HomeMy WebLinkAboutItem 12d - Water Quality Authority Prop 68 Subrecipient GrantWQA Prop 68 Subrecipient Grant Agreement
October 19, 2021
Page 1 of 4
DATE: October 19, 2021
TO: Honorable Mayor and City Council
FROM: Paul Cranmer, Public Works Services Director
By: Mandy Jiang, Management Analyst
SUBJECT: PROPOSITION 68 SUBRECIPIENT GRANT AGREEMENT BETWEEN
SAN GABRIEL BASIN WATER QUALITY AUTHORITY AND THE CITY OF
ARCADIA IN THE AMOUNT OF $2,318,000
Recommendation: Approve
SUMMARY
The City of Arcadia was awarded a grant agreement from the Water Quality Authority
(“WQA”) to receive Proposition 68 grant funding to reimburse costs for the City’s existing
Live Oak and Longden water treatment facilities. The agreement allocates grant funding
on a reimbursement basis dating back to 2018 and ending in 2023 for ongoing operations
and maintenance costs, not including construction and initial set up costs. The City was
approved for up to $1,649,000 for Live Oak and $669,000 for Longden, for a total of up
to $2,318,000 in reimbursements.
Examples of costs eligible for reimbursement include water sampling, filter and carbon
replacement at the Live Oak facility, annual permit renewal costs, and energy bills. The
City has currently incurred approximately $360,000 in reimbursable expenses between
July 1, 2018, and September 30, 2021, of which over 90% is comprised of energy bills. It
is projected that by the grant deadline of March 31, 2023, the City will have incurred an
additional $374,000 in sampling, cartridge, and carbon replacement costs. Not included
in this projection are monthly energy bills for the two treatment facilities, which will vary
but is expected to account for a significant portion of reimbursable costs. A conservative
estimate of total reimbursable cost is $1 million by the grant deadline; any significant
changes would be attributable to variable monthly energy bills.
It is recommended that the City Council approve the Proposition 68 subrecipient
agreement with the San Gabriel Basin Water Quality Authority.
WQA Prop 68 Subrecipient Grant Agreement
October 19, 2021
Page 2 of 4
BACKGROUND
Proposition 68 (“Prop 68”) was passed by California voters in 2018, authorizing $4 billion
in general obligation bonds for state and local parks, environmental protection and
restoration projects, water infrastructure projects, and flood protection projects. The State
Water Resources Control Board (“SWRCB”) is responsible for administering $74 million
in grants for treatment and remediation activities that prevent or reduce the contamination
of groundwater served as a source of drinking water. This is known as Prop 68
Groundwater Treatment and Remediation Grant Program, which is separate from other
Prop 68 grants such as the Per Capita Grant Program administered by the State
Department of Parks and Recreation.
The San Gabriel Basin Water Quality Authority (“WQA”) was established by the State
Legislature in 1993 to develop, finance, and implement groundwater treatment programs
in the San Gabriel Basin. The City has been a member of the WQA for many years and
was solicited by their consultant in December 2019 to submit treatment projects for their
Prop 68 application. In 2020, the WQA applied for Prop 68 Groundwater Operations and
Maintenance grant funding for a regional groundwater remediation program, comprised
of water treatment projects proposed by its member agencies. The SWRCB awarded
$31.6 million in Prop 68 grant funding and the two agencies executed a Master Agreement
in August 2021. Soon after, the City received the proposed Subrecipient Agreement from
WQA, allocating grant funding specifically for operations and maintenance costs at the
Live Oak and Longden Treatment facilities on a reimbursement basis.
The City has two water treatment facilities that were installed due to two well sites
exceeding the regulated contaminant levels. The Longden Well treatment facility was
installed in 1984 and utilizes a Packed Column Air Stripper that removes gaseous Volatile
Organic Compounds (“VOCs”), found in industrial degreasing and dry-cleaning products.
Live Oak Well was taken out of service in 2018 due to increasing levels of a VOC and on
April 2, 2019, the City Council approved the construction of a Granulated Activated
Carbon treatment system to remove the contaminant. The Live Oak treatment facility was
completed in 2020 and became operational in 2021 after a lengthy state permitting
process.
DISCUSSION
The terms of this agreement allow the City, a subrecipient of WQA’s Prop 68 grant award,
to submit reimbursement requests only for operations and maintenance costs related to
the two treatment facilities incurred between July 1, 2018, and March 31, 2023. The City
may request reimbursement for grant funding up to $1,649,000 for Live Oak and $669,000
for Longden, not including construction costs and initial set up, such as for the purchase
and installation of the first set of carbon media and filters. The grant funding budgets are
outlined by line item in the table below:
WQA Prop 68 Subrecipient Grant Agreement
October 19, 2021
Page 3 of 4
LINE ITEM Live Oak
Treatment
Longden
Treatment
Planning/Design/Engineering/Environmental $0 $7,000
Implementation $1,579,000 $651,000
Monitoring/Performance $70,000 $11,000
TOTAL $1,649,000 $669,000
Examples of costs eligible for reimbursement under Implementation include carbon
changeout and bimonthly filter replacement at the Live Oak treatment facility, permit
renewal costs for both facilities, utility bills, and staff time operating the facilities. The City
expects to recoup the highest costs from the Implementation category.
Monitoring/Performance include water sampling and direct staff time related to sample
collection and completing state mandated reports. The WQA has expressed some
flexibility in defining cost types -- for example, permit renewals may fall under either
Environmental or Implementation.
The City incurred approximately $360,000 in reimbursable monthly utility bills, sampling,
permit renewals, and filter replacement costs from July 1, 2018, to September 30, 2021.
It is projected that by the grant deadline of March 31, 2023, the City will have incurred an
additional $374,000 in sampling, cartridge, and carbon changeout costs under
Implementation. Not included in this projection are monthly energy bills for the two
treatment facilities. Historically, Longden’s monthly bills have averaged around $4,000,
increasing up to $10,000 attributable to increasing water production to supplement supply
when Live Oak Well was inactive, a rate increase from Clean Power Alliance, seasonal
water use patterns, and other factors. While monthly energy bills may vary, it is
reasonable to expect this would amount for a significant sum of reimbursable costs by
2023. A preliminary estimate of total reimbursable costs amount to approximately $1
million with any significant changes attributable to monthly energy bills.
Per the terms of the grant, the City will also need to display signage 4 feet tall by 8 feet
wide at both treatment facilities with the following statement and logos:
“Funding for this project has been provided in full or in part by Proposition 68 – the
California, Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For
All Act of 2018 through an agreement with the State Water Resources Control Board.”
WQA Prop 68 Subrecipient Grant Agreement
October 19, 2021
Page 4 of 4
ENVIRONMENTAL IMPACT
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the
environment. Thus, this matter is exempt under CEQA.
FISCAL IMPACT
Upon approval of this agreement, all costs eligible for reimbursement from July 1, 2018,
through March 31, 2023 will be periodically submitted to the WQA for reimbursement.
Grant funding received through reimbursement will be deposited into the City’s Water
Fund. While initial estimates indicate that approximately $1 million will be expended, the
grant award authorizes up to $2.318 million; City staff will endeavor to fully recover
anything possible under this award to offset local expenses at these treatment facilities.
RECOMMENDATION
It is recommended that the City Council determine that this action does not constitute a
project and is, therefore, exempt under the California Environmental Quality Act
(“CEQA”); and approve the Proposition 68 Subrecipient Grant Agreement between San
Gabriel Basin Water Quality Authority and the City of Arcadia in the amount of $2,318,000.
Attachment: WQA Prop 68 Subrecipient Agreement
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San Gabriel Basin Water Quality Authority
PROPOSITION 68 SUBRECIPIENT GRANT AGREEMENT
(Subaward Recipient: Arcadia)
THIS PROPOSITION 68 SUBRECIPIENT GRANT AGREEMENT (the “Agreement”) is dated this 17 day of
August 2021, between the San Gabriel Basin Water Quality Authority, an agency of the State of California
(“WQA”), on one hand, and the City of Arcadia, on the other hand (“Subrecipient”). (WQA and Subrecipient are
sometimes referred to herein individually as a “Party” and collectively as the “Parties.”)
RECITALS
WHEREAS, the California State Water Resources Control Board (“State Water Board”) is authorized, and
implements its authority, to provide financial assistance pursuant to Section 80141 of the Public Resources Code,
and Resolution No. 2019-0041; and
WHEREAS, the State Water Board Division of Financial Assistance has awarded the WQA approximately
$31,593,750. in Proposition 68 Grant Funds for its San Gabriel Basin Regional Groundwater Remediation
Program application (“Application”) so that the WQA may undertake work required for groundwater clean-up and
monitoring operations within the WQA’s jurisdiction; and
WHEREAS, Subrecipient provided cost estimates of their eligible project operations and activities for inclusion
into the Application; and
WHEREAS, WQA negotiated with the State Water Board to allow for the required 50% matching fund obligation
to be satisfied with non-Subrecipient project funding; and
WHEREAS, under the terms of the State Water Board Division of Financial Assistance Proposition 68 Grant
program, the WQA has executed a grant funding agreement with the State Water Board entitled “Operations and
Maintenance Grant,” Agreement No. D2012538. dated August 6, 2021 (the “Master Agreement”); and
WHEREAS, the WQA desires to pass through the proceeds of the Proposition 68 grant to provide financial
assistance based on the Subrecipient’s eligible estimated costs contained in the Application.
AGREEMENT
A. TERM. This Agreement shall commence upon the date it is executed by all of the Parties (“Effective
Date”) and shall expire upon the expiration date of the Master Agreement.
B. ELLIGIBLE WORK START DATE. No costs incurred prior to the Eligible Work Start Date are eligible
for reimbursement. For purposes of this Agreement the term “Eligible Work Start Date” means July 1,
2018.
C. WORK COMPLETION DATE. No costs incurred after the Work Completion Date are eligible for
reimbursement. For the purposes of this Agreement the term “Work Completion Date” means February
28, 2023.
D. SCOPE OF WORK. The funds disbursed under this Agreement (“Project Funds”) may be used only for
those eligible operation and maintenance costs and expenses for the projects attached hereto as Exhibit
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“A”. Neither the WQA nor the State Water Board shall be under any obligation to disburse funds for
purposes other than those set forth in Exhibit A.
E. SIGNAGE. The subrecipient shall place a sign at least four (4) feet tall by eight (8) feet wide
make of ¾ inch-thick exterior grade plywood or other approved material in a prominent location
on the project site and shall maintain the sign in good condition for the duration of project
implementation. The sign must include the following disclosure state and color logos of the
State Water Board, Proposition 68 and WQA provided by WQA.
1. “Funding for this project has been provided in full or in part by Proposition 68 – the
California, Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For
All Act of 2018 through an agreement with the State Water Resources Control Board.”
2.
F. FUNDING AMOUNTS AND DISBURSEMENTS. If the Master Agreement’s funding for any Fiscal
Year expires due to reversion or is reduced, substantially delayed, or deleted by the Budget Act, by
Executive Order, or by order or action of the Department of Finance, the WQA has the option, in its sole
and absolute discretion, to either cancel this Agreement with no liability accruing to the WQA, or offer an
amendment to the Subrecipient to reflect the reduced amount.
G. BUDGETED COSTS. Budgeted costs are contained in Table 1 below:
LINE ITEM Live Oak Treatment Longden Treatment
Direct Project Administration
Costs
$0 $0
Planning/Design/Engineering/
Environmental
$0 $7,000
Implementation $1,579,000 $651,000
Monitoring/Performance $70,000 $11,000
Education/Outreach $0 $0
TOTAL $1,649,000 $669,000
1. The budgeted costs contained in Table 1 were based on project cost estimates provided to WQA
by the Subrecipient in December 2019 and were subsequently submitted by WQA as part of the
Application in January 2020. Since the State Water Board awarded the funding based on these
project cost estimates, the budgeted costs contained in Table 1 represent the maximum amount of
Project Funds available in each cost subcategory under this Agreement.
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2. In the event the Subrecipient does not submit requests for Project Funds (“Reimbursement
Requests”) for all funds encumbered under this Agreement by March 31, 2023, the Final
Reimbursement Request Date, any remaining funds revert to the State Water Board as provided
under the Master Agreement. The WQA may notify the Subrecipient that the project file is
closed, and any remaining balance will be disencumbered and unavailable for further use under
the Agreement.
H. CONTINGENT DISBURSEMENT.
1. The WQA’s disbursement of funds hereunder is contingent on the Subrecipient’s compliance with
the terms and conditions of this Agreement.
2. Reimbursement Requests may not include the Subrecipient’s Indirect Costs. For purposes of this
Agreement, the term “Indirect Costs” means those costs that are incurred for a common or joint
purpose benefiting more than one cost objective and are not readily assignable to the Project (i.e.,
costs that are not directly related to the Project).
3. Any Reimbursement Request submitted that includes Indirect Costs or other ineligible costs may
cause that Reimbursement Request, in its entirety, to be disputed and will not be paid until the
dispute is resolved.
4. The WQA’s obligation to disburse Project Funds is contingent upon the availability of sufficient
funds to permit the disbursements provided for herein. If sufficient funds are not available for any
reason including, but not limited to, failure of the federal or State government to appropriate funds
necessary for disbursement of Project Funds, the WQA shall not be obligated to make any
disbursements to the Recipient under this Agreement. This provision shall be construed as a
condition precedent to the obligation of the WQA to make any disbursements under this Agreement.
Nothing in this Agreement shall be construed to provide the Subrecipient with a right of priority for
disbursement over any other entity. If any disbursements due the Subrecipient under this Agreement
are deferred because sufficient funds are unavailable, it is the intention of the WQA that such
disbursement will be made to the Subrecipient when sufficient funds do become available, but this
intention is not binding.
5. Failure to proceed according to the timelines set forth in this Agreement may require the
Subrecipient to repay to the WQA all disbursed Project Funds.
I. REIMBURSEMENT PROCEDURE. Except as may be otherwise provided in this Agreement,
reimbursement of Project Funds will be made as follows:
1. Upon execution and delivery of this Agreement, the Subrecipient may submit a Reimbursement
Request for eligible Project Costs as specified in this Agreement to the WQA using the
Reimbursement Request forms provided by the WQA.
Reimbursement Requests must be itemized based on the line items specified in Table 1 of Section F
this Agreement. Reimbursement Requests must be complete, signed by the Subrecipient’s
authorized representative or his/her designee, and addressed to the WQA. Reimbursement Requests
submitted in any other format than the one provided herein will cause a Reimbursement Request to
be disputed. In the event of such a dispute, the WQA will notify the Subrecipient. Payment will not
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be made until the dispute is resolved. As a condition to any such dispute resolution WQA reserves
the right to request a corrected Reimbursement Request.
2. Project Funds must be requested quarterly via Reimbursement Request for eligible costs incurred
during the reporting period of the corresponding Progress Report, describing the activities and
expenditures for which the reimbursement is being requested.
3. The Subrecipient agrees that it will not submit any Reimbursement Requests that include any Project
Costs until such cost has been incurred and is currently due and payable by the Subrecipient,
although the actual payment of such cost by the Subrecipient is not required as a condition of
Reimbursement Request. Supporting documentation (e.g., receipts, laboratory invoices) must be
submitted with each Reimbursement Request. The amount requested for administration costs must
include a calculation formula (i.e., hours or days worked times the hourly or daily rate = total
amount claimed). Reimbursement of Project Funds will be made only after receipt of a complete,
adequately supported, properly documented and accurately addressed Reimbursement Request.
4. The Subrecipient will not seek reimbursement of any Project Costs that have been reimbursed from
other funding sources.
5. The Subrecipient shall use Project Funds within thirty (30) days of receipt to reimburse contractors,
vendors, and other Project Costs. Any interest earned on Project Funds shall be reported to the
WQA and will either be required to be returned to the WQA or deducted from future
reimbursements. In the event that the Subrecipient fails to disburse Project Funds to contractors or
vendors within thirty (30) days from receipt of the Project Funds, the Subrecipient shall immediately
return such Project Funds to the WQA. Interest shall accrue on such Project Funds from the date of
reimbursement through the date of mailing of Project Funds to the WQA. If the Subrecipient held
such Project Funds in interest-bearing accounts, any interest earned on the Project Funds shall also
be due to the WQA.
6. The Subrecipient must submit its final Reimbursement Request no later than the Final
Reimbursement Request Date in Section G.2., unless prior approval is granted by the WQA. If the
Subrecipient fails to do so, then the undisbursed balance of this Agreement may be de-obligated.
7. The Subrecipient agrees that it will not request a reimbursement unless that cost is allowable,
reasonable, and allocable.
8. Notwithstanding any other provision of this Agreement, no reimbursement shall be required at any
time or in any manner that is in violation of or in conflict with federal or State laws, policies, or
regulations.
9. The Subrecipient agrees that it shall not be entitled to interest earned on undisbursed Project Funds.
10. No work or travel outside the State of California is permitted under this Agreement unless the WQA
provides prior written authorization. Failure to comply with this restriction may result in termination
of this Agreement. Any reimbursement for necessary travel and per diem shall be at rates not to
exceed those set by the California Department of Human Resources at
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http://www.calhr.ca.gov/employees/Pages/travel-reimbursements.aspx. as of the date costs are
incurred by the Subrecipient.
11. The Subrecipient must include any other documents or requests required or allowed under this
Agreement.
J. WITHOLDING DISBURSEMENTS. Notwithstanding any other provision of this Agreement, the WQA
may withhold all or any portion of the Project Funding Amount upon the occurrence of any of the
following events:
1. The Subrecipient’s failure to maintain reasonable progress on the Project as determined by the
WQA;
2. Commencement of litigation or a judicial or administrative proceeding related to the Project, that
the WQA or State Water Board determines may impair the timely satisfaction of the
Subrecipient’s obligations under this Agreement;
3. Any investigation by State, local, or federal investigators or auditors, or a grand jury, relating to
the Subrecipient’s financial management, accounting procedures, or internal fiscal controls;
4. A material adverse change in the condition of the Subrecipient, or the Project, that the WQA
determines would materially impair the Subrecipient’s ability to satisfy its obligations under this
Agreement, or any other event that the WQA determines would materially impair the
Subrecipient’s ability to satisfy its obligations under this Agreement;
5. The Subrecipient’s material violation of, or threat to materially violate, any term of this
Agreement;
6. Reasonable suspicion of fraud, forgery, embezzlement, theft, or any other misuse of public funds
by the Subrecipient or its employees, or by its contractors or agents regarding the Project;
7. An event requiring notice under this Agreement; or
8. An Event of Default or an event that the WQA determines may become an Event of Default.
K. FRAUD AND MISUSE OF PUBLIC FUNDS. All Reimbursement Requests submitted must be accurate
and signed by the Subrecipient’s Authorized Representative under penalty of perjury. All costs submitted
pursuant to this Agreement must only be for the work or tasks set forth in this Agreement. The
Subrecipient must not submit any Reimbursement Request containing costs that are ineligible or have
been reimbursed from other funding sources unless required and specifically noted as such (i.e., match
costs). Any costs for which the Subrecipient is seeking reimbursement shall not be reimbursed from any
other source. Double or multiple billing for time, services, or any other eligible cost is improper and will
not be compensated. Any suspected occurrences of fraud, forgery, embezzlement, theft, or any other
misuse of public funds may result in suspension of disbursements and, notwithstanding any other section
in this Agreement, the termination of this Agreement requiring the repayment of all Project Funds
disbursed hereunder. Additionally, WQA or the State Water Board may request an audit and refer the
matter to the Attorney General’s Office or the appropriate district attorney’s office for criminal
prosecution or the imposition of civil liability.
L. SUBRECIPIENT’S PAYMENT OBLIGATION. The Subrecipient must pay any and all costs connected
with the Project including, without limitation, any and all Project Costs and Additional Payments. If the
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Project Funds are not sufficient to pay the Project Costs in full, the Recipient must nonetheless complete
the Project and pay that portion of the Project Costs in excess of available Project Funds, and shall not be
entitled to any reimbursement therefor from the WQA.
M. COMPLIANCE WITH GENERAL AND PROGRAMMATIC TERMS OF GRANT FUNDING
PROGRAM. Subrecipient shall comply with all conditions, duties, requirements and restrictions
imposed upon the WQA under the Proposition 68 “General and Programmatic Terms and Conditions”
attached as Exhibit C to the Master Agreement.
N. INDEMNIFICATION. To the fullest extent permitted by law, Subrecipient shall indemnify, hold
harmless and defend the WQA and WQA’s officials, officers, employees and agents (collectively, the
“WQA Indemnitees”) from and against all liability, loss, damage, expense, cost (including without
limitation reasonable attorneys’ fees, expert fees and all other costs and fees of litigation) of every nature
arising out of or in connection with Subrecipient’s performance under this Agreement or its failure to
comply with any of its obligations contained in this Agreement, except such loss or damage which is
caused by the sole negligence or willful misconduct of the WQA Indemnitees.
O. EVENT OF DEFAULT; BREACH OF AGREEMENT.
1. In the event either Party fails to perform any duty, obligation, service or task set forth under this
Agreement (or fails to timely perform or properly perform any such duty, obligation, service or
task set forth under this Agreement), an event of default (hereinafter, “Event of Default”) shall
occur. For all Events of Default, the Party alleging an Event of Default shall give written notice
to the defaulting Party (hereinafter referred to as a “Default Notice”) which shall specify: (i) the
nature of the Event of Default; (ii) the action required to cure the Event of Default; (iii) a date by
which the Event of Default shall be cured. The Event of Default shall constitute a breach of this
Agreement if the defaulting Party fails to cure the Event of Default within the applicable cure
period or any extended cure period allowed under this Agreement.
2. Subrecipient shall cure the following Events of Defaults within the following time periods:
i. Within three (3) business days of WQA’s issuance of a Default Notice for any failure of
Subrecipient to timely provide WQA with any information and/or written reports,
documentation or work product which Subrecipient is obligated to provide to WQA under
this Agreement or applicable law. Prior to the expiration of the 3-day cure period,
Subrecipient may submit a written request for additional time to cure the Event of Default
upon a showing that Subrecipient has commenced efforts to cure the Event of Default and
that the Event of Default cannot be reasonably cured within the 3-day cure period. The
foregoing notwithstanding, WQA shall be under no obligation to grant additional time for the
cure of an Event of Default under this subsection N.2.i. that exceeds seven (7) calendar days
from the end of the initial 3-day cure period; or
ii. Within fourteen (14) calendar days of WQA’s issuance of a Default Notice for any other
Event of Default under this Agreement. Prior to the expiration of the 14-day cure period,
Subrecipient may submit a written request for additional time to cure the Event of Default
upon a showing that Subrecipient has commenced efforts to cure the Event of Default and
that the Event of Default cannot be reasonably cured within the 14 -day cure period. The
foregoing notwithstanding, WQA shall be under no obligation to grant additional time for the
cure of an Event of Default under this Section N.2.ii that exceeds thirty (30) calendar days
from the end of the initial 14-day cure period.
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In addition to any other failure on the part of Subrecipient to perform any duty, obligation, service
or task set forth under this Agreement (or the failure to timely perform or properly perform any
such duty, obligation, service or task), an Event of Default on the part of Subrecipient shall
include, but shall not be limited to the following: (i) Subrecipient’s refusal or failure to perform
any of the services or tasks called for under the Scope of Work; (ii) Subrecipient’s failure to
fulfill or perform its obligations under this Agreement within the specified time or if no time is
specified, within a reasonable time; (iii) Subrecipient’s and/or its employees’ disregard or
violation of any federal, state, local law, rule, procedure or regulation; (iv) the initiation of
proceedings under any bankruptcy, insolvency, receivership, reorganization, or similar legislation
as relates to Subrecipient, whether voluntary of involuntary; (v) Subrecipient’s refusal or failure
to perform or observe any covenant, condition, obligation or provision of this Agreement; and/or
(vii) WQA’s discovery that a statement representation or warranty by Subrecipient relating to this
Agreement is false, misleading or erroneous in any material respect.
3. WQA shall cure any Event of Default asserted by Subrecipient within sixty (60) calendar days of
SUBRECIPIENT’s issuance of a Default Notice, unless the Event of Default cannot reasonably
be cured within the 60-day cure period. Prior to the expiration of the 60-day cure period, WQA
may submit a written request for additional time to cure the Event of Default upon a showing that
WQA has commenced its efforts to cure the Event of Default and that the Event of Default cannot
be reasonably cured within the 60-day cure period.
4. WQA, in its sole and absolute discretion, may also immediately suspend this Agreement pending
Subrecipient’s cure of any Event of Default by giving Subrecipient written notice of WQA's
intent to suspend Subrecipient’s performance (hereinafter, a “Suspension Notice”). WQA may
issue the Suspension Notice at any time upon the occurrence of an Event of Default. Upon such
suspension, Subrecipient shall be compensated only for those services and tasks which have been
rendered by Subrecipient to the reasonable satisfaction of WQA up to the effective date of the
suspension. No actual or asserted breach of this Agreement on the part of WQA shall operate to
prohibit or otherwise restrict WQA’s ability to suspend this Agreement as provided herein.
5. No waiver of any Event of Default or breach under this Agreement shall constitute a waiver of
any other or subsequent Event of Default or breach. No waiver, benefit, privilege, or service
voluntarily given or performed by a Party shall give the other Party any contractual rights by
custom, estoppel, or otherwise.
6. The duties and obligations imposed under this Agreement and the rights and remedies available
hereunder shall be in addition to and not a limitation of any duties, obligations, rights and
remedies otherwise imposed or available by law. In addition to any other remedies available to
WQA at law or under this Agreement in the event of any breach of this Agreement, WQA, in its
sole and absolute discretion, may also pursue any one or more of the following remedies:
i. Upon written notice to Subrecipient, the WQA may immediately terminate this Agreement in
whole or in part;
ii. Upon written notice to Subrecipient, the WQA may extend the time of performance;
iii. The WQA may proceed by appropriate court action to enforce the terms of the Agreement to
recover damages for Subrecipient breach of the Agreement or to terminate the Agreement; or
iv. The WQA may exercise any other available and lawful right or remedy.
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Subrecipient shall be liable for all legal fees plus other costs and expenses that WQA incurs upon
a breach of this Agreement by subrecipient or in the WQA’s exercise of its remedies under this
Agreement.
7. In the event WQA is in breach of this Agreement, Subrecipient’s sole remedy shall be the
suspension or termination of this Agreement and/or the recovery of any unpaid sums lawfully
owed to Subrecipient under this Agreement for completed services and tasks. WQA shall not be
liable for consequential damage or any other damages or recovery.
8. No waiver of any default or breach under this Agreement shall constitute a waiver of any other
default or breach, whether of the same or other covenant, warranty, agreement, term, condition,
duty or requirement contained in this Agreement. No waiver, benefit, privilege, or service
voluntarily given or performed by a Party shall give the other Party any contractual rights by
custom, estoppel, or otherwise.
P. MISCELLANEOUS PROVISIONS.
1. Amendment. No amendment of this Agreement shall be binding upon the Parties unless it is in
writing and executed by all Parties.
2. Integration. This Agreement sets forth all of the covenants, provisions, agreements, conditions
and understandings with respect to the matters addressed in this Agreement and constitutes the
final and complete agreement of the Parties with respect to such matters, a nd supersedes all
previous negotiations between them and all drafts or other documents previously exchanged by
them with respect to such matters. Each Party acknowledges that no other Party, or agent or
attorney of any other Party has made any promise, representation, or warranty whatsoever,
express or implied, not contained herein concerning the matters addressed in this Agreement, to
induce it to authorize the execution of this Agreement and acknowledges that it has not
authorized the execution of this Agreement in reliance upon any such promise, representation, or
warranty not contained herein. Except for the specific references to the Second Cooperative
Agreement contained in this Agreement, the Second Cooperative Agreement is not part of this
Agreement.
3. Further Action. The Parties agree to and shall take such further action and execute and deliver
such additional documents as may be reasonably required to effectuate the terms and conditions
of this Agreement and to the extent consistent with the terms hereof.
4. Notices.
a. Any notices or other writings required to be given to a Party pursuant to this Agreement
shall be in writing addressed to the Party at the address of the Party set forth below or at
such other address as subsequently may be specified by such Party in a written notice:
If to WQA:
Randy Schoellerman, Executive Director
San Gabriel Basin Water Quality Authority
1720 W. Cameron Ave, Suite 100
West Covina, California 91790
Facsimile: (626) 338-5775 Phone: (626) 338-5555
Email: randy@wqa.com
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If to SUBRECIPIENT:
City of Arcadia
240 W. Huntington Dr.
P.O. Box 60021
Arcadia, CA 91066
ATTN: City Manager
Phone: (626) 574-5401
Email: CityManager@ArcadiaCA.gov
b. Unless otherwise provided in this Agreement, notices shall be given by personal delivery,
by certified mail, return receipt requested, by United States mail, or by overnight courier
that provides a written confirmation of delivery, by overnight courier that provides a
written confirmation of delivery, by facsimile with printed notice of receipt, or by
electronic mail. Notice given by personal delivery shall be deemed given and effective
upon delivery. Notice given by certified mail, return receipt requested, or by United
States mail shall be deemed given and effective two (2) business days following mailing.
Notice given by overnight courier shall be deemed given and effective one (1) business
day following mailing. Notice by facsimile and notice by electronic mail shall be
deemed given upon transmission. It is each Party’s obligation to notify the other Party of
any change of address of those listed in this section of the Agreement.
5. No Assignment. No Party shall assign or otherwise transfer its rights or obligations under this
Agreement without the prior written consent of the other Parties.
6. Joint Drafting and Negotiation. This Agreement has been jointly negotiated and drafted. The
language of this Agreement shall be construed as a whole according to its fair meaning and
without regard to or aid of any statutory or similar judicial rule of construction. Each Party
acknowledges that it has had the opportunity to seek the advice of experts and legal counsel prior
to executing this Agreement, and that it is fully aware of and understands all of its terms and the
legal consequences thereof.
7. Headings. Headings used in this Agreement are for reference only and shall not affect the
construction of this Agreement.
8. Third Party Beneficiaries. No third party shall be entitled to claim or enforce any rights under
this Agreement.
9. Severability. In the event that any provision of this Agreement is determined by a court to be
invalid, the court shall reform the provision in a manner that is both consistent with the terms of
this Agreement taken as a whole and legally valid. The remainder of this Agreement shall not be
affected thereby.
10. Successors and Permitted Assigns. All covenants and agreements contained in this Agreement by
or on behalf of a Party shall bind and inure to the benefit of that Party’s successors and permitted
assigns, whether so expressed or not.
10
11. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed
an original, and all of which, taken together, shall constitute one and the same instrument.
Signatures sent by facsimile or electronic mail shall be deemed originals and treated in all
respects as originals pursuant to Government Code § 16.5.
IN WITNESS WHEREOF, each Party has executed this Agreement on the date set forth below, said Agreement
to be effective on the Effective Date.
Date:_________________, 2021 SAN GABRIEL BASIN WATER QUALITY AUTHORITY
By____________________________________
Name__________________________________
Its_____________________________________
Date:_________________, 2021 SUBRECIPIENT
By____________________________________
Name__________________________________
Its_____________________________________
ATTEST:
___________________________
City Clerk
APPROVED AS TO FORM:
___________________________
City Attorney
Exhibit A
EXHIBIT A – PROJECT DESCRIPTION
1. Alhambra Groundwater Treatment Plant
2. Arcadia Live Oak Treatment
3. Arcadia Longden Treatment
4. Cal Domestic Water Company Basset Treatment
5. Golden State Water Company Garvey Plant
6. Golden State Water Company San Gabriel Plant
7. Golden State Water Company Encinita Plant
8. La Puente Valley County Water District Treatment Plant
9. Monrovia Myrtle Tower 1 and 2 Treatment
10. Monrovia Myrtle Tower 3 and 4 Treatment
11. Monterey Park Well 5 Treatment
12. Monterey Park 9, 12, 15 Treatment
13. Monterey Park 1, 3, 10, & Fern Treatment
14. San Gabriel Valley Water Company Plant No. 8 Treatment
15. San Gabriel Valley Water Company Plant No. 11 Treatment
16. San Gabriel Valley Water Company Plant B5 Treatment
17. San Gabriel Valley Water Company Plant No. B6 Treatment
18. San Gabriel Valley Water Company Plant B11 Treatment
19. San Gabriel Valley Water Company Plant G4 Treatment
20. South Pasadena Wilson Treatment
21. Valley County Water District Maine Treatment
22. Valley County Water District Nixon Treatment
23. Valley County Water District Lante Treatment Plant
24. Water Quality Authority WSGRF
Exhibit B - 1 -
EXHIBIT B – GENERAL AND PROGRAMMATIC TERMS AND CONDITIONS
B.1 REPRESENTATIONS & WARRANTIES
The Recipient represents, warrants, and commits to the following as of the Eligible Work Start Date and
continuing thereafter for the term of this Agreement, which shall be at least until the Records Retention
End Date.
B.1.1 Application and General Recipient Commitments.
The Recipient has not made any untrue statement of a material fact in its application for this financial
assistance, or omitted to state in its application a material fact that makes the statements in its application
not misleading.
The Recipient agrees to comply with all terms, provisions, conditions, and commitments of this
Agreement, including all incorporated documents.
The Recipient agrees to fulfill all assurances, declarations, representations, and commitments in its
application, accompanying documents, and communications filed in support of its request for funding
under this Agreement.
The Recipient is in compliance with all State Water Board funding agreements to which it is a party.
B.1.2 Authorization and Validity.
The execution and delivery of this Agreement, including all incorporated documents, has been duly
authorized by the Recipient. Upon execution by both parties, this Agreement constitutes a valid and
binding obligation of the Recipient, enforceable in accordance with its terms, except as such enforcement
may be limited by law.
B.1.3 No Violations.
The execution, delivery, and performance by Recipient of this Agreement, including all incorporated
documents, do not violate any provision of any law or regulation in effect as of the date set forth on the
first page hereof, or result in any breach or default under any contract, obligation, indenture, or other
instrument to which Recipient is a party or by which Recipient is bound as of the date set forth on the
Cover Page.
B.1.4 No Litigation.
There are no pending or, to Recipient’s knowledge, threatened actions, claims, investigations, suits, or
proceedings before any governmental authority, court, or administrative agency which materially affect
the financial condition or operations of the Recipient, the Facility, and/or the Project.
There are no proceedings, actions, or offers by a public entity to acquire by purchase or the power of
eminent domain the Facility or any of the real or personal property related to or necessary for the Project.
Exhibit B - 2 -
B.1.5 Property Rights.
The Recipient owns or has sufficient property rights in the Project property for the longer of the useful
life or the term of this Agreement, either in fee simple or for a term of years that is not subject to third-
party revocation during the useful life of the Facility.
B.1.6 Solvency and Insurance.
None of the transactions contemplated by this Agreement will be or have been made with an actual intent
to hinder, delay, or defraud any present or future creditors of Recipient. The Recipient is solvent and will
not be rendered insolvent by the transactions contemplated by this Agreement. The Recipient is able to
pay its debts as they become due. The Recipient maintains sufficient insurance coverage considering the
scope of this Agreement, including, for example but not necessarily limited to, general liability,
automobile liability, workers compensation and employer liability, professional liability.
B.1.7 Legal Status and Eligibility.
The Recipient is duly organized and existing and in good standing under the laws of the State of
California. Recipient must at all times maintain its current legal existence and preserve and keep in full
force and effect its legal rights and authority. The Recipient acknowledges that changes to its legal or
financial status may affect its eligibility for funding under this Agreement and commits to maintaining its
eligibility. Within the preceding ten years, the Recipient has not failed to demonstrate compliance with
State or federal audit disallowances.
B.1.8 Financial Statements and Continuing Disclosure.
The financial statements of Recipient: (a) are materially complete and correct; (b) present fairly the
financial condition of the Recipient; and (c) have been prepared in accordance with GAAP. Since the
date(s) of such financial statements provided to the State Water Board, there has been no material adverse
change in the financial condition of the Recipient, nor have any assets or properties reflected on such
financial statements been sold, transferred, assigned, mortgaged, pledged or encumbered, except as
previously disclosed in writing by Recipient and approved in writing by the State Water Board.
The Recipient is current in its continuing disclosure obligations associated with its material debt, if any.
B.1.9 No Other Material Debt.
The Recipient has no Material Obligations other than as set forth in financial statements provided to the
State Water Board, unless set forth in Exhibit D.
B.2 DEFAULTS AND REMEDIES
In addition to any other remedy set forth in this Agreement, the following remedies are available under
this Agreement.
B.2.1 Return of Funds; Acceleration; and Additional Payments.
Exhibit B - 3 -
Notwithstanding any other provision of this Agreement, if the Division determines that an Event of
Default has occurred, the Recipient may be required, upon demand, immediately to do each of the
following:
(a) return to the State Water Board any grant or principal forgiveness amounts received pursuant to
this Agreement;
(b) pay interest at the highest legal rate on all of the foregoing; and
(c) pay any Additional Payments.
B.2.2 Judicial Remedies.
Whenever the State Water Board determines that an Event of Default shall have occurred, the State Water
Board may enforce its rights under this Agreement by any judicial proceeding, whether at law or in
equity. Without limiting the generality of the foregoing, the State Water Board may:
(a) by suit in equity, require the Recipient to account for amounts relating to this Agreement as if the
Recipient were the trustee of an express trust;
(b) by mandamus or other proceeding, compel the performance by the Recipient and any of its
officers, agents, and employees of any duty under the law or of any obligation or covenant under this
Agreement; and
(c) take whatever action at law or in equity as may appear necessary or desirable to the State Water
Board, or to enforce performance of any obligation or covenant of the Recipient under this Agreement.
B.2.3 Termination.
Upon an Event of Default, the State Water Board may terminate this Agreement. Interest shall accrue on
all amounts due at the highest legal rate of interest from the date that the State Water Board delivers
notice of termination to the Recipient.
B.2.4 Damages for Breach of Tax-Exempt Status.
In the event that any breach of any of the provisions of this Agreement by the Recipient results in the loss
of tax-exempt status for any bonds of the State or any subdivision or agency thereof, or if such breach
results in an obligation on the part of the State or any subdivision or agency thereof to reimburse the
federal government by reason of any arbitrage profits, the Recipient must immediately reimburse the
State or any subdivision or agency thereof in an amount equal to any damages paid by or loss incurred by
the State or any subdivision or agency thereof due to such breach.
Exhibit B - 4 -
B.2.5 Remedies and Limitations.
None of the remedies available to the State Water Board shall be exclusive of any other remedy, and each
such remedy shall be cumulative and in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity. The State Water Board may exercise any remedy, now or hereafter
existing, without exhausting and without regard to any other remedy.
Any claim of the Recipient is limited to the rights and remedies provided to the Recipient under this
Agreement and is subject to the claims procedures provided to the Recipient under this Agreement.
B.2.6 Non-Waiver.
Nothing in this Agreement shall affect or impair the Recipient’s obligation to undertake work under this
Agreement or shall affect or impair the right of the State Water Board to bring suit to enforce such work.
No delay or omission of the State Water Board in the exercise of any right arising upon an Event of
Default shall impair any such right or be construed to be a waiver of any such Event of Default. The State
Water Board may exercise from time to time and as often as shall be deemed expedient by the State
Water Board, any remedy or right provided by law or pursuant to this Agreement. Any waiver of rights
by the State Water Board with respect to a default or other matter arising under this Agreement at any
time shall not be considered a waiver of rights with respect to any other default or matter.
B.2.7 Status Quo.
If any action to enforce any right or exercise any remedy shall be brought and either discontinued or
determined adversely to the State Water Board, then the State Water Board shall be restored to its former
position, rights and remedies as if no such action had been brought.
B.3 STANDARD CONDITIONS
B.3.1 Access, Inspection, and Public Records.
The Recipient must ensure that the State Water Board, the Governor of the State, or any authorized
representative of the foregoing, will have safe and suitable access to the Project site at all reasonable
times through the Records Retention End Date. The Recipient acknowledges that, except for a subset of
information regarding archaeological records and personally identifiable information, the Project records
and locations are public records including, but not limited to, all of the submissions accompanying the
application, all of the documents incorporated into this Agreement by reference, and all reports,
Reimbursement Requests, and supporting documentation submitted hereunder.
B.3.2 Accounting and Auditing Standards; Financial Management Systems; Records Retention.
(a) The Recipient must maintain GAAP-compliant project accounts, including GAAP requirements
relating to the reporting of infrastructure assets. Without limitation of the requirement to maintain Project
accounts in accordance with GAAP, the Recipient must:
(1) Establish an official file for the Project which adequately documents all significant actions
relative to the Project;
Exhibit B - 5 -
(2) Establish separate accounts which will adequately and accurately depict all amounts received and
expended on the Project, including all Project Funds received under this Agreement;
(3) Establish separate accounts which will adequately depict all income received which is attributable
to the Project, specifically including any income attributable to Project Funds disbursed under this
Agreement;
(4) Establish an accounting system which will accurately depict final total costs of the Project;
(5) Establish such accounts and maintain such records as may be necessary for the State to fulfill
federal reporting requirements, including any and all reporting requirements under federal tax statutes or
regulations; and
(6) If Force Account is used by the Recipient for any phase of the Project, accounts will be
established which reasonably document all employee hours charged to the Project and the associated tasks
performed by each employee. Indirect Costs from Force Account are not eligible for funding.
(b) The Recipient must maintain separate books, records and other material relative to the Project.
The Recipient must also retain such books, records, and other material for itself and for each contractor or
subcontractor who performed or performs work on this project for a minimum of thirty-six (36) years
after Work Completion. The Recipient must require that such books, records, and other material are
subject at all reasonable times (at a minimum during normal business hours) to inspection, copying, and
audit by the State Water Board, the California Department of Finance, the California State Auditor, the
Bureau of State Audits, the United States Environmental Protection Agency (USEPA), the Office of
Inspector General, the Internal Revenue Service, the Governor, or any authorized representatives of the
aforementioned. The Recipient must allow and must require its contractors to allow interviews during
normal business hours of any employees who might reasonably have information related to such records.
The Recipient agrees to include a similar duty regarding audit, interviews, and records retention in any
contract or subcontract related to the performance of this Agreement. The provisions of this section
survive the term of this Agreement.
B.3.3 Amendment.
No amendment or variation of the terms of this Agreement shall be valid unless made in writing and
signed by both the Recipient and the Deputy Director or designee.
B.3.4 Assignability.
Exhibit B - 6 -
This Agreement is not assignable by the Recipient, either in whole or in part, without the consent of the
State Water Board in the form of a formal written amendment to this Agreement.
B.3.5 Audit.
The Division may call for an audit of financial information relative to the Project if the Division
determines that an audit is desirable to assure program integrity or if an audit becomes necessary because
of State or federal requirements. If an audit is called for, the audit must be performed by a certified public
accountant independent of the Recipient and at the cost of the Recipient. The audit must be in the form
required by the Division. The Recipient must return, or ensure the return of, any audit disallowances
within 30 days.
B.3.6 Bonding.
Where contractors are used, the Recipient must not authorize construction to begin until each contractor
has furnished a performance bond in favor of the Recipient in the following amounts: faithful
performance (100%) of contract value; labor and materials (100%) of contract value. This requirement
shall not apply to any contract for less than $25,000.00.
B.3.7 Competitive Bidding
The Recipient must adhere to any applicable State law or local ordinance for competitive bidding and
applicable labor laws.
B.3.8 Compliance with Applicable Laws, Rules, and Requirements.
The Recipient must, at all times, comply with and require its contractors and subcontractors to comply
with all applicable federal and State laws, rules, guidelines, regulations, and requirements. Without
limitation of the foregoing, to the extent applicable, the Recipient must:
(a) Comply with the provisions of the adopted environmental mitigation plan, if any, for the useful
life of the Project;
(b) Comply with the Guidelines; and
(c) Comply with and require compliance with the State and federal requirements set forth elsewhere
in this Agreement.
B.3.9 Computer Software.
Exhibit B - 7 -
The Recipient certifies that it has appropriate systems and controls in place to ensure that State funds will
not be used in the performance of this Agreement for the acquisition, operation or maintenance of
computer software in violation of copyright laws.
B.3.10 Conflict of Interest.
The Recipient certifies that its owners, officers, directors, agents, representatives, and employees are in
compliance with applicable State and federal conflict of interest laws and will remain in compliance for
the useful life of the Facility. Public entities are required to have adopted conflict of interest codes and
may be required to provide documentation of those codes to the Division.
B.3.11 Continuous Use of Project; No Lease, Sale, Transfer of Ownership, or Disposal of Project.
The Recipient agrees that, except as provided in this Agreement, it will not abandon, substantially
discontinue use of, lease, sell, transfer ownership of, or dispose of all or a significant part or portion of the
Facility during the useful life of the Facility without prior written approval of the Division. Such
approval may be conditioned as determined to be appropriate by the Division, including a condition
requiring repayment of all disbursed Project Funds or all or any portion of all remaining funds covered by
this Agreement together with accrued interest and any penalty assessments that may be due.
B.3.12 Data Management.
The Recipient will undertake appropriate data management activities so that Project data can be
incorporated into statewide data systems.
B.3.13 Disputes.
(a) The Recipient may appeal a staff decision within thirty (30) days to the Deputy Director of the
Division or designee, for a final Division decision. The Recipient may appeal a final Division decision to
the State Water Board within thirty (30) days. The Office of the Chief Counsel of the State Water Board
will prepare a summary of the dispute and make recommendations relative to its final resolution, which
will be provided to the State Water Board’s Executive Director and each State Water Board Member.
Upon the motion of any State Water Board Member, the State Water Board will review and resolve the
dispute in the manner determined by the State Water Board. Should the State Water Board determine not
to review the final Division decision, this decision will represent a final agency action on the dispute.
(b) This clause does not preclude consideration of legal questions, provided that nothing herein shall
be construed to make final the decision of the State Water Board, or any official or representative thereof,
on any question of law.
(c) The Recipient must continue with the responsibilities under this Agreement during any dispute.
Exhibit B - 8 -
(d) This section relating to disputes does not establish an exclusive procedure for resolving claims
within the meaning of Government Code sections 930 and 930.4.
B.3.14 Drug-Free Workplace.
The Recipient certifies that it will provide a drug-free workplace in compliance with the Drug-Free
Workplace Act (Gov. Code. §§ 8350-8357). The Recipient shall publish a statement notifying employees
that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is
prohibited in the Recipient’s workplace and specifying the actions to be taken against employees for
violations of the prohibition. The Recipient shall establish a drug-free awareness program to inform
employees about the dangers of drug abuse in the workplace, the Recipient’s policy of maintaining a
drug-free workplace, any available drug counseling, rehabilitation and employee assistance programs, and
penalties that may be imposed upon employees for drug abuse violations. The Recipient shall provide
that every employee who works on the Project receives a copy of the Recipient’s drug-free workplace
policy statement and agrees to abide by the terms of the statement as a condition of employment on the
Project.
B.3.15 Environmental Clearance.
No work that is subject to California Environmental Quality Act (CEQA) or National Environmental
Policy Act (NEPA) may proceed under this Agreement until the State Water Board has provided approval
to proceed. Upon receipt and review of the Recipient’s environmental documents, the State Water Board
shall make the appropriate environmental findings before determining whether to approve construction or
implementation funding for the Project under this Agreement. Providing approval for such construction
or implementation funding is fully discretionary. The State Water Board may require changes in the
scope of work or additional mitigation as a condition to providing construction or implementation funding
under this Agreement. The Recipient shall not perform any work subject to CEQA and/or NEPA before
the State Water Board completes its environmental review and specifies any changes in scope or
additional mitigation that may be required. Proceeding with work subject to CEQA and/or NEPA without
approval by the State Water Board shall constitute a breach of a material provision of this Agreement. If
this Project includes modification of a river or stream channel, the Recipient must fully mitigate
environmental impacts resulting from the modification. The Recipient must provide documentation that
the environmental impacts resulting from such modification will be fully mitigated considering all of the
impacts of the modification and any mitigation, environmental enhancement, and environmental benefit
resulting from the Project, and whether, on balance, any environmental enhancement or benefit equals or
exceeds any negative environmental impacts of the Project.
B.3.16 Governing Law.
This Agreement is governed by and shall be interpreted in accordance with the laws of the State of
California.
B.3.17 Income Restrictions.
The Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest thereon)
accruing to or received by the Recipient related to this Agreement must be paid by the Recipient to the
Exhibit B - 9 -
State Water Board, to the extent that they are properly allocable to costs for which the Recipient has been
reimbursed by the State Water Board under this Agreement.
B.3.18 Indemnification and State Reviews.
The parties agree that review or approval of Project plans and specifications by the State Water Board is
for administrative purposes only, including conformity with application and eligibility criteria, and
expressly not for the purposes of design defect review or construction feasibility, and does not relieve the
Recipient of its responsibility to properly plan, design, construct, operate, and maintain the Project. To
the extent permitted by law, the Recipient agrees to indemnify, defend, and hold harmless the State Water
Board, and any trustee, and their officers, employees, and agents (collectively, "Indemnified Persons"),
against any loss or liability arising out of any claim or action brought against any Indemnified Persons
from and against any and all losses, claims, damages, liabilities, or expenses, of every conceivable kind,
character, and nature whatsoever arising out of, resulting from, or in any way connected with (1) the
Facility or the Project or the conditions, occupancy, use, possession, conduct, or management of, work
done in or about, or the planning, design, acquisition, installation, or construction, of the Facility or the
Project or any part thereof; (2) the carrying out of any of the transactions contemplated by this Agreement
or any related document; (3) any violation of any applicable law, rule or regulation, any environmental
law (including, without limitation, the Federal Comprehensive Environmental Response, Compensation
and Liability Act, the Resource Conservation and Recovery Act, the California Hazardous Substance
Account Act, the Federal Water Pollution Control Act, the Clean Air Act, the Toxic Substances Control
Act, the Occupational Safety and Health Act, the Safe Drinking Water Act, the California Hazardous
Waste Control Law, and California Water Code Section 13304, and any successors to said laws), rule or
regulation or the release of any toxic substance on or near the Facility or the Project; or (4) any untrue
statement or alleged untrue statement of any material fact or omission or alleged omission to state a
material fact necessary to make the statements required to be stated therein, in light of the circumstances
under which they were made, not misleading with respect to any information provided by the Recipient
for use in any disclosure document utilized in connection with any of the transactions contemplated by
this Agreement, except those arising from the gross negligence or willful misconduct of the Indemnified
Persons. The Recipient must also provide for the defense and indemnification of the Indemnified Persons
in any contractual provision extending indemnity to the Recipient in any contract let for the performance
of any work under this Agreement, and must cause the Indemnified Persons to be included within the
scope of any provision for the indemnification and defense of the Recipient in any contract or
subcontract. To the fullest extent permitted by law, the Recipient agrees to pay and discharge any
judgment or award entered or made against Indemnified Persons with respect to any such claim or action,
and any settlement, compromise or other voluntary resolution. The provisions of this section survive the
term of this Agreement.
B.3.19 Independent Actor.
The Recipient, and its agents and employees, if any, in the performance of this Agreement, shall act in an
independent capacity and not as officers, employees, or agents of the State Water Board.
B.3.20 Integration.
This Agreement constitutes the complete and final agreement between the parties. No oral or written
understanding or agreement not incorporated in this Agreement shall be binding on either party.
Exhibit B - 10 -
B.3.21 No Discrimination.
(a) The Recipient must comply with Government Code section 11135 and the implementing
regulations (Cal. Code Regs, tit. 2, § 11140 et seq.), including, but not limited to, ensuring that no person
is unlawfully denied full and equal access to the benefits of, or unlawfully subjected to discrimination in
the operation of, the Project or Facility on the basis of sex, race, color, religion, ancestry, national origin,
ethnic group identification, age, mental disability, physical disability, medical condition, genetic
information, marital status, or sexual orientation as such terms are defined under California law, for as
long as the Recipient retains ownership or possession of the Project.
(b) If Project Funds are used to acquire or improve real property, the Recipient must include a
covenant of nondiscrimination running with the land in the instrument effecting or recording the transfer
of such real property.
(c) The Recipient must comply with the federal American with Disabilities Act of 1990 and
implementing regulations as required by Government Code section 11135(b).
(d) The Recipient’s obligations under this section shall survive the term of this Agreement.
(e) During the performance of this Agreement, the Recipient and its contractors and subcontractors
must not unlawfully discriminate, harass, or allow harassment against any employee or applicant for
employment because of sex, race, color, ancestry, religious creed, national origin, sexual orientation,
physical disability (including HIV and AIDS), mental disability, medical condition (cancer), age (over
40), marital status, denial of family care leave, or genetic information, gender, gender identity, gender
expression, or military and veteran status.
(f) The Recipient, its contractors, and subcontractors must ensure that the evaluation and treatment
of their employees and applicants for employment are free from such discrimination and harassment.
(g) The Recipient, its contractors, and subcontractors must comply with the provisions of the Fair
Employment and Housing Act and the applicable regulations promulgated thereunder. (Gov. Code,
§12990, subds. (a)-(f) et seq.;Cal. Code Regs., tit. 2, § 7285 et seq.) Such regulations are incorporated
into this Agreement by reference and made a part hereof as if set forth in full.
(h) The Recipient, its contractors, and subcontractors must give written notice of their obligations
under this clause to labor organizations with which they have a collective bargaining or other agreement.
(i) The Recipient must include the nondiscrimination and compliance provisions of this clause in all
subcontracts to perform work under this Agreement.
Exhibit B - 11 -
B.3.22 No Third Party Rights.
The parties to this Agreement do not create rights in, or grant remedies to, any third party as a beneficiary
of this Agreement, or of any duty, covenant, obligation, or undertaking established herein.
B.3.23 No Obligation of the State.
Any obligation of the State Water Board herein contained shall not be an obligation, debt, or liability of
the State, and any such obligation shall be payable solely out of the moneys encumbered pursuant to this
Agreement.
B.3.24 Notice.
Upon the occurrence of any of the following events, the Recipient must notify the Division’s Deputy
Director and Project Manager by phone and email within the time specified below:
(a) The Recipient must notify the Division within twenty-four (24) hours of any discovery of any
potential tribal cultural resource and/or archaeological or historical resource. Should a potential tribal
cultural resource and/or archaeological or historical resource be discovered during construction or Project
implementation, the Recipient must ensure that all work in the area of the find will cease until a qualified
archaeologist has evaluated the situation and made recommendations regarding preservation of the
resource, and the Division has determined what actions should be taken to protect and preserve the
resource. The Recipient must implement appropriate actions as directed by the Division.
(b) The Recipient must notify the Division within five (5) business days of the occurrence of any of
the following events:
(1) Bankruptcy, insolvency, receivership or similar event of the Recipient, or actions taken in
anticipation of any of the foregoing;
(2) Change of ownership of the Project (no change of ownership may occur without written consent
of the Division);
(3) Loss, theft, damage, or impairment to Project;
(4) Events of Default, except as otherwise set forth in this section;
(5) Failure to observe or perform any covenant or comply with any condition in this Agreement;
(6) An offer from a public entity to purchase the Project or any portion thereof, or any of the real or
personal property related to or necessary for the Project;
(7) A proceeding or action by a public entity to acquire the Project by power of eminent domain.
Exhibit B - 12 -
(c) The Recipient must notify the Division in writing within ten (10) business days of any of the
following events:
(1) Any litigation pending or threatened with respect to the Project; the Recipient’s technical,
managerial or financial capacity to operate; or the Recipient’s continued existence;
(2) Consideration of dissolution, or disincorporation;
(3) Adverse tax opinions, the issuance by the Internal Revenue Service or proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices of
determinations with respect to the tax status of any tax-exempt bonds;
(4) Enforcement actions by or brought on behalf of the State Water Board or Regional Water Board.
(d) The Recipient must notify the Division promptly of any of the following events:
(1) The discovery of a false statement of fact or representation made in this Agreement or in the
application to the Division for this financial assistance, or in any certification, report, or Reimbursement
Request made pursuant to this Agreement, by the Recipient, its employees, agents, or contractors;
(2) Any substantial change in scope of the Project. The Recipient must undertake no substantial
change in the scope of the Project until prompt written notice of the proposed change has been provided
to the Division and the Division has given written approval for the change;
(3) Cessation of any and all major construction work on the Project where such cessation of work is
expected to or does extend for a period of thirty (30) days or more;
(4) Any circumstance, combination of circumstances, or condition, which is expected to or does
delay Work Completion for a period of ninety (90) days or more;
(5) Any Project monitoring, demonstration, or other implementation activities required in this
Agreement;
(6) Any public or media event publicizing the accomplishments and/or results of this Agreement and
provide the opportunity for attendance and participation by State representatives with at least ten (10)
working days’ notice to the Division;
(7) Any events requiring notice to the Division pursuant to any other provision of this Agreement;
(8) Work Completion;
(9) Project Completion;
(10) The award of a prime construction contract for, or initiation of construction of, Item 6 in Exhibit
A.1 (b), if applicable.
B.3.25 Operation and Maintenance; Insurance.
Exhibit B - 13 -
The Recipient agrees to sufficiently and properly staff, operate, and maintain all portions of the Facility
during its useful life in accordance with all applicable State and federal laws, rules, and regulations.
Unless expressly provided herein, the Recipient assumes all operations and maintenance costs of the
facilities and structures; the State Water Board shall not be liable for any cost of such maintenance,
management, or operation.
The Recipient will procure and maintain or cause to be maintained insurance on the Facility with
responsible insurers, or as part of a reasonable system of self-insurance, in such amounts and against such
risks (including damage to or destruction of the Project) as are usually covered in connection with
systems similar to the Facility. Such insurance may be maintained by a self-insurance plan so long as
such plan provides for (i) the establishment by the Recipient of a separate segregated self-insurance fund
in an amount determined (initially and on at least an annual basis) by an independent insurance consultant
experienced in the field of risk management employing accepted actuarial techniques, and (ii) the
establishment and maintenance of a claims processing and risk management program.
In the event of any damage to or destruction of the Facility caused by the perils covered by such
insurance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement of the
damaged or destroyed portion of the Facility. The Recipient must begin such reconstruction, repair or
replacement as expeditiously as possible, and must pay out of such net proceeds all costs and expenses in
connection with such reconstruction, repair or replacement so that the same must be completed and the
Facility must be free and clear of all claims and liens.
The Recipient agrees that for any policy of insurance concerning or covering the construction of the
Facility, it will cause, and will require its contractors and subcontractors to cause, a certificate of
insurance to be issued showing the State Water Board, its officers, agents, employees, and servants as
additional insured; and must provide the Division with a copy of all such certificates prior to
commencement of construction, if applicable.
B.3.26 Permits, Subcontracting, and Remedies.
The Recipient must procure all permits, licenses and other authorizations necessary to accomplish the
work contemplated in this Agreement, pay all charges and fees, and give all notices necessary and
incidental to the due and lawful prosecution of the work. Signed copies of any such permits or licenses
must be submitted to the Division before any work or construction begins.
The Recipient must not contract or allow subcontracting with excluded parties. The Recipient must not
contract with any party who is debarred or suspended or otherwise excluded from or ineligible for
participation in any work overseen, directed, funded, or administered by the State Water Board program
for which this funding is authorized. For any work related to this Agreement, the Recipient must not
contract with any individual or organization on the State Water Board’s List of Disqualified Businesses
and Persons that is identified as debarred or suspended or otherwise excluded from or ineligible for
participation in any work overseen, directed, funded, or administered by the State Water Board program
for which funding under this Agreement is authorized. The State Water Board’s List of Disqualified
Businesses and Persons is located at
Exhibit B - 14 -
http://www.waterboards.ca.gov/water_issues/programs/enforcement/fwa/dbp.shtml
B.3.27 Professionals.
The Recipient agrees that only licensed professionals will be used to perform services under this
Agreement where such services are called for. All technical reports required pursuant to this Agreement
that involve planning, investigation, evaluation, design, or other work requiring interpretation and proper
application of engineering, architectural, or geologic sciences, shall be prepared by or under the direction
of persons registered to practice in California pursuant to Business and Professions Code, sections 5536.1,
6735, 7835, and 7835.1. To demonstrate compliance with California Code of Regulations, title 16,
sections 415 and 3065, all technical reports must contain a statement of the qualifications of the
responsible registered professional(s). As required by these laws, completed technical reports must bear
the signature(s) and seal(s) of the registered professional(s) in a manner such that all work can be clearly
attributed to the professional responsible for the work.
B.3.28 Prevailing Wages.
If applicable, the Recipient agrees to be bound by all applicable provisions of State Labor Code regarding
prevailing wages. If applicable, the Recipient must monitor all agreements subject to reimbursement
from this Agreement to ensure that the prevailing wage provisions of the State Labor Code are being met.
Division of Industrial Relations (DIR) requirements may be found at: http://www.dir.ca.gov/lcp.asp. For
more information, please refer to DIR’s Public Works Manual at:
http://www.dir.ca.gov/dlse/PWManualCombined.pdf.
B.3.29 Public Funding.
This Project is publicly funded. Any service provider or contractor with which the Recipient contracts
must not have any role or relationship with the Recipient, that, in effect, substantially limits the
Recipient's ability to exercise its rights, including cancellation rights, under the contract, based on all the
facts and circumstances.
B.3.30 Responsibility for Work.
The Recipient shall be responsible for all work and for persons or entities engaged in work performed
pursuant to this Agreement including, but not limited to, contractors, subcontractors, suppliers, and
providers of services. The Recipient shall be responsible for responding to any and all disputes arising
out of its contracts for work on the Project including, but not limited to payment disputes with contractors
and subcontractors. The State Water Board will not mediate disputes between the Recipient and any
other entity concerning responsibility for performance of work.
B.3.31 Related Litigation.
Under no circumstances may the Recipient use funds from any disbursement under this Agreement to pay
costs associated with any litigation the Recipient pursues against the State Water Board or any Regional
Water Quality Control Board. Regardless of the outcome of any such litigation, and notwithstanding any
conflicting language in this Agreement, the Recipient agrees to repay all of the disbursed funds plus
interest in the event that Recipient does not complete the Project.
Exhibit B - 15 -
B.3.32 Rights in Data.
The Recipient agrees that all data, plans, drawings, specifications, reports, computer programs, operating
manuals, notes, and other written or graphic work produced in the performance of this Agreement are
subject to the rights of the State as set forth in this section. The State shall have the right to reproduce,
publish, and use all such work, or any part thereof, in any manner and for any purposes whatsoever and to
authorize others to do so. If any such work is copyrightable, the Recipient may copyright the same,
except that, as to any work which is copyrighted by the Recipient, the State reserves a royalty-free,
nonexclusive, and irrevocable license to reproduce, publish, and use such work, or any part thereof, and to
authorize others to do so, and to receive electronic copies from the Recipient upon request. The Recipient
may disclose, disseminate and use in whole or in part, any final form data and information received,
collected, and developed under this Agreement, subject to appropriate acknowledgement of credit to the
State Water Board for financial support. The Recipient shall not utilize the materials for any profit-
making venture or sell or grant rights to a third party who intends to do so.
B.3.33 State Water Board Action; Costs and Attorney Fees.
Any remedy provided in this Agreement is in addition to and not in derogation of any other legal or
equitable remedy available to the State Water Board as a result of breach of this Agreement by the
Recipient, whether such breach occurs before or after completion of the Project, and exercise of any
remedy provided by this Agreement by the State Water Board shall not preclude the State Water Board
from pursuing any legal remedy or right which would otherwise be available. In the event of litigation
between the parties hereto arising from this Agreement, it is agreed that each party shall bear its own
costs and attorney fees.
B.3.34 Timeliness.
Time is of the essence in this Agreement.
B.3.35 Unenforceable Provision.
In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the
parties agree that all other provisions of this Agreement have force and effect and shall not be affected
thereby.
B.3.36 Venue.
Any action arising out of this Agreement shall be filed and maintained in the Superior Court in and for the
County of Sacramento, California.
B.3.37 Waiver and Rights of the State Water Board.
Any waiver of rights by the State Water Board with respect to a default or other matter arising under this
Agreement at any time shall not be considered a waiver of rights with respect to any other default or
matter. Any rights and remedies of the State Water Board provided for in this Agreement are in addition
to any other rights and remedies provided by law.
Exhibit B - 16 -
B.4 MISCELLANEOUS STATE REQUIREMENTS
B.4.1 State Program Requirements for Proposition 68 Groundwater.
(a) Remediation Costs Limited. (Pub. Resources Code, § 80141.) Project Funds shall not be used to
pay any share of the costs of remediation recovered from parties responsible for the contamination of a
groundwater storage aquifer, but may be used to pay costs that cannot be recovered from responsible
parties. Parties that receive funding for remediating groundwater storage aquifers shall exercise
reasonable efforts to recover the costs of groundwater cleanup from the parties responsible for the
contamination. Funds recovered from responsible parties may only be used to fund treatment and
remediation activities including operations and maintenance.
(b) Groundwater Monitoring. (Wat. Code, § 10920.) The Recipient shall comply with Water Code
section 10920 et seq., which requires groundwater monitoring and reporting of groundwater elevations.
(c) Sustainable Groundwater Management Act (SGMA) Compliance. (Wat. Code, § 10720-
10737.8.) To the extent required under SGMA, the Recipient shall comply with the following:
(1) If, after July 1, 2017, the Project is or will be located in a non-adjudicated high- or medium-
priority California Statewide Groundwater Elevation Monitoring (CASGEM) basin, the Recipient shall
ensure that a Groundwater Sustainability Agency (GSA) has formed or an alternative has been submitted
to DWR. (Wat. Code, § 10735.2 (a)(1).)
(2) If, after January 31, 2020, the Project is or will be located in a non-adjudicated high- or medium
CASGEM basin that is subject to critical conditions of overdraft, the Recipient shall ensure that the
Project is consistent with an adopted Groundwater Sustainability Plan (GSP).
(3) If, after January 31, 2022, the Project is or will be located in a non-adjudicated high- or medium
CASGEM basin that is not subject to critical conditions of overdraft, the Recipient shall ensure that the
Project is consistent with an adopted GSP.
B.4.2 State Cross-Cutters.
Recipient represents that, as applicable, it complies and covenants to maintain compliance with the
following for the term of the Agreement:
(a) The California Environmental Quality Act (CEQA), as set forth in Public Resources Code 21000
et seq. and in the CEQA Guidelines at Title 14, Division 6, Chapter 3, Section 15000 et seq.
Exhibit B - 17 -
(b) Water Conservation requirements, including regulations in Division 3 of Title 23 of the California
Code of Regulations.
(c) Monthly Water Diversion Reporting requirements, including requirements set forth in Water
Code section 5103.
(d) Public Works Contractor Registration with Department of Industrial Relations requirements,
including requirements set forth in Sections 1725.5 and 1771.1 of the Labor Code.
(e) Volumetric Pricing & Water Meters requirements, including the requirements of Water Code
sections 526 and 527.
(f) Urban Water Management Plan requirements, including the Urban Water Management Planning
Act (Water Code, § 10610 et seq.).
(g) Urban Water Demand Management requirements, including the requirements of Section
10608.56 of the Water Code.
(h) Delta Plan Consistency Findings requirements, including the requirements of Water Code section
85225 and California Code of Regulations, title 23, section 5002.
(i) Agricultural Water Management Plan Consistency requirements, including the requirements of
Water Code section 10852.
(j) Charter City Project Labor Requirements, including the requirements of Labor Code section 1782
and Public Contract Code section 2503.
(k) Governor’s Infrastructure Plan. (Gov. Code, § 13100.) The Recipient shall ensure that the
Project shall maintain consistency with section 13100 of the Government Code (five -year infrastructure
plan).
(l) Groundwater Monitoring. (Wat. Code, § 10920.) The Recipient shall comply with Water Code
section 10920 et seq., which requires groundwater monitoring and reporting of groundwater elevations.
(m) The Recipient agrees that it will, at all times, comply with and require its contractors and
subcontractors to comply with directives or orders issued pursuant to Division 7 of the Water Code.
Exhibit B - 18 -
(n) Union Activities. The Recipient hereby acknowledges the applicability of Government Code
sections 16645 through 16649 to this Agreement. The Recipient certifies that none of the Project Funds
will be used to assist, promote, or deter union organizing. If the Recipient incurs costs or makes
expenditures to assist, promote, or deter union organizing, the Recipient will maintain records sufficient
to show that no reimbursement from Project Funds has been sought for these costs and the Recipient shall
provide those records to the Attorney General upon request.