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Agenda_2016_6_14 Costa Mesa Sanitary District ... an Independent Special District AGENDA Michael Scheafer President Arthur Perry Vice President Robert Ooten Secretary Arlene Schafer Assistant Secretary James Ferryman Director Public Comments. Any member of the public may address the Board. Speakers on agenda items should identify themselves to the Deputy Clerk before the meeting so that their input can be provided at the time the item is considered. Speakers on non-agenda items will be heard under Public Comments. Pursuant to State law, the Board may not discuss or take action on non-agenda items except under special circumstances. Speakers must limit their remarks to three minutes or as decided upon by the Presiding Officer. The Presiding Officer reserves the right to declare any speaker out of order. Obtaining Agenda Materials: The public is entitled to copies of all documents that are made part of the agenda packet. If any document or other writing pertaining to an agenda item is distributed to all or a majority of the Board after the packet is prepared, a copy of that writing may be obtained at the District offices at 628 W. 19th Street, Costa Mesa, California. The Deputy Clerk of the District may be contacted at (949) 645-8400. In Compliance with ADA: Contact Noelani Middenway, (949) 645-8400, 48 hours prior to meeting if assistance is needed (28 CFR 35.102.35.104 ADA Title II). BOARD OF DIRECTORS STUDY SESSION 628 W. 19TH STREET, COSTA MESA, CA 92627 Tuesday, June 14, 2016 9:30 AM I.CALL TO ORDER II.ROLL CALL (If absences occur, consider whether to deem those absences excused based on facts presented for the absence - such determination shall be the permission required by law.) III.PUBLIC COMMENTS This time has been set aside for persons in the audience to make comments on items within the subject matter jurisdiction of the Costa Mesa Sanitary District that are not listed on this agenda. Members of the public will have the opportunity to address the Board of Directors about all other items on this agenda at the time those items are considered. Under the provisions of the Brown Act, the Board of Directors is prohibited from taking action on oral requests but may refer the matter to staff or to a subsequent meeting. The Board of Directors will respond after public comment has been received. Please state your name. Each speaker will be limited to four (4) continuous minutes. IV.ITEMS OF STUDY 1.Organics Recycling Tonnages – FY2015-16 Recommendation: That the Board of Directors receive and file the report. 2.3316 Alabama Circle - Oral Report Recommendation: That the Board of Directors receive an oral report from Code Enforcement Officer Ed Roberts. 3.Code Enforcement Officer Report - May 2016 Recommendation: That the Board of Directors receive and file the report. 4.Organics Recycling Behavioral Study - Final Report Recommendation: That the Board of Directors receive a presentation from study's author, Dr. Sally Geislar. 5.Organics Recycling Behavioral Study Recommendations & Plan Recommendation: That the Board of Directors give staff direction regarding the recommendations and plan for increasing participation in the Organics Recycling Program. 6.Adams Pump Station Electrical Improvements Recommendation: That the Board of Directors direct staff to bring back this item to the Board of Directors June 23, 2016 meeting for approval consideration. 7.APN 415-102-17 (Parcel North of 1580-1590 Scenic Avenue) – Request for Vacation /Abandonment of CMSD Sewer and Easement Recommendation: That the Board of Directors direct staff to bring back this item to the Board of Directors June 23, 2016 meeting to consider approving the following: 1. Accept the vacation in concept subject to the developer submitting a legal description and map of the Option 2 limits of vacation; and 2. Require the property owner to construct a new end of line sewer manhole at the northerly terminus of the remaining sewer and easement. 8.Joint Study with Mesa Water District – Optimum Government Structure Recommendation: That the Board of Directors direct staff to bring this item back on June 23, 2016 to consider appointing two directors and staff members to serve on Mesa Water’s Executive Committee and appropriate $15,000 to perform the study. 9.Future Study Session Items Recommendation: That the Board of Directors provide staff with direction on items to be placed on future study session agendas. V.ORAL COMMUNICATIONS AND DIRECTOR COMMENTS VI.ADJOURNMENT Costa Mesa Sanitary District ... an Independent Special District Organics Recycling Tonnages – FY2015-16 Item Number:1. Recommendation/Notes: Recommendation: That the Board of Directors receive and file the report. ATTACHMENTS: Description Type Organics Recycling Tonnages – FY2015-16 Cover Memo Month/ Year Tons Jul-15 195.64 Aug-15 580.23 Sep-15 735.45 Oct-15 813.67 Nov-15 633.81 Dec-15 590.95 Jan-16 583.13 Feb-16 609.86 Mar-16 763.53 Apr-16 676.74 May-16 707.23 Jun-16 Total 6890.24 195.64 580.23 735.45 813.67 633.81 590.95 583.13 609.86 763.53 676.74 707.23 0 100 200 300 400 500 600 700 800 900 TO N S Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Tons 195.64 580.23 735.45 813.67 633.81 590.95 583.13 609.86 763.53 676.74 707.23 ORGANICS RECYCLING TONNAGES FY 15/16 Costa Mesa Sanitary District ... an Independent Special District Code Enforcement Officer Report - May 2016 Item Number:3. Recommendation/Notes: Recommendation: That the Board of Directors receive and file the report. ATTACHMENTS: Description Type Code Enforcement Officer Report - May 2016 Cover Memo Protecting our community's health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum To: Board of Directors Via: Scott Carroll, General Manager From: Edward Roberts, Code Enforcement Officer Date: June 01, 2016 Subject: Code Enforcement Officer Report – May 2016 This report summarizes major points for three ordinance enforcement topics covering scavenging, graffiti, and trash container enforcement. For the month of May, the CMSD Code Enforcement Officer focused his efforts on patrols in various parts of the community. The goal is to identify and deter instances of scavenging and residential trash carts left within the public view. In the month of May, the District saw a number of complaints filed with CMSD Code Enforcement staff regarding scavenging activity in the city. As with most scavenging complaints, the alleged violations take place in the early morning hours. In order to address resident concerns, the Code Enforcement Officer investigated all complaints and adjusted his schedule to accommodate requests for early morning or weekend enforcement. Included below are instances of scavenging that were detected while the Officer was investigating specific complaints. Proactive Scavenging Investigations: 07 2110 Elden Avenue- Officer Roberts contacted a male subject at this location for rummaging through a CMSD trash cart. The subject was made aware of the CMSD ordinance prohibiting scavenging and advised to return all items to a nearby CMSD cart. The subject was advised that he would be subject to citation if observed scavenging again and sent on his way. Board of Directors May 2016 341 Nassau Road– While patrolling the 300 block of Nassau Road, Officer Roberts observed a male subject rummaging through a CMSD cart. Officer Roberts contacted the male in front of 341 Nassau Road in order to investigate further. During the course of the contact, the male admitted to scavenging from CMSD carts along Nassau Road. The male was advised to return all items scavenged from CMSD carts and admonished regarding prohibited activity. The male was sent on his way and has not been seen in the area since the contact. 1860 Orange Avenue– While patrolling the 1800 block of Orange Avenue, Officer Roberts observed a male subject rummaging through a CMSD cart in front of 1860 Orange Avenue. Officer Roberts contacted the male in front of the location in order to conduct a scavenging investigation. During the course of the investigation, the subject admitted to scavenging regularly in order to support himself. The subject was cooperative and agreed to return all scavenged items to a nearby CMSD trash cart. The subject was advised and sent on his way. Board of Directors May 2016 2910 Peppertree Lane- While patrolling the 2900 block of Peppertree Lane, Officer Roberts attention was directed toward a male subject that was rummaging through a CMSD trash cart. Officer Roberts contacted the male in the alley of 2910 Peppertree Lane and asked about him and his scavenging activity. During the course of the contact, the male admitted that he routinely scavenges items from CMSD carts. The subject was advised that scavenging is prohibited and instructed to return all recyclable material to a nearby trash cart. The subject was sent on his way with a verbal advisal. 2944 Peppertree Lane– While patrolling the 2900 block of Peppertree Lane, Officer Roberts observed a male subject rummaging through a CMSD cart. Officer Roberts contacted the subject to the rear of 2944 Peppertree Lane in order to investigate further. During the course of the contact, the male admitted to having scavenged items from CMSD carts along the alley of Peppertree Lane. Based on his cooperative demeanor, the male was advised to return all items scavenged from CMSD carts and admonished regarding prohibited activity. The male was sent on his way and has not been seen in the area since the contact. Board of Directors May 2016 2078 Wallace Avenue- Officer Roberts contacted a female subject that was observed at this location rummaging through a CMSD trash cart. The subject was made aware of the CMSD ordinance prohibiting scavenging and advised to return all items to a nearby CMSD cart. The subject was also advised that she would be subject to citation if observed scavenging again and sent on her way. 708 West 20th Street- While patrolling the 700 block of West 20th Street, Officer Roberts observed a male subject rummaging through a CMSD cart. As Officer Roberts approached the location, he noted that the male subject had a grocery cart with him that contained a large amount of recyclable material. The subject was contacted and during the course of the investigation, the subject admitted to scavenging recyclable material from CMSD carts. The subject was advised that scavenging is prohibited activity and was instructed to return all scavenged items to a nearby CMSD cart. The subject was sent on his way with a verbal admonishment. Board of Directors May 2016 END OF SCAVENGING ENFORCEMENT REPORT Trash Container Enforcement: In the month of May, there were a few customer complaints reported to the District Headquarters regarding trash carts in public view. The following is a list of locations where trash cart violations were found and addressed by the Courtesy Notice process. Total Cases: 95 The following locations received First Warnings: (2) Anaheim Avenue-Storage of carts in public view. (1) Arnold Avenue- Storage of carts in public view. (2) Avalon Street - Storage of carts in public view. (3) Baker Street - Storage of carts in public view. (2) Belfast Avenue - Storage of carts in public view. (2) Bucknell Drive - Storage of carts in public view. (2) Colgate Drive - Storage of carts in public view. (2) College Avenue- Storage of carts in public view. (1) Congress Street - Storage of carts in public view. (1) Cornell Drive- Storage of carts in public view. (1) Cove Street- Storage of carts in public view. (2) Darrell Street - Storage of carts in public view. (1) Del Mar Avenue- Storage of trash carts in public view. (3) Elden Avenue - Storage of carts in public view. (2) Fordham Drive - Storage of cart in public view. (2) Fullerton Avenue- Storage of carts in public view. Board of Directors May 2016 (2) Gibraltar Street-Storage of carts in public view. (3) Governor Street- Storage of carts in public view. (2) Hamilton Street- Storage of carts in public view. (3) Joann Street- Storage of carts in public view. (2) Madison Avenue - Storage of carts in public view. (4) Maple Street - Storage of carts in public view. (2) Meyer Avenue - Storage of carts in public view. (3) Miner Street - Storage of carts in public view. (3) Mission Drive - Storage of carts in public view. (4) Orange Avenue- Storage of carts in public view. (2) Paularino Avenue-Storage of trash caarts in public view. (3) Pomona Avenue - Storage of carts in public view. (1) Ralieigh Avenue-Storage of carts in public view. (3) Riverside Drive- Sotorage of trash carts in public view. (2) Ross Street- Storage of carts in public view. (1) Rutgers Drive- Storage of carts in public view. (2) Samaoa Place- Storage of trash carts in public view. (4) Santa Ana Avenue- Storage of carts in public view. (3) Senate Street - Storage of carts in public view. (2) Surf Street- Storage of carts in public view. (3) Tustin Avenue-Storage of carts in public view. (3) Wallace Avenue - Storage of carts in public view. (2) Westminster Avenue - Storage of carts in public view. (3) Wilson Street - Storage of carts in public view. Board of Directors May 2016 (1) 17th Street - Storage of carts in public view. (2) 19th Street - Storage of carts in public view. END OF TRASH CONTAINER ENFORCEMENT REPORT ____________________________________________________________________ No cases of graffiti on a trash carts were opened in the month of May Board of Directors May 2016 Scavenging Report – May 2016 Locations: • 2110 Elden Avenue • 341 Nassau Road • 1860 Orange Avenue • 2910 Peppertree Lane • 2944 Peppertree Lane • 2078 Wallace Avenue • 708 W. 20th Street Costa Mesa Sanitary District ... an Independent Special District Organics Recycling Behavioral Study - Final Report Item Number:4. Recommendation/Notes: Recommendation: That the Board of Directors receive a presentation from study's author, Dr. Sally Geislar. ATTACHMENTS: Description Type Organics Recycling Behavioral Study - Final Report Cover Memo 1 Final Report Costa Mesa Sanitary District & University of California, Irvine FOOD SCRAPS FOR FUEL: UNDERSTANDING AND INCREASING HOUSEHOLD PARTICIPATION IN THE COSTA MESA CURBSIDE ORGANICS PROGRAM 2 Prepared by: Sally Geislar, M.A. 303-319-4759 sgeislar@uci.edu www.sallygeislar.weebly.com Doctoral Candidate Director, The Food Works Lab Department of Planning, Policy, and Design School of Social Ecology University of California, Irvine April 8, 2016 Photos on cover page are from Portland Composts! and Costa Mesa Sanitary District Graphic was designed by Sally Geislar 3 TABLE OF CONTENTS EXECUTIVE SUMMARY..................................................................................................4-5 BACKGROUND................................................................................................................6 STUDY DESIGN & METHODS........................................................................................7-10 SAMPLE SELECTION..................................................................................................................7 DATA COLLECTION...................................................................................................................7 PHASE A: NATURAL EXPERIMENT................................................................................................ 7 PHASE B: INTERVENTION EXPERIMENT...................................................................................... 7-8 FOCUS GROUP.................................................................................................................... 8-9 TRIAL RECRUITMENT................................................................................................................ 9 SAMPLE CHARACTERISTICS................................................................................................... 9-10 OUTCOMES: PHASE A (JUNE-OCT).............................................................................10-11 CHANGES IN BEHAVIOR AND ATTITUDES......................................................................................10 DETERMINANTS OF PARTICIPATION............................................................................................ 10 PARTICIPANT CONCERNS......................................................................................................... 10 PROGRAM SUPPORT.............................................................................................................. 11 OTHER EFFECTS OF PARTICIPATION............................................................................................11 OUTCOMES: PHASE B (OCT-DEC)..............................................................................11-12 EFFECTS OF NORM COMMUNICATION...................................................................................11-12 COST-EFFECTIVE IMPACT.........................................................................................................12 POLICY RECOMMENDATIONS.....................................................................................13-14 APPENDICES ..........................................................................................................15-16 I. TABLE 1: ESTIMATES OF STUDY IMPACT & IMPACT OF DISTRICT-WIDE EXPANSION...........................15 II. TABLE 2: DISTRICT-WIDE EXPANSION.....................................................................................16 4 Summary of Study Design, Analysis, Challenges, and Recommendations: This study engages residents served by the Costa Mesa Sanitary District (CMSD) with the Curbside Organics Collection Program (COCP) to better understand how households are responding to in-home food scrap separation and to improve participation. The Food Scraps for Fuel study, designed and led by Sally Geislar, M.A., is based on a proven approach to improve pro-environmental behavior. Simply communicating the actual behavior of others has been shown to improve energy conservation and recycling behavior, even more than information or financial incentives alone. The Food Scraps for Fuel study will be the first to apply these norm communication tools to the domain of food scraps to improve household participation in the COCP. Random sampling of mail-out surveys recruited 1,079 residents, 583 completed the second survey and 499 completed the third survey. Of these 352 completed all three surveys. Phase A was a natural experiment examining change between the first and second survey, before and after residents received their curbside organics cart. Phase B was an intervention experiment examining change between the second and third surveys. For Phase B, the 583 participants of the second survey were randomly assigned to either a treatment and control group. The treatment group received norm communication for the 8 week intervention period. Results from Phase A (June-Oct): The original CMSD curbside organics program was a success. After receiving the organics cart, participants increased:  Food scrap separation from 20-66% of households o 28% had collected kitchen pail from CMSD by Oct. o 44% used some improvised collector such as an empty bulk yogurt container or existing tupperware  Support of the curbside organics recycling program from 60-69%. Participants were more likely to support the COCP if they knew that it would improve post-collection recycling efforts.  The belief that separating food waste is the right thing to do from 67-77% Results from Phase B (Oct-Dec):  Communicating the food scrap separation behavior of other residents improved organics separation among treatment group participants by: o Increasing the percent of residents participating in the COCP from 66-77%, a 17% increase in participation o Increasing the portion of household food waste separated from 53-60%, a 13% increase in food waste separation by participants o 39% collected kitchen pail from CMSD by Dec., up 38% from Oct o 36% used some improvised collector  Residents receiving norm communication were also less likely to stop separating  Participants who received this messaging also increased their support of the COCP for Costa Mesa and other cities by 7%.  The separation behavior and policy support of the control group remained constant during the intervention period from October to December. EXECUTIVE SUMMARY 5 Cost-Effective Impact The Treatment group increased separation by 0.59 lbs. per household per week or 946 lbs. as a group during the intervention experiment (8 weeks). 1 The program effects cost $30.65 per lb. of increased food waste diverted during experiment based on the total cost of the program to CMSD ($29,000), or $5.04 per lb. of increased food waste diverted over one year. If we consider only the cost of implementing the treatment (i.e. incentives, mailing costs, magnet printing), the increased food waste diversion cost $4.49 per lb. for the period of the experiment, or $0.74 per lb. diverted over one year. This final figure best represents the cost per lb. of expanding the program to the broader community, not including evaluation of expansion. This cutting edge research coupled with the cutting edge of organics management in Orange County has generated new knowledge about barriers to and improvement of participation in CMSD's COCP. This research has had immediate impacts in aiding the District to meet statewide mandates for diversion and GHG reductions. Yet the real value of this study is in the application of this new knowledge across the entire District. Policy Recommendations Expanding the new tools of norm communication will increase participation in the broader community. This can be achieved in several forms including:  Framing messages in media (via newsletter, website, or mobile app)  Providing magnets (either to all households or only to those with substandard performance)  Evaluation of these efforts for reporting success to state agencies and potential grantors  Evaluation would also aid in communicating to other cities interested in learning from the success of CMSD's Organics Recycling Program. The following are additional recommendations based on the findings presented above.  Provide additional information (possibly in the form of magnets) on the benefits of the curbside organics recycling program and best practices to maintain the cart and bin  Providing resident testimonials to help share ideas on how to overcome concerns about family cooperation, maintaining the pail and cart, sufficient time and knowledge  Addressing challenges with insufficient curb space may continue to demand a case-by- case approach. One final note on avoiding the "ick"-factor Avoiding exposure to "ick"-inducing factors such as pests and odors is key. Several residents who began separating with the new cart, gave up because they assumed these "inevitable" nuisances were simply tolerable to others, but not for them. Instead, these nuisances should be perceived as a clue that their at-home practices need to be fine-tuned a little to have the in- home food scrap separation system running smoothly. Suggested solutions provided below. 1 See Appendix I. Table 1 for more detailed analysis 6 Food waste is the single largest material stream sent to landfills after recycling. Once there, it generates a quarter of the country's methane gas emissions, a potent greenhouse gas (GHG). Diverting food waste from landfills to be used in alternative processing methods serves multiple ends. First, food waste diversion will help the district meet the demands of a series of state mandates including the following: California Assembly Bill 341 (AB 341) requiring 75% landfill diversion by 2020, California Strategic Directive 6.1 requiring 50% reduction in the amount of organics in the waste stream by 2020, and California Assembly Bill 32 (AB32) requiring a reduction of GHG emissions to 1990 levels by 2020. Secondly, alternative processing methods for organics such as compost and anaerobic digestion produce a valuable product. These products are currently used to return nutrients to the soil, power biogas-fleets, or power water treatment facilities. This research was organized around the new curbside organics recycling program offered by the Costa Mesa Sanitary District (CMSD) and the private hauler CR&R Environmental Services. The research team set out to understand how households have responded to the new curbside program, and to test new tools to improve participation. The Food Scraps for Fuel study, designed and led by Sally Geislar, M.A., is based on a proven approach to improve pro-environmental behavior. Simply communicating the actual behavior of others has been shown to improve energy conservation and recycling behavior, even more than information or financial incentives alone. A classic example in the field of social-psychology is an experiment on hotel towel reuse. In the study, some rooms had signs with an environmental message extolling the benefits of reusing your towels, while signs in other rooms communicated group norms by stating that 75% of other guests reused their towels. Ultimately, the guests with the norm messaging reused their towels at 150% the rate of guests with environmental messaging. These hotels were able to save water and energy, not with large capital investments or education campaigns, but merely by communicating group norms. The pilot study also suggests that spillover behaviors--those unrelated to the target behavior, in this case food scrap separation--and environmental concern develop after beginning to separate food scraps in the home. Pilot participants revealed more pro-environmental attitudes and reported increased awareness of the environmental impact of their waste after they began separating food scraps. Some reported engaging in other waste reduction efforts by purchasing goods with less packaging, for example. The Food Scraps for Fuel study will be the first to apply these norm communication tools to the domain of food scraps to improve household participation in the COCP. The research goal for this study was first to understand how households are affected by the COCP, including how they are adapting to or resisting participation in the COCP. Secondly, the goal was to test the use of norm communication to improve household participation. BACKGROUND 7 In order to achieve the research goals for this study, the team recruited residents to participate in two experiments; a Natural Experiment and an Intervention Experiment. The experiments required participants to complete surveys at three points in time between June and December 2015. To prepare for the experiments, the team also conducted a focus group and a trial recruitment. Sample Selection: In June 2015, 7,400 addresses were randomly selected2 from a complete list of 20,000 single- family home residents served by the Costa Mesa Sanitary District. Each residence would receive a curbside organics cart for the first time in July or August 2015. The recruitment mailer for this study included a welcome letter, the six-page survey, a postage-paid return envelope, and a link for the online version of the survey. One reminder postcard was sent to non-responders after two weeks. Of the 1,040 who responded (14% response rate), 800 used the print survey and 250 completed it online. More than 75% of the print respondents indicated at the end of the survey that they would prefer an electronic survey in the future. The 7,500 addresses was determined based on the response rate to the print and digital response option of 14% (a relatively high response for this sort of recruitment) from the print and digital trial recruitment letters, and expected drop-out rates of 50% and 35% for the subsequent surveys (based on previous community-based studies). To ensure sufficient population size at the end of the study in Dec (approximately 400), the team determined that attracting about 1,000 participants for recruitment and mailing to about 7,400 addresses would be necessary. Data Collection: Surveys were mailed to a random sample of residents. Participants could complete the survey online or by completing the hard-copy and returning it in the postage-paid return envelope. The following surveys were requested of each participant:  Recruitment Survey, June 2015: Completed prior to receiving curbside organics carts  Posttest Survey, Oct 2015: Completed after receiving curbside organics carts  Post-intervention Survey, Dec 2015: Completed after 8-week intervention Phase A: Natural Experiment (June-Oct): Participants completed the Recruitment survey (June) before they received their organic curbside carts, and a Posttest survey (Oct) afterwards. Comparing changes in resident responses between these surveys suggests changes that resulted from having the organics carts available. The surveys measured participants' beliefs and opinions about food waste, environmental attitudes, and various behaviors. Phase B: Intervention Experiment (Oct-Dec): For the Intervention experiment (Oct-Dec), participants who completed the Posttest survey (Oct) were randomly assigned to either a treatment or control group. The treatment group 2 The random selection for recruiting participants as well as the random assignment to treatment and control groups improved the generalizability of the study results. In other words, all residents of single family homes had an equal chance of being selected and participants were equally likely to be assigned to treatment or control groups. This process makes the findings more likely to represent what we would find in the general population. STUDY DESIGN AND METHODS 8 received short weekly surveys to track their food scrap separation behavior over the course of the 8 week intervention period. The treatment group then received messages communicating the new norms of food scrap separation. The messages read: "76% of Households in Costa mesa Separated All their Food Scraps this week." This figure varied by week. Those completing print surveys received a magnet indicating the first week's participation rate, and then received stickers to place over the magnet each week. Those receiving digital surveys receiving this messaging in their email. At the end of the intervention period, all treatment and control group participants received the Post-intervention survey (Dec). Comparing changes between Oct-Dec surveys for the control group (who did not receive norm communication) indicate the changes we would expect in the general population during that same time. Any changes that occurred for the treatment group, but not the control group are a result of the norm communication "treatment". If the treatment group showed increased participation significantly above the control group, then the study would conclude that norm communication improves participation. Focus Group: The focus group was designed to improve the community comprehension and cultural competency of the surveys. First, our team identified local organizations in a community with a similar demographic profile as Costa Mesa. We partnered with an organization in Fountain Valley, CA which shares some key demographic variables with Costa Mesa including average household size, median household income, and education. We Recruit members of that organization to review and provide feedback on all study materials that will be received by residents served by CMSD. Participants from a diverse Fountain Valley church reviewed all study materials prior to the focus group meeting. Participants attended a focus group with the Lead Researcher and Research Assistants and reviewed each of the study materials for clarity. Two groups of six participants received a $25 grocery store gift card for their participation. Focus Group Outcomes: 1. Improved and finalized Recruitment Mailing Packaging: Participants indicated that having the logo of the Food Works Lab and CMSD would help the survey stand out. 2. Improved and finalized Pretest-Posttest Surveys for experiments: Participants helped improve clarity of several questions regarding food preparation and disposal in the home as well as suggesting questions be included that asked if residents separate recycling on their own and if residents were aware of the curbside program at the 9 baseline (before receiving bins). Participants also improved the wording of questions assessing the impact of norms on behavior to be less off-putting to residents. 3. Improved and finalized Weekly Surveys and Norm Communication tools: Participants indicated that they would be more likely to access the internet for the short weekly surveys on their mobile device, but that older populations may not due to the small screen size. Trial Recruitment: The trial recruitment was sent to a random sample of 400 residents selected from the initial random sample of 7,500. The purpose of the trial was to determine whether including both a digital and a print response option for residents improved the response rate. Half received digital only, and half digital and print response options. The latter group had a significantly higher response rate and a more representative sample. Trial Recruitment Outcomes: 1. Higher response rate with digital and print option: The group receiving digital and print response options had a 14% response rate compared to only 3% from those with print response options only. 2. More representative sample with digital and print option: The trial indicated that providing only a print response option resulted in a sample that was significantly older and less educated than the general population. Sample Characteristics The Recruitment survey (June) attracted 1,079 respondents from the 7,400 who received the survey (14% response rate). Of these, more than half completed the Posttest survey in Oct (583, 56% response rate). For the Post-Intervention survey (Dec), all 1,079 original participants received the survey, 499 completed it. Of these 352 completed all three surveys for a 32% response rate overall. Nevertheless, some demographic differences remain in the sample compared to the general population in Costa Mesa.  The study participants were more likely to be non-Hispanic White (78%), female (68%), aged 55 and over (46%), and having earned a Bachelor's degree or higher (50%) Demographic data June Oct Oct Dec Sample Size 1,079 583 583 499 Retention Rate 56%86% n = 583 Percentage n = 352 Percentage Female 68 67 Non-Hispanic White 78 na Aged 55 and over 46 61 Bachelor's or higher 50 73 Household size (avg)2.6 2.6 Children Present 26 26 Phase BPhase A 10  Average household size for participants was similar to that of Costa Mesa at about 2.6 persons per household.  About a quarter of participants had children in the home.  Those participants in Phase B who completed all three surveys (352 participants) had an even greater portion of older (61%) and more educated residents (73%). Changes in Behavior and Attitudes After receiving the organics cart, participants increased:  Food scrap separation from 20-66% of households 3  Support of the curbside organics recycling program from 60-69%  The belief that separating food waste is the right thing to do from 67-77% Determinants of Participation Participants were more likely to separate if they:  Had a positive attitude toward separating food scraps, or had some prior experience doing so.  Believed they had control over separation in their home--including the belief that it would be an easy thing to do and that the decision in the household was theirs to make. Participant Concerns Participants had some concerns about separating food waste in their home. These concerns changed after receiving the curbside bin and varied by who was responsible for household tasks.  Insufficient kitchen space (47%)  Lack of knowledge about how to separate food waste (27%). Decreased after cart  Difficulty gaining household cooperation (25%) Increased after cart  Insufficient time to separate food waste (23%)  Insufficient curb space (20%). Increased after cart Other concerns raised included:  Knowledge of how best to maintain the kitchen pail and the cart to avoid pests and odors.  Not making "enough" food waste for the smallest curbside cart, many wanted an even smaller option  Some had concerns about the added cost of compostable bags, perhaps not realizing they could use paper bags or that they will use fewer regular garbage bags Providing tips on how to keep the pail and cart clean and odor free including daily (or every other day) emptying and rinsing of the pail. Share stories from residents on how they successfully encouraged cooperation among other household members. Addressing challenges with sufficient curb space may demand a case-by-case approach. 3 All figures were statistically significant below at least the p<.05 level compared to the recruitment survey. OUTCOMES: PHASE A (JUNE-OCT) 11 Program Support Participants were more likely to support the COCP if they  Knew that organics separation would improve recycling  Believed that separating food waste is the right thing to do While the latter is of no surprise, the former suggests that new efforts to inform the community about the effects of the COCP on post-separation recycling efforts may increase participation. Other Effects of Participation Participants reported additional changes in the home:  More aware of how much food is wasted, some are changing shopping behaviors to waste less food  Pleased to eliminate one trash cart or have more room in trash cart, fewer trash bags used  More thoughtful about where trash goes  More aware of food packaging—avoid plastic bags for produce and groceries Effects of Norm Communication The treatment group received weekly messages communicating the new norms of food waste separation. The treatment group improved in behaviors and attitudes significantly more than the control group. This indicates that norm communication does increase participation and should be incorporated into future communication efforts by CMSD. Increased participation: The Treatment group was significantly more likely to:  Separate food waste from 66-77%4  Separate a greater percent of food waste, 60% on average increased from 53%. In fact, 54% of treatment group separates 75% or more of their food waste.  Not give up on separating food waste 4 All figures for the treatment group were statistically significant at a p<..05 level compared to the control group OUTCOMES: PHASE B (OCT-DEC) 12 Increased positive perceptions and policy support: The Treatment group was significantly more likely to:  Increase policy support 69-81%  Increase the belief that separating food waste is the right thing to do from 77-79%  Support promoting organics programs in other cities It is important to note here that participants were significantly more likely to support the curbside organics recycling if they knew that:  Organics separation will improve recycling  Waste is separated after collection Cost Effective Impact The study resulted in significant increases in participation, both in the percent of residents participating and in the portion of household food waste diverted by residents. In estimating the value of the impact of this study, the team considered both the total cost of the project to CMSD and the cost of the administering the actual treatment. The latter is a more accurate reflection of dollar spent per increased diversion (lbs.) as this is closer to what would be spent in an expansion of norm communication tools. Communicating the new norms of food waste separation increased the portion of food waste separated by the treatment group. 5 Increased pounds of food waste separated by the treatment group  0.59 lbs. = Increased food waste separation (per household per week)  946 lbs. = Total increased food waste separation for treatment group during experiment (186 households for 8 weeks) Pounds diverted per dollar spent based on the total cost of the program to CMSD ($29,000)  $30.65 per lb. of increased food waste diverted during experiment  $5.04 per lb. of increased food waste diverted over one year The following figures consider only the cost of implementing the treatment itself (i.e. incentives, mailing costs, magnet printing) Pounds diverted per dollar spent based on cost of treatment alone ($4,252)  $4.49 per lb. of increased food waste diverted during experiment  $0.74 per lb. of increased food waste diverted over one year With the expansion of these norm communication tools, CMSD could see significant increases in household food waste separation.  607,666 lbs. = Estimated increase in annual food waste separation with district-wide expansion to all 19,637 households 5 For complete calculations see Appendix: Table 1 13 The primary finding of this research is that simply by using the language of the new norms of food scrap separation, CMSD can improve participation in their curbside organics program. Residents are more likely to participate and more likely to separate more of their food waste into the CMSD curbside organics cart if they know that others in the community do so as well. Thus, CMSD should incorporate this messaging into future communications with the community. This can be done in a variety of formats and with different standards for measurement. Some examples are provided below. Expansion programs include communicating the new norms of organics separation by:  Framing messages in media (via newsletter, website, or mobile app)  Providing magnets (either to all households or only to those with substandard performance)  Evaluation of these efforts for reporting success to state agencies and potential grantors  Evaluation would also aid in communicating to other cities interested in learning from the success of CMSD's Organics Recycling Program. The following are additional recommendations based on the findings presented above.  Provide additional information (possibly in the form of magnets) on the benefits of the curbside organics recycling program and best practices to maintain the cart and bin  Addressing challenges with insufficient curb space may continue to demand a case-by- case approach. One final note on avoiding the "ick"-factor Based on responses to open-ended questions, many participants assume that odors and pests in the kitchen pail is an inevitable part of food waste separation rather than a signal of some shortcoming with maintenance or pail-emptying.  With frequent emptying of the kitchen pail into the organics cart (every-other day or every day), and a quick rinsing and wiping out of the pail, residents can avoid these nuisances.  Using a liner of some sort can also help in this regard. Residents may choose to purchase compostable plastic bags, but a paper grocery bag or a newspaper works as well.  Similarly, incorporating brown waste in the cart and regularly rinsing out the organics cart with a garden hose or the like will reduce the build-up of residues.  Residents may also choose to use existing cart-cleaning services at some interval. Avoiding "ick"-inducing factors is key as some residents who began separating with the new cart, gave up because of an unpleasant experience with their food waste. Their comments suggest they assume these "inevitable" nuisances were simply tolerable to others, but not for them. Instead, these nuisances should be perceived as a clue that their at-home practices need to be fine-tuned a little to have the in-home food scrap separation system running smoothly. POLICY RECOMMENDATIONS 14 Some steps to encourage this perspective include:  Communicating that odors and pests are a sign that something is not quite right with the at-home food waste system and that there is a solution to odors and pests (e.g. on an attractive magnet or flyer to be hung on the fridge)  Providing resident testimonials to help share ideas on how to overcome concerns about maintaining the pail and cart, family cooperation, and having sufficient time or knowledge  Encourage residents to find an in-home separation system that works for them; different sized pails to fit the amount of daily food waste, more tightly sealed pails, etc. 15 Appendix I. Table 1:Estimates of study impact and impact of district-wide expansion Figure #Figure Calculation Population 1 Households in final sample 352 2 Treatment group households 186 3 Treatment group percent of sample 53%(#2/#1) Waste and Food Waste Generation 4 Total households with waste bins in CMSD Oct 2015 * 21880 5 Total waste generated (in tons) Oct 2015 *2650 6 Total waste generated (in lbs.)5300000 (#5*2000) 7 Lbs. of waste / household / month 242.23 (#6/#4) 8 Lbs. of waste / household / day 8.07 (#7/30) 9 Lbs. of foodwaste / household / day **1.21 (#8*.15) Food Waste Separation (lbs. / HH / day) 10 Control group separation (53%)0.64 (#9*.50) 11 Treatment group separation (60%)0.73 (#9*.63) Increased separation (in pounds) 12 Increased daily separation per household (lbs/hh/day) 0.08 (#11-#10) 13 Percent increase in separation 13%((#11-#10)/#11) 14 Daily treatment group separation (lbs/day)16 (#12*#2) 15 Monthly treatment group separation (lbs/month)473 (#14*30) 16 Annual treatment group separation (lbs/year)5756 (#14*365) Estimated increased separation with district-wide expansion *** 17 Total households with organics carts in CMSD *19637 18 Annual increased separation (lbs/year)607666 (#17*(365*#12) 19 Annual increased separation (tons/year)304 (#18/2000) Cost-Effective Impact 20 Total Study Cost to CMSD 29,000$ 21 Dollars / lb. over experiment 30.65$ (#20/(2*#15)) 22 Dollars / lb. over year 5.04$ (#20/#16) 23 Treatment Cost to CMSD (treatment group alone)4,252$ 24 Treatment dollars / lb. over experiment (8 weeks)4.49$ (#23/(2*#15)) 25 Treatment dollars / lb. over year 0.74$ (#23/#16) * According to CR&R Environmental Services Oct 2015 report ** About 15% of household waste is food according to CalRecycle *** General population assumed to separate at rate of control group (53% of household waste and 66% participation on average) as they were randomly selected from general population and randomly assigned to control group 16 Appendix II. Table 2: District-Wide Expansion of Norm Communication Tools to Increase Participation in Broader Community Service available through the Food Works Lab Messages communicate community participation Community outreach, education, and feedback Utilizes existing communication structures Lasting exposure of new norms to community Evaluates effect of new norms for reporting to state agencies or grantors 1a x x x Ex. 1 To all households Ex. 2 Only to households in communities where participation is sub-standard. 2a x x x x Ex. 1 CMSD (i) Quarterly Newsletter, (ii) Website, (iii) Mobile Application 1b x x x x 2b x x x x x 1b+2b x x x x x x Ex. 1 Partner with CR&R to measure carts at the curbside before & after expansion Ex. 2 Short surveys of new r&om sample of residents before & after expansion (i) Quarterly CMSD newsletter: Include a regular column that reports the participation rate of the community and features resident testimonials about overcoming challenges to adopting new habits and avoiding nuisances. The Food Works Lab could continue to interview participants who have volunteered to share their stories. (ii) CMSD website: Include a regular column that reports the participation rate of the community and features resident testimonials about overcoming challenges to adopting new habits and avoiding nuisances. The Food Works Lab could continue to interview participants who have volunteered to share their stories. This could be prepared for weekly or monthly entries and include an opportunity for others to share their stories and ask questions. (iii) CMSD mobile app: Include a regular blurb reporting the participation rate of the community and features resident testimonials about overcoming challenges to adopting new habits and avoiding nuisances. The Food Works Lab could continue to interview participants who have volunteered to share their stories. This could be prepared for weekly or monthly entries and include an opportunity for others to share their stories and ask questions. Evaluation of norm communication expansion with magnets only Evaluation of norm communication expansion with media only Evaluation of norm communication expansion with magnets & media Program Option Provide magnets with the new norms of separation Media communicates the new norms of food waste separation Costa Mesa Sanitary District ... an Independent Special District Organics Recycling Behavioral Study Recommendations & Plan Item Number:5. Recommendation/Notes: Recommendation: That the Board of Directors give staff direction regarding the recommendations and plan for increasing participation in the Organics Recycling Program. ATTACHMENTS: Description Type Organics Recycling Behavioral Study Recommendations & Plan Cover Memo Protecting our community's health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum To: Board of Directors Via: Scott Carroll, General Manager From: Gina Terraneo, Management Analyst I Date: June 14, 2016 Subject: Organics Behavioral Study Recommendations & Plan Summary On April 12, 2016, Sally Geislar completed the Food Scraps for Fuel study and provided a final report that summarized her key findings and policy recommendations. The study looked at residents served by the Costa Mesa Sanitary District (CMSD) through its Organics Recycling Program to understand how households responded to the change from a single waste stream collection program to a dual waste stream program. Ultimately, the study examined resident behaviors in relation to food scrap separation and sought to improve participation in the program. Once the study’s results were identified, Ms. Geislar proposed the following policy recommendations: • Frame District messaging in the newsletter and on the website to express norm communication. o Provide resident testimonials to help share ideas of how to overcome concerns about cart maintenance and food separation. • Make magnets available to the public to educate households regarding proper food separation and cart maintenance. • Evaluate the above efforts in order to report program success to state agencies, potential grantors, and other agencies. Staff Recommendation Board of Directors May 10, 2016 Page 2 of 3 Staff recommends that the Board of Directors give staff direction regarding the recommendations and plan for increasing participation in the Organics Recycling Program. Analysis Based on Ms. Geislar’s policy recommendations, staff has developed a detailed plan to implement these suggestions: • Frame District messaging in the newsletter and on the website to express norm communication. 1. Obtain resident testimonials to help share ideas of how to overcome concerns about cart maintenance and food separation. i. Have Sally Geislar provide the contact information for one of the study’s participants and contact them to obtain a testimonial. Use testimonial and photograph of participant in newsletter, social media, and on the website. 2. Develop a webpage under the “Organics Recycling Program” tab on the website to provide tips about organics cart and kitchen pail maintenance. • Make magnets available to the public to educate households regarding proper food separation and cart maintenance. 1. Develop magnet artwork and messaging. Include tips on how to maintain the organics cart and kitchen pail, common items that do and do not go in the organics cart, and District contact information for further questions. 2. Obtain quotes from custom magnet producers. 3. Submit artwork for magnet and order 2,500 magnets. 4. Have magnets available at District Headquarters and events to distribute to the public. • Evaluate the above efforts in order to report program success to state agencies, potential grantors, and other agencies. 1. Request a monthly contamination report from CR&R. Tracking the percentage of organics contamination will allow the District to see the effectiveness of the outreach. 2. The monthly Organics Tonnage report and the Quarterly Diversion report (which staff already tracks) will also provide valuable insight into the level of community participation in the Organics Recycling Program. Strategic Plan Element Goal This item complies with Strategic Element 2.0, Solid Waste. Additionally, it complies with Strategic Goal No. 2.1, Behavior Study for Organics Recycling Program to “improve organics separation among participants” and “measure impacts of norm communication tools to achieve policy goals” and Strategic Goal No. 2.4, Develop strategies for 75% waste diversion. Legal Review Not applicable. Board of Directors May 10, 2016 Page 3 of 3 Environmental Review None of the recommendations in the staff report are a disturbance of the environment similar to grading or construction and, therefore, these recommendations do not constitute a project under CEQA or the District’s CEQA Guidelines. Financial Review The purchase of 2,500 customized magnets will cost approximately $800 or $1,350, depending on the chosen design. There are sufficient funds with the Solid Waste Organics Public Information/Education/Promotions account 10-100012-4420 to cover either cost. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the May 10, 2016 Board of Directors meeting at District Headquarters and posted on the District’s website www.cmsdca.gov Attachments A: Sample designs for magnets B: Estimates for magnets Reviewed by: Wendy Hooper Davis Finance Manager ESTIMATE ONLY Do not pay! DATE 5/2/2016 ESTIMATE # 160203cmsd Costa Mesa Sanitary District 628 West 19th Street Costa Mesa, CA 92627 Attn: Gina Terraneo Ship To Costa Mesa Sanitary District 628 West 19th Street Costa Mesa, CA 92627 Attn: Gina Terraneo Pauline's Professional Potpourri (Sage 9987) 232 Tulane Road Costa Mesa, CA 92626 P.O. NO. TN magnets TERMS Net 20 Days SHIP DATE 5/2/2016 SHIP VIA Groun FOB MO IN HANDS 7 working days SPECIAL PRICING APPROVAL SIGNATURE: This is ESTIMATE only - do not pay. Invoice will be sent after products are delivered. Over/Under runs billable +/-. Camera Ready art to be provided by client or artwork charges will apply. t: 714-227-6767 Pauline@PaulinesPromotion...PaulinesPromotions.com TOTAL Sub Total SalesTax (8.0%) DESCRIPTION QTY PRICE TOTAL MAGNETS Flat, flexible magnet. 3.75 x 4.25 x 0.020mil Thick Trash/Recycling Bin shape magnet with green background and white imprint and 2 color logo on wheel or upper left corner. Sample copy below to be rewritten by client 2,500 0.25 625.00T Organics Recycling Cart DO belong in organics cart: •Yard waste: grass clippings, leaves, weeds, prunings, flowers •Kitchen waste: fruit, vegetables, bread, fish, meat, dairy, FOG (fats, oils, and grease) •Bags and Liners: compostable bags, paper bags, sheets of newspaper DON’T belong in organics cart: •Glass, metal (aluminum and tin), plastics, paper, cardboard, ceramic, Styrofoam Questions? Contact CMSD staff at (949) 645-8400. (logo bug) Set-up for one color one side imprint 1 0.00 0.00T Estimated Shipping & Handling 1 78.10 78.10 Production: 7 working days after proof approval Optional: 5,000 @ 18 cents, 1,000 @ 30 cents 500 @ 5l cents. $753.10 $703.10 $50.00 ESTIMATE ONLY Do not pay! DATE 5/2/2016 ESTIMATE # 160503-babc Costa Mesa Sanitary District 628 West 19th Street Costa Mesa, CA 92627 Attn: Gina Terraneo Ship To Costa Mesa Sanitary District 628 West 19th Street Costa Mesa, CA 92627 Attn: Gina Terraneo Pauline's Professional Potpourri (Sage 9987) 232 Tulane Road Costa Mesa, CA 92626 P.O. NO. MT magnets TERMS Net 20 Days SHIP DATE 5/2/2016 SHIP VIA Groun FOB MO IN HANDS 10 working d... SPECIAL PRICING APPROVAL SIGNATURE: This is ESTIMATE only - do not pay. Invoice will be sent after products are delivered. Over/Under runs billable +/-. Camera Ready art to be provided by client or artwork charges will apply. t: 714-227-6767 Pauline@PaulinesPromotion...PaulinesPromotions.com TOTAL Sub Total SalesTax (8.0%) DESCRIPTION QTY PRICE TOTAL MAGNETS Flat, flexible magnet. 4.8" x 3.5" x 0.020mil Thick Trash/Recycling Bin shape white magnet with process color imprint as per proof 2,500 0.45 1,125.00T Sample wording to be confirmed when ordered Organics Recycling Cart DO belong in organics cart: •Yard waste: grass clippings, leaves, weeds, prunings, flowers •Kitchen waste: fruit, vegetables, bread, fish, meat, dairy, FOG (fats, oils, and grease) •Bags and Liners: compostable bags, paper bags, sheets of newspaper DON’T belong in organics cart: •Glass, metal (aluminum and tin), plastics, paper, cardboard, ceramic, Styrofoam Questions? Contact CMSD staff at (949) 645-8400. (logo bug) Set-up for process color one side imprint (pms colors not exact w ith process method) 1 30.00 30.00T Estimated Shipping & Handling 1 82.20 82.20 Production: 10 working days after proof approval $1,329.60 $1,237.20 $92.40 Costa Mesa Sanitary District ... an Independent Special District Adams Pump Station Electrical Improvements Item Number:6. Recommendation/Notes: Recommendation: That the Board of Directors direct staff to bring back this item to the Board of Directors June 23, 2016 meeting for approval consideration. ATTACHMENTS: Description Type Adams Pump Station Electrical Improvements Cover Memo Protecting our community's health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum To: Board of Directors Via: Scott Carroll, General Manager From: Rob Hamers, District Engineer Date: June 14, 2016 Subject: Adams Pump Station Electrical Improvements Summary Currently, when an electrical outage occurs at the Adams Pump Station, the field crew must park a portable generator on Adams Avenue where there is insufficient room to avoid impacting the fast moving traffic traveling westerly on Adams Avenue. The General Manager and staff have, therefore, negotiated an easement and the right to construct improvements with the property owner of 2043 Calvert Avenue so the District may locate the portable generator on Calvert Avenue during an electrical outage. Staff Recommendation That the Board of Directors direct staff to bring back this item for the Board of Directors June 23, 2016 meeting for approval consideration. Analysis When District field crews currently respond to an electrical outage at the Adams Pump Station, use of the portable generator is delayed due to the crew having to first institute traffic control measures along Adams Avenue westerly in order to close the lane closest to the curb. Only then can the area be safe for the field crew and for the generator to be safely located in front of the pump station. Due to the heavy traffic volume on Adams Avenue, transporting and connecting a mobile generator to the Adams Pump Station is extremely dangerous for staff. To improve safety conditions for staff, a proposal to connect the pump station to a mobile generator on Calvert Avenue was considered. The proposal is described further below. Board of Directors June 14, 2016 Page 2 of 4  Expand the block wall opening along Adams Avenue by four feet to accommodate the installation of an automatic transfer switch (ATS) and cabinet on Adams Avenue and adjacent to the pump station.  In the backyard of 2043 Calvert Avenue will be a permanent underground conduit and cable from the ATS to a four foot high electrical box in the parkway on Calvert Avenue. The conduit and cable run underground will be approximately 110 feet long.  The electrical box in the parkway will have an art wrap approved by the neighborhood.  CMSD will restore all damaged improvements to the property owner at 2043 Calvert Avenue to an equal or better condition. Attachment A is a picture and diagram of the proposed improvements. Under this proposal, staff will be safe and away from heavy traffic. The new location will also improve the timeliness for Adams Pump Station obtaining backup power due to minimal traffic control that is required on Calvert Avenue. When the property owner at 2043 Calvert Avenue, Cesar Ibarra, was apprised of this situation, Mr. Ibarra was receptive to the idea of an easement over his property to allow a permanent underground electrical conduit and cable to be located along his side yard and rear property line. From there, the District met a number of times with Mr. Ibarra to work out the details of the complete installation. As proposed compensation for the easement and right to construct, the District performed calculations using a basis of compensation for the easement being approximately equal to 50% of the fee value of the area of land in the easement. Attachment B is a copy of the calculation. This calculation results in a value of $10,000 for the improvements. Mr. Ibarra has agreed in concept that $10,000 is a fair compensation, but understands it needs Board approval. The proposed agreement in concept includes the following points:   District and Cesar Ibarra agree in concept to the following, which are general terms for District obtaining an easement and the right to construct over Ibarra property so District may park generator in Calvert Avenue and provide emergency power to the Adams Sewer Pump Station: Board of Directors June 14, 2016 Page 3 of 4 1. District will compensate Cesar Ibarra $10,000 for a sewer easement and right to construct over Ibarra property at 2043 Calvert Avenue, Costa Mesa, the dimensions of the easement are approximately 3.0’-4.5’ wide along Ibarra’s easterly property line (width depends on District determining actual property line location along with meetings with neighbor) plus an approximate 4.5’ wide by 14.5’ strip along Ibarra’s southerly property line as shown on Proposed Easement Plan prepared by District. 2. The right to construct includes District expanding the block wall opening along Adams Avenue by 4’ to facilitate installing an automatic transfer switch (ATS) and cabinet on Adams Avenue at the District’s Adams Pump Station. Also included in the right to construct is installing a permanent underground conduit and cable from the ATS to Calvert Avenue, plus installing a 4’ high electrical box in the grass parkway of Calvert Avenue. As an alternate, the 4’ high electrical box may be installed at the backyard fence line. District will restore all damaged improvements on Ibarra property to an equal or better condition at no cost to Ibarra. 3. District and Ibarra will work cooperatively together on final design details, and District will work with Ibarra’s neighbor who appears to be encroaching onto Ibarra’s property with mow strip, landscape, and sprinkler system. 4. After the District’s Board of Directors approves the project in concept, District will advise Ibarra on the next steps to move forward. An Easement Agreement between CMSD and Mr. Ibarra would need approval from the Board and then recorded at the County of Orange. This project is not budgeted, so an appropriation of funds will also need to be approved by the board. Below is the estimated cost for this project. In order to fund the project, the proposed budget is as follows: Civil Design $ 7,500 Electrical Design $ 7,500 Construction $ 75,000 Easement Acquisition $ 10,000 Easement Map and Description $ 840 Contract Admin/Insp $ 7,500 Contingency $ 7,500 Total $115,840 Recommendation: $116,000 Board of Directors June 14, 2016 Page 4 of 4 Strategic Plan Element & Goal This item complies with Strategic Plan Element 1.0, Sewer Infrastructure and Goal No. 1.4 System Wide Sewer Replacement and Repair Program. The strategy for this Strategic Element is: ”We will do this by the careful management of the collection infrastructure using prudent planning and maintenance, with financial strategies to maintain sufficient capacity and respond to changing regulatory demands.” Legal Review Not applicable at this time; however, District Counsel will review and approve the easement agreement before presented to the Board. Environmental Review Acquiring the easement and constructing the improvements as described is categorically exempt from the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000 et. seq.) under Section 15301 as a “Class 1” “minor alteration of existing public or private structures”, as further described in Section (b) as “Existing facilities of both investor and publicly-owned utilities used to provide .... sewerage ...”. Financial Review The total estimated cost for this project is $116,000, which includes compensation to Mr. Ibarra for accessing the easement and final designs, construction and inspection costs. This project is not budgeted therefore the Board would have to approve an appropriation from Net Position of $116,000. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the June 14, 2016 Board of Directors study session meeting at District Headquarters and posted on the District’s website. Alternative Actions 1. Do not approve in concept the proposed improvements. 2. Do not approve the proposed compensation to Mr. Ibarra and direct staff to negotiate a lower amount. Attachments: A Picture and diagram of proposed project B Calculations C Proposed Easement Plan Reviewed by: Wendy Hooper Davis Finance Manager Adams Pump Station Proposed ATS Proposed Conduit and Cable Proposed Electrical Box Mobile Generator 2043 Calvert Land Value 15-16 Property Tax Bill $395,332.00 Property Area (70x100) SF 7,000 Per Square Foot Value $56.48 Estimated Area Effected SF 368 50% of Cost for Underground $20,754.93 Calculated Compensation $10,377.47 Costa Mesa Sanitary District ... an Independent Special District APN 415-102-17 (Parcel North of 1580-1590 Scenic Avenue) – Request for Vacation /Abandonment of CMSD Sewer and Easement Item Number:7. Recommendation/Notes: Recommendation: That the Board of Directors direct staff to bring back this item to the Board of Directors June 23, 2016 meeting to consider approving the following: 1. Accept the vacation in concept subject to the developer submitting a legal description and map of the Option 2 limits of vacation; and 2. Require the property owner to construct a new end of line sewer manhole at the northerly terminus of the remaining sewer and easement. ATTACHMENTS: Description Type APN 415-102-17 (Parcel North of 1580-1590 Scenic Avenue) – Request for Vacation /Abandonment of CMSD Sewer and Easement Cover Memo Protecting our community's health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum To: Board of Directors Via: Scott Carroll, General Manager From: Rob Hamers, District Engineer Date: June 14, 2016 Subject: APN 415-102-17 (Parcel North of 1580-1590 Scenic Avenue) Request for Vacation/Abandonment of CMSD Sewer and Easement Summary The property owner CJ Segerstrom & Sons, Inc., is requesting the District vacate a portion of an easement and sewer main to facilitate construction of a new commercial building on APN 415-102-17 located in the Harbor Gateway complex. Enclosed please find a letter of request, concept plan, and a title report. The developer has provided two options for the limits of the vacation and Staff supports Option 2 as described below. Should the Board deem Option 1 or Option 2 viable, the next step after today’s meeting would be to bring back the vacation resolution, map, and legal description for formal approval at the next regular meeting. The project developer requested Option 1, which is shown on the attachment and represents retaining a portion of the existing easement and sewer main on the new property all the way up to the new building with the idea that the available sewer would be just outside the new building. Option 2, which staff recommends, represents vacating 290 feet of 8-inch diameter sewer main and two sewer manholes, although the buyer/developer of the parcel will be required to construct a new end of line manhole. Options 1 and 2 are further discussed below. The current owner, CJ Segerstrom, has confirmed this portion of the property has always been vacant and is currently an open field. Segerstrom originally planned a series of small buildings but never followed through with the development. Staff Recommendation That the Board of Directors direct staff to bring back this item to the Board of Directors June 23, 2016 meeting to consider approving the following: Board of Directors June 14, 2016 Page 2 of 4 1. Accept the vacation in concept subject to the developer submitting a legal description and map of the Option 2 limits of vacation; and 2. Require the property owner to construct a new end of line sewer manhole at the northerly terminus of the remaining sewer and easement. Analysis Harbor Gateway is generally the area west of Harbor Blvd, east of Hyland Avenue and between MacArthur Blvd and Sunflower Avenue in the north south direction. The sewers were constructed in 1981 when the District’s policy was to have every property’s sewer lateral be directly connected to a District main, thereby resulting in quite a few CMSD sewer mains being located in District easements in the Harbor Gateway area. Today, so long as there is an HOA or Maintenance Association that can perform maintenance, on-site sewers serving multiple properties may be private. When the Harbor Gateway area was developed in 1981, the CMSD sewers and manholes were constructed by the developer and donated to the District along with the sewer easements. No compensation exchanged hands at that time. Regarding whether Option 1 or Option 2 as proposed by the property owner is more beneficial or appropriate, the following are reasons Option 2 is better for the District, the property owner, and the public: Reasons for Option 2  Option 1 leaves in place an 8” sewer main at less than 1% slope for just one building. There will be insufficient flow to keep the wastewater moving at the minimum velocity.  There will be a CMSD sewer manhole right outside the proposed building and it will have to be plugged and sealed at all times to prevent odor. The Option 1 request is being made by the buyer/developer of the property (not CJ Segerstrom) and it is believed the buyer/developer does not fully understand the ramifications of having a sewer manhole directly adjacent to the proposed building.  As part of grading for the new building, over-excavation and re-compaction of the soil above the sewer main will occur and is a likely cause for damage to the sewer main because the sewer main will be approximately 2.5’ below the bottom of grading, assuming 4’ deep over-excavation and re-compaction. Board of Directors June 14, 2016 Page 3 of 4  Option 1 does not save the developer much in terms of construction cost since Option 2 involves construction of a short run of 4” or 6” private sewer in the dirt.  Option 2 allows the developer to achieve 1% or more slope on the sewer, which is needed for self-cleaning.  The above points indicate from a future operations and maintenance standpoint and in an attempt to minimize sewer odors, Option 2 is far better for the development even though it will cost the developer slightly more than Option 1. The above points can be discussed in detail at the study session. Strategic Plan Element & Goal This item complies with Strategic Plan Element 1.0, Sewer Infrastructure and Goal No. 1.4 System Wide Sewer Replacement and Repair Program. The strategy for this Strategic Element is: ”We will do this by the careful management of the collection infrastructure using prudent planning and maintenance, with financial strategies to maintain sufficient capacity and respond to changing regulatory demands.” Legal Review Not applicable at this time; however, District Counsel may opine that vacating public asset is a gift of public funds. District Counsel’s opinion will be made available at the June 23rd Board of Directors meeting. Environmental Review Vacating a portion of a sewer main, manholes, and easement is categorically exempt from the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000 et. seq.) under Section 15301 as a “Class 1” “minor alteration of existing public or private structures”, as further described in Section (b) as “Existing facilities of both investor and publicly-owned utilities used to provide .... sewerage ...”. Financial Review The 290 linear feet (LF) of 8 inch sewer line and two manholes that the District is being asked to vacate were donated in 1982 as part of larger contributed capital donation. The book value recorded for the 290 LF and manholes in the District’s fixed assets was $45,774 and $8,147, respectively. These assets have a 60 year life and have been depreciated for the last 34 years, therefore the current value of both assets on the District’s books is $23,273. If the Board moves forward with the vacation request than the financial statements would show a loss on the disposal of assets for $23,273. Board of Directors June 14, 2016 Page 4 of 4 The Board may determine that this is not a gift of public funds since the assets were originally donated and there is value in not having to clean, maintain or replace these sewer line and manholes in the future. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the June 14, 2016 Board of Directors study session meeting at District Headquarters and posted on the District’s website. Alternative Actions 1. Direct staff to negotiate receiving compensation from developer for the current value of the proposed vacated infrastructure. 2. Approve Option 1. 3. Do not approve either options and direct staff to report back with more information. Attachments: Letter of Request, Title Report and Concept Map Reviewed by: Wendy Hooper Davis Finance Manager Chicago Title Company 4041 MacArthur, Suite 400, Newport Beach, CA 92660 Phone: (949) 724-3117 ● Fax: (949) 258-5237 CLTA Preliminary Report Form – Modified (11/17/06)Page 1 Issuing Policies of Chicago Title Insurance Company ORDER NO.: 00046720-002-LB Chicago Title Company 4041 MacArthur Blvd., Suite 400 Newport Beach, CA 92660 ATTN: Lorri Beasley Email: beasleyl@ctt.com Escrow/Customer Phone: (949) 724-3100 Title Officer: Susie George Title Officer Phone: (949) 724-3117 Title Officer Fax: (949) 258-5237 Title Officer Email: CTCommercialtitleNewport@ctt.com PROPERTY:N/A, COSTA MESA, CA 92626 PRELIMINARY REPORT In response to the application for a policy of title insurance referenced herein, Chicago Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a policy or policies of title insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an exception herein or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations or Conditions of said policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Attachment One. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner’s Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Attachment One. Copies of the policy forms should be read. They are available from the office which issued this report. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. The policy(s) of title insurance to be issued hereunder will be policy(s) of Chicago Title Insurance Company, a Nebraska Corporation. Please read the exceptions shown or referred to herein and the exceptions and exclusions set forth in Attachment One of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects and encumbrances affecting title to the land. Chicago Title Company By: Authorized Signature Chicago Title Company 4041 MacArthur, Suite 400, Newport Beach, CA 92660 Phone: (949) 724-3117 ● Fax: (949) 258-5237 CLTA Preliminary Report Form – Modified (11/17/06)Page 2 PRELIMINARY REPORT EFFECTIVE DATE:May 4, 2016 at 7:30 a.m. ORDER NO.: 00046720-002-LB The form of policy or policies of title insurance contemplated by this report is: ALTA Extended Owner's Policy (6-17-06) ALTA Extended Loan Policy (6-17-06) 1.THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS: A Fee 2.TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN: C. J. SEGERSTROM & SONS, a Partnership 3.THE LAND REFERRED TO IN THIS REPORT IS DESCRIBED AS FOLLOWS: See Exhibit A attached hereto and made a part hereof. PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB CLTA Preliminary Report Form – Modified (11/17/06)Page 3 EXHIBIT “A” LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF COSTA MESA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCELS 1 AND 2 AS DEPICTED ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. LL 92-02, RECORDED MAY 15, 1992 AS INSTRUMENT NO. 92-324395 OF OFFICIAL RECORDS. APN: 415-102-01 THROUGH 17 PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB CLTA Preliminary Report Form – Modified (11/17/06)Page 4 EXCEPTIONS AT THE DATE HEREOF, ITEMS TO BE CONSIDERED AND EXCEPTIONS TO COVERAGE IN ADDITION TO THE PRINTED EXCEPTIONS AND EXCLUSIONS IN SAID POLICY FORM WOULD BE AS FOLLOWS: A.Property taxes, which are a lien not yet due and payable, including any assessments collected with taxes to be levied for the fiscal year 2016-2017. Tax Identification No.: 415-102-01 through -17 B.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-01 Fiscal Year:2015-2016 1st Installment:$69.12, Paid 2nd Installment:$69.12, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 8 C.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-02 Fiscal Year:2015-2016 1st Installment:$69.12, Paid 2nd Installment:$69.12, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 9 D.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-03 Fiscal Year:2015-2016 1st Installment:$71.15, Paid 2nd Installment:$71.15, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 12 E.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-04 Fiscal Year:2015-2016 1st Installment:$67.09, Paid 2nd Installment:$67.09, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 13 PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB EXCEPTIONS (Continued) CLTA Preliminary Report Form – Modified (11/17/06)Page 5 F.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-05 Fiscal Year:2015-2016 1st Installment:$103.79, Paid 2nd Installment:$103.79, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 14 G.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-06 Fiscal Year:2015-2016 1st Installment:$67.09, Paid 2nd Installment:$67.09, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 15 H.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-07 Fiscal Year:2015-2016 1st Installment:$75.93, Paid 2nd Installment:$75.93, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 16 I.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-08 Fiscal Year:2015-2016 1st Installment:$69.12, Paid 2nd Installment:$69.12, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 11 J.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-09 Fiscal Year:2015-2016 1st Installment:$69.08, Paid 2nd Installment:$69.08, Paid Homeowners Exemption:$0.00 Code Area:15052 PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB EXCEPTIONS (Continued) CLTA Preliminary Report Form – Modified (11/17/06)Page 6 Affects:Lot 10 K.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-10 Fiscal Year:2015-2016 1st Installment:$71.15, Paid 2nd Installment:$71.15, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 7 L.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-11 Fiscal Year:2015-2016 1st Installment:$67.09, Paid 2nd Installment:$67.09, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 6 M.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-12 Fiscal Year:2015-2016 1st Installment:$103.79, Paid 2nd Installment:$103.79, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 3 N.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-13 Fiscal Year:2015-2016 1st Installment:$69.08, Paid 2nd Installment:$69.08, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 4 PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB EXCEPTIONS (Continued) CLTA Preliminary Report Form – Modified (11/17/06)Page 7 O.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-14 Fiscal Year:2015-2016 1st Installment:$75.93, Paid 2nd Installment:$75.93, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 5 P.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-15 Fiscal Year:2015-2016 1st Installment:$2,656.05, Paid 2nd Installment:$2,656.05, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 17 Q.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-16 Fiscal Year:2015-2016 1st Installment:$22,474.64, Paid 2nd Installment:$22,474.64, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 2 R.Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.:415-102-17 Fiscal Year:2015-2016 1st Installment:$1,264.41, Paid 2nd Installment:$1,264.41, Paid Homeowners Exemption:$0.00 Code Area:15052 Affects:Lot 1 S.The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy. 1.Water rights, claims or title to water, whether or not disclosed by the public records. 2.Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to:Southern California Edison Company PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB EXCEPTIONS (Continued) CLTA Preliminary Report Form – Modified (11/17/06)Page 8 Purpose:pole lines Recording Date:July 11, 1962 Recording No:Book 6173, page 413 of Official Records Affects:lots 1 and 17 3.Covenants, conditions and restrictions but omitting any covenants or restrictions, if any, including but not limited to those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, source of income, gender, gender identity, gender expression, medical condition or genetic information, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law, as set forth in the document Recording Date:October 7, 1977 Recording No:Book 12408, page 595 as Instrument No. 9329 of Official Records Said covenants, conditions and restrictions provide that a violation thereof shall not defeat the lien of any mortgage or deed of trust made in good faith and for value. Affects:A portion of the Land described herein. Modification(s) of said covenants, conditions and restrictions Recording Date:March 9, 1982 Recording No:82-081322 of Official Records 4.Easement(s) for the purpose(s) shown below and rights incidental thereto, as delineated on or as offered for dedication on Map/Plat:Tract No. 10876 Purpose:public utility Affects:Lots 2 and 17 Purpose:landscape Affects:Lots 1, 2 and 17 5.The ownership of said Land does not include rights of access to or from the street, highway, or freeway abutting said Land, such rights having been relinquished by said map/plat. Affects: Hyland Avenue and Mac Arthur Boulevard Except at Street intersections and approved driveway locations 6.Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to:Costa Mesa Sanitary District Purpose:sanitary sewer Recording Date:March 13, 1981 Recording No:Book 13981, page 1457 of Official Records Affects:A portion of Lot 17 7.This exception has been intentionally deleted. PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB EXCEPTIONS (Continued) CLTA Preliminary Report Form – Modified (11/17/06)Page 9 8.Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to:Pacific Telephone and Telegraph Company Purpose:Underground communication facilities Recording Date:November 9, 1981 Recording No:8857, in Book 14284, Page 1187, Official Records Affects:A portion of said land as more particularly described in said document. Affects:Portions of Lots 1, 2 and 17 9.The matters set forth in the document shown below which, among other things, contains or provides for: certain easements; liens and the subordination thereof; provisions relating to partition; restrictions on severability of component parts; and covenants, conditions and restrictions but omitting any covenants or restrictions, if any, including, but not limited to those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, source of income, gender, gender identity, gender expression, medical condition or genetic information, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law. Entitled:Declaration of Restrictions Recording Date:July 27, 1983 Recording No:83-323080 of Official Records Said covenants, conditions and restrictions provide that a violation thereof shall not defeat the lien of any mortgage or deed of trust made in good faith and for value. 10.Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to:Mesa Consolidated Water District Purpose:pipelines Recording Date:December 20, 1982 Recording No:82-445811 of Official Records Affects:The route thereof affects a portion of said land and is more fully described in said document. A portion of said easement was quitclaimed to C. J. Segerstrom & Sons by document recorded May 20, 1992 as Instrument No. 92-334548 of Official Records. 11.Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to:Southern California Edison Company Purpose:Underground electrical supply systems and communication systems Recording Date:May 17, 1990 Recording No:90-264697, Official Records Affects:A portion of said land as more particularly described in said document. Affects:A portion of Lot 2 PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB EXCEPTIONS (Continued) CLTA Preliminary Report Form – Modified (11/17/06)Page 10 12.Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to:Pacific Bell Purpose:Underground communication facilities Recording Date:June 11, 1990 Recording No:90-308262, Official Records Affects:A portion of said land as more particularly described in said document. Affects:A portion of Lot 2 13.Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to:Southern California Edison Company, a corporation Purpose:underground electrical supply systems and communication systems Recording Date:September 30, 1991 Recording No:91-0530869 of Official Records Affects:The route thereof affects a portion of said land and is more fully described in said document. 14.Reciprocal easements, for the purpose(s) shown below and rights incidental thereto as created by the following document: Document:Declaration of Easements Executed by:C. J. Segerstrom & Sons, a California general partnership Purpose:Vehicular and pedestrian access Recording Date:May 27, 1992 Recording No:92-353465, Official Records Affects:A portion of said land as more particularly described in said document. 15.Please be advised that our search did not disclose any open Deeds of Trust of record. If you should have knowledge of any outstanding obligation, please contact the Title Department immediately for further review prior to closing. 16.Any rights of the parties in possession of a portion of, or all of, said Land, which rights are not disclosed by the public records. The Company will require, for review, a full and complete copy of any unrecorded agreement, contract, license and/or lease, together with all supplements, assignments and amendments thereto, before issuing any policy of title insurance without excepting this item from coverage. The Company reserves the right to except additional items and/or make additional requirements after reviewing said documents. 17.Matters which may be disclosed by an inspection and/or by a correct ALTA/ACSM Land Title Survey of said Land that is satisfactory to the Company, and/or by inquiry of the parties in possession thereof. PLEASE REFER TO THE “INFORMATIONAL NOTES” AND “REQUIREMENTS” SECTIONS WHICH FOLLOW FOR INFORMATION NECESSARY TO COMPLETE THIS TRANSACTION. END OF EXCEPTIONS PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB CLTA Preliminary Report Form – Modified (11/17/06)Page 11 REQUIREMENTS SECTION 1.The Company will require a survey of the subject Land, which is in compliance with minimum technical standards, prepared by a duly registered and licensed surveyor. If the owner of the Land the subject of this transaction is in possession of a survey, the Company will require that said survey be submitted for review and approval; otherwise, a new survey, satisfactory to the Company, must be submitted to the Company for examination. In order to prevent delays, please furnish the survey at least 10 days prior to the close of this transaction. If an existing survey is to be relied upon, an affidavit from the seller(s)/mortgagor(s) must be furnished to the Company stating that no improvements have been made on the Land the subject of this transaction or adjacent thereto subsequent to the survey presented to the Company. The Company reserves the right to add additional items or make further requirements after review of the requested documentation. 2.Unrecorded matters which may be disclosed by an Owner’s Affidavit or Declaration. A form of the Owner’s Affidavit/Declaration is attached to this Preliminary Report/Commitment. This Affidavit/Declaration is to be completed by the record owner of the land and submitted for review prior to the closing of this transaction. Your prompt attention to this requirement will help avoid delays in the closing of this transaction. Thank you. The Company reserves the right to add additional items or make further requirements after review of the requested Affidavit/Declaration. END OF REQUIREMENTS PRELIMINARY REPORT Chicago Title Company YOUR REFERENCE: ORDER NO.: 00046720-002-LB CLTA Preliminary Report Form – Modified (11/17/06)Page 12 INFORMATIONAL NOTES SECTION 1.Note: The policy of title insurance will include an arbitration provision. The Company or the insured may demand arbitration. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. Please ask your escrow or title officer for a sample copy of the policy to be issued if you wish to review the arbitration provisions and any other provisions pertaining to your Title Insurance coverage. 2.Note: There are NO conveyances affecting said Land recorded within 24 months of the date of this report. END OF INFORMATIONAL NOTES Susie George/maf FNF Privacy Notice Effective: April 1, 2016 FIDELITY NATIONAL FINANCIAL PRIVACY NOTICE At Fidelity National Financial, Inc. and its majority-owned subsidiary companies (collectively, “FNF”, “our” or “we”), we value the privacy of our customers. This Privacy Notice explains how we collect, use, and protect your information and explains the choices you have regarding that information. A summary of our privacy practices is below. We also encourage you to read the complete Privacy Notice following the summary. Types of Information Collected. You may provide us with certain personal information, like your contact information, social security number (SSN), driver’s license, other government ID numbers, and/or financial information. We may also receive information from your Internet browser, computer and/or mobile device. How Information is Collected. 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If you have questions or wish to contact us regarding this Privacy Notice, please use FNF Privacy Notice Effective: April 1, 2016 you are accepting and agreeing to the terms of this Privacy Notice. the contact information provided at the end of this Privacy Notice. FIDELITY NATIONAL FINANCIAL, INC. PRIVACY NOTICE FNF respects and is committed to protecting your privacy. We pledge to take reasonable steps to protect your Personal Information (as defined herein) and to ensure your information is used in compliance with this Privacy Notice. This Privacy Notice is only in effect for information collected and/or owned by or on behalf of FNF, including collection through any FNF website or online services offered by FNF (collectively, the “Website”), as well as any information collected offline (e.g., paper documents). 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CCN does not share consumer information with third parties, other than those with which the mortgage loan servicer has contracted to interface with the CCN application. All sections of this Privacy Notice apply to your interaction with CCN, except for the sections titled Choices with Your Information, and Access and Correction. If you have questions regarding the choices you have with regard to your personal information or how to access or correct your personal information, contact your mortgage loan servicer. Access and Correction To access your Personal Information in the possession of FNF and correct any inaccuracies, please contact us by email at privacy@fnf.com or by mail at: Fidelity National Financial, Inc. 601 Riverside Avenue Jacksonville, Florida 32204 Attn: Chief Privacy Officer Your Consent To This Privacy Notice By submitting Personal Information and/or Browsing Information to FNF, you consent to the collection and use of information by FNF in compliance with this Privacy Notice. We reserve the right to make changes to this Privacy Notice. If we change this Privacy Notice, we will post the revised version on the Website. Contact FNF Please send questions and/or comments related to this Privacy Notice by email at privacy@fnf.com or by mail at: Fidelity National Financial, Inc. 601 Riverside Avenue Jacksonville, Florida 32204 Attn: Chief Privacy Officer Copyright © 2016. Fidelity National Financial, Inc. All Rights Reserved. EFFECTIVE AS OF APRIL 1, 2016 CA Discount Notice Effective Date: 1-10-2010 Notice of Available Discounts Pursuant to Section 2355.3 in Title 10 of the California Code of Regulations Fidelity National Financial, Inc. and its subsidiaries (“FNF”) must deliver a notice of each discount available under our current rate filing along with the delivery of escrow instructions, a preliminary report or commitment. Please be aware that the provision of this notice does not constitute a waiver of the consumer’s right to be charged the field rate. As such, your transaction may not qualify for the below discounts. You are encouraged to discuss the applicability of one or more of the below discounts with a Company representative. These discounts are generally described below; consult the rate manual for a full description of the terms, conditions and requirements for each discount. These discounts only apply to transaction involving services rendered by the FNF Family of Companies. This notice only applies to transactions involving property improved with a one-to-four family residential dwelling. FNF Underwritten Title Company FNF Underwriter CTC - Chicago Title Company CTIC - Chicago Title Insurance Company Available Discounts CREDIT FOR PRELIMINARY REPORTS AND/OR COMMITMENTS ON SUBSEQUENT POLICIES (CTIC) Where no major change in the title has occurred since the issuance of the original report or commitment, the order may be reopened within 12 months and all or a portion of the charge previously paid for the report or commitment may be credited on a subsequent policy charge within the following time period from the date of the report. DISASTER LOANS (CTIC) The charge for a lender’s Policy (Standard or Extended coverage) covering the financing or refinancing by an owner of record, within 24 months of the date of a declaration of a disaster area by the government of the United States or the State of California on any land located in said area, which was partially or totally destroyed in the disaster, will be 50% of the appropriate title insurance rate. CHURCHES OR CHARITABLE NON-PROFIT ORGANIZATIONS (CTIC) On properties used as a church or for charitable purposes within the scope of the normal activities of such entities, provided said charge is normally the church’s obligation the charge for an owner’s policy shall be 50% to 70% of the appropriate title insurance rate, depending on the type of coverage selected. The charge for a lender’s policy shall be 40% to 50% of the appropriate title insurance rate, depending on the type of coverage selected. EMPLOYEE RATE (CTC and CTIC) No charge shall be made to employees (including employees on approved retirement) of the Company or its underwritten, subsidiary title companies for policies or escrow services in connection with financing, refinancing, sale or purchase of the employees’ bona fide home property. Waiver of such charges is authorized only in connection with those costs which the employee would be obligated to pay, by established custom, as a party to the transaction. Attachment One (4-2-15) CA & NV ATTACHMENT ONE CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY – 1990 EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1.(a)Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b)Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2.Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3.Defects, liens, encumbrances, adverse claims or other matters: (a)whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b)not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c)resulting in no loss or damage to the insured claimant; (d)attaching or created subsequent to Date of Policy; or (e)resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4.Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated. 5.Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6.Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws. EXCEPTIONS FROM COVERAGE - SCHEDULE B, PART I This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: 1.Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2.Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof. 3.Easements, liens or encumbrances, or claims thereof, not shown by the public records. 4.Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5.(a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. 6.Any lien or right to a lien for services, labor or material not shown by the public records. CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE (12-02-13) ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE EXCLUSIONS In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning: a.building; b.zoning; c.land use; FNF Privacy Notice Effective: April 1, 2016 d.improvements on the Land; e.land division; and f.environmental protection. This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15. 3.The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17. 4. Risks: a.that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; b.that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; c.that result in no loss to You; or d.that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28. 5.Failure to pay value for Your Title. 6.Lack of a right: a.to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b.in streets, alleys, or waterways that touch the Land. This Exclusion does not limit the coverage described in Covered Risk 11 or 21. 7.The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency, or similar creditors’ rights laws. 8.Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 9.Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner’s Coverage Statement as follows: For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A. The deductible amounts and maximum dollar limits shown on Schedule A are as follows: Your Deductible Amount Our Maximum Dollar Limit of Liability Covered Risk 16: 1.00%% of Policy Amount Shown in Schedule A or $2,500.00 (whichever is less)$ 10,000.00 Covered Risk 18: 1.00%% of Policy Amount Shown in Schedule A or $5,000.00 (whichever is less)$ 25,000.00 Covered Risk 19: 1.00% of Policy Amount Shown in Schedule A or $5,000.00 (whichever is less)$ 25,000.00 Covered Risk 21: 1.00% of Policy Amount Shown in Schedule A or $2,500.00 (whichever is less)$ 5,000.00 2006 ALTA LOAN POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1.(a)Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i)the occupancy, use, or enjoyment of the Land; (ii)the character, dimensions, or location of any improvement erected on the Land; (iii)the subdivision of land; or (iv)environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b)Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2.Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3.Defects, liens, encumbrances, adverse claims, or other matters (a)created, suffered, assumed, or agreed to by the Insured Claimant; FNF Privacy Notice Effective: April 1, 2016 (b)not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c)resulting in no loss or damage to the Insured Claimant; (d)attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13 or 14); or (e)resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4.Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing- business laws of the state where the Land is situated. 5.Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-in-lending law. 6.Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction creating the lien of the Insured Mortgage, is (a)a fraudulent conveyance or fraudulent transfer, or (b)a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. 7.Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b). The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE (Except as provided in Schedule B - Part II,( t(or T)his policy does not insure against loss or damage, and the Company will not pay costs, attorneys’ fees or expenses, that arise by reason of: (PART I (The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: 1.(a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2.Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3.Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4.Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5.(a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6.Any lien or right to a lien for services, labor or material not shown by the Public Records. PART II In addition to the matters set forth in Part I of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage:) 2006 ALTA OWNER’S POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1.(a)Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i)the occupancy, use, or enjoyment of the Land; (ii)the character, dimensions, or location of any improvement erected on the Land; (iii)the subdivision of land; or (iv)environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b)Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2.Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3.Defects, liens, encumbrances, adverse claims, or other matters (a)created, suffered, assumed, or agreed to by the Insured Claimant; (b)not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c)resulting in no loss or damage to the Insured Claimant; (d)attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or FNF Privacy Notice Effective: April 1, 2016 (e)resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction vesting the Title as shown in Schedule A, is (a)a fraudulent conveyance or fraudulent transfer; or (b)a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5.Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage, and the Company will not pay costs, attorneys’ fees or expenses, that arise by reason of: (The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: 1.(a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2.Any facts, rights, interests, or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3.Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4.Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and that are not shown by the Public Records. 5.(a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6.Any lien or right to a lien for services, labor or material not shown by the Public Records. 7.(Variable exceptions such as taxes, easements, CC&R’s, etc. shown here.) ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (04-02-15) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys’ fees or expenses which arise by reason of: 1.(a)Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. (b)Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. 2.Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3.Defects, liens, encumbrances, adverse claims, or other matters (a)created, suffered, assumed, or agreed to by the Insured Claimant; (b)not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c)resulting in no loss or damage to the Insured Claimant; (d)attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or (e)resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4.Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing- business laws of the state where the Land is situated. 5.Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury, or any consumer credit protection or truth-in-lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26. 6.Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11. 7.Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11(b) or 25. FNF Privacy Notice Effective: April 1, 2016 8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6. 9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 27(b) of this policy. 10.Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 11.Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. MISC0220.doc – Owner’s Declaration (Rev. 05/05/15) OWNER'S DECLARATION The undersigned hereby declares as follows: 1.(Fill in the applicable paragraph and strike the other) a.Declarant ("Owner") is the owner or lessee, as the case may be, of certain premises located at ____________________________________________________________________________________, further described as follows: See Preliminary Report/Commitment No. 00046720-002-LB-SG4 for full legal description (the "Land"). b.Declarant is the ____________________________ of ______________________________________ ("Owner"), which is the owner or lessee, as the case may be, of certain premises located at __________________________________________________________________________________, further described as follows: See Preliminary Report/Commitment No. 00046720-002-LB-SG4 for full legal description (the "Land"). 2.(Fill in the applicable paragraph and strike the other) a.During the period of six months immediately preceding the date of this declaration no work has been done, no surveys or architectural or engineering plans have been prepared, and no materials have been furnished in connection with the erection, equipment, repair, protection or removal of any building or other structure on the Land or in connection with the improvement of the Land in any manner whatsoever. b.During the period of six months immediately preceding the date of this declaration certain work has been done and materials furnished in connection with upon the Land in the approximate total sum of $ , but no work whatever remains to be done and no materials remain to be furnished to complete the construction in full compliance with the plans and specifications, nor are there any unpaid bills incurred for labor and materials used in making such improvements or repairs upon the Land, or for the services of architects, surveyors or engineers, except as follows: . Owner, by the undersigned Declarant, agrees to and does hereby indemnify and hold harmless Chicago Title Company against any and all claims arising therefrom. 3.Owner has not previously conveyed the Land; is not a debtor in bankruptcy (and if a partnership, the general partner thereof is not a debtor in bankruptcy); and has not received notice of any pending court action affecting the title to the Land. 4.Except as shown in the above-referenced Preliminary Report/Commitment, there are no unpaid or unsatisfied mortgages, deeds of trust, Uniform Commercial Code financing statements, regular assessments, special assessments, periodic assessments or any assessment from any source, claims of lien, special assessments, or taxes that constitute a lien against the Land or that affect the Land but have not been recorded in the public records. There are no violations of the covenants, conditions and restrictions as shown in the above-referenced Preliminary Report/Commitment. 5.The Land is currently in use as ; occupy/occupies the Land; and the following are all of the leases or other occupancy rights affecting the Land: 6.There are no other persons or entities that assert an ownership interest in the Land, nor are there unrecorded easements, claims of easement, or boundary disputes that affect the Land. 7.There are no outstanding options to purchase or rights of first refusal affecting the Land. This declaration is made with the intention that Chicago Title Company (the "Company") and its policy issuing agents will rely upon it in issuing their title insurance policies and endorsements. Owner, by the undersigned Declarant, agrees to indemnify the Company against loss or damage (including attorneys fees, expenses, and costs) incurred by the Company as a result of any untrue statement made herein. I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed on at . Signature: Costa Mesa Sanitary District ... an Independent Special District Joint Study with Mesa Water District – Optimum Government Structure Item Number:8. Recommendation/Notes: Recommendation: That the Board of Directors direct staff to bring this item back on June 23, 2016 to consider appointing two directors and staff members to serve on Mesa Water’s Executive Committee and appropriate $15,000 to perform the study. ATTACHMENTS: Description Type Joint Study with Mesa Water District – Optimum Government Structure Cover Memo Protecting our community's health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum To: Board of Directors From: Scott Carroll, General Manager Date: June 14, 2016 Subject: Joint Study with Mesa Water District – Optimum Government Structure Summary Mesa Water District initiated a request to perform a joint study regarding the potential of creating an optimum government structure between our two agencies. Attached are Mesa Water’s written correspondences. Staff Recommendation That the Board of Directors direct staff to bring this item back on June 23, 2016 to consider appointing two directors and staff members to serve on Mesa Water’s Executive Committee and appropriate $15,000 to perform the study. Analysis On April 22, 2016 President Scheafer received a letter from Mesa Water’s President, Shawn Dewane, suggesting CMSD and MWD perform a jointly funded study that will analyze and consider options to reorganize into an optimal government structure for both agencies. In order to achieve meaningful results from the study, there are many issues that need to be discussed and vetted together by the two agencies, as pointed out in President Scheafer’s letter dated June 2, 2016 (see attachment). Mesa Water’s Request for Proposal (RFP) for the study, which is attached hereto, needs further discussion between the agencies in order to address the issues identified in President Scheafer’s June 2nd letter. However, Mesa Water District is planning to award the study to a consultant at a special board meeting on June 16, 2016. Board of Directors June 14, 2016 Page 2 of 3 Mesa Water is suggesting the two agencies can work collaboratively on their Executive Committee, which is subject to the Ralph M. Brown Act that requires posting of agendas and open meetings to the public. Staff is recommending the Board appoint two directors and the appropriate staff members to serve on the Committee. Strategic Plan Element & Goal This item complies with Strategic Element 3, Partnerships and Strategic Goal No. 3.2, Strengthen our ties with local governments, special districts and educational institutions. Legal Review Not applicable. Environmental Review Participation with Mesa Water District in an Executive Committee with the purpose as stated is in essence participation in a feasibility or planning study, which are statutorily exempt from the requirements of CEQA. Financial Review Mesa Water District estimates the study will cost $30,000; however, if the scope of work is expanded the cost could increase. If approved, CMSD will be responsible for paying half the costs or $15,000 or greater. This project is not budgeted so funds will have to be appropriated by the Board. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the June 14, 2016 Board of Directors study session meeting at District Headquarters and posted on the District’s website. Alternative Actions 1. Do not appoint two directors and staff members to serve on Mesa Water District’s Executive Committee. 2. Do not approve participating in a joint venture with Mesa Water District on a study regarding an optimum government structure. 3. Direct staff to report back with more information. Attachments A: Written Correspondences Reviewed by: Board of Directors June 14, 2016 Page 3 of 3 Wendy Hooper Davis Finance Manager BOARD OF DIRECTORS Shawn Dewane President Division V Ethan Temianka Vice President Division III Jim Atkinson Director Division IV Fred R. Bockmiller, Jr., P.E. Director Division I James R. Fisler Director Division II Paul E. Shoenberger, P.E. General Manager Phil Lauri, P.E. Assistant General Manager Coleen L. Monteleone Assistant General Manager District Secretary Andrew N. Hamilton District Treasurer Bowie, Arneson, Wiles & Giannone Legal Counsel Dedicated to Satisfying our Community’s Water Needs 1965 Placentia Avenue Costa Mesa, CA 92627 tel 949.631.1200 fax 949.574.1036 info@MesaWater.org MesaWater.org May 27, 2016 The Honorable Michael Scheafer President, Board of Directors Costa Mesa Sanitary District 628 West 19th Street Costa Mesa, CA 92627 Dear President Scheafer: Thank you for your letter, dated May 23, 2016, supporting the opportunity to collaboratively perform a study of the optimal government structure for serving customers of the Costa Mesa Sanitary District (CMSD) and Mesa Water District (Mesa Water®). We greatly appreciate CMSD’s willingness to engage in this joint effort. Mesa Water® recognizes that, in order to ensure transparency, this item will be discussed at your District’s headquarters on June 14, 2016 during a regularly scheduled and open to the public Study Session. At your request, we will postpone agendizing this item at our June 9, 2016 Board Meeting. Instead, we will hold an open Special Board Meeting on June 16, 2016 at 3:30 p.m., with an action item agendized to award the study to a consultant. Additionally, Mesa Water® accepts and sees value in your suggestion to form a joint committee. Our Executive Committee will be available to meet with you. This format allows more public openness and transparency than a typical ad hoc committee as we are subject to the agenda posting requirements. Mesa Water® would like to request that the first meeting take place prior to CMSD’s June 14, 2016 Study Session. We believe that two directors from each of our respective agencies, working collaboratively, can comprehensively address the concerns brought up in your May 23 letter regarding the specifics that such a joint study could necessitate. Mesa Water® wishes to address a few of those specifics prior to the first joint committee meeting by attaching to this letter a scope of work for the study and also a list of qualified consulting firms we invited to submit a proposal. We recognize, as your District does, very similar and rigorous guidelines in regards to budget timelines, procurement processes, and contract requirements and, as CMSD does, Mesa Water® takes all necessary steps in order to strictly abide by our Board’s directives and policies. As always, we look forward to your response in regards to this letter and to the attached scope of work. We will quickly accommodate the scheduling of a joint meeting and we thank you for your willingness to engage in the process of best serving the public. Sincerely, Shawn Dewane Paul E. Shoenberger, P.E. Mesa Water Board President Mesa Water General Manager c: CMSD Board of Directors Mesa Water Board of Directors Scott C. Carroll, CMSD General Manager Professional Services Request for Proposal Optimal Governance Structure Study of Costa Mesa Sanitary District and Mesa Water® District May 2016 Table of Contents i Table of Contents I. Background and Purpose 1 A. Mesa Water® Overview 1 B. Project Overview 1 C. Project Schedule 2 D. Key Project Elements 2 II. General Information 1 A. Proposal Submittal 1 B. Proposal Schedule 2 C. Project Inquiries 2 D. Contract and Terms 2 E. Sample Agreement 2 III. Proposal Requirements 3 A. General 3 B. Proposal Presentation 3 C. Proposal Format 4 IV. Evaluation Criteria and Selection Process 6 Attachments Appendix A: Professional Services Contract Appendix B: Professional Services Agreement Acceptance Forms Appendix C. Scope of Work Background and Purpose 1 I. Background and Purpose Mesa Water District (Mesa Water®) is requesting proposals from experienced firms to provide professional service for the Optimal Governance Structure Study (Study). The budgeted amount for services is $30,000. This Request for Proposal (RFP) provides information to enable firms to submit a proposal to provide professional services for the scope of work as detailed in Appendix C. A. Mesa Water® Overview Mesa Water®, a special district, was formed on January 1, 1960 as a result of the merger of four water agencies. Mesa Water® employs approximately 50 employees and is governed by a five-member Board of Directors elected by the constituents of five divisions within the service area. Mesa Water’s primary purpose is to manage and deliver water and water-related services to customers within its service area. Mesa Water® distributes a combination of imported water and local groundwater to approximately 23,500 retail accounts (population of over 108,000) in an 18 square mile area, which includes the city of Costa Mesa, parts of Newport Beach, and unincorporated areas of Orange County, including the John Wayne Airport. Mesa Water® predominately uses local groundwater, recycled water, and conservation to meet 100% of its demands. Mesa Water® operates five (5) clear water wells in the northern part of its service area, and treats amber-tinted water from the deep aquifer from two additional wells at the Mesa Water® Reliability Facility (MWRF). The MWRF wells are fully automated in the SCADA system. Mesa Water® has two storage reservoirs. Reservoirs 1 and 2 provide approximately 11 and 17 million gallons of storage, respectively. B. Project Overview The Costa Mesa Sanitary District and Mesa Water District (Mesa Water®) serve approximately the same service area. The object of this study is to analyze the potential benefits of combining the two Districts. A report documenting the analysis will be prepared. The detailed scope of work for this project is found in Appendix C. The Costa Mesa Sanitary District (CMSD) provides curbside trash collection and sewer services to residents in the city of Costa Mesa, portions of Newport Beach and unincorporated sections of Orange County. CMSD has received several awards, most notably the District of Distinction Accreditation by the Special District Background and Purpose 2 Leadership Foundation, one of the most prestigious local government awards in the state of California. Mesa Water® provides retail water service to almost all of the city of Costa Mesa, as well as portions of Newport Beach and unincorporated sections of Orange County including John Wayne Airport. Financially, Mesa Water® is AAA-rated by Standard and Poor’s and Fitch Ratings. Mesa Water® has received several awards including the District of Distinction Accreditation by the Special Districts Leadership Foundation. C. Project Schedule Notice to Proceed (NTP) to the selected firm is expected Thursday, June 16, 2016. • Report due four (4) weeks later on Thursday, July 14, 2016 D. Key Project Elements The detailed scope of work for this project is found in Appendix C. End of Section General Information 1 II. General Information This RFP information packet contains instructions governing the proposals to be submitted and the material to be included therein; a description of the project and specific services to be provided; general evaluation criteria; and other pertinent information. The submission of this proposal shall be considered evidence that the proposer has and is in acceptance with this RFP. Any modifications or changes made in this RFP will be made in writing in the form of an addendum issued by Mesa Water®. All proposers will receive written notice of any changes or modifications, which may be made by Mesa Water®. Oral communications from Mesa Water® personnel or others concerning this RFP shall not be binding on Mesa Water® and shall not in any way be considered as a commitment by Mesa Water®. A. Proposal Submittal Submit one electronic copy of the proposal via email or to the address listed below no later than Friday, June 10, 2016 at 12:00 p.m. After this date and time proposals will not be accepted. Faxed proposals will not be accepted. Postmarks will not be accepted in lieu of actual receipt. The proposed Fee Schedule is to be submitted with the proposal. Proposals are to be submitted to: Paul Shoenberger Mesa Water District 1965 Placentia Avenue, Costa Mesa, CA 92627 pauls@mesawater.org All materials submitted in accordance with this Request for Proposal (RFP) become the property of Mesa Water® and will not be returned. The material may become public record subject to the disclosure provisions of the Public Records Act (Government Code Section 6250 et seq.). General Information 2 B. Proposal Schedule The following proposal timeframe is listed below: Release of RFP Friday, May 27, 2016 Deadline for Project Inquiries Thursday, June 2, 2016 Response to Project Inquiries Friday, June 3, 2016 Proposals Due Date Friday, June 10, 2016 at 12:00 p.m. Tentative Date for Award Thursday, June 16, 2016 C. Project Inquiries Inquiries regarding this RFP must be requested via email at deniseg@mesawater.org. The deadline for inquiries is Thursday, June 2, 2016. D. Contract and Terms Prior to the commencement of services, the selected Consultant awarded the contract will be required to execute a Professional Services Agreement (Sample Agreement: Appendix A) between itself and Mesa Water®. The contract shall incorporate the scope of work defined herein and all RFP terms and conditions. Portions of the Consultant’s proposal may be considered for inclusion into the scope of work at Mesa Water’s discretion. The selected Consultant will not be permitted to levy any service or other charges against Mesa Water®, other than those listed in Appendix C Scope of Work, without being previously negotiated with Mesa Water®. E. Sample Agreement A Sample Agreement has been attached for review in Appendix A. This agreement is representative of the agreement that will be executed upon award to the successful Proposer. Mesa Water does not make changes to agreement terms and conditions. Submission of your proposal in response to this RFP constitutes your acceptance of all Terms & Conditions set forth in this Sample Agreement. Please indicate that the Sample Professional Services Agreement has been reviewed and will execute it with no exceptions if selected by signing and dating the Professional Services Agreement Acceptance Form (Appendix B). End of Section Proposal Requirements 3 III. Proposal Requirements A. General 1. All interested and qualified offerors are invited to submit a proposal for consideration. Submission of a proposal indicates that you have read and understand the entire RFP, to including all appendices, schedules, and addendums (as applicable), and that all concerns regarding the RFP have been satisfied. 2. Emphasis should be concentrated on conformance to the RFP instructions, responsiveness to the RFP requirements, and on completeness and clarity of content. 3. All proposals and materials submitted become property of Mesa Water®. 4. Responses are to be clear and complete. Be as specific as possible and include explanations where necessary. B. Proposal Presentation 1. Each page, including attachments, must be clearly and consecutively numbered at the bottom center of each page. 2. The technical proposal sections shall be clearly identified matching the outline in Section III-C. 3. Emailed proposals shall be send to the email address documented in Section II-A. Hand carried proposals may be delivered to the address documented in Section II-A during normal business hours, Monday through Friday, excluding holidays observed by Mesa Water®. Offerors are responsible for informing any commercial delivery service, if used, of all delivery requirements, and for ensuring that the address information appears on the outer envelope, container, or package used by such service. Proposal Requirements 4 C. Proposal Format Offerors must provide this information in the following format: Proposal Cover Page The outline below is to be used as the cover page for the proposal. These items must be fully completed and signed by an authorized officer of the business entity. • Name of Business/Company: • Business/Company Address: • Telephone Number(s): • Email Address: • Website Address: • Federal Tax ID Number: • Type of Business (Sole Proprietorship; Partnership; Corporation; or Other (Explain): • Number of Years in Business: • Name, title, telephone number and, if different, address of person(s) authorized to represent business entity: • Name, title, telephone number and, if different, address of person(s) authorized to sign contracts for the business entity: Section 1. Firm Qualifications This section should establish the firm’s ability to perform the required work to the expectations of Mesa Water®. Narrative should include the consulting firm’s background, including main business focus, length of time in business, number of employees, location that will primarily support the project. Areas to focus on include: • Introduction to the firm • Strength and stability of firm • Overview of the firm’s capabilities in project scope • Provide a description of three projects similar to this scope of work that have been completed for public agencies, water districts, federal government, non-profit organizations, or private companies. Include the name of the organization, and the address, name, email, and telephone number for the owner’s point of contact. Note the relevance of each project to the objectives of this project. Brief descriptions of additional projects that demonstrate the firm’s track Proposal Requirements 5 record to perform the required services may be included in tabular format. • Provide reasoning why the prospective firm would be the best choice for providing services as described in the RFP for Mesa Water®. Section 2. Staff Experience This section should introduce the key staff that the firm shall commit to the project. The section shall include: • An Organizational Chart that shows the Project Manager, Task Leaders, and other key team members. If the Project Manager is not an Officer of the firm, include a Project Director that is authorized to sign contracts for the firm. • Biographical sketches of each staff member that consultant expects to lead each task. Section 3. Scope of Work Understanding and Schedule The firm should clearly state its understanding of the project objectives, scope of work and anticipated deliverables. Section 4. Fee Schedule Fee Schedule for all items listed in this Request For Proposal (RFP) shall include all labor, transportation, administrative, overhead, incidentals, etc. and all other items as listed in the scope of work. Appendix A. Resumes of Key Staff Include resumes of key staff. Limit each resume to two (2) pages. Appendix B. Professional Services Agreement Acceptance Form Include the signed Professional Services Agreement form from Appendix B of this RFP. End of Section Evaluation Criteria and Selection Process 6 IV. Evaluation Criteria and Selection Process A Selection Team established by the Project Manager will review, evaluate, and score the proposals. The scoring system will be based on a scale of 1 to 5 with 5 being the most favorable score. The Evaluation Team shall evaluate the proposals based upon the following weighted criteria: Criteria Weight Company Qualifications and Experience 30 Staff Qualifications and Experience 30 Understanding of Scope of Work to be Performed 30 Proposal Quality 10 The Selection Team may ask for further clarification of the submitted cost prior to completing the selection rankings. Mesa Water® reserves the right to reject any and all proposals for any reason. Mesa Water® may not proceed, for any reason, with the selection process of a proposer if Mesa Water® deems it is in the best interest of the organization. Mesa Water® shall not be responsible to any of the submitters for the cost to prepare their proposal in response to this RFP. Proposals must include the entire scope of work as outlined in this RFP. End of Section Appendix A: Professional Services Contract Appendix A: Professional Services Contract Page 1 of 14 Click here to enter text., Click here to enter a date. PROFESSIONAL SERVICES CONTRACT THIS CONTRACT (Contract) is entered into on Click here to enter a date. by and between Mesa Water District, hereinafter called “Mesa Water®”, and Click here to enter text., hereinafter called “Consultant.” WHEREAS, Mesa Water® desires certain services hereinafter described and Consultant is capable of providing and desires to provide such service. NOW, THEREFORE, Mesa Water® and Consultant, for the consideration and upon the terms and conditions hereinafter specified, agree as follows: SECTION I SCOPE OF SERVICES 1.1 The services to be performed under this Contract are as described in Appendix One hereunto attached and by this reference made a part hereof. In the event that a conflict or contradiction is discovered between the proposal language and Mesa Water’s standard contract terms, Mesa Water’s standard contract terms shall prevail. Such service shall be performed by individuals as employees of the Consultant, as an independent consultant, and not by or as employees of Mesa Water®. SECTION II DUTIES OF CONSULTANT 2.1 Standards. All work performed by Consultant or under its direction shall be sufficient to meet the purposes specified therefor and shall be rendered in accordance with the accepted practices and to the standards of Consultant’s profession. All service hereunder shall be performed by employees or agents of Consultant who are experienced and skilled in their business and in accordance with the standards of work in their respective professions. Consultant’s findings, recommendations and professional advice shall be based on practices and procedures customary in its profession. Consultant shall provide additional services needed to correct any deficiency in its work at no additional costs or expense to Mesa Water®. 2.2 Additional Work. Consultant shall not undertake any work beyond the scope of this Contract unless such additional work is approved in advance and in writing by Mesa Water®. The cost of such additional work shall be reimbursed to Consultant by Mesa Water® on the same basis as provided in Section IV. 2.3 Security and Safety. If, in the prosecution of the work, it is necessary to conduct field operations, security and safety of the job site will be the responsibility of Consultant, excluding, nevertheless, the security and safety of any facility of Mesa Water® within the job site, but not under the control of Consultant. Page 2 of 14 Click here to enter text., Click here to enter a date. In providing its services hereunder, Consultant shall not be responsible for identification, handling, containment, abatement, or in any other respect, for any asbestos or hazardous material if such is present in connection with the project. In the event that Mesa Water® becomes aware of the presence of asbestos or hazardous material at the job site, Mesa Water® shall be responsible for complying with all applicable federal and state rules and regulations and shall immediately notify Consultant, which shall then be entitled to cease any of its services that may be affected by such presence, without any liability to Consultant arising therefrom. 2.4 Consultations. Consultant shall meet with Mesa Water® personnel, or third parties as necessary, on all matters connected with carrying out of Consultant’s services described in Appendix One. Such meetings shall be held at the request of either party hereto. Review and Mesa Water® approval of completed work shall be obtained monthly, or at such intervals as may be mutually agreed upon, during the course of this work. 2.5 Data. Consultant agrees that all data and information, including without limitation specifications, designs, drawings, reports, and blueprints, generated in the performance of this Contract and data and information that are specified to be delivered or which are, in fact, delivered pursuant to this Contract shall be and remain the sole property of Mesa Water®. Consultant understands and agrees that all rights under copyright and patent laws under this Contract to drawings, records, data or other work product belong to Mesa Water®, unless otherwise stated. Consultant hereby assigns any and all rights under copyright and patent law to Mesa Water® and agrees to assist Mesa Water® in perfecting the same. Consultant shall deliver all records, drawings, data, information and work product resulting from this Contract to Mesa Water® upon Mesa Water’s request and in any event upon the completion of all work hereunder or the termination or expiration hereof, whichever shall first occur, and shall be fully responsible for the care and protection thereof until such delivery. Except as otherwise provided in this Contract, said documents shall be delivered to Mesa Water® without additional cost to Mesa Water®. SECTION III DUTIES OF MESA WATER® 3.1 Provision of Information. Mesa Water® shall make available to Consultant all data and information in the possession of Mesa Water® which Mesa Water® deems necessary to the preparation of the work, and Mesa Water® shall actively aid and assist Consultant in obtaining such information from other agencies and individuals. Except as specifically provided in the scope of services, Consultant shall be entitled to rely upon the accuracy of data and information provided by Mesa Water® or others without independent review or evaluation. 3.2 Review of Progress of Work. Mesa Water® Management may authorize a staff person as a representative to confer with Consultant relative to Consultant’s services hereunder. The work in progress hereunder shall be reviewed from time to time by Page 3 of 14 Click here to enter text., Click here to enter a date. Mesa Water® at the discretion of Mesa Water® or upon the request of Consultant. If the work is satisfactory, it will be approved. If the work is not satisfactory, Mesa Water® will inform Consultant of the changes or revisions necessary to secure approval. SECTION IV FEES AND PAYMENTS 4.1 Payment Schedule. Payment for the services hereinabove described shall be made upon a schedule and within the limit or limits shown upon Appendix Two hereunto attached and made a part hereof, and such payment shall be considered as full compensation for all personnel, materials, supplies, and equipment used in carrying out the work. In the event that a conflict or contradiction is discovered between the proposal language and Mesa Water’s standard contract terms, Mesa Water’s standard contract terms shall prevail. 4.2 Statements. Unless otherwise specified in said Appendix Two, Consultant’s fees shall be payable on monthly statements; such statements shall give a detail of time worked by each class of employee, services (or tasks) performed, and the itemized expenses incurred and accompanied by receipts for which billing is made and shall contain the following affidavit signed by a principal of the firm of Consultant: “I hereby certify as principal of the firm of that the charge of $ as summarized above and shown in detail on the attachments is fair and reasonable, is in accordance with the terms of the Contract dated , 20 , and has not been previously paid.” Compensation is clearly outlined in Appendix Two. This information includes rates by individual/title grouping, the not-to-exceed amount of the Contract, whether the payments will be periodic or paid in a lump sum, and a list of expenses for which the Consultant(s) will, or will not, be reimbursed. Page 4 of 14 Click here to enter text., Click here to enter a date. SECTION V CHANGES IN WORK 5.1 Extra/Changed Work. Mesa Water® may order major changes in scope or character of the work, either decreasing or increasing the amount of Consultant’s services. Increased compensation for major changes shall be determined in accordance with Appendix Two hereof, or as otherwise agreed to, in writing, between the parties. 5.2 Change of Schedule. In the event that major changes are ordered, the schedule for completion as stated in Appendix Three hereto will be adjusted by negotiation between Consultant and Mesa Water®. 5.3 Change Authorization. No representative of Mesa Water®, other than the General Manager, is authorized to obligate Mesa Water® to pay the cost or value of services beyond the scope thereof as herein described. SECTION VI TIME OF BEGINNING AND SCHEDULE FOR COMPLETION 6.1 Commencement of Work. Consultant shall begin work upon receipt by it of written Notice to Proceed from Mesa Water® Management which said notice shall not be issued until after this Contract has been approved and authorized by Mesa Water®. 6.2 Completion Schedule. The schedule for completion of the work shall be as shown upon Appendix Three hereunto attached and made a part hereof. Consultant shall complete the work set forth in Appendix One in accordance with the schedule for completion shown in Appendix Three. 6.3 Suspension of Services. Mesa Water® may, at any time and without cause, suspend all or a portion of the services of Consultant for a period of not more than ninety (90) days by notice in writing to Consultant. Consultant shall resume the service on receipt from Mesa Water® of a notice of resumption of services. Any change to the contract, price or time of completion sought by Consultant as a result of suspension hereunder, shall be processed as a change order under the provisions of Section V hereof. SECTION VII DELAYS AND EXTENSIONS 7.1 Delays. In the event Consultant is delayed in performance of its services by circumstances beyond its control, it will be granted a reasonable adjustment in the Schedule for Completion as described in Appendix Three. All claims for adjustments in the Schedule for Completion must be submitted to Mesa Water® by Consultant within thirty (30) calendar days of the time of occurrence of circumstances necessitating the adjustment. Page 5 of 14 Click here to enter text., Click here to enter a date. SECTION VIII TERMINATION 8.1 Termination by Owner. Mesa Water® may terminate this Contract at any time by giving Consultant written notice thereof. Upon termination, Consultant will be paid for that portion of the work completed prior to termination. 8.2 Termination by Consultant. Consultant may terminate this Contract upon written notice to Mesa Water® should Mesa Water® fail to fulfill duties as set forth in Section III. 8.3 Effect Upon Records. Upon termination, Consultant shall turn over to Mesa Water® all of the documents, records, papers and other work product related to this Contract, which shall, at the option of Mesa Water®, become Mesa Water® property. Mesa Water® shall not be liable for any costs other than as specified in this Contract. 8.4 Examination of Records. Mesa Water® shall, until the expiration of three (3) years after final payment under this Contract, have access to and the right to examine any directly pertinent books, documents, papers and records of Consultant involving transactions related to this Contract. 8.5 Change in Consultant’s Status. The financial capability and status of Consultant were substantial inducements for Mesa Water® to enter into this Contract. Therefore, Consultant shall, and hereby specifically acknowledges its duty to do so, notify Mesa Water® of any significant financial change, or significant change in status of Consultant within seven (7) days of significant financial change or significant change in status. “Significant financial change” or “significant change in status” shall mean the following: • Any action(s) by which Consultant shall consolidate with, merge, or convert the Consultant into another (partnership or corporation), • Any filing of bankruptcy by the Consultant (or any of its partners), • Loss of Consultant’s professional qualifications, and • The fact that Consultant is no longer in compliance with federal or state equal opportunity laws. SECTION IX ATTORNEYS’ FEES 9.1 If either party brings an action or proceeding against the other party by reason of default of any term or condition of this Contract, or otherwise arising out of this Contract, the prevailing party in such action or proceeding shall be entitled to recover, as an element of its cost of suit, and not as damages, reasonable attorneys’ fees, which shall be payable whether or not such action is prosecuted to judgment. The “prevailing party” as the term is used herein, shall be the party who is entitled to recover costs of suit, whether or not such suit proceeds to final judgment, and shall include, without limitation, a party who dismisses an action for recovery hereunder in exchange for payment of the Page 6 of 14 Click here to enter text., Click here to enter a date. sums allegedly due, performance of covenants allegedly breached, or considerations substantially equal to the relief sought in such action. SECTION X INDEMNIFICATION/HOLD HARMLESS 10.1 Consultant shall be solely responsible for any injury or damage to any person or property howsoever occasioned by or arising out of Consultant’s willful misconduct or negligent performance of the work hereunder. Consultant shall assume the defense and indemnify and hold harmless Mesa Water®, its officers, directors, agents and employees, from every claim, expense, liability, or payment for any such injury or damage. SECTION XI INSURANCE 11.1 Insurance requirements shall be as set forth in Appendix Four hereto attached. SECTION XII MISCELLANEOUS PROVISIONS 12.1 Gratuities. Consultant warrants that neither it nor any of its employees, agents, or representatives has offered or given any gratuities to Mesa Water’s employees, agents, or representatives with a view toward securing this Contract or securing favorable treatment with respect thereto. 12.2 Interpretation. The parties hereto acknowledge and agree that each has been given the opportunity to independently review this Contract with legal counsel, and/or has the requisite experience and sophistication to understand, interpret, and agree to the particular language of the provisions of this Contract. 12.3 Project Manager. Mesa Water® Management reserves the right to approve the project manager assigned by Consultant to said work. 12.4 Limitation on Assignment. This Contract shall not be assigned without first obtaining the express written consent of Mesa Water®. 12.5 Status of Consultant. Consultant is employed to render a professional service only and any payments made to Consultant are compensation solely for such services as Consultant may render. Consultant shall at all times retain the status of an independent consultant with Mesa Water®. Nothing within this Contract shall be construed so as to make Consultant, or any of its agents or employees, the employee(s), partner(s), or joint venturer(s) of or with Mesa Water®. Page 7 of 14 Click here to enter text., Click here to enter a date. 12.6 Licensing. Consultant warrants that they have complied, and shall comply, with any and all applicable state licensing requirements. 12.7 Entire Contract. This Contract supersedes any and all other Contracts, either oral or in writing, between the parties hereto with respect to the subject matter hereof, and no other Contract, statement, or promise related to the subject matter of this Contract which is not contained in this Contract shall be valid or binding. 12.8 Ownership of Work. All work performed pursuant hereto shall, upon completion, become the property of Mesa Water®. In the event the work is not completed, the completed portions thereof shall become the property of Mesa Water®. 12.9 Waiver. Either party to this Contract may specifically and expressly waive, in writing, compliance by the other party hereto with any term, condition or requirements set forth in this Contract. Either party to this Contract may specifically and expressly waive, in writing, any breach of any term, condition, or requirement of this Contract by the other party hereto. However, in the event that either party makes or gives such a waiver, such action shall not constitute a further or continuing waiver of any preceding or succeeding breach, or requirement of compliance with, the same or any other provision or contractual requirement, unless a specific statement to the contrary is contained within such waiver. The waiving party may, at any time thereafter, require further compliance by the other party hereto with the requirements or provisions of this Contract that have been so waived. The consent of one party to any act by the other party for which such written consent was required shall not be deemed to imply consent or waiver of the necessity of obtaining such written consent for the same or similar acts in the future. No waiver or consent shall be implied from the silence or from the failure of any party to an act, except as otherwise specified in this Contract. 12.10 Notices. Any notice, request, demand, consent or approval, or other communication required or permitted hereunder by law, shall be validly given and made only if in writing and delivered in person to an officer or duly authorized representative of the party, or deposited in the United States mail, first class postage prepaid, and addressed to the party for whom intended as follows: To Mesa Water®: Mesa Water District Attention: General Manager 1965 Placentia Costa Mesa, CA 92627 To Consultant: Click here to enter text. Attention: Click here to enter name. Click here to enter address. Click here to enter City/State/Zip. 12.11 Jurisdiction. The parties hereby understand and agree that this Contract, and the attachments hereto, have been negotiated and executed in the State of California and shall be governed by, and construed under, the laws of the State of California. The parties hereto do expressly agree that in the event of a dispute concerning the terms Page 8 of 14 Click here to enter text., Click here to enter a date. hereof, venue for any legal action shall be with the appropriate court of the County of Orange, State of California. 12.12 Amendments. No addition to, or modification of, any provision contained in this Contract shall be effective unless fully set forth in writing signed by the authorized representative of both of the parties hereto. 12.13 Signatories. The signatories hereto do warrant that they are appropriately authorized to execute this Contract on behalf of the party for which they signed. IN WITNESS WHEREOF, the parties have executed this Contract the day first hereinabove written. CONSULTANT MESA WATER DISTRICT By: By: Principal Paul E. Shoenberger, P.E., General Manager Print Name: Board Approved: Click here to enter the Board Approved date. Page 9 of 14 Click here to enter text., Click here to enter a date. APPENDIX ONE SCOPE OF SERVICES In the event that a conflict or contradiction is discovered between the proposal language and Mesa Water’s standard contract terms, Mesa Water’s standard contract terms shall prevail. The description of services should very clearly define the exact nature of the service, or services, to be provided by the consultant and/or an end product (where the Contract provides for an end product rather than a specific list of services). It is very important to include as much specificity as possible relative to the services to be provided so that in the event of a dispute or a disagreement over the nature of the services to be provided, a specific listing or description can be referred to. Page 10 of 14 Click here to enter text., Click here to enter a date. APPENDIX TWO FEE SCHEDULE In the event that a conflict or contradiction is discovered between the proposal language and Mesa Water’s standard contract terms, Mesa Water’s standard contract terms shall prevail. Mesa Water’s payment terms are Net 30. Clearly spell out the amount and type of compensation to be paid to the consultant. This should include rates by individual/title grouping, the not-to-exceed amount of the contract, whether the payments will be periodic or paid in a lump sum, hourly rates if applicable, retentions, if any, and a list of expenses for which the consultant will, or will not, be reimbursed. Page 11 of 14 Click here to enter text., Click here to enter a date. APPENDIX THREE SCHEDULE FOR COMPLETION Clearly list the timeline for progress upon the work and for completion of the project(s) that are expected. If the Professional Services Contract is open-ended (i.e., for provision of services from time-to-time without a finite final completion date), then Appendix Three should specify a term at which it will conclude or at which the parties could decide to renew the contract. Under Section VIII, the Contract may be terminated at the election of either party. If some other form of termination provision is desired, this should be included in Section VIII of the Contract. Page 12 of 14 Click here to enter text., Click here to enter a date. APPENDIX FOUR INSURANCE REQUIREMENTS The following coverages (below) will be provided by Consultant and maintained on behalf of Mesa Water®, its directors, officers, employees, and authorized volunteers in accordance with the requirements set forth herein. Commercial General Liability Insurance. Primary coverage shall be provided on Insurance Services Office CGL form No. CG 00 01 11 85 or 88. Policy limits shall be no less than one million dollars per occurrence for all coverages and two million dollars general aggregate applicable exclusively to this project. There shall be no cross liability exclusion. Coverage shall apply on a primary non-contributing basis in relation to any other insurance or self-insurance (primary or excess) available to Mesa Water®, its directors, officers, employees, and authorized volunteers. General liability insurance will not be limited to coverage for the vicarious liability or the supervisory role of the additional insureds. Coverage for the additional insureds shall apply to the fullest extent permitted by law excepting only the active negligence of Mesa Water® as established by agreement between the parties or by the findings of a court of competent jurisdiction. Mesa Water®, its directors, officers, employees, and authorized volunteers shall be added as insureds using Insurance Services Office additional insured endorsement form CG 20 10 11 85. Business Auto Coverage. Primary coverage shall be written on Insurance Services Office Business Auto Coverage form CA 00 01 06 92 including owned, non-owned, and hired autos. Limits shall be no less than one million dollars per accident. This policy shall be scheduled as underlying insurance to any umbrella policy as applicable. If Consultant owns no autos, a non-owned auto endorsement to the General Liability policy described above is acceptable. Workers’ Compensation/Employer’s Liability shall be written on a policy form providing workers’ compensation statutory benefits as required by law. Employer’s liability limits shall be no less than one million dollars per accident or disease. Unless otherwise agreed, this policy shall be endorsed to waive any right of subrogation as respects Mesa Water®, its directors, officers, employees, and authorized volunteers. By the signatures hereunder, each party certifies that it is aware of the provision of Section 3700 of the California Labor Code which requires every employer (and their consultants and subcontractors) to be insured against liability for workers’ compensation or to undertake self insurance in accordance with the provisions of that code, and it will comply with such provisions before commencing the performance of the work of this Contract. Professional Liability or Errors and Omissions Insurance. Coverage 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 Contract. Any policy exclusions affecting work performed under this Contract (such as lead, asbestos, testing, soil work, laboratory analysis, etc.) must be deleted. The policy limit shall be no less than one million dollars per claim and in the aggregate. The limit must be separate from other project limits and applicable to this project only. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer’s duty to defend. Coverage shall apply on a primary non-contributing basis in relation to any other insurance or self-insurance (primary or excess) available to Mesa Page 13 of 14 Click here to enter text., Click here to enter a date. Water®, its directors, officers, employees, and authorized volunteers. If the work contemplated by this Contract includes any asbestos removal, identification or other treatment, any failure to detect asbestos exclusion must be deleted. Exclusions for any claims arising out of suspected deficiency, or the malfunction of any products, process technique, system, or piece of equipment sold, procured, or otherwise furnished, is to be deleted. General conditions pertaining to provision of insurance coverage. Consultant and Mesa Water® agree to the following provisions regarding insurance provided: 1. Consultant agrees to provide insurance in accordance with the requirements set forth here. If Consultant uses existing coverage to comply with these requirements and that coverage does not meet the requirements set forth herein, Consultant agrees to amend, supplement, or endorse the existing coverage to do so. In the event any policy of insurance required under this Contract does not comply with these requirements or is canceled and not replaced, Mesa Water® has the right, but not the duty, to obtain the insurance it deems necessary and Consultant will promptly reimburse any premium paid by Mesa Water®. 2. All insurance coverage and limits provided by Consultant and available or applicable to this Contract are intended to apply to the full extent of the policies. Nothing contained in this Contract or any other contract relating to Mesa Water® or its operations limits the application of such insurance coverage. 3. Unless otherwise approved by Mesa Water®, insurance provided pursuant to these requirements shall be written by insurers authorized to do business in the State of California and with a minimum “Best’s” Insurance Guide rating of A-:VII. Self-insurance will not be considered to comply with these insurance specifications. 4. Any “self-insured retention” must be declared and approved by Mesa Water®. Mesa Water® reserves the right to require the self-insured retention to be eliminated or replaced by a deductible. Self-funding, policy fronting, or other mechanisms to avoid risk transfer are not acceptable. If Consultant has such a program, Consultant must fully disclose such program to Mesa Water® before any notice to proceed is issued. 5. Consultant agrees to provide evidence of the insurance required herein, satisfactory to Mesa Water®, consisting of: a) certificate(s) of insurance evidencing all of the coverages required and, b) an additional insured endorsement to Consultant’s general liability policy using Insurance Services Office form CG 20 10 11 85. Consultant agrees, upon request by Mesa Water®, to provide complete, certified copies of any policies required by this section, within ten days of such request. Any actual or alleged failure on the part of Mesa Water® or any other additional insured under these requirements to obtain proof of insurance required under this Contract in no way waives any right or remedy of Mesa Water® or any additional insured, in this or any other regard. 6. Certificate(s) are to reflect that the insurer will provide thirty (30) days notice to Mesa Water® of any cancellation of coverage. Consultant agrees to require its insurer to modify such certificate(s) to delete any exculpatory wording stating that failure of the insurer to mail written notice of cancellation imposes no obligation or that any party will Page 14 of 14 Click here to enter text., Click here to enter a date. “endeavor (as opposed to being required) to comply with the requirements of the certificate(s).” 7. Consultant shall provide proof that policies of insurance required herein expiring during the term of this Contract 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 Mesa Water® within five (5) days of the expiration of the coverages. Appendix B: Professional Services Agreement Acceptance Forms Appendix B: Professional Services Agreement Acceptance Forms Appendix B: Professional Services Agreement Acceptance Forms Appendix B: Professional Services Agreement Acceptance Form Firm Name: ________________________________________________________ Address: ___________________________________________________________ City ________________________ State ________ Zip Code ______________ Telephone: __________________________ Fax: ________________________ I have reviewed the RFP and Professional Services Agreement in their entirety. Our firm will execute the Professional Services Agreement with no exceptions. Name of Authorized Representative: _____________________________________ Signature of Authorized Representative: ____________________________ Date: _____________________________ Appendix C: Scope of Work Appendix C Scope of Work Optimal Governance Structure Study Task 1- Agencies Overview: Consultant will review and summarize the current context of CMSD and Mesa Water® including governance, services provided, service area, staff organization and finances. This information will be summarized in a report. Information sources for this effort will include material from each agency’s website, organization charts, budget and CAFR documents, job descriptions and other pertinent documents or studies made available. Task 2 – Combined Agency Organization Evaluation: Consultant will estimate a potential organization structure for combining the two agencies. Consultant will review the detail in the budget documents, organization charts, job descriptions, reports or other documents available to identify potential efficiencies that may result from a combining of services. The potential economies of scale, opportunities for efficiencies, and potential cost-savings from combining governance and departmental/operational functions will be evaluated and included in the report. Evaluate the hard assets (i.e., owned equipment, fleet, etc.) and facilities needs of the combined agency to see if any excess equipment or real estate is identified. Task 3 – Combined Agency Outsourcing Evaluation: Consultant will review services of the combined agency and identify services that are currently performed in-house by either agency which are commonly contracted out by other similar agencies. Also, include a review of any previously contracted services that have recently been brought in-house. This would include the Costa Mesa Sanitary District Sewer Main Maintenance Cleaning and Lift Station Maintenance Services. Task 4 – Combined Agency Financial Evaluation: Based upon the current Budgets, CAFRs, and other pertinent documents or studies made available, consultant will analyze the financial fundamentals of the separate and combined agencies. A baseline of current revenues and expenses, debt and debt ratios, and reserves will be determined. Determine the same financial parameters for the combined agency. Determine the reserves and/or revenue needed for the combined agency to be AAA-rated. Mesa Water® has set a financial goal of being AAA-rated as defined by a 600 days cash-on-hand target. Determine the existing reserves or revenue levels that are above or below the target amount. If excess reserves, revenue or real estate is identified, develop financial scenarios to bring the levels to target, including rate reductions or rebates. Provide any other financial summary or potential cost-saving ideas uncovered. Task 5 - Document Evaluation and Results: Consultant will prepare a report from the findings in Task 1 through Task 4. A summary of potential benefits will be provided. Explain the consultant’s analysis approach, methods, and results using graphs and charts where necessary.