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PACKET Town Board 2024-08-13
The Mission of the Town of Estes Park is to provide high ‐quality, reliable services for the benefit of our citizens, guests, and employees, while being good stewards of public resources and our natural setting. BOARD OF TRUSTEES - TOWN OF ESTES PARK Tuesday, August 13, 2024 7:00 p.m. ACCESSING MEETING TRANSLATIONS (Accediendo a las Traducciones de la Reunión) To access written translation during the meeting , please scan the QR Code or click this link for up to 48 other languages (Para acceder a la traducción durante la reunión , par favor escanee el código QR o haga clic en el enlace para hasta 48 idiomas más): https://attend.wordly.ai/join/UOFH-5928 Choose Language and Click Attend (Seleccione su lenguaje y haga clic en asistir) Use a headset on your phone for audio or read the transcript can assist those having difficulty hearing (Use un auricular en su teléfono para audio o lea la transcripción puede ayudar a aquellos que tienen dificultades para escuchar). The Town of Estes Park will make reasonable accommodations for access to Town services, programs, and activities and special communication arrangements for persons with disabilities. Please call (970) 577 -4777. TDD available or use the link above to access audio or read the transcript. ADVANCED PUBLIC COMMENT By Public Comment Form : Members of the public may provide written public comment on a specific agenda item by completing the form found at https://dms.estes.org/forms/TownBoardPublicComment . The form must be submitted by 12:00 p.m. the day of the meeting in order to be provided to the Town Board prior to the meeting. All comments will be provided to the Board for consideration during the agenda item and added to the final packet. PLEDGE OF ALLEGIANCE. (Any person desiring to participate, please join the Board in the Pledge of Allegiance). AGENDA APPROVAL. PUBLIC COMMENT. (Please state your name and address). TOWN BOARD COMMENTS / LIAISON REPORTS. TOWN ADMINISTRATOR REPORT. CONSENT AGENDA: 1. Bills - https://dms.estes.org/WebLink/browse.aspx?id=253208. 2. Town Board and Study Session Minutes dated July 23, 2024. 3. Estes Park Board of Adjustment Minutes dated July 2, 2024 (acknowledgment only). 4. Transportation Advisory Board Minutes dated June 26, 2024 (acknowledgment only). 5. Resolution 62-24 Approving an Intergovernmental Agreement with the City of Louisville and the Town of Estes Park Regarding Public Works Computerized Maintenance Management Services, $9,000 Budgeted. Prepared 2024-08-02 *Revised 2024-08-07 **Revised 2024-08-09 NOTE: The Town Board reserves the right to consider other appropriate items not available at the time the agenda was prepared. 6. Resolution 63-24 Contract with Northern Colorado Energy Solutions for Town Hall HVAC Units Replacement Project - $369,333.99 Budgeted. 7. Resolution 64-24 Contract with Classic Contractors, Inc for the Additional Greenhouse Installation Project - Parks Shop - 600 Big Thompson Avenue. 8. Resolution 65-24 Approving the 2024 Intergovernmental Agreement for the School Resource Officer Program with the Park R-3 School District for school years 2024- 2025, 2025-2026 and 2026-2027. 9. Resolution 66-24 Lease Agreement with Ponderosa Realty for Transitional Employee Housing. REPORTS AND DISCUSSION ITEMS: (Outside Entities). 1. ESTES CHAMBER OF COMMERCE CONSTRUCTION IMPACT GRANT UPDATE. Executive Director DePasquale. ACTION ITEMS: 1. PUBLIC HEARING - ORDINANCE 12-24 PROPOSED ELECTRIC RATE INCREASE. Director Bergsten, Superintendent Lockhart, and Consultant Meghan Helper. • Present the electric rate study results. • Complete the Public Hearing continued from July 23, 2024 allowing for additional public comment and Board action. 2. RESOLUTION 67-24 TO COMMIT THE VACATION HOME WORKFORCE HOUSING REGULATORY LINKAGE FEE REVENUE TO THE ESTES PARK HOUSING AUTHORITY FOR THE PURCHASE OF FALL RIVER VILLAGE. Manager Bangs and Director Moulton. To consider the commitment of collected Vacation Home Workforce Housing Regulatory Linkage Fees received since 2023 in the amount of $1,444,590 and a future commitment of annual fee collections for the next 5 years (2025-2029). 3. RESOLUTION 68-24 INTERGOVERNMENTAL AGREEMENT (IGA) WITH CDOT FOR MULTIMODAL OPTIONS FUND GRANT FOR FALL RIVER TRAIL FINAL TRAIL SEGMENT. Engineer Wittwer. To consider an IGA to accept state awarded funds in the amount of $1,438,557 with a local cost share amount of $479,519. 4. RESOLUTION 69-24 INTERGOVERNMENTAL AGREEMENT (IGA) WITH CDOT FOR TRANSPORTATION ALTERNATIVES PROGRAM GRANT FOR FALL RIVER TRAIL CONSTRUCTION. Engineer Wittwer. To consider an IGA to accept federal awarded funds in the amount of $2,300,000 with a local cost share amount of $575,000. 5. RESOLUTION 70-24 CONTRACT WITH WHITESTONE CONSTRUCTION, INC FOR THE TREGENT PARK RESTROOM REMODEL PROJECT. Project Manager Pastor. Consider contracting with White Stone Construction, Inc. to update, repair and improve the quality of Tregent Park restrooms in the amount of $216,645 Budgeted. 6. INTERVIEW COMMITTEE FOR ESTES PARK PLANNING COMMISSION. Town Clerk Williamson. 7. RESOLUTION 71-24 CONTRACT TO PURCHASE 1250 WOODSTOCK DRIVE. Manager Bangs. Consider the purchase of property leased to Mountaintop Childcare to continue use as a childcare facility. ADJOURN. * ** * Town of Estes Park, Larimer County, Colorado, July 23, 2024 Minutes of a Regular meeting of the Board of Trustees of the Town of Estes Park, Larimer County, Colorado. Meeting held in the Town Hall in said Town of Estes Park on the 23rd day of July, 2024. Present: Gary Hall, Mayor Marie Cenac, Mayor Pro Tem Trustees Bill Brown Kirby Hazelton Mark Igel Frank Lancaster Also Present: Travis Machalek, Town Administrator Jason Damweber, Deputy Town Administrator Dan Kramer, Town Attorney Bunny Victoria Beers, Deputy Town Clerk Absent: Cindy Younglund, Trustee Mayor Hall called the meeting to order at 7:00 p.m. and all desiring to do so recited the Pledge of Allegiance. PROCLAMATION – ESTES RECYCLES DAY. Mayor Hall read a proclamation recognizing August 10, 2024 as Estes Recycles Day and encouraged the citizens of Estes Park to bring their hard to recycle disposables to the Event Center parking lot for recycling. SWEARNING-IN CEREMONY FOR NEW CHIEF OF POLICE IAN STEWART. Assistant Municipal Judge Bartlett performed the swearing-in ceremony for the new Chief of Police Ian Stewart. AGENDA APPROVAL. It was moved and seconded (Hazelton/Lancaster) to approve the Agenda, and it passed unanimously. PUBLIC COMMENTS. John Meissner/Town citizen supported allowing public comment during study sessions and soliciting public input on the type of products sold during events in Bond Park related to competing sales of items sold by downtown businesses. TRUSTEE COMMENTS. Board comments were heard and have been summarized: The public were encouraged to volunteer for the Transportation Advisory Board vacancies; the Trustee Talk session would be held on the fourth Thursday in July with Trustees Igel and Lancaster; the Mayor spoke regarding his public outreach including meetings, a marketing promotion initiative to engage with downtown traffic experiencers, citizen interest in a diversity resources website or council, a presentation from the Mountain Oasis Nurseries opportunity, Route Zero event to discuss zero emissions initiatives which included presentations from Sierra Club, Environmental Protection Agency, Southwest Energy Efficient Project and Colorado Moms Clean Air Force; staff continue to fill the Restorative Justice Director position which has been assisted by Melissa Westover as Interim Director; the Visit Estes Park (VEP) Board would finalize the review of the 2025 operating plan in order to present it to the Town Board and Larimer County Commissioners in September; VEP would host an Outdoorist Event in coordination with RMNP, and their construction podcast Building a Better Future for Estes Park was published to provide an alternative method to inform the public on construction updates; the Board was encouraged to attended Municipal Court held on the first Wednesday of each month; the Estes Park Housing Authority entered into a contract to purchase the Fall River Village from Grand Heritage Hotel to provide workforce housing as early as December; and the Board congratulated Chief Stewart and thanked him for his interim service to the Estes Park community. DR A F T Board of Trustees – July 23, 2024 – Page 2 TOWN ADMINISTRATOR REPORT. Town Administrator Machalek presented his policy governance report for policies 3.3, 3.12, and 3.13 and reported partial compliance under 3.12 which was not monitored. He stated the Construction Impact Grant process identified two barriers which require Board consideration, including the removal of the requirement for a business license for businesses located outside of town limits and the requirement to provide a full year loss report for newer businesses. Discretion would be provided to the Estes Chamber Director regarding loss requirements. He stated the grants have been applied for and approximately $53,000 in funds remains available with applications open for another week. The Board requested an update at a future meeting related to the impacts of the relief program. Mayor Pro Tem Cenac arrived at 7:32 p.m. CONSENT AGENDA: 1. Bills. 2. Town Board and Study Session Minutes dated July 9, 2024 and Strategic Planning Study Session Minutes dated May 18, 2024 and June 18, 2024. 3. Estes Park Planning Commission Minutes dated May 21, 2024 (acknowledgement only). 4. Resolution 51-24 Intergovernmental Agreement with the Colorado Department of Transportation for Fiscal Year 2024 Federal Transit Administration 5311 Rural Area Formula Funds to Support Estes Transit (The Peak) – CDOT PO 491003538. 5. Acceptance of Town Administrator Policy Governance Monitoring Report. It was moved and seconded (Cenac/Hazelton) to approve the Consent Agenda, and it passed unanimously. ACTION ITEMS: 1. VISIT ESTES PARK (VEP) – PIXEL PINE TREE IN BOND PARK. VEP Chief Strategy Officer Mackin presented a proposed pixel pine tree in Bond Park to enhance the Catch the Glow Holiday Season. She reviewed the promotional opportunities the added decoration would bring to the community including increased visitation, the opportunity to generate additional revenue through sales tax and lodging, and support for local businesses through advertising and marketing efforts. She showcased pixel trees utilized in other communities, reviewed the placement within Bond Park, and the scale and visual features. She spoke regarding the installation, the refresh rate, pixel maps, systems and support. Board approval for the tree was requested in order to meet production, installation for a November tree lighting deadline, and contractor notification by July 31, 2024. Board comments have been summarized: Benefits of increasing visitation during the holiday season and potential to appeal to families; the installation would be a positive added element to the event; whether the tree would be rented or owned by VEP; tree storage and importance to remove decorations at the end of the season; hours of operation for the program; and installation timelines. Kent Smith/Town citizen recommended reducing the pylon into the soil three to five inches to prevent a tripping hazard outside the event. John Meissner/Town citizen requested clarification on nearby competing jurisdictions, any identified wildlife impacts, and questioned daytime visibility. Town Attorney Kramer stated if the item was approved, it would be for the use of Bond Park only and the Board can expect other installation considerations at a future meeting. It was moved and seconded (Igel/Cenac) to approve the installation of a pixel pine tree in Bond Park, and it passed unanimously. PUBLIC HEARING – ORDINANCE 12-24 PROPOSED ELECTRIC RATE INCREASE. Mayor Hall opened the public hearing and NewGen Strategies DR A F T Board of Trustees – July 23, 2024 – Page 3 presented the rate study. Highlights of the presentation included: an overview of the study, progress, results and delays, advanced metering infrastructure (AMI) data, 2024 rate plans and next steps. She reviewed the cost of service for 2024 and 2025 for rate classes, the typical electric utility system configuration, PRPA generation and transmission, and Estes Park Power & Communications distribution and customer service including utility billing. Rates are designed to align with costs of service. She stated the majority of utility expenses are incurred on a fixed basis whereas the majority of the revenues are collected on a variable basis, creating a disconnect between cost causation and revenue collection. Utilities are experiencing lower revenues with fixed cost maintaining or increasing, causing a fixed cost recovery issue and creating the need for rates to increase gradually to align with costs. Without the proposed rate increases, the reserve funds would be drawn down annually dropping below the required 90-day O&M in 2026. Due to outages and advanced metering infrastructure AMI data transfer, the proposal includes an across the board rate increase of 5% beginning October 2024 which to meet the metrics and targets. If no action is taken an 8.5% rate increase would be needed in 2025, 2026 and 2027. Design rates by customer class for 2025 and 2026 would be presented in late 2024 which align with cost of service. Board question have been summarized: Requested clarification on the charge separations of the customer charge and energy charge compared to other communities who combine the charges into a single charge; what the average kilowatt per hour rate was for a typical residential customer; the extent to which the anticipated increase in cost for transmission from Platte River Power Authority was incorporated into the study; and what the Town could do to keep increases low for customers. Town Administrator Machalek stated smaller increases would result in a higher rate increases in the future. Staff continues to bring contractor work in-house to decrease costs to the utility rate payers and maintain high quality services. Staff stated inventory supply, delivery impacts, and high costs for materials have impacted the Power and Communications budget. There being no public comment, it was moved and seconded (Hazelton/Cenac) to continue the Public Hearing to August 13, 2024, and it passed unanimously. 2. COLORADO ASSOCIATION OF SKI TOWNS (CAST) 2024 COLORADO LEGISLATIVE POSITION STATEMENT ON HOUSING. Manager Bangs presented a Colorado legislative position statement on housing requesting Board direction. The CAST position statement would allow municipalities and counties to: authorize counties and municipalities to refer short-term rental taxes to the voters with the proceeds of such revenues dedicated to the local workforce and affordable housing; refer residential vacancy taxes to their voters, also known as the “empty home tax”; to incentivize homeowners to rent their homes to local residents rather than rent them at peak times and leave them empty most of the year; and adopt fees on the transfer of real estate, with the fee revenues to fund local affordable and workforce housing. Support was stated for providing communities with local control to make their own decisions. Concerns were heard regarding taxing non-residents differently. It was moved and seconded (Hazelton/Cenac) to support the CAST Legislative Position Statement on Housing, and it passed with Trustees Brown and Hall voting “No”. Town Attorney Kramer would communicate the position to CAST and the Colorado Municipal League. 3. RESOLUTION 61-24 GRANT AGREEMENT WITH BUELL FOUNDATION FOR LOCAL FINANCING FOR EARLY CHILDHOOD EDUCATION GRANT. Manager Bangs presented the Buell Foundation grant agreement for early childhood education. She stated the funds offer the opportunity to strategically build tuition assistance programs to meet the needs of families. The initial funds would be used for cost modeling to provide a detailed understanding of the specific budgetary and financial needs for the various family demographics. She stated almost 60% of families who do not enroll children in care reported cost as a barrier. She reviewed other needs assessment data and assistance programs including state funding, childcare and tuition assistance programs, and 6E funds. The Strategic Plan recommends prioritizing tuition assistance to stabilize families without access to other funding programs and to address needs not being met by DR A F T Board of Trustees – July 23, 2024 – Page 4 other programs. The Town met with the Early Childhood Council of Larimer County, Estes Valley Investment in Childhood Success, and United Way to discuss funding opportunities and would continue to identify ways to assist the community. The grant would bring $50,000 in revenue to the Childcare Lodging Tax with no local match and must be used by June 30, 2025. Next steps would include a study session to identify options and Board direction. Staff requested approval of the grant agreement with the Buell Foundation. Kent Smith/Town citizen stated support for the program and future coordination with the foundation. The Board requested clarification on the invitation to apply for these funds and what the Town would be losing if the funds are not accepted. Manager Bangs stated without the funds, the Town would lose professional expertise and consulting while working with other organizations. She highlighted the importance of expanding on the data identified in the needs assessment and Strategic Plan to develop specific cost modeling. This information would assist the Town on the best methods to address community needs and maximize the impact of 6E funds. It was moved and seconded (Brown/Igel) to approve Resolution 61-24, and it passed unanimously. 4. RESCINDING POLICY 106 – PUBLIC FORUMS AND MEETINGS. In 2015, the Town Board adopted Policy 106 – Public Forums and Meetings. The policy requires approval from the Town Board prior to scheduling or promoting any public meeting or forum which solicits input and public opinion from residents on proposed new or revised regulations, ordinances or programs of the Town. Staff stated concerns with timelines and delays for the Town Administrator to relay considerations to the Town Board at a regular meeting and potential open meeting law violations if staff polls individual Board members via email. Town Administrator Machalek stated staff has not been monitoring this policy and potential violations may have occurred. Staff recommended rescinding Policy 106 and relying on other Board policy to keep the Board apprised of meetings and public forums. Trustee Brown stated the importance to remove obstacles to public meetings and engagement. It was moved and seconded (Cenac/Hall) to rescind Policy 106 – Public Forums and Meetings, and it passed unanimously. 5. INTERVIEW COMMITTEE FOR THE TRANSPORTATION ADVISORY BOARD. It was moved and seconded (Cenac/Brown) to appoint Trustees Hazelton and Igel to the TAB Interview Committee, and it passed unanimously. REPORTS AND DISCUSSION ITEMS: 1. ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT (EECBG) – COLLABORATION OPPORTUNITY WITH LARIMER COUNTY FOR A TOWN CLIMATE ACTION PLAN. Director Fetherston stated Larimer County established the Climate Smart Future Ready Initiative to focus on resiliency, sustainability and other opportunities to help municipalities and communities to prepare for and minimize impacts of natural disasters. As a community partner in the process, the Town conducted a Green House Gas (GHG) emissions inventory. The Town was identified as the highest per capita for emissions of all county municipalities due to the number of annual visitors to RMNP. The State Energy Office provides local governments with staff capacity to enable projects and programs to reduce GHG emissions through the Energy Efficiency Community Block Grant (EECBG). Larimer County offered to be the grantee and applicant with the Town serving as a partner through an intergovernmental agreement (IGA). Through the grant application, the County would request two positions. One position would be dedicated to the Town for a three-year period as a County employee. The objectives of the position included: develop a climate action plan; encompass town initiatives already underway and identify opportunities and strategies for energy efficiency and emission reduction; transportation electrification; refuse waste diversion; create change behavior opportunities; establish goals and metrics; ensure community outreach and engagement; identify funding options to support the plan and its goals, and ensure power generation sustainability efforts would not be impacted. Advantages included: The plan would support the Town’s Strategic Plan; would build and enhance staff capacity for current and ongoing DR A F T Board of Trustees – July 23, 2024 – Page 5 efforts at no cost to the Town; develop a comprehensive plan to combine and coordinate all sustainability efforts; maximize savings and emission reductions through efficiency measures; leverages outcomes not otherwise possible; require community outreach and engagement; and commits the Town only in the development of a plan. Staff requested Board support to draft an IGA if the County was awarded the grant to meet the application deadline of August 9, 2024. The Board asked when the grant would be awarded and additional discussion ensued regarding the distinction between Board approval of an item and consensus. Town Administrator Machalek stated no policy requires Board action to submit a grant application. He added these opportunities allow the Board to provide input on items which may not directly align with the Town’s Strategic Plan. Board consensus was to direct staff to draft an IGA should the EECBG grant be awarded to Larimer County. Whereupon Mayor Hall adjourned the meeting at 9:40 p.m. Gary Hall, Mayor Bunny Victoria Beers, Deputy Town Clerk DR A F T Town of Estes Park, Larimer County, Colorado July 23, 2024 Minutes of a Study Session meeting of the TOWN BOARD of the Town of Estes Park, Larimer County, Colorado. Meeting held at Town Hall in the Board Room in said Town of Estes Park on the 23rd day of July, 2024. Board: Mayor Hall, Trustees Brown, Cenac, Hazelton, Igel, and Lancaster Attending: Mayor Hall, Trustees Brown, Cenac, Hazelton, Igel, and Lancaster Also Attending: Town Administrator Machalek, Deputy Town Administrator Damweber, Town Attorney Kramer, and Recording Secretary Richards Absent: Trustee Younglund Mayor Hall called the meeting to order at 5:00 p.m. ARBORIST LICENSING. Supervisor Berg requested Board direction on amending Chapter 5.20 of the Estes Park Municipal Code to require tree service providers to document Arborist certification by the International Society of Arboriculture (ISA) prior to receiving a business license to perform work within town limits. He presented the protocol and requirements of neighboring municipalities and emphasized the advanced knowledge of tree disease and proper treatment imparted by the certification which requires three years of work experience and a comprehensive two-year testing period. Board conversation has been summarized: importance of engaging local tree service providers; unqualified arborists leading to liability and safety issues; number of current certified local providers; complexity of certification process; tree health as a main component of the community; and concerns on overreach of government into local business. Supervisor Berg stated that no statewide licensure exists for Arborists as with other contractors. Staff would draft ordinance language taking a moderate approach to increased licensing requirements for tree service providers. USE OF TOWN PROPERTY FOR VENDORS. Director Hinkle provided an overview of events utilizing Town property that host vendors throughout the year and their economic impact. Attendee polling had been utilized to gather supporting data. Board discussion has been summarized: challenges in quantifying impact of events; community benefits of nonprofit versus privately organized events; caution toward drawing business away from downtown businesses; how rental fees and Town costs compare to other communities; events adding to Town atmosphere instead detracting; and the ability of local businesses to participate in events. Board requested additional information on private event revenue and suggested increased polling of attendees. Director Hinkle added the potential to require surveying from private events; incoming vendors contributing to local economy; relatively low number of new events; and reiterated new events require Board approval. Staff would request additional sales tax revenue information from private event organizers. GOVERNING POLICY UPDATES – BOARD/STAFF LINKAGE. Town Administrator Machalek presented the second in a series of four Governing Policy updates that would include cleanup to previous policy verbiage and format to align with the 2024 Strategic Plan goals and current operations. Edits would include updates to referenced material, cleanup of Town Administrator job description, and removal of a nonfunctional header. He requested Board direction on the proposed edits and whether the Board had additional edits. Hearing none, he would proceed with the current edits. DR A F T Town Board Study Session – July 23, 2024 – Page 2 FUTURE STUDY SESSION AGENDA ITEMS. Trustee Brown requested an update on noise ordinance amendments; staff would bring back to review at a future Study Session. Town Administrator Machalek confirmed that hosted short term rentals would be discussed at the August 27, 2024 Study Session and requested Board direction on public comment for upcoming topics. Board discussion ensued on allowing public comment during the hosted short term rental and noise ordinance with discussion summarized: concern for decreased Board discussion time on a new topic; opportunity for citizens to provide comment during regular meetings; exclusion of public input at early stages of the issue; and suggested a special meeting to hear comments on specific issues with high levels of public interest. Board consensus was to not hear public comment for hosted short term rental and noise ordinance items during the Study Session. COMMENTS & QUESTIONS ON NON-AGENDA ITEMS. None. There being no further business, Mayor Hall adjourned the meeting at 6:09 p.m. Rachel Richards, Recording Secretary DR A F T Town of Estes Park, Larimer County, Colorado, July 2, 2024 Minutes of a Regular meeting of the ESTES PARK BOARD OF ADJUSTMENT of the Town of Estes Park, Larimer County, Colorado. The meeting was held in the Town of Estes Park on July 2, 2024. Board: Chair Jeff Moreau, Vice-Chair Wayne Newsom, Board Member Joe Holtzman Attending: Chair Moreau, Member Holtzman, Senior Planner Hornbeck, Director Steve Careccia, Flood Plain Administrator Jennifer Waters, Recording Secretary Karin Swanlund Absent: Newsom Chair Moreau called the meeting to order at 9:00 a.m. APPROVAL OF AGENDA It was moved and seconded (Moreau/Holtzman) to approve the agenda. The motion passed 2-0. APPROVAL OF CONSENT AGENDA It was moved and seconded (Moreau/Holtzman) to approve the Consent Agenda. The motion passed 2-0. PUBLIC COMMENT: none . VARIANCE REQUEST 2842 Fall River Rd Senior Planner Hornbeck The applicant desires to construct a two-story (walk-out) single-family home with a footprint of approximately 1,750 square feet and a total square footage of approximately 3,000 square feet. The proposed building complies with all applicable setbacks; however, the proposed south deck would encroach 5’ into the 50’ river setback. The applicant requests a variance from Estes Park Development Code Sec. 7.6.E(2)(a) which requires a 50’ setback from the annual high-water mark of the river. The proposed deck would be constructed as close as 45’ from the high-water mark of the Fall River rather than the required 50’. Staff recommended denying the request, stating that the applicant could decrease the deck size or locate the house north of the private drive. The lot is undeveloped, so the applicant is not constrained by existing development or structures. Redesigning the home and/or deck is a viable alternative at this time. DISCUSSION: Jennifer Waters, Town of Estes Park Civil Engineer and Floodplain Administrator, noted that the building permit will be used to establish the annual high-water mark regardless of the outcome of this request. The property has not been surveyed; therefore, the high- water mark has not been established. The floodplain on the site plan is not correct and encouraged the applicant to use the current, correct, CHAMP floodplain per Title 18 of the municipal code. Angela Walter, applicant, stated that the deck has a large pitch, and only the deck posts would overhang. The posts will not be in the water easement. A smaller deck would not be functional. Due diligence has been in process since purchasing the property. The road cannot be moved. Greg Scott, the builder, stated that cantilevering the deck is a design option, thus removing all of the structure from the easement. . Chair Moreau suggested continuation until a high-water mark can be established and the average elevation of the deck be determined. Board of Adjustment, July 2, 2024 – Page 2 It was moved and seconded (Holtzman/Moreau) to continue the variance request to a future meeting, requesting further information is obtained. The motion passed 2-0. REPORTS: The Request for Proposal (RFP) for the Development Code Rewrite has been posted, and submittals are due on July 15. With no further business, Chair Moreau adjourned the meeting at 9:30 a.m. Jeff Moreau, Chair Karin Swanlund, Recording Secretary Town of Estes Park, Larimer County, Colorado, June 26, 2024 Minutes of a Regular meeting of the TRANSPORTATION ADVISORY BOARD of the Town of Estes Park, Larimer County, Colorado. Meeting held in the Municipal Building in said Town of Estes Park on the 26th day of June, 2024. Board: Chair Belle Morris; Vice-Chair Kristen Ekeren; Members Jessica Ferko, Larry Gamble, Linda Hanick, Joan Hooper, Misti Marcantonio, Wallace Wood; Trustee Mark Igel; Staff Liaison Greg Muhonen Attending: Chair Morris; Vice-Chair Ekeren; Members Gamble, Hanick, Hooper, Marcantonio, Wood; Trustee Igel; Director Muhonen; Manager Klein; Manager Pastor; Engineer Waters; Engineer Wittwer; Recording Secretary McDonald; Paul Hornbeck and Karin Swanlund, Community Development Department; Lucy Harrington, GEI Consultants; Public Attendees Patti Brown, Tom Hannah, William Oster, Jane Stewart Absent: Member Ferko Chair Morris called the meeting to order at 12:08 p.m. Prior to commencing the official agenda, Chair Morris welcomed the TAB’s new members (Hooper, Marcantonio, Wood) and invited all present to provide a brief introduction. PUBLIC COMMENT Tom Hannah (Town Citizen) explained crosswalk safety issues at Colorado Highway 7 (CO 7) and 1st Street, where parked cars hinder traffic visibility. He suggested that the crosswalk be moved to 2nd Street to improve visibility and be equidistant to other CO 7 crosswalks, and has shared this request with the Colorado Department of Transportation (CDOT). He thanked the TAB for past support of the reconstruction for one-way travel on 3rd Street. Jane Stewart (Estes Valley Investment in Childhood Success/EVICS) announced the pending development of a new childcare center on US 34 near the Estes Ark, and suggested that year-round transit service to this area of town would also benefit nearby workforce housing residents and patrons of Salud Family Health Center and Crossroads Ministry. APPROVAL OF MINUTES DATED APRIL 17 & MAY 15, 2024 It was moved and seconded (Ekeren/Hanick) to approve the April 17 and May 15, 2024, minutes, and it passed with 6 votes in favor, with 1 new member abstaining. TRUSTEE LIAISON UPDATE Transportation Advisory Board – June 26, 2024 – Page 2 Trustee Igel advised that the Town Board approved the TAB Bylaws Revision item on June 11. Discussion continues about development options for the Town-owned parcel at Elm Road. DOWNTOWN RIVER CORRIDOR STUDY Engineer Waters introduced Lucy Harrington of GEI Consultants and summarized progress of the grant-funded Downtown River Corridor Study, which is made possible by the Federal Emergency Management Association’s (FEMA) Building Resilient Infrastructure and Communities (BRIC) program and issued by the Colorado Division of Homeland Security and Emergency (DHSEM). Project resources are accessible on the Town’s Floodplain Management webpage. Project information was featured this morning at the Bike Estes Day event; feedback was good, with strong support for the trail construction envisioned in the 2018 Downtown Plan and further suggested in the 2018 Stormwater Master Plan. A September 10 Town Board Study Session about the project will include the conceptual plans and options for trail development. Discussion points included floodplain permit activity for the intended project area; the National Flood Insurance Program’s (NFIP) authority in floodplain management; trail construction preferences, limitations, and priorities; recommendations provided by the Colorado Parks and Wildlife (CPW); and the possibility of replacing the Riverside Drive public restrooms with a bus stop. Director Muhonen advised that many of the questions being raised were too detailed to address so early in the study. Engineer Waters advised that the study began with a focus on downstream issues and will study upstream issues later in the process. TAB members were encouraged to provide feedback directly to her or by accessing the online interactive polling and other digital options provided through the June 12 presentation link on the project webpage. PARKING & TRANSIT UPDATES Manager Klein reported that downtown core parking has been at or near capacity for weekend occupancy since the season launched on May 24, with at least two weekends seeing third-level use of the parking structure. Payment data reflects that the parking duration average now exceeds two hours, and that more guests are choosing the mobile app or text payment options. Parking ambassadors are presently focused on space- finding for guests and improper parking rather than overall enforcement. Revenue is up, despite some lots being limited. Red Route ridership is trending up, with 10,291 guests since May 24. RATP Dev is staffing up to launch The Peak’s remaining routes (Blue, Brown, Gold, and Silver) on July 1. Chair Morris encouraged TAB members to take riding tours of all routes. Thanks to the recently awarded Colorado Association of Transit Agencies (CASTA) Ozone Season Transit Grant, all routes can now run 9am-9pm; the next print run of transit maps will reflect this time extension. Transportation Advisory Board – June 26, 2024 – Page 3 Bustang numbers have not yet been released, but the drivers report a successful start to the season. ENGINEERING UPDATES Director Muhonen reported that the Graves Avenue–Safe Routes to School (SRTS) project is at 99% completion for the south side concrete trail of Graves; work on the street’s north side begins this week. Storm sewer work should be done by June 27. The project is on schedule for August completion, and the public has expressed appreciation for the quick and efficient progress. Cleave Street Improvements (CSI) project updates continue to be provided through the project webpage and weekly email communication. Power & Communications Division work has slowed down behind the Old Church Shops due to challenges of subterranean conditions. Trenching for services and pedestrian light locations is planned for next week. Cleave Street continues to be watered for dust control. Xcel has been unresponsive regarding the bollard issues on private property. ADMINISTRATIVE UPDATES Director Muhonen advised that the Strategic Plan (SP) pages in the packet reflect the transportation goals and objectives that will need to be justified to the Town Board on July 9 for inclusion in the budget. At this point, any feedback from the TAB must be offered by members individually. For the 2025 Capital Improvement Plan (CIP) updates, TAB input is due by July 8. CIP projects exceed $50k, and some of the projects will continue in phases beyond 2025. TAB members should review the SP and then the CIP before providing comments. Chair Morris invited TAB members to offer three CIP priority preferences at this meeting. Alternatively, she would write a TAB letter of support, or members could send to Director Muhonen further public comments that do not oppose the TAB’s final decision in the letter of support. Discussion points included prioritizing CIP projects estimated to cost under $1m; how potential grant funding is considered during the prioritization process; the benefits of providing a construction estimate when applying for a grant; and how bridge conditions are assessed for work. Additionally, in response to a request received by Director Muhonen, the TAB discussed how to formally quantify the efficacy of the Downtown Wayfinding Plan (DWP) signage, which members agreed are a “well-used, upscale addition” to Downtown Estes. Chair Morris summarized the TAB’s CIP priorities to be the Fall River Trail–Final Segment 2024; Downtown Wayfinding–Phase 2 Downtown Loop; and Community Drive Multi-Use Trail. Consultant proposals for the Big Horn Parking Structure Design are due July 9. Transportation Advisory Board – June 26, 2024 – Page 4 Director Muhonen reminded the TAB to follow the Downtown Estes Loop construction and CDOT US 34/36 Overlay project updates by visiting the dedicated websites (see agenda links) and signing up for the weekly email updates. UPDATE ON PAST PUBLIC COMMENT Per the TAB Public Comment Form submitted on June 2, it was agreed that speeding is an ongoing issue on Fish Creek Road, which is primarily used by locals. Director Muhonen advised that speed enforcement there is enforced by the Larimer County Sheriff’s Office. There was brief discussion regarding the value of dummy cars and radar speed signage to discourage speeding. OTHER BUSINESS None. There being no further business, Chair Morris adjourned the meeting at 2:04 p.m. /s/Lani McDonald, Recording Secretary UTILITIES Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Reuben Bergsten, Utilities Director Date: August 13, 2024 RE: Resolution 62-24 Intergovernmental Agreement with the City of Louisville Regarding Public Works Computerized Maintenance Management Services, $9,000 Budgeted (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER______________ QUASI-JUDICIAL YES NO Objective: To be good stewards of our customers’ financial resources by obtaining approval for an Intergovernmental Agreement (IGA) allowing us to cost share the Enterprise License Agreement (ELA) for Computerized Maintenance Management Services. Present Situation: Since 2014, the Town has utilized and cost-shared the Lucity ELA with the Cities of Lafayette and Louisville. The City of Lafayette did not implement Lucity, and the revised IGA is only with Louisville. Proposal: Staff proposes the Town enter into an IGA with Louisville for cost-sharing the Lucity ELA. The Town and Louisville can combine their populations to constitute one ELA, a cost-effective solution for two relatively small communities. Advantages: •Continuation of GIS-integrated computerized asset management for work orders, infrastructure condition assessments, and inventory control •Saves money •Reduces staff workload •Increases the efficient management of our assets Disadvantages: •An increase in our cost share; however, our total ~$9,000 is a small price to pay for access to total software cost of approximately $40,000 Action Recommended: Staff recommends approving the resolution/IGA Finance/Resource Impact: 101-1700-417.25-01, Government Buildings, $560,$37,659 available 7-11-24 101-3100-431.25-01, Street and Highways, $560,$7,102 available 7-11-24 101-3175-431.25-01, Storm Water Maintenance, $560,$10,000 available 7-11-24 502-6501-560.25-01, P&C, $3,660 $16,047 available 7-11-24 503-6500-560.25-01, Water, $3,660 $26,895 available 7-11-24 Level of Public Interest Low, this expense is budgeted annually Sample Motion: I move for the approval/denial of the Resolution Attachments: 1. Resolution 62-24 2.IGA RESOLUTION 62-24 APPROVING AN INTERGOVERNMENTAL AGREEMENT WITH THE CITY OF LOUISVILLE FOR PUBLIC WORKS COMPUTERIZED MAINTENANCE MANAGEMENT SERVICES WHEREAS, the Town Board wishes to enter into the intergovernmental agreement referenced in the title of this resolution for the purpose of operating under Louisville’s Enterprise License Agreement (“ELA”) with Lucity, Inc. (“Lucity”) for public works computerized maintenance management systems; and WHEREAS, based upon their populations the parties agree to apportion the total expense; and WHEREAS, Louisville and Estes Park desire to set forth their duties and obligations concerning the ELA costs through adoption of an intergovernmental agreement. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: The Board approves, and authorizes the Mayor to sign, the intergovernmental agreement referenced in the title of this resolution in substantially the form now before the Board. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney ATTACHMENT 1 1 AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY LOUISVILLE AND TOWN OF ESTES PARK REGARDING PUBLIC WORKS COMPUTERIZED MAINTENANCE MANAGEMENT SERVICES WHEREAS, in accordance with C.R.S. § 29-1-203, the City of Louisville (“Louisville”) and Town of Estes Park (“Estes Park”) are authorized to cooperate or contract with each other to provide for and share the cost of municipal services; and WHEREAS, Louisville is party to an Enterprise License Agreement ("ELA") with Lucity, Inc. ("Lucity") for public works' computerized maintenance management systems; and WHEREAS, Lucity offers a tiered pricing program for its ELA for small municipalities and county governments whereby the prices decrease with the increase of the municipality's population; and WHEREAS, Estes Park desires to obtain a sublicense under the ELA, and Lucity is willing to grant the sublicense subject to Louisville’s and Estes Park’s agreement to be contractually bound to the applicable terms and conditions of the ELA; and WHEREAS, in operating under one ELA with one sublicense agreement, Louisville and Estes Park are able to combine their populations to constitute one ELA, which, based upon the total population of the two, qualifies the parties as a Tier 2 Agency making them eligible for discounted prices not available if they had acted as separate governmental entities: and WHEREAS, based upon their populations the parties agree to apportion the expense of shared services upon the following percentages: Louisville 78% and Estes Park 22%; and WHEREAS, Louisville and Estes Park desire to set forth their duties and obligations concerning the ELA through adoption of an intergovernmental agreement. NOW, THEREFORE, the parties agree as follows: 1.Parties/Term. Effective June 17, 2014, Louisville entered into an ELA with Lucity for public works' computerized maintenance management services. Estes Park shall upon the effective date of their approval of this Agreement become sublicensee under Louisville’s ELA with Lucity. The ELA and sublicense agreements shall run for a period of one year which shall, absent 60 days prior written notice of non-renewal by a party, automatically renew on an annual basis for a total of three one-year terms. Expiration or termination of the ELA by Louisville or Lucity shall void the sublicense and terminate this Agreement. Should any party other than Louisville terminate their participation, the remaining parties' proportionate share of expenses shall be adjusted on a pro-rata basis as agreed upon by the parties. 2.Costs. Louisville shall be responsible for payment to Lucity for all costs of services and shall, upon receipt of invoices from Lucity, bill the other governmental entities based upon the following shared percentage costs: Louisville (78%) and Estes Park (22%). The parties individually, or with one other, may purchase a bundle of services on the condition that, prior to committing to such expense, the parties, with the approval of Louisville, first determine how the cost shall be apportioned among the parties. Payment shall be due in full to Louisville within thirty (30) days of the invoicing date. 3.Liability and Immunity. ATTACHMENT 2 2 Without waiving the privileges and immunities conferred by the Colorado Governmental Immunity Act, Section 24-10-10 I et seq., C.R.S., each party shall be responsible for any claims, demands or suits arising out of its own negligence. It is specifically understood and agreed that nothing contained in this paragraph or elsewhere in this Agreement shall be construed as an expressed or implied waiver by any party of the rights, immunities, protections, and limitations afforded the parties by the Colorado Governmental Immunity Act, C.R.S. §24-10-101 et seq., as same may be amended from time to time. 4. Non-Appropriation. Because this Agreement may extend beyond the current fiscal year, the parties understand and intend that the obligation of the parties to pay any costs hereunder constitutes a current expense of the parties payable exclusively from the parties' funds and shall not in any way be construed to be a general obligation of indebtedness of the parties, within the meaning of any provision of Article XI of the Colorado Constitution, or any other constitutional or statutory indebtedness. None of the parties has pledged the full faith and credit of the state, or the parties, to the payment of the charges hereunder, and this Agreement shall not directly or contingently obligate the parties to apply money from, or levy, or pledge any form of taxation to the payment of any costs. Notwithstanding any other provision of this Agreement to the contrary, any financial obligation of any party extending beyond its current fiscal year shall be subject to annual appropriation, budgeting, and availability of funds, and in the event of a non- appropriation relative to this Agreement, the ELA, or both, this Agreement shall terminate effective December 31 of the then-current fiscal year. 5.Notices. Any notices, bills, invoices, or other documents required by this Agreement shall be sufficiently delivered if sent by the parties in the United States mail, postage prepaid, or by email to the parties at the following addresses: Citv of Louisville Town of Estes Park 749 Main Street PO Box 1200 Louisville, CO 80027 Estes Park, CO 80517 Attn: Kurt Kowar (kurtk@louisvilleco.gov) Attn: Reuben Bergsten (rbergsten@estes.org) 6.Default. In the event any party fails to make any payment required by Louisville, or perform any other covenant of this Agreement, such party shall be provided written notice that its participation in this Agreement will be terminated unless cured within thirty (30) days of the notice of default. Unless termination is due to non- appropriation of funds, termination shall not relieve the defaulting party of any financial obligations that were due prior to the default and such obligation shall be subject to all costs of collection including reasonable attorney fees. 7. Joinder of Additional Parties. Additional parties may, subject to the unanimous approval of all current parties, and upon approval of Lucity, and execution of a sublicense agreement, become parties to this Agreement, upon which the parties shall adjust the financial responsibility of each based upon each entity's population. 3 8.Miscellaneous. a.Assignment. Except as otherwise provided in this Agreement, no party may assign the Agreement and/or any of its rights and obligations hereunder without the prior written consent of the other parties. b.Merger. This Agreement represents the entire agreement between the parties with respect to the subject matter hereof and all prior agreements, understandings, or negotiations shall be deemed merged herein. No representations, warranties, promises, or agreements, express or implied, shall exist between the parties, except as stated herein. c.Amendment. No amendment to this Agreement shall be made or deemed to have been made unless in writing, as agreed upon and executed by all parties. d.Governing Law. This Agreement shall be interpreted and enforced according to the laws of the State of Colorado. Venue for any action hereunder shall be in Boulder District Court, Colorado. e.Authority. The parties represent that each has taken all actions that are necessary or that are required by its procedures, bylaws, or applicable law to legally authorize the undersigned signatories to execute this Agreement on behalf of the parties and to bind the parties to its terms. f.Severability. To the extent that this Agreement may be executed and performance of the obligations of the parties may be accomplished within the intent of the Agreement, the terms of the Agreement are severable, and should any term or provision hereof be declared invalid or become inoperative for any reason, such invalidity, or failure, shall not affect the validity of any other terms or provision hereof. g.Waiver. The waiver of any breach of a term hereof shall not be construed as a waiver of any other term, or the same term upon a subsequent breach. h.No Third Party Beneficiaries. It is expressly understood and agreed that enforcement of the terms and conditions of this Agreement and all rights of action relating to such enforcement, shall be strictly reserved to the parties hereto and nothing contained in this Agreement shall give or allow any such claim or right of action by any other or third person under this Agreement. It is the express intention of the parties to this Agreement that any person or entity other than the parties receiving services or benefits under this Agreement be deemed an incidental beneficiary only. i.Changes in Law. This Agreement is subject to such modifications as may be required by changes in state law. Any modification shall be discussed and agreed upon by the parties and be incorporated in this Agreement by a written amendment signed by the parties. j.Paragraph Headings. The captions and headings set forth in this Agreement are for convenience or reference only and shall not be construed so as to define or limit its terms and provisions. k.Counterparts. This Agreement may be executed in counterparts. Signatures on separate originals shall constitute and be of the same effect as signatures on the same original. Electronic and faxed signatures shall constitute original signatures. 4 IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate originals on the day and year first written above. CITY OF LOUISVILLE By:________________________________ Christopher M. Leh, Mayor ATTEST: __________________________________ Meredyth Muth, City Clerk TOWN OF ESTES PARK By: ________________________________ Gary Hall, Mayor ATTEST: __________________________________ Jackie Williamson, Town Clerk APPROVED AS TO FORM _____________________________ Daniel Kramer, Town Attorney INTERNAL SERVICES Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Derek Pastor, PMP, Project Manager Paul Fetherston, Internal Services Director Date: August 13, 2024 RE: Resolution 64-24 Contract with Classic Contractors, Inc for the Additional Greenhouse – Parks Shop – 600 Big Thompson Avenue (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER______________ QUASI-JUDICIAL YES NO Objective: Internal Services staff seek approval from the Town Board for the construction contract with Classic Contractors, Inc for the installation of an additional greenhouse to be used by the Parks Division at 600 Thompson Avenue. Present Situation: The Parks Division’s current greenhouse is operating at maximum capacity. A second greenhouse adjacent to the existing one behind the Visitor Center will enable staff to cultivate a wider variety and larger quantity of summer plants, and to extend the growing season for certain plants, ensuring a more consistent and reliable supply throughout the summer months. After four (4) weeks of advertising, (one)1 bid was received and opened on July 18, 2024. Two (2) attendees were present at the pre-bid meeting. The following table contains the project budget and bid summary: Approved Budget Amount $234,000 COMPANY CITY TOTAL PROPOSAL Classic Contractors, Inc Loveland, CO $284,383.00 Internal Services staff have confirmed the contractor’s capabilities and their experience performing projects of similar cost and complexity in Colorado. Proposal: Internal Services staff propose approval of the construction agreement with Classic Contractors, Inc., for the Additional Greenhouse Installation Project. Although the contractor’s proposal is over the approved Capital Improvement Project (CIP) budget, the Finance Department has confirmed that savings from other capital projects can be reallocated to sufficiently fund this project. This project will be managed by the Public Works Project Manager with daily status updates and weekly (minimum) inspections for the duration of the project. Advantages: • With two greenhouses, Parks Division staff can optimize the use of space by allocating one for summer plants and the other for different crops, such as winter or spring plants. This segregation allows for more efficient use of resources and better management of plant rotations. • Building a second greenhouse for summer plants can significantly enhance control of overgrowing conditions, improve plant health and yield, and optimize resource use, contributing to both success and sustainable gardening practices. Disadvantages: • Energy Consumption: Greenhouses require energy for heating, cooling, and lighting, which can lead to higher utility bills. • Maintenance: Regular maintenance and repairs of the structure and systems (e.g., irrigation, HVAC) are necessary to keep the greenhouse functioning optimally. Action Recommended: Internal Services staff recommend Town Board approval of the attached construction contract with Classic Contractors, Inc., in the amount of $284,383.00, and authorize the PW staff to spend up the budgeted amount of $310,000 if needed to pay for unanticipated conditions encountered during construction. Upon approval, the contractor can order the equipment and have this project completed in November/December 2024. Finance/Resource Impact: The Town previously budgeted $234,000.00 for this project. Project Code: GRNHS2; Account Number: 204-5400-544-35-61. The contract amount for this project is $284,383.00. Finance has adjusted this budget amount to $310,000.00 to account for the contract amount plus contingency if needed. Level of Public Interest The level of public interest for this project is considered to be low. Sample Motion: I move for the approval/ denial of Resolution 64-24. Attachments: 1. Resolution 64-24 2. Greenhouse Installation Construction Contract RESOLUTION 64-24 APPROVING A CONSTRUCTION CONTRACT WITH CLASSIC CONTRACTORS, INC. FOR THE INSTALLATION OF AN ADDITIONAL GREENHOUSE WHEREAS, the Town Board wishes to enter into a construction contract referenced in the title of this resolution for the installation of an additional greenhouse to be used by the Parks Division. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: The Board approves, and authorizes the Mayor to sign, the construction contract referenced in the title of this resolution in substantially the form now before the Board. The contract amount for this construction project is $284,383.00. The Board authorizes the Public Works Director or designee to spend up the budgeted amount of $310,000 in total if needed to pay for unanticipated conditions encountered during the construction project. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney ATTACHMENT 1 Agreement for Construction Contract-Greenhouse Installation - Page 1 of 5 CONSTRUCTION CONTRACT Greenhouse Installation THIS CONTRACT is made at the Town of Estes Park, Colorado, by and between the Town of Estes Park, Colorado (Town), a municipal corporation, and Classic Contractors, Inc., a Colorado corporation, whose address is PO Box 2798 Loveland, CO 80539. In consideration of these mutual covenants and conditions, the Town and Contractor agree as follows: SCOPE OF WORK. The Contractor shall execute the entire Work described in the Contract Documents. CONTRACT DOCUMENTS. The Contract incorporates the following Contract Documents. In resolving inconsistencies among two or more of the Contract Documents, precedence will be given in the same order as enumerated. LIST OF CONTRACT DOCUMENTS. The Contract Documents, except for Modifications and Change Orders issued after execution of this Agreement, are: 1. Change Orders; 2. Construction Contract; 3. The following addenda, if any: i.Number Dated Page(s) 1 July 2, 2024 37 4. Special Conditions updated August 5, 2024 5. General Conditions; 6. The following Technical Specifications: i.Document Title Pages TOEP Parks Division Greenhouse Parts List 1 7. The following Drawings: i. Title Date TOEP Parks Division Greenhouse Plans April 29, 2024 TOEP Parks Division Greenhouse Concrete Work May 10, 2023 8.Notice to Proceed; 9.Notice of Award; 10.Invitation to Bid ATTACHMENT 2 Agreement for Construction Contract-Greenhouse Installation - Page 2 of 5 11. Bid Bond; 12. Bid Proposal; 13. Instructions to Bidders; 14. Performance Bond and Payment Bond; 15. Insurance Certificates; 16. Construction Progress Schedule; and 17. Any other documents listed as Contract Documents in the General Conditions. CONTRACT PRICE. The Town shall pay the Contractor for performing the Work and the completion of the Project according to the Contract, subject to change orders as approved in writing by the Town, under the guidelines in the General Conditions. The Town will pay the base sum of two hundred eighty-four thousand three hundred eighty-three dollars ($284,383.00), to the Contractor, subject to full and satisfactory performance of the terms and conditions of the Contract. The Town has appropriated sufficient money for this work. COMPLETION OF WORK. The Contractor must begin work covered by the Contract within 90 work days, and must complete work: [Select one] __X_ within 60 calendar days from and including the date of Notice to Proceed, according to the General Conditions. ___ by. ___ as described in the Special Conditions. LIQUIDATED DAMAGES. If the Contractor fails to substantially complete the Work within the time period described above, or within such other construction time if modified by a change order, the Town may permit the Contractor to proceed, and in such case, may deduct the sum of $500.00 for each calendar day that the Work shall remain uncompleted from monies due or that may become due the Contractor. This sum is not a penalty but is the cost of field and office engineering, inspecting, interest on financing and liquidated damages. The parties agree that, under all of the circumstances, the daily basis and the amount set for liquidated damages is a reasonable and equitable estimate of all the Town's actual damages for delay. The Town expends additional personnel effort in administrating the Contract or portions of it that are not completed on time, and such efforts and the costs thereof are impossible to accurately compute. In addition, some, if not all, citizens of Estes Park incur personal inconvenience and lose confidence in their government as a result of public projects or parts of them not being completed on time, and the impact and damages, certainly serious in monetary as well as other terms are impossible to measure. Agreement for Construction Contract-Greenhouse Installation - Page 3 of 5 SERVICE OF NOTICES. Notices to the Town are given if sent by registered or certified mail, postage prepaid, to the following address: TOWN OF ESTES PARK Public Works Department 170 MacGregor Ave Estes Park, CO 80517 INSURANCE PROVISIONS. The Contractor must not begin any work until the Contractor obtains, at the Contractor's own expense, all required insurance as specified in the General Conditions. Such insurance must have the approval of the Town of Estes Park as to limits, form and amount. RESPONSIBILITY FOR DAMAGE CLAIMS. The Contractor shall indemnify, save harmless, and defend the Town, its officers and employees, from and in all suits, actions or claims of any character brought because of: any injuries or damage received or sustained by any person, persons or property because of operations for the Town under the Contract; the Contractor's failure to comply with the provisions of the Contract; the Contractor's neglect of materials while constructing the Work; because of any act or omission, neglect or misconduct of the Contractor; because of any claims or amounts recovered from any infringements of patent, trademark, or copyright, unless the design, device, materials or process involved are specifically required by Contract; from any claims or amount arising or recovered under the "Workers' Compensation Act," by reason of the Contractor's failure to comply with the act; pollution or environmental liability; or any failure of the Contractor to comply with any other law, ordinance, order or decree. The Town may retain so much of the money due the Contractor under the Contract, as the Town considers necessary for such purpose, for the Town's use. If no money is due, the Contractor's Surety may be held until such suits, actions, claims for injuries or damages have been settled. Money due the Contractor will not be withheld when the Contractor produces satisfactory evidence that the Contractor and the Town are adequately protected by public liability and property damage insurance. The Contractor also agrees to pay the Town all expenses incurred to enforce this "Responsibility for Damage Claim" agreement and if the Contractor's insurer fails to provide or pay for the defense of the Town of Estes Park, its officers and employees, as additional insureds, the Contractor agrees to pay for the cost of that defense. Nothing in the INSURANCE PROVISIONS of the General Conditions shall limit the Contractor's responsibility for payment of claims, liabilities, damages, fines, penalties, and costs resulting from its performance or nonperformance under the Contract. STATUS OF CONTRACTOR. The Contractor is performing all work under the Contract as an independent contractor and not as an agent or employee of the Town. No employee or official of the Town will supervise the Contractor nor will the Contractor exercise supervision over any employee or official of the Town. The Contractor shall not represent that it is an employee or agent of the Town in any capacity. The Contractor and its employees are not entitled to Workers' Compensation benefits from the Town and are obligated to pay federal and state income tax on money earned pursuant to the Contract. This is not an exclusive contract. Agreement for Construction Contract-Greenhouse Installation - Page 4 of 5 THIRD-PARTY BENEFICIARIES. None of the terms or conditions in the Contract shall give or allow any claim, benefit, or right of action by any third person not a party to the Contract. Any person except the Town or the Contractor receiving services or benefits under the Contract shall be only an incidental beneficiary. INTEGRATION. The Contract is an integration of the entire understanding of the parties with respect to the matters set forth in it, and supersedes prior negotiations, written or oral representations and agreements. DEFINITIONS. The Definitions in the General Conditions apply to the entire Contract unless modified within a Contract Document. EXECUTED this 13th day of AUGUST, 2024 (Signature pages to follow.) Agreement for Construction Contract-Greenhouse Installation - Page 5 of 5 TOWN OF ESTES PARK By: August 13, 2024 Date Title: Mayor State of ) ) ss County of ) The foregoing instrument was acknowledged before me by , as of the Town of Estes Park, a Colorado municipal corporation, on behalf of the corporation, this day of , 2024. Witness my hand and official Seal. My Commission expires . Notary Public APPROVED AS TO FORM: Town Attorney Agreement for Construction Contract-Greenhouse Installation - Page 6 of 5 CONTRACTOR By: Date Title: _______________________________ State of ) ) ss: County of ) The foregoing instrument was acknowledged before me by , (Name of party signing) as of (Title of party signing) (Name of corporation) a corporation, on behalf of the corporation, this (State of incorporation) day of , 2024. Witness my hand and official Seal. My Commission expires . Notary Public POLICE DEPARTMENT Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Ian Stewart, Chief of Police Date: August 13, 2024 RE: Resolution 65-24 Intergovernmental Agreement for School Resource Officer Services with the Park R-3 School District for school years 2024- 2025, 2025-2026 and 2026-2027 (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER______________ QUASI-JUDICIAL YES NO Objective: The Police Department has provided School Resource Officer (SRO) services to the Park School District R-3 since 2005. Annual agreements have been signed since the inception of the program. Several years ago, we moved to multi-year agreements. Present Situation: This agreement will cover the school years 2024-2025, 2025-2026, and 2026-2027. The amount the district contributes to this position will not change during this period. The agreement attached has already been approved and signed by the Superintendent of the schools and reviewed by our legal team. Proposal: To continue this agreement for the next 3 school years. Advantages: To have an officer in the schools during the school year has many advantages. Not only the presence of an armed officer for any criminal activity or possible threats, the school resource officer builds trust among the students and faculty and regularly presents information to all levels of students. The school resource officer is well respected in the district. Disadvantages: No negatives at this time. Action Recommended: Staff recommends approval on the Consent Agenda. Finance/Resource Impact: The district budgets $40,000 annually to offset the cost of the School Resource Officer. Level of Public Interest Staff believes that this topic is of high interest to the school district, the faculty, students and parents. Sample Motion: I move for the approval of Resolution 65-24. Attachments: 1. Resolution 65-24 2. Agreement between the Town of Estes Park and the Estes Park School District R-3 RESOLUTION 65-24 A RESOLUTION APPROVING AN AGREEMENT WITH THE ESTES PARK SCHOOL DISTRICT FOR THE SCHOOL RESOURCE OFFICER PROGRAM WHEREAS, the Town Board wishes to approve an updated version of an expiring agreement with the Estes Park School District for the purpose of continuing the school resource officer program. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: The Board approves, and authorizes the Mayor to sign, the agreement referenced in the title of this resolution in substantially the form now before the Board. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney ATTACHMENT 1 AGREEMENT This AGREEMENT ("Agreement"), made and entered into this day of , for the 2024-2025, 2025-2026, 2026-2027 school years, by and between: ESTES PARK SCHOOL DISTRICT R-3 (hereinafter referred to as DISTRICT"), AND; TOWN OF ESTES PARK (hereinafter referred to as "TOWN") WITNESSETH: WHEREAS, the DISTRICT desires the TOWN to have a police officer serve as a school resource officer in all of its schools to assist in maintaining safe school environments, to improve school law enforcement collaboration, and to improve perceptions and relations between students, staff and law enforcement officials. WHEREAS, the DISTRICT and the TOWN both recognize the outstanding benefits that the School Resource Officer program has for the citizens of Estes Park and particularly for the students attending the DISTRICT'S schools. The parties agree that it is in the best interests of the DISTRICT, the TOWN, and the citizens of the community to continue the program as set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows: SECTION 1. DUTIES AND RESPONSIBILITIES OF THE TOWN 1.1 TOWN serving as the sole and primary law enforcement jurisdiction, shall provide; for the 2024-2025, 2025-2026, 2026-2027 school years, when school is in session, one (1) school resource officer, (hereinafter referred to as SRO) to the school campus operated by the DISTRICT. Estes Park R-3 Elementary 1505 Brodie Avenue Estes Park, Colorado 80517 Estes Park R-3 Middle School 1500 Manford Avenue Estes Park, Colorado 80517 Estes Park R-3 High School 1600 Manford Avenue Estes Park, Colorado 80517 ATTACHMENT 2 1.2 The SRO shall abide by DISTRICT policies and regulations, and TOWN policies, rules and regulations. 1.3 TOWN shall be responsible for the supervision, control, and direction of all aspects of employment of the police officer assigned to the SRO Program. However, the TOWN shall solicit input from the principals and Superintendent each year for evaluation and program effectiveness of the SRO program. 1.4 TOWN shall ensure that the exercise of the law enforcement powers by the SRO is in compliance with the authority granted by law. 1.5 The SRO shall not function as a school disciplinarian or security officer, and shall not intervene in the normal disciplinary actions of the school system, nor be used to witness any disciplinary procedures in the school. The SRO, at all times, will be expected to act within the scope of authority granted by law as a police officer and shall be expected to the following: (a)To perform daily law enforcement functions within the school setting. (b)To respond to emergency situations for the protection of students and staff consistent with the SRO's responsibility. (c)To identify and mitigate, through counseling and referral, delinquent behavior, including substance abuse. (d)To foster a better understanding of the law enforcement function. (e)To develop positive concepts of law enforcement. (f)To develop a better appreciation of citizen rights, obligations and responsibilities. (g)To provide information about crime prevention. (h)To provide assistance and support for crime victims identified within the school setting, including abused children. (i)To promote positive relations between students and law enforcement officers. (j)To enhance knowledge of the fundamental concept and structure of law. (k)To provide to students instruction in various aspects of law enforcement and education, emphasizing an educational component for students concerning policing practices and enforcement initiatives related to juvenile behavior. The SRO shall consult and coordinate instructional activities through the school principals. (l)To participate each year with career activities held by the schools. (m)To meet, when requested, with the Superintendent or their designee for the purpose of reviewing the educational needs of the schools relating to the SRO. (n)To provide information and reports allowed and required by Colorado law, as discussed in applicable formal opinions of the Colorado Attorney General, to the Superintendent or their designee relating to enrolled students within the Estes Park R- 3 School District. (o)To support specific administrative actions taken by the building administrators and the Superintendent in maintaining a drug free school environment, only when asked by the Superintendent and subject to supervisor's approval. (p) The SRO may, when requested, work closely with the schools’ primary emergency service provider for the coordination and planning of all crisis situations that potentially affect campus safety. (q) The TOWN shall ensure the SRO receives annual and updated training relevant to providing police services within the school environment. 1.3 Qualifications for officer assignment to the SRO program are: (a) Must be a full-time peace officer, with full police authority. (b) Shall possess knowledge of the applicable Federal and State laws. City and County ordinances, and Estes Park School District policies and regulations. (c) Shall have access to police resources to conduct criminal investigations. (d) Shall possess even temperament and set a good example for students. (e) Shall possess communication skills that would enable the officer to function effectively within the school environment. 1.4 The TOWN reserves the right to change the officer assigned to SRO duties during the course of the agreement. 1.5 The SRO shall be on duty at the school 40 hours per week or five (5) school days per week, as determined by and at the sole discretion of the TOWN, during regular school hours when students are required to attend, subject to the absence of the SRO for TOWN emergency needs, training needs or as law enforcement requirements prohibit. If an absence must occur during scheduled days, due to vacation, sick or training time, the SRO or department will notify the administrative assistant of the Superintendent of the SRO's absence. Patrol officers, while performing their regular patrol duties, will respond to calls for service, perform extra checks and walkthroughs and or offer support in the absence of the SRO. During non-scheduled days, district personnel will contact dispatch for police services. The TOWN reserves the right to amend this commitment if staffing levels dictate that they do so. SECTION 2. DUTIES AND RESPONSIBILITIES OF DISTRICT 2.1 The principal or their designee at the designated school shall be the on-site contact person for the SRO and shall be responsible for communicating the day-to-day need of service from the SRO. The Superintendent shall ensure the SRO program supports meeting the mission and vision of the DISTRICT within the school district. The Superintendent shall assign a designee to serve as the district liaison for the program. 2.2 The DISTRICT agrees to provide the SRO an office to conduct matters of confidentiality with a desk, necessary office furnishings and a telephone. 2.3 The DISTRICT shall maintain control over the content of all educational programs and instructional materials. 2.4 The SRO shall have access to educational records under the following conditions: (a) Law enforcement access to educational records shall be in compliance with all applicable laws and regulations, including as discussed in applicable formal opinions of the Colorado Attorney General. (b) The SRO shall have access to confidential educational records to perform work that is directly related to their duties at the school. (c) Law enforcement access to records for purposes outside the scope of the SRO's duties at the school shall be limited to: (1) Public information, such as yearbooks or student directory information. (2) Information needed in an emergency to protect the health or safety of the student or other individuals, based on the seriousness of the threat to someone's health or safety, the need of the information to meet the emergency situation and the extent to which time is of the essence. (3) If confidential student records information is needed, but no emergency situation exists, the information, depending on the situation, may be released by the school principal or Superintendent. Otherwise, the records will be made available by the issuance of a search warrant or subpoena. (d) Law enforcement records shall be made available by the TOWN to the principal, Superintendent or designee, in accordance with law. SECTION 3. FINANCIAL SUPPORT OF SRO POSITION 3.1 This agreement shall be made for the duration of three (3) school years, beginning the first day of student attendance through the last day of student attendance each year. 3.2 This agreement shall continue in effect until the duration of the term described in paragraph 3.1 or until terminated by either of the parties in accordance with the terms listed in Section 4 below. 3.3 The DISTRICT has agreed to pay $40,000 annually to help cover a portion of the cost of the SRO position in the schools for the 2024-2025, 2025-2026, 2026-2027. The TOWN shall invoice the DISTRICT every January for the full amount. SECTION 4. TERMINATION 4.1 Either party may terminate this agreement by serving written notice upon the other party at least thirty (30) days in advance of such termination. SECTION 5. INVALID PROVISION 5.1 Should any part of this Agreement be declared invalid by a court of law, such decision shall not affect the validity of any remaining portion which shall remain in full force and effect as if the invalid portion was never a part of this Agreement when it was executed. Should the severance of any part of this Agreement materially affect any other rights or obligations of the parties hereunder, the parties hereto will negotiate in good faith to amend this Agreement in a manner satisfactory to the parties. Failing agreement on such amendment, either party may by notice in writing, terminate this Agreement forthwith subject to the provisions of this Agreement relating to termination. SECTION 6. INDEMNIFICATION 6.1 The DISTRICT agrees to indemnify and save harmless the TOWN for any liability whatsoever arising out of the negligent acts of the DISTRICT's employees or agents. To the extent permitted by law, the TOWN agrees to indemnify and save harmless the DISTRICT of any liability whatsoever arising out of the negligent acts of the school resource officer or the TOWN. Nothing in this Agreement shall be construed to affect in any way the TOWN or the DISTRICT's rights, privileges, and immunities, including sovereign immunity as provided by law. The parties hereto understand and agree that the DISTRICT, the TOWN, and their officers and employees are relying on, and do not waive or intend to waive by any provision of this Agreement, the monetary limitations or any other rights, immunities, and protections provided by the Colorado Governmental Immunity Act, C.R.S. 24-10-101 et seq., as from time-to-time amended, or otherwise available by other provision of law to either party, their officers, or their employees. SECTION 7. ASSIGNMENT 7.1 Neither party to the Agreement shall, directly or indirectly, assign or purport to assign this Agreement or any of its rights or obligations in whole or in part to any third party without the prior written consent of the other party. SECTION 8. NO WAIVER 8.1 The failure of either party to enforce at any time any of the provisions, rights, or to exercise any elections provided, shall in no way be considered to be a waiver of such provisions, rights or elections or in any way effect the validity of the Agreement. The failure to exercise by either party any of its rights herein or any of its elections under the terms or conditions herein contained shall not preclude or prejudice it from exercising the same or any other right it may have under this Agreement, irrespective of any previous action or proceeding taken by it hereunder. SECTION 9. COMPLETE AGREEMENT 9.1 This Agreement is the complete Agreement of the parties; may be amended or modified only in writing; and supersedes, cancels and terminates any and all prior agreements or understandings of the parties, whether written or oral, concerning the subject matter hereof. SECTION 10. CHOICE OF LAW 10.1 This Agreement shall be governed by and construed and interpreted according to the laws of the State of Colorado. It shall be binding upon and inure to the benefit of the successors of the TOWN and DISTRICT. SECTION 11. NON-DISCRIMINATION PROVISION 11.1 The parties shall not discriminate against any employee or participant in this program because of disability, race, creed, color, sex, sexual orientation, gender identity, gender expression, marital status, religion, age, national origin, or ancestry. SECTION 12. NOTICE PROVISIONS 12.1 When any of the parties desire to give notice to the other, such notice must be in writing sent by US Mail, postage prepaid, addressed to the party for whom it is intended at the place last specified; the place for giving notice shall remain such until it is changed by written notice in compliance with the provisions of the paragraph. For the present, the parties designate the following as the respective places for giving notices: To DISTRICT: Superintendent of Schools Estes Park School District R-3 1605 Brodie Avenue Estes Park, Colorado 80517 To TOWN: Town Administrator Town of Estes Park P.O. Box 1200 Estes Park, Colorado 80517 SECTION 13. AUTHORITY 13.1 Each person signing this Agreement on behalf of either party individually warrants that they have full legal power to execute this agreement on behalf of the party for whom they are signing, and to bind and obligate such party with respect to all provisions contained in this Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first written above. (Signature page to follow.) ESTES PARK SCHOOL DISTRICT R-3 By: Date: Ruby Bode Superintendent of Schools TOWN OF ESTES PARK By: Date: August 13, 2024 Gary Hall Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney Human Resources Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Jackie Williamson, Town Clerk/HR Director Date: August 13, 2024 RE: Resolution 66-24 Lease Agreement with Ponderosa Realty for a Two-Year Lease for a Transitional Housing Unit from September 2024 to August 2026. PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER QUASI-JUDICIAL YES NO Objective: Human Resources is requesting the Board’s consideration of a lease agreement with Ponderosa Realty for a transitional housing unit to house new employees. Present Situation: The Town has rented the current property through Ponderosa Realty for the past year as a test to determine the feasibility of the Town renting properties for transitional housing for new employees. During the past year this unit has been rented for all but two weeks. The unit allowed the Town to hire and provide transitional housing for a highly qualified staff member in a position that is difficult to fill. This employee was able to find other housing this summer, therefore, the unit was available to house a seasonal employee. Without this opportunity the seasonal employee may not have come to Estes Park for the short summer season. Proposal: Staff is proposing an extension of the lease through Ponderosa Realty for two years. Ponderosa Realty has guaranteed the monthly lease at the same rate as the current lease for the next two years. The Town would sublet the apartment to employees through our current rental agreement used for Town owned units. The Town would pay the rent directly to Ponderosa and collect the rent from the employee through a payroll deduction. There continues to be a risk the Town may pay a month’s rent here or there during the lease if an employee is not housed in the unit in between rental agreements. Advantages: • Provides transitional housing for new employees to eliminate the barrier to relocating to Estes Park. • Provides the Town with a guaranteed unit to sublet throughout the next two years. • Assists the Town in attracting and hiring highly talented employees. Disadvantages: • The Town may lose the opportunity to attract and house highly qualified employees, especially important for critical position within the Town operations. Action Recommended: Approve Resolution 66-24 to provide a transitional housing unit the Town can use to house new employees. Budget: The annual rental cost of $13,800 would be covered by the General Fund if the Town is unable to rent the unit to an employee. It is anticipated the unit will be occupied for most of the lease with a majority of the rent paid by an employee. Level of Public Interest: Low. Sample Motion: I approve/deny Resolution 66-24. Attachments: 1) Resolution 66-24 2) Lease Agreement with Ponderosa Realty RESOLUTION 66-24 A RESOLUTION APPROVING A LEASE AGREEMENT WITH PONDEROSA REALTY & MANAGEMENT, INC. FOR TRANSITIONAL EMPLOYEE HOUSING WHEREAS, the Board of Trustees of the Town of Estes Park, Colorado wishes to enter a lease agreement with Ponderosa Realty & Management, Inc. to provide transitional employee housing beginning September 1, 2024, and ending August 31, 2026; and WHEREAS, with a lease term of two years, the Board determines that the lease is a short-term lease. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: The Board approves, and authorizes the Mayor to sign, the lease agreement referenced in the title of this resolution, in substantially the form now before the Board, as well as any ancillary documents. The Board authorizes the Town Administrator or designee to sublease the subject property as transitional employee housing. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney ATTACHMENT 1 Initial________ LEASE AGREEMENT THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING. This document is not a Colorado state approved form. This form was written by Glenn D. Malpiede at Estes Park Legal Services. THIS LEASE is made this ___July 10, 2024___, between Ponderosa Realty & Management, Inc. (hereinafter referred to as Manager) on behalf of Nicholas C. Stanitz Trust (hereinafter referred to collectively as Landlord) and The Town of Estes Park (hereinafter referred to collectively as Tenant). In consideration of the payment of the rent and the conditions set forth below, the Manager does hereby lease to the Tenant the property located at and described as: 600 Moccasin Circle Drive unit D2 Estes Park, CO 80517. TO HAVE AND TO HOLD the above described premises for the lease term commencing on noon the _1st day of September, _2024, and until midnight on the 31st day of August, 2026. 1. The rent for the said term is $_27,600.00__ payable in monthly installments of $_1,150.00______ each, due the first day of each month during the aforesaid lease term to be paid at the office of Ponderosa Realty & Management, Inc., at 1751 North Lake Avenue, Suite 104, Estes Park, CO 80517. Rent received on or after the 7th day after the due date shall be deemed late and Tenant agrees to pay a LATE FEE of 5% or $50.00, which ever is greater per month thereafter until both rent and late fees for that period have been paid in full. Rent received on or after the 7th day after the due date shall constitute a breach of this Lease Agreement. Utilities to be paid by Tenant are as follows: (lines marked with “X” shall constitute Tenant responsibility) _X_ ELECTRIC __NA__ GAS/PROPANE _NA___ TRASH __X___ PHONE ___NA___ WATER ___NA____SAN/SEWER ____X__ TV/CABLE __X____INTERNET All utilities to be paid by the Tenant must be transferred into Tenant’s name starting on the occupancy date. Failure to do so will result in breach and termination of lease. 2. RENEWAL TERMS. This lease shall automatically renew for an additional period of one month, and sequential periods of one month each thereafter, unless either party gives written notice of the termination no less 30 days prior to the end of the term or renewal term. The lease terms during any such renewal shall be the same as those contained in this Lease; any changes within shall require no less than 30 days written notice. 3. OCCUPANTS. The premises may not be occupied by more than 2 person(s) unless prior written consent of Landlord is obtained. 4. PARKING. Tenant shall be entitled to park 1 motor vehicle(s) on the premises. 5. PETS. No pets allowed without prior written approval by Landlord. Approved pets are: None Additional pet deposit required: $____NA_______ 6. SECURITY DEPOSIT. A security deposit of $_1,150.00___ is required to be paid in full before occupancy date. The deposit will be held by Ponderosa Realty & Management, Inc. Tenant hereby agrees that security deposit shall not accrue interest to Tenant’s benefit. The security deposit will be refunded within sixty (60) days after Tenant vacates the premises, after the deduction therefrom of any costs that include, but are not limited to the following: a. Rent owed plus interest; b. Accrued and unpaid late fees; ATTACHMENT 2 Initial________ c. Damages and repairs to or on the premises; d. Cleaning costs including the interior and exterior of the premises, carpets, appliances, trash removal and removal and storage of any personal property, (ordinary wear and tear expected). Note cleaning addendum in paragraph 6.k., below. e. Final utility bills that are unpaid by the Tenant. f. Attorney fees and costs incurred in the enforcement of this lease, for collection of monies due under this lease or for eviction and forceable entry proceedings, which shall be at the expense of the Tenant. g. Costs incurred by tenant’s early termination of lease. Any unused portion of the deposit will be returned to the last known address of the Tenant with a written explanation of any deductions made. The deposit will be forfeited if Tenant moves out without a thirty (30) day written notice or vacates prior to the end of the agreed lease period. 7. TENANT RESPONSIBILITIES. The responsibilities of the Tenant include but are not limited to the following: a. Tenant shall be responsible for clearing of any clogged drains and sewer lines unless said stoppage is the result of a structural defect, or root growth in the main sewer line. The Tenant shall keep the interior and exterior of the leased premises in a neat and clean condition, free from debris, filth, waste or any flammable, dangerous, or detrimental material. Tenant shall be responsible for grounds maintenance, care of trees and shrubs, keeping the grounds clear of debris, raking pine needles, and keeping any walkways and decks clear of snow. Any damage to the interior or exterior of the leased premises, including damage to the well, septic system, sewer lines trees, shrubs or structures due to Tenant’s action, inaction or negligence will be repaired or replaced entirely at Tenant’s expense. Any such cost advanced by the Landlord or Manager for which Tenant is responsible shall bear interest at the rate of 18% per annum. b. Tenant shall not create or permit any disturbance or nuisance that will interfere with the rights, safety, comforts or convenience of neighbors or those providing repairs or maintenance. c. Tenant agrees that the premises, its appliances and appurtenances have been thoroughly inspected and hereby accepts the property and these items in their present condition, “as-is”, and that no warranty, expressed or implied, has been given by Landlord or Manager regarding the condition of these items, nor has any promise been made to repair or replace same, and Tenant agrees to return the property in that same condition upon move-out, normal wear and tear excepted. d. Tenant shall allow Manager to enter the premises at all reasonable hours to examine the premises and for any required maintenance or repairs. Manager must give reasonable notice before entry unless there is an emergency which could cause damage to the property, in which case, Manager may enter without notice in order to protect the property whether Tenant is or is not present. Manager may also enter the premises without notice if Manager has reason to believe the premises are abandoned. e. Tenant shall not order ANY repair work or service calls without the knowledge and consent of Manager, otherwise Tenant shall be responsible for ALL costs incurred. No changes, alterations or additions, including painting, are to be made without the written consent of the Landlord. Authorized repairs or modifications performed by the Tenant shall not be deducted from the rent for any reason. f. If leased premises is part of a homeowners’ association (HOA), Tenant must strictly adhere to all HOA rules. g. Tenant shall not change any door locks without the written consent of Landlord. h. Tenant shall return all keys and/or garage door opener(s) at the time of move out or pay the following: $5.00 per key issued, actual replacement costs of garage door opener(s). i. Tenant may sublet the property without the express written consent of Landlord, and allow any sublessees to live on the premises subject to the terms of this Lease. j. Tenant hereby agrees to pay a $50.00 charge for any checks returned due to insufficient funds or closed accounts. k. Tenant hereby agrees to have all carpets professionally cleaned, at Tenant’s expense, upon vacating the premises and shall provide Manager with proof of having done so. Tenant also hereby agrees to clean the entire premises, including the home and surrounding grounds, upon vacating the premises, and that Initial________ should they fail to do so Manager may contract with a professional cleaning company to remove all debris, and to clean the entire home, at Tenant’s expense. l. Tenant shall use the premises only for the purposes of a single-family dwelling, and under no circumstances shall any activity be carried on which would violate any ordinance, statute state or federal law including but not limited to zoning regulations. m. Tenant shall keep the premises at or above 55F at all times during the leased period. n. Tenant shall not perform automotive repairs anywhere on the leased premises without written authorization from Landlord. o. Tenant shall keep, test, and maintain all carbon monoxide alarms in good repair. p. Tenant shall notify Manager in writing if the batteries of any carbon monoxide alarm need to be replaced. q. Tenant shall notify Manager in writing if any carbon monoxide alarm is stolen, removed, missing, or non- operational. r. Tenant shall notify Manager in writing of any deficiency in any carbon monoxide alarm that Tenant cannot correct. 8. LANDLORD RESPONSIBILITIES. The responsibilities of the Landlord shall include: a. Landlord shall be responsible for repairs to the exterior of the leased premises, all installed appliances (except for those appliances belonging to Tenant), heating system, wiring and plumbing, provided damage is not caused by Tenant, or those acting by, through or under them. b. Landlord shall abide by the Colorado Warranty of habitability statutes. 9. 9. Landlord/Manager shall not be responsible for loss or damage to Tenant’s personal property for any reason. The Landlord/Manager’s insurance will not cover tenant’s possessions or the loss of use of the residence, in the event of unforeseen circumstances, such as, but not limited to: floods, fires, sewer backups, etc. Tenant is encouraged to obtain renters insurance. Initial__________________ 10. Tenant shall neither hold, nor attempt to hold, Landlord, Landlord’s agents, Manager, Manager’s agents, contractors or employees liable for any injury, damage, claims or loss to persons or property occasioned by any accident, condition or casualty to, upon, or about the premises or any other part of the property, unless such accident, condition or casualty is caused by intentional or reckless acts or omission of the Landlord or Manager. 11. Tenant agrees to pay Landlord’s reasonable legal expenses, including attorney’s fees and court costs, in the event legal action is required to enforce any part of this agreement, including any fees incurred for eviction, forceable entry and/or collection proceedings. 12. Tenant hereby agrees that Tenant’s personal property left on the premises more than 7 days after Tenant has vacated the premises shall be deemed abandoned by Tenant and Landlord/Manager may dispose of the same in such a manner as Landlord/Manager deems appropriate and Tenant shall have no recourse. Tenant shall also be responsible for all costs of removal of personal property, damages to the leased premises, cleaning of the premises, and all unpaid utility bills up to the date Tenant has completely vacated the leased premises, including removal of Tenant’s personal property. 13. If the leased property is FOR SALE at the time of executing this lease agreement, or becomes listed for sale during tenancy, Ponderosa Realty & Management, Inc., or listing Realtor, will try to contact Tenant to notify them of all showings. If Tenant cannot be contacted Tenant hereby agrees that Manager and/or Realtor will only be required to knock before entry. Tenant agrees to maintain the premises in a clean, sanitary and presentable manner at all times. Pets (if allowed) are not to interfere with any showings. Tenant also agrees to allow the posting of FOR RENT or FOR SALE signs as deemed necessary by Landlord or Manager. Initial________ 14.No smoking, vaping, or similar is permitted in home or on premises. 15.Tenant shall neither consume or permit to be consumed any marijuana, medical or otherwise. Nor shall any marijuana growing or sales operations be allowed. 16.No satellite dish may be secured to the roof. Manager must approve any installation of a satellite dish. 17.The “Disclosure of Information on Lead-Based Paint and Lead-Based Hazards” form attached to this Lease is an integral part of the Lease and this Lease is not valid without a completed warning and disclosure statement attached, which must be properly initialed in the space marked “Lessee’s Acknowledgement”, for any home built before 1978. 18.Tenant further agrees that any services not designated to the Manager, will be Tenant’s responsibility (e.g., snow plowing and pest control). 19.GENERAL PROVISIONS. This agreement shall be binding on all heirs, assigns, and executors of the parties. It is agreed that Tenant shall be responsible for any attorney's fees and court cost incurred pursuant to the collection of delinquent rent or to enforce any obligation of the Tenant created hereunder. 20.Notwithstanding any other provision of this agreement, all financial obligations of the Tenant shall be contingent on budgeting, appropriation, and specific availability of funds. Nothing in this agreement constitutes a debt, a direct or indirect multiple fiscal year financial obligation, a pledge of the Tenant’s credit, or a payment guarantee by the Tenant. Tenant hereby agrees that Tenant shall comply with all terms, conditions and provisions of the covenants as set forth in this Lease Agreement. ________________________________ _______________________________ Tenant date: Tenant date: _______________________________ By: ____________________________ Phone # Ponderosa Realty & Management, Inc. Manager _______________________________ _______________________________ Mailing Address # of Keys issued: ____N/A_____; # of garage door openers: _NA_________; Check-in Sheet _N/AP____ Lead-based Paint Disclosure & Pamphlet ___NA_______ Prorated rent for partial month will be for NA days @ $NA_per day, totaling $NA. 8/14/2024 1 Grant Update As of 8.12.24 Direct Impact Grant ● 58 businesses applied ○ Decline ■Total: $3,790,608 ●3 had a decrease more than $250,000 ● 9 had a decrease less than $10,000 ●Largest decrease % - 63.5% ● Smallest decrease # - .5% ○ Grant highlights ■Average grant: $3,448.28 ■Median grant: $2,145 ■Smallest Grant: $20 ■Largest Grant: $14,680 ● # of Grants ○ Under $1,000- 17 ○ Between $1,001-$4,999 – 24 ○ Over $5,000 – 14 ○ Over $10,000 – 3 1 2 8/14/2024 2 Marketing Match Grant Marketing Match Grant (as of 8.12.24) ●86 Grant applications ○26 have not submitted receipts or completed their submissions – due 8/31 ●Total marketing spend of 60 grants: $202,060 ○Reimbursements total: $125,098 ■32 at $2,500 max ○Expected spend based on outstanding application requests: $53,790 (16 requested max $2,500) ■Approximate total: $178,888 ● Current balance available: Between $10,000 and $20,000 depending on final receipts 3 PROCEDURE FOR PUBLIC HEARING Applicable items include: Rate Hearings, Code Adoption, Budget Adoption 1. MAYOR. The next order of business will be the public hearing on ACTION ITEM 1. Ordinance 12-24 Proposed Electric Rate Increase. • Present the electric rate study results. • Complete the Public Hearing continued from July 23, 2024 allowing for additional public comment and Board action. At this hearing, the Board of Trustees shall consider the information presented during the public hearing, from the Town staff, public comment, and written comments received on the item. Any member of the Board may ask questions at any stage of the public hearing which may be responded to at that time. Mayor declares the Public Hearing open. 2. STAFF REPORT. Review the staff report. 3. PUBLIC COMMENT. Any person will be given an opportunity to address the Board concerning the item. All individuals must state their name and address for the record. Comments from the public are requested to be limited to three minutes per person. 4. MAYOR. Ask the Town Clerk whether any communications have been received in regard to the item which are not in the Board packet. Ask the Board of Trustees if there are any further questions concerning the item. Indicate that all reports, statements, exhibits, and written communications presented will be accepted as part of the record. Declare the public hearing closed. Request Board consider a motion. 7. SUGGESTED MOTION. Suggested motion(s) are set forth in the staff report. 8. DISCUSSION ON THE MOTION. Discussion by the Board on the motion. 9. VOTE ON THE MOTION. Vote on the motion or consideration of another action. *NOTE: Ordinances are read into record at the discretion of the Mayor as it is not required to do so by State Statute. UTILITIES Memo To: Honorable Mayor Board of Trustees Through: Town Administrator Machalek From: Date: RE: Director Bergsten; Superintendent Lockhart; NewGen Strategies & Solutions, Meghan Helper August 13, 2024 Ordinance 12-24 Proposed Electric Rate Increase Objective: To maintain high-quality and reliable electric service by increasing electric rates to keep up with the increasing cost of operations and capital improvements by requesting the Town Board consider electric rate. Present Situation: Every three years the Town performs a financial rate study to ensure our revenues and expenditure balance out. Power and Communications has seen unprecedented cost increases over the past few years. For example, some transformer costs have tripled. The Town’s public electric utility is a cost-based entity that relies solely on user fees to operate. Costs and revenues must be balanced in order to maintain operations and ensure reliable operations. We are proposing an overall rate increase of 5.0% starting in October 2024. At the March 12th 2024 study session, staff presented financial rate study results. Three late spring weather events delayed our ability to complete a full cost-of-service analysis. We will bring the Town Board proposed electric rates for 2025 and 2026 when the full cost-of-service analysis has been completed. Hard copies of the study and proposed rate sheet are located at the Municipal building and library for the public to review. The rate study is also on our website. Proposal: Staff proposes the Town Board consider the proposed increase to electric rates. Advantages: •Maintain adequate financial strength required to operate the enterprise •Meet our bond covenants obligations •Fund projects required to improve reliability, quality and safety of our system Disadvantages: Higher cost of electricity; however, our customers deserve reliable and safe electricity. Action Recommended: Staff recommends the Board approve the attached ordinance. Finance/Resource Impact: Beginning October electric rates would increase by 5%. Level of Public Interest: High, increases to utility rates will touch every Power and Communications customer Sample Motion: I move for the approval/denial of Ordinance 12-24. Attachments: 1. Ordinance 12-24 2. Exhibit A to Ordinance 3. Financial Forecast and Rate Study ORDINANCE NO. 12-24 AN ORDINANCE AMENDING THE POWER & COMMUNICATIONS RATE SCHEDULES OF THE TOWN OF ESTES PARK, COLORADO WHEREAS, the Board of Trustees of the Town of Estes Park, Colorado has determined that it is necessary to amend the Electric Rate Schedules of the Town of Estes Park. NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO AS FOLLOWS: Section 1: That the Town of Estes Park, Colorado Electric Rate Schedules shall be amended to read as set forth on Exhibit A. Section 2: These rate schedules will take effect the first full billing period in October, 2024. Section 3: This Ordinance shall be enforced thirty (30) days after its adoption and publication. PASSED AND ADOPTED by the Board of Trustees of the Town of Estes Park, Colorado this 13th day of AUGUST, 2024. TOWN OF ESTES PARK, COLORADO By: Mayor ATTEST: Town Clerk I hereby certify that the above Ordinance was introduced at a regular meeting of the Board of Trustees on the 13th day of AUGUST, 2024 and published by title in a newspaper of general circulation in the Town of Estes Park, Colorado, on the 16th day of AUGUST, 2024, all as required by the Statutes of the State of Colorado. Town Clerk APPROVED AS TO FORM: Town Attorney ATTACHMENT 1 TOWN OF ESTES PARK, COLORADO On-Peak Off-Peak Standard Customer Energy Energy Demand Rate for Customer Rate Class Year (2)Charge Consumption Consumption Charge May thru $/Month Charge Charge $/kW August $/kWh $/kWh $/kWh RESIDENTIAL (1)Jan 2021 $23.47 $0.1119 $0.0042 --- --- --- 2022 $24.23 $0.1144 $0.0073 --- --- --- 2023 $25.00 $0.1168 $0.0105 --- --- --- Oct 2024 $26.25 $0.1337 ------ --- --- RESIDENTIAL DEMAND (1)Jan 2021 $26.90 $0.0645 $0.0042 --- $13.60 --- 2022 $27.70 $0.0636 $0.0073 --- $13.60 --- 2023 $28.50 $0.0627 $0.0105 --- $13.60 --- Oct 2024 $29.93 $0.0769 ------ $14.28 --- RESIDENTIAL ENERGY TIME-OF-DAY (1)Jan 2021 $26.90 $0.1566 $0.0042 $0.0806 --- --- 2022 $27.70 $0.1612 $0.0073 $0.0852 --- --- 2023 $28.50 $0.1658 $0.0105 $0.0898 --- --- Oct 2024 $29.93 $0.1851 ---$0.1053 --- --- RESIDENTIAL ENERGY BASIC TIME-OF-DAY (1)Jan 2021 $26.10 $0.1470 $0.0042 $0.1038 --- $0.1119 2022 $27.70 $0.1595 $0.0073 $0.0998 --- $0.1144 2023 $28.50 $0.1719 $0.0105 $0.0959 --- $0.1168 Oct 2024 $29.93 $0.1915 ---$0.1117 --- $0.1226 SMALL COMMERCIAL (1)Jan 2021 $33.25 $0.1154 $0.0042 --- --- --- 2022 $33.12 $0.1169 $0.0073 --- --- --- 2023 $33.00 $0.1183 $0.0105 --- --- --- Oct 2024 $34.65 $0.1353 ------ --- --- SMALL COMMERCIAL ENERGY TIME-OF-DAY (1)Jan 2021 $36.51 $0.1438 $0.0042 $0.0763 --- --- 2022 $36.26 $0.1349 $0.0073 $0.0818 --- --- 2023 $36.00 $0.1349 $0.0105 $0.0872 --- --- Oct 2024 $37.80 $0.1527 ---$0.1026 --- --- LARGE COMMERCIAL (1)Jan 2021 $45.49 $0.0633 $0.0042 --- $15.87 --- 2022 $45.74 $0.0640 $0.0073 --- $16.93 --- 2023 $46.00 $0.0648 $0.0105 --- $18.00 --- Oct 2024 $48.30 $0.0791 ------ $18.90 --- LARGE COMMERICIAL TIME-OF-DAY (1)Jan 2021 $53.79 $0.0848 $0.0042 $0.0461 $18.30 --- 2022 $54.39 $0.0876 $0.0073 $0.0478 $19.15 --- 2023 $55.00 $0.0904 $0.0105 $0.0495 $20.00 --- Oct 2024 $57.75 $0.1060 ---$0.0630 $21.00 --- OUTDOOR AREA LIGHTING Jan 2021 $36.49 --------- --- --- 2022 $36.49 --------- --- --- 2023 $36.49 --------- --- --- Oct 2024 $38.31 --------- --- --- RENEWABLE ENERGY CHARGE (1)Jan 2021 --- $0.0275 ------ --- --- 2022 --- $0.0275 ------ --- --- 2023 --- $0.0275 ------ --- --- Oct 2024 --- $0.0275 ------ --- --- MUNICIPAL RATE (1)Jan 2021 $9.00 $0.1149 N/A --- --- --- 2022 $18.00 $0.1128 N/A --- --- --- 2023 $27.00 $0.1106 N/A --- --- --- Oct 2024 $28.35 $0.1161 N/A --- --- --- PROPOSED Electric Rate Summary 2024 until Superceded, Public Hearings 7/23 & 8/13/2024 Purchase Power Rider $/kWh Available to all residential customers and residential customers with electric heat up to 25,000 kWh annually. Available to existing customers on this rate, September through April. All other times the Residential energy charge would apply. Available to all residential customers who use electric thermal storage heat or who own an electric vehicle. Available to all residential customers not using electric thermal storage heat. These rates apply September through April. Standard rates apply May through August. Available to all commercial customers with demands of 35 kW or less. Available to all commercial customers using electric thermal storage heat with demands of 35 kW or less Available to all commercial customers with demands exceeding 35 kW Available to all commercial customers with demands exceeding 35 kW Available for lighting outdoor private areas Voluntary participation available to all classes; charge per 100 kWh block Available for electricty use on municipal property ATTACHMENT 2Exhibit A TOWN OF ESTES PARK, COLORADO PROPOSED Electric Rate Summary 2024 until Superceded, Public Hearings 7/23 & 8/13/2024 RMNP ADMINISTRATIVE HOUSING Jan 2021 $22.70 $0.0690 N/A --- --- --- 2022 $22.70 $0.0690 N/A --- --- --- 2023 $22.70 $0.0690 N/A --- --- --- Oct 2024 $23.84 $0.0725 N/A --- --- --- RMNP SMALL ADMINISTRATIVE Jan 2021 $33.37 $0.0456 N/A --- --- --- 2022 $33.37 $0.0456 N/A --- --- --- 2023 $33.37 $0.0456 N/A --- --- --- Oct 2024 $35.04 $0.0479 N/A --- --- --- RMNP LARGE ADMINISTRATIVE Jan 2021 $45.23 $0.0185 N/A --- $12.50 --- 2022 $45.23 $0.0185 N/A --- $12.50 --- 2023 $45.23 $0.0185 N/A --- $12.50 --- Oct 2024 $47.49 $0.0194 N/A --- $13.13 --- NOTES: (1) Purchase Power Rider is a pass-through of wholesale increases from PRPA; TBD Each Year (2) The rates remain in effective until new rates are adopted by the Town Board. These rates apply only September thru April usage (for May thru August, the standard Residential rate applies): ON-PEAK for Residential "Basic" Time-of-Day Customers: 4:00 pm to 7:00 pm weekdays Updated 06-25-2024 Fees for other work performed, such as service upgrades or line extensions, the developer or customer must pay for work performed. Payment must be made before the work is scheduled. The payment covers the cost of labor, materials, equipment, and overhead. ON-PEAK for Residential Time-of-Day Customers: 6:00 am to 1:00 pm and 3:00 pm to 10:00 pm weekdays OFF-PEAK for Residential "Basic" Time-of-Day Customers: 7:00 pm to 4:00 pm the following day and all day weekends and the following holidays: Labor Day, Thanksgiving Day, Christmas Eve, Christmas Day and New Years Day Smart Meter/Advanced Metering Infrastructure Opt-Out Fees - One Time Enrollment Fee of $75 and monthly fee of $20 Avoided Cost paid to Net Meter Customers = $0.0175, the wholesale cost of energy minus $0.01 for administrative costs Residential Energy "Basic" Time-of-Day is available for every residential customer except as stated above. Available to Rocky Mountain National Park residences having an alternate power source delivered to Estes Park's distribution system Available to RMNP administrative accounts having an alternate power source delivered to Estes Park's distribution system with demands of 35kW or less Available to RMNP administrative accounts having an alternate power source delivered to Estes Park's distribution system with demands exceeding 35kW Fees for other work performed, such as service upgrades or line extensions, the developer or customer must pay for work performed. Payment must be made before the work is scheduled. The payment covers the cost of labor, materials, equipment, and overhead. OFF-PEAK for Residential Time-of-Day Customers: 1:00 pm to 3 pm and 10:00 pm to 6:00 am weekdays and all day on weekends and holidays (New Years Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Eve and Christmas Day) Residential Energy Time-of-Day available only for residential customers who use electric thermal storage heat or who own an electric vehicle: 8/14/2024 1 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC ESTES PARK POWER AND COMMUNICATIONS RATE STUDY PROPOSED RATE PLAN August 13th, 2024 2© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC FINANCIAL FORECAST RESULTS AGENDA 2 1 Rate Study Overview 2 Study Delays, Progress, and Results 3 Advanced Metering Infrastructure (AMI) Data 4 2024 Rate Plans 5 Next Steps 1 2 ATTACHMENT 3 8/14/2024 2 3© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS: OVERVIEW 3 STEP 1 STEP 2 STEP 4 STEP 3 STEP 5 Determine the revenue requirements of the utility during the study period Unbundle costs by functions and services (source of supply, distribution, customer) Classify costs (demand, energy, customer costs, etc.) Allocate costs among customer classes Design rates Financial Forecast Cost Allocation Rate Design © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS – DEFER ADDITIONAL STEPS DUE TO UNPLANNED WORK 4 3 4 8/14/2024 3 5© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS: COST OF SERVICE 5 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS FINANCIAL FORECAST 6 5 6 8/14/2024 4 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS UNBUNDLE BY FUNCTION 7 Typical Electric Utility System Configuration © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS UNBUNDLE BY FUNCTION 8 Platte River Power Authority (PRPA): Generation and Transmission Estes Park Power & Communications (EPPC): Distribution and Customer Service Town Ordinance 12-11, wholesale power cost increases are passed through. This limits rate studies to every three years, which lowers our O&M costs. The proposed 5% rate is for the distribution portion of the supply chain. 7 8 8/14/2024 5 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS GENERATION FUNCTION – PRPA 9 •The generation function is responsible for serving demand and producing energy. ̶ The power plant portfolio is sized to meet the maximum demand requirements of the system (PRPA). ̶ PRPA’s goal is to transition to 100% noncarbon energy mix by 2030. © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS TRANSMISSION FUNCTION – PRPA 10 •The transmission function is responsible for transmitting electricity from generation to the distribution system. •The utility must size transmission substations, transformers, and lines to serve the maximum demand requirements of the system. 9 10 8/14/2024 6 11© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS: TO BE COMPLETED NEXT 11 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS DISTRIBUTION FUNCTION – EPPC 12 •The distribution function is responsible for distributing electricity from the transmission line to customers. ̶ The utility must size distribution substations, transformers, lines, and services to serve the maximum local demand requirements of their customers. •The customer function is utility billing and customer service. ̶ Future costs include DER Programs development and execution in support of PRPA’s management of renewable resources 11 12 8/14/2024 7 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS CUSTOMER FUNCTION – EPPC 13 •The customer function is responsible for utility billing and customer service. •EPPC future customer function: ̶ DER Programs development and execution. ̶ Communication and information. © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS COST OF SERVICE TO RATE DESIGN 14 Cost of Service Revenue Requirement Functionalize Classify Guide for cost-based rates Rate Making Policy Decisions Incentivize behavior to create win-win scenario between the Utility and its Customers Industry practice is to move towards or align with COS Rates Collect sufficient revenue Support Utility’s goals Use resources in cost- effective manner Price signal to Customer: •Convey information •Change behavior 13 14 8/14/2024 8 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS EPPC RATE CLASSES 15 Rate Classes are grouped by similar size, consumption, requirements, and characteristics. •Residential •Residential Demand •Residential Energy TOD •Residential Energy Basic TOD •Small Commercial •Small Commercial Energy TOD •Large Commercial •Large Commercial TOD •Outdoor Area Lighting •Renewable Energy Charge •Municipal Rate •RMNP EPPC RATES VS THE OTHER PRPA CITIES NO INDUSTRIAL CUSTOMER CLASS © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC ALSO: NO INDUSTRIAL CUSTOMERS 16 EPPC RATES VS THE OTHER PRPA CITIES 15 16 8/14/2024 9 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC ALSO: NO INDUSTRIAL CUSTOMERS 17 EPPC RATES VS THE OTHER PRPA CITIES $6 1 . 4 7 $8 0 . 2 4 $8 2 . 9 7 $8 3 . 7 2 $8 8 . 6 4 $8 8 . 6 6 $9 3 . 1 9 $9 7 . 4 7 $9 8 . 4 5 $9 9 . 7 1 $1 0 2 . 2 5 $1 0 3 . 1 1 $1 0 3 . 8 7 $1 0 3 . 8 8 $1 0 7 . 0 3 $1 1 0 . 2 0 $1 1 3 . 2 0 $1 1 6 . 7 3 $1 1 7 . 1 4 $1 1 8 . 8 3 $1 2 2 . 0 0 $6 9 . 9 7 $9 2 . 5 6 $9 3 . 6 9 $9 9 . 9 7 $1 0 1 . 0 4 $1 0 2 . 0 3 $1 0 2 . 4 4 $1 0 4 . 2 3 $1 0 4 . 2 8 $1 0 6 . 1 5 $1 1 0 . 6 6 $1 1 3 . 9 5 $1 1 6 . 0 9 $1 1 7 . 2 3 $1 1 8 . 3 9 $1 1 8 . 8 4 $1 1 9 . 3 2 $1 2 2 . 4 3 $1 2 2 . 7 0 $1 2 5 . 8 5 $1 3 0 . 1 0 $1 4 0 . 3 1 $1 4 2 . 7 2 $9 9 . 8 2 $1 4 5 . 1 8 $40 $60 $80 $100 $120 $140 FO R T M O R G A N LO N G M O N T CI T Y O F G U N N I S O N FO R T C O L L I N S WR A Y LO V E L A N D FO U N T A I N DE L T A CO L O R A D O S P R I N G S TR I N I D A D LY O N S HO L Y O K E RA T O N LA S A N I M A S HA X T U N LA J U N T A GR A N A D A ES T E S P A R K LA M A R BU R L I N G T O N AS P E N CE N T E R FL E M I N G GL E N W O O D S P R I N G S HO L L Y JU L E S B U R G OA K C R E E K SP R I N G F I E L D YU M A MO O N L A K E PO U D R E V A L L E Y R U R A L HO L Y C R O S S E N E R G Y WH E A T L A N D Y- W E L E C T R I C K C E L E C T R I C A S S N CO R E E L E C T R I C UN I T E D P O W E R EM P I R E E L E C T R I C DE L T A - M O N T R O S E E L E C T R I C MO R G A N C O U N T Y R E A HI G H L I N E E L E C T R I C A S S N GR A N D V A L L E Y MO U N T A I N V I E W SO U T H E A S T C O L O R A D O … LA P L A T A WH I T E R I V E R E L E C T R I C GU N N I S O N C O U N T Y … YA M P A V A L L E Y E A HI G H W E S T E N E R G Y SA N I S A B E L SA N M I G U E L P O W E R TR I - C O U N T Y MO U N T A I N P A R K S E I SA N L U I S V A L L E Y R E A SA N G R E D E C R I S T O XC E L E N E R G Y BL A C K H I L L S E N E R G Y CAMU Residential Survey January 2024 - Cost of 700 kWh Municipality CO-OP Investor © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS FIXED VS. VARIABLE COSTS AND REVENUES 18 Typical Cost Classifications Typical Cost Functions Demand Related Energy Related Source of Power Demand Related Customer Related Distribution Customer RelatedCustomer Graphs are for illustrative purposes only. 17 18 8/14/2024 10 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROCESS POTENTIAL OBJECTIVES AND BEST PRACTICES FOR RATE DESIGN 19 •Revenue stability •Simplicity •Legislative and regulatory compliance •Modernization, Distributed Generation, Virtual Power Plant, Electric Vehicles . . . •Alignment with cost of service ̶ Align a utility’s revenue collection with its cost causation (e.g., demand, energy, customer). •Incorporate utility policy •If rates are not well designed or aligned with COS: ̶ Potential for cost recovery not matching costs incurred. ̶ Potential to over- or under-recover costs. ̶ Does not ensure revenue adequacy. © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC RATE STUDY PROGRESS AND DELAYS 20 •Financial Forecast and Revenue Requirement: ̶Modeled and approved. •Cost of Service: ̶Model update is in progress. ̶Delays: •Outages •AMI data transfer 19 20 8/14/2024 11 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC ADVANCED METERING INFRASTRUCTURE DATA 21 •AMI Data: ̶ Meters read usage hourly/sub-hourly. ̶ Allows utility to meter real-time customer behavior. ̶ Faster, more accurate meter reading than analog meters. ̶ Easier to measure changes in customer usage. •Estes Park has full AMI deployment. © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC ADVANCED METERING INFRASTRUCTURE DATA 22 •Develop demand allocators by customer class. ̶ Coincident Peak (CP). ̶ Non-Coincident Peak (NCP). ̶ Sum of Max Demands (SMD). •Class segmentation analysis: ̶ Identifies natural customer segmentation. ̶ Current requirement 35 kW for Large Commercial Service. ̶ Analysis will be performed on the commercial service classes to determine an appropriate demand requirement for the Large Commercial Service. 21 22 8/14/2024 12 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC FINANCIAL FORECAST RESULTS 2024 REVENUE REQUIREMENT 23 •Source of Supply makes up a large portion of total expenses. •Other Operating Expenses: ̶Distribution. ̶Customer Accounts. ̶A&G (Administration and General operations) •General Fund transfer: ̶Budgeted at 7% of total Revenues for 2024. •Capital Improvement Plan •Debt Service © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC FINANCIAL FORECAST RESULTS 90-DAY RESERVE FUND, POLICY 24 •If no action is taken, the reserve fund levels will be drawn down annually. •Reserve fund drops below 90- day target in 2025 •Debt service coverage ratio drops below 1.25 target in 2026. •Rate increases need to maintain financial stability. 23 24 8/14/2024 13 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC FINANCIAL FORECAST RESULTS FINANCIAL METRIC FOR STATUS QUO 25 Status Quo 202920282027202620252024Financial Metric 0.0%0.0%0.0%0.0%0.0%0.0%Rate Increases (18.38)(10.57)(1.12)1.03 3.18 5.90 Debt Service Coverage Ratio 1.251.251.251.251.251.25Debt Service Coverage Ratio Target -216-134-611468120Days Cash on Hand 909090909090Days Cash on Hand Target © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC PROPOSED RATE IMPLEMENTATION PLAN 26 •If no rate increase are implemented in 2024: ̶8.5% need in 2025. ̶Higher rate increases needed in later years. ̶Potential for rate shock. •Recommend implementing an across-the-board rate increase of 5% for October 2024. •Continue the rate increase process •Design rates by customer class for 2025 and 2026. 25 26 8/14/2024 14 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC PROPOSED RATE IMPLEMENTATION PLAN 27 •Recommend implementing an across-the-board rate increase of 5% for October 2024. •Customer Charge •Energy Charge •Demand Charge •Purchase Power Rider •Set to zero. •Rolled into energy charge. •Update model and design rates by customer class for 2025 and 2026. Example Rate Increase Residential Proposed RateIncreaseCurrentResidential Rate Component $26.255.0%$25.00Customer Charge ($/Mo.) $0.13375.0%$0.1273Consumption Charge and Purchased Power Rider ($/kWh) © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC HISTORIC RATE INCREASES 28 27 28 8/14/2024 15 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC NEXT STEPS 29 •Process AMI Data: ̶Class segmentation. ̶Allocation factors. •Update model with 2025 budget. •Adjust model for demand requirement shift. •Adjust model for any rate requirement enforcement. •Finalize and approve Cost of Service. •Rate design: ̶Rate changes by customer class. ̶Align with Cost of Service. QUESTIONS? NEWGEN STRATEGIES AND SOLUTIONS, LLC 225 UNION BOULEVARD, SUITE 450 LAKEWOOD, CO 80228 MEGHAN HELPER SENIOR CONSULTANT (720) 808-1589 MHELPER@NEWGENSTRATEGIES.NET 29 30 Support for RESOLUTION 67-24 Patrick Martchink <patrick.martchink@gmail.com> Tue, Aug 13, 2024 at 4:31 PM Dear Members of the Town Board, I am writing to express my strong support for RESOLUTION 67-24, which proposes to commit the Vacation Home Workforce Housing Regulatory Linkage Fee revenue to the Estes Park Housing Authority for the purchase of Fall River Village. As a small business owner that's deeply invested in the well-being and sustainable growth of our community, I believe that this resolution represents a crucial step toward addressing the pressing issue of workforce housing in Estes Park. The lack of affordable housing has long been a barrier to attracting and retaining skilled professionals who are essential to the vibrant and diverse economy of our town. Fall River Village, with its potential to provide much-needed housing options, presents an excellent opportunity to alleviate some of the pressure on our local housing market. By utilizing the revenue from the Vacation Home Workforce Housing Regulatory Linkage Fee, we can directly address the needs of our workforce and ensure that our town remains an attractive place to live and work. Here are several key reasons why I support this resolution: 1.Addressing Workforce Housing Needs: The commitment of these funds to Fall River Village will directly contribute to increasing the availability of affordable housing for local workers, including those in essential services such as healthcare, education, and hospitality. 2.Sustainable Community Development: Investing in workforce housing aligns with the town’s goals of promoting sustainable and inclusive growth. By providing affordable housing options, we are fostering a more stable and resilient community. These are move-in ready units which address our immediate need. This opportunity addresses a decades long need without taking from one of our most finite resources, LAND! 3.Economic Vitality: Ensuring that our workforce can live locally helps maintain the economic health of Estes Park. Workers who live in town are more likely to spend their earnings within the community, supporting local businesses and contributing to a thriving local economy. 4.Long-Term Benefits: The purchase of Fall River Village will yield long-term benefits for the community, providing a lasting solution to workforce housing challenges and enhancing the overall quality of life for residents. It's not simply placing a band-aid on the problem. I urge the Town Board to approve RESOLUTION 67-24 and to commit the necessary funds to support the Estes Park Housing Authority in acquiring Fall River Village. This action will demonstrate our town’s commitment to addressing critical housing needs and will serve as a positive example of proactive community planning. Thank you for considering my support for this important resolution. I look forward to the continued progress in enhancing our community's housing solution. Sincerely, Patrick Martchink ---------- Forwarded message --------- From: Ann Taylor <grannyannie23@yahoo.com> Date: Tue, Aug 13, 2024 at 3:46 PM Subject: Increase in Electric rates Please reconsider your ill timed electric rate increase…we already have some of the highest rates in the area. You apparently have enough surplus to use our electric payments for the general fund. Please try to lower rates instead of increasing them and live within a budget , as we are all trying to do. I’m pretty sure that the increase will go through as every time we’ve been asked for our input the board has already made their decision. Sincerely, Ann Taylor Sent from my iPhone PUBLIC COMMENT 'Elia King' via Trustees <trustees@estes.org> Aug 13, 2024, 4:29:00 PM (16 hours ago) to trustees@estes.org To whom it may concern, Although I’m unable to attend the August 13 meeting regarding the proposed electric rate increase, I'd like to submit a statement for public comment. My family has made Estes Park home since 2013, when we moved here from Texas to put down roots in this area. Like many young families in this valley, we have often worked multiple jobs to keep our own businesses afloat and support our family. We have also observed numerous times as our town has voted to increase taxes to support various initiatives. While we could make the case that some (maybe even many) of the increases have improved the quality of life for our neighbors and ourselves, every increase also raises the cost of living for people who live, work, and make our lives in this area. For residents who have retired to this area, the increases may seem insignificant. Constantly raising expenses without any added value makes it difficult for the families who work hard to call this town home. I would ask the town and its trustees to seriously reconsider any changes that will raise the cost of living for the full-time residents of Estes Park. Sincerely, Elia King Town Clerk <townclerk@estes.org> opposition to ORDINANCE 12-24 PROPOSED ELECTRIC RATE INCREASE PondoHome Email <land3@pondohome.com>Tue, Aug 13, 2024 at 1:16 PM To: Town Clerk <townclerk@estes.org> Trustees of the Town of Estes Park I do not support the call for electric rate increases - from FACTS recently posted in the Estes Valley Advocate, it appears that the Power & Communications account is flush with cash. Enough is enough: as it is, base service charges have gone from $10.70 in 2016 to the current $25.00 (2024) - a 233% increase in only 8 years. And can anyone explain why Power & Communications utility charges are higher than neighboring communities? Current service charges of $25.00/mo. are: $13.82/mo. higher than Fort Collins ($11.18); $12.00/mo. higher than Lyons ($13.00); $8.60/mo. higher than Longmont ($16.40); $6.80/mo. higher than Loveland ($18.20) Current kilowatt hour (kwh) charges of 16.3/kwh are: 4.85/kwh higher than Longmont (11.45); 3.77/kwh higher than Fort Collins (12.53); 3.6/kwh higher than Lyons (12.70); 3.56/kwh higher than Loveland (12.74). Why has the general fund siphoned $15,477,796 from Power & Communications accounts over the past ten years? What was the rationale behind these withdrawals, other than "We could so we did."? Why are P&C customers subsidizing the general fund through their utility bills? I'm asking - insisting - that the trustees to vote NO on ORDINANCE 12-24, Proposed Electric Rate Increase. Sincerely, Ron Thomas 544 Ponderosa Dr., Estes Park Town Clerk <townclerk@estes.org> Comment on Agenda Item 1 Rebecca Urquhart <rebecca.l.urquhart@gmail.com>Mon, Aug 12, 2024 at 11:54 AM To: Town Clerk <townclerk@estes.org> Cc: Travis Machalek <tmachalek@estes.org> Please forward to all Town Trustees. This comment has been prepared and submitted By the Board of Directors of the Estes Valley Residents Association. It is based on input from our members, other citizens, information gained from the packets of the previous Town Board meetings on the subject and the packet for the current meeting, and on information received in a meeting with Town Administrator Travis Machalek. We are grateful to all involved for the time spent in research, consideration and communication on this matter. EVRA's Board takes the position that the Town Board should defer action on the proposed rate increase. A special meeting would be best, but the following deficiencies should be addressed: The grounds for a 5% increase have not been established. There is insufficient evidence the reserve fund, debt service ratio and cash on hand targets would not be met without the increase. Historical and projected statement of accounts and cash flow should be part of the analysis. EPPLs costs, are significantly higher than the majority of other utilities, A comparison of the costs with other small mountain community utilities should be analyzed on a per kwh basis. The "transfer payment" requires an explanation as a "fee for service" or a profit return, or f those items should be calculated separately, and shown on a per kwh hour basis. The study refers to the expected PRPA cost increases for conversion, but it is not established if the proposed rate increase includes that, or if it will added in the customer bill line item in addition to the rate increase. In support of the above points: It is the position of the EVRA Board that the Town Board should defer action on the proposed rate increase. We base this recommendation on our belief that the information offered to date does not allow a thorough and competent evaluation of the proposal. This being the case, we believe it would be irresponsible of the Board to accept the proposed 5% rate increase, or any rate increase of another percentage, without further substantiation. We believe the information in hand falls short in two major areas: First, the information presented in the packets and in the meetings does not provide anything on past financial performance under the current rate structure or projected performance under the proposed rate. There are insubstantial (and unsupported) claims that the reserve fund, debt service ratio and cash on hand targets would not be met if the rate were not changed, but no projections of those metrics under the proposed rate. The standard that would apply to a commercial enterprise would require at least a high level statement of accounts and cash flows for the enterprise, both historical and projected under the proposed rate increase. We would expect the same from our municipal utility. This information may be present in the Town's overall budget data but we feel that it should be expressly considered as an important input to the rate setting exercise and must be presented in that context for the benefit of both the Town Board and the public. Second, we believe the controversial issue of the utility's transfer payment to the Town has been ineffectively presented and therefore defies reasonable evaluation. Our objection consists of two parts: classification of the payments and baseline establishment for comparative purposes. As we understand it, payments that accrue to the Town as a result of operation of the electric utility fall into three classes. The Town is paid a fraction of the state sales tax resulting from payments to the utility. The Town is compensated for costs incurred for services that it provides to the utility. And the Town receives the profits generated by the utility in excess of its operating costs and reserves. It is our understanding that the total state sales tax, including the portion retained by the state and the portion returned to the town, are included in the charges enumerated on our bills and are not separately stated. It is our understanding that the transfer payment being considered as a component of the rates to be charged under this proposal include both those payments made by the utility for services provided by the Town and the returned profit. We believe that the manner in which these payments are reflected in the provided materials is insufficiently detailed and does a disservice to both the Town, the Town Board and the citizens. In particular, we believe: * The sales tax item should be stated (both historical and projected data) to allow for a complete understanding of the Town's revenue received from operation of the utility. * The "fee for services" item should be broken out and maintained as a separate contractual obligation of the utility, since it is an at-cost item for the Town and is properly an expense item for the utility, not a transfer of profits for either one. * The profit item should remain under that title as reflecting the operating profit returned to the Town by the utility. Of these, the third is most likely the rightful subject of any controversy, but a clear understanding of all three is essential to any discussion of the point. As for baselining of the data, any evaluation of our electrical rates, current or proposed, must include a comparison against rates charged by similar utilities operating in the state. This includes a comparison of both the gross rate (i.e., total overhead charges and usage charges per kwh) and a comparison of certain details contributing to those charges. In some cases, these supporting details have been stated as a percentage of total system revenue. In particular, the transfer fee has been estimated as 6-7% of revenues under the proposed rate increase and has been justified as similar, or less than, that percentage charged by other similar utilities. We believe that restating the transfer fee as a cost per kwh would provide a more appropriate basis for comparison, since other factors that contribute to a high cost per kwh in Estes Park skew a percentage-based comparison. The same may be true of other items subject to comparison, as well - in sum, understanding what items contribute to the overall revenue and justify the rate based on cost per kwh provides a superior basis for comparison to other utilities than does a comparison by percentage of overall budget. We are sensitive to the Town's desire to make decisions expeditiously and not stretch out the timeline unnecessarily, and we understand that delaying a decision and providing additional data might tend to do so. As such, we would propose that the Town Board, in consultation with Staff, establish a deadline for the provision of a more detailed report and that a special meeting of the Town Board be scheduled to consider this report and take public input, preferably with relaxed rules for public comment. This meeting would not be for the purpose of decision-making but would provide the level of focus and public input required for a decision of this level of importance and public interest. Respectfully submitted, Fred Barber & Rebecca Urquhart on behalf of the Board of Directors of the Estes Valley Residents' Association (EVRA) -- Letter to Mayor, Trustees of the Town of Estes Park regarding Proposed Electric Rate Increase - Ordinance 12-24 In the debate over whether the Town of Estes Park should increase its base electrical rate, it is crucial to consider all the financial factors that affect the Power and Communication Fund. As this utility is generating a SUBSTANTIAL SURPLUS, it is worth questioning the need for an increase in rates. The surplus indicates that the utility is already well-funded and that the current rates are more than sufficient to cover operational costs, necessary improvements and even any proposed capital expenditures. The two memos dated July 23 and 25, 2024, state the advantages for the proposed rate increase is to maintain adequate financial strength required to operate the enterprise (this has been accomplished for the last ten years according to the annual financial statements), Meet our bond covenants obligations (Broadband construction monies secured by power revenues, which is accomplished and shown in annual financial statements) and Fund projects required to improve reliability, quality and safety of our system (is currently and easily accomplished with existing revenues and would include the installation oftree- cable covered conductors in the AHenspark area and Estes Valley). Over the past ten years, the Power and Communications Fund has transferred surplus power funds in the amount of $15,477,796 to the general fund. Light and Power customers are subsidizing this transfer through the payment of their elevated electrical bills. Estes customers are now paying $25 each month (soon to be $26.25 in September) as a base service charge plus the high cost of 16.3 cents per kwh, which is higher than Colorado's average rate of 14.31 cents. Estes purchases power from Platte River, wholesale market, and then retail sells it to us, the customers. According to findenergy.com the cost for our neighboring towns is the following price per kwh: Longmont is 11.45; Fort Collins is 12.53; Loveland is 12.74; Greeley is 13.77; Lyons is 12.7; Boulder is 14.46 and Estes is 16.3. The original monthly base customer charge has increased as follows; 2016 was $10.70; 2017 was $14.70; 2018 was $18.70; 2019 was $22.70; 2020 was $22.70; 2021 was $23.47; 2022 was $24.23; 2023 was $25.00 2024 is $26.25. Neighboring communities have electric base rates as follows: Fort Collins is $11.18; Loveland is $18.20; Longmont is $16.40; Lyons is $13.00 and Estes Park will be $26.25 and now requesting annual increases of 8.5% for the next three years. As energy customers we are paying increased dollars to BOTH the basic monthly service charge plus the additional kwh price. RECEIVED AUG 07 2024 6Y——-—.CSM£^._.._, The rate study presented by NewGen Strategies & Solutions is a history and operational review of how a utility works. The study four years ago as well as this new 2024 study does not address the actual fund income and expenses or go on to explain how our utility company compares with other neighboring municipalities with regard to revenues, expenses and general operation. It is impossible for Estes residents to address their electrical costs when there is no information provided to them unless they have the facts as described above. Transparency??? Fairness???? I respectfully request that the proposed electrical rate increase be denied as it is not appropriate or justified. Connie Phipps 585 West Wonderview Avenue Estes Park, Colorado TOWN OF ESTES PARK 2024 ADOPTED BUDGET POWER AND COMMUNICATION FUND SUMMARY STATEMENT OF REVENUES, EXPENDITURES AND FUND BAIANCE 502 SCOPE OF SERVICES Power & Communication provides reliable quality electric power to approximately 11,000 accounts, including Rocky Mountain National Park. All customers are served through two substatlons with electricity provided by Platte River Power Authority. Power & Communication maintains over 300 miles of distribution lines & constructs infrastructure for new developments. Power & Communication is also responsible for reading all electric meters, maintenance of all Town- owned street lights, and records management including billing information and federal reporting. The Town promotes energy efficiency and offers renewable energy to all of Its customers. Power and Communication began providing a gigabyte broadband service over a fiber to premise network under the brand name Trailblazer late In 2019. Due to the COVID-19 pandemic, the buildout slowed down in 2020 but did continue to connect more and more households. Buildout will continue in 2023 and beyond until completed. Trailblazer operations are accounted for as a division within the Power and Communication Fund. OPERATING REVENUES Electric Charges for Services Broadband Charges for Services Miscellaneous Revenue Total Operating Revenues OPERATING EXPENSES Source of Supply Distribution Personnel Operations & Maintenance Customer Accounts Personnel Operations & Maintenance Administration/General Personnel Operations & Maintenance Broadband Personnel Operations & Maintenance Total Operating Expenses Operating income 2022 Actual $ 20,285,175 2,133,987 204,635 22,623,797 8,652,423 3,005,570 1,390,503 352,005 136,124 939,283 1,337,535 591,997 651,884 17,057,323 5,566,473 2023 Amended Budget $ 19,226,200 2,251,200 96,000 21,573,400 8,168,860 3,685,710 2,093,435 404,352 197,578 934,923 2,334,638 921,392 627,646 19,368,534 2,204,866 2023 EOY Estimate $ 19,260,200 2,251,200 129,000 21,640,400 8,670,000 3,685,710 2,095,885 404,352 187,308 934,923 2,313,667 921,392 627,646 19,840,883 1,799,517 2024 Adopted Budget $ 20,807,685 3,047,482 98,000 23,953,167 8,874,000 3,768,269 1,893,042 429,712 189,295 954,076 2,357,635 861,152 909,595 20,236,776 3,716,391 Page 171 of 231 NON OPERATING REVENUES (EXPENSES) Intergovernmental Revenue Investment Income Donations Rental Income Financing Proceeds Interest expense/Debt service payments Gain (Loss) on Sale of Assets Total non-operating revenues (expenses) Net income before capital contributions and transfers CAPITAL CONTRIBUTIONS AND TRANSFERS Transfers In Transfers Out Capital Change in Net Position NET POSITION, Beginning* Reserves Included in Expenditures NET POSITION, Ending* 2022 Actual 106,968 160,354 0 5,400 0 (913,901) (22,384) (663,564) 4,902,910 0 (1,488,000) (9,001,995) (5,587,085) 19,477,782 0 $ 13,890,697 2023 Amended Budget 3,591,361 85,000 0 12,600 0 (2,627,745) 0 1,061,216 3,266,082 0 (1,354,934) (8,077,768) (6,166,620) 13,871,760 509,504 $ 8,214,644 2023 EOY Estimate 3,591,361 260,000 0 18,000 0 (2,168,139) 0 1,701,222 3,500,739 0 (1,354,934) (8,077,768) (5,931,963) 13,871,760 509,504 $ 8,449,301 2024 Adopted Budget 121,000 275,000 0 5,400 0 (2,169,972) 0 (1,768,572) 1,947,819 0 (1,384,157) (1,749,492) (1,185,830) 8,449,301 433.650 $ 7,697,121 * Fund availability is calculated as "unrestricted current assets less inventories less prepaid items less current liabilities", (source: audited financial statements). Page 172 of 231 Town of Estes Park, Colorado Power and Communications Fund Schedule of Revenues, Expenditures And Changes in Fund Balance—Budget and Actual For the Year Ended December 31,2022 REVENUES Charges for services Intergovernmental Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Source of supply Distribution Customer accounts Administration and general Broadband Capital outlay Debt Service Other Principal Interest TOTAL EXPENDITURES OTHER FINANCING SOURCES AND (USES) Transfers in Transfers out Loss on sale of capital assets TOTAL OTHER FINANCING SOURCES AND (USES) BUDGETED AMOUNTS ORIGINAL $ 20,289,610 122,000 98,000 20,509,610 8,168,860 4,725,610 566,354 2,557.168 1,323,728 1,366,344 231,799 414,735 1.146.406 20,501,004 s FINAL 20,289,610 2,805,423 122,000 98,000 23,315,033 8,168,860 4,817,061 585,510 2,578,933 1,406,817 13,797,256 231,799 414,735 1.146.406 33,147,377 ACTUAL $ 22,418,799 106,968 160,353 1S8.012 22,874,132 8,652,413 2,676,962 396,188 1,987,770 1,148,566 9,053,693 414,735 1,144,035 25,474,362 VARIANCE WITH FINAL BUDGET POSITIVE (NEGATIVE) $ 2,129,189 (2,698,455) 38,353 90,012 (440,901) (483,553) 2,140,099 189,322 591,163 258,251 4,743,563 231,799 2,371 7,673,015 (1,488.000)(1,488,000)(1,488,000) (1,488,000)(1,488,000)(1,488,000) CHANGE IN NET POSITION, BUDGETARY BASIS ADJUSTMENTS FROM BUDGETARY BASIS TO GAAP BASIS Capital outlay Depreciation expense Bond Premium Amortization Debt principal payments CHANGE IN NET POSITION - GAAP BASIS NET POSITION, BEGINNING OF YEAR, as restated NET POSITION, END OF YEAR (1,479.394)(11.320,344) $ (4.0S8.230)7,232,114 9,053,693 (1,432,792) 233,433 414,735 4,180,839 30,902,144 35.082,983 The accompanying notes are an integral part of these financial statements. Town of Estes Park, Colorado Power and Communications Fund Schedule of Revenues, Expenditures And Changes in Fund Balance—Budget and Actual For the Year Ended December 31,2021 REVENUES Utility Sales Intergovernmental Investment income Miscdtaneous Contributions and Donations TOTAL REVENUES EXPENDITURES Current Source of supply Distribution Customer accounts Administration and general Broadband Capital outlay Debt Service Other Principal Interest TOTAL EXPENDITURES OTHER FINANCING SOURCES AND (USES) Transfers in Transfers out Loss on sale of capital assets TOTAL OTHER FINANCING SOURCES AND (USES) CHANGE IN NET POSITION, BUDGETARY BASIS BUDGETED AMOIWTS ORIGINAL S 18,638,875 241,000 96,000 10,000 18,985,875 8,218,997 4,596,205 568,897 2,350,429 548,195 985,000 264,584 404,008 1.160.134 19,096,449 (1,670,029) (1,670,029) S (1,780,603) s s FINAL 18,838,875 241,000 96,000 10,000 19,185,875 8,218,997 5,023,470 581,070 2,400,980 749,398 19,687,712 264,584 404,008 1.160.134 38,490,353 (1,670,029) (1,670,029) (20,974,507) ACTUAL $ 20,433,120 4,375 4,651 397,931 20,840,077 7,963,435 3,846,422 431,232 2,077,725 963,202 10,048,156 404,008 929,264 26,663,444 (1,670,028) (1,670,028) S (7,493,395) VARIANCE WITH FINAL BUDGET POSITIVE (NEGATIVE) $ 1,594,245 4,375 (236,349) 301,931 (10,000) 1,654,202 255,562 1,177.048 149,838 323,255 (213,804) 9,639,556 264,584 230,870 11,826,909 1 I S 13,481,112 ADJUSTMENTS FROM BUDGETARY BASIS TO GAAP BASIS Capital outlay Depreciation expense Debt principal payments CHANGE IN NET POSITION - GAAP BASIS NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR 10,048,156 (1,307,957) 404,008 1,650,812 28,860.694 30,511,506 The accompanying notes are an integral part of these financial statements. Town of Estes Park, Colorado Power and Communications Fund Schedule of Revenues, Expenditures And Changes In Fund Balance—Budget and Actual For the Year Ended December 31,2020 BUDGETED AMOUNTS REVENUES Utility Sales Intergovernmental Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Current Source of supply Distribution Customer accounts Administration and general Broadband Capital outlay Debt Service Principal Interest TOTAL EXPENDITURES OTHER FINANCING SOURCES AND (USES) Transfers out TOTAL OTHER FINANCING SOURCES AND (USES) ORIGINAL 18,329,373 120,000 112,500 18,561,873 19,109,356 (1,720,029) (1,720,029) FINAL 18,032,051 90,000 112,500 18,234,551 ACTUAL 47,591,448 (1,720,029) (1,720,029) 19,045,222 311,020 202,020 19,558,262 VARIANCE WITH FINAL BUDGET POSITIVE (NEGATIVE) 1,013,171 221,020 89,520 1,323.711 7,983,854 4,329,144 451,758 2,302,700 1,226,972 1,275,000 368.431 1,171,497 10,294,500 4,384,662 531,758 2,438,316 873,370 27,528,914 368,431 1,171,497 7,718,129 3,145,197 505,826 2,149,716 635,931 9,692,358 383,431 967,102 2,576,371 1,239,465 25,932 288,600 237,439 17,836,556 (15,000) 204,395 25,197,690 (1,720,029) (1,720,029) 22,393,758 CHANGE IN NET POSITION, BUDGETARY BASIS ADJUSTMENTS FROM BUDGETARY BASIS TO GAAP BASIS Capital outlay Depreciation expense Debt principal payments Capital contributions CHANGE IN NET POSITION - GAAP BASIS NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR (2,267,512)S (31,076,926)(7,359,457)23,717,469 9,692,358 (1,259,873) 383,431 514 1,456,973 27,403,721 28,860,694 The accompanying notes are an integral part of these financial statements. 69 Town of Estes Park Budgetary Comparison Schedule (Non-GAAP Basis) Power and Communications Fund Year Ended December 31, 2019 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) Revenues Utility sales Intergovernmental Investment income Miscellaneous $ 16,574,718 $ 16,574,718 $ 17,863,980 $ 1,289,262 64,000 708,578 64,000 34,270,390 6,548 316,767 1,843,865 6,548 252,767 (32,426,525) Total revenues 17,347,296 50,909,108 20,031,160 (30,877,948) Expenditures Current Source of supply Distribution Customer accounts Administration and general Capital outlay Debt service Principal Interest Debt issuance costs 7,554,806 3,633,771 530,985 2,332,101 1,942,000 320,000 149,813 8,526,076 4,025,537 524,296 3,656,179 27,307,043 3,350,000 485,327 300,971 8,141,856 2,003,982 407,947 2,535,966 4,990,011 3,367,558 192,627 297,191 384,220 2,021,555 116,349 1,120,213 22,317,032 (17,558) 292,700 3,780 Total expenditures 16,463,476 48,175,429 21,937,138 26,238,291 Other financing sources (uses) Transfers in 62,329 (62,329) Transfers out Loss on sale of capital assets Total other financing sources (uses) Change in net position - budgetary basis (1,772,928) (1,772,928) $ (889,108) $ (1,772,928) (1,710,599) 1,023,080 (1,772,928) (9,994) (1,782,922) (3,688,900) $ (9,994) (72,323) (4,711,980) Adjustments to GAAP basis Capital outlay Depreciation Debt principal payments Change in net position - GAAP basis Net position at beginning of year (as previously stated) Net position at end of year 4,990,011 (1,075,060) 3,367,558 3,593,609 23,810,112 $ 27,403,721 See accompanying Independent Auditor's Report. 67 Town of Estes Park Budgetary Comparison Schedule (Non-GAAP Basis) Light and Power Fund Year Ended December 31, 2018 Budgeted Amounts Original Final Actual Amounts Variance with Final Budget Positive (Negative) Revenues Utility sales Intergovernmental Investment income Miscellaneous $ 15,882,870 $ 15,882,870 $ 16,381,233 $ 68,000 328,836 24,252 68,000 977,836 3,344 165,002 649,555 498,363 (20,908) 97,002 (328,281) Total revenues 16,279,706 16,952,958 17,199,134 246,176 Expenditures Current Source of supply Distribution Customer accounts Administration and general Capital outlay Debt service Principal Interest 7,544,166 3,583,968 555,346 2,662,817 1,895,000 7,544,166 5,241,112 554,346 2,366,359 1,785,975 7,670,249 3,509,234 534,698 2,276,088 1,785,975 (126,083) 1,731,878 19,648 90,271 305,000 141,632 305,000 141,632 305,000 139,661 1,971 Total expenditures 16,687,929 17,938,590 16,220,905 1,717,685 Other financing sources (uses) Transfers in Transfers out Gain on sale of capital assets (1,731,233) 2,139,307 (1,511,233) 2,139,306 (1,731,228) 78,367 (1) (219,995) 78,367 Total other financing sources (uses) Change in net position - budgetary basis $ (1,731,233) (2,139,456)_$_ 628,074 (357,558) 486,445 1,464,674 _$_ (141,629) 1,822,232 Adjustments to GAAP basis Capital outlay Depreciation Debt principal payments Change in net position - GAAP basis Net position at beginning of year (as previously stated) Cumulative effect of the adoption of GASB 75 Net position at end of year 1,785,975 (984,979) 305,000 2,570,670 21,672,880 (433,438) $ 23,810,112 See accompanying Independent Auditor's Report. 64 Town of Estes Park Schedule of Revenues, Expenditures and Changes in Net Position Budget and Actual (Non-GAAP Basis) Light and Power Fund Year Ended December 31, 2017 Budgeted Amounts Original $ 15,100,714 $ 291,000 69,661 387,450 Final 15,100,714 1,134,981 69,661 387,450 Actual Amounts $ 15,287,109 1,031,202 87,206 1,101,099 Variance with Final Budget Positive (Negative) $ 186,395 (103,779) 17,545 713,649 Revenues Utility sales Intergovernmental Investment income Miscellaneous Total revenues 15,848,825 16,692,806 17,506,616 813,810 Expenditures Current Source of supply Distribution Customer accounts Administration and general Capital outlay Debt service Total other financing sources (uses) 7,393,960 3,949,541 456,359 2,577,499 1,018,027 7,393,960 3,707,851 457,806 2,600,370 2,891,585 7,350,123 3,659,599 445,108 2,403,658 2,603,399 43,837 48,252 12,698 196,712 288,186 Interest Total expenditures Other financing sources (uses) Transfers in Transfers out 295,000 153,062 15,843,448 345,462 (1,646,929) 295,000 153,062 17,499,634 365,704 (1,646,929) 295,000 151,157 16,908,044 365,703 (1,646,929) 1,905 591,590 (D (1,301,467) (1,281,225) Change in net position - budgetary basis $ (1,296,090) $ (2,088,053) (1,281,226) (682,654) $ Adjustments to GAAP basis Capital outlay Depreciation Debt principal payments Change in net position - GAAP basis Net position at beginning of year Net position at end of year _dL 1,405,399 2,603,399 (747,992) 295,000 1,467,753 20,205,127 $ 21,672,880 See accompanying Independent Auditor's Report. 56 Light & Power Fund Enterprise Fund, #502 Town of Estes Park - 2016 Budget SCOPE OF SERVICES Light & Power provides reliable quality electric power to approximately 10,000 accounts, including Rocky Mountain National Park. All customers are served through two substotions with efectridty provided by Ptotte River Power Authority, Light & Power maintains over 300 miles of distribution lines & constructs infrastructure for new developments. Light & Power is also responsible for reading all electric meters, maintenance of all Town-owned street lights, and records management Including billing information and federal reporting. The Town promotes energy efficiency and offers renewable energy to all of its customers. OPERATING REVENUES Charges for Services Miscellaneous Revenue Total Operating Revenues OPERATING EXPENSES Source of Supply Distribution Personnel Operations & Maintenance Customer Accounts Personnel Operations & Maintenance Administratlon/General Personnel Operations & Maintenance Capital Depreciation Total Operating Expenses Operating Income NON OPERATING REVENUES (EXPENSES) Intergovernmental Revenue Investment Income Interest expense/Debt service payments Loss on Sale of Assets Total non-operating revenues (expenses) Net income before capital contributions and transfers CAPITAL CONTRIBUTIONS AND TRANSFERS Transfers in Transfers Out Change in Net Position NET POSITION, Beginning*, restated NET POSITION, Ending* Rollovers 2014 13,289,589 1,735,180 15,024,769 6,649,945 1,294,238 900,800 411,327 92,674 438,583 1,759.862 614,016 0 12,161,447 2,863,322 237,743 48,670 (183,158) ('-.MSI y7,7l0 2.961,032 0 'I :',.•:,'..) 1,628,179 8,593,377 10,221,556 0 Original Budget 2015 13,816,533 181,001_ 13,997,534 6,775,000 1,596,788 1,191,153 513,810 146,970 658,635 1,977,033 3,497,000 0 16,356,389 378,128 53,000 ('?,763) ^0 n",""^L ..i'lir 0 n.'^'i i '/i 7 10,221,556 6,474,939 0 Revised Budget 2015 13,816,533 281,928 14,098,461 6,775,000 1,643,426 1,345,735 328,361 148,099 593,651 2,183,065 2,944,708 p 15,962,045 ;1..^. (,'•!'.l; 451,623 65,000 M'19.763) 927 67,787 '>[, •' </- I) C.w.!.'7! 10,221,556 7,056,632 0 Budget 2016 14,220,729 181,001 14,401,730 7,112,560 1,996,210 1,644,775 308,268 152,470 655,432 1,822,504 2,242,000 0 15,934,219 74,064 53,000 (449,106) 0 i ;".'•;.•) 325,000 f ! .'•.'< ' ••'•i.;\ 7,056,632 4,007,601 _0_ Fund auallabillty Is calculated as "unrestricted current assets less Inventories less current liabilities", (source: audited financial statements, page 7 for the fiscal year ended Dec. 31, 2014). Amounts for 2014 ending fund balance are: unrestricted current assets ($12,942,280) less current liabilities ($2,041,058) less inventories ($679,666), for an available ending fund balance of $10,221,556. 103 TOWN OF ESTES PARK STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED DECEMBER 31, 2016 OPERATING REVENUES Charges for Services Miscellaneous Total Operating Revenues OPERATING EXPENSES Source of Supply Purification Distribution Customer Accounts Administration and General Depreciation and Amortization Medical Expenses Total Operating Expenses Operating Income NONOPERATING REVENUES (EXPENSES) Investment Income Interest Expense Gain (Loss) on Sale of Assets Total Nonoperating Revenues Net Income Before Capital Contributions and Transfers CAPITAL CONTRIBUTIONS AND TRANSFERS Grants Tap Fees Transfers In Transfers Out Change in Net Position Net Position - Beginning of Year (As Restated) NET POSITION - END OF YEAR Business-Type Activities Light and Power $ 13,907,893 367,446 14,275,339 7,161,619 3,104,575 384,020 2,460,228 777,423 13,887,865 387,474 78,448 (162,266) (91,430) (175,248) 212,226 153,652 711,942 (1,391,740) (313,920) 20,519,047 $ 20,205,127 Water $ 4,458,412 $ 90,143 4,548,555 156,117 743,780 1,490,408 237,334 628,126 708,955 3,964,720 583,835 34,844 (127,151) (92,307) 491,528 25,420 610,663 (56,261) 1,071,350 21,857,133 $ 22,928,483 $ Total 18,366,305 457,589 18,823,894 7,317,736 743,780 4,594,983 621,354 3,088,354 1,486,378 17,852,585 971,309 113,292 (289,417) (91,430) (267,555) 703,754 179,072 610,663 711,942 (1,448,001) 757,430 42,376,180 43,133,610 Governmental Activities Internal Service $ 3,496,532 85,294 3,581,826 975,462 568,368 2,031,640 3,575,470 6,356 20,371 41,338 61,709 68,065 68,065 5,099,330 $ 5,167,395 Amounts Reported in Business-Type Activities in the Statement of Activities are Different Because: Change in net position of proprietary funds $ 757,430 Internal service funds are used by management to charge the costs of fleet maintenance, vehicle replacement and information technology to individual funds. A portion of the net revenues of the internal services funds is included in business-type activities in the statement of activities _27,562 Change in Net Position of Business-Type Activities $ 784,992 See accompanying Notes to Financial Statements.(9) Exhibit A ;iC'iT]in;;l!^r-~''i;: ',•[ TOWN OF ESTES PARK, COLORADO PROPOSED Electric Rate Summary 2024 until Superceded, Public Hearings 7/23 & 8/13/2024 I t -i '"." P A II I COLORADO Customer Rate Class RESIDENTIAL'" Available to all residential customers and residential customers with electric heat up to 25,000 kWh annually. RESIDENTIAL DEMANDv" Available to existing customers on this rate, through April. All other times the Residential energy charge would apply. RESTDENTIAL ENERGY TIME-OF-DAY^T' Available to all residential customers who use electric thermal storage heat or who own an electric vehicle. RESIDENTIAL ENERGY BASJC^TIME-OF-DAY f" Available to all residential customers not using electric thermal storage heat. These rates apply September through April. Standard rates apply May through August. SMALL COMMERCIAL t^ Available to all commercial customers with demands of 35 kW or less. SMALL COMMERCIAL ENERGYTJME-OF-DAYPr Available to all commercial customers using electric thermal storage heat with demands of 35 RW or less LARGE COMIVIERCIAL'" Available to all commercial customers with demands exceeding 35 kW LARGE COMMERICIAL TIME-OF-DAYl" Available to all commercial customers with demands exceeding 35 kW OUTDOOR AREA LIGHTING Available for lighting outdoor private areas RENEWABLE ENERGY CHARGE11' Voluntary participation available to all classes; charge pei MUNICIPAL RATE '" Available for electricty use on municipal property Year w Jan 2021 2022 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Jan 2021 ^022- 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Jan 2021 2022 2023 Oct 2024 Customer Charge $/Month $23.47 $24.23 $25.00 $26.25 $26.90 $27.70 $28.50 $29.93 $26.90 $27.70 $28.50 $29.93 $26.10 $27.70 $28.50 $29.93 $33.25 $33.12 $33.00 $34.65 $36.51 $36.26 $36.00 $37.80 $45.49 $45.74 $46.00 $48.30 $53.79 $54:39 $55.00 $57.75 $36.49 $36.49 $36.49 $38.31 $9.00 $18.00 $27.00 $28.35 On-Peak Energy Consumption Charge$/kWh $0.1119 $0.1144 $0.1168 $0.1337 $0.0645 $0.0636 $0.0627 $0.0769 $0.1566 $0.1612 $0.1658 $0.1851 $0.1470 $0.1595 $0.1719 $0.1915 $0.1154 $0.1169 $0.1183 $0.1353 $0.1438 $0.1349 $0.1349 $0.1527 $0.0633 $0.0640 $0.0648 $0.0791 $0.0848 $0.0876 $0.0904 $0.1060 $0.0275 $0.0275 $0.0275 $0.0275 $0.1149 $0.1128 $0.1106 $0.1161 Purchase Power Rider $;kWh $0.0042 $0.0073 $0.0105 $0.0042 $0.0073 $0.0105 $0.0042 $0.0073 $0.0105 $0.0042 $0.0073 $0.0105 $0.0042 $0.0073 $0.0105 $0.0042 $0.0073 $0.0105 $0.0042 $0.0073 $0.0105 $0.0042 $0.0073 $0.0105 N/A N/A N/A N/A Off-Peak Energy Consumption Charge$/kWh $0.0806 $0.0852 $0.0898 $0.1053 $0.1038 $0.0998 $0.0959 $0.1117 $0.0763 $0.0818 $0.0872 $0.1026 $0.0461 $0.0478 $0.0495 $0.0630 Demand Charge $/kW $13.60 S13.60 $13.60 $14.28 $15.87 $16.93 $18.00 $18.90 $18.30 $19.15 $20.00 $21.00 Standard Rate for Maythru August(fkWh $0.1119 $0.1144 $0.1168 $0.1226 '.^ TOWN OF ESTES PARK, COLORADO PROPOSED Electric Rate Summary 2020-2022, Public Meeting 4/14/2020 i^FSTES ' PARK COLORAOO Customer Rate Class RESIDENTIAL rlr Available to all residential customers and residential customers with electric heat up to 25,000 kWh annually. RESIDENTIAL DEMAND '•' Available to existing customers on this rate, September through April. All other times the Residential energy charge would apply. RESiDENTIAL ENERGY TIME-OF-DAY ^ Available to all residential customers using electric thermal storage heat. RESIDENTIAL ENERGY BASIC TIME-OF-OAY *" Available to all residential customers not using electric thermal storage heat. These rates apply Seotei through April. Standard rates apply May through August. SMALL COMMERCIAL*" Available to all commercial customers with demands of 35 kW or less. SMAU.COMMERCIAL ENERGY TIME-OF-DAY"' Available to all commercial customers using electric thermal storage heat with demands of 35 kW or less LARGE COMMERCIAL11' Available to all commercial customers with demands exceeding 35 kW LARGE COMMERICIAL TIME-OF-DAYt7r Available to all commercial customers with demands exceeding 35 kW OUTDOOR AREA LIGHTING Available for lighting outdoor private areas RENEWABLE ENERGY CHARGE"' Voluntary participation available to alt classes; charge pei 100 kWh block MUNICIPAL RATE •" available for electricty use on municipal property RMNP ADMINISTRATIVE HOUSING available to Rocky Mountain National Park residences naving an alternate power source delivered to Estes Park's distribution system Year121 2020 June 2020 2021 ^022 2020 June 2020 2021 ^022 2020 June 2020 2021 2022 2020 June 2020 2021 2022 2020 June 2020 2021 ~2022 2020 June 2020 2021 2022 2020 June 2020 2021 2022 2020 June 2020 2021 2022 2020 June 2020 2021 2022 2020 June 2020 2021 2022 2020 June 2020 2021 2022 2019 June 2020 2021 2022 Customer Charge $/Month $22.70 $23.47 $24.23 $25.00 $26.10 $26.90 $27.70 ^28.50 $26.10 $26.90 $27.70 $28.50 $26.10 $26.90 $27.70 $28.50 $33.37 $33.25 $33.12 ^33700 $36.77 $36.51 $36.26 $36.00 $45.23 $45.49 $45.74 $46.00 $53.18 $53.79 $54.39 $55.00 $36.49 $36.49 $36.49 '$36.49 $0.00 $9.00 $18.00 '$27.00 $22.70 $22.70 $22.70 $22.70 On-Peak Energy Consumption Charge $/kWh $0.1095 $0.1119 $0.1144 $0.1168 $0.0654 $0.0645 $0.0636 ^0.0627 $0.1520 $0.1566 $0.1612 $0.1658 $0.1345 $0.1470 $0.1595 $0.1719 $0.1140 $0.1154 $0.1169 ^OJ183 $0.1615 $0.1526 $0.1438 $0.1349 $0.0625 $0.0633 $0.0640 $0.0648' $0.0820 $0.0848 $0.0876 $0.0904 $0.0275 $0.0275 $0.0275 ^0.0275 $0.1171 $0.1149 $0.1128 -$0.1106 $0.0690 $0.0690 $0.0690 -$0:0690~ Purchase Power Rider $/kWh $0.00349 $0.00000 TBD TBD $0.00349 $0.00000 TBD TBD $0.00349 $0.00000 TBD TBD $0.00349 $0.00000 TBD TBD $0.00349 $0.00000 TBD TBD $0.00349 $0.00000 TBD TBD $0.00349 $0.00000 TBD TBD- $0.00349 $0.00000 TBD TBD $0.00000 $0.00349 $0.00000 TBD TBD N/A N/A N/A N/A Off-Peak Energy Consumption Charge$/kWh $0.0760 $0.0806 $0.0852 $0.0898 $0.1077 $0.1038 $0.0998 $0.0959 $0.0708 $0.0763 $0.0818 $0.0872 $0.0445 $0.0461 $0.0478 $0.0495 Demand Charge $/kW $13.60 $13.60 $13.60 $13.60 $14.80 $15.87 $16.93 $18.00 $17.45 $18.30 $19.15 $20.00 Standard Rate for May th ru August$/kWh $0.1095 $0.1119 $0.1144 $0.1168 144 TOWN OF ESTES PARK, COLORADO Electric Rate Summary 2016-2019 ililS T f s RS P A t! K COLORADO Customer Rate Class RESIDENTIAL ** Available to all residential customers and residential customers with electric heat up to 25,000 kWh annually. RESIDENTIAL D^MA1WW Available to existing customers on this rate, Septembei through April. All other times is Residential energy charge. RESIDENTIAL ENERGY TIME-OF-DAY ** Available to ati residential customers using electric thermal storage heat. RESIDENTIAL ENERGY BASIC TIME-OF-DAY ** Available to all residential customers not using electric thermal storage heat. These rates apply September through April. The standard Residential rate applies May through August-see sixth column to the far right. SMALL COMMERCIAL" Available to all commercial customers with demands o1 35 kW or less. SMALL COMMERCIAL ENERGY T1ME-OF-DAY ** Available to all commercial customers using electric thermal storage heat with demands of 35 kW or less LARGE COMMERCIAL ** Available to all commercial customers with demands exceeding 35 kW LARGE COMMERICIAL TIME-OF.DAY ** Available to all commercial customers with demands exceeding 35 kW OUTDOOR AREA UGHTING Available for lighting outdoor private areas Year ~2QW Sept "16 2017 2018 ~2019~ 2016 Sept "16 2017 2018 2019 2016 Sept-16 2017 2018 ^019 2016 Sept-16 2017 2018 2019 2016 Sept "16 2017 2018 ~2019~ 2016 Sept "16 2017 2018 2019 2016 Sept'16 2017 2018 2019 ~2QW Sept-16 2017 2018 ~2019~ 2016 Sept '16 2017 2018 2019 Customei Charge S/Month $6.70 $10.70 $14.70 $18.70 $22.70 $7.70 $12.30 $16.90 $21.50 $26.10 $7.70 $12.30 $16.90 $21.50 $26.10 $7.70 $12.30 $16.90 $21.50 $26.10 $9.85 $15.73 $21.61 $27.49 $33.37 $10.85 $17.33 $23.81 $30.29 $36.77 $13.35 $21.32 $29.29 $37.26 $45.23 ^15:70 $25.07 $28.12 $35.77 $53.18 $10.77 $17.20 $23.63 $30.06 $36.49 On-Peak Energy Consumptior Charge $/kWh ^0.11229 $0.10885 $0.10890 $0.10920 $0.10950 $0.07175 $0.06505 $0.06508 $0.06526 $0.06544 $0.13054 $0.13650 $0.14130 $0.14700 $0.15200 $0.13100 $0.13500 $0.13350 $0.13400 $0.13450 $0.10958 $0.10800 $0.11000 $0.11200 $0:11400 $0.13510 $0.14300 $0.15000 $0.15600 $0.16150 $0.05709 $0.05355 $0.05640 $0.05950 $0.06250 $0.07296 $0.07000 $0.07350 $0.07750 $0.08200 Off-Peak Energy Sonsumptioi Charge S/RWh $0.07100 $0.06820 $0.07060 $0.07345 $6:07595 $0.10721 $0.10812 $0.10691 $0.10731 $0.10771 $0.06571 $0.06269 $0.06576 $0.06839 $0.07080 $0.04484 $0.03795 $0.03985 $0.04202 $0.04446 Demand Charge $/kW ~WQ2 $12.00 $12.50 $13.10 $13.60 $11.14 $13.00 $13.65 $14.25 $14.80 $13:40 $15.25 $16.00 $16.85 $17.45 Standard Rate for May thru August S/kWh $0.11229 $0.10885 $0.10890 $0.10920 $0.10950 TOWN OF Memo To: Honorable Mayor Board of Trustees Through; Town Administrator Machalek From: Director Bergsten; Superintendent Lockhart; NewGen Strategies & Solutions, Meghan Helper Date; July 23, 2024 RE: Ordinance 12-24 Amending the Power and Communications Rate Schedules Objective: To maintain high-quality and reliable electric service by increasing electric rates to keep up with the increasing cost of operations and capital improvements by requesting the Town Board consider electric rate. Present Situation: Every three years the Town performs a financial rate study to ensure our revenues and expenditure balance out. Power and Communications has seen unprecedented cost increases over the past few years. For example, some transformer costs have tripled. The Town's public electric utility is a cost-based entity that relies solely on user fees to operate. Costs and revenues must be balanced in order to maintain operations and ensure reliable operations. We are proposing an overall rate increase of 5.0% starting in October 2024. At the March 12th 2024 study session, staff presented financial rate study results. Three late spring weather events delayed our ability to complete a full cost-of-service analysis. We will bring the Town Board proposed electric rates for 2025 and 2026 when the full cost-of-service analysis has been completed. Hard copies of the study and proposed rate sheet are located at the Municipal building and library for the public to review. The rate study is also on our website. Proposal: Staff proposes the Town Board consider the proposed increase to electric rates. Adyantafles: • Maintain adequate financial strength required to operate the enterprise • Meet our bond covenants obligations •— 6 <^ 0 Q ft ^ 0 • Fund projects required to improve reliability, quality and safety of our system I; Ol'TlQul Connie Phipps <conniephipps@gmail.com> Town Board to consider proposed new electric rates 1 message Town of Estes Park Public Information Office <kmiller@estes.org> Tue, Jun 25, 2024 at 2:26 PM Reply-To: kmiller@estes.org To: conniephipps@gmail.com I Ci el ^^°^A T? ^ pub"c lnformation office www.estes.orgCOLORADO ,-...—.« Town Board to consider proposed new electric rates To ensure continued reliable utility services and plan for future upgrades through capital improvement projects, the Town of Estes Park periodically reviews the cost of providing services as well as projected revenue - the rates paid by customers. The Town's public electric utility is a cost-based entity that relies solely on user fees to operate. Costs and revenues must be balanced in order to maintain operations and keep utilities in line with current practices. Rate studies also ensure equitable rates among customer classes, so that one customer class does not subsidize another. The rate study was presented to the Town Board in March of 2024. Prior to that, the last study was completed in 2019. Customers are encouraged to attend the upcoming Town Board meetings that will include electric rate discussions. Visit www,Rsie_s,uig/b^af^aiidjii^^^ for date confirmation and complete meeting details: ~) 1. Installation of tree-cable (covered conductors) in the Allenspark area and within the Estes Valley. 2. Software modernization to support the transition from coal-fired to carbon-free electric generation. For more information on the electric rate study, please contact the Utilities nQnartm-->r>t ot Q7n_C;77 ^C;QQ I Inrla+oc nn thic ctndv will ho nn<s+prl tn 7/19/2024 Attachment 3 July 23, 2024 ESTES PARK POWER AND COMMUNICATIONS RATE STUDY PROPOSED RATE PLAN IDWXOI JiJ! ESl'ES PAKK ar).ioioK,\l)0 NewGen |& Solutions FINANCIAL FORECAST RESULTS AGENDA ^•\\,Rate Study Overview Study Progress, Results, and Delays Advanced Metering Infrastructure (AMI) Data 2024 Rate Plans Next Steps 0 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC 7/19/2024 RATE STUDY PROCESS: OVERVIEW 'Daterminfrthe rev»njj|< ' requiremanlt of thl if^WW uiMiUhtysw Unbundle costs by functions and STEP 2 services (source of supply, distribution, customer) Classify costs (demand, energy. customer costs, etc.) STEP 4 Allocate costs among customer classes STEP 5 Design rates 3 2024 NEWGEH STRATEGIES AND SOLUTIONS, ILC Financial Forecast Cost Allocation Rate Design RATE STUDY PROCESS FINANCIAL FORECAST BSsMl^i^^ife,_^lfeli^^ Revenues ?n"* EPPC Operating and Capital Expenses, Audited Rate Revenues Revenues EPPC System Load, Rates and Expense Forecasts l'.->'*:;;'"^ ^^^•Ay4^iyjAi;LLaai8itt to Couftr Costs EPPC Customer Base Rate Changes and Annual Debt Issues 7/19/20; RATE STUDY PROCESS: COST OF SERVICE STCP1- DCTtlopRnenue Rtquiremwt STEPt Functtonatiit Cortt SoufK of Supply lPut<has«dPow<-rA Trjnimtsston) STCP1 ClaKlfyCoits Demand <CPf En«f(yikWhl SUP 4 Alloute Costs Customei Swviw Meter Readlnq Cnrtwwr Aicountlng t»0{<USlOBWS) ';. Wll. NmGEH STRATEGIES AMD SOlUTIONS. ILC RATE STUDY PROCESS UNBUNDLE BY FUNCTION Typical Electric Utility System Configuration ^»» 7/19/2024 RATE STUDY PROCESS UNBUNDLE BY FUNCTION Platte River Power Authority (PRPA): Generation and Transmission Estes Park Power & Communications (EPPC): Distribution and Customer Service ^ iVit^. r-^l^f'=€'-^JI^ ^ —^ ^^" .rA 'm ^ 'rl\'&1 y"'\ ^p^'" ///"^ RATE STUDY PROCESS GENERATION FUNCTION - PRPA The generation function is responsible for serving demand and producing energy. - The power plant portfolio is sized to meet the maximum demand requirements of the system (PRPA). - PRPA's goal is to transition to 100% noncarbon energy mix by 2030. 7/19/2024 RATE STUDY PROCESS TRANSMISSION FUNCTION - PRPA • The transmission function is responsible for transmitting electricity from generation to the distribution system. • The utility must size transmission substations, transformers, and lines to serve the maximum demand requirements of the system. ... \\ "".. v . db"- (- ' // -- /' RATE STUDY PROCESS DISTRIBUTION FUNCTION - EPPC The distribution function is responsible for distributing electricity from the transmission line to customers. The utility must size distribution substations, transformers, lines, and services to serve the maximum local demand requirements of their customers. ' <r ?" 7'. 10 7/19/2024 11 RATE STUDY PROCESS CUSTOMER FUNCTION - EPPC • The customer function is responsible for utility billing and customer service. • EPPC future customer function: - DER Programs development and execution. - Communication and information. RATE STUDY PROCESS FIXED VS. VARIABLE COSTS AND REVENUES Typical Cost Functions Source of Power Distribution Customer Typical Cost Classifications Demand Related Energy Related Demand Related Customer Related Customer Related Graphs are for illustrative purposes only. 12 7/19/20; RATE STUDY PROCESS COST OF SERVICE TO RATE DESIGN Cost of Service Revenue Requirement Functionalize Classify Guide for cost-based rates Rate Making Policy Decisions Incentivize behavior to create win-win scenario between the Utility and its Customers Industry practice is to move towards or align with COS Rates Collect sufficient revenue Support Utility's goals Use resources in cost- effective manner Price signal to Customer: • Convey information • Change behavior 13 RATE STUDY PROCESS EPPC RATE CLASSES • Residential • Residential Demand • Residential Energy TOD • Residential Energy Basic TOO • Small Commercial • Small Commercial Energy TOD • Large Commercial • Large Commercial TOO • Outdoor Area Lighting • Renewable Energy Charge • Municipal Rate •RMNP Rate Classes are grouped by similar size, consumption, requirements, and characteristics. 14 7/19/2024 15 RATE STUDY PROCESS POTENTIAL OBJECTIVES FOR RATE DESIGN Revenue stability Simplicity Alignment with cost of service Legislative and regulatory compliance Modernization, Distributed Generation, Virtual Power Plant, Electric Vehicles... New Service Offerings Conservation/DSM (Behavior Modification) RATE STUDY PROCESS BEST PRACTICES Align a utility's revenue collection with its cost causation (e.g., demand, energy, customer). Costs categorized as fixed and variable: - The seasonal nature of EPPC sales further exacerbates fixed cost recovery issues. Rates should reflect the COS, but policy and incentives should be considered (the "art"). If rates are not well designed or aligned with COS: - Potential for cost recovery not matching costs incurred. - Potential to over- or under-recover costs. - Does not ensure revenue adequacy. 16 7/19/2024 RATE STUDY PROGRESS AND DELAYS 17 Financial Forecast and Revenue Requirement: — Modeled and approved. Cost of Service: — Model update is in progress. - Delays: • Outages • AMI data transfer ADVANCED METERING INFRASTRUCTURE DATA • AMI Data: - Meters read usage hourty/sub-hourly. - Allows utility to meter real-time customer behavior. - Faster, more accurate meter reading than analog meters. - Easier to measure changes in customer usage. • Estes Park has full AMI deployment. 18 7/19/20: ADVANCED METERING INFRASTRUCTURE DATA Develop demand allocators by customer class. - Coincident Peak (CP). - Non-Coincident Peak (NCP). - Sum of Max Demands (SMD). Class segmentation analysis: - Identifies natural customer segmentation. - Current requirement 35 kW for Large Commercial Service. - Analysis will be performed on the commercial service classes to determine an appropriate demand requirement for the Large Commercial Service. 19 FINANCIAL FORECAST RESULTS 2024 REVENUE REQUIREMENT Source of Supply makes up a large portion of total expenses. Other Operating Expenses: - Distribution. - Customer Accounts. - A&G. General Fund transfer, - Budgeted at 7% of total Revenuesjfor 2024. Capital Improvement Plan Debt Service ^^ ^^^ ^ U ^ ^fc^ 20 7/19/202- 21 FINANCIAL FORECAST RESULTS RESERVE FUND • If no action is taken,the reserve fund levels will be drawn down annually. • Reserve fund drops below 90- day target in 2026. • Debt service coverage ratio drops below 1.25 target in 2027. • Rate increases need to maintain financial stability. PROPOSED RATE IMPLEMENTATION PLAN If no rate increase are implemented in 2024: - 8.5% rate increase needed for 3 years. Rate Increase Option 1 and Resulting Key Financial Metrics ?,^TT7<^ A^- Financial Metric Rate Increases Debt Service Coverage Ratio Debt Service Coverage Ratio Target Days Cash on Hand Days Cash on Hand Target 2024 L 0.0% 7.54 1.25 139 90 2025 8.5% 6.26 1.25 116 go 2026 L 8.5% 7.53 1.25 120 90 2027 8.5% 9.14 1.25 129 90 2028 0.0% 23.06 1.25 131 90 2029 0.0% 15.82 1.25 115 90 Recommend implementing an across-the-board rate increase of 5% for August 2024. Design rates by customer class for 2025 and 2026. 22 7/19/2024 PROPOSED RATE IMPLEMENTATION PLAN Recommend implementing an across-the-board rate increase of 5% for August 2024. Design rates by customer class for 2025 and 2026. Example Rate Increase Residential Residential Rate Component ] Current | Increase Customer Charge (S/Mo.) Consumption Charge ($/kWh) $25.00 $0.1168 5.0% 5.0% Proposed Rate $26.25 $0.1226 23 NEXT STEPS • Process AMI Data: - Class segmentation. - Allocation factors. • Update model with 2025 budget. • Adjust model for demand requirement shift. • Adjust model for any rate requirement enforcement. • Finalize and approve Cost of Service. • Rate design: - Rate changes by customer class. - Align with Cost of Service. 24 ADMINISTRATION Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Carlie Bangs, Housing & Childcare Manager Date: August 13, 2024 RE: Resolution 67-24 to Commit the Vacation Home Workforce Housing Regulatory Linkage Fee Revenue to the Estes Park Housing Authority for the Purchase of Fall River Village (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER: QUASI-JUDICIAL YES NO Objective: Consider a resolution that would commit the Vacation Home Workforce Housing Regulatory Linkage Fee (“Linkage Fee”) revenue collected since its inception and a future commitment of annual fee collections for the next 5 years (2025-2029) to assist in the purchase of Fall River Village. Present Situation: The Town of Estes Park has been working collaboratively with the Estes Park Housing Authority to support the acquisition of Fall River Village as a workforce housing development. The Estes Park Housing Authority is under contract to purchase the existing development at Fall River Village, made up of approximately 90 units being used mostly for short-term accommodations, to be repurposed as workforce and affordable housing. In 2022, the Workforce Housing Regulatory Linkage Fee (sometimes referred to as the short-term rental fee) was instituted, establishing an annual fee, initially $1,390, to obtain a vacation home's annual business license. This fee is in addition to the licensing fee (base fee of $200 plus $50 per bedroom) and is subject to annual adjustment for inflation, as calculated by the Town Clerk. The Town has already collected $1,480,000 in fees received since 2023. • 2023 Revenue: $723,980 • 2024 YTD Revenue: $720,610 Vacation homes located in outlying commercial districts are exempt from this fee, as it was designed to address the impact of vacation homes on workforce housing primarily in residential areas. Fall River Village is zoned as Commercial Outlying. Per the municipal code: […] revenues from the fee shall be expended only to defray the reasonable direct and indirect costs of the following: 1. The Town’s workforce housing programs and policies, which may include but are not limited to acquisition of housing units, construction of new units, purchase of deed restrictions on existing units, mortgage buydowns, and rent assistance programs; and 2. To defray the costs to the Town of the foregoing, including but not limited to, costs of staff and personnel required for the administration and enforcement of the regulatory program described in this Section. The Workforce Housing Regulatory Linkage Fee operates as an enterprise fund, providing the Town Board the authority to allocate these funds annually. The enterprise is committed to pursuing activities aimed at addressing the need for workforce housing in the Town and providing housing opportunities to sustain a local workforce, to the direct and indirect benefit of the fee payers. Proposal: At the request of the Estes Park Housing Authority Board, the Town is presenting a resolution to commit the transfer of Workforce Housing Regulatory Linkage Fees already collected to assist with the purchase of Fall River Village. The Estes Park Housing Authority also requests the commitment of the full amount of the fee revenue collected on an annual basis through 2029. This total forward commitment is anticipated to be approximately $3,575,000. Advantages: • Additional workforce housing with affordable rental rates. Disadvantages: • Commitment of Workforce Housing Regulatory Linkage Fee revenues to a particular housing project until 2030 means that funds could not be directed to other projects. However, the funds would be achieving their intended purpose and very likely would provide the highest return on investment, as construction of new housing is estimated to cost significantly more per unit than the current asking price for Fall River Village. Action Recommended: Approval of the resolution 67-24. Finance/Resource Impact: Up to $1.5 million from the Workforce Housing Impact budget item 505-000-322.45-00 and the annual full amount of revenue collected through 2029, approximately $3,575,000. Level of Public Interest High Sample Motion: I move for the approval/denial of resolution 67-24. Attachments: 1. Resolution 67-24 RESOLUTION 67-24 A RESOLUTION TO COMMIT VACATION HOME WORKFORCE HOUSING REGULATORY LINKAGE FEE REVENUE COLLECTED THROUGH 2029 TO THE ESTES PARK HOUSING AUTHORITY TO FACILITATE THE PURCHASE OF THE FALL RIVER VILLAGE DEVELOPMENT FOR WORKFORCE HOUSING WHEREAS, the Board of Directors of the Estes Park Housing Authority has requested the commitment of vacation home workforce housing regulatory linkage fee (“linkage fee”) revenue for the financing and acquisition of the Fall River Village development to repurpose the units for workforce housing; and WHEREAS, since established in 2022, the linkage fee has generated approximately $1.48 million in revenue for workforce housing, none of which has yet been spent; and WHEREAS, the Board of Trustees of the Town of Estes Park intends these funds to be transferred to the Estes Park Housing Authority to carry out the funds’ intended purpose; and WHEREAS, workforce housing is a critical community need, as identified in the 2023 Housing Needs Assessment and Strategic Plan; and WHEREAS, the commitment of linkage fee revenues, both as accrued to date and to be accrued through 2029, is essential for the purchase. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: The Board of Trustees directs that the Town transfer to the Estes Park Housing Authority both (i) the balance of revenue received to date from the linkage fee, constituting approximately $1,480,000, as well as (ii) the future revenue collected from the linkage fee through 2029. The Town Administrator or designee is authorized to transfer these funds to the Housing Authority, conditioned on the Housing Authority using them only for the purchase of the Fall River Village development for workforce housing, and the Town’s approval of any necessary contracts to facilitate the purchase. The Board requires that the Housing Authority promptly return any transferred funds should the purchase not occur. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK __________________________________ Mayor ATTEST: ______________________________ Town Clerk APPROVED AS TO FORM: ______________________________ Town Attorney Public Works Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Trevor Wittwer, Civil Engineer Date: August 13, 2024 RE: Resolution 68-24 Approving Intergovernmental Agreement with CDOT for Multimodal Options Fund for Fall River Trail Final Segment (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER______________ QUASI-JUDICIAL YES NO Objective: Public Works staff seek Town Board approval for this Intergovernmental Agreement (IGA) from the Colorado Department of Transportation (CDOT) for construction funds for the Fall River Trail project. Present Situation: The Town Board supported Public Works staff to submit for a CDOT grant application which was awarded: 1.Multimodal Options Fund (MMOF) is state funds. Award amount: $1,438,557. Local cost share amount: $479,519. The Fall River Trail project is a high priority trail outlined in the Estes Valley Master Trails Plan. As such, Town staff have worked diligently to research grant opportunities and submit applications. This work will consist of multimodal trail construction along Fall River Road (US 34) starting at the current trail terminus east of Fall River Court. The proposed construction will follow US 34 west for approximately 0.70 miles, and connect to the existing trail section along Fish Hatchery Road. The design phase of this work was completed to a 90% phase in 2017 through a Federal Transit Administration Sarbanes Alternative Transportation in Parks and Public Lands Grant. Final 100% design efforts are currently underway and anticipated completion is early 2025, supported with Town funds. Following final design, the Town will solicit bids for construction. The construction phase of the project is estimated to begin in fall/winter 2025 and estimated completion for this trail segment will be spring 2026. Proposal: Town Board approval IGA will allow staff to proceed with final design and construction of this important trail project. This is an expensive project and its successful completion is possible with grant funds. Advantages: •Town staff strategically applied for these CDOT funds for this specific trail segment because it is on their highway system (US 34) and because this is a particularly challenging area because of the proposed trail alignment to the road and river bank. •These funds support completing a trail that will connect historic downtown Estes Park with Rocky Mountain National Park (RMNP). •When completed, this will be the first multimodal trail that connect with RMNP. •This project supports the Estes Valley Master Trails Plan. •This trail extension will provide added safety to residents and visitors that walk and bike this heavily-trafficked stretch of Fall River Road (US34). Disadvantages: •As most all grants, there is a required cost share; however, funds have been allocated for this project through the 1A Trail Expansion Funds. •Construction activity will be disruptive especially to motorists along Fall River Road; however, traffic control will be provided and construction will primarily be conducted during the slower months. Action Recommended: Staff recommends Town Board approval for this IGA for Fall River Trail construction support. Finance/Resource Impact: •MMOF grant: $1,438,557 •Cost share: $479,519 is supported from 1A Trail Expansion Funds. Level of Public Interest Moderate. Sample Motion: I move for the approval/denial of Resolution 68-24. Attachments: 1. Resolution 68-24 2.CDOT IGA RESOLUTION 68-24 A RESOLUTION APPROVING A CONTRACT WITH THE COLORADO DEPARTMENT OF TRANSPORTATION FOR GRANT FUNDING FOR FALL RIVER TRAIL II WHEREAS, the Town Board wishes to enter a grant agreement referenced in the title of this resolution for the purpose of funding for the Fall River Trail final segment. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: The Board approves, and authorizes the Mayor to sign, the grant agreement referenced in the title of this resolution in substantially the form now before the Board. The Board authorizes Town staff to undertake the work described in the agreement, subject to all applicable laws and policies. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney ATTACHMENT 1 OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 1 of 11 CONTRACT THIS CONTRACT made this ___ day of ________________ 20___, by and between the State of Colorado for the use and benefit of the Colorado Department of Transportation hereinafter referred to as the State and TOWN OF ESTES PARK hereinafter referred to as the “Contractor” or the “Local Agency.” RECITALS 1.Authority exists in the law and funds have been budgeted, appropriated and otherwise made available and a sufficient uncommitted balance thereof remains available for payment of project and Local Agency costs. Total Contract Amount: $1,918,076.00. 2.Required approval, clearance and coordination have been accomplished from and with appropriate agencies. 3.Pursuant to 43-2-104.5 C.R.S. as amended, the State may contract with Local Agencies to provide maintenance and construction of highways that are part of the state (or local agency) highway system. 4.Local Agency anticipates a project for Fall River Trail II and by the date of execution of this contract, the Local Agency and/or the State has completed and submitted a preliminary version of CDOT form #463 describing the general nature of the Work. The Local Agency understands that before the Work begins, the Local Agency must receive an official written “Notice to Proceed” prior to commencing any part of the Work. The Local Agency further understands, before the Work begins, the form #463 may be revised as a result of design changes made by CDOT, in coordination with the Local Agency, in its internal review process. The Local Agency desires to perform the Work described in form #463, as it may be revised. 5.The Local Agency has requested that State funds be made available for project MTF M405-027 (25483), Fall River Trail II referred to as the “Project” or the “Work.” Such Work will be performed in Estes Park, Colorado, specifically described in Exhibit A. 6.The State has funds available and desires to provide 75% of the funding for the work. Local Agency will provide the other 25%. State funds may be awarded with “Special Funding”. Special Funding may include but is not limited to one or a combination of Multimodal Transportation & Mitigation Options Funding, Revitalizing Main Streets, Safer Main Streets, Stimulus Funds or COVID Relief. If Special Funding is used there may be an expiration date for the funds. The expiration date applies to grants and local funds used to match grants. To receive payment or credit for the match, Work must be completed or substantially completed, as outlined in the terms of the grant, prior to the expiration date of the Special Funding and invoiced in compliance with the rules outlined in the award of the funding. 7.The Local Agency desires to comply with all state and other applicable requirements, including the State's general administration of the project through this contract, in order to obtain state funds for the project. 8.The Local Agency has estimated the total cost of the work and is prepared to accept the state funding for the work, as evidenced by an appropriate ordinance or resolution duly passed and adopted by the authorized representatives of the Local Agency, which expressly authorizes the Local Agency to enter into this contract and to complete the work under the project. A copy of this ordinance or resolution is attached hereto and incorporated herein as Exhibit B. 9.This contract is executed under the authority of §§ 29-1-203, 43-1-110; 43-1-116, 43-2-101(4)(c) and 43-2-144, C.R.S. and Exhibit B. 10.The Local Agency is adequately staffed and suitably equipped to undertake and satisfactorily complete some or all of the Work. 11.The Local Agency can more advantageously perform the Work. THE PARTIES NOW AGREE THAT: Section 1. Scope of Work The Project or the Work under this contract shall consist of Fall River Trail II, in Estes Park, Colorado, as more specifically described in Exhibit A. State $LAWRK REGION: 4 PROJECT: MTF M405-027 (25483) Fall River Trail II TCH ATTACHMENT 2 OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 2 of 11 Section 2. Order of Precedence In the event of conflicts or inconsistencies between this contract and its exhibits, such conflicts or inconsistencies shall be resolved by reference to the documents in the following order of priority: 1.Special Provisions contained in Section 26 of this contract 2.This contract 3.Exhibit A (Scope of Work) 4.Exhibit B (Local Agency Resolution) 5.Exhibit C (Funding Provisions) 6.Exhibit D (Option Letter) 7.Exhibit E (PII Certification), if applicable Section 3. Term This contract shall be effective upon approval of the State Controller or designee, or on the date made, whichever is later. It shall terminate on March 06, 2034, or sooner if any of the State’s funding expires, or is sooner terminated or unless performance is extended in accordance with this Contract. Section 4. Project Funding Provisions A.The Local Agency has estimated the total cost of the work and is prepared to accept the state funding for the work, as evidenced by an appropriate ordinance or resolution duly passed and adopted by the authorized representatives of the Local Agency, which expressly authorizes the Local Agency to enter into this contract and to complete the work under the project. A copy of this ordinance or resolution is attached hereto and incorporated herein as Exhibit B. B.The parties hereto agree that this contract is contingent upon all funds designated for the project herein being made available from state sources, as applicable. Should these sources fail to provide necessary funds as agreed upon herein, the contract may be terminated by either party, provided that any party terminating its interest and obligations herein shall not be relieved of any obligations which existed prior to the effective date of such termination or which may occur as a result of such termination. C. Funding will be detailed in Exhibit C of the funding provisions. Section 5. Project Payment Provisions A.The State will reimburse the Local Agency for incurred costs relative to the project following the State’s review and approval of such charges, subject to the terms and conditions of this Contract. Provided however, that charges incurred by the Local Agency prior to the date this contract is executed by the State Controller will not be charged by the Local Agency to the project, and will not be reimbursed by the State. B.The State will reimburse the Local Agency’s reasonable, allocable, allowable costs of Performance of the Work, not exceeding the maximum total amount described in Exhibit C. The applicable principles described in 49 C.F.R. 18 Subpart C and 49 C.F.R. 18.22 shall govern the allowability and allocability of costs under this contract. The Local Agency shall comply with all such principles. To be eligible for reimbursement, costs by the Local Agency shall be: 1.In accordance with the provisions of Section 5 and with the terms and conditions of this contract; 2.Necessary for the accomplishment of the Work; 3.Reasonable in the amount for the goods and services provided; 4.Actual net cost to the Local Agency (i.e. the price paid minus any refunds, rebates, or other items of value received by the Local Agency that have the effect of reducing the cost actually incurred); 5.Incurred for Work performed after the effective date of this contract; 6.Satisfactorily documented. C.The Local Agency shall establish and maintain a proper accounting system in accordance with generally accepted accounting standards (a separate set of accounts, or as a separate and integral part of its current accounting scheme) to assure that project funds are expended and costs accounted for in a manner consistent with this contract and project objectives. 1.All allowable costs charged to the project, including any approved services contributed by the Local Agency or others, shall be supported by properly executed payrolls, time records, invoices, contracts or vouchers evidencing in detail the nature of the charges. 2.Any check or order drawn up by the Local Agency, including any item which is or will be chargeable against the project account shall be drawn up only in accordance with a properly signed voucher then on file in the office of the Local Agency, which will detail the purpose for which said check or order is drawn. All checks, OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 3 of 11 payrolls, invoices, contracts, vouchers, orders or other accounting documents shall be clearly identified, readily accessible, and to the extent feasible, kept separate and apart from all other such documents. D. If the Local Agency is to be billed for CDOT incurred costs, the billing procedure shall be as follows: 1. Upon receipt of each bill from the State, the Local Agency will remit to the State the amount billed no later than 60 days after receipt of each bill. Should the Local Agency fail to pay moneys due the State within 60 days of demand or within such other period as may be agreed between the parties hereto, the Local Agency agrees that, at the request of the State, the State Treasurer may withhold an equal amount from future apportionment due the Local Agency from the Highway Users Tax Fund and to pay such funds directly to the State. Interim funds, until the State is reimbursed, shall be payable from the State Highway Supplementary Fund (400). 2. If the Local Agency fails to make timely payment to the State as required by this section (within 60 days after the date of each bill), the Local Agency shall pay interest to the State at a rate of one percent per month on the amount of the payment which was not made in a timely manner, until the billing is paid in full. The interest shall accrue for the period from the required payment date to the date on which payment is made. E. The Local Agency will prepare and submit to the State, no more than monthly, charges for costs incurred relative to the project. The Local Agency’s invoices shall include a description of the amounts of services performed, the dates of performance and the amounts and description of reimbursable expenses. The invoices will be prepared in accordance with the State’s standard policies, procedures and standardized billing format to be supplied by the State. Additionally, the State shall have no obligation to pay Local Agency for any Work performed or expense incurred after the Agreement Expiration Date or after required billing deadline as specified in the award letter if applicable, whichever is sooner. The State’s obligation to pay Agreement Funds will continue until the Agreement Expiration Date. If Agreement Funds expire before the Agreement Expiration Date, then no payments will be made after expiration of Agreement Funds. If the Work will be performed in multiple phases, the period of performance start and end date of each phase is detailed under the Funding Provisions & Performance Period in Exhibit C. F. To be eligible for payment, billings must be received within 60 days after the period for which payment is being requested and final billings on this contract must be received by the State within 60 days after the end of the contract term. 1. Payments pursuant to this contract shall be made as earned, in whole or in part, from available funds, encumbered for the purchase of the described services. The liability of the State, at any time, for such payments shall be limited to the amount remaining of such encumbered funds. 2. In the event this contract is terminated, final payment to the Local Agency may be withheld at the discretion of the State until completion of final audit. 3. Incorrect payments to the Local Agency due to omission, error, fraud or defalcation shall be recovered from the Local Agency by deduction from subsequent payment under this contract or other contracts between the State and Local Agency, or by the State as a debt due to the State. 4. Any costs incurred by the Local Agency that are not allowable under 49 C.F.R. 18 shall be reimbursed by the Local Agency, or offset against current obligations due by the State to the Local Agency, at the State’s election. Section 6. Option Letter Modification An option letter may be used to authorize the Local Agency to begin a phase without increasing total budgeted funds, increase or decrease the encumbrance amount as shown on Exhibit C, and/or transfer funds from one phase to another. Option letter modification is limited to the specific scenarios listed below. The option letter shall not be deemed valid until signed by the State Controller or an authorized delegate. A. Option to begin a phase and/or increase or decrease the encumbrance amount. The State may authorize the Local Agency to begin a phase that may include Design, Construction, Environmental, Utilities, ROW Incidentals or Miscellaneous (this does not apply to Acquisition/Relocation or Railroads) as detailed in Exhibit A and at the same terms and conditions stated in the original Agreement, with the total budgeted funds as shown on Exhibit C remaining the same. The State may increase or decrease the encumbrance amount for a particular phase by replacing the original funding exhibit (Exhibit C) in the original Agreement with an updated Exhibit C-1 (subsequent exhibits to Exhibit C-1 shall be labeled C-2, C-3, etc.). The State may exercise this option by providing a fully executed option to the Local Agency within thirty (30) days before the initial targeted start date of the phase, in a form substantially equivalent to Exhibit D. If the State exercises this option, the Agreement will be considered to include this option provision. OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 4 of 11 B. Option to transfer funds from one phase to another phase. The State may permit the Local Agency to transfer funds from one phase (Design, Construction, Environmental, Utilities, ROW Incidentals or Miscellaneous) to another as a result of changes to state, federal, and local match. The original funding exhibit (Exhibit C) in the original Agreement will be replaced with an updated Exhibit C- 1 (subsequent exhibits to Exhibit C-1 shall be labeled C-2, C-3, etc.) and attached to the option letter. The funds transferred from one phase to another are subject to the same terms and conditions stated in the original Agreement with the total budgeted funds remaining the same. The State may unilaterally exercise this option by providing a fully executed option to the Local Agency within thirty (30) days before the initial targeted start date of the phase, in a form substantially equivalent to Exhibit D. C. Option to do both Options A and B. The State may authorize the Local Agency to begin a phase as detailed in Exhibit A, and encumber and transfer funds from one phase to another. The original funding exhibit (Exhibit C) in the original Agreement will be replaced with an updated Exhibit C-1 (subsequent exhibits to Exhibit C-1 shall be labeled C-2, C-3, etc.) and attached to the option letter. The addition of a phase and encumbrance and transfer of funds are subject to the same terms and conditions stated in the original Agreement with the total budgeted funds remaining the same. The State may unilaterally exercise this option by providing a fully executed option to the Local Agency within thirty (30) days before the initial targeted start date of the phase, in a form substantially equivalent to Exhibit D. Section 7. State and Local Agency Commitments The Scope of Work in Exhibit A describes the Work to be performed and assigns responsibility of that Work to either the Local Agency or the State. The “Responsible Party” referred to in this contract means the Responsible Party as identified in the Scope of Work in Exhibit A. A. Design [if applicable] 1. If the Work includes preliminary design or final design (the “Construction Plans”), or design work sheets, or special provisions and estimates (collectively referred to as the “Plans”), the responsible party shall comply with the following requirements, as applicable: a. perform or provide the Plans, to the extent required by the nature of the Work. b. prepare final design (Construction Plans) in accord with the requirements of the latest edition of the American Association of State Highway Transportation Officials (AASHTO) manual or other standard, such as the Uniform Building Code, as approved by CDOT. c. prepare special provisions and estimates in accord with the State’s Roadway and Bridge Design Manuals and Standard Specifications for Road and Bridge Construction or Local Agency specifications if approved by CDOT. d. include details of any required detours in the Plans, in order to prevent any interference of the construction work and to protect the traveling public. e. stamp the Plans produced by a Colorado Registered Professional Engineer. f. provide final assembly of Plans and contract documents. g. be responsible for the Plans being accurate and complete. h. make no further changes in the Plans following the award of the construction contract except by agreement in writing between the parties. The Plans shall be considered final when approved and accepted by the parties hereto, and when final they shall be deemed incorporated herein. 2. If the Local Agency is the responsible party: a. The local agency shall comply with the requirements of the Americans With Disabilities Act (ADA), and applicable federal regulations and standards as contained in the document “ADA Accessibility Requirements in CDOT Transportation Projects”. b. It shall afford the State ample opportunity to review the Plans and make any changes in the Plans that are directed by the State to comply with State requirements. c. It may enter into a contract with a consultant to do all or any portion of the Plans and/or of construction administration. Provided, however, that if federal-aid funds are involved in the cost of such work to be done by a consultant, that consultant contract (and the performance/provision of the Plans under the contract) must comply with all applicable requirements of 23 CFR Part 172 and with any procedures implementing those requirements as provided by the State. If the Local Agency does enter into a contract with a consultant for the Work: OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 5 of 11 (1) it shall submit a certification that procurement of any design consultant contract complied with the requirements of 23 CFR 172.5(1) prior to entering into contract. The State shall either approve or deny such procurement. If denied, the Local Agency may not enter into the contract. (2) it shall ensure that all changes in the consultant contract have prior approval by the State. Such changes in the contract shall be by written supplement agreement. As soon as the contract with the consultant has been awarded by the Local Agency, one copy of the executed contract shall be submitted to the State. Any amendments to such contract shall also be submitted. (3) it shall require that all consultant billings under that contract shall comply with the State’s standardized billing format. Examples of the billing formats are available from the CDOT Agreements Office. (4) it (or its consultant) shall use the CDOT procedures described in Exhibit A to administer that design consultant subcontract, to comply with 23 CFR 172.5(b). (5) it may expedite any CDOT approval of its procurement process and/or consultant contract by submitting a letter to CDOT from the certifying Local Agency’s attorney/authorized representative certifying compliance with 23 CFR 172.5(b). (6) it shall ensure that its consultant contract complies with the requirements of 49 CFR 18.36(i) and contains the following language verbatim: (a) “The design work under this contract shall be compatible with the requirements of the contract between the Local Agency and the State (which is incorporated herein by this reference) for the design/construction of the project. The State is an intended third party beneficiary of this contract for that purpose.” (b) “Upon advertisement of the project work for construction, the consultant shall make available services as requested by the State to assist the State in the evaluation of construction and the resolution of construction problems that may arise during the construction of the project.” (c) “The consultant shall review the construction contractor’s shop drawings for conformance with the contract documents and compliance with the provisions of the State’s publication, Standard Specifications for Road and Bridge Construction, in connection with this work.” (d) The State, in its discretion, will review construction plans, special provisions and estimates and will cause the Local Agency to make changes therein that the State determines are necessary to assure compliance with State requirements. B. Construction [if applicable] 1. If the Work includes construction, the responsible party shall perform the construction in accordance with the approved design plans and/or administer the construction all in accord with the Scope of Work in Exhibit A. Such administration shall include project inspection and testing; approving sources of materials; performing required plant and shop inspections; documentation of contract payments, testing and inspection activities; preparing and approving pay estimates; preparing, approving and securing the funding for contract modification orders and minor contract revisions; processing contractor claims; construction supervision; and meeting the Quality Control requirements as described in the Scope of Work in Exhibit A. 2. The State shall have the authority to suspend the Work, wholly or in part, by giving written notice thereof to the Local Agency, due to the failure of the Local Agency or its contractor to correct project conditions which are unsafe for workers or for such periods as the State may deem necessary due to unsuitable weather, or for conditions considered unsuitable for the prosecution of the Work, or for any other condition or reason deemed by the State to be in the public interest. 3. If the Local Agency is the responsible party: a. it shall appoint a qualified professional engineer, licensed in the State of Colorado, as the Local Agency Project Engineer (LAPE), to perform that administration. The LAPE shall administer the project in accordance with this contract, the requirements of the construction contract and applicable State procedures. b. if bids are to be let for the construction of the project, it shall advertise the call for bids upon approval by the State and award the construction contract(s) to the low responsible bidder(s) upon approval by the State. (1) The Local Agency has the option to accept or reject the proposal of the apparent low bidder for work on which competitive bids have been received. The Local Agency must declare the acceptance or rejection within 3 working days after said bids are publicly opened. (2) By indicating its concurrence in such award, the Local Agency, acting by or through its duly authorized representatives, agrees to provide additional funds, subject to their availability and appropriation for that purpose, if required to complete the Work under this project if no additional OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 6 of 11 federal-aid funds will be made available for the project. This paragraph also applies to projects advertised and awarded by the State. c. If all or part of the construction work is to be accomplished by Local Agency personnel (i.e. by force account), rather than by a competitive bidding process, the Local Agency will ensure that all such force account work is accomplished in accordance with the pertinent State specifications and requirements with 23 CFR 635, Subpart B, Force Account Construction. (1) Such work will normally be based upon estimated quantities and firm unit prices agreed to between the Local Agency and the State in advance of the Work, as provided for in 23 CFR 635.204(c). Such agreed unit prices shall constitute a commitment as to the value of the Work to be performed. (2) An alternative to the above is that the Local Agency may agree to participate in the Work based on actual costs of labor, equipment rental, materials supplies and supervision necessary to complete the Work. Where actual costs are used, eligibility of cost items shall be evaluated for compliance with 48 CFR Part 31. (3) Rental rates for publicly owned equipment will be determined in accordance with the State’s Standard Specifications for Road and Bridge Construction § 109.04. (4) All force account work shall have prior approval of the State and shall not be initiated until the State has issued a written notice to proceed. C. State’s obligations 1. The State will perform a final project inspection prior to project acceptance as a Quality Control/Assurance activity. When all Work has been satisfactorily completed, the State will sign a final acceptance form. 2. Notwithstanding any consents or approvals given by the State for the Plans, the State will not be liable or responsible in any manner for the structural design, details or construction of any major structures that are designed by or are the responsibility of the Local Agency as identified in the Scope of Work in Exhibit A, within the Work of this contract. Section 8. ROW Acquisition and Relocation If the Project includes right of way, prior to this project being advertised for bids, the Responsible Party will certify in writing to the State that all right of way has been acquired in accordance with the applicable state and federal regulations, or that no additional right of way is required. Any acquisition/relocation activities must comply with: all applicable federal and state statutes and regulations, including but not limited to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended (P.L. 91-646) and the Uniform Relocation Assistance and Real Property Acquisition Policies for Federal and Federally Assisted Programs as amended (49 CFR Part 24); CDOT’s Right of Way Manual; and CDOT’s Policy and Procedural Directives. Allocation of Responsibilities are as follows: • Federal participation in right of way acquisition (3111 charges), relocation (3109 charges) activities, if any, and right of way incidentals (expenses incidental to acquisition/relocation of right of way – 3114 charges); • Federal participation in right of way acquisition (3111 charges), relocation (3109 charges) but no participation in incidental expenses (3114 charges); or • No federal participation in right of way acquisition (3111 charges) and relocation activities (3109 expenses). Regardless of the option selected above, the State retains oversight responsibilities. The Local Agency’s and the State’s responsibilities for each option is specifically set forth in CDOT’s Right of Way Manual. The manual is located at https://www.codot.gov/business/manuals/right-of-way-manual. If right of way is purchased for a state highway, including areas of influence of the state highway, the local agency shall immediately convey title to such right of way to CDOT after the local agency obtains title. Section 9. Utilities If necessary, the Responsible Party will be responsible for obtaining the proper clearance or approval from any utility company, which may become involved in this Project. Prior to this Project being advertised for bids, the Responsible Party will certify in writing to the State that all such clearances have been obtained. Section 10. Railroads In the event the Project involves modification of a railroad company’s facilities whereby the Work is to be accomplished by railroad company forces, the Responsible Party shall make timely application to the Public Utilities Commission requesting its order providing for the installation of the proposed improvements and not proceed with that part of the Work without compliance. The Responsible Party shall also establish contact with the railroad OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 7 of 11 company involved for the purpose of complying with applicable provisions of 23 CFR 646, subpart B, concerning federal-aid projects involving railroad facilities, including: A. Executing an agreement setting out what work is to be accomplished and the location(s) thereof, and that the costs of the improvement shall be eligible for federal participation. B. Obtaining the railroad’s detailed estimate of the cost of the Work. C. Establishing future maintenance responsibilities for the proposed installation. D. Proscribing future use or dispositions of the proposed improvements in the event of abandonment or elimination of a grade crossing. E. Establishing future repair and/or replacement responsibilities in the event of accidental destruction or damage to the installation. Section 11. Environmental Obligations The Local Agency shall perform all Work in accordance with the requirements of the current federal and state environmental regulations including the National Environmental Policy Act of 1969 (NEPA) as applicable. Section 12. Maintenance Obligations The Local Agency will maintain and operate the improvements constructed under this contract at its own cost and expense during their useful life, in a manner satisfactory to the State. The Local Agency will make proper provisions for such maintenance obligations each year. Such maintenance and operations shall be conducted in accordance with all applicable statutes, ordinances and regulations which define the Local Agency’s obligations to maintain such improvements. The State will make periodic inspections of the project to verify that such improvements are being adequately maintained. Section 13. Record Keeping The Local Agency shall maintain a complete file of all records, documents, communications, and other written materials, which pertain to the costs incurred under this contract. The Local Agency shall maintain such records for a period of three (3) years after the date of termination of this contract or final payment hereunder, whichever is later, or for such further period as may be necessary to resolve any matters which may be pending. The Local Agency shall make such materials available for inspection at all reasonable times and shall permit duly authorized agents and employees of the State to inspect the project and to inspect, review and audit the project records. Section 14. Termination Provisions This contract may be terminated as follows: A. Termination for Convenience. The State may terminate this contract at any time the State determines that the purposes of the distribution of moneys under the contract would no longer be served by completion of the project. The State shall effect such termination by giving written notice of termination to the Local Agency and specifying the effective date thereof, at least twenty (20) days before the effective date of such termination. B. Termination for Cause. If, through any cause, the Local Agency shall fail to fulfill, in a timely and proper manner, its obligations under this contract, or if the Local Agency shall violate any of the covenants, agreements, or stipulations of this contract, the State shall thereupon have the right to terminate this contract for cause by giving written notice to the Local Agency of its intent to terminate and at least ten (10) days opportunity to cure the default or show cause why termination is otherwise not appropriate. In the event of termination, all finished or unfinished documents, data, studies, surveys, drawings, maps, models, photographs and reports or other material prepared by the Local Agency under this contract shall, at the option of the State, become its property, and the Local Agency shall be entitled to receive just and equitable compensation for any services and supplies delivered and accepted. The Local Agency shall be obligated to return any payments advanced under the provisions of this contract. Notwithstanding the above, the Local Agency shall not be relieved of liability to the State for any damages sustained by the State by virtue of any breach of the contract by the Local Agency, and the State may withhold payment to the Local Agency for the purposes of mitigating its damages until such time as the exact amount of damages due to the State from the Local Agency is determined. If after such termination it is determined, for any reason, that the Local Agency was not in default or that the Local Agency’s action/inaction was excusable, such termination shall be treated as a termination for convenience, and the rights and obligations of the parties shall be the same as if the contract had been terminated for convenience, as described herein. OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 8 of 11 C. Termination Due to Loss of Funding. The parties hereto expressly recognize that the Local Agency is to be paid, reimbursed, or otherwise compensated with federal and/or State funds which are available to the State for the purposes of contracting for the Project provided for herein, and therefore, the Local Agency expressly understands and agrees that all its rights, demands and claims to compensation arising under this contract are contingent upon availability of such funds to the State. In the event that such funds or any part thereof are not available to the State, the State may immediately terminate or amend this contract. Section 15. Legal Authority The Local Agency warrants that it possesses the legal authority to enter into this contract and that it has taken all actions required by its procedures, by-laws, and/or applicable law to exercise that authority, and to lawfully authorize its undersigned signatory to execute this contract and to bind the Local Agency to its terms. The person(s) executing this contract on behalf of the Local Agency warrants that such person(s) has full authorization to execute this contract. Section 16. Representatives and Notice Each individual identified below is the principal representative of the designating Party. All notices required to be given hereunder shall be hand delivered with receipt required or sent by certified or registered mail to such Party’s principal representative at the address set forth below. In addition to but not in lieu of a hard-copy notice, notice also may be sent by e-mail to the e-mail addresses, if any, set forth below. Either Party may from time to time designate by written notice substitute addresses or persons to whom such notices shall be sent. Unless otherwise provided herein, all notices shall be effective upon receipt. If to State If to the Local Agency CDOT Region: 4 Town of Estes Park Dustin Robbins Trevor Wittwer Project Manager Civil Engineer 10601 10th Street 170 MacGregor Avenue Greeley, CO 80634 Estes Park, CO 80517 720-460-4722 970-577-3724 dustin.robbins@state.co.us twittwer@estes.org Section 17. Successors Except as herein otherwise provided, this contract shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Section 18. Third Party Beneficiaries It is expressly understood and agreed that the enforcement of the terms and conditions of this contract and all rights of action relating to such enforcement, shall be strictly reserved to the State and the Local Agency. Nothing contained in this contract shall give or allow any claim or right of action whatsoever by any other third person. It is the express intention of the State and the Local Agency that any such person or entity, other than the State or the Local Agency receiving services or benefits under this contract shall be deemed an incidental beneficiary only. Section 19. Governmental Immunity Notwithstanding any other provision of this contract to the contrary, no term or condition of this contract shall be construed or interpreted as a waiver, express or implied, of any of the immunities, rights, benefits, protection, or other provisions of the Colorado Governmental Immunity Act, § 24-10-101, et seq., C.R.S., as now or hereafter amended. The parties understand and agree that liability for claims for injuries to persons or property arising out of negligence of the State of Colorado, its departments, institutions, agencies, boards, officials and employees is controlled and limited by the provisions of § 24-10-101, et seq., C.R.S., as now or hereafter amended and the risk management statutes, §§ 24-30-1501, et seq., C.R.S., as now or hereafter amended. Section 20. Severability To the extent that this contract may be executed and performance of the obligations of the parties may be accomplished within the intent of the contract, the terms of this contract are severable, and should any term or provision hereof be declared invalid or become inoperative for any reason, such invalidity or failure shall not affect the validity of any other term or provision hereof. Section 21. Waiver OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 9 of 11 The waiver of any breach of a term, provision, or requirement of this contract shall not be construed or deemed as a waiver of any subsequent breach of such term, provision, or requirement, or of any other term, provision or requirement. Section 22. Entire Understanding This contract is intended as the complete integration of all understandings between the parties. No prior or contemporaneous addition, deletion, or other amendment hereto shall have any force or effect whatsoever, unless embodied herein by writing. No subsequent novation, renewal, addition, deletion, or other amendment hereto shall have any force or effect unless embodied in a writing executed and approved pursuant to the State Fiscal Rules. Section 23. Survival of Contract Terms Notwithstanding anything herein to the contrary, the parties understand and agree that all terms and conditions of this contract and the exhibits and attachments hereto which may require continued performance, compliance or effect beyond the termination date of the contract shall survive such termination date and shall be enforceable by the State as provided herein in the event of such failure to perform or comply by the Local Agency. Section 24. Modification and Amendment This contract is subject to such modifications as may be required by changes in federal or State law, or their implementing regulations. Any such required modification shall automatically be incorporated into and be part of this contract on the effective date of such change as if fully set forth herein. Except as provided above, no modification of this contract shall be effective unless agreed to in writing by both parties in an amendment to this contract that is properly executed and approved in accordance with applicable law. Section 25. Disputes Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement will be decided by the Chief Engineer of the Department of Transportation. The decision of the Chief Engineer will be final and conclusive unless, within 30 calendar days after the date of receipt of a copy of such written decision, the Local Agency mails or otherwise furnishes to the State a written appeal addressed to the Executive Director of the Department of Transportation. In connection with any appeal proceeding under this clause, the Local Agency shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Local Agency shall proceed diligently with the performance of the contract in accordance with the Chief Engineer’s decision. The decision of the Executive Director or his duly authorized representative for the determination of such appeals will be final and conclusive and serve as final agency action. This dispute clause does not preclude consideration of questions of law in connection with decisions provided for herein. Nothing in this contract, however, shall be construed as making final the decision of any administrative official, representative, or board on a question of law. Section 26. COLORADO SPECIAL PROVISIONS (COLORADO FISCAL RULE 3-3). These Special Provisions apply to all contracts. Contractor refers to Local Agency and Contract refers to Agreement. A. STATUTORY APPROVAL. §24-30-202(1), C.R.S. This Contract shall not be valid until it has been approved by the Colorado State Controller or designee. If this Contract is for a Major Information Technology Project, as defined in §24-37.5-102(19), then this Contract shall not be valid until it has been approved by the State’s Chief Information Officer or designee. B. FUND AVAILABILITY. §24-30-202(5.5), C.R.S., applicable Local Agency law, rule or regulation. Financial obligations of the Parties payable after the current State Fiscal Year or fiscal year are contingent upon funds for that purpose being appropriated, budgeted, and otherwise made available. C. GOVERNMENTAL IMMUNITY. Liability for claims for injuries to persons or property arising from the negligence of the Parties, its departments, boards, commissions committees, bureaus, offices, employees and officials shall be controlled and limited by the provisions of the Colorado Governmental Immunity Act, §24-10-101, et seq., C.R.S.; the Federal Tort Claims Act, 28 U.S.C. Pt. VI, Ch. 171 and 28 U.S.C. 1346(b), and the State’s risk management statutes, §§24-30-1501, et seq. C.R.S. No term or condition of this Contract shall be construed or interpreted OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 10 of 11 as a waiver, express or implied, of any of the immunities, rights, benefits, protections, or other provisions, contained in these statutes. D. INDEPENDENT CONTRACTOR Contractor shall perform its duties hereunder as an independent contractor and not as an employee. Neither Contractor nor any agent or employee of Contractor shall be deemed to be an agent or employee of the State. Contractor shall not have authorization, express or implied, to bind the State to any agreement, liability or understanding, except as expressly set forth herein. Contractor and its employees and agents are not entitled to unemployment insurance or workers compensation benefits through the State and the State shall not pay for or otherwise provide such coverage for Contractor or any of its agents or employees. Contractor shall pay when due all applicable employment taxes and income taxes and local head taxes incurred pursuant to this Contract. Contractor shall (i) provide and keep in force workers' compensation and unemployment compensation insurance in the amounts required by law, (ii) provide proof thereof when requested by the State, and (iii) be solely responsible for its acts and those of its employees and agents. E. COMPLIANCE WITH LAW. Contractor shall comply with all applicable federal and State laws, rules, and regulations in effect or hereafter established, including, without limitation, laws applicable to discrimination and unfair employment practices. F. CHOICE OF LAW, JURISDICTION, AND VENUE. Colorado law, and rules and regulations issued pursuant thereto, shall be applied in the interpretation, execution, and enforcement of this Contract. Any provision included or incorporated herein by reference which conflicts with said laws, rules, and regulations shall be null and void. All suits or actions related to this Contract shall be filed and proceedings held in the State of Colorado and exclusive venue shall be in the City and County of Denver. G. PROHIBITED TERMS. Any term included in this Contract that requires the Parties to indemnify or hold Contractor harmless; requires the Parties to agree to binding arbitration; limits Contractor’s liability for damages resulting from death, bodily injury, or damage to tangible property; or that conflicts with this provision in any way shall be void ab initio. Nothing in this Contract shall be construed as a waiver of any provision of §24-106-109 C.R.S. Any term included in this Contract that limits Contractor’s liability that is not void under this section shall apply only in excess of any insurance to be maintained under this Contract, and no insurance policy shall be interpreted as being subject to any limitations of liability of this Contract. H. SOFTWARE PIRACY PROHIBITION. State or other public funds payable under this Contract shall not be used for the acquisition, operation, or maintenance of computer software in violation of federal copyright laws or applicable licensing restrictions. Contractor hereby certifies and warrants that, during the term of this Contract and any extensions, Contractor has and shall maintain in place appropriate systems and controls to prevent such improper use of public funds. If the State determines that Contractor is in violation of this provision, the State may exercise any remedy available at law or in equity or under this Contract, including, without limitation, immediate termination of this Contract and any remedy consistent with federal copyright laws or applicable licensing restrictions. I. EMPLOYEE FINANCIAL INTEREST/CONFLICT OF INTEREST. §§24-18-201 and 24-50-507, C.R.S. The signatories aver that to their knowledge, no employee of the State has any personal or beneficial interest whatsoever in the service or property described in this Contract. Contractor has no interest and shall not acquire any interest, direct or indirect, that would conflict in any manner or degree with the performance of Contractor’s services and Contractor shall not employ any person having such known interests. THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 11 of 11 Section 27. SIGNATURE PAGE THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT * Persons signing for the Local Agency hereby swear and affirm that they are authorized to act on the Local Agency’s behalf and acknowledge that the State is relying on their representations to that effect. THE LOCAL AGENCY TOWN OF ESTES PARK Name: ______________________________________ (print name) Title: _______________________________________ (print title) ____________________________________________ *Signature Date: _________________________________________ STATE OF COLORADO Jared S. Polis Department of Transportation By___________________________________________ Keith Stefanik, P.E., Chief Engineer (For) Shoshana M. Lew, Executive Director Date: _________________________________________ 2nd Local Agency Signature if needed Name: ______________________________________ (print name) Title: _______________________________________ (print title) ____________________________________________ *Signature Date: _________________________________________ STATE OF COLORADO LEGAL REVIEW Philip J. Weiser, Attorney General By___________________________________________ Signature – Assistant Attorney General Date: _________________________________________ ALL AGREEMENTS REQUIRE APPROVAL BY THE STATE CONTROLLER CRS §24-30-202 requires the State Controller to approve all State Agreements. This Agreement is not valid until signed and dated below by the State Controller or delegate. The Local Agency is not authorized to begin performance until such time. If the Local Agency begins performing prior thereto, the State of Colorado is not obligated to pay the Local Agency for such performance or for any goods and/or services provided hereunder. STATE OF COLORADO STATE CONTROLLER Robert Jaros, CPA, MBA, JD By: ______________________________________ Colorado Department of Transportation Date: ______________________________________ OLA #: 331003318 Routing #: 24-HA4-XC-00036 Document Builder Generated Rev. 04/19/2021 Page 12 of 12 Section 27. SIGNATURE PAGE THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT * Persons signing for the Local Agency hereby swear and affirm that they are authorized to act on the Local Agency’s behalf and acknowledge that the State is relying on their representations to that effect. THE LOCAL AGENCY TOWN OF ESTES PARK Name: ______________________________________ (print name) Title: _______________________________________ (print title) ____________________________________________ *Signature Date: _________________________________________ STATE OF COLORADO Jared S. Polis Department of Transportation By___________________________________________ Keith Stefanik, P.E., Chief Engineer (For) Shoshana M. Lew, Executive Director Date: _________________________________________ STATE OF COLORADO LEGAL REVIEW Philip J. Weiser, Attorney General By___________________________________________ Signature – Assistant Attorney General Date: _________________________________________ ALL AGREEMENTS REQUIRE APPROVAL BY THE STATE CONTROLLER CRS §24-30-202 requires the State Controller to approve all State Agreements. This Agreement is not valid until signed and dated below by the State Controller or delegate. The Local Agency is not authorized to begin performance until such time. If the Local Agency begins performing prior thereto, the State of Colorado is not obligated to pay the Local Agency for such performance or for any goods and/or services provided hereunder. STATE OF COLORADO STATE CONTROLLER Robert Jaros, CPA, MBA, JD By: ______________________________________ Colorado Department of Transportation Date: ______________________________________ 2nd Local Agency Signature if needed APPROVED AS TO FORM: Name: ______________________________________ (print name) Title: _______________________________________ (print title) ____________________________________________ *Signature Date: _________________________________________ Town Attorney Dan Kramer August 6, 2024 Exhibit A - Page 1 of 1 EXHIBIT A SCOPE OF WORK Name of Project: Fall River Trail II Project Number: MTF M405-027 SubAccount #: 25483 The Colorado Department of Transportation (“CDOT”) will oversee the Town of Estes Park when the Town completes the Fall River Trail II project (hereinafter referred to as “this work”). CDOT and the Town of Estes Park believe it will be beneficial to perform this work because it will be a benefit to public safety. The Town has completed the necessary preliminary studies to implement this proposal. All work will conform to the MUTCD. This work will consist of a multimodal trail construction project. The design phase of this work is scheduled to begin during federal fiscal year 2024. The design phase will identify more exact requirements, qualities, and attributes for this work (hereinafter referred to as “the exact work”). The exact work shall be used to complete the construction phase of the project. The construction phase of the project is estimated to begin in federal fiscal year 2025 and shall finish as soon as reasonably possible. This work will conform to the parameters articulated in the Colorado Department of Transportation Standard Specifications for Road and Bridge Construction, AASHTO “A Policy on Geometric Design of Highways and Streets”, AASHTO “Roadside Design Guide”, and the CDOT Project Development Manual, CDOT M&S Standards, CDOT Design Guide, CDOT Construction Manual, Manual on Uniform Traffic Control Devices, Highway Capacity Manual, along with all applicable State and Federal guidelines. By accepting funds for this Scope of Work, Local Agency acknowledges, understands, and accepts the continuing responsibility for the safety of the traveling public after initial acceptance of the project. Local Agency is responsible for maintaining and operating the scope of work described in this Exhibit A constructed under this Agreement at its own cost and expense during its useful life. THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK EXHIBIT B LOCAL AGENCY RESOLUTION (IF APPLICABLE) Exhibit B - Page 1 of 1 State $ LA Work Exhibit C - Page 1 of 1 EXHIBIT C - FUNDING PROVISIONS Town of Estes - MTF M405-027 (25483) A. Cost of Work Estimate The Local Agency has estimated the total cost of the Work to be $1,918,076.00, which is to be funded as follows: 1. FUNDING a. State Funds (75% of MMOF Award) $1,438,557.00 b. Local Agency Funds (25% of MMOF Award) $479,519.00 ____________________________________________________________________________________ TOTAL FUNDS ALL SOURCES $1,918,076.00 ____________________________________________________________________________________ 2. ESTIMATED PAYMENT TO LOCAL AGENCY a. State Funds Budgeted $1,438,557.00 b. Less Estimated State Share of CDOT-Incurred Costs $0.00 ____________________________________________________________________________________ TOTAL ESTIMATED PAYMENT TO LOCAL AGENCY 75% $1,438,557.00 TOTAL ESTIMATED FUNDING BY LOCAL AGENCY 25% $479,519.00 TOTAL PROJECT ESTIMATED FUNDING 100% $1,918,076.00 ____________________________________________________________________________________ 3. FOR CDOT ENCUMBRANCE PURPOSES a. Total Encumbrance Amount (Only State funds are encumbered) $1,438,557.00 b. Less ROW Acquisition 3111 and/or ROW Relocation 3109 $0.00 ____________________________________________________________________________________ NET TO BE ENCUMBERED BY CDOT IS AS FOLLOWS $1,438,557.00 ____________________________________________________________________________________ Note: No funds are currently available. Design and Construction funds will become available after execution of an Option letter (Exhibit D) or formal Amendment. ____________________________________________________________________________________ WBS Element 25483.10.30 Performance Period Start*/End Date Design 3020 $0.00 N/A WBS Element 25483.20.10 Performance Period Start*/End Date Const. 3301 $0.00 N/A ____________________________________________________________________________________ *The Local Agency should not begin work until both of the following are in place: 1) the execution of the document encumbering funds for the respective phase; and 2) Local Agency receipt of the official Notice to Proceed. Any work performed before these two (2) milestones are achieved will not be reimbursable. B. Funding Ratios The funding ratio for the State funds for this Work is 75% State funds to 25% Local Agency funds, and this ratio applies only to the $1,918,076.00 that is eligible for State funding. All other costs are borne by the Local Agency at 100%. If the total cost of performance of the Work exceeds $1,918,076.00, and additional State funds are not available, the Local Agency shall pay all such excess costs. If the total cost of performance of the Work is less than $1,918,076.00, then the amounts of Local Agency and State funds will be decreased in accordance with the funding ratio described in A1. This applies to the entire scope of Work. C. Maximum Amount Payable The maximum amount payable to the Local Agency under this Agreement shall be $1,438,557.00. For CDOT accounting purposes, the State funds of $1,438,557.00 will be encumbered, but the Local Agency funds of $479,519.00 will NOT be encumbered. The total budget of this project is $1,918,076.00, unless this amount is increased by an executed amendment before any increased cost is incurred. The total cost of the Work is the best estimate available, based on the design data as approved at the time of execution of this Agreement, and any cost is subject to revisions agreed to by the parties prior to bid and award. The maximum amount payable will be reduced without amendment when the actual amount of the Local Agency’s awarded Agreement is less than the budgeted total of the State funds and the Local Agency funds. The maximum amount payable will be reduced through the execution of an Option Letter as described in Section 6 of this contract. This applies to the entire scope of Work. Exhibit D SAMPLE OPTION LETTER (This option has been created by the Office of the State Controller for CDOT use only) NOTE: This option is limited to the specific contract scenarios listed below AND may be used in place of exercising a formal amendment. Date: State Fiscal Year: Option Letter No. Option Letter CMS Routing # Option Letter OLA # Original Contract CMS # Original Contract # Vendor name: SUBJECT: Option to unilaterally authorize the Local Agency to begin a phase which may include Design, Construction, Environmental, Utilities, ROW incidentals or Miscellaneous ONLY (does not apply to Acquisition/Relocation or Railroads) and to update encumbrance amounts (a new Exhibit C must be attached with the option letter and shall be labeled C-1, future changes for this option shall be labeled as follows: C-2, C-3, C-4, etc.). Option to unilaterally transfer funds from one phase to another phase (a new Exhibit C must be attached with the option letter and shall be labeled C-1, future changes for this option shall be labeled as follows: C-2, C-3, C-4, etc.). Option to unilaterally do both A and B (a new Exhibit C must be attached with the option letter and shall be labeled C-1, future changes for this option shall be labeled as follows: C-2, C-3, C-4, etc.). Option to extend the term of this Agreement. REQUIRED PROVISIONS: Option A (Insert the following language for use with the Option A): In accordance with the terms of the original Agreement (insert CMS routing # of the original Agreement) between the State of Colorado, Department of Transportation and (insert the Local Agency’s name here), the State hereby exercises the option to authorize the Local Agency to begin a phase that will include (describe which phase will be added and include all that apply – Design, Construction, Environmental, Utilities, ROW incidentals or Miscellaneous) and to encumber previously budgeted funds for the phase based upon changes in funding availability and authorization. The encumbrance for (Design, Construction, Environmental, Utilities, ROW incidentals or Miscellaneous) is (insert dollars here). A new Exhibit C-1 is made part of the original Agreement and replaces Exhibit C. (The following is a NOTE only, please delete when using this option. Future changes for this option for Exhibit C shall be labeled as follows: C-2, C-3, C-4,etc.). Option B (Insert the following language for use with Option B): In accordance with the terms of the original Agreement (insert CMS # of the original Agreement) between the State of Colorado, Department of Transportation and (insert the Local Agency’s name here), the State hereby exercises the option to transfer funds from (describe phase from which funds will be moved) to (describe phase to which funds will be moved) based on variance in actual phase costs and original phase estimates. A new Exhibit C-1 is made part of the original Agreement and replaces Exhibit C. (The following is a NOTE only so please delete when using this option: future changes for this option for Exhibit C shall be labeled as follows: C 2, C-3, C-4, etc.). Exhibit D - Page 1 of 2 Option C (Insert the following language for use with Option C): In accordance with the terms of the original Agreement (insert CMS routing # of original Agreement) between the State of Colorado, Department of Transportation and (insert the Local Agency’s name here), the State hereby exercises the option to 1) release the Local Agency to begin a phase that will include (describe which phase will be added and include all that apply – Design, Construction, Environmental, Utilities, ROW incidentals or Miscellaneous); 2) to encumber funds for the phase based upon changes in funding availability and authorization; and 3) to transfer funds from (describe phase from which funds will be moved) to (describe phase to which funds will be moved) based on variance in actual phase costs and original phase estimates. A new Exhibit C-1 is made part of the original Agreement and replaces Exhibit C. (The following is a NOTE only so please delete when using this option: future changes for this option for Exhibit C shall be labeled as follows: C-2, C-3, C- 4, etc.). (The following language must be included on options A, B and C): The total encumbrance as a result of this option and all previous options and/or amendments is now (insert total encumbrance amount), as referenced in Exhibit (C-1, C-2, etc., as appropriate). The total budgeted funds to satisfy services/goods ordered under the Agreement remains the same: (indicate total budgeted funds) as referenced in Exhibit (C-1, C-2, etc., as appropriate) of the original Agreement. The effective date of this option letter is upon approval of the State Controller or delegate. APPROVALS: State of Colorado: Jared S. Polis, Governor By: Date: Executive Director, Colorado Department of Transportation ALL CONTRACTS MUST BE APPROVED BY THE STATE CONTROLLER CRS §24-30-202 requires the State Controller to approve all State Contracts. This Agreement is not valid until signed and dated below by the State Controller or delegate. Contractor is not authorized to begin performance until such time. If the Local Agency begins performing prior thereto, the State of Colorado is not obligated to pay the Local Agency for such performance or for any goods and/or services provided hereunder. State Controller Robert Jaros, CPA, MBA, JD By: Date: Exhibit D - Page 2 of 2 Exhibit E- Page 1 of 1 EXHIBIT E PII Certification Not applicable STATE OF COLORADO LOCAL AGENCY CERTIFICATION FOR ACCESS TO PII THROUGH A DATABASE OR AUTOMATED NETWORK Pursuant to § 24-74-105, C.R.S., I, _________________, on behalf of __________________________ (legal name of Local Agency) (the “Local Agency”), hereby certify under the penalty of perjury that the Local Agency has not and will not use or disclose any Personal Identifying Information, as defined by § 24-74-102(1), C.R.S., for the purpose of investigating for, participating in, cooperating with, or assisting Federal Immigration Enforcement, including the enforcement of civil immigration laws, and the Illegal Immigration and Immigrant Responsibility Act, which is codified at 8 U.S.C. §§ 1325 and 1326, unless required to do so to comply with Federal or State law, or to comply with a court-issued subpoena, warrant or order. I hereby represent and certify that I have full legal authority to execute this certification on behalf of the Local Agency. Signature: __________________________ Printed Name: __________________________ Title: __________________________ Date: ___________ N/A Public Works Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Trevor Wittwer, Civil Engineer Date: August 13, 2024 RE: Resolution 69-24 Approving Intergovernmental Agreement with CDOT for Transportation Alternatives Program for Fall River Trail Final Segment (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER______________ QUASI-JUDICIAL YES NO Objective: Public Works staff seek Town Board approval for this Intergovernmental Agreement (IGA) from the Colorado Department of Transportation (CDOT) for construction funds for the Fall River Trail project. Present Situation: The Town Board supported Public Works staff to submit for a CDOT grant application which was awarded: 1.Transportation Alternatives Program (TAP) is federal funds. Award amount: $2,300,000. Local cost share amount: $575,000. The Fall River Trail project is a high priority trail outlined in the Estes Valley Master Trails Plan. As such, Town staff have worked diligently to research grant opportunities and submit applications. This work will consist of multimodal trail construction along Fall River Road (US 34) starting at the current trail terminus east of Fall River Court. The proposed construction will follow US 34 west for approximately 0.70 miles, and connect to the existing trail section along Fish Hatchery Road. The design phase of this work was completed to a 90% phase in 2017 through a Federal Transit Administration Sarbanes Alternative Transportation in Parks and Public Lands Grant. Final 100% design efforts are currently underway and anticipated completion is early 2025, supported with Town funds. Following final design, the Town will solicit bids for construction. The construction phase of the project is estimated to begin in fall/winter 2025 and estimated completion for this trail segment will be spring 2026. Proposal: Town Board approval IGA will allow staff to proceed with final design and construction of this important trail project. This is an expensive project and its successful completion is possible with grant funds. Advantages: •Town staff strategically applied for these CDOT funds for this specific trail segment because it is on their highway system (US 34) and because this is a particularly challenging area because of the proposed trail alignment to the road and river bank. •These funds support completing a trail that will connect historic downtown Estes Park with Rocky Mountain National Park (RMNP). •When completed, this will be the first multimodal trail that connect with RMNP. •This project supports the Estes Valley Master Trails Plan. •This trail extension will provide added safety to residents and visitors that walk and bike this heavily-trafficked stretch of Fall River Road (US34). Disadvantages: •As most all grants, there is a required cost share; however, funds have been allocated for this project through the 1A Trail Expansion Funds. •Construction activity will be disruptive especially to motorists along Fall River Road; however, traffic control will be provided and construction will primarily be conducted during the slower months. Action Recommended: Staff recommends Town Board approval for this IGA for Fall River Trail construction support. Finance/Resource Impact: •TAP grant: $2,300,000 •Cost share: $575,000 is supported from 1A Trail Expansion Funds. Level of Public Interest Moderate. Sample Motion: I move for the approval/denial of this CDOT IGA for grant support of the Fall River Trail. Attachments: 1.Resolution 69-24 2. CDOT IGA RESOLUTION 69-24 APPROVING AN INTERGOVERNMENTAL AGREEMENT WITH THE COLORADO DEPARTMENT OF TRANSPORTATION FOR FISCAL YEAR 2025 TRANSPORTATION ALTERNATIVES PROGRAM GRANT FOR FALL RIVER TRAIL. WHEREAS, the Town Board desires to enter into the intergovernmental agreement referenced in the title of this resolution for the purpose of receiving FY 2025 grant funding for construction of the Fall River Trail Final Segment. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: The Board approves, and authorizes the Mayor or designee to sign the intergovernmental agreement referenced in the title of this resolution in substantially the form now before the Board. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK Mayor ATTEST: Town Clerk ATTACHMENT 1 OLA II: 331003362 Routing ii: 24-l lA4-XC-00070 STATE OF COLORADO INTERGOVERNMENTAL AGREEMENT Si2nature and Cover Pa2e State Agency Agreement Routing Number Depai1ment of Transportation 24-HA4-XC-00070 Local Agency Agreement Effective Date TOWN OF ESTES PARK The later of the effective date or May 14, 2024 Agreement Description Agreement Expiration Date Fall River Trail Final Segment May 13, 2034 Project# Region# Contract Writer Agreement Maximum Amount TAP M405-028 (25932) 4 TCH S2,875,000.00 THE PARTIES HERETO HA VE EXECUTED THIS AGREEMENT Each person signing lbis Agreement represents and warrants that he or she is duly authorized to execute this A reement and to bind the Par authorizin his or her signature. LOCAL AGENCY STATE OF COLORADO TOWN OF ESTES PARK Jared S. Polis, Governor By: ______________ _ *Signature Name:. ________________ _ \Prim Name) Title: -----------------(Pri111 Title) Date: SECOND LOCAL AGENCY SIGNATURE TOWN OF ESTES PARK (Print Name) Title: __ s_p _e_c _ia_l_C_o_u _n _se_l _________ _ (Print Title) Date: August 6, 2024 Department ofTranspo1tation Shoshana M. Lew, Executive Director Keith Stefanik, P.E., Chief Engineer Date: ----------- LEGAL REVIEW Philip J. Weiser, Attorney General Assistant Attorney General By: (Print Name and Title) Date: __________ _ Jn accordance with §24-30-202 C.R.S., this Agreemem is not valid until signed and dated below by tbe State Controller or an authorized delegate. Document Builder Generated Rev. 05/24/2022 ST ATE CONTROLLER Robert Jaros, CPA, MBA, JD By: _______________ _ Department of Tr ansportation Effective Date: ATTACHMENT 2 OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 2 of 29 TABLE OF CONTENTS 1. PARTIES ................................................................................................................................................. 2 2. TERM AND EFFECTIVE DATE ........................................................................................................... 2 3. AUTHORITY .......................................................................................................................................... 3 4. PURPOSE ................................................................................................................................................ 4 5. DEFINITIONS ........................................................................................................................................ 4 6. SCOPE OF WORK ................................................................................................................................. 7 7. PAYMENTS .......................................................................................................................................... 11 8. REPORTING - NOTIFICATION ......................................................................................................... 15 9. LOCAL AGENCY RECORDS ............................................................................................................. 16 10. CONFIDENTIAL INFORMATION-STATE RECORDS .................................................................... 17 11. CONFLICTS OF INTEREST ................................................................................................................ 18 12. INSURANCE ........................................................................................................................................ 18 13. BREACH ............................................................................................................................................... 20 14. REMEDIES ........................................................................................................................................... 21 15. DISPUTE RESOLUTION ..................................................................................................................... 22 16. NOTICES AND REPRESENTATIVES ............................................................................................... 23 17. RIGHTS IN WORK PRODUCT AND OTHER INFORMATION ...................................................... 23 18. GOVERNMENTAL IMMUNITY ........................................................................................................ 24 19. STATEWIDE CONTRACT MANAGEMENT SYSTEM .................................................................... 24 20. GENERAL PROVISIONS .................................................................................................................... 25 21. COLORADO SPECIAL PROVISIONS (COLORADO FISCAL RULE 3-3) ..................................... 27 22. FEDERAL REQUIREMENTS ............................................................................................................. 29 23. DISADVANTAGED BUSINESS ENTERPRISE (DBE) ..................................................................... 29 EXHIBIT A, SCOPE OF WORK EXHIBIT B, SAMPLE OPTION LETTER EXHIBIT C, FUNDING PROVISIONS (Budget) EXHIBIT D, LOCAL AGENCY RESOLUTION EXHIBIT E, LOCAL AGENCY AGREEMENT ADMINISTRATION CHECKLIST EXHIBIT F, CERTIFICATION FOR FEDERAL-AID AGREEMENTS EXHIBIT G, DISADVANTAGED BUSINESS ENTERPRISE EXHIBIT H, LOCAL AGENCY PROCEDURES FOR CONSULTANT SERVICES EXHIBIT I, FEDERAL-AID AGREEMENT PROVISIONS FOR CONSTRUCTION AGREEMENTS EXHIBIT J, ADDITIONAL FEDERAL REQUIREMENTS EXHIBIT K, FFATA SUPPLEMENTAL FEDERAL PROVISIONS EXHIBIT L, SAMPLE SUBRECIPIENT MONITORING AND RISK ASSESSMENT FORM EXHIBIT M, OMB UNIFORM GUIDANCE FOR FEDERAL AWARDS EXHIBIT N, FEDERAL TREASURY PROVISIONS EXHIBIT O, AGREEMENT WITH SUBRECIPIENT OF FEDERAL RECOVERY FUNDS EXHIBIT P, SLFRF SUBRECIPIENT QUARTERLY REPORT EXHIBIT Q, SLFRF REPORTING MODIFICATION FORM EXHIBIT R, APPLICABLE FEDERAL AWARDS EXHIBIT S, PII CERTIFICATION EXHIBIT T, CHECKLIST OF REQUIRED EXHIBITS DEPENDENT ON FUNDING SOURCE 1. PARTIES This Agreement is entered into by and between Local Agency named on the Signature and Cover Page for this Agreement (“Local Agency”), and the STATE OF COLORADO acting by and through the State agency named on the Signature and Cover Page for this Agreement (the “State” or “CDOT”). Local Agency and the State agree to the terms and conditions in this Agreement. 2. TERM AND EFFECTIVE DATE A. Effective Date OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 3 of 29 This Agreement shall not be valid or enforceable until the Effective Date, and Agreement Funds shall be expended within the dates shown in Exhibit C for each respective phase (“Phase Performance Period(s)”). The State shall not be bound by any provision of this Agreement before the Effective Date, and shall have no obligation to pay Local Agency for any Work performed or expense incurred before 1) the Effective Date of this original Agreement; except as described in §7.D; 2) before the encumbering document for the respective phase and the official Notice to Proceed for the respective phase; or 3) after the Final Phase Performance End Date, as shown in Exhibit C. Additionally, the State shall have no obligation to pay Local Agency for any Work performed or expense incurred after the Agreement Expiration Date or after required billing deadline specified in §7.B.i.e., or the expiration of “Special Funding” if applicable, whichever is sooner. The State’s obligation to pay Agreement Funds exclusive of Special Funding will continue until the Agreement Expiration Date. If Agreement Funds expire before the Agreement Expiration Date, then no payments will be made after expiration of Agreement Funds. B. Initial Term and Extension The Parties’ respective performances under this Agreement shall commence on the Agreement Effective Date shown on the Signature and Cover Page for this Agreement and shall terminate on May 13, 2034 as shown on the Signature and Cover Page for this Agreement, unless sooner terminated or further extended in accordance with the terms of this Agreement. Upon request of Local Agency, the State may, in its sole discretion, extend the term of this Agreement by Option Letter pursuant §7.E.iv. If the Work will be performed in multiple phases, the period of performance start and end date of each phase is detailed under the Project Schedule in Exhibit C. C. Early Termination in the Public Interest The State is entering into this Agreement to serve the public interest of the State of Colorado as determined by its Governor, General Assembly, or Courts. If this Agreement ceases to further the public interest of the State, and this ARPA Award is not appropriated, or otherwise become unavailable to fund this ARPA Award the State, in its discretion, may terminate this Agreement in whole or in part. This subsection shall not apply to a termination of this Agreement by the State for breach by Local Agency, which shall be governed by §14.A.i. i. Method and Content The State shall notify Local Agency by providing written notice to Local Agency of the termination and be in accordance with §16. The notice shall specify the effective date of the termination and whether it affects all or a portion of this Agreement. ii. Obligations and Rights Upon receipt of a termination notice for termination in the public interest, Local Agency shall be subject to §14.A.i.a iii. Payments If the State terminates this Agreement in the public interest, the State shall pay Local Agency an amount equal to the percentage of the total reimbursement payable under this Agreement that corresponds to the percentage of Work satisfactorily completed and accepted, as determined by the State, less payments previously made. Additionally, if this Agreement is less than 60% completed, as determined by the State, the State may reimburse Local Agency for a portion of actual out-of-pocket expenses, not otherwise reimbursed under this Agreement, incurred by Local Agency which are directly attributable to the uncompleted portion of Local Agency’s obligations, provided that the sum of any and all reimbursement shall not exceed the maximum amount payable to Local Agency hereunder. This subsection shall not apply to a termination of this ARPA Award by the State for breach by Local Agency. D. Local Agency Termination Under Federal Requirements Local Agency may request termination of the ARPA Award by sending notice to the State, which includes the effective date of the termination. If this ARPA Award is terminated in this manner, then Local Agency shall return any advanced payments made for work that will not be performed prior to the effective date of the termination. 3. AUTHORITY OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 4 of 29 Authority to enter into this Agreement exists in the law as follows: A. Federal Authority Pursuant to Title I, Subtitle A, of the “Fixing America’s Surface Transportation Act” (FAST Act) of 2015, and to applicable provisions of Title 23 of the United States Code and implementing regulations at Title 23 of the Code of Federal Regulations, as may be amended, (collectively referred to hereinafter as the “Federal Provisions”), certain federal funds have been and are expected to continue to be allocated for transportation projects requested by Local Agency and eligible under the Surface Transportation Improvement Program that has been proposed by the State and approved by the Federal Highway Administration (“FHWA”). Pursuant to Title VI of the Social Security Act, Section 602 of the “Coronavirus State and Local Fiscal Recovery Funds”, a part of the American Rescue Plan, provides state, local and Tribal governments with the resources needed to respond to the pandemic and its economic effects and to build a stronger, more equitable economy during the recovery. B. State Authority Pursuant to CRS §43-1-223 and to applicable portions of the Federal Provisions, the State is responsible for the general administration and supervision of performance of projects in the Program, including the administration of federal funds for a Program project performed by a Local Agency under a contract with the State. This Agreement is executed under the authority of CRS §§29-1-203, 43-1-110; 43-1-116, 43-2- 101(4)(c) and 43-2-104.5. 4. PURPOSE The purpose of this Agreement is to disburse Federal funds to the Local Agency pursuant to CDOT’s Stewardship Agreement with the FHWA and/or USDT as shown in Exhibit C. 5. DEFINITIONS The following terms shall be construed and interpreted as follows: A. “Agreement” means this agreement, including all attached Exhibits, all documents incorporated by reference, all referenced statutes, rules and cited authorities, and any future modifications thereto. B. “Agreement Funds” means the funds that have been appropriated, designated, encumbered, or otherwise made available for payment by the State under this Agreement. C. “ARPA” means American Rescue Plan Act, funded by the US Department of the Treasury (“USDT”). See “SLFRF” below. D. “Award” means an award by a Recipient to a Subrecipient funded in whole or in part by a Federal Award. The terms and conditions of the Federal Award flow down to the Award unless the terms and conditions of the Federal Award specifically indicate otherwise. E. “Budget” means the budget for the Work described in Exhibit C. F. “Business Day” means any day in which the State is open and conducting business, but shall not include Saturday, Sunday or any day on which the State observes one of the holidays listed in §24-11-101(1) C.R.S.. G. “Chief Procurement Officer” means the individual to whom the Executive Director has delegated his or her authority pursuant to §24-102-202 to procure or supervise the procurement of all supplies and services needed by the State. H. “CJI” means criminal justice information collected by criminal justice agencies needed for the performance of their authorized functions, including, without limitation, all information defined as criminal justice information by the U.S. Department of Justice, Federal Bureau of Investigation, Criminal Justice Information Services Security Policy, as amended and all Criminal Justice Records as defined under §24- 72-302, C.R.S. I. “Consultant” means a professional engineer or designer hired by Local Agency to design the Work Product. J. “Contractor” means the general construction contractor hired by Local Agency to construct the Work. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 5 of 29 K. “CORA” means the Colorado Open Records Act, §§24-72-200.1 et. seq., C.R.S. L. “Effective Date” means the date on which this Agreement is approved and signed by the Colorado State Controller or designee, as shown on the Signature and Cover Page for this Agreement. M. “Evaluation” means the process of examining Local Agency’s Work and rating it based on criteria established in §6, Exhibit A and Exhibit E. N. “Exhibits” means the following exhibits attached to this Agreement: i. Exhibit A, Scope of Work. ii. Exhibit B, Sample Option Letter. iii. Exhibit C, Funding Provisions iv. Exhibit D, Local Agency Resolution v. Exhibit E, Local Agency Contract Administration Checklist vi. Exhibit F, Certification for Federal-Aid Contracts vii. Exhibit G, Disadvantaged Business Enterprise viii. Exhibit H, Local Agency Procedures for Consultant Services ix. Exhibit I, Federal-Aid Contract Provisions for Construction Contracts x. Exhibit J, Additional Federal Requirements xi. Exhibit K, The Federal Funding Accountability and Transparency Act of 2006 (FFATA) Supplemental Federal Provisions xii. Exhibit L, Sample Sub-Recipient Monitoring and Risk Assessment Form xiii. Exhibit M, Supplemental Provisions for Federal Awards Subject to The Office of Management and Budget Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”) xiv. Exhibit N, Federal Treasury Provisions xv. Exhibit O, Agreement with Subrecipient of Federal Recovery Funds xvi. Exhibit P, SLFRF Subrecipient Quarterly Report xvii. Exhibit Q, SLFRF Reporting Modification Form xviii. Exhibit R, Applicable Federal Awards xix. Exhibit S, PII Certification xx. Exhibit T, Checklist of Required Exhibits Dependent on Funding Source O. “Expiration Date” means the date on which this Agreement expires, as shown on the Signature and Cover Page for this Agreement. P. “Extension Term” means the period of time by which the ARPA Expiration Date is extended by the State through delivery of an updated ARPA Letter. Q. “Federal Award” means an award of Federal financial assistance or a cost-reimbursement contract under the Federal Acquisition Requirements by a Federal Awarding Agency to a Recipient. “Federal Award” also means an agreement setting forth the terms and conditions of the Federal Award. The term does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. R. “Federal Awarding Agency” means a Federal agency providing a Federal Award to a Recipient. The US Department of the Treasury is the Federal Awarding Agency for the Federal Award, which may be the subject of this Agreement. S. “FHWA” means the Federal Highway Administration, which is one of the twelve administrations under the Office of the Secretary of Transportation at the U.S. Department of Transportation. FHWA provides stewardship over the construction, maintenance and preservation of the Nation’s highways and tunnels. FHWA is the Federal Awarding Agency for the Federal Award which is the subject of this Agreement. T. “Goods” means any movable material acquired, produced, or delivered by Local Agency as set forth in this Agreement and shall include any movable material acquired, produced, or delivered by Local Agency in connection with the Services. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 6 of 29 U. “Incident” means any accidental or deliberate event that results in or constitutes an imminent threat of the unauthorized access or disclosure of State Confidential Information or of the unauthorized modification, disruption, or destruction of any State Records. V. “Initial Term” means the time period defined in §2.B. W. “Local Funds” means the funds provided by the Local Agency as their obligated contribution to the federal and/or State Awards to receive the federal and/or State funding. X. “Notice to Proceed” means the letter issued by the State to the Local Agency stating the date the Local Agency can begin work subject to the conditions of this Agreement. Y. “OMB” means the Executive Office of the President, Office of Management and Budget. Z. “Oversight” means the term as it is defined in the Stewardship Agreement between CDOT and the FHWA. AA. “Party” means the State or Local Agency, and “Parties” means both the State and Local Agency. BB. “PCI” means payment card information including any data related to credit card holders’ names, credit card numbers, or the other credit card information as may be protected by state or federal law. CC. “PHI” means any protected health information, including, without limitation any information whether oral or recorded in any form or medium: (i) that relates to the past, present or future physical or mental condition of an individual; the provision of health care to an individual; or the past, present or future payment for the provision of health care to an individual; and (ii) that identifies the individual or with respect to which there is a reasonable basis to believe the information can be used to identify the individual. PHI includes, but is not limited to, any information defined as Individually Identifiable Health Information by the federal Health Insurance Portability and Accountability Act. DD. “PII” means personally identifiable information including, without limitation, any information maintained by the State about an individual that can be used to distinguish or trace an individual‘s identity, such as name, social security number, date and place of birth, mother‘s maiden name, or biometric records; and any other information that is linked or linkable to an individual, such as medical, educational, financial, and employment information. PII includes, but is not limited to, all information defined as personally identifiable information in §24-72-501 C.R.S. “PII” shall also mean “personal identifying information” as set forth at § 24-74-102, et. seq., C.R.S. EE. “Recipient” means the Colorado Department of Transportation (CDOT) for this Federal Award. FF. “Services” means the services to be performed by Local Agency as set forth in this Agreement and shall include any services to be rendered by Local Agency in connection with the Goods. GG. “SLFRF” means State and Local Fiscal Recovery Funds, provided by ARPA, funded by the US Treasury Department. HH. “Special Funding” means an award by Federal agency or the State which may include but is not limited to one or a combination of Multimodal Transportation & Mitigation Options Funding, Revitalizing Main Streets, Safer Main Streets, Stimulus Funds, Coronavirus Response and Relief Supplemental Funds, ARPA, SLFRF, or COVID Relief. II. “State Confidential Information” means any and all State Records not subject to disclosure under CORA. State Confidential Information shall include, but is not limited to, PII and State personnel records not subject to disclosure under CORA. JJ. “State Fiscal Rules” means the fiscal rules promulgated by the Colorado State Controller pursuant to §24- 30-202(13)(a). KK. “State Fiscal Year” means a 12-month period beginning on July 1 of each calendar year and ending on June 30 of the following calendar year. If a single calendar year follows the term, then it means the State Fiscal Year ending in that calendar year. LL. “State Purchasing Director” means the position described in the Colorado Procurement Code and its implementing regulations. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 7 of 29 MM. “State Records” means any and all State data, information, and records, regardless of physical form, including, but not limited to, information subject to disclosure under CORA. NN. “Sub-Award” means this Award by the State to Local Agency funded in whole or in part by a Federal Award. The terms and conditions of the Federal Award flow down to this Sub-Award unless the terms and conditions of the Federal Award specifically indicate otherwise. OO. “Subcontractor” means third parties, if any, engaged by Local Agency to aid in performance of the Work. PP. “Subrecipient” means a non-Federal entity that receives a sub-award from a Recipient to carry out part of a Federal program but does not include an individual that is a beneficiary of such program. A Subrecipient may also be a recipient of other Federal Awards directly from a Federal Awarding Agency. QQ. “Tax Information” means Federal and State of Colorado tax information including, without limitation, Federal and State tax returns, return information, and such other tax-related information as may be protected by Federal and State law and regulation. Tax Information includes but is not limited to all information defined as Federal tax Information in Internal Revenue Service Publication 1075. RR. “Uniform Guidance” means the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, which supersedes requirements from OMB Circulars A-21, A-87, A-110, A-122, A-89, A-102, and A-133, and the guidance in Circular A-50 on Single Audit Act follow-up. SS. “USDT” The United States Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States where it serves as an executive department. The USDT funds ARPA. TT. “Work” means the delivery of the Goods and performance of the Services in compliance with CDOT’s Local Agency Manual described in this Agreement. UU. “Work Product” means the tangible and intangible results of the Work, whether finished or unfinished, including drafts. Work Product includes, but is not limited to, documents, text, software (including source code), research, reports, proposals, specifications, plans, notes, studies, data, images, photographs, negatives, pictures, drawings, designs, models, surveys, maps, materials, ideas, concepts, know-how, and any other results of the Work. “Work Product” does not include any material that was developed prior to the Effective Date that is used, without modification, in the performance of the Work. Any other term used in this Agreement that is defined in an Exhibit shall be construed and interpreted as defined in that Exhibit. 6. SCOPE OF WORK Local Agency shall complete the Work as described in this Agreement and in accordance with the provisions of Exhibit A, and the Local Agency Manual. The State shall have no liability to compensate Local Agency for the delivery of any Goods or the performance of any Services that are not specifically set forth in this Agreement. Work may be divided into multiple phases that have separate periods of performance. The State may not compensate for Work that Local Agency performs outside of its designated phase performance period. The performance period of phases, including, but not limited to Design, Construction, Right of Way, Utilities, or Environment phases, are identified in Exhibit C. The State may unilaterally modify Exhibit C from time to time, at its sole discretion, to extend the Agreement Expiration Date and/or to extend the period of performance for a phase of Work authorized under this Agreement. To exercise these options to extend the Agreement Expiration Date and/or to update the phase performance period extension option, the State will provide written notice to Local Agency in a form substantially equivalent to Exhibit B. The State’s unilateral extension of the Agreement Expiration Date and/or the phase performance periods will not amend or alter in any way the funding provisions or any other terms specified in this Agreement, notwithstanding the options listed under §7.E A. Local Agency Commitments i. Design If the Work includes preliminary design, final design, design work sheets, or special provisions and estimates (collectively referred to as the “Plans”), Local Agency shall ensure that it and its Contractors comply with and are responsible for satisfying the following requirements: OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 8 of 29 a. Perform or provide the Plans to the extent required by the nature of the Work. b. Prepare final design in accordance with the requirements of the latest edition of the American Association of State Highway Transportation Officials (AASHTO) manual or other standard, such as the Uniform Building Code, as approved by the State. c. Prepare provisions and estimates in accordance with the most current version of the State’s Roadway and Bridge Design Manuals and Standard Specifications for Road and Bridge Construction or Local Agency specifications if approved by the State. d. Include details of any required detours in the Plans in order to prevent any interference of the construction Work and to protect the traveling public. e. Stamp the Plans as produced by a Colorado registered professional engineer. f. Provide final assembly of Plans and all other necessary documents. g. Ensure the Plans are accurate and complete. h. Make no further changes in the Plans following the award of the construction contract to Contractor unless agreed to in writing by the Parties. The Plans shall be considered final when approved in writing by CDOT, and when final, they will be deemed incorporated herein. ii. Local Agency Work a. Local Agency shall comply with the requirements of the Americans With Disabilities Act (ADA) 42 U.S.C. § 12101, et. seq., and applicable federal regulations and standards as contained in the document “ADA Accessibility Requirements in CDOT Transportation Projects”. b. Local Agency shall afford the State ample opportunity to review the Plans and shall make any changes in the Plans that are directed by the State to comply with FHWA requirements. c. Local Agency may enter into a contract with a Consultant to perform all or any portion of the Plans and/or construction administration. Provided, however, if federal-aid funds are involved in the cost of such Work to be done by such Consultant, such Consultant contract (and the performance provision of the Plans under the contract) must comply with all applicable requirements of 23 C.F.R. Part 172 and with any procedures implementing those requirements as provided by the State, including those in Exhibit H. If Local Agency enters into a contract with a Consultant for the Work: 1) Local Agency shall submit a certification that procurement of any Consultant contract complies with the requirements of 23 C.F.R. 172.5(1) prior to entering into such Consultant contract, subject to the State’s approval. If not approved by the State, Local Agency shall not enter into such Consultant contract. 2) Local Agency shall ensure that all changes in the Consultant contract have prior approval by the State and FHWA and that they are in writing. Immediately after the Consultant contract has been awarded, one copy of the executed Consultant contract and any amendments shall be submitted to the State. 3) Local Agency shall require that all billings under the Consultant contract comply with the State’s standardized billing format. Examples of the billing formats are available from the CDOT Agreements Office. 4) Local Agency (and any Consultant) shall comply with 23 C.F.R. 172.5(b) and (d) and use the CDOT procedures described in Exhibit H to administer the Consultant contract. 5) Local Agency may expedite any CDOT approval of its procurement process and/or Consultant contract by submitting a letter to CDOT from Local Agency’s attorney/authorized representative certifying compliance with Exhibit H and 23 C.F.R. 172.5(b)and (d). 6) Local Agency shall ensure that the Consultant contract complies with the requirements of 49 CFR 18.36(i) and contains the following language verbatim: (a) The design work under this Agreement shall be compatible with the requirements of the contract between Local Agency and the State (which is incorporated herein by this OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 9 of 29 reference) for the design/construction of the project. The State is an intended third-party beneficiary of this agreement for that purpose. (b) Upon advertisement of the project work for construction, the consultant shall make available services as requested by the State to assist the State in the evaluation of construction and the resolution of construction problems that may arise during the construction of the project. (c) The consultant shall review the construction Contractor’s shop drawings for conformance with the contract documents and compliance with the provisions of the State’s publication, Standard Specifications for Road and Bridge Construction, in connection with this work. (d) The State, in its sole discretion, may review construction plans, special provisions and estimates and may require Local Agency to make such changes therein as the State determines necessary to comply with State and FHWA requirements. iii. Construction If the Work includes construction, Local Agency shall perform the construction in accordance with the approved design plans and/or administer the construction in accordance with Exhibit E. Such administration shall include Work inspection and testing; approving sources of materials; performing required plant and shop inspections; documentation of contract payments, testing and inspection activities; preparing and approving pay estimates; preparing, approving and securing the funding for contract modification orders and minor contract revisions; processing construction Contractor claims; construction supervision; and meeting the quality control requirements of the FHWA/CDOT Stewardship Agreement, as described in Exhibit E. a. The State may, after providing written notice of the reason for the suspension to Local Agency, suspend the Work, wholly or in part, due to the failure of Local Agency or its Contractor to correct conditions which are unsafe for workers or for such periods as the State may deem necessary due to unsuitable weather, or for conditions considered unsuitable for the prosecution of the Work, or for any other condition or reason deemed by the State to be in the public interest. b. Local Agency shall be responsible for the following: 1) Appointing a qualified professional engineer, licensed in the State of Colorado, as Local Agency Project Engineer (LAPE), to perform engineering administration. The LAPE shall administer the Work in accordance with this Agreement, the requirements of the construction contract and applicable State procedures, as defined in the CDOT Local Agency Manual (https://www.codot.gov/business/designsupport/bulletins_manuals/2006-local-agency- manual). 2) For the construction Services, advertising the call for bids, following its approval by the State, and awarding the construction contract(s) to the lowest responsible bidder(s). (a) All Local Agency’s advertising and bid awards pursuant to this Agreement shall comply with applicable requirements of 23 U.S.C. §112 and 23 C.F.R. Parts 633 and 635 and C.R.S. § 24-92-101 et seq. Those requirements include, without limitation, that Local Agency and its Contractor(s) incorporate Form 1273 (Exhibit I) in its entirety, verbatim, into any subcontract(s) for Services as terms and conditions thereof, as required by 23 C.F.R. 633.102(e). (b) Local Agency may accept or reject the proposal of the apparent low bidder for Work on which competitive bids have been received. Local Agency must accept or reject such bids within three (3) working days after they are publicly opened. (c) If Local Agency accepts bids and makes awards that exceed the amount of available Agreement Funds, Local Agency shall provide the additional funds necessary to complete the Work or not award such bids. (d) The requirements of §6.A.iii.b.2 also apply to any advertising and bid awards made by the State. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 10 of 29 (e) The State (and in some cases FHWA) must approve in advance all Force Account Construction, and Local Agency shall not initiate any such Services until the State issues a written Notice to Proceed. iv. Right of Way (ROW) and Acquisition/Relocation a. If Local Agency purchases a ROW for a State highway, including areas of influence, Local Agency shall convey the ROW to CDOT promptly upon the completion of the project/construction. b. Any acquisition/relocation activities shall comply with all applicable federal and State statutes and regulations, including but not limited to, the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, the Uniform Relocation Assistance and Real Property Acquisition Policies for Federal and Federally Assisted Programs, as amended (49 C.F.R. Part 24), CDOT’s Right of Way Manual, and CDOT’s Policy and Procedural Directives. c. The Parties’ respective responsibilities for ensuring compliance with acquisition, relocation and incidentals depend on the level of federal participation as detailed in CDOT’s Right of Way Manual (located at http://www.codot.gov/business/manuals/right-of-way); however, the State always retains oversight responsibilities. d. The Parties’ respective responsibilities at each level of federal participation in CDOT’s Right of Way Manual, and the State’s reimbursement of Local Agency costs will be determined pursuant the following categories: 1) Right of way acquisition (3111) for federal participation and non-participation; 2) Relocation activities, if applicable (3109); 3) Right of way incidentals, if applicable (expenses incidental to acquisition/relocation of right of way – 3114). v. Utilities If necessary, Local Agency shall be responsible for obtaining the proper clearance or approval from any utility company that may become involved in the Work. Prior to the Work being advertised for bids, Local Agency shall certify in writing to the State that all such clearances have been obtained. vi. Railroads If the Work involves modification of a railroad company’s facilities and such modification will be accomplished by the railroad company, Local Agency shall make timely application to the Public Utilities Commission (“PUC”) requesting its order providing for the installation of the proposed improvements. Local Agency shall not proceed with that part of the Work before obtaining the PUC’s order. Local Agency shall also establish contact with the railroad company involved for the purpose of complying with applicable provisions of 23 C.F.R. 646, subpart B, concerning federal-aid projects involving railroad facilities, and: a. Execute an agreement with the railroad company setting out what work is to be accomplished and the location(s) thereof, and which costs shall be eligible for federal participation. b. Obtain the railroad’s detailed estimate of the cost of the Work. c. Establish future maintenance responsibilities for the proposed installation. d. Proscribe in the agreement the future use or dispositions of the proposed improvements in the event of abandonment or elimination of a grade crossing. e. Establish future repair and/or replacement responsibilities, as between the railroad company and the Local Agency, in the event of accidental destruction or damage to the installation. vii. Environmental Obligations Local Agency shall perform all Work in accordance with the requirements of current federal and State environmental regulations, including the National Environmental Policy Act of 1969 (NEPA) as applicable. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 11 of 29 viii. Maintenance Obligations Local Agency shall maintain and operate the Work constructed under this Agreement at its own cost and expense during their useful life, in a manner satisfactory to the State and FHWA. Local Agency shall conduct such maintenance and operations in accordance with all applicable statutes, ordinances, and regulations pertaining to maintaining such improvements. The State and FHWA may make periodic inspections to verify that such improvements are being adequately maintained. ix. Monitoring Obligations Local Agency shall respond in a timely manner to and participate fully with the monitoring activities described in §7.F.vi. B. State’s Commitments i. The State will perform a final project inspection of the Work as a quality control/assurance activity. When all Work has been satisfactorily completed, the State will sign the FHWA Form 1212. ii. Notwithstanding any consents or approvals given by the State for the Plans, the State shall not be liable or responsible in any manner for the structural design, details or construction of any Work constituting major structures designed by, or that are the responsibility of, Local Agency, as identified in Exhibit E. 7. PAYMENTS A. Maximum Amount Payments to Local Agency are limited to the unpaid, obligated balance of the Agreement Funds set forth in Exhibit C. The State shall not pay Local Agency any amount under this Agreement that exceeds the Agreement Maximum set forth in Exhibit C. B. Payment Procedures i. Invoices and Payment a. The State shall pay Local Agency in the amounts and in accordance with conditions set forth in Exhibit C. b. Local Agency shall initiate payment requests by invoice to the State, in a form and manner approved by the State. c. The State shall pay each invoice within 45 days following the State’s receipt of that invoice, so long as the amount invoiced correctly represents Work completed by Local Agency and previously accepted by the State during the term that the invoice covers. If the State determines that the amount of any invoice is not correct, then Local Agency shall make all changes necessary to correct that invoice. d. The acceptance of an invoice shall not constitute acceptance of any Work performed or deliverables provided under the Agreement. e. If a project is funded in part with Federal or State special funding there may be an expiration date for the funds. The expiration date applies to grants and local funds used to match grants. To receive payment or credit for the match, Work must be completed or substantially completed, as outlined in the terms of the grant, prior to the expiration date of the special funding and invoiced in compliance with the rules outlined in the award of the funding. The acceptance of an invoice shall not constitute acceptance of any Work performed or deliverables provided under the Agreement. ii. Interest Amounts not paid by the State within 45 days after the State’s acceptance of the invoice shall bear interest on the unpaid balance beginning on the 46th day at the rate of 1% per month, as required by §24-30- 202(24)(a), C.R.S., until paid in full; provided, however, that interest shall not accrue on unpaid amounts that the State disputes in writing. Local Agency shall invoice the State separately for accrued interest on delinquent amounts, and the invoice shall reference the delinquent payment, the number of days interest to be paid and the interest rate. iii. Payment Disputes OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 12 of 29 If Local Agency disputes any calculation, determination, or amount of any payment, Local Agency shall notify the State in writing of its dispute within 30 days following the earlier to occur of Local Agency’s receipt of the payment or notification of the determination or calculation of the payment by the State. The State will review the information presented by Local Agency and may make changes to its determination based on this review. The calculation, determination, or payment amount that results from the State’s review shall not be subject to additional dispute under this subsection. No payment subject to a dispute under this subsection shall be due until after the State has concluded its review, and the State shall not pay any interest on any amount during the period it is subject to dispute under this subsection. iv. Available Funds-Contingency-Termination a. The State is prohibited by law from making commitments beyond the term of the current State Fiscal Year. Payment to Local Agency beyond the current State Fiscal Year is contingent on the appropriation and continuing availability of Agreement Funds in any subsequent year (as provided in the Colorado Special Provisions). If federal funds or funds from any other non-State funds constitute all or some of the Agreement Funds, the State’s obligation to pay Local Agency shall be contingent upon such non-State funding continuing to be made available for payment. Payments to be made pursuant to this Agreement shall be made only from Agreement Funds, and the State’s liability for such payments shall be limited to the amount remaining of such Agreement Funds. If State, federal or other funds are not appropriated, or otherwise become unavailable to fund this Agreement, the State may, upon written notice, terminate this Agreement, in whole or in part, without incurring further liability. The State shall, however, remain obligated to pay for Services and Goods that are delivered and accepted prior to the effective date of notice of termination, and this termination shall otherwise be treated as if this Agreement were terminated in the public interest as described in §2.C. b. If the agreement funds are terminated, the State can terminate the contract early. Payment due for work done to the date of termination will be processed in a manner consistent with §2.C. v. Erroneous Payments The State may recover, at the State’s discretion, payments made to Local Agency in error for any reason, including, but not limited to, overpayments or improper payments, and unexpended or excess funds received by Local Agency. The State may recover such payments by deduction from subsequent payments under this Agreement, deduction from any payment due under any other contracts, grants or agreements between the State and Local Agency, or by any other appropriate method for collecting debts owed to the State. The close out of a Federal Award does not affect the right of FHWA or the State to disallow costs and recover funds on the basis of a later audit or other review. Any cost disallowance recovery is to be made within the Record Retention Period (as defined below in §9.A.). vi. Federal Recovery The close-out of a Federal Award does not affect the right of the Federal Awarding Agency or the State to disallow costs and recover funds on the basis of a later audit or other review. Any cost disallowance recovery is to be made within the Record Retention Period, as defined below. C. Local Agency Funds Local Agency shall provide their obligated contribution funds as outlined in §7.A. and Exhibit C. Local Agency shall have raised the full amount of their funds prior to the Effective Date and shall report to the State regarding the status of such funds upon request. Local Agency’s obligation to pay all or any part of any matching funds, whether direct or contingent, only extend to funds duly and lawfully appropriated for the purposes of this Agreement by the authorized representatives of Local Agency and paid into Local Agency’s treasury. Local Agency represents to the State that the amount designated “Local Agency Funds” in Exhibit C has been legally appropriated for the purpose of this Agreement by its authorized representatives and paid into its treasury. Local Agency may evidence such obligation by an appropriate ordinance/resolution or other authority letter expressly authorizing Local Agency to enter into this Agreement and to expend its match share of the Work. A copy of any such ordinance/resolution or authority letter is attached hereto as Exhibit D if applicable. Local Agency does not by this Agreement irrevocably pledge present cash reserves for payments in future fiscal years, and this Agreement is not intended to create a multiple-fiscal year debt of OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 13 of 29 Local Agency. Local Agency shall not pay or be liable for any claimed interest, late charges, fees, taxes, or penalties of any nature, except as required by Local Agency’s laws or policies. D. Reimbursement of Local Agency Costs The State shall reimburse Local Agency’s allowable costs, not exceeding the maximum total amount described in Exhibit C and §7. However, any costs incurred by Local Agency prior to the Effective Date shall not be reimbursed absent specific allowance of pre-award costs and indication that the Federal Award funding is retroactive. The State shall pay Local Agency for costs or expenses incurred or performance by the Local Agency prior to the Effective Date, only if (1) the Grant Funds involve federal funding and (2) federal laws, rules, and regulations applicable to the Work provide for such retroactive payments to the Local Agency. Any such retroactive payments shall comply with State Fiscal Rules and be made in accordance with the provisions of this Agreement. The applicable principles described in 2 C.F.R. Part 200 shall govern the State’s obligation to reimburse all costs incurred by Local Agency and submitted to the State for reimbursement hereunder, and Local Agency shall comply with all such principles. The State shall reimburse Local Agency for the federal-aid share of properly documented costs related to the Work after review and approval thereof, subject to the provisions of this Agreement and Exhibit C. Local Agency costs for Work performed prior to the Effective Date shall not be reimbursed absent specific allowance of pre-award costs and indication that the Federal Award funding is retroactive. Local Agency costs for Work performed after any Performance Period End Date for a respective phase of the Work, is not reimbursable. Allowable costs shall be: i. Reasonable and necessary to accomplish the Work and for the Goods and Services provided. ii. Actual net cost to Local Agency (i.e. the price paid minus any items of value received by Local Agency that reduce the cost actually incurred). E. Unilateral Modification of Agreement Funds Budget by State Option Letter The State may, at its discretion, issue an “Option Letter” to Local Agency to add or modify Work phases in the Work schedule in Exhibit C if such modifications do not increase total budgeted Agreement Funds. Such Option Letters shall amend and update Exhibit C, Sections 2 or 4 of the Table, and sub-sections B and C of the Exhibit C. Option Letters shall not be deemed valid until signed by the State Controller or an authorized delegate. This is NOT a Notice to Proceed. Modification of Exhibit C by unilateral Option Letter is permitted only in the specific scenarios listed below. The State will exercise such options by providing Local Agency a fully executed Option Letter, in a form substantially equivalent to Exhibit B. Such Option Letters will be incorporated into this Agreement. This applies to the entire Scope of Work. i. Option to Begin a Phase and/or Increase or Decrease the Encumbrance Amount The State may require by Option Letter that Local Agency begin a new Work phase that may include Design, Construction, Environmental, Utilities, ROW Incidentals or Miscellaneous Work (but may not include Right of Way Acquisition/Relocation or Railroads) as detailed in Exhibit A. Such Option Letters may not modify the other terms and conditions stated in this Agreement and must decrease the amount budgeted and encumbered for one or more other Work phases so that the total amount of budgeted Agreement Funds remains the same. The State may also change the funding sources so long as the amount budgeted remains the same and the Local Agency contribution does not increase. The State may also issue a unilateral Option Letter to increase and/or decrease the total encumbrance amount of two or more existing Work phases, as long as the total amount of budgeted Agreement Funds remains the same, replacing the original Agreement Funding exhibit (Exhibit C) with an updated Exhibit C-1 (with subsequent exhibits labeled C-2, C-3, etc.). ii. Option to Transfer Funds from One Phase to Another Phase. The State may require or permit Local Agency to transfer Agreement Funds from one Work phase (Design, Construction, Environmental, Utilities, ROW Incidentals or Miscellaneous) to another phase as a result of changes to State, federal, and local match funding. In such case, the original funding exhibit (Exhibit C) will be replaced with an updated Exhibit C-1 (with subsequent exhibits labeled C-2, C-3, etc.) attached to the Option Letter. The Agreement Funds transferred from one Work phase to another are subject to the same terms and conditions stated in the original Agreement with the total budgeted Agreement Funds remaining the same. The State may unilaterally exercise this option by providing a OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 14 of 29 fully executed Option Letter to Local Agency within thirty (30) days before the initial targeted start date of the Work phase, in a form substantially equivalent to Exhibit B. iii. Option to Exercise Options i and ii. The State may require Local Agency to add a Work phase as detailed in Exhibit A, and encumber and transfer Agreement Funds from one Work phase to another. The original funding exhibit (Exhibit C) in the original Agreement will be replaced with an updated Exhibit C-1 (with subsequent exhibits labeled C-2, C-3, etc.) attached to the Option Letter. The addition of a Work phase and encumbrance and transfer of Agreement Funds are subject to the same terms and conditions stated in the original Agreement with the total budgeted Agreement Funds remaining the same. The State may unilaterally exercise this option by providing a fully executed Option Letter to Local Agency within 30 days before the initial targeted start date of the Work phase, in a form substantially equivalent to Exhibit B. iv. Option to Extend Agreement/Phase Term and/or modify the OMB Uniform Guidance. The State, at its discretion, shall have the option to extend the term of this Agreement and/or update a Work Phase Performance Period and/or modify information required under the OMB Uniform Guidance, as outlined in Exhibit C. Any updated version of Exhibit C shall be attached to any executed Option Letter as Exhibit C-1 (with subsequent exhibits labeled C-2, C-3, etc.). In order to exercise this option, the State shall provide written notice to the Local Agency in a form substantially equivalent to Exhibit B. F. Accounting Local Agency shall establish and maintain accounting systems in accordance with generally accepted accounting standards (a separate set of accounts, or as a separate and integral part of its current accounting scheme). Such accounting systems shall, at a minimum, provide as follows: i. Local Agency Performing the Work If Local Agency is performing the Work, it shall document all allowable costs, including any approved Services contributed by Local Agency or subcontractors, using payrolls, time records, invoices, contracts, vouchers, and other applicable records. ii. Local Agency-Checks or Draws Checks issued or draws made by Local Agency shall be made or drawn against properly signed vouchers detailing the purpose thereof. Local Agency shall keep on file all checks, payrolls, invoices, contracts, vouchers, orders, and other accounting documents in the office of Local Agency, clearly identified, readily accessible, and to the extent feasible, separate and apart from all other Work documents. iii. State-Administrative Services The State may perform any necessary administrative support services required hereunder. Local Agency shall reimburse the State for the costs of any such services from the budgeted Agreement Funds as provided for in Exhibit C. If FHWA Agreement Funds are or become unavailable, or if Local Agency terminates this Agreement prior to the Work being approved by the State or otherwise completed, then all actual incurred costs of such services and assistance provided by the State shall be reimbursed to the State by Local Agency at its sole expense. iv. Local Agency-Invoices Local Agency’s invoices shall describe in detail the reimbursable costs incurred by Local Agency for which it seeks reimbursement, the dates such costs were incurred and the amounts thereof, and Local Agency shall not submit more than one invoice per month. v. Invoicing Within 60 Days The State shall not be liable to reimburse Local Agency for any costs invoiced more than 60 days after the date on which the costs were incurred, including costs included in Local Agency’s final invoice. The State may withhold final payment to Local Agency at the State’s sole discretion until completion of final audit. Any costs incurred by Local Agency that are not allowable under 2 C.F.R. Part 200 shall be Local Agency’s responsibility, and the State will deduct such disallowed costs from any payments due to Local Agency. The State will not reimburse costs for Work performed after the Performance Period End Date for a respective Work phase. The State will not reimburse costs for Work performed prior to Performance OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 15 of 29 Period End Date, but for which an invoice is received more than 60 days after the Performance Period End Date. vi. Risk Assessment & Monitoring Pursuant to 2 C.F.R. 200.331(b), – CDOT will evaluate Local Agency’s risk of noncompliance with federal statutes, regulations, and terms and conditions of this Agreement. Local Agency shall complete a Risk Assessment Form (Exhibit L) when that may be requested by CDOT. The risk assessment is a quantitative and/or qualitative determination of the potential for Local Agency’s non-compliance with the requirements of the Federal Award. The risk assessment will evaluate some or all of the following factors: • Experience: Factors associated with the experience and history of the Subrecipient with the same or similar Federal Awards or grants. • Monitoring/Audit: Factors associated with the results of the Subrecipient’s previous audits or monitoring visits, including those performed by the Federal Awarding Agency, when the Subrecipient also receives direct federal funding. Include audit results if Subrecipient receives single audit, where the specific award being assessed was selected as a major program. • Operation: Factors associated with the significant aspects of the Subrecipient’s operations, in which failure could impact the Subrecipient’s ability to perform and account for the contracted goods or services. • Financial: Factors associated with the Subrecipient’s financial stability and ability to comply with financial requirements of the Federal Award. • Internal Controls: Factors associated with safeguarding assets and resources, deterring and detecting errors, fraud and theft, ensuring accuracy and completeness of accounting data, producing reliable and timely financial and management information, and ensuring adherence to its policies and plans. • Impact: Factors associated with the potential impact of a Subrecipient’s non-compliance to the overall success of the program objectives. • Program Management: Factors associated with processes to manage critical personnel, approved written procedures, and knowledge of rules and regulations regarding federal-aid projects. Following Local Agency’s completion of the Risk Assessment Tool (Exhibit L), CDOT will determine the level of monitoring it will apply to Local Agency’s performance of the Work. This risk assessment may be re-evaluated after CDOT begins performing monitoring activities. G. Close Out Local Agency shall close out this Award within 90 days after the Final Phase Performance End Date. If SLFRF Funds are used the Local Agency shall close out that portion of the Award within 45 days after the ARPA Award Expiration Date. Close out requires Local Agency’s submission to the State of all deliverables defined in this Agreement, and Local Agency’s final reimbursement request or invoice. The State will withhold 5% of allowable costs until all final documentation has been submitted and accepted by the State as substantially complete. If FHWA or US Treasury has not closed this Federal Award within one (1) year and 90 days after the Final Phase Performance End Date due to Local Agency’s failure to submit required documentation, then Local Agency may be prohibited from applying for new Federal Awards through the State until such documentation is submitted and accepted. 8. REPORTING - NOTIFICATION A. Quarterly Reports In addition to any reports required pursuant to §19 or pursuant to any exhibit, for any contract having a term longer than 3 months, Local Agency shall submit, on a quarterly basis, a written report specifying progress made for each specified performance measure and standard in this Agreement. Such progress report shall be in accordance with the procedures developed and prescribed by the State. Progress reports shall be submitted to the State not later than ten (10) Business Days following the end of each calendar quarter or at such time as otherwise specified by the State. If SLFRF Funds are used the report must be in the format of Exhibit P. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 16 of 29 B. Litigation Reporting If Local Agency is served with a pleading or other document in connection with an action before a court or other administrative decision making body, and such pleading or document relates to this Agreement or may affect Local Agency’s ability to perform its obligations under this Agreement, Local Agency shall, within 10 days after being served, notify the State of such action and deliver copies of such pleading or document to the State’s principal representative identified in §16. C. Performance and Final Status Local Agency shall submit all financial, performance and other reports to the State no later than 60 calendar days after the Final Phase Performance End Date or sooner termination of this Agreement, containing an Evaluation of Subrecipient’s performance and the final status of Subrecipient’s obligations hereunder. D. Violations Reporting Local Agency must disclose, in a timely manner, in writing to the State and FHWA, all violations of federal or State criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal Award. Penalties for noncompliance may include suspension or debarment (2 CFR Part 180 and 31 U.S.C. 3321). 9. LOCAL AGENCY RECORDS A. Maintenance Local Agency shall make, keep, maintain, and allow inspection and monitoring by the State of a complete file of all records, documents, communications, notes and other written materials, electronic media files, and communications, pertaining in any manner to the Work or the delivery of Services (including, but not limited to the operation of programs) or Goods hereunder. Local Agency shall maintain such records for a period (the “Record Retention Period”) pursuant to the requirements of the funding source and for a minimum of three (3) years following the date of submission to the State of the final expenditure report, whichever is longer, or if this Award is renewed quarterly or annually, from the date of the submission of each quarterly or annual report, respectively. If any litigation, claim, or audit related to this Award starts before expiration of the Record Retention Period, the Record Retention Period shall extend until all litigation, claims, or audit findings have been resolved and final action taken by the State or Federal Awarding Agency. The Federal Awarding Agency, a cognizant agency for audit, oversight or indirect costs, and the State, may notify Local Agency in writing that the Record Retention Period shall be extended. For records for real property and equipment, the Record Retention Period shall extend three (3) years following final disposition of such property. B. Inspection Records during the Record Retention Period. Local Agency shall make Local Agency Records available during normal business hours at Local Agency’s office or place of business, or at other mutually agreed upon times or locations, upon no fewer than two (2) Business Days’ notice from the State, unless the State determines that a shorter period of notice, or no notice, is necessary to protect the interests of the State. C. Monitoring The State will monitor Local Agency’s performance of its obligations under this Agreement using procedures as determined by the State. The State shall monitor Local Agency’s performance in a manner that does not unduly interfere with Local Agency’s performance of the Work. Local Agency shall allow the State to perform all monitoring required by the Uniform Guidance, based on the State’s risk analysis of Local Agency. The State shall have the right, in its sole discretion, to change its monitoring procedures and requirements at any time during the term of this Agreement. The State shall monitor Local Agency’s performance in a manner that does not unduly interfere with Local Agency’s performance of the Work. If Local Agency enters into a subcontract with an entity that would also be considered a Subrecipient, then the subcontract entered into by Local Agency shall contain provisions permitting both Local Agency and the State to perform all monitoring of that Subcontractor in accordance with the Uniform Guidance. D. Final Audit Report Local Agency shall promptly submit to the State a copy of any final audit report of an audit performed on Local Agency’s records that relates to or affects this Agreement or the Work, whether the audit is conducted OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 17 of 29 by Local Agency or a third party. Additionally, if Local Agency is required to perform a single audit under 2 CFR 200.501, et seq., then Local Agency shall submit a copy of the results of that audit to the State within the same timelines as the submission to the federal government. 10. CONFIDENTIAL INFORMATION-STATE RECORDS A. Confidentiality Local Agency shall hold and maintain, and cause all Subcontractors to hold and maintain, any and all State Records that the State provides or makes available to Local Agency for the sole and exclusive benefit of the State, unless those State Records are otherwise publicly available at the time of disclosure or are subject to disclosure by Local Agency under CORA. Local Agency shall not, without prior written approval of the State, use for Local Agency’s own benefit, publish, copy, or otherwise disclose to any third party, or permit the use by any third party for its benefit or to the detriment of the State, any State Records, except as otherwise stated in this Agreement. Local Agency shall provide for the security of all State Confidential Information in accordance with all policies promulgated by the Colorado Office of Information Security and all applicable laws, rules, policies, publications, and guidelines. Local Agency shall immediately forward any request or demand for State Records to the State’s principal representative. If Local Agency or any of its Subcontractors will or may receive the following types of data, Local Agency or its Subcontractors shall provide for the security of such data according to the following: (i) the most recently promulgated IRS Publication 1075 for all Tax Information and in accordance with the Safeguarding Requirements for Federal Tax Information attached to this Award as an Exhibit, if applicable, (ii) the most recently updated PCI Data Security Standard from the PCI Security Standards Council for all PCI, (iii) the most recently issued version of the U.S. Department of Justice, Federal Bureau of Investigation, Criminal Justice Information Services Security Policy for all CJI, and (iv) the federal Health Insurance Portability and Accountability Act for all PHI and the HIPAA Business Associate Agreement attached to this Award, if applicable. Local Agency shall immediately forward any request or demand for State Records to the State’s principal representative. B. Other Entity Access and Nondisclosure Agreements Local Agency may provide State Records to its agents, employees, assigns and Subcontractors as necessary to perform the Work, but shall restrict access to State Confidential Information to those agents, employees, assigns and Subcontractors who require access to perform their obligations under this Agreement. Local Agency shall ensure all such agents, employees, assigns, and Subcontractors sign nondisclosure agreements with provisions at least as protective as those in this Agreement, and that the nondisclosure agreements are in force at all times the agent, employee, assign or Subcontractor has access to any State Confidential Information. Local Agency shall provide copies of those signed nondisclosure agreements to the State upon request. C. Use, Security, and Retention Local Agency shall use, hold and maintain State Confidential Information in compliance with any and all applicable laws and regulations in facilities located within the United States, and shall maintain a secure environment that ensures confidentiality of all State Confidential Information wherever located. Local Agency shall provide the State with access, subject to Local Agency’s reasonable security requirements, for purposes of inspecting and monitoring access and use of State Confidential Information and evaluating security control effectiveness. Upon the expiration or termination of this Agreement, Local Agency shall return State Records provided to Local Agency or destroy such State Records and certify to the State that it has done so, as directed by the State. If Local Agency is prevented by law or regulation from returning or destroying State Confidential Information, Local Agency warrants it will guarantee the confidentiality of, and cease to use, such State Confidential Information. D. Incident Notice and Remediation If Local Agency becomes aware of any Incident, it shall notify the State immediately and cooperate with the State regarding recovery, remediation, and the necessity to involve law enforcement, as determined by the State. Unless Local Agency can establish that none of Local Agency or any of its agents, employees, assigns, or Subcontractors are the cause or source of the Incident, Local Agency shall be responsible for the cost of notifying each person who may have been impacted by the Incident. After an Incident, Local Agency shall take steps to reduce the risk of incurring a similar type of Incident in the future as directed by the State, which OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 18 of 29 may include, but is not limited to, developing, and implementing a remediation plan that is approved by the State at no additional cost to the State. E. Safeguarding Personally Identifying Information “PII” If Local Agency or any of its Subcontracts will or may receive PII under this agreement, Local Agency shall provide for the security for such PII, in a manner and form acceptable to the State, including, without limitation, State non-disclosure requirements, use of appropriate technology, security practices, computer access security, data access security, data storage encryption, data transmission encryption, security inspections, and audits. Local Agency shall be a “Third Party Service Provider” as defined in §24-73- 103(1)(i), C.R.S. and shall maintain security procedures and practices consistent with §§24-73-101 et seq., C.R.S. In addition, as set forth in § 24-74-102, et. seq., C.R.S., Contractor, including, but not limited to, Contractor’s employees, agents and Subcontractors, agrees not to share any PII with any third parties for the purpose of investigating for, participating in, cooperating with, or assisting with Federal immigration enforcement. If Contractor is given direct access to any State databases containing PII, Contractor shall execute, on behalf of itself and its employees, the certification attached hereto as Exhibit S on an annual basis Contractor’s duty and obligation to certify as set forth in Exhibit S shall continue as long as Contractor has direct access to any State databases containing PII. If Contractor uses any Subcontractors to perform services requiring direct access to State databases containing PII, the Contractor shall require such Subcontractors to execute and deliver the certification to the State on an annual basis, so long as the Subcontractor has access to State databases containing PII. 11. CONFLICTS OF INTEREST A. Actual Conflicts of Interest Local Agency shall not engage in any business or activities or maintain any relationships that conflict in any way with the full performance of the obligations of Local Agency under this Agreement. Such a conflict of interest would arise when a Local Agency or Subcontractor’s employee, officer or agent were to offer or provide any tangible personal benefit to an employee of the State, or any member of his or her immediate family or his or her partner, related to the award of, entry into or management or oversight of this Agreement. Officers, employees, and agents of Local Agency may neither solicit nor accept gratuities, favors or anything of monetary value from contractors or parties to subcontracts. B. Apparent Conflicts of Interest Local Agency acknowledges that, with respect to this Agreement, even the appearance of a conflict of interest shall be harmful to the State’s interests. Absent the State’s prior written approval, Local Agency shall refrain from any practices, activities or relationships that reasonably appear to be in conflict with the full performance of Local Agency’s obligations under this Agreement. C. Disclosure to the State If a conflict or the appearance of a conflict arises, or if Local Agency is uncertain whether a conflict or the appearance of a conflict has arisen, Local Agency shall submit to the State a disclosure statement setting forth the relevant details for the State’s consideration. Failure to promptly submit a disclosure statement or to follow the State’s direction in regard to the actual or apparent conflict constitutes a breach of this Agreement. 12. INSURANCE Local Agency shall obtain and maintain, and ensure that each Subcontractor shall obtain and maintain, insurance as specified in this section at all times during the term of this Agreement. All insurance policies required by this Agreement that are not provided through self-insurance shall be issued by insurance companies with an AM Best rating of A-VIII or better. A. Local Agency Insurance Local Agency is a "public entity" within the meaning of the Colorado Governmental Immunity Act, §24-10- 101, et seq., C.R.S. (the “GIA”) and shall maintain at all times during the term of this Agreement such liability insurance, by commercial policy or self-insurance, as is necessary to meet its liabilities under the GIA. B. Subcontractor Requirements OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 19 of 29 Local Agency shall ensure that each Subcontractor that is a public entity within the meaning of the GIA, maintains at all times during the terms of this Agreement, such liability insurance, by commercial policy or self-insurance, as is necessary to meet the Subcontractor’s obligations under the GIA. Local Agency shall ensure that each Subcontractor that is not a public entity within the meaning of the GIA, maintains at all times during the terms of this Agreement all of the following insurance policies: i. Workers’ Compensation Workers’ compensation insurance as required by state statute, and employers’ liability insurance covering all Local Agency or Subcontractor employees acting within the course and scope of their employment. ii. General Liability Commercial general liability insurance written on an Insurance Services Office occurrence form, covering premises operations, fire damage, independent contractors, products and completed operations, blanket contractual liability, personal injury, and advertising liability with minimum limits as follows: a. $1,000,000 each occurrence; b. $1,000,000 general aggregate; c. $1,000,000 products and completed operations aggregate; and d. $50,000 any one (1) fire. iii. Automobile Liability Automobile liability insurance covering any auto (including owned, hired and non-owned autos) with a minimum limit of $1,000,000 each accident combined single limit. iv. Protected Information (this insurance requirement only applies if the Subcontractor has or will have access to State Confidential Information) Liability insurance covering all loss of State Confidential Information, such as PII, PHI, PCI, Tax Information, and CJI, and claims based on alleged violations of privacy rights through improper use or disclosure of protected information with minimum limits as follows: a. $1,000,000 each occurrence; and b. $2,000,000 general aggregate. v. Professional Liability Insurance (this insurance requirement only applies if the Subcontractor is providing professional services including but not limited to engineering, architectural, landscape architectural, professional surveying, industrial hygiene services, or any other commonly understood professional service) Professional liability insurance covering any damages caused by an error, omission or any negligent act with minimum limits as follows: a. $1,000,000 each occurrence; and b. $1,000,000 general aggregate. vi. Crime Insurance Crime insurance including employee dishonesty coverage with minimum limits as follows: a. $1,000,000 each occurrence; and b. $1,000,000 general aggregate. vii. Cyber/Network Security and Privacy Liability Liability insurance covering all civil, regulatory and statutory damages, contractual damages, data breach management exposure, and any loss of State Confidential Information, such as PII, PHI, PCI, Tax Information, and CJI, and claims based on alleged violations of breach, violation or infringement of right to privacy rights through improper use or disclosure of protected consumer data protection law, OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 20 of 29 confidentiality or other legal protection for personal information, as well as State Confidential Information with minimum limits as follows: a. $1,000,000 each occurrence; and b. $2,000,000 general aggregate. C. Additional Insured The State shall be named as additional insured on all commercial general liability policies (leases and construction contracts require additional insured coverage for completed operations) required of Local Agency and Subcontractors. In the event of cancellation of any commercial general liability policy, the carrier shall provide at least 10 days prior written notice to CDOT. D. Primacy of Coverage Coverage required of Local Agency and each Subcontractor shall be primary over any insurance or self- insurance program carried by Local Agency or the State. E. Cancellation All commercial insurance policies shall include provisions preventing cancellation or non-renewal, except for cancellation based on non-payment of premiums, without at least 30 days prior notice to Local Agency and Local Agency shall forward such notice to the State in accordance with §16 within 7 days of Local Agency’s receipt of such notice. F. Subrogation Waiver All commercial insurance policies secured or maintained by Local Agency or its Subcontractors in relation to this Agreement shall include clauses stating that each carrier shall waive all rights of recovery under subrogation or otherwise against Local Agency or the State, its agencies, institutions, organizations, officers, agents, employees, and volunteers. G. Certificates For each commercial insurance plan provided by Local Agency under this Agreement, Local Agency shall provide to the State certificates evidencing Local Agency’s insurance coverage required in this Agreement within seven (7) Business Days following the Effective Date. Local Agency shall provide to the State certificates evidencing Subcontractor insurance coverage required under this Agreement within seven (7) Business Days following the Effective Date, except that, if Local Agency’s subcontract is not in effect as of the Effective Date, Local Agency shall provide to the State certificates showing Subcontractor insurance coverage required under this Agreement within seven (7) Business Days following Local Agency’s execution of the subcontract. No later than 15 days before the expiration date of Local Agency’s or any Subcontractor’s coverage, Local Agency shall deliver to the State certificates of insurance evidencing renewals of coverage. At any other time during the term of this Agreement, upon request by the State, Local Agency shall, within seven (7) Business Days following the request by the State, supply to the State evidence satisfactory to the State of compliance with the provisions of this §12. 13. BREACH A. Defined The failure of a Party to perform any of its obligations in accordance with this Agreement, in whole or in part or in a timely or satisfactory manner, shall be a breach. The institution of proceedings under any bankruptcy, insolvency, reorganization, or similar law, by or against Local Agency, or the appointment of a receiver or similar officer for Local Agency or any of its property, which is not vacated or fully stayed within 30 days after the institution of such proceeding, shall also constitute a breach. B. Notice and Cure Period In the event of a breach, the aggrieved Party shall give written notice of breach to the other Party. If the notified Party does not cure the breach, at its sole expense, within 30 days after the delivery of written notice, the Party may exercise any of the remedies as described in §14 for that Party. Notwithstanding any provision of this Agreement to the contrary, the State, in its discretion, need not provide notice or a cure period and OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 21 of 29 may immediately terminate this Agreement in whole or in part or institute any other remedy in the Agreement in order to protect the public interest of the State. 14. REMEDIES A. State’s Remedies If Local Agency is in breach under any provision of this Agreement and fails to cure such breach, the State, following the notice and cure period set forth in §13.B, shall have all of the remedies listed in this §14.A. in addition to all other remedies set forth in this Agreement or at law. The State may exercise any or all of the remedies available to it, in its discretion, concurrently or consecutively. i. Termination for Breach In the event of Local Agency’s uncured breach, the State may terminate this entire Agreement or any part of this Agreement. Local Agency shall continue performance of this Agreement to the extent not terminated, if any. a. Obligations and Rights To the extent specified in any termination notice, Local Agency shall not incur further obligations or render further performance past the effective date of such notice and shall terminate outstanding orders and subcontracts with third parties. However, Local Agency shall complete and deliver to the State all Work not canceled by the termination notice and may incur obligations as necessary to do so within this Agreement’s terms. At the request of the State, Local Agency shall assign to the State all of Local Agency's rights, title, and interest in and to such terminated orders or subcontracts. Upon termination, Local Agency shall take timely, reasonable, and necessary action to protect and preserve property in the possession of Local Agency but in which the State has an interest. At the State’s request, Local Agency shall return materials owned by the State in Local Agency’s possession at the time of any termination. Local Agency shall deliver all completed Work Product and all Work Product that was in the process of completion to the State at the State’s request. b. Payments Notwithstanding anything to the contrary, the State shall only pay Local Agency for accepted Work received as of the date of termination. If, after termination by the State, the State agrees that Local Agency was not in breach or that Local Agency's action or inaction was excusable, such termination shall be treated as a termination in the public interest, and the rights and obligations of the Parties shall be as if this Agreement had been terminated in the public interest under §2.C. c. Damages and Withholding Notwithstanding any other remedial action by the State, Local Agency shall remain liable to the State for any damages sustained by the State in connection with any breach by Local Agency, and the State may withhold payment to Local Agency for the purpose of mitigating the State’s damages until such time as the exact amount of damages due to the State from Local Agency is determined. The State may withhold any amount that may be due Local Agency as the State deems necessary to protect the State against loss including, without limitation, loss as a result of outstanding liens and excess costs incurred by the State in procuring from third parties replacement Work as cover. ii. Remedies Not Involving Termination The State, in its discretion, may exercise one or more of the following additional remedies: a. Suspend Performance Suspend Local Agency’s performance with respect to all or any portion of the Work pending corrective action as specified by the State without entitling Local Agency to an adjustment in price or cost or an adjustment in the performance schedule. Local Agency shall promptly cease performing Work and incurring costs in accordance with the State’s directive, and the State shall not be liable for costs incurred by Local Agency after the suspension of performance. b. Withhold Payment Withhold payment to Local Agency until Local Agency corrects its Work. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 22 of 29 c. Deny Payment Deny payment for Work not performed, or that due to Local Agency’s actions or inactions, cannot be performed or if they were performed are reasonably of no value to the state; provided, that any denial of payment shall be equal to the value of the obligations not performed. d. Removal Demand immediate removal from the Work of any of Local Agency’s employees, agents, or Subcontractors from the Work whom the State deems incompetent, careless, insubordinate, unsuitable, or otherwise unacceptable or whose continued relation to this Agreement is deemed by the State to be contrary to the public interest or the State’s best interest. e. Intellectual Property If any Work infringes a patent, copyright, trademark, trade secret, or other intellectual property right, Local Agency shall, as approved by the State (a) secure that right to use such Work for the State or Local Agency; (b) replace the Work with non infringing Work or modify the Work so that it becomes non infringing; or, (c) remove any infringing Work and refund the amount paid for such Work to the State. B. Local Agency’s Remedies If the State is in breach of any provision of this Agreement and does not cure such breach, Local Agency, following the notice and cure period in §13.B and the dispute resolution process in §15 shall have all remedies available at law and equity. 15. DISPUTE RESOLUTION A. Initial Resolution Except as herein specifically provided otherwise, disputes concerning the performance of this Agreement which cannot be resolved by the designated Agreement representatives shall be referred in writing to a senior departmental management staff member designated by the State and a senior manager designated by Local Agency for resolution. B. Resolution of Controversies If the initial resolution described in §15.A fails to resolve the dispute within 10 Business Days, Contractor shall submit any alleged breach of this Contract by the State to the Procurement Official of CDOT as described in §24-101-301(30), C.R.S. for resolution in accordance with the provisions of §§24-106-109, 24- 109-101.1, 24-109-101.5, 24-109-106, 24-109-107, 24-109-201 through 24-109-206, and 24-109-501 through 24-109-505, C.R.S., (the “Resolution Statutes”), except that if Contractor wishes to challenge any decision rendered by the Procurement Official, Contractor’s challenge shall be an appeal to the executive director of the Department of Personnel and Administration, or their delegate, under the Resolution Statutes before Contractor pursues any further action as permitted by such statutes. Except as otherwise stated in this Section, all requirements of the Resolution Statutes shall apply including, without limitation, time limitations. C. Questions of Fact Except as otherwise provided in this Agreement, any dispute concerning a question of fact arising under this Agreement which is not disposed of by agreement shall be decided by the Chief Engineer of the Department of Transportation. The decision of the Chief Engineer will be final and conclusive unless, within 30 calendar days after the date of receipt of a copy of such written decision, Local Agency mails or otherwise furnishes to the State a written appeal addressed to the Executive Director of CDOT. In connection with any appeal proceeding under this clause, Local Agency shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, Local Agency shall proceed diligently with the performance of this Agreement in accordance with the Chief Engineer’s decision. The decision of the Executive Director or his duly authorized representative for the determination of such appeals shall be final and conclusive and serve as final agency action. This dispute clause does not preclude consideration of questions of law in connection with decisions provided for herein. Nothing in this Agreement, however, shall be construed as making final the decision of any administrative official, representative, or board on a question of law. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 23 of 29 16. NOTICES AND REPRESENTATIVES Each individual identified below shall be the principal representative of the designating Party. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered (i) by hand with receipt required, (ii) by certified or registered mail to such Party’s principal representative at the address set forth below or (iii) as an email with read receipt requested to the principal representative at the email address, if any, set forth below. If a Party delivers a notice to another through email and the email is undeliverable, then, unless the Party has been provided with an alternate email contact, the Party delivering the notice shall deliver the notice by hand with receipt required or by certified or registered mail to such Party’s principal representative at the address set forth below. Either Party may change its principal representative or principal representative contact information by notice submitted in accordance with this §16 without a formal amendment to this Agreement. Unless otherwise provided in this Agreement, notices shall be effective upon delivery of the written notice. For the State Colorado Department of Transportation (CDOT) Armando Ochoa, E/PST II Local Agency Coordinator CDOT Region 4 10601 West 10th Street Greeley, CO 80634 970-652-1668 armando.ochoa@state.co.us For the Local Agency Town of Estes Park Trevor Wittwer, EIT 170 MacGregor Avenue Estes Park, CO 80517 970-577-3724 twittwer@estes.org yyyyyyy 17. RIGHTS IN WORK PRODUCT AND OTHER INFORMATION A. Work Product Local Agency hereby grants to the State a perpetual, irrevocable, non-exclusive, royalty free license, with the right to sublicense, to make, use, reproduce, distribute, perform, display, create derivatives of and otherwise exploit all intellectual property created by Local Agency or any Subcontractors. Local Agency assigns to the State and its successors and assigns, the entire right, title, and interest in and to all causes of action, either in law or in equity, for past, present, or future infringement of intellectual property rights related to the Work Product and all works based on, derived from, or incorporating the Work Product. Whether or not Local Agency is under contract with the State at the time, Local Agency shall execute applications, assignments, and other documents, and shall render all other reasonable assistance requested by the State, to enable the State to secure patents, copyrights, licenses and other intellectual property rights related to the Work Product. The Parties intend the Work Product to be works made for hire. i. Copyrights To the extent that the Work Product (or any portion of the Work Product) would not be considered works made for hire under applicable law, Local Agency hereby assigns to the State, the entire right, title, and interest in and to copyrights in all Work Product and all works based upon, derived from, or incorporating the Work Product; all copyright applications, registrations, extensions, or renewals relating to all Work Product and all works based upon, derived from, or incorporating the Work Product; and all moral rights or similar rights with respect to the Work Product throughout the world. To the extent that Local Agency cannot make any of the assignments required by this section, Local Agency hereby grants to the State a perpetual, irrevocable, royalty-free license to use, modify, copy, publish, display, perform, transfer, distribute, sell, and create derivative works of the Work Product and all works based upon, derived from, OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 24 of 29 or incorporating the Work Product by all means and methods and in any format now known or invented in the future. The State may assign and license its rights under this license. ii. Patents In addition, Local Agency grants to the State (and to recipients of Work Product distributed by or on behalf of the State) a perpetual, worldwide, no-charge, royalty-free, irrevocable patent license to make, have made, use, distribute, sell, offer for sale, import, transfer, and otherwise utilize, operate, modify and propagate the contents of the Work Product. Such license applies only to those patent claims licensable by Local Agency that are necessarily infringed by the Work Product alone, or by the combination of the Work Product with anything else used by the State. iii. Assignments and Assistance Whether or not the Local Agency is under Agreement with the State at the time, Local Agency shall execute applications, assignments, and other documents, and shall render all other reasonable assistance requested by the State, to enable the State to secure patents, copyrights, licenses and other intellectual property rights related to the Work Product. The Parties intend the Work Product to be works made for hire. Local Agency assigns to the State and its successors and assigns, the entire right, title, and interest in and to all causes of action, either in law or in equity, for past, present, or future infringement of intellectual property rights related to the Work Product and all works based on, derived from, or incorporating the Work Product. B. Exclusive Property of the State Except to the extent specifically provided elsewhere in this Agreement, any pre-existing State Records, State software, research, reports, studies, photographs, negatives, or other documents, drawings, models, materials, data, and information shall be the exclusive property of the State (collectively, “State Materials”). Local Agency shall not use, willingly allow, cause or permit Work Product or State Materials to be used for any purpose other than the performance of Local Agency’s obligations in this Agreement without the prior written consent of the State. Upon termination of this Agreement for any reason, Local Agency shall provide all Work Product and State Materials to the State in a form and manner as directed by the State. C. Exclusive Property of Local Agency Local Agency retains the exclusive rights, title, and ownership to any and all pre-existing materials owned or licensed to Local Agency including, but not limited to, all pre-existing software, licensed products, associated source code, machine code, text images, audio and/or video, and third-party materials, delivered by Local Agency under this Agreement, whether incorporated in a Deliverable or necessary to use a Deliverable (collectively, “Local Agency Property”). Local Agency Property shall be licensed to the State as set forth in this Agreement or a State approved license agreement: (i) entered into as exhibits to this Agreement, (ii) obtained by the State from the applicable third-party vendor, or (iii) in the case of open source software, the license terms set forth in the applicable open source license agreement. 18. GOVERNMENTAL IMMUNITY Liability for claims for injuries to persons or property arising from the negligence of the Parties, their departments, boards, commissions committees, bureaus, offices, employees and officials shall be controlled and limited by the provisions of the GIA; the Federal Tort Claims Act, 28 U.S.C. Pt. VI, Ch. 171 and 28 U.S.C. 1346(b), and the State’s risk management statutes, §§24-30-1501, et seq. C.R.S. The following applies through June 30, 2022: no term or condition of this Contract shall be construed or interpreted as a waiver, express or implied, of any of the immunities, rights, benefits, protections, or other provisions, contained in these statutes. 19. STATEWIDE CONTRACT MANAGEMENT SYSTEM If the maximum amount payable to Local Agency under this Agreement is $100,000 or greater, either on the Effective Date or at any time thereafter, this §19 shall apply. Local Agency agrees to be governed by and comply with the provisions of §24-106-103, §24-102-206, §24-106-106, §24-106-107 C.R.S. regarding the monitoring of vendor performance and the reporting of contract performance information in the State’s contract management system (“Contract Management System” or “CMS”). Local Agency’s performance shall be subject to evaluation and review in accordance with the terms and conditions of this Agreement, Colorado statutes governing CMS, and State Fiscal Rules and State Controller policies. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 25 of 29 20. GENERAL PROVISIONS A. Assignment Local Agency’s rights and obligations under this Agreement are personal and may not be transferred or assigned without the prior, written consent of the State. Any attempt at assignment or transfer without such consent shall be void. Any assignment or transfer of Local Agency’s rights and obligations approved by the State shall be subject to the provisions of this Agreement B. Subcontracts Local Agency shall not enter into any subcontract in connection with its obligations under this Agreement without the prior, written approval of the State. Local Agency shall submit to the State a copy of each such subcontract upon request by the State. All subcontracts entered into by Local Agency in connection with this Agreement shall comply with all applicable federal and state laws and regulations, shall provide that they are governed by the laws of the State of Colorado, and shall be subject to all provisions of this Agreement. C. Binding Effect Except as otherwise provided in §20.A. all provisions of this Agreement, including the benefits and burdens, shall extend to and be binding upon the Parties’ respective successors and assigns. D. Authority Each Party represents and warrants to the other that the execution and delivery of this Agreement and the performance of such Party’s obligations have been duly authorized. E. Captions and References The captions and headings in this Agreement are for convenience of reference only, and shall not be used to interpret, define, or limit its provisions. All references in this Agreement to sections (whether spelled out or using the § symbol), subsections, exhibits or other attachments, are references to sections, subsections, exhibits or other attachments contained herein or incorporated as a part hereof, unless otherwise noted. F. Counterparts This Agreement may be executed in multiple, identical, original counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement. G. Digital Signatures If any signatory signs this agreement using a digital signature in accordance with the Colorado State Controller Contract, Grant and Purchase Order Policies regarding the use of digital signatures issued under the State Fiscal Rules, then any agreement or consent to use digital signatures within the electronic system through which that signatory signed shall be incorporated into this Contract by reference. H. Entire Understanding This Agreement represents the complete integration of all understandings between the Parties related to the Work, and all prior representations and understandings related to the Work, oral or written, are merged into this Agreement. Prior or contemporaneous additions, deletions, or other changes to this Agreement shall not have any force or effect whatsoever, unless embodied herein. I. Jurisdiction and Venue All suits or actions related to this Agreement shall be filed and proceedings held in the State of Colorado and exclusive venue shall be in the City and County of Denver. J. Modification Except as otherwise provided in this Agreement, any modification to this Agreement shall only be effective if agreed to in a formal amendment to this Agreement, properly executed and approved in accordance with applicable Colorado State law and State Fiscal Rules. Modifications permitted under this Agreement, other than contract amendments, shall conform to the policies promulgated by the Colorado State Controller. K. Statutes, Regulations, Fiscal Rules, and Other Authority. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 26 of 29 Any reference in this Agreement to a statute, regulation, State Fiscal Rule, fiscal policy or other authority shall be interpreted to refer to such authority then current, as may have been changed or amended since the Effective Date of this Agreement. L. Order of Precedence In the event of a conflict or inconsistency between this Agreement and any exhibits or attachment such conflict or inconsistency shall be resolved by reference to the documents in the following order of priority: i. The provisions of the other sections of the main body of this Agreement. ii. Exhibit N, Federal Treasury Provisions. iii. Exhibit F, Certification for Federal-Aid Contracts. iv. Exhibit G, Disadvantaged Business Enterprise. v. Exhibit I, Federal-Aid Contract Provisions for Construction Contracts. vi. Exhibit J, Additional Federal Requirements. vii. Exhibit K, Federal Funding Accountability and Transparency Act of 2006 (FFATA) Supplemental Federal Provisions. viii. Exhibit L, Sample Sub-Recipient Monitoring and Risk Assessment Form. ix. Exhibit M, Supplemental Provisions for Federal Awards Subject to The Office of Management and Budget Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”). x. Exhibit O, Agreement with Subrecipient of Federal Recovery Funds. xi. Exhibit R. Applicable Federal Awards. xii Colorado Special Provisions in the main body of this Agreement. xiii. Exhibit A, Scope of Work. xiv. Exhibit H, Local Agency Procedures for Consultant Services. xv. Exhibit B, Sample Option Letter. xvi. Exhibit C, Funding Provisions. xvii. Exhibit P, SLFRF Subrecipient Quarterly Report. xviii. Exhibit Q, SLFRF Reporting Modification Form. xix. Exhibit D, Local Agency Resolution. xx. Exhibit E, Local Agency Contract Administration Checklist. xxi. Exhibit S, PII Certification. xxii. Exhibit T, Checklist of Required Exhibits Dependent on Funding Source. xxiii. Other exhibits in descending order of their attachment. M. Severability The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect, provided that the Parties can continue to perform their obligations under this Agreement in accordance with the intent of the Agreement. N. Survival of Certain Agreement Terms Any provision of this Agreement that imposes an obligation on a Party after termination or expiration of the Agreement shall survive the termination or expiration of the Agreement and shall be enforceable by the other Party. O. Third Party Beneficiaries Except for the Parties’ respective successors and assigns described in §20.C, this Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than the Parties. Enforcement of this Agreement and all rights and obligations hereunder are reserved solely to the Parties. Any services or benefits which third parties receive as a result of this Agreement are incidental to the Agreement, and do not create any rights for such third parties. P. Waiver A Party’s failure or delay in exercising any right, power, or privilege under this Agreement, whether explicit or by lack of enforcement, shall not operate as a waiver, nor shall any single or partial exercise of any right, power, or privilege preclude any other or further exercise of such right, power, or privilege. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 27 of 29 Q. CORA Disclosure To the extent not prohibited by federal law, this Agreement and the performance measures and standards required under §24-106-107 C.R.S., if any, are subject to public release through the CORA. R. Standard and Manner of Performance Local Agency shall perform its obligations under this Agreement in accordance with the highest standards of care, skill and diligence in Local Agency’s industry, trade, or profession. S. Licenses, Permits, and Other Authorizations. Local Agency shall secure, prior to the Effective Date, and maintain at all times during the term of this Agreement, at its sole expense, all licenses, certifications, permits, and other authorizations required to perform its obligations under this Agreement, and shall ensure that all employees, agents and Subcontractors secure and maintain at all times during the term of their employment, agency or subcontract, all license, certifications, permits and other authorizations required to perform their obligations in relation to this Agreement. T. Compliance with State and Federal Law, Regulations, and Executive Orders Local Agency shall comply with all State and Federal law, regulations, executive orders, State and Federal Awarding Agency policies, procedures, directives, and reporting requirements at all times during the term of this Agreement. U. Accessibility i. Local Agency shall comply with and the Work Product provided under this Agreement shall be in compliance with all applicable provisions of §§24-85-101, et seq., C.R.S., and the Accessibility Standards for Individuals with a Disability, as established by the Governor’s Office of Information Technology (OIT), pursuant to Section §24-85-103 (2.5), C.R.S. Local Agency shall also comply with all State of Colorado technology standards related to technology accessibility and with Level AA of the most current version of the Web Content Accessibility Guidelines (WCAG), incorporated in the State of Colorado technology standards. ii. Each Party agrees to be responsible for its own liability incurred as a result of its participation in and performance under this Agreement. In the event any claim is litigated, each Party will be responsible for its own attorneys’ fees, expenses of litigation, or other costs. No provision of this Agreement shall be deemed or construed to be a relinquishment or waiver of any kind of the applicable limitations of liability provided to either the Local Agency or the State by the Colorado Governmental Immunity Act, C.R.S. § 24-10-101, et seq. and Article XI of the Colorado Constitution. Nothing in the Agreement shall be construed as a waiver of any provision of the State Fiscal Rules. iii. The State may require Local Agency’s compliance to the State’s Accessibility Standards to be determined by a third party selected by the State to attest to Local Agency’s Work Product and software is in compliance with §§24-85-101, et seq., C.R.S., and the Accessibility Standards for Individuals with a Disability as established by OIT pursuant to Section §24-85-103 (2.5), C.R.S. V. Taxes The State is exempt from federal excise taxes under I.R.C. Chapter 32 (26 U.S.C., Subtitle D, Ch. 32) (Federal Excise Tax Exemption Certificate of Registry No. 84-730123K) and from State and local government sales and use taxes under §§39-26-704(1), et seq., C.R.S. (Colorado Sales Tax Exemption Identification Number 98-02565). The State shall not be liable for the payment of any excise, sales, or use taxes, regardless of whether any political subdivision of the state imposes such taxes on Local Agency. Local Agency shall be solely responsible for any exemptions from the collection of excise, sales or use taxes that Local Agency may wish to have in place in connection with this Agreement. 21. COLORADO SPECIAL PROVISIONS (COLORADO FISCAL RULE 3-3) These Special Provisions apply to all contracts. Contractor refers to Local Agency and Contract refers to Agreement. A. STATUTORY APPROVAL. §24-30-202(1), C.R.S. OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 28 of 29 This Contract shall not be valid until it has been approved by the Colorado State Controller or designee. If this Contract is for a Major Information Technology Project, as defined in §24-37.5-102(19), then this Contract shall not be valid until it has been approved by the State’s Chief Information Officer or designee. B. FUND AVAILABILITY. §24-30-202(5.5), C.R.S., applicable Local Agency law, rule or regulation. Financial obligations of the Parties payable after the current State Fiscal Year or fiscal year are contingent upon funds for that purpose being appropriated, budgeted, and otherwise made available. C. GOVERNMENTAL IMMUNITY. Liability for claims for injuries to persons or property arising from the negligence of the Parties, its departments, boards, commissions committees, bureaus, offices, employees and officials shall be controlled and limited by the provisions of the Colorado Governmental Immunity Act, §24-10-101, et seq., C.R.S.; the Federal Tort Claims Act, 28 U.S.C. Pt. VI, Ch. 171 and 28 U.S.C. 1346(b), and the State’s risk management statutes, §§24-30-1501, et seq. C.R.S. No term or condition of this Contract shall be construed or interpreted as a waiver, express or implied, of any of the immunities, rights, benefits, protections, or other provisions, contained in these statutes. D. INDEPENDENT CONTRACTOR Contractor shall perform its duties hereunder as an independent contractor and not as an employee. Neither Contractor nor any agent or employee of Contractor shall be deemed to be an agent or employee of the State. Contractor shall not have authorization, express or implied, to bind the State to any agreement, liability or understanding, except as expressly set forth herein. Contractor and its employees and agents are not entitled to unemployment insurance or workers compensation benefits through the State and the State shall not pay for or otherwise provide such coverage for Contractor or any of its agents or employees. Contractor shall pay when due all applicable employment taxes and income taxes and local head taxes incurred pursuant to this Contract. Contractor shall (i) provide and keep in force workers' compensation and unemployment compensation insurance in the amounts required by law, (ii) provide proof thereof when requested by the State, and (iii) be solely responsible for its acts and those of its employees and agents. E. COMPLIANCE WITH LAW. Contractor shall comply with all applicable federal and State laws, rules, and regulations in effect or hereafter established, including, without limitation, laws applicable to discrimination and unfair employment practices. F. CHOICE OF LAW, JURISDICTION, AND VENUE. Colorado law, and rules and regulations issued pursuant thereto, shall be applied in the interpretation, execution, and enforcement of this Contract. Any provision included or incorporated herein by reference which conflicts with said laws, rules, and regulations shall be null and void. All suits or actions related to this Contract shall be filed and proceedings held in the State of Colorado and exclusive venue shall be in the City and County of Denver. G. PROHIBITED TERMS. Any term included in this Contract that requires the Parties to indemnify or hold Contractor harmless; requires the Parties to agree to binding arbitration; limits Contractor’s liability for damages resulting from death, bodily injury, or damage to tangible property; or that conflicts with this provision in any way shall be void ab initio. Nothing in this Contract shall be construed as a waiver of any provision of §24-106-109 C.R.S. Any term included in this Contract that limits Contractor’s liability that is not void under this section shall apply only in excess of any insurance to be maintained under this Contract, and no insurance policy shall be interpreted as being subject to any limitations of liability of this Contract. H. SOFTWARE PIRACY PROHIBITION. State or other public funds payable under this Contract shall not be used for the acquisition, operation, or maintenance of computer software in violation of federal copyright laws or applicable licensing restrictions. Contractor hereby certifies and warrants that, during the term of this Contract and any extensions, Contractor has and shall maintain in place appropriate systems and controls to prevent such improper use of public funds. If the State determines that Contractor is in violation of this provision, the State may exercise any remedy OLA #: 331003362 Routing #: 24-HA4-XC-00070 Document Builder Generated Rev. 05/24/2022 Page 29 of 29 available at law or in equity or under this Contract, including, without limitation, immediate termination of this Contract and any remedy consistent with federal copyright laws or applicable licensing restrictions. I. EMPLOYEE FINANCIAL INTEREST/CONFLICT OF INTEREST. §§24-18-201 and 24-50-507, C.R.S. The signatories aver that to their knowledge, no employee of the State has any personal or beneficial interest whatsoever in the service or property described in this Contract. Contractor has no interest and shall not acquire any interest, direct or indirect, that would conflict in any manner or degree with the performance of Contractor’s services and Contractor shall not employ any person having such known interests. 22. FEDERAL REQUIREMENTS Local Agency and/or their contractors, subcontractors, and consultants shall at all times during the execution of this Agreement strictly adhere to, and comply with, all applicable federal and State laws, and their implementing regulations, as they currently exist and may hereafter be amended. A summary of applicable federal provisions are attached hereto as Exhibit F, Exhibit I, Exhibit J, Exhibit K, Exhibit M, Exhibit N and Exhibit O are hereby incorporated by this reference. 23. DISADVANTAGED BUSINESS ENTERPRISE (DBE) Local Agency will comply with all requirements of Exhibit G and Exhibit E, Local Agency Contract Administration Checklist, regarding DBE requirements for the Work, except that if Local Agency desires to use its own DBE program to implement and administer the DBE provisions of 49 C.F.R. Part 26 under this Agreement, it must submit a copy of its program’s requirements to the State for review and approval before the execution of this Agreement. If Local Agency uses any State- approved DBE program for this Agreement, Local Agency shall be solely responsible to defend that DBE program and its use of that program against all legal and other challenges or complaints, at its sole cost and expense. Such responsibility includes, without limitation, determinations concerning DBE eligibility requirements and certification, adequate legal and factual bases for DBE goals and good faith efforts. State approval (if provided) of Local Agency’s DBE program does not waive or modify the sole responsibility of Local Agency for use of its program. Exhibit A - Page 1 of 1 EXHIBIT A SCOPE OF WORK Name of Project: Fall River Trail Final Segment Project Number: TAP M405-028 SubAccount #: 25932 The Colorado Department of Transportation (“CDOT”) will oversee the Town of Estes Park when the Town of Estes Park designs the Fall River Trail Final Segment (hereinafter referred to as “this work”). CDOT and the Town of Estes Park believe it will be beneficial to perform this work to improve the safety of pedestrians and cyclists. The design will be completed in accordance with AASHTO design standards, the Americans with Disabilities Act, and all applicable state, federal and local rules and regulations. The design phase of the work is expected to begin in 2024 and will identify more exact requirements, qualities, and attributes for this work (hereinafter referred to as “the exact work”). The exact work shall be used to complete the construction phase of the project. The construction phase of the contract is anticipated to begin in 2025. By accepting funds for this Scope of Work, Local Agency acknowledges, understands, and accepts the continuing responsibility for the safety of the traveling public after initial acceptance of the project. Local Agency is responsible for maintaining and operating the scope of work described in this Exhibit A constructed under this Agreement at its own cost and expense during its useful life. THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK Exhibit B - Page 1 of 2 EXHIBIT B SAMPLE IGA OPTION LETTER Date State Fiscal Year Option Letter No. Project Code Original Agreement # Vendor Name: Option to unilaterally add phasing to include Design, Construction, Environmental, Utilities, ROW incidentals or Miscellaneous and to update encumbrance amount(s). Option to unilaterally transfer funds from one phase to another phase. Option to unilaterally add phasing to include Design, Construction, Environmental, Utilities, ROW incidentals or Miscellaneous, to update encumbrance amount(s), and to unilaterally transfer funds from one phase to another phase. Option to unilaterally extend the term of this Agreement and/or update a Work Phase Performance Period and/or modify OMB Guidance. Option A In accordance with the terms of the original Agreement between the State of Colorado, Department of Transportation and the Local Agency, the State hereby exercises the option to authorize the Local Agency to add a phase and to encumber funds for the phase based on changes in funding availability and authorization. The total encumbrance is (or increased) by $0.00. A new Exhibit C-1 is made part of the original Agreement and replaces Exhibit C. Option B In accordance with the terms of the original Agreement between the State of Colorado, Department of Transportation and the Local Agency, the State hereby exercises the option to transfer funds based on variance in actual phase costs and original phase estimates. A new Exhibit C-1 is made part of the original Agreement and replaces Exhibit C. Option C In accordance with the terms of the original Agreement between the State of Colorado, Department of Transportation and the Local Agency, the State hereby exercises the option to 1) release the Local Agency to begin a phase; 2) to encumber funds for the phase based upon changes in funding availability and authorization; and 3) to transfer funds from phases based on variance in actual phase costs and Exhibit B - Page 2 of 2 original phase estimates. A new Exhibit C-1 is made part of the original Agreement and replaces Exhibit C. Option D In accordance with the terms of the original Agreement between the State of Colorado, Department of Transportation and the Local Agency, the State hereby exercises the option extend the term of this Agreement and/or update a Work Phase Performance Period and/or modify information required under the OMB Uniform Guidance, as outlined in Exhibit C.This is made part of the original Agreement and replaces the Expiration Date shown on the Signature and Cover Page. Any updated version of Exhibit C shall be attached to any executed Option Letter as Exhibit C-1 (with subsequent exhibits labeled C-2, C-3, etc.). The effective date of this option letter is upon approval of the State Controller or delegate. STATE OF COLORADO Jared S. Polis Department of Transportation By: ___________________________________________ Keith Stefanik, P.E., Chief Engineer (For) Shoshana M. Lew, Executive Director Date: _________________________________________ ALL AGREEMENTS MUST BE APPROVED BY THE STATE CONTROLLER CRS §24-30-202 requires the State Controller to approve all State Agreements. This Agreement is not valid until signed and dated below by the State Controller or delegate. Contractor is not authorized to begin performance until such time. If the Local Agency begins performing prior thereto, the State of Colorado is not obligated to pay the Local Agency for such performance or for any goods and/or services provided hereunder. STATE OF COLORADO STATE CONTROLLER Robert Jaros, CPA, MBA, JD By: ______________________________________ Colorado Department of Transportation Date:__________________________________ Fed $ LA Work Exhibit C - Page 1 of 2 EXHIBIT C - FUNDING PROVISIONS Town of Estes Park - TAP M405-028 (25932) A. Cost of Work Estimate The Local Agency has estimated the total cost the Work to be $2,875,000.00, which is to be funded as follows: 1. FUNDING a. Federal Funds (80% of TAP Award) $2,300,000.00 b. Local Agency Funds (20% of TAP Award) $575,000.00 ____________________________________________________________________________________ TOTAL FUNDS ALL SOURCES $2,875,000.00 ____________________________________________________________________________________ 2. OMB UNIFORM GUIDANCE a. Federal Award Identification Number (FAIN): TBD b. Name of Federal Awarding Agency: FHWA c. Local Agency Unique Entity Identifier KNMKSMB6JNW5 d. Assistance Listing # Highway Planning and Construction ALN 20.205 e. Is the Award for R&D? No f. Indirect Cost Rate (if applicable) N/A g. Amount of Federal Funds Obligated by this Action: $0.00 h. Amount of Federal Funds Obligated to Date (including this Action): $0.00 ____________________________________________________________________________________ 3. ESTIMATED PAYMENT TO LOCAL AGENCY a. Federal Funds Budgeted $2,300,000.00 b. Less Estimated Federal Share of CDOT-Incurred Costs $0.00 ____________________________________________________________________________________ TOTAL ESTIMATED PAYMENT TO LOCAL AGENCY 80% $2,300,000.00 TOTAL ESTIMATED FUNDING BY LOCAL AGENCY 20% $575,000.00 TOTAL PROJECT ESTIMATED FUNDING 100% $2,875,000.00 ____________________________________________________________________________________ 4. FOR CDOT ENCUMBRANCE PURPOSES a. Total Encumbrance Amount (Federal funds + Local Agency funds) $2,875,000.00 b. Less ROW Acquisition 3111 and/or ROW Relocation 3109 $0.00 ____________________________________________________________________________________ NET TO BE ENCUMBERED BY CDOT IS AS FOLLOWS $2,875,000.00 ____________________________________________________________________________________ Note: No funds are currently available. Design and Construction funds will become available after execution of an Option letter (Exhibit B) or formal Amendment. ____________________________________________________________________________________ WBS Element 25932.10.30 Performance Period Start*/End Date Design 3020 $0.00 TBD-TBD WBS Element 25932.20.10 Performance Period Start*/End Date Const. 3301 $0.00 TBD- TBD ____________________________________________________________________________________ * The Local Agency should not begin work until all three (3) of the following are in place: 1) Phase Performance Period Start Date; 2) the execution of the document encumbering funds for the respective phase; and 3) Local Agency receipt of the official Notice to Proceed. Any work performed before these three (3) milestones are achieved will not be reimbursable. B. Funding Ratios The funding ratio for the federal funds for this Work is 80% federal funds to 20% Local Agency funds, and this ratio applies only to the $2,875,000.00 that is eligible for federal funding. All other costs are borne by the Local Agency at 100%. If the total cost of performance of the Work exceeds $2,875,000.00, and additional federal funds are not available, the Local Agency shall pay all such excess costs. If the total Exhibit C - Page 2 of 2 cost of performance of the Work is less than $2,875,000.00, then the amounts of Local Agency and federal funds will be decreased in accordance with the funding ratio described in A1. This applies to the entire scope of Work. C. Maximum Amount Payable The maximum amount payable to the Local Agency under this Agreement shall be $2,300,000.00. For CDOT accounting purposes, the federal funds of $2,300,000.00 and the Local Agency funds of $575,000.00 will be encumbered for a total encumbrance of $2,875,000.00, unless this amount is increased by an executed amendment before any increased cost is incurred. The total budget is $2,875,000.00, unless this amount is increased by an executed amendment before any increased cost is incurred. The total cost of the Work is the best estimate available, based on the design data as approved at the time of execution of this Agreement, and that any cost is subject to revisions agreed to by the parties prior to bid and award. The maximum amount payable will be reduced without amendment when the actual amount of the Local Agency’s awarded Agreement is less than the budgeted total of the federal funds and the Local Agency funds. The maximum amount payable will be reduced through the execution of an Option Letter as described in Section 7. E. of this contract. This applies to the entire scope of Work. D. Single Audit Act Amendment All state and local government and non-profit organizations receiving $750,000 or more from all funding sources defined as federal financial assistance for Single Audit Act Amendment purposes shall comply with the audit requirements of 2 CFR part 200, subpart F (Audit Requirements) see also, 49 CFR 18.20 through 18.26. The Single Audit Act Amendment requirements applicable to the Local Agency receiving federal funds are as follows: i. Expenditure less than $750,000 If the Local Agency expends less than $750,000 in Federal funds (all federal sources, not just Highway funds) in its fiscal year then this requirement does not apply. ii. Expenditure of $750,000 or more-Highway Funds Only If the Local Agency expends $750,000 or more, in Federal funds, but only received federal Highway funds (Catalog of Federal Domestic Assistance, CFDA 20.205) then a program specific audit shall be performed. This audit will examine the “financial” procedures and processes for this program area. iii. Expenditure of $750,000 or more-Multiple Funding Sources If the Local Agency expends $750,000 or more in Federal funds, and the Federal funds are from multiple sources (FTA, HUD, NPS, etc.) then the Single Audit Act applies, which is an audit on the entire organization/entity. iv. Independent CPA Single Audit shall only be conducted by an independent CPA, not by an auditor on staff. An audit is an allowable direct or indirect cost. Exhibit D - Page 1 of 1 EXHIBIT D LOCAL AGENCY RESOLUTION (IF APPLICABLE) COLORADO DEPARTMENT OF TRANSPORTATION LOCAL AGENCY CONTRACT ADMINISTRATION CHECKLIST Project No. STIP No. Project Code Region Project Location Date Project Description Local Agency Local Agency Project Manager CDOT Resident Engineer CDOT Project Manager INSTRUCTIONS: This checklist shall be used to establish the contractual administrative responsibilities of the individual parties to this agreement. The checklist becomes an attachment to the Local Agency Agreement. Section numbers (NO.) correspond to the applicable chapters of the CDOT Local Agency Desk Reference (Local Agency Manual). LAWR numbers correspond to the applicable flowchart in the Local Agency Web Resource. The checklist shall be prepared by placing an X under the responsible party, opposite each of the tasks. The X denotes the party responsible for initiating and executing the task. Only one responsible party should be selected. When neither CDOT nor the Local Agency is responsible for a task, not applicable (NA) shall be noted. In addition, # will denote that CDOT must concur or approve. Tasks that will be performed by Headquarters staff are indicated with an X in the CDOT column under Responsible Party. The Regions, in accordance with established policies and procedures, will determine who will perform all other tasks that are the responsibility of CDOT. The checklist shall be prepared by the CDOT Resident Engineer or the CDOT Project Manager, in cooperation with the Local Agency Project Manager, and submitted to the Region Program Engineer. If contract administration responsibilities change, the CDOT Resident Engineer, in cooperation with the Local Agency Project Manager, will prepare and distribute a revised checklist. Note: Failure to comply with applicable Federal and State requirements may result in the loss of Federal or State participation in funding. LA WR NO. DESCRIPTION OF TASK RESPONSIBLE PARTY LA CDOT TIP / STIP AND LONG-RANGE PLANS 2.1 Review Project to ensure it is consistent with Statewide Plan and amendments thereto x FEDERAL FUNDING OBLIGATION AND AUTHORIZATION 4.1 Authorize funding by phases (Requires FHWA concurrence/involvement if Federal- aid Highway funded project.). Please write in "NA", if Not Applicable. x PROJECT DEVELOPMENT 1 5.1 Prepare Design Data - CDOT Form 463 5.2 Determine Delivery Method 5.3 Prepare Local Agency/CDOT Inter-Governmental Agreement (see also Chapter 3) x 2 5.4 Conduct Consultant Selection/Execute Consultant Agreement •Project Development •Construction Contract Administration (including Fabrication Inspection Services) 3,3A 5.5 Conduct Design Scoping Review Meeting 3,6 5.6 Conduct Public Involvement (If applicable) Exhibit E- Local Agency Contract Administration Checklist Exhibit E- Page 1 of 5 LA WR NO. DESCRIPTION OF TASK RESPONSIBLE PARTY LA CDOT 3 5.7 Conduct Field Inspection Review (FIR) 4 5.8 Conduct Environmental Processes (may require FHWA concurrence/involvement) 5 5.9 Acquire Right-of-Way (may require FHWA concurrence/involvement) 3 5.10 Obtain Utility and Railroad Agreements 3 5.11 Conduct Final Office Review (FOR) 3A 5.12 Justify Force Account Work by the Local Agency 3B 5.13 Justify Proprietary, Sole Source, or Local Agency Furnished Items 3 5.14 Document Design Exceptions - CDOT Form 464 5.15 Seek Permission for use of Guaranty and Warranty Clauses 3 5.18 Prepare Plans, Specifications, Construction Cost Estimates and Submittals 5.19 Comply with Requirements for Off-and On-System Bridges & Other Structural Work 5.20 Update Approvals on PS&E Package if Project Schedule Delayed 5.21 Ensure Authorization of Funds for Construction x 5.22 Use Electronic Signatures 5.23 File Project Development Records/Documentation in ProjectWise x PROJECT DEVELOPMENT CIVIL RIGHTS AND LABOR COMPLIANCE3 6.1 Set Disadvantaged Business Enterprise (DBE) Goals for Consultant and Construction Contracts (CDOT Region Civil Rights Office). x 6.2 Determine Applicability of Davis-Bacon Act This project ☐ is ☐ is not exempt from Davis-Bacon requirements as determined by the functional classification of the project location (Projects located on local roads and rural minor collectors may be exempt.) CDOT Resident Engineer Date x 6.3 Set On-the-Job Training Goals (CDOT Region Civil Rights Office) "NA", if Not Applicable x 6.4 Enforce Prompt Payment Requirements 6.5 Use Electronic Tracking and Submission Systems – B2GNow ☐ LCPtracker ☐ 3 6.6 Prepare/submit Title VI Plan and Incorporate Title VI Assurances 6,7 Ensure the correct Federal Wage Decision, all required Disadvantaged Business Enterprise/On-the-Job Training special provisions and FHWA Form 1273 are included in the Contract (CDOT Resident Engineer) ADVERTISE, BID AND AWARD of CONSTRUCTION PROJECTS Federal Project (use 7.1 series in Chapter 7) ☐ Non-Federal Project (Use 7.2 series in Chapter 7) ☐ 6,7 Obtain Approval for Advertisement Period of Less Than Three Weeks; 7 Advertise for Bids 7 Concurrence to Advertise 7 Distribute “Advertisement Set” of Plans and Specifications 7 Review Worksite & Plan Details w/ Prospective Bidders While Project Is Under Ad 7 Open Bids 7 Process Bids for Compliance Check CDOT Form 1415 – Commitment Confirmation when the low bidder meets DBE goals. (Please write in "NA", if Not Applicable) x Evaluate CDOT Form 1416 - Good Faith Effort Report and determine if the Contractor has made a good faith effort when the low bidder does not meet DBE goals. "NA", if Not Applicable. x Submit required documentation for CDOT award concurrence Concurrence from CDOT to Award x Approve Rejection of Low Bidder x 7,8 Award Contract (federal) Exhibit E- Page 2 of 5 LA WR NO. DESCRIPTION OF TASK RESPONSIBLE PARTY LA CDOT 8 Provide “Award” and “Record” Sets of Plans and Specifications (federal) CONSTRUCTION MANAGEMENT 8 Intro File Project Construction Records/Documentation in ProjectWise or as directed x 8 8.1 Issue Notice to Proceed to the Contractor 8 8.2 Project Safety 8 8.3 Conduct Conferences: Pre-construction Conference (Appendix B) •Fabrication Inspection Notifications Pre-survey •Construction staking •Monumentation Partnering (Optional) Structural Concrete Pre-Pour (Agenda is in CDOT Construction Manual) (If applicable) Concrete Pavement Pre-Paving (Agenda is in CDOT Construction Manual) (If applicable) HMA Pre-Paving (Agenda is in CDOT Construction Manual) (If applicable) 8 8.4 Develop and distribute Public Notice of Planned Construction to media and local residents 9 8.5 Supervise Construction A Professional Engineer (PE) registered in Colorado, who will be “in responsible charge of construction supervision.” _____________________________________________ _________________ Local Agency Professional Engineer or CDOT Resident Engineer Phone number Provide competent, experienced staff who will ensure the Contract work is constructed in accordance with the plans and specifications Construction inspection and documentation (including projects with structures) Fabrication Inspection and documentation (If applicable) 9 8.6 Review and Approve Shop Drawings 9 8.7 Perform Traffic Control Inspections 9 8.8 Perform Construction Surveying 9 8.9 Monument Right-of-Way 9,9A 8.10 Prepare and Approve Interim and Final Contractor Pay Estimates. Collect and review CDOT Form 1418 (or equivalent) or use compliance software system. Provide the name and phone number of the person authorized for this task. _____________________________________________ ____________________ Local Agency Representative Phone number 9 8.11 Prepare and Approve Interim and Final Utility and Railroad Billings 9B 8.12 Prepare and Authorize Change Orders x 9B 8.13 Submit Change Order Package to CDOT x 9A 8.14 Prepare Local Agency Reimbursement Requests x 9 8.15 Monitor Project Financial Status 9 8.16 Prepare and Submit Monthly Progress Reports 9 8.17 Resolve Contractor Claims and Disputes 8.18 Conduct Routine and Random Project Reviews Provide the name and phone number of the person responsible for this task. _____________________________________________ ____________________ CDOT Resident Engineer Phone number x 9 8.19 Ongoing Oversight of DBE Participation x Exhibit E- Page 3 of 5 LA WR NO. DESCRIPTION OF TASK RESPONSIBLE PARTY LA CDOT MATERIALS 9,9C 9.1 Discuss Materials at Pre-Construction Meeting •Buy America documentation required prior to installation of steel 9,9C 9.2 Complete CDOT Form 250 - Materials Documentation Record •Generate form, which includes determining the minimum number of required tests and applicable material submittals for all materials placed on the project •Update the form as work progresses •Complete and distribute form after work is completed 9C 9.3 Perform Project Acceptance Samples and Tests 9C 9.4 Perform Laboratory Acceptance Tests 9C 9.6 Accept Manufactured Products Inspection of structural components: •Fabrication of structural steel and pre-stressed concrete structural components •Bridge modular expansion devices (0” to 6” or greater) •Fabrication of bearing devices 9C 9.6 Approve Sources of Materials 9C 9.7 Independent Assurance Testing (IAT) Local Agency Procedures ☐ CDOT Procedures ☐ •Generate IAT schedule •Schedule and provide notification •Conduct IAT 9C 9.8 Approve mix designs •Concrete •Hot mix asphalt 9C 9.9 Check Final Materials Documentation 9C 9.10 Complete and Distribute Final Materials Documentation CONSTRUCTION CIVIL RIGHTS AND LABOR COMPLIANCE 9 10.1 Fulfill Project Bulletin Board and Pre-Construction Packet Requirements 8,9 10.2 Process CDOT Form 205 - Sublet Permit Application and CDOT Form 1425 – Supplier Application Approval Request. Review & sign completed forms, or review/approve in compliance software system, as applicable, & submit to Region Civil Rights Office. 9 10.3 Conduct Equal Employment Opportunity and Labor Compliance Verification Employee Interviews. Complete CDOT Form 2809 10.4 Monitor Disadvantaged Business Enterprise Participation to Ensure Compliance with the “Commercially Useful Function” Requirements 9 10.5 Conduct Interviews When Project Utilizes On-the-Job Trainees. •Complete CDOT Form 1337 – Contractor Commitment to Meet OJT Requirements. •Complete CDOT Form 838 – OJT Trainee / Apprentice Record. •Complete CDOT Form 200 - OJT Training Questionnaire 9 10.6 Check Certified Payrolls (Contact the Region Civil Rights Office for training reqmts.) 9 10.7 Submit FHWA Form 1391 - Highway Construction Contractor’s Annual EEO Report 10.8 Contract Compliance and Project Site Reviews x FINALS 11.1 Conduct Final Project Inspection & Final Inspection of Structures, if applicable x 10 11.2 Write Final Project Acceptance Letter 10 11.3 Advertise for Final Settlement 11 11.4 Prepare and Distribute Final As-Constructed Plans 11 11.5 Prepare EEO Certification and Collect EEO Forms 11 11.6 Check Final Quantities, Plans, and Pay Estimate; Check Project Documentation; and submit Final Certifications Exhibit E- Page 4 of 5 LA WK NO. DESCRIPTION OF TASK RESPONSIBLE PARTY LA CDOT 11 11.7 Check Material Documentation and Accept Final Material Certification (See Chapter 9) 11.8 Review CDOT Form 1419 x 11.9 Submit CDOT Professional Services Closeout Report Form 11.10 Complete and Submit CDOT Form 1212 LA – Final Acceptance Report (by CDOT) x 11 11.11 Process Final Payment 11.12 Close out Local Project x 11.13 Complete and Submit CDOT Form 950 - Project Closure x 11 11.14 Retain Project Records 11 11.15 Retain Final Version of Local Agency Contract Administration Checklist cc: CDOT Resident Engineer/Project Manager CDOT Region Program Engineer CDOT Region Civil Rights Office CDOT Region Materials Engineer CDOT Contracts and Market Analysis Branch Local Agency Project Manager Exhibit E- Page 5 of 5 Exhibit F - Page 1 of 1 EXHIBIT F CERTIFICATION FOR FEDERAL-AID CONTRACTS The Local Agency certifies, by signing this Agreement, to the best of its knowledge and belief, that: No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, Agreement, loan, or cooperative agreement. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer of Congress, or an employee of a Member of Congress in connection with this Federal contract, Agreement, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. The prospective participant also agrees by submitting his or her bid or proposal that he or she shall require that the language of this certification be included in all lower tier subcontracts, which exceed $100,000 and that all such sub- recipients shall certify and disclose accordingly. Exhibit G- Page 1 of 1 EXHIBIT G DISADVANTAGED BUSINESS ENTERPRISES SECTION 1. Policy It is the policy of the Colorado Department of Transportation (CDOT) that Disadvantaged Business Enterprises (DBEs) shall have the maximum opportunity to participate in the performance of contracts financed in whole or in part with Federal funds under this agreement, pursuant to 49 CFR Part 26. Accordingly, CDOT’s federally approved DBE Program Plan shall apply to this agreement. SECTION 2. Subrecipient and Participant Obligation. The Local Agency and its subrecipients agrees to ensure that DBEs certified through the Colorado Unified Certification Program have the maximum opportunity to participate in the performance of contracts and subcontracts financed in whole or in part with Federal funds provided under this agreement. All participants on contracts and subcontracts financed in whole or in part with Federal funds provided under this Agreement shall take all necessary and reasonable steps in accordance with the CDOT’s federally approved DBE Program Plan to ensure that DBEs have the maximum opportunity to compete for and perform contracts. Local Agency subrecipients and their contractors shall not discriminate on the basis of race, color, national origin, or sex in the award and performance of CDOT and federally assisted contracts. SECTION 3. DBE Program. The Local Agency subrecipient shall be responsible for complying with CDOT’s FHWA-approved DBE Program Plan. Local Agency requirements can be found at: https://www.codot.gov/business/civilrights Exhibit H - Page 1 of 2 EXHIBIT H LOCAL AGENCY PROCEDURES FOR CONSULTANT SERVICES Title 23 Code of Federal Regulations (CFR) 172 applies to a federally funded Local Agency project agreement administered by CDOT that involves professional consultant services. 23 CFR 172.1 states “The policies and procedures involve federally funded contracts for engineering and design related services for projects subject to the provisions of 23 U.S.C. 112(a) and are issued to ensure that a qualified consultant is obtained through an equitable selection process, that prescribed work is properly accomplished in a timely manner, and at fair and reasonable cost” and according to 23 CFR 172.5 “Price shall not be used as a factor in the analysis and selection phase.” Therefore, local agencies must comply with these CFR requirements when obtaining professional consultant services under a federally funded consultant contract administered by CDOT. CDOT has formulated its procedures in Procedural Directive (P.D.) 400.1 and the related operations guidebook titled "Obtaining Professional Consultant Services". This directive and guidebook incorporate requirements from both Federal and State regulations, i.e., 23 CFR 172 and CRS §24-30-1401 et seq. Copies of the directive and the guidebook may be obtained upon request from CDOT's Agreements and Consultant Management Unit. [Local agencies should have their own written procedures on file for each method of procurement that addresses the items in 23 CFR 172]. Because the procedures and laws described in the Procedural Directive and the guidebook are quite lengthy, the subsequent steps serve as a short-hand guide to CDOT procedures that a Local Agency must follow in obtaining professional consultant services. This guidance follows the format of 23 CFR 172. The steps are: 1.The contracting Local Agency shall document the need for obtaining professional services. 2.Prior to solicitation for consultant services, the contracting Local Agency shall develop a detailed scope of work and a list of evaluation factors and their relative importance. The evaluation factors are those identified in C.R.S. 24-30-1403. Also, a detailed cost estimate should be prepared for use during negotiations. 3.The contracting agency must advertise for contracts in conformity with the requirements of C.R.S. 24-30- 1405. The public notice period, when such notice is required, is a minimum of 15 days prior to the selection of the three most qualified firms and the advertising should be done in one or more daily newspapers of general circulation. 4.The Local Agency shall not advertise any federal aid contract without prior review by the CDOT Regional Civil Rights Office (RCRO) to determine whether the contract shall be subject to a DBE contract goal. If the RCRO determines a goal is necessary, then the Local Agency shall include the goal and the applicable provisions within the advertisement. The Local Agency shall not award a contract to any Contractor or Consultant without the confirmation by the CDOT Civil Rights and Business Resource Center that the Contractor or Consultant has demonstrated good faith efforts. The Local Agency shall work with the CDOT RCRO to ensure compliance with the established terms during the performance of the contract. 5.The Local Agency shall require that all contractors pay subcontractors for satisfactory performance of work no later than 30 days after the receipt of payment for that work from the contractor. For construction projects, this time period shall be reduced to seven days in accordance with Colorado Revised Statute 24-91-103(2). If the Local Agency withholds retainage from contractors and/or allows contractors to withhold retainage from subcontractors, such retainage provisions must comply with 49 CFR 26.29. 6.Payments to all Subconsultants shall be made within thirty days of receipt of payment from [the Local Agency] or no later than ninety days from the date of the submission of a complete invoice from the Subconsultant, whichever occurs first. If the Consultant has good cause to dispute an amount invoiced by a Subconsultant, the Consultant shall notify [the Local Agency] no later than the required date for payment. Such notification shall include the amount disputed and justification for the withholding. The Consultant shall maintain records of payment that show amounts paid to all Subconsultants. Good cause does not include the Consultant’s failure to submit an invoice to the Local Agency or to deposit payments made. 7.The analysis and selection of the consultants shall be done in accordance with CRS §24-30-1403. This section of the regulation identifies the criteria to be used in the evaluation of CDOT pre-qualified prime consultants and their team. It also shows which criteria are used to short-list and to make a final selection. The short-list is based on the following evaluation factors: a.Qualifications, Exhibit H - Page 2 of 2 b.Approach to the Work, c.Ability to furnish professional services. d.Anticipated design concepts, and e.Alternative methods of approach for furnishing the professional services. Evaluation factors for final selection are the consultant's: a.Abilities of their personnel, b.Past performance, c.Willingness to meet the time and budget requirement, d.Location, e.Current and projected work load, f.Volume of previously awarded contracts, and g.Involvement of minority consultants. 8.Once a consultant is selected, the Local Agency enters into negotiations with the consultant to obtain a fair and reasonable price for the anticipated work. Pre-negotiation audits are prepared for contracts expected to be greater than $50,000. Federal reimbursements for costs are limited to those costs allowable under the cost principles of 48 CFR 31. Fixed fees (profit) are determined with consideration given to size, complexity, duration, and degree of risk involved in the work. Profit is in the range of six to 15 percent of the total direct and indirect costs. 9.A qualified Local Agency employee shall be responsible and in charge of the Work to ensure that the work being pursued is complete, accurate, and consistent with the terms, conditions, and specifications of the contract. At the end of Work, the Local Agency prepares a performance evaluation (a CDOT form is available) on the consultant. CRS §§24-30-1401 THROUGH 24-30-1408, 23 CFR PART 172, AND P.D. 400.1, PROVIDE ADDITIONAL DETAILS FOR COMPLYING WITH THE PRECEEDING EIGHT (8) STEPS. FHWA-1273 – Revised October 23, 2023 REQUIRED CONTRACT PROVISIONS FEDERAL-AID CONSTRUCTION CONTRACTS I. General II. Nondiscrimination III. Non-segregated Facilities IV.Davis-Bacon and Related Act Provisions V.Contract Work Hours and Safety Standards Act Provisions VI.Subletting or Assigning the Contract VII.Safety: Accident Prevention VIII. False Statements Concerning Highway Projects IX.Implementation of Clean Air Act and Federal Water Pollution Control Act X. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion XI. Certification Regarding Use of Contract Funds for Lobbying XII. Use of United States-Flag Vessels: ATTACHMENTS A. Employment and Materials Preference for Appalachian Development Highway System or Appalachian Local Access Road Contracts (included in Appalachian contracts only) I. GENERAL 1.Form FHWA-1273 must be physically incorporated in each construction contract funded under title 23, United States Code, as required in 23 CFR 633.102(b) (excluding emergency contracts solely intended for debris removal). The contractor (or subcontractor) must insert this form in each subcontract and further require its inclusion in all lower tier subcontracts (excluding purchase orders, rental agreements and other agreements for supplies or services). 23 CFR 633.102(e). The applicable requirements of Form FHWA-1273 are incorporated by reference for work done under any purchase order, rental agreement or agreement for other services. The prime contractor shall be responsible for compliance by any subcontractor, lower-tier subcontractor or service provider. 23 CFR 633.102(e). Form FHWA-1273 must be included in all Federal-aid design- build contracts, in all subcontracts and in lower tier subcontracts (excluding subcontracts for design services, purchase orders, rental agreements and other agreements for supplies or services) in accordance with 23 CFR 633.102. The design-builder shall be responsible for compliance by any subcontractor, lower-tier subcontractor or service provider. Contracting agencies may reference Form FHWA-1273 in solicitation-for-bids or request-for-proposals documents, however, the Form FHWA-1273 must be physically incorporated (not referenced) in all contracts, subcontracts and lower-tier subcontracts (excluding purchase orders, rental agreements and other agreements for supplies or services related to a construction contract). 23 CFR 633.102(b). 2. Subject to the applicability criteria noted in the following sections, these contract provisions shall apply to all work performed on the contract by the contractor's own organization and with the assistance of workers under the contractor's immediate superintendence and to all work performed on the contract by piecework, station work, or by subcontract. 23 CFR 633.102(d). 3. A breach of any of the stipulations contained in these Required Contract Provisions may be sufficient grounds for withholding of progress payments, withholding of final payment, termination of the contract, suspension / debarment or any other action determined to be appropriate by the contracting agency and FHWA. 4. Selection of Labor: During the performance of this contract, the contractor shall not use convict labor for any purpose within the limits of a construction project on a Federal-aid highway unless it is labor performed by convicts who are on parole, supervised release, or probation. 23 U.S.C. 114(b). The term Federal-aid highway does not include roadways functionally classified as local roads or rural minor collectors. 23 U.S.C. 101(a). II. NONDISCRIMINATION (23 CFR 230.107(a); 23 CFR Part 230, Subpart A, Appendix A; EO 11246) The provisions of this section related to 23 CFR Part 230, Subpart A, Appendix A are applicable to all Federal-aid construction contracts and to all related construction subcontracts of $10,000 or more. The provisions of 23 CFR Part 230 are not applicable to material supply, engineering, or architectural service contracts. In addition, the contractor and all subcontractors must comply with the following policies: Executive Order 11246, 41 CFR Part 60, 29 CFR Parts 1625-1627, 23 U.S.C. 140, Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794), Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000d et seq.), and related regulations including 49 CFR Parts 21, 26, and 27; and 23 CFR Parts 200, 230, and 633. The contractor and all subcontractors must comply with: the requirements of the Equal Opportunity Clause in 41 CFR 60- 1.4(b) and, for all construction contracts exceeding $10,000, the Standard Federal Equal Employment Opportunity Construction Contract Specifications in 41 CFR 60-4.3. Note: The U.S. Department of Labor has exclusive authority to determine compliance with Executive Order 11246 and the policies of the Secretary of Labor including 41 CFR Part 60, and 29 CFR Parts 1625-1627. The contracting agency and the FHWA have the authority and the responsibility to ensure compliance with 23 U.S.C. 140, Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794), and Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000d et seq.), and related regulations including 49 CFR Parts 21, 26, and 27; and 23 CFR Parts 200, 230, and 633. The following provision is adopted from 23 CFR Part 230, Subpart A, Appendix A, with appropriate revisions to conform to the U.S. Department of Labor (US DOL) and FHWA requirements. Exhibit I- Page 1 of 14 EXHIBIT I 1. Equal Employment Opportunity: Equal Employment Opportunity (EEO) requirements not to discriminate and to take affirmative action to assure equal opportunity as set forth under laws, executive orders, rules, regulations (see 28 CFR Part 35, 29 CFR Part 1630, 29 CFR Parts 1625-1627, 41 CFR Part 60 and 49 CFR Part 27) and orders of the Secretary of Labor as modified by the provisions prescribed herein, and imposed pursuant to 23 U.S.C. 140, shall constitute the EEO and specific affirmative action standards for the contractor's project activities under this contract. The provisions of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) set forth under 28 CFR Part 35 and 29 CFR Part 1630 are incorporated by reference in this contract. In the execution of this contract, the contractor agrees to comply with the following minimum specific requirement activities of EEO: a. The contractor will work with the contracting agency and the Federal Government to ensure that it has made every good faith effort to provide equal opportunity with respect to all of its terms and conditions of employment and in their review of activities under the contract. 23 CFR 230.409 (g)(4) & (5). b. The contractor will accept as its operating policy the following statement: "It is the policy of this Company to assure that applicants are employed, and that employees are treated during employment, without regard to their race, religion, sex, sexual orientation, gender identity, color, national origin, age or disability. Such action shall include: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship, pre-apprenticeship, and/or on-the-job training." 2.EEO Officer: The contractor will designate and make known to the contracting officers an EEO Officer who will have the responsibility for and must be capable of effectively administering and promoting an active EEO program and who must be assigned adequate authority and responsibility to do so. 3. Dissemination of Policy: All members of the contractor's staff who are authorized to hire, supervise, promote, and discharge employees, or who recommend such action or are substantially involved in such action, will be made fully cognizant of and will implement the contractor's EEO policy and contractual responsibilities to provide EEO in each grade and classification of employment. To ensure that the above agreement will be met, the following actions will be taken as a minimum: a. Periodic meetings of supervisory and personnel office employees will be conducted before the start of work and then not less often than once every six months, at which time the contractor's EEO policy and its implementation will be reviewed and explained. The meetings will be conducted by the EEO Officer or other knowledgeable company official. b. All new supervisory or personnel office employees will be given a thorough indoctrination by the EEO Officer, covering all major aspects of the contractor's EEO obligations within thirty days following their reporting for duty with the contractor. c. All personnel who are engaged in direct recruitment for the project will be instructed by the EEO Officer in the contractor's procedures for locating and hiring minorities and women. d. Notices and posters setting forth the contractor's EEO policy will be placed in areas readily accessible to employees, applicants for employment and potential employees. e. The contractor's EEO policy and the procedures to implement such policy will be brought to the attention of employees by means of meetings, employee handbooks, or other appropriate means. 4.Recruitment: When advertising for employees, the contractor will include in all advertisements for employees the notation: "An Equal Opportunity Employer." All such advertisements will be placed in publications having a large circulation among minorities and women in the area from which the project work force would normally be derived. a. The contractor will, unless precluded by a valid bargaining agreement, conduct systematic and direct recruitment through public and private employee referral sources likely to yield qualified minorities and women. To meet this requirement, the contractor will identify sources of potential minority group employees and establish with such identified sources procedures whereby minority and women applicants may be referred to the contractor for employment consideration. b. In the event the contractor has a valid bargaining agreement providing for exclusive hiring hall referrals, the contractor is expected to observe the provisions of that agreement to the extent that the system meets the contractor's compliance with EEO contract provisions. Where implementation of such an agreement has the effect of discriminating against minorities or women, or obligates the contractor to do the same, such implementation violates Federal nondiscrimination provisions. c.The contractor will encourage its present employees to refer minorities and women as applicants for employment. Information and procedures with regard to referring such applicants will be discussed with employees. 5. Personnel Actions: Wages, working conditions, and employee benefits shall be established and administered, and personnel actions of every type, including hiring, upgrading, promotion, transfer, demotion, layoff, and termination, shall be taken without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, age or disability. The following procedures shall be followed: a. The contractor will conduct periodic inspections of project sites to ensure that working conditions and employee facilities do not indicate discriminatory treatment of project site personnel. b. The contractor will periodically evaluate the spread of wages paid within each classification to determine any evidence of discriminatory wage practices. c. The contractor will periodically review selected personnel actions in depth to determine whether there is evidence of discrimination. Where evidence is found, the contractor will promptly take corrective action. If the review indicates that the discrimination may extend beyond the actions reviewed, such corrective action shall include all affected persons. d. The contractor will promptly investigate all complaints of alleged discrimination made to the contractor in connection with its obligations under this contract, will attempt to resolve such complaints, and will take appropriate corrective action Exhibit I- Page 2 of 14 within a reasonable time. If the investigation indicates that the discrimination may affect persons other than the complainant, such corrective action shall include such other persons. Upon completion of each investigation, the contractor will inform every complainant of all of their avenues of appeal. 6.Training and Promotion: a. The contractor will assist in locating, qualifying, and increasing the skills of minorities and women who are applicants for employment or current employees. Such efforts should be aimed at developing full journey level status employees in the type of trade or job classification involved. b. Consistent with the contractor's work force requirements and as permissible under Federal and State regulations, the contractor shall make full use of training programs (i.e., apprenticeship and on-the-job training programs for the geographical area of contract performance). In the event a special provision for training is provided under this contract, this subparagraph will be superseded as indicated in the special provision. The contracting agency may reserve training positions for persons who receive welfare assistance in accordance with 23 U.S.C. 140(a). c.The contractor will advise employees and applicants for employment of available training programs and entrance requirements for each. d. The contractor will periodically review the training and promotion potential of employees who are minorities and women and will encourage eligible employees to apply for such training and promotion. 7. Unions: If the contractor relies in whole or in part upon unions as a source of employees, the contractor will use good faith efforts to obtain the cooperation of such unions to increase opportunities for minorities and women. 23 CFR 230.409. Actions by the contractor, either directly or through a contractor's association acting as agent, will include the procedures set forth below: a. The contractor will use good faith efforts to develop, in cooperation with the unions, joint training programs aimed toward qualifying more minorities and women for membership in the unions and increasing the skills of minorities and women so that they may qualify for higher paying employment. b. The contractor will use good faith efforts to incorporate an EEO clause into each union agreement to the end that such union will be contractually bound to refer applicants without regard to their race, color, religion, sex, sexual orientation, gender identity, national origin, age, or disability. c.The contractor is to obtain information as to the referral practices and policies of the labor union except that to the extent such information is within the exclusive possession of the labor union and such labor union refuses to furnish such information to the contractor, the contractor shall so certify to the contracting agency and shall set forth what efforts have been made to obtain such information. d. In the event the union is unable to provide the contractor with a reasonable flow of referrals within the time limit set forth in the collective bargaining agreement, the contractor will, through independent recruitment efforts, fill the employment vacancies without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, age, or disability; making full efforts to obtain qualified and/or qualifiable minorities and women. The failure of a union to provide sufficient referrals (even though it is obligated to provide exclusive referrals under the terms of a collective bargaining agreement) does not relieve the contractor from the requirements of this paragraph. In the event the union referral practice prevents the contractor from meeting the obligations pursuant to Executive Order 11246, as amended, and these special provisions, such contractor shall immediately notify the contracting agency. 8. Reasonable Accommodation for Applicants / Employees with Disabilities: The contractor must be familiar with the requirements for and comply with the Americans with Disabilities Act and all rules and regulations established thereunder. Employers must provide reasonable accommodation in all employment activities unless to do so would cause an undue hardship. 9. Selection of Subcontractors, Procurement of Materials and Leasing of Equipment: The contractor shall not discriminate on the grounds of race, color, religion, sex, sexual orientation, gender identity, national origin, age, or disability in the selection and retention of subcontractors, including procurement of materials and leases of equipment. The contractor shall take all necessary and reasonable steps to ensure nondiscrimination in the administration of this contract. a. The contractor shall notify all potential subcontractors, suppliers, and lessors of their EEO obligations under this contract. b. The contractor will use good faith efforts to ensure subcontractor compliance with their EEO obligations. 10. Assurances Required: a. The requirements of 49 CFR Part 26 and the State DOT’s FHWA-approved Disadvantaged Business Enterprise (DBE) program are incorporated by reference. b.The contractor, subrecipient or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR part 26 in the award and administration of DOT-assisted contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the recipient deems appropriate, which may include, but is not limited to: (1) Withholding monthly progress payments; (2) Assessing sanctions; (3) Liquidated damages; and/or (4) Disqualifying the contractor from future bidding as non- responsible. c.The Title VI and nondiscrimination provisions of U.S. DOT Order 1050.2A at Appendixes A and E are incorporated by reference. 49 CFR Part 21. 11. Records and Reports: The contractor shall keep such records as necessary to document compliance with the EEO requirements. Such records shall be retained for a period of three years following the date of the final payment to the contractor for all contract work and shall be available at reasonable times and places for inspection by authorized representatives of the contracting agency and the FHWA. a. The records kept by the contractor shall document the following: Exhibit I- Page 3 of 14 (1) The number and work hours of minority and non- minority group members and women employed in each work classification on the project; (2) The progress and efforts being made in cooperation with unions, when applicable, to increase employment opportunities for minorities and women; and (3) The progress and efforts being made in locating, hiring, training, qualifying, and upgrading minorities and women. b. The contractors and subcontractors will submit an annual report to the contracting agency each July for the duration of the project indicating the number of minority, women, and non- minority group employees currently engaged in each work classification required by the contract work. This information is to be reported on Form FHWA-1391. The staffing data should represent the project work force on board in all or any part of the last payroll period preceding the end of July. If on-the-job training is being required by special provision, the contractor will be required to collect and report training data. The employment data should reflect the work force on board during all or any part of the last payroll period preceding the end of July. III. NONSEGREGATED FACILITIES This provision is applicable to all Federal-aid construction contracts and to all related construction subcontracts of more than $10,000. 41 CFR 60-1.5. As prescribed by 41 CFR 60-1.8, the contractor must ensure that facilities provided for employees are provided in such a manner that segregation on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin cannot result. The contractor may neither require such segregated use by written or oral policies nor tolerate such use by employee custom. The contractor's obligation extends further to ensure that its employees are not assigned to perform their services at any location under the contractor's control where the facilities are segregated. The term "facilities" includes waiting rooms, work areas, restaurants and other eating areas, time clocks, restrooms, washrooms, locker rooms and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing provided for employees. The contractor shall provide separate or single-user restrooms and necessary dressing or sleeping areas to assure privacy between sexes. IV. DAVIS-BACON AND RELATED ACT PROVISIONS This section is applicable to all Federal-aid construction projects exceeding $2,000 and to all related subcontracts and lower-tier subcontracts (regardless of subcontract size), in accordance with 29 CFR 5.5. The requirements apply to all projects located within the right-of-way of a roadway that is functionally classified as Federal-aid highway. 23 U.S.C. 113. This excludes roadways functionally classified as local roads or rural minor collectors, which are exempt. 23 U.S.C. 101. Where applicable law requires that projects be treated as a project on a Federal-aid highway, the provisions of this subpart will apply regardless of the location of the project. Examples include: Surface Transportation Block Grant Program projects funded under 23 U.S.C. 133 [excluding recreational trails projects], the Nationally Significant Freight and Highway Projects funded under 23 U.S.C. 117, and National Highway Freight Program projects funded under 23 U.S.C. 167. The following provisions are from the U.S. Department of Labor regulations in 29 CFR 5.5 “Contract provisions and related matters” with minor revisions to conform to the FHWA- 1273 format and FHWA program requirements. 1. Minimum wages (29 CFR 5.5) a.Wage rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or otherwise working in construction or development of the project under a development statute), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of basic hourly wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. As provided in paragraphs (d) and (e) of 29 CFR 5.5, the appropriate wage determinations are effective by operation of law even if they have not been attached to the contract. Contributions made or costs reasonably anticipated for bona fide fringe benefits under the Davis-Bacon Act (40 U.S.C. 3141(2)(B)) on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of paragraph 1.e. of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics must be paid the appropriate wage rate and fringe benefits on the wage determination for the classification(s) of work actually performed, without regard to skill, except as provided in paragraph 4. of this section. Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided, That the employer's payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classifications and wage rates conformed under paragraph 1.c. of this section) and the Davis-Bacon poster (WH–1321) must be posted at all times by the contractor and its subcontractors at the site of the work in a prominent and accessible place where it can be easily seen by the workers. b.Frequently recurring classifications. (1) In addition to wage and fringe benefit rates that have been determined to be prevailing under the procedures set forth in 29 CFR part 1, a wage determination may contain, pursuant to § 1.3(f), wage and fringe benefit rates for classifications of laborers and mechanics for which conformance requests are regularly submitted pursuant to paragraph 1.c. of this section, provided that: (i) The work performed by the classification is not performed by a classification in the wage determination for which a prevailing wage rate has been determined; Exhibit I- Page 4 of 14 (ii) The classification is used in the area by the construction industry; and (iii) The wage rate for the classification bears a reasonable relationship to the prevailing wage rates contained in the wage determination. (2) The Administrator will establish wage rates for such classifications in accordance with paragraph 1.c.(1)(iii) of this section. Work performed in such a classification must be paid at no less than the wage and fringe benefit rate listed on the wage determination for such classification. c.Conformance. (1) The contracting officer must require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the contract be classified in conformance with the wage determination. Conformance of an additional classification and wage rate and fringe benefits is appropriate only when the following criteria have been met: (i) The work to be performed by the classification requested is not performed by a classification in the wage determination; and (ii) The classification is used in the area by the construction industry; and (iii) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination. (2) The conformance process may not be used to split, subdivide, or otherwise avoid application of classifications listed in the wage determination. (3) If the contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and the contracting officer agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), a report of the action taken will be sent by the contracting officer by email to DBAconformance@dol.gov. The Administrator, or an authorized representative, will approve, modify, or disapprove every additional classification action within 30 days of receipt and so advise the contracting officer or will notify the contracting officer within the 30–day period that additional time is necessary. (4) In the event the contractor, the laborers or mechanics to be employed in the classification or their representatives, and the contracting officer do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), the contracting officer will, by email to DBAconformance@dol.gov, refer the questions, including the views of all interested parties and the recommendation of the contracting officer, to the Administrator for determination. The Administrator, or an authorized representative, will issue a determination within 30 days of receipt and so advise the contracting officer or will notify the contracting officer within the 30–day period that additional time is necessary. (5) The contracting officer must promptly notify the contractor of the action taken by the Wage and Hour Division under paragraphs 1.c.(3) and (4) of this section. The contractor must furnish a written copy of such determination to each affected worker or it must be posted as a part of the wage determination. The wage rate (including fringe benefits where appropriate) determined pursuant to paragraph 1.c.(3) or (4) of this section must be paid to all workers performing work in the classification under this contract from the first day on which work is performed in the classification. d.Fringe benefits not expressed as an hourly rate. Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor may either pay the benefit as stated in the wage determination or may pay another bona fide fringe benefit or an hourly cash equivalent thereof. e.Unfunded plans. If the contractor does not make payments to a trustee or other third person, the contractor may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, Provided, That the Secretary of Labor has found, upon the written request of the contractor, in accordance with the criteria set forth in § 5.28, that the applicable standards of the Davis-Bacon Act have been met. The Secretary of Labor may require the contractor to set aside in a separate account assets for the meeting of obligations under the plan or program. f.Interest. In the event of a failure to pay all or part of the wages required by the contract, the contractor will be required to pay interest on any underpayment of wages. 2. Withholding (29 CFR 5.5) a.Withholding requirements. The contracting agency may, upon its own action, or must, upon written request of an authorized representative of the Department of Labor, withhold or cause to be withheld from the contractor so much of the accrued payments or advances as may be considered necessary to satisfy the liabilities of the prime contractor or any subcontractor for the full amount of wages and monetary relief, including interest, required by the clauses set forth in this section for violations of this contract, or to satisfy any such liabilities required by any other Federal contract, or federally assisted contract subject to Davis-Bacon labor standards, that is held by the same prime contractor (as defined in § 5.2). The necessary funds may be withheld from the contractor under this contract, any other Federal contract with the same prime contractor, or any other federally assisted contract that is subject to Davis-Bacon labor standards requirements and is held by the same prime contractor, regardless of whether the other contract was awarded or assisted by the same agency, and such funds may be used to satisfy the contractor liability for which the funds were withheld. In the event of a contractor's failure to pay any laborer or mechanic, including any apprentice or helper working on the site of the work all or part of the wages required by the contract, or upon the contractor's failure to submit the required records as discussed in paragraph 3.d. of this section, the contracting agency may on its own initiative and after written notice to the contractor, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased. b.Priority to withheld funds. The Department has priority to funds withheld or to be withheld in accordance with paragraph Exhibit I- Page 5 of 14 2.a. of this section or Section V, paragraph 3.a., or both, over claims to those funds by: (1) A contractor's surety(ies), including without limitation performance bond sureties and payment bond sureties; (2) A contracting agency for its reprocurement costs; (3) A trustee(s) (either a court-appointed trustee or a U.S. trustee, or both) in bankruptcy of a contractor, or a contractor's bankruptcy estate; (4) A contractor's assignee(s); (5) A contractor's successor(s); or (6) A claim asserted under the Prompt Payment Act, 31 U.S.C. 3901–3907. 3. Records and certified payrolls (29 CFR 5.5) a. Basic record requirements (1) Length of record retention. All regular payrolls and other basic records must be maintained by the contractor and any subcontractor during the course of the work and preserved for all laborers and mechanics working at the site of the work (or otherwise working in construction or development of the project under a development statute) for a period of at least 3 years after all the work on the prime contract is completed. (2) Information required. Such records must contain the name; Social Security number; last known address, telephone number, and email address of each such worker; each worker's correct classification(s) of work actually performed; hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in 40 U.S.C. 3141(2)(B) of the Davis-Bacon Act); daily and weekly number of hours actually worked in total and on each covered contract; deductions made; and actual wages paid. (3) Additional records relating to fringe benefits. Whenever the Secretary of Labor has found under paragraph 1.e. of this section that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in 40 U.S.C. 3141(2)(B) of the Davis-Bacon Act, the contractor must maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits. (4) Additional records relating to apprenticeship. Contractors with apprentices working under approved programs must maintain written evidence of the registration of apprenticeship programs, the registration of the apprentices, and the ratios and wage rates prescribed in the applicable programs. b. Certified payroll requirements (1) Frequency and method of submission. The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts- covered work is performed, certified payrolls to the contracting agency. The prime contractor is responsible for the submission of all certified payrolls by all subcontractors. A contracting agency or prime contractor may permit or require contractors to submit certified payrolls through an electronic system, as long as the electronic system requires a legally valid electronic signature; the system allows the contractor, the contracting agency, and the Department of Labor to access the certified payrolls upon request for at least 3 years after the work on the prime contract has been completed; and the contracting agency or prime contractor permits other methods of submission in situations where the contractor is unable or limited in its ability to use or access the electronic system. (2) Information required. The certified payrolls submitted must set out accurately and completely all of the information required to be maintained under paragraph 3.a.(2) of this section, except that full Social Security numbers and last known addresses, telephone numbers, and email addresses must not be included on weekly transmittals. Instead, the certified payrolls need only include an individually identifying number for each worker ( e.g., the last four digits of the worker's Social Security number). The required weekly certified payroll information may be submitted using Optional Form WH–347 or in any other format desired. Optional Form WH–347 is available for this purpose from the Wage and Hour Division website at https://www.dol.gov/sites/dolgov/files/WHD/ legacy/files/wh347/.pdf or its successor website. It is not a violation of this section for a prime contractor to require a subcontractor to provide full Social Security numbers and last known addresses, telephone numbers, and email addresses to the prime contractor for its own records, without weekly submission by the subcontractor to the contracting agency. (3) Statement of Compliance. Each certified payroll submitted must be accompanied by a “Statement of Compliance,” signed by the contractor or subcontractor, or the contractor's or subcontractor's agent who pays or supervises the payment of the persons working on the contract, and must certify the following: (i) That the certified payroll for the payroll period contains the information required to be provided under paragraph 3.b. of this section, the appropriate information and basic records are being maintained under paragraph 3.a. of this section, and such information and records are correct and complete; (ii) That each laborer or mechanic (including each helper and apprentice) working on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in 29 CFR part 3; and (iii) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification(s) of work actually performed, as specified in the applicable wage determination incorporated into the contract. (4) Use of Optional Form WH–347. The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH–347 will satisfy the requirement for submission of the “Statement of Compliance” required by paragraph 3.b.(3) of this section. Exhibit I- Page 6 of 14 (5) Signature. The signature by the contractor, subcontractor, or the contractor's or subcontractor's agent must be an original handwritten signature or a legally valid electronic signature. (6) Falsification. The falsification of any of the above certifications may subject the contractor or subcontractor to civil or criminal prosecution under 18 U.S.C. 1001 and 31 U.S.C. 3729. (7) Length of certified payroll retention. The contractor or subcontractor must preserve all certified payrolls during the course of the work and for a period of 3 years after all the work on the prime contract is completed. c. Contracts, subcontracts, and related documents. The contractor or subcontractor must maintain this contract or subcontract and related documents including, without limitation, bids, proposals, amendments, modifications, and extensions. The contractor or subcontractor must preserve these contracts, subcontracts, and related documents during the course of the work and for a period of 3 years after all the work on the prime contract is completed. d. Required disclosures and access (1) Required record disclosures and access to workers. The contractor or subcontractor must make the records required under paragraphs 3.a. through 3.c. of this section, and any other documents that the contracting agency, the State DOT, the FHWA, or the Department of Labor deems necessary to determine compliance with the labor standards provisions of any of the applicable statutes referenced by § 5.1, available for inspection, copying, or transcription by authorized representatives of the contracting agency, the State DOT, the FHWA, or the Department of Labor, and must permit such representatives to interview workers during working hours on the job. (2) Sanctions for non-compliance with records and worker access requirements. If the contractor or subcontractor fails to submit the required records or to make them available, or refuses to permit worker interviews during working hours on the job, the Federal agency may, after written notice to the contractor, sponsor, applicant, owner, or other entity, as the case may be, that maintains such records or that employs such workers, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds. Furthermore, failure to submit the required records upon request or to make such records available, or to permit worker interviews during working hours on the job, may be grounds for debarment action pursuant to § 5.12. In addition, any contractor or other person that fails to submit the required records or make those records available to WHD within the time WHD requests that the records be produced will be precluded from introducing as evidence in an administrative proceeding under 29 CFR part 6 any of the required records that were not provided or made available to WHD. WHD will take into consideration a reasonable request from the contractor or person for an extension of the time for submission of records. WHD will determine the reasonableness of the request and may consider, among other things, the location of the records and the volume of production. (3) Required information disclosures. Contractors and subcontractors must maintain the full Social Security number and last known address, telephone number, and email address of each covered worker, and must provide them upon request to the contracting agency, the State DOT, the FHWA, the contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or other compliance action. 4. Apprentices and equal employment opportunity (29 CFR 5.5) a. Apprentices (1) Rate of pay. Apprentices will be permitted to work at less than the predetermined rate for the work they perform when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship (OA), or with a State Apprenticeship Agency recognized by the OA. A person who is not individually registered in the program, but who has been certified by the OA or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice, will be permitted to work at less than the predetermined rate for the work they perform in the first 90 days of probationary employment as an apprentice in such a program. In the event the OA or a State Apprenticeship Agency recognized by the OA withdraws approval of an apprenticeship program, the contractor will no longer be permitted to use apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved. (2) Fringe benefits. Apprentices must be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the applicable apprentice classification, fringe benefits must be paid in accordance with that determination. (3) Apprenticeship ratio. The allowable ratio of apprentices to journeyworkers on the job site in any craft classification must not be greater than the ratio permitted to the contractor as to the entire work force under the registered program or the ratio applicable to the locality of the project pursuant to paragraph 4.a.(4) of this section. Any worker listed on a payroll at an apprentice wage rate, who is not registered or otherwise employed as stated in paragraph 4.a.(1) of this section, must be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under this section must be paid not less than the applicable wage rate on the wage determination for the work actually performed. (4) Reciprocity of ratios and wage rates. Where a contractor is performing construction on a project in a locality other than the locality in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyworker's hourly rate) applicable within the locality in which the construction is being performed must be observed. If there is no applicable ratio or wage rate for the locality of the project, the ratio and wage rate specified in the contractor's registered program must be observed. b. Equal employment opportunity. The use of apprentices and journeyworkers under this part must be in conformity with Exhibit I- Page 7 of 14 the equal employment opportunity requirements of Executive Order 11246, as amended, and 29 CFR part 30. c. Apprentices and Trainees (programs of the U.S. DOT). Apprentices and trainees working under apprenticeship and skill training programs which have been certified by the Secretary of Transportation as promoting EEO in connection with Federal-aid highway construction programs are not subject to the requirements of paragraph 4 of this Section IV. 23 CFR 230.111(e)(2). The straight time hourly wage rates for apprentices and trainees under such programs will be established by the particular programs. The ratio of apprentices and trainees to journeyworkers shall not be greater than permitted by the terms of the particular program. 5. Compliance with Copeland Act requirements. The contractor shall comply with the requirements of 29 CFR part 3, which are incorporated by reference in this contract as provided in 29 CFR 5.5. 6. Subcontracts. The contractor or subcontractor must insert FHWA-1273 in any subcontracts, along with the applicable wage determination(s) and such other clauses or contract modifications as the contracting agency may by appropriate instructions require, and a clause requiring the subcontractors to include these clauses and wage determination(s) in any lower tier subcontracts. The prime contractor is responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in this section. In the event of any violations of these clauses, the prime contractor and any subcontractor(s) responsible will be liable for any unpaid wages and monetary relief, including interest from the date of the underpayment or loss, due to any workers of lower-tier subcontractors, and may be subject to debarment, as appropriate. 29 CFR 5.5. 7. Contract termination: debarment. A breach of the contract clauses in 29 CFR 5.5 may be grounds for termination of the contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR 5.12. 8. Compliance with Davis-Bacon and Related Act requirements. All rulings and interpretations of the Davis- Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are herein incorporated by reference in this contract as provided in 29 CFR 5.5. 9. Disputes concerning labor standards. As provided in 29 CFR 5.5, disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the contractor (or any of its subcontractors) and the contracting agency, the U.S. Department of Labor, or the employees or their representatives. 10. Certification of eligibility. a. By entering into this contract, the contractor certifies that neither it nor any person or firm who has an interest in the contractor's firm is a person or firm ineligible to be awarded Government contracts by virtue of 40 U.S.C. 3144(b) or § 5.12(a). b. No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of 40 U.S.C. 3144(b) or § 5.12(a). c. The penalty for making false statements is prescribed in the U.S. Code, Title 18 Crimes and Criminal Procedure, 18 U.S.C. 1001. 11. Anti-retaliation. It is unlawful for any person to discharge, demote, intimidate, threaten, restrain, coerce, blacklist, harass, or in any other manner discriminate against, or to cause any person to discharge, demote, intimidate, threaten, restrain, coerce, blacklist, harass, or in any other manner discriminate against, any worker or job applicant for: a. Notifying any contractor of any conduct which the worker reasonably believes constitutes a violation of the DBA, Related Acts, this part, or 29 CFR part 1 or 3; b. Filing any complaint, initiating or causing to be initiated any proceeding, or otherwise asserting or seeking to assert on behalf of themselves or others any right or protection under the DBA, Related Acts, this part, or 29 CFR part 1 or 3; c. Cooperating in any investigation or other compliance action, or testifying in any proceeding under the DBA, Related Acts, this part, or 29 CFR part 1 or 3; or d. Informing any other person about their rights under the DBA, Related Acts, this part, or 29 CFR part 1 or 3. V. CONTRACT WORK HOURS AND SAFETY STANDARDS ACT Pursuant to 29 CFR 5.5(b), the following clauses apply to any Federal-aid construction contract in an amount in excess of $100,000 and subject to the overtime provisions of the Contract Work Hours and Safety Standards Act. These clauses shall be inserted in addition to the clauses required by 29 CFR 5.5(a) or 29 CFR 4.6. As used in this paragraph, the terms laborers and mechanics include watchpersons and guards. 1. Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek. 29 CFR 5.5. 2. Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph 1. of this section the contractor and any subcontractor responsible therefor shall be liable for the unpaid wages and interest from the date of the underpayment. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or Exhibit I- Page 8 of 14 mechanic, including watchpersons and guards, employed in violation of the clause set forth in paragraph 1. of this section, in the sum currently provided in 29 CFR 5.5(b)(2)* for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph 1. of this section. * $31 as of January 15, 2023 (See 88 FR 88 FR 2210) as may be adjusted annually by the Department of Labor, pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990. 3. Withholding for unpaid wages and liquidated damages a. Withholding process. The FHWA or the contracting agency may, upon its own action, or must, upon written request of an authorized representative of the Department of Labor, withhold or cause to be withheld from the contractor so much of the accrued payments or advances as may be considered necessary to satisfy the liabilities of the prime contractor or any subcontractor for any unpaid wages; monetary relief, including interest; and liquidated damages required by the clauses set forth in this section on this contract, any other Federal contract with the same prime contractor, or any other federally assisted contract subject to the Contract Work Hours and Safety Standards Act that is held by the same prime contractor (as defined in § 5.2). The necessary funds may be withheld from the contractor under this contract, any other Federal contract with the same prime contractor, or any other federally assisted contract that is subject to the Contract Work Hours and Safety Standards Act and is held by the same prime contractor, regardless of whether the other contract was awarded or assisted by the same agency, and such funds may be used to satisfy the contractor liability for which the funds were withheld. b. Priority to withheld funds. The Department has priority to funds withheld or to be withheld in accordance with Section IV paragraph 2.a. or paragraph 3.a. of this section, or both, over claims to those funds by: (1) A contractor's surety(ies), including without limitation performance bond sureties and payment bond sureties; (2) A contracting agency for its reprocurement costs; (3) A trustee(s) (either a court-appointed trustee or a U.S. trustee, or both) in bankruptcy of a contractor, or a contractor's bankruptcy estate; (4) A contractor's assignee(s); (5) A contractor's successor(s); or (6) A claim asserted under the Prompt Payment Act, 31 U.S.C. 3901–3907. 4. Subcontracts. The contractor or subcontractor must insert in any subcontracts the clauses set forth in paragraphs 1. through 5. of this section and a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor is responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs 1. through 5. In the event of any violations of these clauses, the prime contractor and any subcontractor(s) responsible will be liable for any unpaid wages and monetary relief, including interest from the date of the underpayment or loss, due to any workers of lower- tier subcontractors, and associated liquidated damages and may be subject to debarment, as appropriate. 5. Anti-retaliation. It is unlawful for any person to discharge, demote, intimidate, threaten, restrain, coerce, blacklist, harass, or in any other manner discriminate against, or to cause any person to discharge, demote, intimidate, threaten, restrain, coerce, blacklist, harass, or in any other manner discriminate against, any worker or job applicant for: a. Notifying any contractor of any conduct which the worker reasonably believes constitutes a violation of the Contract Work Hours and Safety Standards Act (CWHSSA) or its implementing regulations in this part; b. Filing any complaint, initiating or causing to be initiated any proceeding, or otherwise asserting or seeking to assert on behalf of themselves or others any right or protection under CWHSSA or this part; c. Cooperating in any investigation or other compliance action, or testifying in any proceeding under CWHSSA or this part; or d. Informing any other person about their rights under CWHSSA or this part. VI. SUBLETTING OR ASSIGNING THE CONTRACT This provision is applicable to all Federal-aid construction contracts on the National Highway System pursuant to 23 CFR 635.116. 1. The contractor shall perform with its own organization contract work amounting to not less than 30 percent (or a greater percentage if specified elsewhere in the contract) of the total original contract price, excluding any specialty items designated by the contracting agency. Specialty items may be performed by subcontract and the amount of any such specialty items performed may be deducted from the total original contract price before computing the amount of work required to be performed by the contractor's own organization (23 CFR 635.116). a. The term “perform work with its own organization” in paragraph 1 of Section VI refers to workers employed or leased by the prime contractor, and equipment owned or rented by the prime contractor, with or without operators. Such term does not include employees or equipment of a subcontractor or lower tier subcontractor, agents of the prime contractor, or any other assignees. The term may include payments for the costs of hiring leased employees from an employee leasing firm meeting all relevant Federal and State regulatory requirements. Leased employees may only be included in this term if the prime contractor meets all of the following conditions: (based on longstanding interpretation) (1) the prime contractor maintains control over the supervision of the day-to-day activities of the leased employees; (2) the prime contractor remains responsible for the quality of the work of the leased employees; Exhibit I- Page 9 of 14 (3) the prime contractor retains all power to accept or exclude individual employees from work on the project; and (4) the prime contractor remains ultimately responsible for the payment of predetermined minimum wages, the submission of payrolls, statements of compliance and all other Federal regulatory requirements. b. "Specialty Items" shall be construed to be limited to work that requires highly specialized knowledge, abilities, or equipment not ordinarily available in the type of contracting organizations qualified and expected to bid or propose on the contract as a whole and in general are to be limited to minor components of the overall contract. 23 CFR 635.102. 2. Pursuant to 23 CFR 635.116(a), the contract amount upon which the requirements set forth in paragraph (1) of Section VI is computed includes the cost of material and manufactured products which are to be purchased or produced by the contractor under the contract provisions. 3. Pursuant to 23 CFR 635.116(c), the contractor shall furnish (a) a competent superintendent or supervisor who is employed by the firm, has full authority to direct performance of the work in accordance with the contract requirements, and is in charge of all construction operations (regardless of who performs the work) and (b) such other of its own organizational resources (supervision, management, and engineering services) as the contracting officer determines is necessary to assure the performance of the contract. 4. No portion of the contract shall be sublet, assigned or otherwise disposed of except with the written consent of the contracting officer, or authorized representative, and such consent when given shall not be construed to relieve the contractor of any responsibility for the fulfillment of the contract. Written consent will be given only after the contracting agency has assured that each subcontract is evidenced in writing and that it contains all pertinent provisions and requirements of the prime contract. (based on long- standing interpretation of 23 CFR 635.116). 5. The 30-percent self-performance requirement of paragraph (1) is not applicable to design-build contracts; however, contracting agencies may establish their own self-performance requirements. 23 CFR 635.116(d). VII. SAFETY: ACCIDENT PREVENTION This provision is applicable to all Federal-aid construction contracts and to all related subcontracts. 1. In the performance of this contract the contractor shall comply with all applicable Federal, State, and local laws governing safety, health, and sanitation (23 CFR Part 635). The contractor shall provide all safeguards, safety devices and protective equipment and take any other needed actions as it determines, or as the contracting officer may determine, to be reasonably necessary to protect the life and health of employees on the job and the safety of the public and to protect property in connection with the performance of the work covered by the contract. 23 CFR 635.108. 2. It is a condition of this contract, and shall be made a condition of each subcontract, which the contractor enters into pursuant to this contract, that the contractor and any subcontractor shall not permit any employee, in performance of the contract, to work in surroundings or under conditions which are unsanitary, hazardous or dangerous to his/her health or safety, as determined under construction safety and health standards (29 CFR Part 1926) promulgated by the Secretary of Labor, in accordance with Section 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 3704). 29 CFR 1926.10. 3. Pursuant to 29 CFR 1926.3, it is a condition of this contract that the Secretary of Labor or authorized representative thereof, shall have right of entry to any site of contract performance to inspect or investigate the matter of compliance with the construction safety and health standards and to carry out the duties of the Secretary under Section 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 3704). VIII. FALSE STATEMENTS CONCERNING HIGHWAY PROJECTS This provision is applicable to all Federal-aid construction contracts and to all related subcontracts. In order to assure high quality and durable construction in conformity with approved plans and specifications and a high degree of reliability on statements and representations made by engineers, contractors, suppliers, and workers on Federal- aid highway projects, it is essential that all persons concerned with the project perform their functions as carefully, thoroughly, and honestly as possible. Willful falsification, distortion, or misrepresentation with respect to any facts related to the project is a violation of Federal law. To prevent any misunderstanding regarding the seriousness of these and similar acts, Form FHWA-1022 shall be posted on each Federal-aid highway project (23 CFR Part 635) in one or more places where it is readily available to all persons concerned with the project: 18 U.S.C. 1020 reads as follows: "Whoever, being an officer, agent, or employee of the United States, or of any State or Territory, or whoever, whether a person, association, firm, or corporation, knowingly makes any false statement, false representation, or false report as to the character, quality, quantity, or cost of the material used or to be used, or the quantity or quality of the work performed or to be performed, or the cost thereof in connection with the submission of plans, maps, specifications, contracts, or costs of construction on any highway or related project submitted for approval to the Secretary of Transportation; or Whoever knowingly makes any false statement, false representation, false report or false claim with respect to the character, quality, quantity, or cost of any work performed or to be performed, or materials furnished or to be furnished, in connection with the construction of any highway or related project approved by the Secretary of Transportation; or Whoever knowingly makes any false statement or false representation as to material fact in any statement, certificate, or report submitted pursuant to provisions of the Federal-aid Roads Act approved July 11, 1916, (39 Stat. 355), as amended and supplemented; Shall be fined under this title or imprisoned not more than 5 years or both." Exhibit I- Page 10 of 14 IX. IMPLEMENTATION OF CLEAN AIR ACT AND FEDERAL WATER POLLUTION CONTROL ACT (42 U.S.C. 7606; 2 CFR 200.88; EO 11738) This provision is applicable to all Federal-aid construction contracts in excess of $150,000 and to all related subcontracts. 48 CFR 2.101; 2 CFR 200.327. By submission of this bid/proposal or the execution of this contract or subcontract, as appropriate, the bidder, proposer, Federal-aid construction contractor, subcontractor, supplier, or vendor agrees to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act, as amended (33 U.S.C. 1251-1387). Violations must be reported to the Federal Highway Administration and the Regional Office of the Environmental Protection Agency. 2 CFR Part 200, Appendix II. The contractor agrees to include or cause to be included the requirements of this Section in every subcontract, and further agrees to take such action as the contracting agency may direct as a means of enforcing such requirements. 2 CFR 200.327. X. CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION This provision is applicable to all Federal-aid construction contracts, design-build contracts, subcontracts, lower-tier subcontracts, purchase orders, lease agreements, consultant contracts or any other covered transaction requiring FHWA approval or that is estimated to cost $25,000 or more – as defined in 2 CFR Parts 180 and 1200. 2 CFR 180.220 and 1200.220. 1. Instructions for Certification – First Tier Participants: a. By signing and submitting this proposal, the prospective first tier participant is providing the certification set out below. b. The inability of a person to provide the certification set out below will not necessarily result in denial of participation in this covered transaction. The prospective first tier participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency's determination whether to enter into this transaction. However, failure of the prospective first tier participant to furnish a certification or an explanation shall disqualify such a person from participation in this transaction. 2 CFR 180.320. c. The certification in this clause is a material representation of fact upon which reliance was placed when the contracting agency determined to enter into this transaction. If it is later determined that the prospective participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the contracting agency may terminate this transaction for cause of default. 2 CFR 180.325. d. The prospective first tier participant shall provide immediate written notice to the contracting agency to whom this proposal is submitted if any time the prospective first tier participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 2 CFR 180.345 and 180.350. e. The terms "covered transaction," "debarred," "suspended," "ineligible," "participant," "person," "principal," and "voluntarily excluded," as used in this clause, are defined in 2 CFR Parts 180, Subpart I, 180.900-180.1020, and 1200. “First Tier Covered Transactions” refers to any covered transaction between a recipient or subrecipient of Federal funds and a participant (such as the prime or general contract). “Lower Tier Covered Transactions” refers to any covered transaction under a First Tier Covered Transaction (such as subcontracts). “First Tier Participant” refers to the participant who has entered into a covered transaction with a recipient or subrecipient of Federal funds (such as the prime or general contractor). “Lower Tier Participant” refers any participant who has entered into a covered transaction with a First Tier Participant or other Lower Tier Participants (such as subcontractors and suppliers). f. The prospective first tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction. 2 CFR 180.330. g. The prospective first tier participant further agrees by submitting this proposal that it will include the clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transactions," provided by the department or contracting agency, entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions exceeding the $25,000 threshold. 2 CFR 180.220 and 180.300. h. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that is not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. 2 CFR 180.300; 180.320, and 180.325. A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. 2 CFR 180.335. To verify the eligibility of its principals, as well as the eligibility of any lower tier prospective participants, each participant may, but is not required to, check the System for Award Management website (https://www.sam.gov/). 2 CFR 180.300, 180.320, and 180.325. i. Nothing contained in the foregoing shall be construed to require the establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of the prospective participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. j. Except for transactions authorized under paragraph (f) of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default. 2 CFR 180.325. * * * * * Exhibit I- Page 11 of 14 2. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion – First Tier Participants: a. The prospective first tier participant certifies to the best of its knowledge and belief, that it and its principals: (1) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency, 2 CFR 180.335;. (2) Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property, 2 CFR 180.800; (3) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in paragraph (a)(2) of this certification, 2 CFR 180.700 and 180.800; and (4) Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State or local) terminated for cause or default. 2 CFR 180.335(d). (5) Are not a corporation that has been convicted of a felony violation under any Federal law within the two-year period preceding this proposal (USDOT Order 4200.6 implementing appropriations act requirements); and (6) Are not a corporation with any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted, or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability (USDOT Order 4200.6 implementing appropriations act requirements). b. Where the prospective participant is unable to certify to any of the statements in this certification, such prospective participant should attach an explanation to this proposal. 2 CFR 180.335 and 180.340. * * * * * 3.Instructions for Certification - Lower Tier Participants: (Applicable to all subcontracts, purchase orders, and other lower tier transactions requiring prior FHWA approval or estimated to cost $25,000 or more - 2 CFR Parts 180 and 1200). 2 CFR 180.220 and 1200.220. a. By signing and submitting this proposal, the prospective lower tier participant is providing the certification set out below. b. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department, or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. c. The prospective lower tier participant shall provide immediate written notice to the person to which this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous by reason of changed circumstances. 2 CFR 180.365. d. The terms "covered transaction," "debarred," "suspended," "ineligible," "participant," "person," "principal," and "voluntarily excluded," as used in this clause, are defined in 2 CFR Parts 180, Subpart I, 180.900 – 180.1020, and 1200. You may contact the person to which this proposal is submitted for assistance in obtaining a copy of those regulations. “First Tier Covered Transactions” refers to any covered transaction between a recipient or subrecipient of Federal funds and a participant (such as the prime or general contract). “Lower Tier Covered Transactions” refers to any covered transaction under a First Tier Covered Transaction (such as subcontracts). “First Tier Participant” refers to the participant who has entered into a covered transaction with a recipient or subrecipient of Federal funds (such as the prime or general contractor). “Lower Tier Participant” refers any participant who has entered into a covered transaction with a First Tier Participant or other Lower Tier Participants (such as subcontractors and suppliers). e. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated. 2 CFR 1200.220 and 1200.332. f. The prospective lower tier participant further agrees by submitting this proposal that it will include this clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction," without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions exceeding the $25,000 threshold. 2 CFR 180.220 and 1200.220. g. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that is not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. To verify the eligibility of its principals, as well as the eligibility of any lower tier prospective participants, each participant may, but is not required to, check the System for Award Management website (https://www.sam.gov/), which is compiled by the General Services Administration. 2 CFR 180.300, 180.320, 180.330, and 180.335. h. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. i. Except for transactions authorized under paragraph e of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is suspended, debarred, ineligible, or voluntarily Exhibit I- Page 12 of 14 excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. 2 CFR 180.325. * * * * * 4. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion--Lower Tier Participants: a. The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals: (1) is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency, 2 CFR 180.355; (2) is a corporation that has been convicted of a felony violation under any Federal law within the two-year period preceding this proposal (USDOT Order 4200.6 implementing appropriations act requirements); and (3) is a corporation with any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted, or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability. (USDOT Order 4200.6 implementing appropriations act requirements) b. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant should attach an explanation to this proposal. * * * * * XI. CERTIFICATION REGARDING USE OF CONTRACT FUNDS FOR LOBBYING This provision is applicable to all Federal-aid construction contracts and to all related subcontracts which exceed $100,000. 49 CFR Part 20, App. A. 1. The prospective participant certifies, by signing and submitting this bid or proposal, to the best of his or her knowledge and belief, that: a. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. b. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. 2. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by 31 U.S.C. 1352. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. 3. The prospective participant also agrees by submitting its bid or proposal that the participant shall require that the language of this certification be included in all lower tier subcontracts, which exceed $100,000 and that all such recipients shall certify and disclose accordingly. XII. USE OF UNITED STATES-FLAG VESSELS: This provision is applicable to all Federal-aid construction contracts, design-build contracts, subcontracts, lower-tier subcontracts, purchase orders, lease agreements, or any other covered transaction. 46 CFR Part 381. This requirement applies to material or equipment that is acquired for a specific Federal-aid highway project. 46 CFR 381.7. It is not applicable to goods or materials that come into inventories independent of an FHWA funded-contract. When oceanic shipments (or shipments across the Great Lakes) are necessary for materials or equipment acquired for a specific Federal-aid construction project, the bidder, proposer, contractor, subcontractor, or vendor agrees: 1. To utilize privately owned United States-flag commercial vessels to ship at least 50 percent of the gross tonnage (computed separately for dry bulk carriers, dry cargo liners, and tankers) involved, whenever shipping any equipment, material, or commodities pursuant to this contract, to the extent such vessels are available at fair and reasonable rates for United States-flag commercial vessels. 46 CFR 381.7. 2. To furnish within 20 days following the date of loading for shipments originating within the United States or within 30 working days following the date of loading for shipments originating outside the United States, a legible copy of a rated, ‘on-board’ commercial ocean bill-of-lading in English for each shipment of cargo described in paragraph (b)(1) of this section to both the Contracting Officer (through the prime contractor in the case of subcontractor bills-of-lading) and to the Office of Cargo and Commercial Sealift (MAR-620), Maritime Administration, Washington, DC 20590. (MARAD requires copies of the ocean carrier's (master) bills of lading, certified onboard, dated, with rates and charges. These bills of lading may contain business sensitive information and therefore may be submitted directly to MARAD by the Ocean Transportation Intermediary on behalf of the contractor). 46 CFR 381.7. Exhibit I- Page 13 of 14 ATTACHMENT A - EMPLOYMENT AND MATERIALS PREFERENCE FOR APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM OR APPALACHIAN LOCAL ACCESS ROAD CONTRACTS (23 CFR 633, Subpart B, Appendix B) This provision is applicable to all Federal-aid projects funded under the Appalachian Regional Development Act of 1965. 1. During the performance of this contract, the contractor undertaking to do work which is, or reasonably may be, done as on-site work, shall give preference to qualified persons who regularly reside in the labor area as designated by the DOL wherein the contract work is situated, or the subregion, or the Appalachian counties of the State wherein the contract work is situated, except: a. To the extent that qualified persons regularly residing in the area are not available. b. For the reasonable needs of the contractor to employ supervisory or specially experienced personnel necessary to assure an efficient execution of the contract work. c. For the obligation of the contractor to offer employment to present or former employees as the result of a lawful collective bargaining contract, provided that the number of nonresident persons employed under this subparagraph (1c) shall not exceed 20 percent of the total number of employees employed by the contractor on the contract work, except as provided in subparagraph (4) below. 2. The contractor shall place a job order with the State Employment Service indicating (a) the classifications of the laborers, mechanics and other employees required to perform the contract work, (b) the number of employees required in each classification, (c) the date on which the participant estimates such employees will be required, and (d) any other pertinent information required by the State Employment Service to complete the job order form. The job order may be placed with the State Employment Service in writing or by telephone. If during the course of the contract work, the information submitted by the contractor in the original job order is substantially modified, the participant shall promptly notify the State Employment Service. 3. The contractor shall give full consideration to all qualified job applicants referred to him by the State Employment Service. The contractor is not required to grant employment to any job applicants who, in his opinion, are not qualified to perform the classification of work required. 4. If, within one week following the placing of a job order by the contractor with the State Employment Service, the State Employment Service is unable to refer any qualified job applicants to the contractor, or less than the number requested, the State Employment Service will forward a certificate to the contractor indicating the unavailability of applicants. Such certificate shall be made a part of the contractor's permanent project records. Upon receipt of this certificate, the contractor may employ persons who do not normally reside in the labor area to fill positions covered by the certificate, notwithstanding the provisions of subparagraph (1c) above. 5. The provisions of 23 CFR 633.207(e) allow the contracting agency to provide a contractual preference for the use of mineral resource materials native to the Appalachian region. 6. The contractor shall include the provisions of Sections 1 through 4 of this Attachment A in every subcontract for work which is, or reasonably may be, done as on-site work. Exhibit I- Page 14 of 14 Exhibit J - Page 1 of 11 EXHIBIT J ADDITIONAL FEDERAL REQUIREMENTS Federal laws and regulations that may be applicable to the Work include: Executive Order 11246 Executive Order 11246 of September 24, 1965 entitled "Equal Employment Opportunity," as amended by Executive Order 11375 of October 13, 1967 and as supplemented in Department of Labor regulations (41 CFR Chapter 60) (All construction contracts awarded in excess of $10,000 by the Local Agencies and their contractors or the Local Agencies). Copeland "Anti-Kickback" Act The Copeland "Anti-Kickback" Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR Part 3) (All contracts and sub-Agreements for construction or repair). Davis-Bacon Act The Davis-Bacon Act (40 U.S.C. 276a to a-7) as supplemented by Department of Labor regulations (29 CFR Part 5) (Construction contracts in excess of $2,000 awarded by the Local Agencies and the Local Agencies when required by Federal Agreement program legislation. This act requires that all laborers and mechanics employed by contractors or sub-contractors to work on construction projects financed by federal assistance must be paid wages not less than those established for the locality of the project by the Secretary of Labor). Contract Work Hours and Safety Standards Act Sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-330) as supplemented by Department of Labor regulations (29 CFR Part 5). (Construction contracts awarded by the Local Agency’s in excess of $2,000, and in excess of $2,500 for other contracts which involve the employment of mechanics or laborers). Clean Air Act Standards, orders, or requirements issued under section 306 of the Clean Air Act (42 U.S.C. 1857(h), section 508 of the Clean Water Act (33 U.S.C. 1368). Executive Order 11738, and Environmental Protection Agency regulations (40 CFR Part 15) (contracts, subcontracts, and sub-Agreements of amounts more than $100,000). Energy Policy and Conservation Act Mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Energy Policy and Conservation Act (Pub. L. 94-163). OMB Circulars Office of Management and Budget Circulars A-87, A-21 or A-122, and A-102 or A-110, whichever is applicable. Hatch Act The Hatch Act (5 USC 1501-1508) and Public Law 95-454 Section 4728. These statutes state that federal funds cannot be used for partisan political purposes of any kind by any person or organization involved in the administration of federally assisted programs. Nondiscrimination The Local Agency shall not exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States on the ground of race, color national origin, sex, age or disability. Prior to the receipt of any Federal financial assistance from CDOT, the Local Agency shall execute the attached Standard DOT Title VI assurance. As appropriate, the Local Agency shall include Appendix A, B, or C to the Standard DOT Title VI assurance in any contract utilizing federal funds, land, or other aid. The Local Agency shall also include the following in all contract advertisements: The [Local Agency], in accordance with the provisions of Title VI of the Civil Rights Act of 1964 (79 Stat. 252, 42 US.C. §§ 2000d to 2000d-4) and the Regulations, hereby notifies all bidders that it will affirmatively ensure that any contract entered into pursuant to this advertisement, DBEs will be afforded full and fair opportunity to submit bids in response to this invitation and will not be discriminated against on the grounds of race, color, or national origin in consideration for any award. Exhibit J - Page 2 of 11 ADA In any contract utilizing federal funds, land, or other federal aid, the Local Agency shall require the federal- aid recipient or contractor to provide a statement of written assurance that they will comply with Section 504 and not discriminate on the basis of disability. Uniform Relocation Assistance and Real Property Acquisition Policies Act The Uniform Relocation Assistance and Real Property Acquisition Policies Act, as amended (Public Law 91- 646, as amended and Public Law 100-17, 101 Stat. 246-256). (If the contractor is acquiring real property and displacing households or businesses in the performance of the Agreement). Drug-Free Workplace Act The Drug-Free Workplace Act (Public Law 100-690 Title V, subtitle D, 41 USC 701 et seq.). Age Discrimination Act of 1975 The Age Discrimination Act of 1975, 42 U.S.C. Sections 6101 et. seq. and its implementing regulation, 45 C.F.R. Part 91; Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, as amended, and implementing regulation 45 C.F.R. Part 84. 23 C.F.R. Part 172 23 C.F.R. Part 172, concerning "Administration of Engineering and Design Related Contracts". 23 C.F.R Part 633 23 C.F.R Part 633, concerning "Required Contract Provisions for Federal-Aid Construction Contracts". 23 C.F.R. Part 635 23 C.F.R. Part 635, concerning "Construction and Maintenance Provisions". Title VI of the Civil Rights Act of 1964 and 162(a) of the Federal Aid Highway Act of 1973 Title VI of the Civil Rights Act of 1964 and 162(a) of the Federal Aid Highway Act of 1973. The requirements for which are shown in the Nondiscrimination Provisions, which are attached hereto and made a part hereof. Nondiscrimination Provisions: In compliance with Title VI of the Civil Rights Act of 1964 and with Section 162(a) of the Federal Aid Highway Act of 1973, the Contractor, for itself, its assignees, and successors in interest, agree as follows: i. Compliance with Regulations The Contractor will comply with the Regulations of the Department of Transportation relative to nondiscrimination in Federally assisted programs of the Department of Transportation (Title 49, Code of Federal Regulations, Part 21, hereinafter referred to as the "Regulations"), which are herein incorporated by reference and made a part of this Agreement. ii. Nondiscrimination The Contractor, with regard to the work performed by it after award and prior to completion of the contract work, will not discriminate on the ground of race, color, sex, mental or physical handicap or national origin in the selection and retention of Subcontractors, including procurement of materials and leases of equipment. The Contractor will not participate either directly or indirectly in the discrimination prohibited by Section 21.5 of the Regulations, including employment practices when the contract covers a program set forth in Appendix C of the Regulations. iii. Solicitations for Subcontracts, Including Procurement of Materials and Equipment In all solicitations either by competitive bidding or negotiation made by the Contractor for work to be performed under a subcontract, including procurement of materials or equipment, each potential Subcontractor or supplier shall be notified by the Contractor of the Contractor's obligations under this Agreement and the Regulations relative to nondiscrimination on the ground of race, color, sex, mental or physical handicap or national origin. iv. Information and Reports The Contractor will provide all information and reports required by the Regulations, or orders and instructions issued pursuant thereto and will permit access to its books, records, accounts, other sources of information and its facilities as may be determined by the State or the FHWA to be pertinent to ascertain compliance with such Regulations, orders, and instructions. Where any information required of the Contractor is in the exclusive possession of another who fails or refuses to furnish this information, the Contractor shall so certify to the State, or the FHWA as appropriate and shall set forth what efforts have been made to obtain the information. Exhibit J - Page 3 of 11 v. Sanctions for Noncompliance In the event of the Contractor's noncompliance with the nondiscrimination provisions of this Agreement, the State shall impose such contract sanctions as it or the FHWA may determine to be appropriate, including, but not limited to: a. Withholding of payments to the Contractor under the contract until the Contractor complies, and/or b. Cancellation, termination or suspension of the contract, in whole or in part. Incorporation of Provisions §22 The Contractor will include the provisions of this Exhibit J in every subcontract, including procurement of materials and leases of equipment, unless exempt by the Regulations, orders, or instructions issued pursuant thereto. The Contractor will take such action with respect to any subcontract or procurement as the State or the FHWA may direct as a means of enforcing such provisions including sanctions for noncompliance; provided, however, that, in the event the Contractor becomes involved in, or is threatened with, litigation with a Subcontractor or supplier as a result of such direction, the Contractor may request the State to enter into such litigation to protect the interest of the State and in addition, the Contractor may request the FHWA to enter into such litigation to protect the interests of the United States. THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK Exhibit J - Page 4 of 11 SAMPLE The United States Department of Transportation (USDOT) Standard Title VI/Non-Discrimination Assurances for Local Agencies DOT Order No. 1050.2A The [Local Agency] (herein referred to as the "Recipient"), HEREBY AGREES THAT, as a condition to receiving any Federal financial assistance from the U.S. Department of Transportation (DOT), through the Colorado Department of Transportation and the Federal Highway Administration (FHWA), Federal Transit Administration (FTA), and Federal Aviation Administration (FAA), is subject to and will comply with the following: Statutory/Regulatory Authorities • Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin); • 49 C.F.R. Part 21 (entitled Non-discrimination In Federally-Assisted Programs Of The Department Of Transportation-Effectuation Of Title VI Of The Civil Rights Act Of 1964); • 28 C.F.R. section 50.3 (U.S. Department of Justice Guidelines for Enforcement of Title VI of the Civil Rights Act of 1964); The preceding statutory and regulatory cites hereinafter are referred to as the "Acts" and "Regulations," respectively. General Assurances In accordance with the Acts, the Regulations, and other pertinent directives, circulars, policy, memoranda, and/or guidance, the Recipient hereby gives assurance that it will promptly take any measures necessary to ensure that: "No person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity, "for which the Recipient receives Federal financial assistance from DOT, including the FHWA, FTA, or FAA. The Civil Rights Restoration Act of 1987 clarified the original intent of Congress, with respect to Title VI and other Non-discrimination requirements (The Age Discrimination Act of 1975, and Section 504 of the Rehabilitation Act of 1973), by restoring the broad, institutional-wide scope and coverage of these non- discrimination statutes and requirements to include all programs and activities of the Recipient, so long as any portion of the program is Federally assisted. Specific Assurances More specifically, and without limiting the above general Assurance, the Recipient agrees with and gives the following Assurances with respect to its Federally assisted FHWA, FTA, and FAA assisted programs: 1. The Recipient agrees that each "activity," "facility," or "program," as defined in §§ 21.23(b) and 21.23(e) of 49 C.F.R. § 21 will be (with regard to an "activity") facilitated or will be (with regard to a "facility") operated or will be (with regard to a "program") conducted in compliance with all requirements imposed by, or pursuant to the Acts and the Regulations. 2. The Recipient will insert the following notification in all solicitations for bids, Requests for Proposals for work, or material subject to the Acts and the Regulations made in connection with all FHWA, FTA and FAA programs and, in adapted form, in all proposals for negotiated agreements regardless of funding source: 3. "The [Local Agency] in accordance with the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252, 42 US.C. §§ 2000d to 2000d-4) and the Regulations, hereby notifies all bidders that it will affirmatively ensure that any contract entered into pursuant to this advertisement, disadvantaged business enterprises will be afforded full and fair opportunity Exhibit J - Page 5 of 11 4. to submit bids in response to this invitation and will not be discriminated against on the grounds of race, color, or national origin in consideration for an award." 5. The Recipient will insert the clauses of Appendix A and E of this Assurance in every contract or agreement subject to the Acts and the Regulations. 6. The Recipient will insert the clauses of Appendix B of this Assurance, as a covenant running with the land, in any deed from the United States effecting or recording a transfer of real property, structures, use, or improvements thereon or interest therein to a Recipient. 7. That where the Recipient receives Federal financial assistance to construct a facility, or part of a facility, the Assurance will extend to the entire facility and facilities operated in connection therewith. 8. That where the Recipient receives Federal financial assistance in the form, or for the acquisition of real property or an interest in real property, the Assurance will extend to rights to space on, over, or under such property. 9. That the Recipient will include the clauses set forth in Appendix C and Appendix D of this Assurance, as a covenant running with the land, in any future deeds, leases, licenses, permits, or similar instruments entered into by the Recipient with other parties: a. for the subsequent transfer of real property acquired or improved under the applicable activity, project, or program; and b. for the construction or use of, or access to, space on, over, or under real property acquired or improved under the applicable activity, project, or program. 10. That this Assurance obligates the Recipient for the period during which Federal financial assistance is extended to the program, except where the Federal financial assistance is to provide, or is in the form of, personal property, or real property, or interest therein, or structures or improvements thereon, in which case the Assurance obligates the Recipient, or any transferee for the longer of the following periods: a. the period during which the property is used for a purpose for which the Federal financial assistance is extended, or for another purpose involving the provision of similar services or benefits; or b. the period during which the Recipient retains ownership or possession of the property. 11. The Recipient will provide for such methods of administration for the program as are found by the Secretary of Transportation or the official to whom he/she delegates specific authority to give reasonable guarantee that it, other recipients, sub-recipients, sub-grantees, contractors, subcontractors, consultants, transferees, successors in interest, and other participants of Federal financial assistance under such program will comply with all requirements imposed or pursuant to the Acts, the Regulations, and this Assurance. 12. The Recipient agrees that the United States has a right to seek judicial enforcement with regard to any matter arising under the Acts, the Regulations, and this Assurance. By signing this ASSURANCE, the [Local Agency] also agrees to comply (and require any sub-recipients, sub- grantees, contractors, successors, transferees, and/or assignees to comply) with all applicable provisions governing the FHWA, FTA, and FAA’s access to records, accounts, documents, information, facilities, and staff. You also recognize that you must comply with any program or compliance reviews, and/or complaint investigations conducted by CDOT, FHWA, FTA, or FAA. You must keep records, reports, and submit the material for review Exhibit J - Page 6 of 11 upon request to CDOT, FHWA, FTA, or FAA, or its designee in a timely, complete, and accurate way. Additionally, you must comply with all other reporting, data collection, and evaluation requirements, as prescribed by law or detailed in program guidance. [Local Agency] gives this ASSURANCE in consideration of and for obtaining any Federal grants, loans, contracts, agreements, property, and/or discounts, or other Federal-aid and Federal financial assistance extended after the date hereof to the recipients by the U.S. Department of Transportation under the FHWA, FTA, and FAA. This ASSURANCE is binding on [Local Agency], other recipients, sub-recipients, sub-grantees, contractors, subcontractors and their subcontractors', transferees, successors in interest, and any other participants in the FHWA, FTA, and FAA funded programs. The person(s) signing below is authorized to sign this ASSURANCE on behalf of the Recipient. (Name of Recipient) by (Signature of Authorized Official) DATED Exhibit J - Page 7 of 11 APPENDIX A During the performance of this contract, the contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the "contractor") agrees as follows: 1. Compliance with Regulations: The contractor (hereinafter includes consultants) will comply with the Acts and the Regulations relative to Non-discrimination in Federally-assisted programs of the U.S. Department of Transportation, FHWA, as they may be amended from time to time, which are herein incorporated by reference and made a part of this contract. 2. Non-discrimination: The contractor, with regard to the work performed by it during the contract, will not discriminate on the grounds of race, color, or national origin in the selection and retention of subcontractors, including procurements of materials and leases of equipment. The contractor will not participate directly or indirectly in the discrimination prohibited by the Acts and the Regulations, including employment practices when the contract covers any activity, project, or program set forth in Appendix B of 49 CFR Part 21. 3. Solicitations for Subcontracts, Including Procurements of Materials and Equipment: In all solicitations, either by competitive bidding, or negotiation made by the contractor for work to be performed under a subcontract, including procurements of materials, or leases of equipment, each potential subcontractor or supplier will be notified by the contractor of the contractor's obligations under this contract and the Acts and the Regulations relative to Non-discrimination on the grounds of race, color, or national origin. 4. Information and Reports: The contractor will provide all information and reports required by the Acts, the Regulations, and directives issued pursuant thereto and will permit access to its books, records, accounts, other sources of information, and its facilities as may be determined by the [Local Agency], CDOT or FHWA to be pertinent to ascertain compliance with such Acts, Regulations, and instructions. Where any information required of a contractor is in the exclusive possession of another who fails or refuses to furnish the information, the contractor will so certify to the [Local Agency], CDOT or FHWA, as appropriate, and will set forth what efforts it has made to obtain the information. 5. Sanctions for Noncompliance: In the event of a contractor's noncompliance with the non-discrimination provisions of this contract, the [Local Agency] will impose such contract sanctions as it, CDOT or FHWA may determine to be appropriate, including, but not limited to: a. withholding payments to the contractor under the contract until the contractor complies; and/or b. cancelling, terminating, or suspending a contract, in whole or in part. 6. Incorporation of Provisions: The contractor will include the provisions of paragraphs one through six in every subcontract, including procurements of materials and leases of equipment, unless exempt by the Acts, the Regulations and directives issued pursuant thereto. The contractor will take action with respect to any subcontract or procurement as the Recipient or the [Local Agency], CDOT or FHWA may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, that if the contractor becomes involved in, or is threatened with litigation by a subcontractor, or supplier because of such direction, the contractor may request the Recipient to enter into any litigation to protect the interests of the Recipient. In addition, the contractor may request the United States to enter into the litigation to protect the interests of the United States. APPENDIX B CLAUSES FOR DEEDS TRANSFERRING UNITED STATES PROPERTY The following clauses will be included in deeds effecting or recording the transfer of real property, structures, or improvements thereon, or granting interest therein from the United States pursuant to the provisions of Assurance 4: NOW, THEREFORE, the U.S. Department of Transportation as authorized by law and upon the condition that the [Local Agency] will accept title to the lands and maintain the project constructed thereon in accordance with (Name of Appropriate Legislative Authority), the Regulations for the Administration of (Name of Appropriate Program), and the policies and procedures prescribed by the FHWA of the U.S. Department of Transportation in accordance and in compliance with all requirements imposed by Title 49, Code of Federal Regulations, U.S. Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Non-discrimination in Federally-assisted programs of the U.S Department of Transportation pertaining to and effectuating the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252; 42 U.S.C. § 2000d to 2000d-4), does hereby remise, release, quitclaim and convey unto the [Local Agency] all the right, title and interest of the U.S. Department of Transportation in and to said lands described in Exhibit A attached hereto and made a part hereof. (HABENDUM CLAUSE) TO HAVE AND TO HOLD said lands and interests therein unto [Local Agency] and its successors forever, subject, however, to the covenants, conditions, restrictions and reservations herein contained as follows, which will remain in effect for the period during which the real property or structures are used for a purpose for which Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits and will be binding on the [Local Agency] its successors and assigns. The [Local Agency], in consideration of the conveyance of said lands and interests in lands, does hereby covenant and agree as a covenant running with the land for itself, its successors and assigns, that (1) no person will on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination with regard to any facility located wholly or in part on, over, or under such lands hereby conveyed [,] [and]* (2) that the [Local Agency] will use the lands and interests in lands and interests in lands so conveyed, in compliance with all requirements imposed by or pursuant to Title 49, Code of Federal Regulations, U.S. Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Non-discrimination in Federally-assisted programs of the U.S. Department of Transportation, Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations and Acts may be amended [, and (3) that in the event of breach of any of the above-mentioned non-discrimination conditions, the Department will have a right to enter or re-enter said lands and facilities on said land, and that above described land and facilities will thereon revert to and vest in and become the absolute property of the U.S. Department of Transportation and its assigns as such interest existed prior to this instruction].* (*Reverter clause and related language to be used only when it is determined that such a clause is necessary to make clear the purpose of Title VI.) Exhibit J - Page 8 of 11 Exhibit J - Page 9 of 11 APPENDIX C CLAUSES FOR TRANSFER OF REAL PROPERTY ACQUIRED OR IMPROVED UNDER THE ACTIVITY, FACILITY, OR PROGRAM The following clauses will be included in deeds, licenses, leases, permits, or similar instruments entered into by the [Local Agency] pursuant to the provisions of Assurance 7(a): A. The (grantee, lessee, permittee, etc. as appropriate) for himself/herself, his/her heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree [in the case of deeds and leases add "as a covenant running with the land"] that: 1. In the event facilities are constructed, maintained, or otherwise operated on the property described in this (deed, license, lease, permit, etc.) for a purpose for which a U.S. Department of Transportation activity, facility, or program is extended or for another purpose involving the provision of similar services or benefits, the (grantee, licensee, lessee, permittee, etc.) will maintain and operate such facilities and services in compliance with all requirements imposed by the Acts and Regulations (as may be amended) such that no person on the grounds of race, color, or national origin, will be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities. B. With respect to licenses, leases, permits, etc., in the event of breach of any of the above Non-discrimination covenants, [Local Agency] will have the right to terminate the (lease, license, permit, etc.) and to enter, re-enter, and repossess said lands and facilities thereon, and hold the same as if the (lease, license, permit, etc.) had never been made or issued. * C. With respect to a deed, in the event of breach of any of the above Non-discrimination covenants, the [Local Agency] will have the right to enter or re-enter the lands and facilities thereon, and the above described lands and facilities will there upon revert to and vest in and become the absolute property of the [Local Agency] and its assigns. * (*Reverter clause and related language to be used only when it is determined that such a clause is necessary to make clear the purpose of Title VI.) Exhibit J - Page 10 of 11 APPENDIX D CLAUSES FOR CONSTRUCTION/USE/ACCESS TO REAL PROPERTY ACQUIRED UNDER THE ACTIVITY, FACILITY OR PROGRAM The following clauses will be included in deeds, licenses, permits, or similar instruments/agreements entered into by [Local Agency] pursuant to the provisions of Assurance 7(b): A. The (grantee, licensee, permittee, etc., as appropriate) for himself/herself, his/her heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree (in the case of deeds and leases add, "as a covenant running with the land") that (1) no person on the ground of race, color, or national origin, will be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities, (2) that in the construction of any improvements on, over, or under such land, and the furnishing of services thereon, no person on the ground of race, color, or national origin, will be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination, (3) that the (grantee, licensee, lessee, permittee, etc.) will use the premises in compliance with all other requirements imposed by or pursuant to the Acts and Regulations, as amended, set forth in this Assurance. B. With respect to (licenses, leases, permits, etc.), in the event of breach of any of the above Non- discrimination covenants, [Local Agency] will have the right to terminate the (license, permit, etc., as appropriate) and to enter or re-enter and repossess said land and the facilities thereon, and hold the same as if said (license, permit, etc., as appropriate) had never been made or issued. * C. With respect to deeds, in the event of breach of any of the above Non-discrimination covenants, [Local Agency] will there upon revert to and vest in and become the absolute property of [Local Agency] of Transportation and its assigns. * (*Reverter clause and related language to be used only when it is determined that such a clause is necessary to make clear the purpose of Title VI.) Exhibit J - Page 11 of 11 APPENDIX E During the performance of this contract, the contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the "contractor") agrees to comply with the following non- discrimination statutes and authorities; including but not limited to: Pertinent Non-Discrimination Authorities: • Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin); and 49 CFR Part 21. • The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. § 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects); • Federal-Aid Highway Act of 1973, (23 U.S.C. § 324 et seq.), (prohibits discrimination on the basis of sex); • Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 et seq.), as amended, (prohibits discrimination on the basis of disability); and 49 CFR Part 27; • The Age Discrimination Act of 1975, as amended, (42 U.S.C. § 6101 et seq.), (prohibits discrimination on the basis of age); • Airport and Airway Improvement Act of 1982, (49 USC § 471, Section 47123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex); • The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms "programs or activities" to include all of the programs or activities of the Federal-aid recipients, sub-recipients and contractors, whether such programs or activities are Federally funded or not); • Titles II and III of the Americans with Disabilities Act, which prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C. §§ 12131-12189) as implemented by Department of Transportation regulations at 49 C.F.R. parts 37 and 38; • The Federal Aviation Administration's Non-discrimination statute (49 U.S.C. § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex); • Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low- Income Populations, which ensures non-discrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations; • Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of Limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at 74087 to 74100); • Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq). Exhibit K - Page 1 of 4 EXHIBIT K FFATA SUPPLEMENTAL FEDERAL PROVISIONS State of Colorado Supplemental Provisions for Federally Funded Contracts, Grants, and Purchase Orders Subject to The Federal Funding Accountability and Transparency Act of 2006 (FFATA), As Amended Revised as of 3-20-13 The contract, grant, or purchase order to which these Supplemental Provisions are attached has been funded, in whole or in part, with an Award of Federal funds. In the event of a conflict between the provisions of these Supplemental Provisions, the Special Provisions, the contract or any attachments or exhibits incorporated into and made a part of the contract, the provisions of these Supplemental Provisions shall control. 1. Definitions. For the purposes of these Supplemental Provisions, the following terms shall have the meanings ascribed to them below. 1.1. “Award” means an award of Federal financial assistance that a non-Federal Entity receives or administers in the form of: 1.1.1. Grants; 1.1.2. Contracts; 1.1.3. Cooperative agreements, which do not include cooperative research and development agreements (CRDA) pursuant to the Federal Technology Transfer Act of 1986, as amended (15 U.S.C. 3710); 1.1.4. Loans; 1.1.5. Loan Guarantees; 1.1.6. Subsidies; 1.1.7. Insurance; 1.1.8. Food commodities; 1.1.9. Direct appropriations; 1.1.10. Assessed and voluntary contributions; and 1.1.11. Other financial assistance transactions that authorize the expenditure of Federal funds by non- Federal Entities. Award does not include: 1.1.12. Technical assistance, which provides services in lieu of money; 1.1.13. A transfer of title to Federally-owned property provided in lieu of money; even if the award is called a grant; 1.1.14. Any award classified for security purposes; or 1.1.15. Any award funded in whole or in part with Recovery funds, as defined in section 1512 of the American Recovery and Reinvestment Act (ARRA) of 2009 (Public Law 111-5). 1.2. “Contract” means the contract to which these Supplemental Provisions are attached and includes all Award types in §1.1.1 through 1.1.11 above. 1.3. “Contractor” means the party or parties to a Contract funded, in whole or in part, with Federal financial assistance, other than the Prime Recipient, and includes grantees, subgrantees, Subrecipients, and borrowers. For purposes of Transparency Act reporting, Contractor does not include Vendors. 1.4. “Data Universal Numbering System (DUNS) Number” means the nine-digit number established and assigned by Dun and Bradstreet, Inc. to uniquely identify a business entity. Dun and Bradstreet’s website may be found at: http://fedgov.dnb.com/webform. 1.5. “Entity” means all of the following as defined at 2 CFR part 25, subpart C; 1.5.1. A governmental organization, which is a State, local government, or Indian Tribe; 1.5.2. A foreign public entity; 1.5.3. A domestic or foreign non-profit organization; Exhibit K - Page 2 of 4 1.5.4. A domestic or foreign for-profit organization; and 1.5.5. A Federal agency, but only a Subrecipient under an Award or Subaward to a non-Federal entity. 1.6. “Executive” means an officer, managing partner or any other employee in a management position. 1.7. “Federal Award Identification Number (FAIN)” means an Award number assigned by a Federal agency to a Prime Recipient. 1.8. “FFATA” means the Federal Funding Accountability and Transparency Act of 2006 (Public Law 109- 282), as amended by §6202 of Public Law 110-252. FFATA, as amended, also is referred to as the “Transparency Act.” 1.9. “Prime Recipient” means a Colorado State agency or institution of higher education that receives an Award. 1.10. “Subaward” means a legal instrument pursuant to which a Prime Recipient of Award funds awards all or a portion of such funds to a Subrecipient, in exchange for the Subrecipient’s support in the performance of all or any portion of the substantive project or program for which the Award was granted. 1.11. “Subrecipient” means a non-Federal Entity (or a Federal agency under an Award or Subaward to a non- Federal Entity) receiving Federal funds through a Prime Recipient to support the performance of the Federal project or program for which the Federal funds were awarded. A Subrecipient is subject to the terms and conditions of the Federal Award to the Prime Recipient, including program compliance requirements. The term “Subrecipient” includes and may be referred to as Subgrantee. 1.12. “Subrecipient Parent DUNS Number” means the subrecipient parent organization’s 9-digit Data Universal Numbering System (DUNS) number that appears in the subrecipient’s System for Award Management (SAM) profile, if applicable. 1.13. “Supplemental Provisions” means these Supplemental Provisions for Federally Funded Contracts, Grants, and Purchase Orders subject to the Federal Funding Accountability and Transparency Act of 2006, As Amended, as may be revised pursuant to ongoing guidance from the relevant Federal or State of Colorado agency or institution of higher education. 1.14. “System for Award Management (SAM)” means the Federal repository into which an Entity must enter the information required under the Transparency Act, which may be found at http://www.sam.gov. 1.15. “Total Compensation” means the cash and noncash dollar value earned by an Executive during the Prime Recipient’s or Subrecipient’s preceding fiscal year and includes the following: 1.15.1. Salary and bonus; 1.15.2. Awards of stock, stock options, and stock appreciation rights, using the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with the Statement of Financial Accounting Standards No. 123 (Revised 2005) (FAS 123R), Shared Based Payments; 1.15.3. Earnings for services under non-equity incentive plans, not including group life, health, hospitalization or medical reimbursement plans that do not discriminate in favor of Executives and are available generally to all salaried employees; 1.15.4. Change in present value of defined benefit and actuarial pension plans; 1.15.5. Above-market earnings on deferred compensation which is not tax-qualified; 1.15.6. Other compensation, if the aggregate value of all such other compensation (e.g. severance, termination payments, value of life insurance paid on behalf of the employee, perquisites or property) for the Executive exceeds $10,000. 1.16. “Transparency Act” means the Federal Funding Accountability and Transparency Act of 2006 (Public Law 109-282), as amended by §6202 of Public Law 110-252. The Transparency Act also is referred to as FFATA. 1.17 “Vendor” means a dealer, distributor, merchant or other seller providing property or services required for a project or program funded by an Award. A Vendor is not a Prime Recipient or a Subrecipient and is not subject to the terms and conditions of the Federal award. Program compliance requirements do not pass through to a Vendor. Exhibit K - Page 3 of 4 2. Compliance. Contractor shall comply with all applicable provisions of the Transparency Act and the regulations issued pursuant thereto, including but not limited to these Supplemental Provisions. Any revisions to such provisions or regulations shall automatically become a part of these Supplemental Provisions, without the necessity of either party executing any further instrument. The State of Colorado may provide written notification to Contractor of such revisions, but such notice shall not be a condition precedent to the effectiveness of such revisions. 3. System for Award Management (SAM) and Data Universal Numbering System (DUNS) Requirements. 3.1. SAM. Contractor shall maintain the currency of its information in SAM until the Contractor submits the final financial report required under the Award or receives final payment, whichever is later. Contractor shall review and update SAM information at least annually after the initial registration, and more frequently if required by changes in its information. 3.2. DUNS. Contractor shall provide its DUNS number to its Prime Recipient, and shall update Contractor’s information in Dun & Bradstreet, Inc. at least annually after the initial registration, and more frequently if required by changes in Contractor’s information. 4. Total Compensation. Contractor shall include Total Compensation in SAM for each of its five most highly compensated Executives for the preceding fiscal year if: 4.1. The total Federal funding authorized to date under the Award is $25,000 or more; and 4.2. In the preceding fiscal year, Contractor received: 4.2.1. 80% or more of its annual gross revenues from Federal procurement contracts and subcontracts and/or Federal financial assistance Awards or Subawards subject to the Transparency Act; and 4.2.2. $25,000,000 or more in annual gross revenues from Federal procurement contracts and subcontracts and/or Federal financial assistance Awards or Subawards subject to the Transparency Act; and 4.3. The public does not have access to information about the compensation of such Executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d) or § 6104 of the Internal Revenue Code of 1986. 5. Reporting. Contractor shall report data elements to SAM and to the Prime Recipient as required in §7 below if Contractor is a Subrecipient for the Award pursuant to the Transparency Act. No direct payment shall be made to Contractor for providing any reports required under these Supplemental Provisions and the cost of producing such reports shall be included in the Contract price. The reporting requirements in §7 below are based on guidance from the US Office of Management and Budget (OMB), and as such are subject to change at any time by OMB. Any such changes shall be automatically incorporated into this Contract and shall become part of Contractor’s obligations under this Contract, as provided in §2 above. The Colorado Office of the State Controller will provide summaries of revised OMB reporting requirements at http://www.colorado.gov/dpa/dfp/sco/FFATA.htm. 6. Effective Date and Dollar Threshold for Reporting. The effective date of these Supplemental Provisions apply to new Awards as of October 1, 2010. Reporting requirements in §7 below apply to new Awards as of October 1, 2010, if the initial award is $25,000 or more. If the initial Award is below $25,000 but subsequent Award modifications result in a total Award of $25,000 or more, the Award is subject to the reporting requirements as of the date the Award exceeds $25,000. If the initial Award is $25,000 or more, but funding is subsequently de- obligated such that the total award amount falls below $25,000, the Award shall continue to be subject to the reporting requirements. 7. Subrecipient Reporting Requirements. If Contractor is a Subrecipient, Contractor shall report as set forth below. Exhibit K - Page 4 of 4 7.1 To SAM. A Subrecipient shall register in SAM and report the following data elements in SAM for each Federal Award Identification Number no later than the end of the month following the month in which the Subaward was made: 7.1.1 Subrecipient DUNS Number; 7.1.2 Subrecipient DUNS Number + 4 if more than one electronic funds transfer (EFT) account; 7.1.3 Subrecipient Parent DUNS Number; 7.1.4 Subrecipient’s address, including: Street Address, City, State, Country, Zip + 4, and Congressional District; 7.1.5 Subrecipient’s top 5 most highly compensated Executives if the criteria in §4 above are met; and 7.1.6 Subrecipient’s Total Compensation of top 5 most highly compensated Executives if criteria in §4 above met. 7.2 To Prime Recipient. A Subrecipient shall report to its Prime Recipient, upon the effective date of the Contract, the following dataelements: 7.2.1 Subrecipient’s DUNS Number as registered in SAM. 7.2.2 Primary Place of Performance Information, including: Street Address, City, State, Country, Zip code + 4, and Congressional District. 8. Exemptions. 8.1. These Supplemental Provisions do not apply to an individual who receives an Award as a natural person, unrelated to any business or non-profit organization he or she may own or operate in his or her name. 8.2 A Contractor with gross income from all sources of less than $300,000 in the previous tax year is exempt from the requirements to report Subawards and the Total Compensation of its most highly compensated Executives. 8.3 Effective October 1, 2010, “Award” currently means a grant, cooperative agreement, or other arrangement as defined in Section 1.1 of these Special Provisions. On future dates “Award” may include other items to be specified by OMB in policy memoranda available at the OMB Web site; Award also will include other types of Awards subject to the Transparency Act. 8.4 There are no Transparency Act reporting requirements for Vendors. Event of Default. Failure to comply with these Supplemental Provisions shall constitute an event of default under the Contract and the State of Colorado may terminate the Contract upon 30 days prior written notice if the default remains uncured five calendar days following the termination of the 30 day notice period. This remedy will be in addition to any other remedy available to the State of Colorado under the Contract, at law or in equity. Exhibit L - Page 1 of 3 EXHIBIT L SAMPLE SUBRECIPIENT MONITORING AND RISK ASSESSMENT Exhibit L - Page 2 of 3 Exhibit L - Page 3 of 3 Exhibit M - Page 1 of 5 EXHIBIT M OMB UNIFORM GUIDANCE FOR FEDERAL AWARDS Subject to The Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”), Federal Register, Vol. 78, No. 248, 78590 The agreement to which these Uniform Guidance Supplemental Provisions are attached has been funded, in whole or in part, with an award of Federal funds. In the event of a conflict between the provisions of these Supplemental Provisions, the Special Provisions, the agreement or any attachments or exhibits incorporated into and made a part of the agreement, the provisions of these Uniform Guidance Supplemental Provisions shall control. In the event of a conflict between the provisions of these Supplemental Provisions and the FFATA Supplemental Provisions, the FFATA Supplemental Provisions shall control. 1. Definitions. For the purposes of these Supplemental Provisions, the following terms shall have the meanings ascribed to them below. 1.1. “Award” means an award by a Recipient to a Subrecipient funded in whole or in part by a Federal Award. The terms and conditions of the Federal Award flow down to the Award unless the terms and conditions of the Federal Award specifically indicate otherwise. 2 CFR §200.38 1.2. “Federal Award” means an award of Federal financial assistance or a cost-reimbursement contract under the Federal Acquisition Requirements by a Federal Awarding Agency to a Recipient. “Federal Award” also means an agreement setting forth the terms and conditions of the Federal Award. The term does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. 1.3.“Federal Awarding Agency” means a Federal agency providing a Federal Award to a Recipient. 2CFR §200.37 1.4. “FFATA” means the Federal Funding Accountability and Transparency Act of 2006 (Public Law 109- 282), as amended by §6202 of Public Law 110-252. 1.5. “Grant” or “Grant Agreement” means an agreement setting forth the terms and conditions of an Award. The term does not include an agreement that provides only direct Federal cash assistance to an individual, a subsidy, a loan, a loan guarantee, insurance, or acquires property or services for the direct benefit of use of the Federal Awarding Agency or Recipient. 2 CFR§200.51. 1.6. “OMB” means the Executive Office of the President, Office of Management and Budget. 1.7. “Recipient” means a Colorado State department, agency or institution of higher education that receives a Federal Award from a Federal Awarding Agency to carry out an activity under a Federal program. The term does not include Subrecipients. 2 CFR §200.86 1.8. “State” means the State of Colorado, acting by and through its departments, agencies and institutions of higher education. 1.9. “Subrecipient” means a non-Federal entity receiving an Award from a Recipient to carry out part of a Federal program. The term does not include an individual who is a beneficiary of such program. 1.10. “Uniform Guidance” means the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, which supersedes requirements from OMB Circulars A-21, A-87, A-110, and A-122, OMB Circulars A-89, A-102, and A- 133, and the guidance in Circular A-50 on Single Audit Act follow-up. The terms and conditions of the Uniform Guidance flow down to Awards to Subrecipients unless the Uniform Guidance or the terms and conditions of the Federal Award specifically indicate otherwise. Exhibit M - Page 2 of 5 1.11. “Uniform Guidance Supplemental Provisions” means these Supplemental Provisions for Federal Awards subject to the OMB Uniform Guidance, as may be revised pursuant to ongoing guidance from relevant Federal agencies or the Colorado State Controller. 2. Compliance. Subrecipient shall comply with all applicable provisions of the Uniform Guidance, including but not limited to these Uniform Guidance Supplemental Provisions. Any revisions to such provisions automatically shall become a part of these Supplemental Provisions, without the necessity of either party executing any further instrument. The State of Colorado may provide written notification to Subrecipient of such revisions, but such notice shall not be a condition precedent to the effectiveness of such revisions. 3. Procurement Standards. 3.1 Procurement Procedures. Subrecipient shall use its own documented procurement procedures which reflect applicable State, local, and Tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in the Uniform Guidance, including without limitation, §§200.318 through 200.326 thereof. 3.2 Procurement of Recovered Materials. If Subrecipient is a State Agency or an agency of a political subdivision of a state, its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines. 4. Access to Records. Subrecipient shall permit Recipient and auditors to have access to Subrecipient’s records and financial statements as necessary for Recipient to meet the requirements of §200.331 (Requirements for pass through entities), §§200.300 (Statutory and national policy requirements) through 200.309 (Period of performance), and Subpart F-Audit Requirements of the Uniform Guidance. 2 CFR §200.331(a)(5). 5. Single Audit Requirements. If Subrecipient expends $750,000 or more in Federal Awards during Subrecipient’s fiscal year, Subrecipient shall procure or arrange for a single or program-specific audit conducted for that year in accordance with the provisions of Subpart F-Audit Requirements of the Uniform Guidance, issued pursuant to the Single Audit Act Amendments of 1996, (31 U.S.C. 7501- 7507). 2 CFR §200.501. 5.1 Election. Subrecipient shall have a single audit conducted in accordance with Uniform Guidance §200.514 (Scope of audit), except when it elects to have a program-specific audit conducted in accordance with §200.507 (Program-specific audits). Subrecipient may elect to have a program-specific audit if Subrecipient expends Federal Awards under only one Federal program (excluding research and development) and the Federal program's statutes, regulations, or the terms and conditions of the Federal award do not require a financial statement audit of Recipient. A program-specific audit may not be elected for research and development unless all of the Federal Awards expended were received from Recipient and Recipient approves in advance a program-specific audit. 5.2 Exemption. If Subrecipient expends less than $750,000 in Federal Awards during its fiscal year, Subrecipient shall be exempt from Federal audit requirements for that year, except as noted in 2 CFR §200.503 (Relation to other audit requirements), but records shall be available for review or audit by appropriate officials of the Federal agency, the State, and the Government Exhibit M - Page 3 of 5 Accountability Office. 5.3 Subrecipient Compliance Responsibility. Subrecipient shall procure or otherwise arrange for the audit required by Part F of the Uniform Guidance and ensure it is properly performed and submitted when due in accordance with the Uniform Guidance. Subrecipient shall prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with Uniform Guidance §200.510 (Financial statements) and provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by Uniform Guidance Part F-Audit Requirements. 6. Contract Provisions for Subrecipient Contracts. Subrecipient shall comply with and shall include all of the following applicable provisions in all subcontracts entered into by it pursuant to this Grant Agreement. 6.1 Equal Employment Opportunity. Except as otherwise provided under 41 CFR Part 60, all contracts that meet the definition of “federally assisted construction contract” in 41 CFR Part 60- 1.3 shall include the equal opportunity clause provided under 41 CFR 60-1.4(b), in accordance with Executive Order 11246, “Equal Employment Opportunity” (30 FR 12319, 12935, 3 CFR Part, 1964-1965 Comp., p. 339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and implementing regulations at 41 CFR part 60, “Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.” “During the performance of this contract, the contractor agrees as follows: (1) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to the following: Employment, upgrading, demotion, or transfer, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause. (2) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. (3) The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided by the agency contracting officer, advising the labor union or workers' representative of the contractor's commitments under section 202 of Executive Order 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. (4) The contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. (5) The contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders. (6) In the event of the contractor's non-compliance with the nondiscrimination clauses of this contract or with any of such rules, regulations, or orders, this contract may be canceled, Exhibit M - Page 4 of 5 terminated or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided bylaw. (7) The contractor will include the provisions of paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing such provisions including sanctions for noncompliance: Provided, however, that in the event the contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction, the contractor may request the United States to enter into such litigation to protect the interests of the United States.” 6.2 Davis-Bacon Act. Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland “Anti-Kickback” Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States”). The Act provides that each contractor or Subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is other wise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 6.3 Rights to Inventions Made Under a Contract or Agreement. If the Federal Award meets the definition of “funding agreement” under 37 CFR §401.2 (a) and Subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding agreement,” Subrecipient must comply with the requirements of 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,” and any implementing regulations issued by the awarding agency. 6.4 Clean Air Act (42 U.S.C. 7401-7671q.) and the Federal Water Pollution Control Act (33 U.S.C. 1251- 1387), as amended. Contracts and subgrants of amounts in excess of $150,000 must contain a provision that requires the non-Federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Exhibit M - Page 5 of 5 Agency (EPA). 6.5 Debarment and Suspension (Executive Orders 12549 and 12689). A contract award (see 2 CFR 180.220) must not be made to parties listed on the government wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. 6.6 Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Contractors that apply or bid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non- Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the non-Federal award. 7. Certifications. Unless prohibited by Federal statutes or regulations, Recipient may require Subrecipient to submit certifications and representations required by Federal statutes or regulations on an annual basis. 2CFR §200.208. Submission may be required more frequently if Subrecipient fails to meet a requirement of the Federal award. Subrecipient shall certify in writing to the State at the end of the Award that the project or activity was completed or the level of effort was expended. 2 CFR §200.201(3). If the required level of activity or effort was not carried out, the amount of the Award must be adjusted. 7.1 Event of Default. Failure to comply with these Uniform Guidance Supplemental Provisions shall constitute an event of default under the Grant Agreement (2 CFR §200.339) and the State may terminate the Grant upon 30 days prior written notice if the default remains uncured five calendar days following the termination of the 30 day notice period. This remedy will be in addition to any other remedy available to the State of Colorado under the Grant, at law or in equity. 8. Effective Date. The effective date of the Uniform Guidance is December 26, 2013. 2 CFR §200.110. The procurement standards set forth in Uniform Guidance §§200.317-200.326 are applicable to new Awards made by Recipient as of December 26, 2015. The standards set forth in Uniform Guidance Subpart F- Audit Requirements are applicable to audits of fiscal years beginning on or after December 26, 2014. 9. Performance Measurement. The Uniform Guidance requires completion of OMB-approved standard information collection forms (the PPR). The form focuses on outcomes, as related to the Federal Award Performance Goals that awarding Federal agencies are required to detail in the Awards. Section 200.301 provides guidance to Federal agencies to measure performance in a way that will help the Federal awarding agency and other non-Federal entities to improve program outcomes. The Federal awarding agency is required to provide recipients with clear performance goals, indicators, and milestones (200.210). Also, must require the recipient to relate financial data to performance accomplishments of the Federal award. Exhibit N- Page 1 of 15 Version 1.31.23 Exhibit N Federal Treasury Provisions 1. APPLICABILITY OF PROVISIONS. 1.1. The Grant to which these Federal Provisions are attached has been funded, in whole or in part, with an Award of Federal funds. In the event of a conflict between the provisions of these Federal Provisions, the Special Provisions, the body of the Grant, or any attachments or exhibits incorporated into and made a part of the Grant, the provisions of these Federal Provisions shall control. 1.2. The State of Colorado is accountable to Treasury for oversight of their subrecipients, including ensuring their subrecipients comply with the SLFRF statute, SLFRF Award Terms and Conditions, Treasury’s Final Rule, and reporting requirements, as applicable. 1.3. Additionally, any subrecipient that issues a subaward to another entity (2nd tier subrecipient), must hold the 2nd tier subrecipient accountable to these provisions and adhere to reporting requirements. 1.4. These Federal Provisions are subject to the Award as defined in §2 of these Federal Provisions, as may be revised pursuant to ongoing guidance from the relevant Federal or State of Colorado agency or institutions of higher education. 2. DEFINITIONS. 2.1. For the purposes of these Federal Provisions, the following terms shall have the meanings ascribed to them below. 2.1.1. “Award” means an award of Federal financial assistance, and the Grant setting forth the terms and conditions of that financial assistance, that a non-Federal Entity receives or administers. 2.1.2. “Entity” means: 2.1.2.1. a Non-Federal Entity; 2.1.2.2. a foreign public entity; 2.1.2.3. a foreign organization; 2.1.2.4. a non-profit organization; 2.1.2.5. a domestic for-profit organization (for 2 CFR parts 25 and 170 only); 2.1.2.6. a foreign non-profit organization (only for 2 CFR part 170) only); 2.1.2.7. a Federal agency, but only as a Subrecipient under an Award or Subaward to a non-Federal entity (or 2 CFR 200.1); or 2.1.2.8. a foreign for-profit organization (for 2 CFR part 170 only). 2.1.3. “Executive” means an officer, managing partner or any other employee in a management position. 2.1.4. “Expenditure Category (EC)” means the category of eligible uses as defined by the US Department of Treasury in “Appendix 1 of the Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds” report available at www.treasury.gov. Exhibit N- Page 2 of 15 Version 1.31.23 2.1.5. “Federal Awarding Agency” means a Federal agency providing a Federal Award to a Recipient as described in 2 CFR 200.1 2.1.6. “Grant” means the Grant to which these Federal Provisions are attached. 2.1.7. “Grantee” means the party or parties identified as such in the Grant to which these Federal Provisions are attached. 2.1.8. “Non-Federal Entity means a State, local government, Indian tribe, institution of higher education, or nonprofit organization that carries out a Federal Award as a Recipient or a Subrecipient. 2.1.9. “Nonprofit Organization” means any corporation, trust, association, cooperative, or other organization, not including IHEs, that: 2.1.9.1. Is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest; 2.1.9.2. Is not organized primarily for profit; and 2.1.9.3. Uses net proceeds to maintain, improve, or expand the operations of the organization. 2.1.10. “OMB” means the Executive Office of the President, Office of Management and Budget. 2.1.11. “Pass-through Entity” means a non-Federal Entity that provides a Subaward to a Subrecipient to carry out part of a Federal program. 2.1.12. “Prime Recipient” means the Colorado State agency or institution of higher education identified as the Grantor in the Grant to which these Federal Provisions are attached. 2.1.13. “Subaward” means an award by a Prime Recipient to a Subrecipient funded in whole or in part by a Federal Award. The terms and conditions of the Federal Award flow down to the Subaward unless the terms and conditions of the Federal Award specifically indicate otherwise in accordance with 2 CFR 200.101. The term does not include payments to a Contractor or payments to an individual that is a beneficiary of a Federal program. 2.1.14. “Subrecipient” or “Subgrantee” means a non-Federal Entity (or a Federal agency under an Award or Subaward to a non-Federal Entity) receiving Federal funds through a Prime Recipient to support the performance of the Federal project or program for which the Federal funds were awarded. A Subrecipient is subject to the terms and conditions of the Federal Award to the Prime Recipient, including program compliance requirements. The term does not include an individual who is a beneficiary of a federal program. 2.1.15. “System for Award Management (SAM)” means the Federal repository into which an Entity must enter the information required under the Transparency Act, which may be found at http://www.sam.gov. “Total Compensation” means the cash and noncash dollar value earned by an Executive during the Prime Recipient’s or Subrecipient’s preceding fiscal year (see 48 CFR 52.204-10, as prescribed in 48 CFR 4.1403(a)) and includes the following: 2.1.15.1. Salary and bonus; 2.1.15.2. Awards of stock, stock options, and stock appreciation rights, using the dollar amount recognized for financial statement reporting purposes with respect to the Exhibit N- Page 3 of 15 Version 1.31.23 fiscal year in accordance with the Statement of Financial Accounting Standards No. 123 (Revised 2005) (FAS 123R), Shared Based Payments; 2.1.15.3. Earnings for services under non-equity incentive plans, not including group life, health, hospitalization or medical reimbursement plans that do not discriminate in favor of Executives and are available generally to all salaried employees; 2.1.15.4. Change in present value of defined benefit and actuarial pension plans; 2.1.15.5. Above-market earnings on deferred compensation which is not tax-qualified; 2.1.15.6. Other compensation, if the aggregate value of all such other compensation (e.g., severance, termination payments, value of life insurance paid on behalf of the employee, perquisites or property) for the Executive exceeds $10,000. 2.1.16. “Transparency Act” means the Federal Funding Accountability and Transparency Act of 2006 (Public Law 109-282), as amended by §6202 of Public Law 110-252. 2.1.17. “Uniform Guidance” means the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The terms and conditions of the Uniform Guidance flow down to Awards to Subrecipients unless the Uniform Guidance or the terms and conditions of the Federal Award specifically indicate otherwise. 2.1.18. “Unique Entity ID” means the Unique Entity ID established by the federal government for a Grantee at https://sam.gov/content/home. 3. COMPLIANCE. 3.1. Grantee shall comply with all applicable provisions of the Transparency Act and the regulations issued pursuant thereto, all applicable provisions of the Uniform Guidance, and all applicable Federal Laws and regulations required by this Federal Award Any revisions to such provisions or regulations shall automatically become a part of these Federal Provisions, without the necessity of either party executing any further instrument. The State of Colorado, at its discretion, may provide written notification to Grantee of such revisions, but such notice shall not be a condition precedent to the effectiveness of such revisions. 3.2. Per US Treasury Final Award requirements, grantee programs or services must not include a term or conditions that undermines efforts to stop COVID-19 or discourages compliance with recommendations and CDC guidelines. 4. SYSTEM FOR AWARD MANAGEMENT (SAM) AND UNIQUE ENTITY ID (UEI) REQUIREMENTS. 4.1. SAM. Grantee shall maintain the currency of its information in SAM until the Grantee submits the final financial report required under the Award or receives final payment, whichever is later. Grantee shall review and update SAM information at least annually. 4.2. UEI. Grantee shall provide its Unique Entity ID to its Prime Recipient, and shall update Grantee’s information in Sam.gov at least annually. 5. TOTAL COMPENSATION. 5.1. Grantee shall include Total Compensation in SAM for each of its five most highly compensated Executives for the preceding fiscal year if: 5.1.1. The total Federal funding authorized to date under the Award is $30,000 or more; and 5.1.2. In the preceding fiscal year, Grantee received: Exhibit N- Page 4 of 15 Version 1.31.23 5.1.2.1. 80% or more of its annual gross revenues from Federal procurement Agreements and Subcontractors and/or Federal financial assistance Awards or Subawards subject to the Transparency Act; and 5.1.2.2. $30,000,000 or more in annual gross revenues from Federal procurement Agreements and Subcontractors and/or Federal financial assistance Awards or Subawards subject to the Transparency Act; and 5.1.2.3. 5.1.2.3 The public does not have access to information about the compensation of such Executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d) or § 6104 of the Internal Revenue Code of 1986. 6. REPORTING. 6.1. If Grantee is a Subrecipient of the Award pursuant to the Transparency Act, Grantee shall report data elements to SAM and to the Prime Recipient as required in this Exhibit. No direct payment shall be made to Grantee for providing any reports required under these Federal Provisions and the cost of producing such reports shall be included in the Grant price. The reporting requirements in this Exhibit are based on guidance from the OMB, and as such are subject to change at any time by OMB. Any such changes shall be automatically incorporated into this Grant and shall become part of Grantee’s obligations under this Grant. 7. EFFECTIVE DATE AND DOLLAR THRESHOLD FOR FEDERAL REPORTING. 7.1. Reporting requirements in §8 below apply to new Awards as of October 1, 2010, if the initial award is $30,000 or more. If the initial Award is below $30,000 but subsequent Award modifications result in a total Award of $30,000 or more, the Award is subject to the reporting requirements as of the date the Award exceeds $30,000. If the initial Award is $30,000 or more, but funding is subsequently de-obligated such that the total award amount falls below $30,000, the Award shall continue to be subject to the reporting requirements. If the total award is below $30,000 no reporting required; if more than $30,000 and less than $50,000 then FFATA reporting is required; and, $50,000 and above SLFRF reporting is required. 7.2. The procurement standards in §9 below are applicable to new Awards made by Prime Recipient as of December 26, 2015. The standards set forth in §11 below are applicable to audits of fiscal years beginning on or after December 26, 2014. 8. SUBRECIPIENT REPORTING REQUIREMENTS. 8.1. Grantee shall report as set forth below. 8.1.1. Grantee shall use the SLFRF Subrecipient Quarterly Report Workbook as referenced in Exhibit P to report to the State Agency within ten (10) days following each quarter ended September, December, March and June. Additional information on specific requirements are detailed in the SLFRF Subrecipient Quarterly Report Workbooks and "Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds" report available at www.treasury.gov. Exhibit N- Page 5 of 15 Version 1.31.23 EC 1 – Public Health All Public Health Projects a) Description of structure and objectives b) Description of relation to COVID-19 c) Identification of impacted and/or disproportionately impacted communities d) Capital Expenditures i. Presence of capital expenditure in project ii. Total projected capital expenditure iii. Type of capital expenditure iv. Written justification v. Labor reporting COVID-19 Interventions and Mental Health (1.4, 1.11, 1.12, 1.13) a) Amount of total project used for evidence-based programs b) Evaluation plan description COVID-19 Small Business Economic Assistance (1.8) a) Number of small businesses served COVID-19 Assistance to Non-Profits (1.9) a) Number of non-profits served COVID-19 Aid to Travel, Tourism, and Hospitality or Other Impacted Industries (1.10) a) Sector of employer b) Purpose of funds EC 2 – Negative Economic Impacts All Negative Economic Impacts Projects a) Description of project structure and objectives b) Description of project’s response to COVID-19 c) Identification of impacted and/or disproportionately impacted communities d) Amount of total project used for evidence-based programs and description of evaluation plan (not required for 2.5, 2.8, 2.21-2.24, 2.27-2.29, 2.31, 2.34-2.36) e) Number of workers enrolled in sectoral job training programs f) Number of workers completing sectoral job training programs g) Number of people participating in summer youth employment programs h) Capital Expenditures i. Presence of capital expenditure in project ii. Total projected capital expenditure iii. Type of capital expenditure iv. Written justification v. Labor reporting Household Assistance (2.1-2.8) a) Number of households served Exhibit N- Page 6 of 15 Version 1.31.23 b) Number of people or households receiving eviction prevention services (2.2 & 2.5 only) (Federal guidance may change this requirement in July 2022) c) Number of affordable housing units preserved or developed (2.2 & 2.5 only) (Federal guidance may change this requirement in July 2022) Healthy Childhood Environments (2.11-2.13) a) Number of children served by childcare and early learning (Federal guidance may change this requirement in July 2022) b) Number of families served by home visiting (Federal guidance may change this requirement in July 2022) Education Assistance (2.14, 2.24-2.27) a) National Center for Education Statistics (“NCES”) School ID or NCES District ID b) Number of students participating in evidence-based programs (Federal guidance may change this requirement in July 2022) Housing Support (2.15, 2.16, 2.18) a) Number of people or households receiving eviction prevention services (Federal guidance may change this requirement in July 2022) b) Number of affordable housing units preserved or developed (Federal guidance may change this requirement in July 2022) Small Business Economic Assistance (2.29-2.33) a) Number of small businesses served Assistance to Non-Profits (2.34) a) Number of non-profits served Aid to Travel, Tourism, and Hospitality or Other Impacted Industries (2.35-2.36) a) Sector of employer b) Purpose of funds c) If other than travel, tourism and hospitality (2.36) – description of hardship EC 3 – Public Health – Negative Economic Impact: Public Sector Capacity Payroll for Public Health and Safety Employees (EC 3.1) a) Number of government FTEs responding to COVID-19 Rehiring Public Sector Staff (EC 3.2) a) Number of FTEs rehired by governments EC 4 – Premium Pay All Premium Pay Projects a) List of sectors designated as critical by the chief executive of the jurisdiction, if beyond those listed in the final rule b) Numbers of workers served c) Employer sector for all subawards to third-party employers d) Written narrative justification of how premium pay is responsive to essential work during the public health emergency for non-exempt workers or those making over 150 percent of the state/county’s average annual wage Exhibit N- Page 7 of 15 Version 1.31.23 e) Number of workers to be served with premium pay in K-12 schools EC 5 – Infrastructure Projects All Infrastructure Projects a) Projected/actual construction start date (month/year) b) Projected/actual initiation of operations date (month/year) c) Location (for broadband, geospatial data of locations to be served) d) Projects over $10 million i. Prevailing wage certification or detailed project employment and local impact report ii. Project labor agreement certification or project workforce continuity plan iii. Prioritization of local hires iv. Community benefit agreement description, if applicable Water and sewer projects (EC 5.1-5.18) a) National Pollutant Discharge Elimination System (NPDES) Permit Number (if applicable; for projects aligned with the Clean Water State Revolving Fund) b) Public Water System (PWS) ID number (if applicable; for projects aligned with the Drinking Water State Revolving Fund) c) Median Household Income of service area d) Lowest Quintile Income of the service area Broadband projects (EC 5.19-5.21) a) Confirm that the project is designed to, upon completion, reliably meet or exceed symmetrical 100 Mbps download and upload speeds. i. If the project is not designed to reliably meet or exceed symmetrical 100 Mbps download and upload speeds, explain why not, and ii. Confirm that the project is designed to, upon completion, meet or exceed 100 Mbps download speed and between at least 20 Mbps and 100 Mbps upload speed, and be scalable to a minimum of 100 Mbps download speed and 100 Mbps upload speed. b) Additional programmatic data will be required for broadband projects and will be defined in a subsequent version of the US Treasury Reporting Guidance, including, but not limited to (Federal guidance may change this requirement in July 2022): i. Number of households (broken out by households on Tribal lands and those not on Tribal lands) that have gained increased access to broadband meeting the minimum speed standards in areas that previously lacked access to service of at least 25 Mbps download and 3 Mbps upload, with the number of households with access to minimum speed standard of reliable 100 Mbps symmetrical upload and download and number of households with access to minimum speed standard of reliable 100 Mbps download and 20 Mbps upload ii. Number of institutions and businesses (broken out by institutions on Tribal lands and those not on Tribal lands) that have projected increased access to broadband meeting the minimum speed standards in areas that previously Exhibit N- Page 8 of 15 Version 1.31.23 lacked access to service of at least 25 Mbps download and 3 Mbps upload, in each of the following categories: business, small business, elementary school, secondary school, higher education institution, library, healthcare facility, and public safety organization, with the number of each type of institution with access to the minimum speed standard of reliable 100 Mbps symmetrical upload and download; and number of each type of institution with access to the minimum speed standard of reliable 100 Mbps download and 20 Mbps upload. iii. Narrative identifying speeds/pricing tiers to be offered, including the speed/pricing of its affordability offering, technology to be deployed, miles of fiber, cost per mile, cost per passing, number of households (broken out by households on Tribal lands and those not on Tribal lands) projected to have increased access to broadband meeting the minimum speed standards in areas that previously lacked access to service of at least 25 Mbps download and 3 Mbps upload, number of households with access to minimum speed standard of reliable 100 Mbps symmetrical upload and download, number of households with access to minimum speed standard of reliable 100 Mbps download and 20 Mbps upload, and number of institutions and businesses (broken out by institutions on Tribal lands and those not on Tribal lands) projected to have increased access to broadband meeting the minimum speed standards in areas that previously lacked access to service of at least 25 Mbps download and 3 Mbps upload, in each of the following categories: business, small business, elementary school, secondary school, higher education institution, library, healthcare facility, and public safety organization. Specify the number of each type of institution with access to the minimum speed standard of reliable 100 Mbps symmetrical upload and download; and the number of each type of institution with access to the minimum speed standard of reliable 100 Mbps download and 20 Mbps upload. All Expenditure Categories a) Program income earned and expended to cover eligible project costs 8.1.2. A Subrecipient shall report the following data elements to Prime Recipient no later than five days after the end of the month following the month in which the Subaward was made. 8.1.2.1. Subrecipient Unique Entity ID; 8.1.2.2. Subrecipient Unique Entity ID if more than one electronic funds transfer (EFT) account; 8.1.2.3. Subrecipient parent’s organization Unique Entity ID; 8.1.2.4. Subrecipient’s address, including: Street Address, City, State, Country, Zip + 4, and Congressional District; Exhibit N- Page 9 of 15 Version 1.31.23 8.1.2.5. Subrecipient’s top 5 most highly compensated Executives if the criteria in §4 above are met; and 8.1.2.6. Subrecipient’s Total Compensation of top 5 most highly compensated Executives if the criteria in §4 above met. 8.1.3. To Prime Recipient. A Subrecipient shall report to its Prime Recipient, the following data elements: 8.1.3.1. Subrecipient’s Unique Entity ID as registered in SAM. 8.1.3.2. Primary Place of Performance Information, including: Street Address, City, State, Country, Zip code + 4, and Congressional District. 8.1.3.3. Narrative identifying methodology for serving disadvantaged communities. See the "Project Demographic Distribution" section in the "Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds" report available at www.treasury.gov. This requirement is applicable to all projects in Expenditure Categories 1 and 2. 8.1.3.4. Narrative identifying funds allocated towards evidenced-based interventions and the evidence base. See the “Use of Evidence” section in the “Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds” report available at www.treasury.gov. See section 8.1.1 for relevant Expenditure Categories. 8.1.3.5. Narrative describing the structure and objectives of the assistance program and in what manner the aid responds to the public health and negative economic impacts of COVID-19. This requirement is applicable to Expenditure Categories 1 and 2. For aid to travel, tourism, and hospitality or other impacted industries (EC 2.11- 2.12), also provide the sector of employer, purpose of funds, and if not travel, tourism and hospitality a description of the pandemic impact on the industry. 8.1.3.6. Narrative identifying the sector served and designated as critical to the health and well-being of residents by the chief executive of the jurisdiction and the number of workers expected to be served. For groups of workers (e.g., an operating unit, a classification of worker, etc.) or, to the extent applicable, individual workers, other than those where the eligible worker receiving premium pay is earning (with the premium pay included) below 150 percent of their residing state or county’s average annual wage for all occupations, as defined by the Bureau of Labor Statistics Occupational Employment and Wage Statistics, whichever is higher, OR the eligible worker receiving premium pay is not exempt from the Fair Labor Standards Act overtime provisions, include justification of how the premium pay or grant is responsive to workers performing essential work during the public health emergency. This could include a description of the essential workers' duties, health or financial risks faced due to COVID-19 but should not include personally identifiable information. This requirement applies to EC 4.1, and 4.2. 8.1.3.7. For infrastructure projects (EC 5), or capital expenditures in any expenditure category, narrative identifying the projected construction start date (month/year), projected initiation of operations date (month/year), and location (for broadband, geospatial location data). For projects over $10 million: 8.1.3.8. Certification that all laborers and mechanics employed by Contractors and Subcontractors in the performance of such project are paid wages at rates not less Exhibit N- Page 10 of 15 Version 1.31.23 than those prevailing, as determined by the U.S. Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code (commonly known as the "Davis-Bacon Act"), for the corresponding classes of laborers and mechanics employed on projects of a character similar to the Agreement work in the civil subdivision of the State (or the District of Columbia) in which the work is to be performed, or by the appropriate State entity pursuant to a corollary State prevailing-wage-in-construction law (commonly known as "baby Davis-Bacon Acts"). If such certification is not provided, a recipient must provide a project employment and local impact report detailing (1) the number of employees of Contractors and sub-contractors working on the project; (2) the number of employees on the project hired directly and hired through a third party; (3) the wages and benefits of workers on the project by classification; and (4) whether those wages are at rates less than those prevailing. Recipients must maintain sufficient records to substantiate this information upon request. 8.1.3.8.1. A Subrecipient may provide a certification that a project includes a project labor agreement, meaning a pre-hire collective bargaining agreement consistent with section 8(f) of the National Labor Relations Act (29 U.S.C. 158(f)). If the recipient does not provide such certification, the recipient must provide a project workforce continuity plan, detailing: (1) how the Subrecipient will ensure the project has ready access to a sufficient supply of appropriately skilled and unskilled labor to ensure high-quality construction throughout the life of the project; (2) how the Subrecipient will minimize risks of labor disputes and disruptions that would jeopardize timeliness and cost- effectiveness of the project; and (3) how the Subrecipient will provide a safe and healthy workplace that avoids delays and costs associated with workplace illnesses, injuries, and fatalities; (4) whether workers on the project will receive wages and benefits that will secure an appropriately skilled workforce in the context of the local or regional labor market; and (5) whether the project has completed a project labor agreement. 8.1.3.8.2. Whether the project prioritizes local hires. 8.1.3.8.3. Whether the project has a Community Benefit Agreement, with a description of any such agreement. 8.1.4. Subrecipient also agrees to comply with any reporting requirements established by the US Treasury, Governor’s Office and Office of the State Controller. The State of Colorado may need additional reporting requirements after this agreement is executed. If there are additional reporting requirements, the State will provide notice of such additional reporting requirements via Exhibit Q – SLFRF Reporting Modification Form. Exhibit N- Page 11 of 15 Version 1.31.23 9. PROCUREMENT STANDARDS. 9.1. Procurement Procedures. A Subrecipient shall use its own documented procurement procedures which reflect applicable State, local, and Tribal laws and applicable regulations, provided that the procurements conform to applicable Federal law and the standards identified in the Uniform Guidance, including without limitation, 2 CFR 200.318 through 200.327 thereof. 9.2. Domestic preference for procurements (2 CFR 200.322). As appropriate and to the extent consistent with law, the non-Federal entity should, to the greatest extent practicable under a Federal award, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products). The requirements of this section must be included in all subawards including all Agreements and purchase orders for work or products under this award. 9.3. Procurement of Recovered Materials. If a Subrecipient is a State Agency or an agency of a political subdivision of the State, its Contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247, that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines. 10. ACCESS TO RECORDS. 10.1. A Subrecipient shall permit Prime Recipient and its auditors to have access to Subrecipient’s records and financial statements as necessary for Recipient to meet the requirements of 2 CFR 200.332 (Requirements for pass-through entities), 2 CFR 200.300 (Statutory and national policy requirements) through 2 CFR 200.309 (Period of performance), and Subpart F-Audit Requirements of the Uniform Guidance. 11. SINGLE AUDIT REQUIREMENTS. 11.1. If a Subrecipient expends $750,000 or more in Federal Awards during the Subrecipient’s fiscal year, the Subrecipient shall procure or arrange for a single or program-specific audit conducted for that year in accordance with the provisions of Subpart F-Audit Requirements of the Uniform Guidance, issued pursuant to the Single Audit Act Amendments of 1996, (31 U.S.C. 7501-7507). 2 CFR 200.501. Exhibit N- Page 12 of 15 Version 1.31.23 11.1.1. Election. A Subrecipient shall have a single audit conducted in accordance with Uniform Guidance 2 CFR 200.514 (Scope of audit), except when it elects to have a program- specific audit conducted in accordance with 2 CFR 200.507 (Program-specific audits). The Subrecipient may elect to have a program-specific audit if Subrecipient expends Federal Awards under only one Federal program (excluding research and development) and the Federal program’s statutes, regulations, or the terms and conditions of the Federal award do not require a financial statement audit of Prime Recipient. A program-specific audit may not be elected for research and development unless all of the Federal Awards expended were received from Recipient and Recipient approves in advance a program- specific audit. 11.1.2. Exemption. If a Subrecipient expends less than $750,000 in Federal Awards during its fiscal year, the Subrecipient shall be exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503 (Relation to other audit requirements), but records shall be available for review or audit by appropriate officials of the Federal agency, the State, and the Government Accountability Office. 11.1.3. Subrecipient Compliance Responsibility. A Subrecipient shall procure or otherwise arrange for the audit required by Subpart F of the Uniform Guidance and ensure it is properly performed and submitted when due in accordance with the Uniform Guidance. Subrecipient shall prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR 200.510 (Financial statements) and provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by Uniform Guidance Subpart F-Audit Requirements. 12. GRANT PROVISIONS FOR SUBRECIPIENT AGREEMENTS. 12.1. In addition to other provisions required by the Federal Awarding Agency or the Prime Recipient, Grantees that are Subrecipients shall comply with the following provisions. Subrecipients shall include all of the following applicable provisions in all Subcontractors entered into by it pursuant to this Grant. 12.1.1. [Applicable to federally assisted construction Agreements.] Equal Employment Opportunity. Except as otherwise provided under 41 CFR Part 60, all Agreements that meet the definition of “federally assisted construction Agreement” in 41 CFR Part 60-1.3 shall include the equal opportunity clause provided under 41 CFR 60-1.4(b), in accordance with Executive Order 11246, “Equal Employment Opportunity” (30 FR 12319, 12935, 3 CFR Part, 1964-1965 Comp., p. 339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and implementing regulations at 41 CFR part 60, Office of Federal Agreement Compliance Programs, Equal Employment Opportunity, Department of Labor. 12.1.2. [Applicable to on-site employees working on government-funded construction, alteration and repair projects.] Davis-Bacon Act. Davis-Bacon Act, as amended (40 U.S.C. 3141- 3148). Exhibit N- Page 13 of 15 Version 1.31.23 12.1.3. Rights to Inventions Made Under a grant or agreement. If the Federal Award meets the definition of “funding agreement” under 37 CFR 401.2 (a) and the Prime Recipient or Subrecipient wishes to enter into an Agreement with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding agreement,” the Prime Recipient or Subrecipient must comply with the requirements of 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Agreements and Cooperative Agreements,” and any implementing regulations issued by the Federal Awarding Agency. 12.1.4. Clean Air Act (42 U.S.C. 7401-7671q.) and the Federal Water Pollution Control Act (33 U.S.C. 1251-1387), as amended. Agreements and subgrants of amounts in excess of $150,000 must contain a provision that requires the non-Federal awardees to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387). Violations must be reported to the Federal Awarding Agency and the Regional Office of the Environmental Protection Agency (EPA). 12.1.5. Debarment and Suspension (Executive Orders 12549 and 12689). A Agreement award (see 2 CFR 180.220) must not be made to parties listed on the government wide exclusions in SAM, in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. 12.1.6. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352). Contractors that apply or bid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal Agreement, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the non-Federal award. 12.1.7. Never Contract with the Enemy (2 CFR 200.215). Federal awarding agencies and recipients are subject to the regulations implementing “Never Contract with the Enemy” in 2 CFR part 183. The regulations in 2 CFR part 183 affect covered Agreements, grants and cooperative agreements that are expected to exceed $50,000 within the period of performance, are performed outside the United States and its territories, and are in support of a contingency operation in which members of the Armed Forces are actively engaged in hostilities. 12.1.8. Prohibition on certain telecommunications and video surveillance services or equipment (2 CFR 200.216). Grantee is prohibited from obligating or expending loan or grant funds on certain telecommunications and video surveillance services or equipment pursuant to 2 CFR 200.216. Exhibit N- Page 14 of 15 Version 1.31.23 12.1.9. Title VI of the Civil Rights Act. The Subgrantee, Contractor, Subcontractor, transferee, and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this Agreement (or agreement). Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S. C. § 2000d et seq., as implemented by the Department of the Treasury’s Title VI regulations, 31 CRF Part 22, and herein incorporated by reference and made part of this Agreement or agreement. 13. CERTIFICATIONS. 13.1. Subrecipient Certification. Subrecipient shall sign a “State of Colorado Agreement with Recipient of Federal Recovery Funds” Certification Form in Exhibit E and submit to State Agency with signed grant agreement. 13.2. Unless prohibited by Federal statutes or regulations, Prime Recipient may require Subrecipient to submit certifications and representations required by Federal statutes or regulations on an annual basis. 2 CFR 200.208. Submission may be required more frequently if Subrecipient fails to meet a requirement of the Federal award. Subrecipient shall certify in writing to the State at the end of the Award that the project or activity was completed or the level of effort was expended. 2 CFR 200.201(3). If the required level of activity or effort was not carried out, the amount of the Award must be adjusted. 14. EXEMPTIONS. 14.1. These Federal Provisions do not apply to an individual who receives an Award as a natural person, unrelated to any business or non-profit organization he or she may own or operate in his or her name. 14.2. A Grantee with gross income from all sources of less than $300,000 in the previous tax year is exempt from the requirements to report Subawards and the Total Compensation of its most highly compensated Executives. 15. EVENT OF DEFAULT AND TERMINATION. 15.1. Failure to comply with these Federal Provisions shall constitute an event of default under the Grant and the State of Colorado may terminate the Grant upon 30 days prior written notice if the default remains uncured five calendar days following the termination of the 30-day notice period. This remedy will be in addition to any other remedy available to the State of Colorado under the Grant, at law or in equity. 15.2. Termination (2 CFR 200.340). The Federal Award may be terminated in whole or in part as follows: 15.2.1. By the Federal Awarding Agency or Pass-through Entity, if a Non-Federal Entity fails to comply with the terms and conditions of a Federal Award; 15.2.2. By the Federal awarding agency or Pass-through Entity, to the greatest extent authorized by law, if an award no longer effectuates the program goals or agency priorities; Exhibit N- Page 15 of 15 Version 1.31.23 15.2.3. By the Federal awarding agency or Pass-through Entity with the consent of the Non- Federal Entity, in which case the two parties must agree upon the termination conditions, including the effective date and, in the case of partial termination, the portion to be terminated; 15.2.4. By the Non-Federal Entity upon sending to the Federal Awarding Agency or Pass- through Entity written notification setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if the Federal Awarding Agency or Pass-through Entity determines in the case of partial termination that the reduced or modified portion of the Federal Award or Subaward will not accomplish the purposes for which the Federal Award was made, the Federal Awarding Agency or Pass-through Entity may terminate the Federal Award in its entirety; or 15.2.5. By the Federal Awarding Agency or Pass-through Entity pursuant to termination provisions included in the Federal Award. Exhibit O - Page 1 of 9 EXHIBIT O AGREEMENT WITH SUBSUBRECIPIENT OF FEDERAL RECOVERY FUNDS Section 602(b) of the Social Security Act (the Act), as added by section 9901 of the American Rescue Plan Act (ARPA), Pub. L. No. 117-2 (March 11, 2021), authorizes the Department of the Treasury (Treasury) to make payments to certain Subrecipients from the Coronavirus State Fiscal Recovery Fund. The State of Colorado has signed and certified a separate agreement with Treasury as a condition of receiving such payments from the Treasury. This agreement is between your organization and the State and your organization is signing and certifying the same terms and conditions included in the State’s separate agreement with Treasury. Your organization is referred to as a Subrecipient. As a condition of your organization receiving federal recovery funds from the State, the authorized representative below hereby (i) certifies that your organization will carry out the activities listed in section 602(c) of the Act and (ii) agrees to the terms attached hereto. Your organization also agrees to use the federal recovery funds as specified in bills passed by the General Assembly and signed by the Governor. Under penalty of perjury, the undersigned official certifies that the authorized representative has read and understood the organization’s obligations in the Assurances of Compliance and Civil Rights Requirements, that any information submitted in conjunction with this assurances document is accurate and complete, and that the organization is in compliance with the nondiscrimination requirements. Subrecipient Name Authorized Representative: Title: Signature: Exhibit O - Page 2 of 9 AGREEMENT WITH SUBRECIPIENT OF FEDERAL RECOVERY FUNDS TERMS AND CONDITIONS Use of Funds. a. Subrecipient understands and agrees that the funds disbursed under this award may only be used in compliance with section 602(c) of the Social Security Act (the Act) and Treasury’s regulations implementing that section and guidance. b. Subrecipient will determine prior to engaging in any project using this assistance that it has the institutional, managerial, and financial capability to ensure proper planning, management, and completion of such project. Period of Performance. The period of performance for this award begins on the date hereof and ends on December 31, 2026. As set forth in Treasury’s implementing regulations, Subrecipient may use award funds to cover eligible costs incurred during the period that begins on March 3, 2021, and ends on December 31, 2024. Reporting. Subrecipient agrees to comply with any reporting obligations established by Treasury as they relate to this award. Subrecipient also agrees to comply with any reporting requirements established by the Governor’s Office and Office of the State Controller. Maintenance of and Access to Records a. Subrecipient shall maintain records and financial documents sufficient to evidence compliance with section 602(c), Treasury’s regulations implementing that section, and guidance issued by Treasury regarding the foregoing. b. The Treasury Office of Inspector General and the Government Accountability Office, or their authorized representatives, shall have the right of access to records (electronic and otherwise) of Subrecipient in order to conduct audits or other investigations. c. Records shall be maintained by Subrecipient for a period of five (5) years after all funds have been expended or returned to Treasury, whichever is later. Pre-award Costs. Pre-award costs, as defined in 2 C.F.R. § 200.458, may not be paid with funding from this award. Administrative Costs. Subrecipient may use funds provided under this award to cover both direct and indirect costs. Subrecipient shall follow guidance on administrative costs issued by the Governor’s Office and Office of the State Controller. Cost Sharing. Cost sharing or matching funds are not required to be provided by Subrecipient. Conflicts of Interest. The State of Colorado understands and agrees it must maintain a conflict of interest policy consistent with 2 C.F.R. § 200.318(c) and that such conflict of interest policy Exhibit O - Page 3 of 9 is applicable to each activity funded under this award. Subrecipient and Contractors must disclose in writing to the Office of the State Controller or the pass-through entity, as appropriate, any potential conflict of interest affecting the awarded funds in accordance with 2 C.F.R. § 200.112. The Office of the State Controller shall disclose such conflict to Treasury. Compliance with Applicable Law and Regulations. a. Subrecipient agrees to comply with the requirements of section 602 of the Act, regulations adopted by Treasury pursuant to section 602(f) of the Act, and guidance issued by Treasury regarding the foregoing. Subrecipient also agrees to comply with all other applicable federal statutes, regulations, and executive orders, and Subrecipient shall provide for such compliance by other parties in any agreements it enters into with other parties relating to this award. b. Federal regulations applicable to this award include, without limitation, the following: i. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. Part 200, other than such provisions as Treasury may determine are inapplicable to this Award and subject to such exceptions as may be otherwise provided by Treasury. Subpart F – Audit Requirements of the Uniform Guidance, implementing the Single Audit Act, shall apply to this award. ii. Universal Identifier and System for Award Management (SAM), 2 C.F.R. Part 25, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 25 is hereby incorporated by reference. iii. Reporting Subaward and Executive Compensation Information, 2 C.F.R. Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 170 is hereby incorporated by reference. iv. OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (Agreements and Subcontractors described in 2 C.F.R. Part 180, subpart B) that the award is subject to 2 C.F.R. Part 180 and Treasury’s implementing regulation at 31 C.F.R. Part 19. i. Subrecipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 C.F.R. Part 200, Appendix XII to Part 200 is hereby incorporated by reference. ii. Government wide Requirements for Drug-Free Workplace, 31 C.F.R. Part 20. iii. New Restrictions on Lobbying, 31 C.F.R. Part 21. iv. Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601-4655) and implementing regulations. Exhibit O - Page 4 of 9 v. Generally applicable federal environmental laws and regulations. c. Statutes and regulations prohibiting discrimination applicable to this award include, without limitation, the following: i. Title VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) and Treasury’s implementing regulations at 31 C.F.R. Part 22, which prohibit discrimination on the basis of race, color, or national origin under programs or activities receiving federal financial assistance; ii. The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§ 3601 et seq.), which prohibits discrimination in housing on the basis of race, color, religion, national origin, sex, familial status, or disability; iii. Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794), which prohibits discrimination on the basis of disability under any program or activity receiving federal financial assistance; iv. The Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101 et seq.), and Treasury’s implementing regulations at 31 C.F.R. Part 23, which prohibit discrimination on the basis of age in programs or activities receiving federal financial assistance; and v. Title II of the Americans with Disabilities Act of 1990, as amended (42 U.S.C. §§ 12101 et seq.), which prohibits discrimination on the basis of disability under programs, activities, and services provided or made available by state and local governments or instrumentalities or agencies thereto. Remedial Actions. In the event of Subrecipient’s noncompliance with section 602 of the Act, other applicable laws, Treasury’s implementing regulations, guidance, or any reporting or other program requirements, Treasury may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.R. § 200.339. In the case of a violation of section 602(c) of the Act regarding the use of funds, previous payments shall be subject to recoupment as provided in section 602(e) of the Act and any additional payments may be subject to withholding as provided in sections 602(b)(6)(A)(ii)(III) of the Act, as applicable. Hatch Act. Subrecipient agrees to comply, as applicable, with requirements of the Hatch Act (5 U.S.C.§§ 1501-1508 and 7324-7328), which limit certain political activities of State or local government employees whose principal employment is in connection with an activity financed in whole or in part by this federal assistance. False Statements. Subrecipient understands that making false statements or claims in connection with this award is a violation of federal law and may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in federal awards or Agreements, and/or any other remedy available by law. Exhibit O - Page 5 of 9 Publications. Any publications produced with funds from this award must display the following language: “This project [is being] [was] supported, in whole or in part, by federal award number SLFRF0126 awarded to the State of Colorado by the U.S. Department of the Treasury.” Debts Owed the Federal Government. a. Any funds paid to the Subrecipient (1) in excess of the amount to which the Subrecipient is finally determined to be authorized to retain under the terms of this award; (2) that are determined by the Treasury Office of Inspector General to have been misused; or (3) that are determined by Treasury to be subject to a repayment obligation pursuant to sections 602(e) and 603(b)(2)(D) of the Act and have not been repaid by the Subrecipient shall constitute a debt to the federal government. b. Any debts determined to be owed to the federal government must be paid promptly by Subrecipient. A debt is delinquent if it has not been paid by the date specified in Treasury’s initial written demand for payment, unless other satisfactory arrangements have been made or if the Subrecipient knowingly or improperly retains funds that are a debt as defined in paragraph 14(a). Treasury will take any actions available to it to collect such a debt. Disclaimer. a. The United States expressly disclaims any and all responsibility or liability to Subrecipient or third persons for the actions of Subrecipient or third persons resulting in death, bodily injury, property damages, or any other losses resulting in any way from the performance of this award or any other losses resulting in any way from the performance of this award or any Agreement, or Subcontractor under this award. b. The acceptance of this award by Subrecipient does not in any way establish an agency relationship between the United States and Subrecipient. Protections for Whistleblowers. a. In accordance with 41 U.S.C. § 4712, Subrecipient may not discharge, demote, or otherwise discriminate against an employee in reprisal for disclosing to any of the list of persons or entities provided below, information that the employee reasonably believes is evidence of gross mismanagement of a federal Agreement or grant, a gross waste of federal funds, an abuse of authority relating to a federal Agreement or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a federal Agreement (including the competition for or negotiation of an Agreement) or grant. b. The list of persons and entities referenced in the paragraph above includes the following: i. A member of Congress or a representative of a committee of Congress; ii. An Inspector General; Exhibit O - Page 6 of 9 iii. The Government Accountability Office; iv. A Treasury employee responsible for Agreement or grant oversight or management; v. An authorized official of the Department of Justice or other law enforcement agency; vi. A court or grand jury; or vii. A management official or other employee of Subrecipient, Contractor, or Subcontractor who has the responsibility to investigate, discover, or address misconduct. c. Subrecipient shall inform its employees in writing of the rights and remedies provided under this section, in the predominant native language of the workforce. Increasing Seat Belt Use in the United States. Pursuant to Executive Order 13043, 62 FR 19217 (Apr. 18, 1997), Subrecipient should encourage its Contractors to adopt and enforce on-the-job seat belt policies and programs for their employees when operating company- owned, rented or personally owned vehicles. 1. Reducing Text Messaging While Driving. Pursuant to Executive Order 13513, 74 FR 51225 (Oct. 6, 2009), Subrecipient should encourage its employees, Subrecipients, and Contractors to adopt and enforce policies that ban text messaging while driving, and Subrecipient should establish workplace safety policies to decrease accidents caused by distracted drivers. Exhibit O - Page 7 of 9 ASSURANCES OF COMPLIANCE WITH CIVIL RIGHTS REQUIREMENTS ASSURANCES OF COMPLIANCE WITH TITLE VI OF THE CIVIL RIGHTS ACT OF 1964 As a condition of receipt of federal financial assistance from the Department of the Treasury, the Subrecipient provides the assurances stated herein. The federal financial assistance may include federal grants, loans and Agreements to provide assistance to the Subrecipient’s beneficiaries, the use or rent of Federal land or property at below market value, Federal training, a loan of Federal personnel, subsidies, and other arrangements with the intention of providing assistance. Federal financial assistance does not encompass Agreements of guarantee or insurance, regulated programs, licenses, procurement Agreements by the Federal government at market value, or programs that provide direct benefits. The assurances apply to all federal financial assistance from or funds made available through the Department of the Treasury, including any assistance that the Subrecipient may request in the future. The Civil Rights Restoration Act of 1987 provides that the provisions of the assurances apply to all of the operations of the Subrecipient’s program(s) and activity(ies), so long as any portion of the Subrecipient’s program(s) or activity(ies) is federally assisted in the manner prescribed above. 1. Subrecipient ensures its current and future compliance with Title VI of the Civil Rights Act of 1964, as amended, which prohibits exclusion from participation, denial of the benefits of, or subjection to discrimination under programs and activities receiving federal financial assistance, of any person in the United States on the ground of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury Title VI regulations at 31 CFR Part 22 and other pertinent executive orders such as Executive Order 13166, directives, circulars, policies, memoranda, and/or guidance documents. 2. Subrecipient acknowledges that Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency,” seeks to improve access to federally assisted programs and activities for individuals who, because of national origin, have Limited English proficiency (LEP). Subrecipient understands that denying a person access to its programs, services, and activities because of LEP is a form of national origin discrimination prohibited under Title VI of the Civil Rights Act of 1964 and the Department of the Treasury’s implementing regulations. Accordingly, Subrecipient shall initiate reasonable steps, or comply with the Department of the Treasury’s directives, to ensure that LEP persons have meaningful access to its programs, services, and activities. Subrecipient understands and agrees that meaningful access may entail providing language assistance services, including oral interpretation and written translation where necessary, to ensure effective communication in the Subrecipient’s programs, services, and activities. 3. Subrecipient agrees to consider the need for language services for LEP persons when Subrecipient develops applicable budgets and conducts programs, services, and activities. As a resource, the Department of the Treasury has published its LEP guidance at 70 FR 6067. For more information on taking reasonable steps to provide meaningful access for LEP persons, please visit http://www.lep.gov. Exhibit O - Page 8 of 9 4. Subrecipient acknowledges and agrees that compliance with the assurances constitutes a condition of continued receipt of federal financial assistance and is binding upon Subrecipient and Subrecipient’s successors, transferees, and assignees for the period in which such assistance is provided. 5. Subrecipient acknowledges and agrees that it must require any sub-grantees, contractors, subcontractors, successors, transferees, and assignees to comply with assurances 1-4 above, and agrees to incorporate the following language in every Agreement or agreement subject to Title VI and its regulations between the Subrecipient and the Subrecipient’s sub-grantees, Contractors, Subcontractors, successors, transferees, and assignees: The sub-grantee, Contractor, Subcontractor, successor, transferee, and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits Subrecipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this Agreement (or agreement). Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this Agreement or agreement. 6. Subrecipient understands and agrees that if any real property or structure is provided or improved with the aid of federal financial assistance by the Department of the Treasury, this assurance obligates the Subrecipient, or in the case of a subsequent transfer, the transferee, for the period during which the real property or structure is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. If any personal property is provided, this assurance obligates the Subrecipient for the period during which it retains ownership or possession of the property. 7. Subrecipient shall cooperate in any enforcement or compliance review activities by the Department of the Treasury of the aforementioned obligations. Enforcement may include investigation, arbitration, mediation, litigation, and monitoring of any settlement agreements that may result from these actions. The Subrecipient shall comply with information requests, on-site compliance reviews and reporting requirements. 8. Subrecipient shall maintain a complaint log and inform the Department of the Treasury of any complaints of discrimination on the grounds of race, color, or national origin, and limited English proficiency covered by Title VI of the Civil Rights Act of 1964 and implementing regulations and provide, upon request, a list of all such reviews or proceedings based on the complaint, pending or completed, including outcome. Subrecipient also must inform the Department of the Treasury if Subrecipient has received no complaints under Title VI. 9. Subrecipient must provide documentation of an administrative agency’s or court’s findings of non-compliance of Title VI and efforts to address the non-compliance, including any voluntary compliance or other agreements between the Subrecipient and the administrative agency that made the finding. If the Subrecipient settles a case or matter alleging such discrimination, the Subrecipient must provide documentation of the settlement. If Subrecipient has not been the subject of any court or administrative agency finding of Exhibit O - Page 9 of 9 discrimination, please so state. 10. If the Subrecipient makes sub-awards to other agencies or other entities, the Subrecipient is responsible for ensuring that sub-Subrecipients also comply with Title VI and other applicable authorities covered in this document State agencies that make sub-awards must have in place standard grant assurances and review procedures to demonstrate that that they are effectively monitoring the civil rights compliance of sub- Subrecipients. The United States of America has the right to seek judicial enforcement of the terms of this assurances document and nothing in this document alters or limits the federal enforcement measures that the United States may take in order to address violations of this document or applicable federal law. EXHIBIT P SLFRF SUBRECIPIENT QUARTERLY REPORT 1. SLFRF SUBRECIPIENT QUARTERLY REPORT WORKBOOK 1.1 The SLFRF Subrecipient Quarterly Report Workbook must be submitted to the State Agency within ten (10) days following each quarter ended September, December, March and June. The SLFRF Subrecipient Quarterly Report Workbook can be found at: https://osc.colorado.gov/american-rescue-plan-act (see SLFRF Grant Agreement Templates tab) Exhibit P - Page 1 of 1 EXHIBIT Q SAMPLE SLFRF REPORTING MODIFICATION FORM Local Agency: Agreement No: Project Title: Project No: Project Duration: To: From: State Agency: CDOT This form serves as notification that there has been a change to the reporting requirements set forth in the original SLFRF Grant Agreement. The following reporting requirements have been (add/ remove additional rows as necessary): Updated Reporting Requirement (Add/Delete/Modify) Project Number Reporting Requirement By signing this form, the Local Agency agrees to and acknowledges the changes to the reporting requirements set forth in the original SLFRF Grant Agreement. All other terms and conditions of the original SLFRF Grant Agreement, with any approved modifications, remain in full force and effect. Grantee shall submit this form to the State Agency within 10 business days of the date sent by that Agency. Local Agency Date CDOT Program Manager Date Exhibit Q - Page 1 of 1 EXHIBIT R APPLICABLE FEDERAL AWARDS FEDERAL AWARD(S) APPLICABLE TO THIS GRANT AWARD Federal Awarding Office US Department of the Treasury Grant Program Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number 21.027 Federal Award Number SLFRP0126 Federal Award Date * May 18, 2021 Federal Award End Date December 31, 2024 Federal Statutory Authority Title VI of the Social Security Act, Section 602 Total Amount of Federal Award (this is not the amount of this grant agreement) $3,828,761,790 * Funds may not be available through the Federal Award End Date subject to the provisions in §2 and §5 below. Exhibit R - Page 1 of 1 Exhibit S- Page 1 of 1 EXHIBIT S PII Certification STATE OF COLORADO LOCAL AGENCY CERTIFICATION FOR ACCESS TO PII THROUGH A DATABASE OR AUTOMATED NETWORK Pursuant to § 24-74-105, C.R.S., I, _________________, on behalf of __________________________ (legal name of Local Agency) (the “Local Agency”), hereby certify under the penalty of perjury that the Local Agency has not and will not use or disclose any Personal Identifying Information, as defined by § 24-74-102(1), C.R.S., for the purpose of investigating for, participating in, cooperating with, or assisting Federal Immigration Enforcement, including the enforcement of civil immigration laws, and the Illegal Immigration and Immigrant Responsibility Act, which is codified at 8 U.S.C. §§ 1325 and 1326, unless required to do so to comply with Federal or State law, or to comply with a court-issued subpoena, warrant or order. I hereby represent and certify that I have full legal authority to execute this certification on behalf of the Local Agency. Signature: __________________________ Printed Name: __________________________ Title: __________________________ Date: ___________ EXHIBIT T CHECKLIST OF REQUIRED EXHIBITS DEPENDENT ON FUNDING SOURCE Exhibit T - Page 1 of 2 Checklist for required exhibits due to funding sources. Required Exhibits are dependent on the source of funding. This is a guide to assist in the incorporation and completion of Exhibits in relation to funding sources. Exhibit Funding only from FHWA Funding only from ARPA FHWA and ARPA Funding EXHIBIT A, SCOPE OF WORK EXHIBIT B, SAMPLE OPTION LETTER EXHIBIT C, FUNDING PROVISIONS EXHIBIT D, LOCAL AGENCY RESOLUTION (IF APPLICABLE) EXHIBIT E, LOCAL AGENCY AGREEMENT ADMINISTRATION CHECKLIST EXHIBIT F, CERTIFICATION FOR FEDERAL-AID AGREEMENTS EXHIBIT G, DISADVANTAGED BUSINESS ENTERPRISE EXHIBIT H, LOCAL AGENCY PROCEDURES FOR CONSULTANT SERVICES EXHIBIT I, FEDERAL-AID AGREEMENT PROVISIONS FOR CONSTRUCTION AGREEMENTS EXHIBIT J, ADDITIONAL FEDERAL REQUIREMENTS EXHIBIT K, FFATA SUPPLEMENTAL FEDERAL PROVISIONS EXHIBIT L, SAMPLE SUBRECIPIENT MONITORING AND RISK ASSESSMENT FORM EXHIBIT M, OMB UNIFORM GUIDANCE FOR FEDERAL AWARDS Exhibit T - Page 2 of 2 EXHIBIT N, FEDERAL TREASURY PROVISIONS EXHIBIT O, AGREEMENT WITH SUBRECIPIENT OF FEDERAL RECOVERY FUNDS EXHIBIT P, SLFRF SUBRECIPIENT QUARTERLY REPORT EXHIBIT Q, SLFRF REPORTING MODIFICATION FORM EXHIBIT R, APPLICABLE FEDERAL AWARDS EXHIBIT S, PII CERTIFICATAION EXHIBIT T, CHECKLIST OF REQUIRED EXHIBITS DEPENDENT ON FUNDING SOURCE INTERNAL SERVICES Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Derek Pastor, PMP, Project Manager Paul Fetherston, Internal Services Director Date: August 13, 2024 RE: Resolution 70-24 Contract with White Stone Construction, Inc for the Tregent Park Public Restrooms Remodel Project (291 W Elkhorn Avenue) (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER______________ QUASI-JUDICIAL YES NO Objective: The Public Works Department seeks approval from the Town Board for the construction contract with White Stone Construction, Inc for the remodeling of the Tregent Park public restrooms located at 291 W Elkhorn Avenue. Present Situation: The Tregent Park public restrooms are unsatisfactory based on a number of current conditions including: •Fixtures such as toilets, sinks, and urinals are outdated, inefficient, and prone to frequent malfunctions. •Worn out surfaces and fixtures that are prone to dirt accumulation are difficult to keep clean. •By Americans with Disabilities Act (ADA) standards, the stall spaces are too small to accommodate a wheelchair and the layout does not provide sufficient turning space; and the sinks and soap dispensers are mounted too high making them unreachable for individuals in wheelchairs. After four (4) weeks of advertising, two (2) bids were received and opened on July 18, 2024 (there were 5 attendees at the pre-bid meeting). The following table contains the project budget and bid summary: Approved Budget Amount: $304,517 COMPANY CITY PROJECT DURATION TOTAL PROPOSAL Poudre Construction & Design Loveland, CO 90 days $197,810 Whitestone Construction Boulder, CO 40 days $216,645 Internal Services staff have confirmed the contractor’s capabilities and experience performing projects of similar cost and complexity in Colorado. Proposal: Public Works staff propose approval of the construction agreement with White Stone Construction, Inc for the Tregent Park Public Restrooms Remodel Project. The contractor’s proposal is below the approved Capital Improvement budget. Although this vendor is not the lowest bid, staff recommends selecting White Stone Construction Inc. based on the construction duration compared to the other vendor. This project will require the restrooms to be closed for the entirety of this project. Tregent Park public restrooms are one of the few open year-round and having the facility closed for any length of time will cause a disruption and inconvenience to visitors. This project, tentatively scheduled to begin the week of October 7, will have the highest possibility of being completed prior to Thanksgiving and the Catch the Glow festivities by proceeding with White Stone Construction. There is also a contingency of liquidated damages written into the construction contract for work extending beyond the agreed timeline. The other bidder’s construction timeline would require the facility’s closure for a longer period through the holidays. The financial impact of awarding this project to White Stone Construction is less than 10% ($18,835) compared to the other vendor, and still below the approved budget. This project will be managed by the Public Work Project Manager with daily status updates and weekly (minimum) inspections for the duration of the project. Advantages: •ADA Compliance: Making the restrooms ADA-compliant ensures that individuals with disabilities can use the facilities comfortably and safely. •Modern Fixtures: Installing new, easy-to-clean fixtures reduces the risk of hygiene-related issues and are easier to maintain. •Structural Repairs: Addressing structural damage and leaks eliminates safety hazards and prevents further deterioration. •Aesthetic Improvements: A clean, modern, and visually appealing restroom enhances the overall park experience for visitors. •Durability: Using high-quality, durable materials and fixtures reduces the need for frequent repairs and replacements, saving money over time. •Energy and Water Efficiency: Installing efficient lighting, plumbing, and hand dryers lowers utility costs and promotes environmental sustainability. Disadvantages: •Expense: Remodeling can be costly, involving significant upfront investment in materials, labor, and possible design fees. However, not being ADA-compliant could lend itself to other unwanted consequences. •Closure During Renovation: The restroom will need to be closed during the remodeling process, causing inconvenience to park visitors who rely on these facilities. However, the work is intended to be scheduled during non-peak seasons when the restrooms will be less utilized. In addition, contractors will provide portable toilets for the duration of this project. Action Recommended: Internal Services staff recommend the Town Board approve the attached construction contract with White Stone Construction in the amount of $216,645.00, and authorize the Internal Services staff to spend up to the budgeted amount of $304,517 if needed to pay for unanticipated conditions encountered during construction. Upon approval, the contractor can order the materials and equipment to have this project completed by November 2024. Finance/Resource Impact: The Town previously budgeted $304,517 for this project. Project Code: TREGRR; Account Number: 204-5400-544-32-22. The contract amount for this project is $216,645.00 Level of Public Interest The level of public interest for this project is considered to be high due to the visitors, guest, business traffic to that area. Sample Motion: I move for the approval/ denial of Resolution 70-24. Attachments: 1. Resolution 70-24 2.Tregent Restrooms Remodel Construction Contract RESOLUTION 70-24 APPROVING A CONSTRUCTION CONTRACT WITH WHITESTONE CONSTRUCTION, INC. FOR THE REMODEL OF THE TREGENT PARK PUBLIC RESTROOMS WHEREAS, the Town Board wishes to enter into a construction contract referenced in the title of this resolution for the remodeling of the restrooms at Tregent Park. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: The Board approves, and authorizes the Mayor to sign, the construction contract referenced in the title of this resolution in substantially the form now before the Board, and further authorizes the Public Works Director or designee to pay Whitestone Construction Inc. up to a total of $304,517.00 if needed to address unanticipated conditions encountered during construction. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney ATTACHMENT 1 Agreement for Construction Contract-Tregent Park Restroom Remodel-Page 1 of 5 CONSTRUCTION CONTRACT Tregent Park Restrooms Remodel THIS CONTRACT is made at the Town of Estes Park, Colorado, by and between the Town of Estes Park, Colorado (Town), a municipal corporation, and Whitestone Construction, Inc, a Colorado corporation, whose address is 1930 Central Ave, Unit C Boulder, CO 80301. In consideration of these mutual covenants and conditions, the Town and Contractor agree as follows: SCOPE OF WORK. The Contractor shall execute the entire Work described in the Contract Documents. CONTRACT DOCUMENTS. The Contract incorporates the following Contract Documents. In resolving inconsistencies among two or more of the Contract Documents, precedence will be given in the same order as enumerated. LIST OF CONTRACT DOCUMENTS. The Contract Documents, except for Modifications and Change Orders issued after execution of this Agreement, are: 1. Change Orders; 2. Construction Contract; 3. The following addenda, if any: i.Number Date Page(s) 1 July 2, 2024 5 4. Special Conditions updated August 5, 2024 5. General Conditions; 6. The following Drawings & Technical Specifications: i.Document Title Date Page(s) Tregent Restroom CD Set June 27, 2023 7 7.Notice to Proceed; 8.Notice of Award; 9.Invitation to Bid 10. Bid Bond; 11. Bid Proposal; 12. Instructions to Bidders; 13. Performance Bond and Payment Bond; 14.Insurance Certificates; 15. Construction Progress Schedule; ATTACHMENT 2 Agreement for Construction Contract-Tregent Park Restroom Remodel-Page 2 of 5 16. Tregent RR Equipment List; 17.Examples of Desired Outcome; and 18. Any other documents listed as Contract Documents in the General Conditions CONTRACT PRICE. The Town shall pay the Contractor for performing the Work and the completion of the Project according to the Contract, subject to change orders as approved in writing by the Town, under the guidelines in the General Conditions. The Town will pay the base sum of two hundred sixteen thousand six hundred forty five dollars ($216,645), to the Contractor, subject to full and satisfactory performance of the terms and conditions of the Contract. The Town has appropriated sufficient money for this work. COMPLETION OF WORK. The Contractor must begin work covered by the Contract between October 7 and 11, 2024, and must achieve Substantial Completion within 45 calendar days from and including the start date, according to the General Conditions. LIQUIDATED DAMAGES. If the Contractor fails to substantially complete the Work within the time period described above, or within such other construction time if modified by a change order, the Town may permit the Contractor to proceed, and in such case, may deduct the sum of $500.00 for each calendar day that the Work shall remain uncompleted from monies due or that may become due the Contractor. This sum is not a penalty but is the cost of field and office engineering, inspecting, interest on financing and liquidated damages. The parties agree that, under all of the circumstances, the daily basis and the amount set for liquidated damages is a reasonable and equitable estimate of all the Town's actual damages for delay. The Town expends additional personnel effort in administrating the Contract or portions of it that are not completed on time, and such efforts and the costs thereof are impossible to accurately compute. In addition, some, if not all, citizens of Estes Park incur personal inconvenience and lose confidence in their government as a result of public projects or parts of them not being completed on time, and the impact and damages, certainly serious in monetary as well as other terms are impossible to measure. SERVICE OF NOTICES. Notices to the Town are given if sent by registered or certified mail, postage prepaid, to the following address: TOWN OF ESTES PARK Public Works Department 170 MacGregor Ave Estes Park, CO 80517 INSURANCE PROVISIONS. The Contractor must not begin any work until the Contractor obtains, at the Contractor's own expense, all required insurance as specified in the General Conditions. Such insurance must have the approval of the Town of Estes Park as to limits, form and amount. RESPONSIBILITY FOR DAMAGE CLAIMS. The Contractor shall indemnify, save harmless, and defend the Town, its officers and employees, from and in all suits, actions or Agreement for Construction Contract-Tregent Park Restroom Remodel-Page 3 of 5 claims of any character brought because of: any injuries or damage received or sustained by any person, persons or property because of operations for the Town under the Contract; the Contractor's failure to comply with the provisions of the Contract; the Contractor's neglect of materials while constructing the Work; because of any act or omission, neglect or misconduct of the Contractor; because of any claims or amounts recovered from any infringements of patent, trademark, or copyright, unless the design, device, materials or process involved are specifically required by Contract; from any claims or amount arising or recovered under the "Workers' Compensation Act," by reason of the Contractor's failure to comply with the act; pollution or environmental liability; or any failure of the Contractor to comply with any other law, ordinance, order or decree. The Town may retain so much of the money due the Contractor under the Contract, as the Town considers necessary for such purpose, for the Town's use. If no money is due, the Contractor's Surety may be held until such suits, actions, claims for injuries or damages have been settled. Money due the Contractor will not be withheld when the Contractor produces satisfactory evidence that the Contractor and the Town are adequately protected by public liability and property damage insurance. The Contractor also agrees to pay the Town all expenses incurred to enforce this "Responsibility for Damage Claim" agreement and if the Contractor's insurer fails to provide or pay for the defense of the Town of Estes Park, its officers and employees, as additional insureds, the Contractor agrees to pay for the cost of that defense. Nothing in the INSURANCE PROVISIONS of the General Conditions shall limit the Contractor's responsibility for payment of claims, liabilities, damages, fines, penalties, and costs resulting from its performance or nonperformance under the Contract. STATUS OF CONTRACTOR. The Contractor is performing all work under the Contract as an independent contractor and not as an agent or employee of the Town. No employee or official of the Town will supervise the Contractor nor will the Contractor exercise supervision over any employee or official of the Town. The Contractor shall not represent that it is an employee or agent of the Town in any capacity. The Contractor and its employees are not entitled to Workers' Compensation benefits from the Town and are obligated to pay federal and state income tax on money earned pursuant to the Contract. This is not an exclusive contract. THIRD-PARTY BENEFICIARIES. None of the terms or conditions in the Contract shall give or allow any claim, benefit, or right of action by any third person not a party to the Contract. Any person except the Town or the Contractor receiving services or benefits under the Contract shall be only an incidental beneficiary. INTEGRATION. The Contract is an integration of the entire understanding of the parties with respect to the matters set forth in it, and supersedes prior negotiations, written or oral representations and agreements. DEFINITIONS. The Definitions in the General Conditions apply to the entire Contract unless modified within a Contract Document. EXECUTED this _____ day of _____________, 2024 Agreement for Construction Contract-Tregent Park Restroom Remodel-Page 4 of 5 (Signature pages to follow.) Agreement for Construction Contract-Tregent Park Restroom Remodel-Page 5 of 5 TOWN OF ESTES PARK By: August 13, 2024 Date Title: Mayor State of ) ) ss County of ) The foregoing instrument was acknowledged before me by , as of the Town of Estes Park, a Colorado municipal corporation, on behalf of the corporation, this day of , 2024. Witness my hand and official Seal. My Commission expires . Notary Public APPROVED AS TO FORM: Town Attorney Agreement for Construction Contract-Tregent Park Restroom Remodel-Page 6 of 5 CONTRACTOR By: Date Title: _______________________________ State of ) ) ss: County of ) The foregoing instrument was acknowledged before me by , (Name of party signing) as of (Title of party signing) (Name of corporation) a corporation, on behalf of the corporation, this (State of incorporation) day of , 2024. Witness my hand and official Seal. My Commission expires . Notary Public TOWN CLERK’S OFFICE Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Jackie Williamson, Town Clerk Date: August 13, 2024 RE: Interview Committee for the Estes Park Planning Commission (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER Committee QUASI-JUDICIAL YES NO Objective: To appoint Town Board members to the interview committee for a vacancy on the Estes Park Planning Commission. Present Situation: The Estes Park Planning Commission consists of five-members and the Commission currently has one vacancy. The Town Clerk’s Office has advertised the openings and has received one application as of the date of this memo. Proposal: Policy 101 Section 6 states all applicants for Town Committees/Boards are to be interviewed by the Town Board, or its designee. Any designee will be appointed by the Town Board. Therefore, two members of the Board would interview all interested applicants for the commission positions. Advantages: To move the process forward and allow interviews to be conducted of interested applicants. Disadvantages: None. Action Recommended: To appoint two Town Board members to the interview committee. Finance/Resource Impact: None. Level of Public Interest Low. Sample Motion: I move to approve/deny the appointment of Trustees __________ and ___________ to the Estes Park Planning Commission interview committee. Attachments: None. ADMINISTRATION Memo To: Honorable Mayor Hall Board of Trustees Through: Town Administrator Machalek From: Carlie Bangs, Housing & Childcare Manager Date: August 13, 2024 RE: Resolution 71-24 Contract to Purchase 1250 Woodstock Drive (Mark all that apply) PUBLIC HEARING ORDINANCE LAND USE CONTRACT/AGREEMENT RESOLUTION OTHER: QUASI-JUDICIAL YES NO Objective: Consider a contract to purchase the property at 1250 Woodstock Drive for its continued use as a childcare facility. Present Situation: The recently completed Childcare Needs Assessment and Strategic Plan includes a Priority Goal to “Increase and maintain facility capacity for childcare.” Currently, there are only three center-based providers that serve the Estes Valley, one of which is the Pre-K program administered by the School District. On Wednesday, August 7, we learned that the building that houses one of the center- based providers, located at 1250 Woodstock Drive, had received an offer to purchase from an investment firm for $675,000, which the sellers were obligated to respond to by the following Friday. Staff has long been aware that the property owners were interested in selling the property, and expressed interest in being informed should the property go on the market. In fact, staff ordered a commercial appraisal on the property, which was completed in June 2024, because we were informed that the owners might be putting the property on the market and we wanted to be poised to make an offer (or competing offer). Nevertheless, we were surprised by how quickly things unfolded, especially because the property was not even listed for sale. Commercial property is increasingly difficult to come by to fulfill the need for childcare center facilities. In addition to the availability of property, the expense of renovating to meet licensing, redevelopment, and regulatory requirements poses a huge barrier to childcare providers opening new centers. The loss of one center, especially a center at this location, would be detrimental to families in the Estes Valley. By purchasing this property, the Town can ensure that the property, and in turn the existing provider, will continue to be able to operate in our community as a childcare facility. If the sale of the property goes to the open market, we believe the likelihood of it being retained as a childcare facility is low and we are not aware of another location that the existing provider could move into, at least not at a significant cost. The facility located at 1250 Woodstock Dr. is 1,870 square feet, providing space to serve 40 children under the existing licensed provider. The existing licensed provider, Christy DeLorme, has run Mountaintop Childcare out of the facility since 2018. She serves children 2 ½-6 years old. Mountaintop is currently full and is expanding to offer programming for school-age children for the summer of 2024. The existing lease with Mountaintop ends October 31, 2026. However, if purchased by another entity, we do not know if they would honor or attempt to buy out the lease. Proposal: Staff proposes that the Town purchase the property at 1250 Woodstock Drive to retain the use of the space as a childcare facility. Per Policy 226: “Acquisition, Retention, and Disposal of Real Property,” staff received authorization from the Town Administrator on May 28, 2024 to begin the due diligence process required to acquire property. The Town then obtained an appraisal of the Property on June 26, 2024, which yielded an appraised value of $600,000. Upon learning about the August 6 offer to purchase, staff asked if the seller would be willing to allow the Town to make a matching offer. They obliged and the Town issued a Letter of Intent (LOI) to purchase the Property for $675,000 on August 8, 2024, and began working on a contract to purchase for the Town Board’s consideration (an LOI notwithstanding, property acquisition requires approval of the Town Board). The contract, attached, establishes a purchase price of $675,000, with $25,000 in earnest money. If the Town Board approves the contract, the Town will enter into a formal due diligence period as outlined therein, which will include a property inspection and environmental report. The Town has the right to terminate the Contract in its sole discretion if it determines that the property is not appropriate for the Town’s purposes or the physical condition of the property is unacceptable. Advantages: • Retain an existing childcare facility serving 40 children. Disadvantages: • Inherent risks involved in real estate transactions. • Potential opportunity cost to purchase a different property to be used for childcare. Action Recommended: Staff recommends the Town Board approve execution of the contract to purchase the property located at 1250 Woodstock Drive. Finance/Resource Impact: $25,000 in earnest money from the Childcare Assistance Fund, 270-1948-419.29-75 At closing, $300,000 for the purchase from the Childcare Assistance Fund, 270-1948- 419.29-75 and $425,000 for the purchase from the General Fund, which would be repaid by the Childcare Fund in 2025. Level of Public Interest High Sample Motion: I move for the approval/denial of Resolution 71-24. Attachments: 1.Resolution 71-24 2.Real Estate Purchase Agreement 3.Appraisal Report for 1250 Woodstock Drive RESOLUTION 71-24 A RESOLUTION APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE WITH WE BE TCB LLC FOR THE PURCHASE OF 1250 WOODSTOCK DRIVE WHEREAS, the Town desires to purchase the property at 1250 Woodstock Drive, used as a childcare facility and currently occupied by Mountaintop Childcare, Inc., with the intent to continue its childcare use. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF ESTES PARK, COLORADO: Section 1. The Board approves, and authorizes the Mayor to sign, the contract referenced in the title of this resolution in substantially the form now before the Board. The Board authorizes the Town Administrator or designee to accept and approve all further documents, ancillary agreements, and amendments to the contract as may be necessary to complete the purchase and sale. Town staff may exercise their spending authority for any ancillary expenses to facilitate this transaction in addition to the contract price. Section 2. The Board repeals all resolutions or parts of resolutions in conflict with this resolution, but only to the extent of such inconsistency. DATED this 13th day of AUGUST, 2024. TOWN OF ESTES PARK Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney ATTACHMENT 1 Initials CTMeContracts.com - ©2024 MRI Software LLC NORTHPEAK Commercial Advisors Kevin Calame & Matt Lewallen Ph: 720-738-1949 Fax: 720-738-1950 THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) ( Property with No Residences) ( Property with Residences-Residential Addendum Attached) Date: 8/13/2024 1.AGREEMENT. Buyer agrees to buy and Seller agrees to sell the Property described below on the terms and conditions set forth in this contract (Contract). 2.PARTIES AND PROPERTY. 2.1. Buyer. Town of Estes Park, Colorado, a municipal corporation (Buyer or Town) will take title to the Property described below as Joint Tenants Tenants In Common Other TBD. 2.2. No Assignability. This Contract IS NOT assignable by Buyer unless otherwise specified in Additional Provisions. 2.3. Seller. WE BE TCB LLC (Seller) is the current owner of the Property described below. 2.4. Property. The Property is the following legally described real estate in the County of Larimer, Colorado (insert legal description): LOT 14, DEVILLE, ESTES PK known as: 1250 Woodstock Drive, Estes Park, CO 80517 together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto and all interest of Seller in vacated streets and alleys adjacent thereto, except as herein excluded (Property). 2.5. Inclusions. The Purchase Price includes the following items (Inclusions): 2.5.1. Inclusions – Attached. If attached to the Property on the date of this Contract, the following items are included unless excluded under Exclusions: lighting, heating, plumbing, ventilating and air conditioning units, TV antennas, inside telephone, network and coaxial (cable) wiring and connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and controls, built-in vacuum systems (including accessories) and garage door openers (including n/a remote controls). If checked, the following are owned by the Seller and included: Solar Panels Water Softeners Security Systems Satellite Systems (including satellite dishes). Leased items should be listed under § 2.5.7. (Leased Items). If any additional items are attached to the Property after the date of this Contract, such additional items are also included in the Purchase Price. 2.5.2. Inclusions – Not Attached. If on the Property, whether attached or not, on the date of this Contract, the following items are included unless excluded under Exclusions: storm windows, storm doors, window and porch shades, awnings, blinds, screens, window coverings and treatments, curtain rods, drapery CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 1 of 24 The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. (CBS3-6-23) (Mandatory 1-24) AGREEMENT ATTACHMENT 2 Initials CTMeContracts.com - ©2024 MRI Software LLC rods, fireplace inserts, fireplace screens, fireplace grates, heating stoves, storage sheds, carbon monoxide alarms, smoke/fire detectors and all keys. 2.5.3. Other Inclusions. The following items, whether fixtures or personal property, are also included in the Purchase Price: none 2.5.4. Encumbered Inclusions. Any Inclusions owned by Seller (e.g., owned solar panels) must be conveyed at Closing by Seller free and clear of all taxes (except personal property and general real estate taxes for the year of Closing), liens and encumbrances, except: none 2.5.5. Personal Property Conveyance. Conveyance of all personal property will be by bill of sale or other applicable legal instrument. 2.5.6. Parking and Storage Facilities. The use or ownership of the following parking facilities: Any associated with legal description; and the use or ownership of the following storage facilities: Any applicable storage facilities associated with legal description Note to Buyer: If exact rights to the parking and storage facilities is a concern to Buyer, Buyer should investigate. 2.5.7. Leased Items. The following personal property is currently leased to Seller which will be transferred to Buyer at Closing (Leased Items): none none 2.5.8. Trade Fixtures. With respect to trade fixtures, Seller and Buyer agree as follows: The trade fixtures to be conveyed at Closing will be conveyed by Seller free and clear of all taxes (except personal property taxes for the year of Closing), liens and encumbrances, except none. Conveyance will be by bill of sale or other applicable legal instrument. 2.6. Exclusions. The following items are excluded (Exclusions): none 2.7. Water Rights/Well Rights. 2.7.1. Deeded Water Rights. The following legally described water rights: none Any deeded water rights will be conveyed by a good and sufficient none deed at Closing. 2.7.2. Other Rights Relating to Water. The following rights relating to water not included in §§ 2.7.1., 2.7.3. and 2.7.4., will be transferred to Buyer at Closing: none 2.7.3. Well Rights. Seller agrees to supply required information to Buyer about the well. Buyer understands that if the well to be transferred is a “Small Capacity Well” or a “Domestic Exempt Water Well” used for ordinary household purposes, Buyer must, prior to or at Closing, complete a Change in Ownership form for the well. If an existing well has not been registered with the Colorado Division of Water Resources in the Department of Natural Resources (Division), Buyer must complete a registration of existing well form for the well and pay the cost of registration. If no person will be providing a closing service in connection with the transaction, Buyer must file the form with the Division within sixty days after Closing. The Well Permit # is n/a. follows: none 2.7.4. Water Stock Certificates. The water stock certificates to be transferred at Closing are as 2.7.5. Conveyance. If Buyer is to receive any rights to water pursuant to § 2.7.2. (Other Rights Relating to Water), § 2.7.3. (Well Rights), or § 2.7.4. (Water Stock Certificates), Seller agrees to convey such rights to Buyer by executing the applicable legal instrument at Closing. 2.7.6. Water Rights Review. Buyer Does Does Not have a Right to Terminate if examination of the Water Rights is unsatisfactory to Buyer on or before the Water Rights Examination Deadline. CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 2 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC 3. DATES, DEADLINES AND APPLICABILITY. 3.1. Dates and Deadlines. Item No. Reference Event Date or Deadline 1 § 3 Time of Day Deadline 5:00 PM MT 2 § 4 Alternative Earnest Money Deadline 7 days after MEC Title 3 § 8 Record Title Deadline (and Tax Certificate) 10 days after MEC 4 § 8 Record Title Objection Deadline 21 days after MEC 5 § 8 Off-Record Title Deadline 10 days after MEC 6 § 8 Off-Record Title Objection Deadline 21 days after MEC 7 § 8 Title Resolution Deadline 23 days after MEC 8 § 8 Third Party Right to Purchase/Approve Deadline n/a Owners' Association 9 § 7 Association Documents Deadline n/a 10 § 7 Association Documents Termination Deadline n/a Seller's Disclosures 11 § 10 Seller’s Property Disclosure Deadline 10 days after MEC 12 § 10 Lead-Based Paint Disclosure Deadline (if Residential Addendum attached) n/a Loan and Credit 13 § 5 New Loan Application Deadline n/a 14 § 5 New Loan Terms Deadline n/a 15 § 5 New Loan Availability Deadline n/a 16 § 5 Buyer’s Credit Information Deadline n/a 17 § 5 Disapproval of Buyer’s Credit Information Deadline n/a 18 § 5 Existing Loan Deadline n/a 19 § 5 Existing Loan Termination Deadline n/a 20 § 5 Loan Transfer Approval Deadline n/a 21 § 4 Seller or Private Financing Deadline n/a Appraisal 22 § 6 Appraisal Deadline n/a 23 § 6 Appraisal Objection Deadline n/a 24 § 6 Appraisal Resolution Deadline n/a Survey 25 § 9 New ILC or New Survey Deadline 21 days after MEC 26 § 9 New ILC or New Survey Objection Deadline 21 days after MEC 27 § 9 New ILC or New Survey Resolution Deadline 23 days after MEC Inspection and Due diligence 28 § 2 Water Rights Examination Deadline n/a CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 3 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC 29 § 8 Mineral Rights Examination Deadline n/a 30 § 10 Inspection Termination Deadline 23 days after MEC 31 § 10 Inspection Objection Deadline 21 days after MEC 32 § 10 Inspection Resolution Deadline 23 days after MEC 33 § 10 Property Insurance Termination Deadline 23 days after MEC 34 § 10 Due Diligence Documents Delivery Deadline 10 days after MEC 35 § 10 Due Diligence Documents Objection Deadline 21 days after MEC 36 § 10 Due Diligence Documents Resolution Deadline 23 days after MEC 37 § 10 Environmental Inspection Termination Deadline 23 days after MEC 38 § 10 ADA Evaluation Termination Deadline 23 days after MEC 39 § 10 Conditional Sale Deadline n/a 40 § 10 Lead-Based Paint Termination Deadline (if Residential Addendum attached) n/a 41 § 11 Estoppel Statements Deadline n/a 42 § 11 Estoppel Statements Termination Deadline n/a Closing and Possession 43 § 12 Closing Date 60 days after MEC 44 § 17 Possession Date Delivery of Deed and Funding 45 § 17 Possession Time Delivery of Deed and Funding 46 § 27 Acceptance Deadline Date n/a 47 § 27 Acceptance Deadline Time 5:00 PM MT 48 49 3.2. Applicability of Terms. If any deadline blank in § 3.1. (Dates and Deadlines) is left blank or completed with “N/A”, or the word “Deleted,” such deadline is not applicable and the corresponding provision containing the deadline is deleted. Any box checked in this Contract means the corresponding provision applies. If no box is checked in a provision that contains a selection of “None”, such provision means that “None” applies. The abbreviation “MEC” (mutual execution of this Contract) means the date upon which both parties have signed this Contract. The abbreviation “N/A” as used in this Contract means not applicable. 3.3. Day; Computation of Period of Days; Deadlines. 3.3.1. Day. As used in this Contract, the term “day” means the entire day ending at 11:59 p.m., United States Mountain Time (Standard or Daylight Savings, as applicable). Except however, if a Time of Day Deadline is specified in § 3.1. (Dates and Deadlines), all Objection Deadlines, Resolution Deadlines, Examination Deadlines and Termination Deadlines will end on the specified deadline date at the time of day specified in the Time of Day Deadline, United States Mountain Time. If Time of Day Deadline is left blank or “N/A” the deadlines will expire at 11:59 p.m., United States Mountain Time. 3.3.2. Computation of Period of Days. In computing a period of days (e.g., three days after MEC), when the ending date is not specified, the first day is excluded and the last day is included. 3.3.3. Deadlines. If any deadline falls on a Saturday, Sunday or federal or Colorado state holiday (Holiday), such deadline Will Will Not be extended to the next day that is not a Saturday, Sunday or Holiday. Should neither box be checked, the deadline will not be extended. CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 4 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC 4. PURCHASE PRICE AND TERMS. 4.1. Price and Terms. The Purchase Price set forth below is payable in U.S. Dollars by Buyer as follows: Item No. Reference Item Amount Amount 1 § 4.1. Purchase Price $ 675,000.00 2 § 4.3. Earnest Money $ 25,000.00 3 § 4.5. New Loan $ 4 § 4.6. Assumption Balance $ 5 § 4.7. Private Financing $ 6 § 4.7. Seller Financing $ 7 $ 8 $ 9 § 4.4. Cash at Closing $ 650,000.00 10 Total $ 675,000.00 $ 675,000.00 4.2. Seller Concession. At Closing, Seller will credit to Buyer $0 (Seller Concession). The Seller Concession may be used for any Buyer fee, cost, charge or expenditure to the extent the amount is allowed by the Buyer’s lender and is included in the Closing Statement or Closing Disclosure at Closing. Examples of allowable items to be paid for by the Seller Concession include, but are not limited to: Buyer’s closing costs, loan discount points, loan origination fees, prepaid items and any other fee, cost, charge, expense or expenditure. Seller Concession is in addition to any sum Seller has agreed to pay or credit Buyer elsewhere in this Contract. 4.3. Earnest Money. The Earnest Money set forth in this Section, in the form of a wire, will be payable to and held by title (Earnest Money Holder), in its trust account, on behalf of both Seller and Buyer. The Earnest Money deposit must be tendered, by Buyer, with this Contract unless the parties mutually agree to an Alternative Earnest Money Deadline for its payment. The parties authorize delivery of the Earnest Money deposit to the company conducting the Closing (Closing Company), if any, at or before Closing. In the event Earnest Money Holder has agreed to have interest on Earnest Money deposits transferred to a fund established for the purpose of providing affordable housing to Colorado residents, Seller and Buyer acknowledge and agree that any interest accruing on the Earnest Money deposited with the Earnest Money Holder in this transaction will be transferred to such fund. 4.3.1. Alternative Earnest Money Deadline. The deadline for delivering the Earnest Money, if other than at the time of tender of this Contract, is as set forth as the Alternative Earnest Money Deadline. 4.3.2. Disposition of Earnest Money. If Buyer has a Right to Terminate and timely terminates, Buyer is entitled to the return of Earnest Money as provided in this Contract. If this Contract is terminated as set forth in § 24 and, except as provided in § 23 (Earnest Money Dispute), if the Earnest Money has not already been returned following receipt of a Notice to Terminate, Seller agrees to execute and return to Buyer or Broker working with Buyer, written mutual instructions (e.g., Earnest Money Release form), within three days of Seller’s receipt of such form. If Seller is entitled to the Earnest Money, and, except as provided in § 23 (Earnest Money Dispute), if the Earnest Money has not already been paid to Seller, following receipt of an Earnest Money Release form, Buyer agrees to execute and return to Seller or Broker working with Seller, written mutual instructions (e.g., Earnest Money Release form), within three days of Buyer’s receipt. 4.3.2.1. Seller Failure to Timely Return Earnest Money. If Seller fails to timely execute and return the Earnest Money Release Form, or other written mutual instructions, Seller is in default and liable to Buyer as set forth in “If Seller is in Default”, § 20.2. and § 21, unless Seller is entitled to the Earnest Money due to a Buyer default. 4.3.2.2. Buyer Failure to Timely Release Earnest Money. If Buyer fails to timely execute and return the Earnest Money Release Form, or other written mutual instructions, Buyer is in default and CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 5 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC liable to Seller as set forth in “ If Buyer is in Default, § 20.1 and § 21, unless Buyer is entitled to the Earnest Money due to a Seller Default. 4.4. Form of Funds; Time of Payment; Available Funds. 4.4.1. Good Funds. All amounts payable by the parties at Closing, including any loan proceeds, Cash at Closing and closing costs, must be in funds that comply with all applicable Colorado laws, including electronic transfer funds, certified check, savings and loan teller’s check and cashier’s check (Good Funds). 4.4.2. Time of Payment. All funds, including the Purchase Price to be paid by Buyer, must be paid before or at Closing or as otherwise agreed in writing between the parties to allow disbursement by Closing Company at Closing OR SUCH NONPAYING PARTY WILL BE IN DEFAULT. 4.4.3. Available Funds. Buyer represents that Buyer, as of the date of this Contract, Does Does Not have funds that are immediately verifiable and available in an amount not less than the amount stated as Cash at Closing in § 4.1. 4.5. New Loan. 4.5.1. Buyer to Pay Loan Costs. Buyer, except as otherwise permitted in § 4.2. (Seller Concession), if applicable, must timely pay Buyer’s loan costs, loan discount points, prepaid items and loan origination fees as required by lender. 4.5.2. Buyer May Select Financing. Buyer may pay in cash or select financing appropriate and acceptable to Buyer, including a different loan than initially sought, except as restricted in § 4.5.3. (Loan Limitations) or § 29 (Additional Provisions). 4.5.3. Loan Limitations. Buyer may purchase the Property using any of the following types of loans: Conventional Other none. 4.6. Assumption. (Omitted as inapplicable) 4.7. Seller or Private Financing. (Omitted as inapplicable) 5. FINANCING CONDITIONS AND OBLIGATIONS. 5.1. New Loan Application. If Buyer is to pay all or part of the Purchase Price by obtaining one or more new loans (New Loan), or if an existing loan is not to be released at Closing, Buyer, if required by such lender, must make an application verifiable by such lender, on or before New Loan Application Deadline and exercise reasonable efforts to obtain such loan or approval. 5.2. New Loan Terms; New Loan Availability. 5.2.1. New Loan Terms. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer determining, in Buyer’s sole subjective discretion, whether the proposed New Loan’s payments, interest rate, conditions and costs or any other loan terms (New Loan Terms) are satisfactory to Buyer. This condition is for the sole benefit of Buyer. Buyer has the Right to Terminate under § 24.1., on or before New Loan Terms Deadline, if the New Loan Terms are not satisfactory to Buyer, in Buyer’s sole subjective discretion. 5.2.2. New Loan Availability. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer’s satisfaction with the availability of the New Loan based on the lender’s review and underwriting of Buyer’s New Loan Application (New Loan Availability). Buyer has the Right to Terminate under § 24.1., on or before the New Loan Availability Deadline if the New Loan Availability is not satisfactory to Buyer. Buyer does not have a Right to Terminate based on the New Loan Availability if the termination is based on the New Loan Terms, Appraised Value (defined below), the Lender Property Requirements (defined below), Insurability (§ 10.5. below) or the Conditional Upon Sale of Property (§ 10.7. below). IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE BUYER’S WRITTEN NOTICE TO TERMINATE, BUYER’S EARNEST MONEY WILL BE NONREFUNDABLE , except as otherwise provided in this Contract (e.g., Appraisal, Title, Survey). 5.3. Credit Information. (Omitted as inapplicable) 5.4. Existing Loan Review. (Omitted as inapplicable) CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 6 of 24 TRANSACTION PROVISIONS Initials CTMeContracts.com - ©2024 MRI Software LLC 6. APPRAISAL PROVISIONS. 6.1. Appraisal Definition. An “Appraisal” is an opinion of value prepared by a licensed or certified appraiser, engaged on behalf of Buyer or Buyer’s lender, to determine the Property’s market value (Appraised Value). The Appraisal may also set forth certain lender requirements, replacements, removals or repairs necessary on or to the Property as a condition for the Property to be valued at the Appraised Value. 6.2. Appraised Value. The applicable appraisal provision set forth below applies to the respective loan type set forth in § 4.5.3., or if a cash transaction (i.e., no financing), § 6.2.1. applies. 6.2.1. Conventional/Other. Buyer has the right to obtain an Appraisal. If the Appraised Value is less than the Purchase Price, or if the Appraisal is not received by Buyer on or before Appraisal Deadline Buyer may, on or before Appraisal Objection Deadline: 6.2.1.1. Notice to Terminate. Notify Seller in writing, pursuant to § 24.1., that this Contract is terminated; or 6.2.1.2. Appraisal Objection. Deliver to Seller a written objection accompanied by either a copy of the Appraisal or written notice from lender that confirms the Appraised Value is less than the Purchase Price (Lender Verification). 6.2.1.3. Appraisal Resolution. If an Appraisal Objection is received by Seller, on or before Appraisal Objection Deadline and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Appraisal Resolution Deadline, this Contract will terminate on the Appraisal Resolution Deadline, unless Seller receives Buyer’s written withdrawal of the Appraisal Objection before such termination, (i.e., on or before expiration of Appraisal Resolution Deadline). 6.3. Lender Property Requirements. If the lender imposes any written requirements, replacements, removals or repairs, including any specified in the Appraisal (Lender Property Requirements) to be made to the Property (e.g., roof repair, repainting), beyond those matters already agreed to by Seller in this Contract, this Contract terminates on the earlier of three days following Seller’s receipt of the Lender Property Requirements, or Closing, unless prior to termination: (1) the parties enter into a written agreement to satisfy the Lender Property Requirements; (2) the Lender Property Requirements have been completed; or (3) the satisfaction of the Lender Property Requirements is waived in writing by Buyer. 6.4. Cost of Appraisal. Cost of the Appraisal to be obtained after the date of this Contract must be timely paid by Buyer Seller. The cost of the Appraisal may include any and all fees paid to the appraiser, appraisal management company, lender’s agent or all three. 7. OWNERS’ ASSOCIATIONS. This Section is applicable if the Property is located within one or more Common Interest Communities and subject to one or more declarations (Association). 7.1. Common Interest Community Disclosure. THE PROPERTY IS LOCATED WITHIN A COMMON INTEREST COMMUNITY AND IS SUBJECT TO THE DECLARATION FOR THE COMMUNITY. THE OWNER OF THE PROPERTY WILL BE REQUIRED TO BE A MEMBER OF THE OWNERS’ ASSOCIATION FOR THE COMMUNITY AND WILL BE SUBJECT TO THE BYLAWS AND RULES AND REGULATIONS OF THE ASSOCIATION. THE DECLARATION, BYLAWS AND RULES AND REGULATIONS WILL IMPOSE FINANCIAL OBLIGATIONS UPON THE OWNER OF THE PROPERTY, INCLUDING AN OBLIGATION TO PAY ASSESSMENTS OF THE ASSOCIATION. IF THE OWNER DOES NOT PAY THESE ASSESSMENTS, THE ASSOCIATION COULD PLACE A LIEN ON THE PROPERTY AND POSSIBLY SELL IT TO PAY THE DEBT. THE DECLARATION, BYLAWS AND RULES AND REGULATIONS OF THE COMMUNITY MAY PROHIBIT THE OWNER FROM MAKING CHANGES TO THE PROPERTY WITHOUT AN ARCHITECTURAL REVIEW BY THE ASSOCIATION (OR A COMMITTEE OF THE ASSOCIATION) AND THE APPROVAL OF THE ASSOCIATION. PURCHASERS OF PROPERTY WITHIN THE COMMON INTEREST COMMUNITY SHOULD INVESTIGATE THE FINANCIAL OBLIGATIONS OF MEMBERS OF THE ASSOCIATION. PURCHASERS SHOULD CAREFULLY READ THE DECLARATION FOR THE COMMUNITY AND THE BYLAWS AND RULES AND REGULATIONS OF THE ASSOCIATION. 7.2. Association Documents to Buyer. Seller is obligated to provide to Buyer the Association Documents (defined below), at Seller’s expense, on or before Association Documents Deadline. Seller CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 7 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC authorizes the Association to provide the Association Documents to Buyer, at Seller’s expense. Seller’s obligation to provide the Association Documents is fulfilled upon Buyer’s receipt of the Association Documents, regardless of who provides such documents. 7.3. Association Documents. Association documents (Association Documents) consist of the following: 7.3.1. All Association declarations, articles of incorporation, bylaws, articles of organization, operating agreements, rules and regulations, party wall agreements and the Association’s responsible governance policies adopted under § 38-33.3-209.5, C.R.S.; 7.3.2. Minutes of: (1) the annual owners’ or members’ meeting and (2) any executive boards’ or managers’ meetings; such minutes include those provided under the most current annual disclosure required under § 38-33.3-209.4, C.R.S. (Annual Disclosure) and minutes of meetings, if any, subsequent to the minutes disclosed in the Annual Disclosure. If none of the preceding minutes exist, then the most recent minutes, if any (§§ 7.3.1. and 7.3.2., collectively, Governing Documents); and 7.3.3. List of all Association insurance policies as provided in the Association’s last Annual Disclosure, including, but not limited to, property, general liability, association director and officer professional liability and fidelity policies. The list must include the company names, policy limits, policy deductibles, additional named insureds and expiration dates of the policies listed (Association Insurance Documents); 7.3.4. A list by unit type of the Association’s assessments, including both regular and special assessments as disclosed in the Association’s last Annual Disclosure; 7.3.5. The Association’s most recent financial documents which consist of: (1) the Association’s operating budget for the current fiscal year, (2) the Association’s most recent annual financial statements, including any amounts held in reserve for the fiscal year immediately preceding the Association’s last Annual Disclosure, (3) the results of the Association’s most recent available financial audit or review, (4) list of the fees and charges (regardless of name or title of such fees or charges) that the Association’s community association manager or Association will charge in connection with the Closing including, but not limited to, any fee incident to the issuance of the Association’s statement of assessments (Status Letter), any rush or update fee charged for the Status Letter, any record change fee or ownership record transfer fees (Record Change Fee), fees to access documents, (5) list of all assessments required to be paid in advance, reserves or working capital due at Closing and (6) reserve study, if any (§§ 7.3.4. and 7.3.5., collectively, Financial Documents); 7.3.6. Any written notice from the Association to Seller of a “construction defect action” under § 38-33.3-303.5, C.R.S. within the past six months and the result of whether the Association approved or disapproved such action (Construction Defect Documents). Nothing in this Section limits the Seller’s obligation to disclose adverse material facts as required under § 10.2. (Disclosure of Adverse Material Facts; Subsequent Disclosure; Present Condition) including any problems or defects in the common elements or limited common elements of the Association property. 7.4. Conditional on Buyer’s Review. Buyer has the right to review the Association Documents. Buyer has the Right to Terminate under § 24.1., on or before Association Documents Termination Deadline, based on any unsatisfactory provision in any of the Association Documents, in Buyer’s sole subjective discretion. Should Buyer receive the Association Documents after Association Documents Deadline, Buyer, at Buyer’s option, has the Right to Terminate under § 24.1. by Buyer’s Notice to Terminate received by Seller on or before ten days after Buyer’s receipt of the Association Documents. If Buyer does not receive the Association Documents, or if Buyer’s Notice to Terminate would otherwise be required to be received by Seller after Closing Date, Buyer’s Notice to Terminate must be received by Seller on or before Closing. If Seller does not receive Buyer’s Notice to Terminate within such time, Buyer accepts the provisions of the Association Documents as satisfactory and Buyer waives any Right to Terminate under this provision, notwithstanding the provisions of § 8.6. (Third Party Right to Purchase/Approve). 8. TITLE INSURANCE, RECORD TITLE AND OFF-RECORD TITLE. 8.1. Evidence of Record Title. 8.1.1. Seller Selects Title Insurance Company. If this box is checked, Seller will select the title insurance company to furnish the owner’s title insurance policy at Seller’s expense. On or before Record CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 8 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC Title Deadline, Seller must furnish to Buyer, a current commitment for an owner’s title insurance policy (Title Commitment), in an amount equal to the Purchase Price, or if this box is checked, an Abstract of Title certified to a current date. Seller will cause the title insurance policy to be issued and delivered to Buyer as soon as practicable at or after Closing. 8.1.2. Buyer Selects Title Insurance Company. If this box is checked, Buyer will select the title insurance company to furnish the owner’s title insurance policy at Buyer’s expense. On or before Record Title Deadline, Buyer must furnish to Seller, a current commitment for owner’s title insurance policy (Title Commitment), in an amount equal to the Purchase Price. If neither box in § 8.1.1. or § 8.1.2. is checked, § 8.1.1. applies. 8.1.3. Owner’s Extended Coverage (OEC). The Title Commitment Will Will Not contain Owner’s Extended Coverage (OEC). If the Title Commitment is to contain OEC, it will commit to delete or insure over the standard exceptions which relate to: (1) parties in possession, (2) unrecorded easements, (3) survey matters, (4) unrecorded mechanics’ liens, (5) gap period (period between the effective date and time of commitment to the date and time the deed is recorded) and (6) unpaid taxes, assessments and unredeemed tax sales prior to the year of Closing. Any additional premium expense to obtain OEC will be paid by Buyer Seller One-Half by Buyer and One-Half by Seller Other none. Regardless of whether the Contract requires OEC, the Title Insurance Commitment may not provide OEC or delete or insure over any or all of the standard exceptions for OEC. The Title Insurance Company may require a New Survey or New ILC, defined below, among other requirements for OEC. If the Title Insurance Commitment is not satisfactory to Buyer, Buyer has a right to object under § 8.7. (Right to Object to Title, Resolution). 8.1.4. Title Documents. Title Documents consist of the following: (1) copies of any plats, declarations, covenants, conditions and restrictions burdening the Property and (2) copies of any other documents (or, if illegible, summaries of such documents) listed in the schedule of exceptions (Exceptions) in the Title Commitment furnished to Buyer (collectively, Title Documents). 8.1.5. Copies of Title Documents. Buyer must receive, on or before Record Title Deadline, copies of all Title Documents. This requirement pertains only to documents as shown of record in the office of the clerk and recorder in the county where the Property is located. The cost of furnishing copies of the documents required in this Section will be at the expense of the party or parties obligated to pay for the owner’s title insurance policy. 8.1.6. Existing Abstracts of Title. Seller must deliver to Buyer copies of any abstracts of title covering all or any portion of the Property (Abstract of Title) in Seller’s possession on or before Record Title Deadline. 8.2. Record Title. Buyer has the right to review and object to the Abstract of Title or Title Commitment and any of the Title Documents as set forth in § 8.7. (Right to Object to Title, Resolution) on or before Record Title Objection Deadline. Buyer’s objection may be based on any unsatisfactory form or content of Title Commitment or Abstract of Title, notwithstanding § 13, or any other unsatisfactory title condition, in Buyer’s sole subjective discretion. If the Abstract of Title, Title Commitment or Title Documents are not received by Buyer on or before the Record Title Deadline, or if there is an endorsement to the Title Commitment that adds a new Exception to title, a copy of the new Exception to title and the modified Title Commitment will be delivered to Buyer. Buyer has until the earlier of Closing or ten days after receipt of such documents by Buyer to review and object to: (1) any required Title Document not timely received by Buyer, (2) any change to the Abstract of Title, Title Commitment or Title Documents, or (3) any endorsement to the Title Commitment. If Seller receives Buyer’s Notice to Terminate or Notice of Title Objection, pursuant to this § 8.2. (Record Title), any title objection by Buyer is governed by the provisions set forth in § 8.7. (Right to Object to Title, Resolution). If Seller has fulfilled all Seller’s obligations, if any, to deliver to Buyer all documents required by § 8.1. (Evidence of Record Title) and Seller does not receive Buyer’s Notice to Terminate or Notice of Title Objection by the applicable deadline specified above, Buyer accepts the condition of title as disclosed by the Abstract of Title, Title Commitment and Title Documents as satisfactory. 8.3. Off-Record Title. Seller must deliver to Buyer, on or before Off-Record Title Deadline, true copies of all existing surveys in Seller’s possession pertaining to the Property and must disclose to Buyer all easements, liens (including, without limitation, governmental improvements approved, but not yet installed) or CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 9 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC other title matters not shown by public records, of which Seller has actual knowledge (Off-Record Matters). This Section excludes any New ILC or New Survey governed under § 9 (New ILC, New Survey). Buyer has the right to inspect the Property to investigate if any third party has any right in the Property not shown by public records (e.g., unrecorded easement, boundary line discrepancy or water rights). Buyer’s Notice to Terminate or Notice of Title Objection of any unsatisfactory condition (whether disclosed by Seller or revealed by such inspection, notwithstanding § 8.2. (Record Title) and § 13 (Transfer of Title), in Buyer’s sole subjective discretion, must be received by Seller on or before Off-Record Title Objection Deadline. If an Off-Record Matter is received by Buyer after the Off-Record Title Deadline, Buyer has until the earlier of Closing or ten days after receipt by Buyer to review and object to such Off-Record Matter. If Seller receives Buyer’s Notice to Terminate or Notice of Title Objection pursuant to this § 8.3. (Off-Record Title), any title objection by Buyer is governed by the provisions set forth in § 8.7. (Right to Object to Title, Resolution). If Seller does not receive Buyer’s Notice to Terminate or Notice of Title Objection by the applicable deadline specified above, Buyer accepts title subject to such Off-Record Matters and rights, if any, of third parties not shown by public records of which Buyer has actual knowledge. 8.4. Special Taxing and Metropolitan Districts. Intentionally Deleted 8.5. Tax Certificate. A tax certificate paid for by Seller Buyer, for the Property (Tax Certificate) must be delivered to Buyer on or before Record Title Deadline. If the content of the Tax Certificate is unsatisfactory to Buyer, in Buyer’s sole subjective discretion, Buyer may terminate, on or before Record Title Objection Deadline. Should Buyer receive the Tax Certificate after Record Title Deadline, Buyer, at Buyer’s option, has the Right to Terminate under § 24.1. by Buyer’s Notice to Terminate received by Seller on or before ten days after Buyer’s receipt of the Tax Certificate. If Buyer does not receive the Tax Certificate, or if Buyer’s Notice to Terminate would otherwise be required to be received by Seller after Closing Date, Buyer’s Notice to Terminate must be received by Seller on or before Closing. If Seller does not receive Buyer’s Notice to Terminate within such time, Buyer accepts the content of the Tax Certificate as satisfactory and Buyer waives any Right to Terminate under this provision. If Buyer’s loan specified in §4.5.3, (Loan Limitations) prohibits Buyer from paying for the Tax Certificate, the Tax Certificate will be paid for by Seller. 8.6. Third Party Right to Purchase/Approve. If any third party has a right to purchase the Property (e.g., right of first refusal on the Property, right to purchase the Property under a lease or an option held by a third party to purchase the Property) or a right of a third party to approve this Contract, Seller must promptly submit this Contract according to the terms and conditions of such right. If the third-party holder of such right exercises its right this Contract will terminate. If the third party’s right to purchase is waived explicitly or expires, or the Contract is approved, this Contract will remain in full force and effect. Seller must promptly notify Buyer in writing of the foregoing. If the third party right to purchase is exercised or approval of this Contract has not occurred on or before Third Party Right to Purchase/Approve Deadline, this Contract will then terminate. Seller will supply to Buyer, in writing, details of any Third Party Right to Purchase the Property on or before the Record Title Deadline. 8.7. Right to Object to Title, Resolution. Buyer has a right to object or terminate, in Buyer’s sole subjective discretion, based on any title matters including those matters set forth in § 8.2. (Record Title), § 8.3. (Off-Record Title), § 8.5. (Tax Certificate) and § 13 (Transfer of Title). If Buyer exercises Buyer’s rights to object or terminate based on any such title matter, on or before the applicable deadline, Buyer has the following options: 8.7.1. Title Objection, Resolution. If Seller receives Buyer’s written notice objecting to any title matter (Notice of Title Objection) on or before the applicable deadline and if Buyer and Seller have not agreed to a written settlement thereof on or before Title Resolution Deadline, this Contract will terminate on the expiration of Title Resolution Deadline, unless Seller receives Buyer’s written withdrawal of Buyer’s Notice of Title Objection (i.e., Buyer’s written notice to waive objection to such items and waives the Right to Terminate for that reason), on or before expiration of Title Resolution Deadline. If either the Record Title Deadline or the Off-Record Title Deadline, or both, are extended pursuant to § 8.2. (Record Title) or § 8.3. (Off-Record Title) the Title Resolution Deadline also will be automatically extended to the earlier of Closing or fifteen days after Buyer’s receipt of the applicable documents; or 8.7.2. Title Objection, Right to Terminate. Buyer may exercise the Right to Terminate under § 24.1., on or before the applicable deadline, based on any title matter unsatisfactory to Buyer, in Buyer’s sole subjective discretion. CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 10 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC 8.8. Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, including, without limitation, boundary lines and encroachments, set-back requirements, area, zoning, building code violations, unrecorded easements and claims of easements, leases and other unrecorded agreements, water on or under the Property and various laws and governmental regulations concerning land use, development and environmental matters. 8.8.1. OIL, GAS, WATER AND MINERAL DISCLOSURE. THE SURFACE ESTATE OF THE PROPERTY MAY BE OWNED SEPARATELY FROM THE UNDERLYING MINERAL ESTATE AND TRANSFER OF THE SURFACE ESTATE MAY NOT NECESSARILY INCLUDE TRANSFER OF THE MINERAL ESTATE OR WATER RIGHTS. THIRD PARTIES MAY OWN OR LEASE INTERESTS IN OIL, GAS, OTHER MINERALS, GEOTHERMAL ENERGY OR WATER ON OR UNDER THE SURFACE OF THE PROPERTY, WHICH INTERESTS MAY GIVE THEM RIGHTS TO ENTER AND USE THE SURFACE OF THE PROPERTY TO ACCESS THE MINERAL ESTATE, OIL, GAS OR WATER. 8.8.2. SURFACE USE AGREEMENT. THE USE OF THE SURFACE ESTATE OF THE PROPERTY TO ACCESS THE OIL, GAS OR MINERALS MAY BE GOVERNED BY A SURFACE USE AGREEMENT, A MEMORANDUM OR OTHER NOTICE OF WHICH MAY BE RECORDED WITH THE COUNTY CLERK AND RECORDER. 8.8.3. OIL AND GAS ACTIVITY. OIL AND GAS ACTIVITY THAT MAY OCCUR ON OR ADJACENT TO THE PROPERTY MAY INCLUDE, BUT IS NOT LIMITED TO, SURVEYING, DRILLING, WELL COMPLETION OPERATIONS, STORAGE, OIL AND GAS, OR PRODUCTION FACILITIES, PRODUCING WELLS, REWORKING OF CURRENT WELLS AND GAS GATHERING AND PROCESSING FACILITIES. 8.8.4. ADDITIONAL INFORMATION. BUYER IS ENCOURAGED TO SEEK ADDITIONAL INFORMATION REGARDING OIL AND GAS ACTIVITY ON OR ADJACENT TO THE PROPERTY, INCLUDING DRILLING PERMIT APPLICATIONS. THIS INFORMATION MAY BE AVAILABLE FROM THE COLORADO OIL AND GAS CONSERVATION COMMISSION. 8.8.5. Title Insurance Exclusions. Matters set forth in this Section and others, may be excepted, excluded from, or not covered by the owner’s title insurance policy. 8.9. Mineral Rights Review. Buyer Does Does Not have a Right to Terminate if examination of the Mineral Rights is unsatisfactory to Buyer on or before the Mineral Rights Examination Deadline. 9. NEW ILC, NEW SURVEY. 9.1. New ILC or New Survey. If the box is checked, (1) New Improvement Location Certificate (New ILC); or, (2) New Survey in the form of TBD; is required and the following will apply: 9.1.1. Ordering of New ILC or New Survey. Seller Buyer will order the New ILC or New Survey. The New ILC or New Survey may also be a previous ILC or survey that is in the above-required form, certified and updated as of a date after the date of this Contract. 9.1.2. Payment for New ILC or New Survey. The cost of the New ILC or New Survey will be paid, on or before Closing, by: Seller Buyer or: Seller will provide any existing surveys already in their possession prior to the due diligence delivery deadline. 9.1.3. Delivery of New ILC or New Survey. Buyer, Seller, the issuer of the Title Commitment (or the provider of the opinion of title if an Abstract of Title) and NorthPeak Commercial Advisors will receive a New ILC or New Survey on or before New ILC or New Survey Deadline. 9.1.4. Certification of New ILC or New Survey. The New ILC or New Survey will be certified by the surveyor to all those who are to receive the New ILC or New Survey. 9.2. Buyer’s Right to Waive or Change New ILC or New Survey Selection. Buyer may select a New ILC or New Survey different than initially specified in this Contract if there is no additional cost to Seller or change to the New ILC or New Survey Objection Deadline. Buyer may, in Buyer’s sole subjective discretion, waive a New ILC or New Survey if done prior to Seller incurring any cost for the same. 9.3. New ILC or New Survey Objection. Buyer has the right to review and object based on the New ILC or New Survey. If the New ILC or New Survey is not timely received by Buyer or is unsatisfactory to CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 11 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC Buyer, in Buyer’s sole subjective discretion, Buyer may, on or before New ILC or New Survey Objection Deadline, notwithstanding § 8.3. or § 13: 9.3.1. Notice to Terminate. Notify Seller in writing, pursuant to § 24.1, that this Contract is terminated; or 9.3.2. New ILC or New Survey Objection. Deliver to Seller a written description of any matter that was to be shown or is shown in the New ILC or New Survey that is unsatisfactory and that Buyer requires Seller to correct. 9.3.3. New ILC or New Survey Resolution. If a New ILC or New Survey Objection is received by Seller, on or before New ILC or New Survey Objection Deadline and if Buyer and Seller have not agreed in writing to a settlement thereof on or before New ILC or New Survey Resolution Deadline, this Contract will terminate on expiration of the New ILC or New Survey Resolution Deadline, unless Seller receives Buyer’s written withdrawal of the New ILC or New Survey Objection before such termination (i.e., on or before expiration of New ILC or New Survey Resolution Deadline). 10. PROPERTY DISCLOSURE, INSPECTION, INDEMNITY, INSURABILITY AND DUE DILIGENCE. 10.1. Seller’s Property Disclosure. On or before Seller’s Property Disclosure Deadline , Seller agrees to deliver to Buyer the most current version of the applicable Colorado Real Estate Commission’s Seller’s Property Disclosure form completed by Seller to Seller’s actual knowledge and current as of the date of this Contract. 10.2. Disclosure of Adverse Material Facts; Subsequent Disclosure; Present Condition. Seller must disclose to Buyer any adverse material facts actually known by Seller as of the date of this Contract. Seller agrees that disclosure of adverse material facts will be in writing. In the event Seller discovers an adverse material fact after the date of this Contract, Seller must timely disclose such adverse fact to Buyer. Buyer has the Right to Terminate based on the Seller’s new disclosure on the earlier of Closing or five days after Buyer’s receipt of the new disclosure. Except as otherwise provided in this Contract, Buyer acknowledges that Seller is conveying the Property to Buyer in an “ As Is” condition, “ Where Is” and “ With All Faults.” 10.3. Inspection. Unless otherwise provided in this Contract, Buyer, acting in good faith, has the right to have inspections (by one or more third parties, personally or both) of the Property, Leased Items, and Inclusions (Inspection), at Buyer’s expense. If (1) the physical condition of the Property, including, but not limited to, the roof, walls, structural integrity of the Property, the electrical, plumbing, HVAC and other mechanical systems of the Property, (2) the physical condition of the Inclusions and Leased Items, (3) service to the Property (including utilities and communication services), systems and components of the Property (e.g., heating and plumbing), (4) any proposed or existing transportation project, road, street or highway, or (5) any other activity, odor or noise (whether on or off the Property) and its effect or expected effect on the Property or its occupants is unsatisfactory, in Buyer’s sole subjective discretion, Buyer may: 10.3.1. Inspection Termination. On or before the Inspection Termination Deadline, notify Seller in writing, pursuant to § 24.1., that this Contract is terminated due to any unsatisfactory condition, provided the Buyer did not previously deliver an Inspection Objection. Buyer’s Right to Terminate under this provision expires upon delivery of an Inspection Objection to Seller pursuant to § 10.3.2.; or 10.3.2. Inspection Objection. On or before the Inspection Objection Deadline, deliver to Seller a written description of any unsatisfactory condition that Buyer requires Seller to correct. 10.3.3. Inspection Resolution. If an Inspection Objection is received by Seller, on or before Inspection Objection Deadline and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Inspection Resolution Deadline, this Contract will terminate on Inspection Resolution Deadline unless Seller receives Buyer’s written withdrawal of the Inspection Objection before such termination (i.e., on or before expiration of Inspection Resolution Deadline). Nothing in this provision prohibits the Buyer and the Seller from mutually terminating this Contract before the Inspection Resolution Deadline passes by executing an Earnest Money Release. CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 12 of 24 DISCLOSURE, INSPECTION AND DUE DILIGENCE Initials CTMeContracts.com - ©2024 MRI Software LLC 10.4. Damage, Liens and Indemnity. Buyer, except as otherwise provided in this Contract or other written agreement between the parties, is responsible for payment for all inspections, tests, surveys, engineering reports, or other reports performed at Buyer’s request (Work) and must pay for any damage that occurs to the Property and Inclusions as a result of such Work. Buyer must not permit claims or liens of any kind against the Property for Work performed on the Property. The provisions of this Section survive the termination of this Contract. This § 10.4. does not apply to items performed pursuant to an Inspection Resolution. 10.5. Insurability. Buyer has the Right to Terminate under § 24.1., on or before Property Insurance Termination Deadline, based on any unsatisfactory provision of the availability, terms and conditions and premium for property insurance (Property Insurance) on the Property, in Buyer’s sole subjective discretion. 10.6. Due Diligence. 10.6.1. Due Diligence Documents. Seller agrees to deliver copies of the following documents and information pertaining to the Property and Leased Items (Due Diligence Documents) to Buyer on or before Due Diligence Documents Delivery Deadline: 10.6.1.1. Occupancy Agreements. All current leases, including any amendments or other occupancy agreements, pertaining to the Property. Those leases or other occupancy agreements pertaining to the Property that survive Closing are as follows (Leases): Any leases in place at time of closing. 10.6.1.2. Leased Items Documents. If any lease of personal property (§ 2.5.7., Leased Items) will be transferred to Buyer at Closing, Seller agrees to deliver copies of the leases and information pertaining to the personal property to Buyer on or before Due Diligence Documents Delivery Deadline. Buyer Will Will Not assume the Seller’s obligations under such leases for the Leased Items (§ 2.5.7., Leased Items). 10.6.1.3. Encumbered Inclusions Documents. If any Inclusions owned by Seller are encumbered pursuant to § 2.5.4. (Encumbered Inclusions) above, Seller agrees to deliver copies of the evidence of debt, security and any other documents creating the encumbrance to Buyer on or before Due Diligence Documents Delivery Deadline. Buyer Will Will Not assume the debt on the Encumbered Inclusions (§ 2.5.4., Encumbered Inclusions). 10.6.1.4. Other Documents. If the respective box is checked, Seller agrees to additionally deliver copies of the following: 10.6.1.4.1. All contracts relating to the operation, maintenance and management of the Property; 10.6.1.4.2. Property tax bills for the last 2 years; 10.6.1.4.3. As-built construction plans to the Property and the tenant improvements, including architectural, electrical, mechanical and structural systems; engineering reports; and permanent Certificates of Occupancy, to the extent now available; 10.6.1.4.4. A list of all Inclusions to be conveyed to Buyer; 10.6.1.4.5. Operating statements for the past 2 years; 10.6.1.4.6. A rent roll accurate and correct to the date of this Contract; 10.6.1.4.7. A schedule of any tenant improvement work Seller is obligated to complete but has not yet completed and capital improvement work either scheduled or in process on the date of this Contract; 10.6.1.4.8. All insurance policies pertaining to the Property and copies of any claims which have been made for the past 2 years; 10.6.1.4.9. Soils reports, surveys and engineering reports or data pertaining to the CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 13 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC Property (if not delivered earlier under § 8.3.); 10.6.1.4.10. Any and all existing documentation and reports regarding Phase I and II environmental reports, letters, test results, advisories and similar documents respective to the existence or nonexistence of asbestos, PCB transformers, or other toxic, hazardous or contaminated substances and/or underground storage tanks and/or radon gas. If no reports are in Seller’s possession or known to Seller, Seller warrants that no such reports are in Seller’s possession or known to Seller; 10.6.1.4.11. Any Americans with Disabilities Act reports, studies or surveys concerning the compliance of the Property with said Act; 10.6.1.4.12. All permits, licenses and other building or use authorizations issued by any governmental authority with jurisdiction over the Property and written notice of any violation of any such permits, licenses or use authorizations, if any; and 10.6.1.4.13. Other: none 10.6.2. Due Diligence Documents Review and Objection. Buyer has the right to review and object based on the Due Diligence Documents. If the Due Diligence Documents are not supplied to Buyer or are unsatisfactory, in Buyer’s sole subjective discretion, Buyer may, on or before Due Diligence Documents Objection Deadline: 10.6.2.1. Notice to Terminate. Notify Seller in writing, pursuant to § 24.1., that this Contract is terminated; or 10.6.2.2. Due Diligence Documents Objection. Deliver to Seller a written description of any unsatisfactory Due Diligence Documents that Buyer requires Seller to correct. 10.6.2.3. Due Diligence Documents Resolution. If a Due Diligence Documents Objection is received by Seller, on or before Due Diligence Documents Objection Deadline and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Due Diligence Documents Resolution Deadline, this Contract will terminate on Due Diligence Documents Resolution Deadline unless Seller receives Buyer’s written withdrawal of the Due Diligence Documents Objection before such termination (i.e., on or before expiration of Due Diligence Documents Resolution Deadline. 10.6.3. Zoning. Buyer has the Right to Terminate under § 24.1., on or before Due Diligence Documents Objection Deadline, based on any unsatisfactory zoning and any use restrictions imposed by any governmental agency with jurisdiction over the Property, in Buyer’s sole subjective discretion. 10.6.4. Due Diligence – Environmental, ADA. Buyer has the right to obtain environmental inspections of the Property including Phase I and Phase II Environmental Site Assessments, as applicable. Seller Buyer will order or provide Phase I Environmental Site Assessment, Phase II Environmental Site Assessment (compliant with most current version of the applicable ASTM E1527 standard practices for Environmental Site Assessments) and/or none, at the expense of Seller Buyer (Environmental Inspection). In addition, Buyer, at Buyer’s expense, may also conduct an evaluation whether the Property complies with the Americans with Disabilities Act (ADA Evaluation). All such inspections and evaluations must be conducted at such times as are mutually agreeable to minimize the interruption of Seller’s and any Seller’s tenants’ business uses of the Property, if any. If Buyer’s Phase I Environmental Site Assessment recommends a Phase II Environmental Site Assessment, the Environmental Inspection Termination Deadline will be extended by 21 days (Extended Environmental Inspection Objection Deadline) and if such Extended Environmental Inspection Objection Deadline extends beyond the Closing Date, the Closing Date will be extended a like period of time. In such event, Seller Buyer must pay the cost for such Phase II Environmental Site Assessment. Notwithstanding Buyer’s right to obtain additional environmental inspections of the Property in this § 10.6.4., Buyer has the Right to Terminate under § 24.1., on or before Environmental Inspection Termination Deadline, or if applicable, the Extended Environmental Inspection Objection Deadline, based on any unsatisfactory results of Environmental Inspection, in Buyer’s sole subjective discretion. Buyer has the Right to Terminate under § 24.1., on or before ADA Evaluation Termination Deadline, based on any unsatisfactory ADA Evaluation, in Buyer’s sole subjective discretion. 10.7. Conditional Upon Sale of Property. This Contract is conditional upon the sale and closing of that certain property owned by Buyer and commonly known as none. Buyer has the Right to Terminate CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 14 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC under § 24.1. effective upon Seller’s receipt of Buyer’s Notice to Terminate on or before Conditional Sale Deadline if such property is not sold and closed by such deadline. This Section is for the sole benefit of Buyer. If Seller does not receive Buyer’s Notice to Terminate on or before Conditional Sale Deadline, Buyer waives any Right to Terminate under this provision. 10.8. Source of Potable Water (Residential Land and Residential Improvements Only). [Intentionally Deleted - See Residential Addendum if applicable] 10.9. Existing Leases; Modification of Existing Leases; New Leases. Seller states that none of the Leases to be assigned to the Buyer at the time of Closing contain any rent concessions, rent reductions or rent abatements except as disclosed in the Lease or other writing received by Buyer. Seller will not amend, alter, modify, extend or cancel any of the Leases nor will Seller enter into any new leases affecting the Property without the prior written consent of Buyer, which consent will not be unreasonably withheld or delayed. 10.10. Lead-Based Paint. [Intentionally Deleted - See Residential Addendum if applicable] 10.11. Carbon Monoxide Alarms. [Intentionally Deleted - See Residential Addendum if applicable] 10.12. Methamphetamine Disclosure. [Intentionally Deleted - See Residential Addendum if applicable] 11. TENANT ESTOPPEL STATEMENTS. 11.1. Estoppel Statements Conditions. Buyer has the right to review and object to any Estoppel Statements. Seller must request from all tenants of the Property and if received by Seller, deliver to Buyer on or before Estoppel Statements Deadline, statements in a form and substance reasonably acceptable to Buyer, from each occupant or tenant at the Property (Estoppel Statement) attached to a copy of the Lease stating: 11.1.1. The commencement date of the Lease and scheduled termination date of the Lease; 11.1.2. That said Lease is in full force and effect and that there have been no subsequent modifications or amendments; 11.1.3. The amount of any advance rentals paid, rent concessions given and deposits paid to Seller; 11.1.4. The amount of monthly (or other applicable period) rental paid to Seller; 11.1.5. That there is no default under the terms of said Lease by landlord or occupant; and 11.1.6. That the Lease to which the Estoppel Statement is attached is a true, correct and complete copy of the Lease demising the premises it describes. 11.2. Seller Estoppel Statement. In the event Seller does not receive from all tenants of the Property a completed signed Estoppel Statement, Seller agrees to complete and execute an Estoppel Statement setting forth the information and documents required §11.1. above and deliver the same to Buyer on or before Estoppel Statements Deadline. 11.3. Estoppel Statements Termination. Buyer has the Right to Terminate under § 24.1., on or before Estoppel Statements Termination Deadline, based on any unsatisfactory Estoppel Statement, in Buyer’s sole subjective discretion, or if Seller fails to deliver the Estoppel Statements on or before Estoppel Statements Deadline. Buyer also has the unilateral right to waive any unsatisfactory Estoppel Statement. 12. CLOSING DOCUMENTS, INSTRUCTIONS AND CLOSING. 12.1. Closing Documents and Closing Information. Seller and Buyer will cooperate with the Closing Company to enable the Closing Company to prepare and deliver documents required for Closing to Buyer and Seller and their designees. If Buyer is obtaining a loan to purchase the Property, Buyer acknowledges Buyer’s lender is required to provide the Closing Company, in a timely manner, all required loan documents and financial information concerning Buyer’s loan. Buyer and Seller will furnish any CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 15 of 24 CLOSING PROVISIONS Initials CTMeContracts.com - ©2024 MRI Software LLC additional information and documents required by Closing Company that will be necessary to complete this transaction. Buyer and Seller will sign and complete all customary or reasonably required documents at or before Closing. 12.2. Closing Instructions. Colorado Real Estate Commission’s Closing Instructions Are Are Not executed with this Contract. 12.3. Closing. Delivery of deed from Seller to Buyer will be at closing (Closing). Closing will be on the date specified as the Closing Date or by mutual agreement at an earlier date. At Closing, Seller agrees to deliver a set of keys for the Property to Buyer. The hour and place of Closing will be as designated by Buyer and Seller will each schedule their own time and place of Closing with the title company. 12.4. Disclosure of Settlement Costs. Buyer and Seller acknowledge that costs, quality and extent of service vary between different settlement service providers (e.g., attorneys, lenders, inspectors and title companies). 12.5. Assignment of Leases. Seller must assign to Buyer all Leases at Closing that will continue after Closing and Buyer must assume Seller’s obligations under such Leases. Further, Seller must transfer to Buyer all Leased Items and assign to Buyer such leases for the Leased Items accepted by Buyer pursuant to § 2.5.7. (Leased Items). 13. TRANSFER OF TITLE. Subject to Buyer’s compliance with the terms and provisions of this Contract, including the tender of any payment due at Closing, Seller must execute and deliver the following good and sufficient deed to Buyer, at Closing: special warranty deed general warranty deed bargain and sale deed quit claim deed personal representative’s deed deed. Seller, provided another deed is not selected, must execute and deliver a good and sufficient special warranty deed to Buyer, at Closing. Unless otherwise specified in § 29 (Additional Provisions), if title will be conveyed using a special warranty deed or a general warranty deed, title will be conveyed “subject to statutory exceptions” as defined in §38-30-113(5)(a), C.R.S. 14. PAYMENT OF LIENS AND ENCUMBRANCES. Unless agreed to by Buyer in writing, any amounts owed on any liens or encumbrances securing a monetary sum against the Property and Inclusions, including any governmental liens for special improvements installed as of the date of Buyer’s signature hereon, whether assessed or not, and previous years’ taxes, will be paid at or before Closing by Seller from the proceeds of this transaction or from any other source. 15. CLOSING COSTS, FEES, ASSOCIATION STATUS LETTER AND DISBURSEMENTS, TAXES AND WITHHOLDING. 15.1. Closing Costs. Buyer and Seller must pay, in Good Funds, their respective closing costs and all other items required to be paid at Closing, except as otherwise provided herein. 15.2. Closing Services Fee. The fee for real estate closing services must be paid at Closing by Buyer Seller One-Half by Buyer and One-Half by Seller Other none. 15.3. Association Fees and Required Disbursements. At least fourteen days prior to Closing Date, Seller agrees to promptly request that the Closing Company or the Association deliver to Buyer a current Status Letter, if applicable. Any fees associated with or specified in the Status Letter will be paid as follows: 15.3.1. Status Letter Fee. Any fee incident to the issuance of Association’s Status Letter must be paid by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.3.2. Record Change Fee. Any Record Change Fee must be paid by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.3.3. Assessments, Reserves or Working Capital. All assessments required to be paid in advance (other than Association Assessments as defined in § 16.2. (Association Assessments), reserves or working capital due at Closing must be paid by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.3.4. Other Fees. Any other fee listed in the Status Letter as required to be paid at Closing will CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 16 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC be paid by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.4. Local Transfer Tax. Any Local Transfer Tax must be paid at Closing by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.5. Sales and Use Tax. Any sales and use tax that may accrue because of this transaction must be paid when due by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.6. Private Transfer Fee. Any private transfer fees and other fees due to a transfer of the Property, payable at Closing, such as community association fees, developer fees and foundation fees, must be paid at Closing by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.7. Water Transfer Fees. Water Transfer Fees can change. The fees, as of the date of this Contract, do not exceed $TBD for: Water Stock/Certificates Water District Augmentation Membership Small Domestic Water Company none and must be paid at Closing by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.8. Utility Transfer Fees. Utility transfer fees can change. Any fees to transfer utilities from Seller to Buyer must be paid by Buyer Seller One-Half by Buyer and One-Half by Seller N/A. 15.9. FIRPTA and Colorado Withholding. 15.9.1. FIRPTA. The Internal Revenue Service (IRS) may require a substantial portion of the Seller’s proceeds be withheld after Closing when Seller is a foreign person. If required withholding does not occur, the Buyer could be held liable for the amount of the Seller’s tax, interest and penalties. If the box in this Section is checked, Seller represents that Seller IS a foreign person for purposes of U.S. income taxation. If the box in this Section is not checked, Seller represents that Seller is not a foreign person for purposes of U.S. income taxation. Seller agrees to cooperate with Buyer and Closing Company to provide any reasonably requested documents to verify Seller’s foreign person status. If withholding is required, Seller authorizes Closing Company to withhold such amount from Seller’s proceeds. Seller should inquire with Seller’s tax advisor to determine if withholding applies or if an exemption exists. 15.9.2. Colorado Withholding. The Colorado Department of Revenue may require a portion of the Seller’s proceeds be withheld after Closing when Seller will not be a Colorado resident after Closing, if not otherwise exempt. Seller agrees to cooperate with Buyer and Closing Company to provide any reasonably requested documents to verify Seller’s status. If withholding is required, Seller authorizes Closing Company to withhold such amount from Seller’s proceeds. Seller should inquire with Seller’s tax advisor to determine if withholding applies or if an exemption exists. 16. PRORATIONS AND ASSOCIATION ASSESSMENTS. 16.1. Prorations. The following will be prorated to the Closing Date, except as otherwise provided: 16.1.1. Taxes. Personal property taxes, if any, special taxing district assessments, if any, and general real estate taxes for the year of Closing, based on Taxes for the Calendar Year Immediately Preceding Closing Most Recent Mill Levy and Most Recent Assessed Valuation, adjusted by any applicable qualifying seniors property tax exemption, qualifying disabled veteran exemption or Other none 16.1.2. Rents. Rents based on Rents Actually Received Accrued. At Closing, Seller will transfer or credit to Buyer the security deposits for all Leases assigned to Buyer, or any remainder after lawful deductions, and notify all tenants in writing of such transfer and of the transferee’s name and address. 16.1.3. Other Prorations. Water and sewer charges, propane, interest on continuing loan and all other items customarily prorated at closing 16.1.4. Final Settlement. Unless otherwise specified in Additional Provisions, these prorations are final. 16.2. Association Assessments. Current regular Association assessments and dues (Association Assessments) paid in advance will be credited to Seller at Closing. Cash reserves held out of the regular Association Assessments for deferred maintenance by the Association will not be credited to Seller except as may be otherwise provided by the Governing Documents. Buyer acknowledges that Buyer may be obligated CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 17 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC to pay the Association, at Closing, an amount for reserves or working capital. Any special assessment assessed prior to Closing Date by the Association will be the obligation of Buyer Seller. Except however, any special assessment by the Association for improvements that have been installed as of the date of Buyer’s signature hereon, whether assessed prior to or after Closing, will be the obligation of Seller unless otherwise specified in Additional Provisions. Seller represents there are no unpaid regular or special assessments against the Property except the current regular assessments and // none Association Assessments are subject to change as provided in the Governing Documents. 17. POSSESSION. Possession of the Property and Inclusions will be delivered to Buyer on Possession Date at Possession Time, subject to the Leases as set forth in § 10.6.1.1. If Seller, after Closing occurs, fails to deliver possession as specified, Seller will be subject to eviction and will be additionally liable to Buyer, notwithstanding § 20.2. (If Seller is in Default), for payment of $ 500 per day (or any part of a day notwithstanding § 3.3., Day) from Possession Date and Possession Time until possession is delivered. 18. CAUSES OF LOSS, INSURANCE; DAMAGE TO INCLUSIONS AND SERVICES; CONDEMNATION; AND WALK-THROUGH. Except as otherwise provided in this Contract, the Property, Inclusions or both will be delivered in the condition existing as of the date of this Contract, ordinary wear and tear excepted. 18.1. Causes of Loss, Insurance. In the event the Property or Inclusions are damaged by fire, other perils or causes of loss prior to Closing (Property Damage) in an amount of not more than ten percent of the total Purchase Price and if the repair of the damage will be paid by insurance (other than the deductible to be paid by Seller), then Seller, upon receipt of the insurance proceeds, will use Seller’s reasonable efforts to repair the Property before Closing Date. Buyer has the Right to Terminate under § 24.1., on or before Closing Date, if the Property is not repaired before Closing Date, or if the damage exceeds such sum. Should Buyer elect to carry out this Contract despite such Property Damage, Buyer is entitled to a credit at Closing for all insurance proceeds that were received by Seller (but not the Association, if any) resulting from damage to the Property and Inclusions, plus the amount of any deductible provided for in the insurance policy. This credit may not exceed the Purchase Price. In the event Seller has not received the insurance proceeds prior to Closing, the parties may agree to extend the Closing Date to have the Property repaired prior to Closing or, at the option of Buyer, (1) Seller must assign to Buyer the right to the proceeds at Closing, if acceptable to Seller’s insurance company and Buyer’s lender; or (2) the parties may enter into a written agreement prepared by the parties or their attorney requiring the Seller to escrow at Closing from Seller’s sale proceeds the amount Seller has received and will receive due to such damage, not exceeding the total Purchase Price, plus the amount of any deductible that applies to the insurance claim. 18.2. Damage, Inclusions and Services. Should any Inclusion or service (including utilities and communication services), system, component or fixture of the Property (collectively Service) (e.g., heating or plumbing), fail or be damaged between the date of this Contract and Closing or possession, whichever is earlier, then Seller is liable for the repair or replacement of such Inclusion or Service with a unit of similar size, age and quality, or an equivalent credit, but only to the extent that the maintenance or replacement of such Inclusion or Service is not the responsibility of the Association, if any, less any insurance proceeds received by Buyer covering such repair or replacement. If the failed or damaged Inclusion or Service is not repaired or replaced on or before Closing or possession, whichever is earlier, Buyer has the Right to Terminate under § 24.1., on or before Closing Date, or, at the option of Buyer, Buyer is entitled to a credit at Closing for the repair or replacement of such Inclusion or Service. Such credit must not exceed the Purchase Price. If Buyer receives such a credit, Seller’s right for any claim against the Association, if any, will survive Closing. 18.3. Condemnation. In the event Seller receives actual notice prior to Closing that a pending condemnation action may result in a taking of all or part of the Property or Inclusions, Seller must promptly notify Buyer, in writing, of such condemnation action. Buyer has the Right to Terminate under § 24.1., on or CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 18 of 24 General Provisions Initials CTMeContracts.com - ©2024 MRI Software LLC before Closing Date, based on such condemnation action, in Buyer’s sole subjective discretion. Should Buyer elect to consummate this Contract despite such diminution of value to the Property and Inclusions, Buyer is entitled to a credit at Closing for all condemnation proceeds awarded to Seller for the diminution in the value of the Property or Inclusions, but such credit will not include relocation benefits or expenses or exceed the Purchase Price. 18.4. Walk-Through and Verification of Condition. Buyer, upon reasonable notice, has the right to walk through the Property prior to Closing to verify that the physical condition of the Property and Inclusions complies with this Contract. 19. RECOMMENDATION OF LEGAL AND TAX COUNSEL. By signing this Contract, Buyer and Seller acknowledge that their respective broker has advised that this Contract has important legal consequences and has recommended: (1) legal examination of title; (2) consultation with legal and tax or other counsel before signing this Contract as this Contract may have important legal and tax implications; (3) to consult with their own attorney if Water Rights, Mineral Rights or Leased Items are included or excluded in the sale; and (4) to consult with legal counsel if there are other matters in this transaction for which legal counsel should be engaged and consulted. Such consultations must be done timely as this Contract has strict time limits, including deadlines, that must be complied with. 20. TIME OF ESSENCE, DEFAULT AND REMEDIES. Time is of the essence for all dates and deadlines in this Contract. This means that all dates and deadlines are strict and absolute. If any payment due, including Earnest Money, is not paid, honored or tendered when due, or if any obligation is not performed timely as provided in this Contract or waived, the non-defaulting party has the following remedies: 20.1. If Buyer is in Default: 20.1.1. Specific Performance. Seller may elect to cancel this Contract and all Earnest Money (whether or not paid by Buyer) will be paid to Seller and retained by Seller. It is agreed that the Earnest Money is not a penalty, and the parties agree the amount is fair and reasonable. Seller may recover such additional damages as may be proper. Alternatively, Seller may elect to treat this Contract as being in full force and effect and Seller has the right to specific performance or damages, or both. 20.1.2. Liquidated Damages, Applicable. This § 20.1.2. applies unless the box in § 20.1.1. is checked. Seller may cancel this Contract. All Earnest Money (whether or not paid by Buyer) will be paid to Seller and retained by Seller. It is agreed that the Earnest Money amount specified in § 4.1. is LIQUIDATED DAMAGES and not a penalty, which amount the parties agree is fair and reasonable and (except as provided in §§ 10.4. and 21), such amount is SELLER’S ONLY REMEDY for Buyer’s failure to perform the obligations of this Contract. Seller expressly waives the remedies of specific performance and additional damages. 20.2. If Seller is in Default: 20.2.1. Specific Performance, Damages or Both. Buyer may elect to treat this Contract as canceled, in which case all Earnest Money received hereunder will be returned to Buyer and Buyer may recover such damages as may be proper. Alternatively, in addition to the per diem in § 17 (Possession) for failure of Seller to timely deliver possession of the Property after Closing occurs, Buyer may elect to treat this Contract as being in full force and effect and Buyer has the right to specific performance or damages, or both. 20.2.2. Seller’s Failure to Perform. In the event Seller fails to perform Seller’s obligations under this Contract, to include, but not limited to, failure to timely disclose Association violations known by Seller, failure to perform any replacements or repairs required under this Contract or failure to timely disclose any known adverse material facts, Seller remains liable for any such failures to perform under this Contract after Closing. Buyer’s rights to pursue the Seller for Seller’s failure to perform under this Contract are reserved and survive Closing. 21. LEGAL FEES, COST AND EXPENSES. Anything to the contrary herein notwithstanding, in the event of any arbitration or litigation relating to this Contract, prior to or after Closing Date, the arbitrator or court must award to the prevailing party all reasonable costs and expenses, including attorney fees, legal fees and expenses. CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 19 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC 22. MEDIATION. If a dispute arises relating to this Contract (whether prior to or after Closing) and is not resolved, the parties must first proceed, in good faith, to mediation. Mediation is a process in which the parties meet with an impartial person who helps to resolve the dispute informally and confidentially. Mediators cannot impose binding decisions. Before any mediated settlement is binding, the parties to the dispute must agree to the settlement, in writing. The parties will jointly appoint an acceptable mediator and will share equally in the cost of such mediation. The obligation to mediate, unless otherwise agreed, will terminate if the entire dispute is not resolved within thirty days of the date written notice requesting mediation is delivered by one party to the other at that party’s last known address (physical or electronic as provided in § 26). Nothing in this Section prohibits either party from filing a lawsuit and recording a lis pendens affecting the Property, before or after the date of written notice requesting mediation. This Section will not alter any date in this Contract, unless otherwise agreed. 23. EARNEST MONEY DISPUTE. Except as otherwise provided herein, Earnest Money Holder must release the Earnest Money following receipt of written mutual instructions, signed by both Buyer and Seller. In the event of any controversy regarding the Earnest Money, Earnest Money Holder is not required to release the Earnest Money. Earnest Money Holder, in its sole subjective discretion, has several options: (1) wait for any proceeding between Buyer and Seller; (2) interplead all parties and deposit Earnest Money into a court of competent jurisdiction (Earnest Money Holder is entitled to recover court costs and reasonable attorney and legal fees incurred with such action); or (3) provide notice to Buyer and Seller that unless Earnest Money Holder receives a copy of the Summons and Complaint or Claim (between Buyer and Seller) containing the case number of the lawsuit (Lawsuit) within one hundred twenty days of Earnest Money Holder’s notice to the parties, Earnest Money Holder is authorized to return the Earnest Money to Buyer. In the event Earnest Money Holder does receive a copy of the Lawsuit and has not interpled the monies at the time of any Order, Earnest Money Holder must disburse the Earnest Money pursuant to the Order of the Court. The parties reaffirm the obligation of § 22 (Mediation). This Section will survive cancellation or termination of this Contract. 24. TERMINATION. 24.1. Right to Terminate. If a party has a right to terminate, as provided in this Contract (Right to Terminate), the termination is effective upon the other party’s receipt of a written notice to terminate (Notice to Terminate), provided such written notice was received on or before the applicable deadline specified in this Contract. If the Notice to Terminate is not received on or before the specified deadline, the party with the Right to Terminate accepts the specified matter, document or condition as satisfactory and waives the Right to Terminate under such provision. 24.2. Effect of Termination. In the event this Contract is terminated, and all Earnest Money received hereunder is timely returned to Buyer, the parties are relieved of all obligations hereunder, subject to §§ 10.4. and 21. 25. ENTIRE AGREEMENT, MODIFICATION, SURVIVAL; SUCCESSORS. This Contract, its exhibits and specified addenda, constitute the entire agreement between the parties relating to the subject hereof and any prior agreements pertaining thereto, whether oral or written, have been merged and integrated into this Contract. No subsequent modification of any of the terms of this Contract is valid, binding upon the parties, or enforceable unless made in writing and signed by the parties. Any right or obligation in this Contract that, by its terms, exists or is intended to be performed after termination or Closing survives the same. Any successor to a party receives the predecessor’s benefits and obligations of this Contract. 26. NOTICE, DELIVERY AND CHOICE OF LAW. 26.1. Physical Delivery and Notice. Any document or notice to Buyer or Seller must be in writing, except as provided in § 26.2. and is effective when physically received by such party, any individual named in this Contract to receive documents or notices for such party, Broker, or Brokerage Firm of Broker working with such party (except any notice or delivery after Closing must be received by the party, not Broker or CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 20 of 24 Initials CTMeContracts.com - ©2024 MRI Software LLC Brokerage Firm). 26.2. Electronic Notice. As an alternative to physical delivery, any notice may be delivered in electronic form to Buyer or Seller, any individual named in this Contract to receive documents or notices for such party, Broker or Brokerage Firm of Broker working with such party (except any notice or delivery after Closing, cancellation or Termination must be received by the party, not Broker or Brokerage Firm) at the electronic address of the recipient by facsimile, email or TBD. 26.3. Electronic Delivery. Electronic Delivery of documents and notice may be delivered by: (1) email at the email address of the recipient, (2) a link or access to a website or server provided the recipient receives the information necessary to access the documents, or (3) facsimile at the facsimile number (Fax No.) of the recipient. 26.4. Choice of Law. This Contract and all disputes arising hereunder are governed by and construed in accordance with the laws of the State of Colorado that would be applicable to Colorado residents who sign a contract in Colorado for real property located in Colorado. 27. NOTICE OF ACCEPTANCE, COUNTERPARTS. This proposal will expire unless accepted in writing, by Buyer and Seller, as evidenced by their signatures below and the offering party receives notice of such acceptance pursuant to § 26 on or before Acceptance Deadline Date and Acceptance Deadline Time. If accepted, this document will become a contract between Seller and Buyer. A copy of this Contract may be executed by each party, separately and when each party has executed a copy thereof, such copies taken together are deemed to be a full and complete contract between the parties. 28. GOOD FAITH. Buyer and Seller acknowledge that each party has an obligation to act in good faith including, but not limited to, exercising the rights and obligations set forth in the provisions of Financing Conditions and Obligations; Title Insurance, Record Title and Off-Record Title; New ILC, New Survey; and Property Disclosure, Inspection, Indemnity, Insurability and Due Diligence. 29. ADDITIONAL PROVISIONS. (The following additional provisions have not been approved by the Colorado Real Estate Commission.) 29.1 Closing instructions shall include no requirement of indemnification by the Town or other provision the Town determines to be inconsistent with Colorado law pertaining to municipalities. 29.2 The Town requires a general warranty deed, not subject to statutory exceptions, but it may be subject to matters of record. 29.3 Notwithstanding anything in this Contract to the contrary, the Town makes no promise of indemnification. 29.4 The Town may extend any deadline in section 3.1 of this Contract so as to provide time to satisfy its internal requirements, so long as no deadline is extended more than once or for a period exceeding an additional 21 days. Any such extension shall be made only by written notice within 3 days of the deadline. Further extensions require mutual consent of the parties. 29.5 The Town is tax-exempt and in no case shall be responsible to pay taxes incurred by Seller. Seller shall pay all such taxes incurred prior to Closing. 29.6 An objection by the Town based on suitability of the Property for its intended use as a childcare center may be included by the Town as an objection either to environmental conditions or to ADA-related conditions, as both are described in section 10.6.4. Seller is not obligated to provide any resolution and Buyer may terminate within the deadlines in this Contract with regards to ADA or environmental conditions. 29.7 Seller shall select a title company with an office in Estes Park, and the parties will split the title costs. CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 21 of 24 ADDITIONAL PROVISIONS AND ATTACHMENTS Initials CTMeContracts.com - ©2024 MRI Software LLC Signatures 30. OTHER DOCUMENTS. 30.1. Documents Part of Contract. The following documents are a part of this Contract: none 30.2. Documents Not Part of Contract. The following documents have been provided but are not a part of this Contract: none Date: Buyer: Town of Estes Park By: Gary Hall, Mayor ATTEST: ________________________________ Town Clerk APPROVED AS TO FORM: ________________________________ Town Attorney [NOTE: If this offer is being countered or rejected, do not sign this document.] Date: Seller: WE BE TCB LLC By: Brett Spillman State of ) ) ss County of ) The foregoing instrument was acknowledged before me by , as of the Town of Estes Park, a Colorado municipal corporation, on behalf of the corporation, this day of , 2024. Witness my hand and official Seal. My Commission expires . Notary Public CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 22 of 24 Brett Spillman 08/13/2024 Initials CTMeContracts.com - ©2024 MRI Software LLC BROKER’S ACKNOWLEDGMENTS AND COMPENSATION DISCLOSURE. A. Broker Working With Buyer Broker Does Does Not acknowledge receipt of Earnest Money deposit. Broker agrees that if Brokerage Firm is the Earnest Money Holder and, except as provided in § 23, if the Earnest Money has not already been returned following receipt of a Notice to Terminate or other written notice of termination, Earnest Money Holder will release the Earnest Money as directed by the written mutual instructions. Such release of Earnest Money will be made within five days of Earnest Money Holder’s receipt of the executed written mutual instructions, provided the Earnest Money check has cleared. Broker is working with Buyer as a Buyer’s Agent Transaction-Broker in this transaction. Customer. Broker has no brokerage relationship with Buyer. See § B for Broker’s brokerage relationship with Seller. Brokerage Firm’s compensation or commission is to be paid by Listing Brokerage Firm Buyer Other . This Broker’s Acknowledgements and Compensation Disclosure is for disclosure purposes only and does NOT create any claim for compensation. Any compensation agreement between the brokerage firms must be entered into separately and apart from this provision. Brokerage Firm’s Name: NORTHPEAK Commercial Advisors Brokerage Firm’s License #: 100086407 Date: Broker’s Name: Kevin Calame & Matt Lewallen Broker’s License #: Address: 1720 S Bellaire St. Suite 701 Denver, CO 80222 Phone No.: 720-738-1949 Fax No.: 720-738-1950 Email Address: clctm@northpeakcre.com B. Broker Working with Seller Broker Does Does Not acknowledge receipt of Earnest Money deposit. Broker agrees that if Brokerage Firm is the Earnest Money Holder and, except as provided in § 23, if the Earnest Money has not already been returned following receipt of a Notice to Terminate or other written notice of termination, Earnest CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 23 of 24 END OF CONTRACT TO BUY AND SELL REAL ESTATE Initials CTMeContracts.com - ©2024 MRI Software LLC Money Holder will release the Earnest Money as directed by the written mutual instructions. Such release of Earnest Money will be made within five days of Earnest Money Holder’s receipt of the executed written mutual instructions, provided the Earnest Money check has cleared. Broker is working with Seller as a Seller’s Agent Transaction-Broker in this transaction. Customer. Broker has no brokerage relationship with Seller. See § A for Broker’s brokerage relationship with Buyer. Brokerage Firm’s compensation or commission is to be paid by Seller Buyer Other . This Broker’s Acknowledgements and Compensation Disclosure is for disclosure purposes only and does NOT create any claim for compensation. Any compensation agreement between the brokerage firms must be entered into separately and apart from this provision. Brokerage Firm’s Name: Brokerage Firm’s License #: Broker’s Signature Date: Broker’s Name: Broker’s License #: Address: , Phone No.: Fax No.: Email Address: CBS3-6-23. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) Page 24 of 24 DRM Real Estate Advisors, LLC Consulting, Research and Valuation A CREDIBLE REAL PROPERTY APPRAISAL PRESENTED IN AN APPRAISAL REPORT FORMAT Existing “Mountain Top Preschool” Daycare Property 1250 Woodstock Drive Estes Park, Larimer County, Colorado PREPARED FOR Carlie Speedlin Bangs Housing & Childcare Manager Town of Estes Park PO Box 1200 Estes Park, Colorado 80517 EFFECTIVE DATE Market Value “As-Is”: June 26, 2024 PREPARED BY DRM Real Estate Advisors LLC Consulting, Research & Valuation P.O. Box 99 Windsor, Colorado 80550 File No. 24-123 ATTACHMENT 3 DRM Real Estate Advisors, LLC Consulting, Research and Valuation P.O. Box 99 · Windsor, Colorado 80550 Phone (970) 674-1313 ∙ Fax (970) 236-9840 July 3, 2024 Carlie Speedlin Bangs Housing & Childcare Manager Town of Estes Park PO Box 1200 Estes Park, Colorado 80517 Re: Existing “Mountain Top Preschool and Childcare” Daycare Property 1250 Woodstock Drive Estes Park, Larimer County, Colorado Dear Carlie Speedlin Bangs, As you requested, I have performed an inspection and analysis of the above-referenced property. I have performed a real property appraisal of the subject property and communicated my findings to you in the following Appraisal Report format. The purpose of the appraisal is to estimate Market Value of the subject property in “As Is” condition, assuming Fee Simple Estate. The Intended Users of the report are Town of Estes Park employees/board members/consultants including Carlie Speedlin Bangs. I understand the Intended Use of the appraisal is to aid/support decisions related to potential purchase of the subject property for the benefit of Town of Estes Park—no other use/users are intended. The Effective Date of this appraisal is June 26, 2024, the date of last physical inspection. As required by USPAP, we disclose that we have not performed appraisal services on the subject property in the last 3 years. However, we did appraise it back in January 2018. The subject is the “Mountain Top Preschool and Child Care” daycare property that consists of a one-story daycare building located on a 0.87-acre site on Woodstock Drive in southeast Estes Park. The building is average-quality wood frame construction with wood siding and an asphalt- shingled gable roof. The building contains 1,870 square feet, was built in 1985 and is in average-good condition. Site improvements include 9 asphalt-paved parking spaces on the west side and a fenced playground on the east side of the building. The relatively large site (for such a small building) has approximately 0.40-acres that is open, unused space. Since the existing improvements are clustered in the northwest quadrant of the site, it arguably has Excess Land that we accord some extra contributory value. See explanation in Subject Site Section (Page 28). The property’s sales history helps inform value. In January 2018, Susan Seppala Hoyt sold the property to J & J Enterprises, Inc. (then-tenant John Ayotte) for $370,000. We understand Ayotte then sold the business entity to current tenant Christy Delorme as Mountaintop Childcare Inc. in July 2018. After issues with representations in that business sale and impacts from a federal tax lien (Reception No. 20180074426), Ayotte then sold the Real Estate for $469,500 to WeBe TCB LLC in October 2019, subject to the current lease with Mountaintop Childcare Inc. The property is encumbered by a 7-year lease contract that started in November 2019 and has Base Rent that escalates 2.5% annually and includes NNN (net) terms. That current lease runs through October 2026 (28 more months) plus the Tenant also has the Option to Extend another 36 Months (to 2029), so it is an important factor in valuation. We use an Income Approach to value the property’s current income stream, based on the average rent remaining over the next 28 months. We use a Sales Comparison Approach as a Test of Reasonableness, but comparable sales are very limited in Estes Park and the Front Range sales are far larger. Lastly, also as a Test of Reasonableness, we perform a Cost Approach which measures the value of the underlying site plus contributory value of the existing building. Ultimately, we reconcile to the contract price as being reasonably representative of Market Value. The three analyses point to a wide range of value indications, which we then reconcile to a reasonable final value estimate. This appraisal is intended to comply with the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP). The appraisal is subject to the Certifications and Limiting Conditions attached. This report contains 93 pages plus addenda. Based on the assumptions and analysis herein, the estimated Market Value of the subject property (1,870-Square Foot Daycare Property on 0.87-Acre Site) in “As Is” condition in Fee Simple Estate as of June 26, 2024, is SIX HUNDRED THOUSAND DOLLARS $600,000 Respectfully submitted, DRM REAL ESTATE ADVISORS, LLC Christopher D. Ruff Principal State of Colorado Certified General Appraiser No. CG1316795 (12/31/2024) Table of Contents DRM Real Estate Advisors, LLC Consulting, Research & Valuation TABLE OF CONTENTS SUMMARY OF SALIENT FACTS ............................................................................................. 1 CERTIFICATION OF VALUE .................................................................................................... 4 ASSUMPTIONS AND LIMITING CONDITIONS .................................................................... 5 APPRAISAL ASSIGNMENT ...................................................................................................... 7 REGIONAL MAP ...................................................................................................................... 11 REGIONAL ANALYSIS ........................................................................................................ 12 NEIGHBORHOOD MAP ........................................................................................................... 18 SUBJECT NEIGHBORHOOD ANALYSIS ........................................................................... 19 SUBJECT PROPERTY .............................................................................................................. 23 SUBJECT SITE ....................................................................................................................... 23 ZONING MAP......................................................................................................................... 26 SUBJECT IMPROVEMENTS ................................................................................................ 29 SUBJECT PROPERTY PHOTOGRAPHS ............................................................................. 30 HIGHEST AND BEST USE ...................................................................................................... 36 CURRENT ECONOMIC CONDITIONS .................................................................................. 37 APPROACHES TO VALUE ...................................................................................................... 56 INCOME APPROACH (EXISTING CONTRACT LEASE) .................................................... 57 CONTRACT RENT DISCUSSION ........................................................................................ 57 CAPITALIZATION RATE DISCUSSION ............................................................................ 60 INCOME AND EXPENSE PRO FORMA.............................................................................. 65 SALES COMPARISON APPROACH (TEST OF REASONABLENESS) .............................. 66 SUMMARY COMPARABLE ESTES PARK & COMPETING LOCATION SALES ......... 67 COMPARABLE SALES MAP--ESTES PARK ..................................................................... 73 COMPARABLE SALES MAP--ALL ..................................................................................... 74 COMPARABLE SALES ADJUSTMENT TABLE ................................................................ 79 APPRECIATION RATES APPLIED TO 2019 PURCHASE PRICE .................................... 80 COST APPROACH (TEST OF REASONABLENESS) ........................................................... 81 COMPARABLE COMMERCIAL LAND SALES MAP ....................................................... 82 COMPARABLE COMMERCIAL LAND SALES TABLE ................................................... 87 MARSHALL VALUATION COST ESTIMATE ................................................................... 91 RECONCILIATION ................................................................................................................... 92 ADDENDUM ENGAGEMENT LETTER/EMAIL LARIMER COUNTY INFORMATION LEASE CONTRACT EXCERPTS QUALIFICATIONS OF THE APPRAISER Summary of Salient Facts DRM Real Estate Advisors, LLC Consulting, Research & Valuation 1 SUMMARY OF SALIENT FACTS CURRENT OWNERSHIP: WeBe TCB LLC PROSPECTIVE OWNER: Town of Estes Park PURPOSE: Estimate the Market Value of the subject property in "As Is" condition as of the Effective Date of this appraisal. INTENDED USE: The Intended Users of the report are Town of Estes Park employees/board members/consultants including Carlie Speedlin Bangs. I understand the Intended Use of the appraisal is to aid/support decisions related to potential purchase of the subject property for the benefit of Town of Estes Park—no other use/users are intended. SCOPE: This Real Property Appraisal is presented in an Appraisal Report format and will use the Income, Sales Comparison and Cost Approaches to Value. LOCATION: 1250 Woodstock Drive, Town of Estes Park, Larimer County, Colorado. LEGAL DESCRIPTION: Lot 14, Deville Subdivision, Town of Estes Park, Larimer County, Colorado. PROPERTY TYPE: Daycare Property EFFECTIVE DATE: June 26, 2024. PROPERTY RIGHTS: Fee Simple Estate. Technically, the property is currently owned in Leased Fee Estate as it is encumbered by a lease contract that runs through October 31st 2026 (28 months), and any buyer of the property would be required to recognize the existence of that encumbrance. Arguably, we consider the current rent rate to reasonably represent Market Rent, so there is no appreciable difference between Leased Fee and Fee Simple. SITE DESCRIPTION: The site is located on the east side of Woodstock Drive in a secondary, low-visibility location. It is a nearly rectangular shaped site that contains 38,028 square feet or 0.87-acres, according to the Larimer County Assessor’s Office. The site is slightly sloping down to the northwest and northeast. The site has an asphalt-paved parking area (9 spaces) and driveway. There is a fenced play area adjacent behind the building with mature trees, but the rest of the site is covered in natural vegetation. The site is relatively large site for such a small building—it has approximately 0.40-acres that are open, unused space. The existing improvements are clustered in the northwest quadrant of the site, so it has Excess Land that we accord some extra contributory value. Summary of Salient Facts DRM Real Estate Advisors, LLC Consulting, Research & Valuation 2 IMPROVEMENTS DESCRIPTION: Improvements consist of an average quality single-story wood frame building with wood siding and a gable roof with asphalt shingles. Per Assessor records, it was built in 1985 and has a Gross Building Area of 1,870 square feet. The interior of the building consists of an open bay classroom space, an office, two rest rooms, a full kitchen with an eating area, and a smaller classroom which can be closed off with portable walls. Finishes include newer laminated wood flooring, painted drywall walls, 2x4 acoustic tile ceilings with fluorescent troffer light fixtures. The subject has forced air heat and newer central air conditioning. ENVIRONMENTAL HAZARDS: None observed. ZONING: “CO” Commercial Outlying FLOOD HAZARD: The property is not located in a flood plain. HIGHEST AND BEST USE: If Vacant, the Highest and Best Use of the site would be for development with a secondary commercial usage. As Improved, one of the Highest and Best Uses of the property is for a daycare. However, the building could also be converted into an office or secondary retail usage as a potential alternative Highest and Best Use of the property as it exists. MARKET TIME: < 1 Year. VALUE CONCLUSIONS: “As-Is” Cost Approach: $605,000 Site Value 38,028 SF @ $10.75/SF $409,000 Income Approach: $590,000 Estimate Net Op Income $40,832 Cap Rate at 6.90%: $592,000 Cap Rate at 7.30%: $559,000 Sales Comparison Approach: $580,000 Analysis $300/SF on 1,870 SF $561,000 Analysis $311/SF on 1,870 SF $582,000 Appreciation on 2019 Sale of $469,500: $590,000 3% Annualized Appreciation: $539,000 4% Annualized Appreciation: $569,000 5% Annualized Appreciation: $590,000 6% Annualized Appreciation: $616,000 Market Value “As-Is”: $600,000 Summary of Salient Facts DRM Real Estate Advisors, LLC Consulting, Research & Valuation 3 Extraordinary Assumptions and Hypothetical Conditions An Extraordinary Assumption is “an assumption, directly related to a specific assignment, as of the Effective Date of the assignment results, which, if found to be false, could alter the appraiser’s opinion or conclusions. Extraordinary Assumptions presume as fact otherwise uncertain information about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends, or about the integrity of data used in an analysis (USPAP 2020/2023). This report is subject to the Extraordinary Assumption that the Gross Building Area is 1,870 square feet as per the Assessor records and the lease document and that the Larimer County Assessor records are correct as to the 0.87-acre parcel size. Should either of the areas presented herein be incorrect, the appraiser reserves the right to reconsider the value analysis herein. This report is also subject to the Extraordinary Assumption that the subject is in sound structural condition and that all of the building systems and components are safe and operational. We assume that the roof is serviceable and does not leak. We did not inspect the roof. Hypothetical Conditions A Hypothetical Condition is “a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the Effective Date of the assignment results, but is supposed for the purpose of analysis.” Hypothetical Conditions are contrary to known facts about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends, or about the integrity of data used in an analysis (USPAP 2020/2023). This report is not subject to any Hypothetical Conditions. Certification of Value DRM Real Estate Advisors, LLC Consulting, Research & Valuation 4 CERTIFICATION OF VALUE We certify that, to the best of our knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is our personal, impartial, and unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. 4. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 5. Our engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. 7. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. 8. Christopher D. Ruff made a personal inspection, to the extent described in the report, of the property that is the subject of this report. 9. No one provided significant professional assistance to the persons signing this report. 10. As of the date of this report, Christopher D. Ruff has completed the requirements of the continuing education program of the State of Colorado. 11. As required by USPAP, I disclose that I have not performed any services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three- year period preceding acceptance of this assignment. Christopher D. Ruff Principal State of Colorado Certified General Appraiser No. CG1316795 12/31/2024 Assumptions and Limiting Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 5 ASSUMPTIONS AND LIMITING CONDITIONS The value estimate provided in this appraisal report is subject to the following assumptions and limiting conditions and to other such specific and limiting conditions as may be set forth by the Appraiser/s in this report. 1. Any user of this report agrees to the attached limiting conditions. 2. This is an Appraisal Report that is intended to comply with the reporting requirements set forth under the 2020/2023 Edition of the Uniform Standards of Professional Practice. As such, it should include discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser’s opinion of value sufficient to satisfy the needs of the client and for the intended use stated in this report. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser’s file. The appraiser/s are not responsible for the unauthorized use of this report. 3. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report. 4. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in this report. 5. Responsible ownership and competent management are assumed unless otherwise stated in this report. 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. The Appraiser/s did not perform a survey of the property. 7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging engineering studies that may be required to discover them. 8. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in this report. 9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined and considered in this report. 10. It is assumed that all required licenses, certificates of occupancy or other legislative or administrative authority from any local, state, or national government, or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based. 11. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless otherwise stated in this report. 12. The Appraiser/s are not required to give testimony, appear in court, or give further consultation because of having made the appraisal with reference to the property in question, unless arrangements have been previously made therefore. 13. Any distribution of the valuation in this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are invalid if so used. 14. The Appraiser/s are not qualified to detect hazardous waste and/or toxic materials. Any comment by the Appraiser/s that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require Assumptions and Limiting Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 6 investigation by a qualified expert in the field of environmental assessment. The Appraiser/s have no knowledge of the existence of such materials on or in the property; however, they are not qualified to detect such substances. The presence of potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. 15. Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act (ADA). The presence of architectural and/or communication barriers that are structural in nature and would restrict access by disabled individuals may adversely affect the property’s value, marketability, and/or utility. 16. Possession of this report or a copy thereof does not imply right of publication nor use for any purpose by any person or entity, other than the person to whom it is addressed, unless specific written consent for such use is obtained from the Appraiser/s. The Client or Assigns shall indemnify the Appraiser/s against third party law suits. 17. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales or any other media, without the written consent and approval of the author, particularly as to the valuation conclusions, the identity of the Appraiser or firm with which he is connected, or any references to the Appraisal Institute. 18. On all appraisals subject to satisfactory completion, repairs, or alterations, the appraisal report and value conclusion are contingent upon completion of the improvements in a good workmanlike manner and are contingent upon a completion inspection by the Appraiser/s. 19. Satisfactory road access and maintenance agreements, condominium declarations, and other pertinent agreements are assumed to be recorded. 20. The Appraiser/s assume that financing, as discussed in the report, is available for potential purchasers. 21. It should be understood that this is an Opinion of Value, based upon the data reasonably available to the Appraiser/s at the time of the appraisal, not a guarantee or warranty of value. 22. The limit of liability shall be no more than the remuneration received. The Appraisal Assignment DRM Real Estate Advisors, LLC Consulting, Research & Valuation 7 APPRAISAL ASSIGNMENT The subject is the “Mountain Top Preschool and Child Care” daycare property that consists of an average-quality one-story daycare building of 1,870 square feet that is located on a 0.87-acre site on Woodstock Drive in southeast Estes Park. The building is wood frame construction with wood siding and an asphalt-shingled gable roof. The building was built in 1985 and is in average-to-good condition. The property is encumbered by a 7-year lease contract that started in November 2019 and has Base Rent that escalates 2.5% annually and includes NNN (net) terms. That current lease runs through October 2026 (28 more months), so it is an important factor in valuation. We use an Income Approach to value the property’s current income stream, based on the average rent remaining over the next 28 months. We use a Sales Comparison Approach as a Test of Reasonableness, but comparable sales are very limited in Estes Park and the Front Range sales are far larger. Lastly, also as a Test of Reasonableness, we perform a Cost Approach which measures the value of the underlying site plus contributory value of the existing building. Ultimately, we reconcile to the contract price as being reasonably representative of Market Value. The three analyses point to a wide range of value indications, which we then reconcile to a reasonable final value estimate. MARKET VALUE DEFINITION The purpose of this appraisal is to estimate "Market Value" of the subject in "As Is" condition. "Market Value" as used in this report is defined as: "The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a. Buyer and seller are typically motivated; b. Both parties are well informed or well advised, and acting in what they consider their own best interests; c. A reasonable time is allowed for exposure in the open market; d. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and e. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."1 1 The Dictionary of Real Estate Appraisal, 3rd Ed., 1993, Appraisal Institute, pages 222-223. The Appraisal Assignment DRM Real Estate Advisors, LLC Consulting, Research & Valuation 8 “As Is” Premise, as used in this report is defined as: Market Value “as is” on appraisal date means an estimate of the market value of a property in the condition observed upon inspection and as it physically and legally exists without hypothetical conditions, assumptions, or qualifications, as of the date the appraisal is prepared. This requires that the property will be valued according to its highest and best use. However, it does not prohibit valuation based upon anticipated future events such as leasing of vacant space, demolition of obsolete buildings, etc.”2 PROPERTY RIGHTS The subject property is appraised in "Fee Simple Estate," subject to typical mortgage financing. No separate consideration has been given to fractional interests, interests of tenants in possession, or mortgage holders. Technically, the property is currently owned in Leased Fee Estate as it is encumbered by a lease contract that runs through October 31st 2026 (28 months), and any buyer of the property would be required to recognize the existence of that encumbrance. Arguably, we consider the current rent rate to reasonably represent Market Rent, so there is no appreciable difference between Leased Fee Estate and Fee Simple Estate. DEFINITIONS Definitions of pertinent terms taken from the Dictionary of Real Estate Appraisal, Fourth Edition (2000), published by the Appraisal Institute, are as follows: Fee Simple Estate Absolute ownership unencumbered by any other interest or estate; subject only to the limitations of eminent domain, escheat, police power, and taxation." Leased Fee Estate An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the Lessor (the leased fee owner) and the Lessee (leasehold estate) are specified by contract terms contained within the lease. Market Rent The rental income that a property would most probably command in the open market; indicated by the current rents paid and asked for comparable space as of the date of the appraisal. Value As -Is The value of specific ownership rights to an identified parcel of real estate as of the effective date of the appraisal; relates to what physically exists and is legally permissible and excludes all assumptions concerning hypothetical market conditions or possible rezoning. 2 Appraisal Policies and Practices of Insured Institutions and Service Corporations, Federal Home Loan Bank Board, Final Rule 12 CFR Parts 563 and 571, December 12, 1987. The Appraisal Assignment DRM Real Estate Advisors, LLC Consulting, Research & Valuation 9 EFFECTIVE DATE The Effective Date of this appraisal is June 26, 2024, the date of the last physical inspection of the property. OWNERSHIP AND THREE YEAR SALES HISTORY The property’s sales history helps inform value. According to Larimer County records, ownership is vested in WeBe TCB LLC. Until 2018, Larimer County records listed only two Quit Claim Deeds in 1993 and 2005 transferring ownership from Susan Hoyt to herself under different versions of her name. She had owned the property since at least 1993. In January 2018, Susan Seppala Hoyt sold the property to J & J Enterprises, Inc. (John and Jodi Ayotte) for $370,000. The Ayotte’s were then the current tenants and operators of Mountain Top Preschool. We understand Ayotte then sold the business entity to current tenant Christy Delorme as Mountaintop Childcare Inc. in July 2018. After issues with representations in that business sale and impacts from a federal tax lien (Reception No. 20180074426), Ayotte then sold the Real Estate for $469,500 to WeBe TCB LLC in October 2019. Simultaneously, a new 7-year lease (through October 2026) was created with Mountaintop Childcare Inc, and that lease is still in force functioning today. We understand the Town of Estes Park is interested in purchasing the property to ensure the childcare function is maintained in the Town. We found no evidence that the property is currently listed For Sale nor has been in the last three years. SCOPE OF THE ASSIGNMENT The scope of the appraisal is to develop a real property appraisal using the Income, Sales Comparison and Cost Approaches to Value. The valuation process will include: a. Obtaining County records on the subject property including zoning, physical information, tax information, and previous sales. b. An inspection of the subject property and discussion with tenant Christy Delorme. c. Search the county records, Multiple Listing Service, title company publications, and interviewing buyers, sellers and Realtors for comparable building sales. d. An analysis of the subject property and data collected. e. Processing data via the appropriate valuation techniques. f. The presentation attempts to be an Appraisal Report that should allow the reader to visualize the subject property and the comparables and to understand the appraiser's reasoning and value conclusion. The Appraisal Assignment DRM Real Estate Advisors, LLC Consulting, Research & Valuation 10 REPORT FORMAT All licensed appraisers in the United States are governed by the standards and requirements of USPAP—the Uniform Standards of Professional Appraisal Practice. For over 20+ years, USPAP and the appraisal world used three different reporting formats—a Restricted Use Report format (key characteristic—“state” information and conclusions) versus a Summary Report format (key characteristic—“summarize” information and conclusions) versus a Self-Contained Report format (key characteristic—“fully describe” information and conclusions). Although the terms were arguably vague, the market adapted to and learned the distinctions and customers/clients could order reports based on those differences and their perceived needs. However, the 2014/2015 USPAP effective January 1, 2014, prescribed only two reporting formats—a “Restricted Appraisal Report” format or an “Appraisal Report.” Now, a report is either the concise, condensed restricted format, or it is not. An “Appraisal Report” is intended to be similar to the former Summary Report, but USPAP requires that the appraisal report contains “sufficient information” to enable the intended users of the appraisal to understand the report properly. It is our belief that, knowledgeable of our clients’ needs, we have provided sufficient information and explanations in this report to fulfill that requirement. ENVIRONMENTAL HAZARDS The appraiser did not observe any hazardous materials (which may or may not be present on the property) on the subject property. The appraiser was not furnished any environmental study conducted on the subject property and is not aware of any environmental study being conducted on the property. The appraiser has not made a soil test or test of underground water. The appraiser is not qualified to detect hazardous substances and is beyond the scope of this appraisal. The presence of substances such as asbestos, urea-formaldehyde foam insulation, ground water contamination, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. AMERICANS WITH DISABILITIES ACT OF 1990 The Americans With Disabilities Act of 1990 became effective July 26, 1992. The impact of this bill will be far reaching with respect to commercial real estate. While the appraisers are not experts, the subject property appears to partially comply with general ADA standards even though it was built before such standards were imposed. The rest rooms have grab bars, but it is unknown if door widths are sufficient to allow wheelchair access. The subject and the comparables utilized in this appraisal may or may not have deficiencies with respect to this legislation. Until the implications of the act are better identified in the marketplace, the effect of ADA compliance on the market value of properties will be difficult to estimate. It may be several years before data exists to deal with the ADA impact on the market. Regional Analysis DRM Real Estate Advisors, LLC Consulting, Research & Valuation 11 REGIONAL MAP Regional Analysis DRM Real Estate Advisors, LLC Consulting, Research & Valuation 12 REGIONAL ANALYSIS In the appraisal of real estate, economic and demographic factors with the potential to impact property values must be explored. Factors influencing real property values may be categorized as environmental, social, governmental, and economic. The subject property is located in the Town of Estes Park, Larimer County, Colorado. Collectively, the combination of Weld and Larimer Counties is often referred to as “Northern Colorado,” although the two counties have fairly significant differences in population, business communities, and general interests. Regional Analysis DRM Real Estate Advisors, LLC Consulting, Research & Valuation 13 Today, many residents consider “Northern Colorado” as their home, with less significance paid to the particular city or town they actually reside in. A large percentage of the population does not work in the city in which they reside; for example, 48 percent of Loveland’s population works outside of Loveland, with 30 percent of Greeley’s population commuting and 17 percent of Fort Collins. For the smaller towns, the number of commuters can range from over 50 percent to nearly 95 percent. Businesses certainly consider Northern Colorado as a single entity. Weld County Weld County contains a total area of 4,107 square miles, of which 30 square miles is water. According to the US Census, its 2020 population was 328,981 people, an increase of 30.0% over the 2010 Census population of 252,825 people. Weld County is the second fastest growing county in Colorado over the last decade behind Douglas County. Weld County is Colorado’s leading producer of sugar beets, cattle, and grain, and ranks as the richest agricultural county in the United States east of the Rocky Mountains. It is quickly gaining prominence as a milk-producing county, with nearly 50% of the state’s cattle. The City of Greeley is the county seat for Weld County. Geographically, Greeley is located in the northeastern quadrant of Colorado. It is 50 miles north of Denver, the state capital, and 50 miles south of Cheyenne, the capital of Wyoming. It is situated on the high plains approximately 20 miles east of the Rocky Mountains. According to the US Census, the 2020 population of Greeley was 108,795, a 17.1% increase compared to the 2010 Census count of 92,889. New residential developments, both single- and multi-family, continue to be built in Greeley, so the population is expected to continue to increase. Major employers in the area, according to economic development agency Upstate Colorado, include: • JBS Swift & Company (World’s Largest Producer of Meat) • Leprino Foods (World’s Largest Producer of Mozzarella Cheese) • Banner Health North Colorado Medical Center • Hensel Phelps • Weld School District 6 & Weld County Government • State Farm Insurance Companies • State of Colorado, including University of Northern Colorado • City of Greeley Government • Noble Energy In Greeley, residential and commercial development continues at a steady pace. Downtown Greeley has seen renewed interest in renovation and repurposing of existing buildings as well as new construction—the $31-million-dollar DoubleTree by Hilton Greeley hotel and convention center opened in September 2017 and includes 14,000 square feet of conference space and a 147- room hotel. The $18-million-dollar Greeley City Center at 10th Street and 11th Avenue in downtown Greeley opened in late 2018 to serve as a new administrative municipal complex, consolidating several divisions including the City Council chambers. Most of the new activity has taken place on the west side of Greeley with new retail centers and residential subdivisions. The northeast corner of West 10th Street at 71st Avenue has seen Regional Analysis DRM Real Estate Advisors, LLC Consulting, Research & Valuation 14 commercial development in the addition of a Bank of Colorado branch, a tire store, car wash and a McDonald’s. On the southeast corner, the Northgate Village development includes a King Soopers Marketplace with a fuel station, UC Health Emergency Room facility, and Taco Bell. Adjacent to the east is the McCloskey subdivision which was largely constructed in 2011/2012 with two multi- tenant buildings, a car wash and a fast-food restaurant as well as a senior citizen apartment complex and the Twin Rivers apartments. A new 4-story, 110-room Residence Inn by Marriott opened in early 2018 on 28th Street where the Carmike Theatre once stood. Larimer County Larimer County has its eastern 10 to 15 miles of area on the high plains, but the bulk of the county extends well into the Rocky Mountains and contains a large portion of Rocky Mountain National Park. In 2010, Larimer County contained 299,630 people according to the US Census, and that population increased to 359,066 in the 2020 US Census, up approximately 19.8%. The City of Fort Collins is the county seat for Larimer County. Fort Collins’ 2020 Census population was 169,810, up roughly 17.9% from the 2010 Census population of 143,986 people. Like Greeley and surrounding areas, there has been a major surge in housing starts since 2013. Geographically, Fort Collins is located in the northeastern quadrant of Colorado. It is 62 miles north of metro Denver and 45 miles south of Cheyenne, the state capital of Wyoming. It is situated on the high plains adjacent to the Rocky Mountains. Unlike Weld County, Larimer County has only 6 other towns and cities besides Fort Collins. Loveland is situated just 8 miles south of Fort Collins and had a 2020 Census population of 76,378. Southeast of Fort Collins, Johnstown had a 2020 Census population of 17,303 and the remaining four towns each have approximately 10,000 people or less. Major employers in the Fort Collins/Loveland area include: • Colorado State University • Hewlett Packard Enterprise • Poudre School District • Poudre Valley Health Systems • Thompson R-2J School District • City of Fort Collins • Larimer County Government • Advanced Energy Industries • Woodward • Wal-Mart • Anheuser-Busch Recent development in Larimer County has included the massive $313-million-dollar redevelopment of the Foothills Mall in Fort Collins. The 77-acre site contains 620,000 square feet of retail space and is slated to include 402 residential apartments for rent when construction is complete. Tenants include Nordstrom Rack, Macy’s, J. Crew Mercantile, Sears, Vans and Victoria’s Secret, as well as over 12 restaurants. The mall is linked to the MAX Bus Rapid Transit Service via an underground walkway beneath Main Street. The MAX system was completed in Regional Analysis DRM Real Estate Advisors, LLC Consulting, Research & Valuation 15 2014 and links the South Transit Center, just south of Harmony Road, to the Downtown Transit Center just north of Laporte Avenue with 11 stops along the route. Colorado State University continues to expand with the new $254-million-dollar on-campus stadium between Lake and Pitkin Street. The stadium opened in September 2017 with a capacity of 41,000 people. Other CSU-related developments include the construction of student housing including the 665-bed State on Campus complex at College and Stuart, the $111-million-dollar renovation of the 1,000-bed Aggie Village complex, and the CSU Medical Center, a 113,000-square foot $59-million-dollar medical/education facility completed in Spring 2017. The Harmony Road corridor continues to expand to the east towards I-25. Harmony Commons, at Harmony and Lady Moon Drive, is a mixed-use development which will include offices, restaurants, retail, and a Fairfield Inn & Suites. A 366-unit apartment complex is just being completed in mid-2019 at the southwest corner of Harmony and Strauss Cabin Road, and there is a proposed shopping center at the southeast quadrant of the same roads. Johnstown’s 25/34 development at the southeast quadrant of I-25 and Highway 34 has seen explosive growth since 2014. The 100,000-square foot Liberty Arms Institute shooting range and the Gateway at 2534 Apartment property with 254 1-, 2- and 3-bedroom units were added in 2016, along with a Comfort Inn and Suites hotel. Three multi-tenant retail buildings have been added near the massive 260,000 square foot Scheel’s Sporting Goods building which opened in September 2017. Two additional multi-tenant retail buildings are also being built on the west side of the development. Education Educational opportunities in Northern Colorado are available throughout the area with Colorado State University and Front Range Community College located in Fort Collins and the University of Northern Colorado located in Greeley. Other opportunities include both Regis University and the University of Phoenix in Fort Collins. Aims Community College has locations in Loveland, Greeley, Windsor and Fort Lupton. Colorado State University (CSU) is a Carnegie Class I Research University offering more undergraduate programs than any other Colorado School. According to the CSU web site, current enrollment numbers at CSU are over 31,900. Meanwhile, University of Northern Colorado (UNC) located in Greeley offers a wide array of baccalaureate programs and master’s and doctoral degrees, with current enrollment numbers at UNC over 11,200 in 2017. Regional Analysis DRM Real Estate Advisors, LLC Consulting, Research & Valuation 16 Medical Health care in Northern Colorado is provided by two primary providers – UC Health (formerly Poudre Valley Health Systems) and Banner Health. In recent years, Kaiser Permanente has also entered the Northern Colorado health care market, but to a much lesser extent. UC Health currently has two primary locations in Fort Collins: The Poudre Valley Hospital campus at 1024 South Lemay Avenue and another campus at the corner of East Harmony Road and South Timberline Road. Additional Fort Collins facilities include Mountain Crest Behavioral Hospital Center and the new UC Health Emergency Room, both on Harmony Road between Timberline and Ziegler. The Poudre Valley Hospital is 262-bed full-service hospital with an ER which saw over 60,000 visitors in 2016. The Harmony Campus is a combination of a 220,000-square-foot medical office building with a cancer center and a 243,000-square-foot ambulatory care center with an Imaging Center, Catheterization Lab, and Cardiac Rehabilitation Center. Banner Hospital opened their new $86 million hospital and medical center in April 2015 at Harmony Road and Lady Moon Drive in Fort Collins. The 22-bed hospital and medical center has three operating rooms, an emergency department, 16-room health center and room to expand up to 144 beds in two additional patient towers. This facility employs roughly 210 people. In Loveland, Banner Health operates McKee Medical Center located in the northeast quadrant of the City and consists of a 115-bed, 421,972-square-foot hospital. McKee Medical Center offers a full range of inpatient and outpatient services including medical, obstetrical, pediatric, orthopedic and critical care and has 675 full-time employees. Also in Loveland, UC Health’s Medical Center of the Rockies is in the Centerra Development at the northwest corner of Interstate 25 and US Highway 34. This facility is a 450,000-square-foot, 166-bed hospital offering specialty care in cardiac surgery, cardiology and trauma as well as other services. Poudre Valley Hospital has continually been ranked in the Top 50 of hospitals across the United States. In Greeley, North Colorado Medical Center (also a Banner Health hospital) is centrally located north of the US 34 Bypass along 16th Street. The hospital completed a major expansion in 2005, bringing the number of licensed hospital beds to 378. North Colorado serves as the primary full- service hospital for northern and eastern Colorado, southern Wyoming, western Nebraska and Kansas. North Colorado also has community care clinics in Ault, Eaton, Fort Lupton, Greeley, Johnstown and Windsor. North Colorado Medical Center also offers state-of-the art technology such as iCare, a telehealth program that offers extra monitoring of patients in intensive-care units. The hospital also offers robotic surgery which can lead to shorter recovery times for surgical patients. In addition, North Colorado also has a computerized system designed to reduce the chances of complications during labor and delivery. The new $135 Million UC Health Hospital opened in July 2019 in southwest Greeley near 71st Avenue at Highway 34. It is a 53-bed hospital with over 115,000 square feet plus another $50 Million medical center and includes an intensive care unit, ER, operating rooms, and advanced cardiology services. Regional Analysis DRM Real Estate Advisors, LLC Consulting, Research & Valuation 17 In total, UC Health employs roughly 6,300 people in Northern Colorado, and Banner Health employs approximately 3,000 people. For Banner, an additional 630 doctors, nurse practitioners and physician assistants are employed at the three locations. Access to quality health care has been a driving force in Northern Colorado and has been one of the primary factors for the number of retirees locating to the area. Transportation Transportation in the area is considered adequate. Two major highways provide access to Greeley and Weld County in general. U.S. Highway 85 runs north from Denver through Greeley to Cheyenne, and U.S. Highway 34 runs west from Interstate 76 through Greeley to Loveland and Estes Park. Both are four-lane asphalt paved highways with limited access. Interstate Highway 25, the main north-south arterial in Colorado, is approximately 15 miles west of Greeley and travels through the southwestern corner of Weld County. Fort Collins and Loveland are each just five miles west of I-25, and are also linked by U.S. Highway 287, which runs through the downtown areas of both cities. The Northern Colorado Regional Airport, formerly the Loveland/Fort Collins Airpark, is a commuter airport located along Interstate 25 at Crossroads Boulevard. The Weld County airport is located on the east side of Greeley. Several railroads, including Great West and Burlington/Northern extend service through Northern Colorado. Landforms Topography is generally rolling plains and an average elevation of 4,658 feet. The Rocky Mountains lie approximately 10-20 miles west of I-25. The climate is generally semi-arid with average annual precipitation of 15 inches. The area has 240 days of sunshine annually with average January temperatures of 13.8 degrees and 90 degrees in July. The “comfort index” for the region is 69, compared to a US average of 54. Conclusion Overall, Northern Colorado is a highly desirable place in which to live and work and the foreseeable future appears to include continued growth and economic prosperity for this area, albeit tempered by the current economic conditions affecting the nation as a whole. If additional demographic information is desired, please contact the appraiser. Subject Neighborhood DRM Real Estate Advisors, LLC Consulting, Research & Valuation 18 NEIGHBORHOOD MAP Subject Neighborhood DRM Real Estate Advisors, LLC Consulting, Research & Valuation 19 SUBJECT NEIGHBORHOOD A neighborhood can be defined as a homogeneous grouping of inhabitants or property usage. Since environmental, governmental, social, and economic changes can influence property values, it is necessary to identify these trends that affect the environment of the property being appraised. The neighborhood is considered the Town of Estes Park. The Town of Estes Park contains approximately six square miles, compared to the 32 square miles of the Estes Valley. Average elevation is 7,522 feet. According to the 2010 Census, Estes Park contained 5,858 people in the city limits and 8,889 people in the Estes Valley. Those two population figures were 70% and 47% higher, respectively, than the populations in 1990. Wikipedia cites a Census 2020 population of 5,904—growth in Estes Park is tempered by the limited amount of developable land in the valley. The economy of Estes Park is almost wholly tourist-based, so the vast majority of jobs are in retail, restaurant, and lodging businesses. The three largest single employers in Estes Park are the Park R-3 School District, Estes Park Medical Center, and city government. After that, the next largest employers are Holiday Inn, YMCA of the Rockies, Harmony Foundation, Rocky Mountain National Park, and the Estes Park Recreation and Park District. Given the tourism-based economy, the Town’s financial base is almost purely sales-tax-based, with additional revenue from a lodging tax. Prior to the 2013 flood, 2013 sales taxes were ahead of 2012 taxes by almost 2%. However, Estes Park rebounded strongly in 2014 and 2015. Overall, the 2014 revenues showed a massive gain of 14.45% against 2013 revenues, but more importantly showed gain of 10.6% against the then- record 2012 revenues. At the time, there was rampant concern that the flood would dampen tourist demand, but the market treated the flood as a one-time event and the sales tax dollars indicated it did not affect the long-term prospects of the area. In 2015, they reported revenue gain of 11.49% over 2014—and a net increase of just over $1.0 Million! Then 2016 showed total sales tax collections up 7.41% versus 2015 while 2017 showed sales tax collections up 5.93% versus 2016. Gains continued in 2018 ($12.03 Million, up 8.66% versus 2017) and 2019—sales tax at $13.07 Million were up 8.62% versus 2018. Thus, successive annual increases of 7.41%, 5.93%, 8.66% and 8.62% pointed to a strong local economy. Unfortunately, 2020 trended poorly due to the COVID 19 outbreak but rebounded substantially by the end of 2020. January and February collections totaled $1.247 Million—an 18+% increase over 2019. March 2020 first saw revenues plummet versus same month 2019, and slowdowns in April, Subject Neighborhood DRM Real Estate Advisors, LLC Consulting, Research & Valuation 20 May, and June showed the town tax revenues down as much as 21.61% in June versus 2019. In July, cumulative tax collections were behind by 15.85% versus 2019, decreasing to 11.82% behind as of August. The December 2020 report showed the Town suffered a 7.41% net loss for 2020 revenues versus 2019—a significant blow, but far less than anticipated at mid-year. The table below shows the town roaring back in 2021 from the 2020 experience—the December 2021 revenues were nearly 22% greater the December 2020 revenues, and their cumulative General Fund sales taxes were at $16.745 Million or up over 38% over 2020! More importantly, the table shows cumulative revenues through 2021 were $16.745 Million, versus $13.1 Million for the same time period in 2019 (with no COVID impacts)—an increase of 28.1%! Every month in 2021 exceeded its 2019 counterpart. The table above shows sales tax collections in Estes Park over the last 5 years since 2019. The December 2022 report showed Gross Revenues up to $18M, over 8.15% greater than 2021. However, the pent-up demand from COVID has waned nationwide—not just in Estes Park. As we’ll discuss later in the report with respect to lodging occupancy rates being down, the Town of Estes Park financials show the rebound slowed significantly. In mid-2023, year-to-date revenues were down -1.01% but 2023 ended with a slight gain (0.97% or less than 1%) over 2022. The table below shows 2024 off to a slow start. April 2024 was a good month, but year-to-date 2024 revenues lag 2023 by nearly 7%. Subject Neighborhood DRM Real Estate Advisors, LLC Consulting, Research & Valuation 21 The main draw to Estes Park—its economic engine—is the Rocky Mountain National Park (RMNP). Additional tourist draws include the Roosevelt National Forest, Estes Park Lake and Marina, and the Big Thompson and Fall Rivers. For about 10 – 15 years after 2000, the number of visitors ranged around 3.0 Million annually, plus or minus. For example, the number of visitors to RMNP in 2000 was reported at 3,380,044 but decreased slightly to 3,318,309 in 2001. A January 2011 Grand County “Daily News” stated that 2010 saw 3.34 Million visitors enter the Park, “the third highest number of visitors [to] enter through its gates in the history of counting guests.” In early 2015, Denver’s NBC TV station aired a report that 2014 saw an all-time record of 3.4 Million visitors to Rocky Mountain National Park, shown graphically on the next page courtesy of Statista.com. However, the 5 years from 2015 to 2019 saw a huge increase in visitor numbers. A report released in early 2017 indicated a record number of visitors (4.52 million people) visited the Park in 2016 following the 2015 visitor total of 4.16 million people. In 2017, visits declined slightly to 4.44 million but the 2018 report cited a new record of 4.59 million people visiting in 2018—that record was then broken with 4.67 Million visitors in 2019—another indication that the local economy was strong. As expected, the 2020 RMNP visitor experience fell off dramatically, driven by the Pandemic (once shutdowns were lifted, RMNP went to a reservation system for a while) and the East Troublesome forest fire that occurred in October. That said, they still reported 3.3 Million visitors to the park! The Statistica graph is shown below, with the National Park System reporting the 2021 visitors totaled 4,434,848 before declining slightly to 4.3 Million in 2022. 2008 to 2022 The survey below shows further decline in 2023 at RMNP to 4.115 Million visitors. Subject Neighborhood DRM Real Estate Advisors, LLC Consulting, Research & Valuation 22 Much of Estes Park’s growth has been spurred by the second home market, with large numbers of “out-of-towners” visiting Estes and purchasing second homes or condominiums. Many purchased the homes or condos as investments, with the units being rented by a management company for the majority of time when the owner is not visiting. In comparison with the ski towns lining I-70 to the south, Estes Park housing has been relatively affordable. Developers continue to tout Estes Park as a destination resort area, and development projects proposed or underway support that contention. However, Estes Park undoubtedly does not have the draw of the ski towns (as evidenced by its winter lodging occupancy) so it has a limited winter market. Topography of the neighborhood is mountainous. The Big Thompson River flows from west to east through the bottom of the Estes Park Valley, and the Fall River flows from northwest to southeast to intersect with the Big Thompson in the downtown area. Most of the land in the valley then slopes moderately to steeply up away from the two rivers. The subject neighborhood is in the Big Thompson’s and Fall River’s flood plains, but the flood plains are fairly tightly confined to the immediate area around the river due to the rise of the surrounding ground. Soils are generally suitable for development. Expansive soils are found along the Front Range, so proper soils engineering is necessary. In Estes, the largest obstacle to development is rocky soil. In general, the following utility providers serve the neighborhood: Water Town of Estes Park Sewer Estes Park Sanitation District, Upper Thompson Sanitation District or septic Electricity Town of Estes Park Natural Gas Xcel Energy Telephone CenturyLink Estes Park government consists of a mayor and six trustees overseeing a town administrator. The Town of Estes Park furnishes police protection, but volunteers operate the fire department. In summary, the subject neighborhood is the Town of Estes Park and immediately-surrounding area. Like most of Northern Colorado, Estes Park has grown tremendously in the last ten years, and some limited continued growth is expected in the near future. Growth will be tempered at some point in the future by the limitations of the size of the valley—buildable ground is limited and will become harder to find. To some degree, the economic viability of Estes Park is virtually assured due to its location next to a National Park and its other tourist venues, albeit tempered by any lingering/future effects of the COVID-19 pandemic and travel/crowd limitations/restrictions. Subject Property DRM Real Estate Advisors, LLC Consulting, Research & Valuation 23 SUBJECT PROPERTY Address/Location The subject's address is 1250 Woodstock Drive, Estes Park, Colorado. It is located midblock on the east side of Woodstock Drive between its intersection with Manford Avenue and St Vrain Avenue in Estes Park. Legal Description The subject’s legal description is: Lot 14, Deville Subdivision, Town of Estes Park, Larimer County, Colorado. SUBJECT SITE Land Area and Dimensions We did not receive a survey of the subject property. According to Larimer County records, the lot contains 38,028 square feet or 0.87-acres. Topography and Soil Conditions The topography of the site is slightly sloping from south down to north, with the site at the grade of Woodstock Drive. There are no known soil or subsoil conditions that would affect construction on the site or the life expectancy of an improvement. Again, the chief soils impediment to construction in Estes Park is the extensive amount of rock. Streets and Accessibility The subject has two curb cuts (one ingress and one egress) from Woodstock Drive. Woodstock Drive connects to Manford Avenue just north of the subject, which then connects to arterial S. St. Vrain Avenue (US Highway 7). Overall, access is considered adequate. Subject Property DRM Real Estate Advisors, LLC Consulting, Research & Valuation 24 ASSESSOR’S AERIAL PHOTOGRAPH/PLAT MAPS Above, the Assessor’s wide angle aerial photograph with a close-up view is shown below. Subject Property DRM Real Estate Advisors, LLC Consulting, Research & Valuation 25 Site Improvements Site improvements include an asphalt-paved driveway and 9 paved parking spaces on the west side of the building. The rear of the building has a fenced play area with a wood chip base, playground equipment, and mature trees. The remainder of the parcel is covered in natural vegetation. Utilities The site has public electricity and water provided by the Town of Estes Park, while Xcel provides natural gas and sewer service is provided by Upper Thompson Sanitation District. Surrounding Properties Typical of small towns, the subject is in a mixed-use area. There is an office adjacent west, an animal hospital and kennel to the north, an apartment complex adjacent east, and a self-storage facility adjacent south. A former car dealership is located across Woodstock to the northwest. Overall, the subject fits in adequately with the rest of the neighborhood. Drainage and Flood Plain Conditions Drainage for the property is assumed adequately designed. According to Flood Maps Flood Zone Determination, the subject is located on Floodway Map Panel No. 080193 1282F dated December 19, 2006 and is not located in a flood plain. The Assessor’s Flood Zone overlay is below, and clearly shows the floodplains in the Town of Estate Park are far from the subject property. Subject Property DRM Real Estate Advisors, LLC Consulting, Research & Valuation 26 Zoning Zoning for the subject is “C-O” Commercial Outlying in the Town of Estes Park. CO Outlying Commercial Zoning District. This zoning district is established to encourage the development of a wide variety of commercial and retail uses along the major corridor entryways into the Valley and the Town of Estes Park. This zoning district is established to implement the "Commercial" and "Commercial-Recreation" future land use categories recommended in the Comprehensive Plan. This district should accommodate the majority of the larger, freestanding commercial and retail buildings to meet future demand in the community. The CO zoning district lists “Daycare Center” as a use “permitted by right”, so it is a legal use of the site. The use may or may not be a “conforming use” due to current setbacks and landscaping requirements. TOWN OF ESTES PARK ZONING MAP Easements and Encroachments Again, the appraiser was not provided a current survey. There were no obvious detrimental easements or encroachments at the time of inspection. This appraisal assumes a survey would not reveal anything other than typical utility easements that do not affect value. Subject Subject Property DRM Real Estate Advisors, LLC Consulting, Research & Valuation 27 Property Taxes In Colorado, property taxes are based on the usage of the property. The Assessor first assigns an “Actual” (Market) Value to every property. That Actual Value is then converted to an Assessed Value depending on its usage. In 2023, all commercial/industrial property and land was assessed at 27.9% of its Actual Value, while residential property (homes, apartments, condos) were assessed at a floating rate. A mill levy specific to a given area/district is applied to the Assessed Value to generate the property taxes for each property. The parcel is in Tax District 3302 with a 2023 Mill Levy of $71.993. The property is subject to the taxing jurisdiction of Estes Park and Larimer County. For 2023 property taxes due in 2024, the property was assigned an Actual Value of $550,000, which resulted in an Assessed Value of $153,450. The total property taxes for 2023, due in 2024, are $11,047.32. According to the Treasurer’s website, the taxes have been paid in full. There are no tax liens or prior year taxes due. Subject Property DRM Real Estate Advisors, LLC Consulting, Research & Valuation 28 Functional Adequacy of the Site The overall site is nearly-rectangular but large enough to contain appropriately sized improvements such as the subject. At a site size of 38,028 square feet and a building footprint of only 1,870 square feet, the land-to- building ratio for the overall site is 20.33 to 1. The relatively large site (for such a small building) has approximately 0.40-acres in the rear of the site that is open, unused space. Thus, the rear site area certainly has the potential to be used for expansion of the existing use. The site certainly has “Surplus Land” which may or may not add value. Since the existing improvements are clustered in the northwest quadrant of the site, it arguably has “Excess Land” which is land that is not needed to support the current improvements and could be used for something else. The open land in the rear is accessible from the southwestern site entrance but would require some parking ingress/egress reconfiguration. That area may have potential to be subdivided and sold separately or support different uses. We will consider contributory value for the Excess Land. Subject Property DRM Real Estate Advisors, LLC Consulting, Research & Valuation 29 SUBJECT IMPROVEMENTS The improvements consist of a single building that contains a Gross Building Area of 1,870 square feet and was built in 1985. The building is Average Quality wood frame construction with wood siding and an asphalt- shingled gable roof. The main entrance is on the west elevation and behind a small fenced area, to keep children from bolting into the driveway when leaving the building. The entrance opens into an open bay classroom area with an office and two rest rooms on the north side of the building and a full kitchen with a dining area on the northeast corner. Temporary fencing partitions can be used to make a separate class areas. Finishes in the building include newer faux wood laminate flooring, painted drywall walls, and 2x4 acoustic tile ceilings with fluorescent troffer lighting. Per the current tenant, central air conditioning was installed in the last 2+ years. The door on the east elevation opens to the fenced playground area. The playground has wood chips for a base and playground equipment. The tenant noted new chain link fencing was installed in the playground, replacing the older wood fencing. NOTE: children were present in the playground at inspection, so the report shows an older picture of the playground (2018) with the original wood fence. Physical Condition The appraiser inspected the subject property for purposes of forming an opinion of value based on the building’s general design, use and apparent condition. The appraiser’s inspection is not to be construed as a “building inspection” as the appraiser is not a qualified building inspector and does not warrant the condition or operability of the building or its systems or components. This appraisal specifically assumes that the subject is in sound structural condition and that all of the building systems and components are safe and operational. We specifically assume that the roofs are serviceable and do not leak. The building appears to be in Average-Good condition for its age (built in 1985, so 39 years old), We assume all systems are operational. There are no signs of deferred maintenance. The prior (2018) tenant reported some minor maintenance/replacement actions including a few replaced windows, some repaired/replaced floor coverings, repaired doors, etc. The current tenant reported new flooring, air conditioning and playground fencing. Overall the interior and exterior appear to be in average-good condition. Based on its condition, we judge the building has an Effective Age of 19.5 years, or half of its Chronological Age (see Cost Approach Pg 91). The condition of the parking lot was average. Functional Utility The property is of an adequate size and configured in such a manner that allows good access to the building. Summary The subject was built as a daycare property and is still operated as a daycare property. Subject Property Photographs DRM Real Estate Advisors, LLC Consulting, Research & Valuation 30 Aerial photo (courtesy Google Earth) of most of the Estes Valley, detailing where the subject is located compared to downtown Estes Park. The photo below is a close-up view of the subject. This view illustrates the amount of Excess Land outside of the fenced yard and the building. Downtown Estes Park Subject Property Photographs DRM Real Estate Advisors, LLC Consulting, Research & Valuation 31 Viewing into the southwestern entrance to the site, and close-up of parking. Subject Property Photographs DRM Real Estate Advisors, LLC Consulting, Research & Valuation 32 Viewing into the northwestern exit from the site, and close-up of parking, Alternate close-up views of the building. Subject Property Photographs DRM Real Estate Advisors, LLC Consulting, Research & Valuation 33 From the front entry, viewing the entrance area and coat storage space (left) and north end of the open classroom. Alternate views in the northern end of the building. At right is the entry to the office space and the two rest rooms to the south. Viewing the two restrooms with a total of four toilets. Subject Property Photographs DRM Real Estate Advisors, LLC Consulting, Research & Valuation 34 Viewing the office space and the kitchen area. Viewing the interior of the building from south to north. Close-up view of interior finishes, including wood laminate flooring (left) and painted drywall and acoustic drop ceiling (right). Subject Property Photographs DRM Real Estate Advisors, LLC Consulting, Research & Valuation 35 In 2018: Viewing across the fenced playground area. Children were present at this June 26, 2024, inspection, so close-up photos were not allowed. As stated, the wooden fence has been replaced with new chain link fencing. Viewing the undeveloped part of the site, clearing showing its potential for expansion of the current usage, or also potential for some alternate usage. Highest and Best Use DRM Real Estate Advisors, LLC Consulting, Research & Valuation 36 HIGHEST AND BEST USE "Highest and Best Use" is defined as: "The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value."3 Inherent in this definition is that the use must be physically possible, legally permissible, financially feasible, and maximally productive. These criteria are usually considered sequentially. Physical Considerations The site consists of an irregular-shaped but nearly rectangular parcel that contains 0.87-acres. The site is accessed by a public street (from two curb cuts) and has access to all public utilities. The site is of adequate size such that there are no physical limitations to construction of appropriately sized improvements on the site. Therefore, it is physically possible to build on the site. Political Considerations The site is zoned “C-O” Commercial Outlying in the Town of Estes Park. The C-O zoning district is established to encourage the development of a wide variety of commercial and retail uses along the major corridor entryways into the Valley and the Town of Estes Park. The CO zoning district lists “Daycare Center” as a use “permitted by right”, so it is a legal use of the site. The use may or may not be a “conforming use” due to current setbacks and landscaping requirements. Financial Feasibility and Maximum Productivity In its “As-Is” condition, the subject is operated as a daycare and preschool operation. Feasibility as a daycare operation is beyond the scope of this appraisal. A daycare operation is one of the possible Highest and Best Uses, but it is also well suited for conversion into other potential office/secondary retail/commercial uses based on its commercial setting and open bay interior. In the small Estes Park Valley, land is a limited resource so there is a significant barrier to entry for competing new commercial buildings. If Vacant, the Highest and Best Use of the site would be for development with an office or secondary commercial usage. As Improved, one of the Highest and Best Uses of the property is for a daycare/preschool usages. Office/secondary retail/commercial uses are also potential alternative Highest and Best Uses of the property as it exists. We note that the value of the property “As Improved” significantly exceeds the value of the underlying site alone, meaning that the Highest and Best Use does not indicate razing the existing improvements and redevelopment of the site with a new usage. 3 The Appraisal of Real Estate, 10th Ed., 1992, page 275. Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 37 CURRENT ECONOMIC CONDITIONS As this report is written, it is late in 2nd Quarter 2024. War broke out between Russia and Ukraine when Russia invaded on February 24, 2022, and most of the world has imposed severe economic sanctions on Russia. The war has devolved into a slugfest with immense damages inflicted on Ukrainian cities and infrastructure and large numbers of Ukrainian and Russian casualties. The world continues to press Russia to cease the assault, but with no end currently in sight. Going back, the first few months of 2020 saw the economy of the US in general, and Colorado and the Northern Colorado area in particular, improving steadily as it continued to emerge from the Great Recession of 2007/2008. However, the outbreak of the Novel Coronavirus (COVID- 19) in early 2020 caused the economy to suffer through the rest of 2020 and into 2021 and 2022. The Novel Coronavirus (COVID-19) was declared by the World Health Organization as a global health emergency in March 2020, and it continues today in 2023 to cause heightened uncertainty in both local and global market conditions. The outbreak continues to evolve, and cases are progressively being detected around the world and impacting global financial markets. Travel restrictions were implemented by many countries, and shelter-in-place restrictions in the US and other countries caused significant economic turmoil. Tourism, F&B, Entertainment, Office and Retail business sectors were the most severely impacted due to the increased response by local and global authorities including home quarantine, restriction of travel and growing international concern. To recap, Donald Trump was elected President in November 2016. The country was embroiled in a very hard-hitting presidential election pitting Democrat Hillary Clinton against Republican Donald Trump—a race that much of the population viewed as a “lesser-of-two-evils” choice— and Mr. Trump emerged the winner. Mr. Trump’s administration was in office when the country was improving economically—until the COVID 19 pandemic—while embroiled in numerous domestic and international issues with the two major parties nearly completely at odds on most every issue. Trump was impeached but the Senate trial ended in late 2019 in a “Not Guilty” verdict. The Trump administration’s policy was to minimize/downplay the impact of COVID and encourage economic recovery. The 2020 election versus Democrat Joe Biden was a long no-holds-barred mud fight, and Joe Biden emerged as the President-elect. Biden’s administration focused on fighting the Pandemic through a rapid and wide-spread immunization program and also injecting financial aid into the US economy. At the same time, many in the Republican party continue to insist that Biden is not the legitimate president. The 2022 midterms saw Democrats retain the Senate while the House of Representatives shifted slightly to Republican control. In the meantime, Europe was thrown into chaos as the United Kingdom voted to leave the European Union (a.k.a., “Brexit”). The British exited the European Union on January 31, 2020, and officially transitioned in November 2020—the transition is still on-going with the world economy trying to determine the long-term impacts of that move on world trade. The value of the British Pound and the Euro have both plummeted versus the Dollar. As with the US, the Pandemic greatly hampered the progress of the transition. Previously, the US entered into a Recession in late 2007 and into 2008. The residential housing market stalled in 2007, hurt by a combination of overbuilding and rising rates that severely Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 38 impacted the sub-prime mortgages originated in the previous three years with adjustable rates. Democrat Barack Obama was elected President of the United States in November 2008 and worked to establish an economic team to try to revive the economy after its plunge into Recession. In November 2012, President Obama was re-elected to a second term. The Fed moved in September 2007 to boost the market by cutting Prime by 50 basis points (0.5 percent). Subsequent cuts reduced Prime to just 3.25% percent by September 2008—a 5.0% decline in just over one year—where it remained for over 7 years until it was increased in December 2015 to 3.50%. Subsequent increases in 2017 and 2018 put Prime at 5.50%. Now in 2019, Trump has heavily lobbied the Fed to reduce Prime and further stimulate the economy while the Fed debates holding steady to combat potential inflation. Subsequently, it was reduced in three separate ¼-point drops back to 4.75% effective October 31, 2019. However, the Fed rapidly slashed rates in response to the Coronavirus, and Prime was set back to 3.25% since March 16, 2020. However, the Fed announced in January 2022 that they would begin a program to raise rates in 2022 to combat inflation. That announcement was immediately cast in doubt by the outbreak of the Russian-Ukrainian war. The Prime Rate increased 25 basis points from 3.25% to 3.5% on March 17, 2022, and then another 50 Basis Points to 4.0% on May 5, 2022. The Fed then shocked the nation with a 75 Basis Points increase effective June 16, 2022. Subsequent increases were similarly large—the latest rate increase on Thursday, July 27, 2023, resulted in a current rate of 8.50%, so Prime has increased 525 Basis Points or 162% in the last 17 months. At this point, the number and magnitude of additional increases are being debated—they are expected to be smaller but are unknown. In the recent June 2024 meeting of the Fed, they held Prime at its current level but pledged a potential of slight cuts in subsequent meetings in 2024. Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 39 The stock market continued its wild volatility for several years following the start of the Recession. The market plunged some 40% in the 2008/2009 timeframe from near 14,000 to the mid 7,000’s, and the entire global economy suffered. It took until February 2013 (5+ years) to return to its pre-Recession level. In mid-2019, the market set a new all-time high of 27,398.68. It then fell back over 1,000 points but then set a new all-time high of 28,174.97 in November 2019 and again in early 2020 at 29,568. As the graph below shows, the market surged some 12,000+ points after the 2016 presidential election driven by a historic new tax law that reduced corporate rates significantly. Unfortunately, the Coronavirus temporarily changed all that. In the first week of March 2020, the market plummeted back to near its levels in 2017. It climbed some 7,000-10,000 points in the 8 months leading up to the presidential election. Since December 2020, the DOW vacillated from the mid-29,000’s to the high-36,000’s and set a new high on January 2022 at 36,952. Then, war broke out as a Russia invaded Ukraine and the market fell quickly. On March 8, 2022, the market was down to about 32,632. The market in 2023/2024 ranged from a low of 31,429 to a high of 39,889 (March 28, 2024) and currently indicates a 1-Year Return (gain) of approximately 17.66% over the last year: Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 40 DRM Real Estate Advisors enlisted Regional Economist John W. Green, PhD, (jwgreen@frii.com) of Fort Collins to provide his view of the national, state and local economic indicator data. His most recent report—August 2023—is as follows: Current Economic Conditions in the Northern Colorado Economy August 2023 Dr. John W. Green, Regional Economist Fort Collins, Colorado jwgreen@frii.com This report is for the exclusive use of DRM Real Estate Advisors and its clients and cannot be disseminated or published in any form. The U.S. Economy The U.S. Bureau of Economic Analysis reported, on July 27, that real gross domestic product (GDP) increased at an annual rate of 2.4 percent in the second quarter of 2023. In the first quarter, real GDP increased 2.0 percent. The U.S. economy has proven to be VERY resilient, in spite of all the predictions of gloom and doom. Consumer spending has remained very strong, although recently it has been showing signs of weakening. Consumers are finding money to spend from somewhere. Perhaps it’s savings from working at home (saving commuting costs, lunch, etc.). Or leftover funds from Covid bailout money. Or borrowing on credit cards and from other sources. Maybe infrastructure funds are beginning to find their way into the economy through increased jobs. Maybe it’s higher wages. But it’s very uncertain how long it will last. The Atlanta Feds GDPNow first estimate of third quarter GDP was released on July 28 at 3.5 percent, well above the Blue Chip Economic Forecast upper estimate of 1.4 percent. On August 1 it was increased to 3.9 percent. I’d like to say the GDPNow estimate is overly optimistic but that’s what I thought last quarter and was proven wrong. I think consumer spending will slow and, thus, U.S. economic growth, but I’m less certain than I was three months ago. Perhaps the economy will have a ‘soft landing’ and we will avoid a recession. The Conference Board Leading Economic Index® (LEI) for the U.S. declined by 0.7 percent in June 2023 to 106.1 (2016=100), following a decline of 0.6 percent in May. The LEI is down 4.2 percent over the six-month period between December 2022 and June 2023—a steeper rate of decline than its 3.8 percent contraction over the previous six months (June to December 2022). “The U.S. LEI fell again in June, fueled by gloomier consumer expectations, weaker new orders, an increased number of initial claims for unemployment, and a reduction in housing construction,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “The Leading Index has been in decline for fifteen months—the longest streak of consecutive decreases since 2007-08, during the runup to the Great Recession. Taken together, June’s data suggests economic activity will continue to decelerate in the months ahead. We Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 41 forecast that the U.S. economy is likely to be in recession from Q3 2023 to Q1 2024. Elevated prices, tighter monetary policy, harder-to-get credit, and reduced government spending are poised to dampen economic growth further.” The Bureau of Economic Analysis reported on July 28 that the Personal Consumption Expenditures (PCE) price index increased 0.2 percent in June. Excluding food and energy, the PCE price index also increased 0.2 percent. Real Disposable Personal Income (DPI) increased 0.2 percent and real PCE increased 0.4 percent; goods increased 0.9 percent and services increased 0.1 percent. Within services, the largest contributors to the increase were financial services and insurance (led by portfolio management and investment advice services), housing and utilities (led by housing), and recreation services. Within goods, the largest contributors to the increase were motor vehicles and parts (led by new light trucks) and gasoline and other energy goods (led by motor vehicle fuels, lubricants, and fluids). The U.S. Bureau of Labor Statistics reported on July 12 that the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in June on a seasonally adjusted basis, after increasing 0.1 percent in May. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment. The index for shelter was the largest contributor to the monthly all items increase, accounting for over 70 percent of the increase, with the index for motor vehicle insurance also contributing. The food index increased 0.1 percent in June after increasing 0.2 percent the previous month. The index for food at home was unchanged over the month while the index for food away from home rose 0.4 percent in June. The energy index rose 0.6 percent in June as the major energy component indexes were mixed. The index for all items less food and energy rose 0.2 percent in June, the smallest 1-month increase in that index since August 2021. Indexes which increased in June include shelter, motor vehicle insurance, apparel, recreation, and personal care. The indexes for airline fares, communication, used cars and trucks, and household furnishings and operations were among those that decreased over the month. The all items index increased 3.0 percent for the 12 months ending June; this was the smallest 12-month increase since the period ending March 2021. The all items less food and energy index rose 4.8 percent over the last 12 months. The energy index decreased 16.7 percent for the 12 months ending June, and the food index increased 5.7 percent over the last year. Morning Consult’s estimate of real consumer spending increased in May after two straight months of reduced outlays. All income earners contributed to monthly spending gains, but May’s growth was largely driven by high-income consumers. Recent improvements shouldn’t be mistaken for a sign of full recovery, however. On an annual basis, total spending declined 2%, and more than half of spending categories tracked by Morning Consult fell. Nonfarm business labor productivity decreased 2.1 percent in the first quarter of 2023, the U.S. Bureau of Labor Statistics reported on June 1, as output increased 0.5 percent and hours worked increased 2.6 percent. Labor productivity was revised up 0.6 percentage point, the combined effect of a 0.3-percentage point upward revision to output and a 0.4-percentage point downward revision to hours worked. From the same quarter a year ago, nonfarm business sector labor productivity decreased 0.8 percent, reflecting a 1.4-percent increase in output and a 2.2-percent increase in hours worked. The 0.8- Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 42 percent productivity decline is the first time the four-quarter change series has remained negative for five consecutive quarters; this series begins in the first quarter of 1948. The National Association for Business Economics July 2023 Business Conditions Survey sees an economy of rising sales and improving profits, with lower materials costs and stabilizing wages. “Results of the July 2023 NABE Business Conditions Survey reflect an economy of rising sales and profits, as materials costs decline and stabilizing wages prove less challenging,” said NABE President Julia Coronado, founder and president, MacroPolicy Perspectives LLC. “Additionally, a majority of panelists is more confident about the economy over the next year,” added NABE Business Conditions Survey Chair Carlos Herrera, chief economist, Coca-Cola North America, “as they see the probability of a recession diminishing.” Respondents reported continued improvement in sales at their firms over the past three months compared to the previous three. The Net Rising Index (NRI) for sales—the percentage of panelists reporting rising sales minus the percentage reporting falling sales—over the past three months rose to 33 from 30 in the April 2023 survey. The forward-looking NRI rose to 38 from 25 in the April survey, indicating growing expectations for sales in the next three months, as the percent of respondents expecting sales to rise increased and those expecting sales to fall decreased. Panelists also report continued improvement in profit margins at their firms in Q2 2023. The NRI for profits is 0, up from the previous reading of -8. This is the first non-negative result after four consecutive surveys reporting negative NRIs. The forward-looking NRI rose to 6 from -6 in the previous survey, also the first non-negative result after four consecutive surveys with negative results. The NRI for prices charged rose to 45 from 34 in the April survey, the third highest reading in survey history. Almost half of respondents, 49%, reports prices rose in Q2 2023, up from 40% in the April survey. The forward-looking NRI for prices rose to 35 from 31 as the share of panelists expecting prices to rise in the next three months increased and the share expecting them to fall declined. The NRI for materials costs decreased to 43 from 50 in the April survey, down 33 points from the record high of 76 in the July 2022 survey. The share of panelists reporting falling materials costs in Q2 2023 increased to 13% compared to 7% in the April survey and the share reporting rising materials costs decreased to 55% from 57%. The forward-looking NRI fell to 20 from 37 in the April survey as the share of respondents expecting materials costs to fall over the next three months increased to 23% from 7% in the previous survey. For the first time since 2021, a majority of respondents (53%) reported that wages at their firms were unchanged in Q2 2023, while 47% of respondents report rising wages—significantly lower than the 63% in the April survey. Almost three-quarters of panelists (71%) reported that the probability of the U.S. entering a recession in the next 12 months is 50% or less. The Brookings Institute Hutchins Center Fiscal Impact Measure (FIM) of Federal, state and local fiscal policy shows that fiscal policy decreased GDP by 0.7 percentage points in the second quarter. The Chicago Fed National Activity Index (CFNAI) edged down to –.32 in June from –0.28 in May. Three of the four broad categories of indicators used to construct the index decreased from May and three of the four categories made negative contributions in June. The index’s three-month moving average increased to –0.16 in Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 43 June from –0.21 in May. The CFNAI Diffusion Index, which is also a three-month moving average, moved up to –0.12 in June from –0.17 in May. Thirty-one of the 85 individual indicators made positive contributions to the CFNAI in June while 54 made negative contributions. Thirty-three indicators improved from May to June, while 51 indicators deteriorated and one was unchanged. Of the indicators that improved, 13 made negative contributions. The Federal Reserve System reported on July 18 that total industrial production declined 0.5 percent in June for a second consecutive month but advanced 0.7 percent at an annual rate for the second quarter as a whole. Manufacturing output moved down 0.3 percent in June but rose 1.5 percent in the second quarter. In June, the indexes for mining and utilities fell 0.2 percent and 2.6 percent, respectively. At 102.2 percent of its 2017 average, total industrial production in June was 0.4 percent below its year-earlier level. Capacity utilization stepped down to 78.9 percent in June, a rate that is 0.8 percentage point below its long-run (1972–2022) average. The S&P Global US Manufacturing Purchasing Manager’s Index (PMI) recorded a second successive monthly decline in June. The Index was 46.3 in June, down from 48.4 in May. The index therefore signaled the steepest decline in operating conditions in 2023 so far, as the recent downturn intensified. Manufacturing performance has deteriorated in seven of the last eight months. Underpinning the latest PMI reading was a marked contraction in new orders in June. The decrease was the steepest of the year so far and the second-fastest in over three years. Firms commonly attributed the decline to suppressed demand due to inflationary pressure and higher interest rates. At the same time, external demand weakened. New export orders fell for the thirteenth month running and at a sharp rate that was among the fastest in the last three years. Business activity held steady in New York State, according to firms responding to the July 2023 Empire State Manufacturing Survey. The headline general business conditions index fell six points to 1.1. New orders inched up and shipments expanded. Delivery times shortened and inventories continued to decline. Employment levels edged higher, though the average workweek was little changed. Input and selling price increases continued to moderate. Planned increases in capital spending remained weak. Looking ahead, while firms expect conditions to improve, optimism remained muted. The U.S. Census Bureau reported on July 4 that total construction spending during May 2023 was estimated at a seasonally adjusted annual rate of $1,925.6 billion, 0.9 percent above the revised April estimate. May was 2.4 percent above May 2022. During the first five months of this year, construction spending was 2.9 percent above the same period in 2022. Spending on private construction was at a seasonally adjusted annual rate of $1,513.2 billion, 1.1 percent above the revised April estimate. Residential construction was at a seasonally adjusted annual rate of $857.4 billion in May, 2.2 percent above the revised April estimate. Nonresidential construction was at a seasonally adjusted annual rate of $655.8 billion in May, 0.3 percent below the revised April estimate. In May, the estimated seasonally adjusted annual rate of public construction spending was $412.4 billion, 0.1 percent above the revised April estimate. Educational construction was at a seasonally adjusted annual rate of $87.7 billion, virtually unchanged from the revised April estimate. Highway construction was at a seasonally adjusted annual rate of $124.6 billion, 0.4 percent below the revised April estimate. Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 44 The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced on July 26 that sales of new single‐family houses in June 2023 were at a seasonally adjusted annual rate of 697,000, 2.5 percent below the revised May rate of 715,000, but 23.8 percent above the June 2022 estimate of 563,000. The median sales price of new houses sold in June 2023 was $415,400. The average sales price was $494,700. The seasonally‐adjusted estimate of new houses for sale at the end of June was 432,000. This represents a supply of 7.4 months at the current sales rate. Existing-home sales edged lower in June, according to the National Association of Realtors®. Sales varied among the four major U.S. regions, with the Northeast experiencing gains, the Midwest holding steady, and the South and West posting decreases. All four regions recorded year-over-year sales declines. Total existing-home sales receded 3.3% from May to a seasonally adjusted annual rate of 4.16 million in June. Year-over-year, sales fell 18.9%. "The first half of the year was a downer for sure with sales lower by 23%," said NAR Chief Economist Lawrence Yun. "Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably." Total housing inventory registered at the end of June was 1.828 million units, identical to May but down 13.6% from one year ago. Unsold inventory sits at a 3.1-month supply at the current sales pace, up from 3.0 months in May and 2.9 months in June 2022. "There are simply not enough homes for sale," Yun added. "The market can easily absorb a doubling of inventory." The median existing-home price for all housing types in June was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022. The monthly median price surpassed $400,000 for the third time, joining June 2022 and May 2022 ($408,600). Prices rose in the Northeast and Midwest but waned in the South and West. "Home sales fell but home prices have held firm in most parts of the country," Yun said. "The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month." Properties typically remained on the market for 18 days in June, identical to May but up from 14 days in June 2022. Seventy-six percent of homes sold in June were on the market for less than a month. First-time buyers were responsible for 27% of sales in June, down from 28% in May and 30% in June 2022. NAR's 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data. All- cash sales accounted for 26% of transactions in June, up from 25% in both May 2023 and June 2022. Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year. Distressed sales – foreclosures and short sales – represented 2% of sales in June, virtually unchanged from last month and the prior year. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.96% as of July 13. That's up from 6.81% the previous week and 5.51% one year ago. The S&P CoreLogic Case-Shiller 20-City Home Price Index (HPI) reported a -0.5% annual decrease in May, down from a loss of -0.1% in the previous month. The 10-City Composite showed a decrease of -1.0%, which is a tick up from the -1.1% decrease in the previous month. The 20-City Composite posted a -1.7% year-over-year loss, same as in the previous month. Chicago, Cleveland, and New York reported the highest year- Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 45 over-year gains among the 20 cities in May. Chicago moved up one to the top spot with a 4.6% year-over-year price increase, while Cleveland came in at number two with a 3.9% increase, and New York entered the top three in third with a 3.5% increase. There was an even split of 10 cities reporting lower prices and those reporting higher prices in the year ending May 2023 versus the year ending April 2023. According to the CoreLogic Home Price Insights report, home prices nationwide, including distressed sales, increased year over year by 1.4% in May 2023 compared with May 2022. On a month-over-month basis, home prices increased by 0.9% in May 2023 compared with April 2023. The CoreLogic HPI Forecast indicates that home prices will increase on a month-over- month basis by 1% from May 2023 to June 2023 and increase on a year-over-year basis by 4.5% from May 2023 to May 2024. Following recent trends, a significant number of Western states saw prices decline in May from the same time in 2022, reflecting out- migration from less-urban locations where people moved during the height of the pandemic and the significant loss of affordability due to those resulting home price surges. Northeastern states and Southeastern metro areas continue to see larger home price gains compared with other areas of the country, due to both workers slowly moving back to job centers in some areas of the country and settling in relatively affordable places in others. Nationally, home prices increased by 1.4% year over year in May. Arizona, California, Colorado, Idaho, Montana, Nevada, New York, Oregon, South Dakota, Utah, Washington and the District of Columbia saw annual declines in home prices. The states with the highest increases year over year were Maine (7.2%), New Jersey (7.1%) and Indiana (6.9%). The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, reported that the trade deficit narrowed 4.4% to $87.8 billion in June, according to the advanced estimate released July 27. Economists polled by Econoday were looking for the deficit to remain broadly unchanged at a $91.8 billion deficit. Exports of goods inched up by $400 million to $162.5 billion while imports fell $3.6 billion to $250.3 billion. Industrial supplies and capital goods led the decline in imports, which offset a rise in autos, said Matthew Martin, U.S. economist at Oxford Economics. Despite the improvement in June, the trade sector subtracted slightly from second-quarter growth. Imports are trending lower as U.S. consumers are spending more on services than goods. “Overall, trade flows have come off record levels and the latest data are signaling weaker demand for imports,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “We expect trade to be broadly neutral [for GDP] over the balance of the year. The weakening in the dollar, which impacts exports with a lag, may provide some support in the months ahead, but we expect the weakening global economic backdrop to be the more determinant factor,” said Miller of Oxford. The University of Michigan Index of Consumer Expectations, as reported by Director Joanne Hsu, rose for the second straight month, soaring 11% above June and reaching its most favorable reading since October 2021. All components of the index improved considerably, led by an 18% surge in long-term business conditions and 14% increase in short-run business conditions. Overall, the sharp rise in sentiment was largely attributable Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 46 to the continued slowdown in inflation along with stability in labor markets. However, sentiment for lower-income consumers fell. This group anticipates that inflation and their income prospects will both worsen in the year ahead, highlighting the heterogeneity of views across the population. Year-ahead inflation expectations were little changed, inching up from 3.3% in June to 3.4% in July. The current reading is well below the high point of 5.4% from April 2022 but remains above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations were unchanged from June at 3.0%, again staying within the narrow 2.9-3.1% range for 23 of the last 24 months. The National Federation of Independent Businesses Small Business Optimism Index increased 1.6 points in June to 91.0. However, it is the 18th consecutive month below the 49-year average of 98. Inflation and labor quality are tied as the top small business concerns with 24% of owners reporting each as their single most important problem. The net percent of owners raising average selling prices decreased three points to a net 29% seasonally adjusted, still a very inflationary level but trending down. This is the lowest reading since March 2021. “Halfway through the year, small business owners remain very pessimistic about future business conditions and their sales prospects,” said NFIB Chief Economist Bill Dunkelberg. “Inflation and labor shortages continue to be great challenges for small businesses. Owners are still raising selling prices at an inflationary level to try to pass on higher inventory, labor, and energy costs.” The Cass Freight Index shipments component fell 1.6% m/m in June and fell 1.9% m/m in seasonally adjusted terms. On a y/y basis, the index was 4.7% lower in June, after a 5.6% decline in May. Freight markets continue to work through a downcycle which featured its first y/y decline 18 months ago. The past three downcycles have ranged from 21 to 28 months. Declining real retail sales trends and ongoing destocking remain the primary headwinds to freight volumes, but dynamics are shifting as real incomes improve and the worst of the destock is in the rearview. In seasonally adjusted terms, the index is now 12% below the December 2021 cycle peak, slightly greater than the peak-to-trough declines in two of the three downcycles in the past dozen years. With normal seasonality, this index would fall slightly m/m in July and decline about 6% y/y. Summary: The above does not present a clear picture of where the U.S. economy is headed. Growth in GDP is positive but sections of the economy appear to be weakening. Consumer confidence is not increasing strongly and retail sales appear to be weakening. Without strong consumer purchasing, GDP growth will be weak. Industrial production and exports are not growing. The housing sector is not bailing out GDP. Sales of existing homes are weak because of limited supply. But lack of supply has not prompted rapid building of new homes as builders remain cautious because of high interest rates. The outlook for commercial construction is also cautious because of interest rates and the uncertain outlook for the national economy. The Federal infrastructure bill is prompting public and some private construction spending, but it is not enough to support strong GDP growth. There is still a strong probability that the U.S. economy will fall into recession before yearend. Colorado Economic Conditions The Governor’s Office of State Planning and Budgeting reported on June 20 that Colorado’s economic recovery from the pandemic recession continues at a rapid pace, Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 47 although headwinds exist. Labor market inefficiencies due to skill mismatches and job preferences are limiting improvements in the job market. Additionally, the Delta variant has reduced consumer confidence and constrained global supply chains, driving up expectations for higher inflation in the short- and medium-term. Monthly new business applications have stabilized at a high level after rapid increases through mid-2021, while business ownership has increased significantly among Blacks and Latinos. Furthermore, household finances are strong, with wage growth and government aid supporting high savings and low debt, underpinned by accommodative financial conditions. Stronger-than-expected performance on a range of factors has prompted small upward revisions to the near-term economic outlook. The labor market continues to outperform expectations and consumer demand has exceeded expectations since the March forecast. U.S. inflation has also declined alongside inflation expectations and wage growth has continued to moderate. Local inflation growth is expected to outpace the nation’s 4.0 percent due to higher shelter and services demand. A slowdown in economic growth is anticipated by the end of 2023, which then is forecast to rebound back above potential growth in mid-2024. By the end of this year, as tightening financial conditions continue, slowing consumer demand and business investment is expected to drag on economic growth. Colorado is expected to fare slightly better than the nation over the course of the forecast period due to a marginally tighter labor market and a higher proportion of service spending. Overall, short-term economic prospects have improved slightly since the previous forecast, largely as a result of a stronger labor market and resilient consumer spending. A deep or protracted recession is still not currently expected. The strength of the labor market is expected to buoy the economy through the anticipated slowdown that is expected to begin toward the end of 2023. The Colorado Futures Center at Colorado State University ColoradoCast Q2 forecast shows the Colorado economy continuing to avert recession. In the months of March and April, the actual economic growth exceeded the ColoradoCast and the forecast for the subsequent months is for largely positive, albeit weak, growth in the state’s economy. The latest model projects only one month with negative annual rate growth, and that negative growth is only slightly negative, suggesting that the economy likely could retain a modest but positive rate of growth through the remainder of the year. Compared to the first quarter 2023 ColoradoCast, the current model shows the Colorado economy gaining some strength. The performance of most of the drivers of the ColoradoCast improved in the latest model. Housing prices once again turned upward, the yield curve slightly steepened (although still inverted) and the risk premium came off marginally. These improvements, coupled with continued increases in equity markets were sufficient to maintain a forecast of modest growth with fewer months of economic declines. The Leeds Business Confidence Index, published by the University of Colorado at Boulder’s Leeds School of Business, captures Colorado business leaders’ expectations for the national economy, state economy, industry sales, profits, hiring plans, and capital expenditures. The latest index, released on June 29, shows that a cautious outlook remains for 2023. Despite the economy demonstrating resiliency in the first half of the year, Colorado Business leaders’ pessimism extended for another quarter ahead of Q3 Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 48 2023, often citing interest rates, inflation, and general concerns about a recession. The index remained below 50 in the current survey (50=neutral) and was below the long-term average (53.6). The index fell from 45.1 in Q2 2023 to 44.1 ahead of Q3 but increased slightly looking out further to Q4 (44.6). Four of the six components of the index decreased ahead of the third quarter. All 6 individual components of the LBCI recorded negative perceptions (below 50) ahead of Q3 2023. The index was lowest for the national economy and highest for industry sales. Fewer respondents believe the U.S. will enter a recession in 2023 versus last quarter (42.9% versus 56.9%). Interest rates and inflation were the two most noted reasons for panelists’ sentiments headed into Q3 2023, cited by 34% and 27% of respondents, respectively. Just 10.3% of panelists expect local inflation to fall below 3% in 2023; 44.9% expected sub-3% inflation in 2024. Inflation in the Denver-Aurora- Lakewood MSA is projected to increase 4.3% in 2023, according to the Business Research Division’s (BRD) forecasting model. Colorado’s employment recovery has outperformed most other states, increasing 2.78% above the pre-recession peak as of May 2023. This ranked Colorado’s recovery 18th nationally; the nation improved 2.5% above pre-recession levels as of May 2. Year-over-year employment growth in Colorado increased 1.1%, or 30,200 jobs in May 2023. The forecasting model now has Colorado’s employment growth slowing to 1.8% in 2023 after posting 4% growth in 2022. Colorado’s per capita personal income increased 5.3% year-over-year in Q4 2022, ranking Colorado 28th. Personal income increased 5.9%, ranking Colorado 27th. Personal income growth is projected at 7.1% in 2023. Colorado’s GDP increased at an annualized rate of 2.7% in Q4 and 1.7% year-over-year, ranking the state 22nd and 8th, respectively. Colorado’s rural economies, as measured by Colorado’s Rural Mainstreet Index, published by Creighton University, for July climbed to a strong 65.7 from June’s 63.4. The farmland- and ranchland-price index for July rose to 66.4 from 57.5 in June. The state’s new hiring index was 61.9 from 57.5 in June. Colorado’s average unadjusted private hourly wages expanded by 2.8% over the past 12 months (fifth in the 10-state region), while average inflation-adjusted wages slumped by 0.9% during this same time period. Colorado’s rural economy is very strong at the current time. Summary: The above suggests a weakly growing Colorado economy for the rest of the year. Higher interest rates are causing caution on the part of business leaders but a Colorado economic recession does not appear likely. The agriculture and energy sectors appear relatively strong, certainly not poised for a downturn. Northern Colorado Economic Conditions The Northern Colorado economy is still growing, just not as rapidly as in 2022. The past winter months saw sharp contraction compared to 2022 but the spring and early summer months have recovered on an annual basis. Growth will continue to moderate because of more favorable second half 2022 numbers. Growth in the winter months may have been affected by the weather: the winter was the coldest since the early 1990s and precipitation in early summer was ample. Local economic growth was strong, but erratic, during the aftermath of the early pandemic months. We are now comparing to those strong growth months, making currently growth look weaker than it actually is. Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 49 The pattern is, however, very similar to the 2005 to 2008 period leading up to the 2008 recession, i.e., very strong growth weakening into an economic downturn. The U.S. and Colorado economies do not seem to be headed towards an imminent recession so it is unlikely that the local economy will enter recession in 2023. The trend line in the graph below is still trending down after peaking with the advent of the pandemic. The trend line is strongly negative and has been for the last nine months (since October). December, January and February data was very weak, especially in the single-family housing sector. May recovered to show slightly positive growth, year-over- year. The decrease in the trend line was very steep and the forecast for the rest of 2023 and 2024 is still negative. The pattern will change with September data, making positive growth likely. The 30-year picture of growth in Northern Colorado shows a growth peak coming out of the 1991-1992 recession and a similar peak coming out of the 2008 Great Recession. The peak of the 1990s slowed to contraction by 2005, dropping to 10 percent contraction by the end of 2006. The drop from the peak in 2011-2012 leveled off in 2016 and rose moderately until the pandemic hit in early 2020. Growth was very strong (year-over-year, weak 2019) in January and February 2020, before the pandemic hit in mid-March. Growth was also strong near the end of 2020 (again, weak 2019). Growth was strong in March, April and May of 2021 because of the 2020 pandemic crash one year earlier. Growth has definitely been slowing over the past year but appears to be leveling out. The forecast is probably too pessimistic for the rest of 2023. -30 -20 -10 0 10 20 30 40 50 60 1995 2000 2005 2010 2015 2020 Historic Forecast Trend Annual Monthly Growth Rate in Northern Colorado Growth fell rapidly in the winter months compared to 2022 but has recovered slightly in the early summer. It will continue to moderate because of more favorable 2nd half 2022 numbers. An n u a l P e r c e n t a g e C h a n g e The Index of Economic Growth graph below shows that the Northern Colorado economy continued to grow, right through the pandemic. Sure, economic activity dropped sharply when the pandemic hit, but growth quickly resumed as government support programs and Fed policy pumped money into the economy, saving many businesses and providing funds for consumers to spend. Pandemic disruptions caused structural changes, boosted the housing sector, created a much bigger delivery service sector, and restructured the food and beverage sector. The 2020 Christmas season was VERY strong as work-at- home residents splurged on equipment, gifts and remodeling; Christmas season spending in 2020 was 25% greater than the year before. The 2021 season did not match 2020 Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 50 spending and, although retail spending in the 2022 Christmas season was very strong, the rest of the economy was not, thus pulling the Index of Economic Growth down. The last time the trend line in the Index graph was this flat was in 2004 (and perhaps 2015), the year in which the housing sector peaked before the Great Recession starting four years later. As we’ll see below, employment in Northern Colorado is increasing and retail sales are still strong (inflation) but the single-family housing sector (and maybe commercial construction) is pulling the rest of the economy down. The Northern Colorado economy is currently five times its size in 1991. 0 100 200 300 400 500 600 700 1995 2000 2005 2010 2015 2020 Historic Forecast Trend Index of Economic Growth in Northern Colorado Economic growth in Northern Colorado is leveling off. This compares to the mid-2000s but it was four years before the recession started. Gr o w t h I n d e x ( 1 9 9 1 = 1 0 0 ) Employment My data on employment by place of residence goes back to 1990 (graph below). This data was benchmarked by State economists in early 2021 to reflect better models and better data coordination with federal agencies. Growth in employment in Northern Colorado only slowed in the 1991-1992 recession, then grew steeply through 2007. Employment growth leveled off for three years during the Great Recession before resuming rapid growth (even faster than in the 1990s) into the end of 2019. The pandemic caused a steep decline in employment early in 2020 but the economy, and employment, was recovering by the end of the year. There was another jump in Oct. and Nov. 2021 and 2022 saw employment grow strongly. July, August and September of 2022 were strong growth months, with monthly annual growth rates averaging 4.55 percent. Growth rates above 3 percent ended in September 2022 and have been in the one to two percent range since. March, April and May of this year were at or just above two percent. The big year-over-year fluctuations caused by the pandemic and its recovery appear to be over. The forecast in the graph below is for continued, more normal, growth. It has taken three years to endure and recover from the Covid pandemic. Unemployment peaked in Northern Colorado in 2010 and 2011 but then dropped to very low levels (2 percent unemployment) by 2017/2019. The pandemic caused a rapid increase to over 10 percent early in 2020 but the rate dropped to below three percent by early 2022. The labor force has changed because of the pandemic. More boomers dropped out than would have without the disruption of the pandemic. The labor market became more bipolar – college educated versus non-college-educated. Working from Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 51 home became normal for those who could (college educated and technology literate). Child care costs caused many to hesitate before returning to work outside the home. Remote learning caused many families to reassess family educational processes. Now inflation and a looming recession promise further changes. The labor market is in the midst of a restructuring but unemployment remains very low. Current levels of unemployment are historically unusual, typically being reached only at the top of economic cycles. Two percent unemployment in Northern Colorado is probably the ‘natural rate of unemployment’, a level which is normal in a healthy, growing economy. If Northern Colorado can maintain a 2-3 percent level of unemployment for the rest of 2023, we indeed may experience a ‘soft landing’ in our economy. 150000 200000 250000 300000 350000 400000 1990 1995 2000 2005 2010 2015 2020 Historic Forecast Trend Employment by Place of Residence in Northern Colorado Economic growth continues to be strong in the U.S. and NoCo. The 1st and 2nd quarters were much stronger than anticipated. The forecast is for continued growth. Nu m b e r E m p l o y e d 0 2 4 6 8 10 12 1990 1995 2000 2005 2010 2015 2020 Historic Forecast Trend Unemployment Rate by Place of Residence in Northern Colorado The unemployment has probably bottomed out at the 'natural rate of unemployment'. I expect it to increase slowly for the rest of 2023. Pe r c e n t o f L a b o r F o r c e U n e m p l o y e d There were about 375,000 employed persons living in Northern Colorado in June. This is almost 2.4 times the number of employees in Northern Colorado in 1991, the base year for the Employment Index (not shown). This is a long-term annual growth rate of about 3 percent. During this time the U.S. economy has seen three recessions but there has been only one slowdown in the Northern Colorado economy. The pandemic caused a very rapid decrease in employment in Northern Colorado in early 2020 but the economy recovered VERY rapidly as Federal (fiscal) money was pumped into the economy and vaccines were quickly developed. Employment in Northern Colorado is now above pre- pandemic levels. Housing The housing sector held up well during the pandemic crisis. Workers were sequestered, giving them plenty of time to think of reasons to buy a house where they would have more space to work-from-home. This is especially true of workers living in urban, densely populated areas like Denver. The Fed flooded the financial markets with credit and Congress passed fiscal policies to supplement unemployment benefits and protect incomes and business operations. Mortgage rates were lower than they had been in several decades. But within the past year, mortgage rates have increased rapidly and the Fed is signaling further increases as long as inflation persists. This policy is rapidly dampening the Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 52 housing market in Northern Colorado. Demand for single family homes has decreased rapidly as interest rates have risen. The supply of houses for sale is still inadequate so prices continue to go up, but at a slower pace. Many fewer persons can qualify for a mortgage at current interest rates. Builders are facing significantly greater uncertainty. Eleven of the twelve months of 2022 saw decreases in single family residential permits issued – and June was barely positive. Eight of the twelve months had double-digit decreases. The average decrease in the last six months of 2022 was 33.8 percent from the corresponding month in 2021. This weakness persisted in the first three months of 2023 at about the same pace, although the size of the decreases is diminishing. The decreases persisted for the first six months of 2023, although May’s drop was on three percent. This data portends a rapid slowing in construction of new single family detached homes. Builders are concerned by mortgage rate increases, wage pressures, labor shortages, and supply chain costs. Colder than normal weather during the past winter also slowed construction. This severe slowing of the home construction sector can, by itself, precipitate a recession. The forecast in the graph below is for the number of new permits being issued to stabilize around 350 per month. The number of 5+ unit housing permits issued in Northern Colorado fell to zero for a month in early 2020 - last seen in 2015. The number of apartment permits issued fell rapidly in 2020, recovered moderately in 2021 and exploded in 2022, especially after the Fed started its three-quarter-point rate increases. The forecast is for demand to remain strong in this sector of the home construction market. As mortgage rates continue to increase and single family housing affordability declines, apartments will be needed to meet the demand by those not able to afford single-family homes. The trend line has turned sharply and steeply upward. The forecast in the graph below is for the number of apartment permits issued to stabilize in the 200-250 range. Perhaps this is a new normal for this market segment as the supply of single family detached homes for sale remains low because of high interest rates. Thus, demand for apartments is likely to remain strong as long as new jobs are available in Northern Colorado and mortgage rates remain high. 0 100 200 300 400 500 600 700 800 90 95 00 05 10 15 20 Historic Forecast Trend Number of Single Family Detached Housing Permits Issued in Northern Colorado Single family permits issued were lower in the spring than any time for the past five years. The supply of houses for sale is low but builders are still not inclined to build new houses. Nu m b e r o f P e r m i t s I s s u e d 0 100 200 300 400 500 600 1990 1995 2000 2005 2010 2015 2020 Historic Forecast Trend Number of 5+ Unit Permits Issued in Northern Colorado Permits for apartment units have dropped back to more reasonable levels after a couple of very strong months early in the year. The forecast is below the trend line. Nu m b e r o f P e r m i t s I s s u e d The value of single family detached permits turned up steeply in 2018, indicating increased demand for higher end homes. That strength continued in 2019 after a temporary slowing early in the year. There was a big jump in the value of single family Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 53 permits in January 2020 and it was repeated in the summer months. 2021 surpassed even that strong showing. But the situation has changed in 2022. Ten of the months in 2022 saw negative annual monthly changes, February and June being the exceptions. These decreases continued through the first quarter of 2023, although at a decreasing rate. The trend line is dropping rapidly; the market at all price levels for single family homes has seemingly collapsed. Colder than normal weather during the winter was also a factor. Since March there has been a recovery in the value of permits being issued which should stop the decline in the trend line. Much depends on inflation, the Feds reaction to it, and the short run level of interest rates. The Growth Index for single-family permits in early 2022 was quadruple its level at the bottom of the Great Recession and in 1991 and was approaching its level at the peak of the market in 2003-2004. But since December 2022 the housing market in Northern Colorado has slowed drastically, recovering somewhat in March-June, 2023. The Growth Index is now about three times its 1991 level. The number of permits being issued is back to 2014 levels. 0.0E+00 4.0E+07 8.0E+07 1.2E+08 1.6E+08 2.0E+08 90 95 00 05 10 15 20 Historic Forecast Trend Value of Single Family Detached Housing Permits Issued in Northern Coloraod The value of permits being issued is dropping significantly. It seems the high end of the market for new houses is weak. Va l u e : 0 8 = H u n d r e d o f M i l l i o n s o f D o l l a r s 0 100 200 300 400 500 600 700 1990 1995 2000 2005 2010 2015 2020 Historic Forecast Trend Growth Index for Number of Single Family Detached Housing Permits Issued in Northern Colorado Single family permits being issued continue to weaken. Gr o w t h I n d e x ( 1 9 9 1 = 1 0 0 ) Retail Sales The rate of increase in retail sales in Northern Colorado started slowing in 2014 and by 2015 had established a slower rate of growth which was still evident in 2016. However, in 2017 a faster rate of growth returned and was maintained through 2019, although the 2019 Christmas season was weaker than 2018. Retail sales dropped drastically, both nationally and locally, with the advent of the pandemic in February and March, 2020. The effects were uneven, with restaurants, bars, lodging, travel and tourism being most severely affected. However, total retail sales slowed for only two months with the advent of the pandemic. Since March and April 2020, retail sales in Northern Colorado have resumed growing rapidly. Consumers spent freely during the 2020 Christmas season but that rate of spending was not repeated in 2021. Retail sales continued strong in 2022, primarily because of inflation. Retail sales in Northern Colorado are currently averaging $3.0 BILLION per month and the forecast is for continued growth. Inflation (price increases) increases the dollar value of retail sales even when the actual number of items sold does not increase. Christmas sales in December were $4 BILLION, easily surpassing 2020. The increase from December 2020 Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 54 to December 2022 can almost entirely be accounted for by inflation. The dollar value of retail sales will continue to increase until inflation is tamed. Currently, consumer buying is weakening, supported increasingly by credit sales. I expect the trend line in the graph below to become less steep but it may not level out as it did in 2008-2009. Retail sales are now ten times their level in 1991, the base year for the Index which I calculate and which is shown below. The economy, however, is only five times larger than its 1991 level. This indicates that Northern Colorado is a regional shopping destination, drawing, especially, shoppers from Laramie, Cheyenne, southern Wyoming and southwestern Nebraska, as well as northeastern Colorado. 0 1000000 2000000 3000000 4000000 5000000 90 95 00 05 10 15 20 Historic Forecast Trend Value of Retail Sales in Northern Colorado Retail sales continue to increase at a rapid pace in inflated dollars, as we would expect. The rate of growth should slow as inflation comes under control. T h o u s a n d s o f D o l l a r s 0 400 800 1200 1600 1990 1995 2000 2005 2010 2015 2020 Historic Forecast Trend Growth Index for Retail Sales in Northern Colorado Retail sales continue to grow rapidly, boosted by inflation. They are now 10-11 times their level in 1991. Gr o w t h I n d e x ( 1 9 9 1 = 1 0 0 ) Summary So, what’s going to happen over the next three to six months? Three months ago it seemed certain that the U.S. economy was headed towards recession. Now, it is not so obvious. The Fed has continued to raise interest rates, although at a slower pace. Inflation is coming down, although declines may be harder to realize for the rest of 2023 (because of year-over-year comparisons with late 2022 price levels). Home construction, including apartments, is slowing. Home prices and rents continue to increase, although more slowly. Employment continues to increase and wages are going up. There are still labor shortages in some sectors. Consumer spending appears to be slowing and consumer confidence is weakening. Manufacturing is slowing, as are exports. Imports are dropping as consumer spending weakens. Business investment and construction are relatively strong as infrastructure legislation stimulates and on-shoring continues. The Colorado economy may slow but is not likely to enter recession territory. The outlook, however, is uncertain. The Northern Colorado economy will grow through this turmoil. Single family housing will be a drag but other types of construction may take up the slack. The energy sector is resilient and may not slow much, depending on raw energy prices. Retail sales will not Current Economic Conditions DRM Real Estate Advisors, LLC Consulting, Research & Valuation 55 contract because of inflation but consumer spending may slow in real terms. Banking problems may make credit tighter, slowing all types of construction. Uncertainty will increase until interest rates stabilize, labor shortages end, consumers resolve credit and spending imbalances, and international aggression stabilizes. Too many imbalances. In the course of performing appraisal work, we frequently discuss the current real estate market with numerous market participants including commercial brokers with Realtec, Sperry Van Ness and DTZ (formerly Cassidy-Turley until January 2015) plus a variety of buyers/investors and bankers. All express the similar sentiment of the uncertainty plaguing the market at this time—the recent reduced world oil prices, the rising water prices in Northern Colorado, and the return of “irrational exuberance” in some market participants—but all report seeing some significant recent improvements and are optimistic about continued improvements in the real estate market. Owner-users and investors sense opportunities, but the vast majority of the “steals” from distressed real estate in Northern Colorado are gone. Borrowers are still finding some resistance in getting financing. Bankers report tougher borrower requirements and increased scrutiny of cash flows. Banks are aggressively lending on owner-occupant deals, but investment properties (i.e., non-owner occupied) can still be challenging to get financed. Banks are re-financing performing land loan, but financing new land purchases or development can be challenging. During the Recession, the housing market was forced to build a private investor, non-bank financing network—as a result, the large homebuilders are now internally financed. Small homebuilders find financing speculative builds very difficult, and usually only in conjunction with some pre-sales. Like most slow markets, cash is king—the ability to mortgage a property to the hilt and get interest carry money is gone. Banks financing new construction deals now demand the owner’s cash in advance—not at the end of the deal as in the past. As a result, some buyers are challenged to execute deals in this market. After the Recession, we experienced uncharted waters in the real estate market for the last several years, but those conditions had been significantly improving. Then, the Coronavirus situation imposed new but undefined risks on the market. We checked for COVID-19 impacts on residential real estate values. Our study of residential real estate sales volumes and values in Northern Colorado showed that there was a temporary slowdown in sales volume but no decline in year-over-year prices. Commercially, similar sentiment appears to be holding sway, although there are still some pockets of impact as businesses struggle to find employees which then impacts their ability to operate at full strength and recover from the lost income during the pandemic. The biggest impact from COVID was soaring inflation impacting supply lines and prices. Now, the Fed’s attempts to control inflation have roiled the real estate market with Prime now at 8.50% after increasing 525 Basis Points or 162% in the last 17 months. Commercial loan rates have followed, making financing challenging. Thus, the new “normal” is still being defined. To the extent possible, the appraiser believes current market conditions were adequately considered in the estimate of market value in this report. Approaches to Value DRM Real Estate Advisors, LLC Consulting, Research & Valuation 56 APPROACHES TO VALUE Professional appraisal practice customarily includes the Cost, Income, and Sales Comparison Approaches to arrive at a final value estimate. The Cost Approach involves estimating the current replacement cost of the improvements, less any depreciation as of the date of the appraisal, plus the estimated value of the land. The land value is developed through comparing recent sales of similar vacant parcels to the subject site as if vacant and available to be put to its Highest and Best Use. The estimates of replacement costs are based on the Marshall Valuation Service and knowledge of the local market. The Income Approach takes a net income stream and uses a Capitalization Rate to convert it into a value indication. The estimate of economic rent, defined as rent that a property would demand if available for lease as of the date of the appraisal, is used to develop the potential gross annual income. In the Income and Expense Statement, deductions are made for vacancy, rental loss and operating expenses paid by the owner to derive a Net Operating Income. Through analysis of comparable sales and/or examination of the financial market, a Capitalization Rate is calculated. Net Income divided by the Capitalization Rate indicates value by the Income Approach. One of the best indications of the Market Value of a property is the Sales Comparison Approach wherein recent sales of similar properties are compared to the subject. The comparable sales may be analyzed in the following three ways: l. Gross sale price per square foot or gross sale price per unit (sale price divided by square footage of the improvements or the number of units). 2. Direct comparison to subject after allocation of sale price between land and improvements. This comparison is done on a per-square-foot basis. 3. Use of the Gross Income Multiplier (sale price divided by gross income at the time of sale). The use of one or more of the techniques is determined by the quantity/quality of data available. In some instances--depending upon the type of property being appraised or the purpose of the appraisal--one or two of the approaches may carry more weight or may furnish a more reliable indication of value than the others. Sometimes—because of use, age, design, obsolescence or inadequacy of data—one may be accorded little weight in a correlation of the approaches into a final value estimate. Exhibits used in each approach describe the data and explain adjustments. For the subject property, all three approaches to value are used. Since the subject is currently leased, we first use an Income Approach. The current lease runs through October 2026 (28 more months) and the Tenant also has the Option to Extend another 36 Months (to 2029), so it is an important factor in valuation. The Sales Comparison Approach to value is also used. For an existing commercial building that will be owner-occupied, the Sales Comparison Approach is generally the best measure of value. Unfortunately, Estes Park is a small market—it has a limited number of commercial property sales in total and none are daycare/preschool properties, so the adjusted value indications vary widely. Lastly, we also use the Cost Approach as a Test of Reasonableness and a measure of scope, which is particularly useful given the relatively large site size. We can get a fairly reliable estimate of Market Value of the underlying site as if it were vacant for consideration in Highest and Best Use and then conservatively add the contribution of the improvements. Income Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 57 INCOME APPROACH Methodology The Income Approach is a method of converting the anticipated economic benefits of owning property into a value estimate through capitalization. The principle of "anticipation" underlies this approach in that investors recognize the relationship between an asset's income and its value. In order to value the anticipated economic benefits of a particular property, potential income and expenses must be estimated, and the most appropriate capitalization method must be selected. The two most common methods of converting Net Operating Income into value are Direct Capitalization and Discounted Cash Flow analysis. In Direct Capitalization, Net Operating Income is divided by an overall rate extracted from market sales to indicate a value. In the Discounted Cash Flow method, anticipated future net income streams and a reversionary value are discounted to an estimate of net present value at a chosen yield rate (internal rate of return). Typically, the Direct Capitalization Technique of the Income Approach is the most prudent method of valuing the subject property in Leased Fee. It is the most widely used form of valuation by the market. According to the 2024 Winter/Spring Real Estate Investment Survey by Lowery Property Advisors/Burbach & Associates, Inc., 95% of the survey participants place “primary” reliance on the Direct Capitalization technique. The survey also shows 95% of the survey participants place “primary” reliance on the Sales Comparison Approach. According to that survey, only 9% of the respondents rely heavily on DCF analysis. In the subject’s case, with the lease contract only set for another 28 months, a DCF would be highly speculative. That said, we will look at Direct Capitalization analysis for the Leased Fee Estate. Potential Gross Income Contract Rent Although the October 15, 2019, sale had not yet closed, the Buyer/Current Owner ’s representative Stephen Faillaci of WeBe TCB LLC signed the current lease on October 1, 2019, which commenced on November 1, 2019, and runs 7 years through October 2026 (see Lease in Addendum). The lease also grants the Tenant an option to extend the lease another 3 Years (Paragraph 4.3) at current rent plus 3.0% annually. Lease terms are NNN (“triple net”) meaning the Tenant pays a Base Rent plus directly pays or reimburses the Landlord for typical operating expenses like all utilities plus property taxes, property insurance and maintenance/repairs. As the table on the next page shows, the Year 1 Base Rent was set at $3,200 per month or $38,400 annually, which equates to $20.53 per square foot. Clearly, a typical round base rent of $20 per square foot or $21 per square foot was not contemplated—in Estes Park, Modified Gross leases are the norm and they simply revolve around a starting round-number rent per month, which occurred herein. Income Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 58 The monthly Base Rent increases every anniversary by 2.5% per year. The lease is now in its 5th Year (November 2023 – October 2024) and is at $3,532.20 per month or $42,386.40 annually or $22.67 per square foot. The initial NNN reimbursements were set at $612.08 or $7,345. Typically, ownership then reconciles the operating costs for a year (typically a calendar year as to property taxes) and either collects a shortfall from the Tenant or pays an overpayment back to the Tenant. Market Rental Rates Based on Comparable Leases The application of this methodology assumes that tenants are in place and paying rent. The potential gross income is the economic rent obtainable for the subject property in the open market. We have investigated the local market in order to develop comparable rentable data for utilization in formulating a potential gross income estimate for the subject property. Frankly, a special use tenancy like a daycare does not have “Market Rent” per se—there are not a bunch of competing small daycares so as to establish an average. With respect to Estes Park, their general commercial rent rates are in the same range as the subject’s Base Rent (low to mid- $20’s per square foot), but the majority of Estes retail and office properties rent on a Modified Gross basis. The fact that the subject has NNN terms and passes all operating costs onto the Tenant makes its income stream superior to most properties in Town. Thus, no effort is made to estimate “Market Rent.” This analysis assumes that the subject’s current Contract Rent is reasonably representative of its Market Rent, and so is analyzed accordingly. Since we judge Contract Rent to be Market Rent, then its current Leased Fee Estate is really the same as Fee Simple Estate. So, we model the subject as having remaining Base Rent of $102,107 over 38 months, which then equates to an average of $43,764 annually or $23.40 per square foot of Net Rentable Area. Vacancy and Collection Loss The subject is currently 100% leased. Estes Park commercial vacancy rate is minimal. The subject is a special purpose property, but it has been continuously rented for the last 4+ years with 2.33 years remaining on the lease and an option to extend another 3 years. Given the existing tenancy and current market statistics, we will assume a minimal 2% stabilized vacancy and collection loss factor. Income Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 59 Effective Gross Income As we’ll show, our Pro Forma predicts $20,808 in operating expenses or $11.13 per square foot which is then added back to Potential Gross Income as expense reimbursements before vacancy deductions. Based on our estimated Market Rent for the contract rent plus nets and our stabilized vacancy rate estimates, we estimate Pro Forma Effective Gross Income of $63,281. Operating Expenses To some degree, expenses on NNN-leased properties are of limited importance, as the leases call for them to be reimbursed. We did not receive actual Profit & Loss statements for the property. Accordingly, we will estimate operating expenses based on that data as well as other such properties we have appraised, supported by data from the Urban Land Institute and BOMA, as well as our experience with other, similar operations. In addition, we confirmed taxes for the subject with the Larimer County Assessor’s Office. We then prepared a Pro-Forma Income and Expense Statement based on our assumptions of rent and landlord expenses. The Pro Forma is presented later in this section. In our Pro Forma, we use estimated 2024 property taxes, plus allowances for property insurance, utilities including trash, grounds maintenance and a maintenance and repairs allowance of 5% annually. Thus, our Pro Forma predicts $20,808 in operating expenses or $11.13 per square foot which is then added back to Potential Gross Income as expense reimbursements before vacancy deductions. On the non-reimbursable side, we include a minimal flat rate management expense of 2.5% applied to Base Rent, and model an annual allowance of 1.25% for Reserves for Replacements of short-lived items like mechanical equipment, roof, parking lot surface, etc., bring total operating costs to $22,449. Net Operating Income (NOI) Based upon the Pro Forma Income and Expense Statement, the estimated Net Operating Income (NOI) is $40,832 or $18.48 per square foot. We note that this is based on stabilized occupancy with a 2% vacancy allowance. Capitalization Rate Selection The third step in the Income Approach is to estimate an appropriate Overall Capitalization Rate (Cap Rate) for the subject property. Capitalization is the process of converting an anticipated Net Operating Income into present value by use of a Cap (interest) Rate that will attract investment capital. Prior to estimating an applicable capitalization rate for the subject, we believe the following factors are important to note. These factors are described as those factors that both increase and decrease the risk associated with the subject property: Income Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 60 Factors Increasing Risk • The subject operates in a small market area. • The subject improvements were built in 1985, and so they are 39 years old. Factors Decreasing Risk • The subject is in Average-Good condition. • There is very limited competition for the daycare business in Estes Park. • Currently, there are huge barriers to new competition in that high construction costs are limiting commercial construction in general. • Occupancy is enhanced by a long-term tenant who appears to be operating very successfully. • Our estimate of Net Operating Income includes a reasonable allowance for vacancy and a line-item deduction for capital reserves. If data is available, one of the most reliable methods of deriving a Cap Rate is from the analysis of sales from comparable properties. The Overall Cap Rate can be derived by dividing the net income of a comparable by its sale price. The advantage of this technique is that it reflects the rate of return being received by investors in the marketplace. Market Extraction In the Sales Comparison Approach, we looked for daycare property sales that had Cap Rates. Technically, the current owner purchased the property as an investment property based on the brand new lease in place. At that time, the tenant was relatively new so there was no proven durability as to the lease payments. Over the 7-year contract lease period, there was an annual expected income (simplistically, applying our vacancy and net expense deductions herein) of the average rent (Year 4) at $39,006 annually for an indicated Cap Rate of 8.31%. In the comparable sales included in our Sales Comparison table, Comparable No. 1 just sold this month (June 2024) for $3.168 Million, which indicates a unit price of $415 per square foot at a Cap Rate of 7.28%. However, that property was totally remodeled in 2022 into a modern daycare that met all current building code requirements for schools and featured a regional daycare provider on a NNN lease with 3% annual Base Rent increases and 11 years remaining. It was listed For Sale asking a 6.375% Cap Rate and sold nearly a year later at a 7.28% Cap Rate. Investors buy long-term income streams—thus, the 11-year lease makes it significantly superior to the subject with its 28-months remaining. We then looked in all of the CoStar Colorado market—metro Denver and Larimer and Weld County—specifically searched for sales occurring in the last 3+ years (since January 2022) of daycare properties that sold and displayed a cap rate. Unfortunately, there were only 5 such sales (not including the one above) and their Cap Rates ranged from 6.0% to 6.67% with an average of 6.28% and a median Cap Rate of 6.15%. Again, investors buy long-term income streams, and all of these sales had new / near-new lease terms of 10+ years. Income Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 61 Band of Investment When insufficient market data is available, the Band of Investment Technique can also be used to estimate a capitalization rate. Since an overall capitalization rate reflects the complete cash- flow requirements of an investment, the components should reflect the cash-flow requirements for each portion of the capital (equity and mortgage). The annual return necessary to satisfy the mortgage position (debt service) is determined by the loan-to-value ratio and the annual mortgage constant. Typical financing for a property such as the subject usually does not exceed 65% to 75% of the value. According to local lenders, the average commercial real estate loan is based on 75% loan to value, 7.25% to 8.0% interest rate, amortized over 20 to 25 years with rate adjustments every 3 to 5 years. The annual return required to satisfy debt service for a loan amortized over 25 years at 7.25% interest is represented, then, by the mortgage constant 0.08674. The equity position of the owner is usually 25% to 30% of the value, although we have seen projects at 40% to 50% equity to make properties cash flow. Herein, we’ll use 35% down. Under current market conditions, investors are basing investment decisions on cash-on-cash returns of 5% to 15% (that is, the cash remaining after debt service must return 5% to 15% on their equity investment, disregarding any increase in equity through appreciation or amortization). The return is dependent on the perceived risk of the investment, with higher risk investments demanding higher rates of return. The subject is a 39-year-old daycare property in small-town market Estes Park—it’s in Average-Good condition physically and is operating successfully in a market with limited competition. Assuming stabilized occupancy at Market Rent, an average return rate of 5% to 7% is considered necessary. The assumptions of the Band of Investment Technique are presented in the following tables: Band of Investment @ 7% Equity Return-7.25% Interest Rate-25 Year Amortization Component Ratio X Rate = Weighted Rate Mortgage 65.0% X .08674 = .05638 Equity 35.0% X .070 = .0245 Indicated Rate (Ro) .08088 Rounded To: 8.10% Band of Investment @ 5% Equity Return-7.25% Interest Rate-25 Year Amortization Component Ratio X Rate = Weighted Rate Mortgage 65.0% X .08674 = .05638 Equity 35.0% X .050 = .0175 Indicated Rate (Ro) .07388 Rounded To: 7.40% Thus, the Band of Investment technique indicates a cap rate of 7.40% to 8.10%. The weakness of this technique is it does not recognize the return of capital inherent in the mortgage amortization process, which payment includes both interest and principal. In the first year alone, the mortgage constant pays principal of approximately 1.47% of the loan amount. Income Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 62 Another method of estimating cap rates is via survey. Investor Surveys For this analysis, we have researched several real estate investor surveys’ that provide benchmark data for rates of return (i.e., capitalization, terminal and discount rates) as well as rental rates and operating expenses increase for office properties, such as the subject. The RealtyRates.Com 2nd Quarter 2024 Investor Survey for “Special Purpose—Schools & Daycare Centers” is presented below. The survey cites a range of 6.68% to 15.76% in surveyed rates, with an average rate of 11.20%! Clearly, Special Purpose properties are not a favored investment vehicle, and so carry larger risks. That said, we could see the subject’s condition, low-competition location quality, and current occupancy would drive it towards the lower end of the range, better than average. Our experience has been that the RealtyRates cap rates have always tended to be higher than the rates reported in Northern Colorado, but they are instructive and, at worst, provide an upper limit on local rates. Income Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 63 We also looked at the latest Lowery Property Advisors Investment / Burbach & Associates Survey—performed semi-annually, the Winter/Spring 2024 edition is the most recent. Unfortunately, none of the categories involve daycare. Arguably, “Nursing Homes” and “Retirement Communities” have some relationship, but the survey shows they range from 10% to 10% with an average rate of 10% --meaning they had one respondent cite 10%. Cap Rate Summary Unfortunately, we only have two solid indicators. First, the purchase of this property back in 2019 indicates an 8.31% Cap Rate. Certainly, it recognizes the subject’s location and all its features—it’s just that it is a data point from 5 years ago. Thus, we can try to compare the two market periods to see if we can measure that impact, and then apply it to the subject’s 5-year-old Cap Rate that inherently recognizes all of the subject’s attributes. Today’s market, considered as 2022 to now in 2024, shows 5 sales (not including the one above) with Cap Rates ranging from 6.0% to 6.67% with an average of 6.28% and a median of 6.15%. We looked back at daycare investment sales when the subject last sold. That market, considered as 2017 through 2019, shows 14 sales with Cap Rates ranging from 6.75% to 7.89% with an average of 7.13% and a median of 7.0%. Thus, a Cap Rate in today’s market would arguably transact at an Average Rate of 88.1% of the 2019 rate (6.28% / 7.13%)—thus, 88.1% against the 2019 Cap Rate of 8.31% points to a 2024 Cap Rate of 7.32%. Income Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 64 Similarly, a Cap Rate in today’s market would arguably transact at a Median Rate of 87.9% of the 2019 rate (6.15% / 7.0%)—thus, 87.9% against the 2019 Cap Rate of 8.31% points to a 2024 Cap Rate of 7.30%. Second, we then consider the single June 2024 sale in Fort Collins that indicates a 7.28% Cap Rate. It represents today’s market, but the impact of a Front Range market location in a totally- remodeled building with a long-term lease. In the Sales Comparison Approach, the net adjustment for those physical differences is -5%, inclusive of the subject’s site size. So, we could use today’s market Cap Rate of 7.28%, reduce it by 5% (i.e., 95% x 7.28%) to get another Cap Rate indication of 6.92%. Considering the various data points and comparison, we believe there is strong support for a Cap Rate range of 6.90% to 7.30%. Value Indication by the Income Approach The final step in the Income Approach is to apply the estimated Capitalization Rate to the Net Operating Income (NOI) to estimate the subject’s Market Value. This calculation is as shown: 7.30% Cap Rate Net Operating Income (NOI) $40,832 -------------------------------------- = ----------- = $559,000 (Rounded) Capitalization Rate (Ro) 7.30% 6.90% Cap Rate Net Operating Income (NOI) $40,832 -------------------------------------- = ----------- = $592,000 (Rounded) Capitalization Rate (Ro) 6.90% Thus, based on the subject’s existing contract rent rate considered as Market Rent, a minimal stabilized vacancy rate of 2.0% and market-based operating expenses, the subject’s indicated Market Value “As-Is” by the Income Approach is: Rounded: $559,000 to $592,000 Daycare Property, 1250 Woodstock Drive, Estes Park CO Income: Mountaintop Childcare Inc 1,870 SF @ $23.40 /SF = $43,764 Avg 28 Mos Remaining = $3,647/Mo => $23.40/SF $43,764 Reimbursement NNN Operating Expenses 1,870 SF @ $11.13 /SF = $20,808 $64,572 Less Vacancy and Collection Loss @ 2.0%($1,291) $63,281 Expenses: Reimburseable Property Taxes $12,110 $6.48 /SF Insurance $1,870 $1.00 /SF Utilities Incl Trash $3,740 $2.00 /SF Grounds Maint @ $75/mo $900 $0.48 /SF Maintenance and Repairs @ 5% $2,188 $1.17 /SF Non-Reimburseable $20,808 $11.13 /SF Management/Leasing Comm @ 2.5% $1,094 $0.59 /SF Replacement Reserves @ 1.25% $547 $0.29 /SF $0.88 /SF TOTAL EXPENSES: 35.5% ($22,449) NET OPERATING INCOME: $40,832 VALUE ESTIMATE CAPITALIZED AT: Cap Rate: 7.30% Value: $559,000 $299 /SF Cap Rate: 6.90% Value: $592,000 $317 /SF Income and Expense Pro Forma Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 66 SALES COMPARISON APPROACH Sales Comparison Approach as utilized in this appraisal is defined as: “A set of procedures in which a value indication is derived by the property being appraised to similar properties that have been sold recently, applying appropriate units of comparison, and making adjustments to the sales prices of the comparables based on elements of comparison. The Sales Comparison Approach may be used to value improved properties, vacant land, or land being considered as though vacant; it is the most common and preferred method of land valuation when comparable sales data are available.”4 As discussed in the Approaches to Value section of this report, the Sales Comparison Approach shows what purchasers are willing to pay for properties similar to the subject. The comparable sales can be analyzed in three ways: 1) gross sale price per square foot; 2) sale price allocated to the building and land separately; and 3) Effective Gross Income Multiple Technique. The unit of comparison used in this appraisal is the price per square foot of Gross Building Area. The first step in the Sales Comparison Approach is to research the market to obtain the most recent sales information available involving commercial buildings sales that are reasonably similar to the subject property in terms of general investor or user appeal. Again, Estes Park is a small market with a limited number of commercial property sales at all. In the search for comparable property sales, we looked for sales of smaller properties because the subject has a Gross Building Area of just 1,870 square feet—a very small building in the scope of small-town Estes Park commercial properties. We did not find any daycare or preschool property sales—indeed, we only found one other professional daycare in Estes. However, we did find the 2019 sale of the former Jehovah’s Witness Church purchased by EP Senior Citizens Center—it is a great scope sale with a large open meeting area, two restrooms, a kitchen area and some office space on a similar-sized site. So, we ended up using it and the subject’s 2019 sale. We then sought more recent sales of truly similar-use properties, but in Front Range locations such as Loveland and Fort Collins. The Front Range has a similar limited number of daycare property sales, and they were much larger. We found a 2024 sale of a similar age property (but extensively remodeled) in Fort Collins, another 2022 sale in Fort Collins and an owner-occupant sale in 2021 in Windsor. The following pages present a summary table, photos of the comparable sales, and a discussion of the analysis of the five selected comparable sales as related to the subject. 4 The Dictionary of Real Estate Appraisal, 3rd Edition, Appraisal Institute, pg. 318 Name Grantor Sale Price Site SqFt Const Quality & Condition Parking $/SqFt No. Property Grantee Date Bldg SqFt Year Built Basement Cap Rate Comments Sub Mountain Top PreSchool Day Care We Be TCB LLC 0.87-Acres Avg Wood Frame Avg-Good Condition Ltd Asphalt 9- Spaces 1250 Woodstock Drive Estes Park TBD Inspected 26-Jun-2024 1,870 Built 1985 None Owner-Users 1 Once Upon a Childcare Daycare Greybridge FTC LLC/LEH CO FtC LLC $3,167,680 0.85-Acres Avg Wood Frame Avg-Gd Condition Paved Pkg 24 Spaces $415 1247 Riverside Drive Fort Collins CO 4262 Royal Pine LLC 20240023731 12-Jun-24 7,625 Built 1984 Total Remodel 2022 None Investors 7.28% Cap 2 Vacant Daycare Jason & Andrea Diaz $1,175,000 0.75-Acres Fair-Avg Condition Frame Avg Quality Avg Paved Parking $194 2464 Marquette Drive Fort Collins CO WP FOCO LLC 20220057965 21-Sep-22 6,063 1980 Remodeled 2022 None Owner- Occupant 3 Windsor Commons Child Care Windsor Commons Child Care Center LLC $3,200,000 1.67-Acres Vy Good Condition/ Avg-Good Construct Good Paved Parking $307 1215 Automation Drive Windsor CO Scott & Cynthia Bright 4737137 19-Jul-21 10,413 Built 2005 Total Renovate 2009 None Owner-Occ 4 Mountain Top PreSchool Day Care J&J Enterprises Inc $469,500 0.87-Acres Avg Wood Frame Avg Condition Ltd Asphalt 9- Spaces $251 1250 Woodstock Drive Estes Park We Be TCB LLC 20190064149 15-Oct-19 1,870 Built 1985 None Investors 8.31% Cap 5 Former Jehovah's Witness Church Ronald Hartzog $525,000 0.79-Acres Vy Good Condition/ Avg-Good Construct Good-- Approx 26- Space On- Site $210 1760 Olympian Lane Estes Park CO Estes Park Senior Citizens Ctr 20180006494 16-May-19 2,500 1972 Renovated None Owner-Occ Minimum: $469,500 1,870 Minimum: $194 Maximum: $3,200,000 10,413 Maximum: $415 Median: $1,175,000 6,063 Median: $251 Average:$1,707,436 5,694 Average:$276 This property located NE Estes Park. Former church facility-- marketed as RM-zoned site capable of constructing 12 apt units. Sold to owner-user for Estes Park Senior Citizens Center. Property was in very good condition, handicapped-accessible, good restrooms, covered drop-off, heat and A/C. SUMMARY OF COMPARABLE ESTES PARK AND COMPETING LOCATIONS COMMERCIAL PROPERTY SALES This and 2551 Hampshire were purchaseD together in 2022 by these sellers. They then remodeled both properties and installed tenant Once Upon a Childcare. Property advertised as 11-years remaining, NNN lease, asked $3.615M and a 6.38% Cap Rate. Sold at $6.168M on $30.25/SF Rent => 7.28% Cap Rate. This older daycare center sold from some owner-users to an investment group in Sept-2022. Property has some deferred maintenance that was factored into sales price. Shortly thereafter, new buyers landed natl-chain (>100 locations Kid City onnew 15-yr NNN lease. Resold Nov-2022 at $415/SF, indicated Cap Rate 6.57%. Owner-to-Owner sale of child care center in eastern Windsor. Building constructed in 2005, destroyed in 2008 tornado, then rebuilt. Very attractive, good grounds with large paved parking and modern playground. Buyer has several similar operations in Greeley area. Last sale of Subject. At that time, current tenants Mountaintop Childcare Inc had just signed new 7-yr lease with avg rent rate (over 7 yrs) at $22.11/SF. Deduct 3% avg expenses, indicated avg NOI is $40,112 /yr => 8.31% cap rate. Property entailed some risk-- current tenants had taken over business and there were some undisclosed issues from seller (J&J Enterprises/ Ayotte). Ayotte had purchased in Jan-2018 $370k, then sold business to Mountaintop in mid-2018. Subject daycare is avg-quality 1-sty bldg on 0.87-acre site in SE Estes Park. Wood frame construct w/wood siding/shingled roof. Bldg is 1,870 SF, built 1985, avg-good condition (new flooring, a/c installed, new fencing). Site imps 9-space parking /fenced playground. Relatively large site has approx 0.40-acres open, unused. Has 28-months of lease left avg $23.40/SF NNN. DRM Real Estate Advisors, LLC Consulting, Research Valuation Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 68 Comparable Sale No. 1: 1247 Riverside Drive, Fort Collins CO. SOLD Jun-2024. $3,167,680 on 7,625 SF GBA => $415/SF Leased Fee 7.28% Cap Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 69 Comparable Sale No. 2: 2464 Marquette Drive, Fort Collins CO. SOLD Sept-2022. $1,175,000 on 6,063 SF GBA => $194/SF Fee Simple RE-SOLD Nov-2022. $2,518,655 on 6,063 SF GBA => $415/SF Leased Fee 6.57% Cap Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 70 Comparable Sale No. 3: 1215 Automation Drive, Windsor CO. SOLD July-2021. $3,200,000 on 10,413 SF GBA => $307/SF Fee Simple Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 71 SUBJECT Comparable Sale No. 4: 1250 Woodstock Drive, Estes Park CO. SOLD Oct-2019. $469,500 on 1,870 SF GBA => $251/SF Leased Fee 8.31% Cap Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 72 Comparable Sale No. 5: Former Jehovah’s Witness Church, 1760 Olympian Lane, Estes Park CO SOLD May-2019. $525,000 on 2,500 SF GBA => $210/SF Fee Simple Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 73 COMPARABLE COMMERCIAL PROPERTY SALES MAP—ESTES PARK Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 74 COMPARABLE COMMERCIAL PROPERTY SALES MAP—ALL Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 75 Again, we attempted to find comparable sales with these characteristics: similar Gross Building Area, locational similarity (Estes Park), and older construction. Factors that enhance the value of the subject include: 1. Built in 1985 and partially updated into Average-Good Condition 2. 0.87-acre site size/ expansion potential Factors that detract from the value of the subject include: 1. Small Estes Park market (versus larger Front Range cities) 2. Average quality older building—constructed 1985 (39 years old) 3. Relatively small size Gross Building Area at 1,870 square feet 4. Limited existing parking with 9 paved sites In making comparisons, we adjusted the sale prices of the comparable sales for differences between the subject and the comparable sale properties. If the comparable was superior to the subject, a downward adjustment was made to the comparable sale. If inferior, an upward adjustment was made. In most cases, adjustments cannot be made with mathematical certainty. Adjustments tend to show a direction (inferior or superior) and a degree of difference (slight, moderate, or significant). For this analysis, we indicate a slight difference with a 5% adjustment, a moderate difference with a 10% adjustment, and a significant difference with a 15% or greater adjustment. On the Comparable Sales Adjustment Grid, each sale is compared to the subject and adjusted for differences in conditions of sale, financing, and date of sale. Each sale is then compared to the subject in terms of location, size (gross building area), age/quality/condition, finish, FF&E and functional utility, basement/mezzanine/additional building contributions, and site size / parking. The relative adjustments based on each of those comparisons are as shown in the grid. Comparable Sales Discussion The five comparable sales presented on the previous pages relate to the most recent commercial property sales in the Estes Park market (two) plus three daycare property sales on the Front Range that we believe present a reasonable indication of the subject’s Market Value from a commercial property perspective. In our mind, we see the two comparables in Estes Park as commercial buildings with reasonable similarity to the subject as a daycare. Beyond the 2019 sale of the subject itself, there simply are no similar daycare or preschool property sales in Estes Park. The sales on the previous pages indicate a price range of $469,500 to $525,000 (two Estes sales) and $1,175,000 to $3,200,000 on the three Front Range sales. The comparable sales range in size from 1,870 to 2,500 square feet, then up to 6,063 to 7,625 and 10,413 square feet. Clearly, the Front Range sales are far larger—the average of the five sales is 5,694 square feet versus the subject at 1,870 square feet. Based on the sales prices, the five sales display an unadjusted range of unit values from $194 to $415 per square foot and display an average of $276 per square foot and a median of $251 per square foot, which represents the subject’s 2019 sale. Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 76 Market Observations Utilized as the Basis for Adjustment Property Rights Conveyed - Again, the subject is a “tweener” in that it has a lease contract with 28-months remaining. Comparable No. 1 sold as a long-term investment with the cash flow from an 11-year lease in place, and the Subject (as Comparable No. 4) sold with a new 7-year lease in place. The other three sales transacted as vacant or owner-occupied property sales. Typically, owner-occupied properties sell for higher unit prices than pure investment properties—owner-occupants are more willing to pay for quality and location whereas investors ultimately focus on income stream and its durability. For Special Purpose properties like the subject, we believe the opposite is trues, and considered the two Leased Fee sales to be slightly superior. Conditions of Sale - As best we could determine, the comparables were all sold in typical transactions by typically- motivated private sellers. Therefore, no adjustments are indicated for Conditions of Sale. Financing - As best we can tell, the sales all involved typical market financing. Market Conditions/Date of Sale - Ideally, we would only use sales that occurred in 2024/2023 to reflect the current economic conditions. As stated, there were very few comparable sales from which to compare. There is only one 2024 sale. The next most recent traded in mid-2022, then one in mid-2021, and the last two in 2019. The 2019 sales are least desirable from a recent-sale-date perspective, but are clearly the best scope sales. We looked to see if there was any basis for upward adjustments for date of sale. Sales and re-sales of the same property—less any intervening physical changes to the individual properties—are the best measures of appreciation. The data here is not helpful. Generally speaking, we have been using increasing commercial rents in the Front Range market for all types of properties (retail, office and industrial) as the basis for adjustments for appreciation. There is no breadth of such data in the small Estes market, as evidenced by the range of sales dates in our analysis. In downtown, 400 E. Elkhorn just sold in February 2024 for $400,000, after previously selling in September 2009 at $200,000—so it doubled in 14.5 years. Its sale price then represented a 4.9% annual appreciation over its prior 2009 sale price, although they also spent a significant amount (unknown) of money on capital improvements to build the rear office in 2009. Thus, the gain is far less than 4.9% annually. Nicky’s Restaurant at 1350 Fall River was purchased in February 2019 for $1,200,000, and the buyer installed some $400,000 in improvements including a new roof, flooring and kitchen renovations. It then resold in March 2023 (4 years later) for $1,500,000 for a gain of 5.7% per year—arguably, it had negative appreciation when considering the 2019 purchase plus improvements cost. Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 77 Looking back, the property at 521 S. St Vrain sold in October 2020 for $425,000, after previously selling in 2014 at $310,000. Its sale price then represented a 4.3% annual appreciation over its prior 2014 sale price. Additionally, a property at 170 West Elkhorn Unit C sold in August 2020 for $350,000, after previously selling in 2016 at $325,000. Its sale price then represented less than 2.0% annual appreciation over its prior 2016 sale price. There is a commercial lot at 800 Big Thompson Avenue that exhibited a long-term sale/re-sale from 2008 to 2017, and the price difference equated to appreciation of 3.2% per year. There is also a commercial lot at 507 Grand Estates that exhibited a shorter-term sale/re-sale from 2012 to 2018, and the price difference equated to appreciation of 4.4% per year. Lacking sufficient paired sales to measure appreciation/depreciation in the Special Purpose market (churches, funeral homes, etc.), we note that we have significant market data that shows appreciation across the spectrum that support at least a 3% annual appreciation rate for more mainstream commercial properties like retail, lodging, and industrial. Ultimately, we then made 3% annual upward adjustments to all five transacted comparable sales. All told, the time adjustments ranged from 0.2% (the 2024 sale) to 5.3% and 8.8% for the 2022 and 2021 sales, up to 14.1% to 15.4% for the two 2019 sales, so they appear reasonable. Next, we make adjustments for physical differences: Location: This adjustment is supported by the combined differences in underlying land value (objective) and relative desirability of the various locations (subjective). We have discussed the subject’s mid-block location on Woodstock. It is not on an arterial street with visibility. We consider the subject’s location similar to the non-visibility location of itself as Comparables No. 4 and No. 5 on Olympian Lane. Value differences between the relative locations of Front Range cities and Estes Park are very difficult and very subjective. In this case, since daycare needs are driven by residential population, we looked at the median sales prices of single-family homes in Estes Park and the two Front Range cities, Ft Collins and Windsor. The median price in Estes Park in 2023 was $650,000 while the median home price in Fort Collins in the same time period was $525,000, so the difference is 23.8%—we adjusted upward significantly (15%) for inferior location in Ft Collins. Similarly, the median home price in Windsor in the same time period was $545,000, so the difference is 19.2%—again, we adjusted upward significantly (15%) for inferior location in Windsor. Size: This adjustment is based on the theory of an inverse relationship between size and unit value with smaller buildings achieving higher unit values than their larger counterparts, all other things being equal. In the spectrum of the commercial property sales herein, the subject at 1,870 square feet is very small which tends to skew its unit price upward. Only Comparable No. 5 at 2,500 square feet is relatively close, and we still consider it at least slightly inferior (larger). Comparables No. 1, No. 2 and No. 3 are all significantly larger (inferior) at 6,063 to 10,413 square feet or 3-times to 5-times larger. Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 78 Age / Quality: Four of the comparable sales buildings were built between 1972 and 1985 with one built in 2005, and four were remodeled versus the subject built in 1985. Clearly, the subject’s construction quality is Average at best. Ultimately, we considered the two Ft Collins comparable sales slightly superior overall, and the Windsor property (Comparable No. 3) is significantly superior. Comparable No. 5 is judged net similar—superior construction quality versus older age. Condition: This is the most subjective adjustment. The subject has had some updating in the last few years including new air conditioning, all new flooring and a new playground fence. Compared to itself as Comparable No. 4, the subject in 2019 is moderately inferior. Similarly, Comparable No. 2 which was purchased before it had renovations is moderately inferior to the subject today. Conversely, the other three comparable sales are clearly moderately to significantly superior in condition versus the subject. FF&E and Functional Utility: Again, the subject is being appraised strictly as real property with no value accorded any personal property. As a daycare use, Comparables No. 1 and No. 3 are both at least moderately functionally superior because they have been remodeled/renovated to current code. Functionally, both Comparables No. 2 and No. 4 (Subject) are similar to the subject in its current functionality. Comparable No. 5 sold as a church—it was nice, but significantly functionally inferior as to a daycare (primarily plumbing-wise). Basement / Additional Buildings: Basement and mezzanine areas and additional buildings typically contribute value as additional storage or office space. The subject does not have a basement or mezzanine, and none of the comparable sales do either. Site Size / Parking: The subject has a 38,028 square-foot lot. Again, we earlier stated that the site may constitute Excess Land as to the extra unused land area. Conversely, all four comparable sales have site sizes at least as large as the subject’s site, and one has a site twice as large. Further, they all have superior parking capability, albeit in support of larger buildings. Ultimately, a larger site does make a property superior in and of itself. That said, the subject’s large Land/Building ratio is judged superior versus all the comparable sales, while their superior parking capabilities offset that advantage. As a result, no net adjustments are indicated in this category. ECONOMIC ADJUSTMENTS (CUMULATIVE) PROPERTY CHARACTERISTIC ADJUSTMENTS (ADDITIVE) No. Price PSF & Date Property Rights Conveyed Conditions of Sale Financing Market* Conditions Subtotal Location Size Age, Quality Condition FF&E and Utility** Basement/ Addl Bldgs Parking/ Site Size Adj. Price PSF Overall 1 $415 Leased Fee/Market Arms-Length None Inferior $395.12 Inferior Larger Superior Superior Superior Similar Similar $395 Similar Jun-24 -5.0% 0.0% 0.0% 0.1% -4.9% 15.0% 15.0% -5.0% -15.0% -10.0% 0.0% 0.0% 0.0% 2 $194 Fee Simple/Market Arms-Length None Inferior $204.06 Inferior Larger Superior Inferior Similar Similar Similar $275 Inferior Sep-22 0.0% 0.0% 0.0% 5.3% 5.3% 15.0% 15.0% -5.0% 10.0% 0.0% 0.0% 0.0% 35.0% 3 $307 Fee Simple/Market Arms-Length None Inferior $334.41 Inferior Larger Superior Superior Superior Similar Similar $318 Superior Jul-21 0.0% 0.0% 0.0% 8.8% 8.8% 15.0% 15.0% -15.0% -10.0% -10.0% 0.0% 0.0% -5.0% 4 $251 Leased Fee/Market Arms-Length None Inferior $272.16 Similar Similar Similar Inferior Similar Similar Similar $299 Inferior Oct-19 -5.0% 0.0% 0.0% 14.1% 8.4% 0.0% 0.0% 0.0% 10.0% 0.0% 0.0% 0.0% 10.0% 5 $210 Fee Simple/Market Arms-Length None Inferior $242.24 Similar Larger Similar Superior Inferior Similar Similar $266 Inferior May-19 0.0% 0.0% 0.0% 15.4% 15.4% 0.0% 5.0% 0.0% -10.0% 15.0% 0.0% 0.0% 10.0% Price Range Unadjust $/SF Adj. $/SF *Market Conditions Adjustment Low $194 $266 Compound annual change in market conditions: 3.00% High $415 $395 Date of Value (for adjustment calculations): 26-Jun-24 Median $251 $299 Average $276 $311 ** Utility includes loss factor, floor plates, etc. Indicated Value per Square Foot NRA $300 $311 Gross Finished Area in Square Feet x 1,870 x 1,870 Market Value "As Is" Indication $561,000 $581,570 Rounded To:$561,000 $582,000 8 Per square foot $300.00 $311.23 COMPARABLE ESTES PARK COMMERCIAL SALES ADJUSTMENT TABLE USING 3% APPRECIATION SALES SUMMARY INDICATED MARKET VALUE Sales Comparison Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 80 Conclusion Prior to comparisons, the comparable sales indicated an un-adjusted range of value from $194 to $415 per square foot, and display an average of $276 per square foot and a median of $251 per square foot. After adjustments, the five comparables indicate a unit value range for the subject from $266 to $395 per square foot, with an average of $311 per square foot but a median of $299 per square foot. None of the comparables individually are ideal—except for the subject’s 2019 sale itself which after adjustments indicates a current value of $299 per square foot. Otherwise, they all have something significant that is different. Overall, the statistical data provides strong value indications. The subject’s adjusted sales price is the median, while the five sales together average $311 per square foot. Therefore, considering the comparable sales and all the comparison factors, the subject is thought to have a value of $300 to $311 per square foot (representing the median and average indicated values) of Gross Building Area. The subject's estimated Market Value is then calculated as shown: MARKET VALUE “AS-IS” Gross Building Area: 1,870 1,870 Concluded Price Per Square Foot: X $300 X $311 Market Value “As Is”: $561,000 $581,570 Rounded (Nearest $1,000): $561,000 $582,000 Therefore, the total indicated Market Value of the subject property in its “As-Is” condition in Fee Simple Estate by the Sales Comparison Approach is: Rounded: $561,000 to $582,000 Test of Reasonableness--Appreciation As a Test of Reasonableness, we applied a simple annual appreciation factor of 3% to 6% to the subject’s October 2019 purchase price of $469,500. The four calculations result in value indications from $539,000 to $616,000. Rationally, considering the time frame and impact on commercial properties from Covid 19 plus the tempering caused by the rapid increase in commercial mortgage rates, a rate of 3% to 4% is likely plausible. A sustained average rate of 5% annually for that time period is aggressive, but there is virtually no support for a steady average rate of 6% annually. Thus, our value range appears to have some reasonable support. 3% Annualized Appreciation: $539,000 4% Annualized Appreciation: $569,000 5% Annualized Appreciation: $590,000 6% Annualized Appreciation: $616,000 Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 81 COST APPROACH—Test of Reasonableness The Cost Approach involves estimating the current replacement cost of the improvements, less any depreciation as of the date of the appraisal, plus the estimated value of the land. The land value is developed through comparing recent sales of similar vacant parcels to the subject site as if vacant and available to be put to its Highest and Best Use. The estimates of replacement costs are based on the Marshall Valuation Service and knowledge of the local market. In this case, the Cost Approach is used as a Test of Reasonableness and a measure of scope—a Cost Approach is not considered a good measure of value for a property with improvements that are nearly 40-years-old, but it helps measure the subject’s scope with its relatively large site size and very small building. Land Value The first step in the Cost Approach is to estimate the value of the land "as vacant" and ready to be developed. Since land is the residual factor of production, it is always valued "as though vacant and available" to be developed to its Highest and Best Use. In order to estimate land value for the subject's primary site, a search for comparable land sales and listings in the subject's area and competing areas was performed. In land sales, location and zoning (or the ability to get zoning) are critical factors. As the following data shows, there have been very few comparable land sales. Estes Park is physically constrained in its potential land area by the surrounding mountains, the river and Lake Estes—there is simply only so much land area within that valley. At this point, much of that land area has been consumed, so there are relatively few vacant land parcels remaining. As one moves from the core of Estes Park, the land that is available becomes harder to develop because of utility extension and slopes/elevation (the potable water system can only push water under pressure so high), while also facing political pressure to remain open (typical of many mountain towns, a vocal segment of the citizenry simply do not want more development). In total, we found eight (8) sales of C-O Commercial Outlying land ranging as far back as 2013 that have reasonable comparability to the subject site. Overall, the comparable sales range in size from 11,801 square feet to 93,005 square feet (0.27-acres to 2.14-acres) with a median size of 0.87-acres versus the subject at 0.87-acres. Thus, the subject site’s size is essentially right at the median size of all the comparable sales. Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 82 COMPARABLE ESTES PARK COMMERCIAL LAND SALES MAP Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 83 Comp Land Sale No. 1: TBD St Vrain Lane (0.27-Acres). Sold Sept-2021 $12.71/SF Comp Land Sale No. 2: 2255 Big Thompson Avenue (2.14-Acres). Sold Mar-2020 $8.07/SF Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 84 Comp Land Sale No. 3: 800 Big Thompson Avenue (1.94-Acres). Sold Sept-2018 $9.76/SF Comp Land Sale No. 4: 490 Prospect Village (0.47-Acres). Sold Mar-2018 $6.92/SF Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 85 Comp Land Sale No. 5: 507 Grand Estates Avenue (0.90-Acres). Sold Aug-2017 $10.54/SF Comp Land Sale No. 6: 455 S. St Vrain (1.16-Acres). Sold Nov-2016 $11.68/SF Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 86 Comp Land Sale No. 7: 519 S. St Vrain (0.55-Acres). Sold Dec-2014 $4.57/SF Comp Land Sale No. 8: Redevelopment Site, 1181 Graves Ave (0.83-Ac). Sold Sept-2013 $10.64/SF Alternately known as 540 S St Vrain Avenue. COMPARABLE ESTES PARK COMMERCIAL LAND SALES ZONED C-O Daycare Site, 1250 Woodstock Drive Sale Sale Size SF Price Time No.Name and Location Date Price Size Acres Per SF Adjust At Utilities Zoning Comments Sub Lot 14 Deville 26-Jun-24 Lot 14 38,028 2.0% All C-O We Be TCB LLC to TBD 1250 Woodstock Drive 0.87 Comm Outlying Estes Park 1 Vacant Site 30-Sep-21 $150,000 11,801 $12.71 $13.41 All C-O Garth & Catherine Lewis to Jeremiah & Diann Wilson TBD St Vrain Lane 0.27 Comm Outlying Estes Park 2 ReDevelopment Site 7-Mar-20 $750,250 93,005 $8.07 $8.76 All C-O Coleman Family Partnership to Colo Dept of Transportation 2020021071 2255 Big Thompson Avenue 2.14 Comm Outlying Estes Park 3 Lot 1 Stanley Hills Sub PUD 19-Sep-18 $825,000 84,492 $9.76 $10.89 All C-O Jeffrey & Tami Berger to Ryan Wells/Philip Hinrichs 20180058098 800 Big Thompson Avenue 1.94 Comm Outlying Estes Park 4 Vacant Corner Site 28-Mar-18 $141,744 20,473 $6.92 $7.79 All C-O Sheri Rodgers to Croft Properties LLC 20180018221 490 Prospect Village 0.47 Comm Outlying Estes Park 5 Vacant Commercial Site 18-Aug-17 $415,000 39,368 $10.54 $11.99 All C-O Equinox Comm Inv LLC to FNPKROPP Real Estate Investments 20170056168 507 Grand Estates 0.90 Comm Outlying Estes Park 6 ReDevelopment Site 23-Nov-16 $590,000 50,530 $11.68 $13.45 All C-O Timberline Corner to Vaquero EPK Partners LP 20160080864 455 S. St Vrain Avenue 1.16 Comm Outlying Estes Park 7 Development Site 4-Dec-14 $110,000 24,096 $4.57 $5.44 All C-O Bank of Colorado to Verus Commercial 20140070790 519 S. St Vrain 0.55 Comm Outlying Estes Park 8 ReDevelopment Site 7-Sep-13 $385,500 36,242 $10.64 $12.94 All C-O Equity Trust Co/Peterson IRA to OReilly Automotive 20130085818 540 S. St Vrain Avenue 0.83 Comm Outlying Estes Park SUBJECT Lot 5 & 6 0.80 - 0.885 At Sale Adj to Today Minimum $110,000 11,801 $4.57 $5.44 Maximum $825,000 93,005 $12.71 $13.45 $10.60 /SF For Lot 14 @ 38,028 SF =>$403,000 Average $420,937 45,001 $9.36 $10.58 $11.00 /SF For Lot 14 @ 38,028 SF =>$418,000 Median $400,250 37,805 $10.15 $11.44 Corner site on St Vrain at Graves Avenue. Formerly the Old Mountaineer Restaurant, but it closed several years before. Buyers demolished the old building and constructed new Checker O'Reilley auto parts store. This is a corner site on Riverside and Prospect Village, next to Estes Park Brewery. Developed with an outdoor recreation business (ropes, climbing, etc). Subject is C-O zoned commercial lot with interior locatios on Woodstock Dr, off arterial St Vrain. The lot is nearly rectangular, slightly sloping and contains 0.87-acres. Adjacent self- storage (south), vet hospital (north) and backs to apartment complex (east)> Relatively small commercial-zoned parcel, suitable for development with appropriately-sized improvements. Cul-de-sac location--secondary commercial non-visibility site with atypical access. Zoned C-O--does not permit residential. Mid-block, relatively hidden site in eastern Estes off Big Thompson Ave. Lot is rectangular, slightly sloping, with new sidewalk/curb cut. Sold at $312,500 in April-2008. Listed at $448k for a couple years--sold at $415k. Rezoned multi-family. Corner site on St Vrain at Stanley. Former motel, so site included water credits totaling $121k (but not transferrable, so not $-for-$ value contribution). Bought to redevelop with Dollar General. Lender/foreclosure sale of hillside parcel on arterial St Vrain at Stanley Ave. Site has some development issues due to its terrain, irregular shape and small size, which all place some limits on its potential. Developed with Ziggi's Coffee. Hillside parcel on north side of Big Thompson Ave at eastern entrance to the Stanley Village shopping center. Listed at $1.2 Million for 3 years before finally selling at $825k. Sold at $725k Dec-12, indicates 4.4%/yr appreciation. Developed w/multi-tenant commercial including urgent care. Sloping parcel on north side of Big Thompson Ave at eastern entrance to Estes Park. Listed Jul-2016 at $1.2 Million for 18 Months, re-listed $750k in 2018 and sold at $750k--total 3.5- years on the market. Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 88 Factors that contribute to the subject’s value include: 1. Slight slope (versus moderate or significant slope) 2. Flexible C-O Outlying Commercial zoning Factors that are detrimental to the subject’s value include: 1. Non-visible peripheral location 2. Slightly irregular-shape The eight comparable sales range in sales price from $110,000 to $825,000 and in unit price from $4.57 to $12.71 per square foot, with a median price of $10.15 per square foot. Since the sales have a wide range of transaction dates (back 10+ years), we must adjust for Date of Sale versus our Effective Date of June 26, 2024. To measure appreciation, we note Comparable No. 3 sold in September 2018 for $825,000, after previously selling in December 2012 for $725,000—a gain that represents annualized appreciation of 4.4% per year. That said, we adjust more conservatively and ultimately use an annual appreciation factor of 2%. Thus, we make 2% annual upward adjustments to all eight transacted comparable sales. After adjustments for Date of Sale, the eight comparable sales range in unit price from $5.44 to $13.45 per square foot, with a median price of $11.44 per square foot versus an average of $10.58 per square foot. Certainly, the subject’s upper boundary on value is at the statistical value points. We note that the most recent sale, Comparable No. 1, sold in September 2021 for $150,000 which equates to a unit price of $12.71 per square foot. After adjustment for Date of Sale, a price of $13.41 per square foot is indicated. It is an interior site like the subject site. However, it is a very small site at just 11,801 square feet or 0.27-acres, so a significant downward adjustment is indicated for smaller size. Arguably, the buyer was at least slightly atypically motivated, which then indicates a slight downward adjustment. After adjustments, it indicates a value point of $10.83 per square foot. Generally speaking, five comparable sales are arterial frontage sites on Big Thompson Avenue or South St. Vrain Avenue which makes them superior in location. Conversely, the adjusted median of all eight sales is $11.44 per square foot while the average is $10.58 per square foot, so a midpoint of $11.00 per square foot is indicated. Ultimately, the subject’s site is estimated to have a Market Value of $10.75 per square foot. Accordingly, the estimated Market Value of the subject site by the Sales Comparison Approach is: 38,028 SF x $10.75/ SF = $408,801 ROUNDED: $409,000 Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 89 Value of the Improvements To estimate replacement cost of the improvements, the Marshall Valuation Service, adjusted for local variables, has been utilized. The base cost factor for a Low-Cost and an Average Quality Class D (wood frame construction) daycare center building is used. Cost details are found in Section 18, Page 13 of the Marshall Valuation Service published by Marshall-Swift Publishing Company. The latest data report is February 2023. The building is really a plain wood frame box with wood panel siding and asphalt-shingles on a simple gable-style roof. It has some architecture features of a Low Quality building, but also fits the category of Average Quality. We split 50% / 50% of each quality level’s base price of $122 per square foot (low-cost quality) to $168 per square foot (average quality). Since the air conditioning was just added a couple years ago, we add an individual line item for air conditioning. Marshall Valuation then adds factors to adjust for the physical variables from a “base” building including wall heights and shapes (a 10,000 square-foot building that is 100 x 100 has 400 linear feet of walls and is much less expensive to build than one that is 250 x 40 and has 580 linear feet of walls). We also adjust from the base data of the cost page (February 2023) to current date (July 2024 was just delivered) and for location (Loveland is closest). Site improvement costs are then added, based on the lot area of 38,028 square feet and an average cost of $1.50 per square foot, recognizing the small area involved in the parking area improvements and backyard and much of the site being native land cover. Soft costs (site planning, engineering, city fees, etc.) are estimated at 12%—they generally range from 10% to 15%. In today’s market, entrepreneurial (developer's) profit is difficult to find. However, we believe any new construction must have at least some entrepreneurial profit to justify construction, so we have used a minimal allowance of 5%. Physical depreciation is estimated using the modified age-life method. This is where the Cost Approach becomes most subjective for an older property. The subject was built in 1985 and does not appear to have been “remodeled” per se—it has had periodic repair and replacement of some components (e.g., new flooring) that is normal maintenance and repair. It still has “bones” (structure, siding, plumbing and electrical systems) that are 39 years old. Most buildings that are still operational have Effective Ages less than their Chronological Ages. Earlier in the report we estimated an Effective Age of 19.5 years, or half of its Chronological Age. Marshall Valuation Cost Approach DRM Real Estate Advisors, LLC Consulting, Research & Valuation 90 shows an Economic Life of 35 years for low-cost quality and average-quality daycare buildings. Thus, physical depreciation of 55.71% (19.5 Years / 35 Years) is indicated. There are no obvious signs of functional depreciation and the building should be adequate for its current use as a daycare. No obviously negative external conditions exist in the neighborhood, so economic obsolescence is not indicated. The previously-estimated land value of $409,000 is added to this estimated improvement value to get a final indication of Market Value. The total estimated value of the improvements via the Cost Approach is developed on the following page. Accordingly, the estimated Market Value of the subject property “As-Is” by the Cost Approach is: Rounded: $605,000 (Rounded) Gross Building Area: 1,870 SF Land Area (Sq.Ft.): 38,028 SF Property Type: Day Care Centers Section: 18 Property Class (Const., Not Quality): Class D (Wood Frame) Page: 13 Property Quality: Low-Cost to Average Date: Feb-23 Replacement Cost New (RCN) GBA (SF) $/GBA Sub-Total Total Cost Building Improvements Base Cost--Low-Cost Quality 50% 1,870 $122.00 $114,070 Base Cost--Average Quality 50% 1,870 $168.00 $157,080 Base Cost--Central Air Conditioning 100% 1,870 $10.55 $19,729 Fire Sprinklers NOT SPRINKLED 0 $0.00 $0 Sub-Total 1,870 $155.55 $290,879 Multipliers Current Cost: Jul-24 1.010 Local Area: Loveland (closest) 1.000 Perimeter: Approx 184' 1.100 Building Height: 10' 1.000 Combined Multiplier 1.111 Adjusted Base Building Cost $172.82 $323,166 Site Improvements (Price/SF of Gross Land Area) $1.50 $54,237 TOTAL DIRECT COSTS $377,403 Plus: Other Indirect Costs (% of Total)12.00%$45,288 Plus: Entreprenurial Profit (% of RCN)5.00%$18,870 TOTAL REPLACEMENT COST NEW (RCN) $441,562 Less: Accrued Depreciation: Physical Incurable Depreciation Chronological Age (Years): 1985 39 years Effective Age (Years):Some Renovations 19.5 years Economic Life: 35 years Total Physical Incurable Depreciation: . 55.71% ($246,013) Functional Obsolescence:0.00% $0.00 Economic Obsolescence:0.00% $0.00 Total Depreciation (All Forms):55.71%($246,013) TOTAL DEPRECIATED VALUE OF THE IMPROVEMENTS $195,549 Per Square Foot (Based on Gross Building Area):$104.57 Depreciated Value of the Improvements $195,549 Plus: Land Value (Primary Site):38,028 $10.75 $409,000 Indicated Value by the Cost Approach:$604,549 Less: Deferred Maintenance $0 Adjusted Cost Approach Value:$604,549 FINAL ADJUSTED COST APPROACH VALUE: $604,549 ROUNDED TO: $605,000 Per Square Foot (Based on Gross Building Area): $323.53 MARSHALL SWIFT COST ESTIMATE ASSUMPTIONS AND REPLACEMENT COST PARAMETERS REPLACEMENT COST ANALYSIS DEPRECIATION (ALL FORMS) COST APPROACH SUMMARY (RCN + LAND VALUE + ADJUSTMENTS) Reconciliation DRM Real Estate Advisors, LLC Consulting, Research & Valuation 92 RECONCILIATION The purpose of this appraisal is to estimate Market Value of the subject property in its “As Is” condition. Inherent in the definition of “Market Value” is the requirement to reflect the attitudes of "typical" buyers and sellers in the marketplace. The subject is the “Mountain Top Preschool and Child Care” daycare property that consists of a one-story daycare building located on a 0.87-acre site on Woodstock Drive in southeast Estes Park. The building is average-quality wood frame construction with wood siding and an asphalt- shingled gable roof. The building contains 1,870 square feet, was built in 1985 and is in Average-Good condition. The property is currently owned by WeBe TCB LLC, and has been since they purchased it in October 2019 from J & J Enterprises, Inc. for $469,500. The property is encumbered by a 7-year lease contract that started in November 2019 and has Base Rent that escalates 2.5% annually and includes NNN (net) terms). That current lease runs through October 2026 (28 more months) plus the Tenant also has the Option to Extend another 36 Months (to 2029), so it is an important factor in valuation. We use an Income Approach to value the property’s current income stream, based on the average rent remaining over the next 28 months. We use a Sales Comparison Approach as a Test of Reasonableness, but comparable sales are very limited in Estes Park and the Front Range sales are far larger. Lastly, also as a Test of Reasonableness, we perform a Cost Approach which measures the value of the underlying site plus contributory value of the existing building. The values developed by these approaches are as shown below: “As-Is” 1,870 Square-Foot Daycare Property Cost Approach: $605,000 Site Value 38,028 SF @ $10.75/SF $409,000 Income Approach: $590,000 Estimate Net Op Income $40,832 Cap Rate at 6.90%: $592,000 Cap Rate at 7.30%: $559,000 Sales Comparison Approach: $580,000 Analysis $300/SF on 1,870 SF $561,000 Analysis $311/SF on 1,870 SF $582,000 Appreciation on 2019 Sale of $469,500: $590,000 3% Annualized Appreciation: $539,000 4% Annualized Appreciation: $569,000 5% Annualized Appreciation: $590,000 6% Annualized Appreciation: $616,000 In the Income Approach, we analyzed the contract income stream that remains in the current lease (28 months), estimated operating expenses, and capitalized the estimated Net Operating Income into an indication of Market Value into value indications of $559,000 to $592,000. In the Sales Comparison Approach, we looked at the limited number of commercial property sales in Estes Park, including the subject’s last purchase in 2019. After comparison and adjustments, a value range of $561,000 to $582,000 is indicated. We also applied simple Reconciliation DRM Real Estate Advisors, LLC Consulting, Research & Valuation 93 appreciation rates of 3% up to 6% to the 2019 purchase price, which indicates a reasonably supported range of $569,000 to $590,000 based on appreciation of 4% to 5%. We used the Cost Approach as a Test of Reasonableness and a measure of scope—a Cost Approach is not considered a good measure of value for a property with improvements that are nearly 40 years old. However, it does help measure the value of the relatively large site. In the Cost Approach, we estimated Market Value of the underlying site and added the depreciated replacement costs of the existing improvements. Ultimately, the Cost Approach indicated a value that was slightly higher at $605,000 than the value indications from the Income and Sales Comparison Approach, but is nonetheless supportive. We understand the Town of Estes Park is interested in purchasing the subject property to continue providing daycare service to Town residents. Reportedly, current property ownership has expressed a few value points from $650,000 to $700,000 and more, but the purchase price 4.67 years ago coupled with the current lease encumbrance (plus potential Tenant extension option) provides strong value indications as discussed herein. That said, we must also give some credence to the value of the underlying site which, at $10.75 per square foot or $409,000, indicates that the current daycare improvements/use is the Highest and Best Use “As-Is” and re- development is not indicated. Accordingly, we reconcile to a midpoint in the range of value indications from the three approaches. The data and opinions expressed in this appraisal are subject to the Assumptions and Limiting Conditions stated in the report. Based on the assumptions and analysis herein, the estimated Market Value of the subject property (1,870-Square Foot Daycare Property on 0.87-Acre Site) in “As Is” condition in Fee Simple Estate as of June 26, 2024, is SIX HUNDRED THOUSAND DOLLARS $600,000 Respectfully submitted, DRM REAL ESTATE ADVISORS, LLC Christopher D. Ruff Principal State of Colorado Certified General Appraiser No. CG1316795 (12/31/2024) Addendum DRM Real Estate Advisors, LLC Consulting, Research & Valuation 94 ADDENDUM ENGAGEMENT LETTER / EMAIL LARIMER COUNTY INFORMATION LEASE CONTRACT EXCERPTS QUALIFICATIONS OF THE APPRAISER Addendum DRM Real Estate Advisors, LLC Consulting, Research & Valuation 95 ENGAGEMENT LETTER / EMAIL 1 Chris Ruff From:Carlie Bangs <cbangs@estes.org> Sent:Tuesday, June 25, 2024 11:49 AM To:Chris Ruff Subject:Re: Scope of Work and Cost Hi Chris, Welcome back from Alaska! Christy, the childcare director, is available to meet on Wednesday afternoon to give you the walk through. Does that work for you? I’ll go ahead and put you both in contact with one another! Carlie Speedlin Bangs On Wed, Jun 19, 2024 at 9:41 AM Chris Ruff <cdruff@drmrealestate.com> wrote: I’m still in Alaska until Sunday 6/23, so I can send you an invoice on Monday 6/24. Scope of Work includes an Appraisal Report with an Income and Sales Comparison Approach, and maybe a Cost Approach as a Test of Reasonableness. Delivery NLT June 10, Fee $3,250. Sent from my iPhone On Jun 17, 2024, at 13:55, Carlie Bangs <cbangs@estes.org> wrote: Hi Chris, Can you please send a proposal/invoice including the scope of work and expected cost for the appraisal? I'll need to push that through leadership to get approval for spending. Thanks! -- Carlie Speedlin Bangs Housing & Childcare Manager Town of Estes Park Town Hall Room 140 (970) 577-3894 Schedule a Meeting Addendum DRM Real Estate Advisors, LLC Consulting, Research & Valuation 96 LARIMER COUNTY INFORMATION Addendum DRM Real Estate Advisors, LLC Consulting, Research & Valuation 97 LEASE CONTRACT EXCERPTS Addendum DRM Real Estate Advisors, LLC Consulting, Research & Valuation 98 QUALIFICATIONS OF THE APPRAISER Qualifications Christopher D. Ruff Professional Affiliations State of Colorado Certified General Appraiser - License No. CG1316795 Real Estate Appraisal and Business Experience 2003 to Present: Principal, DRM Real Estate Advisors, LLC. Perform commercial/residential Real Property appraisals for a variety of clients including lending institutions, municipalities, businesses and private individuals. Additional services include general real estate consulting and property tax consulting. 1989 to Present: Owner, R&N Property Consultants. Perform residential/commercial property appraisals for lending institutions and individuals. Additional services include general real estate consulting and property tax consulting. 1990 to Present: Owner/manager various real estate properties including commercial and industrial park development land, office-warehouses, multi-tenant retail, land lease, commercial condominiums, self- storage, special purpose (ice arena). 2012 to Present: Arbitrator and Referee, Boulder County Board of Equalization. Education Degrees: 1980 - BS in Civil Engineering, U.S. Air Force Academy, CO 1984 - MS in Engineering Management, Air Force Institute of Technology, OH Technical courses including: Uniform Standards of Professional Appraisal Practice Appraisal Standards and Ethics Water Law I Real Estate Practice and Law Water Law II Appraisal of Income Properties I Appraisal of Income Properties 2 Commercial and Investment Real Estate Real Estate Investment Analysis Real Estate Exchanges Under Section 1031 Property Inspection Appraisal and Consulting Expertise in the Following Property Types Warehouses and Manufacturing Special Purpose Properties Office-Warehouse Condominiums --Churches Retail Buildings and Retail Condominiums --Convenience Stores Restaurants / Fast Food --Self-Storage Office Buildings and Office Condominiums --Motels and Hotels Multi-Family Complexes (Apartments/Townhomes) --Mobile Home Parks Raw Land and Developed Lots --Campgrounds Subdivision Analysis—Commercial and Residential --Ranches Referee—Property Tax CBOE & Arbitration (Boulder County and Weld County) Professional Witness Testimony July 2014, Bankruptcy Court, North Star Bank vs Gabrielsen: Property at 1015 S Lincoln, Loveland CO Qualifications Christopher D. Ruff Clients For Whom Appraisal and Consulting Services have been Performed JP Morgan Chase Bank Windsor State Bank Citywide Banks First National Bank–Colorado Western States Bank Wells Fargo Guaranty Bank and Trust Company Bank of Colorado FirsTier Bank Points West Community Bank Capital West Bank TBK Bank Northstar Bank Colorado Bank of Estes Park Advantage Bank Cache Bank and Trust Poudre River Trail Committee City of Fort Lupton Tri-County Bank - Wyoming First National Denver City of Greeley Community Bank of Mississippi Verus Bank of Commerce City of Loveland Wick & Trautwein LLC Universal Forest Products Town of Berthoud Otis & Bedingfield LLC Colorado Lending Source/SBA Town of Estes Park School District RE-4 Windsor Stockmen’s Bank Colo Springs Town of Windsor School District RE-8 Fort Lupton Security First Bank Wyoming Thompson School District R-2J First Advantage Bank REFERENCES Kristi L. Benningsdorf Branch President Points West Community Bank 295 E 29th Street, Ste 110 Loveland, Colorado 80538 970-541-2520 Thomas Prenger President and CEO Bank of Colorado - Front Range 1041 Main Street Windsor, CO 80550 (970) 686-7631 Darin Lanckriet Branch President Windsor State Bank 1130 Main Street Windsor, CO 80550 (970) 674-1488