HomeMy WebLinkAboutCalifornia State Water Resources Control Board - Installment Sales Agreement Southeast Surface Water Treatment Facility Drinking Water State revolving Fund Project No 1010007-028C Agreement No D15-02012t5-ıq"
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CITY OF FRESNO
AND
CALIFORNIA STATE WATER RESOURCES CONTROL BOARD
INSTALLMENT SALE AGREEMENT
PUBLIC WATER SYSTEM CONSTRUCTION FINANCING
SOUTHEAST SURFACE WATER TREATMENT FACILITY
DRINKING WATER STATE REVOLVING FUND PROJECT NO. 101OOO7-028C
AGREEMENT NO. D1 5-02012
AMOUNT: $195,489,000
ELIGIBLE START DATE:July 15,2015
END DATE: January 1,2049
DATED AS OF September 29,2015
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
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.
5.24 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 violation has been called to the attention of the Recipient and after failure
of the Recipient to bring itself into compliance with the provisions of this Agreement within a
reasonable time as established by the Division.
(b) ln the event of such termination, the Recipient agrees, upon demand, to immediately repay to
the State Water Board an amount equal to Project Funds disbursed hereunder, accrued interest,
penalty assessments due, and Additional Payments. 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 all monies due have been received by the State
Water Board.
(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 any funds disbursed under this
Agreement may become immediately due and payable and that penalties up to the amount of
the federal capitalization grant 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.
5.25 Timeliness.
Time is of the essence in this Agreement.
5.26 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.
5.27 Useful Life.
The Recipient agrees that 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.
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
5.28 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.
5.29 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.
27
City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007-028C
lN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
CITY OF FRESNO,
A California municipal corporation
By:
Name:
Title:Director
Public Utilities
ATTEST:
YVONNE SPENCE, CMC
City Clerk
BOARD
Title: Deputy Director
Division of Financial Assistance
APPROVED AS TO FORM:
By: zz//5 By:
APPROVED AS TO FORM:
STATE WATER RESOURCES
By:
Name: Darrin Polhemus
DOUGLAS T. SLOAN
Deputy City Attorney
28
City of Fresno
Agreement No.: D1 5-02012
Project No.: I 01 0007 -028C
EXHIBIT A - SCOPE OF WORK & INCORPORATED DOCUMENTS
1 . The Recipient agrees to start construction no later than the estimated date of January 31,2016.
2. The Completion of Construction date is hereby established as January 1,2019.
3. The Recipient agrees to ensure that its final Request for Disbursement is received by the Division no
later than six months after'Completion of Construction, unless prior approval has been granted by the
Division. Otherwise, the undisbursed balance of this Agreement will be deobligated.
4. lncorporated by reference into this Agreement are the following documents:
(a) the Final Plans & Specifications, dated April 1 ,2015, which are the basis for the construction
contract to be awarded by the Recipient;
(b) the Drinking Water System Permit No. 03-89-030;
(c) the Recipient's Reimbursement Resolution No. 2015-1 17 dated June 25, 2015;
(d) [Reserved]
(e) [Reserved]
5. Scope of Work. The Recipient intends to rebalance declining groundwater levels by recharging its. basin and decreasing the amount of pumping. ln order to decrease reliance upon groundwater, the
Recipient will construct a new 80 million gallon per day surface water treatment facílity. The new
Southeast Surface Water Treatment Facility will consist of conventional pretreatment using plate
settlers, intermediate ozone treatment, and filtration. ln addition, the Recipient will construct two cast-
in-place treated water reservoirs, a pump station, lagoons for handling residuals, an operations
building, and a chemical building.
A-1
1.
2
5
6
3
4.
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007-028C
EXHIBIT B - PROJECT FINANCING AMOUNT
Estimated Reasonable Cost. The estimated reasonable cost of the total Project, including associated
planning and design costs, is one hundred ninety-five million four hundred eighty-nine thousand dollars
and no cents ($195,489,000).
Project Funding. Subject to the terms of this Agreement, the State Water Board agrees to provide
Project Funds in the amount of up to one hundred ninety-five million four hundred eighty-nine
thousand dollars and no cents ($195,489,000). Of this amount, contingent on section 4 of this Exhibit,
the estimated amount of principal that will be due to the State Water Board under this Agreement is
one hundred ninety-two million four hundred eighty-nine thousand dollars and no cents
($1e2,489,000).
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 1.663% 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 Drinking Water Small Community Emergency Grant Fund Charge in lieu of interest as
reflected in Exhibit C.
Contingent Principal Forgiveness. Contingent on the Recipient's performance of its obligations under
this Agreement, the State Water Board agrees to forgive up to three million dollar and no cents
($3,000,000) of the principal otherwise due under this Agreement.
IReserved]
The term of this agreement is from July 15,2015 to January 1,2049.
Budget costs are contained in the Project Cost Table below
Item Description Budget Cost
Construction $ 164.174.000.00
Desion Consultant $ 9.869.000.00
Proiect ManaqemenUEnqineerinq/Technical Suooort $ 8.530.000.00
Construction Manaqement $ 8,500,000.00
PG&E Desiqn & Fees s 230.000.00
Land Acouisition/Preoaration $ 4.r86.000.00
Total $195,489,000.00
Construction costs incurred prior to the Eligible Start Date on the cover page of this Agreement are not
eligible for reimbursement. Failure to begin construction according to the timelines set forth in Exhibit
A may require the Recipient to repay to the State Water Board all disbursed Project Funds, including
planning and design allowances.
7.
B-1
City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007 -028C
EXHIBIT C -PAYMENT SCHEDULE
See the attached preliminary Payment Schedule. The final Payment Schedule will be fon¡varded to the
Recipient after all disbursements have been paid and construction of the Project has been completed.
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
EXHIBIT D _ SPECIAL CONDITIONS
Recipient acknowledges and agrees to the following special conditions:
Environmental
The Recipient shall implement the mitigation measures identified in the Mitigation Monitoring and
Reporting Plan ("MMRP") that is in Appendix A of the final Environmental lmpact Report, titled
Fresno Metropolitan Water Resources Management Plan Update, dated May 2014, (SCH
#2013091021 ) prepared for the project.
The Recipient shall implement the mitigation measures identified in the "Kings River Pipeline and
Southeast Surface Water Treatment Facility Projects Biological Assessment" dated July 2015 and
prepared by CH2M Hill.
The Recipient shall implement the mitigation measures identified in the memorandum dated
October 27,2014, from LeChi Huynh with ESA to Jeff Smith with CH2M Hill titled "Wetland
Delineation and Biotic Assessment for the City of Fresno Kings River Pipeline Project, Fresno
County, CA." Note that some of these are identical those in the MMRP.
The Recipient shall implement the conservation/mitigation measures for the San Joaquin kit fox
identified in the July 29,2015, USFWS letter on lnformal Consultation for the City of Fresno 80
MGD Southeast Surface Water Treatment Facility and Kings River Pipeline; Safe Drinking Water
State Revolving Fund I 010007-028ci.
Credit
1. The Recipient shall establish a restricted reserve fund, held in the Water Enterprise Fund, equal
to one year's debt service. A reserve of two (2) semiannual payments shall be accumulated
during the first ten (10) years of the loan installment payments. The restricted reserve fund shall
be maintained for the full term of the Finance Agreement and shall be subject to lien and pledge
as security for the Obligation.
2. The Recipient shall establish rates and charges sufficient to generate Net Revenues equal to at
least 1.25 times the total annual debt service.
Technical
1. The Recipient shall notify the Division prior to start up testing of the Project facilities.
1.
2.
3
4.
D-1
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
EXHIBIT E - PROGRAMMATIC CONDITIONS & CROSS-CUTTERS
The Recipient agrees to comply with the following federal conditions:
A. FederalAwardConditions
1. American lron and Steel. Unless the Recipient has obtained a waiver from USEPA on file with
the State Water Board or unless this Project is not a project for the construction, alteration,
maintenance or repair of a public water system or treatment work, 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 or unless this
Project is not a project for the construction, alteration, maintenance or repair of a public water
system or treatment work, 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. "Steel" means an alloy that includes at least 50 percent iron, between .02 and 2
percent carbon, and may include other elements.
2. Wage Rate Requirements (Davis-Bacon). The Recipient shall include in full the language
provided in Exhibit G of this Agreement in all contracts and subcontracts.
3. Signage Requirements. The Recipient shall comply with the USEPA's Guidelines for Enhancing
Public Awareness of SRF Assistance Agreements, dated June 3, 2015, as othen¡¡ise specified in
this Agreement.
4. Public or Media Events. The Recipient shall notify the State Water Board and the EPA contact as
provided in the notice provisions of this Agreement of public or media events publicizing the
accomplishment of significant events related to this Project and provide the opportunity for
attendance and participation by federal representatives with at least ten (10) working days' notice.
5. EPA General Terms and Conditions (USEPA GTCs). The Recipient shall comply with applicable
EPA general terms and conditions found at htto://wwr.¡v.eoa.gov/ogd, including but not limited to
the following:
a. DUNS. No Recipient may receive funding under this Agreement unless it has provided
its DUNS number to the State Water Board.
b. Executive Compensation. The Recipient shall report the names and total compensation
of each of its five most highly compensated executives for the preceding completed fiscal
year, as set forth in the USEPA GTCs.
c. Suspension and Debarment. The Recipient shall comply with Subpart C of 2 CFR Part
180 and shallensure that its contracts include compliance. Contractors, Subcontractors,
Debarment and Suspension, Executive Order 12549;2 CFR Part 180; 2 CFR Part 1532.
The Recipient shall not subcontract with any party who is debarred or suspended or
othenvise 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.
The Recipient shall certify that it and its principals, and shall obtain certifications from its
contractors that they and their principals:
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d.
e.
City of Fresno
Agreement No.: D1 5-02012
Project No.: I 01 0007 -028C
EXHIBIT E _ PROGRAMMATIC CONDITIONS & CROSS-CUTTERS
1. Are not presently debarred, suspended, proposed for debarment,
declared ineligible, or voluntarily excluded by any federal
department or agency;
2. Have not within a three (3) year period preceding this Agreement
been convicted of or had a civiljudgment 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;
3. Are not presently indicted for or othenruise 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
4. 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.
5. 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 al2 CFR 180.335 may
result in the termination, delay or negation of this Agreement, or
pursuance of legal remedies, including suspension and
debarment.
Conflict of lnterest. Within 10 days, the Recipient shall disclose to the State Water Board
any potential conflict of interest consistent with section 4.0 of with USEPA's Revised
lnterim Financial Assistance Conflict of lnterest Policy at
tm . A conflict of interest may result in disallowance of costs.
Copyright. USEPA and the State Water Board have the right to reproduce, publish, use
and authorize others to reproduce, publish and use copyrighted works or other data
developed under this assistance agreement.
Credit. The Recipient agrees that any reports, documents, publications or other materials
developed for public distribution supported by this Agreement shall contain the following
statement:
i. "This project has been funded wholly or in part by the United States
Environmental Protection Agency and the State Water Resources Control Board.
The contents of this document do not necessarily reflect the views and policies of
the Environmental Protection Agency or the State Water Resources Control
Board, nor does the EPA or the Board endorse trade names or recommend the
use of commercial products mentioned in this document."
f.
E-2
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
EXHIBIT E - PROGRAMMATIC CONDITIONS & CROSS-CUTTERS
Electronic and lnformation Technology Accessibility. The Recipient is encouraged to
follow guidelines established under Section 508 of the Rehabilitation Act, codified at 36
CFR Part 1194, with respect to enabling individuals with disabilities to participate in its
programs supported by this Project.
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.
B. Super Cross-Cutters - Civil Rights Obligations. The Recipient must comply with the following
federal non-discrim ination requirements:
a. Title Vl of the Civil Rights Act of 1964, which prohibiis discrimination based on race,
color, and national origin, including limited English proficiency (LEP). (EPH XC HB)b. Section 504 of the Rehabilitation Act of 1973, which prohibits discrimination against
persons with disabilities. (EPH XC HB)c. The Age Discrimination Act of 1975, which prohibits age discrimination. (EPH XC HB)d. 40 CFR Parl7, as it relates to the foregoing (EPH XC HB)
Cross-Cutters
Executive Order No. 11246. The Recipient shall include in its contracts and subcontracts
related to the Project the following provisions:
"During the perþrmance of this contrac| the controctor agrees as þllows:
"(l) The contractor will not discriminate against any employee or applícant for employment because oJ
race, creed, color, or national origin. The conlractor will lake ffirmative action to ensure that
applicants are employed, and that employees are treated during ernployment, without regard to their
race, creed, color, or national origin. Such action shall include, but not be limited to thefollowing:
employment, upgrading, demotion, or transfer; recruitrnent or recruitment advertising; layoff or
termination; rates of pay or otherforms of compensation; and selectionþr training, including
apprenticeship. The contractor agrees to post in conspicuous places, available to employees and
applicants þr employment, notices to be provided by the contracting fficer settingþrth the provisions
of this nondiscrimination clause.
"(2) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of
the contractor, state that all qualified applicants will receive consideration for employment without
regard to race, creed, color, or national origin.
g.
h.
c.
1.
E-3
2.
3.
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
EXHIBIT E - PROGRAMMATIC CONDITIONS & CROSS-CUTTERS
"(3) The contractor will send to each labor union or representative of workers with which he has a
collective bargaining agreement or other contract or understanding, a notice, to be províded by the
agency contracting fficer, advising the labor union or workers' representative of the contractor's
commitments under Section 202 of Executive Order No. I I 246 of September 24, 1965, and shall post
copies of the notice in conspicuous places ayailable to employees and applicants for employment.
"(4) The contractor will comply with all provisions of Executive Order No. I1246 of Sept. 24, 1965, and
of the rules, regulations, and relevant orders of the Secretary of Labor.
"(5) The contractor will furnish all inþrmation and reporß required by Executive Order No. I 1246 of
September 24, 1965, and by the rules, regulations, and orders ofthe Secretary ofLabor, or pursuant
thereto, andwill permit access to his books, records, and accounts by the contracting agency and the
Secretary of Labor þr purposes of investigation to ascertain compliance with such rules, regulations,
and orders.
"(6) In the event of the contractorts noncompliance with the nondiscrimination clauses of this contract
or with any of such rules, regulations, or orders, this contract may be cancelled, terminated or
suspended in whole or in part and the contractor may be declared ineligible for further Government
contracts in accordance with procedures authorized in Executive Order No. I I 246 of Sept 24, I 965,
and such other sanctions may be imposed and remedies invoked as provided in Executive Order No.
I 1246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as
otherwise provided by law.
"(7) The contractor will include the provisions ofParagraphs (l) through (7) in every subcontract or
purchase order unless exempted by rules, regulations, or orders ofthe Secretary of Labor issued
pursuant to Section 204 ofExeculive Order No. I 1 246 of Sept. 24, 1965, so that such provisions will be
binding upon each subcontractor or vendor. The contractor will take such action with respect to any
subcontract or purchase order as the contracting agency may direct as a n'reans of enforcing such
provisions includingsanctionsfor noncompliance: Provided, however, That in the event the contractor
becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such
direction by the contracting agency, the contractor may request the United States to enter into such
litigation to pt"otect the interests of the United States."
Disadvantaged Business Enterprises (40 CFR Part 33). The Recipient agrees to comply with the
requ¡rements of USEPA's Program for Utilization of Small, Minority and Women's Business
Enterprises. The DBE rule can be accessed at www.eoa.oov/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. (lUP)
Procurement Prohibitions under Section 306 of the Clean Air Act and Section 508 of the Clean
Water Act, including Executive Order 1 1738, 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. Except where the purpose of this Agreement is to remedy the cause of the
violation, the Recipient may not procure goods, services, or materials from suppliers listed on the
Excluded Parties Listing System: http://epls.arnet.qov/ .
Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91-646, as amended; 42
USC 554601-4655. The Recipient must comply with the Act's implementing regulations at 49
CFR 24.101 through 24.105.
Preservation of Open Competition and Government Neutrality Towards Government Contractors'
Labor Relations on Federal and Federally Funded Construction Projects, EO 13202, as amended
4
5
E-4
City of Fresno
Agreement No.: D1 5-02012
Project No.: I 0l 0007 -028C
EXHIBIT E - PROGRAMMATIC CONDITIONS & CROSS-CUTTERS
by EO 13208. The Recipient must ensure that bid specifications, project agreements, and other
controlling documents for construction contracts do not require or prohibit agreements with labor
organizations. Any construction manager must not otherwise discriminate against bidders,
offerors, contractors, or subcontractors for entering into, or refusing to enter into, agreements with
labor organizations.
6. Debarment and Suspension Executive Order No. 12549 (1986). The Recipient certifies that it will
not knowingly enter into a contract with anyone who is ineligible under the 40 CFR Part 32 to
participate in the Project. Contractors on the Project must provide a similar certification prior to
the award of a contract and subcontractors on the project must provide the general contractor
with the certification prior to the award of any subcontract.
E-5
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
EXHIBIT F _ SCHEDULE OF SYSTEM OBLIGATIONS
Except for the following and the Obligation evidenced by this Agreement, the Recipient certifies that it has
no outstanding System 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:
Tte lnterest Rate End Date
Water System Revenue Refundinq Bonds, 2003 Series A 5.2500 17 I 2020
The following outstanding debt is on parity with the Obligation:
The following outstanding debt is subordinate to the Obligation:
Tte lnterest Rate End Date
None.
Tte lnterest Rate End Date
Water Svstem Revenue Bonds. 2010 Series A-1 3.9000 14 I 2024
Water Svstem Revenue Bonds, 2010 Series A-2 4.5000 30 I 2040
Department of Water Resources 874002 3.0815 20 I 2016
SRFOoCXl50 2.2923 20 I 2023
SRFOSSWXlOl 2.2923 20 I 2032
SRFI1CX104 0.0000 20 I 2031
F-1
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
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 Acl,2O14 (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 htto://mvw.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 shallamend 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(c)(3)(iv). The
Recipient shall monitor www.wdol.qov 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 5-02012
Project No.: 1 01 0007 -028C
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 ensure 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(b)(2) 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 (aXl Xiv) 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 5-02012
Project No.: 1 01 0007 -028C
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.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of laborers or
mechanics includes a fringe benefit which is not expressed as an 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.: D1 5-02012
Project No.: 1 01 0007 -028C
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 plan 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 theÈeof 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(a)(1)(iv) that the wages of any laborer or mechanic
include the amount of any costs reasonably anticipated in providing benefits under a
plan or program described in 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 5.5(a)(3)(i), except that full
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City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007 -028C
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 identifyìng
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 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 (aX3X¡¡Xe) 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 ol 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.: D1 5-02012
Project No.: 1 01 0007 -028C
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.: D1 5-02012
Project No.: 1 01 0007 -028C
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.
(ii¡) 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 1 1246, as amended and 29 CFR part 30.
(5) Compliance with Copeland Act requirements. The contractor shall comply with the
requirements of 29 CFR part 3, which are incorporated by reference in this contract.
(6) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses
contained in 29 CFR 5.5(a)(1) through (10) and such other clauses as the EPA determines
may by appropriate, and also a clause requiring the subcontractors to include these
clauses in any lower tier subcontracts. The prime contractor shall be responsible for the
compliance by any subcontractor or lower tier subcontractor with all the contract clauses in
29 CFR 5.5.
(7) Contract termination; debarment. A breach of the contract clauses in 29 CFR 5.5 may be
grounds for 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 5-02012
Project No.: 1 01 0007 -028C
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
setforth in paragraphs (a)(1), (2), (3), and (4)of this section in fullin anycontract 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.
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.
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 (a)(1) of this section.
Withholding for unpaid wages and liquidated damages. The Recipient, upon written request
of the EPA Award Official or an authorized representative of the Department of Labor, shall
withhold or cause to be withheld, from any moneys payable on account of work performed
by the contractor or subcontractor under any such contract or any other Federal contract
with the same prime contractor, or any other federally-assisted contract subject to the
Contract Work Hours and Safety Standards Act, which is held by the same prime
contractor, such sums as may be determined to be necessary to satisfy any liabilities of
such contractor or subcontractor for unpaid wages and liquidated damages as provided in
the clause set forth in paragraph (b)(2) of this section.
Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses
set forth in paragraph (aX1) through ( ) 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 (a)(1) 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
(1)
(2)
(3)
(4)
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City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007-028C
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 actual wages 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.
Com pliance Verification
(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 erica2.htm.
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
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 363-866 of title 23 of the California Code
of Regulations. The Recipient will include a discussion of its implementation in reports submitted
pursuant to Section 215 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 SS55ü).
3. COMPLIANCE WITH STATE REQUIREMENTS
Recipient represents that is in in compliance with and agrees that it will continue to maintain compliance
with the state requirements set forth below:
(a) Monthly Water Diversion Reporting
lf Recipient 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 seötions 1725.5 and
1771 .1. Pursuant to subdivision (e) of section 1725.5 and subdivision (g) of section 1771 .1 , the
registration requirements apply to any bid proposal submitted on or after March 1 ,2015, and any
contract entered into on or after April 1 ,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 areaby 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)[Reserved]
(f) Agricultural Water Management Plan Consistency
H-1
City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007 -028C
EXHIBIT H. COMPLIANCE WITH CROSS.CUTTING STATE AUTHORITIES
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 in Labor Code section 1782, subdivision (d)(2), Recipient
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, nor, within the prior two years (starting from January 1,201s or after) has
the city awarded a public works contract without requiríng the contractor to comply with
such wage rate requirements according to Labor Code section 1782.
(2) Labor Agreements
Recipient certifies that no charter provision, initiative, or ordinance limits or constrains the
city's authority or discretion to adopt, require, or utilize project labor agreements that
include all the taxpayer protection antidiscrimination provisions of Public Contract Code
section 2500 in construction projects, and that Recipient is accordingly eligible for state
funding or financial assistance pursuant to Public contract code section 2503.
H-2
Asreement -::tt"?LffiÎ;
Project No.: 1 01 0007-028C
EXHIBIT I- MATERIAL LITIGATION, INVESTIGATIONS, AUDITS
None.
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City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007 -028C
TABLE OF CONTENTS
ARTTCLE I DEF|N|T|ONS........... ..........1
1.2 Exhibits and Appendices lncorporated............ .......................4
ARTICLE II REPRESENTATIONS, WARRANTIES, AND COMMITMENTS............ ...........4
2.1 General Recipient Commitments................. .......................... s
2.2 Authorization and Validity. .............. s
2.6 Legal Status and Eligibility. ................. ............... s
2.7 Financial Statements.. .................... s
2.8 Completion of Project. ....................6
2.9 Award of Construction Contracts. ................ ..........................6
2.11 Findings and Cha11en9e.................. ................8
2.12 Project Access. ....,.,..................,.8
213 Project Completion; lnitiation of Operations. ................. .....,...................8
2.14 Continuous Use of Project; Lease or Disposal of Project..... ........,.........8
2j5 Project Reports. ..........................8
216 FederalDisadvantaged Business Enterprise (DBE) Reporting.... ..........9
ARTTCLE ilt FtNANCtNc PROV|S|ONS.................. .................,,11
3.1 Purchase and Sale of Project...,. ......................1j
City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007-028C
3.2 Amounts Payable by the Recipient. ................. 11
3.3 Obligation Absolute. .....................12
3.4 No Obligation of the State. .......... ..................... 13
3.5 Disbursement of Project Funds; Availability of Funds...... ........................13
3.6WithholdingofDisbursementsandMaterialViolations....
3.7 Pledge; Rates, Fees and Charges; Additional Debt. ........... ....................14
3.8 Financial Management System and Standards. .............. ........................15
3.9 Accounting and Auditing Standards. ................ 15
3.10 Other Assistance. .......... ........... 16
ARTTCLE tV TAX COVENANTS.......... ...................16
4.2 Tax Covenant.....,........... .............. 16
4.3 Governmental Unit. ......................16
4.4 Financing of a Capital Project. .........................16
4.5 Ownership and Operation of Project. ............... 16
4.6 Temporary Period.......... ............,..16
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. ................. ...........17
4.11 No Disproportionate or Unrelated Use. ............ ................18
4J2 Management and Service Contracts. ...........18
4.13 No Disposition of Financed Property. ...........18
4.14 Useful Life of Project......... ........18
4.15 lnstallment Payments. ..............18
4.16 No Other Replacement Proceeds... ..............19
4.17 No Sinking or Pledged Fund............ ............,19
4.18 Reserve Amount. ......................19
4.19
4.20
4.21
4.22
4.23
4.24
4.25
4.26
City of Fresno
Agreement No.: D1 5-02012
Project No.: I 01 0007-028C
Reimbursement Resolution. ................ .........19
Reimbursement Expenditures............ ..........19
Change in Use of the Project................... ....................,....20
Rebate Obligations. ..................20
No Federal Guarantee. .............20
No Notices or lnquiries From lRS. ................20
4mendments.................. ...........20
Reasonable Expectations .,.......20
ARTTCLE V MTSCELLANEOUS pROVtStONS................. .........21
5.1 Amendment ..............21
5.4 Competitive Bidding .....................21
5.5 Compliance with Law, Regulations, etc. ............. .................21
5.6 Conflict of lnterest. .......................22
5.7 Damages for Breach Affecting Tax-Exempt status or Federal compliance. ...............22
5.9 Governing Law............. ................22
5.10 lncome Restrictions. .................22
5.11 lndemnification and State Reviews ...............22
5.12 lndependent Actor. .......... .........23
5.13 Leveraging Covenants... ...........23
5.14 Non-Discrimination Clause. ......23
5.15 No Third Party Rights ................24
5.16 Operation and Maintenance; lnsurance. ............ ..............24
5.17 Permits, Subcontracting, and Remedies. .........................25
5.18 Prevailing Wages. .....................2S
5.19 Public Fundin9................ ..........25
5.20
5.21
5.22
5.23
5.24
5.25
5.26
5.27
5.28
5.29
City of Fresno
Agreement No.: D1 5-02012
Project No.: I 01 0007 -028C
Recípient's Responsibility for Work. .............25
Related Litigation. .....................25
Rights in Data. ......25
State Water Board Action; Costs and Attorney Fees........... ...............,26
Termination; lmmediate Acceleration; lnterest. ................26
Timeliness.. ...........26
Unenforceable Provision. .........26
Usefullife.............. ...................26
Venue. ..................27
Waiver and Rights of the State Water Board. ..................27
EXHIBIT A _ SCOPE OF WORK & INCORPORATED DOCUMENTS
EXHIBIT B - FUNDING AMOUNT
EXHIBIT C - PAYMENT SCHEDULE
EXHIBIT D - SPECIAL CONDITIONS
EXHIBIT E - PROGRAMMATIC CONDITIONS & CROSS-CUTTERS
EXHIBIT F - SCHEDULE OF SYSTEM OBLIGATIONS
EXHIBIT G - DAVIS.BACON REQUIREMENTS
EXHIBIT H - COMPLIANCE WITH CROSS-CUTTING STATE AUTHORITIES
EXHIBIT I- MATERIAL LITIGATION, INVESTIGATIONS, AUDITS
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007-028C
This lnstallment Sale Agreement, including all exhibits and attachments hereto, (Agreement) is dated as
of the date set forth on the cover 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 section 1452 of the federal Safe Drinking Water Act
(42 U.S.C. S 300j-12) as such has been and may be amended from time to time (FederalAct), requires
each State to establish a drinking water state revolving fund to be administered by an instrumentality of
the State as a condition to receipt of capitalization grants under the Safe Drinking Water Act; and
WHEREAS the State of California (State) has established a Drinking Water State Revolving Fund
(DWSRF or SRF) pursuant to Chapter 4.5 of Part 12 of Division 104 of the California Health and Safety
Code (State Act) to be used for purposes of the Safe Drinking Water Act; and
WHEREAS the State Water Board is the state agency authorized to administer the DWSRF and provide
financial assistance from the DWSRF to public water systems for the construction of eligible projects,
including planning, as provided in the State Act; and
WHEREAS the State Water Board determines eligibility for financial assistance from the SRF, determines
a reasonable schedule for financing such projects, ensures compliance with the Federal Act and the State
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 SRF, for
the purpose of financing or refinancing the Project described in this Agreement, 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 Projeot described in this Agreement, including exhibits
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 State Water Board
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 Federal 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 othen¡vise 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 5-02012
Project No.: 1 01 0007-028C
"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.
"District Office" means District Office of the Division of Drinking Water of the State Water Resources
Control Board.
"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 SRF.
"Division of Drinking Water" means the Division of Drinking Water of the State Water Board.
"DWSRF" means the Drinking Water State Revolving Fund.
"Eligible Start Date" means the date set forth in Exhibit B, establishing the date after which construction
costs may be incurred and eligible for reimbursement hereunder, subject to the 60-day look back period
established in the Reimbursement Resolution.
"Enterprise Fund" means the enterprise fund of the Recipient in which Revenues are deposited pursuant to
the Material Obligations lndenture.
"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.
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
"Listed Event" means, so long as the Recipient has outstanding any System 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 event that, as determined by the Division, might cause the State Water
Board to violate the terms and conditions of its agreements with U.S. EPA or its bond covenants,
including any of the following: (a) revenue shortfalls; (b) unscheduled draws on the Reserve fund, if any,
or the Enterprise Fund; (c) substitution of insurers, or their failure to perform; (d) adverse findings by the
Division of Drinking Water; (e) litigation related to the Revenues, the System, or the Project, whether
pending or anticipated; (f) any false warranty or representation made by the Recipient relevant to this
Agreement; (g) loss, theft, damage, or impairment to the Revenues or the System; (h) seizure of, or levy
on any collateral securing this Agreement; (i) dissolution or cessation of operations by Recipient,
termination of Recipient's existence, insolvency of Recipient, or filing of a voluntary or involuntary
bankruptcy petition by or on behalf of Recipient.
"Material Obligation" means any senior or parity obligation 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, the Material Obligation
lndenture, and this Agreement.
"Material Obligation lndentures" means each indenture related to Material Obligations, including but not
limited to the lndenture, dated as of January 1,2010, by and between the City of Fresno and The Bank of
New York Mellon trust Company, N.4., as trustee, as such may be amended and supplemented from time
to time.
"Net Revenues" means, for any Fiscal Year, so long as there may be any outstanding Material
Obligations 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.
"Obligation" means the obligation of the Recipient to make lnstallment Payments/Loan Repayments 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 in the documents thereby incorporated by reference.
"Operations and Maintenance Costs" means so long as 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 lmplementing the Drinking Water State Revolving
Fund," 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.
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
"Project Costs" means the incurred costs of the Recipient which are eligible for financial assistance under
this Agreement, 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.
"Reimbursement Resolution" means the Recipient's reimbursement resolution identified in Exhibit A of
this Agreement.
"Revenues" means, so long as Material Obligations other than the Obligation are outstanding, the
definition of such term as defined in the Material Obligation lndenture, 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(bxs)'means Rule 15c2-12(b)(5)promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
"SRF" means the Drinking Water State Revolving Fund.
"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 Obligation are outstanding, the definition
of such term as defined in the Material Obligation lndenture, and thereafter, all drinking water collection,
transport, treatment, storage, and delivery 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.
"System Obligation" means any long-term obligation of the Recipient payable from the Enterprise Fund,
including this Obligation and obligations reflected in Exhibit F hereto.
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
City of Fresno
Agreement No.: D1 5-02012
Project No.: I 01 0007 -028C
The Recipient represents, warrants, and commits to the following as of the date set forth on the first 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.
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 No 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 Recipient, the System, the Revenues, and/or the
Project other than as described in Exhibit I 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 its eligibility for funding under this Agreement for the term of this Agreement.
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.
City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007 -028C
2.8 Completion of Project.
The Recipient agrees to expeditiously proceed with and complete construction of the Project in
substantial accordance with Exhibit A.
2.9 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 may deny requests received after this time.
2.10 Notice.
(1) The Recipient agrees to notify the Division in writing within five (5) working days of the occurrence of
the following:
(a) Principal and interest payment delinquencies;
(b) Non payment related defaults, if material;
(c) Unscheduled draws on'debt service reserves held for this Obligation, if any, reflecting
financial difficulties;
(d) Bankruptcy, insolvency, receivership or similar event of the Recipient;
(e) Actions taken pursuant to state law in anticipation of filing Chapter 9;
(f) Other Material Events or Listed Events;
(g) Change of ownership of the Project or change of management or service contracts, if any,
for operation of the Project; or
(2) The Recipient agrees to notify the Division within '10 working days of the following:
(a) Material defaults on System Obligations, other than this Obligation;
(b) Unscheduled draws on debt service reserves held for System Obligations, other than this
Obligation, if any, reflecting financial difficulties;
(c) Unscheduled draws on credit enhancements on System Obligations, if any, reflecting financial
difficulties;
(d) Substitution of credit or liquidity providers, if any, or their failure to perform;
City of Fresno
Agreement No.: D1 5-0201 2
Project No.: I 01 0007 -028C
(e) Any litigation pending or threatened against Recipient regarding its water 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;
(f) Adverse tax opinions, the issuance by the lnternal Revenue Service or proposed orfinal
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 System Obligations, if any;
(h) lssuance of additional parity obligations; o
(¡) Negotiations regarding proposed parity obligations.
(3) 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 approval for
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;
(Ð Any monitoring, demonstration, or other implementation activities such that the State Water
Board and/or Division of Drinking Water 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 Juanita Licata at licatajuanita(Oeoa.qov
(415) 972-3450; or
(h) Completion of Construction of the Project, and actual Project Completion.
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
2.11 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 the rate covenant set forth in Section 3.7
of this Agreement. The Recipient agrees 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 the rate covenant set forth in Section 3.7 hereof and its obligation to operate
and maintain the Project for its useful life. 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.
212 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 but not limited to all of the
submissions accompanying the application, all of the documents incorporated by Exhibit A, and all
reports, disbursem ent requests, and supporting documentation subm itted hereunder.
2.13 Project Completion; lnitiation of Operations.
Upon Completion of Construction of the Project, the Recipient agrees to expeditiously initiate Project
operations.
2.14 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.
2.15 Project Reports.
(a) Quarterly Reports. The Recipient agrees to expeditiously provide status reports no less
frequently than quarterly, starting with the execution of this Agreement. These reports shall
accompany disbursement requests. 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 5-02012
Project No.: 1 01 0007 -028C
(b) Project Completion Report. The Recipient shall submit a Project Completion Report to the Division
with a copy to the appropriate District Office of the Division of Drinking Water on or before the due
date established by the Dìvision 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.
(c) 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 SRF Program or
to fulfill any reporting requirements of the federal government.
2J6 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.
2.17 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 otficial file for the Project which shall adequately document all significant
actions relative to the Project;
(2) Establish separate accounts which will adequately and accurately depict all amounts
received and expended on the Project, including all assistance funds received under this
Agreement;
(3) Establish separate accounts which will adequately depict all income received which is
attributable to the Project, specifically including any income attributable to assistance funds
disbursed under this Agreement;
(4) Establish an accounting system which will accurately depict final total costs of the Project,
including both direct and indirect costs;
(5) Establish such accounts and maintain such records as may be necessary for the State to
fulfill federal reporting requirements, including any and all eporting requirements under
federal tax 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.
City of Fresno
Agreement No.: D1 5-02012
Project No.: I 01 0007 -028C
(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 require that such
books, records, and other material be subject at all reasonable times (at a minimum during
normal business hours) to inspection, copying, and audit by the State Water Board, the Bureau
of State Audits, the United States Environmental Protection Agency (USEPA), the Office of
lnspector General, the lnternal Revenue Service, the Governor, or 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.
2.18 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 where
such an audit becomes necessary because of federal requirements. Where such an audit is
called for, the audit shall be performed by a certified public accountant independent of the
Recipient and at the cost of the Recipient. The audit shall be in the form required by the
Division.
(b) Audit disallowances will be returned to the State Water Board.
2.19 Signage.
The Recipient shall place a sign at least four feet tall by eight feet wide made of % inch thick exterior
grade plywood or other approved material in a prominent location on the Project site and shall maintain
the sign in good condition for the duration of the construction period. The sign shall include the following
disclosure statement and color logos (available from the Division):
ffiffi*ffi,*,.*""
"Funding for this $195,489,000 Southeast Surface Water Treatment Facility project has
been provided in full or in part by the Drinking Water State Revolving Fund through an
agreement with the State Water Resources Control Board. California's Drinking 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. California's Clean Drinking 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
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
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."
ARTICLE III FINANCING PROVISIONS
3.1 Purchase and Sale of Project.
The Recipient hereby sells to the State Water Board and the State Water Board hereby purchases from
the Recipient the Project. Simultaneously therewith, the Recipient hereby purchases from the State
Water Board, and the State Water Board hereby sells to the Recipient, the Project in accordance with the
provisions of this Agreement. All right, title, and interest in the Project shall immediately vest in the
Recipient on the date of execution and delivery of this Agreement without further action on the part of the
Recipient or the State Water Board. The State Water Board's disbursement of funds hereunder is
contingent on the Recipient's compliance with the terms and conditions of this Agreement.
3.2 Amounts Payable by the Recipient.
(a) lnstallment Payments. lnterest will accrue beginning with each disbursement. The Recipient
shall repay interest semi-annually, by January 1 and July 1 of each year, until one year after
Completion of Construction. Beginning no later than one year after Completion of Construction,
repayment of the principal of the Project Funds, together with all interest accruing thereon, shall
be repaid semi-annually commencing on January 1 and July 1, 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 semi-annual payments. The remaining balance is the previous balance, plus the
disbursements, plus the accrued interest on both, less the lnstallment Payment. lnstallment
Payment 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 lnstallment Payment on or before the due date therefor. A
ten (10) day grace period will be allowed, after which time a penalty in the amount of costs
incurred to the State Water Board will be assessed for late payment. These costs may include,
but are not limited to, lost interest earnings, staff 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, 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
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City of Fresno
Agreement No.: D1 5-0201 2
Project No.: I 0 1 0007 -028C
received from constituents or others in the payment to the Recipient. ln the event of failure,
neglect or refusal of any offìcer 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 tothe imposition orlevying and collection of anyof such Charges and the paymentof 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.
Each lnstallment Payment shall be paid by check and in lawful money of the United States of
America.
The Recipient agrees that it shall not be entitled to interest earned on undisbursed 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 Payment 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
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¡uise and shall not be
12
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
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 SRF 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
disbursement of any eligible incurred planning and design allowance as specified in Exhibit
B from the Project Funds through submission to the State Water Board of the Disbursement
Request Form 260, or any amendment thereto, duly completed and executed. The
Recipient must submit a disbursement request for costs incurred prior to the date the
Agreement is executed by the State Water Board no later than ninety (90) days after this
Agreement is executed by the State Water Board. Late disbursement requests may not be
honored.
(2) The Recipient shall request disbursement of eligible construction and equipment costs
consistent with budget amounts referenced in Exhibit B.
(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 2.15 above.
(a) 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.
(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
13
36
City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
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; or
(2) The Recipient fails to maintain reasonable progress toward completion of the Project.
(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 or referendum to reduce Revenues;
(2) Passage of such an initiative or referendum;
(3) Successful challenges by ratepayer(s) to the process used by Recipient to set, dedicate, or
othen¡vise secure Revenues; or
(a) Any other action or lack of action that may be construed by the Division 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 Material
Obligations, 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 lndenture. 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 lndenture. As required in Exhibit D of this
Agreement, the Recipient agrees to establish and maintain a Reserve Fund.
(b) 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 (senior, parity, or subordinate).
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.
(c) 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
3.7
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City of Fresno
Agreement No.: D1 5-02012
Project No.: I 010007 -028C
of the Recipient, including payment of subordinate debt pursuant to the terms and provisions of
the Material Obligations lndentures.
(d) Rates, Fees and Charges. The Recipient agrees, to the extent permitted by law, to fix, prescribe
and collect rates, fees and charges for the System during each Fiscal Year which are
reasonable, fair, and nondiscriminatory and which will be at least sufficient to yield during each
Fiscal Year Net Revenues equalto the debt service on System 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.
(e) Additional Debt Test.
(1) Additional Senior Debt. 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 SRF obligations.
(2) Additional Parity Debt. 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 arìd Net Revenues pledged to pay all debts are at least 1.1 times
the highest year's debt service; and
(i¡) Satisfaction of the reserve requirements contained in Exhibit D.
3.8 Financial Management System and Standards.
The Recipient agrees to comply with federal standards for financial management systems. The Recipient
agrees that, at a minimum, its fiscal control and 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 210(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. General Accounting Office. (40 CFR S
35.3135, subd. (l).)
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City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007 -028C
3.10 Other Assistance.
lf federal or state funding for Project Costs is made available to the Recipient from sources other than this
Agreement, 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 funded under this
Agreement, shall be remitted to the State Water Board to be applied to lnstallment Payments due
hereunder, if any.
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 of 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.
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 or acquisition 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.
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
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 (20%) 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 oi 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
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 othen¡¡ise 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 othenruise 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.
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City of Fresno
Agreement No.: D1 5-0201 2
Project No.: 1 01 0007 -028C
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, as modified by IRS Notice 2014-
67.
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 that meet the following requirements: (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) the term of the contract, including all renewal options, does not exceed
five (5) years; and (iv) all 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 stated
amount, a periodic capitation fee, a capitation fee, a per unit fee, or combination of the preceding. The
compensation for services may be all, or may include, a percentage of gross revenues, adjusted gross
revenues, or expenses of the facility (but not both revenues and expenses). A capitation fee is a fixed
periodic amount for each person for whom.the service provider 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 providerfor
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.
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.
4.1 5 lnstallment Payments.
lnstallment Payments generally are expected to be derived from assessments, taxes, fees, charges or
other current revenues of the Recipient in each year, 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
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
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 otherwise 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
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. I 9 Reimbursement Resolution.
The "reimbursement resolution" adopted by the Recipient is incorporated herein by reference, pursuant to
Exhibit A.
4.20 Reimbursement Expenditures.
Subject to other limitations in this Agreement, 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.
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City of Fresno
Agreement No.: D1 5-02012
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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 Obl igations.
lf the Recipient satisfies the requirements of one of the spending exceptions to rebate specified in Section
1148-7 of the Treasury Regulations, amounts 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.
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 initial temporary
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 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.
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 0 1 0007 -028C
ARTICLEV MISCELLANEOUSPROVISIONS
5.1 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.
5.2 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 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.
5.4 Competitive Bidding
Any construction contracts related in any way to the Planning shall be let by competitive bid procedures
which assure award of such contracts to the lowest responsible bidders. Recipient shall adhere to any
applicable state or local ordinance for competitive bidding and applicable labor laws.
Recipient shall not award a construction contract until a summary of bids and identification of the selected
lowest responsible bidder is submitted to and approved in writing by the Division. Recipient must provide
a full explanation if Recipient is proposing to award a construction contract to anyone other than the
lowest responsible bidder.
5.5 Compliance with Law, Regulations, etc.
(a) The Recipient agrees that it will, at all times, comply with and require its contractors and
subcontractors to comply with all applicable federal and state laws, rules, guidelines, 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, if any, for the term
of this Agreement;
(2) Comply with the State Water Board's Policy;
(3) Comply with and require compliance with the list of state laws attached as Exhibit H.
(4) Comply with and require its contractors and subcontractors on the Project to comply with
federal DBE requirements; and
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007 -028C
(5) Comply with and require its contractors and subcontractors to comply with the list of federal
laws attached as Exhibit E.
5.6 Conflict of lnterest.
The Recipient certifies that its owners, officers, directors, agents, representatives, and employees are in
compliance with applicable state and federal conflict of interest laws.
5.7 Damages for Breach Affecting Tax-Exempt Status or Federal Compliance
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 or 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 subdivision or agency thereof due to such breach.
5.8 Disputes.
(a) The Recipient may appeal a staff decision within 30 days to the Deputy Director of the
Division or designee, for a final Division decision. The Recipient may appeal a final
Division decision to the State Water Board within 30 days. The Office of the Chief
Counsel of the State Water Board will prepare a summary of the dispute and make
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.
(c) Recipient shall continue with the responsibilities under this Agreement during any dispute.
5.9 Governing Law.
This Agreement is governed by and shall be interpreted in accordance with the laws of the State of
California.
5.10 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.
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City of Fresno
Agreement No.: D1 5-02012
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5.11 lndemnification and State Reviews.
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, orthe planning, design, acquisition, installation, orconstruction, of the System orthe Projector
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 term
of this Agreement and the discharge of the Recipient's Obligation hereunder.
5.12 lndependentActor.
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.
5.13 Leveraging Covenants.
(a) Tax Covenant. Notwithstanding any other provision hereof, the Recipient covenants and agrees
that it will comply with the Tax Covenants set forth in Article lV of this Agreement.
(b) 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 undenruriter 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 recognized municipal
securities information repository, the Municipal Securities Rulemaking Board's Electronic
Municipal Market Access (EMMA) website or other person or entity.
5.14 Non-Discrimination Clause.
(a) During the performance of this Agreement, Recipient and its contractors and subcontractors
shall not unlawfully discriminate, harass, or allow harassment against any employee or
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City of Fresno
Agreement No.: D1 5-02012
Project No.: 1 01 0007-028C
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, denial of family care leave, or
genetic information, gender, gender identity, gender expression, or military and veteran
status.
(b) The Recipient, its contractors, and subcontractors shall ensure 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, S12990, subds. (a)-(f) et seq.; Cal. Code Regs., tit. 2, S 7285 el 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 whìch 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.
5.15 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.
5.16 Operation and Maintenance; lnsurance.
The Recipient agrees to sufficiently and properly staff, operate and maintain all portions of the System
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
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 Loan Repayments, if any, the Recipient
shall provide additional funds to restore or replace the damaged portions of the System.
Recipient agrees that for any policy of general liability insurance concerning the construction of the
Project, it will cause, and will require its contractors and subcontractors to cause, a certificate of insurance
to be issued showing the State Water Board, its officers, agents, employees, and servants as additional
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City of Fresno
Agreement No.: D1 5-02012
Project No.: I 0 1 0007 -028C
insured; and shall provide the Division with a copy of all such certificates prior to the commencement of
construction of the Project.
5.17 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.
5.18 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
ensure that the prevailing wage provisions of the State Labor Code are being met. ln addition, the
Recipient agrees to comply with the provisions of Exhibit G (Davis-Bacon).
5.19 Public Funding.
This Project is publicly funded. Any service provider or contractor with which the Recipient contracts 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.
5.20 Recipient's Responsibility for Work.
The Recipient shall be responsible for all work 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)
25