CITY of LAGUNA WOODS CITY COUNCIL AGENDA

Regular Meeting Laguna Woods Village Community Center Board Room Wednesday, May 18, 2016 24351 El Toro Road 2:00 p.m. Laguna Woods, California 92637

Noel Hatch Mayor

Shari L. Horne Bert Hack Mayor Pro Tem Councilmember

Cynthia Conners Carol Moore Councilmember Councilmember

Welcome to a meeting of the Laguna Woods City Council!

This meeting may be recorded, televised, and made publically available.

Public Comments: Persons wishing to address the City Council are requested to complete and submit a speaker card to City staff. Speaker cards are available near the entrance to the meeting location. Persons wishing to address the City Council on an item appearing on this agenda will be called upon at the appropriate time during the item’s consideration. Persons wishing to address the City Council on an item not appearing on the agenda will be called upon during the “Public Comments” item. Persons who do not wish to submit a Speaker Card, or who wish to remain anonymous, may indicate their desire to speak from the floor. Speakers are requested, but not required, to identify themselves.

Americans with Disabilities Act (ADA): It is the intention of the City to comply with the ADA. If you need assistance to participate in this meeting, please contact either the City Clerk’s Office at (949) 639-0500/TTY (949) 639-0535 or the California Relay Service at (800) 735-2929/TTY (800) 735-2922. The City requests at least two business days’ notice in order to effectively facilitate the provision of reasonable accommodations.

I. CALL TO ORDER

II. ROLL CALL

III. PLEDGE OF ALLEGIANCE

IV. PRESENTATIONS AND CEREMONIAL MATTERS

4.1 Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Annual Finance Report for the Fiscal Year Ended June 30, 2015 – Government Finance Officers Association

Recommendation: Receive the certificate.

4.2 Drowning Prevention Awareness Period – May-October 2016

Recommendation: Approve and present the proclamation.

4.3 Asian American and Pacific Islander Heritage Month – May 2016

Recommendation: Approve and present the proclamation.

4.4 Building Safety Month – May 2016

Recommendation: Approve and present the proclamation.

4.5 Older Americans Month – May 2016

Recommendation: Approve and present the proclamation.

4.6 Stroke Awareness Month – May 2016

Recommendation: Approve and present the proclamation.

4.7 Water Awareness Month – May 2016

Recommendation: Approve and present the proclamation.

Laguna Woods City Council Agenda  05/18/2016 Regular Page 3 of 8 V. PUBLIC COMMENTS

About Public Comments: This is the time and place for members of the public to address the City Council on items not appearing on this agenda. Pursuant to State law, the City Council is unable to take action on such items, but may engage in brief discussion, provide direction to City staff, or schedule items for consideration at future meetings.

VI. CONSENT CALENDAR

About the Consent Calendar: All items listed on the Consent Calendar are considered routine and will be enacted by one vote. There will be no separate discussion of these items unless a member of the City Council, City staff, or the public requests that specific items be removed from the Consent Calendar for separate discussion and consideration of action.

6.1 City Council Minutes

Recommendation: Approve the City Council meeting minutes for the regular meeting on April 20, 2016 and the adjourned regular meeting on April 27, 2016.

6.2 City Treasurer’s Report

Recommendation: Receive and file the City Treasurer’s Report for the month of April 2016.

6.3 Warrant Register

Recommendation: Approve the warrant register dated May 18, 2016 in the amount of $574,439.92.

6.4 Employee Compensation and Benefits

Recommendation:

1. Approve a resolution entitled:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA, ESTABLISHING A COMPENSATION SCHEDULE AND BENEFITS FOR CITY EMPLOYEES

Page 4 of 8 Laguna Woods City Council Agenda  05/18/2016 Regular AND

2. Approval of a resolution entitled:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA, APPROVING A CAFETERIA PLAN (INTERNAL REVENUE CODE SECTION 125 FLEXIBLE BENEFITS PLAN), INCLUDING A HEALTH FLEXIBLE SPENDING ACCOUNT AND DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT, FOR EMPLOYEES; APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT FOR ONGOING ADMINISTRATION OF THE CAFETERIA PLAN; AND, TAKING OTHER ACTIONS RELATED TO THE ESTABLISHMENT, OPERATION, AND MAINTENANCE OF THE CAFETERIA PLAN

6.5 Law Enforcement Services Agreement

Recommendation: Approve an agreement with the County of Orange for law enforcement services and authorize the Mayor to execute the agreement, subject to approval as to form by the City Attorney.

6.6 Street Maintenance Services

Recommendation: Approve an extension of the agreement with PV Maintenance, Inc. for street maintenance services and authorize the City Manager to execute the agreement, subject to approval as to form by the City Attorney.

6.7 Senior Mobility Transportation Services

Recommendation: Adopt an agency service plan for the Senior Mobility Program and authorize the City Manager to execute and submit the agency service plan to the Orange County Transportation Authority.

Laguna Woods City Council Agenda  05/18/2016 Regular Page 5 of 8 6.8 Notice of Completion – Santa Maria Avenue Bioswale Project

Recommendation:

1. Approve final plans and specifications reflecting completion of the Santa Maria Avenue Bioswale Project, as recommended by the City Engineer.

AND

2. Accept project completion of the contract agreement with STL Landscape, Inc. for the Santa Maria Avenue Bioswale Project.

AND

3. Release contract retention in the amount of $2,400 withheld per California Government Code 35 days following recordation of the Notice of Completion with the County of Orange.

AND

4. Exonerate project posted bonds 35 days following recordation of the Notice of Completion with the County of Orange.

VII. PUBLIC HEARINGS

VIII. CITY COUNCIL BUSINESS

8.1 City Hall Building Maintenance and Reconfiguration

Recommendation:

1. Approve a resolution entitled:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA, APPROVING AMENDED GENERAL FUND APPROPRIATIONS FOR THE FISCAL YEAR COMMENCING JULY 1, 2015 AND ENDING JUNE 30, 2016, RELATED TO THE TEMPORARY RELOCATION, REPAIR, AND RECONFIGURATION OF

Page 6 of 8 Laguna Woods City Council Agenda  05/18/2016 Regular CITY HALL’S SECOND FLOOR, AND FUMIGATION OF CITY HALL, GENERALLY

AND

2. Authorize the City Manager to execute an agreement with Orkin for fumigation by tenting of City Hall, subject to approval as to form by the City Attorney.

8.2 Fiscal Year 2016-17 Budget and Work Plan Development

Recommendation: Discuss and provide direction to staff.

8.3 Employee Positions and Recruitment

Recommendation: Authorize the City Manager to advertise and recruit for a full-time Management Analyst position assigned to the Planning & Environmental Services Department, with hiring contingent on the City Council taking action to authorize the position as part of the Fiscal Year 2016-17 budget.

8.4 City Council Meeting Schedule

Recommendation: Approve the City Council meeting schedule for Fiscal Year 2016-17.

IX. CITY COUNCIL REPORTS AND COMMENTS

About City Council Comments and Reports: This is the time and place for members of the City Council to provide reports on meetings attended including, but not limited to, meetings of regional boards and entities to which they have been appointed to represent the City and meetings attended at the expense of the City pursuant to California Government Code Section 53232.3. Members of the City Council may also make other comments and announcements.

9.1 Coastal Greenbelt Authority Councilmember Conners; Alternate: Mayor Pro Tem Horne

9.2 Orange County Fire Authority Mayor Hatch

Laguna Woods City Council Agenda  05/18/2016 Regular Page 7 of 8 9.3 Orange County Library Advisory Board Councilmember Moore; Alternate: Mayor Pro Tem Horne

9.4 Orange County Mosquito and Vector Control District Mayor Pro Tem Horne

9.5 San Joaquin Hills Transportation Corridor Agency Councilmember Hack; Alternate: Councilmember Conners

9.6 South Orange County Watershed Management Area Councilmember Moore; Alternate: Mayor Hatch

9.7 Other Comments and Reports

X. CLOSED SESSION

10.1 The City Council will meet in closed session under the authority of California Government Code sections 54956.9(d)(2) and (e)(1) to discuss potential exposure to litigation in one case.

XI. CLOSED SESSION REPORT

XII. ADJOURNMENT

Next Regular Meeting: Wednesday, June 15, 2016 at 2 p.m. Laguna Woods Village Community Center Board Room 24351 El Toro Road, Laguna Woods, California 92637

Page 8 of 8 Laguna Woods City Council Agenda  05/18/2016 Regular

4.1 CERTIFICATE OF ACHEIVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING FOR THE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 – GOVERNMENT FINANCE OFFICERS ASSOCIATION

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4.2 PROCLAMATION – DROWING PREVENTION AWARENESS PERIOD – MAY-OCTOBER 2016

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Proclamation City of Laguna Woods Drowning Prevention Awareness Period May – October 2016

WHEREAS, drowning is the leading cause of death and disability in California for children under five years of age, and in 2015 there were five fatal drownings and 35 non- fatal incidents in Orange County; and

WHEREAS, drowning is a major problem for adults 35 to 64 years of age, and in 2015 there were 21 fatal drownings and five non-fatal incidents in Orange County; and

WHEREAS, fatal and non-fatal drowning is a silent event that can occur in as little as two inches of water, including swimming pools, spas, lakes, the ocean, and any other body of water; and

WHEREAS, the Orange County Fire Authority’s 24-week water safety campaign began in May and will continue through October; and

WHEREAS, the themes of this year’s water safety campaign are “Always Watch Your Child Around Water” and “Never Swim Alone.”

NOW, THEREFORE, BE IT RESOLVED that the Laguna Woods City Council does hereby proclaim May – October 2016 as a “Drowning Prevention Awareness Period” in the City of Laguna Woods and encourages residents and businesses to increase their knowledge of proper safety measures to prevent drowning.

Dated this 18th day of May, 2016

______Noel Hatch Attest: Yolie Trippy Mayor Deputy City Clerk

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4.3 PROCLAMATION – ASIAN AMERICAN AND PACIFIC ISLANDER HERITAGE MONTH – MAY 2016

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Proclamation City of Laguna Woods Asian American and Pacific Islander Heritage Month May 2016

WHEREAS, Asian Americans and Pacific Islanders have played a critical role in the social, economic, and political development of the United States; and

WHEREAS, Asian Americans and Pacific Islanders are one of the fastest growing ethnic populations in the state of California; and

WHEREAS, Asian Americans and Pacific Islanders represent more than 11 percent of the population of Laguna Woods; and

WHEREAS, Asian American and Pacific Islander clubs and communities throughout Laguna Woods actively promote cultural heritage and understanding; and

WHEREAS, Asian Americans and Pacific Islanders have a proud legacy of service and dedication to our community, state, and country.

NOW, THEREFORE, BE IT RESOLVED that the Laguna Woods City Council does hereby proclaim May 2016 as “Asian American and Pacific Islander Heritage Month” in the City of Laguna Woods and encourages reflection on the accomplishments that Asian Americans and Pacific Islanders have made throughout history.

Dated this 18th day of May, 2016

______Noel Hatch Attest: Yolie Trippy Mayor Deputy City Clerk

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4.4 PROCLAMATION – BUILDING SAFETY MONTH – MAY 2016

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Proclamation City of Laguna Woods Building Safety Month May 2016

WHEREAS, the International Code Council’s founded “Building Safety Month” to encourage all Americans to raise awareness of the importance of building safety in the construction industry and to recognize the countless lives saved due to the implementation of building codes by local and state agencies; and

WHEREAS, the theme for this year’s Building Safety Month is “Building Codes: Driving Growth through Innovation, Resilience and Safety”; and

WHEREAS, building codes address critical issues of safety, energy efficiency, and sustainability in the built environment that benefit residents and businesses, both in everyday life and in times of disaster; and

WHEREAS, there are steps that all Americans can take to ensure that the places where they live, learn, work, worship, and play are safe and sustainable, including obtaining appropriate building permits and constructing lawful improvements.

NOW, THEREFORE, BE IT RESOLVED that the Laguna Woods City Council does hereby proclaim May 2016 as “Building Safety Month” in the City of Laguna Woods and encourages residents and businesses to recognize the value and importance of building safety.

Dated this 18th day of May, 2016

______Noel Hatch Attest: Yolie Trippy Mayor Deputy City Clerk

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4.5 PROCLAMATION – OLDER AMERICANS MONTH – MAY 2016

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Proclamation City of Laguna Woods Older Americans Month May 2016

WHEREAS, Laguna Woods is a unique community with an average age of 77; and

WHEREAS, throughout their lives, the residents of Laguna Woods have made countless contributions and sacrifices to ensure a better life for future generations; and

WHEREAS, the City of Laguna Woods recognizes that older adults are trailblazers — advocating for themselves, their peers, and their communities — and paving the way for future generations; and

WHEREAS, the City of Laguna Woods is committed to raising awareness about issues facing older adults and helping older adults to thrive in communities of their choice for as long as possible; and

WHEREAS, our community can provide opportunities to enrich the lives of individuals of all ages by promoting and engaging in activity, wellness, and social involvement; emphasizing home- and community-based services that support independent living; and, ensuring that others can benefit from the contributions and experience of older adults.

NOW, THEREFORE, BE IT RESOLVED that the Laguna Woods City Council does hereby proclaim May 2016 as “Older Americans Month” in the City of Laguna Woods and encourages residents to take time to acknowledge older adults and the people who serve them as being powerful and vital to the fabric of our country.

Dated this 18th day of May, 2016

______Noel Hatch Attest: Yolie Trippy Mayor Deputy City Clerk

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4.6 PROCLAMATION – STROKE AWARENESS MONTH – MAY 2016

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Proclamation City of Laguna Woods Stroke Awareness Month May 2016

WHEREAS, stroke is a leading cause of serious long-term disability and the fifth leading cause of death in the United States, killing about 130,000 people each year; and

WHEREAS, stroke prevalence is projected to increase by 20.5 percent between 2016 and 2030 and the direct medical costs for treating stroke are expected to almost triple, from 71.6 billion to 184.1 billion by 2030; and

WHEREAS, more than half of Americans do not know if they are at risk for stroke; and

WHEREAS, one in three Americans cannot recall any stroke warning sign or symptom; and

WHEREAS, the F.A.S.T. warning signs and symptoms of stroke include face drooping, arm weakness, speech difficulty and time to call 9-1-1; and beyond F.A.S.T., additional stroke warning signs and symptoms include sudden numbness or weakness of the face, arm or leg, especially on one side of the body; sudden confusion, trouble speaking or understanding; sudden trouble seeing in one or both eyes; sudden trouble walking, dizziness, loss of balance or coordination; and sudden severe headache with no known cause; and

WHEREAS, recognizing the symptoms of strokes and acting immediately to get medical attention can save lives and limit disabilities.

NOW, THEREFORE, BE IT RESOLVED that the Laguna Woods City Council does hereby proclaim May 2016 as “Stroke Awareness Month” in the City of Laguna Woods and encourages residents to learn the warning signs and symptoms of strokes.

Dated this 18th day of May, 2016

______Noel Hatch Attest: Yolie Trippy Mayor Deputy City Clerk

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4.7 PROCLAMATION – WATER AWARENESS MONTH – MAY 2016

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ITEM 4.7

Proclamation City of Laguna Woods Water Awareness Month May 2016

WHEREAS, access to adequate and reliable water supply sources is vital to residents’ quality of life and Orange County’s thriving economy; and

WHEREAS, the state of California is currently experiencing one of the most severe droughts on record with unprecedented actions necessary to protect its water resources; and

WHEREAS, on April 1, 2015, Governor Brown ordered mandatory reductions of water usage by 25 percent in cities across the state of California, and recently issued an executive order titled “Making Water Conservation a California Way of Life”; and

WHEREAS, the El Toro Water District provides water services for Laguna Woods; and

WHEREAS, the El Toro Water District is committed to educating residents within its service area about the severity of the drought and advantageous water conservation methods; and

WHEREAS, the El Toro Water District has completed a Recycled Water Expansion Project, including construction of a tertiary treatment plant located within the city of Laguna Woods that will significantly increase the amount of recycled water produced for local use; and

WHEREAS, the El Toro Water District offers a variety of residential and commercial rebate programs in support of indoor and outdoor water savings; and

WHEREAS, working together as a community to promote efficient water use and conservation habits helps to ensure that Laguna Woods will have water supplies for years to come.

NOW, THEREFORE, BE IT RESOLVED that the Laguna Woods City Council does hereby proclaim May 2016 as “Water Awareness Month” in the City of Laguna Woods and encourages residents and businesses to support the El Toro Water District in its conservation efforts.

Dated this 18th day of May, 2016

______Noel Hatch Attest: Yolie Trippy Mayor Deputy City Clerk

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6.1-6.8 CONSENT CALENDAR SUMMARY

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City of Laguna Woods Agenda Report

TO: Honorable Mayor and City Councilmembers

FROM: Christopher Macon, City Manager

FOR: May 18, 2016 Regular Meeting

SUBJECT: Consent Calendar Summary

Recommendation

Approve all proposed actions on the May 18, 2016 Consent Calendar by single motion and City Council action.

Background

All items listed on the Consent Calendar are considered routine and will be enacted by one vote. There will be no separate discussion of these items unless a member of the City Council, staff, or the public requests that specific items be removed from the Consent Calendar for separate discussion and consideration of action.

Summary

The May 18, 2016 Consent Calendar contains the following items:

6.1 Approval of the City Council meeting minutes for the regular meeting on April 20, 2016 (Attachment A) and the adjourned regular meeting on April 27, 2016 (Attachment B).

6.2 Approval of a motion to receive and file the City Treasurer’s Report for the month of April 2016.

CC  05-18-2016 RM Consent Calendar Summary – AR Page 1 of 3

ITEMS 6.1 – 6.8

6.3 Approval of the warrant register dated May 18, 2016 in the amount of $574,439.92. A list of warrants is included in the agenda packet; detailed information about individual warrants is available at City Hall.

6.4 Approval of a resolution establishing a compensation schedule and benefits for City employees. The proposed resolution would modify the existing cafeteria benefits plan to ensure compliance with federal law and promote administrative efficiency, allow full-time positions to be filled on a part-time basis, limit cafeteria plan benefits to only employees who regularly work 40 hours per week, differentiate between CalPERS-eligible and ineligible part- time employee classes, and incorporate the provisions of recent changes in State law that require the City to provide all employees with sick leave.

AND

Approval of a resolution approving a cafeteria plan (Internal Revenue Code Section 125 Flexible Benefits Plan), including a health flexible spending account and dependent care flexible spending account, for employees; approving and authorizing the execution of an agreement for ongoing administration of the cafeteria plan; and, taking other actions related to the establishment, operation, and maintenance of the cafeteria plan. The proposed action would ensure that the cafeteria plan complies with federal law and also limit authorized uses to promote administrative efficiency. BusinessPlans, Incorporated – myCafeteriaPlan is proposed to replace Wage Works as the ongoing plan administration provider. myCafeteriaPlan was selected after considering multiple providers and factors such as experience, the availability of well-developed online services, and cost. If approved, the modified cafeteria plan would become effective on July 1, 2016.

6.5 Approval of an agreement with the County of Orange for law enforcement services and authorization for the Mayor to execute the agreement, subject to approval as to form by the City Attorney. The proposed agreement includes a comparable level of service to the current fiscal year, at an annual cost of $2,592,120 (an increase of approximately 8.81% for ongoing services). The increase is largely attributable to salary and benefit increases negotiated and approved by the Orange County Board of Supervisors, as well as overtime increases calculated using a new methodology and assumption of hours.

Consent Calendar Summary – AR Page 2 of 3 CC  05-18-2016 RM

ITEMS 6.1 – 6.8

6.6 Approval of an extension of the agreement with PV Maintenance, Inc. for street maintenance services and authorization for the City Manager to execute the extension, subject to approval as to form by the City Attorney. The proposed extension is for a one-year period through June 30, 2017, as provided for in the existing agreement.

6.7 Adoption of an agency service plan for the Senior Mobility Program and authorization for the City Manager to execute and submit the agency service plan to the Orange County Transportation Authority. The City Council is required to adopt an agency service plan as a condition of receiving Senior Mobility Program (SMP) funds. The City uses SMP funds to subsidize general travel (“taxi voucher”), non-emergency medical, and Irvine Station taxi transportation costs for residents. The proposed agency service plan describes the City’s existing level of SMP service.

6.8 [1] Approval of final plans and specifications reflecting completion of the Santa Maria Avenue Bioswale Project, as recommended by the City Engineer (available for review at City Hall); [2] acceptance of project completion of the contract agreement with STL Landscape, Inc. for the Santa Maria Avenue Bioswale Project; [3] release of contract retention in the amount of $2,400 withheld per California Government Code 35 days following recordation of the Notice of Completion with the County of Orange; and, [4] exoneration of project posted bonds 35 days following recordation of the Notice of Completion with the County of Orange. The Santa Maria Avenue Bioswale Project is included in the City’s Capital Improvement Program.

CC  05-18-2016 RM Consent Calendar Summary – AR Page 3 of 3

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6.1 CITY COUNCIL MINUTES

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CITY OF LAGUNA WOODS CALIFORNIA CITY COUNCIL MINUTES REGULAR MEETING April 20, 2016 2:00 P.M. Laguna Woods Village Community Center Board Room 24351 El Toro Road Laguna Woods, California 92637

I. CALL TO ORDER

Mayor Hatch called the Regular Meeting of the City Council of the City of Laguna Woods to order at 2:00 p.m.

II. ROLL CALL

COUNCILMEMBER: PRESENT: Conners, Hack, Moore, Horne, Hatch ABSENT: -

STAFF PRESENT: City Manager Macon, City Attorney Cosgrove, Assistant City Manager Reilly, Administrative Services Director/City Treasurer Cady, Deputy City Clerk Trippy

III. PLEDGE OF ALLEGIANCE

Mayor Pro Tem Horne led the flag salute.

IV. PRESENTATIONS AND CEREMONIAL MATTERS

4.1 Camera Club of Laguna Hills – 50th Anniversary

Mark Rabinowitch, Mac McNamar, and Joel Goldstein, Camera Club of Laguna Hills, provided comments.

4.2 Laguna Woods Art Association – 50th Anniversary

Jim Gibson, Docia Reed, and Al Steinberg, Laguna Woods Art Association, provided comments.

4.3 National Donate Life Month – April 2016

Dick Vale, OneLegacy, provided comments.

Councilmembers commented on the proclamation.

April 20, 2016 1 City Council Regular Meeting Minutes

ITEM 6.1 – Attachment A

4.4 Environmental Awareness Week – April 22 – 29, 2016

Councilmembers commented on the proclamation.

V. PUBLIC COMMENT

Juanita Skillman, resident, spoke to building-related issues and encouraged greater local support for businesses.

Councilmembers responded to Ms. Skillman’s comments and staff answered related questions.

Ms. Skillman expressed her concern for the type of chemical that the Orange County Mosquito and Vector Control District uses to eradicate mosquitos.

Councilmembers responded to Ms. Skillman’s comments.

VI. CONSENT CALENDAR

City Manager Macon requested to pull item 6.4 to make minor modifications.

Moved by Councilmember Hack, seconded by Councilmember Conners, and carried unanimously on a 5-0 vote, to approve Consent Calendar items 6.1–6.3 and 6.5–6.6.

6.1 City Council Minutes

Approved the City Council meeting minutes for the regular meeting on March 16, 2016 and the special meeting on March 30, 2016.

6.2 City Treasurer’s Report

Received and filed the City Treasurer’s Report for the third quarter of Fiscal Year 2015-16 (January through March 2016), inclusive of the month of March 2016.

6.3 Warrant Register

Approved the warrant register dated April 20, 2016 in the amount of $451,107.73.

6.5 Information Technology Services

Approved an extension of the agreement with Practical Data Solutions for information technology services and authorized the City Manager to execute the extension, subject to approval as to form by the City Attorney.

6.6 As Needed Waste Management Consulting Services

April 20, 2016 2 City Council Regular Meeting Minutes

ITEM 6.1 – Attachment A

Approved an extension of the agreement with Michael Balliet for as needed waste management consulting services and authorized the City Manager to execute the extension, subject to approval as to form by the City Attorney.

Regarding Item 6.4, City Manager Macon stated that section 21 of page 4 of Exhibit A of the agreement should read, “prohibit the use of taxi bucks or vouchers for trips to specific addresses” instead of “prohibit trips to specific addresses” and “CONSULTANT’s drivers shall not provide Senior Mobility Program (SMP) transportation to prohibited addresses” instead of “CONSULTANT’s drivers shall not provide transportation to prohibited addresses”.

Moved by Councilmember Hack, seconded by Councilmember Moore, and carried unanimously on a 5-0 vote, to approve Consent Calendar Item 6.4 with the modifications proposed by the City Manager.

6.4 Senior Mobility Transportation Services

Approved an agreement with Cabco Yellow, Inc. doing business as California Yellow Cab for senior mobility transportation services, and authorized the City Manager to execute the agreement, subject to approval as to form by the City Attorney.

VII. PUBLIC HEARINGS

7.1 Building and Planning Services Fees

City Manager Macon introduced the item and made a presentation.

Terry Madsen, ClearSource Financial, provided an overview of the methodology used in the Building and Planning Services Fee Study and its findings and recommendations.

Councilmembers discussed the item and staff answered related questions.

Mayor Hatch opened the public hearing.

There being no requests to speak, the public hearing was closed.

City Manager Macon noted that the third “whereas” in the resolution would be corrected to read April 20, 2016, instead of April 16, 2016.

Moved by Councilmember Hack, seconded by Councilmember Moore, and carried unanimously on a 5-0 vote, to approve a resolution entitled:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA, ADOPTING NEW AND INCREASED OR MODIFIED BUILDING AND PLANNING SERVICES FEES

April 20, 2016 3 City Council Regular Meeting Minutes

ITEM 6.1 – Attachment A

VIII. CITY COUNCIL BUSINESS

8.1 Fiscal Year 2015-16 Budget Update

City Manager Macon stated that this item would be discussed at the next adjourned regular meeting on April 27, 2016.

8.2 City Hall Building Maintenance and Reconfiguration

City Manager Macon summarized the agenda report and made a presentation.

Councilmembers discussed the item and staff answered related questions.

8.3 United Nations General Assembly Convention on the Elimination of All Forms of Discrimination Against Women (agendized by Mayor Pro Tem Horne and Councilmember Conners)

Mayor Hatch introduced the item.

Mayor Pro Tem Horne and Councilmember Conners made a presentation.

The following individuals spoke to express their support for the proposed resolution:

1. Rupsi Burman, Chair of the Orange County Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) Task Force 2. Zoe Nicolson, Newport Beach resident 3. Fariba Boghraty, Irvine resident 4. Anita Coleman, member of the public

Councilmembers discussed the item and staff answered related questions.

Moved by Mayor Pro Tem Horne, seconded by Councilmember Moore, and carried unanimously on a 5-0 vote, to approve a resolution entitled:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA, SUPPORTING THE UNITED NATIONS GENERAL ASSEMBLY CONVENTION ON THE ELIMINATION OF ALL FORMS OF DISCRIMINATION AGAINST WOMEN

Mayor Hatch called for a brief recess.

The meeting was called back to order at 4:10 p.m.

IX. CITY COUNCIL REPORTS AND COMMENTS

April 20, 2016 4 City Council Regular Meeting Minutes

ITEM 6.1 – Attachment A

9.1 Coastal Greenbelt Authority

Councilmember Conners stated that there had been no meeting since the last meeting.

9.2 Orange County Fire Authority

Mayor Hatch provided a report.

9.3 Orange County Library Advisory Board

Councilmember Moore stated that there had been no meeting since the last meeting.

9.4 Orange County Mosquito and Vector Control District

Mayor Pro Tem Horne provided a report.

9.5 San Joaquin Hills Transportation Corridor Agency

Councilmember Hack provided a report.

Councilmembers commented on the report.

9.6 South Orange County Watershed Management Area

Councilmember Moore provided a report.

Councilmembers commented on the report.

9.7 Other Comments and Reports

Councilmember Moore left the dais at 4:25 p.m. and returned for closed session.

Mayor Hatch noted that the meeting will be adjourned in the memory of Dorothea Hale, a long-time City Hall volunteer who passed away on April 19, 2016.

Mayor Pro Tem Horne reported on a Senior Citizens Advisory Committee meeting.

X. CLOSED SESSION

City Attorney Cosgrove noted that only one case would be discussed in closed session, instead of the two listed on the agenda.

10.1 The City Council met in closed session under the authority of California Government Code sections 54956.9(d)(2) and (e)(1) to discuss potential exposure to litigation in one case.

April 20, 2016 5 City Council Regular Meeting Minutes

ITEM 6.1 – Attachment A

XI. CLOSED SESSION REPORT

The City Council reconvened in open session at 4:46 p.m. City Attorney Cosgrove stated that there was no reportable action under Government Code Section 54957.1.

XII. ADJOURNMENT

The meeting was adjourned in the memory of Dorothea Hale, a long-time City Hall volunteer, at 4:46 p.m. The next adjourned regular meeting will be at 2:00 p.m. on Wednesday, April 27, 2016 at Laguna Woods Village Community Center Board Room, 24351 El Toro Road, Laguna Woods, CA 92637.

______YOLIE TRIPPY, Deputy City Clerk

Adopted: May 18, 2016

______NOEL HATCH, Mayor

April 20, 2016 6 City Council Regular Meeting Minutes

ITEM 6.1 – Attachment B

CITY OF LAGUNA WOODS CALIFORNIA CITY COUNCIL MINUTES ADJOURNED REGULAR MEETING April 27, 2016 2:00 P.M. Laguna Woods Village Community Center Board Room 24351 El Toro Road Laguna Woods, California 92637

I. CALL TO ORDER

Mayor Pro Tem Horne called the Adjourned Regular Meeting of the City Council of the City of Laguna Woods to order at 2:00 p.m.

II. ROLL CALL

COUNCILMEMBER: PRESENT: Conners, Hack, Moore, Horne ABSENT: Hatch

STAFF PRESENT: City Manager Macon, Assistant City Attorney Patterson, Deputy City Clerk Trippy

III. PLEDGE OF ALLEGIANCE

Councilmember Hack led the flag salute.

IV. PRESENTATIONS AND CEREMONIAL MATTERS

4.1 Moment of Silence – Holocaust Week of Remembrance – May 1 through 8, 2016

Stuart Hack, resident, provided comments.

Councilmembers made comments.

Mayor Pro Tem Horne called for a moment of silence.

4.2 Deputy Roberto J. Pequeno – Medal for Lifesaving

City Manager Macon provided comments.

Deputy Roberto J. Pequeno provided comments.

Moved by Councilmember Conners, seconded by Councilmember Moore, and carried unanimously on a 4-0 vote, to approve and present the commendation for Deputy Roberto J. Pequeno – Medal for Lifesaving.

April 27, 2016 1 City Council Adjourned Regular Meeting Minutes

ITEM 6.1 – Attachment B

V. PUBLIC COMMENT – None

VI. CONSENT CALENDAR – None

VII. PUBLIC HEARINGS – None

VIII. CITY COUNCIL BUSINESS

8.1 Fiscal Year 2015-16 Budget Update

City Manager Macon made a presentation.

Councilmembers discussed the item and staff answered related questions.

8.2 Fiscal Year 2016-17 Budget and Work Plan Development

City Manager Macon summarized the agenda report and made a presentation.

Councilmembers discussed the item and staff answered related questions.

Moved by Councilmember Moore, seconded by Councilmember Conners, and carried unanimously on a 4-0 vote, to direct staff to prepare the draft Fiscal Year 2016-17 Budget and Work Plan with continued use of the six existing priority focus areas.

Moved by Councilmember Conners, seconded by Councilmember Hack, and carried unanimously on a 4-0 vote, to direct staff to prepare the draft Fiscal Year 2016-17 Budget and Work Plan assuming consolidation of the Expanded Payment Options Pilot Program and Financial Software Replacement Project.

Moved by Councilmember Conners, seconded by Councilmember Moore, and carried unanimously on a 4-0 vote, to direct staff to prepare the draft Fiscal Year 2016-17 Budget and Work Plan without the invasive Plant Species Regulations Project due to unanticipated complications caused by changes in State law.

Moved by Councilmember Hack, seconded by Councilmember Conners, and carried unanimously on a 4-0 vote, to direct staff to include an Emergency Operations Plan Update in the draft Fiscal Year 2016-17 Budget and Work Plan.

IX. CITY COUNCIL REPORTS AND COMMENTS

9.1 Coastal Greenbelt Authority

Councilmember Conners stated that there had been no meeting since the last meeting. She discussed the upcoming meeting in May.

April 27, 2016 2 City Council Adjourned Regular Meeting Minutes

ITEM 6.1 – Attachment B

9.2 Orange County Fire Authority

There was no report given due to Mayor Hatch’s absence.

9.3 Orange County Library Advisory Board

Councilmember Moore stated that there had been no meeting since the last meeting.

9.4 Orange County Mosquito and Vector Control District

Mayor Pro Tem Horne provided a report.

9.5 San Joaquin Hills Transportation Corridor Agency

Councilmember Hack stated that there had been no meeting since the last meeting.

9.6 South Orange County Watershed Management Area

Councilmember Moore provided a report.

9.7 Other Comments and Reports

Mayor Pro Tem Horne reported on a Senior Citizens Advisory Committee meeting. She encouraged the community to attend the upcoming Senior Summit event.

Councilmember Conners reported on OC Waste & Recycling’s landfill importation.

X. CLOSED SESSION – None

XI. CLOSED SESSION REPORT – None

XII. ADJOURNMENT

The meeting was adjourned at 3:40 p.m. The next regular meeting will be at 2:00 p.m. on Wednesday, May 18, 2016 at Laguna Woods Village Community Center Board Room, 24351 El Toro Road, Laguna Woods, CA 92637.

______YOLIE TRIPPY, Deputy City Clerk

Adopted: May 18, 2016

______NOEL HATCH, Mayor

April 27, 2016 3 City Council Adjourned Regular Meeting Minutes

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6.2 CITY TREASURER’S REPORT

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6.3 WARRANT REGISTER

This page is intentionally blank. CITY OF LAGUNA WOODS WARRANT REGISTER ITEM 6.3 5/18/2016

Number Date Vendor Name Description Amount

Automatic Bank Debits Debit 4/15/2016 ADP PAYROLL SERVICES Payroll / Pay Period Ended 4/15/2016 $28,376.23 Debit 4/15/2016 CALPERS - RETIREMENT Retirement Contributions / Pay Period Ended 4/15/2016 2,380.84 Debit 4/29/2016 ADP PAYROLL SERVICES Payroll Processing Fees / Pay Period Ended 4/15/2016 145.97 Debit 4/28/2016 COUNTY OF ORANGE Law Enforcement Services / April 2016 203,809.20 Debit 5/01/2016 CALPERS - HEALTH Employee Benefit Program / May 2016 3,123.76 Debit 5/01/2016 CALPERS - GASB68 Annual GASB68 Reporting Services Fee 1,300.00 Debit 4/29/2016 ADP PAYROLL SERVICES Payroll / Pay Period Ended 4/29/2016 65,441.34 Debit 4/29/2016 CALPERS - RETIREMENT Retirement Contributions / Pay Period Ended 4/29/2016 2,380.84 Debit 5/13/2016 ADP PAYROLL SERVICES Payroll Processing Fees / Pay Period Ended 4/29/2016 153.39

Warrants: 117833 04/13/2016 BALLIET, MICHAEL Waste & Recycling Consulting Services / December 2015 - April 2016 13,833.75 117834 04/13/2016 AT&T White Pages / April 2016 4.53 117835 04/13/2016 IRWIN B BORNSTEIN, CPA Financial Consulting Services / March 2016 2,486.25 117836 04/13/2016 CAA Water Quality Consulting Services / March 2016 3,009.00 117837 04/13/2016 MARGARET CADY Reimbursement - CalCPA Membership Dues & Professional Development 931.00 117838 04/13/2016 CORE COMMUNICATIONS GROUP CUP-986 / Refund of Permit Deposit 164.40 117839 04/13/2016 DICKINSON ELECTRIC Electrician Services / City Hall 360.00 117839 04/13/2016 DICKINSON ELECTRIC Maintenance Services / City Hall 350.26 117840 04/13/2016 GOLDEN STATE OVERNIGHT Courier Services / March 2016 13.71 117841 04/13/2016 WILLIAM GRIFFIN Public Safety & CDBG Consulting Services / January - February 2016 2,756.00 117842 04/13/2016 KONE, INC. City Hall Elevator Maintenance / April 2016 245.58 117843 04/13/2016 KONICA MINOLTA BUSINESS Copier Services / 1st Quarter 2016 279.41 117844 04/13/2016 ONISKO & SCHOLZ, LLP Accounting Services / March 2016 7,450.00 117845 04/13/2016 ORANGE COAST PLUMBING City Hall Maintenance Services 422.75 117846 04/13/2016 ORANGE COUNTY REGISTER-NOTICES Public Notices / March 2016 150.00 117847 04/13/2016 ANTONIA PACE Taxi Voucher Refund 25.00 117848 04/13/2016 DOROTHY PARIDON Taxi Voucher Refund 50.00 117849 04/13/2016 SOUTHERN CALIFORNIA EDISON Irrigation Controllers / March 2016 26.51 117850 04/13/2016 SOUTHERN CALIFORNIA EDISON Right of Way / March 2016 2,156.01 117851 04/13/2016 SOUTHERN CALIFORNIA WATER COMMITTEE Southern California Water Committee Quarterly Meeting / Hack 70.00 117852 04/13/2016 TALIMAR SYSTEMS, INC. Temporary Workstations / Two Months Rental - Remaining Balance Due 1,442.00 117853 04/13/2016 MEYER TAYLOR Taxi Voucher Refund 25.00 117854 04/13/2016 THE GAS COMPANY City Hall Utilities / March 2016 38.81 117855 04/13/2016 GLENDOR TREVOR Partial Building Permit Refund 36.00 117856 04/20/2016 AC ALMOND Waste Diversion Deposit Refund 2,700.00 117857 04/20/2016 ANDERSONPENNA PARTNERS, INC. Landscape Inspection Services / March 2016 4,371.75 117858 04/20/2016 RONALD ARNONE Waste Diversion Deposit Refund 250.00

1 of 4 CITY OF LAGUNA WOODS WARRANT REGISTER ITEM 6.3 5/18/2016

Number Date Vendor Name Description Amount

117859 04/20/2016 AT&T Telephone / 452-0600 / March 2016 797.54 117860 04/20/2016 AT&T Telephone / 581-3974 / April 2016 104.57 117861 04/20/2016 AT&T Telephone / 583-1105 / April 2016 18.16 117862 04/20/2016 CALEB CONSTRUCTION Waste Diversion Deposit Refund 250.00 117863 04/20/2016 CITY OF LAGUNA BEACH Animal Control & Shelter Services / April 2016 8,156.25 117864 04/20/2016 CIVIL SOURCE Building Inspection Services / February 2016 32,440.00 117865 04/20/2016 COPYFORCE Printing Services - Business Cards / City Hall 48.60 117866 04/20/2016 CSG CONSULTANTS, INC. Plan Check Services / February 2016 2,167.50 117867 04/20/2016 D&G RHODES CONSTRUCTION Waste Diversion Deposit Refund 250.00 117868 04/20/2016 GERTRUDE FRANKE Taxi Voucher Refund 50.00 117869 04/20/2016 JEFFREY HILLMAN Waste Diversion Deposit Refund 250.00 117870 04/20/2016 ICMA RETIREMENT CORPORATION Quarterly Plan Fee / April - June 2016 125.00 117871 04/20/2016 DONALD JAMES HILLS Taxi Voucher Refund 25.00 117872 04/20/2016 LILLEY PLANNING GROUP Building Official Services / March 2016 2,418.00 117873 04/20/2016 MICHAEL BAKER INTERNATIONAL Planning Services / February - March 2016 1,125.00 117874 04/20/2016 NIEVES LANDSCAPE, INC. Landscape Maintenance Services 215.00 117874 04/20/2016 NIEVES LANDSCAPE, INC. Right of Way Landscape Maintenance / April 2016 10,725.41 117875 04/20/2016 ONE WAY CONSTRUCTION Waste Diversion Deposit Refund 250.00 117876 04/20/2016 DOLORES PIPER Taxi Voucher Refund 80.00 117877 04/20/2016 PV MAINTENANCE, INC. Street Maintenance Services / February 2016 11,666.89 117878 04/20/2016 FRAN ROGERS Taxi Voucher Refund 25.00 117879 04/20/2016 SADDLEBACK WINDOWS AND DOORS CDBG Energy Efficiency Improvement Program / FY 2015-16 2,394.00 117880 04/20/2016 STAPLES General Office Supplies 449.11 117881 04/20/2016 TEAM ONE MANAGEMENT City Hall and Shredding Event Janitorial Service / February - March 2016 675.00 117882 04/20/2016 WL MCFADDEN CONSTRUCTION, INC. Waste Diversion Deposit Refund 1,650.00 117883 04/20/2016 WM CURBSIDE, LLC HHW / E-Waste Collection & Sharps Program / March 2016 3,035.42 117884 04/27/2016 CALIFORNIA YELLOW CAB Taxi Voucher Services / March 2016 14,759.00 117885 04/27/2016 CIVIL SOURCE Traffic Signal Synchronization Project - Moulton / September - December 2015 42,910.03 117885 04/27/2016 CIVIL SOURCE Traffic Signal Synchronization Project - El Toro / September - December 2015 39,382.97 117886 04/27/2016 CLEARSOURCE FINANCIAL CONSULTING Central Service Cost Allocation Plan & Building & Planning Services Fee Study 4,650.00 117887 04/27/2016 COUNTY OF ORANGE Automated Fingerprint ID System / April 2016 440.75 117888 04/27/2016 COUNTY OF ORANGE 800MHz Communication Charges / April - June 2016 361.00 117888 04/27/2016 COUNTY OF ORANGE Communication Charges - 800 MHz Flat Rate / January - March 2016 384.00 117889 04/27/2016 CORINNE CUNNINGHAM Taxi Voucher Refund 25.00 117890 04/27/2016 DELTA DENTAL OF CALIFORNIA Employee Benefits Program / May 2016 293.37 117891 04/27/2016 EL TORO WATER DISTRICT Landscape Irrigation / February 2016 3,664.74 117892 04/27/2016 EL TORO WATER DISTRICT Landscape Irrigation / March 2016 4,347.09 117893 04/27/2016 EL TORO WATER DISTRICT Fire Code Requirement - Backflow - City Hall / April 2016 28.00 117894 04/27/2016 EL TORO WATER DISTRICT City Hall Water & Sewer Services / April 2016 124.34 117895 04/27/2016 MICHAEL ESPOSITO Taxi Voucher Refund 25.00

2 of 4 CITY OF LAGUNA WOODS WARRANT REGISTER ITEM 6.3 5/18/2016

Number Date Vendor Name Description Amount

117896 04/27/2016 GOLDEN RAIN FOUNDATION SP-818, GP-916, CUP-1071 / Refund of Permit Deposit Balances 3,605.65 117897 04/27/2016 GOLDEN STATE OVERNIGHT Courier Services / April 2016 20.63 117898 04/27/2016 HDL COREN & CONE Property Tax Consulting Services 2,100.00 117899 04/27/2016 ROBERT KNODE Taxi Voucher Refund 24.00 117900 04/27/2016 MANAGED HEALTH NETWORK Employee Benefits Program / May 2016 12.54 117901 04/27/2016 MUNICIPAL CODE CORP Code of Ordinances - Annual Web Hosting Fee / April 2016 - March 2017 500.00 117902 04/27/2016 PRINCIPAL FINANCIAL GROUP Long-Term Disability Insurance / May 2016 323.59 117903 04/27/2016 SIAVASH SOHEILI Taxi Voucher Refund 50.00 117904 04/27/2016 SOUTHERN CALIFORNIA EDISON Irrigation Controllers / April 2016 109.81 117905 04/27/2016 TEAM ONE MANAGEMENT Janitorial Services / February 2016 951.66 117906 04/27/2016 VETERAN ED'S, INC. City Hall Kitchen Asbestos Abatement Work 4,094.33 117906 04/27/2016 VETERAN ED'S, INC. City Hall Second Floor Investigation and Removal Work 3,158.02 117907 04/27/2016 VISION SERVICE PLAN OF AMERICA Employee Benefits Program / May 2016 120.18 117908 04/27/2016 WAGE WORKS 125 Cafeteria Plan / March 2016 150.00 117909 04/27/2016 RICHARD WATTS Taxi Voucher Refund 15.00 117910 05/04/2016 ALISO CREEK PRINTING Reissued Payment / Printing Services - City Letterhead 97.20 117911 05/04/2016 AT&T Telephone / 458-3487 / April 2016 34.90 117912 05/04/2016 AT&T Telephone / 452-0600 / April 2016 817.80 117913 05/04/2016 AT&T Telephone / 639-0500 / April 2016 204.62 117914 05/04/2016 AT&T Telephone / 770-9359 / April 2016 18.59 117915 05/04/2016 BRANDON CHAE Waste Diversion Deposit Refund 250.00 117916 05/04/2016 CYNTHIA CONNERS Auto Allowance / May 2016 300.00 117917 05/04/2016 LOIS CURRAN Taxi Voucher Refund 25.00 117918 05/04/2016 ROSE DUNSMORE Taxi Voucher Refund 25.00 117919 05/04/2016 FINELINE FOUNDATION TO FINISH, INC. Waste Diversion Deposit Refund 900.00 117920 05/04/2016 HACK, BERT Auto Allowance / May 2016 300.00 117921 05/04/2016 ROBERT NOEL HATCH Auto Allowance / May 2016 300.00 117922 05/04/2016 SHARI HORNE Auto Allowance / May 2016 300.00 117923 05/04/2016 SUSAN HUGHES Taxi Voucher Refund 37.00 117924 05/04/2016 LIFESTYLES BY PATIO MASTERS Cancelled Permit Refund 128.45 117925 05/04/2016 CLEO LISLE Taxi Voucher Refund 50.00 117926 05/04/2016 MUNICIPAL CODE CORP Codification of City Ordinances 571.98 117927 05/04/2016 NIEVES LANDSCAPE, INC. City Hall Landscape Maintenance / May 2016 325.00 117928 05/04/2016 ONISKO & SCHOLZ, LLP Accounting Services / April 2016 10,066.00 117929 05/04/2016 ORKIN Pest Control Services / April 2016 105.01 117930 05/04/2016 PRACTICAL DATA SOLUTIONS IT Services / April 2016 1,300.00 117931 05/04/2016 SONITROL City Hall Fire Alarm Monitoring / May 2016 64.38 117932 05/04/2016 SOUTHERN CALIFORNIA EDISON City Hall Utilities / April 2016 1,298.96 117933 05/04/2016 STAPLES General Office Supplies 97.55 Total Bank Debits and Warrants: $574,398.88

3 of 4 CITY OF LAGUNA WOODS WARRANT REGISTER ITEM 6.3 5/18/2016

Number Date Vendor Name Description Amount

Credit Card Statement Detail / March 6 - April 5, 2016 No Credit Card Transactions During This Time Period Total Credit Cards: -

Petty Cash Expenditure Detail Dollar Tree Store Annual Volunteer Luncheon 4-13-16 / Supplies 4.32 COSTCO Annual Volunteer Luncheon 4-13-16 / Food 29.98 Stater Bros Goods Exchange Event 4-16-16 / Water 6.74 41.04

TOTAL $574,439.92

4 of 4

6.4 EMPLOYEE COMPENSATION AND BENEFITS

This page is intentionally blank. ITEM 6.4 – Attachment A

RESOLUTION NO. 16-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA, ESTABLISHING A COMPENSATION SCHEDULE AND BENEFITS FOR CITY EMPLOYEES

THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. Effective May 18, 2016, Resolution No. 16-05 is hereby repealed and replaced by this resolution.

SECTION 2. Effective January 20, 2016, the compensation schedule for City employees is established as follows:

Exempt Full-Time Employees (Annual Equivalent)

City Manager per agreement

Assistant City Manager $98,020 – $137,228

Administrative Services Director/ City Treasurer $98,020 – $137,228

Senior Management Analyst $71,232 – $99,720

Management Analyst $63,372 – $88,716

Deputy City Clerk $51,948 – $72,727

Non-Exempt Full-Time Employees (Hourly Rate)

Senior Accountant $32.48 – $45.47

Administrative Coordinator $22.40 – $31.36

Accounting Clerk $18.93 – $26.50

R 16-XX 1 XX-XX-2016 ITEM 6.4 – Attachment A

The City Manager is authorized to hire, promote, and compensate employees within established compensation ranges, and to fill any full-time position as a part-time position, consistent with City Council-adopted budgets and this resolution.

SECTION 3. All employees who work 40 or more hours per week on a regularly assigned basis shall be considered “full-time employees” for the purpose of this resolution. Full-time employees shall receive the following benefits:

A. Paid Holidays: The City shall observe the following holidays with full-time employees receiving compensation for hours that would otherwise regularly be worked: New Year’s Day, Martin Luther King’s Birthday, President’s Day, Memorial Day, Independence Day, Labor Day, Veteran’s Day, Thanksgiving, Friday after Thanksgiving, and December Holiday (December 24 through January 1). Except for December Holiday, which is observed on specified dates, when a holiday falls on a Saturday, it shall be observed the prior Friday; when a holiday falls on a Sunday, it shall be observed the following Monday.

B. Retirement: All City employees, including full-time and part-time employees, are required to participate in the Social Security system. In addition, the City shall contract with the California Public Employees’ Retirement System (CalPERS) for retirement benefits for all eligible full-time employees. Full- time employees considered “classic” by CalPERS shall pay the 7% employee contribution pursuant to the terms of Resolution No. 12-18. Full-time employees considered “new members” by CalPERS shall pay the employee contribution rate established by CalPERS, as may change from time to time.

C. Disability Insurance: The City shall contract for the provision of a long-term disability insurance program at no cost to employees, which shall provide full- time employees 60% of applicable salary amounts.

D. Retiree Medical: As required by, and in an amount established by California Government Code Section 22892, the City shall contribute toward CalPERS retiree health insurance for retiring full-time employees who have worked for the City for a minimum of 10 years. Part-time service for employees who transition from part-time to full-time employment with the City may be used to meet the 10 year requirement, with each 174 hours counting as one month.

E. Monthly Benefit Allowance: The City shall provide each full-time employee with a monthly benefit allowance of $1,000 per month. A portion of the allowance shall be allocated to pay for the employee assistance program and

R 16-XX 2 XX-XX-2016 ITEM 6.4 – Attachment A

health insurance, as provided in this resolution. The remaining balance of the monthly benefit allowance may be allocated by the employee to (1) elect benefits available through the City’s Section 125 Flexible Benefits Plan, in accordance with applicable plan documents; (2) make contributions to an ICMA-RC 457 Deferred Compensation Plan, in accordance with applicable plan documents; or, (3) purchase additional paid time off as provided in Subsection J of Section 3 of this resolution. Any amount of the monthly benefit allowance that remains after the allocations described above shall be forfeited. Full-time employees shall be required to make elections for the annual calendar year use of the entirety of monthly benefit allowances during an enrollment/election period established by the City Manager, as may change from time to time. Modifications of annual calendar year elections following any enrollment/election period shall be limited to qualifying events as set forth in applicable plan documents.

F. Employee Assistance Program: The City shall contract for an employee assistance program; enrollment in the program shall be mandatory for all full- time employees. The cost of enrollment in the employee assistance program shall be deducted from each full-time employee’s monthly benefit allowance.

G. Health Insurance: All employees shall be covered by basic health insurance that qualifies as Minimum Essential Coverage under the Patient Protection and Affordable Care Act. The City shall contract for health insurance through CalPERS; enrollment in a CalPERS health plan shall be mandatory for all full- time employees unless proof of coverage under a qualifying, alternate basic health insurance is provided. The cost of enrollment in a CalPERS health plan shall be deducted from each full-time employee’s monthly benefit allowance.

H. Flexible Benefits Plan: The City shall contract for the provision of an Internal Revenue Code Section 125 Flexible Benefits Plan; enrollment in the plan shall be voluntary for all full-time employees. Full-time employees may contribute to the plan by electing to allocate a portion of their monthly benefit allowance and/or contributing through a salary reduction at their sole expense.

I. Deferred Compensation Plan: The City shall contract for the provision of an Internal Revenue Code Section 457 Deferred Compensation Plan; enrollment in the plan shall be voluntary for all full-time employees. Full-time employees may contribute to the plan by electing to allocate a portion of their monthly benefit allowance and/or contributing through a salary reduction at their sole expense.

R 16-XX 3 XX-XX-2016 ITEM 6.4 – Attachment A

J. Paid Time Off: Full-time employees shall accrue 160 hours per year of annual paid time off (leave), which may be used for doctors’ appointments, personal and family sick time, bereavement leave, jury duty leave, vacation, and personal business. Hours earned are accrued on a pro-rata basis by pay period. Full-time employees may maintain a balance of no more than 480 hours of paid time off and shall be compensated for accrued paid time off in excess of 480 hours as of December 31 of each year following the end of each calendar year. Upon separation from the City, full-time employees shall be compensated for the balance of their accrued paid time off.

Full-time employees may also use their monthly benefit allowance to purchase up to 40 hours per year of additional paid time off. Full-time employees shall be required to make this election for the annual calendar year during an enrollment/election period established by the City Manager, as may change from time to time. Modifications of annual calendar year elections following any enrollment/election period shall be limited to qualifying events as set forth in applicable plan documents. If hours purchased are not used by plan year end, any related unused benefit allowance shall be forfeited.

SECTION 4. All employees who are not full-time employees, but who work 20 or more hours per week on a regularly assigned basis, shall be considered “part- time employees” for the purpose of this resolution. Part-time employees shall receive the following benefits:

A. Paid Holidays: The City shall observe the following holidays with part-time employees receiving compensation for hours that would otherwise regularly be worked: New Year’s Day, Martin Luther King’s Birthday, President’s Day, Memorial Day, Independence Day, Labor Day, Veteran’s Day, Thanksgiving, Friday after Thanksgiving, and December Holiday (December 24 through January 1). Except for December Holiday, which is observed on specified dates, when a holiday falls on a Saturday, it shall be observed the prior Friday; when a holiday falls on a Sunday, it shall be observed the following Monday.

B. Retirement: All City employees, including full-time and part-time employees, are required to participate in the Social Security system. Part-time employees who work 1,000 hours or more in a fiscal year, shall be eligible for membership in CalPERS for retirement benefits. Eligible part-time employees considered “classic” by CalPERS shall pay the 7% employee contribution pursuant to the terms of Resolution No. 12-18. Eligible part-time employees

R 16-XX 4 XX-XX-2016 ITEM 6.4 – Attachment A

considered “new members” by CalPERS shall pay the employee contribution rate established by CalPERS, as may change from time to time.

C. Retiree Medical: As required by, and in an amount established by California Government Code Section 22892, the City shall contribute toward CalPERS retiree health insurance for retiring full-time employees who have worked for the City for a minimum of 10 years. Part-time service for employees who transition from part-time to full-time employment with the City may be used to meet the 10 year requirement, with each 174 hours counting as one month.

D. Employee Assistance Program: The City shall contract for an employee assistance program; enrollment in the program shall be mandatory for all part- time employees. The cost of enrollment in the employee assistance program shall be deducted from each part-time employee’s salary.

E. Health Insurance: All employees shall be covered by basic health insurance that qualifies as Minimum Essential Coverage under the Patient Protection and Affordable Care Act. The City shall contract for health insurance through CalPERS; enrollment in a CalPERS health plan shall be mandatory for all part-time employees whose appointment with the City is intended to last more six months and whose time base is half-time or greater, unless proof of coverage under a qualifying, alternate basic health insurance is provided. The cost of enrollment in a CalPERS health plan shall be deducted from each part- time employee’s salary.

F. Flexible Benefits Plan: The City shall contract for the provision of an Internal Revenue Code Section 125 Flexible Benefits Plan; enrollment in the plan shall be voluntary for all part-time employees. Part-time employees may contribute to the plan by contributing through a salary reduction at their sole expense.

G. Deferred Compensation Plan: The City shall contract for the provision of an Internal Revenue Code Section 457 Deferred Compensation Plan; enrollment in the plan shall be voluntary for all part-time employees. Part-time employees may contribute to the plan by contributing through a salary reduction at their sole expense.

H. Paid Time Off: Part-time employees shall accrue 24 hours per year of annual paid time off (leave), which may be used for personal illness, to care for a sick family member, for preventive care or diagnosis, care or treatment of an existing health condition, or for specified purposes if the part-time employee

R 16-XX 5 XX-XX-2016 ITEM 6.4 – Attachment A

is a victim of domestic violence, sexual assault, or stalking. The full amount of annual paid time off is accrued immediately following the first 90 calendar days of employment for new part-time employees and, thereafter, the full amount of annual paid time off is accrued as of each January 1. There is no accrual or carryover of paid time off between or across calendar years. Upon termination from the City, part-time employees shall not be compensated for the balance of their paid time off. If a part-time employee separates from and is rehired by the City within one year, previously accrued and unused paid time off shall be reinstated.

SECTION 5. All employees who are not full-time employees and who work less than 20 per week on a regularly assigned basis shall be considered “limited part- time employees” for the purpose of this resolution. Limited part-time employees shall receive the following benefits:

A. Paid Time Off: Limited part-time employees shall accrue 24 hours per year of annual paid time off (leave), which may be used for personal illness, to care for a sick family member, for preventive care or diagnosis, care or treatment of an existing health condition, or for specified purposes if the limited part- time employee is a victim of domestic violence, sexual assault, or stalking. The full amount of annual paid time off is accrued immediately following the first 90 calendar days of employment for new limited part-time employees and, thereafter, the full amount of annual paid time off is accrued as of each January 1. There is no accrual or carryover of paid time off between or across calendar years. Upon separation from the City, limited part-time employees shall not be compensated for the balance of their paid time off. If a limited part-time employee separates from and is rehired by the City within one year, previously accrued and unused paid time off shall be reinstated.

SECTION 6. The Deputy City Clerk shall certify to the passage of this resolution.

PASSED, APPROVED AND ADOPTED on this XX day of XX 2016.

______NOEL HATCH, Mayor

R 16-XX 6 XX-XX-2016 ITEM 6.4 – Attachment A

ATTEST:

______YOLIE TRIPPY, Deputy City Clerk

STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF LAGUNA WOODS )

I, YOLIE TRIPPY, Deputy City Clerk of the City of Laguna Woods, do HEREBY CERTIFY that the foregoing Resolution No. 16-XX was duly adopted by the City Council of the City of Laguna Woods at a regular meeting thereof, held on the XX day of XX 2016, by the following vote:

AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS:

______YOLIE TRIPPY, Deputy City Clerk

R 16-XX 7 XX-XX-2016 ITEM 6.4 – Attachment B

RESOLUTION NO. 16-XX

WHEREAS, the City provides full-time employees with a flexible benefit allowance that may be used for certain authorized purposes; and

WHEREAS, the City desires to enter into a new agreement for the ongoing administration of its cafeteria plan, while also making modifications to the cafeteria plan to ensure compliance with federal laws and promote administrative efficiency.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. The City Council hereby approves the agreement with BusinessPlans, Incorporated – myCafeteriaPlan for the ongoing administration of the City’s cafeteria plan attached hereto as Exhibit A, and authorizes the City Manager to execute the same, subject to approval as to form by the City Attorney.

SECTION 2. The City Council hereby approves and adopts the Cafeteria Plan, including a Health Flexible Spending Account and Dependent Care Flexible Spending Account, effective July 1, 2016, attached hereto as Exhibit B.

SECTION 3. The City Council hereby authorizes the City Manager and/or Administrative Services Director/City Treasurer to take any additional actions necessary to follow the processes and procedures established by BusinessPlans, Incorporated to establish, operate, and maintain the City’s cafeteria plan including, without limitation, execution of the Business Associate Agreement attached hereto as Exhibit C, execution of the Certification to City of Laguna Woods Group Health

R 16-XX 1 XX-XX-2016 ITEM 6.4 – Attachment B

Benefit Plan attached hereto as Exhibit D, and execution of other agreements, documents, and certifications as may be necessary or advantageous.

SECTION 4. The Deputy City Clerk shall certify to the passage of this resolution.

PASSED, APPROVED AND ADOPTED on this XX day of XX 2016.

______NOEL HATCH, Mayor

ATTEST:

______YOLIE TRIPPY, Deputy City Clerk

STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF LAGUNA WOODS )

AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS:

______YOLIE TRIPPY, Deputy City Clerk

R 16-XX 2 XX-XX-2016 ITEM 6.4 - Exhibit A to Attachment B

CAFETERIA PLAN SERVICES AGREEMENT

Employer: City of Laguna Woods

Address: 24264 El Toro Road Laguna Woods, CA 92637

Telephone Number: (949) 639-0500

Employer ID Number: 33-0847220

Name of Plan: City of Laguna Woods Cafeteria Plan

Plan Administrator: City of Laguna Woods

Type of Plan: Cafeteria Plan

The Employer hereby applies for the Services indicated below to be furnished by BusinessPlans, Incorporated - myCafeteriaPlan ("BusinessPlans") for the Plan identified above. This Agreement specifies the services BusinessPlans will provide to City of Laguna Woods (referred to as "Company" in this document), and the responsibilities of Company for the ongoing administration of Company's Cafeteria Plan.

 Plan Installation Services  Annual Administration Services for the 2016 and later Plan Years

PLEASE READ CAREFULLY ‐ IMPORTANT INFORMATION

What are the duties of the Plan Administrator? Under federal law, administrators of fringe benefit plans are fiduciaries. A fiduciary occupies a position of trust on behalf of plan participants and beneficiaries. The plan administrator is responsible for determining which employees are eligible to participate in the plan, what benefits are payable, when such benefits are payable, and in what form. The plan administrator must account for contributions to the plan and assure proper funding. Federal laws also require that the plan administrator maintain appropriate records and make various reports to participants and government agencies.

The basic purpose of a plan administrator is to assure that participants and beneficiaries receive what they are entitled to under the terms of the plan. In general, the plan administrator must see that the terms of the plan are carried out for the exclusive benefit of participants and beneficiaries. Anyone who is designated as a plan administrator should become knowledgeable of the duties and obligations which the law imposes.

Who is the Plan Administrator? BusinessPlans is not the plan administrator. BusinessPlans, by the terms of this Agreement, will provide support services to the plan administrator. However, the support services provided by BusinessPlans do not make BusinessPlans the plan administrator. Company and other persons or organizations designated as fiduciaries in the plan are responsible for carrying out the duties of the plan administrator.  Page 2 March 17, 2016

DESCRIPTION OF SERVICES

I. Plan Installation Services

BusinessPlans will assist Company with the design and production of the following documents: 1) Board of Directors resolution adopting the plan 1) Plan Document 2) Summary Plan Description 3) Supporting Forms including enrollment and change forms

NOTE: The actual preparation of these documents will be done by BusinessPlans using proprietary software of Relius (SunGard Corbel LLC) located at 1660 Prudential Drive, Jacksonville, FL 32207. By providing these services BusinessPlans is not engaged in the practice of law. While each document is customized to meet individual client needs, the terminology used is standard to all documents. Additional customization may require additional fees. If substantial changes are made to the document, Company will be responsible to acquire an opinion letter (if desired) from their own legal representatives. Company assumes all responsibility for the accuracy of these documents. In the event changes to or the enactment of new federal laws or regulations require revisions to the existing plan documents or entirely new plan documents, BusinessPlans will assist Company upon request in procuring revised or new plan documents and in completing any amended or new agreement as necessary.

II. Annual Administration Services

Administrative Services Provided by BusinessPlans

1) Generate employee reimbursements on a weekly basis. 1) Give each participant a Statement of Account with each reimbursement. 2) Supply Company with sample forms for enrollment, participant terminations, change of status, and other forms as necessary. 3) Provide or make available to Company monthly reports showing participation in the Plan including:  Year to Date Summaries  Check Registers  Unsubstantiated Claim Reports 4) Use reasonable care to guard against fraudulent or erroneous claims. However, BusinessPlans shall be entitled to rely upon information submitted by plan participants. BusinessPlans will inform Company of any material errors, fraud and/or illegal acts that come to its attention. 5) Supply check stock for payment of claims. 6) Adjudicate and pay all claims as appropriate. 7) Generate and distribute necessary participant communications such as denial letters and receipt requests. 8) Generate and email employee account status letters 6-8 weeks before end of plan year.  Page 3 March 17, 2016

9) Work with Company during the reenrollment period to ensure timely processing. 10) Provide customer service representatives (“CSRs”) to assist plan participants. CSRs will be available by phone, fax, or email during regular business hours (8am to 8pm EST). 11) Provide nondiscrimination testing upon request from Company. These Cafeteria Plan tests include:  Key Employee Concentration Test  5% Owner Concentration Test  55% Average Benefits Test BusinessPlans does not perform the following tests:  Eligibility Test  Contributions and Benefits Test  Utilization or Concentration Test 12) Prepare Form 5500 at Company’s request 13) Prepare and conduct informational meetings as needed or requested by Company for key management personnel or its employees. 14) Prepare sample communication material for Company including:  Brochures  Paycheck stuffers  Posters  Email notices  Other custom communications 16) Provide written documentation of all of its responsibilities under this Agreement on a timely basis, including in the event of termination of this Agreement. Such documentation shall include but is not limited to nondiscrimination testing, and financial information such as salary reductions and expense reimbursements, subject to any restrictions which otherwise apply pursuant to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

Company Responsibilities 1) Have legal counsel review the Plan Documents and Summary Plan Description. 1) Report participant additions, terminations, and changes of status to BusinessPlans promptly. 2) Distribute various reports and communication materials to employees in a timely manner. 3) Provide funding through Company controlled general bank account. 4) Sign and disperse checks if signing authority was not given to BusinessPlans. 5) Initiate any action required if the plan becomes discriminatory. 6) Furnish any data that may be necessary for administrative purposes to BusinessPlans on a timely basis. 7) Distribute Summary Plan Description to all participating employees within 90 days of joining the Plan. 8) Company shall be responsible for attachment 2 and 3 regarding liability for claim expenses and ACH overdrafts. 9) Company is responsible for all claims expenses including ineligible and unauthorized transactions. In no event will BusinessPlans be liable for any such transactions. In the event of an ineligible expense, Company will assist BusinessPlans and use its best efforts to recover the funds from the plan participant  Page 4 March 17, 2016

and credit the Deposit Account with such recovered funds. Company will bear the loss of any uncollectible amounts from plan participants.

Claims Are the General Asset of Company

1) Notwithstanding any provision in this Agreement to the contrary, BusinessPlans intends and agrees that all assets transferred to an account(s) from which FSA and medical reimbursement claims shall be paid (the “Claims Assets”) under this Agreement; (i) are and shall remain the general assets of Company; (ii) are not “plan assets” within the meaning of ERISA; (iii) were never held in an account, fund, or trust bearing the name of the Plans or otherwise held in an account of the Plans or any participants or beneficiaries thereof; and (iv) shall remain subject to the claims of Company's creditors at all times. It is agreed that Claims Assets shall be held in a general account of Company or a general account maintained by BusinessPlans. 1) Company represents and agrees that: (i) neither it or any of its employees, directors, representatives, fiduciaries, or employees benefit plans (or any entity performing services for Company or such plans) or any of their predecessors, successors, or assigns have represented or will represent to any participant or beneficiary of the Plans that a separate account, fund, or trust is being held on behalf of the Plan(s) that may be used to provide or secure benefits under the Plans; (ii) it shall advise the participants and beneficiaries of the Plan(s) that the benefits under the Plan(s) shall at all times be paid out of the general assets of Company. 2) In the event that Claims Assets of Company transferred pursuant to the direction of BusinessPlans are insufficient to pay the Claims submitted and payable pursuant to the terms of the Plan(s), BusinessPlans shall, as soon as practicable upon becoming aware of such fact, advise Company of such shortfall. Within 2 (two) business days of receiving such notice, Company shall make available, from its general assets, and transfer according to the terms of the Direct Debit/Deposit Agreement or Funds Transfer Agreement, the additional amounts necessary to pay such claims. BusinessPlans shall not at any time be obligated to pay any claim under the Plan(s) unless there are sufficient Claims Assets held by Company to pay such claims. Company agrees to indemnify, defend and hold BusinessPlans harmless from any out-of-pocket loss or expense of any kind whatsoever (including, without limitation, reasonable attorney’s fee and costs) actually incurred by BusinessPlans that would not have occurred but for the companies failing to transfer sufficient Claims Assets to pay benefits under the Plan(s) and that is not otherwise due to the fault, negligence, or breach of this Agreement. 3) In the event that Claims Assets transferred by Company exceed the claims payable under the Plan(s) for any given reimbursement period, then such excess assets shall be automatically rolled forward and applied to future claims.

In no event will BusinessPlans ever be responsible for any information provided by any third party including, but not limited to, Company, participant or beneficiary.

BusinessPlans shall use reasonable care and due diligence in the exercise of its administrative services as defined by this Agreement. Each party agrees to indemnify, defend and hold the other party, its representatives and employees harmless from all costs, expenses(including reasonable attorney fees), penalties and all other claims incurred by a party as a result of a breach of this  Page 5 March 17, 2016

Agreement. BusinessPlans agrees to maintain, at its own cost, errors and omissions, professional liability, and crime and theft insurance that covers BusinessPlans’ acts under this Agreement.

FEE SCHEDULE

Fees and Terms of Payment

BusinessPlans will submit a monthly invoice via email. Company will pay BusinessPlans within 10 days of invoice receipt.

The fees are listed in Attachment 1 to this document. BusinessPlans has the right to change the fees after giving Company 60 days notice of changes.

NOTE: If corrected reports are required because of inaccurate or incomplete data given to BusinessPlans by Company there may be additional fees for the corrected reports.

Reports and Data

All Company data obtained by BusinessPlans will be held in confidence and will not be made known to other persons, parties or businesses without written permission from Company. Upon request, BusinessPlans will provide Company with any standard reports and data.

Use of Company Name

BusinessPlans has Company's permission to use Company name in advertising and marketing brochures.

 Check here if permission is not granted.

Agreement Terms

This Agreement will be effective from the date both parties execute this Agreement, and will remain effective until terminated. Either party can terminate this Agreement after a 60-day written notice.

The Agreement can only be amended, in writing, signed by BusinessPlans.

City of Laguna Woods BusinessPlans, Incorporated

______Christopher Macon, City Manager Doug Griffith, President

______Date Date

APPROVED AS TO FORM:

______David B. Cosgrove, City Attorney  Page 6 March 17, 2016

ATTACHMENT 1 FEE SCHEDULE

ANNUAL ADMINISTRATION FEES

I. Set-up Fee: $ 350

Plan Document Summary Plan Description Supplemental forms Employee meetings upon request ($250/day plus expenses) All documents and forms supplied on Master CD for distribution

II. Monthly Administration:

Number of Participants Monthly Fee

Up to 25 $6.33/participant* *Includes debit card. $100 minimum monthly. This fee is based on the assumed level of participation. Monthly invoice will be calculated at a rate of monthly fee x number of participants for the billing period. Variations in participation may result in an adjustment in the monthly fees.

Duplicate or dependent/spouse cards** $5.00 Lost or Stolen Cards** $5.00 **These fees are paid from the participant’s account unless Company makes other arrangements.

III. Related Fees: Quoted per Request

1. Customized reports not included in our standard reports 2. Retrieval of archived records . 3. Special communication pieces produced at Company’s request 4. Express delivery mailings requested by Company 5. Paper Enrollment 6. Amendments to the Plan Documents and/or SPD

Note: The above listed fees are expected to cover all miscellaneous services with the exception of printed materials for distribution to employees. BusinessPlans reserves the right to modify the rates at any time subject to a 60 day notice to Company.

City of Laguna Woods BusinessPlans, Incorporated

______Christopher Macon, City Manager Doug Griffith, President

______Date Date  Page 7 March 17, 2016

ATTACHMENT 2 FLEX CARD SERVICE AGREEMENT

Company has agreed to provide employee benefit plan participants the ability to access their benefit accounts electronically through a stored value Evolution card (“Card”) similar to a debit card. Company hereby grants to BusinessPlans and its service providers the right to receive and process data and perform all required services necessary to administer Card. BusinessPlans is granted the right to provide information to the Evolution Debit Card Program through Evolution Benefits, Inc. (“Evolution”) located at 22 Waterville Road, Avon, CT 06001. Company further grants to BusinessPlans and its service providers the right to derive and use aggregate and statistical data from such information and data.

BusinessPlans will establish on Company’s behalf a non-interest bearing deposit account (“Deposit Account”) for the purpose of enabling Evolution to settle card transactions in a timely manner. Funds in the Deposit Account will be used only for the purposes of settling debit card transactions and paying fees debited from cardholders’ accounts. A “Minimum Balance” will be pre-funded and maintained in the Deposit Account. The Minimum Balance is established by calculating 5% of the projected plan year contributions each year. Evolution may increase the minimum balance at Evolution’s sole discretion.

In order to consistently maintain the minimum funding requirements, weekly ACH transactions will be performed. Evolution will monitor and ensure the Minimum Balance is maintained by using weekly funding reports.

In order to settle debit card transactions in a timely manner the Evolution Debit Card Program requires that Company enters into an ACH Agreement with Evolution.

When card transactions reduce the balance in the Deposit Account to an amount less than the Minimum Balance, Evolution will initiate, on a weekly basis, an ACH transfer of additional funds from Company to the Deposit Account in an amount sufficient to restore the Deposit Account to the Minimum Balance. BusinessPlans reserves the right to suspend service to all Evolution Debit Cards if the Minimum Balance is not maintained. If at any point Company fails to replenish the Deposit Account to the Minimum Balance, BusinessPlans will provide Company with notice, so that Company can correct the shortfall. If such deficiency is not cured within two (2) days of notice, authorization of Card Payments may be stopped and all services under this Agreement for the period of time until such required amounts are provided may be suspended. In such case, BusinessPlans can also elect to terminate this Agreement. Company will be responsible for all outstanding obligations relating to the Deposit Account, including any Bank charges, penalties and interest in connection therewith. In the event that the Cards would be terminated and reinitiated, an initiation fee of $1.50 per card may be required.

Company may request that the Minimum Balance be reduced to take into account events such as a reduction in workforce resulting in a significant decrease in the number of participant cards. BusinessPlans will not unreasonably refuse to adjust the Minimum Balance and return any difference. If there is a significant increase in the workforce of 10% or more, BusinessPlans may request a proportionate increase to the Minimum Balance.

 Page 8 March 17, 2016

Company will not have access to the funds in the Deposit Account until their return 120 days following the deactivation of all cards associated with Company’s account.

ITEM 6.4 - Exhibit B to Attachment B

CITY OF LAGUNA WOODS SECTION 125 FLEXIBLE BENEFITS PLAN

AND ALL SUPPORTING FORMS HAVE BEEN PRODUCED FOR

CITY OF LAGUNA WOODS

CITY OF LAGUNA WOODS SECTION 125 FLEXIBLE BENEFITS PLAN

TABLE OF CONTENTS

ARTICLE I DEFINITIONS

ARTICLE II PARTICIPATION

2.1 ELIGIBILITY ...... 3 2.2 EFFECTIVE DATE OF PARTICIPATION ...... 3 2.3 APPLICATION TO PARTICIPATE ...... 3 2.4 TERMINATION OF PARTICIPATION ...... 3 2.5 TERMINATION OF EMPLOYMENT ...... 3 2.6 DEATH ...... 4

ARTICLE III CONTRIBUTIONS TO THE PLAN

3.1 EMPLOYER CONTRIBUTION ...... 4 3.2 SALARY REDIRECTION ...... 4 3.3 APPLICATION OF CONTRIBUTIONS ...... 4 3.4 PERIODIC CONTRIBUTIONS ...... 4

ARTICLE IV BENEFITS

4.1 BENEFIT OPTIONS ...... 5 4.2 HEALTH FLEXIBLE SPENDING ACCOUNT BENEFIT ...... 6 4.3 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT BENEFIT ...... 6 4.4 HEALTH INSURANCE BENEFIT ...... 5 4.5 DENTAL INSURANCE BENEFIT ...... 5 4.6 VISION INSURANCE BENEFIT ...... 5 4.7 NONDISCRIMINATION REQUIREMENTS ...... 6

ARTICLE V PARTICIPANT ELECTIONS

5.1 INITIAL ELECTIONS ...... 6 5.2 SUBSEQUENT ANNUAL ELECTIONS ...... 6 5.3 FAILURE TO ELECT ...... 7 5.4 CHANGE IN STATUS...... 7

ARTICLE VI HEALTH FLEXIBLE SPENDING ACCOUNT

6.1 ESTABLISHMENT OF PLAN ...... 9 6.2 DEFINITIONS ...... 9 6.3 FORFEITURES ...... 10 6.4 LIMITATION ON ALLOCATIONS ...... 10 6.5 NONDISCRIMINATION REQUIREMENTS ...... 10 6.6 COORDINATION WITH CAFETERIA PLAN...... 11 6.7 HEALTH FLEXIBLE SPENDING ACCOUNT CLAIMS ...... 11

6.8 DEBIT AND CREDIT CARDS...... 11

ARTICLE VII DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT

7.1 ESTABLISHMENT OF ACCOUNT ...... 12 7.2 DEFINITIONS ...... 12 7.3 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS ...... 13 7.4 INCREASES IN DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS ...... 13 7.5 DECREASES IN DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS ...... 13 7.6 ALLOWABLE DEPENDENT CARE REIMBURSEMENT ...... 14 7.7 ANNUAL STATEMENT OF BENEFITS...... 14 7.8 FORFEITURES ...... 14 7.9 LIMITATION ON PAYMENTS ...... 14 7.10 NONDISCRIMINATION REQUIREMENTS ...... 14 7.11 COORDINATION WITH CAFETERIA PLAN...... 14 7.12 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT CLAIMS ...... 15 7.13 DEBIT AND CREDIT CARDS...... 15

ARTICLE VIII BENEFITS AND RIGHTS

8.1 CLAIM FOR BENEFITS ...... 16 8.2 APPLICATION OF BENEFIT PLAN SURPLUS ...... 17

ARTICLE IX ADMINISTRATION

9.1 PLAN ADMINISTRATION...... 17 9.2 EXAMINATION OF RECORDS ...... 18 9.3 PAYMENT OF EXPENSES ...... 18 9.4 INSURANCE CONTROL CLAUSE ...... 18 9.5 INDEMNIFICATION OF ADMINISTRATOR ...... 18

ARTICLE X AMENDMENT OR TERMINATION OF PLAN

10.1 AMENDMENT ...... 19 10.2 TERMINATION ...... 19

ARTICLE XI MISCELLANEOUS

11.1 PLAN INTERPRETATION ...... 19 11.2 GENDER AND NUMBER ...... 19 11.3 WRITTEN DOCUMENT ...... 19 11.4 EXCLUSIVE BENEFIT ...... 19 11.5 PARTICIPANT'S RIGHTS ...... 19 11.6 ACTION BY THE EMPLOYER ...... 19 11.7 EMPLOYER'S PROTECTIVE CLAUSES ...... 20 11.8 NO GUARANTEE OF TAX CONSEQUENCES ...... 20

11.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS ...... 20 11.10 FUNDING ...... 20 11.11 GOVERNING LAW ...... 20 11.12 SEVERABILITY ...... 20 11.13 CAPTIONS ...... 20 11.14 CONTINUATION OF COVERAGE (COBRA) ...... 20 11.15 FAMILY AND MEDICAL LEAVE ACT (FMLA) ...... 21 11.16 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA) ...... 21 11.17 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) ...... 21 11.18 COMPLIANCE WITH HIPAA PRIVACY STANDARDS ...... 21 11.19 COMPLIANCE WITH HIPAA ELECTRONIC SECURITY STANDARDS...... 22 11.20 MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT ...... 23 11.21 GENETIC INFORMATION NONDISCRIMINATION ACT (GINA) ...... 23 11.22 WOMEN'S HEALTH AND CANCER RIGHTS ACT ...... 23 11.23 NEWBORNS' AND MOTHERS' HEALTH PROTECTION ACT ...... 23

CITY OF LAGUNA WOODS SECTION 125 FLEXIBLE BENEFITS PLAN

INTRODUCTION

The Employer has adopted this Plan effective July 1, 2016. The concept of this Plan is to allow Employees to choose among different types of benefits based on their own particular goals, desires and needs. The Plan shall be known as City of Laguna Woods Section 125 Flexible Benefits Plan (the "Plan").

The intention of the Employer is that the Plan qualify as a "Cafeteria Plan" within the meaning of Section 125 of the Internal Revenue Code of 1986, as amended, and that the benefits which an Employee elects to receive under the Plan be excludable from the Employee's income under Section 125(a) and other applicable sections of the Internal Revenue Code of 1986, as amended.

ARTICLE I DEFINITIONS

1.1 "Administrator" means the Employer unless another person or entity has been designated by the Employer pursuant to Section 9.1 to administer the Plan on behalf of the Employer. If the Employer is the Administrator, the Employer may appoint any person, including, but not limited to, the Employees of the Employer, to perform the duties of the Administrator. Any person so appointed shall signify acceptance by filing written acceptance with the Employer. Upon the resignation or removal of any individual performing the duties of the Administrator, the Employer may designate a successor.

1.2 "Affiliated Employer" means the Employer and any corporation which is a member of a controlled group of corporations (as defined in Code Section 414(b)) which includes the Employer; any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to Treasury regulations under Code Section 414(o).

1.3 "Benefit" or "Benefit Options" means any of the optional benefit choices available to a Participant as outlined in Section 4.1.

1.4 "Cafeteria Plan Benefit Dollars" means the amount available to Participants to purchase Benefit Options as provided under Section 4.1. Each dollar contributed to this Plan shall be converted into one Cafeteria Plan Benefit Dollar.

1.5 "Code" means the Internal Revenue Code of 1986, as amended or replaced from time to time.

1.6 "Compensation" means the amounts received by the Participant from the Employer during a Plan Year.

1.7 "Dependent" means any individual who qualifies as a dependent under an Insurance Contract for purposes of coverage under that Contract only or under Code Section 152 (as modified by Code Section 105(b)).

"Dependent" shall include any Child of a Participant who is covered under an Insurance Contract, as defined in the Contract, or under the Health Flexible Spending Account or as allowed by reason of the Affordable Care Act.

For purposes of the Health Flexible Spending Account, a Participant's "Child" includes his/her natural child, stepchild, foster child, adopted child, or a child placed with the Participant for adoption. A Participant's Child will be an eligible Dependent until reaching the limiting age of 26, without regard to student status, marital status, financial dependency or residency status with the Employee or any other person. When the child reaches the applicable limiting age, coverage will end at the end of the calendar year.

The phrase "placed for adoption" refers to a child whom the Participant intends to adopt, whether or not the adoption has become final, who has not attained the age of 18 as of the date of such placement for adoption. The term "placed" means the assumption and retention by such Employee of a legal obligation for total or partial support of the child in anticipation of adoption of the child. The child must be available for adoption and the legal process must have commenced.

1.8 "Effective Date" means July 1, 2016.

1.9 "Election Period" means the period immediately preceding the beginning of each Plan Year established by the Administrator, such period to be applied on a uniform and nondiscriminatory basis for all Employees and Participants. However, an Employee's initial Election Period shall be determined pursuant to Section 5.1.

1.10 "Eligible Employee" means any Employee who has satisfied the provisions of Section 2.1.

An individual shall not be an "Eligible Employee" if such individual is not reported on the payroll records of the Employer as a common law employee. In particular, it is expressly intended that individuals not treated as common law employees by the Employer on its payroll records are not "Eligible Employees" and are excluded from Plan participation even if a court or administrative agency determines that such individuals are common law employees and not independent contractors.

1.11 "Employee" means any person who is employed by the Employer. The term Employee shall include leased employees within the meaning of Code Section 414(n)(2).

1.12 "Employer" means City of Laguna Woods and any successor which shall maintain this Plan; and any predecessor which has maintained this Plan. In addition, where appropriate, the term Employer shall include any Participating, Affiliated or Adopting Employer.

1.13 "Employer Contribution" means the contributions made by the Employer pursuant to Section 3.1 to enable a Participant to purchase Benefits. These contributions shall be converted to Cafeteria Plan Benefit Dollars and allocated to the funds or accounts established under the Plan pursuant to the Participants' elections made under Article V and as set forth in Section 3.1.

1.14 "Insurance Contract" means any contract issued by an Insurer underwriting a Benefit.

1.15 "Insurance Premium Payment Plan" means the plan of benefits contained in Section 4.1 of this Plan, which provides for the payment of Premium Expenses.

1.16 "Insurer" means any insurance company that underwrites a Benefit under this Plan.

1.17 "Key Employee" means an Employee described in Code Section 416(i)(1) and the Treasury regulations thereunder.

1.18 "Participant" means any Eligible Employee who elects to become a Participant pursuant to Section 2.3 and has not for any reason become ineligible to participate further in the Plan.

1.19 "Plan" means this instrument, including all amendments thereto.

1.20 "Plan Year" means the 12-month period beginning January 1 and ending December 31, except for the short Plan Year beginning July 1 and ending on December 31. The Plan Year shall be the coverage period for the Benefits provided for under this Plan. In the event a Participant commences participation during a Plan Year, then the initial coverage period shall be that portion of the Plan Year commencing on such Participant's date of entry and ending on the last day of such Plan Year.

1.21 "Premium Expenses" or "Premiums" mean the Participant's cost for the Benefits described in Section 4.1.

1.22 "Premium Expense Reimbursement Account" means the account established for a Participant pursuant to this Plan to which part of his Cafeteria Plan Benefit Dollars may be allocated and from which Premiums of the Participant shall be paid or reimbursed. If more than one type of insured Benefit is elected, sub-accounts shall be established for each type of insured Benefit.

1.23 "Salary Redirection" means the contributions made by the Employer on behalf of Participants pursuant to Section 3.2. These contributions shall be converted to Cafeteria Plan Benefit Dollars and allocated to the funds or accounts established under the Plan pursuant to the Participants' elections made under Article V.

1.24 "Salary Redirection Agreement" means an agreement between the Participant and the Employer under which the Participant agrees to reduce his Compensation or to forego all or part of the increases in such Compensation and to have such amounts contributed by the Employer to the Plan on the Participant's behalf. The Salary Redirection Agreement shall apply only to Compensation that has not been actually or constructively received by the Participant as of the date of the agreement (after taking this Plan and Code Section 125 into account) and, subsequently does not become currently available to the Participant.

1.25 "Spouse" means spouse as determined under Federal law.

ARTICLE II PARTICIPATION

2.1 ELIGIBILITY

Any Eligible Employee shall be eligible to participate hereunder as of his date of employment (or the Effective Date of the Plan, if later).

2.2 EFFECTIVE DATE OF PARTICIPATION

An Eligible Employee shall become a Participant effective as of the date on which he satisfies the requirements of Section 2.1.

2.3 APPLICATION TO PARTICIPATE

An Employee who is eligible to participate in this Plan shall, during the applicable Election Period, complete an application to participate in a manner set forth by the Administrator. The election shall be irrevocable until the end of the applicable Plan Year unless the Participant is entitled to change his Benefit elections pursuant to Section 5.4 hereof.

An Eligible Employee shall also be required to complete a Salary Redirection Agreement during the Election Period for the Plan Year during which he wishes to participate in this Plan. Any such Salary Redirection Agreement shall be effective for the first pay period beginning on or after the Employee's effective date of participation pursuant to Section 2.2.

Notwithstanding the foregoing, an Employee who is eligible to participate in this Plan and who is covered by the Employer's insured Benefits under this Plan shall automatically become a Participant to the extent of the Premiums for such insurance unless the Employee elects, during the Election Period, not to participate in the Plan.

2.4 TERMINATION OF PARTICIPATION

A Participant shall no longer participate in this Plan upon the occurrence of any of the following events:

(a) Termination of employment. The Participant's termination of employment, subject to the provisions of Section 2.5;

(b) Death. The Participant's death, subject to the provisions of Section 2.6; or

2.5 TERMINATION OF EMPLOYMENT

If a Participant's employment with the Employer is terminated for any reason other than death, his participation in the Benefit Options provided under Section 4.1 shall be governed in accordance with the following:

(a) Insurance Benefit. With regard to Benefits which are insured, the Participant's participation in the Plan shall cease, subject to the Participant's right to continue coverage under any Insurance Contract for which premiums have already been paid.

(b) Dependent Care FSA. With regard to the Dependent Care Flexible Spending Account, the Participant's participation in the Plan shall cease and no further Salary Redirection contributions shall be made. However, such Participant may submit claims for employment related Dependent Care Expense reimbursements for claims incurred up to the date of termination and submitted within 60 days after termination, based on the level of the Participant's Dependent Care Flexible Spending Account as of the date of termination.

(c) COBRA applicability. With regard to the Health Flexible Spending Account, the Participant may submit claims for expenses that were incurred during the portion of the Plan Year before the end of the period for which payments to the Health Flexible Spending Account have already been made. Thereafter, the health benefits under this Plan including the Health Flexible Spending Account shall be applied and administered consistent with such further rights a Participant and his Dependents may be entitled to pursuant to Code Section 4980B and Section 11.14 of the Plan.

2.6 DEATH

If a Participant dies, his participation in the Plan shall cease. However, such Participant's spouse or Dependents may submit claims for expenses or benefits for the remainder of the Plan Year or until the Cafeteria Plan Benefit Dollars allocated to each specific benefit are exhausted. In no event may reimbursements be paid to someone who is not a spouse or Dependent. If the Plan is subject to the provisions of Code Section 4980B, then those provisions and related regulations shall apply for purposes of the Health Flexible Spending Account.

ARTICLE III CONTRIBUTIONS TO THE PLAN

3.1 EMPLOYER CONTRIBUTION

The Employer shall make available to each Participant an Employer Contribution to be used for any Benefit under the Plan. Monthly Benefit Allowance: The City shall provide each full-time employee who works 40 or more hours per week on a regularly assigned basis with a monthly benefit allowance of $1,000 per month. A portion of the allowance shall be allocated to pay for the employee assistance program and health insurance, as provided in the City’s “Employee Compensation and Benefits” resolution. The remaining balance of the monthly benefit allowance may be allocated by the employee to (1) elect benefits available through the City’s Section 125 Flexible Benefits Plan, in accordance with applicable plan documents; (2) make contributions to an ICMA-RC 457 Deferred Compensation Plan, in accordance with applicable plan documents; or, (3) purchase additional paid time off as provided in the City’s “Employee Compensation and Benefits” resolution. Any amount of the monthly benefit allowance that remains after the allocations described above shall be forfeited. In such event, the Employee shall have n further claim to such amount for any reason. Employees shall be required to make elections annually for the calendar year use of the entirety of monthly benefit allowances during the annual open enrollment period. Modifications of annual calendar year elections following any enrollment/election period shall be limited to qualifying events as set forth in applicable plan documents.

3.2 SALARY REDIRECTION

If a Participant's Employer Contribution is not sufficient to cover the cost of Benefits or Premium Expenses he elects pursuant to Section 4.1, his Compensation will be reduced in an amount equal to the difference between the cost of Benefits he elected and the amount of Employer Contribution available to him. Such reduction shall be his Salary Redirection, which the Employer will use on his behalf, together with his Employer Contribution, to pay for the Benefits he elected. The amount of such Salary Redirection shall be specified in the Salary Redirection Agreement and shall be applicable for a Plan Year. Notwithstanding the above, for new Participants, the Salary Redirection Agreement shall only be applicable from the first day of the pay period following the Employee's entry date up to and including the last day of the Plan Year. These contributions shall be converted to Cafeteria Plan Benefit Dollars and allocated to the funds or accounts established under the Plan pursuant to the Participants' elections made under Article IV.

Any Salary Redirection shall be determined prior to the beginning of a Plan Year (subject to initial elections pursuant to Section 5.1) and prior to the end of the Election Period and shall be irrevocable for such Plan Year. However, a Participant may revoke a Benefit election or a Salary Redirection Agreement after the Plan Year has commenced and make a new election with respect to the remainder of the Plan Year, if both the revocation and the new election are on account of and consistent with a change in status and such other permitted events as determined under Article V of the Plan and consistent with the rules and regulations of the Department of the Treasury. Salary Redirection amounts shall be contributed on a pro rata basis for each pay period during the Plan Year. All individual Salary Redirection Agreements are deemed to be part of this Plan and incorporated by reference hereunder.

3.3 APPLICATION OF CONTRIBUTIONS

As soon as reasonably practical after each payroll period, the Employer shall apply the Employer Contribution and Salary Redirection to provide the Benefits elected by the affected Participants. Any contribution made or withheld for the Health Flexible Spending Account or Dependent Care Flexible Spending Account shall be credited to such fund or account. Amounts designated for the Participant's Premium Expense Reimbursement Account shall likewise be credited to such account for the purpose of paying Premium Expenses.

3.4 PERIODIC CONTRIBUTIONS

Notwithstanding the requirement provided above and in other Articles of this Plan that Salary Redirections be contributed to the Plan by the Employer on behalf of an Employee on a level and pro rata basis for each payroll period, the Employer and Administrator may implement a procedure in which Salary Redirections are contributed throughout the Plan Year

on a periodic basis that is not pro rata for each payroll period. However, with regard to the Health Flexible Spending Account, the payment schedule for the required contributions may not be based on the rate or amount of reimbursements during the Plan Year.

ARTICLE IV BENEFITS

4.1 BENEFIT OPTIONS

Each Participant shall have a sufficient portion of his Employer Contributions and Salary Redirections applied to the following Benefits unless the Participant elects not to receive such Benefits. If electing to not receive the Health Insurance Benefit below, the Participant must provide evidence of other coverage pursuant to requirements of the Affordable Care Act and the City’s “Employee Compensation and Benefits” resolution:

(1) Health Insurance Benefit

(2) Dental Insurance Benefit

(3) Vision Insurance Benefit

In addition, each Participant may elect any one or more of the following optional Benefits:

(4) Health Flexible Spending Account

(5) Dependent Care Flexible Spending Account

4.2 HEALTH INSURANCE BENEFIT

(a) Coverage for Participant and Dependents. Each Participant must elect to be covered under a health Insurance Contract for the Participant unless the Participant provides evidence of other health insurance coverage pursuant to requirements of the Affordable Care Act and the City’s “Employee Compensation and Benefits” resolution. If the Participant elects coverage for self, the Participant may also elect coverage for his or her Spouse, and his or her Dependents.

(b) Employer selects contracts. The Employer may select suitable health Insurance Contracts for use in providing this health insurance benefit, which policies will provide uniform benefits for all Participants electing this Benefit.

(c) Contract incorporated by reference. The rights and conditions with respect to the benefits payable from such health Insurance Contract shall be determined therefrom, and such Insurance Contract shall be incorporated herein by reference.

4.3 DENTAL INSURANCE BENEFIT

(a) Coverage for Participant and/or Dependents. Each Participant may elect to be covered under the Employer's dental Insurance Contract. In addition, the Participant may elect either individual or family coverage under such Insurance Contract.

(b) Employer selects contracts. The Employer may select suitable dental Insurance Contracts for use in providing this dental insurance benefit, which policies will provide uniform benefits for all Participants electing this Benefit.

(c) Contract incorporated by reference. The rights and conditions with respect to the benefits payable from such dental Insurance Contract shall be determined therefrom, and such dental Insurance Contract shall be incorporated herein by reference.

4.4 VISION INSURANCE BENEFIT

(a) Coverage for Participant and/or Dependents. Each Participant may elect to be covered under the Employer's vision Insurance Contract. In addition, the Participant may elect either individual or family coverage.

(b) Employer selects contracts. The Employer may select suitable vision Insurance Contracts for use in providing this vision insurance benefit, which policies will provide uniform benefits for all Participants electing this Benefit.

(c) Contract incorporated by reference. The rights and conditions with respect to the benefits payable from such vision Insurance Contract shall be determined therefrom, and such vision Insurance Contract shall be incorporated herein by reference.

4.5 HEALTH FLEXIBLE SPENDING ACCOUNT BENEFIT

Each Participant may elect to participate in the Health Flexible Spending Account option, in which case Article VI shall apply.

4.6 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT BENEFIT

Each Participant may elect to participate in the Dependent Care Flexible Spending Account option, in which case Article VII shall apply.

4.7 NONDISCRIMINATION REQUIREMENTS

(a) Intent to be nondiscriminatory. It is the intent of this Plan to provide benefits to a classification of employees which the Secretary of the Treasury finds not to be discriminatory in favor of the group in whose favor discrimination may not occur under Code Section 125.

(b) 25% concentration test. It is the intent of this Plan not to provide qualified benefits as defined under Code Section 125 to Key Employees in amounts that exceed 25% of the aggregate of such Benefits provided for all Eligible Employees under the Plan. For purposes of the preceding sentence, qualified benefits shall not include benefits which (without regard to this paragraph) are includible in gross income.

(c) Adjustment to avoid test failure. If the Administrator deems it necessary to avoid discrimination or possible taxation to Key Employees or a group of employees in whose favor discrimination may not occur in violation of Code Section 125, it may, but shall not be required to, reduce contributions or non-taxable Benefits in order to assure compliance with the Code and regulations. Any act taken by the Administrator shall be carried out in a uniform and nondiscriminatory manner. With respect to any affected Participant who has had Benefits reduced pursuant to this Section, the reduction shall be made proportionately among Health Flexible Spending Account Benefits and Dependent Care Flexible Spending Account Benefits, and once all these Benefits are expended, proportionately among insured Benefits. Contributions which are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited and deposited into the benefit plan surplus.

ARTICLE V PARTICIPANT ELECTIONS

5.1 INITIAL ELECTIONS

An Employee who meets the eligibility requirements of Section 2.1 on the first day of, or during, a Plan Year may elect to participate in this Plan for all or the remainder of such Plan Year, provided he elects to do so on or before his effective date of participation pursuant to Section 2.2.

Notwithstanding the foregoing, an Employee who is eligible to participate in this Plan and who is covered by the Employer's insured benefits under this Plan shall automatically become a Participant to the extent of the Premiums for such insurance unless the Employee elects, during the Election Period, not to participate in the Plan.

5.2 SUBSEQUENT ANNUAL ELECTIONS

During the Election Period prior to each subsequent Plan Year, each Participant shall be given the opportunity to elect, on an election of benefits form to be provided by the Administrator, which spending account Benefit options he wishes to select. Any such election shall be effective for any Benefit expenses incurred during the Plan Year which follows the end of the Election Period. With regard to subsequent annual elections, the following options shall apply:

(a) A Participant or Employee who failed to initially elect to participate may elect different or new Benefits under the Plan during the Election Period;

(b) A Participant may terminate his participation in the Plan by notifying the Administrator in writing during the Election Period that he does not want to participate in the Plan for the next Plan Year;

(c) An Employee who elects not to participate for the Plan Year following the Election Period will have to wait until the next Election Period before again electing to participate in the Plan, except as provided for in Section 5.4.

5.3 FAILURE TO ELECT

With regard to Benefits available under the Plan for which no Premium Expenses apply, any Participant who fails to complete a new benefit election form pursuant to Section 5.2 by the end of the applicable Election Period shall be deemed to have elected not to participate in the Plan for the upcoming Plan Year. No further Salary Redirections shall therefore be authorized or made for the subsequent Plan Year for such Benefits.

With regard to Benefits available under the Plan for which Premium Expenses apply, any Participant who fails to complete a new benefit election form pursuant to Section 5.2 by the end of the applicable Election Period shall be deemed to have made the same Benefit elections as are then in effect for the current Plan Year. The Participant shall also be deemed to have elected Salary Redirection in an amount necessary to purchase such Benefit options.

5.4 CHANGE IN STATUS

(a) Change in status defined. Any Participant may change a Benefit election after the Plan Year (to which such election relates) has commenced and make new elections with respect to the remainder of such Plan Year if, under the facts and circumstances, the changes are necessitated by and are consistent with a change in status which is acceptable under rules and regulations adopted by the Department of the Treasury, the provisions of which are incorporated by reference. Notwithstanding anything herein to the contrary, if the rules and regulations conflict, then such rules and regulations shall control.

In general, a change in election is not consistent if the change in status is the Participant's divorce, annulment or legal separation from a Spouse, the death of a Spouse or Dependent, or a Dependent ceasing to satisfy the eligibility requirements for coverage, and the Participant's election under the Plan is to cancel accident or health insurance coverage for any individual other than the one involved in such event. In addition, if the Participant, Spouse or Dependent gains or loses eligibility for coverage, then a Participant's election under the Plan to cease or decrease coverage for that individual under the Plan corresponds with that change in status only if coverage for that individual becomes applicable or is increased under the family member plan.

Regardless of the consistency requirement, if the individual, the individual's Spouse, or Dependent becomes eligible for continuation coverage under the Employer's group health plan as provided in Code Section 4980B or any similar state law, then the individual may elect to increase payments under this Plan in order to pay for the continuation coverage. However, this does not apply for COBRA eligibility due to divorce, annulment or legal separation.

Any new election shall be effective at such time as the Administrator shall prescribe, but not earlier than the first pay period beginning after the election form is completed and returned to the Administrator. For the purposes of this subsection, a change in status shall only include the following events or other events permitted by Treasury regulations:

(1) Legal Marital Status: events that change a Participant's legal marital status, including marriage, divorce, death of a Spouse, legal separation or annulment;

(2) Number of Dependents: Events that change a Participant's number of Dependents, including birth, adoption, placement for adoption, or death of a Dependent;

(3) Employment Status: Any of the following events that change the employment status of the Participant, Spouse, or Dependent: termination or commencement of employment, a strike or lockout, commencement or return from an unpaid leave of absence, or a change in worksite. In addition, if the eligibility conditions of this Plan or other employee benefit plan of the Employer of the Participant, Spouse, or Dependent depend on the employment status of that individual and there is a change in that individual's employment status with the consequence that the individual becomes (or ceases to be) eligible under the plan, then that change constitutes a change in employment under this subsection;

(4) Dependent satisfies or ceases to satisfy the eligibility requirements: An event that causes the Participant's Dependent to satisfy or cease to satisfy the requirements for coverage due to attainment of age, student status, or any similar circumstance; and

(5) Residency: A change in the place of residence of the Participant, Spouse or Dependent, that would lead to a change in status (such as a loss of HMO coverage).

For the Dependent Care Flexible Spending Account, a Dependent becoming or ceasing to be a "Qualifying Dependent" as defined under Code Section 21(b) shall also qualify as a change in status.

Notwithstanding anything in this Section to the contrary, the gain of eligibility or change in eligibility of a child, as allowed under Code Sections 105(b) and 106, and guidance thereunder, shall qualify as a change in status.

(b) Special enrollment rights. Notwithstanding subsection (a), the Participants may change an election for accident or health coverage during a Plan Year and make a new election that corresponds with the special enrollment rights provided in Code Section 9801(f), including those authorized under the provisions of the Children's Health Insurance Program Reauthorization Act of 2009 (SCHIP); provided that such Participant meets the sixty (60) day notice requirement imposed by Code Section 9801(f) (or such longer period as may be permitted by the Plan and communicated to Participants). Such change shall take place on a prospective basis, unless otherwise required by Code Section 9801(f) to be retroactive.

(c) Qualified Medical Support Order. Notwithstanding subsection (a), in the event of a judgment, decree, or order (including approval of a property settlement) ("order") resulting from a divorce, legal separation, annulment, or change in legal custody which requires accident or health coverage for a Participant's child (including a foster child who is a Dependent of the Participant):

(1) The Plan may change an election to provide coverage for the child if the order requires coverage under the Participant's plan; or

(2) The Participant shall be permitted to change an election to cancel coverage for the child if the order requires the former Spouse to provide coverage for such child, under that individual's plan and such coverage is actually provided.

(d) Medicare or Medicaid. Notwithstanding subsection (a), a Participant may change elections to cancel accident or health coverage for the Participant or the Participant's Spouse or Dependent if the Participant or the Participant's Spouse or Dependent is enrolled in the accident or health coverage of the Employer and becomes entitled to coverage (i.e., enrolled) under Part A or Part B of the Title XVIII of the Social Security Act (Medicare) or Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under Section 1928 of the Social Security Act (the program for distribution of pediatric vaccines). If the Participant or the Participant's Spouse or Dependent who has been entitled to Medicaid or Medicare coverage loses eligibility, that individual may prospectively elect coverage under the Plan if a benefit package option under the Plan provides similar coverage.

(e) Cost increase or decrease. If the cost of a Benefit provided under the Plan increases or decreases during a Plan Year, then the Plan shall automatically increase or decrease, as the case may be, the Salary Redirections of all affected Participants for such Benefit. Alternatively, if the cost of a benefit package option increases significantly, the Administrator shall permit the affected Participants to either make corresponding changes in their payments or revoke their elections and, in lieu thereof, receive on a prospective basis coverage under another benefit package option with similar coverage, or drop coverage prospectively if there is no benefit package option with similar coverage.

A cost increase or decrease refers to an increase or decrease in the amount of elective contributions under the Plan, whether resulting from an action taken by the Participants or an action taken by the Employer.

(f) Loss of coverage. If the coverage under a Benefit is significantly curtailed or ceases during a Plan Year, affected Participants may revoke their elections of such Benefit and, in lieu thereof, elect to receive on a prospective basis coverage under another plan with similar coverage, or drop coverage prospectively if no similar coverage is offered.

(g) Addition of a new benefit. If, during the period of coverage, a new benefit package option or other coverage option is added, an existing benefit package option is significantly improved, or an existing benefit package option or other coverage option is eliminated, then the affected Participants may elect the newly-added option, or elect another option if an option has been eliminated prospectively and make corresponding election changes with respect to

other benefit package options providing similar coverage. In addition, those Eligible Employees who are not participating in the Plan may opt to become Participants and elect the new or newly improved benefit package option.

(h) Loss of coverage under certain other plans. A Participant may make a prospective election change to add group health coverage for the Participant, the Participant's Spouse or Dependent if such individual loses group health coverage sponsored by a governmental or educational institution, including a state children's health insurance program under the Social Security Act, the Indian Health Service or a health program offered by an Indian tribal government, a state health benefits risk pool, or a foreign government group health plan.

(i) Change of coverage due to change under certain other plans. A Participant may make a prospective election change that is on account of and corresponds with a change made under the plan of a Spouse's, former Spouse's or Dependent's employer if (1) the cafeteria plan or other benefits plan of the Spouse's, former Spouse's or Dependent's employer permits its participants to make a change; or (2) the cafeteria plan permits participants to make an election for a period of coverage that is different from the period of coverage under the cafeteria plan of a Spouse's, former Spouse's or Dependent's employer.

(j) Change in dependent care provider. A Participant may make a prospective election change that is on account of and corresponds with a change by the Participant in the dependent care provider. The availability of dependent care services from a new childcare provider is similar to a new benefit package option becoming available. A cost change is allowable in the Dependent Care Flexible Spending Account only if the cost change is imposed by a dependent care provider who is not related to the Participant, as defined in Code Section 152(a)(1) through (8).

(k) Health FSA cannot change due to insurance change. A Participant shall not be permitted to change an election to the Health Flexible Spending Account as a result of a cost or coverage change under any health insurance benefits.

ARTICLE VI HEALTH FLEXIBLE SPENDING ACCOUNT

6.1 ESTABLISHMENT OF PLAN

This Health Flexible Spending Account is intended to qualify as a medical reimbursement plan under Code Section 105 and shall be interpreted in a manner consistent with such Code Section and the Treasury regulations thereunder. Participants who elect to participate in this Health Flexible Spending Account may submit claims for the reimbursement of Medical Expenses. All amounts reimbursed shall be periodically paid from amounts allocated to the Health Flexible Spending Account. Periodic payments reimbursing Participants from the Health Flexible Spending Account shall in no event occur less frequently than monthly.

6.2 DEFINITIONS

For the purposes of this Article and the Cafeteria Plan, the terms below have the following meaning:

(a) "Health Flexible Spending Account" means the account established for Participants pursuant to this Plan to which part of their Cafeteria Plan Benefit Dollars may be allocated and from which all allowable Medical Expenses incurred by a Participant, his or her Spouse and his or her Dependents may be reimbursed.

(b) "Highly Compensated Participant" means, for the purposes of this Article and determining discrimination under Code Section 105(h), a participant who is:

(1) one of the 5 highest paid officers;

(2) a shareholder who owns (or is considered to own applying the rules of Code Section 318) more than 10 percent in value of the stock of the Employer; or

(3) among the highest paid 25 percent of all Employees (other than exclusions permitted by Code Section 105(h)(3)(B) for those individuals who are not Participants).

(c) "Medical Expenses" means any expense for medical care within the meaning of the term "medical care" as defined in Code Section 213(d) and the rulings and Treasury regulations thereunder, and not otherwise used by the Participant as a deduction in determining his tax liability under the Code. "Medical Expenses" can be incurred by the Participant, his or her Spouse and his or her Dependents. "Incurred" means, with regard to Medical Expenses, when

the Participant is provided with the medical care that gives rise to the Medical Expense and not when the Participant is formally billed or charged for, or pays for, the medical care.

A Participant may not be reimbursed for the cost of any medicine or drug that is not "prescribed" within the meaning of Code Section 106(f) or is not insulin.

A Participant may not be reimbursed for the cost of other health coverage such as premiums paid under plans maintained by the employer of the Participant's Spouse or individual policies maintained by the Participant or his Spouse or Dependent.

A Participant may not be reimbursed for "qualified long-term care services" as defined in Code Section 7702B(c).

(d) The definitions of Article I are hereby incorporated by reference to the extent necessary to interpret and apply the provisions of this Health Flexible Spending Account.

6.3 FORFEITURES

The amount in the Health Flexible Spending Account as of the end of any Plan Year (and after the processing of all claims for such Plan Year pursuant to Section 6.7 hereof, excluding any carryover) shall be forfeited and credited to the benefit plan surplus. In such event, the Participant shall have no further claim to such amount for any reason, subject to Section 8.2.

6.4 LIMITATION ON ALLOCATIONS

(a) Notwithstanding any provision contained in this Health Flexible Spending Account to the contrary, the maximum amount of salary reductions and Employer Contributions convertible to cash that may be allocated to the Health Flexible Spending Account by a Participant in or on account of any Plan Year is $2,550, as adjusted for increases in the cost of living in accordance with Code Section 125(i)(2). The cost of living adjustment in effect for a calendar year applies to any Plan Year beginning with or within such calendar year. The dollar increase in effect on January 1 of any calendar year shall be effective for the Plan Year beginning with or within such calendar year. For any short Plan Year, the limit shall be an amount equal to the limit for the calendar year in which the Plan Year begins multiplied by the ratio obtained by dividing the number of full months in the short Plan Year by twelve (12).

(b) For any short Plan Year, the maximum amount that may be allocated to the Health Flexible Spending Account is $1275.

(c) Participation in Other Plans. All employers that are treated as a single employer under Code Sections 414(b), (c), or (m), relating to controlled groups and affiliated service groups, are treated as a single employer for purposes of the statutory limit. If a Participant participates in multiple cafeteria plans offering health flexible spending accounts maintained by members of a controlled group or affiliated service group, the Participant's total Health Flexible Spending Account contributions under all of the cafeteria plans are limited to the statutory limit (as adjusted). However, a Participant employed by two or more employers that are not members of the same controlled group may elect up to the statutory limit (as adjusted) under each Employer's Health Flexible Spending Account.

(d) Carryover. A Participant in the Health Flexible Spending Account may roll over up to $500 of unused amounts in the Health Flexible Spending Account remaining at the end of one Plan Year to the immediately following Plan Year. These amounts can be used during the following Plan Year for expenses incurred in that Plan Year. Amounts carried over do not affect the maximum amount of salary redirection contributions for the Plan Year to which they are carried over. Unused amounts are those remaining after expenses have been reimbursed during the runout period. These amounts may not be cashed out or converted to any other taxable or nontaxable benefit. Amounts in excess of $500 will be forfeited. The Plan is allowed, but not required, to treat claims as being paid first from the current year amounts, then from the carryover amounts.

6.5 NONDISCRIMINATION REQUIREMENTS

(a) Intent to be nondiscriminatory. It is the intent of this Health Flexible Spending Account not to discriminate in violation of the Code and the Treasury regulations thereunder.

(b) Adjustment to avoid test failure. If the Administrator deems it necessary to avoid discrimination under this Health Flexible Spending Account, it may, but shall not be required to, reject any elections or reduce contributions or Benefits in order to assure compliance with this Section. Any act taken by the Administrator under this Section shall be carried out in a uniform and nondiscriminatory manner. If the Administrator decides to reject any

elections or reduce contributions or Benefits, it shall be done in the following manner. First, the Benefits designated for the Health Flexible Spending Account by the member of the group in whose favor discrimination may not occur pursuant to Code Section 105 that elected to contribute the highest amount to the fund for the Plan Year shall be reduced until the nondiscrimination tests set forth in this Section or the Code are satisfied, or until the amount designated for the fund equals the amount designated for the fund by the next member of the group in whose favor discrimination may not occur pursuant to Code Section 105 who has elected the second highest contribution to the Health Flexible Spending Account for the Plan Year. This process shall continue until the nondiscrimination tests set forth in this Section or the Code are satisfied. Contributions which are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited and credited to the benefit plan surplus.

6.6 COORDINATION WITH CAFETERIA PLAN

All Participants under the Cafeteria Plan are eligible to receive Benefits under this Health Flexible Spending Account. The enrollment under the Cafeteria Plan shall constitute enrollment under this Health Flexible Spending Account. In addition, other matters concerning contributions, elections and the like shall be governed by the general provisions of the Cafeteria Plan.

6.7 HEALTH FLEXIBLE SPENDING ACCOUNT CLAIMS

(a) Expenses must be incurred during Plan Year. All Medical Expenses incurred by a Participant, his or her Spouse and his or her Dependents during the Plan Year shall be reimbursed during the Plan Year subject to Section 2.5, and notwithstanding Section 6.4(a), even though the submission of such a claim occurs after his participation hereunder ceases; but provided that the Medical Expenses were incurred during the applicable Plan Year. Medical Expenses are treated as having been incurred when the Participant is provided with the medical care that gives rise to the medical expenses, not when the Participant is formally billed or charged for, or pays for the medical care.

(b) Reimbursement available throughout Plan Year. The Administrator shall direct the reimbursement to each eligible Participant for all allowable Medical Expenses, up to a maximum of the amount designated by the Participant for the Health Flexible Spending Account for the Plan Year. Reimbursements shall be made available to the Participant throughout the year without regard to the level of Cafeteria Plan Benefit Dollars which have been allocated to the fund at any given point in time. Furthermore, a Participant shall be entitled to reimbursements only for amounts in excess of any payments or other reimbursements under any health care plan covering the Participant and/or his Spouse or Dependents.

(c) Payments. Reimbursement payments under this Plan shall be made directly to the Participant. However, in the Administrator's discretion, payments may be made directly to the service provider. The application for payment or reimbursement shall be made to the Administrator on an acceptable form within a reasonable time of incurring the debt or paying for the service. The application shall include a written statement from an independent third party stating that the Medical Expense has been incurred and the amount of such expense. Furthermore, the Participant shall provide a written statement that the Medical Expense has not been reimbursed or is not reimbursable under any other health plan coverage and, if reimbursed from the Health Flexible Spending Account, such amount will not be claimed as a tax deduction. The Administrator shall retain a file of all such applications.

(d) Claims for reimbursement. Claims for the reimbursement of Medical Expenses incurred in any Plan Year shall be paid as soon after a claim has been filed as is administratively practicable; provided however, that if a Participant fails to submit a claim within 60 days after the end of the Plan Year, those Medical Expense claims shall not be considered for reimbursement by the Administrator. However, if a Participant terminates employment during the Plan Year, claims for the reimbursement of Medical Expenses must be submitted within 60 days after termination of employment.

6.8 DEBIT AND CREDIT CARDS

Participants may, subject to a procedure established by the Administrator and applied in a uniform nondiscriminatory manner, use debit and/or credit (stored value) cards ("cards") provided by the Administrator and the Plan for payment of Medical Expenses, subject to the following terms:

(a) Card only for medical expenses. Each Participant issued a card shall certify that such card shall only be used for Medical Expenses. The Participant shall also certify that any Medical Expense paid with the card has not already been reimbursed by any other plan covering health benefits and that the Participant will not seek reimbursement from any other plan covering health benefits.

(b) Card issuance. Such card shall be issued upon the Participant's Effective Date of Participation and reissued for each Plan Year the Participant remains a Participant in the Health Flexible Spending Account. Such card shall be automatically cancelled upon the Participant's death or termination of employment, or if such Participant has a change in status that results in the Participant's withdrawal from the Health Flexible Spending Account.

(c) Maximum dollar amount available. The dollar amount of coverage available on the card shall be the amount elected by the Participant for the Plan Year. The maximum dollar amount of coverage available shall be the maximum amount for the Plan Year as set forth in Section 6.4.

(d) Only available for use with certain service providers. The cards shall only be accepted by such merchants and service providers as have been approved by the Administrator following IRS guidelines.

(e) Card use. The cards shall only be used for Medical Expense purchases at these providers, including, but not limited to, the following:

(1) Co-payments for doctor and other medical care;

(2) Purchase of drugs prescribed by a health care provider, including, if permitted by the Administrator, over-the-counter medications as allowed under IRS regulations;

(3) Purchase of medical items such as eyeglasses, syringes, crutches, etc.

(f) Substantiation. Such purchases by the cards shall be subject to substantiation by the Administrator, usually by submission of a receipt from a service provider describing the service, the date and the amount. The Administrator shall also follow the requirements set forth in Revenue Ruling 2003-43 and Notice 2006- 69. All charges shall be conditional pending confirmation and substantiation.

(g) Correction methods. If such purchase is later determined by the Administrator to not qualify as a Medical Expense, the Administrator, in its discretion, shall use one of the following correction methods to make the Plan whole. Until the amount is repaid, the Administrator shall take further action to ensure that further violations of the terms of the card do not occur, up to and including denial of access to the card.

(1) Repayment of the improper amount by the Participant;

(2) Withholding the improper payment from the Participant's wages or other compensation to the extent consistent with applicable federal or state law;

(3) Claims substitution or offset of future claims until the amount is repaid; and

(4) if subsections (1) through (3) fail to recover the amount, consistent with the Employer's business practices, the Employer may treat the amount as any other business indebtedness.

ARTICLE VII DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT

7.1 ESTABLISHMENT OF ACCOUNT

This Dependent Care Flexible Spending Account is intended to qualify as a program under Code Section 129 and shall be interpreted in a manner consistent with such Code Section. Participants who elect to participate in this program may submit claims for the reimbursement of Employment-Related Dependent Care Expenses. All amounts reimbursed shall be paid from amounts allocated to the Participant's Dependent Care Flexible Spending Account.

7.2 DEFINITIONS

For the purposes of this Article and the Cafeteria Plan the terms below shall have the following meaning:

(a) "Dependent Care Flexible Spending Account" means the account established for a Participant pursuant to this Article to which part of his Cafeteria Plan Benefit Dollars may be allocated and from which Employment-Related Dependent Care Expenses of the Participant may be reimbursed for the care of the Qualifying Dependents of Participants.

(b) "Earned Income" means earned income as defined under Code Section 32(c)(2), but excluding such amounts paid or incurred by the Employer for dependent care assistance to the Participant.

(c) "Employment-Related Dependent Care Expenses" means the amounts paid for expenses of a Participant for those services which if paid by the Participant would be considered employment related expenses under Code Section 21(b)(2). Generally, they shall include expenses for household services and for the care of a Qualifying Dependent, to the extent that such expenses are incurred to enable the Participant to be gainfully employed for any period for which there are one or more Qualifying Dependents with respect to such Participant. Employment-Related Dependent Care Expenses are treated as having been incurred when the Participant's Qualifying Dependents are provided with the dependent care that gives rise to the Employment-Related Dependent Care Expenses, not when the Participant is formally billed or charged for, or pays for the dependent care. The determination of whether an amount qualifies as an Employment-Related Dependent Care Expense shall be made subject to the following rules:

(1) If such amounts are paid for expenses incurred outside the Participant's household, they shall constitute Employment-Related Dependent Care Expenses only if incurred for a Qualifying Dependent as defined in Section 7.2(d)(1) (or deemed to be, as described in Section 7.2(d)(1) pursuant to Section 7.2(d)(3)), or for a Qualifying Dependent as defined in Section 7.2(d)(2) (or deemed to be, as described in Section 7.2(d)(2) pursuant to Section 7.2(d)(3)) who regularly spends at least 8 hours per day in the Participant's household;

(2) If the expense is incurred outside the Participant's home at a facility that provides care for a fee, payment, or grant for more than 6 individuals who do not regularly reside at the facility, the facility must comply with all applicable state and local laws and regulations, including licensing requirements, if any; and

(3) Employment-Related Dependent Care Expenses of a Participant shall not include amounts paid or incurred to a child of such Participant who is under the age of 19 or to an individual who is a Dependent of such Participant or such Participant's Spouse.

(d) "Qualifying Dependent" means, for Dependent Care Flexible Spending Account purposes,

(1) a Participant's Dependent (as defined in Code Section 152(a)(1)) who has not attained age 13;

(2) a Dependent or the Spouse of a Participant who is physically or mentally incapable of caring for himself or herself and has the same principal place of abode as the Participant for more than one-half of such taxable year; or

(3) a child that is deemed to be a Qualifying Dependent described in paragraph (1) or (2) above, whichever is appropriate, pursuant to Code Section 21(e)(5).

(e) The definitions of Article I are hereby incorporated by reference to the extent necessary to interpret and apply the provisions of this Dependent Care Flexible Spending Account.

7.3 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS

The Administrator shall establish a Dependent Care Flexible Spending Account for each Participant who elects to apply Cafeteria Plan Benefit Dollars to Dependent Care Flexible Spending Account benefits.

7.4 INCREASES IN DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS

A Participant's Dependent Care Flexible Spending Account shall be increased each pay period by the portion of Cafeteria Plan Benefit Dollars that he has elected to apply toward his Dependent Care Flexible Spending Account pursuant to elections made under Article V hereof.

7.5 DECREASES IN DEPENDENT CARE FLEXIBLE SPENDING ACCOUNTS

A Participant's Dependent Care Flexible Spending Account shall be reduced by the amount of any Employment-Related Dependent Care Expense reimbursements paid or incurred on behalf of a Participant pursuant to Section 7.12 hereof.

7.6 ALLOWABLE DEPENDENT CARE REIMBURSEMENT

Subject to limitations contained in Section 7.9 of this Program, and to the extent of the amount contained in the Participant's Dependent Care Flexible Spending Account, a Participant who incurs Employment-Related Dependent Care Expenses shall be entitled to receive from the Employer full reimbursement for the entire amount of such expenses incurred during the Plan Year or portion thereof during which he is a Participant.

7.7 ANNUAL STATEMENT OF BENEFITS

On or before January 31st of each calendar year, the Employer shall furnish to each Employee who was a Participant and received benefits under Section 7.6 during the prior calendar year, a statement of all such benefits paid to or on behalf of such Participant during the prior calendar year. This statement is set forth on the Participant's Form W-2.

7.8 FORFEITURES

The amount in a Participant's Dependent Care Flexible Spending Account as of the end of any Plan Year (and after the processing of all claims for such Plan Year pursuant to Section 7.12 hereof) shall be forfeited and credited to the benefit plan surplus. In such event, the Participant shall have no further claim to such amount for any reason.

7.9 LIMITATION ON PAYMENTS

(a) Code limits. Notwithstanding any provision contained in this Article to the contrary, amounts paid from a Participant's Dependent Care Flexible Spending Account in or on account of any taxable year of the Participant shall not exceed the lesser of the Earned Income limitation described in Code Section 129(b) or $5,000 ($2,500 if a separate tax return is filed by a Participant who is married as determined under the rules of paragraphs (3) and (4) of Code Section 21(e)).

7.10 NONDISCRIMINATION REQUIREMENTS

(a) Intent to be nondiscriminatory. It is the intent of this Dependent Care Flexible Spending Account that contributions or benefits not discriminate in favor of the group of employees in whose favor discrimination may not occur under Code Section 129(d).

(b) 25% test for shareholders. It is the intent of this Dependent Care Flexible Spending Account that not more than 25 percent of the amounts paid by the Employer for dependent care assistance during the Plan Year will be provided for the class of individuals who are shareholders or owners (or their Spouses or Dependents), each of whom (on any day of the Plan Year) owns more than 5 percent of the stock or of the capital or profits interest in the Employer.

(c) Adjustment to avoid test failure. If the Administrator deems it necessary to avoid discrimination or possible taxation to a group of employees in whose favor discrimination may not occur in violation of Code Section 129 it may, but shall not be required to, reject any elections or reduce contributions or non-taxable benefits in order to assure compliance with this Section. Any act taken by the Administrator under this Section shall be carried out in a uniform and nondiscriminatory manner. If the Administrator decides to reject any elections or reduce contributions or Benefits, it shall be done in the following manner. First, the Benefits designated for the Dependent Care Flexible Spending Account by the affected Participant that elected to contribute the highest amount to such account for the Plan Year shall be reduced until the nondiscrimination tests set forth in this Section are satisfied, or until the amount designated for the account equals the amount designated for the account of the affected Participant who has elected the second highest contribution to the Dependent Care Flexible Spending Account for the Plan Year. This process shall continue until the nondiscrimination tests set forth in this Section are satisfied. Contributions which are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited.

7.11 COORDINATION WITH CAFETERIA PLAN

All Participants under the Cafeteria Plan are eligible to receive Benefits under this Dependent Care Flexible Spending Account. The enrollment and termination of participation under the Cafeteria Plan shall constitute enrollment and termination of participation under this Dependent Care Flexible Spending Account. In addition, other matters concerning contributions, elections and the like shall be governed by the general provisions of the Cafeteria Plan.

7.12 DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT CLAIMS

The Administrator shall direct the payment of all such Dependent Care claims to the Participant upon the presentation to the Administrator of documentation of such expenses in a form satisfactory to the Administrator. However, in the Administrator's discretion, payments may be made directly to the service provider. In its discretion in administering the Plan, the Administrator may utilize forms and require documentation of costs as may be necessary to verify the claims submitted. At a minimum, the form shall include a statement from an independent third party as proof that the expense has been incurred during the Plan Year and the amount of such expense. In addition, the Administrator may require that each Participant who desires to receive reimbursement under this Program for Employment-Related Dependent Care Expenses submit a statement which may contain some or all of the following information:

(a) The Dependent or Dependents for whom the services were performed;

(b) The nature of the services performed for the Participant, the cost of which he wishes reimbursement;

(d) If the services are being performed by a child of the Participant, the age of the child;

(e) A statement as to where the services were performed;

(f) If any of the services were performed outside the home, a statement as to whether the Dependent for whom such services were performed spends at least 8 hours a day in the Participant's household;

(g) If the services were being performed in a day care center, a statement:

(1) that the day care center complies with all applicable laws and regulations of the state of residence,

(2) that the day care center provides care for more than 6 individuals (other than individuals residing at the center), and

(3) of the amount of fee paid to the provider.

(h) If the Participant is married, a statement containing the following:

(1) the Spouse's salary or wages if he or she is employed, or

(2) if the Participant's Spouse is not employed, that

(i) he or she is incapacitated, or

(ii) he or she is a full-time student attending an educational institution and the months during the year which he or she attended such institution.

(i) Claims for reimbursement. If a Participant fails to submit a claim within 60 days after the end of the Plan Year, those claims shall not be considered for reimbursement by the Administrator. However, if a Participant terminates employment during the Plan Year, claims for reimbursement must be submitted within 60 days after termination of employment.

7.13 DEBIT AND CREDIT CARDS

(a) Card only for dependent care expenses. Each Participant issued a card shall certify that such card shall only be used for Employment-Related Dependent Care Expenses. The Participant shall also certify that any Employment-Related Dependent Care Expense paid with the card has not already been reimbursed by any other plan covering dependent care benefits and that the Participant will not seek reimbursement from any other plan covering dependent care benefits.

(b) Card issuance. Such card shall be issued upon the Participant's Effective Date of Participation and reissued for each Plan Year the Participant remains a Participant in the Dependent Care Flexible Spending Account. Such card shall be automatically cancelled upon the Participant's death or termination of employment, or if such Participant has a change in status that results in the Participant's withdrawal from the Dependent Care Flexible Spending Account.

(c) Only available for use with certain service providers. The cards shall only be accepted by such service providers as have been approved by the Administrator. The cards shall only be used for Employment-Related Dependent Care Expenses from these providers.

(d) Substantiation. Such purchases by the cards shall be subject to substantiation by the Administrator, usually by submission of a receipt from a service provider describing the service, the date and the amount. The Administrator shall also follow the requirements set forth in Revenue Ruling 2003-43 and Notice 2006- 69. All charges shall be conditional pending confirmation and substantiation.

(e) Correction methods. If such purchase is later determined by the Administrator to not qualify as an Employment-Related Dependent Care Expense, the Administrator, in its discretion, shall use one of the following correction methods to make the Plan whole. Until the amount is repaid, the Administrator shall take further action to ensure that further violations of the terms of the card do not occur, up to and including denial of access to the card.

(1) Repayment of the improper amount by the Participant;

(2) Withholding the improper payment from the Participant's wages or other compensation to the extent consistent with applicable federal or state law;

(3) Claims substitution or offset of future claims until the amount is repaid; and

(4) if subsections (1) through (3) fail to recover the amount, consistent with the Employer's business practices, the Employer may treat the amount as any other business indebtedness.

ARTICLE VIII BENEFITS AND RIGHTS

8.1 CLAIM FOR BENEFITS

(a) Insurance claims. Any claim for Benefits underwritten by Insurance Contract(s) shall be made to the Insurer. If the Insurer denies any claim, the Participant or beneficiary shall follow the Insurer's claims review procedure.

(b) Dependent Care Flexible Spending Account or Health Flexible Spending Account claims. Any claim for Dependent Care Flexible Spending Account or Health Flexible Spending Account Benefits shall be made to the Administrator. For the Health Flexible Spending Account, if a Participant fails to submit a claim within 60 days after the end of the Plan Year, those claims shall not be considered for reimbursement by the Administrator. However, if a Participant terminates employment during the Plan Year, claims for the reimbursement of Medical Expenses must be submitted within 60 days after termination of employment. For the Dependent Care Flexible Spending Account, if a Participant fails to submit a claim within 60 days after the end of the Plan Year, those claims shall not be considered for reimbursement by the Administrator. However, if a Participant terminates employment during the Plan Year, claims for reimbursement must be submitted within 60 days after termination of employment. If the Administrator denies a claim, the Administrator may provide notice to the Participant or beneficiary, in writing, within 90 days after the claim is filed unless special circumstances require an extension of time for processing the claim. The notice of a denial of a claim shall be written in a manner calculated to be understood by the claimant and shall set forth:

(1) specific references to the pertinent Plan provisions on which the denial is based;

(2) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation as to why such information is necessary; and

(3) an explanation of the Plan's claim procedure.

(c) Appeal. Within 60 days after receipt of the above material, the claimant shall have a reasonable opportunity to appeal the claim denial to the Administrator for a full and fair review. The claimant or his duly authorized representative may:

(1) request a review upon written notice to the Administrator;

(2) review pertinent documents; and

(3) submit issues and comments in writing.

(d) Review of appeal. A decision on the review by the Administrator will be made not later than 60 days after receipt of a request for review, unless special circumstances require an extension of time for processing (such as the need to hold a hearing), in which event a decision should be rendered as soon as possible, but in no event later than 120 days after such receipt. The decision of the Administrator shall be written and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, with specific references to the pertinent Plan provisions on which the decision is based.

(e) Forfeitures. Any balance remaining in the Participant's Health Flexible Spending Account (excluding any carryover) or Dependent Care Flexible Spending Account as of the end of the time for claims reimbursement for each Plan Year shall be forfeited and deposited in the benefit plan surplus of the Employer pursuant to Section 6.3 or Section 7.8, whichever is applicable, unless the Participant had made a claim for such Plan Year, in writing, which has been denied or is pending; in which event the amount of the claim shall be held in his account until the claim appeal procedures set forth above have been satisfied or the claim is paid. If any such claim is denied on appeal, the amount held beyond the end of the Plan Year shall be forfeited and credited to the benefit plan surplus.

8.2 APPLICATION OF BENEFIT PLAN SURPLUS

Any forfeited amounts credited to the benefit plan surplus by virtue of the failure of a Participant to incur a qualified expense or seek reimbursement in a timely manner may, but need not be, separately accounted for after the close of the Plan Year (or after such further time specified herein for the filing of claims) in which such forfeitures arose. In no event shall such amounts be carried over to reimburse a Participant for expenses incurred during a subsequent Plan Year for the same or any other Benefit available under the Plan (excepting any carryover); nor shall amounts forfeited by a particular Participant be made available to such Participant in any other form or manner, except as permitted by Treasury regulations. Amounts in the benefit plan surplus shall be used to defray any administrative costs and experience losses or used to provide additional benefits under the Plan.

ARTICLE IX ADMINISTRATION

9.1 PLAN ADMINISTRATION

The Employer shall be the Administrator, unless the Employer elects otherwise. The Employer may appoint any person, including, but not limited to, the Employees of the Employer, to perform the duties of the Administrator. Any person so appointed shall signify acceptance by filing acceptance in writing (or such other form as acceptable to both parties) with the Employer. Upon the resignation or removal of any individual performing the duties of the Administrator, the Employer may designate a successor.

If the Employer elects, the Employer shall appoint one or more Administrators. Any person, including, but not limited to, the Employees of the Employer, shall be eligible to serve as an Administrator. Any person so appointed shall signify acceptance by filing acceptance in writing (or such other form as acceptable to both parties) with the Employer. An Administrator may resign by delivering a resignation in writing (or such other form as acceptable to both parties) to the Employer or be removed by the Employer by delivery of notice of removal (in writing or such other form as acceptable to both parties), to take effect at a date specified therein, or upon delivery to the Administrator if no date is specified. The Employer shall be empowered to appoint and remove the Administrator from time to time as it deems necessary for the proper administration of the Plan to ensure that the Plan is being operated for the exclusive benefit of the Employees entitled to participate in the Plan in accordance with the terms of the Plan and the Code.

The operation of the Plan shall be under the supervision of the Administrator. It shall be a principal duty of the Administrator to see that the Plan is carried out in accordance with its terms, and for the exclusive benefit of Employees entitled to participate in the Plan. The Administrator shall have full power and discretion to administer the Plan in all of its details and determine all questions arising in connection with the administration, interpretation, and application of the Plan. The Administrator may establish procedures, correct any defect, supply any information, or reconciles any inconsistency in such

manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan. The Administrator shall have all powers necessary or appropriate to accomplish the Administrator's duties under the Plan. The Administrator shall be charged with the duties of the general administration of the Plan as set forth under the Plan, including, but not limited to, in addition to all other powers provided by this Plan:

(a) To make and enforce such procedures, rules and regulations as the Administrator deems necessary or proper for the efficient administration of the Plan;

(b) To interpret the provisions of the Plan, the Administrator's interpretations thereof in good faith to be final and conclusive on all persons claiming benefits by operation of the Plan;

(c) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan and to receive benefits provided by operation of the Plan;

(d) To reject elections or to limit contributions or Benefits for certain highly compensated participants if it deems such to be desirable in order to avoid discrimination under the Plan in violation of applicable provisions of the Code;

(e) To provide Employees with a reasonable notification of their benefits available by operation of the Plan and to assist any Participant regarding the Participant's rights, benefits or elections under the Plan;

(f) To keep and maintain the Plan documents and all other records pertaining to and necessary for the administration of the Plan;

(g) To review and settle all claims against the Plan, to approve reimbursement requests, and to authorize the payment of benefits if the Administrator determines such shall be paid if the Administrator decides in its discretion that the applicant is entitled to them. This authority specifically permits the Administrator to settle disputed claims for benefits and any other disputed claims made against the Plan;

(h) To appoint such agents, counsel, accountants, consultants, and other persons or entities as may be required to assist in administering the Plan.

Any procedure, discretionary act, interpretation or construction taken by the Administrator shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to comply with the terms of Code Section 125 and the Treasury regulations thereunder.

9.2 EXAMINATION OF RECORDS

The Administrator shall make available to each Participant, Eligible Employee and any other Employee of the Employer such records as pertain to their interest under the Plan for examination at reasonable times during normal business hours.

9.3 PAYMENT OF EXPENSES

Any reasonable administrative expenses shall be paid by the Employer unless the Employer determines that administrative costs shall be borne by the Participants under the Plan or by any Trust Fund which may be established hereunder. The Administrator may impose reasonable conditions for payments, provided that such conditions shall not discriminate in favor of highly compensated employees.

9.4 INSURANCE CONTROL CLAUSE

In the event of a conflict between the terms of this Plan and the terms of an Insurance Contract of an independent third party Insurer whose product is then being used in conjunction with this Plan, the terms of the Insurance Contract shall control as to those Participants receiving coverage under such Insurance Contract. For this purpose, the Insurance Contract shall control in defining the persons eligible for insurance, the dates of their eligibility, the conditions which must be satisfied to become insured, if any, the benefits Participants are entitled to and the circumstances under which insurance terminates.

9.5 INDEMNIFICATION OF ADMINISTRATOR

The Employer agrees to indemnify and to defend to the fullest extent permitted by law any Employee serving as the Administrator or as a member of a committee designated as Administrator (including any Employee or former Employee who previously served as Administrator or as a member of such committee) against all liabilities, damages, costs and expenses

(including attorney's fees and amounts paid in settlement of any claims approved by the Employer) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith.

ARTICLE X AMENDMENT OR TERMINATION OF PLAN

10.1 AMENDMENT

The Employer, at any time or from time to time, may amend any or all of the provisions of the Plan without the consent of any Employee or Participant. No amendment shall have the effect of modifying any benefit election of any Participant in effect at the time of such amendment, unless such amendment is made to comply with Federal, state or local laws, statutes or regulations.

10.2 TERMINATION

The Employer reserves the right to terminate this Plan, in whole or in part, at any time. In the event the Plan is terminated, no further contributions shall be made. Benefits under any Insurance Contract shall be paid in accordance with the terms of the Insurance Contract.

No further additions shall be made to the Health Flexible Spending Account or Dependent Care Flexible Spending Account, but all payments from such fund shall continue to be made according to the elections in effect until 90 days after the termination date of the Plan. Any amounts remaining in any such fund or account as of the end of such period shall be forfeited and deposited in the benefit plan surplus after the expiration of the filing period.

ARTICLE XI MISCELLANEOUS

11.1 PLAN INTERPRETATION

All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner. This Plan shall be read in its entirety and not severed except as provided in Section 11.12.

11.2 GENDER AND NUMBER

Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply.

11.3 WRITTEN DOCUMENT

This Plan, in conjunction with any separate written document which may be required by law, is intended to satisfy the written Plan requirement of Code Section 125 and any Treasury regulations thereunder relating to cafeteria plans.

11.4 EXCLUSIVE BENEFIT

This Plan shall be maintained for the exclusive benefit of the Employees who participate in the Plan.

11.5 PARTICIPANT'S RIGHTS

This Plan shall not be deemed to constitute an employment contract between the Employer and any Participant or to be a consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon him as a Participant of this Plan.

11.6 ACTION BY THE EMPLOYER

Whenever the Employer under the terms of the Plan is permitted or required to do or perform any act or matter or thing, it shall be done and performed by a person duly authorized by its legally constituted authority.

11.7 EMPLOYER'S PROTECTIVE CLAUSES

(a) Insurance purchase. Upon the failure of either the Participant or the Employer to obtain the insurance contemplated by this Plan (whether as a result of negligence, gross neglect or otherwise), the Participant's Benefits shall be limited to the insurance premium(s), if any, that remained unpaid for the period in question and the actual insurance proceeds, if any, received by the Employer or the Participant as a result of the Participant's claim.

(b) Validity of insurance contract. The Employer shall not be responsible for the validity of any Insurance Contract issued hereunder or for the failure on the part of the Insurer to make payments provided for under any Insurance Contract. Once insurance is applied for or obtained, the Employer shall not be liable for any loss which may result from the failure to pay Premiums to the extent Premium notices are not received by the Employer.

11.8 NO GUARANTEE OF TAX CONSEQUENCES

Neither the Administrator nor the Employer makes any commitment or guarantee that any amounts paid to or for the benefit of a Participant under the Plan will be excludable from the Participant's gross income for federal or state income tax purposes, or that any other federal or state tax treatment will apply to or be available to any Participant. It shall be the obligation of each Participant to determine whether each payment under the Plan is excludable from the Participant's gross income for federal and state income tax purposes, and to notify the Employer if the Participant has reason to believe that any such payment is not so excludable. Notwithstanding the foregoing, the rights of Participants under this Plan shall be legally enforceable.

11.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS

If any Participant receives one or more payments or reimbursements under the Plan that are not for a permitted Benefit, such Participant shall indemnify and reimburse the Employer for any liability it may incur for failure to withhold federal or state income tax or Social Security tax from such payments or reimbursements. However, such indemnification and reimbursement shall not exceed the amount of additional federal and state income tax (plus any penalties) that the Participant would have owed if the payments or reimbursements had been made to the Participant as regular cash compensation, plus the Participant's share of any Social Security tax that would have been paid on such compensation, less any such additional income and Social Security tax actually paid by the Participant.

11.10 FUNDING

Unless otherwise required by law, contributions to the Plan need not be placed in trust or dedicated to a specific Benefit, but may instead be considered general assets of the Employer. Furthermore, and unless otherwise required by law, nothing herein shall be construed to require the Employer or the Administrator to maintain any fund or segregate any amount for the benefit of any Participant, and no Participant or other person shall have any claim against, right to, or security or other interest in, any fund, account or asset of the Employer from which any payment under the Plan may be made.

11.11 GOVERNING LAW

This Plan is governed by the Code and the Treasury regulations issued thereunder (as they might be amended from time to time). In no event shall the Employer guarantee the favorable tax treatment sought by this Plan. To the extent not preempted by Federal law, the provisions of this Plan shall be construed, enforced and administered according to the laws of the State of California.

11.12 SEVERABILITY

If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of the Plan, and the Plan shall be construed and enforced as if such provision had not been included herein.

11.13 CAPTIONS

The captions contained herein are inserted only as a matter of convenience and for reference, and in no way define, limit, enlarge or describe the scope or intent of the Plan, nor in any way shall affect the Plan or the construction of any provision thereof.

11.14 CONTINUATION OF COVERAGE (COBRA)

Notwithstanding anything in the Plan to the contrary, in the event any benefit under this Plan subject to the continuation coverage requirement of Code Section 4980B becomes unavailable, each Participant will be entitled to continuation coverage as

prescribed in Code Section 4980B, and related regulations. This Section shall only apply if the Employer employs at least twenty (20) employees on more than 50% of its typical business days in the previous calendar year.

11.15 FAMILY AND MEDICAL LEAVE ACT (FMLA)

Notwithstanding anything in the Plan to the contrary, in the event any benefit under this Plan becomes subject to the requirements of the Family and Medical Leave Act and regulations thereunder, this Plan shall be operated in accordance with Regulation 1.125-3.

11.16 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA)

Notwithstanding anything in this Plan to the contrary, this Plan shall be operated in accordance with HIPAA and regulations thereunder.

11.17 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA)

Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service shall be provided in accordance with the Uniform Services Employment And Reemployment Rights Act (USERRA) and the regulations thereunder.

11.18 COMPLIANCE WITH HIPAA PRIVACY STANDARDS

(a) Application. If any benefits under this Cafeteria Plan are subject to the Standards for Privacy of Individually Identifiable Health Information (45 CFR Part 164, the "Privacy Standards"), then this Section shall apply.

(b) Disclosure of PHI. The Plan shall not disclose Protected Health Information to any member of the Employer's workforce unless each of the conditions set out in this Section are met. "Protected Health Information" shall have the same definition as set forth in the Privacy Standards but generally shall mean individually identifiable information about the past, present or future physical or mental health or condition of an individual, including genetic information and information about treatment or payment for treatment.

(c) PHI disclosed for administrative purposes. Protected Health Information disclosed to members of the Employer's workforce shall be used or disclosed by them only for purposes of Plan administrative functions. The Plan's administrative functions shall include all Plan payment functions and health care operations. The terms "payment" and "health care operations" shall have the same definitions as set out in the Privacy Standards, but the term "payment" generally shall mean activities taken to determine or fulfill Plan responsibilities with respect to eligibility, coverage, provision of benefits, or reimbursement for health care. Protected Health Information that consists of genetic information will not be used or disclosed for underwriting purposes.

(d) PHI disclosed to certain workforce members. The Plan shall disclose Protected Health Information only to members of the Employer's workforce who are designated and authorized to receive such Protected Health Information, and only to the extent and in the minimum amount necessary for that person to perform his or her duties with respect to the Plan. "Members of the Employer's workforce" shall refer to all employees and other persons under the control of the Employer. The Employer shall keep an updated list of those authorized to receive Protected Health Information.

(1) An authorized member of the Employer's workforce who receives Protected Health Information shall use or disclose the Protected Health Information only to the extent necessary to perform his or her duties with respect to the Plan.

(2) In the event that any member of the Employer's workforce uses or discloses Protected Health Information other than as permitted by this Section and the Privacy Standards, the incident shall be reported to the Plan's privacy official. The privacy official shall take appropriate action, including:

(i) investigation of the incident to determine whether the breach occurred inadvertently, through negligence or deliberately; whether there is a pattern of breaches; and the degree of harm caused by the breach;

(ii) appropriate sanctions against the persons causing the breach which, depending upon the nature of the breach, may include oral or written reprimand, additional training, or termination of employment;

(iii) mitigation of any harm caused by the breach, to the extent practicable; and

(iv) documentation of the incident and all actions taken to resolve the issue and mitigate any damages.

(e) Certification. The Employer must provide certification to the Plan that it agrees to:

(1) Not use or further disclose the information other than as permitted or required by the Plan documents or as required by law;

(2) Ensure that any agent or subcontractor, to whom it provides Protected Health Information received from the Plan, agrees to the same restrictions and conditions that apply to the Employer with respect to such information;

(3) Not use or disclose Protected Health Information for employment-related actions and decisions or in connection with any other benefit or employee benefit plan of the Employer;

(4) Report to the Plan any use or disclosure of the Protected Health Information of which it becomes aware that is inconsistent with the uses or disclosures permitted by this Section, or required by law;

(5) Make available Protected Health Information to individual Plan members in accordance with Section 164.524 of the Privacy Standards;

(6) Make available Protected Health Information for amendment by individual Plan members and incorporate any amendments to Protected Health Information in accordance with Section 164.526 of the Privacy Standards;

(7) Make available the Protected Health Information required to provide an accounting of disclosures to individual Plan members in accordance with Section 164.528 of the Privacy Standards;

(8) Make its internal practices, books and records relating to the use and disclosure of Protected Health Information received from the Plan available to the Department of Health and Human Services for purposes of determining compliance by the Plan with the Privacy Standards;

(9) If feasible, return or destroy all Protected Health Information received from the Plan that the Employer still maintains in any form, and retain no copies of such information when no longer needed for the purpose for which disclosure was made, except that, if such return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible; and

(10) Ensure the adequate separation between the Plan and members of the Employer's workforce, as required by Section 164.504(f)(2)(iii) of the Privacy Standards and set out in (d) above.

11.19 COMPLIANCE WITH HIPAA ELECTRONIC SECURITY STANDARDS

Under the Security Standards for the Protection of Electronic Protected Health Information (45 CFR Part 164.300 et. seq., the "Security Standards"):

(a) Implementation. The Employer agrees to implement reasonable and appropriate administrative, physical and technical safeguards to protect the confidentiality, integrity and availability of Electronic Protected Health Information that the Employer creates, maintains or transmits on behalf of the Plan. "Electronic Protected Health Information" shall have the same definition as set out in the Security Standards, but generally shall mean Protected Health Information that is transmitted by or maintained in electronic media.

(b) Agents or subcontractors shall meet security standards. The Employer shall ensure that any agent or subcontractor to whom it provides Electronic Protected Health Information shall agree, in writing, to implement reasonable and appropriate security measures to protect the Electronic Protected Health Information.

(c) Employer shall ensure security standards. The Employer shall ensure that reasonable and appropriate security measures are implemented to comply with the conditions and requirements set forth in Section 11.18.

11.20 MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT

Notwithstanding anything in the Plan to the contrary, the Plan will comply with the Mental Health Parity and Addiction Equity Act.

11.21 GENETIC INFORMATION NONDISCRIMINATION ACT (GINA)

Notwithstanding anything in the Plan to the contrary, the Plan will comply with the Genetic Information Nondiscrimination Act.

11.22 WOMEN'S HEALTH AND CANCER RIGHTS ACT

Notwithstanding anything in the Plan to the contrary, the Plan will comply with the Women's Health and Cancer Rights Act of 1998.

11.23 NEWBORNS' AND MOTHERS' HEALTH PROTECTION ACT

Notwithstanding anything in the Plan to the contrary, the Plan will comply with the Newborns' and Mothers' Health Protection Act.

IN WITNESS WHEREOF, this Plan document is hereby executed this day of .

City of Laguna Woods

By EMPLOYER

WITNESSES AS TO EMPLOYER

24 ITEM 6.4 - Exhibit C to Attachment B BusinessPlans, Inc. BUSINESS ASSOCIATE AGREEMENT

This Business Associate Agreement (the “Agreement”), is between the City of Laguna Woods Benefit Plan (the “Plan”) and BusinessPlans, Inc. (the “Business Associate”) and is effective as of the date the Plan and Business Associate share PHI or ePHI (the “Effective Date”).

RECITALS:

WHEREAS, the City of Laguna Woods (the “Plan Sponsor”) maintains the Plan and the Plan provides benefits to certain eligible participants and their dependents;

WHEREAS, the Business Associate provides various administrative, brokerage and consulting services to the Plan under which the Plan and Business Associate will share PHI and/or ePHI;

WHEREAS, the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the Department of Health and Human Services (“HHS”) has promulgated regulations at 45 C.F.R. Parts 160‐64, implementing the privacy requirements set forth in HIPAA (the “Privacy Rule”) and the electronic security requirements set forth in HIPAA (“Security Rule”), each as amended by the “Health Information Technology for Economic and Clinical Health Act,” part of the “American Recovery and Reinvestment Act of 2009” (“HITECH”) requires the Plan and Business Associate to enter into a written contract to protect and safeguardHI PHI and eP ;

NOW THEREFORE, Business Associate and Plan agree as follows:

1. Definitions:

Terms used, but not otherwise defined, in this Agreement shall have the same meaning as those terms in HIPAA Privacy and Security Rules and the Omnibus Rule issued by the Department of Health and Human Services as maybe amended. The following terms shall have the following meaning when used in this Agreement:

a. Breach. Means any event listed under 45 C.F.R. § 164.402.

b. Designated Record Set. Means the term “designated record set” in 45 C.F.R. § 164.501.

c. ePHI or Electronic Protected Health Information. Means the PHI or Protected Health Information that is transmitted or maintained in electronic media, including, but not limited to, hard drives, disks, on the internet, or on an intranet.

d. HIPAA Rules. Means the Privacy, Security, Breach Notification, and Enforcement Rules at 45 C.F.R. part 160 and part 164 and related statutes and rules as amended.

e. Individual. Means the term “individual” in 45 C.F.R. §160.103 and shall include a person who qualifies as a personal representative in accordance with 45 C.F.R. §164.502(g).

f. Omnibus Rule. Means the Health Insurance Portability and Accountability Act rule issued by the Department of Health and Human Services and published in the Federal Register on January 25, 2013 at 78 Fed. Reg. 5566 and any subsequent rules issued by the Department of Health and Human Services.

g. Privacy Rule. Means the Standards of Privacy of Individually Identifiable Health Information at 45 C.F.R. part 160 and part 164, subparts A and E.

h. PHI or Protected Health Information. Means “protected health information” as defined under 45 C.F.R. § 160.103, but limited to the information shared between the Plan and Business Associate.

i. Unsecured PHI. Means unsecure or unencrypted PHI or ePHI as defined under 45 C.F.R. § 164.402.

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j. Required By Law. Means “required by law” as defined under 45 C.F.R. § 164.103.

k. Secretary. Means the Secretary of the Department of Health and Human Services or the designee of the Secretary.

l. Security Rule. Means the Security Standards for the Protection of Electronic Protected Health Information as defined under 45 C.F.R. parts 160 and 164, subparts A and C.

m. Subcontractor. Means a person to whom the Business Associate delegates a function, activity, or service, other than in the capacity as a member of the workforce of such business associate.

The terms “use,” “disclose” and “discovery,” or derivations thereof, although not capitalized, shall also have the same meanings set forth in HIPAA, the Omnibus Rule and its implementing regulations.

2. Obligations and Activities of Business Associate:

a. Business Associate agrees to not use or disclose PHI other than as permitted or required by this Agreement or as Required By Law.

b. Business Associate agrees to document and use appropriate administrative, technical and physical safeguards to prevent use or disclosure of the PHI other than as provided for by this Agreement and in compliance with the Security Rule.

c. Business Associate agrees to establish procedures for mitigating, and shall follow those procedures and so mitigate, to the extent practicable, any harmful effect that is known to Business Associate of a use or disclosure of Protected Health Information by Business Associate in violation of the requirements of this Agreement.

d. Business Associate agrees to report to the Plan Sponsor’s privacy officer in writing within ten (10) business days after discovering, as defined in 45 C.F.R. § 164.410, any Breach of Unsecured Protected Health Information, and that it will provide the Plan within five (5) business days: (i) a list of all Individuals whose Unsecured Protected Health Information has been, or is reasonably believed by the Business Associate to have been, accessed, acquired, used, or disclosed during the Breach, and (ii) any other available information that the Plan is required to include in notifications to such Individuals pursuant to 45 C.F.R. § 164.404(c), and to the Secretary, including information set forth in Section 3(b).

e. In the event of any Breach referred to in the preceding paragraph, Business Associate agrees to cooperate with the Plan as the Plan notifies: (i) Individuals whose Unsecured Protected Health Information has been, or is reasonably believed by Business Associate to have been, accessed, acquired, used, or disclosed; (ii) the media, as required pursuant to 45 C.F.R. § 164.406; and (iii) the Secretary, as required by 45 C.F.R. § 164.408(b), if the legal requirements for media or HHS notification are triggered by the circumstances of such Breach, provided that Business Associate shall not initiate any such notifications without the express written approval of the Plan.

f. In accordance with 45 C.F.R. §§ 164.502(e)(1)(ii) and 164.308(b)(2) Business Associate agrees to ensure that any agent, including a subcontractor, to whom it provides Protected Health Information received from, or created or received by Business Associate on behalf of Plan, agrees in writing to substantially the same restrictions and conditions that apply through this Agreement to Business Associate with respect to such information. Business Associate shall make available to the Plan for review copies of such agreements upon request.

g. Business Associate agrees to provide, within fifteen (15) days of receiving a request from Plan, in the manner reasonably requested by Plan, access to Protected Health Information in a Designated Record Set, to Plan or, as directed by Plan, to an Individual, in order for Plan to fulfill its obligations under 45 C.F.R. § 164.524 to provide access and copies of Protected Health Information to an Individual. If Business Associate receives a request for access directly from an Individual, Business Associate shall promptly forward such request to Plan.

h. Business Associate agrees to make available to Plan, within fifteen (15) days of receiving a request from Plan, in the manner reasonably requested by Plan, such information as Plan may require to fulfill in a timely manner Plan’s obligations pursuant to 45 C.F.R. § 164.526 to amend Protected Health Information that Business Associate maintains in a Designated Record Set, and if so notified by Plan, to incorporate any amendments to which Plan has agreed.

i. Business Associate agrees to make its internal practices, books, and records, including policies and procedures and Protected Health Information, relating to the use and disclosure of Protected Health Information received from, or created or received by Business Associate on behalf of, Plan available to Plan, or to the Secretary, for purposes of the Secretary determining Plan's compliance with the

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Privacy Rule. If Business Associate directly receives the request from the Secretary, Business Associate agrees to, as legally permissible, promptly notify Plan of any such request by the Secretary.

j. Business Associate agrees to document such disclosures of Protected Health Information and information related to such disclosures as would be required for Plan to respond to a request by an Individual for an accounting of disclosures of Protected Health Information in accordance with 45 C.F.R. § 164.528.

k. Business Associate agrees to provide to Plan as soon as reasonably practicable and in the manner reasonably requested by Plan, information collected in accordance with Section 2(j) of this Agreement, to permit Plan to respond in a timely manner to a request by an Individual for an accounting of disclosures of Protected Health Information in accordance with 45 C.F.R. § 164.528.

l. Business Associate will comply with all obligations applicable to business associates as Required By Law, as of the date that compliance with each such obligation is required pursuant to the Omnibus Rule.

m. Business Associate will distribute all required notices under HIPAA to Plan participants and others in a timely manner.

3. Impermissible Use or Disclosure of Unsecured PHI Involving Business Associate:

a. Without limiting any other provision hereof, and with respect to any use or disclosure of Unsecured PHI that is (i) maintained, used or transmitted by Business Associate, and (ii) not permitted by the Privacy Rule or Security Rule, Business Associate shall be responsible for reasonably determining when any such incident is a Breach. In the event Business Associate determines that an incident is a Breach, Business Associate shall inform Plan of such Breach in the manner specified below and in 45 C.F.R. § 164.410.

b. Business Associate shall provide Plan with written notification of any suspected Breach within ten (10) business days. The written notification shall include, to the extent possible, all of the elements specified in 45 C.F.R. § 164.404(c), including a brief description of what happened, and the types of Unsecured PHI involved (e.g., social security number, diagnosis code); the date of the Breach and the date of its discovery; any steps Individuals should take to protect themselves from potential harm; and what Business Associate is doing to investigate the Breach, mitigate harm, and protect against further breaches.

c. In any case reasonably determined by Business Associate to require urgent notice because of possible imminent misuse of Unsecured PHI, Business Associate shall provide Plan with immediate notice of the Breach by telephone or in person, to supplement the notice specified above.

d. Business Associate shall provide notification to Individuals affected by any Breach, in the manner and within the time period specified in 45 C.F.R. § 164.404. Prior to issuing any such notice, Business Associate shall provide Plan with a copy of the template notification letter to be sent to Individuals; and if Substitute Notice or urgent notice is to be provided, a copy of the procedures to be employed for such notice(s).

e. Business Associate shall, in accordance with all security breach notification requirements set forth in 42 U.S.C. § 17932 and 45 C.F.R. Parts 160 and 164 subparts A, D and E, issue the approved notification letter to all affected Individuals and/or commence providing the approved Substitute Notice or urgent notice to all affected Individuals. Business Associate shall not provide any notification to Individuals before the means for such notifications are approved by Plan.

f. Upon request of Plan, Business Associate shall provide notification to the media pursuant to 45 C.F.R. § 164.406 and to the Secretary pursuant to 45 C.F.R. § 164.408(b). Prior to issuing any such notification that explicitly identifies Plan, Business Associate shall provide Plan with a copy of the template notification letter to be used. Business Associate shall not provide any notification to the media or the Secretary that explicitly identifies Plan before the template for such notifications is approved by Plan.

4. Permitted Uses and Disclosures by Business Associate:

a. Except as otherwise limited in this Agreement, Business Associate may use or disclose Protected Health Information to perform functions, activities, or services for, or on behalf of, Plan to provide administrative, brokerage and consulting services, provided that such use or disclosure would not violate the Privacy Rule if done by Plan or the minimum necessary policies and procedures of Plan.

b. Except as otherwise limited in this Agreement, Business Associate may use or disclose Protected Health Information only if such use or disclosure is in full compliance with 45 C.F.R. § 164.504(e). The additional requirements of the Omnibus Rule and HITECH Act that

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relate to privacy and that are made applicable to covered entities shall also apply to Business Associate, and are hereby incorporated into this Agreement.

c. Except as otherwise limited in this Agreement, Business Associate may use Protected Health Information for the proper management and administration of the Business Associate or to carry out the legal responsibilities of the Business Associate. Business Associate may disclose Protected Health Information for Business Associate’s proper management and administration, provided that: (i) Business Associate obtains reasonable assurances from the person to whom Protected Health Information is disclosed that it will remain confidential and used or further disclosed only as Required By Law or for the purpose for which it was disclosed to the person; and (ii) the person notifies Business Associate of any instances of which it is aware in which the confidentiality of Protected Health Information has been breached. Business Associate also may make disclosures that are required by law.

d. Except as otherwise limited in any other arrangement between Business Associate and Plan, Business Associate may use Protected Health Information to provide data aggregation services as permitted by 45 C.F.R. § 164.504(e)(2)(i)(B) (i.e., the combining Protected Health Information received from Plan with protected health information received by Business Associate in its capacity as the business associate of other group health plans, to permit data analyses that relate to the health care operations of various group health plans).

e. Business Associate may use Protected Health Information to report violations of law to the appropriate Federal and State authorities, consistent with 45 C.F.R. §164.502(j)(1).

f. Business Associate may deidentify Protected Health Information in accordance with the requirements of the Privacy Rule; provided that all identifiers are destroyed or returned in accordance with this Agreement.

g. Business Associate may create a Limited Data Set for the purpose of providing the services, provided that Business Associate complies with its obligations under this Agreement.

5. Electronic Data Interchange:

Business Associate agrees, in connection with all services that it provides on behalf of Plan, to satisfy all applicable provisions of the HIPAA standards for electronic transactions and code sets, also known as the “Electronic Data Interchange (“EDI”) Standards,” at 45 C.F.R. Part 162. Business Associate further agrees to ensure that any agent, including a subcontractor, that conducts standard transactions, as such term is defined at 45 C.F.R. §162.103, on its behalf will comply with the EDI Standards in connection with all services provided on behalf of Plan.

6. Security Standards:

a. Business Associate shall Implement Administrative, Physical and Technical Safeguards that reasonably and appropriately protect the Confidentiality, Integrity and Availability of Electronic Protected Health Information that it creates, receives, maintains, or transmits on behalf of Plan.

b. With respect to the Safeguards required by Section 6 (a) above, 45 C.F.R. Sections 164.308 (administrative safeguards), 164.310 (physical safeguards), 164.312 (technical safeguards) and 164.316 (policies and procedures and documentation requirements), shall apply to Business Associate in the same manner that such sections apply to the Plan. The additional requirements of the HITECH Act that relate to security and that are made applicable to covered entities shall also apply to Business Associate, and are hereby incorporated into this Agreement. Business Associate shall be liable under the civil and criminal enforcement provisions set forth at 45 C.F.R. § 160.402 and 42 U.S.C. § 1320d‐5 and 1320d‐6, as amended from time to time, for failure to comply with the safeguards and guidance issued by the Secretary with respect to such requirements.

c. Business Associate shall ensure that any agent, including a subcontractor, to whom it provides Electronic Protected Health Information, agrees in writing to implement reasonable and appropriate safeguards to protect such Electronic Protected Health Information.

d. Without limiting the provisions of Section 3 above, Business Associate shall report in writing to Plan within ten (10) business days of becoming aware of any Security Incident involving Electronic Protected Health Information, including breaches of unsecured protected health information as required by 45 C.F.R. § 164.410 and security incidents involving subcontractors and as reasonably appropriate, shall advise Plan of measures Business Associate will be taking to mitigate harm from such Security Incident, and to prevent similar future incidents. For purposes of the Security Incident reporting requirement, the term “Security Incident” shall not include inconsequential incidents that occur on a daily basis, such as scans, “pings”, or other unsuccessful attempts to penetrate computer networks or servers containing electronic PHI maintained by Business Associate.

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e. Business Associate shall make its policies and procedures and documentation required by the Security Rule relating to the Safeguards described in subsection (a) above, available to Plan and to the Secretary for purposes of determining Plan’s compliance with the Security Rule, and Business Associate’s compliance with the HITECH Act.

7. Term and Termination:

a. Term. The Term of this Agreement shall commence as of the Effective Date and shall terminate when all of the Protected Health Information provided by Plan to Business Associate, or created or received by Business Associate on behalf of Plan, is destroyed or returned to Plan, or, if it is infeasible to return or destroy Protected Health Information, protections are extended to such information, in accordance with Section 7(c).

b. Termination for Cause. Upon Plan's knowledge of a material breach of this Agreement by Business Associate, Plan shall, at its election, either:

i. Provide an opportunity for Business Associate to cure the breach or end the violation and terminate this Agreement and the Services Agreement if Business Associate does not cure the breach or end the violation within the time specified by Plan;

ii. Immediately terminate this Agreement and the Services Agreement if Business Associate has breached a material term of this Agreement and cure is not possible; or

iii. If neither termination nor cure is feasible, Plan may report the violation to the Secretary.

c. Effect of Termination.

i. Except as provided in Section 7(c)(ii), upon termination of this Agreement or the Services Agreement for any reason, Business Associate shall return all Protected Health Information received from Plan, or created or received by Business Associate on behalf of Plan, or at the election of Plan, Business Associate may alternatively certify in writing to Plan that it has destroyed all Protected Health Information. This provision shall apply to Protected Health Information that is in the possession of subcontractors or agents of Business Associate. Business Associate shall retain no copies of the Protected Health Information, including no electronic copies.

ii. In the event that Business Associate determines that returning or destroying the Protected Health Information is infeasible, Business Associate shall provide to Plan notification of the conditions that make return or destruction infeasible. Upon Business Associate’s establishing to Plan’s reasonable satisfaction that return or destruction of Protected Health Information is infeasible, Business Associate shall extend the protections of this Agreement to such Protected Health Information and limit further uses and disclosures of such Protected Health Information to those purposes that make the return or destruction infeasible, for so long as Business Associate maintains such Protected Health Information. Plan hereby acknowledges and agrees that infeasibility includes Business Associate’s need to retain Protected Health Information for purposes of complying with its work product documentation standards and that for such a retention no further notice to Plan is required.

8. Miscellaneous:

a. Regulatory References. A reference in this Agreement to a section in the Privacy Rule, the Security Rule, or to another section of HIPAA means the section as in effect or as amended.

b. Amendment. The parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for the Parties to comply with the requirements of the Privacy Rule, Security Rule and other provisions of HIPAA, including, but not limited to, any regulations promulgated under the HITECH Act.

c. Survival. The respective rights and obligations of the parties under Sections 2(f), 2(g), 2(i), 2(k), 2(l), 3, 7, 8(c), 8(e), 8(f), 8(i) and 8(k) of this Agreement will remain in effect indefinitely regardless of when or why this Agreement terminates.

d. Interpretation. Any ambiguity in this Agreement shall be resolved to permit Plan to comply with the Privacy Rule, Security Rule and other provisions of HIPAA, including, but not limited to, any regulations promulgated under the HITECH Act.

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e. Governing Law. The construction, interpretation and performance of this Agreement and all transactions under this Agreement shall be governed and enforced pursuant to the laws of the State of Ohio, except as such laws are preempted by any provision of federal law, including by ERISA or HIPAA. Any action or proceeding arising out of or relating to this Agreement shall be brought and tried solely in a state or federal court in Montgomery County, Ohio and in no other court or venue. The parties expressly agree to the venue and jurisdiction of such courts. Each party will be responsible for its own legal fees. f. No Third Party Beneficiary. Nothing express or implied in this Agreement is intended to confer, nor shall anything herein confer, upon any person other than the parties and the respective successors or assigns of the parties, any rights, remedies, obligations, or liabilities whatsoever. Business Associate acknowledges that it is subject to penalties to the extent provided by HITECH and HIPAA. g. Controlling Provisions. In the event that it is impossible to comply with any contract between the parties and this Agreement, the provisions of this Agreement shall control with respect to those provisions of each agreement that expressly conflict. h. Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. i. Severability. In the event any provision of this Agreement is rendered invalid or unenforceable under any new or existing law or regulation, or declared null and void by any court of competent jurisdiction, the remainder of the provisions of this Agreement shall remain in full force and effect if it reasonably can be given effect. This Agreement is the entire document and supersedes any previous agreements on this topic between the parties. j. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. Facsimile copies thereof shall be deemed to be originals. k. Notices. All notices to be given pursuant to the terms of this Agreement with the exception of any notice of a Breach or termination of this Agreement may be sent via regular mail or electronically. Notice of a Breach or termination of this Agreement must be in writing and will be sent certified mail, return receipt requested, postage pre‐paid or by overnight air express mail service.

If to the Plan, notice shall be sent to:

Privacy Officer City of Laguna Woods 24264 El Toro Road Laguna Woods, CA 92637

If to the Business Associate, notice shall be sent to:

Doug Griffith BusinessPlans, Inc. 432 East Pearl Street Miamisburg, OH 45342 l. Independent Contractor Status. In the performance of services on behalf of the Plan, it is mutually understood and agreed that Business Associate and Subcontractors will at all times function as an independent contractor, and not as an agent, partner, joint venture or in any other joint capacity, with respect to the Plan. Nothing in this Agreement is intended to create an agency, employer/employee relationship or a joint venture relationship between the Parties or between the individuals providing services on behalf of the Parties. m. Obligations of Plan to Provide Notice of Privacy Practices

i. Plan shall notify Business Associate of any limitation(s) in Notice of Privacy Practices of Plan under 45 C.F.R. § 164.520, to the extent that such limitation may affect Business Associate’s use or disclosure of protected health information.

ii. Plan shall notify Business Associate of any changes in, or revocation of, the permission by an individual to use or disclose his or her protected health information, to the extent that such changes may affect Business Associate’s use or disclosure of protected health information.

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iii. Plan shall not request Business Associate to use or disclose Protected Health Information in any manner that would not be permissible under the Privacy Rule or the Security Rule if done by Plan.

n. Indemnification. The Business Associate will indemnify the Plan and the Plan Sponsor for a breach of this Agreement but the maximum amount the Business Associate will be required to pay under this Agreement will be limited to the amount the Business Associate received from the Plan and Plan Sponsor during the twelve months immediately preceding the indemnification. The terms of this Paragraph will remain in effect indefinitely regardless of when or why this Agreement terminates.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates listed below.

City of Laguna Woods BusinessPlans, Inc. Plan Sponsor Business Associate

By:______By:______

Printed:______Printed:______

Title:______Title:______

Date:______Date:______

APPROVED AS TO FORM:

______David B. Cosgrove, City Attorney

Page 7 of 7 ITEM 6.4 - Exhibit D to Attachment B

City of Laguna Woods Certification To City of Laguna Woods Group Health Benefit Plan

City of Laguna Woods (the "Plan Sponsor") sponsors the City of Laguna Woods Group Health Benefit Plan (the "Plan").

WHEREAS, the Plan is subject to the privacy rules under the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA") effective March 26, 2013;

WHEREAS, the Plan Sponsor may request certain information from the Plan;

WHEREAS, the Plan will comply with all the applicable privacy rules as of the effective date;

WHEREAS, the privacy rules require certain Plan documents be amended and adequate electronic security measures established (e.g., firewalls) to comply with the HIPAA privacy rules;

NOW THEREFORE, the Plan Sponsor hereby certifies the following to the Plan:

1. Plan Document. The Plan Document includes or has been amended to comply with the Standards for Privacy of Individually Identifiable Health Information under HIPAA and the Plan Sponsor agrees to comply with the terms and conditions in the amendment.

2. Establishment of Firewalls. The Plan Sponsor agrees to establish and maintain adequate software and hardware network security systems commonly referred to as a firewall. Firewalls control incoming and outgoing network traffic. A firewall protects the network by creating a barrier between the network and would be intruders.

3. Disclosure of Protected Health Information ("PHI") to the Plan Sponsor for Plan Administration Activities. The Plan Sponsor agrees to comply with the provisions of HIPAA so that the Plan may disclose PHI to the Plan Sponsor for Plan Administration Functions.

a. "Plan Administration Functions" are limited to activities that would meet the definition of payment or health care operations under HIPAA but do not include functions to modify, amend or terminate the Plan or solicit bids from prospective issuers. "Plan Administration Functions" include quality assurance, claims processing, auditing, monitoring and management of carve-out plans, such as vision and dental. It does not include any employment-related functions or functions in connection with any other benefit or benefit plans.

a. City of Laguna Woods, as sponsor for the City of Laguna Woods Group Health Benefit Plan, understands that there may be an occasional requirement for PHI to be released on an as-needed basis to non-listed personnel. We understand that the BusinessPlans Privacy Official is required to review each non-recurring request for PHI disclosure to determine eligibility. If necessary, the Privacy Official will consult with professionals to help determine the minimum necessary disclosure of PHI. As a result, response to requests for non-recurring PHI may be slightly delayed.

b. The City of Laguna Woods Group Health Benefit Plan understands that City of Laguna Woods should notify BusinessPlans immediately, by phone when possible, should any listed employee no longer be authorized trusted access to PHI.

c. The personnel listed below are authorized trusted access to PHI. This authorization may be updated at any time by the City of Laguna Woods Group Health Benefit Plan with a record copy to BusinessPlans.

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Personnel Authorized to Receive PHI Name Department Position Contact Method/Information

IN WITNESS WHEREOF, the Plan Sponsor, by duly authorized officer, has executed this Certification this_____ day of ______, 20____.

City of Laguna Woods

By______

Printed Name______

Title______Page 2 of 3

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6.5 LAW ENFORCEMENT SERVICES AGREEMENT

This page is intentionally blank. ITEM 6.5

AGREEMENT

2 BETWEEN THE

3 CITY OF LAGUNA WOODS

4 AND THE

5 COUNTY OF ORANGE

7 THIS AGREEMENT is entered into this First day of May 2016, which date

8 is enumerated for purposes of reference only, by and between the CITY OF LAGUNA

9 WOODS, hereinafter referred to as "CITY", and the COUNTY OF ORANGE, a political

10 subdivision of the State of California, hereinafter referred to as "COUNTY".

11 WITNESSETH:

12 WHEREAS, CITY wishes to contract with COUNTY for law enforcement

13 services; and

14 WHEREAS, COUNTY is agreeable to the rendering of such services, as

15 authorized in Government Code Sections 51301 and 55632, on the terms and

16 conditions hereinafter set forth,

17 NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:

18 //

19 II

20 II

21 II

22 II

23 II

24 II

25 II

26 II

27 II

28 II

Page 1 of 22 TABLE OF CONTENTS

2 SECTION PAGE

3 A. TERM ...... 3

4 B. OPTIONAL TERMINATION OR EXTENSION ...... 3

5 C. REGULAR SERVICES BY COUNTY ...... 3

6 D. ENHANCED AND SUPPLEMENTAL SERVICES BY COUNTY ...... 6

7 E. PATROL VIDEO SYSTEMS ...... 9

8 F. LICENSING SERVICES BY CITY ...... 10

9 G. PAYMENT ...... 11

10 H. NOTICES ...... 14

11 I. STATUS OF COUNTY ...... 15

12 J . STATE AUDIT ...... 15

13 K. ALTERATION OF TERMS ...... 15

14 L. INDEMNIFICATION ...... 15

15 M. TRAFFIC VIOLATOR APPREHENSION PROGRAM ...... 17

16 N. MOBILE DATA COMPUTERS ...... 20

17 SIGNATURE PAGE ...... 22

18 Attachment A: Regular Services by County

19 Attachment B: City Ordinances

20 Attachment C: Payment

21 Attachment D: County Billing Policy

22 Attachment E: Forfeited and Seized Asset Policy

23 Attachment F: TV AP Resolution

24 Attachment G: TVAP Form

25 II

26 II

21 II

28 II

Page 2 of 22 A. TERM:

2 The term of this Agreement shall commence July 1 , 2016 and terminate

3 June 30, 2017 unless earlier terminated by either party or extended in the

4 manner set forth herein.

5 B. OPTIONAL TERMINATION OR EXTENSION:

6 1. COUNTY or CITY may terminate this Agreement, without cause, upon one

7 hundred and eighty (180) days written notice to the other party.

8 2. If COUNTY and CITY have not entered into a written agreement by

9 June 30, 2017 for COUNTY to provide to CITY, during all or part of the

10 period between July 1, 2017 and June 30, 2018, law enforcement services

11 similar to those specified herein, then SHERIFF, on behalf of COUNTY, and

12 CITY's Manager, on behalf of CITY, are authorized to execute a written

13 amendment to this Agreement that provides as follows and does not

14 materially alter other terms of the Agreement: SHERIFF shall continue to

15 provide to CITY all or a designated part of the law enforcement services

16 specified herein, for a specified time period between July 1, 2017 and

17 August 31 , 2017 and CITY shall pay COUNTY the full costs of providing

18 such services. Such full costs may be greater than those listed herein for

19 the period July 1, 2016 through June 30, 2017. SHERIFF and CITY

20 Manager shall file copies of any such amendments to this Agreement with

21 the Clerk of COUNTY's Board of Supervisors and CITY's Clerk.

22 c. REGULAR SERVICES BY COUNTY:

23 1. COUNTY, through its Sheriff-Coroner and deputies, officers and employees,

24 hereinafter referred to as "SHERIFF", shall render to CITY law enforcement

25 services as hereinafter provided. Such services shall include the

26 enforcement of lawful State statutes and lawful municipal ordinances of

27 CITY other than licensing ordinances.

28 II

Page 3 of 22 c. REGULAR SERVICES BY COUNTY: (Continued)

2 2. The night, day and evening patrol and supervisory shifts will be established

3 by SHERIFF. Personnel of each shift may work varying and different times

4 and may be deployed to other shifts when, in the opinion of SHERIFF and

5 CITY Manager, the need arises. Any long-term shift deployment change will

6 be reported to CITY's Council.

7 3. The level of service, other than for licensing, to be provided by COUNTY for

8 the period July 1, 2016 through June 30, 2017, is set forth in Attachment A

9 and incorporated herein by this reference.

10 4. For any service listed in Attachment A in this Agreement that is provided to

11 CITY at less than 100% of a full-time SHERIFF position, COUNTY retains

12 the option to terminate such service in the event the other city or cities that

13 contract(s) for the balance of the time of the employee providing the service

14 no longer pay(s) for such service and CITY does not request the Agreement

15 be amended to provide for payment of 100% of the cost of the employee

16 providing such service. The Maximum Obligation of CITY set forth in

17 Subsection G-2 will be adjusted accordingly.

18 5. All services contracted for in this Agreement may not be operational on the

19 precise date specified in this Agreement. In those instances, SHERIFF shall

20 notify CITY Manager of the date or dates such service or services are to be

21 implemented. COUNTY shall reduce the monthly charges to CITY, based

22 on the actual date of implementation of the service or services. Charges

23 shall be reduced on the next monthly billing tendered in accordance with

24 Subsection G-3 of this Agreement.

25 6. During emergencies, such as mutual aid situations, SHERIFF will attempt to

26 staff the CITY's Emergency Operations Center (EOC) with a Lieutenant or

27 Sergeant to assist the CITY with the operations of the EOC. Such services

28 may be considered supplemental to the contract and chargeable to the CITY

Page 4 of 22 c. REGULAR SERVICES BY COUNTY: (Continued)

2 on a time and material basis to the extent the services provided are at a level

3 greater than that specified in Attachment A of this Agreement.

4 7. With respect to the licensing ordinances of CITY listed in Attachment B

5 hereto, which is incorporated herein by this reference, SHERIFF shall

6 receive applications for CITY licenses pursuant to said ordinances and

7 complete investigations relating to such applications. Such investigations

8 shall be forwarded to CITY Manager. COUNTY shall not provide any

9 advisory, administrative, hearing or litigation attorney support or services

10 related to licensing. COUNTY shall not provide any administrative or

11 investigatory services related to the licensing ordinances listed in Attachment

12 B hereto, except the investigations relating to initial applications for which

13 this subsection provides.

14 In the event, CITY amends Attachment B, CITY's Manager, on behalf of

15 CITY, and SHERIFF, on behalf of COUNTY, have authority to execute an

16 amendment of this Agreement to substitute CITY's amended Attachment B

17 hereto, as long as said Amendment to this Agreement does not materially

18 change any other provision of this Agreement.

19 8. With the limitations set forth below, SHERIFF, on behalf of COUNTY, and

20 CITY Manager, on behalf of CITY, are authorized to execute written

21 amendments to this Agreement to increase or decrease the level of service

22 set forth in Attachment A, when SHERIFF and CITY Manager mutually agree

23 that such increase or decrease in the level of service is appropriate. Any

24 such amendment to the Agreement shall concomitantly increase or decrease

25 the cost of services payable by CITY set forth in Attachment C and

26 incorporated herein by this reference, and the Maximum Obligation of CITY

27 set forth in Subsection G-2, in accordance with the current year's COUNTY

28 law enforcement cost study. SHERIFF and CITY Manager shall file copies

Page 5 of 22 c. REGULAR SERVICES BY COUNTY: (Continued)

2 of any such amendments to this Agreement with the Clerk of COUNTY's

3 Board of Supervisors and CITY's Clerk. Amendments to this Agreement

4 executed by SHERIFF and CITY Manager may not, in the aggregate,

5 increase or decrease the cost of services payable by CITY by more than one

6 percent (1 %) of the total cost originally set forth in Attachment C and the

7 Maximum Obligation originally set forth in Subsection G-2.

8 Prior approval by COUNTY's Board of Supervisors and CITY's Council is

9 required before execution of any amendment that brings the aggregate total

10 of changes in costs payable by CITY to more than one percent (1 %) of the

11 total cost originally set forth in Attachment C and the Maximum Obligation

12 originally set forth in Subsection G-2 of this Agreement.

13 9. SHERIFF shall consider input from the CITY Manager regarding the

14 selection and assignment of a Lieutenant to provide services to CITY.

15 D. ENHANCED AND SUPPLEMENTAL SERVICES BY COUNTY:

16 1. Enhanced services for events on CITY property. At the request of CITY,

17 through its City Manager, SHERIFF may provide enhanced law enforcement

18 services for functions, such as community events, conducted on property

19 that is owned, leased or operated by CITY. SHERIFF shall determine

20 personnel and equipment needed for such enhanced services. To the

21 extent the services provided at such events are at a level greater than that

22 specified in Attachment A of this Agreement, CITY shall reimburse COUNTY

23 for such additional services, at an amount computed by SHERIFF, based on

24 the current year's COUNTY law enforcement cost study. The cost of these

25 enhanced services shall be in addition to the Maximum Obligation of CITY

26 set forth in Subsection G-2 of this Agreement. SHERIFF shall bill CITY

27 immediately after each such event.

28 II

Page 6 of 22 D. ENHANCED AND SUPPLEMENTAL SERVICES BY COUNTY: (Continued)

2 2. Supplemental services for occasional events operated by private individuals

3 and entities on non-CITY property. At the request of CITY, through its City

4 Manager, and within the limitations set forth in this Subsection D-2,

5 SHERIFF may provide supplemental law enforcement services to preserve

6 the peace at special events or occurrences that occur on an occasional

7 basis and are operated by private individuals or private entities on non-CITY

8 property. SHERIFF shall determine personnel and equipment needed for

9 such supplemental services, and will provide such supplemental services

10 only if SHERIFF is able to do so without reducing the normal and regular

11 ongoing services that SHERIFF otherwise would provide to CITY pursuant to

12 this Agreement. Such supplemental services shall be provided only by

13 regularly appointed full-time peace officers, at rates of pay governed by a

14 Memorandum of Understanding between COUNTY and the bargaining

15 unit(s) representing the peace officers providing the services. Such

16 supplemental services shall include only law enforcement duties and shall

17 not include services authorized to be provided by a private patrol operator,

18 as defined in Section 7582.1 of the Business and Professions Code. Law

19 enforcement support functions, including, but not limited to, clerical functions

20 and forensic science services, may be performed by non-peace officer

21 personnel if the services do not involve patrol or keeping the peace and are

22 incidental to the provision of law enforcement services. CITY shall reimburse

23 COUNTY its full, actual costs of providing such supplemental services at an

24 amount computed by SHERIFF, based on the current year's COUNTY law

25 enforcement cost study. The cost of these supplemental services shall be in

26 addition to the Maximum Obligation of CITY set forth in Subsection G-2 of

27 this Agreement. SHERIFF shall bill CITY immediately after each such event.

28 II

Page 7 of 22 D. ENHANCED AND SUPPLEMENTAL SERVICES BY COUNTY: (Continued)

2 3. Supplemental services for events operated by public entities on non-CITY

3 property. At the request of CITY, through its City Manager, and within the

4 limitations set forth in this subsection D-3, SHERIFF may provide

5 supplemental law enforcement services to preserve the peace at special

6 events or occurrences that occur on an occasional basis and are operated

7 by public entities on non-CITY property. SHERIFF shall determine personnel

8 and equipment needed for such supplemental services, and will provide

9 such supplemental services only if SHERIFF is able to do so without

10 reducing services that SHERIFF otherwise would provide to CITY pursuant

11 to this Agreement. CITY shall reimburse COUNTY its full, actual costs of

12 providing such supplemental services at an amount computed by SHERIFF,

13 based on the current year's COUNTY law enforcement cost study. The cost

14 of these supplemental services shall be in addition to the Maximum

15 Obligation of CITY set forth in Subsection G-2 of this Agreement. SHERIFF

16 shall bill CITY immediately after each such event.

17 4. Notwithstanding the foregoing, CITY, through its permit process, may utilize

18 the services of SHERIFF at events, for which CITY issues permits, that are

19 operated by private individuals or entities or public entities. SHERIFF shall

20 determine personnel and equipment needed for said events. If said events

21 are in addition to the level of services listed in Attachment A of this

22 Agreement, CITY shall reimburse COUNTY for such additional services at

23 an amount computed by SHERIFF, based upon the current year's COUNTY

24 law enforcement cost study. The cost of these services shall be in addition to

25 the Maximum Obligation of CITY set forth in Subsection G-2 of this

26 Agreement. SHERIFF shall bill CITY immediately after said services are

27 rendered.

28 II

Page 8 of 22 D. ENHANCED AND SUPPLEMENTAL SERVICES BY COUNTY: (Continued)

2 5. In accordance with Government Code Section 51350, COUNTY has

3 adopted Board Resolution 89-1160 which identifies Countywide services,

4 including but not limited to helicopter response. SHERIFF through this

5 contract provides enhanced helicopter response services. The cost of

6 enhanced helicopter response services is included in the cost of services set

7 forth in Attachment C and in the Maximum Obligation of CITY set forth in

8 Subsection G-2. COUNTY shall not charge any additional amounts for

9 enhanced helicopter services after the cost of services set forth in

10 Attachment C and in the Maximum Obligation set forth in Subsection G-2

11 has been established without written notification to the CITY.

12 E. PATROL VIDEO SYSTEMS:

13 1. As part of the law enforcement services to be provided to CITY, COUNTY

14 has provided, or will provide, patrol video systems (hereinafter called "PVS")

15 that are or will be mounted in patrol vehicles designated by COUNTY for use

16 within CITY service area.

17 2. SHERIFF has the exclusive right to use said PVS for law enforcement

18 services related to this Agreement.

19 3. CITY shall pay COUNTY the full costs to COUNTY of a) the acquisition and

20 installation of PVS that are or will be mounted in patrol vehicles assigned to

21 CITY, and b) recurring costs, as deemed necessary by COUNTY, including

22 the costs of maintenance and contributions to a fund for replacement and

23 upgrade of such PVS when they become functionally or technologically

24 obsolete. The costs to be paid by CITY for recurring costs, including

25 maintenance and replacement/upgrade of PVS, are included in the costs set

26 forth in Attachment C and the Maximum Obligation of CITY set forth in

27 Subsection G-2 of this Agreement unless CITY has already paid such costs.

28 CITY shall not be charged additional amounts for maintenance or

Page 9 of 22 E. PATROL VIDEO SYSTEMS: (Continued)

2 replacement/upgrade of said PVS during the period July 1, 2016 through

3 June 30, 2017.

4 4. If, following the initial acquisition of PVS referenced above, CITY requires

5 PVS for additional patrol cars designated for use in the CITY service area,

6 COUNTY will purchase said additional PVS. Upon demand by COUNTY,

7 CITY will pay to COUNTY a) the full costs of acquisition and installation of

8 said additional PVS, and b) the full recurring costs for said PVS, as deemed

9 necessary by COUNTY, including the costs of maintenance, and

10 contributions to a fund for replacement and upgrade of such PVS when they

11 become functionally or technologically obsolete. Said costs related to

12 additional PVS are not included in, and are in addition to, the costs set forth

13 in Attachment C and the Maximum Obligation of CITY set forth in Subsection

14 G-2 of this Agreement.

15 5. COUNTY will replace and/or upgrade PVS as needed. The costs of

16 replacing/upgrading PVS shall be paid by COUNTY from the

17 replacement/upgrade funds to be paid by CITY in accordance with the

18 foregoing. CITY shall not be charged any additional charge to replace or

19 upgrade PVS.

20 F. LICENSING SERVICES BY CITY:

21 Upon receipt from COUNTY of investigations of applications for licenses

22 referred to in Subsection C-7 of this Agreement, CITY Manager shall determine

23 whether to grant or deny the licenses and will issue the licenses or notify the

24 applicants of denial. CITY shall provide all attorney services related to the

25 granting, denial, revocation and administration of said licenses and the

26 enforcement of CITY ordinances pertaining to said licenses.

27 II

28 //

Page 10 of 22 G. PAYMENT:

2 1 . Pursuant to Government Code Section 51350, CITY agrees to pay to

3 COUNTY the full costs of performing the services mutually agreed upon in

4 this Agreement. The costs of services include salaries, wages, benefits,

5 mileage, services, supplies, equipment, and divisional, departmental and

6 COUNTY General overhead.

7 2. Unless the level of service set forth in Attachment A is increased or

8 decreased by mutual agreement of the parties, or CITY is required to pay for

9 increases as set forth in Subsection G-4, the Maximum Obligation of CITY

10 for services, other than Licensing Services, set forth in Attachment A of this

11 Agreement, to be provided by COUNTY for the period July 1, 2016 through

12 June 30, 2017 shall be $2,592,120 as set forth in Attachment C.

13 The overtime costs included in the Agreement are only an estimate.

14 SHERIFF shall notify CITY of actual overtime worked during each fiscal

15 year. If actual overtime worked is above or below budgeted amounts,

16 billings will be adjusted accordingly at the end of the fiscal year. Actual

17 overtime costs may exceed CITY's Maximum Obligation.

18 3. COUNTY shall invoice CITY monthly. During the period of July 1, 2016

19 through June 30, 2017, said invoices will require payment by CITY of one

20 twelfth (1 /12) of the Maximum Obligation of CITY set forth in Subsection G-2

21 of this Agreement, as said Maximum Obligation may have been increased or

22 decreased pursuant to mutual agreement of the parties. In addition, if a

23 determination is made that increases described in Subsection G-4 must be

24 paid, COUNTY thereafter shall include the pro-rata charges for such

25 increases in its monthly invoices to CITY for the balance of the period

26 between July 1, 2016 and June 30, 2017.

27 //

28 //

Page 11 of 22 G. PAYMENT: (Continued)

2 4.a. At the time this Agreement is executed, there are unresolved issues

3 pertaining to potential changes in salaries and benefits for COUNTY

4 employees. The costs of such potential changes are not included in the

5 Fiscal Year 2016-17 cost set forth in Attachment C nor in the Fiscal Year

6 2016-17 Maximum Obligation of CITY set forth in Subsection G-2 of this

7 Agreement. If the changes result in the COUNTY incurring or becoming

8 obligated to pay for increased costs for or on account of personnel whose

9 costs are included in the calculations of costs charged to CITY hereunder,

10 CITY shall pay COUNTY, in addition to the Maximum Obligation set forth in

11 Subsection G-2 of this Agreement, the full costs of said increases to the

12 extent such increases are attributable to work performed by such personnel

13 after July 1, 2016, and CITY's Maximum Obligation hereunder shall be

14 deemed to have increased accordingly. CITY shall pay COUNTY in full for

15 such increases on a pro-rata basis over the portion of the period between

16 July 1, 2016 and June 30, 2017 remaining after COUNTY notifies CITY that

17 increases are payable. If the changes result in the COUNTY incurring or

18 becoming obligated to pay for decreased costs for or on account of personnel

19 whose costs are included in the calculations of costs charged to CITY

20 hereunder, COUNTY shall reduce the amount owed by the CITY to the extent

21 such decreases are attributable to work performed by such personnel during

22 the period July 1, 2016 through June 30, 2017, and CITY's Maximum

23 Obligation hereunder shall be deemed to have decreased accordingly.

24 COUNTY shall reduce required payment by CITY in full for such decreases

25 on a pro-rata basis over the portion of the period between July 1, 2016 and

26 June 30, 2017 remaining after COUNTY notifies CITY that the Maximum

27 Obligation has decreased.

28 / /

Page 12 of 22 G. PAYMENT: (Continued)

2 4.b. If CITY is required to pay for increases as set forth in Subsection G-4a

3 above, COUNTY, at the request of CITY, will thereafter reduce the level of

4 service to be provided to CITY, as set forth in Attachment A of this

5 Agreement to a level that will make the Maximum Obligation of CITY

6 hereunder for the period July 1, 2016 through June 30, 2017 an amount

7 specified by CITY that is equivalent to or higher or lower than the Maximum

8 Obligation set forth in Subsection G-2 for said period at the time this

9 Agreement originally was executed. The purpose of such adjustment of

1 o service levels will be to give CITY the option of keeping its Maximum

11 Obligation hereunder at the pre-increase level or at any other higher or lower

12 level specified by CITY. In the event of such reduction in level of service

13 and adjustment of costs, the parties shall execute an amendment to this

14 Agreement so providing. Decisions about how to reduce the level of service

15 provided to CITY shall be made by SHERIFF with the approval of CITY.

16 6. CITY shall pay COUNTY in accordance with COUNTY Board of Supervisors'

17 approved County Billing Policy, which is attached hereto as Attachment D

18 and incorporated herein by this reference.

19 7. COUNTY shall charge CITY late payment penalties in accordance with the

20 County Billing Policy.

21 8. As payment for the Licensing Services described in Subsection C-7 of this

22 Agreement, COUNTY shall retain all fees paid by applicants for licenses

23 pursuant to CITY ordinances listed in Attachment B hereto. Retention of

24 said fees by COUNTY shall constitute payment in full to COUNTY for costs

25 incurred by COUNTY in performing the functions related to licensing

26 described in Subsection C-7; provided, however, that if any of said fees are

27 waived or reduced by CITY, CITY shall pay to COUNTY the difference

28 between the amount of fees retained by COUNTY and the fees that were set

Page 13 of 22 G. PAYMENT: (Continued)

2 forth in the ordinances listed in Attachment B at the time this Agreement was

3 executed. If CITY increases the fee schedule for the licensing ordinances

4 set forth in Attachment B, either party shall have the right to seek

5 amendment of this Agreement with respect to the division of the increased

6 fees between CITY and COUNTY.

7 9. Fees generated or collected by SHERIFF contract personnel for copying of

8 documents related to the services provided in this Agreement will be at

9 COUNTY -established rates and will be credited to CITY on an annual basis.

10 10. Narcotic asset forfeitures will be handled pursuant to Attachment E hereto,

11 which is incorporated herein by this reference.

12 H. NOTICES:

13 1. Except for the notices provided for in Subsection 2 of this Section, all notices

14 authorized or required by this Agreement shall be effective when written and

15 deposited in the United States mail, first class postage prepaid and

16 addressed as follows:

17 CITY: ATTN: CITY MANAGER

18 24264 EL TORO ROAD

19 LAGUNA WOODS, CA 92653

20 COUNTY: ATTN: LAW ENFORCEMENT CONTRACT MANAGER

21 SHERIFF-CORONER DEPARTMENT

22 320 NORTH FLOWER STREET, SUITE 108

23 SANTA ANA, CA 92703

24 2. Termination notices shall be effective when written and deposited in the

25 United States mail, certified, return receipt requested and addressed as

26 above.

27 //

28 II

Page 14 of 22 I. STATUS OF COUNTY:

2 COUNTY is, and at all times shall be deemed to be, an independent contractor.

3 Nothing herein contained shall be construed as creating the relationship of

4 employer and employee, or principal and agent, between CITY and COUNTY or

5 any of COUNTY's agents or employees. COUNTY and its SHERIFF shall retain

6 all authority for rendition of services, standards of performance, control of

7 personnel, and other matters incident to the performance of services by

8 COUNTY pursuant to this Agreement. COUNTY, its agents and employees

9 shall not be entitled to any rights or privileges of CITY employees and shall not

10 be considered in any manner to be CITY employees.

11 J. STATE AUDIT:

12 Pursuant to Government Code Section 8546.7, CITY and COUNTY shall be

13 subject to examination and audit by the State Auditor for a period of three (3)

14 years after final payment by CITY to COUNTY under this Agreement. CITY and

15 COUNTY shall retain all records relating to the performance of this Agreement

16 for said three-year period, except that those records pertaining to any audit then

17 in progress, or to any claims or litigation, shall be retained beyond said three

18 year period until final resolution of said audit, claim or litigation.

19 K. ALTERATION OF TERMS:

20 This Agreement fully expresses all understanding of CITY and COUNTY with

21 respect to the subject matter of this Agreement and shall constitute the total

22 Agreement between the parties for these purposes. No addition to, or alteration

23 of, the terms of this Agreement shall be valid unless made in writing, formally

24 approved and executed by duly authorized agents of both parties.

25 L. INDEMNIFICATION:

26 1. COUNTY, its officers, agents, employees, subcontractors and independent

27 contractors shall not be deemed to have assumed any liability for the

28 negligence or any other act or omission of CITY or any of its officers,

Page 15 of 22 L. INDEMNIFICATION: (Continued)

2 agents, employees, subcontractors or independent contractors, or for any

3 dangerous or defective condition of any public street or work or property of

4 CITY, or for any illegality or unconstitutionality of CITY's municipal

5 ordinances. CITY shall indemnify and hold harmless COUNTY and its

6 elected and appointed officials, officers, agents, employees, subcontractors

7 and independent contractors from any claim, demand or liability whatsoever

8 based or asserted upon the condition of any public street or work or

9 property of CITY, or upon the illegality or unconstitutionality of any

10 municipal ordinance of CITY that SHERIFF has enforced, or upon any act

11 or omission of CITY, or its elected and appointed officials, officers, agents,

12 employees, subcontractors or independent contractors related to this

13 Agreement, including, but not limited to, any act or omission related to the

14 maintenance or condition of any vehicle or motorcycle that is owned or

15 possessed by CITY and used by COUNTY personnel in the performance of

16 this Agreement, for property damage, bodily injury or death or any other

17 element of damage of any kind or nature, and CITY shall defend, at its

18 expense including attorney fees, and with counsel approved in writing by

19 COUNTY, COUNTY and its elected and appointed officials, officers, agents,

20 employees, subcontractors and independent contractors in any legal action

21 or claim of any kind based or asserted upon such condition of public street

22 or work or property, or illegality or unconstitutionality of a municipal

23 ordinance, or alleged acts or omissions. If judgment is entered against

24 CITY and COUNTY by a court of competent jurisdiction because of the

25 concurrent active negligence of either party, CITY and COUNTY agree that

26 liability will be apportioned as determined by the court. Neither party shall

27 request a jury apportionment.

28 //

Page 16 of 22 L. INDEMNIFICATION: (Continued)

2 2. COUNTY shall indemnify and hold harmless CITY and its elected and

3 appointed officials, officers, agents, employees, subcontractors and

4 independent contractors from any claim, demand or liability whatsoever

5 based or asserted upon any act or omission of COUNTY or its elected and

6 appointed officials, officers, agents, employees, subcontractors or

7 independent contractors related to this Agreement, for property damage,

8 bodily injury or death or any other element of damage of any kind or nature,

9 and COUNTY shall defend, at its expense, including attorney fees, and with

10 counsel approved in writing by CITY, CITY and its elected and appointed

11 officials, officers, agents, employees, subcontractors and independent

12 contractors in any legal action or claim of any kind based or asserted upon

13 such alleged acts or omissions.

14 M. TRAFFIC VIOLATOR APPREHENSION PROGRAM:

15 1. COUNTY has established a Traffic Violator Apprehension Program ("the

16 Program"], which is operated by SHERIFF, and is designed to reduce

17 vehicle accidents caused by unlicensed drivers and drivers whose licenses

18 are suspended and to educate the public about the requirements of the

19 Vehicle Code and related safety issues with regard to driver licensing,

20 vehicle registration, vehicle operation, and vehicle parking. The Program

21 operates throughout the unincorporated areas of the COUNTY and in the

22 cities that contract with COUNTY for SHERIFF's law enforcement services,

23 without regard to jurisdictional boundaries, because an area-wide approach

24 to reduction of traffic accidents and driver education is most effective in

25 preventing traffic accidents. In order for CITY to participate in the Program,

26 CITY has adopted a fee pursuant to Vehicle Code Section 22850.5, in the

27 amount and under the terms and conditions set forth in the resolution that is

28 attached hereto as Attachment F and incorporated into this Agreement by

Page 17 of 22 M. TRAFFIC VIOLATOR APPREHENSION PROGRAM: (Continued)

2 reference [hereinafter called a "TVAP resolution"], and has directed that the

3 revenue from such fee be used for the Program. CITY's participation in the

4 Program may be terminated at any time by rescission or amendment of the

5 TVAP resolution that is attached hereto as Attachment F. In the event CITY

6 1) amends said TVAP resolution, or rescinds said TVAP resolution and

7 adopts a new TVAP resolution pertaining to the above-referenced fee and

8 the Program, and 2) remains a participant in the Program thereafter, CITY's

9 Manager, on behalf of CITY, and SHERIFF, on behalf of COUNTY, have

10 authority to execute an amendment of this Agreement to substitute CITY's

11 amended or new TVAP resolution for Attachment F hereto, as long as said

12 amendment to this Agreement does not materially change any other

13 provision of this Agreement.

14 2. COUNTY will make available for review, at the request of CITY, all financial

15 data related to the Program as may be requested by CITY.

16 3. Fee revenue generated by COUNTY and participating cities will be used to

17 fund the following positions, which will be assigned to the Program:

18 • Fifteen one hundredths of one (0.15) Sergeant

19 (12 hours per two-week pay period)

20 • One (1) Staff Specialist

21 (80 hours per two-week pay period)

22 • One (1) Office Specialist

23 (80 hours per two-week pay period)

24 4. Fee revenue generated by CITY may be used to reimburse CITY for

25 expenditures for equipment and/or supplies directly in support of the

26 Program. In order for an expenditure for equipment and/or supplies to be

27 eligible for reimbursement, CITY shall submit a request for and obtain pre

28 approval of the expenditure by using the form as shown in Attachment G.

Page 18 of 22 M. TRAFFIC VIOLATOR APPREHENSION PROGRAM: (Continued)

2 The request shall be submitted within the budget schedule established by

3 SHERIFF. SHERIFF shall approve the expenditure only if both of the

4 following conditions are satisfied: 1) there are sufficient Program funds,

5 attributable to revenue generated by CITY's fee, to pay for the requested

6 purchase, and 2) CITY will use the equipment and/or supplies, during their

7 entire useful life, only for purposes authorized by its TVAP resolution in

8 effect at the time of purchase. In the event that CITY terminates its

9 participation in the Program, CITY agrees that the equipment purchased by

10 CITY and reimbursed by Program funds will continue to be used, during the

11 remainder of its useful life, exclusively for the purposes authorized by CITY's

12 TVAP resolution in effect at the time of purchase.

13 5. In the event the fees adopted by COUNTY, CITY and other participating

14 jurisdictions are not adequate to continue operation of the Program at the

15 level at which it operated previously, COUNTY, at the option of CITY, will

16 reduce the level of Program service to be provided to CITY or will continue to

17 provide the existing level of Program services. COUNTY will charge CITY

18 the cost of any Program operations that exceed the revenue generated by

19 fees. Such charges shall be in addition to the Maximum Obligation of CITY

20 set forth in Subsection G-2 of this Agreement. The amount of any revenue

21 shortfall charged to CITY will be determined, at the time the revenue shortfall

22 is experienced, according to CITY's share of Program services rendered. In

23 the event of a reduction in level of Program service, termination of Program

24 service or adjustment of costs, the parties shall execute an amendment to

25 this Agreement so providing. Decisions about how to reduce the level of

26 Program service provided to CITY shall be made by SHERIFF with the

27 approval of CITY.

28 II

Page 19 of 22 N. MOBILE DATA COMPUTERS:

2 1. As part of the law enforcement services to be provided to CITY, COUNTY

3 has provided, or will provide, mobile data computers (hereinafter called

4 "MDCs") that are or will be mounted in patrol vehicles and motorcycles

5 designated by COUNTY for use within CITY limits.

6 2. SHERIFF has the exclusive right to use said MDCs for law enforcement

7 services related to this Agreement.

8 3. CITY shall pay COUNTY the full costs to COUNTY of a) the acquisition and

9 installation of MDCs that are or will be mounted in patrol vehicles and

10 motorcycles assigned to CITY, and b) recurring costs, as deemed necessary

11 by COUNTY, including the costs of maintenance and contributions to a fund

12 for replacement and upgrade of such MDCs when they become functionally

13 or technologically obsolete.

14 The costs to be paid by CITY for recurring costs, including maintenance and

15 replacement/upgrade of MDCs, are included in the costs set forth in

16 Attachment C and the Maximum Obligation of CITY set forth in Subsection

17 G-2 of this Agreement unless CITY has already paid such costs. CITY shall

18 not be charged additional amounts for maintenance or replacement/upgrade

19 of said MDCs during the period July 1, 2016 through June 30, 2017.

20 4. If, following the initial acquisition of MDCs referenced above, CITY requires

21 MDCs for additional patrol cars designated for use in the CITY, or for CITY's

22 Emergency Operations Center, COUNTY will purchase said additional

23 MDCs. Upon demand by COUNTY, CITY will pay to COUNTY a) the full

24 costs of acquisition and installation of said additional MDCs, and b) the full

25 recurring costs for said MDCs, as deemed necessary by COUNTY, including

26 the costs of maintenance, and contributions to a fund for replacement and

27 upgrade of such MDCs when they become functionally or technologically

28 obsolete. Said costs related to additional MDCs are not included in, and are

Page 20 of 22 N. MOBILE DATA COMPUTERS: (Continued)

2 in addition to, the costs set forth in Attachment C and the Maximum

3 Obligation of CITY set forth in Subsection G-2 of this Agreement.

4 5. COUNTY will replace and/or upgrade MDCs as needed. The costs of

5 replacing/upgrading MDCs shall be paid by COUNTY from the

6 replacement/upgrade funds to be paid by CITY in accordance with the

7 foregoing. CITY shall not be charged any additional charge to replace or

8 upgrade MDCs.

9 II

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28 II

Page 21 of 22 IN WITNESS WHEREOF, the parties have executed the AGREEMENT in the

2 County of Orange, State of California. DATED:______3

4 CITY OF LAGUNA WOODS ATTEST:______5 City Clerk BY: ------6 Mayor 7 APPROVED AS TO FORM:

8 BY:------9 City Attorney

10 ------

11 DATED:______

12 COUNTY OF ORANGE

14 BY: ______Chairwoman of the Board of Supervisors 15 County of Orange, California

17 SIGNED AND CERTIFIED THAT A COPY OF THIS AGREEMENT HAS BEEN DELIVERED TO THE CHAIR 18 OF THE BOARD PER G.C. Sec. 25103, Reso 79-1535 Attest: 19

21 Robin Stieler Clerk of the Board 22 County of Orange, California 23 APPROVED AS TO FORM: Office of the County Counsel 24 County of Orange, California

26 BY: Deputy 27 DATED: 5/5/Jb 28 I

Page 22 of 22 ATTACHMENT A ORANGE COUNTY SHERIFF-CORONER FY 2016-17 LAW ENFORCEMENT CONTRACT CITY OF LAGUNA WOODS .. REGULAR SERVICES BY COUNTY" (Subsection C-3) LEVEL OF SERVICE PROVIDED BY SHERIFF·. Title Detail Quantity Frequency INVESTIGATION SERVICES: Investigator 1.00 80 hrs./ per two wk. pay period PATROL AND TRAFFIC SERVICES'*: Sergeant Patrolffraffic 1.00 80 hrs./ per two wk. pay period Sergeant Patrolffraffic 0.34 27.20 hrs./per two wk. pay period Deputy Sheriff II Patrolffraffic 6.00 each, 80 hrs./ per two wk. pay period TOTAL 8.34 • Deployment to be determined by SHERIFF in cooperation with CITY Manager

REGIONAL I SHARED STAFF·. Title Regional Team Quantity % Allocation TRAFFIC: Serqeant Traffic 0.60 1.37% Deputy Sheriff II Traffic 4.00 1.37% lnvestiqative Assistant Traffic 2.00 1.37% Office Specialist Traffic 1.00 1.37% AUTO THEFT: Serqeant Auto Theft 0.30 0.41 % Investigator Auto Theft 2.00 0.41% lnvestiqative Assistant Auto Theft 1.00 0.41 % Office Specialist Auto Theft 1.00 0.41 % DET: Serqeant DET 1.00 0.33% Investigator DET 1.00 0.33% SUBPOENA: Office SQecialist SubQoena 1.00 1.52% COURTS: Investigative Assistant Courts 2.00 0.85% TOTAL 16.90

Page 1 of 1 ATTACHMENT B

CITY OF LAGUNA WOODS

2 LICENSING ORDINANCES

4 BINGO GAME

5 BINGO OFFICIAL

6 CANVASSER/SOLICITOR

7 COIN DEALER

8 COMMERCIAL FORTUNETELLER

9 DANCEINSTRUCTOR(NUDE)

10 DANCE STUDIO (NUDE)

11 ESCORT

12 ESCORT BUREAU

13 FIGURE MODEL (NUDE)

14 FIGURE MODEL STUDIO (NUDE)

15 GUN DEALER

16 INTERLOCUTRIX (NUDE)

17 INTRODUCTORY SERVICE

18 JUNK COLLECTOR

19 JUNK DEALER

20 MEDICAL MARIJUANA DISPENSARY

21 PEDDLER

22 POOLROOM

23 PUBLIC DANCE

24 RAP SESSION (NUDE)

25 SECONDHAND DEALER (Pawnbroker)

26 TAXICAB STAND

28 ATTACHMENT C ORANGE COUNTY SHERIFF-CORONER FY 2016-17 LAW ENFORCEMENT CONTRACT CITY OF LAGUNA WOODS 11 PAVMENT 11 (Subsection G-2)

coST OF SERVICES PROVIDED BY SHERIFF (Subsection G-2): Cost of Service Cost of Service Title Detail Quantity (each) Total INVESTIGATION SERVICES: Investigator 1.00 $ 290,327 $ 290,327 PATROL AND TRAFFIC SERVICES: Sergeant Patroi!T raffic 1.00 $ 293,154 $ 293,154 Sergeant Patroi!Traffic 0.34 $ 293,154 $ 99,673 Deputy Sheriff II Patroi!Traffic 6.00 $ 254,209 $ 1,525,251 TOTAL POSITIONS 8.34 $ 2,208,405

REGIONAL I SHARED STAFF·. Title Regional Team Quantity % Allocation Cost$ TRAFFIC: Sergeant Traffic 0.60 1.37% $ 2,543 Deputy Sheriff II Traffic 4.00 1.37% $ 13,227 Investigative Assistant Traffic 2.00 1.37% $ 3,349 Office Specialist Traffic 1.00 1.37% $ 1,368 AUTO THEFT: Sergeant Auto Theft 0.30 0.41 % $ 378 Investigator Auto Theft 2.00 0.41% $ 2,146 Investigative Assistant Auto Theft 1.00 0.41 % $ 498 Office Specialist Auto Theft 1.00 0.41% $ 406 DET: Sergeant DET 1.00 0.33% $ 1,300 Investigator DET 1.00 0.33% $ 1,089 SUBPOENA: Office Specialist Subpoena 1.00 1.52% $ 1,366 COURTS: Investigative Assistant Courts 2.00 0.85% $ 1,999 TOTAL REGIONAUSHARED 16.90 $ 29,669

OTHER CHARGES AND CREDITS (Subsection G-2): OTHER CHARGES: Other Charges include: Annual leave paydowns and apportionment of cost of leave balances paid at end of employment; premium pay for bilingual staff; contract administration; data line charges; direct services and supplies; enhanced helicopter response services; facility lease; holiday pay; Integrated Law & Justice of Orange County fees; Mobile Data Computer (MDC) recurring costs ; on-call pay; overtime; patrol training cost allocation; Patrol Video System (PVS) recurring costs; and transportation charges.

CREDITS: Credits include: Board of State and Community Corrections Local Assistance funding; estimated vacancy credits; false alarm fees; reimbursement for training and miscellaneous programs; and retirement rate discount for FY 2016-17. TOTAL OTHER CHARGES AND CREDITS $ 354,046

TOTAL COST OF SERVICES (Subsection G-2) $ 2,592,120

Page 1 of 1 ATTACHMENT D

COUNTY BILLING POLICY APPROVED BY BOARD MINUTE ORDER DATED OCTOBER 27,1992

I. POLICY

All County agencies/departments/districts (County) governed by the Board of Supervisors shall bill contracting entities for materials and/or services provided under contract in accordance with the following standardized billing and collection policy. Billing frequency is dependent on whether the contract is a fixed price or actual cost contract. Payment due date is designed to be both responsive to the County's cash flow needs and reasonable enough as to not require special processing by the contracting entity. If payments are not received by the required due dates, a late payment fee shall be computed and billed to the contracting entity in accordance with the requirements of this procedure.

Nothing herein shall affect the liability, including pre-judgment interest, of the contracting party for services or materials in as much as this is a policy to enact standard billing practices.

II. DEFINITIONS

A. Contract for the purposes of this policy - A contract is a formal written agreement, a purchase order from the contracting entity, or any other acceptable mutual understanding between the contracting parties.

B. Received by the County - The phrase "received by the County", as used in Section VI of this policy, refers to the date a payment is received by the County. It is defined as the date the payment is in the County's possession. It is not the date the payment is posted or deposited by the County.

Ill. FIXED PRICE CONTRACTS

A. Fixed Price (One-Time/Non-Recurring Contracts) - Invoices that represent a bill ing for a one-time, non-recurring provision of materials and/or services shall be issued no later than five (5) working days after delivery by the County of the materials and/or services. Examples of such one-time, non-recurring provision of materials and/or services might be a city contracting with the Sheriff for security service at a parade or sporting event; or, a city purchasing a computer listing containing certain city-requested data. Payment due date shall be invoice date plus 30 days.

B. Fixed Price (Ongoing/Recurring Contracts) - Invoices that represent a billing for an ongoing, recurring provision of materials and/or services shall be issued according to the following frequency:

1. Annual Billings that total $10,000 or less per 12-month period shall be billed via one (1) annual invoice. Annual invoices will be issued for each 12-month period of the contract, or portions thereof. Invoices shall be issued no later than five working days after the beginning of each 12-month period. Payment due date shall be invoice date plus 30 days.

Page 1 of 4 2. Quarterly Billings that are greater than $10,000 but not more than $200,000 per 12- month period, shall be billed in quarterly installments. Quarterly invoices will be issued representing the contract amount for each 12-month period of the contract, or portions thereof, prorated into four (4) installments. Invoices shall be issued no later than 30 days after the beginning of each quarter. Payment due date shall be 60 days after the beginning of each calendar quarter.

3. Monthly Billings that are greater than $200,000 per 12-month period shall be billed in monthly installments. Monthly invoices will be issued representing the contract amount for each 12-month period of the contract, or portions thereof, prorated into 12 installments. Invoices shall be issued on or before the first day of each service month. Payment due date shall be 30 days after the beginning of each service month.

An example of a fixed price contract for ongoing, recurring provision of materials and/or services might be a city contracting with the Sheriff for law enforcement services.

IV. ACTUAL COST CONTRACTS

A. Actual Cost (One-Time/Non-Recurring Contracts)- Invoices that represent a billing for a one-time, non-recurring provision of materials and/or services shall be issued after delivery by the County of the materials and/or services and no later than 15 days after actual cost data is available. Payment due date shall be invoice date plus 30 days.

B. Actual Cost (Ongoing/Recurring Contracts) - Invoices that represent a billing for an ongoing, recurring provision of materials and/or services shall be issued on a monthly basis and shall represent the cost of materials and/or services provided to the contracting entity during the previous calendar month. Such invoices shall be issued no later than 15 days after the close of the monthly billing period. If the County agency/departmenVdistrict does not utilize a monthly billing cycle, the invoice shall be issued no later than 15 days after actual cost data is available. Payment due date shall be invoice date plus 30 days.

Examples of actual cost contracts for the ongoing, recurring provision of materials and/or services might be a city contracting with the County for communications equipment repair or waste disposal at a County landfill.

V. PAYMENT DUE DATES

Notwithstanding the provisions of Sections II and Ill above, payment due date shall be at least invoice date plus 30 days. If the County is late in issuing an invoice, the contracting entity would always have at least invoice date plus 30 days to pay. If the County is early in issuing an invoice, the contracting entity would still have a payment due date of either 60 days after the beginning of the quarter (quarterly invoices) or 30 days after the beginning of the service month (monthly invoices).

(EXAMPLES: An invoice for October service, dated and issued October 8 (late) would have a payment due date of November 7. An invoice for August service, dated and issued July 20 (early) would have a payment due date of August 30.)

Page 2 of 4 VI. LATE CHARGES

The late payment of any invoiced amount by a contracting entity will cause the County to incur costs not contemplated by the County/contracting entity agreement, the exact amount of such cost will be extremely difficult to ascertain. Such costs include, but are not limited to, costs such as administrative follow-up and processing of delinquent notices, increased accounting costs, etc.

Late charges will be assessed in the following situations:

- Over-the-counter payments will be assessed a late charge if any payment is not received by the County by the payment due date.

- Payments transmitted to the County via the U.S. Mail that have the payer's postage meter mark will be assessed a late charge if any payment is not received by the County by the payment due date plus one day.

- Payments transmitted to the County via the U.S. Mail that have a U.S. Post Office postmark dated after the payment due date will be assessed a late charge.

The late charge assessed in each of these situations shall be three-quarters of one percent (0.75%) of the payment due and unpaid plus $100.00 for late payments made within 30 days of the payment due date. An additional charge of three-quarters of one percent (0.75%) of said payment shall be added for each additional 30-day period that the payment remains unpaid. Late charges shall be added to the payment and invoiced to the contracting entity in accordance with this policy.

VII. COLLECTIONS

Any invoice remaining unpaid 90 days after the invoice date shall be referred to the Auditor Controller for subsequent collection action, such as deduction from contracting entity moneys on deposit with the County Treasurer in accordance with Government Code Section 907 and any other applicable provision of law. Non-payment of invoices and applicable late charges will constitute a breach of contract for which the County retains all legal remedies including termination of the contract.

VIII. DISCOUNT FOR EARLY PAYMENT

Any payment received by the County from a contracting entity 20 days or more before the payment due date shall be entitled to a discount of one-quarter of one percent (0.25%). If the contracting entity takes a discount, and the payment is received by the County less than 20 days before the payment due date, County staff shall immediately notify the contracting entity by telephone that the discount should not have been taken and that the balance is due by the original payment due date.

If the balance is not received by the County in accordance with the dates as specified in Section VII, applicable late charges shall be calculated on the balance due.

Page 3 of 4 IX. DEFERRED REVENUE

At fiscal year end, any portion of revenue invoiced (not necessarily received) during the fiscal year being closed out that represents charges or prepayment for materials and/or services for the upcoming fiscal year shall be reclassified from a revenue account to a deferred revenue account (liability). In the new fiscal year the deferred revenue shall be reclassified to a revenue account. (EXAMPLE: On June 1, 19X1, a city is invoiced $48,000 which represents charges for the 12-month period June 1, 19X1 to May 31 , 19X2. The amount to be reclassified to deferred revenue would be $44,000, representing 11 /12ths of the total amount. In July 19X1, the $44,000 would be reclassified to revenue.) Reclassification entries shall be made by Auditor-Controller Agency Accounting units, or for those agencies/departments/districts without such a unit, the agency/department/district shall notify the Auditor-Controller of the amounts to be reclassified.

X. COST RECOVERY

All County agencies/department/districts shall include all costs of providing contracted services in contract rates. Including all direct costs, allocated indirect costs such as departmental and County (CWCAP) overhead, and cost of capital financing.

XI. EXISTING CONTRACTS

Billing terms and provisions contained in existing contracting entity agreements (existing as of the date this policy is approved by the Board of Supervisors) shall remain in effect for the life of the contract. However, when these existing contracts are renegotiated, they shall contain the billing provisions as set forth in this policy.

XII. DEVIATIONS FROM POLICY

Deviations from this policy shall be approved by the Board of Supervisors. Proposed deviations by agencies/departments/districts shall be submitted to the CEO for concurrence in advance of filing an Agenda Item Transmittal (AIT) with the Clerk of the Board. The CEO, or his/her designee, shall advise the agency/department/district of approval or disapproval of the proposed deviations. If a County agency/department/district submits a contract to the Board of Supervisors for approval, and the billing provisions in the contract deviate from this policy, the agency/department/district shall specifically advise the Board of Supervisors in the AIT of the deviation, the reason for the deviation, and of the CEO's recommendation relative thereto.

Page 4 of 4

Page 4 of 4 ATTACHMENT F

RESOLUTION N0.01-11 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, CALIFORNIA, ESTABLISHING A TRAFFIC VIOLATOR APPREHENSION PROGRAM AND SETTING FEES FOR THE IMPOUND OF VEHICLES WHEREAS, the Orange County Sheriff-Coroner (hereinafter "the Sheriff) has instituted a Traffic Violator Apprehension Program designed to reduce vehicle accidents caused by unlicensed drivers and drivers whose licenses are suspended and to educate the public about the requirements of the Vehicle Code and related safety issues with regard to driver licensing, vehicle registration, vehicle operation, and vehicle parking; and

WHEREAS, the Sheriff operates said Traffic Violator Apprehension Program in the unincorporated areas of Orange County and in the cities in Orange County that contract for the Sheriffs law enforcement services, including this city; and

WHEREAS, the operation of the Traffic Violator Apprehension Program in the unincorporated areas of Orange County and in the cities in Orange County that contract for the Sheriffs law enforcement services, including this city; and

WHEREAS, the operation of the Traffic Violator Apprehension Program on an area-wide basis, without regard to jurisdictional boundaries between the County and the cities, serves the public purposes of the City of Laguna Woods because drivers routinely cross jurisdictional boundaries, making an area-wide approach to reduction of traffic accidents and driver education most effective in preventing traffic accidents in all participating jurisdictions; and

WHEREAS, the Orange County Board of Supervisors already has adopted fees for the unincorporated areas of the County that are identical to those described therein; and

WHEREAS, the Orange County Board of Supervisors has directed the establishment in the County Treasury ·of an interest-earning, budgeted special revenue fund, called "the Traffic Violator Fund" and designated as Fund No. 13B, to be controlled by the Sheriff; and

WHEREAS, the Orange County Board of Supervisors has directed that the proceeds of the County fees that are identical to the fees described herein be deposited in the Traffic Violator Fund; and

WHEREAS, the Orange County Board of Supervisors has directed that the Traffic Violator Fund be used exclusively for the Traffic Violator Apprehension Program operated by the Sheriff in the unincorporated areas of Orange County and the cities that contract for the Sheriffs law enforcement services; and

WHEREAS, the Orange County Board of Supervisors has directed that permissible expenditures from the Traffic Violator Fund include, but are not limited to, the costs of personnel who perform duties for the Traffic Violator Apprehension Program, and the purchase and maintenance of equipment, materials and supplies utilized in the Traffic Violator Apprehension Program; and

WHEREAS , the Orange County Board of Supervisors has directed that until further order of that Board, the balance remaining in the Traffic Violator Fund at the close of any fiscal year shall be carried forward and accumulated in said Fund for the above-described purposes; and

WHEREAS, the Sheriff has advised this Council of his plans to seek adoption, by the city councils of each of the other cities that contract for the Sheriffs law enforcement services, of fees identical to those described herein, to ·be used for the Traffic Violator Apprehension Program; and

WHEREAS, the Sheriff impounds numerous and various vehicles removed from highways, public property, or private property in this city during the normal course of duty; and

WHEREAS, the Sheriff i pounds said vehicles pursuant to his authority under the California Vehicle Code as follows:

Vehicle Code Section and Impound Ground

14602.6 Suspended, revoked or unlicensed driver/30-day hold 2651(a) Unattended vehicle on bridge 22651 (d) Vehicle blocking driveway 22651 (e) Vehicle blocking fire hydrant 2265l(f) Vehicle· blocking freeway 22651 (h) (1) Driver arrested 22651 (h) (2) Order of suspension or revocation pursuant to section I 3388 22651 (i)( 1) Multiple parking citations 22651 (j) Lack of vehicle registration 22651 (k) Parking over seventy-two hours 22651 (l) Parking in a construction zone 22651 (m) Violation of special events restrictions 22651 (n) No parking zone 22651 (0) ( 1) Delinquent vehicle registration 22651 (p) Drive unlicensed or license suspended 22651 (r) Vehicle blocking another vehicle 22651 (t) Notice to appear/illegal amber lights 22655.3 Removal for investigation (fleeing in violation of Section 2800.1 or 2800.2) 22655.5 (b) Vehicle is evidence of crime 22669 Abandoned vehicle;

WHEREAS, Vehicle Code section 22850.5 authorizes this Council, by resolution, to establish a fee equal to the administrative costs relating to the removal, impound, storage or release of properly impounded vehicles; and

2 WHEREAS, the Sheriff is proposing adoption of the following fees pursuant to Vehicle Code section 22850.5:

(a) $152.00 when a vehicle is impounded pursuant to or on account of violation of Vehicle Code section 14602.6, which relates to the licensing status of the driver, and

(b) $50.00 when a vehicle is impounded pursuant to or on account of violation of any of the other Vehicle Code provisions listed above;

WHEREAS, a cost study conducted by the Sheriff shows that the administrative costs relating to removal, impound, storage or release of vehicles properly impounded pursuant to or on account ofviolation of Vehicle Code section 14602.6exceed $152.00 per impound; and

WHEREAS, a cost study conducted by the Sheriff shows that the administrative costs relating to the removal, impound, storage or release of vehicles properly impounded pursuant to or on account of violation of the· other Vehicle Code provisions listed above exceed $50.00 per impound; and

WHEREAS, the above-described difference in costs is attributable to the additional costs of ascertaining the licensing status of the driver and complying with the complex requirements of Vehicle Code section 14602.6; and

WHEREAS, persons whose vehicles are impounded, rather than the public as a whole, should bear the administrative costs of processing such impounds; and

WHEREAS, Vehicle Code section 22850.5 imposes the following restrictions on the imposition of an administrative fee:

(a) The fee may only be imposed on the registered owner or the agents of that owner and may not include any vehicle towed under an abatement program or sold at a lien sale pursuant to Sections 3068.1 to 3074, inclusive of, and Section 22851 of, the Civil Code unless the sale is sufficient in amount to pay the lien holder's total charges and proper administrative costs; and

(b) The fee may not be imposed for any hearing or appeal relating to the removal, impound, storage, or release of a vehicle unless that hearing or appeal was requested in writing by the registered or legal owner of the vehicle or an agent of that registered or legal owner, and the fee may be imposed only upon the person requesting that hearing or appeal; and

WHEREAS, it also is unfair to impose the administrative fee authorized by Vehicle Code section 22850.5 in the following circumstances: (I) when the vehicle was left because it became inoperable while being driven, if the owner makes good faith attempts promptly to remove the vehicle from a location where it is not permitted, (2) when the vehicle was stolen, (3) when the

3 vehicle was left by an ill or injured driver, and (4) when it is demonstrated to the satisfaction of the Sheriff or his designee that neither the registered owner of the vehicle nor his agent, if ay, was at fault in creating the circumstances leading to the impounding of the vehicle; and

WHEREAS, a notice of public hearing with respect to the proposed new fees was gtven according to law; and

WHEREAS, a public hearing pertaining to said proposed new fees was held on April 18, 2001;

NOW, THEREFORE, BE IT RESOLVED that this Council finds, in accordance with California Public Resources Code section 21080 (b) (8), that the charges listed herein below are only for the purposes of meeting operating expenses and are, therefore, exempt from compliance with the Californian Environmental Quality Act.

BE IT FURTHER RESOLVED that on July 1, 2000, the administrative fees indicated below shall become effective for the removal, impound, ·storage or release of vehicles properly impounded after removal. from locations in this city in accordance with or on account of violation of the provisions of the Vehicle Code listed below.

(a) A fee of $152.00 for each impound of a vehicle in accordance with or on account of violation of Vehicle Code section 14602.6, and (b) A fee of $50.00 for each impound of a vehicle in accordance with or on account of violation of Vehicle Code section

22651 (a), 22651 (d), 22651 (e), 22651 (f), 2265 1 (h)( 1), 22651 (h) (2), 22651 (i)(l), 22651 U), 22651 (k), 22651 (1), 22651 (m), 22651 (n), 22651 (o) (1), 22651 (p), 22651 ®, 22651 (t), 22655.3, 22655.5 (b), or 22669.

BE IT FURTHER RESOLVED that the Sheriff is authorized to collect said fees, on behalf of this city, at the time of release of vehicles that are subject to the fees.

4 BE IT FURTHER RESOLVED that said fees shall be imposed on the registered owner or the agent of the owner of the impounded vehicle and shall not include any vehicle towed under an abatement program or sold at a lien sale pursuant to Sections 3068.1 to 3074, inclusive, of, and Section 22851 of, the Civil Code unless the sale is sufficient in amount to pay the lien holder's total charges and proper administrative costs.

BE IT FURTHER RESOLVED that said fees shall not be imposed for any hearing or appeal relating to the removal, impound, storage, or release of a vehicle unless that hearing or appeal was requested in writing by the registered o .legal owner of the vehicle or an agent of that registered or legal owner, and such fees, if otherwise applicable, shall be imposed only upon the person requesting that hearing or appeal.

BE IT FURTHER RESOLVED that said fees shall not be imposed in any of the following circumstances: (a) when the vehicle was left because it became inoperable while being driven, if the owner made good faith attempts promptly to remove the vehicle from a location where it was not permitted; (b) when the vehicle was stolen; (c) when the vehicle was left by an ill or injured driver; or (d) when it is demonstrated to the satisfaction of the Sheriff or his designee that neither the registered owner of the vehicle nor his agent, if any, was at fault in creating the circumstances leading to the impounding of the vehicle.

BE IT FURTHER RESOLVED that at Sheriff headquarters or at any Sheriff substation, a registered owner or an agent of a registered owner who believes he/she/it is exempt from either of said fees in accordance with any of the above-listed criteria may apply in writing for a waiver of the fee and shall present such supporting information or documentation as the Sheriff may request.

BE IT FURTHER RESOLVED that upon presentation of a written application for waiver of either of said fees, together with such supporting documentation as the Sheriff may request, the Sheriff shall determine promptly whether the applicant meets the above-listed criteria for waiver of the fee, and if so, shall waive the fee.

BE IT FURTHER RESOLVED that until further order of this Council, the Sheriff is directed to deposit the proceeds of the fees established by this Resolution in ·the above-described Traffic Violator Fund in the county Treasury, to be used exclusively for the· Traffic Violator Apprehension operated by the Sheriff in the unincorporated areas of Orange County and the cities in Orange County that contract for the Sheriffs law enforcement services.

BE IT FURTHER RESOLVED that expenditure of said fee proceeds from the Traffic Violator Fund may include, but are not limited to, the costs of personnel who perform duties for the Traffic Violator Apprehension Program, and the purchase and maintenance of equipment, materials and supplies utilized in the Traffic Violator Apprehension Program.

BE IT FURTHER RESOLVED that until further order of this Council, the Orange County Board of Supervisors is authorized to carry forward in the Traffic Violator Fund and accumulate ay

5 04-18-01 ·'

balance of proceeds of fees imposed by this Resolution that is remaining at the end of a fiscal year, as long as such fee proceeds will be used for the purposes recited herein.

ROBERT BOUER, Mayor

A1TEST:

STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF LAGUNA WOODS )

I, MARGARET R. MONAHAN, City Clerk of the City of Laguna Woods, do HEREBY CERmY that the foregoing Resolution No. 01-11 was duly adopted by the City Council of the City of Laguna Woods at a regular meeting thereof, held on the 18th day of April 2001, by the following vote:

AYES: COUNCil. MEMBERS: Thorpe, Ross, Hack, McLaughlin, Bouer NOES: COUNCil. MEMBERS: None ABSENT: COUNCll. MEMBERS: None

R 01-11 6 04-18-01 ORANGE COUNTY SHERIFF-CORONER TRAFFIC VIOLATOR APPREHENSION PROGRAM

CONTRACT CITY

Participating City Request to Purchase From the TVA in FY Date ~ Cl) ~ APPLICABILTY ::::J QUANTITY ITEM DESCRIPTION TO TVA PROGRAM ESTIMATED COST Cl ~ ~

z THE CITY CERTIFIES THAT THE EQUIPMENT PURCHASED BY CITY AND TO BE REIM:BURSED BY PROGRAM FUNDS 0 ..... WILL BE USED FOR ITS ENTIRE USEFUL LIFE EXCLUSIVELY FOR THE PURPOSES OF THE TRAFFIC VIOLATOR E-< u~ APPREHENSION PROGRAM ~ - CITY MAN AGER REQUEST: -~ IX Printed Name u~ Signature: DATE

Cl) ORANGE COUNTY SHERIFF-CORONER DEPARTMENT ....:l 0 ~ Recommended For Aooroval p.., CITY POLICE SERVICES CHIEF MANAGER - TVAPROGRAM p.., ~ 0 ::I: s: m z OCSD H- l -i BUDGET LEONLY G')

6.6 STREET MAINTENANCE SERVICES

This page is intentionally blank. ITEM 6.6 EXTENSION OF THE AGREEMENT FOR SERVICES BETWEEN THE CITY OF LAGUNA WOODS AND PV MAINTENANCE, INC.

This EXTENSION of the AGREEMENT FOR SERVICES ("AGREEMENT") that was authorized by the City Council on December 19, 2012 by and among the City of Laguna Woods, a California municipal corporation ("CITY") and PV Maintenance, Inc. ("CONTRACTOR"), is made and entered into this day of ______2016 by and among the CITY and CONTRACTOR.

WHEREAS, the initial term of the AGREEMENT was for the period between January 1, 2013 and 11:59 p.m. on June 30, 2015; and

WHEREAS, the term of the AGREEMENT was previously extended for the period between July 1, 2015 and 11:59 p.m. on June 30, 2016; and

WHEREAS, the AGREEMENT allows for the term of the AGREEMENT to be extended upon written agreement of both parties to the AGREEMENT for one additional fiscal year.

NOW THEREFORE, the parties amend the AGREEMENT as follows:

1. The CITY and CONTRACTOR hereby agree to an EXTENSION of the AGREEMENT for a period beginning on July 1, 2016 and ending at 11:59 p.m. on June 30, 2017 with no changes to the terms and conditions of the AGREEMENT.

IN WITNESS WHEREOF, the parties hereto have caused this EXTENSION to be executed the day and year first above written.

CITY OF LAGUNA WOODS:

By Christopher Macon, City Manager Date

CONTRACTOR:

By Frank J. Garza, President Date

APPROVED AS TO FORM:

David B. Cosgrove, City Attorney Date

Page 1 of 1

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6.7 SENIOR MOBILITY TRANSPORTATION SERVICES

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6.8 NOTICE OF COMPLETION – SANTA MARIA AVENUE BIOSWALE PROJECT (NO REPORT)

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8.1 CITY HALL BUILDING MAINTENANCE AND RECONFIGURATION

This page is intentionally blank. ITEM 8.1

City of Laguna Woods Agenda Report

TO: Honorable Mayor and City Councilmembers

FROM: Christopher Macon, City Manager

FOR: May 18, 2016 Regular Meeting

SUBJECT: City Hall Building Maintenance and Reconfiguration

Recommendation

1. Approve a resolution entitled:

AND

2. Authorize the City Manager to execute an agreement with Orkin for fumigation by tenting of City Hall, subject to approval as to form by the City Attorney.

Background

In March 2016, staff discovered deterioration of City Hall’s second floor, which manifest itself in an increasing number of “soft” spots. As a result of the work necessary to diagnose and repair the deterioration, as well as safety concerns in the interim, the second floor has been temporarily relocated to the City Council Chambers. Previously scheduled functions, including City Council meetings, are being held at alternate locations until the second floor is returned to normal use.

CC  05-18-2016 RM ITEM 8.1 – AR Page 1 of 3

ITEM 8.1

On March 30, 2016, the City Council authorized the transfer and expenditure of the Fiscal Year 2015-16 City Council Contingency budget to offset unanticipated City Hall building maintenance expenditures, including expenditures related to the temporary relocation of the second floor. The City Council Contingency budget is a $50,000 line item that is specifically intended for unanticipated expenditures.

Discussion

Following the successful abatement of asbestos, and subsequent investigation by the Building Official, City Engineer, and a consulting structural engineer, the cause of the deterioration of City Hall’s second floor has been identified as relating to the manner in which the subfloor was constructed in the late 1970’s (prior to the City’s incorporation and purchase). Repairs require the removal and reconstruction of the subfloor underneath the office and restroom areas. The existing use of the attic area for storage must also be minimized either on an ongoing basis or until such time as significant structural improvements are completed.

At today’s meeting, staff is requesting a supplemental appropriation of $150,000 to fund the repair of the subfloor underneath the office area, including reconfiguration of the office area in a manner that would better utilize City Hall’s limited space and promote greater efficiency and productivity. The appropriation would also be used to offset temporary relocation costs and fumigation.

While repair of the restroom areas will be required in the future, deterioration in those areas is less significant than elsewhere on the second floor. Prioritizing office area repairs would allow for the more immediate re-occupancy of the second floor, as well as time to comprehensively plan for future repairs. It is anticipated that the restroom repairs will also entail significant accessibility improvements.

Structural engineering observation concluded that the attic area can bear only 25 to 40 pounds per square foot (psf) of loading, compared to the minimum California Building Code loading of 125 psf for light storage. The structural engineer wrote:

“If the city needs more storage capacity in the attic, it could be achieved with extensive reconstruction. The ceiling joists will need to be supplemented with additional joists. The steel beams will need to be reinforced and/or additional beams added. The beam and bearing wall loads will need to be followed down to the foundation where it is likely that the foundations will need to be expanded

ITEM 8.1 – AR Page 2 of 3 CC  05-18-2016 RM

ITEM 8.1

or new footings installed. The [Building Code] now requires 25% of live loads 100 psf and larger to be added to the seismic force, so the lateral force resisting system for the entire building will need to be analyzed for adequacy.”

It is staff’s intent to work toward significantly minimizing use of the attic area for storage. Staff does not recommend pursuing reconstruction of the attic area given the extensive and disruptive nature of the work required. It is staff’s opinion that other areas of City Hall can be less impactfully modified, reconfigured, and better utilized to meet the near-term and foreseeable needs of the City. Such work would be significantly less expensive than reconstruction of the attic area.

On May 12, 2016, evidence of an active termite infestation was discovered in City Hall. Orkin, the company that provides routine pest control services for City Hall, has presented the City with a recommendation for localized termite treatment or fumigation by tenting. Due to the limitations associated with visual inspection and uncertainty regarding the extent of the infestation, staff recommends that the City contract with Orkin for fumigation by tenting. During fumigation, the City would contract for on-site security. City Hall was last fumigated in December 2009.

Fiscal Impact

The work necessary to repair City Hall’s second floor and return it to normal use, as well as temporary relocation and fumigation costs, are not included in the City’s budget. If approved, the supplemental appropriation of $150,000 would be drawn from the unassigned General Fund balance, which has sufficient funds available.

Attachment: A – Proposed Resolution

CC  05-18-2016 RM ITEM 8.1 – AR Page 3 of 3

This page is intentionally blank. ITEM 8.1 – Attachment A

RESOLUTION NO. 16-XX

WHEREAS, the Fiscal Year 2015-16 Budget was adopted by the City Council on June 25, 2016; and

WHEREAS, City Council action is required to increase fund-level budget appropriations within the General Fund; and

WHEREAS, the City Council also approves department-level budget appropriations within the General Fund with authorization for the City Manager to transfer appropriations and make adjustments within and between departments, provided that there are no increase in overall fund appropriations; and

WHEREAS, in March 2016, staff discovered deterioration of City Hall’s second floor, which raised safety concerns and ultimately resulted in the temporary relocation of the second floor; and

WHEREAS, in May 2016, evidence of an active termite infestation was discovered in City Hall’s second floor; and

WHEREAS, an increase in the General Fund budget is necessary in order to fund unanticipated expenses related to the temporary relocation, repair, and reconfiguration of City Hall’s second floor, and fumigation of City Hall, generally.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA WOODS, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. Resolution No. 15-10 is hereby amended to increase the budget appropriation authorized for the General Fund for Fiscal Year 2015-16 to $5,893,435. The increase in the appropriation, in the amount of $150,000, shall be drawn from the unassigned General Fund balance and allocated to the General Government department for an amended appropriations authorization of $975,810

R 16-XX 1 XX-XX-2016 ITEM 8.1 – Attachment A

(amount includes previously authorized transfers and adjustments). The amended appropriations authorization is considered non-operating and is intended to fund the repair, improvement, and temporary relocation of City Hall’s second floor, and fumigation of City Hall, generally.

SECTION 2. The Deputy City Clerk shall certify to the passage of this resolution.

PASSED, APPROVED AND ADOPTED on this XX day of XX 2016.

______NOEL HATCH, Mayor

ATTEST:

______YOLIE TRIPPY, Deputy City Clerk

STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF LAGUNA WOODS )

AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS:

______YOLIE TRIPPY, Deputy City Clerk

R 16-XX 2 XX-XX-2016

8.2 FISCAL YEAR 2016-17 BUDGET AND WORK PLAN DEVELOPMENT

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City of Laguna Woods Agenda Report

TO: Honorable Mayor and City Councilmembers

FROM: Christopher Macon, City Manager

FOR: May 18, 2016 Regular Meeting

SUBJECT: Fiscal Year 2016-17 Budget and Work Plan Development

Recommendation

Discuss and provide direction to staff.

Discussion

Today’s meeting is one of several opportunities for the City Council to receive public input and provide direction to staff on the development of the Fiscal Year 2016-17 Budget and Work Plan.

Fiscal Year 2016-17 Budget and Work Plan Meeting Schedule (tentative and subject to change) Wednesday, April 27, 2016 at 2 p.m. – kick-off workshop, discussion and development  Wednesday, May 18, 2016 at 2 p.m. – discussion and development Wednesday, June 15, 2016 at 2 p.m. – discussion and development Wednesday, June 29, 2016 at 2 p.m. – consideration of adoption

CC  05-18-2016 RM ITEM 8.2 – AR Page 1 of 1

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8.3 EMPLOYEE POSITIONS AND RECRUITMENT

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City of Laguna Woods Agenda Report

TO: Honorable Mayor and City Councilmembers

FROM: Christopher Macon, City Manager

FOR: May 18, 2016 Regular Meeting

SUBJECT: Employee Positions and Recruitment

Recommendation

Authorize the City Manager to advertise and recruit for a full-time Management Analyst position assigned to the Planning & Environmental Services Department, with hiring contingent on the City Council taking action to authorize the position as part of the Fiscal Year 2016-17 budget.

Background

The City Manager is responsible for hiring and supervising employees, subject to the City Council’s establishment and authorization of positions.

Discussion

At today’s meeting, staff is seeking authorization to begin recruiting for a full-time Management Analyst position assigned to the Planning & Environmental Services Department, with hiring contingent on the City Council taking action to authorize the position as part of the Fiscal Year 2016-17 budget. With the unexpected passing of the City’s Assistant City Manager, there is an immediate need for staff support in the areas of building, planning, water quality, economic development, waste and recycling, environmental sustainability, and code enforcement.

As the City continues its reorganization focused on efficiency, sustainability, and service delivery, the personnel changes described in Attachment A are proposed as part of the Fiscal Year 2016-17 budget. Today’s recommendation would allow the

CC  05-18-2016 RM ITEM 8.3 – AR Page 1 of 2

ITEM 8.3

City to begin advertising and recruiting for the proposed Management Analyst position, in advance of the adoption of the Fiscal Year 2016-17 budget, which is not expected to occur until late-June. Beginning recruitment would not obligate the City Council to authorize the position or take any other future action.

Fiscal Impact

The recommendation to advertise and recruit could be accommodated in the current fiscal year’s budget. Hiring costs would be included in the draft Fiscal Year 2016- 17 budget for future consideration by the City Council.

If authorized as part of the Fiscal Year 2016-17 budget, the personnel changes described in Attachment A are not expected to result in an increase of personnel expenses, as compared to the current fiscal year’s budget.

Attachment: A – Draft City Organization Chapter of Fiscal Year 2016-17 Budget & Work Plan

ITEM 8.3 – AR Page 2 of 2 CC  05-18-2016 RM

ITEM 8.3 – Attachment A 2.0. CITY ORGANIZATION

This chapter is intended to provide a brief overview of the City of Laguna Woods’ internal structure in order to establish a context for understanding how this budget and work plan will be implemented.

DEPARTMENTAL STRUCTURE

The City is organized into the following seven departments:

• City Council • City Manager’s Office • City Attorney’s Office • Administrative Services Department • Engineering & Infrastructure Services Department • Planning & Environmental Services Department • Public Safety Services Department

[Organizational Chart – Departments]

City Council

City Manager's City Attorney's Office Office

Engineering & Planning & Administrative Public Safety Infrastructure Environmental Services Services Services Services Department Department Department Department

As a contract city, many departmental functions are coordinated by City personnel and performed under contract with independent, franchise, and joint powers agencies. This chapter reviews the organizational structures and allocations of City personnel and the City Attorney’s Office.

CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN PAGE XX-DRAFT ITEM 8.3 – Attachment A

CITY COUNCIL

Noel Hatch, Mayor Shari L. Horne, Mayor Pro Tem Cynthia Conners, Councilmember Bert Hack, Councilmember Carol Moore, Councilmember

The City Council is the governing body for the City. Its five members are directly accountable to the Laguna Woods electorate and are responsible for providing overall legislative and policy direction for the City as an organization. As a body, the City Council is also responsible for appointing the City Manager and the City Attorney, as well as adopting the City’s budget.

The Mayor and Mayor Pro Tem are appointed annually by the members of the City Council to preside over City Council meetings; execute certain legal instruments and authorizations; and, attend to various ceremonial matters.

CITY ATTORNEY’S OFFICE

David B. Cosgrove, City Attorney (under contract with Rutan & Tucker, LLP)

The City Attorney is appointed by the City Council and serves as chief legal counsel for the City as an organization. The City Attorney reports to the City Council and works closely with the City Manager.

In addition to furnishing legal advice to the City Council and City personnel on matters related to the conduct of City business, the City Attorney’s Office is responsible for preparing, reviewing, and approving the form of ordinances, resolutions, agreements, and other legal instruments.

The City Attorney’s Office is a contract function. Associated expenditures are included in the Legal Services line item of the General Government section of this budget; however, legal services rendered for special projects, and other related expenditures, may be charged to those projects.

PERSONNEL ALLOCATION

In addition to the five elected members of the City Council, this budget and work plan includes an authorized personnel allocation of eight and nine-tenths full-time equivalent (FTE) positions. Compared to the previous fiscal year, that

PAGE XX-DRAFT CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN ITEM 8.3 – Attachment A personnel allocation represents a reduction of one-half of a full-time position and an increase of two part-time positions, for a net increase of four-tenths of one FTE position. The two part-time positions are ineligible for California Public Employees’ Retirement System (CalPERS) benefits and do not increase the City’s other post-employment benefits (OPEB) liabilities.

Modifications to the personnel allocation are a continuation of the structural reorganization focused on efficiency, sustainability, and service delivery that was initiated in Fiscal Year 2014-15. Modifications continue to be made in order to promote the efficient, effective, and economical conduct of City business.

[Personnel Allocation – Citywide]

Position Number Authorized

Fiscal Fiscal Fiscal Fiscal Year Year Year Year

2013-14 2014-15 2015-16 2016-17

Full-Time Employees [full-time equivalents (FTE)] City Manager 1.00 1.00 1.00 1.00 Assistant City Manager 1.00 1.00 1.00 - Administrative Services - 1.00 1.00 1.00 Director/City Treasurer Accounting Clerk - 1.00 1.00 1.00 Administrative Coordinator 1.00 1.00 1.00 1.00 Building Official 1.00 - - - Community Services Manager 1.00 1.00 0.50 - Deputy City Clerk 1.00 1.00 1.00 1.00 Finance Manager 1.00 - - - Management Analyst/ - - 1.00* 2.00 Senior Management Analyst Management Assistant 1.00 1.00 1.00* - Planning Manager 1.00 1.00 - - Public Safety Director 1.00 - - - Senior Accountant - 1.00 1.00 1.00 Total FTE – full-time positions 10.00 10.00 8.50 8.00

Part-Time Employees [full-time equivalents (FTE)] Accountant 0.50 - - - Administrative Assistant 1.50 1.00 - - Clerical Assistant - - - 0.45

CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN PAGE XX-DRAFT ITEM 8.3 – Attachment A

Position Number Authorized

Fiscal Fiscal Fiscal Fiscal Year Year Year Year

2013-14 2014-15 2015-16 2016-17

Management Analyst/ - - - 0.45 Senior Management Analyst Total FTE – part-time positions 2.00 1.00 - 0.90

Total FTE – all positions 12.00 11.00 8.50 8.90 Year-over-year change -1.00 -2.50 0.40

* These positions were authorized for only a portion of the fiscal year, resulting in a total net FTE of 1.00.

REPORTING RELATIONSHIPS

City Council (elected officials)

City Attorney City Manager (contract position)

Administrative Services Director/City Management Treasurer Analyst Series (0.45 FTE)

Deputy City Clerk Senior Accountant

Management Management Analyst Series Analyst Series

Administrative Accounting Clerk Coordinator

Clerical Assistant (0.45 FTE)

PAGE XX-DRAFT CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN ITEM 8.3 – Attachment A

CITY MANAGER’S OFFICE

Christopher Macon, City Manager

The City Manager is appointed by the City Council and is responsible for the “day-to-day” management of the City as an organization. The City Manager is also responsible for implementing City Council direction and policy, as well as serving as the City Council’s chief technical advisor. All City employees work under the ultimate direction of the City Manager.

In addition to providing organizational oversight and development, the City Manager’s Office works closely with the City Attorney’s Office; facilitates public and inter-governmental relations; manages long-range planning and special projects; coordinates competitive procurement activities; and, oversees the Residential Energy Efficiency Improvement Program.

Though presented separately for ease of reference, the Public Safety Services Department receives ongoing support from personnel accounted for in the City Manager’s Office section of this budget. Due to changes in personnel and resource availability, during Fiscal Year 2016-17, the City Manager’s Office will provide increased oversight of the Engineering & Infrastructure Services Department and the Planning & Environmental Services Department.

[Personnel Allocation – City Manager’s Office]

Position Number Authorized

Fiscal Year Fiscal Year Fiscal Year

2014-15 2015-16 2016-17

Full-time Employees [full-time equivalents (FTE)] City Manager 1.00 1.00 1.00 Community Services Manager 1.00 0.50 - Management Assistant 1.00 1.00 - Total FTE – full-time positions 3.00 2.50 1.00

Part-time Employees [full-time equivalents (FTE)] Management Analyst/ - - 0.45 Senior Management Analyst Total FTE – part-time positions - - 0.45

Total FTE – all positions 3.00 2.50 1.45

CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN PAGE XX-DRAFT ITEM 8.3 – Attachment A

Personnel allocated to the City Manager’s Office are included in the General Government expenditures section of this budget.

[Organizational Chart – City Manager’s Office]

City Manager

Management Analyst Series (0.45 FTE)

ADMINISTRATIVE SERVICES DEPARTMENT

Margaret Cady, CPA, Administrative Services Director/City Treasurer

The Administrative Services Department contains a variety of internal business units, including finance, accounting, payroll, human resources, information technology, risk management, and the City Clerk’s Office.

Community Services Division

The Administrative Services Department’s Community Services Division includes the following service areas: community recreation events, local government television programming (Channel 31), and the Senior Mobility Program.

[Personnel Allocation – Administrative Services Department]

Position Number Authorized

Fiscal Year Fiscal Year Fiscal Year

2014-15 2015-16 2016-17

Full-time Employees [full-time equivalents (FTE)] Administrative Services 1.00 1.00 1.00 Director/City Treasurer Accounting Clerk 1.00 1.00 1.00 Administrative Coordinator 1.00 1.00 1.00 Deputy City Clerk 1.00 1.00 1.00 Senior Accountant 1.00 1.00 1.00 Total FTE – full-time positions 5.00 5.00 5.00

PAGE XX-DRAFT CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN ITEM 8.3 – Attachment A

Position Number Authorized

Fiscal Year Fiscal Year Fiscal Year

2014-15 2015-16 2016-17

Part-time Employees [full-time equivalents (FTE)] Administrative Assistant 1.00 - - Clerical Assistant - - 0.45 Total FTE – part-time positions 1.00 - 0.45

Total FTE – all positions 6.00 5.00 5.45

Personnel expenses directly related to community events are included in the Community Services expenditures section of this budget. Personnel other than those allocated to the Administrative Services Department may also work at community events and be charged accordingly.

[Organizational Chart – Administrative Services Department]

Administrative Services Director/City Treasurer

Deputy City Clerk Senior Accountant

Administrative Accounting Clerk Coordinator

Clerical Assistant (0.45 FTE)

ENGINEERING & INFRASTRUCTURE SERVICES DEPARTMENT

The Engineering & Infrastructure Services Department includes the following service areas: capital improvement projects, engineering, and maintenance (including maintenance of roadways, parks, landscaped areas, public rights- of-way, bus shelters, catch basins, streetlights, and City Hall).

Due to changes in personnel and resource availability, during Fiscal Year 2016-

CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN PAGE XX-DRAFT ITEM 8.3 – Attachment A

17, increased oversight will be provided by the City Manager’s Office. Long- term and sustainable staffing patterns are areas of continuing analysis and will be addressed as resources permit.

[Personnel Allocation – Engineering & Infrastructure Services Department]

Position Number Authorized

Fiscal Year Fiscal Year Fiscal Year

2014-15 2015-16 2016-17

Full-time Employees [full-time equivalents (FTE)] Assistant City Manager 0.50 0.25 - Management Analyst/ - 1.00 1.00 Senior Management Analyst Total FTE 0.50 1.25 1.00

PLANNING & ENVIRONMENTAL SERVICES DEPARTMENT

The Planning & Environmental Services Department includes the following service areas: building, planning, economic development, water quality, waste and recycling, environmental sustainability, and code enforcement.

Due to changes in personnel and resource availability, during Fiscal Year 2016- 17, increased oversight will be provided by the City Manager’s Office. Long- term and sustainable staffing patterns are areas of continuing analysis and will be addressed as resources permit.

Personnel other than those allocated to the Planning & Environmental Services Department may also work at community waste events and be charged to the Planning & Environmental Services Department budget.

[Personnel Allocation – Planning & Environmental Services Department]

Position Number Authorized

Fiscal Year Fiscal Year Fiscal Year

2014-15 2015-16 2016-17

Full-time Employees [full-time equivalents (FTE)] Assistant City Manager 0.50 0.75 - Management Analyst/ - - 1.00 Senior Management Analyst

PAGE XX-DRAFT CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN ITEM 8.3 – Attachment A

Position Number Authorized

Fiscal Year Fiscal Year Fiscal Year

2014-15 2015-16 2016-17

Planning Manager 1.00 - - Total FTE 1.50 0.75 1.00

PUBLIC SAFETY SERVICES DEPARTMENT

The Public Safety Services Department includes law enforcement and animal control and shelter services, which are provided under contract by the Orange County Sheriff’s Department and Laguna Beach Animal Services, respectively. This department’s budget also includes other public safety-related contract services (e.g., Trauma Intervention Program). Fire services provided by the Orange County Fire Authority are funded separately through a structural fire fund administered by the County of Orange on the City’s behalf.

Personnel accounted for in the City Manager’s Office section of this budget are responsible for coordinating with public safety service partners, as well as managing emergency planning, hazard mitigation, climate adaptation, and other “in-house” public safety programs.

OTHER ORGANIZATIONAL INFORMATION

Standing Advisory Committees

The City Council has established a Community Grants Oversight Committee and a Hazard Mitigation & Climate Change Committee to function in advisory roles to the City Council and City personnel. Committee members volunteer their time to provide crucial public input on relevant matters.

Other Volunteer Programs

Since incorporation, the City has relied on the generous support of volunteers to provide reception, administrative, and clerical services at Laguna Woods City Hall. That support is invaluable and helps to reduce personnel costs.

CITY OF LAGUNA WOODS FISCAL YEAR 2016-17 BUDGET & WORK PLAN PAGE XX-DRAFT

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8.4 CITY COUNCIL MEETING SCHEDULE

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City of Laguna Woods Agenda Report

TO: Honorable Mayor and City Councilmembers

FROM: Christopher Macon, City Manager

FOR: May 18, 2016 Regular Meeting

SUBJECT: City Council Meeting Schedule

Recommendation

Approve the City Council meeting schedule for Fiscal Year 2016-17.

Discussion

The City Council regularly meets on the third Wednesday of each month at 2 p.m. Staff is generally recommending a continuance of that meeting schedule with the addition of adjourned regular meetings in April and June 2017, and the cancellation of regular meetings in October 2016 and March 2017. Specific proposed scheduling and accompanying notes are included as Attachment A.

All proposed meetings would occur at Laguna Woods City Hall, 24264 El Toro Road, Laguna Woods, California 92637, unless otherwise noticed.

Fiscal Impact

Sufficient funds to support the proposed City Council meeting schedule could be included in the Fiscal Year 2016-17 Budget & Work Plan. Aside from noticing and reproduction expenses, recurring out-of-pocket expenses for City Council meetings are generally limited to $100 per hour for closed captioning services.

Attachment: A – Proposed City Council Meeting Schedule for Fiscal Year 2016-17

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ITEM 8.4 – Attachment A

CITY OF LAGUNA WOODS CITY COUNCIL MEETING SCHEDULE FISCAL YEAR 2016-17

MEETING DATE/TIME & TYPE NOTES

Wednesday, July 20, 2016 at 2 p.m. Regular Meeting Wednesday, August 17, 2016 at 2 p.m. Regular Meeting Wednesday, September 21, 2016 at 2 p.m. Regular Meeting Wednesday, October 19, 2016 at 2 p.m. October 19, 2016 regular meeting cancelled Regular Meeting Cancelled Wednesday, November 16, 2016 at 2 p.m. Regular Meeting Wednesday, December 21, 2016 at 2 p.m. Regular Meeting Wednesday, January 18, 2017 at 2 p.m. Regular Meeting Wednesday, February 15, 2017 at 2 p.m. Regular Meeting Wednesday, March 15, 2017 at 2 p.m. March 15, 2017 regular meeting cancelled Regular Meeting Cancelled Wednesday, April 19, 2017 at 2 p.m. Regular Meeting Wednesday, April 26, 2017 at 2 p.m. Budget/work plan workshop and other business Adjourned Regular Meeting Wednesday, May 17, 2017 at 2 p.m. Regular Meeting Wednesday, June 21, 2017 at 2 p.m. Regular Meeting Wednesday, June 28, 2017 at 2 p.m. Consideration of budget/work plan adoption and Adjourned Regular Meeting other business

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