial Report Data – Cities ($=M), <http://californiapolicycenter.org/wp-content/uploads/2018/02/CalPERS-Actuarial-Report-Data- Cities-and-Counties-w-totals.xlsx>. The California Policy Center provides pension cost data for 14 of the 20 Cities. Data for Atherton, Colma, Foster City, Hillsborough, Portola Valley and Woodside was not provided. 78 League of California Cities, 2018 Retirement System Sustainability Study, p. 4. 79 Appendix A. 2017-2018 San Mateo County Civil Grand Jury 19 Interest Charges on Unfunded Liabilities. CalPERS charges interest on Unfunded Liabilities at an annual rate equal to the then-current Discount Rate.80 Accordingly, the 30-year Amortization Period historically used by CalPERS to amortize Unfunded Liabilities results in interest payments that make up a large percentage of total Amortization Costs. Table No. 5 (below) shows, by way of example, that more than 50 percent of the Amortization Costs paid by South San Francisco, Redwood City, the City of San Mateo, and Daly City go to interest payments. It also shows that, if the Amortization Periods were shortened to 20 years, or even 15, those Cities would realize large savings on interest. Most notably, the City of San Mateo would save $56 million under a 20-year Amortization Period and $126 million with a 15-year period. Redwood City would save $55 million by switching to a 20- year Amortization Period and $134 million with a 15-year period. Table No. 5 - Interest payment savings where shorter Amortization Periods are applied ($000) Interest over 30 years Interest over 20 years Interest over 15 years City Total payments over 30-years (using 30-year Amortization Period). Interest payments over 30- years. Percent of 30- year. Amortization Cost payments consisting of interest payments. Interest payments over 20-years (using 20-year Amortization Period). Savings compared to 30-year period. Interest payments over 15-years (using 15-year Amortization Period). Savings compared to 30-year period South S.F. 81 $390,708 $206,436 52.8% $185,162 $20,574 $127,457 $78,979 Redwood City82 $553,787 $305,671 55.2% $250,256 $55,415 $171,616 $134,055 City of San Mateo83 $502,874 $280,510 55.8% $224,282 $56,228 $153,805 $126,706 Daly City84 $371,749 $201,920 54.3% $171,295 $30,625 $117,468 $84,452 Shortening the Amortization Period is only one way that savings on interest can be achieved. Savings can also be made by reducing the size of the Unfunded Liabilities through supplemental 80 Interviews by Grand Jury. Mendel, Old cause of pension debt, p. 1. City of La Palma, slide 22. Eastman, p. 6. City of Daly City, Comprehensive Biennial Operating and Capital Budget, Fiscal Years 2017 and 2018 , p. 25. 81CalPERS, Actuarial Valuation – June 30, 2016 Miscellaneous Plan of the City of South San Francisco, p. 17, <https://www.calpers.ca.gov/docs/actuarial-reports/2016/south-san-francisco-city-miscellaneous-2016.pdf>. CalPERS, Actuarial Valuation – June 30, 2016 Safety Plan of the City of South San Francisco, p. 17, <https://www.calpers.ca.gov/page/.../actuarial.../public-agency-actuarial-valuation-reports>. 82 CalPERS, Actuarial Valuation – June 30, 2016 Miscellaneous Plan of the City of Redwood City, p. 17, <https://www.calpers.ca.gov/docs/actuarial-reports/2016/redwood-city-miscellaneous-2016.pdf>. CalPERS, Actuarial Valuation – June 30, 2016 Safety Plan of the City of Redwood City, p. 17, <https://www.calpers.ca.gov/docs/actuarial-reports/2016/redwood-city-safety-2016.pdf>. 83 CalPERS, Actuarial Valuation as of June 30, 2016 for the Miscellaneous Plans of the City of San Mateo, p. 17, <https://www.calpers.ca.gov/docs/actuarial-reports/2016/san-mateo-city-miscellaneous-2016.pdf>. CalPERS Actuarial Valuation as of June 30, 2016 for the Safety Plans of the City of San Mateo, p. 17, <https://www.calpers.ca.gov/docs/actuarial-reports/2016/san-mateo-city-safety-2016.pdf>. 84 CalPERS Actuarial Valuation as of June 30, 2016 for Miscellaneous Plans of Daly City, p. 17, <https://www.calpers.ca.gov/docs/actuarial-reports/2016/daly-city-miscellaneous-2016.pdf>. CalPERS Actuarial Valuation as of June 30, 2016 for Safety Plans of Daly City, p. 17, <https://www.calpers.ca.gov/docs/actuarial- reports/2016/daly-city-safety-2016.pdf>. 2017-2018 San Mateo County Civil Grand Jury 20 payments to CalPERS beyond the required contribution amounts. This can be done through a commitment by the Cities to make additional payments on a regular basis that is reflected in the annual budget, and/or by the Cities making additional payments as funds become available, as when there is a budget surplus or non-recurring revenue source. The process is similar to the experience of a credit card holder. If the holder only pays the minimum monthly balance, long- term interest expenses are higher than if the holder pays more than the minimum per month in order to work down the principal amount. What does the future hold? The Impact of Increasing Pension Costs on the Cities. Rising Unfunded Liabilities will generate increasing pension costs. A “Key Finding” of the League of California Cities’ January 2018 report is that “City pension costs will dramatically increase to unsustainable levels” (emphasis added).85 The League reports that the average percentage of its 426-member cities’ general fund spending on CalPERS pension plans will almost double between FY 2006-2007 and FY 2024-2025 (from 8.3 percent to 15.8 percent).86 CalPERS projects that the $3.1 billion in pension costs being paid by member cities in FY 2017- 2018 will almost double (to $5.8 billion) by FY 2024-2025.87 The Cities’ projected future pension costs, as estimated by CalPERS, are also projected to almost double during that period,88 and some experts project even larger increases.89 Table No. 6 sets out CalPERS’ projections for increasing pension costs for 15 of the Cities from FY 2017-2018 through FY 2024-2025 and shows that they will have to pay pension costs that are rising by an average of 13.3 percent per year. 85 League of California Cities, 2018 Retirement System Sustainability Study and Findings, p. 2. 86 Ibid., pp. 1 and 4. 87 Ring, Edward, Did CalPERS Use Accounting “Gimmicks …? 88 California Policy Center, CalPERS Actuarial Report Data – Cities ($=M), <https://californiapolicycenter.org/CalPERS-Actuarial-Report-Data-Cities-and-Counties/>. This source provides pension cost data for 15 of the 20 Cities in the County. Data for Atherton, Colma, Foster City, Hillsborough and Woodside is not included. The weighted average percent increase in costs for these 15 Cities from FY 2017 -18 to FY 2024-25 is 92.7 percent. 89 See, discussion following Table No. 6 about higher projections by Bartel Associates, LLC and Table Nos. 7.1, 7.2 and 7.3 (below). 2017-2018 San Mateo County Civil Grand Jury 21 Table No. 6 - Increasing Pension Costs for Cities ($000) City 2017-2018 Total Pension Costs 2024-2025 Total Projected Pension Costs Percent Increase from 2017-2018 to 2024-2025 Average Annual Total Pension Cost Increase Average Annual Percent Increase Belmont $3,518 $6,039 71.7% $360 10.2% Brisbane $1,901 $3,851 102.6% $279 14.7% Burlingame $5,735 $11,435 99.4% $814 14.2% Daly City $13,464 $28,579 112.3% $2,159 16.0% East Palo Alto $1,658 $2,873 73.3% $174 10.5% Half Moon Bay $828 $1,519 83.5% $99 11.9% Menlo Park $5,756 $11,258 95.6% $786 13.7% Millbrae $3,690 $6,828 85.0% $448 12.1% Pacifica $4,127 $8,899 115.6% $682 16.5% Redwood City $21,246 $39,955 88.1% $2,673 12.6% San Bruno $7,404 $14,695 98.5% $1,042 14.1% San Carlos $3,280 $5,407 64.8% $304 9.3% City of San Mateo $17,988 $33,178 84.4% $2,170 12.1% South San Francisco $15,043 $28,960 92.5% $1,988 13.2% Total Total Weighted Average Total Weighted Average $105,638 $203,477 92.6% $13,977 13.2% California Policy Center, CalPERS Actuarial Report Data – Cities ($=M), <http://californiapolicycenter.org/wp- content/uploads/2018/02/CalPERS-Actuarial-Report-Data-Cities-and-Counties-w-totals.xlsx>. The California Policy Center provides pension cost data for 14 of the 20 Cities. Data for Atherton, Colma, Foster City, Hillsborough, Portola Valley and Woodside was not provided. Bartel Associates, LLC90 projects even larger increases in pension costs than CalPERS. For example, as shown in Table Nos. 7.1, 7.2 and 7.3, Bartel projected in 2017 that pension costs for Redwood City, Menlo Park and Pacifica will more than double from FY 2016-2017 through FY 2024-2025 (which is substantially greater than CalPERS’ projections for those Cities shown in Table 6) and are projected to continue to increase substantially thereafter through FY 2027- 2028.91 90 The public pension actuarial consulting firm of Bartel Associates, LLC reports having served as consultants to over 400 public sector clients since 2012 including, within the San Mateo county alone, the Cities of Belmont, Burlingame, Daly City, East Palo Alto, Foster City, Menlo Park, Millbrae, Pacifica, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, and the Town of Hillsborough. See, Bartel website, <http://www.bartel- associates.com/about-us/client-list>. 91 It should be noted that the Bartel Associates, LLC projections on which Table Nos. 7.1, 7.2 and 7.3 rely were set forth in reports dated February 17, 2017, May 2, 2017 and September 18, 2017, respectively . They were based on CalPERS numbers as of June 30, 2015. Last summer, CalPERS issued updated its numbers as of June 30, 2016 and it is expected to issued June 30, 2017 numbers again this summer. Were the Bartel projections to be re -run based on the most recent CalPERS data, they would be somewhat different from those reflected in Table Nos. 71., 7.2 and 7.3. Source: Grand Jury interviews. 2017-2018 San Mateo County Civil Grand Jury 22 Table No. 7.1 - Redwood City’s projected increases in pension contribution costs from FY 2016-2017 to FY 2024-2025 and FY 2027-202892 ($000) Miscellaneous Plans Safety Plans Pension Costs as a Percent of Payroll (Projected) Annual Pension Costs (Projected) Increase in Annual Pension Costs since FY 2016- 2017 % Increase in Annual Pension Costs since FY 2016- 2017 Pension Costs as a Percent of Payroll (Projected) Annual Pension Costs (Projected) Increase in Annual Pension Costs since FY 2016- 2017 % Increase in Annual Pension Costs since FY 2016- 2017 FY 2027- 2028 37.3% $16,764 $8,691 107.7% 67.2% $24,771 $13,246 114.9% FY 2024- 2025 42.7% $17,530 $9,457 117.1% 65.6% $22,148 $10,623 92.2% FY 2016- 2017 26.3% $8,073 42.9% $11,525 Table No. 7.2 – Menlo Park’s projected increases in pension contribution costs from FY 2016-2017 to FY 2024-2025 and FY 2027-202893 ($000) (Before94 taking into account any employee cost sharing.) Miscellaneous Plans Safety Plans Pension Costs as a Percent of Payroll (Projected) Annual Pension Costs (Projected) Increase in Annual Pension Costs since FY 2016- 2017 % Increase in Annual Pension Costs since FY 2016- 2017 Pension Costs as a Percent of Payroll (Projected) Annual Pension Costs (Projected) Increase in Annual Pension Costs since FY 2016- 2017 % Increase in Annual Pension Costs since FY 2016-2017 FY 2027-2028 33.9% $7,190 $4,140 135.7% 60.5% $5,389 $3,285 156.1% FY 2024-2025 34.5% $6,695 $3,645 119.5% 58.4% $4,756 $2,652 126.0% FY 2016-2017 21.2% $3,050 32.3% $2,104 92 Data in Table No. 7.1 is derived from Lin, Bianca and Yang Kevin, Redwood City Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, February 13, 2017, slides 17, 18, 29 and 30. 93 Data in Table No. 7.2 is derived from Lin, Bianca and Yam, Wai Man, City of Menlo Park Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, May 2, 2017, slides 23, 24, 39 and 40, https://www.menlopark.org/DocumentCenter/View/14392. 94 Menlo Park’s projected Miscellaneous Plan annual pension costs in Table No. 7.2 would be approximately 15 percent lower than shown if employee cost sharing were taken into account and its Safety Plan pension costs would be 5 - 9 percent lower. Lin, Bianca and Yam, Wai Man, City of Menlo Park Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, May 2, 2017, slides 25, 28, 40 and 41. 2017-2018 San Mateo County Civil Grand Jury 23 Table No. 7.3 – City of Pacifica’s projected increases in pension contribution costs from FY 2016-2017 to FY 2024-2025 and FY 2027-202895 ($000) (Before96 taking into account any employee cost sharing.) Miscellaneous Plans Safety Plans Pension Costs as a Percent of Payroll (Projected) Annual Pension Costs (Projected) Increase in Annual Pension Costs since FY 2016- 2017 % Increase in Annual Pension Costs since FY 2016- 2017 Pension Costs as a Percent of Payroll (Projected) Annual Pension Costs (Projected) Increase in Annual Pension Costs since FY 2016- 2017 % Increase in Annual Pension Costs since FY 2016- 2017 FY 2027-2028 36.3% $4,435 $2,992 207.3% 71.8% $6,186 $3,910 171.8% FY 2024-2025 34.4% $3,846 $2,403 166.5% 69.0% $5,428 $3,152 138.5% FY 2016-2017 16.7% $1,443 34.6% $2,276 Pension Information Provided by the Cities Could be Substantially Improved. Clear information about the Cities’ current and projected pension costs, as well as their plans for meeting these rising expenses in the future, is not readily found in the Cities’ CAFRs, nor (with a few notable exceptions97,98,99) in their most recent budgets published in the finance section of 95 Data in Table No. 7.3 is derived from Lin, Bianca and Childs, Matthew, City of Pacifica Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, September 18, 2017, slides 8, 9, 18 and 19, http://www.cityofpacifica.org/civicax/filebank/blobdload.aspx?BlobID=13378. 96 Pacifica’s projected Miscellaneous Plan annual pension costs in Table No. 7.3 would be approximately 15, 7.3 and 7 percent lower in FY 2016-17, FY 2024-25 and FY 2027-28 respectively than shown if employee cost sharing were taken into account and its Safety Plan pension costs would be approximately 11, 5.6 and 5.4 percent lower in FY 2016-17, FY 2024-25 and FY 2027-28 respectively. Lin, Bianca and Childs, Matthew, City of Pacifica Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, September 18, 2017, slides 11, 12, 20, 21, 29, 30. 97 Redwood City’s FY 2017-18 Adopted Budget provides projections of projected future pension costs through FY 2030-31, together with a description of steps the city is taking to begin addressing these costs. City of Redwood City, Report - FY 2017-18 Mid-Year Budget Study Session. See also, City of Redwood City, Fiscal Year 2018-2019 Recommended Budget, pp. 13 and 14, <http://www.redwoodcity.org/home/showdocument?id=15124 >. 98 The City of San Mateo’s FY 2017-18 Adopted Budget includes a table showing how the City’s pension costs will increase from FY 2017-18 through FY 2027-28. City of San Mateo, Adopted 2017-18 Budget, p. 11, <https://www.cityofsanmateo.org/DocumentCenter/View/60043/Adopted -2017-18-Budget>. The City’s proposed 2018-20 Business Plan also includes annual pension cost projections through FY 2028 -29. City of San Mateo, Proposed 2018-20 Business Plan, pp. 9, 11, and 65, <https://www.cityofsanmateo.org/DocumentCenter/View/64801/Proposed-FY-2018-20-Business-Plan>. 99 Menlo Park’s FY 2017-18 budget shows total pension costs for each of the next 10 years. City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, p. 48. 2017-2018 San Mateo County Civil Grand Jury 24 their websites.100,101,102,103 Appendix B’s guide to locating pension information in CAFRs shows that a certain level of specialized knowledge and concerted effort is required to extract information about pension costs from CAFRs. While the Cities’ published budgets often refer to growing budgetary challenges faced by pension costs, the information provided about costs, especially projected future costs and descriptions of how the Cities are planning to meet them, is generally not set out in a systematic way. The information falls far short of what it should be given the importance and growing urgency of the subject matter. What can the Cities do About Their Rising Pension Costs? Develop a Financial Plan. As with any challenge, the first step is to acknowledge the problem. In the case of pensions, this requires an analysis of future obligations, under various scenarios, over at least a 10-year time horizon. The second step is for each City to develop a long-term financial plan over at least a 10- year time period to address rising costs. Such a plan should include: Specific objectives, such as identifying a target Funded Percentage, eliminating the Unfunded Liabilities over “n” years and maintaining the City’s share of Normal Costs at “n” percentage of payroll Policies to achieve these objectives, such as making supplemental contributions to CalPERS, making annual contributions to a reserve or IRS Section 115 trust (described below) for the purpose of meeting unanticipated future pension costs, keeping salary increases below the actuarially assumed increase rate, or negotiating cost-sharing 100 The City of Burlingame provides information about its plans for addressing rising pension costs in Staff Reports and proposed budgets. See for example, Augustine, Carol, Staff Report to Burlingame City Council, July 3, 2017, <http://burlingameca.legistar.com/gateway.aspx?M=F&ID=145f1c47-afe4-48e6-8c90-7af86841c428.docx>; Augustine, Carol, Staff Report to Burlingame City Council, March 14, 2018, pp. 11 , 12, 27, 28 and 48, <http://burlingameca.legistar.com/gateway.aspx?M=F&ID=8bf430f2-6a90-46f4-a5e8-bc50ad710524.docx>; Augustine, Carol, Staff Report to Burlingame City Council, May 9, 2018, <http://burlingameca.legistar.com/gateway.aspx?M=F&ID=68ce413d -4c73-4e2b-abf2-d2e04b1dde86.docx>. 101 The Town of Hillsborough’s FY 2018-19 Proposed Budget notes that annual pension costs are projected to double over the next ten years (from $2.4 to $5.7 million. The Town also provides a 10-year forecast of expenditures that incorporates data regarding projected pension costs, but the actual pension costs themselves are not broken out. Town of Hillsborough, FY 20187-19 Proposed Budget, pp. 27 and 96, <https://www.hillsborough.net/ArchiveCenter/ViewFile/Item/212>. 102 Foster City’s preliminary budget for FY 2018-19 states that, between FY 2017-18 and FY 2022-23, the City’s Miscellaneous Plan contribution rate will rise from 27.9 to 40.8 percent and its Safety Plan contribution rate will rise from 45.2 to 70.4 percent. City of Foster City, Preliminary Budget Fiscal Year 2018-2019, p. 10, <https://www.fostercity.org/sites/default/files/fileattachments/financial_services/page/3521/fy_2018 - 2019_preliminary_budget_published.pdf>. The proposed budget does not include more specific information about dollar amounts represented by these percentages. 103 The City of Belmont’s 2018 Budget includes a chart showing increasing pension contribution rates over the next 4 years. City of Belmont, FY 2018 Budget, p. 18, https://www.belmont.gov/home/showdocument?id=15433>. 2017-2018 San Mateo County Civil Grand Jury 25 agreements with employees that cap the Cities’ share of Normal Costs (which are described below in “Specific Measures for the Cities to Consider”) Specific measures to implement the policies A process to monitor progress in implementing the measures and in achieving the objectives Consideration of alternative policies and measures, or a “Plan B,” that may be used in the event that CalPERS’s Return on Investment assumptions are not met in future years. Finally, tough decisions need public support. This cannot be achieved without the public being informed about the issue at every step. The Cities’ plans should include a public awareness component. The Cities’ CAFRs and budget documents published by the Cities in the finance section of their websites that were reviewed by the Grand Jury show that none of them has adopted a long-term financial plan with all of the components described above.104,105,106,107 Specific Measures for the Cities to Consider. There are a number of measures that can be taken to meet objectives that might be included in the Cities’ long-term financial plans. Some of these are summarized below. Most have been employed by one or more Cities, although not necessarily in a systematic way. Not every City will be in a financial position to take aggressive action now, but there are options, including the following nine: 104 The City of San Mateo states that it has a plan for eliminating its Unfunded Pension Liabilities; it intends to achieve this by 2050. City of San Mateo, Adopted 2017-18 Budget, p. 20. 105 The City of Foster City plans to “[i]dentify and implement pension sustainability strategies to reduce the City Unfunded Accrued Liability and improve the City funded status with CalPERS” in FY 2018 -19. City of Foster City, Preliminary Budget Fiscal Year 2018-2019, p. 188. 106 It should be noted, however that the City of Redwood City does have a five -year plan that provides for supplemental payments to CalPERS (beyond required contributions) of $0.5 million per year; it has funded a Section 115 pension trust (described below) with an initial $10.5 million and plans to make additional contributions to the trust of $1.1 million per year over the next five years, and employee cost sharing. Redwood City also adopted a lower tier, less expensive, pension plan even before the passage of PEPRA. See, “Specific Measures for the Cities to Consider” below for references to Redwood City’s actions. 107 In 2014 San Carlos published annual pension cost projections through FY 2035 -36. City of San Carlos, Long- Term Financial Plan, November 5, 2014, pp. 21 and 22, <http://www.cityofsancarlos.org/Home/ShowDocument?id=700>. The City also published a graph showing pension costs through FY 2047-48. City of San Carlos, City Council Staff Report, Item 7.b of March 12, 2018 Agenda Packet, p. 117, <http://sancarlosca.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=2699&Inline=True >. 2017-2018 San Mateo County Civil Grand Jury 26 (1) Make Supplemental Contributions to CalPERS. By making supplemental contributions to CalPERS beyond the required payments, the Cities can reduce the amounts on which they are paying interest. The Cities generally cannot earn returns on their reserves equal to the interest rates CalPERS will be charging,108 so using reserves to make supplemental contributions can result in substantial net savings over the long-term. Although not a subject of this report,109 actions taken by the County to reduce its pension costs are instructive. In FY 2011-2012 and FY 2012-2013, the County paid “supplemental contributions” to SamCERA (the plan administrator for the County’s pension plans) to reduce its Unfunded Liability. These were in addition to its Annual Required Contribution (ARC)110 payments.111 However, these supplemental contributions were applied to the entire SamCERA system, not the County alone.112 Then, in November 2013, SamCERA and the County signed a Memorandum of Understanding (MOU) to formalize a plan to pay supplemental contributions.113 Under the MOU, the County made two commitments. First, it agreed to pay supplemental contributions in a lump sum of $50 million in the initial fiscal year (FY 2013-2014) and then to pay an additional $10 million in each of the following nine years. Second, the County stated that it intended to maintain a minimum average employer contribution rate of 38 percent of payroll during the 10-year period. Since the ARC would otherwise decrease each year, as the Unfunded Liability is reduced, maintaining a contribution rate higher than the ARC would provide a second source of supplemental payments. For its part, SamCERA committed to establish a Supplemental Contribution Account to receive the supplemental contributions, which would be credited just to the County, rather than all three SamCERA employers. If SamCERA’s actuarial assumptions are met, the County’s supplemental contributions are expected to eliminate the Unfunded Liability within 10 years (FY 2022-2023).114 The MOU includes language stating that the County’s supplemental contributions are not legally binding. However, as of June 30, 2017, the MOU had been implemented on schedule. The 108 City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, p. 48, <https://www.menlopark.org/ArchiveCenter/ViewFile/Item/6273 >. 109 Progress made by the County of San Mateo in planning for and reducing its pension costs is the subject of the Grand Jury’s report for 2017-2018, entitled “County Pension Costs – Hard Choices Paying Off.” San Mateo County Civil Grand Jury 2017-2018 report, “County Pension Costs – Hard Choices Paying Off.” 110 Annual Required Contribution (ARC) is the sum of an Agencies’ share of Normal Cost and, if any, the Amortization Cost. ARC is the amount an Agency is legally required to pay to the plan administrator in order to fund a pension plan. See, Brainard, Keith and Brown, Alex, The Annual Required Contribution Experience of State Retirement Plans, FY01 to FY13, National Association of State Retirement Administrators, March 2015, p. 2, <https://www.nasra.org/files/JointPublications/NASRA_ARC_Spotlight.pdf>. 111 Referred to by SamCERA as the annual “statutory contribution rate.” SamCERA, 2017 Comprehensive Annual Financial Report for the Fiscal Year Ended on June 30, 2017 , p. 49, <https://www.samcera.org/sites/main/files/file- attachments/2017cafr_final.pdf>. 112 County Pension Costs – Hard Choices Paying Off, p. 6. 113 Memorandum of Understanding Between the County of San Mateo and the San Mateo County Employees’ Retirement System Funding, November 19, 2013. 114 County Pension Costs – Hard Choices Paying Off., p. 7. 2017-2018 San Mateo County Civil Grand Jury 27 County’s supplemental contributions, including payments made before the MOU, as well as payments made pursuant to the MOU, total nearly $139 million, through June 30, 2017.115 In theory, without supplemental contributions, the Unfunded Liability would be paid off at the end of the 15-year Amortization Period used by SamCERA. The benefit of making supplemental contributions to pay off the Unfunded Liability early is to reduce the interest payments that are included in the Amortization Cost. This is substantial. Prior to adoption of the MOU, the County Manager estimated the cumulative savings at $304 million.116 In 2017 the County Manager reported that the County could expect annual savings approaching $90 million to $100 million in principal and interest payments, beginning in FY 2023-2024, assuming the Unfunded Liability has been paid off by that date.117 It should be noted that the County was fortunate in having a non-recurring gain of about $50 million from the 2014 sale of the County-owned Circle Star Plaza, which helped fund its capital plan.118 The County general fund benefitted from passage of Measure A in 2012, which adds a one-half cent countywide sales tax for 10 years, through April 2023, as well as Measure K (2016) which extended the sales tax through 2043.119 Among the Cities, Redwood City’s Preliminary Five-Year Forecast calls for additional payments to CalPERS of $500,000 per year beyond the required contribution amounts.120 As discussed below in “Establish IRS Section 115 non-revocable trusts,” at p. 29, Redwood City’s Preliminary Five-Year Forecast also calls for the city to annually contribute additional amounts to an irrevocable fund for the purposes of paying pension costs. In April 2018, the City of San Carlos approved making an additional payment to CalPERS of $5 million, beyond the required contribution, to pay down a portion of the City’s Unfunded Liability.121 The City estimates that this payment will result in $4.3 million of net savings over the long-term.122 The City of San Mateo made additional payments to CalPERS of $1.375 million in FY 2016-17 and $1.4 million in FY 2017-18. The City’s proposed 2018-20 budget recommends continued additional payments to CalPERS out of the general fund in the amounts of $1.625 million in FY 2018-19 and an additional $14 million thereafter over the course of approximately the next 10 115 Ibid. 116 Ibid., pp. 7-8. 117 Ibid., p. 8. 118 Torres, Blanca, San Mateo County cashes in with sale of Circle Star Plaza for $90.1 million, The San Francisco Business Times, May 20, 2014, <https://www.bizjournals.com/sanfrancisco/blog/real-estate/2014/05/circle-star- plaza-griffin-capital-san-mateo-county.html>. 119 Ballotpedia, San Mateo County Sales Tax Increase, Measure A (November 2012), <http://ballotpedia/San_Mateo_County_Sales_Tax_Increase,_Measure_A_(November 2012)>. Ballotpedia, San Mateo County Sales Tax Increase, Measure K (November 2016), <https://ballotpedia.org/San_Mateo_County,_California,_Sales_Tax,_Measure_K_(November_2016)>. 120 Redwood City Report - FY 2017-18 Mid-Year Budget Study Session, pp. 20 and 21. Grand Jury Interviews. 121 Interviews by Grand Jury. San Carlos, City Council Staff Report, Item 9.a of April 9, 2018 Agenda Packet, <http://sancarlosca.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=2707&Inline=True >. 122 Ibid. 2017-2018 San Mateo County Civil Grand Jury 28 years.123 The City does not indicate how much savings is expected to result from these additional payments. The City of Foster City’s preliminary budget for FY 2018-19 calls for an additional payment to CalPERS of $2.1 million, representing 4.3% of its projected general fund operating expenditures budget that year.124 (2) Make Contributions to a Reserve. In the current good financial times, most of the Cities have experienced rising revenues and should be able to set their general fund budgets to yield a surplus of revenues over expenses and put the difference into a general fund reserve to be applied in their discretion against future unanticipated, special, or one-time expenses.125 A portion of such reserves could be used to manage or smooth payments to CalPERS, consistent with budgetary needs. However, since the Cities retain the right to use these reserves as they deem appropriate, there is no guarantee that these reserves will be applied to pension costs.126 Payments into a reserve do not reduce the Amortization Costs charged by CalPERS. Several of the Cities have established reserves out of their general fund budgets that are earmarked for future increased pension contributions. Menlo Park. The City has established a “Strategic Pension Funding reserve” which, as of June 30, 2017, held assets of $3.2 million. That represents approximately 7 months of its annual pension contribution costs of $5.56 million.127 Menlo Park’s policy is to assign 25 percent of any general fund operating budget surpluses to this pension reserve.128 Based on its expected general fund operating budget surplus of approximately $2.5 to $3.5 million in FY 2017-2018, this policy will add another $625,000 to $875,000 to the reserve.129 However, the Strategic Pension Funding reserve currently represents only approximately 10 percent of the City’s total general fund reserves130 and, even assuming continued growth in the Strategic Pension Funding reserve similar to FY 2017-2018, would only modestly help pay for increases in the City’s expected pension costs over the next 10 years.131 123 City of San Mateo, Proposed 2018-20 Business Plan, pp. 58 and 67. 124 City of Foster City, Preliminary Budget Fiscal Year 2018-2019, p. 50. 125 See, for example, City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, pp. 8, 33 – 38; City of San Mateo, Adopted 2017-18 Budget, pp. 6, 32, 36; City of Foster City, Preliminary Budget Fiscal Year 2018-2019, pp. 47 – 48; City of Belmont, FY 2018 Budget, , p. 16, 22; City of Brisbane, Fiscal Years 2016-2017 & 2017-2018, Adopted Two Year Operating Budget, p. 11, <http://www.brisbaneca.org/sites/default/files/City%20of%20Brisbane_1.pdf>; Town of Portola Valley, Adopted Budget, Fiscal Year 2017-2018, p. 4, <http://www.portolavalley.net/home/showdocument?id=10921 >; Town of Hillsborough, FY 2017-18 Adopted Budget, p. 26; Town of Hillsborough, FY 20187-19 Proposed Budget, p. 95. 126 Interviews by Grand Jury. 127 Appendix A. 128 City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, p. 48. 129 Interviews by Grand Jury. 130 City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, p. 49. 131 Menlo Park expects its pension costs to almost double to $10.14 million per year by FY 2027-28. City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, p. 48. 2017-2018 San Mateo County Civil Grand Jury 29 Half Moon Bay. The City has established a pension stabilization fund.132 As of June 30, 2017, the City reported having approximately $1 million in the fund133 and its FY 2017-2018 budget provides for the transfer of another $0.51 million into the fund.134 This would bring the fund total to slightly more than $1.5 million by the end of FY 2017-2018. When compared to Half Moon Bay’s pension costs of $0.59 million in FY 2016-2017,135 a $1.5 million pension stabilization fund represents a reasonable start to the city’s preparations for rising pension costs. It compares favorably to Menlo Park’s pension reserve, which holds only approximately 7 months’ worth of pension costs.136 In contrast, Half Moon Bay’s fund holds the equivalent of well over 2 years of pension costs. The City of San Mateo. The city’s long-term budget calls for funding an $8.95 million pension cost reserve, with $1.4 million to be contributed in FY 2017-2018 and additional annual amounts thereafter equal to 50 percent of certain budget surpluses.137 The City of San Mateo’s annual pension costs were over $17.5 million in FY 2016-2017,138 so this reserve amount for pension costs is modest. South San Francisco. The city reports that it established a “CalPERS Stabilization Reserve” with an initial amount of $3.99 million in FY 2015-2016. It funded this reserve with another $509,104 in FY 2016-2017 and projects funding it with an additional $586,968 in FY 2018-2019, for a combined total of approximately $5.1 million. 139 This $5.1 million total would represent 27.3 percent of the City’s $18.7 million in unassigned reserves as of June 30, 2017140 and roughly 5 months’ worth of its FY 2016-2017 pension costs of $13.3 million.141 Brisbane. The City of Brisbane reports having adopted a policy of allocating 40 percent of unanticipated ending fund balance to be used to be set aside to pay for unfunded pension and OPEB obligations.142 132 City of Half Moon Bay, FY 2017-18 Adopted Operating Budget, pp. 68, 71 and 224, <https://www.half-moon- bay.ca.us/DocumentCenter/View/940>. 133 City of Half Moon Bay, California, Comprehensive Annual Financial Report, Fiscal Year Ended June 30, 2017 , p. 102, <https://www.half-moon-bay.ca.us/DocumentCenter/View/1341>. 134 City of Half Moon Bay, FY 2017-18 Adopted Operating Budget, pp. 69 and 71. 135 Appendix A. 136 Menlo Park’s pension costs in FY 2016-17 were approximately $5.6 million. Appendix A. 137 City of San Mateo, Adopted 2017-18 Budget, pp. 54 and 117, <https://www.cityofsanmateo.org/DocumentCenter/View/60043 >. 138 Appendix A. 139 South San Francisco, Letter from City of South San Francisco to Gra nd Jury, dated June 11, 2018. City of South San Francisco, FY 2018-19 Addendum to Adopted FY 20187-19 Biennial Operating Budget, p. B-5. City of South San Francisco, FY 2018-19 Operating Budget Study Session, May 23, 2018, p. 28. City of South San Francisco, Adopted Biennial Operating Budget and Capital Improvement Program Fiscal Years 2017 -19, p. D-5, <http://www.ssf.net/home/showdocument?id=2027>. 140 City of South San Francisco, Letter from South San Francisco to Grand Jury, dated June 7, 2018. 141 Appendix A. 142 Brisbane, Letter from City of Brisbane to Grand Jury, dated June 11, 2018. The City’s letter does not disclose the estimated amounts that might be set aside as a result of this policy. 2017-2018 San Mateo County Civil Grand Jury 30 (3) Establish IRS Section 115 non-revocable trusts. The Cities can also put reserves that are set aside for pension costs into non-revocable trusts under Section 115 of the Internal Revenue Code. Contributions to Section 115 trusts are voluntary and can be made as city budgets allow. Funds in such trusts can only be used to pay pension costs.143 As with ordinary reserves, the Cities can use funds in Section 115 trusts to manage or smooth payments to CalPERS, consistent with their budgetary needs.144 The non- revocable feature assures employees, retirees and taxpayers that the funds will be used for pension costs. Another advantage of Section 115 trusts is that they offer different investment choices and risk profiles145 which can yield higher rates of Return on Investments than the rates available to the Cities for their general fund reserves.146 Payments into a reserve do not reduce the Amortization Costs charged by CalPERS. In January 2018 Redwood City deposited $10.5 million into a Section 115 trust,147 representing approximately 7 months of its annual pension costs of $17.7 million in FY 2016-2017.148 Redwood City’s finance group has recommended that the City deposit $1.1 million per year from general fund reserves into the Section 115 trust over the 5-year period from and including FY 2018-2019 through FY 2022-2023.149 This $1.1 million per year would represent slightly less than 50 percent of the estimated $2.5 million per year increase in pension costs that Redwood City is likely to experience.150 In FY 2016-2017, the Redwood City Council adopted a general fund reserve policy, where the unreserved portion of the general fund’s balance would be 15 percent of anticipated general fund revenues. Any excess balance above a 15 percent reserve threshold would be utilized to fund a Section 115 Trust Account to help pay pension expenses.151 In October 2017 Burlingame contributed $3.7 million into a Section 115 trust for the purpose of paying pension obligations and, approximately six months later, an additional $1 million.152 The 143 CalPERS, Finance and Administration Committee, Proposed California Employers’ Pension Prefunding Trust (CEPPT) Legislation, February 17, 2016, pp. 1-2, 4, <https://www.calpers.ca.gov/docs/board- agendas/201602/financeadmin/item-6a-00.pdf>. 144 Ibid. 145 Ibid. 146 The City of Menlo Park notes that, if it moves funds in its Strategic Pension Funding reserve into a Section 115 trust, it would expect to earn returns on those assets of approximately 4 percent per year, as compared to the approximately 1 percent per year it earns on general fund reserves to due restrictions imposed on available investments for general fund reserves. City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, p. 48. 147 Redwood City Report – FY 2017-18 Mid-Year Budget Study Session, p. 10. City of Redwood City, Fiscal Year 2017-2018Adopted Budget, Budget Message, pp. 13 and 28, <http://webapps.redwoodcity.org/files/finance/main/1.- Redwood-City-CA-Adopted-FY-17-18-Budget-.pdf>. 148 Appendix A. 149 City of Redwood City, Fiscal Year 2018-2019 Recommended Budget, p. 174, <http://www.redwoodcity.org/home/showdocument?id=15124 >. 150 Table No. 7.1, above shows that Redwood City’s pension costs (Miscellaneous and Safety plans) are projected to increase by $20.1 million between FY 2016-17 and FY 2024-25. $20.1 million / 8 years = $2.5 million in increases per year. 151 City of Redwood City, 2017 CAFR, p. v of Letter of Transmittal. 152 Letter from City of Burlingame to Grand Jury, dated June 7, 2018. Augustine, Carol, Staff Report to Burlingame City Council, March 14, 2018, pp. 11 and 12. 2017-2018 San Mateo County Civil Grand Jury 31 City’s proposed FY 2018-19 budget recommends contributing another $3.4 million to the Section 115 trust,153 which would bring total funds in the trust to $8.1 million. The City’s five- year forecast projects ongoing annual contributions to the Section 115 trust in the amounts of $2.7 million in FY 2019-20, $2.1 million in FY 2020-21, $1.5 million in FY 2021-22 and $1.21 million in FY 202-23.154 If the additional FY 2018-19 contribution of $3.4 million is made, the $8.1 million total Section 115 trust amount would represent 29 percent of Burlingame’s projected total general fund reserves of $28.19 million at the end of FY 2017-2018, of which $9.15 million will be unassigned155 and approximately 19 months’ worth of its $5.3 million in pension costs in FY 2016-2017. The City of Brisbane also reports having recently established a Section 115 trust to help pay any unexpected increases in pension payment obligations. The City’s financial plan calls for it to put aside funding for additional payments into the 115 trust.156 (4) Negotiate Cost-Sharing Arrangements with Employees. The Cities can reduce their pension costs through cost-sharing agreements with employees under which employees agree to pay a portion of the Cities’ Normal Costs. For example, the City of Menlo Park has negotiated cost-sharing agreements with non-sworn employees under which those employees will pay an additional amount equal to 50 percent of the City’s future pension cost increases and agreements with sworn employees under which they will pay a portion of the City’s pension costs equal to 3 percent of total payroll.157 Redwood City has also negotiated cost- sharing agreements with employees under which those employees pay a portion of the City’s Normal Costs,158 as have Atherton,159 Burlingame,160 Hillsborough,161 and Millbrae.162 (5) Pension Obligation Bonds (POBs). Another option is to accelerate repayment of Unfunded Liabilities with the proceeds of pension obligation bonds issued by the City. Where the interest rate being charged by CalPERS on Unfunded Liabilities is higher than the interest rate on the bonds, this can result in savings for a City. For example, in FY 2003-2004, Daly City issued $36.2 million in pension obligation bonds and applied the proceeds to reduce its Unfunded Liabilities. At the time, CalPERS was charging annual interest of 8.25 percent on Unfunded Liabilities and the interest on the bonds was only 5.973 percent. According to Daly City, the difference between the interest rate charged by 153 Burlingame, Letter from City of Burlingame to Grand Jury, dated June 7, 2018. 154 Burlingame, Email from City of Burlingame to Grand Jury, dated June 9, 2018. See also, Augustine, Staff Report March 14, 2018, p. 48 for information on the portion of these payments that will be made out of the general fund . 155 City of Burlingame, Fiscal Year 2017-18 Adopted Budget, p. xiii. 156 Brisbane, Letter from City of Brisbane to Grand Jury, dated June 11, 2018. The City’s letter does not disclose the amount(s) contributed into its Section 115 Trust. 157 City of Menlo Park, Adopted Budget, Fiscal Year 2017-18, p. 48. 158 Redwood City Report - FY 2017-18 Mid-Year Budget Study Session, p. 10. 159Town of Atherton, Fiscal Year 2017/18 Operating & Capital Improvement Budget, p. 4, <http://www.ci.atherton.ca.us/ArchiveCenter/ViewFile/Item/2535>. 160 City of Burlingame, Fiscal Year 2017-18 Adopted Budget, p. xviii. 161 Interviews by Grand Jury. 162 City of Millbrae, Letter from City of Millbrae to Grand Jury, dated June 11, 2018. 2017-2018 San Mateo County Civil Grand Jury 32 CalPERS, and the lower rate paid to bondholders, resulted in $7 million in net present value savings.163 However, these bonds did not solve Daly City’s pension problems. As of June 30, 2017, Daly City had a remaining unpaid balance of $22.8 million on these bonds, which mature on August 1, 2022.164 In evaluating Daly City’s total Unfunded Liabilities and pension costs in Appendix A, the reader should take into account that Appendix A does not reflect Daly City’s outstanding balance on the bonds, nor the annual costs of repayments of principal and interest on the bonds (which totaled approximately $3.54 million in FY 2016-2017).165 If these amounts were included, then Daly City’s FY 2016-2017 Unfunded Liabilities in Appendix A would rise from $139.86 million to $162.66 million and its annual pension costs would rise from $11.63 million to $15.17 million. Daly City’s interest payments on the bonds, however, do remain lower than the interest it would otherwise have had to pay on Unfunded Liabilities. In 2013, the City of San Bruno issued $13.2 million in pension obligation bonds.166 The City of Brisbane issued $4.7 million in pension obligation bonds in 2006 and took out a $1.6 million loan in 2013 to pay off certain pension obligations,167 and the City of Burlingame issued $33 million in pension obligation bonds in 2007.168 An analysis of the risks and benefits of pension obligation bonds is beyond the scope of this report. See the Government Finance Officers Association’s analysis of pension obligation bonds for an analysis of the reasons not to issue such bonds.169 (6) Shorten Amortization Periods. The Cities may instruct CalPERS to shorten the Amortization Period of their Unfunded Liabilities. That would increase their contribution costs in the short-term but decrease aggregate interest costs over the long-term.170 Such a decision, however, is irrevocable. Once it has shortened an Amortization Period at the request of an Agency, CalPERS will not subsequently increase it at the request of the Agency.171 The City of Palo Alto, although outside the borders of the county, has stated that it is looking at this option.172 In essence, asking CalPERS to shorten 163 City of Daly City, Comprehensive Biennial Operating and Capital Budget, Fiscal Years 2017 and 2018 , p. 25, <http://www.dalycity.org/Assets/Departments/Finance+and+Administration/Operating+Budget+2017 -2018.pdf>. 164 City of Daly City, 2017 CAFR, p. 15. 165 City of Daly City, 2017 CAFR, p. 53. 166 City of San Bruno, Fiscal Year 2013-14 City Council Adopted General Fund, Enterprise Funds, Internal Service Funds and Special Revenue Funds Operating Budget , p. K-4, https://www.sanbruno.ca.gov/civicax/filebank/blobdload.aspx?BlobID=23046 167 City of Brisbane, 2014 CAFR, pp. 54, 55 and 59, <http://brisbaneca.org/sites/default/files/brisbane%20cafr%20ocr.pdf>. 168 City of Burlingame, 2010 CAFR, p. 60, <https://www.burlingame.org/document_center/Finance/Comprehensive%20Annual%20Financial%20Reports/CAF R%2009-10.pdf>. City of Burlingame, Fiscal Year 2017-18 Adopted Budget, p. x. 169 League of California Cities, 2018 Retirement System Sustainability Study, pp. 6 and 33. 170 Lin, Bianca and Yam, Wai Man, City of Menlo Park Miscellaneous and Safety Plans, CalPERS Actuarial Issues – 6/30/15 Valuation Preliminary Results, Bartel Associates LLC, May 2, 2017, p. 48. 171 Interviews by Grand Jury. 172 Keene, James, Palo Alto City Manager, Letter to Tamara L. Davis, Deputy Manager, Jury Services, Santa Clara County Civil Grand Jury, January 30, 2017, p. 1, (Updated response to 2011-12 Santa Clara County Civil Grand 2017-2018 San Mateo County Civil Grand Jury 33 the Amortization Period is a more structured way to achieve the same goal as making supplemental contributions to CalPERS beyond the required contribution. CalPERS has announced that it will be phasing in a 20-year amortization schedule for all member Agencies.173 However, Agencies remain free to elect more aggressive reductions in their Amortization Periods. (7) Keep Salary Increases Within the Rate Assumed by CalPERS. Calculations of future Benefit obligations are based, in part, on assumptions CalPERS makes about future salary increases by the Cities. Cities can impact the size of their contribution payments over time by ensuring that future employee salary increases do not exceed CalPERS’s assumed amounts. (8) Reduce Operating Costs. Painful though it may be, the Cities can reduce operating costs to create additional reserves, which they could then apply to pension costs. Redwood City’s finance group has warned of “future recessionary impacts that loom in the future” 174 and notes that, to meet these challenges, it recommends reducing operating costs by $3.7 million in the FY 2018-2019 budget (primarily through reductions in budgeted headcount, including police and firefighters) and another $2.3 million in FY 2019-2020.175 Indeed, Redwood City’s finance group stated that rising pension costs are the biggest factor driving the city’s efforts to reduce operating costs.176 Daly City describes its increasing pension costs as a “major challenge for the City’s budget in coming years.”177 It is in the process of cutting operating costs through, among other things, a freeze on filling six vacant police officer positions and eliminating nine firefighter positions through attrition. Daly City notes that its general fund has a structural budget deficit of approximately $6 million in the biennial budget for FY 2016-2017 and 2017-2018 and that it is drawing down existing general fund reserves to close this budget gap.178 The Town of Colma notes that “Rising costs of health care and pension rates are placing extraordinary pressure on the fiscal health of most California municipalities, including the Town of Colma” and, among other responses to this pressure, has elected to terminate its retiree health premium payments programs for all employees hired after January 1, 2017.179 Jury report, An Analysis of Pension and Other Post-Employment Benefits), <http://www.scscourt.org/court_divisions/civil/cgj/2012/responses/pension/02.03.17%20Response%20 - %20Palo%20Alto.PDF>. 173 League of California Cities, CalPERS Board Reduces Amortization Policy. Lowe and Rogers, CalPERS Reduces Amortization Period with Impacts to Employer Contribution Rates . CalPERS Actuarial Office, Finance and Administration Committee, Agenda Item 7a. Jacobius, Arleen, CalPERS shortens amortization period to 20 years. 174 Redwood City, Report - FY 2017-18 Mid-Year Budget Study Session, pp. 7 and 11. 175 City of Redwood City, Fiscal Year 2018-2019 Recommended Budget, pp. 9, 18 and 19. 176 Interviews by Grand Jury. 177 City of Daly City, Adopted Comprehensive Biennial Operating and Capital Budget, Fiscal Years 2017 and 2018, p. 26. 178 Ibid., at p. 7. 179 Town of Colma, FY 2017-18 Adopted Budget, p. 8. 2017-2018 San Mateo County Civil Grand Jury 34 (9) Seek New Revenue. Although raising additional revenues for the purpose of paying down pension obligations may be difficult, it may still be possible for the Cities to supplement their funding of services through new revenue sources to protect them from cuts that might otherwise have to be made to pay rising pension costs. Redwood City’s finance group notes that the City has increased revenues by approximately $2 million per year through higher development fees and that it is in the process of developing a phased approach to cannabis regulation as a result of which it expects to generate at least $0.3 million a year in additional taxes.180 Redwood City is also exploring the possibility of implementing new solid waste fees to support street sweeping and parking enforcement services. The city’s finance group concludes that: “Without new revenues, staff projects deficits beginning in FY 2019-20.”181 These deficits are projected to reach $6.6 million per year in the general fund budget by FY 2022-2023.182 In November 2016, Daly City residents voted on Measure V, a five-year supplemental parcel tax of $162 per parcel for the purpose of restoring police and fire personnel and related operational costs. Measure V was defeated by a vote of 53 to 47 percent.183 Measures That Appear Unavailable at this Time. Several more obvious strategies appear to be off the table at this time: (a) Renegotiating employee pension formulas. As described in BACKGROUND (pages 12-13), the California Rule, a California Supreme Court interpretation of the state constitution, appears to prohibit even prospective reductions in pension Benefits for existing employees. As noted, cases challenging that interpretation are currently before the California Supreme Court. In the event that the Supreme Court loosens the California Rule, local jurisdictions may be able to renegotiate pension Benefits with their employees. Under PEPRA, Benefits for “New Members” hired after January 1, 2013, are much lower than for the “Classic Members” hired prior to that date. The California League of Cities “supports a change in state law or judicial precedent to allow employers to negotiate plan changes with classic CalPERS members” and suggests “converting all currently deemed “Classic” employees to the same provisions (Benefits and employee contributions) currently in place for “PEPRA” employees for all future years of service.” 180 Redwood City, Report - FY 2017-18 Mid-Year Budget Study Session, p. 12. 181 Ibid. 182 City of Redwood City, Fiscal Year 2018-2019 Recommended Budget, p. 174. 183Ballotpedia, Daly City, California, Parcel Tax for Police and Fire Departments, Measure V (November 2016), <https://ballotpedia.org/Daly_City,_California,_Parcel_Tax_for_Police_and_Fire_Departments,_Measure_V_(Nove mber_2016>. 2017-2018 San Mateo County Civil Grand Jury 35 (b) Adopting a defined contribution pension plan for new employees. As noted in BACKGROUND (page 4), defined contribution (as opposed to defined benefit) plans such as 401k plans relieve municipalities of the risks and uncertainties of below-projected investment returns and other assumptions about the future (for example, mortality rates). A large percentage of private companies have now adopted this approach184 but they may be compensating for this, at least in part, with salaries that are greater than public agency salaries. As of 2009, only 7 percent of private-sector employees had their sole pension plan in the form of a defined benefit plan, down from 62 percent in 1975.185 The Cities could achieve much greater certainty with respect to future pension costs if they could switch to a defined contribution plan for new employees. However, CalPERS does not currently offer defined contribution plans as an option for its member agencies and it requires that all new employees of the member Agencies participate in CalPERS’ pension plans.186 As a result, the Cities could only offer defined contribution plans to new employees in addition to, rather than in place of, existing pension plans with the result that defined contribution plans would increase, rather than reduce, overall costs for the Cities. In addition, offering only defined contribution plans could put the Cities at a significant employee recruiting and retention disadvantage compared to private industry unless the Cities increased salaries to rates more competitive with private industry. (c) Withdrawing from CalPERS. Several cities have considered the possibility of withdrawing from CalPERS altogether in order to have more flexibility and visibility into their future pension costs. However, CalPERS’ termination payment requirements are prohibitive. 187 The City of Palo Alto determined that, in order to leave CalPERS, it would first need to “immediately deposit” in excess of $1 billion to the CalPERS Pension Trust, and then establish a new deferred compensation plan for employees.188 A City of San Carlos official advised the Grand Jury that withdrawal from CalPERS is effectively “impossible” because of the high termination fees imposed by CalPERS. Conclusion. Most of the Cities do not yet appear to have adopted a long-term financial plan to address their rising pension costs. They have not adopted target Funded Percentages for their plans, dates for achieving them, or plans for monitoring progress against their targets. Thus far, they have not made it a priority to provide clear, regular and public disclosure to their residents of their future projected pension costs and Unfunded Liabilities, nor the cuts in services that they will make, or 184 Since 1980, when participation in defined benefits plans was at its peak in the United States, 30.1 million people participated in defined benefit plans. That number has dropped by 40 percent over the past 30 years. Money -Zine, Defined Benefit versus Contribution Plans, July 5, 2017, p. 2, <https://www.money-zine.com/financial- planning/retirement/defined-benefit-versus-contribution-plans/>. 185 Nation, Pension Math 2011, p. 3, footnote 11. 186 Interviews by Grand Jury. 187 Interviews by Grand Jury. 188 Keene, James, Palo Alto City Manager, Letter to Tamara L. Davis. 2017-2018 San Mateo County Civil Grand Jury 36 increases in revenues they will seek, in response to rapidly increasing pension costs. Where projected pension costs are disclosed, they are often based on CalPERS projections for returns on investment that some experts argue are optimistic, and residents are not apprised of the potential for far greater costs should another recession occur, or other CalPERS assumptions prove inaccurate. The steps necessary to address the pension crisis are unpleasant to think about, much less implement. Indeed, some of the Cities have advised the Grand Jury that, while important, amortization of Unfunded Liabilities must be balanced against “other priorities” for new spending.189 While the Grand Jury understands the desire on the part of the Cities to expand city services in these times of economic growth and increasing property tax revenues, it is difficult to think of a more important issue for the Cities to focus on than the looming pension crisis. Currently, the county enjoys good economic conditions. Its unemployment rate recently dropped to 2.1 percent.190 Many of the Cities are experiencing rising revenues.191 If the Cities do not address Unfunded Liabilities in a decisive way now, when will they ever be able to? The next recession may well reduce CalPERS’ Returns on Investment below their projected level, resulting in even larger Unfunded Liabilities and higher pension costs. The next recession may also reduce or eliminate the Cities’ budget surpluses, making it harder for them to cope.192 Now is the time for the Cities to engage their residents in the issue and, with the residents’ support, take the difficult actions necessary to secure a bright future for their communities. FINDINGS F1. Each City’s CAFR for the fiscal years ending June 30, 2015, June 30, 2016 and June 30, 2017 reported covered payroll for the City’s pension plans in the amount set forth beside its name for that year in Appendix A. F2. Each City’s CAFR for the fiscal years ending June 30, 2015, June 30, 2016 and June 30, 2017 reported contribution payments to CalPERS on the City’s pension plans in the amount set forth beside its name for that year in Appendix A. F3. Each City’s CAFR for the fiscal years ending June 30, 2015, June 30, 2016 and June 30, 2017 reported Unfunded Liabilities (as defined in this report) for the City’s pension plans in the amount set forth beside its name for that year in Appendix A. Each City has been required to make large Amortization Cost (as defined in this report) payments of principal and interest to CalPERS on those Unfunded Liabilities. These payments have diverted money that could otherwise have been used to provide public services or to add to reserves. 189 Interviews by Grand Jury. 190 Glover, Mark, California sets a new record for lowest unemployment rate, The Sacramento Bee, January 19, 2018, <www.sacbee.com/news/business/article/195571634.html>. 191 See footnote 125 above. 192 Redwood City notes that the current expansion phase of the economy has now lasted for eight years, a nd that, historically, expansionary cycles only last an average of five years. It cautions that the economy is in a “late stage of expansion” and that prudent long-term budgeting requires the city to “proactively prepare for future recessionary impacts that loom in the future.” Redwood City, Report - FY 2017-18 Mid-Year Budget Study Session, p. 11. 2017-2018 San Mateo County Civil Grand Jury 37 F4. Each City’s CAFR for the fiscal years ending June 30, 2015, June 30, 2016 and June 30, 2017 reported Funded Percentages (as defined in this report) for the City’s pension plans in the amount set forth beside its name for that year in Appendix A. F5. Each City’s CAFR for the fiscal years ending June 30, 2015, June 30, 2016 and June 30, 2017 reported what the Unfunded Liabilities (as defined in this report) for the City’s pension plans would have been if the applicable Discount Rate applied to calculate them had been 1 percentage point lower in the amount set forth beside its name for that year in Appendix A. F6. Each City’s CAFR for the fiscal years ending June 30, 2015, June 30, 2016 and June 30, 2017 reported general fund total expenditures for that year in the amount set forth beside its name for that year in Appendix A. F7. In each of the fiscal years ending June 30, 2015, June 30, 2016 and June 30, 2017, each City’s contribution payments to CalPERS on the City’s pension plans represented the percentage of that City’s general fund total expenditures for that year set forth beside its name for that year in Appendix A in the column entitled “Contribution Payments as % of General Fund Total Expenditures.” F8. In each of the fiscal years ending June 30, 2015, June 30, 2016 and June 30, 2017, each City’s contribution payments to CalPERS on the City’s pension plans represented the percentage of that City’s covered payroll for the City’s pension plans in the amount set forth beside its name for that year in Appendix A in the column entitled “Contribution Rate (i.e., Contribution Payments as % of Covered Payroll).” F9. In FY 2017-2018, each City (excluding Atherton, Colma, Foster City, Hillsborough, Portola Valley and Woodside) has paid CalPERS for its Normal Costs (as defined in this report) and Amortization Costs (as defined in this report) in the amounts set forth beside its name on Table No. 4. (The Cities of Atherton, Colma, Foster City, Hillsborough, Portola Valley and Woodside are not included in Table No. 4 because the source for that table did not included data for them.) F10. As a result, among other things, of CalPERS’ decreasing its Discount Rate from 7.5 percent to 7 percent by FY 2020-2021, its reduction of future Amortization Periods from 30 to 20 years, and its use of updated mortality assumptions reflecting projected increases in the longevity of Members, each City faces increasing pension contribution payments to CalPERS which are likely to more than double by FY 2024-2025. F11. Principal and interest payments on each City’s Unfunded Liabilities will increasingly impair such City’s provision of public services, impair the security of employee salary and pension Benefits, and/or result in proposals for revenue increases. Paying down Unfunded Liabilities early results in large savings. Every City in the county would save substantial money by paying down their Unfunded Liabilities early. F12. The financial documents for each City reviewed by the Grand Jury show that no City has adopted a long-term financial plan with at least a 10-year time horizon to address rising Normal Costs and Amortization Costs that includes each of the following: 2017-2018 San Mateo County Civil Grand Jury 38 objectives, such as achieving a target Funded Percentage, eliminating the Unfunded Liabilities over “n” years or maintaining the cities’ share of Normal Costs below “n” percentage of payroll, policies to achieve these objectives, such as making supplemental payments to CalPERS to reduce their Unfunded Liability, keeping salary increases below the actuarially assumed increase rate, capping the cities’ share of Normal Costs, reducing operational costs or increasing revenue, measures to implement such policies, processes to monitor progress in implementing the measures, and alternative financial strategies, or a “Plan B,” that may be used in the event that CalPERS’ assumptions are not met in future years. F13. Despite the fact that rising pension costs and Unfunded Liabilities are a significant problem for each City, no City (except for Redwood City, the City of San Mateo, the City of Burlingame, the City of Belmont and the City of Menlo Park) includes specific, annual projections of future pension contribution costs in their budgets published in the finance section of their websites. RECOMMENDATIONS R1. The Grand Jury recommends that, by December 31, 2018, each City schedule public hearings to engage its residents in addressing the city’s increasing pension costs and to develop a long-term plan to address them. R2. The Grand Jury recommends that, by December 31, 2018, and annually thereafter, each City publish a report on its website detailing its pension obligations. The report should include, at a minimum, the following: a) The City’s total pension contribution costs under all plans, and also broken out into subtotals for all Miscellaneous Plans, and all Safety Plans, for each of the 3 preceding fiscal years as well as estimates for such costs in each of the following 10 fiscal years, assuming CalPERS’ actuarial assumptions are met. b) The City’s total Unfunded Liabilities under all plans, and also broken out into subtotals for all Miscellaneous Plans, and all Safety Plans, for each of the 3 preceding fiscal years as well as estimates for such Unfunded Liabilities in each of the next 10 fiscal years, assuming CalPERS’ actuarial assumptions are met. c) The City’s Funded Percentage across all plans, and also broken out into subtotals for all Miscellaneous Plans, and all Safety Plans, for each of the 3 preceding fiscal years as well as estimates for such Funded Percentages in each of the next 10 fiscal years, assuming CalPERS’ actuarial assumptions are met. d) The percentage of the City’s general fund expenditures and covered payroll represented by the pension costs described in (a) above (using estimates of general fund expenditures in future fiscal years). 2017-2018 San Mateo County Civil Grand Jury 39 e) In addition, estimated information for all projections regarding the next 10 fiscal years set forth in items (a) through (e) above should be presented using a Discount Rate that is 1 percentage point below CalPERS’ then-current Discount Rate. R3. The Grand Jury does not recommend specific policies or implementation measures to address pension costs. However, it recommends that, by no later than December 31, 2018, and annually thereafter, each City instruct its staff to deliver a report to the City Council in connection with the City’s financial plan evaluating available options to address pension costs and that each City hold public hearings to discuss and consider such options no less than every other fiscal year. These include (but may not be limited to): Regular supplemental payments to CalPERS (beyond those required by CalPERS) to accelerate the amortization of their Unfunded Liabilities. Irregular supplemental payments to CalPERS (beyond those required by CalPERS), as when a City has a budget surplus or receives special non-recurring revenues. Electing to apply shorter Amortization Periods (that is, less than 20 years) to their Unfunded Liabilities. Issuing pension obligation bonds. Establishing substantial reserves that can be applied in the future to help meet rising pension costs and/or accelerate amortization of Unfunded Liabilities. Establishing Section 115 trusts for the exclusive purposes of meeting rising pension costs and/or accelerating amortization of Unfunded Liabilities. Reductions in general fund operating costs other than pensions. Seeking additional general fund revenues that can be applied directly to paying pension costs or that can offset general fund budget shortfalls that would otherwise occur. Keeping employee salary increases at or below the levels assumed by CalPERS. Negotiating cost-sharing agreements with employees under which employees pay a portion of the City’s pension costs (without at the same time agreeing to offsetting compensation increases). Maintaining growth in employee salaries and COLAs at or below the assumed CalPERS rates. To the extent allowed by law, consider the recommendation of the League of California Cities to renegotiate employee contracts to bring the pension Benefits of Classic Members in line with PEPRA Members, for future work. In particular, ensure that the salary used to determine final retirement compensation is based on the average of the final 3 years of employment (rather than highest 1 year), and that the salary is not enhanced by “spiking,” such as by including overtime, unused vacation or sick leave, purchases of “air time,” and the like. 2017-2018 San Mateo County Civil Grand Jury 40 R4: The Grand Jury recommends that, by June 30, 2019, each City develop and publish a long-term financial plan to deal with rising pension costs, and update that plan annually. Such a plan should include: Specific objectives, such as identifying a target Funded Percentage, eliminating the Unfunded Liabilities over “n” years and maintaining the City’s share of Normal Costs at “n” percentage of payroll. Policies to achieve these objectives. Specific measures to implement the policies. A process to monitor progress in implementing the measures and in achieving the objectives. Consideration of alternative policies and measures, or a “Plan B,” that may be used in the event that CalPERS’s actuarial assumptions, especially the Discount Rate, are not met in future years. REQUEST FOR RESPONSES Pursuant to Penal Code Section 933.05, the Grand Jury requests that the City Councils of each of the following respond to the foregoing Findings and Recommendations referring in each instance to the number thereof: ● The Town of Atherton ● The City of Belmont ● The City of Brisbane ● The City of Burlingame ● The Town of Colma ● The City of Daly City ● The City of East Palo Alto ● The City of Foster City ● The City of Half Moon Bay ● The Town of Hillsborough ● The City of Menlo Park ● The City of Millbrae ● The City of Pacifica ● The Town of Portola Valley ● The City of Redwood City ● The City of San Bruno ● The City of San Carlos ● The City of San Mateo ● The City of South San Francisco ● The Town of Woodside 2017-2018 San Mateo County Civil Grand Jury 41 In responding to the foregoing Findings and Recommendations, each city and town should understand references to “[E]ach City” as referring only to itself. No city or town should be responding as to an entity other than itself. METHODOLOGY The Grand Jury reviewed each of the documents listed in “BIBLIOGRAPHY” below. In addition, the Grand Jury interviewed representatives of 6 of the Cities, the County, and an independent public pensions expert. Appendix A-1 APPENDIX A – CITIES’ PENSION DATA (Based on the Cities’ Annual Financial Reports for FY 2014-2015, FY 2015-2016 and FY 2016-2017) All dollar amounts in thousands. CITIES Fiscal Year Covered Payroll Contribution Payments Contribution Rate (i.e., Contribution Payments as % of Covered Payroll) Unfunded Liability Funded Percentage Unfunded Liability if Discount Rate Is Reduced 1 Percentage Point General Fund Total Expenditures Contribution Payments as % of General Fund Total Expenditures* Atherton 2016-2017 $4,327 $1,155 26.7% $13,982 74.3% $21,344 $11,437 10.1% 2015-2016 $4,261 $617 14.5% $10,674 80.4% $17,326 $10,611 5.8% 2014-2015 $3,988 $826 20.7% $9,253 81.9% $16,088 $11,622 7.1% Belmont 2016-2017 $15,198 $3,582 23.6% $32,835 72.0% $48,680 $18,344 19.5% 2015-2016 $11,794 $4,191 35.5% $26,626 76.2% $41,855 $16,800 24.9% 2014-2015 $14,176 $2,788 19.7% $25,059 76.7% $39,412 $16,777 16.6% Brisbane 2016-2017 $7,916 $1,713 21.6% $18,227 74.8% $27,989 $15,521 11.0% 2015-2016 $7,101 $883 12.4% $13,952 79.9% $23,410 $14,850 5.9% 2014-2015 6,152 1,153 18.7% 12,074 82.2% $21,119 $13,247 8.7% Burlingame 2016-2017 $18,617 $5,294 28.4% $57,694 73.4% $86,051 $49,707 10.7% 2015-2016 $17,654 $3,840 21.8% $46,987 77.8% $75,062 $47,459 8.1% 2014-2015 16,713 3,822 22.9% 41,762 80.1% $69,042 $44,405 8.6% Colma 2016-2017 $4,031 $1,048 26.0% $9,449 74.2% $14,008 $13,323 7.9% 2015-2016 $3,749 $937 25.0% $7,747 74.7% $11,969 $13,410 7.0% 2014-2015 $3,604 $939 26.1% $6,885 76.1% $10,724 $12,948 7.3% Daly City 2016-2017 $40,070 $11,631 29.0% $139,861 75.7% $213,918 $77,139 15.1% 2015-2016 $42,608 $12,081 28.4% $112,195 80.0% $185,217 $79,062 15.3% 2014-2015 42,226 8,862 21.0% 99,631 81.9% $169,965 $72,649 12.2% East Palo Alto 2016-2017 8,464 1,493 17.6% 9,459 74.1% 13,750 $18,109 8.2% 2015-2016 $8,408 $1,372 16.3% $8,112 78.4% $12,086 $17,735 7.7% 2014-2015 7,926 1,477 18.6% 7,856 70.6% $11,417 $16,524 8.9% Foster City 2016-2017 $19,875 $7,209 36.3% $69,207 68.7% $98,575 $36,416 19.8% 2015-2016 $18,724 $5,294 28.3% $56,390 76.7% $84,686 $33,048 16.0% 2014-2015 17,696 4,552 25.7% 50,458 78.2% $77,534 $31,322 14.5% Half Moon Bay 2016-2017 $2,423 $594 24.5% $9,502 74.6% $14,557 $10,418 5.7% 2015-2016 $2,014 $583 28.9% $7,319 80.1% $12,332 $8,781 6.6% 2014-2015 1,987 529 26.6% 6,736 81.6% $11,620 $8,352 6.3% Hillsborough 2016-2017 $8,661 $2,158 24.9% $22,387 74.5% $34,262 $21,224 10.2% 2015-2016 $9,089 $1,893 20.8% $17,187 80.2% $28,063 $19,693 9.6% 2014-2015 8,625 1,605 18.6% 14,770 79.8% $25,822 $18,721 8.6% *Note: Covered Payroll amounts in CAFRs may include compensation paid to certain employees whose activities are not accounted for as part of General Fund activities, and their compensation would not be included in General Fund Total Expenditures. As a result, the percentage of General Fund Total Expenditures represented by Covered Payroll may somewhat overstate the percentage represented by General Fund Covered Payroll. Some experts have estimated that this might result in an overstatement of the percentage by 10 – 30 percent, such that a Contribution Payment as a % of General Fund Total Expenditures of 10 percent might actually be somewhere between 7 and 9 percent. Appendix A-2 CITIES Fiscal Year Covered Payroll Contribution Payments Contribution Rate (i.e., Contribution Payments as % of Covered Payroll) Unfunded Liability Funded Percentage Unfunded Liability if Discount Rate Is Reduced 1 Percentage Point General Fund Total Expenditures Contribution Payments as % of General Fund Total Expenditures* Menlo Park 2016-2017 $23,112 $5,565 24.1% $50,993 74.4% $77,514 $47,314 11.8% 2015-2016 $19,868 $4,747 23.9% $38,881 79.3% $64,170 $42,565 11.2% 2014-2015 19,969 4,228 21.2% 34,371 81.2% $58,596 $40,581 10.4% Millbrae 2016-2017 $6,165 $2,335 37.9% $42,769 74.1% $62,676 $25,494 9.2% 2015-2016 $5,835 $2,064 35.4% $34,256 78.4% $53,883 $22,514 9.2% 2014-2015 6,871 1,400 20.4% 28,989 78.6% 47,979 $18,201 7.7% Pacifica 2016-2017 $15,720 $3,736 23.8% $44,400 77.5% $70,650 $28,781 13.0% 2015-2016 $15,000 $2,749 18.3% $32,841 82.7% $56,750 $27,358 10.0% 2014-2015 $14,365 $2,739 19.1% $28,089 85.0% $52,855 $25,354 10.8% Portola Valley 2016-2017 $1,442 $116 8.1% $524 91.8% $1,382 $4,361 2.7% 2015-2016 $1,072 $84 7.8% $82 98.6% $881 $4,303 2.0% 2014-2015 $993 $1,019 102.6% $957 83.0% $1,706 $5,587 18.2% Redwood City 2016-2017 $62,098 $17,722 28.5% $215,202 65.7% $298,653 $112,142 15.8% 2015-2016 $57,352 $17,363 30.3% $177,937 70.1% $257,798 $101,684 17.1% 2014-2015 $54,275 $16,467 30.3% $164,149 71.6% $240,111 $95,856 17.2% San Bruno 2016-2017 $25,173 $6,344 25.2% $78,198 70.7% $114,180 $43,244 14.7% 2015-2016 $21,315 $4,434 20.8% $61,771 75.6% $96,281 $38,882 11.4% 2014-2015 $20,532 $4,979 24.3% $53,531 78.4% $86,637 $36,738 13.6% San Carlos 2016-2017 $11,047 $2,134 19.3% $47,009 63.3% $64,530 $33,182 6.4% 2015-2016 $10,486 $2,601 24.8% $40,263 67.3% $57,293 $41,264 6.3% 2014-2015 $8,480 $2,296 27.1% $27,741 75.5% $42,824 $29,067 7.9% San Mateo (City) 2016-2017 $58,645 $17,537 29.9% $197,822 66.2% $271,523 $103,992 16.9% 2015-2016 $52,345 $15,908 30.4% $168,693 70.1% $240,459 $95,779 16.6% 2014-2015 $49,788 $13,860 27.8% $159,585 71.4% $228,588 $88,078 15.7% South San Francisco 2016-2017 $48,954 $13,300 27.2% $152,786 68.4% $216,103 $92,367 14.4% 2015-2016 $40,396 $13,938 34.5% $130,042 72.2% $191,669 $86,795 16.1% 2014-2015 $34,478 $11,403 33.1% $124,085 73.2% $184,305 $76,805 14.8% Woodside 2016-2017 $1,996 $323 16.2% $3,164 72.3% $4,702 $6,801 4.8% 2015-2016 $1,809 $409 22.6% $2,578 75.8% $4,325 $6,638 6.2% 2014-2015 $1,640 $389 23.7% $2,053 79.1% $3,356 $6,107 6.4% Totals & Weighted Averages 2016-2017 $383,935 $104,986 27.3% $1,215,467 70.5% $1,755,047 $769,315 13.6% 2015-2016 $350,879 $95,987 27.4% $994,535 75.1% $1,515,516 $729,230 13.2% 2014-2015 $334,484 $85,335 25.5% $898,036 76.8% $1,399,702 $668,939 12.8% Appendix B-1 APPENDIX B - HOW TO FIND PENSION DATA IN THE CITIES’ CAFRS Set forth below is a guide to where information compiled in Appendix A can be found in the Cities’ CAFRs. Amount of Employer Contributions to Pension Plans: This information is set forth in the “Required Supplemental Information” section of the CAFR, in the “Schedule(s) of Contributions” for the pension plans. Sometimes a separate Schedule of Contribution is included for each pension plan, other times only an aggregate number for all plans is given. Covered Payroll for Pension Plans: This information is set forth in the “Required Supplemental Information” section of the CAFR, in the “Schedule(s) of Contributions” for the pension plans. Where the CAFR has a separate Schedule of Contributions for each pension plan, it will also show the payroll specific to that plan’s employees. Where plan information is aggregated, then the payroll number will also be aggregated. Amount of Unfunded Liabilities: This information is set forth in the “Required Supplemental Information” section of the CAFR, in the “Schedule of Proportionate Share of The Net Pension Liability” as “Plan’s proportionate share of the Net Pension Liability (Asset).” Note: The amounts given for “covered payroll” in this schedule should not be relied upon as they often apply to the year (either one or two years prior) in which pension assets and liabilities were last measured, rather than the fiscal year covered in the CAFR itself. For information as to covered payroll during the current fiscal year, rely only on the information is set forth in the “Required Supplemental Information” section of the CAFR, in the “Schedule(s) of Contributions” for the pension plans. Funded Percentage of Pension Plan. This information is set forth in the “Required Supplemental Information” section of the CAFR, in the “Schedule of Proportionate Share of The Net Pension Liability” as “Plan’s proportionate share of Fiduciary Net Position as a Percentage of Plan’s Total Pension Liability.” As used in CAFRs, “Fiduciary Net Position” refers to the total assets in the pension plan. Hence, the Funded Percentage of a pension plan is equal to its “Fiduciary Net Position” divided by “Total Pension Liability.” The term, “Net Pension Liability” refers to the difference between plan assets (“Fiduciary Net Position”) and plan liabilities (“Total Pension Liability”). The amounts given for “covered payroll” in this schedule should not be relied upon as they often apply to the year (either one or two years prior) in which pension assets and liabilities were last measured, rather than the fiscal year covered in the CAFR itself. For information as to covered payroll during the current fiscal year, rely only on the information is set forth in the “Required Supplemental Information” section of the CAFR, in the “Schedule(s) of Contributions” for the pension plans. Total Assets, Total Liabilities and Total Unfunded Liabilities of Pension Plan: This information, if provided in the CAFR, is set forth in the “Required Supplemental Information” section of the CAFR, in the “Schedule of Changes in the Net Pension Liability and Related Ratios” as (i) “Plan Appendix B-2 Fiduciary Net Position – ending (b)” with respect to plan assets, (ii) “Total Pension Liability – ending (a)” with respect to total plan liabilities, and (iii) “Net Pension Liability – ending (a) - (b)” with respect to unfunded pension liabilities. Note: In many CAFRs the amount of unfunded pension liabilities (“Net Pension Liabilities”) and the Funded Percentage of the pension plan are given, but the total assets amount (“Plan Fiduciary Net Position”) and the total liabilities amount (“Total Pension Liability”) are not given. They can, however, be calculated in the following way. To derive total liabilities, simply divide the Unfunded Liability amount (“Net Pension Liabilities”) by 1 minus the Funded Percentage for the fund. To derive total assets (“Plan Fiduciary Net Position”) simply subtract the Unfunded Liabilities amount (“Net Pension Liability”) from the amount of total plan liabilities (“Total Pension Liability”). Where the aggregate Funded Percentage of all pension plans is not given in a CAFR, it can be derived simply by dividing the sum of all of the plan asset amounts for each plan by the sum of all plan liabilities for each plan. The following example will demonstrate the foregoing. Assume the CAFR provides the following information: Net Pension Liability under Miscellaneous Plan is $15 million. Funded percentage under Miscellaneous Plan is 75%. Net Pension Liability under Safety Plan is $20 million. Funded percentage under Safety Plan is 80%. Accordingly, Total liabilities under the Miscellaneous Plan are $60 million ($15M net pension liability/ (1 - 75% Funded Percentage) = $60 million) Total assets under the Miscellaneous Plan are $35M ($60M total liabilities amount minus $15M net pension liability = $35M) Total liabilities under the Safety Plan are $100M ($20M net pension liability/ (1-80% Funded Percentage) = $100M) Total assets under Safety Plan are $80M ($100M total liabilities amount minus $20M net pension liability = $80M) Total liabilities under all pension plans are $160M ($60M under Miscellaneous Plan and $100M under Safety Plan) Total assets under all pension plans are $105M ($35M under Miscellaneous Plan plus $80M under Safety Plan Appendix B-3 Aggregate Funded Percentage under all plans is 65.6% ($105M aggregate total assets divided by $160M aggregate total liabilities. Unfunded Liabilities Where Discount Rate Is Increased/Decreased by 100 Points (i.e., 1 percentage point): This information is set forth in the section of “Notes to Basic Financial Statements” describing the pension plans under the heading “Sensitivity of Proportionate Share of Net Pension Liability to Changes in the Discount Rate.” It is sometimes provided separately for each pension plan and other times only an aggregate number for all pension plans is given. General Fund Spending by City: This information is found in the “Government Fund Financial Statements” section of the CAFR in the “Statement of Revenue, Expenditures and Changes in Fund Balances, Governmental Funds for the Year Ended ______”. Bibliography-1 BIBLIOGRAPHY Articles and Reports that are cited in report Alameda County Deputy Sheriff’s Association, et al. v. 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(Last accessed, June 10, 2018 Issued: July 17, 2018 City of South San Francisco Pension Contributions 2016 - 2046 Discount Rate: 7.0 ROI: 6.0 Year Unfunded Liability Contribution Employer Normal Cost Total Employer Contribution % Change from 2018 % Inc / (Dec) from Prior Year 2016 8,887,545 5,989,786 14,877,331$ 2017 8,893,215 6,050,324 14,943,539$ 0% 2018 10,844,932 6,363,393 17,208,325$ 15% 2019 12,665,386 6,898,473 19,563,860$ 14%14% 2020 13,895,164 7,477,275 21,372,439$ 24%9% 2021 15,298,774 7,560,185 22,858,959$ 33%7% 2022 16,726,779 7,613,250 24,340,029$ 41%6% 2023 17,812,127 7,699,117 25,511,244$ 48%5% 2024 19,241,738 7,750,482 26,992,220$ 57%6% 2025 20,148,034 7,828,368 27,976,402$ 63%4% 2026 21,094,343 7,875,567 28,969,910$ 68%4% 2027 22,085,995 7,935,610 30,021,605$ 74%4% 2028 23,118,406 7,998,137 31,116,542$ 81%4% 2029 24,192,922 8,057,922 32,250,845$ 87%4% 2030 25,311,038 8,111,181 33,422,219$ 94%4% 2031 25,003,893 8,197,039 33,200,931$ 93%(1%) 2032 25,449,121 8,263,213 33,712,334$ 96%2% 2033 24,782,363 8,339,955 33,122,318$ 92%(2%) 2034 24,945,756 8,405,246 33,351,002$ 94%1% 2035 24,884,541 8,495,713 33,380,254$ 94%0% 2036 16,839,538 8,595,350 25,434,888$ 48%(24%) 2037 16,825,940 8,690,017 25,515,957$ 48%0% 2038 16,799,070 8,789,340 25,588,410$ 49%0% 2039 17,058,700 8,915,714 25,974,414$ 51%2% 2040 17,564,178 9,031,447 26,595,625$ 55%2% 2041 16,540,248 9,141,350 25,681,598$ 49%(3%) 2042 16,939,283 9,222,192 26,161,475$ 52%2% 2043 16,686,242 9,287,605 25,973,847$ 51%(1%) 2044 14,666,921 9,380,530 24,047,450$ 40%(7%) 2045 13,928,013 9,494,057 23,422,070$ 36%(3%) 2046 14,798,228 9,622,268 24,420,495$ 42%4% ATTACHMENT 2 $- $5 $10 $15 $20 $25 $30 $35 $40 Millions City of South San Francisco Pension Contribution Rates 2016 - 2046 Discount Rate: 7% ROI: 6% Employer Normal Cost Unfunded Liability Contribution City of South San Francisco Pension Costs Actual & Projected Status Year Number Fiscal Year Miscellaneous Safety Total Total Covered Payroll Pension Cost as a % of Covered Payroll General Fund Expenditures* Pension Cost as a % of GF Exp Miscellaneous Safety Total Total Covered Payroll Pension Cost as a % of Covered Payroll General Fund Expenditures Pension Cost as a % of GF Exp Additional Annual Cost at 6.0% Actual 1 2015-16 5,726,981 8,535,737 14,262,718$ 40,396,088$ 35.31%86,795,020$ 16.43%5,726,981 8,535,737 14,262,718$ 40,396,088$ 35.31%86,795,020$ 16.43% Actual 2 2016-17 6,300,000 8,570,000 14,870,000$ 48,953,919$ 30.38%92,367,213$ 16.10%6,300,000 8,570,000 14,870,000$ 48,953,919$ 30.38%92,367,213$ 16.10% Unaudited 3 2017-18 5,960,000 8,990,000 14,950,000$ 46,289,694$ 32.30%101,286,947$ 14.76%5,960,000 8,990,000 14,950,000$ 46,289,694$ 32.30%101,286,947$ 14.76% Projected 1 2018-19 6,840,000 10,370,000 17,210,000$ 51,271,335$ 33.57%105,114,037$ 16.37%6,840,000 10,370,000 17,210,000$ 51,271,335$ 33.57%105,114,037$ 16.37% Projected 2 2019-20 7,700,000 11,870,000 19,570,000$ 56,334,034$ 34.74%104,306,737$ 18.76%7,700,000 11,870,000 19,570,000$ 56,334,034$ 34.74%104,306,737$ 18.76% Projected 3 2020-21 8,420,000 12,960,000 21,380,000$ 59,296,625$ 36.06%109,921,035$ 19.45%9,610,000 15,310,000 24,920,000$ 59,296,625$ 42.03%109,921,035$ 22.67%3,540,000$ Projected 4 2021-22 9,040,000 13,720,000 22,760,000$ 61,071,994$ 37.27%114,227,565$ 19.93%10,950,000 16,970,000 27,920,000$ 61,071,994$ 45.72%114,227,565$ 24.44%5,160,000$ Projected 5 2022-23 9,570,000 14,480,000 24,050,000$ 62,901,910$ 38.23%118,307,473$ 20.33%12,240,000 18,690,000 30,930,000$ 62,901,910$ 49.17%118,307,473$ 26.14%6,880,000$ Projected 6 2023-24 9,900,000 15,010,000 24,910,000$ 64,786,723$ 38.45%122,263,512$ 20.37%13,410,000 20,240,000 33,650,000$ 64,786,723$ 51.94%122,263,512$ 27.52%8,740,000$ Projected 7 2024-25 10,260,000 15,710,000 25,970,000$ 66,728,080$ 38.92%126,747,698$ 20.49%14,640,000 22,020,000 36,660,000$ 66,728,080$ 54.94%126,747,698$ 28.92%10,690,000$ Projected 8 2025-26 10,490,000 15,960,000 26,450,000$ 68,727,678$ 38.49%131,022,254$ 20.19%14,990,000 22,380,000 37,370,000$ 68,727,678$ 54.37%131,022,254$ 28.52%10,920,000$ Projected 9 2026-27 10,730,000 16,190,000 26,920,000$ 70,787,264$ 38.03%135,438,008$ 19.88%15,340,000 22,720,000 38,060,000$ 70,787,264$ 53.77%135,438,008$ 28.10%11,140,000$ Projected 10 2027-28 10,970,000 16,450,000 27,420,000$ 72,938,608$ 37.59%140,112,978$ 19.57%15,700,000 23,100,000 38,800,000$ 72,938,608$ 53.20%140,112,978$ 27.69%11,380,000$ *Note: Excludes transfers in, as they are reported as other financing sources on the income statement.68,450,000$ Discount Rate & ROI at 7.0%Discount Rate and ROI at 6.0% ATTACHMENT 3 Page 1 of 3 City of South San Francisco Net Pension Liabilities Actual & Projected Type Year Number Fiscal Year Miscellaneous Safety Total Miscellaneous Safety Total Difference at 6.0% Actual 1 2015-16 75,060,000$ 101,340,000$ 176,400,000$ 75,060,000 101,340,000 176,400,000$ Actual 2 2016-17 74,950,000$ 101,320,000$ 176,270,000$ 74,950,000 101,320,000 176,270,000$ Actual 3 2017-18 81,160,000$ 108,080,000$ 189,240,000$ 114,700,000 152,190,000 266,890,000$ 77,650,000$ Projected 1 2018-19 81,660,000$ 107,540,000$ 189,200,000$ 117,350,000 153,830,000 271,180,000$ 81,980,000$ Projected 2 2019-20 81,340,000$ 107,200,000$ 188,540,000$ 119,280,000 155,910,000 275,190,000$ 86,650,000$ Projected 3 2020-21 80,410,000$ 107,950,000$ 188,360,000$ 120,590,000 159,240,000 279,830,000$ 91,470,000$ Projected 4 2021-22 79,030,000$ 109,540,000$ 188,570,000$ 120,890,000 162,760,000 283,650,000$ 95,080,000$ Projected 5 2022-23 76,840,000$ 106,920,000$ 183,760,000$ 118,910,000 160,320,000 279,230,000$ 95,470,000$ Projected 6 2023-24 74,240,000$ 103,590,000$ 177,830,000$ 115,720,000 156,180,000 271,900,000$ 94,070,000$ Projected 7 2024-25 71,140,000$ 99,330,000$ 170,470,000$ 111,140,000 150,000,000 261,140,000$ 90,670,000$ Projected 8 2025-26 67,630,000$ 94,510,000$ 162,140,000$ 106,010,000 143,080,000 249,090,000$ 86,950,000$ Projected 9 2026-27 63,660,000$ 89,060,000$ 152,720,000$ 100,250,000 135,330,000 235,580,000$ 82,860,000$ Projected 10 2027-28 59,190,000$ 82,930,000$ 142,120,000$ 93,840,000 126,690,000 220,530,000$ 78,410,000$ Discount Rate and ROI at 6.0%Discount Rate and ROI at 7.0% Page 2 of 3 City of South San Francisco Funded Status Actual & Projected Type Year Number Fiscal Year Miscellaneous Safety Total Miscellaneous Safety Total Difference at 6.0% Actual 1 2015-16 64.91%65.41%65.20%64.91%65.41%65.20% Actual 2 2016-17 67.00%67.00%67.00%67.00%67.00%67.00% Actual 3 2017-18 66.00%67.00%67.00%58.00%59.00%58.00%-9.00% Projected 1 2018-19 67.00%68.00%68.00%58.00%60.00%59.00%-9.00% Projected 2 2019-20 68.00%70.00%69.00%59.00%61.00%60.00%-9.00% Projected 3 2020-21 69.00%71.00%70.00%60.00%62.00%61.00%-9.00% Projected 4 2021-22 71.00%72.00%71.00%61.00%63.00%62.00%-9.00% Projected 5 2022-23 73.00%73.00%73.00%63.00%65.00%64.00%-9.00% Projected 6 2023-24 75.00%75.00%75.00%65.00%67.00%66.00%-9.00% Projected 7 2024-25 77.00%77.00%77.00%68.00%70.00%69.00%-8.00% Projected 8 2025-26 79.00%79.00%79.00%71.00%72.00%71.00%-8.00% Projected 9 2026-27 81.00%81.00%81.00%73.00%74.00%74.00%-7.00% Projected 10 2027-28 83.00%83.00%83.00%76.00%77.00%76.00%-7.00% Discount Rate and ROI at 7.0%Discount Rate and ROI at 6.0% Page 3 of 3 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-877 Agenda Date:9/26/2018 Version:1 Item #:11a. Resolution approving and authorizing the City Manager to sign a response to San Mateo County Grand Jury Report “Soaring City Pension Costs - Time for Hard Choices.” WHEREAS,the City of South San Francisco has contracted with the California Public Employees’Retirement System (CalPERS) to provide pension benefits to its employees since 1945; and WHEREAS,over the past twenty years,the economy has endured severe volatility due to the Dot Com boom/bust and Great Recession,which placed significant stress on the CalPERS pension trust and its participating members; and WHEREAS,the CalPERS Board of Administration’s efforts to address economic volatility and ensure sustainability have resulted in a number of policy and assumption changes,including amortization,or how gains and losses are recognized over time,and the discount rate,or the anticipated return on investment over a long period of time; and WHEREAS,on July 17,2018,the San Mateo County Grand Jury issued a report titled “Soaring City Pension Costs - Time for Hard Choices”; and WHEREAS,the City of South San Francisco is required to provide a response within 90 days of the Grand Jury report, which is attached herein as Exhibit A; and WHEREAS,the City is committed to holding a public meeting for the City Council and the South San Francisco community to better understand and prepare for escalating pension costs,which complies with Recommendation R1 of the Grand Jury report; and WHEREAS,consistent with Recommendation R3,the City Council has already implemented a number of strategies to address rising pension costs,including establishment of a CalPERS Stabilization reserve in FY 2015-16, which has a current balance of $4.5 million; and WHEREAS,the City could consider investing accumulated operating surplus with a pension trust fund, however,assets within a pension trust fund are recorded as a restricted asset on the Comprehensive Annual Financial Report (CAFR), and not netted directly against the net pension liability; and WHEREAS,the City could consider contributing additional funds to CalPERS to accelerate amortization of existing pension liabilities. NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco does hereby authorize the City Manager to sign the City’s response to the San Mateo County Grand Jury Report “Soaring City Pension Costs - Time to Make Difficult Decisions.” City of South San Francisco Printed on 9/28/2018Page 1 of 2 powered by Legistar™ File #:18-877 Agenda Date:9/26/2018 Version:1 Item #:11a. ***** City of South San Francisco Printed on 9/28/2018Page 2 of 2 powered by Legistar™ DRAFT CITY COUNCIL 2018 EXHIBIT A PO BOX 711 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA 94083 September 27, 2018 Hon. V. Raymond Swope Judge of the Superior Court c/o Charlene Kresevich Hall of Justice 400 County Center; 2nd Floor Redwood City, CA 94063-1655 Dear Hon V. Raymond Swope LIZA NORMANDY, MAYOR KARYL MATSUMOTO, MAYOR PRO TEMPORE MARK ADDIEGO, COUNCILMEMBER RICHARD A. GARBARINO, COUNCILMEMBER PRADEEP GUPTA, PH.D.,COUNCILMEMBER MIKE FUTRELL, CITY MANAGER On September 22, 2018, the City Council of the City of South San Francisco (“City”) approved the response contained in this letter to the San Mateo County Grand Jury Report “Soaring City Pension Costs –Time for Hard Choices” dated July 17, 2018. Response to Findings The City agrees with Findings F1, F2, F3, F4, F5, F6, F8, F9 and F11. The findings are accurate, and reflect information that is included in publicly available documents, including the City of South San Francisco’s Comprehensive Annual Financial Statement (CAFR) and annual actuarial valuations from the California Public Employees’ Retirement System (CalPERS). The City disagrees partially with Finding F7. While Finding F7 is mathematically accurate, comparing annual pension contributions relative to General Fund total expenditures is not consistent with the City’s method for allocating employee costs, which include the cost of pension contributions. Employee costs are allocated based on the scope of each employee’s job duties. For example, the costs associated with a Laboratory Chemist from the City’s Water Quality Control Plant are fully allocated to the Sewer Enterprise Fund. As such, of the $92 million in total appropriations for payroll in the Fiscal Year (FY) 2018-19 Adopted Budget, $80 million are allocated to the General Fund, $9 million to the Sewer Enterprise Fund, and the remaining $3 million to other operating funds. The City disagrees partially with Finding F10. Based on independent actuarial analysis estimates, by 2024-25, a 6.0 percent investment juxtaposed against a 7.0 percent discount rate with the shorter amortization period, pension contributions are projected to increase by 57 percent, rather than 100 percent over the same period. At a cost of $33 million, pension contributions are projected to reach their apex in FY 2032-33, a 96% increase compared to the current cost. DRAFT The City disagrees partially with Finding F12. The City has utilized a long-term financial forecast to support its decision-making processes since 2013, and expanded the forecast to a 10-year time horizon in 2017. However, given the sensitivity of labor negotiations, the model has been kept confidential. The City is amenable to establishing a pension funding strategy and policy to achieve funding targets, and committing to appropriating funds based on availability and priority. The City is also amenable to implementing processes to monitor the City’s pension funding efforts, and establishing alternative financial strategies. While the City agrees with Finding F13, past, present, and future pension contribution costs are available on publicly available documents. The City’s Comprehensive Annual Financial Report (CAFR), available at http://www.ssf.net/departments/finance/financial-reports/comprehensive-annual- financial-reports-cafr, discloses pertinent pension plan information in Note 7 and the Required Supplemental Information section, including employer pension contributions and net pension liabilities. The actuarial valuation for any participating entity is available on CalPERS’ website at https://www.calpers.ca.gov/page/employers/actuarial-services/employer- contributions/public-agency-actuarial-valuation-reports. The actuarial report provides projected pension contribution rates and sensitivity analysis. Response to Recommendations All Grand Jury recommendations will be timely implemented, specifically a public meeting will be held, engaging and informing residents; all available options will be evaluated; and a long-term plan to address rising pension costs will be developed. All staff reports and supporting information will be published in a highly visible and prominent area on the City’s website. Sincerely, Mike Futrell City Manager City of South San Francisco City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-708 Agenda Date:9/26/2018 Version:1 Item #:12. Report regarding resolution approving the acceptance of grant funds from the Habitat Conservation Fund Program in the amount of $9,250 from the Wildlife Area Activities Category,and amending the Parks and Recreation Department’s Fiscal Year 2018-19 Operating Budget by $18,500 pursuant to budget amendment #19.006.(Sharon Ranals, Parks and Recreation Director) RECOMMENDATION It is recommended that the City Council adopt a resolution approving the acceptance of grant funds from the Habitat Conservation Fund Program in the amounts of $9,250 from the Wildlife Area Activities Category,and amending the Parks and Recreation Department’s Fiscal Year 2018-19 Operating Budget by $18,500 pursuant to budget amendment #19.006. BACKGROUND/DISCUSSION The State of California enacted the California Wildlife Protection Act of 1990 provides funds to the State of California for grants to local agencies to acquire,enhance,restore or develop facilities for public recreation and fish and wildlife habitat protection purposes.The State Department of Parks and Recreation (State)has been delegated the responsibility for the administration of the Habitat Conservation Fund (HCF)Program,setting up the necessary procedures governing project applications under the HCF Program. The HCF allocates approximately $2 million each year to cities,counties,and districts.The program requires a 50 percent match.Eligible projects include:Nature interpretation programs to bring urban residents into park and wildlife areas,protection of various plant and animal species,and acquisition and development of wildlife corridors and trails. Procedures established by the State require applicants to certify by resolution the approval of applications before submission.At the October 25,2017 City Council meeting,Council approved two applications for grant funds from the HCF Program: 1.Trails Project (Status - NOT GRANTED) Amount Requested: $100,000 This project proposed to restore 1.87 miles of the most heavily used trails in Sign Hill Park by clearing brush to provide a fire break,removing invasive species along existing trails,trail grading,and installing header boards to hold in surfacing materials.This project also proposed the installation of seating and interpretive signage at key points such as vistas,and along the flight path of the endangered Mission Blue Butterfly so that individuals of any ability can learn to appreciate their natural City of South San Francisco Printed on 9/21/2018Page 1 of 2 powered by Legistar™ File #:18-708 Agenda Date:9/26/2018 Version:1 Item #:12. surroundings. While the application for this project was not successful,staff will maintain the vision of this project until the next funding opportunity arises. 2.Wildlife Areas Project (Status - GRANTED) Amount Requested: $9,250 These grant funds will be used to partially fund an overnight youth wildlife camp at San Bruno Mountain State Park.The project will include a hiking/camping overnight getaway to get disadvantaged youth from urban areas in the 5th -7th grade aged range in touch with nature and the outdoors,as well as getting much needed physical exercise,through a series of 3 weekend classes that build to an overnight educational excursion in the state park.The classes will include hands on outdoor education activities, designed to encourage an interest and appreciation for wildlife areas. FISCAL IMPACT The total budget for the Wildlife Areas Project is $18,500.HCF requires matching funds of 50 percent.With $9,250 in grant funds,staff is requesting that the Parks and Recreation Department Fiscal Year 2018-19 Operating Budget be amended to include an additional $9,250 from the General Fund,reflecting a total budget adjustment of $18,500. CONCLUSION It is recommended that the City Council adopt a resolution approving the acceptance of grant funds from the Habitat Conservation Fund in the amount of $9,250 for an overnight youth camp at San Bruno Mountain State Park,and amend the Parks and Recreation Department’s Fiscal Year 2018-19 Operating Budget by $18,500 pursuant to budget amendment #19.006. City of South San Francisco Printed on 9/21/2018Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-709 Agenda Date:9/26/2018 Version:1 Item #:12a. Resolution approving the acceptance of grant funds from the Habitat Conservation Fund Program in the amount of $9,250 from the Wildlife Area Activities Category,and amending the Parks and Recreation Department’s Fiscal Year 2018-19 Operating Budget by $18,500 pursuant to budget amendment #19.006. WHEREAS,the people of the State of California have enacted the California Wildlife Protection Act of 1990, which provides funds to the State of California for grants to local agencies to acquire,enhance,restore or develop facilities for public recreation and fish and wildlife habitat protection purposes; and WHEREAS,the State Department of Parks and Recreation (State)has been delegated the responsibility for the administration of the Habitat Conservation Fund (HCF)Program,setting up necessary procedures governing project application under the HCF Program; and WHEREAS,the City of South San Francisco (“City”)has applied for and has been awarded $9,250 by the HCF under the Wildlife Areas Project category to partially fund an overnight youth wildlife camp at San Bruno Mountain State Park; and WHEREAS, the HCF grant requires 50 percent of matching funds from the City amounting to $9,250. NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco hereby accepts $9,250 in grant funding from the State and authorizes the City Manager to execute the documents necessary to accept the grant funding and take any other actions necessary to carry out the intent of this resolution on behalf of the City Council, subject to approval as to form by the City Attorney. BE IT FURTHER RESOLVED,that the City Council amends the Parks and Recreation Department’s Fiscal Year 2018-19 Operating Budget by $18,500 pursuant to budget amendment number #19.006,reflecting $9,250 received from HCF grant funding and $9,250 from the City’s General Fund. ***** City of South San Francisco Printed on 9/28/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-712 Agenda Date:9/26/2018 Version:1 Item #:13. Report regarding resolution approving and authorizing the City Manager to sign the response to San Mateo County Grand Jury report:“Cooperative Purchasing -A Roadmap to More Effective City Procurement”. (Richard Lee, Director of Finance) RECOMMENDATION It is recommended that the City Council adopt a resolution approving and authorizing the City Manager to sign the response to San Mateo County Grand Jury report:“Cooperative Purchasing -A Roadmap to More Effective City Procurement”. BACKGROUND/DISCUSSION On July 19,2018,the San Mateo County Grand Jury issued a report titled “Cooperative Purchasing -A Roadmap to More Effective City Procurement”,included as Attachment 1.Staff has reviewed the report, including its findings and recommendations,and prepared the response for the City of South San Francisco (“City”), included as Exhibit A to the accompanying resolution. The report findings generally provide an accurate depiction of the City’s procurement practices.There are two recommendations,Recommendations R1 and R2,that are directed at cities within San Mateo County to improve their purchasing and procurement practices.Recommendation R1 would direct cities to increase the use of cooperative purchasing practices,including “piggyback”contracts and joint procurement agreements. Recommendation R2 would direct cities to share with each other and with the County Procurement Division their procurement needs in order to identify opportunities for cooperative procurements between these municipalities. Notably,there are a few City practices that are in alignment with the Grand Jury’s call to increase utilization of “piggybacking”cooperative purchasing.The City regularly uses state-negotiated contracts for office supplies, phone service,computer equipment,and vehicle purchases.While a majority of the recommendations are directed towards the County of San Mateo’s Procurement Division,Recommendation R1 has already been addressed by the City,and Recommendation R2 can be implemented fairly easily.With regards to Recommendation R1,the City recently purchased licenses to a powerful procurement comparison software that allows each user to search procurements from thousands of public entities throughout the United States. Partnered with the City’s piggybacking provision contained within its purchasing policy and South San Francisco Municipal Code 4.4.40, the City is positioned to generate a considerable amount of savings. Regarding Recommendation R2,the San Mateo Finance Officers Group (SAMFOG),which meets on a bimonthly basis,can add a recurring agenda item to discuss procurement needs to identify opportunities for cooperative procurements. FISCAL IMPACT None. City of South San Francisco Printed on 9/20/2018Page 1 of 2 powered by Legistar™ File #:18-712 Agenda Date:9/26/2018 Version:1 Item #:13. CONCLUSION Approval of the response to the San Mateo Grand Jury report affirms that the City of South San Francisco is committed to adding value and garnering greater efficiency in its procurement efforts. Attachment:San Mateo County Grand Jury Report “Cooperative Purchasing -A Roadmap to More Effective City Procurement” City of South San Francisco Printed on 9/20/2018Page 2 of 2 powered by Legistar™ 2017-2018 San Mateo County Civil Grand Jury 1 COOPERATIVE PURCHASING—A ROADMAP TO MORE EFFECTIVE CITY PROCUREMENT Issue | Summary | Glossary | Background | Discussion | Findings Recommendations | Requests for Responses | Methodology | Bibliography | Responses ISSUE How can cities in San Mateo County save taxpayer money by adopting cooperative procurement practices? SUMMARY The 20 cities in San Mateo County (the Cities) spent $425 million and the County of San Mateo (the County) $300 million on goods and services in FY 2015-16, for an estimated total in purchasing of $725 million.12 The Cities and the County could spend millions less – without increasing costs – by increasing the use of “piggyback3” contracts and cooperative purchasing agreements. The Cities and the County could save the most money, an estimated annual savings between 5 and 15 percent, through cooperatively purchasing goods and services with the County’s Procurement Division for a total annual savings between $35 million and $108 million. All of the Cities procure goods and services through decentralized purchasing systems in which individual municipal departments are authorized to identify the need for a good or service, conduct the appropriate selection process, and place a purchase order, under the supervision of their city’s finance department and or city manager. Decentralized purchasing systems successfully allow cities to procure goods and services at fair market prices while minimizing labor costs associated with centralized procurement departments by assigning purchasing functions to individual departments. However, the Grand Jury found that while city employees receive training on municipal purchasing guidelines and policies, many employees who conduct purchasing operations as a secondary responsibility are not trained and or instructed to negotiate optimum prices by leveraging market power.4 Further, in exchange for minimizing labor and related costs, the Cities have forfeited the benefits associated with a centralized purchasing system. Under a centralized purchasing system, trained and experienced purchasing agents, located in a central purchasing department, are responsible 1 California State Controller’s Office, Schedule of Total City Expenditures by Major Object Classification, Accessed On: October 2017 https://bythenumbers.sco.ca.gov/City-Expenditures/Schedule-of-Total-City-Expenditures-by- Major-Objec/q6pc-n5bp. 2 San Mateo County Civil Grand Jury, “San Mateo County Procurement Division Recommendations Follow -Up” Superior Court of California San Mateo County, June 21, 2017: 2. <http://www.sanmateocourt.org/documents/grand_jury/2016/procurement.pdf> 3 A form of intergovernmental cooperative purchasing in which an entity will be extended the same p ricing and terms of a contract entered by another entity. Generally, the originating entity will competitively award a contract that will include language allowing for other entities to utilize the contract, which may be to their advantage in terms of pricing, thereby gaining economies of scale that they would otherwise not receive if they competed on their own. 4 Clifford McCue, Jack Pitzer “Centralized vs. Decentralized Purchasing: Current Trends in Governmental Procurement Practices” Journal of Public Budgeting, Accounting, and Financial Management (Vol 12, Issue: 3) 2000: 400. https://www.emeraldinsight.com/doi/pdfplus/10.1108/JPBAFM -12-03-2000-B003. ATTACHMENT 1 2017-2018 San Mateo County Civil Grand Jury 2 for all purchasing functions. Due to centralized purchasing authority, purchasing agents are better able to identify goods and services with a high potential for savings and then leverage their experience, greater knowledge of markets, and their municipality’s market power to negotiate better terms, including lower prices, with vendors. This report identifies ways the Cities can attain the cost-saving benefits of centralized purchasing systems while retaining the benefits of a decentralized purchasing system. Three approaches can improve decentralized purchasing systems without increasing staffing and operations costs: (1) Increase the use of “piggybacking” to access beneficial terms of contracts previously entered by public entities. (2) Utilize cooperative purchasing agreements to allow Cities to obtain volume discounts among themselves, even without County participation. (3) Collaborate with the County’s Procurement Division to negotiate lower prices for common goods and services. If these changes resulted in even a conservative five percent average savings on procurements, the County could save more than $15 million and the Cities collectively could save more than $21.25 million per year. GLOSSARY and ABBREVIATIONS California Association of Public Procurement Officials (the CAPPO): The CAPPO is a nonprofit organization dedicated to maintaining the highest standards of professional behavior and ethical conduct in public purchasing. As the oldest public procurement association in the United States, CAPPO works to provide tools to buyers in the public sector that will help them develop their professional skills for their benefit and the benefit of their agencies. California Department of General Services (the DGS or General Services?): The DGS serves as business manager for the state of California. The DGS provides a variety of services to state agencies, including procurement and acquisition solutions. Centralized Procurement: Centralized procurement means that a single department controls and manages the purchasing for the whole organization. Ideally a manager oversees the purchasing department regarding what materials need to be purchased and in what quantity.5 City-County Procurement Cooperation (C-CPC): C-CPC is a term for practices, if adopted, that will allow Cities and the County to save millions of dollars on procurement each year. Cooperative Purchasing Agreements: A type of procurement in which multiple purchasing entities collaborate in purchasing to increase their market power, thereby gaining access to lower prices. 5 Effia Soft, “Centralized vs. Decentralized Purchasing” Effiasoft.com Accessed on May 20, 2018 https://effiasoft.com/centralized-vs-decentralized-purchasing. 2017-2018 San Mateo County Civil Grand Jury 3 All 20 cities in San Mateo County (the Cities): the Town of Atherton, the City of Belmont, the City of Brisbane, the City of Burlingame, the Town of Colma, the City of Daly City, the City of East Palo Alto, the City of Foster City, the City of Half Moon Bay, the Town of Hillsborough, the City of Menlo Park, the City of Millbrae, the City of Pacifica, the Town of Portola Valley, the City of Redwood City, the City of San Bruno, the City of San Carlos, the City of San Mateo, the City of South San Francisco, and the Town of Woodside. Decentralized Procurement: Purchasing control and authority is granted to local branches or departments. They have the authority to purchase items necessary as per their requirements.6 Piggyback Contracts: A form of intergovernmental cooperative purchasing in which an entity will be extended the same pricing and terms of a contract entered by another entity. Generally, the originating entity will competitively award a contract that will include language allowing for other entities to utilize the contract, which may be to their advantage in terms of pricing, thereby gaining economies of scale that they would otherwise not receive if they competed on their own.7 San Mateo County Finance Officers Group (the SAMFOG): The SAMFOG is an informal professional group for municipal finance officers in San Mateo County to share information and resources. County of San Mateo Procurement Division (the PD): The PD provides procurement services to all county departments and acts as a regulatory mechanism to help County departments obtain maximum value for each dollar spent while maintaining compliance with all relevant county, state and federal laws, ordinances, and policies. Volume Discount: A Volume Discount is an incentive offered to a buyer that results in a decreased cost per unit of goods or materials when purchased in greater numbers. Sellers often offer a volume discount to entice buyers to purchase in larger quantities. The seller can move more goods or materials, and the buyer receives a more favorable price for the goods.8 BACKGROUND The 20 cities in San Mateo County together purchased approximately $425 million of in goods and services in FY 2015-16, representing an estimated 35 percent of their General Fund spending.9,10 In a time defined by rising labor costs, exploding pension program payments, and other municipal budget constraints, spending on goods and services still represents a significant portion of a city’s discretionary spending.11 6 Effia Soft, “Centralized vs. Decentralized Purchasing” Effiasoft.com 7 Principles and Practices of Public Procurement “Use of Cooperative Contracts for Public Procurement” California Association of Public Procurement Officials Accessed on August 28, 2017: 1. http://c.ymcdn.com/sites/www.cappo.org/resource/collection/FBBFC7BF-369D-43DE-B609- 3D41BA05D10E/Cooperative%20Contracts.pdf. 8 “Quantity Discount” Investopedia, Accessed on: May 20, 2018 https://www.investopedia.com/terms/q/quantity- discount.asp#ixzz5F2r4B9Sp. 9 California State Controller’s Office, Schedule of Total City Expenditures by Major Object Classification (2017). 10 ibid. 11 Interviews with City Finance Officials. 2017-2018 San Mateo County Civil Grand Jury 4 While every city in the County operates its own purchasing system, all cities share common practices and operations.12 These commonalities stem from shared state and federal regulatory requirements, adherence to generally accepted best practices, and similar economic pressures.13 By identifying systemic purchasing challenges and common solutions, cities have the potential to achieve consequential cost savings. In addition to benefiting from cost savings, the effective and efficient purchasing of goods and services is essential to the proper function of municipal government. When purchasing fails to achieve the highest standard of excellence, the quality and variety of services fall and the potential for wasting taxpayer money increases. Advantages of Decentralized Procurement Practices In decentralized purchasing systems, individual departments are responsible for: (a) identifying the need for a good or service, (b) conducting the appropriate vendor selection process, and (c) placing a purchase order for the good or negotiating a contract for services.14 In contrast, under a centralized purchasing system, individual departments still identify the need for a good or service, but a central purchasing department is responsible for conducting the appropriate selection process, negotiating with the vendor, and purchasing the good or service.15 Although these processes might appear identical—a city entity identifies goods and services for purchase, competitively bids the product, and purchases it from a vendor—fundamental operational differences and outcomes exist between these two systems. Historically, limited supply chains and less competitive markets for goods and services required municipalities to rely on specialized purchasing agents for competitive purchasing.16 These purchasing agents, working in central purchasing departments, could negotiate directly with producers to secure lower prices for goods and services.17 Specialized purchasing roles also gave agents substantial expertise and experience in their field that today’s employees cannot accumulate.18 However, as the market for goods and services has grown more competitive (a result of globalization, the internet, lower transportation costs, and gains to economic productivity) prices have fallen, leading many to believe that the need for specialized purchasing agents has 12 Interviews with City Finance Officials, Grand Jury Review of City Procurement Documents. 13 Interviews with City Finance Officials. 14 Clifford McCue, Jack Pitzer “Centralized vs. Decentralized Purchasing: Current Trends in Governmental Procurement Practices” (2000): 4. 15 ibid. 16 “Centralized vs. Decentralized Purchasing: Current Trends in Governmental Procurement Practices” Journal of Public Budgeting, Accounting, and Financial Management (2000). 17Money Matters “Centralized & Decentralized Purchase: Suitability, Merits and Detriments” Accountlearning.com Accessed on March 28, 2018. https://accountlearning.com/centralized-decentralized-purchase-suitability-merits- demerits-differences. 18 Ibid. 2017-2018 San Mateo County Civil Grand Jury 5 diminished.19,20 Additionally, the high cost of labor in the San Francisco Bay Area, coupled with the economic contractions in 2002 and 2008, has placed pressure on public entities to reduce costs by consolidating positions.21 Under these pressures, decentralized purchasing became the norm throughout the San Mateo County and California.22 Common Practices in Decentralized Purchasing Systems In its investigation, the Grand Jury learned that the cities in San Mateo County generally regulate their decentralized purchasing systems through three primary mechanisms--graduated purchasing authority levels, competitive bidding requirements, and budget controls. All of the Cities delegate purchasing authority to different levels of city employees based on the size of the purchase; higher ranking employees must approve costlier purchases.23 While the exact purchasing authority levels vary between cities, Figure 1 is an example of the allocation of purchasing authority levels for the City of San Mateo. This graduated purchasing authority system, which is like those in other cities, gives individual departments the power to make smaller purchases quickly at market prices, while subjecting larger purchases to increasing scrutiny. FIGURE 1 Award Authorization and Competitive Bidding Requirement Levels for the City of San Mateo24 Purchase Levels Authority Required to Approve Purchase Competitive Bidding Requirement Purchases over $100,000 City Council Formal Bid Procedure (RFP) Purchases between $50,000 and $99,999 City Manager Open Market Procedures Purchases between $25,000 and $49,999 Department Head Open Market Procedures Purchase under $25,000 Division Manager Open Market Procedures The Cities also regulate decentralized purchasing systems through competitive bidding requirements.25 These requirements are meant to ensure fair market prices by requiring purchasers to obtain multiple vendor bids and to select the lowest responsible bidder.26 As with purchasing authority, competitive bidding requirements follow a graduated approval system 19 Michael Sposi, “The Effect of Globalization of Market Structure, Industry Evolution and Pricing” Federal Reserve Bank of Dallas, Globalization and Monetary Policy Institute 2013 Annual Report, May 31, 2013: 24. https://www.dallasfed.org/~/media/documents/institute/annual/2013/annual13f.pdf 20 Clifford McCue, Jack Pitzer “Centralized vs. Decentralized Purchasing: Current Trends in Governmental Procurement Practices” (2000) 400. 21 Ibid. 22 Interview with City Finance Officials. 23Grand Jury Review of City Procurement Documents. 24Grand Jury Review of City Procurement Documents. 25Grand Jury Review of City Procurement Documents. 26 Qualified bidder with the lowest or best bid price, and whose business and financial capabilities, past performance, and reputation meet the required standards. 2017-2018 San Mateo County Civil Grand Jury 6 based on size of purchase. For smaller purchases of commodity items where competition already exists between vendors (e.g., paper products and other office supplies), the Cities allow for purchases on the open market without multiple bids. However, for larger purchases where generally less competition exists between vendors, stricter bidding requirements apply. Competitive bidding requirements range from requiring informal bids and formal bids to issuing a Request for Proposals. Departmental budget controls are another regulatory check on decentralized purchase systems.27 Budget controls require city finance officials to confirm that any proposed purchase fits within a department’s budget prior to authorizing a purchase order. As a result of these controls, a department proposing to make a substantial purchase is incentivized to seek the lowest responsible price.28 DISCUSSION The Limitations of Decentralized Purchasing Systems While the Cities’ decentralized purchasing systems have technically achieved the goals of obtaining fair market prices while minimizing labor costs, such decentralized purchasing approaches are not designed to use the Cities’ collective marketing power, together with that of the County,29 to obtain optimum prices and terms. In modern supply chains, few goods and services have fixed prices. Rather, prices are generally negotiable, with outcomes contingent on factors like the quantity being purchased, the potential for future sales, the present level of market demand, the vendor’s available stock, and profit margins.30 Often, the given market price—the price quoted on a store shelf or business’ website—does not represent this variance.31 In the private sector, dedicated buyers with deep expertise and experience take advantage of that knowledge and their firms’ market power to negotiate lower prices.32 Depending on the particular good, buyers can often negotiate prices 30 to 40 percent below “market.” For some goods, like software, savings upwards of 50 percent are attainable.33 27 Grand Jury Review of City Procurement Documents. 28 Interviews with City Finance Officials. 29 Market Power represents a firm’s or, in this case, city’s capacity to negotiate prices better than the going market price. Market power can be exerted through negotiation, buying in bulk, buying “higher” (e.g. buying from a wholesaler) in the supply chain, etc. 30 Henry Hazlitt, “How Should Prices Be Determined” Foundation for Economic Education, February 1, 1967. Accessed On: June 6, 2012 https://fee.org/articles/how-should-prices-be-determined. 31 Krishna, Aradhna, Richard Briesch, Donald Lehmann, and Hong Yuan (2002), “A Meta -Analysis of the Impact of Price Presentation on Perceived Savings.” Journal of Retailing 78 (2), 101 –18. https://www8.gsb.columbia.edu/researcharchive/articles/969. 32 Severin Borenstein “Understanding Competitive Pricing and Market Power in Wholesale Electricity Markets” The Electricity Journal July 2000: 50. <http://faculty.haas.berkeley.edu/borenste/mba212/Elecjo00mktPower.pdf> 33 Seeking Alpha Editorial Board “Chart: Software Companies - Gross Profit Margins” seekingalpha.com May 7, 2006. Accessed On: June 12, 2018 https://seekingalpha.com/article/10166-chart-software-companies-gross-profit- margins. 2017-2018 San Mateo County Civil Grand Jury 7 The Cities’ shift from centralized to decentralized purchasing systems evolved over time on a local basis, with individual cities responding to the immediate needs and available resources. Regardless of a particular city’s path towards decentralized purchasing, cities lost the expertise necessary to negotiate these kinds of savings. Apart from some employees in public works and engineering departments, most purchasing activities are a secondary responsibility for the employees responsible for their department’s procurement function.34 While these employees all receive training on municipal purchasing guidelines and policies, they often lack training and familiarity with advanced procurement practices.35 For many cities, training employees in purchasing practices found in a centralized purchasing department is prohibitively expensive.36 This loss of purchasing expertise has real financial consequences. For instance, most of the Cities’ employees are unaware of and untrained in the use of cooperative purchasing databases.37 Cooperative purchasing databases, like the California Department of General Services’ (DGS’s) State Contracts Index Listing and State Leveraged Procurement Agreements, are databases of pre-negotiated contracts for common goods and services, for prices lower than market.38 By not piggybacking on these pre-negotiated contracts, the Cities miss the opportunity to purchase a wide range of products at lower prices. Employees in decentralized systems often do not identify commonly purchased goods that other departments are also buying and so miss the opportunity to negotiate lower costs which could be obtained by purchasing the items in bulk for multiple departments.39 While finance officers do track purchases on a departmental level, only the City of San Mateo has a staff position dedicated to tracking the cost, type, quantity, and frequency with which all city departments are purchasing products.40 In cities that fail to track products purchased across multiple departments, finance officers cannot identify goods (like office supplies, furniture, automobile parts) and services (like translators), that could be purchased in bulk through a volume discount contract. In effect, each individual department pays for goods and services at a price that is higher than could be achieved through purchasing at the municipal level.41 Conversely, in centralized purchasing systems a dedicated staff of purchasing agents specializes in securing the lowest prices for goods and services.42 Purchasing agents have the training, resources, time, and specialization to identify the best vendors and negotiate below-market prices through leveraging their city’s market power.43 Purchasing agents have the authority and capacity to unlock low prices by buying in bulk, authorizing long term contracts, and negotiating volume discounts. Centralized purchasing agents also have acquired specific purchasing 34 Interviews with City Finance Officials. 35 Interviews with City Finance Officials. 36 Interviews with City Finance Officials. 37 Interviews with Finance Officials. 38 Procurement Division “Leveraged Procurement Agreements (LPAs) California Department of General Services Accessed on April 5, 2018. <http://www.dgs.ca.gov/pd/Programs/Leveraged.aspx> 39 Money Matters “Centralized & Decentralized Purchase: Suitability, Merits and Detriments” 2018. 40 Interview with City Finance Officials. 41 Ibid. 42 Clifford McCue, Jack Pitzer “Centralized vs. Decentralized Purchasing: Current Trends in Governmental Procurement Practices” 2000. 43 Ibid. 2017-2018 San Mateo County Civil Grand Jury 8 knowledge over the course of their careers, knowledge which enables them to access lower prices through hidden markets.44 Cooperative Purchasing Solutions In the course of its investigation, the Grand Jury learned that each City could adopt three practices which would improve its decentralized purchasing system without increasing staffing and operations costs: (1) utilizing piggybacking to access pre-negotiated contracts, (2) collaborating with other Cities to purchase goods through the use of cooperative purchasing agreements, and (3) collaborating with San Mateo County’s Procurement Division to negotiate lower prices for common goods and services. 1. Utilize Piggyback Contracts Piggybacking on pre-negotiated contracts with favorable pricing allows Cities to benefit from those terms without changing their purchasing practices. Per the California Association of Public Procurement Officials, Piggybacking (a “Piggyback Cooperative”) is: A form of intergovernmental cooperative purchasing in which an entity will be extended the same pricing and terms of a contract entered by another entity. Generally, the originating entity will competitively award a contract that will include language allowing for other entities to utilize the contract, which may be to their advantage in terms of pricing, thereby gaining economies of scale that they would otherwise not receive if they competed on their own (Emphasis added).45 Piggyback contracts are widely used by public entities in California and nationwide.46 Piggyback contracts can be to the benefit of both the vendor and the public entity that negotiated the original cost (the originating entity), as well as any other public entities that ultimately utilize the contract (piggybacking entities). Benefits can accrue to the vendor by increasing the potential volume of sales under the agreement, which results in increased product sales. The Grand Jury’s investigation revealed that although some Cities have used piggyback contracts in the past, the practice is currently underutilized.47 In fact, the Grand Jury found during its interviews that City employees at the departmental level were generally unaware of: (a) the existence of piggyback contracts, (b) the possible cost savings from piggyback contracts, (c) the numerous piggyback contract databases, and (d) how to use a piggyback contract in a decentralized purchasing system. When asked why they did not make greater use of piggyback contracts, officials from seven of the Cities expressed concerns about compatibility with their City’s legal 44 Interview with City Finance Officials. 45Principles and Practices of Public Procurement “Use of Cooperative Contracts for Public Procurement” California Association of Public Procurement Officials (2017) 1. 46Interviews with City Finance Officials. 47Interviews with City Finance Officials. 2017-2018 San Mateo County Civil Grand Jury 9 requirements.48 They also expressed concern that the time necessary to train department- level employees to use piggyback contracts and, subsequently, the time spent selecting the best contract, would be costlier than potential savings. Those officials were also concerned that existing piggyback contracts would not reflect their city’s purchasing policies, such as environmental and local purchasing preference requirements.49 While these concerns are legitimate, approaches to piggyback contracting, such as the one illustrated below, are available: The City’s Finance Office identifies the most commonly purchased goods and services across all city departments. The City Finance Office, in conjunction with city attorneys, searches piggyback contract databases for compatible contracts on the most common goods and services and evaluates whether such contracts would follow the city’s purchase preference requirements. Once compatible contracts have been identified and confirmed with vendors, the City Finance Office disseminates an internal list of preferred vendors for the specific goods and services covered by these contracts, in accordance with the municipality’s preferred vendor requirements. Individual city departments conduct normal purchasing activities, using the list of preferred vendors when applicable. 2. Utilize Cooperative Purchasing Agreements The Cities generally provide comparable services to residents using similar resources and procedures.50 Accordingly, they often purchase nearly identical goods and services. Yet, by purchasing common goods and services individually, each city can only leverage its own market power to negotiate lower prices. Were the Cities to collaborate with one another in their purchases of common goods and services, they would increase their purchasing power and facilitate the negotiation of lower prices. Cooperative purchasing agreements, in which multiple public entities collaborate in purchasing to increase their market power, are not new to the Cities.51 They have successfully achieved significant cost savings in the past through cooperative purchasing agreements. Most notably, in 2015, all of the Cities, together with the County, jointly entered into a cooperative purchasing agreement with Turbo Data Systems Inc. for common parking ticket citation and adjudication services. In this arrangement, the Cities paid the County to hire a consultant, issue a request for proposal (an RFP), and evaluate the responses with a committee consisting of representatives from Belmont, Burlingame, Daly City, San Mateo, and South San Francisco.52 This committee, on behalf of all member agencies, selected Turbo Data Systems as the best candidate. 48 Interviews with City Finance Officials. 49 Interviews with City Finance Officials. 50 Interviews with City Finance Officials. 51 Interviews with City Finance Officials. 52 Grand Jury Review of City Procurement Documents. 2017-2018 San Mateo County Civil Grand Jury 10 By utilizing a collaborative purchase agreement when selecting Turbo Data systems, Cities realized an estimated savings approaching 35 to 40 percent of original costs.53 Before negotiations, Turbo Data charged processing fees of $1.28 for electronic citations and $1.35 for hand-written citations. These rates were lowered to $0.50 and $0.80 for electronic and hand- written citations, respectively.54 Based on the number of citations issued, the County saved approximately $17,000 per year under the new agreement. A city’s approximate savings varied with the number of citations but were consistent with the County’s rates. For smaller cities which lacked the market power to achieve the pre-contract rates achieved by the County, savings exceeded 45 percent.55 Moreover, by paying a nominal sum to San Mateo County to conduct the RFP process, cities were able to produce a superior RFP at a significantly lower cost than had each city issued its own request.56 The Turbo Data Systems cooperative purchasing agreement serves as model of what these agreements can achieve. When asked why they did not make greater use of cooperative purchasing agreements, City officials responded that they had difficulty identifying goods and services to collaboratively purchase. They attributed this difficulty to the limited communication channels among city finance officers and the deprioritization of the purchasing function in finance departments.57 For instance, while the San Mateo County Finance Officer Group (SAMFOG), which consists of all City finance officials, meets on a bimonthly basis, procurement is rarely discussed. Despite these difficulties, city officials recognized that cooperative purchasing agreements have earned Cities significant savings. To help expand the use of cooperative purchasing agreements, the Grand Jury asked city officials to identify commonalities between goods and services that could be purchased cooperatively. Finance officials reported that goods and services best suited for cooperative purchase are: Common: products which are purchased by multiple or all Cities Homogeneous Products that are substantially similar Discrete: Products that are measurable in individual units such that they can be individually purchased Foreseeable: Products whose purchase can be predicted, allowing the Cities time to negotiate and prepare a cooperative purchasing agreement 3. Collaborate with the County’s Purchasing Division The highest potential for cost savings, while maintaining the Cities’ decentralized purchasing systems, can be achieved through collaboration with the County of San Mateo (City-County 53 Grand Jury Review of City Procurement Documents. 54 Ibid. 55 Grand Jury Review of City Procurement Documents. 56 Interviews with City Finance Officials. 57 Interviews with City Finance Officials. 2017-2018 San Mateo County Civil Grand Jury 11 Procurement Cooperation or C-CPC). Unlike the Cities, the County maintains a hybrid centralized/decentralized purchasing system, which includes a dedicated procurement division. Under the County’s system, the County of San Mateo’s Procurement Division (PD) is generally responsible for purchases of goods that are greater than $5,000, while individual departments retain responsibility for smaller purchases.58 The PD employs a staff of specialized buyers to fulfill its purchasing functions. In FY 2015- 2016, the County spent more than $300 million on goods and services.59 Collaborating with the County’s Procurement Department (PD) provides a unique opportunity for C-CPC to maximize cost savings for all parties. As described above, specialized purchasing agents in centralized purchasing departments have the training, experience, and resources to identify superior vendors and negotiate lower prices using their entity’s market power. Were the Cities to collaborate with the PD in their purchases of common goods and services, they could increase their purchasing power and thereby facilitate even greater savings than from their own intercity cooperative purchasing agreements. This example demonstrates one way the Cities could collaborate with the PD: The PD coordinates with City finance officers to identify the common goods and services used by participating entities. The PD competitively negotiates and awards contracts for those goods and services that allow for the Cities to piggyback on the contract. During negotiations, PD purchasing agents implement volume-discounting, such that the participation of any of the Cities thereafter unlocks lower prices for all parties. Once the PD finalizes these contracts, City finance officers disseminate internal lists of preferred vendors under these agreements, in accordance with the Cities’ preferred vendor requirements, to their respective departments. To minimize impact on City employees, and thereby increase transition costs, authorized city employees should be able to buy goods and services in a method similar to their current systems. For instance, buyers would search the County Purchasing System for the desired goods, generate a purchase order through the system, and that pending order would be sent to the appropriate city purchasing authority for review and approval. Upon approval, the County Purchasing System executes the order, sending it to the vendor. The County Purchasing System also tallies the order for discounts, recording and reporting to the City the initial savings from negotiated prices and additional volume discounts. 58 Interview with County Finance Officials. 59 San Mateo County Civil Grand Jury, “San Mateo County Procurement Division Recommendations Follow-Up” (2017) 2. 2017-2018 San Mateo County Civil Grand Jury 12 The Cities and County can implement these processes, without substantially changing their existing procurement processes.60 City finance departments already create preferred vendor lists and disseminate them to departments. The PD’s purchasing agents already conduct negotiations with vendors to unlock volume-based discounts. Indeed, the increased cost savings are unlocked by combining preexisting and previously independent operations as to maximize the negotiating power of all parties involved. Given that the Cities and the County spend over $725 million per year, and assuming only a 1 percent average cost saving, for example, municipalities in San Mateo County would save upwards of $7 million. In a review of the federal government’s Strategic Sourcing,61 the Government Accountability Office found that, “when strategic sourcing was used, annual savings was along the lines of 5-20 percent.”62 While the mechanisms by which federal government’s Strategic Sourcing achieved savings is equivalent to C-CPC, Strategic Sourcing’s larger scale means C-CPC is unlikely to achieve 20 percent savings. The Grand Jury estimates that a 5-15 percent annual savings spread is achievable through C-CPC. When the 5-15 percent annual average savings spread is applied to C-CPC, projected savings are between $15 million and $45 million for the County and $21.25 million and $63.75 million for the Cities, for a total savings of $108.75 million. There is precedent for C-CPC within the County and throughout California. As previously discussed, the Cities and the County have already achieved significant savings through cooperatively purchased goods and services. Because of this cooperation, the Cities and the County are familiar with cooperative purchasing agreements and piggyback contracts. As such, C-CPC would not be introducing new purchasing methods, but rather be introducing a formal mechanism by which the Cities and County could expand and formalize the use of cooperative purchasing practices to achieve greater savings. Other counties and the State of California have successfully adopted similar C-CPC practices. For instance, in 1999 Los Angeles County created a cooperative purchasing program with the cities with its jurisdiction for the purchase of recycled paper goods.63 Under this program, cities could join Los Angeles County in purchasing recycled paper such that participating entities benefitted from greater purchasing power. Per the Los Angeles County Procurement Program website, 26 cities participate in the program, with the City of Los Angeles and County of Los Angeles alone saving $84,000 and $40,000 per year, respectively.64 Similarly, Alameda County uses cooperative purchasing with cities to achieve its Strategic Vision for environmental 60 Interviews with City Finance Officials. 61 Strategic Sourcing is the term for cooperative purchasing between federal agencies overseen by the Office of Federal Procurement Policy. 62 Charles Clark, “Government Doesn’t use Bulk-Purchasing Initiative Enough, Auditors Say” Government Executive October 4, 2014. Accessed On: May 15, 2018.<https://www.govexec.com/contracting/2012/10/government-doesnt-use-bulk-purchasing-initiative-enough- auditors-say/58590/> 63 Department of Public Works “Los Angeles County Procurement Programs” The County of Los Angeles Accessed on April 20, 2018 https://dpw.lacounty.gov/epd/awards/procurement.cfm. 64 Ibid. 2017-2018 San Mateo County Civil Grand Jury 13 sustainability and economic growth.65 Specifically, Alameda County invites public entities within its jurisdiction to piggyback on green contracts, in order to achieve lower prices, defray the higher costs associated with sustainable materials, and promote environmental sustainability among public agencies.66 To facilitate this C-CPC, Alameda County opens its Procurement Department and Contracts Team to support and facilitate local public agencies piggybacking on sustainable contracts.67 While both Los Angeles County and Alameda County leveraged cooperative purchasing to achieve environmental objectives, the success of these programs underscores the effectiveness of City-County Procurement Cooperation for achieving cost savings. However, there are barriers to collaboration between the Cities and the County. The Grand Jury has already issued three reports (in 2004, 2015, and 2017), identifying dysfunction within the County’s procurement system. Among other issues, the 2016-2017 Grand Jury identified that the PD’s subordination to a Deputy Director of Human Resources, is inconsistent with best practices set forth by the Institute for Public Procurement and the California Association of Public Procurement Officials and inconsistent with the operational practices of 45 California Counties.68 The 2016-2017 Civil Grand Jury concluded that the Procurement Division manager lacked sufficient independent authority to implement the changes necessary to improve County procurement. Moreover, as of the date of this writing, the County’s Procurement Division manager position is vacant with the County’s most recent director having left for employment with another public entity. While the PD is not functioning well now, the County can take steps to improve the PD’s function. Revising the County’s purchasing process to allow effective cooperation between the Cities and the County will not only grant access to aforementioned savings, but also lower current operational costs. To that end, the Grand Jury has identified nine checkpoints along the pathway toward City-County Procurement Cooperation. The first three checkpoints are steps the County can take to prepare for C-CPC. The remaining checkpoints are actions the PD needs to take in order to implement C-CPC. 65 “Strategic Vision 2026” The County of Alameda, Accessed on April 20, 2018 http://www.acgov.org/government/strategic.htm. 66 “Piggybacking” The County of Alameda, Accessed on: April 20, 2018 https://www.acgov.org/sustain/what/purchasing/bids/piggyback.htm. 67 Stop Waste “Piggybacking for Green Purchasing” The County of Alameda, Accessed on: April 20, 2018 https://www.acgov.org/sustain/documents/PiggybackingResources.pdf. 68 San Mateo County Civil Grand Jury, “San Mateo County Procurement Division Recommendations Follow-Up”: 5-6. 2017-2018 San Mateo County Civil Grand Jury 14 Checkpoints on the Pathway toward City-County Procurement Cooperation 1. Move the PD into an Appropriate Department Per the CAPPO, “the placement of the procurement (division) should be operationally distinct from other departments and divisions within the entity.”69 When subordinate to another department, procurement lacks the authority and credibility to effectively regulate the entity’s procurement system and/or effectively negotiate with vendors. “In the Grand Jury’s opinion, these bureaucratic layers reduce the authority and effectiveness of the procurement function.”70 The PD would be more appropriately located as a direct report to the County Manager.71 2. Hire Experienced Buyers Implementation of C-CPC requires the PD to be staffed with buyers who have procurement management experience. Procurement management experience is essential for (a) implementing structural changes required for C-CPC, (b) managing current PD buyers, and (c) negotiating deep discounts with vendors. 3. Develop and Insert Piggyback Language into County Contracts Piggyback contracts are the vehicles through which the Cities and the County can combine their purchasing power, gain access to deep discounts, and save millions of dollars. The PD must develop and insert piggyback language into procurement contracts where applicable. 4. Create and Distribute to the Cities a Register of Open Contracts For the Cities to piggyback on the County’s contracts, the Cities must first be aware of available contracts. 69 “Use of Cooperative Contracts for Public Procurement” California Association of Public Procurement Officials (2017): 1. 70 Ibid. 5. 71 Ibid. 8. 2017-2018 San Mateo County Civil Grand Jury 15 The PD should create and distribute to city finance officers a searchable register of open contracts, including: the goods and services the terms and conditions the vendor other pertinent information 5. Identify the Goods and Services with the Highest Potential Savings in Conjunction with the Cities. To focus the PD’s efforts and secure the greatest savings for the Cities and the County, the PD needs to identify the goods and services with the highest potential savings. To this end, the PD should survey the Cities to identify (a) the most commonly purchased category and classes of goods and services and (b) the goods and service with the highest potential discounts. 6. Ensure County Purchasing Software Can Track Key Indicators Volume discounts on goods and services are predominately earned through “steps” (e.g., the first 100 purchases are discounted at 10 percent, purchases 101-200 are discounted at 15 percent, and purchases 200+ are discounted at 20 percent. To achieve discounts, purchasing software must be able to track key indicators. These indicators include: Purchases, by vendor Purchases, by category Purchases, by date Purchases, by buyer Vendor Performance The PD should ensure their current procurement system can track these performance indicators. 7. Ensure County Purchasing Software Can Accommodate City Purchases To effectively track purchases such that the County can accurately distribute rebates to the Cities, the PD must track the number and variety of purchases by City. Operational costs can be minimized by allowing City employees to place purchase orders to vendors through the PD procurement system. The PD should ensure their current procurement system can accommodate this purchasing arrangement. 8. Negotiate Discounted Contracts for those Goods and Services City participation in C-CPC requires County negotiated contracts to offer a better deal than the Cities could achieve on their own. 2017-2018 San Mateo County Civil Grand Jury 16 Once the goods and services with the highest potential for savings have been identified, the PD’s buyers should negotiate leveraged contract with vendors, achieving maximum savings through discounting. 9. Distribute and Report Discounts to the Cities on a Consistent Basis In a volume-based discount contract, discounts are based on the total sales in a given accounting period. Often, discounts take the form of a rebate; however, the exact specifications will depend on the product and the contract. The PD should develop the tools to effectively report and distribute discounts to cities. While implementing the changes necessary to allow C-CPC will come at a cost, the benefits accrued from crossing these checkpoints will go to great lengths to address the current “dysfunction” in the PD, in addition to the potential savings from C-CPC.72 The County’s Purchasing Compliance Committee identified in “Purchasing Redesign Report, Procurement of Goods” 48 deviations from best practices and issued 84 recommendations for improving the County’s procurement process. Notable findings included: 1. “It is unclear who is supposed to monitor the purchasing process.”73 2. “Departments and Purchasing Unit staff sometimes go around purchasing procedures but there is no way to know when this happens; when it is discovered there is no follow up or action taken and is not clear who should take that action or when.”74 3. “Staff often do not know that processes, rules, and regulations exist.”75 4. “Written documents such as handbooks, reference tools and other materials have not been updated, sometimes for more than 10 years”76 5. “There are no methods to monitor if the County is receiving the best value or if purchases are consistent from one department to another (maybe one department is paying more than another for the same item).”77 6. “There is no system in place to know if/when current processes either save the County money or lose money.”78 7. “No data is collected and used to monitor performance of the overall purchasing process.”79 8. “We have no way of knowing if we are being fiscally responsible.”80 72 San Mateo County Civil Grand Jury, “San Mateo County Procurement Division Recommendations Follow-Up”: 4. 73 Ibid. 18. 74 Ibid. 18. 75 Ibid. 18. 76 Ibid. 20. 77 Ibid. 19. 78 Ibid. 19. 79 Ibid. 20. 80 Ibid. 19. 2017-2018 San Mateo County Civil Grand Jury 17 From the Grand Jury’s prior reports and the County’s Purchasing Compliance Committee’s report, it is eminently clear that the Purchasing Division requires significant reform. The Grand Jury recommends that the County develop and study a plan to achieve the Checkpoints on the Pathway towards City-County Procurement Cooperation within current plans to improve the Purchasing Division. The Grand Jury recognizes that the implementation of C-CPC will require upfront investment by the County before significant savings can be achieved. To the extent the County determines the cost of implementing this plan would result in greater cost to the County not recouped by cost savings, the County could propose a cost sharing fee for those Cities accessing the collective purchasing program. City officials expressed pleasure with the RFP cost sharing arrangement for the Turbo Data Systems contract and expressed willingness to participate in cost sharing arrangements when those contracts would allow their city to access greater savings. As the County continues to improve the PD, beginning with a Controller’s Office Audit to be completed by December 31, 2018,81 achieving these nine checkpoints may unlock C-CPC and tens of millions of dollars in potential savings each year. FINDINGS F1. All 20 of the cities in the County purchase goods and services through decentralized purchasing systems. F2. Decentralized purchasing systems successfully allow the Cities to procure goods and services at fair market prices while minimizing labor costs. F3. The creation of a centralized purchasing department to provide the organization with advanced procurement services and guidance can be cost prohibitive. F4. While city employees receive training on municipal purchasing guidelines and policies, many employees who conduct purchasing operations as a secondary responsibility are not trained or instructed to negotiate optimum prices by leveraging market power. F5. City employees who conduct purchasing operations as a secondary responsibility often do not identify commonly purchased goods that other departments also purchase and so miss the opportunity to negotiate lower costs which could be obtained by purchasing the items in bulk for multiple departments. F6. Cooperative purchasing practices allow multiple public entities to collaboratively purchase goods and services, thereby gaining economies of scale that they would otherwise not have. F7. Cooperative purchasing practices are compatible with decentralized purchasing systems and can allow the Cities to leverage their collective market power, without changing existing purchasing systems. 81 Ibid. 27. 2017-2018 San Mateo County Civil Grand Jury 18 F8. Adoption of cooperative purchasing practices, including piggyback agreements and cooperative purchasing agreements, can enable all Cities to obtain lower prices on goods and services. F9. Each city has limited communications with each other regarding procurement best practices, shared purchasing challenges, and purchasing solutions. F10. The County of San Mateo’s Procurement Division is the only remaining public centralized purchasing department at the City and County level within San Mateo County. F11. Collaboration between the Cities and the Procurement Division through cooperative purchasing practices could achieve significant cost savings for both the Cities and the County. F12. The Procurement Division presently lacks the operational capacity to fully collaborate with the Cities. F13. There are no formal channels for communication between the County and the Cities regarding procurement cooperation opportunities. RECOMMENDATIONS The 2017-2018 San Mateo County Civil Grand Jury recommends that each City undertake the following by no later than February 1, 2019: R1. Increase the use of cooperative purchasing practices, including piggyback contracts and joint procurement agreements. R2. Share with other Cities and the County Procurement Division their procurement needs in order to identify opportunities for cooperative procurements between the Cities and the County. The 2017-2018 San Mateo County Civil Grand Jury recommends that the County of San Mateo do the following by no later than February 1, 2019: R3. Increase the use of cooperative purchasing practices, including the development and insertion of piggyback language into County contracts, with the Cities. R4. Share with the Cities the County’s procurement needs to identify opportunities for further cooperative purchasing. R5. Relocate the County’s Procurement Division into an appropriate reporting structure, such that the Procurement Division shall report directly to the County Manager. 2017-2018 San Mateo County Civil Grand Jury 19 The 2017-2018 San Mateo County Civil Grand Jury recommends that the County of San Mateo do the following by no later than July 1, 2019. R6. Develop and study a plan to achieve the Checkpoints on the Pathway towards City-County Procurement Cooperation within current plans to improve the Purchasing Division, including: a. Hire experienced buyers. b. Create and distribute to the Cities a register of open contracts. c. Ensure the County’s purchasing software can track key indicators. d. Ensure the County’s purchasing software can accommodate city purchases. e. Identify, in conjunction with the Cities, the goods and services with the highest potential savings. f. Negotiate discounted contracts for those goods and services. g. Distribute and report discounts to the Cities on a consistent basis. REQUESTS FOR RESPONSES Pursuant to Penal Code Section 933.05, the Grand Jury requests the following to respond to the foregoing Findings and Recommendations referring in each instance to the number thereof: The City Councils of The Town of Atherton, the City of Belmont, the City of Brisbane, the City of Burlingame, the Town of Colma, the City of Daly City, the City of East Palo Alto, the City of Foster City, the City of Half Moon Bay, the Town of Hillsborough, the City of Menlo Park, the City of Millbrae, the City of Pacifica, the Town of Portola Valley, the City of Redwood City, the City of San Bruno, the City of San Carlos, the City of San Mateo, the City of South San Francisco, and the Town of Woodside to respond no later than 90 days after the date of this Grand Jury Report. San Mateo County Board of Supervisors to respond no later than 90 days after the date of this Grand Jury Report. Each City Council and the County Board of Supervisors should respond to the findings and recommendations with respect to their own policies, procedures, and operations, not in regards to the Cities and the County as a whole. The governing bodies indicated above should be aware that the comment or response of the governing body must be conducted subject to the notice, agenda, and open meeting requirements of the Brown Act. METHODOLOGY Documents The Grand Jury reviewed the following documents: Purchasing Policy Manuals or equivalent documents from: the Town of Atherton, the City of Belmont, the City of Brisbane, the City of Burlingame, the Town of Colma, the City of Daly City, the City of East Palo Alto, the City of Foster City, the City of Half 2017-2018 San Mateo County Civil Grand Jury 20 Moon Bay, the Town of Hillsborough, the City of Menlo Park, the City of Millbrae, the City of Pacifica, the Town of Portola Valley, the City of Redwood City, the City of San Bruno, the City of San Carlos, the City of San Mateo, the City of South San Francisco, and the Town of Woodside. The California Association of Public Procurement Officials, Inc.: Best Practices: Global Procurement Best Practices The Turbo Data Contract between San Mateo County and Turbo Data Systems Inc. Memo to the Burlingame City Council: Turbo Data Contract Recommendation Memo to the San Mateo County Board of Supervisors: Turbo Data Contract Recommendation Interviews The Grand Jury conducted interviews with City Procurement Officers, City Management, County Procurement Officers, and County Management. 2017-2018 San Mateo County Civil Grand Jury 21 BIBLIOGRAPHY Borenstein, Severin. “Understanding Competitive Pricing and Market Power in Wholesale Electricity Markets” The Electricity Journal July, 2000: 50 http://faculty.haas.berkeley.edu/borenste/mba212/Elecjo00mktPower.pdf. Clark, Charles. “Government Doesn’t use Bulk-Purchasing Initiative Enough, Auditors Say” Government Executive October 4, 2014. < https://www.govexec.com/contracting/2012/10/government-doesnt-use-bulk-purchasing- initiative-enough-auditors-say/58590/> Department of Public Works “Los Angeles County Procurement Programs” The County of Los Angeles Accessed on April 20, 2018 https://dpw.lacounty.gov/epd/awards/procurement.cfm. Hazlitt, Henry. “How Should Prices Be Determined” Foundation for Economic Education, February 1, 1967. https://fee.org/articles/how-should-prices-be-determined. Krishna, Aradhna, Richard Briesch, Donald Lehmann, and Hong Yuan (2002), “A Meta- Analysis of the Impact of Price Presentation on Perceived Savings.” Journal of Retailing 78 (2), 101–18. https://www8.gsb.columbia.edu/researcharchive/articles/969. McCue, Clifford. Pitzer, Jack. “Centralized vs. Decentralized Purchasing: Current Trends in Governmental Procurement Practices” Journal of Public Budgeting, Accounting, and Financial Management (Vol 12, Issue: 3) 2000: 400 https://www.emeraldinsight.com/doi/pdfplus/10.1108/JPBAFM-12-03-2000-B003. Money Matters. “Centralized & Decentralized Purchase: Suitability, Merits and Detriments” Accountlearning.com Accessed on March 28, 2018. https://accountlearning.com/centralized- decentralized-purchase-suitability-merits-demerits-differences. “Piggybacking” The County of Alameda, Accessed on: April 20, 2018 https://www.acgov.org/sustain/what/purchasing/bids/piggyback.htm. Principles and Practices of Public Procurement “Use of Cooperative Contracts for Public Procurement” California Association of Public Procurement Officials Accessed on August 28, 2017: 1. http://c.ymcdn.com/sites/www.cappo.org/resource/collection/FBBFC7BF-369D-43DE- B609-3D41BA05D10E/Cooperative%20Contracts.pdf Procurement Division “Leveraged Procurement Agreements (LPAs) California Department of General Services Accessed on April 5, 2018 http://www.dgs.ca.gov/pd/Programs/Leveraged.aspx. “Quantity Discount” Investopedia, Accessed on: May 20, 2018 https://www.investopedia.com/terms/q/quantity-discount.asp#ixzz5F2r4B9Sp. 2017-2018 San Mateo County Civil Grand Jury 22 San Mateo County Civil Grand Jury. “San Mateo County Procurement Division Recommendations Follow-Up” Superior Court of California San Mateo County, June 21, 2017: 2 http://www.sanmateocourt.org/documents/grand_jury/2016/procurement.pdf. “Schedule of Total City Expenditures by Major Object Classification” California State Controller’s Office, Accessed on: October 21, 2017 https://bythenumbers.sco.ca.gov/City- Expenditures/Schedule-of-Total-City-Expenditures-by-Major-Objec/q6pc-n5bp. Seeking Alpha Editorial Board “Chart: Software Companies - Gross Profit Margins” seekingalpha.com May 7, 2006 https://seekingalpha.com/article/10166-chart-software- companies-gross-profit-margins. Soft, Effia. “Centralized vs. Decentralized Purchasing” Effiasoft.com Accessed on May 20, 2018 https://effiasoft.com/centralized-vs-decentralized-purchasing. Sposi, Michael. “The Effect of Globalization of Market Structure, Industry Evolution and Pricing” Federal Reserve Bank of Dallas, Globalization and Monetary Policy Institute 2013 Annual Report, May 31, 2013: pg. 24 https://www.dallasfed.org/~/media/documents/institute/annual/2013/annual13f.pdf. Stop Waste “Piggybacking for Green Purchasing” The County of Alameda, Accessed on: April 20, 2018 https://www.acgov.org/sustain/documents/PiggybackingResources.pdf. “Strategic Vision 2026” The County of Alameda, Accessed on April 20, 2018 http://www.acgov.org/government/strategic.htm. Issued: July 19, 2018 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-712 Agenda Date:9/26/2018 Version:1 Item #:13. Report regarding resolution approving and authorizing the City Manager to sign the response to San Mateo County Grand Jury report:“Cooperative Purchasing -A Roadmap to More Effective City Procurement”. (Richard Lee, Director of Finance) RECOMMENDATION It is recommended that the City Council adopt a resolution approving and authorizing the City Manager to sign the response to San Mateo County Grand Jury report:“Cooperative Purchasing -A Roadmap to More Effective City Procurement”. BACKGROUND/DISCUSSION On July 19,2018,the San Mateo County Grand Jury issued a report titled “Cooperative Purchasing -A Roadmap to More Effective City Procurement”,included as Attachment 1.Staff has reviewed the report, including its findings and recommendations,and prepared the response for the City of South San Francisco (“City”), included as Exhibit A to the accompanying resolution. The report findings generally provide an accurate depiction of the City’s procurement practices.There are two recommendations,Recommendations R1 and R2,that are directed at cities within San Mateo County to improve their purchasing and procurement practices.Recommendation R1 would direct cities to increase the use of cooperative purchasing practices,including “piggyback”contracts and joint procurement agreements. Recommendation R2 would direct cities to share with each other and with the County Procurement Division their procurement needs in order to identify opportunities for cooperative procurements between these municipalities. Notably,there are a few City practices that are in alignment with the Grand Jury’s call to increase utilization of “piggybacking”cooperative purchasing.The City regularly uses state-negotiated contracts for office supplies, phone service,computer equipment,and vehicle purchases.While a majority of the recommendations are directed towards the County of San Mateo’s Procurement Division,Recommendation R1 has already been addressed by the City,and Recommendation R2 can be implemented fairly easily.With regards to Recommendation R1,the City recently purchased licenses to a powerful procurement comparison software that allows each user to search procurements from thousands of public entities throughout the United States. Partnered with the City’s piggybacking provision contained within its purchasing policy and South San Francisco Municipal Code 4.4.40, the City is positioned to generate a considerable amount of savings. Regarding Recommendation R2,the San Mateo Finance Officers Group (SAMFOG),which meets on a bimonthly basis,can add a recurring agenda item to discuss procurement needs to identify opportunities for cooperative procurements. FISCAL IMPACT None. City of South San Francisco Printed on 9/20/2018Page 1 of 2 powered by Legistar™ File #:18-712 Agenda Date:9/26/2018 Version:1 Item #:13. CONCLUSION Approval of the response to the San Mateo Grand Jury report affirms that the City of South San Francisco is committed to adding value and garnering greater efficiency in its procurement efforts. Attachment:San Mateo County Grand Jury Report “Cooperative Purchasing -A Roadmap to More Effective City Procurement” City of South San Francisco Printed on 9/20/2018Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-859 Agenda Date:9/26/2018 Version:1 Item #:13a. Resolution approving and authorizing the City Manager to sign the response to San Mateo County Grand Jury Report “Cooperative Purchasing - A Roadmap to More Effective City Procurement”. WHEREAS,the San Mateo County Grand Jury issued a report titled “Cooperative Purchasing -A Roadmap to More Effective City Procurement”on July 19,2018 with two Recommendations directed at cities within its jurisdiction to improve their purchasing and procurement practices; and WHEREAS,Recommendation R1 would direct cities to increase the use of cooperative purchasing practices, including “piggyback”contracts and joint procurement agreements,and Recommendation R2 would direct cities to share with each other and with the County Procurement Division their procurement needs in order to identify opportunities for cooperative procurements between these municipalities; and WHEREAS,the Grand Jury requested a response from the City of South San Francisco within 90 days after the issuing date of the Grand Jury report; and WHEREAS, staff has prepared a response to the Grand Jury report, attached herein as Exhibit A; and WHEREAS,the City has already implemented Recommendation R1 through the purchase of user licenses for procurement comparison software that positions the City to generate significant savings; and WHEREAS,through the City’s participation in the San Mateo Finance Officers Group (SAMFOG), Recommendation R2 can be incorporated by adding a recurring agenda item to discuss procurement needs and identify opportunities for cooperative procurements. NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco does hereby approve and authorize the City Manager to sign the response to the San Mateo County Grand Jury Report “Cooperative Purchasing - A Roadmap to More Effective City Procurement”. ***** City of South San Francisco Printed on 9/28/2018Page 1 of 1 powered by Legistar™ PO BOX 711 400 GRAND AVENUE SOUTH SAN FRANCISCO, CA 94083 September 27, 2018 Hon. V. Raymond Swope Judge of the Superior Court c/o Charlene Kresevich Hall of Justice 400 County Center; 2nd Floor Redwood City, CA 94063-1655 Dear Hon V. Raymond Swope On September 22, 2018, the City Council of the City of South San Francisco (“City”) approved the response contained in this letter to the San Mateo County Grand Jury Report “Cooperative Purchasing – A Roadmap to More Effective City Procurement” dated July 19, 2018. Response to Findings The City agrees with all of the Findings contained in the Grand Jury Report. The findings generally accurately depict the procurement environment in the City of South San Francisco. It is worthwhile to note the City’s practice of regularly piggybacking on state contracts for office supplies, computers, and vehicles. Response to Recommendations Recommendation R1 - The recommendation has been implemented. The City recently purchased licenses to a robust procurement comparison software that allows users to search procurements for public entities across the United States. The City’s Purchasing Policy permits piggybacking, thus the information garnered from the procurement software has the potential to generate a considerable savings. Recommendation R2 - The recommendation has not yet been implemented, but will be implemented by December 31, 2018. The San Mateo Finance Officers Group (SAMFOG), which meets on a bimonthly basis, will incorporate sharing of procurement needs into their agendas to identify opportunities for cooperative procurements. Sincerely, CITY COUNCIL 2018 LIZA NORMANDY, MAYOR KARYL MATSUMOTO, MAYOR PRO TEMPORE MARK ADDIEGO, COUNCILMEMBER RICHARD A. GARBARINO, COUNCILMEMBER PRADEEP GUPTA, PH.D., COUNCILMEMBER MIKE FUTRELL, CITY MANAGER EXHIBIT A Mike Futrell City Manager City of South San Francisco City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-790 Agenda Date:9/26/2018 Version:1 Item #:14. Report regarding a resolution approving a license agreement with EVgo Services LLC for a payment of $50,000 and a term of ten (10)years for the installation and operation of four (4)high powered electric vehicle chargers and use of (5)five parking spaces at the Miller Avenue Parking Garage located at 329 Miller Avenue, South San Francisco.(Justin Lovell, Public Works Administrator) RECOMMENDATION It is recommended that the City Council adopt a resolution approving a license agreement with EVgo Services LLC for a payment of $50,000 and a term of ten (10)years for the installation and operation of four (4)high powered electric vehicle chargers and use of (5)five parking spaces at the Miller Avenue Parking Garage located at 329 Miller Avenue, South San Francisco. BACKGROUND/DISCUSSION The transportation sector is the largest contributor to greenhouse gas and pollution emissions in California.The State is working hard to meet its greenhouse gas emission goals of 15 percent below 1990 levels by 2020,40 percent below by 2030,and 80 percent below by 2050.Transforming the State’s transportation system away from gasoline to zero-emission vehicles is a key part of California’s strategy to reduce greenhouse gas emissions and improve air quality. To help address this transformation,California has distributed over $300 million in rebates to spur the state’s electric vehicle (EV)market to meet climate goals and Governor Brown’s executive order to get 1.5 million EV’s on the road by 2025.The EV market is expected to keep growing as California pushes ambitious EV policies,and more EV models are introduced by vehicle manufacturers.Subsequently local governments, workplaces, and new residential buildings are installing EV charging stations to accommodate EVs. The City’s Climate Action Plan (CAP)was adopted in 2014,with the purpose of reducing energy usage and greenhouse gas emissions (GHGs)community-wide.As part of the CAP implementation staff is working on an Electric Vehicle Master Plan that will provide a guiding document to convert the City’s fleet to EV and provide additional public facing EV charging stations throughout the City.Through the work of the Electric Vehicle Master Plan,staff held discussions with EVgo about their high powered charging equipment and the potential to operation high powered charging stations in South San Francisco. EVgo operates the largest public fast charging EV network in the nation,with over 1,000 charging stations nationwide.EVgo is responsible for installing EV stations under a settlement agreement between the energy company,NRG Energy,Inc.(NRG)and the State of California.In April 2012,the California Public Utilities Commission (CPUC)completed a settlement agreement with NRG to pay for $100 million in EV charging equipment in California. EVgo has a deadline to spend the settlement money for EV charging infrastructure. EVgo is proposing to enter into a license agreement with the City of South San Francisco to install four (4)high powered EV charging stations and use five (5)parking stalls (one stall is for accessible EV charging)at the Miller Avenue Parking Garage.The chargers would be up to 150 kilowatt (kW)high power chargers that can provide up to a 300 mile range in 30 to 40 minutes depending on the vehicle.The charging stations would be universally compatible for fast charging-compatible EVs (including CHAdeMO and CCS standards)andCity of South San Francisco Printed on 9/21/2018Page 1 of 2 powered by Legistar™ File #:18-790 Agenda Date:9/26/2018 Version:1 Item #:14. universally compatible for fast charging-compatible EVs (including CHAdeMO and CCS standards)and accessible to EVgo subscribers and non-subscribers.The chargers would be available as a paid service for EV drivers. EVgo offers a pay-as-you-go pricing at $0.20 a minute.The average EV owner will pay less than $6 to fully charge their vehicle using EVgo charging stations.EVgo also offers a membership program where members pay $0.15 a minute. The EVgo chargers will replace the existing city-owned and operated level two EV chargers at the Miller Avenue Parking Garage.In addition,City staff is working with PG&E to provide an additional ten level two EV chargers at the Miller Avenue Parking Garage.Information about the PG&E EV charging program will be provided at a future City Council meeting. EVgo provides a 100 percent turnkey project at no cost to the City which includes design,engineering,utility connections,permitting,construction,commissioning.EVgo will also pay for the cost of operations and maintenance of the EV chargers for the 10 year term of the agreement.EVgo has extensive experience installing EV charging stations with public entities,including completed installations with over 20 cities in California.The total cost for the high powered charger installation at the Miller Avenue Garage is estimated at $800,000. In exchange for the City to license EVgo with five parking spaces to construct and operate the high powered chargers,EVgo will pay the City $50,000 to make up the parking revenue lost over the term of the ten-year term agreement.As an additional bonus,EVgo has agreed to give the City a 20 percent discount on a City account to use for charging City owned EVs at any EVgo station. FISCAL IMPACT EVgo will pay the City $50,000 for the use of parking spaces to make the City whole on lost parking revenue. There is no additional cost to the City to install the EV chargers. CONCLUSION Entering into a license agreement with EVgo will provide high powered EV charging capability for EV owners at no cost to the City and a one-time payment of $50,000 will cover any potential lost parking revenue over the term of the agreement. City of South San Francisco Printed on 9/21/2018Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-794 Agenda Date:9/26/2018 Version:1 Item #:14a. Resolution approving a license agreement with EVgo Services LLC for a payment of $50,000 and a term of ten (10)years for the installation and operation of four (4)high powered electric vehicle chargers and use of (5) five parking spaces at the Miller Avenue Parking Garage located at 329 Miller Avenue, South San Francisco. WHEREAS,the transportation sector is the largest contributor to greenhouse gas and pollution emissions in California; and WHEREAS,transforming the State’s transportation system away from gasoline to zero-emission vehicles is a key part of California’s strategy to reduce greenhouse gas emissions and improve air quality; and WHEREAS,consistent with the State’s emission reduction and air quality improvement efforts,the City of South San Francisco (City)is pursing installation of electric vehicle (EV)charging infrastructure to support the City’s Climate Action Plan which aims to reduce energy use and greenhouse gas emissions; and WHEREAS,the City has held discussions with EVgo Services LLC (EVgo),which operates the largest public fast charging EV network in the nation,with over 1,000 charging stations countrywide,regarding the potential of operating EV charging stations in the City; and WHEREAS,EVgo is proposing to enter into a license agreement with the City of South San Francisco to install four (4)high powered EV charging stations and use five (5)parking stalls (one stall for accessibility)at the Miller Avenue Parking Garage located at 329 Miller Avenue; and WHEREAS,EVgo will provide a 100 percent turnkey project at no cost to the City which includes design, engineering,utility connections,permitting,construction,commissioning as well as operations and maintenance of the chargers; and WHEREAS,EVgo will pay the City $50,000 to make up the lost parking revenue for the five spaces over the term of the ten-year term agreement. NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of South San Francisco that the City Council approves the license agreement,attached hereto as Exhibit A,with EVgo Services LLC of Los Angeles, California. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the agreement and any other related documents on behalf of the City upon timely submission by EVgo Services LLC of the signed contract and all other documents, subject to the approval of the City Attorney. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to take any other related City of South San Francisco Printed on 9/27/2018Page 1 of 2 powered by Legistar™ File #:18-794 Agenda Date:9/26/2018 Version:1 Item #:14a. actions consistent with the intention of this resolution. ***** City of South San Francisco Printed on 9/27/2018Page 2 of 2 powered by Legistar™ 1 LICENSE AGREEMENT This License Agreement (this “Agreement” or “License”) is entered into effective as of September 26, 2018 (“Effective Date”) by and between the City of South San Francisco, a municipal corporation (the “City” or “Licensor”) and EVgo Services LLC, a Delaware limited liability company (the “Licensee”). The City and Licensee are hereinafter collectively referred to as the “Parties.” RECITALS A. The City is the owner of that certain real property consisting of three adjacent parcels of land located at 329 Miller Avenue within the City of South San Francisco, known as San Mateo County Assessor’s Parcel Numbers 012-312-040, 012-312-050 and 012-312-060, respectively, and more particularly described in Exhibit A attached hereto (the “Property”). B. Licensee is engaged in providing electric vehicle charging and support services to owners of electric vehicles, and desires to obtain a revocable license from the City to use a portion of the Property solely as a public charging station for its customers. The portion of the Property for which a license is granted pursuant to this Agreement (the “Licensed Premises”) is described in Exhibit B attached hereto. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Grant of License; License Fee; No Leasehold or Property Rights Created. The City hereby grants to Licensee a revocable license to use the Licensed Premises solely for any lawful activity in connection with the development, construction, installation, maintenance, repair, replacement, removal, and operation of electric vehicle chargers and ancillary items, including, without limitation, electrical equipment, hardware, software, signage and all supporting equipment and structures (which may include concrete pads and protective bollards) (collectively, the “Charging Station”), together with any other uses permitted herein, on the terms and conditions set forth in this Agreement (collectively, the “Permitted Activity”), undertaken in compliance with the Conditions of Use set forth in Section 9 below. Within thirty (30) days from the date the Charging Station is first operational (the “Commencement Date”), Licensee shall pay to the City a one-time fee (the “License Fee”) in the amount of Fifty Thousand Dollars ($50,000.00). This fee is based on estimated lost revenue to the City’s Parking District during the term of this Agreement. This Agreement is not intended to nor shall it be interpreted to create or vest in Licensee any leasehold or any other property rights or interests in the Property or the improvements located thereon, or any part thereof. As additional consideration for the License provided hereunder, Licensee shall provide to City during the Term a discount for City's use of the EV Charging Equipment (as defined below) equal to twenty percent (20%) off Licensee’s then-current “Pay As You Go” usage rates” which, as of the date hereof, are available at the following: https://www.evgo.com/charging-plans/. Such percentage discount will always be tied to the then current “Pay As You Go” usage rate, such that any rate change to the “Pay As You Go” rates from time to time will be reflected in the discounted rate. 2 2. Exclusivity. City grants to Licensee the exclusive right to provide DC fast- charging at the Property during the term. 3. Term of License. The term of the License and right of entry granted hereby, shall commence on the Effective Date and shall continue for a period of ten (10) years following the Commencement Date. Following the expiration of the initial term, the Agreement will automatically renew for successive one (1)-year periods, unless terminated by either party upon at least fifteen (15) days prior written notice. 4. Termination of License. 4.1 Termination for Cause. The Agreement may be immediately terminated or suspended by written notice (i) following a breach of either Party’s obligations under this Agreement, and failure to cure any such breach within ten (10) days following written notice of default from the non-breaching Party or (ii) if either Party becomes insolvent or proceedings are instituted by or against either Party under any provision of any federal or state bankruptcy or insolvency laws. 4.2 Early Termination. This Agreement may be terminated upon (30) days’ written notice to either Party: a. in the case of Licensee, without penalty or fee, at any time prior to the submission of the permit application for construction of the Charging Station at the Property or in the event that Licensee determines that the construction or continued operation of the Charging Station is impracticable or uneconomical; and b. in the case of the City, (i) , in the event the Commencement Date has not occurred within fifteen (15) months following the Effective Date;; or (ii) in the event that City elects to terminate this Agreement for convenience. If City elects to so terminate this Agreement, then City may be obligated to pay a fee (any such fee, a “Termination Fee”) to Licensee in an amount equal to $650,000 multiplied by the applicable Termination Percentage set forth in Schedule I attached hereto. For the avoidance of doubt, no Termination Fee shall be payable by City to Licensee in the event City exercises its right to terminate following the tenth (10th) anniversary of the Commencement Date. Upon the City’s notice to terminate, Licensee shall remove the EV Charging Equipment (as such term is defined in Section 9(i) below) from the Licensed Premises but shall leave in place the EV Supply Infrastructure (as defined in and in accordance with such Section 9(i)). 5. Licensee Customers; Access; Utility Service. 5.1 Licensee Customers. Licensee may provide access to the Charging Station to its subscribers, customers, agents, employees, contractors, vendors, guests and invitees (“Licensee Customers”), who shall be charged in amounts reasonably determined by Licensee, 3 which may change from time to time in Licensee’s sole discretion. Licensee Customers may include members of the public, as well as commercial fleet and rideshare vehicles. 5.2 Access. Licensee Customers shall have access to the Licensed Premises twenty-four (24) hours per day, seven (7) days per week, and 365/366 days per year. Licensee and its employees, contractors, and vendors may, at any time during the term, access the Licensed Premises and City Property to maintain, inspect, repair, upgrade, remove or replace any portion of the Charging Station. The City may access any portion of the Licensed Premises that it determines is necessary in its sole discretion in an emergency situation or other exigent circumstances, whether or not the City has notified Licensee of the emergency. Licensee’s use of the Licensed Premises may not impede or delay in any way the City’s authority and ability to make changes to the Licensed Premises or surrounding areas necessary to maintain its street lights, utility services, or other municipal services. 5.3 Utility Service. Upon commencement of construction of the Charging Station, Licensee shall upgrade electrical transformers for providing future utility services. Licensee shall obtain a City encroachment permit and other applicable approvals for such upgrade and related work. Upon the Charging Station becoming fully operational, Licensee shall have completed arrangements to provide separate utility meters and service at Licensee’s sole cost and expense. 6. Signage; Promotional Activities. 6.1 Signage. In compliance with all applicable requirements of the South San Francisco Municipal Code, including but not limited to Chapter 20.360, Licensee may stripe and place appropriate, removable signage at the Charging Station parking spaces, and mark the Charging Station and related equipment in Licensee’s sole discretion. In addition, subject to City’s prior approval Licensee may place signage, marks, or advertising devices in, on, or about and around the Licensed Premises within the Property at Licensee’s sole cost and subject to applicable laws and regulations. Notwithstanding this subsection, in no event shall Licensee be permitted to install, erect or place signage on City property that would cause permanent damage to any part of such buildings, structures, and facilities. 6.2 Promotional Activities. During the term of this Agreement, Licensee may promote the availability of the Charging Station (to the extent they are on Licensee’s network of EV charging stations) through traditional and/or electronic media, including providing the address of the Property and a description thereof. No Party shall use the other party’s trade or service marks, logos or other proprietary materials without the prior written consent of the other Party. 7. Operation and Maintenance. Licensee shall be responsible for operating and maintaining the Charging Station in good working order and repair. 8. Construction. Subject at all times to the requirements of Section 9, Licensee shall, at its sole cost and expense, be responsible for all installation activities (the “Installation Activities”) required to support the operation of the Charging Station and services therewith, 4 including the hiring and coordination of all vendors and contractors; the installation of electrical equipment, utility lines, hardware, and software; site preparation, trenching, repaving, and landscaping. Licensee shall comply with all Conditions of Approval with respect to all work done in the License Area, as stated in Exhibit D and attached hereto and incorporated herein, including required plans, specs, encroachment permits and building permits, and all other applicable approvals, at Licensee’s sole cost including payment for all permit fees. Before beginning any Installation Activities, Licensee shall provide a copy of the construction schedule and installation plans to City for its approval, which approval shall not be unreasonably delayed or withheld. Licensee shall ensure that it or its designated contractor(s) and/or service providers obtain from governmental authorities all licenses, permits, or other approvals (collectively, “Approvals”) required to conduct such installations (City will reasonably cooperate with Licensee’s designated contractors and service providers as required to obtain such Approvals), bring on the Licensed Premises and permitted adjacent areas of the Property only those materials and equipment that are being used directly in the Installation Activities, perform Installation Activities only during times and days acceptable to City and in a manner so as to not unreasonably interfere with City’s business operations, not permit or suffer any mechanic’s or materialmen’s liens to attach to the Licensed Premises. If such a lien attaches to the Licensed Premises, Licensee shall remove or bond over such lien at Licensee’s sole cost and expense, within twenty (20) days of Licensee receiving written notice thereof from City. City shall not retain any ownership rights in the Charging Station or any of Licensee’s related equipment. 9. Conditions of Use. Licensee’s right to enter upon and use the Licensed Premises is limited to the Permitted Activity (defined in Section 1 above) subject to compliance with all conditions set forth in this Section 9 (the “Conditions of Use”). Without limiting the foregoing, Licensee agrees to comply with all of the following specific requirements: a. Subject to Section 11 below, Licensee shall be liable for any damage to the Property, or any part thereof, or any improvements located thereon, or any other property of the City or City right-of-way (collectively, “City Property”), or other entities, that occurs as a result of this License and the use of the Licensed Premises by Licensee, its contractors, agents and invitees, except to the extent caused by the negligence or willful misconduct of the City, or their respective easement holders, employees, agents, or contractors. Any damage to the Property, the improvements located thereon, or City Property shall be immediately repaired to the satisfaction of the City, as applicable, at Licensee’s sole cost and expense. b. Licensee shall not interfere with any existing easement rights on the Property, nor encroach on the public right-of-way adjacent to the Property, except to the extent necessary or required for Licensee’s construction activities on the Property, in which case City will provide access to the alley for such construction by means of an encroachment permit that will have specific conditions of approval such as approved traffic control plan and other comparable measures c. Licensee shall incorporate all storm water pollution control measures required by an approved storm water pollution prevention plan. Licensee shall employ adequate dust control measures to ensure that neighboring businesses and residences are not 5 adversely impacted by Licensee’s activities on the Licensed Premises. Licensee shall comply with all Conditions of Use and with all state, federal, and local laws, regulations, rules and orders, applicable to this License, the Property or the Permitted Activity, including without limitation all Environmental Laws (defined in Exhibit C attached hereto and incorporated herein by reference). Licensee shall not cause or permit any Hazardous Material (defined in Exhibit C) to be generated, brought onto, used, stored, or disposed of in or about the Property. (i) Notice of Release or Investigation. If during the term of this Agreement, Licensee becomes aware of (a) any actual or threatened release of any Hazardous Material, caused by Licensee’s activities hereunder, in, on, under, or about the Property, or (b) any inquiry, investigation, proceeding, or claim by any government agency or other person regarding the presence of Hazardous Material, caused by Licensee’s activities hereunder, in, on, under, or about the Property, Licensee shall provide the City with written notice of the release or investigation within five (5) days after learning of it and shall simultaneously furnish to the City copies of any claims, notices of violation, reports, or other writings received by Licensee that concern the release or investigation. (ii) Remediation Obligations. If the presence of any Hazardous Material brought onto the Property by Licensee or Licensee’s agents, employees, invitees, customers, consultants, contractors or subcontractors results in contamination of the Property or any part thereof, Licensee shall promptly take all necessary actions to remove or remediate such Hazardous Materials, whether or not they are present at concentrations exceeding state or federal maximum concentration or action levels, or any governmental agency has issued a cleanup order, at Licensee’s sole expense, to return the Propert y to the condition that existed before the introduction of such Hazardous Material. Licensee shall first obtain the City’s approval of the proposed removal or remedial action. d. Consistent with section 5.2, Licensee shall not impair or interfere with the City’s ability to access the Property for any purpose. Additionally, Licensee shall not impair or interfere with the City, its respective employees, agents, contractors, or any beneficiaries of easements on the Property ability to access the Property. (i) Licensee shall allow parties to pre-existing license agreements with the City regarding the Property reasonable access and accommodation to the Property, as well as their respective employees, agents, or contractors to conduct inspections and possible environmental testing, as set forth in the current license agreements. e. Licensee expressly acknowledges and agrees that the City shall have no obligation to provide security services or fencing, and Licensee’s use of the Licensed Premises is at Licensee’s own risk. f. Licensee expressly acknowledges and agrees that the City has no obligation to maintain or repair the Property, the improvements located thereon, or the Licensed Premises, and Licensee accepts use of the Licensed Premises in its AS-IS condition. 6 g. Licensee shall, at Licensee’s sole cost and expense, maintain the Licensed Premises in its condition existing as of the Effective Date, reasonable wear and tear excepted, and shall use commercially reasonable efforts to keep the Licensed Premises in condition free of debris, litter, and graffiti. Without limiting the generality of the foregoing, Licensee shall be responsible for undertaking at Licensee’s sole expense without reimbursement, any necessary repair or resurfacing of paved surfaces on the Licensed Premises. Licensee shall be responsible for payment of all utilities serving the Licensed Premises. Licensee shall take reasonable steps to ensure that access to the Licensed Premises is limited to Licensee and Licensee’s customers, agents, employees, contractors and subcontractors. h. The City shall have the right at all times during the term of this Agreement to enter upon and to inspect the Licensed Premises to ensure compliance with this Agreement. i. Existing improvements to the Licensed Premises shall be restored to existing or better condition. Improvements shall include, but not be limited to, pavement, curbs, gutters, sidewalks, storm and sanitary sewer facilities, public utilities, surface improvements, landscaping, and lighting. Licensee shall be responsible for cleanup of any contamination by regulated substances introduced to the site by Licensee’s activities on the Licensed Premises. Within ninety (90) days following the expiration or termination of this Agreement, at Licensee’s sole cost and expense, Licensee shall remove all vehicles, equipment, materials and personal property only as to the Charging Station from the Licensed Premises, that is, Licensee shall remove from the Licensed Premises all Charging Station equipment and hardware used for delivering electricity to electric vehicles including conductors, electric vehicle connectors, chargers, attachment plugs, and all other fittings, devices, power outlets, or apparatuses installed specifically for the purpose of delivering energy from the Licensed Premises wiring to the electric vehicle (“EV Charging Equipment”), and any wiring thereto required to be removed by applicable electrical codes. Any electrical supply infrastructure enabling the operation of an electric vehicle charging station, such as conductors, transformers and associated substructures from the utility distribution system, and electrical panel, and cable and conduit to deliver power to the parking space (“EV Supply Infrastructure”) must remain at the Property. If Licensee fails to comply with the foregoing, the City shall have the right to remove all vehicles, equipment, materials and personal property from the Licensed Premises and to restore the Licensed Premises to its Original Condition, and Licensee shall be obligated to pay City for all costs incurred by the City in connection with such removal and restoration within five (5) business days following receipt of the City’s invoice therefore. j. All lay down and staging areas shall be fenced to prevent public access and screened from public view. Prior to storing materials on the Licensed Premises, Licensee shall, at Licensee’s sole expense without reimbursement, screen from view the portion of the Licensed Premises that fronts along Antoinette Lane and the portion of the Licensed Premises that faces the Chestnut Avenue located to the south of the Property. Screening materials shall be approved by City, which approval will not be unreasonably withheld. k. Licensee shall post notices on the Property that will reasonably notify all nearby residents and businesses affected by the use of the Licensed 7 Premises. Notifications shall include at a minimum: work hours, Licensee contact information, brief description of the work, and project duration. A copy of the notices shall be provided to the City for review prior to distribution. l. Use of the Property for construction activity is limited to Licensee’s employees, consultants, and contractors and is limited to construction hours specified in the City’s municipal code (8 a.m. through 8 p.m. Monday through Friday, 9 a.m. to 8:00 p.m. Saturday, and 10 a.m. to 6 p.m. Sunday and holidays), unless otherwise approved by the City Engineer or authorized representative. Overnight parking, storage of equipment, and relatively quiet, non-construction activities are acceptable outside of regular working hours. 10. Representations, Warranties and Covenants. Each of City and Licensee hereby represents and warrants to the other that, as of this Effective Date: (a) it has all necessary power and authority to execute, deliver, and perform its obligations hereunder; (b) the execution, delivery, and performance of this Agreement have been duly authorized by all necessary action and do not violate any of the terms or conditions of its governing documents, any contract to which it is a party, or any law, regulation, order, or other legal determination applicable to it; (c) there is no pending or, to its knowledge, threatened litigation or proceeding that may adversely affect its ability to perform this Agreement; (d) it is duly organized and validly existing under the laws of the jurisdiction of its organization; (e) this Agreement constitutes a legal, valid and binding obligation of such party, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights and by general principles of equity; and (f) at all times during the term, it will comply with all federal, state, and local laws, rules, regulations (including, without limitation, all zoning ordinances and building codes) in performing its obligations under this Agreement. 11. Indemnification. Licensee agrees to indemnify, defend (with counsel approved by City) and hold the City, and their respective elected and appointed officers, officials, employees, agents and representatives (all of the foregoing collectively “City Indemnitees”) harmless from and against all liability, loss, cost, claim, demand, action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense (including, without limitation, reasonable attorneys’ fees and costs of litigation) (all of the foregoing collectively “Claims”) resulting from or arising in connection with the use of the Licensed Premises or the improvements located thereon by Licensee or Licensee’s agents, employees, invitees, contractors or subcontractors, including without limitation, Claims arising as a result of or in connection with any release of any Hazardous Material in, on, under or about the Properties by Licensee, or Licensee’s agents, employees, invitees, contractors, or subcontractors, or any other violation of any Environmental Law by Licensee or Licensee’s agents, employees, invitees, contractors or subcontractors, except and to the extent caused solely by the negligence or willful misconduct of any of the Indemnitees. Licensee’s indemnification obligations set forth in this Section 11 shall survive the expiration or earlier termination of this Agreement. 12. Limitation of Liability. In no event shall either Party be liable (in contract or in tort, including negligence and strict liability) to such other Party or its respective affiliates, representatives, agents, officers, directors, managers, members, shareholders, partners, contractors, or employees (the “Related Parties”) for any special, indirect or consequential 8 damages relating to this Agreement. Each Party’s total liability to the other Party and its Related Parties on an aggregate basis arising out of or in connection with this Agreement, whether in contract or in tort, shall not exceed the limits of the applicable insurance coverage required hereunder, except as it applies to any obligations pursuant to Section 11, entitled “Indemnification.” 13. Release of Claims. Licensee hereby waives, releases, and discharges forever the City Indemnitees from all present and future Claims arising out of or in any way connected with entry upon or use of the Licensed Premises and the improvements located thereon by Licensee or Licensee’s agents, employees, invitees, contractors or subcontractors, including without limitation all Claims arising in connection with any injury to persons or damage to or theft of vehicles, equipment, materials, or any other personal property, except and to the extent caused solely by the gross negligence or willful misconduct of any of the Indemnitees. The provisions of this Section 13 shall survive the expiration or earlier termination of this Agreement. 14. EVgo Insurance. Throughout the term of this License, Licensee shall maintain a commercial general liability policy in the amount of at least Two Million Dollars ($2,000,000) combined single limit, including coverage for bodily injury, property damage, and contractual liability coverage. Such policy or policies shall be written on an occurrence basis, shall be issued by an insurance carrier licensed to do business in the State of California with current A.M. Best's rating of no less than A: VII, and shall name the City as an additional insured. Throughout the term of this License, Licensee shall maintain a comprehensive automobile liability coverage in the amount of at least Two Million Dollars ($2,000,000.00), combined single limit including coverage for owned, non-owned, and leased vehicles. Automobile liability policies shall name the City and the Indemnitees as an Additional Insured. Throughout the term of this License, Licensee shall maintain worker’s compensation insurance in the amount required under applicable state law, covering Licensee’s employees, if any, at work at the Licensed Premises or engaged in services or operations in connection with the Permitted Activity. The insurance limits required hereby may be satisfied through an umbrella or excess liability policy. Prior to the Effective Date, Licensee shall furnish the City with certificates of insurance in forms acceptable to the City evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify the City of any material change, cancellation, termination or non-renewal of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation, termination, or non-renewal, except in the event of non-payment of premium a ten (10) day notice will be provided. Coverage provided by Licensee shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by the City and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City. Licensee shall provide the City with certified copies of the required insurance policies upon City’s request. 15. City Insurance. During the Term, City agrees to maintain in full force and effect, 9 at its cost and expense: (i) Property insurance, including boiler & machinery coverage; (ii) Automobile Liability insurance; and (iii) General Liability insurance, written on an occurrence basis, covering bodily injury, personal injury, and property damage, with combined single limit of not less than $1,000,000. 16. Casualty and Condemnation. If any portion of the Property is damaged by fire or other casualty in a manner that adversely affects Licensee’s use of the Licensed Premises, then either Party may, within thirty (30) days of the date of such fire or other casualty elect to terminate this License on written notice to the other Party. If any portion of the Property is condemned or taken in any manner for a public or quasi-public use that could adversely affect Licensee’s use of the Licensed Premises, then Licensee may elect to terminate this License effective as of the date title to the condemned portion of the Property is transferred to the condemning authority. 17. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant hereto shall be made in writing, and sent to the Parties at the addresses specified below, or such other address as a Party may designate by written notice delivered to the other Party in accordance with this section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. City: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Mike Futrell, City Manager Telephone: (650) 877-8500 Licensee: EVgo Services LLC 11390 W. Olympic Blvd., Suite 250 ATTN: Site Acquisition with a copy to: EVgo Services LLC 11390 West Olympic Blvd., Suite 250 10 Los Angeles, CA 90064 Attn: Legal Department For communications relating to this Agreement, Licensee’s point of contact prior to construction shall be Thomas Reagan (Thomas.reagan@evgo.com) and after construction Licensee’s point of contact shall be Jonah Eidus (Jonah.eidus@evgo.com 18. Assignment. The rights granted hereby are personal to the Licensee and may not be transferred or assigned by operation of law or otherwise without the written consent of the City; provided, however, that Licensee may assign its rights and obligations in and under this Agreement to a successor by merger or acquisition or successor to all or substantially all of its assets at any time and without consent. This Agreement is binding on and inures to the benefit of the Parties and their respective heirs, successors, assigns, and personal representatives. In the event the Licensed Premises is transferred or City ceases to have the requisite level of control over the Licensed Premises necessary to fulfill its obligations under this Agreement (each, a “Transfer Event”), City shall assign its rights and obligations under this Agreement to the person or entity which would be able to comply with City’s obligations following such Transfer Event. Further, City agrees that any such Transfer Event shall not affect, terminate or disturb Licensee's right rights under this Agreement, so long as Licensee is not then in default under any of the terms, covenants or conditions of this Agreement. If City is unable to assign its rights and obligations, this Agreement shall be deemed terminated for City’s convenience. and the terms of Section 4.2(b.)(ii) shall apply. 19. Force Majeure. Neither Party is responsible for any delay or failure in performance of any part of this Agreement to the extent that delay or failure is caused by fire, flood, explosion, war, embargo, government requirement, civil or military authority, act of God, act or omission of carriers or other similar causes beyond the Party’s control. 20. Entire Agreement; Amendments. This Agreement together with Exhibits A through D attached hereto and incorporated herein by reference, constitute the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statement with respect thereto. This Agreement may be amended only by a written instrument executed by the Parties hereto. 21. Severability. If any term, provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged thereby. 22. No Waiver. A waiver by either Party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any subsequent breach of the same or any other covenant or provision hereof. No waiver shall be valid unless in writing and executed by the waiving Party. 23. Captions; Interpretation. The section headings used herein are solely for 11 convenience and shall not be used to interpret this Agreement. The provisions of this Agreement shall be construed as a whole according to their common meaning, and not strictly for or against any party, in order to achieve the objectives and purposes of the Parties. 24. Attorneys’ Fees. In any action at law or in equity, arbitration or other proceeding arising in connection with this Agreement, the prevailing party shall recover reasonable attorney’s fees and other costs, including but not limited to court costs and expert and consultants’ fees incurred in connection with such action, in addition to any other relief awarded. 25. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. 26. Governing Law. This Agreement, and the rights and obligations of the Parties, shall be governed by and interpreted in accordance with the laws of the State of California without regard to principles of conflicts of law. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of San Mateo County, California or in the Federal District Court for the Northern District of California. 27. No Third Party Beneficiaries. Nothing in this Agreement is intended to or shall confer upon any person other than the Parties any rights or remedies hereunder. 28. Time is of the Essence. Time is of the essence for each condition, term, obligation and provision set forth in this Agreement. 29. Possessory Interest. Licensee acknowledges that this License may create a possessory interest subject to property taxation, and that Licensee may be subject to the payment of property taxes on such interest. SIGNATURES ON FOLLOWING PAGE(S) 12 IN WITNESS WHEREOF, the Parties have executed this License Agreement as of the date first written above. LICENSEE: EVGO SERVICES LLC By: _____________________________ Print Name: __Jonah S. Eidus____________________ Title: ___Senior Director – Site Development______________________ CITY: THE CITY OF SOUTH SAN FRANCISCO, a municipal corporation By:____________________________ Mike Futrell, City Manager ATTEST: City Clerk APPROVED AS TO FORM: ________________________ City Attorney 2989873.1 13 Exhibit A MILLER AVENUE PARKING GARAGE The land referred to is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: 329 Miller Avenue Parking Garage. 14 Exhibit B MILLER AVENUE GARAGE LICENSED PREMISES EVgo shall have access to install high powered chargers to four parking stalls and one accessible parking stall as indicated in the drawing. Additionally, access shall be granted to upgrade the transformer in coordination with PG&E and install electrical service and high-power support equipment in the location as indicated, plus installation of electrical conduits via a trapeze under the ceiling from the electrical support equipment to the vehicle charging equipment. 15 Exhibit C DEFINITION OF HAZARDOUS MATERIAL, ENVIRONMENTAL LAWS As used in this License, the term “Hazardous Material” means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws (defined below) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “extremely hazardous waste”, infectious waste”, toxic substance”, toxic pollutant”, or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term “hazardous material” shall also include asbestos or asbestos-containing materials, radon, chrome and/or chromium, polychlorinated biphenyls, petroleum, petroleum products or by-products, petroleum components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable as fuel, perchlorate, and methy tert-butyl ether, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws. As used in this License, the term “Environmental Laws” means any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations or directives, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Porter-Cologne Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter-Presley-Tanner Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et seq.). 16 Exhibit D CONDITIONS OF APPROVAL Conditions of installation and construction of EV charging infrastructure - EVgo shall provide plans and specifications to Public Works Department for review and comment prior to submission of Building Division submittals. Public Works Department shall return comments to EVgo within ten (10 business days) - EVgo shall secure all necessary permits and approvals at its own costs from the City which may include, but are not limited to, building permits and encroachment permits - EVgo shall coordinate construction activities with Public Works Department and give at least 5 business day notice prior to installing temporary fencing or temporary removal of spaces during construction activities. - During the construction EVgo shall maintain power at the Miller Garage as to not interrupt normal operations. Any power shut offs that may be needed as part of the construction activities shall occur during weekends. - EVgo to provide City of South San Francisco monthly reports or access to real time monitoring of the charging equipment. At a minimum data provided should include the following: o Percent occupancy of chargers per hour/per day o Number of unique charging sessions per day o Amount of electricity in kW hours consumed for charging per day o Average session time in minutes per day/per month - City will create an EVgo account and EVgo shall provide the City with the discount off then current “Pay As You Go” usage rates that is provided for in Paragraph 1 of the License. 17 Schedule I TERMINATION SCHEDULE Early Termination Date Termination Percentage prior to the first (1st) anniversary of the Commencement Date 100% after the first (1st) anniversary of the Commencement Date, but prior to the second (2nd) anniversary of the Commencement Date 90% after the second (2nd) anniversary of the Commencement Date, but prior to the third (3rd) anniversary of the Commencement Date 80% after the third (3rd) anniversary of the Commencement Date, but prior to the fourth (4th) anniversary of the Commencement Date 70% after the fourth (4th) anniversary of the Commencement Date, but prior to the fifth (5th) anniversary of the Commencement Date 60% after the fifth (5th) anniversary of the Commencement Date, but prior to the sixth (6th) anniversary of the Commencement Date 50% after the sixth (6th) anniversary of the Commencement Date, but prior to the seventh (7th) anniversary of the Commencement Date 40% after the seventh (7th) anniversary of the Commencement Date, but prior to the eighth (8th) anniversary of the Commencement Date 30% after the eighth (8th) anniversary of the Commencement Date, but prior to the ninth (9th) anniversary of the Commencement Date 20% after the ninth (9th) anniversary of the Commencement Date, but prior to the tenth (10th) anniversary of the Commencement Date 10% After the tenth (10th) anniversary of the Commencement Date 0% 3055009.1 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-902 Agenda Date:9/26/2018 Version:1 Item #:15. Report regarding a resolution approving the acceptance of grant funds from the After School Education and Safety Grant to be granted over a three-year term in the amount of $228,501 per year (total grant amount of $685,503),and amending the Parks and Recreation Department and Library Department Fiscal Year 2018-19 Operating Budget pursuant to budget amendment #19.021.(Sharon Ranals, Parks and Recreation Director) RECOMMENDATION It is recommended that the City Council adopt a resolution approving the acceptance of grant funds from the After School Education and Safety Grant to be granted over a three-year term in the amount of $228,501 per year (total grant amount of $685,503),and amending the Parks and Recreation Department and Library Department Fiscal Year 2018-19 Operating Budget pursuant to budget amendment #19.021. BACKGROUND/DISCUSSION The After School Education and Safety Program (ASES)is a program under the California Department of Education,with the goal of supporting local efforts to improve assistance to students and broaden the base of support for education in a safe,constructive environment.ASES funding is designed to:(1)maintain existing before and after school program funding;and (2)provide eligibility to all elementary and middle schools that submit quality applications throughout California.The current funding level for the state’s ASES program is $550 million. The Parks and Recreation Department has been the recipient of ASES grant funding as early as Fiscal Year (FY)2006-07.Grant funds are overseen by staff in the Childcare Program and are directed to the R.E.A.L. (Recreation,Enrichment and Learning)After School Program located at Martin Elementary School and Los Cerritos Elementary School,as well as the Homework Club (for Spruce Elementary School students)at the Community Learning Center. The Homework Club is operated in collaboration with the Library Department. The purpose of the R.E.A.L.Program is to expand learning beyond the school day and compliment,support, and enhance daily classroom instruction.The R.E.A.L.Program focuses on creating educational projects that make learning fun by offering students the opportunity to participate in a balance of individual activities,small and large group activities,indoor and outdoor activities,and quiet as well as active play.Programs at all of the grant-funded sites are currently filled to capacity at about 55 students each. FISCAL IMPACT The California Department of Education has approved the City’s ASES Program Request for Renewal Application for a three-year term,beginning July 1,2018 through June 30,2021.The grant amount is $228,501 per year,totaling $685,503 over three years.Acceptance of this grant is crucial to sustaining the after school City of South San Francisco Printed on 9/20/2018Page 1 of 2 powered by Legistar™ File #:18-902 Agenda Date:9/26/2018 Version:1 Item #:15. per year,totaling $685,503 over three years.Acceptance of this grant is crucial to sustaining the after school programs provided at Martin Elementary School,Los Cerritos Elementary School,and the Homework Club at the Community Learning Center.These programs have minimal impact to the General Fund.Any costs to the General Fund are absorbed by the Parks and Recreation Department and Library Department Operating Budgets, and include overhead costs for administrative oversight of the grant and grant-funded programs. Since the Homework Club is operated in collaboration with the Library Department,$79,976 of the ASES grant is allocated to the Library Department Operating Budget,and the remaining $148,525 is allocated to the Parks and Recreation Department. CONCLUSION Acceptance of this grant is crucial to sustaining the after school programs provided at Martin Elementary School,Los Cerritos Elementary School,and the Homework Club at the Community Learning Center.Staff recommends that the City Council adopt a resolution approving the acceptance of grant funds from the After School Education and Safety Grant to be granted over a three-year term of $228,501 per year (total grant amount of $685,503),and amending the Parks and Recreation Department and Library Department Fiscal Year 2018-19 Operating Budget pursuant to budget amendment #19.021. City of South San Francisco Printed on 9/20/2018Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-903 Agenda Date:9/26/2018 Version:1 Item #:15a. Resolution approving the acceptance of grant funds from the After School Education and Safety Grant to be granted over a three-year term in the amount of $228,501 per year (total grant amount of $685,503),and amending the Parks and Recreation Department and Library Department Fiscal Year 2018-19 Operating Budget pursuant to budget amendment #19.021. WHEREAS,the After School Education and Safety Program (ASES)is a program under the California Department of Education,with the goal of supporting local efforts to improve assistance to students and broaden the base of support for education in a safe, constructive environment; and WHEREAS,the Parks and Recreation Department has been the recipient of ASES grant funding as early as Fiscal Year (FY) 2006-07; and WHEREAS,the ASES grant provides crucial funding to sustain the after school programs at Martin Elementary School,Los Cerritos Elementary School,and the Homework Club (for Spruce Elementary School)at the Community Learning Center; and WHEREAS,the Parks and Recreation Department and the Library Department collaborate on the Homework Club program offered at the Community Learning Center; and WHEREAS,receipt of the grant funds will be used to amend the Parks and Recreation Department’s FY 2018- 19 Operating Budget to reflect $148,525 in grant funds received,and the Library Department’s Operating Budget to reflect $79,976 in grant funds received, pursuant to budget amendment number #19.021; and NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco hereby accepts grant funds from the After School Education and Safety Grant to be granted over a three-year term in the amount of $228,501 per year (total grant amount of $685,503),and amends the Parks and Recreation Department’s FY 2018-19 Operating Budget to reflect $148,525 in grant funds received,and the Library Department’s Operating Budget to reflect $79,976 in grant funds received,pursuant to budget amendment number #19.021. BE IT FURTHER RESOLVED that the City Council authorizes the City Manager to execute the documents necessary to accept the grant funding and take any other actions necessary to carry out the intent of this City of South San Francisco Printed on 9/28/2018Page 1 of 2 powered by Legistar™ File #:18-903 Agenda Date:9/26/2018 Version:1 Item #:15a. resolution on behalf of the City Council, subject to approval as to form by the City Attorney. ***** City of South San Francisco Printed on 9/28/2018Page 2 of 2 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-868 Agenda Date:9/26/2018 Version:1 Item #:16. Report regarding an Ordinance approving a Zoning Text Amendment making modifications to the South San Francisco Zoning Code related to Signage Citywide,and an Ordinance adopting a Development Agreement to allow for the installation of a 60 foot tall,double faced,digital billboard on property located at 180 S Airport in exchange for removal of one double sided billboard along San Mateo Ave and one single sided billboard along El Camino Real, together with other considerations.(Billy Gross, Senior Planner) RECOMMENDATION Staff recommends that the City Council take the following actions: 1.Adopt an Ordinance making revisions to Chapter 20.360 of the South San Francisco Municipal Code, related to Digital Billboards, and waive further reading; and, 2.Adopt an Ordinance adopting a Development Agreement DA17-0003, and waive further reading. BACKGROUND/DISCUSSION The City Council previously waived reading and introduced the following ordinances.The ordinances are now ready for adoption. Ordinance making modifications to the South San Francisco Zoning Code related to Signage Citywide. (Introduced on 09/12/18: Vote 4-0) Ordinance adopting a Development Agreement to allow for the installation of a 60 foot tall,double faced,digital billboard on property located at 180 S Airport in exchange for removal of one double- sided billboard along San Mateo Ave (at Lowrie Ave)and one single-sided billboard on El Camino Real north of Arroyo Blvd. (Introduced on 09/12/18: Vote 4-0) Associations 1.Final Ordinance amending SSFMC Chapter 20.360 (18-869) 2.Final Ordinance adopting a Development Agreement (18-870) a.Exhibit A - Development Agreement City of South San Francisco Printed on 9/21/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-869 Agenda Date:9/26/2018 Version:1 Item #:16a. Ordinance making modifications to the South San Francisco Zoning Code related to Signage Citywide. WHEREAS,in July of 2010,the City Council for the City of South San Francisco (“City”)adopted a comprehensive update to the City’s zoning ordinance,which repealed the then-existing Title 20 of the South San Francisco Municipal Code,and replaced it with an entirely new Title 20 that,among other actions, established new zoning districts,revised and reformatted many then-existing zoning provisions,eliminated inconsistent and outdated provisions,and codified entirely new zoning provisions,including new land use regulations and development standards (“Zoning Ordinance”); and WHEREAS,since adoption of the Zoning Ordinance in July 2010,the City has identified areas of the Zoning Ordinance that require refinement,clarification,and/or correction,including revisions to the City’s Chapter 20.360 regulating signs in order to provide standards to allow digital billboards and other minor modifications; and WHEREAS,the Zoning Ordinance was adopted after preparation,circulation,consideration,and adoption of an Initial Study/Negative Declaration (“Zoning Ordinance IS/ND”)in accordance with the California Environmental Quality Act,Public Resources Code Sections 21000,et seq.(“CEQA”),which IS/ND analyzed the environmental impacts of adopting the Zoning Ordinance and concluded that adoption of the Zoning Ordinance could not have a significant effect on the environment because none of the impacts required to be analyzed under CEQA would exceed established thresholds of significance; and WHEREAS,the City Council adopted an Initial Study/Mitigated Negative Declaration (“IS/MND”)on August 26,2015 (State Clearinghouse number 2013062062)in accordance with the provision of CEQA and CEQA Guidelines,which analyzed the potential environmental impacts of billboards along the west side of U.S. Highway 101; and WHEREAS,pursuant to CEQA Guidelines Section 15164,an addendum to the IS/MND was prepared for the Outfront Media Digital Billboard Project (“2018 Addendum”)analyzing the potential impacts of billboards along the east side of U.S.Highway 101,which was considered and recommended to the City Council for approval by a separate resolution of the Planning Commission; and WHEREAS,on June 7,2018 the Planning Commission for the City of South San Francisco held a properly noticed public hearing,at which time interested parties had the opportunity to be heard,to review the Project and the 2018 Addendum,as well as supporting documents,at the conclusion of which the Planning Commission recommended that the City Council find that the 2018 Addendum is the appropriate environmental document and approve the Project; and, WHEREAS,the City Council held a duly noticed public hearing on July 25,2018 which was continued to September 12,2018,to consider the 2018 Addendum,the Area Plan Amendment,Zoning Text Amendment, City of South San Francisco Printed on 10/1/2018Page 1 of 6 powered by Legistar™ File #:18-869 Agenda Date:9/26/2018 Version:1 Item #:16a. Development Agreement and Relocation Agreement and take public testimony; and, WHEREAS,the refinements,clarifications,and/or corrections to the Zoning Ordinance as they relate to signage are minor in nature,the adoption of which would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the Zoning Ordinance IS/ND or IS/MND prepared and circulated for the siting of billboards along U.S.Highway 101,nor do the refinements,clarifications,and/or corrections constitute a change in the project or change in circumstances that would require additional environmental review. WHEREAS,the City Council reviewed and carefully considered the information in the 2015 IS/MND and the 2018 Addendum,and by separate resolution,finds that the 2018 Addendum is the appropriate environmental document; and, NOW,THEREFORE,BE IT ORDAINED that based on the entirety of the Record before it,as described below, the City Council of the City of South San Francisco does hereby ORDAIN as follows: SECTION I.FINDINGS. Based on the entirety of the record as described above,the City Council for the City of South San Francisco hereby makes the following findings: A.General Findings. 1.The foregoing recitals are true and correct and made a part of this Ordinance. 2.The Record for these proceedings,and upon which this Ordinance is based,includes without limitation, Federal and State law;the California Environmental Quality Act (Public Resources Code §§21000,et seq. (“CEQA”))and the CEQA Guidelines (14 California Code of Regulations §15000,et seq.);the South San Francisco 1999 General Plan and General Plan Environmental Impact Report,including the 2001 updates to the General Plan and 2001 Supplemental Environmental Impact Report;the South San Francisco Municipal Code;the 2015 Initial Study /Mitigated Negative Declaration prepared for the siting of billboards along the west side of U.S.Highway 101 (“101 Terminal Court Clear Channel Billboard Project”)and Related Zoning Amendment,including all written comments received;the 2018 Addendum to Initial Study / Mitigated Negative Declaration for the 101 Terminal Court Clear Channel Billboard Project;all reports, minutes,and public testimony submitted as part of the Planning Commission's duly noticed meeting on June 7,2018;all reports,minutes,and public testimony submitted as part of the City Council's duly noticed meeting on July 25,2018 which was continued to September 12,2018;and any other evidence (within the meaning of Public Resources Code §21080(e) and §21082.2). 3.The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco,315 Maple Avenue,South San Francisco,CA 94080, and in the custody of the Planning Manager. B.Zoning Amendment Findings 1.The proposed zoning amendments are consistent with the adopted General Plan because they establish regulations that balance the need of different users for adequate identification,communication and advertising with the objectives of protecting the public and promoting a visually attractive community.By City of South San Francisco Printed on 10/1/2018Page 2 of 6 powered by Legistar™ File #:18-869 Agenda Date:9/26/2018 Version:1 Item #:16a. advertising with the objectives of protecting the public and promoting a visually attractive community.By allowing the installation of digital billboards subject to a relocation agreement and sign permit,the proposed zoning amendments will assist the City in removing existing static billboards from unwanted locations and replacing with digital signage that provide more timely messaging,strengthen and promote economic development objectives and actively market South San Francisco.The proposed text amendments related to the regulation of digital billboards will remain consistent with the City’s General Plan vision for community and economic development by promoting economic development within the City,expanding the communication of community services,and providing an additional source of revenue for the City.The proposed text amendments will not impede achievement of any of the goals,policies,or land use designations established in the General Plan and is consistent with the General Plan,including the East of 101 Area Plan (as proposed for amendment). 2.The proposed zoning amendments related to digital billboards would only affect properties in non- residential districts east of and adjacent to U.S.Highway 101 and have been designed to be appropriate for surrounding uses.The existing standards ensure that proposed projects are suitable in terms of architectural compatibility,consistency with area character,legibility,readability,finish and visibility,and other considerations deemed relevant by the Planning Commission and City Council because the performance standards for digital billboards,including operational limitations related to static messages,maximum lighting levels,a requirement for a light sensing device that adjusts the sign brightness as ambient light conditions change,and location limitations,are included in the existing standards and would be applied to the proposed Project,as well as to any future digital billboard projects,to minimize visual impacts.The suitability for the potential digital billboard sites,to the extent foreseeable,was analyzed in the environmental document prepared for the Project. 3.The proposed zoning amendments allow digital billboards in a discrete area adjacent to U.S.Highway 101 in non-residential districts.The use of digital billboards in this area is consistent and harmonious with surrounding urban uses.The proposed zoning amendments related to digital billboards would not result in any change of zoning districts and therefore would not be detrimental to the use of land in any adjacent zone. SECTION II.AMENDMENTS. The City Council hereby amends the following sections of the South San Francisco Municipal Code to read as follows.Sections and subsections that are not amended by this Ordinance are not included below,and shall remain in full force and effect. A.Amend Section 20.360.002(A)to clarify when digital billboards can be allowed pursuant to a Relocation Agreement, as follows: A.Relocation Agreements. 1.The regulatory provisions of this chapter are designed to accomplish the purposes set forth in Section 20.360.001 (“Purpose”)with respect to all signs reviewed and permitted pursuant to this chapter. 2.However,State law substantially limits the City’s ability to eliminate signs legally established prior to the adoption of this chapter,thereby frustrating the accomplishment of the purposes set forth in Section 20.360.001 (“Purpose”).Therefore it is advantageous to utilize relocation agreements as authorized by Business &Professions Code Section 5412 to accomplish the City of South San Francisco Printed on 10/1/2018Page 3 of 6 powered by Legistar™ File #:18-869 Agenda Date:9/26/2018 Version:1 Item #:16a. agreements as authorized by Business &Professions Code Section 5412 to accomplish the purposes of this chapter with respect to such signs. 4.In order to facilitate the use of relocation agreements to accomplish the purposes of this chapter, signs expressly permitted by relocation agreements shall be exempt from design limitations under this chapter but shall be subject to staff-level design review to ensure compliance with any provisions in the relocation agreement as well as to ensure the best possible design consistent therewith.Except as set forth in this section,signs authorized by relocation agreements shall not be subject to any other design-related limitations not set forth within the relocation agreement itself. 5.No relocation agreement may be approved unless the City Council determines that it will accomplish the purposes of this chapter better than the status quo that it replaces. 6.No relocation agreement may provide for the construction or expansion of a sign in a Residential district or for automatic changeable copy in which copy can be changed or altered by electric, electro-mechanical,electronic,or any other artificial energy means,except as set forth in 20.360.002(A)(6). 7.A relocation agreement may provide for the installation of a Digital Billboard provided that the City Council finds that all of the following are met: a.The Digital Billboard is located in a non-residential district,adjacent to U.S.Highway 101. b.Installation of the Digital Billboard,containing up to two billboard faces,will result in a reduction of at least two billboard faces in the City for every digital billboard face installed. If a billboard applicant does not have sufficient existing billboard faces to remove within the City,the billboard applicant may request the City enter into a development agreement that will set forth the terms and conditions under which the billboard installation will be permitted to operate.The terms and conditions of such a development agreement may include,but are not limited to,the payment of fees,charges,and contributions as mutually agreed,and any such other terms which promote the public health,safety,and welfare in-lieu of applicant removing existing billboard(s)in order to satisfy the 2:1 removal-to-placement ratio requirement, as set forth in this subsection. c.Installation of the Digital Billboard will advance adopted policies contained in the General Plan, and any applicable Specific Plan or Area Plan. d.The Digital Billboard is operated in accordance with the operating standards set forth in Section 20.360.006(Q). B.Amend Section 20.360.006(Q)to clarify the allowed location of digital billboards along the US 101 corridor, as follows: Q.Digital Billboards.Digital Billboards are permitted pursuant to a relocation agreement under City of South San Francisco Printed on 10/1/2018Page 4 of 6 powered by Legistar™ File #:18-869 Agenda Date:9/26/2018 Version:1 Item #:16a. Section 20.360.002(A) above. Digital Billboards shall have the following operational limitations: 1.Maximum Number of Signs and Faces.Not more than three digital billboards,with two faces each,may be allowed within the City,and must be pursuant to the approval of a relocation agreement under Section 20.360.002(A). 2.Operational Limitations.Digital Billboards shall contain static messages only,and shall not contain any display with movement,or the appearance or optical illusion of movement during the static display period,or any part of the sign structure,including the movement or appearance of movement.Every static message contained on a Digital Billboard shall not include flashing or the varying of light intensity. 3.Minimum Display Time.Each message on the Digital Billboard must be displayed for a minimum of eight (8) seconds. 4.Face Size/Area.The maximum allowable face size for a Digital Billboard shall be one thousand two hundred (1200) square feet, excluding any cabinetry, framing or trim. 5.Light Level.Lighting levels will not increase by more than 0.3 foot candles (over ambient levels) as measured using a foot candle meter at a pre-set distance. a.Pre-set distances to measure the foot candles impact vary with the expected viewing distances of each size sign. Measurement distance criteria: Nominal Face Size Distance to be measured from Up to 14 feet x 48 feet 250 feet Up to 20 feet x 60 feet 350 feet 6.Light Sensor.Each display must have a light sensing device that will adjust the brightness as ambient light conditions change. 7.Alternative Lighting Technology.The technology currently being deployed for digital billboards is LED (light emitting diode),but there may be alternate,preferred and superior technology available in the future.Any other technology that operates under the maximum brightness stated in Section 20.360.006(Q)(5)shall not require an ordinance change for approval,unless the Planning Commission finds it in the best interest of the public to do so.The City shall expedite any required approvals for technology that is superior in energy efficiency over previous generations or types. 8.Malfunction.Digital Billboards shall be operated with systems and monitoring in place to either turn the display off or show a “full black” image on the display in the event of a malfunction. 9.Emergency Information.Owners of Digital Billboards are encouraged to coordinate with law enforcement and emergency management authorities to display,when appropriate,regional emergency information important to the traveling public including,but not limited to Amber Alerts or emergency management information. 10.Location.Digital Billboards shall only be permitted in a non-residential district south of Sister City of South San Francisco Printed on 10/1/2018Page 5 of 6 powered by Legistar™ File #:18-869 Agenda Date:9/26/2018 Version:1 Item #:16a. 10.Location.Digital Billboards shall only be permitted in a non-residential district south of Sister Cities Boulevard and north of the City’s southern boundary,and shall be located on parcels immediately adjacent to U.S.Highway 101.Notwithstanding the foregoing,Digital Billboards shall not be permitted on parcels adjacent to San Bruno Mountain or in a location that significantly blocks views of San Bruno Mountain. SECTION III.SEVERABILITY. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid or unconstitutional,the remainder of this Ordinance,including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect.To this end, provisions of this Ordinance are severable.The City Council of the City of South San Francisco hereby declares that it would have passed each section,subsection,subdivision,paragraph,sentence,clause,or phrase hereof irrespective of the fact that any one or more sections,subsections,subdivisions,paragraphs,sentences, clauses, or phrases be held unconstitutional, invalid, or unenforceable. SECTION IV.PUBLICATION AND EFFECTIVE DATE. Pursuant to the provisions of Government Code Section 36933,a summary of this Ordinance shall be prepared by the City Attorney.At least five (5)days prior to the Council meeting at which this Ordinance is scheduled to be adopted,the City Clerk shall (1)publish the Summary,and (2)post in the City Clerk’s Office a certified copy of this Ordinance.Within fifteen (15)days after the adoption of this Ordinance,the City Clerk shall (1) publish the summary,and (2)post in the City Clerk’s Office a certified copy of the full text of this Ordinance along with the names of those City Council members voting for and against this Ordinance or otherwise voting. This Ordinance shall become effective thirty (30) days from and after its adoption. ***** Introduced at a regular meeting of the City Council of the City of South San Francisco held the 12th day of September 2018. City of South San Francisco Printed on 10/1/2018Page 6 of 6 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-870 Agenda Date:9/26/2018 Version:1 Item #:16b. Ordinance adopting a Development Agreement to allow for the installation of a 60 foot tall,double faced, digital billboard on property located at 180 S Airport in exchange for removal of one double-sided billboard along San Mateo Ave (at Lowrie Ave) and one single-sided billboard on El Camino Real north of Arroyo Blvd. WHEREAS,Outfront Media (“Applicant”)owns or has a legal equitable interest in a property located at 180 South Airport (APN 015-122-050) (“Property”); and, WHEREAS,Applicant has submitted a development proposal to construct,operate and maintain an off-premise digital message center display (“Digital Billboard”) at the Property (“Project”); and, WHEREAS,in order to construct and operate the Project,Applicant seeks approval of an Area Plan Amendment, Zoning Text Amendment and Relocation Agreement; and, WHEREAS,as part of its application,the Applicant has sought approval of a Development Agreement,which would clarify and obligate several project features and mitigation measures,including payment of existing fees (such as customary permit fees),and certain future fees (including any applicable gross receipts business license tax in the event the City enacts such a tax); and, WHEREAS,approval of the Applicant’s proposal is considered a “project”for purposes of the California Environmental Quality Act, Pub. Resources Code § 21000, et seq. (“CEQA”); and, WHEREAS,the City Council adopted an Initial Study /Mitigated Negative Declaration (“IS/MND”)on August 26,2015 (State Clearinghouse number 2013062062)in accordance with the provision of CEQA and CEQA Guidelines,which analyzed the potential environmental impacts of billboards along the west side of U.S. Highway 101; and, WHEREAS,pursuant to CEQA Guidelines Section 15164,an addendum to the IS/MND was prepared for the Outfront Media Digital Billboard Project (“2018 Addendum”)analyzing the potential impacts of billboards along the east side of U.S.Highway 101,which was considered and recommended to the City Council for approval by a separate resolution of the Planning Commission; and WHEREAS,on June 7,2018 the Planning Commission for the City of South San Francisco held a lawfully noticed public hearing to solicit public comment and consider the 2018 Addendum and the proposed entitlements,take public testimony,at the conclusion of which,the Planning Commission recommended that the City Council find that the 2018 Addendum is the appropriate environmental document and approve the project, including the Development Agreement; and, WHEREAS,the City Council held a duly noticed public hearing on July 25,2018 which was continued to September 12,2018,to consider the Project entitlements and Development Agreement,and take publicCity of South San Francisco Printed on 10/11/2018Page 1 of 4 powered by Legistar™ File #:18-870 Agenda Date:9/26/2018 Version:1 Item #:16b. September 12,2018,to consider the Project entitlements and Development Agreement,and take public testimony. WHEREAS,by separate Resolution,the City Council reviewed and carefully considered the information in the 2015 IS/MND and the 2018 Addendum to the IS/MND (“2018 Addendum”),and finds that the 2018 Addendum is the appropriate environmental document; and, NOW, THEREFORE, the City Council of the City of South San Francisco does hereby ordain as follows: SECTION 1. Findings. That based on the entirety of the record before it,which includes without limitation,the California Environmental Quality Act,Public Resources Code §21000,et seq.(“CEQA”)and the CEQA Guidelines,14 California Code of Regulations §15000,et seq.;the South San Francisco General Plan and General Plan EIR; the South San Francisco Municipal Code;the Project applications;the Project Plans,as prepared by RMG Outdoor Inc.,dated March 29,2017;the Clear Channel Billboard Project and Related Zoning Amendment Initial Study/Mitigated Negative Declaration,including all appendices thereto;the 2018 Addendum to Initial Study/Mitigated Negative Declaration;all site plans,and all reports,minutes,and public testimony submitted as part of the Planning Commission’s duly noticed June 7,2018 meeting,and Planning Commission deliberations;all site plans,and all reports,minutes,and public testimony submitted as part of the City Council’s duly noticed July 25,2018 meeting which was continued to September 12,2018,and City Council deliberations;and any other evidence (within the meaning of Public Resources Code §21080(e)and §21082.2), the City Council of the City of South San Francisco hereby finds as follows: A.The foregoing recitals are true and correct and made a part of this Ordinance. B.The proposed Development Agreement (attached as Exhibit A)is incorporated by reference and made a part of this Ordinance, as if set forth fully herein. C.The documents and other material constituting the record for these proceedings are located at the Planning Division for the City of South San Francisco,315 Maple Avenue,South San Francisco,CA 94080, and in the custody of the Planning Manager. D.The Owner and City have negotiated a Development Agreement pursuant to Government Code section 65864 et seq.The Development Agreement,attached hereto as Exhibit A,sets for the duration,property, project criteria,and other required information identified in Government Code section 65865.2.Based on the findings in support of the Project,the City Council finds that the Development Agreement,vesting a project for a new digital billboard,is consistent with the objectives,policies,general land uses and programs specified in the South San Francisco General Plan,the East of 101 Area Plan as proposed for amendment, and any applicable zoning regulations. E.The City Council has independently reviewed the proposed Development Agreement,the General Plan, the South San Francisco Municipal Code,and applicable state and federal law,including Government Code section 65864,et seq.,and has determined that the proposed Development Agreement complies with all applicable zoning,subdivision,and building regulations and with the General Plan.The development contemplated in the Project and Development Agreement is consistent with the Zoning and Specific Plan standards,as proposed for amendment.This finding is based upon all evidence in the Record as a whole, including,but not limited to:the City Council’s independent review of these documents,oral and written City of South San Francisco Printed on 10/11/2018Page 2 of 4 powered by Legistar™ File #:18-870 Agenda Date:9/26/2018 Version:1 Item #:16b. including,but not limited to:the City Council’s independent review of these documents,oral and written evidence submitted at the public hearings on the Project,including advice and recommendations from City staff. F.The proposed Development Agreement for the Project states its specific duration.This finding is based upon all evidence in the Record as a whole,including,but not limited to:the City Council’s independent review of the proposed Development Agreement and its determination that Section 2 of the Development Agreement states that the Development Agreement shall expire thirty (30)years from the effective date of this Ordinance. G.The proposed Development Agreement incorporates the permitted uses,density and intensity of use for the property subject thereto,as reflected in the proposed Project (P17-0065),Area Plan Amendments (GPA17-0003),Zoning Text Amendment (ZA17-0005),Development Agreement (DA17-0003),and Relocation Agreement.This finding is based upon all evidence in the Record as a whole,including,but not limited to,the City Council’s independent review of the proposed Development Agreement and its determination that the Development Agreement sets forth the Project approvals,development standards,and the documents constituting the Project. H.The proposed Development Agreement states the maximum permitted height and size of proposed sign structures on the property subject thereto.This finding is based upon all evidence in the Record as a whole, including,but not limited to,the City Council’s independent review of the proposed Development Agreement and its determination that the Development Agreement sets forth the documents which state the maximum permitted height and size of sign structures. I.The proposed Development Agreement states specific provisions for reservation or dedication of land for public purposes.This finding is based on all evidence in the Record as a whole,including,but not limited to the City Council’s independent review of the Development Agreement. SECTION 2.Approval of Development Agreement. A.The City Council of the City of South San Francisco hereby approves the Development Agreement with Outfront Media attached hereto as Exhibit A and incorporated herein by reference. B.The City Council further authorizes the City Manager to execute the Development Agreement,on behalf of the City,in substantially the form attached as Exhibit A,and to make revisions to such Agreement, subject to the approval of the City Attorney,which do not materially or substantially increase the City’s obligations thereunder. SECTION 3.Severability. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid or unconstitutional,the remainder of this Ordinance,including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect.To this end, provisions of this Ordinance are severable.The City Council of the City of South San Francisco hereby declares that it would have passed each section,subsection,subdivision,paragraph,sentence,clause,or phrase hereof irrespective of the fact that any one or more sections,subsections,subdivisions,paragraphs,sentences, clauses, or phrases be held unconstitutional, invalid, or unenforceable. City of South San Francisco Printed on 10/11/2018Page 3 of 4 powered by Legistar™ File #:18-870 Agenda Date:9/26/2018 Version:1 Item #:16b. SECTION 4.Publication and Effective Date. Pursuant to the provisions of Government Code Section 36933,a summary of this Ordinance shall be prepared by the City Attorney.At least five (5)days prior to the Council meeting at which this Ordinance is scheduled to be adopted,the City Clerk shall (1)publish the Summary,and (2)post in the City Clerk’s Office a certified copy of this Ordinance.Within fifteen (15)days after the adoption of this Ordinance,the City Clerk shall (1) publish the summary,and (2)post in the City Clerk’s Office a certified copy of the full text of this Ordinance along with the names of those City Council members voting for and against this Ordinance or otherwise voting. This Ordinance shall become effective thirty (30) days from and after its adoption. ***** Introduced at a regular meeting of the City Council of the City of South San Francisco held the 12th day of September 2018. City of South San Francisco Printed on 10/11/2018Page 4 of 4 powered by Legistar™ 1 Recording Requested By: CITY OF SOUTH SAN FRANCISCO When Recorded Mail To: CITY OF SOUTH SAN FRANCISCO 400 Grand Avenue South San Francisco, CA 94083 Attn: City Clerk Mail Tax Statements To: OUTFRONT MEDIA LLC 1695 Eastshore Highway Berkeley, CA 94710 Attention: Jeff McCuen (Space above this line for Recorder’s use) This instrument is exempt from recording fees pursuant to Government Code Sec. 27383. Documentary Transfer Tax is $ 0.00 (exempt per Rev. & Taxation Code Sec. 11922, Transfer to Municipality). DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND OUTFRONT MEDIA LLC FOR OUTFRONT MEDIA DIGITAL BILLBOARD 2 DEVELOPMENT AGREEMENT This DEVELOPMENT AGREEMENT is dated as of ____________, 2018 (“Agreement”) and is entered into between: (i) OUTFRONT MEDIA LLC, a Delaware limited liability company (“Outfront Media”) and (ii) the CITY OF SOUTH SAN FRANCISCO, a municipal corporation organized and existing under the laws of the State of California (the “City”). Outfront Media and the City are sometimes collectively referred to herein as “Parties.” R E C I T A L S A. WHEREAS, California Government Code (“Government Code”) Sections 65864 through 65869.5 authorize the City to enter into binding development agreements with persons having legal or equitable interests in real property for the development of such property or on behalf of those persons having same; and, B. WHEREAS, pursuant to Government Code Section 65865, the City has adopted rules and regulations, embodied in Chapter 19.60 of the South San Francisco Municipal Code (“Municipal Code”), establishing procedures and requirements for adoption and execution of development agreements; and, C. WHEREAS, this Agreement concerns a property located at 180 South Airport Boulevard (APN 015-122-070) (“Property”) as identified and more fully described in attached Exhibit A; and, D. Section 5412 of the Outdoor Advertising Act (Bus. & Profs. Code, § 5200 et seq) encourages local governments and owners of billboards to enter into relocation agreements, pursuant to which local governments can continue development in a planned manner without expenditure of public funds, while allowing the continued maintenance of private investment and a medium of public communication; and, E. WHEREAS, Outfront Media has a legal or equitable leasehold interest in the Property; and, F. WHEREAS, Outfront Media has submitted a development proposal to the City, including requests for various amendments to the City’s Zoning Code (the “Zoning Code Amendment”) that would permit Outfront Media to construct, operate, repair, and maintain an off-premise digital message center display including digital displays, supporting structures, service ladders, underground utilities, fixture connections, electrical supply and connections, panels, signs, lights, electronics, copy and any additional equipment, appurtenances, and accessories necessary for the operation of the digital message center display (“Digital Billboard”), the specifications of which are set forth in Exhibit B, at the Property (“Digital Billboard Project”); and, G. WHEREAS, the development proposal to the City also includes a request for amendments to the City’s East of 101 Area Plan (the “Area Plan Amendment”), that would permit Outfront Media to construct, operate repair, and maintain the Digital Billboard Project at the Property; and, 3 H. WHEREAS, Outfront Media will enter into a separate relocation agreement with the City (“Relocation Agreement”) for the removal/relocation of existing billboards, which is identified in Exhibit C (“Removed Billboards”); and, I. WHEREAS, The City and Outfront Media agree and acknowledge that the outdoor advertising sign relocation contemplated by the Digital Billboard Project complies with, and serves the purposes enumerated in, Business & Professions Code sections 5200 et seq. (the “California Outdoor Advertising Act”), including, but not limited to, Sections 5412 and 5443.5 thereof; and, WHEREAS, the Digital Billboard Project is contingent upon approvals from the California Department of Transportation (“CalTrans”); and, J. WHEREAS, Outfront Media shall take down the Removed Billboards prior to commencing live operations of the Digital Billboard Project; and, K. WHEREAS, in-lieu of Outfront Media removing sufficient existing billboards in order to satisfy the 2:1 removal-to-placement ratio requirement, as set forth in the City’s Zoning Code section 20.360.002.A.6.b, Outfront Media has voluntarily elected to enter into this Agreement on the terms set forth herein in order to promote the public health, safety, and welfare of the City in accordance with section 20.360.002.A.6.b as amended by the Zoning Code Amendment; and, L. WHEREAS, Outfront Media and the City seek to enter into this Agreement to set forth the rights and obligations of the Parties relating to the development of the Properties; and, M. WHEREAS, all proceedings necessary for the valid adoption and execution of this Agreement have taken place in accordance with Government Code Sections 65864 through 65869.5, the California Environmental Quality Act (“CEQA”), and Chapter 19.60 of the Municipal Code; and, N. WHEREAS, the City Council and the Planning Commission have found that this Agreement is consistent with the objectives, policies, general land uses and programs specified in the South San Francisco General Plan as adopted on October 13, 1999 and as amended from time-to-time; and, O. WHEREAS, the City Council and the Planning Commission have found, based on substantial information in the administrative record, that: this Agreement is in the best public interest of the City and its residents; adopting this Agreement constitutes a present exercise of the City’s police power; that the Digital Billboard Project is, with adoption of the Zoning Code and Area Plan Amendments, compatible with the uses authorized in, and the regulations prescribed for, the land use district in which the real property is located; and that the terms of the Agreement are in conformity with, and will not be detrimental to, the public’s health, safety, convenience, and general welfare. This Agreement and the Digital Billboard Project will achieve a number of City objectives including the reduction of visual clutter, elimination of non-conforming signage, and facilitation of the orderly development, relocation, and distribution of existing displays to more appropriate locations within the City, while allowing for the 4 incorporation of modern technology into relocated displays that, in part, provide the City with a means of advertising the City, its events, and public service announcements; and, P. WHEREAS, on ___________, 2018, the City Planning Commission recommended the adoption of Ordinance No. _______ approving and adopting this Agreement after a duly noticed public hearing; and, Q. WHEREAS, on ___________, 2018, the City Council, after a duly noticed public hearing, adopted Ordinance No. _______ approving and adopting this Agreement and the Ordinance thereafter took effect on __________, 2018; and, R. WHEREAS, the City finds and determines that all actions required of City precedent to the approval of this Agreement by Ordinance No. ______ of the City Council have been duly and regularly taken; and, S. WHEREAS, in exchange for the benefits to the City described in the Agreement together with other public benefits that will result from the development of the Digital Billboard Project, Outfront Media will receive by this Agreement assurance that it may proceed with the Digital Billboard Project in accordance with the Digital Billboard Project Approvals, as defined below, and therefore desires to enter into this Agreement. A G R E E M E N T NOW, THEREFORE, the Parties, pursuant to the authority contained in Government Code Sections 65864 through 65869.5 and Chapter 19.60 of the Municipal Code and in consideration of the mutual covenants and agreements contained herein, agree as follows: 1. Effective Date Pursuant to Section 19.60.140 of the Municipal Code, notwithstanding the fact that the City Council adopts an ordinance approving this Agreement, this Agreement shall be effective and shall only create obligations for the Parties from and after the date that the ordinance approving this Agreement takes effect (the “Effective Date”). 2. Duration This Agreement shall be in effect for an initial term, commencing on the Effective Date and ending on the date which is thirty (30) years after the Commencement Date (as hereinafter defined). The “Commencement Date” is the first calendar day of the month following the date on which all of the following have occurred: (a) this Agreement is fully executed and effective; (b) the Relocation Agreement is fully executed and effective; (c) the Zoning Code Amendment is effective; (d) the Area Plan Amendment is effective; (e) Outfront Media has obtained all local and state governmental permits and approvals and any other required permits and approvals for the Digital Billboard Project, including but not limited to the Digital Billboard Project Approvals as defined in Section 3(a) below, (collectively, “Permits”); and (f) the Digital Billboard is fully operational with a permanent power supply. This Agreement may be terminated by Outfront Media with respect to the Digital Billboard 5 Project if the following occurs: (1) Outfront Media loses its legal or equitable interest in the respective Property, (2) in Outfront’s reasonable discretion, Outfront Media is unable to obtain or maintain any required Permit for the respective Project, (3) a legal challenge to the Project Approvals or the Digital Billboard Project, including without limitation a Project Approval Challenge as defined in Section 20, (4) a significant obstruction of a display occurs due to a circumstance beyond Outfront Media’s control, or (5) Outfront Media is prevented by law or government order or action from constructing, operating, or maintaining the Digital Billboard, or otherwise implementing the Project, including but not limited to by the failure of government agencies to issue all approvals or a governmental agency’s decision to condemn the Property . Upon expiration or early termination of this Agreement, Outfront Media shall, at its sole cost and expense, remove the above-ground portions of the Digital Billboard Project within ninety (90) days, unless Outfront Media and City have entered into a subsequent written agreement, upon terms mutually acceptable to both Parties, that allows the Digital Billboard Project to remain. 3. Project Description for Digital Billboard Project; Development Standards for Digital Billboard Project The Digital Billboard Project shall consist of the construction, operation, repair, and maintenance of the Digital Billboard to the specifications of which are set forth in Exhibit B, and shall be located at Property. a. The permitted use, the design, the maximum height, location, and total area of the Digital Billboard, and all environmental impact mitigation measures imposed as approval conditions for the Project shall be exclusively those provided in this Agreement, the Relocation Agreement, Zoning Amendment No. ZA__-____, Area Plan Amendment No. GPA__-____ and Negative Declaration No. ND__-____ all as set forth in Exhibit D to this Agreement, and the applicable laws in effect as of the Effective Date (including, but not limited to, the applicable provisions of the City’s General Plan, East of 101 Area Plan, Municipal Code, and all other City resolutions, codes, rules, laws, regulations, and policies governing topics that include without limitation the height, location, size, bulk, area, design, improvement and construction standards of billboards and public utilities in effect as of the Effective Date), except as modified in this Agreement (hereafter and collectively the “Digital Billboard Project Approvals”). b. The use permitted by this Agreement is for a digital billboard as defined in Section 20.360.015(J) of the South San Francisco Municipal Code, and the Digital Billboard Project Approvals provide that the maximum height of the Digital Billboard is 60 feet and that the maximum surface area for each display panels is limited to 672 square feet. c. Subject to Outfront Media’s fulfillment of its obligations under this Agreement and the Relocation Agreement being effective, upon the Effective Date of this Agreement, the City hereby grants to Outfront Media a vested right to develop 6 and construct on the Property all the improvements for the Digital Billboard Project in accordance with the Digital Billboard Project Approvals and the terms of this Agreement and the Relocation Agreement. d. Except as authorized by this Agreement, upon such grant of right, no future amendments to the City’s General Plan, East of 101 Area Plan, the Cit y Zoning Code, the Municipal Code, or other City ordinances, policies, planning documents, codes, rules, laws, resolutions, or regulations adopted or otherwise in effect after the Effective Date shall apply to the Digital Billboard Project, except any future modifications to ordinances, policies or regulations (if any) that are not in conflict with and do not prevent or materially inhibit the development or operation of the Digital Billboard Project; provided, however, that nothing in this Agreement shall prevent or preclude the City from adopting any land use regulations or amendments expressly permitted by this Agreement or otherwise required by State or Federal Law. e. In developing the Digital Billboard Project, Outfront Media shall implement the mitigation measures set forth in the Mitigation Monitoring and Reporting Program (the “MMRP”) attached hereto as part of Exhibit D and incorporated herein by this reference, which MMRP was approved concurrently with the approval of this Agreement for the Project. 4. Building Permits for Project City staff review of applications for building permits shall be limited to determining whether the following conditions are met: a. Outfront Media has complied with (1) the conditions and design of the Digital Billboard Project as specified in the City Council’s approval of the Digital Billboard Project and the Digital Billboard Project Approvals , (2) all applicable provisions of the Uniform Codes (i.e., building, fire, and electric codes) incorporated into the City’s Municipal Code, (3) the applicable requirements of the Municipal Code and MMRP, (4) any other applicable Federal and State Laws, as modified and/or clarified pursuant to this Agreement where applicable, and as each of the foregoing are applicable to the issuance of building permits; and, b. All applicable processing, administrative and legal fees have been paid subject to the provisions of this Agreement; and, c. Outfront Media has demonstrated through proper documentation that it has proper and sufficient legal and/or equitable interests in the Property to effectuate the Digital Billboard Project in accordance with the terms of this Agreement. Notwithstanding anything in this Section 4, the City agrees that the issuance of a building permit is not a discretionary decision triggering further CEQA review of the Digital Billboard Project, and that the above provisions of this Agreement pertaining to building permit issuance shall not be interpreted to require discretionary review or further CEQA review, but that staff are limited to determining, ministerially, whether the conditions and building standards in the foregoing subsections, entitlements, and 7 regulations have been satisfied. Upon obtaining a City building permit, Outfront shall diligently pursue the obtainment of all Caltrans/state permits and approvals. 5. Vesting of Approvals Except as provided in this Agreement and subject to Outfront Media’s fulfillment of its obligations under this Agreement and the Relocation Agreement being effective , upon the City’s approval of the Digital Billboard Project, Outfront Media and its successors and assigns shall have a vested right in the Digital Billboard Project Approvals for the term of this Agreement, provided that any such successors and assigns comply with the terms and conditions of this Agreement. 6. Cooperation between Parties in Implementation of This Agreement It is the Parties’ express intent to cooperate with one another and diligently work to implement all land use and building approvals for development of the Project in accordance with the terms of this Agreement. Outfront Media and the City shall proceed in a reasonable and timely manner, in compliance with the deadlines mandated by applicable agreements, statutes or ordinances, to complete all steps necessary for implementation of this Agreement and development of the Project in accordance with the terms of this Agreement. The City shall proceed, and shall cause its planners, engineers and other consultants to proceed, in a reasonably expeditious manner to complete all City actions required for the approval and development of the Project, including, but not limited to, the following: a. Scheduling all required public hearings by the City Council and City Planning Commission; and, b. Processing and checking all maps, plans, permits, building plans and specifications and other plans relating to development and/or improvement of the Properties filed by Outfront Media or its nominee, successor or assign as necessary for development of the Projects; and, c. Inspecting and providing acceptance of or comments on all work by Outfront Media that requires acceptance or approval by the City; and, d. Providing any necessary documents within the City’s possession or preparing documents or written consents that are, in the City’s sole discretion, reasonably necessary for Outfront Media to secure approvals for the Digital Billboard Project from other public agencies, such as Caltrans. Notwithstanding the foregoing, this provision is not intended to restrict the City’s discretion in considering or evaluating the Digital Billboard Project Approvals. Outfront Media shall provide or submit, and shall cause its planners, engineers and other consultants to provide or submit, to the City in a timely manner all documents, applications, plans and other information necessary for the City to carry out its obligations hereunder. Outfront Media shall make a deposit as determined by the City and shall pay all of the City’s staff, legal and consultants reasonable costs incurred in implementing this section. Notwithstanding the foregoing, the parties understand and 8 agree that the ultimate responsibility to obtain the required Approvals and state permits and approvals are the sole obligations and burdens of Outfront Media. 7. Fees and Taxes a. Outfront Media shall pay customary permit fees and any applicable gross receipts business license tax, in the event the City enacts such a tax. No additional fees, mitigations, conditions, exactions, dedications, fees or otherwise, whether adopted through the exercise of police power, the taxing power or any other authority, shall be imposed by the City with respect to the construction, operation,, repair, or maintenance of the Digital Billboard except as provided for herein. Notwithstanding anything to the contrary, no fee or permit shall be required for any change of copy or customary, routine maintenance in connection with the Digital Billboard. b. For and in consideration of the mutual rights and responsibilities provided in this Agreement, as long as Outfront Media operates such Digital Billboard faces, Outfront Media agrees to pay the City the annual amount of forty thousand dollars ($40,000) per Digital Billboard face per year (“Annual Payment”), payable on the first business day of the month following the Commencement Date and on the anniversary of such date each succeeding year. At the conclusion of the first five (5) years of the Annual Payment, the Annual Payment will increase by fifteen percent (15%) and will continue to increase by fifteen percent (15%) every five (5) years until the earlier of the expiration of this Agreement or the date upon which this Agreement or the Relocation Agreement is terminated. If the City ever adopts a gross receipts tax, Outfront Media’s annual payment of such gross receipts tax shall be deducted from this Annual Payment obligation. In the event Outfront Media’s annual payment of the City’s gross receipts tax is less than the Annual Payment, Outfront Media shall pay the remainder to the City, resulting in an annual payment to the City of not less than the Annual Payment for the Digital Billboard as illustrated below: If the Annual Payment equals $80,000 and the gross receipts tax obligation equals $20,000, Outfront Media will pay the City $20,000 for the gross receipts tax obligation and $60,000 for the Annual Payment obligation for a total payment of $80,000. In the event Outfront Media ceases to operate a Digital Billboard face due to (1) the loss of Outfront Media’s legal or equitable interest in the Property, (2) the failure to obtain or maintain any required Permit for the Digital Billboard, (3) a legal challenge to the Digital Billboard Project Approvals or the Digital Billboard Project, including without limitation a Project Approval Challenge as defined in Section 20 (4) a significant obstruction of Digital Billboard face occurs which is beyond Outfront Media’s control; or (5) Outfront Media is prevented by law or government order or action from constructing, operating, or maintaining the Digital Billboard, or otherwise implementing the Project, including but not limited to by the failure of government agencies to issue all approvals or a governmental agenc y’s decision to condemn the Property, the Payment for such face shall cease and 9 no further amounts shall be due or payable by Outfront Media to the City with respect to such face after such date under this Section 7(b). In the event Outfront Media elects in its sole discretion under the Relocation Agreement to replace a Digital Face on the Digital Billboard with a static billboard face beyond those four reasons enumerated above, Outfront Media’s obligation to pay the full Annual Payment ($80,000 per year) shall continue. c. For and in consideration of the mutual rights and responsibilities provided in this Agreement and the Relocation Agreement, Outfront Media agrees to provide the City with a one-time, non-refundable payment of one hundred and forty thousand dollars ($140,000) within one hundred and eighty (180) days of the Commencement Date. d. In-lieu of Outfront Media removing sufficient existing billboards in order to satisfy the 2:1 removal-to-placement ratio requirement, as set forth in the City’s Zoning Code section 20.360.002.A.6.b, Outfront Media has elected to and shall provide the City with a one-time payment of four hundred thousand dollars ($400,000) in order to promote the public health, safety, and welfare of the City in accordance with section 20.360.002.A.6.b as amended by the Zoning Code Amendment. Such payment will be made prior to commencing live operations of the Digital Billboard Project. e. Notwithstanding anything to the contrary, any sums already paid to CITY by Outfront Media during the year in which early termination or expiration has occurred shall be final and Outfront shall not be entitled to any reimbursement for those sums. 8. Additional Conditions a. Community Service Messages. Outfront Media will provide the City with free display time on the Digital Billboard for City-sponsored event announcements and non-commercial public service announcements to promote the civic interests of the City (“Community Service Messaging”) as follows: consistent with and as further described in the terms of the Relocation Agreement, the City shall be guaranteed, for purposes of Community Service Messaging, one (1) advertising spot lasting no more than eight (8) seconds in the standard rotation of eight (8) spots on one (1) digital display face, where such Community Service Messaging shall be so displayed for two (2) weeks in duration (collectively, the “Two-Week Advertising Spot”). The City shall be limited to one (1) Two-Week Advertising Spot for each calendar quarter. b. City Branding. The architecture of the Digital Billboard will be constructed substantially in conformance with the design depicted in attached Exhibit C. c. City Sign Regulations. Subject to the vested rights acquired by Outfront Media in this Agreement, including but not limited to those vested rights articulated in paragraphs 3.b and 5, the Digital Billboard will be consistent with City ordinances and regulations governing outdoor signs in all respects, except in relation to the exceptions articulated in this Agreement. 10 9. Indemnity a. Outfront Media agrees to indemnify, defend and hold harmless the City and its elected and appointed councils, boards, commissions, officers, agents, employees and representatives (collectively, the “City Indemnitees”) from any and all claims, costs (including reasonable legal fees and costs) and liability for any personal injury, death or property damage (collectively, “Claims”) which arise directly or indirectly as a result of any actions or inactions by Outfront Media, or any actions or inactions of Outfront Media’s contractors, subcontractors, agents or employees, in connection with the construction, improvement, operation or maintenance of the Digital Billboard Project, provided that Outfront Media shall have no indemnification obligation with respect to any such Claims (i) to the extent such Claims are solely attributable to the sole or gross negligence or willful misconduct of any City Indemnitee, (ii) to the extent arising out of or in connection with the maintenance, use or condition of any public improvement after the time it has been dedicated to and accepted by the City or another public entity (except as otherwise provided in an improvement agreement or maintenance bond, if applicable); or (iii) to the extent arising out of the City’s use of Community Services Messages under Section 8 of this Agreement. b. The Parties’ obligations under this Section 9 shall survive the expiration or earlier termination of this Agreement and shall be independent of any other applicable indemnity agreements. 10. Assignment a. Right to Assign. Outfront Media may at any time or from time to time transfer its right, title or interest in or to all or any portion of the Property. In accordance with Government Code Section 65868.5, with respect to either the Property or the Digital Billboard, the burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to Outfront Media as owners of all or any portion of Outfront Media’s interest in the Property or Digital Billboard. As a condition precedent to any such transfer, Outfront Media shall require the transferee to acknowledge in writing that transferee has been informed, understands and agrees that the burdens and benefits under this Agreement relating to such transferred property shall be binding upon and inure to the benefit of the transferee. b. Notice of Assignment or Transfer. No transfer, sale or assignment of Outfront Media’s rights, interests and obligations under this Agreement with respect to the Property or the Digital Billboard shall occur without prior written notice to the City and approval by the City Manager, which approval shall not be unreasonably withheld, conditioned or delayed. The City Manager shall consider and decide the matter within ten (10) days after receipt of Outfront Media’s notice, provided all reasonably necessary documents, certifications and other information are provided to the City Manager. c. Exception for Notice. Notwithstanding Section 10(b), Outfront Media may at any time, upon notice to the City but without the necessity of any approval by 11 the City, transfer its interest in the Property or Digital Billboard or any part thereof and all or any part of Outfront Media’s rights, interests and obligations under this Agreement to: (i) any subsidiary, affiliate, parent or other entity which controls, is controlled by or is under common control with Outfront Media, (ii) any member or partner of Outfront Media or any subsidiary, parent or affiliate of any such member or partner, or (iii) any successor or successors to Outfront Media by merger, acquisition, consolidation, non-bankruptcy reorganization or government action. As used in this subsection, “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies, whether through the ownership of voting securities, partnership interest, contracts (other than those that transfer Outfront Media’s interest in the Property of Digital Billboard to a third party not specifically identified in this subsection) or otherwise. d. Release upon Transfer. Upon the transfer, sale or assignment of all of Outfront Media’s rights, interests and obligations under this Agreement pursuant to Section 10(a), Section 10(b) and/or Section 10(c) of this Agreement (as applicable), Outfront Media shall be released from all obligations under this Agreement, with respect to the interests, including the Property and Digital Billboard, transferred, sold or assigned, to the extent such obligations arise subsequent to the date of the City Manager’s approval of such transfer, sale or assignment or the effective date of such transfer, sale or assignment, whichever occurs later; provided, however, that if any transferee, purchaser or assignee approved by the City Manager expressly assumes any right, interest or obligation of Outfront Media under this Agreement, Outfront Media shall be released with respect to such rights, interests and assumed obligations. In any event, the transferee, purchaser or assignee shall be subject to all the provisions hereof and shall provide all necessary documents, certifications and other reasonably necessary information prior to City Manager approval. e. Outfront Media’s Right to Retain Specified Rights or Obligations. Notwithstanding Section 10(a), Section 10(c) and Section 10(d), Outfront Media may withhold from a sale, transfer or assignment of this Agreement certain rights, interests and/or obligations which Outfront Media shall retain, provided that Outfront Media specifies such rights, interests and/or obligations in a written document to be appended to or maintained with this Agreement and recorded with the San Mateo County Recorder prior to or concurrently with the sale, transfer or assignment of one or both of the Properties. Outfront Media’s purchaser, transferee or assignee shall then have no interest in or obligations for such retained rights, interests and obligations and this Agreement shall remain applicable to Outfront Media with respect to such retained rights, interests and/or obligations. f. Time for Notice. Within ten (10) days of the date escrow closes on any such transfer, Outfront Media shall notify the City in writing of the name and address of the transferee. Said notice shall include a statement as to the obligations, including any mitigation measures, fees, improvements or other conditions of approval, assumed by the transferee. Any transfer which does not comply with the notice requirements of this Section 10(f) and of Section 10(b) shall not release Outfront Media from its obligations to the City under this 12 Agreement until such time as the City is provided notice in accordance with Section 10(b). 11. Insurance a. General Liability Insurance. During the term of this Agreement, Outfront Media shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than Five Million Dollars ($5,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. The general liability policy so maintained by Outfront Media shall be primary and non-contributory, and be endorsed using Insurance Services Office form CG 20 10 to provide that City and its officers, officials, employees, and agents shall be additional insureds under such policy. b. Workers’ Compensation Insurance. During the term of this Agreement, Outfront Media shall maintain Workers’ Compensation insurance for all of Outfront Media’s employees working at the Digital Billboard Project site as long as Outfront Media continues to operate the Digital Billboard. In addition, Outfront Media shall require each contractor and subcontractor engaged by Outfront Media for work at the Digital Billboard Project site to provide Workers’ Compensation insurance for its respective employees working at the Project site. c. Evidence of Insurance. Prior to City Council approval of this Agreement, Outfront Media shall furnish the City satisfactory evidence of the insurance required in Sections 11(a) and 11(b) and evidence that the carrier will endeavor to give the City thirty (30) days’ (ten (10) days for non-payment of premium) prior written notice in the event coverage is substantially changed, canceled, or non-renewed. Further, an endorsement must be attached to all policies stating that coverage is primary insurance with respect to the City and its officers, officials, employees and volunteers, and that no insurance or self-insurance maintained by the City shall be called upon to contribute to a loss under the coverage with respect to the liabilities assumed by Outfront Media under this Agreement. 1. During the term of this Agreement, in the event of a reduction (below the limits required in this Agreement) or cancellation in coverage, Outfront Media shall, prior to such reduction or cancellation, provide at least ten (10) days prior written notice to the City, regardless of any notification by the applicable insurer. If the City discovers that the policies have been cancelled or reduced below the limits required in this Agreement and that neither the insurer nor Outfront Media has provided prior notice to the City as required under this Agreement, said failure shall constitute a material breach of this Agreement. 2. During the term of this Agreement, in the event of a reduction (below 13 the limits required by this Agreement) or cancellation in coverage, Outfront Media shall have five (5) days in which to provide evidence of the required coverage being reinstated or replaced, during which time no persons shall enter the Properties to construct improvements thereon, including construction activities related to the landscaping and common improvements. 3. If Outfront Media fails to obtain reinstated or replacement coverage within five (5) days as required under the preceding subparagraph, the City may obtain, but is not required to obtain, substitute coverage and charge Outfront Media the cost of such coverage plus an administrative fee equal to ten percent (10%) of the premium for said coverage. 12. Covenants Run with the Land The terms of this Agreement are legislative in nature, and apply to Outfront Media’s interest in the Property and Digital Billboard as regulatory ordinances. During the term of this Agreement, all of the provisions, agreements, rights, powers, standards, terms, covenants and obligations contained in this Agreement shall run with the land and shall be binding upon the Parties and their respective heirs, successors (by merger, consolidation or otherwise) and assigns, devisees, administrators, representatives, lessees and all other persons or entities acquiring Outfront Media’s interest in the Property, any lot, parcel or any portion thereof, and any interest therein, whether by sale, operation of law or other manner, and they shall inure to the benefit of the Parties and their respective successors. 13. Conflict with State or Federal Law In the event that State or Federal laws or regulations enacted after the Effective Date prevent or preclude compliance with one or more provisions of this Agreement, such provisions of this Agreement shall be modified (in accordance with Section 14 set forth below) or suspended as may be necessary to comply with such State or Federal laws or regulations. Notwithstanding the foregoing, Outfront Media shall have the right to challenge, at its sole cost, in a court of competent jurisdiction, the law or regulation preventing compliance with the terms of this Agreement and, if the challenge in a court of competent jurisdiction is successful, this Agreement shall remain unmodified and in full force and effect. 14. Procedure for Modification Because of Conflict with State or Federal Laws In the event that State or Federal laws or regulations enacted after the Effective Date prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, the Parties shall meet and confer in good faith in a reasonable attempt to modify this Agreement to comply with such State or Federal law or regulation. Any such amendment or suspension of this Agreement shall be approved by the City Council in accordance with Chapter 19.60 of the Municipal Code. 15. Periodic Review 14 a. During the term of this Agreement, the City shall conduct “annual” and/or “special” reviews of Outfront Media’s good faith compliance with the terms and conditions of this Agreement in accordance with the procedures set forth in Chapter 19.60 of the Municipal Code. The City may recover reasonable costs incurred in conducting said review, including staff time expended and attorneys’ fees. b. The director of community development shall give Outfront thirty (30) calendar days’ advance notice of annual review or special review, by placing such notice to the developer into the U.S. Mail, first class, postage prepaid, and addressed to Outfront. c. At least five (5) calendar days prior to any hearing on any annual or special review, the City shall mail Outfront Media a copy of all staff reports and, to the extent practical, related exhibits. Outfront Media shall be permitted an opportunity to be heard orally or in writing regarding its performance under this Agreement before the City Council or, if the matter is referred to the Planning Commission, then before said Commission. Following completion of any annual or special review, the City shall give Outfront Media a written Notice of Action, which Notice shall include a determination, based upon information known or made known to the City Council or the City’s Planning Director as of the date of such review, whether Outfront Media is in default under this Agreement. Outfront Media. If the City finds and determines on the basis of the evidence given that Outfront Media has complied in good faith with the terms and conditions of the agreement during the period under review, the review for that period shall be concluded. If Outfront Media is determined to not be in good faith compliance with the terms of this Agreement and the Notice of Action includes a determination that Outfront Media is in default, the City shall specify the alleged nature of the default, set forth suggested or potential actions that the City may take if such default is not cured; otherwise, the provisions of Sections 18 and 19 shall govern the Parties’ rights. 16. Amendment or Cancellation of Agreement This Agreement may be further amended or terminated only in writing and in the manner set forth in Government Code Sections 65865.1, 65867.5, 65868, 65868.5 and Chapter 19.60 of the Municipal Code; and provided that this Agreement may be terminated by Outfront Media if Outfront Media no longer is operating the Digital Billboard, respectively due to the reasons enumerated in Section 7(b). Upon expiration or early termination of this Agreement, Outfront Media shall, at its sole cost and expense, remove the above-ground portions of the Digital Billboard Project within ninety (90) days, unless Outfront Media and City have entered into a subsequent written agreement, upon terms mutually acceptable to both Parties, that allows the Digital Billboard Project to remain. 17. Agreement is Entire Agreement 15 This Agreement, the Relocation Agreement, and all exhibits attached hereto or incorporated herein contain the sole and entire agreement between the Parties concerning Outfront Media’s entitlements to develop and improve the Property and construct, operate, repair, and maintain the Digital Billboard. This document supersedes all prior or contemporaneous agreements, representations, and negotiations (written, oral, express, or implied) and this Agreement may be modified only in accordance with Section 16 of this Agreement. The Parties acknowledge and agree that neither of them has made any representation with respect to the subject matter of this Agreement or any representations inducing the execution and delivery hereof, except representations set forth herein, and each Party acknowledges that it has relied on its own judgment in entering this Agreement. The Parties further acknowledge that all statements or representations that heretofore may have been made by either of them to the other are void and of no effect, and that neither of them has relied thereon in its dealings with the other. 18. Events of Default A Party shall be in default under this Agreement upon the happening of one or more of the following events (and the failure to cure after the expiration of the cure period in paragraph 19(e) below): a. If a warranty, representation or statement related to this Agreement or compliance therewith is made or furnished by such Party to the other Party in this Agreement that is false or proves to have been false in any material respect when it was made; or, b. In the case of Outfront Media, a finding and determination by the City made following an annual or special review under the procedure provided for in Government Code Section 65865.1 and Chapter 19.60 of the Municipal Code that, upon the basis of substantial evidence, Outfront Media has not complied in good faith with the terms and conditions of this Agreement or the Relocation Agreement is no longer in effect; or, c. Such Party fails to fulfill any of its obligations set forth in this Agreement and such failure continues beyond the cure period provided in paragraph 19(e) below. 19. Procedure upon Default; Legal Actions a. Upon the occurrence of an event of default (including expiration of the cure period in paragraph (e) below), the non-defaulting Party may, at its option, institute legal proceedings as provided below or may terminate this Agreement; provided, however, that any such termination by the City shall occur only in accordance with the provisions of Government Code Section 65865.1 and of Chapter 19.60 of the Municipal Code; and provided further, a default under the provisions relating to Digital Billboard Project shall limit the non-defaulting Party to the option of terminating this Agreement. b. The City shall not be deemed to have waived any claim of defect in Outfront 16 Media’s performance if, on annual or special review, the City does not propose to terminate this Agreement. c. No waiver or failure by either Party to enforce any provision of this Agreement shall be deemed to be a waiver of any other provision of this Agreement or of any subsequent breach of the same or any other provision. d. Any action for breach of this Agreement shall be decided in accordance with California law. In the event that suit shall be brought by either party to this Agreement, the parties agree that venue shall be vested exclusively in San Mateo County Superior Court, or, where otherwise appropriate, exclusively in the United States District Court, Northern District of California. Any Party may institute legal action to cure, correct or remedy any default, to enforce any covenant or agreement herein, to enjoin any threatened or attempted violation, or to enforce by specific performance the obligations and rights of the parties hereto. Except as provided below, in no event shall the City or its elected or appointed officials, directors, officers, members, partners, agents, employees or representatives be liable in monetary damages for any breach or violation of this Agreement, it being expressly understood and agreed that in addition to the right of termination (at the option of the non-defaulting Party), the sole legal or equitable remedy available to Outfront Media for a breach or violation of this Agreement shall be an action in mandamus, specific performance, injunctive or declaratory relief to enforce the provisions of this Agreement and any and all other available legal and equitable remedies, including, without limitation, the right to reconstruct the Removed Billboards in their existing or comparable locations and the right to any monetary reimbursement in connection with the loss of the Removed Billboards to the extent reconstruction is not feasible. e. A Party shall give the other Party written notice of any default by such other Party under this Agreement, and the defaulting Party shall have thirty (30) business days after the date of the notice to cure the default or to reasonably commence the procedures or actions needed to cure the default; provided, however, that if such default is not capable of being cured within such thirty (30) business day period but a cure is commenced within such thirty (30) business day period, the defaulting Party shall have such additional time to complete the cure as is reasonably necessary. f. In the event that either Party elects to terminate this Agreement due to default of the other Party, then Outfront Media agrees that it shall remove the above-ground portions of the Digital Billboard Project within ninety (90) days from the date of termination, unless Outfront Media and City have entered into a subsequent written agreement, upon terms mutually acceptable to both Parties, that allows the Digital Billboard Project to remain. 20. Attorneys’ Fees and Costs a. Action by Party. If legal action by either Party is brought because of breach of this Agreement or to enforce a provision of this Agreement, the prevailing Party 17 is entitled to reasonable attorneys’ fees and court costs. b. Action by Third Party. If any person or entity not a party to this Agreement initiates any legal or equitable action or proceeding to challenge the validity of any provision of this Agreement or the validity or implementation of the Digital Billboard Project Approvals or of the IS/MND (“Project Approval Challenge”), the Parties shall promptly notify the other Party of such claim and each party shall cooperate with the efforts of Outfront Media to defend such action or proceeding. Outfront Media agrees to pay all reasonable costs and expenses, including reasonable legal costs and reasonable attorney’s fees incurred in connection therewith. The City will not voluntarily assist the opposing party in any such claim or take any position adverse to Outfront Media in connection with such claim. In the event of a Project Approval Challenge, Outfront Media shall have the option to return any Digital Billboard face to a conventional non-digital display and the City shall not be entitled to claim any lost revenues or damages as a result of such election by Outfront Media. 21. Severability If any material term or condition of this Agreement is for any reason held by a final judgment of a court of competent jurisdiction to be invalid, and if the same constitutes a material change in the consideration for this Agreement, then either Party may elect in writing to invalidate this entire Agreement, and thereafter this entire Agreement shall be deemed null and void and of no further force or effect following such election. 22. No Third Parties Benefited No person other than the City, Outfront Media, and their respective successors is intended to or shall have any right or claim under this Agreement, this Agreement being for the sole benefit and protection of the Parties and their respective successors. Similarly, no amendment or waiver of any provision of this Agreement shall require the consent or acknowledgment of any person not a Party or successor to this Agreement. 23. Binding Effect of Agreement The provisions of this Agreement shall bind and inure to the benefit of the Parties originally named herein and their respective successors and assigns. 24. Relationship of Parties It is understood that this Agreement is a contract that has been negotiated and voluntarily entered into by the City and Outfront Media and that Outfront Media is not an agent of the City. The Parties do not intend to create a partnership, joint venture or any other joint business relationship by this Agreement. The City and Outfront Media hereby renounce the existence of any form of joint venture or partnership between them, and agree that nothing contained herein or in any document executed in connection herewith shall be construed as making the City and Outfront Media joint venturers or partners. Neither Outfront Media nor any of Outfront Media’s agents or contractors are or shall be considered to be agents of the City in connection with 18 the performance of Outfront Media’s obligations under this Agreement. 25. Bankruptcy The obligations of this Agreement shall not be dischargeable in bankruptcy. 26. Mortgagee Protection: Certain Rights of Cure a. Mortgagee Protection. The Parties hereto agree that this Agreement shall not prevent or limit Outfront Media from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust or other security device to securing financing. The City acknowledges that the lenders providing such financing may require certain Agreement modifications and City agrees upon request, from time to time, to meet with Outfront and representatives of such lenders to negotiate in good faith any such request for modification. . This Agreement shall be superior and senior to all liens placed upon the Properties by Outfront Media or any portion thereof after the date on which this Agreement or a memorandum of this Agreement is recorded with the San Mateo County Recorder, including the lien of any deed of trust or mortgage (“Mortgage”). Notwithstanding the foregoing, no breach hereof shall defeat, invalidate, diminish or impair the lien of any Mortgage made in good faith and for value, but all of the terms and conditions contained in this Agreement shall be binding upon and effective against all persons and entities, including all deed of trust beneficiaries or mortgagees (“Mortgagees”), who acquire title to Outfront Media’s interest in the Properties or any portion thereof by foreclosure, trustee’s sale, deed in lieu of foreclosure or otherwise. b. Mortgagee Not Obligated. No foreclosing Mortgagee shall have any obligation or duty under this Agreement to construct or complete the construction of any improvements required by this Agreement, or to pay for or guarantee construction or completion thereof. The City, upon receipt of a written request therefor from a foreclosing Mortgagee, shall permit the Mortgagee to succeed to the rights and obligations of Outfront Media under this Agreement, provided that all defaults by Outfront Media hereunder that are reasonably susceptible of being cured are cured by the Mortgagee as soon as is reasonably possible. The foreclosing Mortgagee thereafter shall comply with all of the provisions of this Agreement. c. Notice of Default to Mortgagee. If the City receives notice from a Mortgagee requesting a copy of any notice of default given to Outfront Media hereunder and specifying the address for service thereof, the City shall deliver to the Mortgagee concurrently with service thereof to Outfront Media, all notices given to Outfront Media describing all claims by the City that Outfront Media has defaulted hereunder. If the City determines that Outfront Media is in noncompliance with this Agreement, the City also shall serve notice of noncompliance on the Mortgagee, concurrently with service thereof on Outfront Media. Until such time as the lien of the Mortgage has been extinguished, the City shall: 19 1. Take no action to terminate this Agreement or exercise any other remedy under this Agreement, unless the Mortgagee shall fail, within thirty (30) days of receipt of the notice of default or notice of noncompliance, to cure or remedy or commence to cure or remedy such default or noncompliance; provided, however, that if such default or noncompliance is of a nature that cannot be remedied by the Mortgagee or is of a nature that can only be remedied by the Mortgagee after such Mortgagee has obtained possession of and title to one or both of the Properties, by deed-in-lieu of foreclosure or by foreclosure or other appropriate proceedings, then such default or noncompliance shall be deemed to be remedied by the Mortgagee if, within ninety (90) days after receiving the notice of default or notice of noncompliance from the City, (i) the Mortgagee shall have acquired title to and possession of one or both of the Properties, by deed- in-lieu of foreclosure, or shall have commenced foreclosure or other appropriate proceedings, and (ii) the Mortgagee diligently prosecutes any such foreclosure or other proceedings to completion. 2. If the Mortgagee is prohibited from commencing or prosecuting foreclosure or other appropriate proceedings by reason of any process or injunction issued by any court or by reason of any action taken by any court having jurisdiction over any bankruptcy or insolvency proceeding involving Outfront Media, then the times specified above for commencing or prosecuting such foreclosure or other proceedings shall be extended for the period of such prohibition. d. Performance by Mortgagee. Each Mortgagee shall have the right, but not the obligation, at any time prior to termination of this Agreement, to do any act or thing required of Outfront Media under this Agreement, and to do any act or thing not in violation of this Agreement, that may be necessary or proper in order to prevent termination of this Agreement. All things so done and performed by a Mortgagee shall be as effective to prevent a termination of this Agreement as the same would have been if done and performed by Outfront Media instead of by the Mortgagee. No action or inaction by a Mortgagee pursuant to this Agreement shall relieve Outfront Media of its obligations under this Agreement. e. Mortgagee’s Consent to Modifications. Subject to the sentence immediately following, the City shall not consent to any amendment or modification of this Agreement unless Outfront Media provides the City with written evidence of each Mortgagee’s consent, which consent shall not be unreasonabl y withheld, to the amendment or modification of this Agreement being sought. Each Mortgagee shall be deemed to have consented to such amendment or modification if it does not object to the proposed amendment or modification by written notice given to the City within thirty (30) days from the date written notice of such proposed amendment or modification is given by the City or Outfront Media to the Mortgagee. If such notice of the proposed amendment or modification is given solely by Outfront Media, then Outfront Media shall also provide the City with reasonable evidence of the delivery of such notice to the 20 Mortgagee. 27. Estoppel Certificate Either Party from time to time may deliver written notice to the other Party requesting written certification that, to the knowledge of the certifying Party, (i) this Agreement is in full force and effect and constitutes a binding obligation of the Parties; (ii) this Agreement has not been amended or modified either orally or in writing, or, if it has been amended or modified, specifying the nature of the amendments or modifications; and (iii) the requesting Party is not in default in the performance of its obligations under this Agreement, or if in default, describing therein the nature and monetary amount, if any, of the default. A Party receiving a request hereunder shall endeavor to execute and return the certificate within ten (10) days after receipt thereof, and shall in all events execute and return the certificate within thirty (30) days after receipt thereof. Failure of a Party to return a requested certificate in a timely manner shall not be deemed a default of the Party’s obligations under this Agreement and no cause of action shall arise based on such failure, but such Party shall thereupon be deemed to have certified that the statements in clauses (i) through (iii) of this Section are true, and the requesting Party and any third parties shall be entitled to rely upon such deemed certification. The City Manager shall have the right to execute any such certificate requested by Outfront Media hereunder provided the certificate is requested within six (6) months of any annual or special review. The City acknowledges that a certificate hereunder may be relied upon by permitted transferees and Mortgagees. At the request of Outfront Media, the certificates provided by the City establishing the status of this Agreement with respect to any lot or parcel shall be in recordable form, and Outfront Media shall have the right to record the certificate for the affected portion of the Property at Outfront Media’s cost. 28. Force Majeure Notwithstanding anything to the contrary contained herein, either Party shall be excused for the period of any delay in the performance of any of its obligations hereunder, except the payment of money, to the extent such performance is prevented or delayed by one or more of the following specific causes beyond such Party’s control: major weather differences from the normal weather conditions for the South San Francisco area, war, acts of God or of the public enemy, fires, explosions, floods, earthquakes, windstorms, invasions by non-United States armed forces, failure of transportation due to no fault of the Parties, unavailability of equipment, supplies, materials or labor when such unavailability occurs despite the applicable Party’s good faith efforts to obtain same (good faith includes the present and actual ability to pay market rates for said equipment, materials, supplies and labor), strikes of employees other than Outfront Media’s, freight embargoes, sabotage, riots, acts of terrorism, acts of the government, and litigation initiated by a non-Party challenging this Agreement or any of the Projects’ approvals or entitlements. The Party claiming such extension of time to perform shall send written notice of the claimed extension to the other Party within thirty (30) days from the commencement of the cause entitling the Party to the extension. 29. Eminent Domain 21 If the Digital Billboard or the Property, or any part thereof, is condemned by proper authorities; taken without the exercise of eminent domain, whether permanently or temporarily; or any right-of-way from which the Digital Billboard is visible is relocated, Outfront Media shall have the option to terminate this Agreement consistent with the terms of Section 2. The Parties agree that the Digital Billboard is owned solely by Outfront and that the underlying leasehold interest in the Property belongs solely to Outfront, and the City shall assert no rights in such interests held by Outfront Media, though the City shall not be prevented from asserting any rights against the condemning authority. Notwithstanding the above, nothing in this Agreement shall operate as a waiver of any rights Outfront might have to just compensation and other remedies provided by law in the event of an eminent domain action. 30. Rules of Construction and Miscellaneous Terms a. The singular includes the plural; the masculine gender includes the feminine; “shall” is mandatory, “may” is permissive. b. Time is and shall be of the essence in this Agreement. c. Where a Party consists of more than one person, each such person shall be jointly and severally liable for the performance of such Party’s obligations hereunder. d. The captions in this Agreement are for convenience only, are not a part of this Agreement and do not in any way limit or amplify the provisions thereof. e. This Agreement shall be interpreted and enforced in accordance with the laws of the State of California in effect on the date thereof. 31. Exhibits Exhibit A Property Map and Description Exhibit B Site Plans/Specifications for Digital Billboard Exhibit C Removed Billboards Exhibit D Mitigation Monitoring and Reporting Program for Digital Billboard Exhibit E Project Approvals 32. Recordation of Agreement Within ten days after the effective date of the development agreement, the City Clerk shall have the agreement recorded with the county recorder. 33. Notices 22 All notices required or provided for under this Agreement shall be in writing and delivered in person (to include delivery by courier) or sent by certified mail, postage prepaid, return receipt requested or by overnight delivery service, and shall be effective upon actual delivery as evidenced by the return receipt or by the records of the courier, overnight delivery service or other person making such delivery. Notices to the City shall be addressed as follows: City of South San Francisco Attn: City Clerk P.O. Box 711, 400 Grand Avenue South San Francisco, CA 94080 With a copy to: Economic and Community Development Department Attn: Alex Greenwood 400 Grand Avenue South San Francisco, CA 94080 With a copy to: City Attorney 400 Grand Avenue South San Francisco, CA 94080 Notices to Outfront Media shall be addressed as follows: OUTFRONT MEDIA LLC Attention: Jeff McCuen 1695 Eastshore Highway Berkeley, CA 94710 With a copy to: Rich Sauer EVP, General Counsel Outfront Media 405 Lexington Avenue New York, NY 10174 and Miller Starr Regalia Attention: Anthony Leones 1331 N. California Boulevard, Fifth Floor Walnut Creek, CA 94596 23 A party may change its address for notice by giving notice in writing to the other party and thereafter notices shall be addressed and transmitted to the new address. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 24 IN WITNESS WHEREOF this Agreement has been executed by the Parties on the day and year first above written. CITY: CITY OF SOUTH SAN FRANCISCO By: Mike Futrell, City Manager ATTEST: Krista Martenelli, City Clerk APPROVED AS TO FORM: Jason Rosenberg, City Attorney OUTFRONT MEDIA: OUTFRONT MEDIA OUTDOOR, LLC By: Its: __________________________________ 25 EXHIBIT A PROPERTY MAP AND DESCRIPTION 26 51 OTAD\54217\1258760.10 EXHIBIT B SITE PLAN/SPECIFICATIONS FOR DIGITAL BILLBOARD 28 OTAD\54217\1258760.10 EXHIBIT C REMOVED/RELOCATED BILLBOARDS Removed Billboards: • Billboard (one face) located at 1340 El Camino Real (n/o Arroyo Drive) APN (____________). • Billboard (two faces) located at 21 San Mateo Avenue (n/o San Mateo Avenue & Lowrie Avenue) APN (____________). 29 OTAD\54217\1258760.10 EXHIBIT D MITIGATION MONITORING AND REPORTING PROGRAM FOR THE DIGITAL BILLBOARD PROJECT 30 OTAD\54217\1258760.10 EXHIBIT E PROJECT APPROVALS [To be completed when the exact titles and resolution numbers for entitlements approved by the Planning Commission and the City Council are known.] 2964787.1 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-893 Agenda Date:9/26/2018 Version:1 Item #:17. Report regarding adoption of Ordinances repealing and replacing Chapters 20.380 “Inclusionary Housing Regulations”and 20.390 “Bonus Residential Density”of the South San Francisco Municipal Code to update the City’s inclusionary affordable housing program to include residential rental developments,revise requirements for residential for-sale developments,and conform to new State density bonus law.(Nell Selander, Economic & Community Development Deputy Director) RECOMMENDATION Staff recommends that the City Council adopt Ordinances repealing and replacing Chapters 20.380 “Inclusionary Housing Regulations”and 20.390 “Bonus Residential Density”of the South San Francisco Municipal Code to update the City’s inclusionary affordable housing program to include residential rental developments,revise requirements for residential for-sale developments,and conform to new State density bonus law. BACKGROUND/DISCUSSION The City Council previously waived reading and introduced the following Ordinances: Ordinance repealing and replacing South San Francisco Municipal Code Chapter 20.380,Inclusionary Housing Regulations,to update the City of South San Francisco’s inclusionary affordable housing program to include residential rental developments and revise requirements for residential for-sale developments (introduced on September 12, 2018; vote 3 - 1, Addiego/Normandy/Matsumoto - yes, Gupta - no). Ordinance repealing and replacing South San Francisco Municipal Code Chapter 20.390,Bonus Residential Density,to update the City of South San Francisco’s regulations implementing the State Density Bonus (introduced on September 12, 2018; vote 4 - 0). Councilmember Garbarino was absent from the September 12, 2018 meeting. The Ordinances are now ready for adoption. FISCAL IMPACT None. CONCLUSION The Ordinances are ready for adoption. City of South San Francisco Printed on 9/21/2018Page 1 of 1 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. Ordinance repealing and replacing South San Francisco Municipal Code Chapter 20.380,Inclusionary Housing Regulations,to update the City of South San Francisco’s inclusionary affordable housing program to include residential rental developments and revise requirements for residential for-sale developments. WHEREAS,the City of South San Francisco (“City”)aims to provide sufficient levels of affordable housing for its residents; and WHEREAS,in July of 2010,the City Council for the City of South San Francisco adopted a comprehensive update to the City’s zoning ordinance,which repealed the then-existing Title 20 of the South San Francisco Municipal Code (“Zoning Ordinance”),and replaced it with an entirely new Title that,among other actions,established new zoning districts,revised and reformatted many then-existing zoning provisions,eliminated inconsistent and outdated provisions,and codified entirely new zoning provisions, including new land use regulations and development standards; and WHEREAS,as part of the 2010 Zoning Ordinance Update,the City adopted Chapter 20.380 Inclusionary Housing Regulations, which require inclusionary below market rate housing units in new, for-sale residential development; and WHEREAS,the availability of housing is a substantial concern for individuals of all demographics,ages,and economic backgrounds in communities throughout the State of California; and WHEREAS,inclusionary housing regulations provide for below market rate housing within market rate residential developments, providing housing to a range of income levels; and WHEREAS,in 2017,the California State Legislature passed Assembly Bill 1505 (“AB 1505”),which overruled the 2009 decision by the California Court of Appeals in the case of Palmer/Sixth Street Properties L.P.v.City of Los Angeles to allow jurisdictions to once again require inclusionary affordable housing units in new,market-rate,rental developments; and WHEREAS,on April 8,2015 the City Council of the City of South San Francisco adopted its 2015-2023 Housing Element; and WHEREAS,the new,proposed Chapter 20.380 of the Zoning Ordinance implements Housing Element Goal I to “promote the provision of housing by both the private and public sectors for all income groups in the community;” and WHEREAS,the City’s objective,as established by the Housing Element,is to ensure that all residential developments, including all master planned and specific planned communities,provide a range of housing opportunities for all identifiable economic segments of the population, including households of very low-, low- and moderate-income; and WHEREAS,the City has prepared a new ordinance (the “Ordinance”)repealing and replacing South San Francisco Municipal Code Chapter 20.380,Inclusionary Housing Regulations,to update the City of South San Francisco’s inclusionary affordable housing program to include residential rental developments and revise requirements for residential for-sale developments; and WHEREAS,on August 16,2018,the Planning Commission for the City of South San Francisco held a lawfully noticed City of South San Francisco Printed on 10/1/2018Page 1 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. WHEREAS,on August 16,2018,the Planning Commission for the City of South San Francisco held a lawfully noticed public hearing to solicit public comment and consider the proposed Ordinance,take public testimony,and make a recommendation to the City Council; and WHEREAS, the Planning Commission unanimously recommended that the City Council adopt the Ordinance; and WHEREAS,to implement the affordable housing goals,policies,and programs of the City's Housing Element,the City Council proposes to adopt the Ordinance after a duly noticed public hearing; and WHEREAS,ten (10)days advance notice of the public hearing at which the Ordinance was considered was published in accordance Government Code Section 6062a; and WHEREAS,the Zoning Ordinance was adopted after preparation,circulation,consideration,and adoption of an Initial Study/Mitigated Negative Declaration (“IS/MND”)in accordance with the California Environmental Quality Act,Public Resources Code Sections 21000,et seq.(“CEQA”),in which the IS/MND analyzed the environmental impacts of adopting the Zoning Ordinance and concluded that adoption of the Zoning Ordinance could not have a significant effect on the environment because none of the impacts required to be analyzed under CEQA would exceed established thresholds of significance; and WHEREAS,the Planning Commission made findings that the Ordinance,as it relates to inclusionary housing is minor in nature,the adoption of which would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the IS/MND prepared for the Zoning Ordinance,nor does the Ordinance constitute a change in the project or change in circumstances that would require additional environmental review; and WHEREAS,the Planning Commission made findings that the Ordinance meets the purpose of the Zoning Ordinance and are consistent with the adopted General Plan because the Ordinance will reinforce the General Plan policies,are consistent with the relevant specific plans,and are consistent with the City’s overall vision for providing a diversity of housing types responsive to household size, income, and age needs. NOW,THEREFORE,THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1.Incorporation of Recitals The City Council of South San Francisco finds that all Recitals are true and correct and are incorporated herein by reference. SECTION 2.Amendments The City Council hereby repeals and replaces Chapter 20.380 to Title 20,the Zoning Ordinance,of the South San Francisco Municipal Code to read as follows: Chapter 20.380 INCLUSIONARY HOUSING REGULATIONS 20.380.001 Purpose and Intent 20.380.002 Definitions 20.380.003 Applicability of Inclusionary Housing Requirement 20.380.004 Inclusionary Housing Plans 20.380.005 Calculating the Required Number of Inclusionary Units 20.380.006 Affordable Housing Standards 20.380.007 Alternatives to Constructing New Inclusionary Units 20.380.008 Waiver of Requirements City of South San Francisco Printed on 10/1/2018Page 2 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. 20.380.009 Disposition of Excess Inclusionary Units 20.380.010 Offsets to the Cost of Affordable Housing Development 20.380.011 In-Lieu Fees 20.380.012 Collection of Fees 20.380.013Preliminary Project Application and Review Process <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii-20_380-20_380_013&frames=on> 20.380.014 Affordable Housing Agreement as a Condition of Development 20.380.015 Agreement Amendments <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii- 20_380-20_380_015&frames=on> 20.380.016 Period of Affordability <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii- 20_380-20_380_016&frames=on> 20.380.017 Pre-Existing Approvals <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii- 20_380-20_380_017&frames=on> 20.380.018 Enforcement <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii-20_380- 20_380_018&frames=on> 20.380.019 Savings Clause 20.380.001 Purpose and Intent The purpose and intent of this chapter is as follows: A.On April 8, 2015 the City Council of the City of South San Francisco (“City”) adopted its 2015-2023 Housing Element to the City General Plan. As established by the Housing Element, the objective of the City is to ensure that all residential development, including all master planned and specific planned communities, provide a range of housing opportunities for all identifiable economic segments of the population, including households of extremely low, very low, lower and moderate income. B.City Housing Element Chapter 6.1,entitled “Promote New Housing Development,”includes Goal I to “promote the provision of housing by both the private and public sectors for all income groups in the community.” C.Implementing Policy I-3 of the Housing Element provides that “[a]s feasible,the City will investigate new sources of funding for the City’s affordable housing programs.” D.There is a reasonable relationship between the need for affordable housing and the impacts of market rate residential development within the City.Development of new market rate residential projects increases the population of the City and generates additional resident demand for goods and services,and some of the employees needed to provide those goods and services earn incomes only adequate to pay for affordable housing; and E.Because affordable housing is in short supply within the City,these employees might otherwise be forced to live in less-than-adequate housing within the City,pay a disproportionate share of their incomes to live in adequate housing within the City,or commute ever-increasing distances to their jobs from housing located outside the City,thereby harming the City’s ability to attain goals articulated in the City’s General Plan. F.The City Council finds and determines that in order to provide sufficient affordable housing to achieve the City’s goal of providing a full range of affordable housing options to residents of the City,in accordance with the standards established in the general plan,housing element,and other applicable plans and regulations,residential development projects identified in Section 20.380.030 below shall provide inclusionary housing units,or provide one of the alternative means of compliance specified in this chapter,in order to mitigate the impacts of these residential development projects on affordable housing in the City. G.It is the policy of the City to: 1.Require that for rental residential development of five or more units for which applications are received and deemed complete during a period of one year from the effective date of this ordinance,a minimum of 10 City of South San Francisco Printed on 10/1/2018Page 3 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. received and deemed complete during a period of one year from the effective date of this ordinance,a minimum of 10 percent of the dwelling units in all such developments shall be inclusionary units; and 2.Require that for rental residential developments of five or more units for which applications are received and deemed complete upon and after the effective date of this ordinance,a minimum of 15 percent of the dwelling units in all such developments shall be inclusionary units; and 3.Require that for for-sale residential developments of five or more units for which applications are received and deemed complete upon and after the effective date of this ordinance,a minimum of 15 percent of the dwelling units in all such developments shall be inclusionary units; and 4.Allow inclusionary requirements,at the option of the applicant,to be satisfied through the payment of an in-lieu fee as an alternative to requiring inclusionary units to be constructed,and under certain conditions with City Council approval, allow other alternatives to constructing new inclusionary units on-site. H.The City Council finds and determines that this chapter will: 1.Encourage the development and availability of housing affordable to a broad range of households with varying income levels within the City as mandated by Government Code Section 65580, et seq. 2.Offset the demand for affordable housing that is created by new residential development and mitigate impacts that accompany new residential development by protecting the economic diversity of the City’s housing stock;reducing traffic,transit and related air quality impacts;promoting jobs/housing balance;and reducing the demands placed on transportation infrastructure in the region. 3.Promote the City’s policy to promote the provision of housing by both the private and public sectors for all income groups in the community, as identified by the Housing Element of the General Plan. 4.Support the Housing Element goal of encouraging high-quality residential development,as well as ensure a full range of affordable housing and the policies and actions that support this goal. 5.Support the Housing Element goal of providing suitable,decent,and affordable housing for its residents. 6.Support the guiding principle of the Housing Element that housing in South San Francisco supports increasing the range and diversity of housing options that will be an integral aspect of the City’s growth and development. 7.Support the guiding principle of the Housing Element that South San Francisco values diversity and strives to ensure that all households have equal access to the City’s housing resources. 8.Meet the housing needs identified by the Housing Element of the General Plan. 9.Encourage the production of the very low,low,and moderate-income units planned for by the Housing Element of the General Plan. I.Nothing in this chapter is intended to create a mandatory duty on the part of the City or its employees under the Government Tort Claims Act and no cause of action against the City or its employees is created by this chapter that would not arise independently of the provisions of this chapter. 20.380.002 Definitions Whenever the following terms are used in this chapter, they shall have the meaning established by this section: A.“Affordable housing”means,for the purposes of this chapter,housing that is affordable to families withCity of South San Francisco Printed on 10/1/2018Page 4 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. A.“Affordable housing”means,for the purposes of this chapter,housing that is affordable to families with very low, low, or moderate incomes. B.“Affordable housing agreement”means a legally binding agreement between an applicant and the City to ensure that the requirements of this chapter are satisfied in accordance with Section 20.380.014. C.“Affordable initial sales price”means a sales price for which allowable housing expenses do not exceed the following: 1.For an inclusionary unit sold to a moderate income household,allowable housing expenses do not exceed 35% x 110% of AMI for a household size appropriate to the unit. 2.For an inclusionary unit sold to a lower income household,allowable housing expenses do not exceed 30% x 70% of AMI for a household size appropriate to the unit. D.“Affordable rent” means allowable housing expenses do not exceed the following: 1.For an inclusionary unit rented to a very low income household,allowable housing expenses do not exceed 30% x 50% of AMI for a household size appropriate to the unit. 2.For an inclusionary unit rented to a lower income household,allowable housing expenses do not exceed 30% x 60% of AMI for a household size appropriate to the unit. E.“Allowable housing expense”means the total monthly or annual recurring expenses required of a household to obtain shelter. 1.For a for-sale unit,allowable housing expenses include loan principal and interest at the time of initial purchase by the homebuyer,allowances for property and mortgage insurance,property taxes,homeowners association dues and a reasonable allowance for utilities. 2.For a rental unit,allowable housing expenses include rent and a reasonable allowance for utilities,as well as all monthly payments made by the tenant to the lessor in connection with use and occupancy of a housing unit and land and facilities associated therewith,including any separately charged fees,utility charges,or service charges assessed by the lessor and payable by the tenant. 3.Allowable housing expense may be further defined by regulation prepared by the Economic and Community Development Department and adopted by the City Council. F.“Area median income”or “AMI”means the annual median income for San Mateo County,adjusted for household size,as published periodically in Section 6932 of Title 25 of the California Code of Regulations,or its successor provision.In the event such area median income figures are no longer published in the California Code of Regulations, area median income shall be as established by the City. G.“Conversion”means the change of status of a dwelling unit from a for-sale unit to a rental unit or vice versa. H.“Deemed complete”means an applicant has submitted all items listed on the Planning Application Checklist used upon the date the application is received,including all required plans and full payment of all required fees, and the Planning Division has determined each item contains all requested and relevant information pursuant to the review procedures set forth in Chapter 20.450 “Common Procedures” of the South San Francisco Municipal Code. I.“Density bonus”means a density increase in a residential development granted pursuant to Government Code Section 65915, et seq., and Chapter 20.390 of the Municipal Code. J.“Density bonus unit”means dwelling units approved in a residential development pursuant to City of South San Francisco Printed on 10/1/2018Page 5 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. J.“Density bonus unit”means dwelling units approved in a residential development pursuant to Government Code Section 65915,et seq.,and Chapter 20.390 of the Municipal Code,that are in excess of the maximum residential density otherwise permitted by the City general plan or zoning ordinance. K.“Dwelling unit”shall have the definition given for dwellings in Section 20.630.002 of the Municipal Code. L.“Financial assistance”means assistance to include,but not be limited to,the subsidization of fees, infrastructure,land costs,or construction costs,the use of funds from the City housing trust fund,the use of low and moderate income housing asset funds,community development block grant (CDBG)funds,HOME funds,or the provision of other direct financial aid in the form of cash transfer payments or other monetary compensation,by the City of South San Francisco. M.“For-sale unit”means a dwelling unit,including an attached or detached single family home, condominium, stock cooperative or community apartment, which is offered for sale to individual buyers. N.“Household size appropriate for the unit”means one person for a zero bedroom dwelling unit,two persons for a one bedroom dwelling unit,three persons for a two bedroom dwelling unit,four persons for a three bedroom dwelling unit, and five persons for a four bedroom dwelling unit. O.“Incentives”means concessions and incentives as described in Government Code Section 65915(k), granted by the City in accordance with Government Code Section 65915 and Chapter 20.390 of the Municipal Code. P.“Inclusionary housing project”means a new residential development or conversion of existing residential buildings which includes units reserved and made affordable to very low,lower or moderate-income households as required by this chapter. Q.“Inclusionary unit”means a dwelling unit that will be offered for rent or sale exclusively to and which shall be affordable to very low, lower or moderate income households, as required by this chapter. R.“Income”shall have the meaning as defined in Section 6914 of Title 25 of the California Code of Regulations,or its successor provision,as may be further defined by regulations of the Economic and Community Development Department. S.“In lieu fee”means a fee payable to the City instead of constructing inclusionary units as described in Section 20.380.011 of this chapter. T.“Lower income household”shall have the meaning as defined in California Health and Safety Code Section 50079.5. U.“Market-rate unit”means a dwelling unit where the rental rate or sales price is not restricted either by this chapter,Chapter 20.390 of the Municipal Code,or by requirements imposed through other local,state,or federal affordable housing programs. V.“Maximum resale price”means the maximum amount a for-sale inclusionary unit may be sold,except for the initial sale of the inclusionary unit, as provided in Section 20.380.006(F) of this chapter. W.“Moderate income household”shall have the meaning as defined in California Health and Safety Code Section 50093. X.“Offsets”means concessions or assistance to include,but not be limited to,direct financial assistance, density increases,modifications of standards or any other financial,land use,or regulatory concession which would result in an identifiable cost reduction enabling the provision of affordable housing. Y.“Reasonable allowance for utilities”means the utility allowance published by the Housing Authority of City of South San Francisco Printed on 10/1/2018Page 6 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. Y.“Reasonable allowance for utilities”means the utility allowance published by the Housing Authority of the County of San Mateo from time to time.If the foregoing utility allowance is no longer published,then a reasonable allowance for utilities shall be calculated based upon comparable governmental published figures as determined by regulation of the City. Z.“Rental unit” means a dwelling unit that is not a for-sale unit. AA.“Residential development”means any new residential construction of rental or for-sale units;or development revisions,including those with and without a master plan or specific plan,planned unit developments,site development plans,mobilehome developments and conversions of apartments to condominiums,as well as dwelling units for which the cost of shelter is included in a recurring payment for expenses,whether or not an initial lump sum fee is also required. BB.“Total dwelling units”means the total units approved by the final decision making authority.Total dwelling units are composed of both market rate units and inclusionary units.For purposes hereof,total dwelling units does not include density bonus units. CC.“Utilities”means garbage collection,sewer,water,electricity,gas and other heating,cooling,cooking and refrigeration fuels for a dwelling unit. Utilities does not include telephone, cable or internet service. DD.“Very low income household”shall have the meaning as defined in California Health and Safety Code Section 50105.For purposes hereof,very low income households shall include extremely low income households,as defined in California Health and Safety Code Section 50106. 20.380.003 Applicability of Inclusionary Housing Requirement A.The requirements of this chapter shall apply as follows: 1.This chapter shall apply to all residential market-rate dwelling units resulting from new construction of for-sale and rental residential developments consisting of five or more dwelling units,as well as the conversion of apartments to condominiums or condominiums to apartments. 2.An applicant shall not avoid the requirements of this chapter by submitting piecemeal planning permit applications.For purposes of this chapter a residential development shall include all contiguous property under common ownership and control. B.The requirements of this chapter shall not apply to the following: 1.Existing residences which are altered,improved,restored,repaired,expanded or extended, provided that the number of dwelling units is not increased,except that this chapter shall pertain to the subdivision of land for the conversion of apartments to condominiums or condominiums to apartments; 2.Conversion of a mobile home park; 3.The construction of a new residential structure which replaces a residential structure that was destroyed or demolished within two years prior to the approval of a building permit for the new residential structure, provided that the number of dwelling units is not increased from the number of dwelling units of the previously destroyed or demolished residential structure; 4.Accessory dwelling units not constructed to fulfill inclusionary housing requirements and developed in accordance with Section 20.350.035 (“Accessory Dwelling Units”); 5.Those dwelling units which have obtained approval of a vesting tentative map or a development agreement prior to the effective date of the ordinance codified in this chapter,as set forth in Section 20.380.017 (“Pre- City of South San Francisco Printed on 10/1/2018Page 7 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. Existing Approvals”). 6.Applications for rental residential dwelling units that are deemed complete prior to the effective date of this ordinance. 20.380.004 Inclusionary Housing Plans Applications for planned unit development permits,tentative maps,vesting tentative maps,and other land use entitlements that seek approval of a residential development project of five or more dwelling units shall submit an inclusionary housing plan as follows: A.All applications approved or deemed complete on or after the effective date of the ordinance codified in this chapter are required by this chapter to provide an inclusionary housing plan with the application for development. The inclusionary housing plan will include appropriate text,maps,tables,or figures to establish the basic framework for implementing the requirements of this chapter. It shall establish, at a minimum, but shall not be limited to, the following: 1.The number of market rate units in the master plan or specific plan; 2.The number of required inclusionary units for very low,lower and moderate income households in the project, including the specific levels of affordability; 3.The location of the inclusionary units,including,but not limited to,any sites for locating off-site inclusionary housing projects; 4.Acknowledgement that an affordable housing agreement shall be a condition of all future discretionary permits for the development area such as tentative maps,parcel maps,planned unit developments and site development plans.The affordable housing agreement shall be consistent with Section 20.380.014 (“Affordable Housing Agreement as a Condition of Development”). B.The location and phasing of inclusionary dwelling units may be modified by the body granting final approval of the project as a condition of approval for the project. C.All existing planned unit development permits,Conditional Use Permits,master plans or specific plans proposed for major amendment,pursuant to Chapter 20.530 (“Specific Plans and Plan Amendments”),shall incorporate into the amended master plan or specific plan document an affordable housing agreement, consistent with this section. D.In the event the residential development obtains a density bonus,the affordable housing agreement shall also contain the terms of the agreement required pursuant to Government Code Section 65915,et seq.,and Chapter 20.390 of the Municipal Code. 20.380.005 Calculating the Required Number of Inclusionary Units A.The requirements for rental residential developments,which shall apply to both construction of rental units and conversion of for-sale units to rental units, are as follows: 1.For rental residential developments consisting of five or more units for which applications are received and deemed complete during a period of one year from the effective date of this ordinance,a minimum of 10 percent of the dwelling units in all such developments shall be inclusionary units designated for lower income households. 2.For rental residential developments consisting of five or more units for which applications are received and deemed complete upon and after one year from the effective date of this ordinance,a minimum of 15 percent of the dwelling units in all such development shall be inclusionary units with two-thirds designated for lower income households and one-third designated for very low income households. B.The requirements for for-sale residential developments,which shall apply to both construction of for-saleCity of South San Francisco Printed on 10/1/2018Page 8 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. B.The requirements for for-sale residential developments,which shall apply to both construction of for-sale units and conversion of rental units to for-sale units, is as follows: 1.For for-sale residential developments of five or more units for which applications are received and deemed complete upon and after the effective date of this ordinance,a minimum of 15 percent of the dwelling units in all such developments shall be inclusionary units with 50 percent designated for moderate income households and 50 percent designated for lower income households. C.If the calculation of the required total number of inclusionary units results in a fraction of one-half or greater,the number of inclusionary units shall be rounded up to the next whole number.If the calculation of the required total number of inclusionary units results in a fraction of less than one-half,the fractional amount shall be provided to the City through payment of an in lieu fee as provided in Section 20.380.011 hereof.(For example,if 6.4 inclusionary units are required for a for-sale residential development,the applicant would be required to construct six inclusionary units and pay an in lieu fee for 0.4 units). D.Where the calculation of the designated income levels of inclusionary units results in a fractional number, the number of inclusionary units designated at each required income level shall be rounded toward the higher income level.(For example,if seven inclusionary units are required for a for-sale residential development,four would be designated for moderate income households and three would be designated for lower income households). E.The applicant may voluntarily elect to provide more inclusionary units at a lower income or very low income level than required by this chapter.Voluntarily providing more units at a lower affordability level than otherwise required under this section shall satisfy the applicant’s requirements related to affordability distribution,provided the applicant has provided the total required number of inclusionary units. 20.380.006 Affordable Housing Standards The affordable housing standards are as follows: A.All residential developments subject to this chapter must satisfy the inclusionary housing requirements of this chapter,notwithstanding an applicant’s request to process a residential development under other program requirements,laws or regulations.Affordable units provided in order to obtain a density bonus under Chapter 20.390 (“Bonus Residential Density”),which otherwise meet the requirements of this chapter,shall qualify as inclusionary units for purposes of this chapter. B.Unless an alternative method of compliance is allowed pursuant to Section 20.380.007 of this chapter, inclusionary units shall be built on the residential development project site. C.The required inclusionary units shall be constructed concurrently with market-rate units unless both the final decision-making authority of the City and applicant agree within the affordable housing agreement to an alternative schedule for development.The schedule for construction of inclusionary units shall be included in the affordable housing agreement. D.Inclusionary units which are rental units shall be made available and rented to the designated income group at an affordable rent for 55 years from the date of a final certificate of occupancy for the project.Notwithstanding anything to the contrary in this chapter,no inclusionary rental unit shall be rented for an amount which exceeds 90 percent of the actual rent charged for a comparable market-rate unit in the same residential development, if any. E.Inclusionary units which are for-sale units shall remain affordable for a term of 55 years from the date of a final certificate of occupancy for the inclusionary unit,and a resale restriction containing such affordability term shall be filed and recorded as a restriction on those individual lots,units or projects which are designated as inclusionary for- sale units. F.The initial sale of inclusionary for-sale units shall be at an affordable initial sales price.The maximum City of South San Francisco Printed on 10/1/2018Page 9 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. F.The initial sale of inclusionary for-sale units shall be at an affordable initial sales price.The maximum resale price at which an owner of an inclusionary for-sale unit may sell that inclusionary unit shall be annually adjusted by the percentage increase or decrease in area median income for a family of four in effect between the date of the owner’s purchase and the date of the owner’s sale of the inclusionary unit.The maximum resale price shall be increased by the market value,if any,of any documented,permanent capital real estate or fixed improvements to the inclusionary unit approved by City.As a condition of obtaining such an adjustment,the owner shall present to the City written documentation of all expenditures made by owner for which an adjustment is requested.The maximum resale price shall be decreased by the amount necessary to repair any damages and to put the unit into a sellable condition,including items such as paint,cleaning,construction repairs,and to bring said unit into conformity with all applicable provisions of the City Municipal Code and the affordable housing guidelines established by the City.The amount of price adjustments shall be reasonably determined by the City. The resulting price shall be the maximum resale price of the inclusionary unit. G.The design of the inclusionary units shall be consistent with General Plan standards;compatible with the design of the total project development in terms of appearance,materials and finished quality and conform to General Plan standards;and consistent with affordable housing development standards prepared by the Department of Economic and Community Development as adopted by the City Council.The distribution of the size of inclusionary units,as measured by the number of bedrooms in an inclusionary unit,shall be in the same proportion as the distribution of the size of market rate units,as measured by the number of bedrooms in the market rate units.Residents of inclusionary units shall be entitled to use all of the same amenities and facilities of the residential development as residents of market rate units within the residential development. H.No building permit shall be issued,nor any development approval granted for a residential development which does not meet the requirements of this chapter.No inclusionary unit shall be rented or sold except in accordance with this chapter. 20.380.007 Alternatives to Constructing New Inclusionary Units Each applicant may,at the sole discretion of the applicant,elect to pay the in lieu fee as provided in Section 20.380.011 of this chapter instead of the construction of new inclusionary units within the residential development.In addition to the foregoing,and notwithstanding any contrary provisions of this chapter,the City may,at the sole discretion of the City Council,determine that one or more of the following alternatives A through E to the construction of new inclusionary units within the residential development is acceptable.Such determination shall be based on findings that new construction would be infeasible or present unreasonable hardship in light of such factors as project size,site constraints,market competition,price and product type disparity,applicant capability,and financial subsidies available. Evidence must be submitted to the City Manager or his or her designee and included in the request for any approval of alternatives to the construction of new inclusionary units. A.Off-Site Construction.The applicant may construct some or all of the inclusionary units at a location within the City outside of the residential development.Off-site inclusionary units should,if feasible,be located on sites that are in proximity to or will provide access to employment opportunities,urban services,or major roads or other transportation and commuter rail facilities and that are compatible with adjacent land uses. B.Dedication of Land.The applicant may donate land to the City or to the designee of the City.The land shall meet all of the requirements of Government Code Section 65915(g).The value of the land shall be not less than the sum of the in-lieu fee that would be due under Section 20.380.011 of this chapter.The valuation of any land offered in- lieu shall be determined by an appraisal made by an appraiser mutually agreed upon by the City and the applicant.Costs associated with the appraisal shall be borne by the applicant. C.Construction of Accessory Dwelling Units.The applicant may construct accessory dwelling units which shall be rented to very low and lower income households at an affordable rent,in accordance with an affordable housing agreement. D.Funding of Affordable Housing Project.The applicant may make a contribution to a special needs housing project or program or other affordable housing project.The requisite contribution shall be calculated in the same City of South San Francisco Printed on 10/1/2018Page 10 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. housing project or program or other affordable housing project.The requisite contribution shall be calculated in the same manner as an in-lieu fee per Section 20.380.011 (“In-lieu Fees”). E.The City Council may approve other alternatives to the construction of new inclusionary units within the residential development where the proposed alternative supports specific housing element policies and goals of the City and assists the City in meeting its state housing requirements.Alternatives may include,but are not limited to,acquisition and rehabilitation of affordable units,conversion of existing market units to affordable units,or construction of special needs housing projects or programs (shelters, transitional housing, etc.). 20.380.008 Waiver of Requirements Applicants may apply to the City for a waiver,adjustment or reduction of the requirements of this chapter.In connection with such a request,the applicant shall present evidence to the City in support of the request.The City may approve or disapprove an application for waiver,adjustment or reduction in its sole discretion,provided that the City shall approve requests for waiver,adjustment or reduction when the application of this chapter to a residential development would result in a taking of property in violation of the United States or California Constitutions or otherwise be contrary to applicable law. 20.380.009 Disposition of Excess Inclusionary Units Inclusionary units created which exceed the final requirement for a residential development may,subject to City Council approval in the affordable housing agreement,be utilized by the applicant to satisfy inclusionary requirements for other residential developments of the applicant or other developers. 20.380.010 Offsets to the Cost of Affordable Housing Development The City shall consider making offsets available to applicants when necessary to enable residential developments to provide a preferable product type or affordability in excess of the requirements of this chapter. A.Offsets may be offered by the City to the extent that resources and programs for this purpose are available to the City and approved for such use by the City Council,and to the extent that the residential development, with the use of offsets,assists in achieving the City’s housing goals.If the City makes available programs to provide offsets, applicants may make application for such programs. B.The City’s evaluation of requests for offsets shall be based on the effectiveness of the offsets in achieving a preferable product type and/or affordability objectives as set forth within the housing element;the capability of the development team;the reasonableness of development costs and justification of subsidy needs;and the extent to which other resources are used to leverage the requested offsets. C.Nothing in this chapter establishes,directly or through implication,a right of any applicant to receive any offsets from the City or any other party or agency to enable the applicant to meet the obligations established by this chapter. D.Offsets may include incentives provided by the City to residential developments qualifying for a density bonus pursuant to the provisions of Chapter 20.390. E.Any offsets approved by the City Council shall be described in the affordable housing agreement. F.Applicants are encouraged to utilize local,state or federal assistance,when available,to meet the affordability standards set forth in this chapter. City of South San Francisco Printed on 10/1/2018Page 11 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. 20.380.011 In-Lieu Fees Payment of an in-lieu fee to the City instead of construction of inclusionary units is permitted as follows: A.For any residential development or development revision consisting of five or more dwelling units,the applicant may elect to satisfy the inclusionary unit requirements through the payment to the City of an in-lieu fee. B.The in-lieu fee to be paid for each inclusionary dwelling unit shall be determined by resolution of the City as approved by the City Council from time-to-time. C.In lieu-fees shall be paid at the time a building permit is issued for the development. D.Where an applicant elects to pay an in lieu fee instead of the development of inclusionary units,any approvals for the residential development shall be conditioned upon a requirement to pay the in-lieu fee in an amount established by the chapter in effect at the time of payment. 20.380.012 Collection of Fees All in-lieu fees collected hereunder shall be deposited in a housing trust fund.The housing trust fund shall be administered by the City and shall be used only for the purpose of providing funding assistance for the provision of affordable housing and reasonable costs of administration consistent with the policies and programs contained in the housing element of the General Plan. 20.380.013 Preliminary Project Application and Review Process <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii-20_380-20_380_013&frames=on> The preliminary project application/review process shall be as follows: A.An applicant of a residential development, proposing an inclusionary housing project shall have an approved site development plan prior to execution of an affordable housing agreement for the project. The applicant may submit a preliminary application to the director of the Department of Economic and Community Development prior to the submittal of any formal applications for such housing development. The preliminary application shall include the following information if applicable: 1.A brief description of the proposal, including the number of inclusionary units proposed; 2.The zoning, General Plan designations and assessor’s parcel number(s) of the project site; 3.A site plan, drawn to scale, which includes: building footprints, driveway and parking layout, building elevations, existing contours and proposed grading; and 4.A letter identifying what specific offsets, incentives and/or adjustments are being requested of the City. Justification for each request should also be included. B.Within 30 days of receipt of the preliminary application by the planning director for projects not requesting offsets or incentive adjustments, or ninety days for projects requesting offsets or incentive adjustments the Economic and Community Development Department shall provide to an applicant, a letter which identifies project issues of concern, the offsets and incentive adjustments that the City Manager or his or her designee can support when making a recommendation to the final decision-making authority, and the procedures for compliance with this chapter. The applicant shall also be provided with a copy of this chapter and related policies, the pertinent sections of the California codes to which reference is made in this chapter and all required application forms. 20.380.014 Affordable Housing Agreement as a Condition of Development This chapter requires the following: A.Applicants subject to this chapter shall demonstrate compliance with this chapter by executing an affordable housing agreement prepared by the Department of Economic and Community Development and submitted to the applicant for execution.Agreements which conform to the requirements of this section and which do not involve requests for offsets and/or incentives,other than those permitted by right,if any,shall be reviewed by the City Manager or City of South San Francisco Printed on 10/1/2018Page 12 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. requests for offsets and/or incentives,other than those permitted by right,if any,shall be reviewed by the City Manager or his or her designee and approved by the City Manager or his or her designee. B.Agreements which involve requests for offsets and/or incentives,or for alternate means of compliance with the inclusionary housing requirements,other than those permitted by right,shall require the recommendation of the Department of Economic and Community Development and action by the City Council as the final decision-maker. C.Following the approval and execution by all parties,the affordable housing agreement with approved site development plan shall be recorded against the entire development,including market-rate lots and units and the relevant terms and conditions therefrom filed and subsequently recorded as a separate deed restriction or regulatory agreement on the affordable project individual lots or units of property which are designated for the location of inclusionary units. D.The approval and execution of the affordable housing agreement shall take place prior to final map approval and shall be recorded upon final map recordation or,where a map is not being processed,prior to the issuance of building permits for such lots or units. E.The affordable housing agreement may require that more specific project and/or unit restrictions be recorded at a future time. F.The affordable housing agreement shall provide that the project applicant pay an administrative fee to reimburse the City for all administrative and processing costs and fees incurred in processing the affordable housing plan and implementing the requirements of this chapter on a project specific basis.The City may waive the administrative fee as an incentive or offset for the provision of inclusionary units. G.The affordable housing agreement shall bind all future owners and successors in interest for the term of years specified therein. H.An affordable housing agreement,for which the inclusionary housing requirement will be satisfied through new construction of inclusionary units,either on-site or off-site,shall establish,but not be limited to,the following: 1.The number of inclusionary dwelling units proposed,with specific calculations detailing the application of any incentive adjustment credit; 2.The unit square footage, and number of bedrooms; 3.The location of the inclusionary units; 4.Amenities and services provided,such as daycare,after school programs,transportation,job training/employment services and recreation; 5.Level and tenure of affordability for inclusionary units; 6.Schedule for production of dwelling units; 7.Approved offsets provided by the City; 8.Where applicable,requirements for other documents to be approved by the City,such as marketing,leasing and management plans;financial assistance and loan documents;resale agreements;and monitoring and compliance plans; 9.Where applicable,identification of the affordable housing developer and agreements specifying their role and relationship to the project. 10.An affordable housing agreement,for which the inclusionary housing requirement will be satisfied through payment to the City of any in-lieu contributions other than fee monies,such as land dedication,shall City of South San Francisco Printed on 10/1/2018Page 13 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. satisfied through payment to the City of any in-lieu contributions other than fee monies,such as land dedication,shall include the method of determination, schedule and value of total in-lieu contributions. 11.An affordable housing agreement will not be required for projects which will be satisfying their inclusionary housing requirement through payment to the City of an in-lieu fee unless the applicant requests payment options not provided by this chapter. 20.380.015 Agreement Amendments <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii-20_380- 20_380_015&frames=on> Any amendment to an affordable housing agreement shall be processed in the same manner as an original application for approval, except as authorized in Section 20.380.004(C). 20.380.016 Period of Affordability <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii-20_380- 20_380_016&frames=on> The City or its designee shall have a first right of refusal to purchase inclusionary for sale units offered for sale during the tenure of affordability. The first right of refusal to purchase the affordable unit shall be submitted in writing to the director of the Department of Economic and Community Development. Within 90 days of its receipt, the City shall indicate its intent to exercise the first right of refusal for the purpose of providing affordable housing. 20.380.017 Pre-Existing Approvals <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii-20_380- 20_380_017&frames=on> Any project for which an executed development agreement has become effective prior to the effective date of this ordinance, or for which a complete application for a vesting tentative map has been filed prior to the effective date of this ordinance, shall not be subject to the requirements of this ordinance, but shall be subject to the requirements of the City’s inclusionary housing ordinance, if any, in effect at the time the development agreement became effective or the complete vesting tentative map application was filed. 20.380.018 Enforcement <https://qcode.us/codes/southsanfrancisco/view.php?topic=20-iv-ii-20_380- 20_380_018&frames=on> Enforcement provisions are as follows: A.The provisions of this chapter shall apply to all applicants and their agents, successors and assigns proposing a residential development governed by this chapter. No building permit or occupancy permit shall be issued, nor any entitlement granted, for a project which is not exempt and does not meet the requirements of this chapter. All inclusionary units shall be rented or owned in accordance with this chapter. B.The applicant and its agents, successors and assigns shall annually certify tenants as to the income eligibility for occupancy of inclusionary rental units and the annual certification shall be submitted to the Department of Economic and Community Development. If applicant and its agents, successors and assigns fail to perform an annual certification, applicant shall be fined $1,000 for each inclusionary unit whose tenants were not subject to an annual certification. The City shall continue to fine the applicant an additional $1,000 for every 30-day period for each inclusionary unit whose tenants have not been subject to an annual certification. City shall take steps to assess these fines as a lien against either the property where the inclusionary units are located or against the project property. C.If applicant at any time fails to make available or to provide below inclusionary rental unit at the required affordable rent levels, applicant is subject to a fine of $2,500 for each inclusionary unit not provided pursuant to the affordable housing agreement. The City shall continue to fine applicant an additional $2,500 for every 30-day period after the initial fine for each inclusionary unit not provided pursuant to the affordable housing agreement. City shall take steps to assess these fines as a lien against either the property where the inclusionary units are located or against the subject property. D.If an owner sells a for-sale inclusionary unit during the 55 year affordability term at a price higher than the maximum resale price in violation of this chapter, the City will be entitled to receive from the seller the difference between the maximum resale price and the actual sales price of the inclusionary unit. If an owner rents a rental City of South San Francisco Printed on 10/1/2018Page 14 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. inclusionary unit during the 55 year affordability term at a rent higher than the affordable rent in violation of this chapter, the City will be entitled to receive from the owner the difference between the affordable rent and the actual rental amount of the inclusionary unit. Any funds recaptured by the City shall be placed in the housing trust fund as set forth in Section 20.380.012 of this chapter. E.The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this chapter, including but not limited to actions to revoke, deny or suspend any permit or development approval. In the event the City must institute legal action to enforce the provisions of this ordinance, the City shall be entitled to recover its administrative costs, including reasonable attorneys’ fees, in addition to any other remedy provided by the court. 20.380.019 Savings Clause All code provisions,ordinances,and parts of ordinances in conflict with the provisions of this chapter are repealed.The provisions of this chapter,insofar as they are substantially the same as existing code provisions relating to the same subject matter shall be construed as restatements and continuations thereof and not as new enactments.With respect,however,to violations,rights accrued,liabilities accrued,or appeals taken,prior to the effective date of this ordinance,under any chapter,ordinance,or part of an ordinance shall be deemed to remain in full force for the purpose of sustaining any proper suit, action, or other proceedings, with respect to any such violation, right, liability or appeal. SECTION 3.Severability If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid or unconstitutional,the remainder of this Ordinance,including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect.To this end,provisions of this Ordinance are severable.The City Council of the City of South San Francisco hereby declares that it would have passed each section,subsection,subdivision,paragraph,sentence,clause,or phrase hereof irrespective of the fact that any one or more sections,subsections,subdivisions,paragraphs,sentences,clauses,or phrases be held unconstitutional,invalid,or unenforceable. SECTION 4.Compliance with the California Environmental Quality Act Approval of this ordinance is exempt from environmental review under the general rule in California Environmental Quality Act (“CEQA”)Guidelines Section 15061(b)(3)that CEQA only applies to projects that have the potential for causing a significant effect on the environment.This ordinance requires the inclusion of affordable housing units with some residential development projects.Those projects will be the subject of independent environmental review,if required by CEQA,at the earliest possible time prior to approval.It can therefore be seen with certainty that there is no possibility that the adoption of the ordinance itself will have a significant effect on the environment. SECTION 5.Publication and Effective Date of Ordinance Pursuant to the provisions of Government Code Section 36933,a summary of this Ordinance shall be prepared by the City Attorney.At least five (5)days prior to the Council meeting at which this Ordinance is scheduled to be adopted,the City Clerk shall (1)publish the Summary,and (2)post in the City Clerk’s Office a certified copy of this Ordinance. Within fifteen (15)days after the adoption of this Ordinance,the City Clerk shall (1)publish the summary,and (2)post in the City Clerk’s Office a certified copy of the full text of this Ordinance along with the names of those City Council members voting for and against this Ordinance or otherwise voting.The effective date of this Ordinance shall be November 1, 2018. City of South San Francisco Printed on 10/1/2018Page 15 of 16 powered by Legistar™ File #:18-894 Agenda Date:9/26/2018 Version:1 Item #:17a. ***** Introduced at a regular meeting of the City Council of the City of South San Francisco held the 12th day of September 2018. City of South San Francisco Printed on 10/1/2018Page 16 of 16 powered by Legistar™ City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. Ordinance repealing and replacing South San Francisco Municipal Code Chapter 20.390,Bonus Residential Density, to update the City of South San Francisco’s regulations implementing the State Density Bonus. WHEREAS,the City of South San Francisco (“City”)aims to provide sufficient levels of affordable housing for its residents; and WHEREAS,in July of 2010,the City Council for the City of South San Francisco adopted a comprehensive update to the City’s zoning ordinance,which repealed the then-existing Title 20 of the South San Francisco Municipal Code (“Zoning Ordinance”),and replaced it with an entirely new Title that,among other actions, established new zoning districts,revised and reformatted many then-existing zoning provisions,eliminated inconsistent and outdated provisions,and codified entirely new zoning provisions,including new land use regulations and development standards; and WHEREAS,as part of the 2010 Zoning Ordinance Update,the City adopted Chapter 20.380 Inclusionary Housing Regulations,which require inclusionary below market rate housing units in new,for-sale residential development; and WHEREAS,the availability of housing is a substantial concern for individuals of all demographics,ages,and economic backgrounds in communities throughout the State of California; and WHEREAS,the State Density Bonus affords developers additional incentives for building on-site inclusionary affordable housing; and WHEREAS,on April 8,2015 the City Council of the City of South San Francisco adopted its 2015-2023 Housing Element; and WHEREAS,the new,proposed Chapter 20.390 of the Zoning Ordinance implements Housing Element Goal I to “promote the provision of housing by both the private and public sectors for all income groups in the community;” and WHEREAS,the City’s objective,as established by the Housing Element,is to ensure that all residential developments,including all master planned and specific planned communities,provide a range of housing opportunities for all identifiable economic segments of the population,including households of very low-,low- and moderate-income; and WHEREAS,the City has prepared a new ordinance (the “Ordinance”)repealing and replacing South San Francisco Municipal Code Chapter 20.390,Bonus Residential Density,to update the City’s regulations implementing the State Density Bonus; and WHEREAS,on August 16,2018,the Planning Commission for the City of South San Francisco held a lawfullyCity of South San Francisco Printed on 10/1/2018Page 1 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. WHEREAS,on August 16,2018,the Planning Commission for the City of South San Francisco held a lawfully noticed public hearing to solicit public comment and consider the proposed Ordinance,take public testimony, and make a recommendation to the City Council; and WHEREAS,the Planning Commission unanimously recommended that the City Council adopt the Ordinance; and WHEREAS,to implement the affordable housing goals,policies,and programs of the City's Housing Element, the City Council proposes to adopt the Ordinance after a duly noticed public hearing; and WHEREAS,ten (10)days advance notice of the public hearing at which the Ordinance was considered was published in accordance Government Code Section 6062a; and WHEREAS,the Zoning Ordinance was adopted after preparation,circulation,consideration,and adoption of an Initial Study/Mitigated Negative Declaration (“IS/MND”)in accordance with the California Environmental Quality Act,Public Resources Code Sections 21000,et seq.(“CEQA”),in which the IS/MND analyzed the environmental impacts of adopting the Zoning Ordinance and concluded that adoption of the Zoning Ordinance could not have a significant effect on the environment because none of the impacts required to be analyzed under CEQA would exceed established thresholds of significance; and WHEREAS,the Planning Commission made findings that the Ordinance,as it relates to state density bonus implementation is minor in nature,the adoption of which would not result in any new significant environmental effects or a substantial increase in the severity of any previously identified effects beyond those disclosed and analyzed in the IS/MND prepared for the Zoning Ordinance,nor does the Ordinance constitute a change in the project or change in circumstances that would require additional environmental review; and WHEREAS,the Planning Commission made findings that the Ordinance meets the purpose of the Zoning Ordinance and is consistent with the adopted General Plan because the Ordinance will reinforce the General Plan policies,is consistent with the relevant specific plans,and are consistent with the City’s overall vision for providing density bonus for a diversity of housing types responsive to household size, income, and age needs. NOW,THEREFORE,THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1.Incorporation of Recitals The City Council of South San Francisco finds that all Recitals are true and correct and are incorporated herein by reference. SECTION 2.Amendments The City Council hereby repeals and replaces Chapter 20.390 to Title 20,the Zoning Ordinance,of the South San Francisco Municipal Code to read as follows: Chapter 20.390 BONUS RESIDENTIAL DENSITY 20.390.001 Purpose and Intent 20.390.002 Definitions 20.390.003 Regulations for New Residential Construction City of South San Francisco Printed on 10/1/2018Page 2 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. 20.390.004 Regulations for Conversions 20.390.005 Parking 20.390.006 Waiver and Reduction of Development Standards 20.390.007 Density Bonus Housing Standards 20.390.008 Expiration of Affordability Tenure 20.390.009 Density Bonus Application and Review Process 20.390.010 Inclusion of Density Bonus Housing Agreement as a Condition of Development 20.390.011 Density Bonus Resale Agreements 20.390.012 Eligibility Requirements 20.390.013 Management and Monitoring 20.390.014 Administrative Fee for Target Dwelling Units 20.390.015 Severability of Provisions 20.390.001 Purpose and Intent The public good is served when there exists in a City housing which is appropriate for the needs of and affordable to all members of the public who reside within that City.Among other needs,there is in South San Francisco a need for housing affordable to extremely low,very low,lower and moderate income households,senior citizens,transitional foster youth,disabled veterans and homeless persons. Therefore,it is in the public interest for the City to promote the construction of such additional housing through the exercise of its powers and the utilization of its resources. A.It is the purpose of this chapter to provide incentives to developers for the production of housing affordable to extremely low income households,very low income households,lower-income households,moderate-income households,senior citizens,transitional foster youth,disabled veterans and homeless persons. B.It is the purpose of this chapter to implement the goals,objectives,and policies of the housing element of the City’s General Plan, as amended. C.It is the purpose of this chapter to implement Sections 65915 through 65918 of the California Government Code, or successor provisions (“State Density Bonus Law”). D.Nothing in this chapter is intended to create a mandatory duty on behalf of the City or its employees under the Government Tort Claims Act and no cause of action against the City or its employees is created by this chapter that would not arise independently of the provisions of this chapter. 20.390.002 Definitions All terms used herein shall have the same meanings as set forth in the State Density Bonus Law. City of South San Francisco Printed on 10/1/2018Page 3 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. All terms used herein shall have the same meanings as set forth in the State Density Bonus Law. In addition,the following terms which are used in this chapter shall have the meaning established by this section: A.“Conversion”means the change of status of a dwelling unit from a for-sale unit to a rental unit or vice versa. B.“Density bonus dwelling units”means those residential units granted pursuant to the State Density Bonus Law and the provisions of this chapter which are in excess of the maximum allowable residential density of the project site. C.“Density bonus housing agreement”means a legally binding agreement between an applicant and the City to ensure that the requirements of this chapter are satisfied with respect to a density bonus housing project, in accordance with Section 20.390.010 of this chapter. D.“Density bonus housing project”means a residential development project which receives a density bonus,incentives and concessions,waiver or modification of development standards,or favorable parking requirements pursuant to this chapter.Where an affordable housing agreement is required pursuant to Section 20.380.014,the density bonus housing agreement and inclusionary housing agreement may be combined in a single housing agreement as provided in Section 20.390.010(D). E.“Dwelling unit”shall have the definition given for dwellings in Section 20.630.002 of the Municipal Code. F.“For-sale unit”means a dwelling unit,including an attached or detached single family home,condominium,stock cooperative or community apartment,which is offered for sale to individual buyers. G.“Incentives”means concessions and incentives as described in Government Code Section 65915(k), granted by the City in accordance with the State Density Bonus Law and this chapter. H.“Lower income household”shall have the meaning as defined in California Health and Safety Code Section 50079.5. I.“Market-rate unit”means a dwelling unit where the rental rate or sales price is not restricted either by this chapter,Chapter 20.380 of the Municipal Code,or by requirements imposed through other local, state, or federal affordable housing programs. J.“Maximum allowable residential density”means the maximum number of residential units permitted on the project site,which number of units is calculated by multiplying the net developable acreage of the project site times the growth management control point(s)for the project City of South San Francisco Printed on 10/1/2018Page 4 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. site’s applicable residential General Plan designation(s). K.“Moderate-income household”shall have the meaning as defined in California Health and Safety Code Section 50093. L.“Rental unit” means a dwelling unit that is not a for-sale unit. M.“Residential development”means any new residential construction of rental or for-sale units;or development revisions,including those with and without a master plan or specific plan, planned unit developments,site development plans,mobile home developments and conversions of apartments to condominiums,as well as dwelling units for which the cost of shelter is included in a recurring payment for expenses, whether or not an initial lump sum fee is also required. N.“State Density Bonus Law”means Sections 65915 through 65918 of the California Government Code, or successor provisions, as such law may change from time to time. O.“Target dwelling unit”means a dwelling unit that will be offered for rent or sale exclusively to and which shall be affordable to the designated income group or qualified resident,as required by this chapter. P.“Very low income household”shall have the meaning as defined in California Health and Safety Code Section 50105.For purposes hereof,very low income households shall include extremely low income households, as defined in California Health and Safety Code Section 50106. 20.390.003 Regulations for New Residential Construction The City shall grant a density bonus and incentives and concessions to applicants for approval of a residential development project of at least five units,as and to the extent required pursuant to Section 65915 of the State Density Bonus Law. 20.390.004 Regulations for Conversions The City shall grant a density bonus or other incentives of equivalent financial value to applicants for approval of a conversion,as and to the extent required pursuant to Section 65915.5 of the State Density Bonus Law. 20.390.005 Parking Upon the written request of an applicant who has qualified for a density bonus,the City shall require a vehicular parking ratio for the project,inclusive of handicapped and guest parking,which does not exceed the parking ratios established pursuant to Section 65915(p) of the State Density Bonus Law. City of South San Francisco Printed on 10/1/2018Page 5 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. 20.390.006 Waiver and Reduction of Development Standards Upon the written request of an applicant who has qualified for a density bonus,the City shall approve a waiver or reduction of those City development standards that will have the effect of physically precluding the construction of the development project at the densities or with the incentives and concessions permitted pursuant to this chapter,as and to the extent required pursuant to Section 65915 of the State Density Bonus Law.Upon the request of an applicant,the City shall meet with the applicant to discuss the City’s disapproval of a requested waiver or reduction of City development standards. 20.390.007 Density Bonus Housing Standards A.All residential development subject to this chapter must satisfy all of the requirements of this chapter,notwithstanding the development’s satisfaction of other program requirements,laws or regulations such as the inclusionary housing requirements of Chapter 20.380.Those target dwelling units provided under this chapter which meet all of the requirements for inclusionary units set forth in Chapter 20.380, shall also qualify as inclusionary units for purposes of that chapter. B.Target dwelling units shall be constructed concurrently with market rate dwelling units unless both the both the final decision-making authority of the City and the applicant agree to an alternative schedule for development.The schedule for construction of inclusionary units shall be included in the density bonus housing agreement. C.Target dwelling units shall remain restricted and affordable in accordance with the requirements of Section 65915 of the State Density Bonus Law. D.Target dwelling units and density bonus dwelling units shall be built within the site of the density bonus housing project. E.Density bonus housing projects shall comply with all applicable development standards of the City,except those which have been modified as incentive or concessions or through development standard waivers or modifications,as provided in this chapter.In addition,all units in density bonus housing projects must conform to the requirements of all applicable building and housing codes. F.The design of all units within a density bonus housing project shall be consistent with General Plan standards;compatible with the design of the total project development in terms of appearance,materials and finished quality and conform to General Plan standards;and consistent with affordable housing development standards prepared by the Department of Economic and Community Development as adopted by the City Council.The distribution of the size of target dwelling units,as measured by the number of bedrooms in a target dwelling unit,shall be in the same proportion as the distribution of the size of market rate units within the development,as measured by the number of City of South San Francisco Printed on 10/1/2018Page 6 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. distribution of the size of market rate units within the development,as measured by the number of bedrooms in the market rate units.Residents of target dwelling units shall be entitled to use all of the same amenities and facilities of the residential development as residents of market rate units within the residential development. G.No building permit shall be issued,nor any development approval granted,for any improvements within a residential development subject to this chapter which does not meet the requirements of this chapter.No target dwelling unit shall be rented or sold except in accordance with this chapter. 20.390.008 Expiration of Affordability Tenure The owner of rental target dwelling units shall provide all notices and rights to tenants required to be given prior to and upon the expiration of affordability covenants pursuant to Government Code Section 65863.10 or a successor statute. 20.390.009 Density Bonus Application and Review Process A.General.All residential projects requesting a density bonus,incentives and concessions, waiver or modification of development standards,or favorable parking requirements pursuant to this chapter,shall be required to comply with the following application requirements.Target dwelling units proposed to be developed onsite shall be designated on the project plans and shall be processed under a site development plan application in addition to the otherwise required project development application (s)(i.e.,tentative maps,parcel maps,planned unit developments and Conditional Use Permits).The site development plan shall be processed pursuant to Chapters 19 (“Subdivisions”)and 20 (“Zoning”)of the South San Francisco Municipal Code.No additional hearings or approvals shall be required,except as provided herein with regard to the provision of financial incentives.If the application involves a request to the City for direct financial incentives,then any action by the Planning Commission on the application shall be advisory only,and the City Council shall have the authority to make the final decision on the site development plan application and any related discretionary permits. B.Preliminary Application.An applicant proposing a density bonus housing project may submit a preliminary application prior to the submittal of any formal requests for approvals of such housing development.The preliminary application shall include the following information.To the extent possible,applicants shall combine into a single integrated preliminary application the information required below and the information required in the preliminary application for an inclusionary housing project pursuant to Section 20.380.013 of the Municipal Code: 1.A brief description of the proposal,including the number of target dwelling units and density bonus dwelling units proposed. City of South San Francisco Printed on 10/1/2018Page 7 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. 2.The zoning, General Plan designations and assessor’s parcel number(s) of the project site. 3.A site plan,drawn to scale,which includes:building footprints,driveway and parking layout, building elevations, existing contours and proposed grading. 4.A letter identifying what density bonus,incentives and concessions,waivers or modifications of development standards,or favorable parking requirements are being requested of the City.Within 30 days of receipt of the preliminary application by the Director of Economic and Community Development (or his or her designee),the department shall provide to an applicant a letter which identifies project issues of concern,and for projects requesting direct financial assistance from the City, the financial assistance that the Director of Economic and Community Development (or his or her designee)would support when making a recommendation to the final decision making authority.Such letter shall include a summary of the procedures for compliance with this chapter.The applicant shall also be provided with a copy of this chapter and related policies,the pertinent sections of the California Codes to which reference is made in this chapter and all required application forms. 5.A statement describing whether the residential development is proposed on any property (a)that includes a parcel or parcels on which rental dwelling units are,or if the dwelling units have been vacated or demolished in the five year period preceding the application,have been subject to a recorded covenant,ordinance or law that restricts rents to levels affordable to,persons and families of very low or lower income,(b)that has been subject to any other form of rent or price control through a public agency’s exercise of its police power, or (c) has been occupied by lower or very low income households. C.Submittal.The completed application(s)shall include the following information.To the extent possible,applicants shall combine into a single integrated submission the information required below and the information required in the inclusionary housing plan pursuant to Section 20.380.004 of the Municipal Code. 1.A legal description of the total site proposed for development of the target dwelling units, including a statement of present ownership and present and proposed zoning. 2.A letter signed by the present owner stating what density bonus,incentives and concessions, waivers or modifications of development standards,or favorable parking requirements are being requested from the City. 3.A detailed vicinity map showing the project location and such details as the location of the nearest commercial retail,transit stop,potential employment locations,park or recreation facilities or other social or community service facilities. 4.Site plans,designating the total number of units proposed on the site,including the number of target dwelling units and density bonus dwelling units,and supporting plans per the application City of South San Francisco Printed on 10/1/2018Page 8 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. submittal requirements. 5.In the case of a request for any incentives or concessions,a description of how the requested incentives or concessions will result in identifiable and actual cost reductions to provide for affordable housing costs or rents for the target dwelling units. 6.In the case of a request for waivers or modifications of development standards,a description of how the existing development standards will have the effect of physically precluding the construction of the development at the densities or with the requested concessions or incentives. 7.In the case of a condominium conversion request,a report documenting the following information for each unit proposed to be converted:the monthly income of tenants of each unit throughout the prior year,the monthly rent for each unit throughout the prior year,and vacancy information for each unit throughout the prior year. 8.A statement describing whether the residential development is proposed on any property (a)that includes a parcel or parcels on which rental dwelling units are,or if the dwelling units have been vacated or demolished in the five year period preceding the application,have been subject to a recorded covenant,ordinance or law that restricts rents to levels affordable to,persons and families of very low or lower income,(b)that has been subject to any other form of rent or price control through a public agency’s exercise of its police power, or (c) has been occupied by lower or very low income households. D.Review.The Director of Economic and Community Development and/or his or her designated staff shall evaluate the request based upon the following criteria: 1.Whether the requested density bonus meets all of the requirements of the State Density Bonus Law for receipt of a density bonus. 2.Whether the requested incentives and concessions result in identifiable and actual cost reductions to provide for affordable housing costs or rents for the target dwelling units,and whether such incentives and concessions would have a specific adverse impact upon public health and safety,or the physical environment,or on any real property that is listed in the California Register of Historical Resources,and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low and moderate income households,or violates such other requirements as may be set forth in the California Density Bonus Law for incentives and concessions. 3.Whether the City’s development standards physically preclude the construction of the development project at the density and with the concessions and incentives to be provided to the proposed project pursuant to this chapter,and whether the requested waivers or modifications are necessary to enable the construction of the development project at such density and with such City of South San Francisco Printed on 10/1/2018Page 9 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. concessions and incentives. 4.Whether the density bonus housing project complies with the General Plan,zoning and development policies of the City. 5.Whether the conversion of apartment units to condominiums will result in a reduction in the affordable housing stock for lower income groups, as of most recent inventory. 20.390.010 Inclusion of Density Bonus Housing Agreement as a Condition of Development A.Applicants receiving a density bonus,incentives and concessions,waivers or modifications of development standards,or favorable parking requirements pursuant to this chapter, shall demonstrate compliance with this chapter by the execution of a density bonus housing agreement. Where an affordable housing agreement is required pursuant to Section 20.380.014 (“Affordable Housing Agreement as a Condition of Development”),both the density bonus housing agreement and inclusionary housing agreement shall,if feasible,be combined into a single housing agreement.The density bonus housing agreement shall be submitted by City to the applicant.Following the approval and the signing by all parties,the completed density bonus housing agreement shall be recorded as specified in the density bonus housing agreement.The approval and recordation shall take place prior to final map approval,or,where a map is not being processed,prior to issuance of building permits for such lots or units.The density bonus housing agreement shall be binding on all future owners and successors in interest. B.A density bonus housing agreement for new residential construction processed pursuant to this chapter shall include the following: 1.The number of density bonus dwelling units granted. 2.The number and type of target dwelling units proposed. 3.The unit size(s)(square footage)of target dwelling units and the number of bedrooms per target dwelling unit. 4.The proposed location of the target dwelling units. 5.Tenure of restrictions for target dwelling units. 6.Schedule for production of target dwelling units. 7.A description of incentives and concessions,waivers and modifications of development standards,provision of favorable parking requirements,and financial assistance to be provided by the City. 8.Where applicable,tenure and conditions governing the initial sale of for-sale target dwelling units. 9.Where applicable,tenure and conditions establishing rules and procedures for qualifying tenants, setting rental rates,filling vacancies,and operating and maintaining units for rental target dwelling units. 10.Any other requirements of State Density Bonus Law. City of South San Francisco Printed on 10/1/2018Page 10 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. C.A density bonus housing agreement for condominium conversions processed pursuant to this chapter shall be required to include the following: 1.The number of density bonus dwelling units granted. 2.The number of lower and moderate-income dwelling units proposed. 3.The unit size(s)(square footage)of target dwelling units and number of bedrooms per target dwelling unit. 4.The proposed location of the lower and moderate-income target dwelling units. 5.Tenure of affordability for target dwelling units. 6.Schedule for production of target dwelling units. 7.Incentives provided by the City. 8.Terms and conditions of for-sale target dwelling units. 9.Any other requirements of State Density Bonus Law. 20.390.011 Density Bonus Resale Agreements A.All buyers of for-sale target dwelling units shall enter into a density bonus resale agreement with the City’s housing authority prior to purchasing the unit or property.The resale agreement shall be consistent with the density bonus housing agreement for the density bonus housing project. B.Where an affordable housing agreement involving the resale of inclusionary housing is required pursuant to Section 20.380.014 (“Affordable Housing Agreement as a Condition of Development”),both the resale agreements for inclusionary for-sale units and target for-sale units shall be combined into a single resale agreement. 20.390.012 Eligibility Requirements Only households meeting the eligibility standards for the target dwelling units as set forth in the density bonus housing agreement shall be eligible to occupy target dwelling units. 20.390.013 Management and Monitoring Rental target dwelling units shall be managed and operated by the owner or his or her agent.Each owner of rental target dwelling units shall submit an annual report to the City in the form prescribed by the City,identifying which units are target dwelling units,the monthly rent,vacancy information for each rental target dwelling unit for the prior year,monthly income for tenants of each rental target dwelling unit, and other information as required by the City, while ensuring the privacy of the tenant. 20.390.014 Administrative Fee for Target Dwelling Units Over the minimum tenure of projects containing target dwelling units,the City will either directly or, City of South San Francisco Printed on 10/1/2018Page 11 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. Over the minimum tenure of projects containing target dwelling units,the City will either directly or, via one or more third parties,provide a number of recurring services associated with the administration and monitoring of such units.Although the provision of some of these services will be within the normal purview of existing City activities,others will involve new costs to the City for which there are no existing funding sources.Unless and until alternative funding sources are identified,it is necessary to require the builders and owners of density bonus housing projects to share in these administrative costs. Therefore,the City Council establishes an administrative fee for target dwelling units,the amount to be established by the City Council resolution and paid prior to the issuance of building permit(s). 20.390.015 Severability of Provisions If any provision of this chapter or the application thereof to any person or circumstances is held invalid, the remainder of the chapter and the application of the provision to other persons not similarly situated or to other circumstances shall not be affected thereby.In the event of any conflict between this chapter and State Density Bonus Law, State Density Bonus Law shall prevail. SECTION 3.Severability If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid or unconstitutional,the remainder of this Ordinance,including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect.To this end, provisions of this Ordinance are severable.The City Council of the City of South San Francisco hereby declares that it would have passed each section,subsection,subdivision,paragraph,sentence,clause,or phrase hereof irrespective of the fact that any one or more sections,subsections,subdivisions,paragraphs,sentences, clauses, or phrases be held unconstitutional, invalid, or unenforceable. SECTION 4.Compliance with the California Environmental Quality Act Approval of this ordinance is exempt from environmental review under the general rule in California Environmental Quality Act (“CEQA”)Guidelines Section 15061(b)(3)that CEQA only applies to projects that have the potential for causing a significant effect on the environment.This ordinance provides a density bonus for the inclusion of affordable housing units with some residential development projects pursuant to Chapter 20.280 of the South San Francisco Municipal Code.Those projects will be the subject of independent environmental review,if required by CEQA,at the earliest possible time prior to approval.It can therefore be seen with certainty that there is no possibility that the adoption of the ordinance itself will have a significant effect on the environment. SECTION 5.Publication and Effective Date of Ordinance Pursuant to the provisions of Government Code Section 36933,a summary of this Ordinance shall be prepared by the City Attorney.At least five (5)days prior to the Council meeting at which this Ordinance is scheduled to be adopted,the City Clerk shall (1)publish the Summary,and (2)post in the City Clerk’s Office a certified copy of this Ordinance.Within fifteen (15)days after the adoption of this Ordinance,the City Clerk shall (1) publish the summary,and (2)post in the City Clerk’s Office a certified copy of the full text of this Ordinance along with the names of those City Council members voting for and against this Ordinance or otherwise voting. The effective date of this Ordinance shall be November 1, 2018. ***** City of South San Francisco Printed on 10/1/2018Page 12 of 13 powered by Legistar™ File #:18-895 Agenda Date:9/26/2018 Version:1 Item #:17b. Introduced at a regular meeting of the City Council of the City of South San Francisco held the 12th day of September 2018. City of South San Francisco Printed on 10/1/2018Page 13 of 13 powered by Legistar™