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HomeMy WebLinkAboutAgenda Packet 2022-10-27 (48 MB) REVISED* CITY OF PALM DESERT PALM DESERT CITY COUNCIL (CC), SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY (SA), AND HOUSING AUTHORITY (HA) MEETING (HYBRID MEETING) 73-510 FRED WARING DRIVE PALM DESERT, CA 92260 REGULAR MEETING AGENDA Thursday, October 27, 2022 2:30 p.m. Closed Session 4:00 p.m. Regular Session Pursuant to Assembly Bill 361, this meeting may be conducted by teleconference. There will be in- person access to the meeting location. WATCH THE MEETING LIVE: Watch the City Council meeting live at the City’s website www.cityofpalmdesert.org, under the “Council Agenda” link at the top of the homepage, or on the City’s YouTube Channel. OPTIONS FOR PARTICIPATING IN THIS MEETING: Attend the meeting in our Council Chamber at the Palm Desert Civic Center, 73-510 Fred Waring Drive, Palm Desert, CA 92260. To participate by email, internet, or phone, please see the detailed instructions on the last page of this agenda. * Revised to add Closed Session Item B4, Desert Willow Lot Pad B AGENDA - REVISED Thursday, October 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Page 2 of 8 CLOSED SESSION: 2:30 P.M. CALL TO ORDER PUBLIC COMMENT FOR CLOSED SESSION ITEMS ONLY: This time has been set aside for members of the public to address the City Council on items contained only on the Closed Session Agenda within the three-minute time limit. Speakers may attend in person or utilize one of the three options listed on the last page of this agenda. RECESS TO CLOSED SESSION CLOSED SESSION AGENDA A. Closed Session Meeting Minutes: October 13, 2022 B. Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: 1. Property Description: 1.55 acres at southeast corner of Fred Waring Drive and San Pablo Avenue (APNs 627-101-002, 627-101-017, 627-101-033, 627-101-061, 627-101-062) Agency: City of Palm Desert City Negotiator: Todd Hileman/Eric Ceja Negotiating Parties: Chandi Enterprises, LLC Under Negotiation: Price and Terms 2. Property Description: 74-885 Country Club Drive, Palm Desert Agency: City of Palm Desert City Negotiator: Todd Hileman/Eric Ceja Negotiating Parties: JW Marriott Desert Springs Resort and Spa Under Negotiation: Development Agreement 3. Property Description: 73-710 Fred Waring Drive, Suites 100, 103, 108, 118, 120, 200, 201, 203, 208, 211 and 217, and 73-720 Fred Waring Drive, Suite 100 Agency: City of Palm Desert City Negotiator: Todd Hileman/Chris Escobedo/Eric Ceja Negotiating Parties: Lift to Rise/Paul Golden Construction/Advantech/Act for MS/ Coachella Valley Association of Governments/Virginia Waring International Piano Competition/State of California Department of Food and Agriculture/State of California Water Resources Board Under Negotiation: Price and Terms 4. Property Description: Desert Willow Lot Pad B, Desert Willow Drive, south of Desert Willow Clubhouse (APN 620-400-008, 023) Agency: City of Palm Desert City Negotiator: Todd Hileman/Martin Alvarez/Eric Ceja Negotiating Parties: Desert Wave Ventures, LLC Under Negotiation: Price and Terms AGENDA - REVISED Thursday, October 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Page 3 of 8 C. Conference with Legal Counsel regarding Significant Exposure to Litigation pursuant to Government Code Section 54956.9(d)(2): Two (2) matters that, under the existing circumstances, the City Attorney believes create significant exposure to litigation. 4:00 P.M. REGULAR MEETING ROLL CALL PLEDGE OF ALLEGIANCE: Mayor Harnik INSPIRATION/INVOCATION: Councilmember Kelly REPORT OF CLOSED SESSION: City Attorney Hargreaves AWARDS, PRESENTATIONS, AND APPOINTMENTS: A. PROCLAMATION - PALM DESERT CHARTER MIDDLE SCHOOL WINTER GUARD B. PRESENTATION BY THE MCCALLUM THEATRE CITY MANAGER COMMENTS A. MAINTENANCE ACTIVITIES UPDATE – PUBLIC WORKS DEPARTMENT MAYOR/COUNCILMEMBER REPORTS AND REQUESTS FOR ACTION NON--AGENDA PUBLIC COMMENTS: This time has been set aside for the public to address the City Council on issues that are not on the agenda for up to three minutes. Speakers may attend in person or utilize one of the three options listed on the last page of the agenda. Because the Brown Act does not allow the City Council to act on items not listed on the agenda, members may briefly respond or refer the matter to staff for a report and recommendation at a future meeting. 1. CONSENT CALENDAR: All matters listed on the Consent Calendar are considered routine and may be approved by one motion. The public may comment on any items on the Consent Agenda within the three-minute time limit. Individual items may be removed by the City Council for a separate discussion. A. APPROVAL OF CITY COUNCIL, SUCCESSOR AGENCY, AND HOUSING AUTHORITY MINUTES RECOMMENDATION: Approve the Minutes of October 13, 2022. B. APPROVAL OF WARRANTS RECOMMENDATION: Approve warrants issued for the period of August 31, 2022, through October 14, 2022. AGENDA - REVISED Thursday, October 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Page 4 of 8 C. APPLICATIONS FOR AN ALCOHOLIC BEVERAGE LICENSE FOR HOLY CANNOLI, INC., DBA THE HIDEOUT, 73595 EL PASEO, SUITE B2208, PALM DESERT RECOMMENDATION: Receive and file the Alcoholic Beverage License application. D. 2022 CONFLICT OF INTEREST CODE BIENNIAL NOTICE PURSUANT TO THE POLITICAL REFORM ACT RECOMMENDATION: 1. Receive and file the 2022 Local Agency Biennial Notice. 2. Direct staff to promulgate the necessary amendments and return to the City Council in December 2022 for adoption pursuant to the Political Reform Act. E. ADOPT RESOLUTION SETTING THE CITY COUNCIL REGULAR MEETING SCHEDULE FOR THE CALENDAR YEAR 2023 AND RESCINDING RESOLUTION NO. 2022-72 RECOMMENDATION: Waive further reading and adopt a Resolution establishing dates for regular meetings of the Palm Desert City Council for the calendar year 2023 and rescinding Resolution No. 2022-72. F. APPROVE AMENDMENT NO. 1 TO CONTRACT NO. HA-39040 WITH SERVICE FIRST, LLC, FOR POOL AND WATER FEATURE MAINTENANCE AND REPAIR SERVICES AT THE PALM DESERT HOUSING AUTHORITY PROPERTIES IN A TOTAL AMOUNT NOT TO EXCEED $347,147 RECOMMENDATION: 1. Approve Amendment No. 1 to Contract No. HA-39040 with Service First, LLC, for pool and water feature maintenance and repair services at the Palm Desert Housing Authority properties effective January 1, 2023, for a two-year term in a total amount not to exceed $347,147. 2. Authorize RPM Company, the Authority’s contracted management company, to enter into Amendment No. 1 with Service First, LLC, for the routine and additional services needed, including expenditures. 3. Authorize the Executive Director or its designee to take any necessary actions to facilitate the amendment and any documents necessary to effectuate and implement the actions taken herewith. G. REQUEST FOR ACCEPTANCE OF THE CITY’S CITIZENS OPTION FOR PUBLIC SAFETY/SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (COPS/SLESF) EXPENDITURE PLAN AND FUNDING FOR FISCAL YEAR 2022-2023 RECOMMENDATION: Accept the City’s Citizens Option for Public Safety/Supplemental Law Enforcement Services Fund (COPS/SLESF) expenditure plan and funding for Fiscal Year 2022- 2023. AGENDA - REVISED Thursday, October 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Page 5 of 8 H. APPROVE AMENDMENT NO. 1 TO CONTRACT NO. C43390 WITH IDEA PEDDLER FOR MARKET RESEARCH AS EXTRA WORK RECOMMENDATION: 1. Approve Amendment No. 1 to Contract No. C43390 with Idea Peddler in an amount not to exceed $30,000 for one-time market research to support the evolution of the City’s tourism advertising campaign. 2. Authorize the City Manager to execute the Amendment and any documents necessary to effectuate and implement the actions taken herewith. I. APPROVE AN AGREEMENT WITH CASC ENGINEERING AND CONSULTING, INC., FOR MS4 PERMIT INSPECTIONS AND NPDES SUPPORT SERVICES IN THE AMOUNT OF $50,000 PER FISCAL YEAR RECOMMENDATION: 1. Approve a three (3) year agreement with CASC Engineering and Consulting, Inc., for MS4 Permit Inspections and NPDES Support Services in the amount of $50,000 per fiscal year. 2. Authorize the City Manager or his designee to review and execute change orders for unanticipated conditions, per Section 3.30.170 Section A of Ordinance No. 1335. 3. Authorize the City Manager to execute said agreement and up to two one-year contract amendments/extensions. CONSENT ITEMS HELD OVER: Items removed from the Consent Calendar for separate discussion are considered at this time. 2. ACTION CALENDAR: The public may comment on individual Action Items within the three- minute time limit. Speakers may utilize one of the three options listed on the last page of the agenda. A. AWARD A CONTRACT FOR THE DESIGN-BUILD OF THE TAOS PALMS TRELLIS AND ENTRANCE STRUCTURE REHABILITATION TO DOUG WALL CONSTRUCTION, INC., OF BERMUDA DUNES, CALIFORNIA, IN THE AMOUNT OF $1,067,588.35 (PROJECT NO. 813-21) RECOMMENDATION: 1. Award a Contract for the design-build of the Taos Palms Trellis and Entrance Structure Rehabilitation to Doug Wall Construction, Inc., of Bermuda Dunes, California, in the amount of $1,067,588.35 (includes $22,500 add alternate). 2. Authorize the Finance Director to set aside approximately 20% contingency of $213,520 for unforeseen conditions. 3. Authorize the Executive Director or designee to review and approve written requests for the use of the contingency, to take any necessary actions to facilitate the agreement, to execute the agreement and any documents necessary to effectuate the actions taken herewith. 4. Authorize the Executive Director or designee to execute the Notice of Completion (NOC) and the Secretary to file the NOC, upon satisfactory completion of the Project. 5. Funds are available in the Fiscal Year 2022-23 Housing Authority Capital Replacement Budget. AGENDA - REVISED Thursday, October 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Page 6 of 8 B. AWARD OF CONTRACT TO WELLS FARGO BANK, N.A., FOR COMPREHENSIVE BANKING SERVICES RECOMMENDATION: 1. Award a contract to Wells Fargo Bank, N.A., to provide comprehensive banking services for a term of five years with an option to renew two (2) additional three-year periods based on satisfactory performance. 2. Authorize the City Manager or designee to negotiate and/or take any necessary actions to facilitate the agreement, to execute the agreement and any documents necessary to effectuate the actions taken herewith. C. RECEIVE AND FILE AN INFORMATIONAL REPORT ON THE CURRENT STATE OF THE CANNABIS INDUSTRY IN PALM DESERT RECOMMENDATION: Receive and file the 2022 State of the Cannabis Industry Report. D. RECEIVE AND FILE AN INFORMATIONAL REPORT REGARDING POTENTIAL REGULATION OF CANNABIS CONSUMPTION AREAS, TEMPORARY SPECIAL EVENTS, AND OTHER RELATED AMENDMENTS RECOMMENDATION: 1. Receive and file informational report regarding potential regulation of cannabis consumption areas, temporary special events, and other related amendments. 2. Provide staff with direction on future actions related to these items. E. ADOPT RESOLUTION DECLARING SIX PARCELS AT THE NORTHEAST CORNER OF FRED WARING DRIVE AND SAN PABLO AVENUE IN PALM DESERT ARE NOT SURPLUS LAND FOR PURPOSES OF THE SURPLUS LAND ACT RECOMMENDATION: Adopt Resolution declaring Assessor’s Parcel Numbers (APN) 627- 101-002 (.35 acres), 627-101-017 (.20 acres), 627-101-033 (.25 acres), 627-101-061 (.46 acres), 617-101-062 (.17 acres), and Right of Way (.11 acres), Palm Desert, are not Surplus Land for purposes of the Surplus Land Act. F. INTRODUCE AN ORDINANCE AMENDING PALM DESERT MUNICIPAL CODE SECTION 2.36.060 REGARDING THE PLACEMENT OF ITEMS ON MEETING AGENDAS AND A PROCESS FOR MEMBERS OF THE CITY COUNCIL TO SPONSOR AGENDA ITEMS RECOMMENDATION: Waive further reading and pass to second reading an Ordinance amending Palm Desert Municipal Code Section 2.36.060 regarding the placement of items on meeting agendas and a process for members of the City Council to sponsor agenda items. AGENDA - REVISED Thursday, October 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Page 7 of 8 G. AWARD A CONTRACT TO DECKARD TECHNOLOGIES, INC., OF SAN DIEGO, CALIFORNIA, FOR SHORT-TERM RENTAL MONITORING, COMPLIANCE, ENFORCEMENT, AND TAX COLLECTION SERVICES IN THE AMOUNT OF $69,400 RECOMMENDATION: 1. Approve the award of competitive Request for Proposals No. 2022-RFP-133 and draft contract to Deckard Technologies, Inc., of San Diego, California, for Short-term Rental Compliance Services in the amount of $69,400 for the initial one-year period of November 1, 2022, through October 31, 2023. With extensions, this contract spans five (5) fiscal years and would be funded from the Development Services Approved Budget in each fiscal year. 2. Approve the option to renew the resulting contract for four (4) additional one-year periods, subject to departmental and City Manager concurrence and available funding. 3. Authorize the City Manager to execute said contract. 3. PUBLIC HEARINGS: The public may comment on individual Public Hearing Items within the three-minute time limit. The applicant or appellant will be provided up to five minutes to make their presentation. Speakers may utilize one of the three options listed on the last page of this agenda. A. REQUEST FOR APPROVAL OF THE PROPOSED SALE OF THE PROPERTY LOCATED AT 42162 VERDIN LANE, PALM DESERT (APN 624-440-004) PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433(C) RECOMMENDATION: 1. Conduct a public hearing and accept testimony on the proposed sale of the property located at 42162 Verdin Lane, Palm Desert to a qualified household of very low, low or moderate income. 2. Following public testimony, waive further reading and adopt a Resolution approving the sale of 42162 Verdin Lane, Palm Desert (APN 624-440-004) to a qualified household of low or moderate income pursuant to the attached Purchase and Sale Agreement. 3. Authorize the Executive Director to finalize and execute the Purchase and Sales Agreement and any ancillary documents related to the sale to a qualified household of low or moderate income. 4. INFORMATION ITEMS None. ADJOURNMENT AGENDA - REVISED Thursday, October 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Page 8 of 8 THREE OPTIONS FOR PARTICIPATING IN THE MEETING OPTION 1: PARTICIPATE BY E-MAIL Send your comments by email to: CouncilMeetingComments@cityofpalmdesert.org. E-mails received prior to noon on the day of the City Council meeting will be made part of the record and distributed to the City Council. This method is encouraged because it will give Councilmembers the opportunity to reflect upon your input. Emails will not be read aloud at the meeting. OPTION 2: PARTICIPATE LIVE VIA ZOOM 1. Access via www.cityofpalmdesert.org/zoom and click “Launch Meeting,” or 2. Access www.zoom.us, click “Join Meeting” and enter Webinar ID 833 6744 9572. OPTION 3: PARTICIPATE LIVE VIA TELEPHONE 1. Dial any of the following: (669) 900-9128 or (213) 338-8477 or (669) 219-2599. 2. Enter the Meeting ID: 833 6744 9572 followed by #. 3. Indicate that you are a participant by pressing # to continue. 4. You will hear audio of the meeting in progress. Remain on the line if the meeting has not started. 5. During the meeting, press *9 to add yourself to the queue and wait for the Mayor or City Clerk to announce your name/phone number. Press *6 to unmute your line and limit your comments to three minutes. ___________________________________________________________________________ PUBLIC NOTICES Agenda Related Materials: Pursuant to Government Code §54957.5(b)(2) the designated office for inspection of records in connection with this meeting is the Office of the City Clerk, Palm Desert Civic Center, 73-510 Fred Waring Drive, Palm Desert. Staff reports for all agenda items considered in open session, and documents provided to a majority of the legislative bodies are available for public inspection at City Hall and on the City’s website at www.cityofpalmdesert.org by clicking “Council Agenda” at the top of the page. Americans with Disabilities Act: It is the intention of the City of Palm Desert to comply with the Americans with Disabilities Act (ADA) in all respects. If, as an attendee or a participant at this meeting, or in meetings on a regular basis, you will need special assistance beyond what is normally provided, the city will attempt to accommodate you in every reasonable manner. Please contact the Office of the City Clerk, (760) 323-8204, at least 48 hours prior to the meeting to inform us of your needs and to determine if accommodation is feasible. ___________________________________________________________________________ AFFIDAVIT OF POSTING I, Niamh M. Ortega, Deputy City Clerk of the City of Palm Desert, do hereby certify, under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Palm Desert City Council, Successor Agency for the Palm Desert Redevelopment Agency, and Housing Authority, was posted on the City Hall bulletin board and City website www.palmdesert.org no less than 72 hours prior to the meeting. /S/ Níamh M. Ortega Deputy City Clerk [This page has intentionally been left blank.] Parks & Landscape Overview OCTOBER 27, 2022 City Manager Comments Presentation-1 At a glance… •TWELVE PARKS •TWO COMMUNITY CENTERS •25+ MILES OF MULTI- PURPOSE TRAILS! •A STATE OF THE ART AQUATIC CENTER (~80,000 USERS FY 22/23) City Manager Comments Presentation-2 PALM DESERT AQUATIC CENTER RESURFACED RECREATION POOL •5,622 square feet •10-year maintenance for commercial pools City Manager Comments Presentation-3 PALM DESERT AQUATIC CENTER NEW SHADE STRUCTURES •Increases usability of pool decks •Reduces use of umbrellas •Par t of a phased approach to installing shade at the facility City Manager Comments Presentation-4 PALM DESERT AQUATIC CENTER These Capital Improvement Projects revitalized this area of the facility City Manager Comments Presentation-5 Playground Operations & Maintenance ENGINEERED WOOD FIBER REPLENISHMENT •Specialized natural wood product •Reduces impact •Meets ADA requirements City Manager Comments Presentation-6 Playground Operations & Maintenance •MONTHLY INSPECTIONS conducted by a qualified staff •EQUIPMENT REPLACEMENT •Based on inspection reports & •Manufacturer’s specifications City Manager Comments Presentation-7 URBAN FOREST MANAGEMENT ~15,000 trees in the City’s urban forest Civic Center Park City Manager Comments Presentation-8 Trees are pruned on a three-year rotation Maintains Aesthetics Tree Health Public Safety Entrada Del Paseo City Manager Comments Presentation-9 MEDIANS Over 300 acres of landscape & medians are maintained throughout the City City Manager Comments Presentation-10 Median improvements Monterey Ave City Manager Comments Presentation-11 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 BUDGET FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 Budget Civic Center Park $1,105,936 $1,191,823 $1,153,592 $1,278,208 $1,481,177 $1,752,200 Other Parks $826,090 $844,697 $938,122 $925,541 $981,169 $1,196,000 Landscape $1,817,583 $1,802,111 $1,745,289 $1,776,974 $2,287,853 $1,100,000 Aquatic Center $1,402,067 $1,436,359 $1,317,416 $1,233,404 $2,047,353 $2,729,305 CIP $410,155 $634,588 $474,935 $79,042 $378,059 $1,463,000 Total $5,561,831 $5,909,578 $5,629,354 $5,293,169 $7,175,611 $8,240,505 PARK AND LANDSCAPE SERVICES 5-Year Expense Analysis City Manager Comments Presentation-12 How Parks Issues Are Reported PHONE/QR CODES DESKTOP/MOBILE APP (Rock Solid) City Manager Comments Presentation-13 RECREATIONAL PROGRAMS Partner Organizations •Desert Recreation District •YMCA •Friends of the Desert Mountains City Manager Comments Presentation-14 Thursday, October 13, 2022 Minutes of the Regular Meeting of the Palm Desert City Council (CC), Successor Agency to the Palm Desert Redevelopment Agency (SARDA), and Housing Authority (HA) Pursuant to Assembly Bill 361 , this meeting was conducted by teleconference and there was no in-person public access to the meeting location. CALL TO ORDER: A Regular Meeting of the Palm Desert City Council was called to order by Mayor Harnik on Thursday, October 13 , 2022, at 3:0 0 p.m. ROLL CALL: Present: Councilmembers Kathleen Kelly, Gina Nestande; Mayor Pro Tem Sabby Jonathan; and Mayor Jan Harnik Absent: Councilmember Karina Quintanilla. PLEDGE OF ALLEGIANCE: Councilmember Nestande led the Pledge of Allegiance. INSPIRATION/INVOCATION: Councilmember Kelly offered words of inspiration. REPORT OF CLOSED SESSION: The Regular Closed Session of the City Council of October 13, 2022, was called to order by Mayor Harnik at 3:01 p.m., with all members present except Councilmember Quintanilla. The meeting convened in Closed Session to discuss the following items as listed on the Regular Closed Session Meeting Agenda: A.CLOSED SESSION MEETING MINUTES: September 29, 2022 B.CONFERENCE WITH LEGAL COUNSEL – MATTERS CREATING SIGNIFICANT EXPOSURE TO LITIGATION, Pursuant to Government Code Section 54956.9(d)(2): Two (2) matters that, under the existing circumstances, the City Attorney believes creates significant exposure to litigation. Item 1A-1 CC, SARDA, & HA Meeting Minutes October 13, 2022 City of Palm Desert Page 2 ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES City Attorney Hargreaves reported that the City Council received briefings and provided direction to staff regarding the agendized Closed Session Items, but it did not take any reportable actions. PRESENTATIONS: A. PALM SPRINGS INTERNATIONAL AIRPORT COMMISSION UPDATE Kevin Wiseman, the City of Palm Desert’s appointee to the Palm Springs International Airport Commission, provided a report on the airport’s operations and outlook. B. ROSEMARY “ROSIE” CASALS DAY PROCLAMATION Mayor Harnik noted that this item would be presented at a future meeting. CITY MANAGER'S COMMENTS: A. CITY OF PALM DESERT’S 50TH ANNIVERSARY UPDATE – PUBLIC AFFAIRS Public Affairs Manager Soule presented the City of Palm Desert’s 50th Anniversary logo and highlighted upcoming celebratory events. MAYOR/COUNCILMEMBER REPORTS AND REQUESTS FOR ACTION: Mayor Harnik reported the completion of the Coachella Valley Economic Partnership Strategic Plan and spoke on the success of the “Paint El Paseo Pink” event. NON-AGENDA PUBLIC COMMENTS: Eevet Edens, Desert Cancer Foundation representative, provided an overview of the “Paint El Paseo Pink” event and thanked the City Council for its continued support. 1. CONSENT CALENDAR: MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to approve the consent calendar , with the removal of Item Nos. 1E, 1G, and 1I for separate discussion. A. APPROVAL OF CITY COUNCIL, SUCCESSOR AGENCY, AND HOUSING AUTHORITY MINUTES MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to approve the Minutes of September 29, 2022. Item 1A-2 CC, SARDA, & HA Meeting Minutes October 13, 2022 City of Palm Desert Page 3 ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES B. APPROVE FINDINGS RELATIVE TO AB361 - REMOTE TELECONFERENCING MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to find that the State of California continues in a Governor - declared state of emergency to combat the COVID epidemic, that state and local health officials are recommending social distancing, and that the City may continue to employ remote teleconferencing. C. ADOPT ORDINANCE NO. 1386 AMENDING TITLE 2 (ADMINISTRATION AND PERSONNEL) OF THE PALM DESERT MUNICIPAL CODE ADDING CHAPTER 2.22 ESTABLISHING THE ARCHITECTURAL REVIEW COMMISSION (2nd reading) MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to waive further reading and adopt Ordinance No. 1386. D. ADOPT ORDINANCE NO. 1387 AMENDING ORDINANCE NOS. 1374§1 AND 1258§1 AND REVISING CHAPTER 24.04.060 (INVASIVE PLANT SPECIES) OF THE PALM DESERT MUNICIPAL CODE RELATING TO PROHIBITED LANDSCAPE MATERIALS FOR DEVELOPMENT DESIGN AND INSTALLATION (2nd reading)  MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to waive further reading and adopt Ordinance No. 1387. E. APPROVE AMENDMENT NO. 2 TO CONTRACT NO. C41690 WITH HR GREEN PACIFIC, INC., EXTENDING THE TERM FOR AN ADDITIONAL YEAR IN AN ANNUAL AMOUNT NOT TO EXCEED $590,000 This item was excluded from the Consent Calendar. Please refer to page 4 of these minutes for a summary of that action. F. ADOPT RESOLUTION NO. 2022-83 APPROVING FINAL PARCEL MAP NO. 37848 MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to adopt Resolution No. 2022-83 approving Final Parcel Map No. 37848. G. APPOINTMENT OF CITY COUNCIL LIAISON TO THE CIVIC ENGAGEMENT COMMITTEE This item was excluded from the Consent Calendar. Please refer to page 4 of these minutes for a summary of that action. Item 1A-3 CC, SARDA, & HA Meeting Minutes October 13, 2022 City of Palm Desert Page 4 ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES H. APPOINTMENT OF CITY COUNCIL MEMBER TO THE BOARD OF DIRECTORS FOR PRIORITY ONE COACHELLA VALLEY MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to ratify the appointment of Councilmember Kelly to serve on the Board of Directors for Priority One Coachella Valley. I. RECEIVE AND FILE AN INFORMATIONAL ITEM RELATED TO WIND FENCING AROUND VACANT PARCELS This item was excluded from the Consent Calendar. Please refer to page 4 of these minutes for a summary of that action. EXCLUDED CONSENT CALENDAR: E. APPROVE AMENDMENT NO. 2 TO CONTRACT NO. C41690 WITH HR GREEN PACIFIC, INC., EXTENDING THE TERM FOR AN ADDITIONAL YEAR IN AN ANNUAL AMOUNT NOT TO EXCEED $590,000 Economic Development Director Ceja provided a report and responded to City Council inquiries. MOTION BY MAYOR PRO TEM JONATHAN, SECOND BY MAYOR HARNIK, CARRIED 4-0, to: 1. Approve Amendment No. 2 to Contract No. C41690 with HR Green extending the contract for an additional year in an annual amount not to exceed $590,000. 2. Authorize the City Manager to execute all documents to effectuate the intent of the agreement. Clerk Note: The staff report for Item No. 1E in inadvertently identified the approval of Amendment No. 1 to Contract No. C41690. However, this item approved Amendment No. 2 to the subject contract, and the City Clerk has administratively corrected the document. G. APPOINTMENT OF CITY COUNCIL LIAISON TO THE CIVIC ENGAGEMENT COMMITTEE Following discussion, the City Council requested that staff schedule the inaugural meeting of the Civic Engagement Committee after the November 8, 2022, election. MOTION BY MAYOR PRO TEM JONATHAN, SECOND BY MAYOR HARNIK, CARRIED 4-0, to ratify the appointment of Councilmember Kelly to serve as the City Council liaison to the Civic Engagement Committe e. Item 1A-4 CC, SARDA, & HA Meeting Minutes October 13, 2022 City of Palm Desert Page 5 ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES I. RECEIVE AND FILE AN INFORMATIONAL ITEM RELATED TO WIND FENCING AROUND VACANT PARCELS Public Works Deputy Director Ramirez and Project Manager Gayler narrated a PowerPoint presentation and responded to City Council inquiries. MOTION BY MAYOR PRO TEM JONATHAN, SECOND BY MAYOR HARNIK, CARRIED 4-0, to: 1. Receive and file an informational item related to wind fencing around vacant parcels. 2. Direct staff to prepare a resolution establishing a wind fence policy. 2. ACTION CALENDAR: A. JOINT CONSIDERATION FOR APPROVAL OF ACTIONS RELATED TO THE CONVEYANCE OF THE PARCELS IDENTIFIED AS APN 694 -120-028 AND A PORTION OF APN 694-120-029, AND APPROVING LOANS IN THE AGGREGATE AMOUNT OF $6,755,000 FROM THE HOUSING AUTHORITY’S LOW AND MODERATE INCOME HOUSING ASSET FUND FOR THE CONSTRUCTION OF 239 AFFORDABLE HOUSING UNITS AND 2 MANAGER’S UNITS PURSUANT TO A DISPOSITION, DEVELOPMENT AND LOAN AGREEMENT (Joint Item - Housing Authority Board) Housing Manager Gonzales narrated a PowerPoint presentation and responded to City Council inquiries. MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to waive further reading and adopt jointly a City Resolution No. 2022-84 and Housing Authority Resolution No. HA-110 to: 1. Approve the conveyance by the City of Palm Desert of a 10 -acre parcel identified as APN 694-120-028 and a 0.49-acre parcel identified as a portion of APN 694-120-029 (Property) in two parts and approving loans in the amount of $6,000,000, and $755,000 from the Housing Au thority’s Low and Moderate Income Housing Asset Fund to Palm Communities pursuant to a Disposition, Development and Loan Agreement (DDLA), substantially as to form and its exhibits, for the purchase of the Property and construction of 239 affordable housing units and two manager units in two phases. 2. Authorize the Director of Finance to appropriate $6,755,000 from Unobligated Housing Fund balance to the appropriate budget line item. 3. Authorize City/Authority, Mayor/Chairman, staff, and legal counsel to execute and record agreements and documents as described in the DDLA, or which are otherwise deemed necessary or proper to effectuate the City Council and Authority resolutions, including the conveyance of the Property, the Authority’s funding commitment, and related actions for the project as set forth in the DDLA. 4. Authorize Palm Communities to submit an application, including the DDLA, to the California Debt Allocation Committee for an allocation of four percent (4%) tax-exempt bonds, Tax Credit Allocation Committee for an allocation of Federal tax credits and for an allocation of State tax credits, and Riverside County Housing Authority for an allocation of project-based vouchers. Item 1A-5 CC, SARDA, & HA Meeting Minutes October 13, 2022 City of Palm Desert Page 6 ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES 3. PUBLIC HEARINGS: A. ADOPT RESOLUTION NO. 2022-85 UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) AND APPROVE A PRECISE PLAN, TENTATIVE PARCEL MAP, AND ENVIRONMENTAL ASSESSMENT FOR THE DEVELOPMENT OF A 241-UNIT MULTI-FAMILY (AFFORDABLE HOUSING) DEVELOPMENT, A HOUSING DENSITY BONUS, AND RELATED IMPROVEMENTS ON A 10.49-ACRE PARCEL LOCATED AT THE NORTHWEST CORNER OF GERALD FORD DRIVE AND THE EXTENSION OF TECHNOLOGY DRIVE Planning Manager Lua and Housing Program Manager Gonzales narrated a PowerPoint presentation and responded to Council inquiries. Mayor Harnik opened the public hearing. Dan Horn, Applicant, thanked staff and the City Council for its consideration of the project. In response to City Council inquiries, Mr. Horn expressed willingness to work with staff regarding the community pool size . Mayor Harnik closed the public hearing, there being no one else desiring to speak. MOTION BY COUNCILMEMBER KELLY, SECOND BY COUNCILMEMBER NESTANDE, CARRIED 4-0, to: 1. Find no further environmental review is required for the project under CEQA pursuant to Section 15183 (Projects Consistent with a Community Plan, General Plan, or Zoning) of Title 14 of the California Code of Regulations (State CEQA Guidelines). 2. Adopt Resolution No. 2022-85 to approve Precise Plan 22-0003, Tentative Parcel Map 38366, and Environmental Assessment 22 -0003 for the development of a 241-unit multi-family (affordable housing) development, a housing density bonus, and related improvements on a 10.49-acre site located at the northwest corner of Gerald Ford Drive and the extension of Technology Drive, subject to findings and Conditions of Approval. 3. Direct staff to work with the Applicant to explore a possible expansion in the size of the community pool. Item 1A-6 CC, SARDA, & HA Meeting Minutes October 13, 2022 City of Palm Desert Page 7 ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES B. RESOLUTION NO. 2022-86: APPROVE FIVE POWER PURCHASE AGREEMENTS WITH FOREFRONT POWER FOR THE CIVIC CENTER PHOTOVOLTAIC PROJECT (PROJECT NO. 777 -14) Deputy Director of Public Works Ramirez and Senior Project Manager Gayler narrated a PowerPoint presentation and responded to City Council inquiries. Mayor Harnik opened the public hearing. Kevin Flanagan, representing School Project for Utility Rate Reduction (SPURR), responded to City Council inquiries regarding the competitive bidding process facilitated by SPURR. Sam Zantzinger, representing ForeFront Power, responded to City Council inquiries regarding the company’s track record for project completion and the guarantees offered by the company. Mayor Harnik closed the public hearing, there being no one else desiring to speak. During discussion, Mr. Flanagan, Mr. Zantzinger, and Mr. Hargreaves responded to inquiries regarding the assumption of responsibility if ForeFront Power were to declare bankruptcy or fail to meet its operations and maintenance obligations. MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to adopt Resolution No. 2022-86 finding that the projects will result in net cost savings to the City over the life of each 20 -year contract, and that the projects are statutorily exempt from CEQA evaluation. MOTION BY COUNCILMEMBER NESTANDE, SECOND BY COUNCILMEMBER KELLY, CARRIED 4-0, to: 1. Authorize the City Manager to execute the Power Purchase Agreements for Photovoltaic Systems at the Civic Center, Parkview Office Complex, the Aquatic Center, Entrada Del Paseo (Artists Center), and the Desert Willow Academy. 2. Authorize the City Manager to negotiate non-monetary changes and clarifications to the agreements, in consultation with the City Attorney, as may be required to carry out the intent of the agreements. INFORMATION ITEMS: None. Item 1A-7 CC, SARDA, & HA Meeting Minutes October 13, 2022 City of Palm Desert Page 8 ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES ADJOURNMENT: The City Council adjourned at 6:27 p.m. Respectfully submitted, Niamh M. Ortega Deputy City Clerk/Assistant Secretary ATTEST: Anthony J. Mejia, MMC City Clerk/Secretary APPROVED BY CITY COUNCIL: __/__/2022 Item 1A-8 Item IB - 1 Item IB - 2 Item IB - 3 Item IB - 4 Item IB - 5 Item IB - 6 Item IB - 7 Item IB - 8 Item IB - 9 Item IB - 10 Item IB - 11 Item IB - 12 Item IB - 13 Item IB - 14 Item IB - 15 Item IB - 16 Item IB - 17 Item IB - 18 Item IB - 19 Item IB - 20 Item IB - 21 Item IB - 22 Item IB - 23 Item IB - 24 Item IB - 25 Item IB - 26 Item IB - 27 Item IB - 28 Item IB - 29 Item IB - 30 Item IB - 31 Item IB - 32 Item IB - 33 Item IB - 34 Item IB - 35 Item IB - 36 Item IB - 37 Item IB - 38 Item IB - 39 Item IB - 40 Item IB - 41 Item IB - 42 Item IB - 43 Item IB - 44 Item IB - 45 Item IB - 46 Item IB - 47 Item IB - 48 Item IB - 49 Item IB - 50 Item IB - 51 Item IB - 52 Item IB - 53 Item IB - 54 Item IB - 55 Item IB - 56 Item IB - 57 Item IB - 58 Departm ent of Alcoholic Beverage Control State of Cal ifom ia APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) ABC211 (6/99) TO: Department of Alcoholic Beverage Control 34-160 GATEWAY DR. STE 120 File Number: 641084 Receipt Number: 2747663 G eograph ical Code: 3318 PALM DESERT, CA 92211 (760) 324-2027 Copies Mailed Date: September 13, 2022 Issued Date : DISTRI CT SERVING LOCATION : First Owner: Name of Business: Location of Business : County: Is Premises inside city limits? ·-'Mattin0 i\dctress:(tf different from premises address) PALM DESERT HOLY CANNOLI INC HIDEOUT, THE 73595 EL PASEO STE B2208 PALM DESERT, CA 92260--U50 RIVERSIDE Yes Census Tract: 0451.17 74578 LA VEND ERWAY PALM DESERT, CA 92260 --..... ..... Cl) ,..,, -0 \0 :I» :JC ,,e 0 Type of lice nse(s): 47 Dropping Pa rtner: Yes No Transferor's _license /name : 601599 / HONEY CRAB, INC. License Type 4 7 -On-Sale General Eating Place License Tvpe Application Fee 47 -On-Sale General Ea ting Pl ac < Transaction Type PER/PRM Transaction Descriu tion DBL TRF : PREMISES AND PERSON ANNUAL FEE Have you ever been convicted of a felony? No Master y Fee Code NA P40 Secondarv LT And Count Duu Date Fee 0 09/12/22 Sl.305 .00 0 09/12 /22 Sl .290 .00 Total $2 ,595 .00 Have you ever violated any provi s ion s of the Alcoholic Beverage Contro l Act, or regulation s of the Department pertaining to the Act? No STATE OF CALIFORNIA Applicant Name(s) HOLY CANN OLI INC County of RIVE RSID E Date: September 12, 2022 (') ,=. >-< ,- ~n::io r-m 0""-0 ,.-,x,fl:I U";,t- l""I ·< X,V'l"' :-100 n~ >-(') '" Item IC - 1 To : From : Date : Subject: CITY OF PALM DESERT CITY CLERK DEPARTMENT INTEROFFICE MEMORANDUM BUILDING AND SAFETY DIVISION , CODE COMPLIANCE DIVISION , AND PLANNING DIVISION NIAMH M . ORTEGA, DEPUTY CITY CLERK September 20 , 20a APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY: Holy Cannoli 1 Inc/ The Hideout 73595 El Paseo Ste B2208 Palm Desert. CA 92260 A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required . Please mark the appropriate response below and return to my office by Tuesday, September 27 , 2022 . Responding Department: Building and Safety Response: [Z] No comment -okay to present to City Council. D Refer to Date: September 23, 2022 -related comments (attach additional sheets , if necessary): ______________ _ D Other -Additional comments (attach additional sheets , if necessary ): Item IC - 2 To: From : Date : Subject: CITY OF PALM DESERT CITY CLERK DEPARTMENT INTEROFFICE MEMORANDUM BUILDING AND SAFETY DIVISION , CODE COMPLIANCE DIVISION , AND PLANNING DIVISION NIAMH M . ORTEGA, DEPUTY CITY CLERK September 20 , 20~ APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY: Holy Cannoli, Inc/ The Hideout 73595 El Paseo Ste B2208 Palm Desert. CA 92260 A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action . A response is required . Please mark the appropriate response below and return to my office by Tuesday, September 27 , 2022 . Responding Department: Planning Division Date: September 23 , 2022 Response: [Z] No comment -okay to present to City Counc il. D Refer to -related comments (attach additional sheets , if necessary): ______________ _ D Other -Additional comments (attach additional sheets , if necessary): Item IC - 3 [This page has intentionally been left blank.] Page 1 of 1 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Anthony J. Mejia, City Clerk REQUEST: 2022 CONFLICT OF INTEREST CODE BIENNIAL NOTICE PURSUANT TO THE POLITICAL REFORM ACT RECOMMENDATION: 1.Receive and file the 2022 Local Agency Biennial Notice. 2.Direct staff to promulgate the necessary amendments and return to the City Council in December 2022 for adoption pursuant to the Political Reform Act. BACKGROUND/ANALYSIS: The Political Reform Act requires every local government agency to review its Conflict of Interest code biennially. On June 23, 2022, the City Council adopted Resolution No. 2022-49, directing staff to review the City's Conflict of Interest Code and file the requisite 2022 Biennial Notice. The City Council is the code reviewing body for the City of Palm Desert. Therefore, staff is requesting the City Council receive and file the 2022 Local Agency Biennial Notice, and direct staff to make appropriate amendments for City Council adoption prior to December 31, 2022, as required by the Political Reform Act. FINANCIAL IMPACT: There is no fiscal impact associated with the adoption of this resolution. REVIEWED BY: City Clerk: Anthony J. Mejia Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENT: 1.2022 Local Agency Biennial Notice Item ID - 1 Item ID - 2 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Anthony J. Mejia, City Clerk REQUEST: RESOLUTION SETTING THE CITY COUNCIL REGULAR MEETING SCHEDULE FOR THE CALENDAR YEAR 2023 AND RESCINDING RESOLUTION NO. 2022-72 RECOMMENDATION: Waive further reading and adopt a Resolution establishing dates for regular meetings of the Palm Desert City Council for the calendar year 2023 and rescinding Resolution No. 2022-72. BACKGROUND/ANALYSIS: Palm Desert Municipal Code Section 2.36.020 authorizes the City Council to adopt a resolution to establish the dates and times for its regular meetings. On August 25, 2022, the City Council adopted Resolution No. 2022-72 setting its meeting schedule for the calendar year 2023. Staff is seeking City Council approval to reschedule its meetings of February 9 and 23 to February 16, 2023, to accommodate staff’s attendance at the League of California Cities’ City Manager Conference on February 8-10, 2023. FINANCIAL IMPACT: There is no financial impact associated with the adoption of this resolution. REVIEWED BY: City Clerk: Anthony J. Mejia Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENTS: 1. Resolution w/ meeting schedule Item 1E-1 RESOLUTION NO. 2022-_____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, SETTING THE CITY COUNCIL REGULAR MEETING SCHEDULE FOR THE CALENDAR YEAR 2023 AND RESCINDING RESOLUTION NO. 2022-72 WHEREAS, pursuant to Palm Desert Municipal Code Section 2.36.020, the City Council regular meetings are generally held on the second and fourth Thursday of each month, except as otherwise set by City Council resolution; and WHEREAS, the City Council desires to confirm its meeting schedule for 2023 as the second and fourth Thursday of each month unless otherwise rescheduled or canceled. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, as follows: SECTION 1. That the foregoing Recitals are true and correct and are incorporated herein by this reference. SECTION 2. Regular meetings of the City Council shall be held in the Council Chamber, located at 73-510 Fred Waring Drive, Palm Desert, California, on the second and fourth Thursday of each month at the hour of 4:00 p.m. When the regular meeting falls on a legal holiday, the meeting shall be held on the following day unless otherwise determined by the City Council at a regular meeting of the City Council. SECTION 3. Regular meetings of the City Council acting as the governing boards of the successor agency, housing authority, and/or financing authority, shall be held in the Council Chamber, located at 73-510 Fred Waring Drive, Palm Desert, California, concurrently with the regular City Council meeting. SECTION 4. Closed sessions of the City Council and/or the governing boards as provided in this Resolution may be conducted prior to the 4:00 p.m. business portion of regular meetings and as noticed from time to time on the agenda for such meetings. The time scheduled will depend upon the number of items to be considered and the complexity of the issues to be discussed. If necessary, closed sessions not completed prior to the business portion of the meeting may be considered at the conclusion of the business portion of the meeting or as otherwise determined by the City Council. SECTION 5. The City Council has canceled and/or rescheduled certain meetings as outlined in Exhibit A. SECTION 5. The City Council hereby rescinds Resolution No. 2022-72 and all other resolutions in conflict herewith. SECTION 6. The Mayor/Mayor Pro Tem is hereby given authority to take up items on the agenda in the order deemed most appropriate in consideration of public interest and/or time constraints. Item 1E-2 ADOPTED ON ______, 2022. JAN C. HARNIK MAYOR ATTEST: ANTHONY J. MEJIA CITY CLERK I, Anthony J. Mejia, City Clerk of the City of Palm Desert, hereby certify that Resolution No. 2022-__ is a full, true, and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Desert on _____, 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: RECUSED: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Desert, California, on ________________, 2022. ANTHONY J. MEJIA CITY CLERK Item 1E-3 EXHIBIT “A” City of Palm Desert 2023 City Council Meetings Dates The City Council meetings are typically held on the second and fourth Thursday of each month at 4:00 p.m. in the Council Chamber, located at 73-510 Fred Waring Drive, Palm Desert, California. This schedule is subject to change. CURRENT MEETING DATES PROPOSED MEETING DATES Thursday, January 12, 2023 Thursday, January 26, 2023 Thursday, February 9, 2023 Reschedule to Thursday, February 16, 2023 Thursday, February 23, 2023 Cancel Thursday, March 9, 2023 Thursday, March 23, 2023 Thursday, April 13, 2023 Thursday, April 27, 2023 Thursday, May 11, 2023 Thursday, May 25, 2023 Thursday, June 8, 2023 Thursday, June 22, 2022 Thursday, July 13, 2022 Thursday, July 27, 2023 Cancel (Summer Recess) Thursday, August 10, 2023 Cancel (Summer Recess) Thursday, August 24, 2023 Thursday, September 14, 2023 Thursday, September 28, 2023 Thursday, October 12, 2023 Thursday, October 26, 2023 Thursday, November 9, 2023 Reschedule to Thursday, November 16, 2022 Thursday, November 23, 2023 Cancel Thursday, December 14, 2023 Thursday, December 28, 2023 Cancel Approved by the City Council on __/__/2022 Item 1E-4 Page 1 of 2 PALM DESERT HOUSING AUTHORITY STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Celina Cabrera, Management Analyst REQUEST: APPROVAL OF AMENDMENT NO. 1 TO CONTRACT NO. HA-39040 WITH SERVICE FIRST, LLC., FOR POOL AND WATER FEATURE MAINTENANCE AND REPAIR SERVICES AT THE PALM DESERT HOUSING AUTHORITY PROPERTIES IN A TOTAL AMOUNT NOT TO EXCEED $347,147 RECOMMENDATION: 1.Approve Amendment No. 1 (“Amendment”) to Contract No. HA-39040 with Service First, LLC. (“Service First”), for pool and water feature maintenance and repair services at the Palm Desert Housing Authority (“Authority”) properties effective January 1, 2023, for a two-year term in a total amount not to exceed $347,147 (This amount not to exceed $347,147 includes the amount of $138,573.11 per year and up to $35,000 for additional services to be requested as needed), subject to budget approval. 2.Authorize RPM Company, the Authority’s contracted management company, to enter into Amendment No. 1 with Service First for the routine and additional services needed, including expenditures. 3.Authorize the Executive Director or its designee to take any necessary actions to facilitate the Amendment and any documents necessary to effectuate and implement the actions taken herewith. BACKGROUND/ANALYSIS: On December 12, 2019, the Authority Board approved a contract with Service First, LLC., for the purpose of providing pool and water feature maintenance and repair services for a two-year term contract through December 31, 2022. The contract allows the parties to extend the term of the contract for an additional two-year term. Service First has been performing satisfactorily and offered the option to renew the existing contract. Staff has negotiated a 2-year amendment to the existing contract to bring the proposed amendment to expire December 30, 2024. The 2-year amendment is approximately 3% higher than that of their existing annual contract for an increase of $4,035.59 per year. This increased cost is due to the increased price in chemical and material cost increases. Staff is requesting an additional $35,000 annually to provide additional services on an as needed basis that would include services such as equipment repairs or replacement (i.e., pump, pump motor, filters, heating tubes, etc.), the treatment of fecal matter, removal of rodents and pests, leaks, groundwater runoff, etc. Therefore, the contract services will vary and so will the contract amount depend on the actual additional services. All repairs are subject to prevailing wage requirements. Item 1F-1 City of Palm Desert Housing Authority – 1st Amendment HA-39040 Page 2 of 2 RPM Company is authorized to enter into agreements as necessary to provide certain services to the Properties. The type of services being requested require day-to-day responses, so staff is recommending that the Authority Board authorize RPM Company to enter into the Amendment with Services First, LLC., and to authorize them to approve Amendment to the contract for a two- year term, effective January 1, 2023, and approve any additional services as needed up to $35,000. Strategic Plan: This request represents routine administrative business of the Authority. This request does not apply to a specific strategic plan goal. Commission Recommendation: The Housing Commission will review this recommendation at its regular meeting of October 12, 2022. Upon request, a verbal report will be provided at the Authority’s regular meeting of October 27, 2022. FINANCIAL IMPACT: The fiscal impact of this contract is the cost of the current contract based on the courtesy patrol services with the added increase in the total annual amount of $138,573.11 and up to $35,000 for additional services. Monies are available in the Authority’s operating budget through June 30, 2023 in the appropriate Authority accounts for each property. The remaining contract term will be contingent upon budget approval in subsequent fiscal years. There will be no impact to the City’s General Fund. REVIEWED BY: Department Director: Eric Ceja Special Counsel to the Housing Authority: Robert Hargreaves Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo Executive Director: Todd Hileman ATTACHMENTS: 1. Original Maintenance Services Agreement with Service First, LLC 2. Amendment No.1 to Contract HA-39040 3. Security First, LLC proposal (Dated: September 26, 2022) Item 1F-2 PALM DESERT HOUSING AUTHORITY /' MAINTENANCE SERVICES AGREEMENT CONTRACT NO. HA39040 1. PARTIES AND DATE. Contract No. HA39040 This Agreement is made and entered into this 12th day of December, 2019 by and between the Palm Desert Housing Authority, a municipal corporation organized under the laws of the State of California with its principal place of business at 73-510 Fred Waring Drive, Palm Desert, California 92260-2578, County of Riverside, State of California ("Authority") and Service First, LLC, a Corporation with its principal place of business at 2510 N. Grand Avenue Suite 110, Santa Ana, CA 92705 ("Contractor''). Authority and Contractor are sometimes individually referred to as "Party" and collectively as "Parties" in this Agreement. 2. RECITALS. 2.1 Contractor. Contractor desires to perform and assume ·responsibility for the provision of certain maintenance services· required by the Authority on the terms and conditions set forth in this Agreement. Contractor represents that it is experienced in providing maintenance services to public clients, that it and its subcontractors have all necessary licenses and permits to perform the services in the State of California, and that is familiar with the plans of the Authority. Contractor shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of_the Authority. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. 2.2 Project. Authority desires to engage Con.tractor to render such services for the Pool and Water Feature Maintenance and Repair Services project ("Project") as set forth in this Agreement. 3. TERMS. 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. Contractor promises and agrees to furnish to the Authority all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the maintenance services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. 3.1.2 Term. The term of this Agreement shall be from January 2, 2020 to December 30, 2022, unless earlier terminated as provided herein. The Authority shall have the unilateral option, at its sole discretion, to renew this Agreement automatically for no more than two (2) additional one-year terms. Contractor shall complete the $~rvices within the term of this Agreement, and shall meet any other established schedules and de·adlines. The Parties may, by mutual, written consent, extend the term of this Agreement if n~cessary to complete the Services. (BB&K2019) 72500.00001132374943.1 - 1 - _JJ Item 1F-3 Contract No. HA39040 3.2 Responsibilities of Contractor. 3.2.1 Control and Payment of Subordinates: Independent Contractor,. The Services shall be performed by Contractor or under its supervision. Contractor will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. The Authority retains Contractor on an independent contractor basis and not as an. employee. Any personnel performing the Services under this Agreement on behalf of Contractor shall not be employees of the Authority and shall at all times be under Contractor's exclusive direction and control. Contractor shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Contractor shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 3.2.2 Schedule of Services. Contractor shall perform the Services in a prompt and timely manner in accordance with the Schedule of Services set forth in Exhibit "B'' attached hereto and incorporated herein by reference. Contractor represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. Upon request of the Authority, Contractor shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by Contractor shall be subject to the approval of the Authority. 3.2.4 Authority's Representative. The Authority hereby designates Jessica Gonzales, Senior Management Analyst, or his or her designee, to act as its representative for the performance of this Agreement ("Authority's Representative"). Authority's Representative shall have the power to act on behalf of the Authority for all purposes under this Agreement except for increasing compensation. Contractor shall not accept direction or orders from any person other than the Authority's Representative or his or her. designee. ( 3.2.5 Contractor's Representative. Contractor hereby designates Bob Wormus, Account Manager, or his or her designee, to act as its representative for the performance of this Agreement ("Contractor's Representative"). Contractor's Representative shall have full authority to represent and act on behalf of the Contractor for all purposes under this Agreement. The Contractor's Representative shall supervise and direct the Services, using his best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3.2.6 Coordination of Services. Contractor agrees to work closely with the Authority staff in the performance of Services and shall be available to the Authority's staff, consultants and other staff at all reasonable times. 3.2.7 Standard of Care: Performance of Employees. Contractor shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Contractor represents and maintains that it is skilled in the professional calling necessary to perform the Services. Contractor warrants that all employees and subcontractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, Contractor represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, (BB&K2019) 72500.00001\32374943.1 - 2 - Item 1F-4 Contract No. HA39040 including a City Business License, and that such licenses and approvals shall be maintained throughout the term of this Agreement. Contractor shall perform, at its own cost and expense and without reimbursement from the Authority, any services necessary to correct errors or omissions which are caused by the Contractor's failure to comply with the standard of care provided for herein. Any employee of the Contractor or its sub-contractors who is determined by the Authority to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the Authority, shall be promptly removed from the Project by the Contractor and shall not be re-employed to perform any of the Services or to work on the Project. 3.2.8 Period of Performance and Liquidated Damages. Contractor shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above ("Performance Time"). Contractor shall perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibits "A" or "B" attached hereto, or which may be provided separately in writing to the Contractor. Contractor agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such completion schedule or Project milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the Authority will suffer damage. Pursuant to Government Code Section 53069.85, Contractor shall pay to the City as fixed and liquidated damages, and not as a penalty, the sum of Three Hundred and Fifty Dollars ($350) per day for each and every calendar day of delay beyond the Performance Time or beyond any completion schedule or Project milestones established pursuant to this Agreement. 3.2.9 Disputes. Should any dispute arise respecting the true value of any work done, of any work omitted, or of any extra work which Contractor may be required to do, or respecting the size of any payment to Contractor during the performance of this Contract, Contractor shall continue to perform the Work while said dispute is decided by the Authority. If Contractor disputes the Authority's decision, Contractor shall have such remedies as may be provided by law. 3.2.10 Laws and Regulations: Employee/Labor Certifications. · Contractor shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Contractor shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement. All violations of such laws and regulations shall be grounds for the Authority to terminate the Agreement for cause. The Authority is a public entity of the State of California subject to certain provisions of the Health & Safety Code, Government Code, Public Contract Code, and Labor Code of the State. It is stipulated and agreed that all provisions of the law applicable to the public contracts of a municipality are a part of this Agreement to the same extent as though set forth herein and will be complied with. 3.2.10.1 Employment Eligibility: Contractor. Contractor certifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time and shall require all subconsultants and sub-subconsultants to comply with the same. Contractor certifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement, and shall not violate any such law at any time during the term of the Agreement. (BB&K2019) 72500.00001\32374943.1 - 3 - Item 1F-5 Contract No. HA39040 3.2.10.2 Labor Certification. By its signature hereunder, Contractor certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers' Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 3.2.10.3 Equal Opportunity Employment. Contractor represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Contractor shall comply with all relevant provisions of the Authority and the City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 3.2.10.4 Air Quality. Contractor must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the California Air Resources Board (CARB). Contractor shall specifically be aware of the CARB limits and requirements' application to "portable equipment", which definition is considered by CARB to include any item of equipment with a fuel-powered engine. Contractor shall indemnify the Authority against any fines or penalties imposed by CARB or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Contractor, its subcontractors, or others for whom Contractor is responsible under its indemnity obligations provided for in this Agreement. 3.2.10.5 Water Quality Management and Compliance. To the extent applicable, Contractor's Services must account for, and fully comply with, all local, state and federal laws, rules and regulations that may impact water quality compliance, including, without limitation, all applicable provisions of the Federal Water Pollution Control Act (33 U.S.C. §§ 1300); the California Porter-Cologne Water Quality Control Act (Cal Water Code§§ 13000-14950); laws, rules and regulations of the Environmental Protection Agency and the State Water Resources Control Board; the City's ordinances regulating discharges of storm water; and any and all . regulations, policies, or permits issued pursuant to any such authority regulating the discharge of pollutants, as that term is used in the Porter-Cologne Water Quality Control Act, to any ground or surface water in the State. Failure to comply with the laws, regulations and policies described in this Section is a violation of law that may subject Contractor or the Authority to penalties, fines, or additional regulatory requirements. 3.2.11 Insurance. 3.2.11.1 Minimum Requirements. Without limiting Contractor's indemnification of the Authority, and prior to commencement of the Services, Contractor shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form that is satisfactory to the Authority. (A) General Liability Insurance. Contractor shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include (BB&K2019) 72500.00001\32374943.1 -4- Item 1F-6 Contract No. HA39040 contractual liability that has not been amended. Any endorsement restricting standard ISO "insured contract" language will not be accepted. (8) Automobile Liability Insurance. Contractor shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Contractor arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non- owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident. The City's Risk Manager may modify this requirement if it is determined that Consultant will not be utilizing a vehicle in the performance of his/her duties under this Agreement. (C) Umbrella or Excess Liability Insurance. Contractor may opt to utilize umbrella or excess liability insurance in meeting insurance requirements. In such circumstances, Contractor may obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability and employer's liability. Such policy or policies shall include the following terms and conditions: (a) A drop down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; (b) Pay on behalf of wording as opposed to reimbursement; (c) Concurrency of effective dates with primary policies; and (d) Policies shall "follow form" to the underlying primary policies. (e) Insureds under primary policies shall also be insureds under the umbrella or excess policies. (D) Workers' Compensation Insurance. Contractor shall maintain Workers' Compensation Insurance (Statutory Limits) and Employer's Liability Insurance (with limits of at least $1,000,000). Contractor shall submit to the Authority, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of the the Authority, City, its officers, agents, employees and volunteers. (E) Fidelity Coverage. Contractor shall provide evidence of fidelity coverage on a blanket fidelity bond or other acceptable form. Limits shall be no less than $1,000,000 per occurrence. (F) Cyber Liability Insurance. (IF APPLICABLE) Contractor shall procure and maintain Cyber Liability insurance with limits of $1,000,000 per occurrence/loss, which shall include the following coverage: (BB&K2019) 72500.00001\32374943.1 - 5 - Item 1F-7 Contract No. HA39040 a) Liability arising from the theft, dissemination and/or use of confidential or personally identifiable information; including credit monitoring and regulatory fines arising from such theft, dissemination or use of the confidential information. · b) Network security liability arising from the unauthorized use of, access to, or tampering with computer systems. c) Liability arising from the failure of technology products (software) required under the contract for Vendor to properly perform the services intended. d) Electronic Media Liability arising from personal injury, plagiarism or misappropriation of ideas, domain name infringement or improper deep-linking or framing, and infringement or violation of intellectual property rights. e) Liability arising from the failure to render professional services. If coverage is maintained on a claims-made basis, Contractor shall maintain such coverage for an additional period of three (3) years following termination of the Agreement. (G) Pollution Liability Insurance (IF APPLICABLE). Environmental Impairment Liability Insurance shall be written on a Contractor's Pollution Liability form or other form acceptable to the Authority providing coverage for liability arising out of sudden, accidental and gradual pollution and remediation. The policy limit shall be no less than $1,000,000 dollars per claim and in the aggregate. All activities contemplated in this Agreement shall be specifically scheduled on the policy as "covered operations." The policy shall provide coverage for the hauling of waste from the Project site to the final disposal location, including non-owned disposal sites. 3.2.11.2 Other Provisions and Requirements. (A) Proof of Insurance. Contractor shall provide certificates of insurance to the Authority as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation. Insurance certificates and endorsements must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with the Authority at all times during the term of this contract. The Authority reserves the right to require complete, certified copies of all required insurance policies, at any time. (B) Duration of Coverage. Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the work hereunder by Contractor, his/her agents, representatives, employees or subconsultants. (C) Primary/Non-Contributing. Coverage provided by Contractor shall be primary and any insurance or self-insurance procured or maintai_ned by the Authority shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the Authority before the Authority's own insurance or self-insurance shall be called upon to protect it as a named insured. (D) Authority's Rights of Enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications, or is (BB&K2019) 72500.0000113237 4943.1 - 6 - Item 1F-8 Contract No. HA39040 canceled and not replaced, the Authority has the right, but not the duty, to obtain the insurance it deems necessary and any premium paid by the Authority will be promptly reimbursed by Contractor, or the Authority will withhold amounts sufficient to pay premium from Contractor payments. In the alternative, the Authority may cancel this Agreement. (E) Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders' Rating of A-(or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. (F) Waiver of Subrogation: All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against the Authority, its elected or appointed officers, agents, officials, employees and volunteers, or shall specifically allow Contractor or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Contractor hereby waives its own right of recovery against the Authority, the City, its elected or appointed officers, agents, officials, employees and volunteers and shall require similar written express waivers and insurance clauses from each of its subcontractors. (G) Enforcement of Contract Provisions (non estoppel}. Contractor acknowledges and agrees that any actual or alleged failure on the part of the Authority to inform Contractor of non-compliance with any requirement imposes no additional obligations on the Authority nor does it waive any rights hereunder. (H) Requirements Not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Contractor maintains higher limits than the minimums shown above, the Authority requires and shall be entitled to coverage for the higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Authority. (I) Notice of Cancellation. Contractor agrees to oblige its insurance agent or broker and insurers to provide to the Authority with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage. (J) Additional Insured Status. General liability, automobile liability, and if applicable, pollution liability and cyber liability, policies shall provide or be endorsed to provide that the Authority and its officers, officials, employees, agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies. (K) Prohibition of Undisclosed Coverage Limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to the Authority and approved of in writing. (BB&K2019) 72500.00001\3237 4943.1 - 7 - Item 1F-9 Contract No. HA39040 (L) Separation of Insureds. A severability of interests provision must apply for all additional insureds ensuring that Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer's limits of liability. The policy(ies) shall not contain any cross-liability exclusions. (M) Pass Through Clause. Contractor agrees to ensure that its sub-consultants, sub-contractors, and any other party involved with the Project who is brought onto or involved in the project by Contractor, provide the same minimum insurance coverage and endorsements required of Contractor. Contractor agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Contractor agrees that upon request, all agreements with consultants, subcontractors, and others engaged in the Project will be submitted to the Authority for review. (N) Authority's Right to Revise Specifications. The Authority or its Risk Manager reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the Contractor ninety (90) days advance written notice of such change. If such change results in cost to the Contractor, the Authority and Contractor may renegotiate Contractor's compensation. If the Authority reduces the insurance requirements, the change shall go into effect immediately and require no advanced written notice. (0) Self-Insured Retentions. Any self-insured retentions must be declared to and approved by the Authority. The Authority reserves the right to require that self- insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by the Authority. (P) Timely Notice of Claims. Contractor shall give the Authority prompt and timely notice of claims made or suits instituted that arise out of or result from Contractor's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. (Q) Additional Insurance. Contractor shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. 3.2.12 Safety. Contractor shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Contractor shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions, where applicable, shall include, but shall not be limited to: (A) adequate life protection and lifesaving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures. , (BB&K 2019) 72500,00001\32374943.1 - 8 - Item 1F-10 Contract No. HA39040 3.2.13 Bonds. 3.2.13.1 Performance Bond. If required by law or otherwise specifically requested by the Authority in Exhibit "C" attached hereto and incorporated herein by reference, Contractor shall execute and provide to the Authority concurrently with this Agreement a Performance Bond in the amount of the total, not-to-exceed compensation indicated in this Agreement, and in a form provided or approved by the Authority. If such bond is required, no payment will be made to Contractor until it has been received and approved by the Authority. 3.2.13.2 Payment Bond. If required by law or otherwise specifically requested by the Authority in Exhibit "C" attached hereto and incorporated herein by reference, Contractor shall execute and provide to the Authority concurrently with this Agreement a Payment Bond in'the amount of the total, not-to-exceed compensation indicated in this Agreement, and in a form provided or approved by the Authority. If such bond is required, no payment will be made to Contractor until it has been received and approved by the Authority. 3.2.13.3 Bond Provisions. Should, in the Authority's sole opinion, any bond become insufficient or any surety be found to be unsatisfactory, Contractor shall renew or replace the affected bond within 10 days of receiving notice from the Authority. In the event the surety or Contractor intends to reduce or cancel any required bond, at least thirty (30) days prior written notice shall be given to the Authority, and Contractor shall post acceptable replacement bonds at least ten (10) days prior to expiration of the original bonds. No further payments shall be deemed due or will be made under this Agreement until any replacement bonds required by this Section are accepted by the Authority. To the extent, if any, that the total compensation is increased in accordance with the Agreement, the Contractor shall, upon request of the Authority, cause the amount of the bonds to be increased accordingly and shall promptly deliver satisfactory evidence of such increase to the Authority. To the extent available, the bonds shall further provide that no change or alteration of the Agreement (including, without limitation, an increase in the total compensation, as referred to above), extensions of time, or modifications of the time, terms, or conditions of payment to the Contractor, will release the surety. If the Contractor fails to furnish any required bond, the Authority may terminate this Agreement for cause. 3.2: 13.4 Surety Qualifications. Only bonds executed by an admitted surety insurer, as defined in Code of Civil Procedure Section 995.120, shall be accepted. The surety must be a California-admitted surety with a current AM. Best's rating no less than A:VIII and satisfactory to the Authority. If a California-admitted surety insurer issuing bonds does not meet these requirements, the insurer will be considered qualified if it is in conformance with Section 995.660 of the California Code of Civil Procedure, and proof of such is provided to the Authority. 3.2.14 Accounting Records. Contractor shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Contractor shall allow a representative of the Authority during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Contractor shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. (BB&K2019) 72500.00001\32374943.1 - 9 - Item 1F-11 Contract No. HA39040 3.2.15 Work Sites. 3.2.15.1 Inspection Of Site. Contractor shall visit sites where Services are to be performed and shall become acquainted with all conditions affecting the Services prior to commencing the Services. Contractor shall make such examinations as it deems necessary to determine the condition of the work sites, its accessibility to materials, workmen and equipment, and to determine Contractor's ability to protect existing surface and subsurface improvements. No claim for allowances-time or money-will be allowed as to such matters after commencement of the Services. 3.2.15.2 Field Measurements. Contractor shall make field measurements, . verify field conditions and shall carefully compare such field measurements and conditions and other information known to Contractor with the Contract, including any plans, specifications, or scope of work before commencing Services. Errors, inconsistencies or omissions discovered shall be reported to the Authority immediately and prior to performing any Services or altering the condition. 3.2.15.3 Hazardous Materials and Differing Conditions. Should Contractor encounter material reasonably believed to be polychlorinated biphenyl (PCB) or other toxic wastes, hazardous substance and hazardous materials as defined in California state or federal law at the site which have not been rendered harmless, the Contractor shall immediately stop work at the affected area and shall report the condition to the Authority in writing. The Authority shall contract for any services required to directly remove and/or abate PCBs, hazardous substances, other toxic wastes and hazardous materials, and shall not require the Contractor to subcontract for such services. The Services in the affected area shall not thereafter be resumed except by written agreement of the Authority and Contractor. 3.2.16 Loss and Damage. Contractor shall be responsibfe for all loss and damage which may arise out of the nature of the Services agreed to herein, or from the action of the elements, or from any unforeseen difficulties which may arise or be encountered in the prosecution of the Services until the same is fully completed and accepted by the Authority. 3.2~ 17 Warranty. Contractor warrants all Services under the Agreement (which for purposes of this Section shall be deemed to include unauthorized work which has not been removed and any non-conforming materials incorporated into the work) to be of good quality and free from any defective or faulty material and workmanship. Contractor agrees that for a period of one year (or the period of time specified elsewhere in the Agreement or in any guarantee or warranty provided by any manufacturer or supplier of equipment or materials incorporated into the work, whichever is later) after the date of final acceptance, Contractor shall within ten (10) days after being notified in writing by the Authority of any defect in the Services or non-conformance of the Services to the Agreement, commence.and prosecute with due diligence all Services necessary to fulfill the terms of the warranty at its sole cost and expense. Contractor shall act sooner as requested by the Authority in response to an emergency. In addition, Contractor shall, at its sole cost and expense, repair and replace any portions of the work (or work of other contractors) damaged by its defective Services or which becomes damaged in the course of repairing or replacing defective work. For any work so corrected, Contractor's obligation hereunder to correct defective work shall be reinstated for an additional one (1) year period, commencing with the date of acceptance of such corrected work. Contractor shall perform such tests as the Authority may require to verify that any corrective actions, including, without limitation, redesign, repairs, and replacements comply with the requirements of the Agreement. All costs associated with such corrective actions and testing, including the removal, replacement, and (BB&K2019) 72500.00001\32374943.1 -10 - Item 1F-12 Contract No. HA39040 reinstitution of equipment and materials necessary to gain access, shall be the sole responsibility of the Contractor. All warranties and guarantees of subcontractors, suppliers and manufacturers with respect to any portion of the work, whether express or implied, are deemed to be obtained by Contractor for the benefit of the Authority, regardless of whether or not such warranties and guarantees have been transferred or assigned to the Authority by separate agreement and Contractor agrees to enforce such warranties and guarantees, if necessary, on behalf of the Authority. In the event that Contractor fails to perform its obligations under this Section, or under any other warranty or guaranty under this Agreement, to the reasonable satisfaction of the Authority, the Authority shall have the right to correct and replace any defective or non-conforming work and any work damaged by such work or the replacement or correction thereof at Contractor's sole expense. Contractor shall be obligated to fully reimburse the Authority for any expenses incurred hereunder upon demand. 3.3 Fees and Payments. 3.3.1 Compensation. Contractor shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed One Hundred Thirty Four Thousand Five Hundred Nineteen Dollars and Fifty Two Cents ($134,519.52) without written approval of the Authority, the Authority Board, Executive Director or City Manager, as applicable. 3.3.2 Payment of Compensation. Contractor shall submit to the Authority monthly invoices which provides a detailed description of the Services and hours rendered by Contractor. The Authority shall, within thirty (30) days of receiving such statement, review the statement and pay all non-disputed and approved charges. Contractor shall submit its final invoice to the Authority within thirty (30) days from the last date of provided Services or termination of this Agreement and failure by the Contractor to submit a timely invoice shall constitute a waiver of its right to final payment. Payment shall not constitute acceptance of any Services completed by Contractor. The making of final payment shall not constitute a waiver of any claims by the Authority for any reason whatsoever. 3.3.3 Deductions. Authority may deduct or withhold, as applicable, from each progress payment an amount necessary to protect the Authority from loss because of: (1) stop payment notices as allowed by state law; (2) unsatisfactory prosecution of the Services by Contractor; (3) sums representing expenses, losses, or damages as determined by the Authority, incurred by the Authority for which Contractor is liable under the Agreement; and (4) any other sums which the Authority is entitled to recover from Contractor under the terms of the Agreement or pursuant to state law, including Section 1727 of the California Labor Code. The failure by the Authority to deduct any of these sums from a progress payment shall not constitute a waiver of the Authority's right to such sums. 3.3.4 Reimbursement for Expenses. Contractor shall not be reimbursed for any expenses unless authorized in writing by the Authority. 3.3.5 Extra Work. At any time during the term of this Agreement, the Authority may request that Contractor perform Extra Work. As used herein, "Extra Work" means any work which is determined by the Authority to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Contractor shall not perform, nor be compensated for, Extra Work without written authorization from the Authority's Representative. (BB&K2019) 72500.00001\32374943.1 -11 - Item 1F-13 Contract No. HA39040 3.3.6 Prevailing Wages. Contractor is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Contractor agrees to fully comply with such Prevailing Wage Laws. The Authority shall provide Contractor with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Contractor shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Contractor's principal place of business and at the Project site. Contractor shall defend, indemnify and hold the Authority, its elected officials, officers, employees and agents free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Contractor and all subcontractors to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 177 4 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777 .1). The requirement to submit certified payroll records directly to the Labor Commissioner under Labor Code section 1771.4 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Section 1771.4. 3.3.7 Registration/DIR Compliance. If the Services are being performed as part of an applicable "public works" or "maintenance" project, and if the total compensation is $15,000 or more, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Contractor and all subcontractors performing such Services must be registered with the Department of Industrial Relations. Contractor shall maintain registration for the duration of the Project and require the same of any subcontractors, as applicable. This Project may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Contractor's sole responsibility to comply with all applicable registration and labor compliance requirements. Any stop orders issued by the Department of Industrial Relations against Contractor or any subcontractor that affect Contractor's performance of Services·, including any delay, shall be Contractor's sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Contractor caused delay and shall not be compensable by the Authority. Contractor shall defend, indemnify and hold the Authority, City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the Department of Industrial Relations against Contractor or any subcontractor. 3.4 Termination of Agreement. 3.4: 1 Grounds for Termination. The Authority may, by written notice to Contractor, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Contractor of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Contractor shall be compensated only for those Services which have been adequately rendered to the Authority, and Contractor shall be entitled to no further compensation. Contractor may not terminate this Agreement except for cause. 3.4.2 Effect of Termination. If this Agreement is terminated as provided herein, the Authority may require Contractor to provide all finished or unfinished information of any kind (BB&K2019) 72500.00001132374943.1 -12 - Item 1F-14 Contract No. HA39040 prepared by Contractor in connection with the performance of Services under this Agreement. Contractor shall be required to provide such document and other information within fifteen (15) days of the request. 3.4.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, the Authority may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.5 General Provisions. 3.5.1 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: Contractor: Service First, LLC 251 O N. Grand Avenue, Suite 1 O Santa Ana, CA 92705 Authority: Palm Desert Housing Authority 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 Attn: Jessica Gonzales, Senior Management Analyst Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addres~ed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.5.2 Indemnification. 3.5.2.1 Scope of Indemnity. To the fullest extent permitted by law, Contractor shall defend, indemnify and hold the Authority, the City, its officials, employees, agents and authorized volunteers free and harmless from any and all claims, demands, causes of action, suits, actions, proceedings, costs, expenses, liability, judgments, awards, decrees, settlements, loss, damage or injury of any kind, in law or equity, regardless of whether the allegations are false, fraudulent, or groundless, to property or persons, including wrongful death, (collectively, "Claims") in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Contractor, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Services, the Project or this Agreement, including without limitation the payment of all expert witness fees, attorneys' fees and other related costs and expenses except such Claims caused by the sole or active negligence or willful misconduct of the Authority.' 3.5.2.2 Additional Indemnity Obligations. Contractor shall defend, with counsel of the Authority's choosing and at Contractor's own cost, expense and risk, any and all Claims covered by this section that may be brought or instituted against the Authority or its officials, employees, agents and authorized volunteers. In addition, Contractor shall pay and satisfy any judgment, award or decree that may be rendered against the Authority, the City, or its officials, employees, agents and authorized volunteers as part of any such claim, suit, action or (BB&K2019) 72500.00001\32374943.1 -13 - Item 1F-15 Contract No. HA39040 other proceeding. Contractor shall also reimburse the Authority for the cost of any settlement paid by the Authority or its officials, employees, agents and authorized volunteers as part of any such claim, suit, action or other proceeding. Such reimbursement shall include payment for Authority's attorney's fees and costs, including expert witness fees. Contractor shall reimburse the Authority and its officials, employees, agents and authorized volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Contractor's obligation to indemnify shall survive expiration or termination of this Agreement, and shall not be restricted to insurance proceeds, if any, received by the Contractor, the Authority, the City, its officials, employees, agents and authorized volunteers. 3.5.3 Governing Law: Government Code Claim Compliance. This Agreement shall be governed by the laws of the State of California. Venue shall be in Riverside County. In addition to any and all Agreement requirements pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Contractor must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the Authority. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Contractor. If no such Government Code claim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Contractor shall be barred from bringing and maintaining a valid lawsuit against the Authority. 3.5.4 Time of Essence. Time is of the essence for each and every provision of this Agreement. 3.5.5 Authority's Right to Employ Other Contractors. The Authority reserves right to employ other contractors in connection with this Project. 3.5.6 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties. 3.5.7 Assignment or Transfer. Contractor shall not assign, hypothecate or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the Authority. Any attempt to do so shall be null and void, .and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. 3.5.8 Construction: References: Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Contractor include all personnel, employees, agents, and subcontractors of Contractor, except as otherwise specified in this Agreement. All references to the Authority include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content or intent of this Agreement. 3.5.9 Amendment; Modification. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. (BB&K2019) 72500.00001\32374943.1 -14 - Item 1F-16 Contract No. ·HA39040 3.5.10 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel or otherwise. 3.5.11 No Third Party Beneficiaries. Except to the extent expressly provided for in Section 3.5.7, there are no intended third party beneficiaries of any right or obligation assumed by the Parties. 3.5.12 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.5.13 Prohibited Interests. Contractor maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Contractor, to solicit or secure this Agreement. Further, Contractor warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Contractor, any fee, commission, percentage, brokerage fee, gift or other consideration ' contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, the Authority shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of the Authority, during the term of his or her service with the Authority, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.5.14 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 3.5.15 Authority to Enter Agreement. Contractor has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to m~ke this Agreement and bind each respective Party. 3.5.16 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. 3.5.17 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both parties. (BB&K2019) 72500,00001\3237494_3.1 [SIGNATURES ON NEXT PAGE] -15 - Item 1F-17 Contract No. HA39040 SIGNATURE PAGE FOR MAINTENANCE SERVICES AGREEMENT BETWEEN THE PALM DESERT HOUSING AUTHORITY AND SERVICE FIRST, LLC IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written. PALM DESERT HOUSING AUTHORITY AGENT ESA VAKILI, RPM COMPANY uthern Region Vice President (BB&K2019) 72500.00001\32374943.1 Printed 4 Name.no Printed Name: (V\/\\2.il B\J\tiG~ Contractor's License Number and Classification DIR Registration Number (if applicable) -16 - Item 1F-18 Contract No. HA39040 Notary Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to whi~h this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA couNTY oF OYlA\n9e On 1\ (AY\U r~~=-7 =o.dQ, before me, ¥ l\ tv-, \'lll t,. ie-1 ce ' Notary Public, personally appeared M ·-~ bUC,\f'\,,QX , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. CAPACITY CLAIMED BY SIGNER □ Individual □ Corporate Officer □ □ □ □ □ Partner(s) Title(s) □ □ Attorney-In-Fact Trustee(s) Guardian/Conservator Other: Signer is representing: Name Of Person(s) Or Entity(ies) (BB&K2019) 72500.00001\32374943.1 Limited General DESCRIPTION OF ATTACHED DOCUMENT Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above -17 - Item 1F-19 Contract No. HA39040 Notary Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF av M%: On~GlnUA.ry 7, 20.:iq before me, \<a,h--; t¼ :E g;·C'€. , Notary Public, personally appeared ITDY1L \1a.:rJve..a\oev:9 , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. l<ATRINA E. RtCE Notary Public • California Orange County ! Commission Ii 2296618 My Comm. Expires Jul 12, 2023 I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document ahd could prevent fraudulent removal and reattachment of this form to another document. CAPACITY CLAIMED BY SIGNER □ Individual □ Corporate Officer □ Partner(s) □ Attorney-In-Fact □ Trustee(s) Title(s) □ □ □ Guardian/Conservator □ Other: Signer is representing: Name Of Person(s) Or Entity(ies) (BB&K2019) 72500.00001132374943.1 Limited General DESCRIPTION OF ATTACHED DOCUMENT Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above -18 - Item 1F-20 Contract No. HA39040 EXHIBIT "A" SCOPE OF SERVICES In accordance with the RFP dated September 29, 2019, incorporated herein by reference. (BB&K2019) 72500.00001\32374943.1 Exhibit A-1 Item 1F-21 Contract No. HA39040 EXHIBIT "8" SCHEDULE OF SERVICES In accordance with the RFP dated September 29, 2019, Exhibit A, Section Ill, Contracted Specific Services to be Performed and incorporated herein by reference. (BB&K2019) 72500, 00001\32374943.1 Exhibit B - 1 Item 1F-22 Contract No. HA39040 EXHIBIT "C" COMPENSATION In accordance with the RFP dated September 29, 2019, as attached hereto and incorporated herein by reference. (BB&K2019) 72500.00001\32374943.1 Exhibit C -1 Item 1F-23 (BB&K2019) 72500.00001\32374943.1 To: Date: Contract No. HA39040 Contract No. HA39040 Palm Desert Housing Authority Pool and Water Feature-_Malntenance arid Repair Service · C_~ntract No. HA39040 ExhibitB COST PROPOSAL Palm Dese1 ~?using Authority ("Authorlf.Y") Propos~t: --~ .... ~ .... ~=·ae.-ct_,fi"-AZ',i,j,f=· ::.a. ____________ "Firm" The undersigned decla~s that he/she has caref!,dly examined the Contract_ Documents and Addendums l>lci:(s) ___ that he/she is thoroughly familiar with the C9ntents thereof, and is authorized to represent the respective firm and propose services to the Authority. It is understood that the price shown hereon includes all routine and seasonal maintenance described in the Contract Documents and shall oe inclusive of all costs for the Proposer to accomplish the work. Th_e costs of any work shown or required In the Contract Documents, but not specifically identified as a Contract Pay Item are Included in the Contract Pay Items, and no additional compensation shall be due .Contractor by virtue of Contractor's compliance with the Contract Documents. For each item, the averaged one-month maintenance cost shall be indicated and the total of these costs sh~II be extended for the term of the Agreem_ent. Pr:oposer must_provide costs for all items below. Item Property 1. CALIFORNIA VILLAS 11-1trr Califomla D~ve 2. CANDLEWOOD 74000 Shadow Mountain D~ 3. CARLOS ORTEGA VILLAS 77-915 Avenue of Jhe Slales 4. CATALINA GARDENS 73-000A catalina Way 5. DESERT POINTE · 43'805 Monterev Avenue 6. LAGUNA PALMS 73-875 Santa-Rosa Wav 7. LAS:SERENAS _ 73-315 Countrv Club Drive 8. NEiGHBciRS 73-535 Santa ·Rosa WfN 9. ONE QUAIL PLACE 72-600 Fred Warlna D~ 10. ONE QUAIL.PLACE 72-600 Fred W•'""" D~ 11. TAOS PALMS 44-830 Las Palmas Avenue 12. THE PUEBLOS 73-695 Santa Rosa Wav 77802.00000\31308595.1 Type of feature Price Price (Monthly) (12Months) (1) SWJmming Pool, (1) Spa ~\b38. .,s • ,2.,"ls-f. '" (1) SWlmmlng Pool, (1) Spa • 1089.'~ d I a., 'l,11. ,,. (1) SWJmmlng Pool. (1) Spa w., 03,a ,_J:, • I 2.1 cu.-,. '' (1} Swimming Pool di 65S.'~ • 6 ,ts'J. '" (1) Swiinming Pool ·bes.,$ .. e.zs,;.,. (1} Swimming Pool ff 620. 1J "f>,.zs,;.1" (3) Swiminli-1,J Pools, (1) Spa •,s-ai.,, ., fl ,os,. '" (1) SWiinmlng Pool • 600.JJ -6,2.5'9. ff. (4) SWJ111mlng Pciols, (4) Spas • ,,ee.,,, -1,.o,-JS'J."'- (1) Water Feature • 1,efi. ,J • e, :z.s,. fl, (1) SWJmming Pool 'b'o!>·'J , Jl ,2--s, . .,,, (1) Swimming_ Pool C "e,. J) -,.~~ POHA Pool and Water Feature Maimmence and Repatr Serilces RFP PROPOSAL SUBMISSION FORMS: Cost Proposal~ Page 1 of 3 Exhibit C-2 Item 1F-24 (BB&K2019) 72500.00001\32374943. 1 Contract No. HA39040 Contract No. HA39040 Palm Desert Housing Authorify Pool and Water Feature Maintenance and Repair Service Contract No. HA39040 ( Cost Proposal Continued) TOTAL AMOUNT BASE PROPOSAL IN FIGURES$ \ 3 4) 5' \ 'l . S'"L , TO,:AL,AMOUNT BASE PROPOSAL IN WORDS (b,L_ b(J~ ;l'l-ltlil-y ~. rw-,~ 6'-P 1.-hM~ b>tN4eM dPLL;..._ ..... -s-Lfair- In the event of a conflict between the numbers give in figures and In words, the words shall control. IN WITNESS WHEREOF FIRM executed this Proposal as of dates 77802.00000\31308595. 1 Name ofFirm: ?t::'C2.U[W ~c,µ::1{'" Date: I I / S:/ I 1 Exhibit C-3 PDHA Pool and waler Featura Maintenance and Repair S~s RFP PROPOSAL SUBflSSIOH FORMS: Cost Proposal • Page 2 oi 3 Item 1F-25 (BB&K2019) 72500.00001\3237 4943.1 Contract No. HA39040 Contract No. HA39040 Notary Acknowledgment A notary public or other officer ~mpl~ting this cer:tific.ate verifies only the identity of the individual~whci signed the document to which this certificate Is attached, and not the truthfulness, accuracy, or validity Qf that document. · STATE OF CALIFORNIA couNrv oF Dra.rq<u On NOV'e~~f,? 1 20~efore me, ~otlY\fllA E-\2-t C,e , Nqtary Public, personally appeared _:_ b r:d !S.ill w:: , who proved to me on the basis of satisfactoiy evidence to be the petson(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that Ile/she/they executed the same.In his/her/their authorized capacity(ies), ~nd that by his/her/their signature(s) onthe instrument the person(s), or the entity upon b.eh;alf of which the person(s) acted; exE!cuted the lnstrume11t I certify under PENAL TY OF PERJURY under the la~ of the State of California _that the foregolf)g paragraph is true and correct WITNES my hand and official seal. OPTIONAL-------------- Though the information ba/pw is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another documen_t. CAPACITY CLAIMED BY SIGNER □Individual □corporate. Officer TiUe(s) □Partner(s) [j Limited □ General □Attorney-In-Fact □Trustee(s) □Guardian/Conservator 00th!;!r: Signer is representing: Name Of Person(s) Or Entity(ies) 77802:00000\31308595.1 Exhibit C-4 DESCRIPTION OF ATTACHED DOCUMENT Number of Pages _______ Jt/5/1.Cf __ _ Date of Document Sign!;!r(s) Other Than Named Above PDtiA Pool and 11.aler Fea!Um .Mainlenanr.e and Repair Servli;es RFP PROPOSAL!!UBMll!$10N FC)JIMS: Casi P{Qposal • Pige 3 of 3 Item 1F-26 (BB&K2019) 72500.00001\32374943.1 To: Date: Proposer: ITEM 1. 2. 3. 4. 5. Contract No. HA39040 Pa.Im Desert Housing Authority Pool and Water Feature Maintenance and Repair Service Contract No: HA39040 . ADDITIONAL WORK·COST PROPOSAL Palm r;:e' !sing Authority ("Authority") ·----.. ~~~~,.,.__J.._.h~ ....... '.'iq"""'"'A"'P+±'-----•Firm" Extra Work by request and/or authorization only: SERVICE Filter Cleans Equipment.Repairs er hour Rate Algaecldas & Phosphate Removal Labor Rate O)her: -------- Price Price Monthly) (12 Months IN WITNESS WHEREOF FIRM executed this Proposal as of date set fort · 77802.00000\31308595.1 Signer'sName: ___ _J,~~~L.f!=.:fliO..~=:!--- Name of Firm, s ~ C( Date: II / S" fl 9 PDHAPool 111d WalerFearure Maintenance and Repair Ser.ices RFP . PROP<isAL SU_BMISSION FORMS: Addillonal Wink Cost Proposal' Page 1 ol 1 Exhibit C-5 Item 1F-27 PERFORMANCE BOND KNOW ALL PERSONS BY THESE PRESENTS: Contract No. HA39040 Bond Number: 38Koooo50 Premium: $3,767.00 THAT WHEREAS, the Palm Desert Housing Authority (hereinafter referred to as "A th 't ") h d d t Service First Contractors (h . ft " d t th "C t t r'') U Ori y as awar e O Networkdba: Service First , erema er re.erre Oas e on rac 0 an agreement for Contract No. HA39040 (hereinafter referred to as the "Project"). Pool & Water Feature Maintenance & Repair Services at Housing Authority Properties for the term of 1/2/2020 -12/30/2022 only WHEREAS, the work to be performed by the Contractor is more particularly set forth in the Contract Documents for the Project dated December 12, 2019 (hereinafter referred to as "Contract Documents"), the terms and conditions of which are expressly incorporated herein by reference; and WHEREAS, the Contractor is required by said Contract Documents to perform the terms thereof and to furnish a bond for the faithful performance of said Contract Documents. Service First Contractors Network NOW, THEREFORE, we, dbaserviceFirst the undersigned Contractor and The Ohio Casualty Insurance Company as Surety, a corporation organized and duly authorized to transact business under the laws of the State of California, are held and firmly • • One Hundred Thirty-Four Thousand, Five Honored bound unto the Authority m the sum of Nineteenand52/100**... DOLLARS, ($134,519.52** ), said sum being not less than one hundred percent (100%) of the total amount of the Contract, for which amount well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors and assigns, jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION IS SUCH, that, if the Contractor, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and agreements in the Contract Documents and any alteration thereof made as therein provided, on its part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their intent and meaning; and shall faithfully fulfill all obligations including the one-year guarantee of all materials and workmanship; and shall indemnify and save harmless the Authority, its officers and agents, as stipulated in said Contract Documents, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect. As a condition precedent to the satisfactory completion of the Contract Documents, unless otherwise provided for in the Contract Documents, the above obligation shall hold good for a period of one (1) year after the acceptance of the work by the Authority, during which time if Contractor shall fail to make full, complete, and satisfactory repair and replacements and totally protect the Authority from loss or damage resulting from or caused by defective materials or faulty workmanship, Surety shall undertake and faithfully fulfill all such obligations. The obligations of Surety hereunder shall continue so long as any obligation of Contractor remains. Nothing herein shall limit the Authority's rights or the Contractor or Surety's obligations under the Contract, law or equity, including, but not limited to, California Code of Civil Procedure section 337_ 15. Whenever Contractor shall be, and is declared by the Authority to be, in default under the Contract Documents, the Surety shall remedy the default pursuant to the Contract Documents, or shall promptly, at the Authority's option: (8B&1<2019) 72500.00001\32374943.1 Exliibit C-6 Item 1F-28 Contract No. HA39040 (1) Take over and complete the Project in accordance with all terms and conditions in the Contract Documents; or (2) Obtain a bid or bids for completing the Project in accordance with all terms and conditions in the Contract Documents and upon determination by Surety of the ·Iowest responsive and responsible bidder, arrange for a Contract between such bidder, the Surety and the Authority, and make available as work progresses sufficient funds to pay the cost of completion of the Project, less the balance of the contract price, including other.costs and damages for which Surety may be liable. The term "balance of the contract price" as used in this paragraph shall mean the total amount payable to Contractor by the Authority under the Contract and any modification thereto, less any amount previously paid by the Authority to the Contractor and any other set offs pursuant to the Contract Documents. (3) Permit the Authority to complete the Project in any manner consistent with local, California and federal law and make available as work progresses sufficient funds to pay the cost of completion of the Project, less the balance of the contract price, including other costs and damages for which Surety may be liable. The term "balance of the contract price" as used in this paragraph shall mean the total amount payable to Contractor by the Authority under the Contract and any modification thereto, less any amount previously paid by the Authority to the Contractor and any other set offs pursuant to the Contract Documents. Surety expressly agrees that the Authority may reject any contractor or subcontractor which may be proposed by Surety in fulfillment of its obligations in the event of default by the Contractor. Surety shall not utilize Contractor in completing the Project nor shall Surety accept a bid from Contractor for completion of the Project if the Authority, when declaring the Contractor in default, notifies Surety of the Authority's objection to Contractor's further participation in the completion of the Project. · The Surety, for value received, hereby stipulates arid agrees that no change, extension of time, alteration or addition to the terms of the Contract Documents or to the Project to be performed thereunder shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Contract Documents or to the Project, including but not limited to the provisions of sections 2819 and 2845 of the California Civil Code. (8B&1<2019) 72500,00001132374943.1 / Item 1F-29 :: Contract No. HA39040 IN WITNESS WHEREOF, we have hereunto set our hands and seals this 14th day of ,January , 20 20. (Corporate Seal) Service First Contractors Network dba d Service First ,,.,,7 ,,,__,,,.,,, ::~ Surety The Ohio Casualty Insurance Company By ~S~vans Signatures of those signing for the Contractor and Surety must be notarized and evidence of corporate authority attached. · (Attach Attorney-in-Fact Certificate) Title _____________ _ The rate of premium on this bond is $2 5.oo per thousand. The total amount of premium charges, $ 3,767.00 -Premium includes first year hrmd term plus 1% per month for the additional 12 months. (The above must be filled in by corporate attorney.) THIS IS A REQUIRED FORM Any claims under this bond may be addressed to: (Name and Address of Surety) (Name and Address of Agent or Representative for service of process in California, if different from above) (Telephone number of Surety and Agent or Representative for service of process in California) The Ohio Casualty Insurance Company 175 Berkeley St. Boston, MA 02116 Edgewood Partners Insurance Center 1765 Challenge Way, Ste. 200 Sacramento, CA 95815 The Ohio Casualty Insurance Company: 916-830-6075 Edgewood Partners Insurance Center: 877-222-0000 NOTE: A copy of the Power-of-Attorney authorizing the person signing on behalf of the Surety to do so must be attached hereto. (BB&K2019) 72500.00001132374943.1 Exhibit C-8 Item 1F-30 Contract No. HA39040 Notary Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA couNTY oF Orctn<;JI .... On Jqaaa-!J/i / (o 20aa before me, Ked-ril1J/2A.-{;. /2ee , Notary Public, personally appeared /VJ i fu0:Mr , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. CAPACITY CLAIMED BY SIGNER □ Individual l;lJ-Corpor.ate~Offi er &c~ itle(s) □ Partner(s) □ Limited □ General □ Attorney-In-Fact □ Trustee(s) D Guardian/Conservator D Other: Signer is representing: Name Of Person(s) Or Entity(ies) DESCRIPTION OF ATTACHED DOCUMENT Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above NOTE: This acknowledgment is to be completed for Contractor/Principal. (BB&K2019) 72500.00001\32374943.1 Exhibit C-9 Item 1F-31 Contract No. HA39040 Notary Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF Sacramento On January 14 1 20--2Q.., before me, E. Johnson Notary Public, personally appeared Sokha K. Evans , who proved fo me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. OPTIONAL Though the information below is not required by law, it ma· prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT □ Individual □ Corporate Officer Title(s) Title or Type of Document □ Partner(s) □ Limited □ General Number of Pages [fil Attorney-In-Fact □ Trustee(s) □ Guardian/Conservator Date of Document □ Other: Signer is representing: Name Of Person(s) Or Entity(ies) The Ohio Casualty Insurance Company Signer(s) Other Than Named Above NOTE: This acknowledgment is to be completed for the Attorney-in-Fact. The Power-of- Attorney to local representatives of the bonding company must also be attached. (BB&K2019) 72500.00001\3237 4943.1 Item 1F-32 f.,LiberlJ. ~ Mutuat SURETY This Power of Attorney limits the acts of those named herein, and they have no authority to bind the Company except in the manner and to the extent herein stated. Liberty Mutual Insurance Company The Ohio Casualty Insurance Company West American Insurance Company POWER OF ATTORNEY Certificate No: 8202539-395006 KNOWN ALL PERSONS BY THESE PRESENTS: That The Ohio Casualty Insurance Company is a corporation duly organized under the laws of the State of New Hampshire, that Liberty Mutual Insurance Company is a corporation duly organized under the laws of the State of Massachusetts, and West American Insurance Company is a corporation duly organized under the laws of the State of Indiana (herein collectively called the "Companies"), pursuant to and by authority herein set forth, does hereby name, constitute and appoint, Sandra R. Black, Sokha K. Evans all of the city of Sacramento state of California each individually if there be more than one named, its true and lawful attorney-in-fact to make, execute, seal, acknowledge and deliver, for and on its behalf as surety and as its act and deed, any and all undertakings, bonds, recognizances and other surety obligations, in pursuance of these presents and shall be as binding upon the Companies as if they have been duly signed by the president and attested by the secretary of the Companies in their own proper persons. IN WITNESS WHEREOF, this Power of Attorney has been subscribed by an authorized officer or official of the Companies and the corporate seals of the Companies have been affixed thereto this~ day of November , -2Q!2__. Liberty Mutual Insurance Company The Ohio Casualty Insurance Company M ,-.---'-'--.-,-.___:___.-By, b;·--, i r:: David M. Carey, Assistant Secretary _g ,..l' ~ State of PENNSYLVANIA > -ro ~ r:: -g ::, County of MONTGOMERY cu ~ r:: u Cl) On this 6th day of November , 2019 before me personally appeared David M. Carey, who acknowledged himself to be the Assistant Secretary of Liberty Mutual Insurance o o .2 Company, The Ohio Casualty Company, and West American Insurance Company, and that he, as such, being authorized so to do, execute the foregoing instrument for the purposes = ~ ai ~ therein contained by signing on behalf of the corporations by himself as a duly authorized officer. rJ w =->E ,..!!1 gj IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my notarial seal at King of Prussia, Pennsylvania, on the day and year first above written. ~ 0. ~ ~o ffi 0 iii c;,I'-PAS): ~~ ,2 ~ 'l:-~ -1-,i,ONIV~ ~< COMMONWEALTH OF PENNSYLVANIA <( '<t ~ f!! ,J ~~ ,,. Notarial Seal ~ 'o 'g Q) 0 Teresa Paslella, Notary Public Q ~ Upper Merion Twp., Montgomery County By:-+-::::.'.:~::'.:::'. _______________ _,~ ro r:: ro ~ ~.,._ My Commission Expires Marcil 28, 2021 :!= E -~ -f,~\11" ~ '-----~~~~~~--' 0 CU Q) .,._ °tqRY ~V Member, Pennsylvania Association of Notaries ~ 0 i~ ~~ .g> 2 This Power of Attorney is made and executed pursuant to and by authority of the following By-laws and Authorizations of The Ohio Casualty Insurance Company, Liberty Mutual :5 ~ o .!: Insurance Company, and West American Insurance Company which resolutions are now in full force and effect reading as follows: o G> ~ ,i ARTICLE IV -OFFICERS: Section 12. Power of Attorney. ~} .Q ~ Any officer or other official of the Corporation authorized for that purpose in writing by the Chairman or the President, and subject to such limitation as the Chairman or the ~ -2:: ;g u President may prescribe, shall appoint such attorneys-in-fact, as may be necessary to act in behalf of the Corporation to make, execute, seal, acknowledge and deliver as surety > o ro r:: any and all undertakings, bonds, recognizances and other surety obligations. Such attorneys-in-fact, subject to the limitations set forth in their respective powers of attorney, shall ~ ~ ;: ~ have full power to bind the Corporation by their signature and execution of any such instruments and to attach thereto the seal of the Corporation. When so executed, such -°i> ~ G instruments shall be as binding as if signed by the President and attested to by the Secretary. Any power or authority granted to any representative or attorney-in-fact under the ~ ~ provisions of this article may be revoked at any time by the Board, the Chairman, the President or by the officer or officers granting such power or authority. § ~ ARTICLE XIII -Execution of Contracts: Section 5. Surety Bonds and Undertakings. 0 co Any officer of the Company authorized for that purpose in writing by the chairman or the president, and subject to such limitations as the chairman or the president may prescribe, {!. ,.!- shall appoint such attorneys-in-fact, as may be necessary to act in behalf of the Company to make, execute, seal, acknowledge and deliver as surety any and all undertakings, bonds, recognizances and other surety obligations. Such attorneys-in-fact subject to the limitations set forth in their respective powers of attorney, shall have full power to bind the Company by their signature and execution of any such instruments and to attach thereto the seal of the Company. When so executed such instruments shall be as binding as if signed by the president and attested by the secretary. Certificate of Designation -The President of the Company, acting pursuant to the Bylaws of the Company, authorizes David M. Carey, Assistant Secretary to appoint such attomeys-in- fact as may be necessary to act on behalf of the Company to make, execute, seal, acknowledge and deliver as surety any and all undertakings, bonds, recognizances and other surety obligations. Authorization -By unanimous consent of the Company's Board of Directors, the Company consents that facsimile or mechanically reproduced signature of any assistant secretary of the Company, wherever appearing upon a certified copy of any power of attorney issued by the Company in connection with surety bonds, shall be valid and binding upon the Company with the same force and effect as though manually affixed. I, Renee C. Llewellyn, the undersigned, Assistant Secretary, The Ohio Casualty Insurance Company, Liberty Mutual Insurance Company, and West American Insurance Company do hereby certify that the original power of attorney of which the foregoing is a full, true and correct copy of the Power of Attorney executed by said Companies, is in full force and effect and has not been revoked. i I l{n d' ·1o• (j ~ TESTIMONY WHEREOF, I h= h__, •• my h_,, ood alfured fue ""' of sad Comp ... ,;, __l:]__'.'._ day of : tl~. :J. By:u~ Renee C. Llewellyn, ~istant Secretary LMS-12873 LMIC OCIC WAIC Multi Co_062018 Item 1F-33 PAYMENT BOND KNOW ALL MEN BY THESE PRESENTS That Contract No. HA39040 Bond Number: 38Koooo50 Premium included in the Performance Bond WHEREAS, the Palm Desert Housing Authority (hereinafter designated as the ("Authority''), by action taken or a resolution passed December 12 , 20.12...._has awarded to ~.~~[iJ~?~~~~%"rst hereinafter designated as the "Principal," a contract for the work described as follows: Contract No. HA39040; Pool & Water Feature Maintenance & Pool Services at Housing Authority Properties for the term of 1/2/2020 -12/30/2022 only (the "Project"); and WHEREAS, the work to be performed by the Principal is more particularly set forth in the Contract Documents for the Project dated December 12. 2019 ("Contract Documents"), the terms and conditions of which are expressly incorporated by reference; and WHEREAS, said Principal is required to furnish a bond in connection with said contract; providing that if said Principal or any of its Subcontractors shall fail to pay for any materials, provisions, provender, equipment, or other supplies used in, upon, for or about the performance of the work contracted to be done, or for any work or labor done thereon of any kind, or for amounts due under the Unemployment Insurance Code or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of said Principal and its Subcontractors with respect to such work or labor the Surety on this bond will pay for the same to the extent hereinafter set forth. The Ohio Casualty Insurance NOW THEREFORE, we, ,the Principal and Company as Surety, are held and firmly bound unto the Authority in the penal sum of one Hundred Thirty-Four Thousand. FiveHundredNineteenand52/100***** Dollars ($134,519.52** } lawful money of the United States of America, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION IS SUCH that if said Principal, his or its subcontractors, heirs, executors, administrators, successors or assigns, shall fail to pay any of the persons named in Section 9100 of th_e Civil Code, fail to pay for any materials, provisions or other supplies, used in, upon, for or about the performance of the work contracted to be done, or for any work or labor thereon of any kind, or amounts due under the Unemployment Insurance Code with respect to work or labor performed under the contract, or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department or Franchise Tax Board from the wages of employees of the contractor and his subcontractors pursuant to Section 18663 of the Revenue and Taxation Code, with respect to such work and labor the Surety or Sureties will pay for the same, in an amount not exceeding the sum herein above specified, and also, in case suit is brought upon this bond, all litigation expenses incurred by the Authority in such suit, including reasonable attorneys' fees, court costs, expert witness fees and investigation expenses. This bond shall inure to the benefit of any of the persons named in Section 9100 of the Civil Code so as to give a right of action to such persons or their assigns in any suit brought upon this bond. It is further stipulated and agreed that the Surety on this bond shall not be exonerated or released from the obligation of this bond by any change, extension of time for performance, addition, alteration or modification in, to, or of any contract, plans, specifications, or agreement (BB&K2019) 72500.00001\32374943.1 Item 1F-34 Contract No. HA39040 pertaining or relating to any scheme or work of improvement herein above described, or pertaining or relating to the furnishing of labor, materials, or equipment therefore, nor by any change or modification of any terms of payment or extension of the time for any payment pertaining or relating to any scheme or work of improvement herein above described, nor by any rescission or attempted rescission of the contract, agreement or bond, nor by any conditions precedent or subsequent in the bond attempting to limit the right of recovery of claimants otherwise entitled to recover under any such contract or agreement or under the bond, nor by any fraud practiced by any person other than the claimant seeking to recover on the bond and that this bond be con_strued most strongly against the Surety and in favor of all persons for whose benefit such bond is given, and under no circumstances shall Surety be released from liability to those for whose benefit such bond has been given, by reason of any breach of contract between the owner or the Authority and original contractor or on the part of any obligee named in such bond, but the sole conditions of recovery shall be that claimant is a person described in Section 9100 of the Civil Code, and has not been paid the full amount of his claim and that Surety does hereby waive notice of any such change, extension of time, addition, alteration or modification herein mentioned and the provisions of sections 2819 and 2845 of the California Civil Code. IN WITNESS WHEREOF, we have hereunto set our hands and seals this 14th day of January , 20 20 (Corporate Seal) Service First Contractors Network dba: Service First Contractor/ Principal Title( 'if"Coef-a?J- The Ohio Casualty Insurance Company (Corporate Seal) :~re~\:Qk<=z,J~. Sokha K. Evans Attorney-in-Fact Title _____________ _ Signatures of those signing for the Contractor and Surety must be notarized and evidence of corporate authority attached. A Power-of-Attorney authorizing the person signing on behalf of the Surety to do so much be attached hereto. NOTE: A copy of the Power-of-Attorney authorizing the person signing on behalf of the Surety to do so must be attached hereto. (BB&K2019) 72500.00001132374943.1 Item 1F-35 Contract No. HA39040 Notary Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF ()yant:ff ' On( /anw;,Ji. lie, 20~ before me, /<.L;ft1no.. (5. K, C' e , Nalary Public, per:onally appe d Mark flu ch-elC ' who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capaclty(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. . . ....... l KATRINA E. RICE Notary Public • California Orange County ~ Commission# 2296618 - My Comm. Expires Jul I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT □ Individual ·t,t] C~ate Office~ ~ .;;;;£. c reA':TN ~ Title(s) □ Partner(s) □ Limited □ General □ Attorney-In-Fact □ Trustee(s) □ Guardian/Conservator D Other: Signer is representing: Name Of Person(s) Or Entity(ies) Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above NOTE: This acknowledgment is to be completed for Contractor/Principal. (88&1<2019) 72500.00001\32374943.1 Item 1F-36 Contract No. HA39040 Notary Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF Sacramento On January 14 , 20 20, before me, E. Johnson Notary Public, personally appeared Sokha K, Evans , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. t· l (;. -AY xwv(\ OPTIONAL Though the information below is not required by Jaw, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT □ Individual □ Corporate Officer Title(s) □ Partner(s) lx] Attorney-In-Fact O Trustee(s) □ □ O Guardian/Conservator. □ Other: Signer is representing: Limited General Name Of Person(s) Or Entity(ies) The Ohio Casualty Insurance Company Title or Type of Document Number of Pages Date of Document Signer(s) Other Than Named Above NOTE: This acknowledgment is to be completed for the Attorney-in-Fact. The Power-of- Attorney to local representatives of the bonding company must also be attached (BB&K2019) 72500.00001\32374943.1 Exhibit C-14 Item 1F-37 ~LiberiJ. This Power of Attorney limits the acts of those named herein, and they have no authority to bind the Company except in the manner and to the extent herein stated. ~ Mutual. SURETY Liberty Mutual Insurance Company The Ohio Casualty Insurance Company West American Insurance Company POWER OF ATTORNEY Certificate No: 8202539-395006 KNOWN ALL PERSONS BY THESE PRESENTS: That The Ohio Casualty Insurance Company is a corporation duly organized under the laws of the State of New Hampshire, that Liberty Mutual Insurance Company is a corporation duly organized under the laws of the State of Massachusetts, and West American Insurance Company is a corporation duly organized under the laws of the State of Indiana (herein collectively called the "Companies"), pursuant to and by authority herein set forth, does hereby name, constitute and appoint, Sandra R. Black, Sokha K. Evans · all of the city of Sacramento state of California each individually if there be more than one named, its true and lawful attorney-in-fact to make, execute, seal, acknowledge and deliver, for and on its behalf as surety and as its act and deed, any and all undertakings, bonds, recognizances and other surety obligations, in pursuance of these presents and shall be as binding upon the Companies as if they have been duly signed by the president and attested by the secretary of the Companies in their own proper persons. IN WITNESS WHEREOF, this Power of Attorney has been subscribed by an authorized officer or official of the Companies and the corporate seals of the Companies have been affixed thereto this~ day of November , ..lQ!2_. Liberty Mutual Insurance Company The Ohio Casualty Insurance Company i __ ..:_:___ ____ ____ .. , Mfr~~ i c: David M. Carey, Assistant Secretary _s .;-e:! State of PENNSYLVANIA >, -ro SS C ~ ::, County of MONTGOMERY «s ~ , C u a, On this 6th day of November , 2019 before me personally appeared David M. Carey, who acknowledged himself to be the Assistant Secretary of Liberty Mutual Insurance o o ..:! Company, The Ohio Casualty Company, and West American Insurance Company, and that he, as such, being authorized so to do, execute the foregoing instrument for the purposes = ~ a; g! therein contained by signing on behalf of the corporations by himself as a duly authorized officer. rJ w =->-E ~ ~ IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my notarial seal at King of Prussia, Pennsylvania, on the day and year first above written. -Ea, c.. ~ 0 ffi -~ COMMONWEALTH OF PENNSYLVANIA il ~ o~ ~~~-------~ ~v -Q)_ 0 ~ Notarial Seal ,J-.... i ._ "C Teresa Paslella, Notary Public (I/ 1 ; _ • , fl -I-If J O C o 2 Upper Merion Twp., Montgomery County By: -r-~-~---~------------------I lo «I c: a:, ~ _,..~ My Commission Expires March 28, 2021 T p I II N t p bl' 3: E _ ~ -i,~'i'¾SV1->1~" .f> ...,......,....-----,--,---c-----,-----:-:-:-:-:-' eresa as e a, o ary u 1c O «s a,....., -~RV ~V Member,PennsylvamaAssociationofNotaries Cl..o i~ ~~ .gi ~ This Power of Attorney is made and executed pursuant to and by authority of the following By-laws and Authorizations of The Ohio Casualty Insurance Company, Liberty Mutual :5 ~ o .5 Insurance Company, and West American Insurance Company which resolutions are now in full force and effect reading as follows: o :C ~ _sf ARTICLE IV -OFFICERS: Section 12. Power of Attorney. ~ ~ .E e:! Any officer or other official of the Corporation authorized for that purpose in writing by the Chairman or the President, and subject to such limitation as the Chairman or the ~ ~ :g President may prescribe, shall appoint such attorneys-in-fact, as may be necessary to act in behalf of the Corporation to make, execute, seal, acknowledge and deliver as surety > o ro g any and all undertakings, bonds, recognizances and other surety obligations. Such attorneys-in-fact, subject to the limitations set forth in their respective powers of attcrney, shall ~ ~ _; ~ have full power to bind the Corporation by their signature and execution of any such instruments and to attach thereto the seal of the Corporation. When so executed, such -"? ~ :5 instruments shall be as binding as if signed by the President and attested to by the Secretary. Any power or authority granted to any representative or attorney-in-fact under the ~ P.l u provisions of this article may be revoked at any time by the Board, the Chairman, the President or by the officer or officers granting such power or authority. g 6 ARTICLE XIII -Execution of Contracts: Section 5. Surety Bonds and Undertakings. 0 co Any officer of the Company authorized for that purpose in writing by the chairman or the president, and subject to such limitations as the chairman or the president may prescribe, {:!. ,.!. shall appoint such attorneys-in-fact, as may be necessary to act in behalf of the Company to make, execute, seal, acknowledge and deliver as surety any and all undertakings, bonds, recognizances and other surety obligations. Such attorneys-in-fact subject to the limitations set forth in their respective powers of attorney, shall have full power to bind the Company by their signature and execution of any such instruments and to attach thereto the seal of the Company. When so executed such instruments shall be as binding as if signed by the president and attested by the secretary. Certificate of Designation -The President of the Company, acting pursuant to the Bylaws of the Company, authorizes David M. Carey, Assistant Secretary to appoint such attorneys-in- fact as may be necessary to act on behalf of the Company to make, execute, seal, acknowledge and deliver as surety any and all undertakings, bonds, recognizances and other surety obligations. Authorization -By unanimous consent of the Company's Board of Directors, the Company consents that facsimile or mechanically reproduced signature of any assistant secretary of the Company, wherever appearing upon a certified copy of any power of attorney issued by the Company in connection with surety bonds, shall be valid and binding upon the Company with the same force and effect as though manually affixed. I, Renee C. Llewellyn, the undersigned, Assistant Secretary, The Ohio Casualty Insurance Company, Liberty Mutual Insurance Company, and West American Insurance Company do hereby certify that the original power of attorney of which the foregoing is a fuU, true and correct copy of the Power of Attorney executed by said Companies, is in full force and effect and has not been revoked. _ -· ,. L{t} , \ . f) IN TESTIMONY WHEREOF, I haw h"'""""' my harnl aod "''"' •• .,., d ••• com..,,~ •• l day m \J lU'1 U,D\,~ 0110 ::¼4~ By:=-.,_~-=-.,.,...--,,-----,-....,...,,.......,..,....--:--------Renee C. Llewellyn, Assistant Secretary LMS-12873 LMIC OCIC WAIC Multi Co_062018 Item 1F-38 Company Profile Company Search Company Search Results Company Information Old Company Names Agent for Service Reference Information NAIC Group List Lines of Business Workers' Compensation Complaint and Request for Action/ Appeals Contact Information Financial Statements PDF's Annual Statements Quarterly Statements Company Complaint Company Performance & Comparison Data Company Enforcement Action Compo,site Complaints Studies Additional Info Find A Company Representative In Your Area View Financial Disclaimer COMPANY PROFILE Company Information OHIO CASUAL TY INSURANCE COMPANY (THE) 175 BERKELEY STREET Old Company Names Agent For Service Melissa DeKoven 2710 Gateway Oaks Drive, Suite 150N Sacramento CA 95833-3505 Reference Information I NAIC #: I California Company ID #: I Date Authorized in California: BOSTON, MA 02116 Effective Date 124074 5133-4 11/17/2008 I License Status: UNLIMITED-NORMAL I Company Type: I Property & Casualty I State of Domicile: II NEW HAMPSHIRE back to top NAIC Group List NAIC Group #: 0111 LIBERTY MUT GRP Lines Of Business The company is authorized to transact business within these lines of insurance. For an explanation of any of these terms, please refer to the glossary. AUTOMOBILE BOILER AND MACHINERY BURGLARY COMMON CARRIER LIABILITY CREDIT FIRE LIABILITY MARINE MISCELLANEOUS PLATE GLASS SPRINKLER SURETY WORKERS' COMPENSATION· Item 1F-39 CONTRACT NO. HA39040 AMENDMENT NO.1 TO THE POOL AND WATER FEATURE MAINTENANCE AND REPAIR SERVICES AGREEMENT BETWEEN THE PALM DESERT HOUSING AUTHORITY AND SERVICE FIRST LLC. 1. Parties and Date. This Amendment No. 1 to the POOL AND WATER FEATURE MAINTENANCE AND REPAIR SERVICES AGREEMENT is made and entered into as of this 27th day of October 2022, by and between the Palm Desert Housing Authority (“Housing Authority”) and Service First, LLC., a corporation with its principal place of business at 2510 N. Grand Avenue, Suite 110, Santa Ana, CA 92705 (Contractor). The Housing Authority and Contractor are sometimes individually referred to as “Party” and collectively as “Parties.” 2. Recitals. 2.1 Agreement. The Housing Authority and Contractor have entered into an agreement entitled Pool and Water Feature Maintenance and Repair Services Agreement dated December 12, 2019 (“Agreement” or “Contract”) for the purpose of Pool and Water Feature Maintenance and Repair Services for Palm Desert Housing Authority Properties. 2.2 Amendment. The Housing Authority and Contractor desire to amend the Agreement to extend the term and for additional compensation. 2.3 Amendment Authority. This Amendment No. 1 is authorized pursuant to Section 3.1.2 of the Agreement. 3. Terms. 3.1 Term. Section 3.1.2. of the Agreement is hereby amended in its entirety to read as follows: 3.1.1 The term of this Agreement shall be from January 1, 2023, to December 31, 2024, unless earlier terminated as provided herein and contingent on budget approval. Contractor shall complete the Services within the term of this Agreement and shall meet any other established schedules and deadlines. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Services. 3.2 Compensation. Section 3.3.1. of the Agreement is hereby amended in its entirety to read as follows: 3.2.1 Contractor shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "1" attached hereto and incorporated herein by reference. The total compensation shall not exceed one hundred thirty-eight, five hundred seventy- Item 1F-40 Contract No. HA40360 Page 2 of 4 Revised 11-2-20 BBK 72500.00001\32445060.1 three and 11 cents (138,573.11) per year for a total of $277,146.22 for both years, without prior written approval. Additional service up to $35,000 annually to be requested as needed. Subject to budget approval. 3.3 Continuing Effect of Agreement. Except as amended by this Amendment No. 1 all other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 1. From and after the date of this Amendment No. 1, whenever the term “Agreement” or “Contract” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 1. 3.4 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 1. 3.5 Severability. If any portion of this Amendment No. 1 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.6 Counterparts. This Amendment No. 1 may be executed in duplicate originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same instrument. [SIGNATURES ON FOLLOWING PAGE] Item 1F-41 Contract No. HA40360 Page 3 of 4 Revised 11-2-20 BBK 72500.00001\32445060.1 SIGNATURE PAGE FOR AMENDMENT NO.1 TO THE POOL AND WATER FEATURE MAINTENANCE AND REPAIR SERVICES AGREEMENT BETWEEN THE PALM DESERT HOUSING AUTHORITY AND SERVICE FIRST LLC. IN WITNESS WHEREOF, the Parties have entered into this Amendment No. 1 to the Pool and Water Feature Maintenance and Repair Services Agreement as of the day and year first above written. PALM DESERT HOUSING AUTHORITY Approved By: L. Todd Hileman Executive Director Attested By: Anthony J. Mejia, Secretary APPROVED AS TO FORM: By: Robert W. Hargreaves Best Best & Krieger LLP Special Counsel SERVICE FIRST, LLC. Signature Name Title Signature Name Title QC: ____________ Insurance: _________ _________ Initial Review Final Review Item 1F-42 Contract No. HA40360 Page 4 of 4 Revised 11-2-20 BBK 72500.00001\32445060.1 Exhibit 1 Item 1F-43 Item 1F-44 Page 1 of 3 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Mariana Rios, Management Analyst REQUEST: REQUEST FOR ACCEPTANCE OF THE CITY’S CITIZENS OPTION FOR PUBLIC SAFETY/SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUND (COPS/SLESF) EXPENDITURE PLAN AND FUNDING FOR FISCAL YEAR 2022-2023 RECOMMENDATION: Accept the City’s Citizens Option for Public Safety/Supplemental Law Enforcement Services Fund (COPS/SLESF) expenditure plan and funding for Fiscal Year 2022-2023. BACKGROUND/ANALYSIS: In 1996 Legislation adopted (AB 3229) creating the Citizens Option for Public Safety (COPS) program allocating $100,000,000 to local governments annually for front-line law enforcement activities. These funds are deposited into a Supplemental Law Enforcement Services Fund (SLESF). These grant funds supplement funding currently available for public safety including personnel, equipment, and programs. They cannot supplant any other existing funds and must be used exclusively for front-line law enforcement services. The SLESF allocation will be for crime suppression programs and various equipment purchases. State law requires the City to receive a written request submitted by the Chief of Police. As the City contracts with the Riverside County Sheriff’s Department for law enforcement services, the City’s Chief of Police is the Palm Desert Station Captain. The Palm Desert Chief of Police recommends utilizing the FY 2022/23 COPS/SLESF funds as indicated below and estimated based on historic expenditures (these amounts may change). ITEM ESTIMATED AMOUNT 2022/23 Crime Suppression Programs 15% Equipment 85% Crime Suppression Programs The Palm Desert Police Department recommends using the allocated funds towards various crime suppression programs throughout the year, including, the Holiday Theft Suppression Program. Additional crime suppression programs will allow staff to focus their efforts on an identified problem that directly affects quality of life concerns for Palm Desert Residents. These programs can range from theft suppression, addressing a problem with commercial or residential burglaries, retail theft, and any other identified criminal activities that directly affect quality of life in Palm Desert. Item 1G-1 City of Palm Desert FY 2022-2023 COPS/SLESF Expenditure Plan and Award Page 2 of 3 Equipment, Services, and Supplies These funds are used for multiple items, including but not limited to, purchase of new motor units (one will be replaced this fiscal year), monthly vehicle rentals for undercover officers assigned to the Burglary Suppression Unit, the purchase of additional mobile camera systems, automated license plate recognition system, raid vests for new special team members, Police Department golf cart maintenance, shoulder patches, police vehicle decals, radar gun purchase and/or maintenance, safety supplies, training, cellular telephone and services for special teams. Additionally, funds can purchase computers, technology, and other support apparatus. Strategic Plan: This item is related to the Public Safety and Emergency Services section of the Palm Desert Strategic Plan, specifically under Priority 1: Enhance the delivery of public safety services. The priority’s strategy is to expand the existing superlative services provided by the Fire and Police Departments to address future growth and safety concerns. Palm Desert’s participation in the Crime Suppression Programs and the availability of SLESF revenues will assist in meeting this priority, by (1) having an increased law enforcement presence in mitigating any potential criminal activity and (2) providing funding for front line law enforcement activities throughout the fiscal year. Commission Recommendation: The Palm Desert Public Safety Commission was provided with an informational report on this matter at their October 12, 2022, meeting. FINANCIAL IMPACT: The allocation of COPS/SLESF monies will fund the aforementioned program and items. The County Auditor allocates the annual grant award in the County’s Supplemental Law Enforcement Services Account (SLESA). The funds are then deposited in a SLESA established by the City. Cities are provided a minimum frontline law enforcement allocation of $100,000 under the program and funds can carry over at the end of the fiscal year. The City of Palm Desert has an unencumbered balance of approximately $293,000 (as of 10/5/2022) to use on frontline municipal police services in FY 2022/23. Any additional SLESF funds for FY 2022/23 will be allocated to equipment and theft suppression programs. There is no impact to the General Fund. REVIEWED BY: Department Director: Chris Escobedo Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENTS: 1. Palm Desert Police Department SLESF Expenditure Plan 2. Citizen Option for Public Safety (COPS) Funds Reconciliation Item 1G-2 City of Palm Desert FY 2022-2023 COPS/SLESF Expenditure Plan and Award Page 3 of 3 3. California Government Code Section 30061 Item 1G-3 Item 1G-4 Item 1G-5 City of Palm Desert Cal COPS Grants 2294210-4391400DATEVENDORDESCRIPTIONAMOUNT GRANT YEAR TYPE 8/20/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,239.99 21/22 Srvc/Spply 8/20/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,347.36 21/22 Srvc/Spply 8/20/2021 V0011989-VER VERIZON WIRELES PD Sheriff Cel 325.15 21/22 Srvc/Spply 9/3/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,347.36 21/22 Srvc/Spply 9/3/2021 V0013988-FRO FRONTIER COMMUN Valley Crimest 149.18 21/22 Srvc/Spply 9/3/2021 V0013988-FRO FRONTIER COMMUN Valley Crimest 149.18 21/22 Srvc/Spply 9/17/2021 V0011989-VER VERIZON WIRELES PD Sheriff Cel 168.68 21/22 Srvc/Spply 10/1/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,516.93 21/22 Srvc/Spply 10/15/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,347.36 21/22 Srvc/Spply 10/29/2021 V0013988-FRO FRONTIER COMMUN Valley Crimest 157.40 21/22 Srvc/Spply 10/29/2021 V0011989-VER VERIZON WIRELES PD Sheriff Cel 203.76 21/22 Srvc/Spply 11/12/2021 V0013164-MO Cops Boots 413.29 21/22 Srvc/Spply 11/19/2021 V0013988-FRO FRONTIER COMMUN Valley Crimest 149.18 21/22 Srvc/Spply 11/29/2021 V0011989-VER VERIZON WIRELES PD Sheriff Cel 210.98 21/22 Srvc/Spply 11/29/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,347.51 21/22 Srvc/Spply 11/29/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,076.42 21/22 Srvc/Spply 11/29/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,076.42 21/22 Srvc/Spply 11/29/2021 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 12/10/2021 V0013988-FRO FRONTIER COMMUN Valley Crimest 157.40 21/22 Srvc/Spply 12/28/2021 V0012707-ENT Car Rentals for Sheriff Dept 1,344.65 21/22 Srvc/Spply 12/28/2021 V0012707-ENT Car Rentals for Sheriff Dept 2,422.02 21/22 Srvc/Spply 1/7/2022 V0013988-FRO FRONTIER COMMUN Valley Crimest 157.40 21/22 Srvc/Spply 1/21/2022 V0011989-VER VERIZON WIRELES PD Sheriff Cel 220.69 21/22 Srvc/Spply 1/21/2022 V0011989-VER VERIZON WIRELES PD Sheriff Cel 382.80 21/22 Srvc/Spply 2/4/2022 V0012707-ENT Car Rentals for Sheriff Dept 2,879.91 21/22 Srvc/Spply 2/4/2022 V0013988-FRO FRONTIER COMMUN Valley Crimest 154.67 21/22 Srvc/Spply 2/4/2022 V0006659-RIV Police Radio operations 59.74 21/22 Srvc/Spply 2/4/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 2/18/2022 V0011989-VER VERIZON WIRELES PD Sheriff Cel 987.34 21/22 Srvc/Spply 2/18/2022 V0012707-ENT Car Rentals for Sheriff Dept 1,076.42 21/22 Srvc/Spply 3/4/2022 V0013164-MO Deputy Uniforms 3,668.60 21/22 Srvc/Spply 3/4/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 3/18/2022 V0011989-VER VERIZON WIRELES PD Sheriff Cel 237.56 21/22 Srvc/Spply 4/1/2022 V0006529-TOP Sheriff Dept replace signs 188.56 21/22 Srvc/Spply 4/1/2022 V0012707-ENT Car Rentals for Sheriff Dept 754.22 21/22 Srvc/Spply 4/15/2022 V0013988-FRO FRONTIER COMMUN Valley Crimest 155.27 21/22 Srvc/Spply 4/15/2022 V0013988-FRO FRONTIER COMMUN Valley Crimest 155.27 21/22 Srvc/Spply 4/29/2022 V0013988-FRO FRONTIER COMMUN Valley Crimest 157.99 21/22 Srvc/Spply 4/29/2022 V0012707-ENT Car Rentals for Sheriff Dept 2,694.72 21/22 Srvc/Spply jbounds COPS FUNDS 2021-2022 - 39-14 10/5/2022 Item 1G-6 City of Palm Desert Cal COPS Grants 2294210-4391400DATEVENDORDESCRIPTIONAMOUNT GRANT YEAR TYPE 4/29/2022 V0012707-ENT Car Rentals for Sheriff Dept 2,683.88 21/22 Srvc/Spply 5/27/2022 V0013988-FRO FRONTIER COMMUN Valley Crimest 157.99 21/22 Srvc/Spply 6/24/2022 V0011989-VER VERIZON WIRELES PD Sheriff Cel 208.60 21/22 Srvc/Spply 6/24/2022 V0012707-ENT AdditionalFunds-Car Rentals for Sheriff Dep 1,104.92 21/22 Srvc/Spply 6/24/2022 V0012707-ENT AdditionalFunds-Car Rentals for Sheriff Dep 1,102.21 21/22 Srvc/Spply 6/24/2022 V0012707-ENT AdditionalFunds-Car Rentals for Sheriff Dep 1,347.36 21/22 Srvc/Spply 6/30/2022 V0011989-VER VERIZON WIRELES PD Sheriff Cel 214.39 21/22 Srvc/Spply 6/30/2022 V0013988-FRO FRONTIER COMMUN Valley Crimest 151.99 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,522.58 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 6/30/2022 V0006659-RIV Police Radio operations 1,313.49 21/22 Srvc/Spply 2294210 4391400 balance 53,023.69 Total Expenditure Current Year Expenditure by Grant Award Year Amount 20/21 - - - 2294210 4391400 balance - Total FY 21/22 SLESF Summary Report (Current) Fiscal Year Beginning Balance 184,958.92 Rcpt #Date 21/22 FY21 COPS Growth 61,284.85 9910 10/12/2021 21/22 payment for 09/2021 8,333.33 9954 10/19/2021 21/22 payment for 10/2021 8,333.33 10093 11/4/2021 21/22 payment for 11/2021 8,333.33 10425 12/9/2021 21/22 payment for 12/2021 8,333.33 10562 12/28/2021 21/22 payment for 1/2022 8,333.33 10758 2/2/2022 21/22 payment for 2/2022 8,333.33 10980 3/8/2022 jbounds COPS FUNDS 2021-2022 - 39-14 10/5/2022 Item 1G-7 City of Palm Desert Cal COPS Grants 2294210-4391400DATEVENDORDESCRIPTIONAMOUNT GRANT YEAR TYPE 21/22 payment for 3/2022 8,333.33 11173 4/1/2022 21/22 payment for 4/2022 8,333.33 11410 5/3/2022 21/22 Final 21/22 33,333.36 11729 6/8/2022 - 2290000 3423001 balance 161,284.85 Revenue Combined Beginning Balance and Current Year 346,243.77 Total Grant Revenue Salaries - Srvc/Spply 53,023.69 Equip - Admin Overhead - Encumbrances - 53,023.69 Expenditure Excess (deficiency) CY Revenue Over (under) CY Expenditures 108,261.16 Grant Balance 293,220.08 jbounds COPS FUNDS 2021-2022 - 39-14 10/5/2022 Item 1G-8 State of California GOVERNMENT CODE Section 30061 30061. (a) There shall be established in each county treasury a Supplemental Law Enforcement Services Account (SLESA), to receive all amounts allocated to a county for purposes of implementing this chapter. (b) In any fiscal year for which a county receives moneys to be expended for the implementation of this chapter, the county auditor shall allocate the moneys in the county’s SLESA within 30 days of the deposit of those moneys into the fund. The moneys shall be allocated as follows: (1) Five and fifteen-hundredths percent to the county sheriff for county jail construction and operation. In the case of Madera, Napa, and Santa Clara Counties, this allocation shall be made to the county director or chief of corrections. (2) Five and fifteen-hundredths percent to the district attorney for criminal prosecution. (3) Thirty-nine and seven-tenths percent to the county and the cities within the county, and, in the case of San Mateo, Kern, Siskiyou, and Contra Costa Counties, also to the Broadmoor Police Protection District, the Bear Valley Community Services District, the Stallion Springs Community Services District, the Lake Shastina Community Services District, and the Kensington Police Protection and Community Services District, in accordance with the relative population of the cities within the county and the unincorporated area of the county, and the Broadmoor Police Protection District in the County of San Mateo, the Bear Valley Community Services District and the Stallion Springs Community Services District in Kern County, the Lake Shastina Community Services District in Siskiyou County, and the Kensington Police Protection and Community Services District in Contra Costa County, as specified in the most recent January estimate by the Demographic Research Unit of the Department of Finance, and as adjusted to provide, except as provided in subdivision (i), a grant of at least one hundred thousand dollars ($100,000) to each law enforcement jurisdiction. For a newly incorporated city whose population estimate is not published by the Department of Finance, but that was incorporated prior to July 1 of the fiscal year in which an allocation from the SLESA is to be made, the city manager, or an appointee of the legislative body, if a city manager is not available, and the county administrative or executive officer shall prepare a joint notification to the Department of Finance and the county auditor with a population estimate reduction of the unincorporated area of the county equal to the population of the newly incorporated city by July 15, or within 15 days after the Budget Act is enacted, of the fiscal year in which an allocation from the SLESA is to be made. No person residing within the Broadmoor Police Protection District, the Bear Valley Community Services District, STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL Item 1G-9 the Stallion Springs Community Services District, the Lake Shastina Community Services District, or the Kensington Police Protection and Community Services District shall also be counted as residing within the unincorporated area of the County of San Mateo, Kern, Siskiyou, or Contra Costa, or within any city located within those counties. Except as provided in subdivision (i), the county auditor shall allocate a grant of at least one hundred thousand dollars ($100,000) to each law enforcement jurisdiction. Moneys allocated to the county pursuant to this subdivision shall be retained in the county SLESA, and moneys allocated to a city pursuant to this subdivision shall be deposited in a SLESA established in the city treasury. (4) Fifty percent to the county or city and county to implement a comprehensive multiagency juvenile justice plan as provided in this paragraph. The juvenile justice plan shall be developed by the local juvenile justice coordinating council in each county and city and county with the membership described in Section 749.22 of the Welfare and Institutions Code. The plan shall be reviewed and updated annually by the council. The plan or updated plan may, at the discretion of the county or city and county, be approved by the county board of supervisors. The plan or updated plan shall be submitted to the Board of State and Community Corrections by May 1 of each year in a format specified by the board that consolidates the form of submission of the annual comprehensive juvenile justice multiagency plan to be developed under this chapter with the form for submission of the annual Youthful Offender Block Grant plan that is required to be developed and submitted pursuant to Section 1961 of the Welfare and Institutions Code. (A) The multiagency juvenile justice plan shall include, but not be limited to, all of the following components: (i) An assessment of existing law enforcement, probation, education, mental health, health, social services, drug and alcohol, and youth services resources that specifically target at-risk juveniles, juvenile offenders, and their families. (ii) An identification and prioritization of the neighborhoods, schools, and other areas in the community that face a significant public safety risk from juvenile crime, such as gang activity, daylight burglary, late-night robbery, vandalism, truancy, controlled substances sales, firearm-related violence, and juvenile substance abuse and alcohol use. (iii) A local juvenile justice action strategy that provides for a continuum of responses to juvenile crime and delinquency and demonstrates a collaborative and integrated approach for implementing a system of swift, certain, and graduated responses for at-risk youth and juvenile offenders. (iv) A description of the programs, strategies, or system enhancements that are proposed to be funded pursuant to this subparagraph. (B) Programs, strategies, and system enhancements proposed to be funded under this chapter shall satisfy all of the following requirements: (i) Be based on programs and approaches that have been demonstrated to be effective in reducing delinquency and addressing juvenile crime for any elements of response to juvenile crime and delinquency, including prevention, intervention, suppression, and incapacitation. Item 1G-10 (ii) Collaborate and integrate services of all the resources set forth in clause (i) of subparagraph (A), to the extent appropriate. (iii) Employ information sharing systems to ensure that county actions are fully coordinated, and designed to provide data for measuring the success of juvenile justice programs and strategies. (C) To assess the effectiveness of programs, strategies, and system enhancements funded pursuant to this paragraph, each county or city and county shall submit by October 1 of each year a report to the county board of supervisors and to the Board of State and Community Corrections on the programs, strategies, and system enhancements funded pursuant to this chapter.The report shall be in a format specified by the board that consolidates the report to be submitted pursuant to this chapter with the annual report to be submitted to the board for the Youthful Offender Block Grant program, as required by subdivision (c) of Section 1961 of the Welfare and Institutions Code. The report shall include all of the following: (i) An updated description of the programs, strategies, and system enhancements that have been funded pursuant to this chapter in the immediately preceding fiscal year. (ii) An accounting of expenditures during the immediately preceding fiscal year for each program, strategy, or system enhancement funded pursuant to this chapter. (iii) A description and expenditure report for programs, strategies, or system enhancements that have been cofunded during the preceding fiscal year using funds provided under this chapter and Youthful Offender Block Grant funds provided under Chapter 1.5 (commencing with Section 1950) of Division 2.5 of the Welfare and Institutions Code. (iv) Countywide juvenile justice trend data available from existing statewide juvenile justice data systems or networks, as specified by the Board of State and Community Corrections, including, but not limited to, arrests, diversions, petitions filed, petitions sustained, placements, incarcerations, subsequent petitions, and probation violations, and including, in a format to be specified by the board, a summary description or analysis, based on available information, of how the programs, strategies, or system enhancements funded pursuant to this chapter have or may have contributed to, or influenced, the juvenile justice data trends identified in the report. (D) The board shall, within 45 days of having received the county’s report, post on its internet website a description or summary of the programs, strategies, or system enhancements that have been supported by funds made available to the county under this chapter. (E) The Board of State and Community Corrections shall compile the local reports and, by March 1 of each year following their submission, make a report to the Governor and the Legislature summarizing the programs, strategies, and system enhancements and related expenditures made by each county and city and county from the appropriation made for the purposes of this paragraph. The annual report to the Governor and the Legislature shall also summarize the countywide trend data and any other pertinent information submitted by counties indicating how the programs, strategies, or system enhancements supported by funds appropriated under this chapter Item 1G-11 have or may have contributed to, or influenced, the trends identified. The board may consolidate the annual report to the Legislature required under this paragraph with the annual report required by subdivision (d) of Section 1961 of the Welfare and Institutions Code for the Youthful Offender Block Grant program. The annual report shall be submitted pursuant to Section 9795, and shall be posted for access by the public on the internet website of the board. (c) Subject to subdivision (d), for each fiscal year in which the county, each city, the Broadmoor Police Protection District, the Bear Valley Community Services District, the Stallion Springs Community Services District, the Lake Shastina Community Services District, and the Kensington Police Protection and Community Services District receive moneys pursuant to paragraph (3) of subdivision (b), the county, each city, and each district specified in this subdivision shall appropriate those moneys in accordance with the following procedures: (1) In the case of the county, the county board of supervisors shall appropriate existing and anticipated moneys exclusively to provide frontline law enforcement services, other than those services specified in paragraphs (1) and (2) of subdivision (b), in the unincorporated areas of the county, in response to written requests submitted to the board by the county sheriff and the district attorney. Any request submitted pursuant to this paragraph shall specify the frontline law enforcement needs of the requesting entity, and those personnel, equipment, and programs that are necessary to meet those needs. (2) In the case of a city, the city council shall appropriate existing and anticipated moneys exclusively to fund frontline municipal police services, in accordance with written requests submitted by the chief of police of that city or the chief administrator of the law enforcement agency that provides police services for that city. (3) In the case of the Broadmoor Police Protection District within the County of San Mateo, the Bear Valley Community Services District or the Stallion Springs Community Services District within Kern County, the Lake Shastina Community Services District within Siskiyou County, or the Kensington Police Protection and Community Services District within Contra Costa County, the legislative body of that special district shall appropriate existing and anticipated moneys exclusively to fund frontline municipal police services, in accordance with written requests submitted by the chief administrator of the law enforcement agency that provides police services for that special district. (d) For each fiscal year in which the county, a city, or the Broadmoor Police Protection District within the County of San Mateo, the Bear Valley Community Services District or the Stallion Springs Community Services District within Kern County, the Lake Shastina Community Services District within Siskiyou County, or the Kensington Police Protection and Community Services District within Contra Costa County receives any moneys pursuant to this chapter, in no event shall the governing body of any of those recipient agencies subsequently alter any previous, valid appropriation by that body, for that same fiscal year, of moneys allocated to the county or city pursuant to paragraph (3) of subdivision (b). Item 1G-12 (e) For the 2011–12 fiscal year, the Controller shall allocate 23.54 percent of the amount deposited in the Local Law Enforcement Services Account in the Local Revenue Fund 2011 for the purposes of paragraphs (1), (2), and (3) of subdivision (b), and shall allocate 23.54 percent for purposes of paragraph (4) of subdivision (b). (f) Commencing with the 2012–13 fiscal year, subsequent to the allocation described in subdivision (c) of Section 29552, the Controller shall allocate 23.54363596 percent of the remaining amount deposited in the Enhancing Law Enforcement Activities Subaccount in the Local Revenue Fund 2011 for the purposes of paragraphs (1) to (3), inclusive, of subdivision (b), and, subsequent to the allocation described in subdivision (c) of Section 29552, shall allocate 23.54363596 percent of the remaining amount for purposes of paragraph (4) of subdivision (b). (g) Commencing with the 2013–14 fiscal year, subsequent to the allocation described in subdivision (d) of Section 29552, the Controller shall allocate 23.54363596 percent of the remaining amount deposited in the Enhancing Law EnforcementActivities Subaccount in the Local Revenue Fund 2011 for the purposes of paragraphs (1) to (3), inclusive, of subdivision (b), and, subsequent to the allocation described in subdivision (d) of Section 29552, shall allocate 23.54363596 percent of the remaining amount for purposes of paragraph (4) of subdivision (b). The Controller shall allocate funds in monthly installments to local jurisdictions for public safety in accordance with this section as annually calculated by the Director of Finance. (h) Funds received pursuant to subdivision (b) shall be expended or encumbered in accordance with this chapter no later than June 30 of the following fiscal year. A local agency that has not met the requirement of this subdivision shall remit unspent SLESA moneys received after April 1, 2009, to the Controller for deposit in the Local Safety and Protection Account, after April 1, 2012, to the Local Law Enforcement ServicesAccount, and after July 1, 2012, to the County Enhancing Law Enforcement Activities Subaccount. This subdivision shall become inoperative on July 1, 2015. (i) In the 2010–11 fiscal year, if the fourth quarter revenue derived from fees imposed by subdivision (a) of Section 10752.2 of the Revenue and Taxation Code that are deposited in the General Fund and transferred to the Local Safety and Protection Account, and continuously appropriated to the Controller for allocation pursuant to this section, are insufficient to provide a minimum grant of one hundred thousand dollars ($100,000) to each law enforcement jurisdiction, the county auditor shall allocate the revenue proportionately, based on the allocation schedule in paragraph (3) of subdivision (b). The county auditor shall proportionately allocate, based on the allocation schedule in paragraph (3) of subdivision (b), all revenues received after the distribution of the fourth quarter allocation attributable to these fees for which payment was due prior to July 1, 2011, until all minimum allocations are fulfilled, at which point all remaining revenue shall be distributed proportionately among the other jurisdictions. (j) The county auditor shall redirect unspent funds that were remitted after July 1, 2012, by a local agency to the County Enhancing Law Enforcement Activities Item 1G-13 Subaccount pursuant to subdivision (h), to the local agency that remitted the unspent funds in an amount equal to the amount remitted. (Amended by Stats. 2019, Ch. 29, Sec. 112. (SB 82) Effective June 27, 2019.) Item 1G-14 Page 1 of 2 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Thomas Soule, Public Affairs Manager REQUEST: APPROVE AMENDMENT NO. 1 TO CONTRACT NO. C43390 WITH IDEA PEDDLER FOR MARKET RESEARCH AS EXTRA WORK RECOMMENDATION: 1.Approve Amendment No. 1 to Contract No. C43390 with Idea Peddler in an amount not to exceed $30,000 for one-time market research to support the evolution of the City’s tourism advertising campaign. 2. Authorize the City Manager to execute the Amendment and any documents necessary to effectuate and implement the actions taken herewith. BACKGROUND/ANALYSIS: Strategic Plan: The City’s marketing program supports the following specific objectives from the City’s Strategic Plan: •Tourism & Marketing Priority No. 3: Attract new and developing travel and tourism markets. •Tourism & Marketing Priority No. 4: Support the City’s tourism industry through enhancement of its marketing efforts with an allocation of additional City resources, the development of partnerships, and coordination of existing efforts. Commission Recommendation: At its regular meeting of October 4, 2022, the Marketing Committee approved the proposal to conduct market research in support of the next iteration of the City’s tourism ad campaign, Find Your Happy Pace. Project Description: The City supports the tourism industry and local business through implementation of a comprehensive marketing program, including an advertising campaign that promotes the City as a desirable travel destination. The current advertising campaign was developed in 2019 by the City’s creative agency, Idea Peddler (agency), based on consumer research that helped define the City’s brand challenges when compared to competitive destinations. With the pandemic interruption of tourism travel there is consensus among the agency, staff, and the Marketing Committee that the Happy Pace campaign is still viable. However, the travel landscape and consumer trends have evolved over the past few years. This is a strategic moment to conduct a new round of consumer research, to assure that the evolution of the Happy Pace campaign aligns with today’s marketplace. Item 1H-1 City of Palm Desert Authorize Market Research as Extra Work for Idea Peddler Page 2 of 2 The goal of this research project is to provide actionable insights specific to Palm Desert that will enable Idea Peddler to evolve the ad campaign. Strategic insights collected will include: • The campaign message: Is the intended audience taking away the “right” message? • The campaign content: Is the message relevant to the target audience? Is it enticing? • The campaign execution: Is the message presented in a relevant and relatable manner? The proposed research aims to gather these insights through online interviews with focus groups comprising participants in Los Angeles, Orange County, and San Diego who match the City’s target audience. Utilizing existing data gathered over the past several years of the campaign, a professional research firm guided by Idea Peddler will assist in the selection of participants who match that target set and guide the focus group sessions. These participants will be interviewed in small groups of three or four respondents in 90-minute sessions, with nine total sessions: three each focused on San Diego, Orange County, and Los Angeles. The insights gained through this research will be reported back to the Marketing Committee and will be used in conjunction with existing campaign data to guide the next iteration of the campaign and to inform the development of this year’s media plan. FINANCIAL IMPACT: Funds in the amount of $30,000 for this one-time expense were allocated in the Fiscal Year 2022-2023 budget in Marketing Prof-Other, Account No. 1104417-4309000. No additional fiscal impact is created by this request. REVIEWED BY: Department Director: Eric Ceja Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENT: 1. Contract C43390 2. Amendment No. 1 to Contract C43390 Item 1H-2 Item 1H-3 Item 1H-4 Item 1H-5 Item 1H-6 Item 1H-7 Item 1H-8 Item 1H-9 Item 1H-10 Item 1H-11 Item 1H-12 Item 1H-13 Item 1H-14 Item 1H-15 Item 1H-16 Item 1H-17 Item 1H-18 Item 1H-19 Item 1H-20 Item 1H-21 Item 1H-22 Item 1H-23 Item 1H-24 Item 1H-25 Item 1H-26 Item 1H-27 Item 1H-28 Contract No. C43390 AMENDMENT NO. 1 TO THE PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF PALM DESERT AND IDEA PEDDLER 1. Parties and Date. This Amendment No. 1 to the Professional Services Agreement is made and entered into as of this 27TH day of October, 2022, by and between the City of Palm Desert (“City”) and Idea Peddler, a Texas Limited Liability Corporation, with its principal place of business at 106 E 6th St, Ste 900- 937, Austin, TX 78701. City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.” 2. Recitals. 2.1 Agreement. The City and Consultant have entered into an agreement entitled “Professional Services Agreement” dated June 23, 2022 (“Agreement” or “Contract”) for the purpose of retaining the marketing and creative services of Consultant. 2.2 Amendment. The City and Consultant desire to amend the Agreement to include additional compensation in the amount of $30,000 for the purpose of conducting market research to be completed by December 31, 2022. 2.3 Amendment Authority. This Amendment No. 1 is authorized pursuant to Section titled “Compensation” which allows for the authorization of Extra Work. 3. Terms. 3.1 Compensation. Section titled “Compensation” of the Agreement is hereby amended in its entirety to read as follows: Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed Seven Hundred Thousand Dollars ($700,000.00) without written approval of the City Council or City Manager, as applicable. 3.2 Continuing Effect of Agreement. Except as amended by this Amendment No. 1, all other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 1. From and after the date of this Amendment No. 1, whenever the term “Agreement” or “Contract” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 1. 3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 1. 3.4 Severability. If any portion of this Amendment No. 1 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.5 Counterparts. This Amendment No. 1 may be executed in duplicate originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same Item 1H-29 Contract No. C43390 Page 2 of 3 Revised 11-2-20 BBK 72500.00001\32445060.1 instrument. [SIGNATURES ON FOLLOWING PAGE] Item 1H-30 Contract No. C43390 Page 3 of 3 Revised 11-2-20 BBK 72500.00001\32445060.1 SIGNATURE PAGE FOR AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF PALM DESERT AND IDEA PEDDLER, LLC IN WITNESS WHEREOF, the Parties have entered into this Amendment No. 1 to the Professional Services Agreement as of the day and year first above written. CITY OF PALM DESERT Approved By: L. Todd Hileman, City Manager Attested By: __ Anthony J. Mejia, City Clerk Approved As To Form: ________________________________ Best Best & Krieger LLP City Attorney IDEA PEDDLER, LLC Approved By: Cimin Ahmadi-Cohen, CEO QC: _________ Review Insurance: _________ __________ Initial Review Final Review Item 1H-31 [This page has intentionally been left blank.] Page 1 of 3 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Bertha A. Gonzalez, Senior Management Analyst Andy Ramirez, Deputy Director of Public Works REQUEST: APPROVE AN AGREEMENT WITH CASC ENGINEERING AND CONSULTING, INC., FOR MS4 PERMIT INSPECTIONS AND NPDES SUPPORT SERVICES IN THE AMOUNT OF $50,000 PER FISCAL YEAR RECOMMENDATION: 1.Approve a three (3) year agreement with CASC Engineering and Consulting, Inc., for MS4 Permit Inspections and NPDES Support Services in the amount of $50,000 per fiscal year. 2.Authorize the City Manager or his designee to review and execute change orders for unanticipated conditions, per Section 3.30.170 Section A of Ordinance No. 1335. 3.Authorize the City Manager to execute said agreement and up to two one-year contract amendments/extensions. BACKGROUND/ANALYSIS: Authorized by the Clean Water Act, the National Pollutant Discharge Elimination System (NPDES) permit program controls water pollution by regulating point sources that discharge pollutants into waters of the United States. The NPDES Municipal Storm Water Permitting Program regulates storm water discharges from municipal separate storm sewer systems (MS4s). Per the requirements of the MS4 permit, the City must conduct commercial/industrial inspections of businesses each year. Not securing this permit or complying with its requirements could lead to violations or fines. Thus, in August of 2020, staff requested proposals for MS4 inspections services and received two proposals. After a careful analysis, staff determined that CASC Engineering and Consulting (CASC Engineering), Inc., had the most experience with MS4 permit, and therefore, awarded an agreement in an amount not to exceed $10,000 to perform said inspections. In July of 2021, when the agreement transitioned completely under Public Works, staff discovered the need for a more comprehensive scope of services that included assistance with the annual report, construction site inspections, municipal facility annual inspections, investigations, and data management. Therefore, in August of 2021, staff entered into a contract with CASC Engineering to allow for these services and provide up to 183 annual inspections. The contract, which expired September 30, 2022, aimed to eliminate the need to hire another full-time staff member while effectively complying with the Clean Water Act. For this reason, staff requests approval to contract with CASC Engineering for a term of three years, commencing November 1, 2022. Project Description: Item 1I-1 City of Palm Desert Approve an agreement with CASC Engineering and Consulting, Inc. Page 2 of 3 Through this contract, CASC will assist staff with the following: • TASK 1 - RESTAURANT/COMMERCIAL/INDUSTRIAL MS4 INSPECTIONS Currently, the City's Inspection Inventory consists of 510 facilities. There are 270 facilities that are classified as commercial or industrial, and 240 facilities that are classified as food/restaurant. Commercial or industrial facilities are required to be inspected twice during the 5-year Permit term. Food/restaurant facilities are required to be inspected once during the 5-year Permit term. To comply with the Permit's inspection requirements, CASC will have an annual target inspection goal of 108 commercial or industrial facilities and 48 restaurant facilities, for a total of 156 inspections annually. • TASK 2 - ANNUAL REPORTING CASC will provide Annual Reporting Services on a time and material basis per the Schedule of Rates (Attachment B) and coordinate with the City to obtain annual NPDES Program documentation. CASC will review documentation obtained and prepare a draft of the annual report for City review and an updated certification page for City processing and signature. Upon receipt of review comments from the City, CASC will finalize the annual report and coordinate with City for submittal to Riverside County Flood Control and Water Conservation District. All final annual report forms will be supplied to the City in digital format. • TASK 3 - LOW PRIORITY CONSTRUCTION SITE INSPECTIONS The MS4 Permit requires that Permittees conduct stormwater compliance inspections of construction activities that result in a land disturbance of greater than or equal to one acre or more and from construction activities that disturb less than one acre but are part of a larger common plan of development or sale. CASC will perform compliance inspections per the requirements of Section 5.0 of the SWMP. • TASK 4 - NPDES SUPPORT SERVICES CASC's reputation is one of technical knowledge and field understanding combined with cost-effective approaches that meet the regulatory requirements in a reasonable manner. CASC strives to provide its clients solutions to water quality challenges that are sensible, practical, and performed by experienced professionals. CASC has assisted multiple co-permittees in the Whitewater River Region with annual reporting services and construction inspections. Their extensive experience with the MS4 Permit annual reporting has proven to be a great asset to City staff since the initial of the agreement. They have developed an inspection schedule specifically to the City needs and perform inspections and permit reporting up to the City standards. Therefore, following Ordinance 1335, Section 3.30.160(I) Best interest of the City, which states “when the City Council or City Manager authorizes the award and execution of contracts, subject to the dollar limits consistent with this chapter without competitive bidding provided that the City Council or City Manager finds that such award is in the best interest of the city, or of the public health, safety , and welfare”, staff requests approval to enter into contract with CASC Engineering for a term of three years commencing November 1, 2022, with an option of two one-year extensions in the amount of $50,000 per fiscal year. Item 1I-2 City of Palm Desert Approve an agreement with CASC Engineering and Consulting, Inc. Page 3 of 3 FINANCIAL IMPACT: The cost for this agreement will be shared between Development Services and the Public Works Department under the Professional Services Account No. 1104470-4309000 ($20,000) and 1104300-4309000 ($30,000). Both amounts were included in the City’s approved operations budget; therefore, there is no further financial impact to the general fund. REVIEWED BY: Department Director: Martin Alvarez Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENTS: 1. Professional Services Agreement 2. CASC Proposal Item 1I-3 Contract No. ____________ CITY OF PALM DESERT PROFESSIONAL SERVICES AGREEMENT CASC ENGINNERING AND CONSULTING, INC. 1. PARTIES AND DATE. This Agreement is made and entered into this 27th day of October, 2022, by and between the City of Palm Desert, a municipal corporation organized under the laws of the State of California with its principal place of business at 73-510 Fred Waring Drive, Palm Desert, California 92260- 2578, County of Riverside, State of California (“City”) and CASC Engineering and Consulting, Inc., a Corporation, with its principal place of business at 77-564 Country Club Drive, Suite 211, Palm Desert, CA 92211 ("Consultant"). City and Consultant are sometimes individually referred to herein as "Party" and collectively as "Parties." 2. RECITALS. 2.1 Project. The City is a public agency of the State of California and is in need of professional services for the following project: MS4 PERMIT INSPECTIONS AND NPDES SUPPORT SERVICES (hereinafter referred to as “the Project”). 2.2 Consultant. Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant is duly licensed and has the necessary qualifications to provide such services. 3. TERMS. 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. 3.1.2 Term. The term of this Agreement shall be from November 1, 2022, to October 31, 2025, unless earlier terminated as provided herein. The City shall have the unilateral option, at its sole discretion, to renew this Agreement automatically for no more than two additional one-year terms. Consultant shall complete the Services within the term of this Agreement and shall meet any other established schedules and deadlines. 3.2 Responsibilities of Consultant. 3.2.1 Independent Contractor; Control and Payment of Subordinates. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Any personnel performing the Services shall not be employees of City and shall at all times be under Consultant's exclusive direction and control. Neither City, or any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Item 1I-4 Contract No. ____________ Consultants officers, employees or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 3.2.2 Schedule of Services. Consultant shall perform the Services in a prompt and timely manner in accordance with the Schedule of Services set forth in Exhibit "A" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services expeditiously. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City. 3.2.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. The key personnel for performance of this Agreement are as follows: Melanie Sotelo, Director of Environmental Services. 3.2.5 City's Representative. The City hereby designates Andy Ramirez, Deputy Director of Public Works, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Consultant but not the authority to enlarge the scope of Services or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the scope of services or change the Consultant's total compensation subject to the provisions contained in Section 3.3 of this Agreement. Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee. 3.2.6 Consultant's Representative. Consultant hereby designates Melanie Sotelo, Director of Environmental Services, or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times. 3.2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the Item 1I-5 Contract No. ____________ standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project. 3.2.9 Period of Performance. Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Consultant shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibit “A” attached hereto, or which may be separately agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Performance Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage. Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non-performing Party. For purposes of this Agreement, such circumstances include a Force Majeure Event. A Force Majeure Event shall mean an event that materially affects a Party’s performance and is one or more of the following: (1) Acts of God or other natural disasters; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the services); (4) strikes and other organized labor action occurring at the site and the effects thereof on the services, only to the extent such strikes and other organized labor action are beyond the control of Consultant and its subcontractors, and to the extent the effects thereof cannot be avoided by use of replacement workers; and (5) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of a public agency applicable to the services and Agreement. Should a Force Majeure Event occur, the non-performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. Force Majeure Events and/or delays, regardless of the Party responsible for the delay, shall not entitle Consultant to any additional compensation. Notwithstanding the foregoing in this section, the City may still terminate this Agreement in accordance with the termination provisions of this Agreement. 3.2.10 Laws and Regulations; Employee/Labor Certification. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services and shall give Item 1I-6 Contract No. ____________ all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement. All violations of such laws and regulations shall be grounds for the City to terminate the Agreement for cause. 3.2.10.1 Employment Eligibility; Consultant. Consultant certifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time and shall require all subconsultants and sub-subconsultants to comply with the same. Consultant certifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement and shall not violate any such law at any time during the term of the Agreement. 3.2.10.2 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 3.2.10.3 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. 3.2.11 Insurance. 3.2.11.1 Minimum Requirements. Without limiting Consultant’s indemnification of City, and prior to commencement of the Services, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form that is satisfactory to City. (A) General Liability Insurance. Consultant shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted. (B) Automobile Liability Insurance. Consultant shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non- owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident. The City’s Risk Manger may modify this requirement if it is determined that Consultant will not be utilizing a vehicle in the performance of his/her duties under this Agreement. Item 1I-7 Contract No. ____________ (C) Professional Liability (Errors & Omissions) Insurance. Consultant shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this Agreement and Consultant agrees to maintain continuous coverage through a period no less than three years after completion of the Services required by this Agreement. (D) Workers’ Compensation Insurance. Consultant shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000). Consultant shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of the City, its officers, agents, employees, volunteers and representatives. (E) Umbrella or Excess Liability Insurance. Consultant may opt to utilize umbrella or excess liability insurance in meeting insurance requirements. In such circumstances, Consultant shall obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability and employer’s liability. Such policy or policies shall include the following terms and conditions: (1) A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; (2) Pay on behalf of wording as opposed to reimbursement; (3) Concurrency of effective dates with primary policies; and (4) Policies shall “follow form” to the underlying primary policies. (5) Insureds under primary policies shall also be insureds under the umbrella or excess policies. (F) Fidelity Coverage. Reserved. (G) Cyber Liability Insurance. Reserved. If coverage is maintained on a claims-made basis, Consultant shall maintain such coverage for an additional period of three (3) years following termination of the Agreement. 3.2.11.2 Other Provisions or Requirements. (A) Proof of Insurance. Consultant shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by City’s Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Item 1I-8 Contract No. ____________ Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. (B) Duration of Coverage. Consultant shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Services hereunder by Consultant, his/her agents, representatives, employees or subconsultants. (C) Primary/Non-Contributing. Coverage provided by Consultant shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City before the City’s own insurance or self- insurance shall be called upon to protect it as a named insured. (D) City’s Rights of Enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications, or is canceled and not replaced, City has the right, but not the duty, to obtain the insurance it deems necessary, and any premium paid by City will be promptly reimbursed by Consultant, or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may terminate this Agreement. (E) Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the City’s Risk Manager. (F) Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against the City, its elected or appointed officers, agents, officials, employees, volunteers, and representatives or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against the City, its elected or appointed officers, agents, officials, employees, volunteers and representatives and shall require similar written express waivers and insurance clauses from each of its subconsultants. (G) Enforcement of Contract Provisions (non estoppel). Consultant acknowledges and agrees that any actual or alleged failure on the part of the City to inform Consultant of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. (H) Requirements Not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Consultant maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits Item 1I-9 Contract No. ____________ maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. (I) Notice of Cancellation. Consultant agrees to oblige its insurance agent or broker and insurers to provide City with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage. (J) Additional Insured Status. General liability, automobile liability, and if applicable, pollution liability and cyber liability, policies shall provide or be endorsed to provide that the City and its officers, officials, employees, agents, volunteers and representatives shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement, under such policies. This provision shall also apply to any excess/umbrella liability policies. (K) Prohibition of Undisclosed Coverage Limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. (L) Separation of Insureds. A severability of interests provision must apply for all additional insureds ensuring that Consultant’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability exclusions. (M) Pass Through Clause. Consultant agrees to ensure that its subconsultants, subcontractors, and any other party involved with the Project who is brought onto or involved in the Project by Consultant, provide the same minimum insurance coverage and endorsements required of Consultant. Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Consultant agrees that upon request, all agreements with subconsultants, subcontractors, and others engaged in the Project will be submitted to City for review. (N) City’s Right to Revise Specifications. The City and the City’s Risk Manager reserve the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving the Consultant ninety (90) days advance written notice of such change. If such change results in additional cost to the Consultant, the City and Consultant may renegotiate Consultant’s compensation. If the City reduces the insurance requirements, the change shall go into effect immediately and require no advanced written notice. (O) Self-Insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by City. (P) Timely Notice of Claims. Consultant shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Consultant’s performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. Item 1I-10 Contract No. ____________ (Q) Additional Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Services. 3.2.12 Water Quality Management and Compliance. Consultant shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the California Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant must comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges. Failure to comply with laws, regulations, and ordinances listed in this Section is a violation of federal and state law. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the work assigned to them without impacting water quality in violation of the laws, regulations and policies of this Section. 3.3 Fees and Payments. 3.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "B" attached hereto and incorporated herein by reference. The total compensation shall not exceed Fifty Thousand Dollars and 00/100 ($50,000) per fiscal year without written approval of the City Council or City Manager, as applicable. 3.3.2 Payment of Compensation. Consultant shall submit to City monthly invoices which provide a detailed description of the Services and hours rendered by Consultant. City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges. If the City disputes any of Consultant's fees, the City shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth therein. Consultant shall submit its final invoice to City within thirty (30) days from the last date of provided Services or termination of this Agreement and failure by the Consultant to submit a timely invoice may constitute a waiver of its right to final payment. Payment shall not constitute acceptance of any Services completed by Consultant. The making of final payment shall not constitute a waiver of any claims by the City for any reason whatsoever. 3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City or included in Exhibit "B" of this Agreement. 3.3.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City. 3.4 Labor Code Requirements. 3.4.1 Prevailing Wages. Consultant is aware of the requirements of California Item 1I-11 Contract No. ____________ Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the City, its officials, officers, employees, agents, volunteers and representatives, free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. 3.4.2 Registration/DIR Compliance. If the Services are being performed on a public works project of over $25,000 when the project is for construction, alteration, demolition, installation, or repair work, or a public works project of over $15,000 when the project is for maintenance work, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants. This Project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. Any stop orders issued by the DIR against Consultant or any subconsultant that affect Consultant’s performance of Services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees, agents, volunteers and representatives free and harmless from any claim or liability arising out of stop orders issued by the DIR against Consultant or any subconsultant. 3.4.3 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code and agrees to comply with such provisions before commencing the performance of the Services. 3.5 Accounting Records. 3.5.1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. Item 1I-12 Contract No. ____________ 3.6 General Provisions. 3.6.1 Termination of Agreement. 3.6.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those Services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause. The rights and remedies of the City provided in this section shall not be exclusive and are in addition to any other rights and remedies provided by law, equity or under this Agreement. 3.6.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request. 3.6.1.3 Early Termination. Notwithstanding any provision herein to the contrary, if for any fiscal year of this Agreement the City Council fails to appropriate or allocate funds for future payment under the Agreement after exercising reasonable efforts to do so, the City may upon seven (7) days’ written notice, order work on the Project to cease. Upon termination, Consultant shall be compensated only for those Services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. 3.6.1.4 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.6.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: Consultant: CASC Engineering and Consulting, Inc. 77-564 Country Club Drive, Suite 211 Palm Desert, CA 92211 ATTN: Melanie Sotelo, Director of Environmental Services City: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 ATTN: Andy Ramirez, Deputy Director of Public Works Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.6.3 Ownership of Materials and Confidentiality. Item 1I-13 Contract No. ____________ 3.6.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). All Documents & Data shall be and remain the property of City and shall not be used in whole or in substantial part by Consultant on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Project and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents. 3.6.3.2 Subconsultants. Consultant shall require all subconsultants to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by professionals other than Consultant or its subconsultants, or those provided to Consultant by the City. 3.6.3.3 Right to Use. City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project or another project, provided that any such use not within the purposes intended by this Agreement or on a project other than this Project without employing the services of Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless Consultant and its officers, directors, agents and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Consultant shall be responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant. 3.6.3.4 Indemnification – Documents and Data. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers, agents and representatives free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Item 1I-14 Contract No. ____________ Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted. 3.6.3.5 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 3.6.3.6 Confidential Information. The City shall refrain from releasing Consultant’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information. Consultant shall have five (5) working days after receipt of the release notice to give City written notice of Consultant's objection to the City's release of Proprietary Information. Consultant shall indemnify, defend and hold harmless the City, and its officers, directors, employees, agents, volunteers and representatives from and against all liability, loss, cost or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of an objection notice unless either: (1) Consultant fails to fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non-appealable order by a court of competent jurisdiction requires that City release such information. 3.6.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 3.6.5 [Reserved] 3.6.6 Indemnification. 3.6.6.1 To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, agents, and representatives free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subconsultants or agents in connection with the performance of the Consultant’s Services, the Project or this Agreement, including without limitation the payment of all expert witness fees, attorney’s fees and other related costs and expenses except such loss or damage caused by the sole negligence or willful misconduct of the City. Consultant's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted Item 1I-15 Contract No. ____________ to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, volunteers or representatives. 3.6.6.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault. 3.6.7 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. 3.6.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Riverside County. 3.6.9 Time of Essence. Time is of the essence for each and every provision of this Agreement. 3.6.10 City's Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project. 3.6.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties. 3.6.12 Assignment; Subcontracting. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination. Consultant shall not subcontract any portion of the Services required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. 3.6.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, volunteers and representatives except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 3.6.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. Item 1I-16 Contract No. ____________ 3.6.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. 3.6.16 No Third-Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. 3.6.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.6.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.6.19 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 3.6.20 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. 3.6.21 Survival. All rights and obligations hereunder that by their nature are to continue after any expiration or termination of this Agreement, including, but not limited to, the indemnification obligations, shall survive any such expiration or termination. [SIGNATURES ON NEXT PAGE] Item 1I-17 Contract No. ____________ SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT BY AND BETWEEN THE CITY OF PALM DESERT AND CASC ENGINEERING AND CONSULTING, INC. IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written. CITY OF PALM DESERT By: L. TODD HILEMAN CITY MANAGER ATTEST: By: Anthony J. Mejia City Clerk APPROVED AS TO FORM: By: Best Best & Krieger LLP City Attorney CASC ENGINEERING AND CONSULTING, INC. A CORPORATION By: Its: Printed Name: By: Its: Printed Name: QC Insurance: __________ __________ Initial Review Final Approval Item 1I-18 Contract No. ____________ EXHIBIT "A" SCOPE OF SERVICES & SCHEDULE OF SERVICES REFERENCE CASC ENGINEERING AND CONSULTING PROPOSAL PAGES 1 THRU 4 Item 1I-19 EXHIBIT "B" COMPENSATION REFERENCE CASC ENGINEERING AND CONSULTING PROPOSAL PAGES 5 THRU 7 In the event that this Agreement is renewed pursuant to Section 3.1.2, the rates set forth above may be increased or reduced each year at the time of renewal, but any increase shall not exceed the Consumer Price Index, All Urban Consumers, Los Angeles-Riverside-Orange Counties. Item 1I-20 City of Palm Desert August23 ,2022 Page 2 • Standard inspections are conducted with a facility representative , which is key for enforcing the goals of the stormwater inspection program and providing public education regarding all potential compliance issues that may be associated with that facility. CASC assumes all inspections will be conducted using standard inspection protocols, as follows: o The inspector will meet with the facility representative, conduct a walk-through of the facility, and identify practices that may result in an illicit discharge to t he storm drain system. If requested , a Spanish speaking inspector will be made available to conduct inspections with a facility representative . o Non-compliance areas will be noted on the inspection form. If a follow-up inspection is required , it will be recorded on the inspection form. o The inspector will obtain photos of instances of non-compliance, as well as general photos of site activities . o If applicable, the inspector will then coordinate with the facility representative to schedule a follow-up inspection. Follow-up inspections may be performed either digitally or in-person depending on the issues of non-compliance observed during the inspection (See follow-up inspections sections below). o Recommendations will be made to the facility representative for alternate met hods of bringing the facility into compliance. o The digital inspection report will be completed by the inspector and uploaded to a share folder for the City's use and review. A copy of the form will be emailed to the facility representative if an email is provided. o Industrial facilities subject to coverage under the Industrial General Stormwater Permit (IGP) will be identified and the inspector will verify the facility operator has a current Waste Discharge Identification Number (WDID) or a current No Exposure Certification (NEC). If the industrial facility has not obtained IGP coverage the inspector will notify the owner or owner's representative and provide information on obtaining coverage. CASC will notify the City of potential non-filers to report to the Board. o As part of the facility inspection, CASC inspectors will distribute busi ness-specific educational materials to the business and note that outreach materials were provided in the inspection report . • When feasible and/or requested by the City, CASC will perform modified inspections to comply with any pandemic restrictions that may be in place at the time inspections are conducted. CASC is sensitive to the impacts of the current and future environment on business owners under these restrictions and will work with facilities that may need to address any compliance issues noted during inspections. Modified inspections may be conducted using the following methods: o Modified inspections will be conducted via a drive-by of the business property and are considered contactless, having no planned contact between the inspector and business owner. If the inspector can maintain a safe distance, the inspector may exit their vehicle for closer examination of the facility. If an item of concern is confirmed during the inspection, the inspector will notify the City to directly contact the operator or owner of the facility . Note: Due to the size and potential threat to stormwater, modified inspections are not recommended for industrial facilities. CASC or the City will contact the Item 1I-22 City of Palm Desert August23,2022 Page 3 owner/operator of the industrial facil ity t o schedule an appointment t o cond uct th e inspection. In dustrial inspections wi ll receive a s tandard inspection , fo ll owing all safe- d ist ancing measures. Digital Follow-up Inspections (Re-Inspections) CASC proposes the opti on fo r certai n follow-up i nspections to be cond ucted v ia d igi ta l format (i.e., email). Certa in food facil it ies and hazardous materi a ls faci lit ies that a re found to contain minor compl iance i ssues, which may be repaired or addressed, and th e n feasibly docu mente d th rough p hotographic and other evidence, may demonstrat e compliance through an email follow-up inspection. CASC i nspectors will work with site owners or representat ives to allow an email submittal of compli a nce documentation that w ill be rev iewed and documented on t he inspection fo rm . By providing the option of d igital follow-up inspections, certain facil ities will be ab le to demonstrate th at noted issues have bee n bro ug ht int o co mpl iance w ithout impacting business day activ iti es. • Faciliti es w ill be requ i red to submit d igital documentation (e.g., photos, rece ipts, etc.) to the inspector via email wi thin 1 t o 2 weeks. Implementation of corrective actions will be documented on the inspecti on form . An email will be sent to the owner acknowledging the deficie nc ies have been corrected a nd no further actio n is required. If the owner does not comply wi th the request, a recommendation for an in-person, fie ld follow-up inspection will be given to City Code Enforcement. Standard Follow-Up Inspections Sit es th at the inspecto r notes as having s ignificant deficiencies, or a faci lity owner or representative that c hooses not to document issues via email, wi ll requ ire a follow-up inspection to be conducted onsite a t the facility. Based o n CASC's inspection history of the City, CASC estimates approximately 15% of the in vento ried facil itie s req u ire follow-u p inspections. CASC p roposes to conduct follow-up inspections. Follow-up inspections will focus on compliance i ss ues ci ted in th e in itial i nspection. If the City chooses to have the Code Enforcement Department cond uc t t he sta ndard follow-up inspections, CASC w ill provide Code Enforcement with copies of inspection reports and photos fo r sites req uiring th ese types of fo ll ow-up inspections. TASK 2 • ANNUAL REPORTING CASC has extensive experience in MS4 Pe rm it annual re port ing a nd has assisted multiple Co- Permittees in th e Wh itewater River Region with annual reporting services. CASC proposes to provide A nn ua l Reporting Services on a t ime and material basis per the Schedule of Rates (Attachment B). CASC will coordinate with the City to obtain NPDES Program documentation fo r the 2021 -2022 fiscal yea r . CASC wi ll review documentation obt ai ned a nd prepare a draft 202 1-2022 annual report for City review. The annual report fo rmat wi ll be consistent wi th the p rior yea r's report fo rmat. CASC w ill also p repare a n updat ed certificatio n page for City processing a nd s ignatu re. Upon receipt of review comments from the City, CASC will fi nalize the an nual report and coordinate with City fo r submittal to Riverside County Flood Control a nd Water Conservation Distr ict. All final annual report form s will be suppli ed to the City in d igital fo rmat. TASK 3-LOW PRIORITY CONSTRUCTION S ITE IN SPECTIONS The MS4 Permit requ ires that Permittees conduct st ormwater compliance inspections of constru ction activiti es th at resu lt in a la nd d isturbance of g reater than or equal to one acre or Item 1I-23 City of Palm Desert August 23 , 2022 Page 4 more, and from construction activities that disturb less than one acre but are part of a larger common plan of development or sale . CASC will perform compliance inspections per the requirements of Section 5.0 of the SWMP. Based on the active construction sites listed in SMARTS as of today, CASC assumes that approximately 25 sites may potentially be low priority sites. Low priority sites require a total of 2 inspections per fiscal year. CASC estimates a total of 50 low priority construction site inspections will need to be conducted . Note: Construction sites with deficiencies will require follow-up inspections. The City's Code Enforcement Division will conduct all construction site follow-up inspections. CASC will provide Code Enforcement with copies of inspection reports and photos for construction sites requiring follow-up inspections. Additionally, the City's Code Enforcement will conduct all high priority inspections to comply with Permit requirements. TASK 4 -NPDES SUPPORT SERVICES CASC's reputation is one of technical knowledge and field understanding combined with cost- effective approaches that meet the regulatory requirements in a reasonable manner. CASC strives to provide our clients solutions to water quality challenges that are sensible, practical , and performed by experienced professionals. CASC proposes to provide NPDES Support Services on a time and material basis per the Schedule of Rates to include but not limited to: • Data Management o Assistance with additional data management services upon request. o Modification of inspection forms • SMARTS assistance • Permitting and NPDES consultation • Monthly Status Meetings with the City • Optional Services (available on request) -In addition to the services outlined in the Proposed Scope of Services, CASC can also provide additional NPDES related professional support services, as needed, which may include: o Development of GIS and Mobile applications for field inspections o SUAS (Drone) Services o Training via webinar for groups or one-on-one Deliverables CASC will upload all digital copies of inspection forms with photos to a share drive within one week of the completion of all NPDES inspections. Best regards, Melanie Sotelo MSE, ENV SP, CPESC, CPSWQ, QISP, QSD Director of Environmental Services CASC Engineering and Consulting, Inc. Item 1I-24 City of Palm Desert August23 ,2022 Page 5 Payment Rates and Schedule A budget has been developed for the foll owing tasks with a not to exceed total of $50,000.00. CASC estimates are based o n the unit and hourly rates provided in Attachment "A" a nd Attachment "B". The services of CASC wil l be invoiced monthly. Task Rate Estimated Estimated Task # Activity Schedule Hours Costs Attachment 1 Restaurant/Commercial/Industrial A Unit Cost $32,600.00 MS4 Inspections 2 Annual Reporting B Up to 20 $3,090.00 3 Construction Site Inspections A Unit Cost $10 ,000.00 4 NPDES Support and Database B Up to 30 $4,310.00 Services Total $50,000.00 EXHIBIT B Item 1I-25 City of Palm Desert August 23, 2022 Page 7 ATTACHMENT "B" SCHEDULE OF RATES NPDES Support Services outlined in Task 4 are proposed to be provided on a time and material basis . The table below provides an hourly rate for services proposed for this Project. RATE SCHEDULE Environmental Director $210 Project Manager $180 Assistant Project Manager $155 Senior Inspector $165 Inspector $127 GIS Analyst $116 Project Coordinator/ Clerical $85 REIMBURSABLE EXPENSES The following expenses will be billed at cost plus 15% unless otherwise noted: Outside Services: Includes fees paid to sub-consultants, consultants, analytical laboratories, and other providers of services required for execution of the project. Permits, Applications, and Fees: Includes fees for Notices of Intent (NOi), Notices of Termination (NOT), application fees , submittal fees, permit fees, and other fees required as part of the project and not paid directly by Client. Reproduction Services: Includes blueprinting, copying, printing, and plotting. In-house plots will be billed at $6 .00 per sheet for each client set and for a final in-house review set. B&W / Color copies : $0 .08 / $0 .90 for 8 .5 X 11 and $0 .20 / $1.20 for 11 X 17 . Rental Fees: Includes rental fees paid by the firm, including required vehicles, equipment, and tools required to complete the work. Commercial Delivery Services: Including Express Mail, Federal Express, UPS and independent courier services. In-House Pick-Up and Delivery Services: When provided by the firm, these services will be billed at $48 .00 per hour plus $0.58 per mile round trip, with no additional markup . Travel Expenses: Includes travel expenses incidental to performance of the work. Vehicle mileage will be billed at a rate of $0 .58 per mile with no additional markup . NOTES: Prevailing Wage: Projects and/or portions thereof designated by Client to be subject to Prevailing Wage shall be billed at the regular staff rate or the Prevailing Wage rate, whichever is higher plus a multiplier of approximately 2 .3 to 2 .8 for overhead and profit. The Prevailing Wage rate shall be based upon the Wage Rate Determination issued by California's Director of Industrial Relations for the locality and employee classification at the time the work is performed. Please contact CASC for specific project prevailing wage rates . Item 1I-27 [This page has intentionally been left blank.] Page 1 of 3 PALM DESERT HOUSING AUTHORITY STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Jessica Gonzales, Housing Manager Chris Gerry, Project Manager REQUEST: AWARD A CONTRACT FOR THE DESIGN-BUILD OF THE TAOS PALMS TRELLIS AND ENTRANCE STRUCTURE REHABILITATION TO DOUG WALL CONSTRUCTION, INC., OF BERMUDA DUNES, CALIFORNIA, IN THE AMOUNT OF $1,067,588.35 (PROJECT NO. 813-21) RECOMMENDATION: 1. Award a Contract for the design-build of the Taos Palms Trellis and Entrance Structure Rehabilitation to Doug Wall Construction, Inc., of Bermuda Dunes, California, in the amount of $1,067,588.35 (includes $22,500 add alternate). 2. Authorize the Finance Director to set aside approximately 20% contingency of $213,520 for unforeseen conditions. 3. Authorize the Executive Director or designee to review and approve written requests for the use of the contingency, to take any necessary actions to facilitate the agreement, to execute the agreement and any documents necessary to effectuate the actions taken herewith. 4. Authorize the Executive Director or designee to execute the Notice of Completion (NOC) and the Secretary to file the NOC, upon satisfactory completion of the Project. Funds are available in the Fiscal Year 2022-23 Housing Authority Capital Replacement Budget. BACKGROUND/ANALYSIS: Approval of this request allows Doug Wall Construction, Inc., (Contractor) to proceed with the design-build of the Taos Palms Trellis and Entrance Structure Rehabilitation (Project). Staff recommends awarding a contract to the Contractor for the Project in the total amount of the proposal of $1,067,588.35 for the base contract and add alternate with contingency for any additional unforeseen conditions necessary to be completed not to exceed $213,520. The base contract includes the add alternate of $22,500 for monument signage, which will be determined if necessary, during the design phase. The Palm Desert Housing Authority (Authority) owns and manages Taos Palms Apartments, which is a 16-unit multi-family apartment complex located at 44830 Las Palmas Avenue (Property). The Property consists of four single buildings on approximately 32,300 square feet (including the courtyard and parking areas). The Property is also a gated community with telephone entry access, pool, laundry facility and privacy railings. The building exteriors include an entrance structure, trellis structures and decorative elements. In August 2019, the Authority contracted with B.G. Structural Engineering to perform a structural evaluation of existing structures at the Property. As a result, deficiencies and concerns were Item 2A-1 City of Palm Desert Taos Palms Trellis and Entrance Structure Rehabilitation Page 2 of 3 identified in the structural evaluation. As described in the report, exterior elements at the Property have deteriorated over time and now require replacement or repair. Those exterior elements include courtyard trellis structures, side yard trellis structures, entry structures, and other decorative elements. Design-Build Project Delivery The Authority typically implements the design-bid-build process to construct capital improvement projects, in which the Authority contracts separately for design and construction services. For the Project, the Authority proposes the design-build process, in which one entity – the design- build team – works under a single contract with the Authority to provide design and construction services. Some of the benefits typically include faster project delivery due to collaborative project management; cost savings due to efficiency and innovation; and better-quality construction due to focusing on project needs and not necessarily just minimum design standards. Request for Proposal On June 3, 2022, staff issued a request for proposal (RFP) for the design-build of the Project. The Authority received one proposal from the Contractor by the deadline on July 8, 2022. The initial proposal was for approximately $1,603,000, which was approximately $600,000 overbudget when including contingency. Since receipt of the proposal, staff has been working with the Contractor on identifying preliminary ways to value engineer the Project to be within budget and address the deficiencies within the report. In an effort to bring the Project within budget, address needs in the report, and provide longevity of these improvements, the recommended option is the use of Alumiwood (rather than wood) as the primary material throughout the Project. Strategic Plan: This request does not apply to a specific strategic plan goal. Commission Recommendation: The Housing Commission recommended this item at its regular meeting on October 12, 2022. FINANCIAL IMPACT: The fiscal impact of this request is the cost of the contract itself in the amount of $1,067,588.35, plus approximately 20% contingency in an amount not to exceed $213,520 (for unforeseen conditions). Funds are available in the Fiscal Year 2022-23 Housing Authority Capital Replacement Budget. This project is eligible for reimbursement from affordable housing bond proceeds. There will be no impact on the General Fund. The funding breakdown for the project is as follows: Item 2A-2 City of Palm Desert Taos Palms Trellis and Entrance Structure Rehabilitation Page 3 of 3 Project Funding Source Description Total Project Cost PDHA Replacement Expenditures Housing Authority Capital Replacement Budget Construction $ 1,045,088.35 Add Alternate $ 22,500.00 20% Contingency $ 213,520.00 Total $ 1,281,108.35 REVIEWED BY: Economic Development Director: Eric Ceja Public Works Director: Martin Alvarez Special Counsel to the Housing Authority: Robert Hargreaves Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo Executive Director: Todd Hileman ATTACHMENTS: A. Site and Project Map (Site address: 44830 Las Palmas Avenue, Palm Desert, Ca 92260) B. Design-Build Agreement with PDHA and Doug Wall Construction, Inc. C. Request For Proposal (Project No. 813-21) Item 2A-3 Location Map Site MapNORTHTaos Palms -44830 Las Palmas Avenue, Palm Desert, CA 92260 Project Location Project Site Item 2A-4 99999.91660\32805910.1 81142.00001\9222119.2 1 DESIGN-BUILD CONTRACT BETWEEN PALM DESERT HOUSING AUTHORITY AND DOUG WALL CONSTRUCTION, INC., FOR TAOS PALMS TRELLIS AND ENTRANCE REHABILITATION This Design-Build Contract (“Contract”) is made and entered into this 27 day of October, 2022 by and between the PALM DESERT HOUSING AUTHORITY, (hereinafter referred to as “Agency”) and DOUG WALL CONSTRUCTION (hereinafter collectively referred to as “Design- Build Entity” or “DBE”). Agency and DBE are sometimes individually referred to as “Party” and collectively as “Parties.” RECITALS A. Agency desires to enter a single project for the turnkey design and construction for the Taos Palms Trellis and Entrance Structure Rehabilitation (“Project”) as set forth in this Contract. Because of the unique nature of the Project, Agency desires to engage a single design-build entity to engineer and implement the Project. B. The DBE submitted a Proposal for the Project, which was selected as providing the best- value for the Project. C. DBE desires to perform and assume responsibility for the provision of the design and construction services, and such other services as required by the Agency on the terms and conditions set forth in this Contract and DBE represents that it is experienced in providing professional planning, design, and construction services to public entities, is appropriately licensed in the State of California to perform such services, and is familiar with the Scope of Work. TERMS 1. Incorporation of Contract Documents. The above referenced recitals are true and correct and are incorporated into this Contract by this reference. This Contract includes and hereby incorporates in full by reference the following Contract Documents, including all exhibits, drawings, specifications and documents therein, and attachments and addenda thereto: (a) Design-Build Contract (b) Attachment 1 to this Contract – Scope of Services (c) Attachment 1-1 to this Contract – Proposal (d) Attachment 2 to this Contract - General Conditions (e) Attachment 3 to this Contract – Special Conditions (f) Attachment 4 to this Contract – Performance Bond (g) Attachment 5 to this Contract – Payment Bond (h) Attachment 6 to this Contract – Rate Schedule (i) Attachment 7 to this Contract – Workers’ Compensation Certification (j) Request for Proposal (“RFP”) and all addenda, attachments and appendices (k) Agency approved Change Orders (l) Completed and approved Construction Documents in accordance with the General Conditions Item 2A-5 Contract No. ___________________ A1-2 2. The DBE’s Basic Obligations; Compensation. The DBE promises and agrees, at its own cost and expense, to furnish to the Agency all design and construction services, labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately complete the Project as described in the Contract Documents (hereinafter the “Scope of Work” of “Work”). Agency shall pay to the DBE as full compensation for the performance of the Contract, subject to any additions or deductions as provided in the Contract Documents, and including all applicable taxes and costs, the sum of one million sixty-seven thousand five-hundred eighty-eight and 35/100 Dollars ($1,067,588.35) (“Contract Price”). Payment shall be made as set forth in the General Conditions. Unless otherwise stated in the Contract Documents, the Contract Price shall pay for all costs and expenses required to design and construct the Project. 3. Standard of Care. The DBE’s performance shall be consistent with the standards set forth in the Contract and the General Conditions. The DBE warrants to Agency that all Design Work will be performed in accordance with the highest professional standards and degree of care applicable to those design professionals who specialize in designing and providing services for projects of the type, scope, quality and complexity of the Project utilizing the Design-Build contracting mode. The DBE warrants to Agency that all labor, materials, equipment and furnishings used in, or incorporated into, the Construction Work will be of good quality, new (unless otherwise required or permitted by the Contract Documents), and all work will be free of liens, claims and security interests of third parties; that the work will be of the highest quality and free from defects and that all work will conform with the requirements of the Contract Documents. The DBE shall supervise, inspect, and direct the Project competently and efficiently, devoting such attention thereto and applying such skills and expertise as may be necessary to perform the Project in accordance with the Contract Documents. The DBE shall be solely responsible for the means, methods, techniques, sequences, and procedures of design and construction of the Project. DBE shall perform, at its own cost and expense and without reimbursement from the Agency, any services necessary to correct errors or omissions which are caused by the DBE’s failure to comply with the standard of care provided for herein. 4. Period of Performance; Liquidated Damages. Time is of the essence. The DBE guarantees that it shall perform and complete all Work required by the Contract Documents for completion by the Project Completion Date. The Project Completion Date shall be sixty (60) calendar days from the commencement date stated in the Notice to Proceed with Construction. The DBE agrees that it shall be liable to the Agency for liquidated damages in an amount of Two Thousand Dollars ($2,000.00) per day for each and every calendar day beyond the Project Completion Date that completion of the Project has not been achieved at the Project Site. If not completed by the Project Completion Date, it is understood that the Agency will suffer damage, and that it is and will be difficult and/or impossible to ascertain and determine the actual damage which the Agency will sustain in the event of and by reason of the DBE’s failure to complete the work, and therefore the DBE shall pay to the Agency the stipulated sum as fixed and liquidated damages and not as a penalty. Any money due or to become due the DBE may be retained to cover liquidated damages. Item 2A-6 Contract No. ___________________ A1-3 5. Approval of Design; Commencement of Construction. (a) The Scope of Work shall consist of two phases: the Construction Document Phase and the Construction Phase. The Agency shall issue a Notice to Proceed for each Phase. (b) The DBE shall commence the Construction Document Phase after receipt of Agency’s Notice to Proceed and complete the Construction Document Phase work within sixty (60) calendar days of the Notice to Proceed date. The design shall consist of preparation of the Construction Documents as set forth in the General Conditions. The Bridging Documents may be utilized to assist in scoping the Project, but responsibility for the design shall rest solely with the DBE. (c) DBE shall submit the following to Agency for approval: (i) Schematic Design; (ii) 50% Construction Documents; and (iii) 100% Construction Documents. (d) The Agency’s review and approval of the design shall not relieve the DBE from its responsibilities under the Contract. Such review shall not be deemed an approval or waiver by the Agency of any deviation from, or of the DBE's failure to comply with, any provision or requirement of the Contract Documents, unless such deviation or failure has been identified as such in writing in the Document submitted by the DBE and approved by the Agency. The Agency Representative, or an Agency Engineer designated to review and approve Construction Documents, shall be authorized to approve the Construction Documents and any amendments or changes to the design. (e) The Contract Schedule shall indicate the time for the Agency to review the proposed Construction Documents and shall provide a reasonable time for review of same, not less than 10 days. DBE shall not be entitled to damages, liquidated or otherwise, for any delays during the Construction Document Phase. (f) DBE shall not commence construction until the Agency approves the completed Construction Documents and issues a Notice to Proceed with Construction. DBE may request a Notice to Proceed with Construction prior to completion of the 100% Construction Documents, and Agency may issue same, provided that DBE shall not construct any portion of the Project until the design of such portion has been approved. The Project Completion Date shall run from the Notice to Proceed with Construction even if issued prior to completion of the 100% Construction Documents. 6. Agency’s Representative. The Agency hereby designates Chris Gerry, or his or her designee, as the person to act as its representative for the performance of this Contract (“Agency’s Representative”). The Agency’s Representative shall be authorized to act as liaison between Agency and the DBE in the administration of this Contract and all work on the Project. The Agency’s Representative shall have the power to act on behalf of the Agency for all purposes under this Contract, including for the purpose of approving the design. Agency may designate new and/or different individuals to act as Agency’s Representative from time to time upon written notice to the DBE. Item 2A-7 Contract No. ___________________ A1-4 7. DBE’s Representative. The DBE hereby designates Doug Wall, or his or her designee, to act as its representative for the performance of this Contract (“DBE’s Representative”). DBE’s Representative shall have full authority to represent and act on behalf of the DBE for all purposes under this Contract. DBE’s Representative shall supervise and direct all work on the Project, using his best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the work pursuant to this Contract. 8. DBE’s Contractor’s License and Registration. The DBE shall have only appropriately licensed contractors performing work on the Project as required by the Business and Professions Code. The DBE (License No. CA #743112) shall act as the licensed contractor for the Project. DBE shall perform all services required under the Contract Documents in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals qualified to perform such services in the same discipline in the State of California, and the DBE shall be fully responsible to the Agency for any damages and/or delays to the Project as specified in the Contract. The licensed contractor shall be registered with the Department of Industrial Relations to perform public work (DIR Registration No. 1000000241). 9. DBE’s Design Professional. The DBE shall name a specific person to act as the Design Professional as described in the General Conditions, subject to the approval of the Agency. The DBE hereby designates Studios 2007, Jerry Dohn (License No.: CA #C21996) to act as the Design Professional for the Project. DBE’s Design Professional shall perform all services required under the Contract Documents in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals qualified to perform such services in the same discipline in the State of California, and the DBE shall be fully responsible to the Agency for any damages and/or delays to the Project as specified in the indemnification provisions of the Contract. Any change in the Design Professional shall be subject to the Agency’s prior written approval, which approval shall not be unreasonably withheld. The new Design Professional shall be of at least equal competence as the prior Design Professional. In the event that Agency and DBE cannot agree as to the substitution of a new Design Professional, the Agency shall be entitled to terminate this Contract as described in the General Conditions. 10. Authority of Signatories. The persons executing this Contract on behalf of their respective Parties represent and warrant that they have the authority to do so under law and from their respective Parties. [SIGNATURES CONTINUED ON NEXT PAGE] Item 2A-8 Contract No. ___________________ A1-5 743112 1000000241 QC: ____________ Insurance: _________ _________ Initial Review Final Review Entered into as of the Effective Date first above written, the Parties hereby execute this Design-Build Contract, as follows: PALM DESERT HOUSING AUTHORITY By: L. TODD HILEMAN, EXECUTIVE DIRECTOR ATTEST: By: ANTHONY J. MEJIA, SECRETARY APPROVED AS TO FORM: By: BEST BEST & KRIEGER LLP DOUG WALL CONSTRUCTION, INC. [IF CORPORATION, TWO SIGNATURES, PRESIDENT OR VICE PRESIDENTS AND SECRETARY OR TREASURER REQUIRED] By: Its: Printed Name: By: Its: Printed Name: _____________________________________ Contractor’s License Number _____________________________________ DIR Registration Number Item 2A-9 Contract No. ___________________ A1-1 ATTACHMENT 1 SCOPE OF SERVICES Item 2A-10 Contract No. ___________________ A1-1-1 ATTACHMENT 1-1 PROPOSAL [PROPOSAL BEGINS ON NEXT PAGE] Item 2A-11 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 PROPOSAL FOR PROJECT NO. 813-21 TAOS PALMS TRELLIS and ENTRANCE STRUCTURE REHABILITATION PREPARED for PALM DESERT HOUSING AUTHORITY PREPARED by DOUG WALL CONSTRUCTION Item 2A-12 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 TABLE of CONTENTS PAGE 1 COVER SHEET 2 TABLE of CONTENTS 3 RFP RESPONSE 4 PROPOSER IDENTIFICATION 5 LETTER of TRANSMITTAL 6 PROPOSED SUBCONTRACTOR LIST 7 TECHNICAL PROPOSAL / QUALIFICATIONS 8 REFERENCES 9 TECHNICAL APPROACH / WORKPLAN 10 EXCEPTIONS and DEVIATIONS 11 PROJECT SCHEDULE PG 1 12 PROJECT SCHEDULE PG 2 13 PROJECT SCHEDULE PG 3 14 PROJECTED BUDGET Item 2A-13 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 JUNE 30, 2022 RESPONSE TO RFP / PROJECT 813-21 ATTN: CHRIS GERRY PROJECT MANAGER 73-510 FRED WARING DRIVE PALM DESERT, CA. 92260 760.776.6335 RE: PALM DESERT HOUSING AUTHORUTY TAOS PALMS TRELLIS and ENTRANCE STRUCTURE REHABILITATION Item 2A-14 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 PROPOSAL RE: PROJECT 813-21 TAOS PALMS TRELLIS and ENTRANCE STRUCTURE REHABILITATION PREPARED BY: DOUG WALL CONSTRUCTION, INC. 78450 AVE 41 BERMUDA DUNES, CA. 92203 OFFICE 760.772.8446 FAX 760.772.9407 STATE CONTRACTORS LICENSE 743112 CLASS A, B, C9, C10, C27 EXPIRES 30 NOV 2023 GEN. LIABILITY INS. GREAT AMERICAN ASSURANCE POLICY GLP4051229 EXPIRES 01 JAN 2023 WORKERS COMP. INSURANCE COMPANY of the WEST POLICY WSD 5035420 05 EXPIRES 01 JAN 2023 AUTO INURANCE CALIFORNIA AUTO INS. CO. POLICY BA 040000059519 EXPIRES 09 JUNE 2023 FEDERAL ID 33-0777123 EDD ACCT. ID 401-4078-2 DIR REGISTRATION 1000000241 EXPIRES 30 JUNE 2024 Item 2A-15 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 LETTER of TRANSMITTAL, RE: PROJECT 813-21 ATTN. CHRIS GERRY PER RFP OUTLINE PROPOSER: DOUG WALL, PRES. DOUG WALL CONSTRUCTION, INC. 760.772.8446 PROJECT CONTACT: TIM McBRIDE, PROJECT SUPERINTENDENT DOUG WALL CONSTRUCTION, INC. 661.361.0207 PROPOSED SUBCONTRACTORS: Cont.’ next page RFP ADDENDA AT THIS TIME NO ADDENDA TO THE RFP HAVE BEEN RECEIVED PERIOD of VALIDITY Per RFP guidelines this proposal shall remain valid for a period of not less than 60 days and not more than 120 days from date of submittal. I hereby attest that all information contained in this transmittal is true and correct and that I am authorized as President of Doug Wall construction to sign and execute any contract resulting from this proposal. Signed _______________________________ Date _________________________ Doug Wall, President Doug Wall Construction, Inc. Item 2A-16 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 PROPOSED SUBCONTRACTORS CONT. Abarca Construction Andrew Abarca, Owner 43425 Croisette Ct., La Quinta, CA. 92253 760.766.5088 PROPOSED SCOPE: Demolition, rough framing, lath and plaster, painting, concrete Avanti Pro Construction Sergio Ramirez Mata, Owner 41430 Redhawk St., Indio, CA. 92201 760.902.8358 PROPOSED SCOPE: Demolition, rough framing, lath and plaster, painting, concrete Conserve LandCare Brent Sprague, General Acct. Manager 72265 Manufacturing Rd., Thousand Palms, CA. 92276 760.250.7639 PROPOSED SCOPE: Demolition, removal and replacement of existing Bougainvillea plants at all decorative / partition walls. Palm Desert Landscaping Lazaro Padilla, Owner PO BOX 752, Thousand Palms, CA 92276 760.808.3542 PROPOSED SCOPE: Demolition, removal and replacement of existing Bougainvillea plants at all decorative / partition walls. Adams Wrought Iron Adam Preciado, Owner 78505 Darby Rd, Bermuda Dunes, CA 92203 760.619.8899 PROPOSED SCOPE: Demo of existing fence and gates, replace with ADA compliant materials and hardware Item 2A-17 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 TECHNICAL PROPOSAL QUALIFICATIONS: Doug Wall Construction is a full service, end to end general contractor. DWC is a midsize firm with 55 highly diversified employees, was incorporated in 1993 and is headquartered in Bermuda Dunes, CA. DWC is consistently a first choice by Coachella Valley’s top developers and has completed over 350 million dollars’ worth of projects since 2010. DWC works and specializes in public works projects, commercial building renovation, education centers and school campuses as well as private sector health care facilities, having recently completed the 40-million-dollar Rinker Orthopedic Building for Eisenhower Medical Center in 2021. Doug Wall, President and CEO of DWC will be involved in every aspect of project oversight, with primary focuses on contract structure, initial budget approval and interface between architect and various city agencies. Tim McBride, Project Superintendent will facilitate the mobilization on sight, collaborate with city agencies as needed, maintain adherence to the baseline construction schedule and budget. Additionally, direct and supervise all onsite subcontractor activities, and communicate as necessary with onsite property management. Item 2A-18 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 REFERENCES: PROJECT EISENHOWER MEDICAL CENTER SCOPE 50,000 SQ FT RINKER ORTHOPEDIC BLDG. VALUE $38,000,000 CONTACT LIZ SINO / 760.578.2356 PROJECT SUNLINE TRANSIT AGENCY SCOPE 37,000 SQ FT ADMINISTRATION BLDG. VALUE $12,600,000 CONTACT TOMMY EDWARDS / 760.343.3456 PROJECT WESSMAN DEVELOPMENT, BLOCK A SCOPE THREE STORY EXPOSED STEEL and GLASS VALUE $8,300,000 CONTACT OCTAVIO FERNANDEZ / 760.408.7036 PROJECT COMMUNITY HEALTH and WELLNESS CENTER SCOPE COMMUNITY CENTER W / 25 METER POOL VALUE $13,200,000 CONTACT RUDY ACOSTA / 760.329.6411 Item 2A-19 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 TECHNICAL APPROACH / WORK PLAN Demo Phase One: Entry structures, West and North side of building. Entry structures, East and South sides of building. Phase Two: Parking Structure South side of building Parking Structure North side of building Decorative corbels and window headers Phase Three: Interior patio structures and landscaping North Building Interior patio structures and landscaping East Building Interior patio structures and landscaping South Building Interior patio structures and landscaping West Building Construction Phase One: Interior Patio Structures Erect Aluma Wood interior patio structures, North Building Erect Aluma Wood interior patio structures, East Building Erect Aluma Wood interior patio structures, South Building Erect Aluma Wood interior patio structures, West Building Phase Two: Exterior Arch. Details, North and South Parking Structures Patch and paint corbel voids throughout Erect Aluma Wood North Structure Erect Aluma Wood South Structure Re-install existing exterior lighting Phase Three: Entry Structures and Gates Erect West entry structure per Architectural detail. Erect Aluma Wood entry structures, North, South and East sides of building. Install new gates and fencing w/ ADA compliant hardware. Prep and Paint exterior building complete Item 2A-20 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 . EXCEPTION / DEVIATIONS None at This Time Item 2A-21 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 PROPOSED PROJECT SCHEDULE Schedule is representative of a typical, proposed 52-day project schedule and not intended to represent actual start/stop dates. PROPOSED PROJECT SCHEDULE CONT. Item 2A-22 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 Item 2A-23 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 PROPOSED PROJECT SCHEDULE CONT. PROPOSED PROJECT SCHEDULE CONT. PROPOSED PROJECT BUDGET Item 2A-24 78450 AVENUE 41 . BERMUDA DUNES, CA 92203 . OFFICE (760) 772-8446 . FAX (760) 772-9407 Job Name: TAOS PALMS TRELLIS & ENTRANCEREHABILITATION 10/4/2022 General Conditions $69,200.00 130 Architectural and Engineering $52,000.00 150 Project Mobilization $5,000.00 152 Temp Facilties $4,200.00 155 Progressive clean up $3,500.00 157 Demolition 159 Dumpster $4,500.00 161 Temp Fence Site Work $12,500.00 164 Structural Demo 250 Landscape / Irrigation $12,500.00 283 Onsite Concrete Building $687,500.00 400 Exterior Demo $75,000.00 410 Masonry $45,000.00 511 Fence, Gates $25,000.00 512 Aluma Wood Window Shade Awning $12,500.00 610 Aluma Wood Structures $482,000.00 611 Aluma Wood Partition / Privacy Walls $8,000.00 792 Caulking and Sealant 911 Patch/ Plaster/ Painting $115,000.00 1040 Signage $0.00 1505 Plumbing 1513 Med Gas 1514 HVAC 1530 Fire Sprinklers $35,000.00 1610 Electrical $35,000.00 1611 Low Voltage 1911 Jobsite Overhead $15,000.00 1910 Supervision $62,000.00 Subtotal $956,200.00 2010 P&O $76,496.00 Subtotal $1,032,696.00 2110 Insurance ( Liability )$12,392.35 Total $1,045,088.35 1040 Monument Sign (Alternate)$22,500.00 Item 2A-25 Contract No. ___________________ A2-1 ATTACHMENT 2 GENERAL CONDITIONS ARTICLE 1 -DEFINITIONS AND TERMINOLOGY 1.1 Defined Terms. A. Wherever used in the Contract Documents and printed with initial capital letters, the terms listed below will have the meanings indicated which are applicable to both the singular and plural thereof. In addition to terms specifically defined below, terms with initial capital letters in the Contract Documents include references to identified articles and paragraphs, and the titles of other documents or forms. 1. Act of God -- Act of God is an earthquake of magnitude 3.5 or higher on the Richter Scale or a tidal wave. 2. Additional Work – New or unforeseen work will be classified as “Additional Work” when Agency’s Representative determines that it is not covered by the Contract. 3. Applicable Laws -- The laws, statutes, ordinances, rules, codes, regulations, permits, and licenses of any kind, issued by local, state or federal governmental authorities or private authorities with jurisdiction (including utilities), to the extent they apply to the Work. 4. Application for Payment -- The form acceptable to Agency’s Representative which is to be used by the Design-Build Entity during the course of the Work in requesting progress or final payments and which is to be accompanied by such supporting documentation as is required by the Contract Documents. 5. Architect of Record or Engineer of Record (“A/E”) -- The individual, partnership, corporation, joint venture, or other legal entity named as the Design Professional in the Contract or any succeeding entity designated by Agency. 6. Bridging Documents -- Includes, but is not limited to, the portions of the Contract Documents which constitute an outline of design requirements, Work, Project Program, Performance Specifications and schematic drawings. 7. Certificate for Payment -- The form signed by Agency’s Representative attesting to the Design-Build Entity’s right to receive payment for certain completed portions of the Work on the Project in accordance with Article 12. 8. Change Order (“CO”) -- A document that authorizes an addition, deletion, or revision in the Work or an adjustment in the Contract Price or the Project Completion Date, issued on or after the Effective Date of the Contract, in accordance with the Contract Documents and in the form contained in the Contract Documents. 9. Change Order Request (“COR”) -- A request made by the Design-Build Entity for an adjustment in the Contract Price and/or Project Completion Date as the result of a Design-Build Entity-claimed change to the Work. Item 2A-26 Contract No. ___________________ A2-2 10. Claim -- A demand or assertion by Agency or Design-Build Entity seeking an adjustment of the Contract Price or Project Completion Date, or both, or other relief with respect to the terms of the Contract. A demand for money or services by a third party is not a Claim. 11. Construction Documents -- The plans and Technical Specifications prepared by the Design-Build Entity for the Project and approved by Agency. The Construction Documents shall set forth in detail all items necessary to complete the construction (other than such details customarily provided by others during construction) of the Project in accordance with the Contract Documents. Following commencement of the Construction Phase, Construction Documents become part of the Contract Documents upon their completion and approval by Agency. All amendments and modifications to the Construction Documents must be approved by Agency in writing. 12. Construction Documents Phase – The first phase of the Work and will commence with the issuance of the Notice to Proceed. 13. Construction Phase -- The second phase of the Work and will commence upon final approval of the Construction Documents by Agency and a Notice to Proceed with Construction. 14. Construction Work -- That portion of the Work on the Project consisting of the provision of labor, materials, furnishings, equipment and services in connection with the construction of the Project as set forth in the Contract Documents. 15. Contract -- The entire integrated written agreement between Agency and Design- Build Entity concerning the Work. “Contract” may be used interchangeably with “Agreement” in the Contract Documents. The Contract supersedes prior negotiations, representations, or agreements, whether written or oral, and includes all Contract Documents. 16. Contract Documents -- The documents listed in Section 1 of the Contract. Some documents provided by Agency, including but not limited to reports and drawings of subsurface and physical conditions are not Contract Documents. 17. Contract Times -- The number of days or the dates stated in the Contract Documents and Project Schedule to achieve defined Milestones, if any, and to complete the Work so that it is ready for final payment. 18. Critical Supply Shortage -- An unusual shortage in materials that is (a) supported by documented proof that Design-Build Entity made every effort to obtain such materials from all available sources; (b) such shortage is due to the fact that such materials are not physically available from single or multiple sources or could have been obtained only at exorbitant prices entirely inconsistent with current and standard rates taking into account the quantities involved and the usual industry practices in obtaining such quantities; and (c) such shortages and the difficulties in obtaining alternate sources of materials could not have been known or anticipated by Design-Build Entity at the time it submitted its bid or entered the Contract. Market fluctuations in prices of materials, whether or not resulting from a Force Majeure Event, does not constitute a Critical Supply Shortage. Item 2A-27 Contract No. ___________________ A2-3 19. Day -- A calendar day of 24 hours measured from midnight to the next midnight. 20. Defective Work -- Work that is unsatisfactory, faulty, or deficient; or that does not conform to the Contract Documents; or that does not meet the requirements of any inspection, reference standard, test, or approval referenced in the Contract Documents. 21. Demobilization – The complete dismantling and removal by the Design-Build Entity of all of the Design-Build Entity’s temporary facilities, equipment, and personnel at the Site. 22. Design-Build Entity -- The individual or entity with which Agency has contracted for performance of the Work. 23. Design-Build Entity Representative -- The person or firm identified as the primary contact person and representative of the Design-Build Entity as designated in the Contract and who shall not be changed without prior written consent of Agency. 24. Design Materials -- Any and all documents, shop drawings, electronic information, including computer programs and computer generated materials, data, plans, drawings, sketches, illustrations, specifications, descriptions, models and other information developed, prepared, furnished, delivered or required to be delivered by, or for, the Design-Build Entity: (1) to Agency under the Contract Documents or; (2) developed or prepared by or for the Design-Build Entity specifically to discharge its duties under the Contract Documents. 25. Design Professional -- The individuals or entities who will provide the Design-Build Entity with the required architectural, engineering, and other professional services required for the coordinated design of the Project and the administration of construction. 26. Design Work -- The portion of the Work on the Project consisting of the Design services and design deliverables required to be provided in connection with the Design of the Project as set forth in the Contract Documents. 27. Drawings -- The graphic and pictorial portions of the Contract Documents showing the design, location, and dimensions of the Work to be done on the Project, generally including plans, elevations, sections, details, schedules, and diagrams prepared as part of the Design Materials. The Drawings are listed in the List of Drawings. 28. Effective Date of the Contract – The date indicated in the Contract on which it becomes effective, but if no such date is indicated, it means the date on which the Contract is signed and delivered by the last of the two parties to sign and deliver. 29. Equipment Manufacturer -- Any Separate Contractor that fabricates and/or supplies any of Agency’s provided equipment which is installed in the Project by the Design-Build Entity. 30. Force Majeure Event -- An event that materially affects a party’s performance and is one or more of the following: (1) Acts of God or other natural disasters occurring Item 2A-28 Contract No. ___________________ A2-4 at the Site; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the Work); (4) pandemics, epidemics or quarantine restrictions; (5) strikes and other organized labor action occurring at the Site and the effects thereof on the Work, only to the extent such strikes and other organized labor action are beyond the control of Contractor and its Subcontractors, of every Tier, and to the extent the effects thereof cannot be avoided by use of replacement workers; and (6) a Critical Supply Shortage. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of the Agency in its capacity as a municipal authority. 31. Governmental Approvals -- Those governmental actions required to be obtained by Agency and necessary for the completion of the Project. 32. Hazardous Materials – Any substance: the presence of which requires investigation or remediation under any federal, state or local law, statute, regulation, ordinance, order, action, policy, or common law; which is or becomes defined as a "hazardous waste," "hazardous substance," pollutant, or contaminant under any federal, state or local law, statute, regulation, rule or ordinance, or amendments thereto, including, without limitations, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. ("CERCLA"), as amended, or the Resource, Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq. ("RCRA"); which is petroleum, including crude oil or any fraction thereof not otherwise designated as a “hazardous substance” under CERCLA including, without limitation, gasoline, diesel fuel, or other petroleum hydrocarbons; which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any regulatory agency or instrumentality or the United States; the presence of which on the Site causes or threatens to cause a nuisance upon the Site or to the adjacent properties or poses or threatens to pose a hazard to the health or safety of persons on or about the Site; the presence of which on adjacent properties could constitute a trespass by the Design-Build Entity or the Agency; or as defined in the California Health and Safety Code. For the purposes of this Contract, “Hazardous Materials” shall also include, but are not limited to, “Underground Storage Tanks.” "Underground Storage Tank" shall have the definition assigned to that term by Section 9001 of RCRA, 42 U.S.C. Section 6991, and also shall include: any tank of one thousand one hundred (1,100) gallons or less capacity used for storing motor fuel; any tank used for storing heating oil for consumption on the premises where stored; any septic tank; and any pipes connected to the above items. 33. Holidays -- Holidays occur on: New Year’s Day - January 1 Martin Luther King Jr. Day – Third Monday of January President’s Day – Third Monday of February Memorial Day - Last Monday in May Independence Day - July 4 Item 2A-29 Contract No. ___________________ A2-5 Labor Day - First Monday in September Veteran’s Day - November 11 Thanksgiving Day - Fourth Thursday in November Friday after Thanksgiving Christmas Eve – December 24 Christmas Day - December 25 If any Holiday listed above falls on a Saturday, Saturday and the preceding Friday are both Holidays. If the Holiday should fall on a Sunday, Sunday and the following Monday are both Holidays. 34. Liens – Charges, security interests, or encumbrances upon Project funds, or personal property, including without limitation Stop Payment Notices. 35. Milestones – A principal event specified in the Contract Documents associated with a required completion date or time prior to Completion of all the Work. Failure to achieve Milestones may result in Liquidated Damages as described in the Contract Documents. 36. Notice of Award – The written notice by Agency to the Design-Build Entity stating that upon timely compliance by the Design-Build Entity with the conditions precedent listed therein, Agency will sign and deliver the Contract. 37. Notice of Completion – The form which may be executed by Agency and recorded by the county where the Project is located constituting final acceptance of the Project. 38. Notice to Proceed -- A written notice given by Agency to the Design-Build Entity fixing the date on which the Design-Build Entity may proceed with the Work and when Contract Time will commence to run. 39. Partial Utilization – Use by Agency of a substantially completed part of the Work prior to Completion of all the Work. 40. Performance Specifications -- That part of the Contract Documents consisting of written requirements for materials, equipment, systems, standards and workmanship as applied to the Work, and certain administrative requirements and procedural matters applicable thereto included within the Bridging Documents. 41. Project -- The total design and construction of which the Work performed under the Contract Documents may be the whole, or a part, and which may include separate design or construction work performed by Agency or by Separate Contractors for the Project. 42. Project Completion Date -- The date by which the Design-Build Entity agrees that all Work described in the Contract Documents shall be completed. The Project Completion Date is set forth in the Contract. 43. Project Schedule -- The graphical representation of a practical plan to complete the Work on the Project within the Project Completion Date and other Contract Times. The detailed requirements for the Project Schedule are stated in Article 6. Item 2A-30 Contract No. ___________________ A2-6 44. Proposal -- The proposal submitted by the Design-Build Entity in response to the Request for Proposal for this Project. 45. Request for Proposal (“RFP”) -- The request for proposal issued by Agency for the Project and includes all documents, exhibits, attachments, and addenda thereto. 46. Samples -- Physical examples of materials, equipment, or workmanship that are representative of some portion of the Work and which establish the standards by which such portion of the Work will be judged. 47. Separate Contractor -- A person, or firm, under separate contract with Agency performing other work at the Project site which may affect the Work. 48. Shop Drawings -- All drawings, diagrams, illustrations, schedules, and other data or information which are specifically prepared or assembled by or for Design-Build Entity and submitted by Design-Build Entity to illustrate some portion of the Work. 49. Site -- Lands or areas indicated in the Contract Documents as being furnished by Agency upon which the Work is to be performed, including rights-of-way and easements for access thereto, and such other lands furnished by Agency which are designated for the use of Design-Build Entity. 50. Stop Payment Notice -- A written notice as defined in Civil Code section 8044. 51. Subcontractor – An individual or entity that has a contract with the Design-Build Entity or with a Subcontractor of the Design-Build Entity to perform a portion of the Work on the Project. Unless otherwise specifically provided, the term Subcontractor includes Subcontractors of all tiers. 52. Submittal - Written or graphic information and physical samples prepared and supplied by the Design-Build Entity demonstrating various portions of the Work. 53. Supplier -- A manufacturer, fabricator, supplier, distributor, material man, or vendor having a direct contract with Design-Build Entity or with any Subcontractor to furnish materials or equipment used in the performance of the Work or to be incorporated in the Work. 54. Technical Specifications – All documents developed by the Design-Build Entity and which are ready for final construction. 55. Tier -- The contractual level of a Subcontractor or supplier or consultant with respect to the Design-Build Entity. For example, a first tier Subcontractor is under subcontract with the Design-Build Entity, a second tier Subcontractor is under subcontract with a first tier Subcontractor, and so forth. 56. Warranty A written guarantee provided to Agency by the Design-Build Entity that the Work remain free of defects and suitable for its intended use for the period required by the Contract Documents or the longest period permitted by the law of this State, whichever is longer. Item 2A-31 Contract No. ___________________ A2-7 57. Work -- The entire design and construction, or the various separately identifiable parts thereof, required to be provided under the Contract Documents. Work includes and is the result of performing or providing all labor, services, and documentation necessary to produce such design and construction, and furnishing, installing, and incorporating all materials and equipment into such design and construction, all as required by the Contract Documents. 1.2 Terminology. A. The words and terms below are not defined but, when used in the Contract Documents, have the indicated meaning. 1. The word “furnish,” when used in connection with services, materials, or equipment, shall mean to supply and deliver said services, materials, or equipment to the Project site (or some other specified location) ready for use or installation and in usable or operable condition. 2. The word “install,” when used in connection with services, materials, or equipment, shall mean to put into use or place in final position said services, materials, or equipment complete and ready for intended use. 3. The words “perform” or “provide,” when used in connection with services, materials, or equipment, shall mean to furnish and install said services, materials, or equipment complete and ready for intended use. 4. Regardless of whether “furnish,” “install,” “perform,” or “provide” is used in connection with services, materials, or equipment, an obligation of Design- Build Entity is implied. B. Unless stated otherwise in the Contract Documents, words or phrases that have a well-known technical or construction industry or trade meaning are used in the Contract Documents in accordance with such recognized meaning ARTICLE 2 - PRELIMINARY MATTERS 2.1 Delivery of Contract Documents. A. Within fifteen (15) Days after receipt of the Notice of Award and before Agency will execute the Contract, the Design-Build Entity shall furnish and file with Agency a signed Contract in duplicate and the necessary Performance Bond, Payment Bond, Certificates of Insurance and Endorsements, Escrow Agreement (if used) and Tax Identification Number, as well as any other documents specified in the Contract Documents. Notwithstanding the foregoing, if the Contract Price has yet to be established at Notice of Award, then the Performance Bond and Payment Bond may be provided after establishing the Contract Price and prior to the Construction Phase. 2.2 Bonds. A. Design-Build Entity shall submit the bonds on the forms provided with the Contract Documents, duly executed by a responsible corporate surety admitted to transact surety business in the State of California, as defined in Code of Civil Procedure section Item 2A-32 Contract No. ___________________ A2-8 995.120, and listed in the United States Department of the Treasury circular entitled "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies," authorized to do business in the State of California and acceptable to Agency conditioned upon the faithful performance by the Design-Build Entity of all requirements of the Contract Documents. Each of the bonds shall be in a sum no less than one hundred percent (100%) of the Contract Price. 2.3 Evidence of Insurance. A. Design-Build Entity shall obtain, at its sole cost and expense, all insurance required by Article 5. Certificates of such insurance and copies of the insurance policies and endorsements shall be delivered to Agency within fifteen (15) Days after receipt of the Notice of Award and before execution of the agreement for construction by Agency. 2.4 Execution of Contract. A. Upon receipt of the required Contract Documents, Agency will execute the Contract, establishing the Effective Date of the Contract. 2.5 Commencement of Contract Times; Notice to Proceed with Construction. A. The Agency will not issue a Notice to Proceed until after the Effective Date of the Contract. Construction Work shall commence within fifteen (15) Days of the date stated in Agency’s Notice to Proceed with Construction. No Construction Work shall be done at the Site prior to the date on which the Contract Time commence to run. Nothing herein shall affect the Project Completion Date. 2.6 Copies of Documents. A. Agency will furnish to Design-Build Entity one (1) copy of the Bridging Documents. Additional copies will be furnished upon request at the cost of reproduction. 2.7 Preconstruction Conference; Designation of Authorized Representatives. A. Before any Work at the Project site is started, a conference attended by Agency, Design-Build Entity, Agency’s Representative, and others as appropriate will be held to establish a working understanding among the parties as to the Work and to discuss the schedules referred to herein, procedures for handling Shop Drawings and other submittals, processing Applications for Payment, and maintaining required records. 2.8 Initial Acceptance of Schedules. A. At least ten (10) Days before submission of the first Application for Payment, a conference attended by Design-Build Entity, Agency’s Representative, and others as appropriate will be held to review for acceptability to Agency’s Representative the schedules submitted, as required by the Contract Documents. Design-Build Entity shall have an additional ten (10) Days to make corrections and adjustments and to complete and resubmit the schedules. No progress payment shall be made to Design- Build Entity until acceptable schedules are submitted to Agency’s Representative. Acceptance of the schedules by Agency’s Representative will not impose on Item 2A-33 Contract No. ___________________ A2-9 responsibility for accuracy, for sequencing, scheduling, or progress of the Work, or compliance with the Contract Documents. Acceptance will not interfere with or relieve Design-Build Entity from Design-Build Entity’s full responsibility therefor. ARTICLE 3 -CONTRACT DOCUMENTS: INTENT, AMENDING, REUSE 3.1 Intent. A. The Contract Documents are complementary; what is required by one is as binding as if required by all. It is the intent of the Contract Documents to describe a functionally complete Project (or part thereof) to be designed and constructed in accordance with the Contract Documents. Any labor, documentation, services, materials, or equipment that reasonably may be inferred from the Contract Documents or from prevailing custom or trade usage as being required to produce the indicated result will be provided whether or not specifically called for, at no additional cost to Agency. Clarifications and interpretations of the Contract Documents shall be issued by Agency’s Representative as provided in these General Conditions. B. If utilities to equipment/fixtures are not shown but are necessary to operate the equipment/fixtures, the utilities service installation is considered to be part of the Work. The implied Work will conform to the appropriate sections of the Contract Documents. C. Organization of the Contract Documents into divisions, sections, and articles, and arrangement of drawings shall not control the Design-Build Entity in dividing Work among Subcontractors or in establishing the extent of Work to be performed by any trade. 3.2 Reference Standards. A. Standards, Specifications, Codes, Laws, and Regulations. 1. Reference to federal specifications, federal standards, other standards, specifications, manuals, or codes of any technical society, organization, or association, or to Applicable Laws, whether such reference be specific or by implication, shall mean the standard, specification, manual, code, or Applicable Laws in effect at the time of opening of proposals (or on the Effective Date of the Contract if there were no proposals), except as may be otherwise specifically stated in the Contract Documents. 2. No provision of any such standard, specification, manual, or code, or any instruction of a supplier, shall be effective to change the duties or responsibilities of Agency, Design-Build Entity, or Agency’s Representative, or any of their Subcontractors, consultants, agents, or employees, from those set forth in the Contract Documents. No such provision or instruction shall be effective to assign to Agency or Agency’s Representative, or any of their officers, directors, members, partners, employees, agents, consultants, or subcontractors, any duty or authority to supervise or direct the performance of the Work or any duty or authority to undertake responsibility inconsistent with the provisions of the Contract Documents. Item 2A-34 Contract No. ___________________ A2-10 3.3 Order of Precedence. A. The intent of the Contract Documents is to include all necessary criteria to establish the scope and quality for completion of the Work on the Project by the Design-Build Entity. The Contract Documents are complementary and what is required by one shall be as binding as if required by all. Performance by the Design-Build Entity shall be required to the extent consistent with, and reasonably inferable from, the Contract Documents. B. Except as may be otherwise specifically stated in the Contract Documents, the provisions of the Contract Documents shall take precedence in resolving any conflict, error, ambiguity, or discrepancy between the provisions of the Contract Documents and the provisions of any standard, specification, manual, or code, or the instruction of any Supplier (whether or not specifically incorporated by reference in the Contract Documents); or the provisions of any Applicable Laws (unless such an interpretation of the provisions of the Contract Documents would result in violation of such Applicable Law). C. In resolving conflicts among any of the Contract Documents, the order of precedence shall be as follows: 1. Permits from other agencies as may be required by law; 2. Change Orders or Pending Change Orders, most recent first; 3. Design-Build Contract; 4. Special Conditions; 5. General Conditions; 6. RFP and all addenda, attachments and appendices; 7. Design-Build Entity Proposal in response to RFP; 8. Construction Documents prepared by Design-Build Entity; and 9. Drawings prepared by Design-Build Entity; D. With reference to the Drawings the order of precedence shall be as follows: 1. Figures govern over scaled dimensions; 2. Detail drawings govern over general drawings; 3. Change Order drawings govern over Drawings; 4. Drawings govern over standard drawings. E. Notwithstanding the orders of precedence established above, in the event of conflicts, the higher standard, higher quality and most expensive shall always apply. Item 2A-35 Contract No. ___________________ A2-11 3.4 Amending and Supplementing Contract Documents. A. The Contract Documents may be amended to provide for additions, deletions, and revisions in the Work or to modify the terms and conditions thereof only by a Change Order. 3.5 Interpretation and Use of Contract Documents. A. Agency and the Design-Build Entity acknowledge that the Contract Documents may differ in some respect(s) from the other documents included in the RFP upon which the Design-Build Entity based its Proposal. Prior to the commencement of construction on the Project, the parties shall confirm, in writing, the final form of the Contract Documents that are to be utilized. Specifically, once approved by Agency, the Construction Documents become a part of the Contract Documents and define the entire scope of work, so long as such documents incorporate all minimum requirements of the Bridging Documents. The Design-Build Entity shall certify that the Construction Documents are in full compliance with the Contract Documents, except as noted. B. Organization of the Performance Specifications into various subdivisions and the arrangement of the Drawings shall not control the Design-Build Entity in dividing portions of the Work necessary for the Project among Subcontractors or in establishing the extent of Work to be performed by any trade. C. Unless otherwise stated in the Contract Documents, technical words and abbreviations contained in the Contract Documents are used in accordance with commonly understood design professional and construction industry meanings; nontechnical words and abbreviations are used in accordance with their commonly understood meanings. D. The Contract Documents may omit modifying words such as “all” and “any,” and articles such as “the” and “an,” but the fact that a modifier or an article is absent from one statement and appears in another is not intended to affect the interpretation of either statement. The use of the word “including,” when following any general statement, shall not be construed to limit such statement to specific items or matters set forth immediately following such word or to similar items or matters, whether or not non limiting language (such as “without limitation,” “but not limited to,” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement. E. Whenever the context so requires, the use of the singular number shall be deemed to include the plural and vice versa. Each gender shall be deemed to include any other gender, and each shall include a corporation, partnership, trust, or other legal entity, whenever the context so requires. The captions and headings of the various subdivisions of the Contract Documents are intended only for reference and convenience and in no way define, limit, or prescribe the scope or intent of the Contract Documents or any subdivision thereof. F. Each and every provision of law required by law to be inserted in the Contract Documents shall be deemed to be inserted herein, and the Contract Documents shall Item 2A-36 Contract No. ___________________ A2-12 be read and enforced as though it were included herein, and if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon application of either party the Contract shall be amended in writing to make such insertion or correction. G. Before commencing any Work on the Project, the Design-Build Entity shall check and review the Contract Documents, including the Construction Documents, for conformance and compliance with all laws, ordinances, codes, rules and regulations of all governmental authorities and public utilities affecting the construction and operation of the physical plant of the Project, all quasi-governmental and other regulations affecting the construction and operation of the physical plant of the Project, and other special requirements, if any, designated in the Contract. In the event the Design-Build Entity observes any violation of any law, ordinance, code, rule or regulation, or inconsistency with any such restrictions or special requirements of the Contract, the Design-Build Entity shall immediately notify Agency’s Representative in writing of the same and shall cause to be corrected any such violation or inconsistency in the manner provided hereunder. The Design-Build Entity shall be solely liable for any such violation, inconsistency or special requirement, if Design-Build Entity fails to conduct such review or notification to Agency. H. Before commencing any Work on the Project, the Design-Build Entity shall carefully examine all Performance Specifications, the Contract, the Contract Document s and other information given to the Design-Build Entity as to Project requirements. The Design-Build Entity shall immediately notify Agency’s Representative of any perceived or alleged error, inconsistency, ambiguity, or lack of detail or explanation in such documents in writing. Neither the Design-Build Entity nor any Subcontractor shall take advantage of any apparent error or omission which may be found in the Performance Specifications, the Contract, the Contract Documents or other information given to Design-Build Entity. If the Design-Build Entity or its Subcontractors, material or equipment suppliers, or any of their officers, agents, and employees performs, permits, or causes the performance of any Work under the Contract, which it knows or should have known to be in error, inconsistent, or ambiguous, or not sufficiently detailed or explained, the Design-Build Entity shall bear any and all costs arising therefrom including, without limitation, the cost of correction thereof without increase or adjustment to the Contract Price or the Project Completion Date. In no case shall any Subcontractor proceed with Work if uncertain without the Design-Build Entity’s written direction and/or approval. 3.6 Reuse of Documents. A. Design-Build Entity and any Subcontractor shall not: have or acquire any title to or Ownership rights in any of the Construction Documents or other documents (or copies of any thereof) prepared by or bearing the seal of the A/E or its consultants, including electronic media editions; or reuse of any such Construction Documents, other documents, or copies thereof on extensions of the Project or any other project without written consent of Agency and A/E and specific written verification or adaptation by the A/E. The prohibitions of this Article will survive final payment, or termination of the Contract. Nothing herein shall preclude Design-Build Entity from retaining copies of the Contract Documents for record purposes. Item 2A-37 Contract No. ___________________ A2-13 3.7 Electronic Data. A. The data furnished by Agency or Agency’s Representative to Design-Build Entity, or by Design-Build Entity to Agency or Agency’s Representative, that may be relied upon are limited to the printed copies (also known as hard copies). Files in electronic media format of text, data, graphics, or other types are furnished only for the convenience of the receiving party. Any conclusion or information obtained or derived from such electronic files will be at the user’s sole risk. If there is a discrepancy between the electronic files and the hard copies, the hard copies govern. B. Because data stored in electronic media format can deteriorate or be modified inadvertently or otherwise without authorization of the data’s creator, the party receiving electronic files agrees that it will perform acceptance tests or procedures within sixty (60) Days, after which the receiving party shall be deemed to have accepted the data thus transferred. Any errors detected within the 60-Day acceptance period will be corrected by the transferring party. C. When transferring documents in electronic media format, the transferring party makes no representations as to long term compatibility, usability, or readability of documents resulting from the use of software application packages, operating systems, or computer hardware differing from those used by the data’s creator. 3.8 Ownership and Use of Construction Documents. A. The Construction Documents, and all copies thereof, furnished to, or provided by, the Design-Build Entity are the property of Agency. Agency and the Design-Build Entity explicitly agree that all materials and documents developed in the performance of this Contract are the property of Agency pursuant to the requirements of Agency. Agency shall have unlimited rights, for the benefit of Agency, in all drawings, designs, technical specifications, notes and any other documentation and other Work developed in the performance of this Contract for the Project, including the right to re-use details of the Design on any other Agency Work at no additional cost to Agency. The Design-Build Entity agrees to, and hereby does, grant to Agency a royalty free license to all such data that the Design-Build Entity may cover by copyright and to all designs as to which the Design-Build Entity may assert any right or establish any claim to under the patent or copyright laws. The Design-Build Entity, for a period up to five (5) years from the date of Completion of the Project, agrees to furnish and to provide access to the originals or copies of all such materials immediately upon the written request of Agency. Any use or reuse by Agency of the Construction Documents on any project other than this Project without employing the services of the Design-Build Entity shall be at Agency’s own risk with respect to third parties. If Agency uses or re-uses the Construction Documents on any project other than this Project, it shall remove the A/E’s seal from the Construction Documents and hold harmless Design-Build Entity, A/E, and their officers, directors, agents and employees from claims arising out of the use or re-use of the Construction Documents on such other project. Design-Build Entity shall not be responsible or liable for any revisions to the Construction Documents made by any party other than the Design-Build Entity, a party for which the Design-Build Entity is legally responsible or liable, or anyone approved by the Design-Build Entity. Item 2A-38 Contract No. ___________________ A2-14 3.9 Administration of the Contract by Agency’s Representative. A. During the term of this Design-Build Contract, Agency’s Representative shall have the right to review the Design-Build Entity’s Work at such intervals as deemed appropriate by Agency’s Representative. However, no actions taken during such review or site visit by Agency’s Representative shall relieve the Design-Build Entity of any of its obligations of single point responsibility for the design and construction of this Project nor form the basis for a Claim if such actions extend beyond the Project Completion Date. B. Agency’s Representative will not have control over, will not be in charge of, and will not be responsible for design or construction means, methods, techniques, sequences, or procedures, or for safety precautions and programs in connection with the Work on the Project, since these are solely the Design-Build Entity’s responsibility. C. Except as otherwise provided in the Contract Documents or when direct communications have been specifically authorized, Agency and the Design-Build Entity shall communicate through Agency’s Representative. Communications by the Design-Build Entity with Agency’s consultants and Agency’s Representative’s consultants shall be through Agency’s Representative. Communications by Agency and Agency’s Representative with Subcontractors will be through the Design-Build Entity. Communications by the Design-Build Entity and Subcontractors with Separate Contractors shall be through Agency’s Representative. The Design-Build Entity shall not rely on oral or other non-written communications. D. Based on Agency’s Representative’s Project site visits, review of the Work, and evaluations of the Design-Build Entity’s Applications for Payment, Agency’s Representative will recommend amounts, if any, due the Design-Build Entity and will issue Certificates for Payment in such amounts. E. Agency’s Representative will have the authority to reject Work on the Project, or any portion thereof, which does not conform to the Contract Documents. Agency’s Representative will have the authority to stop Work on the Project, or any portion thereof. Whenever Agency’s Representative considers it necessary, or advisable, for implementation of the intent of the Contract Documents, Agency’s Representative will have the authority to require additional inspection or testing of the Work on the Project in accordance with the Contract Documents, whether or not such Work is fabricated, installed, or completed. However, no authority of Agency’s Representative conferred by the Contract Documents nor any decision made in good faith either to exercise, or to not exercise such authority, will give rise to a duty or responsibility of Agency or Agency’s Representative to the Design-Build Entity, or any person or entity claiming under, or through, the Design-Build Entity. F. Agency’s Representative will have the authority to conduct inspections in connection with beneficial occupancy and to determine the dates of Completion; will receive for review and approval any records, written warranties, and related documents required by the Contract Documents and assembled by the Design-Build Entity; and will issue a final Certificate for Payment upon the Design-Build Entity’s compliance with the requirements of the Contract Documents. Item 2A-39 Contract No. ___________________ A2-15 G. Agency’s Representative will be, in the first instance, the interpreter of the requirements of the Contract Documents and the judge of performance thereunder by the Design-Build Entity. Should the Design-Build Entity discover any conflicts, omissions, or errors in the Construction Documents or the Contract Documents; have any questions about the interpretation or clarification of the Contract Documents; question whether Work is within the scope of the Contract Documents; then, before proceeding with the Work affected, the Design-Build Entity shall notify Agency’s Representative in writing and request interpretation, or clarification. Agency’s Representative’s response to questions and requests for interpretations, clarifications, instructions, or decisions will be made with reasonable promptness. Should the Design-Build Entity proceed with the Work affected before receipt of a response from Agency’s Representative, any portion of the Work on the Project which is not done in accordance with Agency’s Representative’s interpretations, clarifications, instructions, or decisions shall be removed or replaced and the Design-Build Entity shall be responsible for all resultant losses. H. Agency may at any time and from time to time, without prior notice to or approval of the Design-Build Entity, replace Agency’s Representative with a new Agency Representative. Upon receipt of notice from Agency informing the Design-Build Entity of such replacement and identifying the new Agency’s Representative, the Design- Build Entity shall recognize such person or firm as Agency’s Representative for all purposes under the Contract Documents. ARTICLE 4 -AVAILABILITY AND OWNERSHIP OF LANDS AND MATERIALS; HAZARDOUS ENVIRONMENTAL CONDITIONS; REFERENCE POINTS 4.1 Availability of Lands. A. Agency shall furnish the Project site. Agency shall notify Design-Build Entity of any encumbrances or restrictions not of general application but specifically related to use of the Project site with which Design-Build Entity must comply in performing the Work. Agency will obtain in a timely manner and pay for easements for permanent structures or permanent changes in existing facilities. Design-Build Entity shall provide for all additional lands and access thereto that may be required for temporary construction facilities or storage of materials and equipment at no additional cost to Agency. 4.2 Ownership of Site Materials Found. A. The title to water, soil, rock, gravel, sand, minerals, timber and any other materials developed or obtained in the excavation or other operations of Design-Build Entity or any of its Subcontractors in the performance of the Contract, and the right to use said items in carrying out the Contract, or to dispose of same, is hereby expressly reserved by Agency. Neither Design-Build Entity nor any of its Subcontractors nor any of their representatives or employees shall have any right, title, or interest in said materials, nor shall they assert or make any claim thereto. Design-Build Entity will, as determined by Agency’s Representative, be permitted to use in the Work without charge, any such materials which meet the requirements of the Contract Documents, provided Agency shall have the right to use or consume these materials without payment to a third party. Item 2A-40 Contract No. ___________________ A2-16 4.3 Hazardous Material at Site. A. The Design-Build Entity shall have no responsibility for detection, abatement, remediation, removal or disposal of any Hazardous Material, except Hazardous Materials introduced onto the Project Site by the Design-Build Entity, its employees, subcontractors, agents, or other parties acting on behalf of the Design-Build Entity. In the event that the Design-Build Entity becomes aware of the presence of, or exposure of persons to, any Hazardous Material at the Project Site, the Design-Build Entity shall inform Agency by notice immediately. Notwithstanding anything to the contrary herein, the Design-Build Entity shall not be responsible for, and the Agency shall bear full responsibility and remediation costs relating to any Hazardous Materials uncovered, removed or disturbed by the Design-Build Entity on the Project Site resulting from the Design-Build Entity’s performance of the work hereunder, except Hazardous Materials introduced onto the Project Site by the Design-Build Entity, its employees, subcontractors, agents, or other parties acting on behalf of the Design-Build Entity. The Agency shall not be responsible for, and the Design-Build Entity shall bear full responsibility and remediation costs relating to any Hazardous Materials introduced onto the Project Site by the Design-Build Entity, its employees, subcontractors, agents, or other parties acting on behalf of the Design-Build Entity. B. The Design-Build Entity hereby specifically agrees to indemnify, defend and hold the Agency, its present and future directors, officers, employees, agents, representatives, successors and assigns harmless from and against any and all losses, liabilities, claims, demands, damages, causes of action, fines, penalties, costs and expenses (including, but not limited to, all reasonable consulting, engineering, attorneys’ or other professional fees), that they may incur or suffer by reason of: (a) the existence, uncovering or unveiling, or any release by the Agency or Design-Build Entity of, a Hazardous Material introduced onto the Project Site by the Design-Build Entity, its employees, subcontractors, agents, or other parties acting on behalf of the Design- Build Entity; (b) any enforcement or compliance proceeding commenced by or in the name of any governmental authority because of the presence on the Project Site of Hazardous Materials introduced onto the Project Site by the Design-Build Entity, its employees, subcontractors, agents, or other parties acting on behalf of the Design- Build Entity; and (c) any action reasonably necessary to abate, remediate or prevent a violation or threatened violation of any Hazardous Material laws by the Design-Build Entity. 4.4 Protection and Restoration of Existing Improvements and Reference Points. A. Design-Build Entity shall be responsible for laying out the Work, shall protect and preserve the established reference points and property monuments, and shall make no changes or relocations without the prior written approval of Agency. Design-Build Entity shall report to Agency’s Representative whenever any reference point or property monument is lost or destroyed or requires relocation because of necessary changes in grades or locations, and shall be responsible for the accurate replacement or relocation of such reference points or property monuments by professionally qualified personnel. Item 2A-41 Contract No. ___________________ A2-17 ARTICLE 5 -BONDS AND INSURANCE 5.1 Time for Compliance. Design-Build Entity shall not commence Work under this Contract until it has provided evidence to Agency that it has secured all insurance required under this Article. Design-Build Entity shall require and verify that all subconsultants and subcontractors maintain insurance meeting all the requirements stated herein. Design- Build Entity shall not allow any subconsultant or subcontractor to commence work on any subcontract until it has provided evidence to Agency that the subconsultant or subcontractor has secured all insurance required under this Article. 5.2 Minimum Requirements. Design-Build Entity shall, at its expense, procure and maintain for the duration of the Contract insurance against claims for injuries to persons or damages to property which may arise out of or result from the performance of the Work and Design- Build Entity’s other obligations under the Contract Documents whether by Design-Build Entity, its agents, representatives, employees or subcontractors. Design-Build Entity shall also require all of its subconsultants and subcontractors to procure and maintain the same insurance for the duration of the Contract and verify the subconsultants’ and subcontractors’ compliance. Design-Build Entity’s and subconsultants’ and subcontractors’ insurance shall meet at least the minimum levels of coverage set forth in this Article: A. Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto) or if Design-Build Entity has no owned autos, non-owned, leased or hired autos Code 8 (hired) and Code 9 (non-owned); (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance; (4) Installation Floater/Builder’s Risk: “All Risk All Perils” form; and (5) Professional Liability/Errors and Omissions. The policies shall not contain any exclusion contrary to the Contract, including but not limited to endorsements or provisions limiting coverage for (1) contractual liability or (2) cross liability for claims or suits by one insured against another. B. Minimum Limits of Insurance. The Design-Build Entity shall maintain limits no less than: 1. For Commercial General Liability, Design-Build Entity shall have limits of at least the amount that corresponds to the Contract Price in the following table: Contract Price Amount of Liability Insurance (per occurrence) $ 0 - $ 2 million $ 2 million $ 2 million - $ 5 million $ 3 million $ 5 million - $ 10 million $ 5 million $ 10 million - $ 20 million $10 million If Commercial General Liability Insurance or other form with general aggregate limit is used including, but not limited to, form CG 25 03, either the general Item 2A-42 Contract No. ___________________ A2-18 aggregate limit shall apply separately to the Project or the general aggregate limit shall be twice the required occurrence limit. Should any of the Work involve aircraft (fixed wing or helicopter) owned or operated by Design-Build Entity, liability insurance with limits of not less than $5,000,000 per occurrence for bodily injury and property damage is required. Should any of the Work involve watercraft owned or operated by Design-Build Entity, liability insurance with limits of not less than $5,000,000 per occurrence for bodily injury and property damage is required. 2. Automobile Liability: $1 million per accident for bodily injury and property damage. 3. Workers’ Compensation and Employer’s Liability: a. Workers’ Compensation: statutory limits. b. Employer’s Liability limits of $1 million per accident for bodily injury or disease. c. Should any of the Work be upon or contiguous to navigable bodies of water, Design-Build Entity shall carry insurance covering its employees for benefits available under the Federal Longshoremen's and Harbor Worker's Act to the extent required by law; 4. Excess/Umbrella Liability Policy may be provided to insure the total limits required for Commercial General Liability and Automobile Liability and must apply to all primary coverage afforded, including but not limited to general liability, owned and non-owned automobiles, leased and hired cars. 5. Professional Liability/Errors and Omissions: $2,000,000 per claim. C. Notices; Cancellation or Reduction of Coverage. At least fifteen (15) Days prior to the expiration of any such policy, evidence showing that such insurance coverage has been renewed or extended shall be filed with Agency. If such coverage is cancelled or materially reduced, Design-Build Entity shall, within ten (10) Days after receipt of written notice of such cancellation or reduction of coverage, file with Agency evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. In the event any policy of insurance required under this Contract does not comply with these specifications or is canceled and not replaced, Agency has the right but not the duty to obtain the insurance it deems necessary and any premium paid by Agency will be promptly reimbursed by Design-Build Entity or Agency may withhold amounts sufficient to pay premium from Design-Build Entity payments. In the alternative, Agency may suspend or terminate this Contract. 5.3 Insurance Endorsements. The insurance policies shall contain the following provisions, or Design-Build Entity shall provide endorsements on forms approved by Agency to add the following provisions to the insurance policies: A. General Liability. The general liability policy shall include or be endorsed (amended) to state that: (1) using ISO CG forms 20 10 and 20 37 (including completed operations), or endorsements providing the exact same coverage, Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions shall be covered as additional insureds with respect to the Item 2A-43 Contract No. ___________________ A2-19 Work or ongoing and completed operations performed by or on behalf of the Design- Build Entity, including materials, parts or equipment furnished in connection with such work; and (2) using ISO form 20 01, or endorsements providing the exact same coverage, the insurance coverage shall be primary insurance as respects Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions, or if excess, shall stand in an unbroken chain of coverage excess of the Design-Build Entity’s scheduled underlying coverage. Any excess insurance shall contain a provision that such coverage shall also apply on a primary and noncontributory basis for the benefit of Agency, before Agency’s own primary insurance or self-insurance shall be called upon to protect it as a named insured. Any insurance or self-insurance maintained by Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions shall be excess of the Design-Build Entity’s insurance and shall not be called upon to contribute with it in any way. B. Automobile Liability. The automobile liability policy shall include or be endorsed (amended) to state that: (1) Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Design- Build Entity or for which the Design-Build Entity is responsible; and (2) the insurance coverage shall be primary insurance as respects Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions, or if excess, shall stand in an unbroken chain of coverage excess of the Design-Build Entity’s scheduled underlying coverage. Any insurance or self- insurance maintained by Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions shall be excess of the Design-Build Entity’s insurance and shall not be called upon to contribute with it in any way. C. Workers’ Compensation and Employer’s Liability Coverage. The insurer shall agree, using WC 00 03 13 or the exact equivalent, to waive all rights of subrogation against Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions for losses paid under the terms of the insurance policy. D. Professional Liability/Errors and Omissions. Professional Liability Insurance insuring the A/E, its officers, directors, stockholders, employees, agents, or partner, and al l other persons for whose acts the A/E may be liable, against any and all liabilities arising out of or in connection with the negligent acts, errors or omissions of any of the foregoing in connection with the carrying out of their professional responsibilities described in this Contract. Professional Liability Insurance shall remain in full force and effect, and shall be so certified to Agency by the insurer, for a period of five (5) years after the completion of all of the Design-Build Entity’s services hereunder and Agency’s acceptance of the Project. All subconsultants shall have professional liability insurance with the same limits (additional requirements for Professional Liability/Errors and Omissions Insurance written on a “claims made” basis are set forth below). E. All Coverages. Each insurance policy required by this Agreement shall be endorsed to include the following provisions: Item 2A-44 Contract No. ___________________ A2-20 1. coverage shall not be suspended, voided, reduced or canceled except after thirty (30) Days (10 Days for nonpayment of premium) prior written notice by mail has been given to Agency and all additional insureds. 2. any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to Agency and any other additional insureds. 3. standard separation of insureds provisions. 4. no special limitations on the scope of protection afforded to Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions. 5. waiver of any right of subrogation of the insurer against Agency, its officials, officers, employees, agents, and volunteers, or any other additional insureds, or shall specifically allow the Design-Build Entity or others providing insurance in compliance with these specifications to waive their right of recovery prior to a loss. By signing this agreement, the Design-Build Entity hereby waives its own right of recovery against Agency or any other additional insureds, and shall require similar written express waivers and insurance clauses from each of its subconsultants and subcontractors. 5.4 Builder’s Risk [“All Risk”] A. It is the Design-Build Entity’s responsibility to maintain or cause to be maintained Builder’s Risk [“All Risk”] extended coverage insurance on all work, material, equipment, appliances, tools, and structures that are or will become part of the Work and subject to loss or damage by fire, and vandalism and malicious mischief, in an amount to cover 100% of the replacement cost. The Agency accepts no responsibility for the Work until the Work is formally accepted by the Agency. The Design-Build Entity shall provide a certificate evidencing this coverage before commencing performance of the Work. B. The named insureds shall be Design-Build Entity, all Subcontractors of any tier (excluding those solely responsible for design work), suppliers, and Agency, its elected officials, officers, employees, agents and authorized volunteers, as their interests may appear. Design-Build Entity shall not be required to maintain property insurance for any portion of the Work following acceptance by Agency. C. Policy shall be provided for replacement value on an “all risk” basis. There shall be no coinsurance penalty provision in any such policy. Policy must include: (1) coverage for any ensuing loss from faulty workmanship, nonconforming work, omission or deficiency in design or specifications; (2) coverage against machinery accidents and operational testing; (3) coverage for removal of debris, and insuring the buildings, structures, machinery, equipment, materials, facilities, fixtures and all other properties constituting a part of the Project; (4) transit coverage, including ocean marine coverage (unless insured by the supplier), with sub-limits sufficient to insure the full replacement value of any key equipment item; and (5) coverage with sub-limits sufficient to insure the full replacement value of any property or equipment stored either on or off the Site. Item 2A-45 Contract No. ___________________ A2-21 Such insurance shall be on a form acceptable to Agency to ensure adequacy and sublimit. D. In addition, the policy shall meet the following requirements: 1. Insurance policies shall be so conditioned as to cover the performance of any extra work performed under the Contract. 2. Coverage shall include all materials stored on site and in transit. 3. Coverage shall include Design-Build Entity’s tools and equipment. 4. Insurance shall include boiler, machinery and material hoist coverage. 5. Agency shall be named loss payee. 5.5 Pollution Liability Insurance. Pollution Liability Insurance is required should any of the Project involve pollutants. Liability coverage shall include coverage for the environmental risk associated with the project and expenses related to such, including bodily injury, property damage, on and off site clean-up, transporting, carrying, or storing pollutants, coverage for non-owned disposal site in an amount not less than that set forth in the Special Conditions. Pollutants include, but are not limited to, asbestos, mold, microbial matter, solid, liquid, gaseous or thermal irritants or contaminants, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste includes materials to be recycled, reconditioned, or reclaimed. 5.6 Receipt and Application of Insurance Proceeds. Any insured loss under the policies of insurance required herein will be adjusted with Agency and made payable to Agency as fiduciary for the loss payees, as their interests may appear, subject to the requirements of any applicable mortgage clause and of the provisions herein. Agency shall deposit in a separate account any money so received and shall distribute it in accordance with such agreement as the parties in interest may reach. If no other special agreement is reached, the damaged Work shall be repaired or replaced, the moneys so received applied on account thereof, and the Project and the cost thereof covered by an appropriate Change Order. Agency as fiduciary shall have power to adjust and settle any loss with the insurers unless one of the parties in interest shall object in writing to Agency’s exercise of this power within fifteen (15) Days after the occurrence of loss. If such objection be made, Agency as fiduciary shall make settlement with the insurers in accordance with such agreement as the parties in interest may reach. If no such agreement among the parties in interest is reached, Agency as fiduciary shall adjust and settle the loss with the insurers and, if required in writing by any party in interest, Agency as fiduciary shall give bond for the proper performance of such duties. 5.7 Partial Utilization, Acknowledgement of Property Insurer. If Agency finds it necessary to occupy or use a portion or portions of the Project prior to Completion of all the Work, no such use or occupancy shall commence before the insurers providing the property insurance have acknowledged notice thereof and in writing effected any changes in coverage necessitated thereby. The insurers providing the property insurance shall consent by endorsement on the policy or policies, but the property insurance shall not be canceled or permitted to lapse on account of any such partial use or occupancy. Item 2A-46 Contract No. ___________________ A2-22 5.8 Deductibles and Self-Insurance Retentions. Any deductibles or self-insured retentions must be declared to and approved by Agency. Design-Build Entity shall guarantee that, at the option of Agency, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects Agency, its officials, officers, employees, agents, and volunteers and any other additional insureds named in the Special Conditions; or (2) the Design-Build Entity shall procure a bond guaranteeing payment of losses and related investigation costs, claims, and administrative and defense expenses. 5.9 Claims Made Policies. Claims made policies are not acceptable other than for Professional Liability. In addition to the requirements above, for any claims made policy: The Retroactive Date must be shown and must be before the date of the Contract or the beginning of contract work; Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after Agency’s acceptance of the Work; and If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Design-Build Entity must purchase “extended reporting” coverage for a minimum of five (5) years after Agency’s acceptance of the Work. 5.10 Subcontractor Insurance Requirements. Design-Build Entity shall not allow any Subcontractors to commence work on any subcontract relating to the Work until Design- Build Entity has verified that all Subcontractors maintain insurance meeting all requirements under this Section and has provided evidence to Agency of such insurance. For Commercial General Liability coverage Subcontractors shall provide coverage naming Agency, its officials, officers, employees, agents, and volunteers with a format at least as broad as CG 20 38 04 13. If requested by Design-Build Entity, Agency may approve different scopes or minimum limits of insurance for particular Subcontractors. Design- Build Entity shall confirm that Agency shall be named as additional insureds on all Subcontractors’ policies of Commercial General Liability Insurance and Commercial Automobile Insurance. 5.12 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating no less than A:VIII, licensed to do business in California, and satisfactory to Agency. 5.13 Verification of Coverage. Design-Build Entity shall furnish Agency with original certificates of insurance and endorsements effecting coverage required by this Contract on forms satisfactory to Agency. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. All certificates and endorsements must be received and approved by Agency before work commences. Agency reserves the right to require complete, certified copies of all required insurance policies, at any time. 5.14 Reservation of Rights. Agency reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. 5.15 Performance Bond and Payment Bond. A. The Design-Build Entity shall submit performance and payment bonds on the forms provided with the Contract Documents, duly executed by a responsible corporate surety admitted to transact surety business in the State of California, as defined in Code of Civil Procedure Section 995.120, and listed in the United States Department Item 2A-47 Contract No. ___________________ A2-23 of the Treasury circular entitled "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies," authorized to do business in the State of California and acceptable to Agency conditioned upon the faithful performance by the Design-Build Entity of all requirements of the Contract Documents. Each of the bonds shall be in a sum no less than one hundred percent (100%) of the Contract Price. The Design-Build Entity shall furnish bonds covering the faithful performance of the Contract (Performance Bond) and payment of obligations arising thereunder (Payment Bond) on the forms contained in the Contract. The obligations of the performance bond surety shall continue so long as any obligation of Design-Build Entity remains. Nothing herein shall limit the Agency’s rights or the Design-Build Entity’s or surety’s obligations under the Contract, law or equity, including, but not limited to, California Code of Civil Procedure section 337.15. B. The Payment Bond and Performance Bond shall be in effect on the date the Contract is signed by Agency. The Design-Build Entity shall promptly furnish such additional security as may be required by Agency to protect its interests and those interests of persons or firms supplying labor or materials to the Project. The premiums for the Payment Bond and Performance Bond shall be paid by the Design-Build Entity. The Design-Build Entity maintains and agrees that it has executed Payment and Performance Bonds in the amounts and manner required by the Contract Documents. No payment will be made to the Design-Build Entity until the Design-Build Entity’s Payment Bond and Performance Bond have been approved by Agency. C. Should, in Agency’s sole opinion, any bond become insufficient or surety found to be unsatisfactory, the Design-Build Entity shall renew or replace the effected bond within 10 Days of receiving notice from Agency. In the event the surety or the Design-Build Entity intends to reduce or cancel any required bonds, at least thirty (30) Days prior written notice shall be given to Agency, and the Design-Build Entity shall post acceptable replacement bonds at least ten (10) Days prior to expiration of the original bonds. No further payments shall be deemed due or will be made under this Contract until any replacement bonds required by this Article are accepted by Agency. D. To the extent, if any, that the Contract Price is increased in accordance with the Contract, the Design-Build Entity shall, upon request of Agency, cause the amount of the bonds to be increased accordingly and shall promptly deliver satisfactory evidence of such increase to Agency. The bonds shall further provide that no change or alteration of the Contract (including, without limitation, an increase in the Contract Price, as referred to above), extensions of time, or modifications of the time, terms, or conditions of payment to the Design-Build Entity will release the surety. If the Design- Build Entity fails to furnish any required bond, Agency may terminate the Contract for cause. ARTICLE 6 -DESIGN-BUILD ENTITY’S RESPONSIBILITIES 6.1 Design-Build Entity Responsibility; Independent Contractor. A. The Design-Build Entity shall be responsible to Agency for acts and omissions of the Design-Build Entity’s employees, Subcontractors, material and equipment suppliers, and their agents, employees, invitees, and other persons performing portions of Work on the Project under direct or indirect contract with the Design-Build Entity or any of Item 2A-48 Contract No. ___________________ A2-24 its Subcontractors. Agency retains the Design-Build Entity on an independent contractor basis. Design-Build Entity retains the right to perform similar or different services for others during the term of this Contract. The Design-Build Entity is not an employee, agent or representative of Agency. The Design-Build Entity represents that it is fully experienced and properly qualified to perform the class of Work provided for in this Contract and that it is properly licensed, equipped, organized, and financed to perform Work on the Project. Neither Agency, nor any of its officials, officers, directors, employees or agents shall have control over the conduct of Design-Build Entity or any of Design-Build Entity's officers, employees, or agents, except as set forth in this Contract. The Design-Build Entity shall maintain complete control over its employees and its Subcontractors and shall pay all wages, salaries and other amounts due such personnel in connection with their performance as required by law. The Design-Build Entity shall be responsible for all reports and obligations respecting such personnel, including but not limited to, social security taxes, income tax withholdings, unemployment insurance, and workers’ compensation insurance. 6.2 Review of Contract Documents and Field Conditions by The Design-Build Entity; Single Point Responsibility of The Design-Build Entity. A. In addition to the examination and reviews performed, and obligations assumed, incident to making the representations set forth in the Contract, the Design-Build Entity shall carefully study and compare each of the Contract Documents provided by Agency with the others and with information furnished by Agency, and shall promptly report in writing to Agency’s Representative any errors, inconsistencies, or omissions in the Contract Documents provided by Agency or inconsistencies with Applicable Law observed by the Design-Build Entity. The Design-Build Entity shall be solely responsible for any errors, inconsistencies or omissions in the Contract Documents if the Design-Build Entity fails to perform such review and examination or fails to report such errors, inconsistencies or omissions to Agency in writing. B. The Design-Build Entity is responsible for the design and construction of the Project and shall use the highest design and engineering standards of care applicable to projects, buildings or work of similar size, complexity, quality and scope in performing Work on the Project. The Design-Build Entity shall be solely responsible for any and all design errors including, but without limitation, errors, inconsistencies or omissions in the Construction Documents. The Design-Build Entity shall take field measurements, verify field conditions, and carefully compare with the Contract Documents such field measurements, conditions, and other information known to the Design-Build Entity before commencing Work on the Project. Errors, inconsistencies, or omissions discovered at any time shall be promptly reported in writing to Agency’s Representative. C. If the Design-Build Entity performs any design and/or construction activity which it knows, or should know, involves an error, inconsistency, or omission referred to in this Article, without notifying and obtaining the written consent of Agency’s Representative, the Design-Build Entity shall be responsible for the resultant losses, including, without limitation, the costs of correcting Defective Work. Item 2A-49 Contract No. ___________________ A2-25 D. Agency does not assume any obligation to employ the Design-Build Entity’s services or pay the Design-Build Entity royalties of any type as to future programs that may result from Work performed under this Contract. E. The Design-Build Entity shall be responsible for all plotting, printing, copying and distribution costs of any and all documents required in connection with Work on the Project. F. The Design-Build Entity agrees that it has single point responsibility for the design and construction of this Project, and agrees to utilize the highest standard of excellent design, engineering and construction practices. The Design-Build Entity has the duty to act in Agency’s best interests at all times throughout the course and performance of this Contract. 6.3 Design, Supervision and Construction Procedures. A. The Design-Build Entity shall supervise, coordinate, and direct all Work on the Project using the Design-Build Entity’s best skill and attention and applying such skills and expertise as may be necessary to perform the Work in accordance with the Contract Documents. The Design-Build Entity shall be solely responsible for, and have control over, the entire design effort, construction means, methods, techniques, sequences, procedures, and the coordination of all portions of Work on the Project, including, but without limitation, landscape and site work, utilities, and building systems. B. The Design-Build Entity shall be responsible to Agency for acts and omissions of the Design-Build Entity, its agents, employees, and Subcontractors, and their respective agents and employees. C. The Design-Build Entity shall not be relieved of its obligation to perform all Work on the Project in accordance with the Contract Documents either by acts or omissions of Agency or Agency’s Representative in the administration of the Contract, or by tests, inspections, or approvals required, or performed, by persons or firms other than the Design-Build Entity. D. The Design-Build Entity shall be responsible for inspection of all portions of Work on the Project to determine that such portions conform to the requirements of the Contract Documents and are ready to receive subsequent Work. E. To facilitate communications and the management of the design process, the Design- Build Entity shall maintain an office in the Agency’s County for the duration of the design process. F. Unless otherwise provided in the Contract Documents, the Design-Build Entity shall provide and pay for all professional design/engineering services, services, labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other facilities and services necessary for proper execution and completion of the Work on the Project, whether temporary or permanent and whether or not incorporated or to be incorporated in Work on the Project. The Design- Build Entity shall furnish architectural and engineering services for the preparation of Construction Documents necessary to complete the Project in accordance with the requirements of the Contract Documents. From the Agency-approved Construction Item 2A-50 Contract No. ___________________ A2-26 Documents, which are developed from the Agency-accepted Proposal, the Design- Build Entity shall furnish all labor, materials, equipment, services, and transportation necessary to complete construction of the Project, including site work, structures and utilities. G. The Design-Build Entity is required to deliver to Agency, if requested, any and all Design Materials including, but not limited to, calculations, preliminary drawings, construction drawings, shop drawings, electronic media data, tenant improvement documents, sketches, illustrations, specifications, descriptions, models, mock ups, and other information developed, prepared, furnished, or delivered in the prosecution of the Design Work. H. The Design-Build Entity is responsible for preparation of the Construction Documents for the entire Project. The Design-Build Entity is responsible for construction of the entire Project as required by the Contract Documents. 6.4 Labor; Working Hours. A. The Design-Build Entity shall provide competent, suitably qualified personnel to survey and lay out the Work and perform construction as required by the Contract Documents. The Design-Build Entity shall at all times maintain good discipline and order at the Site. The Design-Build Entity will provide all labor needed to complete the Work within the Contract Times. B. Except as otherwise required for the safety or protection of persons or the Work or property at the Site or adjacent thereto, and except as otherwise stated in the Contract Documents, all Work at the Site shall be performed during regular working hours, which are defined as hours between 8:00 a.m. and 5:00 p.m. any day Monday through Friday of any week except on Holidays and/or during Schedule Constraints defined in the Contract Documents. The Design-Build Entity will not permit the performance of Work on a Saturday, Sunday, any Holiday or during identified Schedule Constraints without Agency’s written consent given after prior written notice to Agency’s Representative. The Design-Build Entity shall be responsible for, and shall reimburse Agency for, all inspection costs outside regular working hours, including overtime. 6.5 Progress Meetings. A. The Design-Build Entity shall schedule and hold regular on-Site progress meetings at least weekly and at other times as requested by the Agency or as required by progress of the Work. The Design-Build Entity, Agency’s Representative, and all Subcontractors active on the Site shall attend each meeting. The Design-Build Entity may at its discretion request attendance by representatives of its Suppliers, manufacturers, and other Subcontractors. Agency’s Representative will preside at the progress meetings and will arrange for keeping and distributing the minutes. The purpose of the meetings is to review the progress of the Work, maintain coordination of efforts, discuss changes in scheduling, and resolve other problems which may develop. During each meeting, the Design-Build Entity shall present any issues which may impact its progress with a view to resolve these issues expeditiously. Item 2A-51 Contract No. ___________________ A2-27 6.6 Cost-Loaded CPM Progress Schedule and Recovery Schedule. A. Design-Build Entity shall adhere to the Project Schedule, which shall be a cost-loaded CPM progress schedule established in accordance with the Contract Documents as it may be adjusted from time to time as provided below: 1. Design-Build Entity shall submit to Agency’s Representative for acceptance proposed adjustments in the Project Schedule that will not result in changing the Project Completion Date. Such adjustments will comply with any provisions of the General Requirements applicable thereto. 2. Proposed adjustments in the Project Schedule that will change the Project Completion Date shall be submitted in accordance with the requirements of the Contract Documents. Adjustments in the Project Completion Date may only be made by a Change Order. 3. Should any of the following conditions exist, Agency may require Design-Build Entity to prepare, at no extra cost to Agency, a plan of action and a recovery schedule for completing the Work and achieving all contractual milestones within the Project Completion Date: a. The Design-Build Entity's monthly progress report indicates delays that are, in the opinion of Agency, of sufficient magnitude that Agency questions the Design-Build Entity's ability to complete the Work; b. The Project Schedule shows the Design-Build Entity to be thirty (30) or more Days behind the critical path at any time during construction; c. The Design-Build Entity desires to make changes in the logic or the planned duration of future activities of the Project Schedule which, in the opinion of Agency, are major in nature. d. The recovery schedule shall include proposed revisions to the Project Schedule, demonstrating how Design-Build Entity intends to achieve all contractual milestones including contract completion within the Project Completion Date. The submittal shall include a narrative describing the actions planned by the Design-Build Entity to recover the schedule. e. Design-Build Entity shall submit the recovery schedule within seven (7) Days of Agency’s request: (i) If Design-Build Entity asserts that Agency is responsible for the delay, failure to submit the recovery schedule within seven (7) Days of Agency’s request will be considered a concurrent delay event attributable to Design- Build Entity, and Design-Build Entity shall only be entitled to non- compensable adjustments to the Project Completion Date. (ii) If Design-Build Entity is responsible for the delay, this provision will not limit or affect Design-Build Entity's liability and failure to submit the recovery schedule with seven (7) Days of Agency’s request may result in Agency Item 2A-52 Contract No. ___________________ A2-28 withholding progress payments or other amounts due under the Contract Documents. f. Design-Build Entity is responsible for all costs associated with the preparation and execution of the recovery schedule, including any necessary recovery actions, which may include, but are not limited to, assignment of additional labor, and/or equipment, shift or overtime work, expediting of submittals or deliveries, overlapping of activities or sequencing changes to increase activity concurrence. g. Regardless of whether Agency directs Design-Build Entity to prepare a recovery schedule pursuant to this Article, Design-Build Entity shall promptly undertake appropriate action at no additional cost to Agency to recover the schedule whenever the current Project Schedule shows that the Design-Build Entity will not achieve a milestone and/or complete the Work within the Project Completion Date. B. Unless otherwise specified in the Contract Documents, Design-Build Entity shall provide and assume full responsibility for all services, materials, equipment, labor, transportation, construction equipment and machinery, tools, appliances, fuel, power, light, heat, telephone, water, sanitary facilities, temporary facilities, and all other facilities and incidentals necessary for the performance, testing, start up, and completion of the Work within the Project Completion Date. C. Failure of Agency’s Representative to discover errors or omissions in schedules that it has reviewed, or to inform the Design-Build Entity that the Design-Build Entity, Subcontractors, or others are behind schedule, or to direct or enforce procedures for complying with the Project Schedule shall not relieve the Design-Build Entity from its sole responsibility to perform and complete all Work on the Project within the Project Completion Date and shall not be a cause for an adjustment of the Project Completion Date or the Contract Price. D. The Design-Build Entity shall perform all Work on the Project in accordance with the current accepted Project Schedule. 6.7 Materials. A. All materials and equipment incorporated into the Work shall be as specified or, if not specified, shall be of good quality and new, except as otherwise provided in the Contract Documents. All materials furnished by the Design-Build Entity shall be of the most suitable grade for the purpose intended considering strength, ductility, durability, and best industry practice. B. All special warranties and guarantees required by the Contract Documents shall expressly run to the benefit of Agency. If required by Agency’s Representative, Design- Build Entity shall furnish satisfactory evidence (including reports of required tests) as to the source, kind, and quality of materials and equipment. C. All materials and equipment shall be stored, applied, installed, connected, erected, protected, used, cleaned, and conditioned in accordance with instructions of the applicable supplier, except as otherwise may be provided in the Contract Documents. Item 2A-53 Contract No. ___________________ A2-29 D. Materials shall be furnished in ample quantities and at such times as to ensure uninterrupted progress of the Work and shall be stored properly and protected as required by the Contract Documents. Design-Build Entity shall be entirely responsible for damage or loss by weather or other causes to materials or Work until Agency has accepted the Work. Materials shall be stored on the Project site in such manner so as not to interfere with any operations of Agency or any independent contractor. E. No materials, supplies, or equipment for Work under this Contract shall be purchased subject to any chattel mortgage or under a conditional sale or other agreement by which an interest therein or in any part thereof is retained by the seller or supplier. Design-Build Entity warrants good title to all material, supplies, and equipment installed or incorporated in the work and agrees upon completion to deliver the Work to Agency free from any claims, liens, or encumbrances. F. Inspection of Materials. 1. Materials furnished by the Design-Build Entity which will become a part of the Project shall be subject to inspection at any one or more of the following locations, as determined by Agency’s Representative: at the place of production or manufacture, at the shipping point, or at the site of the Work. To allow sufficient time to provide for inspection, the Design-Build Entity shall submit to Agency’s Representative, at the time of issuance, copies of purchase orders or other written instrument confirming procurement of the materials, including drawings and other pertinent information, covering materials on which inspection will be made. 2. No later than fourteen (14) Days prior to manufacture of material, Design-Build Entity shall inform Agency’s Representative, in writing, the date the material is to be manufactured. 3. The inspection of materials at any of the locations specified above or the waiving of the inspection thereof shall not impact whether the materials and equipment conform to the Contract Documents. Design-Build Entity will not be relieved from furnishing materials meeting the requirements of the Contract Documents due to Agency’s inspection or lack of inspection of the equipment or materials. Acceptance of any materials will be made only after materials are installed in the Project. 6.8 Submittals. A. Industry Standard Submittals. 1. Design-Build Entity will identify in the Construction Documents all industry standard submittals for all materials, systems, and equipment incorporated into the Work. B. Schedule of Submittals. 1. Design-Build Entity will prepare and deliver a Schedule of Submittals to Agency’s Representative that has been fully integrated with the Cost-Loaded CPM Progress Schedule and identifies each Submittal required by the Item 2A-54 Contract No. ___________________ A2-30 Construction Documents as well as the date on which Design-Build Entity will deliver each Submittal to Agency’s Representative. Each Submittal must be delivered to Agency’s Representative at least thirty (30) Days prior to the date the material or equipment is scheduled to be incorporated into the Work. The Design-Build Entity is responsible for any schedule delays resulting from the Submittal process. 2. Design-Build Entity must submit all submittals required by the Construction Documents in accordance with the Schedule of Submittals. If Design-Build Entity fails to submit the submittals in accordance with the Schedule of Submittals, Design-Build Entity will be solely liable for any delays or impacts caused by the delayed submittal, whether direct or indirect. Design-Build Entity will be liable for the time calculated from the date the submittal is due until the date a compliant submittal is made. A compliant submittal will be one that is complete and satisfies the requirements of the Contract Documents. 3. Where a Submittal, Shop Drawing or Sample is required by the Construction Documents, any related Work performed prior to Agency’s Representative’s review and approval of the pertinent Submittal will be at the sole expense and responsibility of the Design-Build Entity. C. Submittal Procedures. 1. The Design-Build Entity will follow the following procedures for each Submittal, Shop Drawing and Sample required by the Contract Documents: a. Transmit three (3) copies of each with a Submittal Transmittal. b. Transmittals will be sequentially numbered. The Design-Build Entity to mark revised Submittals with original number and sequential alphabetic suffix. c. Each Submittal will identify the Project, the Design-Build Entity, Subcontractor and supplier, pertinent Construction Document and detail number, and specification section number appropriate to the Submittal. d. The Design-Build Entity must sign each Submittal, certifying that it has reviewed and approved the Submittal, verified products required, field dimensions, adjacent construction work, and that coordination of information is according to requirements of the Project and Contract Documents. e. Identify variations in Contract Documents and product or system limitations that may differ and/or be detrimental to successful performance of completed Work. f. When a Submittal is revised for resubmission, the Design-Build Entity shall promptly address Agency comments and resubmit. The Design-Build Entity shall identify changes made since previous submission. Item 2A-55 Contract No. ___________________ A2-31 g. Agency’s review of Submittals shall not relieve the Design-Build Entity from responsibility for deviations from the Contract Documents unless the Design-Build Entity has, in writing, called Agency’s attention to such deviations at time of submission and Agency’s has taken no exception to the deviation. Agency’s review of Submittals shall not relieve the Design- Build Entity from responsibility for errors in the Submittals. h. Submittals not required by the Construction Documents or requested by Agency’s Representative will not be acknowledged or processed. i. Incomplete Submittals will not be reviewed by Agency’s Representative. Delays resulting from incomplete submittals are not the responsibility of Agency’s Representative. j. The Design-Build Entity shall not be entitled to any extension of the Project Completion Date as a result of the Submittal process. 6.9 Shop Drawing and Sample Submittal Procedures. A. Before submitting each Shop Drawing or Sample, Design-Build Entity shall have: 1. Reviewed and coordinated each Shop Drawing or Sample with other Shop Drawings and Samples and with the requirements of the Work and the Contract Documents; 2. Determined and verified all field measurements, quantities, dimensions, specified performance and design criteria, installation requirements, materials, catalog numbers, and similar information with respect thereto; 3. Determined and verified the suitability of all materials offered with respect to the indicated application, fabrication, shipping, handling, storage, assembly, and installation pertaining to the performance of the Work; and 4. Determined and verified all information relative to the Design-Build Entity’s responsibilities for means, methods, techniques, sequences, and procedures of construction, and safety precautions and programs incident thereto. B. With each Submittal, the Design-Build Entity shall give Agency’s Representative specific written notice of any variations that the Shop Drawing or Sample may have from the requirements of the Contract Documents. This notice shall be both a written communication separate from the Shop Drawings or Sample submittal and, in addition, a specific notation made on each Shop Drawing or Sample submitted to Agency’s Representative for review and approval of each such variation. C. Shop Drawings. 1. Data shown on the Shop Drawings will be complete with respect to quantities, dimensions, specified performance and design criteria, materials, and similar data to show Agency’s Representative the services, materials, and equipment Design-Build Entity proposes to provide and to enable Agency’s Representative to review the information Representative for assessing Item 2A-56 Contract No. ___________________ A2-32 conformance with information given and design concept expressed in Contract Documents. When required by individual Specification Sections, provide Shop Drawings signed and sealed by a professional engineer responsible for designing components shown on Shop Drawings. Shop Drawings must include signed and sealed calculations to support design in a form suitable for submission to and approval by authorities having jurisdiction. Design-Build Entity shall make revisions and provide additional information when required by authorities having jurisdiction. D. Samples. 1. Clearly identify each Sample as to material, Supplier, pertinent data such as catalog numbers, the use for which intended and other data as required to enable Agency’s Representative to review the submittal for assessing conformance with information given and design concept expressed in Contract Documents. Samples should be of appropriate size and detail to assess functional, aesthetic, color, texture, patterns and finish selection. E. Agency’s Representative’s Review. 1. Agency’s Representative will review Shop Drawings and Samples in accordance with the Schedule of Submittals. Agency’s Representative’s review and acceptance will be only to determine if the items covered by the Submittals will, after installation or incorporation in the Project, conform to the information given in the Contract Documents and be compatible with the design concept of the completed Project as a functioning whole as indicated by the Contract Documents. 2. Agency’s Representative’s review and approval will not extend to means, methods, techniques, sequences, or procedures of construction (except where a particular means, method, technique, sequence, or procedure of design or construction is specifically and expressly called for by the Contract Documents) or to safety precautions or programs incident thereto. The review and approval of a separate item as such will not indicate approval of the assembly in which the item functions. 3. Agency’s Representative’s review and acceptance shall not relieve the Design- Build Entity from responsibility for any variation from the requirements of the Contract Documents unless Agency’s Representative has given written approval of each such variation by specific written notation thereof incorporated in or accompanying the Submittal. F. The Design-Build Entity shall make corrections required by Agency’s Representative and shall return three (3) corrected copies of Shop Drawings and Product Data, and submit, as required, new Samples for review and approval. The Design-Build Entity shall direct specific attention in writing to revisions other than the corrections called for by Agency’s Representative on previous Submittals. Agency will review the first resubmittal of Shop Drawings at its cost. Agency reserves the right to reduce the Contract Price by Change Order for its cost for any subsequent reviews of Shop Drawing resubmittals. Item 2A-57 Contract No. ___________________ A2-33 6.10 Construction Documents. A. Construction Documents. 1. The A/E shall design the building systems and prepare the Construction Documents. The Construction Documents shall provide information customarily necessary in documents for projects of similar size, complexity, and quality. The Construction Documents shall include all information required by the building trades to complete the construction of the Project, other than such details customarily developed by others during construction. Agency’s review of the Construction Documents shall be conducted in accordance with the approved Project Schedule with procedures set forth in this Article. Such review shall not relieve the Design-Build Entity from its responsibilities under the Contract. Such review shall not be deemed an approval or waiver by Agency of any deviation from, or of the Design-Build Entity’s failure to comply with, any provision or requirement of the Contract Documents, unless such deviation or failure has been identified as such in writing in the Document submitted by the Design-Build Entity and approved by Agency. 2. However, it is acknowledged by the parties hereto that inherent in a Design-Build concept, bridging or otherwise, the production and review of Construction Documents may be a continuing process with portions thereof completed at different times. The Design-Build Entity will submit the Construction Document packages to Agency for review and approval in accordance with the agreed upon schedule, unless otherwise approved in writing by Agency. The Project Schedule shall indicate the times for Agency to review the completion of each such portion of the Construction Documents and a reasonable time for review of same. 3. The Design-Build Entity shall submit completed packages of the Construction Documents for review by Agency at the times indicated on the Project Schedule and as defined in the Scheduling Specification. Meetings between the Design- Build Entity and Agency to review the Construction Document packages, shall be scheduled at least every two weeks, or as otherwise agreed to by the parties, and held so as not to delay Work on the Project. The Design-Build Entity will conduct these design meetings with Agency in accordance with the schedule approved by Agency. The Design-Build Entity will be responsible for preparing and circulating for the parties review, design meeting minutes from all such meetings. B. Field Engineering. 1. The Design-Build Entity shall retain and pay expenses of a civil engineer or land surveyor to establish on the Project site the required reference points and benchmarks, establish building lines and elevations, check for building framing, plumbness, and establish on building frame the required basic grid lines. The engineer or land surveyor shall be properly licensed in the State of California. 2. The Design-Build Entity shall locate and protect control points prior to starting Work on the Project site and preserve permanent reference points during construction, and shall require the engineer or surveyor to replace control points which become lost or destroyed. Item 2A-58 Contract No. ___________________ A2-34 C. Geotechnical and Survey. 1. Agency may provide a geotechnical report to Design-Build Entity that shall not be considered a part of the Contract Documents and shall be informational only and may not be relied upon by Design-Build Entity to form its basis of design. Design- Build Entity shall be responsible for obtaining its own geotechnical report which includes supporting data, findings and recommendations; and also with a legal description and a project survey, as necessary, which shall become a part of the Contract Documents. The Design Work shall be consistent with both the findings and recommendations of the Design-Build Entity’s geotechnical report and legal description and Project survey, or such other geotechnical recommendations obtained by Design-Build Entity at its sole cost and expense. 2. The Design-Build Entity shall verify the location and depth (elevation) of all existing utilities and services before performing any excavation work. 3. Any additional tests, borings, etc. necessary to support the Construction Documents shall be the responsibility of the Design-Build Entity. 6.11 Dust Control. A. Design-Build Entity, at its expense, shall maintain all excavations, embankments, haul roads, permanent access rods, plant sites, waste disposal areas, borrow areas, and all other work areas free from dust. Industry accepted methods of dust control suitable for the area involved, such as sprinkling, chemical treatment, light bituminous treatment or similar methods, will be permitted. 6.12 Air Pollution. A. To the extent applicable, Design-Build Entity must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management Agency (SCAQMD) and/or California Air Resources Board (CARB). Although the SCAQMD and CARB limits and requirements are more broad, Design-Build Entity shall specifically be aware of their application to "portable equipment", which definition is considered by SCAQMD and CARB to include any item of equipment with a fuel-powered engine. Design-Build Entity shall indemnify Agency against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Design-Build Entity, its sub-consultants, or others for whom Design- Build Entity is responsible under its indemnity obligations provided for in this Agreement. B. The Design-Build Entity shall comply with all air pollution control rules, regulations, ordinances and statutes. All containers of paint, thinner, curing compound, solvent or liquid asphalt shall be labeled to indicate that the contents fully comply with the applicable material requirements. Design-Build Entity shall not discharge into the atmosphere from any source whatever smoke, dust, or other air contaminants in violation of the laws, rules, and regulations of the governmental entities having jurisdiction. Item 2A-59 Contract No. ___________________ A2-35 6.13 Patent Fees and Royalties. A. Design-Build Entity shall pay all license fees and royalties and assume all costs incident to the use in the performance of the Work or the incorporation in the Work of any invention, design, process, product, or device which is the subject of patent rights or copyrights held by others. If a particular invention, design, process, product, or device is specified in the Contract Documents for use in the performance of the Work and if, to the actual knowledge of Agency or Agency’s Representative, its use is subject to patent rights or copyrights calling for the payment of any license fee or royalty to others, the existence of such rights shall be disclosed by Agency in the Contract Documents. B. To the fullest extent permitted by Applicable Laws, Design-Build Entity shall indemnify, defend, and hold harmless Agency and Agency’s Representative, and the officers, directors, members, partners, employees, agents, consultants and subcontractors of each and any of them, from and against all claims, costs, losses, and damages (including but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to any infringement of patent rights or copyrights incident to the use in the performance of the Work or resulting from the incorporation in the Work of any invention, design, process, product, or device not specified in the Contract Documents or specified in the Contract Documents and identified as being subject to payment of any license fee or royalty to others required by patent rights or copyrights. 6.14 Permits and Licenses. A. Design-Build Entity shall obtain and pay for all other permits and licenses required for the Work, including excavation permit and permits for plumbing, mechanical and electrical work and for operations in or over public streets or right of way under jurisdiction of public agencies other than Agency. B. The Design-Build Entity shall arrange and pay for all off-site inspection of the Work related to permits and licenses, including certification, required by the Performance Specifications, drawings, or by governing authorities, except for such off-site inspections identified as Agency's responsibility in the Contract Documents. C. Before acceptance of the Work, the Design-Build Entity shall submit all licenses, permits, certificates of inspection and required approvals to Agency. 6.15 Applicable Laws. A. Design-Build Entity shall give all notices required by and shall comply with all Applicable Laws applicable to the performance of the Work. Except where otherwise expressly required by Applicable Laws, neither Agency nor Agency’s Representative shall be responsible for monitoring Design-Build Entity’s compliance with any Applicable Laws. If Design-Build Entity performs any Work knowing or having reason to know that it is contrary to Applicable Laws, Design-Build Entity shall bear all claims, costs, losses, and damages (including but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to such Work. Item 2A-60 Contract No. ___________________ A2-36 6.16 Labor Laws and Design-Build Entity’s Obligations. A. Hours of Work. 1. The Design-Build Entity and Subcontractors shall furnish sufficient forces to ensure the prosecution of the Work on the Project in accordance with the Construction Schedule and in such a manner to allow for the full and adequate completion of the Project within the Project Completion Date. 2. Work on the Project shall be performed during regular working hours, except that in the event of an emergency or when required to complete the Work on the Project in accordance with job progress, Work may be performed outside of regular working hours with advance written notice to Agency. Permissible working hours shall be between 8:00 a.m. to 5:00 p.m. and shall not be changed except with consent of Agency. 3. Eight (8) hours of work shall constitute a legal day’s work. The Design-Build Entity and each Subcontractor shall forfeit, as penalty to Agency, twenty-five dollars ($25) for each worker employed in the execution of Work on the Project by the Design- Build Entity or any Subcontractor for each day during which such worker is required or permitted to work more than eight (8) hours in any one day and forty (40) hours in any week in violation of the provisions of the Labor Code, and in particular, Section 1810 to Section 1815, except as provided in Labor Code Section 1815. 4. If the work done after hours is required by the Contract to be done outside the Design-Build Entity’s regular working hours, the costs of any inspections, if required to be done outside normal working hours, shall be borne by Agency. If Agency allows the Design-Build Entity to do Work outside regular working hours for the Design-Build Entity’s own convenience, the costs of any inspections required outside regular working hours shall be invoiced to the Design-Build Entity by Agency and deducted from the next progress payment. If the Design-Build Entity elects to perform Work outside the Inspector’s regular working hours, costs of any inspections required outside regular working hours shall be invoiced to the Design-Build Entity by Agency and deducted from the next progress payment. 5. No Work on the Project or other activities by or on behalf of the Design-Build Entity which presents a hazard or unreasonable disruption to Agency staff shall be allowed during normal working hours. The determination as to whether Work on the Project or some other activity presents a hazard or constitutes an unreasonable disruption to Agency staff shall be made by and pursuant to the sole discretion of a representative of Agency. All Work on the Project or other activities which could present a hazard or unreasonable disruption to Agency staff shall be performed before or after normal working hours, on weekends, or on an Agency recognized holiday. Neither the Design-Build Entity nor its Subcontractors or anyone working on behalf of the Design-Build Entity or Subcontractors shall be entitled to additional compensation or an extension of the Project Completion Date for having to arrange their Work schedule so as not to violate the provisions of this Article 6.17A. The Design-Build Entity, Subcontractors and persons working on behalf of the Design- Build Entity shall be expected to arrange such Work and other activities in advance so as to avoid creating monetary or time impacts. Item 2A-61 Contract No. ___________________ A2-37 B. Wage Rates, Travel, and Subsistence. 1. The Design-Build Entity is aware of the requirements of Labor Code Sections 1720 et seq. and 1770 et seq., as well as California Code of Regulations, Title 8, Section 16000 et seq. (“Prevailing Wage Laws”), which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects. Since the Work on the Project involves an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and since the total compensation is $1,000 or more, the Design-Build Entity agrees to fully comply with such Prevailing Wage Laws. Agency has obtained the prevailing wage rates from the Director of the Department of Industrial Relations, State of California. Copies of the prevailing wage rates are on file at Agency’s office and shall be made available to any interested party on request. the Design - Build Entity shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to perform the Project available to interested parties upon request, and shall post copies at the Design-Build Entity’s principal place of business and at the Project site. The Design-Build Entity shall defend, indemnify and hold Agency, its elected officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or allege failure to comply with the Prevailing Wage Laws. 2. Pursuant to Labor Code Section 1775, the Design-Build Entity is hereby advised that in the event that the Design-Build Entity fails to pay prevailing wages, the Design-Build Entity will be held liable for penalties and for shortfalls in wages and such amounts may be withheld from progress payments. the Design-Build Entity and each Subcontractor shall forfeit as a penalty to Agency not more than two hundred dollars ($200) for each Day, or portion thereof, for each worker paid less than the stipulated prevailing wage rate for any work done by him, or by any subcontract under him, in violation of the provisions of the Labor Code. The difference between such stipulated prevailing wage rate and the amount paid to each worker for each Day or portion thereof for which each worker was paid less than the stipulated prevailing wage rate shall be paid to each worker by the Design- Build Entity. 3. The Design-Build Entity shall post, at appropriate conspicuous points on the Project site, a schedule showing all determined general prevailing wage rates and all authorized deductions, if any, from unpaid wages actually earned. 4. The Design-Build Entity and subcontractors shall be required to pay the prevailing rate of wages in accordance with the Labor Code which such rates shall be made available at the Agency’s office or may be obtained online at http://www.dir.ca.gov and which must be posted at the job site. C. Labor Compliance/Payroll Records. 1. Pursuant to Labor Code Section 1776, the Design-Build Entity and each Subcontractor shall maintain weekly certified payroll records showing the name, address, social security number, work classification, straight time and overtime hours paid each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed in connection with the Project. The Design-Build Entity shall certify under penalty of perjury that Item 2A-62 Contract No. ___________________ A2-38 records maintained and submitted by the Design-Build Entity are true and accurate. The Design-Build Entity shall also require Subcontractor(s) to certify weekly payroll records under penalty of perjury. 2. In accordance with Labor Code section 1771.4, the Design-Build Entity and each Subcontractor shall furnish the certified payroll records directly to the Department of Industrial Relations (“DIR”) on a weekly basis and in the format prescribed by the DIR. This may include electronic submission. Design-Build Entity shall ensure full compliance with all requirements and regulations from the DIR relating to labor compliance monitoring and enforcement and all other applicable labor law. 3. Any stop orders issued by the DIR against Design-Build Entity or any Subcontractor that affect Design-Build Entity’s performance of Work, including any delay, shall be Design-Build Entity’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Design-Build Entity caused delay subject to any applicable liquidated damages and shall not be compensable by the Agency. Design-Build Entity shall defend, indemnify and hold the Agency, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the DIR against Design-Build Entity or any Subcontractor. 4. The payroll records described herein shall be certified and submitted by the Design-Build Entity at a time designated by the Agency. The Design-Build Entity shall also provide the following: a. A certified copy of the employee’s payroll records shall be made available for inspection or furnished to such employee or his or her authorized representative on request. b. A certified copy of all payroll records described herein shall be made available for inspection or furnished upon request of the DIR. 5. Unless submitted electronically, the certified payroll records shall be on forms provided by the Division of Labor Standards Enforcement (“DLSE”) of the DIR or shall contain the same information as the forms provided by the DLSE. 6. Any copy of records made available for inspection as copies and furnished upon request to the public or any public agency, the Agency, the Division of Apprenticeship Standards or the Division of Labor Standards Enforcement shall be marked or obliterated in such a manner as to prevent disclosure of an individual's name, address and social security number. The name and address of the Design-Build Entity awarded the Contract or performing the contract shall not be marked or obliterated. 7. In the event of noncompliance with the requirements of this Article 6.17C, the Design-Build Entity shall have ten (10) Days in which to comply subsequent to receipt of written notice specifying any item or actions necessary to ensure compliance with this Article 6.17C. Should noncompliance still be evident after such ten (10) day period, the Design-Build Entity shall, as a penalty to the Agency, forfeit One Hundred Dollars ($100.00) for each day, or portion thereof, for each Item 2A-63 Contract No. ___________________ A2-39 worker until strict compliance is effectuated. Upon the request of DIR, such penalties shall be withheld from contract payments. 8. In submitting the Proposal on this Project, it shall be the Design-Build Entity’s sole responsibility to evaluate and include the cost of complying with all labor compliance requirements under this Contract and Applicable Law in its Proposal. 9. The Design-Build Entity shall include provisions of this Article 6.17C in all Subcontracts and require Subcontractors to comply with these provisions at no additional cost to Agency. D. Apprentices. 1. The Design-Build Entity’s attention is directed to the provisions of Sections 1777.5, 1777.6, and 1777.7 of the Labor Code concerning employment of apprentices by the Design-Build Entity or any Subcontractor. The Design-Build Entity shall obtain a certificate of apprenticeship before employing any apprentice pursuant to Sections 1777.5, 1777.6, and 1777.7 of the Labor Code. Information relative to apprenticeship standards, wage schedules, and other requirements may be obtained from DIR, the Administrator of Apprenticeships, San Francisco, California, or from the Division of Apprenticeship Standards and its branch offices. Knowing violations of Labor Code section 1777.5 will result in forfeiture not to exceed one hundred dollars ($100.00) for each calendar day of non-compliance pursuant to Labor Code section 1777.7. E. Nondiscrimination/Equal Employment Opportunity. 1. Pursuant to Labor Code section 1735 and other applicable provisions of law, the Contractor and its Subcontractors shall not discriminate against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, or any other classifications protected by law on this Project. The Contractor will take affirmative action to insure that employees are treated during employment or training without regard to their race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual orientation, or any other classifications protected by law. F. Workers’ Compensation. 1. Pursuant to Labor Code section 1860, Design-Build Entity shall secure the payment of workers’ compensation to its employees in accordance with the provisions of Labor Code section 3700. By its signature hereunder, Design-Build Entity certifies that he is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker’s Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Work. G. Public Works Registration. Item 2A-64 Contract No. ___________________ A2-40 1. Pursuant to Labor Code sections 1725.5 and 1771.1, the Design-Build Entity and its Subcontractors must be registered with the Department of Industrial Relations prior to the execution of a contract to perform public works. By entering into this Contract, Design-Build Entity represents that it is aware of the registration requirement and is currently registered with the DIR. Design-Build Entity shall maintain a current registration for the duration of the Project. Design-Build Entity shall further include the requirements of Labor Code sections 1725.5 and 1771.1 in any Subcontract and ensure that all Subcontractors are registered at the time this Contract is entered into and maintain registration for the duration of the Project. 6.17 Debarment A. Contractors or subcontractors may not perform work on a public works project with a subcontractor who is ineligible to perform work on a public project pursuant to Labor Code section 1777.1 or 1777.7. Any contract on a public works project entered into between a contractor and a debarred subcontractor is void as a matter of law. A debarred subcontractor may not receive any public money for performing work as a subcontractor on a public works contract. Any public money that is paid, or may have been paid to a debarred subcontractor by a contractor on the project shall be returned to the Agency. The Design-Build Entity shall be responsible for the payment of wages to workers of a debarred subcontractor who has been allowed to work on the Project. 6.18 Taxes. A. The Design-Build Entity shall pay all sales, consumer, use, and other similar taxes required to be paid in accordance with the Applicable Law of the place of the Project which are applicable during the performance of the Project. In accordance with Revenue and Taxation Code Section 107.6, the Contract Documents may create a possessory interest subject to personal property taxation for which the Design-Build Entity will be responsible. 6.19 Use of Site and Other Areas. A. Limitation on Use of Site and Other Areas. The Design-Build Entity shall confine construction equipment, the storage of materials and equipment, and the operations of workers to the Site and other areas permitted by Applicable Laws, and shall not unreasonably encumber the Site and other areas with construction equipment or other materials or equipment. Design-Build Entity shall assume full responsibility for any damage to any such land or area, or to the Agency or occupant thereof, or of any adjacent land or areas resulting from the performance of the Work. Should any claim be made by any such Agency or occupant because of the performance of the Work, Design-Build Entity shall promptly settle with such other party by negotiation or otherwise resolve the claim by arbitration or other dispute resolution proceeding or at law. B. Removal of Debris. During the progress of the Work Design-Build Entity shall keep the Site and other areas free from accumulations of waste materials, rubbish, and other debris. Removal and disposal of such waste materials, rubbish, and other debris shall conform to Applicable Laws. Item 2A-65 Contract No. ___________________ A2-41 C. Cleaning. Prior to Completion of the Work, Design-Build Entity shall clean the Site and the Work and make it ready for utilization by Agency. At the completion of the Work Design-Build Entity shall remove from the Site all tools, appliances, construction equipment and machinery, and surplus materials and shall restore to original condition all property not designated for alteration by the Contract Documents. D. Loading Structures. Design-Build Entity shall not load nor permit any part of any structure to be loaded in any manner that will endanger the structure, nor shall Design- Build Entity subject any part of the Work or adjacent property to stresses or pressures that will endanger it. 6.20 Utility Usage. A. All temporary utilities, including but not limited to electricity, water, gas, and telephone, used on the Work shall be furnished and paid for by Design-Build Entity. Design-Build Entity shall provide necessary temporary distribution systems, including meters, if necessary, from distribution points to points on the Work where the utility is needed. Upon completion of the Work, Design-Build Entity shall remove all temporary distribution systems. All permanent meters installed shall be listed in the Design-Build Entity’s name until the Work is accepted. If Work is to be performed in existing Agency’s facilities, Design-Build Entity may, to the extent authorized by Agency in writing, use Agency’s existing utilities. If Design-Build Entity uses Agency utilities, it shall compensate Agency for utilities used. 6.21 Record Drawings. A. Design-Build Entity shall maintain in a safe place at the Site one record copy of the Contract Documents and written interpretations and clarifications in good order and annotated to show changes made during construction. On these, it shall mark all Project conditions, locations, configurations, and any other changes or deviations which may vary from the information represented in the original Contract Documents, including buried or concealed construction and utility features which are revealed during the course of construction. Said record drawings shall be supplemented by any detailed sketches as necessary or directed to fully indicate the Work as actually constructed. These master record drawings of the as-built conditions, including all revisions made necessary by Addenda and Change Orders shall be maintained up-to- date during the progress of the Project. Red ink shall be used for alterations and notes. Notes shall identify relevant Change Orders by number and date. B. Record drawings shall be accessible to Agency’s Representative at all times during the construction period. Upon Completion of the Project and as a condition of final acceptance, the Design-Build Entity shall finalize and deliver a complete set of record drawings to Agency’s Representative. The information submitted by the Design-Build Entity will be assumed to be correct, and the Design-Build Entity shall be responsible for, and liable to Agency, for the accuracy of such information, and for any errors or omissions which may or may not appear on the record drawings. 6.22 Safety and Protection. A. Design-Build Entity shall be solely responsible for all safety precautions and programs in connection with the Work. Such responsibility does not relieve Subcontractors of Item 2A-66 Contract No. ___________________ A2-42 their responsibility for the safety of persons or property in the performance of their work, nor for compliance with applicable safety laws. Design-Build Entity shall take all necessary precautions for the safety of, and shall provide the necessary protection to prevent damage, injury or loss to: 1. all persons on the Site or who may be affected by the Work; 2. all the Work and materials and equipment to be incorporated therein, whether in storage on or off the Site; and 3. other property at the Site or adjacent thereto, including trees, shrubs, lawns, walks, pavements, roadways, structures, utilities, and Underground Facilities not designated for removal, relocation, or replacement in the course of construction. B. Design-Build Entity shall comply with all Applicable Laws relating to the safety of persons or property, or to the protection of persons or property from damage, in jury, or loss; and shall erect and maintain all necessary safeguards for such safety and protection. Design-Build Entity shall notify owners of adjacent property and of Underground Facilities and other utility owners when prosecution of the Work may affect them, and shall cooperate with them in the protection, removal, relocation, and replacement of their property. Design-Build Entity shall comply with the applicable requirements of Agency’s safety programs, if any. Design-Build Entity shall inform Agency and Agency’s Representative of the specific requirements of Design-Build Entity’s safety program with which Agency’s and Agency’s Representative’s employees and representatives must comply while at the Site. C. All damage, injury, or loss to any property caused, directly or indirectly, in whole or in part, by Design-Build Entity, any Subcontractor, Supplier, or any other individual or entity directly or indirectly employed by any of them to perform any of the Work, or anyone for whose acts any of them may be liable, shall be remedied by Design-Build Entity. 6.23 Safety Representative. A. Design-Build Entity shall designate an OSHA-certified and experienced safety representative at the Project site whose duties and responsibilities shall be the prevention of accidents and the maintaining and supervising of safety precautions and programs. Design-Build Entity shall provide Agency’s Representative the name and contract information of the safety representative in writing. Design-Build Entity shall provide Agency’s Representative the name and contact information of the safety representative in writing. 6.24 Hazard Communication Programs. A. Design-Build Entity shall be responsible for coordinating any exchange of material safety data sheets or other hazard communication information required to be made available to or exchanged between or among employers at the Project site in accordance with Applicable Laws. Item 2A-67 Contract No. ___________________ A2-43 6.25 Emergencies. A. In an emergency affecting safety of life or of Work or of adjoining property, Design- Build Entity, without special instruction or authorization from Agency, shall act to prevent such threatened loss or injury; and Design-Build Entity shall so act, without appeal, if directed or instructed by Agency. Any compensation claimed by Design- Build Entity on account of emergency work shall be determined in accordance with the Contract Documents. 6.26 Guarantee. A. The Design-Build Entity unconditionally guarantees all Work on the Project will be completed in accordance with the requirements of the Contract Documents, and will remain free of defects in workmanship and materials for a period of one (1) year from the date of Project Completion, unless a longer guarantee period is specifically called for in the Contract Documents. However, a shorter guarantee period shall apply to landscape plants, trees, turf, etc. Trees or shrubs greater than one gallon in size at the time of planting shall be guaranteed for one (1) year, and all other plant material shall be guaranteed for six (6) months. The Design-Build Entity shall repair or replace any and all Work, together with any adjacent work that may have been damaged or displaced, which was not in accordance with the requirements of the Contract Documents, or that may be defective in its workmanship or material within the guarantee period specified in the Contract Documents, without any expense whatsoever to Agency; ordinary wear and tear and abuse excepted. B. The Design-Build Entity further agrees, within fourteen (14) Days, or as such shorter period as may be designated for emergency repairs, after being notified in writing by Agency, of any Work not in accordance with the requirements of the Contract Documents or any defects in the Work on the Project, that the Design-Build Entity shall commence and execute, with due diligence, all Work necessary to fulfill the terms of the guarantee. If Agency finds that the Design-Build Entity fails to perform any of the Work under the guarantee, Agency may elect to have the Work completed at the Design-Build Entity’s expense and the Design-Build Entity will pay costs of the Work upon demand. Agency will be entitled to all costs, including reasonable attorneys’ fees and consultants’ expenses necessarily incurred upon the Design-Build Entity’s refusal to pay the above costs. C. Where Defective Work (or damage to other Work resulting therefrom) has been corrected or removed and replaced, the Warranty period hereunder with respect to such Work shall be extended for an additional period of one (1) year after such correction or removal and replacement has been satisfactorily completed. D. Design-Build Entity’s obligations under this Article are in addition to any other obligation or warranty and do not limit Agency’s rights and remedies pursuant to California Code of Civil Procedure sections 337.10 and 337.15. or any other Applicable Law. E. Notwithstanding the foregoing provisions, in the event of an emergency constituting an immediate hazard to health or safety of Agency employees, property, or licensees, Agency may undertake, at the Design-Build Entity’s expense and without prior notice, all Work necessary to correct such condition(s) when it is caused by Work of the Item 2A-68 Contract No. ___________________ A2-44 Design-Build Entity not being in accordance with the requirements of the Contract Documents. 6.27 Warranty. A. The Design-Build Entity warrants to Agency that any and all materials, equipment and furnishings incorporated in the Project will be of good quality and new unless otherwise required or permitted by the Contract Documents. Work not conforming to these requirements, including substitutions not properly approved and authorized, may be considered defective. The foregoing warranty excludes improper operation, or normal wear and tear under normal usage under the control of Agency. Such warranty shall exclude warranties relating to design, warranty of fitness, and any other express or implied warranties other than as set forth herein or in the Contract Documents; provided, however, that the foregoing shall not impair the rights of Agency to maintain an action for breach of contract against the Design-Build Entity. Nothing contained in these Contract Documents pertaining to warranty or guarantee shall be construed as limiting any other rights Agency may have at law, including rights for latent defects under Code of Civil Procedure Section 337.15. 6.28 Indemnification. A. To the fullest extent allowed by law (including without limitation Civil Code Sections 2782 and 2782.8), the Design-Build Entity shall defend (with counsel of Agency’s choosing), indemnify and hold Agency, its officials, officers, agents, employees, and representatives free and harmless from and against any and all claims, demands, causes of action, costs, expenses, liabilities, losses, damages or injuries, in law or in equity, to property or persons, including wrongful death, regardless of whether the allegations are false, fraudulent, or groundless, arising out of, related to, or in connection with any acts, omissions or willful misconduct of Design-Build Entity, its officials, officers, employees, agents, consultants, contractors, and Subcontractors arising out of or in connection with the performance of the Work or this Contract, including claims made by Subcontractors for nonpayment, and including without limitation the payment of all attorney’s fees and other related costs and expenses except to the extent caused by the sole or active negligence or willful misconduct of the Agency. The Design-Build Entity shall defend, at the Design-Build Entity’s own cost, expense and risk, with counsel of Agency’s choosing, any and all such suits, actions or other legal proceedings of every kind that may be brought or instituted against Agency, its officials, officers, agents, employees and representatives. The Design-Build Entity shall pay and satisfy any judgment, award or decree that may be rendered against Agency, its officials, officers, agents, employees and representatives, in any such suit, action or other legal proceeding. The Design-Build Entity shall reimburse Agency, its officials, officers, agents, employees and representatives for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. The Design-Build Entity agrees to pay, or reimburse Agency and Agency’s Representative, for regulatory agency or court imposed fees, fines, or penalties imposed on Agency and Agency’s Representative arising from the Design-Build Entity’s failure to complete the Project in a timely manner and/or in accordance with the Contract Documents and any applicable permits or Applicable Laws. The Design-Build Entity’s responsibility and obligation to pay, or reimburse Agency and Agency’s Representative, for these fees, fines, or Item 2A-69 Contract No. ___________________ A2-45 penalties shall be in addition to the assessment of liquidated damages for late completion of the Project. This indemnity provision shall apply to all liability, as provided for above, regardless of whether any insurance policies are applicable. Insurance policy limits do not act as a limitation upon the amount of the indemnification to be provided by the Design-Build Entity. B. If the Design-Build Entity’s obligation to defend, indemnify, and/or hold harmless arises out of the Design-Build Entity’s performance as a “design professional” (as that term is defined under Civil Code Section 2782.8), then, and only to the extent required under Civil Code Section 2782.8, which is fully incorporated herein, the Design-Build Entity’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Design-Build Entity, and, upon Design-Build Entity obtaining a final adjudication by a court of competent jurisdiction, Design-Build Entity’s liability for such claim, including the cost to defend, shall not exceed the Design-Build Entity’s proportionate percentage of fault. C. In claims against any person or entity indemnified under this Article that are made by an employee of the Design-Build Entity or any Subcontractor, a person indirectly employed by the Design-Build Entity or any Subcontractor, or anyone for whose acts the Design-Build Entity or any Subcontractor may be liable, the indemnification obligation under this Article shall not be limited by any limitation on amount or type of damages, compensation, or benefits payable by or for Design-Build Entity or any Subcontractor under workers’ compensation acts, disability benefit acts, or other employee benefit acts or any other insurance limitations. D. In the event the Design-Build Entity and one or more than one other party is connected with an accident or occurrence covered by this indemnification, then all such parties shall be jointly and severally responsible to each of the Indemnitees for indemnification, and the ultimate responsibility among such indemnifying parties for the loss and expense of any such indemnification shall be resolved without jeopardy to any indemnitee listed in this Article. E. The provisions of this Article shall survive the termination of this Contract howsoever caused, and no payment, partial payment, or acceptance of occupancy in whole or part of the Work shall waive or release any of the provisions of this Article. 6.29 Superintendent. A. The Design-Build Entity shall employ a competent Superintendent satisfactory to Agency who shall be in attendance at the Project site at all times during the performance of the Construction Work. Superintendent shall represent the Design- Build Entity and communications given to, and received from, Superintendent shall be binding on the Design-Build Entity. Superintendent must be able to proficiently speak, read and write in English. Failure to maintain a Superintendent on the Project site at all times Work on the Project is in progress shall be considered a material breach of this Contract, entitling Agency to terminate the Contract or, alternatively, issue a Suspension Order until the Superintendent is on the Project site. If, by virtue of issuance of said Suspension Order, the Design-Build Entity fails to complete the Contract by the Project Completion Date, the Design-Build Entity will be assessed Liquidated Damages in accordance with the Contract. Item 2A-70 Contract No. ___________________ A2-46 B. Any changes to the assignment of the Superintendent shall receive prior written approval from Agency. The Superintendent may not perform the work of any trade, pick up materials, or perform any work not directly related to the supervision and coordination of the Construction Work at the Project site when work is in progress. In addition, the Design-Build Entity will provide all key personnel identified in the Contract for the time periods stipulated. 6.30 Project Staffing. A. The Design-Build Entity and each Subcontractor shall: furnish a competent and adequate staff as necessary for the proper administration, coordination, supervision, and superintendence of its portion of the Work on the Project; organize the procurement of all materials and equipment so that the materials and equipment will be available at the time they are needed for the Work; and keep an adequate force of skilled and fit workers on the job to complete all Work on the Project in accordance with all requirements of the Contract. B. Agency shall have the right, but not the obligation, to require the removal from the Project of the Design-Build Entity’s Representative, or any other superintendent, staff member, agent, or employee of any contractor, Subcontractor, material or equipment supplier, or any other entity working on the Project. Removal may be required for any reason designated by Agency, including but not limited to, failure or refusal to perform Work on the Project in a manner acceptable to Agency, uncooperative or incompetent performance on the Project, threatening the adequate or timely completion of the Project, or threatening the safety of persons or property. 6.31 Compliance With State Storm Water Permit for Construction. A. Storm, surface, ground, nuisance, or other waters may be encountered at various times during the Work. Design-Build Entity hereby acknowledges that it has investigated the risk arising from such waters, has prepared its Proposal accordingly, and assumes any and all risks and liabilities arising therefrom. B. Design-Build Entity shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Work including, without limitation, all applicable provisions of the Agency’s ordinances regulating discharges of storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.); the California Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. These include, but are not limited to California Regional Water Quality Control Boards (Santa Ana and San Diego Regions) Order No. R8-2009-0030 (NPDES Permit No. CAS 618030), Order No. R9-2009-0002, Order No. R8-2009-0045, Order No. R9-2013-0001 as amended by Order Nos. R9-2015- 0001 and R9-2015-0100, and State Water Resources Control Board Order No. 2010- 0014-DWQ, Order No. 2009-0009-DWQ, and Order No. 2012-0006-DWQ, and any amendment or renewal thereof. C. The Design-Build Entity shall be required to comply with all conditions of the State Water Resources Control Board National Pollutant Discharge Elimination System General Permit for Waste Discharge Requirements for Discharges of Stormwater Item 2A-71 Contract No. ___________________ A2-47 Runoff Associated with Construction Activity ("Permit") for all construction activity which results in the disturbance of in excess of one acre of total land area or which is part of a larger common area of development or sale. The Design-Build Entity shall be responsible for filing the Notice of Intent and for obtaining the Permit. If applicable, the Design-Build Entity shall be solely responsible for preparing and implementing a Stormwater Pollution Prevention Plan (“SWPPP”) prior to initiating work on the Project. It shall be the Design-Build Entity's responsibility to evaluate the cost of procuring the Permit and preparing the SWPPP as well as complying with the SWPPP and any necessary revision to the SWPPP to address storm water impacts. The Design-Build Entity shall comply with all requirements of the State Water Resources Control Board. The Design-Build Entity shall include all costs of compliance with specified requirements in the Price. For those Sites where construction activity results in the disturbance of less than one acre of total land area and/or do not need coverage under the Permit, the Design-Build Entity shall be responsible for preparing and implementing an Erosion and Sediment Control Plan in accordance with California Regional Water Quality Control Board Order No. R8-2009-0030, Order No. R9-2013- 0001 as amended by Order Nos. R9-2015-0001 and R9-2015-0100 and any amendment or renewal thereof. D. The Design-Build Entity shall be responsible for procuring, implementing and complying with the provisions of the Permit and the SWPPP, including the standard provisions, monitoring and reporting requirements as required by the Permit. The Design-Build Entity shall provide copies of all reports and monitoring information to the Agency’s Representative. The Design-Build Entity shall comply with the lawful requirements of any applicable municipality, the County, drainage authority, and other local agencies regarding discharges of storm water to separate storm drain system or other watercourses under their jurisdiction, including applicable requirements in municipal storm water management programs. E. Failure to comply with laws, regulations, and ordinances listed in this Article is a violation of federal and state law. Notwithstanding any other indemnity contained in this Contract, Design-Build Entity agrees to indemnify and hold harmless the Agency, its officials, officers, agents, employees and authorized volunteers from and against any and all claims, demands, losses or liabilities of any kind or nature which the Agency, its officials, officers, agents, employees and authorized volunteers may sustain or incur for noncompliance with the laws, regulations, and ordinances listed above, arising out of or in connection with the Project, except for liability resulting from the sole established negligence, willful misconduct or active negligence of the Agency, its officials, officers, agents, employees or authorized volunteers. Agency reserves the right to defend any enforcement action or civil action brought against the Agency for Design-Build Entity’s failure to comply with any applicable water quality law, regulation, or policy. Design-Build Entity hereby agrees to be bound by, and to reimburse the Agency for the costs associated with, any enforcement action and/or settlement reached between the Agency and any relevant enforcement entity. 6.32 Weekly Report. A. The Design-Build Entity shall prepare and submit to Agency, during both the Construction Documents Phase and the Construction Phase, weekly reports on the Work accomplished during the prior weekly period. Such reports weekly report shall Item 2A-72 Contract No. ___________________ A2-48 also set forth the Design-Build Entity’s projected progress for the forthcoming three weeks. 6.33 Other Reports. A. The Design-Build Entity will cooperate with Agency in preparing, or causing to be prepared, all or part of, periodic project reports required by state or federal agencies. 6.34 Notice of Labor Dispute. A. If the Design-Build Entity has knowledge that any actual or potential labor dispute is delaying, or threatens to delay, the timely performance of Work on the Project, the Design-Build Entity shall immediately give written notice including all relevant information to Agency. B. The Design-Build Entity agrees to insert the substance of this Article 6.34 in any subcontract to which a labor dispute may delay the timely performance of Work on the Project, except that each subcontract shall provide that in the event its timely performance is delayed or threatened by delay by any actual or potential labor dispute, the Subcontractor shall immediately notify the next higher tier Subcontractor or the Design-Build Entity, as the case may be, of all relevant information concerning the dispute. 6.35 Documents and Samples At Project Site. A. The Design-Build Entity shall maintain the following at the Project site: 1. One current copy of the Contract Documents (including Construction Documents), in good order and marked to record current changes and selections made during construction. 2. One copy of the prevailing wage rates applicable to the Project. 3. The current accepted Project Schedule. 4. Shop Drawings, Product Data, and Samples. 5. All other required submittals. 6.36 Cutting, Fitting, and Patching. A. The Design-Build Entity shall do all cutting, fitting, or patching work required to make all parts of the Project come together properly and to allow the Project to receive or be received by the work of Separate Contractors shown upon, or reasonably implied by, the Contract Documents. The Design-Build Entity shall not endanger the Project, or adjacent property by cutting, digging, or otherwise. The Design-Build Entity shall not cut or alter the work of any Separate Contractor without the prior written consent of Agency’s Representative. Item 2A-73 Contract No. ___________________ A2-49 6.37 Access to Work. A. Agency, Agency’s Representative, their consultants, and other persons authorized by Agency will at all times have access to the Work on the Project wherever it is in preparation or progress. The Design-Build Entity shall provide safe and proper facilities for such access and for inspection. 6.38 Concealed Or Unknown Conditions. A. Except and only to the extent provided otherwise in Articles 9 and 10, by signing the Contract, the Design-Build Entity agrees: 1. To bear the risk of concealed or unknown conditions, if any, which may be encountered in performing the Contract, as described in the Contract Documents, and/or can reasonably be inferred by the Design-Build Entity based on its experience and expertise; and 2. That the Design-Build Entity’s Contract Price for the Contract was made with full knowledge of this risk. In agreeing to bear the risk of concealed or unknown conditions, the Design-Build Entity understands that, except and only to the extent provided otherwise in Articles 9 and 10, concealed and/or unknown conditions shall not excuse the Design-Build Entity from its obligation to achieve full completion of the Project within the Project Completion Date, and shall not entitle the Design-Build Entity to an adjustment of the Contract Price. B. If concealed or unknown conditions are encountered which require, in the opinion of Agency’s Representative, design details which differ from those details shown in the Bridging Documents and Agency’s Representative finds that such revised design details will cause an increase or decrease in the cost of, or the time required for performance of the Contract, and if Agency agrees with Agency’s Representative’s determinations, Agency will issue a Change Order modifying the Contract to provide for the change in design details and to provide for an adjustment in the Contract Price and/or Project Completion Date pursuant to Articles 9 and 10 following receipt of a Change Order Request. C. If the Design-Build Entity encounters concealed or unknown conditions that differ materially from those anticipated or expected, the Design-Build Entity shall notify Agency’s Representative within three (3) Days in writing of such conditions so that Agency’s Representative can determine if such conditions require design details which differ from those design details shown in the Bridging Documents. Design-Build Entity shall be liable to Agency for any extra costs incurred as a result of the Design-Build Entity’s failure to give such notice. Design-Build Entity’s failure to give such notice shall constitute a waiver by Design-Build Entity of any additional compensation. 6.39 Liability for and Repair of Damaged Work. A. Design-Build Entity shall be liable for any and all damages and losses to the Project (whether by fire, theft, vandalism, earthquake, flood or otherwise) prior to Agency’s acceptance of the Project as fully completed. Item 2A-74 Contract No. ___________________ A2-50 6.40 Environmental Quality Protection A. Landscape and Vegetation Preservation 1. The Design-Build Entity shall exercise care to preserve the natural landscape and vegetation, and shall conduct operations so as to prevent unnecessary destruction, scarring, or defacing of the natural surroundings in the vicinity of the Work. Movement of crews and equipment within the rights-of-way and over routes provided for access to the Work shall be performed in a manner to prevent damage to property. When no longer required, construction roads shall be restored to original contours. Upon completion of the Work, and following removal of construction facilities and required cleanup, land used for construction purposes and not required for the completed installation shall be scarified and regraded, as required, so that all surfaces are left in a condition that will facilitate natural revegetation, provide for proper drainage, and prevent erosion. B. Protected Species 1. If, in the performance of the Work, evidence of the possible occurrence of any Federally listed threatened or endangered plant or animal is discovered, the Design-Build Entity shall notify the Agency Representative immediately, giving the location and nature of the findings. Written confirmation of the evidence, location and nature of the findings shall be forwarded to Agency within 2 Days. The Design-Build Entity shall immediately cease all construction activities in the immediate area of the discovery to the extent necessary to protect the endangered plant or animal. If directed by the Agency Representative, Design- Build Entity will refrain from working in the immediate area, suspend the Work in its entirety, or alter its performance to ensure full compliance with all applicable permits, laws and regulations. Any Agency directed changes to the Work as a result of a siting will be pursuant to the Contract Documents. Any costs or delays incurred by Agency or the Design-Build Entity due to unreasonable or false notification of an endangered plant or animal will be borne by the Design-Build Entity. C. Preservation of Historical and Archeological Resources 1. If, in the performance of the Work, Design-Build Entity should unearth cultural resources (for example, human remains, animal bones, stone tools, artifacts and/or midden deposits) through excavation, grading, watering or other means, the Design-Build Entity notify the Agency Representative immediately, giving the location and nature of the findings. The Design-Build Entity shall immediately cease all construction activities in the immediate area of the discovery to the extent necessary to protect the cultural resource. If directed by the Agency Representative, Design-Build Entity will refrain from working in the immediate area, suspend the Work in its entirety, or re-sequence and/or alter its performance to ensure full compliance with all applicable permits, laws and regulations. The Design-Build Entity shall provide such cooperation and assistance as may be necessary to preserve the cultural resources for removal or other disposition. Any Agency directed changes to the Work as a result of the cultural resource will be pursuant to the Contract Documents. Should Item 2A-75 Contract No. ___________________ A2-51 Design-Build Entity, without permission, injure, destroy, excavate, appropriate, or remove any cultural resource on or adjacent to the Site, it will be subject to disciplinary action, arrest and penalty under applicable law. The Design-Build Entity shall be principally responsible for all costs of mitigation and/or restoration of cultural resources related to the unauthorized actions identified above. Design-Build Entity shall be required to pay for unauthorized damage and mitigation costs to cultural resources (historical and archeological resources) as a result of unauthorized activities that damage cultural resources and shall indemnify Agency pursuant to the Contract Documents. 6.41 Technical Manuals; Spare Parts. A. The Design-Build Entity shall submit technical operation and maintenance information for each item of mechanical, electrical and instrumentation equipment in an organized manner in the Technical Manual. It shall be written so that it can be used and understood by Agency’s operation and maintenance staff. The Design-Build Entity shall furnish to Agency six (6) identical Technical Manuals. Each set shall consist of one or more volumes, each of which shall be bound in a standard binder. B. The Design-Build Entity shall furnish to Agency six (6) identical sets of spare parts information for all mechanical, electrical, and instrumentation equipment. The spare parts list shall include the current list price of each spare part. The spare parts list shall include those spare parts which each manufacturer recommends be maintained by Agency in inventory. Each manufacturer or supplier shall indicate the name, address, and telephone number of its nearest outlet of spare parts to assist Agency in ordering. The Design-Build Entity shall cross-reference all spare parts lists to the equipment numbers designated in the Contract Documents. The spare parts lists shall be bound in standard size, 3-ring binder. ARTICLE 7 -OTHER WORK AT THE PROJECT SITE 7.1 Related Work At Project Site. A. Nothing contained in the Contract Documents shall be interpreted as granting to Design-Build Entity exclusive occupancy at the Project site. Agency reserves the right to award separate contracts for, or to perform with its own forces, construction or operations related to the Work or other construction or operations at or affecting the Project site, including portions of Work on the Project which have been deleted by Change Order. The Design-Build Entity shall cooperate with Agency’s employees or through other direct contracts, or have other work performed by utility owners (collectively, “Other Contractors”). If such other work is not noted in the Contract Documents, then written notice thereof will be given to the Design-Build Entity prior to starting any such other work. The Design-Build Entity shall participate with Agency and Separate Contractors in joint review of construction schedules and Project requirements when directed to do so. The Design-Build Entity shall make necessary revisions to the Project Schedule after such joint review. B. Design-Build Entity shall be solely responsible for all costs associated with coordinating its Work with Separate Contractors. Design-Build Entity shall not be entitled to additional compensation from Agency for damages resulting from such simultaneous, collateral, and essential Work. If necessary to avoid or minimize such Item 2A-76 Contract No. ___________________ A2-52 damage or delay, Design-Build Entity shall redeploy its work forces to other parts of the Work, or adjust its Work schedule including reasonable acceleration of the Work. If a portion of the Work on the Project is dependent upon the proper execution or results of other construction or operations by Agency or Separate Contractors, the Design-Build Entity shall inspect such other design or construction or operations before proceeding with that portion of the Work on the Project. The Design-Build Entity shall promptly report to Agency’s Representative apparent discrepancies or defects which render the other design, construction or operations unsuitable to receive the Work on the Project. Unless otherwise directed by Agency’s Representative, the Design-Build Entity shall not proceed with the portion of the Work on the Project affected until apparent discrepancies or defects have been corrected. Failure of the Design-Build Entity to so report within a reasonable time after discovering such discrepancies or defects shall constitute an acknowledgment that the other construction or operations by Agency or Separate Contractors is suitable to receive the Work on the Project, except as to defects not then reasonably discoverable. C. Design-Build Entity shall afford each Separate Contractor proper and safe access to the Project site, provide a reasonable opportunity for the introduction and storage of materials and equipment and the execution of such other work, and properly coordinate the Work with theirs. Design-Build Entity shall do all cutting, fitting, and patching of the Work that may be required to properly connect or otherwise make its several parts come together and properly integrate with such other work. Design-Build Entity shall not endanger any work of others by cutting, excavating, or otherwise altering such work; provided, however, that Design-Build Entity may cut or alter others’ work with the written consent of Agency’s Representative and the others whose work will be affected. D. If the proper execution or results of any part of Design-Build Entity’s Work depends upon work performed by Separate Contractors, Design-Build Entity shall inspect such other work and promptly report to Agency’s Representative in writing any delays, defects, or deficiencies in such other work that render it unavailable or unsuitable for the proper execution and results of Design-Build Entity’s Work. Design-Build Entity’s failure to so report will constitute an acceptance of such other work as fit and proper for integration with Design-Build Entity’s Work except for latent defects and deficiencies in such other work. E. If any claims are made by Separate Contractors arising out of Design-Build Entity’s performance of the Work, Design-Build Entity shall be responsible to immediately resolve the dispute and indemnify Agency pursuant to the Contract Documents. F. Agency’s Representative shall arrange meetings with Separate Contractors performing work to plan coordination of construction activities but will not be responsible to direct coordination efforts. Any difference or conflict arising between Design-Build Entity and any Separate Contractor shall be submitted to Agency’s Representative for a decision in the matter. Design-Build Entity shall comply with direction from Agency’s Representative whose decision on coordination matters will be final. Item 2A-77 Contract No. ___________________ A2-53 7.2 For Delays by Others. A. By entering into this Contract, Design-Build Entity acknowledges that there may be Separate Contractors on the Project site whose work will be coordinated with that of Design-Build Entity. Design-Build Entity expressly warrants and agrees that Design- Build Entity will cooperate with Separate Contractors and will do nothing to delay, hinder, or interfere with the work of Separate Contractors, Agency, or Agency’s Representative. Design-Build Entity also expressly agrees that, in the event its Work is hindered, delayed, interfered with, or otherwise affected by a Separate Contractor, its sole remedy will be a direct action against the Separate Contractor. Design-Build Entity will have no remedy, and hereby expressly waives any remedy, against Agency or Agency’s Representative on account of delay, hindrance, interference, or other event caused by Separate Contractor. 7.3 Design-Build Entity’s Delay Or Damage. A. Design-Build Entity shall be liable to Agency and any Separate Contractor for the direct delay and disruption costs or damages incurred by such Separate Contractor as a result of Design-Build Entity’s wrongful action or inactions. ARTICLE 8 -SUBCONTRACTORS 8.1 Award of Subcontracts and Other Contracts for Portions of The Work. A. All Subcontractors shall be retained in accordance with the Subletting and Subcontracting Fair Practices Act (Public Contract Code Section 4100 et seq.). The Design-Build Entity shall not, without the consent of Agency: substitute any person or entity as a Subcontractor in place of the Subcontractor designated in the Proposal; or permit any such Subcontractor to be assigned or transferred, or allow it to be performed by any person or entity other than the original Subcontractor listed in the Proposal. Any assignment or substitution made without the prior written consent of the awarding authority or not in compliance with the Subletting and Subcontracting Fair Practices Act shall be void, and the assignees shall acquire no rights in the Contract. Any consent, if given, shall not relieve the Design-Build Entity or its Subcontractors from their obligations under the terms of the Contract. All requests by the Design-Build Entity for substitution will be handled through Agency’s Representative. B. The Design-Build Entity shall submit to Agency’s Representative after selecting Subcontractors pursuant to an open and competitive process, an updated expanded list of Subcontractors, along with their respective addresses, telephone numbers, e- mail addresses and contractor’s license numbers. The expanded list of Subcontractors shall be provided and/or updated no later than ten (10) Days after the date which the Design-Build Entity awards a contract for any portion of the Work to a Subcontractor not originally listed in the Design-Build Entity’s Proposal. C. Agency has the right to request all documentation that supports the Design-Build Entity’s selection of a Subcontractor. Agency shall have the right of final approval as to the qualifications of a Subcontractor to perform its designated scope of Work. Within Agency’s discretion, any Subcontractor may be deemed not qualified to perform Work on the Project if Agency or Agency’s Representative determines that the Item 2A-78 Contract No. ___________________ A2-54 Subcontractor fails to meet the requirements of the Contract Documents, or for any other reason. D. Any increase in the cost of the Work on the Project resulting from the replacement or substitution of a Subcontractor pursuant to this Article or as required by Agency or Agency’s Representative pursuant to this Article, shall be borne solely by the Design- Build Entity. The Design-Build Entity shall not be entitled to any increase in Contract Price or an extension of Project Completion Date due to such replacement or substitution. E. Any part of the Work on the Project performed for the Design-Build Entity by a Subcontractor shall be pursuant to a written subcontract. Each such subcontract shall require the Subcontractor, to the extent of the work to be performed by the Subcontractor, to be bound to the Design-Build Entity by the terms of the Contract Documents, to assume toward the Design-Build Entity all the obligations and responsibilities which the Design-Build Entity assumes towards the Agency by the Contract Documents, and to perform such portion of the work on the Project in accordance with the Contract Documents. Each such subcontract shall preserve and protect the rights of the Agency under the Contract Documents, with respect to the work to be performed by Subcontractor, so that subcontracting thereof will not prejudice such rights. The Design-Build Entity is responsible for reviewing and coordinating the Work of and among his Subcontractors and Design Professionals. This review and coordination includes, but is not limited to, resolution of any inconsistencies, errors or omissions. 8.2 Contingent Assignment of Subcontracts. A. The Design-Build Entity hereby assigns to Agency all its interest in first tier subcontracts now or hereafter entered into by the Design-Build Entity for performance of any part of the Work on the Project. The assignment will be effective upon acceptance by Agency in writing and only as to those subcontracts which Agency designates in writing. Agency may accept said assignment at any time during the course of the Work on the Project and prior to Final Completion in the event of a suspension or termination of the Design-Build Entity’s rights under the Contract Documents. Such assignment is part of the consideration to Agency for entering into the Contract with the Design-Build Entity and may not be withdrawn prior to Final Completion. ARTICLE 9 -CHANGE IN CONTRACT PRICE; CHANGE IN CONTRACT TIMES 9.1 Contract Change Orders. A. Agency, without invalidating the Contract, may order changes in the work consisting of additions, deletions or other revisions, and the Contract Price and/or Contract Time shall be adjusted accordingly. All such changes in the Work shall be authorized by written Change Order and shall be performed under the applicable conditions of the Contract Documents. A Change Order signed by the Design-Build Entity indicates the Design-Build Entity’s agreement therewith, including any adjustment in the Contract Price and/or Contract Time, and the full and final settlement of all costs (direct, indirect and overhead) related to the work authorized by the Change Order. No changes in the Work covered by this Contract shall exonerate any surety or any bond given in Item 2A-79 Contract No. ___________________ A2-55 connection with this Contract. No dispute, disagreement or failure of the Parties to reach agreement on the terms of a Change Order shall relieve the Design-Build Entity from the obligation to proceed with performance of the changed work promptly and expeditiously. Whenever any change is made as provided for herein, such change shall be considered and treated as though originally included in the Contract Documents, and shall be subject to all terms, conditions and provisions of the original Contract Documents. B. Design-Build Entity shall promptly execute changes in the Work as directed in writing by Agency even when the parties have not reached agreement on whether the change increases the scope of Work or affects the Contract Price or Contract Time, if any. All claims for additional compensation to the Design-Build Entity shall be presented in writing. No claim will be considered after the work in question has been done unless a written Change Order has been issued or a timely written notice of claim has been made by Design-Build Entity. Design-Build Entity shall not be entitled to claim or bring suit for damages, whether for loss of profits or otherwise, on account of any decrease or omission of any item or portion of Work to be done. 9.2 Contract Change Order Procedures. A. Agency Directive 1. The Agency may direct changes in the Work, including deletion of Work, by delivering a written work directive. To the extent the work directive results in a change to the Contract Price and/or Contract Time, Design-Build Entity must timely submit a Change Order Request and comply with all Change Order procedures in accordance with this Article. Notwithstanding issuance of a work directive, Design-Build Entity’s failure to timely submit a Change Order Request shall constitute a waiver by Design-Build Entity of any adjustment to the Contract Price and/or Contract Time for work performed under the directive. The Agency shall not be liable to Design-Build Entity for work performed or omitted by Design-Build Entity in reliance on verbal orders. 2. The Agency shall have the right to order changes in the Work by a unilateral Change Order setting forth the Agency’s determination of the reasonable additions or savings in the Contract Price and/or Contract Time. B. Design-Build Entity Change Order Requests 1. The Design-Build Entity agrees that one of the purposes of the Contract is to minimize the risk for Change Orders and reduce the likelihood of Change Orders. Change Order Requests shall be kept to a minimum. 2. The Design-Build Entity may request changes to the Contract Price and/or Contract Time for Agency directed changes in the Work or for Additional Work caused by the acts, errors, or omissions of the Agency, or caused by unforeseen conditions if, and only if, the Design-Build Entity follows the procedures specified in this Article. Work that should or could have been included as part of the Construction Documents or work resulting from ambiguities in the Construction Documents shall not be considered Additional Work and the Agency will not issue a Change Order for said work. Item 2A-80 Contract No. ___________________ A2-56 3. If Design-Build Entity intends to initiate a Change Order Request, then Design- Build Entity shall provide the Agency with written notice of the underlying facts and circumstances that give rise to the proposed change. Design-Build Entity shall submit the notice of change/delay prior to performance of the work and no later than five (5) Days after the Agency’s work directive or Design-Build Entity discovers the circumstances causing the need for the Change Order. To be considered valid and complete, the notice of change/delay shall include a general statement of the circumstances giving rise to the notice of change/delay and a reasonable order of magnitude estimate of the additional costs and/or time. If the circumstances give rise to both a cost adjustment and time extension, Design-Build Entity shall submit the notice of change and notice of delay concurrently. 4. A Change Order Request will only be deemed timely submitted if it is submitted prior to incurring any expense and within fourteen (14) Days from Design-Build Entity’s notice of change/delay. 5. A Change Order Request must state that it is a Change Order Request, state and justify the reason for the request, and specify the amount of any requested adjustment to the Contract Price and/or Contract Time, if any. The Change Order Request shall include all of the following information (unless inapplicable to the change): A detailed description of the circumstances giving rise to the request; A complete itemized cost proposal, including itemized pricing for costs; Supporting documentation for all costs; A time impact analysis showing the impact of the delay to the critical path to completion; If any added costs or information cannot be determined at the time of the Change Order Request, the reason the costs or information cannot be determined at the time; and Certification to the accuracy of the Change Order Request under penalty of perjury. The time impact analysis shall be in the critical path method format and shall show the sequencing of all critical and non-critical new activities and/or activity revisions affected by the delay, with logic ties to all affected existing activities noted on the schedule. The Agency may demand, and Design-Build Entity shall provide, any additional information supporting the Change Order Request, including but not limited to native electronic format version of schedules and time impact analyses. Design-Build Entity shall provide the requested additional information within five (5) Days of the request. 6. If the Agency denies the Change Order Request or disagrees with the proposal submitted by Design-Build Entity, it will notify the Design-Build Entity, and the Agency will provide its opinion of the appropriate change to the Contract Price and/or Contract Time. If no agreement can be reached, the Agency shall have the right to order the work by a unilateral Change Order setting forth the Agency’s determination of the reasonable additions or savings in the Contract Price and/or Contract Time, if any. The Agency’s determination shall become final and binding if the Design-Build Entity fails to submit a Claim in writing to the Agency within fourteen (14) Days of the issuance of the unilateral Change Order, disputing the terms of the unilateral Change Order and providing such supporting documentation for its position as the Agency may reasonably require. Item 2A-81 Contract No. ___________________ A2-57 C. Change Order Format 1. A Change Order signed by the Contractor indicates the Contractor's agreement therewith, including any adjustment in compensation or extension of time, and the full and final settlement of all costs (direct, indirect and overhead) related to the Work authorized by the Change Order. 2. The Agency may designate the forms to be used for notices, Change Order Requests, and Change Orders. If so designated, Design-Build Entity may only use such forms. Design-Build Entity shall not reserve a right to assert impact costs, extended job site costs, extended overhead, constructive acceleration and/or actual acceleration beyond what is stated in the Change Order. No Claims shall be allowed for impact, extended overhead costs, constructive acceleration and/or actual acceleration due to a multiplicity of changes and/or clarifications. The Design-Build Entity may not change or modify the Agency’s Change Order form in an attempt to reserve additional rights. 9.3 Determining Adjustments to Compensation. A. Limitation on Costs. Design-Build Entity shall not be entitled to any compensation for Work subject to a Change Order except as expressly set forth in this Article. The mark-up added in instances of Additional Work shall constitute the entire amount of profit, any mark-ups, any field or home office overhead costs, including personnel, equipment or office space, any materials, or any costs of equipment idle time for such Work. B. Lump Sum Change Orders. Whenever possible, any changes affecting compensation shall be in a lump sum mutually agreed by the Design-Build Entity and the Agency. C. Time and Materials Change Orders. The Agency may direct the Design-Build Entity to proceed with the Additional Work with payment to be made on the basis of actual cost of the labor and materials required to complete the Additional Work. If the Project is federally funded, a time and materials Change Order shall only be issued after a determination that no other Change Order is suitable and the Change Order shall include a ceiling price that the Design-Build Entity exceeds at its own risk. D. Federally Funded Projects. For any change in price to the Contract, general and administrative expenses shall be negotiated and must conform to the cost principles set forth under at 2 C.F.R. Part 200, subpart E, and profit shall be negotiated as a separate element of the cost. To establish a fair and reasonable profit, consideration must be given to the complexity of the Additional Work to be performed, the risk borne by the Design-Build Entity, the Design-Build Entity's investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work. E. Allowed Costs. Estimates for lump sum quotations and accounting for time-and- material work shall be limited to direct expenditures necessitated specifically by the change and shall be segregated as follows Item 2A-82 Contract No. ___________________ A2-58 1. Labor. The costs of labor will be the actual cost for wages prevailing locally for each craft or type of worker at the time the Additional Work is done, plus employer payments of payroll taxes and insurance, health and welfare, pension, vacation, apprenticeship funds, and other direct costs resulting from federal, state or local laws, as well as assessment or benefits required by lawful collective bargaining agreements. The use of a labor classification which would increase the Additional Work cost will not be permitted unless the Design-Build Entity establishes the necessity for such additional costs. Labor costs for equipment operators and helpers shall be reported only when such costs are not included in the invoice for equipment rental. 2. Materials. The cost of materials reported shall be at the lowest current price at which such materials are locally available in the quantities involved, plus sales tax, freight and delivery. Materials costs shall be based upon supplier or manufacturer’s invoice. 3. Tool and Equipment Use. Regardless of ownership, the rates to be used in determining equipment use shall not exceed listed rates prevailing locally at equipment rental agencies, or distributors, at the time the work is performed. The Design-Build Entity shall furnish cost data supporting the establishment of the rental rate. The rental rate to be applied for use of each items of equipment shall be the rate resulting in the least total cost to the Agency for the total period of use. The Agency shall the make the final determination as to an equitable rental rate for the equipment. No payment will be made for the use of small tools, which have a replacement value of $1,000 or less. a. The rental time to be paid for equipment shall be the time the equipment is in productive operation on the Additional Work being performed. Rental time will not be allowed while equipment is inoperative due to breakdowns. b. All equipment shall, in the opinion of the Agency, be in good working condition and suitable for the purpose for which the equipment is to be used. Equipment with no direct power unit shall be powered by a unit of at least the minimum rating recommended by the manufacturer. c. Before construction equipment is used on any Additional Work, the Design- Build Entity shall plainly stencil or stamp an identifying number thereon at a conspicuous location, and shall furnish to the Agency, in duplicate, a description of the equipment and its identifying number. d. When hourly rates are listed, any part of an hour less than 30 minutes of operation shall be considered to be 1/2-hour of operation, and any part of an hour greater than 30 minutes will be considered one hour of operation. When daily rates are listed, any part of a day less than 4 hours operation shall be considered to be 1/2-day of operation. 4. Allowed Mark-up. The allowed mark-up for any and all overhead (including supervision and home and field office costs) and profit on work added to the Contract shall be determined in accordance with the following provisions: Item 2A-83 Contract No. ___________________ A2-59 a. “Net Cost” is defined as the actual costs of labor, materials and tools and equipment only, excluding overhead and profit. The costs of applicable insurance and bond premium will be reimbursed to the Design-Build Entity and Subcontractors at cost only, without mark-up. Design-Build Entity shall provide the Agency with documentation of the costs, including but not limited to payroll records, invoices, and such other information as the Agency may reasonably request. b. For Work performed by the Design-Build Entity’s forces the allowed mark-up shall not exceed fifteen (15%) percent of labor costs, ten percent (10%) of material costs, and ten percent (10%) of the cost of tools and equipment use. c. For Work performed by a Subcontractor, the added cost for overhead and profit shall not exceed fifteen percent (15%) of the Subcontractor’s Net Cost of the Work to which the Design-Build Entity may add up to five percent (5%) of the Subcontractor’s Net Cost. d. For Work performed by a sub-subcontractor, the added cost for overhead and profit shall not exceed fifteen percent (15%) of the sub-subcontractor’s Net Cost for Work to which the Subcontractor and Design-Build Entity may each add up to an additional five percent (5%) of the Net Cost of the lower tier subcontractor. e. No additional mark-up will be allowed for lower tier subcontractors, and in no case shall the added cost for overhead and profit payable by the Agency exceed twenty-five percent (25%) of the Net Cost as defined herein, of the party that performs the Work. f. Calculation of the mark-up will be subject to the limitations above and to calculation as further detailed in (b)(B)(5) above. 5. Documentation of Time-and-Material Costs. a. T&M Daily Sheets. Design-Build Entity must submit timesheets, materials invoices, records of equipment hours, and records of rental equipment hours to the Agency’s for an approval signature each day that Work is performed on a time-and-material basis. The Engineer’s signature on time sheets only serves as verification that the Work was performed and is not indicative of the Agency’s agreement to Design-Build Entity’s entitlement to the cost. b. T&M Summary Sheet. Design-Build Entity shall submit a T&M Summary Sheet, which shall include total actual costs, within five (5) Days following completion of Additional Work on a time-and-material basis. Design-Build Entity’s total actual cost shall be presented in a summary table in an electronic spreadsheet file by labor, material, equipment, and any other costs, along with documentation supporting the costs. Design-Build Entity’s failure to submit the T&M Summary Sheet within five (5) Days of completion of the Additional Work will result in Design-Build Entity’s waiver for any reimbursement of any costs associated with the Additional Work. Item 2A-84 Contract No. ___________________ A2-60 c. Excluded Costs. The following costs or any other home or field office overhead costs, all of which are to be considered administrative costs covered by the Design-Build Entity’s mark-up, shall not be allowed costs and shall not be included in any lump sum proposals or time-and-materials invoices: d. Overhead Cost. Payroll costs and other compensation of Design-Build Entity’s officers, executives, principals, general managers, engineers, architects, estimators, attorneys, auditors, accountants, purchasing and contracting agents, timekeepers, clerks, and other personnel employed by Design-Build Entity whether at the Site or in Design-Build Entity’s principal office or any branch office, material yard, or shop for general administration of the Work; e. Office Expenses. Expenses of Design-Build Entity’s principal and branch offices; f. Capital Expenses. Any part of Design-Build Entity’s capital expenses, including interest on Design-Build Entity’s capital employed for the Additional Work and charges against Design-Build Entity for delinquent payments; g. Negligence. Costs due to the negligence of Design-Build Entity or any Subcontractor or Supplier, or anyone directly or indirectly employed by any of them or for whose acts any of them may be liable, including without limitation the correction of Defective Work, disposal of materials or equipment wrongly supplied, and making good any damage to property; h. Small Tools. Cost of small tools valued at less than $1,000 and that remain the property of Design-Build Entity; i. Administrative Costs. Costs associated with the preparation of Change Orders (whether or not ultimately authorized), cost estimates, or the preparation or filing of Claims; j. Anticipated Lost Profits. Expenses of Design-Build Entity associated with anticipated lost profits or lost revenues, lost income or earnings, lost interest on earnings, or unpaid retention; k. Home Office Overhead. Costs derived from the computation of a “home office overhead” rate by application of the Eichleay, Allegheny, burden fluctuation, or other similar methods; l. Special Consultants and Attorneys. Costs of special consultants or attorneys, whether or not in the direct employ of Design-Build Entity, employed for services specifically related to the resolution of a Claim, dispute, or other matter arising out of or relating to the performance of the Additional Work. m. Other. Other overhead or general expense costs of any kind and the cost of any item not specifically and expressly included in the Contract Documents; including but not limited to: submittals, drawings, field drawings, shop drawings, including submissions of drawings; field inspection; general superintendence; computer services; reproduction services; salaries of project engineer, superintendent, timekeeper, storekeeper, and secretaries; janitorial Item 2A-85 Contract No. ___________________ A2-61 services; small tools, incidentals and consumables; temporary on-site facilities (offices, telephones, high speed internet access, plumbing, electrical power, lighting; platforms, fencing, water); surveying; estimating; protection of work; handling and disposal fees; final cleanup; other incidental work; related warranties; insurance and bond premiums. n. Compliance with Federal Cost Principles. If the Project is federally funded, any costs that are not allowable, reasonable and allocable to the Project, under generally accepted accounting principles and the applicable federal requirements. 9.4 Design-Build Entity’s Wavier of Further Relief. A. DESIGN-BUILD ENTITY’S FAILURE TO PROVIDE A COMPLETE AND TIMELY NOTICE OF A CHANGE ORDER REQUEST OR TO COMPLY WITH ANY OTHER REQUIREMENT OF THIS ARTICLE, SHALL CONSTITUTE A WAIVER BY DESIGN- BUILD ENTITY OF THE RIGHT TO AN ADJUSTMENT OF THE CONTRACT PRICE AND/OR PROJECT COMPLETION DATE ON ACCOUNT OF SUCH CIRCUMSTANCES AND A WAIVER OF ANY RIGHT TO FURTHER RECOURSE OR RECOVERY BY REASON OF OR RELATED TO SUCH CHANGE BY MEANS OF THE CLAIMS DISPUTE RESOLUTION PROCESS OR BY ANY OTHER LEGAL PROCESS OTHERWISE PROVIDED FOR UNDER APPLICABLE LAWS. B. Design-Build Entity recognizes and acknowledges that timely submission of a formal written notice of change/delay and Change Order Request, whether or not the circumstances of the change may be known to the Agency or available to the Agency through other means, is not a mere formality but is of crucial importance to the ability of the Agency to promptly identify, prioritize, evaluate and mitigate the potential effects of changes. Any form of informal notice, whether verbal or written (including, without limitation, statements in requests for information, statements in Submittals, statements at any job meeting or entries on monthly reports, daily logs or job meeting minutes), that does not strictly comply with the formal requirements of this Article, shall accordingly be insufficient. 9.5 Agency Reservation of Rights. A. By signing the Contract, the parties agree that Agency has the right to do any or all of the following, which are reasonable and within the contemplation of the parties: 1. To order changes in the Work, including without limitation: Changes to correct errors or omissions caused by Agency, if any, in the Contract Documents; Changes resulting from Agency’s decision to change the Work subsequent to execution of the Contract; and Changes due to unforeseen conditions. 2. To suspend Work on the Project or any part thereof. 3. To delay Work on the Project, including without limitation, delays resulting from the failure of Agency or Agency’s Representative to timely perform any Contract obligation and delays for Agency’s convenience. Item 2A-86 Contract No. ___________________ A2-62 ARTICLE 10 -TIME FOR COMPLETION; LIQUIDATED DAMAGES 10.1 Progress and Completion. A. The Design-Build Entity shall proceed expeditiously with adequate forces and shall achieve full completion of the Work by the Project Completion Date. If Agency’s Representative determines and notifies the Design-Build Entity that the Design-Build Entity’s progress is such that the Design-Build Entity will not achieve full completion of the Work by the Project Completion Date, the Design-Build Entity shall immediately and at no additional cost to Agency, take all measures necessary, including working such overtime, additional shifts, Sundays, or holidays as may be required to ensure that the entire Project is completed within the Project Completion Date. Upon receipt of such notice from Agency’s representative, the Design-Build Entity shall immediately notify Agency’s Representative of all measures to be taken to ensure full completion of the Work within the Project Completion Date. The Design-Build Entity shall reimburse Agency for any extra costs or expenses (including the reasonable value of any services provided by Agency’s employees) incurred by Agency as the result of such measures. 10.2 Time for Completion. A. The time for completion set forth in Contract shall commence: (1) on the date stated in the Notice to Proceed, or (2) if the Notice to Proceed does not specify a commencement date, then on the date of the Notice to Proceed and shall be completed by Design-Build Entity in the time specified in the Contract Documents. The Agency is under no obligation to consider early completion of the Project; and the Project Completion Date shall not be amended by the Agency’s receipt or acceptance of the Design-Build Entity’s proposed earlier completion date. Any difference in time between the Design-Build Entity’s early completion and the Project Completion Date shall be considered a part of the Project float. Design-Build Entity shall not be entitled to compensation, and the Agency will not compensate Design-Build Entity, for delays which impact early completion. Design-Build Entity shall not, under any circumstances, receive additional compensation from the Agency (including but not limited to indirect, general, administrative or other forms of overhead costs) for the period between the time of earlier completion proposed by the Design-Build Entity and the Project Completion Date. 10.3 Liquidated Damages. A. If the Work is not completed as stated in the Contract Documents, it is understood that the Agency will suffer damage. In accordance with Government Code section 53069.85, being impractical and infeasible to determine the amount of actual damage, it is agreed that Design-Build Entity shall pay to the Agency as fixed and liquidated damages, and not as a penalty, the sum stipulated in the Contract for each calendar day of delay until the Work is fully completed. Design-Build Entity and its surety shall be liable for any liquidated damages. Any money due or to become due the Design- Build Entity may be retained to cover liquidated damages. Item 2A-87 Contract No. ___________________ A2-63 10.4 Inclement Weather. A. Design-Build Entity shall abide by the Agency’s determination of what constitutes inclement weather. Time extensions for inclement weather shall only be granted when the Work stopped during inclement weather is on the critical path of the Project schedule. Design-Build Entity shall not be entitled to reverse liquidated damages for time extensions resulting from inclement weather. 10.5 Extension of Time. A. Design-Build Entity’s entitlement to an extension of the Contract Time is limited to an Agency-caused extension of the critical path, reduced by the Design-Build Entity’s concurrent delays, and established by a proper time impact analysis. Design-Build Entity shall not be charged liquidated damages because of any delays in completion of the Work due to unforeseeable causes beyond the control and without the fault or negligence of Design-Build Entity (or its Subcontractors or Suppliers). The Agency shall ascertain the facts and extent of delay and grant extension of time for completing the Work when, in its judgment, the facts justify such an extension. Design-Build Entity shall not be entitled to an adjustment in the Contract Times for delays within the control of Design-Build Entity. Delays attributable to and within the control of a Subcontractor or Supplier shall be deemed to be delays within the control of Design-Build Entity. 10.6 Force Majeure. A. In accordance with Sections 10.5 above, the Design-Build Entity shall not be charged liquidated damages, and the Agency shall not be responsible, for any delays resulting from a Force Majeure Event. If a delay to the critical path results from a Force Majeure Event, the Design-Build Entity will be entitled to a time extension but will not receive an adjustment to the Contract Price or any other compensation. Such a non- compensable adjustment shall be Design-Build Entity’s sole and exclusive remedy for such delays. 10.7 No Damages for Reasonable Delay. A. The Agency’s liability to Design-Build Entity for delays for which the Agency is responsible shall be limited to only an extension of time unless such delays were unreasonable under the circumstances. In no case shall the Agency be liable for any costs which are borne by the Design-Build Entity in the regular course of business, including, but not limited to, home office overhead and other ongoing costs. Damages caused by unreasonable Agency delay shall be based on actual costs only, no proportions or formulas shall be used to calculate any delay damages. 10.8 Procedure for Time Extensions and Delay Damages. A. Design-Build Entity shall not be entitled to any extension of time or any reverse liquidated damages unless Design-Build Entity properly notices the delay and adjustment to compensation and requests a Change Order in accordance with the Contract Documents. Design-Build Entity’s failure to timely and fully comply with the Change Order procedures in the Contract Documents shall constitute a waiver of Design-Build Entity’s right to a time extension or reverse liquidated damages. Item 2A-88 Contract No. ___________________ A2-64 ARTICLE 11 -TEST AND INSPECTIONS; CORRECTION, REMOVAL, OR ACCEPTANCE OF DEFECTIVE WORK; NOTICE OF DEFECTS 11.1 Notice of Defective Work. A. Prompt notice of all Defective Work of which Agency or Agency’s Representative has actual knowledge will be given to Design-Build Entity. Defective Work may be rejected, corrected, or accepted as provided in the Contract Documents. 11.2 Access to Work. A. Agency, Agency’s Representative, their consultants and other representatives and personnel, independent testing laboratories, and governmental agencies with jurisdictional interests will have access to the Project site and the Work at reasonable times for their observation, inspection, and testing. Design-Build Entity shall provide them proper and safe conditions for such access and advise them of Design-Build Entity’s safety procedures and programs. 11.3 Tests and Inspections. A. Design-Build Entity shall give Agency’s Representative timely notice of readiness of the Work for all required inspections, tests, or approvals and shall cooperate with inspection and testing personnel to facilitate required inspections or tests. B. Except as provided by the Contract Documents, Agency shall employ and pay for the services of an independent testing laboratory to perform all inspections, tests, or approvals required by the Contract Documents. C. If Applicable Laws of any public body having jurisdiction require any Work (or part thereof) specifically to be inspected, tested, or approved by an employee or other representative of such public body, Design-Build Entity shall assume full responsibility for arranging and obtaining such inspections, tests, or approvals, pay all costs in connection therewith, and furnish Agency’s Representative the required certificates of inspection or approval. D. Design-Build Entity shall be responsible for arranging and obtaining and shall pay all costs in connection with any inspections, tests, or approvals required for Agency and Agency’s Representative’s acceptance of materials or equipment to be incorporated in the Work; or acceptance of materials, mix designs, or equipment submitted for approval prior to Design-Build Entity’s purchase thereof for incorporation in the Work. Such inspections, tests, or approvals shall be performed by organizations acceptable to Agency. E. Agency will provide inspection during normal working hours from 8:00 a.m. to 5:00 p.m. Monday through Friday. Inspection before or after this time will be charged to the contractor as reimbursable inspection time. Inspections on weekends requires two days’ notice for review and approval. Upon written request and approval the 8.5 hour working day may be changed to other limits subject to Agency ordinance. Item 2A-89 Contract No. ___________________ A2-65 11.4 Uncovering Work. A. If any Work (or the work of others) that is to be inspected, tested, or approved is covered by Design-Build Entity without written concurrence of Agency’s Representative, Design-Build Entity shall, if requested by Agency’s Representative, uncover such Work for observation. B. Uncovering Work shall be at Design-Build Entity’s expense unless Design-Build Entity has given Agency’s Representative timely notice of Design-Build Entity’s intention to cover the same and Agency’s Representative has not acted with reasonable promptness in response to such notice. C. If Design-Build Entity has given Agency’s Representative timely notice of Design-Build Entity’s intention to cover the work and Agency’s Representative has not acted with reasonable promptness in response to such notice, and Agency’s Representative later considers it necessary or advisable that covered Work be observed by Agency’s Representative or inspected or tested by others, Design-Build Entity, at Agency’s Representative’s request, shall uncover, expose, or otherwise make available for observation, inspection, or testing as Agency’s Representative may require, that portion of the Work in question, furnishing all necessary labor, material, and equipment. 1. If it is found that the uncovered Work is defective, Design-Build Entity shall pay all claims, costs, losses, and damages (including but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to such uncovering, exposure, observation, inspection, and testing, and of satisfactory replacement or reconstruction (including but not limited to all costs of repair or replacement of work of others); and Agency shall be entitled to an appropriate decrease in the Contract Price. 2. If the uncovered Work is not found to be defective, Design-Build Entity shall be allowed an increase in the Contract Price and/or an extension of the Contract Times, directly attributable to such uncovering, exposure, observation, inspection, testing, replacement, and reconstruction. 11.5 Agency May Stop The Work. A. If the Work is defective, Agency may in its sole discretion order Design-Build Entity to stop the Work, or any portion thereof, until the cause for such order has been eliminated. All delays associated with the stop Work order will be the responsibility of the Design-Build Entity. 11.6 Correction of Defective Work. A. Promptly after receipt of written notice, the Design-Build Entity shall (1) correct Defective Work that becomes apparent during the progress of the Work on the Project and (2) replace, repair, or restore to Agency’s satisfaction any other parts of the Work on the Project and any other real or personal property which is damaged or destroyed as a result of Defective Work or the correction of Defective Work. The Design-Build Entity shall promptly commence such correction, replacement, repair, or restoration Item 2A-90 Contract No. ___________________ A2-66 upon notice from Agency’s Representative or Agency, but in no case later than fourteen (14) Days after receipt of such notice; and the Design-Build Entity shall diligently and continuously prosecute such correction to completion. The Design-Build Entity shall bear all costs of such correction, replacement, repair, or restoration, and all losses resulting from such Defective Work, including additional testing, inspection, and compensation for Agency’s Representative’s services and expenses. The Design-Build Entity shall perform corrective Work on the Project at such times that are acceptable to Agency and in such a manner as to avoid, to the extent practicable, disruption to Agency’s activities. When correcting Defective, Design-Build Entity shall take no action that would void or otherwise impair Agency’s special warranty and guarantee, if any, on said Work. B. If immediate correction of Defective Work is required for life safety or the protection of property and is performed by Agency or Separate Contractors, the Design-Build Entity shall pay to Agency all reasonable costs of correcting such Defective Work. The Design-Build Entity shall replace, repair, or restore to Agency’s satisfaction any other parts of the Construction Work and any other real or personal property which is damaged or destroyed as a result of such Defective Work or the correction of such Defective Work. C. The Design-Build Entity shall remove from the Project site portions of the Construction Work and materials which are not in accordance with the Contract Documents and which are neither corrected by the Design-Build Entity nor accepted by Agency. D. Enforcement of the Design-Build Entity’s express warranties and guarantees to repair contained in the Contract Documents shall be in addition to and not in limitation of any other rights or remedies Agency may have under the Contract Documents or at law or in equity for Defective Work. Nothing contained in this Article shall be construed to establish a period of limitation with respect to other obligations of the Design-Build Entity under the Contract Documents. 11.7 Acceptance of Defective Work. A. If, instead of requiring correction or removal and replacement of Defective Work, Agency prefers to accept it, Agency may do so. Design-Build Entity shall pay all claims, costs, losses, and damages (including but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs) attributable to Agency’s evaluation of and determination to accept such Defective Work and for the diminished value of the Work. B. If any acceptance of Defective Work occurs prior to release of the Project retention, a Change Order will be issued incorporating the necessary revisions in the Contract Documents with respect to the Work, and Agency shall be entitled to an appropriate decrease in the Contract Price, reflecting the diminished value of Work and all costs incurred by Agency. C. If the Project retention is held in an escrow account as permitted by the Contract Documents, Design-Build Entity will promptly alert the escrow holder, in writing, of the amount of retention to be paid to Agency. Item 2A-91 Contract No. ___________________ A2-67 D. If the acceptance of defective Work occurs after release of the Project retention, an appropriate amount will be paid by Design-Build Entity to Agency. 11.8 Agency May Correct Defective Work. A. If Design-Build Entity fails within a reasonable time after written notice from Agency’s Representative to correct Defective Work, or to remove and replace rejected Work as required by Agency, or if Design-Build Entity fails to perform the Work in accordance with the Contract Documents, or if Design-Build Entity fails to comply with any other provision of the Contract Documents, Agency may, after seven (7) Days written notice to Design-Build Entity, correct, or remedy any such deficiency. B. In connection with such corrective or remedial action, Agency may exclude Design- Build Entity from all or part of the Site, take possession of all or part of the Work and suspend Design-Build Entity’s services related thereto, take possession of Design- Build Entity’s tools, appliances, construction equipment and machinery at the Site, and incorporate in the Work all materials and equipment stored at the Site or for which Agency has paid Design-Build Entity but which are stored elsewhere. Design-Build Entity shall allow Agency and Agency’s Representative, and the agents, employees, other contractors, and consultants of each of them, access to the Site to enable Agency to exercise the rights and remedies to correct the defective work. C. All claims, costs, losses, and damages (including but not limited to all fees and charges of engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs) incurred or sustained by Agency correcting the defective work will be charged against Design-Build Entity, and a Change Order will be issued incorporating the necessary revisions in the Contract Documents with respect to the Work; and Agency shall be entitled to an appropriate decrease in the Contract Price. Such claims, costs, losses and damages will include but not be limited to all costs of repair, or replacement of work of others destroyed or damaged by correction, removal, or replacement of Defective Work. D. If the Change Order is executed after all payments under the Contract have been paid by Agency and the Project Retention is held in an escrow account as permitted by the Contract Documents, Design-Build Entity will promptly alert the escrow holder, in writing, of the amount of Retention to be paid to Agency. E. If the Change Order is executed after release of the Project Retention, an appropriate amount will be paid by Design-Build Entity to Agency. F. Design-Build Entity shall not be allowed an extension of the Contract Times because of any delay in the performance of the Work attributable to Agency correcting defective work. ARTICLE 12 -PAYMENTS TO DESIGN-BUILD ENTITY AND COMPLETION 12.1 Schedule of Values. A. The Design-Build Entity shall submit a schedule of values to the Agency before the first Application for Payment, allocating the entire Contract Price to the various portions of the Work. The schedule of values shall be prepared in the form, and supported by Item 2A-92 Contract No. ___________________ A2-68 the data to substantiate its accuracy, required by the Agency. This schedule, unless objected to by the Agency, shall be used as a basis for reviewing the Design-Build Entity’s Applications for Payment. Any changes to the schedule of values shall be submitted to the Agency and supported by such data to substantiate its accuracy as the Agency may require, and unless objected to by the Agency, shall be used as a basis for reviewing the Design-Build Entity’s subsequent Applications for Payment. 12.2 Applications for Payments. A. By the twenty-fifth (25th) day of each month Design-Build Entity shall submit to Agency’s Representative for review an Application for Payment filled out and signed by Design-Build Entity covering the Work completed as of the date of the Application for Payment and accompanied by such supporting documentation as is required by the Contract Documents. If payment is requested on the basis of materials and equipment not incorporated in the Work but delivered and suitably stored at the Site or at another location agreed to in writing, the Application for Payment shall also be accompanied by a bill of sale, invoice, or other documentation warranting that Agency has received the materials and equipment free and clear of all Liens and evidence that the materials and equipment are covered by appropriate property insurance or other arrangements to protect Agency’s interest therein, all of which must be satisfactory to Agency. B. Beginning with the second Application for Payment, each Application shall include an affidavit executed by the Design-Build Entity stating that it has paid all amounts due on account of the Work paid by Agency in the prior Applications for Payment. 12.3 Review of Applications. A. Agency’s Representative will either indicate in writing a recommendation of payment to Agency or return the Application for Payment to Design-Build Entity indicating in writing Agency’s Representative’s reasons for refusing to recommend payment. In the latter case, Design-Build Entity may make the necessary corrections and resubmit the Application for Payment. B. In taking action on the Design-Build Entity’s Applications for Payment, the Agency shall be entitled to rely on the accuracy and completeness of the information furnished by the Design-Build Entity and shall not be deemed to represent that the Agency has made a detailed examination, audit or arithmetic verification of the documentation submitted in support of the Application for Payment or other supporting data; that the Agency has made exhaustive or continuous on-site inspections; or that the Agency has made examinations to ascertain how or for what purposes the Design-Build Entity has used amounts previously paid on account of the Contract. Such examinations, audits and verifications, if required by the Agency, will be performed by the Agency’s auditors acting in the sole interest of the Agency. C. By recommending any such payment Agency’s Representative will not thereby be deemed to have represented that: 1. inspections made to check the quality or the quantity of the Work as it has been performed have been exhaustive, extended to every aspect of the Work in progress, or involved detailed inspections of the Work beyond the Item 2A-93 Contract No. ___________________ A2-69 responsibilities specifically assigned to Agency’s Representative in the Contract Documents; or 2. there may not be other matters or issues between the parties that might entitle Design-Build Entity to be paid additionally by Agency or entitle Agency to withhold payment to Design-Build Entity. D. Neither Agency’s Representative’s review of Design-Build Entity’s Work for the purposes of recommending payments nor Agency’s Representative’s recommendation of any payment, including final payment, will impose responsibility on Agency’s Representative: 1. to supervise, direct, or control the Work; 2. for the means, methods, techniques, sequences, or procedures of construction, or the safety precautions and programs incident thereto; 3. for Design-Build Entity’s failure to comply with Applicable Laws applicable to Design-Build Entity’s performance of the Work; 4. to make any examination to ascertain how or for what purposes Design-Build Entity has used the moneys paid on account of the Contract Price; or 5. to determine that title to any of the Work, materials, or equipment has passed to Agency free and clear of any Liens. E. Agency’s Representative may refuse to recommend the whole or any part of any payment due to subsequently discovered evidence or the results of subsequent inspections or tests. Agency retains the right to revise or revoke any such payment recommendation previously made, to such extent as may be necessary in Agency’s opinion to protect Agency from loss. 12.4 Payment Becomes Due. A. Thirty (30) Days after presentation of an undisputed and properly submitted Application for Payment to Agency’s Representative, and subject to Agency’s Representative’s recommendation, subject to the modifications above, the amount recommended will become due, and when due will be paid by Agency to Design-Build Entity. 12.5 Retention and Securities in Lieu of Retention. A. Unless Project has been deemed substantially complex as noted in the Contract Documents, Agency will retain five percent (5%) of the amount invoiced in accordance with Applicable Laws. B. Pursuant to Public Contract Code section 22300, Design-Build Entity may substitute securities for any moneys withheld as a retention by Agency to ensure performance under the Contract. At the request and expense of Design-Build Entity, securities equivalent to the amount withheld shall be deposited with Agency, or with a state or federally chartered bank in this state as the escrow agent, who shall then pay those Item 2A-94 Contract No. ___________________ A2-70 moneys to Design-Build Entity. Upon satisfactory completion of the Contract, the securities shall be returned to Design-Build Entity. 1. Alternatively, Design-Build Entity may request, and Agency shall make payment of retentions earned directly to the escrow agent selected by the Design-Build Entity. At the expense of Design-Build Entity, Design-Build Entity may direct the investment of the payments into securities and Design-Build Entity shall receive the interest earned on the investments upon the same terms provided for in Public Contract Code section 22300 for securities deposited by Design-Build Entity. Upon satisfactory completion of the Contract, Design-Build Entity shall receive from the escrow agent all securities, interest, and payments received by the escrow agent when Agency authorizes the escrow agent to release these funds to the Design-Build Entity, pursuant to the terms of Public Contract Code section 22300. C. Securities eligible for investment shall include those listed in Government Code section 16430, bank or savings and loan certificates of deposit, interest-bearing demand deposit accounts, standby letters of credit, or any other security mutually agreed to by Design-Build Entity and Agency. D. Design-Build Entity shall be the beneficial Agency of any securities substituted for moneys withheld and shall receive any interest thereon. E. The escrow agreement shall be in the form of the Escrow Agreement provided as part of the Contract Documents. 12.6 Agency’s Reduction in Recommended Payment. A. In addition to reductions recommended by Agency’s Representative, Agency may refuse to make payment of the full amount recommended by Agency’s Representative because: 1. Claims have been made against Agency on account of Design-Build Entity’s performance or furnishing of the Work. 2. Stop Payment Notices or Liens have been filed in connection with the Work. 3. Defective Work not remedied. 4. Failure of Design-Build Entity to make proper payments to its subcontractors or suppliers. 5. Completion of the Contract if there exists a reasonable doubt that the Work can be completed for the unpaid Contract balance. 6. Damage to another contractor or third party. 7. Amounts which may be due the Agency for claims against Design-Build Entity. 8. Failure of Design-Build Entity to keep the record (‘as-built”) drawings up to date. Item 2A-95 Contract No. ___________________ A2-71 9. Failure to provide updates on the construction schedule. 10. Site cleanup. 11. Failure of the Design-Build Entity to comply with requirements of the Contract Documents. 12. Liquidated Damages. B. Upon completion of the Contract, Agency will reduce the final Contract Price to reflect costs charged to the Design-Build Entity, back charges or payments withheld pursuant to the Contract Documents. 12.7 Design-Build Entity’s Warranty of Title. A. Design-Build Entity warrants and guarantees that title to all Work, materials, and equipment covered by any Application for Payment, whether incorporated in the Project or not, will pass to Agency no later than the time of payment free and clear of all Liens. 12.8 Partial Utilization. A. Agency reserves the right to occupy or utilize any portion of the Work at any time before completion, and such occupancy or use shall not constitute acceptance of any part of Work covered by this Contract. This use shall not relieve the Design-Build Entity of its responsibilities under the Contract. 12.9 Final Inspection. A. Upon written notice from Design-Build Entity that the entire Work is complete, Agency’s Representative will promptly make a final inspection with Agency and Design-Build Entity and will notify Design-Build Entity in writing of all particulars in which this inspection reveals that the Work is incomplete or defective. Design-Build Entity shall immediately take such measures as are necessary to complete such Work or remedy such deficiencies. 12.10 Final Acceptance. A. After Design-Build Entity has, in the opinion of Agency’s Representative, satisfactorily completed all corrections identified during the final inspection and has delivered, in accordance with the Contract Documents, all maintenance and operating instructions, schedules, guarantees, bonds, certificates or other evidence of insurance, certificates of inspection, marked-up record documents, and other documents required by the Contract Documents, Agency shall execute and file with the County in which the Project is located a Notice of Completion, constituting final acceptance and completion of the Project, except as may be expressly noted. 12.11 Final Payment. A. Application for Payment. Item 2A-96 Contract No. ___________________ A2-72 1. Upon execution of the Notice of Completion, Design-Build Entity may submit a final accounting for the cost of the Work and a final Application for Payment. Final payment, constituting the entire unpaid balance of the Contract Price. 2. Prior to Final Payment, the Agency may conduct an audit of the Work or notify the Design-Build Entity that it will not conduct an audit and issue a final Certificate for Payment. If the Agency conducts an audit of the Work, the Agency will either issue to the Design-Build Entity a final Certificate for Payment, or notify the Design-Build Entity in writing of the Agency’s reasons for withholding a certificate. If the Agency’s auditors report the cost of the Work as substantiated by the Design-Build Entity’s final accounting to be less than claimed by the Design-Build Entity, the Design-Build Entity shall be entitled to make a claim. Pending a final resolution of the disputed amount, the Agency shall pay the Design-Build Entity the amount certified in the Agency’s final Certificate for Payment. 3. The final Application for Payment shall be accompanied (except as previously delivered) by: a. all documentation called for in the Contract Documents, including but not limited to the evidence of insurance; b. consent of the surety to final payment; c. a fully completed Conditional Waiver and Release on Final Payment. B. Agency’s Representative’s Review of Application and Acceptance. 1. If, on the basis of Agency’s Representative’s observation of the Work during construction and final inspection, and Agency’s Representative’s review of the final Application for Payment and accompanying documentation as required by the Contract Documents, Agency’s Representative is satisfied that the Work has been completed and Design-Build Entity has satisfied all other requirements for final payment, Agency’s Representative will indicate in writing Agency’s Representative’s recommendation of payment and present the Application for Payment to Agency for payment. Otherwise, Agency’s Representative will return the Application for Payment to Design-Build Entity, indicating in writing the reasons for refusing to recommend final payment, in which case Design-Build Entity shall make the necessary corrections and resubmit the Application for Payment. C. Payment Becomes Due. 1. Within sixty (60) Days after the presentation to Agency’s Representative of the proper and complete final Application for Payment and accompanying documentation, the amount recommended by Agency’s Representative, less any sum Agency is entitled to set off pursuant to the Contract Documents, will become due and will be paid by Agency to Design-Build Entity. 12.12 Waiver of Claims. Item 2A-97 Contract No. ___________________ A2-73 A. The making and acceptance of final payment will constitute a waiver of all Claims by Design-Build Entity against Agency other than those previously made in accordance with the requirements herein and expressly acknowledged by Agency in writing as still unsettled. ARTICLE 13 -SUSPENSION OF WORK AND COMPLETION 13.1 Agency May Suspend Work. A. Agency may, at its sole option, decide to suspend at any time the performance of all or any portion of the Work by notice in writing to Design-Build Entity. Such notice of suspension of Work will designate the amount and type of plant, labor, and equipment to be committed to the Project during the period of suspension. Design-Build Entity shall use its best efforts to utilize its plant, labor, and equipment in such a manner as to minimize costs associated with suspension. B. Upon receipt of any such notice, Design-Build Entity shall, unless the notice requires otherwise: 1. Immediately discontinue Work on the date and to the extent specified in the notice; 2. Place no further orders or subcontracts for material, services, or facilities with respect to suspended Work other than to the extent required in the notice; 3. Promptly make every reasonable effort to obtain suspension upon terms satisfactory to Agency’s Representative of all orders, subcontracts, and rental agreements to the extent they relate to performance of Work suspended; and 4. Continue to protect and maintain the Work including those portions on which Work has been suspended. C. Except as provided by this article, as full and complete compensation for such suspension, Design-Build Entity shall be granted an adjustment in the Contract Price based on a negotiated daily rate that reflects the Design-Build Entity’s actual costs associated with the demobilized condition of the Site (and as a result will be less than the Daily Rate contained in the Special Conditions) and an extension of the Contract Times equal to the number of days performance of Work is suspended; provided, however, that no adjustment of Contract Price or extension of Contract Times shall be granted if the suspension results from Design-Build Entity's non-compliance with the requirements of the Contract. 13.2 Agency May Terminate for Cause. A. Agency may, without prejudice to any other right or remedy, serve written notice upon Design-Build Entity of its intention to terminate this Contract in whole or in part if the Design-Build Entity: (i) refuses or fails to prosecute the Work or any part thereof with such diligence as will ensure its completion within the Project Completion Date; (ii) fails to complete the Work within the required time; (iii) files a bankruptcy petition or is adjudged a bankruptcy; (iv) makes a general assignment for the benefit of its creditors; (v) has a receiver appointed; (vi) refuses or fails to supply enough properly skilled Item 2A-98 Contract No. ___________________ A2-74 workers or proper materials to complete the Work; (vii) fails to make prompt payment to subcontractors or for material or labor; (viii) disregards Applicable Laws, other requirements or instructions of Agency; or (ix) violates any of the provisions of the Contract Documents. B. The Notice of Default and Intent to Terminate shall state the reasons for termination. Unless within five (5) Days after the service of such notice, Design-Build Entity resolves the circumstances giving rise to the Notice of Default to Agency’s satisfaction, or makes arrangements acceptable to Agency for the required corrective action, Agency may terminate this Contract. In such case, Design-Build Entity shall not be entitled to receive any further payment until the Work has been finished. Agency may take over and complete the Work by any method it may deem appropriate, including enforcement of the Project Performance Bond. Design-Build Entity and its surety shall be liable to Agency for any excess costs or other damages incurred by Agency to complete the Work. If Agency takes over the Work, Agency may, without liability for so doing, take possession of and utilize in completing the Work such materials, appliances, plant, and other property belonging to the Design-Build Entity as may be on the Site. 13.3 Agency May Terminate for Convenience. A. In addition to its right to terminate this Contract for default, Agency may terminate the Contract, in whole or in part, at any time upon seven (7) Days written notice to Design- Build Entity. The Notice of Termination shall specify that the termination is for the convenience of Agency, the extent of termination, and the effective date of such termination (“Effective Date of Termination”). B. After receipt of Notice of Termination, and except as directed by Agency, the Design- Build Entity shall, regardless of any delay in determining or adjusting any amounts due under this Termination for Convenience clause, immediately proceed with the following obligations: 1. Stop Work as specified in the Notice. 2. Complete any Work specified in the Notice of Termination in a least cost/shortest time manner while still maintaining the quality called for under the Contract Documents. 3. Leave the Site and any other property upon which the Design-Build Entity was working in a safe and sanitary manner such that it does not pose any threat to the public health or safety. 4. Terminate all subcontracts and purchase orders to the extent that they relate to the portions of the Work terminated. 5. Place no further subcontracts or orders, except as necessary to complete the remaining portion of the Work. 6. Submit to Agency, within fifteen (15) Days from the Notice of Termination, all of the documentation called for by the Contract Documents to substantiate all costs incurred by the Design-Build Entity for labor, materials and equipment Item 2A-99 Contract No. ___________________ A2-75 through the Notice of Termination. Any documentation substantiating costs incurred by the Design-Build Entity solely as a result of Agency's exercise of its right to terminate this Contract pursuant to this clause, which costs the Design-Build Entity is authorized under the Contract Documents to incur, shall: (i) be submitted to and received by Agency no later than thirty (30) Days after the Effective Date of the Notice of Termination; (ii) describe the costs incurred with particularity; and (iii) be conspicuously identified as "Termination Costs Occasioned by Agency's Termination for Convenience." C. Agency’s total liability to Design-Build Entity by reason of the termination shall be limited to the total (without duplication of any items) of: 1. The reasonable cost to the Design-Build Entity for all Work performed prior to the Effective Date of Termination, including the Work done to secure the Project for termination. Reasonable cost may not exceed the applicable percentage completion values derived from the progress schedule and the schedule of values. Deductions shall be made for cost of materials to be retained by the Design-Build Entity, cost of Work defectively performed, amounts realized by sale of materials, and for other appropriate credits or offsets against cost of Work as allowed by the Contract Documents. 2. When, in Agency’s opinion, the cost of any item of Work is excessively high due to costs incurred to remedy or replace defective or rejected Work, reasonable cost to be allowed will be the estimated reasonable cost of performing the Work in compliance with requirements of the Contract Documents and excessive actual cost shall be disallowed. 3. Any Work required by the Termination for Convenience that is not included in Contract Documents will be negotiated pursuant to the Contract Change Order provisions. 4. Reasonable costs to the Design-Build Entity of handling material returned to vendors, delivered to Agency or otherwise disposed of as directed by Agency. 5. A reasonable allowance for the Design-Build Entity’s internal administrative costs in preparing termination claim. 6. Reasonable demobilization costs, and reasonable payments made to Subcontractors or suppliers on account of termination. D. In no event shall Agency be liable for unreasonable costs incurred by the Design- Build Entity or subcontractors after receipt of a Notice of Termination. Such non- recoverable costs include, but are not limited to, the cost of or anticipated profits on Work not performed as of the date of termination, post-termination employee salaries, unreasonable post-termination administrative expenses, post-termination overhead or unabsorbed overhead, surety costs of any type, costs of preparing and submitting the Design-Build Entity’s termination claim, attorney fees of any type, and all other costs relating to prosecution of a claim or lawsuit. E. Agency shall have no obligation to pay the Design-Build Entity under this Article unless and until the Design-Build Entity provides Agency with updated and Item 2A-100 Contract No. ___________________ A2-76 acceptable as-builts and Record Documents for Work completed prior to termination as required by the Contract Documents. F. In arriving at the amount due the Design-Build Entity under this clause there shall be deducted in whole, or in the appropriate part(s) if the termination is partial: 1. All unliquidated advances or other payments on account previously made to the Design-Build Entity, including without limitation all payments which are applicable to the terminated portion of the Contract Documents, 2. Any claim Agency may have against the Design-Build Entity in connection with the Work or any amounts that may be withheld in accordance with the Contract Documents, and 3. The agreed price for, or proceeds of sale of, any materials, supplies, or other things kept by the Design-Build Entity and not otherwise recovered by or credited to Agency. G. Design-Build Entity shall not be paid on account of loss of anticipated profits or revenue or other economic loss or consequential damages arising out of or resulting from such termination. H. Notwithstanding any other provision of this Article, when immediate action is necessary to protect life and safety or to reduce significant exposure or liability, Agency may immediately order Design-Build Entity to cease Work until such safety or liability issues are addressed to the satisfaction of Agency or the Contract is terminated. I. If Agency terminates Design-Build Entity for cause, and if it is later determined that the termination was wrongful, such default termination shall automatically be converted to and treated as a termination for convenience. In such event, Design- Build Entity shall be entitled to receive only the amounts payable under this section, and Design-Build Entity specifically waives any claim for any other amounts or damages, including, but not limited to, any claim for consequential damages or lost profits. ARTICLE 14 -CLAIMS, DISPUTE AVOIDANCE AND RESOLUTION 14.1 Procedure for Resolving Claims A. Design-Build Entity shall timely comply with any and all requirement of the Contract Documents pertaining to notices and requests for changes to the Contract Price and/or the Project Completion Date, including but not limited to all requirements of Article 9 and Article 14.1, as a prerequisite to filing any Claim governed by this Article. The failure to timely submit a notice of delay or notice of change, or to timely submit a Chang Order Request, or to timely provide any other notice or request required herein shall constitute a waiver of the right to further pursue the Claim under the Contract or at law. B. Intent. Effective January 1, 1991, Section 20104 et seq., of the California Public Contract Code prescribes a process utilizing informal conferences, non-binding judicial Item 2A-101 Contract No. ___________________ A2-77 supervised mediation, and judicial arbitration to resolve disputes on construction claims of $375,000 or less. Effective January 1, 2017, Section 9204 of the Public Contract Code prescribes a process for negotiation and mediation to resolve disputes on construction claims. The intent of this Article is to implement Sections 20104 et seq. and Section 9204 of the California Public Contract Code. This Article shall be construed to be consistent with all applicable law, including but not limited to these statutes. C. Claims. For purposes of this Article, "Claim" means a separate demand by the Design- Build Entity for (1) a time extension, including without limitation relief from damages or penalties for delay assessed by Agency, (2) payment of money or damages arising from Work done by or on behalf of the Design-Build Entity and payment of which is not otherwise expressly provided for or the Design-Build Entity is not otherwise entitled, or (3) payment of an amount which is disputed by Agency. A “Claim” does not include any demand for payment for which the Design-Build Entity has failed to provide notice, submit a Change Order Request, or otherwise failed to follow any procedures contained in the Contract Documents. D. Filing Claims. Claims governed by this Article may not be filed unless and until the Design-Build Entity completes any and all requirements of the Contract Documents pertaining to notices and requests for changes to the Contract Price and/or the Project Completion Date, and Design-Build Entity’s request for a change has been denied in whole or in part. Claims governed by this Article must be filed no later than thirty (30) Days after a request for change has been denied in whole or in part or after any other event giving rise to the Claim. The Claim shall be submitted in writing to the Agency and shall include on its first page the following words in 16 point capital font: “THIS IS A CLAIM.” The Claim shall include the all information and documents necessary to substantiate the Claim, including but not limited to those identified below. Nothing in this Article is intended to extend the time limit or supersede notice requirements otherwise provided by Contract Documents. Failure to follow such contractual requirements shall bar any Claims or subsequent proceedings for compensation or payment thereon. E. Documentation. The Design-Build Entity will submit the claim justification in the following format: 1. Summary description of Claim including basis of entitlement, merit and amount of time or money requested, with specific reference to the Contract Document provisions pursuant to which the Claim is made 2. List of documents relating to the Claim a. Specifications b. Drawings c. Clarifications (Requests for Information) d. Schedules e. Other Item 2A-102 Contract No. ___________________ A2-78 3. Chronology of events and correspondence 4. Narrative analysis of Claim merit 5. Analysis of Claim cost, including calculations and supporting documents 6. Time impact analysis in the form required by the Contract Documents or, if the Contract Documents do not require a particular format, CPM format, if an adjustment of the Contract Time is requested 7. Cover letter and certification of validity of the Claim F. Agency Response to Claim. Upon receipt of a Claim pursuant to this Article, Agency shall conduct a reasonable review of the Claim and, within a period not to exceed 45 days of receipt of the Claim, or as extended by mutual agreement, shall provide a written statement identifying what portion of the Claim is disputed and what portion is undisputed. Any payment due on an undisputed portion of the Claim will be processed and made within 60 days after Agency issues its written response. 1. If Agency needs approval from its governing body to provide Design-Build Entity a written statement as set forth above, and the governing body does not meet within the 45 days or within the mutually agreed to extension of time following receipt of a Claim, Agency shall have up to three (3) days following the next publicly noticed meeting of the governing body after the 45-day period, or extension, expires to provide Design-Build Entity a written statement identifying the disputed portion and the undisputed portion of the Claim. 2. Agency may request, in writing, within 30 days of receipt of the claim, any additional documentation supporting the Claim or relating to defenses or Claims Agency may have. If additional information is needed thereafter, it shall be provided upon mutual agreement of the Agency and the Design-Build Entity. Agency’s written response shall be submitted 30 days (15 days if the Claim is less than $50,000) after receiving the additional documentation, or within the same period of time taken by the Design-Build Entity to produce the additional information, whichever is greater. G. Meet and Confer Conference. If the Design-Build Entity disputes Agency’s response, or if Agency fails to respond within the statutory time period(s), the Design-Build Entity may so notify Agency, in writing, within 15 days of the receipt of the response or the failure to respond, and demand an informal conference to meet and confer for settlement of those portions of the Claim that remain in dispute. Upon such demand, Agency shall schedule a meet and confer conference within 30 Days. H. Mediation. Within 10 business days following the conclusion of the meet and confer conference, if the Claim or any portion of the Claim remains in dispute, the Agency shall provide the Design-Build Entity a written statement identifying the portion of the Claim that remains in dispute and the portion that is undisputed. Any payment due on an undisputed portion of the Claim shall be processed and made within 60 Days after the Agency issues its written statement. Any disputed portion of the Claim, as identified by the Design-Build Entity in writing, shall be submitted to nonbinding mediation, with the Agency and the Design-Build Entity sharing the associated costs equally. The Item 2A-103 Contract No. ___________________ A2-79 public entity and Design-Build Entity shall mutually agree to a mediator within 10 business days after the disputed portion of the Claim has been identified in writing, unless the parties agree to select a mediator at a later time. 1. If the parties cannot agree upon a mediator, each party shall select a mediator and those mediators shall select a qualified neutral third party to mediate with regard to the disputed portion of the Claim. Each party shall bear the fees and costs charged by its respective mediator in connection with the selection of the neutral mediator. 2. For purposes of this Article, mediation includes any nonbinding process, including, but not limited to, neutral evaluation or a dispute review board, in which an independent third party or board assists the parties in dispute resolution through negotiation or by issuance of an evaluation. Any mediation utilized shall conform to the timeframes in this Article. 3. Unless otherwise agreed to by the Agency and the Design-Build Entity in writing, the mediation conducted pursuant to this section shall excuse any further obligation under Section 20104.4 to mediate after litigation has been commenced. 4. The mediation shall be held no earlier than the date the Design-Build Entity completes the Work or the date that the Design-Build Entity last performs Work, whichever is earlier. All unresolved Claims shall be considered jointly in a single mediation, unless a new unrelated Claim arises after mediation is completed. I. Procedures After Mediation. If following the mediation, the Claim or any portion remains in dispute, the Design-Build Entity must file a Claim pursuant to Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of Division 3.6 of Title 1 of the Government Code prior to initiating litigation. For purposes of those provisions, the running of the period of time within which a Claim must be filed shall be tolled from the time the Design-Build Entity submits his or her written Claim pursuant to subdivision (a) until the time the Claim is denied, including any period of time utilized by the meet and confer conference. J. Civil Actions. The following procedures are established for all civil actions filed to resolve Claims of $375,000 or less: 1. Within 60 Days, but no earlier than 30 Days, following the filing or responsive pleadings, the court shall submit the matter to non-binding mediation unless waived by mutual stipulation of both parties or unless mediation was held prior to commencement of the action in accordance with Public Contract Code section 9204 and the terms of this Contract. The mediation process shall provide for the selection within 15 Days by both parties of a disinterested third person as mediator, shall be commenced within 30 Days of the submittal, and shall be concluded within 15 Days from the commencement of the mediation unless a time requirement is extended upon a good cause showing to the court. 2. If the matter remains in dispute, the case shall be submitted to judicial arbitration pursuant to Chapter 2.5 (commencing with Section 1141.10) of Title Item 2A-104 Contract No. ___________________ A2-80 3 of Part 3 of the Code of Civil Procedure, notwithstanding Section 1114.11 of that code. The Civil Discovery Act of 1986 (Article 3 (commencing with Section 2016) of Chapter 3 of Title 3 of Part 4 of the Code of Civil Procedure) shall apply to any proceeding brought under this subdivision consistent with the rules pertaining to judicial arbitration. In addition to Chapter 2.5 (commencing with Section 1141.10) of Title 3 of Part 3 of the Code of Civil Procedure, (A) arbitrators shall, when possible, be experienced in construction law, and (B) any party appealing an arbitration award who does not obtain a more favorable judgment shall, in addition to payment of costs and fees under that chapter, also pay the attorney’s fees on appeal of the other party. K. Government Code Claim Procedures. 1. This Article does not apply to tort claims and nothing in this Article is intended nor shall be construed to change the time periods for filing tort claims or actions specified by Chapter 1 (commending with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of Division 3.5 of Title 1 of the Government Code. 2. In addition to any and all requirements of the Contract Documents pertaining to notices of and requests for adjustment to the Contract Time, Contract Price, or compensation or payment for Additional Work, disputed Work, construction claims and/or changed conditions, the Design-Build Entity must comply with the claim procedures set forth in Government Code Section 900, et seq. prior to filing any lawsuit against the Agency. 3. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to adjustment of the Contract Time or Contract Price for Additional Work, disputed Work, construction claims, and/or changed conditions have been followed by Design-Build Entity. If Design-Build Entity does not comply with the Government Code claim procedure or the prerequisite contractual requirements, Design-Build Entity may not file any action against the Agency. 4. A Government Code claim must be filed no earlier than the date the Work is completed or the date the Design-Build Entity last performs Work on the Project, whichever occurs first. A Government Code claim shall be inclusive of all unresolved Claims known to Design-Build Entity or that should reasonably by known to Design-Build Entity excepting only new unrelated Claims that arise after the Government Code claim is submitted. L. Non-Waiver. The Agency’s failure to respond to a Claim from the Design-Build Entity within the time periods described in this Article or to otherwise meet the time requirements of this Article shall result in the Claim being deemed rejected in its entirety, and shall not constitute a waiver of any rights under this Article. Item 2A-105 Contract No. ___________________ A2-81 14.2 Litigation. A. Any claims, disputes, or controversies between the parties arising out of or related to the Contract, which have not been resolved in accordance with the procedures set forth herein shall be resolved in a court of competent jurisdiction. 14.3 Duty to Continue Performance. A. Unless provided to the contrary in the Contract Documents, Design-Build Entity shall continue to perform the Work and Agency shall continue to satisfy its payment obligations to Design-Build Entity, pending the final resolution of any dispute or disagreement between Design-Build Entity and Agency. ARTICLE 15 -MISCELLANEOUS PROVISIONS 15.1 Limitations On Agency’s Responsibilities. A. Agency shall not supervise, direct, or have control or authority over, nor be responsible for, the Design-Build Entity’s means, methods, techniques, sequences, or procedures of design or construction, or the safety precautions and programs incident thereto, or for any failure of the Design-Build Entity to comply with Applicable Laws applicable to the performance of the Work. Agency will not be responsible for the Design-Build Entity’s failure to perform the Project in accordance with the Contract Documents. 15.2 Successors A. The parties do for themselves, their heirs, executors, administrators, successors, and assigns agree to the full performance of all of the provisions contained in this Contract. The Design-Build Entity may not either voluntarily or by action of law, assign any obligation assumed by the Design-Build Entity hereunder without the prior written consent of the Agency. 15.3 Cumulative Remedies. A. The duties and obligations imposed by these General Conditions and the rights and remedies available hereunder to the parties hereto are in addition to, and are not to be construed in any way as a limitation of, any rights and remedies available to any or all of them which are otherwise imposed or available by Applicable Laws, by special warranty or guarantee, or by other provisions of the Contract Documents. The provisions of this Article will be as effective as if repeated specifically in the Contract Documents in connection with each particular duty, obligation, right, and remedy to which they apply. 15.4 Survival of Obligations. A. All representations, indemnifications, warranties, and guarantees made in, required by, or given in accordance with the Contract Documents, as well as all continuing obligations indicated in the Contract Documents, will survive final payment, completion, and acceptance of the Project or termination or completion of the Contract or termination of the services of the Design-Build Entity. Item 2A-106 Contract No. ___________________ A2-82 15.5 Controlling Law. A. Notwithstanding any subcontract or other contract with any Subcontractor, Supplier, or other person or organization performing any part of the Project, this Contract shall be governed by the law of the State of California excluding any choice of law provisions. 15.6 Jurisdiction; Venue. A. The Design-Build Entity and any Subcontractor, supplier, or other person or organization performing any part of the Project agree that any action or suits at law or in equity arising out of or related to the proposal process, award, or performance of the Project shall be maintained in the Superior Court of Riverside County, California, and expressly consent to the jurisdiction of said court, regardless of residence or domicile, and agree that said court shall be a proper venue for any such action. 15.7 Headings. A. Article and paragraph headings are inserted for convenience only and do not constitute parts of these General Conditions. 15.8 Agency’s Right to Audit. A. The Design-Build Entity shall make available to Agency for auditing, all relevant accounting records and documents, and other financial data, and upon request, shall submit true copies of requested records to Agency. If the Design-Build Entity submits a Change Order Request or a Claim to Agency, Agency shall have the right to audit the Design-Build Entity’s books, records, documents, and other evidence to the extent they are relevant. B. The right to audit shall include the right to examine books, records, documents, and other evidence and accounting procedures and practices, sufficient to discover and verify all direct and indirect costs of whatever nature claimed to have been incurred or anticipated to be incurred and for which the claim has been submitted, including but not limited to job cost reports, estimates, proposals, bids, proposal papers, documents of other work administered by the Design-Build Entity’s home office, and any and all other documentation relied upon by the Design-Build Entity to obtain this Contract. Agency shall have the right to make and take copies of any records examined. C. The right to audit shall include the right to inspect the Design-Build Entity’s plans, or such parts thereof, as may be or have been engaged in the performance of the Project. The Design-Build Entity further agrees that the right to audit encompasses all subcontracts and is binding upon Subcontractors. The right to audit provided herein shall be exercisable through such representatives as Agency deems desirable during the Design-Build Entity’s normal business hours at the Design-Build Entity’s office. D. In accordance with Government Code Section 8546.7, records of both Agency and the Design-Build Entity shall be subject to examination and audit by the State Auditor General for a period of three (3) years after final payment. The Design-Build Entity shall make available to Agency any of the Design-Build Entity’s other documents related to the Project immediately upon request of Agency. In addition to the State Item 2A-107 Contract No. ___________________ A2-83 Auditor’s rights described above, Agency shall have the right to examine and audit all books, estimates, records, contracts, documents, Proposals, subcontracts, and other data of the Design-Build Entity (including electronic records, computations and projections) related to negotiating, pricing, or performing the Project in order to evaluate the accuracy and completeness of the cost or pricing data, for a period of four (4) years after final payment. 15.9 Assignment. A. Design-Build Entity shall not assign, transfer, convey, sublet, or otherwise dispose of this Contract or any part thereof including any claims, without prior written consent of Agency. Any assignment without the written consent of Agency shall be void. Any assignment of money due or to become due under this Contract shall be subject to a prior lien for services rendered or Material supplied for performance of Work called for under the Contract Documents in favor of all persons, firms, or corporations rendering such services or supplying such Materials to the extent that claims are filed pursuant to the Civil Code, the Code of Civil Procedure or the Government Code. B. As set forth in Public Contract Code section 7103.5, in entering into a public works contract or a subcontract to supply goods, services, or materials pursuant to a public works contract, the contractor or subcontractor offers and agrees to assign to the awarding body all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. § 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, services, or materials pursuant to the public works contract or the subcontract. This assignment shall be made and become effective at the time the awarding body tenders final payment to the contractor, without further acknowledgment by the parties. 15.10 All Legal Provisions Included. A. Design-Build Entity shall give all notices and comply with all federal, state and local laws, ordinances, rules and regulations bearing on conduct of work as indicated and specified by their terms. References to specific laws, rules or regulations in this Contract are for reference purposes only, and shall not limit or affect the applicability of provisions not specifically mentioned. If Design-Build Entity observes that drawings and specifications are at variance therewith, he shall promptly notify Agency in writing and any necessary changes shall be adjusted as provided for in this Contract for changes in Work. If Design-Build Entity performs any Work knowing it to be contrary to such laws, ordinances, rules and regulations, and without such notice to Agency, he shall bear all costs arising therefrom. B. Design-Build Entity shall be responsible for familiarity with the Americans with Disabilities Act (“ADA”) (42 U.S.C. § 12101 et seq.). The Work will be performed in compliance with ADA laws, rules and regulations. Design-Build Entity shall comply with the Historic Building Code, including, but not limited to, as it relates to the ADA, whenever applicable.. C. Design-Build Entity acknowledges and understands that, pursuant to Public Contract Code section 20676, sellers of "mined material" must be on an approved list of sellers Item 2A-108 Contract No. ___________________ A2-84 published pursuant to Public Resources Code section 2717(b) in order to supply mined material for this Contract. D. No Agency official or representative who is authorized in such capacity and on behalf of Agency to negotiate, supervise, make, accept, or approve, or to take part in negotiating, supervising, making, accepting or approving any engineering, inspection, construction or material supply contract or any subcontract in connection with construction of the Work, shall be or become directly or indirectly interested financially in the Contract. E. All provisions of law required to be inserted in the Contract or Contract Documents pursuant to any Applicable Laws shall be and are inserted herein. If through mistake, neglect, oversight, or otherwise, any such provision is not herein inserted or inserted in improper form, upon the application of either party, the Contract or Contract Documents shall be changed by Agency, at no increase in the Contract Price or Contract Time, so as to strictly comply with the Applicable Laws and without prejudice to the rights of either party hereunder. 15.11 State License Board Notice. A. Contractors are required by law to be licensed and regulated by the Design-Build Entity’s State License Board which has jurisdiction to investigate complaints against contractors if a complaint regarding a patent act or omission is filed within four (4) years of the date of the alleged violation. A complaint regarding a latent act or omission pertaining to structural defects must be filed within ten (10) years of the date of the alleged violation. Any questions concerning a contractor may be referred to the Registrar, the Contractors’ State License Board, P.O. Box 26000, Sacramento, California 95826. 15.12 Noise. A. The Design-Build Entity shall use only such equipment on the Project and in such state of repair so that the emission of sound therefrom is within the noise tolerance level of that equipment as established by CAL-OSHA. B. The Design-Build Entity shall comply with the most restrictive of the following: (1) local sound control and noise level rules, regulations and ordinances and (2) the requirements contained in these Contract Documents, including hours of operation requirements. No internal combustion engine shall be operated on the Project without a muffler of the type recommended by the manufacturer. Should any muffler or other control device sustain damage or be determined to be ineffective or defective, the Design-Build Entity shall promptly remove the equipment and shall not return that equipment to the Project site until the device is repaired or replaced. Noise and vibration level requirements shall apply to all equipment on the jobsite or related to the Project, including but not limited to, trucks, transit mixers or transit equipment that may or may not be owned by the Design-Build Entity. 15.13 Change In Name Or Nature of Design-Build Entity’s Legal Entity. A. Should a change be contemplated in the name or nature of the Design-Build Entity’s legal entity, the Design-Build Entity shall first notify Agency in order that proper steps Item 2A-109 Contract No. ___________________ A2-85 may be taken to have the change reflected in the Contract Documents and all related documents. No change of the Design-Build Entity’s name or nature will affect Agency’s rights under the Contract Documents, including but not limited to the bonds and insurance. 15.14 Complete Contract. A. The Contract Documents constitute the full and complete understanding of the parties and supersede any previous agreements or understandings, oral or written, with respect to the subject matter hereof. The Contract may be modified only by a written instrument signed by both parties or as otherwise provided in the Contract Documents. 15.15 Notice of Third Party Claims. A. Pursuant to Public Contract Code section 9201, Agency shall provide Design-Build Entity with timely notification of the receipt of any third-party claim relating to the Contract. 15.16 Severability of Provisions. A. If any one or more of the provisions contained in the Contract Documents should be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 15.17 Correction of Errors and Omissions. A. The Design-Build Entity agrees to correct any error or omission in the Construction Documents or Contract Documents at no additional cost to Agency. 15.18 Interpretation. A. The Contract Documents shall not be construed in favor of or against any party, but shall be construed as if all parties prepared the Contract Documents. END OF GENERAL CONDITIONS Item 2A-110 Contract No. ___________________ A3-1 ATTACHMENT 3 SPECIAL CONDITIONS ARTICLE 1 - MODIFICATIONS TO THE GENERAL CONDITIONS Reserved. Item 2A-111 Contract No. ___________________ A4-1 ATTACHMENT 4 PERFORMANCE BOND KNOW ALL PERSONS BY THESE PRESENTS: THAT WHEREAS, THE CITY OF PALM DESERT HOUSING AUTHORITY (“Agency”) has awarded to DOUG WALLS CONSTRUCTION, INC., (“DBE”) an agreement for TAOS PALMS TRELLIS AND ENTRANCE STRUCTURE REHABILITATION (hereinafter referred to as the “Project”). WHEREAS, the work to be performed by the DBE is more particularly set forth in the Contract Documents for the Project dated October 4, 2022, (hereinafter referred to as “Contract Documents”), the terms and conditions of which are expressly incorporated herein by reference; and WHEREAS, the DBE is required by said Contract Documents to perform the terms thereof and to furnish a bond for the faithful performance of said Contract Documents. NOW, THEREFORE, we, _______________, the undersigned DBE and _____________________________________________ as Surety, a corporation organized and duly authorized to transact business under the laws of the State of California, are held and firmly bound unto the Agency in the sum of ___________________________ dollars, ($____________), said sum being not less than one hundred percent (100%) of the total amount of the Contract, for which amount well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors and assigns, jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION IS SUCH, that, if the DBE, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and agreements in the Contract Documents and any alteration thereof made as therein provided, on its part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their intent and meaning; and shall faithfully fulfill all obligations including the one (1) year guarantee of all materials and workmanship; and shall indemnify and save harmless the Agency, its officers and agents, as stipulated in said Contract Documents, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect. As a part of the obligation secured hereby and in addition to the face amount specified therefore, there shall be included costs and reasonable expenses and fees including reasonable attorney’s fees, incurred by Agency in enforcing such obligation. The obligations of Surety hereunder shall continue so long as any obligation of DBE remains. Nothing herein shall limit the Agency’s rights or the DBE or Surety’s obligations under the Contract, law or equity, including, but not limited to, California Code of Civil Procedure section 337.15. Item 2A-112 Contract No. ___________________ A4-2 Whenever DBE shall be, and is declared by the Agency to be, in default under the Contract Documents, the Surety shall remedy the default pursuant to the Contract Documents, or shall promptly, at the Agency’s option: (1) Take over and complete the Project in accordance with all terms and conditions in the Contract Documents; or (2) Obtain a Bid or Bids for completing the Project in accordance with all terms and conditions in the Contract Documents and upon determination by Surety of the lowest responsive and responsible Bidder, arrange for a Contract between such Bidder, the Surety and the Agency, and make available as work progresses sufficient funds to pay the cost of completion of the Project, less the balance of the Contract price, including other costs and damages for which Surety may be liable. The term “balance of the Contract price” as used in this paragraph shall mean the total amount payable to DBE by the Agency under the Contract and any modification thereto, less any amount previously paid by the Agency to the DBE and any other set offs pursuant to the Contract Documents. (3) Permit the Agency to complete the Project in any manner consistent with California law and make available as work progresses sufficient funds to pay the cost of completion of the Project, less the balance of the Contract price, including other costs and damages for which Surety may be liable. The term “balance of the Contract price” as used in this paragraph shall mean the total amount payable to DBE by the Agency under the Contract and any modification thereto, less any amount previously paid by the Agency to the DBE and any other set offs pursuant to the Contract Documents. Surety expressly agrees that the Agency may reject any contractor or subcontractor which may be proposed by Surety in fulfillment of its obligations in the event of default by the DBE. Surety shall not utilize DBE in completing the Project nor shall Surety accept a Bid from DBE for completion of the Project if the Agency, when declaring the DBE in default, notifies Surety of the Agency’s objection to DBE’s further participation in the completion of the Project. The Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Contract Documents or to the Project to be performed thereunder shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Contract Documents or to the Project. Item 2A-113 Contract No. ___________________ A4-3 IN WITNESS WHEREOF, we have hereunto set our hands and seals this _______ day of ______________, 20__. ___________________________________ Doug Walls Construction, Inc. By: ________________________________ President ___________________________________ Surety By:________________________________ Attorney-in-Fact The rate of premium on this bond is ____________ per thousand. The total amount of premium charges, $_______________________________. (The above must be filled in by corporate attorney.) THIS IS A REQUIRED FORM Any claims under this bond may be addressed to: (Name and Address of Surety) ___________________________________________ ___________________________________________ ___________________________________________ (Name and Address of Agent or ___________________________________________ Representative for service of process in California, if different ___________________________________________ from above) ___________________________________________ (Telephone number of Surety and ___________________________________________ Agent or Representative for service of process in California) NOTE: A copy of the Power-of-Attorney to local representatives of the bonding company must be attached hereto. Item 2A-114 Contract No. ___________________ A4-4 Notary Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF ______________ On , 20___, before me, _______________________________, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT Individual Corporate Officer Title(s) Title or Type of Document Partner(s) Limited General Number of Pages Attorney-In-Fact Trustee(s) Guardian/Conservator Date of Document Other: Signer is representing: Name Of Person(s) Or Entity(ies) Signer(s) Other Than Named Above Item 2A-115 Contract No. ___________________ A5-1 ATTACHMENT 5 PAYMENT BOND (LABOR AND MATERIALS) KNOW ALL MEN BY THESE PRESENTS: THAT WHEREAS, the CITY OF PALM DESERT HOUSING AUTHORITY (“Agency”), by action taken or a resolution passed _______________ has awarded to _______________ Inc., hereinafter designated as the “Principal,” a contract (“Contract”) for the work described as follows: ___________________________ (“Project”); and WHEREAS, said Principal is required to furnish a bond in connection with said Contract; providing that if said Principal or any of its Subcontractors shall fail to pay for any materials, provisions, provender, equipment, or other supplies used in, upon, for or about the performance of the work contracted to be done, or for any work or labor done thereon of any kind, or for amounts due under the Unemployment Insurance Code or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of said Principal and its Subcontractors with respect to such work or labor the Surety on this bond will pay for the same to the extent hereinafter set forth. NOW THEREFORE, we, the Principal and __________________________ as Surety, are held and firmly bound unto the Agency in the penal sum of ______________ dollars ($___________) lawful money of the United States of America, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION IS SUCH that if said Principal, his or its subcontractors, heirs, executors, administrators, successors or assigns, shall fail to pay any of the persons named in Section 9100 of the Civil Code, fail to pay for any materials, provisions or other supplies, used in, upon, for or about the performance of the Work contracted to be done, or for any work or labor thereon of any kind, or amounts due under the Unemployment Insurance Code with respect to work or labor performed under the Contract, or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department or Franchise Tax Board from the wages of employees of the DBE and his subcontractors pursuant to Section 18663 of the Revenue and Taxation Code, with respect to such Work and labor the Surety or Sureties will pay for the same, in an amount not exceeding the sum herein above specified, and also, in case suit is brought upon this bond, all litigation expenses incurred by the Agency in such suit, including reasonable attorneys’ fees, court costs, expert witness fees and investigation expenses. This bond shall inure to the benefit of any of the persons named in Section 9100 of the Civil Code so as to give a right of action to such persons or their assigns in any suit brought upon this bond. It is further stipulated and agreed that the Surety on this bond shall not be exonerated or released from the obligation of this bond by any change, extension of time for performance, addition, alteration or modification in, to, or of any contract, plans, specifications, or agreement pertaining or relating to any scheme or work of improvement herein above described, or pertaining or relating to the furnishing of labor, materials, or equipment therefore, nor by any change or modification of any terms of payment or extension of the time for any payment pertaining or relating to any scheme or work of improvement herein above described, nor by any rescission or attempted rescission or attempted rescission of the contract, agreement or bond, nor by any conditions precedent or subsequent in the bond attempting to limit the right of recovery of Item 2A-116 Contract No. ___________________ A5-2 claimants otherwise entitled to recover under any such Contract or agreement or under the bond, nor by any fraud practiced by any person other than the claimant seeking to recover on the bond and that this bond be construed most strongly against the Surety and in favor of all persons for whose benefit such bond is given, and under no circumstances shall Surety be released from liability to those for whose benefit such bond has been given, by reason of any breach of Contract between the owner or Agency and original DBE or on the part of any obligee named in such bond, but the sole conditions of recovery shall be that claimant is a person described in Section 9100 of the Civil Code, and has not been paid the full amount of his claim and that Surety does hereby waive notice of any such change, extension of time, addition, alteration or modification herein mentioned and the provisions of Sections 2819 and 2845 of the California Civil Code. IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original thereof, have been duly executed by the Principal and Surety above named, on the _____ day of ______________________ 20______ the name and corporate seal of each corporate party being hereto affixed and these presents duly signed by its undersigned representative pursuant to authority of its governing body. (Corporate Seal of Principal, if corporation) ___________________________________ Doug Walls Construction, Inc. By: ________________________________ President (Seal of Surety) ___________________________________ Surety By:________________________________ Attorney-in-Fact (Attached Attorney-In-Fact Certificate and Required Acknowledgements) NOTE: A copy of the Power-of-Attorney to local representatives of the bonding company must be attached hereto. Item 2A-117 Contract No. ___________________ A5-3 Notary Acknowledgment A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF ______________ On , 20___, before me, _______________________________, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT Individual Corporate Officer Title(s) Title or Type of Document Partner(s) Limited General Number of Pages Attorney-In-Fact Trustee(s) Guardian/Conservator Date of Document Other: Signer is representing: Name Of Person(s) Or Entity(ies) Signer(s) Other Than Named Above Item 2A-118 Contract No. ___________________ A6-1 ATTACHMENT 6 HOURLY RATE SCHEDULE FOR EXTRA WORK N/A Item 2A-119 Contract No. ___________________ A7-1 ATTACHMENT 7 WORKERS’ COMPENSATION CERTIFICATION Labor Code section 3700 in relevant part provides: Every employer except the State shall secure the payment of compensation in one or more of the following ways: a. By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in this state. b. By securing from the Director of Industrial Relations a certificate of consent to self- insure, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self-insure and to pay any compensation that may become due to his employees. I am aware of the provisions of section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work of this Contract. Date: Name of Design-Build Entity: Doug Walls Construction, Inc. Signature: Print Name: Title: (In accordance with Article 5 - commencing at section 1860, chapter 1, part 7, division 2 of the Labor Code, the above certificate must be signed and filed with the awarding body prior to performing any Work under this Contract.) Item 2A-120 REQUEST FOR PROPOSALS FOR PROJECT NO. 813-21 TAOS PALMS TRELLIS AND ENTRANCE STRUCTURE REHABILITATION PALM DESERT HOUSING AUTHORITY Chris Gerry, Project Manager 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 (760) 776-6335 Key RFP Dates RFP Issued: Friday, June 3, 2022 Pre-Proposal Meeting and Job Walk: 9:00 a.m. on Wednesday, June 15, 2022 Submit Written Questions: By 5:00 p.m. on Friday, June 24, 2022 Final Addendum Issued: Friday, July 1, 2022 Submit Proposals: By 2:00 p.m. on Friday, July 8, 2022 Item 2A-121 Table of Contents SECTION I – INSTRUCTIONS TO PROPOSERS................................................ 1 SECTION II – PROPOSAL CONTENT ................................................................. 5 SECTION III – EVALUATION AND AWARD ........................................................ 9 SECTION IV – SCOPE OF SERVICES / WORK ................................................ 12 SECTION V – PROPOSED DRAFT AGREEMENT ............................................ 17 Item 2A-122 1 SECTION I – INSTRUCTIONS TO PROPOSERS Item 2A-123 2 SECTION I – INSTRUCTIONS TO PROPOSERS A. AUTHORITY REPRESENTATIVE All communications and/or written questions regarding this RFP are to be directed electronically through OpenGov Procurement, which can be found at www.cityofpalmdesert.org/our-city/bid-and-vendor-opportunities. B. PRE-PROPOSAL CONFERENCE A MANDATORY pre-proposal meeting will be held at 9:00 a.m. on Wednesday, June 15, 2022, at the Taos Palms Apartments, 44830 Las Palmas Avenue, Palm Desert, CA 92260. C. CLARIFICATIONS AND QUESTIONS 1. EXAMINATION OF DOCUMENTS Proposer is responsible for reviewing the RFP documents prior to the submittal due date and for requesting clarification or interpretation of any discrepancy, deficiency, ambiguity or error, or omission contained in the RFP documents. Proposer shall notify the Authority, in writing in accordance with Section C.2. The Authority will issue a written addendum clarifying the matter (Section D). By submitting a proposal, the Proposer represents that they have thoroughly examined and become familiar with the work required under this RFP and that it is capable of performing quality work to achieve the Authority’s objectives. 2. SUBMITTING REQUESTS a. All questions, including questions posed and responded to at the pre- proposal conference, must be electronically submitted in OpenGov Procurement and must be received by the Authority no later than: 5:00 p.m. on Friday, June 24, 2022 b. The Authority is not responsible for failure to respond to a request that has not been electronically submitted appropriately. 3. AUTHORITY’S RESPONSES Responses from the Authority will be in the form of addenda and posted on OpenGov Procurement prior to the submission deadline. D. ADDENDA The Authority reserves the right to revise the RFP documents. Any changes to the requirements will be made by written addenda to this RFP. Any written addenda issued pertaining to this RFP shall be incorporated into the terms and conditions of any contract resulting from this RFP. The Authority will not be bound to any modifications to or deviations from the requirements set forth in this RFP as the result of oral instructions. Proposers shall acknowledge receipt of addenda in their submittal. Failure to acknowledge receipt of all addenda Item 2A-124 3 may cause the Proposer to be deemed non-responsive to this RFP and be rejected without further evaluation. E. SUBMISSION OF PROPOSALS 1. DATE AND TIME Proposals must be submitted before 2:00 PM on Friday, July 8, 2022. Submissions received after the specified date and time will be rejected without consideration or evaluation. Proposals shall only be submitted through OpenGov Procurement. 2. IDENTIFICATION OF PROPOSALS Proposals shall be submitted through OpenGov Procurement. 3. ACCEPTANCE OF PROPOSALS/CITY’S RIGHTS a. The Authority reserves the right to accept or reject any and all submittals, or any item or part thereof, or to waive any informalities or irregularities in the submittals. b. The Authority reserves the right to withdraw or cancel this RFP, or any part hereof at any time without prior notice and the Authority makes no representations that any contract will be awarded to any Proposer responding to this RFP. c. The Authority reserves the right to issue a new RFP. d. The Authority reserves the right to postpone submittal openings for its own convenience. e. The Authority reserves the right to require confirmation of information furnished by Proposer or for the Proposer to provide additional evidence of qualifications to perform the work or to obtain information from any source that has the potential to improve the understanding and evaluation of the submittals. f. Submittals received by Authority are considered public information and will be made available upon request, after the project has been awarded. g. Submittals are not to be copyrighted. h. Changes to the Authority draft agreement shall be made at the Authority’s sole discretion. F. JOINT OFFERS Where two or more firms desire to submit a single proposal in response to this RFP, they should do so on a prime-subcontractor basis rather than as a joint venture. G. CONTRACT TYPE It is anticipated the agreement resulting from this solicitation, if awarded, will be a not-to-exceed amount type contract. Item 2A-125 4 H. INSURANCE REQUIREMENTS The Proposer will be required to have insurance coverage acceptable to the Authority in effect for the duration of the contract. Prior execution of the contract, the Proposer will submit to the Authority’s insurance certificates naming the Authority as an additional insured. At a minimum, the Proposer will be required to maintain the following coverage within the specified limits: General Liability $2,000,000 per occurrence; $4,000,000 general aggregate Errors and Omissions $1,000,000 per claim Automotive Comprehensive $1,000,000 each accident Worker’s Compensation Statutory Limits Insurance requirements defined in Section V - Proposed Draft Agreement. I. CONFLICT OF INTEREST All Proposers responding to this RFP must avoid organizational conflicts of interest which would restrict full and open competition i n this procurement. An organizational conflict of interest means that due to other activities, relationships, or contracts, a Proposer is unable, or potentially unable, to render impartial assistance or advice to the Authority; a Proposer‘s objectivity in performing the work identified in the Scope of Work is or might be otherwise impaired; or a Proposer has an unfair competitive advantage. J. COST PROPOSAL The Proposer shall submit a cost proposal, with its proposal, for evaluation. This cost proposal shall be a clearly identified attachment that includes the estimate of probable construction costs, which will be required from the successful Proposer. It is the Proposers’ sole responsibility to see that its proposal is submitted, as required. K. PRE-CONTRACTUAL EXPENSES The Authority shall not, in any event, be liable for any pre-contractual expenses incurred by Proposer in the preparation of its submittal. In the event of award, Proposer shall not be entitled to charge the Authority for any pre-contractual expenses. Pre-contractual expenses are defined as expenses incurred by Proposer in: a. Preparing its proposal in response to this RFP; b. Submitting proposal to the Authority; c. Negotiating with the Authority any matter related to this solicitation; or d. Any other expenses incurred by Proposer prior to date of award, if any, of the Agreement. Item 2A-126 5 SECTION II – PROPOSAL CONTENT Item 2A-127 6 SECTION II – PROPOSAL CONTENT AND FORMS A. PROPOSAL FORMAT AND CONTENT – STEP ONE: PREQUALIFICATION. 1. FORMAT Submittals should be typed, double-spaced, and submitted on 8.5-inch x 11-inch paper while using 12-point font. Charts and schedules may be included in 11” x 17” format. All pages shall be sequentially numbered, and each section should be separately and clearly identified. Submittals should include a complete table of contents for the entire document. Proposers should not include any unnecessarily elaborate or promotional material. Lengthy narratives are discouraged, and presentations should be brief and concise. Submittals should not exceed TWENTY (20) pages in length. 2. LETTER OF TRANSMITTAL The Letter of Transmittal shall be addressed to Chris Gerry, Project Manager, and must, at a minimum, contain the following: a. Identification of Proposer that will have the authorization to commit to the contractual terms and conditions. Identification shall include legal company name, corporate address, telephone, fax number and email address. Include name, title, address, telephone number and email address of the contact person during the proposal evaluation phase. b. Identification of proposed subcontractors, including legal company name, contact person’s name, address, phone number. Working relationship between Proposer and subcontractors, if applicable. c. Acknowledgment of receipt of all RFP addenda, if any. d. A statement to the effect that the proposal shall remain valid for a period of not less than sixty (60) days from the date of submittal. e. Signature of a person authorized to bind Proposer to the terms of any contract resulting from the submittal. f. A statement to the effect that by signing the letter of transmittal, Proposer is attesting that all information submitted with the submit tal is true and correct. 3. TECHNICAL PROPOSAL a. Qualifications - Related Experience and References of the Proposer This section of the proposal should establish the ability of Proposer to satisfactorily perform the required work through evidence. The Proposer shall: a. Provide a brief profile of the firm. Information should include type of organization (corporation, partnership, sole proprietorship), year Item 2A-128 7 founded, size and location of support facilities (if applicable), equipment used (if applicable), and number of qualified personnel. b. Describe the firm’s prior experience in performing work of a similar nature with other public agencies (if applicable) to that solicited in this RFP. c. Identify key staff members and their role in the proposed project, including each person’s workload; highlight experiences in such work by the personnel proposed for assignment to this project. Additionally, include Sub-Proposers by company name, address, contact person, telephone number and their function relating to the work under this RFP. Describe Proposer’s experience working with each Sub-Proposer. d. Provide, as a minimum, three (3) references for the projects cited as related experience. Furnish the name, title, address, and telephone number of the person(s) at the client organization who is most knowledgeable about the work performed. The Proposer may also supply references from other work not cited in this section as related experience. b. Technical Approach/Work Plan This section of the proposal should exemplify the Proposer's understanding of Authority’s needs and requirements. The Proposer shall: a. Describe the approach and work plan for completing the tasks specified in the Scope of Work. The work plan shall be of such detail to demonstrate the Proposer’s ability to accomplish the project objectives and overall schedule. b. Outline sequentially the activities that would be undertaken in completing the tasks and specify key personnel proposed to perform the work. c. As a residential community, the selected Proposer must coordinate with the property manager on noticing residents of access limitations or other potential changes in living conditions. Describe the frequency and level of communication proposed during the project, and anticipated types of changes in living conditions based upon the Scope of Work. d. Furnish a project schedule for each task and subtask in terms of elapsed days from the project commencement date. e. Identify methods that Proposer will use to ensure quality control, as well as budget and schedule control for the project. Item 2A-129 8 f. Identify any special issues or problems that are likely to be encountered during the project and how the Proposer would address them. c. Exceptions/Deviations The Proposer shall state any exceptions to or deviations from the requirements of this RFP, segregating "technical" exceptions from "contractual" exceptions. Where Proposer wishes to propose alternative approaches to meeting the Authority’s technical or contractual requirements, or perceived conflicts of interest, these should be thoroughly explained. 4. APPENDICES Information considered by Proposer to be pertinent to this RFP and which has not been specifically solicited in any of the aforementioned sections may be placed in a separate appendix section. Proposers are cautioned, however, that this does not constitute an invitation to submit large amounts of extraneous materials. Appendices should be relevant and brief. If Proposer chooses to provide additional information in a separate appendix, Proposer is encouraged to identify such information is pertinent to the RFP. 5. DRAFT AGREEMENT – SECTION V Proposers shall familiarize themselves with the Auhtority’s Proposed Draft Agreement (Section V) and all the Attachments attached thereto. The Auhtority intends to use the attached Draft Agreement as the contract resulting from this RFP. At the time of the proposal submission, should the Proposer have concerns or recommended changes to the Draft Agreement requirements, those concerns/recommended changes must be included in writing in the submittal. The Auhtority may consider or negotiate changes to the Draft Agreement with the successful Proposer only to the extent the changes are provided to the Authority in writing within the proposal at the time of submission. B. PROPOSAL STEP TWO: COST PROPOSAL & INTERVIEW. Up to the top three ranked respondents from Step 1 may be interviewed. 1. COST AND PRICE This cost proposal shall be a clearly identified attachment that includes the estimate of probable construction costs, which will be required from the successful Proposer. The Authority may request a price schedule that includes a cost breakdown identifying items such as quantities, labor categories and rates, material costs, applicable taxes, shipping, storage, delivery charges, all direct costs, indirect costs, insurance, bonds, general conditions, and profit. Any costs not stated will not be paid by the Authority . Item 2A-130 9 SECTION III – EVALUATION AND AWARD Item 2A-131 10 SECTION III – EVALUATION AND AWARD C. EVALUATION PROCEDURE AND AWARD An evaluation committee will be appointed to review all proposals received. The committee will be comprised of Authority staff and may include outside personnel. The committee members will read the proposals separately and then discuss and review the written proposals. Each member of the selection panel will then evaluate each proposal using the criteria identified herein to arrive at a score for each proposal. The references given by the proposed short-listed Proposers may be checked and scored. Based on the proposal submitted, the committee will select a Proposer that will best serve the interest of the Authority and meet its objectives as outlined in the RFP. The Authority will negotiate a contract with the selected Proposer, however, the Authority Board has the final authority to approve said contract. The Authority will be the sole and exclusive judge of quality and compliance with proposal specifications in any of the matters pertaining to this RFP. D. PROPOSAL EVALUATION CRITERIA – STEP ONE: PREQUALIFICATION 1. QUALIFICATIONS OF THE FIRM 40 POINTS As described in Section II.3.a, the strength and stability of the firm, experience with other public agencies, performing work of similar nature, and technical competence of key personnel and subcontractors, as well as assessment of client references may be scored by the evaluation committee in areas directly related to this RFP. References may be contacted by a designated committee member. 2. TECHNICAL APPROACH/WORK PLAN 20 POINTS Depth of Proposer’s understanding of Authority’s requirements and overall quality of the technical approach and work plan; logic, and clarity of work plan; appropriateness of labor distribution among the tasks; ability to meet or better the Authority’s draft project schedule; the ability to provide suggested technical or procedural innovations and the identification of special issues and Proposer’s response in resolving those issues. 3. COMPLETENESS OF RESPONSE 10 POINTS Overall completeness and thoroughness of response in accordance with RFP instructions; attendance at pre-proposal meeting; exceptions to or deviations from the RFP requirements that the Authority cannot or will not accommodate; or other relevant factors not considered elsewhere. TOTAL POINTS AVAILABLE FOR STEP 1 70 POINTS Item 2A-132 11 E. PROPOSAL EVALUATION CRITERIA – STEP TWO: PROPOSAL/INTERVIEW Proposers will be evaluated on a best value basis based on the total points awarded in Step 1 + Step 2. 1. Project Proposal: All services, fees, and project cost 20 2. Presentation 10 TOTAL POINTS AVAILABLE FOR STEP 2 30 TOTAL POINTS AVAILABLE FOR STEPS 1 & 2 100 Item 2A-133 12 SECTION IV – SCOPE OF SERVICES / WORK Item 2A-134 13 SECTION IV – SCOPE OF WORK F. BACKGROUND & INFORMATION The Authority owns and manages Taos Palms Apartments, which is a 16-unit multi-family apartment complex located at 44830 Las Palmas Avenue (Property). The Property consists of four (4) single buildings on approximately 32,300 square feet (including the courtyard and parking areas). The Property is also a gated community with telephone entry access, pool, laundry facility and privacy railings. The exterior of the buildings includes an entrance structure, trellis structures, and decorative elements. These exterior elements have detoriated over time and require replacement and/or repair, as described below. G. OVERALL DESCRIPTION The Project consists of replacement or/and repair of existing: 1. Coutryard trellis structures. 2. Sideyard trellis structures. 3. Entry structures. 4. Decorative wood-structure elements. 5. Other General Scope. Replacement is to be based upon structural engineering evaluation and design that is to be provided by the Contractor. Structural engineer is to be licensed and in good standing in the State of California. H. SCOPE OF WORK 1. ENTRY STRUCTURES There are four (4) locations around the perimeter of the apartment complex. a. Replace all entry structures, including any affected metal fencing, hardware, and signage. b. Repair, modify or replace all concrete foundations, as needed. 2. COURTYARD TRELLIS STRUCTURES There are four (4) trellis locations in the courtyard of the apartment complex. a. Replace all wood trellis flat beams (8 x 12 in size or otherwise) and hardware. b. Replace all wood trellis columns (10 x 12 in size or otherwise) and hardware, including any wood fence walls between the columns. c. Replace all round wood trellis joist members (6” or 8” diameter “peeler poles”) and hardware. Item 2A-135 14 d. Repair, modify or replace all trellis column concrete foundations as needed, including the decorative walls between columns. e. Repair any areas where the existing plaster has been previously damaged or is missing. 3. SIDE-YARD TRELLIS STRUCTURES There are two (2) locations on the outside of the apartment complex. a. Replace all wood trellis flat beams (8 x 12 in size or otherwise) and hardware, as needed. b. Replace all round wood trellis joist members (6” or 8” diameter “peeler poles”) and hardware. c. Repair, modification or replacement of the steel trellis columns and concrete foundations, as needed. d. Remove and reinstall or replace all trellis-mounted light fixtures. e. Remove and reinstall or replace all roof drain system components affected by work. 4. DECORATIVE WOOD “PEELER POLES” a. Replace all decorative round wood “peeler poles” (6” or 8” diameter) and hardware b. Provide proper expansion joint between the new round wood “peeler poles” and the existing plaster allow for seasonal movement of the wood and weather protection with caulk and backer rod. 5. OTHER GENERAL SCOPE a. Documentation of the existing structures by photo and keyed to a plan map prior to any demolition. b. Repair or replacement of any existing items damaged by new work, including but not limited to, utility systems (electrical, gas, water, sewer), irrigation system, hose bibbs, landscape, concrete, plaster, paint, fire extinguisher cabinets, lighting fixtures, mailboxes, and signage. Replacement items shall be similar or equal. c. All replaced or repair or modified items shall match the existing in material, finish, size, and appearance. I. WARRANTY Provide a ten-year (10) warranty for all new exposed wood items. Provide requirements for owner maintenance to maintain warranty on replaced exposed wood items. J. DOCUMENTS FURNISHED BY THE CITY 1. Structural Evaluation & Observation Report by B.G. Structural Engineering dated August 15, 2019. Item 2A-136 15 K. PROJECT TASKS In general, project tasks will include, but are not limited to, the following: 1. MEETINGS a. Project kickoff design meeting with Authority staff to refine and clarify the project's objectives. b. Design review meetings at: o 30% Documents – Schematic Design o 60% Documents – Design Development o 90% Documents – Construction Documents (Plan Check) c. Periodic progress review meetings during construction (3). d. Punchlist job-walk meetings (2). 2. DATA COLLECTION, FIELD REVIEW & SURVEY The Proposer shall perform the necessary field work and research and assume all responsibility for the final design, including but not limited to. 3. DESIGN AND ENGINEERING The successful Contractor shall provide all design and engineering required for the Project. L. CONTRACT DELIVERABLES In general, contract deliverables will include, but are not limited to, the following: 1. Final design for replacement of the existing trellis systems and entrance structures. The design shall show location of new improvements to be installed and must incorporate all applicable codes and industry standards. 2. Plans are to be at on 24” x 36” sheets. The Proposer shall prepare plans and shall submit bond copies for Authority’s review and comment at the following stages of completion: • 30% Documents – Schematic Design • 60% Documents – Design Development • 90% Documents – Construction Documents (Plan Check Ready) • 100% Documents – Construction Permit Set • Final Record Set of As-Builts The Proposer shall submit the final set of plans on Mylar with a digital copy of all plans and documents in PDF and AutoCAD (latest version ). 3. Invoices must be submitted to the Project Manager based upon Progress on a monthly basis. A complete invoice(s) for installation must be submitted separately upon completion, or as agreed upon, to the Project Manager. Item 2A-137 16 4.City fees for permits will NOT be waived. Proposer must also coordinate with the Authority to schedule regular inspections as construction progresses. Copies of the permits must be submitted to the Project Manager as soon as they are available. Final inspection card must be signed by inspector and submitted to the Project Manager upon completion of installation. M.SCHEDULE Time is of the essence. The Contractor shall expedite services and proceed as soon as the Agreement is signed. The following is a preliminary schedule to represent the maximum durations for activities. Phase Start Duration Finish Calendar Days Months RFP 06/03/2022 35 1.1 07/12/2022 Owner Awards Contract 08/25/2022 30 1.0 09/22/2022 Kick-Off Meeting / Notice to Proceed 09/26/2022 1 0.0 09/26/2022 30% Design-Documents 09/14/2022 13 0.4 09/27/2022 Owner Review 09/27/2022 7 0.2 10/04/2022 60% Design-Documents 10/04/2022 14 0.5 10/18/2022 Owner Review 10/18/2022 7 0.2 10/25/2022 90% Design-Documents 10/25/2022 14 0.5 11/08/2022 Plan Check Review #1 11/08/2022 14 0.5 11/22/2022 95% Documents / Plan Check Response 11/22/2022 7 0.2 11/29/2022 Plan Check Review #2 11/29/2022 7 0.2 12/06/2022 100% Documents / Plan Check Response 12/06/2022 7 0.2 12/13/2022 Plan Check Complete / Permit Issued 12/13/2022 7 0.2 12/20/2022 Submittals / Procurement 12/20/2022 45 1.5 02/03/2023 Onsite Construction / Notice to Proceed 02/03/2023 45 1.5 03/20/2023 Owner Contingency 03/20/2023 30 1.0 04/19/2023 Overall 06/03/2022 320 10.5 04/19/2023 Item 2A-138 Page 1 of 3 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: John Ramont, Deputy Director of Finance REQUEST: AWARD OF CONTRACT TO WELLS FARGO BANK, N.A., FOR COMPREHENSIVE BANKING SERVICES RECOMMENDATION: 1. Award a contract to Wells Fargo Bank, N.A. for provide comprehensive banking services for a term of five years with an option to renew two (2) additional three-year periods based on satisfactory performance. 2.Authorize the City Manager or designee to negotiate and/or take any necessary actions to facilitate the agreement, to execute the agreement and any documents necessary to effectuate the actions taken herewith. BACKGROUND/ANALYSIS: The City of Palm Desert has maintained banking services with Union Bank since March, 2010. On August 5, the City issued a Request for Proposals (RFP) for comprehensive banking services through its online platform. Through the platform, the announcement was viewed 600 times, and 15 entities downloaded the bid package. Upon closing, the City received five proposals from the following institutions: •Bank of the West •First Bank •Pacific Western Bank •U.S. Bank •Wells Fargo Bank An evaluation team consisting of City and Desert Willow staff conducted an initial review of the proposals to recommend banks to a Subcommittee of the Finance Committee. The banks were evaluated on strength and stability, capability for providing services, use of advanced technologies, services costs, and responsiveness to the RFP. Three finalists were chosen to present to the subcommittee. The Subcommittee determined the top two finalists to be Wells Fargo and Bank of the West. The Subcommittee requested staff review the capabilities of each banks’ online capabilities and make a final recommendation. Based on the Subcommittee recommendations and the staff review of the online platforms, the final ranking was determined as follows: Bank Ranking Wells Fargo 1 Bank of the West 2 U.S. Bank 3 Item 2B-1 City of Palm Desert Award Contract for Comprehensive Banking Services Page 2 of 3 Analysis and review revealed that Wells Fargo met all of the key criteria required to meet the needs of the City, as well as having advanced technologies beyond the other institutions to significantly improve efficiencies over the City’s current banking services. All three of the initial finalist proposals represent cost savings over the current service provider. Under the current structure, banking costs are offset by interest earned on account balances. On average, the City pays approximately $920 per month. Each of the three finalists offered an interest rate (termed earnings credit rate) that offset all additional costs for services and provided for an “excess earnings” balance that can be invested in interest-earning accounts to further benefit the City. The table below summarizes the estimated net excess in the earnings credit: Bank Earnings Credit Excess (Monthly Estimated) Wells Fargo $9,071.21 Bank of the West $8,355.00 U.S. Bank $6,100.86 Under the offered proposals, Wells Fargo would represent a hard savings of over $110,000 per year to be reinvested in interest-bearing accounts, providing additional financial benefit to the City. Staff reached out to the local government customers who were provided as references for Wells Fargo and encountered nothing but glowing reviews on their services, relationship manager, technology, innovative suggestions, and implementation/transition/customer support. Based on all analysis, input and references, staff recommends awarding the contract for comprehensive banking services to Wells Fargo Bank, N.A. Staff intends to extend the current agreement with Union Bank which expires on December 31, 2022 for an additional six months in order to facilitate a smooth transition to Wells Fargo. The additional time will ensure that city financial activities will not be negatively impacted. Committee Recommendation: The Finance and Investment Committee will review this item on October 25, 2022. Staff will provide an oral update with their recommendation. FINANCIAL IMPACT: Banking fees are currently budgeted and paid from the general fund. Based on the proposed fee structure, the City can expect a reduction in fees and additional interest earnings that will positively impact the general fund. REVIEWED BY: Department Director: Veronica Chavez City Attorney: Carlos Campos Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo Item 2B-2 City of Palm Desert Award Contract for Comprehensive Banking Services Page 3 of 3 City Manager: Todd Hileman ATTACHMENTS: 1. Draft Agreement 2. Wells Fargo Proposal Item 2B-3 Contract No. ____________ CITY OF PALM DESERT CONTRACTED SERVICES AGREEMENT 1. PARTIES AND DATE. This Agreement is made and entered into this 27th day of October, 2027, by and between the City of Palm Desert, a municipal corporation organized under the laws of the State of California with its principal place of business at 73-510 Fred Waring Drive, Palm Desert, California 92260- 2578, County of Riverside, State of California (“City”) and Wells Fargo Bank, National Association, Minneapolis Wholesale, with its principal place of business at ("Contractor ") 333 Market Street, 29th Floor, MAC: A0119-293, San Francisco, CA 94105. City and Contractor are sometimes individually referred to herein as "Party" and collectively as "Parties." 2. RECITALS. 2.1 Serivces. The City is a public agency of the State of California and is in need of professional services for the following comprehensive banking services. 2.2 Contractor. Contractor desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Contractor is duly licensed and has the necessary qualifications to provide such services. 3. TERMS. 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. Contractor promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. 3.1.2 Term. The term of this Agreement shall be from January 1, 2023 to December 31, 2028, unless earlier terminated as provided herein. The City shall have the unilateral option, at its sole discretion, to renew this Agreement automatically for no more than two (2) additional three-year terms. Contractor shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. 3.2 Responsibilities of the Contractor. 3.2.1 Independent Contractor; Control and Payment of Subordinates. The Services shall be performed by Contractor or under its supervision. Contractor will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Contractor on an independent Contractor basis and not as an employee. Any personnel performing the Services shall not be employees of City and shall at all times be under Contractor 's exclusive direction and control. Neither City, or any of its officials, officers, directors, employees or agents shall have control over the conduct of Contractor or any of Contractor s officers, employees or agents, except as set forth in this Agreement. Contractor shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Contractor shall be Item 2B-4 Contract No. ____________ Exhibit “A” responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 3.2.2 Schedule of Services. Contractor shall perform the Services in a prompt and timely manner in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Contractor represents that it has the professional and technical personnel required to perform the Services expeditiously. Upon request of City, Contractor shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by Contractor shall be subject to the approval of City. 3.2.4 Substitution of Key Personnel. Contractor has represented to City that certain key personnel will perform and coordinate the Services. Should one or more of such personnel become unavailable, Contractor may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Contractor cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. The key personnel for performance of this Agreement are as follows: [***INSERT NAME AND TITLE***]. 3.2.5 City's Representative. The City hereby designates Veronica Chavez, Director of Finance, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Contractor but not the authority to enlarge the scope of Services or change the total compensation due to Contractor under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the scope of services or change the Contractor 's total compensation subject to the provisions contained in Section 3.3 of this Agreement. Contractor shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee. 3.2.6 Contractor's Representative. Contractor hereby designates Jaime O’Connell, VP/Relationship Manager, or his/her designee, to act as its representative for the performance of this Agreement ("Contractor 's Representative"). Contractor 's Representative shall have full authority to represent and act on behalf of the Contractor for all purposes under this Agreement. The Contractor 's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. 3.2.7 Coordination of Services. Contractor agrees to work closely with City staff in the performance of Services and shall be available to City's staff, Contractor s and other staff at all reasonable times. 3.2.8 Standard of Care; Performance of Employees. Contractor shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Contractor represents and maintains that it is skilled in the professional calling necessary to perform the Services. Contractor warrants that all employees and subcontractors Item 2B-5 Contract No. ____________ Exhibit “A” shall have sufficient skill and experience to perform the Services assigned to them. Contractor represents that it, its employees and subcontractors s have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. Contractor shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Contractor 's failure to comply with the standard of care provided herein. Any employee of the Contractor or its sub-Contractor s who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Contractor and shall not be re-employed to perform any of the Services or to work on the Project. 3.2.9 Period of Performance. Contractor shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Contractor shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibits “A” or “B” attached hereto, or which may be separately agreed upon in writing by the City and Contractor (“Performance Milestones”). Contractor agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Performance Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage. Neither City nor Contractor shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non-performing Party. For purposes of this Agreement, such circumstances include a Force Majeure Event. A Force Majeure Event shall mean an event that materially affects a Party’s performance and is one or more of the following: (1) Acts of God or other natural disasters; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the services); (4) strikes and other organized labor action occurring at the site and the effects thereof on the services, only to the extent such strikes and other organized labor action are beyond the control of Contractor and its subcontractors, and to the extent the effects thereof cannot be avoided by use of replacement workers; and (5) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of a public agency applicable to the services and Agreement. Should a Force Majeure Event occur, the non-performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. Force Majeure Events and/or delays, regardless of the Party responsible for the delay, shall not entitle Contractor to any additional compensation. Notwithstanding the foregoing in this section, the City may still terminate this Agreement in accordance with the termination provisions of this Agreement. 3.2.10 Laws and Regulations; Employee/Labor Certification. Contractor shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services and shall give all notices required by law. Contractor shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement. All violations of such laws and regulations shall be grounds for the City to terminate the Agreement for cause. Item 2B-6 Contract No. ____________ Exhibit “A” 3.2.10.1 Employment Eligibility; Contractor. Contractor certifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time and shall require all subcontractors and sub-subcontractors to comply with the same. Contractor certifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement and shall not violate any such law at any time during the term of the Agreement. 3.2.10.2 Equal Opportunity Employment. Contractor represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Contractor shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 3.2.10.3 Safety. Contractor shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Contractor shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. 3.2.11 Insurance. 3.2.11.1 Minimum Requirements. Without limiting Contractor’s indemnification of City, and prior to commencement of the Services, Contractor shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form that is satisfactory to City. (A) General Liability Insurance. Contractor shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted. (B) Automobile Liability Insurance. Contractor shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Contractor arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non- owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident. The City’s Risk Manger may modify this requirement if it is determined that Contractor will not be utilizing a vehicle in the performance of his/her duties under this Agreement. (C) Professional Liability (Errors & Omissions) Insurance. Contractor shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the Item 2B-7 Contract No. ____________ Exhibit “A” effective date of this Agreement and Contractor agrees to maintain continuous coverage through a period no less than three years after completion of the Services required by this Agreement. (D) Workers’ Compensation Insurance. Contractor shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000). Contractor shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of the City, its officers, agents, employees, volunteers and representatives. (E) Umbrella or Excess Liability Insurance. Contractor may opt to utilize umbrella or excess liability insurance in meeting insurance requirements. In such circumstances, Contractor shall obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability and employer’s liability. Such policy or policies shall include the following terms and conditions: (1) A drop down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; (2) Pay on behalf of wording as opposed to reimbursement; (3) Concurrency of effective dates with primary policies; and (4) Policies shall “follow form” to the underlying primary policies. (5) Insureds under primary policies shall also be insureds under the umbrella or excess policies. (F) Fidelity Coverage.Contractor shall provide evidence of fidelity coverage on a blanket fidelity bond or other acceptable form. Limits shall be no less than $1,000,000 per occurrence. (G) Cyber Liability Insurance. Contractor shall procure and maintain Cyber Liability insurance with limits of $1,000,000 per occurrence/loss, which shall include the following coverage: (1) Liability arising from the theft, dissemination and/or use of confidential or personally identifiable information; including credit monitoring and regulatory fines arising from such theft, dissemination or use of the confidential information. (2) Network security liability arising from the unauthorized use of, access to, or tampering with computer systems. Item 2B-8 Contract No. ____________ Exhibit “A” (3) Liability arising from the failure of technology products (software) required under the contract for Contractor to properly perform the services intended. (4) Electronic Media Liability arising from personal injury, plagiarism or misappropriation of ideas, domain name infringement or improper deep-linking or framing, and infringement or violation of intellectual property rights. (5) Liability arising from the failure to render professional services If coverage is maintained on a claims-made basis, Contractor shall maintain such coverage for an additional period of three (3) years following termination of the Agreement. 3.2.11.2 Other Provisions or Requirements. (A) Proof of Insurance. Contractor shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by City’s Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. (B) Duration of Coverage. Contractor shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Services hereunder by Contractor, his/her agents, representatives, employees or subcontractors. (C) Primary/Non-Contributing. Coverage provided by Contractor shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City before the City’s own insurance or self- insurance shall be called upon to protect it as a named insured. (D) City’s Rights of Enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications, or is canceled and not replaced, City has the right, but not the duty, to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Contractor, or City will withhold amounts sufficient to pay premium from Contractor payments. In the alternative, City may terminate this Agreement. (E) Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the City’s Risk Manager. Item 2B-9 Contract No. ____________ Exhibit “A” (F) Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against the City, its elected or appointed officers, agents, officials, employees, volunteers, and representatives or shall specifically allow Contractor or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Contractor hereby waives its own right of recovery against the City, its elected or appointed officers, agents, officials, employees, volunteers and representatives and shall require similar written express waivers and insurance clauses from each of its subcontractors. (G) Enforcement of Contract Provisions (non estoppel). Contractor acknowledges and agrees that any actual or alleged failure on the part of the City to inform Contractor of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. (H) Requirements Not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Contractor maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. (I) Notice of Cancellation. Contractor agrees to oblige its insurance agent or broker and insurers to provide City with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage. (J) Additional Insured Status. General liability, automobile liability, and if applicable, pollution liability and cyber liability, policies shall provide or be endorsed to provide that the City and its officers, officials, employees, agents, volunteers and representatives shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement, under such policies. This provision shall also apply to any excess/umbrella liability policies. (K) Prohibition of Undisclosed Coverage Limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. (L) Separation of Insureds. A severability of interests provision must apply for all additional insureds ensuring that Contractor ’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability exclusions. (M) Pass Through Clause. Contractor agrees to ensure that its subcontractors, subcontractors, and any other party involved with the Project who is brought onto or involved in the Project by Contractor, provide the same minimum insurance coverage and endorsements required of Contractor . Contractor agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the Item 2B-10 Contract No. ____________ Exhibit “A” requirements of this section. Contractor agrees that upon request, all agreements with subcontractors, subcontractors, and others engaged in the Project will be submitted to City for review. (N) City’s Right to Revise Specifications. The City and the City’s Risk Manager reserve the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving the Contractor ninety (90) days advance written notice of such change. If such change results in additional cost to the Contractor, the City and Contractor may renegotiate Contractor ’s compensation. If the City reduces the insurance requirements, the change shall go into effect immediately and require no advanced written notice. (O) Self-Insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by City. (P) Timely Notice of Claims. Contractor shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Contractor ’s performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. (Q) Additional Insurance. Contractor shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Services. 3.3 Fees and Payments. 3.3.1 Compensation. Contractor shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. 3.3.2 Payment of Compensation. Contractor shall submit to City monthly invoices which provide a detailed description of the Services and hours rendered by Contractor. City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges. If the City disputes any of Contractor 's fees, the City shall give written notice to Contractor within thirty (30) days of receipt of an invoice of any disputed fees set forth therein. Contractor shall submit its final invoice to City within thirty (30) days from the last date of provided Services or termination of this Agreement and failure by the Contractor to submit a timely invoice may constitute a waiver of its right to final payment. Payment shall not constitute acceptance of any Services completed by Contractor. The making of final payment shall not constitute a waiver of any claims by the City for any reason whatsoever. 3.3.3 Reimbursement for Expenses. Contractor shall not be reimbursed for any expenses unless authorized in writing by City, or included in Exhibit "C" of this Agreement. 3.3.4 Extra Work. At any time during the term of this Agreement, City may request that Contractor perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the services, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. Contractor shall not perform, nor be compensated for, Extra Work without written authorization from the City. Item 2B-11 Contract No. ____________ Exhibit “A” 3.4 Accounting Records. 3.4.1 Maintenance and Inspection. Contractor shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Contractor shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Contractor shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 3.5 General Provisions. 3.5.1 Termination of Agreement. 3.5.1.1 Grounds for Termination. City may, by written notice to Contractor , terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Contractor of such termination, and specifying the effective date thereof, at least thirty (30) days before the effective date of such termination. Upon termination, Contractor shall be compensated only for those Services which have been adequately rendered to City, and Contractor shall be entitled to no further compensation. Contractor may not terminate this Agreement except for cause. The rights and remedies of the City provided in this section shall not be exclusive and are in addition to any other rights and remedies provided by law, equity or under this Agreement. 3.5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Contractor to provide all finished or unfinished Documents and Data and other information of any kind prepared by Contractor in connection with the performance of Services under this Agreement. Contractor shall be required to provide such document and other information within fifteen (15) days of the request. 3.5.1.3 Early Termination. Notwithstanding any provision herein to the contrary, if for any fiscal year of this Agreement the City Council fails to appropriate or allocate funds for future payment under the Agreement after exercising reasonable efforts to do so, the City may upon seven (7) days’ written notice, order work on the Project to cease. Upon termination, Contractor shall be compensated only for those Services which have been adequately rendered to City, and Contractor shall be entitled to no further compensation. 3.5.1.4 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.5.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: Contractor : WELLS FARGO BANK, N.A. JAIME O’CONNELL, VICE PRESIDENT 333 MARKET STREET, 29TH FLOOR MAC: A0119-293 SAN FRANCISCO, CA 94105 Item 2B-12 Contract No. ____________ Exhibit “A” City: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 ATTN: Veronica Chavez, Director of Finance Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.5.3 Ownership of Materials and Confidentiality. 3.5.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Contractor under this Agreement ("Documents & Data"). All Documents & Data shall be and remain the property of City, and shall not be used in whole or in substantial part by Contractor on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Contractor shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Contractor is entitled under the termination provisions of this Agreement, Contractor shall provide all Documents & Data to City upon payment of the undisputed amount. Contractor shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Contractor shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Project, and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Contractor shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents. 3.5.3.2 Subcontractors. Contractor shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subContractor prepares under this Agreement. Contractor represents and warrants that Contractor has the legal right to license any and all Documents & Data. Contractor makes no such representation and warranty in regard to Documents & Data which were prepared by professionals other than Contractor or its subcontractors, or those provided to Contractor by the City. 3.5.3.3 Right to Use. City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project or another project, provided that any such use not within the purposes intended by this Agreement or on a project other than this Project without employing the services of Contractor shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Contractor ’s seal from the Documents & Data and indemnify and hold harmless Contractor and its officers, directors, agents and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Contractor shall be Item 2B-13 Contract No. ____________ Exhibit “A” responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Contractor shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Contractor , a party for whom the Contractor is legally responsible or liable, or anyone approved by the Contractor . 3.5.3.4 Indemnification – Documents and Data. Contractor shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers, agents and representatives free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted. 3.5.3.5 Confidentiality. All ideas, memoranda, specifications, procedures, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Contractor in connection with the performance of this Agreement shall be held confidential by Contractor. Such materials shall not, without the prior written consent of City, be used by Contractor for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Contractor which is otherwise known to Contractor or is generally known, or has become known, to the related industry shall be deemed confidential. Contractor shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 3.5.3.6 Confidential Information. The City shall refrain from releasing Contractor ’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Contractor of its intention to release Proprietary Information. Contractor shall have five (5) working days after receipt of the release notice to give City written notice of Contractor 's objection to the City's release of Proprietary Information. Contractor shall indemnify, defend and hold harmless the City, and its officers, directors, employees, agents, volunteers and representatives from and against all liability, loss, cost or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of an objection notice unless either: (1) Contractor fails to fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non-appealable order by a court of competent jurisdiction requires that City release such information. 3.5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement. 3.5.5 [Reserved] 3.5.6 Indemnification. Item 2B-14 Contract No. ____________ Exhibit “A” 3.5.6.1 To the fullest extent permitted by law, Contractor shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, agents, and representatives free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Contractor , its officials, officers, employees, subcontractors or agents in connection with the performance of the Contractor ’s Services, the Project or this Agreement, including without limitation the payment of all expert witness fees, attorney’s fees and other related costs and expenses except such loss or damage caused by the sole negligence or willful misconduct of the City. Contractor 's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by Contractor, the City, its officials, officers, employees, agents, volunteers or representatives. 3.5.6.2 If Contractor ’s obligation to defend, indemnify, and/or hold harmless arises out of Contractor ’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Contractor ’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor , and, upon Contractor obtaining a final adjudication by a court of competent jurisdiction, Contractor ’s liability for such claim, including the cost to defend, shall not exceed the Contractor ’s proportionate percentage of fault. 3.5.7 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. 3.5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Riverside County. 3.5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement. 3.5.10 City's Right to Employ Other Contractor s. City reserves right to employ other Contractor s in connection with this Project. 3.5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties. 3.5.12 Assignment; Subcontracting. Contractor shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination. Contractor shall not subcontract any portion of the Services required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. 3.5.13 References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All Item 2B-15 Contract No. ____________ Exhibit “A” references to Contractor include all personnel, employees, agents, and subcontractors of Contractor, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, volunteers and representatives except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 3.5.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 3.5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. 3.5.16 No Third-Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties. 3.5.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.5.18 Prohibited Interests. Contractor maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Contractor, to solicit or secure this Agreement. Further, Contractor warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Contractor, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.5.19 Authority to Enter Agreement. Contractor has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 3.5.20 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. 3.5.21 Survival. All rights and obligations hereunder that by their nature are to continue after any expiration or termination of this Agreement, including, but not limited to, the indemnification obligations, shall survive any such expiration or termination. [SIGNATURES ON NEXT PAGE] Item 2B-16 Contract No. ____________ Exhibit “A” SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT BY AND BETWEEN THE CITY OF PALM DESERT AND [***INSERT NAME***] IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written. CITY OF PALM DESERT By: L. Todd Hileman City Manager ATTEST: By: Anthony Mejia, City Clerk APPROVED AS TO FORM: By: Best Best & Krieger LLP City Attorney Wells Fargo Bank, N.A. [If Corporation, TWO SIGNATURES, President OR Vice President AND Secretary OR Treasurer REQUIRED] By: Its: Printed Name: [DELETE THE FOLLOWING SIGNATURE LINE and second notary acknowledgement IF second signature NOT REQUIRED] By: Its: Printed Name: QC Insurance: __________ __________ Initial Review Final Approval Item 2B-17 Contract No. ____________ Exhibit “A” SIGNATURE PAGE FOR SERVICES AGREEMENT BETWEEN THE CITY OF PALM DESERT AND [***INSERT NAME***] IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written. Item 2B-18 Contract No. ____________ Exhibit “A” EXHIBIT "A" SCOPE OF SERVICES See Attached Proposal Item 2B-19 EXHIBIT "A-I" FEDERALLY REQUIRED PROVISIONS FOR SERVICES Item 2B-20 EXHIBIT "B" SCHEDULE OF SERVICES See Attached Proposal Item 2B-21 EXHIBIT "C" COMPENSATION Compensation pursuant to pricing proposal. In the event that this Agreement is renewed pursuant to Section 3.1.2, the rates set forth above may be increased or reduced each year at the time of renewal, but any increase shall not exceed the Consumer Price Index, All Urban Consumers, Los Angeles-Riverside-Orange Counties. Item 2B-22 © 2022 Wells Fargo Bank, N.A. All rights reserved. Deposit products are offered through Wells Fargo Bank, N.A., Member FDIC. Wells Fargo Bank, N.A. is a banking affiliate of Wells Fargo & Company. City of Palm Desert Response to Request for Proposal for Comprehensive Banking Services #2022-RFP-132 September 9, 2022 Submitted by: Jamie O’Connell, Vice President Relationship Manager 951-295-7482 jamie.oconnell@wellsfargo.com Todd W. Reed, CPP eReceivables Consultant 619-857-3855 todd.reed2@wellsfargo.com Yolanda Mates, Senior Vice President Treasury Management Sales Consultant 480-348-4006 yolanda.a.mates@wellsfargo.com Item 2B-23 Table of contents Cover letter ......................................................................................................................... 1 Executive summary ......................................................................................................... 3 Experience and technical competence ................................................................... 5 Firm key contact personnel ......................................................................................... 7 Proposed service implementation............................................................................ 9 Scope of services ........................................................................................................... 10 10.1. Minimum qualifications ................................................................................................... 10 10.2. Bank liability .......................................................................................................................... 12 10.3. Disaster recovery................................................................................................................ 12 10.4. Monthly statements and account analysis............................................................ 17 10.5. Online banking services ................................................................................................... 19 10.6. Wire transfer services ...................................................................................................... 27 10.7. Automated Clearing House (ACH) ............................................................................ 32 10.8. Collection and deposit services ................................................................................... 39 10.9. Collateralization of deposits ......................................................................................... 42 10.10. Account reconciliation and positive pay ................................................................. 43 10.11. Overdraft processing ....................................................................................................... 53 10.12. Stop payment services .................................................................................................... 54 10.13. Custodial account services ............................................................................................ 54 10.14. Electronic storage of documents ............................................................................... 55 10.15. Payment card services ..................................................................................................... 55 Value-added services to consider .......................................................................... 75 4.4. No deviations from the RFP* .......................................................................... 85 Item 2B-24 Appendix Pricing proposal ....................................................................................................... Tab A Community fact sheets ....................................................................................... Tab B Sample implementation schedule .................................................................. Tab C Sample reports and statements ...................................................................... Tab D Public Funds-Collateralization ........................................................................... Tab E Wells Fargo Securities, LLC ................................................................................. Tab F Money Market Mutual Fund prospectus and fact sheets ................... Tab G Disclosures ................................................................................................................ Tab H Account agreements and service descriptions ........................................... Tab I Item 2B-25 © 2022 Wells Fargo & Company. All rights reserved. Jamie O’Connell Vice President Relationship Manager Wells Fargo Bank, N.A. Government Banking 334 W. Third St. Fourth Floor San Bernardino, CA 92401 September 9, 2022 John Ramont Deputy Director, Finance Finance Department jramont@cityofpalmdesert.org Dear John, On behalf of Wells Fargo Bank N.A. (Wells Fargo), we would like to thank you for the opportunity to respond to the request for proposal of comprehensive banking services for the City of Palm Desert (“City”). We are excited to share our technologies, best practices, and experience with you and hope we articulate this to you within our response. The City will be supported by a team of dedicated government banking professionals focused on municipal financial operations. I, Jamie O’Connell, your dedicated government relationship manager, will lead your Wells Fargo team and am authorized to make the proposed contractual commitments with the City. I will meet with you on a regular basis, coordinate the internal resources needed to provide solutions, and resolve any of your concerns. Your local Wells Fargo relationship team also includes relationship associate, Anna Gonzales; treasury management sales consultant, Yolanda Mates; treasury management sales analyst, Jessie Volz; and Todd Reed, eReceivables consultant. With 26 years of banking experience and 16 years dedicated to serving government customers, I take pride in the relationships that we have built over the years. We believe great customer service is most important in building that foundation. It is my goal to demonstrate to the City the value in our efficiencies and that Wells Fargo is the right partner for all of your financial needs. Why change banks? With the onset of the pandemic, our customers expressed the need to digitize, streamline, and create efficiencies within their current banking processes in order to better serve their clients and constituents. At Wells Fargo, we continuously invest in our products, our people, and the needs of our customers. Technology has changed the roadmap of yesterday’s banking and we are here to assist the City to maximize your needs today and well into the future. Item 2B-26 City of Palm Desert | 2 Included with our response is an executive summary demonstrating the products and services we are offering the City. Relationship banking is important to us and we demonstrate our commitment to the municipal sector, while also highlighting the value of having one banking partner creating a seamless relationship. We envision our role not only as your partner, but also as your strategic advisor, offering our vast expertise in government banking, all while providing creative solutions to assist you as the City propels into the future. Please reference my “Message to the City” page that is inserted before the pricing documents. We asked a lot of questions during this process in order to provide scenarios and recommendations that the City will find most valuable. What’s next? We have attached our proposal for banking services as requested in the Request for Proposal (RFP). After your RFP period has closed, it would be our pleasure to speak with you about how Wells Fargo can take your banking to the next level. We look forward to working with you. Sincerely, Jamie O’Connell, Vice President Relationship Manager Government Banking Division Item 2B-27 Wells Fargo Treasury Management City of Palm Desert | 3 Executive summary As a respected government entity, you have an obligation to safeguard the funds with which the public entrusts you. This includes managing taxpayer dollars, expenses, and costs wisely, with integrity, and to the benefit of the diverse communities that you serve every day. Your banking partner should be one who shares your vision of engagement, offers flexibility, and assists to help ensure your success. Wells Fargo combines all the best features of one banking institution, advanced secure services, the technology of a large bank with local customer service, and relationship management. Highlights from our proposal include: • Integrated reporting — increased efficiencies and visibility from accurate, streamlined reporting and reconciliation processes • A managed earnings credit rate (ECR) that is currently at 1.15% • Incentive credit of $15,000 to be used within the first 12 months of the contract to offset fees and purchase additional banking supplies (checks, deposit slips, scanners, and more) • We offer the City a great value for banking services and access to our award-winning online banking portal* * Global Finance. August 12, 2020. “World’s Best Digital Bank Awards 2020 Press Release.” Specialized teams with deep public sector knowledge Our Government Banking group provides a full array of banking solutions for state and local governments and related entities. With nearly 5,500 government relationships,* our national team of Government Banking relationship managers understands the specific challenges your institution faces and the products and services that can help resolve those challenges. In addition to the regional support provided by our teams, we also specialize in key subsectors of the industry including public power, transportation, and state housing finance authorities. We offer an integrated approach based on your business needs. We take great pride in approaching each relationship individually, as one team, leveraging the resources of Wells Fargo to create the most value for you. * wellsfargo.com > Commercial > Industry Expertise > Government (June 2021) A leader in innovation We will work with you to help you improve your customer experience, reduce strain on information technology (IT) resources, and accelerate automation. We’ve tackled these common challenges by changing our approach to the entire product lifecycle — including funding, staffing, development, and decision-making — in addition to investing in infrastructure enhancements, like the cloud. Why Wells Fargo? Best Information Security and Fraud Management2 Best Online Portal2 Best Open Banking APIs2 Overall Most Innovative for Wells Fargo Gateway APIs3 Item 2B-28 Wells Fargo Treasury Management City of Palm Desert | 4 Together, these programs allow us to deliver new and enhanced products and services to the market faster. Since the launch of our online banking portal in 2000, we have a more than 20-year record of consistent, annual reinvestment in the business in both new product development and digital channel enhancements. We also continually invest in our team members’ tools. A methodical approach We’ll put these innovative tools and expertise to use to conduct a review of your internal workflows. When we meet with you, we’ll observe and analyze workflows and processes in one or more of your financial back-office operations. This review can include processes such as accounts receivables, accounts payable, reconciliation, cash positioning, or all of these. We use observation, analysis, and reporting techniques that we’ve deployed through working with hundreds of organizations, both public and private. Once we have observed and analyzed your current treasury processes, we will provide recommendations on how we believe you can improve those processes to gain efficiencies, take advantage of automation, and improve the use of working capital. Commitment to the local market We have been offering banking services to customers in California since July 1852, which is where Wells Fargo was incorporated. We have been working with city governments like yours ever since. Wells Fargo serves hundreds of California local governments, including the State of California. Refer to the Appendix Tab B of our response for detail regarding Wells Fargo’s support in the Palm Desert community. Are you ready to take the next steps? In the proposal that follows, we provide further detail about the specific products we recommend, as well as our approach to delivering services. More importantly, we emphasize our desire to establish a collaborative relationship that gives you what you need to be successful for the long term. We look forward to continuing the conversation with you to get this important initiative underway. 1. “2022 AFP® Payments Fraud and Control Survey “Report,” Association of Financial Professionals, afponline.org/paymentsfraud 2. “World’s Best Digital Bank 2020 Round 1: Covid Raises the Digital Ante,” Global Finance. gfmag.com > The Magazine > September 2020. 3. 2018 Monarch Innovation Award Winners. Barlow Research Associates inc. barlowresearch.com > Monarch Awards Item 2B-29 Wells Fargo Treasury Management City of Palm Desert | 5 Experience and technical competence 1. Background: Provide history of the firm’s experience which specifically addresses experience with municipal and public agency banking and custodial account services. On March 18, 1852, our founders — Henry Wells and William G. Fargo — began an innovative start-up company dedicated to helping customers build businesses and manage money in a rapidly changing world. Wells and Fargo used their hands-on experience making deliveries by steamship and stagecoach to develop a network of offices from California to New York and around the world. Wells Fargo agents in thousands of communities provided financial services to local businesses, including money orders and funds transfers by telegraph as well as delivery of valuable goods and mail. Much has changed since 1852. New communities and industries have emerged and grown. Evolving technology has made communication and financial transactions faster. Across time, and for every generation, Wells Fargo has continued helping customers go further by providing innovative financial services to get ahead. In times of prosperity, depression, or war, people and businesses have turned to Wells Fargo for the solutions they need to survive and thrive. We’re committed to continuing this legacy of providing essential services, innovative solutions, and removing barriers so that we help enable consumers and communities achieve prosperity and success. For almost 170 years, Wells Fargo has been a trusted financial institution. We’re a leading national bank ranked third in assets by the Federal Deposit Insurance Corporation (FDIC) in 2022. The strength of our balance sheet helps us serve our government customers across the country. Government Banking is part of our Specialized Industries group. Through this group and its resources, we strive to provide the high level of service that you expect and deserve from your banking provider. Our more than 300 Government Banking employees work with nearly 5,500 government customers across our footprint of 39 states and the District of Columbia, with $42 billion in deposits and $21 billion in commitments. 2. References: The proposal shall include a list of municipal clients that are similar in size to the City. Provide the municipality's name, the name, title, and telephone number of the primary contact person. Based on our current understanding of your needs, we have chosen references with services that most closely resemble the setup we have proposed for the City. We provide contact information for these references in the table on the following page. Item 2B-30 Wells Fargo Treasury Management City of Palm Desert | 6 References* Nathan Statham Finance Director City of Coachella 760-262-6241 nstatham@coachella.org 53990 Enterprise Way Coachella, CA 92236 Company uses the following Wells Fargo services: • E-Box® • E-Bill Express • Receivables Manager • Previous day reporting • ACH services Lorena Rocha Finance Director City of Hemet 951-765-2330 lrocha@hemetca.gov 445 E. Florida Ave. Hemet, CA 92543 Company uses the following Wells Fargo services: • Cash vault • Desktop Deposit® • ACH services • Wires • Treasury Information Reporting Christina James Finance Analyst City of Victorville 760-955-5585 cjames@victorvilleca.gov 14343 Civic Dr. Victorville, CA 92393 Company uses the following Wells Fargo services: • Lockbox services • E-Box • ACH services • Wells Fargo Electronic DepositSM • Cash vault * Reference information is confidential. Item 2B-31 Wells Fargo Treasury Management City of Palm Desert | 7 Firm key contact personnel 1. Please provide information on the primary relationship manager for the implementation of the proposal. The City will have a dedicated relationship team that consists of experienced and knowledgeable specialists., Guided by your relationship manager, the team also includes a relationship associate, treasury management sales consultant, treasury management sales analyst, and customer service and product teams. The following biographies include details about your proposed relationship team that would be involved in assisting with ongoing support and implementation. Relationship Manager Jamie O’Connell, Vice President . 334 W. Third St. Fourth Floor San Bernardino, CA 92401 . jamie.oconnell@wellsfargo.com 951-295-7482 mobile Jamie offers the City consultative financial and banking guidance and coordinates the team of specialists that support your banking relationship. Jamie is your advocate at the bank and assists with all financial services you request from the bank. Jamie began working for Wells Fargo in 1996. She has been a relationship manager since 2012 and has focused on government customers for the past 16 years. She is an active member of the Wells Fargo Volunteer Chapter and is on the advisory board for the Inland Empire Ronald McDonald House. She also organizes volunteer groups for Habitat for Humanity and the Community Action Partnership of San Bernardino County. She is also a corporate member of CSMFO and frequently attends Coachella Valley Chapter meetings. Relationship Associate Anna Gonzales . 333 S. Grand Ave. Seventh Floor Los Angeles, CA 90071 . anna.l.gonzales@wellsfargo.com 213-253-7304, ext. 7304 office Anna supports your relationship manager and helps to enhance your customer service experience. She serves as your liaison with other areas of the bank. She also assists with questions related to account analysis statements and overdrafts. Anna has been in banking since 2008 and a relationship associate since 2019. She received her business management degree from Mount San Antonio College. Item 2B-32 Wells Fargo Treasury Management City of Palm Desert | 8 Treasury Management Sales Consultant Yolanda A. Mates, Senior Vice President 8601 N. Scottsdale Rd. Suite 200 Scottsdale, AZ 85253 yolanda.a.mates@wellsfargo.com 480-348-4006 cell Yolanda will share best practices on product and service information to assist in guiding the city in developing its’ treasury management goals, priorities, and objectives, all while understanding the uniqueness of her public sector customers. Yolanda has worked in banking since 2005 and has dedicated more than 13 years to the public sector. Yolanda is an active member of Women in Public Finance, CMTA, and CSMFO. Treasury Management Sales Analyst Jessie Volz, Assistant Vice President . 1350 Fashion Valley Rd. Fourth Floor San Diego, CA 92108 . jessie.volz@wellsfargo.com 619-688-2850 office Jessie supports your treasury management sales consultant. She works with you to begin new service implementations and can assist with treasury management questions when your sales consultant is unavailable. Jessie brings more than 14 years of banking experience to her current position. Jessie earned her B.S. in business management from San Diego State University in 2008. Lead Merchant Services Product Sales Consultant Todd Reed, CPP . 1350 Fashion Valley Rd. Fourth Floor San Diego, CA 92108 todd.reed2@wellsfargo.com 619-857-3855 office Todd recommends payment processing solutions to fulfill the City’s processing needs. He shares best practices and product and service information to guide you in developing your eReceivables program. He can also assist you with other receivables and print services products. Todd has worked in banking since 2000. He began working for Wells Fargo in 2017 as an eReceivables consultant. He is a Six Sigma Black Belt, an Enterprise Content Management Professional (ECMP), and a Management Action Program (MAP) graduate. Todd received his B.S. in business administration from the Rochester Institute of Technology. Item 2B-33 Wells Fargo Treasury Management City of Palm Desert | 9 Proposed service implementation 1. Describe the approach to providing banking services to the City. Proposer should take into account the scope of the Services, and general functions required. Include a draft schedule of tasks, milestones, and deliverables that will provide for timely provision of the Services. In reviewing the scope of services and goals described herein, the Proposer may identify additional necessary tasks and is invited to bring these to the City’s attention within the discussion of its proposed method to accomplish the work. *Response required Your assigned implementation consultant collaborates with you and your staff to develop the schedule and document the process we will follow. A sample schedule for our product implementation is included in the Appendix Tab C. While the sample schedule shows many crucial tasks, it is not comprehensive. After we meet with you to discuss your needs, we’ll customize it. The implementation lead time represents the length of time it takes to make the service available to the City once: • Your relationship team completes all required know your customer due diligence processes* • Your implementation consultant gathers all necessary information from you and our internal sources needed to implement your services • The City completes the required agreements and returns them to Wells Fargo * Due diligence processes can take up to 30 days to complete. Item 2B-34 Wells Fargo Treasury Management City of Palm Desert | 10 Scope of services Please describe the services provided relating to all the items referenced below, including proposing of any alternatives to improve the efficiency of the City's processes. Confirmed. We can provide the services requested in the RFP. Please refer to our responses to section 10.1. Minimum Qualifications, where we provide details of our service offerings. 10.1. Minimum qualifications The proposed vendor must be a qualified depository of public funds as defined in Section 53635.2 of the California Government Code and follow all federal and state laws and regulations, statutes, and policies. The vendor must be able to offer a wide range of banking services required by this RFP through the duration of the contract. We can meet this requirement. Wells Fargo is a qualified depository of public funds as defined by the State of California. Wells Fargo Bank, N.A., originally chartered on November 30, 1870, is a national banking association organized under the National Bank Act and is not incorporated under the laws of any state. Rather, it operates pursuant to a certificate of authority issued by the U.S. Comptroller of the Currency. Applicants must be adequately capitalized to accommodate the city’s cash and investment management needs. Banks are required to collateralize public fund deposits under California Government Code sections 53651 and 53652. In order to be considered for selection, proposing banks should meet all of the following criteria: 1. Have at least $5 billion ($5,000,000,000) in total assets. 2. Maintain minimum regulatory capital ratios that meet the definition of a “well capitalized bank”. They are as follows: 3. Total Risk-Based Capital Ratio: 10.0%. 4. Tier 1 Risk-Based Capital Ratio: 6.0%. 5. Leverage Ratio: 5.0%. 6. Have favorable statistical ratings from a nationally recognized rating service. 8. Be a Federal- or State of California-chartered financial institution. 9. Have a “satisfactory” overall rating in their most recent evaluation by the appropriate federal financial supervisory agency, in terms of meeting the credit needs of California communities. Item 2B-35 Wells Fargo Treasury Management City of Palm Desert | 11 9. Be capable of providing electronic and web-based banking services. 10. Be an approved State of California depository for public funds. Proposing banks who do not meet all of the aforementioned criteria may be eliminated from consideration. Wells Fargo & Company meets the stated requirements and is a nationwide, diversified financial services company. We’re headquartered in San Francisco, but we’re decentralized, so every local Wells Fargo office is a headquarter for satisfying all our customers’ financial needs and helping them succeed financially. We identify key measures of our financial strength in the following table. Key facts Measure Capital ratios Total equity to assets1 Risk-based capital2 • Common equity Tier 1 (CET1) • Tier 1 capital • Total capital Tier 1 leverage 9.76% 10.5% 12.0% 14.7% 8.0% Total assets2 $1.9 trillion+ Market capitalization3 $183.6 billion Website wellsfargo.com 1. Wells Fargo. 2021. wellsfargo.com > About Wells Fargo > Investor Relations > Annual Reports and Proxy Statements > 2021 Annual Report. 2. Wells Fargo. 2022. wellsfargo.com > About Wells Fargo > Investor Relations > Wells Fargo Quarterly Earnings > Q1 2022 Quaterly Supplement. 3. Internal Wells Fargo reporting as of Q1 2022. Annual Report To access the full Wells Fargo & Company Annual Report and other supplemental reports, please visit our About Wells Fargo webpage here: wellsfargo.com/about/investor-relations/annual- reports/. Community Reinvestment Act (CRA) rating for the State of California The CRA of 1977 requires banks to meet the credit needs of all the communities where they do business. In its most recent CRA examination, which covers the years 2012-2018, the Office of the Comptroller of the Currency (OCC) gave Wells Fargo a national rating of “Outstanding”. The bank’s strong performance on the exam’s components reflected positive results in Riverside County and other markets the bank serves. Item 2B-36 Wells Fargo Treasury Management City of Palm Desert | 12 The result reflects our ongoing commitment to lending to, investing in, and providing service to communities throughout the state. We will continue to promote economic growth, sustainable homeownership and neighborhood stability in low- to moderate-income communities in Riverside County and everywhere else we do business. You can find our most recent CRA performance evaluation at the following link: wellsfargo.com/about/community/wfcra/perf_evaluation. 10.2. Bank liability Please discuss the degree to which the Bank will assume liability for injury or harm to the City, its officers, officials, employees, agents, vendors, customers, creditors, bondholders, and third parties in general. The City needs to clearly understand the extent to which the Bank is willing to assume liability when extraordinary events might occur. During the term of the Agreement (should the Bank be awarded the bid), the Bank will indemnify, defend, and hold harmless the Customer and its officers, directors, employees, agents, and assigns (the “Indemnified Parties”) from and against all losses or damages (collectively, “Losses”) arising out of, resulting from, or relating to the performance of the services provided, which are, in each case, directly caused in whole or in part by the negligent or intentional misconduct of the Bank or any of its officers, directors, employees, agents, subcontractors, or assigns, except to the extent such Losses are caused by the negligence or intentional misconduct of the Customer. In no event will Bank be liable for any indirect, special, consequential, or punitive damages, whether or not the likelihood of such damages was known to the Bank, and regardless of the form of the claim or action or the legal theory on which it is based. Bank’s liability under this indemnity will be limited to an amount not to exceed 10 times Bank fees incurred during the calendar month immediately preceding the calendar month in which such loss or damages were incurred (or, if no Bank fees were incurred in such month, Bank fees incurred in the month in which the losses or damages were incurred). 10.3. Disaster recovery Please describe the bank's disaster recovery plans, emergency communication protocols, and backup systems. Explain how disaster recovery plans would enable the City to continue operations and delivery of community services in the event of systems breakdowns or other emergencies. Business continuity and resiliency Recent history shows us that having a solid business continuity plan in place, no matter the cause of the disruption, can be critical to business success. Wells Fargo seeks to manage this risk in accordance with our Business Resiliency and Disaster Recovery Risk Management policy and business procedures to achieve business goals and comply with laws, rules, regulations, and regulatory guidance to protect our customers and ourselves. Item 2B-37 Wells Fargo Treasury Management City of Palm Desert | 13 We have formal teams dedicated to managing disruptions to our services. Our Enterprise Business Continuity Resiliency Planning office sets the standards for our organization. Each business, in conjunction with operational risk management partners, helps ensure preparedness and compliance at the organizational levels. Standard elements of our business continuity and resiliency programs include: Annual plan review, testing, and maintenance Identification of alternate strategies and recovery procedures Identification of internal and external dependencies including regular review of third-party service providers Identification of potential risks and controls for mitigation Prioritization of business functions and technology Procedures for communication with customers, suppliers, and essential staff Recovery of technology and data General program elements for our enterprise Testing recoverability We update and test our recovery procedures regularly, with the frequency and timing varying by business function or application. We exercise essential business recovery procedures and systems at least annually. Critical functions After a disruption, we prioritize restoring and maintaining normal service levels for our critical functions. Components of our recovery plans vary based on the potential business disruption, such as a loss of facility, loss of technology, or significant reduction to our staff or of third-party providers. We identify the main areas most commonly affected and then provide our general approach to each. Data and operation centers We’ve dispersed our data and operation centers strategically across multiple locations to minimize potential disruption within a specific geographic region. We engage our technology teams quickly when we detect a disruption at a primary data center. Our technology teams assess the situation and determine next steps based on the nature of the disruption. If we need to shift processing to an alternate data center, we can because we maintain redundant platforms for our business critical services. All alternate sites have sufficient capacity to maintain processing for an extended period. In most situations, we can restore service at a primary data center for critical services within 12 hours.* Item 2B-38 Wells Fargo Treasury Management City of Palm Desert | 14 If a disruption occurs at one of our primary operation centers, we use an identified backup site to take over day-to-day processing and support. We use our backup site until the primary site returns to normal conditions. * This zero to 12 hour goal does not guarantee that certain events will not affect Wells Fargo systems or that we will achieve specific recovery times in the event of a disruption. Third party providers We use third-party service providers and contractors to support a variety of functions. We evaluate each of them prior to the execution of a contract for services, and beyond. Our evaluation uses a risk-based approach to assess providers as we review, select, and monitor their performance. Our Vendor Management Program conducts service provider validation and joint testing of our essential providers. It includes an assessment of the service provider’s ability to meet our disaster recovery standards for service level agreements and recovery time objectives. Program elements specific to treasury management In addition to our enterprise program elements, we’ve incorporated the following elements into our business continuity resiliency plans for our treasury management services. Communication Notification methods to inform you of a service disruption include: • Phone calls or emails from your relationship team • Recorded messages from our Customer Care for Businesses (CC4B) Service Office advising the City about system issues when you contact us through our toll-free number • System status alerts displayed on the homepage of our online banking portal The method we use to communicate with you depends on the nature of a disruption. If a disruption prevents you from accessing your information, your relationship team can help. They have access to bank systems and can provide the account information, balances, and other data you need to continue operating. Backup strategies for online channels Online banking portal If the online banking portal experiences a disruption, we use our backup environment. The backup environment is a duplicate of our online banking portal and is in a separate location from the primary site. Client service officers are on call 24 hours a day, seven days a week, ready to respond to a disruption. Item 2B-39 Wells Fargo Treasury Management City of Palm Desert | 15 Mobile service We have a backup environment for our mobile platform* in the event of a system outage. Our mobile service and online banking portal channels use different web addresses and user interfaces. This arrangement means that, depending on the nature and root cause of an outage, users may be able to access services through the mobile service if our online banking portal experiences a disruption. Additionally, our mobile token feature allows users to use their mobile devices in place of physical tokens to access secure services. This access can be helpful in instances when a disaster event separates users from their physical tokens. * Download the latest version of the CEO Mobile® app available for your device from the Apple App Store® or Google Play™ store. Backup strategies for core services ACH payments When we invoke our ACH recovery plan, processing diverts to a backup site. We can recover with minimal down time because we run ACH production simultaneously at our primary data center and at our backup sites.* The diverse geographic locations of our processing centers help to minimize potential disruption. However, the severity or nature of a specific event may require use of manual backup procedures. As a contingency step, we recommend that you establish an alternate method of initiating payments, such as our online ACH services,† to upload files or manually key in payment information. * Running simultaneous ACH production does not guarantee that certain events will not affect Wells Fargo systems or that we will achieve specific recovery times in the event of a disruption. † You will need to enroll in our online ACH service separately from the direct origination service and plan for implementation prior to an emergency. Wire transfer When we invoke our business continuity resiliency plan, processing diverts to a backup site. Each backup site has the ability to accept transferred wire processing workloads, including wires initiated by telephone. We maintain redundant connections to two different Federal Reserve Banks, which minimizes potential disruption within a geographic region. We conduct comprehensive joint testing with the Federal Reserve Bank on a quarterly basis. You can also enroll in a backup wire transfer channel. For example, you can choose from telephone-initiated wires or our mobile service to access select functions of our wire transfer service.* * You will need to enroll in backup wire services separately and plan for implementation prior to an emergency. Item 2B-40 Wells Fargo Treasury Management City of Palm Desert | 16 Transmission service We have a backup environment for our browser-based transmissions service. It includes an alternate website in case our online banking portal is unavailable. As a best practice, we recommend that customers leverage URLs if using automation scripts and not IP addresses, which are subject to change. ACH Fraud Filter Business disruptions can create opportunities for fraud. It’s important that during a disruption you can continue to view details and make decisions on your ACH transactions. You can access our ACH Fraud Filter service online or through our mobile service. Alternatively, you can obtain ACH information by calling our CC4B Service Office. Cash vault If a primary cash vault site is unable to accept, deliver, or process cash, we work through a backup site. We disperse our cash vault sites strategically so that we minimize potential disruption within a specific geographic region. Transportation issues and the additional distance between you and the backup site may cause delay of the cash delivery during a disaster or emergency. If such an event occurs, we take reasonable action to resume our normal cash delivery service levels as soon as possible, given the available transportation options. Remote deposit We automatically store checks that you capture through our remote deposit service on our servers. If a power outage or other disruption prevents you from completing a deposit, it remains in a pending deposit status. It remains in this status until you can access the system again. You can view a summary of all your deposits that require review prior to completion. As a backup, you can make deposits using a mobile device with a camera through our CEO Mobile application or by taking your deposit to a Wells Fargo branch. Keeping current To keep current with changes in the business continuity resiliency and disaster recovery industry, we’re active in forums that discuss and share best practices. The forums include: • Disaster Recovery Institute International • Financial Industry Regulatory Authority • Global Financial Markets Association • The Institute of International Finance Item 2B-41 Wells Fargo Treasury Management City of Palm Desert | 17 10.4. Monthly statements and account analysis Please describe how the Bank proposes to provide on-line monthly account reconciliation reports, Bank statements, account analysis statements, “prior day statement” and other report related features normally associated with municipal government accounts. Please describe the Bank's ability to customize reports to accommodate the City's preferences. Bank statement timing Electronic bank statements are available online one to two business days after the accounting period ends.* Paper bank statements are mailed within three business days of your cutoff date. We encourage you to use electronic bank statements so you are able to access your information sooner and help save resources. * Statement availability varies by account type and services used. Account analysis To make the most of your balances, the City can group accounts into a single relationship for analysis and earnings allowance purposes. We aggregate total charges and the total earnings allowance at the relationship level. We also aggregate balances in all accounts (excluding controlled disbursement accounts) in the same relationship to determine the earnings allowance and to offset fees. If you need to segregate billing for certain entities within your organization, you can set up multiple analysis relationships that only include accounts for each of those specific entities. Each account within a relationship also receives individual account analysis statements. Customers who use our subaccounting service can also choose to receive individual account analysis statements for each subaccount. Your treasury management sales consultant, Yolanda Mates, can assist you in configuring your account analysis structure to best fit your specific needs. Reporting Although we calculate the earnings allowance at the relationship level, we can provide reporting at two additional levels — summary and intermediate — as described in the following table. Reporting option Description Summary level These reports summarize balance and volume data for multiple relationships. As an example, an organization made up of multiple subsidiaries that require segregated billing can use a summary level statement to provide an overview of its entire Wells Fargo treasury management relationship. Intermediate level These reports provide a summary of balance and volume data for a particular group of accounts linked to one relationship. You can have multiple intermediate levels within a relationship. Typically, customers use intermediate level statements for regional or divisional reporting. Item 2B-42 Wells Fargo Treasury Management City of Palm Desert | 18 Statements We are one of the few financial institutions that offers an online interactive analysis statement. With our interactive statement, the City can trend up to 13 months of analysis history and see a quick overview of changes in your activity and pricing. Our online interactive statement is available within one to three days after the previous month’s statement data is generated.* With a single sign-on, you can view detailed product subtotals as well as volume and pricing for services you used. You can view the interactive statement online or download it in PDF, Excel, HTML, or CSV formats. * The statement cycle cuts off on the last calendar day of the month. Our system consolidates the monthly activity in five days and generates the statement within one to three business days thereafter, per our service levels. Earnings allowance The City receives a monthly account analysis statement detailing fees, the ECR, and any fees due. The earnings allowance is based upon the ECR and balances (excluding controlled disbursement accounts). The same price schedule applies, regardless of the earnings allowance. We debit your account after each billing period for the fees in excess of the earnings allowance; however, your treasury management sales consultant can discuss alternative payment options and billing periods with you. We use an ECR to calculate the amount of fees offset by balances. The ECR is set internally on a monthly basis at our discretion and may be adjusted during the month to react to market changes. We determine the standard ECR after evaluating a combination of factors, including: • Fed Funds Target rate • Competitor rates • Other market indicators We calculate your earnings allowance based on 100% of your average daily positive collected balance. We do not deduct a reserve requirement prior to calculating the ECR. Your earnings allowance is calculated using the following formula: (average daily positive collected balance) × (number of calendar days in the month) × (ECR) ÷ actual number of days in the year We charge a recoupment fee to partially recover deposit insurance premiums that we pay to the FDIC.* Your account analysis statement details this fee as an individual charge. * The FDIC does not charge a bank’s depositors for deposit insurance or require banks to pass the cost of deposit insurance on to their depositors. Report customization The City has the option to configure reports for one-time use and to save the configured reports for reuse. Users can save up to 100 customized reports and edit them at any time. Our service allows you to share up to 200 reports, at the organizational level, and each user can individually share up to 50 reports. To save time, you can share reports among similarly authorized users. Item 2B-43 Wells Fargo Treasury Management City of Palm Desert | 19 Please provide the following sample reports or nearest equivalent: • "Prior Day Statement" Report • Monthly Checking Account Statement • Account Analysis Statement • Account Reconciliation Report • Downloadable transaction data • Any other reports or online services that the bank recommends for supporting the City's ability to manage cash Please refer to the Appendix Tab D section of our proposal for our sample reports and account statements. 10.5. Online banking services The Bank must have a comprehensive on-line application to allow the City to receive previous day balance and transaction information for each account. The City currently uses on-line banking services to obtain a balance report each morning to assist in their cash management functions. The City is seeking to leverage technology and automation to the greatest extent possible to improve efficiency and controls over cash management. The City encourages respondents to propose innovative solutions. As one of the first banks in the U.S. to offer web-enabled treasury management services, Wells Fargo is recognized as a leader in online and mobile services. We list some of our recent industry and trade publication awards in the following table. Global Finance1 Best Corporate/Institutional Digital Bank in North America (2020) • Best Online Portal • Best Online Investment Management Services • Best Trade Finance Services • Best Integrated Corporate Banking Site • Best Information Security and Fraud Management Best In Social Media Marketing and Services • Best Open Banking APIs Global Finance2 Best Provider of Short-Term Investments/Money Market Funds (2022) Keynova Mobile Banking Scorecard3 #1 in Mobile Web Banking Experience 1. Global Finance. August 12, 2020. “World’s Best Digital Bank Awards 2020 Press Release.” Item 2B-44 Wells Fargo Treasury Management City of Palm Desert | 20 2. Global Finance. March 4, 2022. Gfmag.com > The Magazine > March 2022 “Best Treasury and Cash Management Providers 2022: North America. AI, big data and cloud computing sharpen forecasting accuracy.” 3. Keynova. 2021. keynovagroup.com > Scorecard Winners. Single sign-on for multiple services Our online banking portal is available 24 hours a day, seven days a week, providing you single sign- on access to account information and a wide range of financial services. By tailoring user preferences on your online banking portal home page, you can view account balances and transaction information at a glance. The following table lists the services you can access through our online banking portal. Online services Treasury Management ACH Payments Administration Alerts Basic Banking Bill Manager Cash Concentration Cash Vault Centralized Disbursements Deposit Maintenance Desktop Deposit E-Box Decisioning Electronic Document Delivery Fraud Manager • Positive Pay • Check Issues1 • ACH Fraud Filter Healthcare Claims Payments Healthcare Supplier Payments Lockbox Payments Payment Manager® Payment Manager File Validation Tool Receivables Manager Returned Item services Reverse Positive Pay SAFE Transmission Statements & Notices Sweep Statements and Confirmations Transaction Search • Search transaction history • Images • ACH Deletes and Reversals Treasury Information Reporting • Pooling and Intercompany Loans WellsOne® Expense Manager WellsOne Virtual Card Payments WellsTaxSM payments Wire Transfer International Services2 Canadian Treasury Services CyberSuite Foreign Exchange CEO Trade Credit, Loan, and Finance Capital Finance Commercial Mortgage Servicing View Credit Management Customer Online Management System Trust and Investment3 Allspring Funds Commission Management System Derivatives Access Fed Funds Institutional Investing: Reporting Institutional Investing: Trading Mutual Fund Reporting Mutual Fund Trading Prime Services Security Valuations Trust Information Delivery Trust Portfolio Reporting Wells Capital Management Wells Cap Portfolio Reporting Item 2B-45 Wells Fargo Treasury Management City of Palm Desert | 21 Online services • Stop Payments 1. Add new checks, cancel existing checks, or place stop payments. 2. Deposits held in non-U.S. branches are not FDIC insured. 3. Investment products are not FDIC-insured, are not deposits of or guaranteed by the bank, and may lose value. Deposit and credit products are offered by Wells Fargo Bank, N.A. Member FDIC. Features and capabilities With our online banking portal, you can: • Sign up for services, including alerts by email or text • Centralize your payment and disbursement capabilities • Place stop payments, research transactions, and view images • Customize and download current day and previous day reports • Initiate U.S. and global ACH payments, wire transfers, foreign exchange, trade, credit, and trust transactions • Mitigate fraud and operational risk with advanced monitoring tools • Set and manage authorizations, transaction limits, and assign administrators Treasury Information Reporting Our Treasury Information Reporting service delivers configurable information reporting for all your account activity. You can access your information both online and through our mobile service. With our service, you can view, print, or download your balances and transactions — and view check images on select reports. You can choose from a number of standard reports that provide current and previous day information, including comprehensive balance, summary, and transaction details, as well as reports on specific transaction types. You can download reports, as needed, into your accounting, treasury workstation, enterprise resource planning (ERP) platform, or systems of record. View and download options vary by report, but include HTML, PDF, Excel, CSV, and BAI V2. Current day Our current day (intraday) reporting includes balance information transaction details such as: • ACH receipts and settlement • Cash letter deposits with availability • Controlled disbursements • Incoming and outgoing wires • Lockbox deposits with availability or detail • Remote deposits with detail Item 2B-46 Wells Fargo Treasury Management City of Palm Desert | 22 Our standard data storage provides access to seven calendar days of transaction history. We also offer optional extended storage of 30, 60, or 90 calendar days. We update current day information multiple times throughout the day. The exact times depend on the specific transaction. We report transactions that post, and we update current ledger and available balances, on a near real-time basis. Available reports Intraday reports With this report, you can: ACH Origination View ACH-originated transactions and confirm that Wells Fargo received and processed them. ACH Receive View timely information for all received ACH transactions that will post to your account at the end of the current day. ACH Return/NOC Receive detailed information for all ACH transactions that were returned for any reason, as well as notification of change (NOC) information for items that processed successfully but may require additional action. Controlled Disbursement Detail Receive check details for each of your controlled disbursement accounts. Controlled Disbursement Summary Receive a summary of the current day presentment and adjustment activity, helping you identify excess funds. Deposit Detail View your electronic deposits for the day, including the items in each deposit and whether the items were processed as checks or converted to electronic transactions. E-Box Review and post payments that originate through an online bill pay service. View information needed to match payments to your accounts receivables.* EDI Payment Detail Obtain detailed ACH and EDI payment data with addenda translations from your trading partners in a comprehensive format. Intraday Composite Receive a comprehensive view of intraday information, including balances, transaction summaries, and transaction details. Intraday Position View total balances across multiple accounts with summarized debit and credit information, helping you determine your intraday cash position, and make daily investment and borrowing decisions. Intraday Return Item Detail Access details of returned paper items before your account is charged for the returns. Lockbox Availability Determine your funds availability for all lockbox deposits. Lockbox Detail View detailed information about received lockbox payments from your customers. You can also view images from each deposit, including checks and remittance documents. Wire Transfer Detail Receive complete details for all outgoing and incoming wire transfers, including book transfers, domestic U.S. wires, and cross-border wires. * Standard report storage is 60 days. We do not offer extended storage for this report. Item 2B-47 Wells Fargo Treasury Management City of Palm Desert | 23 Previous day Our previous day reporting includes all transaction types that post to your accounts. Our standard data storage provides access to seven calendar days of history. We also offer optional extended storage of 30, 60, 90, or 120 calendar days for balances and transaction details. We update previous day information by 3:30 a.m. Pacific Time Tuesday through Friday, and by 5:30 a.m. Pacific Time on Saturday, though it is often available sooner. Available reports Previous day reports With this report, you can: ACH Customer Activity Access ACH settlement information and adjustment details by account, as well as a summary of return activity so you can make more informed decisions about managing your accounts. Express Balance Receive a quick snapshot of your previous day account balance information as well as your current available balance. Loan Manager Receive a consolidated view of your asset-based loan activity, including summaries of operating account, collateral account, and loan activity. Month-to-Date Balance View a daily summary of account balances — including averages, aggregate float, and total transactions — posted to your account for month-to-date, prior month, or a specific date range. Previous Day Posting Status View this report throughout the day to see when your accounts’ previous day information is available. This report can include information for Wells Fargo accounts and accounts at other financial institutions. Previous Day Composite Receive a comprehensive view of previous day posted account information, including balances, transaction summaries, and transaction details. You can also view images of each check transaction and view full detail for wire transfers and received ACH transactions. Previous Day Return Item View details of paper returns after they are charged to your account. You can also view images of each returned item. Sweep Account Position* Monitor your line of credit, view your investment position for the next day, see how sweep activity impacts your line of credit, and track dividend accruals. * For Money Market Mutual Fund Stagecoach Sweep® and Credit Sweep customers only. Investment products are not FDIC insured, are not deposits of or guaranteed by the bank, and may lose value. Deposit and credit products are offered by Wells Fargo Bank, N.A. Member FDIC. Reconciliation reports and statements Our reconciliation reports and statements allow you to reconcile your account with your internal accounting records. These reports may also help you detect and reduce check fraud on your accounts. Item 2B-48 Wells Fargo Treasury Management City of Palm Desert | 24 Available reports Reconciliation reports and statements With this report, you can: ARP Statements and Optional Reports1 ARP Off-Cycle Reports1 Access your ARP statements as well as 14 optional ARP reports or choose only the data you want to see before you download your ARP statements and off-cycle optional reports in CSV or Excel format. ARP File Posting Confirmation2 View a summary of your account reconciliation activity by date, including check issues, cancels, voids, and stop payment requests, releases, and renewals. ARP Data Query Report3 Perform queries on your ARP account information and download the results in CSV or Excel. DDA Cycled Statement4 View your electronic statement of checking activity the day after your statement cycle closes. 1. Standard storage is 13 months. 2. Standard storage is 45 calendar days. 3. Standard storage is 90 calendar days. 4. Standard storage is five cycles with a daily cutoff or three cycles with all other cutoffs. Why Wells Fargo Our information reporting features differentiate our service. Report configuration and sharing options Your users can have near real-time access to the information they need to make critical business decisions. Users can save up to 100 custom reports. To save time for all your users, you can share saved reports among similarly authorized users. Our service allows customers to share up to 200 reports at the company level, and each user can share up to 50 reports. Configure reports, share data, and access your information 24 hours a day, seven days a week. Data exchange Our data exchange reporting service allows you to combine the information from your accounts at Wells Fargo and other banks for a complete look at your financial position. Incoming Data Exchange sends intraday or previous day account balance and transaction details to Wells Fargo from participating financial institutions worldwide. Mobile access When you need to view reports while you are on the go and away from your desk, we offer our mobile service* as an extension of our online banking portal. Through our mobile service, you can access the same reports that you access through our online banking portal. * Download the latest version of the CEO Mobile app available for your device from the Apple App Store or Google Play store. Item 2B-49 Wells Fargo Treasury Management City of Palm Desert | 25 Automated downloads With our optional automated downloading service, you can reduce the amount of time you spend on routine tasks like report retrieval. Our service can generate reports at any time, or you can schedule them to run daily, weekly, or monthly and have them automatically delivered to your printer, email, or system of record. Optional alerts Our optional Alerts service complements our information reporting service. If you subscribe to this service, you can receive critical information alerts by email and text about account activities, including: • Controlled disbursement totals • Incoming and outgoing wires • Intraday balances • Positive pay exception activity and unauthorized ACH transactions • Received and returned ACH activity • Returned checks Based on your preferences, we can notify you immediately, once every hour, once every two hours, once a day, or twice a day. Transaction Search Available through both our online banking portal and mobile service, our Transaction Search service enables you to: • Search for a variety of transactions • View and print images • Manage stop payments • Request ACH deletes and reversals • Access activity reports Search With the search function, you can search for transactions across multiple accounts and ACH IDs. You can search for: • Deposits, paid checks, and other account activity for the previous seven years • Initiated ACH transaction history for up to 180 days — or 13 months with our extended storage option • Stop payment information for as long as the stop remains in effect • Extended detail for wire transactions, RTP® network payments,* and received ACH transactions for up to 180 days • Expanded Account Reconciliation Plan (ARP) information for cancelled and voided checks for the current statement cycle and two previous statement cycles† * RTP is a registered service mark of The Clearing House Payments Company L.L.C. Our RTP Services for credit transfer are available subject to applicable product eligibility. Item 2B-50 Wells Fargo Treasury Management City of Palm Desert | 26 † The outstanding check information remains available until the item is dispositioned. Images You can view images online and download them in PDF formats. Eligible items include: • Deposit tickets • Deposit checks • Paid checks Images are available by 6:00 a.m. Pacific Time the business day after posting. Some images may also be available on an intraday basis. Images are available for seven years. Stop payments You can place a stop payment for a single check or a list or range of up to 50 checks. Our service automatically verifies if the check posted within the last 180 days, including intraday memo post activity. If you try to place a stop on a check that already has one, our service displays the existing stop payment with expiration date. Stop payments are effective immediately when successfully initiated through the Transaction Search service. ACH Deletes and reversals Authorized users can submit a request to either delete or reverse an initiated ACH transaction. Request Delete You can request to delete an ACH transaction before we distribute the transaction to the ACH operator. Delete requests must be received before 1:00 p.m. PT on either the day the original file was submitted or two business days prior to the item’s posting date, whichever is later. For same-day transit items, we must receive your deletion request by 5:00 a.m. PT. If you submit a deletion request after the deadline, we process the item as a reversal. Per Nacha guidelines, you must notify the receiver of the reversal. Reversal You can request to reverse an ACH transaction after we have distributed the transaction to the ACH operator. Reversal requests must be received before 1:00 p.m. PT by the fourth business day after the settlement date of the original item. Per Nacha guidelines, you must notify receivers of any reversals. Re-initiate If you use a check conversion service, you’ll have the ability to reverse, re-initiate, or reverse and re-initiate ACH converted check transactions with a new dollar amount. Activity reports Authorized users can access 365 days of Transaction Search user activity related to image retrieval and stop payment activity. Activity reports are available in HTML. Item 2B-51 Wells Fargo Treasury Management City of Palm Desert | 27 Our approach to innovation We focus on ideas that make banking faster, easier, and safer. We start with the solution — how we can leverage a new capability to make customers’ lives easier. We don’t implement technology just for technology’s sake. With that mindset, we explore emerging technologies such as distributed ledger technology and predictive personalization and think creatively to understand how it can help us deliver transformative customer experiences. For example, we’re using artificial intelligence to help simplify processes for both our employees and customers. Innovation also includes thinking beyond our walls. The future of banking relies on investing in critical partnerships such as those with fintechs. Leveraging the data and scale of Wells Fargo with the nimbleness and precision of fintechs and technology firms can help create results that are better than the sum of its parts. 10.6. Wire transfer services The Bank must have the capability to accommodate incoming and outgoing electronic transfers. The Bank should also provide the City with a money transfer type service that allows the City to initiate on- line wire transfers and intra-book transfers among the City’s various accounts. We offer the capability to send and receive wires, and transfer funds between your accounts more quickly, easily, and securely. Incoming wires We accept wires from Wells Fargo accounts and from the following networks: • Federal Reserve • SWIFT (Society for Worldwide Interbank Financial Telecommunication) • CHIPS (Clearing House Interbank Payments System) If we receive a wire with your valid account number before the processing cutoff time, we credit the funds to your account the same day. Incoming wires deadlines We accept incoming Fedwires until 4:00 p.m. Pacific Time and, incoming CHIPS wires until 2:00 p.m. Pacific Time, for same-day credit. We process incoming SWIFT transactions for same-day credit until 4:00 p.m. Pacific Time. Wires formatted incorrectly or containing inaccurate information may post to your account the next day. Outgoing wires We process outgoing wire transfers on a straight through basis according to your instructions. We manually review, correct, and verify a wire that does not pass our initial screening and that our system cannot correct automatically. Item 2B-52 Wells Fargo Treasury Management City of Palm Desert | 28 Our wire system confirms your available funds automatically and verifies that wires are not going to a country or beneficiary on the U.S. Treasury’s Office of Foreign Assets Control (OFAC) Specially Designated Nationals Blocked Persons list. If a wire meets these requirements, we release it. Initiation methods Method Online and mobile You can sign on to our online banking portal to initiate repetitive or free-form domestic and international wires. Consolidated payables You can send one file with multiple payment types (including wires, ACH payments, credit card payments, and U.S. dollar [USD] and Canadian dollar [CAD] paper checks) and remittance information. You can send a file directly from your treasury workstation or your ERP, accounts payable, or other internal system. We accept most file formats and offer several file transmission protocols, as well as an option to upload your file online. Telephone1 You can call a single toll-free number and provide an account number, PIN, and voiceprint. We validated these credentials through a voice response unit (VRU). In person2 You can go to any Wells Fargo branch to initiate a wire. You must have signing authority on the account to initiate the request. Wire Payments Application Programming Interface (API) For domestic and international transactions, you can initiate free-form or template wires (including book transfers) from your ERP, account platform, or payment system. 1. Book transfer initiation option is not available by telephone. 2. Book transfer initiation option is not available in person. Outgoing wires deadlines for U.S. accounts The following table includes the opening times and cutoff times — by transfer type — for same- day execution of initiated wires on U.S. accounts. The same times apply for all of our wire initiation methods, including online, mobile, file transmission, and telephone. Pacific Time Wire type Opening time (PT) Cutoff time (PT) Fedwire 5:00 a.m. 3:15 p.m. Drawdown request 5:00 a.m. 2:30 p.m. Request for Funds Transfer (RFT) 5:00 a.m. 2:30 p.m. U.S. Federal tax payments 5:00 a.m. 2:00 p.m. Within Wells Fargo* 5:00 a.m. 5:00 p.m. * Transactions within Wells Fargo are moving funds from one Wells Fargo account to another. You can originate these from all origination channels to all our available accounts. Item 2B-53 Wells Fargo Treasury Management City of Palm Desert | 29 Security We strongly recommend dual custody for initiating free-form wires and for creating or maintaining wire templates online. With dual custody, a second user provides approval of the free- form wire and wire templates before they’re effective. If you choose to use single custody, we enroll you in our Secure Validation service. This service provides an added layer of security without requiring another user’s approval when completing free-form wire initiation or template maintenance. Each time you initiate a free-form wire or perform template maintenance, you select from a list of enrolled phone numbers. You receive a six-digit validation code that you enter online to complete your request. Scalable processing platform Our nationwide funds transfer platform meets both your current and future volume demands. As you grow and your needs evolve, we can configure our systems quickly to handle any increased volume. We can handle up to 10 times our current processing loads, with the same speed and efficiency. Geographically dispersed sites We have multiple, strategically dispersed wire processing sites across the nation. These sites use the same processing platform to help ensure efficient data backup and recovery of core wire processing functions should a disruption occur. Please describe your wire transfer services, addressing the following: • Available technology and tools for the appropriate management of wire transfers. Online and mobile The City can sign on to our online banking portal to initiate repetitive or free-form domestic and international wires. Consolidated payables You can send one file with multiple payment types (including wires, ACH payments, credit card payments, and checks) and remittance information using our consolidated payables service. You can send a file directly from your treasury workstation or your ERP, accounts payable, or other internal system. We accept most file formats and offer several file transmission protocols, as well as an option to upload your file online. Telephone You can call a single toll-free number* and provide an account number, PIN, and voiceprint. These are validated through a VRU. You can complete repetitive wires set up on our system through the VRU, or by speaking with a Wells Fargo employee. To complete free-form wires, you’ll speak with a Wells Fargo employee in our wire department. * Book transfer initiation option not available by telephone. Item 2B-54 Wells Fargo Treasury Management City of Palm Desert | 30 Automatic standing transfer order To set up a repetitive wire, you tell us the criteria that our system will use to determine the amount to send. You also specify initiation dates and times for us to automatically send the transfers. In person You can go to any Wells Fargo branch to initiate a wire. You must have signing authority on the account to initiate the request. APIs Wire Payments API With our Wire Payments API, the City can connect with your ERP system or core wire platform to create domestic and cross-border wires. With the Wire Payments API, the City has the capability to check the status of wires created through API or CEO Wires. The details included in the Wire Payments API response, which includes the FED, SWIFT, CHIPS, and TRN confirmation number, allow you to reconcile the wire transaction. • Please indicate cut-off time for wire transfer submittals (Pacific Standard Time) The following table includes the opening times and cutoff times — by transfer type — for same- day execution of initiated wires. The same times apply for all of our wire initiation methods, including online, mobile service, file transmission, and telephone service. Transfer type Opening time (PT) Cutoff time (PT) Fedwire 5:00 a.m. 3:15 p.m. Drawdown request 5:00 a.m. 2:30 p.m. Request for Funds Transfer (RFT) 5:00 a.m. 2:30 p.m. Federal tax payments 5:00 a.m. 2:00 p.m. Book transfer/internal* 5:00 a.m. 5:00 p.m. * Book transfer initiation not available in person or by telephone. • Security measures for wire initiation and approval. Our required and recommended levels of security safeguards for initiating and releasing wires vary by method. Telephone We require users to enter a PIN and voice print into our VRU to initiate wires over the phone. We recommend the City establish user-specified wire and account limits. Item 2B-55 Wells Fargo Treasury Management City of Palm Desert | 31 For added security, you can choose callback verification for nonrepetitive wires. We make callbacks when wires exceed threshold amounts you’ve set on accounts or user limits. We release wires that exceed the limits after an approver confirms the transaction. Approvers confirm wires by entering their PIN and voiceprint into our VRU. Callback verification is optional for nonrepetitive wires; it is not available for repetitive wires. Online Your company administrator assigns user functionality and account access through our online administration service. We require a second administrator to approve access to our online wire service. Your administrator also establishes wire initiation and approval dollar limits by payment type for each user. We require two-factor authentication to access our online services. Each user must enter the following information: • Company ID • User ID • Password • PIN and token code We require dual approval for all free-form wire origination and template creation or modifications. Additionally, the City can set controls to require up to four approvals. Users can’t approve wire or templates that they originate. Additionally, if multiple approvals are required, the same person can’t perform more than one approval. Mobile With the optional use of biometric technology, you can use a compatible mobile device to scan your face or fingerprint as a replacement to entering a password when signing on to our mobile banking service.* As with using the online banking portal, you will need to carry a token for mobile transactions that require two-factor (strong) authentication, such as releasing a payment. Biometric solutions use your unique physical characteristics to identify you, making spoofing difficult. * Download the latest version of the CEO Mobile app available for your device from the Apple App Store or Google Play store. CPU to CPU Automated consolidated payables Within your ERP, treasury workstation, or accounts payable system, the City establishes the levels of authority you require for transmissions sent directly to us. Unless you choose to use secondary approval, we consider any wires initiated and transmitted to us by the City as ready for release. If you use the secondary approval option, we release wires after your secondary approver approves the file. Each approver (you can require up to three) reviews, modifies, approves, or deletes the wires online. Item 2B-56 Wells Fargo Treasury Management City of Palm Desert | 32 Files you transmit to us are authenticated and encrypted. Security elements vary according to the internet protocol you choose and may include: • Digital certificates issued by us • ID • Key • Password • PIN and token code • PGP encryption • Connect:Direct (NDM) with Secure+ Manual consolidated payables You can upload your wire payment file and perform secondary approvals for uploaded or transmitted files through our online banking portal. If you use the secondary approval option, we won’t release wires until we receive an approval. Each approver (you can require up to three) reviews, modifies, approves, or deletes the wires online. We require two-factor authentication to access our online services. Each user must enter the following information: • Company ID • User ID • Password • PIN and token code 10.7. Automated Clearing House (ACH) The Bank must have the capability to accommodate income and outgoing ACH transactions and provide on-line notification of ACH deposits within 24 hours. The City uses direct deposit services for its biweekly payroll and to make payments to vendors. 1. Please describe the bank’s direct deposit services, including the software requirements and transmission options available. We offer the capability to initiate (several methods) and receive ACH transactions. ACH direct debits (direct payments) You can initiate preauthorized debits to your customers’ accounts for recurring or other customer-approved payments using our ACH services. Our service may help you: • Reduce payment processing costs • Receive faster funds availability • Improve collections • Reduce return items • Enhance customer retention Item 2B-57 Wells Fargo Treasury Management City of Palm Desert | 33 This automation can also benefit your customers, helping them avoid late payment penalties. Common direct payments include: • Charitable or political contributions • Investments • Dues • Mortgages and other loans • Insurance premiums • Subscriptions • Internet and mobile purchases • Utility payments How it works First, you request and receive authorization from your customers. Then, you initiate electronic debits to your customers’ checking or savings accounts in an electronic file format approved by the National Automated Clearing House Association (Nacha). You can use software to create Nacha-formatted files then transmit them to us, use web-based templates through our online banking portal, or send consolidated payables files. Alternatively, you can use API technology configured for your treasury workstation, ERP platform, or accounting system. You determine the input method that’s best for you. As an added convenience when initiating debits through our online banking portal, you can use our mobile service* to approve ACH payments and templates that require immediate attention. Mobile users (in the U.S.) can view, approve, and delete payment batches and payment templates. The direct debit amounts (payments from your customers to you) can be fixed or variable, depending on the authorization. * Download the latest version of the CEO Mobile app available for your device from the Apple App Store or Google Play store. Item 2B-58 Wells Fargo Treasury Management City of Palm Desert | 34 Settlement options You can send payment files 24 hours a day, seven days a week; cutoff times vary by settlement target. If you send a file after the established cutoff time, or with the effective date of a holiday or weekend, we process it on the next business day. Each ACH channel used to submit files offers three settlement options.* • Two-day • Next-day • Same-day * Same-day ACH for bank-to-bank (transit) transactions has three daily deadlines. Other settlements have one deadline. Settlement activity On the settlement date, we credit your account for all direct payments, and the receiving financial institution posts individual debit transactions to your customers’ accounts. For one-day and two-day activity, we make the settlement available to you the morning of the effective date of the debit entries. For same-day activity, we follow Nacha’s Same Day ACH Rule. We make settlement activity available to you by the end of the processing day on the same business day that we generate the settlement transaction for your originated debit entries. Our online ACH service is internet based and operates within a web browser through our online banking portal. The system requires you to use a web browser that supports 256-bit Secure Hash Algorithm (SHA) encryption. Our methods for you to send and receive ACH files include internet-based file transfer, direct connection to the bank’s mainframe, and SWIFT FileAct. Internet-based file transfers You can send transmissions through our online banking portal. Using the bank’s administration tool, the City can easily manage user access, renew digital certificates, reset automated user passwords, and request Pretty Good Privacy (PGP) encryption keys. We support these standard secure transmission protocols, and each uses multifactor authentication and encryption: • Applicability Statement 2 (AS2)* • FTP over TLS (FTP/s)* • Hypertext transfer over TLS (HTTPS)* • SSH File Transfer (SFTP)* * Security includes use of digital certificates. Item 2B-59 Wells Fargo Treasury Management City of Palm Desert | 35 Options To provide efficiency when moving data securely across the internet, you have two options: • Automated user access: Schedule transfer sessions to connect automatically to send and receive files • Outbound push: Automatically receive outbound files from the bank as they become available Optional value-added services include, but are not limited to, virus scanning, email alerts warning that the bank cannot deliver a file because it fails a service check, and file encryption. Direct connection (host-to-host) If the City transmits a large volume (greater than 1 GB) on a regular basis, then Connect:Direct (NDM) with Secure+Proxy* can deliver secure data exchanges between the enterprises. * IBM® Sterling Connect:Direct with Secure+ Proxy is proprietary software that is sometimes called by its original acronym, NDM (network data mover). Your ideal method Your treasury management sales consultant, Yolanda Mates, works with the City during the implementation process to help you select your preferred transmission method. Together, you’ll consider the size and frequency of files that you will send and receive when using our ARP and positive pay services. You’ll also consider your staff’s technical capacity. During service setup, we offer a validation environment to test connectivity and file formats. To compare methods, consider the following features of the transmission channels. Feature Manual internet-based (browser) Automated internet-based Host-to-host Connect:Direct (NDM) Low technical expertise X Open source standards- based internet protocols X X Proprietary software Schedule file transfers X X Recurring high-volume transfers (>1 GB) X Integration with your back office applications Value-added services* X X X Transmission client software available X * Optional value-added services include, but are not limited to, virus scanning, email alerts warning that the bank cannot deliver a file because it fails a service check, and file encryption. Item 2B-60 Wells Fargo Treasury Management City of Palm Desert | 36 2. Please discuss screening measures that the bank uses to minimize errors on files sent to it. If there are errors, what steps does the bank take to fix them? ACH Payments Our internet-based ACH payments service operates within a web browser through our CEO portal. Initiating a payment does not involve transmitting files from one computer system to another or from the application to a mainframe. If you call our customer service center to inquire about a lost file, we assist with locating the file or determining that we did not receive it. Duplication protection Before we release a file to our ACH warehouse, our service compares the dollar totals and item count against other files submitted by the City within the past eight calendar days. If we find that a dollar total or item count matches, which could indicate duplication, we place the transaction on hold and call you to confirm whether we should process or delete it. ACH direct origination and consolidated payables If you use one of our transmission protocols to send your ACH or consolidated payables file, you can receive an email notification that confirms it loaded successfully. You can also receive an email alert when your file fails and can’t be loaded. Additionally, you can choose to receive an email notification when the bank: • Does not receive a file within a time frame that you specify • Receives an unexpected file • Receives an empty file To further protect against lost or duplicated files, we’ve built additional control measures into our services. ACH direct origination controls Lost file protection Our ACH service automatically generates a CNote transmittal register to confirm the receipt of your file. Within 15 minutes of receiving your file, we forward the CNote to you by email, transmission, or fax. File duplication protection Before we release a file to our ACH warehouse, our service compares the dollar totals and item count against other files submitted by the City within the past eight calendar days. If we find that a dollar total or item count matches, which could indicate duplication, we place the transaction on hold and call you to confirm whether we should delete or process it. Item 2B-61 Wells Fargo Treasury Management City of Palm Desert | 37 Consolidated payables controls Lost file protection When you submit a consolidated payables file, you can receive an optional file acknowledgment. We inform you that your file is consistent with our standards and we have completed initial processing for delivery to our payment systems. For the ACH transactions in your file, we send the CNote directly to our consolidated payables team. If the CNote indicates a problem with processing your ACH transactions, we notify you. File duplication protection To help prevent duplicate files, we offer an option that compares the total dollar value and file size of each consolidated payables file you send to previous files that you’ve sent. You also have the option of requiring secondary approval for some — or all — of your ACH payments, whether you upload your file to our online banking portal or transmit your file directly to us. You can review, approve, modify, or delete payments at the file level — to help prevent a duplicate file from being processed — or at the individual transaction level. In addition, you can require up to three approvers to release payments. 3. Same day sweeping service, and/or when does the bank have to receive the file for it to post? We handle same-day ACH transfer requests between your Wells Fargo accounts as ACH book transfers. For same-day ACH file availability, we must receive your request by the deadlines, Pacific Time, provided in the following table. Input method Same-day book transfer (on us)* Direct origination 6:00 p.m. Consolidated payables file 5:30 p.m. Online 6:00 p.m. ACH API 6:00 p.m. * For same-day book transfer, both the originating and receiving accounts must be Wells Fargo accounts. The $1,000,000 transaction limit for Nacha’s Same Day Rule does not apply to on-us transactions. 4. Describe the bank's ACH fraud protection services (e.g., blocks and filters). ACH Fraud Filter Our ACH Fraud Filter service helps protect your accounts by identifying potentially fraudulent transactions. You then review these transactions and decide what to return, stop, or allow. You can access our service through both our online banking portal and mobile service,* so you always have a convenient way to make pay or return decisions. * Download the latest version of the CEO Mobile app available for your device from the Apple App Store or Google Play store. Item 2B-62 Wells Fargo Treasury Management City of Palm Desert | 38 Convenient and customizable More than debit blocking, our service gives you the option to review and stop debits, credits, or all transactions. You can preauthorize the ACH transactions that you want to post to your account without review. You can also customize your preauthorizations, setting dollar thresholds and date ranges. You’ll also receive all ACH payment information, so you know who is attempting to send transactions to your account. You’ll have 24 hours to make a return request. And since we filter through the transactions for you based on your settings, we present only the ones that may be a threat. How it works Review option: You decide what to return 1. Review: You preauthorize ACH transactions to post to your account. You can review and make decisions on all, just credit, or just debit transactions. You can further look at transactions that exceed a dollar amount, date range, or number of occurrences. 2. Decision: Through our online fraud manager tool, we notify you of any transactions that are not preauthorized. You review those transactions and tell us whether you want them paid or returned.* When you tell us to return a transaction, we create a reversing adjustment and then return it as unauthorized. * If you do not make a pay or return decision on an item by the specified deadline, the item is automatically paid or returned based on the default action you select during implementation. Best practice: Monitor your transactions daily We recommend that you sign on once per day to monitor your ACH transactions. You can also receive a notice by email or text* when an unauthorized ACH transaction posts to your account. You can request that we inform you about: • All ACH transactions posted to your account • All ACH transactions that exceed a predetermined dollar amount • ACH credit or ACH debit transactions only • ACH credit or debit transactions that exceed a predetermined dollar amount • ACH credit or debit transactions outside a specified date range • ACH credit or debit transactions that exceed a specified maximum number of occurrences * Our alerts service has an additional fee. Stop option: Automatically stop unauthorized transactions With our stop option, we automatically return transactions that you did not preauthorize.* You can request that we stop and return: • All ACH transactions • All ACH transactions that exceed a predetermined dollar amount • All ACH credit or debit transactions only • ACH credit or debit transactions outside a predetermined dollar range Item 2B-63 Wells Fargo Treasury Management City of Palm Desert | 39 • All ACH credit or debit transactions outside a specified date range • All ACH credit or debit transactions that exceed a specified maximum number of occurrences We recommend that you sign on once per day to monitor your ACH transactions. You can also receive a notice by email or text† when an unauthorized ACH transaction posts to your account. * Excludes transactions originated by internal Wells Fargo originators, such as Account Analysis fees and settlement entries, that you’ve authorized to the account. † Our alerts service has an additional fee. Block converted checks Our eCheck option, for no additional fee, helps you monitor converted check entries for business- sized checks that have an auxiliary on-us field in the MICR line. This service includes eCheck Post and eCheck Stop options for accounts receivable check (ARC), back office conversion (BOC), and point-of-purchase (POP) transactions. eCheck Post If you use the eCheck Post option in conjunction with our next-day positive pay service, you can see unmatched items that will post to your account. You use our online fraud manager tool to indicate your decision to pay or return them. If you use the eCheck Post option with our same-day positive pay service, we do not match ACH converted checks against your check issue records. Instead, we call you for instructions to pay or return the converted checks. eCheck Stop If you choose the eCheck Stop option, we automatically stop all ineligible items inadvertently converted before they post to your account. 10.8. Collection and deposit services Standard commercial deposit services are required. The City’s monthly deposits average about $2,400,000. Although cash deposits are minimal, cash deposit and change services are required. Please describe how the bank proposes to provide these services. 1. Please identify bank branch locations, if any, within Palm Desert city limits, or the greater Coachella Valley. Proximity study of branch depository services The following table includes the deposit deadlines for bank credits on the same day of deposit for the branches, night depository locations, and deposit-enabled ATMs that are closest to you. Item 2B-64 Wells Fargo Treasury Management City of Palm Desert | 40 Branch Branch hours Branch deposit deadline (local time)* Night depository (traditional) Distance Palm Desert 74105 El Paseo Palm Desert, CA 92260-4103 760-568-3460 Mon-Fri: 9:00 a.m. to 5:00 p.m. Mon-Fri: 5:00 p.m. ATM deadline: Mon-Fri: 9:00 p.m. Yes 1.35 miles Rancho Mirage 42350 Bob Hope Dr. Rancho Mirage, CA 92270-4469 760-568-0482 Mon-Fri: 9:00 a.m. to 5:00 p.m. Mon-Fri: 5:00 p.m. ATM deadline: Mon-Fri: 9:00 p.m. Yes 2.38 miles Washington Square 42420 Washington St. Bermuda Dunes, CA 92203-8156 760-200-4692 Mon-Fri: 9:00 a.m. to 5:00 p.m. Mon-Fri: 5:00 p.m. ATM deadline: Mon-Fri: 9:00 p.m. No 5.16 miles Desert Gateway 34340 Monterey Ave. Palm Desert, CA 92211-2098 760-321-7601 Mon-Fri: 9:00 a.m. to 5:00 p.m. Sat: 9:00 a.m. to 12:00 p.m. Mon-Fri: 5:00 p.m. ATM deadline: Mon-Fri: 9:00 p.m. Yes 5.5 miles Tri City 77952 Country Club Dr. Palm Desert, CA 92211-7284 760-200-3000 Mon-Fri: 9:00 a.m. to 5:00 p.m. Mon-Fri: 5:00 p.m. ATM deadline: Mon-Fri: 9:00 p.m. Yes 6.54 miles * Please confirm your deposit deadlines with your treasury management sales consultant, Yolanda Mates. Our ATM and banking locations search tool at wellsfargo.com/locator provides street addresses, lobby hours, and ATM deposit cutoff times. 2. What are the cut-off times for deposits at the bank’s local branch (if applicable), and at its Processing Center in order to ensure same-day credit? Will the City deal directly with the Cash Vault on deposit adjustments or with a local representative? Branch deposit services • Deposit-enabled ATM — ATM deposits made before 9:00 p.m. local time will be posted on the same business day. You receive credit the next business day for deposits you make after the deadline, on weekends, and on federal holidays. • Night depository — Once we process your deposit, you receive same-day credit for cash and check deposits made prior to the cutoff time. • Teller line — You receive same-day ledger credit for both cash and check deposits made by branch closure, local time. Item 2B-65 Wells Fargo Treasury Management City of Palm Desert | 41 Please refer to question 1 above for our branch proximity results, including the deposit deadlines for bank credits on the same day of deposit for the branches, night depository locations, and deposit-enabled ATMs that are closest to you. Cash vault Different deadlines apply for cash only, check only, and mixed deposits of cash and checks. The following table lists our cutoff times for deposits and change orders, in local time.1 Cash vault site Deposit deadline Order deadline Cash-only Check-only Mixed Touch tone Online or Transmission California Los Angeles 7:30 p.m. 7:30 p.m. 6:00 p.m. 10:30 a.m. 10:00 a.m. Our cutoff times for same-day ledger credit vary based on how you make your deposit. Cash vault by armored courier service Different deadlines apply for cash only, check only, and mixed deposits of cash and checks. You receive same-day credit for deposits received by the deposit deadline. You can place coin and currency orders 24 hours a day, seven days a week — using our online banking portal, automated touchtone phone system, or direct file transmission services. Your armored courier normally delivers your change orders the next day; remote locations may require two days in transit. Contact your armored courier to confirm your delivery times for change orders. The previous table lists our cutoff times for deposits and change orders, in local time.1 Deposit adjustments We don’t identify and adjust all discrepancies. We reserve the right to write off check adjustments and cash adjustments based on dollar thresholds that we set internally. As a matter of policy, we don’t disclose these thresholds to customers. If your account is a commercial deposit account or an analyzed business deposit account, then you may arrange for us to adjust all discrepancies identified during any verification without regard to our standard adjustment amount. You can contact your relationship manager to make this request. When we adjust a deposit amount, we make a separate debit or credit entry to your account. We also provide an adjustment notice and relevant backup documents. If you use our subaccounting service, then your adjustment notice includes your location number and location name (if applicable). Item 2B-66 Wells Fargo Treasury Management City of Palm Desert | 42 Reporting We provide deposit adjustment notices to inform you about discrepancies. Our procedures vary based on where we process your deposits. You can also review adjustments on your bank statements, online reports,* and file transmissions. Branch and night depository You receive an adjustment notice by U.S. mail or email. The notice includes the amount, reason for the adjustment, and location code (if applicable). Cash vault You receive an adjustment notice by U.S. mail or email. Notices include the deposit date, declared amount, verified currency total by denomination, and location number (if applicable). 3. What is your policy on receiving same day credit for deposits? Our cutoff times for same-day ledger credit vary based on how you make your deposit. 10.9. Collateralization of deposits Banks are required to collateralize all public fund collected balances, in excess of balances insured by the FDIC, at 110%, pursuant to California Government Section Code 53652(a). 1. Is the bank able to confirm agreement with the government code conditions? We will comply with all collateral requirements set forth in the California Government Code. 2. What types of securities are used as collateral? Wells Fargo pledges municipal bonds and investment grade securities to secure public funds deposits, such as mortgage-backed securities administered by Fannie Mae and Freddie Mac. 3. What is the name of the custodian being used for collateral management? Bank of New York Mellon is the custodian. 4. What is the bank’s current level of public funds deposits (in dollars), and related collateral in California? As of July 31, 2022, public funds deposits were $3,966,479,646.82 and collateral market value was $5,414,277,622.27. 5. Please include a sample “Contract for Deposit of Moneys”. Refer to the Appendix Tab E section for the sample Contract for Deposit of Moneys. Item 2B-67 Wells Fargo Treasury Management City of Palm Desert | 43 6. Please provide information on any pooled services being utilized. All public entities in California are collateralized under a pooled program administered by the pool administrator. Collateral will be held in the name of the California Local Agency. 10.10. Account reconciliation and positive pay The City currently issues approximately 900 checks and electronic payments per month. The City also uses full account reconcilement with positive pay services for its disbursement accounts. 1. Does the bank offer full account reconcilement services with positive pay? If so, please describe the service, including accepted methods for receiving the positive pay data, and the format specifications for that data. Yes. We offer full account reconcilement services with positive pay. We describe the service in detail in the following paragraphs. Account reconciliation With our ARP and automated reporting services, you can reconcile your disbursement accounts quickly and efficiently with your internal accounting records. Our Full ARP service and our Partial ARP service each help you to identify checks and electronic transactions as paid or outstanding — saving you time. In addition, these services help you detect and reduce your exposure to check fraud. Full ARP Our Full ARP service reconciles your paid checks to your issued checks then sends a detailed statement. First, you provide us with your issued check information* by one of three methods: • Direct transmission • Uploading a file to our online fraud manager tool† • Manually entering check information online * Your check issue information also includes stops, voids, and cancels. † The file you load to the online tool can contain up to 1,500 registers in a single batch, and you may submit multiple batches daily. Within 90 minutes of your submission, you can receive an optional file confirmation for the check issue information or stop payments. We update check issue information more than 50 times each day, seven days a week. On a weekly or monthly basis (according to your preference), we make comprehensive statements available for your account. You can request a variety of optional reports including Paid Checks, Outstanding Checks, and Stop Payments. You can receive these reports daily, weekly, or monthly in PDF, Excel, CSV, flat file text (transmission), and paper formats. The PDF and paper formats can include sorting and subtotaling by location or high-order prefix. Item 2B-68 Wells Fargo Treasury Management City of Palm Desert | 44 Partial ARP Our Partial ARP service provides an ARP statement. You can also request a variety of optional reports including Paid Checks and Stop Payments. You can receive these reports daily, weekly, or monthly in PDF, Excel, CSV, flat file text (transmission), and paper formats. You use the statement and any optional reports to reconcile your account and identify any exceptions. Optional reports You can easily access reports through our online banking portal. With our Full and Partial ARP services, you can customize your reporting to match your accounting needs. Choose from the following 14 optional reports. ARP optional reports • Bank Originated Entries • Credits • Deposit Location • Issue Notices Not Received† • Issues This Cycle* • Matched Paid Items† • Outstanding Checks* • Paid Checks • Posted Items • Prior Payments* • Reversed Checks† • Stop Payments • Unpaid Checks* • Voids and Cancels* * Only available with Full ARP. † Only available with Full ARP or Partial ARP with Positive Pay. The following are samples of commonly requested optional reports, shown in PDF. You can also receive optional reports in Excel, CSV, and flat file text (transmission) formats. Paid Checks Item 2B-69 Wells Fargo Treasury Management City of Palm Desert | 45 Outstanding Checks Stop Payments Voids and Cancels Positive pay at teller line Our ability to update check issue files more than 50 times a day, seven days a week, distinguishes us from other banks. We capture your positive pay files and upload them to the account reconciliation plan system daily every 15 minutes 6:00 a.m. to 8:00 p.m. Pacific Time. Within 30 minutes of receipt of each file, tellers can view your most current positive pay information. This integration between our positive pay service and our teller system provides additional protection to the City against check fraud. When presented with an unmatched item, the teller may return the check to the payee and refer the payee to the City for further instruction. Item 2B-70 Wells Fargo Treasury Management City of Palm Desert | 46 2. How are exception items under positive pay reported to the City? What is the procedure and timeline for paying or returning exception items? Our balance reporting system integrates positive pay reports, both online and through our mobile service. You can: • View a list of positive pay exception items • View exception check images • Submit pay and return decisions All exceptions will post to your account; however, we do not include MICR errors and misreads with positive pay exceptions. Our Operations group will reverse MICR errors and misreads, and then repost them to your account with the correct information on the following business day. Create a check issue record We do not automatically add approved exceptions to your check issue file. Instead, we give you the option to create a check issue record for the exceptions you choose to pay. The following screen shot shows where to click Create Check Issue after you’ve selected the pay decision. Check issue deadline The City will need to send check issue records to Wells Fargo prior to distribution of the checks. If we receive your check issue file prior to 8:00 p.m. PT, then we update your check issue information in our system that day. This deadline helps ensure that we have the most recent check issue information to compare with checks presented for payment. To avoid exceptions, you should distribute checks on or after the issue date. If you send a future- dated issue record, that information will not be available for positive pay in our system until the morning of the issue date. 3. Can the bank’s positive pay system detect irregularities with respect to check date, amount, and payee? Optionally, you can add our Payee Validation service to a positive pay service. You include payee names in your check issue file exactly as they appear on your checks. We validate payee names on all checks presented for cashing at our teller windows and on deposited checks above the threshold dollar amount. We pay payee matches and report payee mismatches to you through our online fraud management tool. As with our positive pay services, you make your pay or return decisions through the online banking portal or mobile service. Item 2B-71 Wells Fargo Treasury Management City of Palm Desert | 47 4. How are manual checks issued by the City sent to the bank for inclusion in Positive Pay? The City can send manual check issue information, including voids and cancels, using our online fraud management tool. You can update your check issue records 24 hours a day, seven days a week. 5. Does the bank provide on-line check imaging for exception items? Yes. Using our online fraud manager tool, you can access images of exception items online in real time. You can view and print images and you can submit pay and return decisions. You can also use our mobile service to access real-time images, view positive pay exceptions, and make pay and return decisions. 6. Please describe the bank’s check truncation service. Is on-line check imaging available for paid items/ Deposit slips? When processing paper items, check truncation is our standard service. We image these items and store them on site. We retain images for seven years after posting. You can retrieve, view, print, and download disbursed check images through our online banking portal using our Transaction Search service. Images are available by 6:00 a.m. Pacific Time the business day after posting. Some images may also be available on an intraday basis. Images are available for seven years. We capture deposit item and deposit slip images. We also offer an image transmission service, Image File Import, provides a daily, weekly, semi- monthly, or monthly file of paid check images, and related index information. Image files are available as early as 8:00 a.m. Pacific Time the day after posting. 7. Please describe the bank’s on-line stop payment service and features. When, and for how long is a stop payment effective? You have three options for issuing stop payments on checks, which we describe below. With the electronic methods, you can make stop payment requests 24 hours a day, seven days a week. Online transaction search Stop payments are effective immediately after you successfully initiate the request through our online Transaction Search service. The system automatically reviews the previous 180 days and intraday teller-cashed activity to determine whether a requested check has paid. While you can place stop payments on a range of checks, we have a maximum of 50 stops that you can place at one time. Item 2B-72 Wells Fargo Treasury Management City of Palm Desert | 48 ARP issue file transmission Stop payments are effective after you successfully initiate the request through our online fraud manager tool and the bank’s systems process the file. You can make a stop payment request as late as 8:00 p.m. Pacific Time and still receive same-day posting. With a file transmission, you can include up to 1,500 entries per file. Using the Add Check Issues option of our online fraud manager tool, you can upload as many files per day as needed. An imported file can include stop payments, new issues, cancels, and voids. The system automatically reviews the previous 90 days and intraday teller-cashed activity to determine whether a requested check has paid. If you need to place a stop payment on a range of checks, you should include each individual check number in the file. Customer service Our CC4B Service Office representatives are available Monday through Friday from 4:00 a.m. to 7:00 p.m. Pacific Time and Saturday from 6:00 a.m. to 12:30 p.m. Pacific Time. Our CC4B Service Office can provide assistance by phone to: • Place a stop payment on a range of checks • Place a stop payment on more than 50 checks at one time Effective period Stop payments remain in effect for six months. You can renew an individual stop payment on an as-needed basis through our online Transaction Search service, or you can choose to use our automated renewal option. The auto stop renewal option of our Stop Payment service extends the retention period for stop payments and provides greater flexibility for you to manage stop payments. This option lets you: • Extend a stop payment for up to an additional six years (in 12-month increments) • Pre-determine a dollar threshold for automatic stop payment renewals • Limit the number of times a stop payment is automatically renewed 8. Does the bank offer a “stale date” feature for monitoring outstanding checks? During the implementation process for our traditional positive pay service, you can choose to receive or not receive your stale-dated checks with your positive pay exceptions. If returned Your reconcilement statement and reports show stale-dated checks that you choose to return as “REV/CK” and outstanding check. To remove the outstanding issue record, you must send a cancel record to the bank. Item 2B-73 Wells Fargo Treasury Management City of Palm Desert | 49 If paid Your reconcilement statement and reports list stale-dated checks that you choose to pay as paid items. Included with exceptions If you choose to receive stale-dated checks as an exception, we present them to you through our fraud management tool on our online banking portal. From there, you make pay or return decisions. We provide reconcilement information according to your exception decision. Exceptions decision with next-day positive pay service Reconcilement information Pay If your decision is to pay, then our reconcilement statement and reports list stale-dated checks that you choose to pay as paid items. Return Your reconcilement statement and reports show stale-dated checks that you choose to return as “REV/CK” and outstanding check. To remove the outstanding issue record, you must send a cancel record to the bank. Not included with exceptions If you choose not to receive stale-dated checks as exceptions, we reverse paid transactions automatically and return the checks the following day. Your reconcilement statement and reports reflect these checks as “REV/CK” and outstanding checks. To remove the outstanding issue record, you must send a cancel record to the bank. Stale date retention As long as we have an issue record on file and you have enrolled in the stale date option, all checks drawn on the account are subject to stale date review. If you cancel the original issue record for a stale-dated item, the check is not subject to stale date review, but instead is a positive pay exception presented to you for decisioning. The decision on how long an item should remain as a valid issue is a choice that the City should determine based on your business needs. If the City elects not to take advantage of our stale date option, we handle stale-dated items as described in the following excerpt from our Commercial Account Agreement. Dates and special instructions on paper items Bank may, without inquiry or liability, pay one of Company’s Paper Items even though: (i) special instructions written on the Paper Item indicate that Bank should refuse payment (e.g., “Void after thirty (30) days,” “Paid-In-Full,” or “Void over $100”); (ii) the Paper Item is stale- dated (e.g., it bears a date that is more than six (6) months in the past), even if Bank has knowledge of the date on the Paper Item; (iii) the Paper Item is post-dated (e.g., it bears a date in the future), unless an Authorized Signer has given Bank a notice of post-dating; or (iv) the Paper Item is not dated. Item 2B-74 Wells Fargo Treasury Management City of Palm Desert | 50 9. Does the bank offer Remote Deposit services, what device or devices (scanners) are available? Yes. We offer a remote deposit service whereby you can deposit checks into your Wells Fargo account electronically. Our service eliminates the need for your employees to make trips to the bank to deposit checks and provides an extended deposit deadline of 7:00 p.m. Pacific Time. Our service can also help you consolidate your banking relationships, since you no longer need to maintain accounts at local banks that have physical branches near your locations. Fewer banking relationships can help you save money on account maintenance fees and reduce the time spent reconciling multiple bank accounts. How it works With our remote deposit service, you can capture check images, balance deposit totals, and make deposits using one of two channels — our CEO portal or our CEO Mobile application. You can capture check images for deposit by using an approved check scanner and computer with internet access, or by using a mobile device with a camera. Next, you confirm the check dollar amounts and verify the deposit balances. Then, you submit the deposit to us and receive a prompt confirmation. If you enroll in our Alerts service, we send authorized users a deposit confirmation notice by email or text message. The following diagram shows the remote deposit process flow. Features Image access As you capture images of checks, we store them on our servers. Check images are immediately available online through our remote deposit service for 90 days and also available online through our Transaction Search service for seven years. Custom fields Using multiple discretionary data fields, you can enter customized information about the checks that you receive; this feature lets you search for checks using your own criteria and makes it easy to upload data into your accounts receivable system. Our quick data feature simplifies the capture process by automatically recalling your previously entered receivables data on certain fields. Item 2B-75 Wells Fargo Treasury Management City of Palm Desert | 51 Reporting You can generate the following reports through our remote deposit service. Report name Description Deposit Report This report contains general information (including deposit amount, number of checks included, and submission date) for deposits completed within the past 90 days. It is available in HTML, PDF, CSV, and Excel formats.* Deposit Report with Item Details This report contains general deposit information (including deposit amount, number of checks included, and submission date) and item details (including item amount, item status, and check number) for each deposit completed within the past 90 days. It is available in HTML, PDF, CSV, and Excel formats.* The HTML format includes links to display item images. Deposit Report with Check Images This report contains general deposit information and item details for each deposit. It is available in PDF format. You can select the number of images (up to four per page) that you would like to see, including the option to include the back of the check image. Deposit detail transmission We offer a deposit detail transmission that can include discretionary data that you manually entered, in addition to check detail. This feature allows you to receive an electronic file for posting your receivables. * CSV, Excel, and HTML formats contain keyed discretionary data. User access The City’s designated system administrators establish users, grant them access, and set their check limits. Administrators can customize each user’s access. For example, a user can have scan and balance access for one account and deposit approver access for another account. This flexibility lets you implement dual controls so that one person scans and balances and another person approves a deposit before it’s submitted. Batch deposits You can create multiple batches within one deposit. This batching feature helps to simplify balancing when you have checks for multiple entities in the same deposit. To help simplify how you reconcile individual batches, our deposit reports show the name and subtotal of each batch. Updates If you use our remote deposit service through our online banking portal, you don’t need to install any software other than a scanner driver. Any updates and enhancements we make are promptly available to you when you access the system. If you use our remote deposit service through your mobile device, you need to download the latest version of our mobile application to access all of the latest features and enhancements. Item 2B-76 Wells Fargo Treasury Management City of Palm Desert | 52 Quality control Before submitting a deposit, you have a chance to review the captured items, and make corrections (such as re-capture images, enter missing data, and verify item amounts) to balance the deposit. Our Electronic Deposit Center inspects and analyzes the image quality of all items, looking for illegible items, image issues such as streaking or interference within key areas, and image contrast. While image quality exceptions are rare (accounting for approximately 1% or less of all items we process*), we follow a standard process for handling them. If we cannot clear an item, we follow an adjustment process and notify you accordingly. * Internal metric, June 2022. Scanning equipment Our remote deposit service is compatible with Panini, Canon, and Digital Check scanners. The following table lists the specifications by manufacturer. Suggested daily check volume Scanner type Check-processing speed and volume Connection interface and dimension Fewer than 20 Digital Check CheXpress CX 30-IJ Single feed • USB 2.0 (recommended) • Backward-compatible with USB 1.1, with performance limitations • 9.5” Lx4.0”Wx7.0”H • Weight: 3.5 lbs. Fewer than 500 Digital Check TS240- 50 50 documents per minute • USB 2.0 (recommended)* • Backward-compatible with USB 1.1, with performance limitations* • 11.1”Lx5.1”Wx7.5”H* • Weight: 5.2 lbs. Panini X 50 50 documents per minute • Mac compatible • USB 2.0 (recommended) • Backward-compatible with USB 1.1, with performance limitations • 10.39” Lx5.43”Wx6.88”H • Weight: 5.5 lbs. More than 500 Canon CR190i II† 190 documents per minute • USB 2.0 (recommended) • 10.7”Lx18.7”Wx8.4”H • Weight: 18.5 lbs. Digital Check TS 240- 100 100 documents per minute • USB 2.0 (recommended)* • Backward-compatible with USB 1.1, with performance limitations* • 11.1”Lx5.1”Wx7.5”H* • Weight: 5.2 lbs. Item 2B-77 Wells Fargo Treasury Management City of Palm Desert | 53 * Applicable to all Digital Check TS240 scanner models. † Allow five to seven extra business days for delivery. 10.11. Overdraft processing The City requires daylight overdraft protection for the occasional situations where timing differences occur between incoming wires or L.A.I.F. transfers, and outgoing wires. 1. Please describe any issues, concerns, and charges associated with the use of the daylight overdraft facility. We charge for both overdrafts and the use of uncollected funds.* Daylight overdraft lines are provided as an accommodation to creditworthy customers to bridge intraday timing gaps between their disbursement needs and the receipt of funds into their account. Daylight overdraft lines, when provided, are both uncommitted and unadvised. Usage under daylight overdraft lines is to be repaid through credits to the customer’s account by the end of the banking day. Daylight overdraft lines are not intended to support overnight overdrafts, purposeful or inadvertent. 2. Will the bank guarantee payment of all items even if it results in the account being temporarily overdrawn for the day? Should the City have an overdraft situation in the morning, your relationship associate, Anna Gonzales, and your relationship manager, Jamie O’Connell, will contact the City to confirm activity that caused the overdraft. The City can then move funds over by wire transfer to cover items before 9:30 a.m. Pacific Time. 3. Are accounts aggregated for calculation/fee purposes? No. We calculate overdrafts on an individual account level. 4. What is the rate basis for overdrafts? We charge for both overdrafts and the use of uncollected funds.* The bank charges overdraft fees on a per item basis. The standard interest rate is based on the prime lending rate +3%. The formula for our uncollected funds fee uses that interest rate basis as the overdraft rate, applying this formula: (average daily negative collected balance × overdraft rate × days in period) ÷ (360) = uncollected funds fee We can offset these fees (overdraft and uncollected funds) by the earnings credit allowance. We do not charge for daylight overdrafts. * We charge a maximum of four overdraft fees per day, per account. Item 2B-78 Wells Fargo Treasury Management City of Palm Desert | 54 10.12. Stop payment services The City currently uses stop payment services for lost or stolen checks. Please describe your stop payment services, fees, and how technology supports these services. Stop payments With our Transaction Search service, you can place a stop payment for a single check as well as for a list or range of up to 50 checks. Our service verifies automatically that the check posted within the last 180 days or is included in current day activity. If you try to place a stop on a check that already has a stop in effect, our service displays the existing stop payment with its expiration date. Stop payments are effective immediately when successfully initiated through our Transaction Search service. Please see fee schedule for a list of possible fees. Void and cancel checks The City can use our fraud management tool on our online banking portal to update your check issue records with voids and cancels. We accept manual input and file uploads and update our systems throughout the day. 10.13. Custodial account services Custody services The City has a $200 million investment portfolio (non-trustee). Consequently, the City must have an independent custodial agent who can safekeep, clear, and report investments on a delivery-versus- payment basis to ensure that the City’s security interest is protected. The custodian must be thoroughly familiar with the public sector, and the investment of public funds. Following the contract award, the securities that the City already owns will be delivered to the new custodial agent on a free delivery basis, for safekeeping. 1. Please describe the custody services that the bank offers for municipal clients. 2. Describe the bank’s municipal client base. What is the number of municipal custody clients and the assets under custody? 3. What are the deadlines (Pacific Standard Time) for clearing the various types of securities (e.g., Treasuries, Agencies, corporates, repos, etc.)? 4. Does the custodian debit/credit checking accounts on the same day that an investment transaction settles? 5. If sweep interest is applicable, when will the activity settle, and how will it be reported? We do not provide custody services on a delivery versus payment basis. Item 2B-79 Wells Fargo Treasury Management City of Palm Desert | 55 We do provide a safekeeping service for our public entity customers investing through Wells Fargo Securities, LLC (WFS). Refer to the Appendix Tab F for details regarding our bank safekeeping. Custody information reporting The City’s custodian must report clearing and safekeeping activity on a daily basis on-line and summarize all activity and holdings on a monthly basis. Custody statements must include assets, cash receipts, and disbursements and detail each transaction during the month, with all assets described completely at cost and market value as of the end of the month or reporting period. 1. Please describe the bank’s transaction confirmation and information reporting services. 2. Please describe the bank’s on-line services, if applicable, and how they would meet the City’s requirements. 3. Please provide sample confirmations for the purchase and sale of securities; a sample monthly custody report; and a sample custody services contract. We do not provide custody services on a delivery versus payment basis. 10.14. Electronic storage of documents Please describe the bank's proposed method of archiving data and electronic record retention. Describe how electronic data are distributed to the City. We will provide reasonable access to our records in accordance with our internal corporate retention and privacy policies. While Wells Fargo does not permit the City direct access to these records, you may obtain copies by submitting requests through your dedicated relationship team. We retain records for varying lengths of time based on need. We have an established enterprise- wide Records Management program that addresses the legal, technical, and operational issues affecting our information assets. Our process includes classifying records and assigning a record retention period to each record. Our policy requires employees to track records from inception to destruction, with appropriate approvals prior to destroying any records. 10.15. Payment card services The City requires merchant card services for payments received at customer counters. Please provide a detailed description of the entire merchant card programs available, including proposed pricing. Should the City select Wells Fargo as their banking provider and award us your business, you’ll have a dedicated relationship team that will work with the you to provide market competitive rates. Item 2B-80 Wells Fargo Treasury Management City of Palm Desert | 56 Fiserv and Clover devices We recommend that The City use the following devices:* • Clover® Go • Clover Flex • Clover Mini • Clover Station Solo • Clover Station Duo * Clover solutions made available through Wells Fargo Merchant Services, L.L.C. come with Clover Payments software that allows you to take payments through a web browser, mobile app, or your Clover device. The cost of this software is included in the monthly service fee Wells Fargo Merchant Services charges each month per account. Clover Station products will not work with the Clover Payments software alone, and require a more advanced software plan. Upgraded software plans, including those for Clover Station products, require an additional monthly fee per device, and will be billed directly from Clover. All your devices must use the same software plan. Availability of certain software plans, applications, or functionality may vary based on your selected Clover equipment, software, or industry. All fees are subject to change. Wells Fargo Merchant Services and Wells Fargo Bank, N.A. do not provide, and are not responsible for, third-party software or applications, including those offered by Clover. Clover software, applications, and other third-party applications that may be available through Clover or in the App Market are subject to the terms and conditions of the developer and may include additional fees subject to change at any time. Software and App Market application fees are disclosed in the Clover App Market or your Clover dashboard and are in addition to the fees listed within your Agreement with us. The Clover name and logo are trademarks owned by Clover Network, Inc., an affiliate of First Data Merchant Services LLC, and registered or used in the U.S. and many foreign countries. Clover devices are subject to availability. Terms and policies for purchase and lease All Clover devices are available for purchase. Purchased devices come with a one-year warranty. You can lease Clover Station Solo, Clover Station Duo, Clover Flex, and Clover Mini devices for 36- month lease terms. Clover Go devices are not available for lease. First Data Global Leasing owns and manages the leases and requires that equipment be insured. You can choose to purchase your own insurance and list First Data Global Leasing as the payee on the insurance policy. Alternatively, you can pay a monthly fee for First Data’s Equipment Protection Program. Leases are non-cancelable. You are responsible for the monthly lease payment for the entire term of the lease, even if you cancel your merchant services processing. Pricing Pricing details for purchased and leased equipment is included in the Appendix Tab A section of the proposal. Maintenance and replacement Ongoing application updates Clover is a software-as-a-service solution, and the application pushes updates to Clover devices automatically.* * Clover solutions made available through Wells Fargo Merchant Services, L.L.C. come with Clover Payments software that allows you to take payments through a web browser, mobile app, or your Clover device. The cost of this software is included in the monthly service fee Wells Fargo Merchant Services charges each month per account. Clover Station products will not work with the Clover Item 2B-81 Wells Fargo Treasury Management City of Palm Desert | 57 Payments software alone, and require a more advanced software plan. Upgraded software plans, including those for Clover Station products, require an additional monthly fee per device, and will be billed directly from Clover. All your devices must use the same software plan. Availability of certain software plans, applications, or functionality may vary based on your selected Clover equipment, software, or industry. All fees are subject to change. Wells Fargo Merchant Services and Wells Fargo Bank, N.A. do not provide, and are not responsible for, third-party software or applications, including those offered by Clover. Clover software, applications, and other third-party applications that may be available through Clover or in the App Market are subject to the terms and conditions of the developer and may include additional fees subject to change at any time. Software and App Market application fees are disclosed in the Clover App Market or your Clover dashboard and are in addition to the fees listed within your Agreement with us. The Clover name and logo are trademarks owned by Clover Network, Inc., an affiliate of First Data Merchant Services LLC, and registered or used in the U.S. and many foreign countries. Clover devices are subject to availability. Malfunctioning devices Troubleshooting If your equipment isn’t functioning properly, you can contact our dedicated Clover support team at 1-800-451-5817. Our representatives will troubleshoot for you, 24 hours a day, seven days a week*, even outside the warranty period for purchased equipment. * Availability exclusive of unplanned outages. Replacement If we cannot troubleshoot the malfunction remotely, we will send you a replacement unit typically within 24 business hours. We will also send you shipping labels, so you can return the malfunctioning equipment.* During the warranty period for purchased equipment or during the lease period, we will replace equipment at no additional charge. * Our equipment vendor will ship a total of three call tags for all replaced equipment. If the replaced equipment is not received within 90 days of the equipment replacement, you will be charged for non-returned equipment. The warranty for purchased equipment only applies to malfunctions caused by manufacturer’s defects, not to damaged equipment. Outside the warranty period, you will need to purchase or lease new equipment. Additional fees will apply if you choose to upgrade. We replace leased equipment at no additional charge if we determine that the returned device has value and can be refurbished or redeployed. If we determine the device has no future value (for example, the device is destroyed, unrecognizable, melted, or crushed), you will need to seek reimbursement by filing an insurance claim. Replacement fees may apply for equipment damaged due to improper operation. Fees will apply if you choose to upgrade. Authorize.net payment gateway The City can potentially simplify payment acceptance by using a comprehensive, out-of-the box solution — Authorize.net®* payment gateway by Visa®. * Authorize.net is a wholly owned subsidiary of Visa. Additional Authorize.net terms and conditions apply. Standard gateway fees apply. Item 2B-82 Wells Fargo Treasury Management City of Palm Desert | 58 Payment types Make payments more convenient for your customers. You can accept a variety of payment types. • Credit and debit cards (Visa, Mastercard®, American Express®, Discover, Union Pay, JCB, and Diner’s Club) • Electronic checks (eChecks)* • Alternative digital payments: Visa Checkout®, PayPal, Apple Pay®, and Google PayTM * For eCheck services, customers will contract directly with Authorize.net. Additional fees apply for this service. Integration options Accept online and in-person payments using various integration methods. Online payments Virtual terminal Take payments without a customer-facing website. You can access the gateway’s virtual terminal through the merchant interface. Application programming interface (API) Control the consumer experience by integrating the gateway with your customer- or employee- facing website using an API. Hosted Help reduce your PCI scope by selecting a hosted integration option. The gateway can host the whole payment page or specific fields. In-person payments Virtual point-of-sale (POS)* Accept EMV-compliant card-present transactions with this turnkey feature. The virtual POS is a web-based application (browser plug-in) paired with an EMV chip card reader that connects to your computer. * Standard gateway fees apply. Card readers available for an additional fee. Mobile POS software development kit (SDK)* Accept mobile card-present payments anywhere an internet signal is available. With this customizable option, you can use the SDK to integrate Authorize.net’s mobile POS with your employee-facing Apple iOS or Android app. Card-present payment acceptance also requires an EMV chip card reader, which connects to your iOS or Android device’s audio jack. * Standard gateway fees apply. Card readers available for an additional fee. Item 2B-83 Wells Fargo Treasury Management City of Palm Desert | 59 Mobile POS application1 Accept in-person credit and debit card payments with an Android or Apple device2 through Authorize.net’s pre-built mobile POS application. With the app, you can accept card payments, tips from customers, send email receipts, and more. The mobile POS application utilizes EMV chip card readers3 connected to a mobile phone or tablet, so you can accept payments from virtually anywhere.4 1. Standard gateway fees apply. 2. Apple and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Wallet is a trademark of Apple Inc. The App Store is a service mark of Apple Inc. Android, Google Play, and the Google Logo are trademarks of Google LLC. 3. Card readers available for an additional fee. 4. Dependent upon internet connection. Internet data and usage rates apply. Developer support Self-service tools help you integrate the solution without dedicating extensive resources to development. • Developer center: developer.Authorize.net • APIs and SDKs • Sample code Administration and reporting Manage transactions conveniently through the web-based merchant interface. • Submit, review, or void customer transactions • Manually enter payments or issue refunds • Submit batch files for authorization • Generate transaction reports • Search transactions Customer service Access help when you need it. Authorize.net provides customer support 24 hours a day, seven days a week. • Dedicated toll-free number for Wells Fargo customers • E-ticket support • Live chat System availability Transact when your customers want to do business. As of December 2021, Authorize.net had an average system availability of 99.98%.* • Global Peering Points: delivers high performance to the end user • Active-Active Architecture: avoids disruptions and achieves continuous operations • Self-healing processor: automated correction of network issues before downtime • Akamai SureRoute: technology to route network traffic faster and more efficiently Item 2B-84 Wells Fargo Treasury Management City of Palm Desert | 60 * Source: Authorize.net internal reporting. Security protocols Help protect your organization and your customers. • Tokenization: helps reduce PCI scope by replacing card number with a randomly generated token • Tier 4 datacenters: industry designation for most robust network data centers • Visa owned and operated: monitored data services — 24 hours a day, 365 days a year Additional features Fraud management Fraud keeps evolving. Authorize.net may help you stay ahead of it with their fraud filters (velocity, IP, transaction, and shipping). Using these filters, you can choose a response. • Automatically decline the card • Authorize but hold for review • Hold for review without authorizing • Process as normal and report filters triggered Recurring payments Enable automated recurring and installment payments using the saved tokens that replace card numbers. Digital invoicing* Bill your customers by sending emails that include a link to a payment page. Help ensure payment by sending auto-reminders. Reinforce your brand using customizable invoices (logo, business name, and color). * This service is provided at no additional cost. Account updater* Help prevent declined payments due to outdated card information on file. This value-added service automatically updates stored card numbers. * Authorize.net provides and bills directly for this service. Additional fees apply for this service. Experience Feel secure knowing that you’re working with a pioneer in online payment acceptance. Authorize.net has been helping merchants accept payments since 1996. Authorize.net, a Visa company, currently supports:* • $149 billion in total volume • 1.1 billion transactions • 445,000 active merchants • 900 plus integrated solutions Item 2B-85 Wells Fargo Treasury Management City of Palm Desert | 61 * Authorize.net, Accessed January 14, 2022, https://www.authorize.net/en-us/about-us.html Accolades Authorize.net received a TSG Payment Gateway Award ̶ 2020 Highest Authorization Rate Award ̶ for having the highest rate of successful authorizations.* * Authorize.net, Accessed January 14, 2022, https://www.authorize.net/en-us/about-us.html Confirmit awarded Authorize.net the prestigious Ace Award in their achievement in customer excellence for 12 consecutive years.* * Authorize.net, Accessed January 14, 2022, https://www.authorize.net/en-us/about-us.html The Strawhecker Group, an analytics and consulting firm for the electronic payments industry, awarded Authorize.net the 2019 Developer/API Awards for their API integration. Authorize.net received this award for “thorough documentation, robust test environment, quick implementation, and the lack of a complex certification process.”* * The Strawhecker Group Announces Payment Gateway Winners for Annual Developer/API Awards, Strawhecker Group, Accessed January 14, 2022, thestrawgroup.com/the-strawhecker-group-announces-payment-gateway-winners-for-annual-developer-api- awards/ Wells Fargo Payment Gateway® Our payment gateway service provides: A single source for multiple payment options Tools designed to help you reduce transaction risk and manage fraud* Reporting and reconciliation services * Available as supplemental features. Additional fees apply. The payment gateway service* is a cloud-based payment capture service that enables authorization and settlement of payments. You can process payments received from your website, over the phone, or through your mobile application. * Standard gateway fees apply. Additional fees may apply for optional services. Item 2B-86 Wells Fargo Treasury Management City of Palm Desert | 62 Accept multiple payment types You may potentially increase sales and customer satisfaction by accepting a variety of payment types. With our payment gateway, you can accept: Card payments Additional payment types • Major credit cards • Debit cards • Corporate and purchasing cards • Electronic check (eCheck) payments • Digital payment types • Apple Pay • Google Pay • Samsung Pay • Visa Checkout • PayPal Express Apple, the Apple logo, Apple Pay, Apple Watch, Face ID, iPad, iPad Pro, iPhone, iTunes, Mac, Safari, and Touch ID are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Wallet is a trademark of Apple Inc. The App Store is a service mark of Apple Inc. Android, Chrome, Google Pay, Google Pixel, Google Play, Wear OS by Google, and the Google Logo are trademarks of Google LLC. Samsung, Samsung Pay, Galaxy S (and other device names) and Samsung Knox are trademarks or registered trademarks of Samsung Electronics Co., Ltd. Other company and product names mentioned may be trademarks of their respective owners. Receive your funds as soon as the next business day If your card transactions1 and digital payments are processed through our gateway and settled by 9:00 p.m. Pacific Time, funds can be available in your Wells Fargo commercial deposit account2 as soon as the next business day.3 For eCheck transactions, you can choose a cutoff time of 2:00 p.m. Pacific Time or 5:00 p.m. Pacific Time for next business day funding to your Wells Fargo commercial deposit account.4 1. U.S. dollar Visa®, Mastercard®, and Discover card transactions only. American Express® transactions settle in one to three business days depending on your contract with American Express. 2. You may settle your Merchant Services funds to an account at the financial institution of your preference. When you use a Wells Fargo account for settlement or other Merchant Services purposes, you must use a Wells Fargo commercial deposit account. Deposit products offered by Wells Fargo Bank, N.A. Member FDIC. Merchant Services are provided by Wells Fargo Merchant Services L.L.C. and Wells Fargo Bank, N.A. Merchant Services are not deposit products. Wells Fargo Merchant Services L.L.C. does not offer deposit products and its services are not guaranteed or insured by the FDIC or any other governmental agency. Merchant Services are subject to application, credit review of the business and its owners, and approval. 3. When depositing into a Wells Fargo commercial deposit account. Please refer to the Merchant Services Terms and Conditions and Operating Rules or Program Guide for additional information. 4. You choose the cutoff when we implement your service. Fully integrate ACH payments With the eCheck feature, you can accept a customer’s bank account information online or over the phone, then process the payment as an ACH transaction.* * Additional fees apply for this service. Use of our ACH service is subject to thorough credit analysis and requires use of a Wells Fargo commercial deposit account. In addition, you must secure authorization from consumers to debit their accounts. Item 2B-87 Wells Fargo Treasury Management City of Palm Desert | 63 The service supports: WEB Single and recurring consumer debits initiated though the internet TEL Single consumer debits initiated over the phone CCD Commercial debit and credit entries PPD Consumer credits and debits authorized by a signature If you choose to accept ACH payments, you can use an optional service that automatically checks for proper transit and routing numbers, as well as proper account structure. Expand sales with global card processing When you use our payment gateway, you may have the potential to expand sales internationally and manage the risk and complexity of global export regulations and tax requirements. Convert receivables to USD You can accept Visa, Mastercard, and American Express payments in more than 130 currencies. Our processor automatically converts your receivables at rates set by Visa and Mastercard, and we fund your Wells Fargo commercial deposit account in U.S. dollars. If you meet our cutoff times, funds will settle to your Wells Fargo commercial deposit account as soon as the next business day.*† * You may settle your Merchant Services funds to an account at the financial institution of your preference. When you use a Wells Fargo account for settlement or other Merchant Services purposes, you must use a Wells Fargo commercial deposit account. Deposit products offered by Wells Fargo Bank, N.A. Member FDIC. Merchant Services are provided by Wells Fargo Merchant Services L.L.C. and Wells Fargo Bank, N.A. Merchant Services are not deposit products. Wells Fargo Merchant Services L.L.C. does not offer deposit products and its services are not guaranteed or insured by the FDIC or any other governmental agency. Merchant Services are subject to application, credit review of the business and its owners, and approval. † When depositing into a Wells Fargo commercial deposit account. Please refer to the Merchant Services Terms and Conditions and Operating Rules or Program Guide for additional information. Authorize, settle, and receive funds in multiple currencies You can accept Visa and Mastercard transactions with funding to your accounts in local currencies. Funds will settle to your account within four business days.* * For additional information, please refer to the Wells Fargo Merchant Services Terms and Conditions, Operating Rules, and International Processing Addendum or regional agreement for the United Kingdom or European Union (if applicable). A U.S. card processing relationship with Wells Fargo Merchant Services is required. Presence in the processing region is necessary to take advantage of the best interchange rates. If you do not have a presence in the processing region, additional fees may apply. To enable American Express transactions in currencies other than USD, reach out to your eReceivables consultant, Todd Reed. Funding to non-U.S. dollar accounts at other institutions is by wire transfer. Actual funding times depend on the receiving institution making the funds available. You may be subject to the receiving an intermediary institutions’ wire funding fees. Deposits held in non-U.S. branches are not FDIC insured. Your eReceivables consultant can provide additional information. Item 2B-88 Wells Fargo Treasury Management City of Palm Desert | 64 The following table lists the currencies available with this service.* Available currencies for Visa and Mastercard • Australian dollar • British pound • Canadian dollar • Danish krone • Euro • Hong Kong dollar • Japanese yen • Norwegian krone • Swedish krona • Swiss franc • U.S. dollar * All currencies may not be available in all regions. Selection of currencies is limited in some regions. Authorize transactions and receive funds in different currencies You can authorize transactions in more than 130 currencies and settle and fund in one of three currencies (Canadian dollar, Hong Kong dollar, and Australian dollar).* * Settlement is restricted to the currency local to the merchant’s domicile (for example, merchants domiciled in Australia can only fund in Australian dollar). Manage global tax calculation Built-in functionality calculates sales, use, and value-added tax (VAT) in real time. You can calculate VAT in real time in more than 30 countries. Adhere to export regulations To help you meet export standards, the gateway service includes features designed to help you validate order data, review transaction history, and verify the purchaser’s shipping, billing, and IP addresses. Provide the transaction details your customers need To potentially reduce service calls and chargebacks for card transactions, you can customize the descriptors that will appear on your customers’ cardholder statements. This feature may make it easy for your customers to identify you as the merchant. You can also provide the Level II and III data your commercial customers need when they pay with purchasing cards or corporate cards. This option helps your customers manage their purchasing activities, and it may help you optimize your interchange program. Our payment gateway offers recurring billing to help you: • Minimize the security risk of storing customer data • Streamline processing of installment and recurring payments • Control the timing of payments, reducing costs associated with late payments You submit your customers’ payment information to our payment gateway, and the system provides you with a masked card account number and a token that you’ll use to initiate future payments. Our gateway and processing partners store your customers’ sensitive information in their PCI-compliant data centers. Item 2B-89 Wells Fargo Treasury Management City of Palm Desert | 65 The service offers three billing options: Installment • Process a fixed number of payments at a fixed amount and frequency Recurring subscription • Process ongoing payments, at a fixed amount and frequency, for a service with no specific end-date On-demand payments • Process payments when you need to, using the masked card account number Streamline payment processing with the virtual terminal You can use the virtual terminal feature to help manage payments for your customers. • Eliminate need for customer-facing website • Manually process one-time payments or batch upload • Process refunds and void transactions • Set up and process recurring payments • Process card and eCheck* payments received by phone or mail * The eCheck feature supports WEB, TEL, PPD, and CCD transactions. Transactions processed using the virtual terminal feature will be consolidated in the same reports as transactions processed using other features of our gateway. Future enhancement We’re exploring ways to help enhance our payment gateway by adding comprehensive (stationary and mobile) EMV-compliant chip card transaction capabilities.* Your Wells Fargo relationship team will let you know when this feature becomes available. * This is future functionality, which is subject to development, change, or cancelation. Wells Fargo makes no representation about when the functionality will go to market. Help secure payment data and manage fraud Our payment gateway provides the City with features and options designed to help secure payment data and manage risk. PCI compliance PCI DSS compliance is important to your organization. Our gateway service is PCI compliant. Its payment tokenization technology, which replaces sensitive payment data with a unique identifier, lets you keep your customers’ card data off your system. The data is stored at PCI-certified data centers. Item 2B-90 Wells Fargo Treasury Management City of Palm Desert | 66 Screening and verification You’ll benefit from screening and verification services including Address Verification System (AVS),* Card Verification Number (for example, CVV2 or CVC2), worldwide delivery address verification, and export compliance checks. * Additional fees apply for this service. Account takeover protection Cyber risk can start when fraudsters attempt to take over customers’ accounts. By monitoring account creation, device usage, and other nonpayment activity, our account takeover protection* service enables you to flag potentially fraudulent activity before it occurs. At the same time, it helps you streamline the user experience for returning and other genuine customers. You can set up rules for actions, such as account creation, login, or updates, as well as for acceptance, rejection, and requests for additional information. * Standard gateway fees apply. Additional fees apply for this service. Payer authentication Our payment gateway’s payer authentication service uses the 3-D Secure protocol, which supports security services, such as Visa Secure (formerly Verified by Visa), Mastercard Identity Check (formerly Mastercard SecureCode), and American Express SafeKey.* It’s designed to help increase security by sending more than 130 data points to the card issuer. This allows the issuer to silently authenticate — without requiring cardholder interaction — for the majority of authentication decisions. * Additional fees apply for this service. It’s designed to help you: 1. Improve card transaction security 2. Reduce chargeback handling costs related to unauthorized transactions 3. Streamline the dispute resolution process The payer authentication service’s improved checkout experience reflects the trend towards in- app and mobile device payments. Importantly, merchants based in Europe will be able to use the service to help meet the European Union’s Strong Customer Authentication (SCA) requirement from the revised Payment Services Directive (PSD2) for card-not-present payments. Set rules for authentication Our optional payer authentication feature* helps you minimize the impact of security protocols on consumer experience. With this feature, you set rules to identify transactions that should go through the authentication process. For example, you can require secure authentication only for high-risk transactions and international transactions but not request it for low-risk U.S. domestic transactions. * Additional fees apply for this optional feature. Item 2B-91 Wells Fargo Treasury Management City of Palm Desert | 67 Online fraud management You can use our online fraud management service* to help evaluate the risk of credit and debit card payments in real time. The service, used in conjunction with our payment gateway, allows you to automate decisions to accept or decline payments or to send them for manual review based on business rules you establish. * Additional fees apply for this service. An optional feature of the service lets you use up to 12 months of your transaction history to analyze what-if fraud strategies.* You can quantify the expected impact of one or more fraud screening strategies in real time, before implementing them, by understanding the likely changes to the transaction disposition and fraud rates. * Additional fees apply for this optional feature. The service calculates transaction risk data from the more than 68 billion transactions Visa processes annually. Using machine learning, the tool remains powerful by updating more than 260 validation tests, as it detects new fraud patterns. Streamline reporting and reconciliation You have access to reports that you can use to view or reconcile payments through all phases of the payment cycle, including chargebacks and returns. You can also search for transactions using a variety of criteria, including an order or reference number field that you define. You can generate standard and custom reports in CSV or XML file formats and download them manually. In addition, you can schedule standard reports to download automatically to your computer through an API connection. Standard reports include the following information: Summary of transactions, including authorizations and captures Currency and payment method used for payment transactions Amount and number of payment transactions by payment method and currency Events related to certain types of payment transactions Detailed information about payment and risk transactions Integrate with existing systems Interface with third-party applications Many third-party applications, such as shopping cart, cashier, interactive voice response, ERP, and other systems have interfaces that are compatible with our gateway service’s core technical specifications. Item 2B-92 Wells Fargo Treasury Management City of Palm Desert | 68 Consolidate receivables for posting You can receive a consolidated receivables file* that combines payments processed through our payment gateway with other payments received in your Wells Fargo account. You can use the file to post payments automatically to your ERP platform. * Additional fees apply for this service. Payment types for online origination • ACH • Electronic bill presentment and payment • Foreign currency wires • Image cash letter • Lockbox • Online bill payments • Real-time payments • Remote deposit • Wells Fargo Payment Gateway • Wires E-Bill Express Our electronic bill presentment and payment service* is designed to provide secure and convenient options for your customers to view and pay their bills. It may help you reduce: A turnkey solution that works with your existing systems and doesn’t require webpage development or extensive support from your information technology resources. • Collection time • Manual exception processing • Days’ sales outstanding • Receivables processing costs Convenient email, text†, and mobile wallet notifications remind your enrolled customers that payments are due. Additionally, the service may help lower your print and mail costs because fewer customers may require paper bills. * Standard bill presentment and payment fees apply. Additional fees may apply for optional services. † Additional fees apply for text services. Text notifications are not available to The City’s payers if you are set up for our Service Fee Program. The service, which hosts the bill payment webpages, is designed to be cost-effective, easy to implement, and branded to your identity. Flexible bill presentment and payment options At implementation, you choose the configuration options that are most efficient for your organization and designed to meet your customers’ expectations. This may increase the likelihood that your customers will choose to view and pay their bills electronically. Item 2B-93 Wells Fargo Treasury Management City of Palm Desert | 69 Decide how much information your customers see You can provide your customers with detail or summary bill presentment in HTML format, or you can provide PDF bill presentment. The payment page displays: • A list of open bills • Amount due • Due date • Invoice number • Other optional fields, for example, a purchase order number or invoice line item details Detail presentment We offer more than 50 billing information fields, including several fields that you can customize. The fields include line item details about items ordered and shipped, unit price, and the previous balance that is past due. Biller information fields • Invoice number • Invoice date • Minimum amount due • Due date • Previous balance • Current balance • Total amount due Summary presentment With the summary presentment option, you can provide high-level billing information such as the information fields listed in the following table. In addition to the standard fields, there are several customizable fields. PDF presentment If you’d like your customers to view an exact replica of your invoice, the service can present the invoice in PDF format. We offer several options for providing invoices in PDF format. We’ll discuss the options with you during implementation.* * Additional fees may apply based on your choice of PDF storage options. Sending us your data You can use batch files or an API to provide your billing data. Batch files You can submit your bill files in comma-separated values (CSV) format using one of our secure internet transmission protocols or through the service’s administrative portal. If we receive your bill files by 8:00 p.m. Pacific Time, your customers can view their billing information the next business day. Item 2B-94 Wells Fargo Treasury Management City of Palm Desert | 70 API You can provide your billing data in real time through an API that uses: • Representational State Transfer (REST) for communication • JavaScript Object Notation (JSON) messaging format • Auth 2.0 authorization protocol Your customers can view their billing information immediately, 24 hours a day, 7 days a week, depending on the City’s internal system configuration. Notifications help encourage prompt payments When your customers enroll for electronic bill presentment and payment, they’ll receive notifications that remind them to view and pay their bills. Notifications are available by email, text, or through your customer’s mobile wallet. Email notification We offer the following types of email notifications for enrolled users: Ready-to-view bills Scheduled payments Processed payments, including confirmation number Expiring credit cards Upcoming bill date Past due bills The email includes a link to the login screen. Once the customer logs in, they can view billing information. Text*† Enrolled users who receive email notifications can also receive the following text notifications: • Ready-to-view bills • Bill due • Bill past due * Additional fees apply for text services. † Text notifications are not available to the City’s payers if you are set up for our Service Fee Program. Mobile wallet Your customer can add the City’s bills to a mobile wallet.* Notifications on the phone screen remind the customer to view and pay the bill. They tap on the View Bill or Pay My Bill button to access the website and make a payment. Item 2B-95 Wells Fargo Treasury Management City of Palm Desert | 71 Mobile wallet notifications have an advantage over email because notifications won’t get lost in the payer’s inbox. These notifications let the payer know: • A new bill is available to view • Payment is due • A payment is confirmed * The service is compatible with iPhones, iPads, and Android devices. Android devices require your customers to do additional setup to view notifications. Choose the payment channels available to your customers Online Your customers will access our service through a link on your website, or by bookmarking our online presentment and payment URL. We host the website, and it’s branded with your logo. When customers access the website, they can select one of three languages: English, Spanish, or French. This may increase customer engagement and reduce the number of calls to your customer service representatives. Text*† Your customers who are enrolled for text notifications can respond to any text notification with the command “Pay” to initiate bill payment. After confirming the payment, the customer will receive a text message that includes the date and amount of the payment, and a confirmation number. Payments made by text must be for the full payment amount. Text notification and payment messages are available in English only. * Additional fees apply for text services. † Text to pay is not available to the City’s payers if you are set up for our Service Fee Program. Interactive voice response As part of the electronic bill presentment and payment service, you can choose to offer an interactive voice response (IVR) phone option for your customers to make payments. When your customers call the toll-free number, the system will prompt them to enter the information needed to process the payment.* With the IVR interface, you can choose from several configurable options for the call flow, including an option for callers to opt out and speak with one of your representatives. The IVR option supports English and Spanish. * Additional fees apply for the IVR option. Telephone payments made through your customer service representatives Your customer service representatives can accept payments over the phone and process them through the administrative portal of the bill presentment and payment service. Item 2B-96 Wells Fargo Treasury Management City of Palm Desert | 72 Accept payments from enrolled users and one-time payers You can choose to accept payments from customers enrolled in the online service and those making one-time online payments. Enrolled users Enrolled users can save payment methods, set up recurring or future-dated payments, and view their online payment history. One-time payments Customers can make one-time online payments, including future-dated payments, but they cannot save their payment methods or setup recurring payments. These customers won’t have access to online payment history. Accept multiple payment types With our electronic bill presentment and payment service, you can accept: • Electronic check (eCheck) payments • Major credit cards (Visa, Mastercard, Discover, or American Express) • Debit cards (with the Visa or Mastercard logo) • Corporate and purchasing cards (Level III data supported) Keep card information up to date Maintaining updated card information for electronic bill presentment and payment users can help increase customer satisfaction and potentially minimize declined transactions. However, even if prompted by email, the customer may not update their card expiration date or card number. You can take advantage of our Account Updater service*, which automatically updates information for Visa and Mastercard cards. Once per month, the service updates information for cards used within predetermined number of days in the past, or cards that are expiring within a predetermined number of days in the future. * Additional fees apply for the Account Updater service. Receive funds as soon as the next business day Funds for payments processed before the cutoff time are typically available in your Wells Fargo commercial account1 as soon as the next business day.2,3 You can choose a cutoff time of 5:00 p.m. Pacific Time, 3:00 p.m. Pacific Time, or 2:00 p.m. Pacific Time.4 1. You can settle your Merchant Services funds to an account at the financial institution of your preference. When you use a Wells Fargo account for settlement or other Merchant Services purposes, you must use a Wells Fargo commercial deposit account. Deposit products offered by Wells Fargo Bank, N.A. Member FDIC. Merchant Services are provided by Wells Fargo Merchant Services, L.L.C. and Wells Fargo Bank, N.A. Merchant Services are not deposit products. Wells Fargo Merchant Services, L.L.C. does not offer deposit products and its services are not guaranteed or insured by the FDIC or any other governmental agency. 2. Please refer to the Merchant Services Terms and Conditions and Operating Rules or Program Guide for additional information related to card transactions. 3. Visa, Mastercard, and Discover card transactions and eCheck only. American Express card transactions settle in one to three business days depending on the City’s contract with American Express. 4. You choose the cutoff time when we implement your service. Item 2B-97 Wells Fargo Treasury Management City of Palm Desert | 73 Online reports and search capability Reports Through the administrative portal, you can access a variety of reports, including: User reports that provide information about your customers’ payment activity, status, and enrollment Financial reports that provide information about deposits and payment batches Bill payment and management reports that show payments, recurring payments, suspended payments, and stops File management reports that show the status of your billing files Online reports are available 24 hours a day.* You can download reports in CSV, Excel, and PDF formats. In addition, you can customize the columns and filters for further analysis. You have access to 12 months of payment and invoice history as a standard part of the service. However, you can request that we set you up for extended history of up to seven years.† * Availability exclusive of unplanned outages. † There is an additional monthly fee for extended history. Search capabilities To assist with customer inquiries, the City’s customer service representatives can search and query by date range, customer ID, payment amount range, and invoice number. Streamline receivables posting You’ll receive all of the information you need to post and reconcile payments, including: • Your internal customer reference number, for example a customer or account number • Payer’s name • Invoice number • Amount paid per invoice number • Fee amount (if applicable) • Total amount paid, includes multiple invoices and fee amounts (if applicable) • Payment method and channel In the following paragraphs, we describe the options you can choose for receiving this information. Receive a daily accounts receivable file To streamline receivables posting and reconciliation, you receive a daily* accounts receivable file that automatically uploads to your ERP or financial system. The file, which includes remittance information for all payment types, provides details of your electronic bill payment activity for eCheck payments and returned items, credit card payments, and debit card payments. Item 2B-98 Wells Fargo Treasury Management City of Palm Desert | 74 The accounts receivable file is available in a fixed-width flat file or in a pipe-delimited flat file. If you need a customized file to integrate with your system, you can use our consolidated receivables service. You will receive this file by secure file transmission. As an alternative, you can download it in CSV format through the online administrative portal of our bill presentment and payment service. Your accounts receivable file is available four hours after your daily cutoff time. * Excludes federal holidays and weekends. Memo post payments with real-time payment notification*† Using an API, you can receive real-time payment data that your representatives can use to help provide a better customer service experience for your payers. Our system sends the data to a URL that you provide, letting you automatically memo post payments to your receivables system. The real-time data includes the same information you’ll receive in the daily accounts receivable file. * Payments can be cancelled up to 15 minutes before your daily cutoff time. Therefore, we recommend that you use the real-time data only to memo post payments, and use the daily accounts receivable file for final posting and reconcilement. † Additional fees apply. Consolidate electronic bill payments with other payments you receive* You can receive a consolidated receivables file that combines payments processed through our electronic bill presentment and payment service with other payments received in your Wells Fargo account. You can use the file to automatically post payments to your ERP platform or financial system. * Additional fees apply. Your consolidated file can include information on payments received through the sources listed in the following table. Payment types for online origination • ACH • Electronic bill presentment and payment • Image cash letter • Lockbox • Online bill payments • Real-time payments • Remote deposit • Wells Fargo Payment Gateway • Wires Item 2B-99 Wells Fargo Treasury Management City of Palm Desert | 75 Value-added services to consider Commercial card services (enhancement) One card, one workflow Help maximize convenience, efficiency, and control with one card and one platform that handles your employee spending, travel, general procurement, accounts payable disbursements, and more. When you consolidate expenses into one program, the City gains access to comprehensive information for smart decision making. You have the potential to realize significant savings in time, transaction-processing costs, and internal resources required to support the program. A single-card platform integrates multiple processes and creates a solid foundation for future growth. Additionally, you’ll gain an ally with more than 28 years of experience in the card industry and knowledge to help make your program successful. Accepted almost everywhere We issue both Visa and Mastercard, with both platforms boasting millions of global acceptance locations.*† This coverage means your employees can make purchases almost everywhere cards are accepted. We’ll help you determine which issuer best meets your needs. * Visa. 2021. “ Visa Annual Report 2021.” Visa > Investor Relations > Annual Reports & Meeting. † Mastercard. November 10, 2021. “Mastercard Investment Community Meeting.” Mastercard > Investor Relations > Events and Presentations. Corporate liability: A best practice Organizations typically choose a corporate liability program because it’s designed to: • Increase visibility of spending across the entire organization • Decrease costs, losses, and risk • Eliminate individual liability and unnecessary burdens on employees Corporate liability also means that your earned revenue share doesn’t depend on cardholder reconcilement — giving you the potential to earn more. Online program management For low IT burden and flexibility, manage your program through our expense management service, which offers self-administration functionality and customizable components. There is no need to install hardware or software on your system. Our service provides: • Intuitive coding of common expenses • Real-time online card management • Comprehensive standard, custom, and ad hoc reports • Customizable transaction fields • Secure multi-level approvals Item 2B-100 Wells Fargo Treasury Management City of Palm Desert | 76 You can upload expense data from the application to most ERP and treasury workstation platforms, which eliminates any manual data entry to your general ledger. Your employees can use our expense management service to: • Review and approve transactions • View and upload receipts • Input cash expenses • Reclassify line items to multiple cost centers Handle tasks on the go Employees can manage their expenses when away from their desks using our end-to-end mobile service.* Cardholders and approvers can complete almost all of their card-related activities using their mobile devices. For example, they can snap receipt images at the time of purchase, manage charges and expenses, approve transactions, and view available credit and declines. To help keep accounts secure, cardholders can receive text alerts† when transactions are complete or when nearing their card limit. They can set notifications by dollar threshold. * Functionality for our WellsOne Expense Manager mobile application requires a WellsOne Commercial Card, use of our WellsOne Expense Manager service, and access to the CEO portal. Download the latest version of the application for your device from the Apple App Store or Google Play store. † Your mobile device’s coverage area can affect availability. Your mobile carrier's message and data rates may apply. Digital business-to-business payments Don’t miss the potential time and cost savings of digital payments. With our Virtual Card Payments service, you can pay suppliers using unique virtual card numbers. Initiate a payment through our online application, by Application Programming Interface (API), or by file transmission. We produce a unique virtual card number and send it, along with transaction details, to your supplier in a secure email. Use an electronic transaction detail file to close transactions within your accounting system. For added control and ease of reconciliation, you can additionally limit payments to an exact dollar amount, or make the payment available for a limited time. Help make it easier for suppliers to accept your payments With our Straight Through Processing* solution, you can make it easier for your suppliers to do business with you. Suppliers can arrange to receive your card payments in their bank accounts, instead of processing the payments themselves. * We offer our Straight Through Processing solution as part of a relationship with Mastercard, and in conjunction with our WellsOne Virtual Card Payments service. Additional fees and restrictions apply. One file for all payments To help simplify your payables process even further, send us an electronic payment file directly from your treasury workstation, ERP, or accounts payable system. You can consolidate multiple payment types — check, ACH, wire transfer, and virtual card transactions — in a single file. Upon receipt of the file, we separate payments by type, process them accordingly, and send human- readable remittance information to the payee. Item 2B-101 Wells Fargo Treasury Management City of Palm Desert | 77 We help onboard your suppliers Our experienced Supplier Analysis and Onboarding team can help strengthen your supplier trading partner relationships through a single program that covers both commercial card and ACH payments. We use proprietary analysis tools to analyze your supplier base and then create a customized strategy and targeted outreach campaign specific to your needs. Help protect yourself from fraud It’s important to have the best fraud protection for your cardholders and accounts. We use proprietary fraud mitigation technology, customized transaction monitoring, and convenient reconciliation tools to help keep your cardholders and accounts safe. Enhanced fraud alerts are just one of the capabilities we use to fight fraud. We send your cardholders alerts by email or text* when we identify a suspicious purchase. They can confirm whether the transaction is fraudulent by simply responding to our email or text. Their responses help us detect and prevent fraud almost instantly. * Your mobile device’s coverage area can affect availability. Your mobile carrier's message and data rates may apply. Additionally, our commercial cards adhere to the rigorous security protections of the Visa and Mastercard networks. Full implementation support We approach implementation as a partnership. We commit our full-time resources and experienced members of our commercial card team to guide the design, installation, and rollout of your program. Dedicated account manager We assign a dedicated account manager to new card programs to provide ongoing guidance and support. Your account manager meets with you regularly to track program statistics and measure them against your key goals. In addition to this benchmarking, your account manager updates you on industry developments and best practices that promote card use. Liability protection through Visa and Mastercard Each commercial card program is eligible for a liability waiver offered through Visa and Mastercard up to $100,000. This waiver can help protect your organization from certain employee misuse or other unauthorized charges. Around the clock support We have two commercial card service centers within the U.S. dedicated exclusively to serving our commercial card customers. Our representatives assist with card maintenance services, such as reporting a card as lost or stolen and answering questions about cardholder transactions. the City can call our service team for support, 24 hours a day, seven days a week. Item 2B-102 Wells Fargo Treasury Management City of Palm Desert | 78 Consolidated payables service Our consolidated payables service, Payment Manager®, can help you streamline and automate your payment and remittance processes, help strengthen trading partnerships and drive working capital, and help improve operational efficiencies. By reducing the use of paper documents and manual data entry, you can minimize mistakes and increase efficiency. Payment types In a single file, you can provide payment instructions and include all related remittance information. Your file can include multiple payment types; we separate the payments by type and process them accordingly. Your file can include any of the following payment types: Payment types accepted • USD and CAD* paper checks • U.S. ACH transactions in USD • Global ACH transactions in foreign currencies • USD wires • Foreign currency wires • Requests for transfer (SWIFT MT101 messages) • Wells Fargo virtual card payments • Disbursements with Zelle®† * CAD paper checks are available only for off-us accounts. You must be the owner of the account. † Zelle and Zelle-related marks are wholly owned by Early Warning Services, LLC and are used herein under license. We accept most custom and proprietary file formats — almost any type of file format your system can generate. If you use a standard format, it can minimize your implementation costs and time. Lower error rates By reducing the use of paper documents and manual data entry, you increase efficiency and minimize mistakes. Improve cash forecasting and reconciliation Electronic control of your global disbursements allows you to better manage and forecast your cash flow. We integrate this service with our account reconciliation and positive pay services. Potentially reduce costs You can initiate multiple payment types in a single, consolidated payables file, which helps reduce your internal costs associated with accounts payable processing. For example, you can select wires for time-sensitive payments and ACH for payments that are less pressing. In addition, electronic payment methods can help reduce your expenses for paper check payments. These options can help you manage processing costs more effectively. Item 2B-103 Wells Fargo Treasury Management City of Palm Desert | 79 How it works Online services Through our online banking portal, you can: • Upload a payment file • Perform additional approvals after sending the file • Access acknowledgments and optional confirmations • Generate reports on payment files • Run an audit report on settings and user entitlements Technical requirements Our service is compatible with most treasury workstations, ERP systems, and other accounts payable systems. We also have the capability to integrate with many emerging cloud-based ERP systems. We list some of the most common systems we integrate with in the following table. We can also work with many additional systems outside of this list. Treasury workstations and ERP systems GTreasury Oracle* JD Edwards (EnterpriseOne) PeopleSoft Kyriba SAP Lawson SunGard Microsoft Dynamics Great Plains Wall Street Systems MRI Yardi * If you use Oracle, you can use our software solution to manage data translation to the file. Item 2B-104 Wells Fargo Treasury Management City of Palm Desert | 80 Flexible file options Delivery Transmit your payment file using a variety of communication protocols (including multiple internet options) or upload it online. Formats We can accept and acknowledge your file for initial processing, 24 hours a day, seven days a week. Our service accepts: • Excel Comma Separated Values (CSV) • Wells Fargo flat file (delimited or positional) • Wells Fargo XML • ISO 20022 (CGI common XML standard) • ANSI X12 820 version 4010 • SAP IDoc – Extended Payment Order (PEXR 2002) • Custom and proprietary formats Processing deadlines Depending on the payment type you send, we process your file the same business day if we receive it by our cutoff time. For a file that arrives after our cutoff time, we process it on the next business day. If you require secondary approval, you complete it by the applicable deadline for same-day processing. If a file includes multiple payment types, the earliest applicable deadline applies to the entire file. Cutoff times (Pacific Time) Payment type File cutoff time Checks Standard Same day1 7:00 p.m. 9:00 a.m. ACH On-us same-day settlement Transit same-day settlement One-day settlement Two-day settlement 5:30 p.m. 6:00 a.m., 10:00 a.m., and 12:00 p.m. 5:30 p.m. 5:30 p.m. Item 2B-105 Wells Fargo Treasury Management City of Palm Desert | 81 Payment type File cutoff time Wires Fedwire SWIFT CHIPS Drawdown request Request for Funds Transfer (RFT) U.S. Federal tax payments Within Wells Fargo2 3:15 p.m. 2:30 p.m. 2:00 p.m. 2:30 p.m. 2:30 p.m. 2:00 p.m. 5:00 p.m. Wells Fargo virtual card payments Accepted when received Zelle® payments3 Accepted when received 1. Subject to volume limitations and additional fees. 2. Transactions within Wells Fargo are moving funds from one Wells Fargo account to another. You can originate these from all origination channels to all of our available accounts. 3. For Zelle® payments with the check completion option, if an electronic payment fails to originate, transactions will change over to checks. Checks are mailed on the next business day. Safety and security Secondary approval You can make optional secondary approvals for some — or all — of your payments after we receive your file. The system can hold an entire file of payments or an individual payment for an authorized user to approve or delete. We then generate the payments and send remittance information based on your instructions. History You can search for payment information, view standard reports, create custom reports, and schedule report reminders. Data is available for 90 calendar days after we receive your payment file. Users with administrative authority have access to an audit report, which provides snapshots of setups and user entitlements. You can also view all changes made to setups and user entitlements within the last 90 calendar days. Acknowledgments We let you know by transmission, secure email, or both that your file has reached our system and undergone initial processing. You can choose from the following formats: • XML • ANSI X12 997 (standard EDI) • ISO 20022 • Human-readable report If you’d like delivery by both transmission and email, each can be in a different format. You can also view and download acknowledgments online. Item 2B-106 Wells Fargo Treasury Management City of Palm Desert | 82 Confirmations You have the option to receive payment confirmations for wire transfers, virtual card, and ACH payments by transmission, secure email, or both. You can also view and download confirmations online. You can choose from the following formats: • XML • ANSI X12 824 (standard EDI) • Excel CSV • ISO 20022 • Human-readable report Remote cash capture (smart safe) You can receive provisional expedited credit to your account — accelerating your cash flow by one to two business days — with our remote cash capture service. A vendor (Brinks, Garda, or Loomis) installs a smart safe equipped with bill validating and counterfeit detection technology in your location. The safe accepts deposits, provides deposit counts, and transmits deposit information to us. After the money goes into the safe, your employees never handle it and never take it to the bank. The courier picks up your deposit (and can deliver coin and currency) on a schedule that you determine. Deposits go to a designated cash vault location. Provisional expedited credit options and reporting* include: • Standard Deposit Credit — You receive credit for your deposits on the next business day in the evening after the cash has been deposited and you can view transactions on previous day reports. • Premium Intraday Deposit Credit — You receive next business day credit by 8:00 a.m. local time and view transactions on both intraday deposit and previous day reports. We offer our remote cash capture service in partnership with armored couriers such as Brinks, Garda, and Loomis. The vendor that you select is responsible for installing the safes at your locations and for maintenance and repairs. * For reconciliation, you can view transaction information through our standard reporting channels. Sweep services Sweep accounts provide you with an automated solution for optimizing funds and earning interest on balances invested overnight. Because investments are either overnight or short-term, the City has daily access to your money. We also offer a credit sweep service that allows you to use bank account balances to pay down a line of credit. You can use the line of credit to fund a bank account that has fallen below a target balance amount. You can also choose to tie an investment sweep to the credit sweep account structure. Item 2B-107 Wells Fargo Treasury Management City of Palm Desert | 83 Once you determine a target amount (which you can set to zero), we sweep excess collected balances over the target amount from your checking account to an investment. Alternately, we sweep excess collected balances over the target amount to pay down a line of credit, depending on your cash flow needs. Benefits Automated investment of funds By sweeping automatically each night, our service eliminates the need for costly and time-consuming manual funds movement to and from investment accounts. Accuracy of funds transfer Sweep transfers occur after all the day’s debits and credits post to your account. Transferring funds after debits and credits post helps ensure that the sweep won’t accidently overdraw your account. Consolidated reporting You receive a monthly statement that includes information on your balances and the interest paid on your investment. Our confirmations provide you with sweep transaction activity and daily rates. You can monitor your sweep activity online using our information reporting service. We can also deliver your statements and notifications electronically. Money Market Mutual Fund Sweep Our Money Market Mutual Fund* automatically sweeps excess collected balances into one of our Allspring Money Market Mutual Funds: • Government Money Market Fund • Treasury Plus Money Market Fund • 100% Treasury Money Market Fund * Not FDIC insured, no bank guarantee, and may lose value. Because funds stay invested until you need them, you can generate earnings without sacrificing access to your cash. If your checking account balance is above your target balance at the end of the day, we automatically sweep the excess balance from your account into an FDIC-insured omnibus account* at the bank. At the beginning of the next business day, we transfer the funds to the money market mutual fund custodian. The custodian invests funds in a non-FDIC insured, non- bank guaranteed money market mutual fund.† * Funds transferred to the omnibus account are eligible for FDIC insurance up to the allowable limit. Additionally, government deposits remain collateralized in accordance with state or federal law. We hold funds in the City’s name until released for investment the following business day. † This statement is just a summary. For complete information, please see the Wells Fargo Stagecoach Sweep® Service Description and the current prospectus for the Allspring Funds ALLSPRING FUNDS MANAGEMENT, LLC, A WHOLLY OWNED SUBSIDIARY OF ALLSPRING GLOBAL INVESTMENTS HOLDINGS, LLC (“ALLSPRING GLOBAL”), PROVIDES INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES FOR THE ALLSPRING FUNDS®. OTHER SUBSIDIARIES OF ALLSPRING GLOBAL PROVIDE SUB- ADVISORY AND OTHER SERVICES FOR THE FUNDS. THE FUNDS ARE DISTRIBUTED BY ALLSPRING FUNDS DISTRIBUTOR, LLC, MEMBER FINRA/SIPC, A SUBSIDIARY OF ALLSPRING GLOBAL. Your investment in a money market mutual fund will be pooled with funds belonging to other investors in an omnibus investment account in the name of Wells Fargo as agent on behalf of all its customers invested in the money market mutual fund. An investment in a money market mutual fund is not insured by the FDIC or any other government agency. Although the mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market mutual fund. In addition, mutual funds are not guaranteed by Wells Fargo and may lose value. For more information regarding the money market mutual fund investment sweep option, obtain a current prospectus for the money market mutual fund by visiting allspringglobal.com, by calling 1-800-260-5969, or by contacting your Item 2B-108 Wells Fargo Treasury Management City of Palm Desert | 84 Wells Fargo relationship manager. Consider the investment objectives, risks, charges, and expenses of the investment carefully before investing. This information can be found in a current prospectus. Refer to the Appendix Tab G section of our response for our Money Market Fund fact sheets and summary prospectus. For a more comprehensive review of the information, please click link the following link: allspringglobal.com. How it works Item 2B-109 Wells Fargo Treasury Management City of Palm Desert | 85 4.4. No deviations from the RFP* In submitting a proposal in response to this RFP, Proposer is certifying that it takes no exceptions to this RFP including, but not limited to, the Agreement. If any exceptions are taken, such exceptions must be clearly noted here, and may be reason for rejection of the proposal. As such, Proposer is directed to carefully review the proposed Agreement and, in particular, the insurance and indemnification provisions therein (or type "N/A"). *Response required RFP exception language Upon award of business, Wells Fargo will negotiate and enter into mutually acceptable agreements with the City in connection with the deposit and treasury management products and services requested under the RFP. Wells Fargo’s right to negotiate all contract terms upon award of business will not be affected or diminished by any language in the RFP, including language that purports to require specific comments (or to prohibit general exceptions) to the City’s contractual requirements or to bind Wells Fargo to the City’s contractual requirements unless specifically commented upon. Wells Fargo has included with its response, the Appendix Tab I, copies of its account and service documentation for the deposit and treasury management products and services requested in the RFP, which we require to serve as or be incorporated into any final agreement. Wells Fargo Merchant Services exceptions Our proposal is intended to be a description of the services we can provide in response to the requirements described in the City’s RFP. If our proposal is accepted in principle, we are willing to negotiate mutually acceptable terms and conditions that shall govern our merchant services relationship with City of Palm Desert (the City). However, by responding to the RFP, we are not indicating our acceptance of any of the terms or conditions contained in the RFP. Our right to negotiate all contract terms upon award of business will not be affected or diminished by any language in the RFP, including language that purports to be binding on Wells Fargo Merchant Services by virtue of our proposal, including, but not limited to, any signature page statements, certifications, confirmations and the like required as part of an RFP response. We are providing our Merchant Terms and Conditions and Operating Rules (together which may be referred to as a Program Guide from time to time), which we expect to become the final contract or to become part of the final contract between City and Wells Fargo Merchant Services if you choose us as your provider. These are available at wellsfargo.com/termscustom0920 and wellsfargo.com/operatingrules. Item 2B-110 Wells Fargo Treasury Management City of Palm Desert | 86 Exceptions listing Page_Section Description Page 8_Section 4.2_Non-Collusion Declaration Non-Collusion Affidavit Wells Fargo Merchant Services request to modify this paragraph as follows: “By the signature below, the signatory for the bidder certifies that, to the best of its knowledge, neither he nor the firm, corporation, partnership or institution state the following:” Page 9_4.3_Changes to Agreement Generic Exception Merchant Services are optional for this bid and Wells Fargo Merchant Services is providing overview info and pricing only. As such, Wells Fargo Merchant Services Legal will not provide redlines for the City’s standard agreement at this time and upon award of the bid, we request the opportunity to negotiate a mutually agreeable agreement with City. Standard legal exceptions will be provided accordingly, at this time. Page 14_Section 8.4_Confidentiality of the Proposal Page 10_City Contracted Services Agreement_Section 3.5.3.1 Documents & Data; Licensing of Intellectual Property Property of City Ownership of Intellectual Property Other than possibly statements, there will be no work product or intellectual property under the Agreement that the City will own. Any work product or intellectual property under this Agreement shall be subject to a separate mutually negotiated Statement of Work (SOW), and ownership and usage rights of any such work as a result of any such SOW and/or work product or intellectual property shall be as set forth in the mutually negotiated SOW between the parties. Page 14_Section 8.4_Confidentiality of the Proposal Disaster Recovery – Page 19_Section 10.3_Disaster Recovery Page 11_City Contracted Services Agreement_Section 3.5.3.6 Confidential Information Mark Confidential All Confidential material must be mark confidential. At a minimum, All pricing, references and business continuity information are “confidential”, but note that it is possible that applicable state laws may require us to disclose such information. Page 16_Section 9.6_Price Validity Contract Type (Firm) With respect to Wells Fargo Merchant Services fees, third party, and pass- through type fees may change. Prices and terms were good for 60 days due to shortened turnaround time, but we can honor this request. Page 16_Section 9.6_Price Validity Pricing With respect to the merchant services, please understand that in addition to Wells Fargo Merchant Services’ fees, the Card Organizations and other third-party fees will apply and may not be specifically outlined in the Wells Fargo Merchant Services Pricing Schedule/Cost Proposal. Such third party/Card Organization fees, are subject to change. Page 17_Section 9.10_Audit Page 9_City Contracted Services Agreement_Section 3.4 Accounting Records Records Retention and Audit If awarded the bid, we request the opportunity to discuss and negotiate this provision, including to prohibit any audits on any of our or our affiliates’ and subcontractors’ premises. Page 18_Section 10.2_Bank Liability Page 11_City Contracted Services Agreement_Section 3.5.3.4 Indemnification – Documents and Data Wells Fargo Merchants Services offers the following as its requested language as the starting point for negotiations: “17.1 You agree to indemnify and hold us and the Card Organizations harmless from and against all losses, liabilities, damages, and expenses arising from or related to: Item 2B-111 Wells Fargo Treasury Management City of Palm Desert | 87 Page_Section Description Page 12_City Contracted Services Agreement_Section 3.5.6 Indemnification Indemnification (a) the inaccuracy or untruthfulness of any representation or warranty, any breach, or any misrepresentation by you under the Agreement; (b) your or your employees’ or agents’ negligence or willful misconduct, in connection with Card transactions or otherwise arising from your provision of goods and services to Cardholders; (c) your use of the Services; or (d) any third party indemnifications we are obligated to make as a result of your actions. 17.2 We will indemnify you and hold you harmless from and against all losses, liabilities, damages, and expenses resulting from: (a) any breach or misrepresentation by us under the Agreement; or (b) our or our employees’ gross negligence or willful misconduct in connection with the Agreement. 17.3 The indemnification obligation in Section 17.2 will not apply to Bank with respect to non-bank services. Page 3_City Contracted Services Agreement_Section 3.2.8 Standard of Care; Performance of Employees Page 12_City Contracted Services Agreement_Section 3.5.12 Assignment; Subcontracting Subcontracting when says need permission Wells Fargo is part of a diversified financial services company that provides retail, commercial and corporate banking services throughout much of the United States. Wells Fargo uses various vendors and other third parties to handle portions of its business on a geographic and/or line of business basis. Accordingly, Wells Fargo reserves the right to subcontract freely. It is not feasible for Wells Fargo to obtain the prior written consent of any customer with respect to any service that may use such vendor or subcontractor. However, should Wells Fargo choose to subcontract, it shall remain fully responsible for the performance of all obligations pursuant to the contract, including those performed by a subcontractor. In addition, Wells Fargo does not consider an arrangement with a third party under which the third party assists Wells Fargo in providing services or products that are not specific to the Client to be a subcontract for purposes of this agreement. Page 4_City Contracted Services Agreement_Section 3.2.10.1 Employment Eligibility; Contractor Page 10_City Contracted Services Agreement_Section 3.5.3.2 Subcontractors Subcontractors – obligating to T*C’s Wells Fargo cannot obligate any non-affiliated third party, such as a subcontractor to any specific terms and conditions including in this case. Page 9_City Contracted Services Agreement_Section 3.3.4 Extra Work Generic Exception Upon award of the bid, we request the opportunity to discuss, understand, and negotiate this provision. Page 9_City Contracted Services Agreement_Section 3.5.1.1 Termination of Agreement Termination for Convenience Our RFP response is based on the expectation that you will receive services for a five year term. Your termination rights are as set forth in Section 14.4 of the Wells Fargo Merchant Terms and Conditions. Page 9_City Contracted Services Agreement_Section 3.5.1.3 Early Termination Non Appropriation Clause Our RFP response is based on the expectation that you will receive services for a five year term. Your termination rights are as set forth in Section 14.4 of the Wells Fargo Merchant Terms and Conditions. Item 2B-112 Wells Fargo Treasury Management City of Palm Desert | 88 Page_Section Description Page 9_City Contracted Services Agreement_Section 3.5.1.3 Early Termination Non-Appropriation Clause While we understand the City’s desire to include this provision, Wells Fargo Merchant Services must maintain the right to pass-down certain fees and obligations which as the merchant, the City is responsible. Wells Fargo Merchant Services requests to have this provision deleted in its entirety, or at the very least modified with the addition of the following: “Notwithstanding anything to the contrary the parties acknowledge and agree that nothing in this Section 3.5.1.3 or this Agreement, is intended to nor shall it limit the Contractor’s right to and the Customer’s obligation to pay or reimburse the Contractor for any: (1) chargebacks, (2) refunds; (3) Card Organization fines, fees, assessments, interchange, or other fees (however defined by the Card Organizations); or (4) other fees pass-down to Contractor due to the acts or omissions of the Customer, the Customer’s agents or employees, the Customer’s Merchant Provider (as defined in the Wells Fargo Merchant Services Terms and Conditions), or a third party acting on the behalf of the Customer.” Page 12_City Contracted Services Agreement_Section 3.5.12 Assignment; Subcontracting Assignment While we understand City’s desire to include this provision, we retain certain rights with regard to assignment in the Wells Fargo Merchant Services Terms and Conditions. As such we request to modify this section to start the sentence with "Subject to §13 of the Wells Fargo Merchant Services Terms and Conditions..." Item 2B-113 Wells Fargo Treasury Management City of Palm Desert | 89 Insurance legal comments Section — Item Can we Comply Action Language Replacement Comments/Rationale 3.2.11.1 - Minimum Requirements Yes Strike …and in a form that is satisfactory to City. None WFC’s coverage forms are not subject to review and acceptance of a third party; RIM’s choice of insurance carriers and insurance program structure is an integral risk financing strategy and is not subject to “approval” of any third- party. 3.2.11.1(C) - Professional Liability Yes Strike …and contractor agrees to maintain continuous coverage through a period no less than three years after completion of the services required by this agreement. None WFC does not typically purchase an extended reporting period. 3.2.11.1(D) - Workers’ Compensation Yes Strike Contractor shall submit to City, along with the certificate of insurance, a Waiver of Subrogation in favor of the City, it’s officers, agents, employees, volunteers and representatives. None As a standard practice, WFC does not grant WOS on the Work Comp to third-parties. However, with consideration and approval from the head of RIM, exceptions for municipalities have been made. Our initial recommendation would be to strike the WOS requirement and if it is a dealbreaker with the City, we can request an approval for this requirement. 3.2.11.1(E) – Umbrella or Excess Liability Insurance Yes – With Modification Strike 1) A drop down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason 2) Pay on behalf wording as opposed to reimbursement None While we can comply with the limits of insurance required in this agreement through our primary policies (without involvement from excess/umbrella), I do want to ensure that if the limits were increased to a level where we’d need to evidence Excess/Umbrella limits that our policies would comply. Much of our structured excess liability coverage is just that…Following Form Excess Liability. Excess Item 2B-114 Wells Fargo Treasury Management City of Palm Desert | 90 Section — Item Can we Comply Action Language Replacement Comments/Rationale Liability does not feature the drop-down coverage afforded to coverage gaps in the same way as an umbrella policy. The Pay on behalf wording is not something we may be able to comply with. 3.2.11.1(F) – Fidelity Coverage Yes – With Modification Strike Acceptable Equivalent The coverage forms utilized in our risk financing programs are not subject to the approval of any third party 3.2.11.1(G) – Cyber Liability Insurance Yes – With Modification Strike “If coverage is maintained on a claims- made basis, Contractor shall maintain such coverage for an additional period of three (3) years following termination of the Agreement.” None Tail, or extended reporting period insurance is not purchased. 3.2.11.2(A) – Proof of Insurance Yes – With Modification Strike Strike Strike “Approved” “along with a with a waiver of subrogation endorsement for Workers’ Compensation” “City reserves the right to require complete, certified copies of all required insurance policies, at any time.” Received None None Our broker will issue certificates of insurance on a standard ACORD Certificate of Liability Insurance form evidencing the coverages and amounts required to comply with the agreement, however, we strike the word approved here and replace with received. Coverages are not subject to the approval of the City. If the City is amenable to the changes we request here, there should not be an issue with the certificate needing approval by the City. WFC does not release copies of its insurance policies to third parties. This information is deemed proprietary and we cannot comply with any request to provide copies of policies. Item 2B-115 Wells Fargo Treasury Management City of Palm Desert | 91 Section — Item Can we Comply Action Language Replacement Comments/Rationale 3.2.11.2(E) - Acceptable Insurers Yes – With Modification Amend Strike All insurance policies shall be issued by an insurance company Authorized Amend Permitted All insurance policies shall be issued or reinsured by insurance company(ies) Because we utilize alternative risk financing program including a captive insurer, we must say that the acceptable carriers are Permitted to do business in the state and are in good standing with their state of licensure. 3.2.11.2(F) – Waiver of Subrogation Yes – With Modification Add Strike Language to clarify WOS applies to liability policies only “…and shall require similar written express waivers and insurance clauses from each of its subcontractors” “except Workers’ Compensation” None As a standard practice, WFC does not grant WOS on the Work Comp to third-parties. However, with consideration and approval from the head of RIM, exceptions for municipalities have been made. Our initial recommendation would be to strike the WOS requirement and if it is a dealbreaker with the City, we can request an approval for this requirement. WFC cannot agree to any language in a contract that stipulates what kind, type, or limit of coverage it’s subcontractor’s should carry. 3.2.11.2 (H) – Requirements Not Limiting No Strike “If the Contractor maintains higher limits than the minimum shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.” None WFC will provide limits of insurance as required by contract only. The policy has specific wording that the limits of insurance applicable to the additional insured are those specified in the written contract/agreement or in the Declarations of the policy, whichever is less. Item 2B-116 Wells Fargo Treasury Management City of Palm Desert | 92 Section — Item Can we Comply Action Language Replacement Comments/Rationale 3.2.11.2 (J) Additional Insured Status Yes – With Modification Strike “and if applicable, pollution liability and cyber liability.” None WFC does not extend Additional Insured status under these policies. 3.2.11.2 (K) – Prohibition of Undisclosed Coverage Limitations No Strike Strike in entirety None All coverages have limitation endorsements. None of the coverage forms or endorsements utilized in WFC’s risk financing program are subject to the review and approval of any third party. 3.2.11.2 (M) – Pass Through No Strike Strike in entirety None WFC cannot agree to any language in a contract that stipulates what kind, type, or limit of coverage it’s subcontractor’s should carry. 3.2.11.2 (O) – Self Insured Yes – With Modification Replace Strike in entirety and replace with WFC standard right to Self- Insure language (O) Captive or Self- Insurance. Contractor may satisfy any or all of the above insurance requirements by use of self-insurance, deductible, and/or a captive insurance company (and the rating requirements set forth in Section 3.2.11.2 (E) above are not applicable to Contractor’s self- insurance or to policies issued by a captive insurance company). The responsibility to fund any financial obligation for self- insurance, the election not to insure, and the amount of any deductible are assumed by, for the account of, and at the sole risk of each party. The application of coverage within this self-insurance, election not to insure, and/or deductible is deemed covered in Item 2B-117 Wells Fargo Treasury Management City of Palm Desert | 93 Section — Item Can we Comply Action Language Replacement Comments/Rationale accordance with the policy forms set forth in this Section 3.2.11. 3.2.11.2 (P) – Timely Notice No Strike Strike in entirety None WFC is a large organization and is involved in claims/disputes all the time that are confidential in nature. Due to confidentiality, we may not be able to comply with this provision. Item 2B-118 Appendix Pricing proposal ....................................................................................................... Tab A Community fact sheets ....................................................................................... Tab B Sample implementation schedule .................................................................. Tab C Sample reports and statements ...................................................................... Tab D Public Funds-Collateralization ........................................................................... Tab E Wells Fargo Securities, LLC ................................................................................. Tab F Money Market Mutual Fund prospectus and fact sheets ................... Tab G Disclosures ................................................................................................................ Tab H Account agreements and service descriptions ........................................... Tab I Item 2B-119 A Message from Your Relationship Manager, Jamie O’Connell Thank you for the opportunity to review banking services for the City of Palm Desert (the City). This is a big decision, and I want to make sure I have fully explained Wells Fargo’s position on our quotes, services included, and enhancements we can offer you in the future. Our goal is to earn your business and show you that Wells Fargo is the obvious choice for you. The City has an opportunity to increase efficiencies, minimize risk, and streamline its automation processes. We are providing an example of services and volumes you are using today and noticed some areas where we believe we can add value to the agency’s financial goals. Upon award of the business, Wells Fargo would like to offer the City a $15,000 transition allowance subject to the services requested, which can be used in the first 12 months after account opening. This credit may be used at your discretion and can be applied to analysis fees or banking supplies needed to transition. The pricing elements offered are locked in for the five-year term you requested and the earnings credit rate (ECR), currently 1.15%, is a variable rate subject to change based on market conditions and bank discretion. As rates fluctuate in the coming years, your analysis fees may be covered with the average balances you maintain today. We can also set the City up for quarterly analysis which could apply months of excess balances to months that may have a deficit. You may also find value in adding an investment sweep option to your checking account to maximize liquidity and earn dividends on your operating balances. We are confident you will find value in our technology and automation services. Wells Fargo has a dedicated Government Banking group, and I have worked with the public sector for the last 16 years of my career. We understand the industry and have access to multiple experts in their field to offer advice on an array of financial services the City may find of value. While reviewing the RFP, we noticed that some volumes were included in the bid sheet, but then removed when the Q & A was received. Volumes for your current activity are always important to consider in an RFP response. If you have higher volumes of cash and lower volumes of checks deposited, those are areas we look for discounts when reviewing pricing. If you have very little cash, then those price points would not have a great effect on your overall quote. We did our best to use the volumes you first gave us and incorporated your answers from the Q & A response. If there are any volumes you would like me to confirm, please let me know and I can review in the next stage. During the Q & A period, it was discovered that Palm Desert has a total of 9 accounts. We disclose the potential fees on our proforma document, and assume the balances listed in your recoupment fee are inclusive of all accounts. Our proforma document includes the balances of $15 million which is used to calculate the offsetting earnings credit. It was also mentioned that each account reviews its own fee individually, but when selecting a key account, that incorporates all balances applied in all accounts and can help support accounts with lower balances. With an ECR of 1.15% today, your balances put you in an excess position to either sweep for investments or try new services that can help make the City more efficient. You may also elect to sweep all balances and allow your transition allowance of $15,000 to waive fees as you transition. This would maximize your interest earned in the current interest rate environment. Item 2B-120 Sweep options: When adding this option, balances are swept off balance sheet to an approved Government State code option, and in turn, reduces your recoupment fees while maintaining liquidity. We can present additional scenarios if chosen as a finalist. For more information regarding the money market mutual fund investment sweep options, you may obtain a current prospectus for the money market mutual fund by visiting: www.allspringglobal.com/investments/mutual-funds/rate-reports/stagecoach-sweep.html. We have a wide footprint of branch locations to serve the residents and employees of Palm Desert. We have 3 branches located within city limits, including the branch located on El Paseo, Desert Gateway on Monterey Ave., and the Tri-City location located on Country Club Dr. I have worked with many businesses and bankers in the Coachella Valley over the years, and my government customers in the area make in-person meetings easy to accomplish. Every customer is unique and with that they have unique needs — we understand that. Our job is to build a strong foundation of services that focus on efficiency and risk management, and from there introduce new ideas to strategize and address areas of opportunity. Because we only work with government agencies like the City, we can pull from experiences, challenges, and efficiencies that other agencies have faced, and be true consultants for you. We have attached the RFP response and submitted the bid form as requested. We also included separate proforma documents that show potential fees that may be present if certain services are activated, reversed, or were not included on your bid sheet. We have added additional volumes based on the services included in your RFP to provide a more accurate picture of your estimated monthly service fees. These are notated in the Wells Fargo Treasury Management Pro Forma documents. Item 2B-121 While reviewing the activity listed in annual numbers and responses during the Q & A, we wanted to point out areas that we quoted, but may fluctuate in the analysis environment. For example: • The proforma documents we created are a monthly view of the estimated activity provided in the RFP. We were not provided with account analysis statements from your current bank, which helps us confirm the average monthly volumes. • ACH activity — You stated that the City has bi-weekly payroll and a vendor payment file up to $4MM. We priced out 3 ACH ID’s and included activity for submitting a prepaid file or same day file. • Balances — We use balances of $15 million. The recoupment fee charges are about $1,900 through analysis on $15MM. Wells Fargo collateralizes all government deposits by 110%, and there is no fee for collateralization. • Cash Vault — The City isn’t using an armored vendor today, but we included pricing through branch deposits, or when the Wells Fargo fees look like if you obtained an armored car vendor for cash pick-ups. • Other elements — To compare with other bids, we left your bid sheet intact. We list all other possible elements in our proforma documents to align with your services requested today. Wells Fargo will work with you as your strategic partner as your needs evolve. We welcome the opportunity to review any future services and pricing scenarios that may be more customized to the City’s needs. Investments at Palm Desert — Working with Wells Fargo, you have access to many experts in the Government Banking network. The City could review services with our investment brokers that can offer advice on Government options to increase your yields per California State code. Our brokerage department also provides safekeeping on the trades that they conduct. RFP elements and volumes considered This quote is based on the numbers you provided and information obtained during the Q & A period. This includes: • Balances — We used $15M in balances based on the average provided on the bid sheet and Q & A response. Balances and activity will fluctuate but this is a good estimate of what to expect. The current balances and rate environment allow the City to adapt other services that you may have been considering; or apply excess balances to a sweep option for an investment. • *With a sweep option, balances are swept to the government money market option of your choice, and in doing this, the city does not accrue recoupment fees on those balances. If balances are swept, those earn interest in the investment option, but are excluded in calculating the earnings credit allowance. • Account structure — This includes pricing for 9 accounts to compare what you have today. • Zero Balance Account (ZBA) — For the quote, we priced out one ZBA “master” account, and one other ZBA account based on the response. Item 2B-122 • Returned items with redeposit instructions — We can accommodate your returned item instructions and offer images with a report so you can respond quickly to items that are being returned unpaid. You may elect two attempts before marking an item returned. • Positive Pay with Payee Validation — The City will send us the check file so we can perform a positive pay match across all departments of the bank. Payee Validation will pick up the payee information to prevent fraud. We’ll notify you of unmatched items for a decision and recommend a default of return. • ACH Fraud Filter — We offer ACH Fraud Filter (stop) and ACH Fraud Filter (review). If the City expects no vendor activity on the account, we can block all debits from attempting. If an account has approved vendors listed, we can add ACH Fraud Filter review and all unfamiliar ACH attempts would be presented to you for decision — pay or reject. Default return is recommended. We include the cost of this on bid sheets and potential services but recommend this on all 9 accounts to prevent electronic fraud. • Wire transfers — Wires are sent through our online banking portal and require dual custody. We detail the cost of incoming and outgoing wires. Value-added services to consider The following services represents recommendations to the City that may create synergies and efficiencies to your current and future processes. These recommendations come from experience working with your peers and recent events. We are more than willing to discuss these in greater detail during finalist process and/or at the City’s request. Pricing (if any) for the recommended services will be provided upon further discussion and scoping. When reviewing updated solutions, keep in mind the efficiencies that will improve the workload on the finance staff. Should you elect to move forward with Wells Fargo, we want to share some of our best in class services that other cities are utilizing today. • Commercial Card — Wells Fargo offers an all-in-one expense tool that encompasses purchasing card, automated payables with dual controls, vendor outreach to promote adoption, an employee expense tool for reimbursement, receipt imaging, and a revenue share option back to the agency. Our team conducts an in-depth analysis of your payables process and works with you to develop a strategy to maximize efficiencies. **This service is subject to credit approval and vendor analysis. • Wells Fargo Electronic DepositSM — This service is another option to process your check payments in-house. It is our version of image cash letter and can process check payments at a higher speed. • Image File Import — Our solution is automated and housed within our online banking platform. The agency can access a file with all their paid checks and images. This file could save you time researching paid checks and allow you to pull the images quickly. It will require IT resources. This service replaces the bulky outdated CD-ROM service. Item 2B-123 • Payment Authorization — For accounts that expect no check writing, we recommend placing a $0.00 payment authorization flag on it. This will reject paper items if the account number is compromised. Should the need change in the future, the City may adjust this limit to include a dollar limit to never exceed a certain threshold. This is an alternative solution to positive pay for accounts with no check issuance. • Previous Day Report — This service is linked to your accounts to give users additional details about the transactions that come into the accounts. We provide 120 days of storage to allow users to research additional details with their own access. • CEO alerts — For any service that requires approval, additional monitoring, or fraud prevention, there are alerts that users have access to and can set up based on their preference. Attached, you will see a proforma document that uses your balances to offset fees. With your balances and current rates, you have an opportunity to make vast improvements in your efficiencies, while maximizing your returns. We would like the opportunity to review some of these elements quoted in greater detail and provide clarification if needed. By choosing Wells Fargo, you are selecting an innovator in banking technology. When you are comfortable with in-person visits, we will provide the City a full, complimentary Business Process Review to identify ways to help streamline your efficiencies further. As your relationship manager, it will be my honor to grow our relationship over time and assist with future enhancements the City needs. As technology progresses, so will your payment options. Once this RFP period has closed, it would be my pleasure to go over any of these details or address additional questions you may have regarding our services. We look forward to working with the City of Palm Desert in the future. Jamie O’Connell Vice President, Relationship Manager Wells Fargo Bank Government Banking Division Item 2B-124 Request For Proposal #2022-RFP-132 Title: Comprehensive Banking Services Line Item Description Unit of Measure Unit Cost 1 Acct. Maintenance _ Web Monthly 10.00000 2 Full Recon Monthly Maint.Monthly 15.00000 3 Pos Pay Monthly Maint.Monthly 15.00000 4 Transmission Issue Input-Base Each No Charge 5 Transmission Issue Input-Item Each No Charge 6 Check Paid Truncated Each N/A 7 Daily Paid Report Monthly 8.00000 8 Exception Items Returned Each 10.00000 9 Recon Stop Payments_Renewal Each 4.00000 10 Stale Date Feature_Base Monthly No Charge 11 Stale Date Listing_Item Each No Charge 12 Transmission Output_Per TX Each 0.01000 13 Transmission Output_Per Item Each 2.00000 14 Image CD_Rom Each 75.00000 15 Check Capture Each 0.08000 16 Web POS Pay_Account Base Each 15.00000 11. PRICING PROPOSAL The chart below displays monthly averages for most of the common services currently utilized by the City. Please enter proposed pricing for each service. The Bank may also propose pricing for other products and services that the Bank believes would enhance the City's cash management functions. Include proposed service and pricing options not listed below with the proposal attachments. Account Analysis Account Reconciliation Item 2B-125 Request For Proposal #2022-RFP-132 Title: Comprehensive Banking Services Line Item Description Unit of Measure Unit Cost 17 Web POS Pay_Exceptions Each 5.00000 18 Pos Pay_PNI Exceptions Each 5.00000 19 Web POS Pay_Manual Issue Each 0.30000 20 Web POS Pay_Imported Issue Each No Charge 21 Acct. Recon CSV Rpt. Mthly Mnt Monthly 5.00000 22 Acct. Recon CSV Rpt_Per Item Each 0.00500 23 Bank by Mail Deposit Each 0.55000 24 Branch Deposit Each 3.50000 25 Electronic Credit Each 0.10000 26 Telephone Transfer Each N/A 27 Electronic Debit Each 0.10000 28 Bank Statement Web Each No Charge 29 Deposit Admin Fee Each 0.12750 30 Paid Check Charge Each 0.10000 31 ACH Block Each 5.00000 32 UB Checks Serv. CTR Deposit Each 3.50000 33 Encoding Fee _ Serv. CTR. Dep.Each N/A 34 UB Checks-Branch Deposit Each 0.15000 35 Local Clr. Hse./Branch Dep.Each 0.15000 Bank by Mail Business Checking Check Processing Item 2B-126 Request For Proposal #2022-RFP-132 Title: Comprehensive Banking Services Line Item Description Unit of Measure Unit Cost 36 Local Fed Dist 12_Branch Dep Each 0.15000 37 Other Fed_Branch Deposit Each 0.15000 38 Credit Error Notice Each No Charge 39 Direct Send Monthly Base Fee Monthly 15.00000 40 Direct Send Credit Transaction Monthly**0.05000 41 Direct Send NOC Transmission Each 6.50000 42 Direct Send Returns File Each N/A 43 Direct Send Rej/Rev/Del Each 3.50000 44 Input_Data Transmission Each No Charge 45 Addenda Records Each 0.05500 46 Suspends Each N/A 47 ACH File ACK_Email_Direct Send Each No Charge 48 Same Day CR_Client Organization Each 0.50000 49 Automated Order_Web/VRU Each 3.75000 50 Currency Ordered _(000's Each 0.00130 51 Rolled Coin (Individual Rolls Each 0.12000 52 Deposit_Mixed Cash Check Each 3.00000 53 Deposit _ Cash or Coin Only Each 3.00000 54 Currency Deposited_Unstrapped Each 0.00130 55 Deposit Adjustment Each 6.50000 ACH Services Cash Vault Services Item 2B-127 Request For Proposal #2022-RFP-132 Title: Comprehensive Banking Services Line Item Description Unit of Measure Unit Cost 56 Fit Curr Furn _ Partial Strap Each 0.00130 57 Copy of Dep Items Assoc. Fax Each N/A 58 Printer Charges Each 0.01000 59 Deposit Receipt Each N/A 60 EPA Monthly Maintenance Monthly 10.00000 61 EPA Trading Partner Setup One Time 0.00000 62 EPA Filter Maintenance Monthly 10.00000 63 Remote Deposit Monthly Maint Monthly 10.00000 64 Remote Deposit Add'l Acct Each 10.00000 65 Remote Deposit on US Each 0.06000 66 Remote Deposit per Transit Each 0.06000 67 Remote Deposit per Deposit Each 0.55000 68 IOD Monthly Maintenance Fee Monthly No Charge 69 IOD Per Item Fee Each 0.01000 70 Web Prior Day Report Account Monthly 20.00000 71 Web Prior Day Report Account Monthly 20.00000 Commercial Customer Service Customer Service Activities Electronic Payment Authorization Image Check Check Image Information Reporting Item 2B-128 Request For Proposal #2022-RFP-132 Title: Comprehensive Banking Services Line Item Description Unit of Measure Unit Cost 72 Web PD Bal/Sum Updated Each 0.10000 73 Web PD Transactions Updated Each 0.10000 74 Web CD Bal/Sum Updated Each 0.10000 75 Web CD Transactions Updated Each 0.10000 76 Web Current Day Rept. Account Each 20.00000 77 Web Sweep Report Account Monthly 10.00000 78 Image Item Prior Day Statement Each N/A 79 Prior Day Dep. Item Query Each 1.50000 80 Prior Day (Cost Only_2 hours)Each N/A 81 Issue Password _ Bank Each No Charge 82 Web Ri _ Monthly Maintenance Monthly 0.00000 83 Deposited Items Returned_Chrgbk Each 10.00000 84 Web RI I&D Items Avl for Inq Each N/A 85 Web RI I&D Items Avl for Dec Each 1.00000 86 Deposited Currency Each 0.00300 87 Inquiry & Transfer Service Each 0.16000 88 Web Acct Recon Stop Payment Each N/A Online Business Center Deposited Items Returned Office Cash Services Teleservices Team Stop Payments Item 2B-129 Request For Proposal #2022-RFP-132 Title: Comprehensive Banking Services Line Item Description Unit of Measure Unit Cost 89 Web Stop Payment Renewal Each 4.00000 90 Web Stop Single Inquiry Each 12.00000 91 Web Number Stop Accounts Each No Charge 92 Incoming Domestic Wire Each 10.00000 93 Internal Wire Each 4.00000 94 Acct Transfer End_of_Day/Web Monthly 0.10000 95 Wire Transfer Monthly Fee/Web Monthly No Charge 96 Outgoing Dom Wire_Web Each 4.00000 97 Internal Book Transfer_Web Each 4.00000 98 Concentration Account Monthly 10.00000 99 Multi_Level Subsidiaries Monthly 5.00000 ** Direct Send Credit Transaction's Unit of Measure should be "Each." We have mapped over our ACH Future Dated Per Item fee. Wire Transfers Incoming Electronic Wire Transfer Outgoing Electronic Wire Transfer Outgoing Total Proposed Monthly Recurring Cost Estimates Item 2B-130 Treasury Management Pro Forma City of Palm Desert Pricing as of September 2022 ANALYSIS SUMMARY Average Positive Collected Balance $15,000,000.00 Reserve Requirement @ 0.00%$0.00 Investable Balance Available for Services $15,000,000.00 Monthly Analyzed Charges $3,797.46 Earnings Allowance @ 1.15%$14,178.08 Net Monthly Analyzed Charges (EXCESS)$10,380.62 *Monthly Fee Based Charges $0.00 Total Monthly Analyzed Charges $0.00 *Charges not offset by balances SERVICE DETAILS WF AFP Service Code Code Service Description Unit Price Volume Charges BALANCE & COMPENSATION INFORMATION IAMTH 000230 RECOUPMENT MONTHLY 0.12750 15,000 1,912.50 BALANCE & COMPENSATION INFORMATION Subtotal 1,912.50 GENERAL ACCOUNT SERVICES 22051 010000 ACCT MAINTENANCE 10.00000 9 90.00 DS510 010020 ZERO BALANCE MASTER ACCOUNT MAINT 10.00000 1 10.00 DS001 010021 ZERO BALANCE MONTHLY BASE 5.00000 1 5.00 CK021 010100 DEBITS POSTED 0.10000 45 4.50 15007 010101 DESKTOP DEPOSIT-DEPOSIT CREDITED 0.55000 21 11.55 GENERAL ACCOUNT SERVICES Subtotal 121.05 DEPOSITORY SERVICES CK161 100006 CASH DEPOSITED IN WF BRANCH 0.00300 5,391 16.17 08173 100100 CASH VAULT DEPOSIT 3.00000 0 0.00 CK064 100416 CEO RETURN ITEM SERVICE MTHLY BASE 0.00000 3 0.00 CK061 100400 RETURN ITEM - CHARGEBACK 10.00000 1 10.00 34236 100416 CEO RETURN DECISIONING PER ITEM 1.00000 1 1.00 08052 100006 BRANCH DEPOSIT 3.50000 36 126.00 08110 100144 CASH VAULT COIN ROLLS FURNISHED 0.12000 0 0.00 08416 100199 CASH VAULT CURRENCY FURNISHED 0.00130 0 0.00 08290 100199 CASH VAULT CURRENCY/COIN DEPOSITED 0.00130 0 0.00 08160 100501 CASH VAULT DEP - ADJUSTMENT 6.50000 0 0.00 08181 100141 CASH VAULT ORDER - AUTOMATED 3.75000 0 0.00 08025 100015 MISCELLANEOUS CREDITS POSTED 0.55000 0 0.00 002 100225 DEPOSITED CHECK 0.15000 193 28.95 706 100224 DESKTOP DEPOSIT-DEPOSITED ITEM 0.06000 322 19.32 DEPOSITORY SERVICES Subtotal 201.44 Pro Forma Item 2B-131 WF AFP Service Code Code Service Description Unit Price Volume Charges PAPER DISBURSEMENT SERVICES DS191 150122 PAYEE VALIDATION STANDARD-ITEM 0.01000 299 2.99 22030 150412 STOP PAYMENT - AUTO RENEWAL 4.00000 29 116.00 22222 150810 PRINTING & SUPPLIES-VENDOR 0.01000 32 0.32 12812 151352 CEO IMAGE VIEW < 90 DAYS - ITEM 0.01000 2 0.02 22235 150240 OTC DEBIT BLOCK MONTHLY BASE 17.00000 3 51.00 12505 150222 POSITIVE PAY EXCEPTION CHECKS RETND 10.00000 0 0.00 12903 150310 POSITIVE PAY EXCEPTIONS - ITEM 5.00000 0 0.00 12907 150030 POSITIVE PAY MONTHLY BASE 15.00000 2 30.00 12681 150030 POSITIVE PAY ONLY MONTHLY BASE 17.00000 4 68.00 MD091 150240 PYMT AUTH MAX CHECK MTHLY BASE 17.00000 3 51.00 12670 150410 STOP PAYMENT - ONLINE 12.00000 2 24.00 22202 150100 DDA CHECKS PAID 0.10000 299 29.90 64104 151350 IFI MAINTENANCE PER PRODUCT 75.00000 1 75.00 64101 151354 IFI PAID CHECKS - IMAGE 0.08000 299 23.92 PAPER DISBURSEMENT SERVICES Subtotal 472.15 PAPER DISBURSEMENT RECON SERVICES 34337 200201 CEO CHECK ISSUES-ITEM 0.30000 3 0.90 12377 200201 ARP FULL RECON-ITEM 0.12000 1,566 187.92 12060 200010 ARP MONTHLY BASE - FULL 15.00000 2 30.00 12430 200301 ARP OUTPUT - TRANSMISSION 2.00000 1 2.00 34350 200306 CEO ARP STMT & RPTS MONTHLY BASE 8.00000 2 16.00 12694 200100 OUTGOING TRANSMISSION - PER ITEM 0.01000 298 2.98 PAPER DISBURSEMENT RECON SERVICES Subtotal 239.80 GENERAL ACH SERVICES CK018 250201 ELECTRONIC CREDITS POSTED 0.10000 52 5.20 ES280 250000 ACH MONTHLY BASE 15.00000 3 45.00 ES211 250102 ACH FUTURE DATED ITEM 0.05000 416 20.80 ES216 250102 ACH SAME DAY 0.50000 36 18.00 ES206 250120 ACH ORIGINATED - ADDENDA REC 0.05500 47 2.59 ES254 250501 ACH ORIGINATION/REJECT DATA - FILE 3.50000 0 0.00 ES344 250202 ACH RECEIVED ITEM 0.10000 96 9.60 ES801 250501 ACH TRANSMISSION CHARGE 2.00000 4 8.00 34333 251050 ACH CEO FRAUD FILTER REVIEW MO BASE 10.00000 9 90.00 34335 251053 ACH CEO FRAUD FILTER REVIEW - ITEM 5.00000 0 0.00 06525 250302 ACH NOC - ELECTRONIC 6.50000 0 0.00 GENERAL ACH SERVICES Subtotal 199.19 WIRE & OTHER FUNDS TRANSFER SERVICE ES030 350300 WIRE IN TO USA ACCT-USA DOMESTIC 10.00000 5 50.00 ES141 350120 WIRE BOOK TRANSFER CEO/API 4.00000 1 4.00 ES139 350100 WIRE OUT DOMESTIC CEO/API 4.00000 3 12.00 WIRE & OTHER FUNDS TRANSFER SERVICE Subtotal 66.00 Pro Forma Item 2B-132 WF AFP Service Code Code Service Description Unit Price Volume Charges INFORMATION SERVICES 34421 400272 ARP STMTS & RPTS (CSV/EXCEL) / ITEM 0.00500 1,566 7.83 34420 400051 ARP STMTS & RPTS (CSV/EXCEL) BASE 5.00000 2 10.00 34123 40022Z CEO ALERTS SERVICE - EMAIL 0.04000 21 0.84 34121 400274 CEO INTRADAY REPORTING ITEMS RPTD 0.10000 527 52.70 34120 400055 CEO INTRADAY REPORTING SUBSCRIPTION 20.00000 9 180.00 34115 400271 CEO PREV DAY REPORTING ITEMS LOADED 0.10000 1,338 133.80 34100 400052 CEO PREV DAY REPORTING SUBSCRIPTION 20.00000 9 180.00 27707 400340 CEO SEARCH 0.16000 1 0.16 15017 400003 DESKTOP DEPOSIT MONTHLY BASE 10.00000 1 10.00 INFORMATION SERVICES Subtotal 575.33 INVESTMENT/CUSTODY SERVICES 34110 450405 SWEEP ACCOUNT POSITION REPORT 10.00000 1 10.00 INVESTMENT/CUSTODY SERVICES Subtotal 10.00 SETUP CHARGES 12021 200410 ARP SET UP 0.00000 2 0.00 PAPER DISBURSEMENT RECON SERVICES Subtotal 0.00 ES201 251000 ACH SET UP 0.00000 3 0.00 06094 251001 ACH FRAUD FILTER - SET UP 0.00000 9 0.00 GENERAL ACH SERVICES Subtotal 0.00 18325 359999 WIRE ACCOUNT ADD CEO/API 0.00000 3 0.00 WIRE & OTHER FUNDS TRANSFER SERVICE Subtotal 0.00 Total Analyzed Charges 0.00 *Total Fee Based Charges 0.00 Total Service Charges 0.00 Pro Forma Item 2B-133 Disclosures We created this proposal for you based on our understanding of your requirements and the services in which you expressed interest. This proposal confirms the deposit and treasury management services and the pricing we plan to provide you based on certain assumptions including projected volumes and other relevant information you provided. This document is confidential. Please do not share it without first obtaining our written permission. The services and pricing contained in this proposal are valid for 90 days. The pricing is subject to change if the actual volume or scope of services differs from the assumptions upon which we based the pricing. Please let us know if you believe this proposal does not accurately represent the prices or services we discussed with you. If you have questions about the services in this proposal, please contact your Treasury Management Sales Consultant or visit: www.wellsfargo.com/accountanalysis for additional information about the services. Regarding your services Alerts Service Charges are assessed against the volume of Alerts per user, per company, per month basis. Users are only charged for the first 80 events/alerts per month, per delivery mechanism (email or text). There is no per company cap for billing. Wire Book Transfer A CEO Wire book transfer is between two accounts initiated via CEO Wires Book Transfer workflow. A Payment Manager Book transfer is charged when the debit and credit accounts are setup in a single CEO Company id and entitled to Book Transfer. Services with No Volumes Services listed with zero volume are not included in the estimated monthly analysis fee but are included in the event the service is used in the future. This message may contain confidential and/or privileged information. If you are not the addressee or authorized to receive this for the addressee, you must not use, copy, disclose, or take any action based on this message or any information herein. If you have received this message in error, please advise the sender immediately by reply email and delete this message.Thank you for your cooperation. © 2022 Wells Fargo Bank, N.A. All rights reserved. Not intended for public distribution. Pro Forma Item 2B-134 Wells Fargo Treasury Management Pricing City of Palm Desert Pricing as of September 2022 WF AFP Code Code Service Description Charge Basis Price ACH Fraud Filter 34334 251050 ACH CEO FRAUD FILTER STOP MTHLYBASE Account 10.00000 34338 251052 ACH CEO FRAUD FILTER STOP - ITEM Transaction filtered 5.00000 34335 251053 ACH CEO FRAUD FILTER REVIEW - ITEM Transaction filtered 5.00000 ACH Origination 34342 250400 ACH CEO RETURN SUBSCRIPTION - ITEM Item accessed 0.20000 34340 250400 ACH CEO RETURN SUBSCRIPTION-ACCOUNT ACH company ID 10.00000 ES216 250102 ACH SAME DAY Transaction 0.50000 ES206 250120 ACH ORIGINATED - ADDENDA REC Addenda record 0.05500 ES254 250501 ACH ORIGINATION/REJECT DATA - FILE Batch/file 3.50000 ES230 250620 ACH DELETE - ITEM Delete 10.00000 ES361 250642 ACH REVERSAL - ITEM Reversal 10.00000 06525 250302 ACH NOC - ELECTRONIC Transaction 6.50000 ES231 250620 ACH DELETE/REVERSE - BATCH/FILE Batch/file 15.00000 06505 250302 ACH RETURN ADMIN -ELECTRONIC Return 6.50000 06502 250302 ACH RETURN ITEM-ELECTRONIC Return 6.50000 ES240 250310 ACH RETURN ITEM-REDEPOSITED Transaction 6.50000 ES362 250311 ACH RETURN ITEM - DISHONORED Transaction 6.50000 06507 250312 ACH RETURN UNAUTHORIZED -ELECTRONIC Return 6.50000 06511 250312 ACH RETURN UNAUTHORIZED QUALITY FEE Return 5.00000 ES339 251010 ACH SPECIAL INVESTIGATION Inquiry 35.00000 06508 251010 ACH COMPLEX SPECIAL INVESTIGATION Hour 210.00000 34285 250703 CEO ACH HYP ITM DET INQ - PER ITEM Inquiry 1.50000 ACH Receive ES344 250202 ACH RECEIVED ITEM Transaction 0.10000 ES349 250220 ACH RECEIVED ADDENDA Addenda record 0.03000 Account Reconcilement 12604 200306 ARP OPTIONAL REPORTS Report 5.00000 12687 209999 ARP AGED ISSUE RECORDS ON FILE-ITEM Record 0.02000 Elements for Disclosure Customer Price Report Item 2B-135 WF AFP Code Code Service Description Charge Basis Price Branch Services 22810 150500 WF CHK CASHED FOR NONACCT HOLDER Check cashed 0.00000 08172 100501 ADJ FOR CASH DEPOSITED IN WF BRANCH Adjustment 13.00000 CK197 100040 CASH ORDER FEE IN A WF BRANCH Transaction 9.00000 CK131 100040 ROLLED COIN FURNISHED BY WF BRANCH Coin roll 0.50000 CK141 100040 CURRENCY FURNISHED BY WF BRANCH Dollar 0.00300 22812 019999 NON ACCT HOLDER CHK CASHING - PAYEE Check cashed 0.00000 Cash Vault 08190 100140 CASH VAULT CASH ORDER-CALL IN Cash order 3.75000 08008 100110 CASH VAULT DEP - ROLLED COIN Coin roll 0.12000 Desktop Deposit/Electronic Check 790 100230 ELECTRONIC DEPOSIT - DEP ADJUSTMENT Adjustment 18.00000 12816 151352 DESKTOP DEPOSIT IMAGES RETRIEVED Image 0.55000 15003 400231 DESKTOP DEPOSIT REPORT PER ITEM Item reported 0.30000 Gen Acct Services Recoupment IAMIB 000230 RECOUPMENT MONTHLY IB Deposit assessment 0.12750 General Account Services CK049 010310 DDA STATEMENT - PAPER Statement 5.00000 08025 100015 MISCELLANEOUS CREDITS POSTED Transaction 0.55000 24250 150340 OVERDRAFT CHARGE-PAID ITEM Transaction 35.00000 CK030 010410 CLIENT ANALYSIS STATEMENT-PAPER Statement 5.00000 CK672 010630 BANK CONFIRMATION AUDIT REQUEST Request 65.00000 CK673 010640 CREDIT RATING AUDIT REQUEST Inquiry 50.00000 22990 401001 PHOTOCOPY CUSTOMER SERVICE - ITEM Photocopy 20.00000 General Disbursement Services 22235 150240 OTC DEBIT BLOCK MONTHLY BASE Account 17.00000 12670 150410 STOP PAYMENT - ONLINE Stop payment 12.00000 12671 150420 STOP PAYMENT - OPERATOR ASSISTED Stop payment 30.00000 12677 150300 MICR CHECK REJECTS >1% THROUGH 2%Reject 0.80000 12678 150300 MICR CHECK REJECTS OVER 2%Reject 1.75000 22225 150240 CHECK CASHING THRESHOLD MO BASE Account 10.00000 22245 150240 CHECKS PAY TO INDIV BLOCK MO BASE Account 10.00000 Image Delivery 12815 151352 CEO IMAGE VIEW > 90 DAYS - ITEM Image retrieved 0.01000 Incoming Wire Transfers ES076 350310 WIRE IN XBDR USA ACCT-USD OR FX Transfer 20.00000 18030 350330 WIRE IN REPAIR Exception 9.00000 Customer Price Report Item 2B-136 WF AFP Code Code Service Description Charge Basis Price Information Reporting 34123 40022Z CEO ALERTS SERVICE - EMAIL Email 0.04000 34128 40022Z CEO ALERTS SERVICE - TEXT Message 0.75000 CS502 400002 BAI MONTHLY BASE Account Aggregate Up to 1 130.00000 Up to 10 70.00000 11+50.00000 CS504 400221 BAI TRANSACTIONS REPORTED Item reported 0.25000 Positive Pay 34336 150724 POSITIVE PAY EXCEPTION - CEO IMAGE Image retrieved 0.50000 12903 150310 POSITIVE PAY EXCEPTIONS - ITEM Exception 5.00000 12682 150120 POSITIVE PAY ONLY - ITEM Check issued 0.03000 12681 150030 POSITIVE PAY ONLY MONTHLY BASE Account 17.00000 12909 150401 POSPAY VERIFICATION CALL-DEPOSITED Call 15.00000 DS194 150299 PAYEE VALIDATION MANUAL REVIEW/ITEM Check 0.25000 12908 150310 POS PAY CHECKS WITH NO ISSUE RECORD Check 0.50000 Returned Items CK062 100416 CEO RETURN ITEM RETRIEVAL-IMAGE Transaction 0.05000 CK065 100404 ADMIN RETURN ITEM - CHARGEBACK Transaction 5.50000 CK066 100404 ADMIN RETURN ITEM-REPAIRED ACH ITEM Transaction 3.50000 CK068 100404 ADMIN RETURN ITEM-REPAIRED AS CHECK Transaction 4.50000 Sweep 22094 450200 SWEEP STAGECOACH MUTUAL FND MO BASE Account 0.00000 22087 450403 SWEEP STAGECOACH MUTUALFND ELECTNIC Statement 0.00000 Wires Origination and Reporting 18901 350115 WIRE OUT XBDR FX CEO/API Transfer 25.00000 ES147 350113 WIRE OUT XBDR USD CEO/API Transfer 30.00000 18602 350560 WIRE INVESTIGATION Investigation 65.00000 18031 350541 WIRE OUT REPAIR Exception 9.00000 Other Non TM ODACT 000210 DAILY USE OF UNCOLL FUNDS-ACCT LVL $ pass through 1.00000 Setup Charges 34375 251120 CEO ACH ORIG NEW CO ID SETUP Setup 0.00000 06092 251001 ACH ORIGINATION NEW COMP ID-SET UP Setup 0.00000 Disclosures We created this pricing list for you based on our understanding of your requirements and the services in which you expressed interest. This price list confirms the deposit and treasury management services and the pricing we plan to provide you based on certain assumptions including projected volumes and other relevant information you provided. This document is confidential. Please do not share it without first obtaining our written permission. The services and pricing contained in this proposal are valid for 90 days. The pricing is subject to change if the actual volume or scope of services differs from the assumptions upon which we based the pricing. Please let us know if you believe this proposal does not accurately represent the prices or services we discussed with you. If you have questions about the services in this proposal, please contact your Treasury Management Sales Consultant or visit: www.wellsfargo.com/accountanalysis for additional information about the services. Customer Price Report Item 2B-137 Treasury Management Proposal WF AFP Monthly Activity Code Code Service Description Charge Basis Price Volume Charges Wells Fargo Payment Gateway (WFPG) MERCHANT CARD SERVICES 41910 070223 PMT GATEWAY MONTHLY BASIC Account 29.00$ 0 -$ 41912 070223 PMT GATEWAY CREDIT CARD TRANS Transaction 0.08$ 0 -$ 41913 070223 PMT GATEWAY ELECTRONIC CHECK TRANS Transaction 0.10$ 0 -$ 41938 070223 OPTIONAL - PMT GATEWAY SUBSCRIPTION TRANS Request 0.03$ 0 -$ 28382 070223 OPTIONAL - ACCOUNT UPDATER REQUEST/RESPONSE Record 0.10$ 0 -$ 41603 070223 OPTIONAL - PMT GATEWAY ACCT UPDATER PER ITEM Request 0.01$ 0 -$ 41934 070223 OPTIONAL - PMT GATEWAY PAYER AUTH TRANSACTIONS Request 0.15$ 0 -$ 41941 070223 OPTIONAL - PAYER AUTH RULES BASED Transaction 0.18$ 41942 070223 OPTIONAL - PAYER AUTH VALUE ADD Transaction 0.25$ 41989 070223 OPTIONAL - PMT GATEWAY NETWORK TOKEN UPDATE Request 0.20$ 0 -$ Monthly Subtotal -$ Setup Charges 41918 070223 PMT GATEWAY SET UP Account 125.00$ 0 -$ 41600 070223 OPTIONAL - ACCOUNT UPDATER SETUP FEE Setup 250.00$ 0 -$ Total Setup Charges -$ WF AFP Monthly Activity Code Code Service Description Charge Basis Price Volume Charges E-Bill Express (EBE) INTERNET PAYMENT INIT PORTAL SVCS 28355 320000 E-BILL EXPRESS QP/LITE MONTHLY BASE Setup 500.00$ 0 -$ QP/LITE - No presentment or summary only. Billers loading a bill file with less than 5,000 bill records loaded per month with no optional services such Account Updater. Only one of the two (High ligthed Blue) is typically need for one setup 28357 320000 E-BILL EXPRESS PROF MONTHLY BASE Setup 1,000.00$ 0 0.00Professional - Standard option for detailed presentment billers, billers loading more than 5,000 bill records per month, or billers using optional services such as Account Updater 28361 320100 E-BILL EXPRESS PAYMENT Payment Incremental 1st 10000 0.50$ 1 0.50$ 10001 to 50000 0.30$ 1 0.30$ 50001 to 100000 0.20$ 1 0.20$ Remaining 0.15$ 1 0.15$ Includes Card, ACH. & Service Fees. No WFPG fees. Interchange fees apply for card and are billed by WFMS. Subtotal 1.15$ Item 2B-138 ELEC BILL & INVOICE PRESENTMENT SVC 28377 310200 E BILL EXPRESS - PER BILL RECORD LOADED Record 0.07$ 0 -$ Capped at 5,000 bill records loaded ($350.00 cap) per month per setup. Monthly bill records include new & updated bills. Biller submits 4500 new bills & submits 1,000 invoice updates, the month total would be 5500. 28364 310502 E-BILL EXPRESS - AR FILE VIA SAFE Transaction 175.00$ 0 -$ OPTIONAL: Monthly Subscription, one charge per month for files M-F. Does not apply to billers manually downloading the AR file from the EBE Admin Portal. Required for Receivables Manager customers - other RM fees apply 28365 310113 E-BILL EXPRESS - BILL FILE VIA SAFE Transaction 15.00$ 0 -$ OPTIONAL: Charged per transmission (daily, weekly, monthly; depending on customer bill cycle). Does not apply if biller manually uploads bill file directly to EBE Admin Portal 28376 310204 E-BILL EXPRESS CREDIT MEMOS Account 250.00$ 0 -$ OPTIONAL: Credit memos treated as negative invoice and count towards bill record loaded fees. 28363 310601 E-Bill Express Account Updater Request/Response Transaction 0.10$ -$ OPTIONAL: A volume of 1 per request & a volume of 1 per positive response 28390 310200 EBILL EXPRESS ELEC DOC RETRIEVAL Transaction 250.00$ 4 1,000.00$ OPTIONAL: EID is billed with a monthly volume of 4. 28325 310001 E-BILL EXPRESS IVR BASE Setup 550.00$ 0 -$ OPTIONAL 28362 310423 E-BILL EXPRESS IVR PER MINUTE Minute 0.30$ 0 -$ OPTIONAL: Assume 8 minutes per payment 28385 310001 E-BILL EXPRESS TEXT BASE Setup 200.00$ 0 -$ 28384 310205 EBILL EXPRESS PER TEXT FEE Transaction 0.04$ 0 -$ 28391 310601 EBILL EXPRESS RECUR PYMNT MIGRATION Setup 7,000.00$ 0 -$ THIS IS A CUSTOM EXPORT OR IMPORT OF RECURRING BILLING DATA INTO OR OUT OF E- BILL EXPRESS Subtotal 1,000.00$ Total Monthly Activity Charges 1,001.15$ Item 2B-139 WF AFP Monthly Activity Code Code Service Description Charge Basis Price Volume Charges 28350 310601 E-BILL EXPRESS QP/LITE SETUP Setup 2,500.00$ 0 -$ QP/LITE - No presentment or summary only. Billers loading a bill file with less than 5,000 bill records loaded per month with no optional services such Account Updater. Only one of the two (High ligthed Blue) is typically need for one setup 28351 310601 E-BILL EXPRESS PROFESSIONAL SETUP Setup 4,000.00000 0 0.00 Professional - Standard option for detailed presentment billers, billers loading more than 5,000 bill records per month, or billers using optional services such as Account Updater 28320 310601 E-BILL EXPRESS IVR SETUP Setup 2,500.00$ 0 -$ OPTIONAL: Includes up to 10 prompt recordings. Additional fees apply if further customization is needed. If customer wants to do English & Spanish they would be setup with one IVR (800#) with the option to have their payers switch to Spanish. There would be one monthly maintenance fee and one setup fee. If they request any customization to the language, there could be additional custom development fees. 28363 310601 E-Bill Express Account Updater Setup 500.00$ 0 -$ OPTIONAL: Set-up is billed as Element ID: DDA28363 with a volume of 2 28392 310601 OPTIONAL: E-Bill Express Single Sign-on Setup 3,000.00$ 0 -$ 28392 310601 Real-Time Post Back Setup Fee Setup 3,000.00$ 0 -$ OPTIONAL: RTBP only bills for the setup and does not have a monthly base. 28392 310601 E-Bill Express Electronic Document Retrieval Setup Fee Setup 3,000.00$ 0 -$ 28388 310601 EBILL EXPRESS API SETUP Setup 6,000.00$ 0 -$ Real time push of Invoice data to EBE from Customer back end system. Per record upload fee still applies. 28363 310601 E-BILL EXPRESS CUSTOM SERVICES Hour 250.00$ 0 -$ Total Setup Charges -$ Item 2B-140 Disclosu We created this proposal for you based on our understanding of your requirements and the services in which you expressed interest. This proposal confirms the deposit and treasury management services and the pricing we plan to provide you based on certain assumptions including projected volumes and other relevant information you provided. This document is confidential. Please do not share it without first obtaining our written permission. The services and pricing contained in this proposal are valid for 90 days. The pricing is subject to change if the actual volume or scope of services differs from the assumptions upon which we based the pricing. Please let us know if you believe this proposal does not accurately represent the prices or services we discussed with you. If you have questions about the services in this proposal, please contact your Treasury Management Sales Consultant or visit: www.wellsfargo.com/accountanalysis for additional information about the services. Regarding your services Services with No Volumes Services listed with zero volume are not included in the estimated monthly analysis fee but are included in the event the service is used in the future. This message may contain confidential and/or privileged information. If you are not the addressee or authorized to receive this for the addressee, you must not use, copy, disclose, or take any action based on this message or any information herein. If you have received this message in error, please advise the sender immediately by reply email and delete this message.Thank you for your cooperation. © 2022 Wells Fargo Bank, N.A. All rights reserved. Not intended for public distribution. Item 2B-141 Initial Below Principal Name 1 Principal Name 2 Principal Name 3 Principal Name 4 © 2021 Wells Fargo & Company. All rights reserved. WFB0822c 3326333File#:08/26/2022 12:33:18 PM Page 1 of 5 Wells Fargo Merchant Services, L.L.C. ( "WFMS" ) Pricing Terms for City of Palm Desert Form# 04608/26/2022Proposal Date: Todd ReedSales Consultant: $15,863,568 Credit Card Volume $126Average Transaction Size 1Number of Locations InternetAnticipated Interchange (11) Levels 9399MCC Code N/AAmerican Express® Industry Type YesDiscover® Network Card Program FRAME/INTERNETCommunications Method WFPGInternet Gateway Interchange + RatePricing Option 020 089/077/317/9H4 GOVERNMENT SERVICES, NOT ELSEWHERE MCC Code Description Credit Card Processing Fees (1) Interchange Plus the following fees: On Gross Visa®, MasterCard®, Discover® Network Card and American Express® Sales 0.15% Electronic Benefits Transfer (EBT) & PIN Debit Processing Fees NOT APPLICABLE $0.00 One Time Total Fees $10.00 Monthly Total Fees $0.00 Annual Total Fees See Other Fees based on your account activity table belowOther Fees based on your account activity The above table is for your convenience only and is not intended to set forth all fees that may be associated with your merchant account. Regardless of your transaction volume you will be responsible for the One Time Total Fees, Monthly Total Fees, Annual Total Fees, Other Fees based on your account activity (as set forth in the table above) and Processing Solution Fees. The fees associated with the table above are defined below. Please review this entire pricing summary, along with the Additional Services page, for a comprehensive list of your fees. Applicable Fee Schedules: Payment Networks Qualification Matrix https://www.wellsfargo.com/biz/interchangeplus Payment Networks Pass-Through Fees https://wellsfargo.com/biz/merchantpassthroughfees Merchant Statement Fee Description Glossary https://www.wellsfargo.com/interchangefeeglossary Dues, assessments and pass-through fees are disclosed in the schedules referenced above. Fee schedules are updated periodically. To obtain the current applicable fee schedules, as well as a glossary of fee descriptions that may appear on your merchant statement, please refer to the URLs above for more information. If you have questions or cannot access the schedules, please contact your Merchant Card Representative and request that a copy of the applicable fee schedules be mailed or faxed to you. As noted in your Merchant Agreement, Payment Networks change their rates/fees from time to time. They are likely to revise rates/ fees in April and October, but this timing is subject to change. To learn more about impacts to fee schedules resulting from Payment Network changes, please visit the URLs above or request an updated schedule. Item 2B-142 Initial Below Principal Name 1 Principal Name 2 Principal Name 3 Principal Name 4 © 2021 Wells Fargo & Company. All rights reserved. WFB0822c 3326333File#:08/26/2022 12:33:18 PM Page 2 of 5 One Time Fees Set-Up Fees $0.00 per location Equipment Installation Fee $0.00 Terminal Reprogramming Fee (Terminal)0# of Terminals: $0.00 per terminal Integrated Terminal Swap Fee for PIN Injection 0# of Terminals: $0.00 per terminal Swap Fee for PIN Injection 0# of PIN Pads: $0.00 per PIN Pad Card Imprinter Option 0# of imprinters: $0.00 per imprinter Rush Shipping Option $0.00 One Time Total Fees $0.00 Monthly Fees Monthly Service Fee $0.00 per location Statement Billing Fee (Paper Statement) (7) $10.00 PCI Compliance Service Program Fee (8) $0.00 per location Monthly Total Fees $10.00 Annual Fees Annual Fee $0.00 per location Annual Compliance Support Fee (5) $0.00 per location Annual Total Fees $0.00 Other Fees based on your account activity Authorization/EDC Fee – Visa, Mastercard, Discover Network Card (Credit and Non-PIN Debit) (3)0.00$ per attempt Authorization/EDC Fee – American Express (Credit and Prepaid) (3) $0.00 per attempt American Express EDC and Discover EDC Authorization (6) $0.22 per attempt American Express EDC and Discover EDC Capture Fee $0.03 per attempt Electronic Address Verification Service Fee 0.05 $per attempt Voice Authorization Fee $0.75 per attempt Voice (Manual) Address Verification Fee $2.00 per attempt Monthly Minimum Processing Fee(9) $0.00 per month Incoming Chargeback Fee(2) $10.00 per incoming chargeback Incoming/Outgoing Exception Chargeback Fee(2) $10.00 per exception chargeback Chargeback Fax / Mail Fee(18)$10.00 per Fax / Mail response Non-validation PCI Compliance Fee (8) $25.00 per location, per month GeP Services Fee Visa/Mastercard (refunds, credits, returns and chargebacks are independent transactions) 1% per transaction GeP Services Fee American Express(refunds, credits, returns and chargebacks are independent transactions) 0% per transaction Other Fees based on your account activity Total Fees Based on account activity Item 2B-143 Initial Below Principal Name 1 Principal Name 2 Principal Name 3 Principal Name 4 © 2021 Wells Fargo & Company. All rights reserved. WFB0822c 3326333File#:08/26/2022 12:33:18 PM Page 3 of 5 Processing Solutions Type Quantity Financing Method Total w/o TAX WFPG 1 CUSTOMER OWNED $0.00 (1) Clients may elect to participate in the Discover Network Card program or the Discover EDC program, but not both. Under the “Discover Network Card program,” Clients receive all Discover-related authorization, processing and settlement services from WFMS. Under the “Discover EDC program,” Clients enter into a direct agreement with Discover, and WFMS provides only authorization and capture services related to Discover Network Cards. Clients may also elect to participate in the American Express program or the American Express EDC program, but not both. Under the “American Express program,” Clients receive all American Express-related authorization, processing and settlement services from WFMS. Under the “American Express EDC program,” Clients enter into a direct agreement with American Express, and WFMS provides only authorization and capture services related to American Express Cards. In all cases, any services provided by WFMS for Discover and American Express transactions are subject to the terms of Client’s Agreement with WFMS. (2) Client acknowledges and understands that an authorization only indicates the availability of the Cardholder's credit at the time the authorization is requested. It does not warrant that the person presenting the card is the rightful Cardholder, nor is it an unconditional promise or guarantee that Client will not be subject to a chargeback or debit. A chargeback fee applies to all chargebacks processed by WFMS. (3) Authorization/EDC Fee applies to Visa and Discover Network Card credit authorizations, all Visa, Mastercard, Discover Network Card and American Express approvals (pre-authorizations, authorizations and authorization reversals), denials, batch inquiries, batch entry transactions and includes any transaction fees and capture fees. This fee does not apply to Discover EDC and American Express EDC. (5) The Annual Compliance Support Fee will be assessed and deducted from Client's Settlement Account at each anniversary date after the effective date. (6) American Express EDC/Discover EDC Authorization Fees apply to all approvals (pre-authorizations, authorizations and authorization reversals), denials, batch inquiries and batch entry transactions. (7) The monthly Statement Billing Fee can be waived if Client elects to access the monthly statement through Business Track or the Clover Dashboard instead of receiving a paper copy by mail. Once enrolled online, please contact Customer Service at 1-800-451-5817 to request that paper statements no longer be mailed. If online access is terminated by Client or as a result of at least 180 days of online inactivity, paper statements will be reinstated with the applicable monthly Statement Billing Fee. For information about online enrollment, please see Additional Services or contact Customer Service. (8) The monthly PCI Compliance Service Program Fee and Non-validation PCI Compliance Fee are part of the mandatory PCI Compliance Service Program. These fees apply to Level 3 and Level 4 Clients who utilize, a card not present, a gateway or value added reseller (VAR). The program includes access to SecureTrust, a PCI Compliance solution to help Client comply with the Payment Card Industry Data Security Standards (PCI DSS) requirements. Clients are required to register and complete a PCI DSS certification process by visiting https://pci.securetrust.com/wellsfargo. If Client does not comply or fails the PCI DSS certification process, Client will be charged a monthly Non-validation PCI Compliance Fee until the account becomes compliant. (9) If the total discount fee billed to the Client for Visa, Mastercard, Discover Network Card and American Express transactions in one month is less than the Monthly Minimum Processing Fee, then an additional fee will be charged to the Client equal to the Monthly Minimum Processing Fee less the total discount fee. (11) American Express charges Program Pricing fees and not interchange. Program Pricing fees and interchange fees are subject to change. (18) If Client elects to respond to a Chargeback via fax or mail, a dispute fee will be assessed for each response submitted. Business Track Dispute Manager and Clover Disputes are available as an online option at no additional cost. If not already enrolled, Client can self-enroll by logging into BusinessTrack.com and accessing Dispute Manager or logging into their Clover Dashboard and choosing Clover Disputes. If Client does not follow proper authorization procedures, a $50 chargeback handling fee will be assessed on Mastercard transactions. Item 2B-144 Initial Below Principal Name 1 Principal Name 2 Principal Name 3 Principal Name 4 © 2021 Wells Fargo & Company. All rights reserved. WFB0822c 3326333File#:08/26/2022 12:33:18 PM Page 4 of 5 American Express may Chargeback without first sending an Inquiry any time a Cardmember disputes a charge for any reason other than actual or alleged fraud. If in any three (3) consecutive months, the monthly ratio of Chargebacks (less Chargeback Reversals) to gross Charges (less Credits) exceeds one percent (1%), then an Excessive Chargeback fee for in the amount of $25 per Chargeback will be applied after the "excessive chargeback" threshold has been met. Client will be responsible for any charges assessed by outside third parties that are not disclosed on the proposal. To the extent that this pricing proposal includes pricing for third party products and services, WFMS disclaims legal liability and responsibility for said products and services. Client's agreement with the third party provider shall govern Client's relationship with the third party provider. In the event that WFMS is billed for the third party's services, Client will reimburse WFMS for such services. Client acknowledges and understands that WFMS shall have no responsibility or liability for any third party hardware or software procured and used by Client. To the extent Client has any issues, concerns or liability related to such hardware or software, Client must deal directly with the third party provider from whom Client procured the hardware or software. In no event will WFMS be responsible for any indirect, incidental or consequential damages that Client may incur as a result of using any third party hardware or software. WFMS' proposal and associated pricing is based on the information provided. Any difference to our stated understanding may affect the proposed pricing. Without a signed agreement, this proposal expires 60 days from the proposal date stated above. Rounding. In the event the amount being billed to Client for any line item on this pricing proposal includes a total ending in less than a full cent, WFMS will either round such amount up or down to the nearest cent. Fees for supplies, shipping, handling and applicable sales tax may apply and are subject to change without notice. Additional information will be available upon request. Item 2B-145 © 2021 Wells Fargo & Company. All rights reserved. WFB0822c 3326333File#:08/26/2022 12:33:18 PM Page 5 of 5 IRS Legal Filing Name: Principal Name: Title: Signature: Date: Principal Name: Title: Signature: Date: Principal Name: Title: Signature: Date: Principal Name: Title: Signature: Date: Item 2B-146 Merchant Services Wells Fargo’s point-of-sale solutions Take payments with ease – at the counter, curbside or on the go Choose the equipment that’s right for your business We offer a full range of point-of-sale options to meet your individual business needs – from a simple solution you can pair with your mobile device to a comprehensive, full-service payment processing and business system for your countertop. Offer your customers more ways to pay Increase sales by giving your customers more ways to pay, including contactless and digital wallet payment options like Apple Pay® and Google Pay™. Help protect your transactions Help safeguard your customers’ card data with the latest security technology – including end-to-end encryption and tokenization. All solutions are PCI PTS certified. Access convenient technology Minimal equipment setup needed so you can get started taking payments without delay. And all options are convenient for business owners, employees, and customers to use. Additional features •Real-time access to transaction activity, and custom reports to identify trends and opportunities. •Choose from a variety of features such as touch screen, large batch capacity, wired, or Wi-Fi connectivity. •Some point-of-sale solutions have optional apps available to help you manage your business. Use your current payment devices We’ll help you transfer your current system to minimize disruptions and avoid the additional expense of new hardware. If your device is not eligible for transfer, we can recommend an alternate solution. View our options for point-of-sale systems to find the solution that’s right for your business. Point-of-sale devices and accessories are subject to availability. To learn more, contact your Merchant Services specialist. You may settle your Merchant Services funds to an account at the financial institution of your preference. When you use a Wells Fargo account for settlement or other Merchant Services purposes, you must use a Wells Fargo business deposit account. Deposit products offered by Wells Fargo Bank, N.A. Member FDIC. Merchant Services are provided by Wells Fargo Merchant Services L.L.C. and Wells Fargo Bank, N.A. Merchant Services are not deposit products. Wells Fargo Merchant Services L.L.C. does not offer deposit products and its services are not guaranteed or insured by the FDIC or any other governmental agency. Apple, the Apple logo, Apple Pay, Apple Watch, Face ID, iPad, iPad Pro, iPhone, iTunes, Mac, Safari, and Touch ID are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Wallet is a trademark of Apple Inc. The App Store is a service mark of Apple Inc. © 2022 Wells Fargo Merchant Services, L.L.C. All rights reserved. WFMS-462 (06/2022)Item 2B-147 Accept payments with a terminal that’s as adaptable as your business – from a flexible portable device to a compact countertop solution Point-of-sale devices and accessories are subject to availability FD150 RP10 PIN pad (to use with FD150)Verifone V400c Plus Verifone P200 PIN pad (to use with Verifone V400c Plus)Verifone V400m Designed for • Retail, restaurant, quick service, petroleum, and mail order/phone order • Multi-merchant (supports up to 99 merchants in same location) • Businesses that want to settle batches multiple times in a day • Restaurants, retail, and personal service businesses that want a customer facing option for chip card insertion and PIN entry •RP10 PIN pad must be connected to the FD150 • Retail, restaurant, quick service, and mail order/phone order • Businesses that want a compact countertop device • Restaurants, retail, and personal service businesses that want a customer facing option for chip card insertion and PIN entry •Verifone P200 PIN pad must be connected to the Verifone V400c Plus • Retail, restaurant, and quick service • Businesses that want a compact mobile device Device features • Dial , wired internet or Wi-Fi connectivity • Combination terminal, PIN pad, chip card reader, contactless card, and mobile payment reader • Allows tax prompting on Visa and Mastercard commercial cards • Supports RP10 external PIN pad (optional) • Large batch capacity (450 transactions) • Software updates every 30 days • Supports industry-specific transaction information for auto rental and lodging businesses • Combination PIN pad, chip card reader, contactless card, and mobile payment reader • Interactive payment process and ergonomic keypad, with visual display prompts and lights, and audio cues • Wired Internet or 2.4GHz/5GHz Wi-Fi internet connectivity • Combination terminal, PIN pad, chip card reader, contactless card, and mobile payment reader • Can accept payments when device is offline using store & forward feature • Allows for tax prompting on Visa and Mastercard commercial cards • Supports Verifone P200 PIN pad (optional) • Supports Spanish language terminal prompting and receipt text • Software updates daily • Combination PIN pad, chip card reader, contactless card, and mobile payment reader • Interactive payment process and ergonomic keypad, with visual display prompts and lights, and audio cues • 4G LTE AT&T Wireless Network functionality • Supports 2.4GHz/5GHz Wi-Fi connectivity • Combination terminal, PIN pad, chip card reader, contactless card, and mobile payment reader • Can accept payments when device is offline using store & forward feature • Allows for tax prompting on Visa and Mastercard commercial cards • Supports Spanish language terminal prompting and receipt text • Software updates daily Security features • PCI PTS approved. Version 5.x • Transport Layer Security (TLS) encryption • Password protection • Retail Address Verification Service • PCI PTS approved. Version 5.x • PCI PTS approved. Version 5.x • Transport Layer Security (TLS) encryption • Password protection • Retail Address Verification Service • PCI PTS approved. Version 5.x • PCI PTS approved. Version 5.x • Transport Layer Security (TLS) encryption • Password protection • Retail Address Verification Service Hardware size • 3.50” H x 3.70” W x 7.87” L • 2.32” H x 2.87” W x 5.27” L • 2.76” H x 3.15” W x 7.48” L • 1.73” H x 3.15” W x 6.57” L • 1.00” H x 2.98” W x 6.33” L Display screen • Touch-screen capability with 320 x 240 color display • 2.4” 320 x 480 full color TFT display • 3.5” Touch Screen capability with 320 x 480 color display • 2.8” color screen • 3.5” Touch Screen capability with 320 x 480 color display Printer Yes – 18 lines per second No Yes – 30 lines per second No Yes – 30 lines per second 1. Dial connection requires an analog phone line. 2. Offline payments, or store & forward capability allows merchants to take transactions, even when their device is not connected to the Internet. Offline payments, or store & forward capability allows authorizations to be attempted later when the device’s connection has been restored. There are risks to accepting offline transactions. Payments accepted offline are not guaranteed to be approved. If an offline payment is declined, the merchant is responsible for working with the customer to collect the payment. Merchants must monitor all transactions they take offline, and they assume the risk for any chargebacks associated with offline transactions. 3. A monthly wireless fee will apply.Item 2B-148 Combine payment processing and business management support with a Clover® point-of-sale system Point-of-sale devices and accessories are subject to availability Clover Station Duo (formerly known as Clover Station Pro)Clover Station Solo Clover Mini Clover Flex Clover Go Designed for • Businesses that want robust payment processing, business management capabilities, contactless PIN entry, and an interactive customer display • Counter/Quick service restaurants, retail, and personal services businesses that want an interactive customer display • Businesses looking for robust payment processing and business management capabilities • Table service restaurants, retailers, and personal services businesses that don’t need a customer display • Businesses that want robust payment processing and business management capabilities in a compact, space saving device • Restaurants, retail, and personal services businesses that want to replace a larger terminal with an all-in-one device • Businesses that want to accept on-the- go payments and want the benefits of an onscreen signature pad, built-in printer, camera and QR scanner • Restaurants, retail, and other mobile businesses • Businesses that want to use their own phone or tablet to accept payments, and email or text receipts • Caterers, florists, home appliance delivery and repair, and other mobile or delivery- based businesses Device location/uses • Counter-top • Counter-top • Counter-top • Counter-top • Mobile • Mobile • Works with phone or tablet Software • Register • Counter Service Restaurants • Table Service Restaurants • Register • Counter Service Restaurants • Table Service Restaurants • Payments • Essentials • Register • Counter Service Restaurants • Table Service Restaurants • Payments • Essentials • Register • Counter Service Restaurants • Table Service Restaurants • Payments • Essentials Hardware size • Merchant display base plate: 8.73” x 8.9” • Customer display base plate: 6.52” x 8.0” • Cash drawer: 16.5” x 16.5” • Display base plate: 8.73” x 7.25” •Cash drawer: 16.5” x 16.5” •6.5" x 8.25” x 4.25”• 7.5” x 3.0”• 3.2” x 2.2” x 0.47” Display • Merchant: 14” (1920 x 1080 hi-def) • Customer: 7” (1280 x 800) • 14” (1920 x 1080 hi-def)•8.0" IPS HD Display (1280 x 800) • Color TFT LCD • 5” (720 x 1280) • Color TFT LCD • Uses your phone or tablet screen Printer • External (included)• External (included)• Built-in • Built-in • N/A Optional accessories (unless marked as included) • Cash drawer (included) • Kitchen printer (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Cash drawer (included) • Kitchen printer (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Cash drawer • Kitchen printer (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Kitchen printer (Wi-Fi) • Flex Extender • N/A Internet connectivity • Wi-Fi or Ethernet • Can accept payments when device is offline using store & forward feature • Wi-Fi, Ethernet, or up to 4G LTE wireless • Can accept payments when device is offline using store & forward feature • Wi-Fi, Ethernet, or up to 4G LTE wireless • Can accept payments when device is offline using store & forward feature • Wi-Fi or up to 4G LTE wireless • Can accept payments when device is offline using store & forward feature • Wi-Fi or up to 5G LTE wireless, if your device has Wi-Fi or 5G LTE • Can accept payments when device is offline using store & forward feature Embedded camera N/A 2d barcode scanner Compatible with Clover Check Acceptance Fingerprint sign in If available on your device 2. Offline payments, or store & forward capability allows merchants to take transactions, even when their device is not connected to the Internet. Offline payments, or store & forward capability allows authorizations to be attempted later when the device’s connection has been restored. There are risks to accepting offline transactions. Payments accepted offline are not guaranteed to be approved. If an offline payment is declined, the merchant is responsible for working with the customer to collect the payment. Merchants must monitor all transactions they take offline, and they assume the risk for any chargebacks associated with offline transactions. 4. If you use Clover Flex or Clover Mini with Clover Payments or Clover Essentials and choose to add a Clover Station device on the same location, then you will be required to upgrade the software plan to either Register, Counter Service Restaurants or Table Service Restaurants so that all your devices are on the same software plan. 5. Kitchen printers must always be hardwired to a router. The kitchen printer connectivity methods in the table show how specific Clover devices can communicate with a kitchen printer. 6. A monthly wireless fee may apply for 4G LTE wireless usage.Item 2B-149 Clover® solutions offer powerful software, robust reporting, and a choice of 500+ apps to help you manage your business Clover software comparison Payments Essentials Register Counter Service Restaurants Table Service Restaurants Software description Entry-level Clover software plan that enables payment acceptance Includes the features of Payments, plus basic inventory and order management Full-featured plan with enhanced inventory and order management Full-featured POS software designed for counter and quick service restaurants Full-featured POS software designed for table service restaurants Device required?Optional Optional Acceptance of credit, debit, gift cards, EBT and chip cards. Also, acceptance of checks and mobile wallet payments like Apple Pay® Order Management Basic Basic Basic + online ordering + takeout/delivery Basic + online ordering + takeout/delivery + table mapping Reporting Basic Basic + tax Basic + tax + item cost Basic + tax + item cost + order type Basic + tax + item cost + order type Inventory Management Basic Basic + item variants + categories Basic + cost tracking + menu item modifiers + menu management Basic + cost tracking + menu item modifiers + menu management Customer Management (purchase tracking) Customer Engagement (Promos, loyalty programs and feedback)With device only Employee Management (managing user access and roles) (Basic) (Basic) Order type definition and Clover weight scale support Kitchen printer/display integration, pre-authorize a tab Dining features: Table mapping, tableside ordering/firing/payment, multiple bill splitting, and scan to pay Monthly Software Cost Included in Merchant Services monthly service fee $44.95 first device; $9.95 additional device(s) $44.95 first device; $9.95 additional device(s) $74.95 first device; $9.95 additional device(s) 7.Clover solutions made available through Wells Fargo Merchant Services, L.L.C. (WFMS) come with Clover Payments software that allows you to take payments through a web browser, mobile app, or your Clover device. The cost of this software is included in the monthly service fee WFMS charges each month per account. Clover Station 8.Dependent on Clover device used. 9.Merchants that are using Payments only, without hardware or with Clover Go only, can upgrade to the Essentials plan at a cost of $14.95/month. Apple, the Apple logo, Apple Pay, Apple Watch, Face ID, iPad, iPad Pro, iPhone, iTunes, Mac, Safari, and Touch ID are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Wallet is a trademark of Apple Inc. The App Store is a service mark of Apple Inc. The Clover® name and logo are trademarks owned by Clover Network, Inc., an affiliate of First Data Merchant Services LLC, and registered or used in the U.S. and many foreign countries. products will not work with the Clover Payments software alone, and require a more advanced software plan. Upgraded software plans, including those for Clover Station products, require an additional monthly fee per device, and will be billed directly from Clover. All your devices must use the same software plan. Availability of certain software plans, applications, or functionality may vary based on your selected Clover equipment, software, or industry. All fees are subject to change. WFMS and Wells Fargo Bank, N.A. do not provide, and are not responsible for, third-party software or applications, including those offered by Clover. Clover software, applications and other third-party applications that may be available through Clover or in the App Market are subject to the terms and conditions of the developer and may include additional fees subject to change at any time. Software and App Market application fees are disclosed in the Clover App Market or your Clover dashboard and are in addition to the fees listed within your Agreement with us. $14.95 first device;9 $9.95 additional device(s) Item 2B-150 Merchant Services Point-of-sale equipment options for your business Lease, purchase or rent? Decide what’s right for your business. Purchase option • Own equipment • Low purchase price, no monthly payments • 1 year warranty Rent option • Low monthly payments (month to month) with no upfront cost • Return equipment at any time, ideal for short-term use • Includes warranty for rental term Lease option • Low monthly payments (3 or 4 year lease) with no upfront cost2 • Upgrade at any time (for an additional cost) • Warranty for lease term Description Lease 36 months2 Purchase Accept chip, contactless, and mobile payments Accept checks Wired Portable Print reciepts Email or text receipts Clover®1 Go Portable card reader for smartphones and tablets (requires Bluetooth connection) $69 Clover® Flex Portable, hand-held payment processing device with app store and built-in receipt printer for accepting payments on the go $35.96 $499 Clover® Mini Compact counter-top payment processing system with app store and built-in receipt printer for businesses with limited counter space $40.96 $749 Clover® Station All-in-one system for retailers with advanced processing needs, that don’t require customer facing displays $56.96 $1,051 Clover Station® Duo (formerly known as Clover Station Pro) Robust counter-top system with a customer- facing, interactive display, cash drawer, and printer $86.96 $1,649 See next page for details Item 2B-151 Lease 36 months2 Purchase Star thermal kit printer $16.96 $299 Epson label printer $32.96 $599 Clover peripherals Lease 36 months2 Purchase Clover cash drawer $6.96 $69 Kitchen receipt printer $18.96 $359 Kitchen printer – Asian characters $19.96 $319 Clover weight scale $21.96 $499 Lease 36 months2 Purchase 2D hand-held barcode scanner $8.96 $199 2D hands-free barcode scanner 2 $12.96 $229 Clover Station basic printer $13.96 $229 Clover Station contactless printer $18.96 $279 Description Lease 48 months2 Lease 36 months2 Rent3 Purchase Accept chip, contactless, and mobile payments Accept checks Wired Portable Print reciepts Dial connectivity option FD150 Payment processing device with built-in receipt printer $22 $29.96 $39.99 $419 with MagTek reader Verifone V400c Plus Compact, payment processing device with built-in receipt printer $22 $29.96 $39.99 $419 Verifone V400m Mobile, payment processing device with built-in receipt printer $37 $48.96 $49.99 699 RP10 PIN Pad PIN pad for FD150 payment processing device $13 $17.96 $19.99 $249 Verifone P200 PIN Pad PIN pad for Verifone V400c Plus payment processing device $13 $17.96 $19.99 $249 Additional hardware Lease 48 months2 Lease 36 months2 Purchase MagTek Mini Micr 3800 Check reader $123 $16.96 $299 MagTek USB 0109 $109 Posiflex PP8000S printer $379 Anywhere Commerce Walker C2X $109 Augusta USB Chip Reader $189 You may settle your Merchant Services funds to an account at the financial institution of your preference. When you use a Wells Fargo account for settlement or other Merchant Services purposes, you must use a Wells Fargo business deposit account. Deposit products offered by Wells Fargo Bank, N.A. Member FDIC. Merchant Services are provided by Wells Fargo Merchant Services L.L.C. and Wells Fargo Bank, N.A. Merchant Services are not deposit products. Wells Fargo Merchant Services L.L.C. does not offer deposit products and its services are not guaranteed or insured by the FDIC or any other governmental agency. 1. Clover solutions made available through Wells Fargo Merchant Services, L.L.C. (WFMS) come with Clover Payments software that allows you to take payments through a web browser, mobile app, or your Clover device. The cost of this software is included in the monthly service fee WFMS charges each month per account. Clover Station products will not work with the Clover Payments software alone, and require a more advanced software plan. Upgraded software plans, including those for Clover Station products, require an additional monthly fee per device, and will be billed directly from Clover. All your devices must use the same software plan. Availability of certain software plans, applications, or functionality may vary based on your selected Clover equipment, software, or industry. All fees are subject to change. WFMS and Wells Fargo Bank, N.A. do not provide, and are not responsible for, third-party software or applications, including those offered by Clover. Clover software, applications and other third-party applications that may be available through Clover or in the App Market are subject to the terms and conditions of the developer and may include additional fees subject to change at any time. Software and App Market application fees are disclosed in the Clover App Market or your Clover dashboard and are in addition to the fees listed within your Agreement with us. 2. Cost per device per month. Lease cannot be cancelled. This means that you are responsible for the monthly lease payment for the entire term of the lease, even if you cancel your merchant services processing. When your lease term has been completed, you will not own the equipment. You will have the following options: 1. Return the equipment to First Data Merchant Services, L.L.C., 2. Purchase the equipment, or 3. Continue the lease agreement on a month-to-month schedule. 3. Cost per device per month for rent option. The Clover® name and logo are trademarks owned by Clover Network, Inc., an affiliate of First Data Merchant Services LLC, and registered or used in the U.S. and many foreign countries. Prices effective as of 6/1/2021. Price and product availability is subject to change. © 2021 Wells Fargo Merchant Services, L.L.C. All rights reserved. WFMS-131 (Exp: 6/22)Item 2B-152 Accept payments and manage your business with a Clover® point-of-sale system Clover Station Duo1 (formerly known as Clover Station Pro)Clover Station1 Clover Mini Clover Flex Clover Go Designed for • Businesses looking for robust payment processing, business management capabilities, contactless PIN entry, and an interactive customer display that helps improve order accuracy, customer engagement, and loyalty program facilitation. • Counter/Quick service restaurants, retailers, and personal services businesses who want an interactive customer display.1 • Businesses looking for robust payment processing and business management capabilities. • Table service restaurants, retailers, and personal services businesses. • Businesses that want robust payment processing and business management capabilities in a compact, space saving device. • Restaurants, retailers, and personal services businesses that want to replace a larger terminal with an all-in-one device. • Businesses that want to accept on-the- go payments and want the benefits of an onscreen signature pad, built-in printer, camera and QR scanner. • Mobile businesses, restaurants, retailers, and other businesses that want to accept payments. • Businesses that want to use their own phone or tablet to accept payments, and email or text receipts. • Caterers, florists, home appliance delivery and repair, and other mobile or delivery- based businesses. Device location/ uses • Counter-top • Counter-top • Counter-top • Counter-top • Mobile • Mobile • Works with phone or tablet Software • Register • Counter service restaurant • Table service restaurant • Register • Counter service restaurant • Table service restaurant • Payments • Essentials • Register • Counter service restaurant • Table service restaurant • Payments • Essentials • Register • Counter service restaurant • Table service restaurant • Payments Hardware size • Merchant display base plate: 8.73” x 8.9” • Customer display base plate: 6.52” x 8.0” • Cash drawer: 16.5” x 16.5” • Display base plate: 11.0” x 7.5”• 6.5” x 8.0” x 3.7”• 7.5” x 3.0”• 3.2” x 2.2” x 0.47” Display • Merchant: 14” (1920 x 1080 hi-def) • Customer: 7” (1280 x 800) • 14” • 1920 x 1080 hi-def • 7” (1280 x 800) • Color TFT LCD • 5” (720 x 1280) • Color TFT LCD • Uses your phone or tablet screen Printer • External (included)• External with NFC and customer facing display (optional) • Built-in • Built-in • N/A Optional accessories (unless marked as included) • Cash drawer (included) • Kitchen printer2 (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Cash drawer • Kitchen printer2 (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Cash drawer • Kitchen printer2 (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Kitchen printer2 (Wi-Fi) • Flex Extender • N/A Internet connectivity • Wi-Fi, Ethernet, or up to 4G LTE wireless • Offline payments-store & forward • Wi-Fi, Ethernet • Offline payments-store & forward • Wi-Fi, Ethernet, or up to 4G LTE wireless • Offline payments-store & forward • Wi-Fi or up to 4G LTE wireless • Offline payments-store & forward • Wi-Fi or up to 4G LTE wireless, if your device has Wi-Fi or 4G LTE • Offline payments-store & forward Embedded camera N/A 2d barcode scanner Compatible with Clover Check Acceptance Fingerprint sign in If available on your device 1. If you use Clover Flex or Clover Mini with Clover Payments or Clover Essentials and choose to add a Clover Station device on the same location, then you will be required to upgrade the software plan to either Register, Counter service restaurant or Table service restaurant so that all your devices are on the same software plan. 2. Kitchen printers must always be hardwired to a router. The kitchen printer connectivity methods in the table show how specific Clover devices can communicate with a kitchen printer. Item 2B-153 Clover® solutions offer powerful point-of-sale (POS) software, convenient devices, robust reporting, and a choice of 500+ apps3 to help you manage your business Use the table below to help select a Clover3 software plan that fits your business. Clover software comparison Payments Essentials Register Counter service restaurant Table service restaurant Software description Entry-level Clover software plan that enables payment acceptance Includes the features of Payments, plus basic inventory & order management Full-featured plan with enhanced inventory and order management Full-featured POS software designed for counter & quick service restaurants Full-featured POS software tailored for table service restaurants Device Required?Optional Optional Acceptance of credit, debit, gift cards, EBT and chip cards. Also, acceptance of checks and mobile wallet payments like Apple Pay®4 Order Management Basic Basic Basic+ online ordering + takeout/delivery Basic + online ordering + takeout/delivery + table mapping Reporting Basic Basic + tax Basic + tax + item cost Basic + tax + item cost + order type Basic + tax + item cost + order type Inventory Management Basic Basic + item variants + categories Basic + cost tracking + menu item modifiers + menu management Basic + cost tracking + menu item modifiers + menu management Customer Management Customer Engagement (Promos, loyalty programs & feedback)With device only Employee Management (managing user access and roles)Basic Basic Order type definition & Clover weight scale support Kitchen printer/display integration, pre-authorize a tab Dining features: Table mapping, tableside ordering/firing/payment, multiple bill splitting, & scan to pay Monthly Software Cost Included in Merchant Services monthly service fee $9.95 per device5 $39.95 first device; $9.95 additional device(s) $39.95 first device; $9.95 additional device(s) $69.95 first device; $9.95 additional device(s) 3. Clover solutions made available through Wells Fargo Merchant Services, L.L.C. (WFMS) come with Clover Payments software that allows you to take payments through a web browser, mobile app, or your Clover device. The cost of this software is included in the monthly service fee WFMS charges each month per account. Clover Station products will not work with the Clover Payments software alone, and require a more advanced software plan. Upgraded software plans, including those for Clover Station products, require an additional monthly fee per device, and will be billed directly from Clover. All your devices must use the same software plan. Availability of certain software plans, applications, or functionality may vary based on your selected Clover equipment, software, or industry. All fees are subject to change. WFMS and Wells Fargo Bank, N.A. do not provide, and are not responsible for, third-party software or applications, including those offered by Clover. Clover software, applications and other third-party applications that may be available through Clover or in the App Market are subject to the terms and conditions of the developer and may include additional fees subject to change at any time. Software and App Market application fees are disclosed in the Clover App Market or your Clover dashboard and are in addition to the fees listed within your Agreement with us. 4. Dependent on Clover device used. 5. Merchants that are using Payments only without hardware can upgrade to the Essentials plan at a cost of $9.95/month. Apple, the Apple logo, Apple Pay, Apple Watch, Face ID, iPad, iPad Pro, iPhone, iTunes, Mac, Safari, and Touch ID are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Wallet is a trademark of Apple Inc. The App Store is a service mark of Apple Inc. The Clover® name and logo are trademarks owned by Clover Network, Inc., an affiliate of First Data Merchant Services LLC, and registered or used in the U.S. and many foreign countries. © 2021 Wells Fargo Merchant Services, L.L.C. All rights reserved. WFMS-240 (06/2021)Item 2B-154 Accept payments and manage your business with a Clover® point-of-sale system Clover Station Duo1 (formerly known as Clover Station Pro)Clover Station1 Clover Mini Clover Flex Clover Go Designed for • Businesses looking for robust payment processing, business management capabilities, contactless PIN entry, and an interactive customer display that helps improve order accuracy, customer engagement, and loyalty program facilitation. • Counter/Quick service restaurants, retailers, and personal services businesses who want an interactive customer display.1 • Businesses looking for robust payment processing and business management capabilities. • Table service restaurants, retailers, and personal services businesses. • Businesses that want robust payment processing and business management capabilities in a compact, space saving device. • Restaurants, retailers, and personal services businesses that want to replace a larger terminal with an all-in-one device. • Businesses that want to accept on-the- go payments and want the benefits of an onscreen signature pad, built-in printer, camera and QR scanner. • Mobile businesses, restaurants, retailers, and other businesses that want to accept payments. • Businesses that want to use their own phone or tablet to accept payments, and email or text receipts. • Caterers, florists, home appliance delivery and repair, and other mobile or delivery- based businesses. Device location/ uses • Counter-top • Counter-top • Counter-top • Counter-top • Mobile • Mobile • Works with phone or tablet Software • Register • Counter service restaurant • Table service restaurant • Register • Counter service restaurant • Table service restaurant • Payments • Essentials • Register • Counter service restaurant • Table service restaurant • Payments • Essentials • Register • Counter service restaurant • Table service restaurant • Payments Hardware size • Merchant display base plate: 8.73” x 8.9” • Customer display base plate: 6.52” x 8.0” • Cash drawer: 16.5” x 16.5” • Display base plate: 11.0” x 7.5”• 6.5” x 8.0” x 3.7”• 7.5” x 3.0”• 3.2” x 2.2” x 0.47” Display • Merchant: 14” (1920 x 1080 hi-def) • Customer: 7” (1280 x 800) • 14” • 1920 x 1080 hi-def • 7” (1280 x 800) • Color TFT LCD • 5” (720 x 1280) • Color TFT LCD • Uses your phone or tablet screen Printer • External (included)• External with NFC and customer facing display (optional) • Built-in • Built-in • N/A Optional accessories (unless marked as included) • Cash drawer (included) • Kitchen printer2 (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Cash drawer • Kitchen printer2 (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Cash drawer • Kitchen printer2 (Wi-Fi or LAN) • Weight scale • 2D handheld barcode scanner • 2D hands-free barcode scanner • Kitchen printer2 (Wi-Fi) • Flex Extender • N/A Internet connectivity • Wi-Fi, Ethernet, or up to 4G LTE wireless • Offline payments-store & forward • Wi-Fi, Ethernet • Offline payments-store & forward • Wi-Fi, Ethernet, or up to 4G LTE wireless • Offline payments-store & forward • Wi-Fi or up to 4G LTE wireless • Offline payments-store & forward • Wi-Fi or up to 4G LTE wireless, if your device has Wi-Fi or 4G LTE • Offline payments-store & forward Embedded camera N/A 2d barcode scanner Compatible with Clover Check Acceptance Fingerprint sign in If available on your device 1. If you use Clover Flex or Clover Mini with Clover Payments or Clover Essentials and choose to add a Clover Station device on the same location, then you will be required to upgrade the software plan to either Register, Counter service restaurant or Table service restaurant so that all your devices are on the same software plan. 2. Kitchen printers must always be hardwired to a router. The kitchen printer connectivity methods in the table show how specific Clover devices can communicate with a kitchen printer. Item 2B-155 Clover® solutions offer powerful point-of-sale (POS) software, convenient devices, robust reporting, and a choice of 500+ apps3 to help you manage your business Use the table below to help select a Clover3 software plan that fits your business. Clover software comparison Payments Essentials Register Counter service restaurant Table service restaurant Software description Entry-level Clover software plan that enables payment acceptance Includes the features of Payments, plus basic inventory & order management Full-featured plan with enhanced inventory and order management Full-featured POS software designed for counter & quick service restaurants Full-featured POS software tailored for table service restaurants Device Required?Optional Optional Acceptance of credit, debit, gift cards, EBT and chip cards. Also, acceptance of checks and mobile wallet payments like Apple Pay®4 Order Management Basic Basic Basic+ online ordering + takeout/delivery Basic + online ordering + takeout/delivery + table mapping Reporting Basic Basic + tax Basic + tax + item cost Basic + tax + item cost + order type Basic + tax + item cost + order type Inventory Management Basic Basic + item variants + categories Basic + cost tracking + menu item modifiers + menu management Basic + cost tracking + menu item modifiers + menu management Customer Management Customer Engagement (Promos, loyalty programs & feedback)With device only Employee Management (managing user access and roles)Basic Basic Order type definition & Clover weight scale support Kitchen printer/display integration, pre-authorize a tab Dining features: Table mapping, tableside ordering/firing/payment, multiple bill splitting, & scan to pay Monthly Software Cost Included in Merchant Services monthly service fee $9.95 per device5 $39.95 first device; $9.95 additional device(s) $39.95 first device; $9.95 additional device(s) $69.95 first device; $9.95 additional device(s) 3. Clover solutions made available through Wells Fargo Merchant Services, L.L.C. (WFMS) come with Clover Payments software that allows you to take payments through a web browser, mobile app, or your Clover device. The cost of this software is included in the monthly service fee WFMS charges each month per account. Clover Station products will not work with the Clover Payments software alone, and require a more advanced software plan. Upgraded software plans, including those for Clover Station products, require an additional monthly fee per device, and will be billed directly from Clover. All your devices must use the same software plan. Availability of certain software plans, applications, or functionality may vary based on your selected Clover equipment, software, or industry. All fees are subject to change. WFMS and Wells Fargo Bank, N.A. do not provide, and are not responsible for, third-party software or applications, including those offered by Clover. Clover software, applications and other third-party applications that may be available through Clover or in the App Market are subject to the terms and conditions of the developer and may include additional fees subject to change at any time. Software and App Market application fees are disclosed in the Clover App Market or your Clover dashboard and are in addition to the fees listed within your Agreement with us. 4. Dependent on Clover device used. 5. Merchants that are using Payments only without hardware can upgrade to the Essentials plan at a cost of $9.95/month. Apple, the Apple logo, Apple Pay, Apple Watch, Face ID, iPad, iPad Pro, iPhone, iTunes, Mac, Safari, and Touch ID are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Wallet is a trademark of Apple Inc. The App Store is a service mark of Apple Inc. The Clover® name and logo are trademarks owned by Clover Network, Inc., an affiliate of First Data Merchant Services LLC, and registered or used in the U.S. and many foreign countries. © 2021 Wells Fargo Merchant Services, L.L.C. All rights reserved. WFMS-240 (06/2021)Item 2B-156 Wells Fargo in your community | Palm Desert, California 1 •5 banking locations •2 Wells Fargo Advisors offices •10 ATMs •3 community development investments totaling $75,0002,3 •Wells Fargo team members participated in 1 community development service activities totaling 2 hours2,3 Our people Our locations Our community •28 team members live here •71 team members work here 1Community Impact and CRA reflects 2020 data 2Some community development activity cannot be tracked at the city level 3Community development activity is subject to change as updates are received *LMI = low to moderate income Our people and location information as of August 2022 Charitable contributions1 Foundation giving Total grants $amount Civic 42 16,271,500 Environment 7 5,074,000 Education 153 15,826,934 Human services 357 17,682,788 Team member giving Participants 3 $ amount 2,450 Item 2B-157 Source: FDIC Deposit Market Share Report as of June 30, 2021 Wells Fargo in your community | Palm Desert, California 2 Home mortgage lending in your community1 Community lending1,2,3 • 185 mortgage loans extending $59.0 million in credit –Of that, 4 were in LMI communities, providing $1.0 million in credit and 12 mortgage loans were made to LMI borrowers, providing $2.1 million in credit • 306 small business loans extending $13.9 million in credit –Of that, 13 were in LMI communities, providing $543,235 in credit • 1 small farm loan, providing $22,500 in credit Total loans $ amount Home purchases 86 34,262,006 LMI borrower 5 721,447 Home improvement 2 155,000 Home equity 0 0 Home refinance 76 21,331,751 LMI borrower 6 1,210,486 Wells Fargo continues to be among highest credit rated U.S. banks Bank Moody’s S&P Fitch Wells Fargo Bank, NA Aa1(cr)A+AA- JP Morgan Chase Bank Aa1(cr)A+AA Bank of America Aa2(cr)A+AA- US Bank Aa2(cr)AA-AA- Citibank Aa3(cr)A+A+ Deposit share Rank #Total deposits ($000) 21.51%#1 799,993 (cr) –Reflects Moody’s Counterparty Risk Assessment Source: Bloomberg as of January 21, 2021 Credit ratings FDIC deposit market share 4Community Impact and CRA reflects 2020 data 5Mortgage includes home purchase, home improvement, home refinance, other purpose, NA and originated and purchased loans. 6Totals include low, moderate, middle, upper and unclassified income levels. Item 2B-158 Wells Fargo is committed to local California communities $76.6 million in 2,577 grants donated to California nonprofits, schools and community organizations in 2019 224,972 volunteer hours contributed by team members in 2019 37,003 team members employed across the state 982 community banking branches in the state $160.2 million in Small Business Administration 7(a) loans in fiscal year 2019 $5.8 billion in 116,247 small business loans in 2018 $86.5 billion in 176,240 home mortgage loans in 2018, including low- and moderate- income Communicator contact information: Paul Gomez paul.gomez@wellsfargo.com Investing in California Helping local communities grow More than 23,000 homeowners created through LIFT programs since 2012 The Los Angeles County NeighborhoodLift® program provided a $9.8 million program commitment to the local area. With the creation of more than 3,376 homeowners in 2019, the Wells Fargo NeighborhoodLIFT® program has now assisted more than 23,000 total homeowners since 2012. Two of those homeowners are siblings Kenneth and Leah Martinez who—last year—received a $25,000 down payment assistance grant toward the purchase of their first home. “Qualifying for a NeighborhoodLIFT grant gave us the piece of the puzzle we needed,” said Leah, a restaurant manager in the LA area. “That grant really did lift us up to fulfill our dream.” The siblings used the funds to purchase the house next door to their childhood home. The 2019 Los Angeles County NeighborhoodLIFT® program follows the program’s first-ever launch in Los Angeles in 2012, which created 386 homeowners. To date, Wells Fargo has invested more than $500 million in 78 LIFT program launches in support of sustainable housing. n Vegan soul food: Improving health ‘one chew at a time’ After founding Oakland’s The Veg Hub in 2016, Chef GW Chew is now gearing up to take the mission of his Something Better Foods Inc., business far beyond the restaurant: He plans to start selling his company’s Better Chew brand of meat and chicken substitutes at 44 Whole Foods supermarkets in Northern California. “Food is a life-or-death issue,” Chew said. “Having healthier food options that taste amazing — but don’t have the same risks that overconsumption of meats brings — can have a big impact, not just on the environment and health, but on families.” His company’s expansion is the latest success stemming from the Wells Fargo Works for Small Business®: Diverse Community Capital program, which began in 2015 to help diverse small businesses –like Chew’s – by providing resources to Community Development Financial Institutions (CDFIs). To date, Wells Fargo has provided $94.8 million in grants and capital to 92 CDFIs, like Working Solutions in the San Francisco Bay Area, which, in turn, make loans to help small businesses that typically can’t access conventional financing. In Chew’s case, Working Solutions provided Item 2B-159 Information as of March 2020. © 2020 Wells Fargo Bank, N.A. All rights reserved. Our commitment to sustainable housing In 2019, Wells Fargo provided more than $15 million in philanthropic investments to boost local homeownership through their NeighborhoodLIFT program in Los Angeles and Sacramento, creating nearly 600 homeowners. Since 2012, NeighborhoodLIFT and other LIFT programs have invested $77 million through 10 program launches in California and will create more than 3,000 homeowners by offering homebuyer education and down payment assistance grants for low- and moderate- income buyers. Wells Fargo has also donated 19 mortgage-free homes to suppport military veterans and their families in California, and donated more than 400 homes valued at over $60 million in all 50 states since 2012. Our history in California In 1852, Henry Wells and William Fargo founded Wells Fargo & Co. in the Gold Rush port of San Francisco to serve the West. The new company offered banking and express services. The bank was soon doing business across the state of California. In the boom and bust economy of the 1850s, Wells Fargo earned a reputation of trust by dealing rapidly and responsibly with people’s money. Learn more: stories.wf.com/ California Money management with California State Treasurer Fiona Ma Wells Fargo team members are committed to helping customers succeed financially and building brighter futures in their communities. One way they live this is by teaching Hands On Banking® workshops. As part of this commitment, Sacramento- based team members helped execute California State Treasurer Fiona Ma’s vision of providing Sacramento’s disadvantaged youth with an introductory training on investments, budgeting and responsible borrowing. More than two dozen youth participated in the California State Treasurer’s Office’s inaugural Youth Investment Summit. “Financial awareness is a critical tool young people need to make wise decisions about their finances and to help them become successful adults,” said Treasurer Ma in a news release. “Wells Fargo is working with nonprofits and stakeholders to develop and scale new approaches to helping people break the cycle of poverty, save money, reduce debt, and build generational wealth,” said Community Relations Associate Manager Kären Woodruff. “Expanding access to financial health tools and coaching gives individuals and vulnerable families and communities the tools, knowledge and confidence needed to succeed on their own.” n Helping diverse business owners thrive Wells Fargo’s Diverse Community Capital (DCC) program provides technical assistance and lending capital to empower diverse entrepreneurs to create or sustain local jobs. In 2019, Accion Serving Southern California received a $300,000 DCC capacity-building grant to expand access to capital for Hispanic and African American small business owners across Imperial, Riverside, San Bernardino and San Diego counties. Funding directly supported Accion’s Rapid Loan product, which offers up to $8,000 in funding to small businesses in as few as three days. “Wells Fargo has been one of Accion’s largest financial supporters since we started in San Diego in 1994,” stated Accion CEO Elizabeth Schott. “We are thrilled to receive this funding to expand our lending program and serve more diverse entrepreneurs who need access to affordable lending products. This grant highlights the need for both technical assistance and funding to grow small businesses.” This grant will continue helping Accion clients like husband-wife team Steven and Candace Gray, who credit Accion and Wells Fargo’s DCC funding with giving them the opportunity to expand their barbershop to a larger location. The new, larger site allows them to better serve their clients in Lemon Grove, California. Accion received its first DCC grant in 2017 and has since served more than 500 diverse business owners across Southern California through more than $8 million in loans. n him the $50,000 loan in October 2017 that he used to acquire a manufacturing site in Vallejo, California — and the all-important guidance his business needed about profit margins, pricing, packaging, and other essentials to win the Whole Foods order. “For me, it’s all about the mission: Changing lives one chew at a time.” n Item 2B-160 City of Palm Desert | 1 Sample implementation schedule Account opening Approximate time frame Wells Fargo actions Your actions 1-day lead time* • Identify all accounts to be opened • Provide account numbers • Provide MICR specifications • Order deposit tickets, check stock, and other supplies • Validate setup • Confirm all accounts to be opened • Order deposit tickets, check stock, and other supplies, if you prefer to order them yourselves * Due diligence processes can take up to 30 days to complete. Online banking portal and information reporting Approximate time frame* Wells Fargo actions Your actions 3-day lead time to establish services in online banking portal 1-day lead time to establish information reporting service • Review and confirm services • Coordinate training • Set up online administration for reports, and related services • Review and confirm services • Attend training • Review and sign forms * The implementation time can be shorter (or longer), depending on the products being implemented. ACH direct origination Approximate time frame Wells Fargo actions Your actions 13-day lead time* • Review and confirm services† • Provide file layout specifications • Determine transmission method and issue IDs • Issue transmission IDs • Review test file format • Perform transmission testing (additional time may be needed for outbound transmission testing, such as for a returned item) • Move transmission IDs into production • Validate and finalize setup • Review and confirm services • Determine transmission method and confirm receipt of transmission IDs • Create test file • Perform transmission testing (additional time may be needed for outbound transmission testing, such as for a returned item) * The implementation time can be shorter (or longer), depending on transmission testing. † Same Day ACH service is one of the service options. Item 2B-161 City of Palm Desert | 2 Online ACH service* Approximate time frame Wells Fargo actions Your actions 13-day lead time • Review and confirm services • Coordinate training • Set up service on ACH platform • Set up online administration for reports and related services • Review and confirm services • Review and sign forms • Complete training • Identify at least one company administrator * Using our CEO Mobile® service, you can view, approve, and delete payment batches and payment templates created on our online banking portal. Once you are set up for Commercial Electronic Office® (CEO®)ACH Payments, there is no additional setup to use the mobile service. You either enter your CEO credentials at https://ceomobile.wf.com/ and follow the prompts, or you download the latest version of the CEO Mobile app available for your device from the Apple App Store® or Google Play™ store. Our mobile service app gives you the ability to sign up for push notifications so that we can inform you when a new ACH item requires approval. ACH Fraud Filter Approximate time frame Wells Fargo actions Your actions 9-day lead time* • Review and confirm services • Coordinate training • Set up service on ACH platform • Set up optional 30-day review (before considering stop option) • Implement stop option, if needed • Review and confirm services • Complete training • Identify default decisions and preauthorizations * This service becomes active after users complete training. Your responsiveness affects the implementation lead time; delays in completing training can increase the implementation timeframe. Branch depository Approximate time frame Wells Fargo actions Your actions 10-day lead time • Review and confirm services • Submit new business notifications (NBNs) • Review NBNs for accuracy • Validate and communicate process completion • Review and confirm services • Pick up night drop keys at branch Item 2B-162 City of Palm Desert | 3 Cash vault Approximate time frame Wells Fargo actions Your actions 2 to 11-day lead time • Review and confirm services • Implement cash vault • Provide change order and deposit information • Order supplies • Validate setup • Send fulfillment package • Monitor activity • Review and confirm services • Confirm armored courier service • Order supplies • Monitor activity Full Account Reconciliation Plan (ARP) with Positive Pay Approximate time frame Wells Fargo actions Your actions 30-day lead time* • Review and confirm services • Coordinate training • Provide file layout specifications • Issue transmission IDs • Perform transmission testing • Move transmission IDs into production • Validate and finalize setup • Activate Positive Pay service • Review and confirm services • Complete training • Perform transmission testing * The implementation time can be shorter (or longer), depending on transmission testing. Additionally, adding ARP or Positive Pay to an existing account is cycle dependent; we can add either service only at the beginning of a statement cycle, if adding it to an existing account. Payee Validation Approximate time frame Wells Fargo actions Your actions 30-day lead time* • Review and confirm services • Share manual review fee with the City† • Share key implementation requirements, guidelines, and video tour • Request customer specifications for check stock order • Confirm checks are ready to monitor • Set up for production • Monitor test checks • Review and confirm services • Acknowledge understanding of requirements • Confirm checks are ready to monitor • Monitor test checks • Review check stock and monitor issue file for three weeks • Address any issue file corrections. If checks pass three weeks of testing, there is no further follow-up Item 2B-163 City of Palm Desert | 4 Payee Validation • Review check stock and monitor issue file for three weeks • Address any issue file corrections. If checks pass three weeks of testing, there is no further follow-up • Validate and finalize setup • If checks fail testing, you have 60 days to fix any issues† * Dependent upon results of check stock monitoring. † If checks still fail, we will assess the manual review fee. Bank Administration Institute (BAI) transmissions Approximate time frame Wells Fargo actions Your actions 27-day lead time • Review and confirm services • Determine transmission method • Issue transmission IDs • Perform transmission testing • Move transmission IDs into production • Validate and finalize setup • Review and confirm services • Develop capacity to receive and parse BAI file and data • Perform transmission testing Remote deposit Approximate time frame Wells Fargo actions Your actions 10-day lead time • Review and confirm services • Order supplies • Complete and validate setup • Send fulfillment package • Review and confirm services Remote deposit with detail reporting Approximate time frame Wells Fargo actions Your actions 21-day lead time* • Review and confirm services • Provide transmission specifications • Set up transmission and test connectivity • Issue transmission IDs • Provide test results • Move transmission IDs into production • Monitor live files • Review and confirm services • Review and approve forms • Send test file Item 2B-164 City of Palm Desert | 5 Remote deposit with detail reporting • Validate setup * A deposit detail transmission can be set up for both our remote deposit and image cash letter services. The timeframe for either requires at least a 21-day lead time to establish, create, and test IDs for transmission. Image File Import (non-lockbox) Approximate time frame Wells Fargo actions Your actions 20-day lead time* • Review and confirm services • Provide reference guide • Determine transmission method • Issue transmission IDs • Send live files • Validate and finalize setup • Review and confirm services • Download test file then confirm connectivity and format * The implementation time can be shorter (or longer), depending on transmission method and testing. Returned items Approximate time frame Wells Fargo actions Your actions 7-day lead time* • Review and confirm services • Issue transmission IDs • Implement instructions • Validate setup • Review and confirm services • Send test file *The implementation time can be shorter (or longer), depending on transmission testing. Wires (online initiation) Approximate time frame Wells Fargo actions Your actions 10-day lead time • Review and confirm services • Implement and validate services • Coordinate training • Review and confirm services • Complete training Zero balance account Approximate time frame Wells Fargo actions Your actions 2-day lead time • Review and confirm services • Implement zero balance account • Validate setup • Review and confirm services Item 2B-165 Item 2B-166 Item 2B-167 © 2010-2014 Wells Fargo Bank, N.A. All Rights Reserved. Member FDIC. Client Analysis Statement Quick Reference Guide Overview Your Client Analysis statement is designed to provide all pertinent balance and activity information in a concise and logical format. This guide should help you become familiar with the information available on your statement. Use your Wells Fargo Client Analysis statement to:  Track costs: The service detail section provides detailed product subtotals and volume and price information about the services you have used.  Monitor trends: The trend analysis section provides current month summary information, and prior five months historical information to help you spot trends in your checking account activity. Wells Fargo offers flexible file formats and electronic delivery of your Client Analysis statement, providing you comprehensive information about your account quickly, securely, and conveniently. Receive your Client Analysis statement from Wells Fargo through the Commercial Electronic Office® (CEO®) portal Statements & Notices service, or email. Contact your officer to determine the best format and delivery method for your needs. Accessing Client Analysis statements online If you have access to the Wells Fargo® CEO portal, you can review and download your Client Analysis statements online. Follow these instructions: 1. Sign on to the CEO portal. 2. Select Statements & Notices under My Services. 3. Select Client Analysis statements. Using the CEO Statements & Notices service, you can:  View statements for 12 months  Drill down to more detailed views with flexible formatting  Access your statements in multiple formats: PDF, Excel, CSV, or ANSI 822 text files  Compare current and prior-month statements  View graphic representations of your analysis data trends With Client Analysis statements on the CEO portal, you should also receive complimentary CEO Event Messaging service notifications each time a new or re-analyzed Client Analysis statement is ready for your review. Item 2B-168  Client Analysis Statement example Note: Some line items will not print on your statement unless they contain values. Prices and rates shown are for illustration only. Field Description Officer: Banker’s name and telephone number. Analysis Summary: Section of the statement that provides detail of the Earnings Allowance on your balance versus the total activity charges. Average Positive Collected Balance: The sum of the positive collected balances at the close of business each day of the statement period, divided by the number of days in the cycle. Reserve Requirement: Amount of balances the Bank is required to keep on deposit at the Federal Reserve. Investable Balance Available for Services: Average Daily Positive Collected Balance, plus or minus the Net Prior Month Balance Adjustment, less the Reserve Requirement. Earnings Allowance: Earnings on balances maintained during the statement period being measured that may be used to offset service charges. Current Month Analyzed Charges: Total service charges for the current statement period that may be paid for with the earnings allowance on balances. Client Analysis Statement Quick Reference Guide August 2014 2 Item 2B-169  Client Analysis Statement example, cont. Field Description Balance Summary: Section of the statement that includes the balance and service charge information for all accounts appearing in this statement. Service Detail: Section of the statement that provides a detailed description of services billed in the current month along with the corresponding AFP code, Unit Price, Volume, and Service Charges. Service Code: Bank code used in combination with the AFP code to identify each service provided. AFP Code: Association for Financial Professionals service codes for each cash management service. These codes help identify comparable services between banks and are used in the electronic transmission of analysis statements. Service Description: Product identification for each service provided. For example, Lockbox customers will see a two-digit, alpha processing site identifier and their lockbox numbers added to all ID transactions. Unit Price: Unit price per volume of the service described. Volume: Total use of product, measured in units or dollar amount. Service Charges: Unit Price multiplied by Volume. Client Analysis Statement Quick Reference Guide August 2014 3 Item 2B-170  Client Analysis Statement example, cont. Client Analysis Statement Quick Reference Guide August 2014 Field Description Trend Analysis: Displays most recent average balance and service charge activity to assist in monitoring trends. Each column has headings that match an item in the Analysis Summary or Balance Summary section. Earnings Credit Rate: Rate used to value your Investable Balance Available for Services. Balance Adjustments: Section of the statement that provides details of prior month adjustments that have been made to the Average Collected Balances for the analysis period. Key Calculations Average Ledger: Sum of each day’s ledger, divided by # days in month. Average Float: Sum of daily float, divided by # days in month. Average Collected: Sum of daily collected balance, divided by # days in month. Investable Balance: Average Positive Collected minus Reserves, minus compensating balances. Balance Required to Offset $1 Service Charge: Number of actual days in year, divided by total of ECR rate, times day of month, times 0.9. Earning Allowance: Investable Balances times ECR Rate, times # of days in month, divided by # of days in year. 4 Item 2B-171 Item 2B-172 Item 2B-173 Item 2B-174 Item 2B-175 Item 2B-176 Item 2B-177 Item 2B-178 Item 2B-179 Item 2B-180 Item 2B-181 Item 2B-182 Item 2B-183 Item 2B-184 Item 2B-185 Item 2B-186 Wells Fargo Treasury Management Sample ARP reports Paid Checks Outstanding Checks Stop Payments Voids and Cancels . Item 2B-187 SAMPLE Contract for Deposit of Moneys THIS CONTRACT, relating to the deposit of moneys, is made as of the _______ day of ________________, 20____, between (“Treasurer”) acting in his or her official capacity as Treasurer of Customer Name_(“Depositor”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”), having a shareholder’s equity of $171,105,000,000.00 on December 31, 2021, and is made with reference to the following facts: WHEREAS, the Treasurer proposes to deposit in the Bank from time to time, moneys in his or her custody in an aggregate amount on deposit at any one time not to exceed the total shareholder’s equity of the Bank, and said moneys will be deposited subject to Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code of the State of California (the "Local Agency Deposit Security Law"). WHEREAS, the Government Code requires the Treasurer to enter into a contract with the Bank setting forth the conditions upon which said moneys are deposited. WHEREAS, in the judgment of the Treasurer, this Contract is to the public advantage. NOW, THEREFORE, the parties agree as follows: 1. This Contract cancels and supersedes any previous contracts between the Treasurer and the Bank relating to the method of collateralization of Depositor’s deposits. To the extent not inconsistent herewith, any such deposit shall be subject to the terms and conditions of the Bank's standard disclosure statement (as in effect from time to time) for deposits of that type. 2. This contract, but not deposits then held hereunder, is subject to termination by the Treasurer or the Bank at any time upon 30 days' written notice. Deposits may be withdrawn in accordance with the agreement of the parties and applicable federal and state statutes, rules and regulations. This contract is subject to modification or termination upon enactment of any statute, rule, or regulation, state or federal, which, in the opinion of the Administrator of Local Agency Security of the State of California (the "Administrator"), is inconsistent herewith, including any change relative to the payment of interest upon moneys so deposited by the Treasurer. The Treasurer may withdraw Depositor's deposits from the Bank immediately upon receiving notice from the Administrator that the Bank has failed to pay assessments, fines or penalties assessed by the Administrator. The Treasurer may immediately upon receiving notice from the Administrator withdraw authorization for the placement of securities with the Agent of the Bank in the event that the Agent of the Bank fails to pay fines or penalties assessed by the Administrator. 3. Interest shall accrue on any moneys so deposited as permitted by any act of Congress of the United States or by any rule or regulation of any department or agency of the Federal Government. If interest may legally be paid on the account into which the moneys are deposited, then all moneys deposited shall bear interest at a rate agreed upon by the Treasurer and the Bank. 4. The Bank shall issue to the Treasurer for each deposit a receipt on a form agreed to by the Bank and the Treasurer, stating the interest to be paid (if any), the duration of the deposit (if appropriate), the frequency of interest payments (if any) and the terms of withdrawal. Each such deposit receipt is by reference made a part of this contract. 5. The Bank will maintain at all times with the Agent of the Bank as security for Depositor's deposits: (a) eligible securities of the classes described in Government Code Section 53651 (except subdivisions (m) and (p)) having a market value at least 10% in excess of the total amount of deposits secured by those securities, (b) eligible securities of the class described in subdivision (m) of Government Code Section 53651 having a market value at least 50% in excess of the total amount of deposits secured by those securities and (c) eligible securities of the class described in subdivision (p) of Government Code Section 53651 having a market value at least 5% in excess of the total amount of deposits secured by those securities. If the Administrator determines Item 2B-188 SAMPLEthat a security is not qualified to secure public deposits, the Bank will substitute other securities to comply with the requirements of this Paragraph. 6. The Treasurer hereby waives security for that portion of the total amount on deposit which is insured pursuant to Federal law. 7. The Agent of the Bank, which the Treasurer and the Bank hereby authorize to hold the eligible securities posted as collateral under this contract, is THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.. The Agent of the Bank has filed with the Administrator an agreement to comply in all respects with all provisions of the Local Agency Deposit Security Law. 8. Authority for placement of securities for safekeeping in accordance with Government Code Section 53659 is hereby granted to the Agent of the Bank, including placement with any one or more Federal Reserve Banks or branches thereof. 9. If the Bank fails to pay all or part of any moneys of the Depositor on deposit with the Bank which are subject to this contract when ordered to do so in accordance with the terms of withdrawal set forth on the applicable deposit receipt, the Treasurer will immediately notify the Administrator in writing. Action of the Administrator in converting the collateral required by Paragraph 5 above for the benefit of the Depositor is governed by Government Code Section 53665. 10. The Bank may add, substitute or withdraw eligible securities being used as security for deposits made hereunder in accordance with Government Code Section 53654, provided the requirements of Paragraph 5 above are met. 11. The Bank shall have and hereby reserves the right to collect and retain for the Bank's own account the interest or income on the securities, except in cases where the securities are liable to sale or are sold or converted in accordance with the provisions of Government Code Section 53665. 12. The Bank will pay all expenses incurred in transporting eligible securities maintained as collateral for moneys on deposit to and from the Agent of the Bank. The Depositor will pay (or promptly reimburse the Bank for or otherwise compensate the Bank for) all expenses incurred in transporting all moneys deposited with the Bank to and from the Depositor's offices. The Depositor will pay the Bank (or otherwise compensate the Bank for) the fees and charges stated in the Bank's then current Schedule of Charges (unless the Bank and the Treasurer otherwise agree) for handling, collecting and paying all checks, drafts and other exchange or securities according to the Bank's standard practices. 13. This contract, the parties hereto, and all deposits governed by this contract shall comply with and be subject in all respects to the Local Agency Deposit Security Law, and all other state and federal laws, statutes, rules and regulations applicable to such deposits, whether now in force or hereafter enacted to promulgated, all of which are by this reference made a part hereof. IN WITNESS WHEREOF, the Treasurer in his or her official capacity on behalf of the Depositor, and the Bank by its duly authorized officer, have signed this contract in triplicate as of the day and year first above-mentioned. TREASURER of: Customer Name Name of Local Agency Depositor By: __________________________________ Title: _______________________ Address: _________________________ __________________________________ WELLS FARGO BANK, NATIONAL ASSOCIATION By: ____________________________________ Title: __Vice President_____________________ Address: 333 Market Street, 29th Floor MAC: A0119-293 San Francisco, CA 94105 . Item 2B-189 •Security – For more than 160 years, Wells Fargo has enjoyed a reputation based on strength, security, and financial discipline. •Same day funds transfer and availability with interest and dividend payments available on payment date for customers with a Wells Fargo Bank checking or sweep account •Free, single sign-on online access to account activity, safekeeping positions and statements for both brokerage custody and bank safekeeping accounts through Wells Fargo’s Commercial Electronic Office® (CEO ®) online business portal •Convenient consolidation and record keeping for your entire portfolio of securities, delivered from all your brokers, in one safekeeping account •Pledging •Notification of maturing proceeds and interest payments •Competitive safekeeping fee structure, with automatic payment from your bank checking account Fixed Income Sales & Trading Bank Safekeeping Services and Safeguards Wells Fargo Securities Fixed Income Sales customers may elect to hold their securities in a safekeeping account with Wells Fargo Bank, N.A. (Bank). This relationship offers the convenience of timely funds transfers, as well as consolidated brokerage account and safekeeping account reporting. Wells Fargo provides investment solutions Key features of bank safekeeping services include: © 2018 Wells Fargo Securities. All rights reserved. PDS-1178431 - 07/18 Some product restrictions apply to Wells Fargo Bank, N.A. safekeeping. Direct issue commercial paper, offshore money market mutual funds, mutual funds and foreign securities may not be held in bank safekeeping. Segregation of assets The security positions held in bank safekeeping are physically segregated in third-party depositories under the Bank’s name and ownership and are separate from the security positions of Wells Fargo Securities and its customers’ brokerage accounts. Abiding by federal banking laws and the regulations of the Office of the Comptroller of Currency (OCC), Wells Fargo Bank’s customer accounts are segregated from and not considered part of Wells Fargo's assets. Thus, the account ownership of assets in bank safekeeping accounts remain vested in the customers, and are protected from claims of creditors of the Bank or any other Wells Fargo entity. Audit and regulatory overview Wells Fargo & Company is subject to an annual audit by KPMG Peat Marwick (its external auditor) as well as the periodic review of the Federal Bank regulators and the Office of the Comptroller of the Currency (OCC). In addition, an annual internal audit is conducted by Wells Fargo Audit, Inc., a separate subsidiary of Wells Fargo & Company. The program is designed to evaluate compliance with the Bank's policies and procedures in the Trust Business Manual and laws and regulations to which the Bank is subject. The program also addresses the soundness and adequacy of accounting, operating and administrative controls related to processing of assets. Protection from errors, omissions or fraud Wells Fargo Bank, N.A., is covered by a Professional Liability Insurance policy and a Financial Institution Bond fidelity insurance policy. For more information To determine whether this product is appropriate for you, please consult your investment policy or applicable investment guidelines. Your dedicated Wells Fargo Securities investment representative is available to answer other questions you may have. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including but not limited to Wells Fargo Securities, LLC, a member of NYSE, FINRA, NFA and SIPC, Wells Fargo Prime Services, LLC, a member of FINRA, NFA and SIPC, and Wells Fargo Bank, N.A. Wells Fargo Securities, LLC and Wells Fargo Prime Services, LLC are distinct entities from affiliated banks and thrifts. Investments: NOT FDIC Insured • May Lose Value • No Bank Guarantee Item 2B-190 Item 2B-191 Item 2B-192 Item 2B-193 Item 2B-194 Item 2B-195 Item 2B-196 Item 2B-197 Item 2B-198 Item 2B-199 Item 2B-200 Item 2B-201 Item 2B-202 Item 2B-203 Item 2B-204 Item 2B-205 Item 2B-206 Item 2B-207 Item 2B-208 Item 2B-209 Item 2B-210 Item 2B-211 Item 2B-212 Item 2B-213 Item 2B-214 Item 2B-215 Item 2B-216 Item 2B-217 Item 2B-218 Item 2B-219 Item 2B-220 Item 2B-221 Item 2B-222 Item 2B-223 Item 2B-224 Item 2B-225 Item 2B-226 Item 2B-227 Item 2B-228 Item 2B-229 Item 2B-230 Item 2B-231 Item 2B-232 Municipal Advisor RFP Disclosure This proposal is submitted in response to your Request for Proposal for Comprehensive Banking Services dated August 5, 2022. The contents of this proposal and any subsequent discussions between us, including any and all information and analysis with respect to product is provided to you in reliance upon your compliance with the guidance of the staff of the SEC’s office of Municipal Securities in order for a request for proposal to be consistent with the exemption for responses to requests for proposals or qualifications provided under the municipal advisor rules (the “Muni Advisor Rules”) of the Securities and Exchange Commission (the “SEC”) (240 CFR 15Ba1-1 et seq.). In submitting this proposal (a) Wells Fargo Bank, N.A. (“Wells Fargo”) is not acting as an advisor to City of Palm Desert (“you”) and does not owe a fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to you with respect to the information and material contained in this proposal; (b) Wells Fargo is acting for its own interests; and (c) you should discuss any information and material contained in this proposal with any and all internal or external advisors and experts that you deem appropriate before acting on this information or material. Item 2B-233 Wells Fargo Merchant Services RFP Legal Disclosures Legal entity and contracting parties Wells Fargo Merchant Services, L.L.C. (Wells Fargo Merchant Services) is an alliance between Wells Fargo Bank, N.A. and First Data Merchant Services, L.L.C. Any agreement for merchant services will be entered into between City of Palm Desert and Wells Fargo Merchant Services, L.L.C. and Wells Fargo Bank, N.A. This Agreement is separate from any new or existing agreement between the City and Wells Fargo Bank, N.A. for banking or treasury management services. Furthermore, the Merchant Processing Agreement is separate from agreements for those services, including agreements for any proposed or existing treasury management services used in addition to or in conjunction with merchant processing services. Disclosures Our proposal is intended to be a description of the services we can provide in response to the requirements described in the request for proposal (RFP). If our proposal is accepted in principle, we are willing to negotiate mutually acceptable terms and conditions that shall govern our merchant services relationship with the City. However, by responding to the RFP, we are not indicating our acceptance of any of the terms or conditions contained in the RFP. Our right to negotiate all terms upon award of business will not be affected or diminished by any language in the RFP, including language that purports to be binding on Wells Fargo Merchant Services by virtue of our proposal, including, but not limited to, any signature page statements, certifications, confirmations and the like required as part of an RFP response. We are providing links to our Wells Fargo Merchant Services Terms and Conditions (wellsfargo.com/termscustom0822) and our Operating Rules (wellsfargo.com/operatingrules). We expect these documents to become the final Agreement or part of the final agreement (dependent on your product and service selections) between the City and Wells Fargo Merchant Services if you choose us as your provider. the City should be aware that the processing of credit and debit card transactions is subject to the terms, conditions, policies, and procedures of the Card Organizations and the non- bankcard issuers. A summary of many of the key elements of those Card Organization requirements is provided in our Operating Rules (wellsfargo.com/operatingrules). The terms, conditions, policies, and procedures of the Card Organization and the non-bankcard issuers are independently established and beyond the control of Wells Fargo Merchant Services to negotiate. The Card Organizations govern their mandated fees and assessments, which are subject to change during the term of the Agreement. Pricing disclosures Item 2B-234 Wells Fargo Merchant Services pricing, as provided in our proposal, is based upon the information provided by the City (for example, processing requirements or number of merchant accounts) as of the date the RFP response was submitted. In responding to this RFP, Wells Fargo Merchant Services only agrees to be bound to the pricing we provided therein to the extent that the assumptions upon which it was based were reasonably derived in relation to the information provided by the City as of the date of the creation of that pricing and are accurate and unchanged. In the event that Wells Fargo Merchant Services is the successful bidder, and the City subsequently provides additional information to us that would affect the pricing (including pass through fees paid by the City), Wells Fargo Merchant Services shall not be bound by the pricing provided in the RFP response and shall have the right to revise the pricing based upon the corrected information provided by the City. Furthermore, should Wells Fargo Merchant Services be the successful bidder for this RFP, the City shall be required to execute a Pricing Terms Schedule/Addendum to Pricing Terms document, which is a part of your Agreement. Information contained in this response is valid for 60 days from the date of submittal. Item 2B-235 © 2022 Wells Fargo Bank, N.A. All rights reserved. Commercial Account Agreement Effective May 2022 Contents 02 About this agreement 03 Resolving disputes through arbitration 04 Important legal information 05 Statements and other notices relating to your deposit account 09 Rights and responsibilities 01 Welcome to Wells Fargo 15 Checking and savings accounts 17 Electronic check indemnifications 18 Funds availability policy 20 Available balance, posting order, and overdrafts 21 Additional rules for checks and withdrawals 23 Your account ownership 24 Interest earning accounts 25 Time Accounts (CDs) 26 Electronic banking services 28 Selected services Welcome to Wells Fargo Thank you for opening an account with us. We value your relationship and hope we answered all your questions when you opened your account. Please review this account agreement for further details about your account and related services. What words do we use to refer to you (the customer), Wells Fargo, and this account agreement? • Customer is "company", "you", "your", or "yours". • Wells Fargo Bank, N.A. is "Wells Fargo", "bank", "we", "us" or "our". • This Commercial Account Agreement and the disclosures listed below constitute the "Agreement": - The pricing information and other account-related information - Our privacy policy - Our rate sheets for interest-bearing accounts - Any additional disclosures we provide to you about your account and related services When can you begin using your account? We will notify you when your account and related services may be used. We reserve the right to restrict use of your account and related services until we have approved your use of the account and services and completed setting them up. You should not attempt to use your account or provide any information about your account to any third party until we have confirmed that your account is available to process transactions. Item 2B-236 2 Commercial Account Agreement About this Agreement What information does the Agreement contain? The Agreement: • Explains the terms of your banking relationship with Wells Fargo and applies to new and existing accounts and services, and • Replaces all prior deposit agreements including any oral or written representations. You are responsible for ensuring that any signer on your account is familiar with this Agreement. We suggest you keep a copy of this Agreement - and any further information we provide you about changes to this Agreement - for as long as you maintain your Wells Fargo accounts. Words with specific meanings Certain words have specific meanings as they are used throughout this Agreement. These words and their meanings are defined in this section, and others are found later in this Agreement. Affiliate A bank or other entity that is, directly or indirectly, a wholly or substantially owned subsidiary of Wells Fargo & Company. Account Any business deposit account or commercial deposit account that is not held or maintained primarily for personal, family or household purposes. Examples of accounts include an account owned by an individual acting as a sole proprietor, a partnership, a limited partnership, a limited liability partnership, a limited liability company, a corporation, a joint venture, a non-profit corporation, an employee benefit plan or a governmental unit including an Indian tribal entity. Business day Every day is a business day except Saturday, Sunday, and federal holidays. Collected balance The collected balance is the ledger balance in your account less the deposit float. Deposit float The deposit float is the total dollar amount of items deposited in your account that has yet to be credited as part of your collected balance as a result of the Bank's or applicable affiliate's collection schedule. Investable balance The investable balance is the collected balance in your account less the portion required by law to be held at a Federal Reserve Bank and other adjustments. Item An item is an order, instruction, or authorization to withdraw or pay funds or money from your account. Examples include checks, drafts, and electronic transactions, including ACH. Paper items may be referred to as checks in this Agreement. Ledger balance The ledger balance is the balance in your account after all debits and credits for the business day have been posted. Item 2B-237 3 Commercial Account Agreement Overdraft An overdraft is a negative balance in your account. Signer A person who has your actual or apparent authority to transact business in connection with your account and services. We may rely solely on our records to determine the form of ownership of and the signers on your account. Are we allowed to change the Agreement? Yes. We can change the Agreement by adding new terms or conditions, or by modifying or deleting existing ones. We refer to each addition, modification, or deletion to the Agreement as a modification. Notice of a modification: If we are required to notify you of a modification to the Agreement, we will describe the modification and its effective date by a message in your account statement or by any other appropriate means. Waiver of a term of the Agreement: If we waive a right related to your account under this Agreement on one or more occasions, it does not mean we are obligated to waive the same right on any other occasion. How do you consent to the Agreement and any future modifications to the Agreement? By signing the Agreement or using your account or service, you consent to this Agreement. Continuing to maintain or use the account or service after a modification to the Agreement means that you have consented to the changes. Can you consent to the Agreement electronically? Yes. You may consent to the Agreement using your “Electronic Signature”, as defined in the Electronic Signatures in Global and National Commerce Act (“ESIGN Act”), and we may accept your Electronic Signature on any other account- related document. Under the ESIGN Act, your Electronic Signature will constitute your original and binding signature. The fact that you sign using your Electronic Signature will not, by itself, be grounds for invalidating the document. What happens if a term of the Agreement is determined to be invalid? Any term of the Agreement that is inconsistent with the laws governing your account will be considered to be modified by us and applied in a manner consistent with those laws. Any term of the Agreement that a court of competent jurisdiction determines to be invalid will be modified accordingly. In either case, the modification will not affect the enforceability or validity of the remaining terms of the Agreement. With whom will we communicate about your account? We may provide you or a signer with information about your account. When we receive information from a signer, we treat it as a communication from you. You agree to notify us promptly in writing if a signer no longer has authority on your account. Resolving disputes through arbitration Arbitration Agreement between you and Wells Fargo Upon demand of by you or us, any dispute or claim arising from or relating to this Agreement, or the breach thereof, must be submitted to arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules, and must be heard before three arbitrators if the amount in dispute is U.S. $5,000,000 or more or its equivalent in any other currency, and before one arbitrator for amounts less than U.S. $5,000,000 or its equivalent in any other currency. Arbitration will proceed in a location selected by AAA in the state of the applicable Governing Law, and if there is no such state, the place of arbitration must be New York, NY. The language of the arbitration must be English. Item 2B-238 4 Commercial Account Agreement Judgment on the award rendered by the arbitrators may be entered in any court having competent jurisdiction. This arbitration requirement does not limit the right of you or us to: (a) exercise self-help remedies, including setoff or (b) obtain provisional or ancillary remedies such as injunctive relief or attachment, before, during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of you or us to submit any dispute to arbitration hereunder, including those arising from the exercise of the actions detailed in (a) and (b) of this subsection. Can either Wells Fargo or you participate in class or representative actions? No. Wells Fargo and you agree that the resolution of any dispute arising from the terms of this Agreement will be resolved by a separate arbitration proceeding and will not be consolidated with other disputes or treated as a class. Neither Wells Fargo nor you will be entitled to join or consolidate disputes by or against others as a representative or member of a class, to act in any arbitration in the interests of the general public, or to act as a private attorney general. If any provision related to a class action, class arbitration, private attorney general action, other representative action, joinder, or consolidation is found to be illegal or unenforceable, the entire Arbitration Agreement will be unenforceable. Important legal information What laws govern your account? The laws governing your account include: • Laws, rules, and regulations of the United States, and • Laws of the state in which the office that maintains your account is located, without regard to its conflicts of laws principles. If a different state law applies, we will notify you. Any funds transfer (including a wire transfer) that is a remittance transfer as defined in Regulation E, Subpart B, will be governed by the laws of the United States and, to the extent applicable, the laws of the state of New York, including New York's version of Article 4A of the Uniform Commercial Code, without regard to its conflict of laws principles. What are our rules on illegal transactions? You must not use your account or any relationship you may have with us for any illegal purpose, including “restricted transactions” as defined in the Unlawful Internet Gambling Enforcement Act of 2006 and its implementing regulation, Regulation GG. In our discretion, we may block or otherwise prevent or prohibit those transactions and, further, we may close the account or end our relationship with you. Are we your fiduciary? No. Our relationship to you concerning your account is that of a debtor and creditor. There is no fiduciary, quasi- fiduciary, or special relationship between you and us. Will any person or entity be considered a third party beneficiary under this Agreement? No. No other person or entity will be considered to be a third party beneficiary under this Agreement. Can you use our name or refer to our relationship without our consent? No. You and we will not use each other's name or refer to our relationship in any solicitation, marketing material, advertisement, news release or other written, online or oral communication without specific prior written consent for each such use or release, except that we may use your name as a reference in service proposals if we obtain your prior oral or written approval for such use. Item 2B-239 5 Commercial Account Agreement What is the controlling language of our relationship? English is the controlling language of our relationship with you. If there is a discrepancy between our English- language and translated materials, the English version prevails over the translation. How will we contact you about your account? For us to service your account or collect any amount you owe, we may contact you by telephone, text, email, or mail. We are permitted to use any address, telephone number or email address you provide. You agree to provide accurate and current contact information and only give us telephone numbers and email addresses that belong to you. When you give us a telephone number, you are providing your express consent permitting us (and any party acting on behalf of Wells Fargo) to contact you by calling or texting that telephone number. When we call you, you agree that we may leave prerecorded or artificial voice messages. You also agree that we may use automatic telephone dialing systems in connection with calls or text messages sent to any telephone number you give us, even if it is a mobile phone number or other communication service for which the called party may be charged. What courts may be used to resolve a dispute? Wells Fargo and you each agree that any lawsuits, claims, or other proceedings arising from or relating to your account or the Agreement, including the enforcement of the Arbitration Agreement and the entry of judgment on any arbitration award, will be venued exclusively in the state or federal courts in the state whose laws govern your account, without regard to conflict of laws principles. Statements and other notices relating to your deposit account How do we make account statements and notices available to you? We will mail, send electronically, or otherwise make available to you an account statement reflecting your account activity for each statement period. We will do the same with notices. We will send all account statements and notices to the postal or electronic address associated with your account. Combined account statements: To reduce the number of separate account statements you receive each month, we may combine statements if you have more than one deposit account. If we provide a combined account statement for your accounts, we consider your first account as your primary account. You will receive your account statement at the address listed for your primary account. Statements for accounts in a combined statement will be delivered according to the delivery preference of the primary account. When are your account statements and notices considered received? If there is more than one signer on your account, we may send statements and notices to any one of them (unless you have otherwise instructed us in writing). You assume the risk of loss in the mail. Mailed account statements: When we mail your account statement or notices, we consider it received by you on the second business day after mailing it. Electronic delivery of account statements: Account statements will be made available through Wells Fargo Business Online® Banking or the Commercial Electronic Office®, as applicable, after the end of the statement period. You will be notified by email that the account statement is available for viewing. We consider the account statement to be delivered to you when it is available online. Item 2B-240 6 Commercial Account Agreement What happens if your account statements or notices are returned or undeliverable? Unless otherwise prohibited by the laws governing this Agreement, your account statements or notices will be considered unclaimed or undeliverable if: • Two or more account statements or notices are returned to us through the mail because of an incorrect address, or • We notify you electronically that your account statement or notices are available for viewing at Wells Fargo Business Online® Banking or the Commercial Electronic Office®, as applicable, and we receive email notifications that our message is undeliverable. In either event, we may: - Discontinue sending account statements and notices, and - Destroy account statements and notices returned to us as undeliverable How can you or Wells Fargo change your address for your account? Address change requests you make: You can change the postal or email address or other means by which we make your account statements and notices available to you at any time by notifying us of your request by telephone or email. We will act on your request within a reasonable time after we receive it. Unless you instruct otherwise, we may change the postal or email address only for the accounts you specify or for all or some of your other accounts with us. Address changes we make: We may update your listed address without a request from you if we: • Receive an address change notice from the U.S. Postal Service, • Receive information from another party in the business of providing correct address details that your actual address does not match the listed address for your account or card, or • Identify a need to rely on another address you have provided us. When are notices you send to us effective? Any notice from you is effective once we receive it and have a reasonable opportunity to act on it. What obligations do you have to review account statements and notices and notify us of unauthorized transactions or errors? You are obligated to: • Examine your account statements and notices promptly and carefully. • Notify us promptly of any errors. • Notify us within 30 days after we have made your account statement or a notice available to you of any unauthorized transaction on your account. Note: If the same person has made two or more unauthorized transactions and you do not notify us of the first one within this 30-day period, we will not be responsible for unauthorized transactions made by the same wrongdoer. • Notify us within 6 months after we have made your account statement or a notice available to you if you identify any endorsements which are unauthorized or missing, or other errors relating to endorsements on your checks. You can notify us of unauthorized transactions or errors on your account statement by promptly: • Calling the telephone number listed on your account statement or in notices, or • Sending us a written report (if instructed by us) as soon as possible, and at least within the specified timeframes. Funds transfers are subject to different time periods for notification of errors, as described in the “Fund transfer services” part of this Agreement. Common examples of fund transfers are ACH, wire transfers, and Real-Time Payments (RTP®). What happens if you do not notify us of an unauthorized transaction within the time frames specified above? If you do not notify us of any unauthorized transaction, error, or claim for a credit or refund within the time frames specified above, your account statement or transaction will be considered correct. We will not be responsible for any unauthorized transaction, error, or claim for transactions included in this statement. Item 2B-241 7 Commercial Account Agreement When is a check unauthorized? A check is unauthorized when it is: • Not signed by a signer on your account, or you have not otherwise authorized or benefitted from it, • Forged, or • Altered (for example, the amount of a check or the payee's name is changed). What happens when you report an unauthorized transaction? We investigate any reports of unauthorized activity on your account. After you submit a claim, we may require you to: • Complete and return the claim form and any other documents we require, • Notify law enforcement, and • Cooperate fully with us in our investigation. We can reverse any credit made to your account resulting from a claim of unauthorized transaction if you do not cooperate fully with us in our investigation or recovery efforts, or we determine the transaction was authorized. Are you responsible for taking reasonable steps to help prevent fraud on your account? Yes. You agree to take reasonable steps to ensure the integrity of your account and items drawn on your account or deposited to it. You acknowledge that there is a growing risk of losses resulting from unauthorized items. To help prevent fraud and protect your assets, we recommend that you take these preventive measures: • Assign responsibilities for your account to multiple individuals. The individuals who reconcile statements for your account should be different from the individuals who issue items drawn on your account. • Reconcile statements for your account as you receive them; notify us promptly of any problem. • Contact us promptly if you do not receive the statement for your account when you would normally expect to. • Watch for checks cashed out of sequence or made out to cash. These are classic red flags for embezzlement. • Secure your supply of checks at all times. Stolen checks are a common method of fraud. • Periodically reassign accounting duties, such as reconciling your account or making a deposit. • Review your transaction activity for unexpected fluctuations. For example, compare the percentage of cash deposits to total deposit size. Most businesses will maintain a constant average. A large fluctuation might indicate fraud. • Destroy any checks that you do not intend to use. • Use tamper resistant checks at all times. • Notify us promptly when a signer's authority ends so that his/her name can be deleted from our records for your account, and any cards that we have issued to him/her or online access can be cancelled. • Do not sign blank checks. • Obtain insurance coverage for these risks. This is not an exhaustive list and there may be additional preventive measures you may take to prevent fraud and protect your account. Protection against unauthorized items Does Wells Fargo offer services to help prevent fraud on your account? Yes. We offer services for your account that provide effective means for controlling the risk from unauthorized items. Examples of these services include: • Positive Pay, Positive Pay with payee validation, and Reverse Positive Pay • ACH fraud filter, and • Payment authorization service. Item 2B-242 8 Commercial Account Agreement In addition, we may recommend you use certain fraud prevention practices to reduce your exposure to fraud. Each of these practices is an "industry best practice." Dual custody is an example of an industry best practice. With dual custody, when one user initiates an action, like a payment or a change in the set-up of a service, the action does not take effect until a second user approves the action using a different computer or mobile device than one used to initiate the action. What are potential consequences if you do not implement a fraud prevention service or industry best practice Wells Fargo has recommended? If we have expressly recommended you use a fraud prevention service or industry best practice and you either (a) decide not to implement or use the recommended service or industry best practice, or (b) fail to use it in accordance with the applicable service description or other applicable documentation, then you will be treated as having assumed the risk of any losses that could have been prevented or mitigated by correct use of the recommended fraud prevention service or industry best practice. Lost or stolen checks; unauthorized items If any of your unissued checks have been lost or stolen, or if you learn that unauthorized items are being issued on your account, you agree to notify us at once. To the extent that your failure to notify us hampers our ability to prevent loss, we will be relieved of any liability for those items. Upon receipt of any notice from you, we - without any liability to you - will dishonor any item you, or any signer, has indicated is unauthorized and may: • Close your account and open a new account for you, or • Pay any item presented for payment on your account, provided you have instructed us to pay that item and given us its number. If we open a new account for you and you have authorized a third party to automatically make regular deposits to or withdrawals from your account (such as wire or ACH transfers), we will have no liability to you if you do not receive any regularly scheduled deposit or if a regularly scheduled payment is not made for you because you did not notify that third party in a timely fashion of the number of your new account. When does your account become dormant? Checking accounts, savings accounts, and time accounts (CDs) Generally, your account becomes dormant if you do not initiate an account-related activity for: • 12 months for a checking account, • 34 months for a savings account, or • 34 months after the first renewal for a time account. An account-related activity is determined by the laws governing your account. Examples of account-related activity are depositing or withdrawing funds at a banking location or ATM, or writing a check which is paid from the account. Automatic transactions (including recurring and one-time), such as pre-authorized transfers, payments and electronic deposits (including direct deposits), set up on the account may not prevent the account from becoming dormant. What happens to a dormant account? We put safeguards in place to protect a dormant account which may include restricting the following transactions: • Transfers by telephone, • Transfers or payments through Wells Fargo Business Online ® Banking or the Commercial Electronic Office®, and • Wire transfers (incoming and outgoing). Normal monthly service and other fees continue to apply (except where prohibited by law). If you do not initiate an account-related activity on the account within the time period as specified by state unclaimed Item 2B-243 9 Commercial Account Agreement property laws, your account funds may be transferred to the appropriate state. This transfer is known as "escheat." If your account becomes escheatable, account statements will no longer be available. Your account will be closed. To recover your account funds, you must file a claim with the state. Rights and responsibilities What responsibilities do you and Wells Fargo have to each other? You and we are responsible for complying with the Agreement. We exercise ordinary care when we provide services. When we take a check for processing by automated means, ordinary care does not require us to examine the check. In all other cases, ordinary care requires only that we follow standards that do not vary unreasonably from the general standards followed by similarly situated banks. Except to the extent we fail to exercise ordinary care or to comply with the Agreement, you agree to indemnify and hold us harmless from all claims, demands, losses, liabilities, judgments, and expenses (including attorney's fees and expenses) arising out of or in any way connected with our performance under the Agreement. You agree this indemnification will survive termination of the Agreement. In no event will either Wells Fargo or you be liable to the other for any special, consequential, indirect, or punitive damages. The limitation does not apply where the laws governing your account prohibit it. We will not have any liability to you if your account has non-sufficient available funds to pay your items due to actions we have taken according to the Agreement. Circumstances beyond your control or ours may arise and make it impossible for us to provide services to you or for you to perform your duties under the Agreement. If this happens, neither Wells Fargo nor you will be in violation of the Agreement. Are you obligated to pay our fees? Yes. By continuing to maintain your account you agree to pay our fees according to the pricing information. Why do we charge a recoupment fee? We assess the recoupment fee to partially recover insurance premiums we pay to the FDIC for deposit insurance. The amount of the recoupment fee appears on the periodic statement or client analysis statement for your account and is based on the monthly average ledger balance you maintain in your account. The recoupment fee is subject to change by us at any time without notice. Note: The FDIC charges each insured bank a fee to cover its share of the cost of providing deposit insurance to depositors. The FDIC does not charge a bank's depositors for deposit insurance or require banks to pass the cost of deposit insurance on to their depositors. The FDIC does, however, permit a bank to recoup the cost of deposit insurance from its depositors, so long as the fee the bank charges its depositors does not reveal information that could be used to determine the bank's confidential supervisory ratings or mislead depositors by implying the FDIC is charging the fee. Is your account subject to a deposit balance fee? We reserve the right to assess a monthly deposit balance fee on the average positive collected balance in your business and commercial deposit account(s) with us. When we assess the deposit balance fee, the amount of the fee will appear on the periodic statement or client analysis statement for your account(s). The deposit balance fee is subject to change by us at any time without notice. Item 2B-244 10 Commercial Account Agreement Are you responsible for paying taxes? Yes. Fees may be subject to state and local sales taxes, which vary by location, and will be assessed as appropriate. You also agree to pay an amount equal to any other applicable taxes, including backup withholding tax. How do you pay our fees and expenses? We are permitted to either directly debit your account or invoice you for our fees, expenses, and taxes incurred in connection with your account and related services. We will debit service fees on the day of each calendar month we separately disclose to you, or if that day is not a business day, on the next business day. If there are non-sufficient funds in your account to cover the debit, we may create an overdraft on your account. You agree to promptly pay any invoiced amount. We may assess finance charges on any invoiced amounts that are not paid within 45 days of the date of invoice. Finance charges are assessed at a rate of 1.5% per month (18% per annum) or the highest amount permitted by the laws governing this Agreement, whichever is less. Charges for accrued and unpaid interest and previously assessed finance charges will not be included when calculating finance charges. Payments and other reductions of amounts owed will be applied first to that portion of outstanding fees attributable to charges for accrued and unpaid interest and previously assessed finance charges, then to other fees and charges. If an earnings allowance accrues, do we apply it to your fees and expenses? Yes. If an earnings allowance accrues on your account, we will periodically apply your accrued earnings allowance to eligible fees and expenses (unless we otherwise indicate in writing). If both an earnings allowance and interest accrue on your account, the interest may be shown as an offset to the earnings allowance on the client analysis statement for your account. If your earnings allowance exceeds your total maintenance and activity fees for the statement cycle for your account, the excess credit is not paid to you, nor is it carried forward to the following statement cycle. We may debit your account (or any other account you maintain with us) or invoice you for any amount by which the fees and expenses exceed the accrued earnings allowance on your account. Note: Your earnings allowance is calculated by applying the earnings credit rate to the investable balance available in your account. The earnings credit rate is a variable rate that we may change at any time. May we use the funds in your accounts to cover debts you owe us? Yes. We have the right to apply funds in your accounts to any debt you owe us. This is known as setoff. When we set off a debt you owe us, we reduce the funds in your accounts by the amount of the debt. We are not required to give you any prior notice to exercise our right of setoff. A debt includes any amount you owe individually or together with someone else, both now and in the future. It includes any overdrafts and our fees. We may set off for any debt you owe us that is due or past due as allowed by the laws governing your account. If your account is an unmatured time account, then we may deduct any early withdrawal fee or penalty. This may be due as a result of our having exercised our right of setoff. If you have a sweep account, you authorize us to redeem your shares in the designated money market fund and apply the proceeds to any amount you owe us. Our right to setoff is in addition to and apart from any other rights under any other security interest you may have granted to us. Do you grant us a security interest in your accounts with us? Yes. To ensure you pay us all amounts you owe us under the Agreement (e.g., overdrafts and fees), you grant us a lien on and security interest in each account you maintain with us, including your accounts with any affiliate. By opening and maintaining each account with us, you consent to our asserting our security interest if the laws governing the Agreement require your consent. Our rights under this security interest are in addition to and apart from any other rights under any Item 2B-245 11 Commercial Account Agreement other security interest you may have granted to us. Can Wells Fargo benefit from having the use of funds in customers' non-interest bearing accounts? Yes. We may use these funds to reduce our borrowing from other sources such as the Fed Funds market, or invest them in short-term investments such as our Federal Reserve Account. This benefit may be referred to as spread. It is not possible to quantify the benefit to us that may be attributable to a particular customer's funds. That's because funds from all customers' non-interest earning accounts are aggregated to reduce our borrowing costs and for investment, and our use of funds may vary depending on a number of factors including interest rates, Federal Funds rates, credit risks, and our anticipated funding needs. Our use of funds as described in this paragraph has no effect or impact on your use of and access to funds in your account. What is the applicable exchange rate? The applicable exchange rate is the exchange rate we set and use for you when we convert one currency to another currency. It includes a markup. The markup factors include without limitation costs incurred, market risks, and our desired return. The exchange rate we provide to you may be different from exchange rates you see elsewhere. Foreign exchange markets are dynamic and rates fluctuate over time based on market conditions, liquidity, and risks. We reserve the right to refuse to process any request for a foreign exchange transaction. What is FDIC "pass-through" insurance? FDIC "pass-through" insurance is FDIC insurance that could exceed the standard maximum deposit insurance amount (currently $250,000 per depositor in the same ownership right and capacity). When you use your account to hold funds on behalf of third parties who are the beneficial owners of the funds, your account may qualify for FDIC pass-through insurance, provided you meet FDIC account titling and recordkeeping requirements. With FDIC pass-through insurance, each beneficial owner's funds held in your account are aggregated with other funds the beneficial owner holds in accounts with us in the same ownership right and capacity. The beneficial owner's aggregated funds are insured by the FDIC up to the standard maximum deposit insurance amount. Examples of holding funds on behalf of third parties include funds you hold as an agent, nominee, guardian, executor, custodian or funds held in some other capacity for the benefit of others. What are the FDIC's recordkeeping requirements for pass-through FDIC insurance when your account has "transactional features"? For any account with "transactional features" you agree to provide the FDIC (a) with the required information about the beneficial owners of the funds in your account, (b) in the required format, (c) within 24 hours of our failure. Your account has "transactional features" when funds can be transferred from the account, as detailed in 12 CFR 370.2(j). What are the consequences if you are unable to provide the FDIC with the necessary data on the beneficial owners of funds in your account in the required format in the specified time frame? As soon as the FDIC is appointed as our receiver, a hold may be placed on your account so that the FDIC can conduct the deposit insurance determination. This hold will not be released until the FDIC obtains the necessary data to enable it to calculate the deposit insurance. You understand and agree that your failure to provide the necessary data to the FDIC in the required format and in the specified time frame may result in a delay in receipt of insured funds by the beneficial owners of the funds in your account and legal claims against you from the beneficial owners. Detailed information about the FDIC's requirements for pass-through FDIC insurance coverage are available at the FDIC's website. Notwithstanding other provisions in this Agreement, these three FDIC subsections survive after the FDIC is appointed as our receiver, and the FDIC is considered a third party beneficiary of these subsections. What are we allowed to do if there is an adverse claim against your account? An adverse claim occurs when: Item 2B-246 12 Commercial Account Agreement • Any person or entity makes a claim against your account funds, • We believe a conflict exists between or among the signers on your account, or • We believe a dispute exists over who has account ownership or authority to withdraw funds from your account. In these situations, we may take any of the following actions without any responsibility to you: • Continue to rely on the documents we have on file for your account. • Honor the claim against your account funds if we are satisfied the claim is valid. • Freeze all or a part of the funds in your account until we believe the dispute is resolved to our satisfaction. • Close your account and send a check for the available balance in your account payable to you or to you and each person or entity who claimed the funds. • Pay the funds into an appropriate court. We also may charge any account you maintain with us for our fees and expenses in taking these actions (including attorney's fees and expenses). How do we handle legal process? Legal process includes any levy, garnishment or attachment, tax levy or withholding order, injunction, restraining order, subpoena, search warrant, government agency request for information, forfeiture or seizure, and other legal process relating to your account. We are permitted to accept and act on any legal process we believe to be valid, regardless of how and where it is served, including if process is served in locations, states, or jurisdictions other than the jurisdiction in which the account was opened or the account, property, or records are located. We may, but are not required to, provide notice of legal process relating to your account(s). Any fees or expenses (including attorney’s fees and expenses) or losses we incur as a result of responding to legal process related to your account(s) are your responsibility. We may charge these costs to any account you maintain with us. If you carry special insurance for employee fraud or embezzlement, can we require you to file your claim with your insurance company before making any claim against us? Yes. If you have special insurance for employee fraud or embezzlement, we reserve the right to require you to file your claim with your insurance company before making any claim against us. In that event, we will consider your claim only after we have reviewed your insurance company's decision, and our liability to you, if any, will be reduced by the amount your insurance company pays you. Are there any minimum balance requirements or other restrictions? We may impose minimum balance requirements or other restrictions on your account, which we may disclose to you. Are we allowed to restrict access to your account? Yes. If we suspect any suspicious, unauthorized, or unlawful activities, we can restrict access to your account and other accounts with us that you maintain or control. Are we allowed to convert your account without your request? Yes. We can convert your account to another type of account (by giving you any required notice). Are we allowed to terminate or suspend a service related to your account? Yes. We can terminate or suspend specific services (e.g., wire transfers) related to your account without closing your account and without prior notice to you. You can discontinue using a service at any time. Item 2B-247 13 Commercial Account Agreement When can we close your account? • We reserve the right to close your account at any time. • If we close your account, we may send the remaining balance on deposit in your account by mail or credit it to another account you maintain with us. • We will not be liable for any loss or damage that may result from not honoring items or recurring payments or withdrawals that are received after your account is closed. • After your account is closed, you will remain responsible for any negative balance. When can you close your account? • You can request to close your account at any time if the account is in good standing (e.g., does not have a negative balance or restrictions such as holds on funds, legal order holds, or court blocks on the account). At the time of your request, we will assist you in withdrawing or transferring any remaining funds, bringing your account balance to zero. Whether you or we close the account, you agree to maintain on deposit in your account sufficient funds (determined in our sole discretion) to cover outstanding items to be paid from your account, charge-backs including returned deposited items, and our fees and expenses. • All outstanding items need to be processed and posted to your account before you make a request to close. Once the account is closed, items will be returned unpaid. • Any recurring payments or withdrawals from your account need to be cancelled before you make a request to close (examples include bill payments and direct deposits). Otherwise, they may be returned unpaid. • We will not be liable for any loss or damage that may result from not honoring items or recurring payments or withdrawals that are received after your account is closed. • At the time of your request to close: • For interest-earning accounts, your funds stop earning interest from the date of your request. • The Agreement continues to apply. • If you have requested closing your account and a positive balance remains, we may send you a check for the remaining balance. • After your account is closed, you will remain responsible for any negative balance. Are transactions subject to verification by us? Yes. All transactions are subject to our verification. This includes cash, items, or other funds offered for deposit for which we have provided a receipt. We do not verify all transactions. We reserve the right to reverse or otherwise adjust, at any time without prior notice to you, any debit or credit we believe we have erroneously made to your account. Are we required to accept all deposits to your account? No. We may decline all or part of a deposit, including a cash deposit. Some examples are: • An item made out to a payee not on your account, • An item with an endorsement we are unable to verify, • A check or draft issued on a credit account, • A very large cash deposit, and • A non-U.S. item. When we are unable to verify an endorsement on an item, we can also decline to pay, cash, or send the item for collection. We can require all endorsers to be present and we may require you to deposit the item instead of permitting you to cash it. For non-U.S. items, please see the response to "How do we handle non-U.S. items?". We may require any person wanting to make a cash deposit to provide an acceptable form of identification before we accept the deposit for processing. Who is responsible to make sure the declared amount of funds offered for deposit is accurate? It is your responsibility, and we have no obligation to make sure the declared amount of your deposit is accurate. If we find a discrepancy exists between the declared and the actual amount of the funds, we are permitted to debit or credit Item 2B-248 14 Commercial Account Agreement your account and we may notify you if any adjustments are made. We are also permitted to use the declared amount as the correct amount to be deposited and to not adjust a discrepancy if it is less than our standard adjustment amount. We are permitted to vary our standard adjustment amount from time to time without notice to you and to use different amounts depending on account type. You may arrange for us to adjust all discrepancies identified during any verification without using our standard adjustment amount by contacting your relationship manager. What happens if there is an error in the amount of a deposit? If you notify us of an error in the amount of a deposit shown on your account statement within 30 days after receiving your account statement or it is made available to you, we will review the deposit and make any adjustment we determine is appropriate, subject to any applicable fees. If you do not notify us during this timeframe, we will consider the deposit amount on your statement to be correct. This means that if the actual amount is less than the amount on the statement, the difference will become your property. If the actual amount is more than the amount shown on the statement, the difference will become our property. Are we allowed to obtain credit reports or other reports about you? Yes. We can obtain a credit or other report about you to help us determine whether to open or maintain an account. Other reports we can obtain include information from the following: 1) motor vehicle departments, 2) other state agencies, or 3) public records. Are we required to obtain a tax identification number certification from you? Yes. U.S. Treasury regulations require us to determine the tax residency of all customers and payees who could receive income that is reportable to the IRS. We accomplish this by obtaining a Form W-9 from all U.S. taxpayers and a type of Form W-8 from all foreign customers. • For U.S. taxpayers, the Form W-9 is how we document U.S. tax residency and obtain a Taxpayer Identification Number ("TIN") from the primary owner of each account that earns reportable income. Until we have received the Form W-9 and TIN, we are required to apply backup withholding to that income. • Foreign individuals (also referred to as nonresident aliens) and foreign entities document their tax residency outside the U.S. on the applicable type of Form W-8. That form also allows us to apply the correct withholding rate or exemption to your income earned in the U.S. If you do not provide a valid type of Form W-8, we are required to apply the 30% withholding rate, or in some cases, presume you are an uncertified U.S. taxpayer subject to backup withholding on all income and gross proceeds regardless of whether or not it is U.S. sourced. • Accounts jointly owned by at least one foreign individual or entity must provide a Form W-8 or Form W-9 for all of the joint owners. • Foreign individuals provide a Form W-8BEN. Foreign entities that are the beneficial owner of the income provide a Form W-8BEN-E unless they can make a special withholding exemption claim and instead provide either a Form W-8EXP or Form W-8ECI. • Entities that act as intermediaries or flow-through entities receiving income on behalf of someone else provide a Form W-8IMY. In some cases, that Form W-8IMY must also include a withholding statement that allocates the income to each of the beneficial owners and copies of the tax certification documentation for those underlying beneficial owners. If you own your account as an individual or sole proprietor, upon your death we must be provided with the estate's or successor's IRS Form W-9 or Form W-8. If these are not provided, we may either refuse to pay interest earned on your account from the date of your death or apply backup withholding on the income earned after the date of your death. When do we share information about your account with others? Generally, if we do not have your consent, we will not share information about your account. However, we may share information about your account under the following circumstances: • To comply with the laws governing this Agreement; Item 2B-249 15 Commercial Account Agreement • In connection with examinations by state and federal banking authorities; • To comply with any legal process, including a subpoena, search warrant, or other order of a government agency or court; • When we determine that disclosure is necessary or appropriate in order to complete a transaction; • To verify the existence and condition of your account for a third party, such as a merchant or credit bureau; • To provide information to your legal representative or successor; • When reporting the involuntary closure of your account; • When we conclude that disclosure is necessary to protect you, your account, or our interests; • To our agents, independent contractors, and other representatives in connection with the servicing or processing of your account or account transactions, account analysis, or similar purposes; • To our affiliates and affiliated companies; and • If you give your permission. How do we protect your data? We are part of an international business with affiliated companies, employees, and service providers (collectively "Personnel") located in the United States and a number of countries around the world. Any information or data we obtain in connection with or relating to your accounts or services, including personal information (collectively "Data"), may be accessed by Personnel in any of these countries. Any of these Personnel will be subject to the requirements of our information security program, which includes policies to protect Data and limit access to those Personnel with a reasonable business need to know. Are we allowed to monitor and record our communications with you? Yes. We can monitor, record, and retain your communications with us at any time without further notice to anyone, unless the laws governing your account require further notice. Monitored and recorded communications include: • Telephone conversations, • Electronic messages, • Electronic records, or • Other data transmissions. Is your wireless operator authorized to provide information to assist in verifying your identity? Yes. As a part of your account relationship, we may rely on this information to assist in verifying your identity. You authorize your wireless operator (AT&T, Sprint, T-Mobile, US Cellular, Verizon, or any other branded wireless operator) to use your mobile phone number, name, address, email, network status, customer type, customer role, billing type, mobile device identifiers (IMSI and IMEI) and other subscriber status details, if available, solely to allow verification of your identity and to compare information you have provided to Wells Fargo with your wireless operator's account profile information for the duration of the business relationship. Checking and savings accounts What are the requirements for a correct endorsement? An endorsement is a signature, stamp, or other mark on the back of a check. If you have not endorsed a check that you deposited to your account, we may endorse it for you. We may also send for collection any unendorsed check that is payable to you that you have deposited to your account. Item 2B-250 16 Commercial Account Agreement Are we bound by restrictions or notations on checks? No. We are not bound by restrictions or notations, such as "void after six months," "void over $50," or "payment in full." When you cash or deposit a check with a notation or restriction, you are responsible for any loss or expense we incur relating to the notation or restriction. What is a substitute check? A substitute check is created from an original check; under federal law, it is legally equivalent to that original check. A substitute check contains an accurate copy of the front and back of the original check and bears the legend: "This is a legal copy of your check." You can use it the same way you would use the original check. As noted in the legend, a substitute check is the same as the original check for all purposes, including proving that you made a payment. Any check you issue or deposit that is returned to you may be returned in the form of a substitute check. You agree that you will not transfer a substitute check to us, by deposit or otherwise, if we would be the first financial institution to take the substitute check, unless we have expressly agreed in writing to take it. What happens if you breach a warranty associated with an item? If you breach any warranty you make to us under the laws governing your account with respect to any item, you will not be released or discharged from any liability for the breach so long as we notify you of the breach within 120 days after we learn of the breach. If we fail to notify you within this 120-day period, you will be released from liability and discharged only to the extent our failure to notify you within this time period caused a loss to you. How do we handle non-U.S. items? A non-U.S. item is an item 1) payable in a currency other than U.S. dollars or 2) drawn on a financial institution that is not organized under U.S. law. We are not required to accept a non-U.S. item for deposit to your account or for collection. We may accept non-U.S. items on a collection basis without your specific instruction to do so. We can reverse any amount we have credited to your account and send the item on a collection basis even if we have taken physical possession of the item. If we accept a non-U.S. item, the U.S. dollar amount you receive for it will be determined by our applicable exchange rate that is in effect at the time of deposit or our receipt of final payment (less any associated fees) of the collection item. If the non-U.S. deposited item is returned unpaid for any reason, we will charge the amount against your account (or any other account you maintain with us) at the applicable exchange rate in effect at the time of the return. For information on the applicable exchange rate, see "What is the applicable exchange rate?" in the "Rights and responsibilities" section of this Agreement. Our funds availability policy does not apply to a non-U.S. item. What is our responsibility for collecting a deposited item? We are responsible for exercising ordinary care when collecting a deposited item. We will not be responsible for the lack of care of any other bank involved in the collection or return of a deposited item, or for an item lost in collection or return. What happens if we send an item for collection? We may, upon notice to you, send an item for collection instead of treating it as a deposit. This means that we send the item to the issuer's bank for payment. Your account will not be credited for the item until we receive payment for it. Our funds availability policy does not apply to an item we accept for collection. What happens when a deposited or cashed item is returned unpaid? We can deduct the amount of the deposited or cashed item from your account (or any other account you maintain with us). We can do this when we are notified that the item will be returned. We do not need to receive the actual item (and usually do not receive it). We can do this even if you have withdrawn the funds and the balance in your account is not sufficient to cover the amount we hold or deduct and your account becomes overdrawn. In addition, we will charge you all applicable fees and reverse all interest accrued on the item. Item 2B-251 17 Commercial Account Agreement We may place a hold on or charge your account for any check or other item deposited into your account if a claim is made or we otherwise have reason to believe the check or other item was altered, forged, unauthorized, has a missing signature, a missing or forged endorsement, or should not have been paid, or may not be paid, or for any other reason. When the claim is finally resolved, we will either release the hold or deduct the amount of the item from your account. We are not legally responsible if we take or fail to take any action to recover payment of a returned deposited item. What happens when an electronic payment is reversed? We may deduct the amount of an electronic payment credited to your account (e.g., direct deposit) that is reversed. We can deduct the amount from any account you have with us at any time without notifying you. You agree to promptly repay any overdrafts resulting from the reversed payment. Are you responsible for assisting in reconstructing a lost or destroyed deposited item? If a deposited item is lost or destroyed during processing or collection, you agree to provide all reasonable assistance to help us reconstruct the item. Electronic check indemnifications What warranties do we provide for electronic checks and electronic returned checks? An "electronic check" and an "electronic returned check" mean an electronic image of, and electronic information derived from, a paper check or a paper returned check. When we transfer or present an electronic check or electronic returned check, we provide the following warranties: • Image Quality Warranty: We guarantee that the electronic image of a check accurately represents all of the information on the front of the check as of the time that the original check is truncated, and the electronic information includes an accurate record of all MICR line information required for a substitute check and the amount of a check. • No Double Debit Warranty: We guarantee that the warrantee will not receive a presentment of or otherwise be charged for an electronic check, an electronic returned check, the original check, a substitute check, or a paper or electronic representation of a paper substitute check, in a way that the warrantee will be asked to make payment on a check that it has already paid. When we transfer an electronic check for collection or payment, we make the image quality warranty and the no double debit warranty to the transferee bank, any subsequent collecting bank, the paying bank, and the drawer. When we transfer an electronic returned check for return, we make the image quality warranty and the no double debit warranty to the transferee returning bank, the depository bank, and the owner. What indemnities are applicable to electronic checks and electronic returned checks? You will indemnify, defend, and hold us harmless from and against all liabilities, damages, claims, obligations, demands, charges, costs, or expenses (including reasonable fees and disbursements of legal counsel and accountants) awarded against or incurred or suffered (collectively, "losses and liabilities") by us arising directly or indirectly from or related to the transfer or return of an electronic check or an electronic returned check on your behalf. If we suffer any losses or liabilities arising directly or indirectly from or related to a breach of either the image quality warranty or the no double debit warranty, you will reimburse us and not hold us responsible or liable. What indemnities are applicable to remote deposit capture services? By providing the remote deposit capture service to you, we are required to indemnify and reimburse a depository bank that accepts the original check from which an electronic check is created for losses incurred by that depository bank if the loss is due to the check having already been paid. If we suffer any losses or liabilities arising directly or indirectly from or related to that type of depository bank indemnity obligation, you will indemnify and reimburse us and not hold us Item 2B-252 18 Commercial Account Agreement responsible or liable. What indemnities are applicable to electronically created items? If we transfer or present an "electronically created item" and receive settlement or other consideration for it, we are required to indemnify and reimburse each transferee bank, any subsequent collecting bank, the paying bank, and any subsequent returning bank against losses that result from the fact that: • The electronic image or electronic information of the electronically created item is not derived from a paper check; • The person on whose account the electronically created item is drawn did not authorize the issuance of the electronically created item or to the payee stated on the item; or • A person receives a transfer, presentment, or return of, or otherwise is charged for an electronically created item in such a way that the person is asked to make payment based on an item or check it has paid. If we suffer any losses or liabilities arising directly or indirectly from or related to that type of electronically created item indemnity obligation, you will indemnify and reimburse us and not hold us responsible or liable. Funds availability policy When can you withdraw funds? Our funds availability policy is to make funds from your checking deposit available to you on the first business day after the day we receive your deposits. Funds from the deposits listed below are available on the first business day after the day of your deposits, if you make the deposit in-person to one of our employees or agents and you use a special deposit slip we provide: • State and local government checks that are payable to your company. • Cashier's, certified, and teller's checks that are payable to your company where we are not the issuer or drawee. While we generally make funds from your check deposits available to you on the first business day after the day we receive the deposits, our policy makes funds available according to an availability schedule or schedules we provide or make available to you, subject to, among other things, the location of the deposit transaction or the manner in which the deposit is made. Our funds availability policy relating to other types of deposits is described below. If we delay the availability of a deposit, the length of the delay varies depending on the type of deposit as explained below. Once they are available, you can withdraw the funds in cash. We will use the funds to pay checks and other items presented for payment and applicable fees that you have incurred. When is your deposit considered received? For determining the availability of your deposits, every day is a business day, except Saturdays, Sundays, and federal holidays. If you make a deposit before our established cutoff time on a business day that we are open, we will consider that day to be the day your deposit is received by us. For deposits granted same calendar day availability as described below, the calendar day you make the deposit will be considered the day of deposit. For all other deposits, if you make a deposit after our cutoff time or on a day we are not open, we will consider the day your deposit is received by us to be the next business day we are open. Our established cutoff time is when a branch closes for business and may vary by location. The cutoff time for checks deposited at a Wells Fargo ATM is 9:00 p.m. local time (8:00 p.m. in Alaska). Any deposits placed in a "night depository" before the established deadline on a business day we are open will be credited to your account by the close of business that day. Deposits placed in the "night depository" after the established Item 2B-253 19 Commercial Account Agreement deadline will be credited to your account by the close of the next business day we are open. Same business day availability The following deposits will be available on the business day we receive the deposit: • Incoming wire transfers. • Electronic direct deposits. • Cash deposited at a teller window. • Checks drawn on us. If you do not make your deposit in person to one of our employees (for example, if you mail the deposit), funds from these deposits will be available on the second business day after the day we receive your deposit. For example, if we receive your mailed deposit on Monday, the funds will be available on Wednesday. Longer delays may apply. In some cases, we will not make all the funds that you deposit by check available to you on the first business day after the day of your deposit. Depending on the type of check you deposit, funds may not be available until the second or third business day after the day of your deposit. The first $225 of your deposit, however, may be available on the first business day after the day of your deposit. Except as otherwise explained in this paragraph, if we are not going to make all funds from your deposit available on the business day of deposit or the first business day after the day of deposit, we will notify you at the time you make your deposit. We will also tell you when the funds will be available. If your deposit is not made directly to a Wells Fargo employee, or if we decide to take this action after you have left the premises, we will mail you the notice by the first business day after we receive your deposit. If you need the funds from a deposit right away, you may ask us when the funds will be available. In addition, funds you deposit by check may be delayed for a longer period under the following circumstances: • We believe a check you deposit will not be paid. • You deposit checks totaling more than $5,525 on any one day. • You redeposit a check that has been returned unpaid. • You have overdrawn your account repeatedly in the last 6 months. • There is an emergency, such as a failure of computer or communications equipment. We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. The funds will generally be available no later than the seventh business day after the day of your deposit. Holds on other funds (check cashing) If we cash a check for you that is drawn on another bank, we may withhold the availability of a corresponding amount of funds that are already in your account. Those funds will be available at the time funds from the check we cash would have been available if you had deposited it. Holds on other funds (other account) If we accept a check for deposit that is drawn on another bank, we may make funds from the deposit available for withdrawal immediately but delay your ability to withdraw a corresponding amount of funds that you have on deposit in another account with us. The funds in the other account would then not be available until the time periods that are described in this policy. Item 2B-254 20 Commercial Account Agreement Available balance, posting order, and overdrafts How do we determine your account's available balance? • Your account’s available balance is our most current record of the amount of money in your account available for your use or withdrawal. We use the available balance to process your transactions during the day (e.g., wire transfers and other electronic transactions). We also use the available balance when we process your transactions during our nightly processing. We calculate your available balance as follows: We start with the ending daily account balance from our prior business day nightly processing that includes all transactions deposited to or paid from your account. • We subtract from this balance any holds placed on a deposit to your account and any holds placed due to legal process. • We add pending deposits that are immediately available for your use (including cash deposits, electronic deposits, and the portion of a paper check deposit we make available; see “Funds availability policy” section for details). • We subtract pending withdrawals we have either received (such as wire transfers and other electronic transactions) or are known to us (such as your checks we receive for payment from your account) but have not processed. How do we post transactions to your account? We post transactions each business day (Monday through Friday except federal holidays) during our nightly processing. Once we process a transaction, we post the results to your account. There are three key steps to this process. The most common types of transactions are processed as described below. 1. We determine the available balance in your account (as described above) that we can use to pay your transactions. 2. We sort your transactions into three categories: deposits, “must-pay” transactions, and checks and certain ACH payments. • Deposits. We credit your account for deposits, including cash and check deposits and incoming electronic transfers, received before the cutoff time at the location the deposit or transfer was made. • “Must-pay” transactions. A “must-pay” transaction is a withdrawal/payment we have previously authorized and cannot return unpaid, such as account transfers, and teller-cashed checks. If we receive more than one of these transactions for payment from your account, we will generally sort and pay them based on the date and time we received them. Multiple transactions that have the same time will be sorted and paid from lowest to highest dollar amount. • Checks and certain ACH payments. Finally, we use your remaining funds to pay to pay your checks and preauthorized ACH payments (such as bills you pay by authorizing a third party to withdraw funds directly from your account). If there is more than one of these types of transactions, they will be sorted by the date and time we received them. Multiple transactions that have the same time will be sorted and paid from lowest to highest dollar amount. 3. If the available balance in your account is not enough to pay all of your transactions, we will decide whether to pay your transaction and overdraw your account or return your transaction unpaid. Item 2B-255 21 Commercial Account Agreement • Important Note: When we receive multiple transactions on the same day and the available balance in your account is not enough to pay all the transactions, we reserve the right to choose the order in which we pay the transactions, including paying the highest dollar amount first or in any other order we determine in our sole discretion. What is your responsibility if your account has an overdraft? If you have an overdraft on your account (including transactions we have paid on your behalf into overdraft, plus any fees), you must promptly make a deposit or transfer to return your account to a positive balance. Additional rules for checks and withdrawals What identification do we request to cash items presented over the counter by a non-customer? For these transactions, we require acceptable identification, which can include a fingerprint from the person presenting your item. We may not honor the item if the person refuses to provide us with requested identification. Are there special rules if you want to make a large cash withdrawal or deposit? We may place reasonable restrictions on a large cash withdrawal. These restrictions include requiring you to provide five business days' advance notice to ensure we have sufficient cash on hand. We do not have any obligation to provide security if you make a large cash withdrawal. If you want to deposit cash for a very large amount, we have the right to require you to provide adequate security or exercise other options to mitigate possible risks. Can you perform transactions at an affiliate? Yes. You may make deposits to and withdrawals from your account at an affiliate, provided the affiliate agrees. If you make a deposit to your account at an affiliate, that affiliate's collection schedule and funds availability policy will determine when the deposited funds will be considered collected and available. If an affiliate cashes an item for you, we may place a hold on your account for a corresponding amount of funds. If the item is later returned to the affiliate for any reason, we may debit one or more of your accounts for the amount of the item. Are we responsible for reviewing checks for multiple signatures? No. We are not responsible for reviewing the number of signatures on your account. We do not accept any duty to enforce multiple signature requirements. If you indicate that more than one signature is required, this indication is for your own internal procedures and is not binding on us. Are we required to honor dates and special instructions written on checks? No. We may, without inquiry or liability, pay a check even if it: • Has special written instructions indicating we should refuse payment (e.g., "void after 30 days" or "void over $100"); • Is stale-dated (i.e., the check's date is more than 6 months in the past), even if we are aware of the check's date; • Is post-dated (i.e., the check's date is in the future); or • Is not dated. We may also pay the amount encoded on your check in U.S. dollars, even if you wrote the check in a foreign currency or made a notation on the check's face to pay it in a foreign currency. The encoded amount is in the line along the bottom edge of the front of the check where the account number is printed. Can you use a facsimile or mechanical signature? Yes. If you use a facsimile or computer-generated signature and/or a logo (including a stamp), any item appearing to use your facsimile or computer-generated signature and/or logo will be treated as if a signer on your account had actually signed it. Item 2B-256 22 Commercial Account Agreement Are we liable for paying a consumer ACH debit entry on your account? No. Under the ACH operating rules, certain types of ACH debit entries may only be presented on a consumer account ("a consumer ACH debit entry"). We will have no obligation to pay, and no liability for paying, any consumer ACH debit entry on your account. What is the acceptable form for your checks? Your checks must meet our standards, including paper stock, dimensions, and other industry standards. Your checks must include our name and address, as provided by us. Certain check features, such as security features, may impair the quality of a check image that we or a third party create. We reserve the right to refuse checks that do not meet these standards or cannot be processed or imaged using our equipment. We are not responsible for losses that result from your failure to follow our check standards. How do you reorder checks? You can reorder checks by mailing the reorder form enclosed in your current order of checks or by calling us at the telephone number shown on your account statement. If you or a third party prints its items, we shall have no liability to you if we are unable to process these checks by automated means. How do you stop payment on a check? You may request a stop payment on your check in a time and manner allowing us a reasonable opportunity to act on it before we pay, cash, or otherwise become obligated to pay your check. Each stop payment order is subject to our verification that we have not already paid or otherwise become obligated to pay the check from your account. This verification may occur after we accept your stop payment order. In order to issue a stop payment order on a check, we request the following information: • Your bank account number, • The check number or range of numbers, • The check amount or amounts, • The payees' names, and • The date on the check. We are not responsible for stopping payment on a check if you provide incorrect or incomplete information about the check. We are also not responsible if we do not pay a check for which a valid stop payment order is in effect. What is the effective period for a stop payment order? A stop payment order on an item is valid for 6 months. We may pay a check once a stop payment order expires. If you do not have our STOP AUTO-RENEWAL Service on your account, you must place a new stop payment order if you do not want it to expire. We treat each renewal as a new stop payment order. We will charge you for each stop payment order you place (as well as each renewal). If you have our STOP AUTO-RENEWAL Service on your account, your stop payment order renews annually for up to six 12- month periods, unless you otherwise notify us in writing. How do you cancel a stop payment order? To cancel a stop payment order, we must receive your request in a time and manner allowing us a reasonable opportunity to act on it. Are you still responsible if we accept a stop payment on a check? Yes. Even if we return a check unpaid due to a stop payment order, you may still be liable to the holder (e.g., a check cashing business) of the check, and potentially additional amounts that the holder may be due under the laws governing Item 2B-257 23 Commercial Account Agreement this Agreement. How can you prevent a post-dated item from being paid before its due date? A post-dated item is an item you issue with a date in the future. We are not responsible for waiting to honor the item until that date, unless you instruct us to do so through the use of a stop payment order for the item. You are responsible for notifying us to cancel the stop payment order when you are ready to have that item paid. How do you stop payment for preauthorized electronic fund transfers? For information on placing a stop payment order on an ACH debit entry, please refer to "Fund transfer services" In the "Electronic banking services" section of this Agreement. Your account ownership Can you assign ownership of your account? No. No assignment of your account will be valid or binding on us, and we will not be considered to have knowledge of it, until we consent and the assignment is noted in our records. However, by noting the assignment, we do not have any responsibility to assure that the assignment is valid. Any permitted assignment of your account is subject to our setoff rights. What if an owner does not sign account documentation? If a customer identified in our records as an owner or a co-owner of an account does not sign the account application or other account-related documentation, it does not prevent us from treating the customer as an owner or a co-owner of that account; we are not liable to anyone as a result. Are all joint owners responsible for liabilities on your account? Yes. All joint owners are each individually and jointly responsible for any overdraft on your account, regardless of who caused or benefited from the overdraft. If there is a setoff, an enforcement of our security interest in your account, or legal action (such as a third party garnishment, seizure, forfeiture, or tax levy) affecting any co-owner, we have the right to treat all funds in the account as belonging to the customer against whom the setoff, enforcement of the security interest, or other legal action is directed. If your account is closed for unsatisfactory handling, we may report all joint owners to the consumer reporting agencies. What happens upon death or incompetence of a signer or account owner? Please notify us promptly if you learn or suspect an account owner or signer has been declared incompetent by a court or a legal authority, or has died. When we receive proper notice, we may: • Freeze the account until we receive documents verifying the incapacity or death and instructions for the funds remaining in the account, • Pay (without inquiring) any item authorized by the account owner before being declared incompetent or dying, • Return or reverse deposits made to the account, and • Apply funds in the account to any debt the account owner owes us before recognizing the rights to any remaining funds of a surviving joint owner or other person. If we are liable for taxes because we released funds in an account after the account owner's death, the account owner's estate is responsible for reimbursing us for those taxes. Upon notifying us of the death or incompetence of a business owner, the business entity will need to provide documentation evidencing any change in the ownership or control of the entity following applicable legal formalities. Item 2B-258 24 Commercial Account Agreement Interest earning accounts What interest rate applies to an interest earning account? When you open an interest earning account, we will provide you with the current interest rate and Annual Percentage Yield (APY) for your account. Interest earning accounts earn interest at a variable rate, except time accounts. We may change the interest rate for variable-rate accounts at any time. The interest rate may vary depending on your daily balances. How do we calculate earned interest? We may use either the daily balance method or the average daily balance method to calculate interest. Unless we have specified otherwise in writing, we will use the daily balance method to calculate interest. The daily balance method applies a daily periodic rate to principal each day. The average daily balance method applies a periodic rate to the average daily collected balance for the period. The average daily balance is calculated by adding principal each day and dividing by the number of days in the period. If your account is a tiered-rate account, we may pay the same interest rate on more than one tier. When does a deposit begin accruing interest? Cash deposits begin accruing interest the same business day a deposit is credited to your account. If you deposit an item such as a check, interest begins accruing on the business day we receive credit for the item. Is interest compounded and when is it credited? Interest will compound on a daily basis. For checking and savings accounts, interest will be credited on a monthly basis. For time accounts, we will notify you separately as to the frequency with which interest will be credited to your account. Can you specify a target balance on your accounts? Yes. If you maintain multiple accounts with us, you may, with our consent, designate in writing one of these accounts as your "principal account" and one or more additional accounts as "target balance accounts." For each target balance account, you will separately specify to us in writing the ledger balance or collected balance which you wish to maintain in that account (the "target balance"). At the end of each business day, we will determine the applicable balance on deposit in each target balance account. If the applicable balance in a target balance account is greater than its target balance, we will transfer to the principal account the funds necessary to bring the applicable balance to the target balance. If the applicable balance is less than the target balance, we will transfer to the target balance account the funds necessary to bring the applicable balance to the target balance. We may, but will not be required to, transfer funds even if the transfer would create an overdraft or exceed the collected balance on deposit in the principal account. When are interest adjustments disclosed in your account statement? An interest adjustment may be reflected on your account statement in a month later than the month in which it occurs. What is the difference between Annual Percentage Yield (APY) and Annual Percentage Yield Earned (APYE)? • The Annual Percentage Yield (APY) is a percentage rate reflecting the total amount of interest paid on an account based on the interest rate and the frequency of compounding for a 365-day period. • The Annual Percentage Yield Earned (APYE) is an annualized rate that reflects the relationship between the amount of interest actually earned on your account during the statement period and the average daily balance in the account for the statement period. We calculate both your APY and APYE according to formulas established by federal regulations. The APYE appears on your account statement. Item 2B-259 25 Commercial Account Agreement Do we have the right to require 7 days written notice before you withdraw money from your savings account? Yes. We have the right to require 7 days written notice before you withdraw money from your savings account. Time accounts (CDs) What are time accounts? Time accounts include deposits which are payable at the expiration of a specified term, no less than seven calendar days after the date of deposit. We may also refer to a time account as a CD or a Certificate of Deposit, even though we do not issue a paper certificate when opening the account or require a paper certificate to close the account. The time account's maturity date is the last day of the term for the time account. The maturity date is printed on your receipt. When can you withdraw funds from your time account? You may withdraw funds from your time account on the maturity date without a penalty. You may also generally withdraw funds without a penalty within the seven calendar days after the maturity date (grace period). You may be charged a penalty if you make a withdrawal at any other time. How is the early withdrawal penalty assessed? If you withdraw funds from your time account before the maturity date, an early withdrawal penalty will be assessed. For terms: • Less than three months (or less than 90 days), the fee is one month's interest. • Three months (or 90 days) through 12 months (or 365 days), the fee is three months' interest. • Over 12 months through 24 months, the fee is six months' interest. • Over 24 months, the fee is 12 months' interest. The minimum fee is $100. The early withdrawal penalty is based on the principal amount withdrawn, at the interest rate on your time account at the time of withdrawal. For purposes of determining the amount of the early withdrawal penalty, one month's interest is equal to one year's interest - at the interest rate in effect at the time of withdrawal - divided by 12. The amount of the early withdrawal penalty is deducted from earned interest. If the penalty is greater than the earned interest, the difference is deducted from the principal. In no event will the early withdrawal penalty for a withdrawal during the first six days after the date of deposit be less than seven days' simple interest. Can you deposit additional funds into your time account? You can only deposit additional funds during the grace period. Will your Annual Percentage Yield (APY) change if you withdraw interest before maturity? The APY we disclose to you assumes the interest you earn will remain on deposit until your time account matures. If you withdraw your earned interest before maturity, your account will earn less interest over time and the actual APY will be less than the disclosed APY. How does your time account renew? Your time account will automatically renew at maturity: • Typically for a similar term unless we inform you prior to maturity of a different term; and • At our interest rate in effect on the maturity date for a new time account of the same term and amount, unless we have notified you otherwise. Item 2B-260 26 Commercial Account Agreement Electronic banking services Fund transfer services The following terms and conditions apply to funds transfers to or from your account. These terms and conditions are in addition to, and not in place of, any other agreements you have with us about funds transfers. The terms "funds transfer," "funds-transfer system," "payment order," and "beneficiary" are used here as defined in Article 4A of the Uniform Commercial Code, as adopted by the state whose laws govern this Agreement. Rules of funds transfer systems Funds transfers to or from your account will be governed by the rules of any funds transfer system through which the transfers are made, including Fedwire, the National Automated Clearing House Association, the Electronic Check Clearing House Organization, any regional association (ACH), the Clearing House Interbank Payments System (CHIPS), the Society for Worldwide Interbank Financial Telecommunications (SWIFT), and the RTP system (RTP System). We are under no obligation to honor, in whole or in part, any payment order or other instruction that could result in our violation of applicable law, including requirements of the U.S. Department of the Treasury's Office of Foreign Assets Control and the Financial Crimes Enforcement Network. Sending funds transfers In acting on your transfer instructions, we may use any means of transmission, funds transfer system, clearing house, or intermediary bank that we reasonably select. Notice of funds transfers We will notify you of funds electronically debited from or credited to your account through the account statement covering the period in which the transaction occurred. We are under no obligation to provide you with any additional notice or receipt Reliance on identification numbers • If a payment order or other instruction to transfer funds describes the party to receive payment inconsistently by name and account number, we may make the payment based on the account number, even if it identifies a party different from the named recipient. • If an instruction or order to transfer funds describes a participating financial institution inconsistently by name and identification number, we may rely on the identification number as the proper identification of the financial institution. Duty to report unauthorized or erroneous funds transfers You will exercise ordinary care to determine whether a funds transfer to or from your account was either not authorized or erroneous. You will also notify us of the facts within a reasonable time, not exceeding 14 days after you have received your account statement from us on which the funds transfer appears or you otherwise have notice of the funds transfer, whichever is earlier. You must notify us within 14 days to be entitled to a refund from us. If you do not notify us within 14 days, we will be entitled to retain payment for the funds transfer. Erroneous payment orders We have no obligation to detect errors you make in payment orders - for example, an instruction to pay a beneficiary not intended by you, or to pay an amount greater than the amount you intended, or a transmission of a duplicate payment order previously sent by you. If we detect an error on one or more occasions, we will not be obligated to detect errors in any future payment order. ACH transactions In addition to the other terms in the Agreement, the following terms and conditions apply to payments to or from your account that you transmit through an ACH: • Your rights for payments to or from your account will be based on the laws governing your account. Item 2B-261 27 Commercial Account Agreement • When we credit your account for an ACH payment, the payment is provisional until we receive final settlement through a Federal Reserve Bank or otherwise receive payment. • If a payment is credited to your account and we do not receive final settlement or payment, we are entitled to a refund from you for the amount credited to your account. • You authorize any Originating Depository Financial Institution (ODFI) to initiate, according to ACH Operating Rules, ACH debit entries to your account for presentment or re-presentment of items written or authorized by you. Reversal or return of ACH transactions Under the ACH Rules, we can return any non-consumer ACH debit entry as unauthorized until midnight of the business day following the business day we post the entry to your account. (For example, if we post the entry on Tuesday, we can return it up to midnight on Wednesday.) For us to meet this deadline, you are required to notify us to return any non- consumer ACH debit entry as unauthorized by the cutoff time we separately disclose. The cutoff time is currently 3:00 PM Central Time. (In the example above, you would need to notify us by 3:00 PM Central Time on Wednesday). If you do not notify us in a timely manner of the unauthorized non-consumer ACH debit entry, we will not be able to return it without the cooperation and agreement of the originating bank and the originator of the debit entry. Any other effort to recover the funds must occur solely between you and the originator of the entry. Stop payment orders on ACH debit entries You may request a stop payment order for an ACH debit entry that has not already been paid from your account. An "ACH debit entry" is an order or request for the withdrawal of money from your account through ACH. To be effective, a stop payment order must be received in a time and manner that gives us a reasonable opportunity to act on it. If you provide oral instructions to stop payment on an ACH debit entry, we may require confirmation in writing. If that written confirmation is not received, we may remove the stop payment order after 14 days. An instruction to revoke a stop payment order must be received in a time and manner that gives us a reasonable opportunity to act on it. To place a stop payment order on an ACH debit entry, you must provide: • Your account number, • Amount of the ACH debit entry, • Effective date of the ACH debit entry, and • Name associated with the originator of the debit entry. We may request additional information and may use only a portion of the required information to identify the ACH debit entry. We may be able to place a stop payment order based on the company identification number of the originator of the ACH debit entry, but this may stop all ACH entries received from this sender. Additional information on ACH debit entries Any information provided by you that is incorrect or subject to change (for example, if the originator changes its company identification number or individual identification number) may result in payment of the ACH debit entry. You acknowledge this risk and agree that you are responsible for notifying the originator of the ACH debit entry that your authorization has been revoked. You agree to indemnify and reimburse us and hold us harmless from and against any loss incurred by us as a result of our paying an ACH debit entry if any of the information relied on in the stop payment order is incorrect or incomplete (or as a result of us not paying an ACH debit entry for which a valid stop payment order is in effect). Receiving RTP payments The following additional terms apply to any real-time payments we receive for credit to your account through the RTP System. The terms "sender," "receiver," and "sending participant" are used here as defined in the System Rules governing RTP payments ("RTP Rules"). In addition to the RTP Rules, RTP payments will be governed by the laws of the state of New York, including New York's version of Article 4A of the Uniform Commercial Code, as applicable, without regard to its conflict of laws principles. • The RTP System may be used only for eligible payments between a sender and receiver with accounts located in the Item 2B-262 28 Commercial Account Agreement United States. You may not send or receive payments on behalf of any person or entity not domiciled in the United States. RTP payments that are permitted under the RTP Rules and our requirements will be considered eligible payments for purposes of this Agreement. • RTP payments cannot be cancelled or amended by the sender. If we receive a message from a sending participant requesting return of an RTP payment received for credit to your account, we may notify you of that request. You are not obligated under the RTP Rules to comply with any such request for return of funds. Any dispute between you and the sender of an RTP payment should be resolved between you and the sender. • If you do not wish to accept an RTP payment received for credit to your account, you may request that we return that payment to the sender. We may, at our sole discretion, attempt to honor that request, but will have no liability for our failure to do so. • RTP payments are typically completed within 30 seconds of transmission of the RTP payment by the sender, unless the RTP payment fails or is delayed due to a review by us or the sending participant, such as for fraud, regulatory, or compliance purposes. Transaction limits imposed by the RTP System or sending participant may also prevent RTP payments from being received for credit to your account. Selected services Stagecoach Deposit® - ATM Deposit Only Card Service. You may elect to use Wells Fargo's Stagecoach Deposit® Deposit Only Card Service by completing and returning to us the setup form for the service. This service allows you to make deposits to your account using a Stagecoach Deposit® ATM Deposit Only card ("Deposit Card") at a designated Wells Fargo ATM ("ATM") or in a Wells Fargo branch. When you make deposits at a designated Wells Fargo ATM, you will make those deposits according to the instructions we provide. You will gain access to the ATM using the Deposit Card and a Personal Identification Number ("PIN"); you assume the risk of misuse of both. We will provisionally credit each deposit to your account based on the amount you key into the ATM. Your ATM deposits are subject to the standard cut-off time established for the ATM into which the deposit was made and our funds availability policy applicable to your account. If the dollar amount of your deposit - as determined by us - differs from your total (as shown on your ATM receipt), we will send you a statement showing the amount of this difference. You agree that our count of the dollar amount of your deposit will be conclusive and binding on you. You will have full responsibility for each deposit and its contents until the deposit has been completely and physically accepted into the ATM. If you claim any portion of a deposit was lost or stolen while in our custody, you acknowledge that you have the burden of proving your claim. If you order supplies for the ATM Deposit Service through the ATM, you authorize us to initiate debits to your account and credits to the accounts of third party vendors to cover the cost of those supplies provided to you. Those transfers may be processed through an automated clearing house or any other means chosen by us, and will be subject to the rules of the funds transfer system used by us. Your authorization for the transfers will remain in full force and effect until we have received written notification from you of its termination in a time and manner as to afford us and any third-party vendor a reasonable opportunity to act on it. Stagecoach Deposit® - Post Verify Service. If you elect to use our Stagecoach Deposit® - Post Verify Service, you will prepare, package, and deliver Stagecoach deposits to us according to our instructions. We will provisionally credit your account for the currency shown on the deposit ticket enclosed in your Stagecoach deposit bag as follows: • Same day credit for deposits delivered to one of our offices before that office's cut-off time on any business day we are open or for deposits placed in night depository before 6:00 a.m. on any business day we are open; or • Next business day credit for deposits delivered to one of our offices on any business day we are open on or after the office's cut-off time or on any non-business day. All Stagecoach deposits are subject to our acceptance and verification. We will verify the currency in your Stagecoach deposit bag either at a later time in our office or when your Stagecoach deposit bag is delivered to our cash vault. Checks will be verified when they are delivered to our check processing center. We reserve the right to adjust (debit or credit) your Item 2B-263 29 Commercial Account Agreement account if we determine that the amount shown on your deposit ticket is incorrect. Because the frequency of armored courier transportation from our offices to our vaults varies from office to office, the time it takes to verify your Stagecoach deposit may vary, depending on the office to which your Stagecoach deposit bag is delivered. In most cases, adjustments will be made and notification will be sent within three business days. Adjustments will be effective when they are processed. Overdraft Protection This is an optional service you can add to an eligible checking account by linking up to two eligible accounts (one savings, one credit). We will use available funds in your linked account(s) to authorize or pay your transactions if you don't have enough money in your checking account. If you link two accounts, you may tell us which account to use first to transfer/ advance funds. If you do not specify an order, we will first transfer funds from your linked savings account. • Transfers from linked savings account. If the available balance in your savings account is $25 or more and can cover the overdraft, we will transfer the exact amount needed or a minimum of $25. If the available balance in your savings account is less than either $25 or the amount needed, we will transfer the available balance. • Advances from linked credit card or line of credit account. If the available credit in your credit card account is $25 or more and can cover the overdraft, we will advance the exact amount needed or a minimum of $25. If the available credit in your credit card account is less than either $25 or the amount needed, we will advance the available credit. Advances from an eligible linked Wells Fargo line of credit will be made in increments of $100 or $300 (See your Credit Account Agreement for specific details). Debit Card Overdraft Service Debit Card Overdraft Service allows us to approve (at our discretion) your ATM and everyday (one-time) debit card transaction(s) if you do not have enough money in your checking account or in accounts linked for Overdraft Protection at the time of the transaction. With this service, ATM and everyday (one-time) debit card transactions may be approved into overdraft at our discretion and an overdraft fee may apply. If you make a covering transfer or deposit (subject to our funds availability policy) by the posted cutoff time on the same business day as the transaction, no fees will be assessed. Debit Card Overdraft Service does not apply to checks and other transactions such as Bill Pay, ACH, or recurring debit card transactions (such as utilities or health club memberships). We may continue to authorize or pay these transactions into overdraft, at our discretion, and our standard overdraft fees and policies will apply. If Debit Card Overdraft Service is not added and there is not enough money in your checking account or accounts linked for Overdraft Protection, your ATM and everyday (one-time) debit card transactions will be declined, and there will be no fees for declined transactions. If the service is not added and your ATM or everyday (one-time) debit card transaction creates a negative balance during posting, there will not be an overdraft fee. Debit Card Overdraft Service is automatically added to eligible business accounts at account opening. You can add or remove the service at any time. Debit Card Overdraft Service is not available for certain accounts, such as accounts for government entities or savings accounts. Debit Card Overdraft Service is a discretionary service that we may remove for a variety of reasons including excessive overdrafts or returned items, as we determine. Wells Fargo's standard overdraft coverage Our standard overdraft coverage is when, at our discretion, we pay items, such as checks or automatic payments (e.g., ACH payments) into overdraft rather than returning them unpaid. You can request to remove our standard overdraft coverage from your account by speaking to a banker. Important: If standard overdraft coverage is removed from your account, the following will apply if you do not have enough money in your checking account or in accounts linked for Overdraft Protection to cover a transaction: Item 2B-264 30 Commercial Account Agreement • We will return your checks and automatic payments (such as ACH payments) and you could be assessed fees by merchants. • We will not authorize ATM and everyday (one-time) debit card transactions into overdraft. If your account is enrolled in Debit Card Overdraft Service, the service will also be removed. We will not authorize certain transactions (such as cashed checks, recurring debit card transactions, or Bill Pay transactions) into overdraft. However, if these transactions are authorized when your account has enough money but are later presented for payment when your account does not have enough money, we will pay the transaction into overdraft and charge an overdraft fee. Important information about fees: • Fees may be assessed with each item paid into overdraft subject to the following: • No overdraft fee will be assessed on ATM and everyday (one-time) debit card transactions unless Debit Card Overdraft Service is added to your account. The merchant informs us if a debit card transaction is a one-time or recurring transaction. An overdraft fee can be assessed on recurring debit card transactions and any other item we pay into overdraft. • Any overdraft fee assessed will be deducted from your account during the morning of the next business day following our nightly process. • We will track transactions that reduced your available balance while pending and caused overdraft fees on other transactions. If these transactions are presented for payment within 10 business days after they first appeared as pending, we will waive any overdraft fees on those transactions. In rare circumstances, the merchant presents transactions for payment with a different identification code than was used when the transaction was sent for authorization and we are unable to match them. Item 2B-265 Page 1 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Treasury Management Product Enrollment Customer Information Customer name CEO Company ID Street address City State ZIP Country name Country Code (if applicable) Primary contact Phone Email address Fax CEO® Users Set-up User name User ID (if existing) Select one or more CEO Products for the user(s) listed above: Treasury Management Products Not in Administration: Autolink Bill Manager Electronic Document Delivery Invoice Manager Receivables Manager Retail Lockbox Image Archive Reverse Positive Pay Sweep and Fed Funds – Statements and Confirmation Wells Fargo Business Online Treasury Management Products in Administration: ACH Payments1 User ACH Payments1 Administrator ACH Fraud Filter Alerts ARP Register Maintenance Basic Banking Canadian Treasury Services Cash Concentration Cash Vault Change Orders Change Orders Inquiry Supply Order (specify): Centralized Disbursements Centralized Disbursements - Clients Claims Payments Deposit Inquiry Deposit Maintenance Desktop Deposit E-Box Decisioning Fed Funds Image Image Positive Pay Item 2B-266 Page 2 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Item Detail Inquiry Service Lockbox Lockbox Correspondence Payment Manager Online Payment Manager File Validation Tool Returned Items SAFE Transmission Statements and Notices2 Supplier Payments Transaction Search Treasury Information Reporting WellsTAX®. Accounts: ACH IDs (File ID/Company ID): 1 This only covers giving users access to the high level product in the CEO and the ACH application. Additional approval is required to set up detailed product entitlement within the ACH application. 2 Includes the following: Client Analysis Statements, Commercial Checking/Savings Account Statements, Deposit Adjustment Notices, Merchant Notices, Multi Currency Account Statements and Stop Notices Internal Bank use only Does the customer have Administration, or is it included in the current request?Yes No CEO® Users Set-up User Name User ID (if existing) Select one or more CEO Products for the user(s) listed above: ACH Payments1 User ACH Payments1 Administrator ACH Fraud Filter Cards2 Payment Manager Online Other Treasury Management Products not in Administration3 Cash Vault (specify):Deposit Inquiry Change Orders Inquiry Change Orders Supply Order Accounts: ACH IDs (File ID/Company ID): 1 This only covers giving users access to the high level product in the CEO and the ACH application. Additional approval is required to set up detailed product entitlement within the ACH application. 2 Recognition Card. 3 Autolink, Bill Manager, Document Retrieval, Electronic Document Delivery, Invoice Manager, Payment and Delivery Preferences, Receivables Manager, Retail Lockbox Image Archive, Reverse Positive Pay, Sweep & Fed Funds - Statements & Confirmations, & Wells Fargo Business Online (Single Sign On). 4 Alerts, ARP Register Maintenance, Basic Banking, Canadian Treasury Services, Cash Concentration, Centralized Disbursements, Centralized Disbursements – Clients, Claims Payments, Deposit Maintenance (Smart Decision), Desktop Deposit, E-Box Decisioning, Fed Funds, Image, Image Positive Pay, Item Detail Inquiry Service, Lockbox, Lockbox Correspondence, Payment Manager File Validation Tool, Returned Items, SAFE Transmission, Statements & Notices (Client Analysis Statements, Commercial Checking/Savings Account Statements, Deposit Adjustment Notices, Merchant Notices, Multi Currency Account Statements and Stop Notices), Supplier Payments, Transaction Search, Treasury Information Reporting, & WellsTAX®. INTERNAL BANK USE ONLY Does the customer have Administration, or is it included in the current request?Yes No RSA SecurID Token Request Set-up Please complete the information below to manage RSA SecurID Tokens for Company and Users RSA SecurID tokens are mailed to Company Administrators. If the Company Administrator's mailing address is different than the address listed above in the Customer Information section, please indicate the correct mailing address below: Item 2B-267 Page 3 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Company Administrator name Phone number Street Address (tokens cannot be shipped to post office boxes): City State ZIP For new users • New token: To order a token for the first time for a user. • Assign token: To assign a token to a new user from the supply of tokens accumulated in your Company Token Pool. For users who have a token today (to request changes for existing users): • Replace token: To order a replacement token for an existing user if there are no tokens available in the Company Token Pool. • Assign token: To assign a token to a new user from the supply of tokens available in your Company Token Pool. • Un-assign token: To remove a token from a user and return the token to you Company Token Pool for reassignment. Please begin collecting and securely retaining unassigned tokens instead of discarding them. • Delete token: To delete a token completely. This option will remove the token from a user and your Company Token Pool. Once a token is deleted, it can no longer be reused and should be discarded. Follow your local e- waste disposal regulations to dispose of old tokens. User Name #1 User ID (for existing CEO® users) Token Serial #*ACH Payments Admin Yes No New User New token Assign token* Existing User (Select one box only)Replace token Assign token*Un-Assign token*Delete token* CEO® Administration Set-up Type of Request - Select request type with corresponding start date. New Change (Make selections only for options that should change)Start Date: Company Administrator - Complete applicable fields. Company Administrators automatically gain access to all Administration functions. If selecting Administrator you will need to specify the detailed Administration functionality that should be entitled. A minimum of two (2) Company Administrators is required for Dual Custody. Each Administrator will be sent a token (unless one has been assigned already) and will be authorized as an administrator for all or specific company authorized Commercial Electronic Office® (CEO®) portal services. Company Administrator Name Email address Token Serial Number (If reassigning existing token from token pool ) User ID (if existing) Administrators You will need to specify the detailed Administration functionality that should be entitled to an Administrator level user. Each Administrator will be sent a token (unless one has been assigned already) and will be authorized as an administrator for all or specific company authorized Commercial Electronic Office® (CEO®) portal services. Administrator #1 Detailed Setup - Complete applicable fields Item 2B-268 Page 4 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Administrator name Email address Token Serial Number (If reassigning existing token from token pool) User ID (if existing) User Administration Options User Maintenance Administrator Maintenance Reset Password If granting User Maintenance or Reset Password which users can the Administrator view and manage? All Users Specific Users List User names or User IDs If granting User Maintenance which CEO Services can the user administer? All CEO Services Specific CEO Services CEO Services: If granting User Maintenance which Accounts can the user administer? All Accounts Specific Accounts Accounts: If granting User Maintenance which ACH IDs can the user administer? All ACH IDs Specific ACH IDs ACH IDs: WellsOne® Commercial Card use only All Divisions Specific Divisions List Divisions that can be administered. Company Administration Options Manage User Defined Lists All User List Specific User List: Specify User List(s) that can be administered. All Account List Specific Account List: Specify Account List(s) that can be administered. Manage Company Dual Custody settings Manage Account nicknames Manage ACH Custom names Access to Administration Reports Manage tokens Item 2B-269 Page 5 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Company Service Options Manage Company Alerts settings Manage Company Statement & Notices settings Manage Company Wires settings Custody Option Single Custody - Non-Standard Administration Procedure - Customer has declined to use dual custody, which is part of Bank's standard CEO® Administration procedures. With dual custody, an authenticated second user approves select high-risk activities. Customer has instead elected to use single custody. Customer acknowledges the significantly reduced security, and recognizes the risks and losses that may materialize as a result of its decision to use single custody. Dual Custody - Bank's standard CEO Administration procedures also include dual custody for select, high-risk activities. With dual custody, an authenticated second user approves these activities. There is no additional charge for dual custody. Forced Dual Custody - By selecting this option, you agree that Wells Fargo will control the dual custody settings for all products and transactions initiated in the CEO Administration service. You will not be able to change the dual custody settings in Administration, as these may only be modified by contacting your bank representative. Customized Forced Dual Custody - By selecting this option, you agree to work with your banker to customize your dual custody preferences and select the Administration transactions that will require dual custody. Once these customizations have been established you will not be able to modify or remove them through the CEO Administration service, as they may only be changed by contacting your banker. If you enroll in a new CEO product, it will not automatically be placed in dual custody, unless you contact you bank representative. Customized Forced Dual Custody Settings - Select the products you would like under dual custody in the CEO Administration service. Only select products for which your company is enrolled. Additionally, specify the CEO Administration service functions you would like under dual custody. Product Custody setting ACH Payments (incl. Domestic and International)Forced Dual Custody Single Custody Administration Forced Dual Custody Single Custody Alerts Forced Dual Custody Single Custody Basic Banking Forced Dual Custody Single Custody Canadian Treasury Solutions Forced Dual Custody Single Custody Cash Concentration Forced Dual Custody Single Custody Centralized Disbursements Forced Dual Custody Single Custody Centralized Disbursements - Clients Forced Dual Custody Single Custody Claims Payments Forced Dual Custody Single Custody Credit Management Forced Dual Custody Single Custody Dealer Inventory Finance Forced Dual Custody Single Custody Deposit Maintenance Forced Dual Custody Single Custody Derivatives Access Forced Dual Custody Single Custody Desktop Deposit®Forced Dual Custody Single Custody E Box® Decisioning Forced Dual Custody Single Custody Fed Funds Forced Dual Custody Single Custody Foreign Exchange Forced Dual Custody Single Custody Item 2B-270 Page 6 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Product Custody setting Fraud Manager: ACH Fraud Filter Forced Dual Custody Single Custody ARP Register Maintenance Forced Dual Custody Single Custody Image Positive Pay Forced Dual Custody Single Custody Image Forced Dual Custody Single Custody Institutional Investing – Reporting Forced Dual Custody Single Custody Item Detail Inquiry Service Forced Dual Custody Single Custody Lockbox Forced Dual Custody Single Custody Payment Manager®Forced Dual Custody Single Custody Returned Items Forced Dual Custody Single Custody SAFE Transmission Forced Dual Custody Single Custody Statements & Notices Forced Dual Custody Single Custody Supplier Payments Forced Dual Custody Single Custody Transaction Search Forced Dual Custody Single Custody Treasury Information Reporting Forced Dual Custody Single Custody Warehouse Lending Finance Forced Dual Custody Single Custody WFEDSM - Wells Fargo Electronic DepositSM Forced Dual Custody Single Custody Wells Capital Management Forced Dual Custody Single Custody WellsOne® Virtual Card Payments Forced Dual Custody Single Custody WellsTAX® Payments Forced Dual Custody Single Custody Wells Fargo Business Online®Forced Dual Custody Single Custody Wires Forced Dual Custody Single Custody Administration settings Custody settings Add/Edit User Forced Dual Custody Single Custody Password reset Forced Dual Custody Single Custody Hide Secret Question and Answer Forced Dual Custody Single Custody Wires limits and authorizations Forced Dual Custody Single Custody Desktop Deposit Company preferences Forced Dual Custody Single Custody CEO® Wires Set-up New Change Item 2B-271 Page 7 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Company Authorization - (For existing CEO Wires customers, only complete values in this section if an update is requested. For New requests confirm and update all fields in this section.) Cumulative Funds Transfer Daily Limit (Default - 0) Duplicate Check Number Of Days (Default - 10)Default Wire Fee Assignment (select one) $ Shared (Default) Beneficiary Originator Value Date Roll Forward File Import (File Import and Payment Manager Import)Get Rate Yes No (Default)Yes (Default)No Yes (Default)No Additional Approver Limits (Optional) Wires $Book Transfer $Drawdown $ Complete the following regarding Funds Transfer Information for specific payment types – (For new and existing CEO Wires customers, only complete values in this section if an update is requested. For New requests; at least one (1) Wire Type must be selected). Wire Type Services allowed Number of Verifiers for Templated Wires (default is 1) Numbers of Verifiers for Freeform Wires (default is 1 Wire Transfers (Domestic, International, and Federal Tax Payment) Templated Only Freeform Only Templated and Freeform N/A - No Change N/A - No Change Drawdown Templated Only Freeform Only Templated and Freeform N/A - No Change N/A - No Change Book Transfer Templated Only Freeform Only Templated and Freeform N/A - No Change N/A - No Change Template Maintenance Not Applicable N/A - No Change Not Applicable Account Authorization - Account Services Limits (For existing CEO Wires customers, only complete values in this section if an update is requested. For New customers at least one (1) account in this section is required). Account number Cumulative Daily Limit Associated application $Wires Drawdowns Book Transfers Template Maintenance $Wires Drawdowns Book Transfers Template Maintenance $Wires Drawdowns Book Transfers Template Maintenance Company Default Settings (optional User Limits) For companies choosing to utilize Company Default User Settings (Default User Limits); complete all fields to specify optional default limits for users. Enter User information below and select the Use Company Default Limit checkbox. Application type Individual Create/ Modify/ Delete Limit Cumulative Daily Create/ Modify/Delete Limit Individual Approve/Reject Limit Cumulative Daily Approve/ Reject Limit Wire Transfers Drawdown Item 2B-272 Page 8 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Application type Individual Create/ Modify/ Delete Limit Cumulative Daily Create/ Modify/Delete Limit Individual Approve/Reject Limit Cumulative Daily Approve/ Reject Limit Book Transfer Template Maintenance -------------------------------------------------------- User # 1 Information - Complete all fields User name User ID (if CEO user) User Settings (For new and existing CEO Wires customers, only complete values in this section if an update is requested. For New customers without Administration; at least one (1) user in this section is required. Note: For customers in dual custody without Administration at least two (2) users are required). Get rate File Import Yes No Yes No Services Type Allowed Individual Create/Modify/ Delete Limit Individual Approve/Reject Limit Cumulative Daily Approve/Reject Limit Additional Approver Limit* Cumulative Create/Modify/ Delete Limit Wire Transfer Templated Only Freeform Only Templated and Freeform Book Transfers Templated Only Freeform Only Templated and Freeform Drawdowns Templated Only Freeform Only Templated and Freeform User Account Authorizations - Provide account number and funds transfer service authorization type. Account Number Wires Create/Modify/Delete Approve/Reject Book Transfers Create/Modify/Delete Approve/Reject Drawdowns Create/Modify/Delete Approve/Reject Template Maintenance Create/Modify/Delete Approve/Reject Account Number Wires Create/Modify/Delete Approve/Reject Book Transfers Create/Modify/Delete Approve/Reject Drawdowns Create/Modify/Delete Approve/Reject Template Maintenance Create/Modify/Delete Approve/Reject Voice Wires Set-up Type of request:New Update existing information Delete existing information Account numbers (list accounts to be debited for each wire transfer) 1) G/L DDA 2) G/L DDA 3) G/L DDA Advice information (additional fees apply for these services) Item 2B-273 Page 9 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) For fax or email notification on intraday wire activity use the InfoFax setup form. Mail Advice (this paper-based service is no longer available to add)Delete Mail Advice Mailing address for PINs (if blank, items will be mailed to address on primary statement mailing address) Mail PINs to: Authorized callers (people authorized to initiate wires) $ Limit = Use "N" if unlimited. The limit applies to all functions unless noted otherwise. If no limit is noted we will set the limit as unlimited. Initiation Type = If no Initiation Type is noted, we will set the individual up for both Repetitive and Non-Repetitive Wire Initiation. Complete by checking appropriate box: R=Repetitive / B=Both Repetitive and Non-Repetitive. Authorized callers First and Last name $ Limit Phone number including area code Initiation type R B Alternate Account to be charged for wire fees List account only if wire fees are to be assessed to this account. (Alternate account to be charged must be an Analyzed account. Not available to Retail customers.) DDA AU and G/L Optional Verify Callback Service (does not apply to repetitive wires) Selecting this fee-based service requires a minimum of two persons with wire transfer authority because the initiator of a wire cannot also approve the wire. If the form does not indicate an Authorized Approver other than the initiator, the optional Verify Callback Service cannot be provided. Authorized Approvers First and Last name $ Limit Phone number including area code Payment Authorization Service This service is part of, and will be subject to the terms and conditions stated in the Commercial Account Agreement ("Agreement"). This set-up form supersedes any and all prior payment authorization service forms set up on the referenced account numbers. Termination: The Service(s) may be immediately terminated by you or us at any time with or without cause by giving written notice to the other party. Type of request - Select request type. (Refer to the reference guide for complete instructions.) Account-specific Request Add Payment Authorization Service features checked below to all existing Subaccounts listed under the Master Account – NOTE: Must attach subaccount list. Does not apply to Maximum Check Amount Authorized Payment Service. Blanket Company Level Approval – Checking this box covers all future accounts and/or subaccounts owned by the specified legal entity. (A separate form must be completed for each legal entity.) For Account-specific requests, enter individual account number or Master account number. Does not apply to Blanket Company Level Approval and do not list all Subaccounts. Item 2B-274 Page 10 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Maximum Check Amount Authorized Payment Service (not available in conjunction with Positive Pay or Perfect Presentment) Service: Under the Maximum Check Amount Authorized Payment Service (the "Service") we will automatically (without your specific approval) return unpaid (marked "REFER TO MAKER") checks presented to us drawn against your account specified below which exceeds the Maximum Dollar Authorized Payment Amount specified below: Check one:Add service Change amount Delete service Maximum Dollar Authorized payment amount: Account Number(s): Maximum Check Cashing Amount Authorized Payment Service (not available in conjunction with Positive Pay or Perfect Presentment) Service: Under the Maximum Check Cashing Amount Authorized Payment Service (the "Service") we will (without your specific approval) refuse encashment of checks presented to us through our branch/store network drawn against your account specified below which exceed the Maximum Check Cash Amount specified below: Check one:Add service Change amount Delete service Maximum Dollar Authorized payment amount: Account Number(s): Maximum Over the Counter Amount Authorized Payment Service Service: Under the Maximum Over the Counter Amount Authorized Payment Service (the "Service") we will (without your specific approval) refuse withdrawal requests presented to us through our branch/store network drawn against your account specified below which exceeds the Maximum Over the Counter Withdrawal Amount specified below Check one:Add service Change amount Delete service Maximum Over the Counter Withdrawal: Account Number(s): Checks to Individuals Authorized Payment Service Service: Under the Checks to Individuals Authorized Payment Service (the "Service") we will (without your specific approval) refuse encashment of checks presented to us through our branch/store network drawn against your account specified below for any item made payable to an individual. Check one:Add service Delete service Account number(s): Customer Legal Entity information The enrollment contains ACH, Wire, or Sweep services the following Customer Entities: Customer Legal Entity name(s)Entity ID type Entity ID Select One Designation of Wells Fargo Stagecoach Sweep® Option Customer DDA(s) Item 2B-275 Page 11 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Statements and/or Confirmations will be sent to Customer by electronic means unless otherwise requested by Customer. Electronic means include Bank's Commercial Electronic Office®, facsimile and/or Secure E-Mail. The Wells Fargo Stagecoach Sweep® Service Description can be viewed by pasting this link into an internet browser window: https://wellsoffice.wellsfargo.com/ceopub/assets/pdf/stgcoach-swp/Stagecoach_Sweep_Service_Description.pdf Investment Sweep Customer elects the Wells Fargo Stagecoach Sweep Preferred Option. Add Change Target Balance*: *Note: this is the target balance at the time of form completion and does not reflect any subsequent update requests. Customer elects the Wells Fargo Stagecoach Sweep Repurchase Agreement Option with secondary Wells Fargo Stagecoach Sweep, Preferred Option. Add Change Target Balance*: *Note: this is the target balance at the time of form completion and does not reflect any subsequent update requests. Customer elects the Wells Fargo Stagecoach Sweep Repurchase Agreement Option. Add Change Target Balance*: *Note: this is the target balance at the time of form completion and does not reflect any subsequent update requests. Customer elects the Wells Fargo Stagecoach Sweep Fed Funds Purchased Agreement Option. (Correspondent Bank Only) Add Change Target Balance*: *Note: this is the target balance at the time of form completion and does not reflect any subsequent update requests. Customer elects the Wells Fargo Stagecoach Sweep Fed Funds Sold Agreement Option. (Correspondent Bank Only) Add Change Target Balance*: *Note: this is the target balance at the time of form completion and does not reflect any subsequent update requests. Customer elects the Wells Fargo Stagecoach Sweep Fed Funds Purchased and Sold Agreement Option. (Correspondent Bank only) Add Change Target Balance*: *Note: this is the target balance at the time of form completion and does not reflect any subsequent update requests. Item 2B-276 Page 12 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Money Market Mutual Fund Sweep Customer elects the Allspring Treasury Plus Money Market Fund - Class A - Fund 453 Option. Add Change Target Balance: Customer elects the Allspring Treasury Plus MMMF- Service Class - Fund 454 Option. Add Change Target Balance: Customer elects the Allspring 100% Treasury Money Market Fund - Service Class - Fund 8 Option. Add Change Target Balance: Customer elects the Allspring Government MMMF Admin Class - Fund 947 Option. Add Change Target Balance: Customer elects the Allspring Government MMMF Institutional - Fund 1751 Option. Add Change Target Balance: Customer elects the Allspring Government MMMF Select Class - Fund 3802 Option. Add Change Target Balance: Customer elects the Allspring Treasury Plus MMMF Institutional - Fund 793 Option. Add Change Target Balance: Credit Sweep Customer elects Bank's Credit Sweep Option. Add Change Target Balance: Obligor # (if applicable): Loan # (Obligation): Item 2B-277 Page 13 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Wire Transfer Services - Security Procedure Elections For detail on the Security Procedure for an applicable initiation method, refer to the language in the Treasury Management Security Procedures Reference Guide. The Initiation Method(s) and Security Procedure(s) Customer has elected for Wire Transfers are: Commercial Electronic Office® (CEO®) Dual Custody The CEO portal is our electronic banking portal that is accessed through the internet. The CEO portal security procedures are log-on credentials specified by us including a company ID, user ID, password, token, and any other authentication or authorization process we require from time to time. We will use the CEO security procedures to authenticate each Payment Order received through the CEO portal in your name. Our recommended CEO security procedures also include dual custody for select, high-risk wire activities. With dual custody, an authenticated second user approves these activities. There is no additional charge for dual custody. Single Custody The CEO portal is Bank’s electronic banking portal that is accessed through the Internet. The CEO security procedures are log- on credentials specified by Bank including a company ID, user ID, password, token, and any other authentication or authorization process Bank requires from time to time. Our recommended CEO security procedures include dual custody for select, high-risk wire activities. With dual custody, an authenticated second user approvers these activities. There is no additional charge for dual custody. When you decline to use dual custody and elect to use single custody with Secure Validation, there is no secondary approval for any high-risk wire transfer activities. Instead, a single-use code is sent to an enrolled telephone number to confirm a high-risk wire transfer activity. Single custody with Secure Validation provides a lower level of protection than dual custody. You acknowledge the reduced security associated with, and recognize the risks and losses that may materialize from, your decision to use single custody with Secure Validation. Payment Manager® Secure Application File Exchange Transmission ("SAFE-T") This transmission platform offers a variety of transmission protocols including hypertext transfer protocol secured (https), FTP over SSL (FTP/S), secure FTP (S-FTP), and Applicability Statement 2 (AS2) that we use to authenticate each Payment Order transmitted to us in your name. Machine-to-Machine ("M2M") This transmission method uses an XML message interface that is based on the Interactive Financial eXchange (IFX) message standard using SOAP structured messages. Data is communicated via the internet using 128-bit encryption and Secure Socket Layers (SSL). We use digital certificates to authenticate each Payment Order transmitted to us in your name. IBM® Connect:Direct® with Secure Plus+ Secure Plus+ is an add-on to Connect:Direct® to enhance security by means of Secure Socket Layer (“SSL”) or Transport Layer Security (“TLS”). Connect:Direct® is a registered trademark of Sterling Commerce, Inc., an IBM Customer. Value-Added Network ("VAN") With this transmission method, a third party serves as an intermediary for transmitting data between you and us. Procedures for transmitting Payment Orders may vary by VAN. We follow the procedures of the VAN selected by you to authenticate each Payment Order transmitted to us through the VAN in your name. Item 2B-278 Page 14 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Wells Fargo Gateway (API) Through The Wells Fargo Gateway, you (i) access our Application Programming Interface (“API”) to securely request that we execute Payment Orders your behalf, and (ii) receive periodic updates from us as we process Payment Orders for you. The Wells Fargo Gateway uses tokenized transmission methods for direct communication between your internal payment system(s) and our payment system. The Wells Fargo Gateway security procedures require digital authentication of you and us using tokens, API keys, mutual authentication of digital certificates and any other authentication or authorization process we may require from time to time. Your tokens, API keys, digital certificates, and your instruction to us do not identify an individual user initiating any request through the Wells Fargo Gateway. We validate only that you are authorized to issue Payment Orders and receive periodic updates via the Wells Fargo Gateway, not whether a particular user is authorized to initiate the request. Voice Our voice initiation security procedure consists of confirming that the personal identification number ("PIN") accompanying a Payment Order corresponds with a valid PIN assigned to you for voice-initiated Payment Orders. “Payment Order” is defined in the Wire Transfer Service Description. i. Telephone Verification Service. If we receive a voice-initiated, non-repetitive Payment Order that exceeds the applicable pre- designated limit, we will make one attempt to telephone person(s) designated by you on your most current setup form in our records to verify the Payment Order. If we are unable to complete the call, we will not process the Payment Order. SWIFT® SWIFT has established procedures for controlling access to SWIFT messaging services (each, an “Access Control”) that may include without limitation access codes, message authentication codes, secure card readers, digital signatures, and Hardware Security Modules. In addition, SWIFT authenticates certain messages including without limitation Payment Orders based on SWIFT message type prior to accepting them for routing as SWIFT messages (each, an “Authenticated Message”). This authentication may include confirming that the sender and recipient of the message have exchanged bilateral keys (“BKE”), entered into a relationship management application (“RMA”) agreement, or taken other steps to secure the transmission of SWIFT messages between them as SWIFT requires from time to time (each, an “Authentication Procedure”). ACH Origination Services - Security Procedure Elections For detail on the Security Procedure for an applicable initiation method, refer to the language in the Treasury Management Security Procedures Reference Guide. The Initiation Method(s) and Security Procedure(s) Customer has elected for ACH are: Commercial Electronic Office® (CEO®) - Dual Custody The CEO portal is our electronic banking portal that is accessed through the internet. The CEO portal security procedures are log- on credentials specified by us including a company ID, user ID, password, token, and any other authentication or authorization process we require from time to time. Our recommended CEO security procedures also include dual custody for select, high-risk ACH activities. With dual custody, an authenticated second user approves these activities. There is no additional charge for dual custody. Dual Custody with User Approve Own Entitlements The CEO portal is Bank's electronic banking portal that is accessed through the Internet. The CEO security procedures are log-on credentials specified by Bank including a company ID, user ID, password, token, and any other authentication or authorization process Bank requires from time to time. Our recommended CEO security procedures include dual custody for select, high-risk ACH activities. With dual custody, an authenticated second user approves these activities. There is no additional charge for dual custody. When you declines to use full dual custody and elects to use dual custody at a company level with an option that allows designated users to use single custody, the security procedure would be as follows: With dual custody with “User Approve Own Entitlements,” designated users are permitted to use single custody. For these designated users, there is no secondary approval for any high-risk ACH activities. You acknowledge the reduced security associated with, and recognize the risks and losses that may materialize from, your decision to not use full dual custody with all users and instead permit designated users to use single custody under "User Approve Own Entitlements." Item 2B-279 Page 15 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Commercial Electronic Office® (CEO®) - Single Custody The CEO portal is Bank's electronic banking portal that is accessed through the Internet. The CEO security procedures are log-on credentials specified by Bank including a company ID, user ID, password, token, and any other authentication or authorization process Bank requires from time to time. Our recommended CEO security procedures include dual custody for select, high-risk ACH activities. With dual custody, an authenticated second user approves these activities. There is no additional charge for dual custody. When you decline to use dual custody and elect to use single custody with Secure Validation, there is no secondary approval for any high-risk ACH activities. Instead, a single-use code is sent to an enrolled telephone number to confirm a high-risk ACH activity. Single custody with Secure Validation provides a lower level of protection than dual custody. You acknowledge the reduced security associated with, and recognize the risks and losses that may materialize from, your decision to use single custody with Secure Validation. Direct Origination - Secure Application File Exchange Transmission ("SAFE-T") This transmission platform offers a variety of transmission protocols including hypertext transfer protocol secured (https), FTP over SSL (FTP/S), secure FTP (S-FTP), and Applicability Statement 2 (AS2). Direct Origination - IBM® Connect:Direct® with Secure Plus+ Secure Plus+ is an add-on to Connect Direct to enhance security by means of Secure Socket Layer (“SSL”) or Transport Layer Security (“TLS”). Connect Direct® is a registered trademark of Sterling Commerce, Inc. an IBM Company. Direct Origination - SWIFT® FileAct SWIFT has established procedures for controlling access to SWIFT messaging services that may include access codes, message authentication codes, secure card readers, digital signatures, and Hardware Security Modules. In addition, SWIFT authenticates certain messages including without limitation Files based on SWIFT message type prior to accepting them for routing as SWIFT messages. This authentication may include confirming the sender and recipient of the message have exchanged bilateral keys (“BKE”), entered into a relationship management application (“RMA”) agreement, or taken other steps to secure the transmission of SWIFT messages between them as SWIFT requires from time to time. Direct Origination - E-Bill Express Wells Fargo Gateway (API)® Through the Wells Fargo Gateway, you access our Application Programming Interface (“API”) to securely request that we originate ACH credit and/or debit Entries on your behalf, and receive periodic updates from us as we process ACH Entries for you. “Entry”, “Entries” and “Files” are each defined in the Nacha Operating Rules (and any applicable local ACH rules). The Wells Fargo Gateway uses tokenized transmission methods for direct communication between your internal payment system(s) and our payment system. The Wells Fargo Gateway security procedures require digital authentication of you and us using tokens, API keys, mutual authentication of digital certificates and any other authentication or authorization process we may require from time to time. Your tokens, API keys, digital certificates, and your instruction to us do not identify an individual user initiating any request through the Wells Fargo Gateway. We validate only that you are authorized to request ACH origination and receive periodic updates via the Wells Fargo Gateway, not whether a particular user is authorized to initiate the request. Payment Manager® - Secure Application File Exchange Transmission ("SAFE-T") This transmission platform offers a variety of transmission protocols including hypertext transfer protocol secured (https), FTP over SSL (FTP/S), secure FTP (S-FTP), and Applicability Statement 2 (AS2). Payment Manager® - Machine-to-Machine ("M2M") This transmission method may use an XML message interface that is based on the Interactive Financial eXchange (IFX) message standard using SOAP structured messages or other formats and protocols such as JSON and REST. Data is communicated via the internet using 128-bit encryption and Secure Socket Layers (SSL). Payment Manager® - IBM® Connect:Direct® with Secure Plus+ Secure Plus+ is an add-on to Connect Direct to enhance security by means of Secure Socket Layer (“SSL”) or Transport Layer Security (“TLS”). Connect Direct® is a registered trademark of Sterling Commerce, Inc. an IBM company. Payment Manager® - Value-Added Network ("VAN") With this transmission method, a third party serves as an intermediary for transmitting data between you and us. Procedures for transmitting Payment Orders may vary by VAN. We follow the procedures of the VAN selected by you to authenticate each File transmitted to us through the VAN in your name. Payment Manager® - SWIFT FileAct SWIFT has established procedures for controlling access to SWIFT messaging services that may include access codes, message authentication codes, secure card readers, digital signatures, and Hardware Security Modules. In addition, SWIFT authenticates certain messages including without limitation Files based on SWIFT message type prior to accepting them for routing as SWIFT messages. This authentication may include confirming the sender and recipient of the message have exchanged bilateral keys (“BKE”), entered into a relationship management application (“RMA”) agreement, or taken other steps to secure the transmission of SWIFT messages between them as SWIFT requires from time to time. Item 2B-280 Page 16 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Third Party Service Provider If you are utilizing a Third Party Service Provider (“TPSP”) as defined in the ACH Rules to originate Entries and Files on your behalf, we will authenticate each File transmitted to us in your name in accordance with the security procedure your TPSP has elected. You will notify us of any change to your TPSP in a manner affording us a reasonable opportunity to act on the information. Third Party Service Provider: Contact Person: Telephone:Fax: RTP Services The Initiation Method(s) and Security Procedure(s) Customer has elected for RTP are: Wells Fargo Gateway (API)® Through The Wells Fargo Gateway, you access our Application Programming Interface (“API”) to securely (i) request that we execute RTP Payment Orders and RTP Messages on your behalf, and (ii) receive periodic updates from us as we process RTP Payment Orders and RTP Messages for you. The Wells Fargo Gateway uses tokenized transmission methods for direct communication between your internal payment system(s) and our payment system. The Wells Fargo Gateway security procedures require digital authentication of you and us using tokens, API keys, mutual authentication of digital certificates and any other authentication or authorization process we may require from time to time. Your tokens, API keys, digital certificates, and your instruction to us do not identify an individual user initiating any request through the Wells Fargo Gateway. We validate only that you are authorized to issue RTP Payment Orders and RTP Messages and receive periodic updates via the Wells Fargo Gateway, not whether a particular user is authorized to initiate the request. Bill Manager Service The Initiation Method and Security Procedure Customer has elected for Bill Manager is: Commercial Electronic Office® (CEO®) The CEO portal is our electronic banking portal that is accessed via the internet. The CEO portal security procedures are log-on credentials specified by us including a company ID, user ID, password, token, and any other authentication or authorization process we require from time to time. The Bill Manager platform also requires entry of a one-time passcode provided via text message or an automated phone call to verify the device used to initiate the funds transfer. E-Bill Express Service The Initiation Method and Security Procedure Customer has elected for E-Bill Express is: Bill File Inbound - SAFE-T This transmission platform offers a variety of transmission protocols including hypertext transfer protocol secured (https), FTP over SSL (FTP/S), secure FTP (S-FTP), and Applicability Statement 2 (AS2). AR File Outbound - SAFE-T This transmission platform offers a variety of transmission protocols including hypertext transfer protocol secured (https), FTP over SSL (FTP/S), secure FTP (S-FTP), and Applicability Statement 2 (AS2). CEO® EDD, Electronic Document Delivery Set-up - For Company and Customer(Biller) ID Type of request Customer (Biller) ID (must be associated with the CEO Company ID) CEO User name CEO User ID Role (select one) Add Change Delete View only (default) View and Authorize Customer (Biller) Administrator Item 2B-281 Page 17 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Type of request Customer (Biller) ID (must be associated with the CEO Company ID) CEO User name CEO User ID Role (select one) Add Change Delete View only (default) View and Authorize Customer (Biller) Administrator Add Change Delete View only (default) View and Authorize Customer (Biller) Administrator Add Change Delete View only (default) View and Authorize Customer (Biller) Administrator Zero Balance Account (ZBA) Request Type Master Account Child Account Cycle Target Balance Add Change International Zero Balance Account (ZBA) Level 2 Accounts Request Type Child Account(s)Currency Transfer Funds To Sweep Type Target Balance Minimum Balance Maximum Balance Add Change Debit* Credit* Target Maximum *One-way Sweep Level 3 Accounts Request Type Child Account(s)Currency Transfer Funds To Sweep Type Target Balance Minimum Balance Maximum Balance Add Change Debit* Credit* Target Maximum *One-way Sweep Item 2B-282 Page 18 of 18© 2021 Wells Fargo Bank, N.A., All rights reserved. TM Product Enrollment TM-1500 (Rev 04/2022) Customer Approval - (Authorized Signature Required) Each person who signs this form on Customer's behalf is authorized to do so by resolution, agreement or other legally sufficient action of the governing body of Customer, if Customer is not an individual, or is an Authorized Signer on Customer's account. Printed name of Authorized Signer Phone Signature Date Voice Wire only - Submitter information and instructions Internal Bank use only Submitter name Submitter phone Submitter email Submitter fax Note: If Voice Wire is a component of this form, once the customer approves and signs the form, the Banker/Relationship Manager must approve and sign the form, then fax it to Wire Implementation at 866-922-6202 from a valid Wells Fargo fax. File copies in your location's record-retention file. Item 2B-283 Acceptance of Services (EDOCS#17849129 Rev. 05/26/20) Page 1 of 2 Acceptance of Services 1. Agreement to be Bound by Service Documentation By signing this Acceptance of Services ("Agreement"), the customer identified on the signature block ("Customer" or "Company") confirms that it has received and agrees to be bound by the Service Documentation for the Treasury Management Services (each, a "Service"). Customer may also be referred to as "Company" in the Service Documentation. "Service Documentation" is defined in Wells Fargo Bank, N.A.'s ("Bank") Master Agreement for Treasury Management Services. Customer's use of any Service, including each Service Customer enrolls in, confirms Customer's receipt of and agreement to be bound by the Service Documentation relating to that Service. 2. Power and Authority of Signer Customer has granted the person(s) signing this Agreement the authority on Customer's behalf to (i) enter into this Agreement and other agreements with Bank for Services on or after the Effective Date of this Agreement and (ii) amend, terminate or otherwise act on behalf of Customer with respect to this Agreement and the Services. 3. Security Procedures Unless otherwise agreed, Customer agrees that "Security Procedure" is the applicable security procedure described in the Service Documentation for Customer's Initiation Method for the Service, which Bank will use to verify the authenticity of a Transaction. The term "Initiation Method" refers to the method Bank offers in the product enrollment form ("Set-up Form") or other Service Documentation for delivering Customer's Transaction instructions to Bank with respect to the applicable Service and includes any applicable transmission protocols. The term "Transaction" means (i) any funds transfer or payment instruction (including any communication cancelling or amending an instruction), and (ii) any instruction, data or other information which Bank receives in Customer's name with respect to a funds transfer. The purpose of the Security Procedure is to verify the authenticity of the Transaction. Bank will not use the Security Procedure to detect an erroneous or duplicate transaction. Customer will be responsible for any erroneous or duplicate transaction Bank receives in Customer's name. Customer agrees to be bound by each Transaction, whether or not authorized by Customer, issued in Customer's name and accepted by Bank in compliance with the Security Procedure for the Service. Item 2B-284 Acceptance of Services (EDOCS#17849129 Rev. 05/26/20) © 2020 Wells Fargo Bank, N.A. All rights reserved Page 2 of 2 4. Commercially Reasonable Customer acknowledges that it has had an opportunity to review the Security Procedures offered by Bank in the Security Procedure Reference Guide, available on our Commercial Electronic Office portal. Customer agrees that each Security Procedure for the Initiation Method Customer has elected in the Set-up Form or other Service Documentation for each of its Services (a) best meets Customer's requirements with regard to the size, type and frequency of its Transactions, and (b) is commercially reasonable. If Customer has refused to use a standard Security Procedure and elects a non- standard Security Procedure, then Customer expressly agrees that the non-standard Security Procedure(s) Customer has elected better meets Customer's requirements than any standard Security Procedure with regard to the size, type and frequency of Transactions issued by Customer to Bank and is commercially reasonable. 5. Confidentiality of Security Procedure and Authentication devices/passwords Customer and Bank will preserve the confidentiality of the Security Procedure(s) and any passwords, codes, security devices and related instructions provided by Bank. If one party becomes aware of a breach, or suspects that a breach may occur, it will promptly notify the other party. Customer will maintain effective internal procedures to safeguard against any unauthorized Transaction and warrants that no individual will be allowed to initiate a Transaction without proper supervision and safeguards. Customer Name(s) Printed Name of Authorized Representative Signature Date Item 2B-285 © 2022 Wells Fargo Bank, N.A. All rights reserved. Revised March 2022 Master Agreement for Treasury Management Services The Service Documentation contains the terms under which Wells Fargo Bank, N.A. and the banks, branches or subsidiaries listed in Appendix X (collectively, "Bank") provide you treasury management services (each a "Service"). "You," "your" or "yours" refer to the Bank customer identified on the Acceptance of Services that is signed when you enroll in a Service ("Acceptance"). The terms "we," "us," or "our" refer to the Bank. Other capitalized terms used in this Master Agreement for Treasury Management Services ("Agreement") are defined in this document. You and we agree: 1. Service documentation. The Service Documentation contains the terms governing each Service and includes: a.The Service Description (which contains terms and conditions applicable to the specific Service), b.The Acceptance (which indicates your acceptance of the Service Documentation), c.This Agreement (which contains terms and conditions applicable to all Services), d.The account agreement governing the account(s) (each, an "Account") you use in connection with the Service, e.The Product Enrollment Form (which contains set-up information for each Service in which you are enrolling), and f.User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). The documents and individual provisions of the Service Documentation are intended to be read together as one agreement between you and us. This Agreement and the Service Descriptions for Services you enroll in are posted at our Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents that are part of the Service Documentation, they will govern in the order listed above. Your use of a Service confirms your receipt of, and agreement to be bound by, this Agreement and all Service Documentation. 2. Services. You and we will agree upon the Services to be provided and the start date for each Service. Each Service is subject to the approval by our applicable branch or subsidiary. We will notify you when you have completed all requirements for enrolling in the Service and the Service is ready for you to use. 3. Changes to services. We may change (or add to) the terms and fees in the Service Documentation at any time. If a change to a Service requires a change to the Service Documentation, we will post the document(s) with the change on the CEO portal. When required by Applicable Law, we will notify you of the change. If you continue to use a Service after a change takes effect, you will be bound by the change. As used in this Agreement, the term "Applicable Law" means all applicable laws (including common or customary laws), statutes, constitutions, policies, decrees, judgments, treaties, regulations, directives, by-laws, rulings, orders or operating circulars governing our activities and/ or any Transaction (see section 6-a) governed by this Agreement, including, but not limited to, the funds transfer system and clearing and settlement house rules. 4. Term and termination. Unless a Service is terminated in accordance with the Service Documentation, this Agreement and each Service will continue in effect until terminated by either party upon 30 days' prior written notice to the other party. When a Service is terminated for any reason, the Service Documentation governing the terminated Service is also terminated. We may suspend or terminate any Service: Item 2B-286 Page 2 Master Agreement for Treasury Management Services a.After we notify you of a breach of any provision of the Service Documentation or any other agreement with us, and you fail to cure the breach (if it can be cured) within 15 days of the date of the notice; or b.Without prior notice to you if: i.We reasonably suspect that an Account associated with a Service has been compromised or otherwise subject to irregular, unauthorized, fraudulent, or illegal activity, ii.You become subject to any insolvency or bankruptcy proceeding, or any receivership, liquidation, reorganization, or other similar proceeding, or you enter into any agreement or proceeding for voluntary liquidation, dissolution, composition with or assignment for the benefit of creditors or other winding up, iii.We determine in our sole discretion that continuing to provide a Service may place us at risk of financial loss or result in an unacceptable credit exposure, iv.Any guaranty of your obligations to us ("Guaranty") is terminated, revoked, or its validity contested by the guarantor ("Guarantor"), v.We determine in our sole discretion that a material adverse change has occurred in your ability to perform your obligations under the Service Documentation, or in the ability of a Guarantor to perform its obligations under a Guaranty, or vi.The Account necessary to provide a Service is closed. The termination of a Service will not affect your or our respective rights and obligations with respect to the Service(s) provided before the termination including without limitation Transactions. We will not be liable to you for any losses or damages you may incur as a result of any termination of any Service or termination or restriction of any CEO portal access rights under section 9(d) below. 5. Service fees. You will pay us the fees described in the Service Documentation and any taxes applicable to each Service, however designated, but excluding taxes based on our net income. We may debit your Account for any fees not covered by earnings credits and any taxes that are due, or we may send you an invoice for these amounts, which you will promptly pay. Our charges and fees are in the applicable fee schedule for Services used in connection with your Account. 6. Security procedures. a.Unless otherwise agreed, you agree that "Security Procedure" is the applicable security procedure described in the Service Documentation for your Initiation Method for the Service, which we will use to verify the authenticity of a Transaction. The term "Initiation Method" refers to the method we offer in the product enrollment form ("Set-up Form") or other Service Documentation for delivering your Transaction instructions to us with respect to the applicable Service and includes any applicable transmission protocols. The term "Transaction" means (i) any funds transfer, payment order, or payment instruction (including any communication cancelling or amending an instruction), and (ii) any instruction, data or other information which we receive in your name with respect to a funds transfer. The purpose of the Security Procedure is to verify the authenticity of the Transaction. We will not use the Security Procedure to detect an erroneous or duplicate transaction. You will be responsible for any erroneous or duplicate transaction we receive in your name. You agree to be bound by each Transaction, whether or not authorized by you, issued in your name and accepted by us in compliance with the Security Procedure for the Service. b.You agree that each Security Procedure for the Initiation Method in the Set-up Form or other Service Documentation for each of the Services (a) best meets your requirements with regard to the size, type and frequency of your Transactions, and (b) is commercially reasonable. 7.Confidential information. Unless otherwise stated in the Service Documentation, "Confidential Information" means all (a) User Guides and Terms of Use, and (b) Security Procedures, passwords, codes, security devices and related instructions. You will not acquire any ownership interest in or rights to Confidential Information as a result of your use of any Service. You will: a.Maintain the confidentiality of the Confidential Information, Item 2B-287 Page 3 Master Agreement for Treasury Management Services b.Not disclose (or permit your employees or agents to disclose), copy, transfer, sublicense, or otherwise make any of it available to any person or entity, other than your employees who have a need to use the Confidential Information in connection with the applicable Service, and c.Not decompile, reverse engineer, disassemble, modify, or create derivative works of any Confidential Information. You will notify us immediately if you know of or suspect any unauthorized disclosure, possession, use, or knowledge (each, an "Unauthorized Use") of any Confidential Information. If you (or your employees or agents) are responsible for the Unauthorized Use, you will, at your expense, promptly take all actions, including initiating court proceedings to recover possession and prevent further Unauthorized Use of the Confidential Information. You will also compensate us for any injury caused to us as a result of the Unauthorized Use. 8.Currency conversion. When your instructions require us to convert the amount of a Transaction from the currency in which the Account is denominated ("Account Currency") to another currency ("Foreign Currency"), we will do so using the Applicable Exchange Rate in effect at the time we execute your Transaction. "Applicable Exchange Rate" means the exchange rate we set and use for you when we convert one currency to another currency and includes a markup. The markup factors include costs incurred, market risks and our desired return. The exchange rate we provide to you may be different from the exchange rates you see elsewhere. Foreign exchange rates are dynamic, and rates fluctuate over time based on market conditions, liquidity, and risks. If a financial institution designated to receive the funds does not pay the beneficiary specified in the Transaction, and the funds are returned to us, we will not be liable to you for a sum greater than the amount of the Transaction after we have converted it from the Foreign Currency to the Account Currency using the Applicable Exchange Rate in effect at the time the funds are returned to us. You accept the risks of any change in the Applicable Exchange Rate between the time you request a Transaction and the time the Transaction is either completed or is unwound due to a cancellation, an amendment, a rejection, or a return. 9. CEO portal. a. Description of the CEO portal. The CEO portal is our electronic banking portal that is accessed through the Internet. Your Authorized Agents (defined below) may use the CEO portal to access (i) Services in which you have separately enrolled and (ii) third-party sites we may make available through the CEO portal. We offer different channels through which you may access the CEO portal, including personal computers and mobile devices. We may add or eliminate channels at any time. A Service or third party site accessible through one channel may not be accessible through another channel. b. Access to the CEO portal.When you enroll in the CEO portal, and as we may determine is necessary after enrollment, we will provide Log-On Credentials (defined below) to the persons who are authorized to access the CEO portal on your behalf (each, an "Authorized Agent"). Log-On Credentials mean one or more secure methods we provide to access the Services and may include user IDs, passwords, token IDs, and other methods that we adopt from time to time. We have no obligation to separately verify or authenticate any communication we receive in your name through the CEO portal, whether or not it was actually from an Authorized Agent. You assume the entire risk of (i) unauthorized use of your Log-On Credentials and (ii) unencrypted electronic transmissions. c. Administration of the CEO portal.We offer two options for administering the CEO portal: (i) Administration and (ii) Bank administration. i.Administration.If you enroll in the Administration option, there are three categories of Authorized Agents: Company Administrator, Administrator, or User. Unless you and we separately agree, we will provide Log-On Credentials only to your initial Company Administrator(s) who will (a) assign Log-On Credentials to other individuals and (b) designate those individuals as one of the following: (1)A Company Administrator, who may perform all functions of your initial Company Administrator, (2)An Administrator, who may perform all functions of an Administrator including designating other Administrator(s) and User(s), or (3)A User, who may access the Services designated by a Company Administrator or an Administrator, as well as those Services in which we permit a User to self-enroll. Item 2B-288 Page 4 Master Agreement for Treasury Management Services Each Company Administrator and Administrator has the authority to enroll you in additional Services. In addition to your use of Administration as described in this subsection, you may request that we assign Log-On Credentials to Users that you designate in writing to us. Your designation to us will specify the Services which the User is authorized to access in addition to those Services in which we permit a User to self-enroll. ii.Bank administration. For the Bank administration option, there is one category of Authorized Agent: Users. We will assign Log-On Credentials to each User you designate. You will promptly revoke the Log-On Credentials of any Authorized Agent or User when that individual is no longer authorized to access the CEO portal. If you notify us in writing to revoke the Log-On Credentials of an Authorized Agent or User, we will have a reasonable time after receiving your written notification to revoke the individual's access. d.Terminating access. We may terminate or restrict any Authorized Agent's access to any Service through the CEO portal if we determine such use: i.Does not comply with any term applicable to the CEO portal, ii.Is not permitted by Applicable Law, iii.Is not authorized by you or any third party whose authorization we believe is necessary, or iv.Should be denied for your or our protection (without us agreeing to or being required to make this determination in any circumstance). e.Financial information. Financial market data, quotes, news, research, and other financial information developed by third parties and transmitted to us ("Financial Information") may be available to you at the CEO portal. The posting of any Financial Information or any other information or data at the CEO portal is not a recommendation by us of any particular Service or transaction. We do not guarantee the accuracy or completeness of any Financial Information, nor are we responsible for (i) the actions or omissions of the third parties developing or transmitting Financial Information or (ii) any decision you make or action you take by relying on any Financial Information. f.Miscellaneous.For purposes of this section 9 only, "Service" includes each service and product we or any of our affiliates offer that you access through the CEO portal. This section 9 will survive the termination of any Service or this Agreement. 10. Alerts. a.Non-subscribed alerts. When you enroll in the CEO portal or other channels or Services, you consent to receiving by email or other delivery channels, servicing messages that we determine are important or urgent. You do not need to subscribe to receive such alerts and you do not pay additional service fees. b.Subscribed alerts. You may also enroll in fee-based alerts for applicable Services so that you can receive messages you subscribe to at the intervals and through delivery channels that you choose. 11. Liability and indemnification. a.We are not obligated to honor, in whole or in part, any Transaction or other instruction that: i.Exceeds the available balance in the Account, unless otherwise provided in the Service Documentation, ii.Does not comply with the Service Documentation or our applicable policies, procedures, or practices made available to you, iii.We have reason to believe may not have been duly authorized, should not be honored for our or your protection, or involves funds subject to a hold, dispute, restriction, or legal process, or iv.Would possibly result in us not complying with Applicable Law. b.Neither we nor our software vendors make any express or implied representations or warranties with respect to the Services or any software used in connection with the Services, including any warranty as to the merchantability or fitness for a particular purpose, other than those expressly set forth in the Service Documentation. c.Any claim, action, or proceeding against us for losses or damages arising from a Service, must be brought within one year from the date of the act or omission, except as otherwise stated in the account agreement governing the Account. Item 2B-289 Page 5 Master Agreement for Treasury Management Services d.We will have no liability for our failure to perform or delay in performing a Service if the failure or delay is due to circumstances beyond our reasonable control. If we determine that any funds transfer or communications network, Internet service provider, or other system used to provide a Service is unavailable, inaccessible, or otherwise unsuitable for use by you or us, we may, upon notice to you, suspend or discontinue the affected Service. e.We will only be liable to you for actual damages incurred as a direct result of our failure to exercise reasonable care in providing the Services. Reasonable care requires only that we follow standards that do not vary unreasonably from the general standards followed by similarly situated banks. Our policies and procedures are general internal guidelines for our use and do not establish a higher standard of care for us than otherwise established under Applicable Law. A mere clerical error or an honest mistake will not be considered a failure by us to perform any of our obligations. Our liability to you will be limited to an amount not greater than 10 times our fees incurred in the calendar month immediately before the calendar month in which the loss or damages were incurred (or, if no fees were incurred in that month, our fees incurred in the month in which the losses or damages were incurred). f.Except in the case of our negligence or intentional misconduct, you will indemnify and hold us, our directors, officers, employees and agents ("Representatives") harmless from all losses or damages that arise out of: i.The performance of a Service in compliance with the Service Documentation, including any warranty we are required to make to a third party in connection with a Service, ii.An act or omission of any of your agents, couriers, or Authorized Agents, and iii.If the Service includes a license or sublicense of any software, any use or distribution of the software by you or any person gaining access to the software through you that is inconsistent with the license or sublicense. You will promptly provide us with written proof of loss, and notify us if you become aware of any third party claim related to a Service. You will cooperate fully (and at your own expense) with us in recovering a loss. If we reimburse you, we or our designee will be subrogated to all of your rights (i.e., we will be entitled to assert any legal rights you had relating to the claim). g.Except as expressly provided otherwise in the Service Documentation, neither party nor its Representatives will be liable to the other party for: i.Any special, consequential, incidental (including court costs and attorneys' fees), indirect, or punitive losses or damages, or ii.Business interruption, loss of profits, loss of business, loss of revenue, loss of goodwill, loss of opportunity, loss or injury to reputation, or loss of anticipated savings, whether any claim is based on contract or tort, or whether the likelihood of these losses or damages was known to the other party and regardless of the form of the claim or action. h.When you send payments on behalf of your third party customers, you agree you are solely liable to your customers for any and all losses those customers may suffer. We exclude all and any liability of whatever nature (including those losses detailed in subsection g above) arising out of your relationship with your customer. 12.Governing law. The Service Documentation will be governed by: (a) U.S. federal law and (b) the law of (i) the U.S. state in which the office of Bank that maintains the Account is located or, if there is no such state or no account associated with such Service, (ii) the State of New York, without reference to its principles of conflicts of laws ("Governing Law"). 13.Arbitration agreement. Upon demand by you or us, any dispute or claim arising out of or relating to this Agreement, or the breach thereof, must be submitted to arbitration administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules, and must be heard before three arbitrators if the amount in dispute is U.S. $5,000,000 or more or its equivalent in any other currency, and before one arbitrator for amounts in dispute of less than U.S. $5,000,000 or its equivalent in any other currency. Arbitration will proceed in a location selected by AAA in the state of the applicable Governing Law, and if there is no such state, the place of arbitration must be New York, NY. The language of the arbitration must be English. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. This arbitration requirement does not limit the right of you or us to: (a) Item 2B-290 Page 6 Master Agreement for Treasury Management Services exercise self-help remedies including setoff or (b) obtain provisional or ancillary remedies such as injunctive relief or attachment, before, during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of you or us to submit any dispute to arbitration hereunder, including those arising from the exercise of the actions detailed in (a) and (b) of this section. 14.Jurisdiction. For any proceedings regarding this Agreement (not subject to arbitration as provided in this Agreement), you hereby irrevocably submit to the jurisdiction of the courts of the Borough of Manhattan, New York City, in the State of New York or the federal courts located there and irrevocably agree that all claims in relating to the proceeding may be heard or determined in those courts. 15. Miscellaneous. a.Severability. Any portion of the Service Documentation which is inconsistent with Applicable Law or Governing Law will be deemed modified and applied in a manner consistent therewith, and we will incur no liability to you as a result of the inconsistency or modification and application to any dispute regarding the Service Documentation. If any portion or provision of the Service Documentation is deemed unenforceable, it will not affect the enforceability or validity of the remaining Service Documentation nor the enforceability or validity of that portion or provision under the law of any other jurisdiction. b.Entire agreement. The Service Documentation (and any documents referred to therein): i.Constitutes the entire agreement between you and us regarding the Services we provide for all Accounts opened with us, and ii.Supersedes and extinguishes all prior agreements, understandings, representations and warranties of any nature (including requests for proposals and other sales material), whether oral or written, between you and us relating to any of our Services (including any other Master Agreement for Treasury Management Services, but excluding the current Commercial Account Agreement or Global Commercial Account Agreement, as applicable). c.Electronic agreement. To facilitate execution, the Service Documentation may be executed by a party in the form of an "Electronic Record" (as defined in the Electronic Signatures in Global and National Commerce Act at 15 U.S.C. §7001 et seq. ["ESIGN Act"]). The Service Documentation may be executed in as many counterparts as may be required to reflect all parties' approval, and all counterparts will collectively constitute a single agreement. An "Electronic Signature" (as defined in the ESIGN Act) that can be authenticated will constitute an original and binding signature of a party. The fact that a document is in the form of an Electronic Record or is signed using an Electronic Signature will not, in and of itself, be grounds for invalidating such document. d.No waiver. Neither our failure nor any delay by us in exercising any right or remedy will be deemed to be a waiver of the right or remedy. No course of dealing or waiver of any right on one occasion will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion. e.Third party beneficiaries. Except as otherwise provided in the Service Documentation, no person or entity other than the parties to this Agreement will be deemed to be a third party beneficiary under the Service Documentation. f.Financial condition. You will provide us promptly upon our request any existing financial statements or other information pertaining to your financial condition or any previously unprepared financial statements which we may require you to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to us. g.Your representations and warranties. You represent and warrant that: (i) you will not use any Service in a manner that would violate any Applicable Law by you or us; (ii) if you employ an agent in connection with its use of any Service, you represent and warrant to us that: (1) your governing body has duly authorized the agent; (2) you will exercise appropriate controls to ensure each authorized agent does not exceed the authority granted to it; and (3) you will preserve the confidentiality of the Log-On Credentials and immediately notify us if you become aware or suspect that any Log-On Credential may have been compromised. h.Use of names. You and we will not use each other's name or refer to our relationship in any solicitation, marketing material, advertisement, news release, or other written, online or oral communication without specific prior written consent for each such use or release, except that we may use your name as a reference in service proposals if we obtain your prior written approval for such use. Item 2B-291 Page 7 Master Agreement for Treasury Management Services i. Notices and communications.Either party may provide notice to the other party by mail, personal delivery, or electronic transmission. i.You will notify us promptly in writing of any change in your name, Address, legal status, or any other changes relevant to the conduct of the Account or affecting your business relationship with us. ii.The term "Address" as used in this Agreement refers to a mailing or electronic address. iii.You will use the Address where your relationship manager or other manager is located and will address any notice to the attention of the manager. iv.Each party will have a reasonable time after receipt of any notice to act on it. v.Any communication or notice to us from your agent about your use of a Service will be deemed to be a communication from you, and you authorize us to communicate with your agent about any such communication or Service. vi.We are entitled to rely on any communication or notice from you that we believe in good faith was authorized by your authorized representative or Authorized Agent and, we will have no obligation to verify or authenticate an identity of a sender or signature on any notice or communication, except as expressly provided in the Service Documentation. 16. Survival. Sections 7, 9, 11 - 15 will survive termination of the Services or this Agreement. Item 2B-292 Page 8 Master Agreement for Treasury Management Services Appendix X Applicable Branches or Subsidiaries of Bank 1. Wells Fargo Bank, N.A., UK Branch 2. Wells Fargo Bank, N.A., Canadian Branch 3. Wells Fargo Bank, National Association, Shanghai Branch 4. Wells Fargo Bank, National Association, Hong Kong Branch Item 2B-293 © 2020 Wells Fargo Bank, N.A. All rights reserved. Approved for Use in Local Government Banking Only Amendment to Master Agreement for Treasury Management Services Treasury Management Services Item 2B-294 2 Amendment to Master Agreement for Treasury Management Services | September 18, 2020 Approved for Use in Local Government Banking Only Introduction This Amendment supplements and modifies the Master Agreement for Treasury Management Services (“Master Agreement”) for [Customer Legal Name]. “You,” “your” or “yours” refers to the customer identified in the immediately preceding sentence. The terms “we,” “us,” or “our” refer to the Bank. Capitalized terms used but not defined in this Amendment are defined in the Master Agreement. This Amendment constitutes part of the Service Documentation as defined in the Master Agreement. If there is a conflict between this Amendment and the Master Agreement or other Service Documentation, this Amendment will control. Except as expressly modified by this Amendment, all terms and provisions of Master Agreement and Service Documentation will continue to apply with full force and effect. Amendment We agree that the Master Agreement governing our relationship with you is amended as follows: 1. The following text is added at the end of Section 3 of the Master Agreement (titled “Changes to services”): “Notwithstanding the immediately preceding paragraph, through the Initial Term End Date (as defined below) Bank will not change the fees for Services reflected on Attachment A, except:  in order to reflect the impact of any change in Applicable Law;  in the event your Service usage volume is materially lower than that reflected on Attachment A;  for changes to Bank’s pricing methodology for Services, including element IDs associated with a Service, so long as the change does not increase the total price of the Services to you (unless permitted under one of the two immediately preceding bullet points). If you implement additional Services not described on Attachment A prior to the Initial Term End Date, the fees for such additional Services will be as disclosed to you in connection with the implement ation of such additional Services.” 2. The following text is added at the beginning of Section 4 (titled “Term and termination”) as a new first sentence: “Subject to the termination provisions below, the initial term of this Agreement will commence on [Insert Start Date] and expire on [Insert End Date] (“Initial Term End Date”)[, and this Agreement may be extended for not more than [Insert Number] additional one-year extension terms by your and our mutual consent].” 3. The text of Section 12 (titled “Governing Law”) is deleted in its entirety and replaced with the following: “Governing law. The Service Documentation will be governed by: (a) U.S. federal law and (b) the law of [Insert State Where Customer is Located], without reference to its principles of conflicts of laws (“Governing Law”).” Item 2B-295 3 Amendment to Master Agreement for Treasury Management Services | September 18, 2020 Approved for Use in Local Government Banking Only 4. The text of Section 14 (titled “Jurisdiction”) is deleted in its entirety and replaced with the following: “Jurisdiction. For any proceedings regarding this Agreement (other than a proceeding subject to arbitration), you and we each hereby irrevocably submits to the jurisdiction of the courts of [Insert State Where Customer is Located] or the federal courts located there and irrevocably agrees that all claims relating to the proceeding may be heard or determined in those courts.” WELLS FARGO BANK, N.A. [INSERT CUSTOMER NAME] By: By: Name: Name: Title: Title: Date: Date: Item 2B-296 Commercial Account Signature Card Page 1 of 2© 2021 Wells Fargo Bank, N.A. All rights reserved. Member FDIC Commercial Account Signature Card 595253 (Rev 02 – 06/21) 1. Account Title(s) Account : #1 CoID: Title Line 1: (Customer’s full legal name matching Customer’s formation documents – 40 characters max.) Optional Account Title Lines (40 characters max per line.) Title Line 2: Title Line 3: Title Line 4: (If applicable, enter DBA name on last available title line) Account : #2 CoID: Title Line 1: (Customer’s full legal name matching Customer’s formation documents – 40 characters max.) Optional Account Title Lines (40 characters max per line.) Title Line 2: Title Line 3: Title Line 4: (If applicable, enter DBA name on last available title line) 2. Regulation GG Certification Is the, Customer, or any entity for which the account will be maintained, engaged in the business of Internet gambling? No, this entity is not engaged in the business of Internet gambling. Yes, this entity is engaged in the business of Internet gambling. 3. Account Signers Signer #1 Signature Printed Name Signer role; please select one. If none selected, the default will be limited signer. Refer to section 4 for authority definitions. Limited Signer Authorized Signer Internal use only: CIS customer number for above signer: Signer #2 Signature Printed Name Signer role; please select one. If none selected, the default will be limited signer. Refer to section 4 for authority definitions. Limited Signer Authorized Signer Internal use only: CIS customer number for above signer: Signer #3 Signature Printed Name Signer role; please select one. If none selected, the default will be limited signer. Refer to section 4 for authority definitions. Limited Signer Authorized Signer Internal use only: CIS customer number for above signer: 4. Customer's Certification, Acknowledgement, and Agreement By signing below, I certify that the Customer has designated each of the individuals named in Section 3 above as a) a "Limited Signer" who is authorized, acting alone, to (i) sign checks drawn on the account(s) and (ii) instruct Wells Fargo with respect to stop payment order(s); or (b) an "Authorized Signer” who is authorized, acting alone, to (i) sign checks drawn on and make cash Item 2B-297 © 2021 Wells Fargo Bank, N.A. All rights reserved. Member FDIC Commercial Account Signature Card 595253 (Rev 02 – 06/21)Page 2 of 2 withdrawals from the accounts(s), (ii) instruct Wells Fargo with respect to stop payment order(s) and (iii) initiate funds transfers between accounts on Business Online Banking, and (iv) perform other branch transactions in accordance with the customer’s contractual arrangements with Wells Fargo. Designating signers on the signature card does not authorize the signer to access CEO®. Wells Fargo may obtain credit reports or other information about the customer. Wells Fargo may disclose information about each account to its affiliates, to credit reporting agencies, and to other persons or agencies that, in Wells Fargo's judgement, have a legitimate purpose for obtaining the information. I acknowledge that the Customer has received the Wells Fargo Commercial Account Agreement and agrees its terms and conditions, as amended from time to time, will govern the account(s). Printed Name Position/Title Signature Date 5. Bank Use Only Banker Name:Banker Phone:Banker MAC: AU:RAU:Officer #: Submitter Name:Submitter Phone: Item 2B-298 Amendment to Commercial Account Signature Card Page 1 of 2 © 2021 Wells Fargo Bank, N.A. All rights reserved. Member FDIC Amendment to Commercial Account Signature Card 595250(Rev 02 – 06/21) 1. Account Title(s) Account : #1 CoID: Title Line 1: Customer’s full legal name matching Customer's formation documents – 40 characters max. Title Line 2: Title Line 3: Title Line 4: If applicable, enter DBA name on last available title line. Account : #2 CoID: Title Line 1: Customer’s full legal name matching Customer's formation documents – 40 characters max. Title Line 2: Title Line 3: Title Line 4: If applicable, enter DBA name on last available title line. 2. Amendment to Account Signers - Add Signer #1 Signature Printed Name Signer role; please select one. If none selected, the default will be limited signer. Refer to section 4 for authority definitions. Limited Signer Authorized Signer Internal use only: CIS customer number for above signer: Signer #2 Signature Printed Name Signer role; please select one. If none selected, the default will be limited signer. Refer to section 4 for authority definitions. Limited Signer Authorized Signer Internal use only: CIS customer number for above signer: Signer #3 Signature Printed Name Signer role; please select one. If none selected, the default will be limited signer. Refer to section 4 for authority definitions. Limited Signer Authorized Signer Internal use only: CIS customer number for above signer: Item 2B-299 © 2021 Wells Fargo Bank, N.A. All rights reserved. Member FDIC Amendment to Commercial Account Signature Card 595250(Rev 02 – 06/21) Page 2 of 2 3. Amendment to Account Signers - Delete Signer Name Signer Name Signer Name Signer Name Signer Name Signer Name 4. Customer's Certification, Acknowledgement, and Agreement By signing below, I certify that the Customer has designated each of the individuals named in Section 2 above as a) a "Limited Signer" who is authorized, acting alone, to (i) sign checks drawn on the account(s) and (ii) instruct Wells Fargo with respect to stop payment order(s); or b) an "Authorized Signer” who is authorized, acting alone, to (i) sign checks drawn on and make cash withdrawals from the accounts(s), (ii) instruct Wells Fargo with respect to stop payment order(s) and (iii) initiate funds transfers between accounts on Business Online Banking, and (iv) perform other branch transactions in accordance with the customer’s contractual arrangements with Wells Fargo. Designating signers on the signature card does not authorize the signer to access CEO®. Wells Fargo may obtain credit reports or other information about the customer. Wells Fargo may disclose information about each account to its affiliates, to credit reporting agencies, and to other persons or agencies that, in Wells Fargo's judgement, have a legitimate purpose for obtaining the information. I acknowledge that the customer has received the Wells Fargo Commercial Account Agreement and agrees its terms and conditions, as amended from time to time, will govern the account(s). Printed Name Position/Title Signature Date 5. Bank Use Only Banker Name:Banker Telephone:Banker MAC: AU:RAU:Officer #: Submitter Name:Submitter Phone: Item 2B-300 Authorization Certificate Deposit Accounts and Treasury Management Services Page 1 of 1 © 2022 Wells Fargo & Company. All rights reserved. Confidential when completed. Authorization Certificate – Non-personal accounts EDOCS-#22815818 (Revised 04-06-2022) The undersigned hereby certifies to Wells Fargo Bank, National Association (Bank) that: 1. (Account holder's complete legal entity/company name), a (description of Account holder's business entity type) (“Customer”), has authorized the undersigned to make the certifications in this Certificate on Customer’s behalf. 2. Name Title Country of permanent residence Business phone number Business email address is referred to in this Certificate as an “Authorized Representative” with full authority, acting alone, to: a) enter into those agreement(s) that Bank requires regarding opening, operating, and closing deposit accounts for Customer at Bank (each, an Account) and enrolling in, using, and terminating Bank services including Bank's non-deposit sweep services used in connection with the Account(s) (each, a Service); b) authorize transactions of all types on the Accounts and instruct Bank regarding Accounts and Services; and c) designate individuals as additional Authorized Representatives. 3. This Certificate reflects actions duly taken by Customer in accordance with its governing documents. It shall continue in effect until Bank has received and had a reasonable time to act on Customer's written notice revoking it, which shall be effective only as to actions which are taken by Customer thereafter. Actions authorized in this Certificate but performed prior to its execution are approved and ratified. Certified to: By/Signature: Printed Name: Title: Date: Tax Identification Number of Customer: (TIN of the Account holder as assigned by the IRS) Item 2B-301 © 2019 Wells Fargo Bank, N.A. All rights reserved. Commercial Depository Service Description Treasury Management Services Item 2B-302 2 | Commercial Depository Service Description | Revised January 2, 2020 Introduction The Service Documentation contains the terms and conditions under which Wells Fargo Bank, N.A. ("Bank") provides you the services described below. "You," "your" or "yours" refer to the Bank customer identified on the Acceptance of Services that is signed when you enroll in Services ("Acceptance"). The terms "we," "us," or "our" refer to the Bank. Other capitalized terms used in this Service Description are defined in the Master Agreement or in the Glossary at the back of this Service Description. The service ("Service") covered by this Service Description is: •Commercial Depository •SafeVantage® The Service Documentation includes: a.The Service Description (which contains terms and conditions applicable to the Service), b.The SafeVantage Service Setup Form (the "SafeVantage Setup Form"), c.The Acceptance (which indicates your acceptance of the Service Documentation), d.The Master Agreement (which contains terms and conditions applicable to all services), e.The Account Agreement governing your account that you use for the Service ("Account"), f.The Product Enrollment Form ("Set-up Form") (which contains set-up information for the service in which you are enrolling), and g.User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). The separate documents and individual provisions of the Service Documentation are intended to be read together as one agreement between you and us. This Service Description and the Master Agreement are posted at our Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents that are part of the Service Documentation, they will govern in the order listed above. Your use of a Service confirms your receipt of, and agreement to be bound by, this Service Description and all Service Documentation. Commercial Depository Service 1.Description of services. With the Service, you may: a.Order Cash we prepared and make such Cash available to your Agent at our cash vault, and b.Deliver currency, coin, checks and other negotiable instruments to our cash vault or Night Depositories for processing. 2.Cash orders from our cash vault. a.Cash Requests.You may make a Cash Request of a Cash Shipment. The Cash Shipment will be made available to your Agent in Cash Bags at our cash vault. We are authorized to act upon any Cash Request we receive in accordance with this Service Description, and which we believe in good faith has been made by one of your Authorized Representatives. We will have no obligation to verify, and will not be liable for our failure to verify or investigate, any Cash Request. b.Making Cash available to your Agent.We are authorized to make Cash Shipments available to any person we in good faith believe to be your Agent. We will have no further responsibility, and you assume all risk of loss for Cash made available to any such person. We will make Cash Shipments available only at the locations, on days, and during the hours published by us from time to time. We reserve the right to suspend the Service at any time without notice. Item 2B-303 3 | Commercial Depository Service Description | Revised January 2, 2020 c.Your Authorized Representatives.You will promptly certify to us the identity of each Authorized Representative. You will give prior written notice to us of any change in the authority of any Authorized Representative. We will be fully protected in relying on each such notification and on your obligation to promptly notify us of any change in the status of the Authorized Representative. We will have a reasonable period of time to act after receiving such notification. d.Security procedures.For requests made in writing or by fax, operator-assisted telephone call or transmission, a Customer ID assigned by us is required. For CEO requests, you must have Log-On Credentials. For touch-tone/automatic response telephone requests, a Passcode is required. Operator limits may also be required. It is your responsibility to establish internal procedures that will minimize the risk of an unauthorized person gaining access to the Customer ID, Log-On Credentials and Passcode(s). Such internal procedures include without limitation requiring users to maintain such number(s) and code(s) in strict confidence. You will notify us immediately in the event a breach of security is suspected. e.Debit of Account.On each Business Day that we make a Cash Shipment available to your Agent, we are authorized to debit your Account for the aggregate amount of the Cash Shipment. You will maintain collected balances in the Account sufficient at all times to fully cover any debit. We have no obligation to release a requested Cash Shipment or any portion thereof to your Agent unless there are sufficient collected funds in the Account to fully cover the amount of the Cash Shipment when it is to be made available to your Agent. If you fail to specify your Account to us, we may debit any account which you maintain with us for the amount of a requested Cash Shipment. f.Packing slip; differences in shipment amount.A packing slip will be included with each Cash Shipment which states: i.The aggregate amount of the Cash Shipment, ii.The overall number of containers included in the Cash Shipment, and iii.The number of containers delivered to your Agent for transmittal to you. For each Cash Shipment we make available to your Agent, you will notify us immediately in writing of any difference between the amount specified on the packing slip for that Cash Shipment and the amount, as counted by you, of the Cash Shipment. In the event that the difference cannot be resolved, our count of the amount of the disputed Cash Shipment will be conclusive and binding on you. 3.Cash vault processing.The following procedures will govern delivery of Deposit Shipments to our cash vault locations and our processing of such Deposit Shipments: a.Delivery by your Agent.You will deliver Deposit Shipments in Deposit Bags to one of our cash vaults via your Agent. You are responsible for making all arrangements with your Agent for delivery of Deposit Shipments, and you assume all risk of loss while a Deposit Shipment is in the possession of your Agent. We may accept Deposit Shipments from any person we believe in good faith to be your Agent. The delivery of a Deposit Bag to us or our receipt of it on a manifest will not be deemed proof of our receipt of the contents listed on the deposit slip contained in the Deposit Bag or your records. We will have no responsibility for any Deposit Bag or its contents delivered to one of our cash vaults until we accept the Deposit Bag in accordance with our procedures and we count the contents of the Deposit Bag. b.Delivery procedures.When you deliver a Deposit Shipment to our cash vault, you agree you (and/or your Agent) will do the following: i.Deliver Deposit Bags only at the locations, on the days, and during the hours published by us from time to time, ii.Properly endorse all checks and other negotiable instruments included in a Deposit Shipment, iii.Use only Deposit Bags approved by us that are properly secured, iv.At the time of delivery, your Agent will provide us with a delivery manifest which specifies the number of Deposit Bags you included in the overall shipment delivered to us, as well as the contents of each Deposit Bag, Item 2B-304 4 | Commercial Depository Service Description | Revised January 2, 2020 v.Obtain the signature of our employee who accepts delivery on that portion of the delivery manifest which your Agent retains, and vi.Retain a copy of the receipt or other document covering each Deposit Bag you deliver to your Agent for at least one year from the date of delivery. You agree you will only use Deposit Bags for the deposit of Items. You will not use Deposit Bags in any unauthorized manner or for any unlawful purpose. As to any property other than Items included in a Deposit Bag, we will not be deemed a bailee and will have no liability for any loss of or damage to such property. c.Cutoff Time; AccountDeposits.If a Deposit Shipment is received at one of our cash vaults on a Business Day before the Cutoff Time for that cash vault, the total amount of the deposits in such Deposit Shipment will be credited on that Business Day to the Account specified on the deposit slip for that Deposit Shipment. If a Deposit Shipment is received at a cash vault on a Business Day after the Cutoff Time, the total amount of the deposits in that Deposit Shipment will be credited to the Account on the next succeeding Business Day. We will not deposit any Items received in any Deposit Shipment unless the account number of the Account into which the deposit is to be made is specified on the deposit slip for that Deposit Shipment. d.Processing of Deposit Shipments.You authorize us to open each Deposit Bag, count the contents, credit the amount of Items to the Account with us indicated on the deposit slip contained in the Deposit Bag and process, all in accordance with our customary procedures. All deposits are subject to verification, and our count of the Items will be conclusively deemed to be correct and complete for all purposes. No relationship of debtor and creditor will arise between you and us until the count has been completed and the deposit credited to the Account. You acknowledge that you have had an opportunity to have our applicable count and verification procedures explained to your Authorized Representative and agree that the same will be deemed commercially reasonable. e.Adjustment procedures.If the aggregate amount of the Items in any Deposit Shipment, as counted by us, is less than the amount reported on the deposit slip covering that Deposit Shipment, we will debit the Account specified on the deposit slip by such difference and report the difference to you. If that Account has an insufficient collected and available balance to cover the debit, we will debit any of your other accounts with us for the difference. You agree to promptly reimburse us for the difference (or any portion thereof) for which there are insufficient available balances in your accounts with us. If the aggregate amount of the Items in any Deposit Shipment, as counted by us, is more than that reported on the deposit slip covering the Deposit Shipment, we will credit the Account specified on the deposit slip for the difference and notify you. 4.Night Depository delivery and processing.The following procedures will govern Night Deposits, and our processing of Night Deposits: a.Night Depositories; issuance of keys.You may make Night Deposits to your Account by placing the Items to be deposited into a Night Bag and then placing the Night Bags in the Night Depository. Each of your offices listed on the Night Depository Set-up Form will receive one key to the Night Depository at a designated Branch. You will designate to us in writing the individuals to receive the key for each of your offices. We may require such individuals to sign a receipt for the keys they receive. Item 2B-305 5 | Commercial Depository Service Description | Revised January 2, 2020 b.Contents of Night Bags; deposit of Night Bags.You agree that Night Bags will be used only for the deposit of Items, and will not be used in any unauthorized manner or for any unlawful purpose. If any property other than Items is included in a Night Bag, we will not be deemed a bailee and will have no liability for any loss of or damage to such property. Each Night Bag must contain one or more deposit slips which: i.Lists all the Items contained in that Night Bag and their total dollar amount, and ii.Identifies your Account to which the dollar amount of the deposit is to be credited. At the time each Night Bag is placed in a Night Depository you agree to securely close each Night Bag, place it completely in the Night Depository and securely lock the Night Depository. c.Processing of Night Deposits.We may open each Night Bag and remove its contents without you or any of your representatives present. The contents of each Night Bag will be processed in accordance with our standard procedures. The Cutoff Time for deposits made through the Night Depository may be different from that for deposits made at the teller line. You understand and agree that the contents of a Night Bag will not be credited to the Account, nor will the relationship between you and us be that of a debtor to a creditor with respect to any Item in a Night Bag, until we have accepted the Item for deposit into the Account after counting all the Items in the Night Bag and calculating the total dollar amount of all such Items. d.Counting and adjustments.If your records regarding the total dollar amount of the Items in any Night Bag differ from our calculation of the total dollar amount of the Items in the Night Bag, you have the burden of proving that your records show the correct amount in the Night Bag or our total will be accepted as final. If there is a difference between our total and your total for the amount of Items in a Night Bag (as shown on the deposit slip(s) in the Night Bag), we will send you a statement indicating the amount of the difference. In the event that the difference cannot be resolved, our count of the dollar amount will be conclusive and binding on you. e.Claims of lost or stolen Items.You agree that you will have total responsibility for each Night Bag and its contents until the Night Bag has dropped completely into a Night Depository. You agree to notify us immediately if you determine that any Night Bag or any Item in a Night Bag has been lost or stolen while at one of our Branches. You will have the burden of proving the amount of any Item which you claim was lost or stolen while it was at a designated Branch and that disappearance of the Item occurred while it was at the designated Branch. 5.Special instructions.You may notify us in writing of any special instructions relating to cash orders or deposits of Items at our cash vault or Night Depositories. We may at our option accept or reject the instructions and so notify you. Even if accepted, we may stop complying with the instructions upon prior notice to you if we believe continued compliance would increase our costs or risks, interfere with our established or revised procedures, or diminish the efficiency of our operations. You will be solely liable for any loss attributable to increased risk resulting from a special instruction. 6.Further assurances.You agree to do all acts we may consider reasonably necessary or desirable to implement and carry out the intent of this Service Description. You agree to provide us with information we request regarding any Deposit Shipment, including any information necessary to file a Currency Transaction Report and to determine the source of any Cash or Items in a Deposit Shipment. 7.Representations and warranties.To be eligible to make Deposit Shipments at a cash vault or Night Depository, you represent and warrant to us at the time of the delivery of each Deposit Shipment that: a.Deposits for own account.You make Deposit Shipments for your sole account and do not directly or indirectly make any Deposit Shipments on behalf of any other party, unless you have previously disclosed such party to us and we have approved such party in writing, in our sole discretion. Item 2B-306 6 | Commercial Depository Service Description | Revised January 2, 2020 b.No deposits from outside the United States.You do not make Deposit Shipments from any source known, or which upon reasonable inquiry would be known to you, to be outside the United States. c.No business as a foreign exchange house.You do not conduct any business, whether in whole or any part, as a foreign exchange house including, without limitation, as a Casa de Cambio. 8.Contaminated Cash.You agree not to send contaminated or damaged Cash to our cash vaults unless you or our Agent has prepared such Cash in accordance with the Federal Reserve Banks' applicable specifications and procedures. 9.Termination of Services.We may immediately terminate this Service in whole or in part in the event of your breach of any representation or warranty in section 7 (Representations and warranties). Otherwise, we may terminate this Service upon sixty (60) days prior notice to you. 10.Survival. Sections 2(e), 2(f), 3(d), 3(e), 4(d), 4(e), 6 and 9 will survive termination of this Service. SafeVantage® Service 1.Description of Service.We make the SafeVantage Service available to you in connection with the Commercial Depository Service described above in this Service Description. With the SafeVantage Service, we will provide provisional expedited credit to you for the Cash currency properly deposited into the Equipment's currency acceptors. Following our receipt of a Safe Report, we will provide provisional expedited credit to your Account in the total amount set forth in such Safe Report. Credits will only be applied on Business Days in accordance with the SafeVantage Setup Form. Currency and other Items inserted using the manual envelope drop of the Equipment will not receive provisional expedited credit, and will be processed and credited in accordance with the cash vault processing procedures for the Commercial Depository Service, as described above in this Service Description. 2.Conditions to provision of our SafeVantage Service. As conditions to our provision of the SafeVantage Service: a.You must enter into a Vendor Agreement, b.We must agree that the Equipment is suitable and compatible, in our sole discretion, for the SafeVantage Service, and c.You must agree to use the Equipment in accordance with the Vendor Agreement and as instructed by us as necessary from time to time in connection with the SafeVantage Service. You acknowledge that we are not providing the Equipment and have no obligation or liability with respect to the Equipment or any service related thereto other than the SafeVantage Service. 3.Ownership of Cash.You agree that Wells Fargo-Owned Cash is our Cash currency and will not at any time be your property or the property of any other person, including your Agent. No person, other than us and our Representatives, shall have any possessory or ownership rights to Wells Fargo-Owned Cash under Section 362 or Section 541 of the U.S. bankruptcy code. You shall take all actions necessary, and all additional commercially reasonable actions that we request to ensure and evidence that Wells Fargo-Owned Cash remains our sole and exclusive property. You agree that neither you nor your Agent will commingle Wells Fargo-Owned Cash with Cash currency owned by another financial institution or any other person. Item 2B-307 7 | Commercial Depository Service Description | Revised January 2, 2020 4.Access to Cash. You agree that physical access to Wells Fargo-Owned Cash will be restricted to: a.Your Agent solely for the purpose of performing services in accordance with the Vendor Agreement, and b.If applicable, a maintenance service provider solely for the purposes of providing routine maintenance services or repairs on the Equipment. You agree that we will, at all times, have control and immediate access to all Wells Fargo-Owned Cash by having : (1) the ability to recall any of the Wells Fargo-Owned Cash the same Business Day as the day of the request; and (2) unfettered and immediate access to the Wells Fargo-Owned Cash upon your financial distress as determined in our sole discretion. You agree to fully cooperate with us and our representatives in connection with our access to Wells Fargo-Owned Cash, including instructing your Agent to deliver Wells Fargo-Owned Cash to one of our cash vault locations if and as requested by us. You release us and our representatives (including without limitation any armored carrier engaged by us) from any and all Losses arising out of or related to our representative acting on our request or direction to access Wells Fargo-Owned Cash on our behalf and/or to deliver the Wells Fargo-Owned Cash to us, except to the extent any Losses arise from the gross negligence or willful misconduct of our representative. Our representative shall be a third party beneficiary of the release described above in this section. 5.Risk of loss.You are responsible for all risk of loss and liability for Wells Fargo-Owned Cash that is not at one of our cash vault locations, including but not limited to loss, damage or contamination of Wells Fargo-Owned Cash, theft or destruction of Wells Fargo-Owned Cash, malfunction of the Equipment or you, your Agent's or any of your representative's negligence or willful misconduct. 6.Adjustments.If the total amount of the Cash currency processed and verified for a Safe Report is less than the amount reported for such Safe Report, we may debit the Account without notice to you. If the Account has insufficient funds to cover the debit,we may debit any of your other accounts with us for the difference, and you agree to promptly reimburse us for the difference (or any portion thereof) upon our demand, without setoff or counterclaim. If the total amount of the Cash currency processed and verified for a Safe Report is more than the amount reported on such Safe Report, we will credit the Account for the difference without notice to you. If your Vendor Agreement provides any guarantees or other protection for the contents of the Equipment including Cash currency deposited through the currency acceptors, we reserve the right to require you to file a claim with such vendor before making any claim against us. 7.Reimbursement.Unless it results solely from our negligence or willful misconduct, you will reimburse us for Losses we incur from (a) providing the SafeVantage Service to you in accordance with this Service Description, or (b) an action you ask us to take in connection with the SafeVantage Service and this Service Description. You authorize us to recover any such amount by debit to your accounts with us or our affiliates. 8.Contaminated Cash.You agree not to send contaminated or damaged Cash to our cash vaults unless you or our Agent has prepared such Cash in accordance with the Federal Reserve Banks' applicable specifications and procedures. 9.Survival. Sections 3 - 7 will survive the termination of the SafeVantage Service. 10.Notice.You agree to provide us immediate notice of any default or breach of the Vendor Agreement by you or the vendor or termination of the Vendor Agreement. 11.Termination. Either party may terminate the SafeVantage Service in accordance with the terms of the Master Agreement. In addition, if the Vendor Agreement is terminated for any reason, the SafeVantage Service will automatically terminate, unless otherwise agreed by you and us. Item 2B-308 8 | Commercial Depository Service Description | Revised January 2, 2020 Glossary Account Agreement means the applicable account agreement governing your Account. Agent means an armored car service approved by us or, in Alaska only, the U.S. Postal Service, in each case, acting as your agent. Applicable Law is defined in section 3 of the Master Agreement. Authorized Representative means (a) any person you authorize us to communicate with regarding authorization codes or other security procedures for this Service; (b) your Agent authorized to accept delivery of Cash; and (c) where applicable, the persons who are authorized users of this Service. Branch means one or more of our branch locations listed on our Night Depository Set-up Form. Business Day means every day except Saturday, Sunday and federal holidays. Cash means U.S. denominated currency and coin. Cash Bag means bags or other containers into which Cash Shipments are placed. Cash Request means a request you make to us in writing, telephonically by operator-assisted call or by touch tone/automated response, or electronically via transmission, fax, or our Commercial Electronic Office® (CEO®) portal for a Cash Shipment in the amount you specify. Cash Shipment means shipments of Cash in Cash Bags in accordance with this Service Description. Currency Transaction Report is defined in the regulations implementing the Currency and Foreign Transactions Reporting Act of 1970, as amended from time to time. Customer ID is a unique identifier given to you by us for each of your locations enrolled in the Service. Cutoff Time means our cutoff time each Business Day that we separately disclose to you for the Service. Deposit Bag means bags or other containers into which Deposit Shipments are placed. Deposit Shipment means your delivery of Items in accordance with this Service Description. Equipment means certain units of safes provided by vendors, in each case, acceptable to us. Items mean, collectively, Cash, checks and other negotiable instruments properly endorsed by you. Losses means all liabilities, losses, damages, claims, obligations, demands, charges, costs, or expenses (including reasonable fees, disbursements of legal counsel and court fees). Master Agreement means the Master Agreement for Treasury Management Services. Night Bag means disposable bags used for Night Deposits. Night Deposit means your delivery of Items to our Night Depositories in accordance with this Service Description. Night Depository means the night depository receptacle at one of our Branches. Item 2B-309 9 | Commercial Depository Service Description | Revised January 2, 2020 Night Depository Set-up Form means the form required to be completed to receive key(s) to access the Night Depository. Passcode means a code established to access our Telephony Interface Unit via the telephone number we provide to you. Safe Report means a transmission report from any unit of Equipment stating the amount of Cash currency inserted into the Equipment's currency acceptors. Vendor Agreement means a valid and binding agreement with a vendor, acceptable to us, for the provision of the Equipment. Wells Fargo-Owned Cash means all Cash currency located in the Equipment and the amount of Cash currency removed from the Equipment for delivery to us by your Agent, in each case, for which we have given you provisional expedited credit. Item 2B-310 © 2019 Wells Fargo Bank, N.A. All rights reserved. Check Collections Service Description Treasury Management Services November 8, 2019 Item 2B-311 2 November 8, 2019 | Check Collections Service Description Table of contents 03 Introduction 03 Services 03 Returned Item Service 06 Wells Fargo Remote Deposit Capture and Image Delivery Item 2B-312 3 November 8, 2019 | Check Collections Service Description Introduction The Service Documentation contains the terms and conditions governing each service ("Service") that Wells Fargo Bank, N.A. ("Bank") provides to Company under this Service Description. "Company" is the Bank customer identified on the Acceptance of Services that is signed when you enroll in Services ("Acceptance"). The Service Documentation includes: a. The Service Description (which contains terms and conditions applicable to the specific Service), b. The Acceptance (which indicates Company’s acceptance of the Service Documentation), c. The Master Agreement for Treasury Management Services (“Master Agreement”) (which contains terms and conditions applicable to all Services), d. The account agreement governing the account(s) (each, an “Account”) Company uses in connection with the Service, e. The Product Enrollment Form (which contains set-up information for each Service in which Company is enrolling), and f. User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). This Service Description and the Master Agreement are posted at Bank's Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents comprising the Service Documentation, they will govern in the order listed above. Company's use of the Service confirms Company's receipt of an agreement to be bound by the applicable Service Documentation. If an enhancement to the Service or other change requires a change to this Service Description, Bank will post an updated Service Description on the CEO® portal. When required by applicable law, Bank will notify Company of the update. If Company continues to use the Service after the update takes effect, Company will be deemed to have agreed to the update. Services Returned Item 1. Description of Bank’s Returned Items Services. A "Returned Item" is an Item that is returned to Bank unpaid after Company deposits it to an account at Bank (or another financial institution) that Company has enrolled in one or more of Bank's Returned Item Services (each, "Account"). Bank's Returned Item Services include: a. Special Instructions regarding the handling of Company's Returned Items (section 3); b. Returned Item Decisioning through Bank's CEO® portal (section 4); c. Electronic Returns through which Bank submits Company's Returned Items as RCK entries in accordance with the National Automated Clearing House Association ("NACHA") Operating Rules and Guidelines as supplemented by any applicable operating rules of any automated clearing house of which Bank is a member, each as may be amended from time to time (together, "NACHA Rules") (sections 5-10); d. Centralized Return Processing through which Bank processes Company's Returned Items as Company's centralized return processor (sections 11-14); e. Returned Item Forwarding through which Bank forwards Returned Items Bank receives on Company's Accounts at Bank to Company's centralized returns processor (section 16); and f. Returned Item Service Fee Recovery through which Bank issues MICR drafts to recover service fees Company assesses on its customers in connection with Returned Items (section 17). Item 2B-313 4 November 8, 2019 | Check Collections Service Description 2. Rules applicable to Bank's Returned Item Services. Bank will provide the Services to Company in accordance with: a. The Service Documentation including without limitation the User Guide that Bank makes available to Company at www.wellsfargo.com; and b. State and federal laws and regulations and clearinghouse rules applicable to a Returned Item which may include Federal Reserve Board Regulation CC Subpart C relating to the collection of checks ("Reg CC"), Federal Reserve Board Regulation E ("Reg E") and, in the case of Bank's Electronic Returns Service, when Bank originates an RCK entry on Company's behalf, the NACHA Rules. 3. Special Instructions Service. When Company enrolls in Bank's Special Instructions Service, Bank will process Company's Returned Items in accordance with the Special Instructions Company communicates to Bank from time to time. 4. Returned Item Decisioning Service. When Company enrolls in Bank’s Returned Item Decisioning Service, Bank will use the CEO® portal to notify Company of Returned Items Bank receives prior to the cut off time Bank separately discloses to Company each Business Day. Each Returned Item will be listed by the default disposition (redeposit or chargeback) Company separately selects. Prior to the daily deadline Bank separately discloses, Company will review the Returned Items and accept or change the disposition of each Returned Item Bank identifies as eligible for decisioning through the CEO® portal. Bank will process each Returned Item not accepted or changed by this deadline according to Company's default disposition on file with Bank. 5. Electronic Returns Service. When Company enrolls in Bank's Electronic Returns Service, Bank submits RCK entries for Company's Returned Items that Bank, using a data-based decisioning method, has determined qualify as RCK entries under the NACHA Rules. The financial institution on which a Returned Item was drawn may reject any RCK entry without liability to Bank. The NACHA Rules require the originator of an RCK entry to make certain representations and warranties with respect to the original item for which the RCK entry is initiated. If Bank incurs any liability for breaching any of these warranties, Bank will look to Company to reimburse Bank. 6. Authorization. Company represents and warrants to Bank that the issuer of any Returned Item has authorized Company to represent the Returned Item electronically and that such authorization is in all respects legally sufficient under applicable law. 7. Rejected entries. In the event any RCK entry submitted on behalf of Company is rejected by the ACH for any reason and sufficient data is available to Bank to permit it to repair the RCK entry, Bank will make the repair. Company will provide to Bank on request all information necessary to repair any RCK entry or file of RCK entries. 8. Representment/returned check fees. Company acknowledges that the NACHA Rules do not allow collection of fees associated with a represented item by means of a single RCK entry in the amount of both the represented item and associated fees. Company represents and warrants that each item it deposits to its Account at Bank or another financial institution will only be for the amount of the item, and will not include any amount for a representment/returned item fee or similar fee. 9. Provisional credit. Any credit to Company's Account in connection with an RCK entry is provisional until such time as settlement for the RCK entry becomes final. In the event any RCK entry is returned or an adjustment memorandum is received with respect to the RCK entry, Company will immediately deposit with Bank sufficient good and collected funds to cover the returned RCK entry or adjustment memorandum. Company authorizes Bank to debit any of Company's account(s) for the amount of any such returned RCK entry or adjustment memorandum. Item 2B-314 5 November 8, 2019 | Check Collections Service Description 10. Reimbursement. Unless it results solely from Bank's negligence or intentional misconduct, Company will indemnify and reimburse Bank from and against any and all Losses and Liabilities that Bank incurs either directly or indirectly, in connection with (a) the breach of any warranty Bank makes under the NACHA Rules or Company makes in the Service Description, or (b) any action Company asks Bank to take in connection with Bank's Electronic Returns Service. 11. Centralized Check Return Service. When Company enrolls in Bank's Centralized Check Return Service, Bank processes Returned Items from Company's Account(s) at Bank and financial institution(s) other than Bank with which Company arranges for Bank to provide the Service. Company will place a special endorsement on the back of each check or other item it intends to deposit with a financial institution other than Bank that, upon dishonor, it wishes to have returned to Company's Centralized Return Account at Bank. This endorsement is the "centralized returns endorsement". It will include all of the information required by 12 CFR §229.35 (as amended from time to time) to be included in an endorsement made by a bank of first deposit and, to the extent possible, conform to the form of such an endorsement. The centralized returns endorsement will be designed to be more prominent than the endorsement of the actual depositary bank and thereby increase the likelihood that the paying bank or other payor and any subsequent returning bank will identify Bank as Bank of first deposit. Bank, upon request, will supply Company with endorsement stamps or examples of endorsement stamps that satisfy the requirements of this section. 12. Relation of multiple endorsements. Company understands (a) the centralized returns endorsement is in addition to, and not in place of, the endorsement placed on an Item by the depositary bank; (b) the centralized returns endorsement may or may not obscure, in whole or in part, the endorsement placed on the Item by the depositary bank; and (c) the endorsement placed on each Deposited Item by the depositary bank may or may not obscure, in whole or in part, the centralized returns endorsement. 13. Delayed returns; lost instruments; liability; indemnification. With respect to where to return checks, 12 CFR §§229.30(g) and 229.31(g), respectively, provide that paying and returning banks may rely on any routing number that appears on a returned check as that of the bank of first deposit. This means a Returned Item may be returned to either Bank or to the actual depositary bank. It also means there may be a significant delay in Bank's receipt of a Returned Item. Company, not Bank, is solely responsible for any and all claims, damages, losses, and expenses of any kind including without limitation attorney's fees and costs (collectively, "Losses and Liabilities") that may arise, either directly or indirectly, in connection with any delay in the return of any Returned Item. Company agrees to indemnify and hold Bank, its directors, officers, employees and agents (collectively, "Indemnified Persons") harmless from all Losses and Liabilities arising out of or in any way connected with acts or omissions by Bank or any such indemnified party in connection with the delay in the return of any Item deposited to Company’s account at another financial institution . 14. Bank's right to chargeback Returned Items. Bank may chargeback a Returned Item to any account Company owns in whole or in part at Bank or any affiliate of Bank without regard to whether the Returned Item was initially deposited to Company's Account at Bank or at another financial institution. 15. Returned Item Forwarding. When Company enrolls in Bank's Returned Item Forwarding Service, Company will place its centralized returns endorsement identifying Company's centralized return processor on the back of each check or other item it deposits to its Account(s) at Bank that, upon dishonor and subsequent receipt by Bank, it wishes Bank to forward to Company's Centralized Return processor. Bank will forward Company's Returned Items that Bank receives to Company's centralized return processor. Company acknowledges the possibility of a delay in its centralized return processor's receipt of a Returned Item that is first received by Bank and agrees Section 13 of this Service Description including Company's agreement to indemnify Indemnified Parties applies to Losses and Liabilities of any Indemnified Party in connection with Bank's Returned Item Forwarding Service. ited to Company's Account at Bank or at another financial institution. 16. Returned Item Service Fee Recovery. When Company enrolls in Bank's Returned Item Service Fee Recovery Service, Bank issues a MICR draft on the account of the issuer of a Returned Item in the amount to which Company and Bank separately agree will be Company’s Returned Item service fee. Company represents and warrants to Bank that Company has properly disclosed to all its customers that it assesses a service fee for checks returned unpaid for any reason. Item 2B-315 6 November 8, 2019 | Check Collections Service Description 17. Company's agreement to indemnify Bank. Company will indemnify, defend, and save harmless the Indemnified Persons from and against all Losses and Liabilities awarded against or incurred or suffered by Indemnified Persons arising directly or indirectly from or related to: a. Any material breach in a representation, warranty, covenant, or obligation of Company contained in the Service Documentation; b. The violation of any applicable law, statute, or regulation or of the Rules Applicable to Bank's Returned Items Services including without limitation Reg CC, Reg E and the NACHA Rules in the performance of Company's obligations under the Service Documentation; c. A breach of any warranty Bank makes under the NACHA Rules in connection with Bank's Electronic Returns Service under this Service Description ; and d. Any negligent or intentional act or omission by Company in the performance of its obligations under the Service Documentation. 18. Survival. Sections 5, 6, 8, 13, 15 and 17 of this Service Description will survive termination of the Service. Wells Fargo Remote Deposit Capture and Image Delivery 1. Description of service. The Service enables Company to create or process Electronic Checks from eligible paper checks and transmit the Electronic Checks in an electronic file ("Electronic File") to Bank for review and processing for credit to Company's deposit account at Bank ("Account") in accordance with this Service Documentation. An "Electronic Check" means an electronic image of, and electronic information derived from, an eligible U.S. Dollar paper item or check that conforms to ANSI X9.100-187. Bank's Reference Guide for the Service lists eligible U.S. Dollar checks (and ineligible checks). For each Electronic Check Bank determines is eligible for processing, Bank will: a. Create a substitute check conforming to ANSI X9.100-140 that Bank will present directly or indirectly to the bank (a) on which the original paper check to which the Electronic Check relates is drawn, or (b) at or through which the original paper check is payable (each, the "Paying Bank"); b. Include the Electronic Check in an electronic file for presentment directly or indirectly to the Paying Bank; or c. Post or present any Electronic Check for which Bank is the Paying Bank. 2. Creating or processing Electronic Checks and transmitting Company's Electronic File to Bank. To create or process Electronic Checks and transmit Company's Electronic File to Bank, Company will use either (a) Bank provided software and Bank provided, certified or approved hardware, or (b) Company's software and hardware or third-party provided software and hardware, provided each generates Electronic Checks and Electronic Files that meet Bank's then current standards and specifications. Any third-party processor Company uses to prepare and/or transmit Company's Electronic File is Company's agent, and Company will be responsible for ensuring its agent complies with Company's responsibilities under this Service Description. In particular, each Electronic File Company's agent transmits to Bank will include only Electronic Checks payable or endorsed to Company, unless Bank expressly agrees to permit Company's agent to include Electronic Checks payable to customers of Company or Bank. 3. Processing Company's Electronic File. Bank will review each Electronic Check and process the Electronic Checks Bank determines are eligible for processing on the Business Day Company transmits Company's Electronic File to Bank, if Bank receives Company's Electronic File before the processing deadline Bank separately discloses to Company ("Cut-Off Time") on that Business Day and on the next Business Day if Company transmits Company's Electronic File to Bank after Bank's Cut-Off Time. "Business Day" is every day except Saturday, Sunday and any federal holiday. Item 2B-316 7 November 8, 2019 | Check Collections Service Description 4. Exception Checks. Each Business Day on which Bank processes Company's Electronic File, Bank may, without liability to Company, reject Electronic Checks Bank determines are ineligible for the Service (each, an "Exception Check"). "Exception Check" includes without limitation an Electronic Check that (a) is illegible or contains MICR data that is not machine-readable, (b) was previously processed as an Electronic Check, (c) is drawn on a bank located outside the United States and is not payable at or through a bank located within the United States, (d) fails to conform to ANSI X9.100-187, or (e) any Electronic Check other than one described in (a), (b), (c), or (d) of this section 4 that applicable law prohibits Bank from accepting through a remote deposit capture platform. Bank will notify Company of each Exception Check through Bank's Commercial Electronic Office® service or other communication channel at Bank's discretion. Company will deposit an Exception Check to Company's Account only by depositing the original Paper Check to which the Exception Check relates or as otherwise agreed by Bank and Company. Even if Bank does not identify an Exception Check when Bank processes the Electronic File that includes the Exception Check, the substitute check or purported substitute check Bank creates from the Electronic Check may be returned to Bank because, among other reasons, the Paying Bank determines it is illegible or missing an image. Bank's failure to identify an Exception Check will not limit Company's obligations to Bank under section 8. 5. Deposits to Company's Account. Bank will be deemed to have accepted each Electronic Check for deposit to Company's Account (other than any Exception Check) (a) on the Business Day Bank processes the Electronic Check (b) at the Bank office where Company's Account is maintained. Funds from these Electronic Checks will be made available in accordance with Bank's Funds Availability Policy applicable to Company's Account and will be deemed to be collected in accordance with Bank's Electronic Deposit Collected Funds Schedule which Bank will provide to Company upon request and may amend from time to time. If an Electronic Check or substitute check is dishonored by a Paying Bank, Company acknowledges and agrees that Paying Bank may create and return to Company or its customers a return substitute check conforming to ANSI X9.100-140 in lieu of the originally presented Electronic Check or substitute check. Company acknowledges and agrees that if Bank receives a notice of nonpayment from Paying Bank with respect to an Electronic Check or substitute check presented for payment, Bank has no obligation to provide this notice to Company or its customers. 6. Third-party processors. a. General. This section contains additional terms applicable when Company is a third-party processor. Company is a "third-party processor" when it uses the Service either to (a) create and process an Electronic Check on behalf of a customer or (b) process an Electronic Check one of its customers has created and transmitted to Company. b. Prerequisites for acting as a third-party processor. Prior to acting as a third-party processor with respect to any customer, Company will conduct due diligence appropriate to the type of customer (consumer or business). As part of Company's due diligence, at time a customer initially opens an account with Company, Company will obtain the customer's name, Taxpayer Identification Number, and address. In addition, Company will fulfill obligations under applicable law with respect to (a) establishing and maintaining a Customer Identification Program and an Anti-Money Laundering Program, (b) establishing and maintaining written procedures reasonably designed to identify and verify beneficial owners of legal entity customers and to include such procedures in its Anti-Money Laundering Program and (c) suspicious activity monitoring and reporting. Company will also enter into an agreement with each of its customers which includes (i) provisions paralleling those in this Service Description relating to creating Electronic Checks and maintaining the security of original Paper Checks; (ii) warranties paralleling each of the warranties Company makes to Bank in this Service Description; (iii) an acknowledgement that Bank may at any time refuse to process Electronic Checks for that customer; and (iv) if the customer is a business entity, an obligation that customer, upon request by Company, provide Company the information Company requires to enable Company to understand the nature of the customer's business. Item 2B-317 8 November 8, 2019 | Check Collections Service Description c. Risk parameters; ongoing monitoring. For each customer for which Company acts as a third- party processor, Company will, in accordance with reasonable commercial standards, monitor the customer's deposits for suspicious activity including out-of-pattern, duplicate and suspicious Electronic Checks on an ongoing basis and take appropriate actions with respect to the customer's account with Company, up to and including refusing to process Electronic Checks for the customer and/or preventing the customer from transacting on its account(s) with Company. Bank will establish and maintain confidential internal risk parameters for Company's Electronic File but Company is solely responsible for monitoring its customer's Electronic Checks. 7. Company's representations and warranties. Company represents and warrants to Bank Company will: a. Use the Service only for eligible paper checks payable to or endorsed for deposit by Company or its customers (unless Bank expressly agrees otherwise); b. Transmit to Bank only Electronic Checks suitable for processing including without limitation legible Electronic Checks containing machine-readable MICR data; c. Not transmit to Bank any Electronic Check that duplicates an Electronic Check previously transmitted to Bank or that did not originate as an eligible paper check; d. Maintain control over and sole responsibility for secure retention and destruction of each original eligible paper check for which Company or one of Company's customers has created an Electronic Check (including the security and integrity of nonpublic personal information appearing on the original paper check throughout the transmission flow and while in storage) and properly secure all hardware Company uses in connection with the Service at all times; e. Not transmit to Bank, deposit to Company's Account, or otherwise negotiate any original eligible paper check with respect to which Company has transmitted an Electronic Check to Bank, unless Bank has notified Company that the Electronic Check is an Exception Check; f. If Company uses an agent to create Electronic Items and/or transmit Company's Electronic File to Bank, Company will ensure its agent includes only Electronic Check payable to Company in an Electronic File, unless Bank expressly agrees to permit the agent to include Electronic Check payable to multiple customers of Bank; an g. If Company is a third-party processor as set forth in section 6 of this Service Description, comply with section 6 of this Service Description. 8. Company's agreement to indemnify Bank. Company will indemnify, defend, and save harmless Bank, its parent company, and its affiliates and each of their respective directors, officers, employees, and agents (collectively in this section 8, "Indemnitees") from and against all liabilities, losses, damages, claims, obligations, demands, charges, costs, or expenses (including reasonable fees and disbursements of legal counsel and accountants) awarded against or incurred or suffered (collectively, "Losses and Liabilities") by Indemnitees arising directly or indirectly from or related to: a. Any negligent or intentional act or omission by Company in the performance of its obligations under this Service Description including without limitation failing to maintain control over and sole responsibility for secure retention and destruction of each original paper check for which Company has created an Electronic Check (including the security and integrity of nonpublic personal information appearing on the original paper item throughout the transmission flow and while in storage), in which event Losses and Liabilities will include without limitation consequential damages; b. Any material breach in a representation, warranty, covenant, or obligation of Company contained in this Service Description; c. Bank acting as a "reconverting bank" under the Check Clearing for the 21st Century Act through the creation of "substitute checks" or purported substitute checks using an Electronic Check, an Exception Check or an Electronic File, in which event Losses and Liabilities will include without limitation consequential damages; and d. Bank posting or presenting an Electronic Check for which Bank is Paying Bank or presenting an Electronic Check to the Paying Bank for payment. Item 2B-318 9 November 8, 2019 | Check Collections Service Description e. Company will further indemnify, defend, and save harmless Indemnitees from and against all Losses and Liabilities by Indemnitees arising directly or indirectly from or related to Regulation CC (12 CFR Part 229) or Regulation J (12 CFR Part 210) as follows: i. Bank warrants to a warrantee that (i) the electronic image of a check accurately represents all of information on the front and back of the original check as of the time that the original check was truncated and the electronic information includes an accurate record of all MICR line information required for a substitute check and the amount of the check ("Image Quality Warranty") and (ii) the warrantee will not receive a presentment of or otherwise be charged for an Electronic Check, an Electronic Returned Check, the original check, a substitute check, or a paper or electronic representation of a substitute check, such that the warrantee will be asked to make payment based on a check it has already paid ("No Double Debit Warranty"). In the case of transfers for collection or payment, Bank makes the Image Quality Warranty and the No Double Debit Warranty to the transferee bank, any subsequent collecting bank, the paying bank, and the drawer. In the case of transfers for return, Bank makes the Image Quality Warranty and the No Double Debit Warranty to the transferee returning bank, any subsequent returning bank, the depository bank, and the owner. If any Indemnitee suffers any Losses or Liabilities arising directly or indirectly from or related to a breach of any of these warranties, Company will indemnify the Indemnitee and not hold it responsible or liable. ii. Through Bank's providing the Service to Company, Bank is required to indemnify a depository bank that accepts the original paper check from which an Electronic Check is created for losses incurred by that depository bank if the loss is due to the check having already been paid. If any Indemnitee suffers any Losses or Liabilities arising directly or indirectly from or related to such depository bank indemnity obligation, Company will indemnify Indemnitee and not hold it responsible or liable. iii. If Bank transfers or presents an "electronically created item" and receive settlement or other consideration for it, Bank is required to indemnify each transferee bank, any subsequent collecting bank, the paying bank, and any subsequent returning bank against losses that result from the fact that (i) the electronic image or electronic information is not derived from a paper check; (ii) the person on whose account the electronically created item is drawn did not authorize the issuance of the item or to the payee stated on the item; or (iii) a person receives a transfer or presentment, or return of, or otherwise is charged for an electronically created item such that the person is asked to make payment based on an item or check it has paid. If any Indemnitee suffers any Losses or Liabilities arising directly or indirectly from or related to such electronically created item indemnity obligation, Company will indemnify Indemnitee and not hold it responsible or liable. 9. Termination. In addition to its rights to discontinue providing Services under the Master Agreement, Bank may discontinue providing the Service to Company immediately upon notice if Bank determines in its sole discretion that Company has breached any of Company's obligations under sections 7 or 8 of this Service Description. 10. Additional controls on Company. a. General. In FIL-4-2009, Risk Management of Remote Deposit Capture ("RDC") Guidelines, the FFIEC sets forth guidelines for agreements between a financial institution and its RDC customers. In accordance with these guidelines, Bank has the authority upon reasonable prior notice to Company to (a) mandate specific internal controls at Company's locations, (b) periodically audit or require audits of Company's RDC operations including Company's IT infrastructure at Company's expense, and (c) request additional information about Company. b. Company's Internal Controls. Company will establish internal controls related to Company's RDC operations. Upon reasonable request, Company will provide Bank with information about its internal controls and will work in good faith with Bank to resolve any concerns that Bank identifies with respect to such internal controls. Item 2B-319 10 November 8, 2019 | Check Collections Service Description c. Company's Consumer Complaints. Bank may upon reasonable prior notice to Company request information about: i. Company's procedures for handling consumer complaints relating to Company's RDC product ("consumer complaints"), ii. The number of consumer complaints Company received in the prior calendar quarter, and iii. The then current status of each consumer complaint. 11. Survival. Sections 7 and 8 of this Service Description will survive termination of the Service. Item 2B-320 [REVISED – December 18, 2020] © 2020 Wells Fargo Bank, N.A. All rights reserved. ACH and related services Service Description Treasury Management services Item 2B-321 2 | ACH & Related Services - Revised December 18, 2020 Table of contents 03 Introduction 03 Services 03 ACH Origination Service 06 Cash Concentration Service 07 ACH Fraud Filter Service 08 Perfect Receivables® Service 09 WellsTAX® Payments Service 11 Glossary Item 2B-322 3 | ACH & Related Services - Revised December 18, 2020 Introduction The Service Documentation contains the terms and conditions under which we provide you the services described below. "You," "your" or "yours" refer to the Bank customer identified on the Acceptance of Services that is signed when you enroll in the Services ("Acceptance"). The terms "we," "us," or "our" refer to the Bank. Other capitalized terms used in this Service Description are defined in the Master Agreement or in the Glossary at the end of this Service Description. The services (each a "Service") covered by this Service Description are: • ACH Origination service • ACH Fraud Filter service • Cash Concentration service • Perfect Receivables® service • WellsTAX® Payments service The Service Documentation includes: a. The Service Description (which contains terms and conditions applicable to the Service), b. The Acceptance (which indicates your acceptance of the Service Documentation), c. The Master Agreement (which contains terms and conditions applicable to all services), d. The Account Agreement governing the Account, e. The Product Enrollment Form (which contains set-up information for each service in which you are enrolling), and f. User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). The documents and individual provisions of the Service Documentation are intended to be read together as one agreement between you and us. This Service Description and the Master Agreement are posted at our Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents that are part of the Service Documentation, they will govern in the order listed above. Your use of a Service confirms your receipt of, and agreement to be bound by, this Service Description and all Service Documentation. Services ACH Origination Service 1. Description of services. With this Service you can originate ACH credit and debit Entries in accordance with the ACH Rules. Any capitalized terms not specifically defined in the Service Documentation will be as defined in the ACH Rules. By using this Service, you authorize us to originate Entries on your behalf to Receivers' accounts, you agree to be bound by the ACH Rules, and you agree not to originate Entries that violate the laws of the United States. 2. Preparation of Entries and Files; processing schedules. You will prepare and deliver each File in accordance with the ACH Rules, User Guides and other guidelines we make available to you. You agree to use the applicable Security Procedure when you send Entries to us. We will process each File under our current processing schedule and any instructions about the Settlement Date of an Entry that you provide, if (a) we receive the File by our Cutoff Time on a Business Day and (b) the ACH is open for business. Your Files will be considered received by us when the transmission is completed and authenticated in compliance with the Security Procedure. If your File is received after our Cutoff Time or on a day when the ACH is not open for business, we will treat the File as having been received prior to our Cutoff Time on the next Business Day on which the ACH is open for business. In processing your Entries or Files, we may use any means of transmission, funds transfer system, clearing house or intermediary bank that we reasonably select. Item 2B-323 4 | ACH & Related Services - Revised December 18, 2020 3. Inconsistency of name and number. If an Entry describes the RDFI both by name and identifying number, we, a Gateway Operator or another financial institution handling the Entry may rely on the identifying number to identify the RDFI, even if the identifying number refers to an institution other than the named RDFI. If an Entry describes a Receiver both by name and identifying number, the RDFI may pay the Entry based on the identifying number, even if the number identifies a person different from the named Receiver. 4. Your payment obligations with respect to entries. You are obligated to pay us in immediately available funds an amount equal to the sum of all credit Entries you deliver to us before we send your Entries to the ACH or Gateway Operator, or post an on-us Entry. When we act as both the ODFI and RDFI for an Entry, the Entry is an "on-us Entry." You will maintain available funds in each Account sufficient to cover your credit Entries. You authorize us to debit the Account for the total amount of all credit Entries originated from it at any time. We may refuse to process any credit Entries, even if we have done so in the past, without having first been paid by you, but, if we do, the amount is immediately due and payable without notice or demand. We may take other actions to ensure we receive payment for your credit Entries including (a) upon notice to you, placing a hold on funds in any account you hold with us or our affiliate sufficient to cover your credit Entries and (b) setting off against any amount we or our affiliate owes you. In addition, we may charge the Account or any other of your accounts held with us or our affiliate for any debit Entry, including any correcting or Reversal Entry later returned to us. You will reimburse us for any returned debit Entries on the same day you receive notice of the returned Entry. You agree that we do not need to send a separate notice of debit Entries which have been returned unpaid. 5. Provisional credit. If we credit your Account for an Entry, the credit is provisional until we receive final settlement. If we do not receive final settlement, we are entitled to debit your Account or any other accounts you own in whole or in part with us or our affiliate for the amount of the Entry. If there is any remaining shortfall, you will pay it immediately upon demand. 6. Rejected entries. We may reject an Entry or File if you do not comply with the terms of the ACH Rules and the Service Documentation, and we will attempt to notify you promptly so you may correct the problem. We will have no liability for rejecting an Entry or File or failing to provide notice of a rejection. If you ask us to repair an Entry or File, we will have no liability if we are unable to make the requested repair. You will pay all charges and expenses for any repair or attempted repair. 7. Cancellation, amendment, reversal. You have no right to cancel, amend or reverse an Entry or File after we receive it. If you do request that we cancel, amend or reverse an Entry or File, we may, in our sole discretion, attempt to complete the request. If we do not complete the request, we will have no liability and you will reimburse us for any expenses, losses or damages we incur. 8. Your duty to report erroneous or unauthorized entries. You will exercise reasonable care to determine whether an Entry we accepted was either erroneous or not authorized and to notify us of the relevant facts within a reasonable time not exceeding 14 days after you receive our notification that the Entry was accepted or that the Account was debited for the Entry, whichever is earlier. If you do not notify us within 14 days, we will not be liable for any loss of interest or for any other loss relating to an erroneous or unauthorized debit to your Account or because of any other discrepancy in the notification. 9. Re-transmission of returned entries. We are not required to re-transmit a returned Entry or File to the ACH or Gateway Operator, or to take any further action on a returned on-us Entry. 10. Audit. You grant us ongoing access to your Files and the right to audit periodically your Files, ACH processes and controls so we can verify your compliance with the ACH Rules and this Service Description or any other Service Documentation. Item 2B-324 5 | ACH & Related Services - Revised December 18, 2020 11. Warranties. We make certain warranties under the ACH Rules and other Applicable Law when you use this Service. You will reimburse us for any Losses we incur, including our reasonable attorneys' fees and legal expenses, as the result of a breach of a warranty we make in connection with any of your Entries, except to the extent that the Losses resulted from our own gross negligence or intentional misconduct. 12. Indemnification. WWe indemnify certain persons under the ACH Rules when you use this Service. You agree to reimburse us and our Representatives for any Losses we incur, including our reasonable attorneys' fees and legal expenses, as the result of the enforcement of any such indemnity, except to the extent the Losses resulted solely from our own gross negligence or intentional misconduct. In addition, you will indemnify us and our Representatives from and against all Losses awarded against or incurred or suffered by us arising directly or indirectly from or related to any material breach of a representation, warranty, or covenant you provide regarding this Service. 13. Termination. In addition to the termination provisions contained in the Master Agreement, we may terminate this Service immediately upon notice to you if we determine in our sole discretion: the number of returned debit Entries is excessive; you have breached a warranty provided under the ACH Rules or this Service or otherwise failed to comply with the ACH Rules. 14. Survival. Sections 3, 5, 6, 8, 9, 12 and 13 will survive termination of this Service. Additional Terms and Service options 15. International Entries. This section contains additional terms that apply when you originate International Entries. a. General. You agree to comply with, and we will process each International Entry in accordance with: i. The laws and payment system rules of the receiving country of your International Entry, ii. Any agreement we provide to you governing International Entries between us and the Gateway Operator we use to process the International Entry, and iii. The ACH Rules. If there is a conflict among these three areas, they will govern in the order listed above. b. Currency conversion. With respect to International Entries we agree to originate in a Foreign Currency, the currency conversion is governed by section 8 (Currency conversion) of the Master Agreement. For debit Entries, however, we use the Applicable Exchange Rate in effect at the time we receive the funds for settlement of the debit Entry rather than at the time we send (or execute) the debit Entry. If the debit Entry is returned to us, we may charge the applicable Account or any other of your accounts with us or our affiliate for the amount equal to the value of the returned debit Entry, after we have converted the Foreign Currency to the Account Currency at the Applicable Exchange Rate in effect when we process the returned debit Entry. We will not be liable for a sum in excess of the original amount of the debit Entry after conversion. c. Acts or omissions of third parties. We will not be liable for: i. Any failure or delay by a Gateway Operator, any intermediary financial institution, or the financial institution designated to receive the International Entry in the receiving country in processing or failing to process any Entry we transmit to the receiving country, or ii. Any acts or omissions by a third party including the delay or failure of any third party to process, credit or debit any International Entry. 16. Third-party sender activities. This section contains additional terms that apply when you are a Third-Party Sender. a. General. Prior to originating any Entry on behalf of each customer or upon our request, you will: i. Provide us with the information we require to understand the nature of your customer's business, including the name, Taxpayer Identification Number, business activity and geographic location of your customer, and whether your customer is also a Third-Party Sender, Item 2B-325 6 | ACH & Related Services - Revised December 18, 2020 ii. Timely provide us with information we require for purposes of our registration of you or your customer as a Third-Party Sender in accordance with the ACH Rules ("Registration") and supplemental Registration information requested by us, and iii. Upon our request, obtain our written approval to originate or continue to originate Entries for that customer (which we may rescind upon written notice to you), and iv. Enter into a written agreement with that customer in which that customer agrees: 1. To assume the responsibilities of an Originator under the ACH Rules and to be bound by the ACH Rules, 2. Not to originate ACH Entries in violation of the laws or regulations of the United States including without limitation the regulations issued by the Office of Foreign Assets Control, 3. To grant us ongoing access to audit the customer and any ACH Entry that it has transmitted to you for transmission to us, and 4. That we may at any time refuse to process an ACH Entry for that customer. b. Updates to registration information. You will timely notify us of any changes to information you provide to us for the Registration of you or your customer as a Third Party Sender. c. Representations and warranties. With respect to each of your customers for which you are originating transactions through us, you represent and warrant to us that you have conducted the appropriate due diligence to determine that: i. Each customer is engaged in a legitimate business, and ii. The type, size and frequency of transactions that each customer is originating is normal and expected for the customer's type of business. d. Ongoing monitoring. You will use reasonable commercial standards to monitor each customer's business and transactions on an ongoing basis, and notify us promptly if you identify any unusual activity by your customer. You will take appropriate actions with respect to the customer, including refusing to originate Entries for your customer. 17. Perfect NOC service. With our Perfect NOC Service, we maintain a database of Notifications of Change (each, a "NOC") that we receive. We use this database to update your Entries in accordance with the Service options you select from time to time. We will notify you of each NOC we receive in connection with your Entries. Additional details about this Service are more fully described in the applicable User Guide. 18. MICR-split processing service. a. With our MICR-Split Processing Service, if we determine that an RDFI for a debit Entry you sent is not an ACH participant (or as otherwise reasonably determined by us as appropriate), you authorize us to issue a preauthorized check ("PAC") using the debit Entry data you provided. PACs are drawn upon the Receiver's account with the applicable RDFI and deposited in your Account, but do not contain the signature of the Receiver. b. You represent and warrant to us that: i. You have the appropriate authorization from each person owning the Receiver's account shown in the debit Entry data, which remains effective when we issue the PAC, and ii. You are not a "telemarketer" for purposes of the Federal Trade Commission's Telemarketer Sales Rule (16 C.F.R. Part 310). 19. Cash Concentration service. With the Cash Concentration Service, we originate debit Entries to move funds from your Remote Accounts into your Concentration Account. We make summary and detail level reports of your cash concentration transactions available to you through our Cash Concentration Reporting Service. Additional details about this Service and available service options are more fully described in the applicable User Guide. a. Options. You can choose from the following options: i. Touchtone or online option. We originate debit Entries to collect funds from your Remote Accounts for the transfer amounts you specify based on deposit information entered for each location by touch-tone telephone or computer. Item 2B-326 7 | ACH & Related Services - Revised December 18, 2020 ii.Automated Cash Concentration option. We request account balances from the financial institutions holding the Remote Accounts. We calculate transfer amounts and originate debit Entries based on your specified target balances for the Remote Accounts and other transfer parameters you may establish. b.Representations and warranties. With respect to each debit Entry we originate on your behalf, you represent and warrant to us that: i. The debit Entry is authorized, ii. If you are using the Touchtone/Online option, the corresponding deposit input is accurate, and iii. If you are using the Automated Cash Concentration Option, you have authorized each financial institution holding a Remote Account to comply with our request for balance information. c. ACH deadlines. If by our applicable Cutoff Time (i) you do not complete your deposit inputs for the Touchtone or Online option or (ii) we are unable to obtain balance information for a Remote Account for the Automated Cash Concentration option, we will not be responsible for failing to meet the ACH deadlines to originate the debit Entries. d. Automated Cash Concentration authorization. You authorize us in our own name or in your name, to request that each financial institution holding a Remote Account provide us or our designee with the account balance information each Business Day using any method specified by us. ACH Fraud Filter Service 1. Description of service. With this Service, you can manage incoming ACH Entries in accordance with the ACH Rules. Any capitalized terms not specifically defined in the Service Documentation will be as defined in the ACH Rules. You have the following options: a. Stop option. This option stops all incoming ACH Entries you have not authorized in advance (and not set as preauthorizations). Entries stopped under the Stop Option will be returned to the ODFI as unauthorized. b. Review option. You review and decision each incoming ACH Entries (not set as preauthorizations) before the applicable cutoff time and select each Entry to be either paid or returned. Entries that you have selected for return under the Review Option will be returned to the ODFI as unauthorized and we will create a reversing adjustment to your Account. If you do not make a pay/return decision on an Entry prior to the applicable cutoff time, the Entry will be paid or returned based on the default action you specified. c. Additional criteria. You may also set up additional decisioning criteria, including limits and preauthorizations. 2. Echecks. You have the following options for incoming ACH Entries that have been converted from a check (Echecks). a. Stop option. All Echecks will be automatically stopped and returned to the ODFI as unauthorized. b. Post option. All Echecks will automatically post without your review. c. No additional criteria. Additional decisioning criteria, including limits and preauthorizations, are not available for Echecks. 3. Service restrictions. You agree to be bound by the ACH Rules for all Entries. Regardless of the Service options or other criteria you have in place, we may return any Entry in accordance with the ACH Rules and Applicable Law. We may also accept any Entry, Reversal Entry or adjustment in accordance with our obligations under the ACH Rules and Applicable Law. This Service does not apply to transactions between you and us. We may pay Entries which you have authorized us to originate against your Account (for instance, loan or credit card payments), whether or not you have included these in your decisioning criteria. 4. Termination. Upon termination of this Service, you will still have the right to return individual Entries in accordance with the ACH Rules and Applicable Law. Item 2B-327 8 | ACH & Related Services - Revised December 18, 2020 Perfect Receivables® Service 1. Description of service. With this Service, you can elect options for posting and reporting information about ACH entries and wire transfers (each, a "Remittance") that we post each Business Day to your Account(s). We provide a range of unique Wells Fargo payment identification codes (WPICs) that can be used to route Remittances to your Account and help you identify and post your receivables to the correct remitter. 2. WPIC restrictions. a. You may not assign a WPIC to more than one remitter or reuse any WPIC numbers. b. If you cannot post the Remittance to your remitter in accordance with the WPIC information, you must return the Remittance. c. We reserve the right to limit your ability to receive debit or credit Remittances for any WPIC number or range of WPIC numbers above a specified amount and to change the specified amount, which may be as low as zero, at any time upon notice to you, d. We have the right to rescind any WPIC number or range of WPIC numbers at any time in our sole discretion. For example, we may do so if we consider it necessary to comply with Applicable Law. We will use reasonable efforts to notify you before rescinding any WPIC number unless we are prohibited from doing so by Applicable Law, or by our applicable policies and standards, as amended from time to time. When you receive notice of the rescission of any WPIC number, you will promptly notify the remitter assigned to the rescinded WPIC number that the WPIC number may no longer be used to receive Remittances. You will use best efforts to prevent the WPIC from being used to receive Remittances and will block or otherwise restrict access to funds received through a rescinded WPIC. 3. Processing of Remittances; chargebacks. Each Business Day, we will post to your Account all Remittances we receive prior to the Cutoff Time, except for Remittances we reject or other restricted Remittances. Each credit to your Account for a Remittance is provisional until we receive final settlement for the Remittance. If we do not receive final settlement, we may debit your Account or any other account you own, in whole or in part, with us or any of our affiliates for the amount of the Remittance. You will pay us immediately upon demand for any shortfall remaining after such chargeback. 4. Rejected Remittances. We may, but are not obligated to, reject a Remittance: a. That does not contain all of the required information specified by us, b. If we suspect that you are not entitled to the Remittance, c. If at the time we receive the Remittance, you do not maintain an Account with us, the Service has been terminated, or we are not permitted by Applicable Law to accept credits or debits to any of your Accounts, or d. If you are in default under this Service Description or any other Service Documentation. 5. Reporting. Each Business Day, we will provide you with the information about Remittances posted to your Accounts through the communications channels you elect. 6. Violation of Applicable Law. You represent and warrant to us that you will not use the Service in a manner that could result in a violation of Applicable Law. You will provide us with the information we require to understand the nature of your use of the Service and grant us ongoing access to audit your compliance with Applicable Law. In addition to our other rights to terminate the Service under the Service Documentation, we may terminate the Service upon notice to you if we determine your use of the Service could result in a violation of Applicable Law. Item 2B-328 9 | ACH & Related Services - Revised December 18, 2020 WellsTAX® Payments Service 1. Description of service. With this Service, you can use our CEO® portal or a touch-tone telephone to request transfers from your Account (each, a "Transfer") to pay your U.S. federal, state or other taxes specified from time to time in our User Guides. By using this Service, you authorize us to originate ACH credit Entries on your behalf to effectuate the Transfers. You agree to be bound by the ACH Rules, and also comply with applicable provisions of the ACH Service Description, which is incorporated by reference into this Service Description. 2. Procedures for initiating transfers. You will deliver your requests for Transfers in accordance with the Service Documentation, including the User Guides. You agree to use the applicable Security Procedures for your Initiation Method (including access codes and passwords for touch-tone telephone initiation method) when you send Transfer requests to us. 3. Accuracy of data. You will provide us with the information necessary for us to inform the applicable government agency or entity of the tax payment within the time period required by any rule or regulation governing the payment. You authorize us to rely on the accuracy of the information you have provided to us. 4. Transfer deadline. Any Transfer request delivered on any Business Day after the applicable Cutoff Time, or on a non- Business Day, will be deemed received on the following Business Day. You must deliver Transfer requests by the applicable Tax Transfer Deadline. 5. Authorized reporting agent. If you are a taxpayer required by federal law to make electronic Federal Tax Deposit (FTD) payments to the Internal Revenue Service (IRS) and submit FTD information through the U.S. Department of the Treasury's Electronic Federal Tax Payment System (EFTPS), we will make your Transfers as FTD payments submitted through EFTPS, regardless of any other instructions from you. In performing the Service, we are acting as your authorized reporting agent. You authorize us to accept debit Entries from the IRS to make the Transfers, and to debit your Account for the amount of such payments. 6. Payment for Transfers. You authorize us to debit your Account before we process a Transfer. We may refuse to process a Transfer if the Transfer would exceed the available funds in the Account on the Tax Transfer Deadline. 7. Rejected Transfers. We also reserve the right to delay or reject any Transfer if we believe the Transfer may violate Applicable Law or if we believe the Transfer will present a risk to you and/or us, or for other reasons. If we do not accept a Transfer request or must delay making a requested Transfer, we will attempt to notify you. 8. No verification of Transfer Requests. We are under no obligation whatsoever at any time to verify any Transfer and will have no liability for failing to investigate or verify any Transfer request. 9. Confirmations. We will confirm each Transfer on your account statement or on any bank information reporting service that we provide you. You must immediately inform us of any Transfer that is incorrect or unauthorized. 10. Amendments and cancellations of transfer requests. You may cancel a Transfer request before the Cutoff Time if we have not processed the Transfer. After we have processed a Transfer, it cannot be canceled, amended or reversed. 11. Records, information and audits. You will verify the accuracy of all records and information regarding the Service or any Transfer and you will notify us immediately of any errors. Nothing in the Service Documentation will relieve you of: a. Any responsibility imposed by law, regulation or contract with regard to the maintenance of records, or b. Any responsibility to perform audits and account reviews customarily conducted by persons or entities whose businesses are similar to your business. Item 2B-329 10 | ACH & Related Services - Revised December 18, 2020 12.Responsibility for paying taxes. Any interruption in the Service will not relieve you of any obligation to pay any tax to the IRS, or any other government agency or entity owed the tax, and we will have no liability to you for your failure in such circumstances to pay any tax. Item 2B-330 11 | ACH & Related Services - Revised December 18, 2020 Glossary Account means your account(s) with us used in connection with the Service. Account Agreement means the applicable account agreement governing the Account. Account Currency is defined in section 8 (Currency conversion) of the Master Agreement. ACH means Automated Clearing House. ACH Rules means the Nacha Operating Rules and any applicable local ACH rules. Applicable Exchange Rate is defined in section 8 (Currency conversion) of the Master Agreement. Applicable Law is defined in section 3 (Changes to service) of the Master Agreement. Business Day means every day except Saturday, Sunday and federal holidays. When used in connection with funds transfer Services, "Business Day" means each day on we are open for business related to that Service. CEO® portal means our Commercial Electronic Office® portal. Concentration Account means your Account designated in the Concentration Account Services Set-up Form. Cutoff Time means our cutoff time each Business Day we separately disclose to you for the applicable Service. Entry is defined in the ACH Rules. File is defined in the ACH Rules. Foreign Currency is defined in section 8 (Currency Conversion) of the Master Agreement. Gateway or Gateway Operator is defined in the ACH Rules. Initiation Method is defined in section 6 (Security procedures) of the Master Agreement. International Entry means an Entry to an account outside the United States. Item is defined in the Account Agreement. Log-on Credentials is defined in section 9 (CEO portal) of the Master Agreement. Losses means liabilities, losses, damages, claims, obligations, demands, charges, costs, or expenses (including reasonable fees and disbursements of legal counsel and court fees). Master Agreement means the Master Agreement for Treasury Management Services. NOC or Notification of Change is defined in the ACH Rules. ODFI (Originating Depository Financial Institution) is defined in the ACH Rules. Item 2B-331 12 | ACH & Related Services - Revised December 18, 2020 Originator is defined in the ACH Rules. Payment Order means an instruction to us in your name to transfer funds from your Account (and includes any communication cancelling or amending an instruction). RDFI (Receiving Depository Financial Institution) is defined in the ACH Rules. Receiver is defined in the ACH Rules. Remote Account means one or more accounts owned or controlled by you in the United States. Representatives is defined in section 11(f) (Liability and indemnification) of the Master Agreement. Reversal or Reversing Entry is defined in the ACH Rules. Security Procedure is defined in the Product Enrollment Form and in section 6 (Security procedures) of the Master Agreement. Settlement Date is defined in the ACH Rules. Tax Transfer Deadline means a date at least one Business Day prior to the date the tax payment is due to the applicable tax authority. Third Party Sender is defined in the ACH Rules. Item 2B-332 ©2016 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. Addendum to ACH Origination Service Description for State Tax Refund Return Opt-in Program Participants 1. Introduction.This Addendum to ACH Origination Service Description for State Tax Refund Return Opt-In Program Participants (“Addendum”) applies to Company in connection with its use of the ACH origination service (“Service”) pursuant and subject to the terms of the Service Documentation, including the ACH Origination Service Description (“Service Description”). If there are any conflicts between this Addendum and the Service Description, this Addendum shall control. Any capitalized terms not otherwise defined in this Addendum shall have the meaning set forth in the Service Description or the ACH Rules, unless otherwise indicated. 2. Description of Program Services. Company has agreed to participate in the State Tax Refund Return Opt-In Program (“Program”) offered by NACHA—The Electronic Payments Association (“NACHA”), through which participating RDFIs can submit Return Entries to Company under operating rules adopted specifically for the Program. In connection with Company’s participation in the Program, Company has requested that Bank enter into a State Tax Refund Return Opt-In Program ODFI Agreement with NACHA (“ODFI Agreement”). The ODFI Agreement permits Bank, as ODFI for Company, to receive Return Entries transmitted under an R17 return reason code in accordance with the operating rules adopted for the Program and the ACH Rules (collectively, “Program Rules”). Bank will provide “Program Services” under this Addendum in accordance with its obligations under the ODFI Agreement. In the event of a conflict among the foregoing requirements, the following order of precedence shall apply: (1) the ODFI Agreement; (2) the Program Rules; and (3) the ACH Rules. 3. Program Returns. Bank will receive R17 Return Entries on behalf of Company in accordance with the Program Rules. Company understands and agrees that Bank is otherwise permitted to dishonor R17 Return Entries in accordance with the ACH Rules, and that it is Company’s responsibility to notify Bank of Program Entries that should be dishonored, in accordance with the time limits set forth in the ACH Rules. Company understands and agrees that all Program Returns (as defined in the Program Rules) may be transmitted for up to 60 days following the Settlement Date of the original Entry. If a Participating RDFI wishes to transmit a Program Return after 60 days from the Settlement Date of the original Entry, the Participating RDFI must contact Bank to obtain permission for a late Program Return and Bank shall accept or deny the late Program Return request at its sole discretion. Company understands and agrees that it is the Participating RDFI’s responsibility to provide Bank with the appropriate subcode specifying the nature of each Program Return. 4. Program Information. In accordance with the requirements of the Program Rules, Company understands and agrees that Bank is permitted to share information with NACHA regarding Company’s participation in the Program, including but not limited to transaction volumes. 5. Indemnification. Bank shall have no liability for the acceptance of any Program Return in accordance with this Addendum and the ODFI Agreement. In addition, Company will indemnify Bank from and against all liabilities, losses, damages, claims, obligations, demands, charges, costs, or expenses (including reasonable fees and disbursements of legal counsel and accountants) awarded against or incurred or suffered by Bank arising directly or indirectly from or related to its performance of the Program Services. 6. Termination.In addition to the termination provisions contained in the Master Agreement and Service Description, Bank may terminate this Addendum immediately upon notice to Company if it receives notice of termination of the applicable ODFI Agreement. Item 2B-333 © 2019 Wells Fargo Bank, N.A. All rights reserved. Wire Transfer Service Description Treasury Management Services Item 2B-334 2 November 20, 2019 | Wire Transfer Service Description Introduction The Service Documentation contains the terms and conditions under which we provide you the services described below. "You," "your" or "yours" refer to the Bank customer identified on the Acceptance of Services that is signed when you enroll in the Service ("Acceptance"). The terms "we," "us," or "our" refer to the Bank. Other capitalized terms used in this Service Description are defined in the Master Agreement or in the Glossary at the back of this Service Description. The service ("Service") covered by this Service Description is: • Wire Transfer The Service Documentation includes: a. The Service Description (which contains terms and conditions applicable to the Service), b. The Acceptance (which indicates your acceptance of the Service Documentation), c. The Master Agreement (which contains terms and conditions applicable to all services), d. The Account Agreement governing the Account, e. The Product Enrollment Form (which contains set-up information for each service in which you are enrolling), and f. User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). The documents and individual provisions of the Service Documentation are intended to be read together as one agreement between you and us. This Service Description and the Master Agreement are posted at our Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents that are part of the Service Documentation, they will govern in the order listed above. Your use of a Service confirms your receipt of, and agreement to be bound by, this Service Description and all Service Documentation. Wire Transfer Service 1. Description of service. With this Service you can instruct us to transfer funds by wire. You agree to comply with all applicable payment system rules, including the national payment system rules and any other Applicable Laws and regulations of the receiving country of the transaction. 2. Preparation of payment orders; processing schedules. You will prepare each Payment Order according to guidelines we separately make available from time to time. You will use the applicable Security Procedure when you send a Payment Order to us. We will execute each Payment Order in accordance with our then current processing schedule and any accompanying instructions you include regarding the date a Payment Order is to be executed. A Payment Order will be deemed received by us when we have verified it in compliance with the Security Procedure. a. If we receive a Payment Order after our Cutoff Time on any Business Day, we will treat the Payment Order as having been received before our applicable Cutoff Time on our next Business Day. b. If we execute your Payment Order by sending instructions to another financial institution, we may send the Payment Order by any transmission method and by any route we in our sole discretion consider reasonable. Item 2B-335 3 November 20, 2019 | Wire Transfer Service Description 3. Inconsistency in name and number. a. If a Payment Order describes the person to receive the funds under the Payment Order both by name and identifying number, we or another financial institution through which the Payment Order is routed may rely solely on the identifying number to identify the person, even if the number identifies a person other than the one named. b. If a Payment Order describes a financial institution both by name and identification number, we or another financial institution through which the Payment Order is routed may rely solely on the identification number to identify the financial institution, even if the identification number refers to a financial institution other than the one named. 4. Authorization to pay. You authorize us to: a. Execute any Payment Order we verify in accordance with the applicable Security Procedure, and b. Debit the account specified in the Payment Order even if a debit results in an overdraft on the execution date. If no account is specified, we will debit your Account or any other of your account(s) with us or one of our affiliates. You will maintain sufficient available funds in the account specified in the Payment Order at the time of each debit. 5. Your duty to report erroneous or unauthorized transfer instructions. You will exercise reasonable care to: a. Determine whether a Payment Order accepted by us was either erroneous or not authorized, and b. To notify us of the relevant facts within a reasonable time not exceeding 14 days after we notify you that the Payment Order was accepted or that the Account was debited for the Payment Order, whichever is earlier. If you do not notify us within 14 days, we will not be liable for any loss of interest or for any other loss relating to an erroneous or unauthorized debit to your account or because of any other discrepancy in the notice. 6. Rejected payment orders. If a Payment Order is rejected for any reason, we will attempt to notify you promptly so you can cure the defect. However, we will have no liability to you for a rejected Payment Order or any loss resulting from our delay or failure to notify you. 7. Cancellation, amendment, reversal. A Payment Order will be final and not subject to cancellation, amendment or reversal by you, except we may, at your request, make an effort to cancel, amend or reverse a Payment Order without incurring any liability for our failure or inability to do so. 8. Drawdown requests. A “drawdown request” is an instruction from you to another depository institution to debit: a. An account at that institution and transfer the funds to us (an “outgoing drawdown request”), or b. The Account and transfer the funds to that institution (an “incoming drawdown request”). In this Service description, “Payment Order” includes drawdown requests. We may execute an incoming drawdown request that conforms with instructions we receive through Fed Wire, SWIFT, CHIPs or any other funds transfer system, provided those instructions are not inconsistent with instructions you separately provide in writing. The authority to execute the incoming drawdown request will continue until we receive your express written notice that such authority is revoked and have a reasonable time to act on it. Item 2B-336 4 November 20, 2019 | Wire Transfer Service Description 9. Limitation of liability. We will not be liable for any third party’s failure to or delay or error in processing a Payment Order. If the beneficiary bank does not pay the beneficiary specified in the Payment Order, a refund will be made only after we have received confirmation of the effective cancellation of the Payment Order and we are in free possession of the funds debited or earmarked in connection with the Payment Order. If we are notified the beneficiary bank did not credit the Account for the full amount stated in a Payment Order, our sole obligation will be to promptly execute a second Payment Order in the amount of the stated deficiency. If we execute a Payment Order that is more than the amount stated in the Payment Order, to the extent you do not receive the benefit of the full amount of the Payment Order, we will only be liable for any loss of the principal amount transferred in excess of the amount stated in the Payment Order. Additionally, we will be liable for the amount of interest you have lost due to the transfer of the excess amount, computed at the Federal Funds rate or as otherwise agreed. However, our liability for loss of interest will be limited to 20 calendar days’ interest. This section sets forth our complete liability for a Payment Order issued or received under this Wire Transfer Service description. 10. Survival. Sections 5, 6, 7 and 9 will survive the termination of the Services. Glossary Account means your account(s) with us used in connection with the Service. Account Agreement means the applicable account agreement governing the Account. Applicable Law is defined in section 3 of the Master Agreement. Business Day means every day except Saturday, Sunday and federal holidays. When used in connection with funds transfer Services, "Business Day" means each day on we are open for business related to that Service. Cutoff Time means our cutoff time each Business Day we separately disclose to you for the applicable Service. Master Agreement means the Master Agreement for Treasury Management Services. Payment Order means an instruction to us in your name to transfer funds from your Account (and includes any communication cancelling or amending an instruction). Security Procedure is defined in the Product Enrollment Form and in section 6 of the Master Agreement. Item 2B-337 Wire Transfer Services Customer Setup Form and Agreement Item 2B-338 Item 2B-339 Item 2B-340 Item 2B-341 © 2019 Wells Fargo Bank, N.A. All rights reserved. Information Reporting and Image Delivery Service Description Treasury Management Services November 8, 2019 Item 2B-342 2 | November 8, 2019 | Information Reporting and Image Delivery Service Description Introduction The Service Documentation contains the terms and conditions under which we provide you the services described below. "You," "your" or "yours" refer to the Bank customer identified on the Acceptance of Services that is signed when you enroll in the Service ("Acceptance"). The terms "we," "us," or "our" refer to the Bank. Other capitalized terms used in this Service Description are defined in the Master Agreement or in the Glossary at the back of this Service Description. The service ("Service") covered by this Service Description is: • Information Reporting and Image Delivery The Service Documentation includes: a. The Service Description (which contains terms and conditions applicable to the Service), b. The Acceptance (which indicates your acceptance of the Service Documentation), c. The Master Agreement (which contains terms and conditions applicable to all services), d. The Account Agreement governing the Account, e. The Product Enrollment Form (which contains set-up information for each service in which you are enrolling), and f. User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). The documents and individual provisions of the Service Documentation are intended to be read together as one agreement between you and us. This Service Description and the Master Agreement are posted at our Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents that are part of the Service Documentation, they will govern in the order listed above. Your use of a Service confirms your receipt of, and agreement to be bound by, this Service Description and all Service Documentation. Information Reporting and Image Delivery 1. Description of services. a. With this Service we make data regarding transactions and/or images of Items posted to or processed through your Accounts available to you in order to provide you with timely information on your Account activity. We refer to the data and images as "information." The information and reports you can access are described in the User Guide for the Service. If you elect to use the Cash Flow Analysis Service (described further in the User Guide for the Service), you may also manually populate external data you want to view through this Service. b. The methods we use to make information available to you (and we may remove or add methods from time to time) include without limitation BAI File Transfer, InfoFax fax/email, SWIFT messaging, ISO 20022 XML transmission, physical media (CD-ROM and DVD), Machine-to- Machine, our CEO portal, and an Application Programming Interface ("API") through the Wells Fargo Gateway. c. The Master Agreement (which contains terms and conditions applicable to all services), i. Posted to or processed through the Account, ii. Cashed or collected by us or accepted for deposit to the Account, and iii Returned unpaid to the Account. Item 2B-343 3 | November 8, 2019 | Information Reporting and Image Delivery Service Description Images of posted paper Items that have been converted to ACH Entries pursuant to the ACH Rules may not be available through this Service. 2. Accuracy of Information. a. We will not verify the accuracy or completeness of: (i) information from other financial institutions, (ii) information you manually populate, or (iii) cash forecasting information. Forecasting information is not a guarantee of actual performance. b. Account balances and other information that reflect intraday activity on your Account may differ from the available balance as determined under our funds availability policy (as described in the Account Agreement) and by our internal risk parameters. 3. Software Sublicense. If a software license or sublicense is required for you to access the Service ("Software Sublicense"), we will make the terms of the Software Sublicense available to you as part of the set up process for the Service. You will be required to accept the Software Sublicense before being allowed to access the Service. We may terminate any Service requiring use of a Software Sublicense immediately on written notice to you, including without limitation if you fail to comply with the Software Sublicense. 4. Stop payment orders. If you elect a service option through which you can place stop payment orders, your rights and our obligations regarding any stop payment order will be determined as provided in the Account Agreement. Glossary Account means your account(s) with us used in connection with the Services. Account Agreement means the applicable account agreement governing the Account. ACH means automated clearing house. ACH Rules means the Nacha Operating Rules and any applicable local ACH rules. Item is defined in the Account Agreement. Master Agreement means the Master Agreement for Treasury Management Services. Item 2B-344 © 2020 Wells Fargo Bank, N.A. All rights reserved. Revised November 6, 2020 Check Disbursements and Fraud Prevention Services Service Description Treasury Management Services Item 2B-345 Page 2 of 25 Check Disbursements and Fraud Prevention Services Service Description Table of contents 03 Introduction 04 Fraud Prevention and Related Services 04 Positive Pay 07 Reverse Positive Pay 09 Payment Authorization 09 Account Reconciliation Plan 10 Controlled Disbursement Account 13 Specialized Disbursements Services 13 Centralized Disbursements Manager 19 Payable Through Draft 21 Third Party Drafts 25 Glossary Item 2B-346 Page 3 of 25 Check Disbursements and Fraud Prevention Services Service Description Introduction The Service Documentation contains the terms and conditions under which Wells Fargo Bank, N.A. ("Bank") provides you the services described below. "You," "your" or "yours" refer to the Bank customer identified on the Acceptance of Services that is signed when you enroll in Services ("Acceptance"). The terms "we," "us," or "our" refer to the Bank. Other capitalized terms used in this Service Description are defined in the Master Agreement or in the Glossary at the back of this Service Description. The services (each a "Service") covered by this Service Description are: Fraud Prevention and Related Services • Positive Pay Service • Reverse Positive Pay Service • Payment Authorization Service • Account Reconciliation Plan Service • Controlled Disbursement Account Service Specialized Disbursement Services • Centralized Disbursements Manager Service • Payable Through Draft Service • Third Party Drafts Service The Service Documentation includes: a.The Service Description (which contains terms and conditions applicable to the Services), b.The Acceptance (which indicates your acceptance of the Service Documentation), c.The Master Agreement (which contains terms and conditions applicable to all services), d.The Account Agreement governing your account(s) that you use for the Service ("Account"), e.The Product Enrollment Form ("Set-up Form") (which contains set-up information for the service in which you are enrolling), and f.User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). You agree to the terms and conditions governing the Services in which you have enrolled, as described in this Service Description and in the Service Documentation, which includes details of your enrolled Services. The separate documents comprising of the Service Documentation are intended to be read together as one agreement between you and us. This Service Description and the Master Agreement are posted at our Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents that are part of the Service Documentation, they will govern in the order listed above. Your use of a Service confirms your receipt of, and agreement to be bound by, the applicable terms for the Service in this Service Description and all Service Documentation. Item 2B-347 Page 4 of 25 Check Disbursements and Fraud Prevention Services Service Description Fraud Prevention and Related Services: As further described in the Account Agreement, we offer certain Services to help reduce the risk of fraud, including the Services below. Positive Pay Service 1.Description of service. With this Service you can instruct us to pay or return counterfeit Checks, Checks otherwise not validly issued and certain altered Checks presented to us for payment on the Accounts you enroll in this Service. For purposes of this Positive Pay Service Description, "Check" refers to each check presented for payment on your Account, whether it is counterfeit, not validly issued, altered or validly issued by you. Except as otherwise provided in this Service Description, enrollment in our Account Reconciliation Plan Service is required. a.Service summary. Each Business Day, either before or after posting the Check to your Account, based on the Service option you choose as described in section 1b below: i.We electronically compare the serial number and numeric amount of each Check presented to us for payment before our Cutoff Time on the prior Business Day to your Check Issue Data (see section 2), ii.We will provide you with a report ("Exception Report") of each Check that does not match your Check Issue Data (an "Exception Check") (see section 4), iii.We review each Exception Check, and either correct or reverse and repost each Exception Check with errors that we can correct, depending on the Service option you choose as described in section 1b, iv.We will pay or return each Exception Check (see section 5), and v.We separately review each "directly-presented Check" (see section 8). b.Service options. You may enroll an Account in one of two options of the Service: i.Perfect Presentment® Positive Pay. We electronically compare a Check to your Check Issue Data prior to posting the Check to your Account. Each Check with error(s) that we can correct, such as an encoding error, will be corrected, so that the Exceptions Report includes only unresolved Exception Checks. This option is offered only on an Account enrolled in our Controlled Disbursement Service. i.Positive Pay and Positive Pay Only. We electronically compare a Check to your Check Issue Data after posting the Check to your Account. We then review each Exception Check, and reverse and repost each Exception Check with error(s) that we can correct, such as encoding errors, so that the Exception Report includes only unresolved Exception Checks. Enrollment in our ARP Service is not required for Positive Pay Only. 2.Check Issue Data. You will provide us with the Check Issue Data for all issued Checks, in the format, through the communications channel, and at the place we specify no later than our Cutoff Time. You will not distribute any Check before you have included the Check in the Check Issue Data you have provided to us. In performing this Service: a.We will use only the Check Issue Data you provide to us, b.If the Check Issue Data includes a post-dated Check (a check you issue with a date in the future), we will not compare that Check against the Checks presented for payment on the Account until that date, and c.We will not accept Check Issue Data for Checks with an issue date more than forty-five (45) calendar days in the future. 3.Payment of Matching Checks. For each Matching Check, we will make final payment on the Check and charge the Check to your Account (subject to section 11). Item 2B-348 Page 5 of 25 Check Disbursements and Fraud Prevention Services Service Description 4.Notifying you of Exception Items; providing images. When we identify an Exception Check through our electronic comparison, we notify you through the Exceptions Report. This report is available on our CEO portal. We will use reasonable efforts to provide an image of any Exception Check (including a Holdover Exception Check) to you, but we will have no liability if we are unable to do so before the Decision Deadline. a.Holdover Exception Checks. This subsection applies when you have enrolled your Controlled Disbursement Account in our Perfect Presentment Positive Pay Service. A "Holdover Exception Check" is an Exception Check we identify after we prepare and transmit the Exceptions Report to you. We will use our best efforts to notify you by calling you at the number we have on file for you. 5.Decision Deadline. You will make your pay or return decision based on the information about the serial number and amount of the Exception Check in the Exceptions Report, and if you use our Payee Validation Service (see section 7), on any payee information we provide to you. a.Instructions before the Decision Deadline. If, before the Decision Deadline, you instruct us to pay or return an Exception Check, we will follow your instructions (subject to section 11). You will use the same communications channel to instruct us that we used to notify you of the Exception Check, except that if we included the Exception Check on the Exception Report we post on the CEO portal, you will use the CEO portal to communicate your instruction regarding the Exception Check to us. b.No instructions before the Decision Deadline. If you do not instruct us before the Decision Deadline regarding an Exception Check, we will process the Check in accordance with your Default Option. If we are unable to obtain your instructions prior to the Decision Deadline regarding a Holdover Exception Check described in subsection 4(a) we will process the Holdover Exception Check in accordance with your Default Option. 6.Default Options. We return the Exception Check to the bank of first deposit marked "refer to maker" even if you validly issued the Exception Check (and do not charge it to your Account). We recommend the "return all" Default Option because it reduces the risk of unauthorized Checks being paid on your Account (even though it may result in valid Checks being returned unpaid). a."Return all." We return the Exception Check to the bank of first deposit marked "refer to maker" even if you validly issued the Exception Check (and do not charge it to your Account). We recommend the "return all" Default Option because it reduces the risk of unauthorized Checks being paid on your Account (even though it may result in valid Checks being returned unpaid). b."Pay all." We charge the Exception Check to your Account. This Default Option presents a higher risk of unauthorized checks being paid on your Account. If you elect this Default Option, you assume full liability for any losses resulting from counterfeit, altered or Checks otherwise not validly issued as described in section 9 below. 7.Payee Validation Service. a.Description of Payee Validation Service. When you enroll in our optional Payee Validation Service, we will do the following: i.On each Check that is greater than the Payee Validation Threshold, we electronically compare the payee's name on your check to your Check Issue Data. The "Payee Validation Threshold" is the dollar amount we choose above which we will perform the payee validation service. ii.If (1) there is a difference between the two names that is not within guidelines we establish, or (2) a notation or legend on the Check prevents the electronic comparison of the payee's name, we will include the Check as an Exception Check in your Exceptions Report. iii.If you notify us you have incurred a loss as a result of an unauthorized alteration of the payee's name, we will reimburse you for the face amount of any Check we pay under the Payee Validation Threshold except as provided below, provided that you notify us of your loss in writing within 3 years after the statement or Check is made available to you. Item 2B-349 Page 6 of 25 Check Disbursements and Fraud Prevention Services Service Description NOTE: When you enroll in our optional Payee Validation Service, you are charged a per-Check fee for each Check presented on your Account during a monthly billing cycle. This fee is separately disclosed to you. The per-Check fee is assessed on each Check presented including without limitation Checks not exceeding the Payee Validation Threshold. b.When we do not perform payee validation. We will not perform any payee validation review with respect to a Check if: i.The Check is less than the Payee Validation Threshold, ii.The payee's name on the Check is handwritten instead of machine-printed, iii.You fail to include the payee's name on the Check in your Check Issue Data, iv.We do not receive your Check Issue Data for the Check before our Cutoff Time, or v.You request we add the payee's name manually to Check Issue Data you have previously provided to us. c.Exceptions to reimbursement. We will not reimburse you for losses resulting from an unauthorized alteration in the payee's name if: i.The Check with the unauthorized alteration is hand-written, or ii.We fail to identify an alteration or other discrepancy in the payee's name because: 1.The payee name in your Check Issue Data did not exactly match the payee name on the Check, or 2.You used customized zone formatting. 8.Directly-presented checks. A "directly-presented Check" is a Check we receive for deposit or cashing at our branch or through another depository channel that may present higher risk. The risk is we may be required to make proceeds from a directly-presented Check available before you can review and make a timely decision on the directly-presented Check identified as an Exception Check in our Exceptions Report. When your Check Issue Data on file with us does not include or match a directly-presented Check: a.if we receive the Check for deposit, we will take those steps as we, in our sole discretion, determine are commercially reasonable for the depository channel used, to review and accept the Check or refuse to accept the check, and b.if we receive the Check for cashing, we reserve the right to refuse to accept the Check. You may instruct us to exclude all directly-presented Checks from this process. In that case, each directly-presented Check will be considered a Matching Check, even if it is not included in your Check Issue Data on file with us at the time we receive it, and we will pay it without further inquiry. 9.Limitation of liability and indemnification. a.Liability limit. We will pay each Check you have authorized us to pay as described in this Service Description (including each Matching Check) and each Check you are considered to have authorized us to pay (including each Check we pay according to your Default Option) without performing any Check verification procedure other than those procedures described with this Service Description. We will have no liability for paying a Matching Check or an Exception Check you are considered to have approved if: i.There is an alteration in its serial number or amount, ii.It is counterfeit, bears a forged or unauthorized signature, or iii.It was otherwise not validly issued. b.Indemnification. Each Check that we pay according to this Service Description will be considered properly payable, and each Check that we return as provided in this Service Description will be considered not properly payable. Without limiting the indemnification provisions contained in the other Service Documentation, you: i.Indemnify and hold us harmless from any and all Losses that we may suffer or incur as a result of our payment or return of a Check at your instruction or otherwise according to sections 5 or 8 of this Service Description, including a Check you issue before including it in your Check Issue Data, and Item 2B-350 Page 7 of 25 Check Disbursements and Fraud Prevention Services Service Description ii.Release and forever discharge us from all claims and damages, whether known or unknown, liquidated or unliquidated, contingent, direct or indirect, which you have, or claim to have against us relating to the payment or return of any Check as provided in this Service Description. 10.Stop payment; cancel and void instructions; stale-dated Checks. a.You will not use this Service as a substitute for our stop payment service. You will follow our standard stop payment procedures described in the applicable Account Agreement if you wish to stop payment on a Check that was validly issued. You will use: i.A cancel instruction only to delete an outstanding Check included in your Check Issue Data, and ii.A void instruction only to notify us that a Check included in your Check Issue Data has been destroyed and will not be re-issued. b.Using notations or legends on a Check is not an effective stop payment order or void instruction. We will not be liable for failing to follow your cancel or void instruction for any Check on which we have made final settlement. c.If you choose to use our "stale-dated" feature, we will return each Matching Check (other than a directly presented Check) that is dated past your specified stale-date, unless you instruct us to pay the Check. 11.Our right to return checks. Nothing in this Service description will limit our right to return any Check you have authorized us to pay as part of this Service if we determine that: a.The Check is not properly payable for any reason (without us agreeing to, or being required to, make such determination in any circumstance), or b.There are insufficient collected and available funds in your Account to pay the Check. You agree that our determination not to pay a Check will not constitute wrongful dishonor of that Check. 12.Survival. Sections 4, 7, 9 , 10 and 11 will survive termination of Services. Reverse Positive Pay Service 1.Description of Service. Our Reverse Positive Pay Service is an alternative to our Positive Pay Service that we provide to select customers, including customers that issue Drafts. The Reverse Positive Pay Service is required when you enroll in the Third Party Drafts or Payable Through Drafts Services. With this Service: a.You can detect fraudulent Checks by reviewing information we provide to you each Business Day about Checks that have posted to your Account from the prior Business Day ("Paid Items Report") (see section 2), b.You can request we edit Checks that have posted incorrectly to your Account, c.If you have elected our Teller Match Service, we may perform a positive pay verification of certain directly-presented Checks (see section 3) as we determine in our sole discretion from time to time, and d.You can instruct us to return unauthorized Checks. For purposes of this Reverse Positive Pay Service Description, a "Check" is a check, Draft or other paper instrument purportedly issued on your Account, whether it is counterfeit, not validly issued, altered or validly issued by you. 2.Paid Items Report. Each Business Day, we will provide you with the Paid Items Report through our CEO portal or by other methods you may elect. Each Business Day, you will compare the Paid Item Report to your Check Issue Data and before the Decision Deadline, notify us through the CEO portal of any edit requests or return instructions for those Checks described on the Paid Items Report for that Business Day. You will include in your notification the serial number and amount of each Check you wish to edit and the reason for returning each Check you wish to return. Item 2B-351 Page 8 of 25 Check Disbursements and Fraud Prevention Services Service Description 3.Teller match service. a.You may separately elect to have us perform a positive pay verification on certain directly-presented Checks, in which case the provisions in section 8 (Directly-presented Checks) of the Positive Pay Service Description are incorporated here by reference and shall apply and govern. If you enroll in this Service option, you will provide the Check Issue Data for each Check to us before you issue the Check. b.With respect to a directly-presented Check, we will have no liability to you for not performing: i.Any positive pay verification, if we do not receive and have a reasonable amount of time to act on your Check Issue Data for the Check before we receive the directly-presented Check, or ii.Payee validation, if you fail to include the payee's name in your Check Issue Data for the directly- presented Check. 4.Your failure to give us timely instructions. If we do not receive your edit requests and/or return instructions by the Decision Deadline on any Business Day, we will pay each Check described in the Paid Items Report for that Business Day, unless you have already instructed us by effective stop payment order to return that Check unpaid. 5.Checks to be paid; liability limit and indemnification. a.We will pay each Check you are deemed to have authorized us to pay in accordance with this Service Description without performing any further review of such Check. We will have no responsibility whatsoever for paying such a Check even if its serial number or amount is altered, it is counterfeit, bears forged or unauthorized signature, or is not validly issued. You waive and release us from and agree to protect us against any Losses resulting from a claim that such a Check was not properly payable. b.We will have no liability if you instruct us to return a Check (including without limitation a Check that is counterfeit, not validly issued or altered) but your instruction does not reach us in a time and manner affording us a reasonable opportunity to return the Check before we pay, accept, certify, cash or otherwise become obligated to pay the Check as provided in the Uniform Commercial Code. c.You will promptly reimburse us for any loss we incur when we make the proceeds from a Check available in accordance with Reg CC prior to our receipt of your instructions regarding the Check. 6.Edit requests and return instructions. a.Edit requests. We reserve the right to deny any of your edit requests based on our evaluation of the edit request. We will not accept edit requests with respect to any Checks that you attempt to communicate to us by any means other than the CEO portal. b.Return instructions. We reserve the right to decline your return instruction based on our evaluation of the return instruction. If your reason for returning a Check is fraud, your return instruction alone will not constitute a claim for a fraudulent transaction. You must file a separate claim with us relating to the fraudulent transaction. 7.Stop payment and our right to return Checks. Sections 10a and b (Stop payment and void instructions) and 11 (Our right to return Checks) of the Positive Pay Service Description are incorporated here by reference and shall apply and govern. 8.Survival. Sections 3, 5, 6 and 7 will survive termination of Services. Item 2B-352 Page 9 of 25 Check Disbursements and Fraud Prevention Services Service Description Payment Authorization Service NOTE: If you have the ability to write checks on your Account, we recommend that you use the Positive Pay Services to prevent check fraud. You understand that the Payment Authorization Service does not provide the same level of protection as the Positive Pay Services. If you decide not to implement the Positive Pay Services, or you do not properly use it, you assume the risk of loss for unauthorized checks. 1.Description of service. With this Service you can set limits on paper Items that may be drawn on your Accounts based on the options you choose. You may also prevent any paper checks being paid on your Accounts by choosing to set the applicable limit to zero. 2.Available options. Option (on Product Enrollment Form)Action we will take Maximum Check Amount Authorized We will automatically return unpaid Items drawn against the Account which are presented to us but exceed the "Maximum Check Amount Authorized" you provide us with. These Items are marked "Refer to Maker." Maximum Check Cashing Amount We will refuse to cash checks drawn against the Account and presented to us through our branch network, if they exceed the "Maximum Check Cashing Amount" you specify. Maximum over the Counter Withdrawal Amount We will refuse withdrawal requests against the Account which are presented to us through our branch network, if they exceed the "Maximum over the Counter Withdrawal Amount" you specify. Checks to Individuals We will refuse to cash checks drawn against the Account which are presented to us through our branch network, and which are made payable to an individual. Account Reconciliation Plan (ARP) Service 1.Description of Service. With our ARP Service, you can receive automated reporting to help you reconcile your Accounts. With this Service you can: a.Receive Account information reporting, based on the Service options you select, b.Store information about Items you issue on your Accounts, and c.Process the information in accordance with the Service options that you elect in the Set-up Form. Our User Guide for the Service details the Service options. 2.Issued check information. If you elect our full ARP Service, each Business Day prior to the Cutoff Time, you will provide us with the Issued Check Information using the communication channel(s) you elect. For purposes of this Service Description, "Issued Check Information" is the issue date, serial number and dollar amount of each Item (as defined in the applicable Account Agreement) that you issue on your Account. If you elect our Deposit Location Reporting Service, you will provide us with a list of your location numbers and names and may amend the list from time to time by notifying us in writing. Item 2B-353 Page 10 of 25 Check Disbursements and Fraud Prevention Services Service Description 3.Stop payment orders. If you use the ARP Service to place a stop payment order on any Item, you understand that: a.The Account Agreement governs the stop payment order, b.Each stop payment order is subject to our verification that the Item described in the stop payment order has not been paid, and c.This verification may occur a minimum of ninety (90) minutes after the time you transmit the stop payment order to us. Controlled Disbursement Account Service 1.Description of Service; required Accounts. The Controlled Disbursement Account ("CDA") Service is available to select customers that qualify based on their credit and other considerations. With the CDA Service, you will establish and maintain: a.One or more demand deposit accounts with us (each, a "Funding Account"), b.One or more checking accounts with us linked to a Funding Account (each, a "Disbursement Account"), and c.The information reporting service specified by us ("Information Reporting Service"). Each Funding Account and Disbursement Account and the Information Reporting Service will be identified in the Set-up Form for this Service. You will enroll each Disbursement Account in our Positive Pay Service. You will use each Disbursement Account solely to issue Checks, Drafts and electronic debits (each, a "Debit") in accordance with this Service Description. You will not issue any Debits on any Disbursement Account until we notify you that such Disbursement Account is operational. 2.Determination of Total Net Presentment. Each Business Day by the Cutoff Time, we will make the Total Net Presentment for each Disbursement Account available to you through the Information Reporting Service. The "Total Net Presentment" consists of the total dollar amount of: a.Debits that have posted in the first and, if applicable, second presentment on that Business Day, and b.Adjustments to the Disbursement Account reported on our CD Summary report, including without limitation Debits posted after the last presentment on the prior Business Day (these Debits are referred to collectively as the "Prior Day Funding Adjustments"). If the Total Net Presentment is not available to you through the Information Reporting Service by the Cutoff Time, we will have no liability, and you will estimate the Total Net Presentment. 3.Your obligation to deposit funds in Funding Account. a.Each Business Day before the Cutoff Time, you will deposit good and collected funds in your Funding Account so that the balance in the Funding Account, as determined in accordance with the Account Agreement, is sufficient to cover either: i.The Total Net Presentment or your estimate of the Total Net Presentment, and ii.The total of any Debits that have been memo posted to your Disbursement Account before the Cutoff Time on the current Business Day as set forth in the intra-day composite report we make available to you. b.If you fail to transfer funds as required in subsection 3(a) above or if such transfer was based on your estimate of the Total Net Presentment and such estimated amount was less than the actual Total Net Presentment, we may, at our sole option: i.Advance to the Funding Account(s) sufficient funds to pay the Debits presented for payment on the Disbursement Account and transfer such funds to the Disbursement Account, or ii.Return Debits, in any order, unpaid (even though we may have previously established a pattern of paying such Debits). Item 2B-354 Page 11 of 25 Check Disbursements and Fraud Prevention Services Service Description 4.Transfer of funds to Disbursement Account. Each Business Day, we will: a.Transfer from the Funding Account to the Disbursement Account the amount necessary to cover the Total Net Presentment as shown on the CD Summary Report for that Business Day, and b.Advance funds to the Disbursement Account in the amount sufficient to cover Debits that posted to Disbursement Account after the last presentment on that Business Day (and the amount advanced by us will be reported on the CD Summary Report for the next Business Day as the Prior Day Funding Adjustments). 5.Our obligation to pay debits. We will have no obligation to pay any Debit if the balance of good and collected funds in the Disbursement Account on which the Debit is drawn is not sufficient to cover the Debit at the time we make our payment decision. 6.Your agreement to repay our advances to Disbursement Account. You will unconditionally pay us on demand without setoff or counterclaim in good and collected funds the full amount of any advance we make pursuant to sections 3 and 4 plus our fees and costs incurred in connection with such advance. 7.Security interest. As security for the Obligations, you pledge to us, and grant us a lien on and a security interest in, the following property and all proceeds thereof (collectively, the "Collateral") as security for the prompt satisfaction of the Obligations: a.Each Funding Account, each Disbursement Account, and all of your other accounts with us and our affiliates, and b.Any of your property now or at any time delivered, conveyed, transferred, assigned, pledged or paid to us in any manner whatsoever. Our receipt at any time of any kind of security, including cash, will not be a waiver of any of our rights or powers under any agreement between us. Upon our request, you will sign and deliver to us, any security, control or other agreements and documents as we determine are necessary or desirable (in our sole opinion) to grant us or perfect our security interest in the Collateral. At the time any Obligation becomes due and payable, we may apply or dispose of any and all Collateral, received or to be received, at any time or place, for any price and upon terms and conditions as we determine. We may apply the amounts on deposit or net proceeds of the sale or other disposition (together with any sums credited by or due from us to you), to the payment of the Obligations, all without prejudice to our rights with respect to any portion of the Obligations which remain unpaid. You expressly waive any right to require us to make any presentment or demand, or give any notices of any kind, including, but not limited to, any notice of nonpayment or nonperformance, protest, notice of protest, notice of dishonor, notice of intent to accelerate or notice of acceleration. If we are required by Applicable Law to give you reasonable notice before the sale or other disposition of Collateral, that requirement is met if notice is given at least 5 calendar days before the date any sale, application or other disposition will be made. Our rights and remedies under any agreements between us or instruments signed by you in our favor are in addition to, and not exclusive of, any other rights or remedies we have under Applicable Law. 8.Fraud prevention. Enrollment in one of our Positive Pay Services is required for enrollment in this Service. You acknowledge there is a growing risk of losses resulting from unauthorized Items. You recognize that Controlled Disbursement Service customers are especially susceptible to losses from unauthorized checks. You are aware that we offer an additional service known as "Payee Validation," which is an effective means of controlling risk from counterfeit checks, altered checks and certain other types of fraudulent checks. We have advised you that if you do not enroll in and properly use our Payee Validation Service, we will be unable to prevent losses from counterfeit, altered and certain other types of fraudulent checks and you will be treated as having assumed the risk of these losses. Item 2B-355 Page 12 of 25 Check Disbursements and Fraud Prevention Services Service Description 9.Liability and indemnification. In addition to the liability and indemnification provisions in the Master Agreement, we will not be liable for any Losses paid, suffered or incurred by you, and you will indemnify us from and hold us harmless against any Losses that we suffer or incur, arising directly or indirectly and relating to: a.Your performance or failure to perform your obligations in accordance with this Service Description, b.Us acting on any information you provide us in any Service Documentation or otherwise, c.If we return any Check unpaid because you have not deposited good and collected funds in the Funding Account related to the Disbursement Account on which a Debit is drawn sufficient to cover the Total Net Presentment, d.Our dishonor and return of any Debit unpaid if you issue the Debit before we notify you the Disbursement Account on which it was drawn is operational, e.Our nonpayment of a Debit, unless the nonpayment results directly and proximately from our gross negligence or willful misconduct, f.If any Debit fails which has not been tested and approved by us to satisfy our check specifications, our late return of that Debit and any presentment-related problem resulting from the failure of that Debit, g.Except as otherwise provided in the Positive Pay, Reverse Positive Pay, ARP, Payable-Through Draft or Third-Party Draft Service Descriptions, if we provide you with one or more of these Services, our payment of any Check or Draft for which there is an alteration in serial number or amount, is counterfeit, bears a forged or unauthorized signature, or is otherwise not validly issued, or h.The exercise of our rights or the performance of our obligations in accordance with this Service Description or the Positive Pay, Reverse Positive Pay, ARP, Payable-Through Draft or Third-Party Draft Service Descriptions, if we provide you with one or more of these Services. 10.Termination. In addition to our right to terminate this Service under the Master Agreement, we may terminate this Service and close the Funding Account and Disbursement Account immediately upon sending you written or oral notice (confirmed in writing) of such action if: a.You fail at any time to fund the Funding Account as required in this Service Description, b.A lawsuit or other proceeding is commenced by any federal or state agency alleging, or we receive an opinion of counsel, that this Service or any material term or condition of this Service Description violates any law or regulation, or c.You default in your obligations under the other Service Documentation or under any other agreement or instrument signed by you in our favor including without limitation any loan agreement or promissory note. Upon termination of this Service, you will, in accordance with our instructions, stop issuing Debits on the Disbursement Accounts, and we will close the Disbursement Accounts and stop processing Debits. You will continue to be liable for all Debits issued on the Disbursement Accounts prior to termination and for all Debits we are obligated to pay. 11.Survival. Sections 2 and 5 – 9 will survive the termination of this Service. Item 2B-356 Page 13 of 25 Check Disbursements and Fraud Prevention Services Service Description Specialized Disbursements Services Centralized Disbursements Manager Service 1.Your relationship to clients. You have represented to us that you function as claims administrator, property manager, or accounts payable administrator with respect to your clients (each individually a "Client" and collectively, "Clients"), who may be (i) insurance companies or business organizations maintaining a program of self-insurance, (ii) owners of commercial real property, or (iii) other business organizations with a need for administrative services related to accounts payable and other disbursements. The services you provide to your Clients may include (without limitation) evaluation, resolution, and/or payment of claims or other types of accounts payable on behalf of your Clients, facilitating the funding of payments related to claims or other accounts payable, and reconciliation and reporting with regard to the payment process. 2.Centralized Disbursements Manager ("CDM") desktop. You will interact with our electronic system for operating the Service through our "CDM Desktop" function, which you will access through the applicable treasury management services internet portal maintained by us. 3.Account structure. To facilitate your disbursement and payment funding activities on behalf of your Clients, you will establish and maintain with us, in your name and taxpayer identification number: (i) a zero-balance controlled disbursement account against which all checks you issue on behalf of your Clients will be drawn ("Disbursement Account"), (ii) a master account linked to the Disbursement Account for the purpose of funding payment of items presented against the Disbursement Account ("Master Funding Account"), (iii) at your option, one or more accounts linked to the Master Funding Account and associated with an individual Client for the purpose of funding disbursements for the benefit of such Client (each an "Individual Client Funding Account"), (iv) an account against which exception items that you instruct us to pay are to be temporarily posted ("Default Account"), and (v) one or more accounts to serve as recovery, refund or adjustment-related transactional accounts; alternative funding sources for payment of checks when the appropriate Individual Client Funding Account lacks adequate funds; or for electronic payment settlement (each, a "Recovery Account"). 4.Accounts for the benefit of individual clients. At your option, you may open one or more Individual Client Funding Accounts in your name, each for the benefit of an individual Client, in a way that permits the Client's taxpayer identification number to be associated with the Account for tax reporting or other purposes. This type of Individual Client Funding Account is referred to herein as a "Beneficial Owner Account", and may be used for the broader purposes of receiving, holding, managing and/or disbursing Client funds. Beneficial Owner Accounts must be non-interest-bearing. For each Beneficial Owner Account that you open, you represent and warrant to us that you have valid and proper authorization from the applicable Client to open the Account for the benefit of such Client, and to receive, hold, manage and/or disburse funds in such Account. In no event will any Client be considered a party to, or a third party beneficiary of, this Service Description or the Master Agreement. 5.Client profiles. For each Client for which you make disbursements, you will establish and maintain through the CDM Desktop an electronic client profile (each a "Client Profile"). As part of each Client Profile, you will assign the applicable Client a unique alpha/numeric identifier (a "Client ID") no more than ten characters in length. We will electronically associate each Client ID with an Individual Client Funding Account to facilitate funding of disbursements from the proper funding source. Item 2B-357 Page 14 of 25 Check Disbursements and Fraud Prevention Services Service Description 6.Client set-up forms. For each Individual Client Funding Account you open under the Service (including each Beneficial Owner Account), you will, prior to opening the Account, deliver to us a form (each a "Client Set-up Form") in a format approved by us, containing information about the Client for whose benefit Company is opening the Account, including, without limitation, the Client's name, physical address (including zip code, and country, if other than the United States), taxpayer identification number, and business type. If we determine at any time that we do not have a Client Set-up Form for a particular Account, you will upon our request promptly cause such a form to be prepared and forwarded to us. 7.Delivery of W-9 or W-8 forms. For each Individual Client Funding Account you open under the Service, you will, prior to opening the Account, deliver to us an original Internal Revenue Service Form W-9, "Request for Taxpayer Identification Number and Certification" (each a "W-9 Form") or Form W-8BEN, "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding" or other appropriate W-8 series form (each a "W-8 Form"), properly completed and executed by (i) the Client for whose benefit you are opening the Account, or (ii) if the Client lacks legal capacity to execute the W-9 Form or W-8 Form, by an individual whom the appropriate taxing authority and applicable law recognizes as being authorized to execute a W-9 Form or W-8 Form on the Client's behalf (an "Authorized Representative"). You represent and warrant that each W-9 Form or W-8 Form which you deliver to us in relation to an Account has been duly and lawfully executed by the Client for whose benefit the Account is opened or an Authorized Representative of such Client. If we determine at any time that we do not have a W-9 Form or W-8 Form for a particular Client, you will upon our request promptly cause such a form to be prepared and forwarded to us. 8.Disbursements by check; use of Positive Pay. All checks you issue in payment of claims or other obligations on behalf of your Clients ("CDM Checks") must be drawn on the Disbursement Account, which will be a controlled disbursement account governed by our standard Controlled Disbursement Service Description. You may not draw checks, or authorize the drawing or presentment of checks, drafts or other instruments against any of the Accounts other than the Disbursement Account or the Recovery Accounts. You must at all times use our Positive Pay Service in connection with the Disbursement Account. Your use of our Positive Pay Service will be governed by our Positive Pay Service Description and other documentation in effect from time to time with respect to that Service. 9.CDM check issuance; Issue Files. You must identify and describe each CDM Check you issue in an electronic issue file (each an "Issue File"), which you must transmit to us in connection with the CDM's Check issuance. You must create and transmit each Issue File to us in compliance with our published standards for creation and transmission of issue files for use with the Service. You must include in each entry for a CDM Check listed in a particular Issue File (each an "Issue Record") the appropriate Client ID for the Client on whose behalf you issued the CDM Check. You agree that you will not mail, transmit, send, deliver or otherwise issue or distribute any CDM Check until you have properly transmitted to us an Issue File containing the corresponding Issue Record for that check. We will compile the information in each Issue File and incorporate that information in our cumulative CDM data base of issued and outstanding CDM Checks (the "Issue File Data Base"). Item 2B-358 Page 15 of 25 Check Disbursements and Fraud Prevention Services Service Description 10.Presentment and payment of CDM checks. Upon presentment of a check against the Disbursement Account, we will, as part of our Positive Pay Service, compare certain data fields on such item with certain information in the Issue File Data Base. If we identify the item as a CDM Check that matches a corresponding Issue Record in the Issue File Data Base (a "Matching Check"), we will ascertain the Client ID accompanying the Issue Record. To the extent that the Individual Client Funding Account associated with the Client ID contains sufficient collected and available funds to pay all Matching Checks presented on the same Business Day which are associated with the same Client ID, we will pay all such Matching Checks. We will cause the applicable Individual Client Funding Account to be debited, with the resulting credit made to the Master Funding Account. To the extent that the Individual Client Funding Account associated with the Client ID does not contain sufficient collected and available funds to pay all Matching Checks associated with such Client ID which are presented on the same Business Day, we may, in our sole discretion (i) return all such Matching Checks unpaid, unless specific alternative funding arrangements have been made between you and us in advance, or (ii) pay such Matching Checks and cause the applicable Individual Client Funding Account to be overdrawn in the amount of the shortfall. Any overdraft on an Individual Client Funding Account is immediately due and payable from you to us. 11.Default Account. If, after comparison with the Issue File Data Base, a presented item cannot be associated with an Issue Record, but you nevertheless instructs us to pay the item, we will cause the item to be posted to the Default Account. For each item posted to the Default Account that causes the Default Account to become overdrawn, you will promptly provide us with instructions via CDM Desktop or in the form of an Issue Record incorporated in an Issue File, to repost the item to an Individual Client Funding Account. 12.Minimum balance requirement for Recovery Accounts. You must at all times maintain in one or more Recovery Accounts an aggregate balance of collected and available funds which equals or exceeds the aggregate amount of negative balances, if any, maintained in Individual Client Funding Accounts and the Default Account. Any positive balances maintained in any Individual Client Funding Accounts and/or the Default Account are expressly excluded from this calculation. We may return unpaid any CDM Checks presented for payment against the Disbursement Account during any period in which you fail to maintain the balance requirement set forth in this section 12. We may at any time, in our sole discretion, set off some or all of the balances in the Recovery Accounts against any negative balances in any Individual Client Funding Accounts or the Default Account. 13.Funding basis. Each Issue File, as it pertains to each Client on whose behalf you issue CDM Checks, will be funded on either an "Issue Funding" basis or a "Presentment Funding" basis. You must identify the funding basis for each Client as part of the Client Profile for such Client. Once the funding basis for a particular Client has been established, you agree that it will not be changed without our written consent. a.Issue Funding Basis. If you are funding the Issue File for a particular Client on an Issue Funding basis, then the funding of the corresponding Individual Client Funding Account is determined with reference to our receipt of each Issue File from you that pertains to the Client. b.Presentment Funding Basis. If you are funding the Issue File for a particular Client on a Presentment Funding basis, then the funding of the corresponding Individual Client Funding Account is determined with reference to presentment against the Disbursement Account of items related to the Client. 14.Funding method. You will fund each Individual Client Funding Account by using one of the funding methods set forth in this section 14. The process of funding by any of these funding methods will be governed by the Master Agreement, this Service Description and other Service Documentation. YOU WILL NOT, AT ANY TIME OR UNDER ANY CIRCUMSTANCES, FUND OR PERMIT FUNDING OF ANY INDIVIDUAL CLIENT FUNDING ACCOUNT, IN WHOLE OR IN PART, BY MEANS OF A CASH DEPOSIT OR A DEPOSIT MADE BY A THIRD PARTY. Each Client Debit account must be owned by your Client. As used in this section 14, the term "Funding Day" has the meaning given to it in section 15. Item 2B-359 Page 16 of 25 Check Disbursements and Fraud Prevention Services Service Description a.ACH Debit Entries. You may use ACH debit entries to debit the account of the corresponding Client with us or at another financial institution ("Debit Account"). If you use this funding method, then prior to sending an Issue File for a particular Client, you will ensure that the corresponding Client Profile contains adequate information about that Client's Debit Account to enable us to generate an ACH debit entry from the Debit Account. Provided that we have adequate information about the Debit Account, we will transmit an ACH debit entry file to the designated receiving depository financial institution through the applicable clearing house channel on the same day that (i) we receive an Issue File for a particular Client, if you are using an Issue Funding Basis for the Client, or (ii) one or more items related to the Client are presented against the Disbursement Account, if you are using a Presentment Funding Basis for the Client. However, if that day is not a Funding Day, then the debit entry file will be created and transmitted on the next Funding Day. You authorize us to create and transmit each such debit entry file, and represent and warrant to us that each debit entry created using information you provide to us in a Client Profile and/or an Issue File is properly authorized by the owner of the account to be debited. Funds in the amount of an ACH debit entry must be received in the applicable Individual Client Funding Account on the Business Day following our transmission of the file containing such ACH debit entry. b.ACH credit entries. You may use ACH credit entries to transfer funds to an Individual Client Funding Account from an account of the applicable Client with us or another financial institution. Provided that we have adequate address information about the Client on whose behalf the Individual Client Funding Account is maintained, we will transmit an automatic ACH credit entry funding notice, by e-mail and/or fax at your option, to you and the Client on the same day that (i) we receive an Issue File for the Client, if you are using an Issue Funding Basis for the Client, or (ii) one or more items related to the Client are presented against the Disbursement Account, if you are using a Presentment Funding Basis for the Client. However, if that day is not a Funding Day, then the funding notice will be transmitted on the next Funding Day. Funds in the amount specified in a funding notice must be received in the applicable Individual Client Funding Account on the Business Day following our transmission of the funding notice. c.Wire credit transfers. You may use wire credit transfers to transfer of funds to an Individual Client Funding Account from an account of the applicable Client with us or another financial institution. Provided that we have adequate address information about the Client on whose behalf the Individual Client Funding Account is maintained, Bank will transmit an automatic wire credit transfer funding notice, by e-mail and/or fax at your option, to Company and the Client on the same day that (i) we receive an Issue File for the Client, if you are using an Issue Funding Basis for the Client, or (ii) one or more items related to the Client are presented against the Disbursement Account, if you are using a Presentment Funding Basis for the Client. However, if that day is not a Funding Day, then the funding notice will be transmitted on the next Funding Day. Funds in the amount specified in a funding notice must be received in the applicable Individual Client Funding Account on the same day we transmit the funding notice. d.Drawdown wires. You may use drawdown wires to debit the Debit Account. If you use this funding method, prior to sending an Issue File for a particular Client, you will ensure that the corresponding Client Profile contains adequate information about that Client's Debit Account to enable us to generate a drawdown wire from the Debit Account. Provided that we have adequate information about the Debit Account, we will cause a drawdown wire to be automatically initiated and transmitted to the designated depository financial institution through the applicable channel on the same day that (i) we receive an Issue File for a particular Client, if you are using an Issue Funding Basis for the Client, or (ii) one or more items related to the Client are presented against the Disbursement Account, if you are using a Presentment Funding Basis for the Client. However, if such day is not a Funding Day, then the drawdown wire will be initiated on the next Funding Day. You authorize us to create and transmit each drawdown wire, and represent and warrant to us that each drawdown wire created using information you provide to us in a Client Profile and/or an Issue File is properly authorized by the owner of the account to be debited. Funds in the amount of the drawdown wire must be received in the applicable Individual Client Funding Account on the same day we initiate the drawdown wire. Item 2B-360 Page 17 of 25 Check Disbursements and Fraud Prevention Services Service Description e.Internal book transfers. You may use internal book transfers to debit the Debit Account, so long as the Debit Account is maintained with us. If you use this funding method, then prior to sending an Issue File for a particular Client, you will ensure that the corresponding Client Profile contains adequate information about such Client's Debit Account to enable us to generate an internal book transfer from the Debit Account. Provided that we have adequate information about the Debit Account, we will cause an internal book transfer to be initiated from the Debit Account on the same day that (i) we receive an Issue File for a particular Client, if you are using an Issue Funding Basis for the Client, or (ii) one or more items related to the Client are presented against the Disbursement Account, if Company is using a Presentment Funding Basis for the Client. However, that if that day is not a Funding Day, then the internal book transfer will be initiated on the next Funding Day. You authorize us to initiate and execute each such internal book transfer, and represent and warrant to us that each internal book transfer initiated using information you provide to us in a Client Profile and/or an Issue File is properly authorized by the owner of the account to be debited. Funds in the amount of the internal book transfer must be received in the applicable Individual Client Funding Account on the same day we initiate the internal book transfer. 15.Funding Frequency. You will fund each Individual Client Funding Account according to one of the funding frequency options set forth in this section 15. Each day on which funding is to occur under a particular funding frequency option is hereinafter referred to as a "Funding Day." a.Daily funding. Under the "Daily Funding Frequency Option", funding will occur (i) each day that we receive an Issue File for a particular Client, if you are using an Issue Funding Basis for the Client, or (ii) each day on which one or more items related to the Client are presented against the Disbursement Account, if you are using a Presentment Funding Basis for the Client. b.Weekly funding. Under the "Weekly Funding Frequency Option", funding will occur once a week, on the same day of the week as you select. c.Monthly funding. Under the "Monthly Funding Frequency Option", funding will occur one day each month, on either (i) the same numeric day of the month, or (ii) the first or last day of the month, as you select. d.Semi-monthly selected date funding. Under the "Semi-Monthly Funding Frequency Option", funding will occur twice each month, on the same two numeric days, as selected by you. e.P.A.L. funding. The "P.A.L. Funding Frequency Option" is only available for accounts you are funding on an Issue Funding Basis. Under this option, funding will occur each time an aggregate dollar amount of items accumulates within one or more Issue Files, with a dollar limit you specify. f.Threshold funding. The "Threshold Funding Frequency Option" is only available for accounts you are funding on a Presentment Funding Basis. Under this option, funding will occur each time an aggregate dollar amount of items is presented for payment in relation to a particular Client, with a dollar limit you specify. 16.Supplemental funding days. You may, at your option, establish one or more additional Funding Days that supplement the funding frequency options chosen for a particular Client under section 15 above. Each additional funding day may be designated as either a "Clean-up Date" or "End-of-Contract Date", depending on the purpose of the supplemental funding. Funding on each supplemental Funding Day will take place according to the Funding Basis and Funding Method previously selected for the applicable Client. 17.Right of setoff. In the event that any negative balance is maintained in an Individual Client Funding Account or the Default Account, whether created by action of you or us, we may at any time, and without prior notice to you, set off the amount of such negative balance against funds on deposit in any Recovery Account or any other deposit account you maintain with us; provided, however, that we may not set off against any other Individual Client Funding Account. Item 2B-361 Page 18 of 25 Check Disbursements and Fraud Prevention Services Service Description 18.Security interest in Recovery Accounts. As security for the Obligations, you grant us a security interest in and lien on the Recovery Accounts, and all amounts from time to time on deposit in, or withdrawable from, the Recovery Accounts (the "Collateral"). Our receipt at any time of any kind of security, including cash, will not be a waiver of any of our rights or powers under any agreement between us. Upon our request, you will sign and deliver to us, any security, control or other agreements and documents as we determine are necessary or desirable (in our sole opinion) to grant us or perfect our security interest in the Collateral. At the time any Obligation becomes due and payable, we may apply or dispose of any and all Collateral, received or to be received, at any time or place, for any price and upon terms and conditions as we determine. We may apply the amounts on deposit or net proceeds of the sale or other disposition (together with any sums credited by or due from us to you), to the payment of the Obligations, all without prejudice to our rights with respect to any portion of the Obligations which remain unpaid. You expressly waive any right to require us to make any presentment or demand, or give any notices of any kind, including, but not limited to, any notice of nonpayment or nonperformance, protest, notice of protest, notice of dishonor, notice of intent to accelerate or notice of acceleration. If we are required by Applicable Law to give you reasonable notice before the sale or other disposition of Collateral, that requirement is met if notice is given at least 5 calendar days before the date any sale, application or other disposition will be made. Our rights and remedies under any agreements between us or instruments signed by you in our favor are in addition to, and not exclusive of, any other rights or remedies we have under Applicable Law. 19.Account closure or debit block. We reserve the right to either close or place a debit block on any Individual Client Funding Account which, in our sole judgment, is subject to repeated overdrafts or overdrafts of an excessive amount, or in the event that the Client associated with such Account is subject to a bankruptcy proceeding or makes a general assignment for the benefit of creditors. 20.Business Associate Agreement. If you are an organization that performs any function or activity involving the use, transmission, or disclosure of individually identifiable health information, you and we must enter into a Business Associate Agreement (addressing certain requirements of Subtitle F of the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations) in form and substance satisfactory to us. 21.Compliance with Applicable Laws. You represent, warrant, and covenant to us that you will at all times comply with all Applicable Laws governing the receipt, holding, management and/or disbursement of funds in any Beneficial Owner Account. 22.Indemnification. You agree to indemnify, defend, and hold us harmless from and against any and all Losses which we suffer or incur as a result of or in connection with (i) your failure to have proper authorization to act on behalf of any Client, (ii) any Client Set-up Form or related information you provide to us which is incomplete or erroneous, and (iii) your failure to comply with Applicable Laws governing the receipt, holding, management and/or disbursement of funds for the benefit of Clients. 23.Ownership dispute. In the event that any Client asserts ownership rights to an Account held for the benefit of such Client, or any of the funds therein, then absent the mutual written consent of both you and the Client to dispose of the Account and related funds, we reserve the right, in its sole discretion, to suspend all activity on that Account and to interplead the funds into court. Item 2B-362 Page 19 of 25 Check Disbursements and Fraud Prevention Services Service Description 24.Termination. Unless terminated sooner in accordance with the terms of the Master Agreement or this Service Description, this Service Description and the Service will continue in effect until terminated by either party upon ninety (90) days prior written notice to the other party. We may terminate the Service following notice to you (i) if you breach any material provision of the Master Agreement or this Service Description and fail to cure the breach within fifteen (15) days after we give notice of the breach, or (ii) notwithstanding the foregoing, if you fail at any time to maintain the minimum balance in the Recovery Accounts required under section 12 of this Service Description. Termination of the Service will not affect your or our rights with respect to transactions which occurred before termination. 25.Survival. Sections 4, 10, 12, 14, 17- 19, 22- 24 will survive termination of the Services. Payable Through Draft Service 1.Description of Service. With this Service, we provide you with information about payable-through Drafts that are purportedly drawn on you and received by us so that you can determine if you will pay, edit or dishonor each Draft. 2.Requirements for Draft stock. You will ensure each Draft contains: a.The legend "PAYABLE THROUGH WELLS FARGO BANK, N.A."; and b.Our routing number on the MICR line of the Draft. You will also comply with all other requirements we communicate to you. You will not issue any Draft until we notify you that your Draft stock meets our specifications. 3.Electronic presentment. Each Business Day, we will present to you each Draft we receive before the Cutoff Time. We will electronically present you with a report or transmission ("Activity Report") containing the serial number and amount of each Draft available to you through your chosen information reporting service. No physical delivery of a Draft or of a substitute check or a purported substitute check in lieu of a Draft will occur. 4.Images of Drafts; identifying Unauthorized Drafts. We will make an electronic image of each Draft available to you through our CEO® portal. If for any reason we cannot make an electronic image of a Draft available to you, you remain solely responsible for determining whether a Draft described in each Activity Report is an Unauthorized Draft. 5.Funding. You will maintain immediately available funds in your Account sufficient to cover the full amount of Drafts you issue. We have no obligation to honor any Draft if you do not have immediately available funds in your Account sufficient to cover the full amount of the Draft. If an arbitrator or a court determines a Draft has been paid under circumstances that we incur any liablility for the Draft under Applicable Law or any agreement having the force of law, you will pay us on demand for the amount of the Draft. 6.Decisioning. You must notify us of any presented Draft that is to be edited (section 8 [Edits to Drafts]) or dishonored (section 9 [Drafts to be dishonored]) by the Cutoff Time on the next Business Day following the Business Day on which we made the Activity Report available to you ("Decision Deadline"). You will notify us through our CEO portal as set forth in the Reverse Positive Pay Service Description or, in the case of dishonor instructions only, through a means acceptable to us. If we do not receive your edit requests or dishonor instructions by the applicable Decision Deadline, you will be deemed to have instructed us to pay each Draft described in the Activity Report(s) for that Business Day, and you will be obligated to pay the amount of each Draft. Item 2B-363 Page 20 of 25 Check Disbursements and Fraud Prevention Services Service Description 7.Provisional payment of Drafts. Any payment or other settlement for a Draft, except a Draft cashed in accordance with section 10, will be provisional and subject to revocation by: a.You, if you direct us to dishonor a Draft before the applicable Decision Deadline, or b.Us at any time before midnight of the day we presented the Draft to you. 8.Edits to Drafts. You may request edits of the serial number and/or amount of any Draft described on the Activity Report(s) for any current Business Day. You will notify us of each edit request by means acceptable to us. We may deny your edit request based on our evaluation. 9.Drafts to be dishonored. a.General. We are subject to requirements regarding the return of Drafts under Applicable Law, including the requirement to provide notice of a dishonored Drafts. We may be liable for the amount of the Draft and other damages if we do not meet these requirements. You are solely responsible for dishonoring any Draft including any Unauthorized Draft. If you decide to dishonor any Draft we present to you, you will notify us prior to the Decision Deadline in accordance with the Reverse Positive Pay Service Description. b.Reimbursement obligation; revocation instructions. You will promptly reimburse us for any Losses we suffer or incur as a result of our dishonor of a Draft in accordance with your notice to us. Any payment or other settlement of a Draft will be provisional and can be revoked by: i.You, if you direct us to dishonor a Draft before the Decision Deadline, and ii.Us, at any time before midnight of the first Business Day after the day we presented the Draft to you. To be effective, we must receive your revocation instruction in a time and manner that gives us a reasonable opportunity to act on it before the payee deposits, cashes or otherwise negotiates the Draft. c.Fraud. If your reason for dishonoring a Draft is fraud, your return instruction alone will not constitute a claim for a fraudulent transaction. You must file a separate claim with us relating to the fraudulent transaction. 10.Draft Cashing. We offer a Draft Cashing Service (see our User Guide for more information). If you enroll in this Service, you waive any rights to dishonor or issue an edit request with respect to any Draft we cash at our teller line. 11.Liability and Indemnification. a.Indemnification. You will indemnify, defend, and hold us, and our Representatives harmless from and against all Losses arising out of or relating to: i.(1) our failure to identify an Unauthorized Draft, (2) our refusal to cash a Draft, (3) our failure to meet any requirement to which section 9 (Drafts to be dishonored) of this Service Description refers, (4) our payment of an Unauthorized Draft, or (5) our exercise of our rights, or our performance of our obligations, in accordance with this Service Description, ii.A breach of either the Image Quality Warranty or the No Double Debit Warranty (as defined below), iii.Our obligation to indemnify and reimburse a depository bank that accepts the original paper check from which an electronic check is created, if the loss is due to the check having already been paid, and iv.If we transfer or present an "electronically-created item" and receive settlement or other consideration for it, our obligation to indemnify and reimburse each transferee bank, any subsequent collecting bank, the paying bank, and any subsequent returning bank against Losses that result from the fact that: 1.The electronic image or electronic information of the electronically-created item is not derived from a paper check, 2.The person on whose account the electronically-created item is drawn did not authorize the issuance of the electronically-created item or to the payee stated on the item, and Item 2B-364 Page 21 of 25 Check Disbursements and Fraud Prevention Services Service Description 3.A person receives a transfer, presentment, or return of, or otherwise is charged for an electronically-created item in such a way that the person is asked to make payment based on an item or check it has paid. "Electronically-created item" means an electronic image that has all the attributes of an electronic check or electronic returned check but was created electronically and not derived from a paper check. "Image Quality Warranty" means our guarantee that the electronic image of the check accurately represents all of the information on the front of the check as of the time the original check is truncated, and the electronic information includes an accurate record of all MICR line information required for a substitute check and the amount of the check. "No Double Debit Warranty" means our guarantee that the warrantee will not receive a presentment of or otherwise be charged for an electronic check, an electronic returned check, the original check, a substitute check, or a paper or electronic representation of a paper substitute check, in a way that the warrantee will be asked to make payment on a check that it has already paid. When we transfer an electronic check for collection or payment, we make the Image Quality Warranty and the No Double Debit Warranty to the transferee bank, any subsequent collecting bank, the paying bank, and the drawer. When we transfer an electronic returned check for return, we make the Image Quality Warranty and the No Double Debit Warranty to the transferee returning bank, the depository bank, and the owner. For purposes of this section 11.a, the term "check" and "electronically created item" includes a Draft. b.Unauthorized Draft. With respect to each Draft, we: i.Will be deemed to be a collecting bank and not a drawee bank, and ii.Disclaim all liability applicable to a payor bank under the Transfer and Presentment Warranties in Articles 3 and 4 of the UCC. In the event any Draft paid by you is subsequently determined to be an Unauthorized Draft, we will take any action reasonably requested by you to enforce against prior parties (including prior collecting banks, endorsers and other holders) whatever rights you may have against those prior parties, but we will not be liable to you with respect to the Unauthorized Draft and will not be obligated to take any action with respect to the Unauthorized Draft unless you first indemnify us for all costs, expenses and liabilities, including reasonable attorneys' fees and legal expenses, which we may incur as a result of such action. c.Delayed Return. You are responsible to any party that incurs a loss in connection with a Draft, if: i.The loss is due to a delay in the return of the Draft, and ii.The delay is caused, in whole or in part, by any presentment-related problem resulting from: 1.The failure of any Draft to meet our draft specifications (section 2), or 2.Material appearing on the back of the Draft when it was issued by you including without limitation carbon blanks, blacked-out areas and printed or written text or numbers. 12.Survival. Sections 3, 4, 6, 9, 10, and 11 of this Service Description will survive termination of the Service. Third Party Drafts Service 1.Description of Service. You provide draft stock to your customers (each, a "third party") that issue third party drafts. With this Service, we will provide you with a controlled disbursement service for third party drafts. You will establish and maintain: a.One or more demand deposit accounts with us (each, a "Funding Account"), and b.One or more demand deposit accounts with us (each, a "Disbursement Account"), each of which is linked to a Funding Account and assigned to one of our controlled disbursement end points (each, an "End Point"). Item 2B-365 Page 22 of 25 Check Disbursements and Fraud Prevention Services Service Description 2.Requirements for Draft stock. You will ensure each Draft contains: a.The legend "PAYABLE THROUGH WFB, N.A."; and b.Our routing number on the MICR line of the Draft. You will also comply with all other requirements we communicate to you. You will not provide Draft stock to any third party until we notify you that your Draft stock meets our specifications. 3.Electronic presentment. Each Business Day, we will present to you each Draft we receive before the Cutoff Time. We will electronically present you with a report or transmission ("Activity Report") containing the serial number and amount of each Draft available to you through your chosen information reporting service. No physical delivery of a Draft or of a substitute check or a purported substitute check in lieu of a Draft will occur. 4.Images of Drafts; identifying Unauthorized Drafts. We will make an electronic image of each Draft available to you through our CEO® portal. If for any reason we cannot make an electronic image of a Draft available to you, you remain solely responsible for determining whether a Draft described in each Activity Report is an Unauthorized Draft. 5.Funding. You will maintain immediately available funds in your Account sufficient to cover the full amount of Drafts you issue. We have no obligation to honor any Draft if you do not have immediately available funds in your Account sufficient to cover the full amount of the Draft. If an arbitrator or a court determines a Draft has been paid under circumstances that we incur any liablility for the Draft under Applicable Law or any agreement having the force of law, you will pay us on demand for the amount of the Draft. 6.Decisioning. You must notify us of any presented Draft that is to be edited (section 8) or dishonored (section 9) by the Cutoff Time on the next Business Day following the Business Day on which we made the Activity Report available to you ("Decision Deadline"). You will notify us through our CEO portal as set forth in the Reverse Positive Pay Service Description or, in the case of dishonor instructions only, through a means acceptable to us. If we do not receive your edit requests or dishonor instructions by the applicable Decision Deadline, you will be deemed to have instructed us to pay each Draft described in the Activity Report(s) for that Business Day, and you will be obligated to pay the amount of each Draft that is not timely returned by us. 7.Provisional payment of Drafts. Any payment or other settlement for a Draft, except a Draft cashed in accordance with section 10 [Draft cashing], will be provisional and subject to revocation by: a.You, if you direct us to dishonor a Draft before the applicable Decision Deadline, or b.Us at any time before midnight of the day we presented the Draft to you. 8.Edits to Drafts. You may request edits of the serial number and/or amount of any Draft described on the Activity Report(s) for any current Business Day. You will notify us of each edit request by means acceptable to us. We may deny your edit request based on our evaluation. 9.Drafts to be dishonored. a.General. We are subject to requirements regarding the return of Drafts under Applicable Law, including the requirement to provide notice of a dishonored Draft. We may be liable for the amount of the Draft and other damages if we do not meet these requirements. You are solely responsible for dishonoring any Draft including any Unauthorized Draft. If you decide to dishonor any Draft we present to you, you will notify us prior to the Decision Deadline in accordance with the Reverse Positive Pay Service Description. Item 2B-366 Page 23 of 25 Check Disbursements and Fraud Prevention Services Service Description b.Reimbursement obligation; revocation instructions. You will promptly reimburse us for any Losses we suffer or incur as a result of our dishonor of a Draft in accordance with your notice to us. Any payment or other settlement of a Draft will be provisional and can be revoked by: i.You, if you direct us to dishonor a Draft before the Decision Deadline, and ii.Us at any time before midnight of the first Business Day after the day we presented the Draft to you. To be effective, we must receive your revocation instruction in a time and manner that gives us a reasonable opportunity to act on it before the payee deposits, cashes or otherwise negotiates the Draft. c.Fraud. If your reason for dishonoring a Draft is fraud, your return instruction alone will not consitute a claim for a fraudulent transaction. You must file a separate claim with us relating to the fraudlent transaction. 10.Draft cashing. We, or an affiliate, will not cash any Draft presented for encashment at our teller line, except at our own discretion. 11.Liability and indemnification. a.Indemnification. You will indemnify, defend, and hold us, and our Representatives harmless from and against all Losses arising out of or relating to: i.(1) our failure to identify an Unauthorized Draft, (2) our refusal to cash a Draft, (3) our failure to meet any requirement to which section 9 (Drafts to be dishonored) of this Service Description refers, (4) our payment of an Unauthorized Draft, or (5) our exercise of our rights, or our performance of our obligations, in accordance with this Service Description, ii.A breach of either the Image Quality Warranty or the No Double Debit Warranty (as defined below), iii.Our obligation to indemnify and reimburse a depository bank that accepts the original paper check from which an electronic check is created, if the loss is due to the check having already been paid, and iv.If we transfer or present an "electronically-created item" and receive settlement or other consideration for it, our obligation to indemnify and reimburse each transferee bank, any subsequent collecting bank, the paying bank, and any subsequent returning bank against Losses that result from the fact that: 1.The electronic image or electronic information of the electronically-created item is not derived from a paper check, 2.The person on whose account the electronically-created item is drawn did not authorize the issuance of the electronically-created item or to the payee stated on the item, and 3.A person receives a transfer, presentment, or return of, or otherwise is charged for an electronically-created item in such a way that the person is asked to make payment based on an item or check it has paid. "Electronically-created item" means an electronic image that has all the attributes of an electronic check or electronic returned check but was created electronically and not derived from a paper check. "Image Quality Warranty" means our guarantee that the electronic image of the check accurately represents all of the information on the front of the check as of the time the original check is truncated, and the electronic information includes an accurate record of all MICR line information required for a substitute check and the amount of the check. "No Double Debit Warranty" means our guarantee that the warrantee will not receive a presentment of or otherwise be charged for an electronic check, an electronic returned check, the original check, a substitute check, or a paper or electronic representation of a paper substitute check, in a way that the warrantee will be asked to make payment on a check that it has already paid. When we transfer an electronic check for collection or payment, we make the Image Quality Warranty and the No Double Debit Warranty to the transferee bank, any subsequent collecting bank, the paying Item 2B-367 Page 24 of 25 Check Disbursements and Fraud Prevention Services Service Description bank, and the drawer. When we transfer an electronic returned check for return, we make the Image Quality Warranty and the No Double Debit Warranty to the transferee returning bank, the depository bank, and the owner. For purposes of this section 11.a, the term "check" and "electronically created item" includes a Draft. b.Unauthorized Draft. With respect to each Draft, we: i.Will be deemed to be a collecting bank and not a drawee bank, and ii.Disclaim all liability applicable to a payor bank under the Transfer and Presentment Warranties in Articles 3 and 4 of the UCC. In the event any Draft paid by you is subsequently determined to be an Unauthorized Draft, we will take any action reasonably requested by you to enforce against prior parties (including prior collecting banks, endorsers and other holders) whatever rights you may have against those prior parties, but we will not be liable to you with respect to the Unauthorized Draft and will not be obligated to take any action with respect to the Unauthorized Draft unless you first indemnify us for all costs, expenses and liabilities, including reasonable attorneys' fees and legal expenses, which we may incur as a result of such action. c.Delayed return. You are responsible to any party that incurs a loss in connection with a Draft, if: i.The loss is due to a delay in the return of the Draft, and ii.The delay is caused, in whole or in part, by any presentment-related problem resulting from: 1.The failure of any Draft to meet our draft specifications (section 2), or 2.Material appearing on the back of the Draft when it was issued by you including without limitation carbon banks, blacked-out areas and printed or written text or numbers. 12.Anti-money laundering and sanctions controls. While this Service Description is in effect, you will: a.Be solely responsible for monitoring, interpreting and complying with all laws, regulations, judicial and administrative decisions, and executive orders that apply to you as a provider of accounts to your customers on which Drafts are issued, including the U.S. anti-money laundering and anti-terrorist financing ("AML") and sanctions laws and regulations; b.Maintain policies and procedures to reasonably ensure compliance with applicable provisions of the U.S. AML laws and regulations, including but not limited to the USA PATRIOT Act ("PATRIOT Act"), and regulations promulgated by the Office of Foreign Assets Control ("OFAC") of the United States Department of the Treasury; c.Where you qualify under section 314(b) of the PATRIOT Act, maintain an effective notice with FinCEN evidencing your intent to engage in information sharing pursuant to section 314(b) of the PATRIOT Act; d.If subject to the PATRIOT Act, maintain policies and procedures that include a risk assessment of its products and services, designate a Board-approved AML Compliance Officer responsible for overseeing the components of the AML Program, and include processes for training, monitoring of Drafts, recordkeeping and reporting; e.Provide copies of your policies, procedures and practices designed to comply with this section 12, as we may request from time to time; and (b) upon our request and sole expense, allow us, or our designee, to make such on-site visits to you as we deem necessary or appropriate to review your policies, procedures and practices designed to comply with this section 12; and f.Work with us in good faith to minimize the number of on-site visits and to limit the impact of the on-site visits on your business. 13.Survival. Sections 3, 4, 6, 9, 10 and 11 of this Service Description will survive termination of the Service. Item 2B-368 Page 25 of 25 Check Disbursements and Fraud Prevention Services Service Description Glossary Account Agreement means the applicable account agreement governing your Account. Applicable Law is defined in section 3 of the Master Agreement. Business Day means every day except Saturday, Sunday and federal holidays. When used in connection with funds transfer Services, "Business Day" means each day on we are open for business related to that Service. Check Issue Data means for any Check or Draft, the complete serial number and numeric amount. If you have elected the Payee Validation service option under the Positive Pay Service, Check Issue Data also includes the payee's name. Cutoff Time means our cutoff time each Business Day that we separately disclose to you for the Service. Decision Deadline means on any Business Day, (i) for the Positive Pay Service, the time we establish by which you must choose to pay or return each Exception Check, and (ii) for the Reverse Positive Pay Service, the time we establish by which you must choose to edit or return each Check on the Paid Items Report. Draft means each payable-through draft or third party draft we present to you in accordance with this Service Description and includes an Unauthorized Draft. Item has the meaning given in the Account Agreement. Losses means all liabilities, losses, damages, claims, obligations, demands, charges, costs, or expenses (including reasonable fees, disbursements of legal counsel and court fees). Master Agreement means the Master Agreement for Treasury Management Services. Matching Check is a Check presented to us that matches the Check Issue Data you have provided to us. Obligations means any and all advances, debts, loans, obligations and liabilities that you owe us and our affiliates pursuant to the terms of this Service Description, including any advances we make to the Funding Account pursuant to Section 3 of the Controlled Disbursements Service Description and any advances we make to the Disbursement Account pursuant to Section 4 of the Controlled Disbursements Service Description. Representatives is defined in section 11(f) of the Master Agreement. Unauthorized Draft means a counterfeit or altered Draft, a reproduction of a duly authorized Draft, a Draft with a forged or other unauthorized signature, or a forged, unauthorized, incorrect or illegible endorsement. Item 2B-369 Check Cashing Service Description Revised 06-17-2021 Check Cashing Service Description 1. Introduction. The Service Documentation contains the terms governing the Wells Fargo Bank, N.A. (“Bank”) check cashing service (“Service”) and includes: (a) this Service Description; (b) the Acceptance of Services or Treasury Management Product Enrollment form; (c) the Master Agreement for Treasury Management Services ("Master Agreement"); (d) the account agreement governing the account(s) Company uses in connection with the Service; and (e) User Guides which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices; This Service Description and the Master Agreement are posted at Bank’s Commercial Electronic Office®(CEO®) portal. If there is a conflict among the documents comprising the Service Documentation, they will govern in the order listed above. Company’s use of the Service confirms Company’s receipt of and agreement to be bound by the applicable Service Documentation. If an enhancement to the Service or other change requires a change to this Service Description, Bank will post an updated Service Description on the CEO ®portal. When required by applicable law, Bank will notify Company of the update. If Company continues to use the Service after the update takes effect, Company will be deemed to have agreed to the update. 2. Description of Bank’s Service. Bank’s Service enables Company to have Bank and Bank’s affiliates (each an “Affiliate” and unless otherwise specified, along with Bank, collectively “Bank”) cash checks drawn on Company’s accounts held at other banks. 2.1. Company’s Request to Cash Checks. Company requests Bank cash checks each of which: (a) has a face amount equal to or less than the amount separately agreed to by Company and Bank in the Setup Form for the Service (“Setup Form”); (b) purports to be drawn by Company on an account identified on the Setup Form for the Service (each an “Account” and collectively “Accounts”) at a drawee bank identified on the Setup Form (“Drawee”) (each such check a “Check”) whether actually issued by Company or not; and (c) is presented in person by the payee at an office of Bank. Item 2B-370 2 Check Cashing Service Description 2.2. Check Cashing Procedures.Company authorizes Bank to cash any Check that it does not have actual knowledge bears an unauthorized signature, contains a material alteration, or is otherwise not properly payable so long as Bank has followed its then current check cashing procedures in connection with the cashing of the Check. Bank reserves the right to require Company to consult with Bank with respect to any information concerning Bank that is printed on Company’s check stock. COMPANY UNDERSTANDS THIS SERVICE IS NOT AVAILABLE AT CERTAIN AFFILIATES OR BANK BRANCHES LOCATED IN CERTAIN STATES AS SEPARATELY DISCLOSED TO COMPANY. 3. Fees. Company agrees to pay Bank a periodic fee for the Service, which fee will be charged whether any Check is cashed during a period and may be changed by Bank from time to time upon prior written notification to Company, in accordance with the Service Documentation. In addition, a per-check check cashing fee may apply. Company agrees to inform its payees in writing that a per- check check cashing fee may apply. 4. Termination of Service. In addition to the termination provisions contained in the Master Agreement, Bank may immediately and without prior notice terminate the Service whenever it has any basis to believe that there will not be sufficient available funds in the Account to pay a Check when presented or, in its sole determination, there is an unacceptable risk of fraudulent activity. The provisions of this Service Description and the other Service Documentation will continue in effect with respect to all Checks cashed by Bank prior to termination of the Service. 5. Company’s Guarantee of Payment and Obligation of Reimbursement. 5.1. Guarantee of Check Payment. Company unconditionally guarantees payment of all Checks even though at the time any particular Check is presented for payment (a) the endorsement of the named payee is unauthorized; (b) the Check was not drawn, issued or authorized by Company; (c) the Drawee has received a valid stop payment order regarding the Check; (d) Company does not have sufficient funds in the Account to cover the Check; (e) the Account has been closed or the Drawee is prohibited from paying Checks drawn against the Account; or (f) the Drawee has knowledge that the Check bears an unauthorized signature, contains a material alteration, or is otherwise not properly payable. 5.2. Obligation of Reimbursement. If a Check is dishonored or if Bank is obligated to reimburse the Drawee or a collecting bank with respect to a Check, upon written demand accompanied by evidence of such dishonor or reimbursement, Company agrees to promptly reimburse Bank for all resulting loss. Company waives presentment and other notice of dishonor. In addition, Bank has the right to debit or chargeback any account of Company at Bank for any such loss. 6. Bank’s Limitation of Liability and Company’s Agreement to Indemnify Bank. Bank will have no liability including liability for any consequential, special, punitive or indirect loss or damage which Company, a payee, the Drawee, a collecting bank or any other person may incur or suffer in connection with a Check. Company will indemnify, defend, and save harmless Bank, and each of its directors, officers, employees, and agents (collectively in this section, “Indemnified Persons”) from and against all liabilities, losses, damages, claims, obligations, demands, charges, costs, or expenses (including reasonable fees and disbursements of legal counsel and accountants) (collectively, "Losses and Liabilities") awarded against or incurred or suffered by Indemnified Item 2B-371 3 Check Cashing Service Description Persons arising directly or indirectly from or related to the cashing of any Check by Bank in accordance with this Service Description and/or the breach of any material obligation of Company hereunder. Survival. Sections 4, 5 and 6 of this Service Description survive termination of the Service. © 2021Wells Fargo Bank, N.A. All rights reserved. Item 2B-372 © 2021 Wells Fargo Bank, N.A. All rights reserved. Stagecoach Sweep ® service description Treasury Management Services December, 2021 Item 2B-373 2 December, 2021 | Stagecoach Sweep Service Description Table of contents 3 Introduction 3 Services 3 Wells Fargo Stagecoach Sweep® Item 2B-374 3 December, 2021 | Stagecoach Sweep Service Description Introduction The Service Documentation contains the terms and conditions governing each service ("Service") that Wells Fargo Bank, N.A. ("Bank") provides to Customer under this Service Description. "Customer" is the Bank customer identified on the Acceptance of Services that is signed when Customer enrolls in the Service ("Acceptance"). The Service Documentation includes: a. The Service Description (which contains terms and conditions applicable to the specific Service), b. The Acceptance (which indicates Customer's acceptance of the Service Documentation), c.The Master Agreement for Treasury Management Services ("Master Agreement") (which contains terms and conditions applicable to all Services), d.The account agreement governing the account(s) (each, an "Account") Customer uses in connection with the Service, e.The Product Enrollment Form (which contains set-up information for each Service in which Customer is enrolling), and f.User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). This Service Description and the Master Agreement are posted at Bank's Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents comprising the Service Documentation, they will govern in the order listed above. Customer's use of the Service confirms Customer's receipt of and agreement to be bound by the applicable Service Documentation. If an enhancement to the Service or other change requires a change to this Service Description, Bank will post an updated Service Description on the CEO® portal. When required by applicable law, Bank will notify Customer of the update. If Customer continues to use the Service after the update takes effect, Customer will be deemed to have agreed to the update. Services Wells Fargo Stagecoach Sweep® 1.Description of services. The Service enables Customer to link each domestic demand deposit account Customer enrolls in the Service ("Account") to one of the options described in Section 3 (each, an "Investment Sweep Option"). Customer may also link Customer's Account to Customer's line of credit with Bank ("Credit Sweep Option"), as described in Section 5. At the end of each Business Day, funds are transferred automatically or "swept" from the Account in accordance with Customer's designation(s) in the Acceptance. The amount swept ("Transferable Balance") is the Collected Balance in the Account less the Target Collected Balance. The "Collected Balance" is the amount available for immediate withdrawal from the Account. The "Target Collected Balance" is the amount that Bank and Customer have agreed will be maintained in the Account. A "Business Day" is every day except Saturdays, Sundays, federal holidays and days when the New York Stock Exchange is closed. Customer may access its funds only through the Account(s) it has enrolled in the Service. Circumstances in which the entire Transferable Balance may not be invested are described in Section 4. Additional provisions pertaining to the Investment Sweep Options are set forth in Sections 6 through 10. 2.Authorization. Customer appoints Bank as its agent to act with respect to the Service and the Investment Sweep Option Customer has elected in the Acceptance. Item 2B-375 4 December, 2021 | Stagecoach Sweep Service Description 3.Investment Sweep Options. Bank offers the following Investment Sweep Options, each of which is subject to Section 4: a.Wells Fargo Stagecoach Sweep® Preferred Option.The Transferable Balance will be swept to an omnibus deposit account at Bank ("Preferred Option Account"). Funds belonging to multiple Bank customers are held in this omnibus deposit account. At the beginning of the next Business Day the entire amount held in Customer's Investment Sweep Option, less any earnings, will be swept back to the Account. b.Wells Fargo Stagecoach Sweep® Repurchase Agreement Option with secondary Wells Fargo Stagecoach Sweep® Preferred Option. The Transferable Balance will be swept to the Wells Fargo Stagecoach Sweep® Repurchase Agreement ("Repurchase Agreement") Option. Any portion of the Transferable Balance which is not swept to a Repurchase Agreement will be swept to the Preferred Option Account. At the beginning of the next Business Day the entire amount held in Customer's Investment Sweep Option, less any earnings, will be swept back to the Account. c.Wells Fargo Stagecoach Sweep® Repurchase Agreement Option.The Transferable Balance will be swept to the Wells Fargo Stagecoach Sweep® Repurchase Agreement ("Repurchase Agreement") Option. Any portion of the Transferable Balance not swept to a Repurchase Agreement will remain in the Account and not earn interest. At the beginning of the next Business Day the entire amount held in Customer's Investment Sweep Option, less any earnings, will be swept back to the Account. d.Wells Fargo Stagecoach Sweep®, Money Market Mutual Fund ("MMMF") Option.The Transferable Balance will be transferred to an omnibus deposit account at Bank. At the beginning of the next Business Day, the Transferable Balance will be transferred from the omnibus deposit account at Bank to an omnibus investment account in Bank's name at the custodian of the MMMF. MMMF shares belonging to multiple Bank customers are held in this investment account. Any portion of the Transferable Balance not swept to the MMMF will remain in the Account, and no dividends will accrue on it. If the Collected Balance in the Account on any Business Day is less than the Target Collected Balance, Bank will redeem a sufficient number of Customer's MMMF shares, as determined on the Business Day following the Business Day on which this shortfall occurs, to restore the Collected Balance to the Target Collected Balance. Purchases and redemptions of MMMF shares in connection with this Investment Sweep Option may occur only through deposits to or withdrawals from the Account. This option is available only to entities having a United States presence, as demonstrated by a U.S. mailing address in Bank's records for Customer. 4.Maximum Investment Amount; Transferable Balance not invested; earnings on Investment Sweep Option. a.Maximum Investment Amount.If Customer has designated a maximum amount for investment in Customer's Investment Sweep Option ("Maximum Investment Amount"), then the maximum amount invested for Customer on any given Business Day will equal the lesser of the Customer's Transferable Balance or Maximum Investment Amount. Any portion of Customer's Transferable Balance that is not invested pursuant to this Section 4a will remain in the Account and not earn interest. b.Transferable Balance not invested.Bank will exercise reasonable efforts to invest the entire Transferable Balance but reserves the right to invest less when Bank determines in its sole discretion that the entire Transferable Balance exceeds the amount Bank is able to invest for Customer in the ordinary course of business. Any Transferable Balance not invested pursuant to this Section 4b will be held in accordance with Customer's Investment Sweep Option. c.Earnings on Customer's Investment Sweep Option.Bank will handle any earnings on Customer's Investment Sweep Option in accordance with Customer's separate instructions to Bank. Item 2B-376 5 December, 2021 | Stagecoach Sweep Service Description 5.Credit Sweep Option. At the end of each Business Day, the Transferable Balance will first be applied to the outstanding balance on the line of credit specified by Customer in the Acceptance ("LOC"). Any remaining funds will then be deemed to be the Transferable Balance with respect to the Investment Sweep Option that Customer may have also selected. If the Collected Balance is less than the Target Collected Balance, funds will be advanced from the LOC and credited to the Account. The application of payments to and advances from the LOC are governed by the documents governing the LOC as amended or replaced from time to time (collectively, "Loan Documentation"). Bank may terminate the Credit Sweep Option immediately without notice to Customer if an event of default occurs under the Loan Documentation. 6.Provisions Applicable To Each Investment Sweep Option. NO EMPLOYEE OR AGENT OF BANK HAS BEEN AUTHORIZED TO PROVIDE ANY INFORMATION OR TO MAKE ANY REPRESENTATION REGARDING A SWEEP OPTION OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THE SERVICE DOCUMENTATION AND IF SUCH INFORMATION IS PROVIDED OR SUCH A REPRESENTATION IS MADE, IT MAY NOT BE RELIED UPON AS BEING AUTHORIZED BY BANK. 7.Additional Provisions Applicable to Wells Fargo Stagecoach Sweep® Preferred Option. a.Interest. Interest will accrue on Customer’s Transferable Balance in Bank's Preferred Option Account at a variable rate determined by Bank from time to time in its sole discretion. Accrued interest will be credited to the Account as agreed by Customer and Bank. If Customer has elected to be paid interest on a monthly basis, pending any such payment, interest on Customer’s accrued but unpaid interest will accrue and compound daily. For advance information about the interest rate on any given Business Day, Customer may contact its relationship manager at Bank. b.Statements.Bank will make a periodic statement available to Customer showing the Account balance for each day in, and the amount of interest earned for, the statement period. Additionally, Customer may elect to receive a daily confirmation showing the Account balance and the amount of interest earned for the preceding day. c. Bank fees. Bank reserves the right to assess a monthly deposit balance fee and a monthly recoupment fee on Customer’s average daily Transferable Balance during the statement period. These fees are in addition to Bank’s monthly maintenance fee. When Bank assesses the deposit balance fee or the recoupment fee, the amount of each fee will appear on the client analysis statement for Customer’s account(s). For more information on the deposit balance fee and the recoupment fee, see Bank’s Commercial Account Agreement. Bank reserves the right to change these fees at any time without notice. 8.Additional Provisions Applicable to Wells Fargo Stagecoach Sweep® Repurchase Agreement Option. INVESTMENTS IN REPURCHASE AGREEMENTS ARE NOT DEPOSITS, ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION AND ARE NOT GUARANTEED BY THE UNITED STATES GOVERNMENT OR ANY AGENCY OF IT, OR BY BANK, NOR IS BANK'S OBLIGATION TO REPURCHASE CUSTOMER'S FRACTIONAL INTEREST IN ANY SECURITIES ACQUIRED UNDER REPURCHASE AGREEMENTS. THE REPO SECURITIES MAY OR MAY NOT BE GUARANTEED BY THE UNITED STATES GOVERNMENT BUT ANY SUCH GUARANTY DOES NOT FLOW TO CUSTOMER. ALL SECURITIES CARRY INVESTMENT RISK AND MAY LOSE VALUE. Item 2B-377 6 December, 2021 | Stagecoach Sweep Service Description THE RATE OF RETURN ON THE REPURCHASE AGREEMENT INVESTMENT IS NOT THE SAME AS THE RATE OF RETURN ON THE UNDERLYING GOVERNMENT SECURITIES. GENERAL BANKING ASSETS MAY BE USED TO SATISFY BANK'S REPURCHASE OBLIGATIONS TO CUSTOMER. a.Purchases and sales. Subject to the limitations described in Section 8b, on each Business Day on which there is a Transferable Balance Bank will sell to Customer an interest ("Fractional Interest") in a pool of securities used by Bank as repurchase agreement collateral ("Repo Securities"), which will be described in a written confirmation to Customer (see Section 8g.). Each sale by Bank to Customer is a "Transaction". Subject to Section 8b regarding purchase increments, the price of Customer's Fractional Interest ("Purchase Price") will equal the Transferable Balance. The Fractional Interest equals a fraction having the Transferable Balance as its numerator and the market value of the Repo Securities owned by Bank on the purchase date as its denominator. At the beginning of the first Business Day following the sale to Customer of a Fractional Interest, Bank will repurchase that Fractional Interest from Customer at (a) the Purchase Price thereof, regardless of any fluctuation in the market value of the Repo Securities, payable immediately, plus (b) a rate of return equal to 1/360 of the Pricing Rate, payable at the time agreed by Customer and Bank. The "Pricing Rate" is a variable rate determined by Bank from time to time in its sole discretion and will be reflected in the confirmation sent to Customer. For advance information regarding the Pricing Rate on any given Business Day, Customer may contact its relationship manager at Bank. The Service will be governed by all applicable federal and state laws and regulations, including without limitation any requirements applicable to "public funds". Customer represents and warrants to Bank that Customer (i) is authorized pursuant to its governing documents and applicable law to enter into repurchase agreements; (ii) is authorized pursuant to its governing documents and applicable law to invest in the type of securities designated by Bank in connection with Customer's repurchase agreement transactions; and (iii) has obtained all necessary approvals required by its governing documents and applicable law, including but not limited to resolutions of Customer's governing body to enroll in this Repurchase Agreement option. b.Purchase increments.To avoid odd lot purchases of Repo Securities, Bank may require that Transferable Balances be used to purchase Customer's Fractional Interest in increments of $100 (with any unused Transferable Balance remaining in the Account). c.Holding of securities.On the date that Bank repurchases Customer's Fractional Interest, any Repo Securities designated to Customer as collateral will be released to Bank's account. Bank acts as Customer's agent and in the event of default (i.e., Bank failure), Customer has the right to direct Bank to sell the Repo Securities and apply the proceeds in satisfaction of Bank's obligations to Customer under this Repurchase Agreement Option. d.Right of substitution.Bank will not have any right of substitution with respect to the Repo Securities. e.Margin.Because all repurchase transactions under the Investment Sweep Option are overnight securities transactions backed by the federal government or federal agency securities in which Bank has an interest, Bank will not be required to maintain margin (instead, Customer will have the security interest described in Section 10b). In addition, because Customer will purchase its Fractional Interest from Bank using the Transferable Balance, and only if a Transferable Balance is available on any given Business Day to execute such transaction, Customer will not be required to maintain margin. Item 2B-378 7 December, 2021 | Stagecoach Sweep Service Description f.Pledge of securities.Although the Repo Securities may be guaranteed as to principal and interest by the federal government or by the issuing federal agency, any such guarantee runs only to Bank by virtue of its direct ownership of the Repo Securities and does not extend to Customer as a Fractional Interest holder. To collateralize Bank's repurchase obligation, a security interest in certain Repo Securities is transferred to Customer. This security interest is described in Section 10b. In addition, the market value of the Repo Securities may fluctuate rendering liquidation insufficient to fulfill the Bank's entire obligation to Customer in a default situation. If the liquidation value of the Repo Securities is insufficient for full reimbursement, or if another creditor successfully claims rights to the securities, then Customer will have to look to other assets of Bank as an unsecured general creditor for repayment of any uncovered portion of the repurchase obligation. g.Confirmations and statements.Bank will make a daily confirmation available to Customer showing Customer's principal sweep amount, purchase date, repurchase date, Fractional Interest, market price and the CUSIP number(s) of the Repo Securities, and accrued rate of return credited for the preceding Business Day. The confirmation, together with the Service Documentation, will constitute conclusive evidence of the terms agreed between Customer and Bank with respect to the transaction to which the confirmation relates, unless with respect to the confirmation specific objection is made promptly after receipt thereof. In the event of a conflict between a term of the confirmation and the Service Documentation, the confirmation will control. Bank will also make a periodic statement available to Customer showing the Account balance for each day in, and the amount of interest earned for, the statement period. h.Additional disclosures. i.Customer and Bank recognize that each Transaction is a "repurchase agreement" as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a "securities contract" as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). ii.It is understood that either party’s right to liquidate Repo Securities held for in connection with Transactions hereunder or to exercise any other remedies hereunder is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended iii.Customer and Bank agree and acknowledge that if a party hereto is an "insured depository institution," as such term is defined in the Federal Deposit Insurance Act, as amended ("FDIA"), then each Transaction hereunder is a "qualified financial contract," as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). iv.In the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission ("SEC") under Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 ("SIPA") do not protect the other party with respect to any Transaction hereunder. v.In the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder. vi.In the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable. 9.Additional provisions applicable to Wells Fargo Stagecoach Sweep® Money Market Mutual Fund Option. MONEY MARKET MUTUAL FUNDS (EACH, A "MMMF") ARE NOT FDIC INSURED, HAVE NO BANK GUARANTY AND MAY LOSE VALUE. Item 2B-379 8 December, 2021 | Stagecoach Sweep Service Description AN INVESTMENT IN A MMMF IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH MMMFS SEEK TO PRESERVE THE VALUE OF CUSTOMER'S INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN A MMMF. FOR MORE INFORMATION REGARDING ALLSPRING FUNDS INCLUDING THE MMMF OPTION CUSTOMER SELECTED, OBTAIN A CURRENT PROSPECTUS BY CALLING 1-800-260-5969, OR BY VISITING www.allspringglobal.com. CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF THE INVESTMENT CAREFULLY BEFORE INVESTING. THIS AND OTHER INFORMATION ABOUT ALLSPRING FUNDS CAN BE FOUND IN A CURRENT PROSPECTUS. PLEASE READ IT CAREFULLY BEFORE INVESTING. ALLSPRING FUNDS MANAGEMENT, LLC, A WHOLLY OWNED SUBSIDIARY OF ALLSPRING GLOBAL INVESTMENTS HOLDINGS, LLC (“ALLSPRING GLOBAL”), PROVIDES INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES FOR THE ALLSPRING FUNDS. OTHER SUBSIDIARIES OF ALLSPRING GLOBAL PROVIDE SUB-ADVISORY AND OTHER SERVICES FOR THE FUNDS. THE FUNDS ARE DISTRIBUTED BY ALLSPRING FUNDS DISTRIBUTOR, LLC, MEMBER FINRA/SIPC, A SUBSIDIARY OF ALLSPRING GLOBAL. a.General.If Customer has elected the MMMF Investment Sweep Option, then it acknowledges receiving a copy of the prospectus relating to MMMF shares that will be purchased using this Investment Sweep Option. This prospectus forms part of the Service Documentation and will control over the other Service Documentation with respect to the MMMF shares. b.Purchase of shares.Bank will transfer funds to purchase shares of the MMMF at their net asset value ("NAV") as determined on the Business Day following the transfer of Customer's Transferable Balance to the omnibus deposit account at Bank. Customer's shares of the MMMF ("Investment Balance") will be held in Bank's name, as agent on behalf of all of its customers invested in the MMMF, in an omnibus investment account at the custodian for the MMMF. Customer's funds held in the omnibus deposit account at Bank are eligible for FDIC insurance; Customer's Investment Balance is not FDIC insured. c.Statements.Bank will make a periodic statement available to Customer showing the Investment Balance and Customer's purchases and redemptions of MMMF shares during the statement period. Customer may also telephone Bank at its customer service number (1-800-289-3557) to determine the Investment Balance as of the close of the previous Business Day. d.Customer's investment in the MMMF shares will be credited by Bank to the Account within three Business Days from Bank's (i) receipt of a notice from Customer to Bank terminating the Service or (ii) suspension of the Service, on the closing price of the Business Day on which Customer's MMMF shares are sold. Accrued dividends attributable to the period when the Investment Sweep Option was in effect will be paid no later than the fifth Business Day of the month following the last month that the Investment Sweep Option was in effect. Termination, suspension of Service. e.Shareholder communications.All shareholder communications with respect to the MMMF will be forwarded to Customer's current address as shown on Bank's records. f.Daily dividend accruals are based on the Investment Balance at the end of each day. If Customer's Account is credited for a MMMF redemption on a day preceding a non-Business Day, the redemption amount will be subtracted from the Investment Balance before the non-Business Day dividend accruals are calculated. Dividend accruals. 10. FDIC regulations require all insured depository institutions to disclose in writing to sweep account customers whether funds in a sweep account are deposits within the meaning of 12 U.S.C. 1813(l) and, if the funds are not deposits, the status such funds would have if the depository institution failed. FDIC disclosures. Item 2B-380 9 December, 2021 | Stagecoach Sweep Service Description a.Funds held on Customer's behalf in Bank's Preferred Option Account are deposits and are eligible for FDIC insurance under applicable FDIC insurance rules and limits. Wells Fargo Stagecoach Sweep® Preferred Option. b.Wells Fargo Stagecoach Sweep® Repurchase Agreement Option.Customer's Fractional Interest is not a deposit. The Repurchase Agreement Option meets the FDIC's requirements for a properly executed repurchase agreement. If Bank were to fail, Customer's funds used to purchase Customer's Fractional Interest would not be eligible for FDIC insurance. The FDIC would treat Customer as a secured creditor to the extent of the then-current value of Customer's Fractional Interest and as an unsecured general creditor to the extent the Purchase Price exceeded the then-current value of Customer's Fractional Interest. c.Funds held on Customer’s behalf in the omnibus deposit account are deposits and are eligible for FDIC insurance under applicable FDIC insurance rules and limits. Customer’s MMMF shares held in the omnibus investment account at the custodian of the MMMF are not deposits and will not be eligible for FDIC insurance. Customer is the owner of its MMMF shares. Wells Fargo Stagecoach Sweep® Money Market Mutual Fund Option. Item 2B-381 © 2020 Wells Fargo Bank, N.A. All rights reserved. Wells Fargo Payment Gateway Service Description Treasury Management Services June 5, 2020 Item 2B-382 2 June 5, 2020 | Wells Fargo Payment Gateway Service Description Table of contents 03 Introduction 03 Services 03 Wells Fargo Payment Gateway Item 2B-383 3 June 5, 2020 | Wells Fargo Payment Gateway Service Description Introduction The Service Documentation contains the terms and conditions governing each service ("Service") that Wells Fargo Bank, N.A. ("Bank") provides to Company under this Service Description. "Company" is the Bank customer identified on the Acceptance of Services that is signed when you enroll in Services ("Acceptance"). The Service Documentation includes: a.The Service Description (which contains terms and conditions applicable to the specific Service), b.The Acceptance (which indicates Company's acceptance of the Service Documentation), c.The Master Agreement for Treasury Management Services ("Master Agreement") (which contains terms and conditions applicable to all Services), d.The account agreement governing the account(s) (each, an "Account") Company uses in connection with the Service, e.The Product Enrollment Form (which contains set-up information for each Service in which Company is enrolling), and f.User Guides (which include Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices). This Service Description and the Master Agreement are posted at Bank's Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents comprising the Service Documentation, they will govern in the order listed above. Company's use of the Service confirms Company's receipt of an agreement to be bound by the applicable Service Documentation. If an enhancement to the Service or other change requires a change to this Service Description, Bank will post an updated Service Description on the CEO® portal. When required by applicable law, Bank will notify Company of the update. If Company continues to use the Service after the update takes effect, Company will be deemed to have agreed to the update. Services Wells Fargo Payment Gateway 1.Description of Payment Services.The Service is operated by Bank as a licensed reseller of CyberSource Corporation, a California corporation ("CyberSource"), and the products or services offered through this Service are provided to the Company as the end user person or entity. CyberSource along with any other third party suppliers providing services related to the Gateway Services shall be collectively referred to as "Third Party Suppliers" herein. The Services shall include, but, not be limited to, a) payment processing services such as transmission of transactions to the appropriate payment processing network or third party service provider, transaction responses (approved/declined), and the detailed reporting of those transactions for the viewing, managing and usage of merchants and b) all aspects of the user interface including the virtual terminal and hosted order page) ("Gateway Services" and together with the Service, the "Services"). In addition to card transactions under the Company's merchant processing agreement, payment transaction types covered by the Service may include automated clearing house ("ACH") transactions. For ACH transactions initiated using the Service, the Service Documentation includes Bank's ACH Origination Service Description (except for the section titled "Initiation Methods and Security Procedures"), which will control over this Service Description in the event of a conflict. Optional Account Validation Service.Eligible customers that use the Service to initiate ACH transactions may elect for CyberSource to access Bank's Account Validation Service on their behalf by executing a separate addendum to this Item 2B-384 4 June 5, 2020 | Wells Fargo Payment Gateway Service Description Service Description, which will set forth additional terms and conditions applicable to the Account Validation Service. 2.Definitions. As used herein, the following definitions apply: Bank Parties The Bank and its affiliates' officers, directors, employees, shareholders, agents and attorneys. Claim Any arbitration award, assessment, charge, citation, claim, damage, demand, directive, expense, fine, interest, joint or several liability, lawsuit or other litigation, notice, infringement or misappropriation of any Intellectual Property Right or violation of any law, and any consequential, indirect, special, incidental or punitive damages and any attorney's fees and expenses incurred in connection therewith. For purposes of the foregoing Claim definition, a Claim shall be considered to exist even though it may be conditional, contingent, indirect, potential, secondary, unaccrued, unasserted, unknown, unliquidated, or unmatured. Company's Systems Any web site(s) operated or maintained by Company or on Company behalf through which transactions are submitted for processing, and all of Company's other associated systems. Customer Company's customer who would like to provide payment for Company's goods or services. Documentation Collectively, the operating instructions, user manuals, and help files, in written or electronic form, all as may be amended from time to time, and made available to Company by download, and that are intended for use in connection with the Gateway Services. Gateway API The Gateway software, in object code form, that is licensed to Company under this Service Description, that formats, encrypts, and decrypts messages transferred between Company's Systems and Bank's systems during the course of Company obtaining Gateway Services. Intellectual Property Rights Any and all patents, copyrights, trademarks, trade secrets, service marks, and any other intellectual property rights, and any applications for any of the foregoing, worldwide. Pricing Schedule The document setting forth the fees payable by Company for use of the Services, which schedule shall be attached hereto as Exhibit A. Platform The Bank operated, or approved, electronic payment platform(s) and/or gateway(s) through which the payment services contemplated under this Service Description are provided. Supplemental Service Description Any addendum hereto which sets forth the details, including any supplemental terms and conditions, related to any optional service obtained as part of the Gateway Services. Updates An embodiment of the Gateway API that provides enhancements and/or improvements. Item 2B-385 5 June 5, 2020 | Wells Fargo Payment Gateway Service Description 3.Pricing. The Pricing Schedule is based on the transactional profile provided by Company. Company acknowledges that a variance between such profile and actual processing of transactions may result in Bank amending the Pricing Schedule. Company agrees that Bank may collect its fees under this Service Description in coordination with the provisions of Company's agreement with Company's payment processor. Company further agrees to establish a demand deposit account ("Account") with Bank. Company agrees that Bank may initiate ACH credits and debits to Company's Account (and to any successor account with Bank that Company may designate in writing) for the charges, fees, and/or other amounts due Bank for Gateway Services under this Service Description. Company further authorizes Bank to obtain and use information related to the Account, including collected balance reports, and to obtain and use any information deemed by Bank to be reasonably necessary to process debit and/or credit entries to the Account. Company will be liable to Bank for any collection costs or attorney fees that are incurred in the event action is taken by Bank to collect any past due fees under this Service Description. 4.License grant. a.Gateway API license. Subject to the terms of this Service Description, Bank hereby grants to Company and Company hereby accepts, a personal, limited, non-exclusive, non-transferable license and right to the Gateway API and accompanying Documentation during the term of this Service Description for the following purposes: (a) install and use the Gateway API on as many machines as reasonably necessary (which machines are and shall be maintained in facilities owned, occupied or leased by Company) to use the Gateway Services for the purpose of selling products and services to Customers; and bi) use the accompanying Documentation solely for the purpose of installing and using the Gateway APIs; and (c) create a reasonable number of copies of the Gateway API and Documentation, with all copyright notices intact, for archival purposes only. It is expressly understood that the licenses granted in this Service Description extend to Company's affiliates, Company's agents, and Company's sub- agents in the United States and world-wide who have a need to use the Gateway API system as end-users in order to assist Company in its purpose of selling products and services to Customers. b.Documentation license. Subject to the terms and conditions of this Service Description, Bank hereby grants, and Company hereby accepts, a non-exclusive, non-transferable limited license, without right of sublicense, to use the Documentation during the term of this Service Description for the sole and limited purpose of supporting Company's use of the Gateway API and Service. Company shall strictly follow all Documentation provided to Company, as it may be amended from time to time by Bank, in its discretion. It is expressly understood that the licenses granted in this Service Description extend to Company's affiliates, Company's agents, and Company's sub- agents in the United States and world-wide who have a need to use the Gateway API system as end-users in order to assist Company in its purpose of selling products and services to Customers. c.Use restrictions. Company shall not, and shall not cause or permit any third party to: (a) use the Gateway API in any way, other than in accordance with this Service Description, the Documentation or as otherwise instructed by Bank in writing; (b) use the Gateway API or Documentation, either directly or indirectly, to develop any product or service that competes with the products and services provided under this Service Description; (c) disassemble, decompile, decrypt, extract, reverse engineer or modify the Gateway API, or otherwise apply any procedure or process to the Gateway API in order to ascertain, derive, and/or appropriate for any reason or purpose, the source code or source listings for the Gateway API or any algorithm, process, procedure or other information contained in the Gateway API, except as otherwise specifically authorized in accordance with this Service Description; (d) provide the Gateway API or Documentation to any third party, other than to Company's authorized employees, agents, sub-agents and contractors who shall be subject to confidentiality obligations that are no less restrictive than the confidentiality provisions of this Service Description; (e) make any copies of the Gateway API or Documentation, except as is incidental to the purposes of this Service Description, or for archival purposes (any copies made hereunder shall contain all appropriate proprietary notices); (f) rent, lease, assign, sublicense, transfer, distribute, allow access to, or time share the Gateway API or Documentation; (g) circumvent or attempt to circumvent any applicable security measures of the Gateway API; (h) attempt to access or actually access portions of the Service not authorized for Company's use; or (i) use the Gateway API for any unlawful purpose. Item 2B-386 6 June 5, 2020 | Wells Fargo Payment Gateway Service Description d.Ownership of Intellectual Property Rights. i.Gateway API. Bank and/or its licensors shall retain all right, title and interest in and to the Gateway API and Documentation, and any and all Intellectual Property Rights embodied therein or associated therewith, and Company shall have no rights thereto except as expressly set forth herein. ii.Modifications and Derivative Works. Bank and/or its Third Party Suppliers shall own all right, title, and interest in any modifications, derivatives, improvements, enhancements or extensions of or to the Gateway API ("Derivative Works"), including any related Intellectual Property Rights, regardless of which party creates or conceives of such Derivative Work. Company hereby irrevocably transfers, conveys and assigns to Bank in perpetuity all right, title, and interest in such Derivative Works, including without limitation all Intellectual Property Rights, including the right to make Derivative Works and collective works with respect thereto, it being understood, however, that Company has, and transfers, no rights with respect to Company's products (exclusive of the Gateway API and Derivative Works). Bank will have the exclusive right to apply for such Intellectual Property Rights as it wishes with respect to the Derivative Works. Company agrees to execute such documents, render such assistance, and take such other action as Bank may reasonably request, at Bank's expense, to apply for, register, perfect, confirm, and protect Bank's rights in the Derivative Works including (without limitation) an assignment of copyright. Without limiting the foregoing, Bank will have the exclusive right to commercialize, prepare and sell products based upon, sublicense, prepare derivative works from, or otherwise use or exploit the Derivative Works. Company hereby waives any and all moral rights, including any right to identification of authorship or limitation on subsequent modification that Company (or Company's employees, agents or consultants) has or may have in any Derivative Works. Company will not remove, modify, or obscure any copyright or other proprietary notices on the Gateway API or the Documentation. e.Updates. From time to time Bank may, at its discretion, release Updates. In the event Bank so notifies Company of any such Update, Company shall integrate and install such Update into Company's systems within thirty (30) days of Company's receipt of such notice. Company acknowledges that failure to install Updates in a timely fashion may impair the functionality of the Platform or any Gateway Services provided hereunder. Neither Bank nor its Third Party Suppliers will have any liability for Company's failure to properly install the most current version of the Gateway API or any Update, and Bank will have no obligation to provide support or services for any outdated versions. f.Licensors. The licenses granted hereunder may be subject to other licenses currently held by Bank. Should any license held by Bank to certain technology or Gateway API be terminated or suspended, the corresponding license(s) granted to Company hereunder may also be terminated or suspended in the sole and absolute discretion of Bank. Company acknowledges and agrees to such potential termination or suspension and hereby waives any and all damages, whether actual, incidental or consequential resulting therefrom. If, pursuant to this Section, Bank terminates any license(s) granted to Company, Company shall have the right to terminate this Service Description immediately without penalty. g.Export compliance. Company agrees not to export or re-export the Gateway API or any underlying information or technology except in full compliance with all applicable laws and regulations. In particular, but without limitation, none of the Gateway API or underlying information or technology may be downloaded or otherwise exported or re-exported to: i.Any country to which the United States has embargoed goods (or any national or resident thereof); ii.Anyone on the United States Treasury Department's list of Specially Designated Nationals or the United States Commerce Department's Table of Deny Orders; or iii.In any manner not in full compliance with the requirements of the United States Bureau of Industry and Security and all applicable Export Administration Regulations. If Company has rightfully obtained the Gateway API outside of the United States, Company agrees not to re-export the Gateway API except as permitted by the laws and regulations of the United States and the laws and regulations of the jurisdiction in which Company obtained the Gateway API. Company warrants that Company is not located in, under the control of, or a national or resident of any country or on any list as referenced in Sections 4g (i) and (ii). Item 2B-387 7 June 5, 2020 | Wells Fargo Payment Gateway Service Description h.Return/destruction. Upon termination or expiration of this Service Description, all licenses granted hereunder shall immediately terminate, and within five (5) days thereof, Company shall either return to Bank or securely destroy the Gateway API and the Documentation, and shall so certify to Bank in writing. i.No other licenses. Except as expressly provided above, no license for any patents, copyrights, trademarks, trade secrets or any other intellectual property rights, express or implied, are granted hereunder. j.Use of transaction data. As permitted by applicable law and regulations, Bank reserves the right to copy and distribute to third parties any information associated with Company's use of the Gateway API or Company's activities on the Service. 5.Service and service descriptions. In addition to use of the Service, Company may subscribe for use of optional Gateway Services, subject to Bank's approval. Bank shall provide such elected Gateway Services in accordance with this Service Description, and any terms or conditions applicable specifically to such Gateway Service(s) which are described in the applicable supplemental service description (each a "Supplemental Service Description"). Each Supplemental Service Description shall be effective with respect to Company, upon the earlier of: (a) Company's first use of the applicable Service; or (b) confirmation notice by Bank that Company has been approved for the Service and that the Service is now available to Company. Wells Fargo may terminate Company's rights to use a Gateway Service based on Company's failure to comply with this Service Description (which includes the applicable terms specific to such Service) without terminating this Service Description or other Gateway Services, however, a termination of this Service Description will terminate all Gateway Services. 6.Platform matters. a.Integration with Company's systems. While Bank provides the Gateway API to Company, Company acknowledges that the Gateway API and/or hosted order page may by itself be insufficient to allow Company's Systems to function with the Platform. Programming, development and maintenance of Company's Systems and their functionality are Company's sole responsibility. Company has the sole responsibility to select and employ any competent programming agent(s) to accomplish the programming required to make Company's Systems function correctly with the Platform and the Services contemplated hereunder ("Integration"). Company shall be responsible for all technical support for Company's Systems and Integration related issues. Company agrees that Company will use commercially reasonable efforts to complete the Integration as soon as possible. Company will be responsible for all of Company's own development and implementation costs associated with such Integration. Notwithstanding any other provision of this Service Description, Company acknowledges that unless and until Company completes the Integration, no services need be provided by Bank to Company pursuant to this Service Description, except as otherwise specifically provided in Section 6b below. In addition, Company acknowledges and agrees that, even if Company has completed Integration, if Company has not entered into a valid merchant processing agreement a with processor acceptable to Bank, Company cannot receive payment processing services through the Service, and Bank shall not be obligated to provide, nor to arrange for the provision of, the Service. b.Set-up assistance services. Subject to Section 6a above, upon Company's request to Bank, and upon payment of any applicable Fees, Bank will provide Company with set-up services to assist with the Integration. c.Shut downs. Bank reserves the right, from time to time, without prior notice, to shut down and restart the Platform for maintenance and/or Gateway API upgrades; provided, however, that Bank will provide Company with commercially reasonable prior notification if Bank anticipates the need to shut down the platform for more than 1 hour. d.Orders by Customers. Company is solely responsible for accepting, processing, and filling any orders for purchases by Company's Customers, and for handling any inquiries arising therefrom. Company shall use the highest standards in the industry in responding to complaints by Customers. Neither Bank nor its Third Party Suppliers will be responsible or liable for any unauthorized access to Company's data or Company's Systems by any means or device. Item 2B-388 8 June 5, 2020 | Wells Fargo Payment Gateway Service Description 7.Security of information. a.Company warrants that Company will comply with all required security standards at all times during this Service Description. In Bank's sole discretion with regard to (a) and (b) below, any failure by Company to comply with all required security standards at all times during this Service Description: (y) will permit Bank to suspend the Service; and/or (z) shall constitute a material breach of this Service Description and Bank shall have the right to terminate this Service Description. Without limiting the foregoing, Company specifically agrees to comply with all Card Association Security Requirements including, without limitation, the Visa Customer Information Security Program (CISP), the MasterCard Site Data Protection Program (SDP), Payment Card Industry Data Security Standards (PCI), any other applicable Association requirements regarding data security, and any additional security requirements provided to Company from time to time by Bank. If any Bank security requirements provided to Company are changed, Bank shall provide Company with notice of such changed security requirements, and Company shall have thirty (30) days (or any other longer period as may be mutually agreed to between the parties in writing) to make the changes necessary to comply with the changes to such Bank security requirements. b.Bank shall be responsible for the security of data once it becomes part of the Service, and shall comply with applicable laws and Card Association requirements as they relate to the security and processing of this data. Data will become part of the Service when it has been received by Bank from Company's systems, and data will cease to be part of the Service when it has been received by the processor from Bank. 8.Privacy. Company agrees that, during the term of this Service Description, Company will adequately communicate and comply with an appropriate privacy policy explaining Company's online collection and use of the personal information of Company's Customers ("Privacy Policy"). Unless required by law, by Bank Card Association Rules, or done pursuant to this Service Description, Company shall not, under any circumstances, sell, purchase, provide, or otherwise disclose any Customer's account information, transaction information, or other personal information to any third party. Company shall store all data securely. 9.Audit rights. Upon commercially reasonable advance notice to Company, Bank may audit Company's usage, records and security of the Gateway API, Company's Customer's payment processing information, and the Gateway Services provided hereunder to ensure that (a) Company is using the Gateway API and the services in full compliance with the provisions of this Service Description; (b) all applicable fees have been paid by Company; (c) Company is adhering to Company's Privacy Policy; and (d) Company is in full compliance with all applicable laws, regulations and rules (including but not limited to Bank Card Association rules). Any such audit shall be conducted during regular business hours at Company's offices and shall not interfere unreasonably with Company's business. 10.Legal responsibility. a.Indemnification. Company shall indemnify, defend, and hold harmless all Bank Parties from any Claim(s) arising from the conduct of Company's business, any transactions submitted using the Service hereunder for payment processing, any false or inaccurate representation made by Company or the negligence, fraud, dishonesty or willful behavior of any of Company's employees or agents, or from Company's failure to strictly comply, in whole or in part, with any: (a) terms and conditions pursuant to this Service Description and any addenda hereto or Documentation; or (b) applicable law, regulations or rules. Upon written notice from Bank to Company, Company shall immediately undertake the defense of such Claim by representatives of Company's own choosing, subject to Bank's reasonable approval. b.IP infringement. If the Service (or any part thereof) is claimed, or is adjudicated, to be infringing any patent, copyright or any other intellectual property right of any third party, Bank, at its option and own expense, may take one or more of the following actions: i.Secure for Company the right to continue using the Service at no additional charge to Company; ii.Replace or modify the Service to make them non-infringing without material reduction of functionality; or iii.Terminate this Service Description or any applicable Gateway Service. Item 2B-389 9 June 5, 2020 | Wells Fargo Payment Gateway Service Description Bank (or its Third Party Suppliers) shall have no liability for any claim of infringement based on (a) products or services of Bank (and/or its Third Party Suppliers) which have been modified by parties other than Bank (or its Third Party Suppliers); (b) Company's use of the Service and/or any Gateway Services in conjunction with data where use with such data gave rise to the infringement claim; (c) Company's failure to install Updates, upgrades or patches provided by Bank (or its Third Party Suppliers) where such Updates, upgrade or patch would have removed the infringing condition; or (iv) Company's use of the Gateway Services with software or hardware not authorized by Bank (or its Third Party Suppliers), where such use with such other software or hardware gave rise to the infringement claim. The above remedies are the sole and exclusive liability of Bank and are the sole and exclusive remedies available to Company against Bank in the event of such action or threatened infringement. 11.Limitation of liability. a.General limitations. Neither Bank nor its third party suppliers shall be liable for the merit and legitimacy of the orders forwarded by Company. All liability for validity of orders remains with Company. Neither Bank nor its Third Party Suppliers shall be responsible for any data entry errors, Customer misrepresentations, or reporting errors resulting from Company's actions. Neither Bank nor its Third Party Suppliers shall be liable to Company or Company's Customers for the accuracy of the information provided by the Service or use of the Gateway Services. b.Special damages. In no event shall Bank or its Third Party Suppliers be liable to Company, or to any other person or entity, under this Service Description, or otherwise, for any punitive, exemplary, special, indirect, incidental or consequential damages, including, without limitation, any loss or injury to earnings, profits or goodwill. c.Maximum liability. Notwithstanding anything to the contrary contained in this Service Description, in no event shall Bank or its Third Party Suppliers' liability under this Service Description for all Claims arising under, or related to, this Service Description exceed, in the aggregate (inclusive of any and all Claims made by Company against Bank and/or its Third Party Suppliers, whether related or unrelated) the total amount of fees paid by Company for the Gateway Services during the 12-month period immediately preceding the date the event giving rise to such Claim(s) occurred. d.Other damages. In addition to the limitation of liability provisions set forth herein, neither Bank nor its third party suppliers will be liable for any Claims under this Service Description arising directly or indirectly from or otherwise concerning: (a) any termination, suspension, delay or disruption of service (including billing for a service) by the Internet, any common carrier or any third party service provider; (b) any failure, disruption or malfunction of the Gateway API, the services provided hereunder or the Internet, or any communications network, facility or equipment beyond Bank's reasonable control, whether or not attributable to one or more common carriers or third party service providers; (c) any failed attempts by Company or Company's Customers to access any Systems or to complete processing transactions; or (d) any failure to transmit, obtain or collect data from Customers or for human, machine or Gateway API errors or fault or Company's or Company's Customer's erroneous input. Item 2B-390 10 June 5, 2020 | Wells Fargo Payment Gateway Service Description 12.DISCLAIMER OF BANK WARRANTIES. COMPANY ACKNOWLEDGES AND AGREES THAT THE USE OF THE WELLS FARGO PAYMENT GATEWAYSM, GATEWAY SERVICES AND THE GATEWAY API IS AT COMPANY'S SOLE RISK. NEITHER BANK NOR ITS THIRD PARTY SUPPLIERS MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AND NO IMPLIED AT LAW WARRANTY SHALL ARISE FROM THIS SERVICE DESCRIPTION, THE GATEWAY API, THE DOCUMENTATION, THE GATEWAY SERVICES PROVIDED HEREUNDER, OR FROM PERFORMANCE BY BANK, INCLUDING, WITHOUT LIMITATION: (A) ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (B) ANY WARRANTIES OF NONINTERFERENCE OR NON-INFRINGEMENT; OR (C) ANY WARRANTIES THAT ANY PRODUCT OR SERVICE PROVIDED HEREUNDER (INCLUDING BUT NOT LIMITED TO THE GATEWAY API) WILL (1) MEET COMPANY'S REQUIREMENTS; (2) OPERATE ACCORDING TO COMPANY'S EXPECTATIONS; (3) PROVIDE ACCURATE DATA; OR (4) OPERATE UNINTERRUPTED OR ERROR FREE. NEITHER BANK NOR ITS THIRD PARTY SUPPLIERS MAKE ANY REPRESENTATION, WARRANTY OR GUARANTEE WHATSOEVER IN RELATION TO ANY PRODUCTS OR SERVICES PROVIDED BY THIRD PARTY SERVICE PROVIDERS. ANY AND ALL SUCH WARRANTIES DESCRIBED IN THIS SECTION ARE EXPRESSLY DISCLAIMED BY BANK AND IT THIRD PARTY SUPPLIERS AND ARE WAIVED BY COMPANY. BANK AND ITS THIRD PARTY SUPPLIERS DO NOT WARRANT THAT ANY ERRORS WILL BE CORRECTED. EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH HEREIN, ALL GATEWAY API AND SERVICES PROVIDED HEREUNDER ARE PROVIDED ON AN "AS-IS, WITH ALL FAULTS" BASIS. THIS DISCLAIMER OF WARRANTIES CONSTITUTES AN ESSENTIAL PART OF THE SERVICE DESCRIPTION. All decisions to reject any processing transaction or payment for Company's products or services are solely Company's responsibility. 13.Company's warranties. Company warrants all of the following: (a) All representations and statements made in this Service Description and any other related document, by Company or on Company's behalf are true, accurate, and complete in all respects and Company hereby authorizes Bank to verify and confirm all information provided herein by any means at its disposal; (b) Company is engaged in a lawful business, which includes the sale of merchandise and/or services and is duly licensed to conduct such business under the laws of the state(s), county(s), city(s), and country(s) in which Company operates; (c) Company shall not submit any payment transactions that violate any laws of any related state, county, city, or country or any bankcard association rules and shall otherwise comply with all applicable laws, regulations, or rules in connection with Company's obligations under this Service Description; (d) That there are no outstanding or contemplated assignments, grants, licenses, encumbrances, security interests, liens, obligations or agreements (whether written, oral or implied) that are inconsistent with this Service Description and the rights and obligations herein; (e) That Company will process Company's card transactions with a Bank approved card transaction processor ("Processor"); throughout the term of this Service Description; (f) That Company's election to purchase optional Gateway Services (other than access to the Service itself) may require Company to sign additional agreements, which agreements will be provided to Company prior to the purchase of such Gateway Service; (g) That Company shall be responsible for any fines, penalties, fees or assessments imposed by a Bank Card Association based upon Company's (1) use of the Service or (2) noncompliance with a Bank Card Association's rules or requirements; (h) That Bank may use subcontractors to provide some or all of the Service, and shall have the right to terminate or retain subcontractors in Bank's sole discretion; (i) That Company's installation, configuration and use of the Gateway Services shall conform to specifications set forth in the Documentation; (j) That Company shall bear (1) all collection risk (including without limitation, credit card fraud and any other type of fraud) with respect to sales of its products; and (2) all responsibility and liability for the proper payment of all taxes that may be levied or assessed (including without limitation, sales taxes) in respect of sales of its products; (k) That Company shall be solely responsible for maintaining complete backup records of all information relating to orders, inquiries, and purchases and any information submitted to Bank (or its third party suppliers) for the purpose of providing the Gateway Services; and (l) that, except with regard to Sections 9(d), 12, 13(i), (j) and (k), and 14(a), in the event of a conflict between the terms of a Supplemental Service Description and this Service Description, the terms of the Supplemental Service Description shall govern. Item 2B-391 11 June 5, 2020 | Wells Fargo Payment Gateway Service Description 14.Notices. Company agrees to notify Bank of any change in Company's name, type of business, or any other information required on Company's merchant processing application at least thirty (30) business days prior to the effective date of the applicable change. Any notice or other communication required or permitted to be given hereunder shall be in writing, addressed or transmitted to the party to be notified at such party's last known address or number, and shall be: (a) if sent by Bank, hand delivered or delivered by facsimile transmission, overnight courier or certified, registered, regular mail or e-mail; or (b) if sent by Company, certified or registered mail, postage prepaid return receipt requested. Any notice delivered hereunder shall be deemed effective, as applicable, upon delivery, if hand delivered or sent by overnight courier; upon receipt as evidenced by the date of transmission indicated on the transmitted material, if by facsimile transmission or e-mail; on the date of delivery indicated on the return receipt, if mailed by certified or registered mail; or ten (10) days after mailing, if by regular mail (or as otherwise required by applicable law). The parties' addresses may be changed by written notice to the other party as provided herein. Until changed by subsequent written notice to Company, Bank's address for notices under this Section shall be: Wells Fargo Bank, 1200 Montego Way, Walnut Creek, CA 94598, Attn: Merchant Services. 15.Force Majeure. Bank shall not be held responsible for any delays in or failure or suspension of service caused by mechanical or power failure, computer malfunctions (whether Gateway API, hardware and firmware related), transmission link failures, communication failures, failure, delay or error in clearing or processing a transaction (including through interchange) or any other system, failure, delay or error by any third party or in any other third party system, strikes, labor difficulties, fire, inability to operate or obtain service for its equipment, unusual delays in transportation, acts of God or other causes reasonably beyond the control of Bank. 16.Survival. Upon termination or expiration of this Service Description, a party's obligations shall cease except for those remaining or required to be performed following such termination. For the avoidance of doubt, the Definitions and the provisions of Sections 4d, 4f, 4i, 4j, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15 shall survive the termination or expiration of this Service Description. All representations, warranties, indemnities and covenants made herein shall survive the termination or expiration of this Service Description and shall remain enforceable after such termination or expiration. Item 2B-392 STAFF REPORT CITY OF PALM DESERT DEVELOPMENT SERVICES DEPARTMENT MEETING DATE: October 27, 2022 PREPARED BY: Eric Ceja, Director of Economic Development REQUEST: RECEIVE AND FILE INFORMATIONAL REPORT ON THE CURRENT STATE OF THE CANNABIS INDUSTRY IN PALM DESERT RECOMMENDATION: Receive and file the 2022 State of the Cannabis Industry Report. BACKGROUND ANALYSIS: The attached report conveys information on the current state of the cannabis industry in the City of Palm Desert and the Coachella Valley as a whole. Staff collected data and written responses from local cannabis business owners through in-person meetings and surveys. Additional supportive information was collected from local market research through discussions with staff from Cathedral City, Coachella, Desert Hot Springs, Indio, Palm Springs, and Riverside County. State legislative research was obtained through contact with legal staff and industry experts. The intent of the cannabis survey and interviews was the following: •Gain a better understanding of current market conditions. •Understand specific opportunities and challenges in the cannabis industry. •Learn how the City can best support our cannabis industry. •Re-introduce staff to business management. The contents of the report summarize: •Outreach and survey efforts •Cannabis operations in Palm Desert •Cannabis operations throughout the Coachella Valley •State and federal regulations •State tax trends •Local taxes and market trends •Survey results from local businesses Survey and Report Findings: Staff’s outreach efforts consisted of surveys and interviews with all licensed cannabis operators in the City of Palm Desert, as well conversations with the neighboring Coachella Valley cities that permit cannabis operations. All cannabis operators in the City of Palm Desert expressed appreciation for the City, and gratitude for the availability of staff and City support. Additionally, operators reported increasing concerns about declining sales and limited growth opportunities, which are compounded by the City’s and the State’s sales and excise taxes. Although Palm Item 2C-1 October 27, 2022 – Staff Report Receive and File Cannabis Industry Report Page 2 of 2 \\srv-everyone\everyone\Staff Reports - Shared 2\2022\Staff Reports 2022-10-27\2C - Cannabis Report - 10-27-2022\0 Staff report - Cannabis State of the industry.docx Desert’s cannabis operators are performing better, on a per store basis, than other operators in the neighboring cities, the industry is experiencing lower sales volume than the previous year. The following main themes are based on the input and reported responses from Palm Desert cannabis operators: 1.Retail sales revenue is declining around the Coachella Valley. 2.There is increased competition in the local cannabis market due to the following conditions: a.Riverside County permitted additional retailers around Washington Street. b.The City of Indio has begun to permit legal cannabis operators. c.Riverside County and the City of Indio tax cannabis sales less than the City of Palm Desert. 3.Many cannabis operators have adjusted their business model by either taking on new business partners or acquiring additional “micro-business” licenses, to increase capital and maintain operations. 4.Changes at the state level have increased the tax burden on retailers. 5.Potential changes at the federal level will likely increase competition but will also allow greater access to financial institutions. The intent of the 2022 State of the Cannabis Industry Report is to provide the City Council with insight and information to help guide their decision making regarding the industry. FINANCIAL IMPACT: There is no fiscal impact related to the staff’s recommendation. REVIEWED BY: Department Director: Eric Ceja Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENTS: 1. 2022 Cannabis State of the Industry Report Item 2C-2 2022 CANNABIS STATE OFTHE INDUSTRY REPORT CITY OF PALM DESERT Item 2C-3 Introduction State and Federal Regulation Palm Desert Operations Cannabis Outreach Campaign Summary Operations in the Coachella Valley TABLE OFCONTENTS 03 19 05 04 11 State Tax Trends Survey and Business Visit Results Local Taxes and Market Trends Conclusion 20 24 22 34 Palm Desert Cannabis Taxes07 1Item 2C-4 Eric Ceja, Economic Development Denise Hamet, Economic Development Deborah S. Glickman, Economic Development Stephanie Lopez, Economic Development Horacio Celaya, Finance Veronica Chavez, Finance Pedro Rodriguez, Code Compliance Nick Melloni, Planning Kevin Swartz, Planning Jason Finley, Building & Safety Ryland Penta, Public Affairs Stone James, City of Cathedral City Tami Scott, City of Cathedral City Michael Milan, City of Palm Springs Veronica Goedhart, City of Palm Springs Gabe Perez, City of Coachella Nathan Statham, City of Coachella Kevin Snyder, City of Indio Geoffrey Buchheim, City of Desert Hot Springs Christina Newsom, City of Desert Hot Springs Kimberly Wright, Riverside County Michael Maldonado, Riverside County We appreciated the information from the city of Palm Desert’s staff: We also appreciate the staff time in each of our Coachella Valley cities who we contacted: Matthew Nathaniel, Authentic 760 Fred Montano, Authentic 760 Keyva King, Royal Highness Earth Essentials Seth Berk, Palm Royal Collective Scott Berk, Palm Royal Collective Kenneth Churchill, West Coast Cannabis Paul Cotterell, The Leaf Brad Ulisky, Libra John Greenwood, Libra Shelley and Derek Markstein, JW Brands Joe Reed, JW Brands Eric Hughes, P & S Ventures Scott Lambert, P & S Ventures Corey Tobin, Thinc Cubed Ajay Kolluri, HDL Jocelyn Kane, CVCAN Jill Tremblay, Best Best & Krieger Attorneys at Law Aaron Dill, Governor’s Office of Business and Economic Development Patrick Le, CA Assembly Budget Committee And we’d like to give special thank you to the Desert’s Cannabis Industry for their time: Thank you to our contacts at the state of California, members of the legal industry, and Cannabis Advisers from HDL and from CVCAN ECONOMIC DEVELOPMENT CANNABIS STATE OF THE INDUSTRY REPORT We would like to give special thanks to all who assisted with information gathering for this State of the Industry Report. 2Item 2C-5 Gain a better understanding of current market conditions Understand specific opportunities and challenges in the cannabis industry. To learn how the City can best support our cannabis industry To re-introduce City staff to business management This report provides an update regarding the current state of the cannabis industry in the City of Palm Desert and the Coachella Valley as a whole. Data and written responses used in this report were collected in the first half of 2022 by staff from the City of Palm Desert's Economic Development Department. This material was collected by meeting local cannabis business owners and with a survey form created by City employees. An additional key component was the local market research conducted through discussions with staff of Cathedral City, Coachella, Desert Hot Springs, Indio, Palm Springs, and Riverside County. State legislative research was conducted through contact with legal staff and industry experts. The intent of the cannabis survey and interviews was to elicit the following information: INTRODUCTION 3Item 2C-6 Retail sales revenue is declining. There is increased competition in the local cannabis market, as Riverside County has permitted several new retailers around Washington Street, and the City of Indio begins permitting legal cannabis operators. Both the County and the City of Indio tax cannabis sales less than the City of Palm Desert. Many cannabis operators have adjusted their business model, either taking on new business partners or acquiring additional “micro-business” licenses to increase capital and maintain operations. Changes at the State level have increased the tax burden on retailers. Potential changes at the Federal level will likely increase competition but will also allow greater access to financial institutions. The City’s outreach campaign consisted of surveys and interviews with all licensed cannabis operators in the City of Palm Desert and with all other Coachella Valley cities that permit cannabis operations. All cannabis operators in the City of Palm Desert expressed appreciation of the City of Palm Desert, citing their businesses' access to City staff and City support towards the industry. Palm Desert cannabis operators expressed increased concern about declining sales and limited growth opportunities, which are compounded by the City’s and the States sales and excise taxes. Although Palm Desert’s cannabis operators are performing better per store than other Coachella Valley cities, the industry is experiencing lower sales volume than the previous year. Based on the surveys and interviews with Palm Desert cannabis operators, the following main themes include: 1. 2. 3. 4. 5. A few operators estimated a sales revenue decline of 20% - 40% from one year ago. Operators have indicated that the sales decline is already impacting their operations. They have adjusted their business model by limiting overhead costs, pursuing capital partners and micro-business licenses, and reducing their employees. CANNABIS OUTREACHCAMPAIGN SUMMARY 4Item 2C-7 Retailers (6 licenses) Manufacturers (2 licenses) Cultivators (2 licenses) Distribution (1 license) Testing (1 was approved but did not open) History of Legal Cannabis in Palm Desert In 2017, the City of Palm Desert approved a limited number of cannabis business licenses for retail, cultivation, manufacturing, distribution, and delivery. Based on the City’s approved Cannabis Ordinance (Ord. 1329), no more than six retail licenses were allowed, with only one license awarded for the El Paseo corridor. The number of permitted licenses for other cannabis businesses was limited by a 1,000-foot separation requirement within the City’s Service Industrial zoning districts. The City’s licensing process was straightforward, requiring the submittal of a Conditional Use Permit (CUP) to be evaluated on a competitive basis established by the City. The competitive application process ensured that only the best cannabis businesses would be awarded licensing in the City and favored applications that were: compatible with the surrounding businesses and neighborhood, the businesses’ security and odor control plan, qualification of the applicants, interior and exterior upgrades to the building, and community benefits. With the submittal of 33 applications, the City ultimately permitted the following: PALM DESERTOPERATIONS Lastly, the black market, compounded sales taxes, and limited banking services remain a concern. Although many Coachella Valley cities have considered lowering their tax rates none have acted to do so. However, Riverside County and the City of Indio’s “community benefit” tax is approximately ½ of Palm Desert’s sales tax. Staff anticipates that, with taxing changes occur at the State level, cities will respond with in kind. 5Item 2C-8 The City’s ordinance, allowing limited operations and requiring a CUP with strict operational requirements, is a model that other jurisdictions have followed. The City’s regulatory requirements align with the requirements established by the State Bureau of Cannabis Control. The limited operations in Palm Desert have better supported the cannabis industry than other Coachella Valley cities. With all licenses issued, the first retailers began operations in the fall of 2018, with the last retail operator opening in early 2020. To date, all retailers remain in operation, and separate “micro-business” licenses have been allowed to include a seventh retail license. However, due to market conditions related to the price of raw cannabis, one cultivator never opened, and the other manufacturers and cultivators were late to enter the market. Since operations began in 2018, four businesses have changed ownership or updated their structure to infuse additional capital into their business, including two retailers, a manufacturer, and a distributor. Summary of Palm Desert Cannabis Operations As of this report, the City of Palm Desert has eight (8) cannabis businesses in operation, including two owned by the same organization, West Coast Cannabis Club (WCCC). Two additional manufacturer/distribution facilities, one operated by P&S Technologies and the other by ThincCubed, are under construction and will open by the end of 2022. Currently, two businesses (WCCC and H.O.T.N.-Libra) operate as “micro-businesses,” meaning that the businesses carry multiple cannabis licenses allowing each business to vertically integrate licenses with retail, manufacturing, and cultivation operations. H.O.T.N., the longest operating retailer in the City with a location at Washington Street and Country Club Drive, is vertically integrated with a retail component, limited manufacturing, and distribution. H.O.T.N-Libra is considering expanding to include cultivation to better control costs and supply. Discussions with other business owners indicated that future trends may call for vertical integration to better control operating costs. 6Item 2C-9 A few businesses would be interested in starting a lounge. Some stores have locations in other cities. Others are considering new locations in other cities. Expand profit by selling products to other retailers. One is working on a cultivation facility. Businesses note the industry's evolution and anticipate additional changes as it matures. Changes at both the Federal, State, and Local level: The City of Palm Desert currently taxes cannabis operators based on license type. Palm Desert City Council Resolution 2018.89 provides for the following adopted tax guidelines for the City of Palm Desert: PALM DESERTCANNABIS TAXES $13/square foot of space utilized in connection with cannabis cultivation businesses Two cents for each $1.00 of gross receipts for cannabis manufacturing businesses, and Ten cents for each $1.00 of gross receipts for cannabis retail businesses. Palm Desert collected $3.7 million in cannabis tax revenue in FY2020/2021. In the most recent Fiscal Year, revenue dropped to $3.3 million. 7Item 2C-10 COVID-19 Relief: Palm Desert Tax Rebate Unlike other businesses, cannabis businesses were ineligible for Federal COVID-19 Economic Relief program. Therefore, to support the local cannabis industry, the City of Palm Desert approved a temporary retail tax rebate. The amount to be rebated was set at the amount of sales tax revenue collected by the City for Fiscal Year 2020/2021 exceeding $3 million, up to a total aggregate rebate of $250,000. Based on the City’s tax rebate relief, a total of five (5) cannabis operators received rebates totaling $212,633. Palm Desert Cannabis Locations Map The following map shows the Palm Deserts' current and planned locations: 8Item 2C-11 9Item 2C-12 Palm Desert Location Addresses The chart below shows the type, name, and address of each business. Businesses with multiple license types have been awarded micro-business licenses. 10Item 2C-13 The Coachella Valley consists of nine (9) cities, five (5) of which, Desert Hot Springs, Palm Springs, Cathedral City, Palm Desert, and Coachella, allow cannabis businesses to operate through a permitting process. The City of Indio, the largest city in the Coachella Valley, is the newest city in the Coachella Valley to allow cannabis businesses, with five (5) new retailers expected to open in 2023. The following table identifies the total number of cannabis operations in the Coachella Valley, highlighting each city and license type. COACHELLA VALLEYOPERATIONS Types of Operations in the Valley Cannabis businesses have a variety of operations, including retail storefront (typically referred to by consumers as a dispensary), non-storefront retail delivery (to consumers), manufacturing of the product; converting raw flowers into other products such as topical cremes or oils, and pre-rolls, distribution (from wholesale growers or extractors to dispensaries); cultivation (growing the product for manufacturing), and laboratories (testing of the product). While some businesses operate as stand-alone businesses with a single license, some carry multiple license types. Businesses with multiple licenses are referred to and taxed as a micro business. 11Item 2C-14 The following map shows cannabis locations in the Coachella Valley. Palm Desert's eight operators and two planned locations appear to exist as an island, surrounded by approximately 207 other cannabis operations in the Coachella Valley and unincorporated area. Since its approval in 2018, the City of Palm Desert has focused on strategic cannabis industry growth, limiting public safety impacts and nuisances. To date, there are no known public safety impacts due to the cannabis industry in Palm Desert. Cannabis Tax collection and rates Coachella Valley cities tax cannabis based on the type of operation: retail, cultivation, and manufacturing. The table below summarizes the various rates for each city and Riverside County. As indicated below, retail tax rates are 10% for all valley cities with the exception of the City of Coachella at 6%. The City of Indio will enact an alternative type of tax by implementing a community benefits agreement for retail operations. The amount of the alternative tax is anticipated to be equivalent to a tax rate of 5% - 6%. Riverside County does not charge a cannabis tax but establishes a public benefit fee which varies based on the operation. Cultivation tax is based on the canopy area or weight of the product, except for Coachella, which taxes at a percentage of all sales. 12Item 2C-15 To better understand cannabis tax trends, cannabis tax revenue data was collected from each city. Data was collected showing the total amount of cannabis tax revenue and the amount of tax collected from retail cannabis. The actual dollars collected are summarized below by city for FY20/21 and FY21/22. All the cities reported a drop in revenue from 20/21 to 21/22. 13Item 2C-16 For purposes of revenue analysis, estimated store sales revenue was calculated by dividing the retail cannabis tax revenue dollars collected by the retail tax rate. The average revenue per store was calculated by applying the number of storefront dispensaries to the estimated total store sales revenue. The average revenue may be slightly skewed if some stores were only open for part of the year and if some of the revenue is earned from taxes on non-storefront sales; however, the statistics reflect an approximate average. 14Item 2C-17 Tax and Revenue Summary by City The charts below show the trends for estimated cannabis retail store revenue per city. 15Item 2C-18 Estimated Store Sales Revenue By City Tax and Revenue Summary by City Cathedral City Coachella 12 Retail Dispensaries 27 Cultivation 11 Manufacturing 4 Laboratories Operating Businesses: 54 4 retail dispensaries 19 Cultivation 11 manufacturing 10 Transportation 1 retail dispensary in construction 1 retail dispensary in plan check Operating Businesses: 42 Pending Operations: 10% retail tax $15.00/square foot cultivation tax $0.05, $0.10 or $0.40 per gram manufacturing tax ( based on the type of cannabis concentrate) The city does not tax laboratories Tax structure: 6% Retail tax 4% Cultivation Tax Two-year stepdown of 1% per year 2% manufacturing tax 0% Distribution Tax 0% Testing tax Tax Structure: $5.1 Million Total Including $1.8 Million retail $4.4 Million Including $1.4 Million retail Tax Revenue by Fiscal Year: 2020 - 2021 2021 - 2022 $1.9 Million Including $0.6 Million Retail Tax Pending information Tax Revenue by Fiscal Year: 2020 – 2021 2021-2022 16Item 2C-19 Desert Hot Springs Indio 14 retail businesses 9 Retail Dispensaries 5 Delivery businesses 49 Cultivation and/or Manufacturing 5 Distribution The city has approximately 300,000 square feet of additional cultivation space underway Operating Businesses: 68 Pending Operations: Pending Operations: Indio opened applications for retail stores as of September 1, 2022. 10% Retail $10.20/square foot for Cultivation 0% Manufacturing/Distribution Tax Structure: $5.2 Million $2.7 Million Retail Tax $4.2 Million $2.0 Million Retail Tax Tax Revenue by Fiscal Year: 2020 – 2021 2021-2022 Unincorporated Riverside County 2 Retail Businesses 1 Microbusiness The county charges cannabis businesses a public benefit fee consisting of 2 components. Annual baseline fee – Depending on the total size and use type Public Benefit fee – Negotiated through a development agreement Retail baseline fees (est. in 2019) - From $16.00/square feet to $20.00/square foot Cultivation baseline fee - From $2.00/square foot to $5.50/square foot Other types include Manufacturing, Nursery & Testing – From $0.50/square foot to $4.50/square foot North of Interstate 10 Operating Businesses: 3 Tax Structure: * The baseline public benefit fee shall be subject to annual increases by two percent from and after 2019. An additional public benefit fee is negotiated for each agreement. 17Item 2C-20 Palm Desert Palm Springs 7 Retail Dispensaries 1 Delivery Business A location for Manufacturing & Distribution is undergoing construction and anticipated to be open in the next 2 to 3 months. A Wholesale Extraction operation is anticipated to open in the fall. Operating Businesses: 8 Pending Operations: 33 Retail Dispensaries 31 Storefront 11 with Lounges 2 Delivery Businesses 13 Cultivation 20 Transportation/Distribution Operating Businesses: 66 10% Retail $13.00/square foot of Cultivation Space 2% Manufacturing Tax Structure 10% Retail $10.00/square foot for Canopy Cultivation Includes a reduced tax level of $5.00/square foot for businesses located in the overlay zone north of the freeway 2% of gross receipts manufacturing Tax Structure $3.7 Million $3.3 Million Tax Revenue by Fiscal Year: 2020 – 2021 2021 – 2022 *Tax income is largely from retail. $4.5 Million $4.3 Million Retail Tax $4.4 Million Tax Revenue $4.0 Million Retail Tax Tax Revenue by Fiscal Year: 2020 – 2021 2021 – 2022 18Item 2C-21 Federal Regulation Federal regulation of cannabis is maintained through the Controlled Substances Act (CSA). The CSA applies to specific substances and categories of substances that have been designated for control by Congress or through administrative proceedings. The CSA places various substances in one of five schedules based on their medical use, potential abuse, and safety or risk for dependence. Cannabis is listed as a Schedule I Controlled Substance under the CSA and is deemed to have a high potential for abuse. The Schedule I status of cannabis means that federal authorities strictly regulate the substance. Yet, over the last several decades, most states and territories have deviated from the across-the-board prohibition of cannabis and now have laws and policies allowing for some cultivation, retail sale, distribution, and possession of cannabis for medicinal or recreational purposes. Of the 50 states, 37, including Puerto Rico and Washington D.C., allow recreational or medicinal cannabis use and sale. California Regulation California became the first state to allow medicinal cannabis use when voters passed the Compassionate Use Act in 1996. Today, cannabis is legal in California for both medicinal and adult (recreational) use. The California Department of Cannabis Control lists 1069 active retail storefront licenses, 471 non-store licenses, and 376 microbusiness licenses throughout the state as of 8/26/22. Other licenses include 1254 distributors, 188 transport only, 48 labs, and 65 event permits. Compared to the state, the Coachella Valley, inclusive of unincorporated areas, has 219 cannabis operators. These include retail and multi-use cannabis operations, cultivation, manufacturing, non-storefront operations, distribution, and laboratories. The Department of Cannabis Control(DCC) licenses and regulates all commercial cannabis activity in California. The DCC requires operators to have a valid DCC license before performing any commercial cannabis activity, including: STATE AND FEDERALREGULATIONS 19Item 2C-22 Growing cannabis (cultivation) Transporting cannabis (distribution) Making cannabis products (manufacturing) Testing cannabis or cannabis products (testing laboratory) Selling cannabis (retail) Holding an event where cannabis will be sold (event organizers) Within each of these license types are sub-categories resulting in different license subtypes. Businesses that desire to expand must achieve the additional license type. STATE TAX TRENDS California Taxes The state imposes several layers of taxes along the cannabis supply chain. California charges a cannabis excise tax of 15%, a state sales tax of 7.25% (a total of 7.75% with local sales and use tax in Palm Desert), and a cultivation tax. The State cultivation tax will be eliminated in January of 2023. The sample analysis below reflects the area's typical revenue and expense amount for sale. Some retailers may have higher or lower ticket averages; the example is meant as a general indication of the financial model. As reflected in the model, the bottom line can be zero or negative. 20Item 2C-23 That the State eliminates the tax paid by growers, That the State offers a three-year reprieve on the tax with point-of-sale transactions, and That the State open more retail opportunities. Cannabis Leaders Letter to the State (see attachment 1) In December 2021, about 30 California cannabis leaders petitioned the governor to take three actions to help improve the precarious status of the cannabis industry. They stated there could be an imminent loss of cannabis businesses otherwise. The petitioners requested: 1. 2. 3. The leaders conveyed that multiple levels of state taxes, combined with the black market, threaten business conditions and the closing of cannabis businesses. California Cultivation Tax Elimination Budget trailer bill AB195 was approved by Governor Newsom on 6/30/22, covering four areas of the cannabis industry: cultivation taxes, labor peace agreements, tax credits, and equity provider incentives. The bill suspends the cannabis cultivation tax, starting on January 1, 2023, and moves collection of the 15% cannabis excise tax to the distributor's point-of-sale. The excise tax is capped at 15% for the next three years. Then, beginning 7/1/25, the California Department of Tax and Fee Administration is required to adjust the rate every two years by a rate that would generate an amount of revenue equivalent to what would have been collected from the lost cultivation tax but not to exceed 19%. The legislation also adjusts the labor peace agreement requirement from 20 employees to 10, beginning in 2024. Suppose a cannabis business has ten or more employees. In that case, the employer must enter into a labor peace agreement with a union where the employer agrees not to oppose unionization, and the union decides not to strike or otherwise stop work. Some cities have already taken similar measures. Coachella brought the minimum down to 5. Cathedral City brought it down to 10. The bill includes $40 million in tax credits. The legislation allows qualified businesses (high- road cannabis employers) to claim a tax credit against income taxes of up to 25% of their qualified expenditures up to $250,000 beginning in the 2023 taxable year, for a total of $20 million. Eligible expenses include employee compensation, safety-related equipment, training and services, and workforce development.21Item 2C-24 Cannabis equity licensees can retain 20% of the excise tax they collect to reinvest in their business, provided that the licensee has received approval from the Department of Cannabis Control for a fee waiver contingent on the availability of funds. The legislation also includes an allocation of $20 million to make equity licensees eligible for a $10,000 tax credit. A few of the Coachella Valley cities have considered tax reductions, resulting in one city making a few changes to the calculation of cultivation taxable area. One city (Indio) is just now entering the cannabis market. The following section summarizes each city’s recent cannabis actions. Cathedral City In September 2021, the Cathedral City City Council hosted a study session covering the history of tax collections in the City and discussing a request from cannabis operators to consider a retail “tax holiday.” At that time, the City Council declined to proceed with a tax holiday but did establish a Cannabis Task Force. The Cannabis Task Force met on November 29, 2021, and Cathedral City staff provided an update to the City Council in a study session on January 12, 2022, to review the discussions of the Task Force. As a result of that meeting, the City Council asked staff to review the City’s Municipal Code provisions related to Cannabis, the tax and fee structure, and related data. A follow-up study session was held in May 2022. The outcome was that Council asked staff to separate the tax discussion from the ordinance revisions. On June 8, 2022, the Cathedral City City Council approved modifications to their tax ordinance, modifying the definitions regarding taxable areas for the cultivation tax. The council approved exempting rooms that don’t regularly have cannabis, such as bathrooms or employee lounges, from being counted in the square footage on which the cultivation tax is based. This will be effective upon a business' license renewal when they submit updated floor plans. Councilmembers also approved exempting cannabis cultivation businesses from tariffs if they haven’t opened or are temporarily closed. LOCAL TAXES ANDMARKET TRENDS 22Item 2C-25 On May 1, 2022, additional direction was given to provide further information related to the proposal to allow outdoor consumption lounges. The discussion regarding outdoor lounges, including setback and odor control requirements, was held during a study session on August 10, 2022. The direction was given to staff to include provisions to allow and regulate outdoor lounges with a proper setback from residential neighborhoods, including Resort Residential. The city recently (8/24/22) approved various municipal code revisions regarding cannabis licensing and operational requirements. At the same time, the city approved a resolution removing five provisions from the code and adopting them through a resolution, as the city has been doing with all code updates. Indio In 2022, the Indio City Council of Indio adopted an ordinance allowing a limited number of retail cannabis businesses. The limit was based on the City’s population and provided for one (1) store per 15,000 residents. The City of Indio began accepting cannabis applications on September 1, 2022. Instead of taxes, the City will require each business to enter into a community benefit agreement with the City that will provide a value equivalent to a 5 or 6% retail tax. Desert Hot Springs In February 2021, Desert Hot Springs lowered its cultivation tax from $25.50 per square foot for the first 3,000 square feet and $10.20 per square foot for each square foot over 3,000 square feet to a flat rate with allowance for minor adjustments. The current tax rate on cultivation is $10.20 per square foot. In December 2021, the City Council unanimously approved two measures to grow "canna tourism" in the area. One allows for the creation of cannabis "entertainment facilities," and the other gives hotels the green light to sell cannabis inside their properties. Later, in June 2022, the City approved an ordinance allowing cannabis entertainment facilities in the city's commercial downtown zoned district and the previously approved districts of the industrial and mixed-use corridor. 23Item 2C-26 Coachella The City of Coachella has the lowest retail sales tax for cannabis in the Coachella Valley at 6%. The City is not considering modifications to the tax rate. Palm Springs The City has not made any modifications to its cannabis ordinance since 2019. In 2019 Palm Springs adopted changes to the ordinance to reflect recreational cannabis use as it was now legal in the State. The City maintains a retail tax rate of 10% on cannabis sales. Riverside County Riverside County has not made any recent changes to its cannabis ordinances. The County implements a baseline fee structure ranging from $.50 PSF to $5.50 PSF for non-retail operations and $16.00 PSF to $20.00 for retail operations. It requires the cannabis operator to enter into a public benefits agreement to negotiate an additional fee. Each agreement describes the benefits that the commercial cannabis activity will provide to the local community, such as but not limited to, quantifiable employment for residents of the County, community contributions, funding for infrastructure, funding for additional Sheriff patrols, community clean-up or beautification programs, or economic incentives to the County. Current agreements are largely fee-based. A cannabis retail dispensary location of 2500-3000 square feet might range from $150,000 to $200,000, while a larger operation would be higher. SURVEY AND BUSINESSVISIT RESULTS A survey was created for each cannabis business addressing various areas to help identify industry trends and flag issues the City may be able to help address. A copy of the survey is included with this report as Attachment 2. Survey topics include a business overview, products, locations, employees and workforce training needs, customers, growth/expansion plans, suppliers, and comments on the City of Palm Desert. The survey results are identified for each question on the following pages. The responses are reported anonymously to protect the identity of the responders. The following section also identifies additional concerns and comments we received during our meetings with the businesses. 24Item 2C-27 25Item 2C-28 26Item 2C-29 27Item 2C-30 Participants identified an overall trend of reduced traffic and profits and were very concerned about the impact of taxes and fees across multiple levels of government. Regulations also are a concern and provide roadblocks in many areas, including advertising restrictions and financing limitations. The Black Market remains an area of concern for nearly all businesses. Competing by lowering prices was mentioned as the only way to fight the black market. Vertical integration was mentioned as the only way to help reduce operational costs. Palm Desert’s lack of legislation allowing lounges or onsite consumption, which was identified as an impediment to revenue growth. Liability and the question of ability to profit were issues raised associated with lounges. Industry consolidation is happening, and also businesses are leaving California. Financial viability is critical for survival. How our businesses can pivot to stay afloat is the question. General Issues of Concern Workforce & Training Survey Results 28Item 2C-31 Every business reported satisfaction with the city and shared an opinion that staff and leadership support their business, are professional, and efficient. They reported that the city communicates well with operators and takes a partnership-style approach. All cannabis companies value community involvement. They support the community in various ways, including sponsorship of the food bank and other local organizations, fund drives for the holidays, back-to-school fund drives, and involvement in organizations such as the Palm Desert Area Chamber of Commerce. The businesses indicated a continuing interest in community support and being open to suggestions. One is meeting with local charities now. One company works with seniors to erase the stigma of cannabis and show its benefits to them. A few commented that they feel it is essential that the city continue limiting dispensaries. Most businesses are planning to expand. Continued local growth of housing and expanding entertainment facilities to draw visitors are important factors supporting growth. Due to federal policies and abundant taxation, the lack of financial sources is a limitation. Businesses commented that keeping local limits on additional cannabis retail storefronts is important. Adding onsite consumption through lounges is an opportunity. There were requests to reduce taxes to at least be equal to the lowest competing city or county (no taxes) or implement a tax holiday. One business asked the city to explore social equity programs. Another suggestion is to explore how the City can help residents feel comfortable that cannabis work experience is viewed positively for future employment. One asked if the City could help with directional signage. A business asked if they could run a cannabis event at a park. One business mentioned looking into distribution licenses. One expressed concern that Riverside businesses claim they operate within the city when they don’t. A few asked questions about the process/city requirements for permits if the business relocates. Community Involvement, City Opinion, and Growth Outlook Summary and Interview Comments 29Item 2C-32 Workforce and Training Summary and Interview Comments The number of employees per business varied from 6 to 50. Some employees may serve other locations. Wages ranged from $15-$18/hour to over $20/hour. Types of positions included Budtender, experience specialist, cultivation, shift lead, manager, and distribution. Businesses typically don’t have problems recruiting, although cannabis was more difficult. Finding and developing soft skills is essential. The ages of employees varied, typically 26-40, but some businesses have younger workers, and some have older workers. Almost all the businesses responding to the survey indicated that approximately 20-50 percent of the workers live within the city limits. Businesses access a variety of training programs, and several companies reported managers taking higher education courses. Training institutions include the College of the Desert, UC Riverside, Green Flower Media, and Trichome Institute (Colorado). Retailers said the proper training could help the Buddtender ask the right questions of the shopper to recommend the right product. One manager teaches at COD: He works with College of the Desert as a subject matter expert. The program is offered through the College of the Desert's Partnership and Community Education (PaCE) program, with provides professional development, workforce training, and personal enrichment opportunities that contribute to the success and vitality of partners, clients, and learners. Product and Suppliers Survey Results 30Item 2C-33 31Item 2C-34 Products and Suppliers Summary and Visit Comments Most dispensaries have a wide variety of products. This includes flowers, gummies, vapes, pre-rolls, oils/tinctures, concentrates, and edibles. Some vendors travel to the desert weekly to provide products to the stores. One reported sourcing from San Bernardino. Customer and Revenue Trends Survey Results 32Item 2C-35 Revenue Trends Tourism impact 33Item 2C-36 Given the depth of the concern by the businesses about financial viability and the amount of local tax, staff reviewed the current tax level. It analyzed the impact of a variety of tax reductions as reflected in the following chart. The chart shows the estimated impact of reducing the current retail tax rate of 10% to 6%, analyzed in 1% increments, and based on estimated FY21/22 sales. The analysis shows an estimated annual reduction of $330,000 to $1.3 million. A decrease in tax rate from 10% to 8%, based on 21/22 estimated sales revenue, would result in a decrease in taxes of $660,000. A drop to 6% would result in a decrease of $1,320,000. It is possible that sales volume would increase from higher traffic or more stable prices if taxes are reduced. CONCLUSION Customer and Revenue Trends Summary and Interview Comments The first business in Palm Desert opened on 9/28/18. They reported that sales were strong during the COVID-19 pandemic. Still, purchasing patterns are changing as the pandemic wanes, with the average purchase amount per customer dropping since the summer and the threat of recession, and traffic lately being down. The customer base includes a variety of ages and from various locations, and it is ever- evolving: Age: Senior customers are a solid base core and typically have more purchasing power, but the number of younger customers is increasing. Businesses reported that all customers are becoming more price-driven and seeing increased price competition from lower tax rates in unincorporated areas and Indio. Tourist vs. Resident: Businesses reported varying quantities of tourists vs. residents. One business tracked customer sources and found that they draw customers from all 50 states. Some reported festivals did not significantly affect revenue; others said it did have a large effect. Businesses reported customers find their locations by using Google, Yelp, Apple Maps, Instagram, their website, Weedmaps, Iheartjane, Leafly, and Wheres Seed. 34Item 2C-37 35Item 2C-38 Appendices (Page Left Intentionally Blank) 36Item 2C-39 Attachment One 37Item 2C-40 38Item 2C-41 39Item 2C-42 40Item 2C-43 Attachment Two 41Item 2C-44 42Item 2C-45 43Item 2C-46 44Item 2C-47 45Item 2C-48 Item 2C-49 [This page has intentionally been left blank.] Page 1 of 9 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Richard Cannone, AICP, Director of Development Services Rosie Lua, Deputy Deputy Director of Development Services REQUEST: RECEIVE AND FILE INFORMATIONAL REPORT REGARDING POTENTIAL REGULATION OF CANNABIS CONSUMPTION AREAS, TEMPORARY SPECIAL EVENTS, AND OTHER RELATED AMENDMENTS RECOMMENDATION: 1.Receive and file informational report regarding potential regulation of cannabis consumption areas, temporary special events, and other related amendments. 2.Provide staff with direction on future actions related to these items. BACKGROUND/ANALYSIS: On October 17, 2017, City Council approved a Zoning Ordinance Amendment (ZOA 17-027) by Ordinance No. 1329, Chapter 25.34.120, 25.16 and 25.18 to allow Adult-Use Commercial Cannabis operations in the city of Palm Desert (City), subject to a Conditional Use Permit and established Chapter 5.101 “Commercial Cannabis Regulatory Permits” and Chapter 8.38 “Personal Use of Cannabis.” The ordinance further defined personal use to include “all personal use and possession of cannabis must be in compliance with “The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA).” MAUCRSA allows local jurisdictions to establish “reasonable regulations” to limit noxious impacts. Currently, the Cannabis ordinance mentions consumption for personal use of cannabis at private residential properties pursuant to Chapter 8.38 (Personal Use of Cannabis) of the Palm Desert Municipal Code (PDMC). The ordinance specifically restricts cannabis use and consumption in the following places: 1.Public places. 2.Locations where smoking tobacco is prohibited by the City’s ordinance. A.Unenclosed public places. B.Places of employment. C.Businesses. D.Common areas of multi-family residential properties owned by the City. 3.Within 1,000 feet of school grounds, day care centers, or youth centers. 4.City properties including parks and City-owned housing developments. In addition, the ordinance established the total number of regulatory permits allowed at the City to be limited to eleven (11) cannabis business uses: •Six (6) Retailers •Five (5) Manufacturers, Distributors, Cultivators, and Testing Item 2D-1 City of Palm Desert Commercial Cannabis Consumption Recommendations Page 2 of 9 Since adoption, the City of Palm Desert has approved eleven (11) Conditional Use Permits with concurrent Commercial Cannabis Regulatory permits; six (6) retailers and five (5) manufacturers, distributors, cultivators, and testing (two (2) of which are microbusinesses). All eleven (11) issued cannabis licenses remain active. To date, there are no known public safety concerns, public nuisances, or other issues with the City’s legal cannabis businesses. On May 12, 2022, a City Council Study Session was held and staff presented a thorough analysis of a request to study the land use of onsite cannabis consumption areas, more specifically "Lounges" (indoor and outdoor areas) and Special Commercial Cannabis Events, for temporary use. The City Council provided staff with direction to continue to study the land uses, performance standards, and business operation components and provide recommendations to amend the City’s Cannabis ordinance. State Legislation: On June 27, 2017, the State Legislature adopted Senate Bill No. 94 enacting MAUCRSA providing regulations for both medical and nonmedical cannabis uses. In addition, the California Business and Professional Code Sections 26054 and 26200 established regulations for Commercial Cannabis Activity consistent with local regulations affirming that counties and cities can under state law adopt ordinances that control, restrict, or ban the location and establishment of any Commercial Activity licensed under MAUCRSA. On-Site Consumption Business and Professions Code Section 26200(g) authorizes local jurisdictions to allow smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a retailer or microbusiness if all the following are met: 1) Access to the cannabis consumption area is restricted to persons 21 years of age or older; and 2) Cannabis consumption is not visible from any public place or nonage-restricted area; and 3) Sale or consumption of alcohol or tobacco is not allowed on the premises. The cannabis license types that allow onsite consumption are Retail Store (Type 10) and Microbusiness (Type 12). The state defines retail stores as those that have storefronts and are open to the public. For a microbusiness license, a licensee must engage in at least three (3) of the following cannabis business activities: • Cultivation (Up to 10,000 total square feet) • Distribution or distribution transport only • Manufacturer- use of non-volatile solvents, mechanical extractions, or infusion • Retail- storefront or non-storefront By state law the hours of operation for Cannabis Retailers are limited between 6:00 a.m. and 10:00 p.m. but does not limit hours related to onsite consumption. Therefore, the onsite consumption hours are within the authority of the local jurisdiction. Item 2D-2 City of Palm Desert Commercial Cannabis Consumption Recommendations Page 3 of 9 Temporary Events MAUCRSA authorizes the Department of Cannabis Control (DCC) to issue a state temporary event license to a licensee authorizing onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair or district agricultural association event, or at another venue expressly approved by a local jurisdiction. To host a cannabis event, you must have two state licenses: 1. A cannabis event organizer license 2. A temporary cannabis event license (license must be obtained at least 60 days before the event starts). Only retailers can sell cannabis and cannabis use cannot be visible from outside of the event or any areas that are not age restricted. Events are limited to a maximum of four (4) days. Additionally, AB 2210 signed into law on September 18, 2022, that DCC is prohibited from denying an application for a state temporary event license solely on the basis that there is a license issued pursuant to the Alcoholic Beverage Control Act for the proposed premises of the event. It also prohibits the DCC from taking disciplinary action against a person licensed pursuant to the Alcoholic Beverage Control Act on the basis of a state temporary event license issued by the DCC to a licensee that utilizes the same premises. AB 2210 requires all on- and off-sale privileges of alcoholic beverages at the venue to be suspended for the day of the event until 6:00 a.m. on the day after the event has ended. Additionally, AB2210 prohibits all alcohol consumption on the venue premises for the day of the event, until 6:00 a.m. on the day after the event has ended. All inventory of cannabis or cannabis products to be sold by a state temporary event licensee must be transported to and from the temporary event by a licensed distributor or licensed microbusiness. A state temporary event licensee, upon completion or cessation of the temporary event, is authorized to reconcile unsold inventory of cannabis or cannabis products and return it to the licensee’s retail premises. Comparative Analysis: To better understand the permitting regulations and approval process, staff conducted a survey of several municipalities throughout California with a focus on six (6) municipalities within the Coachella Valley that permit retail cannabis sales and summarized those results below in Table 1. The results showed the consistency of jurisdictions allowing smoking, vaping, and ingestion as permitted consumption types all within an indoor area with the exception Desert Hot Springs. In addition, the research conducted showed that of the six cities within the Coachella Valley: • 2 cities require a separate license or approval for on-site consumption, • 2 cities permit on-site consumption as part of the retail license • 1 city requires both a conditional use permit and regulatory permit • 1 prohibits retail and microbusinesses from having onsite consumption Table 1. On-Site Consumption Comparative Analysis Municipality & (Year Adopted) Separate License or Approval Required Types of consumption permits Indoor or Outdoor Item 2D-3 City of Palm Desert Commercial Cannabis Consumption Recommendations Page 4 of 9 Cathedral City (2018) No, permitted as part of a retail license only Smoking, vaping, and ingestion Indoor Coachella (2018) Yes, onsite consumption permit if retail license in good standing; Administrative approval Smoking, vaping, and ingestion Indoor Desert Hot Springs (2021) Permitted as Marijuana Entertainment Facility, Marijuana Hotel Facilities, or Storefront Retail; both Conditional Use and Regulatory Permit approvals required Administrative approval if state law changes and “infused” products or alcohol sales are permitted to be sold. Smoking, vaping, and ingestion Indoor & Outdoor Indio (2022) No, permitted as a part of retail license Smoking, vaping, and ingestion Indoor Palm Springs (2018) Yes, Administrative approval. Also allows for standalone “lounge” with retail sales Smoking, vaping, and ingestion Indoor Unincorporated Riverside County (2017) Does not permit on-site consumption at retail or microbusinesses. Table 2 provides a summary for the same municipalities regarding Temporary Cannabis Events and vary greatly from sales only, where they are permitted, and outdoor odor control, or not permitting them at all. Table 2. Comparative Analysis – Temporary Cannabis Events MUNICIPALITY & (YEAR ADOPTED) ALLOWED SPECIFIC LIMITATIONS OR RESTRICTIONS Cathedral City (2018) Yes None Coachella (2018) Yes Sales only, cannabis consumption prohibited Desert Hot Springs (2017) No Indio (2022) No Palm Springs (2018) Yes An Odor Control Plan demonstrating that no cannabis odor will be present outside of the perimeter of the event Unincorporated Riverside County (2017) Yes Limited to County Fair property or District Agricultural Association property Policy Direction/Considerations Staff has separated the policy considerations into two categories: (A) On-Site Consumption Areas (Cannabis Lounges) with three (3) related policy considerations and staff’s recommendation; and Item 2D-4 City of Palm Desert Commercial Cannabis Consumption Recommendations Page 5 of 9 (B) Temporary Cannabis Events with one (1) policy consideration and staff’s recommendation. (A) On-Site Consumption Areas (Cannabis Lounges) 1. Facilities and Onsite Consumption Types A. Should the six (6) Retail Facilities and two (2) Microbusinesses (with retail) be permitted to have an onsite consumption area (smoking, vaping, ingestion) as an ancillary use? Staff’s Recommendation: I. Yes, subject to additional permitting and development/ performance standards further detailed below in Item 2. Required Permits. a) Staff would like to note that in addition to amending the City’s Cannabis regulations, an amendment to Section 8.36.070 Exceptions [from Smoking Prohibitions] would be required. Existing exceptions include: “Private offices, including those in the workplace, designated areas of hotels and motels, areas and rooms while in use for private social functions, private hospital rooms, psychiatric facilities, jails, bar areas, and stores that deal exclusively in tobacco products and accessories.” II. Staff also recommends the following additional “qualifications” as a prerequisite to apply, in addition to having an existing active Retail or Microbusiness (with retail) License: a) Designated Area will need to be deemed acceptable by staff. b) Must be in good standing with their business license, tax payments to the City, Cannabis Regulatory Permit, and state regulations. 2. Required Permits A. Should onsite consumption be permitted through a separate “Cannabis Onsite Consumption Permit” granted by the City Manager? OR B. Should a Major Amendment to the Conditional Use Permit be required in addition to a “Cannabis Onsite Consumption Permit”? Staff’s Recommendation: Item 2D-5 City of Palm Desert Commercial Cannabis Consumption Recommendations Page 6 of 9 I. Staff recommends 2.A for existing retail and microbusinesses that provide for the onsite consumption area with the same footprint as the licensed premise. a) A separate “Cannabis Onsite Consumption Permit” approved by the City Manager is recommended. b) This permit will be distinguished from the “Commercial Cannabis Regulatory permits.” The “Cannabis Onsite Consumption Permit” will regulate the onsite consumption portion of the use which will have its own qualifications, performance standards, and business operation limitations. c) The local control of this permit will allow the City to remove/disqualify a permittee if there are violations without removing the Commercial Cannabis Regulatory Permit which allows them to sell for retail purposes. II. Staff recommends 2.B for existing retail and microbusinesses that propose an increase in gross square feet of their existing licensed premise. III. Staff further recommends the following development/performance standards: a) Cannabis consumption areas shall be well ventilated private areas that are partitioned off from access to all other areas of the retail or microbusiness establishment and are designed to prevent the flow of smoke to any other area of the establishment. b) Odor Control Plan and Equipment required: i. Well ventilated private areas that are partitioned off from access to all other areas of the retail establishment and designed to prevent the flow of smoke to any other area of the establishment. ii. An odor absorbing ventilation and exhaust system must be installed so that odor generated inside the business is not detected outside the property or lease area boundaries, or anywhere on adjacent property or public rights-of-way, or within any other unit located within the same building as the cannabis use. c) Cannot be visible to the public d) Minimum and maximum square footages; staff wants to ensure that the onsite consumptions areas are not converted storage areas/ closets. e) Additional parking standards; similar to a restaurant at eight (8) spaces per 1,000 square feet. IV. Staff further recommends the following operational standards/limitations: a) Must be 21 years of age or older. b) Sale of Alcohol & Tobacco prohibited as required by State Law. c) Cannabis consumption areas shall have a responsible person on the Item 2D-6 City of Palm Desert Commercial Cannabis Consumption Recommendations Page 7 of 9 premises to act as manager and supervise employees at all times during business hours. d) Provide for standards related to over consumption to patrons. e) Employee Training and Customer Education including: i. The business shall train their employees about the various products the consumption area sells, including potency of the products, absorption time, and effects of the products. ii. Employees shall educate all customers on the effects of cannabis to ensure responsible consumption. iii. Cut off service to impaired patrons and provide information on car services. iv. Only trained employees can serve cannabis products. f) No outside cannabis products allowed for consumption. g) Non-alcoholic drinks and pre-packaged foods may be sold within consumption areas. h) Vaping shall be limited to single use products or allow provision for sale or use of consumption instruments. i) Cannabis and cannabis goods must remain in originally sealed and unopened packaging or be transferred by the Operator for repackaging in a container that is compliant with all applicable state laws and regulations. j) Permit the rental/use of smoking device if sanitation measures are met. k) Consumption area must close 60-minutes prior to retail closing (No later than 9:00 p.m.) and eliminate “last call.” 3. Designated Consumption Area A. Should onsite consumption areas be restricted to only indoor areas? Staff’s Recommendation I. Yes, consumption areas must be indoors, however, staff recommends that outdoor seating areas be allowed, but the consumption of any cannabis is prohibited. a. This is consistent with the comparative analysis. As technology advances, this item could be reconsidered at a future date should City Council desire. (B) Temporary Cannabis Events 1. Temporary Events B. Should Cannabis Temporary Events be permitted within the City and if so, what restrictions should be included? Staff’s Recommendation Item 2D-7 City of Palm Desert Commercial Cannabis Consumption Recommendations Page 8 of 9 I. No, if businesses are permitted to have onsite consumption areas staff does not believe a Temporary Cannabis Event permit is needed for onsite consumption or sales in an outdoor setting. a. It should be noted that a “Consumption Lounge” may have entertainment with an approved Entertainment Site Plan such as live music etc. but ANY consumption of cannabis outside the licensed consumption area would be prohibited. Executive Summary: After thorough review of the comparative analysis of cannabis regulations of several municipalities throughout California, along with City Council initial direction from the May 12, 2022, study session, staff has outlined policy considerations for: (A) Onsite Consumption Areas (Cannabis Lounges) (B) Temporary Cannabis Events onsite consumption of cannabis and allowing “Temporary Cannabis Event permits.” As a result of this analysis, staff recommends the following as the basis for municipal code updates should the City Council direct staff to do so: 1. Allow the six (6) Retail Facilities and (2) Microbusinesses (with retail) to be permitted to have an onsite consumption area (smoking, vaping, ingestion) as an ancillary use subject to additional permitting and development/performance standards. 2. Permit onsite consumption areas through a separate “Cannabis Onsite Consumption Permit” granted by the City Manager. 3. Require a major amendment to the Conditional Use Permit for businesses increasing square footage of a licensed premise in addition to the “Cannabis Onsite Consumption Permit”. 4. Restrict onsite consumption areas to indoor areas. 5. Prohibit Temporary Cannabis Events within the City. Strategic Plan: The recommendations to amend the Cannabis Ordinance identifies priorities in the City’s Strategic Plan, including the following: 1. Economic Development Priority No. 1: Expand job and business creation opportunities. 2. Land use, Housing & Open Space Priority No. 5: Utilize progressive land use policies and standards to support ongoing and future needs. Public Input: There were no comments received as of the completion of this staff report. However, staff did meet with the business owner of West Coast Cannabis to get a better understanding of their operations and if permitted, where an onsite consumption area would be incorporated within their existing facility at Melanie Place. FINANCIAL IMPACT: Item 2D-8 City of Palm Desert Commercial Cannabis Consumption Recommendations Page 9 of 9 On December 13, 2017, City Council approved the establishment of the tax on cannabis businesses operating within the City of Palm Desert by Ordinance No. 1339 adding provisions to the Palm Desert Municipal Code Chapter 3.50. REVIEWED BY: Department Director: Richard Cannone, AICP Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENTS 1. PowerPoint Presentation Item 2D-9 ON-SITE CANNABIS CONSUMPTION AREAS (CANNABIS LOUNGES) & TEMPORARY CANNABIS EVENTS POLICY DISCUSSION -REGULATORY FRAMEWORK CITY COUNCIL MEETING OCTOBER 27, 2022 Item 2D-10 May 12, 2022 -Study Session Cannabis Lounges Consider Cannabis Lounges for on-site for existing cannabis retailers Temporary Events Consider temporary events with on-site consumption Background 10/27/2022 AGENDA ITEM 2.D 2Item 2D-11 •Overview of State Cannabis Laws o On-Site Consumption o Temporary Events •Eligible Palm Desert Cannabis Businesses •Coachella Valley Cities –Comparative Research •Considerations & Staff Recommendations •Policy Direction Policy Discussion –Regulatory Framework 10/27/2022 AGENDA ITEM 2.D 3Item 2D-12 10/27/2022 AGENDA ITEM 2.D 4 State Law -Cannabis On-Site Consumption Business and Professions Code Section 26200(g) Local jurisdictions may allow for the smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a retailer or microbusiness if all the following are met: 1.Access to the area where cannabis consumption is allowed is restricted to persons 21 years of age or older. 2.Cannabis consumption is not visible from any public place or nonage-restricted area. 3.Sale or consumption of alcohol or tobacco is not allowed on the premises. In order to hold a microbusiness license, a licensee must engage in at least three of the following cannabis business activities: Retailer Non-Storefront Cultivation (less than 10,000 sq. ft.) Distributor Transport Only Manufacturer (Level 1, Type 6) Item 2D-13 State Law –Temporary Events Business and Professions Code Section 26200(e) •MAUCRSA authorizes the DCC to issue a state temporary event license to a licensee authorizing onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair or district agricultural association event, or at another venue expressly approved by a local jurisdiction. •To host a cannabis event, you must have two state licenses: 1.A cannabis event organizer license 2.A temporary cannabis event license (you must get this at least 60 days before the event starts) •Max 4 consecutive days •Only Licensed Retailers can sell cannabis •Cannabis use cannot be visible from outside of the event or any areas that are not age- restricted. 10/27/2022 AGENDA ITEM 2.D 5Item 2D-14 Eligible Cannabis Businesses Palm Desert adopts Ordinances (2017) allowing limited cannabis business uses: •6 retailers •5 manufacturers, distributors, cultivators, and testing [2 microbusiness] •No known public safety, public nuisance, or other issues to-date with the City’s legal cannabis businesses 8 businesses could be “eligible” under state law to have on-site consumption (Retail Lounge): •6 Retail Dispensaries •2 Microbusinesses 10/27/2022 AGENDA ITEM 2.D 6Item 2D-15 10/27/2022 AGENDA ITEM 2.D 7 ​Municipality & (Year Adopted) Separate License or Approval Required​Consumption Types​Indoor or Outdoor​Temporary Events Cathedral City (2018)​No, permitted as part of a retail license only​ Smoking, vaping, & ingestion​ Indoor​Yes Coachella (2018)​Yes, onsite consumption permit if in good standing;Administrative approval​ Smoking, vaping, & ingestion​ Indoor​Yes, Sales only Desert Hot Springs (2021) Yes, Marijuana Entertainment Facility, Marijuana Hotel Facilities, or Storefront Retail; both Conditional Use and Regulatory Permit approvals required Administrative approval if state law changes and “infused” products or alcohol sales are permitted to be sold. Smoking, vaping, & ingestion​ Indoor & Outdoor No Indio (2022)​No, permitted as a part of retail license​Smoking, vaping, & ingestion​ Indoor​No Palm Springs​ (2018)Yes, Administrative approval​​. Also allows for standalone “lounge” with retail sales Smoking, vaping, & ingestion​ Indoor​Yes, no cannabis odor outside of the perimeter of the event Unincorporated Riverside County (2017) On-Site Consumption Prohibited​ Yes, Limited to County Fair property or District Agricultural Association property Coachella Valley Cities –Comparative Research Item 2D-16 10/27/2022 AGENDA ITEM 2.D 8 As detailed in the staff report, staff recommends the following as the basis for municipal code updates should the City Council direct staff to do so: 1.Allow the six (6) Retail Facilities and (2) Microbusinesses (with retail) to be permitted to have an onsite consumption area (smoking, vaping, ingestion) as an ancillary use subject to additional permitting and development/performance standards. 2.Permit onsite consumption areas through a separate “Cannabis Onsite Consumption Permit” granted by the City Manager. 3.Require a major amendment to the Conditional Use Permit for eligible businesses increasing square footage of a licensed premise in addition to the “Cannabis Onsite Consumption Permit”. 4.Restrict onsite consumption areas to indoor areas. 5.Prohibit Temporary Cannabis Events within the City. Staff Recommendations Item 2D-17 10/27/2022 AGENDA ITEM 2.D 9 Policy Direction –Staff Recommendations Onsite Consumption 1. Facilities and Onsite Consumption Types A.Should the six (6) Retail Facilities and two (2) Microbusinesses (with retail) be permitted to have an onsite consumption area (smoking, vaping, ingestion) as an ancillary use as recommended by staff? 2.Required Permits A.Should onsite consumption be permitted through a separate “Cannabis Onsite Consumption Permit” granted by the City Manager as recommended by staff? B.Should a Major Amendment to the Conditional Use Permit be required for businesses increasing square footage of a licensed premise in addition to a “Cannabis Onsite Consumption Permit”as recommended by staff? 3.Designated Consumption Area A.Should onsite consumption areas be restricted to only indoor areas as recommended by staff? Temporary Events 1. Temporary Cannabis Events A.Should Temporary Cannabis Events be prohibited within the City as recommended by staff? Item 2D-18 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Eric Ceja, Director of Economic Development Deborah Glickman, Management Analyst REQUEST: ADOPT RESOLUTION DECLARING SIX PARCELS AT THE NORTHEAST CORNER OF FRED WARING DRIVE AND SAN PABLO AVENUE IN PALM DESERT ARE NOT SURPLUS LAND FOR PURPOSES OF THE SURPLUS LAND ACT RECOMMENDATION: Adopt Resolution declaring Assessor’s Parcel Numbers (APN) 627-101-002 (.35 acres), 627- 101-017 (.20 acres), 627-101-033 (.25 acres), 627-101-061 (.46 acres), 617-101-062 (.17 acres), and Right of Way (.11 acres), Palm Desert, are not Surplus Land for purposes of the Surplus Land Act. BACKGROUND/ANALYSIS: On March 14, 2019, the City of Palm Desert entered into an Exclusive Negotiation Agreement (ENA) with Chandi Group USA, Inc. (Chandi) for the sale of six (6) City-owned parcels listed above. The sale of the properties is for the development of a mixed-use commercial center consisting of sixty (60) residential units (34 one-bedrooms, 24 two-bedrooms, and 2 three- bedrooms) above approximately 14,000 square feet of retail (Project). In order to dispose of properties, the City is required to follow the Surplus Land Act (SLA) Government Code Sections 54220-54234 (SLA) and its April 2021 SLA Guidelines (Guidelines). The SLA and Guidelines generally require that a local agency sell property through a Notice of Availability followed by negotiation processes that favor affordable housing. However, the SLA and Section 103 of the Guidelines allow for exceptions to this standard SLA process. Specifically, pursuant to Section 54234(a) of the SLA, if a local agency has entered into an ENA to dispose of property before September 30, 2019, the provisions of the SLA as it existed on December 31, 2019, shall apply, without regard to the changes made to the SLA by Assembly Bill 1486 and all subsequent amendments to the SLA (Prior Act), so long as the disposition is completed no later than December 31, 2022. The disposition of the above APNs is in line with this provision because the ENA with Chandi was entered into prior to September 30, 2019, and the disposition and development agreement with Chandi provides for the disposition of the properties on or prior to December 14, 2022. The attached Resolution contains findings that the APNs are not surplus land under the Prior Act because the properties are necessary for the City’s use in that the sale of the properties to Chandi and the development of the Project thereon create an economic opportunity for the benefit of the City. Once approved by the City Council, the Resolution must be provided to the California Department of Housing and Community Development (HCD) for review and approval at least 30 days prior to disposition of the City-owned parcels. HCD will have thirty (30) days from receipt Item 2E-1 City of Palm Desert Resolution – NE Corner of Fred Waring Drive and San Pablo Avenue Page 2 of 2 of the Resolution to determine whether the proposed APNs are exempt from further requirements of the SLA. Project Description: As set forth above, staff is seeking the City Council’s declaration of the City-owned parcels as not surplus for the purposes of the SLA. The details of the City of Palm Desert owned properties include the following: APN Size (acres) Zoning Property Description General Plan Designation 627-101-002 .35 Downtown Edge Vacant Land Downtown 627-101-017 .20 Downtown Edge Vacant Land Downtown 627-101-033 .25 Downtown Edge Vacant Land Downtown 627-101-061 .46 Downtown Edge Vacant Land Downtown 617-101-062 .17 Downtown Edge Vacant Land Downtown ROW .11 Downtown Edge Vacant Land Downtown Environmental Review: The City reviewed the proposed project pursuant to the California Environmental Quality Act (CEQA) and CEQA Guidelines (California Code of Regulations, Title 14, Section 15000, et seq.) and has found that the project is exempt from review under Class-32 infill exemption as set forth under the Existing Approvals, which satisfies CEQA for purposes of this project. FINANCIAL IMPACT: There is no financial impact related to this Resolution. The purchase price of $940,000 is due to the City upon close of escrow. REVIEWED BY: Department Director: Eric Ceja City Attorney: Robert Hargreaves Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENTS: 1. Resolution 2. Map of Properties Item 2E-2 RESOLUTION NO. _____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT DECLARING PURSUANT TO GOVERNMENT CODE SECTION 54234(a)(1) THAT CERTAIN REAL PROPERTY OWNED BY THE CITY LOCATED AT THE NORTHEAST CORNER OF FRED WARING DRIVE AND SAN PABLO AVENUE IN THE CITY IS NOT SURPLUS LAND; AND TAKING RELATED ACTIONS WHEREAS, the City of Palm Desert (“City”) is the owner in fee simple of that certain vacant real property, which totals approximately 1.54 acres in size, and which is located in the City at the northeast corner of Fred Waring Drive and San Pablo Avenue and identified as Assessor’s Parcel Nos. 627-101-002, 627-101-017, 627-101-033, 627-101-061, 617-101- 062, and ROW (“City Parcels”); and WHEREAS, pursuant to Section 54234(a) of Surplus Land Act, Government Code Sections 54220-54234, (the Act), if a local agency, as of September 30, 2019, has entered into an exclusive negotiating agreement to dispose of property, the provisions of the Act as it existed on December 31, 2019, shall apply, without regard to the changes made to the Act by Assembly Bill 1486 and all subsequent amendments to the Act, (the “Prior Act”) to the disposition of that property to the party that had entered into such exclusive negotiating agreement or its successors and assigns, provided the disposition is completed not later than December 31, 2022; and WHEREAS, on March 14, 2019, the City entered into an exclusive negotiating agreement (“ENA”) with Chandi Group USA, Inc. (“Chandi”) for the negotiation of a disposition and development agreement providing for the sale of the City Parcels to Chandi and the development by Chandi thereon of a lifestyle commercial center consisting of sixty (60) residential units above approximately 14,000 square feet of retail (the “Project”); and WHEREAS, the City now intends to sell the City Parcels to Chandi pursuant to a disposition and development agreement that provides for the disposition of the City Parcels to Chandi on our prior to December 14, 2022, and the development of the Project on the City Parcels by Chandi; and WHEREAS, the Prior Act applies to the disposition of the City Parcels as long as the disposition is completed by December 31, 2022; and WHEREAS, under the Prior Act, surplus land is land owned by a local agency that is determined to be no longer necessary for the agency’s use; and WHEREAS, the Prior Act did not define “agency’s use” or deem land to not be necessary for agency’s use if the land is disposed of for commercial uses; and WHEREAS, the City Parcels are necessary for the City’s use because the sale of the City Parcels to Chandi and the development of the Project thereon is for the purpose of creating economic opportunity in that the disposition and development agreement creates, expands or retains new jobs and increases property tax revenues; and Item 2E-3 RESOLUTION NO. ______ -2- P6401-0001\2718935v1.doc WHEREAS, because the City Parcels are necessary for the City’s use, the City Parcels are not surplus land under the Prior Act and the disposition is not subject to the Prior Act; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, as follows: SECTION 1. The above recitals are true and correct and are a substantive part of this Resolution. SECTION 2. The City Council hereby finds that because the City and Chandi entered into the ENA prior to September 30, 2019, the Prior Act applies to the disposition of the City Parcels provided the disposition is completed by December 31, 2022. SECTION 3. The City Council hereby further finds that the City Parcels are necessary for the City’s use and are not surplus land under the Prior Act because the disposition and development agreement for the sale of the City Parcels and the development of the Project on the City Parcels creates an economic opportunity for the benefit of the City. SECTION 4. This Resolution has been reviewed with respect to the applicability of the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) (“CEQA”). Staff has determined that the property is surrounded by existing urban development, is under 5-acres in size, complies with the General Plan, and does not have the potential for creating a significant effect on the environment and is therefore exempt from further review under CEQA pursuant to State CEQA Guidelines (California Code of Regulations, Title 14, Section 15000, et seq.) and has found that the project is exempt from review under Class-32 infill exemption as set forth under the Existing Approvals, which satisfies CEQA for purposes of this project. SECTION 4. The City Clerk is directed to file a Notice of Exemption pursuant to CEQA Guidelines Section 15062. SECTION 5. Staff of the City are hereby authorized and directed to provide a copy of this Resolution to the California Department of Housing and Community Development (“HCD”) in the form and manner required by HCD at least 30 days prior to the disposition of the City Parcels. SECTION 6. The officers and staff of the City are hereby authorized, jointly and severally, to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution, and any such actions previously taken are hereby ratified and confirmed. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California on this ___ day of ______, 2022 by the following vote: AYES: Item 2E-4 RESOLUTION NO. ______ -3- P6401-0001\2718935v1.doc NOES: ABSENT: ABSTAIN: ________________________________ JAN C. HARNIK, MAYOR ATTEST: __________________________________ ANTHONY J. MEJIA, CITY CLERK CITY OF PALM DESERT, CALIFORNIA Item 2E-5 APN: 627101033 APN: 627101061 APN: ROW APN: 627101002 APN: 627101017 APN: 627101062 APN: 627101033 APN: 627101061 APN: ROW APN: 627101002 APN: 627101017 APN: 627101062 Date: 1/31/2019 I VICINITY MAP APN(s) 627-101-002, 017, 033, 061, 062 & ROW westerly of 061, 062 of size ~4,672sf City Owned 1.54 Acres Item 2E-6 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Anthony J. Mejia, City Clerk REQUEST: INTRODUCTION OF AN ORDINANCE AMENDING PALM DESERT MUNICIPAL CODE SECTION 2.36.060 REGARDING THE PLACEMENT OF ITEMS ON MEETING AGENDAS AND A PROCESS FOR MEMBERS OF THE CITY COUNCIL TO SPONSOR AGENDA ITEMS RECOMMENDATION: Waive further reading and pass to second reading an Ordinance amending Palm Desert Municipal Code Section 2.36.060 regarding the placement of items on meeting agendas and a process for members of the City Council to sponsor agenda items. BACKGROUND/ANALYSIS: On November 18, 2021, the City Council adopted Ordinance No. 1371 updating Palm Desert Municipal Code (PDMC) Section 2.36.060 regarding a process for members of the City Council to sponsor agenda items. Ordinance No. 1371 enacted the following process: “A topic will be included on the agenda upon request made by any Council member in open meeting when supported by at least one other Council member. Staff may seek clarification of topic scope from the requesting Council members, to be supplied in writing. The item will normally be heard no sooner than the second meeting after the request and any needed clarification.” The City Council previously appointed Mayor Harnik and Councilmember Kelly to review City Council Rules of Procedure. The Subcommittee recommends an update to PDMC 2.36.060 to implement the following procedures related to the placement of items on meeting agendas and a process for members of the City Council to sponsor agenda items: (a)The City Manager shall be responsible for scheduling agenda items for City Council meetings. (b)A councilmember may request staff to agendize an item for a future city council meeting or study session during the “Requests for Action” portion of the agenda. The request must receive support from a majority of the city council, which includes the requesting councilmember, to go forward with the placement of the item on an agenda. The city manager may seek clarification from the city council on the topic scope by scheduling a preliminary discussion if needed. The item will normally be heard no sooner than the second meeting after the initial request or any needed clarification. Item 2F-1 City of Palm Desert Placement of Items on Meeting Agendas Page 2 of 2 FINANCIAL IMPACT: No fiscal impact is associated with this matter. REVIEWED BY: City Clerk: Anthony J. Mejia City Attorney: Robert Hargreaves Finance Director: Veronica Chavez Assistant City Manager Chris Escobedo City Manager: Todd Hileman ATTACHMENTS: 1. Draft Ordinance Item 2F-2 ORDINANCE NO. ____ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE SECTION 2.36.060 REGARDING THE PLACEMENT OF ITEMS ON MEETING AGENDAS AND A PROCESS FOR MEMBERS OF THE CITY COUNCIL TO SPONSOR AGENDA ITEMS WHEREAS, the City Council desires to update its process for the placement of items on meeting agendas and a process for members of the City Council to sponsor agenda items. THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Palm Desert Municipal Code Section 2.36.060 shall be replaced in its entirety to read as follows: “Section 2.36.060, Placement of Items on Meeting Agendas: In order to facilitate the orderly conduct of the business of the city council, the city clerk shall be notified no later than twelve noon Wednesday, eight days preceding a regular council meeting, of all reports, communications, ordinances, resolutions, contract documents or other matters to be submitted to the city council at such meeting. All matters shall be in proper form for city council action at the time they are submitted to the city clerk. Immediately thereafter, the city clerk shall arrange a list of such matters according to the order of business and furnish each member of the city council, the city manager and city attorney, and each department head, with a copy of the same prior to the council meeting and as far in advance of the meeting as time for preparation will permit. No matters other than those on the agenda shall be finally acted upon by the city council unless a member of the city council, the city manager, or city attorney so requests. Any matter to be acted on not otherwise on the agenda and not posted at least seventy-two hours before such regular meeting, shall be placed on the agenda for action only in accordance with Section 54954.2(b) of the Government Code. Any item upon which action is proposed to be taken and a request for consideration to place on the agenda in accordance with the aforementioned Government Code Section, shall be provided to all members of the city council, the city manager and city attorney, as early as possible prior to said meeting. A topic will be included on the agenda upon request made by any Council member in open meeting when supported by at least one other Council member. Staff may seek clarification of topic scope from the requesting Council members, to be supplied in writing. The item will normally be heard no sooner than the second meeting after the request and any needed clarification. Item 2F-3 Ordinance No. _____ Page 2 (a) The city manager shall be responsible for scheduling agenda items for city council meetings. (b) A councilmember may request staff to agendize an item for a future city council meeting or study session during the “Requests for Action” portion of the agenda. The request must receive support from a majority of the city council, which includes the requesting councilmember, to go forward with the placement of the item on an agenda. The city manager may seek clarification from the city council on the topic scope by scheduling a preliminary discussion if needed. The item will normally be heard no sooner than the second meeting after the initial request or any needed clarification.” SECTION 2. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in the Desert Sun, a newspaper of general circulation published and circulated in the City of Palm Desert, California, and shall be in full force and effect thirty (30) days after its adoption. SECTION 3. The last section is always followed by the following verbiage. ADOPTED ON ________________, 20___. JAN C. HARNIK MAYOR ATTEST: ANTHONY J. MEJIA CITY CLERK Item 2F-4 Ordinance No. _____ Page 3 I, Anthony J. Mejia, City Clerk of the City of Palm Desert, California, do hereby certify that Ordinance No. ____ is a full, true, and correct copy, and was introduced at a regular meeting of the Palm Desert City Council on _________, 20___, and adopted at a regular meeting of the City Council held on __________, 20___, by the following vote: AYES: NOES: ABSENT: ABSTAIN: RECUSED: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Desert, California, on ______________, 20___. ANTHONY J. MEJIA CITY CLERK Item 2F-5 [This page has intentionally been left blank.] Item 2F-6 Page 1 of 4 CITY OF PALM DESERT STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Richard D. Cannone, AICP, Development Services Director REQUEST: AWARD A CONTRACT TO DECKARD TECHNOLOGIES, INC. FROM SAN DIEGO, CALIFORNIA, FOR SHORT-TERM RENTAL MONITORING, COMPLIANCE, ENFORCEMENT, AND TAX COLLECTION SERVICES IN THE INITIAL ANNUAL AMOUNT OF $69,400 RECOMMENDATION: 1. Award contract to Deckard Technologies Inc. of San Diego, California, for Short-term Rental Compliance Services in the amount of $69,400 for a term of one-year with an option to renew four (4) additional one-year periods based on satisfactory performance. 2. Authorize City Manager or designee to negotiate and/or take any necessary actions to facilitate the agreement, to execute the agreement and any documents necessary to effectuate the actions taken herewith. Funds are available in Account No. 1104470-4309000. BACKGROUND/ANALYSIS: The City’s short-term rental (STR) monitoring and compliance program was launched in April 2018 when City Council awarded a contract to Bear Cloud Software for short-term rental compliance. This contract included an option to renew for two (2) additional one-year terms and was extended both times. During that same timeframe, Bear Cloud Software was acquired by Host Compliance, LLC, which was later acquired by Granicus, LLC. The third extension (with Granicus, LLC) of the initial contract expired on June 30, 2021. Prior to the expiration of the initial contract, a Request for Proposals (RFP) was released in April 2021 soliciting bids for STR Monitoring and Enforcement that focused on the following: • The creation of a STR database. • Differentiation between enforcement and monitoring activities. • Providing an easy-to-use interface for City staff to search the STR database. • The operation of a 24-hour, 365-day (24/7) hotline services with a live person for reporting alleged violations. • Links to online advertisements or postings for the STRs. The City Council awarded a nine-month contract to Granicus, LLC for STR Monitoring and Enforcement with the option for two (2) additional one-year renewal terms in August 2021. The committee’s recommendation to continue with Granicus, LLC was primarily due to the success of the 24/7 hotline and their response to the RFP, which included the automation of administrative tasks that staff was completing manually. At that meeting, the City Manager stated that staff would closely monitor the performance of Granicus and, if the service was not as expected, a new vendor would be sought. Item 2G-1 City of Palm Desert Award of 2022-RFP-133 – STR Compliance & Monitoring Page 2 of 4 While the 24/7 hotline was a successful component of the contract, other areas have been a challenge for staff and customers, such as: • Customers are not able to update their phone number, email, or property manager in the registration portal. • Inconsistent monitoring/scraping of websites identifying unlicensed STRs. • Inability to tie online payments with the STR registration number or address. • Inability to provide an expiration or issue date on the registration portal. • Dashboard/Portal is not user-friendly. • Too much staff intervention trying to assist customers with new/renewal applications. • Granicus staff were not very responsive to issues reported by staff or customers. • Failure to receive requested reports in an exact and timely fashion after multiple requests. • City staff not aware if customers were directed to the City of Palm Desert website for more STR information and Transit Occupancy Tax (TOT) Return forms, etc. • Allocating a significant amount of staff time to assisting customers with trying to reach and resolve issues with their registrations and/or payments. As a result, it was determined that the City should solicit competitive proposals from qualified firms for a new contract to ensure the City has access to the most comprehensive and effective services and to provide for a synergistic approach to managing the City’s STR program for all departments involved. The contract with Granicus was extended for six (6) months to provide assurance to STR operators, staff, and the community that the City would not have a gap in coverage during the timeframe that the solicitation would be released until a new firm is selected. The contract extension with Granicus expires on December 31, 2022. Staff from Development Services, Finance, and Information Technology collaborated to develop a comprehensive scope of services for RFP No. 2022-RFP-133 to solicit proposals and identify the most qualified firm to provide a new contract. The scope of services included an optional TOT collection component so that customers could remit payments related to their STR in one portal. Notices announcing the availability of the RFP were distributed via the City’s online bid system, OpenGov Procurement. Additionally, a conflict-of-interest section was included in the RFP (and the contract) ensuring “no person, officer, or employee performing services for the City in connection with the establishment of any agreements resulting from this solicitation, shall have a financial or other personal interest with any short-term rental platform, operator, or property owner.” A mandatory pre-proposal meeting was held on August 4, 2022, and a total of four (4) firms attended that meeting, and all four submitted proposals that included the following: • Avenu Insights & Analytics • Deckard Technologies, Inc. • GovOS • Granicus A review panel consisting of subject matter experts from Finance, Information Technology, Economic Development, and Development Services reviewed the responses in accordance with the evaluation criteria contained within the solicitation. The panel determined that all four firms should be interviewed. Of the four firms interviewed, the panel selected Deckard Technologies Inc. as the most qualified firm. Item 2G-2 City of Palm Desert Award of 2022-RFP-133 – STR Compliance & Monitoring Page 3 of 4 The panel’s final ranking of the four firms were as follows: Firm Location Rank Annual Fee Deckard Technologies San Diego, CA 1 $69,400 GovOS Austin, TX 2 $54,961 Granicus Denver, CO 3 $42,874 Avenu Insights & Analytics Centreville VA 4 $845,000 Staff spoke four (4) of the five (5) municipalities Deckard Technologies (“Deckard”) provided services, and all were positive. Overall, Deckard Technologies was described as professional, very responsive, and a great partner. On implementation, meeting deadlines, and providing support to staff, all were extremely pleased if an issue was identified (as it occurs with all new software); they worked immediately to fix it and were always able to reach someone whenever needed, all deadlines were met, and the only time Deckard submitted for a contract amendment was when the municipality requested something additional that was not part of the scope of services. One of the references initially contracting with Deckard was only for TOT collection, but soon realized they needed a better resource on the compliance side and expanded their contract and have since renewed it for additional years. In addition to providing all the items outlined in the Scope of Services (Exhibit A of the Draft Contract) in a cost-effective manner, key service and features that Deckard Technologies will provide that set them apart from the other firms include: • A user-friendly, intuitive, public-facing online portal in which residential STR businesses to apply for or renew a TOT certificate, STR permit, and/or a residential business license as applicable. o The portal will collect any STR permit fees, residential business license fees, or other fees in the future as required by the City and remit them to the county. Applicants will be prompted via email to pay annual fees. Fees not paid will be flagged for City staff. • A TOT Certificate and STR Permit information will be made available directly within the Rentalscape system to aid in both revenue services and code enforcement activities. • Providing automatic notification to applicants via email for renewal of applicable permits when required. • One dynamic form for the processing of TOT certificates, STR permits, and/or business licenses together. The form will include sequential, step-by-step processing of the permits. • Real-time Dashboard for staff that: o Identifies STR violations daily, including advance bookings.  The advance bookings calendar could also assist staff in identifying the need for additional resources when bookings are at all-time highs.  A “sign-off” for Deckard to mail the notice of violation as opposed to identifying violations and having staff complete the administrative tasks of printing, copying, stuffing envelopes, and physically mailing the notices. o Provides aggregated revenue, bookings, and property data that can be compared to TOT remittance to see if any hosts/owners are underreporting. Item 2G-3 City of Palm Desert Award of 2022-RFP-133 – STR Compliance & Monitoring Page 4 of 4 • A separate public-facing online portal for the public to look up permitted STR property locations, registration statuses and links for complaint information, rules and regulations, or other information as determined by the City. • Unlimited training for staff. Staff has attached a draft contract with Deckard for STR Compliance Services in the amount of $69,400 for the initial one-year period of November 1, 2022, through October 31, 2023 plus 4 additional one-year extensions based on satisfactory performance. Strategic Plan: Priority 5: Utilize progressive land use policies and standards to support ongoing and future needs. FINANCIAL IMPACT: Funds have been budgeted to cover the cost of this contract for the portion of the term within FY 2022/2023. The remainder of the contract period will be included in the 2023/2024 budget request. The renewal options will be reviewed and approved pending satisfactory performance. REVIEWED BY: Department Director: Richard D. Cannone, AICP City Attorney: Carlos Campos, Best Best & Krieger, LLP Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENTS: 1. Draft Agreement with Exhibits 2. Deckard Technologies Proposal Item 2G-4 City of Palm Desert STR RFP Page 1 of 18 ATTACHMENT “A” CITY OF PALM DESERT PROFESSIONAL SERVICES AGREEMENT Contract No. ____________ 1. PARTIES AND DATE. This Agreement is made and entered into this _____ day of ________, 2022, by and between the City of Palm Desert, a municipal corporation organized under the laws of the State of California with its principal place of business at 73-510 Fred Waring Drive, Palm Desert, California 92260-2578, County of Riverside, State of California (“City”) and Deckard Technologies, Inc. a Delaware Corporation, with its principal place of business at 1620 Fifth Avenue, Suite 400, San Diego, CA 92101("Consultant"). City and Consultant are sometimes individually referred to herein as "Party" and collectively as "Parties." 2. RECITALS. 2.1 Project. The City is a public agency of the State of California and is in need of professional services for the following project: Provide professional services of a short-term rental monitoring and enforcement consultant that is experienced in short-term rental property address identification, data management of short-term rental records, short-term rental compliance monitoring, notification and reporting, and short-term rental activity monitoring and tax collection assistance (hereinafter referred to as “the Project”). 2.2 Consultant. Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant is duly licensed and has the necessary qualifications to provide such services. 3. TERMS. 3.1 Scope of Services and Term. 3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. 3.1.2 Term. The term of this Agreement shall be from November 1, 2022, to October 31, 2023, unless earlier terminated as provided herein. The City shall have the unilateral option, at its sole discretion, to renew this Agreement automatically for no more than four (4) additional one-year (1) extensions approved by the City Manager upon satisfactory performance and budget approval. Consultant shall complete the Services within Item 2G-5 City of Palm Desert STR RFP Page 2 of 18 the term of this Agreement and shall meet any other established schedules and deadlines. 3.2 Responsibilities of Consultant. 3.2.1 Independent Contractor; Control and Payment of Subordinates. The Services shall be performed by the Consultant or under its supervision. Consultant will determine the means, methods, and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Any personnel performing the Services shall not be employees of City and shall at all times be under Consultant's exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due to such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 3.2.2 Schedule of Services. Consultant shall perform the Services in a prompt and timely manner in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services expeditiously. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services. 3.2.3 Conformance to Applicable Requirements. All work prepared by the Consultant shall be subject to the approval of the City. 3.2.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of the City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. The key personnel for performance of this Agreement are as follows: Nick Del Pego, CEO of Deckard Technologies, Inc. 3.2.5 City's Representative. The City hereby designates Richard D. Cannone, AICP, Development Services Director, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by the Consultant but not the authority to enlarge the scope of Services or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the scope of services or change the Consultant's total compensation subject to the provisions contained in Section 3.3 of this Agreement. Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative, or his/her designee. 3.2.6 Consultant's Representative. Consultant hereby designates Nick Del Pego, CEO, Jessica Flanagan, Tony Moriarty, Dana Lorimer, Dustin Reilich or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement. Item 2G-6 City of Palm Desert STR RFP Page 3 of 18 3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants, and other staff at all reasonable times. 3.2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Consultant represents that it, its employees, and subconsultants have all licenses, permits, qualifications, and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant’s failure to comply with the standard of care provided herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project. 3.2.9 Period of Performance. Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Consultant shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibits “A” or “B” attached hereto, or which may be separately agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Performance Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged, and agreed that the City will suffer damage. 3.2.10 Laws and Regulations; Employee/Labor Certification. Consultant shall keep itself fully informed of and in compliance with all local, state, and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement. All violations of such laws and regulations shall be grounds for the City to terminate the Agreement for cause. 3.2.10.1 Employment Eligibility; Consultant. Consultant certifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time and shall require all subconsultants and sub-subconsultants to comply with the same. Consultant certifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement and shall not violate any such law at any time during the term of the Agreement. 3.2.10.2 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer, and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. 3.2.10.3 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant Item 2G-7 City of Palm Desert STR RFP Page 4 of 18 shall at all times be in compliance with all applicable local, state, and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. 3.2.10.4 Conflict of Interest. No person, officer, employee, subconsultant or agent of Consultant performing services for the Consultant under this Agreement shall have a financial or other personal interest with any short-term rental platform, operator, or short-term property owner. 3.2.11 Insurance. 3.2.11.1 Minimum Requirements. Without limiting Consultant’s indemnification of City, and prior to commencement of the Services, Consultant shall obtain, provide, and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form that is satisfactory to City. (A) General Liability Insurance. Consultant shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted. (B) Automobile Liability Insurance. Consultant shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non- owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each accident. The City’s Risk Manger may modify this requirement if it is determined that Consultant will not be utilizing a vehicle in the performance of his/her duties under this Agreement. (C) Professional Liability (Errors & Omissions) Insurance. Consultant shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this Agreement and Consultant agrees to maintain continuous coverage through a period no less than three (3) years after completion of the Services required by this Agreement. (D) Workers’ Compensation Insurance. Consultant shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000). Consultant shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of the City, its officers, agents, employees and volunteers. (E) Umbrella or Excess Liability Insurance. Consultant may opt to utilize umbrella or excess liability insurance in meeting insurance requirements. In such circumstances, Consultant shall obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury, and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability and employer’s liability. Such policy or policies shall include the following terms and conditions: (1) A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; (2) Pay on behalf of wording as opposed to reimbursement; (3) Concurrency of effective dates with primary policies; Item 2G-8 City of Palm Desert STR RFP Page 5 of 18 (4) Policies shall “follow form” to the underlying primary policies; and (5) Insureds under primary policies shall also be insureds under the umbrella or excess policies. (F) Fidelity Coverage. RESERVED, (G) Cyber Liability Insurance. RESERVED. If coverage is maintained on a claims-made basis, Consultant shall maintain such coverage for an additional period of three (3) years following termination of the Agreement. 3.2.11.2 Other Provisions or Requirements. (A) Proof of Insurance. Consultant shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsements must be approved by City’s Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. (B) Duration of Coverage. Consultant shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Services hereunder by Consultant, his/her agents, representatives, employees or subconsultants. (C) Primary/Non-Contributing. Coverage provided by Consultant shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City before the City’s own insurance or self- insurance shall be called upon to protect it as a named insured. (D) City’s Rights of Enforcement. In the event any policy of insurance required under this Agreement does not comply with these specifications, or is canceled and not replaced, City has the right, but not the duty, to obtain the insurance it deems necessary, and any premium paid by City will be promptly reimbursed by the Consultant, or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may terminate this Agreement. (E) Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance or is on the List of Approved Surplus Line Insurers in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by the City’s Risk Manager. (F) Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against the City, its elected or appointed officers, agents, officials, employees, and volunteers, or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against the City, its elected or appointed officers, agents, officials, employees, and volunteers, and shall require similar written express waivers and insurance clauses from each of its subconsultants. (G) Enforcement of Contract Provisions (non estoppel). Consultant acknowledges and agrees that any actual or alleged failure on the part of the City to inform Consultant of non-compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. Item 2G-9 City of Palm Desert STR RFP Page 6 of 18 (H) Requirements Not Limiting. Requirements of specific coverage features, or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Consultant maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. (I) Notice of Cancellation. Consultant agrees to oblige its insurance agent or broker and insurers to provide to City with a 30-day notice of cancellation (except for nonpayment for which a 10-day notice is required) or nonrenewal of coverage for each required coverage. (J) Additional Insured Status. General liability, automobile liability, and if applicable, pollution liability and cyber liability, policies shall provide or be endorsed to provide that the City and its officers, officials, employees, agents, and volunteers shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement, under such policies. This provision shall also apply to any excess/umbrella liability policies. (K) Prohibition of Undisclosed Coverage Limitations. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. (L) Separation of Insureds. A severability of interests provision must apply for all additional insureds ensuring that the Consultant’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability exclusions. (M) Pass Through Clause. Consultant agrees to ensure that its subconsultants, subcontractors, and any other party involved with the Project who is brought onto or involved in the Project by Consultant, provide the same minimum insurance coverage and endorsements required of Consultant. Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Consultant agrees that upon request, all agreements with subconsultants, subcontractors, and others engaged in the Project will be submitted to City for review. (N) City’s Right to Revise Specifications. The City and Risk Manager reserve the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving the Consultant ninety (90) days advance written notice of such change. If such change results in additional cost to the Consultant, the City and Consultant may renegotiate Consultant’s compensation. If the City reduces the insurance requirements, the change shall go into effect immediately and require no advanced written notice. (O) Self-Insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved by City. (P) Timely Notice of Claims. Consultant shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from the Consultant’s performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. Item 2G-10 City of Palm Desert STR RFP Page 7 of 18 (Q) Additional Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Services. 3.2.12 Water Quality Management and Compliance. Consultant shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state, and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the California Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant must comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges. Failure to comply with laws, regulations, and ordinances listed in this Section is a violation of federal and state law. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the work assigned to them without impacting water quality in violation of the laws, regulations and policies of this Section. 3.3 Fees and Payments. 3.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed Sixty-Nine Thousand, Four-Hundred Dollars ($69,400.00) without written approval of the City Council or City Manager, as applicable. 3.3.2 Payment of Compensation. Consultant shall submit to City monthly invoices which provide a detailed description of the Services and hours rendered by the Consultant. City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges. If the City disputes any of Consultant's fees, the City shall give written notice to the Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth therein. Consultant shall submit its final invoice to City within thirty (30) days from the last date of provided Services or termination of this Agreement and failure by the Consultant to submit a timely invoice may constitute a waiver of its right to final payment. Payment shall not constitute acceptance of any Services completed by the Consultant. The making of final payment shall not constitute a waiver of any claims by the City for any reason whatsoever. 3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City or included in Exhibit "C" of this Agreement. 3.3.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City. 3.4 Labor Code Requirements. 3.4.1 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates Item 2G-11 City of Palm Desert STR RFP Page 8 of 18 of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify, and hold the City, its officials, officers, employees, agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. 3.4.2 Registration/DIR Compliance. If the Services are being performed on a public works project of over $25,000 when the project is for construction, alteration, demolition, installation, or repair work, or a public works project of over $15,000 when the project is for maintenance work, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants. This Project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. Any stop orders issued by the DIR against Consultant or any subconsultant that affect Consultant’s performance of Services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the DIR against the Consultant or any subconsultant. 3.4.3 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers’ Compensation or to undertake self-insurance in accordance with the provisions of that Code and agrees to comply with such provisions before commencing the performance of the Services. 3.5 Accounting Records. 3.5.1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 3.6 General Provisions. 3.6.1 Termination of Agreement. 3.6.1.1 Grounds for Termination. City may, by written notice to the Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to the Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those Services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause. 3.6.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require the Consultant to provide all finished or unfinished Documents Item 2G-12 City of Palm Desert STR RFP Page 9 of 18 and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request. 3.6.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. 3.6.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose: Consultant: Deckard Technologies 1620 Fifth Avenue, Suite 400 San Diego, CA 92101 ATTN: Nick Del Pego, CEO City: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 ATTN: Richard D. Cannone, AICP, Director of Development Services Such notice shall be deemed made when personally delivered or when mailed, 48 hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 3.6.3 Ownership of Materials and Confidentiality. 3.6.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). All Documents & Data shall be and remain the property of City and shall not be used in whole or in substantial part by Consultant on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Project and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents. 3.6.3.2 Subconsultants. Consultant shall require all subconsultants to agree in writing that City is granted a non-exclusive and perpetual license for any Documents Item 2G-13 City of Palm Desert STR RFP Page 10 of 18 & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by professionals other than Consultant or its subconsultants, or those provided to Consultant by the City. 3.6.3.3 Right to Use. City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project or another project, provided that any such use not within the purposes intended by this Agreement or on a project other than this Project without employing the services of the Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless Consultant and its officers, directors, agents, and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Consultant shall be responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant. 3.6.3.4 Indemnification – Documents and Data. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers, and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted. 3.6.3.5 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to the Consultant in connection with the performance of this Agreement shall be held confidential by the Consultant. Such materials shall not, without the prior written consent of City, be used by the Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to the Consultant which is otherwise known to the Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production, or other similar medium without the prior written consent of City. 3.6.3.6 Confidential Information. The City shall refrain from releasing Consultant’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information. Consultant shall have five (5) working days after receipt of the release notice to give City written notice of Consultant's objection to the City's release of Proprietary Information. Consultant shall indemnify, defend, and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost, or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of an objection notice unless either: (1) Consultant fails to fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non-appealable order by a court of competent jurisdiction requires that City release such information. Item 2G-14 City of Palm Desert STR RFP Page 11 of 18 3.6.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another and shall take any additional acts or sign any additional documents as may be necessary, appropriate, or convenient to attain the purposes of this Agreement. 3.6.5 [Reserved] 3.6.6 Indemnification. 3.6.6.1 To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subconsultants or agents in connection with the performance of the Consultant’s Services, the Project or this Agreement, including without limitation the payment of all expert witness fees, ,attorney’s fees and other related costs and expenses except such loss or damage caused by the sole negligence or willful misconduct of the City. Consultant's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers. 3.6.6.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault. 3.6.7 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings, or agreements. 3.6.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Riverside County. 3.6.9 Time of Essence. Time is of the essence for each and every provision of this Agreement. 3.6.10 City's Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project. 3.6.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties. 3.6.12 Assignment; Subcontracting. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination. Consultant shall not subcontract any portion of the Services required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. 3.6.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not workdays. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise Item 2G-15 City of Palm Desert STR RFP Page 12 of 18 specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 3.6.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties. 3.6.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise. 3.6.16 No Third-Party Beneficiaries. There are no intended third-party beneficiaries of any right or obligation assumed by the Parties. 3.6.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 3.6.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer, or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 3.6.19 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 3.6.20 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original. 3.6.21 Survival. All rights and obligations hereunder that by their nature are to continue after any expiration or termination of this Agreement, including, but not limited to, the indemnification obligations, shall survive any such expiration or termination. [SIGNATURES ON NEXT PAGE] Item 2G-16 City of Palm Desert STR RFP Page 13 of 18 SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT BY AND BETWEEN THE CITY OF PALM DESERT AND DECKARD TECHNOLOGIES, INC IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written. CITY OF PALM DESERT By: TODD HILEMAN, CITY MANAGER ATTEST: By: Anthony J. Mejia City Clerk APPROVED AS TO FORM: By: Best Best & Krieger LLP City Attorney DECKARD TECHNOLOGIES, INC By: NICK DEL PEGO Its: Printed Name: QC Insurance: __________ __________ Initial Review Final Approval Item 2G-17 City of Palm Desert STR RFP Page 14 of 18 EXHIBIT “A” SCOPE OF SERVICES The selected consultant shall work in partnership with the City to provide a full range of professional support services for the implementation and ongoing administration of, including but not limited to, the following tasks and as outlined in the consultants Proposal for RFP 2022-RFP- 133 dated August 19, 2022: 1. Short-term Rental Property & Address Identification: • Weekly monitoring of 60+ short-term rental websites. • Weekly list of Palm Desert's active short-term rental listings. • Quick and accurate identification of short-term rental properties in Palm Desert’s jurisdiction, including full address, parcel information, and contact information for all identifiable short-term rentals in the City. • All publicly available listing and contact information for non-identifiable short-term rentals. • Weekly high-resolution screenshots of all active short-term rental listings. 2. Data Management and Consolidation of Short-term Rental Records: • Real-time interactive and fully integrated cloud-based short-term rental data management, permitting, and tax collection system. • Automatic aggregation, consolidation, and de-duplication of listings to establish a reliable, always up-to-date short-term rental database. • Weekly matching of identified short-term rental properties with the City of Palm Desert's permitted short-term rental properties and/or transient occupancy tax account holders. 3. Short-term Rental Compliance Monitoring, Notification, and Reporting: • Weekly monitoring of short-term rental properties for zoning and permit compliance. • Weekly pro-active and systematic outreach to unpermitted and/or illegal short-term rental operators using Palm Desert's advanced, multi-paged form letters. • Advanced ability to precisely segment and target different types of letter recipients using an unlimited number of different form letter templates. • Cloud-based self-service letter template management system to give City staff the ability to manage and update letter templates and mailing criteria. • Ability to send both first-class and certified letters (or both). • Proof of contact provided in the form of first-class and certified letter tracking info (where such data is provided by the United States Postal Service) and make PDF copies of all letters. • Real-time accessible reporting on zoning, permit, and legal non-compliance by address and by owner. • Always up-to-date list of short-term rentals operating illegally or not in compliance with zoning, permitting, nuisance issues, and records of all past attempts to bring the short- term rental into compliance. • Weekly pro-active permit compliance monitoring, i.e., ongoing monitoring of compliance with Palm Desert's requirement to list permit numbers on all advertisements. Item 2G-18 City of Palm Desert STR RFP Page 15 of 18 4. Short-term Rental Activity Monitoring and Tax Collection Assistance: • Weekly monitoring of 60+ short-term rental websites for signs of rental activity. • Detailed weekly information on reviews and pricing for listings. • Consolidated utilization and revenue estimates across listing platforms using advanced revenue, utilization, and tax fraud detection algorithms. • Continuously updated list of short-term rental owners suspected of non- or underreporting taxes. • Pro-active, systematic, and data-informed outreach to short-term rental operators suspected of under-reporting taxes using Palm Desert's advanced, multi-paged form letters. • Custom reports and analytics to support tax audits and other short-term rental-related investigations. • Integrated mobile enhanced web forms to streamline transient occupancy tax audits and collection of rental activity documentation from short-term rental operators suspected of underreporting taxes. • Integrated mobile enhanced web forms to automate the calculation and collection of transient occupancy taxes. 5. Zoning, Permitting, and Violation Enforcement Assistance: • Toll-free telephone hotline that is staffed 24/7, and a mobile-enabled web form or app for neighbors to report non-emergency problems related to short-term rental properties. • Full documentation of all reported incidents. • Digital recordings and written summary reports of all calls. • Ability for neighbors to include photos, video footage, and sound recordings to document complaints. • Real-time outreach to owners/managers of problem short-term rental properties (whenever owner's contact information is known). • Full documentation of owner/manager outreach activities. • Detailed reporting on incidents. • Automatic escalation of issues to emergency responders where required. Item 2G-19 City of Palm Desert STR RFP Page 16 of 18 EXHIBIT "B" SCHEDULE OF SERVICES The term of this Agreement shall be from NOVEMBER 1, 2022, to OCTOBER 31, 2023, unless earlier terminated as provided herein. The City shall have the unilateral option, at its sole discretion, to renew this Agreement automatically for no more than four (4) additional one-year (1) terms, subject to departmental and City Manager concurrence and available funding. Consultant shall complete the Services within the term of this Agreement and shall meet any other established schedules and deadlines. The timeline above assumes contract signing late-October. All the Rentalscape systems require configuration to meet the City’s specific needs and assumes that the city staff will be available to document configuration requirements including details of violations, the details required when registering and the calculation of TOT payments including interest and late fees. Assuming the requirements are gathered quickly, and the City staff is accessible and responds in a quick manner to questions and requirements approvals, we fully expect to deliver Rentalscape to the City of Palm Desert well within the above timeline. The specific target for go-live of the STR registration portal is the 3rd of January 2023 prior to the “All systems live” on the 15th of January 2023. Item 2G-20 City of Palm Desert STR RFP Page 17 of 18 Item 2G-21 City of Palm Desert STR RFP Page 18 of 18 EXHIBIT "C" COMPENSATION PROPERTY IDENTIFICATION PRICE • Estimated 200 new properties at $10 per property per year • Identify property address & address • Identify property owner address $2,000 ($10/property/year) MONITORING & REPORTING • Estimated 1180 properties at $25 per property per year • Real-time reporting of all new listings & daily calendar monitoring • FutureCast™ - Identify future bookings as they are made on the rental platform • Automatic identification of violations • Daily calendar monitoring $29,500 ($25/property/year) OUTREACH CAMPAIGN • Letter campaign to inform STR owners/hosts about tax requirements and procedures • All letter templates will receive City approval pre-campaign • Campaign includes one Introductory letter and two additional escalation letters $2,500 STR REGISTRATION PORTAL • Online, intuitive portal for registration and renewal • Fields customizable to meet City needs • Pursue delinquent payments from hosts • Provide daily reports on new and modified permits $11,800 RENTALSCAPE TOT COLLECTION PORTAL • Online, intuitive portal for tax collection • Integration with Stripe payment system • Configured for city late fees and interest charges $11,800 PUBLIC FACING PORTAL • Public map showing licensed STR properties • Configured to show property details and other information as specified by the City. INCLUDED COMPLAINT 24/7 HOTLINE & ONLINE FORM • 24/7 Hotline with live agents • Online complaint form $11,800 REPORTING & ANALYSIS • Dynamic reporting, offering multiple ad hoc reports • Filters allowing users to focus on specific segments of the STR population • Evidence Activity Reporting INCLUDED DEDICATED ACCOUNT MANAGER • Single Point of Contact for City staff for all matters • Ensures the City is following Industry best practices • Shepherds the implementation process from start to finish • Periodic meetings/calls throughout the life of the account INCLUDED UNLIMITED ACCOUNTS & TRAINING SESSIONS • No limit on the number of Rentalscape user accounts, no per- session training costs INCLUDED TOTAL YEAR ONE $69,400 Item 2G-22 2022-rfp-133 Short -Term Rental Monitoring, Enforcemen t & Mobile Permitting/Registration Item 2G-23 contentS Item 2G-24 Proposal Without Cost Item 2G-25 Experience & Technical Competence                     Item 2G-26 Item 2G-27 Firm Staffing & Key Personnel Item 2G-28 Item 2G-29 Proposed Method To Accomplish The Work Item 2G-30 Item 2G-31 Item 2G-32 Item 2G-33 Item 2G-34 Item 2G-35 Item 2G-36 Item 2G-37 Item 2G-38 Item 2G-39 Item 2G-40 Item 2G-41 Item 2G-42 Item 2G-43   Item 2G-44 Item 2G-45 Item 2G-46 Item 2G-47 Item 2G-48 Item 2G-49 Item 2G-50 Fee Proposal Item 2G-51 • • • • • • • • • • • • • • • • • • • • • • • • • • • • Item 2G-52 Statement Of Acknowledgment Item 2G-53 Product Literature • • • Item 2G-54 Item 2G-55 Item 2G-56 Item 2G-57 • • • •    • • • • • • Item 2G-58 Item 2G-59 Item 2G-60 • • • • • • • • Item 2G-61 Item 2G-62 Item 2G-63 Item 2G-64 Page 1 of 2 PALM DESERT HOUSING AUTHORITY STAFF REPORT MEETING DATE: October 27, 2022 PREPARED BY: Veronica Chavez, Director of Finance REQUEST: REQUEST FOR APPROVAL OF THE PROPOSED SALE OF THE PROPERTY LOCATED AT 42162 VERDIN LANE, PALM DESERT (APN 624-440-004) PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433(C) RECOMMENDATION: 1.Conduct a public hearing and accept testimony on the proposed sale of the property located at 42162 Verdin Lane, Palm Desert to a qualified household of very low, low or moderate income; and 2.Following public testimony, waive further reading and adopt a Resolution approving the sale of 42162 Verdin Lane, Palm Desert (APN_624-440-004) to a qualified household of low or moderate income pursuant to the attached Purchase and Sale Agreement; and 3.Authorize the Executive Director to finalize and execute the Purchase and Sales Agreement and any ancillary documents related to the sale to a qualified household of low or moderate income. BACKGROUND/ANALYSIS: Health and Safety Code Section 33433(a) and (b) generally provide that before any property of the Authority acquired, in whole or in part, directly or indirectly, with tax increment moneys is sold for development pursuant to the redevelopment plan, the sale must first be approved by the City Council by resolution after a public hearing and the resolution must contain certain findings. Health and Safety Code Section 33433(c) provides that the requirements of subdivisions (a) and (b) will not apply to the sale of a small housing project if the City Council adopts a resolution that authorizes the Authority to sell small housing projects pursuant to Section 33433(c). Pursuant to its Resolution No. 03-34, adopted on April 10, 2003, the City Council authorized the Authority to sell small housing projects pursuant to Section 33433(c). On May 12, 2022, the Authority authorized the purchase of the single-family residence located at 42162 Verdin Lane, Palm Desert (the “Property”) from Aimee Goforth in order to cease foreclosure proceedings and preserve the affordability covenant. The Authority proposes to sell the property to another qualified household of very low, low or moderate income (the “Buyer”). Resolution No. 2013-11 authorizes the Authority to sell small housing projects pursuant to Health and Safety Code Section 33433(c) as the successor to the former Agency’s housing functions and assets. The property meets the definition of a small housing project in that the Authority will only sell the property to a qualified household (including persons or families) of Item 3A-1 City of Palm Desert Sale of Falcon Crest Home at 42162 Verdin Lane Page 2 of 2 very low, low or moderate income. Therefore, the Authority may sell the property pursuant to Health and Safety Code Section 33433(c). Section 33433(c) requires the Authority to hold a public hearing on the proposed sale pursuant to Health and Safety Code Section 33431. Pursuant to Section 33431, notice of a public hearing on the proposed sale of the properties was published once a week for two successive weeks in the Desert Sun. Staff recommends that the Authority hold a public hearing on the proposed sale of the property and approve the sale of the property to another qualified household pursuant to the terms of the Purchase and Sale Agreement presented to the Authority at this meeting. FINANCIAL IMPACT: The fiscal impact will be the cost differential from the former Authority’s acquisition cost of the Property to the newly negotiated sales price, the costs of the transaction, the cost to rehabilitate (if any), and the amount of the assistance loans from the various sources. The sale will reduce the monthly costs associated with maintaining the Property in inventory. REVIEWED BY: Department Director: Veronica Chavez City Attorney: RWG Finance Director: Veronica Chavez Assistant City Manager: Chris Escobedo City Manager: Todd Hileman ATTACHMENTS: 1. Resolution 2. Draft PSA Item 3A-2 RESOLUTION NO. HA- A RESOLUTION OF THE PALM DESERT HOUSING AUTHORITY APPROVING A RESIDENTIAL PURCHASE AND SALE AGREEMENT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433(c) THE PALM DESERT HOUSING AUTHORITY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. On April 13, 2006 the City of Palm Desert (“City”) and the former Palm Desert Redevelopment Agency (“Agency”) approved the Falcon Crest Sales Program and jointly held a public hearing on November 6, 2006, approving the initial sale of the 93 single-family homes located in the Falcon Crest Development (“Falcon Crest”) in the City of Palm Desert to qualifying households of low or moderate income pursuant to Resolution Nos. 535 and 06-145. Section 2. Pursuant to Health and Safety Code Section 34175(b), on February 1, 2012, all assets, properties, contracts, leases, books and records, buildings, and equipment of the Agency transferred to the control of the Successor Agency to the Palm Desert Redevelopment Agency (the “Successor Agency”) by operation of law including housing assets. Section 3. Pursuant to Health and Safety Code Section 34176(b), on February 9, 2012, the City Council adopted Resolution No. 2012-07, designating the Palm Desert Housing Authority (the “Housing Authority”) as the successor to the housing functions and assets of the former Agency. Section 4. On October 11, 2012, the Housing Authority Board accepted the housing functions and assets transferred pursuant to Resolution No. HA-47. Section 5. The Housing Authority owns a single-family residential property located at 42162 Verdin Lane in the City of Palm Desert, California (the “Property”). The Housing Authority proposes to sell the Property to a qualifying household of low or moderate income pursuant to the draft purchase and sale agreement (the “Agreement”) and the Falcon Crest Sales Program, presented to the Housing Authority at this meeting and now on file in the offices of the Housing Authority Secretary and City Clerk of the City of Palm Desert. Section 6. Resolution No. 03-34 of the City Council authorized the Agency to sell or lease a “small housing project" as that term is defined in Health and Safety Code Section 33013, pursuant to Health and Safety Code Section 33433(c). Section 7. By its Resolution No. 2013-11, the City Council confirmed that the authorization for the former Agency to sell small housing projects pursuant to Health and Safety Code Section 33433(c) transferred to the Housing Authority as the successor to the former Agency’s housing functions and assets. Item 3A-3 Resolution No. HA- Page 2 Section 8. Following notice duly given, the Housing Authority has held a full and fair public hearing on the sale by the Housing Authority of the Property pursuant to Health and Safety Code Section 33431. The Housing Authority has made available to the public through the office of the City Clerk a copy of the Agreement prior to the public hearing. Section 9. The Housing Authority hereby finds and determines that the Property qualifies as a "small housing project" as that term is defined in Health and Safety Code 33013. Section 10. The Housing Authority hereby approves the Agreement and the Housing Authority Executive Director (“Executive Director”) is hereby authorized and directed, for and in the name and on behalf of the Housing Authority, to finalize, execute and deliver the Agreement in substantially the form on file with the Housing Authority Secretary and the City Clerk and presented at this meeting, with such additions thereto or changes or insertions therein as may be approved by the Executive Director (such approval to be conclusively evidenced by such execution and delivery). Section 11. The officers of the Housing Authority are hereby authorized and directed, jointly and severally, to execute and deliver any and all necessary documents and instruments and to do all things which they may deem necessary or proper in order to effectuate the purposes of this Resolution and the transaction contemplated hereby; and any such actions previously taken by such officers are hereby ratified, confirmed and approved. ADOPTED ON October 27, 2022. JAN C. HARNIK CHAIR ATTEST: ANTHONY J. MEJIA SECRETARY Item 3A-4 Resolution No. HA- Page 3 I, Anthony J. Mejia, City Clerk of the City of Palm Desert, hereby certify that Resolution No. 2022-__ is a full, true, and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Desert on October 27, 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: RECUSED: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Desert, California, on ______________, 20__. ANTHONY J. MEJIA CITY CLERK Item 3A-5 Item 3A-6 Item 3A-7 Item 3A-8 Item 3A-9 Item 3A-10 Item 3A-11 Item 3A-12 Item 3A-13 Item 3A-14 Item 3A-15 Item 3A-16 Item 3A-17 Item 3A-18 Item 3A-19 Item 3A-20 Item 3A-21 Item 3A-22