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HomeMy WebLinkAbout2017-09-05 Agenda Packet FRED A. WILSON City Manager MICHAEL E. GATES City Attorney ROBIN ESTANISLAU City Clerk ALISA CUTCHEN City Treasurer AGENDA Tuesday, September 05, 2017 CITY COUNCIL/PUBLIC FINANCING AUTHORITY CITY OF HUNTINGTON BEACH 4:00 PM - Closed Session 6:00 PM - Regular Meeting Council Chambers - 2000 Main Street Huntington Beach, CA 92648 http://www.huntingtonbeachca.gov MAYOR AND CITY COUNCIL BARBARA DELGLEIZE Mayor MIKE POSEY PATRICK BRENDEN Mayor Pro Tem Councilmember JILL HARDY WILLIAM O’CONNELL Councilmember Councilmember ERIK PETERSON LYN SEMETA Councilmember Councilmember MEETING ASSISTANCE NOTICE - AMERICANS WITH DISABILITIES ACT In accordance with the Americans with Disabilities Act the following services are available to members of our community who require special assistance to participate in City Council meetings. If you require special assistance, 48-hour prior notification will enable the city to make reasonable arrangements. To make arrangements for an assisted listening device (ALD) for the hearing impaired, American Sign Language interpreters, a reader during the meeting and/or large print agendas, please contact the City Clerk’s Office at (714) 536-5227, or request assistance from the Sergeant-at-Arms at the meeting. CITY COUNCIL/PUBLIC FINANCING AUTHORITY The City Council/Public Financing Authority of the City of Huntington Beach will regularly convene in joint session on the first and third Monday of each month for the purpose of considering agenda items. The Huntington Beach Successor Agency, Housing Authority, Parking Authority and Civic Improvement Corporation are also agencies on which the Council serves as members. On each agenda these agencies may have items scheduled. CITY COUNCIL AGENDA The City Council agenda and supporting documentation is made available for public review during normal business hours in the Office of the City Clerk, 2000 Main Street immediately following distribution of the agenda packet to a majority of the City Council. Packet delivery typically takes plan on W ednesday afternoons prior to the regularly scheduled meeting on Monday. The agenda packet is posted on the city’s website at http://www.huntingtonbeachca.gov/Government/agendas/. Questions on agenda items may be directed to the City Clerk’s Office at (714) 536-5227. AUDIO/VIDEO ACCESS TO CITY COUNCIL MEETINGS City Council meetings are televised live on cable TV Channel 3, and can be viewed via live or archived web cast at http://www.huntingtonbeachca.gov/Government/agendas/. SUPPLEMENTAL COMMUNICATION Staff and members of the public have the opportunity to submit information related to an agenda item following distribution of the agenda packet to the City Council. This information is identified as “Supplemental Communication” and is assembled into a packet by the City Clerk on the day of the City Council meeting. The Brown (Open Meetings) Act requires that copies of Supplemental Communication be made available to the public immediately upon distribution of material to a majority of the City Council. Communication received by any individual at the meeting will be made available to the public in the City Clerk’s Office the following morning. AWARDS AND PRESENTATIONS Awards, presentations, and proclamations made by the Mayor on behalf of the City. The Public Information Office coordinates the arrangements with the Mayor and submits a list of presentations through the City Manager’s Office. WEB ACCESS: **REMINDER** Live Broadcast and audio and video archives can be accessed at http://huntingtonbeach.granicus.com As a courtesy to those in attendance, please silence your cell phones and pagers HB -1- PUBLIC COMMENTS This is the time of the meeting for the City Council to receive comments from the public regarding items of interest or agenda items not scheduled for Public Hearing. Pursuant to the Brown (Open Meetings) Act, the City Council may not enter into discussion regarding items not on the City Council agenda. Members of the public who wish to speak to a member of the Council on an item not on the agenda may consider setting up an individual appointment by contacting the Council's Administrative Assistant at 714-536-5553. The following statement applies to any public exchange of comments during City Council meetings: “The City Council strives to treat members of the public with respect. Comments or concerns provided by the public shall be done in a civil and respectful manner. Any public comments that are discriminatory, defamatory or otherwise not protected speech, whether as to race, religion, disability, sexual orientation, or any other protected classification, will not be considered by the City Council and may be a basis for the Mayor to interrupt the public comment. In addition, any such public comments will not be consented to, agreed to, ascribed to, or otherwise adopted by the City Council in its considerations, deliberations, discussions, and findings regarding any matter before it tonight. The City Council provides this public opportunity for free speech, but the City Council categorically rejects comments from anyone, including the public, that are of a discriminatory nature, and such comments will not inform the City Council’s decision.” To participate in Public Comments, pink Request to Speak forms are available at the Chambers entrance and are collected by the Sergeant at Arms. Each speaker is allowed 3 minutes, and time may not be donated to another speaker. COUNCIL COMMITTEE / APPOINTMENTS / LIAISON REPORTS AND ALL AB 1234 DISCLOSURE REPORTING This agenda item allows Councilmembers to make announcements regarding Council committees, appointments or liaison reports, and all individuals as appropriate to disclose any conferences, training, seminars, etc. attended at the Agency’s expense, per Government Code §53232.3(d). Lists of the conferences, training, seminars, and other activities generally attended by the City Council, City Manager, City Attorney, City Clerk, and City Treasurer are included as appendices to the City Budget. The budget is available on the city’s website at http://www.huntingtonbeachca.gov/Government/budget_information/. Exceptions to these lists have been submitted as a report to the City Clerk for inclusion in the record of this meeting.. PUBLIC HEARING Public Hearings allow citizens to speak in favor or against specific items brought to Council by staff. Staff may provide a presentation. The Mayor will open the Public Hearing to receive comments on that specific item. Upon hearing all public comments, the Mayor will close or continue the Public Hearing. Council may then decide to engage in discussion and/or take action on the item. To participate in a Public Hearing, green Request to Speak forms are available at the Chambers entrance and are collected by the Sergeant at Arms. ADMINISTRATIVE HEARING Administrative Hearings required by Huntington Beach Municipal Code Section 1.18 entitle only affected property owners to speak on a respective item. To participate in the Administrative Hearing, blue Request to Speak forms are available at the Chambers entrance and are collected by the Sergeant at Arms (the Police Officer located near the speakers’ podium). CONSENT CALENDAR Consent Calendar items are considered routine items that do not normally require separate consideration. The City Council/Public Financing Authority usually makes one motion for approval of all the items listed under this section. However, Council may remove an item from the motion for discussion purposes. ADMINISTRATIVE ITEMS Administrative Items are considered separately and require separate motions. These actions are normally of a non-routine nature, and frequently require a staff presentation. ORDINANCES Ordinances require two readings before the City Council. They are first introduced, and then adopted at a subsequent meeting. Ordinances typically become law thirty (30) days after adoption. However, an emergency ordinance may be adopted upon introduction, and is effective immediately. COUNCILMEMBER ITEMS This portion of the agenda is provided for Items of business presented by individual members of the City Council. HB -2- -1- City Council/PFA Agenda – Tuesday, September 05, 2017 FRED A. WILSON City Manager MICHAEL E. GATES City Attorney ROBIN ESTANISLAU City Clerk ALISA CUTCHEN City Treasurer AGENDA Tuesday, September 05, 2017 CITY COUNCIL/PUBLIC FINANCING AUTHORITY CITY OF HUNTINGTON BEACH 4:00 PM - Closed Session 6:00 PM - Regular Meeting Council Chambers - 2000 Main Street Huntington Beach, CA 92648 http://www.huntingtonbeachca.gov MAYOR AND CITY COUNCIL BARBARA DELGLEIZE Mayor MIKE POSEY PATRICK BRENDEN Mayor Pro Tem Councilmember JILL HARDY WILLIAM O’CONNELL Councilmember Councilmember ERIK PETERSON LYN SEMETA Councilmember Councilmember 4:00 PM - COUNCIL CHAMBERS CALL TO ORDER Mayor Pro Tem Posey has requested permission to be absent pursuant to Resolution No. 2001-54 City Clerk Robin Estanislau has requested permission to be absent pursuant to City Charter Section 310 (a) ROLL CALL O'Connell, Semeta, Posey, Delgleize, Hardy, Brenden, Peterson ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) PUBLIC COMMENTS PERTAINING TO CLOSED SESSION ITEMS (3 Minute Time Limit) RECESS TO CLOSED SESSION Mayor Delgleize to Announce: Pursuant to Government Code § 54957.6, the City Council takes this opportunity to publicly introduce and identify designated labor negotiator, City Manager Fred Wilson, who will be participating in today's Closed Session discussions regarding labor negotiations with: Huntington Beach Police Officers' Association (POA) and Management Employees' Organization (MEO). CLOSED SESSION HB -3- -2- City Council/PFA Agenda – Tuesday, September 05, 2017 1. Pursuant to Government Code § 54956.9(d)(1), the City Council shall recess into Closed Session to confer with the City Attorney regarding the following lawsuit: Sunny Kang v. City of Huntington Beach/William Brownlee, Orange County Superior Court Case No. 30-2013-00626834. 2. Pursuant to Government Code § 54956.9(d)(1), the City Council shall recess into Closed Session to confer with the City Attorney regarding the following lawsuit: Robert Hale v. City of Huntington Beach, Orange County Superior Court Case No. 30-2016-00881315. 3. Pursuant to Government Code § 54956.9(d)(1), the City Council shall recess into Closed Session to confer with the City Attorney regarding the following lawsuit: MEO v. City of Huntington Beach; PERB UPC Case N0. LA-CE-1103. 4. Pursuant to Government Code §54956.9(d)(2) the City Council shall recess into Closed Session to confer with the City Attorney regarding potential litigation. Number of cases, one (1). 5. Pursuant to Government Code § 54957, the City Council shall recess to Closed Session to discuss the following personnel matter: Assistant City Manager. 6. Pursuant to Government Code § 54957.6, the City Council shall recess into Closed Session to meet with its designated labor negotiators and Fred Wilson, City Manager regarding the following: Huntington Beach Police Officers’ Association (POA) and Management Employees' Organization (MEO). 6:00 PM – COUNCIL CHAMBERS RECONVENE CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING Mayor Pro Tem Posey has requested permission to be absent pursuant to Resolution No. 2001-54 City Clerk Robin Estanislau has requested permission to be absent pursuant to City Charter Section 310 (a) City Attorney Michael Gates has requested permission to be absent pursuant to City Charter Section 309 (d) ROLL CALL O'Connell, Semeta, Posey, Delgleize, Hardy, Brenden, Peterson PLEDGE OF ALLEGIANCE HB -4- -3- City Council/PFA Agenda – Tuesday, September 05, 2017 INVOCATION - Rev. Karen Maurer of St. Wilfrid’s Episcopal Church and member of the Greater Huntington Beach Interfaith Council In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. CLOSED SESSION REPORT BY CITY ATTORNEY AWARDS AND PRESENTATIONS Mayor Delgleize to call on Jackie Mark, Manager of Outreach & Advocacy for Alzheimer’s Orange County to recognize September as World Alzheimer's Awareness Month. Mayor Delgleize to call Chief Handy and the Huntington Beach Police & Community Foundation to present commendations to Rick Rowe, CEO and Chair Dr. Akhouli of Huntington Beach Hospital in appreciation for their contribution to public safety in the city. Mayor Delgleize to call Executive Director Diana Dehm of the Huntington Beach International Surfing Museum and present commendations to the Guinness Book of World Record’s Team Captains for "Largest Number of Surfers on a Paddle Out." Mayor Delgleize to present commendations to participants in the City’s first Citizens Academy. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) PUBLIC COMMENTS (3 Minute Time Limit) COUNCIL COMMITTEE - APPOINTMENTS - LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES CITY MANAGER'S REPORT CONSENT CALENDAR 1. Approve and adopt minutes Recommended Action: Review and adopt the City Council/Public Financing Authority regular meeting minutes dated August 7, 2017, and the City Council/Public Financing Authority regular meeting and the special meeting of the Housing Authority minutes dated August 21, 2017, as written and on file in the Office of the City Clerk. 2. Approve Fiscal Year 2016/17 Budget Adjustment for the Workers’ HB -5- -4- City Council/PFA Agenda – Tuesday, September 05, 2017 Compensation Internal Service Fund Recommended Action: Approve additional appropriation of $500,000 in the FY 2016/17 for the Self Insurance Workers’ Compensation Internal Service Fund (551). 3. Adopt Resolution No. 2017-44 amending Resolution 2016-59 which established a Consolidated Comprehensive Citywide Master Fee and Charges Schedule (Supplemental Fee Resolution 2) for parking rate modifications during the "2017 Breitling Huntington Beach Air Show" and approve the deferral of the payment for public safety/staffing costs Recommended Action: A) Adopt Resolution No. 2017-44, "A Resolution of the City Council of the City of Huntington Beach Amending Resolution 2016-59 Which Established a Citywide Schedule for Charges for Public Access and Use of Certain City Property (Supplemental Fee Resolution 2)" to temporarily increase parking/camping fees as listed in Exhibit A; and, B) Approve the deferral of payment for all public safety/staff charges to 45 days following the event (November 15, 2017). 4. Adopt Resolution No. 2017-45 approving the application for Outdoor Environmental Education Facilities Grant Funds for funding improvements to the existing Central Park Trail Recommended Action: Adopt Resolution No. 2017-45, "A Resolution of the City Council of the City of Huntington Beach Approving the Application for Outdoor Environmental Education Facilities Grant Funds." 5. Approve and authorize execution of a 10-year Lease Agreement with Kokomo's Surfside Grill, Inc., for operation of a beach concession located at the Junior Lifeguard Headquarters Recommended Action: A) Approve the "Lease Between the City of Huntington Beach and Kokomo’s Surfside Grill, a California Corporation for a Beach Food Concession on the First Floor Level of the Marine Safety Education Center;" and, B) Authorize the Mayor, City Manager, and City Clerk to execute the lease agreement and other related documents. 6. Approve and authorize execution of a three-year Services Agreement with the City of Newport Beach for Public Safety Helicopter Services Recommended Action: Approve and authorize the Mayor and City Clerk to execute the "Services Agreement for Public Safety Helicopter Support Between the City of Huntington HB -6- -5- City Council/PFA Agenda – Tuesday, September 05, 2017 Beach and the City of Newport Beach." 7. Approve and authorize execution of the Memorandum of Understanding (MOU) between the City of Huntington Beach and Visit Huntington Beach (VHB) for the Installation and Maintenance of Points of Interest Signs in the Public Right-of-Way Recommended Action: Authorize the Mayor and City Clerk to execute the "Memorandum of Understanding Between the City of Huntington Beach and Visit Huntington Beach for the Installation and Maintenance of Points of Interest Signs in the Public Right-of-Way." 8. Approve and authorize execution of Amendment No. 1 with Bucknam Infrastructure Group, Inc., in the amount of $70,000 for a total contract amount not to exceed $156,000 for Pavement Management Program Recommended Action: Approve and authorize the Mayor and City Clerk to execute "Amendment No. 1 to Agreement Between Bucknam Infrastructure Group, Inc. for Pavement Management Program," in the amount of $70,000 for a total contract amount not to exceed $156,000. 9. Approve and authorize execution of a Grant Agreement with California Office of Traffic Safety (OTS) for the Selective Traffic Enforcement Program (STEP) in the amount of $610,000 for the period 10/01/17 to 09/30/18; approve appropriations and authorize the Chief of Police to establish a separate business unit for funds Recommended Action: A) Approve and accept the "State of California – Office of Traffic Safety Grant Agreement PT18058" between the OTS and the City of Huntington Beach for $610,000; and, B) Authorize the Chief of Police to execute the grant agreement with the OTS; and, C) Approve appropriations and estimated revenue in the amount of $610,000; and, D) Establish a separate business unit for this funding and authorize the Chief of Police to expend up to a total of $610,000 plus accrued interest on the Selective Traffic Enforcement Program (STEP) grant. 10. Adopt Ordinance No. 4137 approving Zoning Text Amendment (ZTA) No. 17-001 amending Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) to amend Section 204.18 Prohibited Uses, add Section 204.20 Prohibited Uses--Commercial Non-Medical Marijuana Businesses and Deliveries, and add Section 204.22 Non-Medical Marijuana HB -7- -6- City Council/PFA Agenda – Tuesday, September 05, 2017 Cultivation Approved for Introduction August 21, 2017 - Vote: 7-0 Planning Commission and Staff Recommended Action: Adopt Ordinance No. 4137 "An Ordinance of the City of Huntington Beach Amending Title 20 of the Zoning and Subdivision Ordinance by Amending Section 204.18 and Adding Section 204.20 and Section 204.22 to the Huntington Beach Zoning and Subdivision Ordinance to Prohibit Commercial/Recreational Sales and Deliveries of Non-Medical Marijuana as well as Adopt Regulations Regarding Non-Medical Marijuana Cultivation." PUBLIC HEARING Public Hearing Item Nos. 11 and 12 are to be held concurrently 11. Public Hearing to consider adopting Resolution No. 2017-43 to adopt a Budget for the City for Fiscal Year 2017/2018 and Resolution No. 2017-21 establishing the Gann Appropriation Limit Recommended Action: A) Open the Public Hearing on the Proposed FY 2017/18 City budget appropriation of $361,244,359 as outlined in the Proposed Budget document; and, B) Adopt Resolution Number 2017-43, " A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for FY 2017/18;" and, C) Authorize the Professional Services included in the FY 2017/18 budget to be representative of the services projected to be utilized by departments in FY 2017/18; and, D) Adopt Resolution Number 2017-21, "A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for FY 2017/18" of $882,638,091; and, E) Approve adjustments to the FY 2017/18 Proposed Budget in the Funds and by the amounts contained in Attachment 2, Exhibit A-1; and, F) Approve the FY 2017/18 Proposed Budget Table of Organization as shown on Attachment 2, Exhibit D. 12. Public Hearing to Consider Accepting the Sewer Service Fund Performance Audit for Fiscal Year 2016-17 and Approve for Introduction Ordinance No. 4140 amending Chapter 14.55 of the Huntington Beach Municipal Code (HBMC) relating to Sewer Service Rates Methodology FIVE AFFIRMATIVE VOTES ARE REQUIRED TO ADOPT THIS ORDINANCE PER HEALTH AND SAFETY CODE SECTION 5471 Recommended Action: HB -8- -7- City Council/PFA Agenda – Tuesday, September 05, 2017 A) Accept the Sewer Service Fund Performance Audit for Fiscal Year 2016-17; and, B) Approve for introduction Ordinance No. 4140, "An Ordinance of the City of Huntington Beach Amending Chapter 14.55 of the Huntington Beach Municipal Code Relating to the Sewer Service Rates Methodology." 13. Adopt Resolution No. 2017-46 amending Resolution Nos. 2016-59, 2017-28 and 2017-44 establishing the Consolidated Comprehensive Citywide Master Fee and Charges Schedule (Supplemental Fee Resolution No. 3) Recommended Action: A) Conduct a public hearing regarding the Master Fee and Charges Adjustments; and, B) Adopt Resolution No. 2017-46, "A Resolution of the City Council of the City of Huntington Beach Amending Resolution Nos. 2016-59, 2017-28 and 2017-44 Establishing the Consolidated Comprehensive Citywide Master Fee and Charges Schedule (Supplemental Fee Resolution No. 3)." ADMINISTRATIVE ITEMS 14. Approve a Memorandum of Understanding (MOU) between the City and Huntington Beach Hospital to enable the Huntington Beach Hospital to participate in the 340B Program Recommended Action: Authorize the Mayor and City Clerk to execute the Memorandum of Understanding (MOU) between the City and Huntington Beach Hospital for the 340B Program. ORDINANCES FOR INTRODUCTION 15. Approve for introduction Ordinance No. 4138 amending Municipal Code Title 15 regarding oil well abandonment requirements Recommended Action: Approve for introduction Ordinance No. 4138, "An Ordinance of the City of Huntington Beach Amending Sections 15.08.010 and 15.32.090 through 15.32.120 of the Huntington Beach Municipal Code Relating to Development of Property With Abandoned Oil Wells, and Amending Related Definitions in the Municipal Code." COUNCILMEMBER COMMENTS (Not Agendized) ADJOURNMENT HB -9- -8- City Council/PFA Agenda – Tuesday, September 05, 2017 The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is Monday, September 18, 2017, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov HB -10- Minutes City Council/Public Financing Authority City of Huntington Beach Monday, August 7, 2017 4:00 PM - Council Chambers 6:00 PM - Council Chambers Civic Center, 2000 Main Street Huntington Beach, California 92648 A video recording of the 4:00 PM and 6:00 PM portion of this meeting is on file in the Office of the City Clerk, and archived at www.surfcity-hb.org/government/agendas/ 4:00 PM - COUNCIL CHAMBERS CALLED TO ORDER — 4:00 PM ROLL CALL Present: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson Absent: None ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental communications that were received by her office following distribution of the Council Agenda packet: Study Session #1: Email communication with brief bios of the presenters of the Community Choice Aggregation (CCA) Overview PowerPoint communication entitled Community Choice Aggregation (CCA) PowerPoint communication entitled CCAs and the Transformation of California's Energy System: Why Local Governments Need to Engage. Study Session #2: PowerPoint communication entitled FY 2017/2018 Capital Improvement Program (CIP). PUBLIC COMMENTS PERTAINING TO STUDY SESSION / CLOSED SESSION ITEMS (3 Minute Time Limit) — 9 Speakers The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Carol Woodworth was called to speak and stated her opposition to Study Session Item No. 1, Community Choice Aggregator (CCA), and Administrative Item No. 21, execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (00:02:07) HB -11-Item 1. - 1 Council/PFA Regular Minutes August 7, 2017 Page 2 of 23 Ron Sterud was called to speak and stated his opposition to Study Session Item No. 1, Community Choice Aggregator (CCA) and Administrative Item No. 21, execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (00:04:52) Jim Ward was called to speak and stated his support for Study Session Item No. 1, Community Choice Aggregator (CCA) and Administrative Item No. 21, execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (00:05:28) Steve Shepherd was called to speak and stated his support for Study Session Item No. 1, Community Choice Aggregator (CCA) and Administrative Item No. 21, execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (00:06:13) Kirk Nason was called to speak and stated his support for Study Session Item No. 1, Community Choice Aggregator (CCA) and Administrative Item No. 21, execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (00:09:19) Roger Gloss was called to speak and stated his support for Study Session Item No. 1, Community Choice Aggregator (CCA) and Administrative Item No. 21, execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (00:12:33) Michael Rotcher was called to speak and stated his support for Study Session Item No. 1, Community Choice Aggregator (CCA) and Administrative Item No. 21, execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (00:14:11) Dan Kalmick, business owner, H. B. homeowner, and candidate for City Council in 2018, was called to speak and stated his support for Study Session Item No. 1, Community Choice Aggregator (CCA) and Administrative Item No. 21, execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (00:16:34) Dave Sullivan, H. B. resident, was called to speak and stated he has concerns about CCAs but he is keeping an open mind to learning more about Study Session Item No. 1, Community Choice Aggregator (CCA). He also spoke in favor of providing Sunday hours at Central Library. (00:19:09) STUDY SESSION 1. Community Choice Aggregator (CCA) overview City Manager Wilson introduced Howard Choy, Retired General Manager of Sustainability, Los Angeles County, Internal Services Department, an expert in the energy industry who presented a PowerPoint communication entitled CCAs and the Transformation of California's Energy System: Why Local Governments Need to Engage with slides entitled: How Local Energy Aggregation Works, Why Join a CCA?, and Summary. Councilmember Hardy and Mr. Choy discussed why Southern California Edison (SCE) does not see Community Choice Aggregators (CCA) as a threat to their business, but as the best grid designer, operator and manager. Mayor Delgleize confirmed with Mr. Choy that CCAs are regulated by the California Public Utilities Commission (CPUC), that no re-wiring would be required to utilize a CCA, and that the selected structure would determine the need for additional City staff (if any). HB -12-Item 1. - 2 Council/PFA Regular Minutes August 7, 2017 Page 3 of 23 Councilmember O'Connell and Mr. Choy discussed that California currently is in an electric oversupply situation. Mr. Choy stated that in his experience the cost savings for cities using CCAs is approximately 5% for the overall bill. Also, from his perspective, the greatest weakness of a CCA is the "stranded" cost (difference between current utility contracts and market price) as the CCA must pay that cost difference to the utility. Discussion continued on study and start-up costs of possibly $2 - $4 Million, and operation costs that would be recouped through the rates charged. Mr. Choy stated that for a frame of reference the initial outlay would most likely be recouped within a year, but ultimately it would depend upon the gap between the CCA’s rate and the utility's rate. Councilmember Peterson and Mr. Choy discussed that to develop a smaller local project would be more expensive than the proportionate share of a large plant out of the area. It was stated that analysis of all of the numbers and options need to be considered, such as working with an existing CCA, and that there are multiple CCA models to consider. City Manager Wilson introduced Mr. Jim Phelps, Consultant, who has an engineering and construction business and expertise in rate analysis and regulatory aspects related to CCAs. Mr. Phelps presented a PowerPoint communication entitled: Community Choice Aggregation (CCA) with slides entitled: Los Angeles Community Choice Energy Authority Joint Powers Agreement, Mary Nichols, Chairman - California Air Resources Board, City of Huntington Beach CCA Workshop, Monthly Electric Bill, CCA "Generation" Pricing, Exit fee effect on CCA "Generation" Pricing, SCE exit fees...per month...a shakedown?, MCE Proposed Rates for Fiscal Year 2017/18 (2), Financial Statements, County of Los Angeles, Community Choice Energy Business Plan (2), Los Angeles Community Choice Energy Authority Joint Powers Agreement (2), Consumer Choice, Opt Out ("Choice") Controlled by CCA, 11-07- 2013 MCE board minutes, Opt Out ("Choice") telephone lines (3), CCA Opt Out, GHGs the backbone of CCA deception, CCA "Generation" - Reducing GHGs?, Renewable Energy Certificates, MCE's Annual GHG Emission Rates - Advertised, MCE's Annual GHG Emission Rates - Actual, CCAs "clean" energy, MCe (Marin Clean Energy) "Clean" Energy Volumes, Lancaster Choice Energy (6 mos. data), Mary Nichols, Chairman - California Air Resources Board, Why RECs? Summary, Addendum, Memorandum (3), California RPS Requirements as a Percent of Total Power Supply, California RPS Mandate, Default RPS Product, County of Los Angeles Community Choice Energy Business Plan (4), Los Angeles Community Choice Energy Joint Powers Agreement Public Comments and Responses, Renewable Portfolio Standard, South Bay Clean Power (3), Huntington Beach CCA - 2 options - same destination, and Marin clean energy (2). Councilmember Hardy asked why utilities appear to support CCA competition, and Mr. Phelps replied that from his information, utilities have been instructed by the California Public Utilities Commission to not discredit any CCAs. Mayor Delgleize and Mr. Phelps discussed that there are different CCA purposes, such as using more green, or renewable energy, and/or reducing rates. Councilmember Peterson and Mr. Phelps discussed the distribution of power from specific distant places such as Lancaster or Palm Springs to Huntington Beach. Both Mr. Choy and Mr. Phelps agreed that generally the power received is a big mix. Mr. Choy clarified that the Los Angeles study does not include unbundled Renewable Energy Certificates (RECs). Councilmember O'Connell and Mr. Phelps discussed the strengths of CCAs from his perspective, and that state regulators, not CCAs, are driving clean energy. HB -13-Item 1. - 3 Council/PFA Regular Minutes August 7, 2017 Page 4 of 23 Mayor Pro Tem Posey stated his appreciation to both speakers for sharing from their perspectives and he now feels more strongly that a study is necessary. Councilmember Semeta asked for a summary of specific end-user benefits. Mr. Choy stated that the ability to control rates and to meet local policies and goals can be met through a CCA. Mr. Phelps stated that from his experience and perspective, CCA recitals include statements that the California Air Resources Board (CARB) is promulgating regulations for local governments to reduce carbon emissions, and a CARB member has confirmed to him that local government regulations would only apply to a local government that owned their power plant. Mayor Pro Tem Posey stated that in his opinion this is not the time to discuss the pros and cons of CCAs but to determine whether the Council wants to proceed with a comprehensive study which would include the pros and cons. Councilmember Brenden, Mr. Choy and Mr. Phelps further discussed potential rate savings and whether savings are on the total bill or on just the generation portion of the bill. Councilmember Peterson, Mr. Phelps and Mr. Choy discussed how looking at the Non-Disclosure Agreement (NDA) provides the details necessary to project usage for long-term contracts. 2. The Public Works Department presented the proposed Capital Improvement Program for Fiscal Year 2017-2018. City Manager Wilson introduced City Engineer Tom Herbel who presented a PowerPoint communication entitled: FY 2017/2018 Capital Improvement Program (CIP) with slides entitled: HB Public Works, Design, Build, Maintain, 16/17 Highlights (3), Capital Improvement Program (CIP), FY 17/18 CIP Budget, CIP Funding by Category (New Appropriations), CIP Funding Sources (new appropriations), Facilities $1.4M (2), Facilities and Fleet Infrastructure, Neighborhood $3.6M, Parks and Beaches $4.1M (2), Sewer Improvements $4.0M, Sewer Infrastructure, Streets and Transportation $5.9M (3), Roadway Infrastructure, Transportation Infrastructure, Water Improvements $6.4M, Water Infrastructure (2), Unfunded/Deferred Project List, Budget/CIP Schedule, and Questions. Councilmember Peterson and staff discussed wayfinding signs in the City's and VisitHB's budgets. Mr. Herbel also explained that greater details will be in the budget, and this presentation was a more general overview. Councilmember Hardy asked for further details on the Council Chambers AV upgrade and Library wayfinding projects. Councilmember Semeta asked for further details to determine if better signage at the Library could possibly reduce staff time required to direct people. RECESSED TO CLOSED SESSION — 5:49 PM A motion was made by O’Connell, second Hardy, to recess to Closed Session for Items 3 — 5. With no objections, the motion carried. Mayor Delgleize Announced: Pursuant to Government Code § 54957.6, the City Council takes this opportunity to publicly introduce and identify designated labor negotiator, City Manager Fred Wilson, who HB -14-Item 1. - 4 Council/PFA Regular Minutes August 7, 2017 Page 5 of 23 will be participating in today’s Closed Session discussions regarding labor negotiations with: Huntington Beach Police Officers’ Association (POA), Huntington Beach Firefighters’ Association (HBFA), and Management Employees’ Organization (MEO). CLOSED SESSION 3. Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: George and Kathleen Pickett v. City of Huntington Beach/Steven Tilton, Orange County Superior Court Case No. 30-2014- 00754342. 4. Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: The Kennedy Commission, et al. v. City of Huntington Beach, Orange County Superior Court Case No. 30-2015-00801675, which concerns a challenge to the City Council action amending the Beach and Edinger Corridors Specific Plan. 5. Pursuant to Government Code § 54957.6, the City Council recessed into Closed Session to meet with its designated labor negotiators and Fred Wilson, City Manager regarding the following: Huntington Beach Police Officers’ Association (POA), Huntington Beach Firefighters’ Association (HBFA) and Management Employees’ Organization (MEO). 6:00 PM – COUNCIL CHAMBERS RECONVENED CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING — 6:37 PM ROLL CALL Present: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson Absent: None PLEDGE OF ALLEGIANCE — Led by Mayor Pro Tem Posey INVOCATION - Marsha Rechsteiner of Sts. Simon & Jude Catholic Church and member of the Greater Huntington Beach Interfaith Council In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. CLOSED SESSION REPORT BY CITY ATTORNEY — None AWARDS AND PRESENTATIONS Mayor Delgleize presented a check to Stephanie Deagle for $1,613 from the Huntington Beach employees for the HB Relay for Life, American Cancer Society. Ms. Deagle expressed appreciation to the employees, and especially Julie Toledo, for a successful 1960’s themed B-B-Q fundraiser. She also announced the Relay for Life fundraiser on August 12 and 13 and invited everyone to participate. Mayor Delgleize acknowledged the 4th of July Board. Pat Stier and Stacey Hoffer, Parade Directors, acknowledged the support of the City, sponsors and volunteers who all work hard for a successful event, and introduced board members Linda D. Couey, Andi Kowal, Chris Young, and Jon Ross who were in HB -15-Item 1. - 5 Council/PFA Regular Minutes August 7, 2017 Page 6 of 23 attendance, plus Linda Vircks and Karen Pedersen who were not present. Ms. Hoffer also thanked Members-at-Large Lisa Bannister, Carolyn Walls, LeeAnn, Michael Couey, and Dave Sullivan for their year-round efforts to support a successful event. Mayor Delgleize called on representatives from Orange County Mosquito and Vector Control District who presented an update on mosquito control. Mr. Rick Howard, District Manager, introduced Lori Young, Director of Communications, Bob Cummings, Director of Scientific Technical Services, Larry Shaw, Director of Operations, Michael Posey, Member of the Board of Trustees, and John Drake, the applicator who applies treatments in Huntington Beach. Mr. Howard and Ms. Young presented a PowerPoint communication entitled Partners in Protecting the Public Health of Orange County Residents since 1947, with slides entitled About the Orange County Mosquito and Vector Control District, West Nile Virus Spread – Aug. 1999 — Dec. 2004, California State West Nile Virus Surveillance System Risk Map, Mosquito Life Cycle Always Begins in Water, West Nile Virus Transmission Cycle in Orange County, Annual Patterns of Human WNV Infections in Orange County, Calif., 2004 — 2016, Created WNV “Hot Spot” Map, WNV Nile Virus High Risk Areas (2014 — 2016) Hotspot Analysis, High Risk Area 9 Cities, Mosquitoes descend on community, City of Huntington Beach Areas of Concern (2), Helicopter Larvicide Application, Huntington Beach Central Park Library and Shipley Nature Center Trap Locations, Food Channels, Parks, Gutters, Underground/Manholes, City of Huntington Beach: All “Known” Current Sources, Underground Storm Drains, Backpack, Truck-mounted, Aerial, Two Invasive Aedes Mosquitoes of Concern, Both have similar Life Cycles and Breeding Habitats, Mosquitoes Invasive Aedes, Location of Travel for Zika Cases, Materials for Distribution, Social Media, Print Messaging and Signs (2), In-Class Education, eAlerts, and Discovery Channel Documentary. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental communications that were received by her office following distribution of the Council Agenda packet: Consent Calendar: Item No. 4 - Resignation dated July 18, 2017, from Mark Bixby of his position on the Citizens Infrastructure Advisory Board. Item No. 4 - Email communications regarding proposed Ocean View School District (OVSD) representative to the Community Services Commission submitted by: Chuck Johnson, Jennifer Brannon, Cathy Haro, Derek Ugland, Thomas Ugland, Robert Gustafson, Coop Cooper, Paula Jean, Devin Ugland, Joe De Vore, Gina Clayton-Tarvin, Katheryn Clark (2), Hilarie Kelly (2), and Janice E. Ugland. Item No. 5 - Email communication regarding proposed Personnel Commission appointments and reappointments submitted by Pat Quintana. Public Hearing: Item No.15 - Notice of typographical error on page 3 of the Annual Action Plan for 2017-2018 CDBG and HOME Programs. Item No.16 - Memorandum submitted by Scott Hess, Director of Community Development dated August 3, 2017, describing a proposed change to Section 230.96(H) of the Huntington Beach Zoning and Subdivision Ordinance. The memo includes a revised copy of Ordinance No. 4136 w/legislative draft. Item No.16 - PowerPoint communication submitted by Scott Hess, Director of Community Development dated August 7, 2017, and entitled Zoning Text Amendment No. 2017-003- Small Cell Sites. HB -16-Item 1. - 6 Council/PFA Regular Minutes August 7, 2017 Page 7 of 23 Item No.16 – Revised PowerPoint communication submitted at the meeting. Item No. 16 - Email communication submitted by Jeff Morin entitled Wireless ZTA Conflicts. Administrative Items: Item No. 17 - Email communications regarding the Three-Month Report on Organic Chemical Pilot Study at West Central Park: Mary Ann Celinder, Mary Nason, Carol Keane, Karen Coyne, Brendon Perkins, Tim Kowal, Pam Kamps (2), and Cynthia Romanowski. Item No. 18 - PowerPoint communication entitled Adopt Resolution No. 2017-42, Downtown Alcohol and Live Entertainment, August 7, 2017. Item No. 21 - Email communications regarding the Community Choice Aggregator Non-Disclosure Agreement with Southern California Edison submitted by: Kirk J. Nason, Karen Coyne, Richard Morris, Pam Kamps, Mary Ann Celinder, Beth Webb, Mary Nason, Carol Keane and Sophie Wolfram. PUBLIC COMMENTS (3 Minute Time Limit) The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Ralph Bauer was called to speak and asked that the City support concerts in Central Park presented by the Huntington Beach Concert Band. He also requested that the City underwrite the $2,000 to $3,000 cost of erecting the band shell, and that this item be a future agenda item that the City Council votes on. (02:26:21) HoiYin, representing the Sierra Club, Coastkeepers, Surfriders, Help Your Harbour and Zero Trash, was called to speak and shared support for the California Statewide Trash Policy which mandates zero trash in all waterways in ten years. She encouraged the City to continue to follow the Track 1 options and add the Track 2 options. She also offered assistance in monitoring trash that escapes, writing grant requests, and developing a plan to track trash sources. (02:28:15) Karen Coyne was called to speak and stated her support of Administrative Item No. 17 regarding the Organic Chemical Pilot Study at West Central Park; Track 1 of the California Statewide Trash Policy with plans to eliminate all trash in all waterways; and Administrative Item No. 21 regarding Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (02:30:51) Andi Kowal was called to speak and thanked the City Council for acknowledging the July 4th Board and their successful event. She continued speaking as a Founder of Non-Toxic HB, and shared some facts related to Administrative Item No. 17, the Organic Chemical Pilot Study at West Central Park. (02:33:53) Karen Jackle, President, Huntington Beach Tomorrow, and Public Policy for the American Association of University Women (AAUW), was called to speak and stated her support of Administrative Item No. 17 related to Organic Chemical Pilot Study at West Central Park, for a healthy environment. She also reviewed Proposition 65 signage requirements when toxic chemicals are used. (02:37:14) Julie Bixby was called to speak and stated her support of Consent Calendar Item No. 4, regarding the appointment of her husband Mark as Ocean View School District Representative to the Community Services Commission. (02:40:24) HB -17-Item 1. - 7 Council/PFA Regular Minutes August 7, 2017 Page 8 of 23 John Briscoe, Ocean View School District Trustee, was called to speak and thanked the Huntington Beach Police Department and First Responders for exemplary work when he was recently hit by a car while riding his bicycle. He also voiced concerns related to the General Plan Update and Environmental Impact Report currently in process, specifically plans for high density, low-income apartments and zone changes that will impact school districts. He concluded by stating his support for Consent Calendar Item No. 4 - appointment of Mark Bixby as Ocean View School District Representative to the Community Services Commission. (02:42:16) Garry Brown, Founder and President, Orange County Coastkeepers (OCC), was called to speak and shared some facts related to the California Statewide Trash Policy which mandates zero trash in all waterways in ten years. He announced September 16 as Annual Ocean Clean-up Day and stated there will be six clean-up sites in Huntington Beach. He encouraged the City to apply for Measure M funds through the Orange County Transportation Authority (OCTA) Environmental Clean-up Allocation Committee for trash clean-up. (02:45:30) Jim Ruziecki was called to speak and stated his support for Councilmember Items No. 22 regarding a Community Meeting on Airport Noise Issues. (02:49:06) Bruce Allen was called to speak and stated his support for Councilmember Items No. 22 regarding a Community Meeting on Airport Noise Issues. (02:50:37) Harley Rouda, 48th Congressional District Candidate, was called to speak and stated that he looks forward to working on local issues such as bringing in good, high-paying jobs, keeping housing affordable, addressing homelessness, and bringing more Federal dollars back to the 48th District. (02:52:58) Mario Tabernig was called to speak and asked that the City Council write a letter of complaint to Mr. Dennis Roberts, Regional Administrator, Western Pacific Region, Federal Aviation Administration regarding the excessive Long Beach Airport noise issues. (02:54:07) Amory Hanson, Huntington Beach City Council candidate in 2018, was called to speak and stated his concerns about a resolution related to election of a Mayor. In his opinion, a mayor pro tem should not be penalized by being forced to give up his term in the rotation if he is required to step into the position of Mayor mid-term. (02:56:48) Joe DeVore was called to speak and voiced his opposition to Consent Calendar Item No. 4 regarding the appointment of the Ocean View School District Representative to the Community Services Commission (CSC). (02:59:07) Dan Jamieson was called to speak and stated his support for Administrative Item No. 17 regarding the Organic Chemical Pilot Study at West Central Park. (03:01:00) Ken Mattocks was called to speak and stated his support for Council Member Item No. 22 regarding a Community Meeting on Long Beach Airport noise issues. (03:01:43) Chris Kawahara was called to speak and stated her support for Administrative Item No. 17 regarding the Organic Chemical Pilot Study at West Central Park; Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE); and for Track 1 for the California Statewide Trash Policy which mandates zero trash in all waterways in ten years. (03:04:32) HB -18-Item 1. - 8 Council/PFA Regular Minutes August 7, 2017 Page 9 of 23 Steve Shepherd was called to speak and stated his support for Administrative Item No. 17 regarding the Organic Chemical Pilot Study at West Central Park, and for Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:05:41) Connie Betz was called to speak and stated her support for Council Member Item No. 22 regarding a Community Meeting on Long Beach Airport noise issues. (03:09:01) Ellen Jacobs was called to speak and stated her support of Administrative Item No. 17 regarding the Organic Chemical Pilot Study at West Central Park, and for Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:10:27) Dianne Thompson, HB Chamber, Government Affairs Committee, was called to speak and stated support for Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:10:51) Linda Kraemer was called to speak and stated support for Administrative Item No. 17 regarding the Organic Chemical Pilot Study at West Central Park, and for Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:11:54) Tim Kowal, HB Tomorrow and Non-Toxic HB, was called to speak and stated support for Administrative Item No. 17 regarding the Organic Chemical Pilot Study at West Central Park. (03:13:22) Kirk Nason was called to speak and stated his support for Administrative Item No. 17 regarding the Organic Chemical Pilot Study at West Central Park, and for Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:15:55) Roger Gloss, resident of Rancho Santa Margarita, was called to speak and stated his support for Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non- Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:18:13) Michael I. Rotcher, resident of Mission Viejo, was called to speak and stated his support for Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non- Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:20:19) Jim Ward, resident of Rancho Santa Margarita, was called to speak and stated his support for Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non- Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:22:03) Richard Plummer, Downtown Huntington Beach resident, was called to speak and voiced opposition to Administrative Item No. 18 regarding Resolution No. 2017-42, which modifies the City's guidelines and standard list of conditions of approval applicable to eating and drinking establishments with alcoholic beverage sales and/or live entertainment located in Downtown Specific area, District 1. (03:24:30) Victor Valladares, Oak View ComUNIDAD, was called to speak and stated his support for Consent Calendar Item No. 4 regarding the appointment of the Ocean View School District Representative to the Community Services Commission (CSC). (03:27:54) HB -19-Item 1. - 9 Council/PFA Regular Minutes August 7, 2017 Page 10 of 23 Spencer Hagaman, resident of Huntington Beach, was called to speak and shared of his plans to leave for Yale University before the next City Council meeting, and took this opportunity to thank the City Council for doing their job. (03:30:05) Cari Swan was called to speak and stated her opposition to Administrative Item No. 21 regarding execution of the Community Choice Aggregator (CCA) Non-Disclosure Agreement (NDA) with Southern California Edison (SCE). (03:31:52) COUNCIL COMMITTEE - APPOINTMENTS - LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES Councilmember Brenden reported attending the OC Forum luncheon, a Public Cable Television Authority Board meeting, a Downtown Business Improvement District (BID) meeting, the OC Tax luncheon, meeting with the Huntington Beach Police Officers' Association (HBPOA), conducted interviews to fill vacancies on the Children's Needs Task Force (CNTF), and attended a 4th of July Executive Board meeting. In addition, the Ad Hoc Committee on Homelessness met with Beach Cities Interfaith Services (BCIS) and a representative from CityNet, had a Committee meeting, toured a single-room occupancy facility in Huntington Beach, and attended the Association of California Cities - Orange County (ACC-OC) Continuum of Care tour. Councilmember Semeta reported attending the OCTax luncheon. Mayor Pro Tem Posey reported meeting with Huntington Beach Police Officers' Association (HBPOA) members as well as members of the Huntington Beach Firefighters' Association (HBFA). Councilmember Hardy reported a telephone conversation with the Huntington Beach Firefighters' Association (HBFA), and receiving a letter of resignation from a member of the Citizen Participation Advisory Board (CPAB), stating that she has not yet decided on a new appointment. Mayor Delgleize reported attending a Cybersecurity Task Force meeting, and shared that she will be participating in the 2017 Mayors' Challenge, an initiative to help U.S. city leaders develop inventive ideas that tackle today's toughest problems, and an opportunity to win $5 million. Councilmember Peterson reported that the Historical Resources Board is still looking for applicants, and that he attended a meeting of the 4th of July Board. Councilmember O'Connell reported attending a Housing and Community Development Board of Directors meeting, he also met with members of the Huntington Beach Firefighters' Association (HBFA) and members of the Huntington Beach Police Officers' Association (HBPOA). 1. Council Report/Appointment of a Voting Delegate and Alternate to the League of California Cities Annual Conference and Business Meeting A motion was made by Hardy, second Brenden to appoint Mayor Pro Tem Posey to serve as the voting delegate and Councilmember Billy O'Connell as alternate, to represent the City of Huntington Beach at the 2017 League of California Cities Annual Conference and Annual Business Meeting, scheduled for September 13-15, 2017. The motion carried by the following vote: HB -20-Item 1. - 10 Council/PFA Regular Minutes August 7, 2017 Page 11 of 23 AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None CITY MANAGER’S REPORT — None CITY TREASURER’S REPORT 2. Received and Filed the City Treasurer’s June 2017 Quarterly Investment Summary Report City Treasurer Cutchen presented a PowerPoint communication entitled: Quarterly Treasurer's Report with slides entitled: Market Overview - At 6/30/17 , Bond Basics, Portfolio Summary, Investments by Type, Monthly Earnings - July 2016 to June 2017, Portfolio Earnings - As of June 30, 2017, and Compliance. A motion was made by O’Connell, second Semeta to receive and file the City Treasurer's Quarterly Investment Report for June 2017, pursuant to Section 17.0 of the Investment Policy of the City of Huntington Beach. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None CONSENT CALENDAR Mayor Pro Tem Posey pulled Items 4, 6, and 7 for further discussion. 3. Approved and adopted minutes A motion was made by Brenden, second O’Connell to review and adopt the City Council/Public Financing Authority regular meeting minutes dated July 17, 2017, as written and on file in the office of the City Clerk. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 4. Denied appointment of the Ocean View School District Representative to the Community Services Commission (CSC) with a term to expire June 30, 2018, as recommended by the local School District - continued from July 17, 2017 meeting Mayor Pro Tem Posey stated that the City Ordinance states that college and public school districts may recommend representatives for City Council commissions, and his recommendation is to not approve Mr. Bixby. Councilmember Hardy stated that if Mr. Bixby is not approved for the Community Services Commission, she intends to ask him to continue to serve on the Citizen Participation Advisory Board. A motion was made by Hardy, second O’Connell to appoint Mark Bixby, Ocean View School District Representative, to a term of July 1, 2017 to June 30, 2018. HB -21-Item 1. - 11 Council/PFA Regular Minutes August 7, 2017 Page 12 of 23 The motion failed by the following vote: AYES: O’Connell, and Hardy NOES: Semeta, Posey, Delgleize, Brenden, and Peterson 5. Approved the reappointment of Marcie Edwards and Phillis Lane and the appointment of Katherine Elford to the Personnel Commission (PC) with terms to expire June 30, 2019, as recommended by City Council Liaisons Semeta and O’Connell A motion was made by Brenden, second O’Connell to approve the reappointment of Marcie Edwards and Phillis Lane and the appointment of Katherine Elford to the Personnel Commission with terms effective July l, 2017, through June 30, 2019, as recommended by City Council Liaisons Semeta and O'Connell. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 6. Awarded and authorized execution of a construction contract with Environmental Construction, Inc. in the amount of $2,194,188 for the Well 9 GAC Filtration System Hydrogen Sulfide Reduction Project, CC-1392; and, approved an appropriation in the amount of $2,060,000 Mayor Pro Tem Posey pulled this item and asked Director of Public Works Travis Hopkins to give an overview of the project which will allow re-use of an existing water well and will help clean up the aquifer. Additionally, Orange County Water District (OCWD) has agreed to reimburse the City's costs over upcoming years. A motion was made by Posey, second Brenden to appropriate $2,060,000 from the undesignated Water Master Plan Fund (507) balance to Business unit 50791029.82100; and, accept the lowest responsive and responsible base bid submitted by the Environmental Construction, Inc. in the amount of $2,194,188; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 7. Awarded and authorized execution of a construction contract with Harry H. Joh Construction, Inc. in the amount of $454,729.35 for the 1st Street and Atlanta Parking Lot, CC-1395; and, authorized an appropriation in the amount of $25,000 and approved up to 15% in construction change orders Mayor Pro Tem Posey pulled this item to state that this project is an example of how in-lieu parking fees are used. City Manager Wilson elaborated on this project and stated that it will create additional Downtown parking spaces. A motion was made by Posey, second Brenden to appropriate $25,000 from the In-Lieu Parking Downtown Fund undesignated fund balance to account 30888101.82800; and, accept lowest responsive and responsible bid submitted by Harry H. Joh Construction, Inc. in the amount of $454,729.35; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City HB -22-Item 1. - 12 Council/PFA Regular Minutes August 7, 2017 Page 13 of 23 attorney; and, authorize the Director of Public Works to approve up to fifteen percent (15%) in construction change orders. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 8. Awarded and authorized execution of a construction contract with California Building Evaluation & Construction Inc. in the amount of $1,693,535 for the Peck Reservoir Pump Station Electrical Upgrades Project, CC-1420 A motion was made by Brenden, second O’Connell to accept the lowest responsive and responsible base bid submitted by the California Building Evaluation & Construction Inc., in the amount of $1,693,535; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 9. Awarded and authorized execution of a construction contract with Sancon Engineering, Inc. in the amount of $331,478.20 for the FY 2016/17 Sewer Rehabilitation Project, CC-1544; and, approved an appropriation in the amount of $40,000 A motion was made by Brenden, second O’Connell to authorize the appropriation of $40,000 from the Sewer Fund undesignated fund balance to Sewer Fund Account No. 51189002.82600; and, accept the lowest responsive and responsible bid submitted by Sancon Engineering, Inc. in the amount of $331,478.20; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 10. Adopted Resolution No. 2017-25 establishing a policy for the naming of City Parks, Park Features, and Community Facilities and repealing conflicting resolutions A motion was made by Brenden, second O’Connell to adopt Resolution No. 2017-25, "A Resolution of the City Council of the City of Huntington Beach Establishing a Policy for the Naming of City Parks, Park Features, and Community Facilities and Repealing Conflicting Resolutions." The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 11. Adopted Resolution No. 2017-33 authorizing adoption of a Capital Improvement Program (CIP) for years 2017/18 through 2023/24 to comply with Measure M requirements for Orange County Transportation (OCTA) funding HB -23-Item 1. - 13 Council/PFA Regular Minutes August 7, 2017 Page 14 of 23 A motion was made by Brenden, second O’Connell to adopt Resolution No. 2017-33, "A Resolution of the City Council of the City of Huntington Beach Adopting a Capital Improvement Program for the Years 2017/2018 Through 2023/2024 for Compliance with Renewed Measure M Eligibility Requirements." The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 12. Adopted Resolution No. 2017-35 confirming reports of cost for weed abatement on private property within the City – 2017 season; and, directed charges be certified to the Orange County Property Tax Roll A motion was made by Brenden, second O’Connell to adopt Resolution No. 2017-35, "A Resolution of the City Council of the City of Huntington Beach Confirming the Report of the Public Works Director Regarding the Cost for Weed Abatement on Private Property within the City for the 2017 Season;" and, direct that all charges listed thereon be certified to the Orange County 2017/18 Property Tax Roll. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 13. Adopted Resolution No. 2017-37 amending the City’s Classification Plan by approving the Modified Classification Titles of Information Systems Technician and Information Systems Analyst to Information Technology Technician and Information Technology Analyst and adding a new Classification of Senior Telecommunications Technician A motion was made by Brenden, second O’Connell to adopt Resolution No. 2017- 37, " A Resolution of The City Council of The City of Huntington Beach Amending The City's Classification Plan by Amending The Titles of Information Systems Technician to Information Technology Technician; Information Systems Analyst to Information Technology Analyst and Adding a New Job Classification of Senior Telecommunications Technician." The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 14. Approved and authorized execution and recordation of a Landscape License Agreement with Miramar GP, LP for the Marriott Springhill Suites Project at 7872 Edinger Avenue A motion was made by Brenden, second O’Connell to approve and authorize the Mayor and City Clerk to execute and record the "License Agreement Between the City of Huntington Beach and Miramar GP, LP, to Provide Installation and Maintenance of Landscaping and Landscaping Improvements in the Public Right-of-Way" for the Marriott Springhill Suites Project. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson HB -24-Item 1. - 14 Council/PFA Regular Minutes August 7, 2017 Page 15 of 23 NOES: None PUBLIC HEARING 15. Approved the 2017-2018 Annual Action Plan for Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) Programs and authorized the City Manager to sign the Application for Federal Assistance Funds City Manager Wilson introduced Economic Development Project Manager Simone Slifman who presented a PowerPoint communication entitled Public Hearing to Approve 2017-2018 Annual Action Plan for HUD Funding with slides entitled: 2017-18 CDBG Allocations, CDBG Allocation Process, 2017- 18 CPAB Recommendations for Community Development Block Grant Funding, Public Services: 15% Cap (3), Public Improvements, Admin/Housing/Code Enf/108:, 2017/18 HOME, and Next Steps. (03:55:40) Mayor Delgleize opened the Public Hearing for this item. City Clerk Robin Estanislau announced there were no speakers. There being no public speakers, Mayor Delgleize closed the Public Hearing. (04:05:07) A motion was made by O’Connell, second Hardy to approve the 2017-2018 Annual Action Plan for Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) Program funds; and, authorize the City Manager to sign any and all applications and necessary documents for federal assistance under the CDBG and HOME programs after review by the City Attorney, as amended to include a correction identified in Supplemental Communication. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, and Brenden NOES: Peterson 16. Approved for introduction Ordinance No. 4136 amending Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) relating to Wireless Communication Facilities (Small Cell Sites), Zoning Text Amendment (ZTA) No. 17-003 City Manager Wilson introduced Community Development Planning Aide Nicolle Bourgeois who presented a PowerPoint communication entitled Zoning Text Amendment No. 2017-003 Small Cell Sites with slides entitled: Zoning Text Amendment No. 2017-003 Request:, What is a Small Cell Site?, Current Review Process, Proposed Wireless Permit Review Process for Small Cell Sites, Proposed City Design Standard #1, Proposed City Design Standard #1 Example, Proposed City Design Standard #2, Proposed City Design Standard #2 Example, Proposed City Design Standard #3, Proposed City Design Standard #3 Example, Proposed City Design Example #4, ZTA No. 2017-003 Analysis, and Planning Commission and Staff Recommendation. (04:06:08) Councilmember Peterson asked, and Ms. Bourgeois confirmed, that the equipment is an underground vault for Proposed Design Standard #1. Mayor Delgleize and Ms. Bourgeois discussed that the Proposed Standards will be used to evaluate Small Cell Site requests before they are approved. HB -25-Item 1. - 15 Council/PFA Regular Minutes August 7, 2017 Page 16 of 23 Councilmember Peterson and staff discussed that this Ordinance would require an encroachment permit but not a license agreement or easement. (04:09:58) Mayor Delgleize opened the Public Hearing. City Clerk Robin Estanislau announced that there was one (1) public speaker. Mr. Dan Kalmick, Planning Commissioner, was called to speak and stated his support for Item 16 regarding the introduction of Ordinance No. 4136 amending Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) relating to Wireless Communication Facilities (Small Cell Sites). He further stated that this is a hedge against SB649 to maintain local control for wireless attachments to public facilities and speed up the process. Mr. Kalmick also stated that the Planning Commission voted unanimously for this, and that the major wireless carriers had submitted extensive details only about 30 minutes before that meeting and their general comments were to encourage the City to implement SB649. There being no other public speakers, Mayor Delgleize closed the Public Hearing. (04:11:32) A motion was made by O’Connell, second Peterson, to find the proposed project statutorily exempt from the California Environmental Quality Act (CEQA) pursuant to City Council Resolution No. 4501, Class 20, which supplements the California Environmental Quality Act; and, approve Zoning Text Amendment (ZTA) No. 17-003 with findings for approval and after the City Clerk reads by title, approve for introduction Ordinance No. 4136, "An Ordinance of the City of Huntington Beach Amending Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance Relating to Wireless Communication Facilities Zoning Text Amendment (ZTA) No. 17-003," as amended by Supplemental Communication. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None ADMINISTRATIVE ITEMS 17. Received and Filed Three-Month Status Report on Organic Chemical Pilot Study at West Central Park City Manager Wilson introduced Denny Bacon, Maintenance Operations Manager, who presented a PowerPoint communication entitled Organic Pesticide 3 Month Status Report with slides entitled: Current Maintenance Responsibilities, Landscapes Practices, Council Direction, Option 1 - Application of Organic Chemicals in the ROW and City Parks, Option 2 - Application of Organic Chemicals in the ROW and Chemical Free in City Parks, Option 3 - Manual Weed Abatement & Chemical Free Application, and Next Steps. Councilmember Peterson and staff discussed that the cost of $540,000 presented is the quote from the vendor, and that current labor and product costs would be subtracted from that amount for the new actual cost. Councilmember Hardy asked for clarification related to Proposition 65 requirements for posted notices when certain chemicals are being used. Councilmember Hardy stated that $500,000 is expensive, but she believes it will result in a benefit. She requested that the next three-month report include a HB -26-Item 1. - 16 Council/PFA Regular Minutes August 7, 2017 Page 17 of 23 presentation by a scientific expert, an answer on Prop 65 posted notice requirements, along with any updates from Maintenance. Mayor Delgeize confirmed with Mr. Bacon that this pilot project is related to weed abatement and finding alternatives to glyphosate. Councilmember Brenden asked Mr. Bacon if it would be possible to determine weed abatement cost by type of location, i.e., tot play areas, playing fields, and parks vs. street medians and sidewalks. Mr. Bacon said that the costs would probably go down to the $250,000 to $300,000 range to just use manual labor in the parks, but continue to use chemicals on right-of-ways, sidewalks and alleys. Councilmember Brenden stated that he sees this as a high priority item, and suggested that the City Council look for items in the budget that could be put aside for a year so funds could be available for reducing chemicals for weed abatement. Councilmember Brenden also asked that his questions be addressed in the next report, including what current protocol is when spraying Roundup, method(s) used to alert the public and if Roundup is used only for spot treatments, or for wide area broadcast; and, does application option change according to the area (lawn, tot area, playing field, etc.) being treated. Mr. Bacon responded that the City follows the Integrated Pest Management plan, including registering every chemical used with the State Ag Commission, and apply chemicals accordingly. Some of the guidelines are early morning and no wind. He further explained that Roundup is not a chemical that is broadcast like watering a lawn, but is used for spot treatments for specific weeds. Councilmember Hardy expressed her interest in seeing the questions that Councilmember Brenden asked being addressed in the next report, and also suggested that the median on Main Street be treated without toxic chemicals. She further asked if the City could get any "credits" for eliminating toxins in runoff which could end up in the ocean. Mayor Delgleize and Mr. Bacon discussed that any chemical used, whether organic or not, needs to be dry before any animals or people are allowed in the area. Mr. Bacon further explained that going organic will take a cultural adjustment for residents as there will be more weeds visible, especially after any major rains. Councilmember O'Connell voiced concerns about chemicals moving into the food chain and believes going organic is a priority item. He agrees with the issues and concerns raised by his fellow Councilmembers and also looks forward to hearing from the scientific experts. Councilmember Semeta asked if it might be wise to not spend on "chemicals being used" signage until a final determination on where and when organic chemicals may be used. Councilmember Brenden asked that the cost for Prop 65 signage be provided in the next report. A motion was made by Hardy, second O’Connell to include in the next 3-month status report informational items as discussed: that the report be written to allow an expansion of area for study; request scientist participation; information on City impacts of Proposition 65 including costs for signage; consider immediate use of organic chemicals in park areas accessed by children, but normal chemical practices in right-of-way areas; a Roundup action plan; posting temporary alerts (signage) during chemical application; identify any credit the City may receive for use of organic chemicals; information on spot spraying; and identify any unintended consequences of using organic versus regular pesticides. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson HB -27-Item 1. - 17 Council/PFA Regular Minutes August 7, 2017 Page 18 of 23 NOES: None 18. Adopted Resolution No. 2017-42, which modifies the City’s guidelines and standard list of conditions of approval applicable to eating and drinking establishments with alcoholic beverage sales and/or live entertainment located in Downtown Specific Plan area, District 1 Councilmember O'Connell recused himself because of his business interest in Legends, located in the Downtown area, and left the dais. City Manager Wilson introduced Planning Manager Jane James who presented a PowerPoint communication entitled: Adopt Resolution No. 2017-42 Downtown Alcohol and Live Entertainment with slides entitled: Background, Location, Recent Council Direction, Proposed Modifications (2), Recommendation and Questions. Councilmember Brenden and Manager James discussed the decision making hierarchy and confirmed that the City Council can rescind any decision made by a Zoning Administrator or the Planning Commission if deemed necessary. Councilmember Hardy expressed her opposition to the motion only because she believes that all deviations should come to City Council in order for proper transparency. Mayor Delgleize and Police Chief Handy discussed that this Resolution does strengthen the process when a revocation of a CUP is necessary, and it also should assist the Downtown business improvements process. Chief Handy also confirmed that the crime rate is higher in the Downtown district just because of the business nature of the area and concentration of people, especially if compared to a mostly residential district. Councilmember Brenden believes this Resolution will reduce some of the burden on business owners who want to make modifications and provides logical guidelines for changes that can be made without necessarily requiring a new Conditional Use Permit (CUP). Mayor Pro Tem Posey shared that he believes this Resolution will allow for current business hours to remain in place and incentivize Downtown businesses to remodel their buildings. He sees this as also providing Police Chief Handy with the tools to revoke a CUP if necessary. Councilmember Hardy stated her understanding that general building remodels would no longer be a deviation and therefore would not come before the Council. Councilmember Semeta stated that in her opinion this Resolution provides business hour flexibility which is important in attracting and keeping businesses. A motion was made by Brenden, second Posey to adopt Resolution No. 2017-42, "A Resolution of the City Council of the City of Huntington Beach Establishing Conditions of Approval for Eating and Drinking Establishments With Alcoholic Beverage Sales and Live Entertainment," which modifies the City's guidelines and standard list of conditions of approval applicable to eating and drinking establishments with alcoholic beverage sales and/or live entertainment located in Downtown Specific Plan area, District 1 (Exhibits A and B). The motion carried by the following vote: AYES: Semeta, Posey, Delgleize, Brenden, and Peterson NOES: Hardy HB -28-Item 1. - 18 Council/PFA Regular Minutes August 7, 2017 Page 19 of 23 RECUSE: O’Connell 19. Adopted Resolution No. 2017-38 approving and implementing the Memorandum of Understanding (MOU) between the Surf City Lifeguard Employees’ Association (SCLEA) and the City of Huntington Beach for October 1, 2015, through December 31, 2017 City Manager Wilson introduced Director of Human Resources Michele Warren who presented a PowerPoint communication entitled: SCLEA Memorandum of Understanding, containing slides entitled: Bargaining Unit Information, SCLEA Wage and Market Data, and Tentative Agreement/MOU. A motion was made by Hardy, second Brenden to adopt Resolution No. 2017-38, "A Resolution of the City Council of the City of Huntington Beach Approving and Implementing the Memorandum of Understanding between the City and the Surf City Lifeguard Employees' Association (SCLEA) for October 1, 2015, through December 31, 2017." The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 20. Approved the Tentative Agreement and Adopted Resolution No. 2017-39 approving and implementing the Memorandum of Understanding (MOU) between the Huntington Beach Firefighters’ Association (HBFA) and the City of Huntington Beach for July 1, 2017, through June 30, 2018 City Manager Wilson introduced Human Resources Manager Michele Warren who presented a PowerPoint communication entitled: HBFA — Tentative Agreement/MOU. Councilmember Peterson expressed his opposition because of the staffing language that is included. In his opinion staffing levels should be determined by management, not by an MOU. , Mayor Pro Tem Posey and Fire Chief Segura discussed that it would not be an effective model to try and upgrade Emergency Medical Technicians or non-sworn medics. Chief Segura further described the model response teams for engines and ambulances. Councilmember Semeta stated her opposition to this MOU because in her opinion the Fire Chief should have the tools to manage the Department and mandatory staffing levels should not be included in a contract. Councilmember O'Connell and Fire Chief Segura discussed the ideal staffing model to provide adequate safety for the public and firefighters. Councilmember Hardy asked Fire Chief Segura if he prefers four-man teams or three-man teams. Fire Chief Segura responded that the 4/0 staffing model is the most efficient for Huntington Beach during peak load hours. A motion was made by Hardy, second O’Connell to approve the Tentative Agreement between the City of Huntington Beach and the Huntington Beach Firefighters' Association; and, adopt Resolution No. 2017-39, "A Resolution of the City Council of the City of Huntington Beach Approving and Implementing the Memorandum of Understanding Between the Huntington Beach Firefighters' Association and the City of Huntington Beach for the period July 1, 2017 through June 30, 2018." HB -29-Item 1. - 19 Council/PFA Regular Minutes August 7, 2017 Page 20 of 23 The motion carried by the following vote: AYES: O’Connell, Posey, Delgleize, Hardy, and Brenden NOES: Semeta, and Peterson 21. Approved and authorized execution of the Community Choice Aggregator (CCA) Non- Disclosure Agreement (NDA) with Southern California Edison (SCE) City Manager Wilson introduced this item for Council direction. Mayor Pro Tem Posey stated that this item is only to approve the Non-Disclosure Agreement (NDA), not to debate the merits of a Community Choice Aggregator (CCA), and he supports proceeding with a study. Councilmember Peterson shared his concerns that Huntington Beach is wrongly named as a CCA in the NDA. Additionally, a consultant has not even been selected so it is not clear who will be receiving, and responsible for, the data from Southern California Edison. Councilmember Peterson stated that the NDA states that the CCA (City of Huntington Beach) is liable for the data, and discussed with City Attorney Gates available options if a public records request was made to the City. Councilmember Peterson further stated that he currently doesn't believe providing utility choices should be a City Council responsibility. Mayor Delgleize and City Attorney Gates further discussed the broad nature of the NDA, and the potential conflict of disclosing Southern California Edison data in staff reports that are considered public record. Councilmember Hardy stated that in her opinion a proper feasibility study report would include Power Charge Indifference Adjustment (PCIA) costs unless that remains an unknown until the California Public Utilities Commission (CPUC) decides what the differential is between obligated costs and what a CCA would offer. She would also need a feasibility study report to address Renewable Energy Certificates (RECs) and potential changes from AB1110. Councilmember Hardy suggested that possibly the City's lobbyist could provide details on AB1110. She stated her support for a feasibility study but until she has answers to these types of questions she could not support a CCA vote. Councilmember Semeta stated several concerns after hearing the speakers and at this time is opposed to proceeding with the NDA. Councilmember Semeta further stated that she is currently inclined to wait for some longer-term experiences of existing CCAs to see if cost savings continue to be realized over time. Also, she would like to better understand exactly what a feasibility report will provide, such as will it help determine whether Huntington Beach should consider joining a regional CCA. Mayor Pro Tem Posey, Councilmember Semeta and Mayor Delglieze discussed at which point the study elements are decided. Councilmember O'Connell and City Attorney Gates discussed possible legal risks, and the fact that the City and SCE have basically reached an impasse on the terminology in the NDA and SCE has provided a side letter to explain their position. Councilmember O'Connell stated his current support for the NDA and proceeding to a feasibility study, but if there is not a significant cost discount expected he would not support going any further in the process. Councilmember Brenden and City Attorney Gates further discussed the SCE side letter which basically states that SCE will not be rigid in terms of interpretation and will support the City's efforts to move HB -30-Item 1. - 20 Council/PFA Regular Minutes August 7, 2017 Page 21 of 23 forward without running into legal quandaries. City Attorney Gates advised that a side letter is not an amendment to, nor an extension of, the NDA. The side letter would be brought in as evidence by the City if there was ever a court dispute on the NDA. Councilmember Brenden and City Attorney Gates discussed that other cities considering CCAs have had the same public records concerns that this Council has, but many have decided to move ahead as they apparently think the risk is minimal. Councilmember Hardy shared that for the Study Session discussion, three (3) of the nine (9) speakers were not from Huntington Beach, and they were evenly split between support of or opposition/concerns about CCAs. In the reconvened meeting, the public speakers who addressed this issue but did not speak at the Study Session are known well enough as City residents and Councilmember Hardy believes that most speakers on this topic are from Huntington Beach. A motion was made by Posey, second Brenden to approve and authorize the Mayor and City Clerk to execute the "Community Choice Aggregator Non-Disclosure Agreement" with Southern California Edison. The motion carried by the following vote: AYES: O’Connell, Posey, Delgleize, Hardy, and Brenden NOES: Semeta, and Peterson COUNCILMEMBER ITEMS 22. ***ITEM PULLED FROM CONSIDERATION***Submitted by Mayor Delgleize and Councilmember Brenden - Community Meeting on Airport Noise Issues Mayor Delgleize and Councilmember Brenden pulled this item to formulate a more precise action based on the recently acquired information and will bring it back in a couple of weeks. Councilmember Brenden stated that it has just been discovered that the FAA is currently under a gag order because of existing lawsuits and therefore cannot attend a community workshop; however, Congressman Dana Rohrabacher's District Director Kathleen Staunton has offered to conduct a small group meeting on the topic. Ms. Staunton has worked on this issue since 2006 and the FAA is one of her specialties. 23. Approved as amended item submitted by Councilmember O’Connell — Direct staff to install permanent informational signs to pay tribute and honor members of law enforcement killed in the line-of-duty within the city boundaries Councilmember O'Connell introduced this item as a way to pay tribute to law enforcement staff who have sacrificed their lives in the line of duty within the City's boundaries. Councilmember Peterson suggested this item be amended to ask staff to provide details such as cost, sign ideas and input on location. He also stated that the Fire Department Union paid for the Fire Department monument and asked if the Police Union will be paying for these proposed tributes. Councilmember Brenden stated that this is a good idea, but he would also like to see staff return with options and cost estimates for both individual sites and a central location like City Hall. Councilmember Hardy expressed concerns about location because both Pacific Coast Highway and Beach Boulevard are under CalTrans which could make it challenging to place signs. She suggested that HB -31-Item 1. - 21 Council/PFA Regular Minutes August 7, 2017 Page 22 of 23 one central location, such as the existing City Hall memorial area, be considered. She also suggested providing an opportunity for the community to contribute to the costs. An amended motion was made by O’Connell, second Hardy to form an Ad Hoc Committee of Council members O'Connell, Hardy and Brenden to work with City staff, the Huntington Beach Police Officers' Association and the Orange County Sheriff's Department to identify options to install permanent informational signs that pay tribute and honor members of law enforcement that have been killed in the line of duty within the City boundaries of Huntington Beach and present findings at the September 18 City Council meeting. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None COUNCILMEMBER COMMENTS (Not Agendized) Mayor Pro Tem Posey reported attending two days of the U. S. Open of Surfing. Councilmember Brenden thanked City employees for their successful 60's themed fundraiser which produced a donation of over $1,600 for the American Cancer Society. He also stated his appreciation to the 4th of July Board for another very successful event. He congratulated the Council on Aging for the gala celebrating the First Anniversary of the Senior Center, and he thanked Randy Pesqueira and his entire staff for their support of seniors throughout the year. He reported attending the Wetlands Clean-Up Day at Bolsa Chica Conservancy (sponsored by County Supervisor Michelle Steel), the Women of Surfing Art & History preview and reception, the International Surf Museum fundraiser Art4Katie, Chamber of Commerce Golf Tournament, City Manager/City Council Annual OC Fair Dinner, Eagle Court of Honor for six (6) Eagle Scouts and three (3) Gold Award Girl Scouts, Marina High School Golf Program tournament, Surfing Walk of Fame Induction Ceremony, and the Huntington Beach Junior Lifeguards Pancake Breakfast. He reminded everyone to not miss the upcoming event on Saturday, August 19, sponsored by Boy Scout Troop No. 1, to celebrate 100 Years of Scouting in Huntington Beach at Lake Park. He thanked Huntington Beach Public Art Alliance co-founders Kim Kramer and Barbara Haynes for spearheading Dumpsters on Parade, a project showcasing the artwork of local artists on 30 dumpsters to be placed in Downtown Huntington Beach. He acknowledged Republic Services for providing refurbished and primered dumpsters for the local artists to decorate. Councilmember Hardy congratulated all of the surfers recognized at the Walk of Fame and Hall of Fame. She reported attending the Senior Center Anniversary Gala, and the 2nd Annual Surf City Pickleball Tournament at Murdy Park. Councilmember Semeta reported attending both the Surfing Walk of Fame and Hall of Fame. Mayor Delgleize reported attending many of the same events that Councilmember Brenden attended. The Women of Surfing - Art & History Reception and meeting the "real" Gidget was especially memorable for her. ADJOURNMENT — 10:31 PM to the next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority on Monday, August 21, 2017, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. HB -32-Item 1. - 22 Council/PFA Regular Minutes August 7, 2017 Page 23 of 23 ______________________________________ City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach and Secretary of the Public Financing Authority of the City of Huntington Beach, California ATTEST: ______________________________________ City Clerk-Secretary ______________________________________ Mayor-Chair HB -33-Item 1. - 23 Minutes City Council/Public Financing Authority and Special Meeting of the Housing Authority City of Huntington Beach Monday, August 21, 2017 4:00 PM - Council Chambers 6:00 PM - Council Chambers Civic Center, 2000 Main Street Huntington Beach, California 92648 A video recording of the 4:00 PM and 6:00 PM portion of this meeting is on file in the Office of the City Clerk, and archived at www.surfcity-hb.org/government/agendas/ 4:00 PM - COUNCIL CHAMBERS CALLED TO ORDER — 4:01 PM ROLL CALL Present: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson Absent: None ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental communications that were received by her office following distribution of the Council Agenda packet: Study Session No. 1 PowerPoint communication submitted by Chief Financial Officer Lori Ann Farrell Harrison, entitled Fiscal Year 2017/18 Proposed Budget, "Taking Care of Business.” Email communication regarding the City Budget received from Richardson Gray. Study Session No. 2 PowerPoint communication submitted by the Community Development Department entitled General Plan Update. PUBLIC COMMENTS PERTAINING TO STUDY SESSION / CLOSED SESSION ITEMS (3 Minute Time Limit) — 1 Speaker The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Dave Sullivan was called to speak and stated his support for Study Session Item 1, specifically Costs for Central Library Sunday Hours, and encouraged Councilmembers to set priorities so Sunday hours become a reality as soon as possible. (00:01:43) HB -34-Item 1. - 24 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 2 of 24 STUDY SESSION 1. FY 2017/18 Proposed Budget Presentation including Discussion of Costs for Central Library Sunday Hours and Wayfinding, Downtown Parking Structure Wayfinding, and Council Chamber AV Upgrade City Manager Wilson introduced Finance Budget Manager Carol Molina-Espinoza who presented a PowerPoint communication entitled Fiscal Year 2017/18 Proposed Budget, 'Taking Care of Business' with slides entitled: Overview, Taking Care of Business, FY 2017/18 Proposed Budget, FY 2017/18 General Fund Highlights, FY 2017/18 General Fund Overview, Public Safety, Public Safety - Police, Public Safety - Fire, Quality of Life, Economic and Financial Sustainability, Fee Modifications, CalPERS Discount Rate Change, Capital Improvement Program, Capital Improvement Program (All Funds), Downtown Parking Structure Wayfinding Plan, Downtown Parking Structure Wayfinding Project, Council Chamber Audio/Video Technology Upgrade, Project Overview, Audio/Video Technology Challenges, City Council Chamber Audio/Video Technology Upgrade, Library Sunday Hours Options, History of Sunday Hours, Existing Operating Hours, Scenario #1 - Add 4 Hours on Sunday, Scenario #2 - Shifting Hours, Scenario #3 - Reduce Hours (5 Hour Overall Reduction), Options for Council Consideration, Library Directional Signage and Wayfinding Project, Overview, Central Library, Directional Signage Phases, Central Library, Children's Program, FY 2017/18 Proposed Budget Calendar, and FY 2017/18 Proposed Budget. Councilmember Hardy and Chief Information Officer (CIO) Behzad Zamanian discussed which parts of the projects are just cosmetic vs. what is required to stay up-to-date technologically. CIO Zamanian clarified that the dollar amounts shown represent the highest possible cost and that vendors have not yet been selected. Councilmember Semeta enquired regarding Public Cable Television Authority (PCTA) reimbursement for a portion of this project. CIO Zamanian described the Council Chamber audio system as very old which creates both operational and Americans with Disabilities Act (ADA) compliance issues, and stated PCTA may cover up to $30,000 in costs. Councilmember Peterson questioned pricing on portions of the project which seem very high to him. He requested more options be presented on the project, and suggested that "wants" vs. "needs" should be clarified. City Manager Wilson stated that staff would review the Councilmember comments and come back with options which the Council could pick and choose from in order to save some money while complying with ADA regulations. Mayor Delgleize suggested that the PCTA Liaison inquire about reimbursement possibilities. She also voiced her support for the project. Director of Library Services, Stephanie Beverage, presented the Library's portion of the Budget PowerPoint communication regarding Sunday hours and offered three possible scenarios for Council to consider. Mayor Delgleize and Director Beverage discussed the Library is usually always busy regardless if it is 9 a.m. or 9 p.m. Director Beverage stated it is a real challenge to provide adequate services with reduced resources. Mayor Pro Tem Posey expressed his opinion on the importance of libraries even in the internet age, and discussed with Director Beverage the status of Mariner's Church and the financial effect of them vacating HB -35-Item 1. - 25 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 3 of 24 use of the facility. Director Beverage further stated that it would take a bit of time to ramp up to offering Sunday hours, and negotiations are in process with another church for using the Central Library on Sundays. Councilmember Hardy stated she does not support reducing library hours any other day of the week to provide for Sunday hours. Councilmember Semeta asked if staggered operating hours could be considered and Director Beverage stated that this could potentially be a disservice for various reasons. Councilmember Peterson and Director Beverage discussed that currently all library branches are working with reduced resources, so it would not be feasible to consider shifting resources from one to another in order to add Sunday hours at Central Library with no other changes. Councilmember O'Connell and Director Beverage discussed the Mariner's contract which is expected to terminate at the end of September. Councilmember O'Connell expressed his willingness to hold off on spending for Council Chamber upgrades and using the funds for offering Sunday hours at Central Library, stating his preference for Option 1 or 2. City Manager Wilson explained that there is another funding source for one-time Council Chamber upgrades in the Equipment Replacement Budget which currently has about $100,000 set aside for unforeseen equipment breakdowns. Councilmember Brenden concurred with other Councilmember opinions to support Sunday hours, and recognized that the Council Chamber project is a one-time expense whereas expanding Central Library hours is an ongoing expense. He and Director Beverage discussed possible income from Sunday theater performances. Director Beverage stated there are currently two performing organizations that are in discussions with the City. City Manager Wilson stated that the Council will have options to act upon at the Budget workshop. Director Beverage presented PowerPoint slides on Central Library Wayfinding options, and stated that these options are built on top of the other technology changes that have been implemented to provide an efficient and fast customer experience. Councilmember O'Connell and City Manager Wilson discussed the timeframe for Council action on the issue of Central Library Sunday hours. Councilmember Peterson and Chief Financial Officer Farrell discussed that the Sports Complex bonds are about a couple of years away from being paid off. Councilmember Peterson and Director of Community Services Janeen Laudenback discussed the lifespan of artificial turf (10 to 15 years), and that one of the four sports complex fields has been replaced. 2. Staff provided a status update on the General Plan Update and reported on the outcome of the August 15, 2017, Planning Commission public hearing City Manager Wilson introduced Planning Manager Jennifer Villasenor who presented a PowerPoint communication entitled General Plan Update with slides entitled: General Plan Approach, Draft General Plan, and Planning Commission Action. HB -36-Item 1. - 26 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 4 of 24 Councilmember Peterson and Manager Villasenor discussed the two (2) elements beyond the State required seven (7) as being Coastal Zone, and Public Services and Infrastructure. She further explained that the Councilmembers have the update that was issued in May and the Planning Commission updates will be provided soon. Manager Villasenor suggested that any Councilmember questions or changes should be submitted before the action meeting. RECESSED TO CLOSED SESSION — 5:20 PM A motion was made by O'Connell, second Hardy, to recess to Closed Session for Items 3 — 6. With no objections, the motion carried. Mayor Delgleize Announced: Pursuant to Government Code § 54957.6, the City Council takes this opportunity to publicly introduce and identify designated labor negotiator, City Manager Fred Wilson, who will be participating in today's Closed Session discussions regarding labor negotiations with: Huntington Beach Police Officers' Association (POA). CLOSED SESSION 3. Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: Sunny Kang v. City of Huntington Beach/William Brownlee, Orange County Superior Court Case No. 30- 2013-00626834. 4. Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: Robert Hale v. City of Huntington Beach, Orange County Superior Court Case No. 30-2016-00881315. 5. Pursuant to Government Code § 54956.9(d)(1), the City Council recessed into Closed Session to confer with the City Attorney regarding the following lawsuit: MEO v. City of Huntington Beach; PERB UPC Case N0. LA-CE-1103. 6. Pursuant to Government Code § 54957.6, the City Council recessed into Closed Session to meet with its designated labor negotiators and Fred Wilson, City Manager regarding the following: Huntington Beach Police Officers’ Association (POA). 6:00 PM – COUNCIL CHAMBERS RECONVENED CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING AND CALLED TO ORDER THE SPECIAL MEETING THE HUNTINGTON BEACH HOUSING AUTHORITY — 6:19 PM ROLL CALL Present: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson Absent: None PLEDGE OF ALLEGIANCE — Led by Councilmember Hardy INVOCATION - Deacon Tom Concitis of St. Mary's by the Sea Roman Catholic Parish and member of the Greater Huntington Beach Interfaith Council HB -37-Item 1. - 27 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 5 of 24 In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. CLOSED SESSION REPORT BY CITY ATTORNEY City Attorney Gates announced that Closed Session Item Nos. 3–5 were not discussed, and will be continued to the next regular meeting of September 5, 2017. AWARDS AND PRESENTATIONS Mayor Delgleize called on Orange County District Attorney Tony Rackauckas who presented an update on the Human Exploitation and Trafficking (HEAT) Unit. Orange County District Attorney Tony Rackauckas stated that Huntington Beach is a beautiful and safe place to live, but there are human trafficking concerns not only globally but also locally. In 2013 a Human Trafficking Unit was established for Orange County which treats the slaves as victims and goes after the slave owners. This effort has resulted in the prosecution of approximately 250 people. District Attorney Rackauckas introduced Senior Deputy District Attorney Brad Shawnlaven who provided some human trafficking statistics and ways that the issue is being addressed. D. A. Shawnlaven also reviewed what is still needed to help more victims reclaim their lives. Mayor Delgleize presented commendations to Eco Dogs & Cats and Salome’s Cleaning Services for their participation in the Sustainable Business Certification Program. Mayor Delgleize called on Huntington Beach Council on Aging President Ed Pinchiff who promoted the upcoming Senior Saturday on September 9. Huntington Beach Council on Aging (HBCOA) is a nonprofit that supports many of the programs and activities at the Senior Center. The September 9th event at Pier Plaza will include vendors that provide services and/or products to enhance the lives of senior residents. Mayor Delgleize called on Community Development Building Division Manager Mark Carnahan, who presented the Mayor’s Award to the Building Division’s Principal Plumbing, Mechanical Inspector and Plan Checker Frank Biangone. Manager Carnahan described Frank as someone who epitomizes everything required of a successful Inspector/Plan Checker. Frank consistently goes over the top to be supportive, knowledgeable, helpful and courteous to everyone. Frank has also trained his colleagues in plumbing and mechanical during his 18 years with the City of Huntington Beach. Mayor Delgleize delivered a public message to reaffirm the City’s policy on human dignity. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental communications that were received by her office following distribution of the Council Agenda packet: City Manager's Report Item #1 PowerPoint communication submitted by Police Chief Handy entitled Body Worn Camera Report. Consent Calendar Agenda Item #16 - Email communication regarding conversion of temporary parking lot to a permanent parking lot in Huntington Central Park received from Steve Engel. HB -38-Item 1. - 28 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 6 of 24 Administrative Items Agenda Item #22 - Communication received from Kellee Fritzal, Deputy Director of Business Development, submitting a response from the Downtown Business Improvement District regarding the IDA panel recommendations. Agenda Item #22 - PowerPoint communication dated August 21, 2017, entitled IDA Advisory Panel. Councilmember Items Agenda Item #24 - Communications regarding the change in the composition of the Community Services Commission received from: Julie Bixby, Judy Gustafson, Amory Hanson, Hilarie Kelly, and Lola Aodh. Agenda Item #25 - Communications regarding the Breitling Air Show received from: State Senator Janet Nguyen, Assemblymember Matthew Harper, Judy Gustafson, and the Downtown Business Improvement District Board. Agenda Item #26 - A presentation entitled Huntington Beach Short-Term Rental Alliance. Agenda Item #26 - Communication from Peter Whittingham, Curt Pringle and Associates. PUBLIC COMMENTS (3 Minute Time Limit) The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Michelle Steele, Chairwoman, Orange County Supervisors, was called to speak and stated her support of Councilmember Item No. 25 regarding City Support for the 2017 Breitling Huntington Beach Air Show, and thanked Mayor Pro Tem Posey and Councilmember Brenden for making this a priority. (01:52:09) Tim Whitacre, Marine Corps Veteran and resident of Orange County, was called to speak and stated support of Councilmember Item No. 25 regarding City Support for the 2017 Breitling Huntington Beach Air Show. (01:53:02) Regina Larson was called to speak and shared her first-hand experience with neighborhood drug trafficking issues. As a long-time resident she has observed an increasing problem including residence and car break-ins and abandoned vehicles left on the streets. Mayor Delgleize asked Ms. Larson to complete a blue card for follow-up. (01:55:45) Joe Carchio was called to speak and voiced his opposition to Consent Calendar Item No. 14 regarding the Police Department Parking Lot Expansion Project, and stated his belief there can be a more positive solution without destroying open space. (01:59:07) Kathryn Levassiur was called to speak and stated her support of Councilmember Item No. 26 regarding a Short-Term Rentals Community Workshop. (02:01:04) Amory Hanson, candidate for Huntington Beach City Council in 2018, was called to speak and stated opposition to Councilmember Item No. 24 regarding Change to Composition of the Community Services Commission. (02:02:26) HB -39-Item 1. - 29 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 7 of 24 Joe Pedick and his wife Kathleen presented a short video on the Labour of Love Music Festival, inviting everyone to come and enjoy their 5th Annual Festival scheduled for Saturday, September 2, from 11:00 am to 5:00 pm at Bolsa Chica State Beach. (02:05:15) John Briscoe, Public School Trustee but speaking as a private citizen, expressed his opposition to Councilmember Item No. 24 regarding the Change in Composition of the Community Services Commission. (02:08:23) Daniel A. Page, Executive Director, Aerospace Education Foundation of Huntington Beach, was called to speak and stated support of Councilmember Item No. 25 regarding City Support for the 2017 Breitling Huntington Beach Air Show. (02:11:51) Dr. Michael Simons, President of the Huntington Beach Union High School District Board of Trustees, and former member of the Community Services Commission from 1992 to 2000, was called to speak and expressed his opposition to Councilmember Item No. 24 regarding the Change in Composition of the Community Services Commission. (02:12:57) Pat Byers was called to speak and shared personal experiences in support of Councilmember Item No. 26 regarding a Short-Term Rentals Community Workshop. (02:14:55) Cheryl Johnson was called to speak and stated concerns about the eroding lake bank in West Central Park at Lake View Drive. She expressed her opinion that the erosion will just expand and become a more costly repair if not included in the 2017/18 Budget. (02:17:51) James Ward was called to speak and expressed his opposition to Public Hearing Item No. 21, Introduction of Ordinance No. 4137 regarding approving Zoning Text Amendment (ZTA) No. 17-001. (02:20:59) Shirley Dettloff, former Mayor and one of the authors of the City Council’s 1996 Declaration of Policy about Human Dignity, was called to speak and thanked Mayor Delgleize for her comments regarding human dignity. The Human Relations Task Force, which included students representing all of the high schools, was formed to work with the Police Department to become a City where intolerance is unacceptable. (02:22:24) Ralph Bauer, former Mayor one of the authors of the City Council’s 1996 Declaration of Policy About Human Dignity, was called to speak and shared that unfortunately outsiders can come to your town and create a situation that becomes very unpleasant. He thanked the City Council for renewing the commitment to human dignity, and stated that Huntington Beach is the only city in Orange County with a Human Relations Task Force. Mr. Bauer also voiced his support of Public Hearing Item No. 21, Introduction of Ordinance No. 4137 approving Zoning Text Amendment (ZTA) No. 17-001. (02:25:29) Kelly Miller, CEO and President, Visit Huntington Beach, was called to speak and stated support of Councilmember Item No. 25 regarding City Support for the 2017 Breitling Huntington Beach Air Show. (02:28:21) Mario Tabernig was called to speak and acknowledged his support for City Manager's Report No. 2, regarding Long Beach Airport Noise. Mayor Delgleize asked him to complete a blue card for follow-up. (02:31:57) HB -40-Item 1. - 30 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 8 of 24 Jessica Robinson was called to speak and shared concerns related to property values, health, safety and welfare affected by telecommunications equipment being installed in residential neighborhoods, and asked the City Council to revoke Verizon's Conditional Use Permit (CUP). Councilmember Hardy thanked Speaker Robinson for speaking up, and in response to the Verizon CUP issue announced that the current Senate Bill 649, if passed, would remove the City's ability to address these types of issues. She asked that individuals interested in this topic write to their State officials to express their concerns. (02:33:10) Craig Robinson, Physician, was called to speak and shared concerns related to property values, health, safety and welfare affected by telecommunications equipment being installed in residential neighborhoods, and asked the City Council to revoke Verizon's Conditional Use Permit (CUP). (02:36:47) Brian Gallogly, President, Quantum Automation, was called to speak and shared concerns related to property values, health, safety and welfare affected by telecommunications equipment being installed in residential neighborhoods, and asked the City Council to revoke Verizon's Conditional Use Permit (CUP). (02:39:46) Jeff McKea was called to speak and shared concerns related to property values, health, safety and welfare affected by telecommunications equipment being installed in residential neighborhoods, and asked the City Council to revoke Verizon's Conditional Use Permit (CUP). (02:42:05) Alexis Reeves was called to speak and shared concerns related to property values, health, safety and welfare affected by telecommunications equipment being installed in residential neighborhoods, and asked the City Council to revoke Verizon's Conditional Use Permit (CUP). (02:44:27) Robert Corona was called to speak and shared concerns related to property values, health, safety and welfare affected by telecommunications equipment being installed in residential neighborhoods, and asked the City Council to revoke Verizon's Conditional Use Permit (CUP). (02:46:08) Barbara Haynes, co-Founder, Huntington Beach Public Art Alliance was called to speak and provided an update on the Dumpsters on Parade project for Saturday, October 7th. She explained that the Main Street Art Show will run from 10 AM to 5 PM, with a Parade at 10 AM, Ceremony at 10:30 AM and Art Show from 11 AM to 5 PM. She also thanked Police Chief Handy for his leadership in the community. (02:49:19) Shari Engel was called to speak and stated her support of Consent Calendar Item No. 16 regarding the plan to convert the temporary lot at Huntington Park west into a permanent parking lot. (02:50:51) Randy Edwards was called to speak and stated his support for the Huntington Beach Police Officers' Association (HBPOA), and voiced concerns about the issue of increasing homelessness and crime within the City. (02:51:20) Jeff DeYoung, City of Huntington Beach resident and business owner, was called to speak and stated his support for the HBPOA and voiced concerns about the issue of increasing homelessness and crime within the City and lack of proper police officer resources. (02:53:13) Miguel Prieto, HBPOA Member, was called to speak and stated his support for the Association. (02:54:13) HB -41-Item 1. - 31 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 9 of 24 David Humphreys, President, HBPOA, was called to speak and stated some facts in support of the position for the HBPOA’s vote of no-confidence in Police Chief Handy. (02:56:59) Yasha Nikitin, Vice President, HBPOA, was called to speak and stated his support for the Association. (03:00:08) Steve Engel, long-time resident and Central Park volunteer, was called to speak and stated his support of Consent Calendar Item No. 16 regarding the plan to convert the temporary lot at Huntington Park west into a permanent parking lot, and also asked for improvements at Irby Park. (03:03:10) Bob Franck was called to speak and shared personal experiences in support of Councilmember Item No. 26 regarding a Short-Term Rentals Community Workshop. (03:04:38) Dennis Hashin, Retired Member of the HBPOA, was called to speak and described the actual historical numbers of working officers. He further stated that statistics show that violent crime is increasing. (03:07:07) Juana Mueller was called to speak and stated her support of Consent Calendar Item No. 16 regarding the plan to convert the temporary lot at Huntington Park west into a permanent parking lot. (03:10:09) Jean Nagy was called to speak and stated her support of Consent Calendar Item No. 16 regarding the plan to convert the temporary lot at Huntington Park west into a permanent parking lot. (03:10:31) Betty Reinertson was called to speak and stated her support of Consent Calendar Item No. 16 regarding the plan to convert the temporary lot at Huntington Park west into a permanent parking lot. (03:12:11) Adrienne Low was called to speak and stated her support of Chief Handy and City Manager's Report No. 1 regarding Body Worn Cameras. (03:12:38) Shayna Lathus, HB Huddle Member, was called to speak and stated her support of Chief Handy, his successful efforts in the Oak View Community, and City Manager's Report No. 1 regarding Body Worn Cameras. (03:14:07) Roy Miller, Commissioner, Community Services Commission, was called to speak and expressed his opposition to Councilmember Item No. 24 regarding the Change in Composition of the Community Services Commission. (03:15:05) Pete Brunner, President, Rotary Club of Huntington Beach, was called to speak and stated support for Chief Handy and his community outreach. (03:17:39) Cat Hendron, Huntington Beach Tree Society Volunteer, was called to speak and stated her support of Consent Calendar Item No. 16 regarding the plan to convert the temporary lot at Huntington Park west into a permanent parking lot. She also stated her opinion that there should be fewer bars in the Downtown area, and that she supports legalized marijuana. (03:18:55) Mark Currie, President, Greater Huntington Beach Interfaith Council (GHBIC), was called to speak and read GHBIC's statement of support regarding homelessness. Mr. Currie also stated GHBIC's interest in continuing to work with the City in resolving homeless issues. (03:20:31) HB -42-Item 1. - 32 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 10 of 24 Victor Valladares, Oak View ComUNIDAD was called to speak and stated his support for Chief Handy, specifically for the increased trust in police that the Chief’s actions have generated within the Oak View community. Mr. Valladares further stated that in his opinion, hiring more officers is not the only solution to reducing crime, and he encouraged the City Council to remain fiscally conservative. (03:22:54) Niko Portante was called to speak and stated his opposition to Public Hearing Item No. 21, Introduction of Ordinance No. 4137 approving Zoning Text Amendment (ZTA) No. 17-001. (03:26:04) Bridget Kaub, Vice Chair, Community Services Commission, was called to speak and stated her support of Consent Calendar Item No. 16 regarding the plan to convert the temporary lot at Huntington Park west into a permanent parking lot. She also expressed her opposition to Councilmember Item No. 24 regarding the Change in Composition of the Community Services Commission. (03:28:26) Connie Betz was called to speak and stated her support for City Manager's Report No. 2, regarding Long Beach Airport Noise. (03:31:41) Bobbi Ashurst was called to speak and stated opposition to Councilmember Item No. 25 regarding City Support for the 2017 Breitling Huntington Beach Air Show. Ms. Ashurst also stated her support for legalized marijuana. (03:34:01) Mike Elliott was called to speak and stated support for Councilmember Item No. 26 regarding a Short- Term Rentals Community Workshop. (03:37:16) Rob Searcy, Verizon Wireless Consultant, was called to speak and stated that Verizon is listening to the concerns shared by residents, and is considering what they hope will be an acceptable alternative. He further explained that the home specifically aff ected by this project did not have its current configuration when Verizon's project started several years ago. Mayor Delgleize thanked Mr. Searcy and Verizon for quickly responding to the situation, and Mr. Searcy stated that Verizon wants to remain a good corporate community citizen. (03:37:57) Bob Bolen was called to speak and stated his opposition to Administrative Item No. 22 regarding the International Downtown Association Panel Recommendations of June 2017. (03:40:28) COUNCIL COMMITTEE - APPOINTMENTS - LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES Councilmember Hardy reported meeting with the Huntington Beach Police Officers' Association (HBPOA), and attending the Coastal Cities Issues Group meeting. Mayor Pro Tem Posey reported attending Vector Control Board of Trustees and Finance Committee meetings. Councilmember Brenden reported attending a Public Cable Television Authority (PCTA) Board meeting, the Downtown BID Board meeting, and two meetings of the Ad Hoc Committee on Homelessness. Mayor Delgleize reported attending an Orange County Transit Authority (OCTA) Board meeting, and two meetings of the Ad Hoc Committee on Homelessness. Councilmember Semeta reported attending the PCTA Board meeting. HB -43-Item 1. - 33 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 11 of 24 Councilmember O'Connell reported speaking with members of the Huntington Beach Police Officers' Association (HBPOA). CITY MANAGER’S REPORT 1. Police Department Update on Body Worn Cameras City Manager Wilson introduced Police Chief Handy who presented a PowerPoint communication entitled Body Worn Camera Report with slides entitled: Body Worn Camera Program, Body Worn Camera, Police Officer BWC Survey, Question 1, Question 2, Question 3, Question 4, Question 5, Question 6, Short Answer Question, Positive Responses, Negative Responses, Technical Solutions, Body Worn Camera Data, Arrests, Reports, Use of Force, Other Departments, O.C. District Attorney's Office, Next Steps, and Questions? Mayor Pro Tem Posey discussed with Chief Handy the recommendation to use body cameras during any enforcement contact. 2. Update on community meeting regarding Long Beach airport noise issues City Manager Wilson informed Council and the public that Congressman Rohrabacher's Office plans to host a community meeting on Long Beach Airport Noise. Individuals interested in more details can either email City.Council@surfcity-hb.org or phone 714-536-5202. CITY ATTORNEY’S REPORT 3. City Attorney Gates reported that City of Huntington Beach v. James Ishihara, et al. (MMD at 8162 Talbert), Case No. 30-2017-00933769, was filed on 7/25/17. CONSENT CALENDAR Councilmember Hardy pulled Consent Calendar Item No. 14 for further discussion. Councilmember O'Connell pulled Consent Calendar Item Nos. 7, 8, and 19 for further discussion. Councilmember Peterson pulled Consent Calendar Item No. 7 for further discussion. 4. Approved Appointments and Reappointments to the Children’s Needs Task Force (CNTF) A motion was made by Posey, second Semeta to approve the appointment of student representatives Tiffanie Lin and Dominique Sardinas to a first one-year term of September 1, 2017, to June 30, 2018; and, approve the appointment of adult representative Cynthia Varnell to a first four-year term of September 1, 2017, to August 31, 2021; and, accept the resignation of Tiffany Johnson and approve the appointment of adult representative Joslin de Diego to fill the partial term of September 1, 2017, to August 31, 2019; and, approve the reappointment of adult representative Linda Cornejo to a second four-year term of September 1, 2017, to August 31, 2021; and, approve the reappointment of adult representative Dona Cardona to a first four-year term of September 1, 2017, to August 31, 2021. Cardona will be completing a partial term which fulfilled a previous vacancy through August 2017. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson HB -44-Item 1. - 34 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 12 of 24 NOES: None 5. Approved four reappointments to the Library Board of Trustees with terms to expire in June 2017; and additional terms effective July 1, 2017 through June 30, 2020, as recommended by City Council Liaisons O’Connell and Peterson A motion was made by Posey, second Semeta to approve the reappointment of Dionne Cox, Betty Croteau, Don Lewis and Ben Miles with terms to expire in June 2017; and additional terms effective July 1, 2017, through June 30, 2020. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 6. Approved the recommendation from the Community Services Commission (CSC) to name the Beach Public Services Center (BPSC) in honor of Delbert “Bud” Higgins A motion was made by Posey, second Semeta to approve the Community Services Commission recommendation to name the Beach Public Services Center as "The Delbert "Bud" Higgins Beach Public Services Center." The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 7. Approved Annual Report and Fiscal Year 2017-2018 Huntington Beach Auto Dealers Business Improvement District Budget and Adopted Resolution No. 2017-31 declaring the City’s Intention to levy an annual assessment for Fiscal Year 2017-2018 within the Huntington Beach Auto Dealers Business Improvement District; and scheduled a Public Hearing for September 18, 2017 Councilmember O'Connell pulled this item to state that he owns property in the area, recused himself, and left the dais. Councilmember Peterson pulled this item to state that as previously requested of the Downtown Business Improvement District (DBID), the Annual Report should include detailed financials showing income and expenses. A motion was made by Peterson, second Posey to adopt City Council Resolution 2017-31, "A Resolution of the City Council of the City of Huntington Beach Declaring the City's Intention to Levy an Annual Assessment Within the Huntington Beach Auto Dealers Association Business Improvement District for Fiscal Year 2017-2018," including Exhibit A - Auto Dealers BID Annual Report, and Exhibit B - Auto Dealers BID Member List; and, direct the City Clerk to schedule a public hearing to be held on September 18, 2017, and send copies of the Resolution of Intention and assessment formula to each business to be assessed and publish the same in a newspaper of general circulation, as amended to request that the Auto Dealers Association Business Improvement District provide a financial report for inclusion in the September 18, 2017, public hearing agenda report. HB -45-Item 1. - 35 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 13 of 24 The motion carried by the following vote: AYES: Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None RECUSED: O’Connell 8. Approved Annual Report and Fiscal Year 2017-2018 Huntington Beach Downtown Business Improvement District Budget and Adopted Resolution No. 2017-29 declaring the City’s intention to levy an annual assessment for Fiscal Year 2017-2018 within the Huntington Beach Downtown Business Improvement District, and scheduled a public hearing for September 18, 2017 Councilmember O'Connell pulled this item to state that he has a business interest in Legends and therefore recused himself, and left the dais. A motion was made by Hardy, second Posey to adopt Resolution No. 2017-29, "A Resolution of the City Council of the City of Huntington Beach Declaring the City's Intention to Levy an Annual Assessment for Fiscal Year 2017-2018 Within the Huntington Beach Downtown Business Improvement District," including Exhibit A - Huntington Beach Downtown Business Improvement District 2016-2017 Annual Report, Exhibit B - Assessment Schedule, Boundary Map and List of Businesses to be Assessed, and Exhibit C - Types of Improvements and Activities to be funded by the levy of assessments on businesses within the Business Improvement Area; and, direct the City Clerk to schedule a public hearing to be held on September 18, 2017, and send copies of the Resolution of Intention, including the BID Boundary Map and assessment formula to each business to be assessed, and publish same in a newspaper of general circulation. The motion carried by the following vote: AYES: Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None RECUSED: O’Connell 9. Released Guarantee & Warranty Bond for Tract 17238 and Tract 17239 (Fairwind and Truewind Subdivisions) A motion was made by Posey, second Semeta to release Guarantee & Warranty Bond No. PB03010401486-M (Attachment 2) and instruct the City Clerk to notify TRI Pointe Homes, Inc. (the subdivider of Fairwind Subdivision Tract 17238) and the City Treasurer to notify Philadelphia Indemnity Insurance Company, of this action; and, release Guarantee & Warranty Bond No. PB03010401245-M (Attachment 3) and instruct the City Clerk to notify TRI Pointe Homes, Inc. (the subdivider of Truewind Subdivision Tract 17239) and the City Treasurer to notify Philadelphia Indemnity Insurance Company, of this action. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 10. Awarded and authorized execution of a construction contract with Beador Construction Company, Inc. in the amount of $833,700.00 for the Magnolia Street Bridge Preventive HB -46-Item 1. - 36 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 14 of 24 Maintenance, CC-1448; and, approved an appropriation of funds to the Bridge Preventive Maintenance Program grant fund account A motion was made by Posey, second Semeta to accept the lowest responsive and responsible bid submitted by Beador Construction Company, Inc., in the amount of $833,700.00; and, appropriate $1,021,960 in grant funds to BPMP grant account 97085001.82800; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 11. Awarded and authorized execution of a construction contract with Beador Construction Company, Inc. in the amount of $866,300.00 for the Brookhurst Street Bridge Preventive Maintenance, CC-1449; and, approved an appropriation of funds to the Bridge Preventive Maintenance Program grant fund account A motion was made by Posey, second Semeta to accept the lowest responsive and responsible bid submitted by Beador Construction Company, Inc., in the amount of $866,300.00; and, appropriate $80,000 from the Gas Tax (207) undesignated fund balance to account 20790010.82800; and, appropriate $1,188,719 in grant funds to BPMP grant account 97085001.82800; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 12. Awarded and authorized execution of a construction contract with MMC, Inc. in the amount of $4,001,361 for the Edgewater Sewer Lift Station Project, CC-1515 A motion was made by Posey, second Semeta to accept lowest responsive and responsible bid submitted by MMC, Inc. in the amount of $4,001,361; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 13. Awarded and authorized execution of a construction contract with All American Asphalt in the amount of $2,285,562.00 for the Heil Avenue Rehabilitation and Main Street Rehabilitation Project, CC-1540; and, approved an appropriation in the amount of $754,100 A motion was made by Posey, second Semeta to appropriate $754,100 from the Measure M (213) undesignated fund balance to account no. 21390026.82300; and, accept the lowest responsive and responsible base bid submitted by All American Asphalt in the amount of $2,285,562.00; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following vote: HB -47-Item 1. - 37 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 15 of 24 AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 14. Awarded and authorized execution of a construction contract with Palp, Inc. DBA Excel Paving Company in the amount of $104,357.00 for the Police Department Parking Lot Expansion Project, CC-1556; and, approved an appropriation in the amount of $110,000 and authorize up to 15% in construction change orders Councilmember Hardy pulled this item to voice her opposition because the project will take away from open space, and she believes there must be a better solution to the parking need. A motion was made by Hardy to oppose the recommended action to appropriate $110,000 from undesignated Capital Improvement Reserve General Fund to General Fund account 10040314.82400; and, accept lowest responsive and responsible bid submitted by Palp, Inc. DBA Excel Paving Company in the amount of $104,357; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney; and, authorize the Director of Public Works to approve up to fifteen percent (15%) in construction change orders. The motion failed due to lack of a second. Mayor Pro Tem Posey and Police Chief Handy discussed that the Police facility was built in the 1970s and never had enough secured parking. Chief Handy stated that the need for secure officer parking is acknowledged by the Police Officers' Association (POA), and especially in times when officers are purposely being targeted, it is important to provide secure officer parking. Mayor Delgleize and Police Chief Handy discussed details of the landscaping changes which include taking down one large tree and planting five (5) as replacements. A motion was made by Posey, second Peterson to appropriate $110,000 from undesignated Capital Improvement Reserve General Fund to General Fund account 10040314.82400; and, accept lowest responsive and responsible bid submitted by Palp, Inc. DBA Excel Paving Company in the amount of $104,357; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney; and, authorize the Director of Public Works to approve up to fifteen percent (15%) in construction change orders. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Brenden, and Peterson NOES: Hardy 15. Approved and authorized execution of Amendment No. 1 with Albert Grover & Associates for On-Call Civil Engineering Services in the amount of $100,000 for a total contract amount not to exceed $350,000 and extending the contract term 1 year A motion was made by Posey, second Semeta to approve and authorize the Mayor and City Clerk to execute "Amendment No. 1 to Agreement Between the City of Huntington Beach and Albert Grover & Associates, Inc. for On-Call Civil Engineering Services." This amendment shall increase the maximum not-to-exceed amount by $100,000 to a total of $350,000 and extend the term of the contract by one year with a revised expiration date of July 6, 2019. HB -48-Item 1. - 38 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 16 of 24 The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 16. Approved the plan to convert the temporary lot at Huntington Central Park west, located northeast of Golden West Street and Talbert Avenue (adjacent to Shipley Nature Center), into a permanent parking lot A motion was made by Posey, second Semeta to approve the plan to convert the temporary lot to a permanent parking lot in Huntington Central Park west, located northeast of Golden West Street and Talbert Avenue, as presented in Alternative 1 on page 2 of the July 12, 2017 CSC Minutes (Attachment #3); and, approve an update to the Master Plan of Recreational Uses for Central Park as presented. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 17. Approved an update to the Murdy Park Master Plan to include a multi-use youth sports field and other park improvements as presented A motion was made by Posey, second Semeta to approve the concept plan for a multi-purpose youth sports field and improvements at Murdy Park; and, approve an update to the Murdy Park Master Plan to include the multi-use sports field and improvements. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None 18. Approved and authorized execution of a HOME Recipient Agreement between the City and Interval House; and, approved an appropriation of $37,000 A motion was made by Posey, second Semeta to approve and authorize the Mayor and City Clerk to execute a one-year "HOME Recipient Agreement between the City of Huntington Beach and Interval House" for Tenant Based Rental Assistance (TBRA) program; and, approve an appropriation in the amount of $37,000 from the Affordable Housing In-Lieu Fee (217); and, authorize the City Manager to sign all necessary documents to effectuate the Agreement and any future minor amendments to contract and/or US Department of Housing and Urban Development (HUD) documents, with review by the City Attorney. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None HB -49-Item 1. - 39 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 17 of 24 19. Approved and authorized execution of City and Housing Authority Subordination Agreements with Jamboree Housing Corporation (JHC-Oakview LLC) and St. Joseph Health System for 17362 Koledo (Jamboree II) Councilmember O'Connell stated that he has a property very close to Koledo Street and therefore recused himself, and left the dais. A motion was made by Hardy, second Posey to approve and authorize execution and recordation of "Subordination Agreement" (City) by the Mayor, City Manager and City Clerk; and, approve and authorize execution and recordation of "Subordination Agreement" (Authority Loan) by the Authority Chairperson, Executive Officer and Clerk of the Housing Authority. The motion carried by the following vote: AYES: Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None RECUSED: O’Connell 20. Adopted Ordinance No. 4136 amending Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) relating to Wireless Communication Facilities (Small Cell Sites), Zoning Text Amendment (ZTA) No. 17-003 Approved for introduction August 7, 2017, Vote: 7-0 A motion was made by Posey, second Semeta to adopt Ordinance No. 4136, "An Ordinance of the City of Huntington Beach Amending Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance Relating to Wireless Communication Facilities Zoning Text Amendment (ZTA) No. 17-003." The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None PUBLIC HEARING 21. Approved for introduction Ordinance No. 4137 approving Zoning Text Amendment (ZTA) No. 17-001 amending Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) to amend Section 204.18 Prohibited Uses, add Section 204.20 Prohibited Uses--Commercial Non-Medical Marijuana Businesses and Deliveries, and add Section 204.22 Non-Medical Marijuana Cultivation City Manager Wilson introduced Associate Planner of Community Development Tess Nguyen who presented a PowerPoint communication entitled: Non-Medical Marijuana, Zoning Text Amendment No. 17-001 with slides entitled: Background (2), Request (2), PC Recommendation, Analysis, and Recommendation. Mayor Pro Tem Posey and City Manager Wilson discussed whether it is possible to project potential sales tax from sale of marijuana, and Mayor Pro Tem Posey stated that sales of $20M in recreational marijuana would net the City approximately $200,000 in sales tax, or the equivalent of one police officer. HB -50-Item 1. - 40 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 18 of 24 Mayor Delgleize opened the Public Hearing. Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental communication that was received by her office following distribution of the Council Agenda packet: Email communications regarding Zoning Text Amendment No. 17-001 were received from Coburn, Shepherd, Dutton, and World. Speakers — 6 Patti Gordon was called to speak and stated her opposition to the item. She referenced statistics published on the City's website on this issue, which in her opinion are not accurate, and compared them to statistics in the State of Colorado where marijuana use has been made legal. Mayor Delgleize suggested that Ms. Gordon may want to complete a blue card for follow-up. (04:23:33) Amory Hanson, Candidate for Huntington Beach City Council in 2018, was called to speak and stated his support of the item. (04:26:55) Henry Carey was called to speak and shared that from a personal experience, he opposes the item. He presented local voter statistics from Proposition 64, and stated that in his opinion the City should be going after the true drugs that are tearing the City apart, not cannabis which is benefitting many people. (04:29:36) Eric Lucas, a parent of children in several local schools, was called to speak and shared that from personal experience, he opposes the item. Mr. Lucas stated his opinion that if marijuana was regulated, and not left in the hands of criminals, it could provide revenue for the City. (04:32:39) Bobbi Ashurst was called to speak and shared that from personal experience, she opposes the item, and presented some voter statistics which show that nearly 60% of Huntington Beach residents voted in support of Proposition 64, and in her opinion it is the responsibility of City Councilmembers to properly zone for marijuana. (04:35:09) Brandt Stebbins was called to speak and shared that from personal experience, he opposes the item, explaining that his interest is only in making medical marijuana available due to its health benefits. He also requested that the City Council listen to their constituents. (04:38:24) There being no more public speakers, Mayor Delgleize closed the Public Hearing. (04:42:45) Councilmember Hardy stated that she is supportive of discussions on an ordinance to allow controlled medical marijuana sales; however, that is not the topic being presented for Public Hearing Item No. 21. Councilmember Hardy also stated that in her opinion Huntington Beach should not be one of the first cities to allow marijuana as that doesn't really support the image of Huntington Beach as a family friendly destination. Councilmember Brenden and City Attorney Gates discussed that non-medical marijuana sales are already prohibited, and this Ordinance strengthens the fact that commercial and retail sales are prohibited. Attorney Gates affirmed that in the future any Councilmember could modify this ordinance so long as it complies with Proposition 64. HB -51-Item 1. - 41 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 19 of 24 Councilmember Peterson voiced his support of the comments made by Councilmember Hardy, and stated that if any dispensaries are allowed in the future there will be a zoning change process. Mayor Delgleize stated her support of the comments made by Councilmember Hardy and added that she believes that medical marijuana will be an option sometime in the future but in her opinion the City of Huntington Beach does need to take some time and learn from the cities who choose to be first. Councilmember Semeta thanked those of the public who shared this evening from their personal medical experience, and stated she believes that medical marijuana will be a topic under consideration in the future. A motion was made by O’Connell, second Hardy to find the proposed project exempt from the California Environmental Quality Act (CEQA) pursuant to City Council Resolution No. 4501, Class 20, which supplements the California Environmental Quality Act; and, approve Zoning Text Amendment No. 17-001 with findings for approval (Attachment No. 1) and, after the City Clerk reads by title, approve for introduction, Ordinance No. 4137 "An Ordinance of the City of Huntington Beach Amending Title 20 of the Zoning and Subdivision Ordinance by Amending Section 204.18 and Adding Section 204.20 and Section 204.22 to the Huntington Beach Zoning and Subdivision Ordinance to Prohibit Commercial/Recreational Sales and Deliveries of Non-Medical Marijuana as well as Adopt Regulations Regarding Non-Medical Marijuana Cultivation." The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, Brenden, and Peterson NOES: None ADMINISTRATIVE ITEMS 22. Review ed and discussed the International Downtown Association (IDA) Panel Recommendations June 2017 regarding the Downtown Business Improvement District (DTBID) — DTBID to provide update in 6 months Councilmember O'Connell stated that since he has a business interest in Legends, Downtown, he will recuse himself for Items 22 and 23, and left the dais. City Manager Wilson introduced Kathleen Rawson, Chief Executive Officer of Downtown Santa Monica, Inc. and Board Member and Treasurer, International Downtown Association, who presented a PowerPoint communication entitled: IDA Advisory Panel with slides entitled: Agenda, What we Heard, Situational, Areas for Improvement, Turn Around Strategy: Immediate Recommendations 0-60 Days, Turn Around Strategy: Short-term Recommendations 30-120 Days, New Activities in Parallel Task Force Recommendations 30-270 Days, Qualifications of an Interim CEO, and Commit to Something. Mayor Delgleize invited DTBID Member Bob Bolen to the podium for comments. Mr. Bolen voiced concerns about the IDA only being asked to review the BID, not a Property Owner BID. He stated opposition to the item because he believes it will include a Property Owner BID without being property presented and discussed with the property owners. He concluded his comments by stating as a minor property owner, he is opposed to another government bureaucracy, or tax, on his building. HB -52-Item 1. - 42 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 20 of 24 Councilmember Hardy recommended that the Recommended Action language include the term consider before the term implement. Mayor Pro Tem Posey stated his agreement with Councilmember Hardy. Councilmember Peterson stated that in his opinion, as a DTBID Council Liaison, there are some good suggestions in the report that need to be reviewed by the Downtown BID Board, and they should be tasked with reviewing this information and reporting back to Council. Councilmember Semeta confirmed that she supports Councilmember Peterson's comments. She also discussed with Ms. Rawson the considerations for a Property Owner BID which can allow for more amenities and services than the City can provide, and is a process that is discussed peer-to-peer by the property owners (which may include the City) but not dictated by the City. Councilmembers Hardy and Peterson discussed that the Recommended Action should include a follow- up deadline. When asked, Suzie Smith, Downtown Business Improvement District Board Member, stated that since five (5) new Board Members will be elected in October, it would be preferable to have six months for the new Board to review and digest this report before returning to Council. A motion was made by Peterson, second Hardy to establish a Downtown BID Review Committee, appointed by City Council, or a City Council Ad Hoc Sub Committee to review and implement the IDA Report Recommendations; and, support the appointment of an interim CEO with specific downtown management experience to help implement the recommendations as amended, direct the Downtown BID to return to Council in 6 months with an update on IDA Panel Report Recommendations. The motion carried by the following vote: AYES: Semeta, Posey, Delgleize, Hardy, and Peterson NOES: None RECUSED: O’Connell ABSENT: Brenden 23. Downtown Maintenance and Public Improvements Report — Status Update Postponed for 90 Days City Manager Wilson introduced this item as a continuance to return to Council in 90 days after some concerns have been addressed. A motion was made by Hardy, second Posey to have staff return to Council in 90 days with a status update of maintenance enhancements, unbudgeted needs, and various identified projects. The motion carried by the following vote: AYES: Semeta, Posey, Delgleize, Hardy, and Peterson NOES: None RECUSED: O’Connell ABSENT: Brenden HB -53-Item 1. - 43 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 21 of 24 COUNCILMEMBER ITEMS 24. Approved item Submitted by Mayor Pro Tem Posey and Councilmember Peterson — Change Composition of the Community Services Commission Councilmember Peterson introduced this item by stating that the intent is to streamline this Commission in line with the other Commissions, and having the School District Liaisons serve on sub-committees and involved in the Commission’s recommendations. Council approval would not be needed for the District Liaison appointments. Mayor Pro Tem Posey spoke in support of Councilmember Peterson's comments. Councilmember Hardy stated her opinion that this Commission is different from other Commissions in that there is a lot of shared property with the School Districts, and she believes that the School Districts should be involved in the process of making changes to the Commission. Councilmembers Semeta and Hardy discussed the quarterly meeting opportunity between school district representatives and the City, which is in addition to Community Services Commission meetings. Councilmember Semeta and Community Services Director Janeen Laudenback discussed that when issues come up related to parks that are on school property, the School District Liaisons can be the experts with important history. Mayor Delgleize and Director Laudenback discussed some of the history of the interactions between the School Districts and the City regarding maintenance, up-keep and equitable use for parks, tot lots and playing fields. Councilmember O'Connell stated his opposition to this item as he believes the schools need to have voting input. Mayor Pro Tem Posey and Director Laudenback discussed that currently there are three School Districts that own parks, and six School District Representatives can vote and take direction of the parks. Mayor Pro Tem Posey confirmed that no City Councilmembers are voting members of any school boards and stated his support for this item if only to streamline the Commission. He also stated that sport teams use the Sports Complex which is paid for by the taxpayers, not the schools. A motion was made by Posey, second Peterson to direct the City Attorney to amend Chapter 2.64 of the municipal code, changing section 040 to clearly state that each of the six (6) School Districts may recommend one (1) liaison, non-voting member to the Community Services Commission for City Council appointment, thereby changing the composition of the Community Services Commission from a total of thirteen (13) members to a total of seven (7) members, with six (6) liaison, non-voting members, and return to the full City Council for approval. The motion carried by the following vote: AYES: Semeta, Posey, Delgleize, and Peterson NOES: O’Connell, and Hardy ABSENT: Brenden HB -54-Item 1. - 44 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 22 of 24 25. Approved item Submitted by Mayor Pro Tem Posey and Councilmember Brenden — Develop a Plan to Provide Additional City Support for the "2017 Breitling Huntington Beach Air Show" Councilmember O'Connell announced that due to a financial interest in a business that has conducted business with the Air Show, he would recuse himself and then left the dais. Mayor Pro Tem introduced Mr. Kevin Elliott, Owner, Code Four of Huntington Beach, to present a PowerPoint communication entitled Takes Flight, Breitling Huntington Beach Airshow, with slides entitled: 2016 Very First Year, 2016 Surpassed All Expectations, The Impact to our Community Has Been Positive, Direct Economic Impact 2016, 2017 More Than One Million Visitors are Expected to Attend, Improvement Highlights, Notes Regarding Public-Private Precedent, The Airshow Needs You, The Community!, 2017 Budget Projection Key Points, The Airshow is in Jeopardy, We Believe with Increased Community Support the Breitling Airshow, and Thank You Councilmember Semeta and Mr. Elliott discussed the economic data in further detail from last year's show, including potential state and county contributions. Mayor Pro Tem Posey stated that this item is an effort to ask the City Manager to evaluate ways that public safety costs can be back-billed and to look for opportunities for increased income. He also stated that Visit Huntington Beach has increased their financial support for this year's event. Councilmember Peterson and City Manager Wilson discussed that this effort is to work with state and county officials to have them waive some of their costs in an effort to prevent a deficit to the City. Councilmember Peterson reminded everyone that the revenues generated by the City from the 4th of July event are to cover City costs, not to benefit the 4th of July Board, and this event should be managed the same way. Councilmember Semeta and Mr. Elliott discussed potential sponsors and realistic expectations. It was also confirmed that several sponsors from last year have substantially increased their support for this year. Councilmember Hardy and Director Laudenback discussed potential parking options. Councilmember Hardy stated that the City actually receives about one percent of the anticipated or projected event revenues, and that she supports Councilmember Peterson's comments related to the 4th of July event. Councilmember Hardy expressed her support for this item only to get more accurate details. A motion was made by Posey, second Delgleize to direct the City Manager to develop a plan outlining options for the City of Huntington Beach to provide additional financial support for the "2017 Breitling Huntington Beach Air Show." Include the above-listed options and return to City Council at the September 18, 2017, City Council Meeting. The motion carried by the following vote: AYES: Semeta, Posey, Delgleize, Hardy, and Peterson NOES: None RECUSED: O’Connell ABSENT: Brenden HB -55-Item 1. - 45 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 23 of 24 26. Approved item Submitted by Councilmember Brenden — Short Term Rentals Community Workshop Mayor Delgleize introduced the item on Councilmember Brenden’s behalf because he had to leave the meeting early to meet another obligation. Councilmember Hardy, Mayor Pro Tem Posey and Councilmember O’Connell expressed the need to ensure that both sides of the issue are represented at the proposed meeting so that pros and cons can be explored and discussed. A motion was made by Posey, second O’Connell to recommend that city staff organize a community workshop so that property owners, residents, business owners, and hotel operators can hear the pros and cons of short term rentals. This workshop could be held at the Senior Center in Central Park on Saturday, September 16, from 9:00 a.m. to Noon. In attendance at this panel workshop should be representatives from Air BnB, local surrounding cities where STVRs are currently permitted and prohibited, community development leaders, attorneys to address legal issues, short-term rental operators, and others to hear both sides of the positive and negatives of short-term rentals. The motion carried by the following vote: AYES: O’Connell, Semeta, Posey, Delgleize, Hardy, and Peterson NOES: None ABSENT: Brenden COUNCILMEMBER COMMENTS (Not Agendized) Mayor Pro Tem Posey reported attending the Huntington Beach Police Department Promotional Swearing-in Ceremony for three Lieutenants, one Captain, three Sergeants, and a Communications Manager; the HB Police Officers' Foundation Constable Classic Charity Golf Tournament; and the Building Industry Association of Orange County (BIAOC) 2017 Government Affairs Commission (GAC) Seminar — Are We Built Out? He also reported that Vector Control has been trapping mosquitoes in Huntington Beach and all have tested negative for West Nile Virus. Councilmember Hardy reported attending the American Cancer Society Relay for Life Fundraiser, and announced that Miss Huntington Beach Scholarship Pageant is now recruiting contestants. She also attended the 100 Year Celebration of Boy Scout Troop 1. Councilmember Peterson reported attending the 100 Year Celebration of Boy Scout Troop 1. Councilmember Semeta reported that as part of the Business Incubator Ad Hoc Committee, she and Councilmember Brenden made a visit to the OC Maker facility on Product Lane, where innovators, artists, and others can utilize 3-D printer and other technologies to make prototypes. She also attended an inspiring Women-to-Women event for women business owners and entrepreneurs. Mayor Delgleize reported attending the City of Santa Ana State of the City Breakfast, the Huntington Beach Chamber of Commerce Ribbon Cutting for Pinot's Palette, the 54th Annual Huck Finn Fishing Derby at the Huntington Beach Pier, the 100 Year Celebration of Boy Scout Troop 1, and the Huntington Beach Junior Lifeguard Graduation Ceremony for almost 900 individuals. Mayor Delgleize congratulated and thanked Marine Safety Chief Mike Baumgartner and Jr. Lifeguard Program Coordinator Mike Eich for HB -56-Item 1. - 46 Council/PFA Regular Minutes Housing Authority Special Minutes August 21, 2017 Page 24 of 24 this successful program. Mayor Delgleize also reported attending the Bloomberg Mayors Challenge Accelerator Workshop. ADJOURNMENT — 11:25 PM to the next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority on Tuesday, September 05, 2017, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. _____________________________________ City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach and Secretary of the Public Financing Authority of the City of Huntington Beach, California ATTEST: ______________________________________ City Clerk-Secretary ______________________________________ Mayor-Chair HB -57-Item 1. - 47 Dept. ID HR 17-010 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: The Finance Department and Human Resources have conducted a review of the Workers’ Compensation Internal Service Fund (551). Certain technical adjustments need to be made to reconcile the budget with actual expenditures incurred and to comply with auditing, actuarial, accounting and/or legal requirements. City Council authorization is requested to appropriate an additional $500,000 to cover expenses for the remainder of FY 2016/17. Financial Impact: This action will result in increasing the Workers’ Compensation Fund (Fund 551) appropriation by $500,000 to cover the additional expenses related to the Workers’ Compensation Fund. There are sufficient revenues in the FY 2016/17 to cover this request for a net neutral impact. Recommended Action: Approve additional appropriation of $500,000 in the FY 2016/17 for the Self Insurance Workers’ Compensation Internal Service Fund (551). Alternative Action(s): Do not approve the recommended action and direct staff accordingly. Analysis: California Workers’ Compensation Law provides state mandated benefits to employees for work- related illness or injury. Benefits may include payments for medical treatment, salary continuation, Total Temporary Disability (TTD) benefits, and permanent disability benefits. The City is self- insured for its workers’ compensation program and is liable for all costs up to $1 million dollars per claim. The costs related to claims are paid for by the City as the Employer. Workers’ Compensation expenses continue to rise annually, primarily due to increasing heath care costs related to on-going medical treatment, surgery, hospitalization, and post-surgical care. Moreover, the City has experienced several catastrophic claims over the past couple of years, further adding to the overall high medical care costs. The City’s most recent actuarial report demonstrates that the City’s long-term unfunded liabilities for the Workers’ Compensation program continue to grow. Based upon the City’s preliminary estimates, this will require year-end adjustments to account for unfunded liability increases of approximately $5.8 million. The final numbers are still under review and will be submitted to the City Council at a later date. CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Michele Warren, Director of Human Resources SUBJECT: Approve Fiscal Year 2016/17 Budget Adjustment for the Workers’ Compensation Internal Service Fund HB -58-Item 2. - 1 Dept. ID HR 17-010 Page 2 of 2 Meeting Date: 9/5/2017 In FY 2016/17, the City has incurred extra-ordinary claims costs for claims expense and to effectuate the compromise and release of select claims. The aggregate cost of certain select, on- going claims exceeding $50,000 in expenditures for FY 2016/17 is currently $2.18 million. Further, the aggregate cost of certain select claims that have been settled via compromise and release is currently $812,000. The Workers’ Compensation fund requires additional appropriation to cover outstanding invoices and pending claims expense through September 30, 2017. The current funding needed in FY 2016/17 is $500,000. Environmental Status: N/A Strategic Plan Goal: Enhance and Maintain City Service Delivery Strengthen Economic and Financial Sustainability Attachment(s): None HB -59-Item 2. - 2 Dept. ID CS 17-010 Page 1 of 4 Meeting Date: 9/5/2017 Statement of Issue: On August 21, 2017, City Council approved a City Council Member Item submitted by Mayor Pro- Tem Posey and Council Member Brenden to develop a plan to provide options for additional City financial support for the 2017 Breitling Huntington Beach Air Show scheduled on September 29, 30, and October 1, 2017. Based on that action, staff is proposing a combination of targeted parking rate increases, the introduction of a new Recreational Vehicle Event Camping Pass, as well as a deferred payment due date of 45 days after the event. Financial Impact: A parking fee increase of an additional $15.00 per vehicle is proposed at the South Beach attended lots, as well as the doubling of the hourly rates at Main Promenade Parking Structure (MPPS) with a maximum daily rate of $30.00. Staff estimates that these increases will generate approximately $134,000 in support of the event. In addition, staff proposes the introduction of a new Recreational Vehicle (RV) Event Camping Pass which will allow RVs to camp during the entire event or a portion thereof at a rate of up to $1,600 for the full four-day pass generating an additional $11,000 for a combined total of $145,000. Since parking revenues average $45,000 on similar weekends in late September, the total increased offsetting revenue is projected at $100,000. Recommended Action: A) Adopt Resolution No. 2017-44, “A Resolution of the City Council of the City of Huntington Beach Amending Resolution 2016-59 Which Established a Citywide Schedule for Charges for Public Access and Use of Certain City Property (Supplemental Fee Resolution 2)” to temporarily increase parking/camping fees as listed in Exhibit A; and, B) Approve the deferral of payment for all public safety/staff charges to 45 days following the event (November 15, 2017). Alternative Action(s): Do adopt Resolution 2017-44 or approve the deferral of payment for all public safety/staff charges for the 2017 Breitling Huntington Beach Air Show. CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Janeen Laudenback, Director of Community Services SUBJECT: Adopt Resolution No. 2017-44 amending Resolution 2016-59 which established a Consolidated Comprehensive Citywide Master Fee and Charges Schedule (Supplemental Fee Resolution 2) for parking rate modifications during the “2017 Breitling Huntington Beach Air Show” and approve the deferral of the payment for public safety/staffing costs HB -60-Item 3. - 1 Dept. ID CS 17-010 Page 2 of 4 Meeting Date: 9/5/2017 Analysis: The City of Huntington Beach partnered with Air Support, LLC, to host the inaugural 2016 Surf City USA full-service air show. For 2017, the Air Support Team will provide all show planning and on- site event management, including the recruitment and acquisition of military demonstrations and static display aircraft to provide an interesting and professional event line up. A comprehensive layout strategy has been planned with Air Support, LLC providing for quality customer service, sponsorship and event safety. Air Support, LLC and its team has worked carefully with the City’s Specific Events Committee on the layout and design of every aspect of the air show that are vital to the event’s success. Site design, including aircraft positioning and movement, placement of emergency services, vendor and sponsor location, as well as public parking has been presented and approved. The Specific Events Committee is comprised of representatives from City departments, including but not limited to Police, Fire, and Community Services per Chapter 13.54 of the Huntington Beach Municipal Code. The information provided to these department representatives, through the Specific Events process, allows departments to develop a costing structure for each individual event. The Air Show is unique, in that it requires safety support for land, sea and air. All of the City’s major events (i.e. U.S. Open of Surfing, Surf City Marathon, etc.) are approved through this interdepartmental review; however, due to the complexities of the air show event, the multi-agency coordination required, and the substantial overhead costs associated with an event of this size and scope, staff is seeking City Council approval to increase parking/camping rates in order to offset costs and approve a “not to exceed” billing cap for staff reimbursement costs. According to Air Support, LLC, they agreed to make an initial investment into the inaugural year of the event. As such, they covered the associated direct costs for the event, including staff time and additional expenses for Police, Fire, Marine Safety and Beach Maintenance, creating a financial deficit for the promoter of approximately $395,000. Financial Considerations: Off-Setting Parking Revenue: Preliminary costing analysis for the 2017 event indicates that to adequately support this event, the City staffing costs for Police, Fire, Marine Safety, and Beach Maintenance for this three-day event will be higher than last year ($194,915), and total approximately $209,285; as listed below: Department/Division 2016 2017 Police $73,405 $90,000 Fire/EMS $61,225 $44,000 Fire/ Marine Safety $56,960 $71,560 Community Services/Beach Maintenance $3,325 $3,325 Public Works Pollution Prevention Plan Review 0 $400 **Total City of Huntington Beach (Estimated) $194,915 $209,285 In addition to City public safety and other staffing costs, the promoter must cover additional safety services required by partner agencies and contractors. While negotiations regarding these additional multi-jurisdictional agencies are still underway, the maximum total outlay is $95,573 as referenced below. Air Support, LLC must issue all payments for these associated safety services prior to receiving a City of Huntington Beach Specific Events permit in the amount of $95,573 as follows: Orange County Sheriff $25,773 HB -61-Item 3. - 2 Dept. ID CS 17-010 Page 3 of 4 Meeting Date: 9/5/2017 California State Parks $29,800 Contracted Security Services $40,000 Total $95,573 For these reasons and because the event is still new to our community and needs additional time to build, staff is proposing that the City partner with Air Support, LLC by increasing parking rates at the south beach lots and the Main Promenade Parking Structure (MPPS) as shown below. Fee Description Current Fees Proposed Changes for Sept 29 – Oct 1, 2017 Proposed Changes for Recreational Vehicle Overnight Camping South Beach Attended Lots – Daily Rates $15.00 $30.00 Main Promenade Parking Structure First 30 minutes no charge Up to two hours (includes first 30 minutes) $1.00/hour After two hours $1.00/each 20 minutes Maximum Daily Special Event Rate $20.00 Evening Rate (after 9:00 PM – Prevailing Hourly Rate or $5.00) First 30 minutes no charge Up to two hours (includes first 30 minutes) $2.00/hour After two hours $2.00/each 20 minutes Maximum Daily Special Event Rate $30.00 Evening Rate (after 9:00 PM – Prevailing Hourly Rate or $10.00) Recreational Vehicle (RV) Event Camping Pass N/A N/A Up to $1,600.00 (3 or 4-Day Pass) (By Reservation Only) Valid Thursday, September 28 or Friday, September 29 after 10:00 am through Monday, October 2, 10:00 am Staff estimates that the increase in parking rates will generate $134,000 in total parking revenue over the three-day period at the beach lots (located south of 1st Street) and the Main Promenade Parking Structure (MPPS). In addition to increases in existing parking rates, staff is proposing a new Recreational Vehicle (RV) Event Camping Pass that would be valid beginning the day before the event (September 28) through the day after the event (October 2) at a rate of $1,600. While significantly higher than our existing posted rate of $70 per day, the promoter believes that this special event rate is quite HB -62-Item 3. - 3 Dept. ID CS 17-010 Page 4 of 4 Meeting Date: 9/5/2017 acceptable. As a comparison, in-field RV overnight rates at the Auto Club Speedway in Fontana range from $450 to $650 per night. Any unsold camping spaces would be available for day of event parking, which allows this option to be offered, creating little to no opportunity costs to implement this pilot program. Since this is an untested concept for our event and parking divisions, staff is assuming slightly less than 50% occupancy or $11,000. For those wishing to bring an RV but not wanting to camp overnight, RV’s would also be allowed to park for day-use only at the increased rate of $30 per occupied space (or $60 per day, assuming two spaces). Typical parking revenues during similar weekends in late September over the past two years have averaged $45,000. Therefore, the increased rates are estimated to generate $100,000 in support of the event ($145,000 total increased revenue less $45,000 average revenue). Payment Deferral: Per Section 13.54 of the Municipal Code relating to Specific Events, all direct costs for the event, including staffing and operational set-up/tear-down costs associated with the event, must be paid by the event promoter 30 days prior to the event. To this end, staff is proposing that the required payment for City staffing services be delayed up to 45 days following the event (November 15, 2017) in order to determine final costs of City staffing services and to assist Air Support, LLC with initial cash flow. Billing Cap: Further, in addition to the proposed payment deferral time period, Air Support, LLC has requested that a “not to exceed” billing cap be established. The Councilmember Item approved at the City Council meeting on August 21, 2017, suggested a billing cap of 50% of public safety/staffing costs. At this time, staff is recommending that this be addressed at a future City Council meeting following final determination of costs and revenues. Summary of Costs/Revenue: The City’s projected public safety/staffing costs for this year’s three-day event total approximately $209,285. Staff estimates that the proposed increases in parking rates, as well as the new RV Event Camping Pass will generate a total of $100,000 in offsetting revenues. Environmental Status: Not applicable. Strategic Plan Goal: Improve quality of life Attachment(s): 1. Resolution No. 2017-44, “A Resolution of the City Council of the City of Huntington Beach Amending Resolution 2016-59 Which Established a Citywide Schedule for Charges for Public Access and Use of Certain City Property (Supplemental Fee Resolution 2)”. 2. City Council Member Item dated August 14, 2017, submitted by Mayor Pro Tem Posey and City Council Member Brenden. HB -63-Item 3. - 4 APPROVED AS City Attorney DO ca t 0\1.1 INITIATED AND APPROVED: recto-r—of Community Services RESOLUTION NO. 2017-44 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AMENDING RESOLUTION NO. 2016-59 WHICH ESTABLISHED A CITYWIDE SCHEDULE FOR CHARGES FOR PUBLIC ACCESS AND USE OF CERTAIN CITY PROPERTY (SUPPLEMENTAL FEE RESOLUTION NO. 2) WHEREAS, on January 6, 2017, Resolution No. 2016-59 was adopted, amending the Citywide fee for public access and use of certain City property; and The City Council desires to revise a portion of the Fee Resolution to temporarily increase existing parking fees on September 29, 30 and October 1, 2017; and The City Council desires to add a new recreational vehicle (RV) event camping pass that would be valid Thursday, September 28 after 10:00 and through Monday, October 2, until 10:00 a.m.; and Upon adoption of this Resolution, the fee listed in the "Proposed Changes" column shall be in effect until October 2, 2017. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: 1. That the new charges set forth in Exhibit "A" and adopted by this Resolution shall be effective September 29, 30 and October 1, 2017, whereupon the previous charges shall continue in effect thereafter. All other charges or fees set forth in Resolution No. 2016-59, as amended, shall remain in effect. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 2017. Mayor REVIEWED AND APPROVED: City Manager 17-5966/163881/RLS 8/10/17/DO HB -64-Item 3. - 5 EXHIBIT “A” Community Services – Facility Rentals and Recreational Services Fees Fee Description Current Fees Proposed Changes for Sept 29 – Oct 1, 2017 Proposed Changes for Recreational Vehicle Overnight Camping South Beach Attended Lots – Daily Rates $15.00 $30.00 (during the hours of 6:00 am – 4:00 pm only) Main Promenade Parking Structure First 30 minutes no charge Up to two hours (includes first 30 minutes) $1.00/hour After two hours $1.00/each 20 minutes Maximum Daily Special Event Rate $20.00 Evening Rate (after 9:00 PM – Prevailing Hourly Rate or $5.00) First 30 minutes no charge Up to two hours (includes first 30 minutes) $2.00/hour After two hours $2.00/each 20 minutes Maximum Daily Special Event Rate $30.00 No Change Recreational Vehicle (RV) Event Camping Pass N/A N/A Up to $1,600.00 (3 or 4-DAY PASS) (By Reservation Only) Valid Thursday, September 28 or Friday, September 29 after 10:00 am through Monday, October 2, 10:00 am) HB -65-Item 3. - 6 CITY OF HUNTINGTON BEACH COMMUNITY SERVICES DEPARTMENT INTER-DEPARTMENT COMMUNICATION To: From: Date: Subject: Honorable Mayor and City Council Members Patrick Brenden, City Council Merryi?er Mike Posey, Mayor Pro Tern mp August 14, 2017 CITY COUNCIL MEMBER ITEM FOR THE AUGUST 21, 2017, CITY COUNCIL MEETING — DEVELOP A PLAN TO PROVIDE ADDITIONAL CITY SUPPORT FOR THE "2017 BREITLING HUNTINGTON BEACH AIR SHOW" STATEMENT OF ISSUE: The City of Huntington Beach will be hosting the Second Annual "Breitling Huntington Beach Air Show" event on September 30 and October 1, 2017, with fly-by practices on September 28 and a full choreographed practice day on September 29. For the 2017 Air Show, event organizers conservatively estimate the total production costs are close to $975,000. At this time, revenue estimates are approximately $625,000. If these estimates are realized, the 2017 event would have a funding gap of approximately $350,000. The projected deficit for the 2017 air show event, together with the $395,000 in losses from the 2016 event, have created significant financial challenges. Given overwhelming support for this event, combined with its value to the community, we believe that the City Council should consider providing financial support for the 2017 event. City Staff has advised us that costs for City services, including Police, Fire, and Marine Safety have increased from $194,915 in 2016 to an estimated $222,058 in 2017. In addition, the estimated cost for contracted services required from partner agencies such as the County of Orange Sheriff at $25,773 and the State of California at $29,800, as well as the cost of required event security services, are looming close to $40,000. Due to the size and scope of the multi-agency coordination required to produce this community event, and the associated substantial overhead costs, we have been advised it will be a challenge to continue this event in future years. In an effort to assist with the longevity and ongoing success of the Air Show, the City of Huntington Beach would like to consider providing additional financial support to the event. Assistance could include but is not limited to delaying the required payment for City Services, generating off-setting parking/camping revenue, creating a Public Safety "billing cap" at no more than a 50% Safety Cost recovery or by advocating partner agencies for their financial support for this very important event. RECOMMENDED ACTION: Direct the City Manager to develop a plan outlining options for the City of Huntington Beach to provide additional financial support for the "2017 Breitling Huntington Beach Air Show." Include the above-listed options and return to City Council at the September 18, 2017, City Council Meeting. xc: Fred Wilson, City Manager; Robin Estanislau, City Clerk HB -66-Item 3. - 7 Es pa rza, Patty From: Sent: To: Subject: Surf City Pipeline [noreply@usergovoutreach,corn] Monday, August 28, 2017 11:43 AM Pipeline Clerk Agenda Surf City Pipeline: You have been assigned a new Request #: 30827 Request # 30827 from the Government Outreach System has been assigned to you. Request type: Problem Request area: City Council - Agenda & Public Hearing Comments Citizen name: Jeff' Young Description: Hi, My name is Jeff Young. Concerning the cancellation of the air show, please! Don't cancel it, This event is one of the few in Huntington Beach enjoyed by adults and children. Most of the events in Huntington Beach are geared toward teenagers The air show takes place 12:00 pm to 4pin there should be no need for $220,000 for extra police and fire security. A normal busy summer Saturday, Sunday staffing should be enough. Please reconsider, thank you Expected Close Date: September 7, 2017 Click here to access the request Note: This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored. 1 HB -67-Item 3. - 8 Esparza, Patty From: Sent: To: Subject: Surf City Pipeline [noreply@user.govoutreach.com ] Monday, August 28, 20178:37 AM Pipeline Clerk Agenda Surf City Pipeline: You have been assigned a new Request #: 30831 Request # 30831 from the Government Outreach System has been assigned to you. Request type: Problem Request area: City Council - Agenda & Public Hearing Comments Citizen name: Irena Guilmette Description: I am a homeowner and business owner in 92649. I demand that not one penny of my tax dollars go to fund the 2017 Air Show. Our streets need to be repaired. We have financial liabilities with our city services and it would be fiscally irresponsible to fund an Air Show that we can not afford. It would be unwise to fund an air show that seems to be so poorly planned at the 11th hour. Thank you for your time. Tracy Barden 4651 Minuet Drive Huntington Beach, Ca 92649 Owner: Core Pilates Center 16400 PCH #221 Huntington Beach, Ca 92649 Expected Close Date: September 7, 2017 Click here to access the request Note: This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored. HB -68-Item 3. - 9 Esparza, Patty From: Sent: To: Subject: Surf City Pipeline Inoreply@user.govoutreach.corni Monday, August 28, 2017 11:42 AM Pipeline Clerk Agenda Surf City Pipeline: You have been assigned a new Request #: 30833 Request # 30833 from the Government Outreach System has been assigned to you. Request type: Problem Request area: City Council - Agenda & Public Hearing Comments Citizen name: Anonymous Description: Please cancel the airshow... It was noisy brought trash and traffic... .and now they want money you dont even have enough money to fix problems.. if there is so much money.. .please pay me for picking up trash on the beach and in the residential community's... Since you just want to increase tourism without protecting families who live here from such tourists...graffiti...vulgar language pissing in public...ect.. Expected Close Date: September 5, 2017 Click here to access the request Note: This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored. 1 HB -69-Item 3. - 10 Esparza, Patty From: Sent: To: Subject: Surf City Pipeline [noreply©usergovoutreach.comi Monday, August 28, 2017 11:42 AM Pipeline Clerk Agenda Surf City Pipeline: You have been assigned a new Request #: 30835 Request # 30835 from the Government Outreach System has been assigned to you. Request type: Problem Request area: City Council - Agenda & Public Hearing Comments Citizen name: Richard Hart Description: I am opposed to using city funds to finance the deficit in the Breitling Huntington Beach Air Show. This is a bad precedent to set for something that the producers will probably request annually. This is a private venture that went bad. It is bad pubic policy to use public funds to finance over a 30 percent deficit in a million dollar private venturet. Why should the public be the deep pockets to bad business decisions. The $300,000 plus in public funds that are being sought could be put to much better use for police, fire, public works, libraries, recreations, etc. If you take the Blue Angels out of the equasion I doubt you would give this a second thought to say no. Of the 20 air shows that the production company puts on nationally, how many cities finance 30 percent of production costs. I bet Huntington Beach would be the only city dumb enough to do it. Who benefits from this project: *The production company and consultants covers costs including salaries of who knows how much. While the production company says its a nonprofit, there are lots of ways to bury expense and hide profits. *Hundreds of thousands of spectators, mostly residents from outside HB, will enjoy the show and consume city services for which they did not pay a dime. *Downtown businesses, including bars, restaurants and hotels. *The HB council members will make new friends that maybe they can count on for campaign contributions. You might even receive a few of those few expensive $199 tickets for free. Who loses: *The residents of HB lose big time. We all love the Blue Angels but $300,000 can pay for a lot of critical city services. *The credibility of the city manager and city council the next time they claim the city does not have funds for critical city services. *Possibly the seat of incumbent council members at the next election. Do the right thing and do not use public funds to finance bad private sector business decisions. You're suppose to represent the people of Huntington Beach, not a production company that makes a business of putting on air shows. 1 HB -70-Item 3. - 11 Esparza, Patty From: Sent: To: Subject: Surf City Pipeline [noreply@user.govoutreach.corn] Monday, August 28, 2017 11:42 AM Pipeline Clerk Agenda Surf City Pipeline: You have been assigned a new Request #: 30837 Request # 30837 from the Government Outreach System has been assigned to you. Request type: Problem Request area: City Council - Agenda & Public Hearing Comments Citizen name: Sherrey Hollander Description: TAXPAYER FUNDING FOR AIR SHOW.... NO WAY Breitling Huntington Beach air show According to Thursday's Huntington Beach Wave, the HB City Manager has recommended using tax payer dollars to finance a gap in the project's funding that is somewhere between $195,000 and $350,000. In my view we should NOT be using our tax payer money to fund private sector events, even if it involves the Blue Angels, a group we all are very proud of, These funds could be put to better use in critical areas of police, fire, libraries, recreation, etc Thank you, Sherrey A Hollander Huntington Beach Resident for 40+ years Expected Close Date: September 8, 2017 Click here to access the request Note: This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored. 1 HB -71-Item 3. - 12 Esparza, Patty From: Sent: To: Subject: Surf City Pipeline [noreply@user.govoutreach.corn] Monday, August 28, 2017 11:41 AM Pipeline Clerk Agenda Surf City Pipeline: You have been assigned a new Request #: 30845 Request ft 30845 from the Government Outreach System has been assigned to you. Request type: Problem Request area: City Council - Agenda & Public Hearing Comments Citizen name: Stefan Hanson Description: Please read my attached letter concerning the proposed air show. Thank you. SH Expected Close Date: September 8, 2017 Click here to access the request Note: This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored. 1 HB -72-Item 3. - 13 Dear Councilmernbers, This communication concerns the so-called "Breitling Huntington Beach Air Show". I am a downtown HB resident, and I am strongly opposed to the city subsidizing the show. I also am opposed to the show, even if it could pay its way. These things are often murky for those of us who are not city hall insiders, but I believe the air show was initially brought to the city through Mayor Katapodis. I don't know who sells these event ideas to city council members and how these pitches are made, but there should be more transparency in these matters. In any case, during the first air show, those of us who live downtown had a weekend ruined because our windows were rattling and we had conversation interrupting, cringe inducing jet engines overhead for the better part of a day or two — thank goodness, the weather did not permit a full show. In this first show's aftermath, I watched a city council meeting during which despite information to the contrary, Mayor Katapodis and others on the council declared the show a success. There was even the suggestion that it was somehow patriotic to have the airshow. Really? It was just sad to see the then mayor and council patting themselves on the back about the questionable event. To be fair, Councilwoman Hardy did faintly try to give voice to citizen concerns, but the groupthink was too strong. I'm not sure how success is measured, but I have yet to see any revenue figures which would justify a repeat of this nuisance. There are only so many weekends in the year. We city residents who live downtown are as entitled to the quiet enjoyment of our homes as any other city residents. I think it is wrong of the city council to subsidize or even permit an event that causes such a weekend-long nuisance -- our homes become uninhabitable for the duration of the show. If people want to experience window rattling jets overhead and conversation-interrupting, ear-shattering noise, they can go down to the San Diego neighborhood of the Marine Corps Air Station anytime they are flying there. I honestly don't see the benefit to the city of the airshow, especially if we are paying for it. I strongly urge you not to support any subsidizing of the air show, and I also strongly urge you not to support the continuation of this public nuisance that is so disruptive to the lives of those of us who live downtown. Thank you for your consideration. Stefan Hanson P.S. I wanted to mention that this air show boondoggle reminds me of the paint ball on the beach competition of a few years past. You may recall the paintball also. For that, a particular council person supported that event and was able to get the city to permit it. Then the city went through a lot of troubles to wind up with very iittle to show for it — the organizers didn't even clean up the beaches after the event. And with the paint ball event at least the hotels had some revenue out of it. I'm not sure the air show provides even that. Finally, the paint ball debacle faded away, let's let this airshow boondoggle do the same. HB -73-Item 3. - 14 Dept. ID AD-17-025 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: The State of California Parks and Recreation Department is currently accepting applications for the Outdoor Environmental Education Facilities Grant Program. The City wishes to submit an application for funding for improvements to the existing Central Park Trail. This Request for Council Action seeks approval of a Resolution to apply for grant funding through this program. Financial Impact: There is no fiscal impact at this time. Should the City be awarded funding through the Outdoor Environmental Education Facilities Grant Program, staff will return to Council requesting authorization to accept grant funds and appropriate the required twenty five (25) percent matching funds from the City’s Park Fund. Recommended Action: Adopt Resolution No. 2017-45, “A Resolution of the City Council of the City of Huntington Beach Approving the Application for Outdoor Environmental Education Facilities Grant Funds.” Alternative Action(s): Do not adopt the resolution and direct staff accordingly. Analysis: On March 5, 2002, voters passed Proposition 40, the $2.6 billion “California Clean Water, Clean Air, Safe Neighborhoods Parks, and Coastal Protection Act of 2002.” The passage of this Proposition provides funds for local assistance grants. The intent was to acquire and develop properties of the state park system, to acquire and develop neighborhood, community, and regional parks and recreational areas, for land, air, and water conservation programs, including acquisition for those purposes, and to acquire, restore, preserve, and interpret California’s historical and cultural resources. One of the programs that was created out of Prop 40 funds is the Outdoor Environmental Education Facilities Competitive grant program which aims to provide assistance to local agencies and community-based organizations with regard to the development of outdoor environmental education facilities. The City is requesting $100,000 for the Central Park Trail. Grant funds would be used to rehabilitate the existing trail (approximately 800 linear feet) in Central Park West. The proposed improvements include the installation of decomposed granite over the existing trail path, installation CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Antonia Graham, Assistant to the City Manager SUBJECT: Adopt Resolution No. 2017-45 approving the application for Outdoor Environmental Education Facilities Grant Funds for funding for improvements to the existing Central Park Trail HB -74-Item 4. - 1 Dept. ID AD-17-025 Page 2 of 2 Meeting Date: 9/5/2017 of landscape borders to define the trail, and interpretive signage along the trail which will provide outdoor education and access to the learning opportunities available throughout Central Park. The trail as its stands today is in major need of improvements to better define the path of travel and improve uneven surfaces. The project will significantly increase trail opportunities for Huntington Beach residents and visitors to experience a passive recreation opportunity in the midst of a suburban setting. Visitors will experience native plants and wildlife as the trail is adjacent to the Raptor Foraging Habitat site. Should the City be awarded funding through this grant program, the City would be required to provide a 25 percent match. Environmental Status: The grant submittal requires the preparation of environmental documents pursuant to the California Environmental Quality Act (CEQA). As such, in accordance with CEQA, staff has determined that the work for the restoration of trails and habitat do not result in new or the intensification of environmental impacts in that no new trails will be constructed and no new swathes of habitat will be created. Therefore, the restoration project is Categorically Exempt pursuant to Class 1, Existing Facilities, and Class 4, Minor Alterations to Land. Strategic Plan Goal: Improve quality of life Attachment(s): 1. Resolution No. 2017-45, “A Resolution of the City Council of the City of Huntington Beach Approving the Application for Outdoor Environmental Education Facilities Grant Funds” HB -75-Item 4. - 2 RESOLUTION NO. 2017-45 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING THE APPLICATION FOR OUTDOOR ENVIRONMENTAL EDUCATION FACILITIES GRANT FUNDS WHEREAS, the State Department of Parks and Recreation has been delegated the responsibility by the Legislature of the State of California for the administration of the Outdoor Environmental Education Facilities Grant Program, setting up necessary procedures governing the application; and Such procedures established by the State Department of Parks and Recreation require the Applicant to certify by resolution the approval of the application before submission of said application to the State; and Successful Applicants will enter into a contract with the State of California to complete the Grant Scope project; and The City of Huntington Beach believes in the value of fostering an understanding of how humans interact with, and are dependent on natural ecosystems; and The City of Huntington Beach supports the enhancement of Outdoor Environmental Education Facilities and Trails within Huntington Central Park West, near Edwards Street and Ellis Avenue; and NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: 1. Approves the filing of an appliCation for Outdoor Education Facilities Grant Program; 2. Certifies that said Applicant has or will have available, prior to commencement of any work on the project included in this application, the sufficient funds to complete the project; and 3. Certifies that if the project is awarded, the Applicant has or will have sufficient funds to operate and maintain the project; and 4. Certifies that the Applicant has reviewed, understands, and agrees to the General Provisions contained in the contract shown in the Grant Administration Guide; and 17-5979/164090/RLS 8/17/17/DO 1 HB -76-Item 4. - 3 RESOLUTION NO. 2017-45 5, Delegates the authority to the City Manager to conduct all negotiations, sign and submit all documents, including, but not limited to applications, agreements, amendments, and payment requests, which may be necessary for the completion of Grant Scope; and 6. Agrees to comply with all applicable federal, state and local laws, ordinances, rules, regulations and guidelines, PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 2017. Mayor Assistant to the City Manager REVIEWED AND APPROVED: City Manager 17-5979/164090/ALS 8/17/17/00 1 HB -77-Item 4. - 4 Dept. ID ED 17-20 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: The City Council is asked to approve a 10-year lease agreement between the City and Kokomo’s Surfside Grill Inc., (“Kokomo’s”), to operate a beach concession located at the Junior Lifeguard Headquarters. Financial Impact: The lease agreement will generate $9,250 annually in base rent in addition to shared percentage of revenue based on low (4%), middle (9.5%), and peak (11.5%) seasons, which will result in an increase of $9,000 annually. Revenues will go to the General Fund. Recommended Action: A) Approve the “Lease Between the City of Huntington Beach and Kokomo’s Surfside Grill, a California Corporation for a Beach Food Concession on the First Floor Level of the Marine Safety Education Center;” and, B) Authorize the Mayor, City Manager, and City Clerk to execute the lease agreement and other related documents. Alternative Action(s): Do not approve the lease agreement and direct staff accordingly. Analysis: On June 4, 2007, the City Council approved a lease agreement with Kokomo’s for a ten (10) year period to operate a 1,140 square foot concession that provides food, drinks, and beach rentals to residents and visitors to Huntington Beach. Kokomo’s was rated as the highest from a pool of five (5) applicants as part of a request for qualifications (“RFQ”). Michael and Christine Bartusick have successfully owned operated Kokomo’s since 2007, along with the Park Bench Concession in Central Park. CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Kellee Fritzal, Deputy Director, Business Development SUBJECT: Approve and authorize execution of a 10-year Lease Agreement with Kokomo's Surfside Grill, Inc., for operation of a beach concession located at the Junior Lifeguard Headquarters HB -78-Item 5. - 1 Dept. ID ED 17-20 Page 2 of 2 Meeting Date: 9/5/2017 Staff has negotiated new terms and a new lease agreement has been prepared in accordance with the City’s standard lease format. The terms are summarized below: • 10-year term • Options: Two (5 year) options at Licensee’s option, with City’s consent • Base Monthly Rent: $250 (low), $750 (middle), and $1,500 (peak) 1,000 with annual CPI increases • Shared percentage of revenue based on low (4%), middle (9.5%), and peak (11.5%) season • Indemnification of the City against claims and damages arising from losses • Minimum of 180 days open The Economic Development Committee (EDC) reviewed the lease agreement at their June 14, 2017 meeting. The new lease agreement will result in a $9,000 increase in revenues over the previous year. Environmental Status: Not Applicable Strategic Plan Goal: Strengthen economic and financial sustainability Attachment(s): 1. “Lease Between the City of Huntington Beach and Kokomo’s Surfside Grill, a California Corporation for a Beach Food Concession on the First Floor Level of the Marine Safety Education Center” HB -79-Item 5. - 2 LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND KOKOMO'S SURFSIDE GRILL, A CALIFORNIA CORPORATION FOR A BEACH FOOD CONCESSION ON THE FIRST FLOOR LEVEL OF THE MARINE SAFETY EDUCATION CENTER Table of Contents SECTION PAGE 1 Superseding of Prior Lease 1 2 Grant of Concession on the Premises 1 3 Reservations, Encumbrances and Rights-of-Way 2 4 Time of Essence 3 5 Term 3 6 Conditions of Premises as Is 3 7 Duration of Public Facilities 3 8 Additions, Alterations and Removal 4 9 City's Contract Administrator 4 10 Rent 4 11 Late Charge and Penalty 5 12 Gross Sales Defined 6 13 Gross Sales Exclusions 7 14 Books and Records 8 15 Statement of Gross Sales/Audit 8 16 Security Deposit 10 17 Reserved 10 18 Quality of Sales, Rentals and Services 11 19 Indemnification, Defense and Hold Harmless Agreement 11 20 Workers' Compensation and Employers' Liability Insurance 12 21 General Public Liability Insurance 13 22 Property Insurance 13 23 Increase in Amount of General Public Liability and Property Insurance 15 24 Certificates of Insurance; Additional Insured Endorsements 15 25 Insurance Hazards 16 26 Maintenance of Premises 16 27 Other Rent Credit 18 28 Damage, Destruction or Nuisance 18 29 Taxes 19 30 Payments of Obligations 19 31 Utilities and Services 19 32 Business License 20 33 Signs, Advertising and Approval of Name 20 34 No Assigning, Subleasing or Encumbering 20 35 Terms Binding on Successors 22 36 Default 23 37 Remedies 24 HB -80-Item 5. - 3 Table of Contents, continued 38 Cumulative Remedies 28 39 Waiver of Default 29 40 City's Defaults/Lessee's Remedy 29 41 Consent 29 42 Holdover 30 43 Waiver of Claims 30 44 Inspection of Premises 30 45 City's Right to Lease Buyout 30 46 Photography 31 47 Hazardous Substances 31 48 Nondiscrimination 32 49 Sale of Alcoholic Beverages and Entertainment Prohibited 33 50 Liens 33 51 Installation and Removal of Trade Fixtures 34 52 Destruction 34 53 No Abatement of Rent During Repair Work 35 54 Eminent Domain 35 55 Relocation and Assistance, Business Goodwill and Leasehold Bonus Value 36 56 Quitclaim Deed 36 57 Restoration and Surrender of Premises/Title to Improvements 37 58 Force Majeure - Unavoidable Delays 38 59 Reserve 38 60 Deliveries of Supplies 39 61 Employee Parking 39 62 Conflict of Interest 39 63 Notice 39 64 Compliance with Laws 40 65 Interpretation of this Lease 41 66 Survival 41 67 Modification 41 68 Section Headings 41 69 Brokers 42 70 Independent Contractor 42 71 Attorney's Fees 42 72 Legal Services Subcontracting Prohibited 42 73 Governing Law 43 74 Duplicate Original 43 75 Entirety 43 Ii HB -81-Item 5. - 4 LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND KOKOMO'S SURF SIDE GRILL, INC., A CALIFORNIA CORPORATION FOR A BEACH FOOD CONCESSION ON THE FIRST FLOOR LEVEL OF THE MARINE SAFETY EDUCATION CENTER THIS LEASE (the "Lease") is made and entered into effective , 2017 by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and KOKOMO'S SURFSIDE GRILL, a California corporation ("Lessee"). WHEREAS, City wishes to lease certain real property (the "Property"), commonly known as the beach food concession on the first floor level of the Marine Safety Education Center located at 21071 Pacific Coast Highway, Huntington Beach, California, and other related improvements (collectively referred to as the "Improvements"). The term "Premises" as used in this Lease shall mean both the Property and the Improvements. Lessee desires to lease the Premises in the manner set forth below. NOW, THEREFORE, the parties covenant and agree as follows: SECTION 1. SUPERSEDING OF PRIOR LEASE This Lease shall supersede and replace any existing lease agreement(s) for the Premises currently entered into by and between the parties and all supplemental agreement(s) entered into by and between the parties regarding the existing lease agreement(s). SECTION 2. GRANT OF CONCESSION ON THE PREMISES City, pursuant to the terms of this Lease, grants to Lessee for the purposes stated herein, the right, privilege and duty to equip, operate and maintain a concession open to the public located on the Premises (hereinafter sometimes referred to as the "Concession"). The Concession must be in operation for a minimum of One Hundred Eighty (180) days each calendar year. An operational day is defined as being open for business a minimum of four (4) consecutive hours. Lessee shall 1 17-5754/1576271RLS 7/6/17/DO HB -82-Item 5. - 5 not use the Premises for any other purpose or business. The legal description of the Premises is set forth in Exhibit "A", which is attached and incorporated herein by this reference. A map depicting the Premises is set forth in Exhibit "B", which is attached hereto and incorporated herein by this reference. This Lease is not intended to confer third-party beneficiary status to anyone. SECTION 3. RESERVATIONS, ENCUMBRANCES AND RIGHTS-OF-WAY (a) City expressly reserves all natural resources in, on, or two hundred fifty (250) feet under the Premises, including, without limitation, oil, coal, natural gas and other hydrocarbons, minerals, aggregates, timber and other geothermal resources, as well as the right to grant leases or other contractual arrangements in and over the Premises for the extraction of such natural resources. However, such leasing or other arrangement shall be neither inconsistent nor incompatible with the rights or privileges of Lessee under this Lease. (b) City expressly reserves a right to enter upon the Premises with as much advance written, verbal or electronic notice as possible to Lessee for any reason associated with public health, safety or welfare, or for the protection of life, limb or property. In all other cases unless otherwise specifically set forth herein, City reserves the right for such entry but City shall give Lessee at least twenty-four (24) hours advance written, verbal or electronic notice. City shall have a right of reasonable access to the Premises across Lessee owned, controlled or occupied lands adjacent to the Premises, if any, for any purpose associated with this Lease. (c) City expressly reserves the right to lease, convey, or encumber the Premises, in whole or in part, for any purpose not inconsistent or incompatible with the rights or privileges of Lessee under this Lease. In addition, Lessee agrees to subordinate the Lease to any existing or future City financing regarding the Premises or any portion 2 17-5754/157627/RLS 7/6/17/DO HB -83-Item 5. - 6 thereof. Lessee also agrees to cooperate and provide any documentation necessary for City to obtain any such financing. (d) This Lease is subject to pre-existing contracts, leases, licenses, easements, encumbrances and claims affecting the Premises and it is made without warranty by City of title, condition or fitness of the land for the stated or intended use. SECTION 4. TIME OF ESSENCE Time shall be of the essence of this Lease and each and all of its terms, covenants or conditions in which performance is a factor. SECTION 5. TERM This Lease shall commence at 12:01 a.m. on , 2017, for a ten (10) year term, which shall end at 11:59 p.m. on , 2027, unless extended, or sooner terminated, as provided for herein. At City's sole option, the term may be extended for an additional five (5) year period. SECTION 6. CONDITIONS OF PREMISES AS IS The taking of possession of the Premises by Lessee shall, in itself, constitute acknowledgment that the Premises are in good and tenantable condition. Upon taking possession of the Premises, Lessee agrees to accept the Premises in their presently existing condition, "as is," and agrees that City shall not be obligated to make any alterations, additions or betterments thereto. SECTION 7. DURATION OF PUBLIC FACILITIES By entering into this Lease, City makes no stipulation as to the type, size, location or duration of public facilities (excluding the Premises), including, without limitation, any City parking lots to be maintained on property owned, controlled or occupied by City. 3 17-5754/157627/ALS 7/6/17/1)0 HB -84-Item 5. - 7 SECTION 8. ADDITIONS, ALTERATIONS AND REMOVAL (a) No modifications, alterations or additions to the Premises, including, without limitation, construction of Improvements or changes to structural design, landscape design, or interior or exterior furnishings, shall be constructed or made by Lessee without Lessee first obtaining the prior written approval of City, which will not be unreasonably withheld. (b) Except as provided under this Lease, no alteration or removal of existing Improvements on or natural features of the Premises shall be undertaken without Lessee first obtaining the prior written approval of City. (e) Lessee's obligation to obtain City's prior written approval is separate and independent of Lessee's obligation to obtain any permits from City, such as, without limitation, a building permit. SECTION 9. CITY'S CONTRACT ADMINISTRATOR City's Deputy Director of Business Development, or his or her designee, shall be City's Contract Administrator for this Lease with the authority to act on behalf of City for the purposes of this Lease, and all City approvals and notices required to be given herein to City shall be so directed and addressed. SECTION 10. RENT Lessee agrees to pay to City as rent (the "Rent") for the use and occupancy of the Premises a sum equal to the following percentages of the amount of "Gross Sales," as defined in Section 12 below: • Low Season (January, February, November and December): = 4.0% • Mid Season (March, April and October): = 9.5% • Peak Season (May, June, July, August, and September): = 11.5% 4 17-5754/157627/RLS 7/6/17/DO HB -85-Item 5. - 8 • Minimum Base Rent: o Low Season: = $250 month plus annual CPI increases o Mid Season: = $750 per square foot plus annual CPI increases o Peak Season: = $1,500 per square foot plus annual CPI increases Monthly rent will equal minimum base rent or percentage of gross sales for the month — whichever is greater. In no event shall the Rent payable to City pursuant to this Lease be less than the Minimum Base Rent. Lessee shall pay the Rent monthly to City at the City Treasurer's Office, P.O. Box 711, Huntington Beach, California, 92648, or at such other place or places as City may from time-to- time designate by written notice delivered to Lessee. Lessee shall pay the Rent, which must be received by the City Treasurer within fifteen (15) calendar days after the end of the month for which the Rent is being paid, or on the next business day if the fifteenth day falls on a weekend or holiday. SECTION 11. LATE CHARGE AND PENALTY If the Rent is not received by the City Treasurer within sixteen (16) calendar days after the end of the month for which the Rent is being paid, or the next business day if the twentieth day falls on a weekend or holiday, Lessee shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half percent (1 1/4%) penalty per month shall be added for each month the Rent is due but unpaid. With respect to any other payments required by Lessee, a one and a half percent (1 1/2%) penalty per month shall be added for each month such payment hereunder is due but unpaid. 5 17-575411576271RLS 7/6/17/00 HB -86-Item 5. - 9 SECTION 12. GROSS SALES DEFINED For the purpose of this Lease, the term "Gross Sales" shall mean the total price of all merchandise, food and beverages, or services sold or rendered, or equipment rented, in, on, or from the Premises by Lessee, or anyone contracting with Lessee, including, without limitation, its agents or sublessees (collectively or individually, "Lessee Party(ies)"), whether wholesale or retail, whether for cash or on credit, and if on credit whether or not paid, and whether in exchange for any other product, commodity, service, commercial paper or forbearance, and shall include, without limitation, the following: (a) All revenues, receipts, commissions or proceeds from on-line sales by Lessee Party(ies), and/or from all public telephones, vending, weighing and all other machines owned, operated, or leased to or by Lessee Party(ies) in, on, or from the Premises; (b) All revenues, receipts, commissions or proceeds from sales based on orders solicited or taken, in, on, or from the Premises for merchandise, food and beverages, or services to be delivered or rendered off, or from sources outside, the Premises, including, without limitation, all orders taken in, on, or from the Premises although the orders may be filled elsewhere; (c) All revenues, receipts, commissions or proceeds from the renting of equipment of any kind in, on, or from the Premises; and (d) All revenues, receipts, commissions or proceeds generated from offsite but delivered through the Concession. (e) All revenues, receipts, commissions or proceeds made by Lessee Party(ies) or their employees or others acting on their behalf for the rendition of services of any kind whatsoever, made in, on, or from the Premises. 6 17-5754/157627/RLS 7/6/17/DO HB -87-Item 5. - 10 (I) All other revenues, receipts, commissions or proceeds generated by, arising or derived whatsoever from the use of the Premises or derived whatsoever from any business conducted in, on, or from the Premises. For purposes of computing the Gross Sales figure on which to calculate the Rent, the amount of Gross Sales shall start over at zero dollars on January 1 of each year. If the Lease commences on any date other than January 1, the Gross Sales calculation begins from such commencement date and runs through December 31 of such Lease commencement year. SECTION 13. GROSS SALES EXCLUSIONS Gross Sales shall not include the following items, and Lessee may deduct such items from Gross Sales to the extent they have been included therein or have been included in a prior computation of Gross Sales on which the Rent has been paid under this Lease to City: (a) Any sales, excise or other taxes otherwise includable in Gross Sales and which become part of the total price of merchandise, food and beverages, or services sold or rendered, or equipment rented, in, on, or from the Premises where Lessee must account for and remit the taxes to the government entity or entities which impose them, but only if such taxes are added to the total price and collected from customers; (b) Any transfer of trade inventory from the Premises to the manufacturer or supplier from whom it was obtained by Lessee; (c) Sales of Trade Fixtures (as defined in Section 51 below); (d) Sums and credits received in the settlement of claims for loss of or damage to trade inventory or Trade Fixtures; and (e) Any sales resulting in a cash or credit refund to a customer in the ordinary course of business. 7 17-5754/1576271RLS 7/6/17/DO HB -88-Item 5. - 11 SECTION 14. BOOKS AND RECORDS Lessee shall keep true and accurate books and records showing all of its business transactions in separate records of account for the Concession in a manner acceptable to City, and City and/or its designated representatives shall have the right, at all reasonable times, to inspect such books and records including, without limitation, State of California sales or use tax returns or other State return records, and Lessee hereby agrees that all such records and instruments shall promptly be delivered and made available to City and/or its designated representatives within thirty (30) days of receiving written request therefor. Lessee shall furnish to City and/or its designated representatives copies of its quarterly California sales and use tax returns at the time each is filed with the State of California. The books and records shall show the total amount of Gross Sales made each calendar month in, on, or from the Premises and any exclusions listed in Section 13 above. All sales and charges shall be recorded by means of cash registers which display the amount of the transaction certifying the amount recorded. The register shall be equipped with devices which log in daily sales totals and which shall record on tapes the transaction numbers and sales details. At the end of each day the tape shall record the total sales for that day. Lessee agrees to maintain on the Premises, or another location subject to the prior written approval of City, all records, books of account and cash register tapes, showing, or in any way pertaining to the Gross Sales made in, on, or from the Premises during such calendar month, including, without limitation, State of California sales or use tax returns or other State tax returns, for a period of five (5) years following the close of each calendar month. SECTION 15. STATEMENT OF GROSS SALES/AUDIT At the time specified in Section 10 of this Lease for the payment of the Rent, Lessee shall deliver to City a true and accurate statement signed by Lessee or by an authorized employee of 8 17-5754/157627/RLS 7/6/17/DO HB -89-Item 5. - 12 Lessee showing the total Gross Sales and any exclusions listed in Section 13 above made during the preceding calendar month and the amount of the Rent then being paid calculated on such Gross Sales pursuant to this Lease. The acceptance by City of any monies paid to City by Lessee as the Rent, as shown by any statement furnished by Lessee, shall not be construed as an admission of the accuracy of the statement, or of the sufficiency of the amount of the Rent payment, and City shall be entitled to review the adequacy of such payment as set forth herein. By the end of each January, Lessee shall deliver to City a year-end statement showing the total amount of Gross Sales made in, on, or from the Premises in each month of the preceding year, the total of any exclusions, the total Rent paid to City for each of those months, all with year-end totals. City may at any time within three (3) years after receiving the year-end statement, at its sole cost and expense, cause all records, books of account and cash register tapes for the year purportedly covered by the statement, to be audited by City or an accountant selected by City. Lessee shall, within thirty (30) days of receiving written notice of City's desire for such an audit, deliver and make available all such records, books of account and cash register tapes to City or its designated representative for City's use in the audit and/or for copying. If the audit discloses that Gross Sales were understated and/or exclusions overstated, Lessee shall immediately pay the additional Rent, together with a penalty thereon from the date it was due at the penalty rate set forth in Section 11 above. Furthermore, Lessee shall promptly on demand reimburse City for the full cost and expense of the audit should the audit disclose that the questioned year-end statement understated Gross Sales (including an overstatement of exclusions) or the Rent by any amount greater than Two Hundred Fifty Dollars ($250.00). City further reserves the right to examine and audit all such records, books of account and cash register tapes at any time during the three (3) year period following the expiration or termination of this Lease. In addition, City shall have the right to enter upon the Premises during business hours and 9 17-5754/157627/RM 7/6/17/D0 HB -90-Item 5. - 13 with two (2) hours advance written, verbal or electronic notice to Lessee to perform any audit or inspection function with respect to this Lease. Lessee, its bookkeeper and/or accountant shall respond to all questions and inquiries of City with respect to the books, records, statements and other documentation being examined, and shall promptly provide other further documentation as may be required by City. City is entitled to take statements by deposition under oath of Lessee, its officers, bookkeepers and/or accountants or any person who prepared the books, records, statements and other documentation required to be provided by Lessee under this Lease. SECTION 16. SECURITY DEPOSIT Upon execution hereof, Lessee shall pay and maintain at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, a security deposit with City in a sum of not less than Two Thousand Five Hundred Dollars ($2,500.00) to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, the repair and maintenance of the Premises as provided herein. Such deposit shall be in the form of a cash bond or an assignment of certificate of deposit (the "CD") or savings account to City, and shall be provided to the City Treasurer. The form of any such security deposit shall be approved by the City Attorney and the City Treasurer. No interest shall accrue on cash deposits to the benefit of Lessee, but interest shall accrue on a CD or savings account and shall be paid to Lessee under the terms of the CD or savings account. Lessee shall send a copy of each renewal of the CD to the City Treasurer to ensure that City has the records of each active deposit account. SECTION 17. RESERVED 10 17-5754/157627/RLS 7/6/17/DO HB -91-Item 5. - 14 SECTION 18. QUALITY OF SALES, RENTALS AND SERVICES Lessee, at its sole cost and expense, shall equip, operate, manage and maintain the Premises and Concession and shall keep the same equipped and maintained in a manner acceptable to City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. It is the intent of City that the Concession's services be provided in a manner to meet the needs of the visiting public, and should City deem the Concession's hours of operation and/or food, merchandise, services or rentals inadequate to meet such needs, City may require Lessee to make such changes requested by City. Lessee shall not use or permit the Premises to be used, in whole or in part, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period for any purpose other than as herein set forth, without the prior written consent of City. All foods and beverages shall be sold in recyclable paper or plastic containers. No pull-top cans or Styrofoam containers are to be vended or dispensed from the Premises by Lessee. City may from time to time review the items sold and containers or utensils used or dispensed by Lessee for purposes of monitoring compliance with this section. City in its sole discretion reserves the right to prohibit Lessee's sale, provision or rental of any item or service rendered or performed, which it deems objectionable or offensive, beyond the scope deemed necessary for proper service to the public, inappropriate for sale, provision or rental by the Concession, or of inferior quality. SECTION 19. INDEMNIFICATION, DEFENSE AND HOLD HARMLESS AGREEMENT Lessee hereby agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind 11 17-575411576271RLS 7/6/17/DO HB -92-Item 5. - 15 or nature) arising out of or in connection with (1) the use or occupancy of the Premises by Lessee, its officers, employees or agents, or (2) the death or injury of any person or the damage to property caused by a condition of the Premises, or (3) the death or injury of any person or the damage to property caused by any act or omission of Lessee, its officers, employees or agents, or (4) any failure by Lessee to keep the Premises in a safe condition, or (5) Lessee's (or Lessee's agents and/or sublessees, if any) performance of this Lease or its failure to comply with any of its obligations contained in this Lease by Lessee, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee shall hold all Trade Fixtures, personal property and trade inventory on the Premises at the sole risk of Lessee and save City harmless from any loss or damage thereto by any cause whatsoever, except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. SECTION 20. WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE Lessee acknowledges awareness of Section 3700 et seq. of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. Lessee covenants that it shall comply with such provisions prior to the commencement of this Lease. Lessee shall obtain and furnish to City workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. Lessee shall require all sublessees and contractors to provide such workers' compensation and employers' liability insurance for all of the sublessees' and contractors' employees. Lessee shall furnish to City a certificate of waiver of subrogation under the terms of the 12 17-5754/1576271RLS 7/6/17/DO HB -93-Item 5. - 16 workers' compensation and employers' liability insurance and Lessee shall similarly require all sublessees and contractors to waive subrogation. SECTION 21. GENERAL PUBLIC LIABILITY INSURANCE In addition to the workers' compensation and employers' liability insurance and Lessee's covenant to defend, hold harmless and indemnify City, Lessee shall obtain and furnish to City, a policy of general public liability insurance, including motor vehicle coverage against any and all claims arising out of or in connection with the Premises. This policy shall indemnify Lessee, its officers, employees and agents, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Premises, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of One Million Dollars ($1,000,000.00) per occurrence. If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than One Million Dollars ($1,000,000.00) for the Premises. This policy shall name City, its officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Lease shall be deemed excess coverage and that Lessee's insurance shall be primary. Under no circumstances shall said above-mentioned insurance contain a self-insured retention, or a "deductible" or any other similar form of limitation on the required coverage. SECTION 22. PROPERTY INSURANCE Lessee shall provide before commencement of this Lease and shall obtain and furnish to City, at Lessee's sole cost and expense, property and fire insurance with extended coverage endorsements thereon, by a company acceptable to City authorized to conduct insurance business in California, in an amount insuring for the full insurable value of all Improvements, Trade Fixtures, 13 17-5754/157627/RLS 7/6/17/DO HB -94-Item 5. - 17 personal property whether or not owned or leased by Lessee, and all trade inventory in or on the Premises against damage or destruction by fire, theft or the elements. This policy shall contain a full replacement cost endorsement naming Lessee as the insured and shall not contain a coinsurance penalty provision. The policy shall also contain an endorsement naming City as an Additional Insured. The policy shall contain a special endorsement that such proceeds shall be used to repair, rebuild or replace any such Improvements, Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory so damaged or destroyed; and if not so used, such proceeds (excluding any insurance proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee, and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The policy shall also contain a special endorsement that if the Premises are so destroyed triggering the parties' ability to terminate as set forth in Section 52 (Destruction) below, and either party elects to terminate the Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as City sees fit. This policy shall also contain the following endorsements: (a) The insurer shall not cancel or reduce the insured's coverage without (30) days prior written notice to City; (b) City shall not be responsible for premiums or assessments on the policy. A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with City prior to the execution of this Lease. At least thirty (30) days prior to 14 17-5754/157627/RLS 7/6/17/DO HB -95-Item 5. - 18 the expiration or termination of any such policy, a signed and complete certificate of insurance showing that coverage has been renewed shall be filed with City. SECTION 23. INCREASE IN AMOUNT OF GENERAL PUBLIC LIABILITY AND PROPERTY INSURANCE Not more frequently than once every two (2) years, if, in the sole opinion of City, the amount and/or scope of general public liability insurance in Section 21 above and/or property insurance coverage in Section 22 above at that time is not adequate, Lessee shall increase the insurance coverage as reasonably required by City. SECTION 24. CERTIFICATES OF INSURANCE; ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this Lease, Lessee shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease; these certificates shall: (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force; and (c) shall promise to provide that such policies shall not be canceled or modified without thirty (30) days' prior written notice of City; however ten (10) days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance in Section 22 above. Lessee shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period. The requirement for carrying the foregoing insurance coverages shall not derogate from Lessee's defense, hold harmless and indemnification obligations as set forth in this Lease. City or 15 17-5754/157627/RLS 7/6/17/DO HB -96-Item 5. - 19 its representatives shall at all times have the right to demand the original or a copy of any or all the policies of insurance. Lessee shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. SECTION 25. INSURANCE HAZARDS Lessee shall not commit or permit the commission of any acts on the Premises nor use or permit the use of the Premises in any manner that will increase the existing rates for, or cause the cancellation of any liability, property, or other insurance policy for the Premises or required by this Lease. Lessee shall, at its sole cost and expense, comply with all requirements of any insurance carrier providing any insurance policy for the Premises or required by this Lease necessary for the continued maintenance of these policies at reasonable rates. SECTION 26. MAINTENANCE OF PREMISES; TENANT IMPROVEMENTS City's maintenance responsibilities of the Premises shall be limited to maintaining all sewers and drain lines, roofs and attached public restrooms (if they exist). Except as set forth in the preceding sentence, Lessee agrees to maintain the Premises in good order and repair, at Lessee's sole cost and expense, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, pursuant to the City's maintenance standards. A copy of the quarterly evaluation summary sheet setting forth the City's maintenance checklist is attached as Exhibit "C", and incorporated herein by this reference. Except as provided above, Lessee, at its sole cost and expense, shall perform any maintenance and repairs including, without limitation, facility maintenance and landscape maintenance on the Premises. Lessee's obligation includes, without limitation, maintaining and operating the Premises and adjacent areas to a distance of not more than fifty (50) feet, in a clean, safe, wholesome and sanitary condition free of trash, garbage or obstructions of any kind and in compliance with any and all present and future laws, general rules or regulations of any governmental authority now, or at any 16 17-5754/157627/RIS 7/6/17/DO HB -97-Item 5. - 20 time during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, in force, relating to sanitation or public health, safety or welfare, or for the protection of life, limb or property; and Lessee shall at all times faithfully obey and comply with all laws, rules and regulations applicable thereto. Lessee, at its sole cost and expense, shall remedy without delay any defective, dangerous or unsanitary condition(s) caused by Lessee or anyone related thereto. Provided, however, that Lessee shall have no obligation to repair or maintain sewer lines or respond to sewer leaks. Lessee shall paint, stain or seal the Premises' exterior surfaces a minimum of every three (3) years, unless City determines in its sole discretion that such work shall be done on a more frequent basis. All exterior metal surfaces, except the roof, shall be painted with rust resistant paint no less than once every other year. Any and all graffiti on the Premises shall be removed by Lessee, at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice thereof or of Lessee becoming aware of such graffiti. In addition, with or without notice from City, Lessee shall, at its sole cost and expense, repair and/or replace any broken glass within forty-eight (48) hours of its becoming broken, regardless of cause, except by fault of City. Except as provided above for graffiti and broken glass, Lessee, at its sole cost and expense and with or without notice from City, shall repair and/or replace all damage or destruction to the Premises caused by act(s) of vandalism as soon as possible but in no event later than fourteen (14) days after the date such damage or destruction occurred. Lessee, at its sole cost and expense, shall repair and/or replace all other damage or destruction to the Premises, regardless of cause, except by fault of City. Lessee shall comply with all written notices served by City with regard to the care and maintenance of the Premises. Any written notice hereunder shall specify the work to be done and the period of time deemed to be reasonably necessary for completion of such work. Should Lessee fail to commence making the necessary repairs within seven (7) days after receiving such notice, or 17 17-5754/157627/RLS 7/6117/DO HB -98-Item 5. - 21 within twenty-four (24) hours of the glass becoming broken in the case of broken glass, or fail to diligently proceed to complete the necessary repairs within the period of time reasonably specified in the City's notice, or within forty-eight (48) hours of the glass becoming broken in the case of broken glass, or within the forty-eight (48) hour time period for removing graffiti, or within fourteen (14) days of the date that the vandalism damage or destruction occurred, City shall proceed to cause the required work to be performed, and Lessee shall promptly reimburse City for the cost of labor and materials thereof and pay City a penalty on such costs at the penalty rate set forth in Section 11 above from the date the costs were incurred by City to the date they are reimbursed to City by Lessee. Lessee hereby expressly waives the right to make repairs at the expense of City and the benefit, if any, of the provisions of Sections 1941 and 1942 of the California Civil Code relating thereto. SECTION 27. OTHER RENT CREDIT City in its sole discretion may decide to give Lessee other rent credit if Lessee undertakes (1) any repair or maintenance obligation of City under this Lease, or (2) any work City in its sole discretion deems necessary and appropriate. Prior to Lessee undertaking any such work, City must agree in writing to the amount of and procedures for the rent credit, the work to be done by Lessee and the cost of such work. City will provide a Ten Thousand One Hundred Sixty-four Dollars Nineteen Cent ($10,164.19) rent credit to Lessee for improvements undertaken by Lessee. SECTION 28. DAMAGE, DESTRUCTION OR NUISANCE Lessee shall not commit or permit the commission by others of any damage or destruction of on, or to the Premises and/or Concession. Lessee shall not maintain, commit or permit the maintenance or commission of any nuisance as defined in Section 3479 and/or Section 3480 of the 18 17-5754/157627/RLS 7/6/17/DO HB -99-Item 5. - 22 California Civil Code on the Premises; and Lessee shall not use or permit the use of the Premises for any unlawful purpose. SECTION 29. TAXES This Lease may create a possessory interest in property, which is subject to taxation. In the event that such possessory interest is created, Lessee agrees to be subject to the payment of and to pay taxes levied on such interest, at its sole cost and expense. Lessee also agrees to pay, at its sole cost and expense, before they become delinquent all other lawful taxes, assessments or charges, which at any time may be levied by any governmental agency including, without limitation, the State, County, City or any tax or assessment levying body upon any interest in this Lease, or any possessory right which Lessee may have in or to the Premises, by reason of Lessee's use or occupancy thereof or otherwise, as well as all taxes, assessments, and charges on Trade Fixtures, personal property and trade inventory in, on, or about the Premises. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. Lessee shall comply with all laws, regulations and ordinances regarding the collection of taxes due a government agency. SECTION 30. PAYMENT OF OBLIGATIONS Lessee shall promptly pay, at its sole cost and expense, before they become delinquent, any and all bills, debts, liabilities and obligations incurred by Lessee in connection with Lessee's occupation and use of the Premises and/or operation of the Concession. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. SECTION 31. UTILITIES AND SERVICES Excluding any attached public restrooms, if they exist, Lessee shall be responsible for the payment of all utility charges, including, without limitation, gas, electricity, water, telephone service, cable TV service, and the furnishing of all necessary refuse and garbage containers and the removal and disposal of all rubbish, refuse and garbage resulting from the operation of the Premises 19 17-57541157627/RLS 7/6/17/DO HB -100-Item 5. - 23 and/or the Concession. All such rubbish, refuse and garbage removed shall be disposed of in accordance with applicable laws and local ordinances. All trash containers and/or trash bins shall be adequately screened and located to the satisfaction of City. For the purposes of this Section, sewage disposal shall be construed as a utility. All such charges shall be paid by Lessee directly to the provider of the service and shall be paid as they become due and payable. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. SECTION 32. BUSINESS LICENSE Lessee shall maintain a business license from City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. SECTION 33. SIGNS, ADVERTISING AND APPROVAL OF NAME City shall have the right to approve in its sole discretion and at any time require Lessee to change or remove signs, names, placards, decorations or advertising placed on, or inscribed, painted or affixed upon the Premises. Should City approve of any sign, name, placard, decoration or advertising, Lessee shall maintain the same at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period in good appearance and repair. All signs, names, placards, decorations or advertising must comply with all requirements of any governmental authority with jurisdiction. SECTION 34. NO ASSIGNING, SUBLEASING OR ENCUMBERING (a) Prohibition of Assignment. The parties acknowledge that City is entering into the Lease in reliance upon the experience and abilities of Lessee and its principals. Consequently, Lessee shall not voluntarily assign, encumber or otherwise transfer its interest in the Lease or in the Premises, or sublease all or any part of the Premises, or allow any other person or entity (except Lessee's authorized representatives) to occupy or use all or any part of the Premises without the prior written consent of 20 17-5754/157627/RLS 7/6/17/DO HB -101-Item 5. - 24 City, which consent shall not be unreasonably withheld. Provided, however, that City's consent shall not relieve Lessee from any and all of its obligations, liabilities, duties or responsibilities under this Lease. Any assignment, encumbrance, occupation or use, sublease or other transfer without such consent shall be voidable and, at City's sole discretion, shall constitute a Default of this Lease. (b) Consent to Transfer. City's consent to any assignment, encumbrance, occupation or use, sublease or other transfer is subject to Lessee providing City with evidence satisfactory to City that the proposed, assignee, encumbrancer, occupier or user, sublessee or other transferee has suitable financial strength, experience and character for operation and control of the Premises and the Concession and that the use of the Premises by the proposed assignee, encumbrancer, occupier or user, sublessee or other transferee is consistent with that specified herein, and is commercially reasonable. Any proposed assignee, encumbrancer, occupier or user, sublessee or other transferee shall agree to abide by the terms and conditions of the Lease including, without limitation, all the obligations, liabilities, duties and responsibilities of Lessee, and other conditions imposed upon it pursuant to law. An approval by City to one assignment, encumbrance, occupation or use, sublease or other transfer shall not be deemed to be an approval to any other assignment, encumbrance, occupation or use, sublease or other transfer. (c) Voluntary assignment defined. Except as otherwise expressly provided herein, any dissolution, merger, consolidation or reorganization of Lessee, or the sale or other transfer resulting in a transfer of a controlling percentage of the capital stock of Lessee (other than a transfer by will, devise, bequest, intestate succession, a transfer to or between the family members of Lessee, or a transfer to or between one or more 21 17-5754/157627/RLS 7/6117/DO HB -102-Item 5. - 25 trusts for the benefit of Lessee and/or Lessee's family members, where applicable) shall be deemed a voluntary assignment. (d) Exceptions. Notwithstanding the foregoing paragraphs or anything to the contrary contained herein, City's consent shall not be required for an assignment or subleasing to an Affiliate, Subsidiary or Successor of Lessee (for purposes hereof, an "Affiliate," a "Subsidiary" and a "Successor" of Lessee are defined as follows: (a) an "Affiliate" is any corporation which directly or indirectly controls or is controlled or is under common control with Lessee (for this purpose, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities or by contract or otherwise), (b) a "Subsidiary" shall mean any corporation or partnership not less than twenty-five percent (25%) of whose outstanding stock shall, at the time, be owned directly or indirectly by Lessee and which is at least as creditworthy as Lessee, and (c) a "Successor" shall mean a corporation or partnership in which or with which Lessee is merged or consolidated, in accordance with applicable statutory provisions for merger or consolidation of corporations, or a corporation or partnership acquiring a substantial portion of the property and assets of Lessee. SECTION 35. TERMS BINDING ON SUCCESSORS All the terms, covenants and conditions of this Lease shall inure to the benefit of and be binding upon the parties and their successors, including, without limitation, their assignees, encumbrancers, occupiers or users, sublessees or other transferees. The provisions of this Section shall not be deemed as a (1) waiver of any of the prohibitions and conditions against assignments, encumbrances, occupations or uses, subleases or other transfers hereinbefore set forth, or (2) City's 22 17-5754/157627/RLS 7/6/17/DO HB -103-Item 5. - 26 consent thereto. If more than one lessee is a party to this Lease, the obligations of the lessees shall be joint and several. Even if City's consent is not required, Lessee shall immediately provide City with written notice of any, assignment, encumbrance, occupation or use, sublease or other transfer. SECTION 36. DEFAULT The occurrence of any one or more of the following events shall constitute a material default and breach ("Default") of this Lease by Lessee: (a) Lessee's failure to make any payment of the Rent or other payment required to be made by Lessee at the time required for payment under this Lease. (b) Lessee's failure to obtain or maintain the insurances and/or the security deposit as required under this Lease. (c) Lessee's vacating or abandonment of the Premises during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. Closure of the Concession for more than a combined total of one hundred eighty (180) days in a calendar year, minus any days of closure of the Concession caused by City, shall be deemed an abandonment of the Premises. (d) Lessee's violation of Section 19 (Indemnification, Defense and Hold Harmless Agreement), Section 34 (No Assigning, Subleasing or Encumbering), Section 47 (Hazardous Substances), Section 48 (Nondiscrimination), Section 49 (Sale of Alcoholic Beverages and Entertainment Prohibited), Section 62 (Conflict of Interest) or Section 64 (Compliance with Laws). (e) The insolvency of Lessee as evidenced by a receiver being appointed to take possession of all or substantially all of Lessee's assets located at or on the Premises or of Lessee's interest in this Lease, or the making by Lessee of a general arrangement or assignment for the benefit of creditors, or Lessee's filing a petition in 23 17-5754/1576271RLS 7/6/17/DO HB -104-Item 5. - 27 bankruptcy, whether voluntary or involuntary, or the attachment, execution or the judicial seizure of substantially all of Lessee's assets located at or on the Premises or of Lessee's interest in the Lease. (f) Lessee's failure to observe or perform any other term, covenant, obligation, duty, responsibility or condition of this Lease to be observed or performed by Lessee when such failure shall continue for a period of thirty (30) days after City's giving written notice to Lessee, or such earlier period if specifically set forth in this Lease; however, if the nature of such failure is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in Default if Lessee notifies City of the length of the additional time required to cure and receives City's written approval of the additional time required, which approval will not be unreasonably withheld, and commences such cure within such thirty (30) day period and diligently proceeds with such cure to completion during such additional time period approved by City. SECTION 37. REMEDIES (a) Cumulative Nature of Remedies. In the event of any Default by Lessee, City shall have the remedies described in this Section in addition to all other rights and remedies provided by law or equity, to which City may resort cumulatively or in the alternative: (1) Reentry without Termination. City may at City's sole discretion reenter the Premises, and, without terminating the Lease, at any time and from time to time relet the Premises or any part or parts of them for the account and in the name of Lessee or otherwise. Any relating may be for the remainder of the term or for a longer or shorter period. City may in City's sole discretion 24 17-5754/157627/RLS 7/6/17/DO HB -105-Item 5. - 28 eject all persons or eject some and not others or eject none. In addition, City may in its sole discretion remove some or all of the Trade Fixtures, personal property and trade inventory from the Premises. City may store such removed Trade Fixtures, personal property and trade inventory in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account of and in the name of Lessee. City shall apply all rents from reletting as follows: first, to the payment of reasonable expenses (including brokers' commissions) paid or incurred by or on behalf of City in recovering possession, placing the Premises in good condition, and preparing or altering the Premises for reletting; second, to the reasonable expense of securing new subtenants; third, to the fulfillment of Lessee's covenants to the end of the term. City may execute any leases or subleases made under this provision either in City's name or in Lessee's name and City shall be entitled to all rents from the use, operation or occupancy of the Premises. Lessee shall nevertheless pay to City on the dates specified in this Lease the equivalent of all sums required of Lessee under this Lease, plus City's expenses, less the proceeds of any reletting or attornment. (2) Termination. In the event of a Default by Lessee, City may at City's sole discretion terminate this Lease by giving Lessee written notice of termination. In the event City terminates this Lease, City may recover possession of the Premises (which Lessee shall immediately surrender and vacate upon demand) and remove all persons therefrom, and Lessee shall comply with, without limitation, Sections 56 and 57 below. City also shall be entitled to recover as damages all of the following: 25 17-5754/157627/RLS 7/6/17/DO HB -106-Item 5. - 29 (A) The worth at the time of the award of any unpaid Rent or other charges which have been earned at the time of termination; (B) The worth at the time of the award of the amount by which the unpaid Rent (each month's Rent would be calculated as the average Rent for that same month in the preceding years, or if Lessee did own/operate the Concession in the preceding years, then each month's Rent would be calculated as the average of all months Lessee owned/operated the Concession) and other charges which would have been earned after termination until the time of the award exceeds the amount of the loss of such rental and other charges that Lessee proves could have been reasonably avoided; (C) The worth at the time of the award of the amount by which the unpaid Rent (each month's Rent would be calculated as the average Rent for that same month in the preceding years, or if Lessee did not own/operate the Concession in the preceding years, then each month's Rent would be calculated as the average of all months Lessee owned/operated the Concession) and other charges for the balance of the term after the time of the award exceeds the amount of the loss of such rental and other charges that Lessee proves could have been reasonably avoided; (D) Any other amount necessary to compensate City for the detriment proximately caused by Lessee's failure to perform its obligations, liabilities, duties or responsibilities under this Lease; and 26 17-575411576271RLS 7/6/17/DO HB -107-Item 5. - 30 (E) At City's sole discretion, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law. As used in Sections 37(a)(2)(A) and (B) above, the "worth at the time of the award" shall be computed by allowing interest at the rate of twelve percent (12%) per annum. As used in Section 37(a)(2)(C) above, the "worth at the time of the award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%). The amount recoverable by City pursuant to Section 37(a)(2)(D) above shall include, without limitation, any costs or expenses incurred by City in maintaining or preserving the Premises after such Default. (3 ) Use of Personal Property. City may at City's sole discretion use the Trade Fixtures, personnel property and/or trade inventory located on, about or appurtenant to the Premises without compensation and without liability for use or damage, or store them in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account of and in the name of Lessee. (b) Election of Remedy. The election of one remedy for any one item shall not foreclose an election of any other remedy for another item or for the same item at a later time. (c) City's Right to Cure Lessee's Default. Upon continuance of any Default, City may in its sole discretion, but is not obligated to, cure such Default at Lessee's sole cost and expense. If City at any time, by reason of such Default by Lessee, pays any sum or does any act, the sum paid by City plus the reasonable cost of performing such act, together with a penalty thereon at the penalty rate set forth in Section 11 above 27 17-5754/1576271RLS 7/6/17/DO HB -108-Item 5. - 31 from the date the costs were incurred or the act performed by City to the date they are reimbursed to City by Lessee, shall be due as additional rent not later than five (5) days after service of a written demand therefor on Lessee, including reasonably detailed documentation of the amount owed. No such payment or act shall constitute a waiver of Default or of any remedy for Default or render City liable for any loss or damage resulting from any such act. (d) Waiver of Rights. Lessee hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or under any other present or future law, in the event Lessee is evicted or City takes possession of the Premises by reason of any Default by Lessee hereunder. Other Rights of City. No act of City, including, without limitation, City's entry on the Premises, efforts to relet the Premises, or maintenance of the Premises, shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Lessee by City or unless the termination thereof is decreed by a court of competent jurisdiction. Notwithstanding if City elects to continue the Lease in full force and effect after a Default by Lessee and to relet the Premises, City may at any time after such reletting elect to terminate this Lease for any such Default. SECTION 38. CUMULATIVE REMEDIES The remedies given to City in this Lease shall not be exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this Lease. City shall have the right to exercise any other right or remedy which City may have at law or in equity including, without limitation, City's rights under the unlawful detainer laws. 28 17-5754/157627/RLS 7/6/17/DO HB -109-Item 5. - 32 SECTION 39. WAIVER OF DEFAULT The waiver by City of any Default by Lessee of any of the provisions of this Lease shall not constitute a continuing waiver or a waiver of any subsequent Default by Lessee either of the same or another provision of this Lease. SECTION 40. CITY'S DEFAULTS/LESSEE'S REMEDY In the event City fails to perform any material obligation of City under the Rental Agreement within ninety (90) days after receiving written notice from Agent specifying the nature of such default, or, if the nature of City's obligation is such that more than ninety (90) days are required for its performance, if City fails to commence such performance within such ninety (90) day period and thereafter diligently prosecute the same to completion, then City shall be in default of this obligation. If City's default materially interferes with Agent's use of the Premises for its intended purpose. Agent shall have the option to terminate the Rental Agreement by giving City at least sixty (60) days' written notice of its intent to terminate. In such a situation, Agent must still comply with all of its obligations, liabilities, duties and responsibilities under the Rental Agreement, including, without limitation, paying any Rent due up to the time of termination and surrendering the Premises pursuant to Sections 53 and 54 below. This remedy of termination is Agent's sole and exclusive remedy for a default by City. SECTION 41. CONSENT When City's consent/approval is required under this Lease, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. SECTION 42. HOLDOVER Should Lessee hold over and continue in possession of the Premises after expiration or termination of this Lease, with or without the express prior written consent of City, Lessee's continued occupancy of the Premises shall constitute a month-to-month tenancy, subject to all the 29 17-5754/157627/RLS 7/6/17/DO HB -110-Item 5. - 33 terms and conditions of this Lease, at a monthly rent of one hundred ten percent (110%) of the previous calendar year's annual Rent divided by twelve (12) (or the average monthly Rent for all months Lessee owned/operated the Concession if Lessee has owned/operated the Concession for less than one (1) year) or that month's actual Rent, whichever is greater, and shall not constitute a renewal or extension of the Lease term. SECTION 43. WAIVER OF CLAIMS Lessee hereby waives any claim against City, its officers, elected or appointed officials, employees, agents or volunteers for damage or loss caused by any suit or proceeding directly or indirectly attacking the validity of this Lease, or any part thereof, or caused by any judgment or award in any suit or proceeding declaring this Lease null, void or voidable, or delaying the Lease or any part thereof from being carried out. SECTION 44. INSPECTION OF PREMISES Upon at least twenty-four (24) hours advance written, verbal or electronic notice given by City to Lessee, Lessee shall permit City or City's agents, representatives or employees to enter the Premises at all reasonable times for the purpose of inspecting, investigating and surveying the Premises to determine whether Lessee is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect City's interest in the Premises or to perform City's duties under this Lease. City also shall have the right in its sole discretion to do any and all work of any nature necessary for the preservation, maintenance and operation of property owned, controlled or occupied by City. Lessee shall be given reasonable notice when such work becomes necessary, and Lessee shall adjust the operation of the Concession in such a manner that City may proceed expeditiously. SECTION 45. RESERVE 30 17-5754/1576271RLS 7/6/17/DO HB -111-Item 5. - 34 SECTION 46. PHOTOGRAPHY Lessee acknowledges and agrees that City may grant permits to third parties engaged in the production of still and motion pictures and related activities to take photographs or videos of or on the Premises when such permission shall not interfere with the primary business of Lessee, all without providing Lessee with notice or requiring consent by Lessee. SECTION 47. HAZARDOUS SUBSTANCES Lessee represents and warrants that its use or occupation of the Premises shall not generate any Hazardous Substance (as defined below in this Section), and it shall not store or dispose on the Premises nor transport to or over the Premises any Hazardous Substance during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. The foregoing restrictions shall not be deemed to restrict or prohibit the use by Lessee of ordinary cleaning products as customarily used in Lessee's ordinary course of business at the Concession, provided that Lessee complies with all provisions of law as to the use, storage and disposal of such products. Lessee further agrees to clean up and remediate any such Hazardous Substance on the Premises, and agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with any such Hazardous Substance and any damage, loss, or expense or liability resulting from any such Hazardous Substance including, without limitation, all attorney's fees, costs and penalties incurred as a result thereof except any release caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as 31 17-5754/1576271RLS 7/6/17100 HB -112-Item 5. - 35 limitation upon the amount of indemnification to be provided by Lessee. "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as a hazardous or toxic waste, hazardous or toxic material, hazardous or toxic or radioactive substance, or other similar term, by any Federal, State or local environmental law, regulation or rule presently in effect or promulgated in the future, as such law, regulation or rule may be amended from time to time; and it shall be interpreted to include, without limitation, any substance which after release into the environment will or may reasonably be anticipated to cause sickness, death or disease. SECTION 48. NONDISCRIMINATION Lessee and its employees shall not discriminate because of race, religion, color, ancestry, sex, age, national origin or physical handicap against any person by refusing to furnish such person any accommodation, facility, rental, service or privilege offered to or enjoyed by the general public. Nor shall Lessee or its employees publicize the accommodation, facilities, rentals, services or privileges in any manner that would directly or inferentially reflect upon or question the acceptability of the patronage of any person because of race, religion, color, ancestry, sex, age, national origin or physical handicap. In the performance of this Lease, Lessee shall not discriminate against any employee or applicant for employment, because of race, religion, color, ancestry, sex, age, national origin or physical handicap. Lessee shall take affirmative action to ensure that applicants are employed and that employees are treated during employment, without regard to their race, religion, color, ancestry, sex, age, national origin or physical handicap. Such action shall include, without limitation, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including, without limitation, apprenticeship. Lessee shall post in conspicuous places, 32 17-5754/157627112LS 7/6/17/DO HB -113-Item 5. - 36 available to all employees and applicants for employment, notices setting forth the provisions of this Section. Lessee shall permit access to its records of employment, employment advertisements, application forms, and other pertinent data and records by City, the State Fair Employment Practices Commission or any other agency with jurisdiction over these matters, for the purpose of investigation to ascertain compliance with this Section. City may determine a violation of this Section to have occurred upon receipt of a final judgment having that effect from a court in an action to which Lessee was a party, or upon receipt of a written notice from the State Fair Employment Practices Commission or other government agency with jurisdiction over these matters that it has investigated and determined that Lessee has violated the Fair Employment Practices Act or other applicable discrimination law and has issued an order which has become final, or obtained an injunction. In the event of violation of this Section, City shall have the right to terminate this Lease, and any loss of revenue sustained by City by reason thereof shall be borne and paid for by Lessee, at its sole cost and expense. SECTION 49. SALE OF ALCOHOLIC BEVERAGES AND ENTERTAINMENT PROHIBITED Notwithstanding anything to the contrary, the sale or provision of alcoholic beverages and/or live entertainment in, on, or from the Premises is expressly forbidden, unless expressly permitted in writing by City in advance. For any proposed sale or provision of alcoholic beverages, Lessee must first obtain written City approval prior to submitting any request for approval to the Alcohol Beverage Commission. SECTION 50. LIENS Lessee shall keep the Premises free and clear from any and all liens, including, without limitation, mechanics' or materialmens' liens, claims and demands for work performed, materials 33 17-5754/157627/RLS 716/17/DO HB -114-Item 5. - 37 furnished, or operations conducted on or about the Premises or by reason of any use or occupancy by Lessee, or any person claiming under Lessee. When applicable, Lessee shall cause a notice of nonresponsibility to be posted and recorded pursuant to California Civil Code Section 3094. SECTION 51. INSTALLATION AND REMOVAL OF TRADE FIXTURES Lessee shall have the right during the entire term of this Lease or any renewals or extensions thereof, at Lessee's sole cost and expense, to install or affix in, to, or on the Premises any machinery, equipment and other objects (the "Trade Fixtures"), for use in Lessee's trade or business as Lessee may deem advisable. Any and all such Trade Fixtures that can be removed without structural damage to the Premises shall, subject to Section 57 below, remain the property of Lessee and may be removed by Lessee at any time prior to the expiration or termination of this Lease, provided Lessee repairs any damage caused by the removal. Upon execution of this Lease and every anniversary, Lessee shall provide City with a list of all Trade Fixtures on the Premises. SECTION 52. DESTRUCTION Should the Premises be partially destroyed, this Lease shall continue in full force and effect, and Lessee, at Lessee's sole cost and expense, shall complete the work of repairing and restoring the Premises to their prior condition providing such work can be accomplished under all applicable governmental laws and regulations within one hundred eighty (180) days. Should the Premises be so far destroyed that in City's reasonable judgment they cannot be repaired or restored to their former condition within one hundred eighty (180) days, City shall give Lessee notice of such determination in writing and each party may, in that party's sole discretion: (a) Continue this Lease in full force and effect in which case Lessee shall repair and restore, at Lessee's sole cost and expense, the Premises to their former condition; or (b) Terminate this Lease by giving the other party thirty (30) days' written notice of such termination within sixty (60) days after the date that City gives Lessee notice 34 17-57541157627/RLS 7/6/17/1X) HB -115-Item 5. - 38 that the Premises cannot be repaired or restored to their former condition within one hundred eighty (180) days. In the event that either party elects to terminate this Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent that the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any other such purpose(s) as City sees fit. In addition, if Lessee elects to terminate the Lease, Lessee must still comply with all of its obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, paying any Rent due up to the time of termination and surrendering the Premises, pursuant to Sections 56 and 57 below. In the event of the damage or destruction of Improvements, Trade Fixtures and/or personal property located on the Premises not giving rise to a termination of this Lease, Lessee shall, at its sole cost and expense, replace and repair the same as soon as reasonably possible to permit the prompt continuation of Lessee's business at the Premises. SECTION 53. NO ABATEMENT OF RENT DURING REPAIR WORK The Rent shall not be abated for the time Lessee is prevented from using the whole or a portion of the Premises. In addition, Lessee shall not be excused from the payment of taxes, insurance or any other obligations for the time Lessee is prevented from using the whole or a portion of the Premises. SECTION 54. EMINENT DOMAIN If, during the term of this Lease or any renewals or extensions thereof or during any holdover period, City's real property (whether held by City in fee simple, an easement interest or 35 17-5754/1576271RLS 7/6/17/00 HB -116-Item 5. - 39 otherwise) and/or the Premises is taken in eminent domain, the entire award (that is, all forms) of compensation, other than as provided herein, shall belong to and be paid to City. In the event of condemnation, Lessee shall be entitled to an award of only the following forms of compensation, if any, from the condemning authority: compensation for loss of business goodwill; compensation for the value of any of Lessee's Trade Fixtures; compensation for the value of any of Lessee's personal property; compensation for the value of any of Lessee's trade inventory; and compensation for relocation benefits as authorized by law. All other forms of compensation, such as, for example, but not by way of limitation, any bonus value of Lessee's interest in this Lease, shall belong to and be paid to City. In the event of condemnation, unless Lessee is allowed by the condemning authority to continue its operations on the Premises, the Lease shall terminate on the earliest of the following dates: the date the condemning authority obtains a prejudgment order for possession; the date title to the Premises vests in the condemning authority; or the date when Lessee is required by the condemning authority to cease its operations. SECTION 55. RELOCATION AND ASSISTANCE, BUSINESS GOODWILL AND LEASEHOLD BONUS VALUE Upon expiration or termination of this Lease for any reason, including, without limitation, if City exercises its Lease buyout option, but excluding eminent domain, Lessee shall not be entitled to any relocation rights or benefits, business goodwill or bonus value attributable to this Lease, and Lessee expressly waives any claim to the same. SECTION 56. QUITCLAIM DEED Upon expiration or termination of this Lease as provided for herein, including, without limitation, in the event City exercises its Lease buyout option, Lessee shall execute and deliver to City within thirty (30) days thereof, a good and sufficient quitclaim deed to the rights and interests of Lessee in the Premises and the Lease. Should Lessee fail or refuse to deliver to City this 36 17-5754/157627/RLS 7/6/17/DO HB -117-Item 5. - 40 quitclaim deed, City may record in the Orange County Recorder's Office a written notice reciting the failure of Lessee to execute and deliver this quitclaim deed. The date of recordation of this notice by City shall be conclusive evidence against Lessee and all persons claiming under Lessee of the expiration or termination of this Lease and any rights or interests of Lessee in the Premises and/or the Lease. Lessee also agrees to execute, acknowledge, and deliver to City any other instrument requested by City as necessary to perfect City's right, title and interest to the Premises SECTION 57. RESTORATION AND SURRENDER OF PREMISES/TITLE TO IMPROVEMENTS On expiration or termination of this Lease, including, without limitation, in the event City exercises its Lease buyout option, Lessee shall, without compensation to Lessee, promptly surrender and deliver the Premises to City in as good condition as such were at the commencement date of this Lease, reasonable wear and tear excepted. Lessee also shall, without compensation to Lessee, surrender all Improvements to City in good condition and repair, ordinary wear and tear excepted, free and clear of all liens and encumbrances. Lessee also shall remove all Trade Fixtures, personal property and trade inventory. City may in its sole discretion accept all or any portion of the Premises, as then improved with Improvements and no sum whatsoever shall be paid to Lessee or any other person; or City may require Lessee to remove all or any portion of such Improvements, at Lessee's own risk and cost and expense; or City may itself remove or have removed all or any portion of such Improvements, at Lessee's own risk and cost and expense. If required by City to do so, in removing any such Improvements, Lessee shall restore the Premises as nearly as possible to the conditions existing prior to their installation or construction. All such removal and restoration shall be to the satisfaction of City and shall be completed within thirty (30) days of the expiration or termination of this Lease; provided, however, that Lessee shall be considered a holdover tenant (pursuant to Section 42 above) after expiration or termination of the Lease until the time Lessee 37 17-5754/157627/RLS 7/6/17/DO HB -118-Item 5. - 41 completes this removal and restoration work, including, without limitation, the removal of any Trade Fixtures, personal property and trade inventory left on the Premises. In addition, any Trade Fixtures, personal property or trade inventory left on the Premises after the expiration of this 30-day period, regardless of cause, shall be deemed abandoned by Lessee. In City's sole discretion, it may choose to do one or more of the following: (1) take any or all of such Trade Fixtures, personal property and trade inventory as City property; (2) store any or all of such Trade Fixtures, personal property and trade inventory in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account and in the name of Lessee; or (3) dispose of any or all of such Trade Fixtures, personal property and trade inventory without any liability to Lessee. In addition, Lessee's indemnification, hold harmless and defense obligations set forth in this Lease shall apply to such Trade Fixtures, personal property and/or trade inventory, and to City's actions with respect thereto. SECTION 58. FORCE MAJEURE - UNAVOIDABLE DELAYS Should the performance of any act required by this Lease to be performed by either City or Lessee be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, or any other cause except financial inability not the fault of the party required to perform the act, the time for performance of the act shall be extended for a period equivalent to the period of delay and performance of the act during the period of delay shall be excused. Provided, however, that nothing contained in this Section shall excuse the prompt payment of the Rent or other consideration by Lessee as required by this Lease or the performance of any act rendered difficult solely because of the financial condition of the party, City or Lessee, required to perform the act. SECTION 59. RESERVE 38 17-5754/1576271RLS 7/6/17/EX) HB -119-Item 5. - 42 SECTION 60. DELIVERIES OF SUPPLIES City may establish the days and times deliveries of supplies may be made and advise Lessee in writing thereof. SECTION 61. EMPLOYEE PARKING City shall establish the days, times and locations where Lessee and Lessee's employees may park, and the number of automobiles, trucks, and other motorized and non-motorized vehicles that Lessee and Lessee's employees may park, and advise Lessee in writing thereof. SECTION 62. CONFLICT OF INTEREST Lessee warrants and covenants that no official or employee of City, nor any business entity in which an official or employee of City is interested, (1) has been employed or retained by Lessee to solicit or aid in the procuring of this Lease; or (2) shall be employed by Lessee in the performance of this Lease without the immediate written divulgence of such fact to City. In the event City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee, upon request of City, shall terminate such employment immediately. For breaches or violation of this Section, City shall have the right both to terminate this Lease without liability and, in its discretion, recover the full amount of any such compensation paid to such official, employee or business entity. No official or employee of City shall have any financial interest in this Lease in violation of the applicable provisions of the California Government Code. SECTION 63. NOTICE Unless specifically providing for verbal or electronic notice, all notices, certificates, or other communications required to be given hereunder shall be in writing and made in the following manner, and shall be sufficiently given and deemed received when (a) personally delivered; or (b) three (3) business days after being sent via United States certified mail — return receipt requested; or (c) one (1) 39 17-5754/1576271RLS 7/6/17/DO HB -120-Item 5. - 43 business day after being sent by reputable overnight courier, in each case to the addresses specified below; provided that City and Lessee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent: CITY: City of Huntington Beach ATTN: Deputy Director of Economic Development 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 LESSEE: Kokomo's Surfside Grill, a California corporation c/o Mike Bartusick 20431 Graystone Lane Huntington Beach, CA 92646 SECTION 64. COMPLIANCE WITH LAWS Lessee, at its sole cost and expense, shall comply with all statutes, ordinances, regulations and requirements of all governmental entities, including, without limitation, Federal, State, county or municipal, relating to Lessee's use and occupancy of the Premises and/or operation of the Concession whether such statutes, ordinances, regulations and requirements be now in force or hereinafter enacted, including but not limited to, all Health regulations, Fire regulations, Building codes, and Americans with Disabilities Act ("ADA"). This Lease is expressly subject to the laws, regulations and policies of City. Lessee shall deliver to City a copy of any notice from any governmental entity received by Lessee regarding any alleged violation of law regarding the Lease, Premises or the Concession or from any person allegedly entitled to give notice under any conditions, covenants, or restrictions binding or affecting the Premises. The judgment of any court of competent jurisdiction, or the admission by Lessee in a proceeding brought against Lessee by any government entity, that Lessee has violated any such statute, ordinance, regulation or requirement shall be conclusive as between City and Lessee and shall be grounds for termination of this Lease by City. 40 17-57541157627/RLS 7/6117/DO HB -121-Item 5. - 44 SECTION 65. INTERPRETATION OF THIS LEASE The language of all parts of this Lease shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Lease is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Lease. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Lease, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Lease which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. SECTION 66. SURVIVAL Terms and conditions of this Lease, which by their sense and context survive the expiration or termination of this Lease, shall so survive. SECTION 67. MODIFICATION No waiver or modification of any language in this Lease shall be valid unless in writing and duly executed by both parties. SECTION 68. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Lease are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such 41 17-5754/157627/RLS 7/6/17/D0 HB -122-Item 5. - 45 provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Lease. SECTION 69. BROKERS Each party warrants to and for the benefit of the other that it has had no dealings with any real estate broker or other agent (attorneys excepted) in connection with the negotiation or making of this Lease. SECTION 70. INDEPENDENT CONTRACTOR Lessee is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of City. Lessee shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for Lessee and its officers, agents and employees and all business licenses, if any, in connection with the Lease and/or any services to be performed hereunder. SECTION 71. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Lease or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. SECTION 72. LEGAL SERVICES SUBCONTRACTING PROHIBITED Lessee and City agree that City is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. Lessee understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for City; and City shall not be liable for payment of any legal services expenses incurred by Lessee. 42 17-5754/157627/RLS 7/6/17/DO HB -123-Item 5. - 46 SECTION 73. GOVERNING LAW This Lease shall be governed and construed in accordance with the laws of the State of California. SECTION 74. DUPLICATE ORIGINAL The original of this Lease and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who signed it. SECTION 75. ENTIRETY The parties acknowledge and agree that they are entering into this Lease freely and voluntarily following extensive arm's length negotiations, and that each has had the opportunity to consult with legal counsel prior to executing this Lease. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that patty, or anyone acting on that party's behalf, which are not embodied in this Lease, and that that party has not executed this Lease in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Lease. The Lease, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Lease, the Premises, the leasing of the Premises to Lessee, or the lease term created under this Lease and supercede all prior understandings and agreements, whether oral or in writing between the parties respecting the subject matter hereof. 43 17-5754/157627/ALS 716117/DO HB -124-Item 5. - 47 KOKOMO'S SURFSIDE GRILL, a California cornoxation CA fUS print name ITS: (circle one) Chairma€resid9t..)Vice President By-. L114.ej Mayor Deputy Director offilusiness Development IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by and through their authorized officers the day, month and year first above written. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. LESSEE: CITY: CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California AND By: 1 (1/ Z ivL.47, C4 7 C5At print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary - Treasurer ATTEST: City Clerk City Manager 44 17 -5754/1576271RLS 7/6117/DO HB -125-Item 5. - 48 EXHIBIT A SHEET 1 OF 2 THAT PORTION OF LAND LOCATED IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, BEING A PORTION OF FRACTIONAL SECTION 14, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, AS SHOWN IN THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, IN RECORDS OF SAID COUNTY LYING BELOW AN ELEVATION 20.00 FEET, SAID ELEVATION BEING BASED UPON ORANGE COUNTY SURVEYORS BENCHMARK 1J-33-68 NGVD 29 DATUM, 1976 ADJUSTMENT SAID BENCHMARK BEING LOCATED IN THE CITY OF HUNTINGTON BEACH, AT THE INTERSECTION OF PACIFIC COAST HIGHWAY ( STATE HIGHWAY 1) AND 17th STREET, IN THE NORTHEAST CORNER OF A CONCRETE CATCH BASIN 66.3 FEET NORTHEAST OF THE CENTERLINE OF THE NORTHBOUND LANES OF PACIFIC COAST HIGHWAY, 35.9 FEET SOUTHEAST OF THE SOUTH CORNER OF THE DIVISION OF STATE LAND OFFICE AT 1700 PACIFIC COAST HIGHWAY, 31.5 FEET NORTHWEST OF THE CENTER OF 17th STREET, 1.0 FEET ABOVE THE LEVEL OF THE STREET, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTERLINE INTERSECTION OF THE CONSTRUCTION CENTERLINE OF PACIFIC COAST HIGHWAY AND MAIN STREET AS SHOWN ON THE SUBDIVISION MAP FOR TRACT 13478, FILED IN BOOK 636, PAGES 42 THROUGH 44 INCLUSIVE OF MISCELLANEOUS MAPS, THENCE ALONG SAID CONSTRUCTION CENTERLINE SOUTH 49°08'00" EAST, 945.10 FEET (MEASURED) [945.00 FEET PER SAID TRACT 13478] TO THE CENTERLINE OF LAKE STREET; THENCE SOUTH 25°36'08" EAST, 439.62 FEET TO THE MOST WESTERLY CORNER OF THE HUNTINGTON BEACH MARINE SAFETY EDUCATIONAL CENTER HOME OF THE JUNIOR LIFEGUARDS, LOCATED AT 21001 PACIFIC COAST HIGHWAY AS IT EXISTS AFTER CONSTRUCTION PER THE CITY OF HUNTINGTON BEACH, PUBLIC WORKS IMPROVEMENT PLANS ENTITLED "JR. LIFEGUARD BLDG, SOUTH BEACH PHASE II", DATED MARCH 11,2003 AS SHOWN ON SHEET B-Al, ON FILE AT THE ENGINEERING DIVISION, OF THE PUBLIC WORKS DEPARTMENT, IN THE CITY OF HUNTINGTON BEACH; THENCE SOUTHEASTERLY ALONG THE SOUTHWESTERLY FACE OF SAID BUILDING SOUTH 55°23'22" EAST, 43.23 FEET TO AN ANGLE POINT IN SAID SOUTHWESTERLY FACE; THENCE SOUTHWESTERLY ALONG THE NORTHWESTERLY FACE OF SAID BUILDING SOUTH 34°36'38" WEST, 6.05' TO AN ANGLE POINT IN SAID NORTHWESTERLY FACE;• THENCE SOUTHEASTERLY ALONG THE SOUTHWESTERLY FACE OF SAID BUILDING SOUTH 55°23'22" EAST, 1.09 FEET TO AN ANGLE POINT IN SAID SOUTHWESTERLY FACE OF SAID BUILDING AND THE TRUE POINT OF BEGINNING; BEACH CONCESSION LEASE AREA LEGAL DESCRIPTION 21071 PACIFIC COAST HIGHWAY CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS HB -126-Item 5. - 49 JOSEPH G. DERLETH PLS 7340, EXPIRES 12/31/07 EXHIBIT A SHEET 2 OF 2 THENCE NORTHEASTERLY ALONG THE SOUTHEASTERLY FACE OF SAID BUILDING AND THE EXTENSION THEREOF NORTH 34°17'57" EAST, 51.40 FEET TO THE NORTHEASTERLY FACE OF SAID BUILDING; THENCE SOUTHEASTERLY ALONG SAID NORTHEASTERLY FACE SOUTH 55°1953" EAST, 34.77 FEET TO A LINE PARALLEL WITH AND 10.00 FEET SOUTHEASTERLY OF THE SOUTHEASTERLY FACE OF SAID BUILDING; THENCE SOUTHWESTERLY ALONG SAID PARALLEL LINE AND THE EXTENSION THEREOF SOUTH 34°15'27" WEST, 58.27 FEET TO A LINE PARALLEL WITH AND 13.00 FEET SOUTHWESTERLY OF THE SOUTHWESTERLY FACE OF SAID BUILDING; THENCE NORTHWESTERLY ALONG LAST SAID PARALLEL LINE NORTH 55'23'22" WEST, 34.82 FEET; THENCE NORTH 34 0 17'57" EAST, 6.90 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING 0.05 ACRES MORE OR LESS. SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS - OF - WAY AND EASEMENTS OF RECORD. EXHIBIT "B" ATTACHED HERETO, BY THIS REFERENCE IS MADE A PART HEREOF. BEACH CONCESSION LEASE AREA LEGAL DESCRIPTION 21071 PACIFIC COAST HIGHWAY CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS HB -127-Item 5. - 50 S55 °19'53"E, 1134.77' *LP k-S TAIRWAY "WHALE _,FS TAIL" BENCH 12" 00 3' FINISH FLOOR vELEV= 9.20' 14.:LEAS - 15- AR A i in TRUE POINT cTI OF BEGINNING 8' ROLLUP DOOR. 25.0' 25.0' 5C0 •55°23'22"W, 34.82' INTERCEPTOR MH e SMH S55°23'22"E, 43.23' S34°36 1 3813M S55°23'22"E, 1.0T TEL PB N34°17'57"E, 6.90' PEDESTRIAN PATH/ BIKE TRAIL FINISH FLOOR ELEVATION SHOWN HEREON BASED UPON O.C.S. BM 1)-33-68, ELEV=27.113 NGVD 29 DATUM, 1976 ADJ. ( ) = RECORD PER TRACT 13478 FILED IN BOOK 636, PAGE 42 THROUGH 44 INCLUSIVE, OF M. M. EXHIBIT B SHEET 1 OF 1 GRAPHIC SCALE 20 20 EZZI = LEASE AREA ( IN FEET) Zi 1 inch = 20' ft. 0 I-. Z ILI FD SPIKE AND WASHER Pil-u z ce STAMPED "CALTRANS" PER 2 Cr) CORNER RECORD 2001-1259 B, ACCPETED AS CENTERLINE INTERSECTION **(N49°0 8 1 001,10 CI HE FOR. BASIS-5.-F BEARINGT4 ------4- PAFIC COAST HIGHWAY LD FR SPIKE AND WASHER (945.009 945.10' STAMPED "LS 6034" PER TRACT 16406, BOOK 870, PAGES 47 - IDENTICAL ----: THROUGH 50 M.M. HUNTINGTON BEACH MARINE SAFETY EDUCATIONAL CENTER HOME OF THE JUNIOR LIFEGUARDS 21071 PACIFIC COAST HIGHWAY vRETAINING WALL 11•111n111•Illi BEACH CONCESSION LEASE AREA PLAT 21071 PACIFIC COAST HIGHWAY CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS EXP. 12-31-07 1 HB -128-Item 5. - 51 , Acicub® CERTIFICATE OF LIABILITY INSURANCE .."""' i DATE IMPAIDDN'YYY) 8/18/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICAT E H O L D E R . T H I S CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED B Y T H E P O L I C I E S BELOW, THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER ( S ) , A U T H O R I Z E D REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certifIc.ate holder Is an ADDITIONAL INSURED, the policy(les) must be endorsed, If SUBROGATION IS W A I V E D , s u b j e c t t o the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not co n f e r r i g h t s t o t h e certificate holder in lieu of such endorsement(s). PRODUCER Wood Gutmann & Bogart License# 0679263 16901 Red Hill Ave., Suite 100 Tustin CA 92780 coarAc i Nokmu. Janus Duvall PH O NE - 714 %. Psi.). /An Nr -605-7000 1 rtik No: 714-573-1770 Vailk afl , Jduvali@wgbib.com irrsuasaral AFFORDING COVERAGE NAM # INsURElt A :Hanover American Insurance Co INSURED PARKB-1 Park Bench Cafe, Inc. Kakomos Surfside Grill, Inc. 17732 Goldanwest Huntington Beach CA 92647 INSURER Er :Pacific Compensation ins. Co. 11555 INSURER C: INSURER D: INSURER E: I INSURER F: CO VERA GES CERTIFICATENUMBER: 832501888 EVISION NUMBER: 71-11S IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIO D INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUM E N T W I T H R E S P E C T T O W H I C H T I I I S CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN I S S U B J E C T T O A L L T H E T E R M S , EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL INSD SUER wvo poocy IsILIMBER POLICY EFF IMIWIJONYYY) poltcY EXP ImMiooryyyy) LIMITS A x COMMERCIAL GENERAL LIABILITY zz3PA2465702 912012016 9/20/2017 EAcH OCCURRENCE 51.000,000 i CLAIMS-MADE X OCCUR DAMAGE TO RENTED PREMISES f Ea OCCUMO Me) $100,000 MED OW {My one person) $10,000 PERSONAL &ADV INJURY $1,000 ,000 52.000.000 GEM. AGGREGATE LIMIT APPLIES PER: POLICY 1 I yea [ 1 LOC OTHER: GENERALAGGLYEOATE PRODUCTS -COMP/OP AGO $2,000,000 S A X AUTOMOBILE LIABILITY ANY AUTO i;‘,Ith .8rED HIRED AUTOS 1111 11. SCHEDULED ED AUTOs MA12465702 01201201 a 9120120 1 7 czmBINED SINGLE LIMIT /Ea erolderm , +1 000 000 BODILY INJURY (per persuto S BODILY INJURY (Pet =Went) 5 PROPERTY DAMAGE (Per amaeok) 5 $ UMBRELLA LIAI3 EXCESS LIAB ,.._ OCCUR CLAIMS-MADE EACH OCCURRENCE AGGREGATE $ DED I 1 RETENIION S 4 B 'WORKERS COMPENSATION AND EMPLOYERS' LIABILTTY Y I N MY PROPRIETONIPARTNENiESEOUTWE ri OFFICER/MEMBER EXCLUDED? (Manditosy In NH) IgtidAIFTA ucy OPERATIONS know N/A WA00302500 APPROVED AS TO 84/1...4 4/1)2017 FORM 41112018 ( .7 xI gRTUTE 1 I riEl' LI.. EACH ACCIDENT $1,000,000 E.L. DISEASE- EA EMPLOYEE 51,000,000 EL. DiseAsE -POLICY LIMIT $1,000,000 MICHAEL E. GATES C171' ATTORNEY CITY OF HUNTINGTON BEACH OESCRIPTION OF OPERATIONS/ LOCATIONS I VEHICLES (ACORD10I, AddIllunid Ronurks Schedule, my be ettachrd if niers epee. Is required) City of Huntington Beach, its elected or appointed officials, agents, officers, employees and volunteers are named as additio n a l i n s u r e d o n the General Liability per attached CG 20 10 07 04 and CG 20 37 04 13 as required by written contract subject to the terms a n d c o n d i t i o n s o f the policy. THIS CERTIFICATE SUPERCEDES ANY PREVIOUSLY ISSUED. CERTIFICATE HOLDER CANCELLATION I City of Huntington Beach 2000 Main Street Huntington Beach CA 92648 . , SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS- AUTHORIZED REPRESENTATIVE Arif414://: 1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD HB -129-Item 5. - 52 POLICY NUMBER: ZZ3 A424657 02 COMMERCIAL GENERAL LIABILITY CO 20 37 04 13 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFU L L Y . ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - COMPLETED OPERATIONS This endorsement modifies Insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Organization(s) Location And Description Of Completed Operations City of Huntington Beach, Its Elected or Appointed Officials, Agents, Officers, Employees, and Volunteers 2000 Main Street Huntington Beach, CA 0264B-2702 I Information required to complete this Schedule, if not shown above, will be s h o w n i n t h e D e c l a r a t i o n s . A Section II Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown In the Schedule, but only with respect to liability for 'bodily injury" or "property damage" caused, in whole or in part, by "your work" at the location designated and described in the Schedule of this endorsement performed for that additional Insured and Included in the "products-completed operations hazard". However: 1. The insurance afforded to such additional insured only applies to the extent permitted by law; and 2. If coverage provided to the additional Insured Is required by a contract or agreement, the Insurance afforded to such additional Insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured. B. With respect to the insurance afforded to these additional insureds, the following is added to Section ill — Limits Of Insurance: If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance: 1. Required by the contract or agreement; or 2. Available under the applicable Limits of insurance shown in the Declarations; whichever is less. This endorsement shall not Increase the applicable Limits of insurance shown in the Declarations. CO 20 37 04 13 Insurance Services Office, inc., 2012 Page 1 of 1 HB -130-Item 5. - 53 ZZ3 A424667 02 1001141 POLICY NUMBER: ZZ3 A424657 02 COMMERCIAL GENERAL LIABILITY CO 20 10 07 04 THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ I T C A R E F U L L Y . ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - SCHEDULED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the followin g : COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE __. Name Of Additional insured Person(s) Or Organization(s): . Location(s) Of Covered Operations City of Huntington Beach Information required to complete this Schedule, if not shown ab o v e , w i l l b e s h o w n I n t h e D e c l a r a t i o n s . A. Section II — Who is An insured is amended to include as an additional Insured the person(s) or organization(s) Shown in the Schedule, but only with respect to liability for "bodily Injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by: 1. Your acts or omissions; or 2. The acts or omissions of those acting on your behalf; In the performance of your ongoing operations for the additional insured(s) at the location(s) desig- nated above. B. With respect to the Insurance afforded to these additional insureds, the following additional exclu- sions apply: This insurance doe's not apply to "bodily injury" or "property damage" occurring after. 4. All work, including materials, parts or equip- ment furnished In connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has bean completed; or 2. That portion of your work" out of which the Injury or damage arises has been put to its in- tended use by any person or organization other than another contractor or subcontractor en- gaged in performing operations for a principal as a part of the same project. CG 20 100704 ISO Properties, Inc., 2004 Page '1 of I El HB -131-Item 5. - 54 ZZ3. A424667 02 1001141 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE REAP THIS CAREFULLY, FROM EFF.DATE 09/2012016 Armvp CO 2010 READAS- CITY OF HUNTINGTON BEACH, ITS ELECTED. OR Ap POINTED OFFICIALS,. AGENTS, OFFICERS, EMPLOYEES ANO VQWNTEERS. 2000 MAIN STREET HUNTINGTON .BEAGH, GA 92648-2702 Nothing-herein containe,d,shall beheld to vary, alter, waive or extend any of thaterms, conditio n s , a g r e e m e n t s o r limitetiona. of the policy other than as above stated ,. (Completion of the folieWing, including countersignature,. is, required to make, this endo r s e m e n t e f f e c t i v e o n i y w h e n i t I s - IssuettstibseqUent to preparation of. the Policy.)' Effective- 091261206 ;this erjdorsement forms avert of Policy -No. ZZ5 A424667 02 issued to By Hanover American insurance Cornoany Data ei Issue Countersigned by Authorized 130resentative of the bornpany 221r0163 (4-90) HB -132-Item 5. - 55 1 .3,R,13, EVIDENCE OF PROPERTY INSURANCE DATEMMIDANYM 8/23/2017 THIS EVIDENCE OF PROPERTY INSURANCE IS ISSU E D A S A N I A T r E R O F I N F O R M A T I O N O N L Y AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDEN C E D O E S N O T A F F I R M A T I V E L Y O R N E G A T I V E L Y A M E N D , E X T E N D O R A L T E R T H E COVERAGE AFFORDED BY THE POLICIES BELOW. TEN S E V I D E N C E O F I N S U R A N C E D O E S N O T C O N S T I T U T E A C O N T R A C T B E T W E E N T H E ISSUING INSURER(S), AUTHORIZED REPRESENTATIV E O R P R O D U C E R , A N D T H E A D D I T I O N A L I N T E R E S T . AGENCY PHONE n4-505-7000 ' ifAICN4LEMV Wood Gutmann F. Bogart 15901 Red Hill Ave., Suite 100 Tustin, CA 92700 COMPANY HANOVER AMR INS CO 440 LINCOLN STREET, NH 01653-0002 ;56 0 714-573-1770 CODE: I E-MAIL ,ADDRESN: I SUE CODE: AGENCY CLISTOMERJO #t INSURED Kokomo Surfoide Grill Park Bench Cafe, Inc. 17732 Goldenwest Huntington Beach, CA 92647 LOANNUMDER POWYNUMuER 229A42465702 EFFECTIVE DATE 09/20/2016 EXPIRATION DATE 09/20/2017 coNTINUEDuKTIL [7 TERMINATEDIF CHECKED THIS REPLACES PRIOR EVIDENCE DATED: PROPERTY INFORMATION LOcATIORMESCRIPTION 21071 Pacific Coaat Huy Huntington Beach , C A 9 2 6 4 8 17732 Goldenueet St. Huntington Beach, O k 9 2 6 4 7 THE POLICIES OF INSURANCE LISTED BELOW HA V E B E E N I S S U E D T O 1 1 - I E I N S U R E D N A M E D A B O V E F O R T H E P O L I C Y P E R I O D I N D I C A T E D , NOTWITHSTANDING ANY REQUIREMENT, TERM OR C O N D I T I O N O F A N Y C O N T R A C T O R O T H E R D O C U M E N T W I T H R E S P E C T T O W H I C H T H I S EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUE D O R M A Y P E R T A I N , T H E I N S U R A N C E A F F O R D E D B Y T H E P O L I C I E S D E S C R I B E D H E R E I N I S SUBJECTTO ALL THE TERMS, EXCLUSIONS AND COND I T I O N S O F S U C H P O L I C I E S . L I M I T S S H O W N M A Y H A V E B E E N R E D U C E D B Y P A I D C L A I M S . COVERAGE INFORMATION COVERASOIPER181FORM8 AMOONTOFINSURANCE DEDUCUIRE Blanket Business Personal Property Special Form / Replacement Copt Blanket Business Income Including Extra E x p e n s e 900,000 409,507 $1,000 REMARKS (Including Special Conditions) Business Income Extended Period of Indem n i t y - 6 0 D a y s I n c l u d e d Business Personal Property Includes Fire. The City of Huntington Beach, its office r s , e l e c t e d o r a p p o i n t e d o f f i c i a l , e m p l o y e e s , a g e n t s , a n d v o l u n t e e r s i s named as Lova Payee per attached CP 12 l a 1 0 1 2 . CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICI E S B E C A N C E L L E D B E F O R E T H E E X P I R A T I O N D A T E ' T H E R E O F , N O T I C E W I L L B E DELIVERED IN ACCORDANCE WITH THE POLICY PROVIS I O N S , ADDITIONAL INTEREST NAMEANDADDRESS City of Huntington Beach X MORTGAGEE IASSPAMeEE AONTIONNONSURM3 TOAN8 2000 Main Street Huntington Beach CA 92648 AUTHORIZEDREPRESEHTATIVE . )11"i ACORD 27 (2009112) @ 1993-2009 ACORD CORPORATION. All rights reser v e d . The ACORD name and logo are registered marks of AC O R D HB -133-Item 5. - 56 POLICY NUMBER: COMMERCIAL PROPERTY ZZ3 A124657 02 OP 12 13 10 12 THIS ENDORSEMENT CHANGES THE POLICY, PLEASE R E A D I T C A R E F U L L Y . LOSS PAYABLE PROVISIONS This endorsement modifies Insurance provided under the f o l l o w i n g : BUILDERS} RISK COVERAGE FORM BUILDING AND PERSONAL PROPERTY COVERAGE F O R M CONDOMINIUM ASSOCIATION COVERAGE FORM CONDOMINIUM COMMERCIAL UNIT-OWNERS COVE R A G E F O R M STANDARD PROPERTY POLICY SCHEDULE Location Number: 001 Building Number: 001 Applicable Ciatise (Enter 0.1., C42., 0.3. or CA.): C.1. Description Of Property: BPP Loss Payee Name; City of Huntington Beach See manuscript 221-0163 Loss Payee Address; 2000 Main Street Huntin Beach, CA 92848-2702 Location Number: 002 Building Number: 001 Applicable Clause (Enter CA, C.2., 0.3, or 0.4.): 0.1. Description Of Property: BPP Loss Payee Name: City of Huntington Beach See manuscript 221-0163 Loss Payee Address: 2000 Main Street . Huntin_ ton Beach, CA 02648-270 Location Number: Building Number: Applicable Clause (Enter 0.1., C.2., 0,3. or C,4.): Description Of Property: Loss Payee Name: Loss Payee Address: Information required to complete this Schedule, if not sh o w n a b o v e , w i l l b e s h o w n i n t h e D e c l a r a t i o n s . Page 1 of 3 OP 12 18 10 12 Insurance Services Office, Inc., 2011 HB -134-Item 5. - 57 A. When this endorsement is attached to the Standard Property Policy CP 00 99, the term Coverage Part in this endorsement Is replaced by the term Policy,. B. Nothing in this endorsement Increases the applicable Limit of Insurance, We will net pay any Loss Payee more than their financial interest in the Covered Property, and we will not pay more than the applicable Limit of insurance on the Covered Property. C, The following Is added to the Loss Payment Loss Condition, as indicated in the Declarations or In the Schedule; 1. Loss Payable Clause For CoVoted Property in which both you and a Loss Payee shown in the Schedule or In the Declarations have an insurable interest, we will: a. Adjust losses with you; and b. Pay any claim for loss or damage jointly to you and the Loss Payee, as Interests may appear 2. Lender's Loss Payable Clause a. The Less Payee shown In the Schedule or In the Deolaratlons is a creditor, including a Mortgageholder or trustee, whose Interest in Covered Property is established by such written instruments as: (1) Warehouse receipts; (2) A contract for deed; (3) Bills of lading; (4) Financing statements; or (6) Mortgages, deeds of trust, or security agreements, b. For Covered Property in which both you and a Loss Payee have an Insurable Interest: (1) We will pay for covered loss or damage to each Loss Payee in their order of precedence, as interests may appear, (2) The Loss Payee has the right to receive loss payment even if the Loss Payee has started foreclosure or similar action on the Covered Property. (3) if we deny your claim because of your acts or because you have felled to comply with the terms of the Coverage Part, the Loss Payee will still have the right to receive loss payment lithe Loss Payee: (a) Pays any premium due under this Coverage Part at our request if you have failed to do so; Submits a signed, sworn proof of loss within 60 days after receiving notice from us of your failure to do so; and {c) Has notified us of any Change in ownership, occupancy or substantial change in risk known to the Loss Payee. All of the terms of this Coverage Part will then apply directly to the Loss Payee, (4) If we pay the Loss Payee for any loss or damage and deny payment to you because of your acts or because you have failed to comply with the terms of this Coverage Part: (a) The Loss Payee's rights will be transferred to us to the extent of the amount we pay; and (b) The Less Payee's rights to recover - the full amount of the Loss Payee's claim will not be impaired, At our option, we may pay to the Loss Payee the whole principal on the debt plus any accrued interest in this event, you will pay your remaining debt to us, c. If we cancel this policy, we will give written notice to the Loss Payee at least: (1) 10 days before the effective date of cancellation if we cancel for your nonpayment of premium; or (2) 30 days before the effective date of cancellation if we cancel for any other reason, cl. If we elect not to renew this policy, we will give written notice to the Loss Payee at least 10 days before the expiration date of this policy. (b) Page 2 of 3 © Insurance Services Office. Inc., 2011 CP 12 18 10 12 HB -135-Item 5. - 58 3. Contract Of Sale Clause a. The Loss Payee shown in the Schedule or In the Declarations Is a person or organization you have entered into .a contract with for the sale of Covered Property. b. For Covered Property in which both you and the Loss Payee have an insurable interest, we will; (1) Adjust losses with you; and (2) Pay any claim for loss or damage jointly to you and the Loss Payee, as interests may appear, c. The following is added to the Other Insurance Condition: For Covered Property that is the subject of a contract of sale, the word "you" includes the Loss Payee. 4. Building Owner Loss Payable Clause a. The Loss Payee shown in the Schedule or In the Declarations is the owner of the described building in which you are a tenant. b. We will adjust losses to the described building with the Loss Payee. Any loss payment made to the Loss Payee will eallsfy your claims against us for the owner's property. 9. We will adjust losses to tenants' improvements and betterments with you, unless the leage provides otherwise. Page 3 of 3 CI' 12 '18 10 12 @insurance Services Office, Inc., 2011 HB -136-Item 5. - 59 'anoyer Iniumate 'top. THIS ENDORSEMENT CHANGES THE POLiCY. PLEASE READ IT CAREFULLY, it is hereby agreed and understood that CP 12 18 should read as follow: City of Huntington Beach, Its Elected or Appointed Officials, Agents, Officers, Employees, and Volunteers 2000 Main Street Huntington Beach, CA 92648-2702 Nothing herein contained shall be held to very, alter, waive or extend any of the term s , c o n d i t i o n s , a g r e e m e n t s o r limitations of the policy other than as above stated. (Completion of the following, including countersignature, is required to make this endors e m e n t e f f e c t i v e o n l y w h e n I t I s Issued subsequent to preparation of (he Policy.) Effective 08116/2817 this endorsement forms a part of Policy No. ZZ3 A424657 02 Issued to Park Bench Cafe By Date of Issue 08/23/2017 Countersigned by Authorized Representative of the Company 221-0103 (10-03) HB -137-Item 5. - 60 Dept. ID PD-17-005 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: The City of Newport Beach is requesting a three-year contractual agreement with the City of Huntington Beach for Public Safety Helicopter Services. The current three-year contract for Public Safety Helicopter Services expired on June 30, 2017. Financial Impact: The proposed contract generates up to $735,000 per year in General Fund revenue for the City of Huntington Beach in exchange for Public Safety Helicopter Services for the City of Newport Beach. During the proposed three-year contract, revenues will be deposited into Business Unit 10000100, Object Code 46860. Recommended Action: Approve and authorize the Mayor and City Clerk to execute the "Services Agreement for Public Safety Helicopter Support Between the City of Huntington Beach and the City of Newport Beach.” Alternative Action(s): Do not approve and direct staff accordingly. Analysis: On June 30, 2011, the Airborne Law Enforcement Services (ABLE), a Joint Powers Authority, was dissolved. The City of Newport Beach was left without public safety helicopter support services. Since then, the City of Newport Beach has contracted with the City of Huntington Beach for Public Safety Helicopter Services. The current contract with the City of Newport Beach for Public Safety Helicopter Services expired on June 30, 2017. The City of Newport Beach requests another long-term, three-year contract for Public Safety Helicopter Services. The new contract would require up to 1,000 hours per year of exclusive Public Safety Helicopter Services to the City of Newport Beach at an hourly rate starting at $735 for the first year. The hourly rate would be adjusted yearly based on the change in the Metropolitan Consumer Price Index. The proposed contract includes a 60-day opt-out clause for either city. Environmental Status: N/A CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Robert Handy, Chief of Police SUBJECT: Approve and authorize execution of a three-year Services Agreement with the City of Newport Beach for Public Safety Helicopter Services HB -138-Item 6. - 1 Dept. ID PD-17-005 Page 2 of 2 Meeting Date: 9/5/2017 Strategic Plan Goal: Enhance and maintain public safety Attachment(s): 1. “Services Agreement for Public Safety Helicopter Support Between the City of Huntington Beach and the City of Newport Beach” HB -139-Item 6. - 2 Jul) 26, 2017 Huntington Beach Police Department Attn: Mr. Robert Handy 2000 Main Street P.O. Box 70 Huntington Beach. CA 92648 Re: Contract No. 8285-1 Dear Mr. Handy: Enclosed are the two original copies of the Service Agreement for Public Safety Helicopter Support. After they have been executed. please return one Ally executed copy of the Agreements with inclusive exhibits to: Leilani I. Brown, City Clerk City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 If you have any questions or need additional information, please contact Administrative Assistant to the Chief of Police Desiree Giessmann at (949) 644-3702. Sincerely. or0444, Leilani I. Brown, MMC City Clerk Enclosure cc: Desire Giessmann, Police Department (via email only) City Clerk's Office HB -140-Item 6. - 3 SERVICES AGREEMENT FOR PUBLIC SAFETY HELICOPTER SUPPORT BETWEEN THE CITY OF HUNTINGTON BEACH AND THE CITY OF NEWPORT BEACH This Services Agreement for Public Safety Helicopter Support ("Agreement") is made by and between the City of Huntington Beach, a California Municipal Corporation ("Huntington Beach") and the City of Newport Beach, a California Municipal Corporation ("Newport Beach") based on the following: A. Huntington Beach employs, maintains, trains and equips personnel capable of responding to requests for public safety helicopter services from ground based public safety personnel. B. Newport Beach is responsible for providing public safety services within its jurisdiction, which include public safety helicopter services. C. Newport Beach requires the services of Huntington Beach to provide public safety helicopter services to its land and residents. TERM This Agreement shall commence on the date it is last executed by a party and end on June 30, 2020 unless terminated earlier as set forth herein. PURPOSE 1.01 The purpose of this Agreement is to provide public safety helicopter services to Newport Beach's land and residents and for Newport Beach to pay an all inclusive flat rate per hour for the cost of the services provided by Huntington Beach. 1.02 Nothing in this Agreement shall be interpreted to give Newport Beach a right to services from Huntington Beach. Huntington Beach expressly retains all rights and powers to direct, manage, maintain, train, employ, equip, operate and control all equipment, facilities, properties and personnel in providing public safety helicopter services to Newport Beach pursuant to this Agreement. Newport Beach acknowledges and agrees that the efficient use of public safety helicopter services requires a timely and prioritized response of a helicopter. Newport Beach agrees that Huntington Beach will have the sole discretion to determine the priority of calls for service and when an assignment of an air crew to a call will be terminated. 1.03 Notwithstanding anything in the Agreement to the contrary, Newport Beach expressly retains all rights and powers to direct, manage, maintain, train, employ, equip, operate and control all equipment, facilities, properties and personnel in providing ground based public safety services to its land and residents. 17-5838/159743/RLS 6/2/17/DO 1 HB -141-Item 6. - 4 II SERVICES 2.01 Huntington Beach will furnish Newport Beach with public safety helicopter services that will include a helicopter aircrew comprised of a pilot and tactical flight officer that are both sworn peace officers and specially trained to conduct public safety helicopter services. Huntington Beach and the helicopter aircrews retain the sole and exclusive discretion as to the specific type, nature, timing and duration of the services performed pursuant to this Agreement. 2.02 Huntington Beach certifies that all helicopter aircrews providing public safety helicopter services to Newport Beach under this Agreement currently possess, and shall maintain for the life of this Agreement, all permits, licenses, certifications, and training required from any federal, state or local governmental entity to provide public safety helicopter services. 2.03 In no event shall Huntington Beach or the helicopter aircrew be responsible for the direction and control of ground based public safety personnel and equipment of Newport Beach during the course and scope of the public safety helicopter services performed pursuant to this Agreement. 2.04 In the event of a natural disaster or local or regional emergency, Huntington Beach shall take all reasonable steps to provide Newport Beach with public safety helicopter service that is dedicated to the exclusive use of Newport Beach. This shall include an obligation on the part of Huntington Beach to "hold over" any on-duty and/or "call in" any off-duty helicopter aircrew(s) or personnel necessary to provide Newport Beach with public safety helicopter service that is dedicated to the exclusive use of Newport Beach. Additionally, in the event of a natural disaster or local or regional emergency, Huntington Beach shall provide Newport Beach with a first right of refusal to have public safety helicopter services prior to allowing or releasing said public safety helicopter services to other governmental agencies for use or deployment during said natural disaster or local or regional emergency. III COMPENSATION 3.01 Newport Beach shall pay Huntington Beach for the public safety helicopter services provided on an hourly basis in accordance with the provisions of this Section. Huntington Beach's total compensation for all services performed in accordance with this Agreement shall not exceed Two Million Two Hundred Five Thousand Dollars and no/100 ($2,205,000.00) without prior written authorization from Newport Beach. Furthermore, Huntington Beach's total compensation in any single Fiscal Year (defined as July 1s t through June 30 th ) shall not exceed Seven Hundred Thirty-five Thousand Dollars and no/100 ($735,000.00) without a prior written amendment. Services Agreement For Public Safety Helicopter Support 2 HB -142-Item 6. - 5 3.02 Huntington Beach shall provide public safety helicopter services to Newport Beach at an all inclusive flat rate as set forth in this Agreement. Newport Beach shall incur no other direct or indirect costs or fees for the services provided by Huntington Beach under this Agreement. Huntington Beach shall bill Newport Beach for all public safety helicopter services provided under this Agreement in tenth of an hour increments. 3.03 Huntington Beach shall submit monthly invoices to Newport Beach describing the public safety helicopter services provided in the preceding month. Huntington Beach will also provide Newport Beach with a monthly statement detailing all calls for service and time spent on routine patrol over Newport Beach's jurisdiction. The monthly statement shall include the names of the helicopter aircrew who performed the services, a brief description of the services performed and/or the specific task performed, the date the services were performed, the number of hours spent on all services billed on an hourly basis in tenth of an hour increments. 3.04 Newport Beach's Chief of Police, or the Chief's designee (the "Chief'), shall notify the Huntington Beach Air Support Unit Commander ("Unit Commander") within twenty (20) days of receipt of the monthly statement of any disputed calls for service or time spent on routine patrol over Newport Beach's jurisdiction. The Unit Commander and the Chief will review the public safety helicopter service provided by Huntington Beach on an as needed basis to ensure that it coincides with the service level desired by Newport Beach. The Unit Commander and the Chief will be responsible for cooperatively resolving any disputes over services provided under this Agreement and adjusting the service level to coincide with that desired by Newport Beach. 3.05 Should Huntington Beach provide over Nine Hundred Sixty (960) hours of public safety helicopter services to Newport Beach in any single Fiscal Year under this Agreement, Huntington Beach acknowledges and agrees that it shall not receive any compensation for said services without a prior written amendment. 3.06 Huntington Beach shall provide public safety helicopter services to Newport Beach at an all inclusive flat rate of Seven Hundred Thirty-five Dollars ($735) per hour of service for the first year of service. Commencing on January 1, 2018, the hourly fee for Air Support Services shall be adjusted on July 1 of each year based on the change in the Metropolitan Consumer Price Index. The change will be conducted using the "Consumer Price Index for All Urban Consumers (CPI-U), for the Los Angeles-Riverside-Orange County, California area; All items not seasonally adjusted, 1982-1984=100 reference base." The adjustment will be based on the current contract rate using the January index of the current year and the January index of the preceding year. The Huntington Beach Police Chief shall adjust the fees set forth in the Agreement by such percentage change and rounded to the next highest dollar amount. Should the Consumer Price Index be revised or discontinued, the Police Chief shall use the revised or a comparable index as approved by the Huntington Beach and Newport Beach City Council. In no event, however, shall the amount payable under this Agreement be reduced below the Hourly Rate in effect immediately preceding such adjustment. The maximum adjustment increase to the Hourly Rate, for any year where an adjustment is made pursuant to this Section, shall not exceed five percent (5%) of the Hourly Rate in effect immediately preceding such adjustment. Services Agreement For Public Safety Helicopter Support 3 HB -143-Item 6. - 6 IV NEWPORT BEACH DUTIES 4.01 Newport Beach shall pay Huntington Beach an all inclusive flat rate per hour for the cost of the services provided by Huntington pursuant to Paragraph 3.01 — 3.06 of this Agreement, for services provided by Huntington Beach under this Agreement. The public safety helicopter services performed by the Huntington Beach shall be deemed to commence as of the date and time the aircraft is dispatched to, or arrives over, the airspace of Newport Beach, whichever occurs first. These services shall continue until the aircrew notifies Newport Beach that the assignment is complete or that the assignment must be terminated due to a higher priority assignment. Huntington Beach helicopter aircrew shall be responsible to notify Newport Beach's dispatch center that the assignment is complete or that the assignment must be terminated due to a higher priority assignment. Services performed by Huntington Beach aircraft for Newport Beach shall be defined as: A. A direct request for public safety helicopter services by Newport Beach where a Huntington Beach aircraft is dispatched to or arrives over the incident (operationally identified as a "D-I" call) or; B. Any public safety call generated by Newport Beach and monitored by a Huntington Beach helicopter aircrew in which the aircraft arrives over the incident (operationally identified as a "D-2" call) or; C. Routine patrol over Newport Beach's jurisdictional areas, in which case Huntington Beach's aircrew shall notify Newport Beach's dispatch center upon their arrival and depart from Newport Beach's jurisdictional area. Newport Beach may authorize its ground based public safety supervision to cancel a response by a Huntington Beach aircrew. 4.02 Newport Beach agrees to comply with the FAR Part 91 and Operations Manual section 4085 in making calls for services, which establishes priority for calls to Huntington Beach. 4.03 Newport Beach agrees to install within its communications/dispatch center any radio equipment necessary to communicate directly with Huntington Beach on the designated frequency (800 MHz Talk Group) agreed upon by Huntington Beach and Newport Beach. All costs associated with said installation shall be paid by Newport Beach. V INDEMNIFICATION AND WAIVER 5.01 Newport Beach agrees that Huntington Beach should be fully protected from any loss, injury, damage, claim, lawsuit, cost or expense arising out of, or in any way related, to the performance of services pursuant to this Agreement that is in excess of Huntington Beach's requirement to carry and maintain certain policies of insurance and name Newport Beach as an Services Agreement For Public Safety Helicopter Support 4 HB -144-Item 6. - 7 additional insured as set forth below in section VI. Subject to Huntington Beach's requirement to carry and maintain certain policies of insurance and name Newport Beach as an additional insured as set forth below in section VI, the provisions of this Agreement should be construed and interpreted to provide the fullest possible protection to Huntington Beach. Newport Beach acknowledges that Huntington Beach would not provide services in the absence of the commitments of Newport Beach as specified in this Agreement. Huntington Beach acknowledges that Newport Beach would not enter into this Agreement in the absence of Huntington Beach's commitment and obligation to carry and maintain certain policies of insurance and name Newport Beach as an additional insured as set forth below in section VI. 5.02 To the fullest extent permitted by law, Newport Beach shall defend, indemnify, and hold harmless Huntington Beach, its boards, officers, agents and employees (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to any services provided under this Agreement including, but not limited to, activities that relate in any way to this Agreement (including the negligent and/or willful acts, errors and/or omissions of Newport Beach, its council members, officers, agents, employees, and anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them) that is in excess of Huntington Beach's requirement to carry and maintain certain policies of insurance and name Newport Beach as an additional insured as set forth below in section VI. Notwithstanding the foregoing, nothing herein shall be construed to require Newport Beach to indemnify the Indemnified Parties from any Claim arising from the negligence or willful misconduct of the Indemnified Patties. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. 5.03 Huntington Beach shall defend, indemnify and hold harmless Newport Beach and its officers, employees, contractors, agents and representatives, with respect to any claim, loss, liability, damage, lawsuit, cost or expense that arises out of, or is in any way related, to the negligence or willful misconduct by Huntington Beach, including its boards, officers, agents and employees, within the Newport Beach's jurisdiction. The obligation of Huntington Beach pursuant to this section extends, without limitation, to any injury, death, loss or damage which occurs within Newport Beach's jurisdiction and which is sustained by any third party, any employee or contractor of Newport Beach and to such contractor's employees. VI INSURANCE 6.01 Without limiting Huntington Beach's indemnification of Newport Beach, and prior to commencement of Work, Huntington Beach shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to Newport Beach. Services Agreement For Public Safety Helicopter Support 5 HB -145-Item 6. - 8 6.01.1 Proof of Insurance. Huntington Beach shall provide certificates of insurance to Newport Beach as evidence of the insurance coverage required herein. Insurance certificates and endorsement must be approved by Newport Beach's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with Newport Beach at all times during the term of this contract. Newport Beach reserves the right to require complete, certified copies of all required insurance policies, at any time. Huntington Beach shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of the Work hereunder by Huntington Beach, his agents, representatives, employees or subconsultants. The cost of such insurance shall be included in Huntington Beach's bid. 6.01.2 Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the Newport Beach's Risk Manager. 6.01.3 Coverage Requirements. 6.01.3.1 Workers' Compensation Coverage. Huntington Beach shall maintain Workers' Compensation Insurance (Statutory Limits) and Employer's Liability Insurance (with limits of at least one million dollars ($1,000,000)) for Huntington Beach's employees in accordance with the laws of the State of California, Section 3700 of the Labor Code. Any notice of cancellation or non-renewal of all Workers' Compensation policies must be received by Newport Beach at least thirty (30) calendar days (ten (10) calendar days written notice of non-payment of premium) prior to such change. Huntington Beach shall submit to Newport Beach, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of Newport Beach, its officers, agents, employees and volunteers. 6.01.3.2 Aircraft Liability Coverage. Huntington Beach shall maintain commercial aircraft liability insurance in an amount not less than twenty-five million dollars ($25,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability including war risk and premises liability insurance to include property damages incidental to the operations of the named insured 6.01.3.3 Automobile Liability Coverage. Huntington Beach shall maintain automobile insurance covering bodily injury and property damage for all activities of the Huntington Beach arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non-owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each accident. Services Agreement For Public Safety Helicopter Support 6 HB -146-Item 6. - 9 6.01.4 Other Insurance Provisions or Requirements. The policies are to contain, or be endorsed to contain, the following provisions: 6.01.4.1 Additional Insured. Endorsement naming the City of Newport Beach as respects the Aircraft Liability coverage with primary non-contributory and severability of interest language. 6.01.4.2 Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against Newport Beach, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Huntington Beach or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Huntington Beach hereby waives its own right of recovery against Newport Beach, and shall require similar written express waivers and insurance clauses from each of its subconsultants. This waiver of subrogation extends to hull loss and property damage. 6.01.4.3 Enforcement of Contract Provisions. Huntington Beach acknowledges and agrees that any actual or alleged failure on the part of the Newport Beach to inform Huntington Beach of non-compliance with any requirement imposes no additional obligations on the Newport Beach nor does it waive any rights hereunder. 6.01.4.4 Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. 6.01.4.5 Notice of Cancellation. Huntington Beach agrees to oblige its insurance agent or broker and insurers to provide to Newport Beach with thirty (30) days notice of cancellation (except for nonpayment for which ten (10) days notice is required) or nonrenewal of coverage for each required coverage. 6.01.5 Timely Notice of Claims. Huntington Beach shall give Newport Beach prompt and timely notice of claims made or suits instituted that arise out of or result from Huntington Beach's performance under this Agreement. 6.01.6 Additional Insurance. Huntington Beach shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. VII MISCELLANEOUS PROVISIONS 7.01 Each of the Parties to this Agreement shall immediately notify the other of any litigation or claim that is asserted by or against either party regarding this Agreement. In the Services Agreement For Public Safety Helicopter Support 7 HB -147-Item 6. - 10 event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorney's fees. 7.02 Each of the Parties to this Agreement shall cooperate with one another in the defense of any lawsuit or claim filed against either party, arising out of, or in any way related, to this Agreement, as well as any effort of Huntington Beach to collect money from persons or entities responsible for any request for public safety helicopter services. 7.03 The public safety helicopter services provided by Huntington Beach under this Agreement shall not be assigned, transferred, contracted or subcontracted out without the prior written approval of Newport Beach. 7.04 Each of the Parties to this Agreement may terminate this Agreement without cause upon sixty (60) days prior written notice. 7.05 The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. 7.06 If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 7.07 This Agreement may be modified or amended only by a written document executed by both Huntington Beach and Newport Beach. 7.08 The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 7.09 This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 7.10 A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 7.11 Except as specifically authorized under this Agreement, the services to be provided under this Agreement shall not be assigned, transferred, contracted or subcontracted out without the prior written approval of Huntington Beach and Newport Beach. 7.12 This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Services Agreement For Public Safety Helicopter Support 8 HB -148-Item 6. - 11 7.13 The Parties shall at their own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. 7.14 The Parties each represent that they are an equal opportunity employer and they shall not discriminate against any subcontractor, employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical handicap, medical condition marital status, sex, sexual orientation, age or any other impermissible basis under law. 7.15 All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first-class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Huntington Beach to Newport Beach shall be addressed to Newport Beach at: Attn: Chief Jon T. Lewis Newport Beach Police Department 870 Santa Barbara Drive Newport Beach, CA 92658 Phone: 949-644- 3701 Fax: 949-718-1082 All notices, demands, requests or approvals from Newport Beach to Huntington Beach shall be addressed to Huntington Beach at: Attention: Robert Handy Huntington Beach Police Department 2000 Main Street P.O. Box 70 Huntington Beach, CA 92648 Phone: 714-536-5903 Fax: 714-536-5605 Services Agreement For Public Safety Helicopter Support 9 HB -149-Item 6. - 12 Date: ayor, City oPCIewport Beach ATTEST: Date: 'V (C 11 City Clerk, Cit)7 of Newport Beach APPROVED AS TO FORM: OFFICE OF THE CIT..-ALTORNEY Date: ity Attorney, City of Huntington Beach IN WITNESS WHERE OF, the parities hereto have caused this Agreement to be executed on the dates written below. CITY OF NEWPORT BEACH CITY OF HUNTINGTON BEACH Date: Mayor, City of Huntington Beach ATTEST: Date: City Clerk, City of Huntington Beach APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY Date: '(-// City Attorney, City of Newport BeCh---A-1-- . r '2 7(- S. D APPRO D: Chief of Police, Huntin n Beach Police Department REVIEWED AND APPROVED: City Manager, City of Huntington Beach Services Agreement For Public Safety Helicopter Support 10 HB -150-Item 6. - 13 LEAD POLICY NO.: 1000233406-01 DEDUCTIBLE: NOT IN MOTION Nil Nil Nil IN-MOTION INGESTION MOORED Nil Nil Nil INSURED VALUE $1,393,496 $ 999,000 $ 900,000 LEAD POLICY NO.: 1000233406-01 APPROVW AS TO FORO I I 7-01 MICHAEL E. GAT CITY ATTORNEY rITY OP HUNTINQT014 BEACH jch it13c410 CERTIFICATE OF INSURANCE City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 CERTIFICATE HOLDER: NAMED INSURED: POLICY PERIOD: INSURANCE COMPANY(IES): City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 441liant 6/30/2017 to 6/30/2018 Starr Indemnity and Liability Company through Starr Aviation Agency, Inc. (Lead) and following markets as held on file AIRCRAFT PHYSICAL DAMAGE COVERAGE ALL RISKS, GROUND & IN-FLIGHT REGISTRATION NUMBER N523HB 2007 McDonnell-Douglas MD520N N522HB 2001 MD520N N521HB 1998 MD520 AIRCRAFT LIABILITY COVERAGE WITH RESPECT TO: ALL SCHEDULED AIRCRAFT YEAR MAKE & MODEL LIABILITY COVERAGES Bodily Injury Excluding Passengers Property Damage Passenger Bodily Injury Single Limit Including Passengers, With Passenger Liability Limited To LIMITS OF LIABILITY EACH PERSON $ XXXX $ XXXX $ XXXX $ )(XXX $ XXXX EACH OCCURRENCE $ XXXX $ XXXX $ XXXX $ 50,000,000 $ XXXX OTHER COVERAGES/CONDITIONS/REMARKS: CONTRACT NO. 8285-1, SERVICE AGREEMENT FOR PUBLIC SAFETY HELICOPTER SUPPORT • The Certificate Holder is included as an Additional Insured on liability coverage(s), but only with respect to operations of the Named Insured. • The Company hereby waives its right of subrogation against the Certificate Holder as respects loss or damage arising under Physical Damage coverage as set forth under this policy. • Insurance hereunder is primary and non-contributory with respect to any coverage maintained by the Certificate Holder. • The insurance afforded under the liability coverage(s) applies separately to each insured against whom claim is made or suit is brought, but the inclusion herein of more than one insured shall not operate to increase the applicable limits of the company's liability. • In the event of cancellation of any policy described above, the insurer will attempt to mail 30 days (10 days for non-payment of premium) written notice to the Certificate Holder prior to the effective date of cancellation. However, failure to do so will not impose duty or liability upon the insurer, its agents or representatives, nor will it delay cancellation. ANY INSURANCE EVIDENCED HEREIN THAT IS EXTENDED BEYOND COVERAGE PROVIDED TO THE NAMED INSURED SHALL NOT APPLY TO, AND NO PERSON OR ORGANIZATION TO WHOM SUCH EXTENDED COVERAGE APPLIES SHALL BE INSURED FOR BODILY INJURY OR PROPERTY DAMAGE WHICH ARISES FROM THE DESIGN, MANUFACTURE, MODIFICATION, REPAIR, SALE, OR SERVICING OF THE AIRCRAFT, AIRCRAFT PARTS, OR ANY OTHER PRODUCT BY THAT PERSON OR ORGANIZATION. THIS CERTIFICATE DOES NOT CHANGE IN ANY WAY THE ACTUAL COVERAGES PROVIDED BY THE POLICY(IES) SPECIFIED ABOVE. CERTIFICATE NO.: 89 DATE: 8/29/2017 'LE BY: 1301 Dove Street, Suite 200 Newport Beach, CA 92660 I Tel: (949) 756-0271 I Fax: (949) 756-2713 I CA License No. 0C36861 HB -151-Item 6. - 14 City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Certificate of Self Insurance Memorandum Number: FY 16/17, No. 051 This evidence of coverage is used as a matter of information only and confers no rights upon the Certificate Holder. This evidence of coverage does not amend, extend or alter the coverage afforded by the memoranda listed below. Certificate Holder: City of Newport Beach Coverage Effective: 8/29/17 Coverage Expires: 8/29/18 This is to certify that the City of Huntington Beach is self-insured for general liability claims. Sufficient cash reserves to afford coverage for uninsured losses are maintained at $1,000,000.. Type of Coverage: General Liability, Comprehensive Auto Liability, Employer's Liability Coverage Limit of Liability/Coverage: $1,000,000 Combined Single Limit per Occurrence Certificate Requested By: Ingrid Ono, Police Department Description of Operation, Vehicle or Property: This certificate is issued to and additonally insures the Certificate Holder, its agents, officers, representatives and employees as proof of the City of Huntington Beach's self-insurance status in conjunction with the Service Agreement for Public Safety Helicopter Support. It is provided to Ingrid Ono of the City of Huntington Beach Police Department at 2000 Main Street, Huntington Beach, CA (92648). Should any of the above coverage for the Covered Party be changed or withdrawn prior to the expiration date issued above, the City of Huntington Beach will mail a 30-day written notice to the Certificate Holder but, failure to mail such notice shall impose no obligation or liability of any kind upon the City of Huntington Beach, its agents, officers or employees. If you have any questions, contact: Authorized Representative: yr ?atcic(ti Williams, AR 1J( Risk Manager (14) 53 529 i ) ) 12(.; HB -152-Item 6. - 15 Dept. ID AD-17-023 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: City staff together with Visit Huntington Beach and their consultant Merje, have created a citywide wayfinding system of signs that will be placed throughout the City to guide visitors to enhance their visitor experience. This Request for Council Action seeks to memorialize the relationship between the City and Visit Huntington Beach for the installation and maintenance of the points of interest signage. Financial Impact: There is no fiscal impact as Visit Huntington Beach is the financially responsible party for the installation and maintenance of these signs. Recommended Action: Authorize the Mayor and City Clerk to execute and approve the “Memorandum of Understanding Between the City of Huntington Beach and Visit Huntington Beach for the Installation and Maintenance of Points of Interest Signs in the Public Right-of-Way.” Alternative Action(s): Do not approve the Memorandum of Understanding (MOU) between the City and Visit Huntington Beach and direct staff accordingly. Analysis: In February of 2016, City staff, along with Visit Huntington Beach staff, began meeting with Merje to create a City Wayfinding program that would create an enhanced visitor experience for both residents and visitors alike. On March 30, 2016, a special meeting of the Economic Development Committee was held to address the Wayfinding program and on June 20, 2016, a City Council Study Session was held to illustrate the types of signage and address comments brought up during the special Economic Development Committee Meeting. It was during these meetings that staff explained that a Memorandum of Understanding would be brought forth at a later date to memorialize the relationship between the City and Visit Huntington Beach for the installation and maintenance of these signs. CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Antonia Graham, Assistant to the City Manager SUBJECT: Approve and authorize execution of the Memorandum of Understanding (MOU) between the City of Huntington Beach and Visit Huntington Beach (VHB) for the Installation and Maintenance of Points of Interest Signs in the Public Right-of- Way HB -153-Item 7. - 1 Dept. ID AD-17-023 Page 2 of 2 Meeting Date: 9/5/2017 Under the conditions of the MOU, Visit Huntington Beach (VHB) shall participate in collaboration with the City in the selection of a contractor for the installation and maintenance of all City approved points of interest signs. The City will have the approval over the selected contractor and the final agreement jointly entered into by VHB and the approved contractor. VHB will be responsible for obtaining all required permits from the City, CalTrans, and the Coastal Commission for all work related to the installation and maintenance of the points of interest signs. The City will issue a blanket encroachment permit to the selected contractor. Additionally, VHB will be responsible for all payments to the selected contractor for the installation and maintenance of all signage. This MOU will be in effect for ten (10) years. Environmental Status: Not Applicable Strategic Plan Goal: Enhance and maintain infrastructure Attachment(s): 1. “Memorandum of Understanding between the City of Huntington Beach and Visit Huntington Beach for the Installation and Maintenance of Points of Interest Signs in the Public Right-of- Way” HB -154-Item 7. - 2 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF HUNTINGTON BEACH AND VISIT HUNTINGTON BEACH FOR THE INSTALLATION AND MAINTENANCE OF POINTS OF INTEREST SIGNS IN THE PUBLIC RIGHT OF WAY THIS MEMORANDUM OF UNDERSTANDING ("MOU") is made and entered into on , 2017, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California (hereinafter referred to as "CITY"), and VISIT HUNTINGTON BEACH, a California non-profit organization (hereinafter referred to as "VISIT HB"). WHEREAS, CITY is supportive of the VISIT HB Mission, which is to "market and sell Huntington Beach's Surf City USA brand experience as the preferred quintessential California beach destination leading to increased visitor spending and enhanced quality of life for residents." VISIT HB's vision is "to be an effective City destination leader representing the combined visitor industry and community partnership in the brand development, marketing, and sales of the Surf City brand experience." —). NOW, THEREFORE, for and in consideration of the promises and covenants hereinafter contained and intending to be legally bound, the parties covenant and agree as follows: SECTION I. TERM This MOU will become effective on the date it is approved by CITY COUNCIL and shall terminate ten (10) years thereafter, except with respect to any obligations hereunder which are to be performed thereafter. Upon mutual written consent of the parties, this Agreement may be extended for additional five (5) year teuns. 17-5594/1506122/DO 1 HB -155-Item 7. - 3 SECTION 2. OBLIGATIONS OF CITY The obligations of the CITY pursuant to this Agreement shall be as follows: 1. CITY shall allow the installation and maintenance of City approved points of interest signs in or at City approved locations in the public right of way in a City approved manner. 2. CITY shall participate in the selection of the contractor(s) for the installation and maintenance of all City approved points of interest signs. 3. CITY shall assist in the application for all required permits or approvals for the installation of all City approved points of interest signs. 4. CITY shall have the right to inspect installation sites and maintenance work to ensure compliance with City standards, specifications, and policies. SECTION 3. OBLIGATIONS OF VISIT HB The obligations of VISIT HB pursuant to this Agreement shall be as follows: 1. VISIT HB shall participate in the selection of the contractor(s) for the installation and maintenance of all City approved points of interest signs. CITY shall have approval of the selected contractor(s). CITY shall also have approval of the final agreement jointly entered into by VISIT HB and the approved contractor. 2. VISIT HE shall apply for and obtain all required permits or approvals from any city, county or state entity as needed prior to the commencement of any work pursuant to this Memorandum of Understanding. Fees associated with any permits shall be waived and or paid for by the Office of Business Development. 3. VISIT HB shall provide an inventory of all City approved points of interest signs installed in the public right of way and a map of their locations. 17-5594/150612_2/DO 2 HB -156-Item 7. - 4 4. VISIT HB shall follow and adhere to the Manual for Uniform Traffic Control Devices and the Watch Manual where applicable. 5. VISIT HB shall use proper traffic control signs and/or devices when installing and/or maintaining any City approved points of interest signs in the public right of way. 6. VISIT HB shall maintain all City approved points of interest signs in a good and reasonable fashion, including, but not limited to the replacement of damaged or missing signs. 7. VISIT HB shall develop and implement a method for City staff and/or the public to report damaged or missing signs, and a time frame within which the reported problem will be responded to, inspected and corrected as necessary. All graffiti shall be removed within 48 hours unless otherwise requested by CITY staff 8. VISIT HB shall ensure that the selected Contractor has insurance in-force for the duration of the contract. SECTION 4. HOLD HARMLESS VISIT HB shall protect, defend, indemnify and hold harmless CITY, its officers, officials, employees, and agents (CITY) from and against any and all liability, loss, damage, expenses, costs (including without limitation, costs and fees of litigation of every nature) arising out of or in connection with performance of this MOU or its failure to comply with any of its obligations contained in this MOU except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. VISIT HB must ensure that the Contractor hold CITY harmless. SECTION 5. WORKERS' COMPENSATION INSURANCE Workers' compensation insurance shall be as required by the State of California (Statutory Limits) and Employer's Liability Insurance with a limit of not less than one million 17-5594/150612 2/DO 3 HB -157-Item 7. - 5 dollars ($1,000,000) per accident for bodily injury or disease. Contractor shall require all subcontractors to provide such workers' compensation and employer's liability insurance for all of the subcontractors' employees. Contractor shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employer's liability insurance and Contractor shall similarly require all subcontractors to waive subrogation. SECTION 6. GENERAL LIABILITY INSURANCE In addition to the workers' compensation and employer's liability insurance and Contractor's covenant to defend, hold harmless and indemnify City, Contractor shall obtain and furnish to City, a policy of general public liability insurance, including motor vehicle coverage covering the Project/Service. This policy shall indemnify Contractor, its officers, employees and agents while acting within the scope of their duties, against any and all claims arising out or in connection with the Project/Service, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of One Million Dollars ($1,000,000) per occurrence and in the aggregate. If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than One Million Dollars ($1,000,000) for this Project/Service. This policy shall name City, its officers, elected and appointed officials, employees, agents, and volunteers (the "Additionally Insured Parties") as Additional Insureds and shall specifically provide that any other insurance coverage which may be applicable to the Project/Service shall be deemed excess coverage and that Contractor's insurance shall be primary and non-contributing with any other valid and collectible insurance or self-insurance available for the Additionally Insured Parties. Any available insurance proceeds in excess of the minimum coverage amount specified herein shall be 17-5594/150612 2/DO 4 HB -158-Item 7. - 6 available to the Additionally Insured Parties. All coverage available to Contractor shall also be available to the Additionally Insured Parties. If the Contractor maintains higher limits than the minimum requirement, the City requires and shall be entitled to coverage for the higher limits maintained by the Contractor. Under no circumstances shall above-mentioned insurance contain a self-insured retention, or a "deductible" or any other similar form of limitation on the required coverage. Contractors shall be responsible for causing all Subcontractors to maintain the same types and limits of insurance coverage as that required by Contractor by this Agreement. SECTION 7. CERTIFICATES OF INSURANCE; ADDITIONAL INSURED ENDORSEMENTS , Prior to commencing performance of the work hereunder, Contractor shall furnish to City certificates of insurance subject to approval of the City's Attorney evidencing the foregoing insurance coverages as required by this Agreement; the certificates shall: (a) provide the name and policy number of each carrier and policy; (b) state that the policy is currently in force; and (e) promise to provide that such policies will not be canceled or modified without thirty (30) days' prior written notice of CITY. Contractor shall maintain the foregoing insurance coverages in force at all times during the term of the Agreement with the City. The requirement for carrying the foregoing insurance coverages shall not derogate from the Contractor's defense, hold hamless and indemnification obligations as set forth under this Agreement. CITY or its representative shall at all times have the right to demand the original or 17-5594/150612_21D0 5 HB -159-Item 7. - 7 a copy of all the policies of insurance. Contractor shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. Contractor shall provide a separate copy of the additional insured endorsement to each of the Contractor's insurance policies, naming the Additionally Insured Parties as Additional Insureds to the City Attorney for approval prior to any payment hereunder. A statement on an insurance certificate will not be accepted in lieu of the actual endorsement. Contractor shall require all Subcontractors to name Contractor, its officers, employees and agents, and the Additionally Insured Parties as Additional Insureds, using ISO form number CG203 0380413 or coverage at least as broad. Contractor shall verify that every Subcontractor's policy endorsement complies with the requirements set forth herein. SECTION S. ASSIGNING AS BREACH Neither party shall encumber, assign, or otherwise transfer this MOU, or any right or interest in this MOU, without the express written consent of the other party. A consent by a party to one assignment or transfer to another person shall not be deemed to be a consent to any subsequent assignment or transfer to another person. Any encumbrance, assignment or transfer, without the prior written consent of the other party, whether it is voluntary or involuntary, by operation of law or otherwise, is void and shall, at the option of the other party, terminate this MOU. SECTION 9. TERMS BINDING ON SUCCESSORS All the terms, covenants and conditions of this MOU shall inure to the benefit of and be binding upon the parties and their successors and assigns. The provisions of this Section shall not be deemed as a waiver of any of the conditions against assignment hereinbefore set forth. 17-5594/150612 2/DO 6 HB -160-Item 7. - 8 SECTION 10. CONFLICT OF INTEREST VISIT HB shall employ no CITY official or any regular CITY employee in the work performed pursuant to this MOU. No officer or employee of CITY shall have any financial interest in this MOU in violation of the applicable provisions of the California Government Code. SECTION 11. NONDISCLOSURES/PRESS RELEASES VISIT HB shall consult with CITY prior to issuing any press releases or otherwise making any public statements with respect to this MOU, the transactions contemplated herein, or matters arising herefrom. SECTION 12. CUMULATIVE REMEDIES The remedies given to the parties in this MOU shall not be exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this MOU. SECTION 13. WAIVER OF BREACH The waiver by CITY of any breach by VISIT HB of any of the provisions of this MOU, irrespective of the length of time for which such failure continues, shall not constitute a waiver of such breach or a waiver of any subsequent breach by VISIT HB, either of the same or another provision of this MOU. SECTION 14. FORCE MAJEURE - UNAVOIDABLE DELAYS Should the performance of any act required by this MOU to be performed by either CITY or VISIT HB be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, or any other cause (except financial inability) not the fault of the party required to perform the act, the time for 17-5594/150612_2/DO 7 HB -161-Item 7. - 9 performance of the act will be extended for a period equivalent to the period of delay and performance of the act during the period of delay will be excused. SECTION 15. NOTICE Any written notice, given under the terms of this MOU, shall be either delivered personally or mailed, certified mail, postage prepaid, addressed to the party concerned, as follows: City of Huntington Beach Attn: Antonia Graham, Assistant to the City Manager 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 Phone: (714) 536-5537 Visit HB Attn: Kelly Miller 301 Main Street, Suite 212 Huntington Beach, CA 92648 Phone (714) 969-3492 If a party desires to change the address for notices set forth herein, said party shall provide 30 days advance written notice to the other party of any such change. SECTION 16. ATTORNEY'S FEES In the event suit is brought by either party to enforce the terms and provisions of this MOU or to secure the performance hereof, each party shall bear its own attorney's fees. The prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. SECTION 17. CONTROLLING LAW AND VENUE The rights and liabilities of the parties, and the interpretation and construction of this MOU, shall be determined in accordance with the laws of the State of California. Any controversy arising out of or under this MOU, if litigated, shall be adjudicated in a court of competent jurisdiction in Orange County, California. SECTION 18. SECTION TITLES The section titles in this MOU are inserted only as a matter of convenience and for reference, and in no way define, limit or describe the scope of intent of this MOU or in any way affect this MOU. 17-5594/150612 2/DO 8 HB -162-Item 7. - 10 SECTION 19. TIME OF ESSENCE Time is of the essence with respect to all provisions of this MOU in which a definite time for performance is specified including, but not limited to, the expiration of this MOU. SECTION 20. SURVIVAL OF INDEMNITIES Termination of this MOU shall not affect the right of CITY to enforce any and all indemnities given or made by VISIT HB under this MOU, nor shall it affect any provision of this MOU that expressly states that the provision shall survive termination thereof. SECTION 21. NONLIABILITY OF CITY OFFICIAL, EMPLOYEES OR AGENTS No elective or appointed CITY or CITY affiliated board, commission or member thereof, or officer, official, employee or agent of CITY shall be personally liable to VISIT HB, its successors and assigns, of any default or breach by CITY under this MOU or for any amount which may become due to VISIT HB, its successors and assigns, under this MOU or for any obligation of CITY under this MOU. SECTION 22. TERMINATION This MOU may be terminated by either party with or without cause upon sixty (60) days' notice in writing. SECTION 23. MODIFICATIONS IN WRITING This MOU contains and embraces the entire agreement between the parties hereto and neither it nor any part of it may be changed, altered, modified, limited or extended orally or by any other agreement between the parties unless such agreement be expressed in writing, signed and acknowledged by CITY and VISIT HB, or their successors in interest. 17-5594/150612_2/DO 9 HB -163-Item 7. - 11 SECTION 24. PARTIAL INVALIDITY Should any provision of this MOU be held by a court of competent jurisdiction to be either invalid, void, or unenforceable, the remaining provisions of this MOU shall remain in full force and their effect unimpaired by the holding, so long as the reasonable expectations of the parties hereto are not materially impaired. SECTION 25. MOU IN COUNTERPARTS This MOU may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same document. SECTION 26. NO TITLE INTEREST No title interest of any kind is hereby given and VISIT HB shall never assert any claim or title to the Senior Center in Central Park or any other public property. Use of the Senior Center in Central Park by VISIT HB is non-exclusive, and the Senior Center in Central Park shall at all times during its operating hours remain open for use by the public. SECTION 27. ENTIRETY The foregoing sets forth the entire agreement between the parties. 17-5594/150612_2/D0 10 HB -164-Item 7. - 12 IN WITNESS WHEREOF, the parties hereto have caused this MOU to be executed by and through their authorized officers the day, month and year first above written. VISIT FIB, a California non-profit organization CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By: }.-y AA-Lte (-1 VIA tc,t4;:4L Mayor print name ATTEST: City Clerk INITIATED AND APPROVED: Assistant to the City Manager REVIEWED AND APPROVED: City Manager le/vkA title 11 17-5594/150612_2/DO HB -165-Item 7. - 13 --- i s ACCPREl CERTIFICATE OF LIABILITY INSURANCE 4...----- DATE (MMIDDJYYYY) 0711112017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER ITIE COVERAGE AFFORDED BY TFIE POLICIES BELOW. TFIIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(les) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER Brilliant Business Insurance Solutions Inc. 9301 Oakdale Ave., Ste. 170 Chatsworth, CA 91311 License #: 0136099 CONTACT NAME: Kim Odegard PHONE FAX vic. N., EA. (818)264-0300x (AM, Nta): (818)330-8810 E-MAIL ADDRESS: klM@IbiZ-1.11SUFELCOM INSURERM AFFORDING COVERAGE NAIC # INSURER A z Sentinellasuranae_Cominny INSURED Huntington Beach Marketing and Visitors Bureau, Inc. 301 Main Street Suite 212 Huntington Beach, CA 92648 INSURERS: INSURER C : INSURER D: INSURER E : INSURER F : COVERAGES CERTIFICATE NUMBER: 00000000-202082 REVISION NUMBER: 7 THIS tS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOVVN MAY HAVE BEEN REDUCED BY PAID CLAIMS, INFIR LTR TYPE OF INSURANCE ADM INSD Buell WVD POLICY NUMBER POLICY EFF IMMILIDNYYY1 POLICY FESP NALUDDIYYYYt LIMITS A x COMMERCUM. GENERAL LIA13IUTY Y 57S8A1D7809 11/01/2018 11/0112017 EACH OCCURRENCE $ 2,000,000 DAMAGE TO RENTED PREMISES (Ea occurrence) $ 1,000,000 CLAIMS-MADE X OCCUR MED EXP (Any one person) S 10,000 $ 2000,000 PERSONAL & ADV INJURY GENT X AGGREGATE POLICY OTHER: LIMIT APPLIES PRO- JECT PER: LOG GENERAL AGGREGATE $ 4,000,000 PRODUCTS - COMP/OP ACC $ 4,000,000 $ AUTOMOBILE LIABILITY ANY AUTO OWNED AUTOS ONLY HIRED AUTOS ONLY SCHEDULED AUTOS NON-OWNED AUTOS ONLY COMBINED SINGLE LIMIT (Ea accident) $ BODILY INJURY (Per person) $ BODILY INJURY (Per accident) $ PROPERTY DAMAGE (Per accident) $ $ UMBRELLA LL4B EXCESS LIAB OCCUR CLAIMS-MADE AS TO FoRM EACH OCCURRENCE $ AGGREGATE $ $ DED RETENTION $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? (Mandatory In NH) IF yes, describe under DESCRIPTION OF OPERATIONS below Y / N N /A APPROVED By: -,!....2r_Ima. it 1 W ti I PER I 0TH- I STATUTE I ER E.L. EACH ACCIDENT $ EL DISEASE-EA EMPLOYEE $ ICHAEL E. GATES cry ATTORNEY E.L DISEASE - POLICY LIMIT $ CITY OF HUNTINGTO NJ BEACH DESCRIPTION OF OPERATIONS / LOCATIONS /VEHICLES (Awl:tom, Ada:renal Remarks Sahodurs, may bra attached If mom aim. la raquIrod) City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers are included as Additional Insured's. CERTIFICATE HOLDER CANCELLATION City of Huntington Beach 2000 Main St Huntington Beach, CA 92647 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED RF_PREFIENTATIVE '{/ t-- (-)c-k i .o .,:i (KM0) 0 1988-2016 ACORD CORPORATION. All rights reserved. ACORD 26 (2016103) The ACORD name and logo are registered marks of ACORD Printed by MO on July 11, 2017 at 04:16PM HB -166-Item 7. - 14 Resolution No, 2008-63 CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach CA 92648 DECLARATION OF PERMITTEE I certify that no vehicle(s) will be used or operated in the performance of the task(s) or event(s) for which this permit is granted. I authorize the City of Huntington Beach to immediately and retroactively revoke the license or permit issued in connection with or in the performance of said task(s) or event(s) if any vehicle(s) is tiled. Signature of Permittee Print name Company name (if appl icabIe) Date signed Crip) n ift4 EXHIBIT I 16407 HB -167-Item 7. - 15 Applicant's Signature: Title: • CITY OF E[UNTINGTON :EACH 2000 Main Street, Huntington Beach, CA 92648 Declaration of Non-Employer Status In order to comply with the City Council Resolution No. 6277, you are required to provide proof of Workers' Compensation Insurance. If you have no employees, this form must be signed and returned to: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 I certify that in the performance of the activity or work for which this permit is issued, I shall not employ any person in any manner so as to become subject to California Workers' Compensation Insurance requirements. I authorize the City of Huntington Beach to immediately and retroactively revoke the license or permit issued under this declaration if I hire any employee(s) or become subject to the provision of the laws requiring Workers' Compensation Insurance. Applicant/Company Name: GY ,re, e.- ) 1 cv-D g Location Signed: 'N) 0C--(:;"cts ( A1-7,1 fi,,,1 D-vt) Date Signed: 2,t,\ Address: 3 \ YTc Telephone Number: I LI — HB -168-Item 7. - 16 4 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. POLICY CHANGE This endorsement changes the policy effective on the Inception Date of the policy unless another date is indicated below: Policy Number: 57 SBA ID7809 SC Named Insured and Mailing Address; HUNTINGTON BEACH MARKETING AND VISITORS BUREAU 301 MAIN ST STE 212 HUNTINGTON BEACH CA 92648 Policy Change Effective Date: 01/13/17 Effective hour is the same as stated in the Declarations Page of the Policy. Policy Change Number: 001 Agent Name: AGENCY SERVICE BUREAU Code: 141612 POLICY ClifUNK3E3: SENTINEL INSURANCE COMPANY, LIMITED ANY CHANGES IN YOUR PREMIUM WILL BE REFLECTED IN YOUR NEXT BILLING STATEMENT.IF YOU ARE ENROLLED IN REPETITIVE EFT DRAWS FROM YOUR BANK ACCOUNT, CHANGES IN PREMIUM WILL CHANGE FUTURE DRAW AMOUNTS. THIS IS NOT A BILL. NO PREMIUM DUE AS OF POLICY CHANGE EFFECTIVE DATE BUSINESS LIABILITY OPTIONAL COVERAGES ARE REVISED ADDITIONAL INSURED(S) ARE ADDED THE FOLLOWING ARE ADDITIONAL INSURED FOR BUSINESS LIABILITY COVERAGE IN THIS POLICY. LOCATION 001 BUILDING 001 SEE FORM IH 12 00 FORM NUMBERS OF ENDORSEMENTS ADDED AT ENDORSEMENT ISSUE: PRO RATA FACTOR: 0.800 THIS ENDORSEMENT DOES NOT CHANGE THE POLICY EXCEPT AS SHOWN. Form SS 12 11 04 05 T Page 001 (CONTINUED ON NEXT PAGE) Process Date: 01 /22/17 Policy Effective Date: 11 / ol /16 Policy Expiration Date: 11/01/17 HB -169-Item 7. - 17 POLICY CHANGE (Continued) Policy Number: 57 SBA 107809 Policy Change Number: 001 H112001185 ADDITIONAL INSURED OWNER, LESSEES OR CONTRACTOR Form SS 12 11 04 05 T Page 002 Process Date: 01/22/17 Policy Effective Date: 11/01/16 Policy Expiration Date: 11/01/17 HB -170-Item 7. - 18 POLICY NUMBER: 57 SBA 107809 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNER, LESSEES OR CONTRACTOR CITY OF HUNTINGTON BEACH, ITS OFFICERS, ELECTED OR APPOINTED OFFICIALS, EMPLOYEES, AGENTS AND VOLUNTEERS 2000 MAIN STREET HUNTINGTON BEACH, CA 92647 RE: SS4170 AND 554171 Form IH 12 00 11 85 T SEQ. NO. 001 Printed in U.S.A. Page 001 Process Date: 01/22/17 Expiration Dale: 11/01/17 HB -171-Item 7. - 19 QUICK REFERENCE BUSINESS LIABILITY COVERAGE FORM READ YOUR POLICY CAREFULLY BUSINESS LIABILITY COVERAGE FORM A. COVERAGES Business Liability Medical Expenses Coverage Extension - Supplementary Payments B. EXCLUSIONS C. WHO IS AN INSURED D. LIABILITY AND MEDICAL EXPENSES LIMITS OF INSURANCE Beginning on Page 1 1 2 2 3 10 14 E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 16 1. Bankruptcy 15 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit 15 3. Financial Responsibility Laws 16 4. Legal Action Against Us 16 6. Separation Of Insureds 16 6. Representations 16 7. Other Insurance 16 8. Transfer Of Rights Of Recovery Against Others To Us 17 F. OPTIONAL ADDITIONAL INSURED COVERAGES 18 Additional Insureds 18 G. LIABILITY AND MEDICAL EXPENSES DEFINITIONS 20 Form SS 00 08 04 05 HB -172-Item 7. - 20 BUSINESS LIABILITY COVERAGE FORM Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered. Throughout this policy the words ''you" and "your" refer to the Named Insured shown in the Declarations. The words "we", "us" and "our" refer to the stock insurance company member of The Hartford providing this insurance. The word "insured" means any person or organization qualifying as such under Section C. - Who Is An Insured. Other words and phrases that appear in quotation marks have special meaning. Refer to Section G. - Liability And Medical Expenses Definitions. A. COVERAGES 1. BUSINESS UABILITY COVERAGE (BODILY INJURY, PROPERTY DAMAGE, PERSONAL AND ADVERTISING INJURY) Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury", "property damage" or "personal and advertising injury" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" or offense and settle any claim or "suit" that may result. But: (1) The amount we will pay for damages is limited as described in Section D. - Liability And Medical Expenses Limits Of Insurance; and (2) Our right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments, settlements or medical expenses to which this insurance applies. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Coverage Extension - Supplementary Payments. b. This insurance applies: (1) To "bodily injury" and "property damage" only if: (a) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"; (b) The "bodily injury" or "property damage" occurs during the policy period; and (c) Prior to the policy period, no insured listed under Paragraph 1. of Section C. — Who Is An Insured and no "employee" authorized by you to give or receive notice of an "occurrence" or claim, knew that the "bodily injury" or "property damage" had occurred, in whole or in part. If such a listed insured or authorized "employee" knew, prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period. (2) To "personal and advertising injury" caused by an offense arising out of your business, but only if the offense was committed in the "coverage territory" during the policy period. c. "Bodily injury" or "property damage" will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section C. — Who Is An Insured or any "employee' authorized by you to give or receive notice of an "occurrence" or claim: (1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer; Form SS 00 08 04 05 Page 1 of 24 © 2005, The Hartford HB -173-Item 7. - 21 BUSINESS LIABILITY COVERAGE FORM (2) Receives a written or verbal demand or claim for damages because of the "bodily injury" or "property damage"; or (3) Becomes aware by any other means that "bodily injury" or "property damage" has occurred or has begun to occur. d. Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury". e. Incidental Medical Malpractice (1) "Bodily injury" arising out of the rendering of or failure to render professional health care services as a physician, dentist, nurse, emergency medical technician or paramedic shall be deemed to be caused by an "occurrence", but only if: (a) The physician, dentist, nurse, emergency medical technician or paramedic is employed by you to provide such services; and (b) You are not engaged in the business or occupation of providing such services. (2) For the purpose of determining the limits of insurance for incidental medical malpractice, any act or omission together with all related acts or omissions in the furnishing of these services to any one person will be considered one "occurrence". 2. MEDICAL EXPENSES Insuring Agreement a. We will pay medical expenses as described below for "bodily injury" caused by an accident: (1) On premises you own or rent; (2) On ways next to premises you own or rent; or (3) Because of your operations; provided that: b. We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for: (1) First aid administered at the time of an accident; (2) Necessary medical, surgical, x-ray and dental services, including prosthetic devices; and (3) Necessary ambulance, hospital, professional nursing and funeral services. 3. COVERAGE EXTENSION - SUPPLEMENTARY PAYMENTS a. We will pay, with respect to any claim or "suit" we investigate or settle, or any "suit" against an insured we defend: (1) All expenses we incur. (2) Up to $1,000 for the cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which Business Liability Coverage for "bodily injury" applies. We do not have to furnish these bonds. (3) The cost of appeal bonds or bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We do not have to furnish these bonds. (4) All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $500 a day because of time off from work. (5) All costs taxed against the insured in the "suit". (6) Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the offer. (7) All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance. Any amounts paid under (1) through (7) above will not reduce the limits of insurance. (1) The accident takes place in the "coverage territory" and during the policy period; (2) The expenses are incurred and reported to us within three years of the date of the accident; and (3) The injured person submits to examination, at our expense, by physicians of our choice as often as we reasonably require. Page 2 of 24 Form SS 00 08 04 06 HB -174-Item 7. - 22 BUSINESS LJABILITY COVERAGE FORM b. If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit", we will defend that indemnitee if all of the following conditions are met: (1) The "suit" against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract"; (2) This insurance applies to such liability assumed by the insured; (3) The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract; (4) The allegations in the "suit" and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interest of the indemnitee; (5) The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such "suit" and agree that we can assign the same counsel to defend the insured and the indemnitee; and (6) The indemnitee: (a) Agrees in writing to: (1) Cooperate with us in the investigation, settlement or defense of the "suit"; (II) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the "suit"; (iii) Notify any other insurer whose coverage is available to the indernnitee; and Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and (b) Provides us with written authorization to: (i) Obtain records and other information related to the "suit"; and (II) Conduct and control the defense of the indemnitee in such "suit". So long as the above conditions are met, attorneys' fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indernnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 110) of Section B. — Exclusions, such payments will not be deemed to be damages for "bodily injury" and "property damage" and will not reduce the Limits of Insurance. Our obligation to defend an insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as Supplementary Payments ends when: (1) We have used up the applicable limit of insurance in the payment of judgments or settlements; or (2) The conditions set forth above, or the terms of the agreement described in Paragraph (6) above, are no longer met. B. EXCLUSIONS 1. Applicable To Business Liability Coverage This insurance does not apply to: a. Expected Or Intended injury (1) "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" or "property damage" resulting from the use of reasonable force to protect persons or property; or (2) "Personal and advertising injury" arising out of an offense committed by, at the direction of or with the consent or acquiescence of the insured with the expectation of inflicting "personal and advertising injury". b. Contractual Liability (1) "Bodily injury" or "property damage"; or (2) "Personal and advertising injury" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages because of: (a) "Bodily injury", "property damage" or "personal and advertising injury" that the insured would have in the absence of the contract or agreement; or Form SS 00 08 04 05 Page 3 of 24 HB -175-Item 7. - 23 BUSINESS UABILITY COVERAGE FORM (b) "Bodily injury" or "property damage" assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purpose of liability assumed in an "insured contract", reasonable attorneys' fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage" provided: (i) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same "insured contract", and (ii) Such attorneys' fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged. c. Liquor Liability "Bodily injury" or "property damage" for which any insured may be held liable by reason of: (1) Causing or contributing to the intoxication of any person; (2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. d. Workers' Compensation And Similar Laws Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law. e. Employer's Liability "Bodily injury" to: (1) An "employee" of the insured arising out of and in the course of: (a) Employment by the insured; or (b) Performing duties related to the conduct of the insured's business, or (2) The spouse, child, parent, brother or sister of that "employee" as a consequence of (1) above. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. This exclusion does not apply to liability assumed by the insured under an "insured contract". f. Pollution (1) "Bodily injury", "property damage" or "personal and advertising injury" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants": (a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to any insured. However, this subparagraph does not apply to: "Bodily injury" if sustained within a building and caused by smoke, fumes, vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidify the building, or equipment that is used to heat water for personal use, by the building's occupants or their guests; (ii) "Bodily injury" or "property damage" for which you may be held liable, if you are a contractor and the owner or lessee of such premises, site or location has been added to your policy as an additional insured with respect to your ongoing operations performed for that additional insured at that premises, site or location and such premises, site or location is not and never was owned or occupied by, or rented or loaned to, any insured, other than that additional insured; or Page 4 of 24 Form SS 00 08 04 05 HB -176-Item 7. - 24 BUSINESS UABILITY COVERAGE FORM (110 "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire"; (b) At or from any premises, site or location which is or was at any time used by or for any insured or others for the handling, storage, disposal, processing or treatment of waste; (c ) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for: (i) Any insured; or (ii) Any person or organization for whom you may be legally responsible; (d) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations if the "pollutants" are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor. However, this subparagraph does not apply to: (I) "Bodily injury" or "property damage" arising out of the escape of fuels, lubricants or other operating fluids which are needed to perform the normal electrical, hydraulic Or mechanical functions necessary for the operation of "mobile equipment" or its parts, if such fuels, lubricants or other operating fluids escape from a vehicle part designed to hold, store or receive them. This exception does not apply if the "bodily injury" or "property damage" arises out of the intentional discharge, dispersal or release of the fuels, lubricants or other operating fluids, or if such fuels, lubricants or other operating fluids are brought on or to the premises, site or location with the intent that they be discharged, dispersed or released as part of the operations being performed by such insured, contractor or subcontractor; (11) 'Bodily injury" or "property damage" sustained within a building and caused by the release of gases, fumes or vapors from materials brought into that building in connection with operations being performed by you or on your behalf by a contractor or subcontractor; or (Ili) "Bodily injury" or "property damage" arising out of heat, smoke or fumes from a "hostile fire"; or (e) At or from any premises, site or location on which any insured or any contractors or subcontractors working directly or indirectly on any insured's behalf are performing operations if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants". (2) Any loss, cost or expense arising out of any: (a) Request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, "pollutants"; or (b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, "pollutants". However, this paragraph does not apply to liability for damages because of "property damage" that the insured would have in the absence of such request, demand, order or statutory or regulatory requirement, or such claim or "suit" by or on behalf of a governmental authority. Fonn SS 00 08 04 05 Page 6 of 24 HB -177-Item 7. - 25 BUSINESS LIABILITY COVERAGE FORM g. Aircraft, Auto Or Watercraft "Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading". This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any insured. This exclusion does not apply to: (1) A watercraft while ashore on premises you own or rent; (2) A watercraft you do not own that is: (a) Less than 51 feet long; and (b) Not being used to carry persons for a charge; (3) Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured; (4) Liability assumed under any "insured contract" for the ownership, maintenance or use of aircraft or watercraft; (5) "Bodily injury" or "property damage" arising out of the operation of any of the equipment listed in Paragraph f.(2) or f.(3) of the definition of "mobile equipment"; or (6 ) An aircraft that is not owned by any insured and is hired, chartered or loaned with a paid crew. However, this exception does not apply if the insured has any other insurance for such "bodily injury" or "property damage", whether the other insurance is primary, excess, contingent or on any other basis. h. Mobile Equipment "Bodily injury" or "property damage" arising out of: (1) The transportation of "mobile equipment" by an "auto" owned or operated by or rented or loaned to any insured; or (2) The use of "mobile equipment" in, or while in practice or preparation for, a prearranged racing, speed or demolition contest or in any stunting activity. i. War "Bodily injury", "property damage" or "personal and advertising injury", however caused, arising, directly or indirectly, out of: (1) War, including undeclared or civil war; (2) Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or (3) Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these. I. Professional Services "Bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of or failure to render any professional service. This includes but is not limited to: (1) Legal, accounting or advertising services; (2) Preparing, approving, or failing to prepare or approve maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; (3) Supervisory, inspection, architectural or engineering activities; (4) Medical, surgical, dental, x-ray or nursing services treatment, advice or instruction; (5) Any health or therapeutic service treatment, advice or instruction; (6) Any service, treatment, advice or instruction for the purpose of appearance or skin enhancement, hair removal or replacement or personal grooming; (7) Optical or hearing aid services including the prescribing, preparation, fitting, demonstration or distribution of ophthalmic lenses and similar products or hearing aid devices; Page 6 of 24 Form SS 00 08 04 05 HB -178-Item 7. - 26 BUSINESS UABIUTY COVERAGE FORM (8) Optometry or optometric services including but not limited to examination of the eyes and the prescribing, preparation, fitting,demonstration or distribution of ophthalmic lenses and similar products; (9) Any: (a) Body piercing (not including ear piercing); (b) Tattooing, including but not limited to the insertion of pigments into or under the skin; and (c) Similar services; (10) Services in the practice of pharmacy; and (11) Computer consulting, design or programming services, including web site design. Paragraphs (4) and (6) of this exclusion do not apply to the Incidental Medical Malpractice coverage afforded under Paragraph 1.e. in Section A. - Coverages. k. Damage To Property "Property damage" to: (1) Property you own, rent or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property; (2) Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises; (3) Property loaned to you; (4) Personal property in the care, custody or control of the insured; (8) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or (8) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it. Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A separate Limit of Insurance applies to Damage To Premises Rented To You as described in Section D. - Limits Of Insurance. Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you. Paragraphs (3) and (4) of this exclusion do not apply to the use of elevators. Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement. Paragraphs (3) and (4) of this exclusion do not apply to "property damage" to borrowed equipment while not being used to perform operations at a job site. Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard". I. Damage To Your Product "Property damage" to "your product" arising out of it or any part of it. m. Damage To Your Work "Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard". This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. n. Damage To Impaired Property Or Property Not Physically Injured "Property damage" to "impaired property" or property that has not been physically injured, arising out of: (1) A defect, deficiency, inadequacy or dangerous condition in "your product" or "your work"; or (2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to "your product" or "your work" after it has been put to its intended use. Form SS 00 08 04 05 Page 7 of 24 HB -179-Item 7. - 27 BUSINESS LIABILITY COVERAGE FORM o. Recall Of Products, Work Or Impaired Property Damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of: (1) "Your product"; (2) "Your work"; or (3) "Impaired property"; if such product, work or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it. p. Personal And Advertising Injury "Personal and advertising injury": (1) Arising out of oral, written or electronic publication of material, if done by or at the direction of the insured with knowledge of its falsity; (2) Arising out of oral, written or electronic publication of material whose first publication took place before the beginning of the policy period; (3) Arising out of a criminal act committed by or at the direction of the insured; (4) Arising out of any breach of contract, except an implied contract to use another's "advertising idea" in your "advertisement"; (5) Arising out of the failure of goods, products or services to conform with any statement of quality or performance made in your "advertisement"; (6) Arising out of the wrong description of the price of goods, products or services; (7) Arising out of any violation of any intellectual property rights such as copyright, patent, trademark, trade name, trade secret, service mark or other designation of origin or authenticity. However, this exclusion does not apply to infringement, in your "advertisement", of (a) Copyright; (b) Slogan, unless the slogan is also a trademark, trade name, service mark or other designation of origin or authenticity; or (c) Title of any literary or artistic work; (6) Arising out of an offense committed by an insured whose business is: (a) Advertising, broadcasting, publishing or telecasting; (b) Designing or determining content of web sites for others; or (c) An Internet search, access, content or service provider. However, this exclusion does not apply to Paragraphs a., b. and c. under the definition of "personal and advertising injury" in Section G. — Liability And Medical Expenses Definitions. For the purposes of this exclusion, placing an "advertisement" for or linking to others on your web site, by itself, is not considered the business of advertising, broadcasting, publishing or telecasting; (9) Arising out of an electronic chat room or bulletin board the insured hosts, owns, or over which the insured exercises control; (10) Arising out of the unauthorized use of another's name or product in your e-mail address, domain name or metatags, or any other similar tactics to mislead another's potential customers; (11) Arising out of the violation of a person's right of privacy created by any state or federal act. However, this exclusion does not apply to liability for damages that the insured would have in the absence of such state or federal act; (12) Arising out of: (a) An "advertisement" for others on your web site; (b) Placing a link to a web site of others on your web site; (c) Content from a web site of others displayed within a frame or border on your web site. Content includes information, code, sounds, text, graphics or images; or (d) Computer code, software or programming used to enable: (i) Your web site; or (II) The presentation or functionality of an "advertisement' or other content on your web site; Page 8 of 24 Form SS 00 08 04 05 HB -180-Item 7. - 28 BUSINESS LIABILITY COVERAGE FORM (13) Arising out of a violation of any anti- trust law; (14) Arising out of the fluctuation in price or value of any stocks, bonds or other securities; or (15) Arising out of discrimination or humiliation committed by or at the direction of any "executive officer", director, stockholder, partner or member of the insured. q. Electronic Data Damages arising out of the loss of, loss of use of, damage to, corruption of, inability to access, or inability to manipulate "electronic data". r. Employment-Related Practices "Bodily injury" or "personal and advertising injury" to: (1) A person arising out of any: (a) Refusal to employ that person; (b) Termination of that person's employment; or (c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation or discrimination directed at that person; or (2) The spouse, child, parent, brother or sister of that person as a consequence of "bodily injury" or "personal and advertising injury" to the person at whom any of the employment-related practices described in Paragraphs (a), (b), or (c) above is directed. This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. s. Asbestos (1) "Bodily injury", "property damage" or "personal and advertising injury" arising out of the "asbestos hazard", (2) Any damages, judgments, settlements, loss, costs or expenses that: (a) May be awarded or incurred by reason of any claim or suit alleging actual or threatened injury or damage of any nature or kind to persons or property which would not have occurred in whole or in part but for the "asbestos hazard"; (b) Arise out of any request, demand, order or statutory or regulatory requirement that any insured or others test for, monitor, clean up, remove, encapsulate, contain, treat, detoxify or neutralize or in any way respond to or assess the effects of an "asbestos hazard"; or (c) Arise out of any claim or suit for damages because of testing for, monitoring, cleaning up, removing, encapsulating, containing, treating, detoxifying or neutralizing or in any way responding to or assessing the effects of an "asbestos hazard". t. Violation Of Statutes That Govern E- Mails, Fax, Phone Calls Or Other Methods Of Sending Material Or Information "Bodily injury", "property damage", or "personal and advertising injury" arising directly or indirectly out of any action or omission that violates or is alleged to violate: (1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law; (2) The CAN-SPAM Act of 2003, including any amendment of or addition to such law; or (3) Any statute, ordinance or regulation, other than the TCPA or CAN-S PAM Act of 2003, that prohibits or limits the sending, transmitting, communicating or distribution of material or information. Damage To Premises Rented To You — Exception For Damage By Fire, Lightning or Explosion Exclusions C. through h. and k. through o. do not apply to damage by fire, lightning or explosion to premises rented to you or temporarily occupied by you with permission of the owner. A separate Limit of Insurance applies to this coverage as described in Section D. - Liability And Medical Expenses Limits Of Insurance. Form SS 00 08 04 05 Page 9 of 24 HB -181-Item 7. - 29 BUSINESS LIABILITY COVERAGE FORM 2. Applicable To Medical Expenses Coverage We will not pay expenses for "bodily injury": a. Any Insured To any insured, except "volunteer workers". b. Hired Person To a person hired to do work for or on behalf of any insured or a tenant of any insured. c. Injury On Normally Occupied Premises To a person injured on that part of premises you own or rent that the person normally occupies. d. Workers' Compensation And Similar Laws To a person, whether or not an "employee" of any insured, if benefits for the "bodily injury" are payable or must be provided under a workers' compensation or disability benefits law or a similar law. e. Athletics Activities To a person injured while practicing, instructing or participating in any physical exercises or games, sports or athletic contests. f. Products -Completed Operations Hazard Included with the "products-completed operations hazard". g. Business Liability Exclusions Excluded under Business Liability Coverage. C. WHO IS AN INSURED 1. If you are designated in the Declarations as: a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner. b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business. C. A limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business. Your managers are insureds, but only with respect to their duties as your managers. d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your "executive officers" and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders. e. A trust, you are an insured. Your trustees are also insureds, but only with respect to their duties as trustees. 2. Each of the following is also an insured: a. Employees And Volunteer Workers Your "volunteer workers" only while performing duties related to the conduct of your business, or your "employees", other than either your "executive officers" (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" or "volunteer workers" are insureds for: (1) "Bodily injury" or "personal and advertising injury": (a) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), or to a co-"employee" while in the course of his or her employment or performing duties related to the conduct of your business, or to your other "volunteer workers" while performing duties related to the conduct of your business; (b) To the spouse, child, parent, brother or sister of that co- "employee" or that "volunteer worker" as a consequence of Paragraph (1)(a) above; (c) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraphs (1)(a) or (b) above; or (d) Arising out of his or her providing or failing to provide professional health care services. If you are not in the business of providing professional health care services, Paragraph (d) does not apply to any nurse, emergency medical technician or paramedic employed by you to provide such services. (2) "Property damage" to property: (a) Owned, occupied or used by, Page 10 of 24 Form SS 00 08 04 05 HB -182-Item 7. - 30 BUSINESS UABILITY COVERAGE FORM (b) Rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by you, any of your "employees", "volunteer workers", any partner or member (if you are a partnership or joint venture), or any member (if you are a limited liability company). b. Real Estate Manager Any person (other than your "employee" or "volunteer worker), or any organization while acting as your real estate manager. c. Temporary Custodians Of Your Property Any person or organization having proper temporary custody of your property if you die, but only: (1) With respect to liability arising out of the maintenance or use of that property; and (2) Until your legal representative has been appointed. d. Legal Representative If You Die Your legal representative if you die, but only with respect to duties as such. That representative will have all your rights and duties under this insurance. e. Unnamed Subsidiary Any subsidiary and subsidiary thereof, of yours which is a legally incorporated entity of which you own a financial interest of more than 50% of the voting stock on the effective date of this Coverage Part. The insurance afforded herein for any subsidiary not shown in the Declarations as a named insured does not apply to injury or damage with respect to which an insured under this insurance is also an insured under another policy or would be an insured under such policy but for its termination or upon the exhaustion of its limits of insurance. 3. Newly Acquired Or Formed Organization Any organization you newly acquire or form, other than a partnership, joint venture or limited liability company, and over which you maintain financial interest of more than 50% of the voting stock, will qualify as a Named Insured if there is no other similar insurance available to that organization. However: a. Coverage under this provision is afforded only until the 180th day after you acquire or form the organization or the end of the policy period, whichever is earlier; and b. Coverage under this provision does not apply to: "Bodily injury" or "property damage" that occurred; or (2) "Personal and advertising injury" arising out of an offense committed before you acquired or formed the organization. 4. Operator Of Mobile Equipment With respect to "mobile equipment" registered in your name under any motor vehicle registration law, any person is an insured while driving such equipment along a public highway with your permission. Any other person or organization responsible for the conduct of such person is also an insured, but only with respect to liability arising out of the operation of the equipment, and only if no other insurance of any kind is available to that person or organization for this liability. However, no person or organization is an insured with respect to: a. "Bodily injury" to a co-"employee" of the person driving the equipment; or b. "Property damage" to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an insured under this provision. 6. Operator of Nonowned Watercraft With respect to watercraft you do not own that is less than 51 feet long and is not being used to carry persons for a charge, any person is an insured while operating such watercraft with your permission. Any other person or organization responsible for the conduct of such person is also an insured, but only with respect to liability arising out of the operation of the watercraft, and only if no other insurance of any kind is available to that person or organization for this liability. However, no person or organization is an insured with respect to: a. "Bodily injury" to a co-employee" of the person operating the watercraft; or b. "Property damage" to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an insured under this provision. 6. Additional Insureds When Required By Written Contract, Written Agreement Or Permit The person(s) or organization(s) identified in Paragraphs a. through f. below are additional insureds when you have agreed, in a written Form SS 00 08 04 06 Page 11 of 24 HB -183-Item 7. - 31 BUSINESS LIABILITY COVERAGE FORM contract, written agreement or because of a permit issued by a state or political subdivision, that such person or organization be added as an additional insured on your policy, provided the injury or damage occurs subsequent to the execution of the contract or agreement, or the issuance of the permit. A person or organization is an additional insured under this provision only for that period of time required by the contract, agreement or permit. However, no such person or organization is an additional insured under this provision if such person or organization is included as an additional insured by an endorsement issued by us and made a part of this Coverage Part, including all persons or organizations added as additional insureds under the specific additional insured coverage grants in Section F. — Optional Additional Insured Coverages. a. Vendors Any person(s) or organization(s) (referred to below as vendor), but only with respect to "bodily injury" or "property damage" arising out of "your products" which are distributed or sold in the regular course of the vendor's business and only if this Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products-completed operations hazard". (1) The insurance afforded to the vendor is subject to the following additional exclusions: This insurance does not apply to: (e) Any failure to make such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products; (f) Demonstration, installation, servicing or repair operations, except such operations performed at the vendor's premises in connection with the sale of the product; (g) Products which, after distribution or sale by you, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for the vendor; or (h) "Bodily injury" or "property damage" arising out of the sole negligence of the vendor for its own acts or omissions or those of its employees or anyone else acting on its behalf. However, this exclusion does not apply to: (I) The exceptions contained in Subparagraphs (d) or (f); or (II) Such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. (2) This insurance does not apply to any insured person or organization from whom you have acquired such products, or any ingredient, part or container, entering into, accompanying or containing such products. b. Lessors Of Equipment (1) Any person or organization from whom you lease equipment; but only with respect to their liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person or organization. (a) "Bodily injury" or "property damage" for which the vendor is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages that the vendor would have in the absence of the contract or agreement; (b) Any express warranty unauthorized by you; (c) Any physical or chemical change in the product made intentionally by the vendor; (d) Repackaging, except when unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; Page 12 of 24 Form SS 00 08 04 05 HB -184-Item 7. - 32 BUSINESS UABILITY COVERAGE FORM (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after you cease to lease that equipment. c. Lessors Of Land Or Premises (1) Any person or organization from whom you lease land or premises, but only with respect to liability arising out of the ownership, maintenance or use of that part of the land or premises leased to you. (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to: (a) Any "occurrence" which takes place after you cease to lease that land or be a tenant in that premises; or (b) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. d. Architects, Engineers Or Surveyors (1) Any architect, engineer, or surveyor, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: (a) In connection with your premises; Or (b) In the performance of your ongoing operations performed by you or on your behalf. (2) With respect to the insurance afforded to these additional insureds, the following additional exclusion applies: This insurance does not apply to "bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of or the failure to render any professional services by or for you, including: (a) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (b) Supervisory, inspection, architectural Or engineering activities. e. Permits issued By State Or Political Subdivisions (1) Any state or political subdivision, but only with respect to operations performed by you or on your behalf for which the state or political subdivision has issued a permit. (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to: (a) "Bodily injury", "property damage" or "personal and advertising injury" arising out of operations performed for the state or municipality; or (b) "Bodily injury" or "property damage" included within the "products- completed operations hazard". f. Any Other Party (1 ) Any other person or organization who is not an insured under Paragraphs a. through e. above, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: (a) In the performance of your ongoing operations; (b) In connection with your premises owned by or rented to you; or (C) in connection with "your work" and included within the "products- completed operations hazard", but only if The written contract or written agreement requires you to provide such coverage to such additional insured; and (ii) This Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products- completed operations hazard". (2) With respect to the insurance afforded to these additional insureds, this insurance does not apply to: "Bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of, or the failure to render, any professional architectural, engineering or surveying services, including: Form SS 00 08 04 05 Page 13 of 24 HB -185-Item 7. - 33 BUSINESS LIABILITY COVERAGE FORM (a) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (b) Supervisory, inspection, architectural or engineering activities. The limits of insurance that apply to additional insureds are described in Section D. — Limits Of Insurance. How this insurance applies when other insurance is available to an additional insured is described in the Other Insurance Condition in Section E. — Liability And Medical Expenses General Conditions. No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations. D. LIABILITY AND MEDICAL EXPENSES LIMITS OF INSURANCE 1. The Most We Will Pay The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of: a. Insureds; b. Claims made or "suits" brought; or c. Persons or organizations making claims or bringing "suits". 2. Aggregate Limits The most we will pay for: a. Damages because of "bodily injury" and "property damage" included in the "products-completed operations hazard" is the Products-Completed Operations Aggregate Limit shown in the Declarations. b. Damages because of all other "bodily injury", "property damage" or "personal and advertising injury", including medical expenses, is the General Aggregate Limit shown in the Declarations. This General Aggregate Limit applies separately to each of your "locations" owned by or rented to you, "Location" means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway or right-of-way of a railroad. This General Aggregate limit does not apply to "property damage" to premises while rented to you or temporarily occupied by you with permission of the owner, arising out of fire, lightning or explosion. 3. Each Occurrence Limit Subject to 2.a. or 2.b above, whichever applies, the most we will pay for the sum of all damages because of all "bodily injury", "property damage" and medical expenses arising out of any one "occurrence" is the Liability and Medical Expenses Limit shown in the Declarations. The most we will pay for all medical expenses because of "bodily injury" sustained by any one person is the Medical Expenses Limit shown in the Declarations. 4. Personal And Advertising Injury Limit Subject to 2.b. above, the most we will pay for the sum of all damages because of all "personal and advertising injury" sustained by any one person or organization is the Personal and Advertising Injury Limit shown in the Declarations. 5. Damage To Premises Rented To You Limit The Damage To Premises Rented To You Limit is the most we will pay under Business Liability Coverage for damages because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, lightning or explosion, while rented to you or temporarily occupied by you with permission of the owner. In the case of damage by fire, lightning or explosion, the Damage to Premises Rented To You Limit applies to all damage proximately caused by the same event, whether such damage results from fire, lightning or explosion or any combination of these. 6. How Limits Apply To Additional Insureds The most we will pay on behalf of a person or organization who is an additional insured under this Coverage Part is the lesser of: a. The limits of insurance specified in a written contract, written agreement or permit issued by a state or political subdivision; or b. The Limits of Insurance shown in the Declarations. Such amount shall be a part of and not in addition to the Limits of Insurance shown in the Declarations and described in this Section. Page 14 of 24 Form SS 00 08 04 05 HB -186-Item 7. - 34 BUSINESS LIABILITY COVERAGE FORM If more than one limit of insurance under this policy and any endorsements attached thereto applies to any claim or "suit", the most we will pay under this policy and the endorsements is the single highest limit of liability of all coverages applicable to such claim or "suit". However, this paragraph does not apply to the Medical Expenses limit set forth in Paragraph 3. above. The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance. E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 1. Bankruptcy Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Coverage Part. 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit a. Notice Of Occurrence Or Offense You or any additional insured must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include: (1) How, when and where the "occurrence" or offense took place; (2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the ''occurrence" or offense. b. Notice Of Claim If a claim is made or "suit" is brought against any insured, you or any additional insured must: (1) Immediately record the specifics of the claim or "suit" and the date received; and (2) Notify us as soon as practicable. You or any additional insured must see to it that we receive a written notice of the claim or "suit" as soon as practicable. c. Assistance And Cooperation Of The Insured You and any other involved insured must: (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit"; (2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation, settlement of the claim Or defense against the "suit; and (4) Assist us, upon our request, in the enforcement of any right against any person or organization that may be liable to the insured because of injury or damage to which this insurance may also apply. d. Obligations At The Insured's Own Cost No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. e. Additional Insured's Other Insurance If we cover a claim or "suit" under this Coverage Part that may also be covered by other insurance available to an additional insured, such additional insured must submit such claim or "suit" to the other insurer for defense and indemnity. However, this provision does not apply to the extent that you have agreed in a written contract, written agreement or permit that this insurance is primary and non-contributory with the additional insured's own insurance. f. Knowledge Of An Occurrence, Offense, Claim Or Suit Paragraphs a. and b. apply to you or to any additional insured only when such "occurrence", offense, claim or "suit" is known to: (1) You or any additional insured that is an individual; (2) Any partner, if you or an additional insured is a partnership; (3) Any manager, if you or an additional insured is a limited liability company; (4) Any "executive officer" or insurance manager, if you or an additional insured is a corporation; (5) Any trustee, if you or an additional insured is a trust; or (6) Any elected or appointed official, if you or an additional insured is a political subdivision or public entity. Form SS 00 08 04 05 Page 15 of 24 HB -187-Item 7. - 35 BUSINESS LIABILITY COVERAGE FORM This Paragraph f. applies separately to you and any additional insured. 3. Financial Responsibility Laws a. When this policy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle financial responsibility law, the insurance provided by the policy for "bodily injury" liability and "property damage" liability will comply with the provisions of the law to the extent of the coverage and limits of insurance required by that law. b. With respect to "mobile equipment" to which this insurance applies, we will provide any liability, uninsured motorists, underinsured motorists, no-fault or other coverage required by any motor vehicle law. We will provide the required limits for those coverages. 4. Legal Action Against Us No person or organization has a right under this Coverage Form: a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or b. To sue us on this Coverage Form unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this insurance or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative. 5. Separation Of Insureds Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this policy to the first Named Insured, this insurance applies: a. As if each Named Insured were the only Named Insured; and b. Separately to each insured against whom a claim is made or "suit" is brought. 6. Representations a. When You Accept This Policy By accepting this policy, you agree: (1) The statements in the Declarations are accurate and complete; (2) Those statements are based upon representations you made to us; and (3) We have issued this policy in reliance upon your representations. b. Unintentional Failure To Disclose Hazards If unintentionally you should fail to disclose all hazards relating to the conduct of your business at the inception date of this Coverage Part, we shall not deny any coverage under this Coverage Part because of such failure. 7. Other Insurance If other valid and collectible insurance is available for a loss we cover under this Coverage Part, our obligations are limited as follows: a. Primary Insurance This insurance is primary except when b. below applies. If other insurance is also primary, we will share with all that other insurance by the method described in c. below. b. Excess Insurance This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis: (1) Your Work That is Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage for "your work"; (2) Premises Rented To You That is fire, lightning or explosion insurance for premises rented to you or temporarily occupied by you with permission of the owner; (3) Tenant Liability That is insurance purchased by you to cover your liability as a tenant for "property damage" to premises rented to you or temporarily occupied by you with permission of the owner; (4) Aircraft, Auto Or Watercraft If the loss arises out of the maintenance or use of aircraft, "autos" or watercraft to the extent not subject to Exclusion g. of Section A. — Coverages. (5) Property Damage To Borrowed Equipment Or Use Of Elevators If the loss arises out of "property damage" to borrowed equipment or the use of elevators to the extent not subject to Exclusion k. of Section A. — Coverages. Page 16 of 2A. Form SS 00 08 04 05 HB -188-Item 7. - 36 BUSINESS UABILITY COVERAGE FORM When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of: (1) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and (2) The total of all deductible and self- insured amounts under all that other insurance. We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part. c. Method Of Sharing If all the other insurance permits contribution by equal shares, we will follow this method also. Under this approach, each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first. If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers. 8. Transfer Of Rights Of Recovery Against Others To Us a. Transfer Of Rights Of Recovery If the insured has rights to recover all or part of any payment, including Supplementary Payments, we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them. This condition does not apply to Medical Expenses Coverage. b. Waiver Of Rights Of Recovery (Waiver Of Subrogation) If the insured has waived any rights of recovery against any person or organization for all or part of any payment, including Supplementary Payments, we have made under this Coverage Part, we also waive that right, provided the insured waived their rights of recovery against such person or organization in a contract, agreement or permit that was executed prior to the injury or damage. (6) When You Are Added As An Additional Insured To Other Insurance That is other insurance available to you covering liability for damages arising out of the premises or operations, or products and completed operations, for which you have been added as an additional insured by that insurance; or (7) When You Add Others As An Additional insured To This Insurance That is other insurance available to an additional insured. However, the following provisions apply to other insurance available to any person or organization who is an additional insured under this Coverage Part: (a) Primary insurance When Required By Contract This insurance is primary if you have agreed in a written contract, written agreement or permit that this insurance be primary. If other insurance is also primary, we will share with all that other insurance by the method described in C. below. (b) Primary And Non-Contributory To Other Insurance When Required By Contract If you have agreed in a written contract, written agreement or permit that this insurance is primary and non-contributory with the additional insured's own insurance, this insurance is primary and we will not seek contribution from that other insurance. Paragraphs (a) and (b) do not apply to other insurance to which the additional insured has been added as an additional insured. When this insurance is excess, we will have no duty under this Coverage Part to defend the insured against any "suit" if any other insurer has a duty to defend the insured against that "suit". If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers. Form SS 00 08 04 05 Page 17 of 24 HB -189-Item 7. - 37 BUSINESS LIABILITY COVERAGE FORM F. OPTIONAL ADDITIONAL INSURED COVERAGES If listed or shown as applicable in the Declarations, one or more of the following Optional Additional Insured Coverages also apply. When any of these Optional Additional Insured Coverages apply, Paragraph 6. (Additional Insureds When Required by Written Contract, Written Agreement or Permit) of Section C., Who Is An Insured, does not apply to the person or organization shown in the Declarations. These coverages are subject to the terms and conditions applicable to Business Liability Coverage in this policy, except as provided below: 1. Additional Insured - Designated Person Or Organization WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: a. In the performance of your ongoing operations; or b. In connection with your premises owned by or rented to you. 2. Additional Insured - Managers Or Lessors Of Premises a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Designated Person Or Organization; but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Declarations. b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to: (1) Any "occurrence" which takes place after you cease to be a tenant in that premises; or (2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. 3. Additional Insured Grantor Of Franchise WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Grantor Of Franchise, but only with respect to their liability as grantor of franchise to you. 4. Additional Insured - Lessor Of Leased Equipment a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured — Lessor of Leased Equipment, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization(s). b. With respect to the insurance afforded to these additional insureds, this insurance does not apply to any "occurrence" which takes place after you cease to lease that equipment. 5. Additional Insured - Owners Or Other Interests From Whom Land Has Been Leased a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured — Owners Or Other Interests From Whom Land Has been Leased, but only with respect to liability arising out of the ownership, maintenance or use of that part of the land leased to you and shown in the Declarations. b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to: (11 ) Any "occurrence" that takes place after you cease to lease that land; or (2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. 6. Additional Insured - State Or Political Subdivision — Permits a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the state or political subdivision shown in the Declarations as an Additional Page 18 of 24 Form SS 00 08 04 05 HB -190-Item 7. - 38 BUSINESS LIABILITY COVERAGE FORM Insured — State Or Political Subdivision - Permits, but only with respect to operations performed by you or on your behalf for which the state or political subdivision has issued a permit. b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to: (1) "Bodily injury", "property damage" or "personal and advertising injury" arising out of operations performed for the state or municipality; or (2) "Bodily injury" or "property damage" included in the "product-completed operations" hazard. 7. Additional Insured — Vendors a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) (referred to below as vendor) shown in the Declarations as an Additional Insured - Vendor, but only with respect to "bodily injury' or "property damage" arising out of "your products" which are distributed or sold in the regular course of the vendor's business and only if this Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products-completed operations hazard". b. The insurance afforded to the vendor is subject to the following additional exclusions: (1) This insurance does not apply to: (a) Any failure to make such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products; (f) Demonstration, installation, servicing or repair operations, except such operations performed at the vendor's premises in connection with the sale of the product; (g) Products which, after distribution or sale by you, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for the vendor; or (h) "Bodily injury" or "property damage" arising out of the sole negligence of the vendor for its own acts or omissions or those of its employees or anyone else acting on its behalf. However, this exclusion does not apply to: (I) The exceptions contained in Subparagraphs (d) or Cf); or (ii) Such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. (2) This insurance does not apply to any insured person or organization from whom you have acquired such products, or any ingredient, part or container, entering into, accompanying or containing such products. 8. Additional Insured — Controlling Interest WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured — Controlling Interest, but only with respect to their liability arising out of: a. Their financial control of you; or b. Premises they own, maintain or control while you lease or occupy these premises. (a) "Bodily injury" or "property damage" for which the vendor is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages that the vendor would have in the absence of the contract or agreement; (b) Any express warranty unauthorized by you; (c) Any physical or chemical change in the product made intentionally by the vendor; (d) Repackaging, unless unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; Fonn SS 00 08 04 OS Page 19 of 24 HB -191-Item 7. - 39 BUSINESS LIABILITY COVERAGE FORM This insurance does not apply to structural alterations, new construction and demolition operations performed by or for that person or organization. 9. Additional Insured — Owners, Lessees Or Contractors — Scheduled Person Or Organization a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured — Owner, Lessees Or Contractors, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: (1) In the performance of your ongoing operations for the additional insured(s); or (2) In connection with your work" performed for that additional insured and included within the "products- completed operations hazard", but only if this Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products-completed operations hazard". b. With respect to the insurance afforded to these additional insureds, this insurance does not apply to "bodily injury", "property damage" or "personal an advertising injury" arising out of the rendering of, or the failure to render, any professional architectural, engineering or surveying services, including: (1) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (2) Supervisory, inspection, architectural or engineering activities. 10. Additional Insured — Co-Owner Of Insured Premises WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or Organization(s) shown in the Declarations as an Additional Insured — Co- Owner Of Insured Premises, but only with respect to their liability as co-owner of the premises shown in the Declarations. The limits of insurance that apply to additional insureds are described in Section D. — Limits Of Insurance. How this insurance applies when other insurance is available to an additional insured is described in the Other Insurance Condition in Section E. — Liability And Medical Expenses General Conditions. G. LIABILITY AND MEDICAL EXPENSES DEFINITIONS 1. "Advertisement" means the widespread public dissemination of information or images that has the purpose of inducing the sale of goods, products or services through: Radio; Television; Billboard; Magazine; Newspaper; b. The Internet, but only that part of a web site that is about goods, products or services for the purposes of inducing the sale of goods, products or services; or c. Any other publication that is given widespread public distribution. However, "advertisement" does not include: a. The design, printed material, information or images contained in, on or upon the packaging or labeling of any goods or products; or b. An interactive conversation between or among persons through a computer network. 2. "Advertising idea" means any idea for an "advertisement". 3. "Asbestos hazard" means an exposure or threat of exposure to the actual or alleged properties of asbestos and includes the mere presence of asbestos in any form. 4. "Auto" means a land motor vehicle, trailer or semi-trailer designed for travel on public roads, including any attached machinery or equipment. But "auto" does not include "mobile equipment". 5. "Bodily injury" means physical: a. Injury; b. Sickness; or C. Disease sustained by a person and, if arising out of the above, mental anguish or death at any time. 6. "Coverage territory" means: Page 20 of 24 Form SS 00 08 04 05 HB -192-Item 7. - 40 BUSINESS LIABILITY COVERAGE FORM a. The United States of America (including its territories and possessions), Puerto Rico and Canada; b. International waters or airspace, but only if the injury or damage occurs in the course of travel or transportation between any places included in a. above; c. All other parts of the world if the injury or damage arises out of: (1) Goods or products made or sold by you in the territory described in a. above; (2) The activities of a person whose home is in the territory described in a. above, but is away for a short time on your business; or (3) "Personal and advertising injury" offenses that take place through the Internet or similar electronic means of communication provided the insured's responsibility to pay damages is determined in the United States of America (including its territories and possessions), Puerto Rico or Canada, in a ''suit" on the merits according to the substantive law in such territory, or in a settlement we agree to. 7. "Electronic data" means information, facts or programs: a. Stored as or on; b. Created or used on; or C. Transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any other media which are used with electronically controlled equipment. 8. "Employee" includes a "leased worker". "Employee" does not include a "temporary worker". 9. "Executive officer" means a person holding any of the officer positions created by your charter, constitution, by-laws or any other similar governing document. 10. "Hostile fire" means one which becomes uncontrollable or breaks out from where it was intended to be. 11. "Impaired property" means tangible property, other than "your product" or "your work", that cannot be used or is less useful because: a. It incorporates "your product" or "your work" that is known or thought to be defective, deficient, inadequate or dangerous; or b. You have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by: a. The repair, replacement, adjustment Of removal of "your product" or "your work"; Of b. Your fulfilling the terms of the contract or agreement. 12. "Insured contract" means: a. A contract for a lease of premises. However, that portion of the contract for a lease of premises that indemnifies any person or organization for damage by fire, lightning or explosion to premises while rented to you or temporarily occupied by you with permission of the owner is subject to the Damage To Premises Rented To You limit described in Section D. — Liability and Medical Expenses Limits of Insurance. b. A sidetrack agreement; c. Any easement or license agreement, including an easement or license agreement in connection with construction or demolition operations on or within 50 feet of a railroad; d. Any obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality; e. An elevator maintenance agreement; or f. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "property damage" to a third person or organization, provided the "bodily injury" or "property damage" is caused, in whole or in part, by you or by those acting on your behalf. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. Paragraph f. includes that part of any contract or agreement that indemnifies a railroad for "bodily injury" or "property damage" arising out of construction or demolition operations within 50 feet of any railroad property and affecting any railroad bridge or trestle, tracks, road-beds, tunnel, underpass or crossing. However, Paragraph f. does not include that part of any contract or agreement: Form SS 00 08 04 05 Page 21 of 24 HB -193-Item 7. - 41 BUSINESS LIABILITY COVERAGE FORM (1) That indemnifies an architect, engineer or surveyor for injury or damage arising out of: (a) Preparing, approving or failing to prepare or approve maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specifications; or (b) Giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage; or (2) Under which the insured, if an architect, engineer or surveyor, assumes liability for an injury or damage arising out of the insured's rendering or failure to render professional services, including those listed in (1) above and supervisory, inspection, architectural or engineering activities. 13. "Leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include a "temporary worker". 14. "Loading or unloading" means the handling of property: a. After it is moved from the place where it is accepted for movement into or onto an aircraft, watercraft or "auto"; b. While it is in or on an aircraft, watercraft or "auto"; or c. While it is being moved from an aircraft, watercraft or "auto" to the place where it is finally delivered; but "loading or unloading" does not include the movement of property by means of a mechanical device, other than a hand truck, that is not attached to the aircraft, watercraft or "auto". 15. "Mobile equipment" means any of the following types of land vehicles, including any attached machinery or equipment: a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads; b. Vehicles maintained for use solely on or next to premises you own or rent; c. Vehicles that travel on crawler treads; d. Vehicles, whether self-propelled or not, on which are permanently mounted: (1) Power cranes, shovels, loaders, diggers or drills; or (2) Road construction or resurfacing equipment such as graders, scrapers or rollers; e. Vehicles not described in a., b., c., or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types: (1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or (2) Cherry pickers and similar devices used to raise or lower workers; f. Vehicles not described in a., b., c., or d. above maintained primarily for purposes other than the transportation of persons or cargo. However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile equipment" but will be considered "autos": (1) Equipment, of at least 1,000 pounds gross vehicle weight, designed primarily for: (a) Snow removal; (b) Road maintenance, but not construction or resurfacing; or (c) Street cleaning; (2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and (3) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment. 16., "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. 17. "Personal and advertising injury" means injury, including consequential "bodily injury", arising out of one or more of the following offenses: a. False arrest, detention or imprisonment; b. Malicious prosecution; Page 22 of 24 Form SS 00 08 04 05 HB -194-Item 7. - 42 BUSINESS UABILITY COVERAGE FORM c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that the person occupies, committed by or on behalf of its owner, landlord or lessor; d. Oral, written or electronic publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; e. Oral, written or electronic publication of material that violates a person's right of privacy; f. Copying, in your "advertisement", a person's or organization's "advertising idea" or style of "advertisement"; g. Infringement of copyright, slogan, or title of any literary or artistic work, in your "advertisement"; or h. Discrimination or humiliation that results in injury to the feelings or reputation of a natural person. 18. "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 19. "Products-completed operations hazard"; a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except: (1) Products that are still in your physical possession; or (2) Work that has not yet been completed or abandoned. However, "your work" will be deemed to be completed at the earliest of the following times: (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. The "bodily injury" or "property damage" must occur away from premises you own or rent, unless your business includes the selling, handling or distribution of "your product" for consumption on premises you own or rent. b. Does not include "bodily injury" or "property damage" arising out of: The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not owned or operated by you, and that condition was created by the "loading or unloading" of that vehicle by any insured; or (2) The existence of tools, uninstalled equipment or abandoned or unused materials. 20. "Property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of "occurrence" that caused it. As used in this definition, "electronic data" is not tangible property. 21. "Suit" means a civil proceeding in which damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies are alleged. "Suit" includes: a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent. 22. "Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions. 23. "Volunteer worker" means a person who: a. Is not your "employee"; Form SS 00 08 04 05 Page 23 of 24 HB -195-Item 7. - 43 BUSINESS LIABILITY COVERAGE FORM b. Donates his or her work; C. Acts at the direction of and within the scope of duties determined by you; and d. Is not paid a fee, salary or other compensation by you or anyone else for their work performed for you. 24. "Your product": a. Means: (1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by: (a) You; (b) Others trading under your name; or (c) A person or organization whose business or assets you have acquired; and (2) Containers (other than vehicles), materials, parts or equipment furnished in connection with such goods or products. b. Includes: (1 ) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your product"; and (2) The providing of or failure to provide warnings or instructions. C. Does not include vending machines or other property rented to or located for the use of others but not sold. 26. "Your work": a. Means: Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. b. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work"; and (2) The providing of or failure to provide warnings or instructions. Page 24 of 24 Form SS 00 08 04 05 HB -196-Item 7. - 44 Dept. ID PW 17-055 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: The City is required to update its Pavement Management Plan every two years. An amendment to the existing contract with Bucknam Infrastructure Group, Inc. will allow for this update to take place. Financial Impact: Funds in the amount of $70,000, for the contract amendment, are included in the “FY 2017/18 proposed budget in Measure M account 21385201.69635. Recommended Action: Approve and authorize the Mayor and City Clerk to execute “Amendment No. 1 to Agreement Between Bucknam Infrastructure Group, Inc. for Pavement Management Program,” in the amount of $70,000 for a total contract amount not to exceed $156,000. Alternative Action(s): Do not authorize Amendment No. 1 and direct staff on how to proceed. Analysis: The Orange County Transportation Authority requires member City’s to maintain a Pavement Management Plan (PMP) in order to be eligible to receive Measure “M2” funding. Additionally, the PMP must be updated every two years. In 2015, the City entered into a Professional Services Contract with Bucknam Infrastructure Group, Inc. to provide the 2016 PMP update. The agreement has a time frame of three years; therefore, staff is requesting that the agreement be amended in order to provide additional funds for Bucknam Infrastructure Group to provide the City with the required 2018 PMP update. The existing contract budget for the 2016 PMP was $86,000. The additional fee for the 2018 PMP update is $70,000, bringing the total contract cost to $156,000. Environmental Status: Not applicable. Strategic Plan Goal: Enhance and maintain infrastructure CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Travis K. Hopkins, PE, Director of Public Works SUBJECT: Approve and authorize execution of Amendment No. 1 with Bucknam Infrastructure Group, Inc., in the amount of $70,000 for a total contract amount not to exceed $156,000 for Pavement Management Program HB -197-Item 8. - 1 Dept. ID PW 17-055 Page 2 of 2 Meeting Date: 9/5/2017 Attachment(s): 1. Amendment No. 1 to Agreement Between the City of Huntington Beach and Bucknam Infrastructure Group, Inc. for Pavement Management Program 2. Professional Services Contract Between the City of Huntington Beach and Bucknam Infrastructure Group, Inc. for Pavement Management Program, dated 11/2/15. HB -198-Item 8. - 2 AMENDMENT NO. 1 TO AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND BUCKNAM INFRASTRUCTURE GROUP, INC. FOR PAVEMENT MANAGEMENT PROGRAM THIS AMENDMENT is made and entered into by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as "CITY," and BUCKNAM INFRASTRUCTURE GROUP, INC., a California corporation, hereinafter referred to as "CONSULTANT." WHEREAS, CITY and CONSULTANT are parties to that certain agreement, dated October 15, 2015, entitled "Professional Services Contract Between the City of Huntington Beach and Bucknatn Infrastructure Group, Inc. for Pavement Management Program," which agreement shall hereinafter be referred to as the "Original Agreement;" and CITY and CONSULTANT wish to amend the Original Agreement to reflect the additional compensation to be paid in consideration thereof by CITY to CONSULTANT, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. ADDITIONAL COMPENSATION CITY agrees to pay CONSULTANT, and CONSULTANT agrees to accept from CITY as full payment for services rendered, an additional sum not to exceed Seventy Thousand Dollars ($70,000.00), in addition to the original sum of Eighty-six Thousand Dollars ($86,000), for a new total not to exceed amount of One Hundred Fifty-six Thousand Dollars ($156,000). 2. REAFFIRMATION Except as specifically modified herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. 17-5968/163883/RLS 8/14/17/DO 1 HB -199-Item 8. - 3 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers on CONSULTANT: BUCKNAM INFRASTRUCTURE, a California corporation CITY: CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor print name ITS: (circle one) Chairma!sidJOice President AND ATTEST: By: cM`..-- City Clerk print name ITS: (cirek oneee—rcre abWhief Financial Officer/Asst. Secretary – Treasurer, Executive Director City Manager 17-5968/163883/RLS 8/14/17/DO 2 HB -200-Item 8. - 4 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND BUCKNAM INFRASTRUCTURE GROUP, INC FOR PAVEMENT MANAGEMENT PROGRAM THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY," and , a BUCKNAM INFRASTRUCTURE GROUP, INC. a CALIFORNIA CORPORATION hereinafter referred to as "CONSULTANT" WHEREAS, CITY desires to engage the services of a consultant to PROVIDE A PAVEMENT MANAGEMENT PROGRAM, and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3 03, relating to procurement of professional service contracts have been complied with, and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference These services shall sometimes hereinafter be referred to as the "PROJECT" CONSULTANT hereby designates PETER BUCKNAM who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement agree/ soffit -let/professional svcs 50 to 100 10/12 1 of 11 HB -201-Item 8. - 5 2 CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement 3 TERM, TIME OF PERFORMANCE Time is of the essence of this Agreement The services of CONSULTANT are to commence on November 2, 2015 (the "Commencement Date") This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein All tasks specified in Exhibit "A" shall be completed no later than three (3) years from the Commencement Date The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT In the event the Commencement Date precedes the Effective Date, CONSULTANT shall be bound by all terms and conditions as provided herein 4 COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed Eighty Six Thousand Dollars ($86,000 00) 5 EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake such work only after receiving written authorization from CITY Additional agree/ surfnet/professional svcs 50 to 100 10/12 2 of 11 HB -202-Item 8. - 6 compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." 7 DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first These materials may be used by CITY as it sees fit. 8 HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any) negligent (or alleged negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel This indemnity shall agree/ surfnet/professional svcs 50 to 100 10/12 3 of 11 HB -203-Item 8. - 7 apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above- mentioned insurance shall not contain a self-insured retention without the express written consent of CITY, however an insurance policy "deductible" of Ten Thousand Dollars ($10,000 00) or less is permitted A claims-made policy shall be acceptable if the policy further provides that A The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements) B CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that agree/ surfnet/professtonal svcs 50 to 100 10/12 4 of 11 HB -204-Item 8. - 8 insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement Such termination shall not effect Consultant's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10 CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement, the certificate shall A provide the name and policy number of each carrier and policy, B. state that the policy is currently in force; and C shall promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice, however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense, hold harmless and indemnification obligations as set forth in this Agreement CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance heremabove required agree/ surfnet/professtonal svcs 50 to 100 10/12 5 of 11 HB -205-Item 8. - 9 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder 12 TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein In the event of termination, all finished and unfinished documents, exhibits, report, and evidence shall, at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT 13 ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 heremabove agyee/ surfnet/professional svcs 50 to 100 10/12 6 of 11 HB -206-Item 8. - 10 14 COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U S certified mail-return receipt requested TO CITY. TO CONSULTANT: City of Huntington Beach ATTN DIRECTOR OF PUBLIC WORKS 2000 Main Street Huntington Beach, CA 92648 BUCKNAM INFRASTRUCTURE GROUP, INC Attn Peter Bucknam 3548 Seagate Way, Suite 230 Oceanside, CA 92056 agree/ surfnet/professtonal svcs 50 to 100 10/12 7 of 11 HB -207-Item 8. - 11 17 CONSENT When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event 18 MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement 20. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement No covenant or provision shall be deemed dependent upon any other unless so expressly provided here As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires Nothing contained herein shall be construed so as to require the commission of any act agree/ surfnet/professional svcs 50 to 100 10/12 8 of 11 HB -208-Item 8. - 12 contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original Each duplicate original shall be deemed an original instrument as against any party who has signed it 22 IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification 23 LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY, and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT agree/ surfnet/professional svcs 50 to 100 10/12 9 of 11 HB -209-Item 8. - 13 24 ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. 25 SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 26 GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, agree/ surfnet/professional svcs 50 to 100 10/12 10 of 11 HB -210-Item 8. - 14 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California TRAVIS K HOPKINS, DIRECTOR OF PUBLIC WORKS By: promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, [COMPANY NAME] BUCKNAM INFRASTRUCTURE GROUP, INC. .00c,e,evA-A",- print name ITS: (circle one) Chairm idk'ice President AND By I'e-re pnnt name ITS: (circle one) /Chief Fmancial Officer/Asst. Secretary — Treasurer agree/ surfaiet/professional svcs SO to 100 1A/1") 11 all HB -211-Item 8. - 15 Dept. ID PD-17-006 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: On July 12, 2017, the Police Department received notice from the California Office of Traffic Safety (OTS) that the City of Huntington Beach was tentatively awarded a new one-year traffic safety grant. The Selective Traffic Enforcement Program (STEP) grant #PT18058 provides funding in the amount of $610,000. These funds are intended to reimburse our costs associated with Sobriety/Drivers License checkpoints, one full time DUI officer and multi-faceted traffic enforcement details. These events are designed to reduce traffic collisions, injuries, and fatalities through enforcement, education, and media attention. Financial Impact: This one-year reimbursable grant is funded by the California Office of Traffic Safety. The amount of $610,000 is to be utilized between October 1, 2017 and September 30, 2018. The appropriation request is fully offset by the estimated revenues. Recommended Action: A) Approve and accept the “State of California – Office of Traffic Safety Grant Agreement PT18058” between the OTS and the City of Huntington Beach for $610,000; and, B) Authorize the Chief of Police to execute the grant agreement with the OTS; and, C) Approve appropriations and estimated revenue in the amount of $610,000; and, D) Establish a separate business unit for this funding and authorize the Chief of Police to expend up to a total of $610,000 plus accrued interest on the Selective Traffic Enforcement Program (STEP) grant. Alternative Action(s): Do not approve and direct staff accordingly. Analysis: The City of Huntington Beach has always been concerned with the safe and efficient movement of vehicular, bicycle, and pedestrian traffic on our highways, streets and bike paths. The City of CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Robert Handy, Chief of Police SUBJECT: Approve and authorize execution of a Grant Agreement with California Office of Traffic Safety (OTS) for the Selective Traffic Enforcement Program (STEP) in the amount of $610,000 for the period 10/01/17 to 09/30/18; approve appropriations and authorize the Chief of Police to establish a separate business unit for funds HB -212-Item 9. - 1 Dept. ID PD-17-006 Page 2 of 2 Meeting Date: 9/5/2017 Huntington Beach is currently going through several redevelopment projects, some of which will add to both seasonal and yearlong traffic related challenges. This particular grant will reimburse the City of Huntington Beach for expenditures associated with Sobriety/Drivers License Checkpoints, one full time DUI officer, and a variety of traffic related details. The grant also allows us to purchase traffic related equipment for DUI checkpoints. OTS will administer and handle the grant funds for the Selective Traffic Enforcement Program. Environmental Status: N/A Strategic Plan Goal: Enhance and maintain public safety Attachment(s): 1. Grant Agreement for OTS STEP Grant PT18058 HB -213-Item 9. - 2 A. AUTHORIZING OFFICIAL OF DEPARTMENT NAME: Robert Handy TITLE: Chief of Police ADDRESS: 2000 Main St. Huntington Beach, C792648 EMAIL' rhandy@hbpd.org I t.,4,,47 (Signature)/ PHONE: FAX: MICHAEL E. GATES CITY ATTORNEY ITY OF HUNTINGTON BEACH State of California — Office of Traffic Safety GRANT NUMBER GRANT AGREEMENT P118058 1. GRANT TITLE Selective Traffic Enforcement Program (STEP) 2. NAME OF AGENCY Huntington Beach 4. AGENCY UNIT TO ADMINISTER GRANT Huntington Beach Police Department 3. Grant Period From: 10/01/2017 To: 09/30/2018 5. GRANT DESCRIPTION Best practice strategies will be conducted to reduce the number of persons killed and injured in crashes involving alcohol and other primary collision factors. The funded strategies may include impaired driving enforcement, enforcement operations focusing on primary collision factors, distracted driving, night-time seat belt enforcement, special enforcement operations encouraging motorcycle safety, enforcement and public awareness in areas with a high number of bicycle and pedestrian collisions, and educational programs. These strategies are designed to earn media attention thus enhancing the overall deterrent effect. 6. Federal Funds Allocated Under This Agreement Shall Not Exceed: $610,000.00 7. TERMS AND CONDITIONS: The parties agree to comply with the terms and conditions of the following which are by this reference made a part of the Agreement: • Schedule A — Problem Statement, Goals and Objectives and Method of Procedure • Schedule B — Detailed Budget Estimate and Sub-Budget Estimate (if applicable) • Schedule B-1 — Budget Narrative and Sub-Budget Narrative (if applicable) • Exhibit A — Certifications and Assurances • Exhibit B* — OTS Grant Program Manual *Items shown with an asterisk (*), are hereby incorporated by reference and made a part of this agreement as if attached hereto. These documents can be viewed at the OTS home web page under Grants: www.ots.ca ,gov. We, the officials named below, hereby swear under penalty of perjury under the laws of the State of California that we are duly authorized to legally bind the Grant recipient to the above described Grant terms and conditions. IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. 8. Approval Signatures B. AUTHORIZING OFFICIAL OF OFFICE OF TRAFFIC SAFETY 714-536-5903 NAME: Rhonda L. Craft PHONE: (916) 509-3030 TITLE: Director FAX: (916) 509-3055 ADDRESS: 2208 Kausen Drive, Suite 300 Elk Grove, CA 95758 EMAIL: rhonda.craft@ots.ca.gov (Date) (Signature) (Date) C. ACCOUNTING OFFICER OF OFFICE OF TRAFFIC SAFETY NAME: Carolyn Vu ADDRESS: 2208 Kausen Drive, Suite 300 Elk Grove, CA 95758 9. DUNS NUMBER DUNS #: 078143948 REGISTERED ADDRESS: 2000 Main Street Huntington Beach, Ca 92648-2702 CITY: Huntington Beach I ZB3+4: 92648-2702 8/10/2017 10:33:21 AM Page 1 of 15 HB -214-Item 9. - 3 10. PROJECTED EXPENDITURES FUND CFDA ITEM/APPROPRIATION F.Y. CHAPTER STATUTE PROJECTED EXPENDITURES 402PT-18 20.600 0521-0890-101 2016 2016 23/16 $32,000.00 164-AL-18 20.608 0521-0890-101 2016 2016 23/16 $90,000.00 402FT-18 20.600 0521-0890-101 2017 2017 14/17 $128000.00 $360,000.00 164-AL-18 20.608 0521-0890-101 2017 2017 14/17 AGREEMENT TOTAL $610,000.00 AMOUNT ENCUMBERED BY THIS DOCUMENT $610,000.00 [ CERTIFY upon my own personal knowledge that the budgeted funds for the current budget year are available for the period and purpose of the expenditure stated above. PRIOR AMOUNT ENCUMBERED FOR THIS AGREEMENT $ 0.00 ACCOUNTING OFFICER'S SIGNATURE ,z• DATE SIGNED TOTAL AMOUNT ENCUMBERED TO DATE $610,000.00 8/10/2017 10:33:21 AM Page 2 of 15 HB -215-Item 9. - 4 State of California — Office of Traffic Safety GRANT NUMBER GRANT AGREEMENT PT18058 Schedule A 1. PROBLEM STATEMENT Huntington Beach is a unique city given its population (residential population in 2014 was 200,809), continued growth, ocean front, large entertainment district, traffic volume, and visitors (estimated 16 million beach visitors annually). We have annual public events which draw tens of thousands of people to a confined area. These include the Huntington Beach Marathon, AVP Volleyball competition, 4 th of July parade and firework show, US Open of Surfing (9 day event), weekly Main Street Fair, two day Ja7z festival, car shows, Breitling Huntington Beach Airshow with an attendance estimated at 550,000 over three days (1' year US Thunderbirds, 2016 United States Navy Blue Angels), and many others. People travel from all over California and the surrounding states to attend these events. A recent study of over 902 DUI arrests from 2016 showed that about 55% of our DUI drivers do not reside in Huntington Beach (5 % would not tell officers where they live). We hypothesize that the number of traffic violators who do not live in Huntington Beach would be a similar number. There is a significant increase in traffic volume on our streets and highways during work hours and seasonal times. This in turn results in congested roadways, minimal parking, and frustrated drivers. Many of these public events serve alcohol or are in close proximity to our downtown or mall entertainment districts where there is a high number of ABC controlled establishments. Historically, we have assumed that many of our DUI drivers came from the downtown entertainment district. However, we found that only about 14% of all DUI drivers arrested in 2016 came from one of the downtown establishments (however, there were quite a few subjects who did not want to say where they were coming from). While that is a significant number for an area less than one half square mile, it leaves almost 30 square miles of roadways and highways available for DUI drivers to travel on. To properly locate and arrest these offenders, we need additional dedicated DUI traffic officers available to patrol this greater area. The Huntington Beach Police Department DUI arrests remained at a high number this past year with 902 DUI arrests. In 2014, the Huntington Beach Police Department had 752 DUI arrests and in 2015, we had 974 DUI arrests. The 2016 DUI arrest number of 902 was a 17% increase from 2014 and a 7% decrease from 2015.1n 2016 we had 15 fatal traffic collisions with a total of 16 victims. The primary collision factor was alcohol involvement in 3 of the fatal collisions. There was alcohol and/or drugs involved in 8 of the 15 fatal collisions. Given these numbers, the victims have been bicyclists, pedestrians, motorcyclists, and automobiles. During our investigations, we found that a significant number of involved parties had some level of alcohol in their systems. Beginning in late 2013, we began analyzing all DUI arrest reports and collecting data from a greater number of categories. This helped us to paint a more realistic, accurate, and timely picture of the gravity of our DUI problem. We were able to better direct grant resources to the modes of transportation commonly involved in injury and fatal collisions. We have made alcohol enforcement a higher priority than years past and embraced the educational component with greater strength. By using social media, we have begun to educate the public, notifying them of rising trends, and creating awareness of the true gravity of our local issues. This has resulted in our HBPD Facebook page being one of the most "Followed" and "Liked" compared to other larger Southern California police agencies. By re- evaluating entertainment permits and business licenses, involving vice and ABC investigations, analyzing citizen complaints, and having a crime analyst mapping problem locations, we have been able to identify trends and are being proactive with problematic businesses. DUI's are always an ongoing challenge, our current issues are addressing the fact we are still ranked #6 out of 57 for alcohol involved collisions (according to the latest OTS rankings from 2014). This was a decline from ranking #1 in 2013 to #6 in 2014. Our bicyclist collision ranking went down to #3 (it was #2). We actually went down in the following categories: composite category to #21 (it was #6), drivers 21-34 who had been drinking to #32 (it was #27), total fatal and injury collisions to #14 (it was #7). We are currently ranked #51 in DUI arrests (it was #43). To us, these are some significant rankings in some key categories and alcohol appears to be the common denominator. The 2014 OTS Rankings indicate a greater problem with motorists, pedestrians, and bicyclists who frequent our roadways. It seems that some DUI drivers acknowledge their violations; they simply rationalized their violations away as being a minor offense. As we further investigate the link with fatal collisions, we saw that drivers didn't think of the "worst case" scenario when their actions resulted in major injuries or a fatality. We are continuing to explore the driver's decision making processes and how they lead to these high collision rates for the listed categories. We have seen success in the form of better coverage, more citizen contacts, more educational events, and significant public relations with the increase of traffic enforcement, distracted driving enforcement, and DUI saturation patrols. We are 8/10/2017 10:33:21 AM Page 3 of 15 HB -216-Item 9. - 5 seeking to increase operations in these categories as well as bicycle and pedestrian enforcement operations and the Know Your Limit campaign to continue to bring awareness to the public. Recent analyses of DUI arrest data showed 40% of our arrestees were from Huntington Beach while the majority, 55%, were not. This is significant in that Huntington Beach is a destination city and draws many non-residents to our city for events, beaches, parks, residences, and entertainment districts. We are looking to educate, deter, and take enforcement action to reduce our traffic problems. Of the arrests, 72% were from Orange County, 13% from LA County, 8% from another California county, and 2% were from out of state. This lets us know we need to work harder with other agencies to combat those drunk drivers who sometimes travel significant distances to get to and from our city. That puts many other pedestrians, bicyclists, and motorists in harm's way and calls for neighboring agencies to take similar action to reach our common goals. Our hypothesis has shifted slightly from what it was last year. We still believe that it is the motorist's impaired ability and a poor understanding of current laws that lead to collisions. Our investigations are showing us that there is a pattern of additional behavior such as distracted driving, safety violations, or some other common PCF violations that also lead to collisions. Simply issuing citations for these violations doesn't address the problem. It may deter that particular driver temporarily but doesn't aid others from doing it. If passing motorists see a person get cited, they will never know what the violation was for and will continue their flawed decision making. These are some of the reasons why we have developed the Know Your Limit and Choose Your Ride campaigns. The Huntington Beach Police Department recognizes that the majority of our DUI's are from non residents so we have been providing Know Your Limit training to other departments who are commonly referred to us by OTS. We are hoping by training other agencies we can work together in decreasing DUI's. By increasing our educational efforts and using electronic sign boards, public service announcements, social media, local publications, and local television, we can increase awareness and let the public know their actions, or failure to act, are much more common than they think. We believe when people join together and share a common philosophy, we will be much more successful in drawing attention to the problems that we have and solicit a safer driver mindset. The impact would be to address the grants goals and objectives and reduce the number of collisions, as well as the number of injuries and fatalities from the collisions. 2. PERFORMANCE MEASURES A. Goals: 1. Reduce the number of persons killed in traffic collisions. 2. Reduce the number of persons injured in traffic collisions. 3. Reduce the number of pedestrians killed in traffic collisions. 4. Reduce the number of pedestrians injured in traffic collisions. 5. Reduce the number of bicyclists killed in traffic collisions. 6. Reduce the number of bicyclists injured in traffic collisions. 7. Reduce the number of persons killed in alcohol-involved collisions. 8. Reduce the number of persons injured in alcohol-involved collisions. 9. Reduce the number of persons killed in drug-involved collisions. 10. Reduce the number of persons injured in drug-involved collisions. 11. Reduce the number of persons killed in alcohol/drug combo-involved collisions. 12. Reduce the number of persons injured in alcohol/drug combo-involved collisions. 13. Reduce the number of motorcyclists killed in traffic collisions. 14. Reduce the number of motorcyclists injured in traffic collisions. 15. Reduce hit & run fatal collisions. 16. Reduce hit 8c run injuiy collisions. 17. Reduce nighttime (2100 - 0259 hours) fatal collisions. 18. Reduce nighttime (2100 - 0259 hours) injury collisions. B. Objectives: 1. Issue a press release announcing the kick-off of the grant by November 15. The kick-off press releases and media advisories, alerts, and materials must be emailed to the OTS Public Information Officer at pio@ots.ca.gov , and copied to your OTS Coordinator, for approval 14 days prior to the issuance date of the release. 2. Participate and report data (as required) in the following campaigns, National Walk to School Day, NHTSA Winter & Summer Mobilization, National Bicycle Safety Month, National Click it or Ticket Mobilization, National Teen Driver Safety Week, National Distracted Driving Awareness Month, National Motorcycle Safety Month, National Child Target Number 1 10 8/10/2017 10:33:21 AM Page 4 of 15 HB -217-Item 9. - 6 Passenger Safety Week, and California's Pedestrian Safety Month. 3. Develop (by December 31) and/or maintain a" HOT Sheet" program to notify patrol and traffic officers to be on the lookout for identified repeat DUI offenders with a suspended or revoked license as a result of DUI convictions. Updated HOT sheets should be distributed to patrol and traffic officers monthly. 12 4. Send law enforcement personnel to the NHTSA Standardized Field Sobriety Testing (SFST) (minimum 16 hours) POST-certified training. 6 5. Send law enforcement personnel to the NI-ITSA Advanced Roadside Impaired Driving Enforcement (ARIDE) 16 hour POST-certified training. 6 6. Send law enforcement personnel to the Drug Recognition Expert (DRE) training. 4 7. Send law enforcement personnel to the DRE Recertification training. 2 8. Send law enforcement personnel to SFST Instructor training. 4 9. Send law enforcement personnel to DRE Instructor training. 2 10. Conduct DUI/DL Checkpoints. A minimum of 1 checkpoint should be conducted during the NHTSA Winter Mobilization and I during the Summer Mobilization. To enhance the overall deterrent effect and promote high visibility, it is recommended the grantee issue an advance press release and conduct social media activity for each checkpoint. For combination DUUDL checkpoints, departments should issue press releases that mention DL's will be checked at the DUI/DL checkpoint. Signs for DUI/DL checkpoints should read "DUI/Driver's License Checkpoint Ahead." OTS does not fund or support independent DL checkpoints. Only on an exception basis and with OTS pre-approval will OTS fund checkpoints that begin prior to 1800 hours. When possible, DUUDL Checkpoint screeners should be DRE- or ARIDE-trained. 6 11. Conduct DUI Saturation Patrol operation(s). 55 12. Conduct Warrant Service operation(s) targeting multiple DUI offenders who fail to appear in court. 4 13. Conduct Stakeout operation(s) that employ police officers to observe the "worst of the worst" repeat DU I offender probationers with suspended or revoked driver licenses. 4 14. Conduct Traffic Enforcement operation(s), including but not limited to, primary collision factor violations. 70 15. Conduct highly publicized Distracted Driving enforcement operation(s) targeting drivers using hand held cell phones and texting. 40 16. Conduct highly publicized Motorcycle Safety enforcement operation(s) in areas or during events with a high number of motorcycle incidents or collisions resulting from unsafe speed, DUI, following too closely, unsafe lane changes, improper turning, and other primary collision factor violations by motorcyclists and other drivers. 10 17. Conduct Nighttime (1800-0559) Click It or Ticket enforcement operations. 15 18. Conduct highly publicized pedestrian and/or bicycle enforcement operation(s) in areas or during events with a high number of pedestrian and/or bicycle collisions resulting from violations made by pedestrians, bicyclists, and drivers. 18 19. Conduct Traffic Safety educational presentations with an effort to reach community members. Note: Presentations may include topics such as distracted driving, DUI, speed, bicycle and pedestrian safety, seat belts and child passenger safety. 12 20. Conduct Know Your Limit campaigns with an effort to reach members of the community. 12 21. Deploy one full time, dedicated DUI enforcement officer working the days of the week and shifts with the highest rate of DUI collisions, and report on their enforcement, training, and outreach activities. 1 3. METHOD OF PROCEDURE A. Phase 1 — Program Preparation (1 st Quarter of Grant Year) outlined "worst of the The Hot status, and the to traffic and • The police department will develop operational plans to implement the "best practice" strateg i e s in the objectives section. • All training needed to implement the program should be conducted this quarter. • All grant related purchases needed to implement the program should be made this quarter. • In order to develop/maintain the "Hot Sheets," research will be conducted to identify the worst" repeat DUI offenders with a suspended or revoked license as a result of DUI conviction s . Sheets may include the driver's name, last known address, DOB, description, current license number of times suspended or revoked for DUI. Hot Sheets should be updated and distribut e d 8/10/2017 10:33:21 AM Page 5 of 15 HB -218-Item 9. - 7 patrol officers at least monthly. • Implementation of the STEP grant activities will be accomplished by deploying personnel at high collision locations. • Media Requirements • Issue a press release announcing the kick-off of the grant by November 15. The kick-off press releases and media advisories, alerts, and materials must be emailed to the OTS Public Information Officer at pio@ots.ca.gov , and copied to your OTS Coordinator, for approval 14 days prior to the issuance date of the release. B. Phase 2 — Program Operations (Throughout Grant Year) • The police department will work to create media opportunities throughout the grant period to call attention to the innovative program strategies and outcomes. • Media Requirements • Send all grant-related activity press releases, media advisories, alerts and general public materials to the OTS Public Information Officer (PIO) at pio@ots.ca.gov , with a copy to your OTS Coordinator. • If an OTS template-based press release is used, the OTS PIO and Coordinator should be copied when the release is distributed to the press. If an OTS template is not used, or is substantially changed, a draft press release shall be sent to the OTS PIO for approval. Optimum lead time would be 10-20 days prior to the release date to ensure adequate turn-around time. • Press releases reporting the results of grant activities such as enforcement operations are exempt from the recommended advance approval process, but still should be copied to the OTS PIO and Coordinator when the release is distributed to the press. • Activities such as warrant or probation sweeps and court stings that could be compromised by advanced publicity are exempt from pre-publicity, but are encouraged to offer embargoed media coverage and to report the results. • Use the following standard language in all press, media, and printed materials: Funding for this program was provided by a grant from the California Office of Traffic Safety, through the National Highway Traffic Safety Administration. • Email the OTS PIO at pio@ots.ca.gov and copy your OTS Coordinator at least 30 days in advance, a short description of any significant grant-related traffic safety event or program so OTS has sufficient notice to arrange for attendance and/or participation in the event. • Submit a draft or rough-cut of all printed or recorded material (brochures, posters, scripts, artwork, trailer graphics, etc.) to the OTS PIO at pio@ots.ca.gov and copy your OTS Coordinator for approval 14 days prior to the production or duplication. • Include the OTS logo, space permitting, on grant-funded print materials; consult your OTS Coordinator for specifics. C. Phase 3 —Data Collection & Reportina (Throughout Grant Year) • nvoice Claims (due January 30, April 30, July 30, and October 30) • Quarterly Performance Reports (due January 30, April 30, July 30, and October 30) • Collect and report quarterly, appropriate data that supports the progress of goals and objectives. • Provide a brief list of activity conducted, procurement of grant-funded items, and significant media activities. Include status of grant-funded personnel, status of contracts, challenges, or special accomplishments. • Provide a brief summary of quarterly accomplishments and explanations for objectives not completed or plans for upcoming activities. • Collect, analyze and report statistical data relating to the grant goals and objectives. 4. METHOD OF EVALUATION Using the data compiled during the grant, the Grant Director will complete the "Final Evaluation" section in the fourth/final Quarterly Performance Report (QPR). The Final Evaluation should provide a brief summary of the grant's accomplishments, challenges and significant activities. This narrative should also include whether goals and objectives were met, exceeded, or an explanation of why objectives were not completed. 5. ADMINISTRATIVE SUPPORT This program has full administrative support, and every effort will be made to continue the grant activities after grant conclusion. 8/10/2017 10:33:21 AM Page 6 of 15 HB -219-Item 9. - 8 State of California — Office of Traffic Safety GRANT AGREEMENT Schedule B GRANT NUMBER PT18058 FUND NUMBER CATALOG NUMBER (CFDA) FUND DESCRIPTION TOTAL AMOUNT 402PT 20.600 State and Community Highway Safety $160,000.00 164AL 20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $450,000.00 COST CATEGORY CFDA TOTAL COST TO GRANT A. PERSONNEL COSTS Positions and Salaries Full-Time 20.608 $121,816.00 One Full Time DUI Enforcement Officer Benefits-DUI Enforcement Officer 20.608 $93,920.00 Overtime 20.608 $64,063.00 DUI/DL Checkpoints DUI Saturation Patrols 20.608 $117,923.00 Warrant Service Operations 20.608 $17,153.00 Stakeouts 20.608 $5,718.00 Know Your Limit 20.608 $25,730.00 Traffic Enforcement 20.600 $75,046.00 Distracted Driving 20.600 $42,883.00 Motorcycle Safety 20.600 $8,934.00 Night-time Click It Or Ticket 20.600 $8,041.00 Pedestrian and Bicycle Enforcement 20.600 $16,081.00 Part-Time $0.00 Category Sub-Total $597,308.00 _ B. TRAVEL EXPENSES In State Travel 20.600 $4,715.00 $0.00 Category Sub-Total $4,715.00 C. CONTRACTUAL SERVICES $0.00 Category Sub-Total $0.00 D. EQUIPMENT $0.00 Category Sub-Total $0.00 E. OTHER DIRECT COSTS Educational Materials 20.600 $4,300.00 DUI Checkpoint Supplies 20.608 $3,677.00 Category Sub-Total $7,977.00 F. INDIRECT COSTS $0.00 Category Sub-Total $0.00 8/10/2017 10:33:21 AM Page 7 of 15 HB -220-Item 9. - 9 GRANT TOTAL $610,000.00 8/10/2017 10:33:21 AM Page 8 of 15 HB -221-Item 9. - 10 State of California — Office of Traffic Safety GRANT NUMBER GRANT AGREEMENT PT18058 Schedule 13-1 BUDGET NARRATIVE PERSONNEL COSTS One Full Time DUI Enforcement Officer - The DUI officer will work 100% of time on DUI enforcement and prevention. The DUI officer will identi -fy areas within the City of Huntington Beach where DUI incidents are prevalent and perform enforcement activities in these areas for the specific purpose of reducing DUI related collisions. The DUI officer will work the shifts (days of the week and times of day) when driving under the influence is most prevalent. The officer will work with Patrol by aiding other officers as needed, but will not "take over" another officer's DUI stop. Other Traffic officers will still be expected to continue their own DUI enforcement as part of their regular patrol function while allowing additional, specific DUI enforcement to occur by the DUI officer. The officer assigned to this position should, at minimum, be trained in standardized field sobriety testing (SFST) and Advanced Roadside Impaired Driving Enforcement (ARIDE), and optimally would be a certified Drug Recognition Expert (DRE). The results of the DUI officer's enforcement, training, and outreach activities are to be documented in the Quarterly Performance Report (QPR) including the number of vehicle stops, SFSTs conducted, DUI arrests, other arrests and citations, DUI trainings/briefings provided and number of officers impacted, public DUI prevention outreach presentations conducted, and estimated number of citizens impacted. The DUI officer's duties include, but are not limited to: Enforcement of DUI related laws Provide DUI related trainings at briefings Provide support to Patrol in specific DUI related cases Participate in community outreach activities which could include public speaking as to the dangers of driving while under the influence Any hours worked by the DUI officer that are not related to DUI enforcement or DUI prevention cannot be charged to the grant. Personnel working 100% of regular time on grant funded activities are required to complete a semiannual Employee Time Certification Form (OTS-26). If the DUI officers work any non-DUI activities, they will instead need to complete a Personnel Activity Report (PAR) for each pay period which accounts for all hours worked and distinguishes the DUI-hours from the non- DUI-hours. Both the OTS-26 and the PAR forms are to be signed by the employee and a supervisor with first-hand knowledge of the employee's activities. QUANTITY 12 Benefits-DUI Enforcement Officer - Full Time Benefits Dental Insurance 1.92% Health Insurance 17.49% Life Insurance 0.15% Long Term Disability 1.00% . Retirement 34.84% Social Security/FICA/OASDI 1.45% Vision Insurance 0.34% Workers Compensation 9.84% Holiday 3.85% Retiree Medical 1.42% Supplemental Retirement 4.80% 1 DUI/DL Checkpoints - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 6 DUI Saturation Patrols - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 55 8/10/2017 10:33:21 AM Paue 9 of 15 HB -222-Item 9. - 11 Warrant Service Operations - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 4 Stakeouts - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 4 Know Your Limit - Overtime for grant funded traffic safety presentations or campaigns conducted by appropriate department personnel. 12 Traffic Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 70 Distracted Driving - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 40 Motorcycle Safety - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 10 Night-time Click It Or Ticket - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 15 , Pedestrian and Bicycle Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate department personnel. 18 TRAVEL EXPENSES In State Travel - Costs are included for appropriate staff to attend conferences and training events supporting the grant goals and objectives and/or traffic safety. Local mileage for grant activities and meetings is included. All conferences, seminars or training not specifically identified in the Budget Narrative must be approved by OTS. All travel claimed must be at the agency approved rate. Per Diem may not be claimed for meals provided at conferences when registration fees are paid with OTS grant funds. 1 , CONTRACTUAL SERVICES _ EQUIPMENT - OTHER DIRECT COSTS Educational Materials - Costs of purchasing, developing or printing brochures, pamphlets, fliers, coloring books, posters, signs, and banners associated with grant activities, and traffic safety conference and training materials. Items shall include a traffic safety message and if space is available the OTS logo. Additional items may be purchased if approved by OTS. 1 DUI Checkpoint Supplies - On-scene supplies needed to conduct sobriety checkpoints. Costs may include 28" traffic cones, MTJTCD compliant traffic signs, MUTCD compliant high visibility vests (maximum of 10), traffic counters (maximum of 2), generator, gas for generators, lighting, reflective banners, electronic flares, PAS device supplies, heater, propane for heaters, fan, anti-fatigue mats, and canopies. Additional items may be purchased if approved by OTS. The cost of food and beverages will not be reimbursed. 1 INDIRECT COSTS STATEMENTS/DISCLAIMERS There will be no program income generated from this grant. Salaries may include wages, salaries, special compensations, or authorized absences such as annual leave and sick leave provided the cost for the individual employee is (a) reasonable for the services rendered, and (b) follows an appointment made in accordance with state or local laws and rules and meets federal requirements. Any non-grant funded vacancies created by reassignment to a grant-funded position must be filled at the expense o f , the grantee agency. R/1nhn17 1(1-11.1 AM Page 10 of 15 HB -223-Item 9. - 12 Nothing in this 'agreement' shall be interpreted as a requirement, formal or informal, that a particular law enforcement officer issue a specified or predetermined number of citations in pursuance of the goals and objectives hereunder. R/111/91117 1f)1.1 AM Parra 11 rvf 14 HB -224-Item 9. - 13 State of California — Office of Traffic Safety GRANT NUMBER GRANT AGREEMENT PT 18058 Exhibit A CERTIFICATIONS AND ASSURANCES Failure to comply with applicable Federal statutes, regulations, and directives may subject Grantee Agency officials to civil or criminal penalties and/or place the State in a high risk grantee status in accordance with 49 CFR §18.12. The officials named on the grant agreement, certify by way of signature on the grant agreement signature page, that the Grantee Agency complies with all applicable Federal statutes, regulations, and directives and State rules, guidelines, policies and laws in effect with respect to the periods for which it receives grant funding. Applicable provisions include, but are not limited to, the following: • 23 U.S.C. Chapter 4—Highway Safety Act of 1966, as amended • 49 CFR Part 18—Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments • 23 CFR Part 1200—Uniform Procedures for State Highway Safety Grant Programs NONDISCRIMINATION The Grantee Agency will comply with all Federal statutes and implementing regulations relating to nondiscrimination. These include but are not limited to: (a) Title VI of the Civil Rights Act of 1964 (Pub. L. 88- 352), which prohibits discrimination on the basis of race, color or national origin (and 49 CFR Part 21); (b) Title DC of the Education Amendments of 1972, as amended (20 U.S.C. 1681-1683 and 1685-1686), which prohibits discrimination on the basis of sex; (c) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794), and the Americans with Disabilities Act of 1990 (Pub. L. 101-336), as amended (42 U.S.C. 12101, et seq.), which prohibits discrimination on the basis of disabilities (and 49 CFR Part 27); (d) the Age Discrimination Act of 1975, as amended (42 U.S.C. 6101-6107), which prohibits discrimination on the basis of age; (e) the Civil Rights Restoration Act of 1987 (Pub. L. 100-259), which requires Federal-aid recipients and all sub-recipients to prevent discrimination and ensure nondiscrimination in all of their programs and activities; (f) the Drug Abuse Office and Treatment Act of 1972 (Pub. L. 92-255), as amended, relating to nondiscrimination on the basis of drug abuse; (g) the comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (Pub. L. 91-616), as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; (h) Sections 523 and 527 of the Public Health Service Act of 1912, as amended (42 U.S.C. 290dd-3 and 290ee-3), relating to confidentiality of alcohol and drug abuse patient records; (i) Title VIII of the Civil Rights Act of 1968, as amended (42 U.S.C. 3601, et seq.), relating to nondiscrimination in the sale, rental or financing of housing; (j) any other nondiscrimination provisions in the specific statute(s) under which application for Federal assistance is being made; and (k) the requirements of any other nondiscrimination statute(s) which may apply to the application. BUY AMERICA ACT The Grantee Agency will comply with the provisions of the Buy America Act (49 U.S.C. 5323(j)), which contains the following requirements: Only steel, iron and manufactured products produced in the United States may be purchased with Federal funds unless the Secretary of Transportation determines that such domestic purchases would be inconsistent with the public interest, that such materials are not reasonably available and of a satisfactory quality, or that inclusion of domestic materials will increase the cost of the overall project contract by more than 25 percent. Clear justification for the purchase of non- domestic items must be in the form of a waiver request submitted to and approved by the Secretary of Transportation. POLITICAL ACTIVITY (HATCHACT) The Grantee Agency will comply with provisions of the Hatch Act (5 U.S.C. 1501-1508) which limits the political activities of employees whose principal employment activities are funded in whole or in part with Federal funds. R/1(1/1(117 111.11.71 AAA V") rvf 1C HB -225-Item 9. - 14 CERTIFICATION REGARDING FEDERAL LOBBYING Certification for Contracts, Grants, Loans, and Cooperative Agreements The undersigned certifies, to the best of his or her knowledge and belief, that: 1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. 2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form- LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. 3. The undersigned shall require that the language of this certification be included in the award documents for all sub- award at all tiers (including subcontracts, sub-grants, and contracts under grant, loans, and cooperative agreements) and that all sub-recipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. RESTRICTION ON STATE LOBBYING None of the funds under this program will be used for any activity specifically designed to urge or influence a State or local legislator to favor or oppose the adoption of any specific legislative proposal pending before any State or local legislative body. Such activities include both direct and indirect (e.g., "grassroots") lobbying activities, with one exception. This does not preclude a State official whose salary is supported with NHTSA funds from engaging in direct communications with State or local legislative officials, in accordance with customary State practice, even if such communications urge legislative officials to favor or oppose the adoption of a specific pending legislative proposal. CERTIFICATION REGARDINGDEBARMENT AND SUSPENSION Instructions for Primary Certification 1. By signing and submitting this grant agreement, the Grantee Agency Official is providing the certification set out below. 2. The inability of a person to provide the certification required below will not necessarily result in denial of participation in this covered transaction. The prospective participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency's determination whether to enter into this transaction. However, failure of the Grantee Agency Official to furnish a certification or an explanation shall disqualify such person from participation in this transaction. 3. The certification in this clause is a material representation of fact upon which reliance was placed when the department or agency determined to enter into this transaction. If it is later determined that the Grantee Agency Official knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default. 4. The Grant Agency Official shall provide immediate written notice to the department or agency to which this grant agreement is submitted if at any time the Grantee Agency Official learns its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 5. The terms covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, grant agreement, and voluntarily excluded, as used in this clause, have the meaning set out in the Definitions and coverage sections of 49 CFR Part 29. You may contact the department or agency to which this grant agreement is being submitted for assistance in obtaining a copy of those regulations. 6. The Grantee Agency Official agrees by submitting this grant agreement that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who Q/1(1/1(117 1/1•12.11 AM Paae 13 of 15 HB -226-Item 9. - 15 is proposed for debarment under 48 CFR Part 9, subpart 9,4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction. 7. The Grantee Agency Official further agrees by submitting this grant agreement that it will inelude the clause titled -Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction," provided by the department or agency entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. 8. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR Part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the list of Parties Excluded from Federal Procurement and Non- procurement Programs. 9. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 10. Except for transactions authorized under paragraph 6 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR Part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default. Certification Regarding Debarment, Suspension, and Other Responsibility Matters -Primary Covered Transactions 1. The Grantee Agency Official certifies to the best of its knowledge and belief, that its principals: a. Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any Federal department or agency; b. Have not within a three-year period preceding this grant agreement been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of record, making false statements, or receiving stolen property; c. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or Local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and d. Have not within a three-year period preceding this application/grant agreement had one or more public transactions (Federal, State, or local) terminated for cause or default, 2. Where the Grantee Agency Official is unable to certify to any of the Statements in this certification, such prospective participant shall attach an explanation to this grant agreement. Instructions for Lower Tier Certification 1. By signing and submitting this grant agreement, the prospective lower tier participant is providing the certification set out below. 2. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. 3. The prospective lower tier participant shall provide immediate written notice to the person to which this grant agreement is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 4. The terms covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, grant agreement, and voluntarily excluded, as used in this clause, have the meanings set out in the Definition and Coverage sections of 49 CFR Part 29. You may contact the person to whom this grant agreement is submitted for assistance in obtaining a copy of those regulations. 5. The prospective lower tier participant agrees by submitting this grant agreement that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR Part 9, subpart 9.4, debarred, suspended, declared ineligible, or 8/10/2017 10:33:21 AM PP af. 14 nc ic HB -227-Item 9. - 16 voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated. 6. The prospective lower tier participant further agrees by submitting this grant agreement that it will include the clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion— Lower Tier Covered Transaction," without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. (See below) 7. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR Part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the List of Parties Excluded from Federal Procurement and Non procurement Programs. 8. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 9. Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR Part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Covered Transactions: 1. The prospective lower tier participant certifies, by submission of this grant agreement, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. 2. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this grant agreement. CHAEL E. GAil CITY ATTORNEY OF HUNTINGTON BEACH 8/10/2017 10:33:21 AM Pane 15 of 15 HB -228-Item 9. - 17 Dept. ID CD 17-008 Page 1 of 3 Meeting Date: 8/21/2017 Statement of Issue: Transmitted for your consideration is Zoning Text Amendment (ZTA) No. 17-001, a City-initiated request to amend Chapter 204 Use Classifications of the Huntington Beach Zoning and Subdivision Ordinance to amend Section 204.18 Prohibited Uses; add Section 204.20 Prohibited Uses- Commercial Non-Medical Marijuana Businesses and Deliveries; and add Section 204.22 Non- Medical Marijuana Cultivation. The Planning Commission and Staff recommend approval of ZTA No. 17-001. Financial Impact: Not applicable. Planning Commission and Staff Recommended Action: A) Find the proposed project exempt from the California Environmental Quality Act (CEQA) pursuant to City Council Resolution No. 4501, Class 20, which supplements the California Environmental Quality Act; and, B) Approve Zoning Text Amendment No. 17-001 with findings for approval (Attachment No. 1) and approve for introduction Ordinance No. 4137 "An Ordinance of the City of Huntington Beach Amending Title 20 of the Zoning and Subdivision Ordinance by Amending Section 204.18 and Adding Section 204.20 and Section 204.22 to the Huntington Beach Zoning and Subdivision Ordinance to Prohibit Commercial/Recreational Sales and Deliveries of Non-Medical Marijuana as well as Adopt Regulations Regarding Non-Medical Marijuana Cultivation.” CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 8/21/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Scott Hess, AICP, Director of Community Development Robert Handy, Police Chief SUBJECT: Approve for introduction Ordinance No. 4137 approving Zoning Text Amendment (ZTA) No. 17-001 amending Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) to amend Section 204.18 Prohibited Uses, add Section 204.20 Prohibited Uses--Commercial Non-Medical Marijuana Businesses and Deliveries, and add Section 204.22 Non-Medical Marijuana Cultivation Approved for introduction 7-0 HB -229-Item 10. - 1 Dept. ID CD 17-008 Page 2 of 3 Meeting Date: 8/21/2017 Alternative Action(s): The City Council may make the following alternative motion(s): 1. Deny Zoning Text Amendment No. 17-001 with findings for denial. 2. Continue Zoning Text Amendment No. 17-001 and direct staff accordingly. Analysis: A. PROJECT PROPOSAL: Applicant: City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648 Location: Citywide Zoning Text Amendment No. 17-001 represents a request to amend Chapter 204 Use Classifications of the Huntington Beach Zoning and Subdivision Ordinance for the following sections: 1. Amend Section 204.18 Prohibited Uses 2. Add Section 204.20 Prohibited Uses—Commercial Non-Medical Marijuana Businesses and Deliveries to expressly prohibit any sale or distribution and deliveries of non-medical marijuana. 3. Add Section 204.22 Cultivation of Non-Medical Marijuana to regulate the cultivation of non- medical marijuana. B. BACKGROUND: In November 2016, Proposition 64 was passed by California voters and the Adult Use of Marijuana Act was adopted. Proposition 64 legalized certain non-medical use of marijuana for individuals 21 years of age and older. The Act allows 1) adults 21 years and older to use, possess, purchase, and grow non-medical (recreational) marijuana; 2) local governments to ban non-medical marijuana businesses; and 3) local governments to regulate the cultivation of non-medical marijuana for personal use by adults 21 years and older, and to ban outdoor cultivation as set forth in the Act. C. PLANNING COMMISSION MEETING: The Planning Commission held a public hearing on Zoning Text Amendment No. 17-001 on July 25, 2017. During the public hearing, staff gave an overview of the proposed amendment. There were three speakers during the public hearing with one speaker in opposition and two speakers in support of the Zoning Text Amendment. The Planning Commission voted to recommend that the City Council approve Zoning Text Amendment No. 17-001 based on the findings provided in Attachment No. 1. Planning Commission Action dated July 25, 2017 A MOTION WAS MADE BY SCANDURA, SECONDED BY GRANT TO APPROVE ZONING TEXT AMENDMENT NO. 17-001 AND FORWARD TO CITY COUNCIL BY THE FOLLOWING VOTE: AYES: CROWE, GARCIA, GRANT, MANDIC, RAY, SCANDURA NOES: KALMICK ABSTAIN: NONE ABSENT: NONE MOTION PASSED HB -230-Item 10. - 2 Dept. ID CD 17-008 Page 3 of 3 Meeting Date: 8/21/2017 D. STAFF ANALYSIS AND RECOMMENDATION: The proposed Zoning Text Amendment was initiated to amend the HBZSO to expressly articulate the prohibition of any sale, distribution, and deliveries of non-medical marijuana in the City and to regulate the cultivation of non-medical marijuana. The draft ordinance (Attachment No. 2) and legislative draft (Attachment No. 3) provides the new language to be added to the HBZSO. The proposed Zoning Text Amendment prohibits outdoor cultivation of non-medical marijuana and imposes reasonable regulations on indoor cultivation of non-medical marijuana when cultivation is authorized by California law. The Adult Use of Marijuana Act allows adults 21 years and older to cultivate up to six marijuana plants for non-medical use. Pursuant to the proposed Section 204.22 Non-Medical Marijuana Cultivation, the indoor cultivation of non-medical marijuana is permitted at residential properties and shall comply with the following criteria: - within a fully enclosed or secure structure or within a residential structure - not visible to the general public - provide for the health, safety, and welfare of the public - prevent odor created by non-medical marijuana plants from impacting adjacent properties According to input provided by the Police Department, allowing non-medical marijuana businesses to operate in Huntington Beach would negatively impact the quality of life for the City’s residents, visitors, and businesses. The City has expended significant resources to enforce the prohibition of medical marijuana businesses. Staff time has been spent on tracking down property owners and business owners whom provide false information on business license and rental documents. Staff found significant modifications to building structures without proper permits or safety inspections. The modifications violated building and fire codes, creating an unsafe environment for employees, customers, and surrounding businesses. There have been incidents of crime, ranging from arson fire to armed robbery. Allowing non-medical marijuana businesses would further exacerbate the issues currently encountered from the operation of illegal dispensaries and collectives. Adopting the proposed zoning text amendment would support the City’s position of prohibiting all sale, distribution, deliveries, and outdoor cultivation of non-medical marijuana within the City. The Planning Commission and staff recommend approval of Zoning Text Amendment No. 17-001. Environmental Status: The proposed project is categorically exempt pursuant to City Council Resolution No. 4501, Class 20, which supplements the California Environmental Quality Act. Strategic Plan Goal: Improve quality of life Attachment(s): 1. Suggested Findings – ZTA No. 17-001 2. Ordinance No.4137, “An Ordinance of the City of Huntington Beach Amending Title 20 of the Zoning and Subdivision Ordinance by Amending Section 204.18 and Adding Section 204.20 and Section 204.22 to the Huntington Beach Zoning and Subdivision Ordinance to Prohibit Commercial/Recreational Sales and Deliveries on Non-Medical Marijuana as well as Adopt Regulations Regarding Non-Medical Marijuana Cultivation.” 3. Legislative Draft of Chapter 204 Use Classifications 4. Planning Commission Staff Report dated July 25, 2017 5. PowerPoint Presentation HB -231-Item 10. - 3 SUGGESTED FINDINGS FOR APPROVAL ZONING TEXT AMENDMENT NO. 17-001 SUGGESTED FINDINGS FOR APPROVAL - ZONING TEXT AMENDMENT NO. 17-001: 1. Zoning Text Amendment No. 17-001 amends Chapter 204 Use Classifications of the Huntington Beach Zoning and Subdivision Ordinance to amend the Prohibited Uses section, add a Prohibited Uses— Commercial Non-Medical Marijuana Businesses and Deliveries section, and add a Non-Medical Marijuana Cultivation section. ZTA No. 17-001 is consistent with the goals, policies and objectives specified in the General Plan by expressly prohibiting commercial non-medical marijuana businesses and deliveries of non-medical marijuana and regulating the cultivation of non-medical marijuana while continuing to allow permitted uses. 2. In the case of the general land use provisions, the amendments proposed are compatible with the uses authorized in, and the standards prescribed for the Zoning districts for which they are proposed. The changes do not affect zoning of any property or the development standards thereof. 3. A community need is demonstrated for the proposed amendment to ensure that the HBZSO expressly prohibits any sale or distribution of non-medical marijuana in the City, prohibits the deliveries of non- medical marijuana, and regulates the cultivation of non-medical marijuana as allowed by state law. 4. Its adoption will be in conformity with public convenience, general welfare and good zoning practice. Approval of Zoning Text Amendment No. 17-001 will ensure that commercial non-medical marijuana businesses and deliveries of non-medical marijuana are not allowed in the City and the cultivation of non-medical marijuana follows State regulations. HB -232-Item 10. - 4 ORDINANCE NO. 4137 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING TITLE 20 OF THE ZONING AND SUBDIVISION ORDINANCE BY AMENDING SECTION 204.18 AND ADDING SECTION 204.20 AND SECTION 204.22 TO THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE TO PROHIBIT COMMERCIAL/RECREATIONAL SALES AND DELIVERIES OF NON-MEDICAL MARIJUANA AS WELL AS ADOPT REGULATIONS REGARDING NON-MEDICAL MARIJUANA CULTIVATION WHEREAS, Proposition 64 authorizes cities to prohibit distribution/sale of non- medical/recreational marijuana and cultivation of 6 or more marijuana plants as well enacting reasonable regulations for the cultivation of six or fewer non-medical marijuana plants that occurs inside a residence or accessory structure, including the complete prohibition of outdoor cultivation of non-medical marijuana until such time as the California Attorney General determines that the non-medical/recreational use of marijuana is lawful in California under federal law; and Proposition 64 authorizes the personal cultivation of up to six non-medical marijuana plants in a private residence for non-medical purposes; and The cultivation, distribution/sale of non-medical/recreational marijuana in other cities has resulted in calls for service to the police department, including calls for robberies and thefts, and is reasonable to assume that commercial/recreational non-medical marijuana cultivation, distribution/sale will have similar impacts; and The City Council desires to prohibit the commercial sale or distribution of non- medical/recreational marijuana anywhere in the City as well as adopt regulations regarding the indoor cultivation of six or fewer non-medical marijuana plants in private residences and to prohibit all other forms of non-medical marijuana cultivation; and NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. Recitals Made Findings The above recitals are hereby declared to be true and correct and findings of the City Council of the City of Huntington Beach. SECTION 2. Amendment to Zoning and Subdivision Ordinance Section 204.18 of the Huntington Beach Zoning and Subdivision Ordinance Prohibit Uses is hereby modified to Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance to read as follows: 17-5917/161951/7/14/Inv HB -233-Item 10. - 5 ORDINANCE NO. 4137 204.18 Prohibited Uses—Medical Marijuana Businesses D. Public Nuisance. Any use or condition caused or permitted to exist in violation of any of the provisions of this article is hereby declared a public nuisance and may be abated by the City. E. Enforcement. 1. Violation of this Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance is a public nuisance and may be enforced pursuant to the provisions of the Municipal Code including the Zoning and Subdivision Ordinance. 2. Nothing in this article in any way limits any other remedies that may be available to the City, or any penalty that may be imposed by the City, for violations of this article. Such additional remedies include, but are not limited to, injunctive relief or administrative citations. Section 204.20 of the Huntington Beach Zoning and Subdivision Ordinance Prohibited Uses—Commercial Non-Medical Marijuana Businesses is hereby added to Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance to read as follows: 204.20 Prohibited Uses—Commercial Non-Medical Marijuana Businesses and Deliveries A. Purpose. In order to expressly inform the public that any sale or distribution of non-medical marijuana by Commercial Non-Medical Marijuana Businesses, Collectives, Cooperatives or Dispensaries, etc., however named is prohibited in the City of Huntington Beach, the City is adding this express prohibition to the Zoning and Subdivision Ordinance. B. Definitions. Unless otherwise specifically defined herein, the definitions contained within Adult Use of Marijuana Act shall apply to this Ordinance. 1. Commercial Non-Medical Marijuana Business, Collective, Cooperative or Dispensary means any location, structure, facility, vehicle, business, store, co- op, residence, or similar facility used, in full or in part, as a place at or in which marijuana (including marijuana for recreational use) is sold, traded, exchanged, bartered for in any way, made available, located, stored, displayed, placed or cultivated, including any of the foregoing if used in connection with the sale or distribution of non-medical marijuana. 2. Non-medical marijuana delivery means the commercial transfer of non- medical marijuana or non-medical marijuana products to a person, including any technology that enables persons to arrange for or facilitate the commercial transfer of non-medical marijuana or non-medical marijuana products. 3. Non-medical marijuana products means non-medical marijuana that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible 17-5917/161951/7/14/my 2 HB -234-Item 10. - 6 ORDINANCE NO. 4137 or topical product containing marijuana or concentrated cannabis and other ingredients. C. Commercial Non-Medical Marijuana Businesses, Collectives, Cooperatives or Dispensaries. A Commercial Non-Medical Marijuana Business, Collective, Cooperative or Dispensary or any other such business, no matter how so named, is not a permitted use in any zoning district or specific plan in the City. It shall be unlawful for any person or entity to own, manage, establish, conduct or operate a Commercial Non-Medical Marijuana Business, Collective, Cooperative or Dispensary. Also, it shall be unlawful for any person to permit to be established, conducted, operated, owned or managed as a landlord, owner, employee, contractor, agent or volunteer, or in any other manner or capacity, any Commercial Non-Medical Marijuana Business, Collective, Cooperative or Dispensary in the City. D. Non-Medical Marijuana Deliveries, Delivery of non-medical marijuana is not a permitted use in any zoning district or specific plan in the City. No permit or any other applicable license or entitlement for use, nor any business license, shall be approved or issued for the establishment, maintenance or operation of non-medical marijuana deliveries. E. Public Nuisance. Any use or condition caused or permitted to exist in violation of any of the provisions of this article is hereby declared a public nuisance and may be abated by the City. F. Enforcement. 1. Violation of this Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance is a public nuisance and may be enforced pursuant to the provisions of the Municipal Code including the Zoning and Subdivision Ordinance. 2. Nothing in this article in any way limits any other remedies that may be available to the City, or any penalty that may be imposed by the City, for violations of this article. Such additional remedies include, but are not limited to, injunctive relief or administrative citations. Section 204.22 of the Huntington Beach Zoning and Subdivision Ordinance Non-Medical Marijuana Cultivation is hereby added to Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance to read as follows: 204.22 Non-Medical Marijuana Cultivation A. Purpose. The purpose and intent of this article is to regulate the cultivation of non- medical marijuana in a manner that protects the health, safety and welfare of the community. Health and Safety Code section 11362.2 authorizes the City to adopt reasonable regulations regarding the cultivation of non-medical marijuana inside a private residence or accessory structure to a private residence. That section also 17-5917/161951/7/14/mv 3 HB -235-Item 10. - 7 ORDINANCE NO. 4137 authorizes the City to completely prohibit the cultivation of non-medical marijuana outside, as long as the California Attorney General has not made a determination that the non-medical use of marijuana is lawful in California under federal law. The Attorney General has not made such a determination. This article is not intended to interfere with the right of an individual 21 years of age or older to possess or cultivate non-medical marijuana, as provided for by Proposition 64. This article is not intended to give any person independent legal authority to grow non-medical marijuana; it is intended simply to impose reasonable regulations on the cultivation of non-medical marijuana when cultivation is authorized by California law. Furthermore, it is the purpose and intent of this amendment to require that non- medical marijuana allowed to be cultivated pursuant to Proposition 64 only be done so in appropriately secured, enclosed, and ventilated structures, so as not to be visible to the general public; to provide for the health, safety and welfare of the public; to prevent odor created by non-medical marijuana plants from impacting adjacent properties; and to ensure that marijuana grown in the City remains secured. B. Definitions. For the purposes of this article, the following definitions shall apply unless the context clearly indicates otherwise. If a word is not defined in this article, and not otherwise defined in state law, the common and ordinary meaning of the word shall apply. 1. Cultivation means the planting, growing, harvesting, drying or processing of marijuana plants or any part thereof 2. Fully enclosed and secure structure means a space within a building that complies with the applicable Building Code and Zoning and Subdivision Ordinance, and has a complete roof enclosure supported by connecting walls extending from the ground to the roof, a foundation slab or equivalent base to which the floor is secured by bolts or similar attachments, is secure against unauthorized entry, and is accessible only through one or more lockable doors. Walls and roof must be constructed of solid materials that cannot be easily broken through, and must be constructed with non-transparent material. 3. Indoors means inside a fully enclosed and secure structure or within a residential structure. 4. Non-medical marijuana means marijuana that is intended to be used for non- medical purposes pursuant to Health and Safety Code section 111362.1 et seq. 5. Non-medical marijuana cultivation means the planting, growing, harvesting, drying or processing of non-medical marijuana plants or any part thereof pursuant to Health and Safety Code section 11362.1 et seq., as those sections may be amended from time to time. 6. Outdoors means any location within the City that is not within a fully enclosed and secure structure. 7. Person means any individual, partnership, co-partnership, firm, association, joint stock company, corporation, limited liability corporation, collective, cooperative, or combination thereof in whatever form or character. 8. Private residence means a house, an apartment unit, a mobile home or other similar dwelling. 17-5917/161951/7/14/my 4 HB -236-Item 10. - 8 ORDINANCE NO. 4137 C. Cultivation of non-medical marijuana. The following regulations shall apply to the cultivation of non-medical marijuana within the City: 1. Cultivation not in compliance with this article. It is declared to be unlawful and a public nuisance for any person owning, leasing, occupying or having charge or possession of any parcel or premises within any zoning district or specific plan in the City to cultivate non-medical marijuana except as provided for in this Code. No person other than an individual 21 years of age or older may engage in the cultivation of non-medical marijuana. 2. Outdoor cultivation. It is unlawful and a public nuisance for any person owning, leasing, occupying, or having possession of any legal parcel or premises within any zoning district or specific plan in the City to cause or allow such parcel or premises to be used for the outdoor cultivation of non-medical marijuana. 3. Indoor cultivation. Indoor cultivation of non-medical marijuana is prohibited in all zoning districts and specific plans of the City, except for residential zones, mixed use zones, or in commercial zones, when such cultivation occurs on a parcel or premises with an approved private residence. All cultivation must be in compliance with this article and state law. 4. Indoor cultivation in private residence. The indoor cultivation of non- medical marijuana in a residential zone, mixed use zone, or in a commercial zone on a parcel or premises with an approved private residence, shall only be conducted within a fully enclosed and secure structure or within a residential structure. Such cultivation shall be in conformance with the following minimum standards: a. The primary use of the property shall be for a residence. Non-medical marijuana cultivation is prohibited as a home occupation. b. All areas used for cultivation of non-medical marijuana shall comply with the Huntington Beach Municipal Code including the Zoning and Subdivision Ordinance, as well as applicable law. c. Indoor grow lights shall not exceed 1,200 watts per light, and shall comply with the California Building, Electrical and Fire Codes as adopted by the City. Lights shall be located away from combustible materials and a minimum of 30 inches from fire sprinklers. d. The use of gas products (CO2, butane, propane, natural gas, etc.) or generators for cultivation of non-medical marijuana is prohibited. e. Any fully enclosed and secure structure or residential structure used for the cultivation of non-medical marijuana must have a ventilation and filtration system installed that shall prevent marijuana plant odors from exiting the interior of the structure and that shall comply with the Huntington Beach Municipal Code, including the Zoning and Subdivision Ordinance. f. A fully enclosed and secure structure used for the cultivation of non-medical marijuana shall be located in the rear yard area of the parcel or premises, and must maintain a minimum ten-foot setback from any property line as well as any other applicable development standards of the zoning district. The yard where the fully enclosed and secure structure is maintained must 17-5917/161951/7/14/mv 5 HB -237-Item 10. - 9 ORDINANCE NO. 4137 be enclosed by a solid fence at least six feet in height. This provision shall not apply to cultivation occurring in a garage. g. Adequate mechanical locking or electronic security systems must be installed as part of the fully enclosed and secure structure or the residential structure prior to the commencement of cultivation. h. Non-medical marijuana cultivation shall be limited to six marijuana plants per private residence, regardless of whether the marijuana is cultivated inside the residence or a fully enclosed and secure structure. The limit of six plants per private residence shall apply regardless of how many individuals reside at the private residence. i. The residential structure shall remain at all times a residence, with legal and functioning cooking, sleeping and sanitation facilities with proper ingress and egress. These rooms shall not be used for non-medical marijuana cultivation where such cultivation will prevent their primary use for cooking of meals, sleeping and bathing. j. Cultivation of non-medical marijuana shall only take place on impervious surfaces. k. From a public right-of-way, there shall be no exterior evidence of non- medical marijuana cultivation occurring on the parcel. 1. Non-medical marijuana cultivation area, whether in a fully enclosed and secure structure or inside a residential structure, shall not be accessible to persons under 21 years of age. m. Written consent of the property owner to cultivate non-medical marijuana within the residential structure shall be obtained and shall be kept on the premises, and available for inspection by the Chief of Police or his/her designee. n. A 2A:10B:C portable fire extinguisher that complies with the regulations and standards adopted by the state fire marshal and applicable law, shall be kept in the fully enclosed and secure structure used for cultivation of non- medical marijuana. If cultivation occurs in a residential structure, the portable fire extinguisher shall be kept in the same room as where the cultivation occurs. D. Public Nuisance. Any use or condition caused or permitted to exist in violation of any of the provisions of this article is hereby declared a public nuisance and may be abated by the City. E. Enforcement. 1. Violation of this Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance is a public nuisance and may be enforced pursuant to the provisions of the Municipal Code including the Zoning and Subdivision Ordinance. 2. Nothing in this article in any way limits any other remedies that may be available to the City, or any penalty that may be imposed by the City, for violations of this article. Such additional remedies include, but are not limited to, injunctive relief or administrative citations. 17-5917/161951/7/14/n1v 6 HB -238-Item 10. - 10 D AND APPROVED: ORDINANCE NO. 4137 SECTION 3: Severabilit y If an y section of this Ordinance is determined to be unenforceable, invalid, or unlawful, such determination shall not affect the enforceabilit y of the remainin g provisions of this Ordinance. SECTION 4. CEQA This Ordinance is exempt from the California Environmental Qualit y Act pursuant to Cit y Council Resolution No. 4501, Class 20, which supplements the California Environmental Qualit y Act. SECTION 5. This ordinance shall become effective 30 da y s after its adoption. PASSED AND ADOPTED b y the City Council of the Cit y of Huntin g ton Beach at a re g ular meetin g thereof held on the day of , 2017. Ma y or ATTEST: City Clerk REVIEWED AND APPROVED: City Manager APPROVED AS TO FORM: rnL LL cal City Attorni Police Chief MV 17-5917/161951/7/14/my 7 HB -239-Item 10. - 11 1 Excerpts from Chapter 204 Use Classifications 204.18 Prohibited Uses—Medical Marijuana Businesses A. Purpose. In order to expressly inform the public that any distribution of marijuana by Medical Marijuana Businesses, Collectives, Cooperatives or Dispensaries, etc., is prohibited in the City of Huntington Beach, the City is adding this express prohibition to the Zoning and Subdivision Ordinance. B. Definitions. For purposes of this section, the following term is defined: 1. Medical Marijuana Business, Collective, Cooperative or Dispensary means any location, structure, facility, vehicle, business, store, co-op, residence, or similar facility used, in full or in part, as a place at or in which marijuana is sold, traded, exchanged, bartered for in any way, made available, located, stored, displayed, placed or cultivated, including any of the foregoing if used in connection with the distribution of marijuana. C. Medical Marijuana Businesses, Collectives, Cooperatives or Dispensaries. A Medical Marijuana Business, Collective, Cooperative or Dispensary or any other such business, no matter how so named, is not a permitted use in any zoning district or specific plan in the City. It shall be unlawful for any person or entity to own, manage, establish, conduct or operate a Medical Marijuana Business, Collective, Cooperative or Dispensary. Also, it shall be unlawful for any person to permit to be established, conducted, operated, owned or managed as a landlord, owner, employee, contractor, agent or volunteer, or in any other manner or capacity, any Medical Marijuana Business, Collective, Cooperative or Dispensary in the City. (4059-5/15, 4058-6/15) D. Public Nuisance. Any use or condition caused or permitted to exist in violation of any of the provisions of this article is hereby declared a public nuisance and may be abated by the City. E. Enforcement. 1. Violation of this Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance is a public nuisance and may be enforced pursuant to the provisions of the Municipal Code including the Zoning and Subdivision Ordinance. 2. Nothing in this article in any way limits any other remedies that may be available to the City, or any penalty that may be imposed by the City, for violations of this article. Such additional remedies include, but are not limited to, injunctive relief or administrative citations. 204.20 Prohibited Uses—Commercial Non-Medical Marijuana Businesses and Deliveries A. Purpose. In order to expressly inform the public that any sale or distribution of non-medical marijuana by Commercial Non-Medical Marijuana Businesses, Collectives, Cooperatives or Dispensaries, etc., however named is prohibited in the City of Huntington Beach, the City is adding this express prohibition to the Zoning and Subdivision Ordinance. B. Definitions. Unless otherwise specifically defined herein, the definitions contained within Adult Use of Marijuana Act shall apply to this Ordinance. 1. Commercial Non-Medical Marijuana Business, Collective, Cooperative or Dispensary means any location, structure, facility, vehicle, business, store, co-op, residence, HB -240-Item 10. - 12 2 or similar facility used, in full or in part, as a place at or in which marijuana (including marijuana for recreational use) is sold, traded, exchanged, bartered for in any way, made available, located, stored, displayed, placed or cultivated, including any of the foregoing if used in connection with the sale or distribution of non-medical marijuana. 2. Non-medical marijuana delivery means the commercial transfer of non-medical marijuana or non-medical marijuana products to a person, including any technology that enables persons to arrange for or facilitate the commercial transfer of non-medical marijuana or non-medical marijuana products. 3. Non-medical marijuana products means non-medical marijuana that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing marijuana or concentrated cannabis and other ingredients. C. Commercial Non-Medical Marijuana Businesses, Collectives, Cooperatives or Dispensaries. A Commercial Non-Medical Marijuana Business, Collective, Cooperative or Dispensary or any other such business, no matter how so named, is not a permitted use in any zoning district or specific plan in the City. It shall be unlawful for any person or entity to own, manage, establish, conduct or operate a Commercial Non-Medical Marijuana Business, Collective, Cooperative or Dispensary. Also, it shall be unlawful for any person to permit to be established, conducted, operated, owned or managed as a landlord, owner, employee, contractor, agent or volunteer, or in any other manner or capacity, any Commercial Non-Medical Marijuana Business, Collective, Cooperative or Dispensary in the City. D. Non-Medical Marijuana Deliveries. Delivery of non-medical marijuana is not a permitted use in any zoning district or specific plan in the City. No permit or any other applicable license or entitlement for use, nor any business license, shall be approved or issued for the establishment, maintenance or operation of non-medical marijuana deliveries. E. Public Nuisance. Any use or condition caused or permitted to exist in violation of any of the provisions of this article is hereby declared a public nuisance and may be abated by the City. F. Enforcement. 1. Violation of this Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance is a public nuisance and may be enforced pursuant to the provisions of the Municipal Code including the Zoning and Subdivision Ordinance. 2. Nothing in this article in any way limits any other remedies that may be available to the City, or any penalty that may be imposed by the City, for violations of this article. Such additional remedies include, but are not limited to, injunctive relief or administrative citations. 204.22 Non-Medical Marijuana Cultivation A. Purpose. The purpose and intent of this article is to regulate the cultivation of non-medical marijuana in a manner that protects the health, safety and welfare of the community. Health and Safety Code section 11362.2 authorizes the City to adopt reasonable regulations regarding the cultivation of non-medical marijuana inside a private residence or accessory structure to a private residence. That section also authorizes the City to completely prohibit the cultivation of non- HB -241-Item 10. - 13 3 medical marijuana outside, as long as the California Attorney General has not made a determination that the non-medical use of marijuana is lawful in California under federal law. The Attorney General has not made such a determination. This article is not intended to interfere with the right of an individual 21 years of age or older to possess or cultivate non-medical marijuana, as provided for by Proposition 64. This article is not intended to give any person independent legal authority to grow non-medical marijuana; it is intended simply to impose reasonable regulations on the cultivation of non-medical marijuana when cultivation is authorized by California law. Furthermore, it is the purpose and intent of this amendment to require that non-medical marijuana allowed to be cultivated pursuant to Proposition 64 only be done so in appropriately secured, enclosed, and ventilated structures, so as not to be visible to the general public; to provide for the health, safety and welfare of the public; to prevent odor created by non-medical marijuana plants from impacting adjacent properties; and to ensure that marijuana grown in the City remains secured. B. Definitions. For the purposes of this article, the following definitions shall apply unless the context clearly indicates otherwise. If a word is not defined in this article, and not otherwise defined in state law, the common and ordinary meaning of the word shall apply. 1. Cultivation means the planting, growing, harvesting, drying or processing of marijuana plants or any part thereof. 2. Fully enclosed and secure structure means a space within a building that complies with the applicable Building Code and Zoning and Subdivision Ordinance, and has a complete roof enclosure supported by connecting walls extending from the ground to the roof, a foundation slab or equivalent base to which the floor is secured by bolts or similar attachments, is secure against unauthorized entry, and is accessible only through one or more lockable doors. Walls and roof must be constructed of solid materials that cannot be easily broken through, and must be constructed with non-transparent material. 3. Indoors means inside a fully enclosed and secure structure or within a residential structure. 4. Non-medical marijuana means marijuana that is intended to be used for non-medical purposes pursuant to Health and Safety Code section 111362.1 et seq. 5. Non-medical marijuana cultivation means the planting, growing, harvesting, drying or processing of non-medical marijuana plants or any part thereof pursuant to Health and Safety Code section 11362.1 et seq., as those sections may be amended from time to time. 6. Outdoors means any location within the City that is not within a fully enclosed and secure structure. 7. Person means any individual, partnership, co-partnership, firm, association, joint stock company, corporation, limited liability corporation, collective, cooperative, or combination thereof in whatever form or character. 8. Private residence means a house, an apartment unit, a mobile home or other similar dwelling. C. Cultivation of non-medical marijuana. The following regulations shall apply to the cultivation of non-medical marijuana within the City: HB -242-Item 10. - 14 4 1. Cultivation not in compliance with this article. It is declared to be unlawful and a public nuisance for any person owning, leasing, occupying or having charge or possession of any parcel or premises within any zoning district or specific plan in the City to cultivate non- medical marijuana except as provided for in this Code. No person other than an individual 21 years of age or older may engage in the cultivation of non-medical marijuana. 2. Outdoor cultivation. It is unlawful and a public nuisance for any person owning, leasing, occupying, or having possession of any legal parcel or premises within any zoning district or specific plan in the City to cause or allow such parcel or premises to be used for the outdoor cultivation of non-medical marijuana. 3. Indoor cultivation. Indoor cultivation of non-medical marijuana is prohibited in all zoning districts and specific plans of the City, except for residential zones, mixed use zones, or in commercial zones, when such cultivation occurs on a parcel or premises with an approved private residence. All cultivation must be in compliance with this article and state law. 4. Indoor cultivation in private residence. The indoor cultivation of non-medical marijuana in a residential zone, mixed use zone, or in a commercial zone on a parcel or premises with an approved private residence, shall only be conducted within a fully enclosed and secure structure or within a residential structure. Such cultivation shall be in conformance with the following minimum standards: a. The primary use of the property shall be for a residence. Non-medical marijuana cultivation is prohibited as a home occupation. b. All areas used for cultivation of non-medical marijuana shall comply with the Huntington Beach Municipal Code including the Zoning and Subdivision Ordinance, as well as applicable law. c. Indoor grow lights shall not exceed 1,200 watts per light, and shall comply with the California Building, Electrical and Fire Codes as adopted by the City. Lights shall be located away from combustible materials and a minimum of 30 inches from fire sprinklers. d. The use of gas products (CO2, butane, propane, natural gas, etc.) or generators for cultivation of non-medical marijuana is prohibited. e. Any fully enclosed and secure structure or residential structure used for the cultivation of non-medical marijuana must have a ventilation and filtration system installed that shall prevent marijuana plant odors from exiting the interior of the structure and that shall comply with the Huntington Beach Municipal Code, including the Zoning and Subdivision Ordinance. f. A fully enclosed and secure structure used for the cultivation of non-medical marijuana shall be located in the rear yard area of the parcel or premises, and must maintain a minimum ten-foot setback from any property line as well as any other applicable development standards of the zoning district. The yard where the fully enclosed and secure structure is maintained must be enclosed by a solid fence at least six feet in height. This provision shall not apply to cultivation occurring in a garage. g. Adequate mechanical locking or electronic security systems must be installed as part of the fully enclosed and secure structure or the residential structure prior to the commencement of cultivation. HB -243-Item 10. - 15 5 h. Non-medical marijuana cultivation shall be limited to six marijuana plants per private residence, regardless of whether the marijuana is cultivated inside the residence or a fully enclosed and secure structure. The limit of six plants per private residence shall apply regardless of how many individuals reside at the private residence. i. The residential structure shall remain at all times a residence, with legal and functioning cooking, sleeping and sanitation facilities with proper ingress and egress. These rooms shall not be used for non-medical marijuana cultivation where such cultivation will prevent their primary use for cooking of meals, sleeping and bathing. j. Cultivation of non-medical marijuana shall only take place on impervious surfaces. k. From a public right-of-way, there shall be no exterior evidence of non-medical marijuana cultivation occurring on the parcel. l. Non-medical marijuana cultivation area, whether in a fully enclosed and secure structure or inside a residential structure, shall not be accessible to persons under 21 years of age. m. Written consent of the property owner to cultivate non-medical marijuana within the residential structure shall be obtained and shall be kept on the premises, and available for inspection by the Chief of Police or his/her designee. n. A 2A:10B:C portable fire extinguisher that complies with the regulations and standards adopted by the state fire marshal and applicable law, shall be kept in the fully enclosed and secure structure used for cultivation of non-medical marijuana. If cultivation occurs in a residential structure, the portable fire extinguisher shall be kept in the same room as where the cultivation occurs. D. Public Nuisance. Any use or condition caused or permitted to exist in violation of any of the provisions of this article is hereby declared a public nuisance and may be abated by the City. E. Enforcement. 1. Violation of this Chapter 204 of the Huntington Beach Zoning and Subdivision Ordinance is a public nuisance and may be enforced pursuant to the provisions of the Municipal Code including the Zoning and Subdivision Ordinance. 2. Nothing in this article in any way limits any other remedies that may be available to the City, or any penalty that may be imposed by the City, for violations of this article. Such additional remedies include, but are not limited to, injunctive relief or administrative citations. HB -244-Item 10. - 16 City of Huntington Beach Community Development Department STAFF REPORT TO: Planning Commission FROM: Scott Hess, AICP, Director of Community Development BY: Tess Nguyen, Associate Planner DATE: July 25, 2017 SUBJECT: ZONING TEXT AMENDMENT NO. 17-001 (NON-MEDICAL MARIJUANA) APPLICANT: City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648 LOCATION: Citywide STATEMENT OF ISSUE:  Zoning Text Amendment (ZTA) No. 17-001 request:  To amend Chapter 204 Use Classifications of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) to 1) amend Prohibited Uses section; 2) add a Prohibited Uses— Commercial Non-Medical Marijuana Businesses section to prohibit any sale or distribution of non-medical marijuana; 3) add a Prohibited Uses—Non-Medical Marijuana Deliveries section to prohibit the deliveries of non-medical marijuana; and 4) add a Cultivation of Non-Medical Marijuana section to regulate the cultivation of non-medical marijuana.  Staff Recommendation: Approve Zoning Text Amendment No. 17-001 based upon the following:  Allows the HBZSO to be consistent with state law which allows cities to entirely exclude facilities that sell and distribute non-medical marijuana, to prohibit the deliveries of non- medical marijuana, and to regulate the cultivation of non-medical marijuana.  Does not alter zoning on any property. RECOMMENDATION: Motion to: “Approve Zoning Text Amendment No. 17-001 with findings (Attachment No. 1) and forward Draft Ordinance (Attachment No. 2) to the City Council for adoption.” ALTERNATIVE ACTION(S); The Planning Commission may take alternative actions such as: A. “Deny Zoning Text Amendment No. 17-001 with findings for denial.” HB -245-Item 10. - 17 PC Staff Report – 07/25/17 2 (17sr28 ZTA 17-001) B. “Continue Zoning Text Amendment No. 17-001 and direct staff accordingly.” PROJECT PROPOSAL: Zoning Text Amendment No. 17-001 represents a request to amend Chapter 204 Use Classifications of the Huntington Beach Zoning and Subdivision Ordinance for the following sections: 1. Amend Section 204.18 Prohibited Uses 2. Add Section 204.20 Prohibited Uses—Commercial Non-Medical Marijuana Businesses to expressly prohibit any sale or distribution of non-medical marijuana. 3. Add Section 204.22 Prohibited Uses—Non-Medical Marijuana Deliveries to prohibit the deliveries of non-medical marijuana. 4. Add Section 204.24 Cultivation of Non-Medical Marijuana to regulate the cultivation of non- medical marijuana. Background: In November 2016, Proposition 64 was passed by California voters and the Adult Use of Marijuana Act was adopted. Proposition 64 legalized certain non-medical use of marijuana for individuals 21 years of age and older. The Act allows 1) adults 21 years and older to use, possess, purchase, and grow non-medical (recreational) marijuana; 2) local governments to ban non-medical marijuana businesses; and 3) local governments to regulate the cultivation of non-medical marijuana for personal use by adults 21 years and older and to ban outdoor cultivation as set forth in the Act. Study Session: The project was introduced to the Planning Commission (PC) on July 11, 2017, at a study session. The PC inquired about several project-related issues that are identified and expanded upon below: CEQA Exemption The Zoning Text Amendment is categorically exempt pursuant to City Council Resolution No. 4501, Class 20, which supplements the California Environmental Quality Act. In 1997, the City Council adopted Resolution No. 4501 that included additional exemptions that are declared to be consistent with both the letter and intent of CEQA. Class 20 exemption applies to minor amendments to zoning ordinances that do not change the development standards intensity or density of such districts. Additional Nuisance Language The nuisance language in the Sections 204.18, 204.20, and 204.22 is intended to strengthen the ability to enforce these sections. Reason for Zoning Text Amendment The proposed Zoning Text Amendment for non-medical marijuana is being processed to clarify the City’s existing ban and regulate the cultivation of non-medical marijuana. HB -246-Item 10. - 18 PC Staff Report – 07/25/17 3 (17sr28 ZTA 17-001) California Attorney General Determination If the California Attorney General makes a determination that non-medical use of marijuana is lawful in California under federal law, the City would evaluate its implications before proposing any changes to Section 204.22 Non-Medical Marijuana Cultivation. Fire Code Requirements The following language was added to provided clarification specific to fire code requirements in Section 204.22.C.4: “Lights shall be located away from combustible materials and a minimum of 30 inches from fire sprinklers.” “A 2A:10B:C portable fire extinguisher that complies with the regulations and standards adopted by the state fire marshal and applicable law, shall be kept in the fully enclosed and secure structure used for cultivation of non-medical marijuana.” Need for Disclosure No disclosure requirements are proposed for children living in the home or visiting the home where non-medical marijuana is cultivated. Community Need According to the Police Department, other cities that have legalized non-medical marijuana, such as Colorado, have seen an increase in DUI arrests involving marijuana usage. Colorado also saw an increase in marijuana related hospitalizations and attribute an increase in homelessness to the appeal of legal marijuana. Organized crime has begun to infiltrate some of the cultivation businesses. The distribution of the product is primarily a cash business which has led to under-reporting of revenues. Locally, Huntington Beach has experienced problems with medical marijuana locations even though they are prohibited businesses by ordinance. There have been reports of robberies, thefts and attempted burglaries. It is reasonable to assume that commercial non-medical marijuana businesses and non-medical marijuana deliveries will have similar impacts. ISSUES: General Plan Conformance: The proposed Zoning Text Amendment is consistent with the goals of the City’s General Plan as follows: A. Land Use Element: Goal LU 7: Achieve a diversity of land uses that sustain the City’s economic viability, while maintaining the City’s environmental resources and scale and character. B. Public Facilities and Services Element: Goal PF 1: Protect the community from criminal activity, reduce the incidence of crime and provide other necessary services within the City. HB -247-Item 10. - 19 PC Staff Report – 07/25/17 4 (17sr28 ZTA 17-001) The proposed text amendment will protect the City from adverse impacts such as increases in criminal activities, vehicular and pedestrian traffic, and nuisances for adjacent properties. Zoning Compliance: Not applicable. Urban Design Guidelines Conformance: Not applicable. Environmental Status: The proposed project is categorically exempt pursuant to City Council Resolution No. 4501, Class 20, which supplements the California Environmental Quality Act. Coastal Status: This project would be considered a minor amendment to the City’s Local Coastal Program and will be forwarded to the California Coastal Commission with other minor amendments for certification. Design Review Board: Not applicable. Subdivision Committee: Not applicable. Other Departments Concerns and Requirements: Not applicable. Public Notification: Legal notice was published in the Huntington Beach Wave on July 13, 2017. As of July 18, 2017, no communication supporting or opposing the request has been received. Application Processing Dates: DATE OF COMPLETE APPLICATION: MANDATORY PROCESSING DATE(S): Not Applicable Legislative Action - Not Applicable ANALYSIS: The proposed Zoning Text Amendment was initiated to amend the HHZSO to expressly articulate the prohibition of any sale, distribution, and deliveries of non-medical marijuana in the City and to regulate the cultivation of non-medical marijuana. The draft ordinance (Attachment No. 2) and legislative draft (Attachment No. 3) provides the new language to be added to the HBZSO. The proposed Zoning Text Amendment prohibits outdoor cultivation of non-medical marijuana and imposes reasonable regulations on indoor cultivation of non-medical marijuana when cultivation is authorized by California law. The Adult Use of Marijuana Act allows adults 21 years and older to cultivate up to six marijuana plants for non-medical use. Pursuant to the proposed Section 204.22 Non-Medical Marijuana Cultivation, the indoor cultivation of non-medical marijuana is permitted at residential properties and shall comply with the following criteria: HB -248-Item 10. - 20 PC Staff Report – 07/25/17 5 (17sr28 ZTA 17-001)  within a fully enclosed or secure structure or within a residential structure  not visible to the general public  provide for the health, safety, and welfare of the public  prevent odor created by non-medical marijuana plants from impacting adjacent properties According to input provided by the Police Department, allowing non-medical marijuana businesses to operate in Huntington Beach would negatively impact the quality of life for the City’s residents, visitors, and businesses. The City has expended significant resources to enforce the prohibition of medical marijuana businesses. Staff time has been spent on tracking down property owners and business owners whom provide false information on business license and rental documents. Staff found significant modifications to building structures without proper permits or safety inspections. The modifications violated building and fire codes, creating an unsafe environment for employees, customers, and surrounding businesses. There has been incidents of crime, ranging from arson fire and armed robbery. Allowing non-medical marijuana businesses would further exacerbate the issues currently encountered from the operation of illegal dispensaries and collectives. Adopting the proposed zoning text amendment would support the City’s position of prohibiting all marijuana within the City. Staff recommends that the Planning Commission approve Zoning Text Amendment No. 17-001 and forward to the City Council for adoption. ATTACHMENTS: 1. Findings for Approval – Zoning Text Amendment No. 17-001 2. Draft Ordinance No. 4137 Amending HBZSO Chapter 204 by Amending Section 204.18 (Prohibited Uses) and Adding Section 204.20 (Prohibited Uses—Commercial Non-Medical Marijuana Businesses and Deliveries) and Section 204.22 (Non-Medical Marijuana Cultivation) 3. Legislative Draft of Chapter 204 Use Classification SH:JJ:TN:kd HB -249-Item 10. - 21 PC Staff Report – 07/25/17 Attachment No. 1.1 ATTACHMENT NO. 1 SUGGESTED FINDINGS FOR APPROVAL ZONING TEXT AMENDMENT NO. 17-001 SUGGESTED FINDINGS FOR APPROVAL - ZONING TEXT AMENDMENT NO. 17-001: 1. Zoning Text Amendment No. 17-001 amends Chapter 204 Use Classifications of the Huntington Beach Zoning and Subdivision Ordinance to amend the Prohibited Uses section, add a Prohibited Uses—Commercial Non-Medical Marijuana Businesses and Deliveries section, and add a Non- Medical Marijuana Cultivation section. ZTA No. 17-001 is consistent with the goals, policies and objectives specified in the General Plan by expressly prohibiting commercial non-medical marijuana businesses and deliveries of non-medical marijuana and regulating the cultivation of non-medical marijuana while continuing to allow permitted uses. 2. In the case of the general land use provisions, the amendments proposed are compatible with the uses authorized in, and the standards prescribed for the Zoning districts for which they are proposed. The changes do not affect zoning of any property or the development standards thereof. 3. A community need is demonstrated for the proposed amendment to ensure that the HBZSO expressly prohibits any sale or distribution of non-medical marijuana in the City, prohibits the deliveries of non- medical marijuana, and regulates the cultivation of non-medical marijuana as allowed by state law. 4. Its adoption will be in conformity with public convenience, general welfare and good zoning practice. Approval of Zoning Text Amendment No. 17-001 will ensure that commercial non-medical marijuana businesses and deliveries of non-medical marijuana are not allowed in the City and the cultivation of non-medical marijuana follows State regulations. HB -250-Item 10. - 22 NON-MEDICAL MARIJUANA ZONING TEXT AMENDMENT ZONING TEXT AMENDMENT NO. 17-001 August 21, 2017HB -251-Item 10. - 23 BACKGROUND –In November 2016, Proposition 64 was passed by California voters and the Adult Use of Marijuana Act was adopted –Proposition 64 legalized certain non-medical use of marijuana for individuals 21 years of age and olderHB -252-Item 10. - 24 BACKGROUND –The Act allows: adults 21 years or older to use, possess, purchase, and grow non-medical marijuana local governments to ban non-medical local governments to ban non-medical marijuana businesses local governments to regulate the cultivation of non-medical marijuana for personal use by adults 21 years and older and ban outdoor cultivation HB -253-Item 10. - 25 REQUEST ZONING TEXT AMENDMENT: –To amend Chapter 204 (Use Classifications) of the Huntington Beach Zoning and Subdivision the Huntington Beach Zoning and Subdivision Ordinance –To amend Section 204.18 Prohibited Uses to add the public nuisance and enforcement languageHB -254-Item 10. - 26 REQUEST ZONING TEXT AMENDMENT: –To add Section 204.20 Prohibited Uses— Commercial Non-Medical Marijuana Businesses Commercial Non-Medical Marijuana Businesses and Deliveries to prohibit any sale or distribution and deliveries of non-medical marijuana –To add Section 204.22 Non-Medical Marijuana Cultivation to regulate the cultivation of non- medical marijuanaHB -255-Item 10. - 27 PC RECOMMENDATION –Public hearing was held on July 25, 2017 –The Planning Commission recommended –The Planning Commission recommended approval of Zoning Text Amendment No. 17- 001HB -256-Item 10. - 28 ANALYSIS –Enhances the HBZSO by making the prohibition of non-medical marijuana sale, distribution, and deliveries and the regulation of non- medical marijuana cultivation clearer to the medical marijuana cultivation clearer to the public –Addresses the potential negative impacts of non-medical marijuana sale, distribution, deliveries, and cultivation –Regulates cultivation of up to six plants indoors within a residential structure or outdoors within a secured and enclosed structureHB -257-Item 10. - 29 RECOMMENDATION Staff and the Planning Commission recommend approval of the Zoning Text Amendment to amend Chapter 204 Use Classifications: –Allows the Zoning Ordinance to be consistent with state law, which allows cities to ban non- medical marijuana businesses and regulate the cultivation of non-medical marijuana –Does not alter zoning on any propertyHB -258-Item 10. - 30 Esparza, Patty From: Sent: To: Cc: Subject: Dombo, Johanna Monday, August 21, 2017 1:53 PM Agenda Comment Fikes, Cathy; CITY COUNCIL FW: will of the people AGENDA COMMENT From: Stacey Coburn [mailto:stacey@lrsrm.com] Sent: Monday, August 21, 2017 1:28 PM To: CITY COUNCIL Subject: will of the people Please count my vote in to legalize cannabis without a med card for HB. Thank you Stacey Stacey Coburn Realtor J Supervisor Property Management, Leasing & Sales - Orange County LRS Realty & Management, Inc. 15375 Barranca Parkway, Suite A-112 Irvine, CA 92618 Office: 949-502-5583 Direct: 714-756-1300 BRE# 01481632 About LRS: Website & Company Video Colossians 2:7 SUPPLEMENTAL COMMUNICATION Meeting Date:_ S' Agenda Item No.. 1 HB -259-Item 10. - 31 Estanislau, Robin From: Sent: To: Cc: Subject: Dombo, Johanna Monday, August 21, 2017 2:26 PM Agenda Comment Fikes, Cathy; CITY COUNCIL FW: Cannabis Sales in Huntington Beach AGENDA COMMENT From: Belindajon [mailto:belindaion@aol.conn] Sent: Monday, August 21, 2017 2:18 PM To: CITY COUNCIL Subject: Cannabis Sales in Huntington Beach Dear City Council, It is my understanding there is going to be a vote on the sales of cannabis within the city of Huntington Beach. As a resident, please note that I fully support our city finding a safe place to allow cannabis dispensaries. Our city is large enough to create zoning to allow the dispensaries. Sincerely, Belinda Shepherd Huntington Beach Resident SUPPLEMENTAL COMMUNICATION *AN Date: '1Zi I /7 ,Iende Item No.; 21. . 1 HB -260-Item 10. - 32 Estanislau, Robin From: Sent: To: Cc: Subject: Dombo, Johanna Monday, August 21, 2017 2:30 PM Agenda Comment Fikes, Cathy; CITY COUNCIL FW: Cannabis Sales Re-Zoning AGENDA COMMENT From: Robert Dutton Imailto:bobalu42@gmail.com] Sent: Monday, August 21, 2017 2:30 PM To: CITY COUNCIL Subject: Cannabis Sales Re-Zoning I urge all Council members to freely allow Medical and recreational Cannabis sales and personal cultivation in the City of Huntington Beach. Robert Dutton 9122 Christine Dr. Huntington Beach. CA 92646 SUPPLEMENTAL COMMUNICATION 7121 21 Meeting Date: Agenda item No.; HB -261-Item 10. - 33 Switzer, Donna From: Sent: To: Subject: SurrCity--Pirreline-[noreplyQuW4n ovoutreach.com ] ---- Tuesday, August 22, 2017 8:01 AM- Surf City Pipeline; You have been assigned a new Request #: 30796 Request # 30796 from the Government Outreach System has been assigned to you. Request type: Problem Request area: City Council - Agenda & Public Hearing Comments Citizen name: Bill Larkin Description: Medical vs Recreational Marijuana The problem with the Marijuana debate is proponents always conflate medical marijuana and recreational marijuana. The benefits of medical marijuana come from high levels of CBD, which naturally comes with low levels of THC ( the Psychoactive ingredient that gets people high ). Medical Marijuana is grown to optimize the CBD oils, which comes at the expense of THC ( meaning high CBD oils, comes with lower THC levels. Recreational marijuana is grown to optimize the THC levels, which then means it comes with low levels of CBD ( reducing the medicinal effect ). The problem with today's recreational marijuana, there are no real studies on the super high THC levels that we're seeing today with some of the recreational stuff. When we were kids, the THC levels were 1-4%. When these states started legalizing marijuana, the THC levels were reaching 10-15%. Today, we're seeing THC levels reaching 30- 40%, There are no completed studies with THC levels this high which is extremely concerning as we're talking about our youth and our children's future. When you add the synthetic marijuana to the 'designer' marijuana that's being put out these days, who knows what this might mean. That said, there seems to be some good rational for medical marijuana, but that should not be conflated with the recreational stuff. SUPPLEMENTAL COMMUNICATION Meeting Date: S'_/2-2 Click here to access the request Agenda Item Note: This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored. Just my 3 cents,.., Bill Larkin Expected Close Date: September 4, 2017 1 HB -262-Item 10. - 34 Estanislau, Robin From: Sent: To: Cc: Subject: Dombo, Johanna Monday, August 21, 2017 2:55 PM Agenda Comment Fikes, Cathy; CITY COUNCIL FW: Please uphold my vote! AGENDA COMMENT Original Message From: gino world [mailto:ginosworldOgmail.com] Sent: Monday, August 21, 2017 2:35 PM To: CITY COUNCIL Subject: Please uphold my vote! We, in the city of HB overwhelmingly voted to legalize recreational sales. Please uphold our vote and allow shops to operate here and allow the city to profit from all the tax revenue. SUPPLEMENTAL COMMUNICATION Meeting Date: Agenda Item 1 HB -263-Item 10. - 35 Esparza, Patty From: Sent: To: Cc: Subject: Dombo, Johanna Tuesday, August 22, 2017 8:40 AM Agenda Comment Fikes, Cathy; CITY COUNCIL FAN: Marijuana Zoning AGENDA COMMENT From: Kyle Zemblidge Imaiito:kzemblidge@gmail.com ] Sent: Tuesday, August 22, 2017 8:09 AM To: CITY COUNCIL Subject: Marijuana Zoning As a Huntington Beach citizen, and unfortunatly unable to attend a lot of these meetings due to work etc. I wanted to issue a short statement on this particular matter. It's too my understanding the use of the product is now legal in this state. The sale of it still being addressed. Why HB wouldn't go forward and not only listen to the will of its own city residents, not to mention the will of all the voting citizens in this state, is unacceptable. By not creating zoning for dispensaries, you're effectively sending dollars that would be spent here into neighboring cities. Not to mention permits, business licences, and any applicable taxes. You personally may or may not like it. But the law was passed by a majority vote. We don't need more micro managing of our city going against state laws. I don't want to ramble on to much so I kindly thank you for your time. 1 HB -264-Item 10. - 36 Dept. ID FN17-014 Page 1 of 4 Meeting Date: 9/5/2017 Statement of Issue: The City Charter of the City of Huntington Beach requires a Public Hearing prior to the adoption of the City’s annual budget. The City Charter further requires adoption of the annual budget by September 30, 2017, for FY 2017/18. Financial Impact: The total FY 2017/18 Proposed Budget is a structurally balanced budget. The All Funds Proposed Budget equals $361.2 million, including a General Fund Proposed Budget of $224.0 million. Individual departmental and fund level appropriations are contained in the attachments herein. Recommended Action: A) Open the Public Hearing on the Proposed FY 2017/18 City budget appropriation of $361,244,359 as outlined in the Proposed Budget document; and, B) Adopt Resolution Number 2017-43, " A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for FY 2017/18;” and, C) Authorize the Professional Services included in the FY 2017/18 budget to be representative of the services projected to be utilized by departments in FY 2017/18; and, D) Adopt Resolution Number 2017-21, “A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for FY 2017/18” of $882,638,091; and, E) Approve adjustments to the FY 2017/18 Proposed Budget in the Funds and by the amounts contained in Attachment 2, Exhibit A-1; and, F) Approve the FY 2017/18 Proposed Budget Table of Organization as shown on Attachment 2, Exhibit D. Alternative Action(s): Continue the Public Hearing until September 18, 2017, and instruct City staff regarding changes to be incorporated in the budget. CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Lori Ann Farrell Harrison, Chief Financial Officer SUBJECT: Public Hearing to consider adopting Resolution No. 2017-43 to adopt a Budget for the City for Fiscal Year 2017/2018 and Resolution No. 2017-21 establishing the Gann Appropriation Limit HB -265-Item 11. - 1 Dept. ID FN17-014 Page 2 of 4 Meeting Date: 9/5/2017 Analysis: The City Charter requires that the City Manager submit the Proposed Budget to the City Council at least 30 days prior to the beginning of the next fiscal year. The City Manager submitted the FY 2017/18 Proposed Budget to the City Council on July 13, 2017, for the fiscal year starting October 1, 2017. The general framework for the FY 2017/18 Proposed Budget was first presented to the City Council at the May 1, 2017, Mid-Year Budget Update. The Proposed Budget and the Five-Year Capital Improvement Program (CIP) were also discussed at Study Sessions held on July 17, 2017, August 7, 2017, and August 21, 2017. The purpose of these budget study sessions was to provide the City Council an opportunity to discuss the Proposed Budget with staff before proceeding with the formal Public Hearing on September 5, 2017. In preparation for higher pension costs, a workshop to discuss plans and options to address increasing pension payments over the next six years will be scheduled for the Fall of 2017. Overview The theme of next year’s budget, “Taking Care of Business,” takes a conservative approach with an emphasis on maintaining essential government services and incorporating key strategies to help ensure financial sustainability for the coming years. The FY 2017/18 Proposed Budget is structurally balanced and totals $361.2 million in All Funds, reflecting a 4.5 percent increase from the FY 2016/17 Adopted All Funds Budget of $345.5 million. The FY 2017/18 Proposed Budget reflects flat staffing levels across All Funds. The total FTE count in All Funds for FY 2017/18 is 986.25. The FY 2017/18 General Fund Proposed Budget is projected at $224.0 million, a $3.7 million or 1.6 percent increase from the current year’s Adopted Budget of $220.4 million. General Fund revenue consists of numerous sources, such as taxes and fees. Major sources of revenue include Property Tax, Sales Tax, Utility Users Tax, and Transient Occupancy Tax, among others. Although many economic indicators predict another year of stable economic growth, the City is experiencing a flattening or slowing of revenue growth in some categories requiring continued vigilance. A total of 55 percent of the General Fund is allocated to public safety, totaling $122.6 million. Revisions to the General Fund Proposed Budget The FY 2017/18 Proposed Budget presented on July 17, 2017, totaled $224.0 million. Based on feedback provided during the study session, the Proposed General Fund Budget has been adjusted to address a number of items as outlined in Exhibit A-1 (Attachment 2). As directed by the City Council, the Library Services Department will be restoring Sunday hours at the Central Library from 1:00 p.m. to 5:00 p.m. The basic model, as presented to the City Council on August 21, 2017, is estimated to cost $137,950. The alternative model, shifting hours to accommodate Sunday hours, is estimated to cost $55,450. The City Council can choose either model for the restoration of Sunday hours. The amount needed will be transferred from Non- Departmental, where funding was appropriated to account for equipment replacement emergencies. Since those funds are not earmarked for any particular replacement, they are available to fund Sunday hours at the Library. The Mariners’ Church lease of the Central Library Theater for Sunday usage will terminate on September 30, 2017. A Request for Proposals (RFP) was issued by the City to help maintain existing revenues. Responses to the RFP are currently under staff review. Revisions to the All Funds Proposed Budget The FY 2017/18 Proposed All Funds Budget totals $361.2 million. The Police Department is requesting appropriation in the amount of $220,000 from the Supplemental Law Enforcement Services Fund (SLESF) Fund 984 to fund additional body worn cameras ($160,000), mobile smart phones ($60,000) and the first year of system services for use by field personnel. The maintenance agreement for the body worn cameras includes four years of service. The remaining three years of the service agreement will be budgeted each year through the City’s annual budget process. HB -266-Item 11. - 2 Dept. ID FN17-014 Page 3 of 4 Meeting Date: 9/5/2017 The Office of Business Development received City Council approval to increase budget appropriations for FY 2017/18 for various funds at the August 7, 2017 City Council Meeting. The FY 2017/18 Community Development Block Grant (CDBG) amount of $1,033,767 was approved, a slight increase of $38,743 from the Proposed Budget. City Council also approved a total of $1.1 million from the Revolving Loan Fund 215, for ADA projects, such as curb-cuts to meet ADA improvement requirements, and a new roof for the Huntington Beach Youth Shelter. On August 21, 2017, the City Council agreed to eliminate the Main Promenade Parking Structure Signage Project ($150,000) funded by the Parking In-Lieu (Fund 308) from the FY 2017/18 Capital Improvement Program (CIP). Visit HB has agreed to fund this project. Hence, this amount has been removed from the budget. Professional Services As established by Administrative Regulation Number 228, each department has submitted a list of professional services which are generally contained in their Proposed Budgets (Attachment #3). Professional services contracts are subject to compliance with Administrative Regulation Number 228 and City Ordinance Chapter 3.03. Gann Appropriation Limit In November 1979, the California voters approved Article 13B of the State of California Constitution, which allows the City’s spending of tax proceeds to increase only by factors from the base year of 1978-1979. In June 1990, Proposition 111 was passed which changed the way the limit is calculated and is outlined as follows. The City may increase its limit annually in two ways: • By a percentage equal to the increase from the preceding year in county or city population (whichever is greater). • By an amount equal to the change in per capita personal income in California or the change in the assessment roll the preceding year due to the addition of local non-residential new construction (whichever is greater). The proposed appropriation limit for FY 2017/18 was calculated as follows: FY 2016/17 Appropriation Limit $ 845,394,563 Multiplied by percentage growth in State Per Capita Personal Income 1.0369 Multiplied by change in County Population 1.0069 Proposed FY 2017/18 Appropriation Limit $ 882,638,091 Appropriations of revenues controlled by the Gann Limit are primarily in the General Fund. The General Fund proposed appropriation for FY 2017/18 of $224.0 million is significantly below this appropriation limit. Examples of proceeds of taxes governed by the Gann Appropriation limit are: property taxes, sales taxes, utility taxes, state subventions, fines, forfeitures, interest revenue on regulatory licenses, user charges, and user fees to the extent that those proceeds exceed the costs reasonably borne by that entity in providing the regulation, product or service. Public Hearing The City Charter requires that a public hearing be conducted on the City budget prior to adoption. Public Hearing notices have been published per City Charter requirements (Attachment #1). At the close of this hearing, all legal requirements for budget adoption will have been met. HB -267-Item 11. - 3 Dept. ID FN17-014 Page 4 of 4 Meeting Date: 9/5/2017 Environmental Status: Not Applicable. Strategic Plan Goal: Improve Quality of Life Enhance and Maintain Infrastructure Strengthen Economic and Financial Sustainability Enhance and Maintain Public Safety Enhance and Maintain City Services Delivery Attachment(s): 1. Public Hearing Notice. 2. Resolution Number 2017-43, “A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for Fiscal Year 2017/2018”. 3. Professional Services included in the Fiscal Year 2017/18 Budget. 4. Resolution Number 2017-21, “A Resolution of the City Council of the City of Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2017/2018”. HB -268-Item 11. - 4 ATTACHMENT 1 HB -269-Item 11. - 5 RESOLUTION NO. 2017-43 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ADOPTING A BUDGET FOR THE CITY FOR FISCAL YEAR 2017/18 WHEREAS, Article VI of the Huntington Beach City Charter requires the City Manager to present and the City Council to adopt an annual City Budget; and The City Council has received and considered the Proposed Budget for Fiscal Year 2017/18, staff reports, and public testimony and information received in a noticed public hearing on the City Budget, NOW, THEREFORE, the City Council of the City of Huntington Beach does resolve as follows: SECTION 1: That the Proposed Budget for Fiscal Year 2017/18, a copy of which is attached hereto as Exhibit "A" and incorporated by this reference as though fully set forth herein, is hereby approved and adopted. SECTION 2: That the Estimated Revenue and Transfers In for Fiscal Year 2017/18, a copy of which is attached hereto as Exhibit "B" and incorporated by this reference as though fully set forth herein, is hereby approved and adopted. When combined with reserves, the Estimated Revenue and Transfers In for Fiscal Year 2017/18 are sufficient to fund the appropriations set forth in proposed Budget for Fiscal Year 2017/18. SECTION 3: That the Proposed Appropriations and Transfers Out for Fiscal Year 2017/18, a copy of which is attached hereto as Exhibit "C" and incorporated by this reference as though fully set forth herein, providing appropriations summaries of details currently contained in the City's accounting system, including technical adjustments related to Transfers In and Transfers Out, and detail of estimated revenue, is hereby approved and adopted. SECTION 4: That the Tables of Organization, a copy of which is attached hereto as Exhibit "D" and incorporated by this reference as though fully set forth herein, is hereby approved and adopted. The City Manager, subject to compliance with the City Charter Section 403, may revise the Tables of Organization provided that the authorized number of personnel within the same department, office or agency is not exceeded. SECTION 5: That from the effective date of the budget, the several amounts stated therein as proposed expenditures shall be and become appropriated to the several departments, offices and agencies for the respective objects and purposes therein named; provided, however, that the City Manager may transfer funds from one object or purpose to another within the same department, office or agency. The City Manager may also transfer non-departmental funds from one expenditure type to another within the same fund provided there is no increase in approval total appropriations contained in the budget. 17-5961/163459/MV 1 HB -270-Item 11. - 6 RESOLUTION NO. 2017-43 SECTION 6: Acquisition of new capital items shall be limited to the specific items included in the approved budget. Acquisition of capital items to replace existing capital equipment shall not exceed the total appropriation for the funding source. The City Manager may authorize changes to the procurement of specific items as long as the total appropriation for any department, fund or agency is not exceeded. However the City Manager must obtain City Council approval for items that exceed Five Hundred Thousand Dollars ($500,000.00). SECTION 7: That the Capital Improvement Program contained in the Proposed Budget for Fiscal Year 2017/18 (Exhibit "A") is hereby approved in concept, and the Director of Public Works is authorized to publicly advertise for bids on these projects in accordance with Section 503 and Section 614 of the City Charter. SECTION 8: That construction of Capital Improvement Projects requires the use of professional services such as geo-technical, water testing, engineering oversight, project management, design, survey, and other required studies. Funding for these professional services is included within each Capital Improvement Project's budget as set forth in the Proposed Budget for Fiscal Year 2017/18 (Exhibit "A"). Consistent with the City Council's policy regarding professional services agreements, the City Council hereby authorizes the City Manager, or designee, to enter into any necessary professional services agreements to facilitate the completion of an approved Capital Improvement Project. SECTION 9: That the City Manager or Chief Financial Officer may, as necessary, appropriate donations and grants received during the fiscal year up to $100,000 per source or grantor. Donations and grant awards with matching requirements, or exceeding $100,000 from a single source or grantor, require City Council approval. Any resolutions authorizing budget amendments related to donations and grants in conflict herewith are hereby repealed. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 2017. Mayor REVIEWED AND APPROVED: City Manager Chief Financial Officer List of Exhibits Exhibit A: Exhibit A-1: Exhibit B: Exhibit C: Exhibit D: Proposed Budget for Fiscal Year 2017/18 as of July 18, 2017 Proposed Budget for Fiscal Year 2017/18 Revisions Estimated Revenue and Transfers In for Fiscal Year 2017/18 Proposed Appropriations and Transfers Out for Fiscal Year 2017/18 Tables of Organization 17-5961/163459/MV 2 HB -271-Item 11. - 7 EXHIBIT A HB -272-Item 11. - 8 EXHIBIT A ***COMPLETE COPY ON FILE IN THE CITY CLERK’S OFFICE** HB -273-Item 11. - 9 General Fund: Restoration of Sunday Library Hours (Scenario 1) Amount Department FY 2017/18 Proposed Budget submitted on July 13, 2017 224,048,543 Citywide Increase funding for Library Sunday Hours 137,950 Library/Non-Dept. Reduce Equipment Replacement Emergency Funds (107,950) Non-Departmental Reduce CIP - City Council Chambers Audio Visual and Remodel Project (30,000) Non-Departmental Total - General Fund: Shifting Hours to Restore Sunday Library (Scenario 2) Amount Department FY 2017/18 Proposed Budget submitted on July 13, 2017 224,048,543 Citywide Increase funding for Library Sunday Hours 55,450 Library/Non-Dept. Reduce Equipment Replacement Emergency Funds (25,450) Non-Departmental Reduce CIP - City Council Chambers Audio Visual and Remodel Project (30,000) Non-Departmental Total - Total FY 2017/2018 General Fund Revised Proposed Budget 224,048,543 All Funds Amount Department FY 2017/18 Proposed Budget submitted on July 13, 2017 360,048,058 Citywide General Fund Revision (see above) - Various CDBG City Council Approved Action Plan on August 7, 2017* 38,743 Office of Bus. Dev. Revolving Loan Fund City Council Approved Action Plan on August 7, 2017* 1,100,000 Office of Bus. Dev. HOME City Council Approved Program on August 7, 2017* (12,442) Office of Bus. Dev. SLESF Funds: Police Body-Worn Cameras 220,000 Police Parking In Lieu Funds: Main Promenade Parking Structure Signage Project (150,000) Non-Departmental Total FY 2017/2018 All Funds Revised Proposed Budget 361,244,359 Exhibit A-1 City of Huntington Beach FY 2017/2018 Proposed Budget Appropriation Revisions *These items were approved at the August 7, 2017 City Council meeting and are fully offset by revenue increases or have sufficient fund balances available for a net-neutral effect. Adjustments above reflect the difference between initial estimates contained in the FY 2017/18 Proposed Budget and final approved amounts. HB -274-Item 11. - 10 EXHIBIT B HB -275-Item 11. - 11 Fund Title Revenue & Transfers In 100 General Fund 224,048,543 101 Specific Events 673,000 122 Inmate Welfare Fund 2,400 201 Air Quality Fund 260,000 204 Fourth of July Parade 358,500 206 Traffic Impact 100,000 207 Gas Tax Fund 3,523,823 210 Sewer 100,000 211 Drainage 100,000 213 Measure M Fund 3,246,588 215 Rehabilitation Loans 200,000 219 Traffic Congestion Relief 42 784,587 226 Quimby Fund 1,412,000 228 Park Dev Impact - Res 541,000 229 Library Dev Impact 70,000 233 Housing Residual Receipts 406,000 234 Disability Access Fund 21,000 235 Park Dev Impact - Non Res 249,000 239 CDBG 1,033,767 240 HOME 411,664 308 In-Lieu Parking Downtown 40,000 314 Infrastructure Fund 3,110,000 322 ELM Automation Fund 225,000 324 Equipment Fund 4,760,000 350 RORF 6,766,308 352 LMIHAF 406,000 401 Debt Svc HBPFA 5,109,792 405 Debt Svc Grand Coast CFD2000-1 1,107,750 406 Debt Svc Mello Roos 273,660 408 Debt Svc McDonnell CFD 2002-1 406,628 410 Debt Svc Bella Terra 2,366,586 501 CUPA 268,460 504 Refuse Collection Service 12,020,500 506 Water 38,648,130 507 Water Master Plan 500,000 508 WOCWB 91,000 511 Sewer Service Fund 10,685,000 551 Self Insurance Workers' Comp 7,103,662 552 Self Insurance General Liab 4,568,564 701 BID - Auto 112,800 702 Retiree Insurance Fund 1,789,000 703 Retirement Supplement 4,333,000 704 Fire JPA Fund 430,366 709 BID - Hotel/Motel 3,750,000 710 BID - Downtown 110,000 711 Parking Structure-Bella Terra 675,574 712 Parking Structure-Strand 1,667,290 960 Used Oil OPP1 10/11 40,000 984 SLESF Grant 250,000 995 Hwy Safety Improvement Program 573,300 1224 OC Regional Narc Suppression 60,000 1228 CalRecycle City/County CRV 48,717 1233 OC RMDZ 6,500 1238 EMPG 16/17 30,000 1239 Office of Traffic Safety 16/17 226,551 1243 OCTA Grant/Shuttle Service 95,000 1246 CENIC E-Rate 52,488 1247 Arterial Rehab 17/18 1,125,734 Total Revenue 351,375,232 Exhibit B City of Huntington Beach Estimated Revenue and Transfers In Fiscal Year 2017/18 Budget HB -276-Item 11. - 12 EXHIBIT C HB -277-Item 11. - 13 Department/Fund Title Appropriations & Transfers Out General Fund (Company 100) City Council 385,111 City Attorney 2,602,105 City Clerk 803,698 City Treasurer 234,302 City Manager 2,524,042 Community Development 7,385,762 Community Services 8,410,110 Finance 5,935,710 Fire 46,882,898 Human Resources 5,888,360 Information Services 6,955,642 Library Services 4,992,413 Police 75,761,418 Public Works 25,629,980 Non-Departmental 29,656,990 Sub-Total General Fund 224,048,543 Other Funds (Company Number and Title) 101 Specific Events 666,100 122 Inmate Welfare Fund 21,050 201 Air Quality Fund 91,183 204 Fourth of July Parade 430,490 207 Gas Tax Fund 3,266,200 209 Park Acquisition & Development 121,530 210 Sewer 2,500,000 213 Measure M Fund 4,095,718 215 Rehabilitation Loans 1,480,000 219 Traffic Congestion Relief 42 812,000 226 Quimby Fund 1,377,639 228 Park Dev Impact - Res 2,889,012 229 Library Dev Impact 50,000 233 Housing Residual Receipts 50,000 234 Disability Access Fund 21,000 239 CDBG 1,033,767 240 HOME 411,664 308 In-Lieu Parking Downtown 50,000 314 Infrastructure Fund 3,100,000 322 ELM Automation Fund 216,368 324 Equipment Fund 4,760,000 350 RORF 7,134,167 352 LMIHAF 810,227 Exhibit C City of Huntington Beach Proposed Appropriations & Transfers Out Fiscal Year 2017/18 Budget 1 of 2HB -278-Item 11. - 14 Department/Fund Title Appropriations & Transfers Out Exhibit C City of Huntington Beach Proposed Appropriations & Transfers Out Fiscal Year 2017/18 Budget Other Funds (Company Number and Title - Continued) 401 Debt Svc HBPFA 5,109,792 405 Debt Svc Grand Coast CFD2000-1 1,107,750 406 Debt Svc Mello Roos 273,660 408 Debt Svc McDonnell CFD 2002-1 406,628 410 Debt Svc Bella Terra 2,366,586 501 CUPA 261,174 504 Refuse Collection Service 12,000,497 506 Water 38,639,561 507 Water Master Plan 5,084,500 508 WOCWB 91,000 511 Sewer Service Fund 9,326,314 551 Self Insurance Workers' Comp 6,596,939 552 Self Insurance General Liab 4,872,412 701 BID - Auto 112,800 702 Retiree Insurance Fund 1,789,000 703 Retirement Supplement 4,333,000 704 Fire JPA Fund 463,276 709 BID - Hotel/Motel 3,750,000 710 BID - Downtown 110,000 711 Parking Structure-Bella Terra 675,574 712 Parking Structure-Strand 2,028,950 984 SLESF Grant 220,000 995 Hwy Safety Improvement Program 573,300 1224 OC Regional Narc Suppression 60,000 1228 CalRecycle City/County CRV 48,717 1233 OC RMDZ 6,500 1239 Office of Traffic Safety 16/17 226,551 1243 OCTA Grant/Shuttle Service 95,000 1246 CENIC E-Rate 52,488 1247 Arterial Rehab 17/18 1,125,734 Sub-Total Other Funds 137,195,816 Total City Appropriations 361,244,359 2 of 2HB -279-Item 11. - 15 EXHIBIT D HB -280-Item 11. - 16 EXHIBIT D D-1 City of Huntington Beach City Council Proposed Budget – FY 2017/18 Mayor Mayor Pro-Tem City Council Member (5) Administrative Assistant HB -281-Item 11. - 17 EXHIBIT D D-2 HB -282-Item 11. - 18 EXHIBIT D D-3 HB -283-Item 11. - 19 EXHIBIT D D-4 City Treasurer Administrative Analyst (0.50) Administrative Assistant (0.50) HB -284-Item 11. - 20 EXHIBIT D D-5 HB -285-Item 11. - 21 EXHIBIT D D-6 HB -286-Item 11. - 22 EXHIBIT D D-7 HB -287-Item 11. - 23 EXHIBIT D D-8 HB -288-Item 11. - 24 EXHIBIT D D-9 HB -289-Item 11. - 25 EXHIBIT D D-10 HB -290-Item 11. - 26 EXHIBIT D D-11 HB -291-Item 11. - 27 EXHIBIT D D-12 HB -292-Item 11. - 28 EXHIBIT D D-13 HB -293-Item 11. - 29 EXHIBIT D D-14 HB -294-Item 11. - 30 ATTACHMENT 3 Department Description Amount City Attorney Legal related professional services $117,865 City Clerk General Consulting Services as it relates to Records Retention such as legal counsel, annual review and update of the Retention Schedule, new legislation and other professional services $1,000 City Manager Professional services including governmental membership, state and federal consulting/lobbying services, financial consulting, graphic services, legal services, demographic research, management/organization efficiency studies, and other consulting and professional services related to business development, real estate services, public information, marketing, sustainability, and regulatory agency compliance, and other administrative and professional services related to the functions of municipal governance. Financial consulting/economic analysis, legal services, real estate services (including but not limited to appraisals, right-of-way services, acquisitions, title reporting, etc.) parking consulting, engineering services, homeless services, CDBG/HOME consulting, and inspection services.$398,494 Community Development Professional services including planning and technical services, inspection services, plan check services and other professional services.$527,697 Community Services Design/Environmental/Architectural/Engineering, and other consulting and professional services.$178,000 Finance Audit Professional Services, Sales Tax Auditing, Property Tax Auditing, and other consulting and professional services.$303,200 Fire Fire and development plan check and inspection services; environmental and soils consulting; employment background and other investigative services; evaluation of emergency services; oil production inspections, evaluation of oil production system, testing and document preparation; paramedic/ambulance billing; physical examinations and pulmonary consulting for personnel; GEMT document prepartion; hazardous materials inspections of City businesses as part of the CUPA Program and other consulting and professional services.$526,491 Human Resources Professional services including legal, recruitment, medical professional, labor consulting and other consulting and professional services.$962,500 Information Services Consulting and other professional services related to Audit Security Services, Phone Support, Workshops for Business Intelligence, Infrastructure Systems, Public Safety Systems and Application and Database Support Divisions.$35,000 Police Psychological exams, background, polygraph, legal consultations, rape and medical exams, blood-withdraw technician service, annual medical physician review of facility and procedure services, crime prevention, juvenile diversion, gang prevention, hazmat physical exams, flight crew physicals, SWAT physical, hepatitis shots & TB testing and other related professional services.$335,825 Public Works Engineering/Design, Engineering Studies, Environmental Consulting Services, Inspection/Construction Management, Development Review, Plan Check Services, SCADA and related automation support, Water Quality Testing, Engineering/Technical Support, Litigation/Legal Services, Water Conservation Support Services, Water Qualtiy Testing Support Services, NPDES/FOG Inspection Services, Utilities and Refuse Rates and Financial Studies, Billing and Cashiering System Implementation Support, Professional Arborist Services, Traffic Studies, Special Training Services, Biologist Services, Facility Studies/Assessment, Facility Testing and Support Services, Fleet Studies $2,203,700 Non-Departmental Professional services including claims, litigation, auditing, recruitment services, appraisal, economic analysis, legal, housing compliance and other consulting and professional services. $458,966 Total Professional Services $6,048,738 Citywide (All Funds) CITY OF HUNTINGTON BEACH PROFESSIONAL SERVICES FISCAL YEAR 2017/18 HB -295-Item 11. - 31 Iti 17 RESOLUTION NO. 2017-21 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ESTABLISHING THE GANN APPROPRIATION LIMIT FOR FISCAL YEAR 2017/18 WHEREAS, Article 13B of the California Constitution imposes upon state agencies and local governments the obligation to limit each fiscal year's appropriation of the proceeds from taxes to the amount of such appropriations in fiscal year 1978/1979, adjusted for changes as prescribed under the law. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: In compliance with provisions of Article 13B of the California Constitution and the formula set out therein, there is hereby established an appropriation limit of $882,638,091 for the fiscal year 2017/18. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 2017. Mayor REVIEWED AND APPROVED: City Manager Exhibit A — Gann Limit Calculation 17-5799/157956/RLS 5/11/17/PD HB -296-Item 11. - 32 EXHIBIT A GANN LIMIT CALCULATION FISCAL YEAR 2017-2018 Under Proposition 111, there are two options available for each of the major adjustment factors. The values of these factors for the purpose of calculating the Fiscal Year 2017-2018 adjustment are as follows: Price Factor: (A) Percent growth in State per Capita Personal Income: 3.69% (Source: Dept of Finance, California) (B) Percent change in Assessed Valuation due to new non-residential construc -1.85% (Source: Orange County Assessor Prop 111 Report) Population Factor: (C) Percent growth in County Population: 0.69% (Source: Dept of Finance, California) (D) Percent growth in City Population: 0.51% (Source: Dept of Finance, California) Annual Adjustment Factor: Based on the actual data, the four alternative adjustment factors are as follows: (A x C) 1.0369 x 1.0069 =1.0440546 (A x D) 1.0369 x 1.0051 =1.0421882 (B x C) 0.9815 x 1.0069 =0.9882724 (B x D) 0.9815 x 1.0051 =0.9865057 Calculation of the Fiscal Year 2017-2018 Limit FY 16/17 Limit $845,394,563 Recommended Adjustment Factor (Largest Allowable Increase)1.04405461 FY 17/18 Limit $882,638,091 HB -297-Item 11. - 33 Estanislau, Robin From: Sent: To: Subject: Richardson Gray [richardson.gray@yahoo.corn] Thursday, August 17, 2017 11:21 AM Estanislau, Robin Public Comment in Support of Increased Libraries Funding -- City Council Study Session on August 21st, 2018 City Budget Presentation, and City Council Public Hearing on September 5th, 2018 City Budget Dear City Clerk, Robin Estanislau: Please distribute this email to all seven City Council Members for two upcoming City Council Meetings. The first meeting is on August 21st, for Study Session Item Number 1, concerning the 2018 City Budget. The second meeting is on September 5th, for the Public Hearing on the 2018 City Budget. I have owned my home in our Downtown neighborhood for over ten years, since retiring here in 2006. I am writing to all of our City Council Members to urge you to restore our City Public Libraries funding to match its share of the City Budget before the Great Recession. Beginning with the Great Recession, our City made significant cuts to our Public Libraries' funding, and these cut have not yet been fully reversed. Huntington Beach has the largest collection of books in its public libraries of any City in Orange County. As such, our Public Libraries are one of our community's most impressive achievements for the quality of life for our residents. For families and seniors especially, the high quality of the Huntington Beach Public Libraries is a major reason for moving to Huntington Beach, and for then staying here and not leaving. From the perspective of many tens of thousands of our residents, it is crucially important that we maintain and enhance the quality of our City's Public Libraries in the 2018 City Budget and in the City Budgets throughout all future years. The Huntington Beach Public Libraries' funding still remains significantly below its level before the Great Recession, not accounting for inflation over the last ten years. For all of these reasons, I urge you to begin moving toward restoring our City's Public Libraries to a funding level that matches the share of the City Budget that our Public Libraries garnered before the Great Recession. As a telling example in 2011, 63% of the voters in the City of Los Angeles approved Measure L, a referendum adopting a comparable policy for reversing Great-Recession cuts to Los Angeles' public libraries funding. A similar effort for the Huntington Beach Public Libraries is one of the most important things that our Council can accomplish to maintain and enhance our City's residential quality of life. Thank you for considering my views. And I hope that you will do all that you can to support the wonderful Huntington Beach Public Libraries. Richardson Gray 415 Townsquare Lane #208 Huntington Beach, CA 92648 714-348-1928 (cell) richardson.grayvahoo.com SUPPLEMENTAL COMMUNICATION Meeting Date: 9IS117 Agenda Item No.. 1 HB -298-Item 11. - 34 Ted Ross 8111 Falmouth Drive Huntington Beach, CA 92646-2015 City of Huntington Beach Office of the City Clerk 2000 Main Street Huntington Beach, CA 92648-2702 Attention: Robin Estanislau, City Clerk RECEIVED 2017 AUG 30 Ph 24 C1T CLERIS CITY OF HUNTINGTON BEA er 8/28/2017 Reference: City of Huntington Beach Proposed Budget for FY 201712018 l am submitting a written evaluation of the Proposed Budget for FY 201712018 in advance of your consideration for Public Comment prior to your September 5, 2017 City Council meeting. • FY 2016/2017 Economic Trends of Concern for Huntington Beach o Sales taxes are showing lower than expected performance by $1.1 M O Parking revenues show erosion of 5.8% o Development activity is down about $1M o Utility User Tax revenues are down about $570,000 Troubling trends for Huntington Beach economic performance when compared to the National economic performance that has Stock Market increases of 10 to 15% • Pension and other fixed costs Increases for FY 2017/2018 o Higher CalPERS Employer Rate Increases o Rising costs for Huntington Beach Litigation expenses; lack of "public oversite" of these growing expenses O General Liability Insurance premiums continue to rise O Largest General Fund (Fire = 20.9% & Police 33.8%) increases! Alarming and out of line with all other city budget challenges • CalPERS Discount Rate Change o CalPERS reduced yet again their estimated earnings rate on their portfolio from 7.5% to 7.0% O CalPERS has had to regularly sell off equities (last 10 years) to meet their current recurring need to pay retirees pensions. Completely out of line with commonly expected good financial practices. Fundamental changes in CalPERS financial management needs to occur immediately. O Added cost to City of $4.5 M to $6 M per year. This cost will increase by approximately $4.5 million every year, for the next five years, due to variables outside the City's control. HB -299-Item 11. - 35 o City forecasts for revenue increases cannot expect to offset these recurrent demands for unplanned increases from CalPERS o CalPERS already talking of future budget impacting adjustments! There is an immediate need to deal swiftly these budget demands before we have to exercise crisis management! Suggest proactive dialog be set up with CalPERS executives and City Senior leadership (as well as proper pre-meeting staff preparations with appropriate CalPERS staff members) • Detailed comments to the City of Huntington Beach Proposed Budget for FY 2017/2018 as submitted by Fred A. Wilson, City Manager: 1. Page XI — Table of General Fund Expenditures for Human Resources and Information Services shows an increase from FY16117 revised to FY 17/18 of $5,677,922 to $5,888,360 or + 2.6% and $6,769,114 to $ 6,955,642 or + 3.1% respectively. Please do not take this as "goring the Holy Cow", but industry has learned decades ago the lessons of savings regarding these two functional areas by in-whole or partially out-sourcing these functions. This enables both personnel salary/benefits savings as well as retirement benefits savings that further aggravate the already sensitive issue of City Unfunded Retirement Liabilities. I strongly suggest that the City Council consider studying the benefits that might be achieved from a fresh look at these functions and how they are provided. Note: current Information Technology Out-sourcing firms not only provide needed expertise, software savings, furnish capital equipment with scheduled refresh rates, Cloud-Back-up off site of all designated critical data as specified in the negotiated contract provisions. 2. Page XVII — Capital Improvement Projects - Seriously question the need for replacement of furniture and audio/visual equipment in the Council Chambers. This, to me as a taxpayer, sounds like a want rather than a need! 3. Page 65 thru 321 — City Staff and Departments show an absence of Fiscal Savings Objectives as flowed to their City's Performance Measurement Program and their Goals and Objectives. This failure seems to continue year after year, as well as, in their proposed FY2017/2018 Goals outlined in their proposed budget sections. I would expect the City Manager to set savings flow-down objectives to his staff, but that doesn't even appear on his objectives. 4. Page 95— City Treasurer Personnel Services shows an increase from FY16/17 revised to FY 17/18 of $183,022 to $208,495 or +13.92%. This seems excessive and without explanation. 5. Page 110 — City Manager Personnel Services shows an increase from FY16/17 revised to FY 17/18 of $1,710,732 to $1,876,734 or + 9.70%. This seems excessive and without explanation. 6. Page 183 — City Finance Department; Cashiering & Collections Services, Personnel Services shows an increase from FY16/17 revised to FY 17/18 of $751,398 to $823,608 or +9.61%. This seems excessive and without explanation. 7. Page 65 thru 321 — City Staff and Departments show what appear to be separate individual departmental Equipment and Supplies purchases as sub-sections of their budgets. If true, savings might well be attained by considering the benefits of a centralized purchasing agreement(s) for these needs. Thus achieving at least an economy of scale in purchasing Equipment and Supplies. Note: The aggregate HB -300-Item 11. - 36 purchases of Equipment and Supplies seem to be much higher than expected for the staff population employed by the city. I would hope that this could be explored further and details of Equipment and Supplies could be broken down into sub-types of materials purchased to truly evaluate largest contributors to this spending. 8. Page 394 - Net Pension Liability; Actuarial Assumptions, Table Titled: Actuarial Methods and Assumptions Used to Determine Total Pension Liability. Investment Rate of Return used out date return of +7.5% (instead of the CalPERS latest +7.0%). The following footnotes states that: "All other actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality, and retirement rates." Since our pension liability is key to the fiscal challenges of our City, I would expect the assumptions of this section to conform to Generally Accepted Accounting Principles (GAAP) of using the current most relevant data and assumptions to support proposed budget positions and not the somewhat stale references sited. 9. Page 395 — Table of long-term expected "real rate of return by asset class" demonstrates the anemic rate of return on CalPERS investment strategy. This can partially be attributed to the "social activism" constraints that are self-inflicted by the California Legislature that cause our investment portfolio assets to underperform as compared to unconstrained market returns in general. 10. Page 409 — Section: Funded Status and Funding Progress. Uses data referenced to the most recent actuarial valuation date of 30 June 2015, I would expect the most recent example referenced of this section to conform to Generally Accepted Accounting Principles (GAAP) of using the current most relevant data and assumptions to support proposed budget positions and not the somewhat stale reference sited. Ted Ross Huntington Beach Resident HB -301-Item 11. - 37 Dept. ID PW 17-048 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: Section 14.54.060 of the Huntington Beach Municipal Code (HBMC) requires the City Council to establish sewer service charges by ordinance. Chapter 14.55 of the HBMC establishes the formula for modifying the charges and codifies an annual increase based on the Consumer Price Index (CPI) increase available in July. The Sewer Service Charge Annual Performance Audit is presented to the City Council as required by HBMC Section 14.54.070. Financial Impact: Sewer Service Fund (511) revenue for Fiscal Year 2017-18 is estimated at $11,101,250 if the CPI adjustment is made to the Sewer Service Charge. Recommended Action: A) Accept the Sewer Service Fund Performance Audit for Fiscal Year 2016-17; and, B) Approve for introduction Ordinance No. 4140, “An Ordinance of the City of Huntington Beach Amending Chapter 14.55 of the Huntington Beach Municipal Code Relating to the Sewer Service Rates Methodology.” (Five affirmative votes are required to adopt this ordinance per Health and Safety Code Section 5471). Alternative Action(s): 1. Do not accept the Sewer Service Fund Performance Audit and direct staff to make specific modifications. 2. Do not adopt Ordinance No. 4140 and suspend the Sewer Service Charge adjustment. 3. Reduce the Sewer Service Charge by a specific percentage. Analysis: The Sewer Service Fund is designated solely for facilities and resources relating to the rehabilitation, replacement, repair and maintenance of City-owned sewers and lift-stations. This is CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Travis K. Hopkins, PE, Director of Public Works SUBJECT: Public Hearing to Consider Accepting the Sewer Service Fund Performance Audit for Fiscal Year 2016-17 and Approve for Introduction Ordinance No. 4140 amending Chapter 14.55 of the Huntington Beach Municipal Code (HBMC) relating to Sewer Service Rates Methodology HB -302-Item 12. - 1 Dept. ID PW 17-048 Page 2 of 2 Meeting Date: 9/5/2017 in accordance with California Health and Safety Code Section 5470, and is included as Chapter 14.54 in the HBMC. Section 14.54.070 Annual Program Review of the HBMC requires an annual review and performance audit of the Sewer Service Fund by the Public Works Commission. The audit was presented to the Commission at the July 19, 2017 meeting. Per the aforementioned section of the Municipal Code, “the City Council shall receive, at a regularly scheduled meeting, the recommendations of the Public Works Commission concerning fees, rates and charges proposed to be modified or added to the Sewer Service User Charge.” In accordance with Section 14.55.030 Annual CPIU Adjustments, each Sewer Service User Charge shall be adjusted to reflect the annual percentage adjustment in the Consumer Price Index for all Urban Consumers (CPIU) in Los Angeles, Orange and Riverside Counties established by the U.S. Bureau of Labor Statistics, available as of July 1, 2017. The CPIU reflects an annual increase of 2.5%. In 2014, the City Council adopted the Sewer Service Fund Reserve Policy. The Reserve Policy requires that $8.25 million be available at the end of the current fiscal year. At this time, the reserves at the end of the current fiscal year are projected to be $18.5 million. However, the City still needs to replace 11 aging sewer lift stations. The current design and construction cost estimate for the replacement of these stations in today’s dollars is approximately $30 million. Additionally, sewer lines in some areas of the City have experienced significant issues with calcification. Calcification is costly to remove and the extent of this issue is not yet known. If not addressed, calcification can lead to the reduction in flow capacity of sewer lines and increase the potential of sanitary sewer overflows. The sewer lateral program has seen an increased demand over the last two fiscal years. Sewer lateral repairs have increased from 285 in 2015 to 319 in 2016 and are on pace for around 350 this year. Although current demand is about half of the FY 2008/09 demand when the program was introduced, it is possible that these expenses will continue to increase. A rate analysis on both water and sewer rates is currently underway. A recommendation to modify rates will be made when the analysis is complete. If Ordinance No. 4140 is adopted, the rate adjustment would go into effect on October 18, 2017. Environmental Status: Not Applicable Public Works Commission Action The Public Works Commission voted 3-1 to recommend to the City Council to approve the Performance Audit and retain the programmed 2.5 percent rate adjustment at their July 19, 2017 regular meeting. Strategic Plan Goal: Enhance and maintain infrastructure. Attachment(s): 1. Annual Sewer Service Fund Performance Audit for Fiscal Year 2016-17 2. Ordinance No. 4140, “An Ordinance of the City of Huntington Beach Amending Chapter 14.55 of the Huntington Beach Municipal Code Relating to the Sewer Service Rates Methodology” HB -303-Item 12. - 2 July 2017 - 1 - City of Huntington Beach Public Works Department Sewer Service Fund Performance Audit Review of Fiscal Year 2016/17 Introduction On September 4, 2001, the Huntington Beach City Council adopted a Sewer Service User Charge and created the Sewer Service Fund. The Sewer Service Fund revenue is designated solely for the rehabilitation, replacement, repair and maintenance of City- owned sewers and lift stations. This is in accordance with the California Health and Safety Code Section 5470, and is included in the ordinance that adds Chapter 14.54 to the Huntington Beach Municipal Code. The ordinance established the Huntington Beach Public Works Commission as both the oversight committee and the final appeals board. The Sewer Service Fund shall be subject to an annual review and performance audit by the Public Works Commission. The information presented in this report complies with Section 14.54.070 Annual Program Review. In addition, the City Council shall receive, at a regularly scheduled meeting, the recommendations of the Public Works Commission concerning fees, rates and charges proposed to be modified or added to the sewer service user charge. A public hearing on proposed charges will be held annually in conjunction with the City’s annual budget process and hearing. Program Overview  Scheduled maintenance projects and minor emergency repairs will be completed within the allotted budget.  Closed Circuit Television (CCTV) Inspection and cleaning of sewer mains.  Operations and maintenance of the City’s 27 sewer lift stations.  Capital improvements including lift station design and construction work and the sewer lining program.  A Sewer Lateral Program was added effective January 3, 2008, and the sewer service charge was adjusted to cover the projected expenses. The program transferred the responsibility to the City for sewer lateral repairs within the City- owned right-of-way. Initially, the cost of the program exceeded the additional revenue generated by the adjustment to the sewer service user charge. Costs for this program have decreased significantly since its inception. HB -304-Item 12. - 3 July 2017 - 2 -  The City Council adopted a reserve policy for enterprise funds in FY 14/15. The reserve policy for the Sewer Service Funds states that the City will maintain a reserve equal to the sum of the following: o Operations and Maintenance: Thirty-three percent (33%) of the adopted annual budget to ensure adequate working capital for operating expenses. This amount is $2.6 million. o Capital Improvement Program (CIP): One-hundred percent (100%) of the average annual planned Capital Improvement Program for the following five years. This amount is $2.65 million. o Emergency: an amount equal to the estimated cost, as determined by the City Engineer, to replace one sewer lift station. This amount is $3.0 million. o The total reserve would amount to $8.25 million.  The Municipal Code states that the Consumer Price Index for Urban Consumers (CPIU) in Los Angeles, Orange, Riverside Counties established by the Bureau of Labor Statistics that is available July 1 shall be used to calculate adjustments to sewer service rates. Review of Fiscal Year 2016/17 Personnel and operating expenditures account for approximately seventy percent (70%) of the Fiscal Year 2016/17 Sewer Service Fund budget and are directed toward preventative and routine maintenance. The budget includes salaries and benefits, sewer line maintenance, CCTV pipeline and lateral inspection, lift station services, manhole upgrades, the sewer lateral program and cost allocation charges to the City’s General Fund. The balance of the expense budget is earmarked for capital equipment replacement and capital projects, including slip lining, pipeline rehabilitation, and lift station replacement. In general, the Sewer Maintenance Section of the Utilities Division expends the operating and equipment replacement budgets, and the Engineering Division is responsible for the implementation of capital projects. Sewer Lining: A $350,000 11,339 linear feet sewer lining project was completed this year. Sewer Lift Station: Design of the Edgewater Sewer Lift Station was completed with construction to occur in FY 2017/18. Maintenance Activities: Totals for various maintenance activities are presented below. CCTV Inspection: The sewer system is inspected through the use of Closed Circuit Television inspection. A contractor was employed during this last fiscal year to video inspect portions of the sewer system’s main collection lines located in the City’s HB -305-Item 12. - 4 July 2017 - 3 - arterial and high traffic volume streets. City crews video inspect the sewer mains located in residential areas and low traffic volume streets. Sewer Line Maintenance  Routine cleaning of 1,562,410 linear feet of sewer pipe.  Removal of 4,651 pounds of debris/grit during routine cleaning.  Cleaned 225 enhanced cleaning areas (areas of sewer line cleaned from two times to twelve times per year) for a total of 521,210 linear feet through June.  The Fats, Oils and Grease (FOG) program has cleaned 11,458 linear feet of sewer line around food service establishments and other areas with high grease concentrations.  Applied root control to 26,250 linear feet of sewer line.  Sewer lateral repair program received and resolved 352 requests for repair to date.  Inspected via Closed Circuit Television (CCTV) 164,528 linear feet of residential sewer lines and arterial mains.  Lined 976 linear feet 15-inch sanitary sewer on Warner Avenue from Marina View Pl. to Algonquin St. Manhole Maintenance  Cleaned and inspected 8,856 manholes.  Repaired and recoated 28 manholes.  Sprayed insecticide for roaches in 224 manholes. Sewer Lift Station Maintenance  Inspected 27 lift stations three times a week and cleaned each station every two months.  Cleaned and inspected the 56 check valves at the sewer lift stations every two months.  Replaced 3 check valves.  Replaced 2 gate valves.  Disassembled and rebuilt 15 sewer pumps.  Cleaned 51 sewer lift station wet wells.  Replaced 5 motors. Emergency Response  0 Public Sanitary Sewer Overflows (SSO) to date, 16 Private Lateral Spill discharges to date.  281 service requests from the public during business hours.  62 after hours lift station alarms and failures.  120 after hours call outs for miscellaneous sewer related problems.  17 emergency sewer line point repairs. HB -306-Item 12. - 5 July 2017 - 4 - Sewer Lateral Program Under the Sewer Lateral Program, the City assumed responsibility for the repair of all sewer laterals from the City-owned sewer main through the public right-of-way to the private property line. The property owner remains responsible for all costs of repair and maintenance of that portion of the sewer lateral on private property. This program is response driven as all work orders are generated in response to calls from residents and businesses. Expenditures on the Sewer Lateral Program have decreased significantly since the program was initiated in Fiscal Year 2008/09. Staff had previously budgeted for the Sewer Lateral Program based on the expenditures in the first two years of the program. However, following reductions in calls after the first three fiscal years of the program, staff reduced the budget. Demand had leveled off from 2011/12 to 2014/15, but has seen an uptick the last two fiscal years. $0  $500,000  $1,000,000  $1,500,000  $2,000,000  $2,500,000  2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Sewer Lateral Expenditures HB -307-Item 12. - 6 July 2017 - 5 - FY 2016/17 Projected Expenditures Personnel Original Budget Revised Budget* Projected Salaries, Permanent $2,198,299 $2,198,299 $1,659,290 Salaries, Temporary $55,450 $55,450 $33,960 Salaries, Overtime $82,500 $82,500 $110,512 Benefits $1,189,954 $1,189,954 $1,032,685 Total Personnel $3,526,203 $3,526,203 $2,836,437 Operating Utilities $110,000 $110,000 $108,000 Equipment and Supplies $348,350 $448,389 $221,000 Repairs and Maintenance $1,621,000 $1,648,615 $1,726,468 Conferences and Training $4,000 $4,000 $9,300 Professional Services $260,000 $902,244 $196,880 Rental Expense $3,500 $3,500 $6,000 Interdepartmental Charges $1,670,961 $1,670,961 $1,670,961 Expense Allowance $5,800 $5,800 $5,800 Total Operating $4,023,611 $4,793,509 $3,944,409 Capital Equipment $0 $470 $470 Vehicles $0 $200,181 $200,181 Total Capital $0 $200,651 $200,651 CIP Improvements $1,520,000 $4,134,493 $666,121 Total CIP $1,520,000 $4,134,493 $666,121 Total $9,069,814 $12,654,856 $7,647,618 *Revised Budget includes funds carried over from prior fiscal year HB -308-Item 12. - 7 July 2017 - 6 - FY 2016/17 Projected Revenues Source FY 15/16 FY 16/17 Actual Projected Customer Charges $10,846,356 $10,831,455 Interest $161,566 $166,850 Other $435,120 $17,394 Total $11,433,032 $11,015,699 Projected FY 2016/17 Fund Balance Beginning Balance 10/1/2016 $22,047,153 Projected Revenues FY 16/17 $11,015,699 Proposed Expenditures FY 16/17 ($7,647,618) Estimated GASB Adjustment ($6,886,667) Projected End Balance 9/30/2017 $18,528,567 Proposed FY 2017/18 Budget Sewer Service User Charge Adjustments In accordance with Section 14.55.030 Annual CPIU Adjustments, each Sewer Service User Charge shall be adjusted to reflect the annual percentage adjustment in Consumer Price Index for all Urban Consumers (CPIU) in Los Angeles, Orange and Riverside Counties established by the U.S. Bureau of Labor Statistics and available as of July 1 of each year. The purpose for annual adjustment of the rates is to ensure that the revenues continue to fully fund the needs of the program. To accommodate the billing system, all service charge rates are calculated to four decimal places, and charged on a daily factor. The daily factor converts the monthly charge based on a 365-day year. This is a modification from the initially adopted rate schedule. The customer’s bill reflects a charge based on the number of days between meter readings. A resolution was adopted by the City Council to authorize the daily rate methodology. HB -309-Item 12. - 8 July 2017 - 7 - The percentage adjustment in the CPIU available as of July 1, 2017 for the month of May reflects an annual increase of 2.5%. This percentage adjustment is included as the recommended adjustment to the Sewer Service User Charge effective October 1, 2017. The following table shows the 2.5% increase. For purposes of comparison, the rates represent a monthly charge. Effect of CPI Adjustment on Current Sewer Service Charge Current With CPI Increase Customer Category Charge Type Unit Charge Residential: Single-family & townhouses with individual meters Flat rate for all customers in category per unit per month $10.6923 $10.9596 Apartment: All apartments, mobile homes and townhouses served by common meters Flat rate for all customers in category per unit per month $8.8693 $9.0910 Regular Commercial/Industrial: Most businesses, including private schools Flat rate amount per Equivalent Dwelling Unit (EDU). EDU refers to either (1) the capacity of a customer’s water meter in comparison to a standard ¾ inch meter, or (2) the number of tenant units that receive water service through the water meter, whichever is greater per EDU per month $12.4089 $12.7191 High-Consumption Commercial/Industrial: Businesses with high water consumption relative to their meter size Flat rate per hundred cubic feet (CCF) of estimated sewer discharge per CCF per year $2.3219 $2.3799 Public Schools: All public K-8 and high school districts with schools in the City Flat rate per student per year with a different rate per student for K-8 and for high schools High School per ADA per year $3.4150 $3.5004 ADA - Average Daily Attendance K-8 per ADA per year $2.1991 $2.2541 HB -310-Item 12. - 9 July 2017 - 8 - FY 2017/18 Proposed Budget Personnel Salaries, Permanent $2,117,425 Salaries, Temporary $45,000 Regular Overtime $100,000 Benefits $1,339,318 Total Personnel $3,597,914 Operating Utilities $130,800 Supplies $324,800 Repairs and Maintenance $1,690,000 Conferences and Training $21,500 Professional Services $250,000 Rental Expense $5,000 Cost Allocation $1,721,100 Auto Allowance $5,800 Total Operating $4,148,400 CIP (new) Lift Station (Slater) $1,000,000 Sewer Lining $500,000 Residential Zone Maintenance $30,000 Total CIP $1,530,000 TOTAL $9,276,686 FY 2017/18 Proposed Revenue Customer Charges $10,916,250 Interest $150,000 Other $35,000 Total $11,101,250 HB -311-Item 12. - 10 July 2017 - 9 - FY 2017/18 Projected Fund Balance Projected Beginning Balance 10/1/2017 $18,528,567* Projected Revenues FY 17/18 11,101,250 Proposed Expenditures FY 17/18 ($9,276,686) Projected End Balance 9/30/2018 $20,251,131 FY 2017/18 Capital Projects Lift Stations: Construction is budgeted for the Slater Lift Station in Spring 2018. Sewer Lining: Sewer lining in the amount of $500,000 is programmed in FY 2017/18. A lining project is bid once a sufficient number of sewer defects are identified as part of the CCTV inspection program. *Includes estimated $6,887,667 GASB adjustment. HB -312-Item 12. - 11 ORDINANCE NO. 4140 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING CHAPTER 14.55 OF THE HUNTINGTON BEACH MUNICIPAL CODE RELATING TO THE SEWER SERVICE RATES METHODOLOGY WHEREAS, Huntington Beach Municipal Code Section 14.55.010 provides that each year the sewer service user charge may increase based upon a consumer price index. The following rates reflect said increase. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. Section 14.55.020 of the Huntington Beach Municipal Code is hereby amended to read as follows: 14.55.020 Rates, Charges and Billing Methodology Water customers shall be charged a sewer service user charge at the following rates, as set forth below, based upon sewer charge customer category and cha .ge type. Customer Category Charge Type Unit Charge Residential - Single-family and townhouses with individual meters Flat rate for all customers in category Per unit per month $10.9596 Apartment - All apartments, mobile homes, and townhouses served by common meters Flat rate for all customers in category Per unit per month $9.0910 Regular Commercial/Industrial: Most businesses, including private schools Flat rate amount per Equivalent Dwelling Unit (EDU). EDU refers to either (1) the capacity of a customer's water meter in comparison to a standard 3/4 inch meter, or (2) the number of tenant units that receive water service through the water meter, whichever is greater Per EDU per month $12.7191 17-5964/163808/my 1 HB -313-Item 12. - 12 ORDINANCE NO. 4140 Customer Categoiy Charge Type Unit Charge High-Consumption Commercial/Industrial: Businesses with high water consumption relative to their meter size Flat rate per hundred cubic feet of estimated sewer discharge Per CCF per year $2.3799 Public Schools - All public K-8 and high school districts with schools in the City Flat rate per student per year, with a different rate per student for K-8 and for high schools. High School: per ADA per year. $3.5004 ADA - Average Daily Attendance K-8: per ADA per year $2.2541 SECTION 2. This Ordinance shall become effective 30 days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 2017 Mayor REVIEWED AND APPROVED: / INITIATED AND PPROVED: City Manager C----Director of Publi Works 17-5964/163808/my 2 ATTEST: City Clerk HB -314-Item 12. - 13 LEGISLATIVE DRAFT HBMC Section 14.55.020 14.55.020 Rates, Charges and Billing Methodology Water customers shall be charged a sewer service user charge at the following rates, as set forth below, based upon sewer charge customer category and charge type. Customer Category Charge Type Unit Charge Residential - Single-family Flat rate for all customers Per unit per $10.692310,9596 and townhouses with individual meters in category month Apartment - All Flat rate for all customers Per unit per $8.86939,0910 apartments, mobile homes, and townhouses served by common meters in category month Regular Flat rate amount per Per EDU per $12.108912,7191 Commercial/Industrial: Equivalent Dwelling Unit month Most businesses, including private schools (EDU). EDU refers to either (1) the capacity of a customer's water meter in comparison to a standard 3/4 inch meter, or (2) the number of tenant units that receive water service through the water meter, whichever is greater High-Consumption Flat rate per hundred Per I4CCF per $2.32192 3799 Commercial/Industrial: Businesses with high water consumption relative to their meter size cubic feet of estimated sewer discharge year Public Schools - All public Flat rate per student per High School: per $374-1403,5004 K-8 and high school districts with schools in the City year, with a different rate per student for K-8 and for high schools. ADA per year ADA - Average Daily $2.19912,2541 Attendance K-8: per ADA per year (3505-10/01, 3570-10/02, 3614-10/03, 3658-09/04, 3720-09/05, 3794-1/08, 3814-10/08, 3840- 10/09, 3890-10/10, 4074-12/15) 17 -59641163836/mv HB -315-Item 12. - 14 Dept. ID FN17-015 Page 1 of 3 Meeting Date: 9/5/2017 Statement of Issue: A best practice in government finance is for cities to update their user fees and charges on a regular basis. The last comprehensive User Fee Study was completed by the City in 2016. Adjustments to the Citywide Master Fee and Charges Schedule are recommended for approval based on a review performed by City staff and the Finance Commission. Financial Impact: Citywide user fees and charges currently generate approximately $18.8 million in annual All Funds revenue with $18.2 million in the General Fund. In the Adopted General Fund Budget of $220.4 million for FY 2016/17, this represents approximately eight percent of total General Fund revenue. The monies generated by City-wide user fees and charges are used to support many of the services funded through the budget, including public safety which represents 55 cents of every dollar spent in the General Fund. The FY 2017/18 Proposed Budget assumes a net neutral impact from Citywide Fees. However, if adopted as proposed by staff, the updated Schedule may generate up to $133,000 in additional General Fund revenue next fiscal year. Staff recommends this potential revenue increase remain unallocated for the time being to protect against potential revenue shortfalls and/or unanticipated expenditure increases. Recommended Action: A) Conduct a public hearing regarding the Master Fee and Charges Adjustments; and, B) Adopt Resolution No. 2017-46, “A Resolution of the City Council of the City of Huntington Beach Amending Resolution Nos. 2016-59, 2017-28 and 2017-44 Establishing the Consolidated Comprehensive Citywide Master Fee and Charges Schedule (Supplemental Fee Resolution No. 3).” Alternative Action(s): Amend the Master Fee and Charges Schedule and adopt as revised, within legal constraints. CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Lori Ann Farrell Harrison, Chief Financial Officer SUBJECT: Adopt Resolution No. 2017-46 amending Resolution No.’s 2016-59, 2017-28 and 2017-44 establishing the Consolidated Comprehensive Citywide Master Fee and Charges Schedule (Supplemental Fee Resolution No. 3) HB -316-Item 13. - 1 Dept. ID FN17-015 Page 2 of 3 Meeting Date: 9/5/2017 Analysis: Local government operations are primarily funded from taxes, user fees and charges, fines, and grants. The City of Huntington Beach charges fees for providing various services and programs to residents, businesses operating in the City, and visitors. These fees include providing cultural and recreational activities, issuing building permits, activating residential water and sewer accounts, conducting inspections of commercial buildings to ensure fire safety and compliance with local and State building codes and regulations, and many other services. In some cases, fees are charged at full-cost recovery for providing services. In other cases, fee recovery is less than 100 percent, which can be due either to market conditions, government mandated caps or the recognized benefit of subsidizing certain programs to the community. As a general rule, the City may not recover from service users more than the cost incurred to provide the service pursuant to State law. Revenue received from fees is deposited into the applicable funds including: the General Fund, Water Fund, CUPA, and other Funds of the City. In order to establish fees on the basis of full-cost recovery, it is necessary to first determine the cost of services. To ensure appropriate fee amounts are being assessed, the City employed the assistance of a professional fee study and cost allocation plan consultant, NBS. Based on the results of that study, the City Council reviewed and approved adjustments to multiple fees and created a Consolidated Master Fee and Charges Schedule on November 7, 2016. Finance Commission – As part of the City Council approval of the Citywide Master Fee and Charges Schedule, the Finance Commission was asked to review the proposed changes to coincide with the annual budget development process. At the regularly scheduled meetings of the Finance Commission held on July 26, 2017, and August 23, 2017, proposed adjustments to the Master Fee and Charges Schedule were reviewed and discussed. The Finance Commission recommends increasing certain fees to 100% cost recovery as shown in Exhibit A and phasing-in other fee increases to 100% cost recovery over a two-year period. Charges for Services - Charges for recreation/cultural programs collected by the Community Services Department are not limited to the cost of service, but rather are set at the discretion of the City. Many of these programs have recommended fees that are below the 100 percent cost recovery threshold. The practice of supporting certain social, cultural, and recreational programs allows for the continued provision of affordable recreational and cultural services to the residents of Huntington Beach, while maintaining consistency with current market rates for similar services in neighboring cities. Fees for the Adventure Playground are recommended to increase by $1.00 from $3.00 to $4.00 per person. It is also recommended the Surf Class Parking Pass be revised from $5.00 per year to $5.00 per semester. Fire Department Life Safety Inspection and State Mandated Inspection Fees - Fees represent charges to recover costs of city services pertaining to life safety inspections for businesses and State mandated inspections for hotels, motels, and multifamily units. As with user fees, 100 percent cost recovery is the goal for certain inspection fees so that the General Fund does not subsidize services that have a largely private benefit. The amount charged cannot exceed the actual cost of providing the services. In order to mitigate the impact of changes to fire life safety inspection fees, it is proposed to have a “phased” implementation for smaller businesses. While the goal is to eventually reach 100 percent cost recovery, the phased-in implementation would allow for that goal to be reached over a two- year period. HB -317-Item 13. - 2 Dept. ID FN17-015 Page 3 of 3 Meeting Date: 9/5/2017 Electric Vehicle Charging Station Rate - The City of Huntington Beach offers 12 Electric Vehicle (EV) charging stations at various locations throughout the city. The City currently charges $0.22 per kWh for use of the stations. Staff is recommending to increase the rate to $0.29 per kWh to fully cover the costs associated with the EV charging stations’ usage. The costs include electricity and other costs charged to the City. The City’s cost of electricity per kWh is approximately $0.16. The remaining $0.13 per kWh is derived from costs paid to ChargePoint, a third party vendor that maintains the charging terminals, provides network service, and administers the program. Conclusion - The fee study conducted in 2016 allows the City to capture and calculate cost information needed to adjust fees and to determine the full cost of providing certain services. Overall, the recommended changes on Exhibit A will reduce the subsidy from the General Fund in Fiscal Year 2017/18 and the City could experience a revenue enhancement of $133,000 this next fiscal year should the recommended fees and charges be adopted by the City Council. With implementation of the annual review of the Citywide Master Fee and Charges Schedule during the annual budget making process, all fees at less than 100 percent cost recovery can be revised to generate additional revenue if needed, and charges can be evaluated to ensure alignment with market conditions. A Master Schedule also helps to promote the annual review process due to the simplicity of the format and the ease of reviewing one Master Schedule and one Resolution (versus numerous schedules and resolutions) further promoting best practices and providing the public greater transparency into the fee setting process. If approved by the City Council, adjustments to the Citywide Master Fee and Charges Schedule will become effective 60 days after City Council adoption, or November 5, 2017. Environmental Status: Not applicable. Strategic Plan Goal: Improve Quality of Life Enhance and Maintain Infrastructure Strengthen Economic and Financial Sustainability Enhance and Maintain Public Safety Enhance and Maintain City Service Delivery Attachment(s): 1. Resolution No. 2017-46, “A Resolution of the City Council of the City of Huntington Beach Amending Resolution Nos. 2016-59, 2017-28 and 2017-44 Establishing the Consolidated Comprehensive Citywide Master Fee and Charges Schedule (Supplemental Fee Resolution No. 3).” 2. Public Hearing Notifications. HB -318-Item 13. - 3 City Attorney y\ Chief FinanCiai-Officer RESOLUTION NO. 2017-46 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AMENDING RESOLUTION NOS. 2016-59, 2017-28 AND 2017-44 ESTABLISHING THE CONSOLIDATED COMPREHENSIVE CITYWIDE MASTER FEE AND CHARGES SCHEDULE (SUPPLEMENTAL FEE RESOLUTION NO. 3) WHEREAS, the City Council adopted Resolution 2016-59 establishing the Consolidated Comprehensive Citywide Master Fee and Charges Schedule (the "Fee And Charges Schedule"); and The City Council temporarily amended the Fee And Charges Schedule pursuant to Resolution No. 2017-28, and further amended the Schedule pursuant to Resolution No. 2017-44; and The City Council desires to update the Fee and Charges Schedule; and The City Council had reviewed the Citywide User Fee and Rate Study conducted by NBS (the "Fee Study") in support of Resolution No. 2016-59. In the case of the Fire Department fees F-99 through F-103, and F-124 identified in Exhibit A to this Resolution, the City Council established the fees at less than the 100% cost recovery the Fee Study recommended. The City Council desires to increase said fees to no more than full cost recovery; and The City Council further desires to increase the Community Services Department charges for entrance to or use of City property identified at Exhibit A to this Resolution; and The City Council further desires to add the Electric Vehicle Charging Rate to Exhibit A to this Resolution. The Charging Rate is set at the average cost of electricity to the City; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Huntington Beach adopts the Fees and Charges in the Recommended Fee Level column attached in Exhibit A, which shall become effective sixty (60) days following the adoption of this Resolution, and continue thereafter. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 2017. Mayor REVIEWED AND APPROVED: City Manager 17-5974/164226/SFF HB -319-Item 13. - 4 EXHIBIT A Master Fee and Charges Schedule FY 17-18 Adjustments No. Description Current Fee Recommended Fee Level % Cost Recovery [27] new [26] Commun ty Services Department Charge Adventure Play Ground - Residents $3.00/person $4.00/person 100% Charge Adventure Play Ground - Non Residents/Groups $3.00/person $4.00/person 100% Charge Surf Class Parking Pass $5.00/year $5.00/semester 100% Public Works Department Charge Electric Vehicle Charging Rate $0.22/kVVh $0.29/kWh 100% Fire Department FIRE / LIFE SAFETY INSPECTION F-99 Up to 750 sq. ft $ 45 $ 60 75% F-100 751 - 2,500 sq. ft $ 60 $ 90 75% F-101 2,501 - 5,000 sq. ft. $ 131 $ 170 85% F-102 5,001 -25,000 sq. ft. $ 209 $ 273 85% F-103 25,001 - 50,000 sq. ft. $ 470 $ 563 100% STATE MANDATED INSPECTIONS Hotel, Motel & Multifamily Inspections F-124 per additional unit over 3 units 1 $ 1.33 100% • -- F-99 ..___ [27] New - Multi-tenant commercial/industrial inspection is conducted for common fire features that are the responsibility of the building complex, mall owner or management company including egress, sprinklers, alarms, private fire hydrants, and emergency access. F-124 [26] Revised - Includes fire and life safety inspection for common and commercial areas. If the structure meets the definition of "high rise," the "high rise" fee applies in lieu of this fee. F-241 Fire Plan Review Inspection Specific Events 5,001-25,000sf Event Area Note [20] Revised - One temporary operational permit included. Each additional operational permit is billed at the adopted rates. 8/23/17 HB -320-Item 13. - 5 PUBLIC HEARING CITY OF HUNTINGTON BEACH • . Notice of Public Hearing on the Adoption of Resolutions Amending the ComprehemSiv Schedule Including City User Fees, Rates/Charges, and Development Fees Notice is hereby given that a public hearing will be held by the City Council of the City of Huntington Beach, in the Council Chambers of the Civic Center, Huntington Beach located at 2000 Main Street, at the hour of 6:00 PM, or as soon as possible thereafter on Tuesday, the 5th day of September 2017, for the purpose of considering the Adoption of Resolutions Amending the Comprehensive Fee Schedule including City User Fees, Rates/Charges, and Development Fees. The revisions to be considered are for cost recovery purposes and to set charges for public access and use of certain City property for the purpose of raising revenue and fall under the responsibility of the following City Departments: • Community Services Department • Fire Department • Public Works Department All interested persons are invited to attend to express their opinions for, or against, the proposed fee revisions with written or oral comments. Written communications to the City Council should be mailed to the Office of the City Clerk at the address below. Further information may be obtained from the Finance Department, 2000 Main Street, Huntington Beach, CA, 92648-2702 or by telephone (714) 536-5630. The City of Huntington Beach endeavors to accommodate persons of handicapped status in the admission or access to, or treatment or employment in, city programs or activities. The City of Huntington Beach is an equal opportunity employer. Dated: August 17,2017 City of Huntington Beach August 24, 2017 By: Robin Estanislau, City Clerk 2000 Main Street Huntington Beach, CA 92648-2702 Telephone: (714) 536-5405 http://huntingtonbeachca.gov/hbpubliccomments Published: The Huntington Beach Wave August 17, 24, 2017 10994769 HB -321-Item 13. - 6 Dept. ID AD-17-024 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: Huntington Beach Hospital is a non-profit that provides a disproportionate share of healthcare services to the Medicare and Medicaid populations, in addition to supporting many programs that benefit the indigent, uninsured or underinsured populations in Huntington Beach. The new CEO of the Hospital reached out to the City to ask if the City would opt into the 340B program which would enable the Hospital to participate in a low- cost drug program that benefits the aforementioned populations. This Council Action seeks to enter into a no-cost Memorandum of Understanding that allows the Hospital to take part in a drug discount program. Financial Impact: There is no fiscal impact as this is a no-cost Memorandum of Understanding. Recommended Action: Authorize the Mayor and City Clerk to execute the Memorandum of Understanding (MOU) between the City and Huntington Beach Hospital for the 340B Program. Alternative Action(s): Do not approve the Memorandum of Understanding (MOU) between the City of Huntington Beach and the Huntington Beach Hospital and direct staff accordingly. Analysis: Created in 1992, the 340B Program works with manufacturers to provide outpatient drugs to covered hospitals (e.g. Huntington Beach Hospital) at significantly reduced prices. The intent of the program is to maintain services and lower medication costs for patients. In order for the Hospital to participate in this Program, the Hospital must enter into an agreement with a unit of the state or local government pursuant to which the Hospital commits to provide health care services to low-income individuals who are not entitled to Medicare or Medicaid benefits - at no reimbursement or considerably less than full reimbursement from these patients. By entering into this MOU, the Hospital agrees to continue its commitment to the provision of health care to indigent, uninsured, and CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Antonia Graham, Assistant to the City Manager SUBJECT: Approve a Memorandum of Understanding (MOU) between the City and Huntington Beach Hospital to enable the Huntington Beach Hospital to participate in the 340B Program HB -322-Item 14. - 1 Dept. ID AD-17-024 Page 2 of 2 Meeting Date: 9/5/2017 underinsured residents of Huntington Beach and Orange County. The Hospital wishes to enter into this Program in order to maintain current levels of service to uninsured, underinsured, and indigent patients. The savings from this program are roughly eleven (11) percent greater than those obtained through the Medicaid Rebate Program. Environmental Status: Not applicable. Strategic Plan Goal: Improve quality of life Attachment(s): 1. Memorandum of Understanding between the City of Huntington Beach and Huntington Beach Hospital 2. Office of Pharmacy Affairs (OPA) Certification of Contract Between Private, Non- Profit Hospital and State/Local Government to Provide Health Care Services to Low Income Individuals HB -323-Item 14. - 2 MEMORANDUM OF UNDERSTANDING BETWEEN City of Huntington Beach AND Huntington Beach Hospital, a not-for-profit Disproportionate Share Hospital THIS NO-COST MEMORANDUM OF UNDERSTANDING is made this 1s I day of August 2017 by and between the undersigned representatives of the City of Huntington Beach, located at 2000 Main Street, Huntington Beach, CA 92648, Huntington Beach Hospital a non-profit corporation organized and existing under the laws of the State of California, located at 17772 Beach Blvd., Huntington Beach, CA 92647 RECITALS: WHEREAS, Huntington Beach Hospital is a not-for-profit hospital that provides a disproportionate share of healthcare services to the Medicare and Medicaid populations in addition to supporting many programs that benefit the indigent, uninsured or underinsured populations in Huntington Beach CA; WHEREAS, Huntington Beach Hospital desires to participate in the drug discount program established under Section 34013 of Public Health Services Act (the "34013 program"); WHEREAS, in order to participate in the 340B Program Huntington Beach Hospital must enter into an agreement with a unit of the state or local government pursuant to which Huntington Beach Hospital commits to provide health care services to low income individuals who are not entitled to Medicare Or Medicaid benefits at no reimbursement or considerably less than full reimbursement from these patients; WHEREAS, Huntington Beach Hospital desires to make such a formal commitment to the City of Huntington Beach. WHEREAS, the City of Huntington Beach agrees to accept such commitments on behalf of Orange County/Huntington Beach residents; NOW, THEREFORE, in consideration of the mutual agreements and covenants contained therein and for other good valuable consideration, the receipt and sufficiency of which hereby are acknowledged, it is mutually agreed and covenanted, under seal, by and between the parties to this Agreement, as follows: HB -324-Item 14. - 3 1. Commitment of Hunt'neon Beach Hospital to Provide Uncompensated Care. During the term of this MOU, Huntington Beach Hospital agrees to continue Us commitment to the provision of health care to indigent, uninsured and underinsured residents of Huntington Beach and Orange County, CA through the operation of its Uncompensated Care Program and maintain its current eligibility standards. In fiscal year 2016, this commitment totaled $5,274,949 in uncompensated care as reported on the latest Medicare Cost Report. Care provided under this program is inclusive of the scope of services provided by Huntington Beach Hospital, including but not limited to emergency care, general outpatient care, including ambulatory surgery and all levels of inpatient care. Pursuant to this commitment, it is the intention of Huntington Beach Hospital to continue providing this level of service regardless of patients' ability to pay. Huntington Beach Hospital is entering the 340B Drug Discount Program in order to maintain current levels of service to uninsured, underinsured and indigent patients. A study by Moody's Investors Service published in June 2015 found that Medicaid Expansion under the Affordable Care Act is having a minimal affect on hospital financial viability given other financial pressures, especially on non-profit hospitals. Payer restrictions and accelerated drug costs increases are major factors. Generic drug prices are also rising at an alarming rate. Huntington Beach Hospital will include 340B drugs for its Medicaid Payors and thereby pass on 340B savings to California's Medicaid Program. 340B savings are roughly 11% greater than those obtained through the Medicaid Rebate Program. This pass-through of 340B savings is not applicable to contract pharmacy arrangements because of 340B requirements. 2. Commitment of Huntinaton Beach Hospital to Submit Reports of Benefit to Residents of Orange County. During the term of this MOU, Huntington Beach Hospital agrees to submit to the City of Huntington Beach relevant sections of the latest annual Medicare Cost Report after audit and acceptance by the CMS Fiscal Intermediary. This report will be submitted within 30 days after notification of acceptance of the annual Medicare Cost Report by Fiscal Intermediary. Costs of care for Orange County/Huntington Beach and California residents will be specified within the report. HB -325-Item 14. - 4 3. Acceptance and Acknowledeements of the City of Huntineton Beach. (a) City of Huntington Beach accepts the commitments of Huntington Beach Hospital set forth above; (b) City of Huntington Beach hereby acknowledges that the healthcare services provided by Huntington Beach Hospital hereunder are in the public interest and are being provided to individuals who are not entitled to benefits under Title VII or eligible for assistance under any State plan pursuant to Title XIX of the Social Security Act: and (c) City of Huntington Beach acknowledges that Huntington Beach Hospital is providing these services at no reimbursement or considerably less than full reimbursement from the patients. 4. Representations of Hospital: Huntington Beach Hospital represents that as of the date hereof: (a) Huntington Beach Hospital constitutes a corporation duly organized and validly existing in good standing under the laws of the State of California with the corporate power and authority to enter into and perform its obligations under this MOU; and (b) Huntington Beach Hospital is a tax-exempt corporation under Section 501 (c)(3) of the Internal Revenue Code of the United States, as amended, and under applicable laws of the State of California. 5. Term and Termination. The term of this MOU shall commence on the date first above written shall continue until terminated by either party upon not less than sixty (60) days prior written notice to the other. MOU shall be reviewed and in the absence of identified threshold issues, automatically reviewed on an annual basis. 6. Notices. All notices required or permitted to be given under the MOU shall be deemed given when delivered by hand or sent by registered or certified mail, return receipt requested, addressed as follows: 7. Governine Law. This MOU shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Huntington Beach Hospital and the City of Huntington Beach have executed this Agreement as of the day and year first written above by their duly authorized representatives. HB -326-Item 14. - 5 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers on , 2017. CONSULTANT, CITY OF HUNTINGTON BEACH, HUNTINGTON BEACH HOSPITAL, a municipal corporation of the State of California a not-for-profit corporation By: Mayor print name ITS: (circle one) Chairman/President/Vice President ATTEST: AND City Clerk By: print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary - Treasurer INITIATED AND APPROVED: Assistant to the City Manager /REVIEWED AND APPROVED: City Manager HB -327-Item 14. - 6 Department of Health and Human Services, Health Resources and Services Administration, Healthcare Systems Bureau OMB No. 0915-0327, Expirat on Date 10/312015 OFFICE OF PHARMACY AFFAIRS (OPA) CERTIFICATION OF CONTRACT BETWEEN PRIVATE, NON-PROFIT HOSPITAL AND STATE/LOCAL GOVERNMENT TO PROVIDE HEALTH CARE SERVICES TO LOW INCOME INDIVIDUALS To demonstrate that the hospital meets the statutory definition of covered entity under section 340B(a)(4)(L)(i) as a private non-profit hospital which has a contract with a State or local government to provide health care services to low income individuals, thls certification must be completed and signed by both parties. \It Ming-60 eituu)n ik-40 Name of Hoipital 6elith ) ell 612047 City, StateZip Pursuant to the requirement of Section 340B of the Public Health Service Act (42 U.S.C. 256b), I certify that a valid contract (please provide contract number or identifier if applicable # ) is currently in place between the private, non- profit hospital named above, and the State or Local Government Entity named below, to provide health care services to low income individuals who are not entitled to benefits under Title XVIII of the Social Security Act or eligible for assistance under the State plan of Title XIX of the Social Security Act. In addition, the authorizing official certifies that when this contract is no longer valid, appropriate notice will be provided to the Office of Pharmacy Affairs. The undersigned represents and confirms that he/she is fully authorized to legally bind the covered entity and certifies that the contents of any statement made or reflected in this document are truthful and accurate. Signature of Hospit11uthorizipg Official D BarkiAlrirl-VOzjjy 1 i pfisiq k:141 Nam g and Title of Authorizing Official (e. g, CEO, CFO, COO) (please print or type.,) tir g(43- s Foto 13-Fenrids0A n erieAvA rintoe _cowl Ext. E-Mail Address Siwatyre of State or l_ocal Government Official 160XPAY4 Deft?' i-e Ile.- i Ncie of State or Lolal,Goyern l ent Official (please print or type) WI FIlbi 1 CAI 11( itiOni, n fi.tdin . Title arid Unit of Government I aup o i,litift Wei+ 114 Yliitn Vaal tOR AgtO tW Addres.q tlill) cao -S'SG3 be rbaret . Phone Number Ext. E-Mail Address aiL/1 Phone Number Date This registration Farm must he completed and submitted according us the established deadlines that are published on the °PA skehmie hrsa.goviopa) HB -328-Item 14. - 7 Dept. ID FD17 008 Page 1 of 2 Meeting Date: 9/5/2017 Statement of Issue: The City Council is requested to adopt an ordinance amending Municipal Code Title 15, regarding oil well abandonment requirements. The new Ordinance will allow for safe development over or near oil wells that do not meet the current California Division of Oil, Gas and Geothermal Resources (DOGGR) standard. Financial Impact: Not applicable. Recommended Action: Approve for introduction Ordinance No. 4138, “An Ordinance of the City of Huntington Beach Amending Sections 15.08.010 and 15.32.090 through 15.32.120 of the Huntington Beach Municipal Code Relating to Development of Property With Abandoned Oil Wells, and Amending Related Definitions in the Municipal Code.” Alternative Action(s): Do not introduce the Ordinance and direct staff accordingly. Analysis: In an effort to assist and facilitate development in the community with safe methods to build over or adjacent to abandoned oil wells, a modification to Municipal Code Title 15 is proposed as contained in Section #4 of the Ordinance. DOGGR is the governing agency for all oil well abandonments in the state. Beginning progressively since 2010, their oil well abandonment standards have been applied more uniformly. Prior to 2010, DOGGR reviewed abandonments on a case-by-case basis, which allowed wells that could not be cleared to the bottom to obtain final approval letters of abandonment even though the wells were missing specified plugs. The current DOGGR standard requires plugs at specific depths regardless of the well’s history or production zones. If one or more of the plugs are not appropriately placed, then the abandonment will not meet the current DOGGR standard. It is not uncommon to have difficulty reaching the bottom of an abandoned well since it may be lodged with obstructions. The existing Municipal Code Title 15 requirement (15.32.090) does not allow for development or redevelopment if the oil wells on the parcel are not abandoned to the current DOGGR standard. CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/5/2017 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: David A. Segura, Fire Chief SUBJECT: Approve for introduction Ordinance No. 4138 amending Municipal Code Title 15 regarding oil well abandonment requirements HB -329-Item 15. - 1 Dept. ID FD17 008 Page 2 of 2 Meeting Date: 9/5/2017 The attached Ordinance (Attachment 1) will modify Title 15 to potentially allow development over or near oil wells that do not meet the current DOGGR standard, incorporating specified safeguards. A legislative draft is attached, showing all revisions to the Ordinance (Attachment 2). The ordinance references oil well abandonment criteria contained in Huntington Beach Fire Department (HBFD) City Specification (CS) #422, Oil Well Abandonment Permit Process (Attachment 3). With assistance from DOGGR and two of the City’s environmental engineering consulting firms, CS #422 has been revised to be consistent with Title 15. The revised CS #422 requires the developer to submit an engineering report to the HBFD detailing why and how it would be safe to develop the property if an oil well was not abandoned to the current DOGGR standard. The HBFD will review each oil well abandonment engineering report to determine if the parcel is safe to develop. The HBFD will retain the services of a third party consultant, of the City’s choice, to assist in reviewing the report and accompanying documents, and the owner shall pay all fees for the consultant. The language of this alternate method is directly incorporated into the ordinance to clarify the intent. The types of safety factors used to review the oil well abandonment include: • Location and size of abandonment plugs • Reason the well abandonment did not meet current DOGGR standards • Additional mitigation measures (e.g. methane barrier, detection and alarm system, etc.) • Location of building(s) in respect to the oil well If the oil well abandonment review is found to be satisfactory, the property owner shall fully execute and record an Environmental Release and Indemnity Agreement in the format required by the City of Huntington Beach. Sections #1, 2, 3 and 5 of the Ordinance provide for language clarification and for consistency with Section #4. If the City Council approves the Ordinance, a second reading will be scheduled for the City Council meeting on September 18, 2017, at which time adoption will also take place. If adopted, the ordinance will be effective October 18, 2017. Environmental Status: None. Strategic Plan Goal: Enhance and maintain public safety. Attachment(s): 1. Ordinance No. 4138, “An Ordinance of the City of Huntington Beach Amending Sections 15.08.010 and 15.32.090 through 15.32.120 of the Huntington Beach Municipal Code Relating to Development of Property With Abandoned Oil Wells, and Amending Related Definitions in the Municipal Code.” 2. Legislative Draft 3. City Specification #422, Oil Well Abandonment Permit Process HB -330-Item 15. - 2 ORDINANCE NO. 4138 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING SECTIONS 15.08.010 AND 15.32.090 THROUGH 15.32.120 OF THE HUNTINGTON BEACH MUNICIPAL CODE RELATING TO DEVELOPMENT OF PROPERTY WITH ABANDONED OIL WELLS, AND AMENDING RELATED DEFINITIONS IN THE MUNICIPAL CODE The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. The Definition of "Division of Oil and Gas" at Section 15.08.010 of the Municipal Code is amended to read as follows: "DOGGR" shall mean the Division of Oil, Gas and Geothermal Resources of the Department of Conservation of the State of California." SECTION 2. The Definition of "Properly Abandoned Well" is deleted from Section 15.08.010 of the Municipal Code. SECTION 3. The phrase "DOGGR" shall replace the phrase "Division of Oil and Gas" at Municipal Code Sections 15.04.040, 15.04.045, 15.12.020, 15.12.040, 15.12.060, 15.12.170, 15.20.010, 15.20.050, 15.20.100, 15.20.130, 15.20.150, 15.20.160, 15.22.020, 15.24.070, 15.32.010, 15.32.035, 15.32.050, 15.32.090, 15.40.050, and 15.50.020. SECTION 4, Sections 15.32.090 through 15.32.100 of the Huntington Beach Municipal Code are amended to read as follows: "15.32.090 Abandonment Requirements—Development or Redevelopment A. No building or grading permit may be issued for property upon which there are any active or abandoned Wells without the approval of the Fire Code Official. To obtain the approval of the Fire Code Official, the property owner or designee must submit an application to the Fire Department for review and approval prior to issuance of any building or grading permit. The Fire Code Official will not approve the application unless: 1. Each Well on the property is abandoned or reabandoned to current DOGGR standards, except as provided at Subsection (B) below; and, 2. Each Well on the property complies with all Federal, State and City laws, including Fire Department City Specification No. 422, dated June 2017. B. If DOGGR determines that the Well cannot be abandoned to its current standards, the Fire Code Official may still authorize issuance of the building and/or grading permit for the property if the Official finds each of the following for each abandoned Well: 1 SF:16-5481/159051.doc HB -331-Item 15. - 3 ORDINANCE NO. 4138 The property owner shall obtain, at his sole cost, a report from a California licensed professional engineer or geologist qualified and experienced with oil well abandonment. Prior to obtaining the report, the property owner shall obtain written approval from the Fire Code Official of the engineer or geologist charged with drafting the report. The engineer's or geologist's report shall advise at a minimum that: a. As abandoned, the Well will not pose any significant risk to the public health, safety or welfare. b. The Well is a safe distance for any existing or proposed structures or improvements. G. Any abandonment or mitigation conditions that should be imposed on the Well abandonment as conditions of development of the property. 2. The Well owner has constructed and installed any venting plan and/or additional measures the engineer or geologist recommends to protect the public health, safety and welfare. 3. The Well complies with Fire Department City Specification No. 422, dated June 2017. 4. The Owner has executed and recorded against the property an environmental disclosure, release and indemnity agreement providing that the property owner and his assignees, release, indemnify and hold harmless the City against any and all claims, obligations, and causes of action of any kind or nature whatsoever, known or unknown, for personal injury or death, property damage, economic loss, and fines and penalties. The City Attorney shall approve the form of the disclosure and indemnity agreement. C. Existing producing Wells which will remain in service after the completion of the development or redevelopment of the property are exempt from these requirements. 15.32.100 Abandonment Procedures The procedures set forth in Huntington Beach City Specification No. 422, dated June 2017 shall he followed throughout the abandonment process. In addition to these requirements, the responsible party must submit an application to the Fire Department for review and approval for each well which is to be abandoned. Such application shall contain the date the abandonment work will commence. Once all necessary permits and approvals have been obtained, abandonment work may commence on or subsequent to the date so stated. SECTION 5. Sections 15.32.110 through 15.32.120 of the Huntington Beach Municipal Code are deleted. SF:16-5481/159051.doc 2 HB -332-Item 15. - 4 ORDINANCE NO. 4138 SECTION 6. This Ordinance shall become effective 30 days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 2017. Mayor ATTEST: City Clerk REVIEWED AND APPROVED: City Manager APPROVED AS TO FORM: SE16-54811159051.doc 3 HB -333-Item 15. - 5 LEGISLATIVE DRAFT 1113MC Section 15.08.010 15.08.010 Definitions The terms used in this title shall, unless the context indicates otherwise, have the respective meanings herein set forth. "Abandonment" shall mean operations on any well which will bring the well to the level of compliance defined below under "properly abandoned well," and the cleaning and restoration of the well site as required by the Huntington Beach Oil Code. "Approved type" and "approved design" shall mean and include improvements, equipment or facilities of a type or design approved by the Community Development Department, Fire Department, or Public Works Depattment. "Blowout preventer" shall mean a mechanical, hydraulic, pneumatic or other device or combination of such devices, secured to the top of a well casing, including valves, fittings, and control mechanism connected therewith which can be closed around the drill pipe or other tubular goods which completely closes the top of the casing and is designed for preventing blowout. "Cellar" shall mean an excavation around and above the top joint of the casing of a well. Completion of Drilling, Redrilling and Reworking. Drilling, redrilling and reworking is completed for the purpose of these regulations 30 days after the drilling, redrilling or reworking crew has been released through completion of its work or released by those so employing said crew. "Department," unless specified otherwise in this title, shall mean the Fire Department. "Derrick" shall mean any portable framework, tower, mast, or structure which is required or used in connection with drilling, reworking, operating, or maintaining a well for the production of oil, gas, or other hydrocarbons from the earth. "Desertion" shall mean the cessation of operation at a drill site without compliance with the provisions of this title relating to suspended operations, idle wells, or abandonment. "Developed area" shall mean: 1. Any area within 150 feet of an occupied residential, commercial, or office/professional structure which is itself within 100 feet of another occupied residential, commercial, or office/professional structure; or 2. Any area within a public park, beach or recreation area which has been developed and opened for public use. "Divisiowof-Oil-and-GasDOGGR" shall mean the Division of Oit nn-d-Gas and Geothermal Resources of the Department of Conservation of the State of California. "Drilling" shall mean digging or boring for the purpose of exploring for, developing, or producing oil, gas, or other hydrocarbons, or for the purpose of injecting water, steam or any other fluid or substance into the earth. 16-5481/163105/sf HB -334-Item 15. - 6 "Drilling equipment" shall mean the derrick, together with all parts of and appurtenances to such structure, every piece of apparatus, machinery, or equipment used or erected or maintained for use in connection with drilling. "Drill site" shall mean the premises used during the drilling or reworking of a well or wells located thereon. "Enhanced recovery" shall mean any production method which involves the injection of water, gas, steam, or any other substance into the earth for the purpose of extracting oil or other hydrocarbons. "Fluids" shall mean any gas or liquid. "Gas" shall mean any fluid, either combustible or noncombustible, which is produced in a natural state from the earth and which maintains a gaseous or rarefied state at standard temperature and pressure conditions. It shall also mean the gaseous components or vapors occurring in or derived from petroleum or natural gas. "Injection well" shall mean a well or gas well used for the purpose of injecting water, wastewater, brine, hydrocarbons, steam or any other substance as a means of enhanced recovery, repressurization or disposal whether under pressure, gravity, or vacuum. "Lessee" shall mean the person who has executed an oil or gas lease or sublease, or the owner of the land or minerals, or his or her heirs, or who conducts Or carries on any oil or gas exploration, development and operation thereof, or any person so operating for him or herself or others. "Lessor" shall mean the owner of surface or mineral rights who has executed a lease, "Maintenance" shall mean and include the repair or replacement of machinery, equipment, apparatus, structure, facility, and parts thereof, used in connection with an oil operation site or drill site as well as any other work necessary to reduce fire hazards or any hazards to employees, public health, safety and welfare. "Multiple well site" shall mean two or more wells within a fenced surface area primarily used for the drilling and production of oil. Where two wells are separated by a developable parcel, they will be considered separate sites unless both are enclosed by the same perimeter fence. "New well" shall mean a new well bore or well hole established at the ground smface and shall not include redrilling or reworking of an existing well. An abandoned well shall be considered a new well for purposes of drilling, redrilling, or reworking. "Oil field recovery heater" shall mean any steam generator, or air or water heater used in an oil field thermal recovery operation. "Oil operation" shall mean the use or maintenance of any installation, facility or structure used, either directly or indirectly, to carry out or facilitate one or more of the following functions: drilling, redrilling, reworking and repair, production, processing, extraction, enhanced recovery, stimulation, abandonment, storage or shipping of oil or gas from the subsurface of the earth. "Oil operation site" shall mean the physical location where oil operations are conducted except for any portion of the property which the surface owner is actively using for another purpose. 16-5481/163105/sf 2 HB -335-Item 15. - 7 "Operator" shall mean any person drilling, maintaining, operating, pumping, or in control of any well. However, if the operator, as herein defined, is different from the lessee under an oil or gas lease of any premises affected by the provisions of this title, then such lessee shall also be deemed to be an operator. In the event that there is no oil or gas lease relating to any premises affected by this title, the owner of the fee estate in the premises shall also he deemed an operator. Outer Boundary Line. Where several contiguous parcels of land in one or different ownerships are operated as a single oil or gas lease or operating unit, the term "outer boundary line" shall mean the exterior limits of the land included in the lease or unit. In determining the contiguity of any such parcel of land, no street, road or alley lying within the lease or unit shall be deemed to interrupt such contiguity. "Owner" shall mean a person who owns a legal or equitable title in and to the surfaces of the drill site or oil operation site. "Processing" shall mean the use of oil operations for gauging, recycling, compressor repressuring, injection, reinjection, dehydration, stimulation, separation (including but not limited to, separation of liquids from gas), shipping and transportation, and the gathering of oil, gas, other hydrocarbon substances, water or any combination thereof. perly-ahan catisfaction of the State Oil and Gus Supervisor that all prop isolate all oil-h derground on or ce, and to prevent subsequent damage to lifc, health, ion of the Firo Chief, the site-has been -Festered according to the pfevisions set forth in this-Gode, "Redrill" shall mean recompletion of an existing well by deepening or sidetrack operations extending more than 150 feet from the existing well bore. "Reworking" shall mean recompletion of an existing well within the existing bore hole or by deepening or sidetrack operations which do not extend more than 150 feet from the existing well bore, or replacement of well liners or casings. "Source of ignition" shall mean any flame, arc, spark or heated object or surface capable of igniting liquids, gases or vapors. "Subsidence" shall mean the settling or sinking of the ground surface. "Sump" shall mean any surface impoundment or excavated depression in the ground, lined or unlined, that is used for separating crude oil or other organic liquids, water, or solids. Sumps shall be classified as follows: 1. Primary or first stage production sump is any sump which receives a stream of crude oil and produced water directly from oil production wells, field gathering systems, or tank systems, 2. Secondary or second stage sump is any sump which receives a wastewater stream from one or more primary sumps, a free water knockout device, a wash tank, or from intermittent or emergency streams. 16-5481/163105/sf 3 HB -336-Item 15. - 8 3. Tertiary or third stage sump is any sump which receives a wastewater stream from the secondary sump or other separation process upstream of the tertiary sump. "Tank" shall mean a container, covered or uncovered, used in conjunction with the drilling or production of oil, gas, or other hydrocarbons for holding or storing fluids. "Well" shall mean any oil or gas well or well drilled for the production of oil or gas, or any well reasonably presumed to contain oil or gas. "Well" shall include injection wells used for the purpose of enhanced recovery, repressurization of the field, and disposal wells for the purpose of disposing of wastewater. "Well servicing" shall mean the maintenance work performed within any existing well bore which does not involve drilling, redrilling or reworking. (3037-5/90) 16-5481/163105/sf 4 HB -337-Item 15. - 9 LEGISLATIVE DRAFT HBMC Section 15.04.040 15.04.040 Oil Committee—Authorization and Duties The City Council may from time to time appoint, on an ad hoc basis, an oil committee which shall include, but is not limited to, the following: a member of the City Council, a member of the Planning Commission, the City Attorney, Fire Chief, Director of Community Development, or the duly authorized agents of such members, a representative of the Western Oil and Gas Association, and a member of the Independent Oil Producers Association. A representative of the California Division of Oil and GasDOGGR. may be requested to serve as an ex officio member of the committee. The committee shall act as an advisory body to the City Council with regard to the contents of this code and its revision. The City Councilinember serving on the committee shall serve as the committee chair. (3037-5/90) 16-5481/16311I/SF HB -338-Item 15. - 10 LEGISLATIVE DRAFT HBMC Section 15.04,045 15.04.045 Subsidence Committee—Authorization and Duties The City Council may appoint a subsidence committee which shall include, but not be limited to, the following: a member of the City Council, a representative of the Huntington Beach Fire Department, a representative of the California Division of Oil and GasM_Q_Ca„ a City geologic consultant, a representative of the Independent Oil Producers Association, and a representative from the major oil producing companies operating in the City and the subsidence areas. The City Councilmember may also serve as the chair of this committee. The committee will endeavor to make recommendations to the Fire Chief for the control of subsidence, and the Fire Chief will require mitigating actions to control subsidence and its negative effects. The City will endeavor to perform or cause to be performed on at least an annual basis a leveling survey of land within the City boundaries and the subsidence areas, and the results of this survey shall be provided to the subsidence committee members. This committee will evaluate the results of the surveys and the effectiveness of anti-subsidence measures which are in effect, and will formulate additional recommendations for subsidence control. (3037-5/90) 16-5481/163112/SF HB -339-Item 15. - 11 LEGISLATIVE DRAFT HBMC Section 15.12.020 15.12.020 Drilling or ReddBing Permit Drilling or redrilling shall not be commenced unless or until: A. A copy of approval for such operations from the Division of Oil and GaDDOGOR is submitted to the Fire Chief; and B. A permit for such operations has been obtained from the Fire Department. Said permit is herein referred to as a "drilling permit." (3037-5/90) HB -340-Item 15. - 12 LEGISLATIVE DRAFT HBMC Section 1.5.12.040 15.12.040 Annual Permit—Additional Requirements A. Fencing. Beginning July 1, 1983, an annual permit shall not be issued for any well in a developed area, as defined in this title, which is not enclosed by a fence which conforms to the specifications contained in Chapter 15.22 of this title, and the regulations of the Division of-Oil-iniEl-GasD.,(KaR, as contained in the California Administrative Code as they presently exist or may hereafter be amended. The Fire Chief may grant an extension of six months so that fencing requirements may be met if the area has become developed since the issuance of the last annual permit. B. Landscaping. Beginning July 1, 1983, an annual permit shall not be issued for any well in a developed area, as defined in this title, which has not been landscaped to conform to the requirements of this title and to a landscape plan, submitted for the review and approval of the Fire Chief and the Director of Community Development. The Fire Chief may grant an extension of six months so that landscaping requirements may be met if the area has become developed since the issuance of the last annual permit. Landscaping shall not be required for any well or tank which is not visible from a public street unless the well is within a public park, beach or recreation area which has been developed and open for public use. (3037-5/90) 16-5481/163118/SF HB -341-Item 15. - 13 LEGISLATIVE DRAFT HBMC Section 15.12.060 15.12.060 Reworking Permit Reworking shall not be commenced unless or until: A. A copy of approval for such operation from . a - 'DOGGR is submitted to the Fire Chief; and B. A reworking permit for such operation has been obtained from the Fire Department. (3037-5/90) 16-5481/163123 HB -342-Item 15. - 14 LEGISLATIVE DRAFT HBMC Section 15.12.170 15.12.170 Effect of Suspension or Revocation of Permit No person shall carry on any operations performed under the terms of any permit during any period of permit suspension or revocation, or pending a judgment of the court of law upon any application for writ taken to review the decision or order of the City in suspending or revoking such permit; provided, however, that nothing therein contained shall be construed to prevent the performance of such operation as may be necessary in connection with a diligent and bona fide effort to cure and remedy the default or violation for which the suspension or revocation of the permit was ordered, or such operation as necessary for the safety of persons or as required by the Divkion of Oil and-GasDOGGR. (3037-5190) 16-5481/163124/SF HB -343-Item 15. - 15 LEGISLATIVE DRAFT 1-181601C Section 15.20.010 15.20.010 Derricks A. All derricks and portable masts used for drilling or reworking shall meet the standards and specifications of the American Petroleum Institute as they presently exist or may be amended hereafter. B. All drilling, redrilling or reworking equipment shall be removed from the operation site within 30 days following the completion of drilling, redrilling or reworking unless otherwise permitted by e - : -DOGGR. (3037-5/90) 16-5481/163125/SF HB -344-Item 15. - 16 LEGISLATIVE DRAFT HBMC Section 15.20.050 15.20-050 Identification Signs A. An identification sign shall be prominently displayed and maintained in good condition on or in front of the perimeter fence next to the entrance of each well whether producing or not. Such sign shall be of durable material and unless otherwise required by the-Divigieu-of Oil-aRd-GasDOGGR, shall have a surface area of four square feet. The sign shall be lettered with minimum two inch letters and contain the following: 1. Well name and number; 2. Name of operator; 3. Telephone number of two persons responsible for said well who may be contacted in case of an emergency. B. In the event the drill site or leasehold is fenced or walled, all entrances to said drill site or leasehold shall be posted with a like sign. In addition, a readily visible sign of durable material designating the well name and number shall be posted on or near each and every well within the drill site or leasehold. All freestanding signs and any sign larger than four square feet in surface area shall be subject to the provisions of Huntington Beach Municipal Code Article 961. (2491-7/81, 2759-5/85, 3037-5/90) 16-5481/163126/SF HB -345-Item 15. - 17 LEGISLATIVE DRAFT HBMC Section 15.20.100 15.20.100 Oil Operations—Location—Time A. It shall be unlawful for any person to engage in any work whatsoever on any oil operation site within 300 feet of a dwelling unit, church, hospital, rest home, school, preschool, nursery, or other place of public assembly, except in the following situations: I. When such work consists of minimum maintenance or surveillance on the oil operation site and such work is conducted between the hours of 7:00 a.m. and 10:00 p.m.; or 2. In case of emergency; or 3. When so ordered by the Division of Oil and GasDOGGR; or 4. Where the work being so conducted is soundproofed and such soundproofing is approved by the Fire Chief. B. When operations are conducted beyond a distance of 300 feet from the aforementioned facilities, the Fire Chief may, in cases of disturbance such as excessive noise or vibration, require the oil operator to: I. Enclose the derrick and all drilling machinery used in connection with drilling of any well with fire resistant soundproofing material, which shall be maintained in a serviceable condition. No operations other than well logging shall be conducted outside the enclosure; or 2. Enclose all drilling machinery used in connection with the drilling, redrilling, or reworking operations with fire resistant soundproofing material including the drilling mast or derrick, which shall be so enclosed on a minimum of three sides to a height of 20 feet, and conduct no operations between the hours of 10:00 p.m. and 7:00 a.m. with the exception of circulation of fluids and well logging. The Fire Chief may allow other phases of the operation to continue during the restricted hours if, in his or her opinion, the noise is minimal, or if required by the Division of Oil and GasDOGGR, or in the case of emergency. (3037-5/90) 16-5481/163127/SF HB -346-Item 15. - 18 LEGISLATIVE DRAFT HBMC Section 15.20.130 15.20.130 Blowout Prevention In all cases protection shall be provided to prevent blowout during oil operations as required by and in conformance with the requirements of • : - : DOOGR and the safety orders for drilling and production of the State Division of Industrial Safety. Violations of this section shall constitute a misdemeanor punishable as set forth in Chapter 1.16 of the Huntington Beach Municipal Code. (3037-5/90) 16-5481/163128/SF HB -347-Item 15. - 19 LEGISLATIVE DRAFT HBMC Section 15.20.150 15.20.150 Fence Permit Required No fence or wall shall be constructed to enclose any oil well site, oil operation site or drilling island site in whole or in part until a permit therefor shall have been issued by the Community Development Department. As a condition of issuing such permit, the Director of Community Development or the Fire Chief may impose thereon any conditions as are necessary in the interest of the public safety, and such fence or wall shall be constructed in accordance with such conditions. These fence, gate and wall standards may be modified subject to the approval of the Division of Oil an GasDOGGR and the Fire Chief upon a determination by the Fire Chief that alternate means of restricting access have been provided and that said alternate means are as effective or more effective than these fence standards. The provisions relating to dedication of right-of-way and construction of improvements shall not be applicable to the issuance of such permit. All such enclosures shall be subject to the setback requirements contained in this title. (3037-5/90) 16-5481/163130/SF HB -348-Item 15. - 20 LEGISLATIVE DRAFT HBMC Section 15.20.160 15.20.160 Fences All oil operation sites, oil heaters and tanks, and idle wells shall be completely enclosed by a chain link fence, masonry wall, or other approved fencing material according to City requirements in combination with all applicable Division of Oil and-GasDOGGR requirements. A. All chain link fence enclosures shall have a minimum height of six feet, topped with three strands of barbed wire, spaced four inches apart. B. There shall be at least one gated opening for access, placed in a nonhazardous position and said gate(s) shall be kept locked at all times while left unattended by security or service personnel. C. There shall be no opening below the fence greater than four inches. D. Support posts shall be set in concrete and shall be imbedded into the ground to a depth sufficient to maintain the stability of the fence as approved by the Building Division, but in no event less than 12 inches. E. Fencing constructed of individual chain link panels shall be securely latched, pinned or hinged to prevent unauthorized persons from gaining access to such operation or drilling site. F. The chain link fabric shall be 11-gauge galvanized steel and may be coated with vinyl or plastic material. G. Posts and rails shall be standard galvanized, welded pipe. Fences constructed after January 1, 1984 shall use pipe of the following outside diameters: End posts: 2 3/8 Line posts: 1 7/8 Top and bottom rails: 1 3/8 Movable panels around wells shall use 1 3/38 inch galvanized welded pipe for all frame members. H. Al! pipe and other ferrous parts, except chain link fabric, shall be galvanized inside and outside. I. Tension rods shall be 3/8 inch round steel bolt stock. Adjustable tighteners shall be turnbuckle or equivalent having a six inch minimum take-up. Tension bars shall have a minitnum thickness of 1/4 x 3/4 inch. (3037-5/90) 16-5481/163131/SF HB -349-Item 15. - 21 LEGISLATIVE DRAFT HBMC Section 15.22.020 15.22.020 Screening—Drilling, Redrilling and Activation Within 60 days of completion of drilling or redrilling, or within 60 days of activation of an idle well if such well is located in a developed area, as defined in this title, such well shall be screened by a fence enclosure which conforms to the requirements of this chapter, the provisions set out elsewhere in this code, and the regulations of the Division of Oil and Gas-DOGGR contained in the California Administrative Code as they presently exist or may hereafter be amended, (3(Y37- 5/90) 16-5481/163132/SF HB -350-Item 15. - 22 LEGISLATIVE DRAFT HBMC Section 15.24.070 15.24.070 Gas Emission or Burning Prohibited No person shall allow or cause or permit gases from production operations to be vented into the atmosphere or to be burned by open flame except as provided by law or as permitted by the 1)()__ and the appropriate air pollution control district. (3037-5/90) 16-5481/163133/SF HB -351-Item 15. - 23 LEGISLATIVE DRAFT HBMC Section 1532.010 15.32.010 Production Report—Filing Dates All well operators shall file with the Fire Department, during the first 30 days of each quarter, for the last preceding calendar quarter, a statement in such form as the Fire Chief may designate, showing: A. The amount of oil and gas produced from each well during the period indicated and the number of days during which fluid was produced from each well. B. The number of wells drilling, reworking, producing, idle, and owned or operated by such person. C. In lieu of the above, the operators may submit to the Fire Chief copies of DOGGR Form 110 report, as submitted to the Stnte Division of Oil and Gar,DOGGR. D. Owners or operators of all oil and/or natural gas wells, oil or natural gas storage facilities, or oil or natural gas transportation equipment shall be required to meter fluids produced or transported as ordered by the Fire Chief to verify production of wells under the jurisdiction of the City of Huntington Beach. E. The Fire Chief may require any additional actions he or she determines necessary for verification of well production. (3037-5/90) 16-5481/163134/SF HB -352-Item 15. - 24 LEGISLATIVE DRAFT HBMC Section 15.32.035 1$.32.035 Production Standards A. Any well which does not produce in any calendar quarter at least 90 barrels of crude oil or other hydrocarbon substances, or at least 100,000 cubic feet of natural gas, shall be declared "nonproducing." If such well fails to produce the required amounts for two successive calendar quarters, it shall be declared idle. The following classifications of wells are EXEMP ED from these minimum production requirements: 1. Wells which are part of an identified and legitimate "enhanced recovery project"; 2. Wells which are part of a City authorized consolidated recovery project; 3. Wells utilized for the injection of fluids; 4. Wells deemed by the Fire Department and the Division of Oil-and GasDOGGR to be necessary to prevent the dangerous repressurization of a mineral field; 5. Wells which, to the satisfaction of the Fire Chief, are demonstrated to have a legitimate future use as a part of an enhanced recovery project or consolidation project. B. The Fire Chief may suspend minimum production requirements during periods of extremely low market prices for crude oil or natural gas. Wells will be exempt from production standards for each calendar quarter or portion Thereof for the duration of such periods. C. All wells which are exempted from production standards for any reason must be shown to be mechanically sound, patent, and operable. 16-5481/163136/SF HB -353-Item 15. - 25 LEGISLATIVE DRAFT HBMC Section 15.32.050 15.32.050 Idle Wells When a well is determined to be an "idle" well, the surface area of the well site shall be cleaned pursuant to the following: A. Notice shall be sent by the Fire Chief, by registered or certified mail, to the owner of the fee simple interest in the land on which such well is situated as shown on the last equalized assessment roll, and to the owner of the mineral rights on which such well is situated as shown on the last equalized assessment roll, and to the operator of such well as indicated on either the records of the State Division of Oil and GasDOGGR, Department of Conservation or the records of the Fire Department. Once the notice is sent, the well or wells specified therein may not be activated unless the requirements of Chapter 15.40 of this code are adhered to and satisfied. B. The notice shall indicate the name and location of the well in question and a statement by the Fire Chief of the reasons why such well is an idle well, as defmed in this title. (3037- 5/90) 16-5481/163137/SF HB -354-Item 15. - 26 LEGISLATIVE DRAFT HBMC Section 15.32.090 15.32.090 Abandonment Requirements—Development or Redevelopment from these requirements. (3037-5/90) A. No building or grading permit may be issued for property upon which there are any active or abandoned Wells without the approval of the Fire Code Official. To obtain the approval of the Fire Code Official, the property owner or designee must submit an application to the Fire Department for review and approval prior to issuance of any building or grading permit. The Fire Code Official will not approve the application unless: Each Well on the property is abandoned or reabandoned to current DOGGR standards, except as provided at Subsection (B) below; and, 2. Each Well on the property complies with all Federal, State and City laws, including Fire Department City Specification No. 422, dated June 2017. B. If DOGGR determines that the Well cannot be abandoned to its current standards, the Fire Code Official may still authorize issuance of the building and/or grading permit for the property if the Official finds each of the following for each abandoned Well: The property owner shall obtain, at his sole cost, a report from a California licensed professional engineer or geologist qualified and experienced with oil well abandonment. Prior to obtaining the report, the property owner shall obtain written approval from the Fire Code Official of the engineer or geologist charged with drafting the report. The engineer's or geologist's report shall advise at a minimum that: a. As abandoned, the Well will not pose any significant risk to the public health, safety or welfare. b. The Well is a safe distance for any existing or proposed structures or improvements. c. Any abandonment or mitigation conditions that should be imposed on the Well abandonment as conditions of development of the property. 16-5481/163138/SF HB -355-Item 15. - 27 2. The Well owner has constructed and installed any venting plan and/or additional measures the engineer or geologist recommends to protect the public health, safety and welfare. 3. The Well complies with Fire Department City Specification No. 422, dated June 2017. 4. The Owner has executed and recorded against the property an environmental disclosure, release and indemnity agreement providing that the property owner and his assignees, release, indemnify and hold harmless the City against any and all claims, obligations, and causes of action of any kind or nature whatsoever, known or unknown, for personal injury or death, property damage, economic loss, and fines and penalties. The City Attorney shall approve the form of the disclosure and indemnity agreement. C. Existing producing Wells which will remain in service after the completion of the development or redevelopment of the property are exempt from these requirements. 16-5481/163138/SF HB -356-Item 15. - 28 LEGISLATIVE DRAFT FISMC Section 15.40.050 15.40.050 Test Permit A. At the request of the applicant and prior to the issuance of the activation permit, the Fire Chief may grant a test permit for a period not to exceed 90 days. This test permit is to authorize the applicant to operate the well on a test basis to determine if said well is capable of producing in the quantities specified in this code. B. The test permit shall not be issued unless the drill site and oil operation is in compliance with all the provisions of this title and other applicable provisions of the Huntington Beach Municipal Code except that equipment, materials and operations necessary for the conducting of the test shall be permitted. C. Should the well fail to produce oil, gas or other hydrocarbon substances within the 90 day period in a manner sufficient to demonstrate that it is capable of producing the quantities specified in this code, the applicant shall abandon the well within 180 days from the issuance of the test permit in accordance with the regulations of the Division of Oil and GasDOGGR and this title. (3037-5/90) 16-5481/163139/SF HB -357-Item 15. - 29 LEGISLATIVE DRAFT HBMC Section 15.50.020 15.50.020 Abandonments The sealing and abandonment of existing wells which will be replaced by the project shall be completed within 18 months of the date of commencement of drilling operations for the consolidation project. All abandonments shall be done according to the requirements of the Divisiefi-of-Gil-antl-GasDOGGR and the City of Huntington Beach. (3037-5/90) 16-5481/163140/SF HB -358-Item 15. - 30 LEGISLATIVE DRAFT HBMC Section 15.32,100 15.32.100 Abandonment Procedures The procedures set forth in Huntington Beach City Specification #Number 422. date June 2017 shall be followed throughout the abandonment process. In addition to these requirements, the responsible party must crlesubmit an application to. - -on a Well" (Fire Isoartrfteit the Fire Department for review and approval for each well which is to be abandoned. Such noticoapplication shall contain the date the abandonment work will commence. Once all necessary permits and approvals have been obtained, abandonment work may commence on or subsequent to the date so stated. (3037-5/90) 16-5481/1.63141/SF HB -359-Item 15. - 31 LEGISLATIVE DRAFT HEIMC Section 15.32.110 The abandonmentof a well shall not be app site has been restored aceo A. The derrick an B. All tanks, tow 14-41-nd-other-fereign a multiple-well aries shall be removed and atifee-43E-GPAIOSEe -0E1 ecordance with all local-,--ce (3037 5/90) 16-54811163143/SF HB -360-Item 15. - 32 LEGISLATIVE DRAFT 1-11311C Section 15.32.120 16-5481/163498/SF HB -361-Item 15. - 33 HBMC Section 1532.120 mated within 10 feet of, or over, any Geennnedate -sueh4eeetielevelop-ment Silesifteatie Fire Chief to b (3037 5190) LEGISLATIVE DRAFT 16-5481/163147/SF HB -362-Item 15. - 34 City Specification No. 422 Reference to HBMC Section 15.32.090 Huntington Beach Fire Department Oil Well Abandonment Permit Process Before any oil well abandonment operations are commenced, the State of California Division of Oil, Gas and Geothermal Resources (DOGGR) must be contacted, and the following processes initiated: • For all sites undergoing development, the owner must complete and submit a Well Review Program Introduction and Application to the DOGGR. At completion of the DOGGR review, a Well Review Letter will be issued to the owner. • The well operator must submit an application to abandon or re-abandon each oil well to the DOGGR when the well is not abandoned to the current DOGGR standards, or when the well casing will be modified. The DOGGR will then issue a permit that sets forth their agency requirements and conditions. The DOGGR Well Review Letter (if applicable) and abandonment permit must be presented to the Huntington Beach Fire Department (HBFD) in order to obtain a Fire Department permit for well abandonment. The HBFD permit authority on well abandonment includes top plate inspection, methane leak test, backfill / grading and land use / development as per Sections 3, 4, 5, and 6 in this City Specification. REQUIREMENTS 1. PERMITS 1.1 The well operator or well abandonment contractor must submit a Fire Construction Permit Application (FD042) to the HBFD for each oil well being abandoned. Two (2) copies of a site plan must also be provided, with building locations, well location, Geographical Information System (GIS) coordinates for well, American Petroleum Institute (API) number, well name, well operator, property owner and any other pertinent information. 1.2 If explosives are to be used at any stage of the abandonment process, the abandonment contractor must obtain an Operational Permit by completing the Fire Code Permit Application (FD114) and submitting to the HBFD prior to use of explosives. Once plan approvals and permits have been obtained as required by Sections 1.1 and 1.2 above, abandonment work may commence. JUNE 2017— REPLACES FEBRUARY 2010 PAGE 1 OF 4 SAFMT1Fire Prevention ManuallCity Specs\City Spec 422.docFIVMFire Prevention \City Specs\City Spec 422.doc HB -363-Item 15. - 35 Oil Well Abandonment Permit Process CITY SPECIFICATION NO 422 2. OIL WELL (DOWN HOLE) ABANDONMENT 2.1 An oil well shall be abandoned per the current DOGGR standards. The well operator must do everything reasonable and feasible to properly abandon the well, including completing the abandonment of the well in compliance with an alternative abandonment plan coordinated and approved by the DOGGR. 2.2 When the required down hole well work is complete and all records received, the DOGGR will issue a Report of Well Abandonment (Form 0G159) to the applicant. A copy of the DOGGR issued report for each well shall be submitted to the HBFD prior to the oil well abandonment permit final inspection approval. 3. PRIOR TO BACKFILLING THE EXCAVATION 3.1 Welding of the Metal Top Plate 3.1.1 The metal top plate shall be the same thickness or thicker than the casing it is attached to and must be welded by a licensed welder. 3.1.2 The plate shall have three, 2 inch welds and shall be free of any nipples and/or valves. Full circumference (100%) welding of the top plate is not permitted. 3.1.3 Termination of the top plate and metal casing shall be a minimum of 6 feet and a maximum of 10 feet below final grade. 3.1.4 The following information shall be placed on the top plate surface with welding rod: • API number • Well name • Date welded 3.2 Fire Department Inspection and Gas-Test 3.2.1 The Fire Department must observe the methane gas-test at the well head prior to welding the top plate. The top plate shall be welded immediately after gas- test completion in the presence of the HBFD Inspector. 3.2.2 The gas-test equipment is required to have been calibrated within the previous 12 months and a copy of the calibration test provided at the inspection. 3.2.3 Results of the gas-test must be provided to the HBFD for review prior to final permit approval. 3.2.4 Methane levels at the top plate cannot exceed site specific background levels. JUNE 2017— REPLACES FEBRUARY 2010 PAGE 2 OF 4 SAFMTWire Prevention ManuallCity Specs\City Spec 422.docFMT1Fire Prevention\City Specs\City Spec 422.doc HB -364-Item 15. - 36 Oil Well Abandonment Permit Process CITY SPECIFICATION NO. 422 3.2.5 Inspections must be scheduled at least 2 business days in advance by calling the HBFD at (714) 536-5411. 4. BACKFILL & GRADING 4.1 All grading associated with well abandonment shall be performed in accordance with City grading and excavation codes. 4.2 Each excavation must be back-filled and compacted in lifts no greater than 8 inches. 4.3 Back-fill material must be clean and free of debris, in compliance with City Specification No. 431-92, Soil Quality Standard. 4.4 All lifts shall be compacted to a minimum of 90 percent relative compaction, in compliance with American Society of Testing & Materials standards. 4.5 Copies of compaction reports shall be submitted to the HBFD at completion of grading, prior to oil well abandonment permit final inspection approval. 5. LAND USE / DEVELOPMENT 5.0 To develop a parcel that contains an oil well, all oil wells must be abandoned or re- abandoned when the wells are not abandoned to the current DOGGR standard. Sections 5.1 and 5.2 provide options for development based on the abandonment outcome. 5.1 If the oil well abandonment is approved to current standards by the DOGGR, there is no restriction to development location. A copy of the Report on Well Abandonment (0G159) must be provided to the HBFD for review prior to precise grade or building plan approval. 5.2 If the oil well abandonment is not approved to current standards by the DOGGR, Land Use / Development may still occur, subject to the following requirements and approval by the HBFD: 5.2.1 The well operator must provide a copy of the Report on Well Abandonment (0G159) to the HBFD. 5.2.2 The property owner shall provide a report from a California licensed Professional Engineer or Geologist that is experienced in well abandonment. The licensed Professional must be approved by the HBFD. The report shall include the following: 5.2.2.1 Detailed abandonment procedure. 5.2.2.2 Reason for failure to meet the DOGGR standards. 5.2.2.3 Additional mitigation measures, if proposed. JUNE 2017— REPLACES FEBRUARY 2010 PAGE 3 OF 4 &TM -I-Wire Prevention IVianual1City SpecslCity Spec 422.docFMTIFire PreventionlCity Specs\City Spec 422.doc HB -365-Item 15. - 37 APPROVED: CITY SPECIFICATION NO. 422 Oil Well Abandonment Permit Process 5.2.3.4 Recommendation as to safe proximity of buildings on the property to the oil well. Recommendation must also include an affirmative statement that the abandoned well will not pose any significant risks to public health or safety. 5.2.3.5 The report shall be stamped, wet signed and dated by the licensed professional. 5.2.3 The property owner shall fully execute and record an Environmental Release and Indemnity Agreement in the format required by the City of Huntington Beach Attorney. 5.2.4 Upon receipt of the reports required in 5.2.1 and 5.2.2, and receipt of the Indemnity Agreement required in 5.2.3, the HBFD will conduct a review. If the HBFD finds the well abandonment safe for the proposed land use I development, a letter will be issued with the requirements for approval of precise grade and building plans. The HBFD shall retain the services of a third party consultant of the City's choice to assist in reviewing the report / documents, and the owner shall pay all fees for the consultant. 5.3 Prior to the issuance of precise grade or building permits, former oilfield properties shall conform to City Specification No. 429, Methane Mitigation Requirements, and City Specification No.431-92, Soil Quality Standard. 6. CONTAMINATION 6.1 If, during any of the oil well abandonment or project development processes, any previously unknown oil well or soil contamination is discovered, the DOGGR and the HBFD must be notified immediately. 6.2 If the contamination discovered constitutes a release under Proposition 65, contact the Orange County Health Care Agency immediately and provide notification of the release. DATE: JUNE 2017— REPLACES FEBRUARY 2010 PAGE 4 OF 4 S:1FMTIFire Prevention ManuallCity Specs\City Spec 422.docFMTIFire Prevention \City SpecslCity Spec 422.doc HB -366-Item 15. - 38