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HomeMy WebLinkAbout2008-12-17 e-packetSPECIAL MEE~'i1~TG Q~~~I IJ~~ o - ~~ C1TY COUNCIL " OF THE J O CITY OF SOUTH SAN FRANCISCO c'~LIFOR~1~ P,O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: MUNICIPAL SERVICES BUILDING COMMUNITY ROOM 33 ARROYO DRIVE SOUTH SAN FRANCISCO, CA WEDNESDAY, DECEMBER 17, 2008 7:00 P.M. NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the City Council of the City of South San Francisco will hold a Special Meeting on Wednesday, the 17th day of December, 2008, at 7:00 p.m., in the Community Room at the Municipal Services Building, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE INVOCATION PUBLIC COMMENTS PRESENTATIONS 1. 2007-08 year-end financial results and budget closing and Resolution approving various budget actions that allow staff to close the books for fiscal year 2007-2008. 2. Transmittal of First Quarter 2008-09 financial report and Resolution amending the 2008-09 Operating Budget to adjust revenues and expenditures at First Quarter. ITEMS FROM COUNCIL • Announcements • Committee Reports PUBLIC HEARING 3. Sign Ordinance Zoning Text Amendment City of South San Francisco/applicant Citywide F08-0093: ZA08-0006 Text Amendment -Sign Ordinance text amendment to section 20.76.170 Special Circumstances, to allow employee oriented signs for multi-building campus-like facilities in accordance with SSI~MC Chapters 20.76 & 20.87. ADMINISTRATIVE BUSINESS 4. Resolution authorizing the City Manager to execute a contract with Chandler Asset Management for Investment Management Services. 5. Resolution authorizing the City Manager to execute agreements with JPB and Caltrans for construction and maintenance of the new South San Francisco Caltrain Station. ADJOURNMENT •~ .~...- SPECIAL CITY COUNCIL MEETING DECEMBER 17, 2008 AGENDA PAGE 2 Staff DATE: December 17, "?008 TO: Honorable Mayor and City Council FROM: Jim Steele, Director of Finance AGENDA ITEM #1 St1BJECT: ?007-08 YEAR-END FINANCIAL RESULTS AND BUDGET CLOSING RECOMMENDATION: It is recommended that the City Council approve the attached budget amendment resolution authorizing various budget actions and allowing staff to close the books on fiscal year 2007-08. BACKGROUND/DISCUSSION: While the ?007-08 fiscal year results have not been audited, the numbers are virtually final. General Fund revenues have come in $1.8 million higher than the amended budget, a favorable variance of 2.8%. Revenues came in higher in several areas, offsetting a drop in building permits, which is a signal of the slowdown in the economy. General Fund operating budget expenditures, prior to capital improvements or debt service, came in $.5 million higher than budget, or .8%, due to items described below. Revenues: Several General Fund revenue sources had significant differences in actuals through year-end compared to budget. Those revenues are as follows: Transient Occupancy Taxes (TOT) came in $.8 million higher than budget. City hotels realized higher occupancy rates and room rates. Council may recall that given the economic signals, staff maintained the budget for TOT at a conservative level. Revenue from Other Agencies came in $.2 million higher than budget. Most of this increase was due to the In Lieu Motor Vehicle Fees from the State, which grow with the City's property tax revenue. (Property taxes have increased almost $1.0 million, or 7.6% since last year, reflecting in part, several new Genentech properties coming on line). Commercial Parking Tax came in $.2 million higher than budget. Council may recall that when voters approved the modification to the Commercial Parking Tax in November ?007, staff kept a conservative estimate of the additional revenue from the Airport. Staff Report Subject: 2.007-08 Year End Financial Results and Budget Closing Page 2 of 3 Building and Fire Permits came in $.6 million below budget, a 16% decline, and $1.8 million less than last year. With the economic downturn, businesses pulled back on improvements, which staff expected, but the decline was more dramatic than anticipated. This will likely have an impact on the 2008-09 budget as well. Charges for Service came in $.4 million higher than budget, with Child Care Revenue attributing about half of that positive variance. Paramedic revenues were slightly under budget, and Basic Life Support came in $59,000 over budget. lnterest earnings were $.2 million over the budget, due to higher reserves and higher overall portfolio earnings rates for most of the year than the year before. Expenditures: General Fund Expenditures came in $.5 million (or .8% above) budget after accounting for carry forward purchase orders (purchase orders open, but still unspent at year end). After several years of hold the line budgets, departments are coming in closer to their final budgets, with less savings. Three areas were over budget: • The Attorney's Office was over budget by $104,000, reflecting higher than budgeted litigation costs. As mentioned in the mid year report to Council, the Comfort Suites litigation has resulted in a net return of delinquent hotel taxes by the former operator of the Comfort Suites, and, in fact, offsets this overage. The non-departmental budget (costs not associated with any department) exceeded budget by $116,000. Accounting rules require the City to realize the property tax appeal judgment in favor of a large biotechnology company in the current year, even though the County won't take the funds until 2008-09. Accounting rules generally require the realization of expenses or losses when the loss is earned, rather than when the actual cash flow adjustment is made. (A similar adjustment, for a much larger amount, was also recorded in the Redevelopment budget). • Fire was over budget by $409,000 overall, reflecting in part higher gasoline costs and some retirements of long term employees, who had accumulated large vacation and sick leave balances that were paid upon their leaving the City. Budget Amendment: Budget amendments are needed in order to close the books on 2007-08. They are described below. General Fufid "The three General Fund areas that went over budget (Attorney, Non-Departmental, and Fire) require $629,000 in increased budget appropriations. Staff Report Subject: 2007-08 Year End Financial Results and Budget Closing Page 3 of 3 Oyster Point Traffic Impact Fee Fund The Redevelopment Agency has advanced dollars to the Oyster Point Fund to pay the County Transportation Authority back for the City's share of the Flyover and Hookramps project. That advance comes with interest, so $1.3 million in interest expense to the Oyster Point Fund needs to be appropriated. Impact fees will continue to be collected from east of 101 development until the advances have been paid off in the future. FISCAL IMPACT: The year-end balance for the General Fund Undesignated Reserve is estimated at $5.4 million, in line with the $3.2 million minimum set by the reserve policy. Total year-end General Fund Discretionary Reserves are estimated at $15.7 million. CONCLUSION: Taking the actions in the attached budget amendment resolution will allow staff to close the books on fiscal year 2007-08. r} ~ l ~, ~ k, `3 Pi epared by: ~ ~`~ 1.' - Approved b~: ~ `' %' .~~ 3im Steele ~, ~~B rr IVI. Nage .~~~. Finance Director City Manager Attachments: Resolution Exhibit A-1 Total General Fund Operating & Capital Budget, Exhibit A-2 Projected Changes to General Fund Reserves JS/BN:ed RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING VARIOUS BUDGET ACTIONS THAT ALLOW STAFF TO CLOSE THE BOOKS FOR FISCAL YEAR 2007-08 WHEREAS, staff recommends authorizing various budget changes as described below. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco hereby approves various budget actions shown that allows staff to close books for the 2007-08 fiscal year. Taking these actions will result in a General Fund Undesignated Reserve of approximately $5.4 million as of June 30, 2008. Those budget actions are: • Add $104,000 to the City Attorney's Office to cover litigation, covered by additional recovery from a delinquent hotel operator. • Add $409,000 to the Fire Department Budget to cover higher gasoline costs and a high number of final leave balance payments for long term employees who were retiring. • Add $116,000 to the Non-departmental Budget to cover a pending property tax judgment. • Add $1.3 million to the Oyster Point Fund budget to cover interest expense on the advance made by the Redevelopment Agency. • Confirm the Reserves shown on Exhibit A-2 • Authorize the Finance Director to make final adjustments to revenues and expenditures and Reserves as a result of any audit comments that occur during the final external auditor review, in conformance with generally accepted accounting standards. ~: a: =~ ~: :~ :~ I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a special meeting held on the 17th day of December, 2008 by the following vote: AYES NOES: ABSTAIN: ABSENT: ATTEST: City Clerk CITY OF SOUTH SAN FRANCISCO OPERATING BUDGET, 2007-OS Exhibit A-1 GENERAL FUND SUMMARY, YEAR-END 2007-08 Variance to Final Midyear Final Amended A mended Budget Actual Actual Adopted Budget Budget Actual Favorable/ 2005-06 2006-07 2007-08 2007-08 2007-08 2007-08 (Unfavorable) Percent Revenues and Other Financing Sources Property Taxes 11,776,863 12,992,109 13,487,768 13,954,334 13,954,334 14,029,883 75,549 0.5% ERAF Refund from County 1,871,955 1.410,472 750,000 1,311,000 1,311,000 1,429,004 118,004 9.0% Sales Tax 12,251,284 12,753,418 13,370,000 12,419,046 12,419,046 12,481,431 62,385 0.5% Transient Occupancy Tax 5,469,708 5,959,034 5,900,000 6,300,000 6,300,000 7,098,285 798,285 12.7% Motor Vehicle In Lieu Fees 4,460,748 4,617,897 4,788,000 4,788,000 4,788,000 4,875,710 87,710 1.8% Revenue from Other Agencies 1,522,527 1,657,142 1,006,500 1,252,493 1,388,858 1,588,530 199,672 14.4% Franchise Fees 2,858,554 3,137,208 3,350,000 3,150,000 3,150,000 3,148,076 (1,924) -0.1% Business License 614,516 653,339 630,000 657,000 657,000 659,703 2,703 0.4% Commercial Parking Tax 1,140,846 1,124,927 1,200,000 1,756,637 1,756,637 1,930,331 173,694 9.9% Building and Fire Permits 4,727,494 4,957,891 4,275,000 3,735,000 3,735,000 3,125,990 (609,010) -16.3% Charges for Services 5,736,520 6,628,277 5,376,200 5,376,200 5,937,623 6,332,600 394,977 6.7% Fines 889,085 1,043,528 1,125,000 1,125,000 1,125,000 1,077,003 (47,997) -4.3% Interest 767,495 985,631 750,000 850,000 850,000 1,046,866 196,866 23.2% Net Chance Investment Value -54,909 66,204 299,068 299,068 Rent 2,526,995 2,693,837 2,603,020 2,603,020 2,603,020 2,509,670 (93,350) -3.6% Administrative Charges 1,986,774 2,018,500 2,119,000 2,119,000 2,119,000 2,118,614 (386) 0.0% Other 639,783 837,109 569,250 569,250 569,250 697,312 128,062 22.5% Transfers In 2,293,579 993,120 897,500 897,500 958,235 925,089 (33,146) -3.5% Total Revenues: 61,479,819 64,529,643 62,197,238 62,863,480 63,622,003 65,373,164 1,751,161 2.8% Plus Prior Year Carryovers 677,478 Total Revenues and Other Financing Sources $ 61,479,819 64,529,643 62,197,238 63,540,95$ 63,622,003 65,373,164 Variance to Final Midyear Final Amended Amended Budget Actual Actual Adopted Budget Budget Actual Favorable/ 2005-06 2006-07 2007-08 2007-08 2007-08 2007-08 (Unfavorable} Percent Expenditures Administration 4,882,344 5,058,374 5,409,774 5,752,911 5,742,952 5,923,991 (181,039) -3.2% Economic & Comm. Dev. 3,430,070 3,990,985 3,703,647 4,095,128 3,222,928 3,215,845 7,083 0.2% Fire 14,826,794 15,164,670 15,528,484 16,142,516 16,485,301 16,893,671 (408,370) -2.5% Library 4,064,638 4.399,009 4,580,806 4,668,706 4,785,503 4,766,810 18,693 0.4% Poiice 16,259,302 17,907,675 18,888,620 18,888,620 18,671,565 18,665,949 5,616 0.0% Public Works 7,136,058 7,846,538 8,286,334 8,302,765 4,235,779 4,208,434 27,345 0.6% Parks & Recreation 4,631,304 4,927,347 5,158,427 5,162,987 10,831,351 10,828,733 2,618 0.0% Subtotal, Operating Budget Expenditures 55,230,511 59,294,598 61,556,092 63,013,633 63,975,379 64,503,434 (528,055) -0.8% Net Operating Budget Impact $ 6,249,308 S 5,235,045 $ 641,146 $ 527,325 ~ (353,375) $ 869,730 CITY OF SOUTH SAN FRANCISCO OPERATING BUDGET, 2007-08 Exhibit A-2 i otai General Fund f3perating and Capitai Budget, & Projected Changes to Generai Fund Reserves Actual Actual Adopted Midyear Actual 2005-06 2006-07 2007-08 2007-08 2007-08 Net Operating Budget Impact (from Table I) 6,249,308 $ 5,235,045 $ 641,146 $ 527,325 $ 869,730 Less Transfers to Capital Projects: (471,129) (826,253) (1,030,300) (1,914,411) (545,304) Less Transfers to Debt Service (130,000) (243,305} (150,000) (210,000) (210,000) Less Transfer of Retiree Health Reserve to Benefits Fund (1): (4,000,000) = Net Impact on General Fund Reserves $ 5,648,179 $ 4,165,487 $ (539,154) $ (1,597,086) $ (3,885,574) General Fund Reserves Projection I. Discretionary Reserves/ Liquid Reserves Available Emergencies 1,200,000 1,291,000 1,244,000 1,257,000 1,307,000 Economic Contingencies 4,211,000 4,517,000 4,354,000 4,400,000 4,576,000 Designated for future Economic Development and Capital Projects 4,950,000 5,610,000 3,504,700 4,256,589 4,399,131 Designated for Post-Employment Health Benefits Undesignated Reserve Subtotal, Discretionary (Available) Reserves II. Non-Discretionary Reservesl Reserves Already Committed Encumbrances Advances to Other Funds Inventory and Other Appropriated Capital Projects Subtotal, Non Discretionary (Committed) Reserves Total General Fund Reserves 5,890,360 3,000,000 5,261,260 1,000,000 6,992,929 4,000,000 5,649,893 5,437,445 $ 16,251,360 $ 19,679,260 $ 17,095,629 $ 19,563,482 $ 15,719,576 408,357 45,210 335,364 677,478 55,425 793,615 45,210 45,210 210,849 45,210 1,344,569 $ 788,931 1,526,518 45,210 45,210 1,600,628 $ 17,040,291 21,205,778 17,140,839 19,608,692 $ 17,320,204 (I 1 Authorized by Council in the Midyear Budget Amendment Agenda Item #2 o ~, J O c'~LIFOR~~~ to e ort DATE: December 17, 2008 TO: Honorable Mayor and City Council FROM: Jim Steele, Finance Director SUBJECT: TRANSMITTAL OF FIRST QUARTER 2008-09 FINANCIAL REPORT AND RESOLUTION AMENDING THE 2008-09 BUDGET RECOMMENDATION: It is recommended that the City Council approve the attached resolution amending the 2008-09 budget. B AC KGROUND/DIS C US S ION: This staff report transmits the first quarter 2008-09 financial results, and recommends changes to certai~i revenues and expenditures in the 2008-09 budget. The changes are detailed below and summarized in the attachment. General Fund revenues are projected to come in slightly higher than the adopted budget. However, this projection is based upon the additional $656,000 ERAF refund we expect to receive from the County. Revenues overall, excluding this ERAF increase, which cannot be counted on annually, are expected to be down as a result of major declines in sales tax, building permits, and the several other areas described below. While some of these declines have not been seen yet, staff is making conservative estimates in anticipation of the impacts of a worsening economy. In anticipation of a future drop in revenues, the City Manager and Finance Department are working with departments on a phased budget reduction plan, to be implemented starting this fiscal year and as part of next year's budget process. General Fund operating expenditures for 2008-09 are projected to come in $575,000 higher than the adopted budget, an unfavorable variance of 0.9%. This is due entirely to an increase in retiree health costs, as described below. Staff will provide Council with updated departmental expenditure projections during the mid-year budget review, when we expect to have a more accurate picture of operating costs. R P.VPY111P..C' Property Tax projections are $780,000 higher than budget, and $1.14 million higher than actual 07-08 Property Tax Revenue. Of this growth, $1.15 million was aone-time adjustment for five prior years of audit findings done by the Assessor's Office on Genentech's plant and equipment, where the County found the depreciation schedules used were too rapid. Therefore, that amount Staff Report Subject: Transmittal of First Quarter 2008-09 Financial Report and Resolution Amending the 2008-09 Budget Page: 2 of 3 cannot be counted on going forward. Those audit findings were completed between the time the budget was adopted and September. Transient Occupancy Taxes (TOT) are projected to come in $122,000 higher than budget. This is primarily because last year's actual receipts were higher than the adopted budget. We have not yet seen a drop in TOT, and the Conference Center Director has not seen any noticeable declines in advance Conference Center bookings. The first four months of this fiscal year have shown a steady receipt in this area, but, since businesses can change their travel planning rapidly, and given the worsening economy, we have built in a 10%~ drop for the remainder of the year to account for the general decline in the economy. Child Care Program Revenue (part of the charges for Service Revenue Category) is projected to bring in $184,000 more than budget, based on the 07-08 numbers that show the program is thriving. Sales Tax is projected to come in $580,000 lower than budgeted. In addition to the 25% reduction we had already included for the loss of construction-related sales, we are projecting a 5% decrease overall to reflect the current economic downturn. In addition to an overall decrease, staff has lowered the estimate for Lowe's (for which we have not yet seen actual data) and for the San Francisco Ford outlet, to be conservative. Building Permits revenue is projected to come in $700,000 lower than budget, continuing the clecline vde nave seen over the last two fiscal years. The 08-09 Adopted Budget had already been adjusted considerably to account for this, but given the worsening economy, the decline is now predicted to be steeper than originally thought. Correspondingly, Grading and Public Works Permits are projected to be down $140,000, and Fire Permits are expected to be down $100,000 from budget. Parking Taxes are projected to come in $75,000 lower than budget, reflecting a reduction of 10%. This is keeping with the drop in TOT we are factoring in to be conservative. Investment Interest Income is projected to come in $76,000 lower than budget, reflecting the trend toward lower interest rates and the shifting of the future retiree health reserve out of the General Fund and into the Benefits Fund. This shift reduced General Fund reserves by $4.0 million. ExRenditures: Retiree Health Costs are expected to increase $575,000 over the 08-09 adopted budget, reflecting primarily an increase in the number of retirees, but also a higher increase in premiums. Redevelopment Agency Chances: Tax Increment Revenue is projected to come in $8.75 million higher than budget, due to dramatic growth in the Downtown, Shearwater and Gateway project areas. Staff briefed the Council on the specific developments that made up the increases in assessed valuations during the RDA Study Session of November 19, 2008. A portion of this increase is also due to the Staff Report Subject: Transmittal of First Quarter 2008-09 Financial Report and R esolution Amending the 2008-09 Budget Page: 3 of 3 Genentech audit adjustment for the past five years, but most of the increase appears to be ongoing. Net tax increment is projected at $6.6 million, due to the adjustments listed below. .Adjustments include an ongoing reduction of $300,000 for future successful Genentech property tax appeals. $3.8 million was originally built into the 2008-09 budget in anticipation of a large hit from such appeals; the hit ultimately totaled $9.0 million and staff was able to accrue this amount bacl: to the 2007-08 fiscal year. We believe that $300,000 will provide adequate cushion for appeals on an ongoing basis. In addition, we are anticipating a State ERAF shift of $1.8 million in 2008-09. This could likely be an ongoing hit to RDA, and staff will address this again during the 2009-10 budget cycle. 20°lc Tax Increment Allocation to Low-Mod Housing is projected to increase $1.75 million and Pass-Throughs to Local Agencies are expected to increase by $2.1 million, due to the overall increase in tax increment anticipated by the RDA. FISCAL IMPACT: Staff projects that the General Fund will end the fiscal year with a net operating budget deficit of $36,000, before expenditures for capital improvements and debt service (without the prior years audit adjustment for property tax appeals, the City would rave realized a deficit of $1.~ million). The General Fund Undesignated Reserve is projected to E;nd the year at $3.8 million, above the ~3.2 nliiiioll iTiinililLilii set by the Clty' S reserve policy. Total General Fund D:scretiorary Reserves are estimated at $13.3 million. Since revenue sources are volatile in the current economic situation, staff is constantly monitoring the effects on the City's General Fund, and will update Council on any anticipated changes. In addition, the City Manager and Finance Department have begun collaborating with departments to implement a phased budget reduction plain beginning this fiscal year and going forward. ,- ~. a ~ Prepared by: _ ~z:=~~..1,..;~,.- f;j'`-''--~-_-P Approved by: ~ _~:. ~" - - ~.a- Jim Steele -B~ar~~ M. Nagel `~~..~ Finance Director City Manager Attachments: Resolution Summary of all Budget Amendment Changes (Attachment 1) First Quarter General Fund Operating Budget Details (Attachment 2) First Quarter General Fund Reserves (Attachment 3) Merged Redevelopment Project Area Summary (Attachment 4) CT/JSBN:ed RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AMENDING THE 2008-09 OPERATING BUDGET TO ADJUST REVENUES AND EXPENDITURES AT 1S` QUARTER WHEREAS, staff has presented the City Council with a review of the City's finances for the 1st quarter of fiscal year 08-09; and WHEREAS, it is recommended that the City Council review the 2008-09 ls` Quarter Financial Report and approve the lst Quarter 2008-09 Budget Amendment Changes included as "Attachment 1 A" hereto. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco hereby amends the 2008-09 Operating Budget to reflect the changes shown on Attachment B. =~ ~ ~ ~ ~ ~ I hereby certify that the foregoing Resolution was regularly introduced and adopted by the ('ity Council of the City of South San Francisco at a meeting held on the _ day of , 2008 by the following vote: AYES: NOES ABSTAIN: ABSENT: ATTEST: City Clerk Attachment 1 1st Quarter 2008-09 Budget Amendment Changes General Fund Revenues 1) Property Taxes: an increase of $780,000. 2) Transient Occupancy Taxes: an increase of $122,000. 3) Child Care Program: an increase of $184,000. 4) Sales Tax: a decrease of $580,000. 5) Building Permits: a decrease of $700,000. 6} Grading and Public Works Permits: a decrease of $1.40,000. 7) Fire Permits: a decrease of $100,000. 8) Parking Taxes: a decrease of $75,000. 9) Investment Interest Income: a decrease of $76,000. General Fund Expenditures 1) Retiree Health Costs: amend up $575,000. Redevelopment Agency 1) An increase in Property Tax Increment of $6,600,000. 2) A decrease in Prior Year Tax Adjustment of $3,800,000. 3) An increase in transfers to the 20% housing fund of $1,750,000. 4) An increase in Pass-through Expenses of $2,100,000. CITY OF SOUTH SAN FRANCISCO OPERATING BUDGET, 2008-09 ATTACHMENT 2 GENERAL FU ND SUMMARY, 1st Quarter Update 2008-09 Variance to 1st Amend. Budget Actual Actual Adopted Amended Qtr Favorable/ 2006-07 2007-08 2008-09 2008-09 Pro~sction (Unfavorable) % Variance Revenues and Other Financing Sources Property Taxes 12,992,109 14,029,884 14,390,507 14,390,507 1~,170,2l8 779,791 5% ERAF Refund from County 1,410,472 1,429,004 780,000 780,000 780,000 - 0.0% Sales Tax 12,753,418 12,481,431 12,715,229 12,715,229 12,135,333 (579,896) -4.6% Transient Occupancy Tax 5,959,034 7,098,285 6,450,000 6,450,000 6,571,732 121,732 1.9% Motor Vehicle In Lieu Fees 4,617,897 4,875,710 5,015,520 5,015,520 5,018,520 - 0.0% Revenue from Other Agencies 1,657,142 1,588,530 999,400 1,005,400 1,005,400 - 0.0% Franchise Fees 3,137,208 3,148,076 3,313,000 3,313,000 3,313,000 - 0.0% Business License 653,339 659,703 1,052,000 1,052,000 '1,052,000 - 0.0% Commercial Parking Tax 1,124,927 1,930,331 2,306,637 2,306,637 2,231,798 (74,839) -3.2% Building and Fire Permits 4,957,891 3,125,990 3,520,000 3,520,000 2,580,683 (939,317) -26.7% Charges for Services 6,628,277 6,332,600 5,818,200 5,818,200 6,002,200 184,000 3.2% Fines 1,043,528 1,077,003 1,140,000 1,140,000 1,140,000 - 0.0% Interest 985,631 1,046,866 650,000 650,000 574,000 (76,000) -11.7% Net Change Investment Value 66,204 299,068 - - ~ - Rent 2,693,837 2,509,670 2,686,281 2,686,281 2,686,281 - 0.0% Administrative Charges 2,018,500 2,118,614 2,225,000 2,225,000 2,225,000 - 0.0% Other 837,109 697,312 618,710 618,710 618,710' - 0.0% Transfers In 993,120 925,089 815,749 815,749 815,749 - 0.0% Subtotal Revenues 64,529,643 65 373 165 64,496,233 64,502,233 63,917,705 (584,528) -0.91% Plus Prior Year Carryovers 210,849 210,849 ~:. k ~ ~ ..~'~ < as ~~ ,~F , -,'k 7 ~ A.. ` ~;~, ~v Operating Budget Expenditures Administration Economic & Comm. Dev. Fire Library Police Public Works Parks and Recreation Retiree Health Cost Increase Provision for State budget hits . Excess ERAF Refund Variance to 1st Amend. Budget Actual Actual Adopted Amended Qtr Favorable/ 2006-07 2007-08 2008-09 2008-09 Projection (Unfavorable) % Variance 5,058,374 5,923,991 5,847,110 5,927,633 ' 5,927,633 - 0.0% 3,990,985 3,215,845 3,060,610 3,172,996 3,172,996 - 0.0% 15,164,670 16,893,671 16,609,207 16,609,207 16,609,207 - 0.0% 4,399,009 4,766,810 4,538,421 4,552,021 4,582,021 - 0.0% 17,907,675 18,665,949 19,428,219 19,446,159 18,446,159 - 0.0% 7,846,538 4,208,434 3,754,335 3,754,335 3,754,335 - 0.0% 4,927,347 10,828,733 10,711,990 10,711,990 ' 10,711,990 - 0.0% 575,000 (575,000) 400,000 400,000 400,000 - 0.0% .. ._. ~. .N:. ,.. . ,. 1.. .. ._._ k ..., , ,, ,, .... !~. 656,000 656,000 Net Operating Budget Impact (364,787) (503,528) CITY OF SOUTH SAN FRANCISCO OPERATING BUDGET, 2008-09 ATTACHMENTS Total General Fund Operating and Capital Budget, & Projected Changes to General Fund Reserves 1st Quarter Actual Actual Adopted PrD,~tion 2006-07 2007-08 2008-09 200$-08 Net Operating Budget Impact (from Table I) $ 5,235,045 $ 825,828 $ 146,341 $ (364,787) Less Transfers to Capital Projects: (826,253) (545,304) (1,403,500) {2.,83$,720) Less Transfers to Retiree Health Fund (4,000,000) (500,000) (54~?,000} Less Transfers to Debt Service (243,305) (210,000) (210,000) (210,000) ..~ - ~ ~ . . k,, T ~Y ~ Till! ~~'~,~> s= ' z ,;,~:€~ _ `~- .~~ General Fund Reserves Projection I. Discretionary Reserves/ Liquid Reserves Available Emergencies 1,291,000 1,272,000 1,290,000 1,291,000 Economic Contingencies 4,517,000 4,452,000 4,515,000 4,520,000 Designated for future Economic Development and Capital Projects 5,610,000 4,399,131 3,695,589 3,fi56,631 Designated for Post-Employment Health Benefits 3,000,000 f. s r. 7' ~a i _.., II. Non-Discretionary Reserves/ Reserves Already Committed Encumbrances 677,478 210,849 Advances to Other Funds Inventory and Other Appropriated Capital Projects 55,425 45,210 45,210 4$,210 793,615 1,344,569 Subtotal, Non Discretionary (Committed) Reserves 1,526,518 1,600,628 45,210 4!5,210 ATTACHMENT4 MERGED REDEVELOPMENT PROJECT AREA SUMMARY Summary of Revenues and Expenditures Variance to Amend. Budget Actual Actual Adopted Projected Favorable/ 2006-07 2007-08 2008-09 2008-09 (Unfavorable) % Variance REVENUES Gross Tax Increment Allocated Gateway 7,465,681 8,519,479 8,173,154 8,853,961 680,806 8.3% Shearwater 3,202,423 3,847,502 3,334,927 5,936,854 2,601,928 78.0% Downtown 10,145,145 12,749;421 12,602,501 18,197,328 5,594,827 44.4% EI Camino 2,915,991 3,445,927 3,954,947 3,826,538 (128,409) -3.2% Subtotal 23,729,240 28,562,329 28,065,529 36,814,681 8,749,152 31.2% Less ERAF shift - - (1,760,000) (1,760,000) Adjustments: Other Appeals & Settlements 2,217,703 (753,117) - (300,000) (300,000) Adjustments: County Admin & Other (164,858) (434,315) (280,655) (368,147) (87,492) 31.2% Rent 162,592 104,859 105,000 105,000 - 0.0% Interest & Other 2,530,307 3,324,354 1,274,000 1,274,000 - 0.0% TOTAL SOURCES OF FUNDS: 28,474,984 30,804,110 29,163,874 35,765,534 6,601,660 22.6% Variance to Amend. Budget Actual Actual Adopted Projected Favorable/ 2006-07 2007-08 2008-09 2008-09 (Unfavorable) % Variance EXPENDITURES Redevelopment Activities 2,053,551 2,842,811 4,357,835 4,357,835 - 0.0% Prior Year Tax Adjustment 8,416,485 3,800,000 - (3,800,000) -100.0% Capital Outlay 14,029 36,506 61,000 61,000 - 0.0% Debt Service 3,103,991 4,865,618 5,115,751 5,115,751 - 0.0% Special Projects 900,000 900,000 - 0.0% County Settlement 689,481 823,872 850,000 850,000 - 0.0% Transfers to Low/Moderate Income Housing Fund 4,600,681 5,561,843 5,583,106 7,332,936 1,749,830 31.3% Pass Through Payments to Taxing Entities Gateway 203,466 324,034 463,043 641,623 178,580 38.6% Shearwater 825,987 1,003,929 884,294 1,678,592 794,298 89.8% Downtown 2,261,955 3,072,717 3,049,710 4,197,903 1,148,193 37.6% EI Camino 245,826 254,941 317,467 290,641 (26,826) -8.4% Subtotal, Pass Through Payments 3,537,234 4,655,621 4,714,514 6,808,760 2,094,245 44.4% Capital Projects Tax Increment-Funded Projects, Current 59,650 14,658,664 1,235,800 1,235,800 - 0.0% Tax Increment Carryovers from Prior Year 3,793,506 3,793,506 Subtotal, Capital Projects 59,650 14,658,664 1,235,800 5,029,306 3,793,506 307.0% TOTAL USES OF FUNDS: 14,058,618 41,861,419 26,61$,006 30,455,588 3,837,581 14.4% Excess of Revenues over (under) Expenditures 14,416,366 (11,057,309) 2,545,867 5,309,946 Prior Year Audit Adjustment Fund Balance 41,337,292 30,279,982 35,589,929 Reserved for Loans Receivable 206,094 264,215 564,215 Designated for Capital Projects 8,163,360 1,424,606 - Reserved for Advances to Other Funds 12.200,215 19,409,727 29,409,727 All Other Reserved Funds 348,606 291,166 - Unreserved / Undesignated Fund Balance 20,419,017 8,890,269 - 5,615,987 ~o~~x„s~~ AGENDA ITEM # 3 o ~ ~, y J O c'~LIFOR~lA a _ epo DATE: December 17, 2008 TO: Honorable Mayor and City Council FROM: Marty Van Duyn, Assistant City Manager SUBJECT: AN AMENDMENT TO CHAPTER 20 OF THE CITY OF SOUTH SAN FRANCISCO MUNICIPAL CODE, SECTION 20.76.170 TO ESTABLISH PROVISIONS FOR EMPLOYEE-ORIENTED SIGNS FOR MULTI-BUILDING CAMPUS-TYPE FACILITIES Applicant: City of South San Francisco Case Nos.: P08-0093 & ZA08-0006 RECOMMENDATION Staff recommends that the City Council waive reading and introduce the attached ordinance amendment establishing procedures to permit employee-oriented signs for multi-building campus- type facilities, subject to the approval of a Type `C' Special Circumstances Sign Permit. BACKGROUND/DISCUSSION In January 2008, the City Council approved a zoning text amendment and banner program for the Genentech Campus Master Plan area which allows for the placement of "patient success story" signage at various locations on its campus. At that meeting, the Council directed staff to prepare an ordinance amendment to accommodate similar employee-oriented sign programs throughout the Citv. Consistent with the policies in the General Plan, and the direction from the City Council, staff has drafted provisions to allow owners and tenants to apply for a Type "C" Special Circumstances Sign Permit in conjunction with the sign permit procedures outlined in Chapter 20.76 (Sign Regulations). The Special Circumstances section of the Code allows for approval of signs that may not otherwise meet the requirements of the general sign regulations but may be appropriate in certain limited situations based on unusual site conditions, locations or unique signing requirements. The proposed amendment, as initially drafted, would establish a process and criteria to allow employee- oriented signs for multi-building campus-like facilities in the City, of which at least 400,000 total square feet of development is occupied by a single tenant. Re`riew and approval criteria address the same issues identified in the Genentech Amendment and include architectural integration, orientation toward the interior of the campus (not public areas), quality sign design (ex. hidden framing), and a requirement that the copy be associated with the on- site business entity. Staff Report Subject: Sign Ordinance Text Amendment Date: December 10, 2008 Page 2 To ensure that these criteria are met, the applicant would be subject to a Type "C" Special Circumstances Sign Permit, which would require Planning Commission review and approval. Planning Commission Discussion The Planning Commission reviewed the subject text amendment on November 20, 2008. The Commission voiced some concern about the potential for proliferation of advertising signage throughout the City, but ultimately voted 6 to 1 to adopt the attached Planning Commission Resolution recommending City Council approval of the ordinance amendment with an additional requirement that such signs be further limited to only the East of 101 Area (Nov. 20, 2008 Planning Commission meeting minutes attached). ENVIRONMENTAL REVIEW: Staff has determined that the proposed project is categorically exempt pursuant to the provisions of the "General Rule" (CEQA Section 15061 (b) (3)) that CEQA applies only to projects that have the potential for causing a significant effect on the environmenl:; and "Accessory Structures" (CEQA Section 15311(a) On-premise signs (CEQA Guidelines). Therefore, no further environmental review is necessary. CONCLUSION: Staf-f recommends that the City Council waive reading and introduce the attached ordinance establishing procedures to permit employee-oriented signs for multi-building campus-type facilities, subject to the approval of a Type `C' Special Circumstances Sign Permit. The proposed ordinance amendment is consistent with the South San Francisco General Plan and will provide other business owners and tenants in the East of 101 Area the ability to apply for employee~oriented signs within multi-building campus-like facilities. y : ___'~ Marty Van Duyn a~y M. Na Assistant City Manager City Manager BMN:MVD:ghb Attachments 1. Draft Ordinance 2. Planning Commission Resolution No. 2678-2008 3. Planning Commission Meeting Minutes -November 20, 2,008 ORDINANCE NO. CITY COUNCIL, CITY OF SOUTH SATvT FRANCISCO. STATE OF CALIFORNIA AN ORDINANCE AMENDING SECTION 20.76.170 OF THE SOUTH SAN FRANCISCO MUNICIPAL CODE, TO REQUIRE TYPE "C" SIGN PERMITS, AND ESTABLISH REGULATIONS, FOR CERTAIN EMPLOYEE-ORIENTED SIGNS TO BE ERECTED IN MULTI-BUILDING, CAMPUS-LIKE FACILITIES. WHEREAS, at its regular meeting on January 16, 2008, the City Council directed staff to prepare a zoning amendment that would allow employee-oriented signs to be erected on multi- building, campus-like facilities; and WHEREAS, the proposed zoning amendment will allow multi-building, campus-like facilities to erect employee-oriented signs, subject to obtaining a Type "C" Sign Permit, and complying with the proposed regulations, including architectural integration, orientation towards the interior of the campus, disguising attachment apparatus, and restricting copy to that associated with the entity for which the permit is issued; and, WHEREAS, the proposed amendments have been determined to be "Categorically Exempt" under the "General Rule" (CEQA Guidelines Section 15061 (b) (3)) that CEQA applies only to projects that have the potential for causing a significant effect on the environment, and under the exemption for "Accessory Structures, On-premise Signs" (CEQA Guidelines Section 1 X311 (a)); and WHEREAS, the proposed zoning amendment is consistent with the City of South San Francisco General Plan, because the amendment is compatiblf: with the General Plan's objectives and policies and does not obstruct attainment of any objectives or policies; and WHEREAS, on November 20, 2008, the Planning Commission held a properly noticed public hearing to consider the proposed zoning amendment, and recommend that the City Council adopt an ordinance to amend the Municipal Code to allow employee-oriented signs to be erected in multi-building, campus-like facilities in the East of 101 area; and WHEREAS, the Recitals, findings, and determinations contained herein constitute the independent findings and determinations of the City Council, and are based on all competent and substantial evidence in the record, both oral and written, which includes without limitation, the South San Francisco General Plan; the South San Francisco Municipal Code, all reports, minutes and transcripts from the November 20, 2008, Planning Commission meeting, and all reports, minutes and transcripts from the December 17, 2008, City Council meeting. NOW THEREFORE, based on the entirety of the record before it, the Cite Council of the -1- City of South San Francisco, does hereby ORDAIN as follows: SECTION 1. AMENDMENTS The City Council hereby amends section 170 of Chapter 76 of Title 20 of the South San Francisco Municipal Code to add subsection (g) as follows (added text in double-underline): 20.76.170 Special Circumstances. Unusual site conditions, locations, particular unique signing requirements, or other design factors may warrant types, heights, and sizes of signs not otherwise permitted by the regulations of this chapter. Such signs, including but not limited to the following, shall require a type "C" permit: (a) Roof signs which extend above the highest point on the roof or of the type not allowed by Section 20.76.160. (b) Any individual sign, or combination of .all signs on any one property, which exceeds the height or area limitations prescribed in this chapter. (c) Time and temperature signs, or any other signs which incorporate a changeable electronic message. (d) Readerboard signs or other signs with changeable copy, including theatre marquees. (e) Signs in the D-C Zone District which are of a classic design style, consistent with those designed and erected in the 1940's and 1950's. (f) Signs in the El Camino Real, Airport/South Airport Boulevard, and Highway 101 corridor areas which have special sign needs due to the regional nature of the use, the traveler- oriented nature of the use, or other special requirements. ~l Employee-oriented sins for multi-building came s-like facilities in the East of 101 area of which at least 400,000 total square feet of development is occupied by a single tenant. Suns approved pursuant to this subsection shall (il be architecturally integrated with the buildings to which they are attached; (iil be oriented toward the interior of the campus and not a public area. including public rights-of--way and public open space: (iii' hide from view or disguise an separate structure or apparatus required to attach the suns to buildings; and (ivl only contain copy that is directly associated with the entity for which the sign permit is issued. Type "C" sign permits issued pursuant to this subsection shall expire immediately if the facility is no loner owned or primarily occupied by the entit~~ for which the permit is issued. Application to the planning commission shall include reasons or exceptional circumstances which warrant consideration for exceeding the prescribed standards (e.g. nonconforming structures, visual obstruction, unusual building location, etc.). The planning commission may approve, conditionally approve, modify, or deny a request. The decision of the planning commission may be appealed to the city council. SECTION 2. SEVERABILITY If any provision of this ordinance or the application thereof to any person or circumstance is -2- held invalid, 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 3. PUBLICATION AND EFFECTIVE DATE This Ordinance shall be published once, with the names of those City Councilmembers voting for or against it, in the San Mateo Times, a newspaper of general circulation in the City of South San Francisco, as required by law, and shall become effective thirty (30) days from and after its adoption. ~ ~ ~ ~ Introduced and adopted at a regular meeting of the City Council of the City of South San Francisco, held the day of , 2008. Adopted as an Ordinance of the City of South San Francisco at a regular meeting of the City Council held the da~T of , 2008 by the following vote: AYES: NOES: ABSTAIN: ABSENT: As Mayor of the City of South San Francisco, I do hereby approve the foregoing Ordinance this day of , 2008. Karyl Matsumoto, Mayor 1177845.1 -3- RESOLUTION NO. 2678-2008 PLANNING COMMISSION, CITY OF SOUT~I SAN FRANCISCO, STATE OF CALIFORNIA. A RESOLUTION RECOMMENDING AL>OPTION OF AN ORDINANCE BY THE CITY COUNCIL TO AMEND SECTION 20.76.170 OF THE SOUTH SAN FRANCISCO MUNICIPAL CODE, TO REQUIIZE TYPE "C" SIGN PERMITS, AND ESTABLISH REGULATIONS, FOR CERTAIN EMPLOYEE- ORIENTED SIGNS TO BE ERECTED IN MULTI-BUILDING, CAMPUS-LIKE FACILITIES. WHEREAS, at its regular meeting on January 16, 2008, the City Council directed staff to prepare a zoning amendment that would allow employee-oriented signs to be erected on multi- building, campus-like facilities; and WHEREAS, the proposed zoning amendment will allow multi-building, campus-like facilities to erect employee-oriented signs, subject to obtaining a Type "C" Sign Permit, and complying with the proposed regulations, including architectural integration, orientation towards the interior of the campus, disguising attachment apparatus, and restricting copy to that associated with the entity for which the permit is issued; and, WHEREAS, the proposed zoning amendment has been determined to be "Categorically Exempt" under the "General Rule" (CEQA Section 15061 (b) (3)) that CEQA applies only to projects that have the potential for causing a significant effect on the environment; and WHEREAS, the proposed zoning amendment is consistent with the City of South San Francisco General Plan, because the amendment is compatible- with the General Plan's objectives and policies and does not obstruct attainment of any objectives or policies; and WHEREAS, on November 20, 2008, the Planning Commission held a properly noticed public hearing to consider the proposed zoning amendment. NOW THEREFORE, based on the entirety of the record before it, which includes without limitation, the South San Francisco General Plan, the South San Francisco Municipal Code, all reports, minutes and transcripts from the November 20, 2008, Planning Commission meeting, the Planning Commission of the City of South San Francisco, does hereby RESOLVE as follows: 1. The foregoing recitals are true and correct .and made a part of this resolution. Subj ect to conditions of approval, the Planning Commission recommends adoption of the proposed zoning amendment to Municipal Code section 20.76.170, to require Type "C" Sign Permits and establish regulations for certain employee-oriented signs to be erected on multi-building, campus- -4- like facilities, as described in the draft ordinance attached as Exhibit A, and incorporated herein by reference. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Planning Commission of the City of South San Francisco at a .regular meeting held on the 20th day of November, 2008 by the following vote: AYES: Chairperson Giusti, Vice Chairperson Teglia, Commissioner Moore, Commissioner Oborne Commissioner Sim and Commissioner Zemke NOES : Commissioner Prou ABSTAIN: None ABSENT: None 9~ ATTEST. Planni Commission Secretary Susy Kalkin ll69221.1 -5- Exhibit A Draft Ordinance 20.76.170 Special Circumstances. Unusual site conditions, locations, particular unique signing requirements, or other design factors may warrant types, heights, and sizes of signs not otherwise permitted by the regulations of this chapter. Such signs, including but not limited to the following, shall require a type "C" permit: (a) Roof signs which extend above the highest point on the roof or of the type not allowed by Section 20.76.160. (b) Any individual sign, or combination of all signs on any one property, which exceeds the height or area limitations prescribed in this chapter. (c) Time and temperature signs, or any other signs which incorporate a changeable electronic message. (d) Readerboard signs or other signs with changeable copy, including theatre marquees. (e) Signs in the D-C Zone District which are of a classic design style, consistent with those designed and erected in the 1940's and 1950's. (f) Signs in the El Camino Real, Airport/South Airport Boulevard, and Highway 10.1 corridor areas which have special sign needs due to the regional nature of the use, the traveler- oriented nature of the use, or other special requirements. (gl Employee-oriented signs for multi-building campus-like facilities in the East of 1 Ol Area, of which at least 400.000 total square feet of development is occupied by a single tenant. Sims approved pursuant to this subsection shall (i) be architecturally integrated with the buildings to which they are attached (iil be oriented toward the interior of the campus and not a public area. including public rights-of-way and public open space; (iiil hide from view or disguise any separate structure or apparatus required to attach the signs to buildings: and (iv) only contain __ copy that is directly associated with the entity for which th,e sign permit is issued. Tvae "C" sign permits issued pursuant to this subsection shall expire immediately if the facility is no longer owned or primarily occupied by the entity for which the permit is issued. Application to the planning commission shall include reasons or exceptional circumstances which warrant consideration for exceeding the prescribed standards (e.g. nonconforming structures, visual obstruction, unusual building location, etc.). The planning commission may approve, conditionally approve, modify, or deny a request. The decision of the planning commission maybe appealed to the city council. -6- MINUTES November 20, 200 CITY OF SOUTH SAN FRANCISCO REGULAR PLANNING COMMISSION CALL TO ORDER /PLEDGE OF ALLEGIANCE ROLL CALL I CHAIR COMMENTS ROLL CALL PRESENT: Commissioner Moore, Commissioner Oborne, Commissioner Prouty, Commissioner Sim, Commissioner Zemke, Vice Chairperson Teglia, and Chairperson Giusti. ABSENT: None. STAFF PRESENT: Chief Planner Susy Kalkin, Senior Planner Carlson, Senior Planner Beaudin, Associate Planner Gross, Administrative Assistant Aguilar„ Senior Civil Engineer Bautista, Sergeant Kallas, Fire Marshal Da Silva, and Assistant City Attorney Grossman. AGENDA REVIEW Chief Planner Kalkin noted there were no changes to the agenda. ORA L COMMU NICATIONS CONSENT CALENDAR Approval of meeting minutes of November 6, 2008. Motion Commissioner Prouty /Second Vice Chairperson Teglia to approve the Consent Calendar. The motion approved by the majority voice vote. Commissioner Sim -abstaining. PUBLIC HEARING 2. Sign Ordinance Zoning Text Amendment City of South San Francisco/applicant Citywide P08-0093: ZA08-0006 Text Amendment -Sign Ordinance text amendment to section 20.76.170 Special Circumstances, to allow employee oriented signs for multi-building campus-like facilities in accordance with SSFMC Chapters 20.76 & 20.86. Senior Planner Beaudin presented the staff report. There being no speakers the Public Hearing was closed. Commissioner Sim noted that he had no issues with the zoning text amendment. Commissioner Prouty was concerned that the text amendment would cause a slew of signs on many of the small campuses in the City. He explained his concern with setting a precedent when Genentech applied for November 20, 2008 Minutes Page 1 of 10 -~- these types of banners, although the Assistant City Attorney assured him that the banners were only being approved for large campuses that met the criteria outlined in the proposed text amendment. Commissioner Sim noted that the Commission has discretion over where the signs are approved. Commissioner Prouty was especially concerned with not being able to deny these signs if they met all the requirements both on the east and west sides of 101. Susy Kalkin, Chief Planner clarified that staff is being responsive to the City Council's request to allow this for other campuses. She provided additional criteria that would apply to banner sign programs such as minimum campus size and a multi building campus requirement. Commissioner Prouty was supportive of using multiple buildings as a threshold in order to minimize the number of applications for signs of this type. He added that a 400,000 thousand square foot building could have a banner under the current standard. He observed that the City has made a conscious effort to reduce the amount of advertising and does not want to create a sign problem. Commissioner Sim stated that the staff report explains that the signs are only for multi building campus scenarios. Commissioner Prouty noted that a minimum number of buildings can create a shield from the public view. Vice Chairperson Teglia noted the Genentech Master Plan amendment was only for internal streets and stated that by looking at staff's proposed language the sign could not face the public right-of-way. He further noted that a single building would not qualify even if it meets the square foot requirement. He opined that the language is good to protect against Commissioner Prouty's concern and questioned if additional requirements such as increasing the square footage should be included. Chief Planner Kalkin added that staff looked at square footage thresholds and more than one building to determine where these signs could be discreetly placed. Commissioner Prouty agreed to have the signs in a discreet location and did not encourage them on the west side of 101. Senior Planner Beaudin commented that the language is stronger than what was used with the Genentech Master Plan Amendment. Vice Chairperson Teglia recommended having an additional condition that the sign be of a size that can be hidden from public view. Chief Planner Kalkin noted that this type of sign program is discretionary and it is not intended to be used for general advertising purposes but employee oriented. Commissioner Prouty stated that if the Commission does not like a certain application, the applicant may have cause of action because they are not being treated fairly. Chief Planner Kalkin explained that 400,000 square feet is a substantial size business in the community. Commissioner Moore stated that the language states the Commission may deny the project. Commissioner Oborne clarified that a "discretionary" application also applies to location, aesthetics and other items and is not limited to size. Commissioner Zemke questioned if there was a size limitation on the signs. Senior Planner Beaudin stated that there is not a size limitation on the signs because the variables are very broad and the site opportunities are very different which is why the Type C sign permit process requires staff, Design Review Board and Planning Commission reviews. Vice Chairperson Teglia stated that the Genentech signs benefit the employees and excite the public. He added that the aesthetics need to be bold and vibrant, yet subtle. He pointed out that these types of signs need to be discretionary and questioned if staff needs to add more requirements based on the Commission's discussion. He asked if the City could require that the message be of a general public or private benefit that meets the aesthetic approval of the Commission. Assistant City Attorney Grossman replied that the City has limited authority to regulate the copy of the signs and only restrict the sign to be associated with the business or entity. Vice Chairperson Teglia questioned if the City could require the sign be of pleasing aesthetics. November 20, 2008 Minutes Page 2 of 10 -8- Commissioner Sim recalled that the Commission encouraged a gallery effect on the Grand Avenue Comerica bank and noted that the Commission cannot dictate what they put on signs, but they don't want the signs to be commercialized. Vice Chairperson Teglia noted that all the campuses are on the East of 101 area and inquired if the Ordinance can be limited to the East of 101 area. Chief Planner Kalkin replied that this could be limited in this manner but added that these types of programs have been used in hospitals or similar facilities. Commissioner Prouty asked if the City could restrict advertising on the signs or not. Assistant City Attorney Grossman clarified that there is a requirement that the copy relate to the entity that is requesting the permit. Ne added that the company could have a sign that promotes their products but not one that promotes another business. Commissioner Sim questioned how the sign ordinance would relate to a sign that is on the inside of an atrium window and can be seen by the public. Chief Planner Kalkin stated that if the ordinance regulates the sign the Commission would have purview over it and added that the issue arises on defining a sign versus a backdrop in the lobby. Motion Vice Chairperson Teglia /Second Commissioner Zemke adopting resolution 2678-2008 recommending that the City Council approve P08-0093: ZA08-0006 with the additional recommendation that it be limited to the East of 101 business area. The motion approved by the following roll call vote: AYES: Commissioner Moore, Commissioner Oborne, Commissioner Sim, Commissioner Zemke, Vice Chairperson Teglia, and Chairperson Giusti NAYS.: Commissioner Prouty. Type "C" South Campus Banner Program Genentech, Inc/applicant HCP Life Science Estates/owner 470 E Grand Avenue P08-0080: DR08-0039 & Signs08-0049 Type "C" Sign Permit to allow employee oriented signs at the Genentech South Campus located 450 & 640 East Grand Avenue in the Planned Industrial Zone (P-I) District in accordance with SSFMC Chapters 20.32, 20.76, 20.85 & 20.86 Public Hearing opened. Senior Planner Beaudin presented the staff report. Commissioner Prouty questioned if the overlay district included this site. Chief Planner Kalkin clarified that the overlay district includes Genentech owned properties and this site is leased by Genentech. Shar Zamanpour, Genentech Inc., commented that Geraldine O'Connor and Andrew Keller were also present. She provided a presentation on the South Campus banners to the Commission. There being no speakers the Public Hearing was closed. Commissioner Prouty noted his support for the project and said that he would be in support of future sign applications that reflect the standards that Genentech has set. Commissioner Zemke and Ms. Zamanpour discussed repairing the signs if there is wear and tear on them prior to the annual change. Ms. Zamanpour replied to Chairperson Giusti's question with regards to having multiple pictures on the sign that the composition will remain the same but the content will change and only one individual will be featured on each sign. November 20, 2008 Minutes Page 3 of 10 -9- ~o~zx s.~,~~ o n J O c'~LIFOR~1~ AGENDA ITEM # 4 Citv Treasurer Report DATE: December 17, 2008 TO: The Honorable Mayor and City Council FROM: Richard Battaglia, City Treasurer Jim Steele, Finance Director SUBJECT: RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT WITH CHANDLER ASSET MANAGEMENT FOR INVESTMENT MANAGEMENT SERVICES RECOMMENDATION It is recommended that the City Council approve the attached resolution authorizing the City Manager to execute a contract with Chandler Asset Management for management of the City's investment portfolio. BACKGROUND/DISCUSSION At a September 17, 2008 Study Session, the City Council reviewed a report by MBIA on the C'ity's portfolio and investment policy. Many of the recommendations in MBIA's report calling for additional portfolio oversight were well received, but could not be implemented with existing staff resources, which their report also acknowledged. Therefore, the City Council directed the City Treasurer and City staff to issue a Request for Proposals (RFP) to qualified firms to provide investment management services for the City's portfolio. Many other public sector entities take advantage of these services, with the City of San Mateo and the San Mateo County Transportation Authority being two examples close to home. Staff sent out an RFP to eight firms. Three firms responded, and all three firms were interviewed by a panel consisting of the City Treasurer, Councilmembers Addiego and Garbarino, the City Manager, and the Finance Director. While all three of the firms interviewed were well qualified, there are several reasons the panel unanimously selected Chandler Asset Management as the top choice. First, the panel was impressed with the firm's staff, their credentials, and the length of time they have worked together. Chandler has been providing investment services to California public sector clients for 20 years. The President, Kay Chandler, was the investment officer for the City of San Diego and the County of San Diego for several years prior to that. Chandler's Chief Investment Officer, Martin Cassell, has been with the firm for 17 years. Jayson Schmitt, who City Treasuer Report Subject: Award of Contract. to Chandler Asset Management Page 2 of 3 would be the lead Portfolio Manager for the City of South San Francisco, has been with the firm for 13 years. All three are Chartered Financial Analysts (CFA's). Second, Chandler impressed the panel with the fact that their firm is independent of larger companies. 111 addition, Chandler has demonstrated a history of public sector portfolio management, and the various aspects of the firm work closely as a team. Some firms have portfolio managers in one city, for example and credit analysts in a second city. While there is nothing wrong with that, the panel liked the teamwork exhibited by Chandler's staff. The credit analysts and the portfolio managers all work in the same office in San Diego, the closest of the three firms' interviewed. That means the team jointly keeps an eye on market trends together, encouraging a more consistent and unified approach. (The other two firms had sales offices in San Francisco or San Diego, but portfolio management and credit analyst staff were in separate cities outside of California). Third, Chandler spent the most time researching and providing written follow-up to the one interview question that was provided in advance to all three firms. That question had to do with analyzing the County of San Mateo's Investment Pool as of July 31S` and providing comments to Lis as if we were a client of theirs. Chandler was the only firm to provide a detailed written response, and it had several observations that the other firms did not snake. Chandler also had outstanding examples of monthly and quarterly investment reports for both staff and for presenting to the City Council. Samples of those reports are attached. As part of staff's due diligence, references were checked with two cities that have been using Chandler. The Town Manager of the Town of Danville recommended Chandler highly, and has been using theirs since 1994. The Finance Director for the City of Newport Beach also recommends Chandler highly, and has been using theirs since 1991. FISCAL IMPACT Chandler's fees are based on the dollar value of the portfolio they will manage on behalf of the City of South San Francisco. Their fee structure was competitive with the other two firms. Assuming the City of South San Francisco has $100 million under management with Chandler, the annual fee for their services would be $85,000. The interviewing panel believes that the extra protection, oversight, and reporting that the City will obtain from professional investment management services will more than offset the cast. It is also very possible that a more consistent portfolio earnings rate will be earned over time, offsetting the cost of this engagement. For that reason, the attached Budget Amendment resolution authorizing an increase to the City Treasurer's budget of $42.500 (half a year of the $85,000 cited above}, can be offset by additional portfolio earnings, and will therefore have no impact on reserves. City Treasuer Report Subject: Award of Contract to Chandler Asset Management Page 3 of 3 CONCLUSION CJiven the quality of Chandler Asset Management's proposal, their presentation, and their references, the Treasurer, the City Manager, and the Finance Director all recommend approving a contract with theirs. A draft contract is attached, and the attached resolution grants the City Manager the authority to execute a final contract with Chandler. B y. Approve a ` ~ ~ ~ Ri har Battaglia ~`- r . Na Ci Treasurer City Manager B y, _.. ~ _ Jim ° eele Finance Director Attachments: Resolution Sample Reports Proposal JS/BN:ed RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO AUTHORIZING THE CITY MANAGER TO SIGN A CONTRACT WITH CHANDLER ASSSET MANAGEMENT WHEREAS, the City Council, with the concurrence of the City Treasurer, desire the services of a professional portfolio manager to oversee the City's investment portfolio of operating funds; and WHEREAS, the City Treasurer and Finance Director issued a Request for Proposals in order to search for a qualified portfolio manager; and WHEREAS, three qualified portfolio management firms were interviewed by a panel that included the City Treasurer, two City Councilmembers, the City Manager, and the Finance Director; and WHEREAS, the interview panel recommends that Chandler Asset Management be selected to manage the City's portfolio of operating funds on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services required. NOW, THEREFORE, the City Council of the City of South San Francisco does hereby resolve that: 1. The City Manager is authorized to execute a contract with Chandler Asset Management for investment management services. 2. The City Treasurer's budget is hereby amended by $42,500 to fund an estimated half year's portfolio management expense. That expense is offset by $42,00 in additional interest earnings, and will therefore have no impact on City Reserves. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a special meeting held on the 17`" day of December, 2008 by the following vote: AYES: NOES ABSTAIN: ABSENT: ATTEST: City Clerk 117>~~6.1 °{~' a_ F ~ aam ~..~ r~,, F~° I~ ~:~ fig. ~~~~ r; g ;v~ 6 ~Gi r &~~' Lii I)'Ai' ~ ..~~. 1, I } ,# { }~t~~: l -~ ~ .S V~' ~,1 a4 F! ru~ 4 ' ' <JKI `.. yj t ,..~~ y I ~~' ~~{' x r ~; i~- - ~- . ~ ~ .' n ~~ - ~ - Sample Reports ~ ~ .~ ~~ k-~ ~: ~~ 6 a. 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N M j ~ ? ~ ~ ,~ I O N ~ ~ M ~ - ~ p r O ~ -- Y ~ 3 l ~ y; _ a ~ ~ I '~ 0 0 0 0 o ~ o 0 0 O . n ,: ~ e-~ O ~ O O O ~ O ~ O O l :. O O O O O O O .:i~ '~ O O L7 L'7 I O O L7 O O ~ M M O Ur' N ~ L7 I f~ c~ CV .O N i p= N O --~~~; N N N N N ~,~ I I , II z- j i I ~. ~ ~ ` ~~~ "~ (` ~jyi I I II N I (~~ N _ ._ ~ ~ ~ ~ _ i i O C I o -`~ o ~ ~ I - I = o~ ~ cl - I ~ r a., ~ m ~ _ _ Jo ~ _ , I r`-f _ ;-. ~ ~1 ~~ ~, ~ ~~ ~ ~ I Z G j 7 0 1 G L~~ ~, , a O~ ~- 1 Z- J , ~; ,,~,I t~ .; G I i i ` V) C _ i I Ui J V: N I f/1 ~ I Li _ _ _, ~ UJ ^ U~ f r c'\ I Gr c ° G:~J G>L,I O_ ~I C.\I ~~ I ~ - 0 ~' i r~ l r r ` I r~ i ~ i i r I ! t d _~ ~~ M J (f) C J (f, L'7 ', ffj 4'~ L i 1~ I~ i J - v~l ~ I (rJ r 1 i _ ~I r~ I J M I I ~ _ ~ I I I ~^ C_ I ~ i~ i c~ ~ 1 ' • ~ ~ ~~ ~ ~u ~` N N I N ;\; I ~ ~I N I Cv c ,~ ~ is , i, Is ~I~ o, In I ;c~ c~I I Q N 6() i M N ^1 u~'~ L c ~ N ti O ;a '~I I r~~ L~ ~ ~ I I 'r O 4'7 ~ ~o L!7 U a' N _ ~ x u ~ ~ ~ `~ t~ rr t9 O h~ ~rj ~ M M ~ ~: C\ ~ tD CO G7 r1' O .. N 0~ O O N N 8~ N N ~ LL7r I~ ~~ 761 ci° p~ ~- 6) O C? tD r ~ ~ US ~o ~ o. ~ t` h• O N M ~ 7 O t~ M C I ~ cp Y~ H W N C ef' M LG~ e? N coo v c^i M M CY CD ti ~ tci ~ r r q C7 I ,o I N r- M 3 I o ~n O t~ o , ~~ O ~ O O'> I O ''~ tiJ W O ~ ti m r ~= I I ~ 1 1 i I ~ ~ I v _ I ~ I G' J ~ I e.. ~ ~ I t'.i I I O I ~ ^~II I ~ I / ~ ~ G I c~ I t. ~I I ~I ~ r I ~ ~ i i C~ ~ J ~ I I C F` I~ ~I r' I ~ J J z L C r. r~ ~' C) r` \~~ ~ ~ f ~~~~AGEi~1ENT ~~ ,.o_~ :~._.~ v.. CE~c:,-, ~ ING OL!R 20Ti-~ 4'EAR .~©~er 2.~, :L~v~ Sure 350 .,zn Die_=^. r ~, 52 ! 2 ! -3039 838.5?b.37?7 804,3 i 7 ?~?7 258.S~~b.3i ? I -26- _ ~.: " ' j ;~'~, ~ [, 1. 4 we 1 { `, S ' ~~ S_T `~ df ~` ,_....`t......~ fvi,~~~ti3,G~~v'~i~~T __~_~~~T,Tih~C~ O!JR 20TH 1'~:~R ~ntl'CdL1Ct1021 ............. ......................................................................................... ............................... ~. Dr~anization ............. ........................................................................................ .......................... ~. PersoiLnel .................................................................................................................................... 7 ................................... .......... ....... .... l ~. Ir_~-estment ?~~Iana`emer~t approaci~ and Discipline ........... ~' D. ~eportin~ ~apabiiities .............................................................................................................. i3 F FaPs ..... ................................................................................................... -~?- --1 ~~, ~ fir'-_~~ ~~s a ~" ~ ;~' I F. y`L~~'L`1~:SuG~t~ol~ ~av Ci?andler. President, founded Chandler Asset Management in 195 with the Beal of providing superior performance results and investment services to her firm's clieiZts. The fiiin no`~~ manages over ~.o billion in assets far 67 clients. Our success at delivering excep*.ional service to our clients is the result of our disciplined approach to portfolio management. Our poi-tfol_io management team has a clear goal: to 5tructiire each client's portfalio for safet~~ and liquidi~ ~. and the expectation of outperforming the benchnark over a range of interest-rate scenarios. At the beginning of the relationship, we discuss ~~rith a client all relevant aspects cf the in~,~estmeilt program. ~~+%ith a comprehensive understanding of their program, including investment objectives, risk tolerances and policy constraints, we then assist them in selectir~~ an appropriate 'oeiiclur,arlc for the poi folio. This benci?inark provides the risk guidelines for achieving their investment objectives. Our iz?vestment philosophy is based on the belief that portfolio management is risk management. Once a client has defined risk ~-uidelines and chosen a benchmark, our poi"t-folio management team has the framework necessary to execute a disciplined ii?vestinent prograr,l with the objective of maintaining the portfolio's risk profile withsl the clients parameters. ~,~- ith the frame`~~orl:: in puce, oui" portfolio managers structure and rebalance portfolios in a team environment. Eacri poi tfolio mat?alter has earned the designation of Chartered Financial Analyst. Their collective expertise contributes to a ~~~ell-rounded analysis of investment ideas, and is one of the l:evs to cur competitive results. Another primary coati"IbLitcr to our performance is Chandler's proprietaiti~, quantitative Poi°t~ olio C~ptif~zi=~ti~f~~ Itlodel. This 1~~T~~~'el generates a silo-month horizon analysis based on dein?ed risl: constraints and marl~et scenarios. The horizon analysis forms the basis for determining portfolio duration. maturity" structure and asset allocation:. The same discipline and dedication to excellence 1s;e apply to managit?g portfolios is the standard for all of the sen~ices we provide. Our significant involvement in regional ar,d natior,ai associations enhances ol_lr expertise on recoi??mended practices and keeps us abreast of timely information cn i?e~y developments tl?at benefit ollr Clients. ~1'e have e?~ten5lVe experience In 5ettlll?g trades, aCCOtln`llil~ ai?d reporting on portfolios, reyie~ying iilvestme,nt policies and conducting investmei?t training. In addition. ~,~~e are commined to prompt and fri~ndi_~ responses to our clients' requests. C handier Asset ~~az?a~ement can help the. Cin~ of youth San Francisco aeiiieye its in~~estment objecti~-es a ~ ~ -F~CY•T' r `1Ct'` t C°.~;J '~ ~ ~1 I1~' Li ~A tl?° fiollo~ving by providing compr~.:hei?si~~-e~ ln~~..._,,.>_en~ may?G menu 1 ic„_ and up"ior c__.nt s ~~l~ti. proposal presents detailed inforlnatior~ about oLu fern? including our experleilce. investment philosophy gnu process, and commitment to serving the public sector. _~g_ 1' _~. `ter ~`r~dT~~F,c".~i~~ 1_. Describe tl-ie brief history of your organization. including date founded, o~~nership, and any subsidiary relationships or relationships a-ith other nancial illstittltions. Chandler Asset Management is an independent fixed-income investment adviser registered «ith the. Securities and Exchange Commission. ror ?0 years Chandler Asset Management has provided irvestmer~t management services to the public sector, as well as to foundations, endowments and corporations. Chandler is a California S-corporation, and a certified «~oznan-o~.ti-ned business ente.prise. The rev employees of Chandler are the oj~~ners of the firm, an oenership structure that contributes to our ability to atiract algid retain the highest qualit;~ investment professionals. Founder and President Kay Chandler is majority o~~rner of the .firm. CEO and Chief Investment Officer ivlartin Cassell owns tl-ie remainin6 shares. Chandler Asset I\~Iaa~a~ement is a filll_v hldependent firm; we are riot affiliated with any broker/dealers, barrl~s, advisers or financial institutions. Our plain ofzce is located in San Diego, California. ~L'e provide poi~foiio manager~~ent. client support ser~;~ices and reporting front ot~r San Diego office, located at: Chandler ~? sset Management 9~' S ~ Towne Centre Drive. Suite ~ ~ ~ San Diego. CA 92121 T ei: ~OC~.317.4 %~7 fax: 8~8.~4b.37~1 The firm also has offices in Pleasa?iton. California and Golden. Color ado. ?. rlas the fn•ir~`s ov~-nership chanced in the Iasi ti~ree years? ~~ he firm's ownership has not c?lan~ed ly1 the Last three ~-ears. -29- w 1 .~ ~~ i~4 r-:C~I -5 \_ .- ~ ~.~..t ~..,,.'1, ~1/' r`, ^v i~ tom, r ~ ,/; C;'~ I i_t~ CL3tt~,T~l~i ~ l7~ ~nR ~(~ I ry t~C,~,~'i ~. D~~sCrlbe eXpel'1e11Ce OI file f1rI11 111 prOVi~lll? 1nveStment mana~elnellt Sel`y1CeS t0 the publrc sector. The primary focus for Chandler Asset NSanagement since our inception ir. ~~88 has been managing funds for Califonlia public agencies. Our expertise is e ~tensive. Staff members have several years to several decades of experience managing public fiends. Our il.vestment professionals apply time- tested, results-proven concepts of conservative, fixed-ineeme management to the challenges of investing public :Fields to meet the specific objectives and constraints of safety, liquidity and returns that equal or exceed market benc'_lmarks. We currently advise 4b California public agency clients; and maintain both discretionary and nor~- ciiscretionar}% relationships. The range of assets under advisement for agency portfolios is as large as the City of Los .~.rlgeles (~~.0 billion) and as small as the City of Pleasant Hill ($4.1 million). Our firm also has stiCStantial experience managing the assets of other fixed income investors, including not-for-profrt healthcare providers. foundations and endov,ments; and for-profrt corporations. This experience v~~•ith investors outside the public sector enhances our ability to bring the best practices of the private sector to our governmental clients. 4. Describe any SEC, NASD or other regulatoi-v censure ar litigation related to services the firm or its employees within the .past three years. Neither Chandler asset Management llor any of its officers or elnplo_yees has ever been the subject cf an)' SEC Cellstlre Or Iltlgatlol2. ~. ;Mate the dollar value of the assets and the number of port;=oiios the film has under direct and continuous management; categorized between the public Sector in California and other clients as sho4~m belo~~ - _ vF - ~+'tN;~(~+ 4~~ 7~p~:"v. ~~rt~a~;9C~t~ ,^ wa~6k~ +;r ~~\@ ~ .,, i .. ~ ~. ~ _ ~, ~ . ... ~ - - . ,. -z ,. .-~ ~. .' cf Portfolios ____ 4° 0 ~ 19 Discretionary r r'~' Orl-C11 sCTetlonaii' $;.0='8 175.000 0 ~ ~87,~74.000 * :'a>avisoi~~ Clients~~ n ~~,8>?,75=,° ; `' I 0 0 - V~je have. t«c clients-tile Cin~ of Los Angeles and the Counn~ of San Diego for ti.~l~ich ~~-e provide consulting and advisor,,- services; trade execution is performed by these clients' internal staff. -30- ~ ~.~ c~1 ~i ~ ~ N`'~ "- ...~u~lL"'Lc~Ot~.'_ .E ~ ~~_. ~ ri~J'_ I ~~ 5. .Provide a list o_f relevant client references ;within the pt:blic sector u: California. including? contact persons and teleprione -lumbers. A relevant list would include similar ~~pes of jurisdictions, and comparable portfolio size ;; iihin California. Follo;ving are five client references for Chandler Asset 1Vlanagement. A complete list of our clients is available upon request. Chan~'~e~• ~sse# i~'~a~aa~err~eut ~1I~1~ic ~~~enc .~ ~~~'°I ea~~.es Se~terr~b~~ ~0, rJf~~ F. `7' ~ { ~ I ' I ~.1'~ 4 ~° [i A y~ R I ~ I I ~, ~' ~ ~t v ~a~ 1 ,~ r~. '`~. k ; _ I, F n~~. ~" .. ,r t ., + ..'~s~.K-- .. - ,.. j. , ~~ R~~~J.- t ~ @£ '.~tj , a E _ ?R,a-~ _~ h E ! F~,B~ ~€t ;~x,~- '~3 .. Ivlr•, Dick Halev City of Corona _ Treasurer 400 South Vicentia Avenue Si`53.~ million ?006 ,, - 9~ 1-?79-~~00 Corona; CA 9? 8 ~? dickhalei-lc~~ci.corona.ca.us ~ T;~Ir. Joseph Calabrigo Toti;~n of .Danville ~ Town Nlana~er 10 La Fonda Vv ay $5~.~ rri~illion 1994 925 ?14 X302 I Danville, CA 94~?b ~ ~ icala~ri6o<<z~c~.danville.ca.us ~ j 115. i1lrrl(.~'erl~' ~Jartto v ~;n Citt~' of Rocklin ~ Treas~.rer 3970 Roclchr~ Road I 55.3 million 1996 916-E25-~02~ Rocklin, CA 9~&77 l;i-r_srirocltlin.ca.~ov Cit1 of San Bernardino ~ ~ IVIr. David Keilned`~ i i 3001_~,~o?-th D Street m 7 million ~?5 ., 005 Treasurer ~, Second ~ poor . 909-38~--~0?? San Be~7.ardina. C<~ 9~'4i~ ~ ~ ;? i~'~_e,_~,ec:;c~a!~eaol.co~_~ ~ Janet Salt etti i, I~1s Cif' of Stocltiton ~ . ~ '~ Finalice Direc~or ~ =~?~ ~. El Dorado Street i S?=1?.0 million ''007 JO°-9~7-g;60 Stoclaon. CA 9~~02 i I (~ c~ lt~i?L ~.s?~`i'"'iI L~~~1.s~L ~i.lon.t+C-'.~~s -i. Describe the t~.~pe and amount of insurance coverage the tirm maintains ~-ith respect to investment n~ana?ement activities. Chandler Asset ~~Iana~eln.nt carries S10 million in ez7-ors and omissions (professional liability) insurance through Tu~i1: Ciri: fine Insurance. a Hartford compan~~. The f1n11 also carries a al million fideiin bond;vith T~rie Hartford Insurance Company. -31- ~. Provide prospectuses oftlle mone~~ market mutual funds yotl ~votlld use for the Cin~'s liquid cosh. Tlie specific mone~,~ market mutual imd used for the City`s liquid cash would be provided by t11e City-'s custodian bank. Separately, eve have provided a prospectus for the Dreyfus famil_`~~ of money market fiends offered through your current custodian, Bank of New' York/l~Zenon. It is our practice to use money market fiir~ds nlininlally-only for temporarily uninvested maturi±~% and interest proceeds. Generally, eve obtain higher yields for our clients through direct investment in securities. 9. Identify vvhieh bank you -~%ould reconunend working tivith to provide safekeeping/custody of securities. ire have excellent working relationships with custodian banks nationwide. ~~%e ~~ork e~~tensivel~~ with BI~'Y/Mellon, the city's current custodian, and recommend them highly. Should the city choose to go through an ILFP process to select a new custodian, we would be delighted to discuss ~~-ith you the advantages and disad~-~alltagPs of a number of other custodians tivith whom we work. i 0. Describe the. f1rlr's online account access capabilities. and clarify the number of transactions that can occur daily or per month within the fee structure you have proposed. Specifically, would C-ins staff be able to move funds eiectronicaliy on a same day basis bettiveen the firm's account and file Ci~~ s local checking account? ;The Ci~v uses First National Bail of Northern California, which Ilas online balll~in~ capability). Zl~e Clzandle,=° Repori I'~etii~e~- tivebsite offers daily updates of transaction s and holdings. The holdings report is current as of the close of business for the prior day. The transaction report provides infonr!ation from the start of the current month. Accessing your portfolio data requires a passe=cord that Chandler provides to you. Any trades that Char~d~_er e,~ectltes for you are included in the fee structure ~~-e have proposed: additional fees for ~~~ire transfers would depend upon your custodian's fee stI'uctL?I'°. Chandler will work with you to deterrnline your upcoming cash flow needs and assure that you have appropriate liquiditti' available in your account. Since ~~~e do not actually llol_d funds in-house, your abditti' to move fiords electronically on a same day basis ~~'i1.1 depend upon ~%our custodian. Generally speal:lli?, Ir10st Ctlstodian~ are able t0 traIlsfer fuIlds On a Same day basi=. as long as Illey 11aVe proper instructions. -3?- Y. > ~. ~ ~~....e~.o tc.._..__.._ys 11,''x,=,i~~,C==i' ;~``Ji i i . if possible. provide a ~-~~ eb link to an example of youur online screens, or; alternaivel ~~, state whether i VOU COUId s110iy Us Sall7ple SC1'een3 Oll a SvObe:i denl0nsti'atI0I1 aS paI-t Of OLIl' II1teI v ies~' ~,7r OCeSS. Please see bppe~c?i4~ .~ for a sample of our online screens. ~`'e will provide a demonstration of our eniine capabiiiti~es as part of cur intervietiv process. ~a ~e~s~n~~~ 1. Identify the key personnel who would be directly involved in providing services under the engagement, and provide their resumesibackgrounds. Describe the role they would play ill this engagelllent, their related e ~perience in the investment business, specifically .t-tirith California public sector cash management and investments, their professional certification, and their years of service to the _firm. Clearly identify the day to day contact person for the Cin~. Our team of highly qualified investment professionals has extensive experience designing and implementing investment programs that meet the investment objectives of our clients. The principals, Kav Char_d1er, President anci IvZartill Cassell, CEO and Chief Investment Officer; set the standard. Both began their careers as investment officers for large public agencies in California. lbs. Chandler served as investment officer for San Diego County, and later for the City of San Diego for a total of over ten years, iv1r. Cassell also served as an investment officer for the Cin~ of San Diego. I1~'s. Chandler has n1al7aged public sector portfolios for over 30 years, while R~Ir. Casseii's experience `vith public portfolios spans over ? 1 years. The experie~l7ce the firms principals ;aired as investment officers within Iarge~ public a~eneies COntrlbtltes S1giilflCa'_7t1~' t0 tlielr 11nlCltle C1LC211f1Catlons and perspeC`llyes In leadlllg a f1rIl1 that mal2a~eS public funds. Ms. Chandler and Tvu°. Cassell have carefully assembled a team of professionals that have the specialized e~pel~ise and diverse skills necessary to implement hig-hh~ effective ilwestme~nt management programs for local agencies. Each of our portfolio lnana~ers has earned the designation Of Chattered FlllanCral t~ialVst, a rrgCl'Ol~s CerlifrCatron program that IS a giobail.v r'eCOgI11ZCd stalldal'd for measuring t17e competence and integrit~~ of investment professionals. Below is an introduction to t':le team of professionals that ~=gill be directly invol~%ed wit17 the Cit<r of South San Francisco's ac.cotmt. For more detailed resumes please see the ream Biogi"aphies iil ~p~endx~n ~. ~,' may Chandler. CFti President ~"ears :with fn'm: ~'0 Yea?-s of ;,~periPnce:. { a, 1 j[ Y E1. ~.. ac d < <,yE 7F9~1t1 ~ fPi~~~~ ~ m I11~'estnlent OIIlCer foI' the COUntt' Of~ San Diego: 197 - Igo ~ ~ Investment Officer for the Cit`~~ of San Diego: i9~~ - 1g~~, ~~~'lana~i?7c Director at P a.cirlc Century- advisers: 19~~ - ig8~~ ~ rna~7a~~ed over S ~ billion iI7 fi~:ed- ~ 1ncol17e assets for instir~rtlonal inti-.4sl-ol-; ~~`'a'~ ar, t`k~A~;a; ~i '.E~ t~ ~- prj.~. _~~15. E~~~~ ~Yi 'h ~~ Cam. . GIs. Chandler will oversee all services tl'iat are provided io the Ciro of Soutil San f rancisco. -3~- a r•. n • i ~ CAL=~R',Tliv'.~ BUR "'J. H `~'~.=;1 ~~~Tartin CasseiL CFA Cv v and Chief In~,~estment Officer Years with firm: 17 r 1 Years o~ experience: Portfolio `Manager at ~~vorld Say.-ings and Loan: 197 - 1985 ® Investment Officer for the City of San Dieffo managing a ~l billion fired-income portfolio: 19$~ - 1991 !, '~ icole Dragoo ~ Chief Operating Officer Chief Compliance Officer Years with firm: 7 Years of experience: 8 Jayson Schmitt, CFA Vice President, Portfolio tilanager Fears with firm: 13 Fears of experience: 13 I1~Iarco Nicoll. CFA %ice President. Poi polio Nia~zager Years ~~°ith firm: '1 rears of experience: 9 Ted Piorl:owski. CFr~. Senior Vice President. Portfolio i~~ianager _ , ,- iears tivit>? znzn: 9 Years of experience: 20 ®8 years trading and operations experience with a focus on operations and compliance. ® Fiizancial Analyst with the USA Federal Credit Union in San Diego managing a 51 ~JO million liquidity portfolio Fixed income Trader and Set<lernent Administrator at Gannett ~Td elsl~ & Kotler: 1999 - 2G~rJ4 hTr. Cassell joined the trrln m i Uy 1 and will lead the divestment management team that develops and revietivs i.,vestn~ent strategies for the Cit;, of South San r rancisco. NIs. ~ragoo joined Chandler in 00 i . She oversees regulatory compliance and investment operations;. and will maintailn all records on the accounts. Nu•. Schmitt joined the firm in 199 and «'ill be the lead portfolio manager for the City of South San Francisco. His specialtti7 is corporate credit analysis. He is a member of ot~r credit revie«~ group. ~r. Nicoll joined the fn~•m in 2004 and will be the back-up portfolio manager for the Cin~ of South San Francisco. His focus is on securities trading. fn7ancial modeling and credit analysis. He is a member of our credit revie~~• Portfolio ~~Ianager at San Diego ,_ „o Trt_st and Savings ~an~s: 1~~8 - 199=1 ~%ice President and Fund h~anager for Sefton Capital Ivlanagement: 199 - 1999; managed over S}00 million in both mutual field vehicles and individually managed institutional portfolios ~ria11 pen~~ ~i Nice President. re` IIi~ °5tiileilt .~tl'a: vlst 1~ears wiih firm: ~ fears of experience: 1 ® Fixed income trader spe-ciali~illg in government agency and corporate bands. 1VIr. Piorko«~sl.i joined the fi?'m in 1999. I-Te oversees file portfolio mana`ement group, is responsible for irnplementin~ portfolio strategy r ~' ana rs a mem?oei or our credit review group. 1Vlr. Perry joined the nrm m 'UU~. He conducts research on economic, financial and portfolio strategy tOpiCS. -34- 1~ ;~i.. _I v~F_I ~'. Clearly describe the extent to ~vllicil your firm would have backup if one of the l:ey persor~Ilel is for solve reasor_ unavailable on a given day. PoI-tfolics are managed in a team environsllent. ~'ou will also be assigned a senior member of the team, ±avson Schmitt. as your lead portfolio manager and primal-y contact and Marco ?~Ticoli as his back up. This ~~vav, not only «°ill your portfolio benefit from the collective expel-tise of the team but also your staff will develop a close `working relationship with your Iead poI- folio ~~~anager. An additional benefit for ~=ou with the team approach, all the members of the team know and understand your investment objectives anal portfolio structure. If you call and I~fr. ScIIlr~irt is out of the office, 1~1r. icoli or another member of the te«m will be able to assist you. ~. ~~west~ent ~°ra~na~orr~~~~ <~ ~p~ ~a~~~ ~.nd ~sel~~~~e 1. Describe the finll's overall investment philosophy for cities of appl-oxhnately_ South San Francisco's size, and your approach to this engagement. Oztr philosopl~ti~: ti~%e believe that portfolio management is risk. li?anagement. Over the long run effective risk manager~lent enhances the potential for higher total re~lrns while rl~aintainisng a client's risk profile. Our philosophy stresses safes = of principal, appropriate levels of liquidity, and lo~v volatili?~r of return relative to benchmarks. Chandler's investment management process consists Of three main components for implementing strategies for our clients: polyfolio construction, security selection. and portfolio rebaiancizlg. ~a~ ~~'o~io Canstr~ctEon Our proprietal-~~ Pol°tTOlio C)ptir7zi.:.uiio3z ~l7od el is the quantitative foundation. for our poI ifolio collstrtlctioll process. The 11~Iodel enables our portfolio manageme~Ilt team to integrate its research into the portfolio managell~ellt process in a structured, disciplined and repeatable ~wav. The ~'~Iodel incorporates our clients" objectives and risk constraints, as swell as various interest rate scenarios and changing market conditions. It then analyzes tl~iis information over a wide range of potential Ir~arket scenarios and Generates the optimal portfolio structure for our client. This optimal portfolio is the one that eve expect will generate above benchnlar'ti returlis hl each of the forecast scenarios. That is, the ~~lodel generates a poI folio that ewe believe `will outperfonn the benchmark over a ~~~ide range of possible futtlre interest rate movements, regardless of the direction of those interest rate movements. .~Tter the ~~~Gdel gelierateS the Optimal pGrtfohO. Our pCI't~OiIO managelIlent team anal_vzeS d1e re.SUltS. irl a tea2li-baS.°d env1I'oILI:vIlt. file pOI`Co110 mana~eTS d1SGti5s the 1V1ode1's OUt~tlt a?alnst t~Ielr 0wi1 understanding of mar',et bel:avlor. Eased upon their accumulated e~,pertlse, the tealll mazes an~f necessary changes and then begins the construction of tiro optimal porgy olio. This combination of a rigorous aualititative s~~uctLlre and e~~perienced qualitative o~-ersight is a hallmark of ail Chandler`s uortfoiio Ir~anagement activities. -35- ~' } _ ~~eea~ri~' ~eleetlon The second step ill the Chandler portfolio management program is the selection of indi~,~idual securities. After the t~ortfolio struc~.u"e has been defilied using the 11Io gel. the team selects securities that meet the requirements of the ~'Iodei by means of a thorough e~,~aluation and search process. Team members analyze market conditions and review clearer inventories in order to find securities that are best suited to meet the llocel 's recommended portfolio structure. They then anal}'ze securities that aI"e belllg COnsldered for SeleCtI0I1 tlSing Otlr CTeC1It reVleVd process and Bloomberg analytical tools. These tools assist us in evaiuatiil4 the relative value and safety of a security. We analyze potential securities not only on an individual bads. but also on their contribution to the overall structure and performance of the portfolio. All trades are executed on a competitive basis with broker dealers on our approved list and are settled on adelivery-vs.-payment basis. Bo~•tfolio ~~eb~larlcing Since our philosophy is to manage a client's portfolio to risk profile targets, our ongoing portfolio management includes periodic portfelio rebalancing in order to maintain the proper risk profile. Rebalancing can be achieved through the reinvestment of the proceeds from a bond maturity or sale of an existilln securit<,r. ~Ve recommend that securities i~l the portfolio be sold ~vhene~'er an existing investment can be replaced tivith one that better meets the portfolio's objectives, illcl_uding enhancing expected retl.Irn, reducing risk, and meeting cash flow needs. The sale of securities always takes place within the framework of a client`s loss constraints. ~-Je typically re-run the Poi°tfolio Opiit~zizazion 11lodel for each portfolio at least once a month, to determine if cllar~~es in market conditions warrant portfolio rebalancing. ~oa~th fan ~r~nczsco'.s ~o~•tfolio We have conducted a review of the C.itv's portfolio (as of 6~'~G) alld have generated several recommendations that use ~T~o~uld discuss z~~ith you. At the inception of all our relationships, we work with our client to select are appropriate fixed income market bellcilnlarl<. This benchmark accurate)}' represents the risk profile of the client. ~mCe duration Is the slllgle nlOst important sOtlrCe Of rlSl: alld retani in a portfolio. it is important to select an appropriate duration target for the poI i`~olio. Over time, longer durati:_~n poi folios outperfol~ll shorter duration portfolios, ;while also demonstrating greater volatility. Currently, duration of the Cit<''s portfolio is 0.~7 years, or appro~.imately 7 months. ~~'hile this means treat the poI Lfolia will demonstrate relatively lo~v levels of interest rate volatility, returns are also lilLely to be lower than those of longer duration portfolios. A portfolio with vet}- low duration also provides little protection i f interest rates decline in the fixture and nlatarities reed to be reinvested at lower yields. Therefore, v~'e would discuss v~-ith you the possibili~- of exteliding the portfolio's duration vl order to provide hi~her retul~ls over time; while still providing for appropriate levels of safety alld liquidity. y,~'., nave also noted that the Cit}~`s agency bond hcidill~T~ are h°a;.-ilv concentrated in Federal Home L,Oai1 Ballk isSUeS. ~~'e tyGtlid propOSe that yotl aC1lieVe amore even baiailCe anlorlg file Var10l1s federal agencies in order to increase the poI-tfolio`s di;~°ersif cation. -36- ~" t Ea'ak `n~P ~~ C=LEBR,-;TiNG OL'~ 201 N ~~'=., .' 2. describe the options available for discretionary vs. non-discretiollarv investment decisions by your firm, if applicable, and ./our recolnll~endation, if arty, Depending 011 your requireme;lts, we can have as much pre- and post-trade contact with your staff as l,~ou would like. We can review all trades ~~•ith a desi~-nated staff member prior to execution for your approval (non-discr::tionaiy management) or «~e can execute trades consistent with your objectives. constraints and investment stti 1e without prior approval (discretion.aly management). In either case. eve tivould provide you «-ith ail of the supporting documentation for the trade, a monthly accountira of all the securities in your portfolio and performance reports versus your benchmark. At all times you are ill control of y otlr LZVestment pragl'am. s an SEC-registered investment adviser, Chandler Asset Management has a fiduciary responsibility to votl that is equal to your own. For that reason, our preference is to establish a discretionary agreement with the City whereby we would execute investment transactions `'tiitl'iill your investment policy and in accordance with directives from you, but ~Vitl'iout discussing each transaction Ill advance of execution. The primary benefits to a discretiollaly relationship are that our portfolio managers can respond to changing market conditions ~~ ithotrt delay and the City can hold us completeiy accountable for the performance of your polfolio. Ill addition, our ability to group the city's transactions with identical transactions we execute for other clients can result in significant cost savings. Regardless of whether the poi-~1o1io is managed on a discretionary or non-discretionary basis, all transactions would comply with the City's investment policy, objectives and constraints. I i. L7eSCl'lbe file flrlli'S da11v rirOCedtir'e tOr p01"tfOhO rejJie~T~-', 111veStinerlt Inanager~lellt al1CI C'lleilt COntaCt. Lill a da11y basis, otrr poIfolio managers monitor duration; term structure and sector allocation relative to the risk profile of the client's market benchmarks. Portfolio rebalancing occurs as needed with the objectives of redacting rill: andlor i-nproving portfolio return. ~-ve monitor portfolios daily fog' ComipllanCe ~h'ltll lIl~%es`lmellt pOllCleS. file porttOlrO nlana~eli1e11t team CJntlrlaally n10n1torS site market and discusses the relevance of current market conditions to the tactical ilr~plenlentation of our cverail strategies. Ill a d1SCret10na1~' relat10r1Silip. portf0110 nlallagerS proceed t0 eXeCate tI'allsactlolls heeded t0 Te111Ve5`l maturities or to rebalance the portfolio. For non-discretionary accounts, then first explain the rationale for the trade to an authorized client representative and Q;t approval from them prior to executing the trade. Contact with our clients is proactive. regular and as extensive as each client requests. Portfolio managers make frequent cans to update. clients on market conditions and portfolio adjust-inents. They also inquire about any changes i11 cash flows that might affect the port olio structure. fur client _ ,. ,. Seri 1CeS Staff woi'kS CIOSely v~ ltll Otii' ClleiltS-reyle~ViIlg inVeStlnent policle~. aSSiSt1IlG '~1-it11 CtIStoCllal relatl0nshlps. gild provldllla II1VeStnlent trallirlig among many ot11eT t111n~?S. Stafh 111eIIiberS are available dai1~- from 6: 0 A_Tv1 to :00 Pi~~I Pacific Tilr~e to answer cuestions that site Citz- 111a~' have or asst staff with problems that may arise. -37- .._. ~ - -~ s e p m ~4{l CC! Jt`.:'°'".T~~.~'~ twin _~iJTi 1 ~~E;^:n -'.. D1S~L?sS your a55eSSmeilt of file CL?ITeilt nlal`1„t OutlOOk and liO~v ~'OL1I' I1rI21 p12r~s IO pl`OVlde suTilZriOr ~~erforlnance for clients in the ~ ears ahead. The past several months have witnessed an unprecedented level of mari~:et volatility'. Chandler Asset ~~anaffement fillly realizes the historical nature of current market conditions and has brotl~ht the full measure of its employ°ees' combined e~~perience, wisdom, and resources to bear in order to navigate tlu-ouvTh these choppy markets, Throughout this period, Chandler has continued to stress safety= of principal, diversification, and appropriate levels of liquidity- in the portfolios that we manage. United States Treasury securities have alway_ s made up a core component of our portfolios and these securities have performed extremely vveIl recently. Government agency securities also form a core holding in Chandler's portfolios and Have also performed reasonably well.. particularly since the t.JS Treastlly took steps to stabilize the agencies alld prop-icie support for their dept repayment. ~~je observe that the city currently has no corporate securities in the portfolio, although tliev are permitted under California law=. This limitation served the city well recently. While treasury and age,ncv securities have performed well, corporate securities have come under increased stress over the course of the. past several months, placing an emphasis oll credit research and the use of qualitative judgment in making investment decisions. Last j=ear, Chandler made a decisioli to reduce our exposure to the corporate bonds of financial companies and also to increase our diversification within the corporate bond sector (by lowering the percentage of the pol-tfolio that we w=ould hold in any single corporate name.) Loth of these rrioves have helped our clients during this most recent period. Chandler is carefzlllv monitoring current market developments and adapting our approach as needed. :!fit the same time. our e.~perienee tells us that. as with all market cycles, the current environment too shall pass. Therefore, w e continue to employ the time-tested approach that has benefited otlr clients for the past 20 years. This approach can be summarized as follows: fur primary strategy for adding value to portfolios is applying a disciplined, repeatable process to rilar~a`~111g the risk lil ol}r Clleilts' pOrtrohOS. ~~1~e actively seek t0 nlallitalil dtlra`Lio21 at tllc level that 1s defined in the client's risk profile. Our >ln=estme~nt strategy deenlphasizes the prediction of interest rate movements. ~i%e mah~taill portfolio duration within a narrow band (generally =?0%j of the client`s target duration. Cur process for nianagillg risk consists of: 1. Understanding each client`s illvestmerlt objecti~=es and constraints; ~'. 1~'laintailling the proper duration in the portfolio in relation to the duration of the selected benchmark: ~. i,TallltalnlnZ the Optllnal dtlratlon d15tr1butI0I1. OI" placelnert Of SeCUrltle5 aioilg the vlelC'i CUI'Ve; ?. Actively managing securir;~ selection and sector allocation based on allal_vsis of market and credit condition and ire compliance with client investment guidelLnes: ~. A nalyzing I'eiatlt'e yaltle of SeCLlr1`L1eS alld Conti11LI0USIV reVlew=1r~6 dealeI' 111veriorles t0 irentiI~,' securities that offer ti.e best value for implementing our sirate~ies; ancl. 6. ~lalntalning all Ollgol?lc d1al0Utle w~lth eaCrl Client t~11"otlgh perIOdic 111Vestlneilt meet_ngs. alld telephone contact with District staff. ~erhaj~s most linp0 ~antl~~. Chandler reallZes that lIl the ctiiient market enVlrOlli;i°nt It IS In7'JOI`Call`l tC sta-~~ in contact with oar ciiellts. Throu~~hout this period; we have been proactive hl contactili~ of?r -38- 3 N..~~~ /~i 1~4RR~i-.L ~~i ~~ ~4 !`IV~LT F ' `. C~__~~,=;~lN ~ C~~~~~ ?0TH '{~:~R clients via e-mail on the tel°phone; and in person. This proactive client sel-yice is a hallmark of Chandler's approach and combines with our rigorous risk management and disciplined approach to managing portfolios to form the basis of Chandler's competitive aci?-'antaQe. Tliis competitive advantage benefits our clients during ail market cycles, and is perhaps most advantageous during periods of historic volatiiit~~. Attached, as E:ghii,it <~, is an example of a recent cor~lmunication with our clients; designed to inform them of the rapidly changing marl:ei enviror~lnent. ~'. ~0e~ort~;~~ ~a~~.kiilit~e~ 1. Submit samples of reports which would be provided and describe trleir frequency. Reports must be prepared in accordance with Generally Accepted Accounting Principles (GAAP) alld in compliance with Govermnent accounting Standards Board (GASH) pronouncements, including GASH 31 and X10. Reports should also discuss the current market condition and trends, as well as recommended strategies on a go forcyard basis. )~~eporti;~~ and comm~a~icati©~a ~ti~e provide portfolio accounting and reporting that meets all the requirements of your Statement of Qualifications, and complies with all State reporting requirements and GASB standards, including GASB Statements ~ 1 and ~0. These are provided to all of our clients on a monthly' basis as pal ~ of our regular services. ~= ach client receives a monthly report that includes gone-pane management summar}% of pcl-tfolio characteristics that provides an exceilellt overview of the portfolio. The lllanagelilent summary includes ana1~- sis of the pol ~f~lio by liquidity distribution, sector distribution and quality distri'outien. The report also includes detailed accounting information: a complete description of each asset; includil-lg nlanu•it-j-, Mood;-'s and S~:P rating; percent of portfolio; cost. bool: and market i~'alues; a transaction ledger; all eal pled interest report; a cash flow report a11d performance illfornlation cor~lpared to the client's selected benchmarks. Colr~parative quotations are available for each transaction.. and can be included iil the monthly 1'epol~t. Performance reporting is calculated and reported in accordance ~vitll GIPS`' (Global Investment Performance Standards). Ire addition, our monthly reports include a polic~r compliance report. fur rObLlst acCOL111t1I1g aIld repol`tlilg sySteln is fully Ctlstollll~able; x110«'ing LIS t0 fLllflll any SL7eC1f1C reporting requirelr~ents you may hare. All r_poI-ts are a~railable on the second business day foilowirig month-end. and are delivered iti'ia e-mail. r7E~~s :Y=~Or l~~t E'~F'S%P v. E"...t Our monthly newsletter provides an update on current market conditions. ~^, sample is atiaclled as App°;~d~ ~ C. QP. °x <<:~t~'_'~~1 ~)~i S'eCt](nP~t ~'~ep~3r1~s ~~~e also provide quarterly repots to clients designed in a fo~rlat that facilitates discussion L-enveen ihC pOI'tfo110 managel' alld the C11Cnt. The repGrts pl'esellt pvrLio110 Cllal'acteriStlCS, retlliii, COlnpliailCe -39- ` ''~' r ccr_7 analysis and a liquidir~ profile, using graphs; charts and illustrations in a format that is usefill for Inanagemelit, elected officials. and interested members oi' the public. Like all of our reports.. the periodic performance report can. be customized to meet specific client needs. j,~%e propose to present this report to you ill person at our quarterly meetings with vou. The quarterly repol-t and discussion will include ar~y changes we recommend to portfolio strategy and characteristics. Please see t~p~lends~ I~ for a sample monthly report and ~ ppend~ lE for a sample quarterly report. ?. Describe the frequency and format of the performance reports that would be provided. Please see above response. C~. Describe the types ofbenchmarks, which would be included with the performance repol~s. ~ Tile selection of a market benc111-nark, an unmanaged index of the securities that al-e permitted far purchase in the client's portfolio, is critical to our investment process. A benchmark rode ;provides a readily available source of information on how various segments of the market perform. It provides a means of assessing acceptable risk in the portfolio, and an objective, consistel~t resource of comparing portfolio return to market return in order to assess the effectiveness of the investment program. Olie Of Otlr PTSt Steps 111 ujOl'kLlg with a Client is t0 assist the Client Lr~ dete111iinln? the appl'Oprlate }?e11C1?mari., from file 1'eadl?~, a',`allablE liideries that Inat:.ii file risk gild rCl~tl`II prOflle tl'iat file client 1S w11i1ng tG aCCept. `~Je t1iel1~5tr11CtLire a11d ma111talIi tl'ie portfolio Over time t0 11'iatCil file CharaCterlstlCS of the betchmark. The benchmark also provides all excellent frame of r,;ference to determine ~z-hether the portfolio is efflci°nth~ mar~aved to meet its objectives and return expectations. Cnlr monthly and quarterly statements include a comparison of our client s portfolio and benchmark returns over a variet~~ of time horizons. This allows for easy comparison of the relative performance Of `llle p01`CfoilO aS well as evaltlatioil Of hOV~- closely fife .pOrtfG110 is adhel'Ing t0 Its Seleced 1'lsli prOllle. '. Confn•m the firni would be willing to provide reporting for all of the Cin_T's holdings; including the L~~'_IF. bank. and Count.- Fool lloldill~s the Cite v~-Quid retain. Chandler Asset Manage1ne11t is pleased to provide reporting for all of the Cit~,~`s holdings, including LAID bank and CeunrF~ Pool ~=oldillas the Cis «tould retain. Our robust accounting and repol~illg s~~stem is fully customizable; alln;vul~? us to fulfill any specific rei~cl-ting requirements vou nlav leave. -40- S 1 ~. ~f iY~~SiV~ ~~`i 1 ~ -~1 n SC,~7 '• . t t J,, }'.' ; ~.y~._.. `~~...~~ r~~~~va~_?v~F~a~ CcL~B~::;-IN(; OUP "?DT'-~ `;'~,~;R ~.. ~' des L. Provide the fee schedule that v~~ould apply to this account. Note treat the Cit<~ will not enter into an agreement in which the firm is paid based on a commission based on the number of transactions. Ct:andler Asset Management wi11 be pleased to provide all of the services described hl this proposal to the Cin~ of South San Francisco in accordance with the following fee schedule: C'handier Asset IVlanagetrent proposed ~~ ee ~chednle for the City of South fan r i•ancisco _ , ~ ~. - k `'a`ae^ y,~,Y i~'``L~! ., ~ ~~~~~ wt ` ~ ~' v 11~ 7_ mom- ~'srz ~ . ~ ""~~ ~ ~~.! r ~ ~.. t~~.~ '-~ First $50 million 0.09 of 1 % (9 basis points) ` Ne ~t $~0 1?iillion 0.08 of 1°'0 (8 basis points) i Assets in excess of 5100 million I 0.05 of 1°.'0 (6.~ basis points) Fees are based on the average balance of assets under Chandler's management, and are billed monthly in arrears. ?. identif~~ any expenses that ~~°ould not be covered trirough this fee structure aril would be required in order to implement the fir~T~'s program. Tire fee schedule does not include charges that the City of South San Francisco will incur for third pa.-ty custodial ser'~~ices at a bani~ trust department. ~. Is there. a minimum am~ual fee? There is no minimum annual fee. _:~1_ DATE: December 17, 2008 TO: Honorable Mayor and City Council FROM: Terry White, Director of Public Works SUBJECT: RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AGREEMENTS WITH CALTRANS AND JPB FOR CONSTRUCTION AND MAINTENANCE OF THE NEW CALTRAIN STATION RECOMMENDATION It is recommended that the City Council adopt a resolution authorizing the City Manager to execute agreements with Caltrans and the Peninsula Corridor Joint Powers Board (JPB) for the construction and maintenance of the new Caltrain Station. BACKGROUND/DISCUSSION The Peninsula Corridor Joint Powers Board (JPB), California Department of Transportation (Caltrans), and the City of South San Francisco (SSF) are cooperating for construction and maintenance of a new Caltrain Station in South San Francisco. The new station will include an entry plaza at the intersection of Airport Boulevard and Grand Avenue. A pedestrian underpass will connect the entry plaza with the center platform and the Executive Drive shuttle area. The 296 Airport Boulevard location, a former Caltrans maintenance facility, is currently excess State land, which the City is in the process of purchasing for the entry plaza to the station. In addition, the City is negotiating with Caltrans for airspace lease of the property under Highway 101 to accommodate the "underpass" construction to connect the entry plaza with the center boarding platform and the Executive Drive shuttle area. In order to proceed with the project construction, staff from all three agencies, has prepared the following agreements to outline the responsibilities of all parties for the construction and maintenance of the new station. The content of these agreements were previously discussed with the Council subcommittee (Garbarino/Mullin) and at a Council Study Session on October 15, 2008. 1. CooRerative Agreement -SSF/JPB/Caltrans 2. Construction and Maintenance Agreement -SSF/JPB 3. Right of Entry Agreement -SSF/JPB 4. Maintenance Agreement -SSF/Caltrans Staff Report Subject: RESOLUTION AUTHORIZING CITY MANAGER TO EXECUTE AGREEMENTS WITH CALTRANS AND JPB FOR THE NEW CALTRAIN STATION Page 2 of 2 The Cooperative Agreement (SSF/JPB/Caltrans) requires the City to purchase Caltrans property and the airspace lease needed for the project and enter into a maintenance agreement with Caltrans. The agreement requires the JPB to fund and construct the project in accordance with the plans and specifications approved by Caltrans. The Construction and Maintenance Agreement (SSF/JPB) establishes the responsibilities of both the JPB and SSF with respect to right of way acquisition, construction cost, and future maintenance of the station. In summary, the City will be responsible to acquire properties described as Caltrans fee parcel, Caltrans airspace lease, Comfort Suites, Executive Drive, and Corporate Drive. The City's responsibilities also include hazardous material cleanup cost for these properties, demolition of the Caltrans maintenance building, and the cost of all upgrades to the station facilities within the City's acquired areas. The City will also be responsible for future maintenance within the City owned areas including the entry plaza, the shuttle drop-off area, as well as the underpass. This responsibility encompasses routine maintenance, landscaping, graffiti removal, etc. The JPB will reimburse the City for 50% of the cost of demolition, up to the maximum amount of $50,000. The City is negotiating with Caltrans regarding allocation of responsibility for the cost of hazardous materials remediation for the properties the City will purchase and lease from Caltrans. The Right of Entry Agreement (SSF/JPB) grants right of entry to the JPB to construct the facilities within City's purchased/leased properties. The Maintenance Agreement (SSF/Caltrans) states that the City shall maintain this project within and outside the Caltrans right of way including debris and graffiti removal. The remaining agreements that will be brought for Council's approval in early 2009 will be for property acquisitions and right of entry with Caltrans as well as private property owners. FUNDING This project is included in the City of South San Francisco's 2008-2009 Capital Improvement Program (CIP) for right of way acquisition and the City's share of construction upgrades. The future cost of maintenance for the station would need to be incorporated in the City's operating budget for the years following completion of the project. The current forecast for completion of the project is 2012. CONCLUSION Approval of these agreements would set the responsibilities of the three cooperating agencies and enable the South San Francisco Ealtrain Station project to proceed on schedule. - ~'~--- '~- ~ ~/ A rove `" ~ ~-- J By. PP Terry Whi ~ .Nagel Director of Public Works City Manager Attachments: Agreements (4) Resolution RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AGREEMENTS WITH CALTRANS AND CALTRAIN FOR THE CONSTRUCTION AND MAINTENANCE OF THE NEW CALTRAIN STATION WHEREAS, the City and Caltrain have been collaborating on a joint project to construct a new Caltrain Station and improvements including a pedestrian tunnel connecting the east and west side of the Caltrain Station from Airport Boulevard to East Grand Avenue at Route 101 in the City (the "Project"); and WHEREAS, a proposed Cooperative Agreement between the City, Caltrans, and Caltrain (the "Cooperative Agreement") delegates responsibility for design, bidding, and construction of the Project to Caltrain, and delegates to the City the obligation to acquire certain property rights for the Project; and WHEREAS, the Cooperative Agreement also provides that the City and Caltrans will enter into a maintenance agreement regarding maintenance of the Project, and City staff and Caltrans have negotiated the terms of a proposed maintenance agreement (the "City/Caltrans Maintenance Agreement"); and WHEREAS, Caltrain and the City have negotiated the terms of a proposed Construction and Maintenance Agreement that allocates responsibility for construction of the Project and maintenance of the improvements (the "Construction and Maintenance Agreement"); and WHEREAS, a proposed Right of Entry Agreement from the City to Caltrain (the "City/Caltrain Right of Entry Agreement") will allow Caltrain to enter upon the property owned and/or leased by the City in order to allow Caltrain to undertake work on the Project; and WHEREAS, staff recommends that the City Council approve the execution of the Cooperative Agreement, the City/Caltrans Maintenance Agreement, the Construction and Maintenance Agreement, and the City/Caltrain Right of Entry Agreement so that work on the Project may commence in a timely manner. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Manager is hereby authorized to execute the Cooperative Agreement, the City/Caltrans Maintenance Agreement, the Construction and Maintenance Agreement, and the City/Caltrain Right of Entry Agreement substantially in the forms presented to the City Council, with such modifications consistent with the intent of this Resolution as the City Manager may approve in consultation with the City Attorney. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to undertake such actions and execute such documents consistent with the intent of this Resolution as necessary or desirable to carry out the intent of this Resolution. -1- I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the day of , 2008 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk 1176666-1 -2- DRAFT 2 / 05 / 08 04-SM-101 PM 22.0 ES South SF Caltrain Station EA: 4A380 District Agreement No. 4-2170 COOPERATIVE AGREEMENT This AGREEMENT, entered into effective on 2008, is between the STATE OF CALIFORNIA, acting by and through its Department of Transportation, referred to herein as "STATE," and the Peninsula Corridor Joint Powers Board, California Joint Powers Authority, Caltrain, referred to herein as "PCJPB" and the City of South San Francisco, a body politic and municipal corporation of the State of California, referred to as "CITY." RECITALS 1. STATE, PCJPB and CITY, pursuanoooerativesA reemlent for Cmprovements It 4 the St toe are authorized to enter into a C p g Highway System (SHS). .. .; I4W..v `~ 3 2. PCJPB desires to perform Project App`roval~ and: Environmental: Documentu~(P~$s'~D~. and design, prepare the contract documents, and advertise, award, and administer the construction contract for the portion of the Calt ain station from Airport Bou evar' d t E ast way that connects east and west side of the Grand Avenue at Route 101 in the City of South San Francisco, referred to herein as "PROJECT." 3. PCJPB .is willing to fund one iTYarand STATE'slIndep ndent Quality Assuran e (IQA) of costs, except that the costs of t,_ PROJECT development. 4. STATE funds will not be used to financ? any of the PROJECT capital and support costs except as set forth in Recital 3 above. 5. The terms of this Agreement shall supersede any inconsistent terms of any prior Memorandum of Understanding (MOU) or agreement relating to PROJECT. 6. This Agreement will define the roles and responsibilities of the CEQA Lead Agency and CEQA Responsible Agency regarding the environmental documentation, studies, and reports necessary for compliance with CEQA. 7. The parties now define herein below the terms and conditions under which PROJECT is to be developed, designed, constructed and financed. i -3- Draft District Agreement No. 4-2170 SECTION I PCJPB AGREES: To fund one hundred percent (100%) of all PROJECT development costs required for satisfactory completion of PROJECT, including, but not limited to, "State-furnished material" and source inspection costs, except for costs of CITY's and STATE's IQA, and STATE's review and concurrence of the PROJECT environmental documentation for CEQA. 2. To not use STATE funds for any PROJECT capital and support costs 3. All PROJECT work performed by PCJPB, or performed on PCJPB's behalf, shall be performed in accordance with all State and Federal laws, regulations, policies, procedures, and standards that STATE would normally follow. All such PROJECT work shall be submitted to STATE for STATE's review, comment, and concurrence at appropriate stages of development. 4. All PROJECT work, except as set forth in this Agreement, is to be performed by PCJPB. Should PCJPB request that STATE perform any portion of PROJECT work, except as otherwise set forth in this Agreement, PCJPB shall first agree to reimburse STATE for such work pursuant to an amendment to this Agreement or a separate executed agreement. 5. To have a Project Report (PR) and detailed Plans, Specifications, and Estimates (PS8vE) prepared, at no cost to STATE, and to submit each to STATE for STATE's review and concurrence at appropriate stages of development. The PR and the final PS8vE for PROJECT shall be signed on behalf of PCJPB by a Civil Engineer registered in the State of California. PCJPB agrees to provide landscape plans prepared and signed by a licensed California Landscape Architect. 6. To have all necessary right of way maps and documents used to acquire right of way by PCJPB prepared by or under the direction of a person authorized to practice land surveying in the State of California. Each right of way map and document shall bear the appropriate professional seal, certificate number, expiration date of registration certification and signature of the licensed person in Responsible Charge of Work. 7. To permit STATE to monitor, participate, and oversee the selection of personnel who will prepare the PR, conduct environmental studies and prepare environmental documentation, prepare the PS8vE, provide right of way engineering and acquisition services, and provide construction engineering services. PCJPB agrees to consider any request by STATE to avoid a contract award or to discontinue the services of any personnel considered by STATE to be unqualified on the basis of credentials, professional expertise, failure to perform, and/or other pertinent criteria. 8. To submit to STATE for review and concurrence all Right of Way Engineering Land-Net Maps and Right of Way Appraisal Maps, Records of Survey, and Right of Way Record Maps in accordance with STATE's Right of Way Manual, Chapter 6, Right of Way Engineering, STATE's Plans Preparation Manual, STATE's Surveys Manual, applicable State laws, and other pertinent reference materials and examples as provided by STATE. 9. Personnel, who prepare the PS8sE and environmental documentation, including the investigative studies and technical environmental reports, shall be made available to STATE, at no cost to STATE, through completion of PROJECT construction to discuss problems which may arise during PS8vE, right of way acquisition, construction, and/or to make design revisions for contract change orders. Personnel who prepare the PS8~E shall -4- Draft District Agreement No. 4-2170 be prohibited from contracting with the PCJPB's future construction contractor for PROJECT. 10. Personnel who prepare right of way maps, documents, and related materials shall be made available to STATE, at no cost to STATE, during and after construction of PROJECT until completion and acceptance by STATE of Right of Way Record Maps, Records of Survey, and title to any property intended to be transferred to STATE. ll. To make written application to STATE for necessary encroachment permits authorizing entry of LOCAL AGENCIES onto the Saration of the PR,oenviro mental documentation, investigative activities required for prep and/or PS8sE. 12. To identify and locate all utility facilities within the area of PROJECT as part of the design responsibility for PROJECT. All utility faE for PROJECTcated or removed in advance of construction shall be identified on the PS8v 13. If any existing utility facilities conflict with the construction of PROJECT or violate STATE's encroachment policy, PCJPB shall make all necessary arrangements with the owners of such facilities for their timely accommodation, protection, relocation, or removal. The costs for the PROJECT's positive identification and location, protection, relocation, or removal of utility facilities whether inside or outside STATE's right of way shall be determined in accordance with Federal and California laws and regulations, and STATE's policies and procedures, standards, practices, and applicable agreements including, but not limited to, Freeway Master Contracts. 14. To furnish evidence to STATE, in a form acceptable to STATE, that arrangements have been made for the protection, relocation, or removal of all conflicting facilities within the SHS right of way and that such work ~ ~e PS&Elfors aid contracts Ths oeviden enshaall to construct PROJECT or as covered include a reference to all required SHS encroachment permits. 15. To acquire and furnish all right of way, if any, outside of the existing SHS right of way and to perform all right of way activities, including all eminent domain activities, if necessary, at no cost to STATE, and in accordan lee State and Federal laws and regu ataons, subJ'ect activities shall comply with all apphc to STATE's IQA to ensure that the completed work and title to property acquired for PROJECT is acceptable for incorporation into the SHS right of way. 16. To utilize the services of a qualified public agency or a qualified consultant, as determined by STATE's District Division Chief of Right of Way, in all matters related to the acquisition of right of way in accordance with STATE's procedures as published in STATE's current Right of Way Manual. Whenever personnel other than personnel of a qualified public agency, or a qual~ed consultant, are outWaed,erson employed or retained by PCJPB tract shall be performed by a qualified Right y p 17. To certify legal and physical control of right of way ready for construction and that all right of way parcels were acquired in accordance with applicable State and Federal laws and regulations, subject to review and concurrence by STATE prior to the advertisement for bids for the contract to construct PROJECT. 18. To deliver to STATE legal title to the right of way, if any, including access rights, free and clear of all encumbrances detrimental to STATE's present and future uses not later than the date of acceptance by STATE of maintenance and operation of the SHS facility. -5- Draft District Agreement No. 4-2170 Acceptance of said title by STATE is subject to a review of a Policy of Title Insurance in the name of the State of California to be provided and paid for by PCJPB. 19. To be responsible for, and to the STATE's satisfaction, the investigation of potential hazardous material sites within and outside of the existing SHS right of way that could impact PROJECT as part of performing any preliminary, design and construction engineering work. If PCJPB discovers hazardous material or contamination within the PROJECT area during said work, PCJPB shall immediately notify STATE. 20. All aerial photography and photogrammetric mapping shall conform to STATE's current standards. 21. A copy of all original survey documents resulting from surveys performed for PROJECT within existing or future STATE's right of way, including copy of original field notes, adjustment calculations, fmal results, and appropriate intermediate documents, shall be delivered to STATE and shall become property of STATE. For aerial mapping, all information and materials listed in the document "Materials Needed to Review Consultant Photogrammetric Mapping" shall be delivered to STATE and shall become property of STATE. 22. All original recorded land title documents created by PROJECT within existing or future STATE's right of way, if any, shall be delivered to STATE and become property of STATE. 23. To submit to STATE a list of STATE horizontal and vertical control monuments which will be used to control surveying activities for PROJECT. 24. To submit a written request for any State-furnished material" identified in the PROJECT plans, specifications, and estimates (PS8sE) a minimum of forty-five (45) days in advance of the need for such materials. To then pay STATE, within fifteen (15) days of receipt of STATE's billing, the actual cost invoiced for the requested "State-furnished material". ~~ PCJPB may take delivery of the State-furnished material" after STATE's receipt of PCJPB's payment and at the location directed by STATE. 25. STATE shall perform source inspection as outlined in STATE's Construction Manual, Construction Manual Supplement for Local Agency Resident Engineer, and Local Agency Structure Representative Guideline. PCJPB shall reimburse STATE for all direct and indirect costs incurred for any source inspection performed by STATE. 26. To deposit with STATE within twenty-five (25) days of receipt of STATE's billing thereof the amount of said bill, which amount represents the estimated cost of source inspection, as referred to in Article 14 of this Section I. 27. To pay STATE upon completion of all work on PROJECT and within twenty-five (25) days of receipt of a detailed statement made upon final accounting of costs therefore, any amount, over and above the aforesaid deposits for State-furnished materials and source inspection, required to complete PCJPB's financial obligations assumed pursuant to this Agreement 28. To advertise, award, and administer the construction contract for PROJECT in accordance with requirements of the Local Agency Public Construction Act and the California Labor Code, including its prevailing wage provisions. Workers employed in the performance of work contracted for by PCJPB, and/or performed under encroachment permit, are covered by provisions of the California Labor Code in the same manner as are workers employed by STATE's contractors -6- Draft District Agreement No. 4-2170 29. Construction by PCJPB of those portions of PROJECT which lie within the SHS right of way shall not commence until PCJPB's contract plans involving such work, the utility relocation plans, and the right of way certification have been reviewed and accepted by STATE and encroachment permits have been issued to PCJPB and PCJPB's contractor. 30. PCJPB's construction contractor shall maintain in force, until completion and acceptance of the PROJECT construction contract, a policy of General Liability Insurance, including coverage of Bodily Injury Liability and Property Damage Liability, that complies with all coverage requirements with Section 7-1.12 of STATE's then effective Standard Specifications. Such policy shall contain an additional insured endorsement naming STATE and its officers, agents, and employees as additional insureds. This insurance coverage shall be evidenced by a Certificate of Insurance in a form satisfactory to STATE which shall be delivered to STATE before the issuance of an encroachment permit to PCJPB's construction contractor. 31. To require the construction contractor to furnish both a payment and a performance bond, naming PCJPB as obligee with both bonds complying with the requirements set forth in Section 3-1.02 of STATE's current Standard Specifications prior to performing any PROJECT construction work. PCJPB shall defend, indemnify, and hold harmless STATE and its officers, agents, and employees from all claims and suits by stop notice claimants related to the construction of PROJECT. 32. To have PROJECT constructed by contract to the satisfaction of and subject to STATE's acceptance in accordance with the STATE accepted PROJECT PS8vE. 33. Contract administration procedures shall conform to STATE's Construction Manual, .Construction Manual Supplement for Local Agency Resident Engineer, Local Agency Structure Representative Guideline, and the PROJECT encroachment permits. 34. Construction within the existing or ultimate SHS right of way shall comply with STATE's Standard Specifications, the PROJECT Special Provisions, and STATE's Construction Manual. 35. If any existing utility facilities conflict with the construction of PROJECT or violate STATE's encroachment policy, PCJPB shall make all necessary arrangements with the owners of such facilities for their timely accommodation, protection, relocation, or removal. 36. The costs for the PROJECT's positive identification and location, protection, relocation, or removal of utility facilities whether inside or outside STATE's right of way shall be determined in accordance with Federal and California laws and regulations, and STATE's policies, procedures, standards, practices, and applicable agreements including, but not limited to, Freeway Master Contracts. 37. All survey work shall conform to the methods, procedures, and requirements of STATE's Surveys Manual and STATE's Staking Information Booklet. 38. PROJECT material testing and Quality Control/Assurance shall conform to STATE's Construction Manual, Construction Manual Supplement for Local Agency Resident Engineer, Local Agency Structure Representative Guideline and STATE's California Test Methods, and shall be performed by amaterial-tester certified by STATE, at PCJPB's expense. 39. To furnish, at PCJPB's expense and subject to the approval of STATE, afield site representative who is a licensed civil engineer in the State of California to perform the functions of a Resident Engineer. The Resident Engineer shall not be an employee or -~- Draft District Agreement No. 4-2170 subcontractor of the entity, if any, that prepared the PROJECT PS8sE or an employee of the construction contractor. 40. PCJPB will furnish, at PCJPB expense and subject to approval of STATE, a Landscape Architect to perform the function of an Assistant Resident Engineer/Inspector who is responsible for both daily on-site inspections and final decisions including, but not limited to, any highway planting and the irrigations systems that comprise a portion of the PROJECT work. Final decisions shall continue to be subject to the satisfaction and approval of STATE. 41. At PROJECT's expense, to furnish sufficient qualified support staff, subject to the approval of STATE, to assist the Resident Engineer in, but not limited to, structure representative, construction surveys, soils and foundation tests, measurement and computation of quantities, testing of construction materials, checking shop drawings, preparation of estimates and reports, preparation of the mandated "As-Built" drawings, and other inspection and staff services necessary to assure that the construction is being performed in accordance with the PROJECT PS8sE. Said qualified support staff shall be independent of the design engineering company and construction contractor, except that the PROJECT designer may be retained to check shop drawings, do soils foundation tests, test construction materials, and perform construction surveys. 42. Within one hundred eighty (180) days following the completion and acceptance of the PROJECT construction contract, to furnish STATE with a complete set of "As-Built" plans in accordance with STATE's then current us DADS sincludane all ~ STATEPrequested ontract and STATE practice. The submittal m records, including survey docu or Act section 8771) ~ PCJPB shall a.lsocsubmit ccorrect d perpetuation per the Land Survey , full-sized hardcopy structure plans. 43. To retain or cause to be retained for audit by STATE or other government auditors for a .period of four (4) years from ~epROJECT onstructionu PCJPB shaloreEain said records records and accounts relating to and accounts longer for such periods as are required in writing by STATE. 44. Upon completion of PROJECT, maintenance, ownership and title to all materials and equipment constructed or installed within and outside of the State Highway right of way will become the property of CITY. 45. If PCJPB cannot complete PROJECT as originally scoped, scheduled, and estimated, PCJPB will, only with STATE's prior written consent, amend the PROJECT PS8sE for a suitable resolution to ensure an alternate form of modified PROJECT that will, at all times, provide a safe and operable SHS. 46. If PCJPB terminates the PROJECT prior to completion, Su1~ condition onto a s~af Band PCJPB's expense, to return the SHS right of way to rts orig operable condition acceptable to STATE. If PCJPB fails to do so, STATE reserves the right to finish PROJECT or place PROJECT in a safe and operable condition and STATE will bill PCJPB for all actual expenses incurred and PCJPB agrees to pay said bill within thirty (30) days of receipt. 47. If unanticipated cultural, archaeological, paleontological or other protected materials are encountered during PROJECT construction, PCJPB shall stop work in that area until a qualified professional can evaluate the nature and significance of the find and a plan is approved for the removal or protection of that material. The costs for any removal or -g- Draft District Agreement No. 4-2170 protection of that material shall be covered as a PROJECT cost contemplated by this Agreement. 48. To provide a Construction Zone Enhancement Enforcement Program (COZEEP) by contracting directly with the California Highway Patrol (CHP) for all traffic restrictions as outlined in STATE's Construction Manual. SECTION II CITY AGREES: To acquire STATE excess land and airspace (property within STATE'; right'; o#~.way limns. that is .capable of~`other development). lease for PROJECT. Said acquisition and lease will be performed outside the scope of this Agreement. CITY and STATE will enter into a maintenance agreement prior to advertisement of construction for PROJECT. SECTION III STATE AGREES: At no cost to PCJPB, to complete STATE's review the environmental documents prepared and submitted by PCJPB and to provide IQA of all PCJPB work necessary for completion of the PR, PS8vE construction for PROJECT done by PCJPB ,including, but not limited to, investigation of potential hazardous material sites and all right of way activities undertaken by PCJPB or its designee, and provide prompt reviews and concurrence, as appropriate, of submittals by PCJPB, while cooperating in timely processing of documents necessary for completion of the environmental documentation, PR, and PS8yE for PROJECT. 2. Upon proper application by PCJPB and by PCJPB's contractor, to issue, at no cost to PCJPB and PCJPB's contractor, the necessary encroachment permits for required work within the SHS right of way as more spec~cally defined elsewhere in this Agreement. 3. To provide, at PCJPB 's cost, any "State-furnished material" as shown on the PROJECT PS8vE as determined by STATE to be appropriate and available during construction of PROJECT. Upon receipt of PCJPB's request for any such State-furnished materials", STATE will order those materials and STATE's Project Manager will have an u^.~'c:~e submitted to PCJPB for the costs of those materials. Upon receipt of those materials and PCJPB's payment, STATE will make those "State-furnished materials" available to PCJPB at a STATE designated site. 4. Independent assurance testing, specialty testing, and approval of the type of asphalt and concrete plants shall be by STATE, at STATE's expense as part of IQA provided. 5. To submit an invoice to PCJPB for the estimated direct and indirect cost of source inspection, pursuant to Article 25 of Section I, prior to start of PROJECT construction and upon receipt of said estimate from STATE's representative. 6. Upon completion of PROJECT and all work incidental thereto, to furnish PCJPB with a detailed statement of the State-furnished materials and source inspection costs to be borne by PCJPB. To thereafter refund to PCJPB, promptly after completion of STATE's final accounting of said PROJECT costs, any amount of PCJPB's deposits, required in Articles 24 8v 26 of Section I, remaining after actual State-furnished materials and source -9- Draft District Agreement No. 4-2170 inspection costs to be borne by PCJPB have been deducted or to bill PCJPB for any additional amount required to complete PCJPB's financial obligations assumed pursuant to this Agreement. SECTION IV IT IS MUTUALLY AGREED: 1. All obligations of STATE under the terms of this Agreement are subject to the appropriation of resources by the Legislature, State Budget Act authority and the allocation of funds by the California Transportation Commission (CTC). 2. The parties to this Agreement understand and agree that STATE's IQA is defined as providing STATE policy and procedural guidance through to completion of the PROJECT preliminary engineering, PS&E, right of way and construction phases administered by PCJPB. This guidance includes prompt reviews by STATE to assure that all work and products delivered or incorporated into the PROJECT by LOCAL AGENCIES conform with then existing STATE standards. IQA does not include any PROJECT related work deemed necessary to actually develop and deliver the PROJECT, nor does it involve any validation to verify and recheck any work performed by PCJPB and/or its consultants or contractors and no liability will be assignable to STATE, its officers and employees by PCJPB under the terms of this Agreement or by third parties by reason of STATE's IQA activities. All work performed by STATE that is not direct IQs ac ulal cossgandlPCJPB swill pay or authorize a service for which STATE v~nll invoice STATE to reimburse itself from then available PROJECT funds. 3. The design, right of way acquisition, and preparation of environmental documentation and related investigative studies and technical environmental reports for PROJECT shall be performed in accordance with all applicable Federal and STATE standards and practices current as of the date of performance. Any exceptions to applicable design standards shall first be considered by STATE for approval via the processes outlined in STATE's Highway Design Manual and appropriate memoranda and design bulletins published by STATE. In the event that STATE proposes and/or requires a change in design standards, implementation of new or revised design standards shall be done as part of the work on PROJECT in accordance with STATE's current Highway Design Manual Section 82.5, "Effective Date for Implementing Revisions to Design Standards." STATE shall consult with PCJPB in a timely manner regarding the effect of proposed and/or required changes on PROJECT. 4. PCJPB will be the CEQA Lead Agency and Responsible Agency. PCJPB will asse$ PROJECT impacts on the environment and PCJPB will prepare the appropriate level of environmental documentation and necessary associated supporting investigative studies and technical environmental reports in order to meet the requirements of CEQA. If applicable, PCJPB will submit to STATE all investigative studies and technical environmental reports for STATE's review and comment. The environmental document and/ or categorical exemption/ exclusion determination, including the administrative draft, draft, administrative final, and final environmental documentation, as applicable, will require STATE's review and comment prior to public availability. 5. If, during preparation of preliminary engineering, preparation of the PS8sE, performance of right of way activities, or performance of PROJECT construction, new information is obtained which requires the preparation of additional environmental documentation to comply with CEQA, this Agreement will be amended to include completion of these additional tasks by PCJPB. -10- Draft District Agreement No. 4-2170 6. PCJPB agrees to obtain, as a PROJECT cost, all necessary PROJECT permits, agreements and/ or approvals from appropriate regulatory agencies, unless the parties agree otherwise in writing. If STATE agrees in writing to obtain said PROJECT permits, agreements, and/or approvals, those said costs shall be paid by PCJPB, as a PROJECT cost. 7. PCJPB shall be fully responsible for complying with and implementing any and all environmental commitments set forth in the environmental documentation, permit(s), agreement(s) and/or environmental approvals for PROJECT. The costs of said compliance and implementation shall be a PROJECT cost. 8. If there is a legal challenge to the environmental documentation, including supporting investigative studies and/or technical environmental report(s), permit(s), agreement(s), environmental commitments and/or environmental approval(s) for PROJECT, all legal costs associated with those said legal challenges shall be a PROJECT cost. 9. PCJPB, as a PROJECT cost, shall be responsible for preparing, submitting, publicizing and circulating all public notices related to the CEQA environmental process including, but not limited to, notice(s) of availability of the environmental document and/or determinations and notices of public hearings. Public notices shall comply with all State and Federal laws, regulations, policies and procedures. PCJPB, as a PROJECT cost, shall be responsible for planning, scheduling and holding of all public meetings/hearings related to the CEQA environmental process, including, but not limited to, public meetings/hearings on the environmental document. PCJPB shall provide STATE the opportunity to provide comments on any meeting exhibits, handouts or other materials at least ten (10) days prior to any such meetings/hearings. PCJPB maintains final editorial control of exhibits, handouts or other material to be used at the public meetings/hearings 10. All administrative reports, studies, materials, and documentation, including, but not limited to, all administrative drafts and administrative finals, relied upon, produced, created or utilized for PROJECT will be held in confidence pursuant to Government Code section 6254.5(e). The parties agree that said material will not be distributed, released or shared with any other organization, person or group other than the parties' employees, agents and consultants whose work requires that access without the prior written approval of the party with the authority to authorize said release and except as required or authorized by statute or pursuant to the terms of this Agreement. 11. During PROJECT construction, representatives of PCJPB and STATE will cooperate and consult with each other to assure that all PROJECT work is accomplished according to the PROJECT PS8sE and STATE's then applicable policies, procedures, standards, and practices. Satisfaction of these requirements shall be verified by STATE's IQA representatives who are authorized to enter PCJPB and CITY property during construction for the purpose of monitoring and coordinating construction activities. 12. PROJECT PS8sE changes shall only be implemented by contract change orders that have been reviewed and concurred with by STATE's representative(s). All changes affecting public safety or public convenience, all design and specification changes, and all major changes as defined in STATE's Construction Manual shall be approved by STATE in advance of performing that work. Unless otherwise directed by STATE's representative, change orders authorized as provided herein will not require an encroachment permit rider. All changes shall be shown on the "As-Built" plans. 13. PCJPB's share of all changes in development and construction costs associated with modifications to the basic design features as described above shall be in the same -11- Draft District Agreement No. 4-2170 proportion as described in this Agreement, unless mutually agreed to the contrary by STATE and PCJPB in a subsequent amendment to this Agreement. 14. The party that discovers Hazardous Material (HM) will immediately notify the other party to this Agreement. HM-1 is defined as hazardous material (including, but not limited to, hazardous waste) that requires removal and disposal pursuant to federal or state law, whether it is disturbed by PROJECT or not. HM-2 is defined as hazardous material (including, but not limited to, hazardous waste) that may require removal and disposal pursuant to federal or state law, only if disturbed by PROJECT. 15. STATE, independent of PROJECT, is responsible for any HM-1 found within existing SHS right of way. STATE will undertake HM-1 management activities with minimum impact to PROJECT schedule and will pay all costs for HM-1 management activities. PCJPB; independent of PROJECT, is responsible for any HM-1 found outside existing SHS right of way. PCJPB will undertake HM-1 management activities with minimum impact to PROJECT schedule and will pay all costs for HM-1 management activities. 16. If HM-2 is found within the limits of PROJECT, the public agency responsible for advertisement, award, and administration (AAA) of the PROJECT construction contract will be responsible for HM-2 management activities. Any management activity cost related to HM-2 is a PROJECT construction cost. l7. Management activities related to either HM-1 or HM-2 include, without limitation, any necessary manifest requirements and designation of disposal facility. 18. STATE's acquisition or acceptance of title to any property on which any hazardous material is found will proceed in accordance with STATE's policy on such acquisition. 19. Nothing within the provisions of this Agreement is intended to create duties or obligations to or rights in third parties not parties to this Agreement or to affect the legal liability of either party to the Agreement by imposing any standard of care with respect to the development, design, construction, operation, or maintenance of the SHS and public facilities different from the standard of care imposed by law. 20. Neither STATE nor any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by PCJPB and CITY under or in connection with any work, authority or jurisdiction conferred upon PCJPB and CITY or arising under this Agreement. It is understood and agreed that PCJPB and CITY will fully defend, indemnify and save harmless STATE and all its officers and employees from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortious, contractual, inverse condemnation or other theories or assertions of liability occurring by reason of anything done or omitted to be done by PCJPB and CITY under this Agreement. 21. Neither PCJPB nor any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by STATE and CITY, under or in connection with any work, authority or jurisdiction conferred upon STATE and CITY or arising under this Agreement. It is understood and agreed that STATE and CITY will fully defend, indemnify and save harmless PCJPB and all its officers and employees -12- Draft District Agreement No. 4-2170 from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortious, contractual, inverse condemnation or other theories or assertions of liability occurring by reason of anything done or omitted to be done by STATE and CITY under this Agreement. 22. Neither CITY nor any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by STATE and PCJPB under or in connection with any work, authority or jurisdiction conferred upon STATE and PCJPB or arising under this Agreement. It is understood and agreed that STATE and PCJPB will fully defend, indemnify and save harmless CITY and all its officers and employees from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortious, contractual, inverse condemnation or other theories or assertions of liability occurring by reason of anything done or omitted to be done by STATE and PCJPB under this Agreement. 23. Prior to the commencement of any work pursuant to this Agreement, either STATE or PCJPB may terminate this Agreement by written notice to the other party. 24. No alteration or variation of the terms of this Agreement shall be valid unless made by a formal amendment executed by the parties hereto and no oral understanding or agreement not incorporated herein shall be binding on any of the parties hereto. -13- Draft District Agreement No. 4-2170 25. This Agreement shall terminate upon the satisfactory completion of all post-PROJECT construction obligations of PCJPB and the delivery of required PROJECT construction documents, with concurrence of STATE, or on June 30, 2012, whichever is earlier in time, except that the ownership, operation, maintenance, indemnification, environmental commitments, legal challenges, and claims articles shall remain in effect until terminated or modified, in writing, by mutual agreement. Should any construction related or other claims arising out of PROJECT be asserted against one of the parties, the parties agree to extend the fixed termination date of this Agreement, until such time as the construction related or other claims are settled, dismissed or paid. 26. Signatories may execute this agreement through individual signature pages provided that each signature is an original. This agreement is not fully executed until all original signatures are attached. STATE OF CALIFORNIA PENINSULA CORRIDOR Department of Transportation JOINT POWERS BOARD WILL KEMPTON Director By: By' Deputy District Director Michael J. Scanlon Executive Director Approved as to form and procedure: Attorney Department of Transportation Certified as to funds: Approved as to form: District Budget Manager Attorney Certified as to financial terms and policies: Accounting Administrator -14- Draft District Agreement No. 4-2170 CITY OF SOUTH SAN FRANCISCO By: Pedro Gorzalez Mayor Attest: Krista Martinelli La`son City Clerk Approved as to form and procedure: Attorney -15- RAILROAD CONSTRUCTION AND MAINTENANCE AGREEMENT SOUTIi SAN FRANCISCO STATION IMPROVEMENTS PROJECT This Railroad Construction and Maintenance Agreement (this "Agreement") is entered into this day of , 2008, by and between the Peninsula Corridor Joint Powers Board, a public agency ("JPB" or "Railroad"), and the City of South San Francisco, a municipal corporation ("City"). RECITALS A. City is a duly established municipal corporation organized and existing under the laws of the State of California. B. JPB is a public agency organized and existing under the laws of the State of California. C. Railroad, in conjunction with the San Mateo County Transit District ("SamTrans"), is the owner of the Peninsula Corridor Railroad right-of--way, and specifically that certain real property and fixtures located in the City of South San Francisco between MP 9.0 and MP 9.7 (the "Right of Way"). Railroad is owner of the South San Francisco Caltrain Station (the "Station") located west of the Right of Way (the Station and the land upon which it is located are collectively referred to herein as the "Station Property"). City is the owner of the property to the east of the Right of Way, commonly known as Executive Drive (the "Executive Drive Property"). The State of California Department of Transportation ("Caltrans") owns the property to the south of the Station Property and west of the Right of Way (Caltrans Parcel No. DD-000137-01-01 and Caltrans Parcel No. FLA-04-SM-101-O1, and collectively herein, the "Caltrans Property"). City is in negotiations to purchase Caltrans Parcel No. DD-000137-01- Ol and to lease Caltrans Parcel No. FLA-04-SM-101-01 on a long-term basis. In addition, City owns or is in negotiations to acquire certain additional properties located along Corporate Drive (the "Corporate Drive Property") and a portion of certain additional parcels referred to herein as the "Comfort Suites Property:' Collectively, the Executive Drive Property, the Caltrans Property, the Comfort Suites Property and the Corporate Drive Property are herein referred to as the "City Properties." The location of the Right of Way, the Station Property, and the City Properties are depicted on Exhibit A, attached hereto and incorporated herein by this reference. D. The City wishes to cooperate with Railroad in Railroad's design, construction and maintenance of certain improvements to the Station (the "Project"}, which includes the below- listed improvements (the "Improvements") and which will be constructed pursuant to JPB's Contract No. 08-PCJPB-C-070 South San Francisco Station Improvements (the "Contract"): - Demolition and site grading associated with the removal of the existing Caltrans Maintenance Building (the "Building") located under the SR 101 flyover within the Caltrans Property, which City will complete prior to issuance of the Contract (the "Building Demo"). 1138943-4 City version 11-23-08 -16- - Relocation of utilities from their existing locations which are in conflict with the proposed pedestrian underpass to an alignment crossing the current location of the Building, which relocation will be accomplished prior to the issuance of the Contract. - Construction of a pedestrian access underpass (the "Underpass") including planting and hardscape at the Underpass and along Executive Drive at the south end of JPB's new station platforms, that will connect the Caltrans Property to Executive Drive (collectively, the Underpass and related improvements are referred to herein as the "Underpass Improvements"). Relocation and reconstruction of various tracks at the Station. - Paving and striping the Station parking lot. - Construction of new medians, traffic islands, curb and gutter, paving and sidewalk at Executive Drive. - Construction of a new loading area for shuttle busses at Executive Drive. - Striping and curve markings. - Construction of a new platform with all corresponding furniture, electronics, shelters etc. at the Station. - Other minor track work to upgrade access and facilitate use of the new track. - Replacing the current signal bridge at the north side of the Station with a new signal cantilever. - Installation of fencing and pedestrian access control measures as required. - All other necessary construction activities required to build the above, including all necessary changes to telephone, telegraph, signal, electrical lines and appurtenances, relocation of all utilities and pipelines of any kind, all temporary and permanent track work (if necessary), grading, drainage, access roadways to railroad right-of--way, preliminary and construction engineering, and any andlor all other work of every kind and character necessary to build the above. E. The parties now desire to set forth herein their understandings and agreements relating to construction of the Project and maintenance of the Improvements. AGREEMENT 1138943-4 - 1 '~ - NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows: 1. Improvements. 1.1 Construction Costs. Railroad shall furnish, or cause to be furnished, all labor, materials, tools, and equipment needed to complete the Project, and shall pay for the design, construction, construction management and indirect project costs it incurs for the Project, except as expressly provided in Sections 1.2, 1.3 and 1.4 below. Notwithstanding the foregoing, City shall bear its own costs related to the Project, including costs for time that City staff or consultants that City engages to review design or conduct inspections. City shall waive all City fees with regard to the construction of the Project and the Improvements, including without limitation, permit fees, and shall waive all other types of City fees for any and all work associated with the Project. 1.2 JPB to Contribute to Costs for Building Demolition. The City shall be responsible for completing the Building Demo. The JPB shall reimburse City for fifty percent (50%) of the costs City incurs for the Building Demo, including without limitation, costs for labor, materials, tools, equipment, design, construction, construction management, the removal and disposal of debris from the site, and indirect project costs required to complete the Building Demo; provided however, JPB's maximum payment for such costs shall be Fifty Thousand Dollars ($50,000). City shall be responsible for all costs exceeding such sum that maybe incurred in connection with the Building Demo. City shall provide invoices to Railroad not more frequently than once per month, accompanied by copies of third-party invoices, evidence of City's payment for materials and services rendered in connection with the Building Demo, and such other documentation as Railroad may reasonably require. Railroad shall pay amounts invoiced within sixty (60) days of receipt. Any invoice not- timely paid will carry an interest charge of 10% per annum from and after the date of delinquency unless Railroad has a bona fide dispute regarding such invoice. 1.3 Handling of Hazardous Materials. Railroad will coordinate with appropriate utility relocation companies to relocate those utilities that conflict with the construction of the Project ("Relocation Work"), and Railroad will provide an appropriate location for the initial stockpiling of any excess spoils arising from such Relocation Work. In addition, in compliance with all applicable laws and at its cost, Railroad shall arrange for the necessary excavation, and initial stockpiling of all Hazardous Materials to be excavated at the City Properties. To the extent applicable, Railroad will pay for any permits, and all fees, taxes and charges associated with each task assigned to it in the preceding sentence. Railroad shall stockpile such materials on the Caltrans Property. Railroad shall promptly remove any such material and shall provide its own generator number for such disposal. Except as expressly provided in this Section, Railroad shall be responsible for arranging and paying for all characterization of the stockpiled materials, as well as paying for the stockpile maintenance, handling, loading, transport and disposition of any Hazardous Materials excavated or disturbed. Furthermore, to the extent applicable, the Railroad will pay all fees, taxes, charges or other impositions associated with each such task or responsibility. City shall only be responsible for arranging and paying for characterization of 1138943-4 -18- stockpiled materials and for payment for stockpile maintenance, handling, loading, transport and disposition of Hazardous Materials excavated or disturbed as part of the Building Demo or the work at the City Properties, but only to the extent that such responsibility is not undertaken by Caltrans or by a third party responsible for the disposal or discharge of such Hazardous Materials. Without limiting the foregoing, City shall have no responsibility for any cost or obligation associated with the excavation, removal, initial stockpiling, arranging, characterization, stockpile maintenance, handling, loading, transport, or disposition of Hazardous Materials excavated or disturbed on any property other than the City Properties. 1.4 Additional Work; Substitution of Materials. The City may request that the Railroad add to the Project any such additional improvements as the City may designate ("Additional Work"), and in the exercise of Railroad's reasonable discretion, Railroad shall decide whether to accept and add the Additional Work-to the Project. If the Railroad accepts the Additional Work as an addition to the Project, the City shall be responsible for all costs incurred by the Railroad for labor, materials, tools, and equipment needed to complete such Additional Work, including paying for the design, construction, construction management and indirect project costs incurred by the Railroad for the construction of said Additional Work. In addition, if the City requests the substitution of any material or product described in the Project plans and specifications with a material or product that will result in a greater net cost for the completion of the Project, then the City shall be responsible for any additional costs incurred by the Railroad for accepting such a substitution of material or product, including, without limitation, all labor, materials, tools, and equipment needed in connection with such substitution, all special permits, taxes .~or fees imposed on account of such materials, and any additional design, construction, construction management and indirect Project costs incurred by the Railroad above and beyond that which the original material or product would have cost the Railroad to complete the Project (all of-the foregoing, collectively, "Substitute Materials Costs"). Notwithstanding anything to the contrary set forth herein, City's obligation to pay for Additional Work and for Substitute Materials Costs shall be based upon a scope of work and budget agreed upon in advance by City and Railroad and reflected in the construction bid accepted for such Additional Work and Substitute Materials Costs, together with a fee for Railroad's construction management equal to percent ~%) of the bid amount ("Construction Management Fee"). 1.5 Payment. Not more than frequently than once per month, Railroad shall provide a written invoice to City reflecting Railroad's actual third-party costs incurred in conducting the Additional Work (if any). Railroad's invoices shall be accompanied by copies of third-party invoices, evidence of Railroad's payment for materials and services rendered in connection with the Project, and such other documentation as City may reasonably require. Provided that City does not dispute the amount of any invoice, City shall pay amounts invoiced within sixty (60) days of receipt. Any invoice not timely paid will carry an interest charge of 10% per annum from and after the date of delinquency unless City has a bona fide dispute regarding such invoice. City shall only be responsible for payment for third party expenses for the Additional Work and Substitute Materials requested by City pursuant to Section 1.4. City is not responsible 1138943-4 -19- for Railroad's administrative, overhead or staff costs except to the extent included in Railroad's Construction Management Fee described in Section 1.4. 2. Construction Standards/Desi~n. The Railroad is designing and constructing the Project at Railroad's sole cost and expense except as otherwise expressly stated herein. The design and construction of the Improvements shall comport with Railroad's adopted standards, specifically JPB Standards, dated April 15, 2007, except when they involve City streets or City property located outside of the Right-of--Way, which shall be designed to City standards. If no City standards exist for particular features of such areas outside of the Right-of--Way, the Improvements shall be designed to meet applicable Caltrans standards, or if no Caltrans standards apply, to such standards as JPB shall reasonably determine to apply. JPB shall consult with City and shall reasonably accommodate City comments and suggestions on any changes that affect work outside the Right-of--Way or in areas that City will be responsible to maintain. Railroad will have the right to make changes during construction subject to the terms of this Agreement. Nothing in this Agreement is intended to or shall be construed to prevent City from improving, modifying, developing or contracting with third parties for the future improvement, modification, development or redevelopment of the City Properties and any Improvement constructed thereon, provided that access to the Station is not impaired. City shall not be required to obtain consent from JPB for any such work. 3. Schedule. The contract for the construction of the Project is expected to be awarded by JPB in Spring 2009, and the work is to be completed within approximately 18 months from the issuance to the contractor of a notice to proceed ("NTP"). It is understood, however, that JPB's contract shall contain its standard provisions providing contractors with time extensions for excusable delays. 4. Real Property Canveyances. The City has acquired or is in negotiations to acquire from other parties, certain real property rights required for the construction of the Project. City shall acquire rights to the City Properties (defined in Recital C and described in Exhibit A at City's sole cost and expense; provided however, nothing in this Agreement is intended to or shall be construed to obligate City to adopt a resolution of necessity or to exercise the power of eminent domain with respect to any such property. City agrees to provide Railroad access to and use of the City Properties pursuant to a Right of Entry Agreement substantially in the form attached hereto as Exhibit B, as more fully described in Section 5 below. 5. Prerequisites to Construction. Before JPB engages in the construction of the Underpass Improvements, City shall provide JPB an executed copy of the Right of Entry Agreement or otherwise grant or cause to be granted access for the JPB to the City Properties; 6. City Improvements/Access to Right-of-Way. To enable City to maintain City-owned Improvements located on the Right-of--Way, by not later than ninety (90) days following 1138943-4 _20_ Railroad's and City's final acceptance of the Project, Railroad shall grant to City a license ("License Agreement") so that City may access, maintain, repair and replace certain Underpass Improvements and other Improvements located on the Right of Way. The License Agreement shall be in form reasonably acceptable to Railroad and City, and shall require the City to follow JPB Roadway Worker Protection and other safety protocols when working within fifteen feet of the tracks. JPB will provide annual Railroad Worker Protection training to the City public works and engineering.personnel at no cost to the City. 7. Utility Relocations. As a cooperating agency with regard to the Project, if a utility that is required to be relocated is covered by a franchise or other agreement with the City that requires the utility to relocate facilities at the utility's cost, City shall use its best efforts to accomplish the relocation without further cost to the Project. Otherwise, Railroad shall be solely responsible at Railroad's expense (subject to Section _l .3), for identifying the location of all pipelines (including, without limit, high pressure petrol pipelines, gas and water pipelines), fiber optic lines and all other utilities of whatever nature ("Facilities") to accommodate construction of the Project, and for relocating or arranging for the relocation of all such Facilities that would interfere with construction of the Project. Railroad shall be responsible for contacting and shall work with the owners of these Facilities to identify their exact location and arrange for relocation as needed. Nothing herein shall preclude the Railroad from seeking reimbursement for Facilities relocation costs and liabilities from third parties such as the Facilities owners themselves. Notwithstanding the above, to the extent that Facilities are owned by City, City shall accomplish their :relocation at City's cost. City and JPB will work cooperatively to minimize the cost of utility relocations. 8. Permitting, Approvals and Contract Requirements. 8.1 Environmental Review. JPB will be the lead agency under CEQA and will obtain any required environmental clearance for the Project. JPB's contractor will be subject to all applicable Storm Water Pollution Prevention Plan (SWPPP) requirements, including current standard best management practices, relating to the control of run-off, dust, mud, etc. 8.2 Inspections and Reporting. Railroad or its contractor shall provide all flagging and engineering inspection required in connection with construction of the Project. JPB's Resident Engineer and/or inspector shall coordinate with City on the inspection schedule. JPB will keep City informed of the progress of construction and will coordinate public outreach with City. City will designate a point of contact for construction coordination. JPB will consult with City on any changes to the contract plans that affect work on the Improvements owned by the City. 8.3 City Permits and Approvals. To facilitate the construction of the Improvements, City shall grant to Railroad an encroachment permit in City's standard form ("Encroachment Permit"). The City confirms that to the best of its knowledge, it has the ability to issue and enforce encroachment permits over all public properties not owned by Railroad as required to effect reconstruction of the streets as contemplated in the Project design. City will provide pre- approval, upon due review and comment, of the Encroachment Permit for the Project prior to the 1138943-4 -21- JPB advertising for bids. To allow Railroad to incorporate them in its plans and specifications, City will provide JPB with its form of Encroachment Permit for the Project prior to bid. City agrees to issue Encroachment Permits to Contractor after contract award in the form provided prior to bid. The form of Encroachment Permit will contain reasonable conditions as agreed by City and JPB. City will issue a Haul Route Permit, if required, for routes along City streets between work areas and State highways. Maintenance. Upon completion of construction of the Project, the parties shall be responsible to maintain the following Improvements: 9.1 City shall maintain and service (including provision of electric power for lighting, and water for planting or maintenance), repair and replace at City expense, and as needed, the Underpass Improvements, the Underpass (and associated portal entrances), as well as the Improvements located on the Executive Drive Property. Included in the foregoing obligation is the obligation of the City for all plantings and corresponding irrigation networks along Executive Drive and the Underpass, including plantings located along the fencing, and adjacent to the proposed sidewalk, even if the same is located on Railroad property. 9.2 Except as expressly provided~n the'foregoing Section 9:1, JPB shall be _ responsible fore. all other lzlaultenatlce, service anal xepair of the Project acid the Improvements. 10. Indemni 10.1 City's Indemnity. City shall fully indemnify, hold harmless and defend the JPB, SamTrans, the National Railroad Passenger Corporation ("Amtrak"), Union Pacific Railroad Company, and/or their respective officers, directors, employees, contractors and agents (collectively, "JPB Indemnitees") from and against all liability, claims, suits, proceedings, sanctions, costs or expenses (including e.g. court costs and attorneys' fees) caused by or arising from personal injuries to or death of any person (including, but not limited to, the passengers, employees and contractors of the JPB Indemnitees), and for damage to or loss of property arising out of or resulting from the sole negligence or willful misconduct of City in performing any obligation under this Agreement or for a breach of this Agreement. City's obligation to defend shall include the payment of all reasonable attorney's fees and all other costs and expenses of suit, and if any judgment is rendered against any JPB Indemnitee, City shall, at its expense, satisfy and discharge the same; provided, however, that the JPB Indemnitee shall exercise commercially reasonable efforts to timely tender any such claims to the City so as to avoid prejudicing the City's rights and/or abilities to undertake a defense of such a claim. 10.2 City's Indemnity Respecting Hazardous Materials. The City will defend, indemnify and hold the JPB Indemnitees harmless from and against all charges, liens, costs, taxes, penalties, claims, actions, proceedings and obligations arising from or related to the presence of any Hazardous Materials encountered during construction of the Project on the City Properties, except for the specific obligations accepted by the JPB pursuant to Section 1.3, above 1138943-4 _22_ and to the extent that such responsibility is not undertaken by Caltrans or by a third party responsible for the disposal or discharge of such Hazardous Materials. The City's obligation to defend shall include the payment of all reasonable attorney's fees and all other costs and expenses of any action or proceeding, and if any judgment is rendered against the JPB Indemnitee's or any one of them, City shall, at its expense, promptly satisfy and discharge such judgment; provided, however, that the JPB Indemnitees shall exercise reasonable efforts to timely tender any such claims to the City so as to avoid prejudicing the City's rights and/or abilities to undertake a defense of such a claim. The City shall have no indemnity obligation hereunder for the presence of any Hazardous Materials encountered on City Properties during the Construction of the Project which are not reported in writing to the City within ninety (90) days following the date such Hazardous Materials are encountered, nor shall the City have any indemnity obligation hereunder for the presence of any Hazardous Materials on any part of the Project not within City Properties, nor shall the City have any indemnity obligation hereunder for the presence of any Hazardous Materials on the Property which are encountered or discovered following the completion of the Construction of the Project. 10.3 JPB's Indemnity. JPB shall fully indemnify, hold harmless and defend the City and the Redevelopment Agency of the City of South San Francisco ("Agency") and their respective officers, elected and appointed officials, directors, employees, contractors, consultants, representatives, and agents (all of the foregoing, collectively, "City Indemnitees") from:-and against all liability, claims, suits, sanctions, proceedings, costs or expenses (including e.g. court costs and attorney's fees) caused by or arising from personal injuries to or death of any person (including, but not limited to, passengers, employees and contractors of City, Agency, or Railroad) and for damage to or loss of property or income arising out of or resulting from any negligent act or omission by the JPB, its agents, employees, contractors or subcontractors in performing its obligations under this Agreement or for a breach of this Agreement. JPB's obligation to defend shall include the payment of all reasonable attorney's fees and all other costs and expenses of suit, and if any judgment is rendered against City Indemnitees or any one of them, JPB shall, at its expense, satisfy and discharge the same; provided, however, that the City shall exercise commercially reasonable efforts to timely tender any such claims to the JPB so as to avoid prejudicing the JPB's rights and/or abilities to undertake a defense of such a claim. 10.4 JPB's Indemnity Respecting Hazardous Materials. JPB will defend, indemnify and hold the City Indemnitees harmless from and against all charges, liens, costs, taxes, penalties, claims, actions, proceedings and obligations arising from or related to the presence of any Hazardous Materials on that part of the Project not located within the City Properties and encountered during the construction of the Project as well as for all costs arising from or associated with the presence of any Hazardous Materials encountered during the construction of that portion of the Underpass Improvements or the Underpass located beyond the boundaries of the City Properties, or implicated in any manner in the construction of the Underpass or Underpass Improvements beyond the boundaries of City Properties or in the relocation of utilities not located on the City Properties. All other costs of responding to the presence of Hazardous Materials on that portion of the Project beyond the boundaries of City Properties shall be the responsibility of the JPB to the extent that such responsibility is not undertaken by Caltrans or by a third party responsible for the disposal or discharge of such Hazardous 1138943-4 -23- Materials. The JPB's obligation to defend shall include the payment of all reasonable attorney's fees and all other costs and expenses of any action or proceeding, and if any judgment is rendered against the City Indemnitees or any one of them, JPB shall, at its expense, promptly satisfy and discharge such judgment; provided, however, that the City Indemnitees shall exercise reasonable efforts to timely tender any such claims to JPB so as to avoid prejudicing the JPB 's rights andlor abilities to undertake a defense of such a claim. 10.5 Hazardous Materials. For purposes of this Agreement, "Hazardous Material" means material that, because of its quantity, concentration or physical or chemical characteristics, is at any time now or hereafter deemed by any federal, state or local governmental authority to pose a present or potential hazard to public health, welfare or the environment. Hazardous Material includes, without limitation, any material or substance defined » » as a "hazardous substance , pollutant or contaminant or waste pursuant tot e Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.) or pursuant to Section 25316 of the California Health and Safety Code; a "hazardous waste" listed pursuant to Section 25140 of the California Health and Safety Code; any asbestos and asbestos containing materials whether or not such materials are part of the Property or are naturally occurring substances on the Property, and any petroleum, including, without limitation, crude oil or any fraction thereof, natural gas or natural gas liquids. 10.6 Severability. It is the intention of the parties that should any term of this indemnity provision be found to be void or unenforceable, the remainder of the provision shall remain in full force and effect. 11. Insurance. JPB will provide and will require its contractor to provide carry, maintain and keep in full force and effect, with an insurance company admitted to do business in California and approved by the City (which approval will not be unreasonably withheld by the City): (i) a policy or policies of comprehensive general liability insurance written on an occurrence basis with minimum limits of $2,000,000 per occurrence limit against any injury, death, loss or damage to property as a result of wrongful or negligent acts by JPB ,its officers, employees, subcontractors, agents and independent contractors in the performance of services under this Agreement; (ii) automotive liability insurance, with minimum combined single limits coverage of $1,000,000; (iii) environmental pollution insurance, including Contractor's Pollution Liability coverage, with a minimum of $2,000,000 per claim and $2,000,000 aggregate; (iv) worker's compensation insurance as required by law, with a liability minimum limit of $1,000,000; and (v) such coverage as may be required by the CalTrans Right of Entry Agreement. The City Indemnitees shall be added as additional insureds on the policy(ies) as to comprehensive general liability, property damage, and automotive liability coverages. All deductibles shall be borne and paid by JPB and not by the City. If any policy has an aggregate limit, the policy aggregate must be at least twice above the required per occurrence limit or the policy must contain a separate aggregate for the project described in this agreement. The policy(ies) as to comprehensive general liability, property damage, automotive liability, and professional liability shall provide that they are primary, and that any insurance maintained by the City shall be excess insurance only and shall not contribute to loss payments until the above- 1138943-4 -24- mentioned policies (and any other contribution coverages) have been exhausted. All insurance policies required by this Section shall be obtained from insurance companies admitted in the State of California and rated at least "A-VII" in Best's Insurance Guide. All insurance policies required hereunder shall be kept in force throughout the term of this Agreement. JPB agrees that it will not cancel, reduce or otherwise materially modify the insurance coverage. Each policies shall include endorsements that provide that the insurance required to be furnished by JPB and its contractors will be primary as regards the City, and that the City's insurance will be in excess of and not contribute to the insurance required to be furnished by JPB and/or its contractors; that the City will receive 30 day written notice of any reduction or cancellation or alteration of coverage of such insurance required to be furnished by JPB and/or its contractors, and shall include a severability of interest clause acceptable to the City. JPB shall submit to the City insurance certificates indicating compliance with the minimum worker's compensation insurance requirements above, and (ii) insurance policy endorsements indicating compliance with all other minimum insurance requirements above prior to beginning of performance under this Agreement. Upon City's request, JPB shall provide certified copies of the required insurance policies. 12. Performance Bond. JPB will require its contractor to provide performance and payment bonds in the full amount of the Contract and will require aone-year warranty period. City agrees to not require additional bonds of JPB's contractor. The bond shall be maintained in full force and effect during the entire period that work is performed by the Contractor until such work is accepted by City or JPB. With respect to City facilities, Railroad shall not accept the work related to such facilities for purposes of this Section until it has received written notice from City that such work is acceptable. JPB shall keep all City property, including without limitation, the City Properties, free of liens of every character arising from JPB's operations hereunder and shall discharge by bond or satisfaction any such lien within ten (10) days after it is filed. City shall have the right to post notices of non-responsibility and to record a copy thereof and affidavit of said posting pursuant the California Code of Civil Procedure. 13. Dispute Resolution. Prior to commencement of any formal litigation arising out of this Agreement, the parties shall submit the matters in controversy to a neutral mediator jointly selected by the parties. The costs of said mediator shall be borne equally by the parties involved in said dispute. To the extent the disputes remain outstanding following completion of mediation, any claim, controversy, action or proceeding arising out of or relating to this Agreement or to any document, instrument or exhibit executed pursuant to this Agreement shall be tried by a judge pro tem appointed pursuant to Article VI, Section 21 of the California Constitution and Rule 244 of the California Rules of Court. Such judge shall be selected by counsel for the parties from a list of retired judges furnished by the presiding judge of the County of San Mateo. If counsel are unable to select a judge pro tem, the judge will be selected by the presiding judge from the list provided. Each party shall pay its pro rata share of the fee for the judge pro tem. Each parry shall bear its own fees and expenses in such proceedings and the prevailing party shall not be entitled to reimbursement from the losing party for any such fees or expenses. 1138943-4 -25- The judge pro tem shall have the authority to try and decide any or all of the issues in the claim, controversy, action or proceeding, whether of fact or of law, andeo are to be det rmined decision thereon. In any proceedings before the fudge pro tem, the issu under the statutory and decisional law of the State of California. All local and California Rules of Court shall be applicable to any proceeding before the judge pro tem. All proceedings shall be conducted on consecutive dates without postponement or adjournments. 14. Notices. All notices, payments, requests, demands and other communications to be made or given under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally or on the second day after mailing if mailed to the party to whom notice is to be given by first class mail, registered or certified, postage prepaid and properly addressed as follows: CITY: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager JPB: Peninsula Corridor Joint Powers Board 1250 San Carlos Avenue San Carlos, CA 94070 Attn: Executive Director 15. Governing Law• This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of California as applied to contracts that are made and performed entirely in California. 16. Successors. This Agreement shall be binding upon and shall inure to the benefit of the respective successors and assigns of the parties hereto. 17. No Third Party Benefieia,-ies. Except as expressly provided herein, nothing herein shall be considered as creating any rights aid/or obligations by any of the parties to this Agreement to any third parties. Specifically, none of t'ie duties to inspect or maintain shall in any way be '`zonal obligations to any third party beyond those construed as creating or expanding any addi>., required and established under the applicable statues, regulations, ordinances or law. Notwithstanding the foregoing, the parties acknowledge and agree that City may assign certain of City's rights and obligations hereunder to the Redevei~oment Agency of the City of South San Francisco. 18. Amendments. This Agreement may be amended only in a writing that is executed by all the parties hereto. 19. Entire Agreement. This Agreement, together with Exhibits A and B attached hereto and incorporated herein by reference, that certain Cooperative Agreement by and among the parties 1138943-4 -26- and Caltrans dated as of , 2008, and that certain Right of Entry Agreement executed by and between the City and JPB and dated as of , 2008, constitutes the entire agreement of the parties with respect to its subject matter and supersedes any prior or contemporaneous oral or written understandings on the same subject. The parties intend this Agreement to be an integrated agreement. 20. Counterparts. This Agreement may be executed .in counterparts, each of which shall be deemed an original but all of which together shall constitute a single instrument. IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first written above. PENINSULA CORRIDOR JOINT POWERS BOARD By: Michael J. Scanlon Executive Director Approved as to Form: Attorney CITY OF SOUTH SAN FRANCISCO By: City Manager Approved as to Form: City Attorney 1138943-4 _2~_ Exhibit A RIGHT OF WAY, STATION PROPERTY AND CITY PROPERTIES (See Recital C -Attach description diagram of JPB Right of Way, Station Property, CalTrans Property, Executive Drive Property, Corporate Drive Property, and Comfort Suites Property.) 1138943-4 _28_ Exhibit B RIGHT OF ENTRY AGREEMENT (Attach form of Right of Entry Agreement between City and JPB.) 1138943-4 -29- DRAFT RIGHT OF ENTRY AGREEMENT This Right of Entry Agreement (this "Agreement") is entered into effective as of 2008 ("Effective Date"), by and between the City of South San Francisco, a municipal corporation ("City"), and Peninsula Corridor Joint Powers Board, a joint powers authority ("PCJPB"). City and PCJPB are herein collectively referred to as the "Parties." RECITALS A. City and PCJPB have agreed to cooperate with respect to the construction of a Caltrain station, pedestrian underpass to the station, and related improvements (collectively the "Project") on land located in the City. Pursuant to a separate agreement, PCJPB has agreed to undertake construction of the Project. B. City is in negotiations with the California Department of Transportation ("Caltrans") to acquire leasehold and fee simple interests in the Caltrans land identified in Exhibit A attached hereto (the "Caltrans Properties") upon which portions of the Project will be constructed. The Caltrans Properties, together with the additional City- owned properties identified in Exhibit A (i.e., portions of Executive Drive, Corporate Drive, etc.) are hereinafter collectively referred to as the "Property." C. To accommodate construction of the Project, Caltrans and City have executed a Right of Entry Agreement (the "Caltrans Right of Entry Agreement") permitting the City and its contractors, consultants and agents to enter upon the Property and perform work related to the Project prior to the conveyance and lease of the Property to City. D. To facilitate the construction and operation of the Project, PCJPB and City have executed a Construction a,nd Maintenance Agreement (the "C&ivi Agreement") regarding the design, construction and maintenance of the Project. E. The purpose of this Agreem~ nt is to provide PCJPB and its contractors, consultants, agents and employees with access to the Property, subject to the Caltrans Right of Entry Agreement, for the purpose of unarm making work related to the Project. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: Grant of Permit. 1.1 Permit. Subject to the terms and conditions set forth in the Caltrans Right of Entry Agreement, and to the extent of the City's rights under the Caltrans Right of Entry Agreement, City hereby grants to PCJPB and its employees, agents, consultants and contractors, a revocable license and permission to enter upon the Property for the 1114025-4 (City's 8-21-08 version) - 3 0 - DRAFT purpose of undertaking work necessary to prepare the Property for development of the Project, including without limitation, the investigation of soil and property conditions, the performance of environmental remediation work, and the performance of demolition, grading, installation of utilities, construction, and any other work related to the Project. PCJPB agrees to fully comply with all of the terms, provisions, conditions and covenants of the Caltrans Right of Entry Agreement and to take. all necessary steps to ensure compliance with such agreement by its employees, agents, consultants and contractors. PCJPB shall have no power to incur any debt, obligation, or liability on behalf of the City. PCJPB shall not, at any time, or in any manner, represent that it or any of its agents or employees are in any manner agents or employees of City 1.2 Insurance. PCJPB shalt at all times during the term of this Agreement carry, maintain and keep in full force and effect insurance in accordance with the requirements set forth in Exhibit B attached hereto and incorporated herein by reference. 1.3 Reports. PCJPB will provide the City with copies of all test data and reports generated or prepared by or behalf of PCJPB with respect to any investigation, remediation, demolition or other activities performed pursuant to this Agreement. 1.4 Liens. PCJPB shall keep the Property free of liens of every character arising from PCJPB's operations hereunder and shall discharge by bond or satisfaction any such lien within ten (10) days after it is filed. City shall have the right to post upon the Property notices of non-responsibility and to record a copy thereof and affidavit of said posting pursuant the California Code of Civil Procedure. 2. Term of Permit. The term of the right of entry granted hereby shall commence on the Effective Date of the Caltrans Right of Entry Agreement and shall continue until the earlier of the completion of the Project. Upon City's acquisition of a fee and/or leasehold interest in the Property, the Parties agree that the term shall be extended so that PCJPB shall have uninterrupted access to the Property for the purposes set forth herein until the completion of the Project. 3. Conditions of Access. The Parties covenant to fully cooperate with each other and with Caltrans so as to avoid interference with the rights hereby conveyed or delay in the work for which PCJPB requires entry. 4. Compliance with Laws. PCJPB and its subcontractors, agents and independent contractors shall comply with all state, federal and local laws, regulations, rules and orders applicable to the work PCJPB performs on the Property, including without limitation, all Environmental Laws. As used herein, the term "Environmental Laws" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) 1114025-4 (City's 8-21-08 version) - 31 - DRAFT exposure of persons, including employees and agents, to Hazardous Materials (as defined below) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, of seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, of seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, ei~ seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code .Section 13000, et seq.], as each of the foregoing now exist or are hereafter amended, together with any regulations promulgated thereunder. ,. As used herein, the term "Hazardous Materials means any material that, because of its quantity, concentration or physical or chemical characteristics, is at any time now or hereafter deemed by any federal, state or local governmental authority to pose a present or potential hazard to public health, welfare or the environment. Hazardous Material includes, without limitation, any material or substance defined as a "hazardous substance," "pollutant," "contaminant" or "waste" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and Recover~y~ Act (42 U.S.C. 6901 et seq.) or pursuant to Section 25316 of the California Health and Safety Code; a "hazardous waste" listed pursuant to Section 25140 of the California Health and Safety Code; any asbestos and asbestos containing materials whether or not such materials are part of the Property or are naturally occurring substances on the Property, and any petroleum, including, without limitation, crude oil or any fraction thereof, natural gas or natural gas liquids. 5. Indemnification. 5.1. City's Indemnity. City shall fully indemnify, hold harmless and defend the PCJPB, SamTrans, the National Railroad Passenger Corporation ("Amtrak"), Union Pacific Railroad Company, and/or their respective officers, directors, employees, contractors and agents (collectively, "PCJPB Indemnitees") from and against all liability, claims, suits, proceedings, sanctions, costs or expenses (including e.g. court 1114025-4 (City's 8-21-08 version) _ 3 2 _ DRAFT costs and attorneys' fees) caused by or arising from personal injuries to or death of any person (including, but not limited to, the passengers, employees and contractors of the PCJPB Indemnitees), and for damage to or loss of property arising out of or resulting from the sole negligence or willful misconduct of City Indemnitees (defined in Section 5.3 below) in performing any obligation under this Agreement or for a breach of this Agreement. City's obligation to defend shall include the payment of all reasonable attorney's fees and all other costs and expenses of suit, and if any judgment is rendered against any PCJPB Indemnitee, City shall, at its expense, satisfy and discharge the same; provided, however, that the PCJPB Indemnitee shall exercise commercially reasonable efforts to timely tender any such claims to the City so as to avoid prejudicing the City's rights and/or abilities to undertake a defense of such a claim. 5.2. City's Indemnity Respecting Hazardous Materials. The City will defend, indemnify and hold the PCJPB Indemnitees harmless from and against all charges, liens, costs, taxes, penalties, claims, actions, proceedings and obligations arising from or related to the presence of any Hazardous Materials on the Property and encountered during PCJPB's activities undertaken pursuant to this Agreement, as well as for all costs arising from or associated with the presence of any Hazardous Materials encountered during the construction of that portion of the pedestrian access underpass, including planting and hardscape at the proposed pedestrian underpass and along Executive Drive (the "Underpass Improvements"), located within the Property at the south end of PCJPB's new station platforms, that will connect the Caltrans Property to Executive Drive ("Underpass") and located within the Property, or implicated in any manner in the construction of the Underpass or Underpass Improvements on the Property or to the relocation of those utilities on the Property that conflict with the construction and contemplated improvements of the Project, except for the specific obligations accepted by the PCJPB pursuant to Section 1(c) of the C&M Agreement. PCJPB agrees that, as part of its construction of the Project, at the Project's expense, PCJPB will excavate any soils required to be excavated in order to construct the Project and will stockpile any such excess soils on the site of such excavation (but not on the Property}, as more particularly described in Section 1.c. of the C&M Agreement. All other costs of responding to the presence of Hazardous Materials on the Property shall be the responsibility of the City to the extent that such responsibility is not undertaken by Caltrans or by a third party' responsible for the disposal or discharge of such Hazardous Materials. The City's obligation? to defend shall include the payment of all reasonable attorney's fees and all other costs and expenses of any action or proceeding, and if any judgment is rendered against the FCJPB Indemnitees or any one of them, City shall, at its expense, promptly satisfy and o;scharge such judgment; provided, however, that the PCJPB Indemnitee shall exercise reasonable efforts to timely tender any such claims to the City so as to avoid prejudicing the City's rights and/or abilities to undertake a defense of such a claim. The City shall have no indemnity obligation hereunder for the presence of any Hazardous Materials encountered on the Property during the construction of the Project which are not reported in writing to the City within ninety (90) days following the date such Hazardous Materials are encountered, nor shall the City have any indemnity obligation hereunder for the 1114025-4 (City's 8-21-08 version) - 3 3 - DRAFT presence of any Hazardous Materials on any part of the Project not within the Property, nor shall the City have any indemnity obligation hereunder for the presence of any Hazardous Materials on the Property which are encountered or discovered following the completion of the construction of the Project. 5.3 PCJPB's Indemnity. PCJPB shall fully indemnify, hold harmless and defend the City and the Redevelopment Agency of the City of South San Francisco ("Agency") and their respective elected and appointed officials, officers, employees, contractors, consultants and agents (all of the foregoing, collectively, the "City Indemnitees") City Indemnitees from and against all liability, claims, suits, sanctions, proceedings, costs or expenses (including e.g. court costs and attorneys fees) caused by or arising from personal injuries to or death of any person (including, but not limited to, passengers, employees and contractors of the City or PCJPB) and for damage to or loss of property arising out of or resulting from any negligent act or omission by the PCJPB or its agents, employees, contractors or subcontractors in performing its obligations under this Agreement or for a breach of this Agreement or arising from the exercise of PCJPB's rights under this Agreement, including but not limited to any environmental investigation or remediation work or the performance of demolition, grading, ,installation of utilities, construction, and any other work related to the Project. PCJPB s obligation to defand shall include the payment of all reasonable attorneys fees and all other costs expenses of suit, and if any judgment is rendered against City Indemnitees or any one of them, PCJPB shall, at its expense, satisfy and discharge the same; provided, however, that the City shall exercise commercially reasonable efforts to timely tender any such claims to the PCJPB so as to avoid prejudicing the PCJPB's rights and/or abilities to undertake a defense of such a claim. 5.4 PCJPB's Indemnity Respecting Hazardous Materials. PCJPB will defend, indemnify and hold the City Indemnitees harmless from and against all charges, liens, costs, taxes, penalties, claims, actions, proceedings and obligations arising from or related to the presence of any Hazardous Materials on that part of the Project not within the Property and encountered during the construction of the Project and the work undertaken by PCJPB pursuant to this Agreement as well as for all costs arising from ~!' associated with the presence of any Hazardous Materials encountered during the construction of that portion of the Underpass Improvements or the Underpass located beyond the boundaries of the Property, or implicated in any manner in the construction of the Underpass or Underpass Improvements beyond the boundaries of the Property or to the relocation of those utilities not located on the Property that conflict with t of construction and contemplated improvements of the Prthatt• ortioln oof the Project responding to the presence of Hazardous Materials on p beyond the boundaries of the Property shall be the responsibility of the PCJPB to the extent that such responsibility is not undertaken by Caltrans or by a third party responsible for the disposal or discharge of such Hazardous Materials. The PCJPB's obligation to defend shall include the payment of all reasonable attorney's fees and all other costs and expenses of any action or proceeding, and if any judgment is rendered PCJPB shall at its expense, promptly against the City Indemnitees or any one of them, satisfy~and discharge such judgment; provided, however, that the City Indemnitees shall 1114025-4 (City's 8-21-08 version) - 34 - DRAFT exercise reasonable efforts to timely tender any such claims to PCJPB so as to avoid prejudicing the PCJPB 's rights and/or abilities to undertake a defense of such a claim. 6. Miscellaneous Provisions. 6.1 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 their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by personal delivery, by certified or registered mail, return receipt requested or by nationally recognized overnight courier. To City: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: To PCJPB: Peninsula Corridor Joint Powers Board 1250 San Carlos Avenue San Carlos, CA 94070 Attention: 6.2 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 attorneys' 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. 6.3 Amendments. This Agreement may be amended only by a written instrument executed by the parties hereto. 6.4 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. 6.5 Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenant or condition, 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. 1114025-4 (City's 8-21-08 version) - 3 5 - DRAFT 6.6 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the successors in interest and assigns of each of the Parties hereto. The Parties acknowledge that the Agency may acquire interests in the Property. In such case, City agrees to assign its rights and obligations under this Agreement and the Caltrans Right of Entry Agreement to Agency. 6.7 Captions; Interpretation. The section headings used herein are solely for convenience and shall not be used to interpret this Agreement. The parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both parties, and the parties agree, that since both parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the parties, but rather according to its fair meaning as a whole, as if both parties had prepared it. 6.8 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. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. CITY OF SOUTH SAN FRANCISCO PCJPB By: City Manager By: Its: Attest: City Clerk APPROVED AS TO FORM: APPROVED AS TO FORM: City Attorney Attorney 1114025-4 (City's 8-21-08 version) - 36 - DRAFT Exhibit A PROPERTY (Attach map and legal description of Property.) 1114025-4 (City's 8-21-08 version) _ 3 ~ _ DRAFT Exhibit B INSURANCE REQUIREMENTS PCJPB shall at all times during the term of this Agreement carry, maintain and keep in full force and effect insurance with an insurance company admitted to do business in California and approved by the City (which approval will not be unreasonably withheld) (1) a policy or policies of comprehensive general liability insurance written on an occurrence basis with minimum limits of $2,000,000 per occurrence limit against any injury, death, loss or damage to property as a result of wrongful or negligent acts by PCJPB, its officers, employees, subcontractors, agents and independent contractors in the performance of services under this Agreement; (2) automotive liability insurance, with minimum combined single limits coverage of $1,000,000; (3) environmental pollution insurance, including Contractors Pollution Liability coverage, with a minimum of $2,000,000 per claim and $2,000,000 aggregate; and (4) worker's compensation insurance with a liability minimum limit of $1,000,000; and (5) such coverage as may be required by the Caltrans Right of Entry Agreement. The City Indemnitees (defined in Section 5.3) shall be added as additional insureds on the policy(ies) as to comprehensive general liability, property damage, and automotive liability coverages. All deductibles shall be borne and paid by PCJPB and not by the City. If any policy has an aggregate limit, the policy aggregate must be at least twice above the required per occurrence limit or the policy must contain a separate aggregate for the project described in this agreement. The policy(ies) as to comprehensive general liability, property damage, automotive liability, and professional liability shall provide that they are primary, and that any insurance maintained by the City shall be excess insurance only and not contribute to loss payments until the above-mentioned policies (and any other contribution coverages) have been exhausted. All insurance policies required by this Section shall be obtained from insurance companies admitted in the State of California and rated at least "A-VII" in Best's Insurance Guide. All insurance policies required hereunder shall be kept in force throughout the term of this Agreement. PCJPB agrees that it will not cancel, reduce or otherwise materially modify the insurance coverage. All insurance policies shall provide that the insurance coverage shall not be non-renewed, canceled, reduced, or otherwise materially modified (except through the addition of an insured to the policy) by the insurance carrier without the insurance carrier giving City thirty (30) days prior written notice thereof. PCJPB shall submit to the City insurance certificates indicating compliance with the minimum worker's compensation insurance requirements above, and (ii) insurance policy endorsements indicating compliance with all other minimum insurance requirements above prior to beginning of performance under this Agreement. 1114025-4 (City's 8-21-08 version) _ 3 $ _ Draft 8-11-2008 Revised 12-3-08 SM-] 01-PM 22.0 AGREEMENT FOR MAINTENANCE OF PEDESTRIAN UNDERPASS TO SOUTH SAN FRANCISCO CALTRAIN STATION IN THE CITY OF SOUTH SAN FRANCISCO This Agreement for Maintenance of Pedestrian Underpass to South San Francisco Caltrain Station in the City of South San Francisco (this "Maintenance Agreement") is made and entered into effective as of this day of , 2008 ("Effective Date") by and between the State of California, acting by and through its Department of Transportation hereinafter referred to as "STATE" and the City of South San Francisco, hereinafter referred to as "CITY". STATE and CITY are hereinafter collectively referred to as the "PARTIES." WITNESSETH: A. WHEREAS, the PARTIES and the Peninsula Corridor Joint Powers Board entered into that certain Cooperative Agreement No 4-:2170 dated as of 20_ (the "Cooperative Agreement") regarding the construction of the portion of the Pedestrian Underpass (the "PUP") within STATE'S right of way that connects the east and west sides of the Caltrain Station from Airport Boulevard to East Grand Avenue at Route 101 in the CITY (herein referred to as the "PROJECT"); and B. WHEREAS, in accordance with Section I Article 44 of the Cooperative Agreement, upon PROJECT completion, CITY will maintain and own the PROJECT installed within and outside the STATE right of way; and C. WHEREAS, in accordance with Section II Article 1 of the Cooperative Agreement, CITY and STATE will enter into a maintenance agreement prior to advertisement of construction for PROJECT; and D. WHEREAS, the PARTIES hereto mutually desire to clarify the division of maintenance responsibility, as defined in Section 27 of the California Streets and Highways Code, and their respective responsibilities as to the PUP constructed pursuant to the Cooperative Agreement. NOW THEREFORE, IT IS AGREED: 1. Exhibit A, attached hereto and incorporated herein by reference, consists of plan drawings that delineate the areas within STATE right of way, which are the responsibility of CITY to maintain in accordance with this Maintenance Agreement (hereinafter referred to as the "CITY MAINTAINED AREAS"). 2. To perform CITY maintenance responsibilities, CITY must obtain the necessary Encroachment Permit from STATE'S District 4 Encroachment Permit Office prior to entering any STATE right of way other than the CITY MAINTAINED ] l~ss92-2 - 3 9 - Draft 8-11-2008 Revised 12-3-08 SM-IOI-PM 22.0 AREAS. Encroachment Permits will not be required for City entry into the CITY MAINTAINED AREAS. 3. PEDESTRIAN UNDERPASS ACCESS RAMP N0.3 AREA (Airport Boulevard Side) CITY, at CITY expense, will maintain all facilities installed within the CITY MAINTAINED AREAS, including, but not limited to, ramp structure, pavements, fencing and lightings. CITY, at CITY expense, will be responsible for debris and graffiti removal within the CITY MAINTAINED AREAS, provided however, CITY shall not be responsible for graffiti removal from the surface of the freeway structures. RAMP NO. 1 AND STAIR NO. 1 AREA (East Grand Avenue Side) CITY, at CITY expense, will maintain the planter and landscaping installed within State right of way. 4. LEGAL RELATIONS AND RESPONSIBILITIES: 4.1 Nothing within the provisions of this Maintenance Agreement is intended to create duties or obligations to or rights in third parties not parties to this Maintenance Agreement or to affect the legal liability of a PARTY by imposing any standard of care with respect to the operation and maintenance of STATE highways and local facilities different from the standard of care imposed by law. 4.2 Neither CITY nor any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by STATE, under or in connection with any work, authority or jurisdiction conferred upon STATE arising under this Maintenance Agreement. It is understood and agreed that STATE shall fully defend, indemnify and save harmless CITY and all of its officers and employees from all claims, suits or actions of every name, kind and description brought forth under, including, but not limited to, tortious, contractual, inverse condemnation and other theories or assertions of liability occurring by reason of anything done or omitted to be done by STATE under this Maintenance Agreement. 4.3 Neither STATE nor any officer or employee thereof is responsible for any injury, damage or liability occurring by reason of anything done or omitted to be done by CITY, under or in connection with any work, authority or jurisdiction conferred upon CITY and arising under this 1175892-2 - 4 0 - Draft 8-11-2008 SM-101-PM 22.0 Revised 12-3-08 Maintenance Agreement. It is understood and agreed that f is off celrs~and defend, indemnify and save harmless actions of every name, kind and employees from all claims, suits or description brought forth under, including, but not limited to, tortious, contractual, inverse condemnation or other theories or to be done by liability occurring by reason of anything done or omitted CITY under this Maintenance Agreement. 5. EFFECTIVE DATE This Maintenance Agreement shall be effective upon the date apps gringo d d face, it being understood and agreed, however, that, except as exp y p for in this Maintenance Agreement, execution of this Maintenance Agreement shall not affect any preexisting obligations of CITY to maintain of eement~with freeway, highway or road areas pursuant to prior wntten agr STATE. IN WITNESS WHEREOF, the PARTIES have executed this Maintenance Agreement as of the date first above written. CITY OF SOUTH SAN FRANCISCO STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION By: City Manager Attest: By: WILL KEMPTON Director of Transportation By: City Clerk NADER ESHGHIPOUR District 4 -Deputy District Director Maintenance ,Approved as to form: City Attorney 1175892-2 - 4 1 -