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HomeMy WebLinkAboutCalifornia State Water Resources Control Board - Installment Sale Agreement Recycled Water Distribution System Southwest Quadrant Clean Water State Revolving Fund Project No C-06-8061-110 Agreement No D15-01011# l4-S'zo'tt.l rt I {* $ 6 .EoPzo ulo cÉ .9[=uOOø:i¿ foOı àO 'ili ¡,.. lirr 'ì' il,rr,i CITY OF FRESNO AND CALIFORNIA STATE WATER RESOURCES CONTROL BOARD INSTALLMENT SALE AGREEMENT PUBLTCLY OWNED TREATMENT WORKS (POTW) CONSTRUCTION FINANCING RECYCLED WATER DISTRIBUTION SYSTEM, SOUTHWEST QUADRANT CLEAN WATER STATE REVOLVING FUND PROJECT NO. C-06-8061-110 AGREEMENT NO. D15-0101 1 AMOUNT: $52,475,049 START DATE: AUGUST 19,2015 END DATE: MAY30,2047 DATED AS OF AUGUST 3,2015 lVater Boards THIS PAGE INTENTIONALLY LEFT BLANK City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061 -1 1 0 TABLE OF CONTENTS ARTTCLE r DEF|N|T|ONS.......... ..............1 1.2 Exhibits and Appendices lncorporated........... ..........................4 ARTICLE II REPRESENTATIONS, WARRANTIES, AND COMMITMENTS............ ............4 2.1 General Recipient Commitments. ............... .........4 2.2 Authorization and Va|idity................ .......................5 2.6 Legal Status and Eligibility. . ...................5 2.7 Financial Statements. ..........................5 2.8 Completion of Project. ........................5 2.9 Project Completion Report. ...............6 2.10 Award of Construction Contracts. .,............. ..........6 2.12 Findings and Cha11en9e............... ...........................8 2.14 Project Completion; lnitiation of Operations................. ..............I 2.15 Continuous Use of Project; Lease or Disposal of Project. ...........................8 2.17 Federal Disadvantaged Business Enterprise (DBE) Reporting. ...................9 ARTICLE lll FTNANCTNG PROV|S|ONS................. ......................11 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 10 Purchase and Sale of Project. .........11 Amounts Payable by the Recipient. .................... 11 Obligation Absolute. ......13 No Obligation of the State. ......... ...... 13 Disbursement of Project Funds; Availability of Funds. ...........13 Withholding of Disbursements and MaterialViolations. .....,....14 Pledge; Rates, Fees and Charges; Additional Debt. .......... ........................14 Financial Management System and Standards. .............. .......16 Accounting and Auditing Standards. .....................16 Federal or State Assistance.16 ARTICLE IV TAX COVENANTS ............16 4.2 Tax Covenant................ ...................16 4.3 Governmental Unit. .......16 4.4 Financing of a Capital Project. .........17 4.5 Ownership and Operation of Project.................. ......................17 4.6 Temporary Period. .........17 4.7 Working Capital. ...........17 4.8 Expenditure of Proceeds ...................17 4.9 Private Use and Private Payments. ......................17 4.10 No Sale, Lease or Private Operation of the Project. ................. ................. 18 4.11 No Disproportionate or Unrelated Use............ ........................18 4.12 Management and Service Contracts. ...................18 4.13 No Disposition of Financed Property ....................20 4.14 Useful Life of Project. ........................20 4.15 lnstallment Payments. .......................20 4.16 No Other Replacement Proceeds. ........................20 4.17 No Sinking or Pledged Fund. ......... .......................20 il City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-B061 -1 1 0 4.18 Reserve Amount. ...........21 4.19 Reimbursement Resolution............... ..................21 4.20 Reimbursement Expenditures........... .................21 4.21 Change in Use of the Project................. ............21 4.22 Rebate Obligations. ......21 4.23 No FederalGuarantee. ...................22 4.24 No Notices or lnquiries From lRS. .......................22 4.25 Amendments. ................22 4.27 Reasonable Expectations................. ..................22 ARTTCLE V MTSCELLANEOUS PROV|SIONS................ ............22 5.3 State Reviews and lndemnification. ......................23 5.4 Termination; lmmediateAcceleration; lnterest..... ..................23 5.5 lncome Restrictions. ......24 5.6 Prevailing Wages. ........24 5.8 Governing Law. ........... ......................24 5.11 Compliance with Law, Regulations, etc. ........... .......................25 5.12 Conflict of lnterest. ........25 5.13 Damages for Breach Affecting Tax Exempt Status or FederalCompliance .................25 5.15 lndependent Actor. ........26 5.16 Non-Discrimination Clause. ..............26 5.17 No Third Party Rights ........................26 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 10 5.18 Operation and Maintenance; lnsurance 5.19 Permits, Subcontracting, and Remedies. .............27 5.20 Recipient's Responsibility for Work. .....................27 5.22 Rights in Data 5.23 State Water Board Action; Costs and Attorney Fees. .............27 5.24 Unenforceable Provision. 5.26 Venue 5.27 Waiver and Rights of the State Water Board. ......28 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 - COMPLIANCE WITH CROSS-CUTTING STATE AUTHORITIES EXHIBIT I- MATERIAL LITIGATION, INVESTIGATIONS, AUDITS EXHIBIT J - NEW RESTRICTIONS ON LOBBYING 26 27 28 28 V City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 This lnstallment 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 Vl 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 of the 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 of the 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 forth 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 lnstallment 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 otherwise specified, each capitalized term used in this Agreement (including the Exhibits hereto) has the following meaning: "Additional Payments" means the Additional Payments described in Section 3.2(c) of this Agreement. City of Fresno Agreement No.: D1 5-01 01'1 Project No.: C-06-8061-1 1 0 "Agreement" means this lnstallment Sale Agreement, dated as of the date set forth on the first page hereof, by and between the State Water Board and the Recipient, including all exhibits and attachments 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 of the 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 lnfrastructure 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 lnstallment Payments paid hereunder. "Code" as used in Article lV of this Agreement means the lnternal Revenue Code of 1986, as amended, and any successor provisions and the regulations of the U.S. Department of the Treasury promulgated thereunder. "Completion of Construction" means the date, as determined by the Division after consultation with the Recipient, that the work of building and erection of the Project is substantially complete. '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 of the Recipient in which Revenues are deposited pursuant to the Material Obligations lndentures. "Fiscal Year" means the period of twelve (12) months terminating on June 30 of any year, or any other annual period hereafter selected and designated by the Recipient as its Fiscal Year in accordance with applicable law. "Force Account" means the use of the Recipient's own employees or equipment for construction of the Project. "lnitiation 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. "lnstallment Payments" means lnstallment 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 of the 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. City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 "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, this Obligation, and such additional obligations as may hereafter be issued in accordance with the provisions of such obligations and this Agreement. "Material Obligation lndentures" means each indenture, trust agreement or other agreement related to Material Obligations, including but not limited to, the 1993 lndenture and the 2008 lndenture. "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 of the term as defined under such Material Obligation, and thereafter, all Revenues received by the Recipient less the Operations and Maintenance Costs for such Fiscal Year. "1993 lndenture" means the lndenture, dated as of September 1, 1993, between the City and The Bank of New York Mellon Trust Company, N.4., as it may from time to time be amended or supplemented pursuant to the provisions thereof. "Obligation" means the obligation of the Recipient to make lnstallment 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 Maintenance and Operations Costs 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 of the 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. City of Fresno Agreement No.: D1 5-01 01 I Project No.: C-06-8061-1 1 0 "Revenues" means, so long as Material Obligations other than the obligations are outstanding, the definition of such term as defined in the Material Obligations lndentures, and thereafter, for each Fiscal Year, all gross income and revenue received or receivable by the Recipient from the ownership or operation of the System, determined in accordance with generally accepted accounting principles, including all rates, fees, and charges (including connection fees and charges) as received by the Recipient for the services of the System, and all other income and 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. "State Water Board" means the State Water Resources Control Board, an administrative and regulatory agency of the State of California. "System" means so long as Material Obligations other than the obligations are outstanding, the definition of such term as defined in the Material Obligations lndentures, and thereafter, for the purposes of a wastewater project, all wastewater collection, transport, treatment, storage, and disposalfacilities, 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. "2008 lndenture" means the lndenture, dated as of July 1, 2008, between the City and The Bank of New York Mellon Trust Company, N.4., as it may from time to time be amended or supplemented pursuant to the provisions thereof. 1.2 Exhibits and Appendices lncorporated. 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, warrants, and commits to the following as of the date set forth on the flrst page hereof and continuing thereafter for the term of the Agreement. 2.1 GeneralRecipientCommitments. 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. City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 10 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 No 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, the Revenues, and/or the Project other than as described in Exhibit H hereto. 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 of the 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 FinancialStatements. 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 fairly 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 Exhib¡t A-FBA. City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 2.9 Project Completion Report. The Recipient shall submit a Project Completion Report to the Division with a copy to the appropriate RegionalWater 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 lnitiation of Construction of the Project. The Recipient agrees to make all reasonable efforts to complete construction in substantial conformance with the terms of the contract by the Completion of Construction date established in Exhibit A. Such date shall be binding upon the Recipient unless modified in writing by the Division upon a showing of good cause by the Recipient. The Recipient shall deliver any request for extension of the Completion of Construction date no less than 90 days prior to the Completion of Construction date. The Division will not unreasonably deny such a timely request, but the Division will deny requests received after this time. . 2.11 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 on System obligations, if material; (c) Unscheduled draws on debt service reserves reflecting financial ditficulties of the System or the Recipient; (d) Unscheduled draws on credit enhancements, if any, reflecting financial difficulties of the System; (e) Substitution of credit or liquidity providers of the Recipient, if any, or their failure to perform; (f) Adverse tax opinions, the issuance by the lnternal Revenue Service or proposed or final determinations of taxability, Notices of Proposed lssue (lRS Form 5701-TEB) or other material notices of determinations with respect to the tax status of any tax-exempt bonds; (g) Rating changes on outstanding bonds, if any; (h) Bankruptcy, insolvency, receivership or similar event of the Recipient; City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 10 (i) Actions taken in anticipation of filing Chapter 9, as required under state law; 0) Any litigation pending or threatened against Recipient regarding its wastewater capacity or its continued existence, circulation of a petition to challenge rates, consideration of dissolution, or disincorporation, or any other material threat to the Recipient's Revenues; (k) Other Material Events or Listed Events; (l) Change of ownership of the Project or change of management or service contract for operation of the Project; or (m) Negotiations regarding proposed parity obligations. The Recipient agrees to notify the Division promptly of the following: (a) Any substantial change in scope of the Project. The Recipient agrees that no substantial change in the scope of the Project will be undertaken until written notice of the proposed change has been provided to the Division and the Division has given written approvalfor such change; (b) Cessation of all major construction work on the Project where such cessation of work is expected to or does extend for a period of thirty (30) days or more; (c) Any circumstance, combination of circumstances, or condition, which is expected to or does delay Completion of Construction for a period of ninety (90) days or more beyond the estimated date of Completion of Construction previously provided to the Division; (d) Discovery of any potential archeological or historical resource. Should a potential archeological or historical resource be discovered during construction of the Project, the Recipient agrees that all work in the area of the find will cease until a qualified archeologist has evaluated the situation and made recommendations regarding preservation of the resource, and the Division has determined what actions should be taken to protect and preserve the resource. The Recipient agrees to implement appropriate actions as directed by the Division; (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 construction of the Project, the Recipient agrees to promptly notify the Division. This notification is in addition to the Recipient's obligations under the federal Endangered Species Act; (f) Any monitoring, demonstration, or other implementation activities 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 representatives with at least ten (10) working days' notice to both the Division and USEPA Region lX. The contact for USEPA Region lX is Josh Amaris at Amaris,josh@epa.gov (415) 972-3597; or (h) Completion of Construction of the Project, and actual Project Completion. City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1'1 0 2.12 Findings and Challenge Upon consideration of a voter initiative to reduce Revenues, the Recipient shall make a finding regarding the effect of such a reduction on the Recipient's ability to satisfy its Obligation under this Agreement and to operate and maintain the Project for its useful life. The Recipient agrees to make its findings available to the public and to request, if necessary, the authorization of the Recipient's decision-maker or decision- maker body to file litigation to challenge any such initiative that it finds will render it unable to satisfy either the Obligation or the covenant to operate and maintain, or both. The Recipient shall diligently pursue and bear any and all costs related to such challenge. The Recipient shall notify and regularly update the State Water Board regarding any such challenge. 2.13 Project Access. The Recipient agrees to ensure that the State Water Board, the Governor of the State, the United States Environmental Protection Agency, the Office of lnspector 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 application, all of the documents incorporated by Exhibit A, and all reports, disbursement requests, and supporting documentation submitted hereunder. 2.14 Project Completion; lnitiation of Operations. Upon Completion of Construction of the Project, the Recipient agrees to expeditiously initiate Project operations. 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, substantially discontinue use of, lease, or dispose of the Project or any significant part or portion thereof during the useful life of the Project without prior written approval of the Division. Such approval may be conditioned as determined to be appropriate by the Division, including a condition requiring acceleration 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) Quarterly Reports. The Recipient agrees to expeditiously provide status reports no less frequently than quarterly, starting with the execution of this Agreement. At a minimum the reports will contain the following information: . a summary of progress to date including a description of progress since the last report, percent construction complete, percent contractor invoiced, and percent schedule elapsed; . a description of compliance with environmental requirements; . a listing of change orders including amount, description of work, and change in contract amount and schedule; . any problems encountered, proposed resolution, schedule for resolution, and status of previous problem resolutions. City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061 -1'1 0 (b) As Needed Reports. The Recipient agrees to expeditiously provide, during the term of this Agreement, such reports, data, and information as may be reasonably required by the Division, including but not limited to material necessary or appropriate for evaluation of the CWSRF Program or to fulfill any reporting requirements of the federal government. (c) Recycled water reports. The Recipient shall submit annual reports for a period commencing with Completion of Construction through one (1) full year after all proposed recycled water users included in the Project are connected for service (minimum five [5] years). . Reports will be submitted in hard copy and electronically. o The first annual report is due on February 28th following the first complete calendar year of operation and shall cover the period from the Completion of Construction through the end of the first full calendar year thereafter. Subsequent annual reports are due by February 28th following the year covered. The annual reports shall be prepared in accordance with the "Water Recycling Funding Guidelines", dated July 2008, or any successor guidelines. o The reports shall briefly review the operation of the Project during the preceding year, identify current users and user contracts, provide monthly Project water deliveries to each user, the amount of fresh/potable water usage offset by the use of recycled water, and monthly amounts of water from each source delivered through Project facilities, list the funds received from other State and federal agencies for this Project during the period by agency, the amount, type of assistance (grants, loans, etc.), and a description of the facilities, components, and items the funds were used for; list the power and maintenance costs associated with the Project for the period, indicate current plans and programs for use of any Project capacity not under contract, summarize Project financial experience, describe compliance with any special conditions of this Agreement; describe direct and indirect benefits of the project to the state/local water supply and economy; describe other benefits and challenges arising from the project; and provide such other information as may be reasonably required to evaluate Project benefits and use of Project facilities. 2.17 Federal Disadvantaged Business Enterprise (DBE) Reporting. The Recipient agrees to report DBE utilization to the Division on the DBE Utilization Report, State Water Board Form DBE UR334. The Recipient must submit such reports to the Division annually within ten (10) calendar days following October I until such time as the "Notice of Completion" is issued. The Recipient agrees to comply with 40 CFR S 33.301. 2.18 Records. (a) Without limitation of the requirement to maintain Project accounts in accordance with generally accepted accounting principles, the Recipient agrees to: (1) Establish an official file for the Project which shall adequately document all significant actions relative to the Project; (2) Establish separate accounts which will adequately and accurately depict all amounts receíved 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 Fresno Agreement No.: D1 5-0101 1 Project No.: C-06-8061-1 I 0 (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 fulfillfederal reporting requirements, including any and all reporting requirements under federaltax statutes or regulations; and (6) lf Force Account is used by the Recipient for any phase of the Project, other than for planning, design, and construction engineering and administration provided for by allowance, accounts will be established which reasonably document all employee hours charged to the Project and the associated tasks performed by each employee. lndirect Force Account costs are not eligible for funding. (b) The Recipient shall be required to maintain separate books, records and other material relative 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 Completion. The Recipient shall requirathat 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 lnspector General, the lnternal Revenue Service, the Governor, oi any authorized representatives of the aforementioned, and shall allow interviews during normal business hours of any employees who might reasonably have information related to such records. The Recipient agrees to include a similar right regarding audit, interviews, and records retention in any subcontract related to the performance of this Agreement. The provisions of this section shall survive the discharge of the Recipient's Obligation hereunder and shall survive the term of this Agreement. 2.19 Audit. (a) The Division, at its option, may call for an audit of financial information relative to the project, where the Division determines that an audit is desirable to assure program integrity or wñere such an audit becomes necessary because of federal requirements. Where suıh 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 Toinch 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 gm tJ¡ho¿ ål¡to¡Effio¡ñotrt¡l frot*t¡otrÂlmry ,l iir l'. , 10 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 "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 Protection Agency and state bond proceeds." The Project sign may include another agency's required promotional information so long as the above logos and disclosure statement are equally prominent on the sign. The sign shall be prepared in a professional manner. 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 of the State Water Resources Control Board, nor does mention of trade names or commercial products constitute endorsement or recommendation for use. (Gov. Code $ 7550, 40 CFR S 31.20.)" ARTICLE III FINANCING PROVISIONS 3.1 Purchase and Sale of Project. The Rçcipient hereby sells to the State Water Board and the State Water Board hereby purchases from the Recipient the Project. Simultaneously therewith, the Recipient hereby purchases from the State Water Board, and the State Water Board hereby sells to the Recipient, the Project in accordance with the provisions of this Agreement. All right, title, and interest in the Project shall immediately vest in the Recipient on the date of execution and delivery of this Agreement without further action on the part of the Recipient or the State Water Board. 3.2 Amounts Payable by the Recipient. (a) lnstallment Payments. The Recipient's obligations under this Agreement shall be secured by and payable solely from Net Revenues. Repayment of the Project Funds, together with all interest accruing thereon, shall be repaid in annual installments commencing on the date that is one (1) year after Completion of Construction, and shall be fully amortized by the date specified in Exhibit B. The lnstallment Payments are based on a standard fully amortized assistance amount with equal annual payments. The remaining balance is the previous balance, plus the disbursements, plus the accrued interest on both, less the lnstallment Payment. lnstallment calculations will be made beginning one (1) year after Completion of Construction and shall be fully amortized not later than the date specified in Exhibit B. Exhibit C is a payment schedule based on the provisions of this article and an estimated disbursement schedule. Actual payments will be based on actual disbursements. Upon Completion of Construction 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 11 City of Fresno Agreement No.: D15-0101 1 Project No.: C-0ô-8061 -1 1 0 incurred to the State Water Board will be assessed for late payment. These costs may include, but are not limited to, lost interest earnings, staff time, bond debt service default penalties, if any, and other costs incurred. For purposes of penalty assessment, payment will be deemed to have been made if payment is deposited in the U.S. Mail within the grace period with postage prepaid and properly addressed. Any penalties assessed will not be added to the assistance amount balance, but will be treated as a separate account and obligation of the Recipient. The interest penalty will be assessed from the payment due date. The Recipient as a whole is obligated to make all payments required by this Agreement to the State Water Board solely from Net Revenues, 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. ln the event of failure, neglect or refusal of any officer of the Recipient to levy or cause to be levied any Charge to provide payment by the Recipient under this Agreement, to enforce or to collect such Charge, or to pay over to the State Water Board any money collected on account of such Charge necessary to satisfy any amount due under this Agreement, the State Water Board may take such action in a court of competent jurisdiction as it deems necessary to compel the performance of all duties relating to the imposition or levying and collection of any of such Charges and the payment of the money collected therefrom to the State Water Board. Action taken pursuant hereto shall not deprive the State Water Board of, or limit the application of, any other remedy provided by law or by this Agreement. Attached as Exhibit C is a Payment Schedule based on the provisions of this section and an estimated disbursement schedule. This schedule will be revised based on actual disbursements following Completion of Construction. Each lnstallment Payment shall be paid by check and in lavr¡ful money of the United States of America. The Recipient agrees that it shall not be entitled to interest earned on undisbursed project funds. Upon execution of this Agreement, the State Water Board shall encumber an amount equal to the Obligation. The Recipient hereby agrees to pay lnstallment Payments and Additional Payments from Net Revenues and/or other amounts legally available to the Recipient therefor. lnterest on any funds disbursed to the Recipient shall begin to accrue as of the date of each disbursement. (b) Project Costs. The Recipient agrees to pay any and all costs connected with the Project including, without limitation, any and all Project Costs. lf the Project Funds are not sufficient to pay the Project Costs in full, the Recipient shall nonetheless complete the Project and pay that portion of the Project Costs in excess of available Project Funds, and shall not be entitled to any reimbursement therefor from the State Water Board. (c) Additional Payments. ln addition to the lnstallment Payments required to be made by the Recipient, the Recipient shall also pay to the State Water Board the reasonable extraordinary fees and expenses of the State Water Board, and of any assignee of the State Water Board's right, title, and interest in and to this Agreement, in connection with this Agreement, including all expenses and fees of accountants, trustees, attorneys, litigation costs, insurance premiums and all other extraordinary costs reasonably incurred by the State Water Board or assignee of the State Water Board. Additional Payments may be billed to the Recipient by the State Water Board from time to time, together with a statement executed by a duly authorized representative of the State Water Board, stating that the amounts billed pursuant to this section have been incurred by the State 12 City of Fresno Agreement No.: D1 5-0101 1 Project No.: C-06-8061-1 1 0 Water Board or its assignee for one or more of the above items and a copy of the invoice or statement for the amount so incurred or paid. Amounts so billed shall be paid by the Recipient within thirty (30) days after receipt of the bill by the Recipient. (d) The Recipient may without penalty prepay all or any portion of the outstanding principal amount of the Obligation provided that the Recipient shall also pay at the time of such prepayment all accrued interest on the principal amount prepaid through the date of prepayment. 3.3 ObligationAbsolute. The obligation of the Recipient to make the lnstallment Payments and other payments required to be made by it under this Agreement, from Net Revenues and/or other amounts legally available to the Recipient therefor, is absolute and unconditional, and until such time as the lnstallment Payments and Additional Payments have been paid in full, the Recipient shall not discontinue or suspend any lnstallment Payments or other payments required to be made by it hereunder when due, whether or not the System or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such lnstallment Payments and other payments shall not be subject to reduction whether by offset or othen¡vise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever. 3.4 No Obligation of the State. Any obligation of the State Water Board herein contained shall not be an obligation, debt, or liability of the State and any such obligation shall be payable solely out of the moneys in the CWSRF made available pursuant to this Agreement. 3.5 Disbursement of Project Funds; Availability of Funds. (a) Except as may be otherwise provided in this Agreement, disbursement of Project Funds will be made as follows: (1) Upon execution and delivery of this Agreement, the Recipient may request immediate disbi.rrsement of any eligible incurred planning and design allowance as specified in Exhibit B from the Project Funds through submission to the State Water Board of the Disbursement Request Form 260, or any amendment thereto, duly completed and executed. (2) The Recipient may request disbursement of eligible construction and equipment costs consistent with budget amounts referenced in Exhibit B. (Note that this Agreement will be amended to incorporate Final Budget Approval.) (3) Additional Project Funds will be promptly disbursed to the Recipient upon receipt of Disbursement Request Form 260, or any amendment thereto, duly completed and executed by the Recipient for incurred costs consistent with this Agreement, along with receipt of status reports due under Section 2.16 above. (4) The Recipient agrees that it will not request disbursement for any Project Cost until such cost has been incurred and is currently due and payable by the Recipient, although the actual payment of such cost by the Recipient is not required as a condition of disbursement request. (5) Recipient shall spend Project Funds within 30 days of receipt. Any interest earned on Project Funds shall be reported to the State Water Board and may be required to be returned to the State Water Board or deducted from future disbursements. 13 36 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 (6) The Recipient agrees that it will not request a disbursement unless that Project Cost is allowable, reasonable, and allocable. (7) Notwithstanding any other provision of this Agreement, no disbursement shall be required at any time or in any manner which is in violation of or in conflict with federal or state laws, policies, or regulations. (b) The State Water Board's obligation to disburse Project Funds is contingent upon the availability of sufficient funds to permit the disbursements provided for herein. lf 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. lf any disbursements due the Recipient under this Agreement are deferred because sufficient funds are unavailable, it is the intention of the State Water Board that such disbursement will be made to the Recipient when sufficient funds do become available, but this intention is not binding. Withholding of Disbursements and Material Violations. (a) The State Water Board may withhold all or any portion of the funds provided for by this Agreement in the event that: (1) The Recipient has materially violated, or threatens to materially violate, any term, provision, condition, or commitment of this Agreement; (2) The Recipient fails to maintain reasonable progress toward completion of the Project; or (3) The Recipient fails to comply with section 5103 of the Water Code, where applicable. (b) For the purposes of this Agreement, the terms "material violation" or "threat of material violation" include, but are not limited to: (1) Placement on the ballot of an initiative to reduce revenues securing this Agreement; (2) Passage of such an initiative; (3) Successful challenges by ratepaye(s) to the process used by Recipient to set, dedicate, or otherwise secure revenues used for securing this Agreement; or (4) Any other action or lack of action that may be construed as a material violation or threat thereof. Pledge; Rates, Fees and Charges; Additional Debt. (a) Establishment of Enterprise Fund and Reserve Fund. ln order to carry out its System Obligations, including the Obligation, the Recipient agrees and covenants that it shall establish and maintain or shall have established and maintained the Enterprise Fund. So long as Material Obligations other than the obligations are outstanding, the Enterprise Fund shall be the Revenue Fund established by the Material Obligations lndentures. All Revenues received shall be deposited when and as received in trust in the Enterprise Fund pursuant to the terms and provisions, including the priority of deposits, set forth in the Material Obligations lndentures. To 37 14 (b) City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061 -1 1 0 the extent required in Exhibit D of this Agreement, the Recipient agrees to establish and maintain a reserve fund. Pledge of Net Revenues, Enterprise Fund, and Reserve Fund. The Obligation 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 Obligation, including payment of lnstallment Payments and Additional Payments hereunder. The Net Revenues in the Enterprise Fund shall be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the Recipient. Application and Purpose of the Enterprise Fund. Subject to the provisions of any outstanding Material Obligations lndenture, money on deposit in the Enterprise Fund shall be applied and used first, to pay Operations and Maintenance Costs, and thereafter, all amounts due and payable with respect to the Material Obligations pursuant to the terms and provisions, including the priority of deposits, set forth in the Material Obligations lndentures. 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 pursuant to the terms and provisions of the Material Obligations lndentures. 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 FiscalYear Net Revenues equalto the debt service on Material Obligations, including the Obligation, 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 times be sufficient to meet the requirements of this section. Additional Debt Test. (1) The Recipient's future debt that is secured by revenues pledged herein may not be senior to this Obligation, except where the new senior obligation refunds or refinances a senior obligation with the same lien position as the existing senior obligation, and the new senior debt service is the same or lower than the existing debt service in each year prior to the final maturity of the refunded bonds with no senior debt service thereafter, and the new senior debt will not diminish the applicant's ability to repay its CWSRF obligations. (2) The Recipient may secure future debt on parity with this Obligation so long as Material Obligations are outstanding, the additional debt requirements in the Material Obligations lndentures are satisfied, and in addition, the following conditions are met: (i) The Recipient's revenues pledged to pay all senior debts relying on the pledged revenue source are at least 1.2 times the highest year's debt service and Net Revenues pledged to pay all debts are at least 1.1 times the highest year's debt service, and (ii) Satisfaction of the reserve requirements contained in Exhibit D. (c) (d) (e) 15 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 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 fiscalcontrol and accounting procedures will be sufficient to permit preparation of reports required by the federal government and tracking of Project funds to a level of expenditure adequate to establish that such funds have not been used in violation of federal or state law or the terms of this Agreement. To the extent applicable, the Recipient agrees to be bound by, and to comply with, the provisions and requirements of the federal Single Audit Act of 1984, Office of Management and Budget (OMB) Circular No. A-133, and updates or revisions, thereto, including but not limited to Section 21O(a)-(d). (Pub. L. 98-502.) 3.9 Accounting and Auditing Standards. The Recipient will maintain separate Project accounts in accordance with generally accepted accounting principles. The Recipient shall comply with "Standards for Audit of Governmental Organizations, Programs, Activities and Functions" promulgated by the U.S. GeneralAccounting Office. (40 CFR S 35.3135, subd. (l).) 3.10 Federalor State Assistance. lf 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 lnstallment Payments due hereunder. ARTICLE IV TAX COVENANTS 4.1 Purpose. The purpose of this Article lV 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 of the Code and as a certification described in Section 1.148-2(b)(2) of the Treasury Regulations. This Article lV sets forth certain facts, estimates and circumstances which form the basis for the Recipient's expectation that neither the Project nor the Project Funds will be used in a manner that would cause the Obligation to be classified as "arbitrage bonds" under Section 148 of the Code or "private activity bonds" under Section 141 ol the Code. 4.2 Tax Covenant. The Recipient agrees that it will not take or authorize any action or permit any action 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 Section 103 of the Code. 4.3 Governmental Unit. The Recipient is a state or local governmental unit as defined in Section 1 .103-1 of the Treasury Regulations or an instrumentality thereof (a "Governmental Unit") and is not the federal government or any agency or instrumentality thereof. 16 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 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 construction, reconstruction, installation oracquisition of the Project. Such costs have not previously been financed with the proceeds of any other issue of tax-exempt obligations. 4.5 Ownership and Operation of Project. The Recipient exclusively owns and, except as provided in Section 4.12hereof, operates the Project. 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 earlier of the effective date of this Agreement or the date the Bonds are issued ("Applicable Date"). The Recipient has incurred, or reasonably expects that it will incur within six (6) months of the Applicable Date, a substantial binding obligation (i.e., not subject to contingencies within the control of the Recipient or a related party) to a third party to expend at least five percent (5%) of the Project Funds on the costs of the Project. The completion of acquisition, construction, improvement and equipping of the Project and the allocation of Project Funds to expenditures for the Project will proceed with due diligence. 4.7 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) Reimbursement Expenditures (as defined in Section 4.20 below), (ii) Preliminary Expenditures (as defined in Section 4.20 below) in an aggregate amount not exceeding twenty percent (20o/o) of the Project Funds, (iii) capital expenditures relating to the Project originally paid by the Recipient on or after the date hereof, (iv) interest on the Obligation through the later of three (3) years after the Applicable Date or one (1) year after the Project is placed in service, and (v) 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 activities that constitute a Private Use (as defined below). None of the principal of or interest with respect to the lnstallment Payments will be secured by any interest in property (whether or not the Project) used for a Private Use or in payments in respect of property used for a Private Use, or will be derived from payments in respect of property used for a Private Use. "Private Use" means any activity that constitutes a trade or business that is carried on by persons or entities, other than a Governmental Unit. The leasing of the Project or the access by or the use of the Project by a person or entity 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 of the 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 preferential 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 preferential 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 17 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 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 othenryise 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 compensation for the use under the arrangement is redetermined at generally applicable, fair market value rates that are in effect at the time of renewal; and (ii) the use of the financed property under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business. 4.10 No Sale, Lease or Private Operation 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 Obligation. The Project will not be leased to any person or entity that is not a Governmental Unit prior to the final maturity date of the Obligation. Except as permitted under Section 4.12 hereof, 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 Section 1.141-3(bX4) of the Treasury Regulations, Revenue Procedure 97-13, and other applicable rules and regulations. As of the date hereof, none of the Project Funds or the Project are being used to provide property subject to contracts or other arrangements with persons or entities engaged in a trade or business (other than Governmental Units) that involve the management of property or the provision of services that do not comply with the standards of the Treasury Regulations and Revenue Procedure 97-13. Except to the extent the Recipient has received an opinion of counsel expert in the issuance of state and local government bonds the interest on which is excluded from gross income under Section 103 of the Code ("Nationally-Recognized Bond Counsel") and satisfactory to the State Water Board and the Bank to the contrary, the Recipient will not enter into any management or service contracts with any person or entity that is not a Governmental Unit for services to be provided with respect to the Project except with respect to contracts where the following requirements are complied with: (i) the compensation is reasonable for the services rendered; (ii) the compensation is not based, in whole or in part, on a share of net profits from the operation of the Project; (iii) not more than twenty percent (20%) of the voting power of the Recipient in the aggregate may be vested in the service provider and its directors, officers, shareholders, and employees and vice versa; (iv) any overlapping board members between the Recipient and the service provider must not include the chief executive officer or executive director of either, or their respective governing bodies; and (v): (a) At least ninety-five percent (95%) of the compensation for services for each annual period during the term of the contract is based on a periodic fixed fee which is a stated dollar amount for services rendered for a specified period of time. The stated dollar amount may automatically increase according to a specified objective external standard that is not linked to the output or efficiency of a facility, e.9., the Consumer Price lndex and similar external indices 18 (b) (c) (d) (e) City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 that track increases in prices in an area or increases in revenues or costs in an industry are objective external standards. A fee shall not fail to qualify as a periodic fixed fee as a result of a one (1) time incentive award during the term of the contract under which compensation automatically increases when a gross revenue or expense target (but not both) is reached if that award is a single stated dollar amount. The term of the contract, including all renewal options, must not exceed the lesser of eighty percent (80%) of the reasonably expected useful life of the financed property and fifteen (15) years (twenty (20) years for "public utility property" within the meaning of Section 168(iX10) of the Code); At least eighty percent (80%) of the compensation for services for each annual period during the term of the contract is based on a periodic fixed fee. The term of the contract, including all renewal options, must not exceed the lesser of eighty percent (80%) of the reasonably expected useful life of the financed property and ten (10) years. A one (1) time incentive award during the term of the contract similar to the award described in subsection (a) above is permitted under this option as well; At least fifty percent (50%) of the compensation for services for each annual period during the term of the contract is based on a periodic fixed fee or all of the compensation for services is based on a capitation fee or combination of a periodic fixed fee and a capitation fee. A capitation 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.9., a fixed dollar amount payable per month to a service provider for each member of a plan for whom the provider agrees to provide all needed services for a specified period. A capitation fee may include a variable component of up to twenty percent (20%) of the total capitation fee designed to protect the service provider against risks such as catastrophic loss. The term of the contract, including all renewal options, must not exceed five (5) years. The contract must be terminable by the Recipient on reasonable notice without penalty or cause, at the end of the third year of the contract; All of the compensation for services is based on a per-unit fee or a combination of a per-unit fee and a periodic fee. A per-unit fee is defined to mean a fee based on a unit of service provided as specified in the contract or otherwise specifically determined by an independent third party, such as the administrator of the program or the Recipient; e.9., a stated dollar amount for each specified procedure performed, car parked or passenger mile is a per-unit fee. The term of the contract, including all renewal options, must not exceed three (3) years. The contract must be terminable by the Recipient on reasonable notice, without penalty or cause, at the end of the second year of the contract term; or All of the compensation for services is based on a percentage of fees charged or a combination of a per-unit fee and a percentage of revenue or expense fee. During the start up period, however, compensation may be based on a percentage of gross revenues, adjusted gross revenues, or expenses of a facility. The term of the contract, including renewal options, must not exceed two (2) years. The contract must be terminable by the Recipient on reasonable notice without penalty or cause, at the end of the first year. This type of contract is permissible only with respect to contracts under which the service provider primarily provides services to third parties, and management contracts involving a facility during an initial start-up period for which there have been insufficient operations to establish a reasonable estimate of the amount of the annual gross revenues and expenses (e.9., a contract for general management services for the first year of the operations). lf the compensation terms of a management or service contract are materially revised, the requirements for compensation terms must be retested as of the date of the material revision and the management or service contract is treated as one that was newly entered into as of the date of the material revision. 19 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 10 A renewal option, for purposes of the foregoing, is defined to mean a provision under which the service provider has a legally enforceable right to renew the contract. Thus, for example, a provision under which a contract is automatically renewed for one (1) year periods absent cancellation by either party is not a renewal option, even if it is expected to be renewed. A cancellation penalty is defined to include a limitation on the Recipient's ability to compete with the service provider, a requirement that the Recipient purchase equipment, goods, or services from the service provider, and a requirement that the Recipient pay liquidated damages for cancellation of the contract; in comparison, a requirement effective on cancellation that the Recipient reimburse the service provider for ordinary and necessary expenses or a restriction against the Recipient hiring key personnel of the service provider is generally not a contract termination penalty. Another contract between the service provider and the Recipient, such as a loan or guarantee by the service provider, is treated as creating a contract termination penalty if that contract contains terms that are not customary or arm's length, or that could operate to prevent the Recipient from terminating the contract (e.9., 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 service provider must not have any role or relationship with the Recipient, that, in effect, substantially limits the Recipient's ability to exercise its rights, including cancellation rights, under the contract, based on all the facts and circumstances. 4.13 No Disposition of Financed Property. The Recipient does not expect to sell or otherwise dispose of any portion of the Project, in whole or in part, prior to the final maturity date of the Obligation. 4.14 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 lnstallment Payments. lnstallment Payments generally are expected to be derived from Net Revenues, and such current revenues are expected to equal or exceed the lnstallment Payments during each payment period. Any amounts accumulated in a sinking fund or bona fide debt service fund to pay lnstallment Payments (whether or not deposited to a fund or account established by the Recipient) will be disbursed to pay lnstallment Payments within thirteen months of the initial date of accumulation or deposit. Any such fund used for the payment of lnstallment Payments will be depleted once a year except for a reasonable carryover amount not exceeding earnings on such fund or one-twelfth of the lnstallment 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 otheruvise to be used to finance the Project or which are or will be used to acquire securities, obligations 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 lnstallment Payments on the Obligation within the meaning of Section 1.148-1(c) of the Treasury Regulations. lf any sinking fund or pledged fund comes into being with 20 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 10 respect to the Obligation before the Obligation has been fully retired which may be used to pay the lnstallment Payments, the Recipient will invest such sinking fund and pledged fund moneys at a yield that does not exceed the yield on the Bonds. 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 Obligation (the "Reserve Amount") as set forth in Exhibit D. 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 Obligation, will be treated as a reasonably required reserve fund. 4.19 Reimbursement Resolution. The "reimbursement resolution" adopted by the Recipient is incorporated herein by reference, pursuant to Exhibit A. 4.20 Reimbursement Expenditures. A portion of the Project Funds may be applied to reimburse the Recipient for Project costs paid before the date hereof, so long as the Project cost was (i) not paid prior to sixty (60) days before the Recipient's adoption of a declaration of official intent to finance the Project, (ii) not paid more than eighteen (18) months prior to the date hereof or the date the financed facility was placed-in-service, whichever is later, and (iii) not paid more than three (3) years prior to the date hereof (collectively, "Reimbursement Expenditures"), unless such cost is attributable to a "preliminary expenditure." Preliminary expenditure for this purpose means architectural, engineering, surveying, soil testing and similar costs incurred prior to the commencement of construction or rehabilitation of the Project, but does not include land acquisition, site preparation and similar costs incident to the commencement of acquisition, construction or rehabilitation of the Project. Preliminary expenditures may not exceed 20% of the costs of the Project financed with the Obligation. 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 Obligation. Absent an opinion of Nationally-Recognized Bond Counsel to the effect that such use of Project Funds will not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to Section 103 of the Code, the Recipient will use all Project Funds and the Project solely as set forth in the Agreement. 4.22 Rebate Obligations. lf the Recipient satisfies the requirements of one of the spending exceptions to rebate specified in Section 1.148-7 of the Treasury Regulations, amoL¡nts earned from investments, if any, acquired with the Project Funds will not be subject to the rebate requirements imposed under Section 1a8(f) of the Code. lf 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 Regulations at such time, including the payment of any rebate amount or any yield reduction payments calculated by the State Water Board or the Bank. 21 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 4.23 No Federal Guarantee. The Recipient will not directly or indirectly use any of the Project Funds in any manner that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code, taking into account various exceptions including any guarantee related to investments during an initialtemporary period until 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 under the Treasury Regulations. 4.24 No Notices or lnquiries From lRS. Within the last 10 years, the Recipient has not received any notice of a final action of the lnternal Revenue Service that determines that interest paid or payable on any debt obligation of the 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 time to reflect changes in the Code upon obtaining written approval of the State Water Board and the Bank and an opinion of Nationally-Recognized Bond Counsel to the effect that such amendment, modification 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 Application. The provisions in this Article lV shall apply to a Recipient only if any portion of the Project Funds is derived from proceeds of Bonds. 4.27 Reasonable Expectations. 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 question the accuracy or reasonableness of any representation made in the provisions in this Article lV. ARTICLEV MISCELLANEOUS PROVISIONS 5.1 Covenants. Tax Covenant. Notwithstanding any other provision hereof, the Recipient covenants and agrees that it will comply with the Tax Covenants set forth in Article lV attached hereto if any portion of the Project Funds is derived from proceeds of Bonds. Disclosure of Financial lnformation, Operating Data, and Other lnformation. 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 of the 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 time such reports are submitted to any dissemination agent, trustee, nationally (a) (b) 22 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061 -1 1 0 recognized municipal securities information repository, the Municipal Securities Rulemaking Board's Electronic Municipal Market Access (EMMA) website or other person or entity. 5.2 Assignability. The Recipient agrees and consents to any pledge, sale, or assignment to the Bank or a trustee for the benefit of the owners of the Bonds, if any, at any time of any portion of the State Water Board's estate, right, title, and interest and claim in, to and under this Agreement and the right to make all related waivers and agreements in the name and on behalf of the State Water Board, as agent and attorney-in-fact, and to perform all other related acts which are necessary and appropriate under this Agreement, if any, and the State Water Board's estate, right, title, and interest and claim in, to and under this Agreement to lnstallment Payments (but excluding the State Water Board's rights to Additional Payments and to notices, opinions and indemnification under each Obligation). This Agreement is not assignable by the Recipient, either in whole or in part, without the consent of the State Water Board in the form of a formal written amendment to this Agreement. 5.3 State Reviews and lndemnification. The parties agree that review or approval of Project plans and specifications by the State Water Board is for administrative purposes only and does not relieve the Recipient of its responsibility to properly plan, design, construct, operate, and maintain the Project. To the extent permitted by law, the Recipient agrees to indemnify, defend, and hold harmless the State Water Board, the Bank, and any trustee, and their officers, employees, and agents for the Bonds, if any (collectively, "lndemnified Persons"), against any loss or liability arising out of any claim or action brought against any lndemnified Persons from and against any and all losses, claims, damages, liabilities, or expenses, of every conceivable kind, character, and nature whatsoever arising out of, resulting from, or in any way connected with (1) the System or the Project or the conditions, occupancy, use, possession, conduct, or management of, work done in or about, or the planning, design, acquisition, installation, or construction, of the System or the Project or any part thereof; (2) the carrying out of any of the transactions contemplated by this Agreement or any related document; (3) any violation of any applicable law, rule or regulation, any environmental law (including, without limitation, the Federal Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the California Hazardous Substance Account Act, the Federal Water Pollution Control Act, the Clean Air Act, the 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 Section 13304, and any successors to said laws), rule or regulation or the release of any toxic substance on or near the System; or (4) any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements required to be stated therein, in light of the circumstances under which they were made, not misleading with respect to any information provided by the Recipient for use in any disclosure document utilized in connection with any of the transactions contemplated by this Agreement. To the fullest extent permitted by law, the Recipient agrees to pay and discharge any judgment or award entered or made against lndemnified Persons with respect to any such claim or action, and any settlement, compromise or other voluntary resolution. The provisions of this section shall survive the discharge of the Recipient's Obligation hereunder. 5.4 Termination; lmmediate Acceleration; lnterest. (a) This Agreement may be terminated by written notice during construction of the Project, or thereafter at any time prior to complete satisfaction of the Obligation by the Recipient, at the option of the State Water Board, upon violation by the Recipient of any material provision of this Agreement after such víolation has been called to the attention of the Recipient and after failure of the Recipient to bring itself into compliance with the provisions of this Agreement within a reasonable time as established by the Division. 23 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 (b) ln the event of such termination, the Recipient agrees, upon demand, to immediately repay to the State Water Board an amount equalto lnstallment Payments due hereunder, including accrued interest, and all penalty assessments due. ln the event of termination, interest shall accrue on all amounts due at the highest legal rate of interest from the date that notice of termination is mailed to the Recipient to the date of full satisfaction of the Obligation by the Recipient. (c) Where the Recipient is a private entity that has been determined to have violated an applicable prohibition in the Prohibition Statement below or has an employee who is determined by USEPA to have violated an applicable prohibition in the Prohibition Statement below that is either associated with performance under this aware or imputed to the Recipient using the standards and due process for imputing the conduct of an individual to an organization pursuant to 2 CFR Part 180, the Recipient acknowledges and agrees that this Obligation may become immediately due and payable and that penalties up to $175 million may be due by the Recipient to the State Water Board, in addition to any other criminal or civil penalties that may become due. The Recipient, its employees, its contractors, and any subrecipients or subcontractors may not engage in trafficking in persons, procure a commercial sex act, or use forced labor. 5.5 lncome Restrictions. The Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest thereon) accruing to or received by the Recipient under this Agreement shall be paid by the Recipient to the State, to the extent that they are properly allocable to costs for which the Recipient has been reimbursed by the State under this Agreement. 5.6 Prevailing Wages. The Recipient agrees to be bound by all applicable provisions of State Labor Code regarding prevailing wages. The Recipient shall monitor all agreements subject to reimbursement from this Agreement to assure that the prevailing wage provisions of the State Labor Code are being met. ln addition, the Recipient agrees to comply with the Davis-Bacon provisions of Exhibit G. 5.7 Timeliness. Time is of the essence in this Agreement. 5.8 Governing Law. This Agreement is governed by and shall be interpreted in accordance with the laws of the State of California. 5.9 Amendment. No amendment or variation of the terms of this Agreement shall be valid unless made in writing, signed by the parties and approved as required. No oral understanding or agreement not incorporated in this Agreement is binding on any of the parties. 5.10 Bonding. Where contractors are used, the Recipient shall not authorize construction to begin until each contractor has furnished a performance bond in favor of the Recipient in the following amounts: faithful performance (100%) of contract value; labor and materials (100%) of contract value. This requirement shall not apply to any contract for less than $20,000.00. 24 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 5.11 Compliance with Law, Regulations, etc. (a) The Recipient agrees that it will, at alltimes, comply with and require its contractors and subcontractors to comply with all applicable federal and state laws, rules, guidelines, regulations, and requirements. Without limitation of the foregoing, the Recipient agrees that, to the extent applicable, the Recipient will: (1) Comply with the provisions of the adopted environmental mitigation plan for the term of this Agreement; (2) Comply with the State Water Board's "Policy for lmplementing the Clean Water State Revolving Fund;" (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 lnterest. 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 Federalcompliance ln 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 of the 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 obligation 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 ór agency thereof due to such breach. ln 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 subdivisìon 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 Boardwill prepare a summary of the dispute and make recommendations 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 consideration of legal questions, provided that nothing herein shall be construed to make final the decision of the State Water Board, or any official or representative thereof, on any question of law. 25 City of Fresno Agreement No.: D15-01 01 1 Project No.: C-06-8061-1 1 0 (c) Recipient shall continue with the responsibilities under this Agreement during any dispute. 5.15 lndependent 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 unlav,rfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex, race, color, ancestry, religious creed, national origin, sexual orientation, physical disability (including HIV and AIDS), mental disability, medical condition (cancer), age (over 40), marital status, and denial of family care leave. (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)-(Ð et seq.; Cal. Code Regs., tit. 2, S 7285 eI seq.) Such regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full. (d) The Recipient, its contractors, and subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (e) The Recipient shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the Agreement. 5.17 No Third Party Rights. The parties to this Agreement do not create rights in, or grant remedies to, any third party as a beneficiary of this Agreement, or of any duty, covenant, obligation, or undertaking established herein. 5.18 Operation and Maintenance; lnsurance. The Recipient agrees to sufficiently and properly staff, operate and maintain all portions of the Project during its useful life in accordance with all applicable state and federal laws, rules and regulations. The Recipient will procure and maintain or cause to be maintained insurance on the System with responsible insurers, or as part of a reasonable system of self-insurance, in such amounts and against such risks (including damage to or destruction of the System) as are usually covered in connection with systems similar to the System. Such insurance may be maintained by the maintenance of a self- insurance plan so long as any such plan provides for (i) the establishment by the Recipient of a separate segregated self-insurance fund funded in an amount determined (initially and on at least an annual basis) by an independent insurance consultant experienced in the field of risk management employing accepted actuarial techniques and (ii) the establishment and maintenance of a claims processing and risk management program. ln the event of any damage to or destruction of the System caused by the perils covered by such insurance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the System. The Recipient shall begin such reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such net proceeds all costs and expenses 26 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 in connection with such reconstruction, repair or replacement so that the same shall be completed and the System shall be free and clear of all claims and liens. lf such net proceeds are insufficient to enable the Recipient to pay all remaining unpaid principal portions of the lnstallment Payments, the Recipient shall provide additional funds to restore or replace the damaged portions of the System. 5.19 Permits, Subcontracting, and Remedies. The Recipient shall comply in all material respects with all applicable federal, state and local laws, rules and regulations. Recipient shall procure all permits, licenses and other authorizations 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 allwork and for persons or entities engaged in work performed pursuant to this Agreement, including, but not limited to, contractors, subcontractors, suppliers, and providers of services. The Recipient shall be responsible for any and all disputes arising out of its contracts for work on the Project. The State Water Board will not mediate disputes between the Recipient and any other entity concerning responsibility for performance of work. 5.21 Related Litigation. Under no circumstances may a Recipient use funds from any disbursement under this Agreement to pay costs associated with any litigation the Recipient pursues against the State Water Board or any Regional Water Quality Control Board. Regardless of the outcome of any such litigation, and notwithstanding any conflicting language in this Agreement, the Recipient agrees to complete the Project funded by this Agreement or to repay all of the disbursed funds plus interest. 5.22 Rights in Data. The Recipient agrees that all data, plans, drawings, specifications, reports, computer programs, operating manuals, notes, and other written or graphic work produced in the performance of this Agreement are subject to the rights of the State as set forth in this section. The State shall have the right to reproduce, publish, and use all such work, or any part thereof, in any manner and for any purposes whatsoever and to authorize others to do so. lf any such work is copyrightable, the Recipient may copyright the same, except that, as to any work which is copyrighted by the Recipient, the State reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, and use such work, or any part thereof, and to authorize others to do so, and to receive electronic copies from the Recipient upon request. (40 CFR 31.34,31.36) 5.23 State Water Board Action; Costs and Attorney Fees. The Recipient agrees that any remedy provided in this Agreement is in addition to and not in derogation of any other legal or equitable remedy available to the State Water Board as a result of breach of this Agreement by the Recipient, whether such breach occurs before or after completion of the Project, and exercise of any remedy provided by this Agreement by the State Water Board shall not preclude the State Water Board from pursuing any legal remedy or right which would otherwise be available. ln the event of litigation between the parties hereto arising from this Agreement, it is agreed that each party shall bear its own costs and attorney fees. 27 City of Fresno Agreement No.: D1 5-0101 1 Project No.: C-06-8061 -1 1 0 5.24 Unenforceable Provision. ln the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. 5.25 Useful Life. The economic useful life of the Project, commencing at Project Completion, is at least equal to the term of this Agreement, as set forth in Exhibit B hereto. 5.26 Venue. The State Water Board and the Recipient hereby agree that any action arising out of this Agreement shall be filed and maintained in the Superior Court in and for the County of Sacramento, California. 5.27 Waiver and Rights of the State Water Board. Any waiver of rights by the State Water Board with respect to a default or other matter arising under the Agreement at any time shall not be considered a waiver of rights with respect to any other default or matter. Any rights and remedies of the State Water Board provided for in this Agreement are in addition to any other rights and remedies provided by law. 28 City of Fresno Agreement No.: D1 5-01 01 1 Project No.; C-06-8061-1 10 lN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. GITY OF FRESNO, A Galifornia municipa I Gorporation: By: Name: Title: Date; ATTEST: YVONNE SPENCE, CMC APPROVED AS TO FORM DOUGLAS T. SLOAN STATE WATER RESOURCES ?/t /t < By:- Nam Title: Date City By: Deputy Director City Clerk Deputy City Attorney 29 1. 2. 3. 4 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 EXHIBIT A - SCOPE OF WORK & INCORPORATED DOCUMENTS The Recipient agrees to start construction no later than the estimated date of September 15,2015. The estimated Completion of Construction date is hereby established as May 30,2017. 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. lf the Recipient fails to do so, then the undisbursed balance of this Agreement will be deobligated. lncorporated by reference into this Agreement are the following documents: (a) the Final Plans & Specifications, which are the basis for the construction contract to be awarded by the Recipient (Agreement will be amended to incorporate such document); (b) the Waste Discharge Requirement Order No. 5-01-254; and (c) the Recipient's Reimbursement Resolution No. 2014-204 dated December 11,2014. Scope of Work. (a) Project Objectives The objectives of the Project are to: (1) Protect and improve groundwater quality by reducing the use of percolation ponds; (2) lncrease the use of recycled water through urban reuse, groundwater recharge, and agricultural reuse to help meet water demands in the region; (3) Expand the recycled water system to enable the City's offset of potable water use, thereby enhancing sustainability of the water supply; and (4) Facilitate the goals related to recycled water use set forth in the City's Urban Water Management Plan. (b) Project Description The proposed Project includes the design and construction of recycled water pipelines and a booster pump station, described below, to convey tertiary treated recycled water from the RegionalWater Reclamation Facility (RWRF) for landscape irrigation in the City's Southwest Quadrant. Phase SWlA consists of about 16,690 LF of recycled water pipelines ranging from approximately 48 to 54 inches in diameter, Phase SWl B consists of about 21,000 LF of recycled water pipelines ranging from approximately 36 to 48 inches in diameterwith some 14 inch and I inch piping, Phase SWl C consists of about 26,100 LF of recycled water pipelines ranging from approximately 8 to 36 inches in diameter, Phase SWl D & SW4 consists of about 16,200 LF and 25,SS0 LF of recycled water pipelines, respectively, with varying sizes, and lastly, Phase Belmont Recycled Water Booster Pump Station consists of a booster pump station that is capable of producing a peak hour flow rate of about 10,700 gallons per minute. 5 A-1 1. 2 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 10 EXHIBIT B - PROJECT FINANCING AMOUNT Estimated Reasonable Cost. The estimated reasonable cost of the total Project, including associated planning and design costs, is fifty{hree million, three hundred ninety-five thousand, forty-nine dollars and zero cents ($53,395,049.00). Project Funding. Subject to the terms of this Agreement, the State Water Board agrees to provide Project Funds in the amount of up to fifty-two million, four hundred seventy-five thousand, forty-nine dollars and zero cents ($52,475,049.00). Payment, lnterest Rate, and Charges. The Recipient agrees to make all lnstallment Payments according to the schedule in Exhibit C at an interest rate of one percent (1.0%) per annum. The Recipient agrees to pay an Administrative Service Charge in lieu of interest as reflected in Exhibit C. The Recipient agrees to pay a Small Community Grant Fund Charge in lieu of interest as reflected in Exhibit C. IReserved] The term of this agreement is from August 19,2015 to May 30, 2047 . 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.) Preliminary budget costs are as follows: Planning and design allowances: $3,415,049 Construction costs and disbursements are not available until after this Agreement has been amended to incorporate Exhibit A-FBA, nor are they available for construction costs incurred prior to the dated as of date on the cover page of this Agreement. Any construction expenses incurred by the Recipient prior to such amendment of this Agreement are at the Recipient's risk. Failure to begin construction according to the timelines set forth in Exhibit A will require the Recipient to repay to the State Water Board all disbursed Project Funds, including planning and design allowances. 4. 5. 6. 7 B-1 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061 -1 1 0 EXHIBIT C - CWSRF PAYMENT SCHEDULE See the attached preliminary CWSRF Payment Schedule dated August20,2015. The finalCWSRF Payment Schedule will be forwarded to the Recipient after all disbursements have been paid and construction of the Project has been completed. c-1 California Clean Water SRF Payment Schedule Project No. 8061-l l0 - Fresno, City of Agreement: D15-0101I - based on Actual + Projected Disbursements Recycled Water Distribution System Southwest Quadrant Principal is paid over: 30 Years Interestrate: 1.00000% Ref Num Due Date I)ate Received Principal Interest Payment Rate o/o lnterest Payment Total P and I Payment Total Payment Ending Balance CPI lnterest I 2 3 4 5 6 7 8 9 l0 ll t2 13 t4 15 l6 t7 l8 l9 20 2l 22 23 24 25 26 27 28 29 30 5/30/20t8 5/30/2019 5130/2020 s/30/2021 s/30t2022 5ß0/2023 5/30t2024 5/30/2025 s/3012026 5t30t2027 s/30/2028 5/30/2029 5/30/2030 5/30/2031 5/30/2032 5t30/2033 5/30t2034 st30/203s 5130/2036 5/30/2037 5/3012038 s/30/2039 st30t2040 5/30t204r s/30t2042 s/30/2043 5t3012044 s130/2045 5/30/2046 st30t2047 1,236,077.38 I,433,050.81 1,s6s,220.52 1,565,195.03 l,580,846.98 1,s96,655.4s t,612,622.00 1,628,748.22 1,645,035.70 t,661,486.06 r,678,100.92 1,694,88 r.93 1,71 r,830.75 r,728,949.06 1,746,238.55 r,763,700.93 r,78r,337.94 r,799,15r.32 t,817,142.84 t,835,314.26 1,853,667.41 1,872,204.08 1,890,926.t2 l,909,835.38 |,928,933.74 1,948,223.07 r,967,705.30 1.,987,382.36 2,007,256.t8 2,027,328.71 359,939.99 436,155.20 482,38r.s 1 482,407.00 466,755.05 450,946.58 434,980.03 4 I 8,853.8 I 402,566.33 386,1 15.97 369,501.1 I 352,720.r0 33s,77t.28 318,652.97 301,363.48 283,90 1.1 0 266,264.09 248,450.71 230,459.19 212,287.77 193,934.62 175,397.95 156,675.9t 137,766.65 I18,668.29 99,378.96 79,896.73 60,2r9.67 40,345.85 20,273.29 t,s96,0t7.37 1,869,206.0 I 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.00 t,596,0t7.37 1,869,206.0 r 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2.047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602-03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.03 2,047,602.00 40,005,428.62 45,452,441.81 48,240,700.29 46,675,505.26 45,094,658.28' 43,498,002.83 4 I,885,380.83 40,256,632.61 38,611,596.91 36,950,1 10.85 35,272,009.93 33,577,r28.00 31,86s,297.2s 30. t3ó,348. l9 28,390,109.64 26,626,408.71 24,84s,070.77 23,04s,919.4s 2r,228,776.61 19,393,462.35 t7,539,794.94 15,667,590.86 13,776,664.74 1r,866,829.36 9,937,89s.62 7,989,672.55 6,02r,967.25 4,034,584.89 2,027,328.71 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 52,475,049.00 8,323,031.r9 60,798,080.r9 60,798,080. I 9 8/20/201s City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 EXHIBIT D - SPECIAL CONDITIONS Recipient agrees to perform the following special conditions: Environmental Special Conditions as follows: The following documents are incorporated by reference and the Recipient shall comply with the conditions and recommendations therein: 1. The comment letter dated May 2,2011, from Jeffrey R. Single at the California Department of Fish and Game (CDFG) to Kevin Norgaard at the City of Fresno regarding the Draft Environmental lmpact Report (DEIR) City of Fresno Recycled Water Master Plan. . Specifically regarding recommended mitigation measures for the San Joaquin kit fox, burrowing owl, migratory birds, and Swainson's hawks. 2. The letter dated April 14, 2015, from Rob Doster at the United States Department of lnterior, Fish and Wildlife Service (USFWS) Migratory Birds Program to Carina Gaytan regarding Request for Comments Pursuant to MBTA and BGEPA on Fresno Recycled Water Distribution Project 3. The email dated July 9, 2015, from Amanda Dwyer to Justin Sloan of the USFWS with the subject line "Fresno Recycled Water Project -CWSRF No. 8061-110". 4. The Memorandum dated July 2,2015, from Kevin Norgaard of the City of Fresno to Hunter Kunkel of the USFWS. 5. The June 2011 Mitigation Monitoring and Reporting Program for the City of Fresno Recycled Water Master Plan Environmental lmpact Report, including but not limited to the following mitigation measures: o 4.5.1through 4.5.12 for biological resources 6. The December 18, 2014 Mitigation Monitoring and Reporting Program, including but not limited to the following mitigation measures: o 4.7.1a through 4.7.1c for Air Quality;o 4.5.2,4.5.4a through 4.5.4b,4.5.8, 4.5.10 and BIO-1 through BIO-2 for Biological Resources;o 4.12.2b through 4.12.2c,4.12.3, and 4.12.4a through 4.12.4b for Cultural Resources;o 4.3.1a through 4.3.1c and GEO-1 for Geology, Soils, and Seismicity; ando 4.9.1a through 4.9.1c and 4.6.1a through 4.6.1b for Hazards and Hazardous Materials. The Recipient will make no changes in the Project, construction area, or special conditions, without obtaining prior approval from the State Water Board and the USFWS. 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 Quarterly Construction Status Reports, and shall report its environmental compliance efforts with these measures identified herein in the final Project Quarterly Construction Status Report for submittal to the State Water Board after the completion of the Project construction. D-1 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 l0 EXHIBIT D - SPECIAL CONDITIONS Financial Special Conditions as follows: 1. The City shall establish rates and charges sufficient to generate net revenues equal to at least 1.25 times the total annual debt service. 2. The City shall establish a restricted reserve fund, held in the Sewer Enterprise Fund, equalto 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 of the financing agreement and shall be subject to lien and pledge as security for the Obligation. D-2 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 EXHIBIT E - FEDERAL CONDITIONS & CROSS-CUTTERS The Recipient agrees to comply with the following conditions required by USEPA: 1. Architectural and engineering contracts. Where the Recipient contracts for program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying, mapping, or architectural related services, the Recipient shall ensure that such any such contract is negotiated in the same manner as a contract for architectural and engineering services is negotiated under chapter 11 of title 40, United States Code, or an equivalent State qualifications-based requirement as determined by the State Water Board. 2. GAAP. The Recipient must maintain project accounts according to Generally Accepted Accounting Principles (GAAP) as issued by the GovernmentalAccounting Standards Board (GASB). The Recipient shall maintain GAAP-compliant project accounts, including GAAP requirements relating to the reporting of infrastructure assets. 3. Fiscal sustainability. The Recipient certifies that it has developed and is implementing a fiscal sustainability plan for the Project that includes an inventory of critical assets that are a part of the Project, an evaluation of the condition and performance of inventoried assets or asset groupings, a certification that the recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan, and a plan for maintaining, repairing, and, as necessary, replacing the Project and a plan for funding such activities. 4. American lron and Steel. Unless the Recipient has obtained a waiver from USEPA on file with the State Water Board, the Recipient shall not purchase "iron and steel products" produced outside of the United States on this Project. 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 castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete, and construction materials. 5. DUNS. No Recipient or subrecipient may receive funding under this Agreement unless it has provided its DUNS number to the State Water Board. 6. Executive Compensation. 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 information regarding executive compensation to the State Water Board upon request, in order for the State Water Board to comply with USEPA requirements. 7. 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 performance 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 violation 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 payment will be due immediately, if a Recipient or subrecipient that is a private entity is determined to have violated the foregoing. Trafficking Victims Protection Act of 2000. E-1 æ1{ 15iv15 I City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-'1 10 EXHIBIT E - FEDERAL CONDITIONS & CROSS-CUTTERS Contractors, Subcontractors, Debarmentand Suspension, ExecutiveOrder 12549;2 CFR Part 180; 2 CFR Part 1532. The Recipient shall not subcontract with any party who is debarred or suspended or othenryise excluded from or ineligible for participation in federal assistance programs under Executive Order 12549, "Debarment and Suspension". The Recipient shall not subcontract with any individual or organization on USEPA's List of Violating Facilities. (40 CFR, Part 31.35, Gov. Code 4477) The Recipient certifies to the best of its knowledge and belief, that it and its principals: (a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any federal department or agency; (b) Have not within a three (3) year period preceding this Agreement been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, state or local) transaction or contract under a public transaction; violation of federal or state antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (c) Are not presently indicted for or othenvise criminally or civilly charged by a governmental entity (federal, state or local) with commission of any of the offenses enumerated in paragraph (b) of this certification; and (d) Have not within a three (3) year period preceding this application/proposal had one or more public transactions (federal, state or local) terminated for cause or default. 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 conditions 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 negation of this Agreement, or pursuance of legal remedies, including suspension and debarment. Anti-Lobbying Provisions (40 CFR Part 34) & Anti-Litigation 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 litigation against the United States unless authorized under existing 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 litigation against the United States or for lobbying or other political activities. The Recipient agrees to submit certification and disclosure forms in accordance with these provisions. ln accordance with the Byrd Anti-Lobbying Amendment, any Recipient who makes a prohibitèd 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 respective 2 CFR 200, 225, or 230, which prohibits the use of federal grant funds for litigation against the United States or for lobbying or other political activities. Disadvantaged Business Enterprises (40 CFR Part 33). The Recipient agrees to comply with the requirements of USEPA's Program for Utilization 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 Section 33.301, and retain all records documenting compliance with the six good faith efforts. 9 10 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061 -1 1 0 EXHIBIT E - FEDERAL CONDITIONS & CROSS-CUTTERS 11. Prevailing Wage. 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. Archeologicaland Historical Preservation Act of 1974, Pub. L. 86-523, as amended, Pub. L. g3-Zg1 16 USC $ 469a-1. 2. Clean Air Act, Pub. L. 84-159, as amended. 3. coastal Barrier Resources Act, Pub. L. 97-348, 96 stat. 1653; 16 usc S 3s01 et seq. 4. Coastal Zone ManagementAct, Pub. L. 92-583, as amended; 16 USC S 1451 et seq. 5. Endangered Species Act, Pub. L. 93-205, as amended; 16 USC S 1531 et seq.. 6. Environmental Justice, Executive Order 12898. 7 . Floodplain Management, Executive Order, 1 1988 as amended by Executive Order 12148. 8. Protection of Wetlands, Executive Order 1 1990, as amended by Executive Order No. 12608. 9. Farmland Protection Policy Act, Pub. L. 97-98; 7 USC S 4201 et seq. 10. Fish and Wildlife Coordination Act, Pub. L. 85-624, as amended. 1 1 . National Historic Preservation Act of 1966, Pub. L. 89-665, as amended, 80 Stat. 917 (1966) 16 USC $ 470 et seq. 12. Safe Drinking WaterAct, Pub. L. 93-523, as amended; 42 USC S 300f et seq. 13. Wild and Scenic Rivers Act, Pub. L. 90-542, as amended, 82 Stat. 913; 16 USC S 1271 et seq. 14. Essential Fish HabitatConsultation. Pub, L.94-265, asamended, 16 USC S 1801 etseq. 15. Recycled Materials. Executive Order 13101; Section 6002 Resource Conservation and Recovery Act -42 USC S 6962. Economic and Miscellaneous Authorities 1. Demonstration Cities and Metropolitan Development Act of 1966, Pub. L. 89-754, as amended, Executive Order 123721 42 USC S 3331 et seq. 2. Procurement Prohibitions under Section 306 of the Clean Air Act and Section 508 of the Clean Water Act, including Executive Order 11738, Administration of the Clean Air Act and the Federal Water Pollution Control Act with Respect to Federal Contracts, Grants, or Loans; 42 USC S 7606; 33 USC S 1368; 40 CFR Part 31. E-3 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 EXHIBIT E _ FEDERAL CONDITIONS & CROSS-CUTTERS 3. Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91-646, as amended; 42 USC ss4601 -4655 4.. Preservation of Open Competition and Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally Funded Construction Projects, EO 13202, as amended by EO 13208. 6. Hoteland Motel Fire Safety Act of 1990 (PL 101-391, as amended). Allconference, meeting, 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.oov/applications/hotel/. 7 . Records and financial reporting requirements. 40 CFR Part 31; 2 CRF Parts 200 and 1500. 8. Copyright requirements. 40 CFR Part 31; 2 CRF Parts 200 and 1500. Social Policy Authorities 1. Age Discrimination Act of 1975, Pub, L.94-135:42 USC S 6102. 2. Race Discrimination. Title Vl of the Civil Rights Act of 1964, Pub. L. 88-352.1 ; 42 USC S 2000d; 40 CFR Part 7. 3. Sex Discrimination. Section 13 of the Federal Water Pollution Control Act Amendments of 1972, Pub. L. 92-500 (the Clean Water Act); 33 USC S 1251; 40 CFR Part 7. 4. Disability Discrimination. Section 504 of the Rehabilitation Act of 1973, Pub. L. 93-112 (including Executive Orders 11914 and 11250); 29 USC S 794; 40 CFR Par17. 5. Equal Employment Opportunity, Executive Order 11246. 6. Section 129 of the Small Business Administration Reauthorization and Amendment Act of 1988, Pub. 1.100-590. E-4 City of Fresno Agreement No.: D1 5-01 01 I Project No.: C-06-8061-1 1 0 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 additional debt provisions of the following: The following outstanding debt is senior to the Obligation: Title lnterest Rate Sewer Revenue Bonds 1993 A 4.5o/o-5.25o/o Seotember 2023 The following outstanding debt is on parity with the Obligation: The following outstanding debt is subordinate to the Obligation: Tte lnterest Rate End Not aoolicable. Tte lnterest Rate End Date Sewer Revenue Bonds 2008 A 5%Seotember 2037 F-1 City of Fresno Agreement No.: D1 5-0101 1 Project No.: C-06-8061-1 1 0 EXHIBIT G - DAVIS-BACON REQUIREMENTS The Recipient shall have the primary responsibility to maintain payroll records as described in Section 3(iiXA), below and for compliance as described in Section 5. Requirements Under The Consolidated Appropriations Act, 2014 (P. L. 1 13-76) For Recipients That Are Governmental Entities: lf a Recipient has questions regarding when Davis Bacon (DB) applies, obtaining the correct DB wage determinations, DB provisions, or compliance monitoring, it may contact the State Water Board. The Recipient may also obtain additional guidance from DOL's web site at http://wurru.dol.qov/whd/ 1. Applicability of the Davis- Bacon (DB) prevailing wage requirements. Under the FY 2014 Consolidated Appropriation Act, DB prevailing wage requirements apply to the construction, alteration, and repair of treatment works carried out in whole or in part with assistance made available by a State water pollution control revolving fund and to any construction project carried out in whole or in part by assistance made available by a drinking water treatment revolving loan fund. lf the Recipient encounters a unique situation at a site that presents uncertainties regarding DB applicability, the Recipient must discuss the situation with the State Water Board before authorizing work on that site. 2. Obtaining Wage Determinations. (a) Recipients shall obtain the wage determination for the locality in which a covered activity subject to DB will take place prior to issuing requests for bids, proposals, quotes or other methods for soliciting contracts (solicitation) for activities subject to DB. These wage determinations shall be incorporated into solicitations and any subsequent contracts. Prime contracts must contain a provision requiring that subcontractors follow the wage determination incorporated into the prime contract. (i) While the solicitation remains open, the Recipient shall monitor www.wdol.qov weekly to ensure that the wage determination contained in the solicitation remains current. The Recipients shall amend the solicitation if DOL issues a modification more than 10 days prior to the closing date (i.e. bid opening) for the solicitation. lf DOL modifies or supersedes the applicable wage determination less than 10 days prior to the closing date, the Recipients may request a finding from the State Water Board that there is not a reasonable time to notify interested contractors of the modification of the wage determination. The State Water Board will provide a report of its findings to the Recipient. (ii) lf the Recipient does not award the contract within 90 days of the closure of the solicitation, any modifications or supersedes DOL makes to the wage determination contained in the solicitation shall be effective unless the State Water Board, at the request of the Recipient, obtains an extension of the 90 day period from DOL pursuant to 29 CFR 1.6(cX3Xiv). The Recipient shall monitor www.wdol.oov on a weekly basis if it does not award the contract within 90 days of closure of the solicitation to ensure that wage determinations contained in the solicitation remain current. (b) lf the Recipient carries out activity subject to DB by issuing a task order, work assignment or similar instrument to an existing contractor (ordering instrument) rather than by publishing a solicitation, the Recipient shall insert the appropriate DOL wage determination from www.wdol.qov into the ordering instrument. G-1 City of Fresno Agreement No.: D1 5-0101 1 Project No.: C-06-8061-1 10 EXHIBIT G - DAVIS-BACON REQUIREMENTS (c) Recipients shall review all subcontracts subject to DB entered into by prime contractors to verify that the prime contractor has required its subcontractors to include the applicable wage determinations. (d) As provided in 29 CFR 1.6(0, DOL may issue a revised wage determination applicable to a Recipient's contract after the award of a contract or the issuance of an ordering instrument if DOL determines that the Recipient has failed to incorporate a wage determination or has used a wage determination that clearly does not apply to the contract or ordering instrument. lf this occurs, the Recipient shall either terminate the contract or ordering instrument and issue a revised solicitation or ordering instrument or incorporate DOL's wage determination retroactive to the beginning of the contract or ordering instrument by change order. The Recipient's contractor must be compensated for any increases in wages resulting from the use of DOL's revised wage determination. 3. Contract and Subcontract provisions. (a) The Recipient shall insure that the Recipient(s) 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 or a construction project under the DWSRF financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in $ 5.1 or the FY 2014 Consolidated Appropriations Act, 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(bX2) of the Davis- Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of paragraph (aX1X¡v) of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in $ 5.5(a)(a). Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided that the employer's payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under paragraph (aXl Xii) 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 G-2 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 EXHIBIT G - DAVIS-BACON REQUIREMENTS be easily seen by the workers. Recipients may obtain wage determinations from the U.S. Department of Labor's web site, www.dol.qov. (ii)(A) The Recipient(s), on behalf of EPA, shall require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the contract shall be classified in conformance with the wage determination. The 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 classification in the wage determination; and (2) The classification is utilized in the area by the construction industry; and (3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination. (B) lf the contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and the Recipient(s) agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), documentation of the action taken and the request, including the local wage determination shall be sent by the Recipient (s) to the State award official. The State award official will transmit the request, to the Administrator of the Wage and Hour Division, Employment Standards Administration, 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 classification 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 time is necessary. (C) ln the event the contractor, the laborers or mechanics to be employed in the classification or their representatives, and the Recipient(s) do not agree on the proposed classification 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 determination within 30 days of receipt of the request and so advise the contracting officer or will notify the contracting officer within the 30-day period that additional time is necessary. (D) The wage rate (including fringe benefits where appropriate) determined pursuant to paragraphs (aXl XiiXB) or (C) of this section, shall be paid to all workers performing work in the classification under this contract from the first day on which work is performed in the classification. (i¡¡) Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof. G-3 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 10 EXHIBIT G - DAVIS-BACON REQUIREMENTS (iv) lf 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 plân or program. (2) Withholding. The Recipient(s), 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. ln the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work, all or part of the wages required by the contract, the (Agency) may, after written notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased. (3) Payrolls and basic records. (i) Payrolls and basic records relating thereto shall be maintained by the contractor during the course of the work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work. Such records shall contain the name, address, and social security number of each such worker, his or her correct classification, hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in section 1(bX2XB) 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(aX1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1(bX2XB) of the Davis-Bacon Act, the contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits. Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs. (ii)(A) The contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the Recipient, that is, the entity that receives the sub-grant or loan from the State capitalization grant recipient. Such documentation shall be available on request of the State recipient or EPA. As to each payroll copy received, the Recipient shall provide written confirmation in a form satisfactory to the State indicating whether or not the project is in compliance with the requirements of 29 CFR 5.5(a)(1) based on the most recent payroll copies for the specified week. The payrolls shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.s(aX3Xi), except that full G-4 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 EXHIBIT G - DAVIS-BACON REQUIREMENTS social security numbers and home addresses shall not be included on the weekly payrolls. lnstead the payrolls shall only need to include an individually identifying number for each employee (e.9., the last four digits of the employee's social security number). The required weekly payroll information may be submitted in any form desired. Optional Form WH-347 is available for this purpose from the Wage and Hour Division Web site at http://www.dol.gov/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(s) for transmission to the State or EPA if requested by EPA, the State, the contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements, lt 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(s). (B) Each payroll submitted shall be accompanied by a "Statement of Compliance," signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following: (1) That the payroll for the payroll period contains the information required to be provided under $ 5.5 (aX3Xii) of Regulations, 29 CFR part 5, the appropriate information is being maintained under $ 5.5 (aX3Xi) of Regulations, 29 CFR part 5, and that such information is correct and complete; (2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR part 3; (3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract. (C) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH-347 shall satisfy the requirement for submission of the "Statement of Compliance" required by paragraph (a)(3XiiXB) of this section. (D) The falsification of any of the above certifications may subject the contractor or subcontractor to civil or criminal prosecution under section 1001 of title 18 and section 231 of title 31 of the United States Code. (iii) The contractor or subcontractor shall make the records required under paragraph (aX3Xi) of this section available for inspection, copying, or transcription by authorized representatives of the State, EPA or the Department of Labor, and shall permit such representatives to interview employees during working hours on the job. lf 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, G-5 City of Fresno Agreement No.: D15-01 01 1 Project No.: C-06-8061 -1 1 0 EXHIBIT G - DAVIS-BACON REQUIREMENTS sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds. Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR 5.12. (4) Apprentices and trainees-- (i) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they performed when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice. The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the contractor as to the entire work force under the registered program. Any worker listed on a payroll at an apprentice wage rate, who is not registered or otherwise employed as stated above, shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. ln addition, any apprentice performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. Where a contractor is performing construction on a project in a locality other than that in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyman's hourly rate) specified in the 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 hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. lf the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. lf the Administrator determines that a different practice prevails for the applicable apprentice classification, fringes shall be paid in accordance with that determination. ln the event the Office of Apprenticeship Training, Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the contractor will no longer be permitted to utilize apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved. (ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not be . greater than permitted under the plan approved by the Employment and Training Administration. Every trainee must be paid at not less than the rate specified in the approved program for the trainee's level of progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. lf the G-6 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 EXHIBIT G - DAVIS.BACON REQUIREMENTS trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination which provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. ln addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. ln the event the Employment and Training Administration withdraws approval of a training program, the contractor will no longer be permitted to utilize 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 Executive Order 11246, as amended and 29 CFR part 30. (5) Compliance with Copeland Act requirements. The contractor shall comply with the requirements of 29 CFR part 3, which are incorporated by reference in this contract. (6) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses contaÌned in 29 CFR 5.5(aXf ) through (10) and such other clauses as the EPA determines may by appropriate, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR 5.5. (7) Contract termination; debarment. A breach of the contract clauses in 29 CFR 5.5 may be grounds for termination of the contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR 5.12. (8) Compliance with Davis-Bacon and Related Act requirements. All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are herein incorporated by reference in this contract. (9) Disputes concerning labor standards. Disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the contractor (or any of its subcontractors) and Recipient(s), State, EPA, the U.S. Department of Labor, or the employees or their representatives. (1 0) Certification of eligibility. (i) By entering into this contract, the contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the contractor's firm is a person or firm ineligible to be awarded Government contracts by virtue of section 3(a) of the Davis- Bacon Act or 29 CFR 5.12(a)(1). G-7 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-'1 1 0 EXHIBIT G _ DAVIS-BACON REQUIREMENTS (ii) No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1). (iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 u.s.c. 1001. 4. Contract Provision for Contracts in Excess of $100,000. (a) Contract Work Hours and Safety Standards Act. The Recipient shall insert the following clauses set forth in paragraphs (a)(1), (2), (3), and (4) of this section in full in any contract in an amount in excess of $100,000 and subject to the overtime provisions of the Contract Work Hours and Safety Standards Act. These clauses shall be inserted in addition to the clauses required by Item 3, above or 29 CFR 4.6. As used in this paragraph, the terms laborers and mechanics include watchmen and guards. (1) Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek. (2) Violation; liability for unpaid wages; liquidated damages. ln 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. ln addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (a)(1) of this section, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (aX1) of this section. (3) Withholding for unpaid wages and liquidated damages. The Recipient, upon written request of the EPA Award Official or an authorized representative of the Department of Labor, shall withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (bX2) of this section. (4) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (aX1) through (a) of this section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (aX1) through (4) of this section. (b) ln addition to the clauses contained in ltem 3, above, in any contract subject only to the Contract Work Hours and Safety Standards Act and not to any of the other statutes cited in 29 G-B City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 10 EXHIBIT G _ DAVIS-BACON REQUIREMENTS CFR 5.1, the Recipient shall insert a clause requiring that the contractor or subcontractor shall maintain payrolls and basic payroll records during the course of the work and shall preserve them for a period of three years from the completion of the contract for all laborers and mechanics, including guards and watchmen, working on the contract. Such records shall contain the name and address of each such employee, social security number, correct classifications, hourly rates of wages paid, daily and weekly number of hours worked, deductions made, and actualwages paid. Further, the Recipient shall insert in any such contract a clause providing hat the records to be maintained under this paragraph shall be made available by the contractor or subcontractor for inspection, copying, or transcription by authorized representatives of the USEPA, the Department of Labor, and the State Water Board, and the contractor or subcontractor will permit such representatives to interview employees during working hours on the job. 5. ComplianceVerification (a) The Recipient shall periodically interview a sufficient number of employees entitled to DB prevailing wages (covered employees) to verify that contractors or subcontractors are paying the appropriate wage rates. As provided in 29 CFR 5.6(a)(6), all interviews must be conducted in confidence. The Recipient must use Standard Form 1445 (SF 1445) or equivalent documentation to memorialize the interviews. Copies of the SF 1445 are available from EPA on request. (b) The Recipient shall establish and follow an interview schedule based on its assessment of the risks of noncompliance with DB posed by contractors or subcontractors and the duration of the contract or subcontract. Recipients must conduct more frequent interviews if the initial interviews or other information indicated that there is a risk that the contractor or subcontractor is not complying with DB. Recipients shall immediately conduct interviews in response to an alleged violation of the prevailing wage requirements. All interviews shall be conducted in confidence. (c) The Recipient shall periodically conduct spot checks of a representative sample of weekly payroll data to verify that contractors or subcontractors are paying the appropriate wage rates. The Recipient shall establish and follow a spot check schedule based on its assessment of the risks of noncompliance with DB posed by contractors or subcontractors and the duration of the contract or subcontract. At a minimum, if practicable, the Recipient should spot check payroll data within two weeks of each contractor or subcontractor's submission of its initial payroll data and two weeks prior to the completion date the contract or subcontract. Recipients must conduct more frequent spot checks if the initial spot check or other information indicates that there is a risk that the contractor or subcontractor is not complying with DB. ln addition, during the examinations the Recipient shall verify evidence of fringe benefit plans and payments there under by contractors and subcontractors who claim credit for fringe benefit contributions. (d) The Recipient shall periodically review contractors and subcontractors use of apprentices and trainees to verify registration and certification with respect to apprenticeship and training programs approved by either the U.S Department of Labor or a state, as appropriate, and that contractors and subcontractors are not using disproportionate numbers of, laborers, trainees and apprentices. These reviews shall be conducted in accordance with the schedules for spot checks and interviews described in ltem 5(b) and (c) above. (e) Recipients 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 htto://www. dol.qov/contacts/whd/america2. htm. G-9 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 10 EXHIBIT H - COMPLIANCE WITH CROSS-CUTTING STATE AUTHORITIES 1. EMERGENCY DROUGHT REGULATIONS The Recipient certifies that it complies with and shall continue to comply with the State Water Board's Drought Emergency Water Conservation regulations in Section 863-866 of title 23 of the California Code of Regulations. The Recipient will include a discussion of its implementation in reports submitted pursuant to Section 2.15 of this Agreement. 2. CDIAC PRE-ISSUANCE and POST ISSUANCE REPORTS lf Recipient is a local or state government entity, Recipient must submit a Pre-lssuance Report to California Debt and lnvestment Advisory Commission 30 days prior to the issuance of any debt according to the requirements of Government Code section 8855(i). Such a Recipient must also submit a Post-lssuance Report to California Debt and lnvestment Advisory Commission 21 days after to the issuance of any debt according to the requirements of Government Code section 8855ü). 3. COMPLIANCE WITH STATE AUTHORITIES Recipient represents that is in in compliance with and agrees that it will continue to maintain compliance with the state authorities set forth below: (a) Monthly Water Diversion Reporting lf Recìpient is a water diverter, Recipient must maintain compliance with Water Code section 5103, subdivision (e)(2)(A) by submitting monthly diversion reports to the Division of Water Rights of the State Water Resources Control Board. (b) Public Works Contractor Registration With Department Of lndustrial Relations To bid for public works contracts, Recipient and Recipient's subcontractors must register with the Department of lndustrial Relations as required by Labor Code sections 1725.5 and 1771.1. Pursuant to subdivision (e) of section 1725.5 and subdivision (g) of section 1771.1,hhe registratíon requirements apply to any bid proposal submitted on or after March 1 ,2015, and any contract entered into on or after April I ,2015. (c) Volumetric Pricing & Water Meters lf Recipient is an "urban water supplier" as defined by Water Code section 10617, Recipient must charge each customer for actual water volume measured by water meter according to the requirements of Water Code sections 526 and 527. Section 527 further requires that such suppliers not subject to section 526 install water meters on all municipal and industrial service connections within their service area by 2025. (d) Urban Water Demand Management lf Recipient is an "urban water supplier" as defined by Water Code section 10617, Recipient must implement water demand management measures approved by the Department of Water Resources according to the requirements of Water Code section 10631 .5, subdivision (a)(1). (e) Delta Plan Consistency Findings if Recipient is a state or local public agency and the proposed action is covered by the Delta Plan, Recipient must submit certification of project consistency with the Delta Plan to the Delta H-1 City of Fresno Agreement No.: D1 5-01 01 1 Project No. : C-06-8061 -1 1 0 EXHIBIT H - COMPLIANCE WITH CROSS-CUTTING STATE AUTHORITIES Stewardship Council according to the requirements of Water Code section 85225 and California Code of Regulations, title 23, section 5002. ' (0 Agricultural Water Management Plan Consistency lf Recipient is an agricultural water supplier as defined by Water Code section 10608.12, Recipient must comply with Agricultural Water Management Planning requirements as mandated by Water Code section 10852. (g) Charter City Project Labor Requirements lf Recipient is a charter city as defined ín Labor Code section 1782, subdivisíon (dX2), Recipìent will comply with the requirements of Labor Code section 1782 and Public Contract Code section 2503 as discussed in the following subparts (a) and (b). (1) Prevailing Wage Recipient certifies that it is eligible for state funding assistance notwithstanding Labor Code section 1782. Specifically Recipient certifies that no charter provision nor ordinance authorizes a construction project contractor not to comply with Labor Code's prevailing wage rate requirements, rìor, within the prior two years (starting from January 1,2015 or after) has the city awarded a public works contract without requiring the contractor to comply with such wage rate requirements according to Labor Code section 1782. (2) Labor Agreements Recipient certifies that no charter provision, initiative, or ordinance limits or constrains the city's authority or discretion to adopt, require, or utilize project labor agreements that include all the taxpayer protection antidiscrimination provisions of Public Contract Code section 2500 in construction projects, and that Recipient is accordingly eligible for state funding or financial assistance pursuant to Public Contract Code section 2503. H-2 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 10 EXHIBIT I- MATERIAL LITIGATION, INVESTIGATIONS, AUDITS None. l-1 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061 -1 1 0 EXHIBIT J - NEW RESTRICTIONS ON LOBBYING 40 CFR Part 34 - New Restrictions on Lobbying Subpart A-General S34.100 Conditions on use of funds. (a) No appropriated funds may be expended by the recipient of a Federal contract, grant, loan, or cooperative agreement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. (b) Each person who requests or receives from an agency a Federal contract, grant, loan, or cooperative agreement shall file with that agency a certification, set forth in appendix A, that the person has not made, and will not make, any payment prohibited by paragraph (a) of this section. (c) Each person who requests or receives from an agency a Federal contract, grant, loan, or a cooperative agreement shall file with that agency a disclosure form, set forth in appendix B, if such person has made or has agreed to make any payment using nonappropriated funds (to include profits from any covered Federal action), which would be prohibited under paragraph (a) of this section if paid for with appropriated funds. (d) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a statement, set forth in appendix A, whether that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or guarantee. (e) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a disclosure form, set forth in appendix B, if that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or guarantee. S34.105 Definitions. For purposes of this part: (a) Agency, as defined in 5 U.S.C. 552(f), includes Federal executive departments and agencies as well as independent regulatory commissions and Government corporations, as defined in 31 U.S.C. e101( 1 ). (b) Covered Federal action means any of the following Federal actions: (1) The awarding of any Federal contract; (2) The making of any Federal grant; (3) The making of any Federal loan; J-2 (c) City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 EXHIBIT J - NEW RESTRICTIONS ON LOBBYING (a) The entering into of any cooperative agreement; and, (5) The extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. Covered Federal action does not include receiving from an agency a commitment providing for the United States to insure or guarantee a loan. Loan guarantees and loan insurance are addressed independently within this part. Federal contract means an acquisition contract awarded by an agency, including those subject to the Federal Acquisition Regulation (FAR), and any other acquisition contract for real or personal property or services not subject to the FAR. Federal cooperative agreement means a cooperative agreement entered into by an agency. Federal grant means an award of financial assistance in the form of money, or property in lieu of money, by the Federal Government or a direct appropriatíon made by law to any person. The term does not include technical assistance which provides services instead of money, or other assistance in the form of revenue sharing, loans, loan guarantees, loan insurance, interest subsidies, insurance, or direct United States cash assistance to an individual. Federal loan means a loan made by an agency. The term does not include loan guarantee or loan rnsurance. lndian tribe and tribal organization have the meaning provided in section 4 of the lndian Self- Determination and Education Assistance Act (25 U.S.C. 4508). Alaskan Natives are included under the definitions of lndian tribes in that Act. lnfluencing or attempting to influence means making, with the intent to influence, any communication to or appearance before an officer or employee or any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any covered Federalaction. Loan guarantee and loan insurance means an agency's guarantee or insurance of a loan made by a person. Local government means a unit of government in a State and, if chartered, established, or otherwise recognized by a State for the performance of a governmental duty, including a local public authority, a special district, an intrastate district, a council of governments, a sponsor group representative organization, and any other instrumentality of a local government. Officer or employee of an agency includes the following individuals who are employed by an agency: (f ) An individualwho is appointed to a position in the Government under title 5, U.S. Code, including a position under a temporary appointment; (2) A member of the uniformed services as defined in section 101(3), title 37, U.S. Code; (3) A special Government employee as defined in section 202, title 18, U.S. Code; and, (4) An individual who is a member of a Federal advisory committee, as defined by the Federal Advisory Committee Act, title 5, U.S. Code appendix 2. (d) (e) (0 (g) (h) o ü) (k) J-3 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 EXHIBIT J - NEW RESTRICTIONS ON LOBBYING (l) Person means an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for profit or not for profit. This term excludes an lndían tribe, tribal organization, or any other lndian organization with respect to expenditures specifically permitted by other Federal law. (m) Reasonable compensation means, with respect to a regularly employed officer or employee of any person, compensation that is consistent with the normal compensation for such officer or employee for work that is not furnished to, not funded by, or not furnished in cooperation with the Federal Government. (n) Reasonable payment means, with respect to professional and other technical services, a payment in an amount that is consistent with the amount normally paid for such services in the private sector. (o) Recipient includes all contractors, subcontractors at any tier, and subgrantees at any tier of the recipient of funds received in connection with a Federal contract, grant, loan, or cooperative agreement. The term excludes an lndian tribe, tribal organization, or any other lndian organization with respect to expenditures specifically permitted by other Federal law. (p) Regularly employed means, with respect to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or a commitment providing for the United States to insure or guarantee a loan, an officer or employee who is employed by such person for at least 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person for receipt of such contract, grant, loan, cooperative agreement, loan insurance commitment, or loan guarantee commitment. An officer or employee who is employed by such person for less than 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person shall be considered to be regularly employed as soon as he or she is employed by such person for 130 working days. (q) State means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, a territory or possession of the United States, an agency or instrumentality of a State, and a multi-State, regional, or interstate entity having governmental duties and powers. S34.110 Certification and disclosure. (a) Each person shall file a certification, and a disclosure form, if required, with each submission that initiates agency consideration of such person for: (1) Award of a Federal contract, grant, or cooperative agreement exceeding $100,000; or (2) An award of a Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000. (b) Each person shall file a certification, and a disclosure form, if required, upon receipt by such person of: (1) A Federal contract, grant, or cooperative agreement exceeding $100,000; or (2) A Federal loan oi a commitment providing for the United States to insure or guarantee a loan exceeding $150,000, J4 City of Fresno Agreement No.: D15-0101 1 Project No.: C-06-8061-1 1 0 EXHIBIT J _ NEW RESTRICTIONS ON LOBBYING Unless such person previously filed a certification, and a disclosure form, if required, under paragraph (a) of this section. (c) Each person shall file a disclosure form at the end of each calendar quarter in which there occurs any event that requires disclosure or that materially affects the accuracy of the information contained in any disclosure form previously filed by such person under paragraphs (a) or (b) of this section. An event that materially affects the accuracy of the information reported includes: (1) A cumulative increase of $25,000 or more in the amount paid or expected to be paid for influencing or attempting to influence a covered Federal action; or (2) A change in the person(s) or individual(s) influencing or attempting to influence a covered Federal action; or, (3) A change in the office(s), employee(s), or Membe(s) contacted to influence or attempt to influence a covered Federal action. (d) Any person who requests or receives from a person referred to in paragraphs (a) or (b) of this section: (1) A subcontract exceeding $100,000 at any tier under a Federal contract; (2) A subgrant, contract, or subcontract exceeding $100,000 at any tier under a Federal grant; (3) A contract or subcontract exceed¡ng $100,000 at any tier under a Federal loan exceeding $150,000; or, (4) A contract or subcontract exceeding $100,000 at any tier under a Federal cooperative agreement, Shall file a certification, and a disclosure form, if required, to the next tier above. (e) All disclosure forms, but not certifications, shall be fonruarded from tier to tier until received by the person referred to in paragraphs (a) or (b) of this section. That person shall forward all disclosure forms to the agency. (f) Any certification or disclosure form filed under paragraph (e) of this section shall be treated as a material representation of fact upon which all receiving tiers shall rely. All liability arising from an erroneous representation shall be borne solely by the tier filing that representation and shall not be shared by any tier to which the erroneous representation is fonryarded. Submitting an erroneous certification or disclosure constitutes a failure to file the required certification or disclosure, respectively. lf a person fails to file a required certification or disclosure, the United States may pursue all available remedies, including those authorized by section 1352, title 31, U.S. Code. (g) For awards and commitments in process prior to December 23, 1989, but not made before that date, certifications shall be required at award or commitment, covering activities occurring between December 23, 1989, and the date of award or commitment. However, for awards and commitments in process prior to the December 23, 1989 effective date of these provisions, but not made before December 23, 1989, disclosure forms shall not be required at time of award or commitment but shall be filed within 30 days. (h) No reporting is required for an activity paid for with appropriated funds if that activity is allowable under either subpart B or C. J-5 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 EXHIBIT J - NEW RESTRICTIONS ON LOBBYING Subpart B-Activities by Own Employees S34.200 Agency and legislative liaison. (a) The prohibition on the use of appropriated funds, in $34.100 (a), does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement if the payment is for agency and legislative liaison activities not directly related to a covered Federal action. (b) For purposes of paragraph (a) of this section, providing any information specifically requested by an agency or Congress is allowable at any time. (c) For purposes of paragraph (a) of this section, the following agency and legislative liaison activities are allowable at any time only where they are not related to a specific solicitation for any covered Federal action: (1) Discussing with an agency (including individualdemonstrations) the qualities and characteristics of the person's products or services, conditions or terms of sale, and service capabilities; and, (2) Technical discussions and other activities regarding the application or adaptation of the person's products or services for an agency's use. (d) For purposes of paragraph (a) of this section, the following agencies and legislative liaison activities are allowable only where they are prior to formal solicitation of any covered Federal action: (1) Providing any information not specifically requested but necessary for an agency to make an informed decision about initiation of a covered Federal action; (2) Technical discussions regarding the preparation of an unsolicited proposal prior to its official submission; and, (3) Capability presentations by persons seeking awards from an agency pursuant to the provisions of the Small Business Act, as amended by Public Law 95-507 and other subsequent amendments. (e) Only those activities expressly authorized by this section are allowable under this section. S34.205 Professional and technical services. (a) The prohibition on the use of appropriated funds, in $34.100 (a), does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or an extension, continuation, renewal, amendment, or modification of a Federal contract, grant, loan, or cooperative agreement if payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal contract, grant, loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement. (b) For purposes of paragraph (a) of this section, "professional and technical services" shall be limited to advice and analysis directly applying any professional or technical discipline. For example, drafting of a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment J-6 City of Fresno Agreement No.: D1 5-01 01 I Project No.: C-06-8061 -1 1 0 EXHIBIT J _ NEW RESTRICTIONS ON LOBBYING rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action. (c) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation, or reasonably expected to be required by law or regulation, and any other requirements in the actual award documents. (d) Only those services expressly authorized by this section are allowable under this section. S34.210 Reporting. No reporting is required with respect to payments of reasonable compensation made to regularly employed officers or employees of a person. Subpart C-Activities by Other Than Own Employees S34.300 Professional and technical services. (a) The prohibition on the use of appropriated funds, in $34.100 (a), does not apply in the case of any reasonable payment to a person, other than an officer or employee of a person requesting or receiving a covered Federal action, if the payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal contract, grant, loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement. (b) The reporting requirements in $34.1 10 (a) and (b) regarding filing a disclosure form by each person, if required, shall not apply with respect to professional or technical services rendered directly in the preparation, submission, or negotiation of any commitment providing for the United States to insure or guarantee a loan. (c) For purposes of paragraph (a) of this section, "professional and technical services" shall be limited to advice and analysis directly applying any professional or technical discipline. For example, drafting or a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide J-7 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 EXHIBIT J _ NEW RESTRICTIONS ON LOBBYING legal advice or analysis directly and solely related to the legal aspects of his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action. (d) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation, or reasonably expected to be required by law or regulation, and any other requirements in the actual award documents. (e) Persons other than officers or employees of a person requesting or receiving a covered Federal action include consultants and trade associations. (f) Only those services expressly authorized by this section are allowable under this section. Subpart D-Penalties and Enforcement S34.400 Penalties. (a) Any person who makes an expenditure prohibited herein shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such expenditure. (b) Any person who fails to file or amend the disclosure form (see appendix B) to be filed or amended if required herein, shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. (c) A filing or amended filing on or after the date on which an administrative action for the imposition of a civil penalty is commenced does not prevent the imposition of such civil penalty for a failure occurring before that date. An administrative action is commenced with respect to a failure when an investígating official determines in writing to commence an investigation of an allegation of such failure. (d) ln determining whether to impose a civil penalty, and the amount of any such penalty, by reason of a violation by any person, the agency shall consider the nature, circumstances, extent, and gravity of the violation, the effect on the ability of such person to continue in business, any prior violations by such person, the degree of culpability of such person, the ability of the person to pay the penalty, and such other matters as may be appropriate. (e) First offenders under paragraphs (a) or (b) of this section shall be subject to a civil penalty of $10,000, absent aggravating circumstances. Second and subsequent offenses by persons shall be subject to an appropriate civil penalty between $10,000 and $100,000, as determined by the agency head or his or her designee. (Ð An imposition of a civil penalty under this section does not prevent the United States from seeking any other remedy that may apply to the same conduct that is the basis for the imposition of such civil penalty. S34.405 Penalty procedures. J-8 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 1 0 EXHIBIT J - NEW RESTRICTIONS ON LOBBYING Agencies shall impose and collect civil penalties pursuant to the provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 3812, insofar as these provisions are not inconsistent with the requirements herein. S34.410 Enforcement. The head of each agency shall take such actions as are necessary to ensure that the provisions herein are vigorously implemented and enforced in that agency. Subpart E-Exemptions S34.500 Secretary of Defense. (a) The Secretary of Defense may exempt, on a case-by-case basis, a covered Federal action from the prohibition whenever the Secretary determines, in writing, that such an exemption is in the national interest. The Secretary shall transmit a copy of each such written exemption to Congress immediately after making such a determination. (b) The Department of Defense may issue supplemental regulations to implement paragraph (a) of this section. Subpart F-Agency Reports S34,600 Semi-annual compilation. (a) The head of each agency shall collect and compile the disclosure reports (see appendix B) and, on May 31 and November 30 of each year, submit to the Secretary of the Senate and the Clerk of the House of Representatives a report containing a compilation of the information contained in the disclosure reports received during the six-month period ending on March 31 or September 30, respectively, of that year. (b) The report, including the compilation, shall be available for public inspection 30 days after receipt of the report by the Secretary and the Clerk. (c) lnformation that involves intelligence matters shall be reported only to the Select Committee on lntelligence of the Senate, the Permanent Select Committee on lntelligence of the House of Representatives, and the Committees on Appropriations of the Senate and the House of Representatives in accordance with procedures agreed to by such committees. Such information shall not be available for public inspection. (d) lnformation that is classified under Executive Order 12356 or any successor order shall be reported only to the Committee on Foreign Relations of the Senate and the Committee on Foreign Atfairs of the House of Representatives or the Committees on Armed Services of the Senate and the House of Representatives (whichever such committees have jurisdiction of matters involving such information) and to the Committees on Appropriations of the Senate and the House of Representatives in accordance with procedures agreed to by such committees. Such information shall not be available for public inspection. (e) The first semi-annual compilation shall be submitted on May 31, 1990, and shall contain a compilation of the disclosure reports received from December 23, 1989 to March 31, 1990. J-9 City of Fresno Agreement No.: D1 5-01 01 1 Project No.: C-06-8061-1 10 EXHIBIT J - NEW RESTRICTIONS ON LOBBYING (Ð Major agencies, designated by the Office of Management and Budget (OMB), are required to provide machine-readable compilations to the Secretary of the Senate and the Clerk of the House of Representatives no later than with the compilations due on May 31, 1991. OMB shall provide detailed specifications in a memorandum to these agencies. (g) Non-major agencies are requested to provide machine-readable compilations to the Secretary of the Senate and the Clerk of the House of Representatives. (h) Agencies shall keep the originals of all disclosure reports in the official files of the agency. S34.605 lnspector General Report. (a) The lnspector General, or other official as specified in paragraph (b) of this section, of each agency shall prepare and submit to Congress each year, commencing with submission of the President's Budget in 1991 , an evaluation of the compliance of that agency with, and the effectiveness of, the requirements herein. The evaluation may include any recommended changes that may be necessary to strengthen or improve the requirements. (b) ln the case of an agency that does not have an lnspector General, the agency official comparable to an lnspector General shall prepare and submit the annual report, or, if there is no such comparable otficial, the head of the agency shall prepare and submit the annual report. (c) The annual report shall be submitted at the same time the agency submits its annual budget justifications to Congress. (d) The annual report shall include the following: All alleged violations relating to the agency's covered Federal actions during the year covered by the report, the actions taken by the head of the agency in the year covered by the report with respect to those alleged violations and alleged violations in previous years, and the amounts of civil penalties imposed by the agency in the year covered by the report. J-1 0