City Ag Coun Genda Ncil A

City Council agendas and staff reports are now availabble on the City’s web page: www.la-quinta.org

CITY COUNCIL AGENDA

CITY HALL COUNCIL CHAMBERS 78-495 Calle Tampico, La Quinta

REGULAR MEETING ON TUESDAY, JUNE 2, 2015 3:00 P.M. CLOSED SESSION | 4:00 P.M. OPEN SESSION

CALL TO ORDER

ROLL CALL: Councilmembers: Franklin, Osborne, Peña, Radi, Mayor Evans

PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA At this time, members of the public may address the City Council on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. The City Council values your comments; however in accordance with State law, no action shall be taken on any item not appearing on the agenda unless it is an emergency item authorized by GC 54954.2(b).

CLOSED SESSION

1. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PUURSUANT TO GOVERNMENT CODE SECTION 54956.8 FOR PROPERTY LOCATED SOUTH OF AVENUE 52 AND WEST OF JEFFERSON STREET (APNS: 776-150-025, 776-150-022, 777-490-011, 777-490-008, 777-490-017, AND 777-490-005). CITY NEGOTIATOR: FRANK J. SPEVACEK, CITY MANAGER NEGOTIATING PARTY: CHRISTIAN TITLE/ART CENTER TRUST UNDER CONSIDERATION: PRICE AND TERMS OF PAYMENT

2. PUBLIC EMPLOYEE PERFORMANCE EVALUATION, PURSUANT TO GOVERNMENT CODE SECTION 54957, COUNCIL APPOINTED POSITION – CITY ATTORNEY

3. PUBLIC EMPLOYEE PERFORMANCE EVALUATION, PURSUANT TO GOVERNMENT CODE SECTION 54957, COUNCIL APPOINTED POSITION – CITY MANAGER

RECESS TO CLOSED SESSION

CITY COUNCIL AGENDA 1 JUNE 2, 2015

1 RECONVENE AT 4:00 P.M.

PLEDGE OF ALLEGIANCE

CONFIRMATION OF AGENDA

ANNOUNCEMENTS, PRESENTATIONS AND WRITTEN COMMUNICATIONS - NONE

CONSENT CALENDAR NOTE: Consent Calendar items are routine in nature and can be approved by one motion.

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1. APPROVE MINUTES OF MAY 19, 2015 7

2. APPROVE DEMAND REGISTERS DATED MAY 15 AND MAY 22, 2015 15

3. SECOND READING AND ADOPTION OF ORDINANCE NO. 525 31 CHANGING ZONING DESIGNATION FROM MEDIUM HIGH TO LOW DENSITY RESIDENTIAL FOR PROPERTY LOCATED AT THE NORTHWEST CORNER OF JEFFERSON STREET AND AVENUE 52

4. APPROVE A PROFESSIONAL SERVICES AGREEMENT WITH BENGAL 37 ENGINEERING TO PROVIDE PROFESSIONAL ENGINEERING SERVICES FOR DUNE PALMS ROAD WIDENING PROJECT

5. APPROVE SPECIFICATIONS AND ENGINEER’S ESTIMATE AND 83 ADVERTISE FOR BIDS FOR FISCAL YEAR 2015/2016 SLURRY SEAL PROGRAM

6. APPROVE PROFESSIONAL SERVICES AGREEMENT WITH PSOMAS FOR 87 CONSTRUCTION INSPECTION SERVICES

7. APPROVE INVESTMENT ADVISORY BOARD WORK PLAN FOR FISCAL 117 YEAR 2015/2016

8. APPROVE PROFESSIONAL SERVICES AGREEMENT WITH TRAFFEX 119 ENGINEERS, INC. FOR CONTRACT TRAFFIC ENGINEER SERVICES

CITY COUNCIL AGENDA 2 JUNE 2, 2015

2 PAGE 9. APPROVE SPECIFICATIONS AND ENGINEER’S ESTIMATE AND 143 ADVERTISE BIDS FOR THE INTERIOR PHASE OF THE LIBRARY 10TH ANNIVERSARY IMPROVEMENTS PROJECT

10. ADOPT A RESOLUTION TO AMEND AND RESTATE THE RULES OF 147 PROCEDURE FOR COUNCIL MEETINGS AND RELATED FUNCTIONS AND ACTIVITIES [RESOLUTION 2015-023]

11. ADOPT RESOLUTION FOR FISCAL YEAR 2015/2016 INVESTMENT 171 POLICY [RESOLUTION 2015-024]

12. APPROVE PLANS, SPECIFICATIONS AND ENGINEER’S ESTIMATE AND 259 ADVERTISE FOR BIDS FOR PHASE I AND PHASE II AMERICANS WITH DISABILITIES ACT SPORTS COMPLEX AND YMCA FACILITY IMPROVEMENTS PROJECT

13. APPROVE PROFESSIONAL SERVICES AGREEMENT WITH NAI 263 CONSULTING, INC. FOR PROJECT MANAGEMENT AND CONTRACT ADMINISTRATIVE SUPPORT SERVICES

14. APPROVE MEMORANDUM OF UNDERSTANDING WITH EAST VALLEY 299 COALITION FOR REGIONAL ECONOMIC DEVELOPMENT AND FIRST YEAR BUDGET

BUSINESS SESSION

1. INTERVIEWS AND APPOINTMENTS OF RESIDENTS TO VARIOUS CITY 317 BOARDS AND COMMISSIONS

STUDY SESSION

1. MARKETING STRATEGIES FOR FISCAL YEAR 2015/2016 321

2. DISCUSS INTERIM OFF-STREET PARKING STANDARDS FOR THE LA 333 QUINTA VILLAGE

3. FISCAL YEAR BUDGET 2015/2016 339

REPORTS AND INFORMATIONAL ITEMS

1. CVAG COACHELLA VALLEY CONSERVATION COMMISSION (Evans) 2. CVAG ENERGY & ENVIRONMENTAL RESOURCES COMMITTEE (Evans) 3. CVAG EXECUTIVE COMMITTEE (Evans)

CITY COUNCIL AGENDA 3 JUNE 2, 2015

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4. GREATER PALM SPRINGS CONVENTION & VISITORS BUREAU (Evans) 5. LEAGUE OF CALIFORNIA CITIES DELEGATE (Evans) 6. COACHELLA VALLEY WATER DISTRICT POLICY COMMITTEE (Evans) 7. SO. CALIFORNIA ASSOCIATION OF GOVERNMENTS (Evans) 8. CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (Franklin) 9. COACHELLA VALLEY MOUNTAINS CONSERVANCY (Franklin) 10. JACQUELINE COCHRAN REGIONAL AIRPORT AUTHORITY (Franklin) 11. SUNLINE TRANSIT AGENCY (Franklin) 12. CHAMBER OF COMMERCE INFO EXCHANGE COMMITTEE (Osborne) 13. CVAG PUBLIC SAFETY COMMITTEE (Osborne) 14. CVAG VALLEY-WIDE HOMELESSNESS COMMITTEE (Osborne) 15. DESERT SANDS SCHOOL DISTRICT COMMITTEE (Osborne & Franklin) 16. IID ENERGY CONSUMERS’ ADVISORY COMMITTEE (Osborne) 17. ANIMAL CAMPUS COMMISSION (Pena) 18. COACHELLA VALLEY ECONOMIC PARTNERSHIP (Radi) 19. RIVERSIDE COUNTY TRANSPORTATION COMMISSION (RCTC) (Radi) 20. CVAG TRANSPORTATION COMMITTEE (Radi) 21. COMMUNITY SERVICES COMMISSION MINUTES - APRIL 13, 2015 343 22. PLANNING COMMISSION MINUTES DATED APRIL 14, 2015 347 23. PALM SPRINGS AIRPORT COMMISSION 355

DEPARTMENTAL REPORTS

1. CITY MANAGER 2. CITY ATTORNEY 3. CITY CLERK 4. COMMUNITY SERVICES – LIBRARY AND MUSEUM QUARTERLY REPORT 357

MAYOR’S AND COUNCIL MEMBER’S ITEMS

PUBLIC HEARINGS – 5:00 P.M.

For all Public Hearings on the agenda, a completed “Request to Speak” form must be filed with the City Clerk prior to consideration of that item.

A person may submit written comments to City Council before a public hearing or appear in support or opposition to the approval of a project(s). If you challenge a project(s) in court, you may be limited to raising only those issues you or someone else raised at the public hearing or in written correspondence delivered to the City at, or prior to the public hearing.

1. ADOPT RESOLUTION CONFIRMING DIAGRAM AND ASSESSMENT FOR 367 LANDSCAPE AND LIGHTING ASSESSMENT DISTRICT 89-1, FISCAL YEAR 2015/2016 [RESOLUTION 2015-025]

CITY COUNCIL AGENDA 4 JUNE 2, 2015

4 2. ADOPT RESOLUTION APPROVING FISCAL YEAR 2015/2016 THROUGH 395 2019/2020 CAPITAL IMPROVEMENT PROGRAM [RESOLUTION 2015-026]

ADJOURNMENT ********************************* The next regular meeting of the City Council will be held on June 16, 2015 commencing with closed session at 3:00 p.m. and open session at 4:00 p.m. at the City Hall Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253.

DECLARATION OF POSTING

I, Susan Maysels, City Clerk, of the City of La Quinta, do hereby declare that the foregoing Agenda for the La Quinta City Council meeting was posted on the City’s website, near the entrance to the Council Chambers at 78-495 Calle Tampico, and the bulletin boards at the Stater Brothers Supermarket at 78-630 Highway 111, and the La Quinta Cove Post Office at 51-321 Avenida Bermudas, on May 29, 2015

DATED: May 29, 2015

SUSAN MAYSELS, City Clerk City of La Quinta, California

Public Notices

 The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired, please call the City Clerk’s office at 777-7103, twenty- four (24) hours in advance of the meeting and accommodations will be made.  If special electronic equipment is needed to make presentations to the City Council, arrangements should be made in advance by contacting the City Clerk’s office at 777- 7103. A one (1) week notice is required.  If background material is to be presented to the Councilmembers during a City Council meeting, please be advised that eight (8) copies of all documents, exhibits, etc., must be supplied to the City Clerk for distribution. It is requested that this take place prior to the beginning of the meeting.  Any writings or documents provided to a majority of the City Council regarding any item(s) on this agenda will be made available for public inspection at the Community Development counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during normal business hours.

CITY COUNCIL AGENDA 5 JUNE 2, 2015

CITY COUNCIL MINUTES TUESDAY, MAY 19, 2015

A regular meeting of the La Quinta City Council was called to order at 2:30 p.m. by Mayor Evans.

PRESENT: Councilmembers Franklin, Osborne, Peña, Radi, Mayor Evans ABSENT: None

PUBLIC COMMENT ON MATTERS NOT ON AGENDA – None

CLOSED SESSION

1. PURSUANT TO GOVERNMENT CODE SECTIONS 54954.5(E) AND 54957, CLOSED SESSION CONSIDERATION OF THE FOLLOWING: PUBLIC EMPLOYEE PERFORMANCE EVALUATION TITLE: ASSISTANT CHIEF OF POLICE

2. CONFERENCE WITH REAL PROPERTY NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54956.8 FOR PROPERTY LOCATED AT: SILVERROCK RESORT (APNS 770-200-026; 776-150-021; 776-150-023; 770- 060-056; 770-060-057; 770-060-058; 770-060-059; 770-060-061; 770-060- 062; 777-490-004; 777-490-006; 777-490-007; 777-490-012 AND 777-490- 014); AGENCY NEGOTIATOR: FRANK J. SPEVACEK, CITY MANAGER NEGOTIATING PARTY: SILVERROCK DEVELOPMENT, LLC. UNDER NEGOTIATION: PRICE AND TERMS OF PAYMENT FOR ACQUISITION AND/OR DISPOSITION OF THE PROPERTY IDENTIFIED

Councilmember Osborne announced that he will be recusing himself and leaving the Closed Session room during the discussion and vote on Item No. 1 due to his firm’s business relationship with Assistant Police Chief Walton.

COUNCIL RECESSED TO CLOSED SESSION AT 2:32 P.M.

MAYOR EVANS RECONVENED THE CITY COUNCIL MEETING AT 4:07 P.M. WITH ALL MEMBERS PRESENT. CITY ATTORNEY IHRKE ANNOUNCED THAT NO ACTIONS WERE TAKEN IN CLOSED SESSION THAT REQUIRES REPORTING PURSUANT TO GOVERNMENT CODE SECTION 54957.1 (BROWN ACT).

Mayor Evans led the audience in the pledge of allegiance.

CITY COUNCIL MINUTES 1 MAY 19, 2015

PUBLIC COMMENT ON MATTERS NOT ON AGENDA

PUBLIC SPEAKER: Robert Cox, La Quinta – Mr. Cox, La Quinta’s representative on the Coachella Valley Mosquito and Vector Control Board for 6½ years, announced his resignation and expressed his pleasure in serving the City. Mr. Cox offered to remain on the Board until a new representative was appointed.

Mayor Evans thanked Mr. Cox for his years of excellent service and accepted his offer to stay as La Quinta’s representative as long as possible.

CONFIRMATION OF AGENDA – Confirmed

ANNOUNCEMENTS, PRESENTATIONS AND WRITTEN COMMUNICATIONS – None

CONSENT CALENDAR

1. APPROVE MINUTES OF MAY 5, 2015

2. APPROVE DEMAND REGISTERS DATED MAY 1, 4 AND 8, 2015

3. DENY CLAIM FOR DAMAGES FILED BY JASON SULLIVAN, DATE OF LOSS OCTOBER 15, 2014

4. DENY CLAIM FOR FLOOD DAMAGES FILED BY ROGER VAUGHN, DATE OF LOSS SEPTEMBER 8, 2014

5. DENY CLAIM FOR DAMAGES FILED BY ANN AND HARRY SCHAFFNER, DATE OF LOSS SEPTEMBER 8, 2014

6. DENY CLAIM FOR DAMAGES FILED BY EMIL PACELLI; DATE OF LOSS – OCTOBER 15, 2014

7. APPROVE PLANS, SPECIFICATIONS, AND ENGINEER’S ESTIMATE, AND SOLICIT BIDS FOR THE WASHINGTON STREET PAVEMENT REHABILITATION IMPROVEMENTS

8. ADOPT RESOLUTION GRANTING CONDITIONAL APPROVAL OF FINAL MAP AND SUBDIVISION IMPROVEMENT AGREEMENT ASSOCIATED WITH THE LA QUINTA SQUARE DEVELOPMENT (PARCEL MAP NO. 36791) [RESOLUTION 2015- 017]

9. REJECT ALL BIDS FOR THE LA QUINTA LIBRARY LIGHT-EMITTING DIODE LIGHTING CONVERSION PROJECT

10. RECEIVE AND FILE TREASURER’S REPORTS DATED FEBRUARY 28, 2015

CITY COUNCIL MINUTES 2 MAY 19, 2015

8 11. RECEIVE AND FILE TREASURER’S REPORTS DATED MARCH 31, 2015 MOTION – A motion was made and seconded by Councilmembers Franklin/Radi to approve the Consent Calendar as recommended with Item No. 8 adopting Resolution No. 2015-017. Motion passed unanimously.

BUSINESS SESSION

1. APPROVE LEGISLATIVE POLICY GUIDE UPDATE

Chris Escobedo, Assistant to City Manager and Office Assistant Douglass Kinley presented the staff report, which is on file in the City Clerk’s Office.

Councilmembers concurred that the costs-benefits of hiring a municipal lobbyist should be the subject of a Study Session.

MOTION – A motion was made and seconded by Councilmembers Radi/Franklin to approve the Legislative Policy Guide Update. Motion passed unanimously.

STUDY SESSION

1. REVIEW OF POLICE SERVICES AND CRIME TRENDS REPORT

Chris Escobedo, Assistant to City Manager, and Byron Pipkin of Matrix Consulting Group presented the staff report, which is on file in the City Clerk’s Office.

Councilmembers discussed the benefits of the community survey and the report; reliability and consistency of incident report data from both the Sheriff’s Department and various jurisdictions; improvement to the Knox system for emergency entry into gated communities; property crime rates due to City’s affluence; community communication; police approachability; future focus on service and efficiency; time to digest the report; and innovation in managing the City’s available funds.

Captain Shouse, La Quinta’s Police Chief assigned by the Sheriff’s Department, reported on the value of the report; importance of understanding where resources are being spent and getting high value for expenditures; need for Sheriff’s Department to complete an in-depth analysis of its “reactive” and “proactive” time to verify the methodology and results of the report; use of community survey to improve community outreach; and appreciation of the support and working relationship with La Quinta City Council and staff. Regarding police use of Knox boxes, Captain Shouse said he will work to find a solution and report back.

City Manager Spevacek explained that police service review is an ongoing process, and some recommendations will be presented during budget discussions in June. He said that staff will be working with the Sheriff’s Department to enhance service now that data is available to use to the benefit of both the Sheriff’s Department and residents.

CITY COUNCIL MINUTES 3 MAY 19, 2015

9 PUBLIC HEARINGS MAYOR EVANS MOVED THIS SECTION UP ON THE AGENDA TO BE HEARD AS CLOSE TO THE NOTICED TIME OF 5:00 P.M. AS POSSIBLE

1. ADOPT FIVE RESOLUTIONS TO APPROVE 1) MITIGATED NEGATIVE DECLARATION OF ENVIRONMENTAL IMPACT AND ASSOCIATED MITIGATION MONITORING PROGRAM FOR ENVIRONMENTAL ASSESSMENT, 2) GENERAL PLAN AMENDMENT, 3) SPECIFIC PLAN AMENDMENT, 4) TENTATIVE TRACT MAP, AND 5) SITE DEVELOPMENT PERMIT; AND INTRODUCE AN ORDINANCE TO CHANGE ZONING DESIGNATION FROM MEDIUM HIGH TO LOW DENSITY RESIDENTIAL TO ALLOW DEVELOPMENT OF 82 SINGLE-FAMILY HOMES ON 20.8 ACRES OF LAND LOCATED AT THE NORTHWEST CORNER OF JEFFERSON STREET AND AVENUE 52 [RESOLUTIONS 2015-018, 2015-019, 2015-020, 2015-021 AND 2015-022]

Planning Director Johnson presented the staff report, which is on file in the City Clerk’s Office.

Councilmembers discussed eave projection and project water efficiency.

MAYOR EVANS DECLARED THE PUBLIC HEARING OPEN AT 5:24 P.M.

DEVELOPER: Monica Ulteras, Beazer Homes Holdings – Ms. Ulteras responded to Councilmember concerns about eaves; turf placement; irrigation systems; landscaping materials; tree species; side and rear yard landscaping options; and clubhouse amenities.

MAYOR EVANS DECLARED THE PUBLIC HEARING CLOSED AT 5:43 P.M.

City Attorney Ihrke recommended that the following additional Condition of Approval be added to Site Development Permit 2014-1003 and to Tentative Tract Map 36744: “The applicant shall comply with all requirements, directives, and orders established pursuant to Executive Order B-29-15 and all regulations adopted to implement that executive order by any state, regional, or local agency or department, including but not limited to regulations adopted by the State Water Resources Control Board, California Department of Water Resources, California Energy Commission, and Coachella Valley Water District (or other distributor of a public water supply), in furtherance of the mandate to prevent the waste and unreasonable use of potable water. If another executive order or future regulations are issued and adopted in furtherance of a mandate to prevent the waste and unreasonable use of water, the applicant shall comply with all requirements, directives, and orders established thereunder. If a requirement, directive, or order established pursuant to Executive Order B-29-15 (or any future executive order) and regulations adopted pursuant thereto is more restrictive than a requirement under the La Quinta Municipal Code applicable by these conditions of approval, then the applicant shall comply with the most restrictive requirement.”

CITY COUNCIL MINUTES 4 MAY 19, 2015

10 The Condition of Approval addition was verbally accepted (off mic) by the Developer’s representative Monica Ulteras of Beazer Homes Holdings.

MOTION – A motion was made and seconded by Councilmembers Peña/Radi to adopt Resolution No. 2015-018 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING A MITIGATED NEGATIVE DECLARATION FOR ENVIRONMENTAL ASSESSMENT NO. 2014-638, FOR BEAZER HOMES HOLDINGS (WATERMARK) CASE NO.: ENVIRONMENTAL ASSESSMENT 2014-638, APPLICANT: BEAZER HOMES HOLDINGS Motion passed unanimously.

MOTION – A motion was made and seconded by Councilmembers Peña/Radi to adopt Resolution No. 2015-019 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING GENERAL PLAN AMENDMENT 2014-127, A CHANGE IN LAND USE DESIGNATION FOR THE NORTHWEST CORNER OF JEFFERSON STREET AND AVENUE 52 CASE: GENERAL PLAN AMENDMENT 2014-127, APPLICANT: BEAZER HOMES HOLDINGS, Motion passed unanimously.

MOTION – A motion was made and seconded by Councilmembers Peña/Radi to take up Ordinance No. 525 by title and number only and waive further reading. Motion passed unanimously.

City Clerk Maysels read the following title of Ordinance No. 525 into the record: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING ZONE CHANGE 2014-145, CHANGING THE ZONING DESIGNATION FOR ASSESSOR’S PARCEL NUMBERS 776-220-012, 776-220-013, 776-220-014 FROM MEDIUM HIGH DENSITY RESIDENTIAL TO LOW DENSITY RESIDENTIAL, CASE: ZONE CHANGE 2014-145, APPLICANT: BEAZER HOMES HOLDINGS

MOTION – A motion was made and seconded by Councilmembers Peña/Radi to introduce Ordinance No. 525 on first reading. Motion passed unanimously.

MOTION – A motion was made and seconded by Councilmembers Peña/Radi to adopt Resolution No. 2015-020 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING SPECIFIC PLAN 2003-069, AMENDMENT 1, FOR THE BEAZER HOMES WATERMARK SPECIFIC PLAN CASE NO.: SPECIFIC PLAN 2003-069, AMENDMENT NO. 1, APPLICANT: BEAZER HOMES HOLDINGS, Motion passed unanimously.

MOTION – A motion was made and seconded by Councilmembers Peña/Radi to adopt Resolution No. 2015-021 with the added condition of approval noted above: CITY COUNCIL MINUTES 5 MAY 19, 2015

11 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING TENTATIVE TRACT MAP 36762 LOCATED AT THE NORTHWEST CORNER OF JEFFERSON STREET AND AVENUE 52 CASE NO.: TENTATIVE TRACT MAP 36762, APPLICANT: BEAZER HOMES HOLDINGS, Motion passed unanimously.

MOTION – A motion was made and seconded by Councilmembers Peña/Radi to adopt RESOLUTION No. 2015-022 with the added condition of approval noted above: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING SITE DEVELOPMENT PERMIT 2014-942, ALLOWING THE DEVELOPMENT OF 82 HOMES ON 20.8 ACRES LOCATED AT THE NORTHWEST CORNER OF JEFFERSON STREET AND AVENUE 52, CASE NO.: SITE DEVELOPMENT PERMIT 2014-942 APPLICANT: BEAZER HOMES HOLDINGS Motion passed unanimously.

2. FISCAL YEAR 2015/2016 PROPOSED BUDGET

Finance Director Conrad presented the staff report, which is on file in the City Clerk’s Office, including the corrected page handed out by the Finance Director.

Councilmembers discussed police and fire increases; CalPERS projections; supplemental budget requests; projected budget balance; and marketing expenditures.

Sheriff Captain Shouse explained the factors driving up the Sheriff’s Department costs.

Riverside County Division Chief Stowells provided information on the Fire Department’s budget and factors that may affect the budget over the next few years.

3. LOGO UPDATE / BRAND REFRESHMENT

Marketing and Events Supervisor Larson presented the staff report, which is on file in the City Clerk’s Office.

Councilmembers discussed the need for more space between the words LA and Quinta; support for adding the word California to distinguish the city from the hotel chain; the absence of the tagline gem of the desert; size of the gem graphic; getting input from local students and Graphtec; support for the font but font thickness and tail of the letter Q questioned; need for a policy on use of the logo; support for the color palette; options regarding the seal design; blue mountains within the old logo; the timing and cost of changing city monument and entry signs; the need to unveil the new logo during an event to expose it to a large audience; and a consensus to see a few concepts that are variations on the logo presented.

City Manager Spevacek suggested that staff begin formatting reports and letterhead using the new font. Council concurred. CITY COUNCIL MINUTES 6 MAY 19, 2015

REPORTS AND INFORMATIONAL ITEMS

La Quinta’s representative for 2015, Mayor Evans reported on her participation in the following organizations’ meetings:  CVAG COACHELLA VALLEY CONSERVATION COMMISSION  CVAG ENERGY & ENVIRONMENTAL RESOURCES COMMITTEE  GREATER PALM SPRINGS CONVENTION & VISITORS BUREAU  LEAGUE OF CALIFORNIA CITIES DELEGATE  SO. CALIFORNIA ASSOCIATION OF GOVERNMENTS

La Quinta’s representative for 2015, Councilmember Franklin reported on her participation in the following organization’s meeting:  COACHELLA VALLEY MOUNTAINS CONSERVANCY

La Quinta’s representative for 2015, Councilmember Osborne reported on his participation in the following organizations’ meetings:  CVAG PUBLIC SAFETY COMMITTEE  DESERT SANDS SCHOOL DISTRICT COMMITTEE

La Quinta’s representative for 2015, Councilmember Peña reported on his participation in the following organization’s meeting:  ANIMAL CAMPUS COMMISSION

La Quinta’s representative for 2015, Councilmember Radi reported on his participation in the following organizations’ meetings:  CHAMBER OF COMMERCE INFO EXCHANGE COMMITTEE  RIVERSIDE COUNTY TRANSPORTATION COMMISSION

DEPARTMENT REPORTS

Department Reports were received and filed. Copies are available in the City Clerk’s Office.

City Clerk Maysels reported on applications received to date for the new Advisory Committee.

Community Development Director Johnson reported on the progress of the outreach effort to receive community input on Village development.

MAYOR’S AND COUNCIL MEMBER’S ITEMS

Mayor Evans and Councilmember Osborne requested a list of the grants the City has given to La Quinta schools.

CITY COUNCIL MINUTES 7 MAY 19, 2015

13 Mayor Evans reported that a partnership between the Greater Palm Springs Convention and Visitors Bureau and the La Quinta Arts Foundation has resulted in the creation of a new non-profit entity called the California Desert Arts Council (CDAC), which will generate new platforms for arts and culture that tie into tourism.

Councilmember Franklin reported on the successful 2x2 meeting with the school district at the Wellness Center.

ADJOURNMENT

There being no further business, a motion was made and seconded by Councilmembers Franklin/Radi to adjourn at 7:51 p.m. Motion passed unanimously.

Respectfully submitted,

SUSAN MAYSELS, City Clerk City of La Quinta, California

CITY COUNCIL MINUTES 8 MAY 19, 2015

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AGENDA CATEGORY: CITY / SA / HA / FA MEETING DATE: June 2, 2015

BUSINESS SESSION: ITEM TITLE: SECOND READING AND ADOPTION OF ORDINANCE NO. 525 CHANGING ZONING CONSENT CALENDAR: DESIGNATION FROM MEDIUM HIGH TO LOW DENSITY RESIDENTIAL FOR PROPERTY LOCATED AT STUDY SESSION: THE NORTHWEST CORNER OF JEFFERSON STREET PUBLIC HEARING: AND AVENUE 52

RECOMMENDED ACTION:

Adopt Ordinance No. 525 on second reading.

EXECUTIVE SUMMARY:

 At the May 19, 2015 City Council meeting, Council unanimously approved a motion to take up and introduce Ordinance No. 525 on first reading.

 The ordinance approves Zone Change 2014-145 for property located at the northwest corner of Jefferson Street and Avenue 52 (former Watermark Villas project), changing the zoning designation for Assessor’s Parcel Numbers 776- 220-012, 776-220-013, 776-220-014 from medium high to low density residential.

 By law, a second reading of an ordinance must occur, followed by adoption and a 30-day posting period, before an ordinance may take effect.

FISCAL IMPACT:

None.

BACKGROUND/ANALYSIS:

The Watermark Villas project was originally approved in 2004, with amendments made to the proposed clubhouse in 2006. The project consisted of 250 condominium units on the 20.8 acre site. After approval, the site was graded, portions of utility

infrastructure installed, and one 8-plex building and 10 podium garages were constructed. The project then stopped during the economic downturn. Improvements remain partially completed to this day.

Beazer Homes subsequently purchased the property and proposes demolition of all existing improvements, with the exception of the existing wall, entry gate and paving, and the retention basin. They would then build 82 single-family homes.

As a result of the significant changes, a Change of Zone from Medium High Density Residential to Low Density Residential is needed.

The site currently has a General Plan Land Use designation of Medium/High Density Residential, and a Zoning designation of Medium High Density Residential. These designations were consistent with the previous Watermark project. In order to allow the proposed single-family homes, however, a designation of Low Density Residential must be applied to this parcel.

The property is abutted to the north and west by Low Density Residential designations, as part of the Citrus project. On the east, lands are designated commercial at the northeast corner of Jefferson Street and Avenue 52. On the southeast corner of this intersection, lands are designated Medium/High Density Residential in the General Plan, and both Medium and Medium High Density Residential on the Zoning Map. On the southwest corner of the intersection, lands are designated Open Space and Tourist Commercial, as part of the SilverRock Resort project. With its adjacency to Low Density Residential lands to the north and west, a reduction in land use intensity to Low Density Residential is appropriate for the site.

ALTERNATIVES:

As Council approved this ordinance at first reading, staff does not recommend an alternative.

Report prepared by: Pam Nieto, Administrative Technician Report approved for submission by: Susan Maysels, City Clerk

ORDINANCE NO. 525

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING ZONE CHANGE 2014- 145, CHANGING THE ZONING DESIGNATION FOR ASSESSOR’S PARCEL NUMBERS 776-220-012, 776-220- 013, 776-220-014 FROM MEDIUM HIGH DENSITY RESIDENTIAL TO LOW DENSITY RESIDENTIAL

CASE: ZONE CHANGE 2014-145 APPLICANT: BEAZER HOMES HOLDINGS

WHEREAS, the City Council of the City of La Quinta, California did, on the 6th day of January, 3rd day of March and 19th day of May, 2015, consider a request by Beazer Homes Holdings for a change in zoning from Medium High Density Residential to Low Density Residential, located at the northwest corner of Jefferson Street and Avenue 52, more particularly described as:

Assessor’s Parcel Nos.: 776-220-012, 776-220-013, 776-220-014

WHEREAS, the Planning Commission of the City of La Quinta did, on the 9th day of December, 2014, hold a duly noticed Public Hearing to consider the aforementioned Zone Change; and,

WHEREAS, subsequent to said Public Hearing, the Planning Commission of the City of La Quinta did adopt Planning Commission Resolution 2014-029 to recommend to the City Council adoption of said Zone Change; and,

WHEREAS, said Zone Change has complied with the requirements of “The Rules to Implement the California Environmental Quality Act of 1970" as amended (Resolution 83-68), in that the La Quinta Community Development Director has determined that the Zone Change could have a significant impact on the environment but that all potentially significant impacts can be reduced to less than significant levels, and a Mitigated Negative Declaration has been approved; and,

WHEREAS, at said Public Hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons wanting to be heard, the La Quinta City Council did make the following mandatory findings to justify adoption of said Zone Change:

Finding A The project is consistent with the General Plan

The proposed Zone Change is internally consistent with those goals, objectives and

policies of the general plan which are not being amended. The proposed Low Density Residential designation is consistent with lands to the west and north of the parcel.

Finding B Approval of the amendment will not create conditions materially detrimental to the public health, safety and general welfare.

Approval of the proposed Zone Change will not create conditions materially detrimental to public health, safety and general welfare insofar as the Low Density Residential designation will result in the development of single-family homes and similar uses permitted by the General Plan in this land use designation.

Finding C The new designation is compatible with the land use designations on adjacent properties.

The Zone Change is consistent with the land use designation for properties located north and west of the parcel.

Finding D The new land use designation is suitable and appropriate for the subject property.

The new zoning designation is suitable and appropriate for the subject property, insofar as it will allow the development of single-family homes on a site that is generally flat and rectangular.

Finding E Approval of the amendment is warranted because the situation and the general conditions of the property have substantially changed since the existing designation was imposed.

Approval of the new zoning designation is warranted because the density of the proposed single-family tract will be less than 4 units per acre.

NOW, THEREFORE, the City Council of the City of La Quinta does ordain as follows:

SECTION 1. The La Quinta Zoning Map is hereby amended as follows:

1. APNs: 776-220-012, 776-220-013, 776-220-014 are designated Low Density Residential (Exhibit A).

SECTION 2. ENVIRONMENTAL: The Community Development Department determined that the proposed Zone Change could have a significant impact on the environment, but all significant impacts can be mitigated to a less than significant level.

SECTION 3. EFFECTIVE DATE: This Ordinance shall be in full force and effect thirty (30) days after its adoption.

SECTION 4. POSTING: The City Clerk shall, within 15 days after passage of this Ordinance, cause it to be posted in at least three public places designated by resolution of the City Council, shall certify to the adoption and posting of this Ordinance, and shall cause this Ordinance and its certification, together with proof of posting to be entered into the Book of Ordinances of the City of La Quinta.

PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta City Council held this 2nd day of June, 2015, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

______LINDA EVANS, Mayor City of La Quinta, California

ATTEST:

______SUSAN MAYSELS, City Clerk City of La Quinta, California

(CITY SEAL)

APPROVED AS TO FORM:

______WILLIAM H. IHRKE, City Attorney City of La Quinta, California

STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA )

I, SUSAN MAYSELS, City Clerk of the City of La Quinta, California, do hereby certify the foregoing to be a full, true, and correct copy of Ordinance No. 525(enter number) which was introduced at a regular meeting on the 19th day of May, 2015,(Clerk's Office will enter) and was adopted at a regular meeting held on the 2nd day of June, 2015, not being less than 5 days after the date of introduction thereof.

I further certify that the foregoing Ordinance was posted in three places within the City of La Quinta as specified in the Rules of Procedure adopted by City Council Resolution No. 2014-013.

______SUSAN MAYSELS, City Clerk City of La Quinta, California

DECLARATION OF POSTING

I, SUSAN MAYSELS, City Clerk of the City of La Quinta, California, do hereby certify that the foregoing ordinance was posted on June 3, 2015(Clerk's Office will enter), pursuant to Council Resolution.

______SUSAN MAYSELS, City Clerk City of La Quinta, California

CITY / SA / HA / FA MEETING DATE: June 2, 2015 AGENDA CATEGORY:

BUSINESS SESSION: ITEM TITLE: APPROVE PROFESSIONAL SERVICES AGREEMENT WITH BENGAL ENGINEERING TO PROVIDE CONSENT CALENDAR: PROFESSIONAL ENGINEERING SERVICES FOR DUNE STUDY SESSION: PALMS ROAD WIDENING PROJECT PUBLIC HEARING:

RECOMMENDED ACTION:

Approve a Professional Services Agreement, in the amount of $123,900, with Bengal Engineering, Inc. to provide professional engineering services for the Dune Palms Road Widening Improvement Project, and authorize the City Manager to execute the agreement.

EXECUTIVE SUMMARY:

 The Dune Palms Road Widening Improvement Project will widen Dune Palms Road between Blackhawk Way and the north project limit of the future Dune Palms Road Bridge across the Whitewater Channel.

 After soliciting and receiving proposals from consultant engineering firms, Bengal Engineering was hired for the Dune Palms Bridge Project, which will abut the proposed Dune Palms Road Widening Project.

 Staff believes Bengal Engineering is the best firm to design the street improvements and that the City will benefit by having both projects designed by the same engineering firm.

FISCAL IMPACT:

Staff proposes to fund this project with Measure A, Transportation Development Impact Fees (DIF), and Coachella Valley Associations of Governments (CVAG) Regional Arterial Funding. Measure A funds in the amount of $308,000 were previously approved in Fiscal Year 2013/2014 for the street improvement plans. The balance of the funding is included in the proposed Fiscal Year 2015/2016 Capital Improvement Program.

The following are the project’s proposed funding and funding sources:

FUNDING SOURCE AMOUNT Measure A Funds $ 383,000 Transportation DIF Funds $ 525,000 CVAG Regional Arterial Funds $1,575,000 TOTAL ANTICIPATED FUNDING $2,483,000

The following are the anticipated project expenditures:

BUDGET LINE ITEM BUDGET Professional: $ 56,000 Engineering: $ 123,900 Right-of-Way Acquisition: $ 500,000 Inspection/Test/Survey: $ 112,000 Construction: $1,402,000 Contingency: $ 244,100 City Administration: $ 45,000 TOTAL BUDGET: $2,483,000

Contingent upon Council’s approval of the Professional Services Agreement (PSA) (Attachment 1), the engineering and professional services phase would begin at this time with an anticipated expenditure of $179,900. These expenditures will be charged against the Measure A funding approved by Council as part of the Fiscal Year 2013/2014 Capital Improvement Program. No additional appropriation is required for this phase.

BACKGROUND/ANALYSIS:

In 2007, the former Redevelopment Agency purchased over five acres of land at the northeast corner of Dune Palms Road and Westward Ho for an affordable housing project. The proposed street improvements and road widening on Dune Palms Road were anticipated in order to address the project’s traffic and drainage impacts. The project was placed on hold when the State eliminated Redevelopment Agencies.

A portion of the originally purchased land at the northeast corner of Dune Palms Road and Westward Ho is being considered for a new regional skate park facility and a new four-lane bridge is under design for Dune Palms Road across the Whitewater River. These two projects will require the widening of Dune Palms Road.

The proposed improvements will consist of constructing Dune Palms Road to its General Plan Secondary Arterial configuration between Black Hawk Way and the northerly bridge approach at the Whitewater River as shown in Attachment 2. The improvements include a new northbound travel lane, bicycle/golf cart lane, curb,

38 gutter, and a 6-foot wide curb-adjacent sidewalk. Completion of the project will require utility relocation and right-of-way acquisition.

Bengal Engineering’s roadway design engineer previously worked on the roadway plans for the former Redevelopment Agency. The roadway widening and the bridge improvement projects overlap in terms of right-of-way acquisition and environmental impact. Using the same design engineer should reduce the overall design cost and will improve coordination of the environmental, right-of-way acquisition, and construction phases of both projects.

ALTERNATIVES:

An alternative would be to direct staff to issue a request for proposals for these services. Since uncoupling the design of these projects would forego any cost savings that could be achieved through economies of scale and unnecessarily delay delivery of the street, bridge and skate park improvements, no alternative is recommended.

Report prepared by: Ed Wimmer, P.E., Principal Engineer Report approved for submission by: Timothy R. Jonasson, P.E. Public Works Director/City Engineer

Attachments: 1. PSA 2. Project Map

PROFESSIONAL SERVICES AGREEMENT

THIS PROFESSIONAL SERVICES AGREEMENT (the “Agreement”) is made and entered into by and between the CITY OF LA QUINTA, (“City”), a California municipal corporation, and Bengal Engineering, Inc. (“Consultant”). The parties hereto agree as follows:

1.0 SERVICES OF CONSULTANT

1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide those services related to Dune Palms Road Widening Improvement, Project No. 2009-04, as specified in the “Scope of Services” attached hereto as Exhibit “A” and incorporated herein by this reference (the “Services”). Consultant represents and warrants that Consultant is a provider of first-class services and Consultant is experienced in performing the Services contemplated herein and, in light of such status and experience, Consultant covenants that it shall follow the highest professional standards in performing the Services required hereunder. For purposes of this Agreement, the phrase “highest professional standards” shall mean those standards of practice recognized by one or more first-class firms performing similar services under similar circumstances.

1.2 Compliance with Law. All services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules, regulations, and laws of the City and any Federal, State, or local governmental agency of competent jurisdiction.

1.3 Licenses, Permits, Fees and Assessments. Except as otherwise specified herein, Consultant shall obtain at its sole cost and expense such licenses, permits, and approvals as may be required by law for the performance of the Services required by this Agreement, including a City of La Quinta business license. Consultant and its employees, agents, and subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required for the performance of the Services required by this Agreement. Consultant shall have the sole obligation to pay for any fees, assessments, and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the performance of the Services required by this Agreement, and shall indemnify, defend (with counsel selected by City), and hold City, its elected officials, officers, employees, and agents, free and harmless against any such fees, assessments, taxes, penalties, or interest levied, assessed, or imposed against City hereunder. Consultant shall be responsible for all subcontractors’ compliance with this Section.

1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that (a) it has thoroughly investigated and considered the Services to be

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performed, (b) it has investigated the site where the Services are to be performed, if any, and fully acquainted itself with the conditions there existing, (c) it has carefully considered how the Services should be performed, and (d) it fully understands the facilities, difficulties, and restrictions attending performance of the Services under this Agreement. Should Consultant discover any latent or unknown conditions materially differing from those inherent in the Services or as represented by City, Consultant shall immediately inform City of such fact and shall not proceed except at Consultant's risk until written instructions are received from the Contract Officer (as defined in Section 4.2 hereof).

1.5 Standard of Care. Consultant acknowledges and understands that the Services contracted for under this Agreement require specialized skills and abilities and that, consistent with this understanding, Consultant’s work will be held to a heightened standard of quality. Consistent with Section 1.4 hereinabove, Consultant represents to City that it holds the necessary skills and abilities to satisfy the heightened standard of quality as set forth in this Agreement. Consultant shall adopt reasonable methods during the life of this Agreement to furnish continuous protection to the Services performed by Consultant, and the equipment, materials, papers, and other components thereof to prevent losses or damages, and shall be responsible for all such damages, to persons or property, until acceptance of the Services by City, except such losses or damages as may be caused by City's own negligence. The performance of Services by Consultant shall not relieve Consultant from any obligation to correct any incomplete, inaccurate, or defective work at no further cost to City, when such inaccuracies are due to the negligence of Consultant.

1.6 Additional Services. In accordance with the terms and conditions of this Agreement, Consultant shall perform services in addition to those specified in the Scope of Services (“Additional Services”) only when directed to do so by the Contract Officer, provided that Consultant shall not be required to perform any Additional Services without compensation. Consultant shall not perform any Additional Services until receiving prior written authorization from the Contract Officer, incorporating therein any adjustment in (i) the Contract Sum, and/or (ii) the time to perform this Agreement, which said adjustments are subject to the written approval of Consultant. It is expressly understood by Consultant that the provisions of this Section shall not apply to the Services specifically set forth in the Scope of Services or reasonably contemplated therein. It is specifically understood and agreed that oral requests and/or approvals of Additional Services shall be barred and are unenforeceable. Failure of Consultant to secure the Contract Officer’s written authorization for Additional Services shall constitute a waiver of any and all right to adjustment of the Contract Sum or time to perform this Agreement, whether by way of compensation, restitution, quantum meruit, or the like, for Additional Services provided without the appropriate authorization from the

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Contract Officer. Compensation for properly authorized Additional Services shall be made in accordance with Section 2.3 of this Agreement.

1.7 Special Requirements. Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in Exhibit “D” (the “Special Requirements”), which is incorporated herein by this reference and expressly made a part hereof. In the event of a conflict between the provisions of the Special Requirements and any other provisions of this Agreement, the provisions of the Special Requirements shall govern.

2.0 COMPENSATION

2.1 Contract Sum. For the Services rendered pursuant to this Agreement, Consultant shall be compensated in accordance with Exhibit “B” (the “Schedule of Compensation”) in a total amount not to exceed One Hundred Twenty Three Thousand, Nine Hundred Dollars ($123,900.00) (the “Contract Sum”), except as provided in Section 1.6. The method of compensation set forth in the Schedule of Compensation may include a lump sum payment upon completion, payment in accordance with the percentage of completion of the Services, payment for time and materials based upon Consultant's rate schedule, but not exceeding the Contract Sum, or such other methods as may be specified in the Schedule of Compensation. The Contract Sum shall include the attendance of Consultant at all project meetings reasonably deemed necessary by City; Consultant shall not be entitled to any additional compensation for attending said meetings. Compensation may include reimbursement for actual and necessary expenditures for reproduction costs, transportation expense, telephone expense, and similar costs and expenses when and if specified in the Schedule of Compensation. Regardless of the method of compensation set forth in the Schedule of Compensation, Consultant’s overall compensation shall not exceed the Contract Sum, except as provided in Section 1.6 of this Agreement.

2.2 Method of Billing. Any month in which Consultant wishes to receive payment, Consultant shall submit to City no later than the tenth (10th) working day of such month, in the form approved by City's Finance Director, an invoice for Services rendered prior to the date of the invoice. Such invoice shall (1) describe in detail the Services provided, including time and materials, and (2) specify each staff member who has provided Services and the number of hours assigned to each such staff member. Such invoice shall contain a certification by a principal member of Consultant specifying that the payment requested is for Services performed in accordance with the terms of this Agreement. Subject to retention pursuant to Section 8.3, City will pay Consultant for all items stated thereon which are approved by City pursuant to this Agreement no later than thirty (30) days after invoices are received by the City’s Finance Department.

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2.3 Compensation for Additional Services. Additional Services approved in advance by the Contract Officer pursuant to Section 1.6 of this Agreement shall be paid for in an amount agreed to in writing by both City and Consultant in advance of the Additional Services being rendered by Consultant. Any compensation for Additional Services amounting to five percent (5%) or less of the Contract Sum may be approved by the Contract Officer. Any greater amount of compensation for Additional Services must be approved by the La Quinta City Council. Under no circumstances shall Consultant receive compensation for any Additional Services unless prior written approval for the Additional Services is obtained from the Contract Officer pursuant to Section 1.6 of this Agreement.

3.0 PERFORMANCE SCHEDULE

3.1 Time of Essence. Time is of the essence in the performance of this Agreement. If the Services not completed in accordance with the Schedule of Performance, as set forth in Section 3.2 and Exhibit C, it is understood that the City will suffer damage.

3.2 Schedule of Performance. All Services rendered pursuant to this Agreement shall be performed diligently and within the time period established in Exhibit C (the “Schedule of Performance”). Extensions to the time period specified in the Schedule of Performance may be approved in writing by the Contract Officer.

3.3 Force Majeure. The time period specified in the Schedule of Performance for performance of the Services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant, including, but not restricted to, acts of God or of the public enemy, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, acts of any governmental agency other than City, and unusually severe weather, if Consultant shall within ten (10) days of the commencement of such delay notify the Contract Officer in writing of the causes of the delay. The Contract Officer shall ascertain the facts and the extent of delay, and extend the time for performing the Services for the period of the forced delay when and if in his or her judgment such delay is justified, and the Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. Extensions to time period in the Schedule of Performance which are determined by the Contract Officer to be justified pursuant to this Section shall not entitle the Consultant to additional compensation in excess of the Contract Sum.

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3.4 Term. Unless earlier terminated in accordance with Sections 8.8 or 8.9 of this Agreement, the term of this agreement shall commence on June 3, 2015 and terminate on July 31, 2017 (“Initial Term”). This Agreement may be extended upon mutual agreement by both parties (“Extended Term”).

4.0 COORDINATION OF WORK

4.1 Representative of Consultant. The following principals of Consultant (“Principals”) are hereby designated as being the principals and representatives of Consultant authorized to act in its behalf with respect to the Services specified herein and make all decisions in connection therewith:

a. Scott Onishuk, P.E., Principal In Charge E-mail: [email protected]

b. Brad Donais, P.E., Project Engineer E-mail: [email protected]

It is expressly understood that the experience, knowledge, capability, and reputation of the foregoing Principals were a substantial inducement for City to enter into this Agreement. Therefore, the foregoing Principals shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the Services hereunder. For purposes of this Agreement, the foregoing Principals may not be changed by Consultant and no other personnel may be assigned to perform the Services required hereunder without the express written approval of City.

4.2 Contract Officer. The “Contract Officer” shall be Timothy R. Jonasson, P.E., Public Works Director/City Engineer or such other person as may be designated in writing by the City Manager of City. It shall be Consultant's responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the Services, and Consultant shall refer any decisions, that must be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer. The Contract Officer shall have authority to sign all documents on behalf of City required hereunder to carry out the terms of this Agreement.

Last revised April 2015 -5- 45 interest herein may be transferred, assigned, conveyed, hypothecated, or encumbered, voluntarily or by operation of law, without the prior written approval of City. Transfers restricted hereunder shall include the transfer to any person or group of persons acting in concert of more than twenty five percent (25%) of the present ownership and/or control of Consultant, taking all transfers into account on a cumulative basis. Any attempted or purported assignment or contracting by Consultant without City’s express written approval shall be null, void, and of no effect. No approved transfer shall release Consultant of any liability hereunder without the express consent of City.

4.4 Independent Contractor. Neither City nor any of its employees shall have any control over the manner, mode, or means by which Consultant, its agents, or its employees, perform the Services required herein, except as otherwise set forth herein. City shall have no voice in the selection, discharge, supervision, or control of Consultant’s employees, servants, representatives, or agents, or in fixing their number or hours of service. Consultant shall perform all Services required herein as an independent contractor of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. City shall not in any way or for any purpose become or be deemed to be a partner of Consultant in its business or otherwise or a joint venturer or a member of any joint enterprise with Consultant. Consultant shall have no power to incur any debt, obligation, or liability on behalf of City. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. Except for the Contract Sum paid to Consultant as provided in this Agreement, City shall not pay salaries, wages, or other compensation to Consultant for performing the Services hereunder for City. City shall not be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing the Services hereunder. Notwithstanding any other City, state, or federal policy, rule, regulation, law, or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing services under this Agreement shall not qualify for or become entitled to any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in the California Public Employees Retirement System (“PERS”) as an employee of City and entitlement to any contribution to be paid by City for employer contributions and/or employee contributions for PERS benefits. Consultant agrees to pay all required taxes on amounts paid to Consultant under this Agreement, and to indemnify and hold City harmless from any and all taxes, assessments, penalties, and interest asserted against City by reason of the independent contractor relationship created by this Agreement. Consultant shall fully comply with the workers’ compensation laws regarding Consultant and Consultant’s employees. Consultant further agrees to indemnify and hold City harmless from any failure of Consultant to comply with applicable workers’ compensation laws. City shall have the right to offset against

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the amount of any payment due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant’s failure to promptly pay to City any reimbursement or indemnification arising under this Section.

4.5 Identity of Persons Performing Work. Consultant represents that it employs or will employ at its own expense all personnel required for the satisfactory performance of any and all of the Services set forth herein. Consultant represents that the Services required herein will be performed by Consultant or under its direct supervision, and that all personnel engaged in such work shall be fully qualified and shall be authorized and permitted under applicable State and local law to perform such tasks and services.

4.6 City Cooperation. City shall provide Consultant with any plans, publications, reports, statistics, records, or other data or information pertinent to the Services to be performed hereunder which are reasonably available to Consultant only from or through action by City.

5.0 INSURANCE

5.1 Insurance. Prior to the beginning of any Services under this Agreement and throughout the duration of the term of this Agreement, Consultant shall procure and maintain, at its sole cost and expense, and submit concurrently with its execution of this Agreement, policies of insurance as set forth in Exhibit E (the “Insurance Requirements”) which is incorporated herein by this reference and expressly made a part hereof. 6.0 INDEMNIFICATION.

6.1 Indemnification. To the fullest extent permitted by law, Consultant shall indemnify, protect, defend (with counsel selected by City), and hold harmless City and any and all of its officers, employees, agents, and volunteers as set forth in Exhibit F (“Indemnification”) which is incorporated herein by this reference and expressly made a part hereof.

7.0 RECORDS AND REPORTS.

7.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer such reports concerning Consultant's performance of the Services required by this Agreement as the Contract Officer shall require. Consultant hereby acknowledges that City is greatly concerned about the cost of the Services to be performed pursuant to this Agreement. For this reason, Consultant agrees that if Consultant becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the Services contemplated herein or, if Consultant is providing design services, the cost of the project being designed, Consultant shall promptly notify the Contract Officer of said fact,

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circumstance, technique, or event and the estimated increased or decreased cost related thereto and, if Consultant is providing design services, the estimated increased or decreased cost estimate for the project being designed.

7.2 Records. Consultant shall keep, and require any subcontractors to keep, such ledgers, books of accounts, invoices, vouchers, canceled checks, reports (including but not limited to payroll reports), studies, or other documents relating to the disbursements charged to City and the Services performed hereunder (the “Books and Records”), as shall be necessary to perform the Services required by this Agreement and enable the Contract Officer to evaluate the performance of such Services. Any and all such Books and Records shall be maintained in accordance with generally accepted accounting principles and shall be complete and detailed. The Contract Officer shall have full and free access to such Books and Records at all times during normal business hours of City, including the right to inspect, copy, audit, and make records and transcripts from such Books and Records. Such Books and Records shall be maintained for a period of three (3) years following completion of the Services hereunder, and City shall have access to such Books and Records in the event any audit is required. In the event of dissolution of Consultant’s business, custody of the Books and Records may be given to City, and access shall be provided by Consultant’s successor in interest. Under California Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds Ten Thousand Dollars ($10,000.00), this Agreement shall be subject to the examination and audit of the State Auditor, at the request of City or as part of any audit of City, for a period of three (3) years after final payment under this Agreement.

7.3 Ownership of Documents. All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes, computer files, reports, records, documents, and other materials plans, drawings, estimates, test data, survey results, models, renderings, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings, digital renderings, or data stored digitally, magnetically, or in any other medium prepared or caused to be prepared by Consultant, its employees, subcontractors, and agents in the performance of this Agreement (the “Documents and Materials”) shall be the property of City and shall be delivered to City upon request of the Contract Officer or upon the expiration or termination of this Agreement, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership use, reuse, or assignment of the Documents and Materials hereunder. Any use, reuse or assignment of such completed Documents and Materials for other projects and/or use of uncompleted documents without specific written authorization by Consultant will be at City’s sole risk and without liability to Consultant, and Consultant’s guarantee and warranties shall not extend to such use, revise, or assignment. Consultant may retain copies of such Documents and Materials for its

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own use. Consultant shall have an unrestricted right to use the concepts embodied therein. All subcontractors shall provide for assignment to City of any Documents and Materials prepared by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify City for all damages resulting therefrom.

In the event City or any person, firm, or corporation authorized by City reuses said Documents and Materials without written verification or adaptation by Consultant for the specific purpose intended and causes to be made or makes any changes or alterations in said Documents and Materials, City hereby releases, discharges, and exonerates Consultant from liability resulting from said change. The provisions of this clause shall survive the termination or expiration of this Agreement and shall thereafter remain in full force and effect.

7.4 Licensing of Intellectual Property. This Agreement creates a non- exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, rights of reproduction, and other intellectual property embodied in the Documents and Materials. Consultant shall require all subcontractors, if any, to agree in writing that City is granted a non-exclusive and perpetual license for the Documents and Materials the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all of the Documents and Materials. Consultant makes no such representation and warranty in regard to the Documents and Materials which were prepared by design professionals other than Consultant or provided to Consultant by City. City shall not be limited in any way in its use of the Documents and Materials at any time, provided that any such use not within the purposes intended by this Agreement shall be at City’s sole risk.

7.5 Release of Documents. The Documents and Materials shall not be released publicly without the prior written approval of the Contract Officer or as required by law. Consultant shall not disclose to any other entity or person any information regarding the activities of City, except as required by law or as authorized by City.

8.0 ENFORCEMENT OF AGREEMENT.

8.1 California Law. This Agreement shall be interpreted, construed, and governed both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action.

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8.2 Disputes. In the event of any dispute arising under this Agreement, the injured party shall notify the injuring party in writing of its contentions by submitting a claim therefore. The injured party shall continue performing its obligations hereunder so long as the injuring party commences to cure such default within ten (10) days of service of such notice and completes the cure of such default within forty-five (45) days after service of the notice, or such longer period as may be permitted by the Contract Officer; provided that if the default is an immediate danger to the health, safety, or general welfare, City may take such immediate action as City deems warranted. Compliance with the provisions of this Section shall be a condition precedent to termination of this Agreement for cause and to any legal action, and such compliance shall not be a waiver of any party's right to take legal action in the event that the dispute is not cured, provided that nothing herein shall limit City's right to terminate this Agreement without cause pursuant to Section 8.8. During the period of time that Consultant is in default, City shall hold all invoices and shall, when the default is cured, proceed with payment on the invoices. In the alternative, City may, in its sole discretion, elect to pay some or all of the outstanding invoices during any period of default.

8.3 Retention of Funds. City may withhold from any monies payable to Consultant sufficient funds to compensate City for any losses, costs, liabilities, or damages it reasonably believes were suffered by City due to the default of Consultant in the performance of the Services required by this Agreement.

8.4 Waiver. No delay or omission in the exercise of any right or remedy of a non-defaulting party on any default shall impair such right or remedy or be construed as a waiver. City's consent or approval of any act by Consultant requiring City's consent or approval shall not be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Consultant. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement.

8.5 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

8.6 Legal Action. In addition to any other rights or remedies, either party may take legal action, at law or at equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement.

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8.7 Termination Prior To Expiration Of Term. This Section shall govern any termination of this Agreement, except as specifically provided in the following Section 8.9 for termination for cause. City reserves the right to terminate this Agreement at any time, with or without cause, upon thirty (30) days' written notice to Consultant. Upon receipt of any notice of termination, Consultant shall immediately cease all Services hereunder except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all Services rendered prior to receipt of the notice of termination and for any Services authorized by the Contract Officer thereafter in accordance with the Schedule of Compensation or such as may be approved by the Contract Officer, except as provided in Section 8.3.

8.8 Termination for Default of Consultant. If termination is due to the failure of Consultant to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section 8.2, take over the Services and prosecute the same to completion by contract or otherwise, and Consultant shall be liable to the extent that the total cost for completion of the Services required hereunder exceeds the compensation herein stipulated (provided that City shall use reasonable efforts to mitigate such damages), and City may withhold any payments to Consultant for the purpose of setoff or partial payment of the amounts owed City as previously stated in Section 8.3.

8.9 Attorneys' Fees. If either party to this Agreement is required to initiate or defend or made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorneys’ fees; provided, however, that the attorneys’ fees awarded pursuant to this Section shall not exceed the hourly rate paid by City for legal services multiplied by the reasonable number of hours spent by the prevailing party in the conduct of the litigation. Attorneys’ fees shall include attorneys’ fees on any appeal, and in addition a party entitled to attorneys’ fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery, and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. The court may set such fees in the same action or in a separate action brought for that purpose.

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9.0 CITY OFFICERS AND EMPLOYEES; NONDISCRIMINATION.

9.1 Non-liability of City Officers and Employees. No officer, official, employee, agent, representative, or volunteer of City shall be personally liable to Consultant, or any successor in interest, in the event or any default or breach by City or for any amount which may become due to Consultant or to its successor, or for breach of any obligation of the terms of this Agreement.

9.2 Conflict of Interest. Consultant covenants that neither it, nor any officer or principal of it, has or shall acquire any interest, directly or indirectly, which would conflict in any manner with the interests of City or which would in any way hinder Consultant’s performance of the Services under this Agreement. Consultant further covenants that in the performance of this Agreement, no person having any such interest shall be employed by it as an officer, employee, agent, or subcontractor without the express written consent of the Contract Officer. Consultant agrees to at all times avoid conflicts of interest or the appearance of any conflicts of interest with the interests of City in the performance of this Agreement.

No officer or employee of City shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to this Agreement which effects his financial interest or the financial interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in violation of any State statute or regulation. Consultant warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement.

9.3 Covenant against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any impermissible classification including, but not limited to, race, color, creed, religion, sex, marital status, sexual orientation, national origin, or ancestry in the performance of this Agreement. Consultant shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, sexual orientation, national origin, or ancestry.

10.0 MISCELLANEOUS PROVISIONS

10.1 Notice. Any notice, demand, request, consent, approval, or communication either party desires or is required to give the other party or any other person shall be in writing and either served personally or sent by prepaid, first-class mail to the address set forth below. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be

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deemed communicated forty-eight (48) hours from the time of mailing if mailed as provided in this Section.

To City: To Consultant: CITY OF LA QUINTA BENGAL ENGINEERING, INC. Attention: Frank Spevacek, Attention: Scott Onishuk, P.E. City Manager Principal In Charge 78-495 Calle Tampico 250 Big Sur Drive La Quinta, California 92253 Goleta, CA 93117

10.2 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply.

10.3 Section Headings and Subheadings. The section headings and subheadings contained in this Agreement are included for convenience only and shall not limit or otherwise affect the terms of this Agreement.

10.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument

10.5 Integrated Agreement. This Agreement including the exhibits hereto is the entire, complete, and exclusive expression of the understanding of the parties. It is understood that there are no oral agreements between the parties hereto affecting this Agreement and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements, and understandings, if any, between the parties, and none shall be used to interpret this Agreement.

10.6 Amendment. No amendment to or modification of this Agreement shall be valid unless made in writing and approved by Consultant and by the City Council of City. The parties agree that this requirement for written modifications cannot be waived and that any attempted waiver shall be void.

10.7 Severability. In the event that any one or more of the articles, phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable, such invalidity or unenforceability shall not affect any of the remaining articles, phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder unless the invalid provision is so material that its invalidity deprives either party of the basic benefit of their bargain or renders this Agreement meaningless.

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10.8 Unfair Business Practices Claims. In entering into this Agreement, Consultant offers and agrees to assign to City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. § 15) or under the Cartwright Act (Chapter 2, (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, services, or materials related to this Agreement. This assignment shall be made and become effective at the time City renders final payment to Consultant without further acknowledgment of the parties.

10.9 No Third Party Beneficiaries. With the exception of the specific provisions set forth in this Agreement, there are no intended third-party beneficiaries under this Agreement and no such other third parties shall have any rights or obligations hereunder.

10.10 Authority. The persons executing this Agreement on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) that entering into this Agreement does not violate any provision of any other Agreement to which said party is bound. This Agreement shall be binding upon the heirs, executors, administrators, successors, and assigns of the parties.

[SIGNATURES ON FOLLOWING PAGE]

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Exhibit A Scope of Services

The Consultant’s Scope of Work, dated May 5, 2015, is attached and made a part herewith.

Last revised April 2015 EXHIBIT A Page 1 of 1 56 Exhibit A SCOPE OF SERVICES May 5, 2015 The following is the proposed scope to assume responsibility of the north Dune Palms Road widening plans. Task 1: Project Management. The Consultant will manage the project by tracking the schedule, budget, QA/QC and value of the products produced.

Our Project Management approach is highlighted by an aggressive strategy to identify and pursue those critical, long lead time issues that need to be initiated early in the project development process.

Work will include:  Coordination with stakeholders such as the City, Coachella Valley Water District, Private and Public Utilities, etc.  Budget preparation for each task and milestone tracking for the project  Project schedule planning including milestones, project activities and deliverables  Monthly progress reports accompanied by an invoice  Lead monthly project status meeting  Monitoring critical path items in a proactive manner  Monitor long lead items such as CVWD coordination, Utility Relocations, RW acquisition and City review process

In addition to the PDT meetings with the project team, we will work hand-in-hand with our Environmental Lead and City Staff, as needed to provide and exchange technical data and environmental input. This proactive relationship will be essential to the success of the project.

Task 2: Topographic Base Mapping. Consultant will utilize the existing topographic base map from the prior prepared plans and southern bridge project base files. Due to changes in the project typical section, Consultant will collect field data along the proposed saw cut line of the widening section of the corridor.

Task 3: Utility Coordination Consultant will review existing utility data provided in the existing prior prepared plan set, including the pothole log. Consultant will verify utility locations with each utility company in addition to working with each utility who has facilities in conflict with the proposed street improvements.

Utility Verification Letter, Conflict Identification and Relocation Letters. Consultant will write Utility Verification letters requesting final verification to clearly identify conflicts with the proposed design. In addition, Consultant will prepare final letters and exhibits denoting required relocations and the requested timing of each relocation.

Utility Coordination Documentation. All utility information including project contacts, correspondence dates, meeting minutes and other coordination will be maintained in a three ring binder. The first sheet on the inside cover will contain a matrix of each utility company, contact

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name, and dates of milestone coordination efforts. A copy of the final utility coordination binder will be provided to the City at the project bidding phase of the project.

Task 4: Legal Descriptions and Exhibits Consultant shall prepare up to two (2) Legal Description and Exhibits for one temporary construction easements and one right of way acquisition. Additionally, due to the extension of the acquisitions for the mobile home park site, Consultant will have additional effort on the street easement and TCE legal and exhibits. The temporary construction easements will encompass an area as needed to provide the contractor the sufficient room to perform the anticipated construction activities for the widening project. Consultant shall also fill out the City provided Grant Easement documentation for the City’s use during the acquisition process.

Task 5: Final Right of Way Services As a result of the proposed improvements and the associated construction activities, it is assumed that various interests, including fee simple and/or temporary easements, will be needed from two (2) parcels.

APN OWNER USE LOT SIZE Mobile Home Park with 600-030-010 Chin Family Prop Ltd Partnership 11.29 Ac. SFR. 600-030-019 Church Church 1.82 Ac.

Impacts to the mobile home park at the northeast corner of the existing bridge may prove complicated. The current proposed typical section along with the existing structure encroachments into the existing street right of way, will cause the relocation of up to five (5) mobile homes along with the acquisition of additional street right of way along the full frontage of the mobile home site for the proposed improvement project. Separate appraisal reports will be completed for each structure, as well as for the impacted parcel. A separate acquisition case will be opened for the owners of the impacted mobile home coaches. As such, occupants of the structures will necessarily require displacement and relocation assistance, which Consultant will manage and facilitate. Because of the relative complexity of the impacts to this parcel, careful management of multiple appraisal activities, and close communication with several interested parties, will be of utmost importance.

Additionally, the Consultant will acquire the necessary interests, both street right of way easement and TCE, from the church parcel north of the mobile home park site (APN 600-030-019).

Since the acquisition for this project will occur in the same general timeframe as the bridge project, acquisition services will begin following the approval of the NEPA document of the Federal bridge project. Consultant will implement and manage a comprehensive ROW program to cover all aspects involved in the public acquisition process. In general, this process usually includes project management, fee appraisal, appraisal review, F&E appraisal, title and escrow, environmental, property acquisition, relocation assistance, utility coordination, site clearance and right of way certification. Consultant has the properly licensed, experienced, local resources to provide precise

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staffing levels exactly when needed, and the expertise necessary to secure the remaining ROW for the project.

Consultant will develop and implement a formal ROW program in compliance with the applicable City and state policies and procedures. For this project specifically, it is understood that local funding will be used for the acquisition. Consultant will provide overall ROW program management, leadership, and direction of all phases of the right of way process, policies, and scheduling.

Right of Way Project Management and Document Support 1. Track and manage all budgetary-related aspects of Consultant’s Scope of Work. 2. Assist with the development of administrative policies, procedures, and forms necessary to carry out the initial program. 3. Maintain ongoing general consultation and project coordination with the client, City, and any other project team members as necessary. 4. Provide representation of the client at public meetings, hearings, and litigation related matters. 5. Prepare and present a monthly written status report based on the agreed-upon guidelines regarding information to be provided. Confer weekly with client verbally on general statuses, problem areas, and progress. 6. Participate in up to 4 Project Development Team Meetings to report on acquisition progress. 7. Manage subcontractor and all necessary disciplines needed for the project. 8. Provide quality assurance and quality control for the right of way program and all right of way components.

Title Investigation Services – One (1) Preliminary Title Report 1. Secure vesting deeds, back up documents, property profiles, and tax maps for each property. 2. Secure preliminary title report which will remain valid for a minimum of 6 months or until there is an ownership change. 3. Secure copies of recorded back-up documents, as needed. 4. Share title information with right of way engineer, surveyor, and appraisers for their use. 5. Prepare list of title exceptions to be cleared; confirm manner of disposition is consistent with approved project plan. 6. Facilitate changes to preliminary title report after the preparation of the legal description, if necessary for partial acquisition.

Appraisal Services: Up to six (6) Appraisal Reports (1 parcel, & 5 mobile homes) 1. Consultant will mail a notification letter and acquisition policies brochure to the property owner requesting permission to conduct an on-site inspection of the property, advising them of their right to accompany the appraiser at the time of the inspection, and requesting information regarding the property appraised which could influence the appraised value. 2. Appraiser will review title information pertaining to respective ownership and will review drawings and other pertinent information relative to the parcel. 3. Appraiser will inspect the property personally with the owner (if possible) and document the inspection with photographs for use in the report. 4. Appraiser will perform market research to support the selected appraisal methodologies and will document and confirm comparable sales information.

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5. Appraiser will prepare a narrative appraisal report that conforms to the Uniform Standards of Professional Appraisal Practice (USPAP). The appraisal study and report are intended to serve as an acquisition appraisal and will be prepared in a summary format consistent with the specifications for narrative appraisal reports. 6. Consultant will receive and analyze the completed appraisal report accordingly.

Negotiate Right of Way Settlement/Prepare Acquisition Documents: (6) Owners (2 parcels & 5 mobile home owner) 1. Establish and maintain a complete and current record file in a form acceptable to the client. 2. Receive and analyze title information, approved appraisal report, and legal description in sufficient detail to negotiate with the property owner and other parties. 3. Prepare offer letter, summary statement, and list of compensable items of fixtures and equipment, in accordance with state or federal regulations and the approval of the client. 4. Present written purchase offer to owner or their representative in person, when possible. Secure receipt of delivery of offer as practical and present and secure tenant information statements, as applicable. 5. Follow-up and negotiate with property owner, as necessary; prepare and submit recommended settlement justification to client for review and approval; review any independent appraisal secured by property owner; and coordinate reimbursement of appraisal fees (up to $5,000) with client. Ongoing negotiations and settlement discussions will continue after the initial offer or until we reach settlement or impasse, as dictated by the overall Project Schedule. 6. Prepare and assemble acquisition contracts, deeds, and related acquisition documents required for the acquisition of all necessary property interests. 7. Maintain a diary report of all contacts made with property owner or representative and a summary of the status of negotiations indicating attitude of owner, problem areas, and other pertinent information. Copies of all applicable written correspondence will be maintained in files. 8. Prepare an impasse letter where, after diligent attempts to settle by negotiation, it appears eminent domain will be needed or prudent to acquire the needed interest. 9. Litigation support: in the event an acquisition is unable to be settled via voluntary means, the negotiations staff will provide a condemnation-ready case file, all relevant negotiations history, and meet with client as needed to provide relevant acquisition content. 10. Transmit executed acquisition documents to client. Each transmittal package shall include a fully executed and properly notarized deed(s), fully executed acquisition contract with attachments, and a brief settlement memorandum which summarizes the pertinent data relative to the transaction.

Escrow Coordination If by Negotiated Settlement: Assist the escrow/title company in the following: 1. Open escrow and coordinate execution of closing instructions providing for title insurance coverage at the settlement amount. 2. Provide escrow officer with fully executed acquisition contract and notarized deed. 3. Work in conjunction with escrow officer to facilitate the clearance of title matters as set forth in the settlement memorandum and escrow instructions.

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4. Assist escrow to secure full or partial reconveyance or subordination instruments from lien holders of record. 5. Review settlement statement for accuracy. 6. Coordinate deposit of acquisition price and estimated closing costs with escrow. 7. After the closing, review the title insurance policy for accuracy. 8. Prepare and mail a letter to County Assessor requesting cancellation of taxes if appropriate.

Eminent Domain Assistance (if necessary) If Settlement by Eminent Domain: Assist eminent domain counsel with the following: 1. Prepare a letter for the client signature to eminent domain counsel, requesting proceeding to condemnation. 2. Provide eminent domain counsel with available right of way maps and legal descriptions, preliminary title reports and title review documents, and information on how to contact each owner or interest holder. 3. Provide eminent domain counsel with a duplicate copy of the parcel file, together with a copy of the appraisal, offer to purchase, correspondence, acquisition contract, and deed as presented. 4. Convert preliminary title reports to litigation guarantees for eminent domain counsel’s use. Title company fees (based on the value of the interest required) are additional.

Relocation Plan Preparation Services 1. Interview all potentially affected occupants to determine relocation needs. The interviewer will query household information such as: the number, ages and gender of all occupants, income of the household, distance to employment and utilized neighborhood services, special needs of the household, etc. 2. Research the marketplace for available replacement locations and/or establish rent schedules for compiling project costs. 3. Compile statistics on available housing replacement sites. 4. Calculate potential project costs with regard to relocation assistance. 5. Present draft relocation plan to client. 6. Distribute plan to project participants and make it available for public review. 7. Make any needed revisions brought up during the 30-day public review period. 8. Participate in adoption presentation meeting.

Relocation Assistance Program Implementation Services (5 residential relocations) 1. Secure basic case information and set up case file; maintain the necessary case documentation and contact diary throughout the course of our involvement with the claimant. 2. Conduct initial in-depth field interview with claimant: document rents, income, family size, names/ages of occupants, and determine relocation needs, preferences and special requirements; provide general information notices and brochure; explain relocation process, rights and benefits available. 3. Provide on-going advisory assistance to minimize hardships on claimants, including referrals to and coordination with community service resources, public housing, and other public services as needed. 4. Document rent with rental agreement, receipts or economic rent if needed.

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5. Document/verify income using pay stubs, budget worksheets, tax returns, certification and/or cash affidavit as necessary. Use rent-to-rent method if income cannot be verified. 6. Create rent schedule for project as appropriate and if authorized by client. 7. Search for and document comparable sites for each claimant, provide initial referrals and three sets of additional housing referrals every 4-6 weeks, as necessary. 8. Prepare letter of eligibility based on most appropriate comparable or rent schedule and seek authorization of client. 9. Deliver letter of eligibility to claimant and discuss findings and impacts to occupants’ particular needs. Amend the letter of eligibility one additional time if the economics of the comparable’s availability changes over the course of our assignment. 10. Prepare and deliver 90-day notices to vacate no later than 12 weeks after general information notices have been delivered. 11. Arrange for transportation to view replacement sites if needed. Assist Claimants with their selection of a replacement site, with lease offers, with review of rental agreements and with move bids or fixed moving payment. 12. Inspect selected site to ensure it meets decent, safe, and sanitary requirements. 13. Monitor the replacement site escrow and explain the relocation process to agent and escrow officer as necessary. 14. Verify vacation of the displacement site and secure a certificate of abandonment. 15. Determine eligibility for proposed amount of relocation benefits, including actual and reasonable moving payments, rental/purchase differential payments and fixed payments as applicable. 16. For residential moves, secure and process an advance claim to assist with the move and a second final claim incorporating the moving costs and rental/purchase differential payment once family has moved to selected displacement site. 17. Each claim will be signed by the claimant, supported by appropriate back-up (schedules, receipts, etc.) and will be reviewed by Consultant’s project manager for recommendation before submitting to client for approval. Each claim check will be delivered to claimant in person (as feasible) and a receipt of payment will be secured.

Task 6: Roadway Improvement Plans Consultant will modify the existing 90% improvement plans to accommodate revised street typical section and other noted changes. The improvement plans will include modifying the project title sheet, typical cross sections, construction details, removal and utility relocation plan, horizontal alignment layout plans, vertical profile, signing and striping grading, and cross sections of the proposed roadway improvements and submit to the City for review and comment. The revised improvement plans will also include the addition of a raised median curb. The roadway will be designed in accordance with AASHTO’s “A Policy on Geometric Design of Highway and Streets”, AASHTO “Guide for the Development of Bicycle Facilities”, the “Greenbook” Standard Specifications as well as the City of La Quinta Standards Plans. Consultant will prepare final roadway plans in conformance with the approved preliminary alignment plans and submit to the City for review at 90%, 95% and 100% completion. Mylar plan sheets will be submitted after the approval of the 100% plan submittal package.

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Task 7: Bid Package and Specifications Technical specifications shall be prepared for construction of each item of work in the Project. In addition, Consultant will fill out the bid schedule, matching the item number with their corresponding specification and line item in the Engineer’s Estimate. Prior to the publication of the final package, Consultant will review the document. Specifications will be provided starting with the 90% plan submittal.

Consultant will prepare the following items for the Bid Document: Project Description including all major work items, working days, liquidated damages based on Caltrans Specifications, contractor submittals prior to mobilization, special traffic control requirements or coordination, all of section 4000, and bid schedule.

Task 8: Construction Cost Estimate Starting with the 90% Package Submittal, Consultant shall prepare a Final Quantity and Cost Estimate. The estimate will be submitted with both the 100% and Mylar plan check reviews.

Task 9: Services During Bidding Consultant will assist the City with the bidding and award process for this project. These services will be performed on a Time-and-Material basis. Consultant assumes up to 8 hours. The following items may be provided upon request by City staff:

 Bid Support. All key team members will be available to attend a pre-bid meeting.  Respond to Inquiries. Consultant will respond to bidder inquiries by phone or email.  Prepare Addenda. Consultant will prepare addenda as requested by the City.  Review/Recommended Award. Consultant will assist in recommendation for award.

Task 10: Construction Support Services Consultant will assist project staff with construction support services. A budget amount has been prepared, though this may require adjustment based upon the City’s determination of the level of consultant involvement needed during construction. These services will be performed on a Time- and-Material basis. Consultant assumes up to 16 hours. Upon request from City staff the following will be provided by the Consultant:

 RFI documentation and response to questions regarding construction documents  Periodic site visits during construction, as requested.  Input from the consultant regarding change orders.  Prepare Record Plans.

Task 11: IS/MND Addendum - Updated CEQA Environmental Clearance (OPTIONAL TASK) Consultant will prepare an Addendum to the adopted Initial Study/MND dated April of 2010. For a project, the lead agency can prepare the addendum if there are minor changes in the project scope/description/background information, and the environmental evaluation of the project impacts. The City would adopt the addendum and consider it a part of the original IS/MND in making decisions regarding the project.

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Several changes has occurred in the project information since the adoption of the IS/MND in April 2010. The addendum will update the project information, address the changes, and provide additional information and documentation in support of the decision to adopt the MND. The following are the required changes to the adopted IS/MND:

 Project Funding Source;  CIP Funding Schedule;  Anticipated Traffic Conditions;  Right of way requirements addressed in 1969 agreement with Dune Palms Mobile Estates and the City;  Update information in support of the response to comment letter received during the public comment period of the IS/MND of potential environmental impacts;  Revise Dune Palms widening limits; and  Update information regarding the require permits.

Consultant will prepare a preliminary Draft Addendum to the adopted IS/MND and provide to the City for review and comments. Following the receipt of the City comments, Consultant shall make the necessary revisions and prepare the final Draft Addendum for the City to review and if found acceptable, the City will notice and circulate the document for review. At the close of the public review period for the Draft Addendum, Consultant will meet with City staff to review any received comments on the Draft Addendum and to discuss potential responses to these comments. Then, Consultant would formulate responses to the comments and submit the response document to the City for review and comment. The City’s comments will be incorporated into the Response to Comments document, which will be submitted to City as an appendix to the Final Addendum. Consultant will prepare both a preliminary and Final Addendum for City review and adoption.

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Exhibit B Schedule of Compensation

With the exception of compensation for Additional Services, provided for in Section 2.3 of this Agreement, the maximum total compensation to be paid to Consultant under this Agreement is One Hundred Twenty Three Thousand, Nine Hundred Dollars ($123,900.00) (“Contract Sum”). The Contract Sum shall be paid to Consultant in installment payments made on a monthly basis and in an amount identified in Consultant’s schedule of compensation attached hereto for the work tasks performed and properly invoiced by Consultant in conformance with Section 2.2 of this Agreement.

Last revised April 2015 EXHIBIT B Page 1 of 1 65 Exhibit B FEE May 5, 2015 PROPOSED FEE The following is the proposed Fee to revise and complete the Construction Documents for the North Dune Palms Road Widening plans from the northern project limits of the Dune Palms Road Bridge project to the intersection of Blackhawk Way / Westward Ho Drive.

Task Fee 1 - Project Management, Coordination and QA/QC $12,900 2 - Additional topo survey $2,300 3 - Utility Coordination $5,200 4 - Legal and Exhibits $3,400 5 - Right of Way Acquisition $74,100 6 - Modify Improvement Plans $14,800 7 - Bid Package and Specifications $2,600 8 - Cost Estimate $1,800 9 - Services During Bidding $1,200 10 - Construction Support Services $2,400 Total $120,700 Reimbursable $3,200 Optional Task 11 - Update CEQA Environmental Clearance $13,800

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Exhibit C Schedule of Performance

Consultant shall complete all services identified in the Scope of Services, Exhibit A of this Agreement, in accordance with the Project Schedule, attached hereto and incorporated herein by this reference.

Last revised April 2015 EXHIBIT C Page 1 of 1 67

68 EXHIBIT C - SCHEDULE DUNE PALMS NORTH WIDENING DRAFT SCHEDULE

ID Task Name Duration Start Finish 2016 2017 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 1 Dune Palms North Widening Project

2 Environmental Clearance (Per Terra Nova 51 days Wed 5/20/15 Wed 7/29/15 Environmental Clearance (Per Terra Nova Milestones) Milestones) 3 Notice to Proceed 0 days Wed 5/20/15 Wed 5/20/15 5/20

4 Prepare IS 24 days Wed 5/20/15 Mon 6/22/15 Prepare IS

5 City and Consultant Staff Review of IS 3 days Tue 6/23/15 Thu 6/25/15 City and Consultant Staff Review of IS

6 Revise IS 2 days Fri 6/26/15 Mon 6/29/15 Revise IS

7 Release of IS and Comment Period 16 days Tue 6/30/15 Tue 7/21/15 Release of IS and Comment Period

8 Response to Comments 5 days Wed 7/22/15 Tue 7/28/15 Response to Comments

9 IS Approval 0 days Wed 7/29/15 Wed 7/29/15 IS Approval

10 Right of Way Acquisition 375 days Mon 7/6/15 Fri 12/9/16 Right of Way Acquisition

11 NEPA Approval on HBP Project 0 days Mon 8/24/15 Mon 8/24/15 NEPA Approval on HBP Project

12 Appraise R/W 75 days Mon 7/6/15 Fri 10/16/15 Appraise R/W

13 Review Appraisals 30 days Mon 10/19/15 Fri 11/27/15 Review Appraisals

14 R/W Acquisitions Offers and Negotiations 150 days Mon 11/30/15 Fri 6/24/16 R/W Acquisitions Offers and Negotiations

15 Relocation Assistance 120 days Mon 6/27/16 Fri 12/9/16 Relocation Assistance

16 Bridge R/W Completion 0 days Wed 2/1/17 Wed 2/1/17 Bridge R/W Completion

17 Final Design 85 days Wed 11/4/15 Tue 3/1/16 Final Design

18 Submittal of 65% Bridge Plans 0 days Wed 11/4/15 Wed 11/4/15 Submittal of 65% Bridge Plans

19 Revise 90% Plans 40 days Wed 11/4/15 Tue 12/29/15 Revise 90% Plans

20 City Plan Review 5 days Wed 12/30/15 Tue 1/5/16 City Plan Review

21 Prepare 95% PS&E 25 days Wed 1/6/16 Tue 2/9/16 Prepare 95% PS&E

22 City 95% PS&E Review 5 days Wed 2/10/16 Tue 2/16/16 City 95% PS&E Review

23 Prepare 100% PS&E Package 10 days Wed 2/17/16 Tue 3/1/16 Prepare 100% PS&E Package

24 Approval of 100% Bridge Plans 0 days Mon 7/18/16 Mon 7/18/16 Approval of 100% Bridge Plans 7/18

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Exhibit D Special Requirements

None.

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Exhibit E Insurance Requirements

E.1 Insurance. Prior to the beginning of and throughout the duration of this Agreement, the following policies shall be maintained and kept in full force and effect providing insurance with minimum limits as indicated below and issued by insurers with A.M. Best ratings of no less than A-:VI:

Commercial General Liability (at least as broad as ISO CG 0001) $1,000,000 (per occurrence) $2,000,000 (general aggregate)

Commercial Auto Liability (at least as broad as ISO CA 0001) $1,000,000 (per accident)

Errors and Omissions Liability $1,000,000 (per claim and aggregate)

Workers’ Compensation (per statutory requirements)

Consultant shall procure and maintain, at its cost, and submit concurrently with its execution of this Agreement, Commercial General Liability insurance against all claims for injuries against persons or damages to property resulting from Consultant's acts or omissions rising out of or related to Consultant's performance under this Agreement. The insurance policy shall contain a severability of interest clause providing that the coverage shall be primary for losses arising out of Consultant's performance hereunder and neither City nor its insurers shall be required to contribute to any such loss. A certificate evidencing the foregoing and naming City and its officers and employees as additional insured (on the Commercial General Liability policy only) shall be delivered to and approved by City prior to commencement of the services hereunder.

Consultant shall carry automobile liability insurance of $1,000,000 per accident against all claims for injuries against persons or damages to property arising out of the use of any automobile by Consultant, its officers, any person directly or indirectly employed by Consultant, any subcontractor or agent, or anyone for whose acts any of them may be liable, arising directly or indirectly out of or related to Consultant's performance under this Agreement. If Consultant or Consultant’s employees will use personal autos in any way on this project, Consultant shall provide evidence of personal auto liability coverage for each such person. The term “automobile” includes, but is not limited to, a land motor vehicle, trailer or semi-trailer designed for travel on public roads. The automobile insurance policy shall contain a severability of interest clause providing that coverage shall be

Last revised April 2015 EXHIBIT E Page 1 of 6 73 primary for losses arising out of Consultant's performance hereunder and neither City nor its insurers shall be required to contribute to such loss.

Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the consultant and “Covered Professional Services” as designated in the policy must specifically include work performed under this agreement. The policy limit shall be no less than $1,000,000 per claim and in the aggregate. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer’s duty to defend. The policy retroactive date shall be on or before the effective date of this agreement.

Consultant shall carry Workers' Compensation Insurance in accordance with State Worker's Compensation laws with employer’s liability limits no less than $1,000,000 per accident or disease.

Consultant shall provide written notice to City within ten (10) working days if: (1) any of the required insurance policies is terminated; (2) the limits of any of the required polices are reduced; or (3) the deductible or self-insured retention is increased. In the event any of said policies of insurance are cancelled, Consultant shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Exhibit to the Contract Officer. The procuring of such insurance or the delivery of policies or certificates evidencing the same shall not be construed as a limitation of Consultant’s obligation to indemnify City, its officers, employees, contractors, subcontractors, or agents.

E.2 Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option:

a. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under this Agreement.

b. Order Consultant to stop work under this Agreement and/or withhold any payment(s) which become due to Consultant hereunder until Consultant demonstrates compliance with the requirements hereof.

c. Terminate this Agreement.

Exercise of any of the above remedies, however, is an alternative to any other remedies City may have. The above remedies are not the exclusive remedies for Consultant's failure to maintain or secure appropriate policies or endorsements. Nothing herein contained shall be construed as limiting in any way the extent to which Consultant may be held responsible for payments of damages to persons or

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property resulting from Consultant's or its subcontractors' performance of work under this Agreement.

E.3 General Conditions Pertaining to Provisions of Insurance Coverage by Consultant. Consultant and City agree to the following with respect to insurance provided by Consultant:

1. Consultant agrees to have its insurer endorse the third party general liability coverage required herein to include as additional insureds City, its officials, employees, and agents, using standard ISO endorsement No. CG 2010 with an edition prior to 1992. Consultant also agrees to require all contractors, and subcontractors to do likewise.

2. No liability insurance coverage provided to comply with this Agreement shall prohibit Consultant, or Consultant’s employees, or agents, from waiving the right of subrogation prior to a loss. Consultant agrees to waive subrogation rights against City regardless of the applicability of any insurance proceeds, and to require all contractors and subcontractors to do likewise.

3. All insurance coverage and limits provided by Consultant and available or applicable to this Agreement are intended to apply to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to City or its operations limits the application of such insurance coverage.

4. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing.

5. No liability policy shall contain any provision or definition that would serve to eliminate so-called “third party action over” claims, including any exclusion for bodily injury to an employee of the insured or of any contractor or subcontractor.

6. All coverage types and limits required are subject to approval, modification and additional requirements by the City, as the need arises. Consultant shall not make any reductions in scope of coverage (e.g. elimination of contractual liability or reduction of discovery period) that may affect City’s protection without City’s prior written consent.

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canceled at any time and no replacement coverage is provided, City has the right, but not the duty, to obtain any insurance it deems necessary to protect its interests under this or any other agreement and to pay the premium. Any premium so paid by City shall be charged to and promptly paid by Consultant or deducted from sums due Consultant, at City option.

8. It is acknowledged by the parties of this agreement that all insurance coverage required to be provided by Consultant or any subcontractor, is intended to apply first and on a primary, non-contributing basis in relation to any other insurance or self-insurance available to City.

9. Consultant agrees to ensure that subcontractors, and any other party involved with the project that is brought onto or involved in the project by Consultant, provide the same minimum insurance coverage required of Consultant. Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Consultant agrees that upon request, all agreements with subcontractors and others engaged in the project will be submitted to City for review.

10. Consultant agrees not to self-insure or to use any self-insured retentions or deductibles on any portion of the insurance required herein (with the exception of professional liability coverage, if required) and further agrees that it will not allow any contractor, subcontractor, Architect, Engineer or other entity or person in any way involved in the performance of work on the project contemplated by this agreement to self-insure its obligations to City. If Consultant’s existing coverage includes a deductible or self-insured retention, the deductible or self-insured retention must be declared to the City. At that time the City shall review options with the Consultant, which may include reduction or elimination of the deductible or self-insured retention, substitution of other coverage, or other solutions.

11. The City reserves the right at any time during the term of this Agreement to change the amounts and types of insurance required by giving the Consultant ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the Consultant, the City will negotiate additional compensation proportional to the increased benefit to City.

12. For purposes of applying insurance coverage only, this Agreement will be deemed to have been executed immediately upon any party hereto taking any steps that can be deemed to be in furtherance of or towards performance of this Agreement.

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13. Consultant acknowledges and agrees that any actual or alleged failure on the part of City to inform Consultant of non-compliance with any insurance requirement in no way imposes any additional obligations on City nor does it waive any rights hereunder in this or any other regard.

14. Consultant will renew the required coverage annually as long as City, or its employees or agents face an exposure from operations of any type pursuant to this agreement. This obligation applies whether or not the agreement is canceled or terminated for any reason. Termination of this obligation is not effective until City executes a written statement to that effect.

15. Consultant shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. A coverage binder or letter from Consultant’s insurance agent to this effect is acceptable. A certificate of insurance and/or additional insured endorsement as required in these specifications applicable to the renewing or new coverage must be provided to City within five (5) days of the expiration of coverages.

16. The provisions of any workers’ compensation or similar act will not limit the obligations of Consultant under this agreement. Consultant expressly agrees not to use any statutory immunity defenses under such laws with respect to City, its employees, officials, and agents.

17. Requirements of specific coverage features or limits contained in this section are not intended as limitations on coverage, limits or other requirements nor as a waiver of any coverage normally provided by any given policy. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue, and is not intended by any party or insured to be limiting or all-inclusive.

18. These insurance requirements are intended to be separate and distinct from any other provision in this Agreement and are intended by the parties here to be interpreted as such.

19. The requirements in this Exhibit supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impairs the provisions of this Exhibit.

Last revised April 2015 EXHIBIT E Page 5 of 6 77 the intent of City to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against City for payment of premiums or other amounts with respect thereto.

21. Consultant agrees to provide immediate notice to City of any claim or loss against Consultant arising out of the work performed under this agreement. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City.

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Exhibit F Indemnification

F.1 General Indemnification Provision.

a. Indemnification for Professional Liability. When the law establishes a professional standard of care for Consultant’s Services, to the fullest extent permitted by law, Consultant shall indemnify, protect, defend (with counsel selected by City), and hold harmless City and any and all of its officials, employees, and agents (“Indemnified Parties”) from and against any and all claims, losses, liabilities of every kind, nature, and description, damages, injury (including, without limitation, injury to or death of an employee of Consultant or of any subcontractor), costs and expenses of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys’ fees, litigation expenses, and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation, to the extent same are cause in whole or in part by any negligent or wrongful act, error or omission of Consultant, its officers, agents, employees or subcontractors (or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of professional services under this agreement. With respect to the design of public improvements, the Consultant shall not be liable for any injuries or property damage resulting from the reuse of the design at a location other than that specified in Exhibit A without the written consent of the Consultant.

b. Indemnification for Other Than Professional Liability. Other than in the performance of professional services and to the full extent permitted by law, Consultant shall indemnify, defend (with counsel selected by City), and hold harmless the Indemnified Parties from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys’ fees, litigation expenses, and fees of expert consultants or expert witnesses) incurred in connection therewith and costs of investigation, where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this Agreement by Consultant or by any individual or entity for which Consultant is legally liable, including but not limited to officers, agents, employees, or subcontractors of Consultant.

F.2 Standard Indemnification Provisions. Consultant agrees to obtain executed indemnity agreements with provisions identical to those set forth herein this section from each and every subcontractor or any other person or entity involved by, for, with or on behalf of Consultant in the performance of this

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Agreement. In the event Consultant fails to obtain such indemnity obligations from others as required herein, Consultant agrees to be fully responsible according to the terms of this Exhibit. Failure of City to monitor compliance with these requirements imposes no additional obligations on City and will in no way act as a waiver of any rights hereunder. This obligation to indemnify and defend City as set forth herein is binding on the successors, assigns or heirs of Consultant and shall survive the termination of this agreement or this section.

a. Indemnity Provisions for Contracts Related to Construction. Without affecting the rights of City under any provision of this agreement, Consultant shall not be required to indemnify and hold harmless City for liability attributable to the active negligence of City, provided such active negligence is determined by agreement between the parties or by the findings of a court of competent jurisdiction. In instances where City is shown to have been actively negligent and where City’s active negligence accounts for only a percentage of the liability involved, the obligation of Consultant will be for that entire portion or percentage of liability not attributable to the active negligence of City.

b. Indemnification Provision for Design Professionals.

1. Applicability of Section F.2(b). Notwithstanding Section F.2(a) hereinabove, the following indemnification provision shall apply to Consultants who constitute “design professionals” as the term is defined in paragraph 3 below.

2. Scope of Indemnification. To the fullest extent permitted by law, Consultant shall indemnify, defend (with counsel selected by City), and hold harmless the Indemnified Parties from and against any and all claims, losses, liabilities of every kind, nature and description, damages, injury (including, without limitation, injury to or death of an employee of Consultant or of any subcontractor), costs and expenses of any kind, whether actual, alleged or threatened, including, without limitation, court costs, attorneys’ fees, litigation expenses, and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation, that arise out of, pertain to, or relate to, directly or indirectly, in whole or in part, the negligence, recklessness, or willful misconduct of Consultant, any subcontractor, anyone directly or indirectly employed by them or anyone that they control.

3. Design Professional Defined. As used in this Section F.2(b), the term “design professional” shall be limited to licensed architects, registered professional engineers, licensed professional land surveyors and landscape architects, all as defined under current law, and as may be amended from time to time by Civil Code § 2782.8.

Last revised April 2015 EXHIBIT F Page 2 of 2 80 ATTACHMENT 2

APPROXIMATE LIMITS OF PROPOSED LIMITS OF BRIDGE IMPROVEMENTS ROADWAY WIDENING PROPOSED LOCATION OF REGIONAL SKATE PARK

Recommended for Approval By:______Caltrans District 8 Project Manager Date

Approval By:______Caltrans District 8 Principal Architectural Historian (PQS) Date

CITY / SA / HA / FA MEETING DATE: June 2, 2015 AGENDA CATEGORY:

BUSINESS SESSION: ITEM TITLE: APPROVE SPECIFICATIONS AND

ENGINEER’S ESTIMATE AND ADVERTISE FOR BIDS CONSENT CALENDAR: THE FISCAL YEAR 2015/2016 SLURRY SEAL PROGRAM STUDY SESSION:

PUBLIC HEARING:

RECOMMENDED ACTION:

Approve the specifications and engineer’s estimate and authorize staff to advertise for bids the Fiscal Year 2015/2016 Slurry Seal Program under the Pavement Management Plan Street Improvements.

EXECUTIVE SUMMARY:

 As part of the five-year Pavement Management Program (PMP), the City routinely re-conditions streets with an oil and sand mixture (slurry seal) to extend the life of the pavement.

 The specifications and estimate for the Fiscal Year 2015/2016 Slurry Seal Program are complete and available for review in the Public Works Department.

 Since the PMP is designed to maximize the service life of the City’s street system and the designated streets have been identified in the PMP for this year’s slurry seal treatment, staff recommends approving this project for advertisement for construction bids.

FISCAL IMPACT:

The PMP is included within the 2015/2016 Capital Improvement Program (CIP) and is budgeted to receive $1,000,000 from the City’s General Fund. The PMP expenditure is necessary in order to meet the City’s Maintenance of Effort of $937,007 annually from the General Fund, which allows the City to receive its share of Measure A half-cent

83 sales tax proceeds. Based on the engineer’s estimate, the project construction will cost approximately $880,000. The remaining funds will be used to cover soft costs; including design, inspection, City administration, and contingency.

BACKGROUND/ANALYSIS:

The five-year Pavement Management Update Report, last updated in August 2012, provides an inventory of City roadways including current conditions, roadway preservation needs, and a roadway improvement funding schedule. During Fiscal Year 2015/2016, the PMP identified slurry and crack sealing of certain streets in north La Quinta (Attachment 1).

Contingent upon City Council’s approval, the following is the project schedule:

City Council Bid Authorization June 2, 2015 Advertise Project for Bids June 3 through July 2, 2015 Council Considers Project Award July 7, 2015 Execute Contract and Mobilize July 8 through July 29, 2015 Construction (40 working days) August through September 2015 Accept Improvements October 2015

ALTERNATIVES:

Since the PMP has designated certain streets for slurry seal and the work can best be done during summer months when there is less disruption to motorists and residents, no alternative is recommended.

Report prepared by: Ed Wimmer, P.E., Principal Engineer Report approved for submission by: Timothy R. Jonasson, P.E. Public Works Director/City Engineer

Attachment: 1. Slurry Seal Location Map

84 ATTACHMENT 1

AGENDA CATEGORY: CITY / SA / HA / FA MEETING DATE: June 2, 2015 BUSINESS SESSION: ITEM TITLE: APPROVE PROFESSIONAL SERVICES AGREEMENT WITH PSOMAS FOR CONSTRUCTION CONSENT CALENDAR: INSPECTION SERVICES STUDY SESSION:

PUBLIC HEARING:

RECOMMENDED ACTION:

Approve a Professional Services Agreement with PSOMAS, in an amount not to exceed $466,000, to provide construction inspection services.

EXECUTIVE SUMMARY:

 The City relies on consultant inspection services to augment staff when several capital projects are under construction simultaneously, and to supplement staff inspection on private development projects.

 Since 2006, the City has relied on PSOMAS for these services. Their contract will end on June 30, 2015.

 The City solicited and received proposals for consultant inspection services and staff recommends that PSOMAS continue to be retained through the approval of the attached Professional Services Agreement (PSA).

 Under the proposed PSA, the City will pay for consultant inspection services on an as-needed basis and can reduce the inspection hours as necessary should the pace of construction projects decrease.

 The PSA will allow staff to perform their non-inspection related duties without reducing the level of inspection required for public and private development projects.

FISCAL IMPACT:

These inspection services will be billed at $112 per hour (prevailing wage) for a not-to- exceed amount of $466,000. The cost for City capital project inspection services ($233,000) is included in each capital project budget. Private project

87 inspection service costs ($233,000) are budgeted in the Engineering Services Division of the City‘s Fiscal Year 2015/2016 budget.

BACKGROUND/ANALYSIS:

Public Works staff inspects all private development on-site and off-site infrastructure improvements and City capital projects. There are numerous upcoming City construction projects that will require on-going inspection to ensure they are completed on time and on budget such as:

 Washington Street Pavement Rehabilitation  Civic Center Campus Parkway Turf Conversion  Adams Street at Corporate Center Drive Median and Traffic Signal  Library Renovation Projects  Landscaping of City-Owned Lots on Avenue 52  Avenue 52 at Jefferson Street Roundabout Striping Modification  Citywide Advanced Transportation Management System (Coachella Valley Association of Governments)  Citywide Traffic Signal Interconnect (Coachella Valley Association of Governments)  Point Happy Storm Drain Outlet Structure

Given the number of capital projects combined with increased private development activity inspections, staff recommends continuing to augment its inspection staff with private inspectors.

PSOMAS has performed consultant construction inspection for the City since 2006. In the summer of 2014, the City issued a request for proposals for construction inspection services and PSOMAS was unanimously selected by the consultant selection committee. Jim Peters and Gregory Curdes of PSOMAS, who are currently working for the City as consultant construction inspectors, are local and have firsthand knowledge of the City’s operations. The cost of their services is at or below the cost of comparable firms. Given PSOMAS’ positive track record and the need for continuity on public and private construction projects currently underway, staff recommends approval of this PSA with PSOMAS.

ALTERNATIVES:

Due to the continued demand for City construction inspection on private development as well as the City’s capital projects and the superior service provided by PSOMAS, staff does not recommend an alternative action.

Report prepared by: Ed Wimmer, P.E., Principal Engineer Report approved for submission by: Timothy R. Jonasson, P.E. Public Works Director/City Engineer

Attachment: 1. PSA

88 ATTACHMENT 1

PROFESSIONAL SERVICES AGREEMENT

THIS PROFESSIONAL SERVICES AGREEMENT (the “Agreement”) is made and entered into by and between the CITY OF LA QUINTA, (“City”), a California municipal corporation, and PSOMAS (“Consultant”). The parties hereto agree as follows:

1.0 SERVICES OF CONSULTANT

1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide those services related to On Call Construction Inspection Services as specified in the “Scope of Services” attached hereto as Exhibit “A” and incorporated herein by this reference (the “Services”). Consultant represents and warrants that Consultant is a provider of first-class services and Consultant is experienced in performing the Services contemplated herein and, in light of such status and experience, Consultant covenants that it shall follow the highest professional standards in performing the Services required hereunder. For purposes of this Agreement, the phrase “highest professional standards” shall mean those standards of practice recognized by one or more first-class firms performing similar services under similar circumstances.

1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that (a) it has thoroughly investigated and considered the Services to be

Last revised April 2015

1.6 Additional Services. In accordance with the terms and conditions of this Agreement, Consultant shall perform services in addition to those specified in the Scope of Services (“Additional Services”) only when directed to do so by the Contract Officer, provided that Consultant shall not be required to perform any Additional Services without compensation. Consultant shall not perform any Additional Services until receiving prior written authorization from the Contract Officer, incorporating therein any adjustment in (i) the Contract Sum, and/or (ii) the time to perform this Agreement, which said adjustments are subject to the written approval of Consultant. It is expressly understood by Consultant that the provisions of this Section shall not apply to the Services specifically set forth in the Scope of Services or reasonably contemplated therein. It is specifically understood and agreed that oral requests and/or approvals of Additional Services shall be barred and are unenforceable. Failure of Consultant to secure the Contract Officer’s written authorization for Additional Services shall constitute a waiver of any and all right to adjustment of the Contract Sum or time to perform this Agreement, whether by way of compensation, restitution, quantum meruit, or the like, for Additional Services provided without the appropriate authorization from the

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Contract Officer. Compensation for properly authorized Additional Services shall be made in accordance with Section 2.3 of this Agreement.

2.0 COMPENSATION

2.1 Contract Sum. For the Services rendered pursuant to this Agreement, Consultant shall be compensated in accordance with Exhibit “B” (the “Schedule of Compensation”) at a flat rate of $112 per hour prevailing wage for a Construction Inspector, with a not to exceed amount of Four Hundred Sixty-Six Thousand Dollars ($466,000) including base pay, overhead, and fee, and other direct costs to include vehicle, cell phone, digital camera, digital weather monitoring device and digital smart level. The City shall not pay an additional hourly wage for hours worked over 8 per day nor over 40 per week. The above fees are valid for all on- call construction inspection services. PSOMAS Sub-Contract Inspectors Jim Peters and Gregory Curdes will be assigned to the City. The method of compensation set forth in the Schedule of Compensation may include a lump sum payment upon completion, payment in accordance with the percentage of completion of the Services, payment for time and materials based upon Consultant's rate schedule, but not exceeding the Contract Sum, or such other methods as may be specified in the Schedule of Compensation. The Contract Sum shall include the attendance of Consultant at all project meetings reasonably deemed necessary by City; Consultant shall not be entitled to any additional compensation for attending said meetings. Compensation may include reimbursement for actual and necessary expenditures for reproduction costs, transportation expense, telephone expense, and similar costs and expenses when and if specified in the Schedule of Compensation. Regardless of the method of compensation set forth in the Schedule of Compensation, Consultant’s overall compensation shall not exceed the Contract Sum, except as provided in Section 1.6 of this Agreement.

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Services performed in accordance with the terms of this Agreement. Subject to retention pursuant to Section 8.3, City will pay Consultant for all items stated thereon which are approved by City pursuant to this Agreement no later than thirty (30) days after invoices are received by the City’s Finance Department.

3.0 PERFORMANCE SCHEDULE

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not entitle the Consultant to additional compensation in excess of the Contract Sum.

3.4 Term. Unless earlier terminated in accordance with Sections 8.8 or 8.9 of this Agreement, the term of this agreement shall commence on July 1, 2015 and terminate on June 30, 2016 (“Initial Term”). This Agreement may be extended for two (2) additional year(s) upon mutual agreement by both parties (“Extended Term”). The extended term shall commence automatically, with no further action or amendment to this Agreement required, unless, with or without cause, and upon no less than thirty (30) days' written notice to Consultant (“notice of non- renewal”), City notifies Consultant that this Agreement shall expire prior to the commencement of the applicable extended term.

4.0 COORDINATION OF WORK

a. Reuben Tolentino, Vice President E-mail: [email protected]

4.2 Contract Officer. The “Contract Officer” shall be Timothy R. Jonasson, Public Works Director/City Engineer or such other person as may be designated in writing by the City Manager of City. It shall be Consultant's responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the Services, and Consultant shall refer any decisions, that must be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer. The Contract Officer shall have authority to sign all documents on behalf of City required hereunder to carry out the terms of this Agreement.

4.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, capability, and reputation of Consultant, its principals, and its

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employees were a substantial inducement for City to enter into this Agreement. Except as set forth in this Agreement, Consultant shall not contract with any other entity to perform in whole or in part the Services required hereunder without the express written approval of City. In addition, neither this Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated, or encumbered, voluntarily or by operation of law, without the prior written approval of City. Transfers restricted hereunder shall include the transfer to any person or group of persons acting in concert of more than twenty five percent (25%) of the present ownership and/or control of Consultant, taking all transfers into account on a cumulative basis. Any attempted or purported assignment or contracting by Consultant without City’s express written approval shall be null, void, and of no effect. No approved transfer shall release Consultant of any liability hereunder without the express consent of City.

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by this Agreement. Consultant shall fully comply with the workers’ compensation laws regarding Consultant and Consultant’s employees. Consultant further agrees to indemnify and hold City harmless from any failure of Consultant to comply with applicable workers’ compensation laws. City shall have the right to offset against the amount of any payment due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant’s failure to promptly pay to City any reimbursement or indemnification arising under this Section.

5.0 INSURANCE

7.0 RECORDS AND REPORTS.

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Consultant becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the Services contemplated herein or, if Consultant is providing design services, the cost of the project being designed, Consultant shall promptly notify the Contract Officer of said fact, circumstance, technique, or event and the estimated increased or decreased cost related thereto and, if Consultant is providing design services, the estimated increased or decreased cost estimate for the project being designed.

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use of uncompleted documents without specific written authorization by Consultant will be at City’s sole risk and without liability to Consultant, and Consultant’s guarantee and warranties shall not extend to such use, revise, or assignment. Consultant may retain copies of such Documents and Materials for its own use. Consultant shall have an unrestricted right to use the concepts embodied therein. All subcontractors shall provide for assignment to City of any Documents and Materials prepared by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify City for all damages resulting therefrom.

8.0 ENFORCEMENT OF AGREEMENT.

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appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action.

8.6 Legal Action. In addition to any other rights or remedies, either party may take legal action, at law or at equity, to cure, correct, or remedy any default,

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9.0 CITY OFFICERS AND EMPLOYEES; NONDISCRIMINATION.

10.0 MISCELLANEOUS PROVISIONS

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deemed communicated forty-eight (48) hours from the time of mailing if mailed as provided in this Section.

To City: To Consultant: CITY OF LA QUINTA PSOMAS Attention: Frank Spevacek, Attention: Reuben Tolentino City Manager Vice President 78-495 Calle Tampico 1500 Iowa Avenue, Ste. 210 La Quinta, California 92253 Riverside, CA 92507

10.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument

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[SIGNATURES ON FOLLOWING PAGE]

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104

Exhibit A Scope of Services

The Consultant shall provide “on call” services as follows:

 CONSTRUCTION INSPECTORS – provide qualified technical field representatives to monitor the construction of a variety of public works capital improvement and private development construction projects. Must be able to work evening/night shifts as necessary to provide coverage.

 Prepare and track project schedules as directed by the City.

 As directed by the City, prepare correspondence, reports, and memos necessary to administer various City capital improvement projects and/or private development projects.

 Observe, photograph, document and report on project progress, daily construction activities, assume the City’s role and act as the City’s agent with contractors, developers, other outside agencies and with City contracted technical consultants.

Prevailing Wage (if required) – In accordance with Section 1770 of the Labor Code, the City has ascertained and does hereby specify that the prevailing wage rates shall be those provided in Article 1110-20.0, WAGE RAGES. The said rates shall include all employer payments that are required by Section 1773.1 of the Labor Code. The City will furnish to the Contractor, upon request, a copy of such prevailing rates. It shall be the duty of the Contractor to post a copy of such prevailing wages at the job site.

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Exhibit B Schedule of Compensation

Payment shall be on a “Fixed Fee” basis in accordance with the Consultants Schedule of Compensation attached herewith for the work tasks performed in conformance with Section 2.2 of the Agreement. Total compensation for all work under this contract shall not exceed Four Hundred Sixty-Six Thousand Dollars ($466,000) except as specified in Section 1.6 - Additional Services of the Agreement. The agreed upon hourly rate for qualified construction inspection personnel provided by the Consultant shall be $112 per hour flat rate prevailing wage for Construction Inspection Services for all time periods. The City shall not pay any additional hourly wage for hours worked over 8 hours per day nor over 40 hours per week. Compensable time shall begin when the inspector arrives at the designated work site and shall end when the inspector leaves the designated work site to commute or stops conducting business associated to the City.

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Exhibit C Schedule of Performance

Consultants Project Schedule shall provide services on a full-time basis for beginning July 1, 2015 through June 30, 2016 (initial term), and upon mutual agreement by both parties, the term of this agreement may be extended for up to two (2) additional 1-year terms (extended terms).

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Exhibit D Special Requirements

AT NO ADDITIONAL COST TO THE CITY:

1. The consultant shall provide a cellular telephone and service compatible with the City’s cellular phone service for each inspector assigned to the City.

2. The consultant shall provide the latest IPad which will be uploaded with the City’s permit tracking software.

3. The consultant shall provide a hand held digital “smart level”, one for each inspector, calibrated for use in the performance of the inspector’s duties to determine percent of slope of inspected horizontal surfaces for compliance with various design guidelines.

4. The consultant shall provide each inspector a “digital” camera for daily photographic documentation. The City shall provide the necessary means of printing and downloading of digital photos for archive purposes. Said camera shall have “date back” capability and of sufficient mega pixel resolution to review relevant details of the work inspected.

5. The consultant shall provide each inspector with a hand held digital weather monitoring device. The device shall provide site-specific data of wind speed, ambient temperature and relative humidity, all data to be recorded in inspector’s daily report.

6. The consultant shall insure that each inspector has successfully completed the “Coachella Valley Fugitive Dust Control Class” provided by the South Coast Air Quality Monitoring District and renewed every two years.

7. The consultant shall provide his or her own transportation to and from the designated works site.

AT NO ADDITIONAL COST TO THE CONSULTANT:

8. The City shall make available office equipment (i.e. fax, copier, land- based telephone service) for use by consultant’s inspectors in carrying out City business under this agreement.

Last revised April 2015 EXHIBIT D Page 1 of 1 108

Exhibit E Insurance Requirements

Commercial General Liability (at least as broad as ISO CG 0001) $1,000,000 (per occurrence) $2,000,000 (general aggregate)

Commercial Auto Liability (at least as broad as ISO CA 0001) $1,000,000 (per accident)

Errors and Omissions Liability $1,000,000 (per claim and aggregate)

Workers’ Compensation (per statutory requirements)

Last revised April 2015 EXHIBIT E Page 1 of 6 109 primary for losses arising out of Consultant's performance hereunder and neither City nor its insurers shall be required to contribute to such loss.

Consultant shall carry Workers' Compensation Insurance in accordance with State Worker's Compensation laws with employer’s liability limits no less than $1,000,000 per accident or disease.

a. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under this Agreement.

b. Order Consultant to stop work under this Agreement and/or withhold any payment(s) which become due to Consultant hereunder until Consultant demonstrates compliance with the requirements hereof.

c. Terminate this Agreement.

Last revised April 2015 EXHIBIT E Page 2 of 6 110

property resulting from Consultant's or its subcontractors' performance of work under this Agreement.

E.3 General Conditions Pertaining to Provisions of Insurance Coverage by Consultant. Consultant and City agree to the following with respect to insurance provided by Consultant:

Last revised April 2015 EXHIBIT E Page 3 of 6 111

Last revised April 2015 EXHIBIT E Page 4 of 6 112

18. These insurance requirements are intended to be separate and distinct from any other provision in this Agreement and are intended by the parties here to be interpreted as such.

Last revised April 2015 EXHIBIT E Page 5 of 6 113 the intent of City to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against City for payment of premiums or other amounts with respect thereto.

Last revised April 2015 EXHIBIT E Page 6 of 6 114

Exhibit F Indemnification

F.1 General Indemnification Provision.

Last revised April 2015 EXHIBIT F Page 1 of 2 115

others as required herein, Consultant agrees to be fully responsible according to the terms of this Exhibit. Failure of City to monitor compliance with these requirements imposes no additional obligations on City and will in no way act as a waiver of any rights hereunder. This obligation to indemnify and defend City as set forth herein is binding on the successors, assigns or heirs of Consultant and shall survive the termination of this agreement or this section.

Last revised April 2015 EXHIBIT F Page 2 of 2 116

ITEM TITLE:

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CITY / SA / HA / FA MEETING DATE: June 2, 2015 AGENDA CATEGORY:

BUSINESS SESSION: ITEM TITLE: APPROVE PROFESSIONAL SERVICES

AGREEMENT WITH TRAFFEX ENGINEERS, INC. FOR CONSENT CALENDAR: CONTRACT TRAFFIC ENGINEER SERVICES STUDY SESSION:

PUBLIC HEARING:

RECOMMENDED ACTION:

Approve a Professional Services Agreement with Traffex Engineers, Inc., in an amount not to exceed $218,400, for contract traffic engineer services and authorize the City Manager to execute the agreement.

EXECUTIVE SUMMARY:

 Traffex Engineers, Inc. has been the City’s traffic engineering firm since 2003, providing traffic operations, traffic signal system design, and traffic review of development projects for the City.

 The City’s Professional Services Agreement (PSA) with Traffex Engineers expires on June 30, 2015.

 After soliciting and receiving proposals from similar firms, staff recommends entering into a new contract with Traffex Engineers due to their superior past performance and extensive knowledge of the City’s transportation system.

 The proposed PSA (Attachment 1) would be for a period of one year, from July 1, 2015 through June 30, 2016, with an automatic renewal for two additional one-year terms, unless either party cancels the contract.

FISCAL IMPACT:

This contract is for an hourly rate of $165 with a not-to-exceed amount of $218,400, which is included in the proposed Fiscal Year 2015/2016 budget. Additional office hours, if needed, will be at the same hourly rate.

119 BACKGROUND/ANALYSIS:

Nazir Lalani, President of Traffex Engineers, has been the City’s contract Traffic Engineer since 2003. Mr. Lalani provides the expertise for planning and operations not possessed by staff. The City elects to contract for this service in order to gain this expertise on an on-call basis versus retaining a full-time employee, and to benefit from Mr. Lalani’s insight performing similar services for neighboring agencies.

In April 2015, staff conducted a formal Request for Proposals process, and received proposals from Wilson & Company and Traffex Engineers, Inc. The limited response is indicative of the small number of firms that provide these services in the Coachella Valley. Staff has reviewed both proposals and Traffex Engineers Inc. was ranked number one. Traffex Engineers also provides transportation engineering for several local entities including the cities of Palm Desert, Rancho Mirage and Indian Wells, as well as the Coachella Valley Association of Governments. The firm’s experience with these agencies assists the City of La Quinta in better coordinating traffic flows and control with adjoining communities.

Traffex Engineers is requesting an increase in their hourly rates from $145 to $165 to match current market rates for similar services. At the request of the City, Traffex decreased its rate from $155 per hour in 2009 to $145 per hour, which has remained in effect until now. After reviewing this rate for similar services paid by neighboring agencies, staff believes Traffex Engineers to be the most cost effective alternative for addressing the transportation engineering needs of the City and therefore recommends approval of this PSA.

ALTERNATIVES:

Given the breadth of services supplied by Traffex and the intimate knowledge of not only the City’s but neighboring cities’ transportation operations as well, staff believes these services would be difficult to replicate with another firm or full-time traffic engineer. Therefore, staff does not recommend an alternative action.

Report prepared by: Ed Wimmer P.E., Principal Engineer Report approved for submission by: Timothy R. Jonasson, P.E. Public Works Director/City Engineer

Attachment: 1. PSA

120 ATTACHMENT 1

PROFESSIONAL SERVICES AGREEMENT

THIS AGREEMENT FOR CONTRACT SERVICES (the “Agreement”) is made and entered into by and between the CITY OF LA QUINTA, (“City”), a California municipal corporation, and TRAFFEX ENGINEERS, INC. (“Consultant”). The parties hereto agree as follows:

1.0 SERVICES OF CONSULTANT

1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide those services related to Contract City Traffic Engineer Services, as specified in the “Scope of Services” attached hereto as Exhibit “A” and incorporated herein by this reference (the “services” or “work”). Consultant warrants that all services will be performed in a competent, professional and satisfactory manner in accordance with the standards prevalent in the industry for such services.

1.2 Compliance with Law. All services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules, regulations and laws of the City of La Quinta and any Federal, State or local governmental agency of competent jurisdiction.

1.3 Licenses, Permits, Fees and Assessments. Except as otherwise specified herein, Consultant shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. Consultant shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the performance of the services required by this Agreement.

1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that (a) it has thoroughly investigated and considered the work to be performed, (b) it has investigated the site of the work and fully acquainted itself with the conditions there existing, (c) it has carefully considered how the work should be performed, and (d) it fully understands the facilities, difficulties and restrictions attending performance of the work under this Agreement. Should Consultant discover any latent or unknown conditions materially differing from those inherent in the work or as represented by City, Consultant shall immediately inform City of such fact and shall not proceed except at Consultant's risk until written instructions are received from the Contract Officer (as defined in Section 4.2 hereof).

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1.5 Care of Work and Standard of Work.

a. Care of Work. Consultant shall adopt reasonable methods during the life of the Agreement to furnish continuous protection to the work performed by Consultant, and the equipment, materials, papers and other components thereof to prevent losses or damages, and shall be responsible for all such damages, to persons or property, until acceptance of the work by City, except such losses or damages as may be caused by City's own negligence. The performance of services by Consultant shall not relieve Consultant from any obligation to correct any incomplete, inaccurate or defective work at no further cost to City, when such inaccuracies are due to the negligence of Consultant.

b. Standard of Work. Consultant acknowledges and understands that the services and work contracted for under this Agreement require specialized skills and abilities and that, consistent with this understanding, Consultant’s services and work will be held to a heightened standard of quality and workmanship. Consistent with Section 1.4 hereinabove, Consultant represents to City that it holds the necessary skills and abilities to satisfy the heightened standard of work as set forth in this Agreement.

1.6 Additional Services. In accordance with the terms and conditions of this Agreement, Consultant shall perform services in addition to those specified in the Scope of Services (“Additional Services”) when directed to do so by the Contract Officer. Consultant shall not perform any Additional Services until receiving prior written authorization from the Contract Officer. It is specifically understood and agreed that oral requests and/or approvals of Additional Services shall be barred and are unenforeceable. Failure of Consultant to secure the Contract Manager’s written authorization for Additional Services shall constitute a waiver of any and all right to adjustment of the Contract Sum or time due, whether by way of compensation, restitution, quantum meruit, etc. for Additional Services provided without the appropriate authorization from the Contract Manager. Compensation for properly authorized Additional Services shall be made in accordance with Section 2.2 of this Agreement.

1.7 Special Requirements. Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in Exhibit “D” (the “Special Requirements”). In the event of a conflict between the provisions of the Special Requirements and any other provisions of this Agreement, the provisions of the Special Requirements shall govern.

2.0 COMPENSATION

2.1 Contract Sum. For the services rendered pursuant to this Agreement, Consultant shall be compensated in accordance with Exhibit “B” (the “Schedule of

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Compensation”) in a total amount not to exceed Two Hundred Eighteen Thousand, Four Hundred Dollars ($218,400.00) (the “Contract Sum”), except as provided in Section 1.6. The method of compensation set forth in the Schedule of Compensation may include a lump sum payment upon completion, payment in accordance with the percentage of completion of the services, payment for time and materials based upon Consultant's rate schedule, but not exceeding the Contract Sum, or such other methods as may be specified in the Schedule of Compensation. Compensation may include reimbursement for actual and necessary expenditures for reproduction costs, transportation expense, telephone expense, and similar costs and expenses when and if specified in the Schedule of Compensation. Regardless of the method of compensation set forth in the Schedule of Compensation, Consultant’s overall compensation shall not exceed the Contract Sum, except as provided in Section 1.6 of this Agreement, “Additional Services.”

2.2 Compensation for Additional Services. Additional services approved in advance by the Contract Manager pursuant to Section 1.6 of this Agreement, “Additional Services,” shall be paid for in an amount agreed to in writing by both City and Consultant in advance of the Additional Services being rendered by Consultant. Any compensation for Additional Services amounting to five percent (5%) or less of the Contract Sum may be approved by the Contract Officer. Any greater amount of compensation for additional services must be approved by the La Quinta City Council. Under no circumstances shall Consultant receive compensation for any Additional Services unless prior written approval for the Additional Services is obtained from the Contract Officer pursuant to Section 1.6 of this Agreement.

2.3 Method of Billing. Any month in which Consultant wishes to receive payment, Consultant shall submit to City no later than the tenth (10th) working day of such month, in the form approved by City's Finance Director, an invoice for services rendered prior to the date of the invoice. Such invoice shall (1) describe in detail the services provided, including time and materials, and (2) specify each staff member who has provided services and the number of hours assigned to each such staff member. Such invoice shall contain a certification by a principal member of Consultant specifying that the payment requested is for work performed in accordance with the terms of this Agreement. City will pay Consultant for all expenses stated thereon which are approved by City pursuant to this Agreement no later than thirty (30) days after invoices are received by the City’s Finance Department.

3.0 PERFORMANCE SCHEDULE

3.1 Time of Essence. Time is of the essence in the performance of this Agreement.

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3.2 Schedule of Performance. All services rendered pursuant to this Agreement shall be performed diligently and within the time period established in Exhibit C (the “Schedule of Performance”). Extensions to the time period specified in the Schedule of Performance may be approved in writing by the Contract Officer.

3.3 Force Majeure. The time period specified in the Schedule of Performance for performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant, including, but not restricted to, acts of God or of the public enemy, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, acts of any governmental agency other than City, and unusually severe weather, if Consultant shall within ten (10) days of the commencement of such delay notify the Contract Officer in writing of the causes of the delay. The Contract Officer shall ascertain the facts and the extent of delay, and extend the time for performing the services for the period of the forced delay when and if in his or her judgment such delay is justified, and the Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. Extensions to the Schedule of Performance which are determined by the Contract Officer to be justified pursuant to this Section shall not entitle the Consultant to additional compensation in excess of the Contract Sum.

3.4 Term. Unless earlier terminated in accordance with Sections 8.7 or 8.8 of this Agreement, the term of this agreement shall commence on July 1, 2015 and terminate on June 30, 2016 (initial term). This agreement may be extended for 1 additional year upon mutual agreement by both parties (extended term).

4.0 COORDINATION OF WORK

4.1 Representative of Consultant. The following principals of Consultant are hereby designated as being the principals and representatives of Consultant authorized to act in its behalf with respect to the work specified herein and make all decisions in connection therewith:

a. Nazir Lalani, P.E., President E-mail: [email protected]

It is expressly understood that the experience, knowledge, capability, and reputation of the foregoing principals were a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principals shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services hereunder.

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The foregoing principals may not be changed by Consultant and no other personnel may be assigned to perform the service required hereunder without the express written approval of City.

4.2 Contract Officer. The Contract Officer shall be Timothy R. Jonasson, Public Works Director/City Engineer or such other person as may be designated by the City Manager of City. It shall be Consultant's responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the services and Consultant shall refer any decisions, which must be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer.

4.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, capability and reputation of Consultant, its principals and employees were a substantial inducement for City to enter into this Agreement. Except as set forth in this Agreement, Consultant shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of City. In addition, neither this Agreement nor any interest herein may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City.

4.4 Independent Contractor. Neither City nor any of its employees shall have any control over the manner, mode or means by which Consultant, its agents or employees, perform the services required herein, except as otherwise set forth. Consultant shall perform all services required herein as an independent contractor of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City.

4.5 City Cooperation. City shall provide Consultant with any plans, publications, reports, statistics, records or other data or information pertinent to services to be performed hereunder which are reasonably available to Consultant only from or through action by City.

5.0 INSURANCE

5.1 Insurance. Prior to the beginning of and throughout the duration of the Work performed under this Agreement, Consultant shall procure and maintain, at its cost, and submit concurrently with its execution of this Agreement, Commercial General Liability insurance against all claims for injuries against persons or damages to property resulting from Consultant's acts or omissions rising out of or related to Consultant's performance under this Agreement. The insurance policy shall contain a severability of interest clause providing that the coverage shall be primary for

125 losses arising out of Consultant's performance hereunder and neither City nor its insurers shall be required to contribute to any such loss. A certificate evidencing the foregoing and naming City and its officers and employees as additional insured (on the Commercial General Liability policy only) shall be delivered to and approved by City prior to commencement of the services hereunder.

The following policies shall be maintained and kept in full force and effect providing insurance with minimum limits as indicated below and issued by insurers with A.M. Best ratings of no less than A-:VI:

Commercial General Liability (at least as broad as ISO CG 0001) $1,000,000 (per occurrence) $2,000,000 (general aggregate)

Commercial Auto Liability (at least as broad as ISO CA 0001) $1,000,000 (per accident)

Errors and Omissions Liability $1,000,000 (per claim and aggregate)

Workers’ Compensation (per statutory requirements)

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provision establishing the insurer’s duty to defend. The policy retroactive date shall be on or before the effective date of this agreement.

Consultant shall carry Workers' Compensation Insurance in accordance with State Worker's Compensation laws with employer’s liability limits no less than $1,000,000 per accident or disease.

All insurance required by this Section shall be kept in effect during the term of this Agreement and shall not be cancelable without written notice to City of proposed cancellation. The procuring of such insurance or the delivery of policies or certificates evidencing the same shall not be construed as a limitation of Consultant's obligation to indemnify City, its officers, employees, contractors, subcontractors, or agents.

5.2 Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option:

a. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under this Agreement.

b. Order Consultant to stop work under this Agreement and/or withhold any payment(s) which become due to Consultant hereunder until Consultant demonstrates compliance with the requirements hereof.

c. Terminate this Agreement.

5.3 General Conditions pertaining to provisions of insurance coverage by Consultant. Consultant and City agree to the following with respect to insurance provided by Consultant:

1. Consultant agrees to have its insurer endorse the third party general liability coverage required herein to include as additional insureds City, its officials, employees and agents, using standard ISO endorsement No. CG 2010 with an edition prior to 1992. Consultant also agrees to require all contractors, and subcontractors to do likewise.

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3. All insurance coverage and limits provided by Contractor and available or applicable to this agreement are intended to apply to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to the City or its operations limits the application of such insurance coverage.

7. Proof of compliance with these insurance requirements, consisting of certificates of insurance evidencing all of the coverages required and an additional insured endorsement to Consultant’s general liability policy, shall be delivered to City at or prior to the execution of this Agreement. In the event such proof of any insurance is not delivered as required, or in the event such insurance is canceled at any time and no replacement coverage is provided, City has the right, but not the duty, to obtain any insurance it deems necessary to protect its interests under this or any other agreement and to pay the premium. Any premium so paid by City shall be charged to and promptly paid by Consultant or deducted from sums due Consultant, at City option.

9. Consultant agrees to ensure that subcontractors, and any other party involved with the project that is brought onto or involved in the project by

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Consultant, provide the same minimum insurance coverage required of Consultant. Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Consultant agrees that upon request, all agreements with subcontractors and others engaged in the project will be submitted to City for review.

11. The City reserves the right at any time during the term of the contract to change the amounts and types of insurance required by giving the Consultant ninety (90) days advance written notice of such change. If such change results in substantial additional cost to the Consultant, the City will negotiate additional compensation proportional to the increased benefit to City.

129 has been ordered shall be submitted prior to expiration. A coverage binder or letter from Consultant’s insurance agent to this effect is acceptable. A certificate of insurance and/or additional insured endorsement as required in these specifications applicable to the renewing or new coverage must be provided to City within five (5) days of the expiration of coverages.

18. These insurance requirements are intended to be separate and distinct from any other provision in this agreement and are intended by the parties here to be interpreted as such.

19. The requirements in this Section supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impairs the provisions of this Section.

20. Consultant agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge City or Consultant for the cost of additional insurance coverage required by this agreement. Any such provisions are to be deleted with reference to City. It is not the intent of City to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against City for payment of premiums or other amounts with respect thereto.

6.0 INDEMNIFICATION.

6.1 General Indemnification Provision.

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a. Indemnification for Professional Liability. When the law establishes a professional standard of care for Consultant’s Services, to the fullest extent permitted by law, Consultant shall indemnify, protect, defend and hold harmless City and any and all of its officials, employees and agents (“Indemnified Parties”) from and against any and all claims, losses, liabilities of every kind, nature and description, damages, injury (including, without limitation, injury to or death of an employee of Consultant or subconsultants), costs and expenses of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys’ fees, litigation expenses, and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation, to the extent same are cause in whole or in part by any negligent or wrongful act, error or omission of Consultant, its officers, agents, employees or subconsultants (or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of professional services under this agreement. With respect to the design of public improvements, the Consultant shall not be liable for any injuries or property damage resulting from the reuse of the design at a location other than that specified in Exhibit A without the written consent of the Consultant.

b. Indemnification for Other Than Professional Liability. Other than in the performance of professional services and to the full extent permitted by law, Consultant shall indemnify, defend and hold harmless City, and any and all of its employees, officials and agents from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys’ fees, litigation expenses, and fees of expert consultants or expert witnesses) incurred in connection therewith and costs of investigation, where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this Agreement by Consultant or by any individual or entity for which Consultant is legally liable, including but not limited to officers, agents, employees or subconsultants of Consultant.

6.2 Standard Indemnification Provisions. Consultant agrees to obtain executed indemnity agreements with provisions identical to those set forth herein this section from each and every subconsultant or any other person or entity involved by, for, with or on behalf of Consultant in the performance of this agreement. In the event Consultant fails to obtain such indemnity obligations from others as required herein, Consultant agrees to be fully responsible according to the terms of this section. Failure of City to monitor compliance with these requirements imposes no additional obligations on City and will in no way act as a waiver of any rights hereunder. This obligation to indemnify and defend City as set

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forth herein is binding on the successors, assigns or heirs of Consultant and shall survive the termination of this agreement or this section.

b. Indemnification Provision for Design Professionals.

1. Applicability of Section 6.2(b). Notwithstanding Section 6.2(a) hereinabove, the following indemnification provision shall apply to Consultants who constitute “design professionals” as the term is defined in paragraph 3 below.

2. Scope of Indemnification. To the fullest extent permitted by law, Consultant shall indemnify, defend, and hold harmless City and City’s agents, officers, officials, employees, representatives, and departments (“Indemnified Parties”) from and against any and all claims, losses, liabilities of every kind, nature and description, damages, injury (including, without limitation, injury to or death of an employee of Consultant or subconsultants), costs and expenses of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys’ fees, litigation expenses, and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation, that arise out of, pertain to, or relate to, directly or indirectly, in whole or in part, the negligence, recklessness, or willful misconduct of Consultant, any subconsultant, anyone directly or indirectly employed by them or anyone that they control.

3. Design Professional Defined. As used in this Section 6.2(b), the term “design professional” shall be limited to licensed architects, registered professional engineers, licensed professional land surveyors and landscape architects, all as defined under current law, and as may be amended from time to time by Civil Code § 2782.8.

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7.0 RECORDS AND REPORTS.

7.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer such reports concerning Consultant's performance of the services required by this Agreement as the Contract Officer shall require.

7.2 Records. Consultant shall keep such books and records as shall be necessary to perform the services required by this Agreement and enable the Contract Officer to evaluate the cost and the performance of such services. Books and records pertaining to costs shall be kept and prepared in accordance with generally accepted accounting principals. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records.

7.3 Ownership of Documents. Originals of all drawings, specifications, reports, records, documents and other materials, whether in hard copy or electronic form, which are prepared by Consultant, its employees, subcontractors and agents in the performance of this Agreement, shall be the property of City and shall be delivered to City upon termination of this Agreement or upon the earlier request of the Contract Officer, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership of the documents and materials hereunder. Consultant shall cause all subcontractors to assign to City any documents or materials prepared by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify City for all damages suffered thereby.

In the event City or any person, firm or corporation authorized by City reuses said documents and materials without written verification or adaptation by Consultant for the specific purpose intended and causes to be made or makes any changes or alterations in said documents and materials, City hereby releases, discharges, and exonerates Consultant from liability resulting from said change. The provisions of this clause shall survive the completion of this Contract and shall thereafter remain in full force and effect.

7.4 Release of Documents. The drawings, specifications, reports, records, documents and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer or as required by law. Consultant shall not disclose to any other entity or person any information regarding the activities of City, except as required by law or as authorized by City.

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8.0 ENFORCEMENT OF AGREEMENT.

8.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action.

8.2 Disputes. In the event of any dispute arising under this Agreement, the injured party shall notify the injuring party in writing of its contentions by submitting a claim therefore. The injured party shall continue performing its obligations hereunder so long as the injuring party commences to cure such default within ten (10) days of service of such notice and completes the cure of such default within forty-five (45) days after service of the notice, or such longer period as may be permitted by the Contract Officer; provided that if the default is an immediate danger to the health, safety and general welfare, City may take such immediate action as City deems warranted. Compliance with the provisions of this section shall be a condition precedent to termination of this Agreement for cause and to any legal action, and such compliance shall not be a waiver of any party's right to take legal action in the event that the dispute is not cured, provided that nothing herein shall limit City's right to terminate this Agreement without cause pursuant to Section 8.7.

8.4 Waiver. No delay or omission in the exercise of any right or remedy of a non defaulting party on any default shall impair such right or remedy or be construed as a waiver. City's consent or approval of any act by Consultant requiring City's consent or approval shall not be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Consultant. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement.

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different times, of any other rights or remedies for the same default or any other default by the other party.

8.6 Legal Action. In addition to any other rights or remedies, either party may take legal action, at law or at equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement.

8.7 Termination Prior To Expiration Of Term. This section shall govern any termination of this Agreement, except as specifically provided in the following Section 8.8 for termination for cause. City reserves the right to terminate this Agreement at any time, with or without cause, upon thirty (30) days' written notice to Consultant. Upon receipt of any notice of termination, Consultant shall immediately cease all services hereunder except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer thereafter in accordance with the Schedule of Compensation or such as may be approved by the Contract Officer, except as provided in Section 8.3.

8.8 Termination for Default of Consultant. If termination is due to the failure of Consultant to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section 8.2, take over work and prosecute the same to completion by contract or otherwise, and Consultant shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated (provided that City shall use reasonable efforts to mitigate such damages), and City may withhold any payments to Consultant for the purpose of setoff or partial payment of the amounts owed City as previously stated in Section 8.3.

8.9 Attorneys' Fees. If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs of suit from the losing party.

9.0 CITY OFFICERS AND EMPLOYEES; NONDISCRIMINATION.

9.1 Non-liability of City Officers and Employees. No officer or employee of City shall be personally liable to Consultant, or any successor in interest, in the event or any default or breach by City or for any amount which may become due to Consultant or to its successor, or for breach of any obligation of the terms of this Agreement.

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9.2 Conflict of Interest. No officer or employee of City shall have any personal interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which affects his or her personal interest or the interest of any corporation, partnership or association in which she or he is, directly or indirectly, interested, in violation of any State statute or regulation. Consultant warrants that it has not paid or given and will not pay or give any third party any money or general consideration for obtaining this Agreement. 9.3 Covenant against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the performance of this Agreement. Consultant shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, national origin or ancestry.

10.0 MISCELLANEOUS PROVISIONS

10.1 Notice. Any notice, demand, request, consent, approval, communication either party desires or is required to give the other party or any other person shall be in writing and either served personally or sent by prepaid, first-class mail to the address set forth below. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated forty-eight (48) hours from the time of mailing if mailed as provided in this section.

To City: To Consultant: CITY OF LA QUINTA TRAFFEX ENGINEERS, INC. Attention: Frank Spevacek, Attention: Nazir Lalani City Manager President 78-495 Calle Tampico P.O. Box 5784 La Quinta, California 92253 Ventura, California 93005-0784

10.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and all previous understanding, negotiations and agreements are integrated into and superseded by this Agreement.

10.3 Amendment. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing signed by both parties.

10.4 Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the

136 remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder.

10.5 Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by so executing this Agreement the parties hereto are formally bound to the provisions of this Agreement.

137 138

Exhibit A Scope of Services

Traffex Engineers, Inc. shall provide traffic engineering services for the City to include, but not be limited to, the following:

Assist City with preparation of an Annual Traffic Safety Report, to be completed by September 1, 2015.

1) Identify and develop solutions for and advise City staff on addressing and responding to citizen requests using the Go Request system.

2) Provide technical assistance for traffic signal design and day to day traffic operations including traffic signals.

3) Provide an initial response to citizen requests based on when the request was submitted to the City through the Go Request system.

4) Preparing materials to be used for issuing work orders to implement signing and striping changes requested by citizens.

5) Review development plans including environmental impact reports and impact studies for potential traffic issues and advise City on possible solutions.

6) Review precise grading and public improvement plans for potential traffic issues and advise City on possible solutions.

7) Review all traffic control plans for construction projects and advise City on potential issues.

8) Attend City Council and Planning Commission meetings if requested.

9) Review and update the Crossroads traffic collision data baseand advise City staff on traffic issues involved.

10) Assist Traffic Signal Maintenance Technicians with signal timing and signal communications, central computer signal system, data collection, report preparation and signal/striping plan layout and plan check.

11) Provide technical input to City staff with signing and striping changes, issuing work orders to address citizen requests, signal equipment upgrades and parts, collision analysis, speed limits, traffic volume data and other work performed by City staff.

12) Review traffic plans for capital improvement projects and advise City on potential issues.

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Exhibit B Schedule of Compensation

With the exception of compensation for Additional Services, provided for in Section 2.2 of this Agreement, the maximum total compensation to be paid to Consultant under this Agreement is Two Hundred Eighteen Thousand, Four Hundred Dollars ($218,400.00) (“Contract Sum”). The Contract Sum shall be paid to Consultant in installment payments made on a monthly basis and in an amount identified in Consultants Schedule of Compensation attached hereto for the work tasks performed and properly invoiced by Consultant in conformance with Section 2.2 of the Agreement.

Schedule of Billing Rates

Professional Staff Hourly Rates

Principal (Registered Professional Engineer) $165.00

Upon receipt by City and under separate invoice the Consultant shall provide the traffic engineering support services at the following rates:

Support Staff Hourly Rates

Associate Engineer $100.00 Drafter/Technician $ 75.00 Secretary $ 60.00

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Exhibit C Schedule of Performance

The Contract period for traffic engineering services shall be from July 1, 2015 to June 30, 2016 (“Initial Term”). This Agreement may be extended for two additional year(s) upon mutual agreement by both parties (“Extended Term”).

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Exhibit D Special Requirements

None

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CITY / SA / HA / FA MEETING DATE: June 2, 2015 AGENDA CATEGORY:

BUSINESS SESSION: ITEM TITLE: APPROVE SPECIFICATIONS AND ENGINEER’S ESTIMATE AND ADVERTISE FOR BIDS FOR THE INTERIOR CONSENT CALENDAR: TH PHASE OF THE LIBRARY 10 ANNIVERSARY IMPROVEMENTS PROJECT STUDY SESSION:

PUBLIC HEARING:

RECOMMENDED ACTION:

Approve the specifications and engineer’s estimate and authorize staff to advertise for bids for the Interior Phase of the Library 10th Anniversary Improvements Project.

EXECUTIVE SUMMARY:

 The Library, although less than 10 years old, requires refurbishment due to heavy use.

 The Library 10th Anniversary Project consists of an interior and exterior phase. The specifications and engineer’s estimate for the interior phase are now complete, with the Library Light Emitting-diode (LED) Lighting Conversion Improvements now included.

 Staff recommends the refurbishment be completed by the Library’s 10th anniversary event to be held later this year and, upon approval, will advertise for bids for the interior phase of the project.

 The exterior phase is currently in design.

FISCAL IMPACT:

The project budget is $1,189,610 for the interior and parking lot improvements, which will be funded through unappropriated Library Funds. The project budget for the Library LED Lighting Conversion Project is $72,465, which will be funded through the Library Operations Budget.

The Library 10th Anniversary Project budget is below:

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Project Total Interior Phase Exterior Phase Professional (7.75%): $60,505 $24,297 $36,209 Design (10%): $78,071 $31,350 $46,721 Inspection/Testing/Survey (9.75%): $76,119 $30,567 $45,553 Construction: $780,712 $313,505 $467,208 City Administration (5%): $39,036 $15,675 $23,360 Contingency (15% of Whole): $155,167 $62,309 $92,857 Total Budget: $1,189,610 $477,703 $711,907

Note: Due to rounding, numbers presented may not add up precisely to the totals provided.

The approved project budget for the Library LED Lighting Conversion Project is as follows:

BUDGET LINE ITEM BUDGET Professional/Design: $8,500 Technical $4,875 (Insp/Test/Survey): Construction: $50,000 Contingency: $6,590 City Administration: $2,500 TOTAL BUDGET: $72,465

BACKGROUND/ANALYSIS:

The Library will be celebrating its 10th anniversary later this year and the Community Services Department is planning a celebration to recognize this achievement. After nearly 10 years of heavy use, the interior of the Library and the parking lot are both in need of refurbishment. The interior of the Library will be refreshed to include new carpet, paint, upgraded restrooms, and new or rehabilitated furnishings. The exterior improvements will include expanding and resurfacing the existing parking lot and refurbishing the drainage around the building.

On May 19, 2015, all bids received for the Library LED Lighting Conversion Improvements were rejected and now this portion of Library improvements has been incorporated into the interior phase of the project.

The project bid documents are now complete and available for review in the Public Works Department. Staff anticipates the interior improvements can be made in August at which time the Library can be closed with minimal impact to the public.

144 Contingent upon City Council’s approval to advertise the project for bids, the following is the proposed schedule:

City Council Bid Authorization June 2, 2015 Bid Period June 3 through July 2, 2015 Council Considers Project Award July 7, 2015 Execute Contract and Mobilize July 8 through July 29, 2015 Construction (40 Working Days) August through September 2015 Accept Improvements October 2015

ALTERNATIVES:

Since these improvements are necessary to maintain the condition of the Library and it would be best to complete construction during the summer to minimize impacts to the public, no additional alternatives are recommended.

Report prepared by: Ed Wimmer, P.E., Principal Engineer Report approved for submission by: Timothy R. Jonasson, P.E. Public Works Director/City Engineer

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168 ATTACHMENT 1

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172 RESOLUTION NO. 2015-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA APPROVING AND ADOPTING THE AMENDED INVESTMENT POLICY FOR FISCAL YEAR 2015/2016

WHEREAS, the general purpose of the Investment Policy is to provide the rules and standards users must follow in investing funds of the City of La Quinta; and

WHEREAS, the primary objectives, in order of priority, of the City of La Quinta’s investment activity shall be:

Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.

The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.

The investment portfolio shall be designed with the objective of attaining a market rate of return or yield throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs; and

WHEREAS, authority to manage the City of La Quinta’s investment portfolio is derived from the City’s municipal code, management responsibility for the investment program is delegated to the City Treasurer, who shall establish and implement written procedures for the operation of the City’s investment program consistent with the Investment Policy for Fiscal Year 2015/2016; and

WHEREAS, the Investment Policy will be adopted before the end of June of each year and amended as considered necessary.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of La Quinta to adopt the Fiscal Year Investment Policy (Exhibit A).

173 Resolution No. 2015- Investment Policy Adopted: June 2, 2015 Page 2 of 3

PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta City Council, held on this 2ND day of June, 2015 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

______LINDA EVANS, Mayor City of La Quinta, California

ATTEST:

______SUSAN MAYSELS, City Clerk City of La Quinta, California

(CITY SEAL)

APPROVED AS TO FORM:

______WILLIAM H. IHRKE, City Attorney City of La Quinta, California

174 Resolution No. 2015- Investment Policy Adopted: June 2, 2015 Page 3 of 3

Exhibit A

(TO BE ATTACHED)

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176 ATTACHMENT 1

177 CITY OF LA QUINTA Investment Policy Fiscal Year 2015/2016

Table of Contents

Section Topic Page Executive Summary 2 I General Purpose 4 II Investment Policy 4 III Scope 4 IV Objectives 4  Safety of Principal  Provide Liquidity  Yield A Risk-Based Market Rate Of Return V Maximum Maturities 6 VI Prudence 6 VII Authority 6 VIII Ethics and Conflicts of Interest 7 IX Authorized Financial Dealers and Institutions 7  Broker/Dealers  Financial Institutions X Permissible Deposits and Investments 8 XI Investment Pools 12 XII Payment and Custody 12 XIII Interest Earning Distribution Policy 13 XIV Internal Controls and Independent Auditors 13 XV Reporting Standards 14 XVI Financial Assets and Investment Activity Not Subject to this Policy 15 XVII Investment of Bond Proceeds 15 XIII Investment Advisory Board - City of La Quinta 15 XIX Investment Policy Adoption 16

Appendices Topic Page A Summary of Permissible Deposits and Investments 17 B City of La Quinta Municipal Code Ordinance 2.70 - Investment Advisory Board 19 C City of La Quinta Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 20 D Segregation of Major Investment Responsibilities 22 E Listing of Approved Financial Institutions 23 F Broker/Dealer Questionnaire and Certification 24 G Request for Proposal for Professional Portfolio Management Firm 28 H Permissible Investment Chart – Professional Portfolio Management Firm 34 I Investment Management Process and Risk 35 J Glossary 36

1 178 CITY OF LA QUINTA Investment Policy Fiscal Year 2015/2016

Executive Summary

The general purpose of this Investment Policy is to provide the rules and standards that must be followed in administering the City of La Quinta’s deposits and investments.

The City’s Investment Policy conforms to all state and local statutes and applies to all deposits and investments of the City of La Quinta (the“City”).

It is the City’s policy to deposit and invest public funds in a manner that shall provide:  Safety of principal;  Liquidity to meet all of the City’s obligations and requirements that may be reasonably anticipated; and  A risk-based market rate of return.

It is the City’s policy to hold securities and other investments until maturity. This buy-and-hold policy shall not prevent the sale of a security to minimize loss of principal when an issuer or backer suffers declining credit worthiness or when the liquidity needs of the portfolio require that a security be sold.

Authority to manage the City’s investment portfolio is derived from the City Municipal Code. Management responsibility for the investment program is delegated to the City Treasurer, who shall establish and implement written procedures for the operation of the City’s investment program consistent with the Investment Policy. The Treasurer shall establish and implement a system of internal controls to accomplish the following objectives:  Safeguard assets;  Orderly and efficiently conduct its business, including adherence to all City management policies;  Prevent or detect errors and fraud;  Accurately complete all accounting records; and  Timely prepare all reliable financial information.

The System of Internal Controls developed by the City Treasurer shall be reviewed annually by the independent auditors in connection with the annual audit of the City’s financial statements.

The City Treasurer maintains a listing of financial institutions which are approved for investment purposes. All Broker/Dealers and financial institutions that provide investment services will be subject to City Council approval.

The Treasurer will be permitted to invest only in the permissible deposits and investments described in Section X and Appendix A up to the specified maximum allowable percentages and/or dollar limitations and, where applicable, through the bid process requirements. Permissible deposits and investments include, in general:  FDIC-Insured Checking, Savings, and Sweep Accounts;  Collateralized Bank Deposits;

2 179  Certificates of Deposit;  Negotiable Certificates of Deposit;  U.S. Government Agency Securities and Federal Government Securities;  Prime Commercial Paper;  Local Agency Investment Fund (LAIF);  Money Market Mutual Funds;  Corporate Notes; and  Professionally Managed Accounts.

The City’s deposits and investments are generally limited to three years’ maximum maturity. However, the projected amount of funds not expected to be disbursed within five years may be invested in notes and bonds maturing between three and five years. Additionally, funds may be invested for up to ten (10) years as further discussed in Section V.

The City’s Investment Policy does not specify a single benchmark as a goal or target yield for a rate of return on its investment portfolio. As a basis for comparison only, the Treasurer’s monthly report will display the rates of return on the three-month Bill, six-month Bill, and the one and two-year U.S. Treasury Note, comparable-period rates for commercial paper, and the yield for the State Treasurer’s Local Agency Investment Fund (LAIF).

The Investment Policy shall be adopted by resolution of the La Quinta City Council on an annual basis. The Investment Policy will be adopted before the end of June of each year.

This Executive Summary is only an overview of the City’s Investment Policy. Reading this summary does not constitute a complete review, which can only be accomplished by reviewing all of the pages herein.

3 180 City of La Quinta Statement of Investment Policy July 1, 2015 through June 30, 2016 Adopted by the City Council on , 2015

I GENERAL PURPOSE

The general purpose of this document is to provide the rules and standards that must be followed in administering the City of La Quinta’s deposits and investments.

II INVESTMENT POLICY

It is the policy of the City of La Quinta to deposit and invest public funds in a manner that shall provide:  Safety of principal;  Liquidity to meet all of the City’s obligations and requirements that may be reasonably anticipated; and  A risk-based market rate of return.

The Investment Policy conforms to all State and local statutes governing the investment of public funds and sets forth the permissible deposits and investments of the City’s funds and the limitations thereon.

III SCOPE

Except as further detailed in Section XVII, this Investment Policy applies to all deposits and investments of the City of La Quinta, Successor Agency to the City of La Quinta Redevelopment Agency and the City of La Quinta Financing and Housing Authorities (hereafter referred to in this document as the "City"). These funds are reported in the City’s Comprehensive Annual Financial Report (CAFR) and include all funds within the following fund types:  General  Special Revenue  Capital Projects  Debt Service  Enterprise  Internal Service  Trust and Agency  Any new fund types and fund(s) that may be created.

IV OBJECTIVES

The objectives of the City's investment activity, in order of priority and importance, are:

1. Safety of Principal Safety of principal is the foremost objective of the City’s investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of principal of the overall portfolio in accordance with the permissible deposits and investments.

4 181 The City shall endeavor to preserve its investment principal by making only permissible deposits and investments, undertaken in a controlled manner to minimize the possibility of loss or misappropriation through malfeasance or otherwise. Investments not backed by the full faith and credit of the United States Government shall be diversified by allocating assets between different types of permissible investments, maturities, and issuers as a means to mitigate credit risk and interest rate risk.

a. Credit Risk is the risk of loss from the failure of the security issuer or backer. Credit risk may be mitigated by:  Limiting investments to investment grade securities as permitted in Section X;  Diversifying the issuers of the securities in the investment portfolio so that potential losses due to issuer failure or individual securities downgrades may be minimized.

b. Interest Rate Risk is the risk that market values of securities in the portfolio will decline due to changes in general interest rates. Interest rate risk may be mitigated by:  Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity; and  Investing operating funds primarily in shorter-term securities.

c. Liquidity Risk is the risk that a security cannot be liquidated because of its unique features or structure or because it is thinly traded. Liquidity risk is not a material issue for the City’s portfolio because of the permissible deposits and investments (see Section X) and because the City maintains a buy-and-hold policy and holds securities and other investments to maturity. A discussion of the City’s investment process and risk is presented in Appendix I.

2. Provide Liquidity The investment portfolio shall remain sufficiently liquid to meet all of the City’s cash needs that may be reasonably anticipated. This is accomplished by structuring the portfolio so that sufficient liquid funds are available to meet anticipated demands. Furthermore, since all possible cash needs cannot be anticipated the portfolio should be diversified and consist of securities with active secondary or resale markets.

The City’s policy is to hold securities and other investments to maturity. Accordingly, securities shall not be sold prior to maturity with the following exceptions:  A security with declining credit quality can be sold early to minimize loss of principal;  Unanticipated liquidity needs of the portfolio require that one or more securities be sold.

3. Yield a Risk-Based Market Rate Of Return The City’s investment portfolio shall be structured with the objective of yielding a risk- based market rate of return throughout budgetary and economic cycles. Return on investment is less important than the safety and liquidity objectives described above.

The City’s Investment Policy does not specify a single benchmark as a goal or target yield for a rate of return on its investment portfolio. The portfolio’s rates of return will be influenced by several factors, including actions by the Federal Reserve Board, the marketplace, and overall economic perceptions and conditions. These factors will not

5 182 affect yield during the securities’ holding period because the City’s buy-and-hold policy fixes the securities’ yield at the time of purchase.

As a basis for comparison only, the Treasurer’s monthly reports will display the rates of return on the three-month Bill, six-month Bill, and one and two-year U.S. Treasury Note, comparable-period rates for commercial paper, and the yield for the State Treasurer’s Local Agency Investment Fund (LAIF). The Treasurer may use these or any other published rates of return that the Treasurer deems appropriate for comparison to the return on the City’s investment portfolio.

V MAXIMUM MATURITIES

It is the City’s policy to hold securities and other investments until maturity, thus avoiding the risk of market value fluctuations with overall market interest rates. This buy-and-hold policy shall not prevent the sale of a security to minimize loss of principal when an issuer or backer suffers declining credit worthiness or when the liquidity needs of the City require that a security be sold.

The buy-and-hold policy requires that the City’s investment portfolio be structured so that sufficient liquid funds are available from maturing investments and other sources to meet all reasonably-anticipated cash needs. To meet anticipated cash needs, it is essential that the Treasurer have reliable, diligently prepared cash flow projections.

Annually, the Treasurer shall project the amount of funds not expected to be disbursed within ten years. For FY2015/2016, the amount of such funds is projected to be $20 million. Funds up to that amount may be invested in U.S.Treasury notes and bonds, Local Agency Obligations, and California Local Agency Obligations maturing between 3 and 10 years. For all other funds, investments are limited to five years maximum maturity.

VI PRUDENCE

The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in Probate Code Sections 16045 through 16054.

Section 16053 sets forth the terms of a prudent person which are as follows: “Investments shall be made with judgment and care - under circumstances then prevailing - which persons of prudence, discretion, and intelligence exercise in the professional management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.”

VII AUTHORITY

Authority to manage the City's investment portfolio is derived from section 3.08 of the City’s Municipal Code. Management responsibility for the investment program is delegated to the City Treasurer for a period of one year pursuant to the City Council’s annual adoption of the Investment Policy.

The City Treasurer shall establish written procedures for the operation of the investment program consistent with the Investment Policy. Procedures should include reference to safekeeping, wire transfer agreements, banking service contracts, and collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons responsible for investment

6 183 transactions. No person may engage in an investment transaction except as provided under the terms of this Investment Policy and the procedures established by the City Treasurer. The City Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City Manager or his/her designee shall acknowledge in writing all purchases and sales of investments prior to their execution by the City Treasurer.

VIII ETHICS AND CONFLICTS OF INTEREST

The City Manager, City Treasurer and city employees involved in the City’s banking and investment process shall conduct the City’s business in an ethical manner and refrain from any activity or relationship that may be, or have the appearance of, a conflict of interest. Any questionable activity or relationship shall be reported immediately and in compliance with the procedures set forth in Section 1.40 – Conflicts of Interest and Acceptance of Gifts and other Gratuities of the City of La Quinta Personnel Manual. Reporting must be made in accordance with the personnel policies of the City and, until resolved, the officer or employee shall refrain from participating in the City’s business related to the matter.

The City Manager, City Treasurer and City employees may conduct personal business with banks, brokers, and other financial institutions that are authorized to conduct business with the City provided that the terms of the activity to the accountholder with the City are the same as those that are available to the public in general.

IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS

The City Treasurer maintains a listing of financial institutions which are approved for direct investment purposes. In addition a list will also be maintained of approved broker/dealers selected by credit worthiness.

1. Broker/Dealers who desire to become bidders for direct investment transactions must supply the City with the following:  Current audited financial statements;  Proof of Financial Industry Regulatory Authority (FINRA) Certification;  Trading resolution;  Resume of Financial broker; and  Completion of the City of La Quinta Broker/Dealer questionnaire (see Appendix F) which contains a certification of having read the City’s Investment Policy.

The City Treasurer shall evaluate the documentation submitted by the broker/dealer and independently verify existing reports on file for any firm and individual conducting investment related business.

The City Treasurer will also contact the following agencies during the verification process:  Financial Industry Regulatory Authority (FINRA) Public Disclosure Report File (1- 800-289-9999).  State of California Department of Corporations (1-916-445-3062).

7 184

Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S. Treasury Department regulations. Each mutual fund shall provide a prospectus and statement of additional information.

2. Financial Institutions will be required to meet the following criteria in order to receive City funds for deposit or investment (see Appendix E, “Listing of Approved Financial Institutions”):

a. Insurance - Public Funds shall be deposited only in financial institutions having accounts insured by the Federal Deposit Insurance Corporation (FDIC).

b. Collateral - The amount of the City’s deposits or investments not insured by the FDIC shall be collateralized by securities with market values of 110%, or by mortgages with market values 150%, of the amount of invested funds plus unpaid interest earnings.

c. Disclosure - Each financial institution maintaining invested funds in excess of the FDIC insured amount shall furnish the City a copy of the most recent Call Report.

The City shall not invest in excess of the FDIC insured amount in banking institutions which do not disclose to the city a current listing of securities pledged for collateralization in public monies.

X PERMISSIBLE DEPOSITS AND INVESTMENTS

Permissible deposits and investments are summarized below. A more comprehensive list is included in Appendix A.

Permissible Investments and Limitations Maximum Maximum Restrictions (See Appendix A for Additional Information) Allocation Maturity Sweep Account: Current / Checking & Savings Accounts FDIC Insured & Sweep Accounts 85% of Portfolio U.S. Treasuries On Demand and/or GSE's

Interest bearing active bank deposits – non FDIC insured collateralized by Current / $40 million 60% of Portfolio 110% of eligible securities On Demand per bank

<= $250,000, Certificates of Deposit - FDIC Insured 60% of Portfolio 5 Years including interest

per institution

<= $250,000 Negotiable Certificates of Deposit – FDIC Insured 30% of Portfolio 5 Years including interest per institution <=$20,000,000 U.S. Treasury Bills, Notes and Bonds, and Government National 100% of Portfolio 5 Years maturing 3-10 Mortgage Association (GNMA) Securities Yrs. <=$20,000,000 maturing 3-10 Yrs. Local Agency Bonds / California Local Agency Obligations 30% of Portfolio 10 Years Long term “A, A2, A” or better U.S. Government Agency Securities and Federal Government Securities $10 million per (except collateralized mortgage obligations (CMO’s) or structured notes purchase which contain embedded rate options): 8 185 Permissible Investments and Limitations Maximum Maximum Restrictions (See Appendix A for Additional Information) Allocation Maturity - Federal National Mortgage Association (FNMA) $20,000,000 5 Years 30% of Portfolio - Federal Home Loan Bank Notes & Bonds (FHLB) $25,000,000 5 Years - Federal Farm Credit Bank (FFCB) $30,000,000 5 Years - Federal Home Loan Mortgage Corporation (FHLMC) $20,000,000 5 years

Prime Commercial Paper including Temporary Liquidity Guarantee $5,000,000 per 15% of Portfolio 90 Days Program (TLGP) issuer maximum

Current / $50 million Local Agency Investment Fund (LAIF) 30% of Portfolio On Demand per account

Money market mutual funds regulated by the SEC that consist only of US Current / Maintain $1 per 20% of Portfolio Treasury Securities or GSE's and maintain a par value of $1 per share On Demand share par value

$5,000,000 max Corporate Notes 10% of Portfolio 3 Years per issuer AA rated or better $10,000,000 max Corporate Notes - Temporary Liquidity Guarantee Program (TLGP) 20% of Portfolio 3 Years per issuer, AA rated or better Requires Professionally Managed Account 10% of Portfolio 3 Years City Council- Approved RFP

Long-Term Scale S&P A1 AAA, AA+, AA, AA-, A+, A Moody’s P1 Aaa, Aa1, Aa2, Aa3, A1, A2 Fitch AAA, AA+, AA, AA-, A+, A

Checking, Savings, and Sweep Accounts – The City will only maintain checking, savings, and sweep accounts with FDIC insured financial institutions. As authorized by the City Council, a U.S. Treasury and/or U.S. Agency Securities Money Market Sweep Account with a $50,000 target balance may be maintained in conjunction with the checking account.

In addition, the Treasurer may invest in an interest bearing active deposit account as approved in Government Code Section 53632. The deposit account must be collateralized with securities that are in accordance with Government Code Sections 53632.5(c). In addition, the market value of the collateralized securities must be maintained in accordance with 53652 (a), and be held by a custodian in accordance with the requirements of Government Code Section 53656. The proposition of the City’s share of the deposit account shall be determined in accordance with Government Code Section 53658.

Certificates of Deposit - As authorized in Government Code Section 53649, Certificates of Deposit are fixed term investments which are required to be collateralized from 110% to 150% depending on the specific security pledged as collateral in accordance with Government Code Section 53652.

Collateralization will be required for Certificates of Deposits in excess of the FDIC insured amount. The type of collateral is limited to City authorized investments. Collateral will always be held by an independent third party from the institution that sells the Certificates of Deposit to the City. Evidence of compliance with State Collateralization policies must be supplied to the City and retained by the City Treasurer as follows:

9 186  Certificates of Deposits Insured by the FDIC: The City Treasurer may waive collateralization of a deposit that is federally insured.

 Certificates of Deposit in excess of FDIC Limits: The amount not federally insured shall be 110% collateralized securities or 150% mortgages market value of that amount of invested funds plus unpaid interest earnings.

The City’s Investment Policy limits the percentage of Certificates of Deposit to 60% of the portfolio.

Negotiable Certificates of Deposit - issued by a nationally or state-chartered bank, a savings association or a federal association (as defined by Section 5102 of the Financial Code), a state or federal credit union, or by a federally- or state- licensed branch of a foreign bank. No more than 30% of the City’s portfolio may be invested in negotiable CDs.

U.S. Treasury Bills, Notes, and Bonds and Government National Mortgage Associations (GNMA) securities – The City may invest in U.S. Treasury bills, notes, and bonds and GNMA securities directly issued and backed by the full faith and credit of the U.S. Government. The City’s Investment Policy provides for investments in U.S. Treasury issues and GNMA’s of 100% of the portfolio.

 The City’s Investment Policy does not allow investments in state indebtedness.

Local Agency Bonds and California Local Agency Obligations – The City may invest in California local agency obligations pursuant to 56301(a) and 53301(e). 53601(a) pertains to investing in bonds issued by a local agency, department, board, agency or authority of the local agency. 53601(e) pertains to investing in bonds and other defined indebtedness of a local agency or department, board, agency or authority of the local agency within the State of California.

The City’s Investment Policy limits investments in Local Agency Bonds and California Local Agency obligations to 30% of the portfolio with up to a ten year maximum maturity. In addition, the Agency obligations must be invested in the long term rating of A, A2, A or better by S&P, Moody’s or Fitch.

In the case of an initial public offering, including refinancings, the Treasurer may purchase directly from the Bond Underwriter. In the case of secondary issues, the Treasurer will rely on the approved Broker/Dealers.

U.S. Government Agency Securities and Federal Government Securities – The City may invest in securities issued by U.S. Government instrumentalities and agencies (commonly referred to as government sponsored enterprises or GSE’s). These securities are not backed by the full faith and credit of the U.S. Government. Publicly owned GSE’s include Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC) and Student Loan Marketing Association (SLMA). Non-publicly owned GSE’s include the Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Federal Land Bank (FLB) and Federal Intermediate Credit Bank (FICB).

The City’s Investment Policy allows investment only in securities of FNMA, FHLMC, FHLB and FFCB. For Fiscal Year 2015/2016, the maximum face amount per issuer is $20 million for FNMA and FHLMC, $25 million for FHLB and $30 million for FFCB. In addition,

10 187 no more than 30% of the portfolio surplus may be invested in all GSE’s combined with a maximum $10 million face amount per purchase.

Prime Commercial Paper - As authorized in Government Code Section 53601(g), a portion of the City’s portfolio may be invested in commercial paper of the highest rating (A1 or P1) as rated by Moody’s or Standard and Poor’s. There are a number of other qualifications regarding investments in commercial paper based on the financial strength of the corporation and the size of the investment. The City’s Investment Policy permits investments in commercial paper with the following limitations:

 Maximum 15% of the portfolio.  Maximum maturity of 90 days.  Maximum of $5 million per issuer.

These limitations are more restrictive than the State code which allows amounts of 25% of the total portfolio with maturities up to 270 days with no per-issuer limitations.

Local Agency Investment Fund (LAIF) - As authorized in Government Code Section 16429.1 and by LAIF procedures, local government agencies are each authorized to invest a maximum of $50 million per account in this investment program administered by the California State Treasurer. The City Treasurer may not invest more than $50 million per account in LAIF. The City's investment in LAIF is allowable as long as the average maturity of its investment portfolio does not exceed two years, unless specific approval is authorized by the City Council. The City limits investment to 30% of the portfolio.

Money Market Mutual Funds - As authorized in Government Code Section 53601(k), local agencies are authorized to invest in shares of beneficial interest issued by diversified management companies (mutual funds) in an amount not to exceed 20% of the agency’s portfolio. There are a number of other qualifications and restrictions regarding allowable investments in corporate notes and shares of beneficial interest issued by mutual funds which include (1) attaining the highest ranking or the highest letter and numerical rating provided by not less than two of the three largest nationally recognized rating services, or (2) having an investment advisor registered with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations and with assets under management in excess of five hundred million dollars ($500,000,000).

The City’s Investment Policy only allows investments in mutual funds that are money market funds maintaining a par value of $1 per share that invest in direct issues of the U.S. Treasury and/or US Agency Securities with an average maturity of their portfolio not exceeding 90 days and the City limits such investments to 20% of the portfolio.

Corporate Notes - As authorized in Government Code Section 53601 (j), local agencies may invest in corporate notes. The notes must be issued by corporations organized and operating in the United States or by depository institutions licensed by the United States or any other state and operating in the United States. The City’s Investment Policy allows investment in corporate notes authorized by the Government Code with the following limitations:

 Maturities shall not exceed three years from date of purchase;  Eligible notes shall be regularly quoted and traded in the marketplace;  Eligible notes shall be rated “AA“ or better; and  The maximum aggregate investment shall not exceed $5 million face amount for each issuer.

11 188

This is more restrictive than the State code allowed amounts of 30% of the total portfolio with maturities up to five years with no per-issuer limitations.

Professionally Managed Account(s) - The City Treasurer may place up to 10% of the portfolio with a professional portfolio management firm (“PPMF”). The PPMF will be approved by the City Council based upon the City Treasurer’s recommendation pursuant to completion of a request for proposal (RFP) as outlined in Appendix G. The PPMF shall have:

 An established professional reputation for asset or investment management;  Knowledge and working familiarity with State and Federal laws governing and restricting the investment of public funds;  Substantial experience providing investment management services to local public agencies whose investment policies and portfolio size are similar to those of the City;  Professional liability (errors and omissions) insurance and fidelity bonding in such amounts as are required by the City; and  Registration with the Securities and Exchange Commission under the Investment Advisers Act of 1940.

Before engagement by the City and except as may be specifically waived or revised, the PPMF shall commit to adhere to the provisions of the City’s Investment Policy with the following exceptions:

 The PPMF may be granted the discretion to purchase and sell investment securities in accordance with Appendix I of this Investment Policy;  The PPMF is not required to adhere to the buy-and-hold policy of the City’s Investment Policy; and  The PPMF does not need City Manager or City Treasurer approval to make permissible investments as detailed in column 8 of Appendix H of this Investment Policy.

XI INVESTMENT POOLS

There are three (3) types of investment pools:

 State-run pools (e.g., LAIF);  Pools that are operated by a political subdivision where allowed by law and the political subdivision is the trustee (e.g., County Pools); and  Pools that are operated for profit by third parties.

The City’s Investment Policy permits investment only in pools authorized in Section X.

XII PAYMENT AND CUSTODY

The City shall engage qualified third party custodians to act in a fiduciary capacity to maintain appropriate evidence of the City’s ownership of securities and other eligible investments. Such custodians shall disburse funds, received from the City for a purchase, to the broker, dealer or seller only after receiving evidence that the City has legal, record ownership of the securities. Even though ownership is evidenced in book-entry form rather than by actual certificates, this

12 189 procedure is commonly accepted as the delivery versus payment (DVP) method for the transfer of securities.

XIII INTEREST EARNING DISTRIBUTION POLICY

Interest earnings are generated from pooled investments and specific investments. The following provisions apply to the calculation and distribution of interest earnings.

1. Pooled Investments - It is the general policy of the City to pool all available operating cash of the City of La Quinta, Successor Agency to the City of La Quinta Redevelopment Agency, La Quinta Financing Authority, and La Quinta Housing Authority, and to allocate interest earnings in the following order, as follows:

a. Payment to the General Fund of an amount equal to the total annual bank service charges as incurred by the general fund for all operating funds as included in the annual operating budget.

b. Payment to the General Fund of a management fee equal to 5% of the annual pooled cash fund investment earnings.

c. Payment to each fund of an amount based on the average computed daily cash balance included in the common portfolio for the earning period.

2. Specific Investments - Specific investments purchased by a fund shall incur all earnings and expenses to that particular fund.

XIV INTERNAL CONTROLS AND INDEPENDENT AUDITOR

The City Treasurer shall establish a system of internal controls to accomplish the following objectives:

 Safeguard assets;  The orderly and efficient conduct of its business, including adherence to management policies;  Prevention or detection of errors and fraud;  The accuracy and completeness of accounting records; and  Timely preparation of reliable financial information.

While no internal control system, however elaborate, can guarantee absolute assurance that the City’s assets are safeguarded, it is the intent of the City’s internal control to provide a reasonable assurance that management of the investment function meets the City’s objectives.

The internal controls shall address the following:

 Control of collusion. Collusion is a situation where two or more employees are working in conjunction to defraud their employer.

 Separation of transaction authority from accounting and record keeping. By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved.

13 190  Custodial safekeeping. Securities purchased from any bank or dealer including appropriate collateral (as defined by State Law) shall be placed with an independent third party for custodial safekeeping.

 Avoidance of physical delivery securities. Book entry securities are much easier to transfer and account for since actual delivery of a document never takes place. Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities.

 Clear delegation of authority to subordinate staff members. Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities as outlined in the Segregation of Major Investment Responsibilities appendices.

 Written confirmation or telephone transactions for investments and wire transfers. Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions shall be supported by written communications or electronic confirmations and approved by the appropriate person. Written communications may be via fax if on letterhead and the safekeeping institution has a list of authorized signatures. Fax correspondence must be supported by evidence of verbal or written follow-up.

 Development of a wire transfer agreement with the City’s bank and third party custodian. This agreement should outline the various controls, security provisions, and delineate responsibilities of each party making and receiving wire transfers.

The system of internal controls developed by the City, shall be reviewed annually by the independent auditor in connection with the annual audit of the City’s Financial Statements. The independent auditor’s letter on internal control over financial reporting and compliance as it pertains to cash and investments, if any, shall be directed to the City Manager who will direct the City Treasurer to provide a written response to the independent auditor’s letter. The auditor’s letter, as it pertains, to cash and investment activities and the City Treasurer’s response shall be provided to the City’s Investment Advisory Board for their consideration. Following the completion of each annual audit, the independent auditor shall meet with the Investment Advisory Board and discuss the auditing procedures performed and the review of internal controls for cash and investment activities. See Appendix D, “Segregation of Major Investment Responsibilities.”

XV REPORTING STANDARDS

The City Treasurer shall submit a monthly Treasurers Report to the City Council and the Investment Advisory Board that includes all cash and investments under the authority of the Treasurer. The Treasurer’s Report shall summarize cash and investment activity and changes in balances and include the following:

 A certification by the City Treasurer;  A listing of purchases and sales/maturities of investments;  Cash and Investments categorized by authorized investments, except for LAIF which will be provided quarterly and show yield and maturity;  Comparison of month end actual holdings to Investment Policy limitations;  Current year and prior year monthly history of cash and investments for trend analysis;  Balance Sheet; 14 191  Distribution of cash and investment balances by fund;  A year to date historical cash flow analysis and projection for the next six months; and  A two-year list of historical interest rates.

XVI FINANCIAL ASSETS AND INVESTMENT ACTIVITY NOT SUBJECT TO THIS POLICY

The City’s Investment Policy does not apply to the following:

 Cash and Investments raised from Conduit Debt Financing  Funds held in trust in the City’s name in pension or other post-retirement benefit programs  Cash and Investments held in lieu of retention by banks or other financial institutions for construction projects  Short or long term loans made to other entities by the City or Agency Short term (Due to/from) or long term (Advances from/to) obligations made either between the City and its funds or between the City and Agency

XVII INVESTMENT OF BOND PROCEEDS

The City’s Investment Policy shall govern bond proceeds and bond reserve fund investments. California Code Section 5922 (d) governs the investment of bond proceeds and reserve funds in accordance with bond indenture provisions which shall be structured in accordance with the City’s Investment Policy.

Arbitrage Requirement - The US Tax Reform Act of 1986 requires the City to perform arbitrage calculations as required and return excess earnings to the US Treasury from investments of proceeds of bond issues sold after the effective date of this law. These arbitrage calculations may be contracted with an outside source to provide the necessary technical assistance to comply with this regulation. Investable funds subject to the 1986 Tax Reform Act will be kept segregated from other funds and records will be kept in a fashion to facilitate the calculations.

The City’s investment position relative to the new arbitrage restrictions is to continue pursuing the maximum yield on applicable investments while ensuring the safety of capital and liquidity. It is the City's position to continue maximization of yield and to rebate excess earnings, if necessary.

XVIII INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA

The Investment Advisory Board (IAB) is a standing board composed of five members from the public that are appointed by the City Council. Background information will be requested and potential candidates must agree to a background check and verification. On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at any time if a change in circumstances warrants, each board member will provide the City Council with a disclosure statement which identifies any matters that have a bearing on the appropriateness of that member’s service on the board. All board members shall report annually to the City Clerk on Form 700, Statement of Economic Interests, any activities, interests, or relationships that may be, or have the appearance of, a conflict of interest.

15 192 The IAB must meet at least quarterly, but usually meets monthly, to:

 Review at least annually the City’s Investment Policy and recommend appropriate changes;

 Review monthly treasury report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations;

 Receive and consider other reports provided by the City Treasurer;

 Meet with the independent auditor after completion of the annual audit of the City’s financial statements, and receive and consider the auditor’s comments on auditing procedures, internal controls and findings for cash and investment activities; and

 Serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers.

The IAB will report to the City Council after each meeting either in person or through correspondence at a regular City Council meeting. See Appendix B: “Investment Advisory Board Provisions.”

XIX INVESTMENT POLICY ADOPTION

The City’s Investment Policy will be reviewed annually by the City’s Investment Advisory Board and the City Treasurer. The Investment Advisory Board will forward the Investment Policy with any revisions to the City Manager and City Attorney for their review and comment. A joint meeting will be held with the Investment Advisory Board, City Manager, City Attorney, and City Treasurer to review the Investment Policy and any comments prior to submission to the City Council for their consideration. The Investment Policy shall be adopted by resolution of the City Council annually before the end of June of each year.

16 193 CITY OF LA QUINTA Appendix A SUMMARY OF PERMISSIBLE DEPOSITS AND INVESTMENTS

The City Treasurer will be permitted to invest in the following types of investments subject to the maximum percentage allocation limits and bid process requirements. All maturities must be less than or equal to the maximum maturity allowed.

City State Maximum Maximum Allocation City Bid City Credit Permissible Deposits and Investments Allocation Maximum Process Restrictions Quality (Footnote Surplus Maturity 1) Funds

1 Checking & Savings Accounts (FDIC Insured) & Sweep Accounts 85% Portfolio 100% Portfolio Sweep Account: U.S. Treasuries and/or GSE's Current/On Demand FDIC Insured

Interest bearing active bank deposits – non FDIC insured collateralized Non-FDIC Insured 2 by 110% of eligible securities 60% Portfolio 100% Portfolio $40,000,000 per bank Current /on Demand

2 Certificate of Deposit 60% Portfolio 100% Portfolio <= $250,000 including interest per institution 5 years FDIC Insured

2 Negotiable Certificate of Deposit 30% Portfolio 100% Portfolio <= $250,000 including interest per institution 5 years FDIC Insured

U.S. Treasury Bills, Notes and Bonds, and Government National 3 100% Portfolio 100% Portfolio <=$30,0000,000 maturing 3-5 Yrs. 3 years Mortgage Association (GNMA) securities

U.S. Government Agency Securities and Federal Government 3 Securities (except collateralized mortgage obligations (CMO's) or 100% Portfolio structured notes which contain embedded rate options): - Federal National Mortgage Association (FNMA) $20,000,000 5 years - Federal Home Loan Bank Notes & Bonds (FHLB) $25,000,000 5 years - Federal Farm Credit Bank (FFCB) $30,000,000 5 years - Federal Home Loan Mortgage Corporation (FHLMC) $20,000,000 5 years

Prime Commercial Paper including Temporary Liquidity Guarantee 25% Portfolio S&P (A-1) 3 15% Portfolio $5,000,000 per issuer maximum 90 days Program (TLGP) 270 Days Moody’s (P-1)

$50,000,000 4 Local Agency Investment Fund (LAIF) $50,000,000 30% Portfolio Current/On Demand per account

Rated AAA by 2 of 3

Money market mutual funds regulated by the SEC that consist only of agencies; Current / 5 US Treasury Securities or GSE's and maintain a par value of $1 per 20% Portfolio 20% Portfolio Maintain $1 per share par value assets>=$500 On Demand share million; SEC reg’d

>5 Yrs.

S & P rated AA or 6 Corporate Notes 10% Portfolio 30% Portfolio $5,000,000 max per issuer 3 years better

S&P rated AA or 6 Corporate Notes - Temporary Liquidity Guarantee Program (TLGP) 20% Portfolio 30% Portfolio $10,000,000 max per issuer 3 years better.

Professionally Managed Account SEC Reg’d; E&O, 10% Portfolio 100% Portfolio Requires Approved RFP 3 years 7 Fidelity Insured

At least long term 8 Local Agency Bonds/California Agency Obligations 100% 30% <=^$30,000,0000 10 years “A, A2, A” rating

17 194

Appendix A (continued) Bid Unauthorized Investments Process

The City Treasurer will not be permitted to invest in the following types of investments (see Footnote Periodically conduct a bid process at least every four (4) years or sooner if considered necessary for banking and/or 2 and “State Code Permitted Deposits And Investments Not Authorized By The City’s Investment 1 custodian services. Since banking services and custodian services are so closely related it is anticipated that the bid Policy”, below). process would include the scope of both services. - Repurchase Agreements - Bankers Acceptances The financial institutions can be either state or federally chartered and must be insured by the Federal Deposit - Mutual Funds other than money market mutual funds 2 Insurance Corporation (FDIC). - Preferred and Common Stock

- State Indebtedness At least two bids from broker/dealers that qualify under Securities and Exchange Commission Rule 15C3-1 listed on - Asset Backed Securities 3 the “Listing of Approved Financial Institutions” in the appendices. - Reverse Repurchase Agreements - Derivatives

The above list of unauthorized deposits and investments is not meant to be all-inclusive. Only 4 City Council Approval. those deposits and investments listed in the “Permissible Deposits and Investments” section of the Policy are permissible.

Money Market mutual funds must comply with Government Code Section 53601(k). The fund must be registered by 5 the SEC and must include marking the portfolio to market daily.

At least two bids from broker/dealers that qualify under Securities and Exchange Commission Rule 15C3-1 listed on 6 the “Listing of Approved Financial Institutions” in the appendices.

The professional portfolio management firm (PPMF) will be approved by the City Council based upon the City 7 Treasurer’s recommendation pursuant to completion of a request for proposal (RFP) as outlined in the appendices. See also Footnote 2.

Initial offerings the Treasurer may purchase directly from Bond Underwriter, secondary issues follow bid process 8 3.

The City has imposed a maximum limitation based upon the total portfolio of investments. Total portfolio investments are all cash and investments, including bond proceeds. In addition, the State has adopted limits on the Footnote 1 investment of surplus funds.

The City may engage the services of a professional portfolio management firm which may invest in Bankers Acceptances, Mutual Funds, and Asset Backed Securities not otherwise permissible under the City’s Investment Footnote 2 Policy.

18 195 Appendix B

City of La Quinta Municipal Code Chapter 2.70

INVESTMENT ADVISORY BOARD PROVISIONS

Sections: 2.70.010 General Rules Regarding Appointment. 2.70.020 Board Meetings. 2.70.030 Board Functions.

2.70.010 General rules regarding appointment A. Except as set out below, see Chapter 2.06 for General Provisions. B. The Investment Advisory Board (the”board”) is a standing board composed of five (5) members from the public that are appointed by city council. C. Applicants for the board should have a background in finance, preferably with knowledge and/or experience in markets, controls and accounting for securities. Background information will be requested and potential candidates must agree to a background check and verification. D. On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at any time if a change in circumstances warrants, each board member will provide the City Council with a disclosure statement which identifies any matters that have a bearing on the appropriateness of that member’s service on the board. Such matters may include, but are not limited to, changes in employment, changes in residence, or changes in clients. E. To promote continuity, the expiration of the terms of the members of the board shall be staggered. The term of service is three years, with one or two terms expiring each year.

2.70.020 Board meetings. The Board usually will meet monthly, but this schedule may be extended to quarterly meetings upon the concurrence of the Board and the City Council. The specific meeting dates will be determined by the Board Members and meetings may be called for on an as needed basis.

2.70.030 Board functions. A. The principal functions of the Board are: (1) review at least annually the City’s Investment Policy and recommend appropriate changes; (2) review monthly Treasury Report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with the independent auditor after completion of the annual audit of the City’s financial statements, and receive and consider the auditor’s comments on auditing procedures, internal controls, and findings for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers. B. The Board will report to the City Council after each meeting either in person or through correspondence at a regular City Council meeting.

196 Appendix C

City of La Quinta Municipal Code Chapter 3.08

INVESTMENT OF MONEYS AND FUNDS

Sections:

3.08.010 Investment of city moneys and deposit of securities. 3.08.020 Authorized investments. 3.08.030 Sales of securities. 3.08.040 City bonds. 3.08.050 Reports. 3.08.060 Deposits of securities. 3.08.070 Trust fund administration.

3.08.010 Investment of city moneys and deposit of securities. Pursuant to, and in accordance with, and to the extent allowed by, Sections 53607 and 53608 of the Government Code, the authority to invest and reinvest moneys of the city, to sell or exchange securities, and to deposit them and provide for their safekeeping, is delegated to the city treasurer. (Ord. 2 § 1 (part), 1982)

3.08.020 Authorized investments. Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is authorized to purchase, at their original sale or after they have been issued, securities which are permissible investments under any provision of state law relating to the investing of general city funds, including but not limited to Sections 53601 and 53635 of the Government Code, as said sections now read or may hereafter be amended, from moneys in his custody which are not required for the immediate necessities of the city and as he may deem wise and expedient, and to sell or exchange for other eligible securities and reinvest the proceeds of the securities so purchased. (Ord. 2 § 1 (part), 1982)

3.08.030 Sales of Securities. From time to time the city treasurer shall sell the securities in which city moneys have been invested pursuant to this chapter, so that the proceeds may, as appropriate, be applied to the purchase for which the original purchase money may have been designated or placed in the city treasury. (Ord.2 § l (part),

3.08.040 City bonds. Bonds issued by the city and purchased pursuant to this chapter may be cancelled either in satisfaction of sinking fund obligations or otherwise if proper and appropriate; provided, however, that the bonds may be held uncancelled and while so held may be resold. (Ord. 2 § 1 (part), 1982)

3.08.050 Reports. 20

197 The city treasurer shall make a monthly report to the city council of all investments made pursuant to the authority delegated in this chapter. (Ord. 2 § 1 (part), 1982)

3.08.060 Deposits of securities. Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is authorized to deposit for safekeeping, the securities in which city moneys have been invested pursuant to this chapter, in any institution or depository authorized by the terms of any state law, including but not limited to Section 53608 of the Government Code as it now reads or may hereafter be amended. In accordance with said section, the city treasurer shall take from the institution or depository a receipt for the securities so deposited and shall not be responsible for the securities delivered to and receipted for by the institution or depository until they are withdrawn therefrom by the city treasurer. (Ord. 2 § 1 (part), 1982

3.08.070 Trust fund administration. Any departmental trust fund established by the city council pursuant to Section 36523 of the Government Code shall be administered by the city treasurer in accordance with Section 36523 and 26524 of the Government code and any other applicable provisions of law. (Ord. 2 § 1 (part), 1982)

198 Appendix D

SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES

Function Responsible Parties

Develop and Recommend Modifications Investment Advisory Board to City’s Formal Investment Policy and City Treasurer

Review City’s Investment Policy City Manager and Recommend City Council Action and City Attorney

Adopt Formal Investment Policy City Council

Implement Formal Investment Policy City Treasurer

Review Financial Institutions & Select Investments City Treasurer

Acknowledge Investment Selections City Manager or his/her designee

Execute Investment transactions City Treasurer or City Manager

Confirm Wires (if applicable) Accounting Manager or Financial Services Assistant

Record Investment Transactions in City’s Accounting Manager or Accounting Records Financial Services Assistant

Investment Verification (match broker confirmation City Treasurer and Financial to City investment records) Services Assistant

Reconcile Investment Records to Accounting Records and Bank Statements Financial Services Assistant

Reconcile Investment Records to Treasurers Report of Investments Accounting Manager

Security of Investments at City Accounting Manager or Senior Secretary

Security of Investments outside City Third Party Custodian

Review Internal Control Procedures External Auditor

199 Appendix E

LISTING OF APPROVED FINANCIAL INSTITUTIONS

1. Banking Services - Wells Fargo Bank, Government Services, Los Angeles, CA (Banking Services)

Rabobank N.A., Government Banking Group, Roseville, CA (Collateralized Bank Deposits)

2. Custodian Services - Bank of New York/Mellon

3. Deferred Compensation - International City/County Management Association Retirement Corporation

4. Broker/Dealer Services - Banc of America Securities/Merrill Lynch Morgan Stanley CitiGroup First Empire Securities

5. Government Pool - State of California Local Agency Investment Fund

6. Bond Trustees - 1996 Lease Revenue Bonds – US Bank 1998 RDA Project Area 1&2 – US Bank 2001 RDA Project Area 1 – US Bank 2002 RDA Project Area 1 – US Bank 2003 RDA Project Area 1 – US Bank 2004 Local Agency Rev – US Bank 2011 RDA Project Area 2 – US Bank 2011 Fin Auth Housing 1&2 – US Bank 2013 Successor Agency – US Bank Assessment Districts – US Bank

No Changes to this listing may be made without City Council approval

200 Appendix F

BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION

1. Name of Firm:______

2. Address:______

3. Telephone: (___) ______(___ )______

4. Broker's Representative to the City (attach resume): Name:______Title:______Telephone: (___)______

5. Manager/Partner-in-charge (attach resume): Name:______Title:______Telephone:______

6. List all personnel who will be trading with or quoting securities to City employees (attach resume) Name:______Title:______Telephone: (___)______(___)______

7. Which of the above personnel have read the City's Investment Policy? ______

8. Which instruments are offered regularly by your local office? (Must equal 100%)

_____% U.S. Treasuries _____% Repos _____% BA's _____% Reverse Repos _____% Commercial Paper _____% CMO’s _____% CD’s _____% Derivatives _____% Mutual Funds _____% Stocks/Equities _____% Agencies (specify): _____% Other (specify): ______

9. References -- Please identify your most directly comparable public sector clients in our geographical area.

Entity ______Entity ______Contact ______Contact ______

201 Telephone (____)______Telephone (___)______Client Since______Client Since ______

10. Have any of your clients ever sustained a loss on a securities transaction arising from a misunderstanding or misrepresentation of the risk characteristics of the instrument? If so, explain. ______

11. Has your firm or your local office ever been subject to a regulatory or state/ federal agency investigation for alleged improper, fraudulent, disreputable or unfair activities related to the sale of securities? Have any of your employees been so investigated? If so, explain. ______

12. Has a client ever claimed in writing that you were responsible for an investment loss? Yes______No______If yes, please provide action taken______

Has a client ever claimed in writing that your firm was responsible for an investment loss? Yes______No______If yes, please provide action taken______

Do you have any current or pending complaints that are unreported to FINRA? Yes______No______If yes, please provide action taken______

Does your firm have any current, or pending complaints that are unreported to FINRA? Yes______No______If yes, please provide action taken______

13. Explain your clearing and safekeeping procedures, custody and delivery process. ______

Who audits these fiduciary responsibilities?______

Latest Audit Report Date______25

202

14. How many and what percentage of your transactions failed? Last month? ______% $______Last year? ______% $______

15. Describe the method your firm would use to establish capital trading limits for the City of La Quinta.______

16. Is your firm a member in the S.I.P.C. insurance program? Yes______No______If yes, explain primary and excess coverage and carriers.______

17. What portfolio information, if any, do you require from your clients?______

18. What reports and transaction confirmations or any other research publications will the City receive?______

19. Does your firm offer investment training to your clients? Yes______No______

20. Does your firm have professional liability insurance? Yes______No______If yes, please provide the insurance carrier, limits and expiration date.______

21. Please list your FINRA/NASD Registration Number______

22. Do you have any relatives who work at the City of La Quinta? Yes______No______If yes, Name and Department______

23. Do you maintain an office in California? Yes______No______

24. Do you maintain an office in La Quinta or Riverside County? Yes______No______

25. Please enclose the following:  Latest audited financial statements;  Samples of reports, transaction confirmations and any other research/publications the City will receive;  Samples of research reports and/or publications that your firm regularly provides to clients; and  Complete schedule of fees and charges for various transactions.

203 ***CERTIFICATION***

I hereby certify that I have personally read the Statement of Investment Policy of the City of La Quinta, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of La Quinta. All sales personnel will be routinely informed of the City’s investment objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable risks associated with financial transactions conducted with our firm.

By signing this document the City of La Quinta is authorized to conduct any and all background checks.

Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of my knowledge.

Broker Representative______Date______Title______Sales Manager and/or Managing Partner*______Date______Title______

204 Appendix G Request for Proposals Professional Portfolio Management Firm City of La Quinta, CA

The City of La Quinta, CA is soliciting Requests for Proposals (RFP) from interested firms for the provision of a discretionary investment management services for City of La Quinta, CA. The portfolio to be managed of the invested assets is will be approximately 10% of the City’s investment portfolio and will be invested between 0 – 3 years.

The investment of City of La Quinta, CA’s funds is guided by the applicable State statutes and the City of La Quinta, CA’s investment policy. A copy of the investment policy is attached for your information.

Questions regarding this RFP should be directed to:

Name: Rita Conrad Title: Finance Director/Treasurer City of: La Quinta, CA Address: 78-495 Calle Tampico City, State, Zip Code: La Quinta, CA 92253 Phone Number: (760)777-7150

I. CRITERIA FOR EVALUATION AND SELECTION

 Experience of the firm in providing services to public sector entities of similar size and with similar investment objectives;  Professional experience and qualifications of the individuals assigned to the account;  Portfolio management resources, investment philosophy and approach;  Responsiveness to the RFP, communicating an understanding of the overall program and services required;  Reporting capabilities;  Fees.

II. SELECTION TIMETABLE

A. [Month, Day and Year] Proposals due by [Time] PST.

B. [Month, Day and Year] Proposals evaluated: to be determined

C. [Month, Day and Year] [City of La Quinta, CA] [Board/Council] approves selection and awards contract.

III. FORMAT FOR PROPOSALS

Please format your response to this RFP in the following manner:

A. Organization

28 205 1. Describe your organization, date founded, ownership and other business affiliations. Provide number and location of affiliated offices. Specify the number of years your organization has provided investment management service.

2. Describe your firm’s revenue sources (e.g., investment management, institutional research, etc.) and comment on your firm’s financial condition.

3. Within the past three years, have there been any significant developments in your organization (e.g., changes in ownership, new business ventures)? Do you expect any changes in the near future?

4. Describe any U.S. Securities and Exchange Commission (SEC) censures or litigation involving your organization, any officer, or employee at any time in the last ten years.

5. Describe the firm’s fiduciary liability and/or errors and omissions insurance coverage. Include dollar amount of coverage.

B. Personnel

1. Identify the number of professionals employed by your firm by classification.

2. Provide an organization chart showing function, positions, and titles of all the professionals in your organization.

3. Provide biographical information on investment professionals that will be involved in the decision-making process for our portfolio, including number of years at your firm. Identify the person who will be the primary portfolio manager assigned to the account.

4. Describe your firm’s compensation policies for investment professionals and address any incentive compensation programs.

C. Assets Under Management

1. Summarize your institutional investment management asset totals by category for your latest reporting period in the following table:

Other Restrictive Number Number of Operating Funds Funds of Clients Clients

Governmental ______$______$______

Governmental Pension ______$______N/A N/A

Non Governmental ______$______N/A N/A Pension

29 206 Corporate ______$______N/A N/A

High Net Worth Client ______$______N/A N/A

Endowmental/Foun- ______$______N/A N/A dation

2. Provide the number of separate accounts whose portfolios consist of operating funds.

3. List in the following table the percentage by market value of aggregate assets under all governmental accounts under management for your latest reporting period:

Type of Asset Percent by Market Value U.S. Treasury securities Federal Agency obligations Corporate securities rated AAA-AA Corporate securities rated A Corporate securities rated BBB or lower Other (specify______)

4. Describe the procedures that your firm has in place to address the potential or actual credit downgrade of an issuer and to disclose and advise a client of the situation.

5. Provide data on account/asset growth over the past five years. Indicate the number of government accounts gained and the number of government accounts lost.

6. List your five governmental largest clients. Identify those that are exclusively operating fund relationships and/or those that are other relationships (e.g., bond fund, retirement fund). 7. Provide a copy of the firm’s Form ADV, Parts I and II (including all schedules).

8. Provide proof of State of California Registration, if your firm is not eligible for SEC registration.

9. Provide a sample contract for services.

30 207 D. Philosophy/Approach

1. Describe your firm’s investment philosophy for public clients, including your firm’s philosophy regarding average duration, maturity, investment types, credit quality, and yield.

2. Describe in detail your investment process, as you would apply it to City of La Quinta, CA’s portfolio.

3. What are the primary strategies for adding value to portfolios?

4. Describe the process you would recommend for establishing the investment objectives and constraints for this account.

5. Describe in detail your process of credit risk management, including how you analyze credit quality, monitor credits on an ongoing basis, and report credit to governmental accounts.

6. Describe your firm’s trading methodology.

7. Describe your firm’s decision-making process in terms of structure, committees, membership, meeting frequency, responsibilities, integration of research ideas, and portfolio management.

8. Describe your research capabilities as they would pertain to governmental accounts. What types of analysis do you use?

9. Describe the firm’s approach to managing relationships with the broker-dealer community.

E. Portfolio Management

1. Are portfolios managed by teams or by one individual?

2. What is the average number of accounts handled per manager?

3. Which professional staff member will be the primary client contact for City of La Quinta, CA?

4. How frequently are you willing to meet with us?

5. Describe procedures used to ensure that portfolios comply with client investment objectives, policies, and bond resolutions.

F. Fees Charged

1. Please include a copy of your firm’s fee schedule applicable to this RFP.

2. Identify any expenses that would not be covered through this fee structure and would be required in order to implement the firm’s program.

31 208

3. Is there a minimum annual fee?

G. Performance Reporting

1. Please report on all accounts under $100 million.

2. Please provide performance history for governmental accounts for the last five years.

3. Please provide risk measurements for governmental accounts for the last five years.

4. Indicate whether your returns are calculated and compiled in accordance with the Association for Investment Management and Research (AIMR/CFA Institute) standards.

5. Do your reports conform to the State of California reporting standards? Are you willing to customize your reports to meet our specifications?

6. How will you notify us of investment transactions?

7. Are confirmations of investment transactions sent directly by the broker/dealer to the client?

8. Do your reports include rating information on investments which is required by GASB 40?

H. References

Provide a list of at least five (5) client references in California. References should be public agencies with portfolio size and investment objectives similar to City of La Quinta, CA. Include length of time managing the assets, contact name, and phone number.

I. Insurance Requirements

Exhibit A defines the insurance requirements that will need to be met prior to the [Board/Council]’s approval of any agreement for services.

J. Submittal of proposals

1. Seven (7) copies of the proposal shall be submitted in a sealed envelope bearing the caption RFP for (City of La Quinta, CA) and addressed to:

City of La Quinta, CA 78-495 Calle Tampico La Quinta, CA 92253 Attention: Rita Conrad, Finance Director/Treasurer

32 209 2. Proposal must be received no later than [Time] PST on [Month, Day, and Year].

3. Proposals should be verified before submission. The City of La Quinta, CA shall not be responsible for errors or omissions on the part of the respondent in preparation of a proposal. The City of La Quinta, CA reserves the right to reject any and all proposals, to wave any irregularities, or informalities in the proposals, and to negotiate modifications to any proposal.

Enclosures: Investment Policy Treasurers Report

33 210 Appendix H City of La Quinta Permissible Investment Chart – Professional Portfolio Management Firm

(1) (2) (3) (4) (5) (6) (7) (8)

California Credit Allowed per Maximum Authorized Investment Allowed per Government Investment Category Rating Comments Professional Portfolio Maturity Limits (% of Portfolio) City Policy Code Section Limits Management Firm 53601(a) Local Agency Bonds 5 Years None None No No 53601(c) State of California Obligations 5 Years None None No No 53601(d) CA Local Agency Obligations 5 Years None Multiple No No 53601(i) Repurchase Agreements 1 Year None None No No 53601(i) Reverse Repurchase Agreements 92 Days 20% of the base value of the portfolio None No No 53601(i) Securities Lending Agreements 92 Days 20% of the base value of the portfolio None No No 53684 County Pooled Investments None None None No No 53632 Interest bearing active deposits None None None Collateralized 110% Yes Yes 53601(f) Bankers Acceptances 180 Days 40% None “AA” or better No Yes 53601(h) Negotiable CD’s 5 Years 30% None Yes Yes 53601(k) Mutual Funds None 20% Multiple No Yes 53601(n) Asset Backed Securities 5 Years 20% AA No Yes Cash and Equivalents None None None Yes Yes 16429.1 LAIF None None None Yes No 53601(b) US Treasuries 5 Years None None Yes Yes 53601(e) US Agencies 5 Years None None Yes Yes 53601(g), 53635 Commercial Paper 270 Days 25% of portfolio A-1 / P-1 / F-1 Yes Yes 53601(k) Medium Term Notes 5 Years 30% A Yes Yes Money Market Mutual Funds None 20% Multiple Yes Yes 53601(m) Time Deposits 5 Years None None Yes Yes Collateralized Bank Deposits 5 Years None None Yes Yes (including non-negotiable CD’s)

Source of Columns (1) through (5) - Investment: Investment Portfolio Reporting Practices CA Debt and Investment Advisory Commission.

Note: The Professional Portfolio management Firm (PPMF) is not required to adhere to the City’s buy and hold policy and does not need City Manager or City Treasurer approval to make permissible deposits and investments as detailed in column (8).

211 Appendix I

Investment Management Process and Risk

Except as provided for in Section 27000.3, Government Code Section 53600.3 declares as a trustee each person, treasurer, or governing body authorized to make investment decisions on behalf of local agencies. As trustees are subject to the prudent investor standard. These persons shall act with care, skill, prudence, and diligence under the circumstances then prevailing when investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing funds. Section 53600.5 further stipulates that the primary objective of any person investing public funds is to safeguard principal; secondly, to meet liquidity needs of the depositor; and lastly, to achieve a return or yield on invested funds (Government Code Section 27000.5 specifies the same objectives for county treasurers and board of supervisors).

Risk is inherent throughout the investment process. There is investment risk associated with any investment activity and opportunity risk related to inactivity. Market risk is derived from exposure to overall changes in the general level of interest rates while credit risk is the risk of loss due to the failure of the insurer of a security. The market value of a security varies inversely with the level of interest rates. If an investor is required to sell an investment with a five percent yield in a comparable seven percent rate environment, that security will be sold at a loss. The magnitude of that loss will depend on the amount of time until maturity.

Purchasing certain allowable securities with a maturity of greater than five years requires approval of the governing board (see Government Code Section 53601). Part of that approval process involves assessing and disclosing the risk and possible volatility of longer-term investments

Another element of market risk is liquidity risk. Instruments with unique call features or special structures, or those issued by little known companies, are examples of “story bonds” and are often thinly traded. Their uniqueness often makes finding prospective buyers in a secondary market more difficult and, consequently, the securities' marketability and price are discounted. However, under certain market conditions, gains are also possible with these types of securities.

Default risk represents the possibility that the borrower may be unable to repay the obligation as scheduled. Generally, securities issued by the federal government and its agencies are considered the most secure, while securities issued by private corporations or negotiable certificates of deposit issued by commercial banks have a greater degree of risk. Securities with additional credit enhancements, such as bankers acceptances, collateralized repurchase agreements and collateralized bank deposits are somewhere between the two on the risk spectrum.

The vast majority of portfolios are managed within a buy and hold policy. Investments are purchased with the intent and capacity to hold that security until maturity. At times, market forces or operations may dictate swapping one security for another or selling a security before maturity. Continuous analysis and fine tuning of the investment portfolio are considered prudent investment management.

The Government Code contains specific provisions regarding the types of investments and practices permitted after considering the broad requirement of preserving principal and maintaining liquidity before seeking yield. These provisions are intended to promote the use of reliable, diverse, and safe investment instruments to better ensure a prudently managed portfolio worthy of public trust.

Chapter II. Fund Management Local Agency Investment Guidelines 2010 Issued by California Debt and Investment Advisory Commission

35 212 Appendix J GLOSSARY (Adopted from the Municipal Treasurers Association)

The purpose of this glossary is to provide the reader of the City of La Quinta investment policies with a better understanding of financial terms used in municipal investing.

AGENCIES: Federal agency securities and/or introductory material, and a detailed Statistical Government-sponsored enterprises. Section.

ASKED: The price at which securities are offered. CONDUIT FINANCING: A form of Financing in which a government or a government agency BANKERS’ ACCEPTANCE (BA): A draft or bill or lends its name to a bond issue, although it is exchange accepted by a bank or trust company. acting only as a conduit between a specific project The accepting institution guarantees payment of and bond holders. The bond holders can look only the bill, as well as the issuer. to the revenues from the project being financed for repayment and not to the government or BID: The price offered by a buyer of securities. agency whose name appears on the bond. (When you are selling securities, you ask for a bid.) See Offer. COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the bondholder on BROKER: A broker brings buyers and sellers the bond’s face value. (b) A certificate attached together for a commission. to a bond evidencing interest due on a payment date. CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a DEALER: A dealer, as opposed to a broker, acts as certificate. Large-denomination CD’s are typically a principal in all transactions, buying and selling negotiable. for his own account.

COLLATERAL: Securities, evidence of deposit or DEBENTURE: A bond secured only by the general other property which a borrower pledges to credit of the issuer. secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of DELIVERY VERSUS PAYMENT: There are two public monies. methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery COMMERCIAL PAPER: Short-term unsecured versus payment is delivery of securities with an promissory notes issued by a corporation to raise exchange of money for the securities. Delivery working capital. These negotiable instruments versus receipt is delivery of securities with an are purchased at a discount to par value or at par exchange of a signed receipt for the securities. value with interest bearing. Commercial paper is issued by corporations such as General Motors DERIVATIVES: (1) Financial instruments whose Acceptance Corporation, IBM, Bank America, etc. return profile is linked to, or derived from, the movement of one or more underlying index or COMPREHENSIVE ANNUAL FINANCIAL REPORT security, and may include a leveraging factor, or (CAFR): The official annual report for the City of (2) financial contracts based upon notional La Quinta. It includes five combined statements amounts whose value is derived from an for each individual fund and account group underlying index or security (interest rates, foreign prepared in conformity with GAAP. It also exchange rates, equities or commodities). includes supporting schedules necessary to demonstrate compliance with finance-related DISCOUNT: The difference between the cost price legal and contractual provisions, extensive of a security and its maturity when quoted at 36 213 lower than face value. A security selling below 3. FLBs (Federal Land Bank Bonds) - Long-term original offering price shortly after sale also is mortgage credit provided to farmers by Federal considered to be at a discount. Land Banks. These bonds are issued at irregular times for various maturities ranging DISCOUNT SECURITIES: Non-interest bearing from a few months to ten years. The money market instruments that are issued a minimum denomination is $1,000. They carry discount and redeemed at maturity for full face semi-annual coupons. Interest is calculated on value, e.g., U.S. Treasury Bills. a 360-day, 30 day month basis.

DIVERSIFICATION: Dividing investment funds 4. FFCBs (Federal Farm Credit Bank) - Debt among a variety of securities offering instruments used to finance the short and independent returns. intermediate term needs of farmers and the national agricultural industry. They are issued FEDERAL CREDIT AGENCIES: Agencies of the monthly with three- and six-month maturities. Federal government set up to supply credit to The FFCB issues larger issues (one to ten various classes of institutions and individuals, year) on a periodic basis. These issues are e.g., S&L’s, small business firms, students, highly liquid. farmers, farm cooperatives, and exporters. 5. FICBs (Federal Intermediate Credit Bank 1. FNMAs (Federal National Mortgage Debentures) - Loans to lending institutions Association) - Like GNMA was chartered used to finance the short-term and under the Federal National Mortgage intermediate needs of farmers, such as Association Act in 1938. FNMA is a federal seasonal production. They are usually issued corporation working under the auspices of the monthly in minimum denominations of $3,000 Department of Housing and Urban with a nine-month maturity. Interest is Development (HUD). It is the largest single payable at maturity and is calculated on a 360- provider of residential mortgage funds in the day, 30-day month basis. United States. Fannie Mae, as the corporation is called, is a private stockholder-owned 6. FHLMCs (Federal Home Loan Mortgage corporation. The corporation’s purchases Corporation) - a government sponsored entity include a variety of adjustable mortgages and established in 1970 to provide a secondary second loans, in addition to fixed-rate market for conventional home mortgages. mortgages. FNMA’s securities are also highly Mortgages are purchased solely from the liquid and are widely accepted. FNMA Federal Home Loan Bank System member assumes and guarantees that all security lending institutions whose deposits are insured holders will receive timely payment of by agencies of the United States Government. principal and interest. They are issued for various maturities and in minimum denominations of $10,000. Principal 2. FHLBs (Federal Home Loan Bank Notes and and interest is paid monthly. Other federal Bonds) - Issued by the Federal Home Loan agency issues are Small Business Bank System to help finance the housing Administration notes (SBA’s), Government industry. The notes and bonds provide National Mortgage Association notes liquidity and home mortgage credit to savings (GNMA’s), Tennessee Valley Authority notes and loan associations, mutual savings banks, (TVA’s), and Student Loan Association notes cooperative banks, insurance companies, and (SALLIE-MAE’s). mortgage-lending institutions. They are issued irregularly for various maturities. The FEDERAL DEPOSIT INSURANCE minimum denomination is $5,000. The notes CORPORATION (FDIC): A federal agency that are issued with maturities of less than one insures bank deposits, currently up to year and interest is paid at maturity. $250,000 per deposit through December 31, 2013.

37 214 FEDERAL FUNDS RATE: The rate of interest at $50,000,000 for any agency. The City is which Fed funds are traded. This rate is currently restricted to a maximum of ten transactions per pegged by the Federal Reserve through open- month. It offers high liquidity because deposits market operations. can be converted to cash in 24 hours and no interest is lost. All interest is distributed to those FEDERAL HOME LOAN BANKS (FHLB): agencies participating on a proportionate share Government sponsored wholesale banks basis determined by the amounts deposited and (currently 12 regional banks) which lend funds the length of time they are deposited. Interest is and provide correspondent banking services to paid quarterly. The State retains an amount for member commercial banks, thrift institutions, reasonable costs of making the investments, not credit unions and insurance companies. The to exceed one-half of one percent of the earnings. mission of the FHLBs is to liquefy the housing related assets of its members who must purchase LIQUIDITY: A liquid asset is one that can be stock in their district Bank. converted easily and rapidly into cash without a substantial loss of value. In the money market, a FEDERAL OPEN MARKET COMMITTEE (FOMC): security is said to be liquid if the spread between Consists of seven members of the Federal bid and asked prices is narrow and reasonable size Reserve Board and five of the twelve Federal can be done at those quotes. Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent LOCAL GOVERNMENT INVESTMENT POOL (LGIP): member, while the other Presidents serve on a The aggregate of all funds from political rotating basis. The Committee periodically meets subdivisions that are placed in the custody of the to set Federal Reserve guidelines regarding State Treasurer for investment and reinvestment purchases and sales of Government Securities in the open market as a means of influencing the MARKET VALUE: The price at which a security is volume of bank credit and money. trading and could presumably be purchased or sold. FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and MASTER REPURCHASE AGREEMENT: A written consisting of a seven member Board of Governors contract covering all future transactions between in Washington, D.C., 12 regional banks and about the parties to repurchase--reverse repurchase 5,700 commercial banks that are members of the agreements that establishes each party’s rights in system. the transactions. A master agreement will often specify, among other things, the right of the GOVERNMENT NATIONAL MORTGAGE buyer-lender to liquidate the underlying securities ASSOCIATION (GNMA or Ginnie Mae): Securities in the event of default by the seller-borrower. influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, MATURITY: The date upon which the principal or commercial banks, savings and loan associations, stated value of an investment becomes due and and other institutions. Security holder is payable protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed MONEY MARKET: The market in which short-term by the FHA, VA or FMHM mortgages. The term debt instruments (bills, commercial paper, “pass-throughs” is often used to describe Ginnie bankers’ acceptances, etc.) are issued and traded. Maes. OFFER: The price asked by a seller of securities. LAIF (Local Agency Investment Fund) - A special (When you are buying securities, you ask for an fund in the State Treasury which local agencies offer.) See Asked and Bid. may use to deposit funds for investment. There is no minimum investment period and the OPEN MARKET OPERATIONS: Purchases and minimum transaction is $5,000, in multiples of sales of government and certain other securities in $1,000 above that, with a maximum balance of the open market by the New York Federal Reserve 38 215 Bank as directed by the FOMC in order to repurchase them at a fixed price on a fixed date. influence the volume of money and credit in the The security”bu yer” in effect lends the”seller” economy. Purchases inject reserves into the money for the period of the agreement, and the bank system and stimulate growth of money and terms of the agreement are structured to credit; sales have the opposite effect. Open compensate him for this. Dealers use RRP market operations are the Federal Reserve’s most extensively to finance their positions. Exception: important and most flexible monetary policy tool. When the Fed is said to be doing RRP, it is lending money that is increasing bank reserves. PORTFOLIO: Collection of all cash and securities under the direction of the City Treasurer, SAFEKEEPING: A service to customers rendered including Bond Proceeds. by banks for a fee whereby securities and valuables of all types and descriptions are held in PRIMARY DEALER: A group of government the bank's vaults for protection. securities dealers who submit daily reports of market activity and positions and monthly SECONDARY MARKET: A market made for the financial statements to the Federal Reserve Bank purchase and sale of outstanding issues following of New York and are subject to its informal the initial distribution. oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities SECURITIES & EXCHANGE COMMISSION: Agency broker-dealers, banks and a few unregulated created by Congress to protect investors in firms. securities transactions by administering securities legislation. QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from SEC RULE 15C3-1: See Uniform Net Capital Rule. the payment of any sales or compensating use or ad valorem taxes under the laws of this state, STRUCTURED NOTES: Notes issued by which has segregated for the benefit of the Government Sponsored Enterprises (FHLB, FNMA, commission eligible collateral having a value of SLMA, etc.) and Corporations which have not less than its maximum liability and which has imbedded options (e.g., call features, step-up been approved by the Public Deposit Protection coupons, floating rate coupons, and derivative- Commission to hold public deposits. based returns) into their debt structure. Their market performance is impacted by the fluctuation RATE OF RETURN: The yield obtainable on a of interest rates, the volatility of the imbedded security based on its purchase price or its current options and shifts in the shape of the yield curve. market price. This may be the amortized yield to maturity on a bond the current income return. SURPLUS FUNDS: Section 53601 of the California Government Code defines surplus funds as any REPURCHASE AGREEMENT (RP OR REPO): A money not required for immediate necessities of holder of securities sells these securities to an the local agency. The City has defined immediate investor with an agreement to repurchase them necessities to be payment due within one week. at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the TREASURY BILLS: A non-interest bearing discount period of the agreement, and the terms of the security issued by the U.S. Treasury to finance the agreement are structured to compensate him for national debt. Most bills are issued to mature in this. Dealers use RP extensively to finance their three months, six months or one year. positions. Exception: When the Fed is said to be doing RP, it is lending money that is increasing TREASURY BONDS: Long-term coupon-bearing bank reserves. U.S. Treasury securities issued as direct obligations of the U.S. Government and having REVERSE REPURCHASE AGREEMENTS (RRP or initial maturities of more than 10 years. RevRepo) - A holder of securities sells these securities to an investor with an agreement to 39 216 TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years.

UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

UNIFORM PRUDENT INVESTOR ACT: The State of California has adopted this Act. The Act contains the following sections: duty of care, diversification, review of assets, costs, compliance determinations, delegation of investments, terms of prudent investor rule, and application.

YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

40 217 ATTACHMENT 2

CITY OF LA QUINTA Investment Policy Fiscal Year 2014/20152015/2016

Table of Contents

Section Topic Page Executive Summary 2 I General Purpose 4 II Investment Policy 4 III Scope 4 IV Objectives 4  Safety of Principal  Provide Liquidity  Yield A Risk-Based Market Rate Of Return V Maximum Maturities 6 VI Prudence 6 VII Authority 6 VIII Ethics and Conflicts of Interest 7 IX Authorized Financial Dealers and Institutions 7  Broker/Dealers  Financial Institutions X Permissible Deposits and Investments 8 XI Investment Pools 12 XII Payment and Custody 13 XIII Interest Earning Distribution Policy 13 XIV Internal Controls and Independent Auditors 13 XV Reporting Standards 14 XVI Financial Assets and Investment Activity Not Subject to this Policy 15 XVII Investment of Bond Proceeds 15 XIII Investment Advisory Board - City of La Quinta 16 XIX Investment Policy Adoption 16

218 CITY OF LA QUINTA Investment Policy Fiscal Year 2014/20152015/2016

Executive Summary

The general purpose of this Investment Policy is to provide the rules and standards that must be followed in administering the City of La Quinta’s deposits and investments.

The City’s Investment Policy conforms to all state and local statutes and applies to all deposits and investments of the City of La Quinta (the “City).

The System of Internal Controls developed by the City Treasurer shall be reviewed annually by the independent auditors in connection with the annual audit of the City’s financial statements.

219  Certificates of Deposit;  Negotiable Certificates of Deposit;  U.S. Government Agency Securities and Federal Government Securities;  Prime Commercial Paper;  Local Agency Investment Fund (LAIF);  Money Market Mutual Funds;  Corporate Notes; and  Professionally Managed Accounts.

The Investment Policy shall be adopted by resolution of the La Quinta City Council on an annual basis. The Investment Policy will be adopted before the end of June of each year.

220 City of La Quinta Statement of Investment Policy July 1, 2014 2015through June 30, 20152016

Adopted by the City Council on June 17, 20145

I GENERAL PURPOSE

The general purpose of this document is to provide the rules and standards that must be followed in administering the City of La Quinta’s deposits and investments.

II INVESTMENT POLICY

III SCOPE

IV OBJECTIVES

The objectives of the City's investment activity, in order of priority and importance, are:

221

The City shall endeavor to preserve its investment principal by making only permissible deposits and investments, undertaken in a controlled manner to minimize the possibility of loss or misappropriation through malfeasance or otherwise. Investments not backed by the full faith and credit of the United States Government shall be diversified by allocating assets between different types of permissible investments, maturities, and issuers as a means to mitigate credit risk and interest rate risk.

The City’s Investment Policy does not specify a single benchmark as a goal or target yield for a rate of return on its investment portfolio. The portfolio’s rates of return will be

222 influenced by several factors, including actions by the Federal Reserve Board, the marketplace, and overall economic perceptions and conditions. These factors will not affect yield during the securities’ holding period because the City’s buy-and-hold policy fixes the securities’ yield at the time of purchase.

V MAXIMUM MATURITIES

Annually, the Treasurer shall project the amount of funds not expected to be disbursed within ten years. For FY2014/20152015/2016, the amount of such funds is projected to be $20 million. Funds up to that amount may be invested in U.S.Treasury notes and bonds, Local Agency Obligations, and California Local Agency Obligations maturing between 3 and 10 years. For all other funds, investments are limited to five years maximum maturity.

VI PRUDENCE

The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in Probate Code Sections 16045 through 16054.

VII AUTHORITY

The City Treasurer shall establish written procedures for the operation of the investment program consistent with the Investment Policy. Procedures should include reference to safekeeping, wire

223 transfer agreements, banking service contracts, and collateral/depository agreements. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this Investment Policy and the procedures established by the City Treasurer. The City Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The City Manager or his/her designee shall acknowledge in writing all purchases and sales of investments prior to their execution by the City Treasurer.

VIII ETHICS AND CONFLICTS OF INTEREST

IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS

224 The City Treasurer maintains a listing of financial institutions which are approved for investment purposes. All Broker/Dealers and financial institutions that provide investment services will be subject to City Council approval.

2. Financial Institutions will be required to meet the following criteria in order to receive City funds for deposit or investment (see Appendix E, “Listing of Approved Financial Institutions”):

a. Insurance - Public Funds shall be deposited only in financial institutions having accounts insured by the Federal Deposit Insurance Corporation (FDIC).

c. Disclosure - Each financial institution maintaining invested funds in excess of the FDIC insured amount shall furnish the City a copy of the most recent Call Report.

X PERMISSIBLE DEPOSITS AND INVESTMENTS

Permissible deposits and investments are summarized below. A more comprehensive list is included in Appendix A.

Interest bearing active bank deposits – non FDIC insured collateralized by Current / $40 million 60% of Portfolio 110% of eligible securities On Demand per bank

<= $250,000, Certificates of Deposit - FDIC Insured 60% of Portfolio 5 Years including interest

per institution

225 Permissible Investments and Limitations Maximum Maximum Restrictions (See Appendix A for Additional Information) Allocation Maturity <=$20,000,000 maturing 3-10 Yrs. Local Agency Bonds / California Local Agency Obligations 30% of Portfolio 10 Years Long term “A, A2, A” or better U.S. Government Agency Securities and Federal Government Securities $10 million per (except collateralized mortgage obligations (CMO’s) or structured notes purchase which contain embedded rate options): - Federal National Mortgage Association (FNMA) $20,000,000 5 Years 30% of Portfolio - Federal Home Loan Bank Notes & Bonds (FHLB) $25,000,000 5 Years - Federal Farm Credit Bank (FFCB) $30,000,000 5 Years - Federal Home Loan Mortgage Corporation (FHLMC) $20,000,000 5 years

Prime Commercial Paper including Temporary Liquidity Guarantee $5,000,000 per 15% of Portfolio 90 Days Program (TLGP) issuer maximum

Current / $50 million Local Agency Investment Fund (LAIF) 30% of Portfolio On Demand per account

Long-Term Scale S&P A1 AAA, AA+, AA, AA-, A+, A Moody’s P1 Aaa, Aa1, Aa2, Aa3, A1, A2 Fitch AAA, AA+, AA, AA-, A+, A

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 Certificates of Deposits Insured by the FDIC: The City Treasurer may waive collateralization of a deposit that is federally insured.

The City’s Investment Policy limits the percentage of Certificates of Deposit to 60% of the portfolio.

 The City’s Investment Policy does not allow investments in state indebtedness.

227 Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC) and Student Loan Marketing Association (SLMA). Non-publicly owned GSE’s include the Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Federal Land Bank (FLB) and Federal Intermediate Credit Bank (FICB).

The City’s Investment Policy allows investment only in securities of FNMA, FHLMC, FHLB and FFCB. For Fiscal Year 2014/20152015/2016, the maximum face amount per issuer is $20 million for FNMA and FHLMC, $25 million for FHLB and $30 million for FFCB. In addition, no more than 30% of the portfolio surplus may be invested in all GSE’s combined with a maximum $10 million face amount per purchase.

 Maximum 15% of the portfolio.  Maximum maturity of 90 days.  Maximum of $5 million per issuer.

These limitations are more restrictive than the State code which allows amounts of 25% of the total portfolio with maturities up to 270 days with no per-issuer limitations.

Corporate Notes - As authorized in Government Code Section 53601 (j), local agencies Formatted: Indent: Left: 0", Hanging: 0.5" may invest in corporate notes. The notes must be issued by corporations organized and

228 operating in the United States or by depository institutions licensed by the United States or any other state and operating in the United States. The City’s Investment Policy allows investment in corporate notes authorized by the Government Code with the following limitations:

This is more restrictive than the State code allowed amounts of 30% of the total portfolio with maturities up to five years with no per-issuer limitations.

Before engagement by the City and except as may be specifically waived or revised, the PPMF shall commit to adhere to the provisions of the City’s Investment Policy with the following exceptions:

XI INVESTMENT POOLS

There are three (3) types of investment pools:

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The City’s Investment Policy permits investment only in pools authorized in Section X.

XII PAYMENT AND CUSTODY

XIII INTEREST EARNING DISTRIBUTION POLICY

Interest earnings are generated from pooled investments and specific investments. The following provisions apply to the calculation and distribution of interest earnings.

a. Payment to the General Fund of an amount equal to the total annual bank service charges as incurred by the general fund for all operating funds as included in the annual operating budget.

b. Payment to the General Fund of a management fee equal to 5% of the annual pooled cash fund investment earnings.

c. Payment to each fund of an amount based on the average computed daily cash balance included in the common portfolio for the earning period.

2. Specific Investments - Specific investments purchased by a fund shall incur all earnings and expenses to that particular fund.

XIV INTERNAL CONTROLS AND INDEPENDENT AUDITOR

The City Treasurer shall establish a system of internal controls to accomplish the following objectives:

230 assurance that management of the investment function meets the City’s objectives.

The internal controls shall address the following:

 Control of collusion. Collusion is a situation where two or more employees are working in conjunction to defraud their employer.

 Custodial safekeeping. Securities purchased from any bank or dealer including appropriate collateral (as defined by State Law) shall be placed with an independent third party for custodial safekeeping.

XV REPORTING STANDARDS

The City Treasurer shall submit a monthly Treasurers Report to the City Council and the Investment Advisory Board that includes all cash and investments under the authority of the

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Treasurer. The Treasurer’s Report shall summarize cash and investment activity and changes in balances and include the following:

 A certification by the City Treasurer;  A listing of purchases and sales/maturities of investments;  Cash and Investments categorized by authorized investments, except for LAIF which will be provided quarterly and show yield and maturity;  Comparison of month end actual holdings to Investment Policy limitations;  Current year and prior year monthly history of cash and investments for trend analysis;  Balance Sheet;  Distribution of cash and investment balances by fund;  A year to date historical cash flow analysis and projection for the next six months; and  A two-year list of historical interest rates.

XVI FINANCIAL ASSETS AND INVESTMENT ACTIVITY NOT SUBJECT TO THIS POLICY

The City’s Investment Policy does not apply to the following:

XVII INVESTMENT OF BOND PROCEEDS

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XVIII INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA

The IAB must meet at least quarterly, but usually meets monthly, to:

 Review at least annually the City’s Investment Policy and recommend appropriate changes;

 Review monthly treasury report and note compliance with the Investment Policy and adequacy of cash and investments for anticipated obligations;

 Receive and consider other reports provided by the City Treasurer;

 Serve as a resource for the City Treasurer on matters such as proposed investments, internal controls, use or change of financial institutions, custodians, brokers and dealers.

The IAB will report to the City Council after each meeting either in person or through correspondence at a regular City Council meeting. See Appendix B: “Investment Advisory Board Provisions.”

XIX INVESTMENT POLICY ADOPTION

233 CITY OF LA QUINTA Appendix A SUMMARY OF PERMISSIBLE DEPOSITS AND INVESTMENTS