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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
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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.
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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.
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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
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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.
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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
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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,
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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
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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).
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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
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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.
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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
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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.
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City of Fresno
Agreement No.: D15-0101 1
Project No.: C-06-8061-1 10
EXHIBIT I- MATERIAL LITIGATION, INVESTIGATIONS, AUDITS
None.
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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;
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(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)
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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,
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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.
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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
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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
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Agreement No.: D1 5-01 01 1
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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.
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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.
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(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.
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