MODESTO CITY COUNCIL RESOLUTION NO

Transcription

1 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION OF INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR THE SHACKELFORD LANDSCAPE AND LIGHTING DISTRICT, AND SETTING A PUBLIC HEARING ON THE PROPOSED ASSESSMENTS TO BE HELD ON AUGUST 8, 2012 WHEREAS, on June 29, 1999, the County of Stanislaus ("County") formed the Shackelford Landscape and Lighting District ("Shackelford LLD") for the purpose of administering the maintaining seventy-seven (77) 200-watt high-pressure sodium streetlights, and WHEREAS, the Shackelford LLD was formed in accordance with the Landscaping and Lighting Act of 1972 (Streets and Highways Code Sections through 22679), and WHEREAS, the Shackelford LLD is comprised of approximately 153 acres, includes 496 lots with both residential and commercial development, and is bounded by Crows Landing on the west, E. Hatch Road on the south, Union Pacific Railroad on the east, and State Route 99 on the north, and WHEREAS, on February 22, 2012, the Stanislaus County Local Agency Formation Commission ("LAFCO") approved the annexation of the Shackelford Area to the City of Modesto ("City"), and WHEREAS, on April 24, 2012, the City Council approved the Shackelford Landscape and Lighting District Transfer Agreement between the County and City, and WHEREAS, the City will assume full responsibility and administration of the Shackelford LLD on July 1,2012, and 06112l20121C&EDffRocha/ltem

2 WHEREAS, the City intends to levy and collect assessments within the Shackelford LLD during the fiscal year , and WHEREAS, in compliance with Section of the California Streets and Highways Code and in response to the scheduled transfer of the Shackelford LLD from the County to the City, the Annual Engineer's Report was prepared by the Engineer of Work for the County, and WHEREAS, said annual report was filed with the City Clerk by the Engineer of Work for the City, and WHEREAS, the Council has approved said annual report by motion, and WHEREAS, California Streets and Highways Code Section requires the legislative body (the City Council) to adopt a resolution of intention which shall include the following: a. Declaration of intention of the legislative body (the City Council) to levy and collect assessments within the Shackelford LLD for the fiscal year stated in the annual report. b. General description of the existing improvements and proposed improvements and any substantial changes proposed to be made in the existing improvements. c. Reference to the assessment district by its distinctive designation and indication of the general location of the Shackelford LLD. d. Reference to said annual report, on file with the City Clerk, for a full and detailed description of the improvements, the boundaries of the Shackelford LLD and any zones therein, and the proposed assessments upon assessable lots and parcels ofland within the Shackelford LLD. e. Notice of the time, as fixed by the California Streets and Highways Code Section 22625, and the place for hearing by the legislative body (the City Council) on the levy ofthe proposed assessment. 06f12l2012lC&EDfTRochailtem

3 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that: 1. The City Council acknowledges the transfer of the Shackelford Landscape and Lighting District ("Shackelford LLD") from the County of Stanislaus to the City of Modesto on July 1, The City Council intends to levy and collect assessments within the Shackelford LLD during the fiscal year There are no proposed new improvements or any substantial changes in the existing improvements in the Shackelford LLD and the existing improvements to be made in the Shackelford LLD are generally described as follows: The City shall provide maintenance, operation and servicing, in perpetuity, of streetlights and any and all improvements required for such maintenance including, but not limited to: a. Payment to local utility company for monthly power costs of energizing street lights in the Shackelford LLD. b. Payment to local utility company for maintenance of street lights in the Shackelford LLD that the utility company owns (usually those lights that are mounted on wooden poles). c. Maintenance provided by the City of Modesto for street lights in the Shackelford LLD that are owned by the City of Modesto (usually those lights that are mounted on steel poles). 4. The Shackelford LLD is located in the County of Stanislaus, within the City Limits of the City of Modesto and is more specifically located North of Hatch Road, South of State Highway 99, and East of Crows Landing Road /20121C&EDfTRochalltem

4 5. Said annual report filed with the City Clerk and approved by the Council by motion does provide a full and detailed description of the improvements, the boundaries of the Shackelford LLD and any zones therein, and the proposed assessments upon assessable lots and parcels ofland within the Shackelford LLD. 6. On Wednesday, the 8th day of August, 2012, at the hour of5:30 p.m., the City Council will conduct a public hearing on the questions of the levy of the proposed annual assessment. The hearing will be held at the meeting place of the City Council located in the Tenth Street Place Chambers located at th Street, Modesto, California. 7. The City Clerk is authorized and directed to give the notice of hearing required by the Landscape and Lighting Act of The levy and collection of assessments as set forth in this resolution are exempt from the procedural and substantive requirements of Proposition 218 pursuant to Article XIII, Section 5(a) ofthe California Constitution. 06/12/2012/C&EDrrRocballtem

5 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: 06/12/2012/C&EDlTRochalltem

6 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING A PURCHASE AND SALE AGREEMENT WITH CHRISTOPHER A. LAMKE AND DEBORAH L. VILLIERME-LAMKE, FOR ACQUISITION OF 1,634 SQUARE FEET FEE ACQUISITION PORTION OF A PARCEL LOCATED AT 3900 SYLVAN AVENUE (APN ), IN THE AMOUNT OF $39,621, FOR THE SYLVAN AND LITT IMPROVEMENT PROJECT, AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT AND ALL RELATED DOCUMENTS REQUIRED TO CLOSE ESCROW WHEREAS, the Sylvan and Litt Improvement Project is included in the Village Onc Facilities Master Plan and is a Priority 3 project on the Village One Project Prioritization List, and WHEREAS, the project includes roadway improvements on Sylvan Avenue from west of Lit! Road to Claus Road and on Lit! Road from Sylvan Avenue to the north end of the future Grogan Park site, and WHEREAS, the proposed street widening project also includes land acquisition for the needed right-of-way and abandonment of the south portion of Lit! Road that will no longer be used for road purposes due to the realignment, and WHEREAS, staff has identified a portion of a parce1located at 3900 Sylvan Avenue (APN ), to place improvements as a part of the capital improvements identified for the Sylvan and Lit! Improvement Project, and WHEREAS, an Agreement is needed for the acquisition of the property and staff has investigated the subject property to ensure it is suitable for this purpose, and therefore recommends approving the Purchase and Sale Agreement for acquisition of the property. NOW, THEREFORE, BE IT RESOLVED by the Council ofthe City of Modesto that it hereby approves a Purchase and Sale Agreement with Christopher A. Lamke and 06/12/2012/C&EDNDion/ltem

7 Deborah L. Villierrne- Lamke, for 1,634 square feet fee acquisition portion of a parcel located at 3900 Sylvan Avenue (APN ), in the amount of$39,621, forthe Sylvan and Litt Improvement Project. BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the Purchase and Sale Agreement, and all related documents required to close escrow. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 1ih day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by CouncilmemberBurnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None Cogdill (SEAL) APPROVED AS TO FORM: By: SUS 06/ /C&EDlVDionlItem

8 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AUTHORIZING THE CITY MANAGER, OR IDS DESIGNEE, TO SIGN A CERTIFICATE OF ACCEPTANCE FOR THE GRANT DEED FOR THE ACQUISITION OF PROPERTY INTERESTS LOCATED AT 3900 SYLVAN AVENUE, OWNED BY CHRISTOPHER A. LAMKE AND DEBORAH L. VILLlERME- LAMKE, (APN ) TO BE PURCHASED BY THE CITY OF MODESTO FOR THE SYLVAN AND LlTT IMPROVEMENT PROJECT WHEREAS, Section of the Government Code requires a public agency to accept real property prior to the recordation of a deed or adopt a resolution accepting real property, and WHEREAS, the City of Modesto desires to acquire a 1,634 square feet portion fee acquisition of a parcel owned by Christopher A. Lamke and Deborah L. Villierme- Lamke, (APN ), to be purchased by the City of Modesto for the Sylvan and Litt Improvement Project, NOW, THEREFORE, BE IT RESOLVED by the Council ofthe City of Modesto that the City Manager, or his designee, is hereby authorized to sign a Certificate of Acceptance for the Grant Deed for the acquisition of property interests located at 3900 Sylvan Avenue (APN ), in the County of Stanislaus, owned by Christopher A. Lamke and Deborah L. Villierme-Lamke to be purchased by the City of Modesto for the Sylvan and Litt Improvement Project. 06/12J2012lC&EDNDionlItem

9 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None Cogdill (SEAL) APPROVED AS TO ORM: 06112/2012lC&EDIVDionlItem

10 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AUTHORIZING THE CITY COUNCIL OF THE CITY OF MODESTO, ACTING AS THE GOVERNING BODY OF ALL ITS COMMUNITY FACILITIES DISTRICTS, TO ORDER JUDICIAL FORECLOSURE OF DELINQUENT ANNUAL SPECIAL FACILITIES TAXES PURSUANT TO THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982, AND TO ORDER THAT THE STANISLAUS COUNTY TAX COLLECTOR BE CREDITED WITH THOSE TAXES WHEREAS, the City of Modesto ("City") has conducted proceedings resulting in the formation of Community Facilities Districts ("CFDs") and the issuance and sale of bonds or debt pursuant to the Mello-Roos Community Facilities Act of 1982 (Cal. Gov. Code Section 53311, et seq.; the "Act"), and WHEREAS, pursuant to the Act, the City has duly recorded Notices of Special Tax Lien and has duly and regularly levied special taxes, which special taxes and interest and penalties thereon constitute a lien against the parcel of the land against which it was levied until the same are paid, which liens secure in whole or part debt issued pursuant to the Act, and WHEREAS, certain installments of the special taxes have not been paid when due, and certain special taxes may not be paid when due in the future, and WHEREAS, pursuant to Section I(a) of the Act, the CFDs are authorized to order the special taxes collected by an action brought in the Superior Court to foreclose their liens, and WHEREAS, pursuant to Section I(b) of the Act, the CFDs covenanted for the benefit of owners of the debt to file such foreclosure actions on behalf of the debt holders and are authorized to order the County Auditor to credit the delinquent special taxes upon the secured tax roll, thus relieving the County Tax Collector of further duty 06l /C&EDffRochalItem

11 and regard thereto, and WHEREAS, on July 12, 2011, the City Council, by Resolution No , authorized the City Manager to execute an Amendment No.1 to Task Order No.1 to the Master Professional Services Agreement with Goodwin Consulting Group, Inc. ("Foreclosure Counsel"), a firm experienced and qualified to process such judicial collection and foreclosure actions, and WHEREAS, Foreclosure Counsel is still under contract to provide said services, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Modesto, acting as the governing body of all of the City of Modesto Community Facilities Districts that: 1. The City finds that the Act authorizes the filing of judicial foreclosure lawsuits to collect delinquent special taxes, and hereby orders that the delinquent special taxes listed on the attached ltxhibit A and all future delinquent special taxes as to such property, be collected by action brought in the appropriate Superior Court to foreclose the liens thereof. 2. City staff in conjunction with special counsel and other City consultants are authorized and directed if and as applicable, pursuant to Government Code Section : 1) to record notices of intent to remove the delinquent special taxes from the tax rolls, and 2) to request that the applicable County officials remove current and future delinquent special taxes from the tax rolls. 3. The Act provides for the payment of the costs and attorneys fees for prosecution of the foreclosure lawsuits on redemption prior to entry of judgment as well as on post-judgment redemption, and hereby authorizes Foreclosure Counsel to require 06/ C&EDffRochalItem

12 payment on its behalf of all costs and all attorney fees incurred to collect the delinquent special taxes as a condition of such redemption as provided in the Agreement. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the l2'h day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) /C&EDffRochalItem

13 Exhibit "A" Delinquent Parcels as of May 10, 2012 Missed 3 or More Installments CFD No (Fairview Village) CFD No (Village One #2) APN Tax Year Unpaid Taxes APN Tax Year Unpaid Taxes $ $ $ $1, $ $1, $ $1, $ $1, ll $ $1, $ $ $ $1, $ $1, $ $1, $ $ $ $ $ $ $ $ $ $981.84

14 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION DECLARING THE CITY COUNCIL'S INTENTION TO FORM LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO AND TO LEVY ANNUAL ASSESSMENTS COMMENCING WITH FISCAL YEAR 2012/2013; ACCEPTING AND APPROVING THE ENGINEER'S REPORT; TO CONDUCT A PROPERTY OWNER PROTEST BALLOT PROCEEDING ON THE MATTER OF THE NEW ASSESSMENTS; AND SETTING A TIME AND PLACE FOR THE PUBLIC HEARING ON THESE MATTERS WHEREAS, the City Council of the City of Modesto ("City"), pursuant to the provisions of the Landscaping and Lighting Act of 1972, Division 15, Part 2 of the California Streets and Highways Code ("Act") did by previous resolution, initiated proceedings for the formation of a landscape maintenance district to be known and designated as CITY OF MODESTO, LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO ("District"), and to levy and collect annual assessments for the District commencing on fiscal year 2012/2013 to pay for the operation, maintenance, and servicing oflocallandscape improvements, and appurtenant facilities related thereto; and WHEREAS, the City has retained Willdan Financial Services ("Willdan") as the Engineer of Work for the purpose of preparing and filing an Engineer's Report ("Report") with the City Clerk concerning the formation of Landscape Maintenance Assessment District No and the proposed annual levy of assessments in accordance with the provisions of Chapter I, Article 4 of the Act and the provisions of the California Constitution Article XIIID (the "Constitution"); and WHEREAS, the City Council has received Willdan's Report and has examined and reviewed the Report as presented, and is satisfied that the Report sufficiently describes the boundaries ofthe proposed District, the improvements to be provided, and 06/ /C&ED(IRochalltem

15 is satisfied that the assessments have been spread in accordance with the benefits received from the improvements and maintenance to be performed; and WHEREAS, the City desires and intends to form the District, to levy and collect annual assessments for the District commencing in fiscal year 2012/2013 to pay for the operation, maintenance, and servicing of the local landscape improvements, and appurtenant facilities related thereto; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto, that the Report prepared by Willdan, attached hereto and incorporated as part of this Resolution, consists of the following: a) A Description ofthe Improvements (Plans and Specifications), and b) The Method of Apportionment that details the method of calculating the proportional special benefits and the annnal assessment obligation for each affected parcel including a description of an "Assessment Range Formula" applicable to subsequent assessments, and c) The estimated annual cost and expenses to provide the improvements (Budget) that establishes the proposed "Maximum Assessment Rate" and first year's assessments, and d) An Assessment Diagram (Boundary Map), and e) An Assessment Roll containing the assessment to be levied for each Assessor Parcel Number within the District, commencing in fiscal year 2012/2013 based on the assessment rate and method of apportionment described therein; and BE IT FURTHER RESOLVED that the improvements described in the Report and for which the District is being formed generally includes, but is not limited to, the 06/12/20121C&EDffRochaJItem

16 maintenance, operation and servicing of the local streetscape landscape improvements established in connection with development of the properties within the District, and which shall be maintained for the special benefit of those properties. The maintenance and servicing ofthe improvements shall generally include, but is not limited to the materials, equipment, utilities, labor, and incidental expenses, including administrative expenses, required for annual operation, as well as the performance of periodic repairs and replacement activities as needed to provide for the growth, health, and beauty of trees, landscaping and the proper operation and functioning of related hardscapes, irrigation systems and drainage systems within the public right-of-ways and/or dedicated easements; and BE IT FURTHER RESOLVED that the District as described in the Report consists of the lots and parcels ofland that will receive special benefits from the improvements and services to be provided and are within the residential subdivisions known as Dry Creek Meadows No's 1-10, Creekwood Meadows and Yosemite Meadows No's 1-3, which are generally located north of Yosemite Boulevard, east of McClure Road, west ofy osemite Meadows Drive and south of the M.LD. Lateral No.2. The parcels within the proposed District are currently identified on the Stanislaus County Assessor's Parcel Maps as all or portions of Book 079 Pages 002 through 024, 027 and 028, which incorporates one thousand two hundred seventy-nine (1,279) single-family residential parcels, one (1) school site (Bernard L Hughes Elementary School), one (l) park site (Creekwood Park) and one (l) public area/easement parcel; and BE IT FURTHER RESOLVED that Notice is hereby given that a public hearing on these matters will be held by the City Council on Tuesday, August 8, 2012, at 5:30 06/12/20l2lC&EDffRochaiitem

17 P.M., or as soon thereafter as feasible, in the City Council Chambers, located in the basement of Tenth Street Place, 1010 Tenth Street in Modesto, CA At the Public Hearing, all interested persons shall be afforded the opportunity to hear and be heard; and BE IT FURTHER RESOLVED that City Clerk or their designee is herby authorized and directed to prepare and mail notice of the Public Hearing and property owner protest ballots to the subject property owners regarding the proposed levy of the assessments and the assessment range formula outlined in the Engineer's Report, pursuant to Article XIIID of the California Constitution and Government Code section 53753; and BE IT FURTHER RESOLVED that the property owner protest ballot proceeding conducted for the District assessments shall constitute the property owner's approval or rejection of the proposed levy of assessments, assessment range formula and formation of the District. Each landowner may return the ballot by mail or in person to the City Clerk not later than the conclusion of the Public Hearing on Tuesday, August 8, After the close of the Public Hearing, the City shall tabulate the ballots returned to detennine if majority protest exits. The ballots shall be weighted according to the proportional financial obligation of each affected property. Majority protest exists if, upon the conclusion of the hearing, ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment; and BE IT FURTHER RESOLVED that any interested person may file a written protest with the City Clerk prior to the conclusion of the hearing, or having previously filed protest, may file a written withdrawal of that protest. A written protest shall state all grounds of objection and protest by a property owner shall contain a description sufficient 06i12i2012iC&EDflRochalltem

18 to identify the property owned by such property owner. At the public hearing, all interested persons shall be afforded the opportunity to hear and be heard. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the lih day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: 061l2/2012/C&EDffRochailtem

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20 ENGINEER'S REPORT AFFIDAVIT Formation of Landscape Maintenance Assessment District No Fiscal Year 2012/2013 City of Modesto, County of Stanislaus, State of California This Report outlines the proposed assessments to be levied and collected for Landscape Maintenance Assessment District No ("Districf') commencing in fiscal year , and would replace the annual assessments currently levied and collected by the City for Landscape Maintenance Assessment District No. 1 (LMAD No.1) and Landscape Maintenance Assessment District No.2 (LMAD No.2). This District includes the residential subdivisions known as Dry Creek Meadows No:s 1 thru 10, Creekwood Meadows and Yosemite Meadows No:s 1 and 2. This Report specifically address the improvements, the estimated cost to provide the improvements (budget), the method of apportionment, and the resulting assessments to be levied on the parcels within the District as they existed at the time this Report was prepared. The assessments as described herein are deemed necessary to adequately maintain the improvements determined to be of special benefit to the properties within the District as defined by the Assessment Diagram contained herein as Part IV. Because these assessments are considered to be new or increased assessments, such assessments shall be submitted to the property owners of record as part of a protest ballot proceeding pursuant to the provisions of the California Constitution Article XIIID, before such assessments may be adopted and imposed by the City Council. Reference is hereby made to the Stanislaus County Assessor's maps for a detailed description of the lines and dimensions of parcels within the Landscape Maintenance Assessment District No The undersigned respectfully submits the enclosed Report as directed by the City of Modesto City Council. Dated this day of, Willdan Financial Services Assessment Engineer On Behalf of the City of Modesto By: Jim McGuire Senior Project Manager By: Richard Kopecky R C. E. # 16742

21 TABLE CONTENT INTRODUCTION... 1 PART 1- PLANS AND SPECiFiCATiONS... 4 Description of the District Improvements and Services... 4 Improvements Authorized by the 1972 Act...4 District Improvements... 5 District Maintenance and Services... 7 PART II - METHOD OF APPORTIONMENT... 9 Benefit Analysis... 9 Assessment Methodology PART III - BUDGET Proposed Budget Fiscal Year 2012/ Assessment Calculations Assessment Range Formula PART IV - ASSESSMENT DIAGRAM PART V - ASSESSMENT ROll... 18

22 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District INTRODUCTION Pursuant to the provisions of the Landscape and Lighting Act of 1972, being Part 2 of Division 15 of the California Streets and Highways Code, commencing with (the "1972 Act"), the City Council of the City of Modesto, County of Stanislaus, State of California, ("City") has by previous resolution initiated proceedings that called for the preparation and filing of an Engineer's Report to establish a special benefit assessment district to be designated as: Landscape Maintenance Assessment District No ("District"), for the purpose of continuing and providing for the ongoing maintenance, servicing and operation of local public landscape improvements and related amenities that provide special benefits to the properties within the residential developments known as Dry Creek Meadows No.'s 1 thru 10, Creekwood Meadows and Yosemite Meadows No.'s 1 and 2 which comprise the District. Property owners within these residential neighborhoods have indicated their desire to have the landscape improvements and associated appurtenants within and adjacent to their developments be maintained at a level of service which is greater than that currently provided and supported by the existing assessments for Landscape Maintenance Assessment District No.'s 1 and 2 (LMAD No. 1 and LMAD No.2), which are levied and collected annually on the County tax rolls. In order to provide the necessary funding for the costs and expenses required to service and maintain the median and parkway landscaping as well as the related trees and hardscape areas at an appropriate level of service for the benefiting properties within these residential neighborhoods, the City has determined that it is necessary to form this new District (consolidating portions of LMAD No. 1 and LMAD No.2) and establish new assessments as outlined in this Engineer's Report ("Report"). Upon a successful outcome of a property owner protest ballot proceeding conducted in accordance with the substantive and procedural requirements of the California State Constitution Article XIIID (the "California Constitution"), the City Council may by resolution, form this new District and concurrently dissolve LMAD No.1 and LMAD No.2. In such case the assessments for LMAD No. 1 and LMAD No. 2 would be discontinued. Otherwise, the City may continue to levy and collect the approved assessments for LMAD No.1 and LMAD No.2 under separate proceedings. As required pursuant to Chapter 1, Article 4 of the 1972 Act, this Report describes the District, the improvements, and the assessments to be levied on properties within the District in connection with the special benefits the properties receive from the maintenance and servicing of the District improvements commencing in fiscal year 2012/2013. The assessments described herein will provide an annual funding source to adequately support the ongoing maintenance, servicing and operation, of the median and parkway landscaping and related amenities that provide special benefits to the properties within the District as well as fund some needed upgrades and renovations and associated incidental expenses. Said District shall include all lots and parcels of land determined to receive special benefit from the improvements and maintenance related thereto as indentified by the Assessment Diagram contained in Part IV of this Report. The word 'parcel," for the purposes of this Report, refers to an individual property assigned its own Assessor's Parcel Number (APN) by the Stanislaus County Assessor's Office. The Stanislaus County Auditor/Controller uses Assessor's Parcel Numbers and specific Fund Numbers to identify properties to be assessed on the tax roll for the special benefit assessments. ~,:"6,'/- '" WlllDAN I "fy F!nmcIa! ServIces

23 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District As part of the District formation, pursuant to the provisions of Article XIIID, Section 4 of the California Constitution, and in accordance with the provisions of Government Code, Section 53753, the City shall conduct a property owner protest ballot proceeding (referred to as "Ballot Proceeding") for the proposed levy of new or increased assessments as described in this Report. In conjunction with this Ballot Proceeding, the City Council will conduct a noticed public hearing to consider public testimonies, comments and written protests regarding the proposed new assessments. Upon conclusion of the public hearing, property owner protest ballots received will be opened and tabulated to determine whether majority protest exists. As specified by Article XllfD Section 4e : "A majority protest exists if, upon the conclusion of the hearing, ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment. In tabulating the ballots, the ballots shall be weighted according to the proportional financial obligation of the affected property. " After completion of the ballot tabulation, the City Council will confirm the results of the balloting by resolution. Based on the results ofthat tabulation: If majority protest exists for the new assessments, further proceedings to levy these assessments shall be abandoned for fiscal year 2012/2013 and the new District would not be formed. The City however, may continue to levy and collect the annual assessments previously approved and adopted by the City Council for LMAD No.1 and LMAD No.2. If tabulation of the ballots indicate that majority protest does not exist for the proposed new assessments and assessment range formula presented and described herein, the City Council may approve this Report (as submitted or amended), approve the assessment diagram, and confirm the new assessments by resolution and either in the same resolution or by a separate resolution the City Council will dissolve the existing LMAD No.1 and LMAD NO.2. In such case, the District assessments as approved and ordered shall be submitted to the Stanislaus County Auditor/Controller for inclusion on the fiscal year 2012/2013 property tax roll for each assessed parcel. Each subsequent fiscal year, an Engineer's Report shall be prepared and presented to the City Council describing the District, any changes to the District or improvements, the proposed budget and assessments for that fiscal year, and the City Council shall hold a noticed public hearing regarding these matters prior to approving and adopting the annual levy of assessments. This Report consists of five (5) parts: Part I Plans and Specifications: An overall description of the District and a general description of the location and extent for the proposed improvements are provided in this section of the Report. In a review of the improvements and the parcels within the District, it has been determined that each parcel to be assessed proportionately benefits from the same or similar improvements and that the total annual cost to provide such improvements shall be shared by such parcels. Therefore the District will be formed with a single benefit zone encompassing each property to be assessed within the proposed boundaries of the District. A diagram showing the exterior boundaries of the District and the parcels within the boundaries of the District therein is attached and incorporated herein under Part IV - Assessment Diagram.

24 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Part II The Method of Apportionment: This section of the Report includes a discussion of the benefits (general and special benefits) associated with the improvements and the method of calculating each property's proportional special benefit and annual assessment. Part III District Budget: Provides an estimate of the annual funding necessary to fund an appropriate level of service for the annual maintenance and operation of the landscape improvements and related amenities within the District and the resulting maximum assessment rate (Rate per Equivalent Benefit Unit) for the parcels within the District, which will be levied and collected commencing in fiscal year 2012/2013. This budget includes an estimate of direct annual operational costs (regular landscape and tree maintenance, utilities and related costs); collection of annual installments to funded needed improvement replacements andlor upgrades of the existing improvements and facilities; collection of funds for anticipated future repair and rehabilitation of the improvement amenities; and incidental expenses authorized by the 1972 Act including, but not limited to administration expenses, county and professional service fees and collection of appropriate fund balances. The proposed maximum assessment (Rate per Equivalent Benefit Unit) identified in the budget establishes the maximum assessment rate for fiscal year (initial maximum assessment rate). This maximum assessment rate includes an annual inflationary adjustment which is described in this section of the Repot and shall be applied each subsequent fiscal year to establish the maximum assessment rate allowed each fiscal year. This maximum assessment along with the inflationary adjustment will be presented to the property owners of record for approval as part of the protest ballot proceedings. Part IV Assessment Diagram: A diagram showing the exterior boundaries of the District which includes all parcels that receive special benefits from the improvements. Parcel identification, the lines and dimensions of each lot, parcel and subdivision of land within the District as depicted by the diagram, are based on the Stanislaus County Assessor's Parcel Maps as they existed at the time this Report was prepared and are inclusive of all parcels determined to receive special benefits from the improvements and shall include all subsequent subdivisions, lot-line adjustments or parcel changes therein. Reference is hereby made to the Stanislaus County Assessor's Maps for a detailed description of the lines and dimensions of each lot and parcel of land within the District. Part V Assessment Roll: A listing of the proposed maximum assessment amount for each parcel based on the parcel's proportional special benefit as outlined in the method of apportionment. These assessment amounts represent the assessments proposed to be levied and collected on the County Tax Rolls for fiscal year 2012/ DF.I/ii../i WlllDAN I

25 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District PART 1-5 AND SPECIFICATIONS Description of the District The boundaries of the District and a brief description of the improvements are provided in this section of the Report. The allocation of special benefit and general benefit from the improvements are summarized in the Method of Apportionment contained in Part II of this Report The territory within the District generally consist of the lots and parcels of land within the residential subdivisions known as Dry Creek Meadows (No.'s 1 thru 10), Creekwood Meadows and Yosemite Meadows (No.'s 1 and 2) which are currently included as part of either LMAD No. 1 or LMAD No.2, but does not include all parcels within those two districts. The lots and parcels of land within the District are generally located north of Yosemite Boulevard, west of Yosemite Meadows Drive, east of North McClure Road (excluding those residential properties on North McClure Road) and south of the M.I.D. Lateral NO.2. The boundaries of the District includes all or a portion of the lots and parcels of land currently identified on the Stanislaus County Assessor's Parcel Maps as Book 079, Pages 002 through 024, 027 and 028. Within the boundaries of the District there are currently one thousand two hundred eighty-four (1,284) parcels consisting of one thousand two hundred seventy-nine (1,279) single family residential parcels, one school site (Bernard L Hughes Elementary School), one (1) park site (Creekwood Park) and three (3) public right-of-way/easement parcels. The specific Assessor's Parcel Numbers that comprises the District at the time this Report was prepared are identified on the Assessment Roll contained in Part V of this Report. The improvements and benefits associated with the properties within the District are described in more detail in the Method of Apportionment contained in Part II of the Report. Improvements and Services Improvements Authorized by the 1972 Act As generally defined by the Landscaping and Lighting Act of 1972 and applicable to this District either now or in the future, the improvements and associated assessments may include one or more of the following: The installation or planting of landscaping; The installation or construction of statuary, fountains, and other ornamental structures and facilities; The installation or construction of public lighting facilities including, but not limited to street lights and traffic signals; The installation or construction of any facilities which are appurtenant to any of the foregoing or which are necessary or convenient for the maintenance or servicing thereof. The acquisition of any existing improvement otherwise authorized pursuant to the Act;.../ WllLDAN I "~. I'inanc!si_

26 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District The maintenance or servicing, of any of the foregoing including the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement including but not limited to: ~ Repair, removal, or replacement of all or any part of any improvements; ~ Grading, clearing, removal of debris, the installation or construction of curbs, gutters, walls, sidewalks, or paving, or water, irrigation, drainage, or electrical facilities; ~ Providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury; ~ The removal of trimmings, rubbish, debris, and other solid waste; ~ The cleaning, sandblasting, and painting of walls and other improvements to remove or cover graffiti; ~ Electric current or energy, gas, or other illuminating agent for any public lighting facilities or for the lighting or operation of any other improvements; ~ Water for the irrigation of any landscaping, the operation of any fountains, or the maintenance of any other improvements. The collection and accurnulation of funds as reserves for the purpose of ensuing appropriate cash flow for operational activities and long-term maintenance expenses. I ncidental expenses associated with the improvements including, but not limited to: ~ The cost of preparation of the report, including plans, specifications, estimates, diagram, and assessment; ~ The costs of printing, advertising, and the publishing, posting and mailing of notices; ~ Compensation payable to the County for collection of assessments; ~ Compensation of any engineer or attorney employed to render services; ~ Any expenses incidental to the issuance of bonds or notes; ~ Costs associated with the proceedings held for the approval of a new or increased assessment. ~ Any other expenses incidental to the construction, installation, or maintenance and servicing of the improvements; District Improvements The purpose of the District is to provide funding for the continued maintenance, operation and servicing of the landscaping and related amenities associated with the various landscaped parkways and medians within or adjacent to the residential developments that comprise the District and are located in the public right of ways andlor easements dedicated to the City for maintenance. The landscape improvements to be maintained were originally constructed and installed in connection with the development of the District parcels and may include, but are not limited to trees, ground cover, vines, shrubs and other vegetation; stamped concrete, sidewalks or other hardscape amenities; irrigation and drainage systems; and related appurtenances. The location and extent of the District improvements generally include the following:

27 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Parkways: The District's parkway landscaping includes approximately 75,300 square feet of landscaped area (shrubs, groundcover & vines), 296 trees and 73,150 square feet of sidewalk area, located primarily on Creekwood Drive, and Clause Road, but also includes areas on Yosemite Boulevard, Yosemite Meadows and at the transition of Coddington Way and Waddell Way, These landscaped parkways include the following segments: Creekwood Drive on the west and/or north sides, from: >- The southern boundary of the Dry Creek Meadows No, 9 subdivision (being the northern boundary of the Yosemite Self Storage property), north to Jarena Drive; >- Jarena Drive, north to Mechalys Way; >- Ardia Avenue, north to Dry Creek Drive; >- Dry Creek Drive, north and east to Leavenworth Way; >- Leavenworth Way, east to Clause Road; >- The northwest corner of Creekwood Drive and Clause Road (Parkway/Entryway), Creekwood Drive on the east and/or south sides, from: >- The southern boundary of the Creekwood Meadows subdivision (being the northern boundary of the shopping center located on Yosemite Boulevard), north to Jarena Drive; >- Jarena Drive, north to Julene Drive; >- Julene Drive, north to Schuyler Way; >- Schuyler Way, north to Edenton Way; >- Edenton Way, north and east to Leavenworth Way; >- Leavenworth Way, east to Clause Road; >- The pedestrian bridge area located at the southwest corner of Creekwood Drive and Clause Road, e Coddington Way and Waddell Way: >- The northeast parkway area where Coddington Way and Waddell Way meet, which is actually a continuation (separated by a block wall) of the pedestrian bridge area located at the southwest corner of Creekwood Drive and Clause Road, Clause Road on the west side, from:» The southern boundary of the Creekwood Meadows subdivision (being the northern boundary of the shopping center located on Yosemite Boulevard), north to Creekwood Drive; and» Creekwood Drive, north to the M,I.D, Lateral No, 2 Canal. Clause Road on the east side, from:» Yosemite Boulevard, north to Yosemite Meadows Drive, including the small section on the south side of Yosemite Meadows Drive, just east of Clause Road,

28 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Yosemite Boulevard on the north side, from: " Clause Road, east to Yosemite Meadows Drive (This landscaped areas consist of sidewalk cutouts [wells] for trees and vines) Medians: The District's medians incorporates a small portion of the overall landscaping, but generally includes approximately 1,575 square feet of landscaped area (shrubs and groundcover), 60 trees and 30,020 square feet of stamped concrete or other hardscape surface are, located on Creekwood Drive. These median islands include the following segments: The southern boundary of the Creekwood Meadows subdivision (being the northern boundary of the shopping center located on Yosemite BoUlevard)" north to Jarena Drive; Jarena Drive, north to Schuyler Way; Schuyler Way, north to Mechalys Way; Mechalys Way, north to Ardia Avenue; Ardia Avenue, north to Edenton Way; Edenton Way, north to Dry Creek Drive; Dry Creek Drive, north and east to Leavenworth Way; Leavenworth Way, east to and Clause Road. District Maintenance and Se/Vices To the full extent permitted by the 1972 Act, the improvements, projects and expenditures to be funded by the assessments may include the furnishing of labor, materials, equipment and utilities for the ordinary and usual maintenance, operation, and servicing of landscaping located within the public right-of-ways and easements dedicated to the City. The City Administrator of Infrastructure Financing Programs shall authorize such maintenance and servicing in conformity with the City of Modesto's landscape maintenance standards and available funding. The maintenance, operation and servicing of these improvements may include, but is not limited to: Regularly scheduled maintenance and irrigation of the landscaping including plants, shrubs and vines; Pre-scheduled and as needed trimming and pruning of trees to promote healthy growth and minimize root damage. Fertilizing of vegetation (shrubs, groundcover plants, tree). Removal of dead or deceased plants. Regular weed and litter removal. Monitoring, maintenance and regular repair ofthe irrigation system; Repair and replacement of improvements (vegetation and irrigation) damaged by vandalism, weather or other natural causes. Sidewalk maintenance and repair associated with the landscape maintenance.

29 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Incidental expenses necessary for the ongoing operation of the District and improvements including administrative expenses, reserves and funds collected for periodic and long term capital costs for repairs and rehabilitation. The following table provides additional detail of the landscaping services and activities to be funded by the District assessments. These services and activities are not all inclusive of the maintenance services and activities that may be provided and may be modified as needed in subsequent fiscal years based on the needs of the District and available funding. Seasonal leaf removal General weed control Fertilizing shrubs, groundcover and vines Pruning right-of-way shrubs (Walls) Planter grooming Vine pruning and maintenance Annual flower maintenance Litter removal Pest control (Insects and disease) Pest control Rodents Tree maintenance Irrigation maintenance Blow Sidewalks Irrigation Controller Replacement Irrigations Head Replacement Shrub, Groundcover & Vine Replacements Two times in the Fall (8 weeks) Monthly One time per year Eight times per year Once per month Semi-annual (Twice per year) Once per month Three times per month As needed Monthly Annually (Elevate for sidewalk clearance) Monthly Weekly All 9 controllers as needed sprinkler heads as needed As needed

30 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District II-METHOD APPORTIONMENT The 1972 Act pennits the establishment of assessment districts by agencies for the purpose of providing certain public improvements including, the acquisition, construction, installation, maintenance and servicing of landscaping within public right-of-ways such as medians. The 1972 Act requires that the cost of these improvements be levied according to benefit rather than assessed value: "The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot or parcel from the improvements." The method of apportionment described in this Report for allocation of special benefit assessments utilizes commonly accepted engineering practices and has been established pursuant to the provisions of the 1972 Act and California Constitution. The formulas used for calculating assessments reflect the composition of parcels within the District and the improvements and activities to be provided, and have been established to fairly apportion costs based on a determination ofthe proportional special benefits to each parcel. Benefit Analysis Each of the proposed improvements and the associated costs have been carefully reviewed, identified and allocated based on special benefit pursuant to the provisions of the 1972 Act and the California Constitution. The improvements to be provided by this District and for which properties will be assessed have been identified as necessary, desired and required as essential components for the orderly development of properties within the District to their fullest potential, consistent with the development plans and applicable portions of the City's General Plan. As such, these local improvements provide a direct reflection and extension of those properties that comprise the District and would be necessary and required of the individual property owners for the development of such properties. Therefore the ongoing operation, servicing and maintenance of these local landscape improvements are a particular and distinct benefit to these properties and would otherwise be the financial obligation of those properties either individually or collectively through an association or similar funding mechanism. In conjunction with the provisions of the 1972 Act, the California Constitution Article XIlID addresses several key criteria for the levy of assessments, notably: Article XIIID Section 2d defines District as follows: "District means an area determined by an agency to contain all parcels which will receive a special benefit from a proposed public improvement or property-related service'; Article XIII D Section 2i defines Special Benefit as follows: "Special benefif' means a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large. General enhancement of property value does not constitute "special benefit."

31 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Article XIIiD Section 4a defines proportional special benefit assessments as follows: "An agency which proposes to levy an assessment shall identify all parcels which will have a special benefit conferred upon them and upon which an assessment will be imposed. The proportionate special benefit derived by each identified parcel shall be detennined in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the property related service being provided. No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel." The method of apportionment (method of assessment) set forth in the Report is based on the premise that each assessed property receives special benefits from the landscape improvements to be funded by the assessments, and that such assessments will be used to provide an appropriate and sustainable level of maintenance for the existing landscape improvements and facilities within the boundaries of the District, and the assessment revenues generated by the District will be used solely for such purposes. Furthermore, the assessment obligation for each parcel reflects that parcel's proportional special benefit as compared to other properties that receive special benefits as outlined in the preceding provisions of the 1972 Act and the California Constitution. Special and General Benefit In reviewing the improvements and services to be provided by this District, it is evident that these improvements and related maintenance and servicing are local improvements installed for and in connection with the collective development of the properties within the District Each improvement was clearly designed and installed to serve as an extension and shared responsibility of the individual private properties, resulting from and/or required for the development of those properties. These improvements are a direct and collectively representation of those individual private properties, similar to any other privately funded and maintained common area or private-street Like many other development related improvements and infrastructure, the landscaping improvements to be maintained by the District and funded through special benefit assessments, collectively serve as a direct physical extension of the individual private properties and would otherwise not be necessary or provided by the City, if not for the development of those properties. The fact that these improvements are located within public right-of-ways or easements and are maintained by the City through an assessment district rather than privately through a homeowner's association does not make these improvements less of a direct and special benefit to those properties nor does it suggest that because these improvements are considered "public improvements" such improvements must have a benefit to the City or to the public at large. While these improvements may certainly be visible to the general public or other nearby properties, the fact that these improvements were only necessary for the development of the parcels within the District and were neither required nor necessarily desired by any other properties or developments, the visibility of such improvements that may afforded to other properties or to the public at large is incidental to the special benefits to properties in the District and certainly not a measurable or quantifiable benefit (either general or special). Furthermore, similar improvements and services associated with other developments within the City are typically maintained privately by the individual property owners or an association. Therefore, it has been determined that because these localized improvements were facilitated by the development of properties within the District, they provide no measurable or tangible benefits (general or special) to properties outside the District or to the public at large. "IV. f1nanciai_... ii...."'.... WlllDAN I

32 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District It is therefore apparent that the improvements and certainly the need to properly maintain and sustain these improvements, are exclusively for the special benefit of properties in the District and the level of service associated with such improvements directly affects only the properties within these developments Assessment Methodology To identify and determine the proportional special benefit to each parcel within the District, it is necessary to consider the entire scope of the improvements provided as well as the properties that benefit from those improvements. The improvements and the associated costs described in this Report, have been carefully reviewed and have been identified and allocated based on a benefit rationale and calculations that proportionally allocate the net cost of only those improvements determined to be of special benefit to properties within the District. For most maintenance districts, particularly those formed under the provisions of the 1972 Act, the method of apportionment most commonly used is based on what is often referred to as an "Equivalent Dwelling Unit" (EDU) or "Equivalent Benefit Unit" (EBU)" method of apportionment. While the terminology may be slightly different, both of these methods of apportionment establish a basic unit (base value) of assessment that provides a common value or shared measure of proportional benefit from the improvements and services provided and assigns a weighted value to various properties and property types based on an assessment formula that equates each property's specific characteristics to that of the base value. The net annual cost of the improvements is distributed among the parcels based upon a calculation of the proportional special benefit received by each parcel utilizing this base value comparison. The benefit formula used to determine the assessment obligation is therefore based upon both the improvements that benefit the parcels within the District as well as the use and characteristics of each property as compared to other parcels that benefit from those specific improvements. For the purposes of this Report and the determination of proportional annual assessment obligation for this District, the quantum of benefit derived from the funded improvements, programs and services by a single-family residential parcel is considered to be the "benchmark" property or base value and each single-family residential parcel within the District is considered to receive proportionately equal special benefits from the improvements and each is assigned and derives one (1.0) equivalent benefit unit. Within this District, it has been determined that all other properties are considered exempt properties (exempt from assessment) for various reasons and thus only the single-family residential parcels are assessed. Within this District, exempt properties include, but are not limited to, lots or parcels of land identified as: Public streets and other roadways (which are not assigned an APN by the County); Parcels identified as public easements or right-of-ways, of which there are three, including Assessor's Parcel Numbers , , and ; Public properties (government owned) that provide public landscaped areas similar to the District improvements, but are not funded by the assessments, including Bernard L Hughes Elementary School (APN ) and Creekwood Park (APN ).

33 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District The properties and parcels identified above as exempt parcels are considered to receive no special benefit from the District improvements and are therefore exempted from assessment and are assigned 0.00 EBU. The benefit formula applied to parcels within the District is based on the preceding discussion. Each parcel's EBU correlates to the parcel's proportional special benefit received as compared to the other parcels benefiting from the District improvements. An assessment amount per EBU ("Rate") for the District improvements is established by taking the total cost of the improvements and dividing that amount by the total number of EBUs for parcels benefiting from such improvements. Total Balance to Levy I Total EBUs = Levy per EBU ("Rate") This rate (Levy per EBU) is then applied back to each parcel's individual EBU to establish each parcel's proportional special benefit and annual assessment obligation. Rate x Parcel EBU = Parcel Levy Amount The total assessment amount for each parcel in the District will be collected on the County tax rolls, but the amount collected each fiscal year cannot exceed the amount that may be levied at the Maximum Assessment Rate for that fiscal year.

34 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District PART III - BUDGET Proposed Budget Fiscal Year 2012/2013 Landscape Maintenance Services Tree Maintenance Maintenance of Faclilhes & Related improvements Regular Landscape Maintenance Services Landscape Water Landscape Electrlcfty Utilities -Water & Electricity (1; Armual Fertilizing ;2" AddWona! Plant Pruning '31 Annual Flower Maintenance '''I Increased Tree Pruning Services Expanded (Addjtjonal) Landscape Services TOTAL ANNUAL MAINTENANCE Landscape Rehabilitation/RepJacement Funding Urban Forest (Trees) Rehabilitation Facilities & Other Improvements Rehabilitation ANNUAL REHABILITATiON FUNDING (S) Irrigatlon Controller Replacement \6) lnigation Head Replacement (7) Landscape Renovation (Plant Replacement) (1)) Sidewalk Replacement (Damaged Areas) Annual Capital Improvement Project Funding Operational Reserve Fund Collection City Administration/Professional Fees County Administration Fees Miscellaneous Administration Expenses ANNUAL INCIDENTAL FUNDING EXPENSES TOTAL ANNUAL EXPENSES General Benefit Contribution Revenues from Other Sources TOTAL CONTRIBUITION/FUNDING ADJUSTMENTS BALANCE TO LEVY DISTRICT STATISTICS Total Parcels Parcels Levied Total Benefit Units Calculated Levy per EBU Proposed Maximum Levy per EBU (Balloted Rate) Total Amount to be Balloted , , , ,221 27,820 2,639 25,181 5,910 6BO , ,648 1, ,000-9, ,7S{) 8,750 19,370 19,370 $ 53,573 $ 3,374 $ 50,199 1, ,140 1, , $ 3,367 $ 134 $ 3,233 2,340 2,340 3,060 3,060 2,000 2,000 2,332 2,33<) 9,732 9,732 1,336 1,336 11,247 11, $ 23,103 $ $ 23,103 $ 80,043 $ 3,508 $ 76,535 (3,508) (3,508) $ (3,508) $ (3,508) $ $ 76,535 $ $ 76,535 1,284 1,279 1, $ $ $76,535.36

35 Fonnation Engineer's Report City of Modesto Landscape Maintenance Assessment District Footnotes for Budget Above: (1) Annual Fertilizing: Service to be provided once per year - $1,020/year (2) Additional Plant Pruning: Service to be provided 8-times/year (currently twice/year) - $9,000/year (3) Annual Flower Maintenance: Service to be provided Once/Month at a cost of $600/year (4) Increased Tree Pruning Services: Service increased to 4-year cycle (currently 8-year cycle) $8,750/year ($35,000 over 4-years) (5) Irrigation Controller Replacement: Replace 9 Irrigation Controllers at a total cost of $11,700, to be collected over 5-years ($2,340/year) (6) Irrigation Head Replacement: Replace 2,700+ Irrigation Heads at a total cost of $45,900, to be collected over 15-years ($3,060/year) (7) Landscape Renovation (Plant Replacement): Estimated replacement & renovation cost of $10,000, to be collected over 5-years ($2,000/year) (8) Sidewalk Replacement (Damaged Areas): Estimated replacement cost of $11,660, to be collected over 5-years ($2,332/year) Assessment Calculations Applying the method of apportionment outlined in Part II of this Report and the budget estimates for fiscal year 2012/2013 results in the following calculation of assessments: $76,535/1, EBU's = $59.84 per EBU Therefore, a single benefit unit or the Maximum Assessment Rate for fiscal year 2012/2013 (Applicable to each residential parcel) will be $ Based on this rate, the actual total amount to be balloted will be $76, (59.84 x = 76,535.36). Assessment Range Formula As part of this District formation and establishment of annual assessments to fund the operation, maintenance and servicing of the improvements, the assessments submitted to the property owners in the Ballot Proceeding shall include an annual inflationary adjustment referred to as an Assessment Range Formula, which is authorized by Section 53750(2) (A) of the Government Code (also known as the "Proposition 218 Omnibus Implementation Act"). The purpose of establishing an Assessment Range Formula is to provide for reasonable and inevitable increases in costs to provide the improvements and services over time due to inflation, thereby reducing the need for costly noticing and balloting procedures simply because of inflationary factors. The Assessment Range Formula for this District is defined by the following: Commencing in the second fiscal year (Fiscal Year 2013/2014), and each fiscal year thereafter, the Maximum Assessment Rate established for the previous fiscal year shall be adjusted by four percent (4%) to establish the new Maximum Assessment Rate for the fiscal year. This annual adjustment to the Maximum Assessment Rate shall be calculated independent of the District's annual budget and annual assessments. The recalculation of the Maximum Assessment Rate does not require or facilitate an increase to the annual assessments. Although the Maximum Assessment Rate will increase each fiscal year, the assessment rate to be levied and applied each fiscal year shall be based on an estimate of the District expenses for that fiscal year (annual budget) and the resulting assessments may be equal to or less than the allowed maximum assessment rate.

36 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Over time, it is possible that the budgeted expenses and resulting assessments may not change from one fiscal year to the next, while at other times the proposed budget and calculated assessment rate from one year to the next may actually be more than 4%. Such increases in the budget and assessments are permitted provided that the proposed assessment rate does not exceed the adjusted maximum assessment rate established for that fiscal year. If the proposed annual budget and assessment for the fiscal year does not require an increase, or if the increase is less than the adjusted Maximum Assessment, the proposed budget and assessment may be applied. If however, the budget and calculated assessments require an assessment rate greater than the adjusted Maximum Assessment Rate, such an assessment would be considered an increased assessment, and would require a Ballot Proceeding to approve such an increase before that increase may be imposed. To impose a new or increased assessment other than the annual inflationary adjustment provided by the preceding Assessment Range Formula, the District must comply with the provisions of the California Constitution Article XIlID Section 4c, that requires a public hearing and certain protest procedures including mailed notice of the public hearing and property owner protest balloting. Property owners, through the balloting process, must approve such a new or increased assessment before that new or increased assessment may be imposed.

37 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District IV- DIAGRAM The following is a diagram showing the boundaries of Landscape Maintenance Assessment District No (boundary map). The dimensions of all lots, parcels and subdivisions of land within the boundaries of the District and depicted in the diagram, are the same as the lines and dimensions of the parcels shown on the Stanislaus County Assessor's Parcel Maps (APN Maps) and by reference these Maps are made part of this Report and Assessment Diagram as they existed at the time this Report was prepared and filed with the City Clerk. The Assessment Roll contained in Part V of this Report, lists each of the parcels and lots depicted on this diagram and are identified by an Assessor's Parcel Numbers (APNs) which corresponds to the assessor's parcel numbers assigned by the Stanislaus County Assessor's Office and shown on the Assessor's Parcel Maps. The combination of this diagram and the Assessment Roll constitutes the Assessment Diagram for the District. The Boundary Map/Assessment Diagram in a reduced-scale format follows.

38 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District CITY OF MODESTO LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO CITY OF MODESTO COUNTY OF STANISLAUS STATE OF CALIFORNIA SHEET 1 OF j FIlto IN THE OFFICE OF THE' CITY CLERKTHIS DAY OF 201:': CITY Cll:RK OTY OF MODESTO THE UN!;:S AND DIMENSIONS OF EACH LOT OR PP-.RCEL $rlown ON THIS DIAGRAM SHAl,L 8E THOSIS UNES AND DIMENS!ONS AS SHOINN ON THE STANISLAUS COUNTY ASSESSOR'S MAPS FOR THOSE PARCHS USTEO. " UEWNH- ~, ~l(1~auwlf ~ THE: STANISlAUS COUNTY ASShSSOR'S MAPS SHALl GOVERN 1'00 All 01;.1;\.[1., CONCERNING THE LINES AND DIMENSIONS OF SUCH Lors OR PARCEl S. AI.M i "1j,,~'ft'\\,, Legend c=:i PROPOSIW DISTRICT BOUNDAR!',+, ~.. JWJLLDAN I ~W F;nancial Services

39 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District PART V - ASSESSMENT ROLL Parcel identification for each lot or parcel within the District is based on the Assessment Diagram presented herein and available parcel maps and property data from the Stanislaus County Assessor's Office at the time this Report was prepared. A listing each of the parcels (Assessor's Parcel Numbers) to be assessed within this District along with their respective assessment amounts (to be balloted) is provided herein and this listing constitutes the proposed Assessment Roll for fiscal year 2012/2013. If any parcel submitted for collection is identified by the County Auditor/Controller to be an invalid parcel number for the fiscal year, a corrected parcel number and/or new parcel numbers will be identified and resubmitted to the County Auditor/Controller. The assessment amount to be levied and collected for the resubmitted parcel or parcels shall be based on the method of apportionment and assessment rates described in this Report as approved by the City Council rather than a proportionate share of the original assessment Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Battleboro Ct Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Parkston Ct

40 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Parkston Ct Milbank Dr Milbank Dr Milbank Dr Milbank Dr Milbank Dr Milbank Dr Milbank Dr Milbank Dr Milbank Dr Salina Dr Salina Dr Salina Dr Wichita Way Wichita Way Battleboro Ct Parkston Ct Parkston Ct Battleboro Ct Parkston Ct Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr

41 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr D Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr D Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Beresford Dr Spindale Dr Spindale Dr Spindale Dr Spindale Dr Spindale Dr D Spindale Dr Spindale Dr Spindale Dr Spindale Dr Spindale Dr Spindale Dr Spindale Dr Spindale Dr Beresford Dr Milbank Dr Milbank Dr D D Milbank Dr 732 Milbank Dr

42 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Milbank Dr Milbank Dr Milbank Dr Milbank Dr Spindale Dr Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way larned Ln Larned Ln Larned Ln Larned Ln Larned Ln Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr

43 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Sharpsburg Dr Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Wichita Way Spindale Dr Spindale Dr Salina Dr Salina Dr Parsons Ct Parsons Ct Parsons Ct Parsons Ct Parsons Ct Parsons Ct Parsons Ct Leavenworth Way

44 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Leavenworth Way 809 Leavenworth Way 805 Leavenworth Way 801 Leavenworth Way 800 Leavenworth Way 804 Leavenworth Way 808 Leavenworth Way 812 Leavenworth Way 816 Leavenworth Way 3908 Sharpsburg Dr 3912 Sharpsburg Dr 3916 Sharpsburg Dr 817 Larned Ln 813 Larned Ln 809 Larned Ln 805 Larned Ln 3909 Goodland Ct 3905 Goodland Ct 3900 Goodland Ct 3904 Goodland Ct 3908 Goodland Ct 3912 Goodland C! 3916 Goodland Ct 3920 Goodland Ct 800 Larned Ln 804 Larned Ln 808 Larned Ln 812 Larned Ln 816 Larned Ln 820 Larned Ln 824 Larned Ln 737 Waddell Way 741 Waddell Way 745 Waddell Way 749 Waddell Way 753 Waddell Way 757 Waddell Way 761 Waddell Way 765 Waddell Way 756 Codington Way 752 Codington Way 748 Codington Way 744 Codington Way $0.00

45 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Codington Way Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way

46 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment Distnd Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Riedsville Ct Riedsville Ct Riedsville Ct Riedsville Ct Riedsville Ct Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Carrboro Ln Chadburn CI Chadburn CI Chadburn CI Chadburn CI Chadburn CI Chadburn CI Chad burn CI Chad burn CI Chadburn Ct 1.00 $ $59,84

47 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Chadburn Ct Chadburn Ct Chadburn Ct Creedmoor Ave Creedrnoor Ave Creedrnoor Ave Creedmoor Ave Creedmoor Ave S Redfield Ave Redfield Ave Redfield Ave Redfield Ave S Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Redfield Ave Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Dry Creek Dr Wilmont Ln Wilmont Ln Highmore Ln Ln 1.00 $59.S4

48 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore In Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Ardia Ave Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Wilmont Ln Wilmont Ln

49 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Wilmont Ln Wilmont Ln Wilmont Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Highmore Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Balfour Ln Ardia Ave Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave

50 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Creedmoor Ave Codington Way Codington Way Codington Way Codington Way Codington Way Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave

51 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Dillingham Ave Codington Way Codington Way Codington Way Codington Way Codington Way Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave

52 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Ellenboro Ave Ellenboro Ave Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Ellenboro Ave Codington Way Codington Way Codington Way Codington Way Codington Way Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave

53 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Gatesville Ave Codington Way Codington Way Codington Way Codington Way Codington

54 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave

55 Fonnation Engineer's Report City of Modesto Landscape Maintenance Assessment District Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Laurenburg Ave Codington Way Codington Way Codington Way Codington Way Codington Way Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Mc Clure Rd Mechalys Way Waddell Way Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave $0.00 $0.00

56 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Wilkesboro Ave Codington Way Codington Way Codington Way Codington Way Codington Way Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Melboume Dr Melbourne Dr 1.00 $5984

57 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Mechalys Way Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln Asheboro Ln Sunbury Ct Sunbury Ct Sunbury Ct Sunbury Ct Sunbury Ct Asheboro Ln Asheboro Ln Beufort Ct Beufort Ct Beufort Ct Beufort Ct Asheboro Ln Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln

58 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Ansonville Ln Ansonville Ln Ansonville Ln Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Asheboro Ln Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln

59 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Effingham Ln Effingham Ln Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Louisburg Ave Codington Way Codington Way Codington Way Codington Way Wilming10n Way Wilmington Way Wilmington Way Wilmington Way Wilmington Way Wilmington Way Wilmington Way Wilmington Way Wilming10n Way 1.00 $59, $59, $59, $59,84 1,00 $59, $59, $59, $59, $59, $59, $59, $59, $59, $59, $59,84 1,00 $ $59,84

60 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Wilmington Way Wilmington Way Wilmington Way Wilmington Way Wilmington Way Wilmington Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Waddell Way Vanceboro Ct Vanceboro Ct Vanceboro Ct Vanceboro Ct Vanceboro Ct Vanceboro Ct Vanceboro Ct Vanceboro Ct Vanceboro Ct Wilmington Way Wilmington Way Wilmington Way Wilmington Way Wilmington Way High Point et High Point et High Point Ct High Point Ct High Point et High Point et High Point Ct High Point et Macon et Macon et Macon et Macon et Macon Ct Macon et Wilmington Way eodington Way Codington Way 1,00 $ $59, $59,84 1,00 $ $59,84 1,00 $59,84 1,00 $59, $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $ ,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59, $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $ ,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84

61 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Effingham Ln Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln Ansonville Ln Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Dothan Dr Melboume Dr

62 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District 079~ Melbourne Dr 079~O Melbourne Dr 079~ Melbourne Dr 079~022~ Dothan Dr 079~ Dothan Dr Dothan Dr ~O ~O13 079~022~O ~O Dothan Dr 3528 Dothan Dr 3532 Dothan Dr 3536 Dothan Dr Dothan Dr 079~022~ Dothan Dr ~O ~O Dothan Dr 3612 Dothan Dr 079~ Dothan Dr ~ Dothan Dr Dothan Dr 079~ Dothan Dr Dothan Dr 079~022~ Ansonville Ln 079~022~ Ansonville Ln 079~ Jarena Dr 079~022~ Jarena Dr 079~ Jarena Dr Jarena Dr 079~022~ Jarena Dr 079~ Jarena Dr 079~ Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr

63 Formation Engineer's Report City 01 Modesto Landscape Maintenance Assessment District Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Gell Ln Gell Ln Gell Ln Gell Ln Gell Ln Gell Ln Gell Ln GelfLn Anniston Ct Anniston Ct Anniston Ct Anniston Ct Anniston Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Gell Ln Gell Ln GelfLn GelfLn Gell Ln

64 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Gelf Ln Gelf Ln Anniston Ct Anniston Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Hallsboro Ct Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Melbourne Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Gelf Ln Gelf Ln Gelf Ln Gelf Ln Gelf Ln Gelf Ln Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr Bayboro Dr 1,00 $ $59, $59, $59,84 1,00 $59, $59,84 1,00 $ $59, $59,84 1,00 $59, $59,84 1,00 $ $59, $59,84

65 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Anniston Ct Anniston Ct Anniston Ct Anniston Ct Anniston Ct Anniston Ct Anniston Ct Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr J ulene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Anastasia Dr Anastasia Dr Anastasia Dr Anastasia Dr Anastasia Dr Anastasia Dr Anastasia Dr Anastasia Dr Anastasia Dr Troon PI Troon PI Troon PI Troon PI Troon PI Troon PI Troon PI 1,00 $ ,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $59,84 1,00 $ $59,84 1,00 $59,84 1,00 $ ,00 $59,84

66 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Troon PI Troon PI Troon PI Troon PI Troon PI Troon PI Troon PI Rector Ln Rector Ln Rector Ln Rector Ln Reelor Ln Rector Ln Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Julene Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Anastasia Dr Jarena Dr Jarena Dr

67 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Jarena Dr Rector Ln Rector Ln Rector Ln Troon PI Troon PI Troon PI Troon PI Troon PI Troon PI Troon PI Troon PI Clause Rd Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI EI Portal PI Westfall Ln $0.00

68 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Westfall Ln Westfall Ln Westfall Ln Westfall Ln Westfall Ln Westfall Ln Westfall Ln Westfall Ln Westfall Ln Westfall Ln Westfall Ln Westfall Ln EI Portal PI Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Dr Sentinel Ct Sentinel Ct Sentinel Ct Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr $0.00

69 Formation Engineer's Report City of Modesto Landscape Maintenance Assessment District Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Yosemite Meadows Dr Westfall Ln Westfall Ln EI Portal PI TOTALS 1, $76,535.36

70 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION OF INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO. I FOR DRY CREEK MEADOWS SUBDIVISIONS NOS. 1-6 AND SETTING A PUBLIC HEARING ON THE PROPOSED ASSESSMENTS TO BE HELD ON AUGUST 8, 2012 WHEREAS, Resolution No , adopted by the Council of the City of Modesto on December 13, 1988, initiated proceedings for the formation of Landscape Maintenance Assessment District No.1 for the purpose of administering the maintenance of landscaping in the public right-of-way within the street medians and adjacent to the access control walls in Dry Creek Meadows Subdivisions Nos. 1-6, and WHEREAS, said assessment district was formed in accordance with the Landscape and Lighting Act of 1972, (California Streets and Highways Code Sections through 22679), and WHEREAS, Section of the California Streets and Highways Code requires the Engineer, the person designated by this Council as Engineer of Work for Assessment District No.1, to prepare and file an annual report, and WHEREAS, the Engineer of Work, has prepared and filed said annual report with the City Clerk, and WHEREAS, the Council has approved said annual report by motion, and WHEREAS, California Streets and Highways Code Section requires the legislative body (the City Council) to adopt a resolution of intention which shall include the following: a. Declaration of intention of the legislative body (the City Council) to levy and collect assessments within the assessment district for the fiscal year stated in the annual report. 06fI2f20121C&EDrrRochaJItem

71 b. General description of the existing improvements and proposed improvements and any substantial changes proposed to be made in the existing improvements. c. Reference to the assessment district by its distinctive designation and indication ofthe general location of the district. d. Reference to said annual report, on file with the City Clerk, for a full and detailed description of the improvements, the boundaries of the assessment district and any zones therein, and the proposed assessments upon assessable lots and parcels ofland within the district. e. Notice of the time, as fixed by the California Streets and Highways Code Section 22625, and the place for hearing by the legislative body (the City Council) on the levy of the proposed assessment. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that: I. The City Council intends to levy and collect assessments within Landscape Maintenance Assessment District No.1 during the fiscal year There are no proposed new improvements or any substantial changes in existing improvements in Dry Creek Meadows Subdivisions Nos. 1-6 and that the existing improvements to be made in said assessment district are generally described as follows: The City shall provide maintenance, in perpetuity, of landscaping and any and all improvements required for such maintenance including, but not limited to, landscape irrigation systems in the following locations: a. Street medians in Creekwood Drive b. Areas adjacent to the access control walls along Creekwood Drive c. Areas adjacent to the access control walls along Claus Road 3. Landscape Maintenance Assessment District No.1 is located in the County of Stanislaus, within the City Limits of the City of Modesto and is more 06/12120l2lC&EDlTRochailtem

72 specifically located on the west side of Claus Road, between Modesto Irrigation District Lateral No.2 and State Route 132 (Yosemite Boulevard). 4. Said annual report filed with the City Clerk and approved by the Council by motion does provide a full and detailed description of the improvements, the boundaries of the assessment district and any zones therein, and the proposed assessments upon assessable lots and parcels of land within Landscape Maintenance Assessment District No On Wednesday, the 8th day of August, 2012, at the hour of 5:30 p.m., the City Council will conduct a public hearing on the question of the levy of the proposed annual assessment. The hearing will be held at the meeting place of the City Council located in the Tenth Street Place Chambers located at th Street, Modesto, California. 6. The City Clerk is authorized and directed to give the notice of hearing required by the Landscape and Lighting Act of The levy and collection of assessments as set forth in this resolution are exempt from the procedural and substantive requirements of Proposition 218 pursuant to Article XIII, Section 5(a) of the California Constitution. 06/ /C&EDflRochailtem

73 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of June, 2012, by Counci1member Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: By: C&EDrrRochalltem

74 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION OF INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO.2 FOR DRY CREEK MEADOWS SUBDIVISIONS NOS. 7-10, CREEKWOOD MEADOWS SUBDIVISION, AND YOSEMITE MEADOWS SUBDIVISION, AND SETTING A PUBLIC HEARING ON AUGUST 8, 2012 TO CONSIDER THE LEVY AND COLLECTION OF ASSESSMENTS WITHIN LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO.2 WHEREAS, Resolution No , adopted by the Council of the City of Modesto on April 4, 1989, initiated proceedings for the formation of Landscape Maintenance Assessment District No.2 for the purpose of administering the maintenanpe oflandscaping in the public right of way within the street medians and adjacent to the access control walls in Dry Creek Meadows Subdivisions Nos. 7-10, Creekwood Meadows Subdivision and Yosemite Meadows Subdivision Units Nos. I and 2, and WHEREAS; said assessment district was formed in accordance with the Landscaping and Lighting Act of 1972, (California Streets and Highways Code Sections through 22679), and WHEREAS, Section of the California Streets and Highways Code requires the Engineer, the person designated by the Council as Engineer of Work for Assessment District No.2, to prepare and file an annual report, and WHEREAS, the City Engineer, said Engineer of Work, has prepared and filed said annual report with the City Clerk, and WHEREAS, the Council has approved said annual report by motion, and WHEREAS, California Streets and Highways Code Section requires the Council to adopt a resolution of intention which shall include the following: 06112/20I2IC&EDfTRochalltem II

75 a. Declaration of intention of the Council to levy and collect assessments within the assessment district for the fiscal year stated in said annual report. b. General description of the existing improvements and proposed improvements and any substantial changes proposed to be made in the existing improvements. c. Reference to the assessment district by its distinctive designation and indication of the general location of the district. d. Reference to said annual report, on file with the City Clerk, for a full and detailed description of the improvements, the boundaries of the assessment district and any zones therein, and the proposed assessments upon assessable lots and parcels of land within the district. e. Notice of the time, as fixed by California Streets and Highways Code Section 22625, and the place for hearing by the Council on the levy of the proposed assessment, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that: 1. The City Council intends to levy and collect assessments within Landscape Maintenance Assessment District No.2 during Fiscal Year There are no proposed new improvements or any substantial changes in the existing improvements within the existing Landscape Maintenance Assessment District No.2, and the existing improvements to be made in said assessment district are generally described as follows: The City shall provide maintenance, in perpetuity, of landscaping and any and all improvements required for such maintenance including, but not limited to, landscape irrigation systems in the following locations: a. Street medians in Creekwood Drive b. Areas adjacent to the access control walls along Creekwood Drive c. Areas adjacent to the access control walls along Claus Road 06112J2012/C&EDlTRochalItem

76 3. Landscape Maintenance Assessment District No.2 is located in the County of Stanislaus, within the City limits of the City of Modesto, and is more specifically located on the northeast corner of Yosemite Boulevard and North McClure Road. District 2 is bounded by Yosemite Boulevard on the south, North McClure Road on the west, Yosemite Meadows Drive on the east, and Mechalys Way on the north. 4. Said annual report filed with the City Clerk and approved by the Council by motion does provide a full and detailed description of the improvements, the boundaries of the assessment district and any zones therein, and the proposed assessments upon assessable lots and parcels of land within Landscape Maintenance Assessment District No On Wednesday, the 8th day of August, 2012, at the hour of5:30 p.m., the City Council will conduct a public hearing on the question of the levy of the proposed annual assessment. The hearing will be held at the meeting place of the City Council located in the Tenth Street Place Chambers located at 1010 loth Street, Modesto, California. 6. The City Clerk is authorized and directed to give the notice of hearing required by the Landscaping and Lighting Act of The levy and collection of assessments as set forth in this resolution shall follow the procedural and substantive requirements of Proposition 218 pursuant to Article 13D, Section 5(a) of the California Constitution. 061l2J2012/C&ED(JRochalltem

77 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the lih day of June, 2012, by CounciImember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: SUS 061l2l2012/C&EDrrRochalltem II

78 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AUTHORIZING THE AWARD O"F BID FOR THE PURCHASE OF SEVEN (7) HALF-TON PICK-UP TRUCKS FOR VARIOUS CITY DIVISIONS THROUGH THE PUBLIC WORKS DEPARTMENT, FLEET SERVICES DIVISION, TO TOWNE FORD SALES, REDWOOD CITY, CA, AND AUTHORIZING THE PURCHASING MANAGER TO ISSUE A PURCHASE ORDER FOR A TOTAL ESTIMATED COST OF $159,422 WHEREAS, the City Manager authorized the Purchasing Manager to issue formal Request for Bids (RFB) for new vehicles and heavy equipment, throughout FY through various competitive processes, with the Purchasing Division coming back to Council for award authorization. The seven (7) half-ton pick-up trucks were included in the FY new vehicles and heavy equipment list authorized by the City Manager, and WHEREAS, the replacement trucks are for the following Divisions; Parks Maintenance, Construction Administration, Water Systems Maintenance, Water Systems Construction, Water Quality Control Operation, these trucks have been subjected to a thorough evaluation and have met or exceeded the replacement criteria before being placed on the replacement list, and WHEREAS, the Purchasing Division issued RFB No for the purchase of seven (7) half-ton pick-up trucks to thirteen (13) prospective bidders, posted the bid on the City's website and formally advertised as required by law. Three (3) of the sixteen (16) prospective bidders are located within Stanislaus County, one of which is a local vendor. and WHEREAS, RFB's were formally opened in the City Clerk's office. Of the thirteen (l3) prospective bidders, four (4) companies chose to respond, one of which is 061l2J20121FinanceJPWIMTorreslItem

79 located in Stanislaus County. The local vendor chose not to submit a bid response. All four (4) companies provided responsive and responsible bids, and WHEREAS, based on providing the lowest responsive and responsible bid, City staff recommends the award of bid for the purchase of seven (7) half-ton pick-up trucks to Towne Ford Sales, Redwood City, CA, for a total estimated cost of$159,422, and WHEREAS, sufficient funds are budgeted in Fiscal Year in the following appropriation unit , and WHEREAS, Modesto Municipal Code Section generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid. The award of bid for the purchase of seven (7) half-ton pick-up trucks to Towne Ford Sales, Redwood City, CA, for the Department of Public Works, Fleet Services Division, conforms to the Modesto Municipal Code. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes the award of bid for the purchase of seven (7) half-ton pick-up trucks for various Divisions through the Public Works Department, Fleet Services Division to Towne Ford Sales, Redwood City, CA- BE IT FURTHER RESOLVED that the Purchasing Manager or his designee to issue a purchase order for a total estimated cost of $159, I lFinanceIPW/MTorres/ltem

80 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the lih day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FO By: ~~~~--~ _ SUS A LCALA WOOD, City Attorney 06/12/2012JFinanceIPWlMTorres/ltem

81 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING THE POSITION CLASSIFICATION PLAN FOR THE CITY OF MODESTO TO CREATE THE CLASSIFICATION OF BUILDING MAINTENANCE SPECIALIST WHEREAS, a Position Classification Plan for the City of Modesto was adopted by Modesto City Council Resolution No pursuant to Rule 2.2 ofthe Personnel Rules and Regulations of the City of Modesto, and WHEREAS, the City Manager has recommended to the Council amendments to the Position Classification Plan, and WHEREAS, Rule 2.2 of the City of Modesto Personnel Rules provides that revisions to the Classification Plan shall be effective upon adoption ofresolution of the City Council, as follows: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto SECTION L CLASSIFICATION CREATED. The Position Classification Plan of the City of Modesto is hereby amended to create the classification of Building Maintenance Specialist at salary range 124. The job specification for Building Maintenance Specialist is being created to perform a variety of skilled technical building maintenance and repair activities involving heating, ventilation and air conditioning (HV AC) or locksmith functions and general maintenance activities, as shown in attached Exhibit "A," which is made a part of this resolution by reference, is hereby approved and made part of the Position Classification Plan of the City of Modesto. SECTION 2. EFFECTIVE DATE. This resolution shall become effective on and after June 12, /12/20121HRlKMur<iaughlJtem

82 The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the Ith day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: By: 06112/20121HR1KMurdaughlItem

83 CITY OF MODESTO NO BUILDING MAINTENANCE SPECIALIST Class specifications are intended to present a descriptive list of the range of duties performed by employees in the class. Specifications are not intended to reflect all duties performed within the job. DEFINITION To perform a variety of skilled technical building maintenance and repair activities involving heating, ventilation and air conditioning (HVAC) or locksmith functions and general maintenance activities. SUPERVISION RECEIVED AND EXERCISED Receives general supervision from higher level supervisory staff. May provide technical and functional supervision to assigned maintenance personnel. ESSENTIAL AND MARGINAL FUNCTION STATEMENTS - Essential and other important responsibilities and duties may include, but are not limited to, the following: Essential Functions All assignments: Inspect building facilities to identify building maintenance needs. Maintain and repair City facilities, equipment and buildings by performing skilled mechanical work related to heating, ventilation and air conditioning or locksmith maintenance and repair work. Read and interpret sketches, diagrams, drawings and blueprints. May order parts and supplies; provide estimates of labor and material costs. Maintain time, material and equipment use records, Requisition supplies and materials. Assist in coordinating maintenance activities with other City departments, divisions and sections and with outside agencies. Build and maintain positive working relationships with co-workers, other City employees and the public using principles of good customer service. EXHIBIT A

84 CITY OF MODESTO Building Maintenance Specialist Page - 2 Essential Functions: (Continued) When assigned to HVAC: Install, adjust, repair and inspect a variety of heating, ventilation, and air conditioning equipment including forced air fumaces, boilers, water pumps, chillers, air conditioning units, exhaust fans, air filters, compressors, cooling towers and heat exchangers. May install, troubleshoot and repair a variety of electrical, electronic and pneumatic climate controls and valves. Perform charging, evacuating, condenser cleaning and filter changing. Repair and replace boiler refectories, boiler blowers; adjust bumers, high and low water cut-out controls. Replace pump couplings, motor bearings, belt-sheaves, and belts. Lubricate all mechanical equipment Maintain proper water treatment by means of chemicals. Program and monitor computerized energy system which includes heating/air conditioning systems. Troubleshoot the computerized system and establish stop/start time on the systems. Monitor alarms and follow up on system failures such as switches and fans. Overhaul and balance air flow calibration. Observe and adjust meters, gauges and control panels. Perform charging, evacuating, condenser cleaning and filter changing. Repair and maintain air conditioning systems, zoning heating/cooling refrigeration duct work, ventilation, chilled water heating/cooling compressor type, rooftop cooling duct work, packaged air cool, multi-zone rooftop heating/cooling systems. Perform maintenance on auxiliary mechanical equipment EXHIBIT A

85 CITY OF MODESTO Building Maintenance Specialist Page - 3 Essential Functions: (Continued) When assigned as locksmith: Install, adjust, replace and rebuild locks. Open locks that cannot be opened by ordinary means. Duplicate keys using hand and electronically operating key cutting machines. Re-build, service and perform related installation of locking equipment, including overhead closures, automatic door closures, and hold backs of all kinds. Use various machine and had tools in the fabrication or modification of locks and hardware parts. Change key and cylinder combinations in accordance with changes in master key system. Maintain master key coding systems and central key control records, security of keys, codes, combinations and location and possession of keys. Troubleshoot, maintain and repair the City's lock system. Marginal Functions: Perform related duties as required. MINIMUM QUALIFICATIONS Knowledge of (depending on assignment): Methods, practices and equipment used in building maintenance services and activities within a specialized building trade including general building maintenance. Low pressure boilers, ventilating, refrigeration, absorption air conditioning, power and related mechanical building systems and equipment. Master key systems and the fabrication of master keys. Design, construction, installation, operation, adjustment, repair and maintenance of locks, locking devices and door closures. Methods and techniques used in estimating time and materials for assigned EXHIBIT A

86 CITY OF MODESTO Building Maintenance Specialist Page - 4 projects. Knowledge of: (Continued) Tools and equipment used in assigned area of building maintenance. Safe work practices pertaining to building maintenance activities. Ability to (depending on assignment): Perform a wide range of skilled building maintenance work in assigned area. Interpret work orders and explain jobs to other employees. Repair and maintain a variety of mechanical equipment. Work independently in the absence of supervision. Use hand and power tools, materials and instruments, utilized in the building mechanical trades. Program and monitor the computerized heating and air conditioning systems making needed adjustments. Decipher key code systems, install, maintain, adjust, repair and rebuild a variety of locks, locking devices. Read and interpret sketches, drawings, diagrams and blueprints. Estimate necessary materials and supplies with a reasonable degree of accuracy. Communicate clearly and concisely, both orally and in writing. Establish and maintain effective working relationships with those contacted in the course of work. Experience and Training Guidelines Any combination of experience and training that would likely provide the required knowledge and abilities is qualifying. A typical way to obtain the knowledge and abilities would be: Experience: Four years Gourney level) full-time mechanical experience in assigned area as Locksmith or HVAC mechanic. EXHIBIT A

87 CITY OF MODESTO Building Maintenance Specialist Page - 5 Training: Equivalent to completion of the twelfth grade supplemented by additional specialized training in Heating Ventilation and Air Conditioning (HVAC) or Locksmithing maintenance. License of Certificate: Possession of, or the ability to obtain, an appropriate and valid Califomia driver's license. PHYSICAL AND MENTAL REQUIREMENTS Mobility: frequent performance of heavy manual labor; frequent standing for long periods of time; frequent bending and squatting. lifting: frequent lifting up to 75 pounds; occasional lifting up to 100 pounds. Vision: constant use of overall vision. Dexterity: frequent grasping, holding, and reaching. Hearing/Talking: frequent hearing and talking in person. May be required to wear ear protection or hear in noisy conditions. Emotional! Psychological: frequent coworker contact; occasional working alone. Environmental: frequent exposure to loud noise; frequent exposure to chemicals, fumes, and other environmental substances WORKING CONDITIONS Work is performed in both an indoor and outdoor environment, with year-round exposure to varied weather conditions. Work may be subject to noise from loud equipment and machinery. Work may occur at varied remote locations. Positions may require occasional overtime and weekend work and travel is rare. Class Spec History Adopted 6/12 Revised BU Gen NS EXHIBIT A

88 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING EXHIBIT "A" OF RESOLUTION NO TO REVISE THE CLASS RANGE TABLE FOR GENERAL NON-SWORN CLASSES TO ADD THE SALARY RANGE FOR BUILDING MAINTENANCE SPECIALIST AT SALARY RANGE 124 WHEREAS, the City Council desires to amend Exhibit "A" of Resolution No , which approved the Cla~s Range Table for General Non-Sworn Classes, as follows: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto SECTION L AMENDMENT TO RESOLUTION NO Exhibit "A" entitled, "City of Modesto Class Range Table General Non-Sworn Classes," attached to Resolution No , is hereby amended as shown on the amended Exhibit "A" entitled "City of Modesto Class Range Table General Non-Sworn Classes effective June 12,2012," which is attached hereto and made a part hereof as though set forth in full herein. Said Exhibit "A" adds the Building Maintenance Specialist to salary range 124. SECTION II. EFFECTIVE DATE. This resolution shall become effective on and after June 12, J12J2012IHRJKMurdaughlItem

89 The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the lih day of June, 2012, by Councilmember Lopez, who moved its adoption, whieh motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: 06112/20121HR1KMurdaughlItem

90 CITY OF MODESTO CLASS RANGE TABLE GENERAL NON-SWORN CLASSES Effective June 12, 2012 RANGE TITLE Administrative Office Assistant I Custodian I Administrative Office Assistant II Custodian II Exhibits Coordinator 109 Account Clerk I Customer Services Account Clerk I 110 Maintenance Worker I 111 Account Clerk II Administrative Office Assistant III Custodian Crewleader Customer Services Account Clerk II 114 Electrician Assistant I Equipment Service Technician Maintenance Worker II Production Technician Storeskeeper 115 Administrative Services Technician I Senior Administrative Office Assistant Senior Customer Services Account Clerk 116 Account Technician Airport Maintenance Worker Equipment Operator Groundskeeper Traffic Operations Technician Wastewater Collection Systems Operator I Water Distribution Operator I EXHIBIT A

91 City of Modesto Class Range Table - General Non-Sworn Classes Page 2 RANGE TITLE 118 Electrician Assistant II Fleet Procurement Technician Parking Facilities Crewleader Parks Maintenance Crewleader Recreation Coordinator Senior Storeskeeper Tree Trimmer Water Distribution Operator II 119 Administrative Services Technician II Building Maintenance Technician Code Enforcement Officer I -Neighborhood Preservation Unit Customer Services Account Technician Parks Maintenance Mechanic 120 Assistant Buyer Environmental Compliance Technician Laboratory Analyst I Senior Equipment Operator Traffic Striping Crewleader Wastewater Collection System Operator II Wastewater Treatment Plant Operator I Water Quality Control Technician I Water Resource Specialist 121 Solid Waste Enforcement Officer 122 Accountant I Development Services Technician I Electrician Assistant III Equipment Mechanic Tree Trimmer Crewleader Welder/F abricator 123 Code Enforcement Officer II-Neighborhood Preservation Unit Engineering Assistant Trainee EXHIBIT A

92 City of Modesto Class Range Table - General Non-Sworn Classes Page 3 RANGE TITLE Airport Maintenance Crewleader Building Maintenance Specialist Community Development Program Specialist I Cross Connection Specialist Development Services Technician II Environmental Compliance Inspector I Fire Equipment Mechanic Head Groundskeeper Heavy Equipment Mechanic Laboratory Analyst II Operations Crewleader Wastewater Treatment Plant Operator II Water Conservation Specialist Water Distribution Operator III Water Meter Technician Water Production Operator I Water Quality Control Technician" Water Services Equipment Operator I Equipment Mechanic Crewleader Housing Financial Specialist Housing Rehabilitation Specialist I Wastewater Collection System Crewleader Wastewater Treatment Plant Operator '" Engineering Assistant I Building Inspector I Community Development Program Specialist" Electrician - Traffic and Buildings Electrician - Utilities Environmental Compliance Inspector II Heavy Equipment Mechanic Crewleader Instrumentation Technician Senior Fire Equipment Mechanic Water Production Operator II Water Services Equipment Operator II 130 Construction Inspector Housing Rehabilitation Specialist" Laboratory Analyst III Senior Wastewater Treatment Plant Operator EXHIBIT A

93 City of Modesto Class Range Table - General Non-Sworn Classes Page 4 RANGE TITLE Engineering Assistant II Building Inspector II Environmental Review Specialist Senior Environmental Compliance Inspector Water Division Crewleader Assistant Land Surveyor Plans Examiner Senior Construction Inspector 135 Engineering Project Coordinator 136 Senior Building Inspector EXHIBIT A

94 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING THE POSITION CLASSIFICATION PLAN FOR THE CITY OF MODESTO TO CREATE THE CLASSIFICATION OF PARKS, RECREATION AND NEIGHBORHOODS OPERATIONS MANAGER AND TO DELETE THE CLASSIFICATIONS OF BUILDING MAINTENANCE MANAGER, URBAN FORESTRY MANAGER AND PARKS OPERATIONS MANAGER WHEREAS, a Position Classification Plan for the City of Modesto was adopted by Modesto City Council Resolution No pursuant to Rule 2.2 of the Personnel Rules and Regulations of the City of Modesto, and WHEREAS, the City Manager has recommended to the Council amendments to the Position Classification Plan, and WHEREAS, Rule 2.2 of the City of Modesto Personnel Rules provides that revisions to the Classification Plan shall be effective upon adoption of resolution of the City Council, as follows: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto SECTION L CLASSIFICATION CREATED. The Position Classification Plan of the City of Modesto is hereby amended to create the classification of Parks, Recreation, and Neighborhoods Operations Manager at salary range 451. The Job specification for Parks, Recreation, and Neighborhoods Operations Manager is being created to manage activities of Park Operations, Community Forestry, Building Maintenance Services and Pruned Refuse Collections within the Parks, Recreation and Neighborhoods Department, as shown in attached Exhibit "A," which is made a part of /HRlKMurdaughiltem

95 this resolution by reference, is hereby approved and made part of the Position Classification Plan of the City of Modesto. SECTION 2. CLASSIFICATIONS DELETED. The Position Classification Plan of the City of Modesto is hereby amended to delete the classifications of Building Maintenance Manager, Urban Forestry Manager, and Parks Operations Manager as said classifications are no longer being used. SECTION 3. EFFECTIVE DATE. This resolution shall become effective on and after June 12,2012. The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the l2'h day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being du1y seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: ALA WOOD, City Attorney 06/l2l2012!HRlKMurdaugh/Item

96 CITY OF MODESTO No PARKS, RECREATION AND NEIGHBORHOODS OPERATIONS MANAGER Class specifications are intended to present a descriptive lis! of the range of duties performed by employees in the class. Specifications are not intended to reflect all duties performed within the job. DEFINITION To plan, organize, direct, and coordinate the activities of Parks Operations, Community Forestry, Building Maintenance Services and Pruned Refuse Collections within the Parks, Recreation and Neighborhoods Department including: maintenance and operations of the City's parks, tree planting, pruning, removal, and tree preservation activities, and all aspects of building maintenance and custodial services; to negotiate and to administer complex maintenance agreements; and to provide highly complex staff assistance to the Director of Parks, Recreation and Neighborhoods. SUPERVISION RECEIVED AND EXERCISED Receives administrative direction from the Director of P-arks, Recreation and Neighborhoods. Exercises direct supervision over assigned supervisory, professional, technical and administrative support personnel. ESSENTIAL AND MARGINAL FUNCTION STATEMENTS - Essential and other important responsibilities and duties may include, but are not limited to, the following: Essential Functions: Develop and implement divisional goals, objectives, policies and procedures. Plan, organize and direct activities for parks, including open space, playgrounds, sports fields and special use areas such as splash grounds or pavilions, building services, community forestry, Tuolumne River Regional Park, John Thurman Field and Stadium, Green Waste Diversion program and the leaf collection program; Direct, oversee, and participate in the development of work plans; assign work activities, projects, and programs; monitor work flow; review and evaluate work products methods and procedures. Prepare the operating and capital improvement budgets for several divisions; assist in budget implementation; participate in the forecast of additional funds need for staffing, equipment, materials and supplies; administer the approved budget

97 CITY OF MODESTO Parks, Recreation and Neighborhoods Operations Manager Page 2 Essential Functions: (Continued) Recommend the appointment of personnel; provide or coordinate staff training; conduct performance evaluations; implement discipline procedures as required; maintain discipline and high standards necessary for the efficient and professional operation of the Department. Supervise the safety program for assigned divisions; coordinate and attend safety meetings; ensure the adherence to safe work practices by subordinate personnel. May inspect work sites before, during and after completion to assure work is completed in a satisfactory and thorough manner; inspect work completed by outside contractors. Research, prepare and present technical and administrative reports to Council, commissions and a variety of committees; prepare written correspondence Negotiate and manage complex landscape maintenance, land use services agreements. and custodial Serve as primary staff liaison to the "Modesto Nuts" baseball team including contract negotiations. Oversee public relations activities; coordinate special events; manage volunteers and non-paid or altemative labor resources. Manage water usage and monitor backflow prevention devices in a complex park system. Negotiate, oversee, and coordinate architectural, maintenance and service contracts, and maintain liaison with contractor; prepare and review cost estimates for proposed work, and recommend final acceptance of completed work. Participate in the planning and development of new parks, trails, landscaping and grant funded projects for infrastructure improvement, expansion, and energy efficiency standards. Receive, investigate and respond to citizen requests, suggestions, and complaints; manage large and complex special events. Build and maintain positive working relationships with co-workers, other City employees and the public using principles of good customer service. EXHIBIT A

98 CITY OF MODESTO Parks, Recreation and Neighborhoods Operations Manager Page 3 Essential Functions: (Continued) Represent the division and department to outside agencies and organizations; participate in outside community and professional groups and committees; make presentations to various groups; and provide technical assistance as necessary. Research and prepare technical and administrative reports; prepare written correspondence. Marginal Functions: Perform related duties as assigned. MINIMUM QUALIFICATIONS Knowledge of: Principles and practices of park maintenance and landscape, building services preventative maintenance, community forestry tree maintenance and ballpark maintenance. Negotiation and management of contractual services. Record keeping and reporting procedures, including computerized maintenance systems. Pertinent local, State and Federal rules, regulations and laws. Modem office procedures and computer equipment. Principles and practices of organizational analysis and management. Budgeting procedures and techniques. Principles and practices of supervision, training, and personnel management. Ability to: Organize, direct, and implement comprehensive programs related to assigned to a wide variety of operations. EXHIBIT A

99 CITY OF MODESTO Parks, Recreation and Neighborhoods Operations Manager Page 4 Ability to: (Continued) Perform the most complex work of the assigned divisions. Work under the pressure of deadlines; analyze, research, and solve a wide range of problems. Analyze problems, identify alternative solutions, project consequences of proposed actions and implement recommendations in support of goals. Gain cooperation through discussion and persuasion. Effectively conduct public presentations. Ensure project compliance with Federal, State and local rules, laws and regulations. Interpret and apply City and department policies, procedures, rules and regulations. Coordinate, prepare and administer multiple budgets. Supervise, train and evaluate personnel. Establish and maintain effective working relationships with those contacted during the course of work. Communicate clearly and concisely, both orally and in writing. Experience and Training Guidelines: Any combinafion of experience and training that would likely provide the required knowledge and abilities is qualifying. A typical way to obtain the knowledge and abilities would be: Experience: A minimum of five years of increasingly responsible experience in park management, building/facilities maintenance and management, and/or community forestry administration including two years of supervisory responsibility. Training: EXHIBIT A

100 CITY OF MODESTO Parks, Recreation and Neighborhoods Operations Manager Page 5 Equivalent to a Bachelor's degree from an accredited college or university with major coursework in landscape maintenance, parks and recreation administration, urban forestry, omamental horticulture, biology, or a related field License or Certificate: Possession of, or ability to obtain, an appropriate and valid California driver's license. Certified Playground Safety Inspection certification issued by the National Playground Safety Institute is desirable. PHYSICAL AND MENTAL REQUIREMENTS Mobility: frequent use of keyboard; frequent sitting for long periods of time; occasional bending or squatting. lifting: frequently up to 10 pounds; occasionally up to 50 pounds. Vision: constant use of overall vision; frequent reading and close-up work; occasional color and depth vision. Dexterity: frequent repetitive motion; frequent writing; frequent grasping, holding, and reaching. Hearing/Talking: frequent hearing and talking, in person and on the phone. Emotional/Psychological: frequent decision-making and concentration; frequent public and/or coworker contact; occasional working alone. Environmental: frequent exposure to noise. WORKING CONDITIONS Work is performed in a typical temperature controlled office environment subject to typical office noise and environment. Some positions may be assigned to remote locations. Some duties involve working outside in a variety of climates. Positions require occasional overtime or weekend work and the ability to travel. Class Spec Historv Adopted 6/12 Revised BU Mqt/Conf NS EXHIBIT A

101 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING EXHIBIT "A" OF RESOLUTION NO TO REVISE THE CLASS RANGE TABLE FOR REPRESENTED MANAGEMENT AND CONFIDENTIAL NON-SWORN CLASSES TO ADD THE SALARY RANGE FOR PARKS, RECREATIONAND NEIGHBORHOODS OPERATIONS MANAGER TO SALARY RANGE 451 AND TO DELETE THE CLASSIFICATIONS OF BUILDING MAINTENANCE MANAGER, URBAN FORESTRY MANAGER AND PARKS OPERATIONS MANGER FROM SALARY RANGE 441 WHEREAS, the City Council desires to amend Exhibit "A" of Resolution No , which approved the Class Range Table for Represented Management and Confidential Non-Sworn Classes, as follows: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto SECTION L AMENDMENT TO RESOLUTION NO Exhibit "A" entitled, "City of Modesto Class Range Table Represented Management and Confidential Non-Sworn Classes," attached to Resolution No , is hereby amended as shown on the amended Exhibit "A" entitled "City of Modesto Class Range Table Represented Management and Confidential Non-Sworn Classes Effective June 12,2012," which is attached hereto and made a part hereof as though set forth in full herein. Said Exhibit "A" adds the Parks, Recreation, and Neighborhoods Operations Manager to salary range 451 and deletes the Building Maintenance Manager, Urban Forestry Manager, and Parks Operations Manager from salary range 441. SECTION II. EFFECTIVE DATE. This resolution shall become effective on and after June 12, /2012/HRlKMurdaughlItem

102 The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 12th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: By: SUSA 06/ HR1KMurdaughiltem

103 CITY OF MODESTO CLASS RANGE TABLE REPRESENTED MANAGEMENT AND CONFIDENTIAL NON-SWORN CLASSES Effective June 12, 2012 RANGE TITLE 407 Administrative Office Assistant II (Confidential) 411 Administrative Office Assistant III (Confidential) 412 Police Clerk II (Confidential) 414 Legal Secretary I 415 Administrative Services Technician I (Confidential) Senior Administrative Office Assistant (Confidential) 416 Account Technician (Confidential) 418 Legal Secretary II Systems Technician I 419 Administrative Services Technician II (Confidential) Workers' Compensation Claims Assistant 420 Deputy City Clerk Employee Benefits Coordinator Executive Assistant Senior Legal Secretary 422 Office Supervisor Systems Technician 1/ Workers' Compensation Claims Examiner I 423 Custodian Supervisor Parking Services Supervisor 424 Buyer 425 Parking Adjudication Program Coordinator Police Facilities Coordinator Public Information Analyst 426 Assistant Planner Central Stores Supervisor Financial Analyst I Senior Systems Technician EXHIBIT A

104 City of Modesto Class Range Table - Management and Confidential Non-Sworn Classes Page -2 RANGE TITLE 427 Administrative Analyst I Animal Control Supervisor Human Resources Analyst I Police Civilian Supervisor Technology Solutions Analyst I Workers' Compensation Claims Examiner II 428 Assistant City Clerk 430 Associate Planner Financial Analyst II Senior Buyer Software Analyst I Systems Engineer I 431 Administrative Analyst II Events Coordinator Human Resources Analyst II Risk and Loss Control Coordinator Senior Workers' Compensation Claims Examiner Technology Solutions Analyst II 432 Compost Facility Supervisor Junior Engineer Neighborhood Preservation Supervisor Operations Supervisor Parks Project Coordinator Recreation Supervisor Senior Crime and Intelligence Analyst Wastewater Collection Systems Supervisor Water Quality Control Plant Maintenance Supervisor 433 Water Resources Analyst 434 Customer Services Supervisor Financial Analyst III Recycling Program Coordinator Senior Community Development Program Specialist Software Analyst II Systems Engineer II EXHIBIT A

105 City of Modesto Class Range Table - Management and Confidential Non-Swom Classes Page -3 RANGE TITLE 435 Assistant Transportation Planner Business Analyst Cultural Services Program Manager Emergency Medical Services Coordinator Facility Supervisor Management Analyst Organizational Development Coordinator Transit Analyst Weed and Seed Program Coordinator 436 Assistant Engineer Deputy Fire Marshal Electrical Supervisor Environmental and Water Quality Laboratory Supervisor Environmental Services Supervisor Housing Rehabilitation Supervisor Senior Planner 437 Senior Human Resources Analyst 438 Associate Land Surveyor Integrated Waste Specialist Property Agent Public Safety Business SerVices Analyst Senior Financial Analyst Senior Software Analyst Senior Systems Engineer Water Distribution and Production Supervisor 439 Administrative Services Officer Associate Transportation Planner Senior Business Analyst 440 Associate Engineer Environmental Regulatory Compliance Administrator Recreation Program Manager Water Quality Control Operations Supervisor EXHIBIT A

106 City of Modesto Class Range Table - Management and Confidential Non-Sworn Classes Page -4 RANGE TITLE 441 Events Supervisor Housing and Urban Development Manager Infrastructure Financing Program Administrator Parks Planning and Development Manager Streets Manager Wastewater Collections Manager 442 Budget and Financial Analysis Manager Construction Inspection Supervisor Customer Services Manager Principal Accountant Principal Software Analyst Principal Systems Engineer Purchasing Manager 443 Associate CivilfTraffic Engineer Senior Transportation Planner 444 Airport Manager Building Inspection Program Coordinator Building Inspection Supervisor Fleet Manager Principal Planner Solid Waste Program Manager Transit Manager 446 Assistant Chief Building Official Information Technology Manager Water Quality Control Plant Manager 447 Traffic Operations Engineer Water Systems Manager EXHIBIT A

107 City of Modesto Class Range Table - Management and Confidential Non-Swom Classes Page -5 RANGE TITLE 450 Business Development Manager Chief Building Official Planning Manager Senior Civil Engineer 451 Parks, Recreation and Neighborhoods Operations Manager 452 City Engineer Traffic Engineer EXHIBIT A

108 AMENDED FOR CLERICAL ERROR MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING THE CLASSIFICATION PLAN FOR THE CITY OF MODESTO TO AMEND THE CLASSIFICATION OF PUBLIC INFORMATION ANALYST TO TITLE CHANGE TO PUBLIC INFORMATION COORDINATOR WHEREAS, a Position Classification Plan for the City of Modesto was adopted by Modesto City Conncil Resolution No pursuant to Rule 2.2 of the Personnel Rules and Regulations of the City of Modesto, and WHEREAS, the City Manager has recommended to the Council amendments to the Position Classification Plan, and WHEREAS, Rule 2.2 of the City of Modesto Personnel Rules provides that revisions to the Classification Plan shall be effective upon adoption of resolution of the City Council, as follows: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto SECTION L CLASSIFICATION AMENDED. The Position Classification Plan of the City of Modesto is hereby amended to revise the Public Information Analyst to title change to Public Information Coordinator. The Public Information Coordinator job specification is being revised to more accurately reflect how the class is being utilized within the City Manager's Office. The revised Public Information Coordinator class specification, as shown in attached Exhibit "A," which is made a part of this resolution by reference, is hereby approved and made part of the Position Classification Plan of the City of Modesto. SECTION 2. EFFECTIVE DATE. This resolution shall become effective on and after June 12, /12l20121HR1KMurdaugh/ltem

109 The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 12'h day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Council members: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: ~ SUS A ALCALA WOOD, CIty Attorney 06/ /HRlKMurdaugh/ltem

110 CITY OF MODESTO No PUBLIC INFORMATION COORDINATOR Class specifications are intended to present a descriptive list of the range of duties performed by employees in the class. Specifications are not intended to reflect all duties performed within the job. DEFINITION To perform administrative functions in the development and administration of the City's community relations and public information programs; to provide strategic public affairs direction and to serve as public relations resource to the City Manager's Office; and to promote and create awareness of the operations and objectives of City government through public outreach, education programs and marketing strategies. SUPERVISION RECEIVED AND EXERCISED Receives direction from the City Manager, Deputy City Manager or assigned management staff. ESSENTIAL AND MARGINAL FUNCTION STATEMENTS - Essential and other important responsibilities and duties may include, but are not limited to, the fol/owing: Essential Functions: Evaluate and administer the City's marketing, public information, and media communications. Respond to inquiries and requests for information from the media, government agencies, City staff and members of the public. Develop, write, edit, design and produce various communication materials including newsletters, brochures, fact sheets, press releases, articles, multi-media presentations, correspondence, reports, speeches, and special publications. Oversee and/or administer the preparation, publication and distribution of internal and extemal newsletters, public service announcements, monthly utility bill inserts, annual reports and other communications Confer with departments on initiatives, programs and projects; provide guidance and direction regarding strategic communication planning and implementation; may serve as a project manager. Coordinate major press events, media management and public outreach for City events and issues. EXHIBIT A

111 CITY OF MODESTO Public Information Coordinator Page 2 Essential Functions (Continued) Provide direction and counsel to Council and City management on emerging and urgent communications issues; recommend responses; assist departments with media and public relations issues. May serve as the City's Public Information Officer during citywide emergencies to develop and direct emergency information to the media, City employees, and the general public. Solicit bids and recommend vendors; recommend design, color, graphics and appropriate media in accordance with budget. Plan and coordinate video presentation projects using script-writing techniques; plan and develop content for and manage the production of video, audio and commercial artwork for a variety of print, online, and multimedia publications and work products. Collaborate with staff to identify and seek co-sponsorship community outreach opportunities. Maintain the content of the City's website ensuring accuracy, consistency and quality by coordinating the resources of various departments. Represent the City and/or City Manager's Office at public meetings or community events as required. Assist in the preparation and administration of the budget and assist in agenda preparation and review. Ensure sensitive and controversial matters are managed in a discreet and professional manner. Build and maintain positive working relationships with co-workers, other City employees and the public using principles of good customer service. Marginal Functions: Perform related duties as assigned. MINIMUM QUALIFICATIONS Knowledge of: Principles and practices of public relations, media, marketing and advertising. EXHIBIT A

112 CITY OF MODESTO Public Information Coordinator Page 3 Knowledge of: (Continued) Public information and community relations program development and implementation. Effective methods for preparing and presenting facts and information to the public and the media, including formatting of materials for publications and news releases. Writing and editing techniques for a variety of audiences. Research and problem-solving techniques. Pertinent Federal, State and local laws, codes and regulations. Various software programs including the ability to use Windows, Word, and desktop publishing programs. Modem office procedures, methods, and computer equipment. Ability to: Perform professional public information duties to promote and market City services and programs. Exercise independent judgment in identifying and responding to requests for information from the media and public. Effectively function under multiple deadlines. Interpret and explain complex information in a clear and understandable manner. Apply City-wide and departmental policies. Write, edit, design and photograph. Use computer graphic systems and software to create publications and communications. Establish and maintain effective working relationships with those contacted in the course of work. Communicate effectively, both orally and in writing. EXHIBIT A

113 CITY OF MODESTO Public Information Coordinator Page 4 Experience and Training Guidelines Any combination of experience and training that would likely provide the required knowledge and abilities is qualifying. A typical way to obtain the knowledge and abilities would be: Experience: Minimum of three years of increasingly responsible experience involving the development and execution of a public relations or marketing program. Related public sector experience is highly desirable. Training: Equivalent to a Bachelor's degree from an accredited college with major course work in public relations, communications, joumalism, or a related field. License or Certificate: Possession of, or ability to obtain, an appropriate valid California driver's license. PHYSICAL AND MENTAL REQUIREMENTS Mobility: frequent use of keyboard; frequent sitting for long periods of time; occasional bending or squatting. lifting: frequently up to 10 pounds; occasionally up to 25 pounds. Vision: constant use of overall vision; frequent reading and close-up work; occasional color and depth vision. Dexterity: frequent repetitive motion; frequent writing; frequent grasping, holding, and reaching. Hearing/Talking: frequent hearing and talking, in person and on the phone. Emotional/Psychological: frequent decision-making and concentration; frequent public and/or coworker contact; occasional working alone. Environmental: frequent exposure to noise. WORKING CONDITIONS Work is performed in a typical temperature controlled office environment subject to typical office noise and environment Some positions may be assigned to remote locations. Positions may require occasional overtime or weekend work and travel is rare. Class Spec History Adopted 6/12 Revised BU Mgt/Conf NS EXHIBIT A

114 AMENDED FOR CLERICAL ERROR MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING EXHIBIT "A" OF RESOLUTION NO TO REVISE THE CLASS RANGE TABLE FOR REPRESENTED MANAGEMENT AND CONFIDENTIAL NON-SWORN CLASSES TO CHANGE THE SALARY RANGE FOR PUBLIC INFORMATION COORDINATOR FROM SALARY RANGE 425 TO SALARY RANGE 435 WHEREAS, the City Council desires to amend Exhibit "A" of Resolution No , which approved the Class Range Table for Represented Management and Confidential Non-Sworn Classes, as follows: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto SECTION I. AMENDMENT TO RESOLUTION NO Exhibit "A" entitled, "City of Modesto Class Range Table Represented Management and Confidential Non-Sworn Classes," attached to Resolution No , is hereby amended as shown on the amended Exhibit "A" entitled "City of Modesto Class Range Table Represented Management and Confidential Non-Sworn Classes Effective June 12,2012," which is attached hereto and made a part hereof as though set forth in full herein. Said Exhibit "A" changes the salary range for Public Information Coordinator from salary range 425 to salary range 435. SECTION II. EFFECTIVE DATE. This resolution shall become effective on and after June 12, /2012/HRJKMurdaugh/Item

115 The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 1ih day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: ~~~~~=- ~ SUS A ALCALA WOOD, City Attorney 06/12120) 2IHRJKMurdaughlltem

116 CITY OF MODESTO CLASS RANGE TABLE REPRESENTED MANAGEMENT AND CONFIDENTIAL NON-SWORN CLASSES Effective June 12, 2012 RANGE TITLE 407 Administrative Office Assistant II (Confidential) 411 Administrative Office Assistant III (Confidential) 412 Police Clerk II (Confidential) 414 Legal Secretary I 415 Administrative Services Technician I (Confidential) Senior Administrative Office Assistant (Confidential) 418 Legal Secretary II Systems Technician I 419 Administrative Services Technician II (Confidential) Workers' Compensation Claims Assistant 420 Deputy City Clerk Employee Benefits Coordinator Executive Assistant Senior Legal Secretary 422 Office Supervisor Systems Technician II Workers' Compensation Claims Examiner I 423 Custodian Supervisor Parking Services Supervisor 424 Buyer 425 Police Facilities Coordinator Public Information Analyst 426 Assistant Planner Central Stores Supervisor Financial Analyst I Senior Systems Technician 427 Administrative Analyst I Animal Control Supervisor EXHIBIT A

117 City of Modesto Class Range Table - Management and Confidential Non-Sworn Classes Page -2 RANGE TITLE Human Resources Analyst I Police Civilian Supervisor Technology Solutions Analyst I Workers' Compensation Claims Examiner II 428 Assistant City Clerk 430 Associate Planner Financial Analyst II Senior Buyer Software Analyst I Systems Engineer I 431 Administrative Analyst II Events Coordinator Human Resources Analyst II Risk and Loss Control Coordinator Senior Workers' Compensation Claims Examiner Technology Solutions Analyst II 432 Compost Facility Supervisor Junior Engineer Neighborhood Preservation Supervisor Operations Supervisor Parks Project Coordinator Recreation Supervisor Senior Crime and Intelligence Analyst Wastewater Collection Systems Supervisor Water Quality Control Plant Maintenance Supervisor 433 Water Resources Analyst 434 Customer Services Supervisor Financial Analyst III Recycling Program Coordinator Senior Community Development Program Specialist Software Analyst II Systems Engineer II 435 Assistant Transportation Planner Business Analyst

118 City of Modesto Class Range Table - Management and Confidential Non-Sworn Classes Page -3 RANGE TITLE Cultural Services Program Manager Emergency Medical Services Coordinator Facility Supervisor Management Analyst Organizational Development Coordinator Public information Coordinator Transit Analyst Weed and Seed Program Coordinator 436 Assistant Engineer Deputy Fire Marshal Electrical Supervisor Environmental and Water Quality Laboratory Supervisor Housing Rehabilitation Supervisor Senior Planner 437 Senior Human Resources Analyst 438 Associate Land Surveyor Integrated Waste Specialist Property Agent Public Safety Business Services Analyst Senior Financial Analyst Senior Software Analyst Senior Systems Engineer Water Distribution and Production Supervisor 439 Administrative Services Officer Associate Transportation Planner Senior Business Analyst 440 Associate Engineer Environmental Regulatory Compliance Administrator Recreation Program Manager Water Quality Control Operations Supervisor

119 City of Modesto Class Range Table - Management and Confidential Non-Swom Classes Page -4 RANGE TITLE 441 Building Maintenance Manager Events Supervisor Housing and Urban Development Manager Infrastructure Financing Program Administrator Parks Operations Manager Parks Planning and Development Manager Streets Manager Urban Forestry Manager Wastewater Collections Manager 442 Budget and Financial Analysis Manager Construction Inspection Supervisor Customer Services Manager Principal Accountant Principal Software Analyst Principal Systems Engineer Purchasing Manager 443 Associate CivilITraffic Engineer Senior Transportation Planner 444 Airport Manager Building Inspection Program Coordinator Building Inspection Supervisor Fleet Manager Principal Planner Solid Waste Program Manager Transit Manager 446 Assistant Chief Building Official Information Technology Manager Water Quality Control Plant Manager 447 Traffic Operations Engineer Water Systems Manager

120 City of Modesto Class Range Table - Management and Confidential Non-Sworn Classes Page -5 RANGE TITLE 450 Business Development Manager Chief Building Official Planning Manager Senior Civil Engineer 452 City Engineer Traffic Engineer

121 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING A LETTER OF UNDERSTANDING BETWEEN THE CITY OF MODESTO AND MODESTO CITY FIRE FIGHTERS' ASSOCIATION TO AMEND THE 2006 MOU TO PROVIDE COMPENSATION FOR EMPLOYEES IN THE FIRE FIGHTER RELIEF ASSIGNMENT WHEREAS, on December 12, 2006, the City Council, by Resolutiou No , approved a Memorandum of Understanding (MOU) with the Modesto City Fire Fighters' Association (MCFF A), and WHEREAS, the Modesto Regional Fire Authority (MRF A) management has met and conferred with MCFF A to provide compensation for employees in the Fire Fighter relief assignment. WHEREAS, this change will implement the parties agreement to allow MRF A to provided employees assigned as Relief Firefighters an additional two and one-half percent (2.5%) in compensation which was inadvertently omitted in the 2006 MOU. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a Letter of Understanding between the City of Modesto and Modesto City Fire Fighters' Association to amend the 2006 MOU to provide employees assigned as Relief Fire Fighters an additional two and one-half percent (2.5%) in compensation. 06/ HR1KMurdaughlltem

122 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll caj! carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO F HRlKMurdaughiltem

123 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION AUTHORIZING THE SOLE SOURCE PROCUREMENT FOR THE PURCHASE OF AXON FLEX CAMERA VIDEO RECORDER PUBLIC SAFETY EQUIPMENT FOR THE MODESTO POLICE DEPARTMENT, TO TASER INTERNATIONAL, INC., SCOTTSDALE, AZ; AND AUTHORIZING THE PURCHASING MANAGER, OR HIS DESIGNEE, TO ISSUE A PURCHASE ORDER FOR AN ESTIMATED TOTAL COST OF $127,568 WHEREAS, law enforcement agencies throughout the country are using in-car videos to document interactions between law enforcement officers and citizens, and WHEREAS, the newest and more efficient technology available today is to have officers wear recordable video and audio cameras, and WHEREAS, these cameras can be utilized at any location and have many key benefits such as reducing citizen complaints, enhancing criminal convictions, streamlining investigations, and improving trust with the community, and WHEREAS, utilizing this program funding to purchase the camera video recorders would be a vital asset to the Modesto Police Department, and and WHEREAS, extensive research, planning, and field testing began in May of20l1, WHEREAS, after months of field testing by Modesto Police Officers, and consultation with Information Technology and administration, the Taser AXON Flex body worn camera has been selected as the preferred body worn camera system for the department, and WHEREAS, Taser International is the sole manufacturer and distributor of the Taser AXON Flex body worn camera system to law enforcement agencies, and 06/12/2012IMPD/ASchlenkerlItem

124 WHEREAS, a Grant Adjustment Notice was submitted and approved by US Department of Justice for the Sole Source Authorization, and WHEREAS, on September 27,2011, by Resolution , Council approved the Edward Byrne Memorial Justice Assistance Grant and using the City of Modesto Police Department's allocation of$127,568 to purchase wearable recording devices, and WHEREAS, Modesto Municipal Code Section generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid. However, there are exceptions Jo the rule set forth in the Modesto Municipal Code. One exception, MMC Section (b) states whereas the purchasing agencies' requirements can be met solely by a single article or process; the sole source procurement for the purchase of Axon Flex Camera Video Recorder Public Safety Equipment for the Modesto Police Department, to Taser International, Inc., Scottdale, AZ, conforms to the Modesto Municipal Code, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes the sole source procurement for the purchase of AXON Flex Camera Video Recorder Public Safety Equipment for the Modesto Police Department, to TASER International, Inc., Scottsdale, AZ, BE IT FURTHER RESOLVED that the Purchasing Manager, or his designee, is hereby authorized to issue a purchase order for an estaimted total cost of$127, /12l2012nvtPD/AScbienkerlItem

125 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the lih day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: ~'Ci (SEAL) APPROVED AS TO FORM: By: SUS \<\ ALCALA WOOD, City Attorney 061l2l2012IMPDI ASchlenkerlitem

126 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING NEIGHBORHOOD STABILIZATION PROGRAM 3 MEMORANDUMS OF UNDERSTANDING WITH THE HOUSING AUTHORITY OF THE COUNTY OF STANISLAUS, HABITAT FOR HUMANITY, STANISLAUS COUNTY AND STANISLAUS COUNTY AFFORDABLE HOUSING CORPORATION; AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO SIGN ALL RELATED DOCUMENTS CONTINGENT UPON THE SATISFACTORY COMPLETION OF ENVIRONMENTAL REVIEW AND RECEIPT BY CITY OF MODESTO OF A RELEASE OF FUNDS FROM THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT UNDER 24 CFR PART 58 WHEREAS, on February 8, 2011, the City Council, by Resolution No , approved the Neighborhood Stabilization Program 3 (NSP3) grant award in the amount of$2,951,549, and WHEREAS, the U.S. Department of Housing and Urban Development (HUD) approved the City's original NSP3 Plan on March 9, 2011, and WHEREAS, on May 22,2012, the City Council, by Resolution No , authorized staff to prepare sub-recipient and developer agreements with the Housing Authority of the County of Stanislaus (HACS), Habitat for Humanity, Stanislaus County (Habitat) and Stanislaus County Affordable Housing Corporation (STANCO), respectively, to implement the NSP3 Plan, and WHEREAS, the City will provide NSP3 funding to its partners in the form of forgivable and/or assumable acquisition and construction loans for each unit and will impose affordability restrictions on these units for a period of at least 20 years, and? G. ~ >,.-, c. \ rr~~~~~iiu.~~~lihmeownership units will be sold to eligible S 1 1 THIS RESOLUTION W RESCINDED BY MODESTO 06/1m1J~~OIll Homebuyer Program, and Or.I'I':"s ',+ c..p\>\.<:.s..j..<> c.. N ""(:,""'\. "... \.."~.~ S.\."-b I.~c..,.,.,,"7c""'2r"~ 3 (N~"~) M0u-"I...J 'I-., 4 h... \-\ cv"'''-'2) (:\".>v\-' ~,..... )',,~ J. h c.. C> "'""' \- 'I " S; 5:>, ':,:, ,5 d",,"<:.j. 3v"",- 1;;J,.:;lC';)

127 WHEREAS, the program income received from the HACS sales will be recycled by the City for future eligible homebuyer loans, and WHEREAS, Habitat's homeownership units will be sold to eligible homebuyers through Habitat for Humanity's Homebuyer Program in which homebuyers assume nointerest, amortized loans with Habitat as lender, and payments, and WHEREAS, Habitat will retain the proceeds from the monthly mortgage WHEREAS, rental proceeds will be retained by HACS or STANCO as net operating income to operate, maintain, and repair the units, and WHEREAS, the draft MOU's were reviewed by the Citizens' Housing and Community Development Committee on May 16, 2012, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the NSP3 Memorandums of Understanding with the Housing Authority of the County of Stanislaus, Habitat for Humanity, Stanislaus County and Stanislaus County Affordable Housing Corporation, BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to sign all related documents contingent upon the satisfactory completion of environmental review and receipt by City of Modesto of a release of funds from the U.S. Department of Housing and Urban Development under 24 CFR Part ] 21PR&NlHRamirezlItem ]2-240

128 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12'h day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Mayor Marsh None Muratore (SEAL) APPROVED AS TO FORM: By: ~~~~ ~ A ALCALA WOOD, City Attorney 061I2/20121PR&N/HRamirezlItem

129 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING A SECOND AMENDMENT TO THE LEASE AGREEMENT WITH LOUIS BOER, JR, TO EXTEND THE LEASE OF CITY OWNED PROPERTY LOCATED AT THE NORTHWEST CORNER OF FRAZINE ROAD AND LA COSTE LANE FOR AN ADDITIONAL FIVE YEARS, AND TO MODIFY THE PAYMENT REMITTANCE PROCESS, AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE SECOND AMENDMENT TO THE AGREEMENT WHEREAS, the Frazine Road property is an agricultural land parcel of approximately twelve (12) acres and located at the northwest comer of Frazine Road and La Coste Lane, and WHEREAS, property was acquired by the City of Modesto as part of a larger purchase of acreage to supply land for the Regional Water Treatment Plant storage tanks known as the Terminal Reservoir, and WHEREAS, on May 23, 2006, by Resolution No , City Council approved a lease agreement with Louis Boer, Jr., and WHEREAS, said lease will expire on May 29, 2912, and WHEREAS, this second amendment will extend the lease agreement for another five-year term and to modify the payment remittance process for the property taxes and MID irrigation fees. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the Second Amendment to the Agreement with Louis Boer, Jr., to extend the lease of city-owned property located at the northwest comer offrazine Road and La Coste Lane for an additional five years, and to modify the payment remittance process. 06/12J2012fPWIDTurneriltem

130 BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the Agreement. The foregoing resolution was introduced at regular meeting of the Council of the City of Modesto held on the lih day of June by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Council member Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: CALA WOOD, City Attorney 06f12/2012IPWIDTumerlitem

131 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING A CONSULTANT AGREEMENT WITH NORTHSTAR ENGINEERING GROUP, INC. FOR PRELIMINARY DESIGN REPORT FOR DEL RIO TANK, PUMP STATION, AND NEW WELL IN AN AMOUNT NOT TO EXCEED $143,989 FOR THE IDENTIFIED SCOPE OF SERVICES, PLUS $14,399 FOR ADDITIONAL SERVICES (IF NEEDED), FOR A MAXIMUM TOTAL AMOUNT OF $158,388, AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT WHEREAS, the City owns and operates the outlying water system in the community of Del Rio, located in Stanislaus County, and WHEREAS, a hydraulic assessment of this system was performed in order to evaluate the system's ability to meet the community's current and build-out demands, and WHEREAS, this assessment identified the need to construct a new 1000 gallon per minute domestic well, 250,000 gallon storage tank, and 1 million gallon per day booster pump station in order to correct existing deficiencies in the system, and WHEREAS, in addition, the City is obligated to provide these improvements by lu1y 15,2013 in accordance with the terms of a Settlement Agreement between the City and the Del Rio Community Association, and WHEREAS, in accordance with the Public Works Department Major Scope Policy approved on September 26, 2006, all projects exceeding $1,000,000 are required to be presented at Council at the Preliminary Design Report stage if the projected cost estimate is expected to exceed the approved project budget by more than 10%, and WHEREAS, given the unique and specialized expertise required for design of tanks and pump stations, it was determined that a consultant would be necessary to provide design services for this project, and UP&PIRChristensenlItem

132 WHEREAS, the scope of services to be provided under this agreement includes completing 35% design services for the project and summarizing the design and cost estimate in a Preliminary Design Report (PDR), and WHEREAS, upon completion, this report will be presented to City Council for acceptance, and WHEREAS, it is then intended to execute a consultant agreement in order to prepare final design documents which will be bid for construction, and WHEREAS, in compliance with Administrative Directive 3.1, Selection Procedures for Professional Consultants who Provide Architectural and Engineering Services for Capital Projects, approval was granted from the Director of Utility Planning & Proj ects to issue a combined Request for Qualifications and Request for Proposal (RFQ I RFP), and WHEREAS, these RFQ/RFP's were mailed to III civil engineering firms, both local and non-local, and WHEREAS, of those 111 firms, the City received 8 responses, and WHEREAS, the selection committee, consisting of two UP&P Engineering staff and one Public Works Operations supervisor, reviewed all 8 of the submitted Statements of Qualifications and Proposals, and narrowed the selection to four consultants, and WHEREAS, these top four firms were then selected to interview with the City, and WHEREAS, NorthStar Engineering (NorthStar) was determined to be the most qualified consultant of the four firms to provide the required services for the project, and 06112/20 12IUP&P/RChristensenlItem

133 WHEREAS, following this determination by the selection committee, a final consultant agreement scope, cost and schedule were negotiated with NorthStar, and WHEREAS, as part of the RFQIRFP, all responding consultants were required to indicate the total percentage of their estimated cost that would be applied to local firms, and WHEREAS, in accordance with Administrative Directive 3.1, this percentage of local participation was then used as one of the scoring criteria in review of the RFQ/RFP, and WHEREAS, NorthStar is a local firm, and is using local subconsultants for electrical design and geotechnical engineering services, and WHEREAS, NorthStar has included a larger, non-local firm, Carollo Engineers, Inc. for purposes of providing peer review of their work product, and WHEREAS, Based on the final negotiated cost of the agreement, 91.0% of the total agreement cost will be paid to local firms, and WHEREAS, City staff recommends approving a Consultant Agreement with NorthStar for preparation of Preliminary Design Report for Del Rio Tank, Pump Station, and New Well as the City does not have the staffing level to complete the PDR for the Del Rio Tank, Pump Station, and New Well project, and current workload levels do not provide for timely in-house solutions/responses, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a Consultant Agreement for Preliminary Design Reports for Del Rio Tank, Pump Station, and New Well with NorthStar Engineering Group, Inc. for an 06/12/20 12!UP&PfRChristensenlItem

134 amount not to exceed $143,989 for the identified scope of services, plus $14,399 for additional services (if needed), for a maximum total amount of $158,388. BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the Agreement. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Geer, Gunderson, Lopez, Cogdill, Mayor Marsh None Cogdill (SEAL) APPROVED AS TO FORM: 06/ /UP&PIRChristensenlitem

135 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF MODESTO AND SUE FISCOE, DBA FISCOE MANAGEMENT, AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT; AND RESCINDING RESOLUTION NO WHEREAS, the City of Modesto owns, operates and manages the Municipal Golf Course ("Muni"), Dryden Park Municipal Golf Course ("Dryden Course"), Dryden Park Municipal Golf Course Driving Range ("Dryden Range"), Creekside Municipal Golf Course (Creekside Course") and Creekside Municipal Golf Course Driving Range ("Creekside Range"), and WHEREAS, on April 28, 2009, the City Council, by Resolution No , approved an agreement between the City of Modesto and FM Golf retaining FM Golf as golf course professional to provide golf professional services at Muni Golf Course, Dryden Course, Dryden Range, Creekside Course, Creekside Range, and to provide concession services at Municipal Course, Dryden Course Clubhouse and Creekside Clubhouse, and WHEREAS, on March 24, 2011, an amendment to the above-mentioned agreement between the City of Modesto and FM Golf was approved by the City Manager to incorporate management changes through June 30, 2011 and to then revert back to all originallanguagc of the April 2009 agreement, and WHEREAS, on July 12,2011, the City Council, by Resolution No , approved a new agreement between the City of Modesto and FM to retain FM as golf course professional services at Dryden Course, Dryden Range, Creekside Course, 06/12/20121PRNILFores:ler/ltem

136 Creekside Range, and to provide concession services at Dryden Course Clubhouse and Creekside Clubhouse, and WHEREAS, a new agreement between the City of Modesto and FM Golf is required to retain FM Golf as golf course professional to provide golf professional services and golf management services at Dryden Course, Dryden Range, Creekside Course, Creekside Range, and to provide concession services at Dryden Course Clubhouse and Creekside Clubhouse, and WHEREAS, the City and FM have agreed to a two (2) year contract with two additional five (5) year extension options, and WHEREAS, on June 2,2009, the City Council, by Resolution No , established new green fee rates at all three Modesto Municipal golf courses, and WHEREAS, on May 24, 2011, the City Council, by Resolution No , granted the Director of Parks, Recreation & Neighborhoods Department the authority to offer or approve golf specials at the City of Modesto golf courses, and WHEREAS, the City desires that green fee rates be set by the contracted golf course professionals at the City of Modesto golf courses, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves an Agreement between the City of Modesto and Susan Fiscoe, dba Fiscoe Management to provide golf professional services and golf management services at Dryden Course, Dryden Range, Creekside Course and Creekside Range and to provide concession services at Dryden Course Clubhouse and Creekside Clubhouse effective July 1, / IPRN/LForesterfItem

137 BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the Agreement. BE IT FURTHER RESOLVED that Resolution No is hereby rescinded removing the authority ofthe City of Modesto set green fee rates eflective July 1,2012. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of June, 2012, by Councilmember Burnside, who moved its adoption, which motion being duly seconded by Councilmember Lopez, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: SUS A 06/12/2012lPRNILForester/Item

138 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION APPROVING BUDGET GOALS AND BUDGET PRINCIPLES AS OUTLINED IN THE MAYOR'S BUDGET MESSAGE AND RECOMMENDED BY THE CITY COUNCIL FINANCE COMMITTEE AS PART OF THE FY BUDGET DEVELOPMENT PROCESS WHEREAS, as part of the Mayor's Proposed Budget for FY , the Mayor included Proposed Budget Goals and Budget Principles for the Council's consideration, and WHEREAS, each year the City Council's Finance Committee makes recommendations regarding the upcoming Fiscal Year operating budget and capital improvement program, and WHEREAS, in the development of the FY operating budget, the Finance Committee reviewed and recommended for City Council consideration the attached Proposed Budget Goals and Budget Principles, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the Proposed Budget Goals and Budget Principles as shown in Attachments 4 and 5, which are incorporated by reference herein. 06/12/2012!Finance/CGale!Item

139 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the lih day of June, 2012, by Councilmember Cogdill, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None ABSENT: Councilmembers: None (SEAL) APPROVED AS TO FORM: By: -==d=j~'jli'!c~~:c:-::-=--=c:----- SUS CALA WOOD, City Attorney 06/12/20 12IFinance/CGaleJItem ]2-244

140 Attachment 4 - FY Budget Goals FY Proposed Budget Goals Focus resources on vital public services. Continue efforts which will result in long-term structural budget changes. Reduce deferred maintenance. Increase the City's economic opportunities.

141 Attachment 5 - FY 2012w2013 Budget Principles Recommended Budget Principles 1. Annually Adopt a Structurally Balanced Budget A structurally balance budget means on-going revenues and on-going expenditures are in balance with on-going revenues meeting or exceeding expenditures during the same time period. If a structural imbalance occurs, a plan must be developed and implemented to bring the budget back into balance. 2. Use of One-Time Resources Once brought into balance, one-time revenues (excess reserves about reasonable risk calculations, revenue spikes, prior year budget savings, sale of property, etc) shall not be used for current or new on-going operating costs. Examples of appropriate uses of one-time revenues include early retirement of debt, capital expenditures without significant operating or maintenance costs, and other non-reoccurring expenditures. 3. Budget Revisions New programs, services, or staffing requests are considered in light of the Council's priorities and shall include a spending offset at the time of the request so that the request has a net-zero impact on the budget. 4. Reserves All City funds must maintain an adequate reserve level and/or ending fund balance as determined annually as appropriate for each fund. For the General Fund, the contingency reserve amount, which a minimum of 8% of the operating budget shall be maintained. Any use of the General Fund contingency reserve will require a majority vote of the Council. 5. Debt Issuance Long-tenn General Fund debt will not be incurred to support on-going operating costs (other than debt service) unless such issuance achieves net operating cost savings and such savings can be independently verified. All General Fund debt issuances shall identify a method of repayment or have a dedicated revenue source. 6. Employee Compensation Recognizing that employees are the City's major resource, negotiations for employee compensation shall focus on the total compensation costs (e.g. increases in salary, steps, and benefit costs) while considering the City's fiscal condition, revenue growth, and changes in the cost of living. 7. Capital Improvement Projects Capital Improvement Projects shawnot proceed for projects with annual operating and maintenance costs in the General Fund without City Council certification that funding will be available in the applicable year of the cost impact. Certification shall demonstrate that the entire cost of the project, including operating and maintenance costs, will not require a decrease in the City's core services. 8. Fees and Charges The development of fees and fee increases shall be utilized where appropriate to assure fee program costs are fully recovered by fee revenue.

142 Attachment 5 - FY Budget Principles 9. Grants Staff will seek out, apply for, and effectively administer grants that address the City's priorities, policy objectives, and provide an overall positive benefit to the City. Before a grant is pursued, staff shall provide a detailed fiscal analysis addressing both the immediate and long-term costs and benefits of the grant. With the exception of pilot projects, one-time grant revenues shall not be used to begin or support the costs of ongoing programs. 10. General Plan The General Plan is the primary long-term fiscal planning tool. Recommendations to create new development capacity beyond the existing General Plan shall be analyzed to ensure that capital improvements and operating/maintenance costs are within the City's financial capabilities. 11. Performance Measurement All requests for funding shall include performance measure data so funding requests can be reviewed and approved in light of anticipated service level outcomes.

143 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION APPOINTING GILLIAN WEGENER AS THE POET LAUREATE OF THE CITY OF MODESTO FOR A TWO-YEAR TERM FROM JUL Y 1,2012 THROUGH JUNE 30, 2014 WHEREAS, on July 13, 1993, by Resolution No , the City Council established a non-salaried honorary position to be known as "The Poet Laureate of the City of Modesto", and WHEREAS, the Culture Commission has the responsibility for nominating and recommending appointments to the Poet Laureate position, and WHEREAS, the purpose of a Poet Laureate is to present original poems at various official occasions, and WHEREAS, a copy of the City of Modesto Policy regarding said non-salaried honorary Poet Laureate position is on file in the office of the City Clerk, and WHEREAS, the Culture Commission met on March 26,2012 and concluded that Gillian Wegener met the criteria for fulfilling the obligations as Poet Laureate of the City of Modesto, and WHEREAS, the Culture Commission recommended the appointment of Gillian Wegener as Poet Laureate of the City of Modesto, and WHEREAS, the Safety and Communities Committee met on May 7, 2012 and supported the Culture Commission's recommendation to appoint Gillian Wegener as the City of Modesto's Poet Laureate, and NOW, TIIEREFORE, BE IT RESOLVED by the Council of the City of Modesto that the Council hereby approves the appointment of Gillian Wegener as the Poet Laureate of the City of Modesto from July 1, 2012 through June 30, J IPR&NlWMathes/llem I

144 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: By: ~ SUS~XLA WOOD, City Attorney 06/26/2012/PR&NlWMathes/ltem I

145 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPOINTING PHILIP S. ANSELMO TO THE EQUAL OPPORTUNITY / DISABILITY COMMISSION WHEREAS, Section 1102 of the Charter of the City of Modesto authorizes the City Council to appoint members to various Boards and Commissions, and WHEREAS, the Economic Development Committee met on June 11,2012, and recommended appointment of Philip S. Anselmo to the Equal Opportunity/Disability Commission. as follows: NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto SECTION 1. PHILIP S. ANSELMO is hereby appointed to the Equal Opportunity / Disability Commission with a term expiration of January 1,2016. SECTION 2. The City Clerk is hereby directed to transmit a copy ofthis resolution to the newly appointed member of the Equal Opportunity/Disability Commission, and the Secretary thereof /2012!HR1SKasper/Item

146 The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Cogdill, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: By: ~ SUS ALCALA WOOD, CIty Attorney 06/26/2012IHRlSKasperiItem

147 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING THE REAPPOINTMENT OF JEFFREY R. DARNELL TO THE AIRPORT ADVISORY COMMITTEE WHEREAS, Section 1102 of the Charter of the City of Modesto authorizes the City Council to appoint members to various Boards and Commissions, and WlIEREAS, whereas the City Council approved, by Resolution Number , the appointment of Jeffrey R. Darnell to the Airport Advisory Committee for a term ending June 30, 2012, and WHEREAS, Jeffrey R. Darnell has expressed interest in continuing to serve as a member of the Airport Advisory Committee, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that Jeffrey R. Darnell is hereby reappointed to the Airport Advisory COlllmittee with a term expiration of June 30, The foregoing resolution was introduced at a regular meeting ofthe Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Geer, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None ABSENT: Councilmembers: (SEAL) None ATTEST: c/!j~ajj;j ~/ STEPHA/NIE LOPEZ, Cit)TIer APPROVED AS TO FORM: By: if;!!! SUSAN ALCALA WOOD, City Attorney 06/26/20121HRfJThieleiltem

148 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING THE FISCAL YEAR ANNUAL OPERATING BUDGET WHEREAS, a financial analysis has been completed and it has been determined that a budget adjustment is required to the Annual Budgets of the City of Modesto for Fiscal Year , NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the Fiscal Year annual operating budget as shown in Exhibit A, which is attached hereto and incorporated by reference herein. BE IT FURTHER RESOLVED that the Director of Finance, or her designee, is hereby authorized to take the necessary steps to implement the provisions of this resolution. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following votes: AYES: NOES: ABSENT: (SEAL) Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None A J ATTEST: ;zj(i ApiJJj/ ud y stepha IE LOPEZ, City ClerkU APPROVED AS TO FORM: F inanceffs wearingen/ltem

149 City Council, June 26, 2012 Monthly Budget Adjustment Report EXHIBIT A COMMUNITY AND ECONOMIC DEVELOPMENT The Capital Improvement Project Task Force approved $1,300,000 in Right-of-Way match funding for the Pelandale Interchange at SR99 project. An adjustment is necessary to appropriate these funds from the Capital Facilities Fees - Streets Fund Reserves, PUBLIC WORKS A budget adjustment is necessary to appropriate $292,500 from Storm Drain Reserves to Capital Improvement Project , Maze/Emerald Flooding Solution, for Engineering to fund the construction of a French drain to accommodate flooding issues at the intersection of Maze Boulevard and Emerald Avenue,

150 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING THE FISCAL YEAR ANNUAL OPERATING BUDGET WHEREAS, a financial analysis has been completed and it has been determined that a budget adjustment is required to the Annual Budgets ofthe City of Modesto for Fiscal Year , NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the Fiscal Year annual operating budget as shown in Exhibit A, which is attached hereto and incorporated by reference herein. BE IT FURTHER RESOLVED that the Director of Finance, or her designee, is hereby authorized to take the necessary steps to implement the provisions of this resolution. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following votes: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: ATTEST:+-~~~~ ~~~~ STEPID\NIE LOPEZ, City, Cl r 06/ lFinance/CGalelItem

151 ~ ~ ~ ~ Exhibit A - Mid-Year Budget Adjustments Rmnu, I'nte;fund 'R,.,oo, I R,.,nue! PI,n, A«Dunt N,m, IRmnue,Appm..' Fe" I Rmnue I Buildin, Fee ~ Alllnd"ive!Revenue IBuildine-1 I Rmnue ir,venue IEI,ct'i'" '54 IR,.enue Ii,Cod, ~Revenue II Permits i! j i Credit labor Charges IReveooe "P"mili Uni" IRevenue "Addition"nd I P"mit, I Re.enue I New,I P"mi" I Rmnue, god R,model P"mili I R,.,nue II " P"mm IR,.enue ICoovin, Fe" ""004 IR,venue ~ SeNice C i IRevenue V",nt Pmp,rti", IRev,nue NPU I, F,,, I Rmnue I, ~ 5'~ice C, I R,v,nue O,d" Fin" I Rmnu, land Oi.i,ion F,,, I Revenu, M,p Checkin, Fe" 10100~ S9 IR,v,nue leg,' IQii IRovenue I IRev,nu, IWili IR,v,nue Ou"id,. I Rmnue IReve~u, IWiIi IRovenue IRov,nu, Ip,~",,F,e ~ :no:4soo4 IR,v,nu, Ilnte,fund (h..,,, ~ 5e~ice C"dit I i.' IRevenue i,re.enue!oii IRevenue I PI,n Checkin, Fm I01w~ IRe.enue i " Fe" IRevenue i Fe" IRevenue Gene,,', i,p',n I Re.enue lland IRev,nu,. n Fee, IRev,nu, IG,ne,,' I e Fee 0100~ 1100~1. 10l00~ IRe.enue TIme,nd IR,venue R,ven", P"mit< Rev,nu,'nt,,,"nd' Revenu,.,... R'venu, R,venue,, Fee Rev,nu, P,yoff I Rov,nu,, Fee IRevenue R,venue, F,,,., C"dit CY 5ewoed T,m Re.,nue 15a'" god U" Ta." Revenue I i Rovenue IMili Ta. Rov,nu, 'VlF 5wao,..' ",,,,n,e IReoai"nd i, 5e~ice,.. ".,.... Rovenue IPo'ke 5"vkg,; IR,venue ICountv IR~nue IRev,nu, ICon"," IRevenue 'OST IRov,nue Ip05T. '... '. t of Juroce, Gene,,' Fund ".. Finance I Finance IFi~~~;~ IFinance IRnance IGen"a' IG,ne,,' = IG,n"a' ~, Emnomi, Dev, Economi, Dov,& E,onomk Dev, Emnomi, Dev, E,onomk Dov, Emnomi, Dov, Emnomic Dov v & Emnomi, Dov ;~" Emnomic Dov v & Emnomic Dov ~ Economic Oev 'Economk Dov, Emnomic Dev,& Emnomk 0" v & Emnomic Dov, Emoomk Dev, & Emnomic Dov V & Economic Dev, & Economic Dev, " Emnomi, De. V & Emnomic Dev,& Economic Dev ;. Emnomi, DeY Dev Dev ;&~ Emnomk 0.. D.. i,& Economk 0.. i;)< i v& v & Economic Dev,Dev D,v v & Emnomic Dev i,& >V& i v& i.& v& i v&,& i i,& i 11& i 1$ 1$ 1$ 1$ 1$ 1$ 1$ 1$ 1$ 1$ Cu,cent Budg" 1$, 1$, 1$ 146, ,000,, 30, ,273 69, ,298 87,967 I $ ~ I $ 1$ SO 42, , ,317 I $ 40,000 I $ 105,000 I $ I $ ~ I $ 1$ 1, ,OS5 (46,437) 13,330 (318,107) 1,50e (IO,OOe -~~!~ 1$ (105,984}1 $ 184,643) 13,115 52,803 62, ,35 111, ,151 (3[ {15,893] $ (20, $ {32,317} ~,000 5 (81, 12) $ (3,820) 520 1,520 1,840 2,000 I $ 1,600 $ 3,196 I $ 1,840 8,000 I $ 1,240 35,000 I $ (, (309,526) 6,391 (94 ) 5,04e {5,040 83,175 (29,169) 7,77( (5,298 69,257 (61,725 22,805 (10,48 I 5 9,666 (9,666 I $ 88,490 4, ,131 20,000 4,001 5,000 4,000 ila,o!l2 6.4<11,311 '''''''Q (44,000 I $ 50 I $ 12,704 (46,005) 7,050 $ 24,999 2,500 5,999 2,500 ~ 2:~ 875, , , ,000 12, ,013 32,391 1$ 3,9731$ 85,000 I $ 150,000 8,750 I $ (8,750] I $ 115,000] 10,400 I $ (1O,4OC _.",,1 $ 16U~7 IS i lbude" lto OR' 100, fir"' W i ,950 "M' ii,-cw; 808, ,ll 125, WiOO R 11,680 52C 152' l,84c 3600 ii" 1, i i7r~ 600,OOe 5,451 54, ,-;;n 12,324,<;iM 44,4ge , ,500 10,000 7,500,qqi ,526,31: 1.873,20] ~ ,000 65,000 ~

152 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AMENDING THE FISCAL YEAR ANNUAL OPERATING BUDGET WHEREAS, a recommendation was made when the Fiscal Year budget was adopted on June 21, 2012, and it has been determined that budget adjustments are required to the Annual Budget of the City of Modesto for Fiscal Year, , NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the Fiscal Year annual operating budgct as shown in Exhibit A, which is attached hereto and incorporated by reference herein. BE IT FURTHER RESOLVED that the Director of Finance, or her designee, is hereby authorized to take the necessary steps to implement the provisions of this resolution. The foregoing resolution was introduced at a regular meeting of the Council ofthe City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following votes: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: A WOOD, City Attorney JFinancefCGale!Item

153 Exhibit A - Budget Adjustment City of Modesto Budget Adjustment - Recommended at Adoption Meeting Rev/Exp Account Name Department/Fund Adjustment-lnc/fOec) Description Expense Budget Only ~ Salary Adjustment ~ Increase Police/General Fund S Restore five (5) Police Officer positions Budget Only- Benefit Adjustment -Increase Police/General Fund S 200,875 Restore five (5) Police Officer p'ositions ~, Budget Only Salary Adjustment -Increase Police/General Fund S 88,109 Restore one (1) Police Sergeant position t ", Budget Only" Benefit Adjustment Increase Police/General Fund S 50,218 Restore one (1) Pollce Sergeant position :c ~ e Budget Only- Salary Adjustment - Decrease Police/General Fund S (36.154) Eliminate one (1) Pollce Clerk II position.g~ense Budget Only- Benefit Adjustment - Decrease Police/General Fund S (13,432) Eliminate one (1) Police Clerk!I position Expense Budget Only Salary Adjustment - Decrease Parks, Recreation & Neighborhoods/GF S (23.107) Eliminate.75 Admin Office Asst position Expense Budget Only ~ Benefit Adjustment - Decrease Parks, Recreation & Neighborhoods/GF S (15,804) Eliminate.75 Admin Office Asst position Expense Budget Only - Salary Adjustment" Increase Parks, Recreation & Neighbomoods/GF $ 20,246 Restore PR&N funding for worload reorganization Expense Budget Only - Benefit Adjustment- Increase Parks, Recreation & Neighborhoods/GF S 13A97 Restore PR&N funding for worload reorganization Expense Worker's Compensation General Fund $ {610J83j Reduction to General Fund Worker's Comp Expense Expense Worker's Compensation Non General Funds S (101,280) Reduction to Non-General Fund Worker's Comp Expense Revenue Worker's Compensation Fund - S (712,063) Reduction to Worker's Compensation Fund Revenue --

154 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION REJECTING ALL BIDS FOR THE THIRD PARTY ADMINISTRATION OF GENERAL LIABILITY CLAIMS WHEREAS, the City Manager authorized the Purchasing Manager to issue formal Req uest for Proposals (RFP) for the furnishing of General Liability Third Party Administration Services, and WHEREAS, the Purchasing Division issued RFP No General Liability Third Party Administrative Services to twenty-six (26) prospective proposers, two (2) of which were local companies, posted the bid on the City'S website and formally advertised as required by law, and WHEREAS, Proposals were formally opened in the City Clerk's Office. Nine (9) companies chose to respond, one of which was a local vendor. All nine (9) companies provided responsive and responsible proposals, and WHEREAS, an evaluation committee on one City staff member and three (3) technical experts from outside the City evaluated and grated the proposals, and reasons: WHEREAS, City staff requests proposal rejections based on the following Amount of services more costly than anticipated, Regulations regarding federally mandated Medicare reporting of general liability settlements has become less demanding since the RFP process was initiated, and Outsourcing would not lead to staff reduction. 06/ /CMIMAkinlltem

155 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes RFP rejection for the furnishing General Liability Third Party Administration Services for the Department of Human Resources Department, Risk Management Division. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: SUS A ALCALA WOOD, City Attorney 06/26/20121CM/MAkin/Item

156 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING A JOB SHARING AGREEMENT WITH THE CITY OF OAKDALE FOR THE SERVICES OF AN ASSOCIATE PLANNER ON APART-TIME BASIS THROUGH FISCAL YEAR ; AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT WHEREAS, on August 10,2010, the City Council, by Resolution No , approved a job sharing agreement with the City of Oakdale for Associate Planner services on a part-time basis through Fiscal Year , and WHEREAS, on September 6, 2011, the City Council, by Resolution No , approved an extension of the job sharing agreement with the City of Oakdale for the services of an Associate Planner on a part-time basis through Fiscal Year , and WHEREAS, the City of Oakdale has submitted a letter expressing interest to extend job sharing services through Fiscal Year , and WHEREAS, the City of Oakdale seeks the services of a qualified Associate Planner from the City of Modesto on a part-time basis, and WHEREAS, the City of Modesto represents that it has qualified Associate Planners able to provide planning services required by the City of Oakdale including, but not limited to, current planning, advanced (long-range) planning, environmental analysis, design review, growth management, redevelopment, and a variety of other duties as by the City of Oakdale Community Development & Services Director, and WHEREAS, the number of hours of service by an Associate Planner is anticipated to be 16 hours per week, or 832 hours through Fiscal Year , and 06!26!2012/C&EDIPKellylltem II

157 WHEREAS, the agreement continues in effect through June 30, 2013, unless terminated in accordance with the provisions of the termination clause of the Agreement, and WHEREAS, the Agreement enables planning services to be shared between two cities, serves as a revenue source to the City of Modesto, and serves to retain experienced and well trained planning staff, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a job sharing Agreement with the City of Oakdale for the services of an Associate Planner on a part-time basis through Fiscal Year BE IT FURTHER RESOLVED that the City Manager, or designee, is hereby authorized to execute the Agreement. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: (SEAL) Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: APPROVED AS TO FORM: By: -----J~~~ /26/20121C&EDIPKellyntem

158 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING A JOB SHARING AGREEMENT WITH THE CITY OF HUGHSON FOR THE SERVICES OF A SENIOR PLANNER ON AN ON-CALL BASIS THROUGH FISCAL YEAR ; AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT WHEREAS, on August 10,2010, the City Council, by Resolution No , approved a job sharing agreement with the City of Hughson for the services of a Seuior Planner on a part-time basis through Fiscal Year , and WHEREAS, on September 6, 2011, the City Council, by Resolution No , approved an extension of the job sharing agreement with the City of Hughson for the services of a Senior Planner on a part-time basis through Fiscal Year , and WHEREAS, the City of Hughson has submitted a letter expressing interest to extend job sharing services through Fiscal Year , and WHEREAS, the City of Hughson seeks the services of a qualified Senior Planner from the City of Modesto on a on-call basis, and WHEREAS, the City of Modesto represents that it has qualified Senior Planners able to provide planning services required by the City of Hughson including, but not limited to, current planning, advanced (long-range) planning, environmental analysis, design review, growth management, redevelopment, and a variety of other duties as assigned by the City of Hughson Planning Director, and WHEREAS, the agreement continues in effect through June 30, 2013, unless terminated in accordance with the provisions of the termination clause of Agreement, and 06/ /C&ED/PKellylltem II

159 WHEREAS, the Agreement enables planning services to be shared between two cities, serves as a revenue source to the City of Modesto, and serves to retain experienced and well trained planning staff, NOW, THEREFORE, BE IT RESOLVED by the Council ofthe City of Modesto that it hereby approves ajob sharing Agreement with the City of Hughson for the services of a Senior Planner on a part-time basis through Fiscal Year BE IT FURTHER RESOLVED that the City Manager, or designee, is hereby authorized to execute the Agreement. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: ~~~~------~.~ ALCA A WOOD, City Attorney 06/26/2012/C&EDIPKellylltem II

160 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION ESTABLISHING THE CALCULATION FOR THE APPROPRIATION LIMIT FOR THE FISCAL YEAR ANNUAL BUDGET WHEREAS, Proposition IV of the California State Constitution requires the City to establish an appropriation limit calculation each fiscal year, and WHEREAS, Article XIIIB of the California Constitution specifies that appropriations made by State and local governments may increase annually by a factor comprised of the change in population combined with either the change in California per capita personal income or the change in the local assessment roll due to local nonresidential construction, and WHEREAS, the attached schedule shows the preferred price and population factors to be used and the appropriation limit with the recommended factors in calculating the limit are the price factor of "state growth in per capita income" and the population factor of "growth rate in the city limits of Modesto", and Department, WHEREAS, a copy of said report is on file in the City of Modesto Finance NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that the appropriation limit calculation is hereby established as shown on Schedule A, attached hereto, and made a part hereof. BE IT FURTHER RESOLVED that the Finance Director, or her designee, is hereby authorized to take the necessary steps to implement the provisions of this resolution JFinanceffSwearingenlltem

161 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following votes: AYES: NOES: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None ABSENT: Councilmembers: (SEAL) None ATITST vj~ STEPH NIE LOPEZ, CIty C APPROVED AS TO FORM: 06126!2012lFinanceffSwearingenlItem

162 FISCAL YEAR SCHEDULE A PROPOSITION 4 APPROPRIATION LIMIT CALCULATION FY Appropriation Limit $328,704,401 Adj ustment Factors Per Capita Personal Income Change Population Change (Modesto) 3.77% 0.68% Per Capita converted to a ratio Population converted to a ratio Calculation off actor for FY Adjustment $14,725,957 FY Appropriation Limit $343,430,358 Article XIIIB places a limit on most, but not all, govermnent revenue sources. The limit applies to appropriations from proceeds of taxes from both the general fund and special funds of govermnent entities. Proceeds of taxes include tax revenues, interest earnings on invested tax revenues, and any revenues collected by a regulatory license fee or user charge in excess of the amount needed to cover the cost of providing the regulation, product, or service. Appropriations from nontax revenues, including the City's enterprise funds, are not subject to the limit.

163 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AUTHORIZING THE AWARD OF BID FOR THE PURCHASE OF AIRCRAFT RESCUE FIRE FIGHTING (ARFF) EQUIPMENT, TOOLS AND CLOTHING, THROUGH THE PUBLIC WORKS DEPARTMENT, MODESTO CITY AIRPORT DIVISION, TO L.N. CURTIS & SONS, OAKLAND, CA, FOR AN ESTIMATED TOTAL COST OF $58,676 WHEREAS, the Modesto City-County Airport is required to maintain an FAA approved level of firelrescue support for commercial airline. operations. The on-airport fire station is staffed by Modesto Fire personnel during commercial operations and is equipped with two specialized ARFF trucks, and WHERAS, the Federal Aviation Administration grant was approved on June 10, 2008, the City Council, by Resolution No , accepted Federal Airport Improvement Grant Offer AlP # in the amount of$1,045,000 that included funding for the new Aircraft Rescue Fire Fighting Truck, Tools, Equipment and Clothing, and WHEREAS, the City Council, by Resolution No , authorized the Purchasing Manager to issue formal Request for Bids (RFB), for equipment through various competitive processes with the Purchasing Division coming back to Council for award authorization, and WHEREAS, the Purchasing Division issued RFB No for the purchase of ARFF Equipment, Tools and Clothing to twenty-eight (28) prospective bidders, posted the bid on the City's website and formally advertised as required by law. No local vendors can provide this type of specialized equipment, tools and clothing, and 06/26/2012lFinanceJPW fmtorresjitem

164 WHEREAS, RFB's were formally opened in the City Clerk's office. Of the twenty-eight (28) prospective bidders, six (6) companies chose to respond. All six (6) companies provided responsive and responsible bids, and WHEREAS, sufficient funds are budgeted in Fiscal Year , in CIP # ,and WHEREAS, a Federal Aviation Administration (FAA) Airport Improvement Program Grant is providing 95% of the funding for this equipment, tools and clothing acquisition. The remaining 5% of the cost is reimbursable by the Passenger Facility Charge collected on airline passengers, and WHEREAS, Modesto Municipal Code Section generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid. The award of bid for the purchase of Aircraft Rescue Fire Fighting Equipment, Tools and Clothing to L.N. Curtis & Sons, Oakland, CA, conforms to the Modesto Municipal Code, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes the award of bid for the purchase of Aircraft Rescue Fire Fighting (ARFF) Equipment, Tools and Clothing, through the Public Works Department, Modesto-City Airport Division, to L.N. Curtis & Sons, Oakland, CA BE IT FURTHER RESOLVED that the Purchasing Manager, or his designee, is hereby authorized to issue a purchase order for a total estimated cost of $58, J2012JFinanceIPWIMTorres/Item

165 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: By: IFinanceIPWlMTorreslItem

166 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AUTHORIZING THE AWARD OF BID FOR THE PURCHASE OF A TRUCK WITH AERIAL BUCKET ~FOR THE PARKS, RECREATION AND NEIGHBORHOODS DEPARTMENT, PRUNED REFUSE COLLECTION DIVISION, THROUGH THE PUBLIC WORKS DEPARTMENT, FLEET SERVICES DIVISION, TO TEREX UTILITIES INC., WATERTOWN, SD, FOR AN ESTIMATED COST OF $175,778 WHEREAS, the City Manager authorized the Purchasing Manager to issue fonnal Request for Bids (RFB) for new vehicles and heavy equipment, through various competitive processes, with the Purchasing Division coming back to Council for award authorization. The truck with aerial bucket is included in the new vehicles and heavy equipment list authorized by the City Manager, and WHEREAS, the truck with aerial bucket is used by the Parks, Recreation and Neighborhoods Department, Pruned Refuse Collection Division. The truck with aerial bucket has been subjected to a thorough evaluation and has met or exceeded the replacement criteria before being placed on the replacement list. The truck with aerial bucket falls under the City's compliance program, approved by the California Air Resources Board, requiring a progressive program to remove older diesel trucks from servi ce, and WHEREAS, the Purchasing Division issued RFB No for the purchase of a truck with aerial bucket to twelve (12) prospective bidders, posted the bid on the City's website and fonnally advertised as required by law. No local vendors can provide this type of vehicle, and 06/ IFinancefPW/MTorres!1tem

167 WHEREAS, RFB's were fonnally opened in the City Clerk's office. Of the twelve (12) prospective bidders, two (2) companies chose to respond. One company provided a responsive and responsible bid, and WHEREAS, based on providing the lowest responsive and responsible bid, City staff recommends the award of bid for the purchase of a truck with aerial bucket to Terex Utilities, Inc., Watertown, SD, for a total estimated cost of $175,778, and WHEREAS, Sufficient funds are budgeted in Fiscal Year , in account # , and WHEREAS, Modesto Municipal Code Section generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be fonnally bid. The award of bid for the purchase of a truck with aerial bucket to Terex Utilities, Inc., Watertown, SD, confonns to the Modesto Municipal Code. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes the award of bid for the purchase of a truck with aerial bucket for the Parks, Recreation and Neighborhoods Department, Pruned Refuse Collection Division, through the Public Works Department, Fleet Services Division, to Terex Utilities Inc., Watertown, SD. BE IT FURTHER RESOLVED that the Purchasing Manager or his designee to issue a purchase order for a total estimated cost of $175, / IFinance/PW /MT orresjltem

168 . The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: OOD, City Attorney 06/26/20 12IF inance/pw IMf orres/item

169 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION AUTHORIZING THE AWARD OF BID FOR THE PURCHASE OF A UTILITY TRUCK WITH CRANE FOR THE PUBLIC WORKS DEPARTMENT, WASTEWATER DIVISION, THROUGH THE FLEET SERVICES DIVISION, TO TOWNE FORD, REDWOOD CITY, CA, FOR AN ESTIMATED TOTAL COST OF $80,613 WHEREAS, the City Manager authorized the Purchasing Manager to issue formal Request for Bids (RFB) for new vehicles and heavy equipment, through various competitive processes, with the Purchasing Division coming back to Council for award authorization. The utility truck with crane is included in the new vehicles and heavy equipment list authorized by the City Manager, and WHEREAS, the utility truck with crane is used by the Public Works Department, Wastewater Division. The utility truck with crane has been subjected to a thorough evaluation and has met or exceeded the replacement criteria before being placed on the replacement list. The utility truck with crane falls under the City's compliance program, approved by the California Air Resources Board, requiring a progressive program to remove older diesel trucks from service, and WHEREAS, the Purchasing Division issued RFB No for the purchase of a utility truck with crane to nineteen (19) prospective bidders, posted the bid on the City's website and formally advertised as required by law. Two (2) of the bidders are located within Stanislaus County, one of which is a local vendor, and WHEREAS, RFB's were formally opened in the City Clerk's office. Of the nineteen (19) prospective bidders, three (3) companies chose to respond. The local vendor did not submit a bid. All three (3) companies provided responsive and responsible bids, and 06126J2012lFinancelPWIMTorres/item

170 WHEREAS, Based on providing the lowest responsive and responsible bid, City staff reconnnends the award of bid for the purchase of a utility truck with crane to Towne Ford, Redwood City, CA, for a total estimated cost of $80,613, and WHEREAS, sufficient funds are budgeted in Fiscal Year , in account # , and WHEREAS, Modesto Municipal Code Section generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid. The award of bid for the purchase of a utility truck with crane to Towne Ford, Redwood City, CA, conforms to the Modesto Municipal Code. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes the award of bid for the purchase of a utility truck with crane for the Public Works Department, Wastewater Division, through the Fleet Services Division to Towne Ford, Redwood City, CA. BE IT FURTHER RESOLVED that the Purchasing Manager or his designee to issue a purchase order for a total estimated cost of 80, /2012IFinanceIPWIMTorresJltem

171 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day ofjune, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: ATTEST: lerk By: ~S~U~S~AN~A~~~~~~O~D~,~C~i~ry-A~tt-o-m--ey- 06/26/2012/FinancelPW!I\1Torreslitem

172 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION AUTHORIZING THE PURCHASING MANAGER TO PURCHASE DELL COMPUTER WORKSTATION REPLACEMENTS, TECHNOLOGY HARDWARE/SOFTWARE PRODUCTS AND SERVICES THROUGH DELL MARKETING L.P. FOR FISCAL YEAR BY ACCESSING THE TERMS OF THE WESTERN STATE CONTRACT ALLIANCE (WSCA) CONTRACT NUMBER B27160 IN THE AMOUNT NOT TO EXCEED $650,000 WHEREAS, the City has an ongoing need to purchase computer workstation replacements, technology hardware/software products, and services managed by the Information Technology Department, and WHEREAS, Dell Marketing has been providing personal computers to the City for the past fifteen years, and WHEREAS, during that time the City has received Dell contractual pricing by taking advantage of the Western States Contracting Alliance (WSCA), and WHEREAS, WSCA is a coalition of fifteen western states which formed as a means by which participating states could join together to receive cost effective pricing on personal computers based on economics of scale, and WHEREAS, the expenditures for the Dell Computer Workstations have been approved by Council through the budget process, and WHEREAS, the funds will be available for the purchase of Dell Workstations in the amount not to exceed $650,000, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes the Purchasing Manager to purchase computer workstations replacements, technology hardware/software products and services through Dell 06/26/2012lIT IBSastokas/ltem

173 Marketing L.P. in the amount not to exceed $650,000 by accessing the terms of the WSCA contract. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: ~~~~~~~~~~~ SUSAN CALA WOOD, City Attorney 06/26/20121IT IBSastokasiltem

174 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION AMENDING THE FISCAL YEAR INFORMATION TECHNOLOGY OPERATING BUDGET TO APPROPRIATE $300,000 FROM THE INFORMATION TECHNOLOGY FUND WHEREAS, the City has a need to amend the Fiscal Year Information Technology budget to purchase Dell Computer Workstations mauaged by the Information Technology Department, and WHEREAS, the expenditures for the Dell Computer Workstations have been approved by Council through the budget process, and WHEREAS, upon approval, the funds will be available for the purchase of Dell Workstations in an amount not to exceed $650,000, and WHEREAS, the Fiscal Year Operating Budget must be amended as shown in Exhibit A, which is incorporated by reference herein, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the Fiscal Year Information Technology Operating Budget as shown in Exhibit A. 06l f1T/BSastokasJItem

175 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: SUSAN CALA WOOD, City Attorney 06/ lTIBSastokaslltem

176 ExhihitA The City of Modesto is in need of replacing computer workstations in the amount not to exceed $650,000. The Fiscal Year operating budgets will be amended to appropriate $300,000 from the Information Technology Fund Reserves to in order to purchase the computer workstations. 06/26/20121lTIBSastokasiltem

177 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION APPROVING AN AMENDMENT TO THE COST SHARING AGREEMENT BETWEEN THE CITY OF MODESTO AND THE COUNTY OF STANISLAUS FOR THE OPERATION OF GOVERNMENT AND EDUCATIONAL PROGRAMMING ON ACCESSMODESTO COMMUNITY TELEVISION; AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AMENDMENT TO AGREEMENT WHEREAS, the City has an ongoing need to manage the education and government access channels on AccessModesto, and WHEREAS, the City of Modesto and the County of Stanislaus entered into a Cost Sharing Agreement for the operation of Government and Educational Programming on AccessModesto Community Television, effective July 2,2002, for a period often years, and WHEREAS, the City of Modesto and the County of Stanislaus have shared equally the costs for the management of the education and government access channel on AccessModesto, and WHEREAS, the Cost Sharing Agreement between the City of Modesto and the County of Stanislaus will expire on July 2, 2012, and WHEREAS, the City of Modesto and the County of Stanislaus wish to extend the term of the Cost Sharing Agreement for an additional two (2) years, NOW, THEREFORE, BE IT RESOLVED by the Council ofthe City of Modesto that it hereby approves an Amendment to the Cost Sharing Agreement between the City of Modesto and the County of Stanislaus to extend the Agreement for an additional two (2) years. BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the Amendment to Agreement J2012lITIBSastokas/Jtem

178 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: ~dv STEPANIELOiEZ, City 6 (SEAL) APPROVED AS TO FORM: By: CALA WOOD, City Attorney 06/ J1T IBSastokasJItem

179 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION APPROVING AN AMENDMENT TO THE BUDGET TO EXTEND THE TERM OF THE ORIGINAL COST SHARING AGREEMENT BETWEEN THE CITY OF MODESTO AND THE COUNTY OF STANISLAUS FOR THE OPERATION OF THE EDUCATION AND GOVERNMENT PROGRAMMING ON ACCESSMODESTO COMMUNITY TELEVISION FOR AN ADDITIONAL TWO (2) YEARS IN THE AMOUNT OF $284,720 IN FY TO BE EQUALLY SHARED IN THE AMOUNT OF $142,360 WHEREAS, the City has an ongoing need to manage the education and government access channels on AccessModesto, and WHEREAS, the City of Modesto and the County of Stanislaus entered into a Cost Sharing Agreement for the operation of Government and Educational Programming on AccessModesto Community Television, effective July 2, 2002, for a period of ten years, and WHEREAS, the City of Modesto and the County of Stanislaus have shared equally the costs for the management of the education and government access channel on AccessModesto, and WHEREAS, the Cost Sharing Agreement between the City of Modesto and the County of Stanislaus will expire on July 2, 2012, extended, and WHEREAS, the City of Modesto and the County of Stanislaus County wish to extend the term of the Cost Sharing Agreement for an additional two (2) years, and WHEREAS, there will be an increase in costs for the continued operation of AccessModesto between the City of Modesto and the County of Stanislaus to be shared equally in the amount of$142,360, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the FY 13/14 budget in the amount of $284,720 to be T IBSastokaslltem

180 shared equally in the amount of $142,360 between the City of Modesto and the County of Stanislaus for the operation of education and government programming on AccessModesto. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Counci1member Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: 06/ nT IBSastokasiltem

181 MODESTO CITY COUNCIL RESOLUTION NO RESOLUTION APPROVING THE FREEZING OF THE ANNUAL INFLATIONARY ADJUSTMENT ~'OR THE WASTEWATER CAPACITY CHARGE AND THE WATER CONNECTION CHARGE FOR FISCAL YEAR 2012/2013 WHEREAS, Section of the Modesto Municipal Code (MMC) provides that the Council may establish by resolution charges for the connection of property to the sewage system, and WHEREAS, on May 8, 2007, by Resolution No , the City Council authorized the Direetor of Public Works to administratively make an annual inflation adjustment to the Wastewater Capacity Charges, and WHEREAS, Resolution No was superseded by Resolution , which did not alter provision for making inflationary adjustments but refined the definition of the Director responsible for applying the inflationary adjustment, and WHEREAS, Section of the MMC authorizes the Council, by resolution, to establish charges for water service installation, and MMC Section authorizes the Council, by resolution, to establish charges for water main connection charges, and MMC Section authorizes the Council, by resolution, to establish charges for metered water services, and MMC Section authorizes the Council, by resolution, to establish charges for unmetered water services, and WHEREAS, on November 23, 2004, the City Council, by Resolution No , rescinded all previous water fee resolutions, establishing a single rate base, and establishing fees for the provision of water and all fees associated with water operations and management, and 06/ IUP&PfRU1m11tem

182 WHEREAS, on April 26, 2005, the City Council, by Resolution No , amended Sections 3 and 14 of Resolution No to clarify that water connection charges are actual hookup fees and are not land based, and WHEREAS, on October 4, 2005, the City Council, by Resolution No , amended and restated Resolution No to add section loa clarifying policy issues on water connection fees and amending Section 14, footnote 1 to clarify inflation adjustment for connection charges, and WHEREAS, on July 7, 2009, the City Council, by Resolution , authorized the Director of Public Works to administratively make an annual inflation adjustment to the Water Connection Charges, and WHEREAS, on November 4, 2009, the City Council, by Resolution No , established the Utility Planning and Projects Department and the position of Director of Utility Planning and Projects who would assume a portion of the duties previously assigned to the Director of Public Works, and WHEREAS, on July 5, 2011, the City Council, by Resolution , froze the annual inflationary adjustment due to the unprecedented economic situation, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves freezing the annual inflationary adjustment for the Wastewater Capacity Charge and the Water Connection Charge for Fiscal Year 2012/ J26/2012JUP&PIRUlm/ltem

183 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: ~:#I;;~~ SUSAN CALA WOOD, City Attorney /UP&PIRUlmlItem

184 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION APPROVING THE AMENDED AND RESTATED SERVICE AGREEMENT FOR THE SUPPLY AND ACCEPTANCE OF SOLID WASTE WITH COV ANT A STANISLAUS, INC., AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE NEW SERVICE AGREEMENT WHEREAS, on December 17,1985, the City of Modesto and County of Stanislaus (Contracting Communities) entered into an agreement for administration ofthe City/County Service Agreement with the Stanislaus Waste Energy Company (now Covanta Stanislaus) for supply and acceptance of solid waste, and WHEREAS, since that time, the City has been partners with Stanislaus County and Covanta Stanislaus in the Stanislaus Resource Recovery Facility (the "Waste-to- Energy" or "WTE" Facility), and WHEREAS, the City and County operate the project as a Joint Powers Agency under a Joint Powers Agreement, with the County acting as the Treasurer, and WHEREAS, under the current Service Agreement, the Contracting Communities pay Covanta a service fee to operate the facility and are also responsible for all pass through costs associated with the facility such as taxes, insurance, air permit fees, ash disposal, etc., and WHEREAS, the Contracting Communities are also responsible for any costs associated with unforeseen circumstances such as changes in law, major upgrades or any acts, events or conditions that have a material adverse effect on the operation of the facility, and WHEREAS, the Contracting Communities are responsible for delivering wastes to the facility under a minimum tonnage guarantee of243,300 tons, and Covanta uses this 06/26/2012IPR&N/JHannonlItem

185 waste to generate electricity, which it sells to PG&E under a Power Purchase Agreement (PPA), and WHEREAS, the Contracting Communities currently retain 90% ofthe electric revenue generated by the facility, all of the disposal fees, 50% of metal recycling revenue and 30% of supplemental waste revenue, which revenues are used to offset costs, and WHEREAS, the existing Service Agreement was set to expire on December 31, 2009, and in 2007, stafffrom the County Department of Environmental Resources and the City of Modesto Solid Waste Division began negotiations on a new contract with Covanta, and WHEREAS, those negotiations proved unsuccessful with Covanta asking for more concessions that staff were willing to agree to, so in May 2009, the County and the City of Modesto exercised an option given in the original contract to extend the contract under the same terms an additional six years through December 31,2015, and WHEREAS, when the Power Purchase Agreement (PP A) with PG&E expired in January, 2010, Covanta elected to extend its contract with PG&E under extension provisions pursuant to California Public Utilities Commission (CPUC) Decision No , and WHEREAS, those provisions caused the price paid for power to revert to the Short Run Avoided Cost, or "SRAC", which was about $55 per MW at the time and has since dropped even further, and WHEREAS, this pricing also did not include a premium for renewable energy, and the capacity payment was reduced, and as a resnlt, revenues from electricity generation declined sharply resulting in a significant operating deficit, and 06/26/20 12/PR&N/JHannonlItem

186 WHEREAS, both the Contracting Communities and Covanta recognized that it would be in our joint interests to return to the negotiating table and secure a long tenn commitment that would motivate Covanta to negotiate a new PP A at much more favorable rates than current SRAC rates, and WHEREAS, a new negotiating team was fonned and reopened negotiations with Covanta, with the objectives of preserving the current RRA balance, a stable and predictable tipping fee, a commitment to no increased importation of waste, meeting diversion requirements and preserving landfill capacity, and reducing City//County risk exposure from change-in-iaw, public perception, and change in science/technology, and WHEREAS, the Contracting Communities negotiating team has met on a regular basis over the past year and has provided periodic updates on the status of negotiations to the Solid Waste-to-Energy Executive Committee and the City-County Liaison Committee, and WHEREAS, major deal points from the negotiations were agreed upon by the team and Covanta and were outlined in a Tenn Sheet approved by the Council and Board of Supervisors, and WHEREAS, the negotiating team and Legal Counsel to the Executive Committee, Sidley Austin LLP, have negotiated a new Service Agreement and Lease Agreement with Covanta, to become effective on July 1,2012, and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that the Council hereby approves the new Service Agreement with Covanta Stanislaus, Inc., a copy of which is attached hereto as Attachment "A" and incorporated herein by reference JPR&NIJHannoniItem

187 BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to sign the New Service Agreement. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST: (SEAL) APPROVED AS TO FORM: By: --~~jljt;t--.-ccc / PR&N/lHannonlItem

188 EXECUTION COPY AMENDED AND RESTATED SERVICE AGREEMENT FOR THE SUPPLY AND ACCEPTANCE OF SOLID WASTE among COVANTA STANISLAUS, INC. And THE CITY OF MODESTO and THE COUNTY OF STANISLAUS DATED AS OF JULY 1,2012 NYl v.13

189 TABLE UF CONTENTS ARTICLE 1- DEFINITIONS AND INTERPRETATION...., Incorporation by Reference Definitions Interpretation ARTICLE II - CONDITIONS PRECEDENT Conditions Precedent to the Obligations and Liabilities of the Contracting Communities...' Conditions Precedent to the Obligations and Liabilities ofthe Company Satisfaction of Conditions Precedent ARTICLE III - REPRESENTATIONS Representations of the County Representations of the City Representations of the Company ARTICLE IV - OPERATION OF FACILITY; DELIVERY AND PROCESSING OF WASTE Commitment to Deliver Waste Commitment to Accept, Process andjor Dispose of Waste Contracting Communities Right of First Use Operation of the Facility Facility Maintenance Contracting Commuuities' Visits and Inspections; Record Keeping and Reporting; Testing Rejection Rights Receiving and Operating Hours Weighing of Waste Deliveries, Etc Storage Regulation of Haulers Assistance with Water and Utilities ARTICLE V - DISPOSAL OF PROCESS RESIDUE AND PROCESS REJECTS Disposal Inadvertent Deliveries of Process Rejects Provision of Disposal Site NYl v.13 1

190 ARTICLE VI - SERVICE FEE AND OTHER PA YMENTS Service Fee Costs and Benefits of Facility BTU Values Billing and Payments Unforeseen Circumstances No Offset or Waiver Contracting Communities' Permit Obligations ARTICLE VII - FURTHER AGREEMENTS Licenses, Approvals and Permits Nondiscrimination Insurance Joint and Several Obligations ARTICLE VIII - DEFAULT AND TERMINA TION Events of Default by the Company Events of Default by Contracting Communities Event of Default Remedies Limit of Liability Special Termination Right ARTICLE IX - MISCELLANEOUS Assignment Indemnification Effect of Termination Overdue Obligations to Bear Interest Exclusion of Liability Intellectual Property Rights Relationship ofthe Parties Notices No Waiver Entire Agreement; Modifications Headings Governing Law Counterparts Severability Right of First RefusaL Fair Market Value Purchase Option Cooperation Regarding Claims Venue Further Assurances Arbitration NY} v.13 11

191 LIST OF SCHEDULES Schedule I Schedule 2 Schedule 3 Schedule 4 Schedule 5 Schedule 6 Waste Delivery Schedule Facility Site Description Amended and Restated Facility Site Lease Agreement Parent Guaranty Required Insurance Hauler Requirements NYl v.13 III

192 AMENDED AND RESTATED SERVICE AGREEMENT FOR THE SUPPLY AND ACCEPTANCE OF SOLID WASTE This AMENDED AND RESTATED SERVICE AGREEMENT FOR THE SUPPLY AND ACCEPTANCE OF SOLID WASTE (this "Agreement") is entered into as of July 1, 2012, by and among Covanta Stanislaus, Inc., a California corporation (the "Company"), the County of Stanislaus, a political subdivision of the State of California, acting by and through its Board of Supervisors (the "County"), and the City of Modesto, a municipal corporation, acting by and through its City Council (the "City"). The County and City are collectively referred to herein as the "Contracting Communities." Recitals WHEREAS, the Company and the Contracting Communities are parties to that certain Amended and Restated Service Agreement for the Supply and Acceptance of Solid Waste dated as of June 1986, as amended by Amendment No. I to such Agreement dated as of September 27, 1988, Amendment No.2 to sueh Agreement dated as of May 17, 1990, Amendment No.3 to such Agreement dated as of February 2, 2000 and Amendment No.4 to such Agreement dated as of May 21, (as so amended, the "Original Agreement"); WHEREAS, pursuant to the Original Agreement, the Company has designed and built, and currently is operating and maintaining, a mass burn resource recovery facility for disposing of Acceptable Waste (defined below), producing saleable eleetricity and recovering other Recovered Resources (defined below), which facility is located at 4040 Fink Road, Crows Landing, California (together with all additions, replacements, appurtenant structures, improvements and equipment in connection therewith, the "Facility"). WHEREAS, Contracting Communities and the Company wish to amend and restate the Original Agreement in its entirety as provided herein; and WHEREAS, the Contracting Communities and the Company intend that this Agreement become legally effective as of the date first above written (the "Contract Date" or the "Service Commencement Date"), become operative and commence governing rights, obligations, use, operation and maintenance of the Facility thereon and continue until the 15 th arrniversary of the Service Commencement Date, subject to earlier termination in accordance with the provisions of this Agreement (the "Service Term").

193 AGREEMENT NOW, THEREFORE, for and in consideration of the premises and of the mutual obligations undertaken herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the Company and the Contracting Communities hereby agree as follows; ARTICLE I - DEFINITIONS AND INTERPRETATION LO I Incorporation by Reference. The above Recitals are incorporated into this Agreement by this reference. Schednles 1 through!l attached to this Agreement are incorporated into this Agreement by this reference Defmitions. The following terms shall have the following meaning; "Acceptable Waste" means that portion of Solid Waste which has characteristics such as that collected and disposed of as part of normal collection of Solid Waste in the Contracting Cormnunities, such as, but not limited to; garbage, trash, rubbish, refuse, offal, beds, mattresses, sofas, bicycles, baby carriages, automobile or small vehicle tires, as well as processible portions of cormnercial (including cannery) and industrial Solid Waste, and logs if no more than four (4) feet long and six (6) inches in diameter, branches, leaves, twigs, grass and plant cuttings, excepting, however, Unacceptable Waste and Hazardous Waste. "Affiliate" means a Person that controls, is controlled by, or is under cormnon control with the Company. "Alternate Disposal Methods" means the use of the Landfill or other reasonable methods of disposal of Acceptable Waste, other than the normal operation of the Facility, either through the use of the Facility, the Facility Site or any portion thereof, or otherwise through the use of alternate equipment or facilities (including a permitted sanitary landfill), subject to the reasonable approval of the Contracting Cormnunities. "Applicable Laws" means all applicable federal, State, County or local laws ordinances and regulations. "Amortized Portion" has the meaning specified in Section 6.05(c)(4) hereof. "Billing Period" means each calendar month in each Contract Year, except that (a) the first Billing Period shall begin on the Service Cormnencement Date and shall continue to the last day of the month in which the Service Cormnencement Date occurs and (b) the last Billing Period shall end on the last day of the final Contract Year. "Billing Period Tonnage" means for each Billing Period that quantity of Acceptable Waste set forth for such Billing Period on Schedule 1 for delivery to the Facility (subject to 2

194 adjustments pursuant to Section 4.02(b», the sum total of which in each Contract Year shall be equal to the Guaranteed Tonnage. "BTU" means British thermal unit. "By~Pass Waste" means Acceptable Waste that the Company is obligated to accept but that is rejected upon delivery at the Facility, directed by the Company to be disposed of by Alternate Disposal Methods, or that is removed from the Facility before Processing for reasons other than Contracting Communities Fault or Unforeseen Circumstances. "Cap & Trade Costs" has the meaning specified in Section 6.05( c )(2)(ii) hereof. "Capital Cost' has the meaning specified in Section 6.05(c)(4) hereof. "Change in Law" means (a) the enactment, promulgation, amendment or official interpretation or reinterpretation by any order, decision or judgment of any federal, state or local court, administrative agency or governmental body after the Contract Date of (i) any federal statute or regulation not enacted, promulgated, amended, interpreted or reinterpreted on or before the Contract Date, as applicable, or (ii) any state, County or City statute, ordinance, or regulation that was not so enacted, promulgated, amended, interpreted or reinterpreted on or before the Contract Date, as applicable, or (b) the imposition of any material conditions in connection with the issuance, renewal, or modification of any official permit, license, or approval after the Contract Date, including any change in specific permit emission limitations pursuant to a condition in the Prevention of Significant Deterioration Permit authorizing modification of such limitations subsequent to issuance of said permit, which in the case of either (a) or (b) establishes requirements making the ownership, operation or maintenance of the Facility more burdensome than the most stringent requirements (x) in effect as of the Contract Date, (y) agreed to in any applications of the Company for official permits, licenses, or approvals, or (z) contained in any official permits, licenses, or approvals with respect to the Facility obtained as of the Contract Date; provided that except for Discriminatory Taxes (defined below), a change in federal, State, County, City, or any other tax law shall not be a Change in Law. "Company Indemnified Parties" has the meaning specified in Section 9.02(b) hereof. "Consulting Engineer" means a nationally recognized consulting engineering company, with demonstrated experience in the area of resource recovery facilities, which is designated in writing by the Contracting Communities. "Contract Date" has the meaning specified in the Fourth Recital. "Contract Year" means the fiscal year ending June 30 th The first Contract Year shall cornmence on the Service Commencement Date and shall end on the following June 30 th The last Contract Year shall commence on July I and end on the last day of the Service Term of this Agreement. Annual quantities described herein shall be ratably adjusted if the first and last Contract Years are less than three hundred sixty-five (365) days. Each Contract Year after the first Contract Year shall commence on the July 1 st following the termination of the prior Contract Year. NY] v.13 3

195 "Contracting Communities Fault' means any act or failure to act on the part of the City or the County that constitutes a breach of its obligations under this Agreement or a violation of any duty of the City or County to the Company imposed under law. "Contracting Communities Indemnified Parties" has the meaning specified in Section 9.02(a) hereof. "Cost Substantiation" means (a) with respect to any cost incurred by the Company, delivery to the Contracting Communities of a certificate signed by the chief financial officer or principal engineering officer, as applicable, of the Company, or his or her respective designee, setting forth the amount of such cost and the reason why such cost is properly chargeable to the Contracting Communities, and stating that such cost is an arm's length and competitive price for the service or materials supplied, and (b) with respect to any cost incurred by the Contracting Communities delivery to the Company of a certificate signed by the Chief Executive Officer of the County and the City Manager or their designees, setting forth the amount of such cost and the reason why such cost is properly chargeable to the Company, and stating that such cost is an arm's length and competitive price for the service or materials supplied, and (c) in either case, such other documentation as may be reasonably necessary to properly evidence such costs. "Discriminatory Taxes" has the meaning specified in Section 6.02(b) hereof. "Energy Revenues" all revenues derived from the sale of electric energy, capacity or ancillary services from the Facility, including any benefit of environmental attributes reflected in the price of the foregoing, if the environmental attributes are included in the sale transaction for energy, capacity or ancillary services by operation of law and such sale transaction does not include a separate certificate evidencing the sale of such environmental attributes. "Event of Default" has the meaning specified in Sections 8.01 and 8.02 hereof. "Excess Electric Revenues" has the meaning specified in Section 6.05( c )(2)(ii) hereof. "Excess Tipping Fee Revenues" has the meaning specified in Section 4.03(b). "Excess Waste" has the meaning specified in Section 4.01 (b). "Excess Waste Tipping Fee" has the meaning specified in Section 6.01 hereof. "Facility" has the meaning set forth in the Second RecitaL "Facility Site" means the real property described on Schedule 2, upon which the Facility is located. "Facility Site Lease Agreement' means the Amended and Restated Facility Site Lease Agreement between the Company and the County for the Facility Site, as amended from time to time, the form of which is attached hereto as Schedule 3. "Fair Market Value" has the meaning specified in Section NYl v.13 4

196 "Guaranteed Tonnage" means 243,300 Tons of Acceptable Waste which the Contracting Communities are obligated to deliver to the Facility in each Contract Year, to be measured by calculating the sum of the Billing Period Tonnages for the Contract Year. "Guaranteed Tonnage Tipping Fee" has the meaning specified in Section 6.01 hereof. "Hauler" means any Person licensed by the County or the City to collect and transport waste to the Facility or, as applicable, to alternate facilities in accordance with Alternate Disposal Methods; a list of all Haulers so licensed by the County or City shall be prepared by the Contracting Communities and provided to the Company on or before each Contract Year and revised from time to time, as necessary. "Hazardous Waste" means that portion of Solid Waste which, by reason of its composition or characteristics, is: (a) hazardous waste as defined in the Solid Waste Disposal Aet, 42 USC 6901 et seq., and the regulations thereunder, the California Health & Safety Code, Div. 20, Chs. 6.5, 6.7 and 6.8, the California Administrative Code, Title 22, Div. 4, Ch. 30, and any similar or substituted legislation or regulations or amendments to the foregoing; (b) any other materials which any governmental ageney or unit having appropriate jurisdiction shall determine from time to time is harmful, toxic, or dangerous, or otherwise ineligible for disposal through the Facility; and (e) any material, other than residential or commercial Solid Waste of the type historically collected by the County and the City as acceptable for disposal into non-hazardous Waste landfills, which would result in Process Residue being Hazardous Waste under (a) or (b) above. hereof. "Initial uee Termination Threshold" has the meaning specified in Section 6.05( d) "Landfilr means the Fink Road landfill located immediately adjacent to the Facility Site. "Landfill Tipping Fee" has the meaning specified in Section 5.03 hereof. "Legal Holidays" means those holidays observed by the Contracting Communities and specified by the Contracting Communities in a list delivered to the Company at least thirty (30) days before the beginning of each Contract Year. "Limit of Liability" has the meaning specified in Section 8.04(a). "Martin, GmbH" means Martin GmbH fur Umwelt and Energietechnik, a limited liability company under the laws of the Federal Republic of Germany, having an office in Munich, Germany. "MWH" means megawatt hour. "Original Agreement" has the meaning set forth in the First Recital. "Other Amounts" has the meaning specified in Section 6.04(a)(ii)(C) hereof. NYl vJ3 5

197 "Overdue Rate" means the maximum annual rate of interest permitted by the laws of the State, if applicable, or one percent (l %) per annum over the then current rate which Bank of America (or its successor) loans money to its preferred commercial borrowers and is publicly announced as its "prime rate," whichever rate is lower. "Parent" means Covanta Holding Corporation and its successors and assigns. "Parent Guaranty" means the guaranty agreement provided by the Parent substantially in the form of Schedule 4. "Person" means a corporation, political subdivision, municipal corporation, public benefit corporation, partnership, business trust, trust, joint venture, company, firm, or individual. "Process Rejects" means Unacceptable Waste and Hazardous Waste which is inadvertently accepted by Company. "Process," "Processing," or "Processed," as applicable, means the combustion of Acceptable Waste in the Facility. "Processing Capacity" means the actual Processing capacity of the Facility but not more than 310,000 Tons per Contract Year unless the Contracting Communities consent to the establishment of a greater amount, which consent for a greater amount shall not be uureasonably withheld, conditioned or delayed if the basis for the Processing Capacity being set above 310,000 Tons per Contract Year is due to the lower heating value of the waste then being Processed at the Facility. This definition of Processing Capacity shall not alter or diminish the Company's obligation to accept the Guaranteed Tonnage. "Process Residue" means bottom ash, fly ash, grate siftings, and other material derived from Acceptable Waste which remains after the combustion of Acceptable Waste. "Procurement Commission" has the meaning specified in Section 4.03(b). "Receiving Times" means the hours between 4:00 a.m. and 6:00 p.m. Monday through Sunday, excluding Legal Holidays, or any other times agreed upon by Company and the Contracting Communities, provided, however, that between the hours of 4:00 a.m. and 6:00 a.m. each day, and from 4:00 p.m. to 6:00 p.m. each day, and all day Sunday, an electronic ticket entry is required and there is no staffmg. "Recovered Resources" means (i) steam, electric energy, capacity, ancillary services, ferrous and non-ferrous metals, ash and such other materials of whatever nature or description as the Company may from time-to-time recover from Solid Waste, Process Residue or any other material, whether at the Facility or elsewhere, as determined by the Company in its sole and absolute discretion, and (ii) offsets, credits or benefits of whatever nature or description, for emissions, pollution, green house gas, renewable energy generation, investment, production, taxes or any certificate, grant or intangible entitlement relating to the Facility or its operation, exclusive of diversion credits from the State for waste processed by the Facility. "Scale Operators" has the meaning specified in Section 4.09(a) hereof. NY) vJ3 6

198 "Second Notice" has the meaning specified in Section 6.05( c)(1) hereof. "Service Commencement Date" has the meaning specified in the Fourth Recital. "Service Fee" has the meaning specified in Section 6.01 hereof. "Service Term" has the meaning specified in the Fourth Recital. "Shortfall Payment" has the meaning specified in Section 4.03(b) hereof. "Solid Waste" means all materials or substances discarded or rejected as being spent, useless, worthless, or in excess to the owners at the time of such discard or rejection, including but not limited to garbage, refuse, industrial and commercial waste, sludges from air or water pollution control facilities or water supply treatment facilities, rubbish, ashes, contained gaseous materials, incinerator residue, demolition and construction debris and offal, but excluding sewage and other highly diluted water-carried materials or substances and those in gaseous form, or special nuclear or by-product materials within the meaning of the Atomic Energy Act of 1954, as amended. "Special Waste" means Acceptable Waste requmng special handling or secure or certified destruction for Processing. "State" means the State of California. "Subsequent UCC Termination ThresholtF' has the meaning specified in Section 6.05(d) hereof. "Termination Avoidance Amount" has the meaning specified in Section 6.05( d) hereof. "Termination Payment" has the meaning specified in Section 6.05(e) hereof. "Third Party Tipping Fee" has the meaning specified in Section 4.03(b) hereof. "Ton" means a "short ton" of 2,000 pounds. "UCC Termination" has the meaning specified in Section 6.05(d) hereof. "Unacceptable Waste" means that portion of Solid Waste, exclusive of Hazardous Waste, such as, but not limited to: explosives, pathological and biological waste (unless sterilized and otherwise processed to permit incineration in the Facility in accordance with all applicable health and environmental requirements), radioactive materials, ashes, wet cannery waste, foundry sand, sewage sludge unless processed to permit incineration, cesspool and other human waste, human and animal remains, motor vehicles, including such major motor vehicle parts as automobile transmissions, rear ends, springs and fenders, agricultural and farm machinery and equipment, marine vessels and major parts thereof, any other large type of machinery or equipment, liquid wastes, nonburnable construction materials and/or demolition debris, or any other material which (a) may represent a substantial endangerment to public health or safety, as confirmed by an appropriate public health or safety official, or (b) which would NYI v.13 7

199 cause applicable air quality or water effiuent standards to be violated by virtue of a change in the composition of waste which prevents the Facility from operating as designed and in accordance with applicable environmental and other permits or (c) material not normally collected as part of residential and commercial collections and which has a reasonable possibility of adversely affecting the operation of the Facility, unless such Unacceptable Waste is delivered in minimal quantities and concentrations as part of normal collections but still classified under Applicable Law as Acceptable Waste. "Unforeseen Circumstance" means any act, event, or condition that has had, or, at the time of the occurrence of such act, event or condition may reasonably be expected to have, a material adverse effect on the rights or the obligations of the parties under this Agreement, or a material adverse effect on the Facility, or the ownership, possession, or operation of the Facility by the Company or its permitted assigns pursuant to Section 9.01 of this Agreement, if such act, event, or condition is beyond the reasonable control of the party relying thereon as justification for not performing an obligation or complying with any condition required of such party under this Agreement and is the proximate cause of such failure to perform or comply; provided that no act, event, or condition that results from the Company's failure to maintain the Facility in accordance with Article IV shall be deemed an Unforeseen Circumstance. Such acts or events may include, but shall not be limited to, the following: (a) An act of God, including volcanic eruption, landslide, lightuing, earthquake, fire, flood (but excluding reasonably anticipated weather conditions for the geographic area of the Facility); explosion, sabotage, or similar occurrence; acts of a public enemy, extortion, terrorism, war, blockade, or insurrection, riot or civil disturbance; (b) The order and/or judgment of any federal, state, or local court, administrative agency or governmental body, excepting decisions of federal courts interpreting the federal tax laws and decisions of state courts interpreting state tax laws (or, in the case of ownership of the Facility for tax purposes, excepting the decision of or regulations promulgated by any federal, state, or local court, administrative agency or governmental body), if it is not also the result of the willful or negligent action or inaction of the party relying thereon; provided that neither the contesting in good faith of any such order and/or judgment nor the failure to so contest shall constitute or be construed as a willful or negligent action or inaction of such party; (c) The failure to issue, suspension, termination, interruption, denial or failure of renewal of any permit, license, consent, authorization or approval essential to the ownership, operation or maintenance of the Facility, but excluding the license or consent of Martin, GmbH, provided that such act or event is the result of the imposition of standards or requirements exceeding those in effect on the Contract Date; provided further that such act or event shall not be the result of the willful or negligent action or inaction of the party relying or seeking to rely thereon but that neither the contesting in good faith of any such order nor the failure to so contest shall be construed as a willful or negligent action or inaction of such party; (d) A Change in Law; (e) The failure of any appropriate federal, state, County, City, or local public agency or private utility having operational jurisdiction in the area in which the Facility is NY! v.13 8

200 located, to provide and maintain utilities, services, water, and sewer lines and power transmission lines to the Facility Site which are required for and essential to the ownership, operation or maintenance of the Facility; (f) The failure of any subcontractor or supplier to furnish labor, services, materials, or equipment on the dates agreed to; provided that such failure is itself caused by an Unforeseen Circumstance and materially adversely affects the Company's ability to perform its obligations, and the Company was not reasonably able to foresee such event and is not reasonably able to obtain substitute labor, services, materials, or equipment on the agreed-upon dates; (g) The condemnation, taking, seizure, involuntary conversion, or requisition of title to or use of the Facility, the Facility Site, or any material portion or part thereof by the action of any federal, State, or local government or governmental agency or authority; or (h) Any action or failure to act of any Hauler if at the time of such action or failure to act such Person is on the Facility Site and not under the specific direction and control of the Company or the Parent, except as provided for in Section It is expressly understood and agreed that, subject to Applieable Law, the following shall not constitute an Unforeseen Circumstance if not the result of any of the events or conditions specifically described in subparagraphs (a) through (h) above; (i) adverse changes in the financial ability of any party to perform its obligations hereunder or of the Parent to perform its obligations under the Parent Guaranty; (ii) the consequences of errors of design, construction, start up, operation or maintenance on the part of the Company or any of its employees, agents, contractors, subcontractors, suppliers or affiliates; (iii) the failure of the Company to secure licenses or other legal rights in connection with the technology necessary to own, operate or maintain the Facility; (iv) the lack of fitness for use, or the failure to comply with specifications or design, of any materials, equipment or parts constituting part of the Facility provided that such lack or failure shall not have been the result of the occurrence of a Change in Law; (v) the result of changed economic circumstances, or impracticability of technology to perform; (vi) labor disputes other than strikes, lock-outs or breaches of the peace; "Unforeseen Circumstance Costs" has the meaning specified in Section 6.05(c)(4). "Waste Delivery Shortfall" has the meaning specified in Section 4.03(b) hereof. NYl vJ3 9

201 1.03 Interpretation. In this Agreement, unless the context otherwise requires: (a) The terms "hereof', "herein", "hereunder" and any similar terms, as used in this Agreement, refer to this entire Agreement. (b) Words of the masculine gender shah mean and include correlative words of the feminine and neuter genders and words importing the singular number shall mean and include the plural number or vice versa. (c) The terms "including" and "includes", as used in this Agreement, shall be deemed to be followed by the phrase "without limitation", whether such phrase or words of similar import actually follow or not. (d) The term "delivered on behalf of the Contracting Communities" and similar terms shall mean delivered by Haulers under contract or franchise arrangement with the Contracting Communities or by other local goverrunental authorities on behalf of the Contracting Communities. ARTICLE II - CONDITIONS PRECEDENT The obligations and liabilities of each party hereunder shall be subject to the satisfaction of each of the conditions precedent to the obligations and liabilities of such party, as set forth in this Article II, on or prior to the Service Commencement Date Conditions Precedent to the Obligations and Liabilities of the Contracting Communities. The obligations and liabilities of the Contracting Communities shall be subject to the satisfaction of each of the following conditions precedent on or prior to the Service Commencement Date: (a) The Parent shall have entered into the Parent Guaranty for the benefit of the Contracting Communities, and the Contracting Communities shall have received a legal opinion from counsel for Guarantor as to the due authorization, execution and delivery of the Guaranty, and to its enforceability, in a form reasonably acceptable to counsel to the Contracting Communities. (b) The representations of the Company set forth in Section 3.03 hereof shall be true and correct in all material respects as of the Service Commencement Date as if made on and as of such date. (c) no action, suit, proceeding, or official investigation shall have been overtly threatened, publicly armounced, or commenced by any federal, state, or local goverrunental authority or agency, or by any party in any federal, state, or local court, that seeks to enjoin, assess civil or criminal penalties against, assess civil damages against or obtain any judgment, NYI v. I3 10

202 order or consent decree with respect to any party to this Agreement as a result of such party's participation or intended participation in any transaction contemplated hereby. (d) The Amended and Restated Facility Site Lease Agreement in the form set forth in Schedule 3 hereto shall have been duly executed and delivered between the Company and the County Conditions Precedent to the Obligations and Liabilities ofthe Company. The obligations and liabilities of the Company shall be subject to the satisfaction of each of the following conditions precedent on or prior to the Service Commencement Date: (a) The representations of the Contracting Communities in Sections 3.01 and 3.02 hereof shall be true and correct in all material respects as of the Service Commencement Date as if made on and as of such date. (b) No aetion, suit, proceeding, or official investigation shall have been overtly threatened, publicly announced or commenced by any federal, state, or local government authority or agency, or by any party in any federal, state, or local court, that seeks to enjoin, assess civil or criminal penalties against, assess civil damages against or obtain any judgment, order, or consent decree with respect to any party to this Agreement as a result of such party's participation or intended participation in any transaction contemplated thereby. (c) The Amended and Restated Facility Site Lease Agreement in the form set forth in Schedule 3 hereto shall have been duly executed and delivered between the Company and the County Satisfaction of Conditions Precedent. The parties shall exercise good faith and due diligence in satisfying the foregoing conditions precedent and each party shall give prompt notice to the other party when such conditions precedent shall have been satisfied or waived in writing by the party whose obligation is conditioned thereon Representations of the County. ARTICLE III - REPRESENTATIONS The County represents that as of the Contract Date: (a) The County is a political subdivision of the State, acting by and through its Board of Supervisors, and is duly qualified and authorized to carry on the governmental functions and operations as contemplated by this Agreement, and each other agreement or instrument entered into or to be entered into by the County pursuant to this Agreement. (b) The County has the power, authority, and legal right to enter into and perform this Agreement, and each other agreement or instrument entered into or to be entered into by the County pursuant to this Agreement, and the execution, delivery, and performance hereof and NYl v.13 11

203 thereof (i) have been duly authorized, (ii) do not require the approval of any other governmental body, (iii) will not violate any judgment, order, law, or regulation applicable to the County and (iv) do not (A) conflict with, (B) constitute a default under, or (C) result in the creation in favor of any third party of any lien, charge, encumbrance or security interest upon any assets of the County under, any agreement or instrument to which the County is a party or by which the County or its assets may be bound or affected. (c) This Agreement, and each other agreement or instrument entered into by the County pursuant to this Agreement, have been duly entered into and constitute, and each agreement or instrument to be entered into by the County pursuant to this Agreement, when entered into, will be duly entered into and will constitute, legal, valid, and binding obligations of the County, enforceable in accordance with their respective terms, except to the extent that enforceability may be limited by the operation of bankruptcy, insolvency or similar laws affecting the rights of creditors generally and to the extent that the 'enforceability of the Agreement is subject to general principles of equity. (d) There are no pending or threatened actions or proceedings before any court or administrative agency which would materially and adversely affect the ability of the County to perform its obligations under this Agreement, or any other agreement or instrument entered into or to be entered into by the County pursuant to this Agreement Representations of the City The City represents that as of the Contract Date: (a) The City is a municipal corporation under State law acting by and through its City Council, and is duly qualified and authorized to carryon the governmental functions and operations as contemplated by this Agreement and each other agreement or instrument entered into or to be entered into by the City pursuant to this Agreement. (b) The City has the power, authority, and legal right to enter into and perform this Agreement, and each other agreement or instrument entered into or to be entered into by the City pursuant to this Agreement, and the execution, delivery, and performance hereof and thereof (i) have been duly authorized, (ii) do not require the approval of any other governmental body (other than the County), (iii) will not violate any judgment, order, law, or regulation applicable to the City and (iv) do not (A) conflict with, (B) constitute a default under, or (C) result in the creation of any lien, charge, encumbrance or security interest upon any assets of the City under, any agreement or instrument to which the City is a party or by which the City or its assets may be bound or affected. (c) This Agreement, and each other agreement or instrument entered into by the City pursuant to this Agreement, have been duly entered into and constitute, and each agreement or instrument to be entered into by the City pursuant to this Agreement, when entered into, will be duly entered into and will constitute, legal, valid, and binding obligations of the City, enforceable in accordance with their respective terms, except to the extent that enforceability may be limited by the operation of bankruptcy, insolvency or similar laws affecting the rights of creditors NYl v.l3 12

204 generally and to the extent that the enforceability of the Agreement IS subject to general principles of equity. (d) There are no pending or threatened actions or proceedings before any court or administrative agency which would materially and adversely affect the ability of the City to perform its obligations under this Agreement, or any other agreement or instrument entered into or to be entered into by the City pursuant to this Agreement Representations of the Company. The Company represents that as of the Contract Date: (a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of California and has all necessary corporate power and authority to own, lease, and operate its properties and to carryon its business as now being conducted by it, and is duly qualified to do business and is in good standing in all other jurisdictions in which the nature of the Company's business or of its properties makes such qualification necessary, and is in compliance in all material respects with all laws, regulations, and requirements where failure to so comply would have material adverse effect on the Company's business. (b) The Company has the power, authority, legal capacity, and right to enter into, and to perform, its obligations under this Agreement, and each other agreement or instrument entered into or to be entered into by the Company pursuant to this Agreement, and the execution, delivery, and performance hereof and thereof and the transactions contemplated hereby and thereby (i) have been duly authorized by the Company's Board of Directors and, if necessary, by the Company's shareholders, (ii) have the requisite approval of all governmental bodies other than permits or approvals which have been or, in due course, will be applied for, but are not yet issued, (iii) will not result in a violation of any of the terms or provisions of the Articles of Incorporation or Bylaws of the Company, of any indenture or other agreement to which the Company may be a party or by which the Company may otherwise be bound, or of any law, rule, license, regulation, judgment, order, ruling, or decree governing or affecting the operation of the Company or its business, nor will the same constitute an event permitting termination of any agreement or the acceleration of any indebtedness, (iv) do not (A) conflict with, (B) constitute a default under, or (C) result in the creation of any lien, charge, encumbrance, or security interest upon any assets of the Company under any agreement or instrument to which the Company is a party or by which the Company or its assets may be bound or affected. ( c) The Company holds, or is expressly authorized under, the necessary operating permits, patent rights, licenses, and franchises to operate the Facility consistent with, and as may be required by, this Agreement. (d) This Agreement, and each other agreement or instrument entered into by the Company pursuant to this Agreement, have been duly entered into and constitutes, and each agreement or instrument to be entered into by the Company pursuant to this Agreement, when entered into, will be duly entered into and will constitute, legal, valid, and binding obligations of the Company, enforceable in accordance with their respective terms, except to the extent that NY} v.13 13

205 enforceability may be limited by the operation of bankruptcy, insolvency or similar laws affecting the rights of creditors generally and to the extent that the enforceability of the Agreement is subject to general principles of equity. (e) No suit, action, arbitration, or legal, administrative, or other proceeding or goverrunental investigation is pending or threatened against the Company, the business of the Company, or any related assets before any court or administrative agency which would materially adversely affect the financial condition of the Company, or the ability of the Company to perform its obligations under this Agreement, or any other agreement or instrument entered into or to be entered into by the Company pursuant to this Agreement. ARTICLE IV - OPERATION OF FACILITY; DELIVERY AND PROCESSING OF WASTE 4.01 Commitment to Deliver Waste. (a) On and after the Service Commencement Date, the Contracting Communities shall deliver or cause to be delivered to the Facility or, as applicable, in accordance with Alternate Disposal Methods, on a put-or-pay basis, the Billing Period Tonnage for each Billing Period and the Guaranteed Tonnage for each Contract Year. Acceptable Waste delivered or tendered for delivery to the Facility by or on behalf of the Contracting Communities and rejected by the Company due to one or more scheduled maintenance outages during any Contract Year which aggregate more than 672 hours shall count towards such put-or-pay obligation of the Contracting Communities, in addition to other remedies, if any, applicable to such rejection under this Agreement. (b) In addition to the Guaranteed Tonnage, the Contracting Communities may tender for delivery, and if so tendered and if Processing Capacity at the Facility is available, the Company shall accept, additional Acceptable Waste (originating within the territorial limits of the Contracting Communities) in excess of the Guaranteed Tonnage up to the Processing Capacity of the Facility ("Excess Waste"). (c) In order to assist the Contracting Communities and their Haulers in cost-effective routing of waste to alternative disposal sites when necessary, the Company shall continue to notify the Contracting Communities promptly of any unscheduled outage at the Facility. In addition, the Company shall continue to notify the Contracting Communities no less than 12 (twelve) hours in advance of any known or readily identifiable operational condition at the Facility, such as a quantity of waste in the pit which would cause the Facility to not meet permitted pit turnover requirements, which would cause the Facility to be unable to accept Acceptable Waste for processing and to divert such Acceptable Waste to an alternate disposal site. Said notice shall include the approximate duration of the diversion and shall be provided to both the City and the County Solid Waste Offices via or other method mutually acceptable to the parties, so that City and County can notify their Haulers to use alternative disposal sites. (d) The Contracting Communities hereby designate the Facility as the Contracting Communities' resource recovery facility for the disposal of not less than the Guaranteed NYl v.13 14

206 Tonnage each Contract Year and agree to maintain such designation during the term of this Agreement Commitment to Accept, Process and/or Dispose of Waste. (a) The Company shall accept and Process, and/or dispose of Acceptable Waste utilizing the Facility or Alternate Disposal Methods, in an amount at least equal to the Billing Period Tonnage for each Billing Period and in an amount at least equal to the Guaranteed Tonnage for each Contract Year. (b) Upon either party's request, the monthly schedule of Billing Period Tonnage in Schedule I shall be reviewed for potential annual adjustments to accommodate scheduled maintenance and other anticipated downtime of the Facility, seasonal variations in waste generation, and maximization of electricity generation during peak electric demand periods. Such annual adjustments shall only be made upon the mutual consent of the Contracting Communities and the Company, the consent for which from each party shall not be unreasonably withheld. (c) In the event the Facility is unable to Process any Billing Period Tonnage, or the Guaranteed Tonnage for any Contract Year and the Company is in compliance with Section 4.03 below, the Company shall be entitled to fulfill its obligations to accept, Process, and/or dispose of Acceptable Waste by using Alternate Disposal Methods, which use of Alternate Disposal Methods may include use of the Facility as a transfer station. If the Company determines to use an Alternate Disposal Method during any Billing Period, the Company shall, as promptly as practicable, notify the Contracting Communities by telephone (which notice shall be confirmed in writing within five (5) days) of such determination and shall consult with the Contracting Communities with regard to (i) the use of any Alternate Disposal Method and (ii) the amount of County or City Tons, per day, delivered by the County or City pursuant to such Alternate Disposal Methods; provided that the Company shall continue to accept Acceptable Waste at the Facility for thirty-six (36) hours after giving such telephonic notice to the extent that such acceptance will not violate any environmental permit or Applicable Laws. The Company shall give the Contracting Communities equivalent notice of its intention to terminate use of Alternate Disposal Methods and will consult with the Contracting Communities regarding the need for any additional alternate facility. (d) The Company has the right, without any obligation to pay damages or adj ustments during any Billing Period, to not Process Acceptable Waste from the Contracting Communities for up to 672 hours in each Contract Year for scheduled maintenance outages, provided that this right shall be subject to the Company's obligations under this Agreement to Process the Guaranteed Tonnage and the Company's obligations under Section 4.03 below Contracting Communities Right of First Use. (a) Unused Capacity. The Contracting Communities shall have a right of first use of all Processing Capacity at the Facility in accordance with this Section If at any time and from time to time, the Contracting Communities have not delivered sufficient Acceptable Waste to fill the Processing Capacity of the Facility, then within twenty-four (24) hours of the NYl v.13 15

207 Company's notice to the Contracting Communities of the existence of unused Processing Capacity at the Facility, the Company shall have the right to market, for the benefit of both the Contracting Communities and the Company, as provided in Sections 4.03(b) and (c) below, the difference between the Processing Capacity and the total of Acceptable Waste being delivered by the Contracting Communities. (b) Shortfalls in Deliverv. If the Company procures waste from third parties to mitigate a shortfall in the Contracting Communities meeting their scheduled Billing Period Tonnage and/or Guaranteed Tonnage deliveries (a "Waste Delivery Shortfalf'), then the Company shall be entitled to, and the Contracting Communities shall owe, a procurement commission of 15% (the "Procurement Commission") of the tipping fee paid by third parties (the "Third Party Tipping Fee") for the procurement of such waste. In addition, if the Third Party Tipping Fee is less than the Guaranteed Tonnage Tipping Fee, then, in addition to the Procurement Commission, (a) the Contracting Communities shall pay to the Company the difference between the Third Party Tipping Fee and the then current Guaranteed Tonnage Tipping Fee ("Shortfall Paymenf'), but (b) the Contracting Communities shall have the right, upon forty-eight (48) hours notice to the Company, to terminate any such Company waste supply arrangement which results in net payments by the Contracting Communities and direct the Company to accept Acceptable Waste from alternative sources procured by the Contracting Communities in order to reduce the Waste Delivery ShortfalL If the Third Party Tipping Fee is greater than the then current Guaranteed Tonnage Tipping Fee, the "Excess Tipping Fee Revenues" derived therefrom shall be separately accounted for and used as a credit against past, present andlor future Shortfall Payments. For the purposes of this calculation, it is assumed that the Procurement Commission in such cases will be paid separately by the Contracting Communities to the Company, and the Contracting Communities may permit such Excess Tipping Fee Revenues to be applied toward such purpose. Any such Excess Tipping Fee Revenues remaining at the expiration or termination of this Agreement shall be entirely for the Company's account. (c) Fees from Excess Waste and Special Waste. lfthe Company is procuring Excess Waste (other than Special Waste) from third parties, (i) the Company shall retain for its own account the portion of the Third Party Tipping Fee for such Excess Waste up to the then applicable Excess Waste Tipping Fee, and (ii) the portion of such Third Party Tipping Fee in excess of the then applicable Excess Waste Tipping Fee shall be split 60% to the Company and 40% to Contracting Communities. The Company shall retain for its own account the entire Third Party Tipping Fee for Special Waste. The Company agrees that the Contracting Communities may dispose at the Facility, free of charge, Special Waste arising out of governmental activities occurring within Stanislaus County, such as illegal drugs confiscated by law enforcement agencies. (d) Waste Delivery Priorities. Acceptable Waste delivered by the Contracting Communities pursuant to this Agreement shall have Processing priority over any waste arranged by the Company, except that Excess Waste delivered by the Contracting Communities shall be subordinate as follows: NYI v.I3 16

208 (i) From July 1,2012 until January 1,2016, up to 7,300 Tons per Contract Year of Special Waste arranged by the Company, shall have priority over Contracting Communities Excess Waste; and (ii) From January 2,2016 until July 1, 2027, up to 12,200 Tons per Contract Year of Special Waste arranged by the Company shall have priority over Contracting Communities Excess Waste. Special Waste deliveries to the Facility arranged by the Company shall in no event exceed the amounts set forth in Section 4.03(d)(i) and (ii) above for the periods set forth therein Operation of the Facility. (a) The Company shall operate and maintain the Facility in such manner as to ensure that the Facility is able on a continuous basis, subject to the requirements of sound operating practice, to receive and Process Acceptable Waste as required by this Agreement. (b) (1) By the Service Commencement Date, the County and the City shall each designate in writing a person to act as the service coordinator with respect to matters which may arise during the performance of this Agreement, and such person shall have authority to transmit instructions, receive information and eonfer with the Company's service coordinator. (2) By the Service Commencement Date, the Company shall designate in writing a person to act as the Company's service coordinator with respect to matters which may arise during the performance of this Agreement, and such person shall have authority to transmit instructions and receive information and confer with the County and the City service coordinators. (3) At any time after the initial designation by either party of its service coordinator, such party may designate a successor service coordinator by notice to the other party Facility Maintenance. (a) Safety of Persons and Property. The Company represents that it shall on and after the Service Commencement Date at its cost and expense: (i) take all reasonable precautions for the safety of, and provide all reasonable protection to prevent damage, injury, or loss by reason of or related to the operation of the Facility to, (A) all employees working in the Facility and all other persons who may be involved with the operation or maintenance of the Facility, (B) all materials and equipment under the care, custody, or control of the Company, and (C) other property on the Facility Site, including trees, shrubs, lawns, walks, pavements, roadways, structures, and utilities; (ii) establish and maintain the safety procedures of the Facility at a level consistent with Applicable Law and normal boiler and electrical generating plant practice; (iii) establish and enforce all reasonable safeguards for safety and protection, including posting danger signs and other warnings against hazards and promulgation of safety regulations; (iv) give all notices and comply with all Applicable Laws, rules, and lawful orders of any public authority relating to the safety of persons or property or their protection from damage, injury, or loss; and (v) designate a qualified, responsible member of its organization at the Facility whose 17

209 duty shall be plant safety, the prevention of fires and accidents, and the coordination of related activities, as necessary with federal, State, County and City officials. (b) Repair and Maintenance. The Company shall, on and after the Service Commencement Date and at its cost and expense, maintain the Facility and Facility Site at all times in good, clean, orderly condition, including implementing necessary repairs, purchasing necessary replacement equipment or parts for the Facility and clean-up consistent with industry standards relating to Acceptable Waste handling. The Company may at its own cost and without changing the rights and obligations of the parties hereunder incur any Capital Cost at the Facility at any time without the approval of the Contracting Communities. The Company shall, however, provide 30 days prior notice to the Contracting Communities of, and consider in good faith the comments received from the Contracting Communities during such 30-day period relating to, any proposed Capital Cost at the Facility in excess of$500,000. (c) Staffing. The Company shall at its cost and expense staff the Facility during the entire Service Term with the appropriate number of hourly and salaried employees consistent with good management practice. The Company will make reasonable efforts to staff the Facility with residents of the County. (d) Facilitv Equipment Services. The Company shall on and after the Service Commencement Date: (i) at its cost and expense, keep the Facility in good operating condition and repair, ordinary wear and tear excepted, and replace the same if necessary to enable performance consistent with this Agreement.; Oi) not permit anyone other than those adequately trained to use, repair, or overhaul the Facility; (iii) operate, at its cost and expense, the Facility in compliance with all applicable federal, State, County and City laws, rules, and regulations, including those pertaining to the environment and the federal Occupational Safety and Health Act, as amended, and the equivalent Califoruia requirements; and (iv) notify the Contracting Communities promptly if the Facility should be seriously damaged, irrespective of cause Contracting Communities' Visits and Inspections; Record Keeping and Reporting; Testing. (a) The Contracting Communities and their representatives shall have (i) at any reasonable time during the term of this Agreement and upon prior reasonable notice to the Company, the right to visit and inspect, and (ii) upon reasonable noticc from the Contracting Communities and the consent of the Company, which shall not be unreasonably withheld, to take visitors through the Facility, in order to observe and to permit others to observe the various services which the Company performs; provided that such visits shall be conducted in a marmer so as to minimize interference with the Company's performance under this Agreement. (b) In connection with such inspections or visits, the Contracting Communities shall, on their behalf, and on behalf of their agents and representatives, comply, and cause their agents and representatives to comply with all reasonable rules and regulations adopted by the Company, including a requirement that each person inspecting or visiting the Facility sign a statement agreeing (1) to assume the risk of being in the Facility, but not the risk of injury due to the intentional or grossly negligent acts of the Company and (2) not to disclose or use, consistent with Applicable Law, any confidential information of the Company other than for the purpose NY} v_13 18

210 for which it was furnished. The Company shall maintain and calibrate all Facility instrumentation at its cost and expense, except as otherwise provided in Section 4.09(b). If, upon inspection, the Contracting Communities shall discover any deficiencies in the cleanliness, repair, replacement or appearance of the Facility, the Contracting Communities may, but shall not be required to, give the Company written notification thereof. (c) (1) The Company shall establish and maintain an information system to provide storage and ready retrieval of Facility operating data, including all information necessary to verify calculations made pursuant to this Article IV and pursuant to Article VI. (2) The Company shall prepare and maintain proper, accurate, and complete books and records and accounts of all transactions related to the Facility. (3) The Company shall provide the Contracting Communities with monthly operations reports no later than five (5) working days after the close of the previous calendar month, including, but not limited to the following operating data: (A) the amount of Tons of Acceptable Waste and Excess Waste delivered by or on behalf of the Contracting Communities by truck with appropriate identification, indicating date and time of arrival; (B) the amount of Acceptable Waste delivered by third parties and not on behalf of the Contracting Communities, if any; (C) the total quantity of Process Rejects and Process Residue leaving the Facility; (D) the Tons of Contracting Communities By-Pass Waste; (E) the amount of Special Waste delivered (i) that was arranged by the Company or delivered by third parties, or (ii) by the Contract Communities; and (F) a statement of the amount of Excess Electric Revenue (defined below) and Excess Tipping Fee Revenue (defined above) received. These reports shall present the data in a form reasonably acceptable to the Contracting Communities and the Consulting Engineer. (4) The Company shall provide the Contracting Communities, its auditors, and the Consulting Engineer with reasonable access, including compatible computer data communication links, to the scale house and Facility meters and those records necessary to substantiate the Service Fee including records relating to quantities of Acceptable Waste delivered to the Facility, Excess Electric Revenues, Excess Tipping Fee Revenues, Contracting Communities By-Pass Waste and Process Residue leaving the Facility. (d) The Contracting Communities shall have the right to cause an independent third party to audit the books and records of the Company relating to the accounting of all revenues, costs, liabilities or expenditures that affect the rights, obligations or liabilities of the Contracting Communities under this Agreement, by providing to the Company written notice of exercise of such audit right within three years after the closing of the books for any period to be audited. The independent third party shall enter into a confidentiality agreement reasonably acceptable to the Company and the Contracting Communities before accessing such books and records of the Company. Following execution of such confidentiality agreement, the Company shall cooperate in all reasonable respects with the audit. The parties shall reconcile any discrepancy revealed by the audit within 60 days after the conclusion thereof. The Company shall maintain and calibrate all Facility instrumentation at its cost and expense. NYl v.13 19

211 4.07 Rejection Rights. (a) Rejection of Deliveries. The Company may reject Acceptable Waste (i) delivered at hours other than the Receiving Times, or (ii) in excess, in any applicable period, of the number of Tons set forth on Schedule I applicable thereto, but subject to the Contracting Communities rights hereunder to deliver Excess Waste pursuant to Section 4.01(b) and to the Company's rights under Section The Company may not reject any Acceptable Waste (including Excess Waste) brought by or on behalf of the Contracting Communities while it is accepting Waste from any other sources, except as otherwise provided in Section Acceptable Waste which the Company so rejects shall not be included in the computation of the Guaranteed Tonnage or other calculations herein. (b) Composition of Acceptable Waste. Nothing in this Agreement shall be construed to mean that the Contracting Communities guarantee the composition of any Acceptable Waste as it pertains to the proportion of any material contained therein or the energy value thereof; provided that this Section 4.07(b) shall not limit any right the Company may have to seek an equitable adjustment of the Service Fee or the Guaranteed Tonnage or the Billing Period Tonnages pursuant to Section 6.03 to reflect extensive change in the energy content of Acceptable Waste Receiving and Operating Hours. (a) On and after the Service Commencement Date, the Company shall keep the Facility, and alternate facilities under the control of the Company, if any, as Alternate Disposal Methods, open for the receiving of Acceptable Waste during the Receiving Times. (b) If the Company requests and the Contracting Communities agree, the Contracting Communities shall deliver and the Company shall accept Acceptable Waste at times other than the Receiving Times at no additional cost to the Contracting Communities. (c) Upon the Contracting Communities' request and if permitted under Applicable Law and permit conditions, the Company shall accept deliveries of Acceptable Waste at times other than the Receiving Times upon seven (7) days' prior written notice (or such shorter notice as may be practicable in the event of the occurrence of a natural disaster or other emergency condition). If the Company accepts waste pursuant to this Section 4.08( c), or otherwise agrees to accept such waste other than pursuant to Section 4.08(b), at hours other than the Receiving Times, the Contracting Communities shall pay all additional costs, if any, incurred by the Company as a result of extending the hours of Receiving Times, upon submission of Cost Substantiation Weighing of Waste Deliveries, Etc. The Company shall cooperate to minimize unloading delays at the Facility during the Receiving Times. (a) The County, on and after the Service Commencement Date, shall operate weighing facilities at the Fink Road Landfill for the purpose of determining the total Tons of Acceptable Waste delivered to the Facility and the respective Tons of all categories of materials leaving the Facility. The County shall be responsible for providing qualified County employees (the "Scale Operators") for the operation of the weighing facilities from 8:00 a.m. to 4:00 p.m. NYl v.13 20

212 Monday through Saturday, but not on Sundays or Legal Holidays. The County shall operate the scalehouse at all Receiving Times (which may be done without staff) and whenever the Contracting Communities request, pursuant to Section 4.08( c), that the Company accept deliveries of Acceptable Waste at times other than the Receiving Times. Such operation of the scalehouse shall be at the expense of the County. Upon the Company's request, the County shall operate the scalehouse at times other than the Receiving Times upon thirty (30) days prior written notice, unless a shorter time period is necessary or reasonable under the circumstances and agreed to by the County. If the County operates the scalehouse at hours other than the Receiving Times at the Company's request, the Company shall pay all additional costs, if any, incurred by the County as a result of extending the hours of Receiving Times, within thirty (30) days after submission of Cost Substantiation. (b) The County shall be solely responsible for the compensation of the Scale Operators. The Scale Operators shall at all times be under the supervision, direction and control of the County. The County shall be responsible for and bear the cost of supplies and materials incidental to operation of the scalehouse computer system (including hardware and software), and for labor and materials required for purposes of housekeeping in the scalehouse. The Company shall be responsible for and bear the cost of the installation, maintenance and repair (other than repairs required due to the negligence or other wrongful conduct of County personnel), of such weighing facilities, including the scales and the scalehouse itself (excluding the computer and its hardware and software systems). The Company shall retain ownership of the scale, the scalehouse, the scalehouse computer system and the customary office equipment provided by the Company related thereto. The computer equipment and software shall be the sole responsibility of the County, acting in its sole discretion. Software or computer equipment changes may be proposed at any time by the Company. All determinations of whether to utilize any new equipment or software shall be made by the County and the cost thereof shall be an expense of the Contracting Communities. (c) If at any time testing of the weighing facilities indicates that the scales do not meet the accuracy requirements of the Stanislaus County Agricultural Commission and Sealer of Weights and Measures, any adjustments of scale records actually recorded during the preceding thirty (30) days shall be negotiated by the Contracting Communities and the Company. If all weighing facilities are incapacitated or are being tested, the County, in consultation with the Company, shall estimate the quantity of Acceptable Waste delivered on the basis of truck volumes and estimated data obtained through historical information pertinent to the Company. These estimates shall be the basis for records during the scale outage and shall take the place of actual weighing records during the scale outage. (d) The County shall provide daily computer printouts or copies of all weight tickets or electronic delivery of the data to the City, the Company, and the applicable Hauler. Copies of all daily records and weight tickets shall be maintained by the County for a period of at least two (2) years. (e) The Company hereby reserves the right to have its representatives present at the Facility's scalehouse during the Receiving Times, or other hours that the Facility is open to receive Acceptable Waste pursuant to Section 4.08, to monitor the County's compliance with the provisions of this Section If the Company, during the term of this Agreement or any NY} v.13 21

213 extension hereof, reasonably believes the County has failed to provide satisfactory operation of tbe scalehouse, computer or software system, the Company shall give the County written notice of the alleged lack of satisfactory performance. The Company shall specify the nature of the alleged unsatisfactory performance and the County shall have thirty (30) days in which to cure the alleged unsatisfactory performance. If the Company substantially prevails in an action alleging such unsatisfactory performance by the County, tbe Company may, at its option, take over operation of the scalehouse and operate it pursuant to the provisions of this Section (f) In addition to the indemnification and liability provisions otberwise contained herein, tbe County will be responsible for and shall indemnify the Company and the City against any property damage caused by tbe Scale Operators while in the scalehouse or on the Facility Site or tbe scalehouse grounds, except to tbe extent such damage is due to the negligent acts or negligent omissions of tbe Company. This includes amounts required to repair such damage that are not covered by the insurance to be maintained by tbe Company in accordance with Schedule 5 hereto, including but not limited to tbe self-insurance and deductible portions thereof Storage. After delivery to the Facility and acceptance by the Company, no waste may be stored outside the Facility structure, except during an emergency or an Unforeseen Circumstance and tben only if applicable environmental and safety requirements are met Regulation of Haulers. (a) On and after tbe Service Commencement Date, the Contracting Communities shall require tbat each Hauler: (i) meet tbe requirements of Schedule 6 for the issuance of a franchise authorizing collection and/or transportation, or (ii) apply for such franchise from the Contracting Communities in accordance with such Schedule 6 requirements and otherwise take such actions as may be necessary to comply witb the requirements of Schedule 6 in respect of the issuance of such franchise; and (iii) obtain and maintain such franchise. (b) Notwitbstanding the foregoing and any provisions set forth in Schedule 6 that may specify otber requirements, the Contracting Communities shall require, as a condition of the issuance and maintenance of a franchise to any Hauler that such Hauler obtain and maintain commercial general liability insurance in form sufficient to insure against damage to and loss or destruction of property and injury to persons, in an amount at least equal to $2,000,000 for each occurrence. Each policy of such insurance shall (i) name tbe Contracting Communities and the Company as additional insureds and (ii) provide that such policy shall not be cancelled, terminated, amended, or permitted to lapse upon less than ten (10) days' prior written notice to tbe Contracting Communities and to tbe Company. (c) The Contracting Communities shall (i) use all reasonable efforts to enforce the requirements referred to in Section (a) above and Schedule 6, and (ii) cause the Haulers to comply with all reasonable traffic and safety rules, issued in writing by tbe Company, for the Facility. NY! v.13 22

214 4.12 Assistance with Water and Utilities. The Contracting Communities shall, upon the reasonable request of the Company, provide assistance in obtaining access to suitable water and utilities for the operation of the Facility, including the use of existing Contracting Communities' roads, easements, and rights-ofway, but the primary responsibility shall remain with the Company Disposal. ARTICLE V - DISPOSAL OF PROCESS RESIDUE AND PROCESS REJECTS (a) The Company shall be responsible for removing from the Facility, and transporting and disposing of, all Process Residue and By-Pass Waste. Such removal, transport and disposal shall be performed in accordance with all Applicable Laws regulating such material, its transportation and disposal. (b) The Company shall remove ferrous metals from the Process Residue and shall sell or dispose of such ferrous metal at a location other than the Landfill. (c) The Company shall have the sole and absolute right, at the Company's option, and pursuant to such terms and conditions as the Company determines in its sole and absolute discretion, to sell, trade, donate or otherwise alienate any and all Recovered Resources, solely for the account of the Company (except as provided in Section 6.05(c» Inadvertent Deliveries of Process Rejects. (a) The Contracting Communities shall use all reasonable efforts to cause only Acceptable Waste to be delivered to the Facility and in connection with the use of Alternate Disposal Methods. However, the parties agree that any inadvertent deliveries by the Contracting Communities of Process Rejects to the Facility or, as applicable, in using Alternate Disposal Methods shall not constitute a breach of the Contracting Communities' obligations hereunder. The Company shall remove from the Facility or, as applicable, any alternate facility being used by the Company as Alternate Disposal Methods, all Unacceptable Waste delivered by the Contracting Communities and transport and dispose of such, at a site or sites as directed by the Contracting Communities, at the cost and expense of the Contracting Communities based on the Company's direct costs. The removal, transport, and disposal of Unacceptable Waste shall be performed in accordance with Applicable Laws. The Company shall provide Cost Substantiation for all direct costs incurred under this Section (b) The Company in its sole discretion shall have the right to inspect on the Facility Site the contents of any vehicle, including the right to require the Hauler operating such vehicle to unload the contents in the receiving area for purposes of inspection, to determine the possible presence of Process Rejects. If any such vehicle is found to contain Process Rejects, the Company may reject delivery of a portion or all of the contents of such vehicle and (i) if such vehicle contains Unacceptable Waste, disposal of such Unacceptable Waste shall be the sole responsibility of the Hauler operating such vehicle or (ii) if such vehicle contains Hazardous Waste, the Company shall follow the procedures and have the obligations set forth in NYI v.13 23

215 paragraph (c) of this Section The Company shall promptly notify the Contracting Communities by telephone (followed by written notification) of any Hauler delivering, or suspected of delivering, significant amounts of Unacceptable Waste or Hazardous Waste to the Facility and provide to the Contracting Communities any data collected or records prepared related to such delivery. (c) The Contracting Commlmities shall be solely responsible for the storage, identification, testing, protection, containment and prompt removal from the Facility Site of Hazardous Waste delivered by or on behalf of the Contracting Communities. This includes any Haulers delivering waste pursuant to contracts or franchise arrangements with the Contracting Communities and any third party delivering waste as part of the Guaranteed Tonnage of the Contracting Communities. With regard to Hazardous Waste delivered by or on behalf of the Contracting Communities, the Company's sole obligations are as follows, at the cost and expense ofthe Contracting Communities: (i) Upon discovery of Hazardous Waste delivered by or on behalf of the Contracting Communities on the Facility Site, whether such discovery is made by way of an inspection pursuant to Section 5.02(b) or otherwise, the Company shall notify the Contracting Communities of such discovery; (ii) The Company shall follow the reasonable directions of the Contracting Communities regarding removal of such Hazardous Waste delivered by or on behalf of the Contracting Communities from the pit, tipping floor or any other location on the Facility Site and placement of such Hazardous Waste at a safe location, if any, on the Facility Site; provided that the Company shall use any reasonable methods immediately available to it to prevent Hazardous Waste from causing dangerous conditions to life or property or from violating any Applicable Laws related to Hazardous Waste prior to its removal from the Facility Site; (iii) The Company shall cooperate with the Contracting Community with regard to the Contracting Community'S obligations to store, identify, test, protect, contain and promptly transport from the Facility Site such Hazardous Waste; and (iv) The Company shall use reasonable care with regard to Hazardous Waste when such Hazardous Waste is on the Facility Site. (d) If Unaceeptable Waste or Hazardous Waste is delivered to the Facility by or on behalf of third parties that were not engaged by the Contracting Communities, the Contracting Communities' share of the cost incurred to remedy such delivery shall be in accordance with the benefit to the Contracting Communities of the tipping fee revenue from the delivery of such waste to the Facility had it been Acceptable Waste pursuant to Section (e) The Company shall be excused from failure or delay in performance of its obligations under this Agreement to the extent sueh failure or delay is caused by the delivery of Hazardous Waste by or on behalf of the Contracting Communities but not delivery of Hazardous Waste by any third parties on behalf of the Company. NY} vJ3 24

216 5.03 Provision of Disposal Site. Commencing on the Service Commencement Date and continuing through the Service Term, the Contracting Communities shall provide disposal capacity at the Fink Road Landfill (the "Landfilf') for the Company's disposal of all Process Residue, Unacceptable Waste and By-Pass Waste from the Facility. The Company may dispose of all Process Residue, Unacceptable Waste and By-Pass Waste from the Facility at the Landfill and shall pay to the Contracting Communities (collectively, the "Landfill Tipping Fee"): (i) a tipping fee of$26 for each Ton of Process Residue, and (ii) the then-posted gate rate at the Landfill for By-Pass Waste delivered to the Landfill. The portion of the Landfill Tipping Fee for Process Residue shall escalate annually at the same time and by the same percentage as the Guaranteed Tonnage Tipping Fee for Acceptable Waste escalates, after giving effect to the limiting parameters in the definition of such term set forth in Section 6.01 below. The Company may dispose of Unacceptable Waste delivered to the Facility by or on behalf of the Contracting Communities at the Landfill free of charge. The Contracting Communities shall not be obligated to pay to the Company any tipping fee for Unacceptable Waste delivered to the Facility by or on behalf of the Contracting Communities but shall only pay to the Company substantiated incremental handling, removal and transport costs for removing such Unacceptable Waste from the Facility, provided that the Contracting Communities make the Landfill available to the Company for disposal of such Unacceptable Waste free of charge. The Contracting Communities shall keep the Landfill open between the hours of 8:00 a.m. and 4:00 p.m., Monday through Saturday, and exclusive of Sundays and Legal Holidays. If because of an Unforeseen Circumstance, the Contracting Communities are unable to make or to continue to make the Landfill available to the Company, the Contracting Communities shall nevertheless make available to the Company other properly permitted sanitary landfills or suitable emergency disposal sites sufficient to satisfy the provisions ofthis Section. ARTICLE VI - SERVICE FEE AND OTHER PAYMENTS 6.01 Service Fee. Commencing with the first Billing Period and for each Billing Period thereafter, the Company shall be paid a Service Fee by the Contracting Communities for accepting, Processing, and/or disposing of Acceptable Waste that the Contracting Communities deliver to the Facility during each such Billing Period, but subjeet to Section 4.03(b) above, the aggregate Service Fee for each Billing Period shall not be less than what the aggregate Service Fee for such Billing Period would have been if the Contracting Communities had delivered the Billing Period Tonnage to the Facility during such Billing Period. Subject to the foregoing, the "Service Fee" shall be calculated in accordance with the following formula: NYl vJ3 25

217 SF = GTTF + EWTF - LTF + OA WHERE: SF = Service Fee GTTF = Guaranteed Tonnage Tipping Fee EWTF = Excess Waste Tipping Fee LTF = Landfill Tipping Fee OA = Other Amounts WHERE: "Guaranteed Tonnage Tipping Fee" means $32 per Ton of Acceptable Waste in the first Contract Year; the then-current Guaranteed Tonnage Tipping Fee shall be escalated annually effective on July 1 st of each Contract Year, beginning July 1,2013, by the percentage increase, as of the immediately preceding January 1 st compared to the next preceding January 1 st, in the Consumer Price Index, "Urban Wage Earners and Clerical Workers, All items, West - Size B/C (1996 = 100, not seasonally adjusted)" or if no longer published, a replacement index substituted by agreement of the parties each acting in good faith. At the time of each annual escalation, the as-escalated tip fee shall be (a) no greater than 120% of the average of the posted gate rates per Ton for the landfills (whether or not owned by the County) within a geometric radius of 50 miles from the Facility; and (b) no less than $32 per Ton; and if 120% of such average is less than $32 per Ton, then the Guaranteed Tonnage Tipping Fee for such Contract Year shall nevertheless be $32 per Ton; "Excess Waste Tipping Fee" means for the first 10,000 Tons per Contract Year of Excess Waste, $2.00 per Ton less than the then applicable Guaranteed Tonnage Tipping Fee, and for all further Excess Waste in such Contract Year, $4.00 per Ton less than the then applicable Guaranteed Tonnage Tipping Fee; "Landfill Tipping Fee" has the meaning given it in Section 5.03 above; and "Other Amounts" has the meaning given it in Section 6.04(a)(ii) below Costs and Benefits of Facility. (a) Except as expressly otherwise provided herein, or in the Facility Site Lease, Covanta shall solely bear all costs and risks, and have all benefits of ownership, operation and maintenance of the Facility, including casualties, liability and Unforeseen Circumstances (except as provided in Section 6.05 with respect to Unforeseen Circumstances). (b) Notwithstanding Section 6.02(a), the Contracting Communities shall reimburse Covanta for any taxes, assessments or fees imposed by the County, the City, or any special taxing district or authority under the control of the County or City, that are imposed on Covanta, the Facility, its operation or the solid waste industry and that are not generally applicable throughout the entire County (collectively, "Discriminatory Taxes"). Except for Discriminatory Taxes, Covanta will be responsible for the payment of any ad valorem taxes, personal or business taxes, and possessory interest lease or property taxes. NYl vJ3 26

218 6_03 BTU Values_ If, in the Company's reasonable judgment, the energy content of waste delivered to the Facility shall, on a weekly average basis over any period of twelve (12) consecutive weeks or more, either be more than 5200 BTU, (HHV) per pound, or less than 3800 BTU higher heating value (HHV) per pound, the Company may propose in writing to the Contracting Communities adjustments in the Service Fee or the Billing Period Tonnages and the Guaranteed Tonnage to reflect such a change in the energy content of the waste. In its proposal, the Company shall set forth in reasonable detail the results of measurements made and tests conducted during the period in question which tests and results shall be reasonably acceptable to, and confirmed by, the Consulting Engineer, demonstrating that waste with an energy content outside the above limits was Processed through the Facility during such period_ As soon as practicable after the Contracting Communities receive the Company's proposal, the Contracting Communities and the Company shall undertake discussions of such proposal in good faith. 6_04 Billing and Payments. (a) (i) The Company shall render a statement to the Contracting Communities after the last day of each Billing Period which shall set forth in reasonable detail the calculation of the Service Fee for the Billing Period, including, without limitation, the Guaranteed Tonnage Tipping Fee, Excess Waste Tipping Fee, and the credit for any Landfill Tipping Fee. (ii) Each such statement shall also include for such Billing Period: (A) all other amounts payable by the Contracting Communities to the Company hereunder; (B) all amounts payable by the Company to the Contracting Communities hereunder; and (C) and with respect to items (ii)(a) and (ii)(b) above, the balance due to, or from, the Contracting Communities (the "Other Amounts"). Other Amounts also includes: (1) Any amount due from the Contracting Communities for any damages paid, or credits provided, to the Contracting Communities by the Company during such Contract Year for failure to Process any Billing Period Tonnage, or portion thereof, if at the end of such Contract Year the Company has Processed the Guaranteed Tonnage, and (2) Unforeseen Circumstance Costs, and (3) Any other amounts payable under this Agreement by one party to the other for such Billing Period including amounts payable under Section S.03( c). NYl v.13 27

219 (b) The Contracting Communities shall pay to Covanta the Service Fee (if positive) within twenty (20) days of their receipt of such statement. If the Service Fee is negative, Covanta shall pay the difference to the Contracting Communities within twenty (20) days of the date of the statement. (c) To the extent that the actual value of any item in any Billing Period statement cannot be accurately determined at the Billing Period statement date, such item shall be billed on an estimated basis and an adjustment shall be made to reflect the difference between such estimated amount and the actual amount of such item on the Billing Period statement next following the date on which the Company learns the exact amount of such item. (d) Thirty days (30) prior to the end of each Contract Year, the Company shall provide to the Contracting Communities a written statement setting forth its reasonable estimate of the aggregate Service Fee for the next Contract Year, which statement shall not be binding on the Company. (e) Within forty-five (45) days after the end of each Contract Year the Company shall deliver to the Contracting Communities an annual statement, which shall show the computation of the Service Fee and the Other Amounts for such Contract Year, including corrections to all estimated amounts, and other adjustments due to the Company or the Contracting Communities. (f) If the annual statement reflects (i) any balance due to the Contracting Communities, then the Company shall, within thirty (30) days of delivery of the annual statement, pay such balance due to the Contracting Communities or (ii) any balance due to the Company, then the Contracting Communities shall, within thirty (30) days of receipt of the annual statement, pay to the Company such balance due Unforeseen Circumstances. (a) General. The obligations of the Company and of the Contracting Communities, respectively, to perform under this Agreement (other than an obligation to pay money due and owing) shall be excused due to the occurrence of one or more Unforeseen Circumstances, and the Service Fee shall be subject to potential increase for Unforeseen Circumstance Costs (to be included in the Other Amounts component of the Service Fee), as provided in this Section (b) Excuse of Performance. Neither the Contracting Communities nor the Company shall be liable to the other for any failure or delay in performance of any obligation under this Agreement (other than an obligation to pay money due and owing) if such failure or delay in performance is a result of the occurrence of an Unforeseen Circumstance. The party whose performance under this Agreement has been, or is imminently expected to be, affected by an Unforeseen Circumstance shall provide prompt notice (the "First UCC Notice") to the other party of (i) the Unforeseen Circumstance; and (ii) in the case of the Company, a preliminary, non-binding estimate of the Unforeseen Circumstance Costs (hereinafter defined) and the ways and manner that Unforeseen Circumstance Costs might be mitigated or reduced. The Consulting Engineer shall review and ascertain for the Contracting Communities the validity of the Company's written notice that an Unforeseen Circumstance has occurred. Whenever an Unforeseen Circumstance shall occur, the party claiming to be adversely affected thereby shall, NYl v.13 28

220 as quickly as reasonably possible, mitigate the cause thereof, undertake alternative performance if commercially reasonable under the circumstances, and shall to the extent commercially reasonable under the circumstances, reduce costs. The affected party shall, without limitation, also pursue applicable insurance proceeds and shall resume performance under this Agreement, as quickly as reasonably possible. The parties shall limit costs incurred in anticipation of an Unforeseen Circumstance to those reasonably calculated to prevent or diminish the loss or damage. Any insurance proceeds shall be applied to offset incurred Unforeseen Circumstance Costs. (c) Cost Recovery. (1) Cost of Unforeseen Circumstances. Within 180 days after the occurrence of an Unforeseen Circumstance affecting the Facility, (i) the Company shall determine whether, and to what extent, the Unforeseen Circumstance is reasonably expected to permanently reduce the ability of the Facility to accept or Process Acceptable Waste, the estimated net cost of any necessary repairs or reconstruction, and the estimated net increase in any operation or maintenance costs caused by the Unforeseen Circumstance, and (ii) the Company shall provide written notice thereof to the Contracting Communities (the "Second UCC Notice"). Subject to the provisions of Sections 6.05(c), (d) and (e) below or termination under Section 10.01(h) of Facility Site Lease Agreement, the Company shall diligently perform the necessary repairs or reconstruction of the Facility. (2) From July 1, 2012 until January 1, 2016: (i) the Company shall bear 75% of Unforeseen Circumstance Costs (including Cap and Trade Costs as defined below) and the Contracting Communities shall bear 25% of such Unforeseen Circumstance Costs, subject to Cost Substantiation. (ii) the Company shall separately account for the portion of Electric Revenues in excess of$82.50/mwh (the "Excess Electric Revenues"). Excess Electric Revenues shall be deemed to reduce the costs of complying with legislation or regulations imposing a cap and trade program on greenhouse gas emissions ("Cap & Trade Costs"), including without limitation, regulations promulgated pursuant to the Global Warming Solutions Act of 2006, if any, before the allocation between the parties described in Section 6.05( c )(2)(i) above is applied, and the Contracting Communities shall have no responsibility for Cap & Trade Costs in excess of 25% of the net amount remaining after such deemed reduction. In addition, any Cap & Trade Costs resulting from an increase in the Processing Capacity of the Facility beyond 310,000 Tons per Contract Year shall be solely the Company's responsibility, unless otherwise agreed to by the Contracting Communities. If on January 2, 2016, this Agreement remains in effect and there are any Excess Electric Revenues which have not been applied as contemplated by this Section 6.05( c )(2)(ii), then any such balance of Excess Electric Revenues shall be added to the amounts provided under Section 6.05(c)(3)(ii) below and applied as provided therein. However, if there is a termination of this Agreement before January 2, 2016, and there is any balance of Excess Electric Revenues remaining, then such balance shall be for the account of the Company. NY v.13 29

221 (3) From January 2, 2016 until the termination of this Agreement: (i) the Company shall bear 75% of Unforeseen Circumstance Costs and the Contracting Communities shall bear 25% of Unforeseen Circumstance Costs, subject to Cost Substantiation. (ii) the Company shall separately account for Excess Electric Revenues from Electric Revenues in excess of $92.50/MWH. Such Excess Electric Revenues, together with any balance transferred in accordance with Section 6.05( c )(2)(ii) above, shall be deemed to reduce any and all Unforeseen Circumstance Costs before the allocation between the parties described in Section 6.05(c)(3)(i) above is applied, and the Contracting Communities shall have no responsibility for Unforeseen Circumstance Costs in excess of 25% of the net amount remaining after such deemed reduction. If upon expiration or termination of this Agreement on or after January 2, 2016 there is any balance of such Excess Electric Revenues remaining, then such balancc shall be for the account of the Company. (4) Unforeseen Circumstance Costs. "Unforeseen Circumstance Costs" means (i) the actual net increase in operation and maintenance costs of the Facility required by the Unforeseen Circumstance, and (ii) the Amortized Portion (defined below) of Capital Costs (defined below). The Contracting Communities share of Unforeseen Circumstance Costs, consistent with the foregoing provisions of this Section 6.05( c), shall be included in the amount billed for the Service Fee, commencing with the first Billing Period after the Billing Period in which any such cost increases are incurred by the Company and continuing when and for so long as such cost increases are incurred by the Company. The Company shall invoice accordingly, and the Contracting Communities shall pay such invoices as provided in Section 6.04 above. The "Amortized Portion" shall be the monthly debt service associated with the actual, or hypothetical (as described below), financing of the Capital Cost (defined below) of any asset or project required as a result of an Unforeseen Circumstance that has a useful life greater than one year. The "Capital Cost' of any such asset or project, includes without limitation or duplication, (A) the purchase price and delivery costs, and out-of-pocket (including any internal staff costs directly related to the required work but excluding overhead expenses of the Company) and installation and construction costs, (B) transaction costs of any financing thereof, and (C) capitalized interest associated with the Unforeseen Circumstance financing, less, without limitation or duplication, (X) interest earnings during construction on any funds advanced on the Unforeseen Circumstance financing, (Y) insurance proceeds actually received by the Company on account of such Unforeseen Circumstance and (Z) amounts corresponding to insurance proceeds that would have been received for any insurable Unforeseen Circumstance, to the extent of the coverage required under this Agreement but not secured by the Company. As a first step, the parties shall determine the total Capital Cost of any asset or project resulting from an Unforeseen Circumstance and its expected useful life and then apply one of the following four methods, as appropriate. For eaeh of the four methods below, the parties agree that any financing, or hypothetical financing, shall result in approximately equal monthly debt service payments over the term of the financing. If the actual fmancing includes a construction loan followed by a permanent fmancing, then the Amortized Portion during the construction period shall be the actual interest payments on such construction loan. The parties shall utilize reasonable efforts to minimize the Capital Cost and financing costs of the Unforeseen NYI vJ3 30

222 Circumstance, including, without limitation, the use of tax-exempt or private activity or other tax exempt bonds: (i) If the entire Capital Cost of the asset or project is financed over a term equal to the expected useful life of the asset or project, then the Amortized Portion shall be the actual debt service associated with such financing; (ii) If the entire Capital Cost of the asset or project is financed over a term that is less than the useful life of the asset, then the Amortized Portion shall be determined by calculating a hypothetical monthly debt service assuming the entire capital cost is financed using the actual monthly interest rate (or annual interest rate divided by 12) associated with such financing, but repaid assuming a level monthly mortgage style repayment schedule over the useful life of the asset or project; (iii) If the Company internally funds the entire Capital Cost of the asset or project, then the Amortized Portion shall be determined by calculating a hypothetical monthly debt service which would be payable on a loan having a principal amount equal to the Capital Cost of such capital asset or project. The hypothetical loan shall assume (i) an interest rate equal to the Overdue Rate for the number of years equal to the useful life of the asset or project, and (ii) a level monthly mortgage style repayment schedule over the useful life of the asset or project; or (iv) If a portion of the Capital Cost of the asset or project is financed and the balance is internally funded by the Company, then the Amortized Portion shall be the sum of (i) or Oi) above for the financed portion, whichever applies, and (iii) above for the Company funded portion. The "useful life" of any asset shall be consistent with generally accepted accounting principles ("GAAP"), but if GAAP provides a range of values for the useful life of an asset, each party reserves the right to claim, as applicable, a value from such range, and the parties shall endeavor in good faith to agree on the appropriate value for the asset's useful life. In the event there is a dispute such dispute shall be resolved pursuant to Section 9.20 of this Agreement. (d) Unforeseen Circumstance Cost Limit. If the cumulative total Unforeseen Circumstance Costs incurred from the Service Commencement Date collectively by the Company and by the Contracting Communities exceeds $15,000,000, excluding Excess Electric Revenues applied pursuant to Section 6.05(c)(2)(ii) or Section 6.05(c)(3)(ii) above (such net amount being the "Initial UCC Termination Threshold"), then each of the Company, on the one hand, and the Contracting Communities, acting jointly on the other hand, shall have the right to terminate this Agreement without payment of the Termination Payment (defined below) or any other termination fee (a "UCC Termination") by providing written notice thereof to the other within 90 days after receiving written notice that such Initial UCC Termination Threshold has been reached. The party to whom such notice of termination is given shall have the right to avoid the UCC Termination by paying to the party giving the notice, within 30 days after receipt of the notice, the amount incurred in excess of $3.75 million in the case of the Contracting Communities, and the amount incurred in excess of $11.25 million in the case of the Company (each a "Termination Avoidance Amount"). If neither party timely exercises an applicable UCC NYl v.13 31

223 Termination or if a party avoids the UCC Termination pursuant to the immediately preceding sentence, this Agreement shall continue uninterrupted and in full force and effect, unless and until additional Unforeseen Circumstance Costs, in excess of the Initial UCC Termination Threshold, incurred collectively by the Company and by the Contracting Communities exceed a cumulative total of$i,500,000 (a "Subsequent UCC Termination Threshold"), at which time a UCC Termination right shall arise for each party again in accordance with the foregoing provisions of this Section 6.05(d), based on a Subsequent UCC Termination Threshold amount of$i,500,000 (rather than $15,000,000) and including the termination avoidance provisions with Termination Avoidance Amounts of $375,000 for the Contracting Communities and $1,125,000 for the Company. If neither party timely exercises the UCC Termination when the Subsequent UCC Termination Threshold is reached, or if a party avoids the UCC Termination pursuant to the immediately preceding sentence, then this same process shall apply each time a new Subsequent UCC Termination Threshold is reached during the Service Term. ( e) Constructive Total Loss. In the event the Second UCC Notice states that the Unforeseen Circumstance is expected to result in aggregate Capital Costs together with net increases in operation and maintenance costs of the Facility, over the remainder of the Service Term in each case ("Restoration Costs") in excess of $22 million (the "Loss Termination Threshold"), the Company shall include clear and convincing evidence of such Restoration Costs in the Second UCC Notice. The Contracting Communities will state in their response notice, to be delivered within twenty (20) days of receipt of the Second UCC Notice, whether they agree or disagree that the Restoration Costs will exceed the Loss Termination Threshold. If the Contracting Communities do not so agree, then such disagreement will be subject to dispute resolution pursuant to Section If the Contracting Communities state in their response notice that they agree that the Restoration Costs will be greater than the Loss Termination Threshold, or the decision delivered in the arbitration so determines, as applicable (either being a "Restoration Cost Substantiation"), then eaeh of the Company and the Contracting Communities shall have the right to terminate this Agreement by providing to the other no less that 180 days and no more than 240 days written notiee of termination (a "Termination Notice"). Such Termination Notiee shall be delivered within thirty (30) days after Restoration Cost Substantiation. On or before the termination date set forth in the Termination Notice, the Contracting Communities shall pay to the Company a termination payment equal to 25% of the Capital Costs of prior Unforeseen Circumstances occurring on or after the Contract Date that were not included in any prior Amortized Portions paid by the Contracting Communities, less unapplied Excess Electric Revenues (the "Termination Payment"). If the calculation pursuant to the immediately preceding sentence yields a negative number, the Termination Payment shall be zero. Upon payment of the Termination Payment, the Facility Site Lease Agreement shall terminate, Section 7.04 of the Facility Site Lease Agreement will apply and neither the Contracting Communities nor the Company shall have any further rights or obligations under this Agreement, except for any rights or obligations which expressly survive termination of this Agreement. (f) Site Lease Termination. This Agreement shall automatically terminate if the Facility Site Lease Agreement terminates in accordance with its terms, contemporaneously with such termination. NYl vJ3 32

224 6.06 No Offset or Waiver. lbe obligation of the Contracting Communities to pay the Service Fee shall not be subject to (i) any set-off, counterclaim, warranty claim, recoupment, defense or any other right which the Contracting Communities may have against the Company for any reason whatsoever whether in connection with the transactions contemplated hereby or in unrelated transactions, or (ii) the Contracting Communities at any time having immunity from suit on the grounds of sovereignty or otherwise. The payment by the Contracting Communities of the Service Fee shall neither constitute a waiver or an estoppel of any right or remedy of the Contracting Communities hereunder, nor shall it preclude the Contracting Communities from asserting any such right or remedy against the Company in a separate action Contracting Communities' Permit Obligations. To the extent that any permit or license which the Company is obligated to obtain contains conditions or requirements which are capable of being satisfied only by the Contracting Communities, the Contracting Communities shall use all reasonable efforts to satisfy snch conditions or requirements; provided that the cost to the Contracting Communities shall be reasonable. The Contracting Communities agree that they will not, either individually or collectively, exercise any condenmation or like power available to them to take the Facility or the Facility Site, or any portion thereof, which in the Company's reasonable judgment shall interfere with its ability to perform its obligations under this Agreement and that any such taking shall be deemed an Event of Default pursuant to Section 8.02(b) of this Agreement; provided, however, that any such taking which is required by Applicable Law or for the protection of public health and safety shall not be deemed an Event of Default but shall be an Unforeseen Circumstance. ARTICLE VII - FURTHER AGREEMENTS 7.01 Licenses, Approvals and Permits. The Contracting Communities shall provide all such cooperation as may reasonably be requested by the Company in connection with obtaining in a timely manner and maintaining the permits, licenses, and approvals required to be obtained and maintained by the Company in connection with the ownership, operation and maintenance of the Facility. The Company shall use all reasonable efforts to obtain and/or maintain all permits, licenses, and approvals required to be obtained and/or maintained by the Company in connection with the ownership, operation and maintenance of the Facility Nondiscrimination. The Company shall not discriminate or permit discrimination against any person because of race, color, religion, national origin, or sex. This provision prohibiting discrimination is a material term of this Agreement. NYl v.13 33

225 7.03 Insurance. The Company shall maintain the insurance coverages set forth in Schedule 5 subject to each party's right to request an adjustment to existing coverage, so that the insurance coverage hereunder is consistent with that of similar facilities, provided that the adjusted coverage is available on commercially reasonable terms. The Contracting Communities shall be made additional insureds under all such property and liability insurance policies of the Company and the Contracting Communities shall be insured thereunder for any State diversion credit losses that occur as a result of a necessary diversion of waste from the Facility following a casualty insured by the required business interruption and extra expense coverages as set forth in Schedule 5. Ihe Company shall be liable for any monetary loss caused by Unforeseen Circumstances, to the extent that any such Unforeseen Circumstance was required to be covered by insurance to be maintained by the Company pursuant to this provision, but was not, and, subject to any rights to terminate this Agreement pursuant to the terms hereof, shall be obligated to restore the Facility whether or not there are sufficient insurance proceeds therefor Joint and Several Obligations. The obligations of the County and the City hereunder shall be joint and several. ARTICLE VIII-DEFAULT AND TERMINATION 8.01 Events of Default by the Company. The following shall constitute "Events of Default' on the part of the Company: (a) Failure of the Company to accept Acceptable Waste from the Contracting Communities as required hereunder; (b) Violation by the Company of the Processing priority provlslons of Section 4.03( d); (c) Failure of the Company to make any payment that is owed to the Contracting Communities and past due hereunder within ten business (l0) days following receipt of the Contracting Communities' notice of non-payment to the Company; (d) Persistent and repeated failure of the Company to timely perform any material obligation under this Agreement, other than as set forth in Sections 8.01(a), (b) or (c) above, such as, but not limited to, operation of the Facility in violation of the environmental standards or permits, failure to properly maintain the Facility, and disregard for laws, ordinances, rules, regulations or orders of any public authority having jurisdiction over the Facility, the Facility Site, the Company or the Company's obligations under this Agreement; or (e) (i) the Company's or the Parent's being or becoming insolvent or bankrupt or ceasing to pay its debts as they mature, or making an arrangement with or for the benefit of its creditors or consenting to or acquiescing in the appointment of a receiver, trustee, or liquidator for the Facility or for any substantial part of its property, or (ii) a bankruptcy, winding up, reorganization, insolvency arrangement, or similar proceeding instituted by or against the NYI v.13 34

226 Company or the Parent under the laws of any jurisdiction, which proceeding has not been stayed or dismissed within thirty (30) days, or (iii) any action or answer by the Company or the Parent approving of, consenting to, or acquiescing in any such proceeding, or (iv) the levy of any distress, execution, or attachment upon the property of the Company or the Parent which shall substantially interfere with its performance hereunder Events of Default by Contracting Communities. The following shall constitute "Events of Default" on the part of the Contracting Communities: (a) failure of the Contracting Communities to make any payment that is owed to the Company and past due hereunder within ten (10) business days following receipt of the Company's notice of non-payment to the Contacting Communities; (b) the commencement by one or both of the Contracting Communities of a proceeding for taking or condemning the Facility or the Facility Site, or any portion thereof which in the reasonable judgment of the Company shall interfere with its ability to perform its obligations under this Agreement; provided that any such taking which is required by Applicable Law or for the protection of public health and safety shall not be an Event of Default; (c) Persistent and repeated failure of the Contracting Communities to timely perform any material obligation under this Agreement, other than the obligations described in Sections 8.02(a) and (b) above; or (d) (i) The Contracting Communities being or becoming insolvent or bankrupt or ceasing to pay its debts as they mature or making an arrangement with or for the benefit of its creditors or consenting to or acquiescing in the appointment of a receiver, trustee, or liquidator for a substantial part of its property, or (ii) a bankruptcy, winding up, reorganization, insolvency arrangement, or similar proceeding instituted by or against the Contracting Communities under the laws of any jurisdiction, which proceeding has not been stayed or dismissed within thirty (30) days, or (iii) any action or answer by the Contracting Communities approving of, consenting to, or acquiescing in, any such proceeding, or (iv) the levy of any distress, execution, or attachment upon the property of the Contracting Communities which shall substantially interfere with its performance hereunder Event of Default Remedies. (a) Company Opportunity to Cure. If a Company Event of Default described in Section 8.01(a), (b) and/or (d) has occurred, the Company shall have an opportunity to cure such Event of Default by commencing to cure within thirty (30) days after the Contracting Communities have given the Company notice of such Event of Default in reasonable detail and continuing to pursue the cure with due diligence thereafter. An Event of Default described in Section 8.01(c) shall require notice and provide an opportunity to cure only as provided therein. An Event of Default described in Section 8.01(e) shall not require any notice by the Contracting Communities and shall provide an opportunity to cure only as provided in (ii) therein. NYI v.l3 35

227 (b) Contracting Communities Opportunity to Cure. If a Contracting Communities Event of Default described in Section S-02(b) and/or (d) has occurred, the Contracting Communities shall have an opportunity to cure such Event of Default by commencing to cure within thirty (30) days after the Company has given the Contracting Communities notice of such Event of Default in reasonable detail and continuing to pursue the cure with due diligence thereafter. An Event of Default described in Section 8.02(a) shall require notice and provide an opportunity to cure only as provided therein. An Event of Default described in Section 8.02( d) shall not require any notice by the Company and shall provide an opportunity to cure only as provided therein. (c) Direct Damages & Termination. Events of Default shall give the non-defaulting party the right to pursue the defaulting party for direct, actual damages, subject to Section 8.04 below, and/or the right, subject to Sections 8.03(a) and (b) above, to terminate this Agreement by providing at least sixty (60) days written notice of termination. (d) Additional RemedieslDamages in Special Circumstances. (i) If the Company Event of Default is under Section 8.01 (b), then the Contracting Communities shall have as an additional remedy the right to seek a decree of specific performance to enforce its right of Processing priority and to preliminary and permanent injunctive relief in connection therewith and/or similar remedies in equity. (ii) If the Contracting Communities Event of Default is a failing to meet their obligations to deliver Acceptable Waste to the Facility while delivering Acceptable Waste to locations other than the Facility, then the Company shall have as an additional remedy the right to seek a decree of specific performance to enforce such delivery obligations and to preliminary and permanent injunctive relief in connection therewith and/or similar remedies in equity. (e) The remedies described in this Section 8.03 shall be the sole and exclusive remedies of the parties for Events of Default Limit of Liability. (a) Notwithstanding any other provision of this Agreement, in no event shall the Company, on the one hand, or the Contracting Communities, on the other hand, be obligated to pay damages to the other for any and all breaches and/or Events of Default under this Agreement, from and after the Contract Date, as determined by a court or an arbitration decision or agreed upon between the parties or actually paid by one party to the other, in a cumulative amount in excess of $25 million (the "Limit of Liability"). For purposes of determining if the Limit of Liability of a party has been reached at any time, the following amounts previously paid or then payable by such party shall not be included: (i) Unforeseen Circumstance Costs and (ii) the Guaranteed Tonnage Tipping Fee and Excess Waste Tipping Fee or the Landfill Tipping Fee, as applicable, and for disposal services rendered in each case. Also excluded from such Limit of Liability are tort claims for injury to persons or damage to property, even if pursued under a provision of contractual indemnity. For the purposes of determining if the Limit of Liability of a party has been reached at any time, any amounts received by that party from the other party as damages for any and all such breaches and/or Events of Default shall be ignored. NYI v.13 36

228 (b) If either party reaches the Limit of Liability, it shall give written notice thereof to the other party, and the other party shall have the right to terminate this Agreement by providing written notice thereof within sixty (60) days after receipt of the notice of reaching the Limit of Liability and such termination will be effective sixty (60) days from the date thereof. A party's obligation to pay damages arising on or before the date of or as a result of termination, up to the Limit of Liability, shall survive termination of this Agreement Special Termination Right. The Company shall have a one-time right to terminate this Agreement, for its convenience and without payment of any fee or damages, effective December 31, The Company may exercise such right of termination only by providing to the Contracting Communities written notice thereof by December 31,2014. If the Company exercises such right of termination, then the Facility Site Lease Agreement shall also terminate effective December 31,2016 and the provisions of Section 7.04 thereof shall be applicable Assignment. ARTICLE IX - MISCELLANEOUS (a) This Agreement may not be assigned by any party without the prior written consent of the other parties, except that the Company may, without such consent, assign its interest hereunder to an Affiliate that shall assume all the obligations under this Agreement; provided that the Company shall remain principally obligated for the full performance of the Company's obligations under this Agreement, and the Parent shall acknowledge in writing the continuing effectiveness and enforceability of the Parent Guaranty. (b) This Agreement shall be binding upon and inure to the benefit of the permitted successors and assigns of the parties hereto pursuant to this Section Any attempted assignment made contrary to this Section 9.01 shall be void. (c) Notwithstanding the above, the Company may collaterally assign this Agreement as security for financings secured by the Facility in accordance with Articles 12 and 13 of the Facility Site Lease Agreement Indemnification. (a) Comoany Indemnity. The Company agrees that it shall protect, indemnify and hold harmless the Contracting Communities and their officials, officers, members, employees, and agents (the "Contracting Communities Indemnified Parties") from and against all liabilities, actions, damages, claims, demands, judgments, losses, costs, expenses, suits and attorneys' fees, and shall defend the Contracting Communities Indemnified Parties in any suit, including appeals, for personal injury or death, or loss of, or damage to, property arising out of (i) the negligent acts, negligent omissions or intentional wrongful conduct of the Company or any of its officials, agents, or employees in connection with its obligations or rights under this Agreement, or (ii) the nonperformance ofthe Company's obligations under this Agreement. The Company is not required, however, to reimburse or indemnily any Contracting Communities Indemnified Party for loss or claim due to the negligent acts, negligent omissions or intentional NY} v.13 37

229 wrongful conduct of any Contracting Communities Indemnified Party, and the Contracting Communities shall reimburse the Company for the costs of defending any related suit. (b) Contracting Communities Indemnity. The Contracting Communities agree that they shall protect, indemnify and hold harmless the Company, the Parent, their subcontractors of any tier, and their respective officers, members, employees, and agents (the "Company Indemnified Parties") from and against all liabilities, actions, damages, claims, demands, judgments, losses, costs, expenses, suits, or actions and attorneys' fees, and shall defend the Company Indemnified Parties in any suit, including appeals, for personal injury or death, or loss of or damage to property of persons not parties to this Agreement arising out of (i) the negligent acts, negligent omissions or intentional wrongful conduct of the Contracting Communities or any of its officials, agents, or employees, contractors, or subcontractors in connection with the obligations or rights under this Agreement, or (ii) the nonperformance of the Contracting Communities obligations under this Agreement. The Contracting Communities are not required, however, to reimburse or indemnify any Company Indemnified Party for loss or claim due to the negligent act, negligent omission or intentional wrongful conduct of any Company Indemnified Party, and the Company shall reimburse the Contracting Communities for the costs of defending any related suit. (e) Waiver of Subrogation. The Company and the Contracting Communities hereby waive any and every claim for recovery from the other for any and all loss or damage to each other resulting from the performance of this Agreement, to the extent such loss or damage is recovered under the applicable party's own insurance policies Effect of Termination. Upon the expiration or earlier termination of this Agreement, pursuant to the terms of this Agreement, the obligations of the Company and the Contracting Communities for the payment of money or indemnification, arising from the conduct of the parties pursuant to this Agreement prior to such expiration or earlier termination of this Agreement, shall survive such expiration or earlier termination Overdue Obligations to Bear Interest. All amounts due hereunder, whether as damages, credits, revenue, or reimbursements, that are not paid when due shall bear interest at the Overdue Rate on the amount outstanding from time to time, on the basis of a 360-day year, counting the actual number of days elapsed, and all such interest accrued at any time shall, to the extent permitted by Applicable Law, be deemed added to the amount due, as accrued Exclusion of Liability. (a) IN NO EVENT, WHETHER BECAUSE OF A BREACH, EVENT OF DEFAULT OR ANY OTHER CAUSE, WHETHER BASED IN CONTRACT, TORT, WARRANTY, OR OTHERWISE, ARISING OUT OF THE PERFORMANCE OR NONPERFORMANCE OF THIS AGREEMENT, SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR, OR BE OBLIGATED IN ANY MANNER TO PAY, SPECIAL, NY v.13 38

230 INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES, EXCEPT AS EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT. (b) THE REMEDIES PROVIDED TO EACH PARTY IN THIS AGREEMENT SHALL BE EXCLUSIVE OF ANY OTHER REMEDIES A V AILABLE AT LAW OR IN EQUITY; PROVIDED THAT THE PARTIES HERETO MAY ENFORCE THEIR REMEDIES PROVIDED HEREIN BY APPROPRIATE PROCEEDINGS IN COURTS OF LAW OR IN EQUITY HAVING JURISDICTION Intellectual Property Rights. The Company shall pay all royalties and license fees relating to the Facility. The Company hereby warrants that the Facility and the contemplated operation of the Facility or the use of any component unit thereof, or the use of any patent, trademark or copyright, data, patented article, machine, or process, or a combination of any or all of the aforesaid, as contemplated by this Agreement shall not infringe any patent, trademark, or copyright or constitute the unauthorized use of a third person's trade secrets. The Company shall: (i) defend any claim or lawsuit brought against the Contracting Communities or any of their officials, agents, employees, or representatives for infringement of any such patent, trademark, or copyright, or for the unauthorized use of trade secrets by reason of the design, construction, or operation of the Facility, or (ii) at the Company's option, and at its sole cost, may acquire the rights of use under infringed patents, or modify or replace infringing equipment with equipment equivalent in quality, performance, useful life, and technical characteristics and development so that such equipment does not infringe, and the Company shall indemnify the Contracting Communities and their officials, agents, employees, and representatives against all liability, judgments, decrees, damages, interest, costs, and expenses (including reasonable attorneys' fees) recovered against the Contracting Communities, or any of its officials, agents, employees, or representatives sustained by any or all of the foregoing by reason of any actual or alleged infringement or unauthorized use. The Company is not, however, required to reimburse or indemnify any person for loss or claim due to the negligence or intentional wrongful conduct of such person Relationship of the Parties. Except as otherwise expressly provided herein, no party to this Agreement shall have any responsibility whatsoever with respect to serviees provided or contractual obligations assumed by any other party. Nothing in this Agreement shall be deemed to constitute any party a partner, franchisee, franchisor, agent, or legal representative of any other party or to create any fiduciary relationship between or among the parties. The Contracting Communities shall not have, through this Agreement or otherwise, except as provided by any applicable provision of the Facility Site Lease Agreement, (a) any title to or ownership interest in the Facility or (b) physical possession of or control over the Facility, during the term of this Agreement Notices. Any notices or communication required or permitted hereunder other than notices under Article VIII hereof shall be in writing and shall be sufficiently given if (i) delivered in person, NY v.13 39

231 (ii) sent by overnight courier and evidence of delivery is obtained, (iii) sent by with evidence of receipt of such , or (iv) sent by certified or registered mail, return receipt requested, postage prepaid, in each case properly addressed as provided below. Notices under Article VIII hereof shall be in writing and shall be sufficiently given only if given as provided in clause (i), (ii) or (iv) of the immediately preceding sentence. Notice addresses for the parties are as follows: If to the Company: 445 South Street Morristown, NJ Attention: Sr. Vice President, Business Management With a copy to: Covanta Energy Corporation 445 South Street Morristown, NJ Attention: Vice President & Deputy General Counsel kbily@covantaenergy.com If to the Contracting Communities: Chairman, Stanislaus County Board of Supervisors 1010 Tenth Street Modesto, California Ferrroc@stancounty.com With a copy to: Responsible person/department for County designated in Section and to: Mayor, City of Modesto 1010 Tenth Street Modesto, California kespinozal@modestogov.com With a copy to: Responsible person/department for City designated in Section Changes in the respective addresses to which such notices may be directed may be made from time to time by any party by written notice to the other party. NYl v.13 40

232 9.09 No Waiver. The waiver by any party of an Event of Default or a breach of any provision of this Agreement by any other party shall not operate or be construed to operate as a waiver of any other provision or any subsequent Event of Default or breach. The making ot or the acceptance of a payment by any party with knowledge of the existence of an Event of Default or breach shall not operate or be construed to operate as a waiver of any subsequent Event of Default or breach Entire Agreement; Modifications. The provisions of this Agreement, including the Schedules hereto, shall (a) constitute the entire agreement among the parties on the subject matter hereof, superseding all prior agreements and negotiations, and (b) be modified only by written agreement duly executed by the parties Headings. Captions, headings, titles, the table of contents and the list of schedules in this Agreement are for ease of reference only, and do not constitute a part of this Agreement Governing Law. This Agreement and any question concerning its validity, construction, or performance shall be governed by the laws ofthe State of California Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original, but all of which taken together shall be deemed a single instrument Severability. In the event that any provision of this Agreement shall for any reason be determined to be invalid, illegal, or unenforceable in any respect, the parties hereto shall negotiate in good faith and agree to such amendments, modifications, or supplements of or to this Agreement or such other appropriate actions as shall, to the maximum extent practicable in light of such determination, implement and give effect to the intentions of the parties as reflected herein, and the other provisions of this Agreement shall, as so amended, modified, or supplemented, or otherwise affected by such action, remain in full force and effect Right of First Refusal. During the Service Term, the Contracting Communities shall have a right of first refusal to purchase the Facility, on the same terms and conditions and for the same price, as set forth in an offer to purchase from a third party that the Company is willing to accept. The Company shall provide notice and a copy of such offer to the Contracting Communities, and the Contracting Communities shall have a period of sixty (60) days following such notice during which to exercise their right of first refusal by irrevocably and unconditionally accepting in writing the price, terms and conditions set forth in the offer. If the Contracting Communities do NYl v.13 41

233 not so exercise their right of first refusal within such sixty (60) day period, then the right of first refusal shall lapse at the end of such period. The right of first refusal will not be triggered by one or more sales of equity interests in the Company or its direct or indirect parent companies Fair Market Value Purchase Option. (a) At the expiration of the Service Term of this Agreement or any extension hereof, the Contracting Communities may, at their option, purchase the Facility, on an "as is" basis, at its "Fair Market Value," and such term is defined in subsection (b) below. The Contracting Communities shall provide notice of such purchase to the Company at least nine (9) months prior to the expiration of the Service Term. If the Contracting Communities do not timely provide notice of such purchase, then the option to purchase shall lapse. (b) Determination of Fair Market Value. (I) The "Fair Market Value" of the Facility shall be the value which would be obtained for the Facility in an arm's length transaction between an informed and willing buyer under no compulsion to buy, and an informed and willing seller, under no compulsion to sell, based upon the highest and best use of the Facility utilizing generally recognized professional criteria for the appraisal of industrial real estate, as the same shall be specified by mutual agreement of the Company and the Contracting Communities, taking into account the cost to remove andlor remediate all contamination on the Facility Site, if any, and assuming a rental for the Facility Site in accordance with Section 4.01(c) of the Facility Site Lease Agreement. If the Company and the Contracting Communities cannot agree as to the Fair Market Value of the Facility within thirty (30) days after notice of such purchase, then said value shall be mutually determined in an appraisal prepared and delivered by two (2) disinterested, Master Appraisal Institute certified and licensed industrial real estate appraisers, one of which shall be appointed by the Company, and the other of which shall be appointed by the Contracting Communities, each of which appointments shall be made within sixty (60) days after notice of such purchase. If the appraisers thus appointed cannot mutually agree upon the Fair Market Value of the Facility within seventy-five (75) days of the appointment of the second appraiser, each such appraiser shall within fifteen (15) days thereafter (i) simultaneously submit in writing to the other appraiser and to the parties his or her final appraisal of the Fair Market Value of the Facility, and (ii) appoint a third disinterested, Master Appraisal Institute certified and licensed industrial real estate appraiser who shall, within sixty (60) days of his or her appointment, select one of the final appraisals so provided by the first two appraisers, which shall then become the Fair Market Value of the Facility upon such selection. (2) If either party fails to appoint an appraiser within the time period herein provided, the other party may request the appointment of such appraiser by application to the Appraisal Institute, Chicago, Illinois or if it no longer exists, a similar institute providing qualified, disinterested real estate appraisers that is mutually acceptable to the parties. (3) If the two appraisers fail to agree upon the appointment of a third appraiser within the time period herein provided, either party may request the appointment of such appraiser by application to the Appraisal Institute, Chicago, Illinois or if it no longer exists, 42

234 a similar institute providing qualified, disinterested real estate appraisers that is mutually acceptable to the parties. (4) The appraiser, or appraisers as the case may be, shall give written notice to the parties stating the determination of Fair Market Value in accordance with this Section and shall furnish to each party a signed copy of such determination. In the event of the failure, refusal, or inability of any appraiser or appraisers to act, a new appraiser or appraisers shall be appointed, which appointment(s) shall be made in the same manner as hereinabove provided for the appointment of the appraiser or appraisers who failed, refused, or were unable to act. The expenses of the appraisal conducted in accordance with the provisions of this Section 9.17 shall be borne equally by the Company and the Contracting Communities Cooperation Regarding Claims. If either party hereto shall receive notice or have knowledge of any claim, demand, action, suit, or proceeding that may result in either (i) a claim for indemnification by such party against the other party pursuant to Section 9.02, or (ii) an Unforeseen Circumstance as to such party, such party shall, as promptly as possible, give the other party notice of such claim, demand, action, suit, or proceeding, including a reasonably detailed description of the facts and circumstances relating to such claim, demand, action, suit, or proceeding, and a complete copy of all notiees, pleadings, and other papers related thereto, and, in the case of a claim for indemnification pursuant to Section 9.02 such claim and the basis therefore in reasonable detail; provided that failure promptly to give such notice or to provide such information and documents shall not relieve the other party of any obligation of indemnification it may have under Section 9.02 except to the extent such failure shall materially diminish the ability of such other party to respond to, or to defend the party failing to give such notice against such claim, demand, action, suit, or proceeding. The parties hereto shall consult with each other and cooperate in respect of the response to and the defense of any such claim, demand, action, suit, or proceeding and, in the case of a claim for indemnification pursuant to Section 9.02, the party against whom indemnification is claimed shall, upon its acknowledgement in writing of its obligation to indemnify the party seeking indemnification, be entitled to assume the defense or to represent the interests of the party seeking indemnification in respect of such claim, demand, action, suit, or proceeding, which shall include the right to select and direct legal counsel and other consultants, appear in proceedings on behalf of such party and to propose, accept, or reject offers of settlement if the sole adverse effect of any such offer of settlement is an obligation to pay damages that is being fully indemnified against hereunder Venue. The Contracting Communities and the Company hereby agree that any action, suit, or proceeding arising out of this Agreement or any transaction contemplated hereby shall be brought solely in the Superior Court of California for the County of Stanislaus, and that neither the Contracting Communities nor the Company shall object to the institution or maintenance of any such action, suit, or proceeding in such court based on improper venue, forum non-conveniens or any other ground relating to the appropriate forum for such action, suit, or proceeding. NY v.13 43

235 9.19 Further Assurances. The Company and the Contracting Communities further covenant to cooperate with one another in all respects reasonably necessary to insure the successful consummation of the transactions contemplated by this Agreement, and each will take all actions within its authority to insure reasonable cooperation of its officials, officers, agents, and other third parties including, in the case of the Contracting Communities, enforcement of the terms of the franchises of the Haulers Arbitration. (a) Agreement to Arbitrate. In the event any dispute arises between the Company and the Contracting Communities under this Agreement then, in such case, either party may serve written notice of such dispute on the other party and each party shall undertake in good faith to resolve the dispute. Except as may be otherwise agreed to by the parties hereto, if the parties do not resolve the dispute within fifteen (15) days after such written notice, either party may, by further written notice (an "Arbitration Notice") to the other party, commence an arbitration proceeding, under, and in accordance with, the provisions of Article 19 of the Facility Site Lease Agreement, except that in an arbitration under this Agreement, the City and County shall act jointly as one party and notwithstanding such provisions of Article 19, either party may at any time initiate an action in court in respect of any equitable remedy to which such party is expressly entitled pursuant to this Agreement. NY v.13 44

236 IN WITNESS WHEREOF, the parties hereto have signed this Amended and Restated Service Agreement, as of the day and year first above written. COVANTA STANISLAUS, INC. By: Name: Title: COUNTY OF STANISLAUS By: Name: Title: CITY OF MODESTO By: Name: Title: 45

237 SCHEDULE 1 WASTE DELIVERY SCHEDULE The Guaranteed Tonnage of243,300 Tons of Acceptable Waste for each Contract Year shall be appropriately prorated for any Contract Year of less than 12 calendar months. The Billing Period Tonnage for each Billing Period in any Contract Year shall be determined at least 60 days prior to the beginning of each Contract Year by the mutual consent of the Company and the Contracting Communities in the form of an annual appendix (Appendix) to this Schedule 1. In the absence of such mutual consent, the Appendix applicable for the immediately preceding Contract Year shall apply again. The sum of the Billing Period Tonnages for the Billing Periods in any Contract Year shall equal the Guaranteed Tonnage for such Contract Year. In any event, delivery of Contracting Communities Tons shall not exceed One Thousand Seven Hundred (1,700) Tons in anyone day or Five Thousand Six Hundred 5,600 Tons in any one week. The Company and the Contracting Communities may revise the Appendix for the current Contract Year at any time by mutual consent. 46

238 SCHEDULE 1 - APPENDIX DELIVERY SCHEDULE FOR CONTRACT YEAR BEGINNING JULY 1,2012 BILLING PERIODS JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE TOTAL BILLING PERIOD TONNAGE 22,573 22,573 21,845 18,392 21,845 18,331 18,664 18,664 18,331 17,664 22,573 21, ,300 In any event, delivery of Contracting Communities tons shall not exceed 1,700 tons in anyone day or 5,600 tons in anyone week. The Company and the Contracting Communities may revise the Appendix for the current Contract Year at any time by mutual consent. NYl vJ3 47

239 SCHEDULE 2 FACILITY SITE DESCRIPTION Is as set forth in Schedule 1 in the Facility Site Lease Agreement NY v.13 48

240 SCHEDULE 3 AMENDED AND RESTATED FACILITY SITE LEASE AGREEMENT [TO BE INSERTED] NYI v.13 49

241 SCHEDULE 4 - PARENT GUARANTY GUARANTY AGREEMENT THIS GUARANTY AGREEMENT (this "Guaranty") is entered into as of the 1st day of July, 2012, by Covanta Holding Corporation, a Delaware corporation, as guarantor (the "Guarantor"), for the benefit of the County of Stanislaus, a political subdivision of the State of California, acting by and through its Board of Supervisors (the "County"), and the City of Modesto, a municipal corporation, acting by and through its City Council (the "City"). The County and City are collectively referred to herein as the "Contracting Communities." WITNESSETH: WHEREAS, Covanta Stanislaus, Inc. (the "Company") and the Contracting Communities are entering into, contemporaneously herewith, that certain AMENDED AND RESTATED SERVICE AGREEMENT FOR THE SUPPLY AND ACCEPTANCE OF SOLID WASTE (the "Service Agreement"), which provides for the Contracting Communities to deliver or cause to be delivered Acceptable Waste to the Facility and the Company to accept, process and/or dispose of Acceptable Waste at the Facility; Capitalized terms used but not defined in this Guaranty shall have the meanings ascribed to such terms in the Service Agreement; and WHEREAS, the Company and the County are entering into, contemporaneously herewith, that certain AMENDED & RESTATED FACILITY SITE LEASE AGREEMENT (the "Lease"), which provides for the leasing of the Facility Site from the County to the Company; and WHEREAS, as a condition of, and in accordance with, the Service Agreement and the Lease, the Company is required to cause this Guaranty to be executed and delivered to the Contracting Communities; and WHEREAS, the Company is a wholly-owned, indirect subsidiary of the Guarantor, and the Guarantor will receive a benefit from the Company and the Contracting Communities as a result of their entering into the Service Agreement and the Company and the County entering into the Lease; and WHEREAS, the Guarantor, as an inducement to the Contracting Communities to enter into the Service Agreement and as an inducement to the County to enter into the Lease, IS entering into this Guaranty; and WHEREAS, the term "parties," as used herein, shall mean the Guarantor and the two beneficiaries of this Guaranty, the County and the City. NOW, THEREFORE, for the purposes described in the foregoing recitals and intending to be legally bound, the Guarantor hereby agrees as follows: NY v.13 50

242 ARTICLE 1- Representations and Warranties of the Guarantor 1.01 Representations and Warranties. The Guarantor represents and warrants that: (a) The Guarantor is a Delaware corporation in good standing; (b) The Guarantor possesses all requisite power and authority under applicable laws to enter into and to perform all of the covenants and agreements set forth in this Guaranty; (c) The Guarantor has duly authorized all necessary action on its part to enter into this Guaranty in accordance with applicable laws; and (d) Guarantor has duly executed and delivered this Guaranty. ARTICLE II- Covenants and Agreements of the Guarantor 2.01 Unconditional Guaranty. The Guarantor hereby guarantees, absolutely, unconditionally and irrevocably, for the benefit of the Contracting Communities, the full and prompt performance of all obligations of the Company to the Contracting Communities under the Service Agreement and, for the benefit of the County, the full and prompt performance of the obligations of the Company under Section 7.04 of the Lease, each in accordance with their respective provisions, including without limitation, the obligation to pay money or damages owed by the Company for its failure to so perform such obligations (collectively, the "Guaranteed Obligations"). If any Guaranteed Obligation is not duly and timely performed by the Company in accordance with the Service Agreement or the Lease, as applicable, then the Guarantor shall immediately perform the same, or cause the performance thereof, itself, as if it were a party to the Service Agreement or to the Lease, as applicable Manner of Payment. All payments required to be made by the Guarantor under this Guaranty shall be made in lawful money of the United States of America Obligations of Guarantor Absolute. The obligations of the Guarantor under this Guaranty shall be absolute, irrevocable and unconditional, and, except as expressly set forth in the Service Agreement or in the Lease, as applicable, as an underlying right of the Company, shall not be subject to any set-off, counterclaim, reduction or diminution on account of any claim of Guarantor or the Company against the Contracting Communities or their assigns, or any other person, or because of any event or condition affecting the ability of the Company to perform the obligations of the Company in accordance with the Service Agreement or Lease (other than events or conditions for which, under the specific provisions of the Service Agreement or Lease, there is a discharge, release, or such performance is otherwise excused), or to any requirement in any case that the Contracting Communities (or any such assignee) first enforce any remedies that they or it may have against the Company or any other person, or seek to compel the Company to perform under the Service Agreement or Lease before proceeding against Guarantor hereunder; provided, that no such set -off, counterclaim, reduction or diminution is hereby waived or released, and any of the same may be asserted by Guarantor in a separate proceeding against the Contracting Communities or County as applicable, or any such assignee, and shall remain in full 51

243 force and effect until the Guaranteed Obligations shall have been fully performed, and the Guaranteed Obligations shall not be affected, modified, diminished or impaired upon the happening, from time to time, of any of the following events, each of which is hereby expressly waived as a defense to its liability hereunder: (a) The failnre of the Guarantor to receive notice of the occurrence of a default under the Service Agreement or under the Lease; (b) The neglect or failnre of the Company to enforce, to assert, or to exercise or preserve, any right, or rights of action, or power or remedy, against any party, person or property; (c) The compromise, settlement, release, alteration, indulgence, waiver or any other change or modification of any obligation or liability of the Company under the Service Agreement or the Lease, except to the extent to which such obligation or liability shall have been expressly compromised, settled, released, altered, indulged, waived, changed or modified in writing by the Contracting Communities or by the County, as applicable; (d) Any neglect or failure, omission or delay on the part of the Contracting Communities to enforce, to assert, or to exercise or preserve any right, right of action, power or remedy conferred upon or vested in the Contracting Communities hereunder or under the Service Agreement, or any neglect or failure, omission or delay on the part of the County to enforce, to assert, or to exercise or preserve any right, right of action, power or remedy conferred upon or vested in the County hereunder or under the Lease; (e) The voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with creditors or readjustments or other similar proceedings relating to the Company, or either of the Contract Communities, or any of their respective assets; (f) The release of the Guarantor from performance or observance of any obligation, covenant or agreement contained in this Guaranty, except to the extent such may be expressly released in writing by the Contracting Communities or by the County, as applicable; (g) The default or failure of the Guarantor fully to perform any of its obligations set forth in this Guaranty; or (h) Guarantor's assignment or delegation by operation of law or otherwise of this Guaranty or its obligations hereunder, except as provided in Section 2.05 below. (i) Any allegation or contest of the validity of this Guaranty in any proceeding; G) The invalidity, irregularity, illegality, or unenforceability of, or any defect in, the Service Agreement or the Lease; NY} vJ3 52

244 (k) Any present or future law or order of any government or of any agency thereof, purporting to reduce, amend or otherwise affect the Service Agreement or the Lease or to vary any terms of payment or performance under the Service Agreement or the Lease; (I) The transfer, assignment or encumbrance, or the purported or attempted transfer, assignment or encumbrance, by the Company of all or any part of its interest in the Facility or its rights under the Service Agreement or the Lease, or any failure of or defect in title with respect to the interest of the Company in the Facility or the Company's rights under the Lease, or of the interest of the County in the Facility Site; (m) this Guaranty. Any default or failure of Guarantor fully to perform any of its obligations under 2.04 Obligations of Guarantor Not Affected by Bankruptcy. The obligations of the Guarantor hereunder shall not be affected by any bankruptcy, arrangement of creditors, reorganization or other similar proceedings of the Company; and the Guarantor specifically waives any right or benefit which could accrue to it by reason of any such proceeding and agrees that the same shall not affect the liability of the Guarantor hereunder, regardless of the effect that such proceedings may have with respect to the obligations of the Company Change of Guarantor. The Guarantor may assign this Guaranty and delegate its obligations hereunder (a "Transfer") only (i) to a transferee who (a) assumes in writing all of Guarantor's obligations under this Guaranty, and (b) posts an irrevocable and unconditional letter of credit, securing the Guaranteed Obligations in both the Service Agreement and Lease, in a form reasonably satisfactory to the Contracting Communities and in an amount equal to the Limit of Liability (as such term is defined in the Service Agreement), and (ii) if the Guarantor provides to the Contracting Communities (a) at least ten business days advance written notice of the Transfer, and (b) a fully-executed original of the written assumption described in clause (i)(a) above and the letter of credit required by clause (i)(b). Upon satisfaction of all clause (i) and (ii) requirements, the Guarantor shall automatically be released of all liability under this Guaranty. In the alternative, the transferee and the agreements effectuating the transfer may all be consented to in writing by the Contracting Communities, which consent shall not be unreasonably withheld. ARTICLE HI Miscellaneous 3.01 Time When Guaranty Effective. As the Service Agreement has been fully executed and delivered by the Company and the Contracting Communities and the Lease has been fully executed and delivered by the Company and the County, as of the date hereof, the obligations of the Guarantor hereunder shall be effective as of the date hereof Remedies of Contracting Communities. In the event of default by the Guarantor in the punctual discharge of its obligations hereunder the Contracting Communities with respect to the Service Agreement, or the County with respect to the Lease, shall be entitled to enforce this Guaranty to the fullest extent provided by applicable law. NY v.13 53

245 3.03 Pursuit; Waiver. No remedy conferred upon or reserved to the Contracting Communities or County hereunder is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Guaranty or now or hereafter existing at law or in equity or by statute. The Contracting Communities or the County, as the case may be, shall have no obligation to pursue their remedies against the Company before pursuing the Guarantor under this Guaranty. If the Company has breached or defaulted on any obligations that are Guaranteed Obligations hereunder, Guarantor shall be obligated hereunder upon receipt of notice thereof given as provided in Section In order to entitle the Contracting Communities or the County, as the case may be, to exercise any remedy reserved in this Guaranty, it shall not be necessary to give any notice, other than such notice. No delay or omission to exercise any right or power accruing upon any default, omission or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised, from time to time, and as often as may be deemed expedient. In the event any provision contained in this Guaranty should be breached by any party and thereafter duly waived by the other party so empowered to act, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver, amendment, release or modification hereof shall be established by conduct, custom or course of dealing, but shall be established solely by an instrument, in writing, duly executed by the appropriate parties Entire Agreement. This Guaranty constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof Expenses. Guarantor shall pay to the Contracting Communities or the County, as the case may be, all reasonable costs and expenses (including the fees and disbursements of counsel) incurred in the enforcement of their rights against Guarantor hereunder Notices. All notices or demands and other communications to Guarantor under this Guaranty shall be in writing and shall be sufficiently given if (i) delivered in person, (ii) sent by overnight courier and evidence of delivery is obtained, (iii) sent by with evidence of receipt of such , or (iv) sent by certified or registered mail, return receipt requested, postage prepaid, and (where applicable) addressed as provided below: To Guarantor: With a copy to: 445 South Street Morristown, NJ Attention: Chief Operating Officer smyones@covantaenergy.com 445 South Street Morristown, NJ Attention: Chief Legal Officer tsimpson@covantaenergy.com 3.07 Severability. The provisions of this Guaranty shall be severable; and in the event of the invalidity or unenforceability of anyone or more phrases, sentences, clauses, Articles, NYl v.13 54

246 Sections or parts contained in this Guaranty, such invalidity or unenforceability shall not affect the validity or enforceability of any remaining portions thereof Choice of Law. This Guaranty shall be construed in accordance with and shall be governed by the laws of the State of California, without regard to conflict oflaws principles Term. This Guaranty shall remain in full force and effect until the Guaranteed Obligations shall have been fully performed Amendment. This Guaranty may be amended and/or supplemented, from time to time, only by a written document duly executed by all the parties hereto. NYl v.13 55

247 IN WITNESS WHEREOF, the Guarantor, intending to be legally bound and pursuant to proper authorization of its governing body, does hereby cause this Guaranty to be executed by its duly authorized officer, all as of the day and year first above written. COY ANT A HOLDING CORPORA non By: Nmne: Title: 56

248 SCHEDULES REQUIRED INSURANCE I. Required Insurance. Company shall obtain, pay for and maintain the following insurance with respect to the operation and maintenance of the Facility: (a) (i) Workers' Compensation Insurance Coverage in compliance with the Workers' Compensation Law of the State extended by the Broad Form All States Endorsement, the United Sates Longshore and Harborworker's Coverage Endorsement and the Voluntary Compensation Coverage Endorsement. (ii) Employers' Liability Insurance Coverage subject to the minimum Limit of Primary Bodily Injury Liability Insurance required to support the purchase of the Umbrella Liability Insurance set forth in subparagraph 1 (d) of this Schedule 5. (b) Commercial General Liability Insurance. Commercial General Liability Form covering all premises and operations including independent contractors, products, and operations, to be extended by the following endorsements: (i) The applicable limit of liability shall be the minimum Combined Single Limit of Primary Insurance required to support the purchase ofthe Umbrella Liability Insurance set forth in subparagraph 1 (d) of this Schedule 5. (c) Comprehensive Automobile Liability Insurance Coverage applicable to all owned, hired and non-owned vehicles subject to the minimum Combined Single Limit of Primary Insurance required to support the purchase of the Umbrella Liability Insurance set forth in subparagraph 1 (d) of this Schedule 5. (d) Umbrella Liability Insurance. The total Limit of Liability shall be $25 million per occurrence and, as applicable, in the aggregate. (e) All Risk Property Insurance. (i) Coverage on All Risks Basis in an amount not less than 100% of the replacement cost of the Facility to protect against loss of, damage to or destruction ofthe Facility. (f) Business Interruption and Extra Expense Insurance. Business Interruption and Extra Expense Insurance on the Facility to protect the Company and the Contracting Communities as their interests may appear covering the loss of revenues attributable to the Facility (and extra expense incurred), including the loss of any Contracting NY} v.13 57

249 Communities' State Diversion Credit, by reason of the total or partial suspension of, or interruption in, the operation of the Facility caused by a loss or damage to or destruction of any part of the Facility or Facility Site as a result of the perils insured against pursuant to subparagraph I (e) of this Schedule 5 covering a period of suspension or interruption of no less than one year and sufficient to facilitate reinstatement of the facility to its pre-loss condition and in an amount equal to the Facility's gross revenues less discontinuing expenses during any such period. All policies obtained pursuant to subparagraph I (e) of this Schedule 5 may be subject to normal exclusions relating to nuclear risks, war risks and such other perils as are general imposed by Insurers on similar properties and contain deductibles and sublimits that are commercially reasonable. (g) Boilers and machinery insurance in the aggregate amount offull replacement value of the boilers and machinery. 2. Additional Insureds. The Company shall name the Contracting Communities (including their respective officers, members, employees and agents) as additional insureds (the "Additional Insureds") on all insurance policies required pursuant to this Schedule 5 (other than subparagraph 1 (a) (i) hereof) as their respective interests may appear in accordance with the contracts and agreements (related to the Facility and Facility Site) to which they are a party. 3. Special Insurance Provisions. (a) Such coverages shall not be cancelled without giving the Contracting Communities at least sixty (60) days prior written notification thereof. (b) The Insurers shall have no recourse against the Additional Insureds for payment of.. any msurance premmm. (c) If at any time the insurance set forth in this Schedule 5 shall fail to comply with the insurance requirements specified, the Company shall, upon notice to that effect, promptly apply for a new policy and when obtained, file a certificate thereof with the Contracting Communities. Failure of the Company to take out and/or maintain any required insurance shall not relieve the Company from any liability hereunder. (d) The Company and any subcontractors shall evidence compliance with the Worker's Compensation law by supplying following attested documentation: (i) A Workers' Compensation certificate, prescribed for proof of compliance with the Compliance law; (ii) If the Company shall claim that it is not required to carry a Workers' Compensation Policy, a temporary permit shall be obtained by the Company, NY} v.13 58

250 which shall complete all requisite documentation and send one copy of the same to the Contracting Communities. The Company shall transmit the other copy of the completed documentation to the State's Workers' Compensation Board for the investigation and a report; and (iii)ifthe Company shall be self-insured for Workers Compensation, it shall present a certificate from the State Workers' Compensation Board evidencing that fact to the Contracting Communities. (e) Such liability insurance as is afforded by the insurance set forth in subparagraphs I (a) (ii), (b),(c) and (d) of this Schedule 5 shall be primary without the right of contribution from any other policies of insurance that are carried (or self-insured) by an Additional Insured with respect to their interests in the Facility or the Facility Site and, further, such liability insurances shall expressly provide that all of the provisions thereof, except the limits ofliability, shall operate in the same marmer as ifthere were a separate policy covering each Insured. (f) The Company shall arrange for appropriate certificates of insurance to be issued to Additional Insured for coverage required by this Schedule 5. (g) To the extent reasonably available, the company shall maintain the insurance set forth in this Schedule 5 with Insurers that carry an A.M. Best's "A-" or equivalent rating and a financial category size of VII or better. Further, the Company shall maintain such insurance only with companies that are authorized to do business in the State. 4. Waiver of Subrogation. The Company and the Contracting Communities hereby waive any and every claim for recovery from the other for any and all loss or damage to each other resulting from the performance of this Agreement, which loss or damage is covered by valid and collectible insurance policies to the extent that such loss or damage is recovered under said insurance policies. Inasmuch as this mutual waiver will preclude the assigmnent of any such claim to the extent of such recovery, by subrogation (or otherwise) to an insurance company (or any other person), the Company and each Contracting Community agree to give to each insurance company which has issued, or may issue in the future polices of insurance, written notice of the terms of this mutual waiver, and to have said insurance policies properly endorsed; if necessary, to prevent the invalidation of said insurance coverage by reason of said waiver. NY v.13 59

251 SCHEDULE 6 HAULER REQUIREMENTS Pursuant to the Stanislaus County Ordinance Code and the Modesto Municipal Code, the County and City may designate the disposal site for solid waste collected, removed or transported within the City and unincorporated areas of the County by solid waste collection companies. These haulers operate under franchise agreements (in the case of the County) to collect residential, industrial and commercial solid waste within the unincorporated areas of the County, and collection agreements (in the case of the City) to collect residential, industrial and commercial solid waste within the City. Private operators of transfer stations located in Stanislaus County receive solid waste from City collectors and certain County franchisees and transport such solid waste to approved disposal sites (the remaining County franchisees deliver their solid waste directly to such approved disposal sites). Transfer Stations must receive and adhere to solid waste facilities permits issued by the California Department of Resources Recycling and Recovery (formerly known as the California Integrated Waste Management Board). Pursuant to existing authorities of the Stanislaus County Ordinance Code and the Modesto Municipal Code, franchise agreements and collection agreements with the haulers, and the provisions of the new Service Agreement relating to the delivery and processing of wastes at the Facility, the County and City will designate the Facility as the disposal site to be used for the disposal of acceptable waste by all County franchisees and City collectors. NYI v.13 60

252 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION APPROVING THE AMENDED AND RESTATED FACILITY SITE LEASE AGREEMENT COV ANT A STANISLAUS, INC. WHEREAS, on December 17, 1985, the City of Modesto and County of Stanislaus (Contracting Communities) entered into an agreement for administration oftbe City/County Service Agreement with tbe Stanislaus Waste Energy Company (now Covanta Stanislaus) for supply and acceptance of solid waste, and WHEREAS, since that time, tbe City has been partners witb Stanislaus County and Covanta Stanislaus in the Stanislaus Resource Recovery Facility (tbe "Waste-to- Energy" or "WTE" Facility), and WHEREAS, the City and County operate the project as a Joint Powers Agency under a Joint Powers Agreement, with the County acting as tbe Treasurer, and WHEREAS, under tbe current Service Agreement, the Contracting Communities pay Covanta a service fee to operate tbe facility and are also responsible for all pass through costs associated with the facility such as taxes, insurance, air permit fees, ash disposal, etc., and WHEREAS, tbe Contracting Communities are also responsible for any costs associated witb unforeseen circumstances such as changes in law, major upgrades or any acts, events or conditions that have a material adverse effect on tbe operation of tbe facility, and WHEREAS, tbe Contracting Communities are responsible for delivering wastes to tbe facility under a minimum tonnage guarantee of243,300 tons, and Covanta uses tbis 06/26/20121PR&N/JHannonlltem

253 waste to generate electricity, which it sells to PG&E under a Power Purchase Agreement (PPA), and WHEREAS, the Contracting Communities currently retain 90% of the electric revenue generated by the facility, all of the disposal fees, 50% of metal recycling revenue and 30% of supplemental waste revenue, which revenues are used to offset costs, and WHEREAS, the existing Service Agreement was set to expire on December 31, 2009, and in 2007, staff from the County Department of Environmental Resources and the City of Modesto Solid Waste Division began negotiations on a new contract with Covanta, and WHEREAS, those negotiations proved unsuccessful with Covanta asking for more concessions that staff were willing to agree to, so in May 2009, the County and the City of Modesto exercised an option given in the original contract to extend the contract under the same terms an additional six years through December 31, 2015, and WHEREAS, when the Power Purchase Agreement (PP A) with PG&E expired in January, 2010, Covanta elected to extend its contract with PG&E under extension provisions pursuant to California Public Utilities Commission (CPUC) Decision No , and WHEREAS, those provisions caused the price paid for power to revert to the Short Run Avoided Cost, or "SRAC", which was about $55 per MW at the time and has since dropped even further, and WHEREAS, this pricing also did not include a premium for renewable energy, and the capacity payment was reduced, and as a result, revenues from electricity generation declined sharply resulting in a significant operating deficit, and 06/26/20121PR&N/lliannonlItem

254 WHEREAS, both the Contracting Communities and Covanta recognized that it would be in our joint interests to return to the negotiating table and secure a long term commitment that would motivate Covanta to negotiate a new PPA at much more favorable rates than current SRAC rates, and WHEREAS, a new negotiating team was formed and reopened negotiations with Covanta, with the objectives of preserving the current RRA balance, a stable and predictable tipping fee, a commitment to no increased importation of waste, meeting diversion requirements and preserving landfill capacity, and reducing City/County risk exposure from change-in-iaw, public perception, and change in science/technology, and WHEREAS, the Contracting Communities negotiating team has met on a regular basis over the past year and has provided periodic updates on the status of negotiations to the Solid Waste-to-Energy Executive Committee and the City-County Liaison Committee, and WHEREAS, major deal points from the negotiations were agreed upon by the team and Covanta and were outlined in a Term Sheet approved by the Council and Board of Supervisors, and WHEREAS, the negotiating team and Legal Counsel to the Executive Committee, Sidley Austin LLP, have negotiated a new Service Agreement and Facility Site Lease Agreement with Covanta, to become effective on July 1, 2012, and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that the Council hereby approves the new Facility Site Lease Agreement with Covanta Stanislaus, Inc., a copy of which is attached hereto as Attachment "A" and incorporated herein by reference IPR&N/lliannon/Item

255 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: (SEAL) Councilmembers: Couneilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None ATTEST.~~ STE HANIE LOPEZ, C Y C rk APPROVED AS TO FORM: lPR&NIJHannonJItem

256 EXECUTION COPY COUNTY OF STANISLAUS, CALIFORNIA AND COVANTA STANISLAUS, INC. AMENDED AND RESTATED FACILITY SITE LEASE AGREEMENT Dated as of July 1, 2012 SFl v.15

257 TABLE OF CONTENTS PAGE Recitals... 1 ARTICLE 1. DEFINITIONS, SCHEDULES INCORPORATED BY REFERENCE AND INTERPRETATION... 3 Section Definitions... 3 Section Schedules Incorporated by Reference... 3 Section Interpretation... 3 ARTICLE 2. REPRESENTATIONS... 3 Section Representations... 3 ARTICLE 3. LEASED LAND AND TERM...,... 5 Section Leased Land... 5 Section Initial Tenn... 5 Section Lessee's Right to Renew Lease... 5 ARTICLE 4. RENT... 6 Section Amount and Payment ofrenl... 6 ARTICLE 5. TAXES... 6 Section Taxes... 6 ARTICLE 6. USE... 7 Section Description of Use... 7 ARTICLE 7. IMPROVEMENTS AND EQUIPMENT... 8 Section Improvements... 8 Section Utilities... 8 Section Lessor's Cooperation... 8 Section Rights and Obligations upon Tennination... 8 Section Ingress and Egress During Lease Tenn Section Improvements and Maintenance of Routes For Ingress and Egress Section No Lessor Improvements Section Quiet Enjoyment SFl v_15 -[-

258 ARTICLE 8. REPAIRS Section Lessee's Duty to Maintain Premises ARTICLE 9. MECHANIC'S LIENS Section Prohibition Against Mechanic's Liens -- Indemnification of Lessor Section Contest by Lessee-Surety Bond Section Lessor's Right to Remove Lien... " Section Notices of Nonresponsibility ARTICLE 10. CONDEMNATION/DAMAGE TO FACILITy Section Loss Events Section Rent Abatement Section Allocation of Taking Award during Facility Operation Section Effect of Termination ARTICLE 11. INSURANCE Section Lessee's Worker's Compensation Insurance Section Lessee's Liability Insurance ARTICLE 12. ASSIGNMENTS AND SUBLETTING Section Lessor's Approval Required Section Termination Section Effect of Lessor's Consent Section Written Assumption Agreement ARTICLE 13. RIGHTS OF FACILlTYLENDERS Section Section Section Notice to Facility Lenders Section Right of Facility Lender to Cure Lessee Defaults Section Extension of Time in the Event of Bankruptcy, Etc Section Consequences of Cure Section No Personal Liability Section Survival Section Amendments Section Lessee Not Relieved of Obligations Section No Encumbrance on Facility Site ARTICLE 14. DEFAULT AND REMEDIES Section Termination for Lessee's Defaults SF v.15 -ii-

259 Section Other Remedies Section Limitation of Default ARTICLE 15. SURRENDER AND REMOVAL Section ARTICLE 16. BANKRUPTCY AND INSOLVENCY ARTICLE 17. LESSOR'S GENERAL PROTECTION PROVISIONS Section Lessor's Right of Entry and Inspection Section Joint and Several Liability ARTICLE 18. GENERAL PROVISIONS Section Conditions and Covenants Section No Waiver of Breach Section Time of Essence Section Computation of Time Section Unavoidable Delay-Force Majeure Section Successors in InteresL Section Governing Law Section Entire Agreement Section Amendments or Modifications Section Partial Invalidity Section 18.1 L Conflict with Provisions of Service Agreement Section Relationship of Parties Section No Merger Section Attorney Fees Section Delivery of Rent and Notices-Method and Time Section Payment ofrenl Section Estoppel Certificates Section Notice to Lessor Section Notice to Lessee Section Recording ARTICLE 19. DISPUTE RESOLUTION Section Agreement to Arbitrate Section Contents of Arbitration Notice Section Selection of Arbitrator Section Discovery Section Continuance of Performance Section Costs of Arbitration Section Site of Arbitration Section Equitable Relief Not Precluded !11-

260 Section Limited Court Challenge ARTICLE 20. PARENT GUARANTy Section SF! vJ 5 -lv-

261 LIST OF SCHEDULES SCHEDULE 1 Description of Facility Site and Drawing SFI v_15 -v-

262 AMENDED & RESTATED FACILITY SITE LEASE AGREEMENT Recitals THIS AMENDED & RESTATED FACILITY SITE LEASE AGREEMENT (this "Lease" or this "Agreement"), made and entered into as of July 1, 2012, by and between the County of Stanislaus, having its main office at 1010 Tenth Street, Modesto, California 95354(the "Couuty" or "Lessor"), and Covanta Stanislaus, Inc. (hereinafter the "Company" or "Lessee"), having an office at 445 South Street, Morristown, New Jersey WHEREAS, pursuant to an Amended and Restated Service Agreement dated as of September 27, 1988, as amended prior to the date hereof (the "Original Service Agreement") among the City of Modesto, California, a municipal corporation, (the "City"), the County (collectively the "Contracting Communities"), and Stanislaus Waste Energy Company (the "Original Company"), the Original Company agreed to design, construct, startup, test, own and operate a solid wastelresource recovery facility (the "Facility") to be located in the County for the purpose of processing Acceptable Waste (as defined in the Original Service Agreement) and producing saleable electric energy, all in accordance with the terms of the Service Agreement; and WHEREAS, pursuant to a new Amended and Restated Service Agreement, dated the date hereof, between the Contracting Communities and the Company (the "Service Agreement"), the Company agrees to accept, process and/or dispose of Acceptable Waste and the Contracting Communities agree to deliver, or cause Acceptable Waste to be delivered, to the Facility; and WHEREAS, pursuant to the Facility Site Lease Agreement, dated as of June 1986 (the "Lease Effective Date"), the County entered into a site lease for the Facility with the Original Company (the "Original Facility Site Lease"); and WHEREAS, the Facility site is described more particularly in Schedule 1 attached hereto (which site, together with all easements, rights of way and consents granted herein or pursuant to or in connection with this Lease, is referred to in this Lease as the "Facility Site"); and WHEREAS, the Contracting Communities and the Company now wish to amend and restate in its entirety the Original Facility Site Lease as provided herein, effective as of July 1,2012 (the "Amended & Restated Lease Effective Date"); and WHEREAS, the County is empowered to enter into the transactions contemplated by this Lease and carry out its obligations hereunder and, by proper action of the members of the Board of Supervisors of the County, the County has duly authorized the execution, delivery and performance of this Agreement. S:FI v.15

263 NOW, THEREFORE, in consideration often Dollars ($10.00), and the entering into of the New Service Agreement between the parties hereto, and other good and valuable consideration, each to the other in hand paid, and the mutual covenants contained herein, and the promises and the respective representations and agreements hereinafter contained, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereby amend and restate in its entirety the Original Facility Site Lease as follows: SFt v.15-2-

264 ARTICLE 1. DEFINITIONS. SCHEDULES INCORPORATED BY REFERENCE AND INTERPRETATION Section Definitions. All capitalized tenus used in this Agreement, unless otherwise expressly defined herein, shall have the meanings given to such tenus in the Service Agreement as in effect on the date hereof whether or not the Service Agreement shall be in effect or amended (such meanings to apply equally to all fonus of such tenus). Section Schedules Incorporated by Reference. The following Schedule is hereby incorporated by reference and expressly made a part hereof: Schedule 1 - Description of Facility Site and Drawing Section Interpretation. (l) In this Agreement, any headings preceding the texts of the several Articles and Sections of this Agreement, and any table of contents, shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. (2) Whenever the Lessor or Lessee is named or referred to, it shall be deemed to include its successors and assigns whether so expressed or not; provided that nothing in this Section 1.03 shall be deemed to constitute a consent to either party to the assignment of this Lease contrary to the provisions hereof. All of the covenants, stipulations, obligations and agreements by or on behalf of, and other provisions for the benefit of, the Lessor or Lessee contained in this Agreement shall bind and inure to the benefit of such successors and assigns and shall bind and inure to the benefit of any officer, board, commission, authority, agency or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the Lessor or Lessee, or of their successors or assigns, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions hereof (3) Nothing in this Agreement is intended or shall be construed to confer upon, or to give to, any Person, other than the parties hereto, any right, remedy or claim under or by reason of this Agreement or any covenant, condition or stipulation thereof. (4) The representations and warranties contained herein shall survive the execution and delivery of this Agreement. ARTICLE 2. REPRESENTATIONS Section Representations. (a) Lessor hereby represents, warrants, and covenants as follows: SF} v.l5

265 (l) Lessor holds title to the Facility Site, free and clear ofliens created by the Lessor other than "Permitted Liens", being those described in the title report obtained by the Lessor pursuant to Section 2.04(0) of the Original Service Agreement (the "Title Report"). Lessor has the full right, power and authority to grant and convey to Lessee or its assignee the rights with respect thereto as are provided for in this Agreement. (2) The Lessor is a political subdivision of the State and has the full power, authority and legal right to own or hold under lease real property and has the power, authority, and legal right to enter into this Lease, and the execution, delivery, and performance of this Agreement (i) has been duly authorized, (ii) will not violate any judgment, order, law, or regulation applicable to the Lessor, and (iii) do not (A) conflict with, (B) constitute a default under, (C) result in the creation of any lien, charge, encumbrance or security interest (other than Permitted Liens) upon the Facility Site, under any agreement or instrument to which the Lessor is a party or by which the Lessor or its assets may be bound or affected other than those contemplated hereby and by the Indenture. (3) This Agreement constitutes a legal, valid and binding obligation of the Lessor, enforceable in accordance with its terms. (4) Lessor has not given to any corporation, partnership, venture, person or other entity other than Lessee, any option to purchase or right of first refusal, entered or granted an option to enter into any lease, or entered into any other agreement (whether fixed or optional) granting any license, easement, other right of acqnisition, use, or consideration with respect to the Facility Site, inconsistent with or which could diminish or otherwise negatively impact the rights conveyed to Lessee pursuant to this Lease, except as appears on the Title Report. (5) The Lessor has the full right, power, and authority to grant the ingress and egress rights provided for in Section 7.05 below and shall not undertake any activities inconsistent therewith. Lessor reserves the non-exclusive right to utilize said access route on a non-exclusive basis and in a manner consistent with the foregoing rights of the Lessee. (6) Lessor has no actual knowledge of any pending or threatened government or private proceedings against it with respect to the ownership, condition or maintenance of the Facility Site which could prohibit, restrict or otherwise negatively impact Lessor's ability to grant and convey to Lessee the rights with respect to the Facility Site as are provided for in this Lease, or the ability of the Lessee to utilize the Facility Site for the uses permitted herein. (b) The Lessee hereby represents, warrants, and covenants as follows: SFl vJ5-4-

266 (1) The Lessee is a corporation duly organized and existing in good standing under the laws of the State of California and has the full legal and corporate right, power and authority to own or hold under lease real property and to enter into and perform its obligations under this Lease. (2) The Lessee has the power, authority and legal right to enter into and perform each other agreement or instrument entered into or to be entered into by the Lessee in connection with the operation of the Facility on the Facility Site, and the execution, delivery and performance of this Agreement and those instruments (i) has been duly authorized, (ii) will not violate any judgment, order, law or regulation applicable to the Lessee or any provisions of the Lessee's articles of incorporation or by-laws, and (iii) do not (A) conflict with, (B) constitute a default under, or (C) result in the creation of any lien, charge, encumbrance or security interest (other than Permitted Liens) upon any assets of the Lessee, under any agreement or instrument to which the Lessee is a party or by which the Lessee or its assets may be bound or affected other than those contemplated hereby and by the Indenture. (3) This Agreement constitutes a legal, valid and binding obligation of the Lessee, enforceable in accordance with its terms. (4) There are no pending or, to the knowledge of the Lessee, threatened actions or proceedings before any court or administrative agency which would have a material adverse affect on the ability of the Lessee to perform its obligations under this Agreement. ARTICLE 3. LEASED LAND AND TERM Section Leased Land. Lessor leases to Lessee, and Lessee hires from Lessor, the Facility Site, located in the County, consisting of acres more or less and all access easements, together with any and all appurtenances, rights, privileges and easements benefiting, belonging or pertaining thereto, in front of or adjoining the Facility Site, and together with any strips and gores relating to the Facility Site, described more particularly in Schedule 1, which is attached to and made a part of this Lease. Section Initial Term. This Lease becomes effective on the Lease Effective Date and shall expire on the day preceding the fifteenth (15th) anniversary of the Amended & Restated Lease Effective Date (the "Initial Term"), subject to the right of renewal in Section Section Lessee's Right to Renew Lease. If it is the desire of Lessee to renew this Lease on the expiration of the Initial Term, Lessee shall have an option to renew for an additional period of up to fifteen (15) years from the expiration of the Initial Term (the "Renewal Period") on the same terms, covenants, SFl v.15-5-

267 and conditions herein contained, except as expressly provided otherwise herein, by giving notice of the extension and the time period thereof (in full months) no less than six (6) months prior to the expiration of the Initial Term and provided Lessee is not in default beyond any applicable grace period under this Lease at the time of giving notice (the "Renewal Option"). (The "Initial Term" together with the "Renewal Term" shall constitute the "Term" of this Lease.) ARTICLE 4. RENT Section Amount and Payment of Rent. (a) For the Initial Term and provided the Service Agreement is in effect, Lessee agrees to pay to Lessor for the use of the Facility Site, in lawful money of the United States, an annual base rent ("Annual Base Rent") in the sum of ONE HUNDRED NINETY EIGHT THOUSAND AND NOIlOOTHS DOLLARS, ($198,000.00), payable without notice or demand in one annual payment, in advance on or before the first day of each June during the term hereof; provided that the Rent for any No Service Agreement Period shall be determined pursuant to Section 4.01(c). As hereinafter used the term "Rent" shall be deemed to include Annual Base Rent and any other amounts payable by the Lessee under this Agreement ("Additional Rent"). (b) Except as may be expressly provided otherwise in this Lease, payment of the Rent required to be made under this Article 4, or payments to be made under any other Article of tills Lease, shall be made without any set-off or counter-claim or defense, and shall be made payable to and sent to Lessor at such place as Lessor may from time to time designate by notice to Lessee; provided that during the term of the Service Agreement, the Lessee shall have a right of offset against Rent to the extent that the Contracting Communities have defaulted on their obligation to reimburse the Lessee for Unforeseen Circumstance Costs and/or Discriminatory Taxes as required by the Service Agreement. In the event of a dispute relating to whether such Rent is payable, the dispute shall be resolved pursuant to Article 19. (c) During the Renewal Period, and at any time during the Initial Term hereof that the Service Agreement is not in effect (a "No Service Agreement Period"), Lessee shall pay fixed rent at a fair market rate fixed by mutual agreement of the parties or if the parties are unable to mutually agree on the fair market rate, with an appropriate adjustment mechanism to account for inflation, the fair market rate for rent, based upon the Illghest and best use (without consideration of the Facility, any related improvements or the Service Agreement), shall be established through the procedure set forth in Section 1O.01(g), (the "Appraisal Procedure"), through which appraisers will determine the fair market rental therein. Such fair market rental shall then be the Annual Base Rent. ARTICLE 5. TAXES Section Taxes. (a) Pursuant to California Revenue and Taxation Code Section 107.6, Lessee acknowledges that the property interest created by this Lease may be subject to property taxation, and that the Lessee will obligated to make payment of property taxes levied on such interest during the Term of this Agreement. The Lessee shall pay punctually as Additional Rent (in the same manner as Annual Base Rent) all taxes, payments in SFl v.15-6-

268 lieu of taxes, special and general assessments, charges, and other governmental impositions and charges of every kind and nature whatsoever (collectively referred to as "Taxes"), and each and every installment thereof, which become due and payable, with respect to the Facility Site or any part thereof in the manner and to the place that property taxes to the County are then being paid. The obligation of the Lessee to pay such Additional Rents shall, so long as the Service Agreement is in effect, be reduced to the extent that any "Discriminatory Taxes" are levied against the Facility Site and Lessee has paid such Discriminatory Taxes, and has not been reimbursed pursuant to Section 6.02(b) of the Service Agreement. As used here "Discriminatory Taxes" shall mean any taxes, assessments or fees imposed by the County, the City, or any special taxing district or authority under the control of the County or City, that are imposed on the Company, the Facility, its operation or the solid waste industry and that are not generally applicable throughout the entire County. (b) The Lessee shall be deemed to have complied with the covenants of Section 5.01(a) if payment of such Taxes (other than Discriminatory Taxes) shall have been made either within any period allowed by law or by the governmental authority imposing the same during which payment is permitted without penalty or interest or before the same shall become a lien upon the Facility Site, and the Lessee shall produce and exhibit to the County satisfactory evidence of such payment, if the County shall demand the same in writing. (c) The Lessee agrees that if there shall be any refunds or rebates on account of Discriminatory Taxes paid by the Lessee which have been reimbursed to the Lessee under the Service Agreement, such refund or rebate shall be paid to the County. (d) Lessee shall have the right, subject to applicable law, to contest, in good faith and with due diligence, the amount or validity of any Taxes by appropriate legal proceedings, provided that if the contested Tax is not paid before the start of legal proceedings, then before instituting any proceedings, Lessee shall furnish to Lessor a surety bond, cash deposit, or other security reasonably satisfactory to Lessor, in an amount sufficient to pay the Tax, together with all interest and penalties and all charges that may be assessed against the Premises in the legal proceedings, as security for the payment of the Tax. In the event of any default by Lessee to pay Taxes such will constitute a default hereunder and Lessor is authorized to use the security deposited under this Section to pay the Tax. The balance, if any, shall be paid to Lessee. Lessee shall at all times keep the Facility Site free from Tax liens by bond, payment under protest or other arrangement. Section Description of Use. ARTICLE 6. USE (a) During the Term, Lessee may use and occupy the Facility Site for operating, maintaining, modifying and improving the Facility for the purpose of accepting, storing and processing Acceptable Waste and storing Solid Waste (as such terms are defined in the Service Agreement) and for purposes necessary or incidental in connection with the foregoing, which for purposes of this Agreement shall include use of the site for a waste recovery facility and, while the Service Agreement is in effect, will use the Facility Site for no SFI vJ5-7-

269 other purpose. In connection with Lessee's permitted use, Lessee may install and construct structures, buildings, furnaces, steam turbine/generators and incidental facilities necessary to operate the Facility. Subject to the terms and provisions of the Service Agreement, all improvements to the Facility Site shall be at Lessee's sole cost and expense, and Lessee shall indemnify and hold Lessor free and harmless from any and all damages, costs, expenses, liabilities, losses, fines, penalties, claims and demands, including reasonable counsel fees, that may in any manner relate thereto (except to the extent resulting from the negligent acts, negligent omissions or intentional wrongful conduct of Lessor). (b) All waste materials stored or kept on the Facility Site during the Term by Lessee shall be maintained in a manner so as not to cause a nuisance or violate any law, ordinance, use permit, or government regulation and shall be removed at the expiration or sooner termination of this Lease at Lessee's sole cost and expense. (c) Lessee shall, at its own cost and expense, promptly observe and comply with all present and future federal, State, county, and city laws, ordinances, requirements, orders, directives, rules, and regulations affecting the Facility Site or improvements or structures thereon or appurtenances thereto or any part thereof, and the Lessee shall pay all costs, expenses, liabilities, losses, County damages, fines, penalties, claims and demands, including reasonable counsel fees, that may in any manner arise out of or be imposed upon the County or the Lessee because of the failure of the Lessee to comply with the covenants of this Section 6.01 except to the extent resulting from the negligent acts, negligent omissions or intentional wrongful conduct of Lessor. ARTICLE 7. IMPROVEMENTS AND EOUIPMENT Section Improvements. Lessee may improve the Facility Site at its sole cost and expense, subject to the terms and conditions of the Service Agreement when in effect, and for those permitted uses which are set forth in Section 6.01 of this Agreement. Section Utilities. Lessee shall determine the availability of, and is hereby authorized to cause to be installed in., on and about the Facility Site, such other facilities for its use as it may determine appropriate for supply of water, sewage, gas, electricity, telephone and other like services which may be required in Lessee's operations, all in accordance with the terms of the Service Agreement. Section Lessor's Cooperation. Subject to applicable law, Lessor agrees that it shall cooperate and assist Lessee in obtaining any required consents, approvals, licenses, and/or nonexclusive easements on terms which do not interfere with Lessee's rights or obligations under the Service Agreement and which are reasonably required for Lessee's proposed development and use of the Facility upon the Facility Site. Section Rights and Obligations upon Termination. (a) Upon any expiration or earlier termination of this Lease in accordance with its terms, including without limitation, pursuant to Section 6.05(e) or Section 8.05 of the Service Agreement, the Lessor shall have the right, exercisable only by providing written notice SFl 179{)026v.15-8-

270 of exercise to the Lessee at least one hundred twenty (120) days prior to expiration of this Lease and no more than sixty (60) days following any earlier termination, to either (i) accept from the Lessee title to the Facility in its then "as is" condition (free and clear of all mortgages or liens securing debt arising by, through or under Lessee) without payment of consideration of any kind therefor and otherwise in accordance with the provisions of Section 7.04(b) below (the "As-is Option"), or (ii) instruct the Lessee to decommission the Facility in accordance with Section 7.04(c) below (the "Decommission Option"). The Lessee shall permit the Lessor and its representatives to inspect the Facility during such one hundred twenty (120) day period, subject to the provisions of Section hereof. If the Lessor does not timely exercise either such right, then it shall be deemed to have exercised the As-is Option. (b) If the Lessor has exercised (or is deemed to have exercised) the As-is Option, then the Lessee shall deliver a quit claim bill of sale for the Facility and all improvements on the Facility Site and physical possession of the Facility to the Lessor within ten (10) business days of such exercise (or deemed exercise). The Lessee may remove personal property only if it is not incorporated into the Facility and not used in its operation. (c) If the Lessor has exercised the Decommission Option, then Lessee shall within one (1) year from such exercise date, remove any and all equipment, machinery, materials, and any other property erected or maintained by Lessee on the Facility Site (excluding the storage pit and pilings), and shall fully de-commission, demolish and remove the Facility, and shall fully restore the Facility Site to the condition it was in upon commencement of the Original Facility Site Lease, except that, subject to Section 7.04(d), the storage pit and cement bottom thereof and pilings may be left in place if filled and covered to grade level with clean soil, in compliance with applicable law. Lessor shall grant Lessee reasonable rights of access to the Facility Site for the purpose of effecting such removals during such one (I) year period. Any of Lessee's property thereafter remaining on the Facility Site after the one-year period shall become the property of Lessor without the payment of any consideration therefor. Lessee shall have any and all right of salvage for its own account (except computer equipment and scales in the scalehouse, notwithstanding that such scales may not be on the Facility Site) if Lessor has exercised the Decommission Option. (d) Regardless of which Section 7.04(a) option Lessor has exercised (or has been deemed to have exercised), Lessee shall remove or fully remediate any contamination on or in the Facility Site resulting from any acts or omissions of Lessee, including any contamination in or below the storage pit or the pilings, and indenmify and defend Lessor from and against any claims, costs, expenses, liabilities, losses, damages, fines, penalties, claims and demands, including reasonable counsel fees, relating thereto. Either party may engage, at its own cost and with notice to the other party, an independent environmental engineer to investigate the level of contamination, the proposed form and method of removal and/or remediation, and to provide confirmation that the Facility Site is either clean or has been fully remediated and in compliance with all applicable laws and regulations. (e) Upon expiration or other termination of the Lease, Lessee shall provide a signed statement, in recordable form, that this Facility Site Lease Agreement has terminated. Lessee shall, however, continue to have access to the Site as reasonably required to complete its SFl v.l5-9-

271 obligations under this Section, subsequent to a termination of the Lease, if the Decommission Option has been selected. If either party so requests, the parties will in good faith and acting reasonably, enter into an access agreement to allow completion of the required work hereunder. Upon the earlier of completion of all required work under Section 7.04(c) or the end of the one year period set forth therein, Lessee agrees to execute, acknowledge, and deliver to Lessor a proper instrument in writing releasing and quitclaiming to Lessor all right, title and interest of Lessee in and to all equipment, machinery, materials and other property, or improvements on the Facility Site free of all mortgages or liens securing debt arising by, through or under Lessee. (f) The obligations set forth in this Section 7.04 shall survive expiration or earlier termination of this Lease, and shall be included as obligations of the Parent Company in the Parent Guaranty to be provided in accordance with Section hereof. Section Ingress and Egress During Lease Term. (a) Lessor understands and acknowledges that Lessee requires ingress and egress to and from the Facility Site over other property owned or controlled by Lessor. The Lessor hereby grants to Lessee a forty (40) foot wide non-exclusive easement for right of ingress and egress to and from the Facility Site over the County's adjacent real properties and generally following the existing roads as shown upon the routes indicated on Schedule 1 attached hereto. In the event said access route becomes impassible, the Lessor shall provide an alternate route. The Lessor agrees that this covenant shall run with its land. (b) The Lessor also will, at the request of the Lessee, grant to other persons such rights of way or easements over, across or under, the Facility Site, or other adjacent property owned or controlled by Lessor, or grant permits or licenses with respect to the use thereof, as shall be necessary or convenient for the operation or use of the Facility Site, including but not limited to leases, easements or rights of way for utility, roadway, railroad or similar purposes in connection with the Facility Site, as well as access to such facilities or installations, or for the utilization of any real property adjacent to the Facility Site which is owned by the Lessor or leased to the Lessor. The Lessor agrees, at the cost and expense of the Lessee, to execute and deliver any and all instruments necessary or appropriate to confirm and grant any such right of way or easement or any such permit or license. (c) No conveyance effected under the provisions of this section shall entitle the Lessee to any abatement or diminution of the rent payable hereunder or the other payments required to be made by the Lessee under this Agreement. Section Improvements and Maintenance of Routes For Ingress and Egress. The cost and responsibility of creating, improving, maintaining or repairing any route( s) for ingress and egress to and from the Facility Site as provided for in Section 7.05(a) shall be at the sole cost and sole responsibility of Lessor unless otherwise mutually agreed in writing between the parties. Section No Lessor Improvements. Except as may otherwise be provided in the Service Agreement, or such other agreement as may be in effect between the parties hereto, SFl vJ 5-10-

272 the Lessor shall not be required to furnish any services or facilities or to make any improvements, repairs, or alterations in or to the Facility Site during the Term of this Agreement. Section Quiet Enjoyment. The Lessee upon paying the Rent and all other sums and charges to be paid by it as herein provided, and observing and keeping all covenants, warranties, agreements and conditions of this Lease on its part to be kept, shall have a right of quiet enjoyment of the Facility Site during the Term without hindrance or molestation by, through or under the County. ARTICLE 8. REPAIRS Section Lessee's Duty to Maintain Premises. At all times during the Term of this Lease, Lessee shall keep and maintain the Facility Site and all improvements thereon in accordance with the maintenance standards set forth herein and in the Service Agreement. As long as Lessee continues to operate the Facility, whether or not under the Service Agreement, the maintenance standards as set forth in the Service Agreement then in effect (or if no Service Agreement is then in effect, the maintenance standards that were in effect at the termination of the Service Agreement) shall be followed and adhered to until there is another agreement relating to maintenance standards between Lessor and Lessee. ARTICLE 9. MECHANIC'S LIENS Section Prohibition Against Mechanic's Liens - Indemnification of Lessor. Except for Permitted Liens, Lessee shall not suffer or permit to be enforced against the Facility Site, or any part thereof, any mechanic's, materialman's, contractor's, or subcontractor's liens arising from, or any claim for damage growing out of the work of, any construction, repair, restoration, replacement, or improvement, and Lessee shall (subject to Section 9.02 hereof) pay or cause to be paid all such liens, claims, or demands before any action is brought to enforce the same against the Facility Site; and Lessee agrees to indemnify and hold Lessor and the Facility Site free and harmless from all liability for any and all such liens, claims, and demands together with reasonable attorney fees and all costs and expenses in cormection therewith. Section Contest by Lessee-Surety Bond. If Lessee shall in good faith contest the validity of any such liens or claim, then Lessee shall, at its expense, defend itself and Lessor against the same and shall pay and satisfy any adverse judgment that may be rendered thereon before the enforcement thereof against Lessor or the Facility Site. Section Lessor's Right to Remove Lien. If Lessee fails to discharge such lien or to furnish a bond against the foreclosure thereof as required by the law of the State, Lessor may, but is not obligated to, discharge such lien or take such other action as is reasonably necessary to prevent a judgment of foreclosure upon said lien from being executed against the property, and all costs and expenses, including reasonable attorney fees incurred by Lessor, shall be repaid by Lessee upon demand, and if unpaid may be treated as Additional Rent. Section Notices of Nonresponsibility. Nothing in this Lease shall be deemed or construed in any way as constituting the request or assumption of responsibility by Lessor, expressed or implied, by inference or otherwise, for any contractor, subcontractor, SFI v

273 laborer, or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration, or repair of or to the Facility Site, any buildings or improvements thereof, or any part thereof. Lessor shall have the right at all reasonable times to post and keep posted on the Facility Site such notices relating to the nonresponsibility/liability of Lessor as Lessor may reasonably deem necessary for the protection of Lessor and the fee of the Facility Site from mechanic's and materialman's liens. ARTICLE 10. CONDEMNATION/DAMAGE TO FACILITY Section Loss Events. (a) If at any time during the Term hereof the whole or a part of the Facility or the Facility Site shall be damaged or destroyed, or there shall be a taking by any governrnental authority under the power of condemnation (either of which shall be called a "Loss Event"), then the Lessee will promptly give written notice of such Loss Event to the Lessor, generally describing the nature thereof. (b) Upon the occurrence of any Loss Event conslstmg of damage to, or destruction of the Facility, Lessee shall be entitled to receive and keep all "net proceeds" that consist of insurance proceeds payable under policies it maintains pursuant to the Service Agreement or otherwise. For the purposes of this Article 10, "net proceeds" shall mean the total proceeds of insurance or condemnation less the costs and expenses incurred in connection with negotiating and collecting such proceeds including, without limitation, legal fees. (c) The Lessor shall have no obligation to rebuild, replace, repair or restore the Facility at any time during the term. However, subject to Section 10.01(h) below and to Sections 6.05(c), (d) or (e) of the Service Agreement, Lessee shall restore the Facility following any Loss Event occurring while the Service Agreement is in effect whether or not Lessee receives adequate insurance or condemnation proceeds for such restoration. (d) If a Loss Event consisting of a taking by any governrnental authority under the power of condemnation shall occur, the net proceeds of such taking shall be divided between Lessor and Lessee in proportion to the fair market sales value (determined in accordance with the "Appraisal Procedure" in Section 1O.0l(g) below) of their respective interests in the Facility and/or the Facility Site so condemned or taken and in a manner consistent with the provisions of this Article 10. (e) Any awards for a taking for a temporary period of all or part of the Facility or the Facility Site by any governrnental authority under the power of condemnation or agreement in lieu thereof, so long as such taking period does not extend beyond the expiration or termination of this Lease, shall be payable solely to Lessee, and Lessee will be obligated to continue to pay the Annual Base Rent during such period. (I) [Intentionally Omitted]. (g) As used in this Article, "Appraisal Procedure" shall mean the procedure specified in the succeeding sentences for determining the fair market rate for rent as provided in SFl v

274 Section 4.0l(c), or the fair market sales value described in Section 10.01(d) or any other Section hereof that refers to this Section 10.01(g). In determining the Lessee's interest in the Facility Site under Section 10.01(d), the appraisers hereunder shall assume that the term of this Agreement includes both the Initial Term and the Renewal Period except if the period to extend such renewal has lapsed and such renewal has not been exercised. If either the Lessor or the Lessee shall give written notice to the other requesting a determination of value by appraisal in accordance with this Section 10.01(g), the Lessor and the Lessee shall consult for the purpose of appointing a mutually acceptable qualified independent appraiser. If such parties shall be unable to agree on a single appraiser within 20 days of the giving of notice, such value shall be determined by independent appraisers. One such appraiser shall be selected by the Lessee and another shall be selected by the Lessor; provided, that if either the Lessee or the Lessor shall fail to select an appraiser within 30 days after the giving of sueh notice, such appraiser upon application of the other party, shall be selected by the American Institute of Real Estate Appraisers (or its successor). The appraiser or appraisers appointed pursuant to the foregoing procedure shall be instructed to determine such amount or value in writing within 45 days after such appointment and such determination shall be final and binding upon the parties. If the two appraisers selected as aforesaid, after making their own written appraisal, shall fail to agree upon the required valuation within such 45 day period, the two appraisers shall select a third appraiser, and if they shall be unable to agree on a third appraiser within 10 days after each of such two appraisers shall have been selected, such third appraiser shall be selected by the American Institute of Real Estate Appraisers (or its successor) upon application of either party. The third appraiser shall select one of the other two appraisals as the final determination of the appraisers. The fees and expenses of the appraiser appointed or deemed appointed by the Lessee shall be paid by the Lessee, the fees and expenses of the appraiser appointed or deemed appointed by the Lessor shall be paid by the Lessor and the fees and expenses of the third appraiser, or of a single appraiser if only one is appointed, shall be divided equally between the Lessee and the Lessor. (h) This Lease shall terminate upon the occurrence of the following Loss Events: (i) a taking or condemnation of the entire Facility Site or of so substantial a part thereof as to render the Facility Site incapable of being used for the purposes set forth in this Agreemeut, (ii) while the Service Agreement is in effect, pursuant to Section 6.05( e) of the Service Agreement, or (iii) while the Service Agreement is in effect but within one year of its stated expiration date or during a No Service Agreement Period, upon Lessee providing to Lessor at least sixty (60) days written notice of termination following such Loss Event. (i) Unless otherwise agreed, in the event of condemnation or the threat of condemnation, settlement negotiations shall be conducted by the Lessee if the proposed taking involves the Facility, and by the Lessor and the Lessee if the proposed taking involves only the Facility Site (and no portion of the Facility) and no settlement shall be concluded in such latter case without the prior written consent of the other party. In the event the condemnation proceeding in such latter case will be going to trial in a court, both the Lessor and the Lessee shall be entitled to be represented by counsel. In the event in such latter case either the Lessor or the Lessee desires to appeal from a judgment, or the condemnor appeals, the parties agree to prosecute or defend such appeal jointly. SFll790026vJ5-13-

275 (j) The Lessee shall he entitled to any condemnation award attributable to ownership of the Facility (not including components owned by the Contracting Communities) and the machinery, equipment, spare parts or other property (other than computer equipment and software owned by Lessor) installed in and constituting part of the Facility or used in connection therewith. (k) The Lessee shall not be entitled to share in any award or awards made in condemnation proceedings for the taking of any property outside of the boundaries of the Facility Site, or any rights in, under or above the streets adjoining the Facility Site, or any rights and benefits of light or air or any rights and benefits of space, below the surface of, or above the Facility Site except to the extent that such award or awards upon any such taking may represent compensation for physical damage to the Facility Site and/or the cost of repairing or restoring the Facility Site by reason of a change in grade of any adjoining public street and then only in accordance with Section of this Agreement. Section Rent Abatement. If such taking shall not result in termination of this Lease pursuant to Section 1O.01(h), then this Lease shall continue in full force and effect as to the remainder of the Facility Site, and the fixed rental payable by Lessee for the balance of the Term shall be reduced proportionally according to the ratio of the value of the portion of the land taken to the value of the full Facility Site. In case of an inability to agree on the appropriate reduction in fixed rent, the Appraisal Procedures in Section 10.01(g) may be invoked by either party. Section Allocation of Taking Award during Facility Operation. All compensation and damages awarded for the taking of the Facility Site or any portion thereof which does not include a taking of any part of the Facility shall belong to and be the sole property of Lessor. Lessee shall be entitled to any award that may be made for the taking of, or the diminished commercial utility of the Facility, or injury to the Facility or on account of any loss Lessee may sustain in the removal of Lessee's fixtures or equipment or as a result of any alterations or modifications which may be reasonably required by Lessee in order to place the remaining portion of the Facility Site not so condemned in a suitable condition for the continuance of Lessee's operation of the Facility. Section Effect of Termination. If this Lease is terminated, in whole or in part, pursuant to any of the provisions of this Article 10, all rentals and other charges theretofore paid hereunder by Lessee to Lessor prior to condemnor taking actual physical possession shall be retained by Lessor. All future rental payments shall be reduced as provided in Section ARTICLE II. INSURANCE Section Lessee's Worker's Compensation Insurance. Lessee, at its expense, shall at all times during this Lease, carry full and adequate insurance against any risk or loss under the Workers Compensation Act of the State of California. Section Lessee's Insurance. The Lessee, at all times during the Term of this Agreement, at its expense, will procure, maintain and keep in force, (i) during the term of the SF v

276 Service Agreement, the insurance described in Section 7.03 of the Service Agreement, and (ii) thereafter, (a) commercial general liability insurance for claims for personal injury, death, or property damage, occurring in or about the Facility Site, with limits equal to the limits in effect as of the date of termination of the Service Agreement, but subject to each party's right to request an adjustment to existing coverage, so that the insurance coverage hereunder is consistent with that of similar facilities, provided such adjusted coverage is available on commercially reasonable terms, and (b) property insurance for loss or damage to the Facility (in an amount equal to the cost of the Decommissioning Option under Section The Lessee will cause to have the Lessor named as an additional insured on all such insurance policies. Certificates of insurance for such policies will be delivered to the Lessor. The policy or policies of insurance will be issued by a company or companies licensed in the State of California and will provide that such policy or policies will not be cancelled, terminated, suspended or modified without the insurance company first giving the Lessor written notice thereof, at least thirty (30) days before any such cancellation, termination, suspension or modification shall become effective. ARTICLE 12. ASSIGNMENTS AND SUBLETTING Section Lessor's Approval Required. (a) Except with respect to (i) any collateral assignment or granting of a security interest by Lessee in connection with the financing for the Facility in accordance with Article 13, (ii) any assignment or sublease by Lessee under any management or operating agreement entered into by Lessee in connection with the Facility, and/or (iii) any assignment by Lessee in lieu of foreclosure in connection with the enforcement of the collateral assignment or security interest granted pursuant to the immediately preceding clause (i), as to which assignments or subleases Lessor hereby consents, Lessee shall not encumber, assign, or otherwise transfer this Lease, or any right or interest hereunder, and Lessee shall not assign or sublet any or all of its interests in the Facility Site in whole or in part without the prior written consent and approval of Lessor (which consent shall not be unreasonably withheld). (b) Other than as provided in Section 12.01(a), the Lessee may not at any time assign or transfer this Agreement, or sublet the whole of the Facility Site without the prior written consent of the Lessor (which consent shall not be unreasonably withheld); provided that in the event of a permitted assignment, transfer or sublease, (i) the Lessee shall nevertheless remain liable to the extent herein provided to the Lessor for the payment of all Rent and for the full performance of all of the terms, covenants and conditions of this Agreement and of any other security document related to the Facility or Facility Site to which it shall be a party and its Parent Company (as defmed in Section 20.01) shall acknowledge in writing the continuing effectiveness and enforceability of the Parent Guaranty (as defined in Section 20.01), (ii) any assignee, transferee or sublessee of the Lessee shall have assumed in writing and have agreed to keep and perform all of the terms of this Agreement on the part of the Lessee to be kept and performed, shall be jointly and severally liable with the Lessee for the performance thereof, shall be subject to service of process in the State, and, if a corporation, shall be qualified to do business in the State, (iii) in the opinion of counsel, such assignment, transfer or sublease shall not legally SFl v

277 impair in any material respect the obligations of the Lessee for thc payment of Rent nor for the full performance of any and all of the terms, covenants and conditions of this Agreement, and (iv) if during the term of the Service Agreement, such sublessee, or the Facility Operator meets the standards set forth in the Service Agreement. The Lessee shall furnish or cause to be furnished to the Lessor, a copy of any such assignment, transfer or sublease in substantially final form at least thirty (30) days prior to the date of execution thereof. (c) The Lessee may not at any time sublet any portion of the Facility without the prior written consent of the Lessor (which consent shall not be unreasonably withheld); provided that in the event of such permitted subletting (i) such sublease shall not violate any provision of this Agreement; and (ii) in the opinion of counsel such sublease shall not legally impair or limit in any respect the obligations of the Lessee for the payment of Rent nor for the full performance of all of the terms, covenants and conditions of this Agreement or of any other security document related to the Facility or the Facility Site to which the Lessee shall be a party. The Lessee shall furnish or cause to be furnished to the Lessor a copy of any such proposed sublease in substantially final form at least thirty (30) days prior to the date of execution thereof. Any consent by the Lessor, to any act of assignment shall be held to apply only to the specific transaction thereby authorized. Such consent shall not be construed as a waiver of the duty of the Lessee, or the successors or assigns of the Lessee, to obtain from the Lessor, consent to any other or subsequent assignment, transfer or sublease, or as modifying or limiting the rights of the Lessor. (d) If this Agreement shall be assigned, the Lessor may and is hereby empowered to collect Rent from the assignee. If the Facility Site or any part thereof be sublet or occupied by any Person other than the Lessee, the Lessor, in the event of the default of the Lessee in the payment of Rent may, and is hereby empowered to, collect rent from the subtenant or occupant during the continuance of any such default. In either of such events, the Lessor may apply the net collection to the Rent reserved in this Agreement but no such assignment, subletting, occupancy or collection of rent shall be deemed a waiver of the covenant herein against assignment, transfer or sublease of this Agreement, or constitute the acceptance of the subtenant or occupant as tenant, or a release of the Lessee from the further performance of the covenants herein contained on the part of the Lessor. Section Termination. Except as provided in subparagraph 12.01(a) above, should Lessee suffer to be made any such assignment, transfer, or subletting without Lessor's consent, thereupon Lessor may, at its option, terminate this Lease forthwith by written notice, and upon such termination this Lease shall cease, and end and be of no further force or effect, except as hereinafter otherwise provided. Section Effect of Lessor's Consent. Should Lessor consent to any such encumbrance, assignment, transfer, or subletting for which Lessor's consent is required, none of the restrictions of this Section shall be thereby waived except as to the subject of such consent, but the same shall apply to each successive assignment, transfer, or subletting hereunder, if any, and shall be severally binding upon each and every encumbrance, assignee, transferee, subtenant, and other successor in interest of Lessee. SF v

278 Section Written Assumption Agreement. In the event of any transfer or assignment as provided for herein (except as security to a Facility Lender in conjunction with financing or refinancing the Facility, in accordance with Article 13), then before such transfer or assignment becomes effective for any purpose, the transferees and assignees must, in writing, assume all the obligations of this Lease and agree to be bound by all terms of this Lease. ARTICLE 13. RIGHTS OF FACILITY LENDERS As used herein: Mortgage. "Facility Lender" means any Acceptable Lender that holds a Leasehold "Acceptable Lender" shall mean any of the following: I. A bank, savings and loan association, investment bank, insurance company, trust company, commercial credit corporation, real estate investment trust, pension or retirement fund, or pension advisory firm or mutual fund, or 2. An investment company, money management firm or "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, which is regularly engaged in the business of making or owning commercial mortgage loans of a similar type. "Leasehold Mortgage" means any mortgage, deed of trust, collateral assignment or other security agreement that creates or constitutes a lien on Lessee's interest in this Lease and the leasehold estate created hereby. To be the beneficiary of the rights provided for in this Article and be recognized as a "Secured Facility Lender", a Facility Lender shall deliver to Lessor a true or photostatic copy of its Leasehold Mortgage which Leasehold Mortgage shall comply with the provisions of this Lease (as well as with copies of all related loan documents), together with a certification by Lessee and the Facility Lender confmning that said copies include a true copy of the Leasehold Mortgage and all related documents, and the name and address of the Facility Lender and its counsel and contact information therefor in writing. Section Notice to Facility Lenders. Lessor shall send to each Secured Facility Lender, a copy of each notice of default given hereunder from Lessor to Lessee at the same time as such notice is sent to Lessee, addressed to such Facility lender at its address for notices last furnished to Lessor hereunder. No notice of default to Lessee hereunder shall be validly given hereunder unless and until a copy thereof shall have been so sent to each Secured Facility Lender as provided in the preceding sentence provided, however that in no event will Lessor be required to deliver notices to more than two Secured Facility Lenders. SFl v

279 Seetion Right of Facility Lender to Cure Lessee Defaults. Subject to the provisions of this Article 13, Secured Facility Lenders shall have the same rights to cure defaults hereunder as are available to Lessee. Section Extension of Time in the Event of Bankruptcy, Etc. If Lessee shall be subject to any bankruptcy or insolvency proceedings at the time a notice of default is given under Section hereof, or during the period within which a Secured Facility Lender or foreclosure sale purchaser shall be entitled to cure a default, or if it shall be necessary to obtain the appointment of a receiver for Lessee, or if the exercise of remedies by a Secured Facility Lender is otherwise delayed or hindered, the times for giving notices and effecting a cure of such default shall be extended by (i) the period required in order to obtain a permission of the court having jurisdiction over such proceedings necessary in order to permit the actions called for by this Article 13, or (ii) such period required for such Secured Facility Lender or foreclosure sale purchaser to obtain possession of the Facility. Section Consequences of Cure. If all defaults (other than a default under Article 16) shall be cured by a Secured Facility Lender or any purchaser at a foreclosure sale, any notice by Lessor advising of the existence of such default or any action of Lessor to terminate this Lease or to interfere with the occupancy, use or enjoyment of the Facility Site by reason of such default shall be deemed to be terminated, except with respect to Lessee, and this Lease shall continue in full force and effect with respect to such Secured Facility Lender or foreclosure sale purchaser. Lessee irrevocably requests Lessor to accept, and Lessor hereby agrees to accept, performance of and compliance with any of the terms hereof by a Secured Facility Lender or purchaser at a foreclosure sale if such performance is rendered in compliance with this Article 13, with the same force and effeet as though kept, observed or performed by Lessee. Section No Personal Liability. Except as otherwise expressly agreed by the parties, no Secured Facility Lender or foreclosure sale purchaser shall become personally liable for the performance or observance of any covenants or conditions to be performed or observed by Lessee hereunder unless and until such Secured Facility Lender or foreclosure sale purchaser shall have succeeded to Lessee's interest hereunder and then only for so long as such Person owns such interest or is the operator of the Facility. Section Survival. The provisions of this Article 13 with respect to Secured Facility Lenders shall survive termination of this Lease and shall continue in full force and effect thereafter to the same extent as if this Article were a separate and independent contract among Lessor, Lessee and such Secured Facility Lenders. Section Amendments. Lessor and Lessee shall cooperate in including in this Lease, by a suitable amendment at the time of the closing of the fmancing with a prospective Secured Facility Lender, or a refinancing, such provisions which may reasonably be required by such prospective Secured Facility Lender for the purpose of facilitating the implementation of the protection provisions herein; provided, however, that no such amendment shall in any way affect the Rent or the Term of this Lease, or affect adversely in any material respect any rights or SFI vJ5-18-

280 interests of Lessor hereunder or increase in any material respect any obligations of Lessor hereunder. Section Lessee Not Relieved of Obligations. Nothing contained in this Article 13, or in any security agreement relating to any Leasehold Mortgage, shall be deemed or construed to relieve Lessee from the full and faithful observance and perfonnance of its covenants, conditions and agreements contained in this Lease, or from liability for the nonobservance or non-perfonnance thereof, or to require or provide for the subordination to the lien of any security agreement of any estate, right, title or interest of Lessor in or to the Facility Site or this Lease. Section No Encumbrance on Facility Site. No Leasehold Mortgage or other security agreement or instrument shall create or be a lien or encumbrance on the fee simple interest of Lessor in the Facility Site or any part thereof. ARTICLE 14. DEFAULT AND REMEDIES Section Tennination for Lessee's Defaults. Should Lessee (i) default in the payment of any installment of Rent, or (ii) default in the perfonnance of or materially breach any other tenn, covenant, condition, or restriction of this Lease herein provided to be kept or perfonned by Lessee, and if any such default or breach described in clause (i) shall continue for a period of ten business (10) days from and after service upon Lessee of written notice by Lessor and in the case of clause (ii) shall continue for a period of thirty (30) days thereafter and if in the case of clause (ii), the Lessor's notice is of a default of such a nature that it cannot be cured within such thirty (30) day period, but which the Lessee can establish is curable with the exercise of due diligence, then such default shall not be deemed to continue so long as the Lessee, after receiving such notice, proceeds to diligently cure the default in good faith as soon as reasonably possible, then Lessor may, at its option but subject to the rights of mortgagees provided in Article 13 hereof, tenninate this Lease by giving Lessee written notice of tennination. Upon the giving of such notice to Lessee, the rights of Lessee in and to the Facility Site shall cease and end, and Lessor may, without further notice or demand or legal process, re-enter and take possession of the Facility Site and all improvements thereon and oust Lessee and all persons claiming under Lessee therefrom and Lessee and all such persons shall quit and surrender possession of the Facility Site and all improvements thereon to Lessor. In the event of a tennination of this Agreement, Lessee shall be entitled to rights of access to the Facility Site in accordance with the tenns of Section Section Other Remedies. Any tennination of this Lease as herein provided shall not relieve Lessee from the payment of any sum or sums that shall then be due and payable to Lessor hereunder or any claim for damages then and theretofore accrued against Lessee hereunder, and any such tennination shall not prevent Lessor from enforcing the payment of any such sum or sums or claim for damages from Lessee for any default hereunder. All rights, options, and remedies of Lessor contained in this Lease shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Lessor shall have the right to pursue anyone or all of such remedies or any other remedy or relief which may be provided by law, whether or not stated in this Lease. No waiver by Lessor of a breach of any of the SFl v_15-19-

281 covenants, conditions, or restrictions of this Lease shall be construed or held to be a waiver of any succeeding or preceding breach of the same or any other covenant, condition or restriction herein contained. Section Limitation of Default. Notwithstanding anything to the contrary in this Article 14, there shall be no default of Lessee under this Agreement if any such default is caused by (i) any failure of the Contracting Communities to perform under the Service Agreement, or (ii) any default of the Contracting Communities under the Service Agreement, or (iii) any failure of the Lessor to meet its obligations under this Agreement, including its covenant to grant the Lessee quiet enjoyment herein, or (iv) by a condemnation or taking by the Lessor. ARTICLE 15. SURRENDER AND REMOVAL Subject to Section 7.04 hereof, upon the expiration or sooner termination of this Agreement, the Lessee shall quit and peacefully surrender the Facility Site. In the event Lessee remains in possession after expiration or termination hereof, other than as provided in Section 7.04, Lessee shall be deemed to be occupying the Facility Site as a month to month tenant at a fixed rent equal to one and half times the Annual Base Rent. ARTICLE 16. BANKRUPTCY AND INSOLVENCY If, after the Lease Effective Date (a) the Lessee then having the title to the leasehold estate created hereunder shall while having such title be adjudicated a bankrupt or adjudged to be insolvent; (b) a receiver or trustee shall be appointed for the property and affairs of the Lessee; (c) the Lessee shall make an assignment for the benefit of creditors or shall file a petition in bankruptcy or insolvency or for reorganization or shall make application for the appointment of a receiver; or (d) any execution or attachment shall be issued against the Lessee or any of the property of the Lessee, whereby the Facility Site or any building or buildings or any improvements thereon shall be taken or occupied or attempted to be taken or occupied by someone other than the Lessee, except as may herein be permitted, and such adjudication, appointment, assignment, petition, execution or attachment shall not be set aside, vacated, discharged, or bonded within three months after the issuance of the same, then a default hereunder shall be deemed to have occurred so that the provisions of Article 14 hereof shall become effective and the Lessor shall have the rights and remedies provided for therein; provided that any such event under clause (a), (b), (c) or (d) above shall not be an event of default as long as the Lessee continues to pay Rent and to otherwise meet or cause to be met its obligations under this Agreement. ARTICLE 17. LESSOR'S GENERAL PROTECTION PROVISIONS Section Lessor's Right of Entry and Inspection. Lessee shall permit, upon reasonable notice to Lessee, Lessor or Lessor's agents, representatives, or employees to enter upon the Facility Site during normal business hours for the purpose of inspection or to determine whether agreements in this Lease are being complied with, so long as such entrances upon the Facility Site do not unreasonably interfere with Lessee's use of such Facility Site and Lessee's SFl v

282 performance of its obligations under the Service Agreement. Lessor shall likewise have the right to cross over or upon the Facility Site at reasonable times in conjunction with Lessor's use of other properties owned or leased by Lessor provided the same shall not unreasonably interfere with Lessee's use of the Facility Site. In connection with such VISIts, the Lessor shall, on behalf of itself and its representative, comply, and cause its agents and representatives to comply, with all reasonable operating rules and regulations adopted by the Lessee, including a requirement that each person visiting the Facility Site sign a statement agreeing (i) to assume the risk of the visit but not the risk of injury due to the intentional or negligent acts of the Lessee and (ii) not to disclose or use, consistent with applicable law, any confidential information of the Lessee other than for the purpose for which it was furnished. Section Joint and Several Liability. Ifmore than one lessee or lessor shall exist under this Lease, the obligation of all such lessees or lessors shall be joint and several. ARTICLE 18. GENERAL PROVISIONS Section Conditions and Covenants. All of the provisions of this Lease shall be deemed as running with the land, and construed to be "conditions", as well as "covenants", as though the words specifically expressing or imparting covenant and condition status to such provisions were used in each such provision. Section No Waiver of Breach. No failure by either Lessor or Lessee to insist upon the strict performance by the other of any covenant, agreement, term, or condition of this Lease or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such future breach or of such covenant, agreement, term, or condition. No waiver of any breach shall affect or alter this Lease, but each and every covenant, condition, agreement, and term of this Lease shall continue in full force and effect with respect to any other then existing or subsequent breach. Section Time of Essence. Time is of the essence of this Lease, and of each provision. Section Computation of Time. The time in which any act provided by this Lease is to be done is computed by excluding the first day and including the last, unless the last day is a Saturday, Sunday, or holiday, and then it is also excluded. The term "holiday" shall mean all holidays specified in Sections 6700 and 6701 of the California Goverrunent Code. Section Unavoidable Delay-Force Majeure. As long as the Service Agreement is in effect, either party shall be excused from its performance hereunder (except for the payment of Rent) by reason of Unforeseen Circumstances as defined in the Service Agreement, but shall be excused only to the extent provided under the Service Agreement. Thereafter, if either party shall be delayed or prevented from the performance of any acts required by this Lease by reason of acts of God, strikes, lockouts, labor troubles, inability to procure materials, restrictive governmental laws, or regulations or other canse, without fault and beyond the reasonable control of the party obligated (financial inability excepted), performance SFl v

283 of such act shall be excused for the period of the delay; and the nonperfonnance of any such act shall be excused for the period of the delay and the period of the perfonnance of any such act shall be extended for a period equivalent to the period of such delay, provided. however, nothing in this section shall excuse Lessee from the prompt payment of any rental or other charge required of Lessee except as may be expressly provided elsewhere in this Lease. Section Successors in Interest. Each and all of the covenants, rights, conditions, and restrictions in this Lease shall inure to the benefit of and be binding upon the successors in interest of Lessor, and subject to the restrictions of Article 12, the authorized encumbrances, assignees, tenants, subtenants, licensees, and other successors in interest of Lessor and Lessee. Section Governing Law. This Agreement and the perfonnance thereof, shall be governed, interpreted, construed and regulated by the laws of the State of California. Section Entire Agreement. This Lease contains the entire agreement of the parties with respect to the matters covered by this Lease, and no other agreement, statement, or promise made by any party, or to any employee, officer, or agent of any party, which is not contained in this Lease shall be binding or valid. Section Amendments or Modifications. This Agreement shall not be modified, amended, tenninated or rescinded, except by written instrument executed by the parties hereto. Section 18.1 O. Partial Invalidity. If any tenn, covenant, condition, or provision of this Lease is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated. Section Conflict with Provisions of Service Agreement. In the event any provision of this Agreement shall confliet with the provisions of the Service Agreement, the provisions of the Service Agreement shall control. Section Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties or by any third person to create the relationship of principal and agent or of partnership, joint venture, or any other association between Lessor and Lessee, and neither the method of computation of rent or any other provisions contained in this Lease nor any acts of the parties shall be deemed to create any relationship between Lessor and Lessee, other than the relationship of Lessor and Lessee. Section No Merger. If Lessor's and Lessee's estates in the Facility Site become vested in the same owner, this Lease shall, nevertheless, not be destroyed by application of the doctrine of merger, unless a merger is expressly agreed to in writing by Lessor and Lessee. Section Attorney Fees. In the event either Lessor or Lessee shall bring any action or proceeding for damages for an alleged breach of any provision of this Lease, to -22-

284 recover Rent, or to endorse, protect, or establish any right or remedy of either party, the prevailing party shall be entitled to recover as a part of such action or proceedings reasonable attorney fees and court costs. Section Delivery of Rent and Notices-Method and Time. All rents or other sums, notices, demands, or requests from one party to another shall be personally delivered or sent by mail, certified or registered, postage prepaid, to the addresses stated in this section, and shall be deemed to have been given at the time of personal delivery or at the time of mailing. Section Payment of Rent. All Rent and other sums payable by Lessee to Lessor shall be in lawful money delivered in person or mailed to Lessor at the following address: Department of Enviromnental Resources, Accounting Division, 3800 Cornucopia Way, Suite C, Modesto, California Section Estoppel Certificates. Either party hereto, without charge, at any time and from time to time, within ten days after reeeipt of written request by the other party hereto, shall deliver a written instrument, duly executed, certifying to such requesting party, or any other person, firm or corporation specified by such requesting party: (a) That this Lease is unmodified and in full force and effect, or if there has been any modification, that the same is in full foree and effect as so modified, and identifying any such modification; (b) Whether or not to the knowledge of such party there are then existing any offsets or defenses in favor of such party against the enforcement of any of the terms, covenants and conditions of this Lease and, if so, specifying the same, and also whether or not to the knowledge of such party the other party has observed and performed all of the terms, covenants and conditions on its part to be observed and performed, and, if not, specifying the same; and (c) The dates to which Rent has been paid. Any written instrument given hereunder may be relied upon by the recipient of such instrument, except to the extent the recipient has actual knowledge of facts contrary to those contained in the instrument. The failure of either Lessor or Lessee to deliver such statement within such tenday period shall constitute a default hereunder and shall be conclusive upon the requesting party or any other person, firm or corporation for whose benefit the statement was requested, that this Lease is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults on the part ofthe requesting party. Section Notice to Lessor. All notices, demands, or requests from Lessee to Lessor shall be in writing and if under Article 14, shall be delivered by registered mail, return receipt requested, by overnight carrier service with receipt of delivery, or in person to Lessor at Department of Enviromnental Resources, Accounting Division, 3800 Cornucopia Way, Suite C, Modesto, California SFl vJ 5-23-

285 Section Notice to Lessee. All notices, demands, or requests from Lessor to Lessee shall be in writing and if under Article 14, shall be delivered by registered or certified mail return receipt requested, by overnight carrier service with receipt of delivery, or in person to Lessee at: 445 South Street Morristown, NJ Attention: President, Americas with a copy to Covanta Energy Corporation 445 South Street Morristown, NJ Attention: Vice President & Deputy General Counsel Other notices hereunder may be delivered by facsimile or by provided proof of receipt is obtained in each case. Section Recording. A memorandum of this Lease may be recorded by the Lessee in the appropriate office of the County of Stanislaus County, California. ARTICLE 19. DISPUTE RESOLUTION Section Agreement to Arbitrate. In the event any dispute arises between the Lessee and the Lessor, either party may serve written notice of such dispute on the other party and each party shall undertake in good faith to resolve such dispute. Except where a dispute or issue hereunder is required to be resolved in accordance with Section 1O.01(g) (Appraisal Procedure), or as may be otherwise agreed to by the parties hereto, if the parties have not resolved the dispute within fifteen (15) days after such written notice, either party may, by further written notice (an "Arbitration Notice") to the other party, commence an arbitration proceeding pursuant to this Article 19. Except as otherwise provided in this Article 19, the parties hereby agree to submit exclusively to arbitration any and all disputes arising under this Agreement, and the determination of the Arbitrator (hereinafter defined) shall be final and binding (the "Award"). The Award shall determine (i) whether each party's obligations were met and (ii) what damages or remedies are due to either the County or the Lessee under the terms of this Agreement. The agreement to arbitrate contained in this Article 19 shall be specifically enforceable under the prevailing arbitration law, and shall survive termination of this Agreement. Judgment upon the A ward rendered by the arbitrator or arbitration panel may be entered in accordance with applicable law in any court having jurisdiction. Section Contents of Arbitration Notice. The Arbitration Notice shall be filed simultaneously with the American Arbitration Association ("AM"), and shall contain a statement of the amount in controversy and a description of the dispute, and shall attach a copy of the arbitration provisions of this Agreement. The parties shall prepare in writing a statement of their positions, together with counterclaims, with supporting facts, data, and affidavits, if any, for the Arbitrator and the other party within ten (10) days after the Appointment Date SFl v.l5-24-

286 (hereinafter defined). The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the AAA (the "Rules"). Section Selection of Arbitrator. The arbitration shall be conducted before a single arbitrator (the" Arbitrator"), who shall be neutral and impartial. Neither party to this Agreement shall have the right to remove the Arbitrator except in accordance with the Rules and as provided in this Section. The parties will attempt in good faith to agree on the selection of the Arbitrator and, in the event that the initial Arbitrator resigns, is unable to serve, or is disqualified, the successor Arbitrator. If the parties have not agreed upon the Arbitrator, whether initial or successor, as the case may be, within fifteen (15) days from either the Arbitration Notice or the date that a then-current Arbitrator resigns, is unable to serve, or is disqualified, the following procedure shall be used to select the initial Arbitrator (and all subsequent successor Arbitrators): The parties shall obtain from the AAA a list of ten (10) candidates together with full AAA disclosures on each candidate. (The date of receipt of such list and of all such disclosures is the "Nomination Date"). Each candidate shall be approved by AAA and deemed qualified and unbiased by AAA and be willing to serve if selected and no candidate, nor any member of his or her family, or firm or company, shall have had a prior relationship, directly or indirectly with either party. Each party also hereby represents and covenants that it will not engage an Arbitrator, or any family member, for a period of at least five years following issuance of an Award by such Arbitrator. If either party fails to submit a list of ranked candidates within ten (10) days of the Nomination Date, the third name listed on the list provided by the party submitting a list shall be deemed to be the Arbitrator. Each party shall rank the ten candidates in its order of preference and submit the ranked list to the other party within ten (10) days after the Nomination Date; the candidate with the highest combined ranking of mutual preference shall be the Arbitrator. If there is a tie, the arbitrator with smallest difference between the rankings of the two parties (e.g., if one candidate scores a 4 on each list and one scores a 1 and a 7, the candidate with two rankings of 4 shall be the one selected) shall be selected the Arbitrator and if there is still a tie, the candidate who has been an AAA arbitrator the longest shall become the Arbitrator. The parties shall promptly notify AAA of the selected Arbitrator (the "Appointment Date"). The Arbitrator shall serve for one arbitration unless he or she earlier resigns, is unable to serve, or is disqualified. Section Discovery. The parties to such arbitration shall have, for a period of ninety (90) days after the service of the Arbitration Notice, subject to extensions of such period by the Arbitrator (not to exceed sixty (60) days in the aggregate) upon a showing of good cause by either party (the "Discovery Period"), all rights of discovery provided in the commercial arbitration rules of the AAA, except that all responses to discovery requests shall be served within ten (10) days of such discovery request, unless such time period is extended by the parties or by the Arbitrator, provided extensions by the Arbitrator do not exceed 20 days in the aggregate. Section Continuance of Performance. Unless otherwise agreed in writing or as provided herein, the parties shall continue to perform their respective obligations under this Agreement during any arbitration proceedings. SFI vJ5-25-

287 Section Costs of Arbitration. Each party shall bear its own costs for arbitration, subject to reimbursement as determined by the Arbitrator in the Award. Section Site of Arbitration. Arbitration shall, unless the parties otherwise agree in writing, take place in Modesto, California. Section Equitable Relief Not Precluded. Nothing contained in this Article 19 shall preclude, or be deemed, construed or interpreted to preclude any party from seeking interim equitable relief, except that no party shall be entitled to seek a stay of any arbitration proceeding brought hereunder. Section Limited Court Challenge. The Award shall not be subject to appeal to, or review by, any court or administrative body except as to (i) compliance with the requirements of this Article 19, (ii) the existence of, or a failure of the Arbitrator to have disclosed, any conflict, contacts or relationships set forth in the questions contained (as of the time the Arbitration Notice is given) in the Notice of AppointrnentJDisclosure Guidelines of the International Centre for Dispute Resolution (a Division of the AAA), or its successor, unless the party adversely affected shall have waived objection thereto in writing, (iii) evidence of partiality on the part of the Arbitrator, or improper contacts with the Arbitrator by a party or its representatives or witnesses between the Appointment Date and the issuance of the A ward, or (iv) any of the grounds provided in Section of the Federal Arbitration Act. ARTICLE 20. PARENT GUARANTY Section Parent Guaranty. As a condition precedent to the obligations and liabilities of Lessor hereunder, Covanta Holding Corporation, its successors and assigns, (the "Parent Company") shall have entered into the Parent Guaranty as defined in and required by the Service Agreement for the benefit of the Contracting Communities, which Parent Guaranty shall include guaranties of Lessee's obligations under Section 7.04 of this Lease. Lessor shall receive a legal opinion from counsel for the Parent Company as to the due authorization, execution and delivery of the Parent Guaranty, and to its enforceability, in a form reasonably acceptable to counsel to the County. SF} v.l5-26-

288 IN WITNESS WHEREOF, the County of Stanislaus, California and Co vanta Stanislaus, Inc. have caused this Facility Site Lease Agreement to be signed in their respective corporate names all as of the day and year first above written. LESSOR: COUNTY OF STANISLAUS, CALIFORNIA By: Title: LESSEE: COVANTA STANISLAUS, INC. By: Title: SF} v,15

289 STATE OF CALIFORNIA COUNTY OF STANISLAUS ) ) ) SS. On, before me, the undersigned, a Notary Public in and for said State, personally appeared, known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed the within instrument as the Vice Presideut on behalf of Covanta Stanislaus, Inc., a California corporation, the corporation therein named, and acknowledged to me that said corporation executed the within instrument pursuant to its bylaws or a resolution of its board of directors. WITNESS my hand and official stamp. Notary Public in and for said County and State SFl v.15

290 STATE OF CALIFORNIA COUNTY OF STANISLAUS ) ) ) SS. On, before me, the undersigned, a Notary Public in and for said State, personally appeared, known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed the within instrument on behalf of the County of Stanislaus, a political subdivision of the State of California, the political subdivision therein named, and acknowledged to me that said political subdivision executed the within instrument pursuant to its resolution or its Board of Supervisors. WITNESS my hand and official stamp. Notary Public in and for said County and State SF} v.15

291 SCHEDULE 1 Facility Site Parcel No. 1 Parcel A as shown and delineated on that certain map of a portion of the Southwest Quarter of the Northwest Quarter of Section 30, Township 6 South, Range 8 East, Mount Diablo Base and Meridian, filed June 26, 1986 in Book 38 of Parcel Maps, at page 36, Stanislaus County Records. Reserving to Edgar Allen Bacon, Winifred Edna Bacon and Myrtle Eleanor Bacon Burr, their representatives, heirs, executors, administrators, and assigns, all minerals, oil, gas and other hydrocarbon substances lying below a level plain 500 feet below the lowest point on the surface of the described property, provided, however, that in no event shall they or their representatives, heirs, executors, administrators, or assigns, have the right to drill or mine from the surface of such lands or any portion of said land which lies above a level plain located 500 feet below the lowest point on the surface thereof. Parcel No.2 A Non-Exclusive Easement for a 40 foot road and public utilities over, under, along and across that certain access easement shown and delineated on the above referred to Parcel Map 38 PM 36 wherein said easement extends from Parcel A above referred to northerly through the Northwest Quarter of Section 30 and the Southwest Quarter of Section 19, Township 6 South, Range 8 East, Mount Diablo Base and Meridian, to the existing County Road known as Fink Road. SFl v.lS

292 \. ~ RnAb t..a~orlt.l,. et~ _~ ~TtON: Ott THI: 1t "~0>'Kf;" $ "!."O>'Kf;~T,nR.t"'OIo\,,.. _... I -~ ---", SFl vJ5

293 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION APPROVING AMENDMENT NO.3 TO THE AGREEMENT BETWEEN CITY OF MODESTO AND COUNTY OF ST ANISLAUS RELATING TO ADMINISTRATION OF SERVICE AGREEMENT FOR SUPPLY AND ACCEPTANCE OF SOLID WASTE WITH THE COUNTY OF STANISLAUS AND AUTHORIZING THE MAYOR TO EXECUTE THE AMENDMENT WHEREAS, on December 17,1985, the City of Modesto and County of Stanislaus entered into an agreement for administration of the City/County Serviee Agreement with the Stanislaus Waste Energy Company (now Covanta Stanislaus) for supply and acceptance of solid waste, and WHEREAS, since that time, the City has been partners with Stanislaus County and Covanta Stanislaus in the Stanislaus Resource Recovery Facility (the "Waste-to- Energy" or "WTE" Facility), and WHEREAS, the City and County operate the project as a Joint Powers Agency under a Joint Powers Agreement, with the County acting as the Treasurer, and WHEREAS, under the current Service Agreement, the Contracting Communities pay Covanta a service fee to operate the facility and are also responsible for all pass through costs associated with the facility such as taxes, insurance, air permit fees, ash disposal, etc., and WHEREAS, the Contracting Communities are also responsible for any costs associated with unforeseen circumstances such as changes in law, major upgrades or any acts, events or conditions that have a material adverse effect on the operation of the facility, and WHEREAS, the Contracting Communities are responsible for delivering wastes to the facility under a minimum tonnage guarantee of243,300 tons, and Covanta uses this 06l PRN/JHannonl1tem

294 waste to generate electricity, which it sells to PG&E under a Power Purchase Agreement (PPA), and WHEREAS, the Contracting Communities currently retain 90% of the electric revenue generated by the facility, all of the disposal fees, 50% of metal recycling revenue and 30% of supplemental waste revenue, which revenues are used to offset costs, and WHEREAS, the existing Service Agreement was set to expire on December 31, 2009, and in 2007, staff from the County Department of Environmental Resources and the City of Modesto Solid Waste Division began negotiations on a new contract with Covanta, and WHEREAS, those negotiations proved unsuccessful with Covanta asking for more concessions that staff were willing to agree to, so in May 2009, the County and the City of Modesto exercised an option given in the original contract to extend the contract under the same terms an additional six years through December 31, 2015, and WHEREAS, when the Power Purchase Agreement (PP A) with PG&E expired in January, 2010, Covanta elected to extend its contract with PG&E under extension provisions pursuant to California Public Utilities Commission (CPUC) Decision No , and WHEREAS, those provisions caused the price paid for power to revert to the Short Run Avoided Cost, or "SRAC", which was about $55 per MW at the time and has since dropped even further, and WHEREAS, this pricing also did not include a premium for renewable energy, and the capacity payment was reduced, and as a result, revenues from electricity generation declined sharply resulting in a significant operating deficit, and 06/26/2012 PRN/JHannonlItem

295 WHEREAS, both the Contracting Communities and Covanta recognized that it would be in our joint interests to return to the negotiating table and secure a long term commitment that would motivate Covanta to negotiate a new PP A at much more favorable rates than current SRAC rates, and WHEREAS, a new negotiating team was formed and reopened negotiations with Covanta, with the objectives of preserving the current RRA balance, a stable and predictable tipping fee, a commitment to no increased importation of waste, meeting diversion requirements and preserving landfill capacity, and reducing City/County risk exposure from change-in-iaw, public perception, and change in science/technology, and WHEREAS, the Contracting Communities negotiating team has met on a regular basis over the past year and has provided periodic updates on the status of negotiations to the Solid Waste-to-Energy Executive Committee and the City-County Liaison Committee, and WHEREAS, the negotiating team and Legal Counsel to the Executive Committee, Sidley Austin LLP, have negotiated a new Service Agreement and Lease Agreement with Covanta, to become effective on July 1, 2012, and WHEREAS, as the Contracting Communities enter into a new contractual arrangement with Covanta, it will also be important to discuss and clarify a number of areas relative to the ongoing working relationship between the County and City, such as the disposition of the Resource Recovery Account (RRA), guaranteed tonnage obligations, gate processing, notifications, etc., through the negotiation of an Amendment to the JP A Agreement l2-PRN/JHannonlltem

296 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that the Council hereby approves Amendment NO.3 to the Agreement Between City Of Modesto And County Of Stanislaus Relating To Administration Of Service Agreement For Supply And Acceptance Of Solid Waste with the County of Stanislaus regarding the disposition of the Resource Recovery Account and other operating procedures upon commencement of a new Service Agreement, effective July 1,2012, and authorizes the Mayor to execute the Amendment. The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being dcly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: -==::-c::-:~[±:;'f!k,~:-:=-=-- A WOOD, City Attorney 06126/2012 -PRNIJHannonlItem

297 MODESTO CITY COUNCIL RESOLUTION NO A RESOLUTION AUTHORIZING AN INCREASE IN THE COST OF THE AGREEMENT WITH SIDLEY AUSTIN LLP FOR LEGAL SERVICES RELATED TO THE DEVELOPMENT OF A NEW SERVICE AGREEMENT WITH COVANTA STANISLAUS IN AN AMOUNT NOT TO EXCEED $142,000 WHEREAS, on December 17, 1985, the City of Modesto and County of Stanislaus entered into an agreement for administration of the City/County Service Agreement with the Stanislaus Waste Energy Company (now Covanta Stanislaus) for supply and acceptance of solid waste, and WHEREAS, since that time, the City has been partners with Stanislaus County and Covanta Stanislaus in the Stanislaus Resource Recovery Facility (the "Waste-to- Energy" or "WTE" Facility), and WHEREAS, as the initial term of the contract was nearing its end, both the Contracting Communities and Covanta recognized that it would be in our joint interests to return to the negotiating table and secure a long term commitment to provide Waste-to- Energy services, and WHEREAS, a new negotiating team was formed and reopened negotiations with Covanta, with the objectives of preserving the current RRA balance, a stable and predictable tipping fee, a commitment to no increased importation of waste, meeting diversion requirements and preserving landfill capacity, and reducing City/County risk exposure from change-in-law, public perception, and change in science/technology, and WHEREAS, Sidley Austin LLP was retained by the Contracting Communities to act as Legal Counsel in negotiations with Covanta, and the amount of this contract was set at $110,000 on January 10,2012, and 06/ JPR&N/JHannonlltem

298 WHEREAS, the Contracting Communities negotiating team has met on a regular basis over the past year and has provided periodic updates on the status of negotiations to the Solid Waste-to-Energy Executive Committee and the City-County Liaison Committee, and WHEREAS, major deal points from the negotiations were agreed upon by the team and Covanta and were outlined in a Term Sheet approved by the Council and Board of Supervisors, and WHEREAS, the negotiating team and Legal Counsel to the Executive Committee, Sidley Austin LLP, have negotiated a new Service Agreement and Lease Agreement with Covanta, to become effective on July 1, 2012, and WHEREAS, due to the complexity of issues related to the Service Agreement and Site Lease, it is necessary to increase funding for legal services. NOW, THEREFORE, BE IT RESOLVED by the CouneiloftheCity of Modesto that the Council hereby authorizes an increase in the amount of the agreement with Sidley Austin LLP for legal services related to development of a new Service Agreement in an amount not to exceed $142, PR&NIJHannonlltem

299 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day ofjune, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Burnside, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Councilmembers: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FO By: OOD, City Attorney 06/ JPR&N/JHannonlItem

300 MODESTO CITY COUNCIL RESOLUTION NO JUN A RESOLUTION APPROVING ADJUSTMENTS TO THE Mi\Xli)11JM SCHEDULE FOR CITY RESIDENTIAL, COMMERCIAL, SOLID WASTE COLLECTION SERVICES, TO B~:g~~:~::t; 2012, INCLUDING FUEL COST; AND RESCINDING ~e'!'l~"",,,,""'~~~ I?>- C);;;, WHEREAS, with the adoption of Ordinance No C.S. in November of 1997, the City no longer sets rates for the collection of garbage in Modesto, and instead performs a comprehensive review of cost information submitted by the contract garbage haulers, and WHEREAS, the City sets a maximum rate that the haulers may charge for the various types of services provided under the contracts based on cost data provided by the lowest cost hauler, and WHEREAS, Section f(2) of the City's Service Agreements with its solid waste collectors requires that when the City makes adjustments to the collection services provided under the Agreements, any additional costs should be covered by adjustments to the maximum rates, and WHEREAS, in addition, maximum rates for solid waste collection services are reviewed annually as requested by the City's garbage collection companies, and WHEREAS, the City conducted an analysis using the audited financial statements provided by the garbage haulers, supplemental data provided by the garbage haulers, and fuel price information and forecast prices developed by the United States Department of Energy, and WHEREAS, staffhas adjusted the fuel component ofthe maximum rates and has incorporated the fuel component adjustment into the schedule of Maximum Charges for 06/ PR&N/JReedJltem

301 Garbage Service attached hereto, marked Exhibit "I" and incorporated herein by reference, and WHEREAS, on January 10,2012, the Board of Supervisors and Council approved a Term Sheet to be used in the development of a new service agreement with Covanta Stanislaus, Inc., for the operation of the Waste-to-Energy (WTE) facility, and WHEREAS, the term sheet approved by the Board of Supervisors and Council included an increase in the current base disposal fee at the facility from $22 per ton to $32 per ton with an annual escalator, and WHEREAS, in addition to the base tip fee, there are also AB 939 ($3 per ton) and Household Hazardous Waste ($3 per ton) program fees, and scale house and administrative costs ($1.00 per ton), that need to be incorporated into the disposal fee at the facility, and WHEREAS, when those fees are added to the base disposal fee, the new disposal fee would be $39 per ton, an $11 per ton increase from the current disposal fee of $28 per ton, and WHEREAS, this $11 per ton increase equates to an increase of $1.20 per month on residential rates and $0.37 cubic yard on commercial bin rates (drop box rates are not affected by this increase, since most drop box waste does not get taken to the Waste-to Energy Facility), and WHEREAS, on November 25, 2008, by Resolution No , the Council approved the assessment of an AB 939 Green Waste Diversion fee that would be assessed on a per ton basis on residential, commercial bin, and drop box wastes generated in the City of Modesto, and 06126/20121PR&NIJReediltem

302 WHEREAS, on June 11,2012 the Economic Development Committee approved sending a recommendation to the Council to increase the AB 939 Green Waste Diversion fees in order to fully fund the purchase of green waste collection equipment that complies with the California Air Resources Board's (CARB) emissions regulations by FY , and WHEREAS, the Committee recommended that the fee on wastes from residential sources be increased to $1.93 per month, the fee on wastes from commercial bins be increased to $3.46 per cubic yard per month, and the fee on wastes from industrial bins be increased to $8.72 per ton to fund this purchase, and WHEREAS, the above noted fees and charges to the collection companies have been incorporated into the recommended schedules of maximum rates shown as Exhibit 1 hereto, and WHEREAS, a report dated June 6, 2011, from the Parks, Recreation and Neighborhoods Department, a copy of which is on file in the office of the City Clerk, sets forth said recommendations, and WHEREAS, said matter was set for a public hearing of the City Council to be held at 5:30 p.m. on June 26, 2012, in the Tenth Street Place Chambers, located at 1010 Tenth Street, Modesto California, at which date and time a duly noticed public hearing was held at said time and place, at which time evidence, both oral and documentary, was received and considered, and WHEREAS, it was found and determined by the Council of the City of Modesto that the existing schedules of rates and charges for garbage service in the City of Modesto 06l PR&NIlReedlIwm

303 should be revised as recommended, and that quarterly adjustments to the fuel component of the maximum rates should be made, NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the Maximum Charges for Garbage Service as attached hereto marked Exhibit "I" and incorporated herein by reference. Said Maximum Charges for Garbage Service includes twice-a-year bulky item pickup for residential customers and all other residential services as stipulated in the Service Agreements and shall become effective July 1, 2012, and shall remain in effect until revised by CounciL BE IT FURTHER RESOLVED that any person who has prepaid garbage service charges for residential garbage service shall be entitled to receive garbage service for the balance of said prepaid period at the prepaid rates. BE IT FURTHER RESOLVED that Resolution No is hereby rescinded effective July 1, /26/20121PR&N/JReedlltem

304 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 26 th day of June, 2012, by Councilmember Lopez, who moved its adoption, which motion being duly seconded by Councilmember Muratore, was upon roll call carried and the resolution adopted by the following vote: AYES: NOES: ABSENT: Council members: Councilmembers: Councilmembers: Burnside, Cogdill, Geer, Gunderson, Lopez, Muratore, Mayor Marsh None None (SEAL) APPROVED AS TO FORM: By: ~~~~~~~~~~ SUSAN IALCALA WOOD, City Attorney 06/26/2012IPR&N1JReedlItem

305 EXHIBIT "1" July 1, 2012 MAXIMUM CHARGES FOR GARBAGE SERVICE STANDARD CONTAINERS Maximum Monthly Rates (Once a Week Pickup Service) Standard container service shall include the following: One, 96-gallon container for garbage One, 96-gallon container for green waste, food, paper, and other organics Countertop container for kitchen scraps Drop-off of old TV and computer tubes Two bulky item collections per year by appointment Pruned Refuse Collection Standard container service customers may opt for smaller containers; however, maximum rates apply. Containers must be placed in a location set forth in Section of the Municipal Code. 1. Standard container service - a. The maximum rate for new sign ups for service or changes in service that occur after July 1, 1996, shall be $26.73 per month regardless of size of container. A fuel component of $1.36 per month is included in the maximum rate for the quarter beginning July L 2012 and ending September 30, The fuel component may be adjusted quarterly. b. The maximum rate for each additional garbage container shall be $19.88 per month, and $10.07 per month for each additional green waste container gallon container service (grandfathered customers) - a. The maximum rate for customers with 60-gallon containers who subscribed to service at an address prior to July 1, 1996 and who have not changed their service address shall be $22.42 per month. A fuel component of $1.36 per month is included in the maximum rate for the quarter beginning July 1, 2012 and ending September 30, The fuel component may be adjusted quarterly. b. The maximum rate for each additional 50-gallon garbage container shall be $19.40 per month. 3. Fuel Component adjustments - The fuel component shall be analyzed quarterly and adjustments shall be made as necessary. The adjustment shall be based on the average price of fuel for a preceding quarter as follows: July 1/January-March; October l/april-june; January l/july-september; April 1/0ctober-December. Average prices shall be determined based on published prices for California from the Department of Energy, Energy Information Agency. 6m/l' -1-

306 DETACHABLE CONTAINERS M axlmum M on thl Iy R a t es Regular Container Maximum Rates II Container NUMBER OF COLLECTIONS PER WEEK Size lcy $30.17 $60.34 $90.51 $ $ $ CY $60.34 $ $ $ $ $~ CY $90.51 $ $ $ $ $543.{)6 4CY $ $ $ $ $ $ CY $ $ $ $ $ $ CY $ $ $ $ $ $1, FORK Participants Container Maximum Rates Container NUMBER OF COLLECTIONS PER WEEK Size CY $45.26 $90.51 $ $ $ $ CY $67.88 $ $ $ $ $ CY $90.51 $ $ $ $ $ CY $ $ $ $ $ $ CY $ $ $ $ $ $ gallon $20.05 $40.10 $60.14 $80.19 $ $ Weeklv rental/detachable Containers - Shall not exceed the rate for 1 pickup per week for each size container. 2. Fuel Component - A fuel component of $1.18 per cubic yard per month ($0.27 per cubic yard) for a 1 cubic yard container collected once a week is included in the maximum rate for the quarter beginning July and ending September 30, The fuel component shall be analyzed quarterly and adjustments shall be made as necessary. The adjustment shall be based on the average price of fuel for a preceding quarter as follows: July l/january-march; October/April-June; January l/july-september; April 1/0ctober-December. Average prices shall be determined based on published prices for California from the Department of Energy. DROP BOX CONTAINERS 1. Pick up charge - $ per pick up 2. Rental - $0.85 per day up to 7 day maximum rental - $3.00 per day for boxes kept 7 or more days without servicing - $10.00 per day for boxes kept 21 or more days without servicing 3. Disposal charge - Actual charge to be paid by customer. Garbage company will provide up to 40 CY Drop Box containers for above stated charges subject only to load limit of transfer vehicle. An AB 939 Green Waste Diversion Fee of $8.72 per ton will be added to the disposal charges