HomeMy WebLinkAbout2015-02-10; City Council; 21857; Agreement Vista Reaches VC11B VC15 Vista-Carlsbad Interceptor Sewer System 3492 3886 3949AB# 21.857
MTG. 2/10/15
CITY OF CARLSBAD - AGENDA BILL
20
DEPT. PW-UTIL
APPROVAL OF AGREEMENT WITH THE CITY OF VISTA FOR
THE CONSTRCUCTION OF REACHES VCllB - VC15 OF THE
VISTA-CARLSBAD INTERCEPTOR SEWER SYSTEM
PROJECT NOS. 3492, 3886, AND 3949
DEPT. DIRECTOR
CITY ATTY.
CITY MGR.
RECOMMENDED ACTION:
Adopt Resolution No. 2015-039to approve and authorize a Project Agreement between the City of
Carlsbad and the City of Vista for funding construction phase services for the Agua Hedionda Sewer Lift
Station and Vista/Carlsbad Interceptor Sewer, Reaches VCllB - VC15, Project Nos. 3492, 3886, and
3949.
ITEM EXPLANATION:
Background
The Vista/Carlsbad Interceptor Sewer was constructed in the early 1960's and extends northeasterly
from the Encina Water Pollution Control Facility to the City of Vista (Exhibit 2). This interceptor sewer is
identified as pipeline Reaches VCl through VC15 and includes the Buena Vista and Agua Hedionda sewer
lift stations. The City of Vista and the City of Carlsbad have previously entered into an agreement for the
ownership, operation, and maintenance of the Vista/Carlsbad Interceptor Sewer. The ownership
agreement requires the preparation of a project agreement each time a portion ofthe interceptor sewer
system is in need of rehabilitation, replacement or upsizing.
Project Description
This project includes improvements to reaches VCllB through VC15 ofthe Vista/Carlsbad interceptor
sewer system that includes the Agua Hedionda Sewer Lift Station, an adjacent wood trestle bridge
supporting the sewer across Agua Hedionda Lagoon and approximately 2-miles of sewer pipeline. The
Agua Hedionda Sewer Lift Station is the City's largest sewer lift station and is located adjacent to the
lagoon and railroad tracks on property owned by NRG Energy. This portion ofthe interceptor sewer has
been identified for replacement in the sewer master plans for both Carlsbad and Vista and is included in
the current Capital Improvement Program.
A Project Agreement has been prepared by the City of Carlsbad and the City of Vista that defines the
role of each agency during the project and also includes estimated project costs and payment provisions
(Exhibit 3).
DEPARTMENT CONTACT: Terry Smith 760-603-7354 terry.smith@carlsbadca.gov
FOR SECRETARY USE.
BOARD ACTION: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF •
WITHDRAWN • OTHER - SEE MINUTES •
AMENDED • REPORT RECEIVED •
Vista-Carlsbad Interceptor Sewer System
January 27, 2015
Page 2 of 2
FISCAL IMPACT:
The City of Vista and the City of Carlsbad entered into an agreement for the ownership, operation, and
maintenance of the Vista/Carlsbad Interceptor Sewer on February 26, 2002, which was most recently
amended on May 20, 2014. In accordance with the terms of the ownership agreement, a Project
Agreement has been developed for the construction of the project that identifies the roles for both
Carlsbad and Vista, an estimate of project costs, and the provisions for payment. As identified in the
ownership agreement, project costs will be shared by each city in accordance with their percentage
ownership, which varies by reach. Total project costs are estimated to be approximately $56.7 million.
Carlsbad's share ofthe construction costs are 30.9% for reaches VCllB to VC13 and 43.9% for reaches
VC14 and VC15, while Vista is responsible for 69.1% and 56.1% respectively. Vista's portion of the
estimated project costs are approximately $36.7 million. Carlsbad's share ofthe project is funded from
the Sewer Connection Fee Fund and the City of Vista will be using State Revolving Funds to pay for their
portion ofthe project.
As agreed upon in the Project Agreement, Vista will make an initial payment to Carlsbad in the amount
of $2,112,654 within 30 days of receipt of invoice from Carlsbad as a deposit to be applied towards
construction costs and construction management services. Staff will invoice the City of Vista upon
Council approval ofthe project agreement. Subsequent to the initial payment, Carlsbad will invoice Vista
monthly for their share of on-going expenses through the completion of construction.
ENVIRONMENTAL IMPACT:
A Mitigated Negative Declaration (MND) and Mitigation Monitoring and Reporting Program (MMRP)
were prepared for the Agua Hedionda Sewer Lift Station, Force Main and Gravity Sewer Replacement
project (PDP 00-02(C)/SP 144(L)/RP 10-26/CDP 10-17/HDP 10-05/SUP 10-02/HMP 10-03). The MND was
adopted by the City Council on December 6, 2011, in compliance with the California Environmental
Quality Act (CEQA) Guidelines Section 15074.
PUBLIC NOTIFICATION:
None required.
EXHIBITS:
1. Resolution No. 2015-039 to approve and authorize a Project Agreement between the City
of Carlsbad and the City of Vista for funding construction phase services for the Agua Hedionda
Sewer Lift Station and Vista/Carlsbad Interceptor Sewer, Reaches VCllB-VC15, Project No. 3492,
3886 and 3949.
2. Location Map
3. Project Agreement for Construction of the Agua Hedionda Sewer Lift Station and Vista/Carlsbad
Interceptor Sewer, Reaches VCllB - VC15, Project No. 3492, 3886, and 3949.
EXHIBIT I
1 RESOLUTION NO. 2015-039
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2 A RESOLUTION QF THE CITY COUNCIL QF THE CITY QF CARLSBAD,
CALIFORNIA, TQ APPROVE AND AUTHORIZE A PROJECT
AGREEMENT BETWEEN THE CITY OF CARLSBAD AND THE CITY QF
4 VISTA FQR FUNDING QF CONSTRUCTION PHASE SERVICES FOR THE
AGUA HEDIONDA SEWER LIFT STATION AND VISTA/CARLSBAD
5 INTERCEPTOR SEWER, REACHES VCllB-VC15, PROJECT NO. 3492,
3886, AND 3949.
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8 WHEREAS, the Agua Hedionda Sewer Lift Station and Reaches VCllB through VC15 ofthe
^ Vista Carlsbad Interceptor Sewer have been identified for replacement in the current sewer
10 ..
master plan; and
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WHEREAS, the Cities of Carlsbad and Vista jointly own the Agua Hedionda Lift Station and
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the Vista Carlsbad Interceptor Sewer and entered into an "Ownership Agreement" dated
14 February 26, 2002 and most recently amended on May 20, 2014, and
15 WHEREAS, the Ownership Agreement requires a separate "Project Agreement" to be
prepared and executed by Vista and Carlsbad for all future improvements to the Vista Carlsbad
Interceptor Sewer; and
WHEREAS, staff from Carlsbad and Vista have prepared a Project Agreement for the
Construction of the Agua Hedionda Sewer Lift Station and Vista/Carlsbad Interceptor Sewer,
21 Reaches VC11B-VC15; and
22 WHEREAS, the City Council ofthe City of Carlsbad, California, has determined it necessary
and in the public interest for the City of Carlsbad to enter into the Project Agreement between
the City of Carlsbad and the City of Vista for the construction phase services for the Agua
Hedionda Sewer Lift Station and Vista/Carlsbad Interceptor Sewer, Reaches VCllB - VC15,
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27 Project No. 3492, 3886 and 3949;
28 3
1 NOW, THEREFORE, BE IT RESOLVED by the City Council ofthe City of Carlsbad, California,
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as follows:
1. That the above recitations are true and correct.
2. That the Mayor of the City of Carlsbad is hereby authorized and directed to
execute the Project Agreement with the City of Vista for construction phase services for the Agua
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7 Hedionda Sewer Lift Station and Vista/Carlsbad Interceptor Sewer, Reaches VCllB - VC15
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PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City
of Carlsbad on the 10*^ day of February, 2015, by the following vote to wit:
AYES:
NOES:
Council Members Hall, Blackburn, Schumacher, Wood, Packard.
None.
ABSENT: None.
n^j.//////
MATT HALL, Mayor
ATTEST:
(SEAL)
LOCATION MAP
BUENA VISTA
LIFT STATION VISTA
METER STATION
EXISTING
AGUA HEDIONDA
LIFT STATION
LEGEND:
VC11B-VC15
VC1-VC11A
ENCINA WATER POLLUTION
CONTROL FACILITY
PROJECT NAME
AGUA HEDIONDA LIFT STATION & VISTA/CARLSBAD
INTERCEPTOR SEWER REACHES VC11B THROUGH VC15
PROJECT NUMBER
3492,
3886 & 3949
EXHIBIT
2
DRAWN BY: SCOTT EVANS: CARiSBAD UVUVES DEPT, 1/1i/U C:\UVUVES DEPMTMENT\L0CAVON UAPS\AHLS & VCnB-m5.DVIG
PROJECT AGREEMENT FOR
CONSTRUCTION OF THE AGUA HEDIONDA SEWER LIFT STATION AND
VISTA/CARLSBAD INTERCEPTOR SEWER, REACHES VCllB - VC15
THIS AGREEMENT for the Construction of the Agua Hedionda Sewer Lift Station and
Vista/Carlsbad Interceptor Sewer, Reaches VCl IB - VCl5 ("Agreement") is made and entered
into as of the 10th day of February , 20 15, by and between the City of Vista,
a charter city ("Vista"), and the City of Carlsbad, a charter city ("Carlsbad"), collectively,
("the Parties").
RECITALS
WHEREAS, on February 26, 2002, the Parties entered into an agreement for the
ownership, operation and maintenance of the Vista/Carlsbad Interceptor Sewer ("Ownership
Agreement"), the terms of which are incorporated herein by this reference; and
WHEREAS, on June 11, 2013, the Parties amended the Ownership Agreement and
developed the Amended and Restated Agreement for ownership, operation, and maintenance of
the Vista/Carlsbad Interceptor Sewer; and
WHEREAS, on May 20, 2014, the Parties executed the first amendment and agreed to
extend the term of the Amended and Restated Ownership Agreement; and
WHEREAS, the existing Agua Hedionda Sewer Lift Station and Vista/Carlsbad
Interceptor Sewer was built in the early 1960's and does not have adequate capacity to convey the
sewage flows projected for this basin; and
WHEREAS, the Sewer Master Plans for the Parties includes a recommendation that the
Agua Hedionda Sewer Lift Station and reaches VCl IB - VCl 5 of the Vista/Carlsbad Interceptor
Sewer be replaced with larger pipes and pumps to increase the capacity necessary to convey future
sewer flows; and
WHEREAS, on October 13, 2011, the Parties entered into an agreement for the Planning
and Design Phase Services for the Agua Hedionda Sewer Lift Station and Vista/Carlsbad
Interceptor Sewer, Reaches VCl IB - VCl5; and
WHEREAS, Carlsbad has completed the design for the replacement of the Agua Hedionda
Sewer Lift Station and reaches VC 11B - VCl 5 of the Vista/Carlsbad Interceptor Sewer; and
WHEREAS, the Parties are entering into this Agreement in order to establish the
responsibilities of each Party during construction, revise their respective share of the design and
construction phase costs, and revise the cost accounting procedures and payment schedule of the
October 13, 2011 agreement.
NOW THEREFORE, THE PARTIES HERETO AGREE TO THE FOLLOWING:
00017681 V. 6 - I - 1/8/2015
SECTION 1. PROJECT DESCRIPTION
The Agua Hedionda Sewer Lift Station and Vista/Carlsbad Interceptor Sewer, Reaches
VCllB - VCI5 (the "Project") is a sewer project that will replace existing facilities to increase
the capacity and improve the reliability within the lower portion ofthe Vista/Carlsbad Interceptor
Sewer System. The Project begins at the north shore of the Agua Hedionda Lagoon and extends
southerly a distance of approximately 2.3-miles to the Encina Water Pollution Control Facility, as
shown on Exhibit "A". The major elements of the Project are defined in the September 2008
Preliminary Design Report and are summarized as follows:
A. Replace the existing wood trestle sewer bridge across Agua Hedionda Lagoon with
a new steel support bridge that will clear span the existing channel, being approximately 140-feet
in length. The new sewer support bridge will be designed to allow lightweight maintenance
vehicles to pass over the bridge to allow for access to the interceptor sewer north ofthe lagoon,
which will allow for improved inspection and maintenance capabilities as well as improved
emergency response. In addition, the Project will replace approximately 1400 linear feet of existing
42-inch sewer pipe with a 54-inch diameter pipe. The Project will relocate a portion of an existing
12-inch high pressure gas line that conflicts with the proposed northerly abutment ofthe new
bridge. The existing sewer support bridge will be removed as part ofthe Project.
B. Construct a new sewer lift station at a location adjacent to the existing lift station
on the south shore of Agua Hedionda Lagoon. The lift station will be capable of conveying the
ultimate peak wet weather sewage flows for the basin, identified as 33 mgd in the current master
plans. In addition to the structure containing the pumps and motors, the lift station will also have
standby pumps, an emergency generator, a grinder vault, electrical control building and odor
control facilifies. The facility will be designed to comply with local and resource agency permit
requirements, including the Califomia Coastal Commission. The existing lift station facility will
be removed at the completion of the Project.
C. Construct a new force main and gravity sewer that will operate In parallel to the
existing 42-inch diameter gravity sewer, providing increased system reliability. The new force
main will be approximately 4000 linear feet of 30-inch diameter pipe and will be manufactured
from High Density Polyethylene (HDPE). The force main will discharge into a new 54-inch
diameter gravity sewer that will be constructed in Avenida Encinas, being approximately 7000-
feet in length, extending from Cannon Road to the Encina Water Pollution Control Facility. These
pipelines will be installed using several different methods of construction, including open-trench
excavation with shoring, horizontal directional drilling (HDD) and microtunneling.
D. Carlsbad has acquired all necessary easements and permits required to construct
and maintain the facility. Easements were secured from the North County Transit District, Cabrillo
Power (a.k.a., NRG Energy) and San Diego Gas & Electric. Carlsbad has completed the
environmental compliance document in compliance with CEQA requirements and the Carlsbad
City Council has adopted the document.
E. The Project will remove the existing emergency over fiow basin since Vista has
purchased and constructed emergency standby diesel driven pumps ("Standby Pumps") that will
00017681V. 6 -2- 1/8/2015
automatically tum on in the event the existing lift station experiences a failure. The Standby
Pumps can bypass the flows around the existing lift station. Vista will remove the Standby Pumps
and reinstall them at other Vista properties following the completion of the Project and
demonstration of its successful operation.
F. Carlsbad has hired Arcadis and MJS Consulting to be the Construction Manager
for the Project and will also perform the materials testing, special inspection, geotechnical testing,
and coordination of environmental monitoring.
G. Exhibit B is a Project Budget and cost allocation jointly prepared by the Parties.
The total cost of the Project, and the amount of the constmction contract award, shall not exceed
the Project Budget without the written consent of both Parties.
SECTION 2. JOINT RESPONSIBILITIES OF THE PARTIES
A. The Parties shall designate an Owner's Representative for the Project. Each
Parties' Owner's Representative shall be the sole contact and spokesperson with respect to all
matter's requiring the Parties approval or authorization.
B. Owner's Representatives shall not provide direction or instructions directly to the
Contractor. The Construction Manager shall provide all direction and instmctions to the
Contractor after both of the Owner's Representatives mutually agree. If each Parties' Owner's
Representative cannot agree on an issue, then Section 21 of the Ownership Agreement shall be
followed as a procedure for dispute resolution.
C. Owner's Representatives shall attend a regular Owner's Meeting with the
Constmction Manager. The Owner's meetings shall be held bi-weekly at a minimum. If an
Owner's Representative does not attend the Owner's Meeting a minimum of 80% of the meetings
to date, then the applicable Party shall replace the Owner's Representative. A representative of
the Encina Wastewater Authority, which operates and maintains the existing lift station, may also
attend the Owner's Meeting so that all coordination issues are resolved before any instmctions are
given to the Contractor.
D. Neither Party shall charge the other for staff services except as provided in
Section 5 of this Agreement.
SECTION 3. RESPONSIBILITIES OF CARLSBAD
A. Carlsbad shall be the Lead Agency for the Project and will be responsible for the
environmental compliance, bidding and administration of construction activities, including fiscal
management for the Project. As part of its construction administration duties, Carlsbad shall
require its contractor to comply with all Resource Agency requirements, including the stormwater
management and other requirements of the State Water Resources Control Board.
B. As Lead Agency, Carlsbad shall have sole authority to approve, bid, and award
contracts in accordance with this Agreement, Carlsbad's policies and applicable law, subject to the
provisions of Section 6. Carlsbad's purchasing policies shall apply to implementation and
00017681V. 6 -3- 1/8/2015
performance of the construcfion contract, professional services agreements and any other activity
under this Agreement.
C. Carlsbad shall bid the Project in accordance with State Revolving Funds (SRF)
requirements. Carlsbad shall provide Vista with all supporting documents to fulfill Vista's
obligations with its SRF loan.
D. Carlsbad shall pay $239,503 to Vista for the installation cost of Standby Pumps to
be placed at the Agua Hedionda Lift Station (AHLS) by Vista to provide emergency pumping
capability until the new lift station is constructed and operational. The payment covers Carlsbad's
share of design and constmction costs in accordance with Carlsbad's ownership allocation of
30.9%. Furthermore, Carlsbad agrees to pay Vista a lump sum of $131,544 in consideration for
Vista's provision of the Standby Pumps. Vista shall invoice Carlsbad upon execution of this
Agreement and Carlsbad shall pay invoice within thirty (30) days of receipt of invoice from Vista.
E. Change Orders. The Parties shall jointly approve all change orders necessary to
construct the Project. Change orders for the Project may be initiated by Vista or Carlsbad, but
shall not be issued to the contractor unless approved by both Parties. Each Party shall respond to
Change Order requests within two (2) working days and shall not unreasonably delay, condition,
or deny the approval of any change order. Change order costs will be shared by the Parties in
proportion to their capacity ownership defined herein to the extent that the change order is
necessary and beneficial for both Parties. Vista shall participate with Carlsbad in the negotiation
of price and/or time extensions related to any change order with the Project contractor (i) at
Carlsbad's request, (ii) at Vista's option in the case of change orders requested by Vista, or (iii) in
the case of a change order that may reasonably be anticipated to affect the overall Project Budget.
Carlsbad Initiated Change Order. In those instances where Carlsbad requests a change
order, Carlsbad shall submit a written request for changes to Vista for Vista's written
approval. Such changes, once approved by Vista, shall be paid for in accordance with the
ownership allocation, provided the Carlsbad initiated changes are necessary to complete
the Project. If the Carlsbad initiated change order is solely for Carlsbad's benefit, then
Carlsbad shall be solely responsible for the cost of the change order, including but not
limited to any increased costs resulting from the implementation of the change order.
Vista Initiated Change Order. In those instances where Vista requests a change order. Vista
shall submit a written request for changes to Carlsbad for Carlsbad's written approval.
Such changes once approved by Carlsbad, shall be paid for in accordance with the
ownership allocation, provided the Vista initiated changes are necessary to complete the
Project. If the Vista initiated change order is solely for Vista's benefit, then Vista shall be
solely responsible for the cost of the change order, including but not limited to any
increased costs resulting from the implementation of the change order.
SECTION 4. RESPONSIBILITIES OF VISTA
A. Vista shall provide a payment of $2,112,654 to Carlsbad within thirty (30) days of
the approval to advertise to receive bids for construction from Carlsbad City Council. The payment
covers Vista's share of unpaid design costs (planning, invesfigations, design, environmental) to
00017681V. 6 -4- 1/8/2015
date plus 5% of Vista's share of the construction and constmction management costs as detailed
on Exhibit "B" ("Vista Payment"). Further, Vista shall make monthly progress payments for
completed work within thirty (30) days of receipt of invoice from Carlsbad. The Parties agree that
the spreadsheet attached hereto as Exhibit "B" is a fair estimate of the costs subject to
modifications through the award of contract or change orders. Vista shall review final accounting
and make payment to Carlsbad within thirty (30) days of final reimbursement request. The Vista
Payment shall be credited toward the final monthly progress payments and the final reimbursement
request.
B. Vista agrees to perform the clearing of vegetation from the Agua Hedionda Lift
Station site and said clearing shall be performed outside the nesting season of protected species as
defined in the Project CEQA document and permits. The cost of the clearing operation is estimated
to be $97,300 and Carlsbad agrees to pay Vista 30.9% of the actual cost in accordance with
Carlsbad's ownership allocation.
SECTION 5. ALLOCATION OF COSTS
A. Allocation of Project costs are defined in the Ownership Agreement and shown in
Exhibit "B". Construction cost shares varies by reach and shall be allocated to each Party in
accordance with Exhibit "B". All other Project costs shall be shared as follows: 65% Vista, 35%
Carlsbad. Constmction costs shall include the constmction contract and necessary and mutually
approved change orders.
B. Vista shall pay its allocated portion of the cost of all contracted constmction support
services, such as, but not limited to, constmction management and inspection, support from the
design engineer, construction materials testing, special inspection, geotechnical testing,
paleontological and environmental monitoring. Vista also agrees to pay Carlsbad a 5% mark-up
on all contracted construction support services in consideration for Constmction Administration
and Management services otherwise provided by Carlsbad. The payment for contracted
construction support services shall be understood to cover all project management, contract
administration, engineering staff design review, and supplemental constmction inspection,
accounting and any other Project-related services that are performed by Carlsbad staff
SECTION 6. COST ACCOUNTING
A. Carlsbad shall be responsible for the administration and accounting of all
expenditures related to the construction of the Project. The Parties agree that Vista will pay its
allocated portion of in actual and estimated costs shown in Exhibit "B" to Carlsbad per Section 4.
Final accounting of the costs will be made after the Notice of Completion is filed. Carlsbad will
issue a final invoice, or reimburse excess remaining flinds, to Vista at that time.
B. Vista is funding the Project through a loan from the State Revolving Fund ("SRF").
Vista has provided Carlsbad with all bidding, awarding, and constmction management
requirements set forth in the SRF funding agreements (Exhibit "C"). Carlsbad's administration of
the Project shall comply fully with the SRF requirements, and Carlsbad shall provide Vista with
all documentation necessary to comply with its obligations under those requirements.
00017681 V. 6 -5- 1/8/2015
SECTION 7. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which, taken together, shall constitute one and the same instrument.
SECTION 7. EXHIBITS
All documents referenced as Exhibits in this Agreement are incorporated herein by
reference.
SECTION 9. ENTIRE AGREEMENT
This Agreement, together with any other written document referred to, embody the entire
agreement and understanding between the Parties relating to the subject matter hereof. In case of
confiict between this Agreement and the Ownership Agreement, the terms of the Ownership
Agreement shall prevail.
IN WITNESS WHEREOF, each Party hereto has pursuant to resolution duly passed and
adopted by its respective goveming body approved this Agreement and caused it to be executed
and be effective on the date first above written.
CITY OF VISTA, a chartered municipal
corporation.
By:
JUDY ER, Mayor
ATTEST:
MARCI KILIAN, City Clerk
APPROVED AS TO FORM:
DAROLD PIEPER, City Attomey
APPROVED Darold Pieper
1054 010815
CITY OF CARLSBAD, a chartered
municipal corporation
By: --^^y/^^/^jy MATT HALL, Mayor
ATTEST:
BARBARA ENGLESON, City Clerk
APPROVED AS TB FORM:
CELIA A. BREWER, City Attorney
00017681 V. 6 6-1/8/2015
EXHIBIT A - LOCATION MAP
LAGOON BRIDGi
VC11B
AQUA HEDIONDA
LIFT STATION
VC12
LEGEND:
VC11B-VC15
VC1-VC11A
END PROJECT AT ENCINA WATER POLLUTION
CONTROL FACILITY^
PROJECT NAME
AGUA HEDIONDA LIFT STATION & VISTA/CARLSBAD
INTECEPTOR SEWER REACHES VC11B THROUGH VC15
PROJECT NUMBER
CP3492,
3886 & 3949
EXHIBIT
A
DRAm BY: SCOTT EVANS: CARLSBAD UTIUTCS DEPT. J/13/U C: \UTkJTIES DEPARTUENT\pESIGN 0(WSKJN\SH«7H\VC»-(5 LOCAVON UAP.DWG
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Clean Water
CITY OF VISTA
AND
CALIFORNIA STATE WATER RESOURCES CONTROL BOARD
Water Boards
INSTALLMENT SALE AGREEMENT
PUBLICLY OWNED TREATMENT WORKS (POTW) CONSTRUCTION FINANCING
VISTA/CARLSBAD INTERCEPTOR AND AGUA HEDIONDA PUMP STATION
REPLACEMENT PROJECT
CLEAN WATER STATE REVOLVING FUND PROJECT NO. C-06-7847-110
AGREEMENT NO. 13-843-550
AMOUNT: $21,991,869
START DATE: MAY 2, 2014
END TERM DATE: AUGUST 1, 2036
DATED AS OF MAY 2, 2014
THIS PAGE INTENTIONALLY LEFT BLANK
THIS PAGE INTENTIONALLY LEFT BLANK
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
1.1 Definitions 1
1.2 Exhibits and Appendices Incorporated 4
ARTICLE II REPRESENTATIONS, WARRANTIES, AND COMMITMENTS 4
2.1 General Recipient Commitments 4
2.2 Authorization and Validity 4
2.3 Violations 4
2.4 Litigation 4
2.5 Solvency 5
2.6 Legal Status and Eligibility 5
2.7 Financial Statements 5
2.8 Completion of Project 5
2.9 Project Completion Report 5
2.10 Award of Construction Contracts 5
2.11 Notice 6
2.12 Findings and Challenge 7
2.13 Project Access 7
2.14 Project Completion; Initiation of Operations 7
2.15 Continuous Use of Project; Lease or Disposal of Project 8
2.16 Reports 8
2.17 Federal Disadvantaged Business Enterprise (DBE) Reporting 8
2.18 Records 8
2.19 Audit 9
2.20 Signage 9
ARTICLE III FINANCING PROVISIONS 10
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
3.1 Purchase and Sale of Project 10
3.2 Amounts Payable by the Recipient 10
3.3 Obligation Absolute 12
3.4 No Obligation of the State 12
3.5 Disbursement of Project Funds; Availability of Funds 12
3.6 Withholding of Disbursements 13
3.7 Pledge; Rates, Fees and Charges; Additional Debt 13
3.8 Financial Management System and Standards 14
3.9 Accounting and Auditing Standards 15
3.10 Federal or State Assistance 15
ARTICLE IV TAX COVENANTS 15
4.1 Purpose 15
4.2 Tax Covenant 15
4.3 Governmental Unit 15
4.4 Financing of a Capital Project 15
4.5 Ownership and Operation of Project 15
4.6 Temporary Period 16
4.7 Working Capital 16
4.8 Expenditure of Proceeds 16
4.9 Private Use and Private Payments 16
4.10 No Sale, Lease or Private Operation of the Project 17
4.11 No Disproportionate or Unrelated Use 17
4.12 Management and Service Contracts 17
4.13 No Disposition of Financed Property 19
4.14 Useful Life of Project 19
4.15 Installment Payments 19
4.16 No Other Replacement Proceeds 19
4.17 No Sinking or Pledged Fund 19
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
4.18 Reserve Amount 20
4.19 Reimbursement Resolution 20
4.20 Reimbursement Expenditures 20
4.21 Change in Use of the Project 20
4.22 Rebate Obligations 20
4.23 No Federal Guarantee 20
4.24 No Notices or Inquiries From IRS 21
4.25 Amendments 21
4.26 Application 21
4.27 Reasonable Expectations 21
ARTICLE V MISCELLANEOUS PROVISIONS 21
5.1 Covenants 21
5.2 Assignability 22
5.3 State Reviews and Indemnification 22
5.4 Termination; Immediate Repayment; Interest 22
5.5 Income Restrictions 23
5.6 Prevailing Wages 23
5.7 Timeliness 23
5.8 Governing Law 23
5.9 Amendment 23
5.10 Bonding 23
5.11 Compliance with Law, Regulations, etc 23
5.12 Conflict of Interest 24
5.13 Damages for Breach Affecting Tax Exempt Status or Federal Compliance 24
5.14 Disputes 24
5.15 Independent Actor 25
5.16 Non-Discrimination Clause 25
5.17 No Third Party Rights 25
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
5.18 Operation and Maintenance; Insurance 25
5.19 Permits, Subcontracting, and Remedies 26
5.20 Recipient's Responsibility for Work 26
5.21 Related Litigation 26
5.22 Rights in Data 26
5.23 State Water Board Action; Costs and Attorney Fees. 26
5.24 Unenforceable Provision 26
5.25 Useful Life 27
5.26 Venue 27
5.27 Waiver and Rights of the State Water Board 27
EXHIBIT A - SCOPE OF WORK & INCORPORATED DOCUMENTS
EXHIBIT A-FBA -FINAL BUDGET APPROVAL
EXHIBIT B - PROJECT FINANCING AMOUNT
EXHIBIT C - CWSRF PAYMENT SCHEDULE
EXHIBIT D - SPECIAL CONDITIONS
EXHIBIT E - FEDERAL CONDITIONS & CROSS-CUTTERS
EXHIBIT F - SCHEDULE OF MATERIAL OBLIGATIONS
EXHIBIT G - DAVIS-BACON REQUIREMENTS
EXHIBIT H - MATERIAL LITIGATION, INVESTIGATIONS, AUDITS
IV
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
This Installment Sale Agreement, including all exhibits and attachments hereto, (Agreement) is dated as
of the date set forth on the first page of this Agreement, by and between the State Water Resources
Control Board, an administrative and regulatory agency of the State of California (State Water Board),
and the local government entity identified on the first page of this Agreement, duly organized and existing
under the laws of the State of California (Recipient):
WITNESSETH:
WHEREAS the United States of America, pursuant to Title VI of the federal Water Pollution Control Act as
such has been and may be amended from time to time (Clean Water Act), requires each State to
establish a water pollution control revolving fund to be administered by an instrumentality ofthe State as
a condition to receipt of capitalization grants under the Clean Water Act; and
WHEREAS the State of California (State) has established a Clean Water State Revolving Fund (CWSRF)
pursuant to Chapter 6.5 of Division 7 of the California Water Code (State Act) to be used for purposes of
the Clean Water Act; and
WHEREAS the State Water Board is the state agency authorized to administer the CWSRF and provide
financial assistance from the CWSRF to recipients for the construction of eligible projects, as provided in
the State Act; and
WHEREAS the State Water Board determines Project eligibility for financial assistance from the CWSRF,
pursuant to the Clean Water Act and the State Act, determines a reasonable schedule for financing and
construction of projects, ensures compliance with the Clean Water Act, and establishes the terms and
conditions of an applicable financing agreement; and
WHEREAS the Recipient has applied to the State Water Board for financial assistance from the CWSRF,
for the purpose of financing or refinancing the Project described below, and the State Water Board has
reviewed and approved said application; and
WHEREAS the Recipient has or will incur costs incurred in connection with, the planning, design,
acquisition, construction, and installation ofthe Project described in Exhibit A and Exhibit A-FBA hereto;
and
WHEREAS on the basis of the Recipient's application and the representations and warranties set foilh
herein, the State Water Board proposes to assist in financing the costs of the Project and/or to refund
outstanding bonds, notes, or other debt obligations of the Recipient, if any, issued to finance the Project,
and the Recipient desires to participate as a recipient of financial assistance from the CWSRF and
evidence its obligation to pay Installment Payments, which obligation will be secured by Net Revenues,
as defined herein, upon the terms and conditions set forth in this Agreement, all pursuant to the Clean
Water Act and the State Act;
NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants and
agreements herein set forth, the State Water Board and the Recipient, each binding itself, its successors
and assigns, do mutually promise, covenant and agree as follows:
ARTICLE I DEFINITIONS
1.1 Definitions.
Unless othenwise specified, each capitalized term used in this Agreement (including the Exhibits hereto) has
the following meaning:
"Additional Payments" means the Additional Payments described in Section 3.2(c) of this Agreement.
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
"Agreement" means this Installment Sale Agreement, dated as ofthe date set forth on the first page hereof,
by and between the State Water Board and the Recipient, including all exhibits and attachments hereto.
"Allowance" means an amount based on a percentage of the accepted bid for an eligible project to help
defray the planning, design, and construction engineering and administration costs ofthe Project.
"Authorized Representative" means the duly appointed representative of the Recipient. For all authorized
representatives, a certified original of the authorizing resolution that designates the authorized
representative, by title, must accompany the first disbursement request, and any other documents or
requests required or allowed under this Agreement.
"Bank" means the California Infrastructure and Economic Development Bank.
"Bonds" means any series of bonds issued by the Bank all or a portion of the proceeds of which may be
applied to fund the Project in whole or in part or that are secured in whole or in part by Installment
Payments paid hereunder.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor provisions and the
regulations ofthe U.S. Department ofthe Treasury promulgated thereunder.
"Completion of Construction" means the date, as determined by the Division after consultation with the
Recipient, that the work of building and erection of the Project is substantially complete.
"CWSRF" means the Clean Water State Revolving Fund.
"Division" means the Division of Financial Assistance of the State Water Board or any other segment of
the State Water Board authorized to administer the CWSRF.
"Enterprise Fund" means the enterprise fund ofthe Recipient in which Revenues are deposited.
"Fiscal Year" means the period of twelve (12) months terminating on June 30 of any year, or any other
annual period hereafter selected and designated by the Recipient as its Fiscal Year in accordance with
applicable law.
"Force Account" means the use ofthe Recipient's own employees or equipment for construction ofthe
Project.
"Initiation of Construction" means the date that notice to proceed with work is issued for the Project, or, if
notice to proceed is not required, the date of commencement of building and erection of the Project.
"Installment Payments" means Installment Payments due and payable by the Recipient to the State
Water Board under this Agreement, the amounts of which are set forth as Exhibit C hereto.
"Listed Event" means, so long as the Recipient has outstanding any Material Obligation subject to Rule
15c2-12, any ofthe events required to be reported pursuant to Rule 15c2-12(b)(5).
"Material Event" means any of the following events: (a) revenue shortfalls; (b) unscheduled draws on the
reserve fund or the Enterprise Fund; (c) substitution of insurers, or their failure to perform; (d) adverse
water quality findings by the Regional Water Quality Control Board; or (e) litigation related to the
Revenues or to the Project, whether pending or anticipated.
"Material Obligations" means all senior, parity, and subordinate obligations of the Recipient payable from
Revenues as identified as of the date of this Agreement in Exhibit F and such additional obligations as
may hereafter be issued in accordance with the provisions of such obligations and this Agreement.
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
"Net Revenues" means, for any Fiscal Year, so long as there may be any pre-existing and outstanding
Material Obligation other than the Obligation, the definition ofthe term as defined under such Matenal
Obligation, and thereafter, all Revenues received by the Recipient less the Operations and Maintenance
Costs for such Fiscal Year.
"Obligation" means the obligation of the Recipient to make Installment Payments and Additional
Payments as provided herein, as evidenced by the execution of this Agreement, proceeds of such
obligations being used to fund the Project as specified in the Project Description attached hereto as Exhibit A
and Exhibit A-FBA and in the documents thereby incorporated by reference.
"Operations and Maintenance Costs" means, so long as outstanding Material Obligations other than the
Obligation are outstanding, the definition of such term as defined therein, and thereafter, the reasonable
and necessary costs paid or incurred by the Recipient for maintaining and operating the System,
determined in accordance with generally accepted accounting principles, including all reasonable
expenses of management and repair and all other expenses necessary to maintain and preserve the
System in good repair and working order, and including all reasonable and necessary administrative
costs of the Recipient that are charged directly or apportioned to the operation of the System, such as
salaries and wages of employees, overhead, taxes (if any), the cost of permits, licenses, and charges to
operate the System and insurance premiums; but excluding, in all cases depreciation, replacement, and
obsolescence charges or reserves therefor and amortization of intangibles.
"Policy" means the State Water Board's policy for implementing the CWSRF program, as amended from
time to time.
"Project" means the Project financed by this Agreement as described in Exhibit A and in the documents
incorporated by reference herein.
"Project Completion" means the date, as determined by the Division after consultation with the Recipient,
that operation ofthe Project is initiated or is capable of being initiated, whichever comes first.
"Project Costs" means the incurred costs of the Recipient which are eligible for financial assistance from
the CWSRF under the federal Clean Water Act, which are allowable costs as defined under the Policy,
and which are reasonable, necessary and allocable by the Recipient to the Project under generally
accepted accounting principles, plus capitalized interest.
"Project Funds" means funds disbursed by the State Water Board to the Recipient for purposes of this
Agreement.
"Recipient" means the recipient of Project Funds, as identified on the front page of this Agreement.
"Revenues" means, for each Fiscal Year, all gross income and revenue received or receivable by the
Recipient from the ownership or operation of the System, detennined in accordance with generally
accepted accounting principles, including all rates, fees, and charges (including connection fees and
charges) as received by the Recipient for the services of the System, and all other income and revenue
howsoever derived by the Recipient from the ownership or operation of the System or arising from the
System, including all income from the deposit or investment of any money in the Enterprise Fund or any
rate stabilization fund of the Recipient or held on the Recipient's behalf, and any refundable deposits
made to establish credit, and advances or contributions in aid of construction.
"Rule 15c2-12(b)(5)" means Rule 15c2-12(b)(5) promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
"State" means State of California.
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
"State Water Board" means the State Water Resources Control Board, an administrative and regulatory
agency of the State of California.
"System" means for the purposes of a wastewater project, all wastewater collection, transport, treatment,
storage, and disposal facilities, including land and easements thereof, owned by the Recipient, including
the Project, and all other properties, structures, or works hereafter acquired and constructed by the
Recipient and determined to be a part of the System, together with all additions, betterments, extensions,
or improvements to such facilities, properties, structures, or works, or any part thereof hereafter acquired
and constructed. For the purposes of a water recycling project, "System" means all wastewater, water
recycling, and/or potable water collection, transport, treatment, storage, and/or disposal facilities,
including land and easements thereof, owned by the Recipient, including the Project, and all other
properties, structures or works hereafter acquired and constructed by the Recipient and determined to be
a part of the System, together with all additions, betterments, extensions or improvements to such
facilities, properties, structures, or works, or any part thereof hereafter acquired and constructed.
1.2 Exhibits and Appendices Incorporated.
All exhibits and appendices to this Agreement, including any amendments and supplements hereto, are
hereby incorporated herein and made a part of this Agreement.
ARTICLE II REPRESENTATIONS, WARRANTIES, AND COMMITMENTS
The Recipient represents and warrants the following as of the date set forth on the first page hereof and
continuing thereafter for the term of the Agreement.
2.1 General Recipient Commitments.
The Recipient accepts and agrees to comply with all terms, provisions, conditions, and commitments of
this Agreement, including all incorporated documents, and to fulfill all assurances, declarations,
representations, and commitments made by the Recipient in its application, accompanying documents,
and communications filed in support of its request for financial assistance.
2.2 Authorization and Validity.
The execution and delivery of this Agreement, including all incorporated documents, has been
duly authorized. This Agreement constitutes a valid and binding obligation of the Recipient,
enforceable in accordance with its terms, except as such enforcement may be limited by law.
2.3 Violations.
The execution, delivery, and performance by Recipient of this Agreement, including all
incorporated documents, do not violate any provision of any law or regulation in effect as of the
date set forth on the first page hereof, or result in any breach or default under any contract,
obligation, indenture, or other instrument to which Recipient is a party or by which Recipient is bound
as of the date set forth on the first page hereof.
2.4 Litigation.
There are no pending or, to Recipient's knowledge, threatened actions, claims, investigations,
suits, or proceedings before any governmental authority, court, or administrative agency which
affect the financial condition or operations of the System and/or the Project other than as
described in Exhibit H hereto.
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
2.5 Solvency.
None of the transactions contemplated by this Agreement will be or have been made with an actual intent
to hinder, delay, or defraud any present or future creditors of Recipient. As of the date set forth on the first
page hereof, Recipient is solvent and will not be rendered insolvent by the transactions contemplated by
this Agreement. Recipient is able to pay its debts as they become due.
2.6 Legal Status and Eligibility.
Recipient is duly organized and existing and in good standing under the laws ofthe State of California,
and will remain so during the term of this Agreement. Recipient shall at all times maintain its current legal
existence and preserve and keep in full force and effect its legal rights and authority. Recipient shall
maintain compliance with provisions of state law that restrict state funding to non-compliant entities.
2.7 Financial Statements.
The financial statements of Recipient previously delivered to the State Water Board as of the date(s) set
forth in such financial statements: (a) are materially complete and correct; (b) present fairty the financial
condition of the Recipient; and (c) have been prepared in accordance with generally accepted accounting
principles or other accounting standards reasonably approved by the State Water Board. Since the
date(s) of such financial statements, there has been no material adverse change in the financial condition
of the Recipient, nor have any assets or properties reflected on such financial statements been sold,
transferred, assigned, mortgaged, pledged or encumbered, except as previously disclosed in writing by
Recipient and approved in writing by the State Water Board.
2.8 Completion of Project.
The Recipient agrees to expeditiously proceed with and complete construction of the Project in
substantial accordance with Exhibit A and Exhibit A-FBA.
2.9 Project Completion Report.
The Recipient shall submit a Project Completion Report to the Division with a copy to the appropriate
Regional Water Quality Control Board on or before the due date established by the Division and the
Recipient at the time of final project inspection. The Project Completion Report must address the
following:
(a) describe the Project,
(b) describe the water quality problem the Project sought to address,
(c) discuss the Project's likelihood of successfully addressing that water quality problem in the
future, and
(d) summarize compliance with environmental conditions, if applicable.
Where the Recipient fails to submit a timely Project Completion Report, the State Water Board may stop
processing pending or future applications for new financial assistance, withhold disbursements under this
Agreement or other agreements, and begin administrative proceedings.
2.10 Award of Construction Contracts.
(a) The Recipient agrees to award the prime construction contract no later than the date specified
in Exhibit A.
(b) The Recipient agrees to promptly notify the Division in writing both of the award of the prime
construction contract for the Project and of Initiation of Construction of the Project. The
Recipient agrees to make all reasonable efforts to complete construction in substantial
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
conformance with the terms of the contract by the Completion of Construction date established
in Exhibit A. Such date shall be binding upon the Recipient unless modified in writing by the
Division upon a showing of good cause by the Recipient. The Recipient shall deliver any
request for extension of the Completion of Construction date no less than 90 days prior to the
Completion of Construction date. The Division will not unreasonably deny such a timely
request, but the Division will deny requests received after this time.
2.11 Notice.
The Recipient agrees to notify the Division in writing within 5 days of the occurrence of the following:
(a) Principal and interest payment delinquencies on this CWSRF Obligation;
(b) Non payment related defaults, if material;
(c) Unscheduled draws on debt service reserves reflecting financial difficulties;
(d) Unscheduled draws on credit enhancements, if any, reflecfing financial difficulties;
(e) Substitution of credit or liquidity providers, if any, or their failure to perform;
(f) Adverse tax opinions, the issuance by the Internal Revenue Service or proposed or final
determinations of taxability. Notices of Proposed Issue (IRS Form 5701-TEB) or other material
notices of determinations with respect to the tax status of any tax-exempt bonds;
(g) Rating changes on tax-exempt bonds, if any;
(h) Bankruptcy, insolvency, receivership or similar event of the Recipient;
(i) Actions taken in anticipation of filing Chapter 9, as required under state law;
(j) Any litigation pending or threatened against Recipient regarding its wastewater capacity or its
continued existence, circulation of a petition to challenge rates, considerafion of dissolution, or
disincorporation, or any other material threat to the Recipient's Revenues;
(k) Other Material Events or Listed Events;
(I) Change of ownership of the Project or change of management or service contract for operation
of the Project; or
(m) Negotiafions regarding proposed parity obligations.
The Recipient agrees to notify the Division promptly ofthe following:
(a) Any substantial change in scope of the Project. The Recipient agrees that no substantial
change in the scope ofthe Project will be undertaken unfil written nofice ofthe proposed
change has been provided to the Division and the Division has given written approval for such
change;
(b) Cessafion of all major construcfion work on the Project where such cessafion of work is
expected to or does extend for a period of thirty (30) days or more;
(c) Any circumstance, combinafion of circumstances, or condition, which is expected to or does
delay Complefion of Construcfion for a period of ninety (90) days or more beyond the esfimated
date of Complefion of Construcfion previously provided to the Division;
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
(d) Discovery of any potenfial archeological or historical resource. Should a potenfial archeological
or historical resource be discovered during construction of the Project, the Recipient agrees
that all work in the area ofthe find will cease unfil a qualified archeologist has evaluated the
situafion and made recommendations regarding preservafion of the resource, and the Division
has determined what actions should be taken to protect and preserve the resource. The
Recipient agrees to implement appropriate acfions as directed by the Division;
(e) Discovery of any unexpected endangered or threatened species, as defined in the federal
Endangered Species Act. Should a federally protected species be unexpectedly encountered
during construcfion ofthe Project, the Recipient agrees to prompfiy notify the Division. This
notificafion is in addifion to the Recipient's obligafions under the federal Endangered Species
Act;
(f) Any monitoring, demonstration, or other implementafion acfivities such that the State Water
Board and/or Regional Water Quality Control Board staff may observe and document such
activities;
(g) Any public or media event publicizing the accomplishments and/or results of this Agreement
and provide the opportunity for attendance and participation by state and federal
representafives with at least ten (10) working days' nofice to both the Division and USEPA
Region IX. The contacts for USEPA Region IX are Juanita Licata at Licata.juanita@epa.gov
(415) 972-3450 and Josh Amaris at Amaris.josh@epa.gov (415) 972-3597; or
(h) Complefion of Construction ofthe Project, and actual Project Complefion.
2.12 Findings and Challenge
Upon considerafion of a voter inifiafive to reduce Revenues, the Recipient shall make a finding regarding
the effect of such a reduction on the Recipient's ability to satisfy its Obligafion under this Agreement and
to operate and maintain the Project for its useful life. The Recipient agrees to make its findings available
to the public and to request, if necessary, the authorizafion ofthe Recipient's decision-maker or decision-
maker body to file litigation to challenge any such inifiafive that it finds will render it unable to safisfy either
the Obligation or the covenant to operate and maintain, or both. The Recipient shall diligently pursue and
bear any and all costs related to such challenge. The Recipient shall notify and regularty update the State
Water Board regarding any such challenge.
2.13 Project Access.
The Recipient agrees to ensure that the State Water Board, the Governor of the State, the United States
Environmental Protecfion Agency, the Office of Inspector General, any member of Congress, the
President of the United States, or any authorized representative of the foregoing, will have safe and
suitable access to the Project site at all reasonable times during Project construction and thereafter for
the term of the Obligation. The Recipient acknowledges that, except for a subset of archeological
records, the Project records and locations are public records, including all of the submissions
accompanying the applicafion, all ofthe documents incorporated by Exhibit A, and all reports,
disbursement requests, and supporting documentafion submitted hereunder.
2.14 Project Complefion; Initiafion of Operafions.
Upon Complefion of Construcfion of the Project, the Recipient agrees to expedifiously initiate Project
operafions.
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
2.15 Continuous Use of Project; Lease or Disposal of Project.
The Recipient agrees that, except as provided in the Agreement, it will not abandon, substanfially
disconfinue use of, lease, or dispose of the Project or any significant part or portion thereof during the
useful life of the Project without prior written approval of the Division. Such approval may be conditioned
as determined to be appropriate by the Division, including a condifion requiring repayment of all or any
portion of all remaining funds covered by this Agreement together with accrued interest and any penalty
assessments which may be due.
2.16 Reports.
(a) Quarteriy Reports. The Recipient agrees to expeditiously provide status reports no less
frequenfiy than quarteriy, starting with the execution of this Agreement. At a minimum the
reports will contain the following information:
• a summary of progress to date including a description of progress since the last report,
percent construction complete, percent contractor invoiced, and percent schedule elapsed;
• a description of compliance with environmental requirements;
• a lisfing of change orders including amount, descripfion of work, and change in contract
amount and schedule;
• any problems encountered, proposed resolufion, schedule for resolufion, and status of
previous problem resolutions.
(b) As Needed Reports. The Recipient agrees to expeditiously provide, during the term of this
Agreement, such reports, data, and informafion as may be reasonably required by the Division,
including but not limited to material necessary or appropriate for evaluafion of the CWSRF
Program or to fulfill any reporting requirements of the federal government.
2.17 Federal Disadvantaged Business Enterprise (DBE) Reporting.
The Recipient agrees to report DBE ufilizafion to the Division on the DBE Ufilization Report, State Water
Board Form DBE UR334. The Recipient must submit such reports to the Division semiannually within ten
(10) calendar days following April 1 and October 1 until such time as the "Notice of Completion" is issued.
The Recipient agrees to comply with 40 CFR § 33.301.
2.18 Records.
(a) Without limitation ofthe requirement to maintain Project accounts in accordance with generally
accepted accounfing principles, the Recipient agrees to:
(1) Establish an official file for the Project which shall adequately document all significant
actions relative to the Project;
(2) Establish separate accounts which will adequately and accurately depict all amounts
received and expended on the Project, including all assistance funds received under this
Agreement;
(3) Establish separate accounts which will adequately depict all income received which is
attributable to the Project, specifically including any income attributable to assistance funds
disbursed under this Agreement;
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
(4) Establish an accounting system which will accurately depict final total costs of the Project,
including both direct and indirect costs;
(5) Establish such accounts and maintain such records as may be necessary for the State to
fulfill federal reporting requirements, including any and all reporting requirements under
federal tax statutes or regulations; and
(6) If Force Account is used by the Recipient for any phase of the Project, other than for
planning, design, and construcfion engineering and administrafion provided for by
allowance, accounts will be established which reasonably document all employee hours
charged to the Project and the associated tasks performed by each employee. Indirect
Force Account costs are not eligible for funding.
(b) The Recipient shall be required to maintain separate books, records and other material relafive
to the Project. The Recipient shall also be required to retain such books, records, and other
material for itself and for each contractor or subcontractor who performed work on this project
for a minimum of thirty-six (36) years after Project Complefion. The Recipient shall require that
such books, records, and other material be subject at all reasonable times (at a minimum
during normal business hours) to inspection, copying, and audit by the State Water Board, the
Bureau of State Audits, the United States Environmental Protection Agency (USEPA), the
Office of Inspector General, the Internal Revenue Service, the Governor, or any authorized
representafives of the aforementioned, and shall allow interviews during normal business hours
of any employees who might reasonably have informafion related to such records. The
Recipient agrees to include a similar right regarding audit, interviews, and records retenfion in
any subcontract related to the performance of this Agreement. The provisions of this section
shall survive the discharge of the Recipient's Obligafion hereunder and shall survive the term of
this Agreement.
2.19 Audit.
(a) The Division, at its opfion, may call for an audit of financial informafion relafive to the Project,
where the Division determines that an audit is desirable to assure program integrity or where
such an audit becomes necessary because of federal requirements. Where such an audit is
called for, the audit shall be performed by a certified public accountant independent of the
Recipient and at the cost of the Recipient. The audit shall be in the form required by the
Division.
(b) Audit disallowances will be returned to the State Water Board.
2.20 Signage.
The Recipient shall place a sign at least four feet tall by eight feet wide made of % inch thick exterior
grade plywood or other approved material in a prominent location on the Project site and shall maintain
the sign in good condition for the duration of the construction period. The sign shall include the following
color logos (available from the Division) and the following disclosure statement:
Clean Water ^"N^^ &B¥^
Water Boards E™«Mm,nt..i>™wct«»
Umaa Stales
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
"Funding for this project has been provided in full or in part by the Clean Water State
Revolving Fund through an agreement with the State Water Resources Control Board.
California's Clean Water State Revolving Fund is capitalized through a variety of funding
sources, including grants from the United States Environmental Protecfion Agency and
state bond proceeds."
The Project sign may include another agency's required promofional informafion so long as the
above logos and disclosure statement are equally prominent on the sign. The sign shall be prepared
in a professional manner.
The Recipient shall include the following disclosure statement in any document, written report, or
brochure prepared in whole or in part pursuant to this Agreement:
"Funding for this project has been provided in full or in part through an agreement with
the State Water Resources Control Board. The contents of this document do not
necessarily reflect the views and policies ofthe State Water Resources Control Board,
nor does mention of trade names or commercial products constitute endorsement or
recommendafion for use. (Gov. Code § 7550, 40 CFR § 31.20.)"
ARTICLE III FINANCING PROVISIONS
3.1 Purchase and Sale of Project.
The Recipient hereby sells to the State Water Board and the State Water Board hereby purchases from
the Recipient the Project. Simultaneously therewith, the Recipient hereby purchases from the State
Water Board, and the State Water Board hereby sells to the Recipient, the Project in accordance with the
provisions of this Agreement. All right, title, and interest in the Project shall immediately vest in the
Recipient on the date of execufion and delivery of this Agreement without further acfion on the part of the
Recipient or the State Water Board.
3.2 Amounts Payable by the Recipient.
(a) Installment Payments. Repayment ofthe Project Funds, together with all interest accruing
thereon, shall be repaid in annual installments commencing on the date that is one (1) year
after Complefion of Construcfion, and shall be fully amortized by the date specified in Exhibit B.
The repayment amount is based on a standard fully amortized assistance amount with equal
annual repayments. The remaining balance is the previous balance, plus the disbursements,
plus the accrued interest on both, less the repayment. Repayment calculations will be made
beginning one (1) year after Complefion of Construcfion and shall be fully amortized not later
than the date specified in Exhibit B. Exhibit C is a payment schedule based on the provisions
of this article and an estimated disbursement schedule. Actual repayments will be based on
actual disbursements.
Upon Completion of Construcfion and submission of necessary reports by the Recipient, the
Division will prepare an appropriate payment schedule and supply the same to the Recipient.
The Division may amend this schedule as necessary to accurately reflect amounts due under
this Agreement. The Division will prepare any necessary amendments to the payment
schedule and send them to the Recipient.
The Recipient agrees to make each installment payment on or before the due date therefor. A
ten (10) day grace period will be allowed, after which time a penalty in the amount of costs
incurred to the State Water Board will be assessed for late payment. These costs may include,
but are not limited to, lost interest earnings, staff fime, bond debt service default penalfies, if
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
any, and other costs incurred. Penalties assessed will not change the principal balance of the
financing Agreement. Such penalfies will be treated as a separate receivable in addifion to the
annual payment due. For purposes of penalty assessment, repayment will be deemed to have
been made if repayment is deposited in the U.S. Mail within the grace period with postage
prepaid and property addressed. Any penalfies assessed will not be added to the assistance
amount balance, but will be treated as a separate account and obligafion of the Recipient. The
interest penalty will be assessed from the repayment due date.
The Recipient as a whole is obligated to make all payments required by this Agreement to the
State Water Board, notwithstanding any individual default by its constituents or others in the
payment to the Recipient of fees, charges, taxes, assessments, tolls or other charges
("Charges") levied or imposed by the Recipient. The Recipient shall provide for the punctual
payment to the State Water Board of all amounts which become due under this Agreement and
which are received from constituents or others in the payment to the Recipient. In the event of
failure, neglect or refusal of any officer of the Recipient to levy or cause to be levied any
Charge to provide payment by the Recipient under this Agreement, to enforce or to collect such
Charge, or to pay over to the State Water Board any money collected on account of such
Charge necessary to satisfy any amount due under this Agreement, the State Water Board may
take such action in a court of competent jurisdiction as it deems necessary to compel the
performance of all dufies relating to the imposifion or levying and collection of any of such
Charges and the payment of the money collected therefrom to the State Water Board. Action
taken pursuant hereto shall not deprive the State Water Board of, or limit the application of, any
other remedy provided by law or by this Agreement.
Attached as Exhibit C is a Payment Schedule based on the provisions of this section and an
esfimated disbursement schedule. This schedule will be revised based on actual
disbursements following Completion of Construcfion.
Each Installment Payment shall be paid by check and in lawful money of the United States of
America.
The Recipient agrees that it shall not be entified to interest earned on undisbursed project
funds. Upon execution of this Agreement, the State Water Board shall encumber an amount
equal to the Obligafion. The Recipient hereby agrees to pay Installment Payments and
Addifional Payments from Net Revenues and/or other amounts legally available to the
Recipient therefor. Interest on any funds disbursed to the Recipient shall begin to accrue as of
the date of each disbursement.
(b) Project Costs. The Recipient agrees to pay any and all costs connected with the Project
including, without limitafion, any and all Project Costs. If the Project Funds are not sufllcient to
pay the Project Costs in full, the Recipient shall nonetheless complete the Project and pay that
portion of the Project Costs in excess of available Project Funds, and shall not be entitled to
any reimbursement therefor from the State Water Board.
(c) Additional Payments. In addition to the Installment Payments required to be made by the
Recipient, the Recipient shall also pay to the State Water Board the reasonable extraordinary
fees and expenses of the State Water Board, and of any assignee of the State Water Board's
right, fitle, and interest in and to this Agreement, in connecfion with this Agreement, including all
expenses and fees of accountants, trustees, attorneys, lifigafion costs, insurance premiums
and all other extraordinary costs reasonably incurred by the State Water Board or assignee of
the State Water Board.
Addifional Payments may be billed to the Recipient by the State Water Board from fime to fime,
together with a statement executed by a duly authorized representative of the State Water
Board, stating that the amounts billed pursuant to this section have been incurred by the State
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
Water Board or its assignee for one or more of the above items and a copy of the invoice or
statement for the amount so incurred or paid. Amounts so billed shall be paid by the Recipient
within thirty (30) days after receipt of the bill by the Recipient.
(d) The Recipient may without penalty prepay all or any portion of the outstanding principal amount
of the Obligafion provided that the Recipient shall also pay at the fime of such prepayment all
accrued interest on the principal amount prepaid through the date of prepayment.
3.3 Obligafion Absolute.
The obligafion of the Recipient to make the Installment Payments and other payments required to be
made by it under this Agreement, from Net Revenues and/or other amounts legally available to the
Recipient therefor, is absolute and uncondifional, and unfil such time as the Installment Payments and
Additional Payments have been paid in full, the Recipient shall not disconfinue or suspend any
Installment Payments or other payments required to be made by it hereunder when due, whether or not
the System or any part thereof is operafing or operable or has been completed, or its use is suspended,
interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments and
other payments shall not be subject to reduction whether by offset or otherwise and shall not be
condifional upon the performance or nonperformance by any party of any agreement for any cause
whatsoever.
3.4 No Obligafion of the State.
Any obligation ofthe State Water Board herein contained shall not be an obligafion, debt, or liability ofthe
State and any such obligafion shall be payable solely out of the moneys in the CWSRF made available
pursuant to this Agreement.
3.5 Disbursement of Project Funds; Availability of Funds.
(a) Except as may be othenwise provided in this Agreement, disbursement of Project Funds will be
made as follows:
(1) Upon execution and delivery of this Agreement, the Recipient may request immediate
disbursement of any eligible incurred planning and design allowance as specified in Exhibit
B from the Project Funds through submission to the State Water Board of the Disbursement
Request Form 260, or any amendment thereto, duly completed and executed.
(2) The Recipient may request disbursement of eligible construcfion and equipment costs
consistent with budget amounts referenced in Exhibit B. (Note that this Agreement will be
amended to incorporate Final Budget Approval.)
(3) Additional Project Funds will be prompfiy disbursed to the Recipient upon receipt of
Disbursement Request Form 260, or any amendment thereto, duly completed and
executed by the Recipient for incurred costs consistent with this Agreement, along with
receipt of status reports due under Secfion 2.16 above.
(4) The Recipient agrees that it will not request disbursement for any Project Cost until such
cost has been incurred and is currenfiy due and payable by the Recipient, although the
actual payment of such cost by the Recipient is not required as a condifion of disbursement
request.
(5) Recipient shall spend Project Funds within 30 days of receipt. Any interest earned on
Project Funds shall be reported to the State Water Board and may be required to be
returned to the State Water Board or deducted from future disbursements.
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
(6) [reserved]
(7) Notwithstanding any other provision of this Agreement, no disbursement shall be required
at any fime or in any manner which is in violation of or in conflict with federal or state laws,
policies, or regulations.
(b) The State Water Board's obligafion to disburse Project Funds is confingent upon the availability
of sufficient funds to permit the disbursements provided for herein. If sufficient funds are not
available for any reason, including but not limited to failure of the federal or State government
to appropriate funds necessary for disbursement of Project Funds, the State Water Board shall
not be obligated to make any disbursements to the Recipient under this Agreement. This
provision shall be construed as a condition precedent to the obligation of the State Water Board
to make any disbursements under this Agreement. Nothing in this Agreement shall be
construed to provide the Recipient with a right of priority for disbursement over any other
agency. If any disbursements due the Recipient under this contract are deferred because
sufficient funds are unavailable, it is the intenfion ofthe State Water Board that such
disbursement will be made to the Recipient when sufficient funds do become available, but this
intenfion is not binding.
3.6 Withholding of Disbursements and Material Violafions.
(a) The State Water Board may withhold all or any portion of the funds provided for by this
Agreement in the event that:
(1) The Recipient has materially violated, or threatens to materially violate, any tenn, provision,
condifion, or commitment of this Agreement;
(2) The Recipient fails to maintain reasonable progress toward complefion ofthe Project; or
(3) The Recipient fails to comply with secfion 51D3 of the Water Code, where applicable.
(b) For the purposes of this Agreement, the terms "material violation" or "threat of material
violafion" include, but are not limited to:
(1) Placement on the ballot of an inifiafive to reduce revenues securing this Agreement;
(2) Passage of such an inifiafive;
(3) Successful challenges by ratepayer(s) to the process used by Recipient to set, dedicate, or
othenwise secure revenues used for securing this Agreement; or
(4) Any other action or lack of action that may be construed as a material violation or threat
thereof.
3.7 Pledge; Rates, Fees and Charges; Addifional Debt.
(a) Establishment of Enterprise Fund and Reserve Fund. In order to carry out its System
Obligafions, including the Obligation, the Recipient agrees and covenants that it shall establish
and maintain or shall have established and maintained the Enterprise Fund. All Revenues
received shall be deposited when and as received in trust in the Enterprise Fund. This
requirement applies to Recipients that are public agencies. To the extent required in Exhibit D
of this Agreement, the Recipient agrees to establish and maintain a reserve fund.
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
(b) Pledge of Net Revenues, Enterprise Fund, and Reserve Fund. The Obligafion hereunder shall
be secured by a lien on and pledge of the Enterprise Fund, Net Revenues, and any Reserve
Fund specified in Exhibit D in priority as specified in Exhibit F. The Recipient hereby pledges
and grants such lien on and pledge of the Enterprise Fund, Net Revenues, and any Reserve
Fund specified in Exhibit D to secure the Obligafion, including payment of Installment Payments
and Additional Payments hereunder. The Net Revenues in the Enterprise Fund shall be
subject to the lien of such pledge without any physical delivery thereof or further act, and the
lien of such pledge shall be valid and binding as against all parties having claims of any kind in
tort, contract, or othenwise against the Recipient.
(c) Applicafion and Purpose ofthe Enterprise Fund. Subject to the provisions of any outstanding
Material Obligations, money on deposit in the Enterprise Fund shall be applied and used first,
to pay Operafions and Maintenance Costs, and thereafter, all amounts due and payable with
respect to the Material Obligations. After making all payments hereinabove required to be
made in each Fiscal Year, the Recipient may expend in such Fiscal Year any remaining money
in the Enterprise Fund for any lawful purpose of the Recipient, including payment of
subordinate debt. This requirement applies to Recipients that are public agencies.
(d) Rates, Fees and Charges. The Recipient agrees, to the extent permitted by law, to fix,
prescribe and collect rates, fees and charges for the System during each Fiscal Year which are
reasonable, fair and nondiscriminatory and which will be at least sufficient to yield during each
Fiscal Year Net Revenues equal to the debt service on Material Obligations, including the
Obligafion, for such Fiscal Year, plus any coverage ratio specified in Exhibit D of this
Agreement. The Recipient may make adjustments from time to time in such fees and charges
and may make such classification thereof as it deems necessary, but shall not reduce the rates,
fees and charges then in effect unless the Net Revenues from such reduced rates, fees and
charges will at all fimes be sufficient to meet the requirements of this secfion.
(e) Addifional Debt Test. The Recipient's future debt may not be senior to CWSRF debt. The
Recipient's future debt may be on parity with the CWSRF debt if the following condifions are
met:
(1) The Recipient's net revenues pledged to pay all senior debts relying on the pledged
revenue source are at least 1.2 times the highest year's debt service and net revenues
pledged to pay all debts are at least 1.1 fimes the highest year's debt service; and
(2) One of the following conditions is met:
(A) The Recipient's proposed additional parity obligafion is rated "A," or higher, by at least
two nationally recognized rafing agencies; or
(B) The Recipient is a disadvantaged community and the Division determines that it would
be economically burdensome for the agency to obtain nafionally recognized rafings for
its parity debt; or
(C) The Recipient is a disadvantaged community and the Division determines that requiring
the proposed additional obligafions to be subordinate to the Recipient's Obligafions
hereunder will unduly restrict the Recipients from obtaining future system debt
necessary for water quality improvements.
3.8 Financial Management System and Standards.
The Recipient agrees to comply with federal standards for financial management systems. The Recipient
agrees that, at a minimum, its fiscal control and accounfing procedures will be sufficient to permit
preparation of reports required by the federal government and tracking of Project funds to a level of
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
expenditure adequate to establish that such funds have not been used in violafion of federal or state law
or the terms of this Agreement. To the extent applicable, the Recipient agrees to be bound by, and to
comply with, the provisions and requirements of the federal Single Audit Act of 1984, Office of
Management and Budget (OMB) Circular No. A-133, and updates or revisions, thereto. (Pub. L. 98-502.)
3.9 Accounting and Audifing Standards.
The Recipient will maintain separate Project accounts in accordance with generally accepted accounting
principles. The Recipient shall comply with "Standards for Audit of Governmental Organizafions,
Programs, Acfivifies and Funcfions" promulgated by the U.S. General Accounfing Office. (40 CFR §
35.3135, subd. (I).)
3.10 Federal or State Assistance.
If federal or state funding for Project Costs is made available to the Recipient from sources other than the
CWSRF, the Recipient may retain such funding up to an amount which equals the Recipient's local share
of Project Costs. To the extent allowed by requirements of other funding sources, any funding received in
excess of the Recipient's local share, not to exceed the total amount of the CWSRF financing assistance,
shall be remitted to the State Water Board to be applied to Installment Payments due hereunder.
ARTICLE IV TAX COVENANTS
4.1 Purpose.
The purpose of this Article IV is to establish the reasonable expectations of the Recipient regarding the
Project and the Project Funds, and is intended to be and may be relied upon for purposes of Sections
103,141 and 148 ofthe Code and as a certificafion described in Secfion 1.148-2(b)(2) ofthe Treasury
Regulafions. This Article IV sets forth certain facts, esfimates and circumstances which fonn the basis for
the Recipient's expectafion that neither the Project nor the Project Funds will be used in a manner that
would cause the Obligafion to be classified as "arbitrage bonds" under Secfion 148 ofthe Code or "private
activity bonds" under Secfion 141 ofthe Code.
4.2 Tax Covenant.
The Recipient agrees that it will not take or authorize any acfion or permit any acfion within its reasonable
control to be taken, or fail to take any action within its reasonable control, with respect to the Project
which would result in the loss of the exclusion of interest on the Bonds from gross income for federal
income tax purposes under Secfion 103 ofthe Code.
4.3 Governmental Unit.
The Recipient is a state or local governmental unit as defined in Section 1.103-1 ofthe Treasury
Regulafions or an instrumentality thereof (a "Governmental Unit") and is not the federal government or
any agency or instrumentality thereof.
4.4 Financing of a Capital Project.
The Recipient will use the Project Funds to finance costs it has incurred or will incur for the construcfion,
reconstrucfion, installation or acquisifion ofthe Project. Such costs have not previously been financed
with the proceeds of any other issue of tax-exempt obligafions.
4.5 Ownership and Operation of Project.
The Recipient exclusively owns and, except as provided in Secfion 4.12 hereof, operates the Project.
15
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
4.6 Temporary Period.
The Recipient reasonably expects that at least eighty-five percent (85%) of the Project Funds will be
allocated to expenditures for the Project within three (3) years of the eariier of the effective date of this
Agreement or the date the Bonds are issued ("Applicable Date"). The Recipient has incurred, or
reasonably expects that it will incur within six (6) months ofthe Applicable Date, a substanfial binding
obligation (i.e., not subject to confingencies within the control ofthe Recipient or a related party) to a third
party to expend at least five percent (5%) of the Project Funds on the costs of the Project. The
complefion of acquisifion, construcfion, improvement and equipping ofthe Project and the allocafion of
Project Funds to expenditures for the Project will proceed with due diligence.
4.7 Working Capital.
No operational expenditures of the Recipient or any related entity are being, have been or will be financed
or refinanced with Project Funds.
4.8 Expenditure of Proceeds.
Project Funds shall be used exclusively for the following purposes: (i) architectural, engineering,
surveying, soil tesfing, and similar costs paid with respect to the Project incurred prior to the
commencement of construction and in an aggregate amount not exceeding twenty percent (20%) of the
Project Funds, (ii) capital expenditures relafing to the Project originally paid by the Recipient on or after
the date hereof, (iii) interest on the Obligafion through the later of three (3) years after the Applicable Date
or one (1) year after the Project is placed in service, and (iv) initial operating expenses directly associated
with the Project in the aggregate amount not more than five percent (5%) of the Project Funds.
4.9 Private Use and Private Payments.
None of the Project Funds or the Project are, have been or will be used in the aggregate for any acfivifies
that constitute a Private Use (as defined below). None of the principal of or interest with respect to the
Installment Payments will be secured by any interest in property (whether or not the Project) used for a
Private Use or in payments in respect of property used for a Private Use, or will be derived from payments
in respect of property used for a Private Use. "Private Use" means any activity that constitutes a trade or
business that is carried on by persons or entifies, other than a Governmental Unit. The leasing of the
Project or the access by or the use of the Project by a person or enfity other than a Governmental Unit on
a basis other than as a member of the general public shall constitute a Private Use. Use by or on behalf
ofthe State of California or any of its agencies, instrumentalities or subdivisions or by any local
governmental unit and use as a member of the general public will be disregarded in determining whether
a Private Use exists. Use under an arrangement that conveys priority rights or other preferenfial benefits
is generally not use on the same basis as the general public. Arrangements providing for use that is
available to the general public at no charge or on the basis of rates that are generally applicable and
uniformly applied do not convey priority rights or other preferenfial benefits. For this purpose, rates may
be treated as generally applicable and uniformly applied even if (i) different rates apply to different
classes of users, such as volume purchasers, if the differences in rates are customary and reasonable; or
(ii) a specially negotiated rate arrangement is entered into, but only if the user is prohibited by federal law
from paying the generally applicable rates, and the rates established are as comparable as reasonably
possible to the generally applicable rates. An arrangement that does not otherwise convey priority rights
or other preferential benefits is not treated, nevertheless, as general public use if the term of the use
under the arrangement, including all renewal options, is greater than 200 days. For this purpose, a right
of first refusal to renew use under the arrangement is not treated as a renewal option if (i) the
compensafion for the use under the arrangement is redetermined at generally applicable, fair market
value rates that are in effect at the fime of renewal; and (ii) the use ofthe financed property under the
same or similar arrangements is predominanfiy by natural persons who are not engaged in a trade or
business.
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Agreement No.: 13-843-550
Project No.: C-06-7847-110
4.10 No Sale, Lease or Private Operafion of the Project.
The Project will not be sold or otherwise disposed of, in whole or in part, to any person who is not a
Governmental Unit prior to the final maturity date of the Obligafion. The Project will not be leased to any
person or entity that is not a Governmental Unit prior to the final maturity date ofthe Obligafion. The
Recipient will not enter any contract or arrangement or cause or permit any contract or arrangement to be
entered (to the extent of its reasonable control) with persons or entities that are not Governmental Units if
that contract or arrangement would confer on such persons or entities any right to use the Project on a
basis different from the right of members of the general public. The contracts or arrangements
contemplated by the preceding sentence include but are not limited to management contracts, take or pay
contracts or put or pay contracts, and capacity guarantee contracts.
4.11 No Disproportionate or Unrelated Use.
None of the Project Funds or the Project are, have been, or will be used for a Private Use that is
unrelated or disproportionate to the governmental use of the Project Funds.
4.12 Management and Service Contracts.
With respect to management and service contracts, the determination of whether a particular use
constitutes Private Use shall be determined on the basis of applying Secfion 1.141-3(b)(4) ofthe Treasury
Regulations, Revenue Procedure 97-13, and other applicable rules and regulafions. As ofthe date
hereof, none of the Project Funds or the Project are being used to provide property subject to contracts or
other arrangements with persons or entities engaged in a trade or business (other than Governmental
Units) that involve the management of property or the provision of services that do not comply with the
standards ofthe Treasury Regulafions and Revenue Procedure 97-13.
Except to the extent the Recipient has received an opinion of counsel expert in the issuance of state and
local government bonds the interest on which is excluded from gross income under Secfion 103 ofthe
Code ("Nationally-Recognized Bond Counsel") and satisfactory to the State Water Board and the Bank to
the contrary, the Recipient will not enter into any management or service contracts with any person or
entity that is not a Governmental Unit for services to be provided with respect to the Project except with
respect to contracts where the following requirements are complied with: (i) the compensation is
reasonable for the services rendered; (ii) the compensafion is not based, in whole or in part, on a share of
net profits from the operation of the Project; (iii) not more than twenty percent (20%) of the voting power
of the Recipient in the aggregate may be vested in the service provider and its directors, officers,
shareholders, and employees and vice versa; (iv) any overiapping board members between the Recipient
and the service provider must not include the chief executive officer or executive director of either, or their
respective governing bodies; and (v):
(a) At least ninety-five percent (95%) of the compensation for services for each annual period
during the term of the contract is based on a periodic fixed fee which is a stated dollar amount
for services rendered for a specified period of fime. The stated dollar amount may
automafically increase according to a specified objecfive external standard that is not linked to
the output or efficiency of a facility, e.g., the Consumer Price Index and similar external indices
that track increases in prices in an area or increases in revenues or costs in an industry are
objecfive external standards. A fee shall not fail to qualify as a periodic fixed fee as a result of
a one (1) fime incenfive award during the term ofthe contract under which compensafion
automatically increases when a gross revenue or expense target (but not both) is reached if
that award is a single stated dollar amount. The term ofthe contract, including all renewal
options, must not exceed the lesser of eighty percent (80%) of the reasonably expected useful
life ofthe financed property and fifteen (15) years (twenty (20) years for "public utility property"
within the meaning of Section 168(i)(10) ofthe Code);
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Agreement No.: 13-843-550
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(b) At least eighty percent (80%) ofthe compensafion for services for each annual period during
the term of the contract is based on a periodic fixed fee. The term of the contract, including all
renewal options, must not exceed the lesser of eighty percent (80%) of the reasonably
expected useful life ofthe financed property and ten (10) years. A one (1) fime incenfive award
during the term of the contract similar to the award described in subsecfion (a) above is
permitted under this option as well;
(c) At least fifty percent (50%) of the compensafion for services for each annual period during the
term of the contract is based on a periodic fixed fee or all of the compensation for services is
based on a capitation fee or combination of a periodic fixed fee and a capitafion fee. A
capitation fee is a fixed periodic amount for each person for whom the service provider or the
Recipient assumes the responsibility to provide all needed services for a specified period so
long as the quantity and type of services actually provided to covered persons vary
substantially; e.g., a fixed dollar amount payable per month to a service provider for each
member of a plan for whom the provider agrees to provide all needed services for a specified
period. A capitation fee may include a variable component of up to twenty percent (20%) ofthe
total capitation fee designed to protect the service provider against risks such as catastrophic
loss. The term of the contract, including all renewal opfions, must not exceed five (5) years.
The contract must be terminable by the Recipient on reasonable notice without penalty or
cause, at the end of the third year of the contract;
(d) All of the compensation for services is based on a per-unit fee or a combination of a per-unit
fee and a periodic fee. A per-unit fee is defined to mean a fee based on a unit of service
provided as specified in the contract or othenwise specifically determined by an independent
third party, such as the administrator of the program or the Recipient; e.g., a stated dollar
amount for each specified procedure performed, car parked or passenger mile is a per-unit fee.
The term of the contract, including all renewal opfions, must not exceed three (3) years. The
contract must be terminable by the Recipient on reasonable nofice, without penalty or cause, at
the end of the second year of the contract term; or
(e) All of the compensation for sen/ices is based on a percentage of fees charged or a combination
of a per-unit fee and a percentage of revenue or expense fee. During the start up period,
however, compensation may be based on a percentage of gross revenues, adjusted gross
revenues, or expenses of a facility. The term ofthe contract, including renewal opfions, must
not exceed two (2) years. The contract must be terminable by the Recipient on reasonable
notice without penalty or cause, at the end of the first year. This type of contract is permissible
only with respect to contracts under which the service provider primarily provides services to
third parties, and management contracts involving a facility during an initial start-up period for
which there have been insufficient operations to establish a reasonable estimate of the amount
of the annual gross revenues and expenses (e.g., a contract for general management services
for the first year of the operations).
If the compensafion terms of a management or service contract are materially revised, the
requirements for compensation terms must be retested as ofthe date ofthe material revision
and the management or service contract is treated as one that was newly entered into as of the
date ofthe material revision.
A renewal opfion, for purposes of the foregoing, is defined to mean a provision under which the
service provider has a legally enforceable right to renew the contract. Thus, for example, a
provision under which a contract is automatically renewed for one (1) year periods absent
cancellation by either party is not a renewal option, even if it is expected to be renewed.
A cancellafion penalty is defined to include a limitation on the Recipient's ability to compete with
the service provider, a requirement that the Recipient purchase equipment, goods, or services
from the service provider, and a requirement that the Recipient pay liquidated damages for
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City of Vista
Agreement No.: 13-843-550
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cancellation of the contract; in comparison, a requirement effective on cancellafion that the
Recipient reimburse the service provider for ordinary and necessary expenses or a restricfion
against the Recipient hiring key personnel of the service provider is generally not a contract
terminafion penalty. Another contract between the service provider and the Recipient, such as
an Installment Sale Agreement or guarantee by the service provider, is treated as creafing a
contract terminafion penalty if that contract contains tenns that are not customary or arm's
length, or that could operate to prevent the Recipient from terminating the contract (e.g.,
provisions under which the contract terminates if the management contract is terminated or that
places substantial restrictions on the selection of a substitute service provider).
The sen/ice provider must not have any role or relafionship with the Recipient, that, in effect, substantially
limits the Recipient's ability to exercise its rights, including cancellafion rights, under the contract, based
on all the facts and circumstances.
4.13 No Disposifion of Financed Property.
The Recipient does not expect to sell or otherwise dispose of any portion of the Project, in whole or in
part, prior to the final maturity date of the Obligafion.
4.14 Useful Life of Project.
The economic useful life of the Project, commencing at Project Completion, is at least equal to the term of
this Agreement, as set forth on Exhibit B hereto.
4.15 Installment Payments.
Installment Payments generally are expected to be derived from assessments, taxes, fees, charges or
other current revenues ofthe Recipient in each year, and such current revenues are expected to equal or
exceed the Installment Payments during each payment period. Any amounts accumulated in a sinking
fund or bona fide debt service fund to pay Installment Payments (whether or not deposited to a fund or
account established by the Recipient) will be disbursed to pay Installment Payments within thirteen
months of the inifial date of accumulafion or deposit. Any such fund used for the payment of Installment
Payments will be depleted once a year except for a reasonable carryover amount not exceeding earnings
on such fund or one-twelfth of the Installment Payments in either case for the immediately preceding
year.
4.16 No Other Replacement Proceeds.
The Recipient will not use any of the Project Funds to replace or substitute other funds of the Recipient
that were othenwise to be used to finance the Project or which are or will be used to acquire securities,
obligafions or other investment property reasonably expected to produce a yield that is materially higher
than the yield on the Bonds.
4.17 No Sinking or Pledged Fund.
Except as set forth in Section 4.18 below, the Recipient will not create or establish any sinking fund or
pledged fund which will be used to pay Installment Payments on the Obligafion within the meaning of
Secfion 1.148-1 (c) of the Treasury Regulations. If any sinking fund or pledged fund comes into being with
respect to the Obligation before the Obligafion has been fully refired which may be used to pay the
Installment Payments, the Recipient will invest such sinking fund and pledged fund moneys at a yield that
does not exceed the yield on the Bonds.
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4.18 Reserve Amount.
The State Water Board requires that the Recipient maintain and fund a separate account in an amount
equal to one (1) year of debt service with respect to the Obligafion (the "Reserve Amount"). The
Recipient represents that the Reserve Amount is and will be available to pay debt service with respect to
the Obligation, if and when needed. The Reserve Amount consists solely of revenues of the Recipient
and does not include any proceeds of any obligations the interest on which is excluded from gross
income for federal income tax purposes or investment earnings thereon. The aggregate of the Reserve
Amount, up to an amount not exceeding the lesser of (i) ten percent of the aggregate principal amount of
the Obligation, (ii) the maximum annual debt service with respect to the Obligation, or (iii) 125 percent of
the average annual debt service with respect to the Obligafion, will be treated as a reasonably required
reserve fund.
4.19 Reimbursement Resolution.
The "reimbursement resolufion" adopted by the Recipient is incorporated herein by reference, pursuant to
Exhibit A.
4.20 Reimbursement Expenditures.
A portion of the Project Funds will be applied to reimburse the Recipient for Project costs paid before the
date hereof. No portion of Project Funds will be applied to reimburse the Recipient for a Project cost
(i) paid prior to sixty (60) days prior to the adoption of a declarafion of official intent to finance the Project,
(ii) paid more than eighteen (18) months prior to the date hereof or with respect to a facility placed-in-
service more than eighteen (18) months prior to the date hereof, whichever is later, and (iii) paid more
than three (3) years prior to the date hereof, unless such cost is attributable to a "preliminary
expenditure." Preliminary expenditure for this purpose means architectural, engineering, surveying, soil
tesfing and similar costs incurred prior to the commencement of construcfion or rehabilitafion of the
Project, but does not include land acquisifion, site preparafion and similar costs incident to the
commencement of acquisifion, construcfion or rehabilitation of the Project. Preliminary expenditures may
not exceed 20% of the costs of the Project financed with the Obligafion.
4.21 Change in Use of the Project.
The Recipient reasonably expects to use all Project Funds and the Project for the entire stated term to
maturity of the Obligafion. Absent an opinion of Nafionally-Recognized Bond Counsel to the effect that
such use of Project Funds will not adversely affect the exclusion from federal gross income of interest on
the Bonds pursuant to Section 103 ofthe Code, the Recipient will use all Project Funds and the Project
solely as set forth in the Agreement.
4.22 Rebate Obligations.
If the Recipient safisfies the requirements of one of the spending excepfions to rebate specified in Section
1.148-7 ofthe Treasury Regulations, amounts earned from investments, if any, acquired with the Project
Funds will not be subject to the rebate requirements imposed under Section 148(f) of the Code. If the
Recipient fails to satisfy such requirements for any period, it will notify the State Water Board and the
Bank immediately and will comply with the provisions of the Code and the Treasury Regulafions at such
fime, including the payment of any rebate amount or any yield reducfion payments calculated by the State
Water Board or the Bank.
4.23 No Federal Guarantee.
The Recipient will not direcfiy or indirecfiy use any of the Project Funds in any manner that would cause
the Bonds to be "federally guaranteed" within the meaning of Secfion 149(b) of the Code, taking into
account various exceptions including any guarantee related to investments during an inifial temporary
20
City of Vista
Agreement No : 13-843-550
Project No.: C-06-7847-110
period unfil needed for the governmental purpose of the Bonds, investments as part of a bona fide debt
service fund, investments of a reasonably required reserve or replacement fund, investments in bonds
issued by the United States Treasury, investments in refunding escrow funds or certain other investments
permitted underthe Treasury Regulafions.
4.24 No Notices or Inquiries From IRS.
Within the last 10 years, the Recipient has not received any nofice of a final acfion ofthe Internal
Revenue Service that determines that interest paid or payable on any debt obligation ofthe Recipient is
or was includable in the gross income of an owner or beneficial owner thereof for federal income tax
purposes under the Code.
4.25 Amendments.
The provisions in this Article may be amended, modified or supplemented at any fime to reflect changes
in the Code upon obtaining written approval ofthe State Water Board and the Bank and an opinion of
Nafionally-Recognized Bond Counsel to the effect that such amendment, modificafion or supplement will
not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to Section
103 of the Code.
4.26 Applicafion.
The provisions in this Article IV shall apply to a Recipient only if any portion of the Project Funds is
derived from proceeds of Bonds.
4.27 Reasonable Expectafions.
The Recipient warrants that, to the best of its knowledge, information and belief, and based on the facts
and estimates as set forth in the tax covenants in this Article, the expectations of the Recipient as set
forth in this Article are reasonable. The Recipient is not aware of any facts or circumstances that would
cause it to quesfion the accuracy or reasonableness of any representafion made in the provisions in this
Article IV.
ARTICLE V MISCELLANEOUS PROVISIONS
5.1 Covenants.
(a) Tax Covenant. Notwithstanding any other provision hereof, the Recipient covenants and agrees
that it will comply with the Tax Covenants set forth in Article IV attached hereto if any portion of
the Project Funds is derived from proceeds of Bonds.
(b) Disclosure of Financial Informafion, Operafing Data, and Other Informafion. The Recipient
covenants to furnish such financial, operating and other data pertaining to the Recipient as may
be requested by the State Water Board to: (i) enable the State Water Board to cause the
issuance of Bonds and provide for security therefor; or (ii) enable any underwriter of Bonds
issued for the benefit ofthe State Water Board to comply with Rule 15c2-12(b)(5). The
Recipient further covenants to provide the State Water Board with copies of all continuing
disclosure reports and materials concerning the Recipient required by the terms of any
financing other than this Agreement and to submit such reports to the State Water Board at the
same fime such reports are submitted to any disseminafion agent, trustee, nafionally
recognized municipal securifies informafion repository, the Municipal Securities Rulemaking
Board's Electronic Municipal Market Access (EMMA) website or other person or entity.
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Agreement No.: 13-843-550
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5.2 Assignability.
The Recipient agrees and consents to any pledge, sale, or assignment to the Bank or a trustee for the
benefit of the owners of the Bonds, if any, at any time of any portion of the State Water Board's estate,
right, tifie, and interest and claim in, to and under this Agreement and the right to make all related waivers
and agreements in the name and on behalf of the State Water Board, as agent and attorney-in-fact, and
to perform all other related acts which are necessary and appropriate under this Agreement, if any, and
the State Water Board's estate, right, title, and interest and claim in, to and under this Agreement to
Installment Payments (but excluding the State Water Board's rights to Addifional Payments and to
nofices, opinions and indemnificafion under each Obligafion). This Agreement is not assignable by the
Recipient, either in whole or in part, without the consent of the State Water Board in the form of a formal
written amendment to this Agreement.
5.3 State Reviews and Indemnificafion.
The parties agree that review or approval of Project plans and specifications by the State Water Board is
for administrative purposes only and does not relieve the Recipient of its responsibility to property plan,
design, construct, operate, and maintain the Project. To the extent permitted by law, the Recipient
agrees to indemnify, defend, and hold harmless the State Water Board, the Bank, and any trustee, and
their officers, employees, and agents for the Bonds, if any (collectively, "Indemnified Persons"), against
any loss or liability arising out of any claim or acfion brought against any Indemnified Persons from and
against any and all losses, claims, damages, liabilities, or expenses, of every conceivable kind, character,
and nature whatsoever arising out of, resulfing from, or in any way connected with (1) the System or the
Project or the condifions, occupancy, use, possession, conduct, or management of, work done in or
about, or the planning, design, acquisifion, installation, or construcfion, ofthe System or the Projector
any part thereof; (2) the carrying out of any of the transactions contemplated by this Agreement or any
related document; (3) any violafion of any applicable law, rule or regulafion, any environmental law
(including, without limitafion, the Federal Comprehensive Environmental Response, Compensafion and
Liability Act, the Resource Conservafion and Recovery Act, the California Hazardous Substance Account
Act, the Federal Water Pollution Control Act, the Clean Air Act, the Toxic Substances Control Act, the
Occupational Safety and Health Act, the Safe Drinking Water Act, the California Hazardous Waste
Control Law, and California Water Code Secfion 13304, and any successors to said laws), rule or
regulation or the release of any toxic substance on or near the System; or (4) any untrue statement or
alleged untrue statement of any material fact or omission or alleged omission to state a material fact
necessary to make the statements required to be stated therein, in light of the circumstances under which
they were made, not misleading with respect to any informafion provided by the Recipient for use in any
disclosure document utilized in connecfion with any of the transacfions contemplated by this Agreement.
To the fullest extent permitted by law, the Recipient agrees to pay and discharge any judgment or award
entered or made against Indemnified Persons with respect to any such claim or acfion, and any
settlement, compromise or other voluntary resolufion. The provisions of this secfion shall survive the
discharge of the Recipient's Obligation hereunder.
5.4 Terminafion; Immediate Repayment; Interest.
(a) This Agreement may be terminated by written notice during construcfion of the Project, or
thereafter at any time prior to complete repayment by the Recipient, at the opfion ofthe State
Water Board, upon violation by the Recipient of any material provision of this Agreement after
such violation has been called to the attention of the Recipient and after failure of the Recipient
to bring itself into compliance with the provisions of this Agreement within a reasonable fime as
established by the Division.
(b) In the event of such terminafion, the Recipient agrees, upon demand, to immediately repay to
the State Water Board an amount equal to Installment Payments due hereunder, including
accrued interest, and all penalty assessments due. In the event of terminafion, interest shall
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Agreement No.: 13-843-550
Project No.: C-06-7847-110
accrue on all amounts due at the highest legal rate of interest from the date that nofice of
termination is mailed to the Recipient to the date of full repayment by the Recipient.
(c) Where the Recipient is a private entity that has been determined to have violated an applicable
prohibifion in the Prohibition Statement below or has an employee who is determined by USEPA
to have violated an applicable prohibifion in the Prohibifion Statement below that is either
associated with perfonnance under this aware or imputed to the Recipient using the standards
and due process for imputing the conduct of an individual to an organization pursuant to 2 CFR
Part 180, the Recipient acknowledges and agrees that this Obligafion may become immediately
due and payable and that penalfies up to $175 million may be due by the Recipient to the State
Water Board, in addifion to any other criminal or civil penalfies that may become due. The
Recipient, its employees, its contractors, and any subrecipients or subcontractors may not
engage in trafficking in persons, procure a commercial sex act, or use forced labor.
5.5 Income Restricfions.
The Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest thereon)
accruing to or received by the Recipient under this Agreement shall be paid by the Recipient to the State,
to the extent that they are property allocable to costs for which the Recipient has been reimbursed by the
State under this Agreement.
5.6 Prevailing Wages.
The Recipient agrees to be bound by all the provisions of State Labor Code Section 1771 regarding
prevailing wages. The Recipient shall monitor all agreements subject to reimbursement from this
Agreement to assure that the prevailing wage provisions of State Labor Code Section 1771 are being
met.
5.7 Timeliness.
Time is of the essence in this Agreement.
5.8 Governing Law.
This contract is governed by and shall be interpreted in accordance with the laws of the State of
California.
5.9 Amendment.
No amendment or variafion ofthe terms of this Agreement shall be valid unless made in writing, signed
by the parties and approved as required. No oral understanding or agreement not incorporated in this
Agreement is binding on any of the parties.
5.10 Bonding.
Where contractors are used, the Recipient shall not authorize construcfion to begin until each contractor
has furnished a performance bond in favor of the Recipient in the following amounts: faithful performance
(100%) of contract value; labor and materials (100%) of contract value. This requirement shall not apply
to any contract for less than $20,000.00.
5.11 Compliance with Law, Regulations, etc.
(a) The Recipient agrees that it will, at all times, comply with and require its contractors and
subcontractors to comply with all applicable federal and state laws, rules, guidelines,
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
regulafions, and requirements. Without limitafion of the foregoing, the Recipient agrees that, to
the extent applicable, the Recipient will:
(1) Comply with the provisions of the adopted environmental mitigafion plan for the term of this
Agreement;
(2) Comply with the State Water Board's "Policy for Implemenfing the Clean Water State
Revolving Fund," dated May 7, 2013;
(3) Comply with and require its contractors and subcontractors on the Project to comply with
federal DBE requirements; and
(4) Comply with and require its contractors and subcontractors to comply with the list of federal
laws attached as Exhibit E.
5.12 Conflict of Interest.
The Recipient certifies that it is in compliance with applicable state and/or federal conflict of interest laws.
5.13 Damages for Breach Affecting Tax Exempt Status or Federal Compliance
In the event that any breach of any of the provisions of this Agreement by the Recipient shall result in the
loss of tax exempt status for any bonds ofthe State or any subdivision or agency thereof, including Bonds
issued on behalf of the State Water Board, or if such breach shall result in an obligafion on the part of the
State or any subdivision or agency thereof to reimburse the federal government by reason of any
arbitrage profits, the Recipient shall immediately reimburse the State or any subdivision or agency thereof
in an amount equal to any damages paid by or loss incurred by the State or any subdivision or agency
thereof due to such breach.
In the event that any breach of any of the provisions of this Agreement by the Recipient shall result in the
failure of Project Funds to be used pursuant to the provisions of this Agreement, or if such breach shall
result in an obligation on the part of the State or any subdivision or agency thereof to reimburse the
federal government, the Recipient shall immediately reimburse the State or any subdivision or agency
thereof in an amount equal to any damages paid by or loss incurred by the State or any subdivision or
agency thereof due to such breach.
5.14 Disputes.
(a) The Recipient may appeal a staff decision within 30 days to the Deputy Director of the Division
or designee, for a final Division decision. The Recipient may appeal a final Division decision to
the State Water Board within 30 days. The Office of the Chief Counsel of the State Water Board
will prepare a summary of the dispute and make recommendafions relative to its final
resolution, which will be provided to the State Water Board's Executive Director and each State
Water Board Member. Upon the motion of any State Water Board Member, the State Water
Board will review and resolve the dispute in the manner determined by the State Water Board.
Should the State Water Board determine not to review the final Division decision, this decision
will represent a final agency action on the dispute.
(b) This clause does not preclude considerafion of legal questions, provided that nothing herein
shall be construed to make final the decision of the State Water Board, or any official or
representative thereof, on any question of law.
(c) Recipient shall continue with the responsibilities under this Agreement during any dispute.
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Agreement No.: 13-843-550
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5.15 Independent Actor.
The Recipient, and its agents and employees, if any, in the performance of this Agreement, shall act in an
independent capacity and not as officers, employees, or agents of the State Water Board.
5.16 Non-Discrimination Clause.
(a) During the performance of this Agreement, Recipient and its contractors and subcontractors
shall not unlawfully discriminate, harass, or allow harassment against any employee or
applicant for employment because of sex, race, color, ancestry, religious creed, nafional origin,
sexual orientafion, physical disability (including HIV and AIDS), mental disability, medical
condifion (cancer), age (over40;, marital status, and denial of family care leave.
(b) The Recipient, its contractors, and subcontractors shall insure that the evaluation and treatment
of their employees and applicants for employment are free from such discrimination and
harassment.
(c) The Recipient, its contractors, and subcontractors shall comply with the provisions of the Fair
Employment and Housing Act and the applicable regulations promulgated thereunder. (Gov.
Code, §12990, subds. (a)-(f) et seq.; Cal. Code Regs., tit. 2, § 7285 et seq.) Such regulafions
are incorporated into this Agreement by reference and made a part hereof as if set forth in full.
(d) The Recipient, its contractors, and subcontractors shall give written notice of their obligafions
under this clause to labor organizations with which they have a collecfive bargaining or other
agreement.
(e) The Recipient shall include the nondiscrimination and compliance provisions of this clause in all
subcontracts to perform work under the Agreement.
5.17 No Third Party Rights.
The parties to this Agreement do not create rights in, or grant remedies to, any third party as a beneficiary
of this Agreement, or of any duty, covenant, obligafion, or undertaking established herein.
5.18 Operafion and Maintenance; Insurance.
The Recipient agrees to sufficienfiy and property staff, operate and maintain all portions of the Project
during its useful life in accordance with all applicable state and federal laws, rules and regulafions.
The Recipient will procure and maintain or cause to be maintained insurance on the System with
responsible insurers, or as part of a reasonable system of self-insurance, in such amounts and against
such risks (including damage to or destrucfion of the System) as are usually covered in connecfion with
systems similar to the System. Such insurance may be maintained by the maintenance of a self-
insurance plan so long as any such plan provides for (i) the establishment by the Recipient of a separate
segregated self-insurance fund funded in an amount determined (inifially and on at least an annual basis)
by an independent insurance consultant experienced in the field of risk management employing accepted
actuarial techniques and (ii) the establishment and maintenance of a claims processing and risk
management program.
In the event of any damage to or destruction of the System caused by the perils covered by such
insurance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement of the
damaged or destroyed portion ofthe System. The Recipient shall begin such reconstrucfion, repair or
replacement as expedifiously as possible, and shall pay out of such net proceeds all costs and expenses
in connecfion with such reconstrucfion, repair or replacement so that the same shall be completed and
the System shall be free and clear of all claims and liens. If such net proceeds are insufficient to enable
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Agreement No.: 13-843-550
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the Recipient to pay all remaining unpaid principal portions ofthe Installment Payments, the Recipient
shall provide addifional funds to restore or replace the damaged portions ofthe System.
5.19 Permits, Subcontracfing, and Remedies.
The Recipient shall comply in all material respects with all applicable federal, state and local laws, rules
and regulafions. Recipient shall procure all permits, licenses and other authorizafions necessary to
accomplish the work contemplated in this Agreement, pay all charges and fees, and give all notices
necessary and incidental to the due and lawful prosecution of the work. Signed copies of any such
permits or licenses shall be submitted to the Division before construction begins.
5.20 Recipient's Responsibility for Work.
The Recipient shall be responsible for all work and for persons or entifies engaged in work performed
pursuant to this Agreement, including, but not limited to, contractors, subcontractors, suppliers, and
providers of services. The Recipient shall be responsible for any and all disputes arising out of its
contracts for work on the Project. The State Water Board will not mediate disputes between the Recipient
and any other enfity concerning responsibility for performance of work.
5.21 Related Litigafion.
Under no circumstances may a Recipient use funds from any disbursement under this Agreement to pay
costs associated with any lifigation the Recipient pursues against the State Water Board or any Regional
Water Quality Control Board. Regardless of the outcome of any such litigafion, and notwithstanding any
conflicfing language in this Agreement, the Recipient agrees to complete the Project funded by this
Agreement or to repay all of the disbursed funds plus interest.
5.22 Rights in Data.
The Recipient agrees that all data, plans, drawings, specificafions, reports, computer programs, operafing
manuals, notes, and other written or graphic work produced in the performance of this Agreement are
subject to the rights of the State as set forth in this section. The State shall have the right to reproduce,
publish, and use all such work, or any part thereof, in any manner and for any purposes whatsoever and
to authorize others to do so. If any such work is copyrightable, the Recipient may copyright the same,
except that, as to any work which is copyrighted by the Recipient, the State reserves a royalty-free,
nonexclusive, and irrevocable license to reproduce, publish, and use such work, or any part thereof, and
to authorize others to do so, and to receive electronic copies from the Recipient upon request. (40 CFR
31.34, 31.36)
5.23 State Water Board Acfion; Costs and Attorney Fees.
The Recipient agrees that any remedy provided in this Agreement is in addition to and not in derogation
of any other legal or equitable remedy available to the State Water Board as a result of breach of this
Agreement by the Recipient, whether such breach occurs before or after complefion of the Project, and
exercise of any remedy provided by this Agreement by the State Water Board shall not preclude the State
Water Board from pursuing any legal remedy or right which would otherwise be available. In the event of
litigafion between the parties hereto arising from this Agreement, it is agreed that each party shall bear its
own costs and attorney fees.
5.24 Unenforceable Provision.
In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the
parties agree that all other provisions of this Agreement have force and effect and shall not be affected
thereby.
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Agreement No.: 13-843-550
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5.25 Useful Life.
The economic useful life ofthe Project, commencing at Project Completion, is at least equal to the term of
this Agreement, as set forth in Exhibit B hereto.
5.26 Venue.
The State Water Board and the Recipient hereby agree that any action arising out of this Agreement shall
be filed and maintained in the Superior Court in and for the County of Sacramento, Califomia.
5.27 Waiver and Rights of the State Water Board.
Any waiver of rights by the State Water Board with respect to a default or other matter arising under the
Agreement at any fime shall not be considered a waiver of rights with respect to any other default or
matter.
Any rights and remedies of the State Water Board provided for in this Agreement are in addition to any
other rights and remedies provided by law.
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Agreement No: 13-843-550
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IN WITNESS WHEREOF, this Agreement has been executed fay the parties hereto.
CITY OF VISTA:
By_
Name: P'atrick Johnion
Title: City Manager
Date
STATE WATER RESOURCES CONTROL BOARD:
By: ^ ' A**"^
Name: 4ohn S Ru^ll
Title; Acting Deputy Director
Division of Rnartdal Assistance
Date: <g/lo/K
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Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT A - SCOPE OF WORK & INCORPORATED DOCUMENTS
1. The Recipient agrees to start construction no later than the estimated date of August 1, 2014.
2. The esfimated Complefion of Construction date is hereby established as August 1, 2016.
3. The Recipient agrees to ensure that its final Request for Disbursement is received by the Division no
later than six months after Completion of Construction, unless prior approval has been granted by the
Division. If the Recipient fails to do so, then the undisbursed balance of this Agreement will be
deobligated.
4. Incorporated by reference into this Agreement are the following documents:
(b) the State Water Resources Control Board Order No. 2006-0003-DWQ;
(a) the
the
(b) the
(c) the
(d) the
(e) the
5. Scope of Work.
(a) Project Objecfives
The improvements are necessary as a replacement for the exisfing sewer line and lift stafion,
which are under-sized, outdated and nearing the end of their useful life. The facilities also do not
have sufficient capacity to convey future projected build-out wastewater flows ofthe urbanized
service area. The new project is designed to convey the future anticipated build-out flows.
(b) Project Description
The project involves the installafion of new sewer conveyance facilifies (gravity, force main and lift
stafion) on the Vista/Carisbad Sewer Interceptor System (segments VCl 1 through VCl5), joinfiy
owned by the cities of Vista and Carisbad. These segments are part of a regional sewage
collection system which receives sewage flow from the cities of Vista (inland) and Calrsbad
(coastal), located in North San Diego County. Along the length ofthe sewer route from north to
south, the project includes a replacement bridge to support a 54-inch replacement sewer pipe
across the Agua Hedionda Lagoon channel, the replacement of the exisfing Agua Hedionda
Sewer Lift Stafion and 30-inch force main, and new 54-inch gravity sewer terminafing at the
Encina Wastewater Authority (EWA) regional treatment facility.
A-1
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT B - PROJECT FINANCING AMOUNT
1. Estimated Reasonable Cost. The estimated reasonable cost of the total Project, including associated
planning and design costs, is twenty one million, nine hundred ninety one thousand, eight hundred
sixty nine dollars and no cents ($21,991,869.00).
2. Project Funding. Subject to the terms of this Agreement, the State Water Board agrees to provide
Project Funds in the amount of up to is twenty one million, nine hundred ninety one thousand, eight
hundred sixty nine dollars and no cents ($21,991,869.00).
3. Repayment, Interest Rate, and Charges. The Recipient agrees to repay all Project Funds according to
the schedule in Exhibit C at an interest rate of one and nine tenths percent (1.9%) per annum. The
Recipient agrees to pay an Administrafive Service Charge of zero percent (0.0%) per annum. The
Recipient agrees to pay a Small Community Grant Fund Charge at zero percent (0.0%) per annum.
4. The term of this agreement is from May 2, 2014 to August 1, 2036.
5. Budget costs are contained in the Project Cost Table, which is part of Exhibit A-FBA. (This Agreement
will be amended to incorporate Exhibit A-FBA.)
6. Construcfion costs and disbursements are not available unfil after this Agreement has been amended
to incorporate Exhibit A-FBA.
Any construcfion expenses incurred by the Recipient prior to such amendment of this Agreement are
at the Recipient's risk. Failure to begin construcfion according to the timelines set forth in Exhibit A will
require the Recipient to repay to the State Water Board all disbursed Project Funds, including planning
and design allowances.
B-1
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT C - CWSRF PAYMENT SCHEDULE
See the attached preliminary CWSRF Payment Schedule dated May 15, 2014. The final CWSRF
Payment Schedule will be fonwarded to the Recipient after all disbursements have been paid and
construction of the Project has been completed.
C-1
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT D — SPECIAL CONDITIONS
Recipient agrees to perform the following special condifions:
Technical Special Conditions as follows:
Buy American. Unless the Recipient has obtained a waiver from USEPA on file with the State Water
Board, the Recipient shall not use Project Funds to purchase "iron and steel products" produced outside
of the United States. Unless the Recipient has obtained a waiver from USEPA on file with the State
Water Board, the Recipient hereby certifies that all "iron and steel products" used in the Project were or
will be produced in the United States. For purposes of this section, the term "iron and steel products"
means the following products made primarily of iron or steel: lined or unlined pipes and fittings, manhole
covers and other municipal casfings, hydrants, tanks, flanges, pipe clamps and restraints, valves,
structural steel, reinforced precast concrete, and construction materials.
Property Rights. The Recipient agrees and acknowledges that the State Water Board will not disburse
construcfion funds to the Recipient until the Recipient has provided the Division with an opinion from
counsel that the Recipient has perfected its right to use the property where the Project is located for the
purposes contemplated in this Agreement for a period exceeding the term of this Agreement.
Environmental Special Condifions as follows:
The following documents are incorporated by reference and the Recipient shall comply with the
condifions herein:
1. The letter (Reference No. EPA_2013_0426_001) dated June 21, 2013, from Carol Roland-Nawi,
Ph.D. at the Office of Historic Preservafion, Department of Parks and Recreafion to Ahmad Kashkoli
ofthe State Water Board regarding Secfion 106 consultafion.
2. The City of Carisbad's November 2004 Habitat Management Plan.
In accordance with the September 12, 2012 adopted Mifigafion Monitoring and Reporting Program, the
Recipient shall comply with the mifigafion measures, including the following:
• AQ-1 through AQ-3 for air quality
• BIO-1 through BIO-12 for biological resources,
• CUL-1 through CUL-3 for cultural resources,
• GEO-1 for geology and soils, and
• HAZ-1 through HAZ-5 for hazards and hazardous materials.
The Recipient will make no changes in the Project, construction area, or special condifions, without
obtaining prior approval from the State Water Board and the State Historic Preservation Officer. The
Recipient understands that it is prohibited from making any such changes without those approvals.
REPORTING TO THE STATE WATER BOARD:
The Recipient shall include the status of its environmental compliance with the measures identified in this
Exhibit D in the Project Quarteriy Construcfion Status Reports, and shall report its environmental
compliance efforts with the measures identified herein in the final Project Quarteriy Construcfion Status
Report for submittal to the State Water Board after the completion of the Project construction.
D-1
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT D — SPECIAL CONDITIONS
Financial Special Conditions as follows:
1. The Recipient shall covenant to establish rates and charges in amounts sufficient to generate net
revenues of the Sewer Enterprise Fund equal to at least 1.10 times the total annual debt service.
2. The Recipient shall establish a restricted reserve fund, held in the Sewer Enterprise Fund, equal to
one year's debt service prior to the construction completion date of the project. The restricted reserve
fund shall be maintained for the full term ofthe finance agreement and shall be subject to lien and
pledge as security for the Obligafion,
D-2
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT E — FEDERAL CONDITIONS & CROSS-CUTTERS
The Recipient agrees to comply with the following condifions required by USEPA:
1. No Recipient or subrecipient may receive funding under this Agreement unless it has provided its
DUNS number to the State Water Board. (2011 Cap Grant)
2. Execufive Compensafion. Where the Recipient received 80 percent or more of its annual gross
revenues from federal procurement contracts (and subcontracts) and $25,000,000 or more in
annual gross revenues from federal procurement contracts (and subcontracts), the Recipient
agrees to notify the State Water Board. The Recipient agrees to provide infonnation regarding
executive compensation to the State Water Board upon request, in order for the State Water Board
to comply with USEPA requirements.
3. Trafficking in Persons. The Recipient, its employees, contractors and subcontractors and their
employees may not engage in severe forms of trafficking in persons during the term of this
Agreement, procure a commercial sex act during the term of this Agreement, or use forced labor in
the perfonnance of this Agreement. The Recipient must include this provision in its contracts and
subcontracts under this Agreement. The Recipient must inform the State Water Board immediately
of any information regarding a violafion of the foregoing. The Recipient understands that failure to
comply with this provision may subject the State Water Board to loss of federal funds in the amount
of $101,065,000. The Recipient agrees to compensate the State Water Board for any such funds
lost due to its failure to comply with this condition, or the failure of its contractors or subcontractors
to comply with this condition. The State Water Board may unilaterally terminate this Agreement
and full repayment will be due immediately, if a subrecipient that is a private entity is determined to
have violated the foregoing. Trafficking Victims Protection Act of 2000.
4. Contractors, Subcontractors, Debarment and Suspension, Executive Order 12549; 2 CFR Part 180;
2 CFR Part 1532. The Recipient shall not subcontract with any party who is debarred or
suspended or othenwise excluded from or ineligible for participation in federal assistance programs
under Executive Order 12549, "Debarment and Suspension". The Recipient shall not subcontract
with any individual or organizafion on USEPA's List of Violafing Facilifies. (40 CFR, Part 31 35
Gov. Code 4477)
The Recipient certifies to the best of its knowledge and belief, that it and Its principals:
(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or
voluntarily excluded by any federal department or agency;
(b) Have not within a three (3) year period preceding this Agreement been convicted of or had a
civil judgment rendered against them for commission of fraud or a criminal offense in
connection with obtaining, attempfing to obtain, or performing a public (federal, state or local)
transaction or contract under a public transaction; violation of federal or state antitrust statutes
or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records,
making false statements, or receiving stolen property;
(c) Are not presently indicted for or othenwise criminally or civilly charged by a governmental entity
(federal, state or local) with commission of any ofthe offenses enumerated in paragraph (b) of
this certification; and
(d) Have not within a three (3) year period preceding this application/proposal had one or more
public transactions (federal, state or local) terminated for cause or default.
E-1
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT E — FEDERAL CONDITIONS & CROSS-CUTTERS
Suspension and debarment information can be accessed at http://www.sam.gov. The Recipient
represents and warrants that it has or will include a term or condifions requiring compliance with
this provision in all of its contracts and subcontracts under this Agreement. The Recipient
acknowledges that failing to disclose the information as required at 2 CFR 180.335 may result in
the termination, delay or negafion of this Agreement, or pursuance of legal remedies, including
suspension and debarment.
5. Anti-Lobbying Provisions (40 CFR Part 34) & Anti-Lifigafion Provisions (2 CFR 220, 225, or 230).
The Recipient shall ensure that no funds under this Agreement are used to engage in lobbying of
the federal government or in lifigation against the United States unless authorized under exisfing
law. The Recipient shall abide by 2 CFR 225 (OMB Circular A-87) (or, if not applicable, other
parallel requirements), which prohibits the use of federal grant funds for lifigafion against the United
States or for lobbying or other political acfivifies. The Recipient agrees to comply with 40 CFR Part
24, New Restricfions on Lobbying. The Recipient agrees to submit certification and disclosure
fonns in accordance with these provisions. In accordance with the Byrd Anfi-Lobbying Amendment,
any Recipient who makes a prohibited expenditure under 40 CFR Part 34 or fails to file the required
certification or lobbying forms shall be subject to a civil penalty of not less than $10,000 and not
more than $100,000 for each such expenditure. The Recipient shall abide by its respecfive 2 CFR
200, 225, or 230, which prohibits the use of federal grant funds for litigafion against the United
States or for lobbying or other polifical acfivifies.
6. Disadvantaged Business Enterprises. 40 CFR Part 33. The Recipient agrees to comply with the
requirements of USEPA's Program for Ufilizafion of Small, Minority and Women's Business
Enterprises. The DBE rule can be accessed at www.epa.qov/osbp . The Recipient shall comply
with, and agrees to require its prime contractors to comply with 40 CFR Secfion 33.301, and retain
all records documenfing compliance with the six good faith efforts.
7. The Recipient agrees to comply with the Davis-Bacon provisions attached as Exhibit G.
The Recipient agrees to comply with the following federal laws, as applicable to recipients of CWSRF
funding:
Environmental Authorities
1. Archeological and Historical Preservafion Act of 1974, Pub. L. 86-523, as amended, Pub. L. 93-291
16USC§469a-1.
2. Clean Air Act, Pub. L. 84-159, as amended.
3. Coastal Barrier Resources Act, Pub. L. 97-348, 96 Stat. 1653; 16 USC § 3501 et seq.
4. Coastal Zone Management Act, Pub. L. 92-583, as amended; 16 USC § 1451 et seq.
5. Endangered Species Act, Pub. L. 93-205, as amended; 16 USC § 1531 et seq..
6. Environmental Jusfice, Executive Order 12898.
7. Floodplain Management, Executive Order, 11988 as amended by Executive Order 12148.
8. Protecfion of Wetlands, Execufive Order 11990, as amended by Executive Order No. 12608.
E-2
«2013c8i14
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT E — FEDERAL CONDITIONS & CROSS-CUTTERS
9. Farmland Protecfion Policy Act, Pub. L. 97-98; 7 USC § 4201 et seq.
10. Fish and Wildlife Coordinafion Act, Pub. L. 85-624, as amended.
11. Nafional Historic Presen/afion Act of 1966, Pub. L. 89-665, as amended, 80 Stat. 917 (1966) 16
USC § 470 et seq.
12. Safe Drinking Water Act, Pub. L. 93-523, as amended; 42 USC § 300f et seq.
13. Wild and Scenic Rivers Act, Pub. L. 90-542, as amended, 82 Stat. 913; 16 USC § 1271 et seq.
14. Essenfial Fish Habitat Consultation. Pub. L. 94-265, as amended, 16 USC § 1801 et seq.
15. Recycled Materials. Executive Order 13101; Secfion 6002 Resource Conservafion and Recovery
Act-42 USC §6962.
Economic and Miscellaneous Authorifies
1. Demonstrafion Cifies and Metropolitan Development Act of 1966, Pub. L. 89-754, as amended,
Executive Order 12372/ 42 USC § 3331 et seq.
2. Procurement Prohibifions under Secfion 306 of the Clean Air Act and Secfion 508 of the Clean
Water Act, including Executive Order 11738, Administrafion ofthe Clean Air Act and the Federal
Water Pollution Control Act with Respect to Federal Contracts, Grants, or Loans; 42 USC § 7606;
33 USC § 1368; 40 CFR Part 31.
3. Uniform Relocafion and Real Property Acquisifion Policies Act, Pub. L. 91-646, as amended; 42
USC §§4601-4655
4.. Preservafion of Open Competifion and Government Neutrality Towards Government Contractors'
Labor Relafions on Federal and Federally Funded Construcfion Projects, EO 13202, as amended
by EO 13208.
6. Hotel and Motel Fire Safety Act of 1990 (PL 101-391, as amended). All conference, meefing,
convention, or training funded in whole or in part with federal funds shall comply with the protection
and control guidelines of this act. Recipients may search
http://www.usfa.dhs.qov/applicafions/hotel/.
7. Records and financial reporting requirements. 40 CFR Part 31.
8. Copyright requirements. 40 CFR Part 31.
Social Policy Authorifies
1. AgeDiscriminationActof1975, Pub. L. 94-135;42USC§6102.
2. Race Discriminafion. Title VI of the Civil Rights Act of 1964, Pub. L. 88-352.1; 42 USC § 2000d; 40
CFR Part 7.
E-3
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT E — FEDERAL CONDITIONS & CROSS-CUTTERS
3. Sex Discriminafion. Section 13 of the Federal Water Pollution Control Act Amendments of 1972,
Pub. L. 92-500 (the Clean Water Act); 33 USC § 1251; 40 CFR Part 7.
4. Disability Discrimination. Secfion 504 of the Rehabilitation Act of 1973, Pub. L. 93-112 (including
Executive Orders 11914 and 11250); 29 USC § 794; 40 CFR Part 7.
5. Equal Employment Opportunity, Executive Order 11246.
6. Section 129 of the Small Business Administration Reauthorization and Amendment Act of 1988,
Pub. L. 100-590.
E-4
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT F — SCHEDULE OF MATERIAL OBLIGATIONS
Except for the following and the Obligation evidenced by this Agreement, the Recipient certifies that it has
no outstanding Material Obligations and that it is in compliance with all applicable addifional debt
provisions of the following:
The following outstanding debt is senior to the Obligafion:
Titie Interest
Rate
Total Amount Amount Remaining End Date
Not applicable.
The following outstanding debt is on parity with the Obligation:
Titie Interest
Rate
Total Amount Amount Remaining End Date
CWSRF C-06-5921-110 2.0% $3,426,573 $3,274,182.73 10/11/2032
CWSRF C-06-5698-110 2.2% $2,631,557 $2,505,609.04 01/25/2033
CWSRF C-06-5700-110 1.7% $3,072,168 $3,072,168 05/15/2034
The following outstanding debt is subordinate to the Obligation:
Title Interest
Rate
Total Amount Amount Remaining End Date
Not applicable.
F-1
v2013cgi14
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
1. Contract and Subcontract provisions for Recipients
(a) The Recipient shall insert in full in any contract in excess of $2,000 which is entered into for the
actual construction, alteration and/or repair, including painting and decorating, of a treatment
work under the CWSRF the following clauses:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work will be
paid unconditionally and not less often than once a week, and without
subsequent deduction or rebate on any account (except such payroll deductions
as are permitted by regulations issued by the Secretary of Labor under the
Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates
not less than those contained in the wage determination of the Secretary of
Labor which is attached hereto and made a part hereof, regardless of any
contractual relationship which may be alleged to exist between the contractor
and such laborers and mechanics.
Contributions made or costs reasonably anticipated for bona fide fringe benefits
under section 1(b)(2) ofthe Davis-Bacon Act on behalf of laborers or mechanics
are considered wages paid to such laborers or mechanics, subject to the
provisions of paragraph (a)(1)(iv) of this section; also, regular contributions made
or costs incurred for more than a weekly period (but not less often than quarteriy)
under plans, funds, or programs which cover the particular weekly period, are
deemed to be constructively made or incurred during such weekly period. Such
laborers and mechanics shall be paid the appropriate wage rate and fringe
benefits on the wage determination for the classification of work actually
performed, without regard to skill, except as provided in § 5.5(a)(4). Laborers or
mechanics performing work in more than one classificafion may be compensated
at the rate specified for each classification for the fime actually worked therein:
Provided, That the employer's payroll records accurately set forth the time spent
in each classification in which work is performed. The wage determination
(including any additional classificafion and wage rates conformed under
paragraph (a)(1)(ii) of this section) and the Davis-Bacon poster (WH-1321) shall
be posted at all times by the contractor and its subcontractors at the site of the
work in a prominent and accessible place where it can be easily seen by the
workers.
Subrecipients may obtain wage determinations from the U.S. Department of
Labor's web site, www.dol.gov.
(ii) (A) The Recipient, on behalf of EPA, shall require that any class of laborers or
mechanics, including helpers, which is not listed in the wage determinafion and
which is to be employed under the contract shall be classified in conformance
with the wage determination. The State award official shall approve a request for
an additional classification and wage rate and fringe benefits therefore only when
the following criteria have been met:
(1) The work to be performed by the classification requested is not
performed by a classificafion in the wage determinafion; and
G-1
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
(2) The classificafion is utilized in the area by the construcfion industry; and
(3) The proposed wage rate, including any bona fide fringe benefits, bears a
reasonable relafionship to the wage rates contained in the wage
determination.
(B) If the contractor and the laborers and mechanics to be employed in the
classificafion (if known), or their representafives, and the Recipient agree on the
classificafion and wage rate (including the amount designated for fringe benefits
where appropriate), documentafion of the acfion taken and the request, including
the local wage determination shall be sent by the Recipient to the State award
official. The State award official will transmit the request, to the Administrator of
the Wage and Hour Division, Employment Standards Administrafion, U.S.
Department of Labor, Washington, DC 20210 and to the EPA DB Regional
Coordinator concurrently. The Administrator, or an authorized representative, will
approve, modify, or disapprove every additional classificafion request within 30
days of receipt and so advise the State award official or will notify the State
award official within the 30-day period that additional fime is necessary.
(C) In the event the contractor, the laborers or mechanics to be employed in the
classification or their representatives, and Recipient do not agree on the
proposed classificafion and wage rate (including the amount designated for fringe
benefits, where appropriate), the award official shall refer the request and the
local wage determination, including the views of all interested parties and the
recommendation of the State award official, to the Administrator for
determination. The request shall be sent to the EPA DB Regional Coordinator
concurrently. The Administrator, or an authorized representative, will issue a
determinafion within 30 days of receipt ofthe request and so advise the
contracting officer or will notify the contracting officer within the 30-day period
that additional fime is necessary.
(D) The wage rate (including fringe benefits where appropriate) determined pursuant
to paragraphs (a)(1)(ii)(B) or (C) of this secfion, shall be paid to all workers
performing work in the classification under this contract from the first day on
which work is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of
laborers or mechanics includes a fringe benefit which is not expressed as an
houriy rate, the contractor shall either pay the benefit as stated in the wage
determinafion or shall pay another bona fide fringe benefit or an houriy cash
equivalent thereof.
(iv) If the contractor does not make payments to a trustee or other third person, the
contractor may consider as part of the wages of any laborer or mechanic the
amount of any costs reasonably anticipated in providing bona fide fringe benefits
under a plan or program. Provided, That the Secretary of Labor has found, upon
the written request of the contractor, that the applicable standards of the Davis-
Bacon Act have been met. The Secretary of Labor may require the contractor to
set aside in a separate account assets for the meeting of obligations under the
plan or program.
G-2
City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
(2) Withholding. The Recipient, shall upon written request of the EPA Award Official or an
authorized representative of the Department of Labor, withhold or cause to be withheld
from the contractor under this contract or any other Federal contract with the same prime
contractor, or any other federally-assisted contract subject to Davis-Bacon prevailing
wage requirements, which is held by the same prime contractor, so much of the accrued
payments or advances as may be considered necessary to pay laborers and mechanics,
including apprentices, trainees, and helpers, employed by the contractor or any
subcontractor the full amount of wages required by the contract. In the event of failure to
pay any laborer or mechanic, including any apprenfice, trainee, or helper, employed or
working on the site of the work, all or part of the wages required by the contract, the
(Agency) may, after written notice to the contractor, sponsor, applicant, or owner, take
such acfion as may be necessary to cause the suspension of any further payment,
advance, or guarantee of funds until such violafions have ceased.
(3) Payrolls and basic records.
(i) Payrolls and basic records relafing thereto shall be maintained by the contractor
during the course of the work and preserved for a period of three years thereafter
for all laborers and mechanics working at the site of the work. Such records shall
contain the name, address, and social security number of each such worker, his
or her correct classification, houriy rates of wages paid (including rates of
contribufions or costs anticipated for bona fide fringe benefits or cash equivalents
thereof of the types described in secfion 1 (b)(2)(B) of the Davis-Bacon Act), daily
and weekly number of hours worked, deductions made and actual wages paid.
Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the
wages of any laborer or mechanic include the amount of any costs reasonably
anticipated in providing benefits under a plan or program described in secfion
1 (b)(2)(B) of the Davis-Bacon Act, the contractor shall maintain records which
show that the commitment to provide such benefits is enforceable, that the plan
or program is financially responsible, and that the plan or program has been
communicated in wrifing to the laborers or mechanics affected, and records
which show the costs anticipated or the actual cost incurred in providing such
benefits. Contractors employing apprentices or trainees under approved
programs shall maintain written evidence of the registrafion of apprenticeship
programs and certification of trainee programs, the registration of the apprentices
and trainees, and the ratios and wage rates prescribed in the applicable
programs.
(ii) (A) The contractor shall submit weekly, for each week in which any contract work is
performed, a copy of all payrolls to the Recipient, that is, the entity that receives the
sub-grant or loan from the State capitalizafion grant recipient. Such documentafion
shall be available on request of the State or EPA. As to each payroll copy received,
the Recipient shall provide written confirmation in a form satisfactory to the State
indicating whether or not the project is in compliance with the requirements of 29
CFR 5.5(a)(1) based on the most recent payroll copies for the specified week. The
payrolls shall set out accurately and completely all of the informafion required to be
maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and
home addresses shall not be included on the weekly payrolls. Instead the payrolls
shall only need to include an individually identifying number for each employee
(e.g., the last four digits of the employee's social security number). The required
weekly payroll informafion may be submitted in any form desired. Optional Form
WH-347 is available for this purpose from the Wage and Hour Division Web site at
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
http://www.dol.qov/esa/whd/forms/wh347instr.htm or its successor site. The prime
contractor is responsible for the submission of copies of payrolls by all
subcontractors. Contractors and subcontractors shall maintain the full social
security number and current address of each covered worker, and shall provide
them upon request to the Recipient for transmission to the State Water Board or
EPA if requested by EPA , the State Water Board, the contractor, or the Wage and
Hour Division of the Department of Labor for purposes of an invesfigation or audit
of compliance with prevailing wage requirements. It is not a violation of this section
for a prime contractor to require a subcontractor to provide addresses and social
security numbers to the prime contractor for its own records, without weekly
submission to the Recipient.
(B) Each payroll submitted shall be accompanied by a "Statement of Compliance,"
signed by the contractor or subcontractor or his or her agent who pays or
supervises the payment of the persons employed under the contract and shall
certify the following:
(1) That the payroll for the payroll period contains the informafion required to
be provided under § 5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the
appropriate infonnafion is being maintained under § 5.5 (a)(3)(i) of
Regulations, 29 CFR part 5, and that such informafion is correct and
complete;
(2) That each laborer or mechanic (including each helper, apprenfice, and
trainee) employed on the contract during the payroll period has been
paid the full weekly wages earned, without rebate, either directly or
indirectiy, and that no deductions have been made either directly or
indirectly from the full wages earned, other than permissible deductions
as set forth in Regulations, 29 CFR part 3;
(3) That each laborer or mechanic has been paid not less than the
applicable wage rates and fringe benefits or cash equivalents for the
classificafion of work performed, as specified in the applicable wage
determination incorporated into the contract.
(C) The weekly submission of a property executed certification set forth on the
reverse side of Optional Form WH-347 shall satisfy the requirement for
submission of the "Statement of Compliance" required by paragraph (a)(3)(ii)(B)
of this section.
(D) The falsification of any of the above certifications may subject the contractor or
subcontractor to civil or criminal prosecution under section 1001 of tifie 18 and
secfion 231 of tifie 31 ofthe United States Code.
(iii) The contractor or subcontractor shall make the records required under
paragraph (a)(3)(i) of this secfion available for inspecfion, copying, or
transcription by authorized representatives of the State, EPA or the Department
of Labor, and shall permit such representatives to interview employees during
working hours on the job. If the contractor or subcontractor fails to submit the
required records or to make them available, the Federal agency or State may,
after written notice to the contractor, sponsor, applicant, or owner, take such
acfion as may be necessary to cause the suspension of any further payment,
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
advance, or guarantee of funds. Furthermore, failure to submit the required
records upon request or to make such records available may be grounds for
debarment acfion pursuant to 29 CFR 5.12.
(4) Apprentices and trainees.
(i) Apprentices. Apprentices will be permitted to work at less than the predetermined
rate for the work they performed when they are employed pursuant to and
individually registered in a bona fide apprenficeship program registered with the
U.S. Department of Labor, Employment and Training Administration, Office of
Apprenficeship Training, Employer and Labor Services, or with a State
Apprenficeship Agency recognized by the Office, or if a person is employed in his
or her first 90 days of probafionary employment as an apprenfice in such an
apprenficeship program, who is not individually registered in the program, but
who has been certified by the Office of Apprenticeship Training, Employer and
Labor Services or a State Apprenticeship Agency (where appropriate) to be
eligible for probafionary employment as an apprenfice. The allowable rafio of
apprentices to journeymen on the job site in any craft classification shall not be
greater than the ratio permitted to the contractor as to the entire work force under
the registered program. Any worker listed on a payroll at an apprentice wage
rate, who is not registered or otherwise employed as stated above, shall be paid
not less than the applicable wage rate on the wage determination for the
classificafion of work actually performed. In addition, any apprentice performing
work on the job site in excess of the ratio permitted under the registered program
shall be paid not less than the applicable wage rate on the wage determinafion
for the work actually performed. Where a contractor is performing construction on
a project in a locality other than that in which its program is registered, the ratios
and wage rates (expressed in percentages of the journeyman's houriy rate)
specified in the contractor's or subcontractor's registered program shall be
observed. Every apprentice must be paid at not less than the rate specified in the
registered program for the apprentice's level of progress, expressed as a
percentage of the journeymen houriy rate specified in the applicable wage
determinafion. Apprentices shall be paid fringe benefits in accordance with the
provisions ofthe apprenticeship program. If the apprenticeship program does not
specify fringe benefits, apprenfices must be paid the full amount of fringe benefits
listed on the wage determinafion for the applicable classificafion. If the
Administrator determines that a different pracfice prevails for the applicable
apprenfice classificafion, fringes shall be paid in accordance with that
determinafion. In the event the Office of Apprenficeship Training, Employer and
Labor Services, or a State Apprenticeship Agency recognized by the Office,
withdraws approval of an apprenticeship program, the contractor will no longer
be permitted to utilize apprentices at less than the applicable predetermined rate
for the work performed until an acceptable program is approved.
(ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to
work at less than the predetermined rate for the work performed unless they are
employed pursuant to and individually registered in a program which has
received prior approval, evidenced by formal certificafion by the U.S. Department
of Labor, Employment and Training Administration. The ratio of trainees to
journeymen on the job site shall not be greater than permitted under the plan
approved by the Employment and Training Administration. Every trainee must be
paid at not less than the rate specified in the approved program for the trainee's
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
level of progress, expressed as a percentage of the journeyman houriy rate
specified in the applicable wage determinafion. Trainees shall be paid fringe
benefits in accordance with the provisions ofthe trainee program. If the trainee
program does not mention fringe benefits, trainees shall be paid the full amount
of fringe benefits listed on the wage determination unless the Administrator of the
Wage and Hour Division determines that there is an apprenficeship program
associated with the corresponding journeyman wage rate on the wage
determination which provides for less than full fringe benefits for apprentices. Any
employee listed on the payroll at a trainee rate who is not registered and
participating in a training plan approved by the Employment and Training
Administrafion shall be paid not less than the applicable wage rate on the wage
determinafion for the classificafion of work actually performed. In addifion, any
trainee perfonning work on the job site in excess of the ratio permitted under the
registered program shall be paid not less than the applicable wage rate on the
wage determination for the work actually performed. In the event the
Employment and Training Administrafion withdraws approval of a training
program, the contractor will no longer be permitted to ufilize trainees at less than
the applicable predetermined rate for the work performed until an acceptable
program is approved.
(iii) Equal employment opportunity. The utilization of apprentices, trainees and
journeymen under this part shall be in conformity with the equal employment
opportunity requirements of Execufive Order 11246, as amended, and 29 CFR
part 30.
(5) Compliance with Copeland Act requirements. The contractor shall comply with the
requirements of 29 CFR part 3, which are incorporated by reference in this contract.
(6) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the
clauses contained in 29 CFR 5.5(a)(1) through (10) and such other clauses as the EPA
determines may by appropriate, and also a clause requiring the subcontractors to
include these clauses in any lower tier subcontracts. The prime contractor shall be
responsible for the compliance by any subcontractor or lower tier subcontractor with all
the contract clauses in 29 CFR 5.5.
(7) Contract termination; debarment. A breach of the contract clauses in 29 CFR 5.5 may be
grounds for tennination of the contract, and for debarment as a contractor and a
subcontractor as provided in 29 CFR 5.12.
(8) Compliance with Davis-Bacon and Related Act requirements. All rulings and
interpretations ofthe Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and
5 are herein incorporated by reference in this contract.
(9) Disputes concerning labor standards. Disputes arising out of the labor standards
provisions of this contract shall not be subject to the general disputes clause of this
contract. Such disputes shall be resolved in accordance with the procedures of the
Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of
this clause include disputes between the contractor (or any of its subcontractors) and
Recipient, State, EPA, the U.S. Department of Labor, or the employees or their
representatives.
(10) Certification of eligibility.
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
(i) By entering into this contract, the contractor certifies that neither it (nor he or she)
nor any person or firm who has an interest in the contractor's firm is a person or
firm ineligible to be awarded Government contracts by virtue of section 3(a) of
the Davis-Bacon Act or 29 CFR 5.12(a)(1).
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for
award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act
or 29 CFR 5.12(a)(1).
(iii) The penalty for making false statements is prescribed in the U.S. Criminal Code,
18 U.S.C. 1001.
2. Contract Provision for Contracts in Excess of $100,000.
(a) Contract Work Hours and Safety Standards Act. The Recipient shall insert the following clauses
set forth in paragraphs (a)(1), (2), (3), and (4) of this section in full in any contract in an amount in
excess of $100,000 and subject to the overtime provisions of the Contract Work Hours and Safety
Standards Act. These clauses shall be inserted in addition to the clauses required by Section 1,
above or 29 CFR 4.6. As used in this paragraph, the terms laborers and mechanics include
watchmen and guards.
(1) Overtime requirements. No contractor or subcontractor contracting for any part of the
contract work which may require or involve the employment of laborers or mechanics
shall require or permit any such laborer or mechanic in any workweek in which he or she
is employed on such work to work in excess of forty hours in such workweek unless such
laborer or mechanic receives compensafion at a rate not less than one and one-half
times the basic rate of pay for all hours worked in excess of forty hours in such
workweek.
(2) Violation; liability for unpaid wages; liquidated damages. In the event of any violation of
the clause set forth in paragraph (a)(1) of this section the contractor and any
subcontractor responsible therefore shall be liable for the unpaid wages. In addifion, such
contractor and subcontractor shall be liable to the United States (in the case of work done
under contract for the District of Columbia or a territory, to such District or to such
territory), for liquidated damages. Such liquidated damages shall be computed with
respect to each individual laborer or mechanic, including watchmen and guards,
employed in violation of the clause set forth in paragraph (a)(1) of this section, in the sum
of $10 for each calendar day on which such individual was required or permitted to work
in excess of the standard workweek of forty hours without payment of the overtime wages
required by the clause set forth in paragraph (a)(1) of this secfion.
(3) Withholding for unpaid wages and liquidated damages. The Recipient, upon written
request of the EPA Award Official or an authorized representative of the Department of
Labor, shall withhold or cause to be withheld, from any moneys payable on account of
work performed by the contractor or subcontractor under any such contract or any other
Federal contract with the same prime contractor, or any other federally-assisted contract
subject to the Contract Work Hours and Safety Standards Act, which is held by the same
prime contractor, such sums as may be determined to be necessary to satisfy any
liabilities of such contractor or subcontractor for unpaid wages and liquidated damages
as provided in the clause set forth in paragraph (b)(2) of this section.
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
(4) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the
clauses set forth in paragraph (a)(1) through (4) of this secfion and also a clause
requiring the subcontractors to include these clauses in any lower fier subcontracts. The
prime contractor shall be responsible for compliance by any subcontractor or lower tier
subcontractor with the clauses set forth in paragraphs (a)(1) through (4) of this section.
(b) In addition to the clauses contained in Secfion 1, above, in any contract subject only to the
Contract Work Hours and Safety Standards Act and not to any of the other statutes cited in 29
CFR 5.1, the Recipient shall insert a clause recjuiring that the contractor or subcontractor shall
maintain payrolls and basic payroll records during the course ofthe work and shall preserve them
for a period of three years from the completion of the contract for all laborers and mechanics,
including guards and watchmen, working on the contract. Such records shall contain the name
and address of each such employee, social security number, correct classifications, houriy rates
of wages paid, daily and weekly number of hours worked, deducfions made, and actual wages
paid. Further, the Recipient shall insert in any such contract a clause providing that the records to
be maintained under this paragraph shall be made available by the contractor or subcontractor for
inspecfion, copying, or transcripfion by authorized representatives ofthe United States
Environmental Protection Agency, the Department of Labor, or the State Water Resources
Control Board, and the contractor or subcontractor will permit such representatives to interview
employees during working hours on the job.
3. Compliance Verification
(a) The Recipient shall periodically interview a sufficient number of employees entified to DB
prevailing wages (covered employees) to verify that contractors or subcontractors are paying the
appropriate wage rates. As provided in 29 CFR 5.6(a)(6), all interviews must be conducted in
confidence. The Recipient must use Standard Form 1445 (SF 1445) or equivalent documentafion
to memorialize the interviews. Copies ofthe SF 1445 are available from EPA on request.
(b) The Recipient shall establish and follow an inten/iew schedule based on its assessment ofthe
risks of noncompliance with DB posed by contractors or subcontractors and the duration of the
contract or subcontract. At a minimum, the Recipient should conduct interviews with a
representative group of covered employees within two weeks of each contractor or
subcontractor's submission of its initial weekly payroll data and two weeks prior to the estimated
completion date for the contract or subcontract. The Recipient must conduct more frequent
interviews if the initial inten/iews or other informafion indicates that there is a risk that the
contractor or subcontractor is not complying with DB . The Recipient shall immediately conduct
necessary interviews in response to an alleged violation ofthe prevailing wage requirements. All
interviews shall be conducted in confidence.
(c) The Recipient shall periodically conduct spot checks of a representafive sample of weekly payroll
data to verify that contractors or subcontractors are paying the appropriate wage rates. The
Recipient shall establish and follow a spot check schedule based on its assessment of the risks of
noncompliance with DB posed by contractors or subcontractors and the duration of the contract
or subcontract. At a minimum, if practicable, the Recipient should spot check payroll data within
two weeks of each contractor or subcontractor's submission of its inifial payroll data and two
weeks prior to the completion date the contract or subcontract. The Recipient must conduct more
frequent spot checks if the initial spot check or other informafion indicates that there is a risk that
the contractor or subcontractor is not complying with DB. In addition, during the examinafions the
Recipient shall verify evidence of fringe benefit plans and payments thereunder by contractors
and subcontractors who claim credit for fringe benefit contribufions.
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT G - DAVIS BACON REQUIREMENTS
(d) The Recipient shall periodically review contractors and subcontractors use of apprentices and
trainees to verify registration and certification with respect to apprenticeship and training
programs approved by either the U.S Department of Labor or a state, as appropriate, and that
contractors and subcontractors are not using disproportionate numbers of, laborers, trainees and
apprentices. These reviews shall be conducted in accordance with the schedules for spot
checks and interviews described in Item 5(b) and (c) above.
(e) The Recipient must immediately report potential violations of the DB prevailing wage
requirements to the EPA DB contact listed above and to the appropriate DOL Wage and Hour
District Office listed at http://www.dol.qov/esa/contacts/whd/america2. htm.
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City of Vista
Agreement No.: 13-843-550
Project No.: C-06-7847-110
EXHIBIT H - MATERIAL LITIGATION, INVESTIGATIONS, AUDITS
None.
H-1
RESOLUTION NO. 2015-10
A RESOLUTION OF THE CITY COUNCIL OF THE CHARTERED CITY
OF VISTA, CALIFORNIA, APPROVING THE PROJECT AGREEMENT
FOR CONSTRUCTION OF THE AGUA HEDIONDA SEWER LIFT
STATION AND VISTA/CARLSBAD INTERCEPTOR SEWER,
REACHES VCl 1B-VC15
The City Council of the City of Vista does resolve as follows:
1. Findings. The City Council hereby finds and declares the following:
A. The existing Agua Hedionda Sewer Lift Station and existing Vista/Carlsbad
Interceptor Sewer were built in the early 1960's and do not have adequate capacity to convey the
sewage flows projected for this basin.
B. On February 26, 2002, Vista and Carlsbad ("Parties") entered into an Agreement
for Ownership, Operation and Maintenance of the Vista/Carlsbad Interceptor Sewer.
C. The Sewer Master Plans for the Parties include a recommendation that the Agua
Hedionda Sewer Lift Station and reaches VC11B-VC15 ofthe Vista/Carlsbad Interceptor Sewer
be replaced with larger pipes and pumps to increase the capacity necessary to convey future
flows ("Project").
D. On September 13, 2011, the City Council approved an agreement with the City of
Carlsbad for the planning and design of the Agua Hedionda Lift Station.
E. On June 11, 2013, the City Council approved the Amended and Restated
Agreement for Ownership, Operation, and Maintenance ofthe Vista/Carlsbad Interceptor Sewer,
which allows for the cities of Vista and Carlsbad to jointly undertake improvements to the
interceptor sewer system, including the Agua Hedionda Lift Station.
F. On June 10, 2014, the City Council adopted the FY 2014/15 Capital Improvement
Program allocating the required funding to construct the Agua Hedionda Sewer Lift Station and
Vista/Carlsbad Interceptor Sewer, reaches VCl 1B-VC15.
G. In order to construct the Project and to address the responsibilities of the Parties,
Vista and Carlsbad desire to enter into a Project Agreement for Construction of the Agua
Hedionda Sewer Lift Station and Vista/Carlsbad Interceptor Sewer, Reaches VC11B-VC15
("Agreement").
2. Action.
A. The Agreement is approved,
[continued on following page]
RESOLUTION NO. 2015-10
CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 2
B. The Mayor is authorized to execute the Agreement on behalf of the City.
3. Adoption. PASSED AND ADOPTED at a meeting of the City Council held on
January 27, 2015, by the following vote:
AYES: MAYOR RITTER, AGUILERA, CAMPBELL, RIGBY, FRANKLIN
NOES: NONE
ABSTAIN: NONE
JUDYRriTTER, MAYOR
APPROVED AS TO FORM: ATTEST:
DAROLD PIEPER, CiTY ATTORNEY MARCI KILIAN, CITY CLERK
APPROVED
Jonathan B. Stone
1509 011415
EXH 1 ResQ docx