town of los gatos town council meeting october …...los gatos town library, located at 100 villa...

TOWN OF LOS GATOSTOWN COUNCIL MEETING

OCTOBER 16, 2018110 EAST MAIN STREET

LOS GATOS, CA

PARTICIPATION IN THE PUBLIC PROCESS

How to participate: The Town of Los Gatos strongly encourages your active participation in the publicprocess, which is the cornerstone of democracy. If you wish to speak to an item on the agenda,please complete a “speaker’s card” located on the back of the chamber benches and return it to theClerk Administrator. If you wish to speak to an item NOT on the agenda, you may do so during the“Verbal Communications” period. The time allocated to speakers may change to better facilitate theTown Council meeting.

Effective Proceedings: The purpose of the Town Council meeting is to conduct the business of thecommunity in an effective and efficient manner. For the benefit of the community, the Town of LosGatos asks that you follow the Town’s meeting guidelines while attending Town Council meetingsand treat everyone with respect and dignity. This is done by following meeting guidelines set forth inState law and in the Town Code. Disruptive conduct is not tolerated, including but not limited to:addressing the Town Council without first being recognized; interrupting speakers, Town Council orTown staff; continuing to speak after the allotted time has expired; failing to relinquish the podiumwhen directed to do so; and repetitiously addressing the same subject.

Deadlines for Public Comment and Presentations are as follows: Persons wishing to make an audio/visual presentation on any agenda item must submit the

presentation electronically, either in person or via email, to the Clerk’s Office no later than 3:00p.m. on the day of the Council meeting.

Persons wishing to submit written comments to be included in the materials provided to TownCouncil must provide the comments as follows:o For inclusion in the regular packet: by 11:00 a.m. the Thursday before the Council meetingo For inclusion in any Addendum: by 11:00 a.m. the Monday before the Council meetingo For inclusion in any Desk Item: by 11:00 a.m. on the day of the Council Meeting

Rob Rennie, Mayor Steven Leonardis, Vice Mayor

Marcia Jensen, Council Member Marico Sayoc, Council Member

Barbara Spector, Council Member

Town Council Meetings Broadcast Live on KCAT, Channel 15 (on Comcast) on the 1st and 3rd Tuesdays at 7:00 p.m.Rebroadcast of Town Council Meetings on the 2nd and 4th Mondays at 7:00 p.m.

Live & Archived Council Meetings can be viewed by going to:www.losgatosca.gov/Councilvideos

IN COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT, IF YOU NEED SPECIAL ASSISTANCE TO PARTICIPATE IN THIS MEETING,PLEASE CONTACT THE CLERK DEPARTMENT AT (408) 354-6834. NOTIFICATION 48 HOURS BEFORE THE MEETING WILL ENABLE THE

TOWN TO MAKE REASONABLE ARRANGEMENTS TO ENSURE ACCESSIBILITY TO THIS MEETING [28 CFR §35.102-35.104]

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http://www.losgatosca.gov/Councilvideos

TOWN OF LOS GATOSTOWN COUNCIL MEETING

OCTOBER 16, 2018

7:00 PM

MEETING CALLED TO ORDER

ROLL CALL

PLEDGE OF ALLEGIANCE

Community Pledge Leader – Kayla Stagg, Noddin Elementary

PRESENTATIONS

Small Business, Big Applause - Music In the Park Partners

CLOSED SESSION REPORT

COUNCIL/TOWN MANAGER REPORTS

CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION) (Items appearing on theConsent Calendar are considered routine and may be approved by one motion. Any member of theCouncil or public may request to have an item removed from the Consent Calendar for comment andaction. Unless there are separate discussions and/or actions requested by Council, staff, or a memberof the public, it is requested that items under the Consent Calendar be acted on simultaneously.)

1. Approve Joint Study Session minutes of October 1, 2018 Staff Report

2. Approve Council minutes of October 2, 2018. Staff Report

3. Project 813-0231 Bicycle and Pedestrian Improvements A. Accept a Transportation Fund for Clean Air (TFCA) grant in the amount of $242,000 from theBay Area Air Quality Management District (BAAQMD) for the Blossom Hill Road project. B. Accept a Transportation Fund for Clean Air (TFCA) grant in the amount of $39,500 from theValley Transportation Authority (VTA) for the Roberts Road Frontage project. C. Authorize a budget adjustment in the amount of $281,500 in the Fiscal Year 2018/19 CapitalImprovement Program (CIP) Budget to recognize receipt and use of grant funds.D. Authorize the Town Manager to negotiate and execute all grant agreements with BAAQMDand VTA. Staff ReportAttachment 1 - TFCA Funding Agreement between the BAAQMD and Town of Los Gatos ProjectNumber 18R18Attachment 2 - Santa Clara VTA Congestion Management Program TFCA Agreement FY 2018/19

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https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/252534/100118_Joint_SS.FINAL.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/252554/100218.FINAL.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253774/Staff_Report.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/249899/Attachment_1.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/249899/Attachment_1.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/251571/Attachment_2_V2.pdf

4. Approve market equity adjustments for the American Federation of State, County and MunicipalEmployees (AFSCME) and authorize salary and benefits budget adjustments in the amount of$50,816 from estimated available FY 2018/19 operating revenues. Staff ReportAttachment 1 - AFSCME Salary Schedule

5. A. Approve a labor agreement between the Town of Los Gatos and the Police Offi cers’Association (POA) and authorize the Town Manager to execute the Memorandum ofUnderstanding (Attachment 1);B. Authorize salary and benefits budget adjustments in the amount of $513,728 from estimatedavailable FY 2018/19 operating revenues. Staff ReportAttachment 1 - 10.01.18 through 09.30.21 POA MOU showing track changes

6. Approve the revised classification plans for Management and Confidential employees andauthorize salary and benefits budget adjustments in the amount of $479,837 from estimatedavailable FY 2018/19 operating revenues for the Management and Confidential units. Staff ReportAttachment 1 - Management Salary ScheduleAttachment 2 - Confidential Employees Salary Schedule

7. Authorize the Town Manager to enter into an agreement with MBS Business Systems (MBS) toprovide multifunctional printer lease, replacement, management and maintenance services forthe Town of Los Gatos and U.S. Bank Equipment Finance for the lease purchase agreement for theequipment. Staff ReportAttachment 1 - Draft MBS Agreement

8. Approval of an Exclusive Negotiating Agreement (ENA) with Sarah Chaffi n to develop affordableteacher housing at 20 Dittos Lane. Staff ReportAttachment 1 - Exclusive Negotiating Agreement

VERBAL COMMUNICATIONS (Members of the public are welcome to address the Town Councilon any matter that is not listed on the agenda. To ensure all agenda items are heard and unlessadditional time is authorized by the Mayor, this portion of the agenda is limited to 30 minutes and nomore than three (3) minutes per speaker. In the event additional speakers were not able to be heardduring the initial Verbal Communications portion of the agenda, an additional Verbal Communicationswill be opened prior to adjournment.)

PUBLIC HEARINGS (Applicants/Appellants and their representatives may be allotted up to a totalof ten minutes maximum for opening statements. Members of the public may be allotted up to threeminutes to comment on any public hearing item. Applicants/Appellants and their representatives maybe allotted up to a total of five minutes maximum for closing statements. Itemsrequested/recommended for continuance are subject to Council’s consent at the meeting.)

9. Town Code Amendment Application A-17-002. Project Location: Town Wide. Applicant: Town ofLos Gatos.Consider amendments to Chapter 6 (Buildings and Building Regulations) and Chapter 29 (Zoning

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https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253742/Staff_Report_.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/252587/Attachment_1_-_AFSCME_Attachment_1_101618.pdf


https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253845/Attachment_1_-_10.01.18_through_09.30.21_POA_MOU_showing_track_changes.pdf


https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253316/Attachment_1_-_Management_Salary_Schedule.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253317/Attachment_2_-_Confidential_Employees_Salary_Schedule.V2.pdf


https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253345/Attachment_1_to_Printer_Copier_Contract.pdf


https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253826/Attachment_1_-_Exclusive_Negotiating_Agreement.pdf

Regulations) of the Town Code regarding fences, hedges, and walls. Staff ReportAttachment 13 - Required FindingsAttachment 14 - Draft Ordinance Amending Town Code Chapter 6 and Chapter 29Attachment 15 - Regulated Fence Area ExhibitAttachment 16 - Wildlife-Friendly Fence ExhibitAttachment 17 - Public comments received between 1101 a.m., December 5, 2017 and 1100 a.m.,October 11, 2018

ADJOURNMENT (Council policy is to adjourn no later than midnight unless a majority of Councilvotes for an extension of time)

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https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253839/Attachment_13_-_Required_Findings.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253840/Attachment_14_-_Draft_Ordinance_Amending_Town_Code_Chapter_6_and_Chapter_29.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/250734/Attachment_15_-_Regulated_Fence_Area_Exhibit.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/250735/Attachment_16_-_Wildlife-Friendly_Fence_Exhibit.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253825/Attachment_17_-_Public_comments_received_between_1101_a.m.__December_5__2017_and_1100_a.m.__October_11__2018.pdf

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/253825/Attachment_17_-_Public_comments_received_between_1101_a.m.__December_5__2017_and_1100_a.m.__October_11__2018.pdf

Writings related to an item on the Town Council meeting agenda distributed to members of theCouncil within 72 hours of the meeting are available for public inspection at the front desk of theLos Gatos Town Library, located at 100 Villa Avenue, and are also available for review on theofficial Town of Los Gatos website. Copies of desk items distributed to members of the Council atthe meeting are available for review in the Town Council Chambers

Note: The Town of Los Gatos has adopted the provisions of Code of Civil Procedure §1094.6;litigation challenging a decision of the Town Council must be brought within 90 days after the

decision is announced unless a shorter time is required by State or Federal law.

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110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT

MEETING DATE: 10/18/2018

ITEM NO: 1

DRAFT MINUTES OF THE SPECIAL JOINT MEETING OF THE

TOWN COUNCIL AND PLANNING COMMISSION STUDY SESSION OCTOBER 1, 2018

The Town Council of the Town of Los Gatos conducted a Special Joint Meeting of the Town Council and Planning Commission on Monday, October 1, 2018, to hold a Study Session at 7:00 p.m. STUDY SESSION CALLED TO ORDER AT 7:00 P.M. ROLL CALL Council Members Present: Mayor Rob Rennie, Vice Mayor Steve Leonardis, Council Member Marcia Jensen Council, Member Marico Sayoc, Council Member Barbara Spector. Council Member Absent: None. Planning Commissioners Present: Chair Michael Kane, Vice Chair Matthew Hudes, Commissioner Mary Badame, Commissioner Kendra Burch, Commissioner Melanie Hanssen, Commissioner Kathryn Janoff, Commissioner Thomas O’Donnell. Planning Commissioners Absent: None. VERBAL COMMUNICATIONS Lee Quintana - Requested clarification on the proceedings for the meeting.

STUDY SESSION 1. Discussion of process overview and key items to be addressed in the General Plan Update. Jennifer Armer, Senior Planner - Stated the objective of the Study Session, announced the first Community Workshop on

October 17 at the Jewish Community Center and the first General Plan Update Advisory Committee (GPAC) meeting on October 30, and introduced the consultants.

Rick Rust, Update Director and Brent Gibbons, Update Manager of Mintier Harnish - Provided an outline of the process and objectives for updating the General Plan.

Town Council and Planning Commission members discussed the information and provided the following input on the discussion points:

• Utilize other Boards, Commissions, and Committees

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OF 3 SUBJECT: MINUTES OF THE SPECIAL JOINT MEETING OF THE TOWN COUNCIL AND

PLANNING COMMISSION STUDY SESSION OF OCTOBER 1, 2018 OCTOBER 2, 2018

• Provide for youth and seniors

• Have more objective standards in defining the look and feel of the Town

• Address hillside views

• Position the Town for the future by providing for importing innovation and satellite offices for sustainable businesses

• Evaluate how to get residents to switch to more electric appliances and cars, and allow for pre-planning of residential infrastructure for EV chargers

• Set-up a speakers’ bureau with knowledgeable speakers who can go to Lions, Rotary, etc. to talk about the update

• Ensure the people that provide input are acknowledged

• Ensure the appropriate form of communication is utilized for the demographics of the Town

• Reach out to the high school to engage the youth

• Evaluate the current General Plan and the Los Gatos Boulevard Plan to resolve any inconsistencies

• Determine zoning and General Plan land use consistency

• Provide a process to engage neighboring cities

• Prioritize and focus all the input to ensure an effective General Plan

• Make development standards consistent with the State law standards

• Address traffic and circulation

• Address fiscal sustainability (i.e. unfunded liabilities)

• Clarify and use “should, shall, may” appropriately in the document

• Strengthen the Transportation Demand Management program

• Include specific measures for fire prevention

• Examine the wording regarding the expansion of Hwy 17

• Include the business community in the process

• Complete a comprehensive land use review

• Review historic districts and provide guidance as to how to preserve the Town’s historic character

Opened Public Comment Lee Quintana - Commented on setting realistic goals and visions; requested more comprehensive update;

suggested the identification of plans, elements, and various other documents that are no longer relevant and could be eliminated or revised; commented on strengthening the Sustainability Plan; and requested that the update address the conflicts between fire safety and hillside vegetation.

Closed Public Comment

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OF 3 SUBJECT: MINUTES OF THE SPECIAL JOINT MEETING OF THE TOWN COUNCIL AND

PLANNING COMMISSION STUDY SESSION OF OCTOBER 1, 2018 OCTOBER 2, 2018 STUDY SESSION ADJOURNED Study session adjourned at 8:24 p.m.

Attest:

_____________________________________

Shelley Neis, Town Clerk Administrator

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TOWN OF LOS GATOS



ITEM NO: 2

DRAFT MINUTES OF THE TOWN COUNCIL MEETING

OCTOBER 2, 2018 The Town Council of the Town of Los Gatos conducted a Regular Meeting on Tuesday, October 2, 2018, at 7:00 p.m. MEETING CALLED TO ORDER AT 7:00 P.M. ROLL CALL Present: Mayor Rob Rennie, Vice Mayor Steve Leonardis, Council Member Marcia Jensen, Council Member Marico Sayoc, Council Member Barbara Spector. Absent: None PLEDGE OF ALLEGIANCE Franklin Zhou led the Pledge of Allegiance. The audience was invited to participate. CLOSED SESSION REPORT Robert Schultz, Town Attorney, stated Council met in Closed Session on September 19, 2018 and there is no report. COUNCIL/TOWN MANAGER REPORTS Council Matters - Council Member Spector stated she attended the Council Finance Committee meeting and

the Town Council/Planning Commission Joint Study Session on October 1st. - Council Member Sayoc stated she attended the Town Council/Planning Commission Joint

Study Session on October 1st, the State Assembly District event, and the Youth Park Day. - Mayor Rennie stated he attended the Town Council/Planning Commission Joint Study

Session on October 1st, the Youth Park Day, the Cities Association Transportation and Sustainability sub-committee meetings, the West Valley Mayors and Managers meeting, the Art in the Council Chambers (AICC) reception, the welcome for the new Los Gatos-Saratoga Union High School District (LGSUHSD) superintendent, and an urban planning class for public officials; and he and Town Manager Prevetti met with the LGSUHSD superintendent.

- Vice Mayor Leonardis stated he had nothing to report. - Council Member Jensen stated she attended the Council Policy Committee meeting.

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OF 4 SUBJECT: DRAFT MINUTES OF THE TOWN COUNCIL MEETING OF OCTOBER 2, 2018 OCTOBER 3, 2018 Manager Matters - Announced the Library will be closed Monday, October 8th for maintenance. - Announced the Arts and Culture Commission released the RFP (Request for Proposals) for

the Gateway Art Project. - Announced recruitment is ongoing for all Boards, Commissions, and Committees and the

deadline is Friday, October 26, interviews are scheduled for November 6th. CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION)

1. Approve Council minutes of September 18, 2018. 2. Approve Closed Session minutes of September 19, 2018. 3. Authorize the Town Manager to negotiate and execute an agreement with Cuschieri

Horton Architects for project design in an amount not to exceed $149,000 for PPW project 821-2302, Building Replacement at the Corporation Yard.

4. Authorize the Town Manager to purchase two vehicles from Downtown Ford Sales in an amount not to exceed $111,360.

5. Adopt a resolution approving the final map for Tract No. 10468 – 15215 Shannon Road and approving the request to add the name “Rock Ridge Road” to the Town’s Official Street Names List to be used at the development site. RESOLUTION 2018-047

6. Town Code Amendment Application A-17-002. Project Location: Town Wide. Applicant: Town of Los Gatos. Consider amendments to Chapter 6 (Buildings and Building Regulations) and Chapter 29 (Zoning Regulations) of the Town Code regarding Fences, Hedges, and Walls.

MOTION: Motion by Council Member Jensen to approve the Consent Items. Seconded by

Vice Mayor Leonardis. VOTE: Motion passed unanimously. VERBAL COMMUNICATIONS Michael Silva - Commented that the American Legion Post 99 has lost their lease and is interested in

working with the Town to find a location, possibly the Forbes Mill or Tait Museum. PUBLIC HEARINGS 7. PPW Job Number 821-2008 Energy Efficiency Upgrades Town-Wide.

1. Approve a Resolution of the Town Council of the Town of Los Gatos making findings dispensing with the formal bidding requirements per the California Government Code Sections 4217.10-4217.18 and authorizing the Town Manager to execute an Energy Services Agreement with Syserco, Inc. for the design, installation, and commissioning of HVAC and Lighting improvements at various Town facilities for a total project cost not to exceed $1,664,358. RESOLUTION 2018-048

2. Authorize the Town Manager to negotiate and execute necessary agreements to participate in PG&E On Bill Financing in the amount of $1,439,995.

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OF 4 SUBJECT: DRAFT MINUTES OF THE TOWN COUNCIL MEETING OF OCTOBER 2, 2018 OCTOBER 3, 2018 Public Hearing Item #7 – continued

3. Authorize a budget adjustment recognizing revenue from PG&E on bill financing in the amount of $1,439,995.

4. Authorize the reallocation of funds from various energy efficiency projects to PPW job number 821-2008 in the amount of $258,354.

Matt Morley, Parks and Public Works Director, presented the staff report. Opened and closed Public Comment. Council discussed the matter. MOTION: Motion by Council Member Jensen to approve the staff recommendations

contained in the staff report. Seconded by Council Member Sayoc.

VOTE: Motion passed unanimously. OTHER BUSINESS 8. Discuss and provide direction regarding potential regulations for short-term rentals (STRs). Holly Zappala, Management Analyst, presented the staff report. Opened Public Comment. Maria Ristow - Commented in support of regulating STRs.

Closed Public Comment. Council discussed the matter. MOTION: Motion by Council Member Jensen to send the matter to the Policy Committee

with the following input from Council on what information should be brought back to the full Council for discussion: 1) why are other local jurisdictions not allowing STRs; 2) how best to utilize the Town's limited resources; 3) community outreach beyond the routine advertising; 4) does it compete with housing needs; 5) what are secondary effects; 6) establish parameters in expectation of revenue and what would it be; 7) consider density and number of days a year rentals are allowed; and 8) fairness issue for hotel guests. Seconded by Council Member Sayoc.

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OF 4 SUBJECT: DRAFT MINUTES OF THE TOWN COUNCIL MEETING OF OCTOBER 2, 2018 OCTOBER 3, 2018 VOTE: Motion passed unanimously. 9. Review and discuss disposition strategies for 4 New York Avenue and provide direction on

preferred outcomes. Arn Andrews, Assistant Town Manager, presented the staff report. Other Business Item #9 – continued Opened Public Comment. Melissa Toren, KCAT Executive Director - Commented on the proposed use by KCAT.

Anne Robinson Roley - Commented on her proposal to provide a wellness center at the property for youth and

adults. Michael Grove, Superintendent of Los Gatos-Saratoga Union High School District (LGSUHSD) - Commented on the District's interest in the property and the security concerns if another

organization was to use the property. Closed Public Comment. Council discussed the matter. MOTION: Motion by Council Member Spector to give Town staff and LGSUHSD the

opportunity to discuss the potential sale or lease of the property before moving forward with any other proposals. Seconded by Council Member Jensen.

VOTE: Motion passed unanimously. ADJOURNMENT The meeting adjourned at 8:49 p.m. Attest:

_____________________________________

Shelley Neis, Town Clerk Administrator

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PREPARED BY: YING SMITH Transportation and Mobility Manager

Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Finance Director, and Parks and Public Works Director


TOWN OF LOS GATOS



ITEM NO: 3

DATE: OCTOBER 11, 2018

TO: MAYOR AND TOWN COUNCIL

FROM: LAUREL PREVETTI, TOWN MANAGER

SUBJECT: PROJECT 813-0231 BICYCLE AND PEDESTRIAN IMPROVEMENTS A. ACCEPT A TRANSPORTATION FUND FOR CLEAN AIR GRANT IN THE

AMOUNT OF $242,000 FROM THE BAY AREA AIR QUALITY MANAGEMENT DISTRICT (BAAQMD) FOR THE BLOSSOM HILL ROAD PROJECT.

B. ACCEPT A TRANSPORTATION FUND FOR CLEAN AIR GRANT IN THE AMOUNT OF $39,500 FROM THE VALLEY TRANSPORTATION. AUTHORITY (VTA) FOR THE ROBERTS ROAD FRONTAGE PROJECT.

C. AUTHORIZE A BUDGET ADJUSTMENT IN THE AMOUNT OF $281,500 IN THE FISCAL YEAR 2018/19 CAPITAL IMPROVEMENT PROGRAM BUDGET TO RECOGNIZE RECEIPT AND USE OF GRANT FUNDS.

D. AUTHORIZE THE TOWN MANAGER TO NEGOTIATE AND EXECUTE ALL GRANT AGREEMENTS WITH BAAQMD AND VTA.

RECOMMENDATION:

Staff recommends that the Town Council: 1. Accept a Transportation Fund for Clean Air (TFCA) grant in the amount of $242,000 from the

Bay Area Air Quality Management District (BAAQMD) for the Blossom Hill Road project. 2. Accept a Transportation Fund for Clean Air (TFCA) grant in the amount of $39,500 from the

Valley Transportation Authority (VTA) for the Roberts Road Frontage project. 3. Authorize a budget adjustment in the amount of $281,500 in the Fiscal Year 2018/19 Capital

Improvement Program (CIP) Budget to recognize receipt and use of grant funds. 4. Authorize the Town Manager to negotiate and execute all grant agreements with BAAQMD

and VTA (Attachments 1 & 2).

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OF 4 SUBJECT: PROJECT 813-0231 BICYCLE AND PEDESTRIAN IMPROVEMENTS OCTOBER 11, 2018

S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\03 Project 813-0231 Bicycle and Pedestrian Improvements\Staff Report.docx 10/11/2018 4:00 PM

BACKGROUND: Within the Fiscal Year 2018/19 Capital Improvement Program budget, the Town Council allocated $300,000 for Bicycle and Pedestrian improvement projects. This allocation was in addition to $300,000 of budgeted in the previous year and $75,000 added for the Highway 9 Corridor Study, for a total budget of $675,000. On October 17, 2017, the Town Council approved the prioritization of certain Bicycle and Pedestrian projects within the Town’s approved Bicycle and Pedestrian Master Plan. Of note, the Blossom Hill Road Bicycle and Pedestrian Improvements were identified as the highest priority CIP projects. Following Council’s October direction, staff began working on the design. Based on the preliminary design, staff identified three project components, with a cost estimate of $500,000 in total:

• Class IV bike lanes on Blossom Hill Road (BHR) between Roberts Road East and Oak Rim Way

• Right turn lane and Class I multiuse path on the eastbound approach of BHR at Roberts Road East

• Fisher Middle School frontage striping improvements on Roberts Road East Class IV bike lanes are bike lanes separated from vehicle traffic with a physical barrier. Class I multi-use paths serve both bicyclists and pedestrians on a pathway that is physically separated from vehicle traffic and the street. In March, staff submitted two grant applications to seek funding for these projects, one was submitted to BAAQMD for the Regional Bicycle Facilities Grant Program and one was submitted to VTA for the County Program Manager Fund. As part of the application process the Los Gatos-Monte Sereno Safe Routes to School Coalition, the Silicon Valley Bicycle Coalition, and the City of Monte Sereno provided letters of support. DISCUSSION:

On August 1, 2018, the BAAQMD Board of Directors approved an award of TFCA funds in the amount of $242,000 to the Town to implement the Blossom Hill Road Bicycle and Pedestrian Improvements project (both Class I and Class IV facilities). On September 6, 2018, the VTA Board approved a grant from the County Program Manager Fund in the amount of $39,500 for the Roberts Road Frontage Improvement project.

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CONCLUSION: The Bicycle and Pedestrian Improvements project has been a Town Council priority and this grant funding will assist in completing the Blossom Hill Road project while minimizing the use of Town funds. Staff is nearly complete with the design for the project. Prior to bringing this project back to the Town Council for approval of the plans and specifications, staff plans on hosting a public outreach meeting to fully introduce the public to the project and discuss the benefits as well as the impacts. Construction is tentatively scheduled for summer of 2019 during the school recess. COORDINATION:

This project has been coordinated with Finance Department and BAAQMD and VTA staff. FISCAL IMPACT:

The Town will receive grant revenue of $281,500 for the construction of the project. A budget adjustment in the amount of $281,500 in the Fiscal Year 2018/19 Capital Improvement Program (CIP) Budget will be required to recognize receipt and use of grant funds.

Source Budget Costs

GFAR 600,000$

Traffic Mitigation Fund 75,000$

Regional TFCA Grant Award 242,000$

VTA County Program Manager Fund Grant Award 39,500$

Total Project Budget 956,500$

Prior Year Expenditures 102,422$

2018/19 Expenditures + Commitments 53,866$

Total Project Expenditures 156,288$

Remaining Balance 800,212$

BICYCLE AND PEDESTRIAN IMPROVEMENTS

Project 821-0231

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ENVIRONMENTAL ASSESSMENT:

The recommended fiscal actions are not a project as defined under CEQA; however, the bicycle and pedestrian improvements are a project under CEQA. Environmental clearance for the improvements will be identified when the plans and specifications come to the Town Council for consideration. Attachments: 1. TFCA Funding Agreement between the BAAQMD and Town of Los Gatos Project Number

18R18 2. Santa Clara VTA Congestion Management Program TFCA Agreement FY 2018/19

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BAAQMD FYE 2018 TFCA Funding Agreement

TFCA Project 18R18

TRANSPORTATION FUND FOR CLEAN AIR FUNDING AGREEMENT

BETWEEN

THE BAY AREA AIR QUALITY MANAGEMENT DISTRICT

AND

TOWN OF LOS GATOS

PROJECT NUMBER: 18R18

This funding agreement (“Agreement”) is made and entered into between the Town of Los Gatos, hereinafter

referred to as “Project Sponsor,” and the Bay Area Air Quality Management District, hereinafter referred to

as the “Air District” (and hereinafter referred to jointly as the “Parties”).

SECTION I

RECITALS

1) California Health and Safety Code Sections 44223 and 44225 authorize the Air District to levy a fee on

motor vehicles registered within its jurisdiction and to use those fees to implement mobile source and

transportation control projects that result in surplus emission reductions.

2) The Air District has established a grant fund, entitled the Transportation Fund for Clean Air (“TFCA”)

to implement such projects. Under the TFCA’s Regional Fund Program, the Air District may issue

TFCA funds to public agencies and, for certain vehicle-based projects, to other entities for projects

within the Air District’s jurisdiction (“TFCA Program”).

3) California Health and Safety Code Section 44241 lists the permissible types of projects, all of which

must conform to the transportation control measures and mobile source measures that are included in

the Air District’s air quality plan(s) adopted pursuant to California Health and Safety Code Sections

40233, 40717, and 40919 and are in effect as of the date of execution of this Agreement.

4) On April 19, 2017, the Air District’s Board of Directors approved funding allocations for the TFCA

Program for Fiscal Year Ending (FYE) 2018, under California Health and Safety Code Section 44241,

and authorized the Executive Officer/Air Pollution Control Officer (APCO) to execute Grant

Agreements for eligible projects funded by the TFCA Program, with individual grant awards up to

$100,000.

5) On August 2, 2017, the Air District’s Board of Directors approved the FYE 2018 TFCA Regional Fund

Program Policies (“Program Policies”), which sets forth requirements for projects that are eligible for

funding through the TFCA Program.

6) On January 25, 2018, the Air District released the Application Guidance for Bicycle Facilities Grant

Program for FYE 2018 (“Program Guidance”), which includes the Program Policies and sets forth

additional requirements for eligible bicycle facility projects.

7) On August 1, 2018, the Air District’s Board of Directors approved an award of TFCA Program funds

to the Project Sponsor to implement an eligible mobile source or transportation control project to

improve air quality in the San Francisco Bay Area Air Basin based on the Regional Fund’s eligibility

criteria and on information provided in Project Sponsor’s application (“Project”).

8) The Project Sponsor affirms that the Project has not commenced, would not have otherwise commenced

without TFCA Program funding, and will result in surplus emission reductions.

9) The Parties desire to enter into this Agreement to implement the Project in accordance with the terms

and conditions of this Agreement, including all attachments thereto.

NOW, THEREFORE, pursuant to California Health and Safety Code Section 44241, the Parties hereby agree

as follows:

Page 1 ATTACHMENT 1

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TFCA Project 18R18 Page 2

SECTION II

PROJECT SPONSOR OBLIGATIONS

1) The Project Sponsor hereby agrees to implement the Project, which is described in “Project

Information” (Attachment A), in accordance with the costs, terms, and conditions in the “Project Budget

and Payment Process” (Attachment B), and all applicable provisions of federal, state, and local law and

regulations. Failure to implement the Project in accordance with the terms and conditions set forth in

this Agreement and all attachments thereto shall be deemed a breach of this Agreement and may result

in the Air District’s enforcement of the Agreement, termination of the Agreement, a reduction of the

Project’s TFCA Funds Awarded that are specified in Attachment B, or other remedies sought by the

Air District at its sole discretion.

2) The Project Sponsor shall pay all Project costs necessary to complete the Project prior to submission of

the Final Invoice to the Air District for reimbursement. Air District’s funding obligation under this

Agreement is limited to reimbursement of Eligible Costs, as specified in Attachment B, the amount of

which shall not exceed the TFCA Funds Awarded, also as specified in Attachment B. The Project

Sponsor shall be solely responsible for all costs that exceed the TFCA Funds Awarded.

3) The Project Sponsor is responsible for assuring that all funds received under this Agreement and

Matching Funds are expended only in accordance with the requirements of the TFCA Program, this

Agreement, and all applicable provisions of law and regulations.

4) The Project Sponsor shall allow the Air District and its authorized representatives to conduct

performance and fiscal audits of the Project at any time during the Term of this Agreement. The Project

Sponsor shall cooperate with such audits and shall make available to the Air District all records relating

to Project performance and expenses incurred in the implementation of the Project.

The Project Sponsor shall allow the Air District or its authorized representatives to inspect the Project

at any time during the Project Operational Period. The Project Sponsor shall cooperate with such

inspections.

5) The Project Sponsor shall prepare and maintain all necessary Project Records to document Project

activities and performance, including invoicing documentation set forth in Section 5 of Attachment B,

documentation to support the Project reporting requirements set forth in Attachment C, and insurance

documentation set forth in Attachment D (all of which comprise “Project Records”). Project Records

shall also include documentation that verifies compliance with the requirements set forth in Section

II.8. The Project Sponsor shall keep Project Records in one central location for a period of three (3)

years after the later of a) the date of the Air District’s final payment, or b) the end of the Project

Operational Period.

6) The Project Sponsor shall submit the reports specified in Attachment C to the Air District by the due

dates specified in Attachment C. These reports are public documents.

7) The Project Sponsor shall implement and operate the Project for the duration of the Project Operational

Period. The Project Sponsor may not make any changes to the operational status of the Project without

the prior approval of the Air District. Failure to obtain prior approval is a breach of this Agreement.

For purposes of this Agreement, a “change to the operational status” occurs whenever any portion of

the Project is removed from active service other than for routine maintenance, relocated to a different

location than what is specified in this Agreement (Attachment A), rendered inoperable, sold, or

transferred to another entity, before full completion of the Project Operational Period.

If the Project Sponsor intends to make a change to the Project’s to the operational status, the Project

Sponsor must seek a modification of this Agreement in advance to allow for a change pursuant to

Section IV.3.

8) The Project Sponsor shall acknowledge, and require any third party that implements any portion of the

Project (“Sub-awardee”) to also acknowledge, the Air District as a Project funding source at all times

throughout the Project Operational Period as specified in Attachment A. The Project Sponsor shall use,

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and require any Sub-awardee to use, the Air District’s approved logo for the Project. The required

documentation and materials are specified in Attachment C.

9) Beginning when the Project Starts and throughout the Project Operational Period, the Project Sponsor

shall obtain, maintain, and comply, and require any Sub-awardee to also obtain, maintain, and comply,

with the insurance coverage specified in Attachment D, “Insurance Requirements,” and with all

insurance requirements set forth therein, including the provision of documentation of said insurance

coverage.

10) To the extent not otherwise prohibited by law, and to the extent required by the California Public

Records Act (Government Code section 6250 et seq.), the Project Sponsor shall place in the public

domain any software, written document, or other product developed with TFCA Program funds as part

of the Project and shall require recipients of any TFCA Program funds, if any, to do the same.

11) The Project Sponsor shall use TFCA Program funds only for the implementation of a project that will

result in surplus motor vehicle emission reductions within the Air District’s jurisdiction and be

responsible for demonstrating the emission reductions achieved. Surplus emission reductions are those

that exceed the requirements of applicable regulations or other legal obligations (including contracts)

as of the Effective Date of this Agreement.

12) The Project Sponsor shall comply with all TFCA Program requirements set forth in the Air District’s

“Board Adopted TFCA Regional Fund Policies and Evaluation Criteria for FYE 2018,” which are

incorporated therein as Appendix A, and made a part of the “Application Guidance for Bicycle Facilities

Grant Program for FYE 2018,” dated January 25, 2018, and which are incorporated herein and made a

part hereof by this reference as if fully set forth herein.

SECTION III

AIR DISTRICT OBLIGATIONS

1) The Air District will provide TFCA Program funds for this Project in an amount not to exceed the

TFCA Funds Awarded, in accordance with the formula set forth in Attachment B. In the event that the

Total Project Cost is less than the amount listed in Attachment B, the Air District shall recalculate its

contribution to the Project in accordance with the provisions of Section 3 of Attachment B.

2) The Air District will endeavor to pay the undisputed amount of an approved invoice within thirty (30)

calendar days of the date of Air District’s approval of such invoice and in accordance with the Invoice

and Payment Schedule set forth in Section 5 of Attachment B.

3) The Air District will provide timely notice to the Project Sponsor prior to conducting any audits of the

Project. Also, the Air District makes reasonable efforts to conduct audits and inspections during normal

business hours of the Project Sponsor.

4) The Air District will provide the Project Sponsor a copy of the fiscal audit of the Project as specified in

California Health and Safety Code Section 44242.

5) The Air District will provide the Project Sponsor all applicable Air District-approved reporting and

invoice forms.

6) The Air District will make its logo available to Project Sponsor solely for use to fulfill the Project

Sponsor’s obligation under Section II.8 of this Agreement.

SECTION IV

GENERAL PROVISIONS

1) Effective Date: The effective date of this Agreement is the date the Air District Executive Officer/Air

Pollution Control Officer executes this Agreement (“Effective Date”).

2) Term: The term of this Agreement shall commence on the Effective Date of this Agreement and end

three (3) years from the later of either 1) the date of the Air District’s final payment, or 2) the last day

of the Project Operational Period, unless this Agreement is terminated or amended as provided below,

or the Term is extended pursuant to Special Conditions, Attachment A.

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3) Amendment: This Agreement may not be modified except in writing, signed by both Parties hereto,

and any attempt at oral modification of this Agreement shall be void and of no effect. Any change in

Project scope shall require an Amendment under this Agreement.

4) Project Liaison: Within thirty (30) calendar days from the Effective Date of this Agreement, the Project

Sponsor shall notify the Air District of the Project Sponsor’s Project Liaison and of the Liaison’s

address, telephone number, and email address. The Project Liaison shall be the liaison to the Air District

pertaining to implementation of this Agreement and shall be the day-to-day contact about the Project.

All correspondence shall be addressed to the Project Liaison. The Project Liaison shall notify the Air

District of a change of Project Liaison or of the Liaison’s contact information in writing no later than

thirty (30) calendar days from the date of the change.

5) Notices: Any notice that may be required under this Agreement shall be in writing, shall be effective

when received, and shall be given by personal service, by U.S. Postal Service first class mail, or by

certified mail (return receipt requested). Within thirty (30) calendar days of the Effective Date of this

Agreement, the Parties shall inform the other Party of the addressee for notice. Each Party shall

promptly inform the other of any changes for notice. All correspondence shall reference the Project

Number.

6) Project Due Dates: If any Project act or task must be performed by a specific deadline or date, which

day falls on a Saturday or holiday (which includes Sunday), that act or task may be performed by the

next business day, except where otherwise noted in Special Conditions, Attachment A.

7) Breach and Termination:

A. Voluntary. Either Party may terminate this Agreement by giving written notice to the other Party.

The notice of termination shall specify the effective date of termination. The terminating party

shall provide notice that is a minimum of forty-five (45) calendar days from the mailing date of the

notice. However, if any payments are due to either party, this Agreement may not be terminated

earlier than the date that all parties have received all payments they are due under this Agreement.

In this circumstance, each party shall notify the other party of having received all payments due

and the date of receipt. The notice of the termination shall be delivered as provided for in Section

IV.5.

If the Project Sponsor terminates this Agreement, the Project Sponsor shall not be entitled to the

full amount of the TFCA Funds Awarded. The Air District will calculate the amount of funds to

which the Project Sponsor is entitled based on the Air District’s determination of what funds are

Eligible Costs and the formula set forth in Attachment B, Section 3. If the Air District has paid the

Project Sponsor more than the amount of funds to which the Project Sponsor is entitled, the Project

Sponsor shall reimburse any funds owed to the Air District prior to the effective date of termination,

which may include all or a portion of the TFCA funds that Project Sponsor has already received

but is not entitled to retain.

If the Air District terminates this Agreement pursuant to this provision, any costs incurred on the

Project following the effective date of termination shall be ineligible for reimbursement of TFCA

funds, except costs for any work that the Air District has specified in the notice of termination that

the Project Sponsor may continue to perform for the specified period of time. The Air District will

reimburse Project Sponsor for all Eligible Costs that were expended prior to the date specified in

the notice of termination based on the formula set forth in Attachment B.

The Agreement cannot be terminated unless all payments have been fully made.

B. Breach. In the case of Project Sponsor’s breach of this Agreement, the Air District will deliver a

written notice of breach. The notice will specify the nature of the breach and will direct the Project

Sponsor to cease all work immediately upon receipt of the notice, except as specifically provided

for in the notice. At its discretion, the Air District may allow the Project Sponsor to cure the breach;

in that instance, the notice of breach will specify the date by which such breach must be cured

(“Cure Period”). As one of its remedies, the Air District may terminate this Agreement. In that

20



event, the notice of beach will specify the date of termination, which shall be no less than thirty

(30) calendar days from the date of mailing of such notice of breach.

The notice of breach will also notify the Project Sponsor that the Project Sponsor may not be entitled

to the full amount of the TFCA Funds Awarded. The notice will specify the amount of the TFCA

Funds Awarded; the amount of funds the Air District has paid to date, if any; and that some or all

of the TFCA Funds Awarded may be subject to reimbursement to, or withholding by, the Air

District. In no event shall the Agreement terminate prior to the Project Sponsor’s reimbursement

of any funds owed to the Air District.

8) Additional Provisions and Additional Acts and Documents: Each Party agrees to do all such things and

take all such actions, and to make, execute and deliver such other documents that are reasonably

required to carry out the provisions, intent and purpose of this Agreement. All attachments to this

Agreement are expressly incorporated herein by this reference and made a part hereof as though fully

set forth.

9) Indemnification: The Project Sponsor shall indemnify and hold the Air District, its officers, employees,

agents, and successors-in-interest harmless from and against any and all liability, loss, expense,

including reasonable attorneys’ fees, or claims for injury or damages arising out of the performance of

this Agreement but only in proportion to and to the extent such liability, loss, expense, attorneys’ fees,

or claims for injury or damages are caused by or result from the negligent or intentional acts or

omissions of the Project Sponsor, its officers, agents, or employees. The Project Sponsor shall require

any third party who owns, operates, controls, or implements any portion of the Project to indemnify and

hold the Air District, its officers, employees, agents, and successors-in-interest harmless from and

against any and all liability, loss, expense, including reasonable attorneys’ fees, or claims for injury or

damages arising out of the performance of this Agreement but only in proportion to and to the extent

such liability, loss, expense, attorneys’ fees, or claims for injury or damages are caused by or result

from the negligent or intentional acts or omissions of the third party, its officers, agents, or employees.

10) Independent Contractor: Neither the Project Sponsor nor its officers, employees, agents, or

representatives shall be considered employees or agents of the Air District. This Section does not apply

to elected officials serving concurrently on the governing boards of both the Project Sponsor and the

Air District.

11) Assignment: Neither Party shall assign, sell, license, or otherwise transfer any rights or obligations

under this Agreement to a third party without the prior written consent of the other Party. All of the

terms, provisions and conditions of this Agreement will be binding upon and inure to the benefit of the

Parties and their respective successors, assigns and legal representatives.

12) Waiver: No waiver of a breach, of failure of any condition, or of any right or remedy contained in or

granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the

Party waiving the breach, failure, right or remedy. No waiver of any breach, failure, right or remedy

shall be deemed a waiver of any other breach, nor shall any waiver constitute a continuing waiver unless

the writing so specifies. Further, the failure of a Party to enforce performance by the other Party of any

term, covenant, or condition of this Agreement, and the failure of a Party to exercise any rights or

remedies hereunder, shall not be deemed a waiver or relinquishment by that Party to enforce future

performance of any such terms, covenants, or conditions, or to exercise any future rights or remedies.

13) Severability: If a court of competent jurisdiction holds any provision of this Agreement to be illegal,

unenforceable or invalid in whole or in part for any reason, the validity and enforceability of the

remaining provisions, or portions of them, will not be affected.

14) Force Majeure: Neither the Air District nor the Project Sponsor shall be liable for, or deemed to be in

default for, any delay or failure in performance under this Agreement or interruption of services

resulting, directly or indirectly, from acts of God, enemy or hostile governmental action, civil

commotion, strikes, lockouts, labor disputes, fire or other casualty, judicial orders, governmental

controls, regulations or restrictions, inability to obtain labor or materials or reasonable substitutes for

labor or materials necessary for performance of the Project, or other causes, except financial, that are

21



beyond the reasonable control of the Air District or the Project Sponsor, for a period of time equal to

the period of such force majeure event, provided that the Party failing to perform notifies the other Party

within fifteen (15) calendar days of discovery of the force majeure event, and provided further that that

Party takes all reasonable action to mitigate the damages resulting from the failure to perform.

Notwithstanding the above, if the cause of the force majeure event is due to a Party’s own action or

inaction, then such cause shall not excuse that Party from performance under this Agreement.

15) Governing Law: Any dispute that arises under or relates to this Agreement shall be governed by

California law, excluding any laws that direct the application of another jurisdiction’s laws. Venue for

resolution of any dispute that arises under or relates to this Agreement, including mediation, shall be

San Francisco, California.

16) Public Entities - Conflict of Interest: The Project Sponsor warrants and represents that its public

officials, including its officers and employees in their official capacity, presently have no interest and

agrees that its public officials, including its officers and employees in their official capacity, will not

acquire any interest which would represent a conflict of interest under California Government Code

sections 1090 et seq. and 87100 et seq. during the performance of this Agreement.

17) Integration: This Agreement, including all attachments hereto, represents the final, complete, and

exclusive statement of the agreement between the Air District and the Project Sponsor related to the

Parties’ rights and obligations and subject matter described in this Agreement, and supersedes all prior

and other contemporaneous understandings and agreements of the parties. No Party has been induced

to enter into this Agreement by, nor is any Party relying upon, any representation or warranty outside

those expressly set forth herein.

18) Survival of Terms: Any terms of this Agreement that by their nature extend beyond the term (or

termination) of this Agreement shall remain in effect until fulfilled, and shall apply to both Parties’

respective successors and assigns. Such terms include the requirements set forth in Sections IV.9 and

II.5.

19) Each of the undersigned expressly affirms that he or she is authorized to execute this Agreement on

behalf of the Party whom he or she represents.

22



IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by their duly authorized

officers.

SIGNATURES:

by: ________________________________

Jack P. Broadbent

Executive Officer/APCO

Bay Area Air Quality Management District

by: __________________________________

Laurel Prevetti

Town Manager

Town of Los Gatos

Date: ______________________________

Date: __________________________________

Approved as to form:

by: _________________________________

Brian C. Bunger

District Counsel

Bay Area Air Quality Management District

Approved as to form (optional):

by: __________________________________

Legal Counsel

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24



ATTACHMENT A

PROJECT INFORMATION

(Note: The section numbers shown in parentheses below refer to sections in the Agreement.)

1. Project Number (Section IV.5): 18R18

2. Project Sponsor: Town of Los Gatos

3. Project Title: Town of Los Gatos Bikeway Project

4. Project Description: Project Sponsor shall construct and maintain 0.09 miles of Class I and 0.28 miles

of Class IV bikeways in Los Gatos, as further described in Sections 8, 9, and 10 of this Attachment A.

5. Project Goal: The goal of this Project is to reduce motor vehicle emissions and thereby improve air

quality by constructing, installing, and maintaining new bicycle facilities to help commuters and

residents to mode shift to cycling and walking as alternatives to driving for short and first- and last-

mile trips.

6. Project Operational Period: Seven (7) years starting from the date the last of the approved bicycle

facilities is placed into service.

7. Project Schedule:

Milestone Date

Project Starts Effective Date of Agreement

All bicycle facilities are placed into service

(start of the Project Operational Period) By October 15, 2019

End of the Project Operational Period Seven (7) years from the Project

Operational Period start date

8. Special Conditions (Sections II.1, II.4, II.8, IV.3):

A. Project Sponsor shall use only State of California-licensed engineers and contractors or

Project Sponsor’s qualified employees to perform the Project work.

B. Project Sponsor shall site, install, construct, and maintain the Project bicycle facilities in

accordance with respective manufacturer’s specifications and requirements, applicable state,

federal and local laws and regulations, standards, guidelines, and best practices, including the

Americans with Disabilities Act (ADA).

C. Project Sponsor shall maintain the bicycle facilities in good repair and ensure that they remain

accessible to the public for the duration of the Project Operational Period.

D. Project Sponsor shall allow the Air District, and its authorized representatives, to collect and

share usage information about the Project.

25



9. Approved Project Bicycle Facilities (Project Components):

Bikeway ID Bikeway

Class*

Bikeway Length

(miles) Eligible Costs

Maximum

TFCA Funds

Awarded

Maximum TFCA Funds

Awarded as a Percentage

of Eligible Costs

Maximum TFCA

Funds Awarded

Per Mile

18R18-1 Class IV 0.28 $245,000 $131,500 53.6735% $469,643

18R18-2 Class I 0.09 $210,000 $110,500 52.6190% $1,227,778 Total: 0.37 $455,000 $242,000

*Bikeway class is defined in Chapter 1000 – Bicycle Transportation Design of the Caltrans Highway Design Manual

10. Maps showing location of approved Project Bicycle Facilities (Project Components):

a. Map for bikeway 18R18-1 b. Map for bikeway 18R18-2

26



ATTACHMENT B

PROJECT BUDGET AND PAYMENT PROCESS


1. Total Project Cost (Section II.2): $455,000

The Total Project Cost is the sum of the Eligible Costs that are listed in Section 4 of Attachment B.

2. Matching Funds (Sections II.2, 3): The Project Sponsor is responsible for all project costs that are not

covered by the TFCA Funds Awarded.

3. TFCA Funds Awarded (Sections II.2, II.11, III.1, IV.7): $242,000

If the scope of the Project is modified, the Air District will recalculate the Maximum TFCA Funds

Awarded based on the actual length constructed and the Maximum TFCA Funds Awarded Per Mile as

specified in Section 9 of Attachment A for each of the Project bikeways. The Air District will cancel this

Agreement if the amount of TFCA Funds Awarded is reduced to below $10,000.

If the actual cost of the Project is less than the Total Project Cost, the Air District will recalculate the

Maximum TFCA Funds Awarded based on the Maximum TFCA Funds Awarded as a Percentage of

Eligible Costs specified in Section 9 of Attachment A for each of the Project components.

If this Agreement is terminated pursuant to Section IV.7 of this Agreement, the Air District will calculate

the final TFCA Funds Awarded, which is the amount of funds to which the Project Sponsor is entitled, by

first determining the TFCA Funds Awarded based on the actual length constructed, the Maximum TFCA

Funds Awarded, the Maximum TFCA Funds Awarded as a Percentage of Eligible Costs, and the

Maximum TFCA Funds Awarded Per Mile, as specified in Section 9 of Attachment A, and the actual

eligible project cost, for each of the approved bicycle facility components, multiplying the ratio of actual

Project Operational Period completed, which is the number of days after the start date of the Project

Operational Period, during which the Project is in compliance with the Agreement, to the total number

days in the Project Operational Period specified in Section 6 of Attachment A:

Final TFCA Funds Awarded = TFCA Funds Awarded × (number of days of actual Project

Operational Period completed ÷ total number of days in the Operational Period)

4. Eligible Costs: Eligible Costs may only be incurred on or after the Effective Date of this Agreement and

prior to the date of the Project Operational Period, and must be directly and solely related to the

implementation (site preparation, installation, and construction) of the Project.

For the purpose of determining eligibility of Project costs, the date for equipment costs incurred shall be

the date the Project Sponsor submits a signed purchase order or other document that commits the order,

and for direct labor costs incurred shall be the date such services were rendered.

Eligible Costs include:

A. Costs for the purchase of equipment and material(s) (i.e., concrete, asphalt, and other materials)

including tax, and shipping fees;

B. Equipment rental costs (i.e., dump truck, concrete road paver, and other equipment) including tax,

and shipping fees;

C. Documented labor charges (salaries, wages, and benefits);

D. Contractor labor charges; and

E. Permit fees.

Costs that are not included in the list above are not Eligible Costs, for example:

A. Costs related to maintenance, repairs, rehabilitation, or upgrade of existing bicycle facilities;

B. Costs related to any other work performed or equipment purchased that is not required for the Project;

27



C. Operating costs (e.g., salaries after the Project is open for public use, ongoing training/support,

advertising, and rent/leases);

D. Costs related to planning activities not directly related to the implementation of the Project or

feasibility studies; and

E. Indirect and administrative costs.

5. Invoice and Payment Schedule (Section III.2): The Project Sponsor shall submit a single invoice (Final

Invoice) along with the Expenditure Report as specified in Attachment C.

The Final Invoice shall be prepared on the Air District’s General Invoice Form and shall include:

A. The Project Number;

B. An itemized list of all expenses incurred by the Project Sponsor, specifying which are Eligible Costs

and dates labor was performed and equipment was purchased;

C. The total funds being requested;

D. Supporting documentation of Project Sponsor’s payments made for goods and services incurred, such

as copies of receipts for services paid; invoices from vendors, consultants, or contractors, with an

explanation of the goods or services provided for the Project; and time sheets documenting hourly

labor costs incurred.

The Air District will not process the Final Invoice until all current Project reporting obligations are

fulfilled.

The Air District shall retain fifteen percent (15%) of the final TFCA Funds Awarded until the Air District

receives and approves the Final Report specified in Attachment C.

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ATTACHMENT C

MONITORING OF PROJECT PERFORMANCE


1. Semi-annual Reports (Section II.6): The Project Sponsor shall submit Semi-annual Reports to the Air

District summarizing Project progress. Semi-annual Reports shall be prepared on the Air District’s Semi-

annual Report form.

Due Dates: Beginning sixty (60) calendar days after the Effective Date, every April 15 and October 15

until the Expenditure Report has been submitted.

2. Expenditure Report (Sections II.6, II.8): The Project Sponsor shall submit an Expenditure Report to the

Air District. Expenditure Report shall be prepared on the Air District’s Expenditure Report form.

Due Date: By January 15, 2020

The Expenditure Report shall include the following information:

A. A table that contains the applicable information for each of the Project bicycle facilities:

a. Activity centers or transit stop serviced by, and distance from, the bicycle facility;

b. Date construction or installation completed and bicycle facilities are placed into public

service;

c. For bikeways: length, “cross section”, page and section numbers of Chapter 1000 of the

California Highway Design Manual pertaining to the design of the Project bikeways,

and two (2) or more days of pre-project bicycle count data using methodology and count

forms from the National Bicycle and Pedestrian Documentation Project;

d. For bicycle racks and lockers: address or exact location (i.e. cross street), physical

features and dimensions, security features and mechanism for gaining access, and

maximum number of bicycles that can be accommodated per locker/rack at any given

time.

B. Maps showing the locations of each of the installed Project bicycle facilities.

C. Photographs that demonstrate that all the bicycle facilities are installed or constructed.

D. Documentation that the Project Sponsor has acknowledged the Air District as a Project funding

source, such as photographs of the funded bicycle facilities with Air District logos attached;

documentation of use of the Air District’s logo on promotional materials, brochures, handbooks,

and maps that promote or inform the public about the Project services; and copies of press

releases and newsletter articles related to the Project.

E. A discussion of any pertinent issues or problems experienced with the Project to date.

3. Final Report (Section II.6): The Project Sponsor shall submit a Final Report to the Air District. The Final

Report shall be prepared on the Air District’s Final Report form.

Due Date: By January 15, 2021

The Final Report shall be prepared and submitted after the bicycle facilities have been in service for a

minimum of 12 months and shall include the following information:

A. A description of the Project;

B. A discussion of any pertinent issues or problems experienced with the Project to date;

C. A description of the average daily use (weekday and weekend) of each of the Project bicycle

facilities;

D. For bikeways: two (2) or more days of bikeway post-project bicycle count data using

methodology and count forms from the National Bicycle and Pedestrian Documentation Project.

29




30



ATTACHMENT D

INSURANCE REQUIREMENTS

Verification of Coverage

Project Sponsor shall provide, and require any sub-awardee to provide, the Air District certificates and/or other

evidence of the insurance coverage required below. The Air District reserves the right to require Project Sponsor

to provide complete, certified copies of any insurance offered in compliance with these specifications.

Certificates, policies and other evidence provided shall specify that the Air District shall receive thirty (30)

calendar days advanced notice of cancellation from the insurers.

The Project Sponsor may submit evidence that listed insurance is not required for the Project.

Acceptability of Insurers

Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A: VII. The Air District

may, at its sole discretion, waive or alter this requirement or accept self-insurance in lieu of any required policy

of insurance.

Minimum Scope of Insurance

Throughout the Project Operational Period, Project Sponsor shall obtain and maintain in full force and effect the

insurance as set forth below, and shall require any third party to obtain and maintain in full force and effect the

insurance as set forth below. Project Sponsor must initial next to each insurance requirement to confirm

understanding and Agreement with the applicable Project insurance requirements:

1. Liability Insurance

Corporations/Private and Public Entities - a limit of not less than $1,000,000 per occurrence. Such

insurance shall be of the type usual and customary to the business of the Project Sponsor, and to the

operation of the vehicles, engines or equipment operated by the Project Sponsor.

2. Property Insurance

Repower and New Vehicle/Equipment Purchase - in an amount of not less than the insurable value

of Project Sponsor’s vehicles, engines or equipment funded under the Agreement of which this

Attachment is a part, and covering all risks of loss, damage or destruction of such vehicles, engines

or equipment.

3. Workers Compensation Insurance.

Workers Compensation Insurance - as required by California law and employers’ liability insurance

with a limit not less than $1 million.

Initial

Initial

Initial

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32

ATTACHMENT 2

33

PREPARED BY: LISA VELASCO Human Resources Director

Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director


TOWN OF LOS GATOS



ITEM NO: 4




SUBJECT: APPROVE MARKET EQUITY ADJUSTMENTS FOR THE AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES (AFSCME) AND AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE AMOUNT OF $50,816 FROM ESTIMATED AVAILABLE FY 2018/19 OPERATING REVENUES

RECOMMENDATION: Staff recommends that the Town Council approve market equity adjustments for the American Federation of State, County and Municipal Employees (AFSCME) and authorize salary and benefits budget adjustments in the amount of $50,816 from estimated available FY 2018/19 operating revenues. BACKGROUND: In accordance with the Town’s Employer-Employee Relations Resolution No. 1974-41, representatives of the Town and AFSCME met and conferred in good faith and within the scope of representation in an effort to reach agreement for a successor Memorandum of Understanding (MOU) that was approved during the August 7, 2018 Council meeting. The MOU for the Town Employees’ Association (TEA) was subsequently approved during the August 21, 2018 Council meeting and the Police Officers’ Association MOU will be presented for approval during the October 16, 2018 Council meeting. DISCUSSION:

AFSCME was the first bargaining group to reach a settlement for a successor MOU with the Town and did not receive the benefit of market equity adjustments that were negotiated in

47

OF 2 SUBJECT: APPROVE MARKET EQUITY ADJUSTMENTS FOR THE AMERICAN FEDERATION

OF STATE, COUNTY AND MUNICIPAL EMPLOYEES (AFSCME) AND AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE AMOUNT OF $50,816 FROM ESTIMATED AVAILABLE FY 2018/19 OPERATING REVENUES

OCTOBER 11, 2018

S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\04 AFSCME Agreement\Staff Report .docx 10/11/2018 3:02 PM

DISCUSSION (Continued): later agreements with TEA and POA. To maintain parity and continuation of good faith bargaining, staff surveyed the Town’s comparable agencies and recommend the following market equity adjustments outlined below and reflected in Attachment 1: Equipment Mechanic – 2.4% Lead Parks & Maintenance Worker – 3.9% Parks & Maintenance Worker – 3.9% Parks & Maintenance Worker Assistant – 3.9%

Town Arborist – 3.9%

CONCLUSION: The AFSCME recommended market equity adjustments are within the parameters provided to Town’s negotiators by the Town Council. It is recommended that the Salary Schedule (Attachment 1) reflecting the adjustments are approved. FISCAL IMPACT:

The anticipated fiscal impact for all salary adjustments in FY 2018/2019 is $50,816. Funding to support the FY 2019/2020 ongoing cost each year will be incorporated into the proposed future year budgets for Council approval.


This is not a project defined under CEQA, and no further action is required.

Attachment: 1. AFSCME Salary Schedule

48

Town of Los Gatos

Salary Schedule for AFSCME Classifications

Effective July 01, 2018

Class

CodeClassification Title

Range

AF1Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

6620 Equipment Mechanic 03 $33.64 $35.32 $37.09 $38.94 $40.89 $42.936670 Facility Technician 02 $31.31 $32.88 $34.52 $36.25 $38.06 $39.966600 Lead Parks & Maintenance Worker 07 $35.73 $37.52 $39.40 $41.37 $43.44 $45.616650 Parks & Maintenance Worker 05 $28.74 $30.18 $31.69 $33.27 $34.93 $36.686660 Parks & Maintenance Worker Trainee 04 $23.48 $24.65 $25.88 $27.17 $28.53 $29.966605 Senior Parks & Maintenance Worker 06 $31.28 $32.84 $34.48 $36.20 $38.01 $39.916610 Town Arborist 03 $34.12 $35.83 $37.62 $39.50 $41.48 $43.55

Reflects General Increase of 2.5% plus Market Equity Adjustments

Updated: October 2018 ATTACHMENT 1

49




TOWN OF LOS GATOS



ITEM NO: 5




SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND THE POLICE OFFICERS ASSOCIATION AND AUTHORIZE THE TOWN MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE AMOUNT OF $513,728 FROM ESTIMATED AVAILABLE FY 2018/19 OPERATING REVENUES

RECOMMENDATION: Staff recommends that the Town Council:

A. Approve a labor agreement between the Town of Los Gatos and the Police Officers’ Association (POA) and authorize the Town Manager to execute the Memorandum of Understanding (Attachment 1);

B. Authorize salary and benefits budget adjustments in the amount of $513,728 from estimated available FY 2018/19 operating revenues.

BACKGROUND:

In accordance with the Town’s Employer-Employee Relations Resolution No. 1974-41, representatives of the Town and POA have met and conferred in good faith and within the scope of representation in an effort to reach agreement for a successor Memorandum of Understanding (MOU). The revised agreement showing the changes from the previous MOU is contained in Attachment 1. The MOU is a labor agreement that identifies specific terms and conditions of employment applicable to the employees represented by that agreement.

50

OF 3 SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND

THE POLICE OFFICERS ASSOCIATION AND AUTHORIZE THE TOWN MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING

B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE AMOUNT OF $513,728 FROM ESTIMATED AVAILABLE FY 2018/19 OPERATING REVENUES


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BACKGROUND (continued): The Town has two other represented groups, the American Federation of State, County and Municipal Employees (AFSCME) and the Town Employees’ Association (TEA). The AFSCME agreement was approved during the August 7, 2018 Town Council meeting and the TEA agreement was approved during the August 21, 2018 Town Council meeting. DISCUSSION:

The Town’s current agreement with POA expires on September 30, 2018. In July 2018, the Town and POA began negotiating for a successor agreement. A tentative agreement for a three-year term was reached in September and POA membership ratified on September 27, 2018. Major provisions of the agreement:

1. Term: October 1, 2018 to September 30, 2021 2. Salary:

a. Effective in the first full pay period of October 2018, the Town will provide a 2.5% salary increase.

b. Effective in the first full pay period of October 2019, the Town will provide a 2.5% salary increase and an additional increase of 1.5%.

c. For year three, the parties agree to re-open on the subject of wages only. 3. Equity Adjustments: Effective in the first full pay period of October 2018, add equity

adjustments indicated in Section 5.5 (see Attachment 1). 4. Holiday Pay: Conversion of holiday-in-lieu pay from 80 hours per calendar year to a 4%

premium pay. 5. Retiree Health: Elimination of retiree health benefits for all employees hired on or after

October 1, 2018, except for the minimum employer contribution as required by the Public Employees’ Medical and Hospital Care Act (PEMHCA).

6. Vacation Cash-Out: Language added to comply with Internal Revenue Service rules regarding constructive receipt and irrevocable elections.

7. Sick Leave Cash-Out: Elimination of sick leave cash-out for all employees hired on or after October 1, 2018.

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OF 3 SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND

THE POLICE OFFICERS ASSOCIATION AND AUTHORIZE THE TOWN MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING

B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE AMOUNT OF $513,728 FROM ESTIMATED AVAILABLE FY 2018/19 OPERATING REVENUES


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DISCUSSION (continued):

8. Compensatory Time Off Cash-Out: Revised language to be compliant with the Internal Revenue Service rules regarding constructive receipt and irrevocable elections.

9. CalPERS Employee Contribution: Beginning October 1, 2019, Increase Classic employee pension contribution 3%, for a total contribution of 12%.

The Town and POA have also agreed to various MOU language updates. These updates clarify existing language, delete obsolete language, and ensure compliance related to the Town’s contract for retirement and medical benefits provided under the California Public Employees’ Retirement System (CalPERS) and PEMHCA. The updates do not change existing benefits nor is there a related fiscal impact (see Attachment 1). CONCLUSION: The POA agreement has been prepared within the parameters provided to Town’s negotiators by the Town Council and has been ratified by the POA membership. It is recommended that the proposal be approved, and the Town Manager be authorized to execute the MOU. FISCAL IMPACT:

The anticipated fiscal impact for all salary adjustments in FY 2018/2019 is $513,728. The requested budget adjustments in the amount of $513,728 from estimated available FY 2018/19 operating revenues will provide funding for the additional salary and benefit cost for FY 2018/19.

Funding to support the FY 2019/2020 ongoing cost each year will be incorporated into the proposed future year budgets for Council approval.



Attachment: 1. October 1, 2018 through September 30, 2021 POA Memorandum of Understanding showing track changes

52

TOWN OF LOS GATOS

AND

LOS GATOS POLICE OFFICERS’ ASSOCIATION

MEMORANDUM OF UNDERSTANDING

October 1, 20168 – September 30, 202118

ATTACHMENT 1

53

MEMORANDUM OF UNDERSTANDING BETWEEN THE TOWN OF LOS GATOS AND THE LOS GATOS POLICE OFFICERS ASSOCIATION THIS AGREEMENT, SIGNED ON February 7, 2017, IS ENTERED INTO AS OF October 1, 20186, BETWEEN THE TOWN OF LOS GATOS, HEREINAFTER REFERRED TO AS THE "TOWN", AND THE LOS GATOS POLICE OFFICERS ASSOCIATION, HEREINAFTER REFERRED TO AS "POA". Pursuant to Town Resolution 1974-41 of the Town of Los Gatos and Section 3500 et. seq. of the Government Code, the duly authorized representatives of the Town and POA, having met and conferred in good faith concerning the issues of wages, hours, and terms and conditions of employment, as herein set forth, declare their agreement to the provisions of this Memorandum of Understanding. FOR THE TOWN: FOR POA:

Laurel Prevetti, Town Manager

Bill Hoyt, Police SergeantCorporal

Lisa Velasco, Human Resources DirectorArn Andrews, Assistant Town Manager _____________________________________ Lisa Velasco, Human Resources Director _____________________________________ Donna Williamson, Liebert Cassidy Whitmore

Kevin Elliott, Police Sergeant ______________________________________ Kevin Baughn, Police Officer ______________________________________ John Alldredge, Police Officer

Allyson Hauck, Renne Sloan Holtzman Sakai LLP

Peter Hoffmann, Attorney for POA

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APPROVED AS TO FORM:

Robert Schultz Town Attorney

55

Town of Los Gatos and Los Gatos Police Officers’ Association Memorandum of Understanding October 1, 20186 – September 30, 202118

TABLE OF CONTENTS

Preamble ...................................................................................................... 1

Term ...................................................................................................... 1

1. Employer-Employee Relations ............................................................... 1

2. Savings Clause ........................................................................................ 1

3. Payroll Deduction ................................................................................... 1

4. Non-Discrimination ................................................................................ 2

4.1 General Provisions Regarding Americans with Disabilities Act .... 2

5. Salary ...................................................................................................... 2

5.1 Intent ............................................................................................ 2

5.2 Effective 20186 ............................................................................. 2

5.3 Effective 20197 ............................................................................. 2

5.4 Effective 2020…………………………………………………………………………..

5.5 Salary RangeMarket Equity .......................................................... 2

5.6 Salary Range……………………………………………………………………………..

6. PERS Benefits ......................................................................................... 2

6.1 Town Contribution ....................................................................... 2

6.2 PERS 3% At 50 Retirement Option Classic Members ................... 3

6.3 PERS 2.7% at 57 Retirement Option New Members .................... 3

7. Education Incentive Pay ......................................................................... 3

7.1 POST Certificate ............................................................................ 3

7.2 Four-year Degree Incentive .......................................................... 3

7.3 Grandfather Clause ...................................................................... 3

8. Special Pays ............................................................................................ 4

8.1 Assignment Pay ............................................................................ 4

8.2 Bilingual Pay ................................................................................. 4

8.3 Canine Pay .................................................................................... 4

9. Field Training Officers ............................................................................ 5

10. Acting Supervisor Sergeant Pay ............................................................. 5

11. Reimbursement of Expenses .................................................................. 5

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TABLE OF CONTENTS

12. Tuition Reimbursement ......................................................................... 5

13. Health and Welfare Benefits and Rate of Town Contribution ............... 6

13.1 Insurance Programs (Dental, Medical, Vision)Cafeteria Plan ...... 6

13.2 Cash Allocation ProgramDental ................................................... 6

13.3 Supplemental Health and Welfare Benefits (Life, Disability, and

Employee Assistance Programs)Medical ............................................... 7

13.4 Vision………………………………………………………………………………………..

13.5 Cash-In-Lieu Plan………………………………………………………………………

13.6 Supplemental Health and Welfare Benefits………………………………

14. Retiree Medical PremiumsHealth .......................................................... 7

14.1 Health Reimbursement Account for Eligible Retirees Hired ..........

before October 1, 2018.................................................................

14.15. Uniforms ....................................................................................... 7

15.16. Mileage Reimbursement .............................................................. 7

16.17. Payroll Periods .............................................................................. 7

17.18. Paychecks ..................................................................................... 8

18.19. Deferred Compensation ............................................................... 8

19.20. Overtime ....................................................................................... 8

20.21. Duty Extension ............................................................................. 8

21.22. Call Back ....................................................................................... 9

22.23. Vacation Schedule ........................................................................ 9

23.24. Vacation and Overtime Cash-Out ................................................. 9

24.25. Holidays and Holiday Pay ............................................................. 9

25.26. Personal Leave ............................................................................10

26.27. Sick Leave ...................................................................................10

27.28. Sick Leave Cash-Out Program .....................................................10

28.1 Annual Sick Leave Cash-Out .......................................................10

28.2 Sick Leave Cash-Out Upon Termination .....................................10

28.3 Unused Sick Leave Upon Retirement .........................................11

28.29. Military Leave .............................................................................11

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TABLE OF CONTENTS

29.30. Bereavement/Compassion Leave ...............................................11

30.31. Leave Without Pay .....................................................................11

31.32. Accrual of Benefits .....................................................................12

32.33. Workers’ Compensation .............................................................12

33.34. Jury Duty .....................................................................................12

34.35. Outside Employment ..................................................................12

35.36. Residency Requirement .............................................................12

36.37. Layoff Policy................................................................................12

37.38. Vehicles ......................................................................................12

38.39. Promotions .................................................................................12

39.40. Probationary Period ...................................................................13

40.41. Performance Evaluations ...........................................................13

41.42. Reinstatement ............................................................................13

42.43. Re-employment ..........................................................................13

43.44. Grievance Procedures ................................................................14

44.45. Attendance .................................................................................15

45.46. Completeness of MOU ...............................................................15

46.47. Association Notification or Communications .............................15

47.48. Catastrophic Time Bank ..............................................................15

48.49. Reopener ....................................................................................15

50. Me Too Clause ......................................................................................15

49.51. Update of Personnel Rules

Salary Schedule Exhibit A

Resolution 1991-91 Exhibit B

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Town of Los Gatos Los Gatos Police Officers’ Association October 1, 20186 – September 30, 202118

Page 1

Town of Los Gatos and Los Gatos Police Officers Association Comprehensive Memorandum of Understanding

On Salaries, Fringe Benefits and Working Conditions

Preamble The authorized representatives of the Town of Los Gatos, hereinafter referred to as the "Town" and the authorized representatives of the Town of Los Gatos Police Officers Association hereinafter referred to as "Association" do jointly accept and agree to all the terms and conditions of employment set forth in this comprehensive memorandum of understanding pursuant to Town Resolution 1974-41 of the Town of Los Gatos. This understanding shall apply to represented employees assigned to those classifications listed on Exhibit A when classifications are created which fall under the representation of POA, this understanding shall also apply. The terms and conditions of employment set forth in this understanding have been discussed in good faith by the authorized representatives of the Town and the authorized representatives of the Police Officers Association. They agree to recommend acceptance by the employees of all terms and conditions set forth herein. Following said acceptance by the Association, authorized representatives of the Town agree to recommend to the Town Council that all terms and conditions set forth herein be approved by resolution. Upon adoption of said resolution, all terms and conditions so incorporated shall become effective without further action by either party.

Term The term of this Memorandum of Understanding shall be two three years, commencing on October 1, 20168, and terminating on September 30, 202118.

Section 1. Employer-Employee Relations The Association recognizes the existence of Town Resolution 1974-41, and its successor if any, during the term of this MOU. Recognition of any amendments to this resolution does not imply POA has agreed to the changes.

Section 2. Savings Clause If any provision or the application of any provision of this agreement as implemented should be rendered or declared invalid by any court action or decree or by reasons of any preemptive legislation, the remaining sections of this agreement shall remain in full force and effect for the duration of this agreement

Section 3. Payroll Deduction Any employee may sign and deliver to the Town Association an authorization for payroll deduction of membership dues or service fee. The Town agrees to remit to the Association all monies deducted accompanied by a list of workers for whom such deductions have been made and indicating any changes in personnel from the list previously furnished. The Association shall certify in writing to the Town any changes in the amount of membership dues or service fee. The Town shall not be obligated to put into effect any new, changed, or discontinued deduction until the pay period commencing thirty (30) days or longer after such submission. The Association shall indemnify and hold harmless the Town against any and all suits, claims, demands, and liabilities that may arise out of, or by reason of, any action or omission of the Town in complying with this Section. 59


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Section 4. Non-Discrimination The Town and Association agree that all provisions of this agreement shall be applied equally to all employees covered herein without favor or discrimination because of race, religious creed, color, sex (including pregnancy, childbirth, and related medical conditions), age (over 40), gender, gender identity, gender expression, sexual orientation, national origin, ancestry, political or religious affiliation, Association membership or activity on behalf of the Association, marital status, military or veteran status, or physical disability, mental disability, medical condition, or genetic information or any other basis prohibited by applicable federal, State or Town law.. Association and Town support equal employment opportunity in hiring, and will support all State and Federal regulations regarding equal employment opportunity.

4.1 General Provision regarding Americans with Disabilities Act A. Because the ADA requires accommodations for individuals protected under the Act, the Association recognizes

the Town's obligation to comply with all provisions of the ADA on a case-by-case basis. B. The Association recognizes that the Town has the legal obligation to meet with the individual employee to be

accommodated before any adjustment is made in working conditions. The Association will be notified of these proposed accommodations.

C. Any accommodation provided to an individual protected by the ADA shall not establish a past practice.

Section 5. Salary 5.1 Intent It is the intent of the Town to maintain salaries and benefits at a level that attracts and retains quality employees. The parties agree that surveys of the wages and benefits of police officers performing comparable work for comparable agencies provide information useful in ensuring that the Town continues to meet this goal.

5.2 Effective 20186 Effective the first pay period containing October 1, 2016, Police Officers, Police Corporals, and Police Sergeants will receive a 2.5% increase to base salary. Effective in the first full pay period of October 2018 the Town will provide a two and a half percent (2.5%) salary adjustment for all bargaining unit members.

5.3 Effective 20197 Effective the first pay period containing October 1, 2017, Police Officers, Police Corporals and Police Sergeants will receive a 2.5% increase to base salary. Effective in the first full pay period of October 2019 the Town will provide a two and one-half percent (2.5%) salary increase for all bargaining unit members. Effective in the first full pay period of October 2019 bargaining unit members shall receive an additional increase of 1.5%.

5.4 Effective 2020 The parties agree to re-open on the subject of wages only.

5.5 Market Equity Effective in the first full pay period in October 2018 market equity adjustments as follows: Police Officer - 5.0% Corporal – 5.0% Sergeant – 5.5%

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5.46 Salary Range Effective October 1, 2014, the Sergeant rank became a 4-step range. Any new Sergeant appointed after that date is appointed to the 4-step range. Acting Sergeant pay will be paid at the top of the new range.

Section 6. PERS Benefits

6.1 Town Contribution Effective December 13, 1998, the Town ceased its participation in the Public Employee Retirement System "Employer Paid Member Contributions" (EPMC) provision. Concurrently, the Town began paying in salary to the employees covered by this memorandum of understanding the equivalent dollar amount of the former EPMC (9% of salary). These employees were then responsible for making their own member contributions. The POA acknowledged that implementation of this change had a cost impact to the Town which was equivalent to approximately 1.6% of total compensation. Substantially concurrent with the adoption of the 1998-2000 memorandum of understanding, the Town Council adopted a Resolution materially the same as that recommended by the Public Employee Retirement System to implement the provisions of 414 (h) (2) of the Internal Revenue Code (IRC). The POA accepted the terms of this Resolution and acknowledged that the Resolution will apply to all current and future members of the POA during the term of this agreement.

6.2 PERS 3% at 50 Retirement Option Classic Members Effective June 24, 2001, the Town amended its contract with the California Public Employees’ Retirement System to include the 3% at 50 option for members of the bargaining unit. This retirement formula is applicable to employees hired prior to January 1, 2013 or “cClassic” Members employees (as defined in the California Public Employees’ Pension Reform Act or 2013 (PEPRA) and CalPERS guidance) hired on or after January 1, 2013 with reciprocity in the PERS retirement system. The Town’s contract with CalPERS for the 3% at 50 option also includes the following optional benefits:

▪ Single Highest Year ▪ 1959 Survivor Benefit Level 4 ▪ Conversion of Unused Sick Leave to Service Credit

Effective October 1, 2019 or as soon as administratively feasible following that date, Classic Members will contribute 3% more towards PERS in accordance with the requirements of Government Code section 20516(a).

6.3 PERS 2.7% at 57 Retirement Option for New Member Employees Hired on or After January 1, 2013 For employees hired on or after January 1, 2013, who meet the definition of nNew mMember under Gov’t Code 7522.04(f), the Town will provide the 2.7% at 57 retirement benefit. For employees hired on or after January 1, 2013 will use the 36-month final average compensation (Gov’t Code 20037). New mMembers hired on or after January 1, 2013 shall pay an amount that is equal to one half (1/2) the normal cost of his/her CalPERS pension as determined annually by CalPERS, or the current contribution rate of similarly situated employees, whichever is greater (Gov’t Code 7522.30(c)). Employees eligible for this retirement formulae retain the option of conversion of unused sick leave to service credit. 61


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Section 7. Education Incentive Pay

7.1 POST Certificate Qualified employees shall receive one of the following payment amounts in accordance with Exhibit A:

A. Employees in their represented classifications who have been awarded an Intermediate POST Certificate: An

additional 5% of base salary.

B. Employees in their represented classifications who have been awarded an Advanced POST Certificate: An additional 7.5% of base salary.

7.12 Four-Year Degree Incentive Pay Two and one-half percent Additional( 2.5%) of base salary shall be paid for any member who possesses a four- year degree.

7.23 Grandfather Clause

7.23.1 For employees hired prior to January 1, 2008, who qualify to participate in the Town’s Education Incentive program prior to July 1, 2008; served a minimum of fifteen years with the Town of Los Gatos; and possess an Associates of Arts Degree or meet the minimum requirements to obtain an Associates of Arts Degree in a related field, shall be eligible for an additional 2.5% increase in base salary effective the first full pay period following their fifteenth anniversary date from his/her hire date (members with a four year degree are not eligible for this benefit).

7.23.2 For employees who are in the process of being hired prior to January 1,2008; who qualify to participate in the Town’s Education Incentive program within six months of hire; served a minimum of fifteen years with the Town of Los Gatos; and possess an Associates of Arts Degree or meet the minimum requirements to obtain an Associates of Arts Degree in a related field, shall be eligible for an additional 2.5% increase in base salary effective the first full pay period following their fifteenth anniversary date from his/her hire date (members with a four-year degree are not eligible for this benefit).

7.23.3 Eliminate Retention Incentive pay for ten and fifteen years for members hired after January 1, 2008.

Section 8. POST Certificate Pay Qualified employees shall receive one of the following payment amounts in accordance with Exhibit A:

A. Employees in their represented classifications who have been awarded an Intermediate POST Certificate: An

additional 5% of base salary.

B. Employees in their represented classifications who have been awarded an Advanced POST Certificate: An additional 2.5% of base salary for a total of 7.5%.

Section 89. Special Pays Officers are limited to one special assignment pay or canine pay. Officers who qualify for bilingual pay may receive bilingual pay in addition to a special assignment pay or canine. 62


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89.1 Special Assignment Pay Town shall provide a 5% special assignment pay incentive to Association represented personnel who are routinely and consistently assigned as follows: 9.1.1 Motorcycle Patrol Premium- for unit members who operate and/or patrol on assigned to Mmotorcycle 9.1.2 School Resource Officer Duty Pay – For unit members who are assigned to School Resource Officer duty Duty, School Resource Officer, and Detectives. 9.1.3 Detective Division Premium- for unit members who are routinely assigned to a detective or investigative division 9.1.4 Police Administrative Officer-for unit members who are assigned to police administration to provide support for the police chief and command staff in the operation of the police department. Assignment for special pay purposes shall be done using Town Personnel Action Forms. While the Town maintains a Lieutenant rank, any specialty pays for Detective and Administrative positions are eliminated for the ranks of Corporal and Sergeant. Officers Association represented personnel removed from specialty positions on a temporary basis for departmental purposes and through no fault or request of their own shall continue to receive specialty pay for a maximum of 30 calendar days. The parties agree that special assignment premiums are pensionable as determined by CalPERS.

89.2 Bilingual Pay The Town will pay an additional 2.5% above base pay for employees who are routinely and consistently assigned to communicate in languages other than Englishbilingual ability. Bilingual pay will be for Spanish, Russian, Arabic, Chinese, Vietnamese and any other language designated by the Chief of Police . The Town will determine the qualifying criteria including the test and the application to the specific job assignment.

98.3 Canine Pay Officers who are routinely and consistently assigned to handle, train and board a canine in accordance with this section are eligible for Canine Officer/Animal Premium. Officers assigned to the canine unit are required to care for, train, groom, feed, and bathe their assigned dog. The parties agree that two hours per week is a reasonable amount of time to care for the canine. The Town compensates Canine officers a total of five (5) hours per week for additional time spent caring for the canine. Two (2) hours of this additional time is outside of the regular shift. The remaining three (3) hours is provided as release time. Call-back as defined in the MOU shall not apply for the purposes of caring for the dog. Compensation provided during the additional paid time and release time is mutually acknowledged to compensate for additional time required to care for, train, groom, feed, and bathe the assigned canine.

98.3.1 Canine Pay Premium Compensation for the 2 hours outside of the regular shift is paid as a 5% premium on all hours worked.

98.3.2 Canine Release Time Canine Officers on a 4-10 schedule shall be released in a paid capacity for 0.75 hours prior to the “normal” conclusion of each regularly scheduled shift (4 shifts per week equaling 3 hours per week) for the normal care of the canine, including but not limited to training, grooming, feeding, bathing, and routine veterinarian care.

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Canine Officers on a 12-hour schedule shall be released in a paid capacity for 1.0 hours prior to the “normal” conclusion of each regularly scheduled shift (3 shifts per week equaling 3 hours per week) for the normal care of the canine, including but not limited to training, grooming, feeding, bathing, and routine veterinarian care. In the event that a Canine Officer is not released in sufficient time prior to the conclusion of his or her shift, the officer will be paid for additional time after the end of shift to compensate them for 0.75 or 1.0 hours of Canine care time as appropriate. The Town recognizes that this may result in overtime.

98.3.3 Commute Time with Canine Commute time with the canine shall not be considered working time. If there is an event requiring emergency veterinarian care, travel to the veterinarian will be compensable work time.

Section 9.4 Field Training Officers Training Premium In addition to the above special pays, officers assigned by the Chief of Police as Field Training Officers shall also receive the 5% incentive whenever providing training to a Department member for which a training observation report is required or when completing special assignments directly related to the Field Training Officer Program with prior approval of the Chief of Police. Attendance at FTO meetings, training provided at briefings, or other training provided in conjunction with the Department’s annual Advanced Officer Training or other on-going general training to Department members does not qualify for the 5% incentive.

Section 10. Acting Supervisor Sergeant Pay Police Officers working as Aacting supervisors shall be compensated at Step "4" of the Sergeant’s rate of pay. Town shall periodically review the actual time use of acting supervisor designations in order to determine the necessity of additional permanent supervisory personnel.

Section 11. Reimbursement of Expenses The Town shall pay claims for reimbursement within 30 days following the complete and accurate submission of claims as approved by the Finance Director.

Section 12. Tuition Reimbursement Town will reimburse 100% of the cost of books, university/school fees (except parking) and tuition. Tuition and school fees shall be reimbursed up to the full-time rates of San Jose State University at applicable Undergraduate or Graduate rates per school term. The maximum reimbursement per employee per fiscal year is equivalent to two (2) semesters. The reimbursement shall be only for courses that are directly related to the employee’s position as determined by the Town Manager, including general education courses that are generally related to attainment of a job-related degree or certification. General education courses not generally related to the employee’s position will not be eligible for reimbursement. Reimbursement shall be taxed pursuant to the State and Federal Regulations. Application for Tuition Reimbursement shall be made to the Town before the course begins. Prior to reimbursement of costs, all course work must be completed with a passing grade of “C” or equivalent when numerical score or pass/fail is given. Individuals requesting reimbursement must currently be employed by the Town to be eligible for reimbursement. Any employee who terminates employment with the Town within one year from the completion of a class or classes, for which tuition reimbursement was paid, shall refund all tuition paid under this provision, unless required to attend by the appointing authority. 64


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Section 13. Health and Welfare Benefits and Rate of Town Contribution The Town contracts with CalPERS for the purpose of providing employees and their eligible dependents with medical insurance benefits. During calendar year 2018, the Town will pay a maximum contribution of $133 per month to CalPERS for each eligible active employee towards the purchase of medical insurance for those employees who enroll in and receive such insurance through the Town. Beginning January 1, 2019, the Town’s maximum monthly contribution for each eligible active employee shall be equal to the minimum employer contribution required under Public Employees’ Medical and Hospital Care Act (PEMHCA), as may be adjusted by CalPERS from year to year. Employees may participate in either the Insurance Program or the Cash Allocation Program. Employees shall select either the Insurance Program or the Cash Allocation Program annually during the Town’s open enrollment period or at any other time permitted by the PEMHCA, such as a qualifying even (e.g. birth of a child, marriage, spouse losing medical insurance, etc.).

13.1 Insurance ProgramsCafeteria Plan During the term of the MOU, the Town agrees to maintain a Cafeteria Plan, pursuant to Section 125 of the Internal Revenue Code, for the purpose of providing eligible active employees with access to various health and welfare benefits. Benefits available through the Cafeteria Plan include medical insurance, dental insurance, vision insurance and life insurance benefits.

13.2 Dental Employees choosing this option instead of Cash-in-Lieu will be provided 100% of the Delta Dental DPO Plan premium less a $15.00 employee contribution. If the premium cost of the dental plan exceeds the Town contribution, the employee shall pay through payroll deductions the difference between the monthly premium and the amount contributed by the Town. The Town will pay 100% of the premium for employees choosing to participate in the DeltaCare USA Plan. A. Dental: The Town shall contribute up to the Delta Dental Premier premium for each employee at the employee’s

level of participation (i.e., Employee Only, Employee Plus One, or Employee Plus Two or More.) B. Medical: The Town will provide a choice of coverage under the Public Employees' Retirement System Health

Benefits Medical Program. The Town will provide payment of medical insurance premiums equal to The full cost of Kaiser North Employee Only and for dependents, Town will pay 90% of the difference between Kaiser Employee Only and Kaiser level of participation (Employee Plus One or Employee Family, depending on family status). If the employee chooses medical coverage under a program more expensive than Kaiser North, the difference will be paid by the employee through payroll deduction.

13.3 Medical The Town will provide active employees with a medical allowance equal to 100% of the cost of the Kaiser Bay Area Medical Insurance Program premium offered by the Public Employees’ Retirement System Health Benefit Medical Program for the Employee Only for all active employees. For dependents, the Town will pay 90% of the difference between Kaiser Employee Only and Kaiser level of participation (Employee Plus One or Employee Family, depending on family status). If the employee chooses medical coverage under a program more expensive than Kaiser Bay Area, the employee will pay the difference between the Town-provided medical allowance and the cost of the more expensive program through payroll deduction. The Town’s contribution towards medical insurance set forth in Section 13 (the PEMHCA minimum) will be deducted from the amount of contribution provided by this Section.

13.4 Vision: The Town shall pay for employee-only coverage under the Town’s Vision Service Plan (VSP).

Employees may enroll eligible dependents at their own cost. 65


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13.25 Cash- In-Lieu PlanAllocation Program Employees have the option of choosing all available coverages or, upon providing proof of other medical coverage, may choose to opt out of the Town’s coverage and be provided with cash-in-lieu. Employees who choose to receive the cash-in-lieu must first show proof of alternative minimum essential medical coverage for the employee and employee’s tax family (individuals for whom the employee expects to claim a personal exemption deduction). Individual coverage, and individual coverage from Covered California does not qualify as alternative minimum essential coverage under this section. Employees must provide reasonable evidence of alternative minimum essential coverage each plan year, during open enrollment. The Town will not make the cash payment if it knows or has reason to know that the employee or tax family does not have alternative minimum essential coverage. Any amount received in cash is taxable. Employees choosing to receive taxable cash will have the option of receiving it in two equal amounts in December and June, or the first two paychecks of each month (24 times a year). Employees participating in the Cash Allocation Program must either purchase coverage under the Public Employees’ Retirement System Health Benefits Medical Program or must show proof of other medical coverage.

• For employees hired before January 1, 2006, the Town contribution to the Cash- Allocation In-Lieu program will be equal to Nine Hundred and Twenty-two Dollars ($922) per month.

• For employees hired after January 1, 2006, the Town contribution to the Cash- Allocation In-Lieu program will be Four Hundred Dollars ($400) per month.

Benefits which can be purchased by the cash allocation plan include medical insurance and dental insurance. These benefits are available on a pre-tax basis. Employees may also choose to receive part or all of their cash allocation plan in cash. Any amount received in cash is taxable. Employees choosing to receive taxable cash-in-lieu will have the option of receiving it in two equal amounts in December and June, or the first two paychecks of each month (24 times a year). Employees choosing to use cash allocation plan funds for medical insurance must pay all medical premiums from the allocation prior to receiving a cash allocation. The employee must opt out of (waive) medical coverage through the Town. The employee must provide proof of and attest to having minimum essential coverage as defined by the Internal Revenue Service (IRS) through another group health plan (or other plan deemed acceptable by the IRS) for the employee and for all individuals for whom the employee reasonably expects to claim a personal exemption deduction for the taxable plan year to which the opt out payment applies. The employee must provide the Town with proof of and attestation to coverage every plan year. Such proof and attestation must be provided at the time the employee first wishes to opt out of Town-provided medical insurance, and during Open Enrollment each year thereafter, so long as the employee wishes to continue to opt out of Town provided medical coverage. The parties agree to meet and confer at the Town’s request on any changes that are within the mandatory scope of bargaining related to its Town sponsored Family Medical Insurance and Cash Allocation In-Lieu Plan that may be related to the compliance and implementation of the Affordable Care Act or the Fair Labor Standards Act as it relates to the regular rate of pay for overtime.

13.36 Supplemental Health and Welfare Benefits

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A. Life: Coverage of $50,000 plus $50,000 accidental death: Town to pay for premium. Additional life insurance may be purchased by the employee equal to once or twice the employee's base salary, not to exceed $200,000.

B. Disability: Short Term Disability Policy effective 8th calendar day; coverage of 60% of weekly earnings up to

maximum of $1,300/week for 13 weeks. Long Term Disability benefits begin on the 91st day of disability; coverage of 60% of monthly earnings up to a maximum of $6,000/month.

During the term of this Agreement, at the request of the Association, the City will meet and confer on the narrow and specific issue of providing employees’ Long Term Disability (LTD) benefits through the Peace Officers Research Association of California (PORAC). The change in benefit shall not result in any additional costs to the City. C. Employee Assistance Program: Premiums shall be paid by the Town.

D. Unemployment Insurance: Premiums shall be paid by the Town to provide State coverage.

Section 14. Retiree Health The Town provides retiree health benefits in accordance with the PEMHCA for employees who qualify as eligible PERS retirees who receive a PERS retirement allowance and are PEMHCA annuitants entitled to such benefits under the PEMHCA. Beginning October 1, 2018, the Town will pay a maximum contribution of $133 per month to CalPERS for each eligible annuitant towards the purchase of medical insurance. Beginning January 1, 2019, the Town’s maximum monthly contribution for each eligible annuitant shall be equal to the minimum employer contribution required under the PEMHCA, as may be adjusted by CalPERS from year to year. The provisions of PEMHCA will govern medical insurance coverage for annuitants. Retiree Medical Premiums Resolution 1991-91, established a program for the Town to contribute toward retiree medical premiums under the CalPERS PEMHCA Program. A copy of Resolution 1991-91 is attached as Exhibit B. The Town will pay the full cost of Kaiser North Employee Only. For dependents, Town will pay the ninety percent (90%) of the difference between Kaiser Employee Only and Kaiser level of participation (Employee Plus One or Employee Family and Kaiser level of participation (Employee Plus One or Employee Family, depending on family status). For Medicare Employees, the Town will align retiree contributions to the CalPERS Medicare-Supplemented rates for Kaiser North.

14.1 Health Reimbursement Account (HRA) Benefit for Eligible Retirees Hired before October 1, 2018 An employee hired prior to October 1, 2018, or provided with a final offer confirmation of employment prior to ratification and approval of this agreement, is eligible for HRA retiree health benefits in accordance with this Section.

14.2 The employee retired from the Town taking a service or disability retirement from CalPERS as a retiree receiving a PERS retirement allowance and is a PEMHCA annuitant; and,

14.3 The employee must actually draw a CalPERS pension within ninety (90) days of separation from the Town, provided the employee remains with the Town’s health plan through COBRA.

14.4 The amount of the supplemental retiree health benefit allowance will be equal to 100% of the cost of the premium for Kaiser Bay Area Retiree Only. For dependents, the Town will pay $1,443.45 per month towards a Retiree Plus One plan 67


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and $1,547.16 per month towards a Retiree Plus One or More plan, as of October 1, 2018. This amount will increase by $100.00 each year until it is equal to the active employee contribution.

14.5 The Town’s contribution towards retiree health insurance set forth in Section 14 (the PEMHCA minimum) will be deducted from the amount of contribution provided by this Section (14.4).

14.6 Employees retiring on or after February 1, 2016 and upon becoming eligible for Medicare will cease to receive any retiree health benefit allowance under this Section (14.4) and will become eligible for Supplemental Medicare equal to the cost of Kaiser Senior Advantage Bay Area Medicare rates up to a maximum of 100% Retiree Only, 90% for Retiree Plus One or 90% for Retiree Plus One or More less the amount of the employee contribution provided under Section 14 (the PEMHCA minimum). This benefit is available to the eligible retired employee only after he or she has reached the age of 65 and is Medicare eligible or as otherwise specified by law.

14.7 The benefits described by this Section (14.4) will be provided to annuitants through CalPERS by means of a Health Reimbursement Account (HRA).

14.8 The parties agree to add the PORAC Trust option requiring bargaining unit employees to contribute at least $100 per month subject to reaching mutual agreement on the language. The parties agree that administrative fees required by the PORAC trust shall be split 50/50 by the Town and the POA.

Section 15. Uniforms The Town will provide a full set of uniforms and equipment (per Department Uniform Policy) to each new employee. The Town will replace authorized uniform items damaged in the performance of duty as approved by the Chief of Police. Effective upon ratification and approval by the Council of this Agreement, the Town will pay bargaining unit employees a uniform allowance of One Hundred Fifteen Dollars ($100115) per month (paid the first two pay periods of each month) for the repair, maintenance, and replacement of uniforms.

Section 16. Mileage Reimbursement Employees using personal vehicles on official Town business shall be reimbursed at the mileage rate established by the I.R.S. Private vehicles used for Town business shall comply with the California Vehicle Code. Mileage reimbursement requests must be submitted within 30 days of the date accrued.

Section 17. Payroll Periods The Town and Association agree to the continuation of a biweekly payroll period. The following conditions are in effect: A. Employee pay shall not be withheld more than seven (7) calendar days from the end of the payroll period,

however, a maximum of two days overtime may appear on the next payroll period if it is worked following the submittal of time sheets, or during a pay period with a Town holiday which requires early submittal of time sheets and early distribution (before Friday) of pay checks. This may also occur at the end of the fiscal or calendar year. 68


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B. The Town shall provide an optional electronic check deposit system for use by employees.

Section 18. Paychecks Payroll deductions and accruals shall appear on all paychecks.

Section 19. Deferred Compensation The Town shall continue to offer a program of deferred compensation to its members in the represented classifications. The Town makes no representation on the merit of the plan nor any of the investment products or instruments which may be offered by the plan. The responsibility for evaluating the options within the plan is the responsibility of the individual participant. The Town shall not be obligated to offer more than one Deferred Compensation carrier.

Section 20. Overtime Overtime is time worked beyond any scheduled work shift. All overtime worked shall be compensated at time and one-half. The employee may choose whether overtime worked shall be paid in cash or accumulated as Compensatory Time Off (CTO), subject to a maximum accumulated CTO of one hundred and forty (140) hours. Employees may cash out up to forty (40) hours of CTO per year at their regular hourly rate, based on accruals as of May 30 and November 30. CTO cash outs will be paid during the months of June and December each year for total annual cash out amount not to exceed 40 hours of CTO. On or before the pay period which includes December 15 of each calendar year, an employee may make an irrevocable election to cash out up to 40 hours of CTO twice per year (paid at the regular rate of pay in whole hour increments) which will be earned in the following calendar year. In the first full pay period of June and December in the following year, the employee will receive cash for the amount of CTO the employee elected to cash out in the prior year. However, if the employee’s CTO balance is less than the amount the employee elected to cash out (in the prior calendar year) the employee will receive cash for the amount of the CTO the employee has accrued at the time of the cash out. Annual review of the impact of those changes will occur to determine if there is any adverse impact on scheduling. For private duty contracts, officers may only receive pay. Overtime is to be approved by a supervisor as soon as practical. Overtime payroll sheets are the responsibility of the employee to have approved and forwarded to the division commander by the appropriate payroll deadline.

Section 21. Duty Extension Compensation is made for actual time worked and shall be computed in minimum quarter-hour blocks. Personnel whose work hours would normally terminate within one hour or less from the time of the scheduled court, meeting, or training commencement will be compensated from the termination of their normal work hour through the termination of the scheduled event. Duty extension is paid at time and one half. 69


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Section 22. Call Back Requests that personnel return to duty, attend mandatory meetings, court appearances and training classes are call backs and compensated at a 3 hour minimum or actual time, whichever is greater. Mandatory meetings where a minimum of two weeks’ notice has been given are not a call back and will be compensated at a one (1) hour minimum or actual time worked whichever is greater. Call backs for officers assigned to Watch I (midnight shift) who have worked the night before shall receive a minimum of 4 hours. Personnel are considered on duty for the duration of a call back. Court appearances-hearings-depositions: Required off duty attendance at judicial or administrative hearings is compensated at a 3-hour minimum (4 hours for midnight if shift worked the night before appearance), or actual time, whichever is greater. Should there be more than one appearance, including separate court locations, within the 3 or 4 hour time period, only one minimum will be granted. Call back is paid at time and one half.

Section 23. Vacation Schedule The following vacation schedule shall apply to all employees:

Months of Employment

Accrual Days Per Year

Accrual Hours Per Pay Period

0 to 36 10 3.08

37 to 60 15 4.62

61 to 120 20 6.46

121 to 180 23 7.08

181 months 25 7.70

Maximum accrual of vacation hours shall be 344 hours. All represented employees will be eligible to cash-out up to 40 hours of vacation two times per year, based upon accruals as of May 30 and November 30. Cash out will be paid during the months of June and December each year. On or before the pay period which includes December 15 of each calendar year, an employee may make an irrevocable election to cash out up to 80 hours of vacation twice per year (in whole hour increments) which will be earned in the following calendar year. In the first full pay period of June and December in the following year, the employee will receive cash for the amount of vacation the employee irrevocably elected to cash out in the prior year. However, if the employee’s vacation balance is less than the amount the employee elected to cash out (in the prior calendar year) the employee will receive cash for the amount of vacation the employee has accrued at the time of the cash out.

Section 24. Vacation and Overtime Cash-out Employees who terminate from Town service shall have all accrued vacation and overtime cashed-out. Employees who terminate (retire, or resign) from Town service will have all accrued vacation and overtime cashed out effective the last full work-day with the Town. This will terminate their status as an employee of the Town. 70


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Section 25. Holidays and Holiday Pay The following holidays will be observed by non-uniform personnel:

• January 1.

• the third Monday in January.

• the third Monday in February.

• the last Monday in May.

• July 4.

• the first Monday in September.

• Thanksgiving Day.

• the Friday following Thanksgiving Day.

• December 25.

• Four hours on December 24 and December 31

• Every day declared a Holiday by the Mayor as a result of a national holiday declared by the President or State Governor.

Holidays which fall on Saturday shall be observed on the Friday prior and holidays which fall on Sunday shall be observed on the following Monday. Uniform personnel assigned to shift work (Patrol and Traffic) shall receive compensation in-lieu of holiday time off equal to eighty (80) hours of base pay annually. Employees shall have the option of taking Holiday leave off equal to eighty hours (80) or receive in-lieu compensation. If the employee selects to receive in-lieu compensation, forty (40) hours of holiday pay will be received in the last payroll of November and the second forty (40) hours will be received in the last payroll of May, and will be included on the regular check. In-lieu holiday pay shall cease whenever an employee is reassigned to other than shift work. The employee shall observe holidays as described above. In the event that an additional holiday is observed by the Town during the term of this agreement, the in-lieu compensation shall be increased by the additional hours holiday time made available to non-uniform personnel (the language of this paragraph becomes null and void effective January 1, 2019). Effective beginning January 1, 2019, the parties agree to pay holidays for bargaining unit employees through Holiday In-Lieu pay of 4.0%.

Section 26. Personal Leave Employees shall have the option of either taking personal leave off equal to twenty-four (24) hours of base pay annually, or receiving in-lieu compensation equal to same if the personal leave is not used by the end of November. Employees may use personal leave hours during the month of December; however, employees desiring to receive compensation for those hours shall do so in conjunction with the annual cash out in November.

Section 27. Sick Leave Accumulation rate shall be 8 hours per month (3.70 hours per pay period) with a maximum accrual of 1180 hours. The Town may require association represented employees to provide a doctor statement of proof of illness for any use of sick leave beyond one working day.

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Section 28. Sick Leave Cash-Out Program 28.1 Annual Sick Leave Cash-Out for Employees Hired Prior to October 1, 2018 Employees may cash-out up to 40 hours of their accumulated sick leave at 50% of current salary two times per year, based on accruals as of May 30 and November 30. Cash-outs will be paid during the months of June and December each year. On or before the pay period which includes December 15 of each calendar year, employees eligible to cash out under this section may make an irrevocable election to cash out up to 40 hours of their accumulated sick leave at 50% of current salary two times per year (in whole hour increments) which will be earned in the following calendar year. In the first full pay period of June and December in the following year, the employee will receive cash for the amount of sick leave the employee irrevocably elected to cash out in the prior year. However, if the employee’s sick leave balance is less than the amount the employee elected to cash out (in the prior calendar year) the employee will receive cash for the amount of sick leave the employee has accrued at the time of the cash out. All represented employees will be eligible to cash-out up to 40 hours of sick leave at 50% of salary two times per year, based upon accruals as of May 30 and November 30. Cash out will be paid during the months of July and December.

28.2 Sick Leave Cash-Out Upon Termination for Employees Hired Prior to October 1, 2018 Employees who terminate employment with the Town for any reason other than retirement or disciplinary termination, may cash-out their accumulated sick leave as follows: Months of Employment

1-59 months 25%

60-119 months 37.5%

120 months or more 50%

In order to be eligible for the sick leave cash-out program, an employee must have a sick leave accrual balance of at least 200 hours at the time of termination.

28.3 Unused Sick Leave Upon Retirement Upon retirement, eligible employees may choose from the following options: 1. Eligible employees may convert unused sick time to service credit in accordance with provisions established by

CalPERS. 2. Sick Leave Conversion Cash Out for Retirements After January 1, 2009Employees Hired Prior to October 1, 2018 All eligible employees who retire with a sick leave accrual balance of at least 200 hours may elect to be paid in cash in accordance with the same provisions as Section 28.2 Unused Sick Leave Cash-Out Upon Termination. 3. Sick Leave Conversion for Retirements Employees Hired Prior to January 1, 2009 All employees who retire with a sick leave accrual balance of at least 200 hours may convert 100% of this accumulated sick leave to a dollar equivalent at their hourly rate of pay at the time of retirement. This amount shall be held in an account. The employee’s portion of the medical insurance premium payment will be withheld from their monthly retirement payment by PERS. The Town agrees to pay the retiree quarterly in advance on the first pay period of January, April, July, and October of each year after retirement. The first payment will be pro-rated to the nearest quarter.

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Retiree’s (including dependents of the retiree) portion of medical payments will be paid from this account by the Town until all monies are depleted from the account. This account will not accrue interest and will not be paid in cash to the retiree or any beneficiaries. The retirees shall be responsible for 100% of their share of future medical insurance premiums once the account is exhausted.

Section 29. Military Leave Military leave and benefits shall be granted in accordance with State and Federal Law, including the continuation of employee salary and benefits if applicable. Generally, employees with more than one year service will receive up to thirty (30) calendar days of paid military leave annually while engaged in military duty ordered for purposes of active military training.

Section 30. Bereavement/Compassion Leave Up to 40 hours available per occurrence – use limited to spouse, parent, grandparent, child, or sibling by blood or marriage. It is recognized that bereavement/compassion leave is separate from employee’s accumulated sick leave, vacation or CTO.

Section 31. Leave Without Pay Leave without pay shall be subject to approval of the Chief of Police and the Town Manager. An employee who is on leave without pay shall not earn any employment benefits (including, but not limited to, such benefits as vacation leave, medical benefits, sick leave, retirement, credit for time employed or seniority entitlement of any kind) for the duration of such leave. Vacation or sick leave or time worked shall not be used intermittently during an extended leave to interrupt a determination that an employee is on leave without pay. The Town may, at its discretion, approve leave beyond the specific amount provided above.

Section 32. Accrual of Benefits Benefits shall not accrue to employees on unauthorized leave, suspension without pay, or leave without pay.

Section 33. Workers’ Compensation Employees shall be provided benefits in compliance with State law.

Section 34. Jury Duty Employee salary and benefits shall be continued during jury duty; employee turns over to the Town any compensation from the courts or other source of jury duty on regular work days.

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Section 35. Outside Employment Outside employment shall be subject to approval of the Chief of Police and the Town Manager, subject to the following limitations: no security work within Town limits; no use of Los Gatos uniform, badge, ID, or Los Gatos issued items; vacation or CTO to be used for court appearances resulting from private employment. Approval must be obtained prior to engaging in the outside employment and shall be renewed prior to July 1 of each year.

Section 36. Residency Requirement There is no residency requirement for represented employees.

Section 37. Layoff Policy Association recognizes the right of the Town to determine the resources to be made available to the police department. Although a reduction in force (layoff) is not anticipated, it is recognized that it is the sole right of the Town to determine when such reductions in force are necessary. Reductions in force shall be by classification with the determination of affected employees by the Town based on seniority counted as total time employed by the Town. Affected employees shall be provided a minimum thirty (30) calendar days’ notice of layoff. Employees in the classification of Police Sergeant and designated for layoff shall have the right to return to positions previously held with the Town and represented by the Association.

Section 38. Vehicles Town shall advise POA no later than sixty days prior to Town development of vehicle specifications for patrol vehicles. POA shall submit recommended specifications for vehicle purchase no later than thirty (30) days after receiving the notice from the Town.

Section 39. Promotions The Town and Association agree that it is in the best interest of both the Town and its employees to foster promotion of incumbent employees. The Town and Association recognize the Town's sole right to determine the examination process for the selection of Town employees. Qualified employees who are invited to participate in the examination process shall be allowed up to two (2) hours of time-off from regularly scheduled work in order to participate in the examination process if the examination process is scheduled during the employee's normal work period. To the best of its ability, the Town shall maintain a current promotional list for the position of Police Sergeant.

Section 40. Probationary Period The Town and the Association agree that all original appointments to the rank of Police Officer will include a probationary period of 18 months from date of hire to allow the department to fully evaluate the officer following the academy and FTO training. Individuals hired as a lateral transfer must have a valid P.O.S.T. Basic Certificate at the time of hire and will be subject to a 12 month probationary period. 74


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Any individual on an 18-month probationary period will be eligible to receive a step increase after 12 months. All promotional appointments to the positions of Corporal and Sergeant shall be subject to satisfactory completion by the employee of a 12-month probationary period. The Chief of Police may extend the probationary period of an employee for a period not to exceed an additional six (6) months.

Section 41. Performance Evaluations Performance evaluations shall take place at least every three (3) months for all probationary employees and shall take place at least annually thereafter on the anniversary of an employee’s employment with the Town. Employees eligible for step increases shall receive their performance evaluation no later than fifteen (15) days prior to their employment anniversary date. All performance evaluations shall be discussed with the employee prior to the evaluation being completed. Employees may sign their individual performance evaluations as evidence of discussion having taken place; employee signature does not necessarily imply agreement with the evaluation. If an employee chooses not to sign an evaluation, the supervisor will note that the employee has read the evaluation and chooses not to sign. An employee may attach separate written comments to his/her evaluation.

Section 42. Reinstatement Subject to the approval of the Town Manager, a permanent employee who has resigned from employment with the Town may be reinstated within two (2) years of his/her resignation to his/her former position, if vacant. Upon reinstatement, the employee shall be considered as though he/she had received an original appointment, unless other conditions are made a part of the reinstatement by the Town Manager.

Section 43. Re-Employment The names of employees affected by layoff shall be placed on appropriate re-employment lists in the order of total continuous cumulative time served in paid status. Such names shall remain thereon for a period of eighteen (18) months unless such persons are sooner re-employed. When a re-employment list is to be used to fill vacancies, the Personnel Officer shall certify from the top of such list the number of names equal to the number of vacancies to be filled, and the appointing power shall appoint such persons to fill the vacancies.

Section 44. Grievance Procedures Grievances shall be defined as alleged violations of this agreement or disputes regarding interpretations, application, or enforcement of this agreement to Town ordinances, resolutions, and written policies related to personnel policies and working conditions. Grievances shall not include disagreements, disputes, or activities regarding or pertaining to examinations for employment or promotion, disciplinary action, performance evaluations, and probationary terminations. No act or activity which may be grievable may be considered for resolution unless a grievance is filed in accordance with the procedure contained herein within sixty (60) calendar days of the date the grievable activity occurred or the date the employee could reasonably have known such activity occurred. The provision for the sixty (60) days “statute of limitations” shall not apply to probationary employees. The parties agree that all grievances will be processed in accordance with the following procedure: 75


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Any employee who has a grievance shall first try to get it settled through discussion with his/her immediate supervisor without undue delay. Every effort shall be made to find an acceptable solution at the lowest possible level of supervision. If after such discussion the employee does not believe the grievance has been satisfactorily resolved, he/she may file a formal appeal in writing to the command officer responsible for supervision of the employee’s immediate supervisor within ten (10) calendar days after receiving the informal decision of his/her immediate supervisor. The command officer shall respond within ten (10) calendar days of the filing of the appeal. If the employee does not believe the grievance has been satisfactorily resolved by the command officer, the employee may then file a formal appeal in writing to the Chief of Police within ten (10) calendar days after receiving the informal decision of the command officer. The Chief of Police shall render his written decision within ten (10) calendar days after receiving the appeal. If after receipt of the written decision of the Chief of Police, the employee is still dissatisfied, he/she may appeal the decision of the Chief to the Town Manager. Such appeal shall be made by filing a written appeal to the Town Manager within five (5) days after the receipt of the written decision of the Chief. The Town shall render a written decision within twenty (20) working days after the appeal is made. If after receipt of the written decision of the Town Manager the employee is still dissatisfied, he/she may appeal the decision of the Town Manager to the Personnel Board. Such appeal shall be made by filing a written appeal to the Chair of the Personnel Board within five (5) days after receipt of the written decision of the Town Manager. The Personnel Board shall establish a hearing date within 30 days of receipt of the written appeal. The Personnel Board shall conduct a closed hearing giving opportunity for presentation by the employee or his/her representative and the Town Manager. The Personnel Board shall render a written decision within 30 days after the appeal is made. If after receipt of the written decision of the Personnel Board, the employee is still dissatisfied, he/she may appeal the decision of the Personnel Board to the Town Council. Such appeal shall be made by filing a written appeal with the Mayor. The Mayor shall schedule a closed hearing with the Town Council within 30 days after receipt of the appeal. At this hearing, the employee and the Town Manager may make presentations. The Town Council decision shall be final. The Town Council shall render a decision within 30 days after the hearing. An open hearing may be conducted by the Personnel Board or Town Council with mutual consent of the Town and person(s) filing the grievance. The time limitations for filing and responding to grievances may be waived or extended by mutual agreement of the parties. If either party to the grievance so requests, an informal hearing shall be conducted at the Chief of Police or Town Manager appeal levels. Employees may be represented by counsel or other person at any stage in the grievance process.

Section 45. Attendance Employees shall be in attendance at their work in accordance with the rules regarding hours of work, holidays and leave. An employee whose absence is not authorized will not receive pay or benefits for the absent period and shall be subject to discipline. Failure on the part of an employee absent without leave to return to duty shall be grounds for discharge. It shall be the responsibility of an employee absent without leave to notify the department head of the reason the employee is absent and of the employee’s availability for duty.

Section 46. Completeness of MOU The Town and the Association acknowledge and agree to abide by the provisions of the Meyers-Milias-Brown Act. 76


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Section 47. Association Notification or Communications The Town and the department will make every reasonable effort to keep the Association President informed on issues related to the working conditions of the Association members.

Section 48. Catastrophic Time Bank If an employee is catastrophically ill or injured, or if the spouse or child of such employee becomes catastrophically ill or injured, the employee may request of the Town Manager that a catastrophic time bank be established. This request should be in writing. The catastrophic time bank will enable other employees to donate accrued CTO, holiday credits, or vacation credits, or sick leave accruals to the requesting employee in accordance with departmental policies. Specific procedures for the administration of the catastrophic time bank will be developed by the department.

Section 49. Reopener If, for any reason, the Chief of Police decides it is in the best interest of the Department to discontinue the 4-10 Plan within the term of this agreement, the Town of Los Gatos agrees to reopen negotiations within 30 days on all provisions of the MOU.

Section 50. Me Too Clause The Town shall not enter into an agreement with another bargaining unit, local union or management unit so that unit, local or bargaining unit can receive any compensation related to any salary or total compensation increase obtained by the POA.

Section 51. Update of Personnel Rules The Town will be updating the Personnel Rules during the term of this agreement. The Town will provide notice and an opportunity to meet and negotiate any negotiable changes to the Personnel Rules. The parties agree to this process for this update.

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SALARY SCHEDULE EXHIBIT A

Range Step Hourly RatePolice Sergeant (Prior) - 2520 04-0721 1 $56.02

Appointment before 03/01/2015 2 $58.82

3 $61.76

4 $64.85

5 $68.09

Range Step Hourly RatePolice Sergeant (New) - 2521 05-0721 1 $56.02

Appointment after 03/01/2015 2 $58.82

3 $61.76

4 $64.85

Range Step Hourly RateCorporal - 7500 03-0715 1 $46.68

2 $49.01

3 $51.46

4 $54.03

5 $56.73

Range Step Hourly RatePolice Officer - 7510 02-0711 1 $44.47

2 $46.69

3 $49.02

4 $51.47

5 $54.04

Range Step Hourly RatePolice Trainee - 9519 * 01-0710 1 $42.25

Reflects General Increase of 2.5%

* 95% of Step 1 of Police Officer Classification (Provisional Employee with Misc PERS)

TOWN OF LOS GATOS

SALARY SCHEDULE SWORN PERSONNEL

EFFECTIVE OCTOBER 01 2016

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Range Step Hourly RatePolice Sergeant (Prior) - 2520 04-0721 1 $57.42


3 $63.30

4 $66.47

5 $69.79

Range Step Hourly RatePolice Sergeant (New) - 2521 05-0721 1 $57.42


3 $63.30

4 $66.47

Range Step Hourly RateCorporal - 7500 03-0715 1 $47.85

2 $50.24

3 $52.75

4 $55.39

5 $58.16

Range Step Hourly RatePolice Officer - 7510 02-0711 1 $45.58

2 $47.86

3 $50.25

4 $52.76

5 $55.40

Range Step Hourly RatePolice Trainee - 9519 * 01-0710 1 $43.30

Reflects General Increase of 2.5%


TOWN OF LOS GATOS

SALARY SCHEDULE SWORN PERSONNEL

EFFECTIVE OCTOBER 01 2017

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SALARY SCHEDULE EXHIBIT A

Class Code Classification Title Range Step Hourly Rate

2520 Police Sergeant (Prior) 04-0721 1 $62.01


3 $68.37

4 $71.79

5 $75.38


2521 Police Sergeant (New) 05-0721 1 $62.01


3 $68.37

4 $71.79


7500 Police Corporal 03-0715 1 $51.44

2 $54.01

3 $56.71

4 $59.55

5 $62.53


7510 Police Officer 02-0711 1 $49.00

2 $51.45

3 $54.02

4 $56.72

5 $59.56


9519 Police Trainee * 01-0710 1 $46.55


Reflects General Increase of 2.5%.

Town of Los Gatos

Salary Schedule for Police Officers' Association Classifications

Effective October 01, 2018

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General increase percentage may be adjusted pursuant to side letter of agreement dated September 19, 2018.


2520 Police Sergeant (Prior) 04-0721 1 $64.49


3 $71.10

4 $74.66

5 $78.39


2521 Police Sergeant (New) 05-0721 1 $64.49


3 $71.10

4 $74.66


7500 Police Corporal 03-0715 1 $53.50

2 $56.18

3 $58.99

4 $61.94

5 $65.04


7510 Police Officer 02-0711 1 $50.96

2 $53.51

3 $56.19

4 $59.00

5 $61.95


9519 Police Trainee * 01-0710 1 $48.41


Reflects General Increase of 4%.

Town of Los Gatos

Salary Schedule for Police Officers' Association Classifications

Effective October 01, 2019

81




TOWN OF LOS GATOS



ITEM NO: 6




SUBJECT: APPROVE THE REVISED CLASSIFICATION PLANS FOR MANAGEMENT AND CONFIDENTIAL EMPLOYEES AND AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE AMOUNT OF $479,837 FROM ESTIMATED AVAILABLE FY 2018/19 OPERATING REVENUES FOR THE MANAGEMENT AND CONFIDENTIAL UNITS

RECOMMENDATION: Staff recommends that the Town Council approve the revised classification plans for Management (Attachment 1) and Confidential (Attachment 2) employees and authorize salary and benefits budget adjustments in the amount of $479,837 from estimated available FY 2018/19 operating revenues for the Management and Confidential units. BACKGROUND: In accordance with the Town’s Employer-Employee Relations Resolution No. 1974-41, representatives of the Town and its three bargaining units [American Federation of State County and Municipal Employees (AFSCME), Town Employees Association (TEA), and Police Officers Association (POA)] met and conferred separately in good faith and within the scope of representation in an effort to reach agreements for successor Memoranda of Understanding (MOU). The MOU are labor agreements that identify specific terms and conditions of employment applicable to the employees represented by those agreements. The MOU for AFSCME was approved during the August 7, 2018 Council meeting. The MOU for TEA was approved during the August 21, 2018 Council meeting and the Police Officers’ Association MOU is being presented for approval at the October 16, 2018 Council meeting.

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OF 3 SUBJECT: APPROVE THE REVISED CLASSIFICATION PLANS FOR MANAGEMENT AND

CONFIDENTIAL EMPLOYEES AND AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE AMOUNT OF $479,837 FROM ESTIMATED AVAILABLE FY 2018/19 OPERATING REVENUES FOR THE MANAGEMENT AND CONFIDENTIAL UNITS


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DISCUSSION:

The Management and Confidential units are at-will, unrepresented units of the Town. Now that negotiations have concluded with the Town’s three bargaining groups, it is timely to consider benefit changes and compensation for the Town’s unrepresented employees. Consistent with the benefit changes for POA, TEA, and AFSCME, the benefit changes for Management and Confidential groups include the elimination of retiree health for all new employees and the elimination of sick leave cash out for all new employees hired after the Council’s approval of this item. For FY 2018/19 only, the proposed package also contains similar elements to the represented bargaining groups, including a 2.5% across-the-board increase, a 1.5% non-PERSable one-time payment, and market equity adjustments. For most Management and Confidential classifications, the equity adjustment is 2.5%. Classifications with current salaries below new salary ranges or those impacted by compaction will receive additional equity adjustments to alleviate those issues. Attachments 1 and 2 contain the proposed classification plan and salary schedule updates for both Management and Confidential groups. Unlike the Town’s three bargaining groups who negotiate for multi-year contracts, the Management and Confidential groups are at the discretion of the Town Manager, with the consent of the Council, based on budget considerations and other factors at that time. In terms of next steps, the Town staff is working on updates to the Management and Confidential Compensation Plans, which describe the employment conditions, Town benefits, and other issues. The updates would clarify existing language, delete obsolete language, and ensure compliance related to the Town’s contract for retirement and medical benefits provided under the California Public Employees’ Retirement System (CalPERS) and PEMHCA. The revised Compensation Plans will be scheduled for Council consideration at a future date. CONCLUSION: The Management and Confidential group recommendations have been prepared within the parameters consistent with Town Council direction and provided to Town’s three bargaining groups.

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OF 3 SUBJECT: APPROVE THE REVISED CLASSIFICATION PLANS FOR MANAGEMENT AND

CONFIDENTIAL EMPLOYEES AND AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE AMOUNT OF $479,837 FROM ESTIMATED AVAILABLE FY 2018/19 OPERATING REVENUES FOR THE MANAGEMENT AND CONFIDENTIAL UNITS


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FISCAL IMPACT:

The anticipated fiscal impact for all salary adjustments in FY 2018/2019 is $479,837. The requested budget adjustments in the amount of $479,837 from estimated available FY 2018/19 operating revenues will provide funding for the additional salary and benefit cost for FY 2018/19. Funding to support the FY 2019/2020 ongoing cost each year will be incorporated into the proposed future year budgets for Council approval.



Attachments: 1. Management Salary Schedule 2. Confidential Employees Salary Schedule

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Proposed Management Salary Schedule


Class Code Classification Title Annual Salary

Minimum

Annual Salary

Maximum

2615 Assistant Parks & Public Works Director 133,622$ 180,389$

2110 Assistant Town Manager 158,834$ 214,426$

2420 Chief Building Official 121,055$ 163,424$

2400 Community Development Director 154,960$ 209,196$

2180 Community Outreach Coordinator 83,584$ 112,838$

2010 Deputy Attorney 104,385$ 140,920$

2130 Economic Vitality Manager 115,221$ 155,549$

2310 Finance and Budget Manager 121,055$ 163,424$

2300 Finance Director 151,181$ 204,094$

2200 Human Resources Director 140,386$ 189,521$

2190 Information Technology Manager 121,055$ 163,424$

2800 Library Director 140,386$ 189,521$

2820 Library Division Manager 92,261$ 124,552$

2600 Parks & Public Works Director 154,956$ 209,196$

2645 Parks & Public Works Operations Manager 104,385$ 140,920$

2630 Parks & Public Works Superintendent 121,055$ 163,424$

2900 Planning Manager 121,055$ 163,424$

2510 Police Captain 143,896$ 194,259$

2500 Police Chief 162,805$ 219,787$

2545 Police Records & Communications Manager* 112,411$ 151,755$

2140 Senior Administrative Analyst 90,011$ 121,515$

2650 Senior Civil Engineer 115,221$ 155,549$

2000 Town Attorney - Council Appointed (effective 1/16/18) 215,000$

2412 Town Clerk* 121,055$ 163,424$

2100 Town Manager - Council Appointed (effective 1/16/18) 220,000$

2655 Transportation & Mobility Manager 112,411$ 151,755$

Management salaries reflect a spread of 35% to the top of the range

Deleted Classifications Effective 7/1/18

2113 Assistant to Town Manager

2515 Police Lieutenant

2515 Police Lieutenant inc. 7.5% Post Pay

2510 Police Captain inc. 7.5% Post Pay

* Title change

ATTACHMENT 1

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Proposed Confidential Salary Schedule


Class

CodeClassification Title FLSA STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6

3300 Accountant/Finance Analyst Non-Exempt $41.14 $43.19 $45.35 $47.62 $50.00 $53.08

3000 Administrative Analyst Non-Exempt $41.14 $43.19 $45.35 $47.62 $50.00 $53.08

3115 Administrative Technician Non-Exempt $35.47 $37.25 $39.11 $41.06 $43.12 $45.85

3190 Deputy Clerk Non-Exempt $26.38 $27.70 $29.08 $30.53 $32.06 $34.24

3500 Executive Assistant to Chief of Police Non-Exempt $33.76 $35.45 $37.22 $39.09 $41.04 $43.67

3100 Executive Assistant to Town Manager Non-Exempt $35.47 $37.25 $39.11 $41.06 $43.12 $45.85

3015 Human Resources Technician* Non-Exempt $32.14 $33.74 $35.43 $37.20 $39.06 $41.60

3180 Office Assistant Non-Exempt $26.38 $27.70 $29.08 $30.53 $32.06 $34.24

3301 Payroll Technician* Non-Exempt $35.47 $37.25 $39.11 $41.06 $43.12 $45.85

The following classifications are currently vacant:

Deputy Clerk

Executive Assistant to Chief of Police

* Title change

ATTACHMENT 2 86

PREPARED BY: STEPHEN CONWAY Finance Director Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director


TOWN OF LOS GATOS



ITEM NO: 7




SUBJECT: AUTHORIZE THE TOWN MANAGER TO ENTER INTO AN AGREEMENT WITH MBS BUSINESS SYSTEMS (MBS) TO PROVIDE MULTIFUNCTIONAL PRINTER LEASE, REPLACEMENT, MANAGEMENT AND MAINTENANCE SERVICES FOR THE TOWN OF LOS GATOS AND US BANK EQUIPMENT FINANCE FOR THE LEASE PURCHASE AGREEMENT FOR THE EQUIPMENT

RECOMMENDATION: Authorize the Town Manager to enter into an agreement with MBS Business Systems (MBS) to provide multifunctional printer lease, replacement, management and maintenance services for the Town of Los Gatos and U.S. Bank Equipment Finance for the lease purchase agreement for the equipment (Attachment 1). BACKGROUND: In 2013 the Town entered into a lease and maintenance agreement with MBS for the Town' s copiers and printers. This was a five-year agreement, expiring this year. Staff issued a Request for Proposal (RFP) earlier this year for multifunctional printer (MFP) lease, replacement, management and maintenance services. Staff subsequently provided a walk-through opportunity for all interested parties and assembled a group of employees to serve on the selection panel to review the proposals and make a final recommendation to the Town Manager. DISCUSSION: Staff issued the RFP with the following objectives in mind:

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OF 3 SUBJECT: AUTHORIZE THE TOWN MANAGER TO ENTER INTO AN AGREEMENT WITH MBS

BUSINESS SYSTEMS (MBS) TO PROVIDE LEASE AND MAINTENANCE SERVICES FOR COPIERS WITHIN THE TOWN OF LOS GATOS

OCTOBER 11, 2018

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• Create and implement an optimization and standardization roadmap for the Town’s copiers, printers, faxes, scanners (output fleet)

• Reduce the Town’s total cost of ownership regarding output fleet throughout the Town Departments

• Improve customer service

• Increase the Town’s “Green Footprint”

• Evaluate and recommend document flow improvements

• Minimize downtime and maintenance calls Seven proposals were received. After a technical evaluation of the proposals, only four proposals were evaluated by the selection panel. MBS was selected based on the following factors:

• Print management software which improves staff productivity by eliminating print servers and printer setup time, and assists with tracking usage

• Reduction in the total cost of ownership for printers, fax, and MFP fleet

• Generally faster, more durable, and more reliable Konica Minolta Equipment than other proposals

• Ability to maintain and provide toner supplies for the entire fleet of copiers and printers

• Ease of mobile printing options which allow users to print from phones and tablets

• Responsiveness and clear understanding of project scope

• Excellent references from existing municipal government customers

• Consistently high rankings received from the selection panel Staff met with MBS to finalize the equipment list and discuss terms and conditions. As part of these terms and conditions, staff is requesting authorization to enter into a five-year agreement with MBS for multifunctional printer lease, replacement, management and maintenance services. The agreement will consist of a flat monthly payment of $702.00 which will include a monthly allowance of 76,000 copies. In addition, the Town will be charged a flat cost per copy for any additional copies over the monthly allowance. The equipment lease will be issued by U.S. Bank Equipment Finance and consist of 60 monthly payments of $2,504.82 for a total of $150,289.20. The fees will be fixed and will not be subject to increase over the course of the five-year agreement. Staff anticipates that the new cost structure with MBS will result in a net savings of approximately $10,000 per year, or approximately $50,000 over the course of the five-year agreement.

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OF 3 SUBJECT: AUTHORIZE THE TOWN MANAGER TO ENTER INTO AN AGREEMENT WITH MBS

BUSINESS SYSTEMS (MBS) TO PROVIDE LEASE AND MAINTENANCE SERVICES FOR COPIERS WITHIN THE TOWN OF LOS GATOS

OCTOBER 11, 2018

S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\07 Printer Copier Contract\Staff Report.docx 10/11/2018 3:44 PM

CONCLUSION: Staff believes that MBS has the expertise and experience to provide multifunctional printer lease, replacement, management, and maintenance services for the Town. In addition, staff anticipates that the new cost structure will result in annual savings compared to the previous agreement. Staff therefore recommends that the Town Council authorize the Town Manager to enter into an agreement with MBS and Union Bank Equipment Finance for these services. Attachment 1 is draft agreement. FISCAL IMPACT: There are sufficient funds available to cover the cost of the new agreement for the remainder of this fiscal year. During the remaining four years of the contract, there will not be any additional budgetary impact as a result of entering into this agreement, based on staffs forecast of a net savings to the Town of approximately $10,000 per year. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachment: 1. Draft MBS Agreement

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N:/MASTER/Agreements/Purchase and Service Agreement Template.rtf MBS Business Systems Multifunctional Printer (MFP) Replacement, Management and Maintenance Service

PURCHASE AND SERVICE AGREEMENT THIS AGREEMENT is dated for identification this 3rd day of October, 2018 and is made by and between TOWN OF LOS GATOS, a California municipal corporation, (“Town”) and MBS Business Systems, (“Supplier”), whose address is 325 Victor Street, Suite A. This Agreement is made with reference to the following facts. This contract will remain in effect from 11/5/18 to 11/5/23.

I. RECITALS 1.1 Town sought quotations for the purchase described in this Agreement, and Supplier was

found to be the lowest responsible supplier for this purchase. 1.2 Supplier represents that it is a qualified and competent supplier of the items to be purchased

under this Agreement.

1.3 The Town desires to engage Supplier to provide copier and printer management and

maintenance support. 1.4 The Supplier represents and affirms that it is qualified and willing to perform the desired

work pursuant to this Agreement.

II. AGREEMENTS 2.1 Supplies and Terms. Supplier hereby agrees to deliver to Town at 110 E. Main, Los Gatos,

CA the items and materials described in Town of Los Gatos Request for Proposal for Multifunctional Printer (MFP) Replacement, Management and Maintenance Services which is attached hereto and incorporated by reference. The terms and conditions are as follows:

(1) Price. Town shall pay Supplier the amounts defined in Exhibit A, which include sales

tax and delivery charges. Payment shall be net 30 days from delivery. (2) Delivery. The delivery of the items and materials shall be no later than November 9,

2018. Delivery shall be made between 8:00 a.m. and 5:00 p.m. on weekdays that are not Town holidays or furlough days.

2.2 Time of the Essence. Prompt delivery of the items and materials is essential to this

Agreement. 2.3 Scope of Services. Supplier shall provide services as described in that certain Multifunctional

Printer (MFP) Replacement, Management and Maintenance Service prepared for The Town

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ATTACHMENT 1

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of Los Gatos sent to the Town on 8/24/18, which is hereby incorporated by reference and attached as “Exhibit A.”

2.4 Time of Performance. The services to be performed are as follows: M-F, 8:00 am to 5:00 pm

excluding holidays, 11/5/18 to 11/5/23. 2.5 Compliance with Laws. The Supplier shall comply with all applicable laws, codes, ordinances,

and regulations of governing federal, state and local laws. Supplier represents and warrants to Town that it has all licenses, permits, qualifications and approvals of whatsoever nature which are legally required for Supplier to practice its profession. Supplier shall maintain a Town of Los Gatos business license pursuant to Chapter 14 of the Code of the Town of Los Gatos.

2.6 Sole Responsibility. Supplier shall be responsible for employing or engaging all persons

necessary to perform the services under this Agreement. 2.7 Information/Report Handling. All documents furnished to Supplier by the Town and all

reports and supportive data prepared by the Supplier under this Agreement are the Town’s property and shall be delivered to the Town upon the completion of Supplier's services or at the Town's written request. All reports, information, data, and exhibits prepared or assembled by Supplier in connection with the performance of its services pursuant to this Agreement are confidential until released by the Town to the public, and the Supplier shall not make any of the these documents or information available to any individual or organization not employed by the Supplier or the Town without the written consent of the Town before such release. The Town acknowledges that the reports to be prepared by the Supplier pursuant to this Agreement are for the purpose of evaluating a defined project, and Town's use of the information contained in the reports prepared by the Supplier in connection with other projects shall be solely at Town's risk, unless Supplier expressly consents to such use in writing. Town further agrees that it will not appropriate any methodology or technique of Supplier which is and has been confirmed in writing by Supplier to be a trade secret of Supplier.

2.8 Compensation. Compensation for the supplies and materials delivered and for supplier's

professional services shall not exceed negotiated amount, inclusive of all costs. Payment shall be based upon Town approval of each task.

2.9 Billing. Billing shall be by invoice within thirty (30) days of the rendering of the services and

shall be accompanied by a detailed explanation of the work performed by whom at what rate and on what date. Also, plans, specifications, documents or other pertinent materials shall be submitted for Town review, even if only in partial or draft form.

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Payment shall be net thirty (30) days. All invoices and statements to the Town shall be addressed as follows:

Invoices: Town of Los Gatos

Attn: Accounts Payable P.O. Box 655 Los Gatos, CA 95031-0655

2.10 Availability of Records. Supplier shall maintain the records supporting this billing for not less

than three years following completion of the work under this Agreement. Supplier shall make these records available to authorized personnel of the Town at the Supplier's offices during business hours upon written request of the Town.

2.11 Assignability and Subcontracting. The services to be performed under this Agreement are

unique and personal to the Supplier. No portion of these services shall be assigned or subcontracted without the written consent of the Town.

2.12 Independent Contractor. It is understood that the Supplier, in the performance of the work

and services agreed to be performed, shall act as and be an independent contractor and not an agent or employee of the Town. As an independent contractor he/she shall not obtain any rights to retirement benefits or other benefits which accrue to Town employee(s). With prior written consent, the Supplier may perform some obligations under this Agreement by subcontracting, but may not delegate ultimate responsibility for performance or assign or transfer interests under this Agreement. Supplier agrees to testify in any litigation brought regarding the subject of the work to be performed under this Agreement. Supplier shall be compensated for its costs and expenses in preparing for, traveling to, and testifying in such matters at its then current hourly rates of compensation, unless such litigation is brought by Supplier or is based on allegations of Supplier's negligent performance or wrongdoing.

2.13 Conflict of Interest. Supplier understands that its professional responsibilities are solely to

the Town. The Supplier has and shall not obtain any holding or interest within the Town of Los Gatos. Supplier has no business holdings or agreements with any individual member of the Staff or management of the Town or its representatives nor shall it enter into any such holdings or agreements. In addition, Supplier warrants that it does not presently and shall not acquire any direct or indirect interest adverse to those of the Town in the subject of this Agreement, and it shall immediately disassociate itself from such an interest, should it discover it has done so and shall, at the Town's sole discretion, divest itself of such interest. Supplier shall not knowingly and shall take reasonable steps to ensure that it does not employ a person having such an interest in this performance of this Agreement. If after

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employment of a person, Supplier discovers it has employed a person with a direct or indirect interest that would conflict with its performance of this Agreement, Supplier shall promptly notify Town of this employment relationship, and shall, at the Town's sole discretion, sever any such employment relationship.

2.14 Equal Employment Opportunity. Supplier warrants that it is an equal opportunity employer

and shall comply with applicable regulations governing equal employment opportunity. Neither Supplier nor its subcontractors do and neither shall discriminate against persons employed or seeking employment with them on the basis of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, national origin, religion, or medical condition, unless based upon a bona fide occupational qualification pursuant to the California Fair Employment & Housing Act.

III. INSURANCE AND INDEMNIFICATION 3.1 Minimum Scope of Insurance:

i. Supplier agrees to have and maintain, for the duration of the contract, General Liability insurance policies insuring him/her and his/her firm to an amount not less than: one million dollars ($1,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage.

ii. Supplier agrees to have and maintain for the duration of the contract, an

Automobile Liability insurance policy ensuring him/her and his/her staff to an amount not less than one million dollars ($1,000,000) combined single limit per accident for bodily injury and property damage.

iii. Supplier shall provide to the Town all certificates of insurance, with original

endorsements effecting coverage. Supplier agrees that all certificates and endorsements are to be received and approved by the Town before work commences.

iv. Supplier agrees to have and maintain, for the duration of the contract,

professional liability insurance in amounts not less than $1,000,000 which is sufficient to insure Supplier for professional errors or omissions in the performance of the particular scope of work under this agreement.

General Liability:

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i. The Town, its officers, officials, employees and volunteers are to be covered as insured as respects: liability arising out of activities performed by or on behalf of the Supplier; products and completed operations of Supplier, premises owned or used by the Supplier. This requirement does not apply to the professional liability insurance required for professional errors and omissions.

ii. The Supplier's insurance coverage shall be primary insurance as respects the

Town, its officers, officials, employees and volunteers. Any insurance or self-insurances maintained by the Town, its officers, officials, employees or volunteers shall be excess of the Supplier's insurance and shall not contribute with it.

iii. Any failure to comply with reporting provisions of the policies shall not affect

coverage provided to the Town, its officers, officials, employees or volunteers.

iv. The Supplier's insurance shall apply separately to each insured against whom

a claim is made or suit is brought, except with respect to the limits of the insurer's liability.

3.2 All Coverages. Each insurance policy required in this item shall be endorsed to state that

coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the Town. Current certification of such insurance shall be kept on file at all times during the term of this agreement with the Town Clerk Administrator.

3.3 Workers’ Compensation. In addition to these policies, Supplier shall have and maintain

Workers' Compensation insurance as required by California law and shall provide evidence of such policy to the Town before beginning services under this Agreement. Further, Supplier shall ensure that all subcontractors employed by Supplier provide the required Workers' Compensation insurance for their respective employees.

3.4 Indemnification. The Supplier shall save, keep, hold harmless and indemnify and defend the

Town its officers, agent, employees and volunteers from all damages, liabilities, penalties, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of, or in the course of performing work which may be occasioned by a willful or negligent act or omissions of the Supplier, or any of the Supplier's officers, employees, or agents or any sub-contractor.

IV. GENERAL TERMS

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4.1 Waiver. No failure on the part of either party to exercise any right or remedy hereunder

shall operate as a waiver of any other right or remedy that party may have hereunder, nor does waiver of a breach or default under this Agreement constitute a continuing waiver of a subsequent breach of the same or any other provision of this Agreement.

4.2 Severability. If any term of this Agreement is held invalid by a court of competent

jurisdiction, the remainder of this Agreement shall remain in effect. 4.3 Warranty. Supplier shall remedy any defects due to faulty materials and/or workmanship

and pay for any damages to other work and/or existing facilities resulting therefrom which shall appear within a period of one year from the date of recording of final acceptance.

4.4 Governing Law. This Agreement, regardless of where executed, shall be governed by and

construed to the laws of the State of California. Venue for any action regarding this Agreement shall be in the Superior Court of the County of Santa Clara.

4.5 Termination of Agreement. The Town and the Supplier shall have the right to terminate this

agreement with or without cause by giving not less than fifteen days (15) written notice of termination. In the event of termination, the Supplier shall deliver to the Town all supplies and services scheduled to be delivered to Town within that fifteen (15) day period.

4.6 Amendment. No modification, waiver, mutual termination, or amendment of this

Agreement is effective unless made in writing and signed by the Town and the Supplier. 4.7 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be

entitled to reasonable attorney's fees, including costs of appeal. 4.8 Notices. Any notice required to be given shall be deemed to be duly and properly

given if mailed postage prepaid, and addressed to:

Town of Los Gatos Attn: Town Clerk 110 E. Main Street Los Gatos, CA 95030

MBS Business Systems Attn: Kenny Alexander 325 Victor Street, Suite A Salinas, CA. 93907

OR personally delivered to Supplier to such address or such other address as Supplier designates in writing to Town.

4.9 Order of Precedence. In the event of any conflict, contradiction, or ambiguity between the

terms and conditions of this Agreement in respect of the Products or Services and any

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attachments to this Agreement, then the terms and conditions of this Agreement shall prevail over attachments or other writings.

/// ///

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4.10 Entire Agreement. This Agreement, including all Exhibits, constitutes the complete and exclusive statement of the Agreement between the Town and Supplier. No terms, conditions, understandings or agreements purporting to modify or vary this Agreement, unless hereafter made in writing and signed by the party to be bound, shall be binding on either party.

IN WITNESS WHEREOF, the Town and Supplier have executed this Agreement. Town of Los Gatos by:

Laurel Prevetti, Town Manager Recommended by:

Department Head Name, Title

MBS Business Systems by:

Kellie Murphy, President

Title

Approved as to Form:

Robert Schultz, Town Attorney Attest:

Shelley Neis, CMC, Town Clerk Administrator

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Document Checklist

± Master Tax-Exempt Lease/Purchase Agreement – Execute signature block on last page of the Agreement. ± Addendum to Master Tax-Exempt Lease/Purchase Agreement – If required by Lessor, this document must be

executed in the presence of an attester. The attesting witness does not have to be a notary but must be present at the time of execution. The attester will execute the signature block below the Lessee’s signature block at the bottom right of the page. If computation is required, please submit a copy of the computation test with the addendum.

± Property Schedule – Execute signature block at the bottom of the page. This document must be executed in the

presence of an attester. The attesting witness does not have to be a notary but must be present at the time of execution. ± Property Description and Payment Schedule – Exhibit 1, Appendix A and Appendix B– Execute the signature block

at the bottom of each page. ± Bank Qualification and Arbitrage Rebate – Exhibit 2 – Execute the signature block at the bottom of the page. ± Certificate of Acceptance – Exhibit 3 – 1) if billing address is different than address shown on the Agreement, fill in

billing information under # 4; 2) the date that all equipment is delivered, installed and accepted is the date that should be placed on the “ACCEPTANCE DATE” line; and 3) execute signature block at the bottom of the page.

± Lessee’s General and Incumbency Certificate – Exhibit 4 – The General Certificate must be signed by the person

signing the Agreement. The Incumbency Certificate must be signed by an officer other than the person signing the Agreement.

± Lessee’s Counsel’s Opinion – Exhibit 5 – If required by Lessor, this document will need to be executed by your

attorney, dated, and placed on his/her letterhead. ± Insurance Authorization and Verification – To be filled out by Lessee and returned with the executed documents. ± Notification of Tax Treatment – Please provide your State Sales/Use tax Exemption Certificate, if applicable. ± Form 8038-GC or G – Blank form provided to Lessee. Please consult your local legal/bond counsel or tax consultant

with questions. ± Original Documents – Lessor will require original documents, including original 8038 form, prior to funding. ± Validation of Board Approval – If required by Lessor, a copy of board minutes or board resolution should be provided

showing approval of the contract. ± Services and Supplies Rider – If Lessee has requested that Lessor, as a convenience to Lessee, invoice Lessee for

certain service and supply payments Lessee owes to Vendor, this document must be executed by Lessee in the presence of an attester. The attesting witness does not have to be a notary but must be present at the time of execution.

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EXHIBIT A

Master Tax-Exempt Lease/Purchase Agreement

APPLICATION NO.

2438413

LESSOR:

LESSEE:

FULL LEGAL NAME

FULL LEGAL NAME

U.S. Bank Equipment Finance, a division of U.S. Bank National Association (“U.S. Bank Equipment Finance”)

Town of Los Gatos

STREET ADDRESS

STREET ADDRESS

1310 Madrid Street, Suite 101

110 E Main St

CITY

STATE

ZIP

CITY

STATE

ZIP

Marshall

MN

56258

Los Gatos

CA

95031

ARTICLE I DEFINITIONS

The following terms will have the meanings indicated below unless the context clearly requires otherwise: "Agreement" means this Master Tax-Exempt Lease/Purchase Agreement, including all exhibits, appendices and schedules attached hereto. “Code” is defined in Section 3.01(f). "Commencement Date" is the date when the term of a Property Schedule and Lessee's obligation to pay rent thereunder commences, which date shall be set forth in such Property Schedule. “Event of Default” is defined in Section 13.01.

“Lease Payments" means the Lease Payments payable by Lessee under Article VI of this Agreement and each Property Schedule, as set forth in each Property Schedule. “Lease Payment Dates" means the Lease Payment dates for the Lease Payments as set forth in each Property Schedule. "Lease Term" means, with respect to a Property Schedule, the Original Term and all Renewal Terms. The Lease Term for each Property Schedule executed hereunder shall be set forth in such Property Schedule, as provided in section 4.02. "Lessee" means the entity identified as such in the first paragraph hereof, and its permitted successors and assigns. "Lessor" means the entity identified as such in the first paragraph hereof, and its successors and assigns. “Nonappropriation Event” is defined in Section 6.06. "Original Term" means, with respect to a Property Schedule, the period from the Commencement Date until the end of the budget year of Lessee in effect at the Commencement Date. "Property" means, collectively, the property leased/purchased pursuant to this Agreement, and with respect to each Property Schedule, the property described in such Property Schedule, and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Section 8.01 or Article IX. "Property Schedule" means a Property Schedule in the form attached hereto for Property Schedule 1. Subsequent Property Schedules pursuant to this Agreement shall be numbered consecutively, beginning with Property Schedule 2. "Purchase Price" means the amount that Lessee may, in its discretion, pay to Lessor to purchase the Property under a Property Schedule, as provided in Section 11.01 and as set forth in the Property Schedule. "Renewal Terms" means the renewal terms of a Property Schedule, each having a duration of one year and a term coextensive with Lessee's budget year. "State" means the state where Lessee is located. "Vendor" means the manufacturer or contractor of the Property as well as the agents or dealers of the manufacturer or contractor from whom Lessor or Lessee purchased or is purchasing all or any portion of the Property.

ARTICLE II

2.01 Property Schedules Separate Financings. Each Property Schedule executed and delivered under this Agreement shall be a separate financing, distinct from other Property Schedules. Without limiting the foregoing, upon the occurrence of an Event of Default or a Nonappropriation Event with respect to a Property Schedule, Lessor shall have the rights and remedies specified herein with respect to the Property financed and the Lease Payments payable under such Property Schedule, and except as expressly provided in Section 12.02 below, Lessor shall have no rights or remedies with respect to Property financed or Lease Payments payable under any other Property Schedules unless an Event of Default or Nonappropriation Event has also occurred under such other Property Schedules.

ARTICLE III

3.01 Covenants of Lessee. As of the Commencement Date for each Property Schedule executed and delivered hereunder, Lessee shall be deemed to represent, covenant and warrant for the benefit of Lessor as follows:

(a) Lessee is a public body corporate and politic duly organized and existing under the constitution and laws of the State with full power and authority to enter into this Agreement and the Property Schedule and the transactions contemplated thereby and to perform all of its obligations thereunder.

(b) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. To the extent Lessee should merge with another entity under the laws of the State, Lessee agrees that as a condition to such merger it will require that the remaining or resulting entity shall be assigned Lessee's rights and shall assume Lessee's obligations hereunder.

(c) Lessee has been duly authorized to execute and deliver this Agreement and the Property Schedule by proper action by its governing body, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of this Agreement and the Property Schedule, and Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the Property Schedule and the acquisition by Lessee of the Property thereunder. On or before the Commencement Date for the Property Schedule, Lessee shall cause to be delivered an opinion of counsel in substantially the form attached to the form of the Property Schedule as Exhibit 5.

(d) During the Lease Term for the Property Schedule, the Property thereunder will perform and will be used by Lessee only for the purpose of performing

essential governmental uses and public functions within the permissible scope of Lessee's authority.

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(e) Lessee will provide Lessor with current financial statements, budgets and proof of appropriation for the ensuing budget year and other financial information relating to the ability of Lessee to continue this Agreement and the Property Schedule in such form and containing such information as may be requested by Lessor.

(f) Lessee will comply with all applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), including Sections 103 and 148

thereof, and the regulations of the Treasury Department thereunder, from time to time proposed or in effect, in order to maintain the excludability from gross income for federal income tax purposes of the interest component of Lease Payments under the Property Schedule and will not use or permit the use of the Property in such a manner as to cause a Property Schedule to be a "private activity bond" under Section 141(a) of the Code. Lessee covenants and agrees that it will use the proceeds of the Property Schedule as soon as practicable and with all reasonable dispatch for the purpose for which the Property Schedule has been entered into, and that no part of the proceeds of the Property Schedule shall be invested in any securities, obligations or other investments except for the temporary period pending such use nor used, at any time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the Agreement, would have caused any portion of the Property Schedule to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) or Section 148 of the Code and the regulations of the Treasury Department thereunder proposed or in effect at the time of such use and applicable to obligations issued on the date of issuance of the Property Schedule.

(g) The execution, delivery and performance of this Agreement and the Property Schedule and compliance with the provisions hereof and thereof by

Lessee does not conflict with or result in a violation or breach or constitute a default under, any resolution, bond, agreement, indenture, mortgage, note, lease or other instrument to which Lessee is a party or by which it is bound by any law or any rule, regulation, order or decree of any court, governmental agency or body having jurisdiction over Lessee or any of its activities or properties resulting in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any property or assets of Lessee or to which it is subject.

(h) Lessee's exact legal name is as set forth on the first page of this Agreement. Lessee will not change its legal name in any respect without giving

thirty (30) days prior notice to Lessor. ARTICLE IV

4.01 Lease of Property. On the Commencement Date of each Property Schedule executed hereunder, Lessor will be deemed to demise, lease and let to Lessee, and Lessee will be deemed to rent, lease and hire from Lessor, the Property described in such Property Schedule, in accordance with this Agreement and such Property Schedule, for the Lease Term set forth in such Property Schedule. 4.02 Lease Term. The term of each Property Schedule shall commence on the Commencement Date set forth therein and shall terminate upon payment of the final Lease Payment set forth in such Property Schedule and the exercise of the Purchase Option described in Section 11.01, unless terminated sooner pursuant to this Agreement or the Property Schedule. 4.03 Delivery, Installation and Acceptance of Property. Lessee shall order the Property, shall cause the Property to be delivered and installed at the locations specified in the applicable Property Schedule and shall pay all taxes, delivery costs and installation costs, if any, in connection therewith. To the extent funds are deposited under an escrow agreement or trust agreement for the acquisition of the Property, such funds shall be disbursed as provided therein. When the Property described in such Property Schedule is delivered, installed and accepted as to Lessee's specifications, Lessee shall immediately accept the Property and evidence said acceptance by executing and delivering to Lessor the Acceptance Certificate substantially in the form attached to the Property Schedule.

ARTICLE V

5.01 Enjoyment of Property. Lessee shall during the Lease Term peaceably and quietly have, hold and enjoy the Property, without suit, trouble or hindrance from Lessor, except as expressly set forth in this Agreement. Lessor shall not interfere with such quiet use and enjoyment during the Lease Term so long as Lessee is not in default under the subject Property Schedule. 5.02 Location; Inspection. The Property will be initially located or based at the location specified in the applicable Property Schedule. Lessor shall have the right at all reasonable times during business hours to enter into and upon the property of Lessee for the purpose of inspecting the Property.

ARTICLE VI

6.01 Lease Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Lease Payments hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional, statutory or charter limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the faith and credit or taxing power of Lessee. Upon the appropriation of Lease Payments for a fiscal year, the Lease Payments for said fiscal year, and only the Lease Payments for said current fiscal year, shall be a binding obligation of Lessee; provided that such obligation shall not include a pledge of the taxing power of Lessee. 6.02 Payment of Lease Payments. Lessee shall promptly pay Lease Payments under each Property Schedule, exclusively from legally available funds, in lawful money of the United States of America, to Lessor in such amounts and on such dates as described in the applicable Property Schedule, at Lessor's address set forth on the first page of this Agreement, unless Lessor instructs Lessee otherwise. Lessee shall pay Lessor a charge on any delinquent Lease Payments under a Property Schedule in an amount sufficient to cover all additional costs and expenses incurred by Lessor from such delinquent Lease Payment. In addition, Lessee shall pay a late charge of five cents per dollar or the highest amount permitted by applicable law, whichever is lower, on all delinquent Lease Payments and interest on said delinquent amounts from the date such amounts were due until paid at the rate of 12% per annum or the maximum amount permitted by law, whichever is less. 6.03 Interest Component. A portion of each Lease Payment due under each Property Schedule is paid as, and represents payment of, interest, and each Property Schedule hereunder shall set forth the interest component (or method of computation thereof) of each Lease Payment thereunder during the Lease Term. 6.04 Lease Payments to be Unconditional. SUBJECT TO SECTION 6.06, THE OBLIGATIONS OF LESSEE TO PAY THE LEASE PAYMENTS DUE UNDER THE PROPERTY SCHEDULES AND TO PERFORM AND OBSERVE THE OTHER COVENANTS AND AGREEMENTS CONTAINED HEREIN SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT ABATEMENT, DIMINUTION, DEDUCTION, SET-OFF OR DEFENSE, FOR ANY REASON, INCLUDING WITHOUT LIMITATION, ANY DEFECTS, MALFUNCTIONS, BREAKDOWNS OR INFIRMITIES IN THE PROPERTY OR ANY ACCIDENT, CONDEMNATION OR UNFORESEEN CIRCUMSTANCES. THIS PROVISION SHALL NOT LIMIT LESSEE'S RIGHTS OR ACTIONS AGAINST ANY VENDOR AS PROVIDED IN SECTION 10.02. 6.05 Continuation of Lease by Lessee. Lessee intends to continue all Property Schedules entered into pursuant to this Agreement and to pay the Lease Payments thereunder. Lessee reasonably believes that legally available funds in an amount sufficient to make all Lease Payments during the term of all Property Schedules can be obtained. Lessee agrees that its staff will provide during the budgeting process for each budget year to the governing body of Lessee notification of any Lease Payments due under the Property Schedules during the following budget year. Notwithstanding this covenant, if Lessee fails to appropriate the Lease Payments for a Property Schedule pursuant to Section 6.06, such Property Schedule shall terminate at the end of the then current Original Term or Renewal Term. Although Lessee has made this covenant, in the event that it fails to provide such notice, no remedy is provided and Lessee shall not be liable for any damages for its failure to so comply. 6.06 Nonappropriation. If during the then current Original Term or Renewal Term, sufficient funds are not appropriated to make Lease Payments required under a Property Schedule for the following fiscal year, Lessee shall be deemed to not have renewed such Property Schedule for the following fiscal year and the Property Schedule shall terminate at the end of the then current Original Term or Renewal Term and Lessee shall not be obligated to make Lease Payments under said Property Schedule beyond the then current fiscal year for which funds have been appropriated. Upon the occurrence of such nonappropriation (a "Nonappropriation Event") Lessee shall, no later than the end of the fiscal year for which Lease Payments have been appropriated, deliver possession of the Property

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under said Property Schedule to Lessor. If Lessee fails to deliver possession of the Property to Lessor upon termination of said Property Schedule by reason of a Nonappropriation Event, the termination shall nevertheless be effective but Lessee shall be responsible for the payment of damages in an amount equal to the portion of Lease Payments thereafter coming due that is attributable to the number of days after the termination during which the Lessee fails to deliver possession and for any other loss suffered by Lessor as a result of Lessee's failure to deliver possession as required. In addition, Lessor may, by written instructions to any escrow agent who is holding proceeds of the Property Schedule, instruct such escrow agent to release all such proceeds and any earnings thereon to Lessor, such sums to be credited to Lessee's obligations under the Property Schedule and this Agreement. Lessee shall notify Lessor in writing within seven (7) days after the failure of the Lessee to appropriate funds sufficient for the payment of the Lease Payments, but failure to provide such notice shall not operate to extend the Lease Term or result in any liability to Lessee. 6.07 Defeasance of Lease Payments. Lessee may at any time irrevocably deposit in escrow with a defeasance escrow agent for the purpose of paying all of the principal component and interest component accruing under a Property Schedule, a sum of cash and non-callable securities consisting of direct obligations of, or obligations the principal of an interest on which are unconditionally guaranteed by, the United States of America or any agency or instrumentality thereof, in such aggregate amount, bearing interest at such rates and maturing on such dates as shall be required to provide funds sufficient for this purpose. Upon such defeasance, all right, title and interest of Lessor in the Property under said Property Schedule shall terminate. Lessee shall cause such investment to comply with the requirements of federal tax law so that the exclusion from gross income of the interest component of Lease Payments on said Property Schedule is not adversely affected. 6.08 Gross-Up. If an Event of Taxability occurs with respect to a Property Schedule, the interest component of Lease Payments on the Property Schedule shall thereafter be payable at the Taxable Rate, and Lessee shall pay to Lessor promptly following demand an amount sufficient to supplement prior Lease Payments on such Property Schedule so that Lessor receives the interest component of such Lease Payments, retroactive to the date as of which the interest component is determined to be includible in the gross income of Lessor for federal income tax purposes, calculated at the Taxable Rate, together with any penalties and interest actually imposed on Lessor as a result of the Event of Taxability. For purposes of this Section, “Event of Taxability” means, with respect to a Property Schedule, (a) a final determination by the Internal Revenue Service or a court of competent jurisdiction that the interest component of Lease Payments on the Property Schedule is includible for federal income tax purposes in the gross income of Lessor, or (b) receipt by Lessor of a written opinion of a nationally recognized public finance lawyer or law firm to the effect that there exists substantial doubt whether the interest component of Lease Payments on the Property Schedule is excludible for federal income tax purposes from the gross income of Lessor, in each case due to any action or failure to take action by Lessee. “Taxable Rate” means the interest rate at which the interest component of Lease Payments on a Property Schedule was originally calculated, divided by 0.79.

ARTICLE VII

7.01 Title to the Property. Upon acceptance of the Property by Lessee and unless otherwise required by the laws of the State, title to the Property shall vest in Lessee, subject to Lessor's interests under the applicable Property Schedule and this Agreement. 7.02 Personal Property. The Property is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Property or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. If requested by Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Property from any party having an interest in any such real estate or building. 7.03 Security Interest. To the extent permitted by law and to secure the performance of all of Lessee's obligations under this Agreement with respect to a Property Schedule, including without limitation all Property Schedules now existing or hereafter executed, Lessee grants to Lessor, for the benefit of Lessor and its successors and assigns, a security interest constituting a first lien on Lessee's interest in all of the Property under the Property Schedule, whether now owned or hereafter acquired, all additions, attachments, alterations and accessions to the Property, all substitutions and replacements for the Property, and on any proceeds of any of the foregoing, including insurance proceeds. Lessee shall execute any additional documents, including financing statements, affidavits, notices and similar instruments, in form and substance satisfactory to Lessor, which Lessor deems necessary or appropriate to establish, maintain and perfect a security interest in the Property in favor of Lessor and its successors and assigns. Lessee hereby authorizes Lessor to file all financing statements which Lessor deems necessary or appropriate to establish, maintain and perfect such security interest.

ARTICLE VIII

8.01 Maintenance of Property by Lessee. Lessee shall keep and maintain the Property in good condition and working order and in compliance with the manufacturer's specifications, shall use, operate and maintain the Property in conformity with all laws and regulations concerning the Property's ownership, possession, use and maintenance, and shall keep the Property free and clear of all liens and claims, other than those created by this Agreement. Lessee shall have sole responsibility to maintain and repair the Property. Should Lessee fail to maintain, preserve and keep the Property in good repair and working order and in accordance with manufacturer's specifications, and if requested by Lessor, Lessee will enter into maintenance contracts for the Property in form approved by Lessor and with approved providers. 8.02 Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Property free of all levies, liens and encumbrances, except for the interest of Lessor under this Agreement. The parties to this Agreement contemplate that the Property will be used for a governmental or proprietary purpose of Lessee and, therefore, that the Property will be exempt from all property taxes. The Lease Payments payable by Lessee under this Agreement and the Property Schedules hereunder have been established to reflect the savings resulting from this exemption from taxation. Lessee will take such actions necessary under applicable law to obtain said exemption. Nevertheless, if the use, possession or acquisition of the Property is determined to be subject to taxation or later becomes subject to such taxes, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to the Property. Lessee shall pay all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Property. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to any such taxes or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during the then current fiscal year of the Lease Term for such Property. 8.03 Insurance. At its own expense, Lessee shall maintain (a) casualty insurance insuring the Property against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State and any other risks reasonably required by Lessor in an amount equal to at least the outstanding principal component of Lease Payments, and (b) liability insurance that protects Lessor from liability in all events in an amount reasonably acceptable to Lessor, and (c) worker's compensation insurance covering all employees working on, in, near or about the Property; provided that Lessee may self-insure against all such risks. All insurance proceeds from casualty losses shall be payable as hereinafter provided in this Agreement. All such insurance shall be with insurers that are authorized to issue such insurance in the State. All such liability insurance shall name Lessor as an additional insured. All such casualty insurance shall contain a provision making any losses payable to Lessor and Lessee as their respective interests may appear. All such insurance shall contain a provision to the effect that such insurance shall not be canceled or modified without first giving written notice thereof to Lessor and Lessee at least thirty (30) days in advance of such cancellation or modification. Such changes shall not become effective without Lessor's prior written consent. Lessee shall furnish to Lessor, on or before the Commencement Date for each Property Schedule, and thereafter at Lessor's request, certificates evidencing such coverage, or, if Lessee self-insures, a written description of its self-insurance program together with a certification from Lessee's risk manager or insurance agent or consultant to the effect that Lessee's self-insurance program provides adequate coverage against the risks listed above. 8.04 Advances. In the event Lessee shall fail to either maintain the insurance required by this Agreement or keep the Property in good repair and working order, Lessor may, but shall be under no obligation to, purchase the required insurance and pay the cost of the premiums thereof or maintain and repair the Property and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the Lease Term for the applicable Property Schedule and shall be due and payable on the next Lease Payment Date and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the date such amounts are advanced until paid at the rate of 12% per annum or the maximum amount permitted by law, whichever is less.

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ARTICLE IX

9.01 Damage or Destruction. If (a) the Property under a Property Schedule or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty, or (b) title to, or the temporary use of, the Property under a Property Schedule or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessor and Lessee will cause the Net Proceeds (as hereinafter defined) of any insurance claim, condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Property, unless Lessee shall have exercised its right to defease the Property Schedule as provided herein, or unless Lessee shall have exercised its option to purchase Lessor's interest in the Property if the Property Schedule so provides. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. For purposes of Section 8.03 and this Article IX, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim, condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof. 9.02 Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 9.01, Lessee shall (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds and, if Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Section 6.02, or (b) defease the Property Schedule pursuant to Section 6.07, or (c) exercise its option to purchase Lessor's interest in the Property pursuant to the optional purchase provisions of the Property Schedule, if any. The amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement or after such defeasance or purchase may be retained by Lessee.

ARTICLE X

10.01 Disclaimer of Warranties. LESSOR MAKES NO (AND SHALL NOT BE DEEMED TO HAVE MADE ANY) WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN, OPERATION OR CONDITION OF, OR THE QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN, THE PROPERTY, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE STATE OF TITLE THERETO OR ANY COMPONENT THEREOF, THE ABSENCE OF LATENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), AND LESSOR HEREBY DISCLAIMS THE SAME; IT BEING UNDERSTOOD THAT THE PROPERTY IS LEASED TO LESSEE “AS IS” ON THE DATE OF THIS AGREEMENT OR THE DATE OF DELIVERY, WHICHEVER IS LATER, AND ALL SUCH RISKS, IF ANY, ARE TO BE BORNE BY LESSEE. Lessee acknowledges that it has made (or will make) the selection of the Property from the Vendor based on its own judgment and expressly disclaims any reliance upon any statements or representations made by Lessor. Lessee understands and agrees that (a) neither the Vendor nor any sales representative or other agent of Vendor, is (i) an agent of Lessor, or (ii) authorized to make or alter any term or condition of this Agreement, and (b) no such waiver or alteration shall vary the terms of this Agreement unless expressly set forth herein. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, the Property Schedules, or the existence, furnishing, functioning or use of any item, product or service provided for in this Agreement or the Property Schedules. 10.02 Vendor’s Warranties. Lessor hereby irrevocably assigns to Lessee all rights that Lessor may have to assert from time to time whatever claims and rights (including without limitation warranties) related to the Property against the Vendor. Lessee’s sole remedy for the breach of such warranty, indemnification or representation shall be against the Vendor of the Property, and not against Lessor, nor shall such matter have any effect whatsoever on the rights and obligations of Lessor with respect to this Agreement, including the right to receive full and timely payments hereunder. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties of the Vendor of the Property. 10.03 Use of the Property. Lessee will not install, use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Agreement and the applicable Property Schedule. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Property. In addition, Lessee agrees to comply in all respects with all laws of the jurisdiction in which its operations involving any item of Property may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the items of the Property; provided that Lessee may contest in good faith the validity or application of any such law or rule in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest of Lessor in and to the Property or its interest or rights under this Agreement. Lessee shall promptly notify Lessor in writing of any pending or threatened investigation, inquiry, claim or action by any governmental authority which could adversely affect this Agreement, any Property Schedule or the Property thereunder. 10.04 Modifications. Subject to the provisions of this Section, Lessee shall have the right, at its own expense, to make alterations, additions, modifications or improvements to the Property. All such alterations, additions, modifications and improvements shall thereafter comprise part of the Property and shall be subject to the provisions of this Agreement. Such alterations, additions, modifications and improvements shall not in any way damage the Property, substantially alter its nature or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Property, on completion of any alterations, additions, modifications or improvements made pursuant to this Section, shall be of a value which is equal to or greater than the value of the Property immediately prior to the making of such alterations, additions, modifications and improvements. Lessee shall, at its own expense, make such alterations, additions, modifications and improvements to the Property as may be required from time to time by applicable law or by any governmental authority.

ARTICLE XI

11.01 Option to Purchase. Lessee shall have the option to purchase Lessor’s entire interest in all of the Property subject to a Property Schedule and to terminate any restrictions herein on the Property under such Property Schedule on the last day of the Lease Term for a Property Schedule, if the Property Schedule is still in effect on such day, upon payment in full of the Lease Payments due thereunder plus payment of One (1) Dollar to Lessor. Lessee shall give written notice to Lessor of its intent to purchase Lessor’s interest in the Property at least sixty (60) days prior to the last day of the Lease Term for applicable Property Schedule. Upon exercise of the purchase option as set forth in this Section 11.01 and payment of the purchase price under the applicable Property Schedule, and performance by Lessee of all other terms, conditions and provisions hereof, Lessor shall deliver to Lessee all such documents and instruments as Lessee may reasonably require to evidence the transfer, without warranty by or recourse to Lessor, of all of Lessor’s right, title and interest in and to the Property subject to such Property Schedule to Lessee. 11.02 Option to Prepay. Lessee shall have the option to prepay in whole the Lease Payments due under a Property Schedule, but only if the Property Schedule so provides, and on the terms set forth in the Property Schedule.

ARTICLE XII

12.01 Assignment by Lessor. Lessor’s right, title and interest in, to and under each Property Schedule and the Property under such Property Schedule may be assigned and reassigned in whole or in part to one or more assignees or sub assignees by Lessor without the necessity of providing notice to or obtaining the consent of Lessee; provided that Lessee shall have no obligation to make payments to any assignee unless and until Lessee has received notice of the name, address and tax identification number of the assignee. The initial Lessor or its assignee(s) shall maintain a register of all assignees of each Property Schedule. To the extent permitted by applicable law, such assignees may include trust agents for the benefit of holders of certificates of participation. Lessee agrees that if Lessor sells, assigns or transfers a Property Schedule, Lessor’s assignee will have the same rights and benefits that Lessor has now and will not have to perform any of Lessor’s obligations thereunder. Lessee agrees that Lessor’s assignee will not be subject to any claims, defenses, or offsets that Lessee may have against Lessor. Lessee agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements that may be reasonably requested by Lessor or any assignee to protect its interests in this Agreement and the Property Schedules. 12.02 Property Schedules Separate Financings. Assignees of the Lessor’s rights in one Property Schedule shall have no rights in any other Property Schedule unless such rights have been separately assigned. 12.03 Assignment and Subleasing by Lessee. NONE OF LESSEE’S RIGHT, TITLE AND INTEREST IN, TO AND UNDER THIS AGREEMENT AND IN THE PROPERTY MAY BE ASSIGNED, SUBLEASED OR ENCUMBERED BY LESSEE FOR ANY REASON, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.

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12.04 Release and Indemnification Covenants. To the extent permitted by applicable law, Lessee shall indemnify, protect, hold harmless, save and keep harmless Lessor from and against any and all liability, obligation, loss, claim and damage whatsoever, regardless of cause thereof, and all expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest (collectively, “Losses”) arising out of or resulting from the entering into this Agreement, any Property Schedules hereunder, the ownership of any item of the Property, the ordering, acquisition, use, operation, condition, purchase, delivery, rejection, storage or return of any item of the Property or any accident in connection with the operation, use, condition, possession, storage or return of any item of the Property resulting in damage to property or injury to or death to any person; provided, however, that Lessee shall not be required to indemnify Lessor for Losses arising out of or resulting from Lessor’s own willful or grossly negligent conduct, or for Losses arising out of or resulting from Lessor’s preparation of disclosure material relating to certificates of participation in this Agreement and any Property Schedule (other than disclosure material provided to Lessor by Lessee). The indemnification arising under this Section shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement, or the applicable Property Schedule, or the termination of the Lease Term for such Property Schedule for any reason.

ARTICLE XIII

13.01 Events of Default Defined. Any of the following shall constitute an “Event of Default” under a Property Schedule:

(a) Failure by Lessee to pay any Lease Payment under the Property Schedule or other payment required to be paid with respect thereto at the time specified therein;

(b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed with respect to the Property

Schedule, other than as referred to in subparagraph (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected;

(c) Any statement, representation or warranty made by Lessee in or pursuant to the Property Schedule or its execution, delivery or performance shall

prove to have been false, incorrect, misleading or breached in any material respect on the date when made; (d) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the

assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency proceeding; or

(e) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian

or liquidator of Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of 60 consecutive days.

The foregoing provisions of Section 13.01 are subject to the following limitation: if by reason of force majeure Lessee is unable in whole or in part to

perform its agreements under this Agreement and the Property Schedule (other than the obligations on the part of Lessee contained in Article VI hereof) Lessee shall not be in default during the continuance of such inability. The term "force majeure" as used herein shall mean the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States or of the State or any of their departments, agencies or officials, or any civil or military authority; insurrections, riots, landslides, earthquakes, fires, storms, droughts, floods, explosions, breakage or accident to machinery, transmission pipes or canals; or any other cause or event not reasonably within the control of Lessee. A Nonappropriation Event is not an Event of Default. 13.02 Remedies on Default. Whenever any Event of Default exists with respect to a Property Schedule, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps:

(a) Without terminating the Property Schedule, and by written notice to Lessee, Lessor may declare all Lease Payments and other amounts payable by Lessee thereunder to the end of the then-current budget year of Lessee to be due, including without limitation delinquent Lease Payments under the Property Schedule from prior budget years, and such amounts shall thereafter bear interest at the rate of 12% per annum or the maximum rate permitted by applicable law, whichever is less;

(b) Lessor may terminate the Property Schedule, may enter the premises where the Property subject to the Property Schedule is located and retake

possession of the Property, or require Lessee, at Lessee's expense, to promptly return any or all of the Property to the possession of Lessor at such place within the United States as Lessor shall specify, and Lessor may thereafter dispose of the Property in accordance with Article 9 of the Uniform Commercial Code in effect in the State; provided, however, that any proceeds from the disposition of the property in excess of the sum required to (i) pay off any outstanding principal component of Lease Payments, (ii) pay any other amounts then due under the Property Schedule, and (iii) pay Lessor's costs and expenses associated with the disposition of the Property (including attorneys’ fees), shall be paid to Lessee or such other creditor of Lessee as may be entitled thereto, and further provided that no deficiency shall be allowed against Lessee except with respect to unpaid costs and expenses incurred by Lessor in connection with the disposition of the Property;

(c) By written notice to any escrow agent who is holding proceeds of the Property Schedule, Lessor may instruct such escrow agent to release all such

proceeds and any earnings thereon to Lessor, such sums to be credited to payment of Lessee's obligations under the Property Schedule; (d) Lessor may take any action, at law or in equity, that is permitted by applicable law and that may appear necessary or desirable to enforce or to

protect any of its rights under the Property Schedule and this Agreement.

Notwithstanding the foregoing, if the proceeds are insufficient to pay items (i) to (iii) in Section 13.02(b) in whole, Lessee shall remain obligated after application of proceeds to items (i) and (ii), to pay in whole the amounts for item (iii).

13.03 No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any notice, other than such notice as may be required in this Article. 13.04 Costs and Attorney Fees. Upon the occurrence of an Event of Default by Lessee in the performance of any term of this Agreement, Lessee agrees to pay to Lessor or reimburse Lessor for, in addition to all other amounts due hereunder, all of Lessor's costs of collection, including reasonable attorney fees, whether or not suit or action is filed thereon. Any such costs shall be immediately due and payable upon written notice and demand given to Lessee, shall be secured by this Agreement until paid and shall bear interest at the rate of 12% per annum or the maximum amount permitted by law, whichever is less. In the event suit or action is instituted to enforce any of the terms of this Agreement, the prevailing party shall be entitled to recover from the other party such sum as the court may adjudge reasonable as attorneys' fees at trial or on appeal of such suit or action or in any bankruptcy proceeding, in addition to all other sums provided by law. 103

ARTICLE XIV

14.01 Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by certified mail, postage prepaid, to the parties hereto at the addresses as specified on the first page of this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party), to any assignee at its address as it appears on the registration books maintained by Lessee. 14.02 Arbitrage Certificates. Unless a separate Arbitrage Certificate is delivered on the Commencement Date, Lessee shall be deemed to make the following representations and covenants as of the Commencement Date for each Property Schedule:

(a) The estimated total costs, including taxes, freight, installation, and cost of issuance, of the Property under the Property Schedule will not be less than the total principal amount of the Lease Payments.

(b) The Property under the Property Schedule has been ordered or is expected to be ordered within six months after the Commencement Date and the

Property is expected to be delivered and installed, and the Vendor fully paid, within eighteen months from the Commencement Date. Lessee will pursue the completion of the Property and the expenditure of the net proceeds of the Property Schedule with due diligence.

(c) Lessee has not created or established, and does not expect to create or establish, any sinking fund or other similar fund (i) that is reasonably

expected to be used to pay the Lease Payments under the Property Schedule, or (ii) that may be used solely to prevent a default in the payment of the Lease Payments under the Property Schedule.

(d) The Property under the Property Schedule has not been and is not expected to be sold or otherwise disposed of by Lessee, either in whole or in

major part, prior to the last maturity of the Lease Payments under the Property Schedule. (e) There are no other obligations of Lessee which (i) are being sold within 15 days of the Commencement Date of the Property Schedule; (ii) are being

sold pursuant to the same plan of financing as the Property Schedule; and (iii) are expected to be paid from substantially the same source of funds. (f) The officer or official who has executed the Property Schedule on Lessee's behalf is familiar with Lessee's expectations regarding the use and

expenditure of the proceeds of the Property Schedule. To the best of Lessee's knowledge, information and belief, the facts and estimates set forth herein are accurate and the expectations of Lessee set forth herein are reasonable.

14.03 Further Assurances. Lessee agrees to execute such other and further documents, including, without limitation, confirmatory financing statements, continuation statements, certificates of title and the like, and to take all such action as may be necessary or appropriate, from time to time, in the reasonable opinion of Lessor, to perfect, confirm, establish, reestablish, continue, or complete the interests of Lessor in this Agreement and the Property Schedules, to consummate the transactions contemplated hereby and thereby, and to carry out the purposes and intentions of this Agreement and the Property Schedules. 14.04 Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. 14.05 Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 14.06 Waiver of Jury Trials. Lessee and Lessor hereby irrevocably waive all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the actions of Lessor or Lessee in the negotiation, administration, performance or enforcement hereof. 14.07 Amendments, Changes and Modifications. This Agreement may be amended in writing by Lessor and Lessee to the extent the amendment or modification does not apply to outstanding Property Schedules at the time of such amendment or modification. The consent of all assignees shall be required to any amendment or modification before such amendment or modification shall be applicable to any outstanding Property Schedule. 14.08 Execution in Counterparts. This Agreement and the Property Schedules hereunder may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 14.09 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State. 14.10 Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives.

U.S. Bank Equipment Finance

Town of Los Gatos

Lessor

Lessee

X

Signature Date

Signature Date

Documentation Analyst

Print Name

Title

Print Name

Title

X

Attest By Signature

Print Name

Title

104

APPLICATION NO.

2438413

Property Schedule No. 1 Master Tax-Exempt Lease/Purchase Agreement

This Property Schedule No. 1 is entered into as of the Commencement Date set forth below, pursuant to that certain Master Tax-Exempt Lease/Purchase Agreement (the “Master Agreement”), dated as of , between U.S. Bank Equipment Finance and Town of Los Gatos. 1. Interpretation. The terms and conditions of the Master Agreement are incorporated herein by reference as if fully set forth herein. Reference is made to

the Master Agreement for all representations, covenants and warranties made by Lessee in the execution of this Property Schedule, unless specifically set forth herein. In the event of a conflict between the provisions of the Master Agreement and the provisions of this Property Schedule, the provisions of this Property Schedule shall control. All capitalized terms not otherwise defined herein shall have the meanings provided in the Master Agreement.

2. Commencement Date. The Commencement Date for this Property Schedule is the date that Lessor pays Vendor for the Property. 3. Property Description and Payment Schedule. The Property subject to this Property Schedule is described in Exhibit 1 and Appendix A. Lessee shall not

remove such property from the locations set forth therein without giving prior written notice to Lessor. The Lease Payment Schedule for this Property Schedule is set forth in Exhibit 1 and Appendix 2.

4. Bank Qualification and Arbitrage Rebate. Attached as Exhibit 2. 5. Certificate of Acceptance. The form of Certificate of Acceptance is attached as Exhibit 3. 6. Lessee's General and Incumbency Certificate. The Lessee's General and Incumbency Certificate is attached as Exhibit 4. 7. Lessee’s Counsel’s Opinion. The Opinion of Lessee's Counsel is attached as Exhibit 5. 8. Additional Purchase Option Provisions. In addition to the Purchase Option provisions set forth in the Master Agreement, Lease Payments payable under

this Property Schedule shall be subject to prepayment in whole at any time by payment of the applicable Termination Amount set forth in Appendix B to Exhibit 1 and payment of all accrued and unpaid interest through the date of prepayment.

9. Private Activity Issue. Lessee understands that among other things, in order to maintain the exclusion of the interest component of Lease Payments from

gross income for federal income tax purposes, it must limit and restrict the rights private businesses (including, for this purpose, the federal government and its agencies and organizations described in the Code § 501(c)(3)) have to use the Property. Each of these requirements will be applied beginning on the later of the Commencement Date or date each portion of the Property is placed in service and will continue to apply until earlier of the end of the economic useful life of the Property or the date the Agreement or any tax-exempt obligation issued to refund the Property Schedule is retired (the “Measurement Period”). Lessee will comply with the requirements of Section 141 of the Code and the regulations thereunder which provide restrictions on special legal rights that users other than Lessee or a state or local government or an agency or instrumentality of a state or a local government (an “Eligible User”) may have to use the Property. For this purpose, special legal rights may arise from a management or service agreement, lease, research agreement or other arrangement providing any entity except an Eligible User the right to use the Property. Any use of the Property by a user other than an Eligible User is referred to herein as “Non-Qualified Use”. Throughout the Measurement Period, all of the Property is expected to be owned by Lessee. Throughout the Measurement Period, Lessee will not permit the Non-Qualified Use of the Property to exceed 10%.

10. Expiration. Lessor, at its sole determination, may choose not to accept this Property Schedule if the fully executed, original Master Agreement (including

this Property Schedule and all ancillary documents) is not received by Lessor at its place of business by 1/1/2019. IN WITNESS WHEREOF, Lessor and Lessee have caused this Property Schedule to be executed in their names by their duly authorized representatives. .


Town of Los Gatos

Lessor

Lessee

X

Signature Date

Signature Date

Documentation Analyst

Print Name

Title

Print Name

Title

X

Attest By Signature

Print Name

Title

105

Exhibit 1

APPLICATION NO.

2438413

Property Description and Payment Schedule

Re: Property Schedule No. 1 to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bank Equipment Finance and Town of Los Gatos. THE PROPERTY IS AS FOLLOWS: The Property as more fully described in Appendix A incorporated herein by reference and attached hereto. It includes all replacements, parts, repairs, additions, accessions and accessories incorporated therein or affixed or attached thereto and any and all proceeds of the foregoing, including, without limitation, insurance recoveries. PROPERTY LOCATION: Various - see Appendix A. USE: Copiers/Printers. This use is essential to the proper, efficient and economic functioning of Lessee or to the services that Lessee provides; and Lessee has immediate need for and expects to make immediate use of substantially all of the Property, which need is not temporary or expected to diminish in the foreseeable future.

Amortization and Lease Payment Schedule

See attached Appendix B for Amortization and Lease Payment Schedule.

IN WITNESS WHEREOF, Lessee has caused this Property Description to be executed by their duly authorized representative.

Town of Los Gatos

Lessee

X

Signature

Print Name

Title

106

Appendix A

APPLICATION NO.

2438413

Property Description

VENDOR:

MBS Business Systems

STREET ADDRESS

CITY

STATE

ZIP

325 Victor St Ste A

Salinas

CA

93907

PROPERTY DESCRIPTION

QUANTITY

DESCRIPTION

SERIAL NUMBER

PROPERTY LOCATION

1

Konica Minolta Bizhub 808 Digital MFP

1

Konica Minolta Bizhub C458 Digital Color MFP

1


1


1


1

Konica Minolta Bizhub C3100P Digital Color Printer

1

Konica Minolta Bizhub C3100P Digital Color Printer

1

Konica Minolta Bizhub C658 Digital Color Printer

1


1


1


1


1


1


1


1


1


1

Konica Minolta Bizhub C3851FS Digital Color MFP

1


1


1


1


1

PrinterLogic Print Management Solution

1

Konica Minolta Bizhub C3110 Color Printer - Service Only

1

Konica Minolta Bizhub C3110 Color Printer - Service Only

1

Konica Minolta Bizhub 4700P Printers - Service Only

1


1


1


1


1


1


1


1


1


1


1


1


LESSEE ACCEPTANCE

Town of Los Gatos

X

NAME OF LESSEE

SIGNATURE

TITLE

DATED

107

Appendix A

APPLICATION NO.

2438413

Property Description

VENDOR:


STREET ADDRESS

CITY

STATE

ZIP

325 Victor St Ste A

Salinas

CA

93907

PROPERTY DESCRIPTION

QUANTITY

DESCRIPTION

SERIAL NUMBER

PROPERTY LOCATION

1


1


1


1


LESSEE ACCEPTANCE

Town of Los Gatos

X

NAME OF LESSEE

SIGNATURE

TITLE

DATED

108

Appendix B

APPLICATION NO.

2438413

Amortization and Lease Payment Schedule

Term: 60 months

Payment Structure: Monthly in Arrears

Interest Rate: 6.380%

Beginning Balance includes $10,600.70 for sales tax.

If the Lease Payment Dates are not defined in this Amortization and Lease Payment Schedule, the first Lease Payment shall be due 30 days after the Commencement Date and each subsequent Lease Payment shall be due monthly thereafter.

Payment No.

Lease Payment

Interest Portion

Principal Portion

Outstanding Balance

Termination Amount (After Making Said

Payment)

Beginning Balance 128,386.47

1 2,504.82 682.59 1,822.23 126,564.24 130,361.17 2 2,504.82 672.90 1,831.92 124,732.32 128,474.29 3 2,504.82 663.16 1,841.66 122,890.66 126,577.38 4 2,504.82 653.37 1,851.45 121,039.21 124,670.39 5 2,504.82 643.53 1,861.29 119,177.92 122,753.26 6 2,504.82 633.63 1,871.19 117,306.73 120,825.93 7 2,504.82 623.68 1,881.14 115,425.59 118,888.36 8 2,504.82 613.68 1,891.14 113,534.45 116,940.48 9 2,504.82 603.63 1,901.19 111,633.26 114,982.26

10 2,504.82 593.52 1,911.30 109,721.96 113,013.62 11 2,504.82 583.36 1,921.46 107,800.50 111,034.52 12 2,504.82 573.14 1,931.68 105,868.82 109,044.88 13 2,504.82 562.87 1,941.95 103,926.87 107,044.68 14 2,504.82 552.55 1,952.27 101,974.60 105,033.84 15 2,504.82 542.17 1,962.65 100,011.95 103,012.31 16 2,504.82 531.73 1,973.09 98,038.86 100,980.03 17 2,504.82 521.24 1,983.58 96,055.28 98,936.94 18 2,504.82 510.70 1,994.12 94,061.16 96,882.99 19 2,504.82 500.09 2,004.73 92,056.43 94,818.12 20 2,504.82 489.44 2,015.38 90,041.05 92,742.28 21 2,504.82 478.72 2,026.10 88,014.95 90,655.40 22 2,504.82 467.95 2,036.87 85,978.08 88,557.42 23 2,504.82 457.12 2,047.70 83,930.38 86,448.29 24 2,504.82 446.23 2,058.59 81,871.79 84,327.94 25 2,504.82 435.29 2,069.53 79,802.26 82,196.33 26 2,504.82 424.28 2,080.54 77,721.72 80,053.37 27 2,504.82 413.22 2,091.60 75,630.12 77,899.02 28 2,504.82 402.10 2,102.72 73,527.40 75,733.22 29 2,504.82 390.92 2,113.90 71,413.50 73,555.91 30 2,504.82 379.68 2,125.14 69,288.36 71,367.01

109

31 2,504.82 368.38 2,136.44 67,151.92 69,166.48 32 2,504.82 357.03 2,147.79 65,004.13 66,954.25 33 2,504.82 345.61 2,159.21 62,844.92 64,730.27 34 2,504.82 334.13 2,170.69 60,674.23 62,494.46 35 2,504.82 322.59 2,182.23 58,492.00 60,246.76 36 2,504.82 310.98 2,193.84 56,298.16 57,987.10 37 2,504.82 299.32 2,205.50 54,092.66 55,715.44 38 2,504.82 287.59 2,217.23 51,875.43 53,431.69 39 2,504.82 275.81 2,229.01 49,646.42 51,135.81 40 2,504.82 263.95 2,240.87 47,405.55 48,827.72 41 2,504.82 252.04 2,252.78 45,152.77 46,507.35 42 2,504.82 240.06 2,264.76 42,888.01 44,174.65 43 2,504.82 228.02 2,276.80 40,611.21 41,829.55 44 2,504.82 215.92 2,288.90 38,322.31 39,471.98 45 2,504.82 203.75 2,301.07 36,021.24 37,101.88 46 2,504.82 191.51 2,313.31 33,707.93 34,719.17 47 2,504.82 179.21 2,325.61 31,382.32 32,323.79 48 2,504.82 166.85 2,337.97 29,044.35 29,915.68 49 2,504.82 154.42 2,350.40 26,693.95 27,494.77 50 2,504.82 141.92 2,362.90 24,331.05 25,060.98 51 2,504.82 129.36 2,375.46 21,955.59 22,614.26 52 2,504.82 116.73 2,388.09 19,567.50 20,154.53 53 2,504.82 104.03 2,400.79 17,166.71 17,681.71 54 2,504.82 91.27 2,413.55 14,753.16 15,195.75 55 2,504.82 78.44 2,426.38 12,326.78 12,696.58 56 2,504.82 65.54 2,439.28 9,887.50 10,184.13 57 2,504.82 52.57 2,452.25 7,435.25 7,658.31 58 2,504.82 39.53 2,465.29 4,969.96 5,119.06 59 2,504.82 26.42 2,478.40 2,491.56 2,566.31 60 2,504.82 13.26 2,491.56 0.00

150,289.20 21,902.73 128,386.47

This Amortization and Lease Payment Schedule is hereby verified as correct by the undersigned, who acknowledges receipt of a copy.

LESSEE ACCEPTANCE

Town of Los Gatos

X

NAME OF LESSEE

SIGNATURE

TITLE

DATED

110

Exhibit 2

APPLICATION NO.

2438413

Bank Qualification and Arbitrage Rebate

U.S. Bank Equipment Finance 1310 Madrid Street Marshall, MN 56258

Re: Property Schedule No. 1 to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bank Equipment

Finance and Town of Los Gatos. [Consult tax counsel for applicable provisions] Bank Qualified Tax-Exempt Obligation under Section 265 Check One: _____ Lessee hereby designates this Property Schedule as a "qualified tax-exempt obligation" as defined in Section

265(b)(3)(B) of the Code. Lessee reasonably anticipates issuing tax-exempt obligations (excluding private activity bonds other than qualified 501(c)(3) bonds and including all tax-exempt obligations of subordinate entities of the Lessee) during the calendar year in which the Commencement Date of this Property Schedule falls, in an amount not exceeding $10,000,000.

or

_____ Not applicable. Arbitrage Rebate Eighteen Month Exception: Pursuant to Treasury Regulations Section 1.148-7(d), the gross proceeds of this Property Schedule will be expended for the governmental purposes for which this Property Schedule was entered into, as follows: at least 15% within six months after the Commencement Date, at least 60% within 12 months after the Commencement Date, and 100% within 18 months after the Commencement Date. If Lessee is unable to comply with Section 1.148-7(d) of the Treasury Regulations, Lessee shall compute rebatable arbitrage on this Agreement and pay rebatable arbitrage to the United States at least once every five years, and within 60 days after payment of the final Lease Payment due under this Agreement. Consult tax counsel if there is any chance that the Eighteen Month Exception will not be met.

IN WITNESS WHEREOF, Lessee has caused this Bank Qualification and Arbitrage Rebate to be executed by their duly authorized representative.

Town of Los Gatos

Lessee

X

Signature

Print Name

Title

111

Exhibit 3

APPLICATION NO.

2438413

Certificate of Acceptance

U.S. Bank Equipment Finance 1310 Madrid Street Marshall, MN 56258 Re: Property Schedule No. 1 to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bank Equipment

Finance and Town of Los Gatos. Ladies and Gentlemen: In accordance with the above-referenced Master Tax-Exempt Lease/Purchase Agreement (the "Master Agreement"), the undersigned ("Lessee") hereby certifies and represents to, and agrees with, U.S. Bank Equipment Finance ("Lessor"), as follows:

1. The Property, as such terms are defined in the above-referenced Property Schedule, has been acquired, made, delivered, installed and accepted on the date indicated below.

2. Lessee has conducted such inspection and/or testing of the Property as it deems necessary and appropriate and hereby acknowledges that it accepts the Property for all purposes.

3. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default or a Nonappropriation Event (as such terms are defined in the Master Agreement) exists at the date hereof.

4. Billing Address. If billing address differs from the address listed on the Master Tax Exempt Lease/Purchase Agreement please list below:

BILLING NAME

STREET ADDRESS

CITY

STATE

ZIP

IN WITNESS WHEREOF, Lessee has caused this Certificate of Acceptance to be executed by their duly authorized representative.

Acceptance Date

Town of Los Gatos

Lessee

X

Signature

Print Name

Title

112

Exhibit 4

APPLICATION NO.

2438413

Lessee’s General and Incumbency Certificate

GENERAL CERTIFICATE

Re: Property Schedule No. 1 to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bank Equipment Finance, a division of U.S. Bank National Association and Town of Los Gatos (“Lessee”).

The undersigned, being the duly elected, qualified and acting official of Lessee holding the title stated in the signature line below, does hereby certify as of the date of this Certificate and the date of the Agreement (as defined below), as follows:

1. Lessee did, at a meeting of the governing body of the Lessee, by resolution or ordinance duly enacted, in accordance with all requirements of law, approve and authorize the execution and delivery of the above-referenced Property Schedule (the "Property Schedule") and the Master Tax-Exempt Lease/Purchase Agreement (the “Master Agreement”) (collectively, the “Agreement”) by the undersigned.

2. The meeting(s) of the governing body of the Lessee at which the Master Agreement and the Property Schedule were approved and authorized to be executed was duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, and the enactment approving the Master Agreement and the Property Schedule and authorizing the execution thereof has not been altered or rescinded. All meetings of the governing body of Lessee relating to the authorization and delivery of Master Agreement and the Property Schedule have been: (a) held within the geographic boundaries of the Lessee; (b) open to the public, allowing all people to attend; (c) conducted in accordance with internal procedures of the governing body; and (d) conducted in accordance with the charter of the Lessee, if any, and the laws of the State.

3. No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default or a Nonappropriation Event (as such terms are defined in the Master Agreement) exists at the date hereof with respect to this Property Schedule or any other Property Schedules under the Master Agreement.

4. The acquisition of all of the Property under the Property Schedule has been duly authorized by the governing body of Lessee.

5. Lessee has, in accordance with the requirements of law, fully budgeted and appropriated sufficient funds for the current budget year to make the Lease Payments scheduled to come due during the current budget year under the Property Schedule and to meet its other obligations for the current budget year and such funds have not been expended for other purposes.

6. As of the date hereof, no litigation is pending, (or, to my knowledge, threatened) against Lessee in any court (a) seeking to restrain or enjoin the delivery of the Master Agreement or the Property Schedule or of other agreements similar to the Master Agreement; (b) questioning the authority of Lessee to execute the Master Agreement or the Property Schedule, or the validity of the Master Agreement or the Property Schedule, or the payment of principal of or interest on, the Property Schedule; (c) questioning the constitutionality of any statute, or the validity of any proceedings, authorizing the execution of the Master Agreement and the Property Schedule; or (d) affecting the provisions made for the payment of or security for the Master Agreement and the Property Schedule.

IN WITNESS WHEREOF, the undersigned has signed this Certificate on the date stated below.

Town of Los Gatos

X

Lessee Signature of Person to Sign Agreement Print Title of Person to Sign Agreement

Print Name of Person to Sign Agreement Print Date that Above Person Signed this Certificate

INCUMBENCY CERTIFICATE

Re: Property Schedule No. 1 to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bank Equipment Finance, a division of U.S. Bank National Association and Town of Los Gatos (“Lessee”).

The undersigned, being the duly elected, qualified and acting Secretary, Clerk or other duly authorized official or signatory of the Lessee does hereby certify, as of the date of this Certificate and the date of the Agreement (as defined in the General Certificate above), as follows:

As of the date of the meeting(s) of the governing body of the Lessee at which the above-referenced Master Agreement and the Property Schedule were approved and authorized to be executed, and as of the date hereof, the below-named representative of the Lessee held and holds the office set forth below, and the signature set forth below is his/her true and correct signature.

NAME OF PERSON SIGNING AGREEMENT

TITLE OF PERSON SIGNING

AGREEMENT

SIGNATURE OF PERSON SIGNING AGREEMENT

IN WITNESS WHEREOF, the undersigned has signed this Certificate on the date stated below.

X

Signature of Secretary, Clerk or other duly authorized official or signatory of Lessee (Cannot be same as Person Signing Agreement) Print Title of Person who signed this Certificate

Print Name of Person Signing this Certificate Print Date that Above Person Signed this Certificate

u

113

APPLICATION NO.

2438413

Insurance Authorization and Verification

Re: Property Schedule No. 1 to Master Tax Exempt Lease/Purchase Agreement between U.S. Bank Equipment Finance and Town of Los Gatos. Lessor: U.S. Bank Equipment Finance 1310 Madrid Street, Ste. 101 Marshall, MN 56258 Lessee: Town of Los Gatos 110 E Main St Los Gatos CA 95031 TO THE LESSEE: In connection with the above-referenced Property Schedule, Lessor requires proof in the form of this document, executed by both Lessee* and Lessee’s agent, that Lessee's insurable interest in the financed property (the “Property”) meets Lessor’s requirements as follows, with coverage including, but not limited to, fire, extended coverage, vandalism, and theft:

LESSOR, AND ITS SUCCESSORS AND ASSIGNS, shall be covered as both ADDITIONAL INSURED and LENDER'S LOSS PAYEE with regard to all equipment financed or leased by policy holder through or from Lessor. All such insurance shall contain a provision to the effect that such insurance shall not be canceled or modified without first giving written notice thereof to Lessor and Lessee at least thirty (30) days in advance of such cancellation or modification.

Lessee must carry GENERAL LIABILITY (and/or, for vehicles, Automobile Liability) in the amount of no less than $1,000,000.00 (one million dollars).

Lessee must carry PROPERTY Insurance (or, for vehicles, Physical Damage Insurance) in an amount no less than the 'Insurable Value' $128,386.47, with deductibles no more than $10,000.00.

*Lessee: Please execute this form and return with your document package. Lessor will fax this form to your insurance agency for endorsement. In lieu of agent endorsement, Lessee’s agency may submit insurance certificates demonstrating compliance with all requirements. Should you have any questions, please contact U.S. Bank Equipment Finance at 800-328-5371. By signing, Lessee authorizes the Agent named below: 1) to complete and return this form as indicated; and 2) to endorse the policy and subsequent renewals to reflect the required coverage as outlined above.

NAME OF AGENCY

NAME OF AGENT

STREET ADDRESS

CITY

STATE

ZIP

PHONE

FAX

E-MAIL

LESSEE ACCEPTANCE

Town of Los Gatos

X

NAME OF LESSEE

SIGNATURE

TITLE

DATED TO THE AGENT: In lieu of providing a certificate, please execute this form in the space below and promptly fax it to Lessor at 866-405-8329. This fully endorsed form shall serve as proof that Lessee's insurance meets the above requirements.

Agent hereby verifies that the above requirements have been met in regard to the Property listed below.

AGENT ACCEPTANCE

X

NAME OF AGENCY

SIGNATURE

PRINT NAME

DATED

Insurable Value: $128,386.47

ATTACHED: PROPERTY DESCRIPTION FOR PROPERTY SCHEDULE NO.: 1

114

Tax-Exempt Purchase Agreement

AGREEMENT NO.

2438413

Addendum (California Judicial Reference Agreement)

This California Judicial Reference Agreement (“Agreement”) is entered into in connection with any existing financing (“Financing”) provided by U.S.Bank Equipment Finance (“Lessor/Seller”) to Town of Los Gatos (“Lessee/Purchaser”) evidenced, secured and/or supported by one or more leases, loan agreements, notes, security agreements, guaranties, and/or other documents, together with any and all schedules and riders thereto and any and all other agreements executed and delivered by Lessee/Purchaser in connection therewith, being hereinafter referred to as the “Financing Documents.” For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto (collectively, the "Parties") agree as follows: 1. Any and all disputes, claims and controversies arising out of the Financing Documents or the transactions contemplated thereby (including, but not limited to, actions arising in contract or tort and any claims by a Party against Lessor/Seller related in any way to the Financing) (individually, a "Dispute") that are brought before a forum in which pre-dispute waivers of the right to trial by jury are invalid under applicable law shall be subject to the terms of this Agreement in lieu of the jury trial waivers otherwise provided in the Financing Documents. 2. Any and all Disputes shall be heard by a referee and resolved by judicial reference pursuant to California Code of Civil Procedure Sections 638 et seq. 3. The referee shall be a retired California state court judge or an attorney licensed to practice law in the State of California with at least ten (10) years' experience practicing commercial law. The Parties shall not seek to appoint a referee that may be disqualified pursuant to California Code of Civil Procedure Section 641 or 641.2 without the prior written consent of all Parties. 4. If the Parties are unable to agree upon a referee within ten (10) calendar days after one Party serves a written notice of intent for judicial reference upon the other Party or Parties, then the referee will be selected by the court in accordance with California Code of Civil Procedure Section 640(b). 5. The referee shall render a written statement of decision and shall conduct the proceedings in accordance with the California Code of Civil Procedure, the Rules of Court, and California Evidence Code, except as otherwise specifically agreed by the parties and approved by the referee. The referee's statement of decision shall set forth findings of fact and conclusions of law. The decision of the referee shall be entered as a judgment in the court in accordance with the provisions of California Code of Civil Procedure Sections 644 and 645. The decision of the referee shall be appealable to the same extent and in the same manner that such decision would be appealable if rendered by a judge of the superior court. 6. Nothing in this Agreement shall be deemed to apply to or limit the right of Lessor/Seller (a) to exercise self help remedies such as (but not limited to) setoff, (b) to foreclose judicially or nonjudicially against any real or personal property collateral, or to exercise judicial or nonjudicial power of sale rights, (c) to obtain from a court provisional or ancillary remedies (including, but not limited to, injunctive relief, a writ of possession, prejudgment attachment, a protective order or the appointment of a receiver), or (d) to pursue rights against a Party in a third-party proceeding in any action brought against Lessor/Seller (including actions in bankruptcy court). Lessor/Seller may exercise the rights set forth in the foregoing clauses (a) through (d), inclusive, before, during or after the pendency of any judicial reference proceeding. Neither the exercise of self help remedies nor the institution or maintenance of an action for foreclosure or provisional or ancillary remedies or the opposition to any such provisional remedies shall constitute a waiver of the right of any Party, including, but not limited to, the claimant in any such action, to require submission to judicial reference the merits of the Dispute occasioning resort to such remedies. No provision in the Financing Documents regarding submission to jurisdiction and/or venue in any court is intended or shall be construed to be in derogation of the provisions in any Financing Document for judicial reference of any of Dispute. 7. If a Dispute includes multiple claims, some of which are found not subject to this Agreement, the Parties shall stay the proceedings of the Disputes or part or parts thereof not subject to this Agreement until all other Disputes or parts thereof are resolved in accordance with this Agreement. If there are Disputes by or against multiple parties, some of which are not subject to this Agreement, the Parties shall sever the Disputes subject to this Agreement and resolve them in accordance with this Agreement. 8. During the pendency of any Dispute which is submitted to judicial reference in accordance with this Agreement, each of the Parties to such Dispute shall bear equal shares of the fees charged and costs incurred by the referee in performing the services described in this Agreement. The compensation of the referee shall not exceed the prevailing rate for like services. The prevailing party shall be entitled to reasonable court costs and legal fees, including customary attorney fees, expert witness fees, paralegal fees, the fees of the referee and other reasonable costs and disbursements charged to the party by its counsel, in such amount as is determined by the Referee.

Page 1 of 2

115

9. In the event of any challenge to the legality or enforceability of this Agreement, the prevailing Party shall be entitled to recover the costs and expenses from the non-prevailing Party, including reasonable attorneys' fees, incurred by it in connection therewith. 10. THIS AGREEMENT CONSTITUTES A "REFERENCE AGREEMENT" BETWEEN OR AMONG THE PARTIES WITHIN THE MEANING OF AND FOR PURPOSES OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638. IN WITNESS WHEREOF, Lessor and Lessee have caused this Addendum to be executed in their names by their duly authorized representatives as of the date first above written.


Town of Los Gatos

Lessor

Lessee

X

Signature

Signature

Print Name

Title

Title

Date

X

Attest By Signature

Print Name

Title

116

Tax-Exempt Lease/Purchase Agreement

APPLICATION NO.

2438413

SERVICES AND SUPPLIES RIDER

This Services and Supplies Rider is entered into as of , 20 (the “Rider”), between MBS Business Systems (“Vendor”), Town of Los Gatos (“Lessee”) and U.S. Bank Equipment Finance, a division of U.S. Bank National Association (“Lessor”).

WHEREAS, Lessor and Lessee have entered into that certain Property Schedule No. 1, pursuant to the Tax-Exempt Lease/Purchase Agreement, dated as of , 20 (the “Lease”), for the lease/purchase of certain property identified therein (the “Property”);

WHEREAS, the Property is being acquired from Vendor for the lease/purchase to Lessee under the Lease;

WHEREAS, Lessee has the obligation to maintain the Property under the Lease;

WHEREAS, Lessee wished to engage Vendor to provide certain services and supplies, set forth in Appendix A, hereto (the “Services and Supplies”) for the compensation from Lessee to Vendor as set forth in Appendix A (the “Service and Supply Payments”);

WHEREAS, Lessee and Vendor wish for Lessor to invoice Lessee for the Service and Supply Payments with the invoicing of the Lease Payments under the Lease, as well as to receive such Service and Supply Payments and forward the same to Vendor; and

WHEREAS, Lessor is willing to invoice the Service and Supply Payments with the invoicing of the Lease Payments under the Lease, as well as to receive such Service and Supply Payments and forward the same to Vendor subject to the terms and conditions of this Rider.

NOW THEREFORE, Vendor, Lessee and Lessor agree as follows:

1. Vendor and Lessee represent and warrant that the description of the Services and Supplies and the Service and Supply Payments attached hereto in Appendix A are true and correct. Vendor and Lessee covenant that Lessor shall be provided with a written copy of any amendment of such Services and Supplies and Service and Supply Payments. Vendor and Lessee agree and understand that Lessor shall be invoicing the Service and Supply Payments solely from the written information provided by Vendor and Lessee.

2. Subject to the terms and conditions of this Rider, Lessor agrees to bill and collect on behalf of Vendor the Service and Supply Payments as set forth in Appendix A, and any sales tax due thereon, on the dates and with the invoicing of the Lease Payments. Lessor will report and remit all sales tax collected on the Service and Supply Payments to the taxing authorities in Lessor’s name and will remit to Vendor the Service and Supply Payments actually collected by Lessor on a daily basis (not including weekends or holidays). Payments to Vendor shall be made in accordance with the written instructions on file with Lessor by Vendor. Vendor remains responsible for any income tax on its monthly receipts. Lessor shall not invoice other amounts for Service and Supply Payments absent written instruction signed by Vendor and Lessee agreeing to the revised Service and Supply Payments amounts. Vendor, at Vendor’s option, may bill Lessee for overage charges in which case any reference to meter readings or overage charges in Appendix A shall not apply.

3. If the amounts received by Lessor from the Lessee are less than the total of the Lease Payments, the Service and Supply Payments and other amounts due under the Lease, Lessor shall apply and remit monies actually collected in the following order: (i) past due Lease Payments; (ii) current Lease Payments; (iii) past due Lessor fees and surcharges (excluding late fees); (iv) past due Service and Supply Payments; (v) current Lessor fees and surcharges (excluding late fees); (vi) current Service and Supply Payments; (vii) past due Lessor late fees; and, (viii) current Lessor late fees. Any sales tax due shall be applied at the time of the respective charges for which the sales tax is applicable. Lessor reserves the right to adjust how Lessor will apply and remit monies. Any adjustment to how Lessor will apply and remit collected monies shall be communicated to Vendor.

4. Lessor shall use commercially reasonable efforts to collect Service and Supply Payments on behalf of Vendor. If Lessor is unable to collect a Lease Payment or a Service and Supply Payment from Lessee, or if there has been a default by Lessee under the Lease, Lessor may request that Vendor assume billing and collection of the Service and Supply Payment due, including collecting, reporting and remitting (in Vendor’s name) any sales or other taxes due thereon.

5. Lessee agrees and understands that Lessor is not providing any of the Services or Supplies and Lessee shall look solely to Vendor to provide said Services and Supplies. Lessee agrees and understands that notwithstanding the engagement of Vendor to provide Services and Supplies with respect to the Property that is under the Lease, and as between Lessee and Lessor, Lessee shall continue to be obligated to provide for the maintenance of the Property in accordance with the terms and conditions of the Lease.

6. LESSEE AGREES AND UNDERSTANDS THAT, SUBJECT TO THE RIGHT TO NONAPPROPRIATE, THE OBLIGATIONS OF LESSEE TO PAY THE LEASE PAYMENTS DUE UNDER THE LEASE AND TO PERFORM AND OBSERVE THE OTHER COVENANTS AND AGREEMENTS CONTAINED IN THE LEASE SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT ABATEMENT, DIMINUTION, DEDUCTION, SET-OFF OR DEFENSE, FOR ANY REASON, INCLUDING WITHOUT LIMITATION, ANY DISPUTES THAT MIGHT ARISE BETWEEN THE PARTIES UNDER THIS RIDER.

7. With prior written notice, any of the parties may terminate this Rider, in which event Lessor shall provide a written accounting of the receipt and remittal of Service and Supply Payments as of the date of said termination. Any attempt by Vendor to assign or convey its rights or obligations under this Rider without Lessor’s consent shall be deemed a termination of this Rider by Vendor.

NU

NU

117

8. Vendor hereby agrees to indemnify, defend and hold harmless Lessor and its affiliates, agents, contractors, employees, officers and directors (“Lessor Indemnitees”) from and against, any and all liabilities, obligations, losses, damages, penalties, claims actions, suits, costs, expenses and disbursements (including, without limitation, reasonable attorneys’ fees and costs) of whatever kind or nature (“Claims”) imposed or assumed by, incurred by or asserted against any Lessor Indemnitees related to or arising out of this Services and Supplies Rider.

9. This Rider constitutes the entire agreement between Vendor, Lessee and Lessor with respect to the Services and Supplies and the Service and Supply Payments and this Rider may not be amended except in writing signed by all parties. This Rider shall be governed by and construed in accordance with the laws of the Lessee’s state. This Rider may be simultaneously executed in counterparts; each shall be an original with all being the same instrument.

IN WITNESS WHEREOF, Vendor, Lessor and Lessee have caused this Services and Supplies Rider to be executed in their names by their duly authorized representatives.

U.S. Bank Equipment Finance, a division of U.S. Bank National Association


Lessor Vendor

X Signature Signature

Print Name

Title Print Name

Title

Town of Los Gatos

Town of Los Gatos Lessee Attest

X

X Signature Signature

Print Name

Title Print Name

Title

118

Appendix A

Description of Services and Supplies

Maintenance by Vendor during normal business hours, inspection, adjustment, parts replacement, drums, cleaning material required for proper operation and black toner and developer.

Description of Service and Supply Payments

60

Monthly Service and Supply Payments of $

702.00

MFP: Service and Supply Payment includes

58,000

B&W Pages per month

Overage Charge: $

0.009

per B&W page billed monthly

MFP: Service and Supply Payment includes

0

Color Pages per month

Overage Charge: $

0.05

per Color page billed monthly

Prints; Service and Supply Payment includes

18,000

B&W Pages per month

Overage Charge: $

0.01

per B&W page billed monthly

Prints: Service and Supply Payment includes

0

Color Pages per month

Overage Charge: $

0.10

per Color page billed monthly

Overage Charges: Lessee shall provide periodic meter readings on the Property. If Lessee makes more than the applicable included pages in any period, Lessee agrees to pay an additional amount equal to the number of excess pages made during such period, multiplied by the applicable overage charge. Regardless of the number of pages made each period, Lessee will never pay less than the Service and Supply Payment amount.

Page 2 of 2

119

Master Tax-Exempt Lease/Purchase Agreement

AGREEMENT NO.

2438413

ADDENDUM (SOFTWARE)

THIS ADDENDUM, which is entered into as of ________ between U.S. Bank Equipment Finance (“Lessor”) and Town of Los Gatos (“Lessee”), is intended to modify and supplement the Property Schedule No. 1 (the “Property Schedule”), pursuant to Master Tax-Exempt Lease/Purchase Agreement, dated as of ___________, between Lessor and Lessee (the “Master Agreement”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Master Agreement.

With respect to the Property under the Property Schedule that is identified as software licenses and related services, the following provisions shall be applicable to such software licenses:

1. This Addendum concerns the license to be granted to Lessee by a third-party software licensor (“Licensor”) identified on the Property Schedule of certain software (the “Licensed Software”) and the provision by Licensor or others of certain services in connection with the Licensed Software, including but not limited to training, installation, maintenance, custom programming, technical consulting and support services (“Services”), all as further described in the software license agreement identified on the Property Schedule (“License Agreement”). Licensed Software fees and related Services fees (if any) in the amounts set forth on the Property Schedule (“Fees”) are owed by Lessee to Licensor pursuant to the License Agreement. Lessee and Lessor have agreed that instead of Lessee paying the Fees to Licensor, Lessor will satisfy Lessee’s obligation to pay the Fees to Licensor and, in consideration thereof, Lessee agrees to pay to Lessor certain installment payments, which are included in the Lease Payments set forth on the Property Schedule. The Licensed Software and Services are collectively referred to herein as the “Financed Items.” The Property Schedule, as amended by the Addendum, is separate from, and independent of, the License Agreement.

2. Lessee grants Lessor a security interest in Lessee’s rights (including any rights as licensee) in any Licensed Software included in any Financed Items as security for all Lessee’s obligations to Lessor of every kind or nature under the Property Schedule. References to “Property” in the Master Agreement, Property Schedule and related documents shall not be interpreted to mean that Lessor has or asserts any ownership or other interest in Financed Items, other than the security interest granted in the Master Agreement and the Addendum. All of Lessee’s obligations under the Property Schedule with respect to Property shall extend to Financed Items. Ownership of any Licensed Software financed by Lessor shall remain with the Licensor and Lessee’s rights and obligations with respect to such Licensed Software shall be governed by a separate license agreement between the licensor and Lessee, which shall not be affected by the Property Schedule and Master Agreement. Any Services shall be performed by a third-party service provider unrelated to Lessor, and not by Lessor. IN NO EVENT SHALL LESSOR HAVE ANY OBLIGATION TO PERFORM ANY SERVICES, AND ANY FAILURE OF SUCH THIRD-PARTY SERVICE-PROVIDER TO PROVIDE ANY SERVICES FINANCED HEREUNDER SHALL NOT EXCUSE LESSEE’S OBLIGATIONS UNDER THE PROPERTY SCHEDULE AND MASTER AGREEMENT.

3. Upon payment of all amounts due under the Property Schedule in accordance with Section 11.01 of the Master Agreement or upon the prepayment of the Property Schedule pursuant to Section 11.02 of the Master Agreement and Property Schedule, the security interest granted in this Addendum in the Licensed Software shall terminate and any restrictions on use of the Licensed Software under this Addendum, the Property Schedule or Master Agreement shall terminate.

4. Lessee acknowledges that Lessor did not select, develop, manufacture, distribute or license the Licensed Software. Lessee has made the selection of such Licensed Software based upon its own skill and judgment. LESSOR MAKES NO WARRANTIES EXPRESS OR IMPLIED, AS TO THE LICENSED SOFTWARE OR SERVICES COVERED BY THE LICENSE AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR AS TO ANY PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT. LESSEE HEREBY WAIVES ANY CLAIM (INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT) THAT IT MAY HAVE AGAINST LESSOR FOR ANY LOSS, DAMAGE (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, LOSS OF DATA OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES) OR EXPENSE CAUSED BY THE LICENSED SOFTWARE OR SERVICES COVERED BY THE LICENSE AGREEMENT OR A TERMINATION OF THE LICENSED SOFTWARE PURSUANT TO AN EVENT OF DEFAULT BY LESSEE AND THE EXERCISE OF REMEDIES BY LESSOR, EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE, LOSS, EXPENSE OR COST.

5. The following shall consist of an Event of Default as defined in Section 13.01 of the Master Agreement: (f) failure on the part of Lessee to promptly perform in complete accordance with its representations, warranties and covenants made in the License Agreement; (g) a default by Lessee under the provisions of the License Agreement; or (h) any termination of the License Agreement.

6. The following shall consist of additional remedies under Section 13.02 of the Master Agreement: (e) Lessor shall have the right to require Lessee to immediately cease any and all use of the Licensed Software regardless of whether Lessee is in default of its obligations under the License Agreement and Lessee shall, at Lessor’s option, either (i) deliver to Lessor certification executed by a duly authorized officer of Lessee certifying that Lessee has ceased its use of the Licensed Software and Services, or (ii) assemble the Licensed Software and make it available to Lessor at a place designated by Lessor; in the event Lessee is entitled to transfer the right to use the

120

Licensed Software to any third party, Lessee hereby agrees to transfer any such right to use the Licensed Software to any third party selected by Lessor and acknowledges that Lessee shall have no right to fees payable by any third party in connection with such transfer; (f) Lessor shall have reasonable access to property of Lessee with which the Licensed Software was used to assure compliance with item (e), above; (g) Lessor shall have the right to cause the termination of all licenses for the Licensed Software and/or support or other services provided under or in conjunction with the Licensed Software. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, LESSEE IRREVOCABLY CONSENTS TO A TERMINATION BY LICENSOR OF ANY SERVICES AND OF ANY LICENSE FOR THE LICENSED SOFTWARE AND IRREVOCABLY WAIVES ANY CLAIM IT MAY HAVE AGAINST LESSOR OR LICENSOR WITH RESPECT THERETO.

7. To induce Lessor to satisfy Lessee’s obligations, Lessee represents and warrants that (i) the Licensed Software has been delivered and accepted by Lessee and any and all Services have been fully and satisfactorily performed by Licensor; (ii) any and all conditions to the effectiveness of the Property Schedule or to Lessee’s obligations under the Property Schedule have been satisfied, and that Lessee has no defenses, set offs or counterclaims to any such obligations, and that the Property Schedule is in full force and effect; and (iii) Lessor is relying on these certifications and acknowledgments as a condition to making payment for the Licensed Software and/or Services and that, upon Lessor's remitting or becoming obligated to remit such payment, Lessor will have fully and satisfactorily performed and satisfied all its obligations under the Property Schedule with respect to said Licensed Software and/or Services.

8. To the extent the terms of this Addendum conflict with or are inconsistent with the terms of the Master Agreement or Property Schedule, the terms of this Addendum shall control as to the Financed Items only.

IN WITNESS WHEREOF, Lessor and Lessee have caused this Addendum to be executed in their names by their duly authorized representatives as of the date first above written.


Town of Los Gatos

Lessor

Lessee

X

Signature

Print Name

Title

l

X

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Technology Empowered print | copy | scan | store | network

Corporate Office: 325 Victor Street, Suite A

Salinas, CA 93907 P 831.758.1048 / 800.848.7575

F 831.758.5984

Santa Clara Branch Office: 1700 Wyatt Drive, Suite 3

Santa Clara, CA 95054 P 408.727.4627 F 408.727.4628

www.mbsworks.com

In reference to Master Tax -Exempt Lease/Purchase Agreement # 2438413, between Town of

Los Gatos (Lessee) and MBS Business Systems (Lessor):

The parties agree to the following conditions:

SERVICES AND SUPPLIES: There is no price escalation on the cost per page during the

initial (5 year) term of the lease.

By signing this Addendum, Customer acknowledges the above changes to the Agreement.

MBS Business Systems ____________________ Town of Los Gatos_____________________________ Lessor Lessee _________________________________________ X____________________________________________ Signature Signature _________________________________________ ______________________________________________ Print Name Title Print Name Title ____________________ ___________________ Date Date

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PREPARED BY: ROBERT SHULTZ Town Attorney Reviewed by: Town Manager, Town Attorney, Finance Director, and Community Development Director

110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832

www.losgatosca.gov

TOWN OF LOS GATOS

TOWN COUNCIL REPORT


ITEM NO: 8



FROM: ROBERT SCHULTZ, TOWN ATTORNEY

SUBJECT: APPROVAL OF AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) WITH SARAH CHAFFIN TO DEVELOP AFFORDABLE TEACHER HOUSING AT 20 DITTOS LANE.

RECOMMENDATION: Staff recommends that the Town Council authorize the Town Manager to sign an Exclusive Negotiating Agreement (ENA) with Sarah Chaffin for the siting and development of affordable teacher housing at 20 Dittos Lane. BACKGROUND: On September 19, 2017, the Town Council provided guidance regarding the disposition of 20 Dittos Lane. The Town Council confirmed that the property should be utilized for BMP housing in keeping with the original intent of the property acquisition. In addition, the Council opined that the preferred goals for the property would entail a maximum of four units, target low and moderate affordability income ranges, and attempt to preserve the historic and environmental nature of the site. Per the Council’s direction, interested parties were encouraged to submit proposals reflective of the aforementioned goals by October 22, 2017. On February 6, 2018, the Town Council reviewed the elements of the five proposals and discussed the unique nature of the property and the challenges associated with each proposal. At the conclusion of Council’s deliberations, it selected proposals by Habitat for Humanity and Support Teacher Housing to continue in the evaluation process. The Habitat for Humanity proposal was based on accessing the property from College Avenue and constructing a minimum of 12 units within two, two story structures. The Support Teacher Housing proposal

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OF 3 SUBJECT: APPROVAL OF AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) WITH SARAH

CHAFFIN TO DEVELOP AFFORDABLE TEACHER HOUSING AT 20 DITTOS LANE. OCTOBER 11, 2018

S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\08 ENA for Dittos\Staff Report.docx 10/11/2018 5:16 PM

BACKGROUND (Continued): envisioned two homes and two accessory dwelling units with access from the current Dittos Lane. Council directed staff to engage with both parties to understand how each would address the challenges and concerns that the Council identified during deliberations. On May 1, 2018, the Town Council reviewed supplemental information from Support Teacher Housing and Habitat for Humanity for Below Market Price (BMP) housing at 20 Dittos Lane and directed Staff to move forward with an ENA with Support Teacher Housing. DISCUSSION: The Town may legally enter into an Exclusive Negotiating Agreement with Sarah Chaffin for the sale or lease of property. In fact, the California Municipal Law Handbook states: “A city may sell property essentially in any way it chooses, if sale is for the common benefit of the City’s citizens”. Staff recommends that the Town Council authorize the Town Manager to sign the ENA (Attachment 1). The purpose of the ENA is to set the parameters between the Town and Sarah Chaffin (Developer) that will guide the negotiations of a Development Agreement (DA). The DA will set the contractual relationship between the Town and Sarah Chaffin, and define the project to be developed, the financial relationships, and the performance milestones for both parties. The Developer has informed Town staff that she is comfortable with the terms of the ENA. The ENA does not remove the Developer from the Town’s normal planning and development application requirements and process, and all financial parameters and obligations of the Town and Developer will be fully discussed with the Town Council. Upon entering into exclusive negotiations, the parties will begin to meet regularly to discuss the various issues described above, as well as new issues not yet identified. CONCLUSION: Based on the Council’s previous action, Council should authorize the Town Manager to sign an Exclusive Negotiating Agreement (ENA) with Sarah Chaffin for the siting and development of affordable teacher housing at 20 Dittos Lane. COORDINATION: This report was coordinated with the Town Manager’s Office and Director of Community Development.

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OF 3 SUBJECT: APPROVAL OF AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) WITH SARAH

CHAFFIN TO DEVELOP AFFORDABLE TEACHER HOUSING AT 20 DITTOS LANE. OCTOBER 11, 2018

S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\08 ENA for Dittos\Staff Report.docx 10/11/2018 5:16 PM

FISCAL IMPACT: No fiscal impact at this time but there will be additional staff time required. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachment: 1. Exclusive Negotiating Agreement

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ATTACHMENT 1 1 OF 6

EXCLUSIVE NEGOTIATING AGREEMENT This Exclusive Negotiating Agreement ("Agreement") is entered into as of this 23rd day of October, 2018 (the "Effective Date"), by and between the Town of Los Gatos, a Municipal Corporation, ("Town"), and Sarah Chaffin & Assignees ("Developer"). The Town and the Developer (sometimes collectively referred to as the "parties") have entered into this Agreement on the basis of the following facts:

RECITALS

A. WHEREAS, the Town and/or the Successor Agency to the Los Gatos Redevelopment Agency (“Successor Agency”) own the property located at 20 Dittos Lane, Los Gatos, CA; APN: 529-29-034 (“Dittos Property”); and

B. WHEREAS, the Dittos Property was purchased by the former Redevelopment

Agency for the Town of Los Gatos for the purpose of providing below market price residential uses; and

C. WHEREAS, the Town is interested in exploring the feasibility of a Teacher Housing Below Market Price Residential Project (“Project”) and has selected the Developer as a potential developer for the Project; and

D. WHEREAS, the Project has generated enthusiasm from a broad range of

community members, and will help implement a number of Town goals, including those set forth in the Town’s General Plan and Housing Element; and

E. WHEREAS, the Town now desires to offer Developer the opportunity to

exclusively negotiate with the Town for the purchase/lease of the Property and the development of the Project. The parties acknowledge and agree that this Agreement in itself does not obligate any party to acquire or convey or lease any property and does not grant the Developer the right to develop the Project.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties mutually agree as follows:

ARTICLE 1. EXCLUSIVE NEGOTIATIONS RIGHT

Section 1.1 Good Faith Negotiations. The Town and the Developer shall negotiate diligently and in good faith, during the Negotiating Period described in 0, the terms of purchase and sale or lease agreements and any other project agreements including but not limited to a

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Development Agreement (collectively, “Project Agreements”). During the Negotiating Period, the parties shall use good faith efforts to accomplish the respective tasks outlined in ARTICLE 2 to facilitate the negotiation of a mutually satisfactory Project Agreements. Among the issues to be addressed in the negotiations are: (i) appropriate number of affordable units and affordability levels; (ii) design and aesthetic considerations of the Project (including access); (iii) the development schedule for the Project; (iv) financing of the Project, (v) marketing and management of the Project; (vi) the physical and land title conditions of the Project; and (vii) compliance with State and Federal law.

Section 1.2 Negotiating Period. The negotiating period (the "Negotiating Period") under this Agreement shall be one year, commencing on the Effective Date. The Negotiating Period may be extended on the Town’s behalf for up to an additional 180 days by the Town Manager (“Manager”) or the Developer, if, in the Manager’s judgment, sufficient progress toward mutually acceptable Project Agreements has been made during the initial one year negotiating period to merit such extension. If the Project Agreements have not been executed by the Town and the Developer by the expiration of the Negotiating Period, then this Agreement shall terminate and no party shall have any further rights or obligations under this Agreement. If the Project Agreements are executed by the Town and the Developer then, upon such execution, this Agreement shall terminate, and all rights and obligations of the parties shall be as set forth in the executed Project Agreements. Notwithstanding the preceding paragraph, if by the end of the Negotiating Period, draft Project Agreements are mutually agreed upon by the Developer and the Town, the Manager may extend the termination date of this Agreement to the date on which the Town agrees to hold a public hearing to consider approving the Project Agreements.

Section 1.3 Exclusive Negotiations. During the Negotiating Period, the Town and the Developer shall not negotiate with any entity, other than the parties hereto, regarding development of the Project, or solicit or entertain bids or proposals to do so.

ARTICLE 2. NEGOTIATION TASKS

Section 2.1 Overview. To facilitate negotiation of the Project Agreements, the parties shall use reasonable good faith efforts to accomplish the tasks set forth in this Article 2 in a timeframe that will support negotiation and execution of mutually acceptable Project Agreements prior to the expiration of the Negotiating Period.

Section 2.2 Development Proposal. Within One Hundred and Twenty Days (120) days after the Effective Date, the Developer and Community Development Department shall

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meet and determine the documents needed to submit and timeframe to submit such documents to the Town for project approval, such as, but not limited to, a proposed site plan, concept drawings for the site plan, massing diagrams, and renderings identifying the location, general configuration, and proposed design characteristics of the buildings, parking spaces, landscaping, property subdivision, and other aspects of the Project (the "Project Proposal").

Section 2.3 Financial Proforma. Within One Hundred and Twenty Days (120) after the

Effective Date, the Developer shall submit a detailed financial proforma for the Project containing, among other matters, a detailed development cost budget, which will be used to evaluate the financial feasibility of the Project.

Section 2.4 Site and Architectural Plans. During the Negotiating Period, the Developer shall prepare appropriate refinements and modifications to the Project Proposal as required by Town Staff pursuant to 0. Such refinements and modifications shall then be subject to the Planning Commission and Town Council review and approval as set forth in Section 2.6.

Section 2.5 Community Outreach. Within One Hundred and Twenty Days (120) days following the Effective Date, the Developer shall submit to the Town a proposed community outreach plan. The Developer shall then hold community meetings to obtain and consider community input regarding the design and use of the Project.

Section 2.6 Developer Cooperation and Coordination with Adjacent Parcels. Developer acknowledges that it will need to negotiate easements for ingress and egress to the property from adjacent parcels and will plan the site to be sensitive to these neighbors.

Section 2.7 Planning Approvals. The Developer acknowledges that the Project requires approvals and entitlements from the Town Community Development Department ("Planning Approvals"). During the Negotiating Period, the Developer shall submit a formal application for the Planning Approvals.

Section 2.8 Due Diligence. During the Negotiating Period, the Developer shall determine whether the site is suitable for development of the Project, taking into account the geotechnical and soils conditions, the presence or absence of toxic or other hazardous materials, and other environmental and regulatory factors.

Section 2.9 Reports. Unless otherwise waived by the Town, the Developer shall provide the Town with copies of all reports, studies, analyses, correspondence, and similar documents, but excluding confidential information, prepared or commissioned by the Developer with respect to this Agreement and the Project, promptly upon their completion. Section 2.10 Confidential Information. While desiring to preserve its rights with respect to treatment of certain information on a confidential or proprietary basis, the Developer acknowledges that the Town will need sufficient, detailed information about the proposed Project (including, without limitation the financial information described in Error! R

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eference source not found.3) to make informed decisions about the content and approval of the Project Agreements. The Town will work with the Developer to maintain the confidentiality of proprietary information subject to the requirements imposed on the Town by the California Public Records Act. The Developer acknowledges that the Town may share information provided by the Developer of a financial and potential proprietary nature with third party consultants and members of the Town Council as part of the negotiation and decision making process. If this Agreement is terminated without the execution of Project Agreements, the Town shall return to the Developer any proprietary information submitted by the Developer under this Agreement.

Section 2.11 Environmental Review. The Developer shall work with the Town, as lead agency, to prepare or cause to be prepared the appropriate environmental documentation required by the California Environmental Quality Act ("CEQA") in connection with the Planning Approvals.

Section 2.12 Progress Reports. From time to time as deemed necessary by the Town, each party shall make oral or written progress reports advising the other party on studies being made and matters being evaluated by the reporting party with respect to this Agreement and the Project.

ARTICLE 3. GENERAL PROVISIONS

Section 3.1 Limitation on Effect of Agreement. This Agreement shall not obligate either the Town or the Developer to enter into Project Agreements. By execution of this Agreement, the Town is not committing itself to or agreeing to undertake acquisition, disposition, or exercise of control over any property. Execution of this Agreement by the Town is merely an agreement to conduct a period of exclusive negotiations in accordance with the terms hereof, reserving for subsequent Town Council action the final discretion and approval regarding the execution of any Agreement and all proceedings and decisions in connection therewith. Any Agreement resulting from negotiations pursuant to this Agreement shall become effective only if and after such Agreement has been considered and approved by the Town Council, following conduct of all legally required procedures, including without limitation, all required environmental review processes and all other applicable governmental approvals, and executed by duly authorized representatives of the Town and Developer. Until and unless Project Agreements are signed by the Developer and approved by the Town Council, no agreement drafts, actions, deliverables, or communications arising from the performance of this Agreement shall impose any legally binding obligation on any party to enter into or support entering into Project Agreements or be used as evidence of any oral or implied agreement by either party to enter into any other legally binding document.

Section 3.2 Notices. Formal notices, demands, and communications (other than day to day routine communications) between the Town and the Developer shall be sufficiently

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given if, and shall not be deemed given unless, dispatched by certified mail, postage prepaid, return receipt requested, or sent by express delivery or overnight courier service, to the office of the parties shown as follows, or such other address as the parties may designate in writing from time to time:

Town: Town of Los Gatos 110 East Main Street Los Gatos, CA 95030 Attn: Town Manager

Developer: Sarah Chaffin 193 Smith Ranch Court

Los Gatos, CA 95032 Such written notices, demands and communications shall be effective on the date

shown on the delivery receipt as the date delivered or the date on which delivery was refused.

Section 3.3 Right of Entry. The Developer shall have the right to enter the project site to conduct investigations in accordance with this Agreement.

Section 3.4 No Commissions. The Town shall not be liable for any real estate commissions or brokerage fees that may arise from this Agreement. The Town represents that it has engaged no broker, agent, or finder in connection with this transaction, and the Developer shall defend and hold the Town harmless from any claims by any broker, agent, or finder retained by the Developer.

Section 3.5 Defaults and Remedies.

(a) Default. Failure by any Party to negotiate in good faith or failure to fulfill its obligations as provided in this Agreement shall constitute an event of default hereunder. The non-defaulting Party shall give written notice of a default to the defaulting Party, specifying the nature of the default and the required action to cure the default. If a default remains uncured fifteen (15) days after receipt by the defaulting Party of such notice, the non-defaulting Party may exercise the remedies set forth in subsection (b).

(b) Remedies. In the event of an uncured default by the Town, the Developer’s sole remedy shall be to terminate this Agreement. In the event of an uncured default by the Developer, the Town’s sole remedy shall be to terminate this Agreement. Except as expressly provided above, neither Party shall have any liability to the other Party for damages or otherwise for any default, nor shall any Party have any other claims

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with respect to performance under this Agreement. Each Party specifically waives and releases any such rights or claims it may otherwise have at law or in equity.

Section 3.6 Attorneys' Fees. The prevailing party in any action to enforce this Agreement shall be entitled to recover attorneys' fees and costs from the other party.

Section 3.7 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

Section 3.8 Entire Agreement. This Agreement constitutes the entire agreement of the parties regarding the subject matters of this Agreement.

Section 3.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement.

Section 3.10 Assignment. The Developer may not transfer or assign any or all of its rights or obligations hereunder except with the prior written consent of the Town, which consent shall be granted or withheld in the Town’s sole discretion, and any such attempted transfer or assignment without the prior written consent of Town shall be void.

Section 3.11 No Third Party Beneficiaries. This Agreement is made and entered into solely for the benefit of the Town and the Developer and no other person shall have any right of action under or by reason of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed by the parties on the date first above written. DEVELOPER:

Sarah Chaffin

By: _____________________________ Town of Los Gatos By: _____________________________ APPROVED AS TO FORM: __________________________ Town Attorney

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PREPARED BY: SEAN MULLIN, AICP Associate Planner Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Community Development

Department Director, and Finance Director

110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832

www.losgatosca.gov

TOWN OF LOS GATOS



ITEM NO: 9




SUBJECT: TOWN CODE AMENDMENT APPLICATION A-17-002. PROJECT LOCATION: TOWN WIDE. APPLICANT: TOWN OF LOS GATOS. CONSIDER AMENDMENTS TO CHAPTER 6 (BUILDINGS AND BUILDING REGULATIONS) AND CHAPTER 29 (ZONING REGULATIONS) OF THE TOWN CODE REGARDING FENCES, HEDGES, AND WALLS.

RECOMMENDATION: Consider the proposed amendments and introduce the draft Ordinance by title only to amend Chapter 6 (Buildings and Building Regulations) and Chapter 29 (Zoning Regulations) of the Town Code regarding fences, hedges, and walls (Attachment 14).

BACKGROUND: On December 5, 2017, the Town Council considered a draft Ordinance (Attachment 7) for changes to the Town Code regarding fences, hedges, and walls. During public testimony, community member David Weissman suggested alternative Ordinance language addressing concerns heard from the Council and the public. The Council discussed the draft Ordinance and the alternative language. Following the discussion, the Council continued the matter to a date uncertain pending the outcome of the Strategic Priorities session, including the prioritization of this ordinance and consideration of a Wildlife Corridor Study; and to evaluate input from Council and the public to determine if a compromise is possible. On February 20, 2018, the Town Council adopted Strategic Priorities for 2018 – 2020, which included continuing work on Strategic Priorities that were already in progress, including fences in the hillside area. A Wildlife Corridor Study was not included as a Strategic Priority.

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OF 9 SUBJECT: CONSIDER AMENDMENTS TO THE TOWN CODE REGARDING FENCES, HEDGES, AND WALLS/A-17-002 OCTOBER 11, 2018

S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\09 Fence Ordinance\Staff Report.docx

BACKGROUND (continued): Since the Town Council meetings of December 5, 2017, and February 20, 2018, staff has been in an iterative process with multiple members of the public. On December 31, 2017, Dr. Weissman submitted revised Ordinance language to staff in response to the feedback received from the Council. In January and May of 2018, staff met with Dr. Weissman and Peter Donnelly, a community member who had expressed concern with the draft Ordinance presented to the Council on December 5, 2017. Additionally, staff reviewed and provided feedback on four drafts of revised Ordinance language proposed by community members through July 2018. The staff recommended draft Ordinance is included as Attachment 14. DISCUSSION: A. Public Outreach

Staff reached out to the following organizations and requested input on the current draft Ordinance:

• Santa Clara Valley Chapter of the American Institute of Architects (AIASCV)

• Santa Clara County Association of Realtors (SCCAR)

• Silicon Valley Association of Realtors (SILVAR)

In addition to reaching out to professional organizations, staff requested public input through the following media and social media resources:

• An eighth-page public notice in the newspaper;

• A poster posted at the Planning counter at Town Hall;

• On the Town’s website home page, What’s New;

• On the Town’s Facebook page;

• On the Town’s Twitter account;

• On the Town’s Instagram account; and

• On the Town’s NextDoor page.

B. Components of the Draft Ordinance

To meet the objectives identified during the January 31, 2017 Town Council Strategic Priority Setting Session (Attachments 9 and 10) and to address comments from the Council and the community, the draft Ordinance includes the following provisions:

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DISCUSSION (continued): 1. Divides the Town into two areas – Hillside and Non-Hillside Areas

The draft Ordinance continues to recognize that the use of fencing can have different impacts depending on a property’s location in the Town. As such, the draft Ordinance divides the Town into two areas: non-hillside areas, where regulations are consistent with the existing ordinance; and hillside areas, where regulations address concerns regarding wildlife movement.

2. Purpose and Intent Section

The draft Ordinance introduces a Purpose and Intent section reflecting language contained in the Hillside Development Standards and Guidelines (HDS&G).

3. Definitions Section

The draft Ordinance introduces a Definitions section that provides a clear description of terms used within the draft Ordinance.

4. Non-Hillside Areas

Within the draft Ordinance, the regulations governing fences, hedges, and walls in the non-hillside areas remain consistent with the existing Ordinance. The only proposed changes are to allow a maximum fence height of up to six feet, with one foot of lattice, for a maximum fence height of seven feet; and to provide regulations regarding vehicle gates. These changes are discussed in detail below.

a. Non-Hillside Fence Height

In addition to public input on the draft Ordinance, the Planning Commission received input from a community member, David Klinger, requesting that the maximum fence height allowed without an exception on non-hillside properties be increased from six feet to seven feet (Attachment 3, Exhibit 10, email dated August 30, 2017; Attachment 6, pages 64-65). Mr. Klinger expressed concern that the current maximum fence height of six feet does not reflect what is being built on non-hillside properties or regulations in neighboring communities. Mr. Klinger suggested that the maximum fence height without an exception be increased to six-feet with one foot of lattice on top, up to a maximum fence height of seven feet. This increase would reconcile many existing nonconforming fences and

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DISCUSSION (continued): would be reflective of the community comments that seven-foot tall fences are desirable.

The Planning Commission discussed the matter and was supportive of Mr. Klinger’s request for this revision to the Town Code (Attachment 6, pages 82-88). Based on the Planning Commission’s support, staff has included this change in the draft Ordinance [Attachment 14, Section 29.40.033(a)]. This change applies only to non-hillside properties and would not apply to hillside properties. This change eliminates the need for a fence height exception for fences exceeding a height of six feet. Additionally, Section 6.150.050 of the Town Code currently requires a Building Permit for fences exceeding six feet; however, the California Residential Code only requires a Building Permit for fences exceeding seven feet. Staff recommends elimination of Section 6.150.050 of the Town Code, defaulting permit requirements to the California Residential Code and reflecting the change to allow a maximum fence height of seven feet without a Building Permit.

b. Vehicular Gates

The draft Ordinance includes setback requirements for new vehicular gates. Currently, the HDS&G requires a setback of 25 feet for a vehicular gate and the Town Code is silent regarding setback requirements. Section 29.10.155(c)(7) requires that the length of driveways serving a garage with a sliding or overhead door be a minimum of 18 feet, with the intent of allowing ample queuing space for a vehicle while not impeding traffic on the adjacent roadway. For this reason, staff has used this standard as the required setback for a vehicular gate. Including this requirement in the draft Ordinance creates setback requirements for vehicular gates. This requirement is listed in both the hillside and non-hillside sections of the draft Ordinance.

5. Hillside Area

The draft Ordinance separates hillside properties into two zones: the unregulated fence area and the regulated fence area. Under the draft Ordinance, all fencing in the regulated fence area would require a Planning permit.

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a. Unregulated Fence Area

The draft Ordinance defines the unregulated fence area as the area of a parcel between the primary residence and the regulated fence area. The unregulated fence area plus the regulated fence area constitutes the entire parcel. For lots in the hillside area that are less than or equal to one (1) acre, the unregulated fence area extends to the property line (Attachment 15). For parcels greater than one acre, the unregulated fence area is defined as the area of a parcel excluding the regulated fence area, which is discussed in detail below. New fences or changes to existing fences in the unregulated fence area do not require a permit and are subject to the regulations for non-hillside properties; however, they are limited to a maximum height of six feet. The draft Ordinance also introduces a requirement that all new hedges located greater than 30 feet from the primary residence consist of only plant species found in Appendix A of the HDS&G.

b. Regulated Fence Area

The draft Ordinance defines the regulated fence area as the area between the property line and the unregulated fence area. The width of this area is equivalent to the minimum required front, back, and side yards for the HR zones listed in Section 29.40.270 of the Town Code. New or replacement fences within the regulated fence area would require a Planning permit and would be required to be a wildlife friendly fence (Attachment 16), as defined by the draft Ordinance in Section 29.40.034(b) (Attachment 14). The draft Ordinance includes regulations for the siting of fences relative to natural contours, trees, riparian corridors, easements, and rights-of-way. Fencing within 20 feet of a property line adjacent to a street must be wildlife friendly and open-view design fencing.

i. Prohibited materials and types of fences

For new or replacement fences in the regulated fence area, the draft Ordinance prohibits chain-link, chicken wire, welded wire, wire mesh, cyclone, buck and rail, electric fences, barbed wire, razor wire, double fences, all hedges, and any fence with bare lengths of wire stretched between posts. The draft Ordinance also prohibits walls in the regulated fence area, unless needed for privacy as determined by the Director of Community Development. Town-approved retaining walls are permitted within the regulated fence area.

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ii. Existing fences, hedges, gates, and walls

All fences, hedges, gates, and walls existing at the time the draft Ordinance becomes effective are allowed to remain. The draft Ordinance distinguishes between repair and modification; allowing repair of said fences, hedges, gates, and walls without a permit, while modification requires a permit. Repair carries the stipulation that the work does not convert a wildlife-friendly fence into a non-wildlife-friendly fence. Modification requires a permit and carries the stipulation that a wildlife-friendly fence is not converted into a non-wildlife-friendly fence and shall not impede animal movement.

iii. Exceptions

The draft Ordinance provides for the following exceptions:

• Temporary (one to three years), animal excluding, protective circular enclosing fences within the regulated fence areas to protect a newly planted tree or shrub;

• Security fencing required to protect a public utility installation; and

• Exceptions granted when the Director of Community Development finds that the strict application of these requirements will result in a significant hardship for the property owner.

iv. Permits Required

The Town does not currently require a Planning permit for fencing, walls, hedges, or gates unless elements trigger the need for Building Permits (fence/wall heights exceeding six feet, retaining walls, gates requiring electrical supply, etc.). The draft Ordinance introduces a Planning permit requirement for fencing in the regulated fence area. The primary objectives for requiring a Planning permit in the regulated fence area are to ensure that fencing adheres to the draft Ordinance and to allow for neighbor notification. A Planning permit type and fee structure specific to fencing needs will need to be created. The draft Ordinance includes a time and materials fee structure for application review, requiring a deposit per the Town’s fee schedule. An appropriate deposit for review of Planning permits will be included in the next fee schedule. Neighbor noticing requirements would be consistent with those for

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DISCUSSION (continued): Minor Residential Development permits, which requires that notice be sent to immediately adjacent neighbors.

v. Penalties

The draft Ordinance establishes that a property owner who has unlawfully constructed, replaced, or modified any fence, wall, gate, gateway, entry arbor, or hedge is subject to the following:

• File the required applications and pay the required fees;

• Pay a fine equal to double the cost of the Planning permit; and

• Remove any prohibited fence, wall, gate, gateway, entry arbor, or hedge.

CONCLUSION: Staff has coordinated with several community members, including David Weissman and Peter Donnelly, to refine the draft Ordinance for changes to the Town Code regarding fences, hedges, and walls. The draft Ordinance addresses the goals for hillside fencing of maintaining wildlife movement corridors, addressing movement-restrictive fences in the hillside, and reinforcing the importance of hillside fencing standards contained in the Hillside Development Standards and Guidelines as identified during the January 31, 2017 Town Council Strategic Priority setting session. Additionally, the draft Ordinance includes a maximum fence height increase to seven feet in the non-hillside areas and regulations for vehicular gates throughout the Town. RECOMMENDATION: Staff recommends that the Town Council:

1. Make the finding that there is no possibility that this project will have a significant impact

on the environment; therefore, the project is not subject to the California Environmental Quality Act [Section 15061(b)(3)] (Attachment 13);

2. Make the required finding that the amendments to Chapter 6 (Buildings and Building

Regulations) and Chapter 29 (Zoning Regulations) of the Town Code are consistent with the General Plan (Attachment 13);

3. Introduce the Ordinance of the Town of Los Gatos effecting the amendments of the Town Code regarding fences, hedges, and walls A-17-002 (Attachment 14), by title only, with any specific changes identified and agreed upon by the majority of the Town Council.

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ALTERNATIVES: Alternatively, the Council may: 1. Continue this item to a date certain with specific direction to staff;

2. Refer the item back to the Planning Commission with specific direction; or 3. Take no action, leaving the Town Code unchanged. ENVIRONMENTAL ASSESSMENT: There is no possibility that the project would have a significant impact on the environment; therefore, the project is not subject to the California Environmental Quality Act [Section 15061(b)(3)]. PUBLIC COMMENTS: Attachment 17 includes public comments received between 11:01 a.m., December 5, 2017 and 11:00 a.m., October 11, 2018. ATTACHMENTS:

Attachments previously received with October 17, 2017 Staff Report: None

Attachments previously received with the December 5, 2017 Staff Report: 1. July 26, 2017 Planning Commission Staff Report (with Exhibits 1-6) 2. July 26, 2017 Planning Commission Desk Item (with Exhibit 7) 3. September 13, 2017 Planning Commission Staff Report (with Exhibits 8-10) 4. September 13, 2017 Planning Commission Addendum (with Exhibits 11-12) 5. September 13, 2017 Planning Commission Desk Item (with Exhibit 13) 6. September 13, 2017 Planning Commission Verbatim Minutes 7. Draft Ordinance Amending Town Code Chapter 29 8. Letter from David Weissman to Town Council, dated January 1, 2017 9. Memorandum from Robert Schultz, Town Attorney, to Town Council, dated February 12,

2017 10. January 31, 2017 Town Council Special Meeting Priority Setting Study Session Minutes 11. Public comments received between 11:01 a.m., September 13, 2017 and 11:00 a.m.,

November 30, 2017

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Attachments previously received with the December 5, 2017 Desk Item: 12. Public Comments received between 11:01 a.m. Thursday, November 30, 2017 to 11:00 a.m.

Tuesday, December 5, 2017

Attachments received with this Staff Report: 13. Required Findings 14. Draft Ordinance Amending Town Code Chapter 6 and Chapter 29 15. Regulated Fence Area Exhibit 16. Wildlife-Friendly Fence Exhibit 17. Public comments received between 11:01 a.m., December 5, 2017 and 11:00 a.m., October

11, 2018

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TOWN COUNCIL – October 16, 2018 REQUIRED FINDINGS: TOWN CODE AMENDMENT APPLICATION A-17-002 Consider amendments to Chapter 6 (Buildings and Building Regulations) and Chapter 29 (Zoning Regulations) of the Town Code regarding fences, hedges, and walls.

FINDINGS

Required Findings for CEQA:

▪ It has been determined that there is no possibility that this project will have a significant impact on the environment; therefore, the project is not subject to the California Environmental Quality Act, Section 15061 (b)(3): Review for exemption.

Required Findings for General Plan:

▪ The Town Code amendments are consistent with the General Plan.

S:\COUNCIL REPORTS\2018\10-16-18\Fence Ordinance\Attachment 13 - Required Findings.docx ATTACHMENT 13

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Draft Amendments to Chapters 6 and 29 of Town Code – Hillside Fences

Page 1 of 6 Draft 10/05/18

Sec. 6.150.050. - Work exempt from permit.

CRC Section R105.2 Work exempt from permit.

Building: Item 2. is amended to read:

2. Fences not over 7 feet high.

(Ord. No. 2257 , § I, 11-15-16)

Sec. 29.40.030. Fences, walls, gates, gateways, entry arbors, and hedges.

Sec. 29.40.031. Purpose and intent.

The purpose of this Ordinance is to codify regulations for fences in all residential zones. This Ordinance is divided into two parts: non-hillside and hillside areas. The use of fences, walls, gates, gateways, entry arbors, and hedges in the hillside areas shall be minimized and located so that natural landforms appear to flow together and are not disconnected. The primary emphasis shall be on maintaining open views; protecting wildlife corridors and habitat connectivity; and maintaining the rural, open, and natural character of the hillsides. Additional details are available in the Hillside Development Standards and Guidelines.

Sec. 29.40.032. Definitions.

The following words, terms, and phrases, when used in this division, shall have the meanings ascribed to them in this section.

Fence means a man-made structure serving as a barrier or screen.

Fence height shall be measured from finished grade and shall be measured from either side of the property line which affords affected property owners the most buffering from noise, light, glare, or privacy impacts.

Hedge means a boundary formed by closely growing bushes or shrubs.

Hillside lot means a parcel of land subject to the Hillside Development Standards and Guidelines as shown on the Hillside Area Map in the Hillside Development Standards and Guidelines regardless of zoning district.

Movement corridor means a movement pathway that is typically independent of season and used by animals on a near daily basis for the acquisition of food, shelter, water, or mates.

Open-view design means a fence or other structure that permits views through it.

Planting Zone 1 means that area within a 30-foot radius of the primary dwelling unit on a hillside lot.

Regulated fence area (which only applies to parcels greater than one (1) acre) means that area between the property line and the unregulated fence area. The width of this area is equivalent to the minimum required yards for the HR zones listed in Sec. 29.40.270.

Retaining wall means a man-made structure designed to retain soil.

Riparian corridor means an area comprised of habitat strongly influenced and delineated by the presence of perennial or intermittent streams.

ATTACHMENT 14

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Stream means a body of water that flows at least periodically or intermittently through a bed or channel having banks. The body of water may include watercourses having a surface or subsurface flow that supports or has supported riparian vegetation, fish, or aquatic life.

Top of bank means a stream boundary where a majority of normal discharges and channel forming activities take place. The top of bank will contain the active channel, active floodplain, and their associated banks. Where there are no distinguishable features to locate the top of bank, the local permitting agency will make a determination and document as appropriate. In the absence of this determination, the 100-year water surface will be used.

Traffic view area means that area, on corner lots, which is within fifteen (15) feet of a public street and within two hundred (200) feet of the right-of-way line of an intersection, or a distance of thirty (30) feet measured horizontally in any direction from the point of intersection of the property lines at street corners.

Unregulated fence area is that area of a parcel between the primary residence and the regulated fence area. The unregulated fence area plus the regulated fence area constitutes the entire parcel. For lots in the hillside area that are less than or equal to one (1) acre, the unregulated fence area extends to the property line.

Wall means a man-made structure that defines an area, carries a load, or provides shelter or security.

Wildlife-friendly fence means a fence or other structure that permits any animal, regardless of size, to easily climb under, pass through, or jump over. A wildlife-friendly fence shall not exceed forty-two (42) inches in height above natural grade. A split-rail fence shall be constructed of wood and be at least fifty (50) percent open in design. The minimum height above grade for the bottom rail shall be sixteen (16) inches and shall have spacing between rails of at least twelve (12) inches wherever feasible.

Sec. 29.40.033. Non-hillside residential lots: Fences, walls, gates, gateways, entry arbors, and hedges.

(a) Height. In residential zones outside of the hillside area, a permit is not required for the repair, replacement, or construction of gateways, entry arbors, or hedges that are no more than six (6) feet high; or fences, walls, or gates that are no more than six (6) feet high, with one (1) foot of lattice on top (seven (7) feet high in total), and within all property lines.

(b) Exceptions to height. The following height exceptions shall apply:

(1) Corner lot. In a traffic view area, no corner lot or premises in the Town shall have any fence, wall, gate, gateway, entry arbor, or hedge higher than three (3) feet above the curb unless permission is secured from the Town Engineer.

(2) Properties not on a street corner. At the discretion of the Director of Community Development, side yard and rear yard fences, walls, gates, gateways, entry arbors, or hedges, behind the front yard setback, may be a maximum of eight (8) feet high provided the property owner can provide written justification to the Planning Department that demonstrates either of the following conditions exist:

a. A special privacy concern exists that cannot be practically addressed by additional landscaping or tree screening.

b. A special wildlife/animal problem affects the property that cannot be practically addressed through alternatives. Documented instances of wildlife grazing on gardens or ornamental landscaping may be an example of such a problem.

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(3) Historic Districts and/or Landmark and Historic Preservation Overlay. The maximum height of fences in the front yard shall be three (3) feet and shall be of open-view design except as provided in subsection 29.40.033(b)(4).

(4) Gateways or entryway arbors. May be up to eight (8) feet high, including within Historic Districts or for properties with a Landmark and Historic Preservation Overlay, and shall be of open-view design. A gateway or entryway arbor shall have a maximum width of six (6) feet and a maximum depth of four (4) feet. No more than one (1) gateway or entryway arbor per street frontage is allowed.

(5) Adjacent to commercial property. Boundary line fences or walls adjacent to commercial property may be eight (8) feet high if requested or agreed upon by a majority of the adjacent residential property owners.

(c) Materials. The type of fencing materials within the non-hillside zone are generally unrestricted, and fences can be a combination of materials, with the following exceptions:

(1) Plastic fencing is discouraged everywhere and is prohibited in Historic Districts.

(2) Barbed wire or razor ribbon wire is prohibited in all zones.

(d) Vehicular gates. Vehicular gates shall be setback a minimum of eighteen (18) feet as measured along the driveway’s path of travel from the edge of the adjacent roadway to the gate(s) in the open position.

Sec. 29.40.034. Hillside residential lots: Fences, walls, gates, gateways, entry arbors, and hedges.

This section applies to any new fence, wall, gate, gateway, entry arbor, or hedge, and the replacement,

modification, or repair of any existing fence, wall, gate, gateway, entry arbor, or hedge, whether the

primary dwelling unit is new or existing. Guiding principles come from the Hillside Development

Standards and Guidelines, which state that the primary emphasis for hillside fences shall be on

maintaining open views; protecting wildlife corridors while allowing wildlife to pass through; and

maintaining the rural, open, and natural character of the hillsides. Deer fencing shall be limited to areas

around ornamental landscaping with larger areas not to be enclosed. For the purposes of this section,

hillside lots are divided into two areas – the unregulated fence area, in which minimal fence restrictions

are enforced; and the regulated fence area, which is regulated to be more wildlife-friendly.

(a) Unregulated Fence Area. Fences, or changes to existing fences within the unregulated fence area of hillside lots, do not require a permit and are subject to Section 29.40.033, non-hillside residential lots above, and the following standards:

(1) Height. Fence height is limited to six (6) feet high in total.

(2) Exceptions to height. The following height exceptions shall apply:

a. At the discretion of the Director of Community Development, deer fencing may be a maximum of eight (8) feet high provided the property owner can provide written justification to the Planning Department that demonstrates that the following conditions exist:

i. The fencing would be limited to areas around ornamental landscaping; and

ii. A special wildlife/animal problem affects the property that cannot be practically addressed through alternatives. Documented instances of wildlife

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grazing on gardens or ornamental landscaping may be an example of such a problem.

(3) Materials. Barbed wire or razor ribbon wire is prohibited in all zones.

(4) Siting. No fence, hedge, wall, or gate shall be constructed within a riparian corridor or within thirty (30) feet of its top of bank.

(5) Hedges. All new hedges within the unregulated fence area and greater than thirty (30) feet from the primary residence, are outside planting zone 1 and shall consist of only plant species listed in Appendix A of the Hillside Development Standards and Guidelines.

(b) Regulated Fence Area. New or replacement fences within the regulated fence area on hillside lots require a permit, which shall be posted on site during construction. Fences in the regulated fence area are subject to the following standards:

(1) Height. Fences shall be wildlife friendly and shall not exceed forty-two (42) inches in height above natural grade. A split-rail fence shall be constructed of wood and be at least 50 percent open in design. The minimum height above grade for the bottom rail shall be sixteen (16) inches and shall have spacing between rails of at least twelve (12) inches wherever feasible.

(2) Materials.

a. The following fence types and materials are not of wildlife-friendly design and are therefore prohibited for new or replacement fences in the regulated fence area:

i. Chain-link, chicken wire, welded wire, wire mesh, cyclone, or similar fence material.

ii. Buck and rail fences.

iii. Any fence with bare lengths of wire stretched between posts.

iv. Electric fences, including any fence designed to produce an electric shock.

v. Barbed or razor wire fences, including any fence with attached barbs, sharp points, razors.

vi. Double fences.

vii. All hedges.

(3) Siting.

a. Fences shall be located to follow natural contours, whenever possible.

b. Fences and walls shall be located to avoid impacts to trees.

c. No fence, hedge, wall, or gate shall be constructed within a riparian corridor or within thirty (30) feet of its top of bank.

d. No fence, hedge, wall, or gate shall be constructed in the public or private right-of-way or within any trail easement or other easement precluding their construction unless allowed, in writing, by the Town Engineer.

e. Fencing located within twenty (20) feet of a property line adjacent to a street shall be open-view design fencing.

(4) Walls.

a. Walls are prohibited unless needed for privacy as determined by the Director of Community Development.

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b. Town approved retaining walls are permitted.

(5) Gateways or entryway arbors. May be up to eight (8) feet high and shall be of open-view design. A gateway or entryway arbor shall have a maximum width of six (6) feet and a maximum depth of four (4) feet. No more than one gateway or entry arbor per street frontage is allowed.

(6) Exemptions. All fences, hedges, gates, and walls existing when this Ordinance became effective, are exempt from these conditions, except as described in (7) and (8) below.

(7) Repair. Repair of existing fences, walls, hedges or gates in the regulated fence area:

a. Does not require a permit.

b. Shall not convert a wildlife-friendly fence into a non-wildlife-friendly fence.

(8) Modifications. Modification of existing fences in the regulated fence area:

a. Requires a permit which shall be posted on site during construction.

b. Are encouraged if such changes improve wildlife movement or animal corridors.

c. Shall not impede animal movements and shall not convert a wildlife-friendly fence into a non-wildlife-friendly fence; for example, wire mesh shall not be added to an existing, animal-friendly, split-rail fence.

d. Replacement, repair, or modification of any fence, wall, hedge or gate shall be prohibited if the Town Engineer determines that a public safety hazard exists.

(9) Exceptions:

a. A temporary (one to three years), animal excluding, protective circular enclosing fence may be erected in regulated fence areas to protect a newly planted tree or shrub, until established, when that plant species is listed in Appendix A of the Hillside Development Standards and Guidelines

b. Security fencing required to protect a public utility installation.

c. Written exceptions may be granted when the Director of Community Development finds that the strict application of these requirements will result in a significant hardship for the property owner.

(10) Cost. The cost of the application review will be borne by the applicant through a deposit pursuant to the adopted fee schedule.

(11) Notices. Noticing shall comply with the public noticing procedures of Section 29.20.480 of the Town Code.

(12) Penalties. A property owner who has unlawfully constructed, replaced, or modified any fence, wall, gate, gateway, entry arbor, or hedge without required approval, shall:

a. File the required Planning and Building Department applications and pay the required fees as established by resolution for new applications and for work unlawfully completed.

b. Be subject to a fine equal to double the cost of the permit, as determined by the Director of Community Development.

c. Remove any prohibited fence, wall, gate, gateway, entry arbor, or hedge.

(c) Vehicular gates. Vehicular gates shall be setback a minimum of eighteen (18) feet as measured along the driveway’s path of travel from the edge of the adjacent roadway to the gate(s) in the open position.

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(Ord. No.1316, § 4.10.020, 6-7-76; Ord. No. 1493, 3-17-81; Ord. No. 1873, § I, 10-7-91; Ord. No. 2049, § I, 10-5-98; Ord. No. 2062, § I, 6-21-99; Ord. No. XXXX, § )

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Sid

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Rear

30 ft

25 ft

20 ft 20 ft

Regulated Fence Area

Unregulated Fence

Unregulated and Regulated Fence Areas

Unregulated fence area is that area of a parcel between the primary residence and the regulated fence area. The unregulated fence area plus the regulated fence area constitutes the entire parcel. For lots in the hillside area that are less than or equal to one (1) acre, the unregulated fence area extends to the property line.

Regulated fence area (which only applies to parcels greater than one (1) acre) means that area between the property line and the unregulated fence area. The width of this area is equivalent to the minimum required yards for the HR zones listed in Sec. 29.40.270.

Lot size: up to 1 acre

Pro

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Lot size: more than 1 acre

Front

Sid

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Pro

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ATTACHMENT 15

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This Page Intentionally

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Natural Grade

Maximum Height = 42 inches

Wood posts and rails

Wildlife-friendly fence means a fence or other structure that permits any animal, regardless of size, to easily climb under, pass through, or jump over. A wildlife-friendly fence shall not exceed 42 inches in height above natural grade. A split-rail fence shall be constructed of wood and be at least 50% open in design. The minimum height above grade shall be 16 inches and shall have 12-inch spacing between rails wherever feasible.

Minimum gap between

rails = 12 inches

Minimum height above

grade = 16 inches

Wildlife-friendly split-rail fence

ATTACHMENT 16

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ATTACHMENT 17

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